Ethereum's highly anticipated Dencun update, which went live on Wednesday, heralded a new era of cost efficiency for layer 2 solutions on the blockchain.
Ethereum's Dencun Upgrade Lowers Cost for Layer 2 Blockchains
The update moves away from the expensive call data method by introducing a groundbreaking mechanism that allows layer 2 solutions to use Binary Large Objects (blobs) to store data, significantly reducing transaction costs.
Initial results following the Dencun upgrade are promising, demonstrating significant cost reductions across a variety of layer 2 solutions.
According to blockchain analyst Marcov's Dune-based tracker, average transaction fees on the Optimism scaling solution have fallen to about 4 cents, from the previous average of $1.40.
Similarly, fees for Coinbase's layer 2 solution, Base, dropped from around $1.50 to 3 cents, while Arbitrum's fees dropped to 40 cents. Other layer 2 solutions such as ZkSync and Zora have also experienced significant reductions in transaction costs.
This innovation allows layer 2 aggregations such as Optimism, Arbitrum, and zkSync to process transactions more efficiently and cost-effectively.
*This is not investment advice.
