‘Finally secured scalability’ after upgrading Ethereum L2s base and Optimism Dencun

Median transaction costs on Ethereum Layer-2 networks such as Optimism, Zora, and Base have plummeted since the Dencun upgrade went live yesterday.

Jesse Pollak, head of L2 Base, a Coinbase-founded company, said the difference is so stark that wallets will need to display additional decimal places for the new transaction fees of less than a penny.

From the screenshot Shared onHe showed that the same transaction that cost $0.31 before Dencun now looks like $0.00 but actually costs $0.0005.

He’s not the only one surprised by Dencun’s impact on Ethereum L2. “Reducing transaction fees and confirmation times at Layer 2 will open up even more use cases for the cryptocurrency,” Coinbase CEO Brian Armstrong wrote in X regarding the Ethereum upgrade. “Scalability has finally been secured.

One caveat is that not all L2s are ready to fully take advantage of the Dencun upgrade.

X’s native Optimism account shared a screenshot, showing that with transaction fees of less than a penny, it is currently one of the cheapest L2s for users.

The Dencun upgrade introduces proto-danksharding, a method of breaking large amounts of data into smaller pieces to process them more quickly. This speed and efficiency translates into lower operating costs for the L2 network, which are then passed on to end users as transaction cost savings.

This change was colloquially referred to as the introduction of 4844 or blob, a reference to EIP-4844. Blobs (or binary large objects) of data are used in Ethereum to convey large amounts of data without that data having to interact directly with a smart contract or L2 network.

So why use it?

The L2 network works by processing large quantities of transactions and then sending receipts for those transactions back to Ethereum. This way, each L2 user pays only a fraction of the fees required to send data to the Ethereum mainnet.

The way we worked before Dencun required storing data as call data. However, it was an imperfect solution because that data had to be processed by every Ethereum node and left permanently on the blockchain. These were two factors that increased operational and transaction costs.

Now chunks of data can be hit with a transaction block and automatically deleted within a few months. And the way it’s stored makes it cheaper to process than call data.

However, Anthony Sassano, a core Ethereum developer and host, every day wednesday The podcast cautioned that transaction costs may not always be as low as they are now.

“Blob-backed L2 gas prices are currently very cheap, but we can expect prices to rise slightly over time as demand for blobs increases,” he said yesterday. “This is expected behavior and that’s why 4844 is just the beginning. Blobs are an evolving primitive and part of a broader danksharding roadmap.”