Transaction Costs on Ethereum Layer-2 Drastically Drop Post Dencun

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The latest Dencun upgrade on Ethereum significantly reduces transaction costs across various layer-2 networks.

The Dencun upgrade has been successfully launched on the Ethereum network at block 269,568 or on March 13, 2024, around 9:00 PM WIB.

The primary objective of this enhancement is to improve Ethereum's scalability and affordability, as well as enhance the user experience.

This upgrade is expected to reduce Ethereum gas fees by at least tenfold. Base, a layer-2 solution, hopes that Dencun can reduce gas fees by up to 100 times on layer-2.

In addition to the significant reduction in gas fees, the Dencun upgrade includes several other important Ethereum Improvement Proposals (EIPs). EIP-1153 optimizes data storage and makes gas fees more economical, while EIP-7516 focuses on returning the basic costs of blobs.

EIP-4788 and EIP-5656 improve data accessibility and memory copying in the Ethereum execution layer. Meanwhile, EIP-6780 introduces measures to protect user funds by halting smart contract execution.

Figure: Layer-2 average gas costs. Source: Dune

Following the upgrade, the average transaction costs on Optimism layer-2 dropped to $0.1 (previously $2.44), Arbitrum dropped to $0.1 (previously $0.85), Base dropped to $0.14 (previously $1.21), and zkSync Era dropped to $0.14 (previously $0.55).


However, in terms of token performance on some layer-2 networks, there doesn't seem to be the expected price appreciation. Optimism (OP) experienced a decrease of -8.6% in the last 24 hours. Meanwhile, Arbitrum (ARB) experienced a decrease of -6.4% in the last 24 hours.

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