Ethereum\u2019s long-awaited Dencun hard fork is now complete, significantly bolstering the scalability of its booming Layer 2 ecosystem.<\/p>\n
Dencun went live on March 13, paving the way for a significant reduction in the costs associated with transacting on Ethereum L2s by replacing gas-intensive calldata with lightweight Binary Large Objects (blobs) via\u00a0EIP-4844<\/a>\u00a0\u2014 also known as proto-danksharding.<\/p>\n Unlike calldata, blobs do not compete with Ethereum transactions for gas and are pruned from the blockchain after roughly 18 days, dramatically improving data availability and lowering costs for Layer 2 rollups. Domothy, an Ethereum Foundation researcher, noted that several protocols will plan to host blob data indefinitely moving forward during a March 13 live-stream<\/a>.<\/p>\n David Silverman, the VP of Product at Polygon Labs, described blobs as a temporary storage space facilitating cheap and temporary data storage for rollups and decentralized applications. For rollups, Silverman said blobs mitigate the need for data compression and other \u201croundabout methods\u201d employed by Layer 2s to bring costs down.<\/p>\n <\/p>\n 0xVEER, the head of DevRel at Mantle, said data publication costs accounted for between 73% and 90% of rollup transaction fees prior to Dencun\u2019s activation.<\/p>\n IntoTheBlock, a crypto data analytics provider, estimated Dencun would reduce the price of swapping tokens using Layer 2-based decentralized exchanges by\u00a080%<\/a>.<\/p>\n Philippe Schommers, head of infrastructure at Gnosis, also predicted a cost reduction of at least 80%, but noted that handling blob data is \u201ccomplicated\u201d and may not be easily achievable by all types of L2s.<\/p>\n Karl Floersch, the CEO and Co-founder of Optimism Labs, said Dencun will reduce Layer 2 transaction costs by at least 90%.<\/p>\n Declan Fox, the Global Product Lead for Linea, said EIP-4844 could reduce the data availability cost of rollups by up to 90%, suggesting post-Dencun fee savings of between 65% and 80%.<\/p>\n However, Fox noted that the new fee market for blobs may still suffer from congestion-induced fee volatility. \u201cIf Rollups compete to have their batches included in L1 at a similar time in the day and the blob target of 3 per block is exceeded, then the price of blobs and therefore the L2 transaction prices will start to exponentially increase,\u201d Fox said.\u201d<\/p>\n <\/p>\n Start for free<\/a><\/div>\n <\/p>\n Despite the optimistic projections from many Layer 2 teams, others are holding back on estimating Dencun\u2019s impact until after the upgrade has taken full effect.<\/p>\n Ed Felten, the co-founder and chief scientist at OffChain Labs, the team behind Arbitrum, told The Defiant that there are too many variables informing transaction costs to make an accurate estimate regarding post-Dencun fee savings.<\/p>\n \u201cThere is a lot of uncertainty around the eventual price of EIP-4844 data blobs,\u201d Felten said. \u201cWe\u2019re confident that data posting will be cheaper than before, but there are too many variables to make even a ballpark estimate. We\u2019ll just have to see how things develop over the days and weeks after the upgrade.\u201d<\/p>\n Silverman said Polygon is also reluctant to try and quantify Dencun\u2019s impact, suggesting the transaction loads used to model EIP-4844 on testnets are lower than what the team expects Layer 2s to handle on mainnet.<\/p>\n Silverman also noted that many rollups still need to deploy their own upgrades implementing infrastructure supporting EIP-4844 before post-Dencun cost-reductions are realized in full.<\/p>\n \u201cI think it’s going to take about two months [before] we can really understand the impact of transaction fees, but we expect significant reductions across all of the L2s,\u201d he said.<\/p>\n The upgrade follows a recent uptick in\u00a0on-chain activity<\/a>\u00a0and transaction fees on Layer 2 amid bullish market conditions, with average fees jumping by between 100% and 800% across leading Layer 2 ZkSync Era, Arbitrum, and OP Mainnet since mid-October, according to\u00a0GrowThePie<\/a>.<\/p>\n The total value locked in Layer 2 networks is also at an all-time high of $39 billion after growing 262% in five months, according to L2beat.<\/p>\n Tom Ngo, the executive lead at Metis, described Dencun as creating more transaction supply to handle the increasing throughput demands of Layer 2.<\/p>\n \u201cThink of it as devs enabling more space on Ethereum for L2s to store their data,\u201d Ngo said. \u201cSince now there will be more space, L2s don\u2019t have to compete (bid) as hard against each other to fit these transactions, which reduces their costs.\u201d<\/p>\n Ngo added that projects leveraging third-party data availability solutions won\u2019t be impacted by the introduction of data blobs. Metis will soon migrate its data availability to EigenDA, with Ngo claiming the move will facilitate lower fees than other Layer 2s.<\/p>\n Stani Kulechov, the creator of Aave Protocol and CEO of Avara, emphasized that Dencun will reduce the barrier to users engaging with DeFi by lowering fees on Layer 2s.<\/p>\n \u201cThis is an important upgrade that will be felt by end-users in the form of lower fees that promote accessibility, especially for decentralized finance,\u201d Kulechov said. \u201cBy reducing these barriers, Dencun paves the way for innovation, adoption, and growth of Ethereum.”<\/p>\n Looking ahead, Ethereum core developers have already begun work towards\u00a0Pectra<\/a>, Ethereum\u2019s next major upgrade and hard fork.<\/p>\n Pectra will focus on introducing\u00a0Verkle Trees<\/a>\u00a0\u2014 a data structure paving the way for Ethereum to become stateless, meaning clients will not need to store Ethereum\u2019s entire state history to validate blocks. The update, also known as \u201cThe Verge\u201d, will significantly reduce the hardware requirements for validators, bolstering the network\u2019s decentralization.<\/p>\n \u201cI’m really looking forward to Verkle trees,\u201d Vitalik Buterin, Ethereum\u2019s co-founder and chief scientist, recently\u00a0tweeted<\/a>. \u201cThey will enable stateless validator clients, which can allow staking nodes to run with near-zero hard disk space and sync nearly instantly.\u201d<\/p>\n In January, Ethereum client developers\u00a0estimated<\/a>\u00a0Verkle Trees could take between 18 and 24 months to realize, meaning Pectra is likely to go live in 2025.<\/p>\nLayer 2 team anticipate huge fee reductions<\/h2>\n
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Layer 2 activity surges<\/h2>\n
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Ethereum developers turn attention to Pectra<\/h2>\n