Ethereum L2s Show a Significant Drop in Transaction Fees After Dencun Upgrade

The Dencun upgrade went live on the Ethereum (ETH) network on March 13, which resulted in a significant decrease in the transaction fees on Layer-2 (L2) chains like Optimism, zkSync, Arbitrum, and Coinbase’s Base. Dencun is a scalability-focused upgrade on the Ethereum mainnet, with many considering it one of the most important upgrades since the Merge.

The Base network records an average transaction fee of $0.064 and a median fee of $0.0008. Optimism (OP) reports an average transaction fee of $0.05, with a median fee of $0.0038. The Arbitrum (ARB) network’s average transaction fee stands at $0.5, with a median fee of $0.3553. Meanwhile, zkSync Era displays an average transaction fee of $0.162 and a median fee of $0.0941.

Moreover, Starknet (STRK), a prominent Ethereum-based L2, has witnessed a 99% reduction in gas fees after the Dencun upgrade. According to a screenshot shared by Starknet’s official X account, the average fees for a swap on Starknet stood at $0.04 (at the time of the post) as opposed to over $6.8 a few days prior to Dencun.

Ethereum Price Action and Market Outlook

ETH price has been closely following Bitcoin‘s (BTC) price action in the recent past amid the ongoing crypto bullish outlook. The large-cap altcoin, with a fully diluted valuation of about $478 billion, has greatly benefited from the remarkable expansion of its Web3 ecosystem. 

According to market data provided by Defillama, the Ethereum network has about $57 billion in Total Value Locked (TVL) and over $77 billion in stablecoins market capitalization. As a result, the ETH price has gained about 44% in the past four weeks, and it was trading around $3,984 at the time of writing.

Using the Ethereum L1 network is considered expensive, and as per Vitalik Buterin, the blockchain’s Co-Founder, the Dencun upgrade is anticipated to reduce the transaction fee significantly. With the Dencun upgrade, Layer-2 tokens such as Lido DAO, Optimism, Arbitrum, and Metis saw increased interest from investors. Experts believe the cost of using L2 networks will decrease tenfold once all networks fully adopt the upgrade. Jack Gorman, a data scientist at the VC firm Variant Fund, revealed that these L2 protocols have seen twice as many transactions as Ethereum itself over the past year.