While the Dencun upgrade made layer 2s transaction fees a lot cheaper, gas fees on Ethereum remain exorbitantly expensive.
The Dencum upgrade implemented on the Ethereum network on Tuesday has seen Layer 2 solutions on the blockchain drop drastically. Protocols like Optimism (OP), Base, Zksync, and Arbitrum all saw a 50% transaction fee drop with the change from call data to blobs.
While the Dencun upgrade is yet to reach all the L2s running on Ethereum, the immediate beneficiaries of the upgrade are experiencing some of the most favorable transaction fee rates across the entire crypto blockchain. It’s worth noting that the upgrade hasn’t affected Ethereum’s high transaction fees, but it’s a promising step towards more affordable transactions on Layer 2 solutions.
A Massive Fee Drop
Following the upgrade on Wednesday, over 80% of the Arbitrum network’s transaction charges were sliced off. The average fee has dropped from $2.02 to $0.5, with the median fee now $0.3552. Before Dencun, Arbitrum had one of the biggest transaction fees amongst the L2 networks on Ethereum.
Optimism, which just hit a new all-time high, also saw a 58% reduction in gas fees. The Layer 2 network had one of the best transaction fee rates on Ethereum but has further taken a hit following the Dencun upgrade. The average fee on Optimism now stands at $0.05, with a median cost of $0.0038.
The Base network leads the pack in terms of transaction fee drop, with more than 88% of its transaction fees chalked off. The average fee on Base moved from $0.58 to $0.0064, and the median fee is now at $0.0008.
Wen Ethereum?
Although the Dencun upgrade on the Ethereum network has made layer 2s quite competitive with other networks, transaction fees on its mainnet remain unchanged. Coinfomania has reported scenarios where users threw away thousands of dollars transacting ETH on the mainnet.
In November 2022, a user paid 93 ETH ($113,000) in fees to execute six transactions using a MEV bot. Another user reportedly spent approximately 216 ETH ($350,000) on a failed transaction on the network. Although the introduction of L2s on Ethereum provided alternatives for less costly transactions, users would still be angling for a reduction in the $18 average fee on Ethereum’s mainnet.
