Coinbase’s Ethereum layer-2 network, Base, experienced a massive surge in daily transactions, hitting 2 million on March 16, a notable increase from around 440,000 transactions per day before the Dencun upgrade. Since its launch by Coinbase in August, Base has quickly ascended within the Ethereum layer-2 ecosystem, now boasting a total value locked of $1.44 billion and a 4.1% market share.
The initial jump to 1.1 million transactions the day after the upgrade culminated in reaching 2,064,920 transactions. Simultaneously, daily new users surged to 666,866 on March 16, indicating a 3,200% increase from pre-upgrade figures. This 350% surge in both user engagement and transaction volume is directly linked to the significant drop in transaction fees on Base, which decreased by over 60% following the upgrade.
The Dencun upgrade, facilitated by EIP-4844, significantly lowered transaction fees on major layer-2 networks like Arbitrum, Optimism, Base, and zkSync Era by up to 90%. Following the upgrade, fees for token swaps on Uniswap’s Optimism deployment were reduced to as low as $0.01.
This fee reduction is evident across the Ethereum layer-2 ecosystem. Transaction costs on Optimism are now nearly 4 cents, a sharp decline from the prior average of about $1.4. Similarly, the transaction fee on Base dropped to 3 cents from roughly $1.50, and Arbitrum’s fees decreased to 40 cents.
In contrast to the layer-2 improvements, Ethereum layer-1 gas fees have remained notably high. For instance, an Ethereum transfer currently incurs a cost of around $2.1, a USDC transfer is about $5, and executing a swap on Uniswap costs approximately $16, as reported by Gasfees.io. This situation persists even as Ethereum’s price experienced fluctuations, surpassing $4,000 before adjusting to a current value of $3,635.
The Dencun upgrade, a significant milestone for the Ethereum network, was successfully deployed on the Ethereum mainnet on March 13, 2024. This upgrade represents a synthesis of two crucial components: the Ethereum consensus layer’s Deneb upgrade, enhancing the consensus mechanism among network participants, and the execution layer’s Cancun upgrade, which optimizes transaction processing.
The name “Dencun” itself is a portmanteau of these two upgrades, symbolizing the integration of their functionalities. According to official sources, the Dencun hard fork introduced nine separate Ethereum Improvement Proposals (EIPs), marking a comprehensive enhancement across the Ethereum platform.
