Ethereum's Dencun Update Reduced Transaction Fees for Layer 2 Projects! Here are the Affected Projects

Ethereum's highly anticipated Dencun update, which went live on Wednesday, heralded a new era of cost efficiency for layer 2 solutions on the blockchain.

Ethereum's Dencun Upgrade Lowers Cost for Layer 2 Blockchains

The update moves away from the expensive call data method by introducing a groundbreaking mechanism that allows layer 2 solutions to use Binary Large Objects (blobs) to store data, significantly reducing transaction costs.

Initial results following the Dencun upgrade are promising, demonstrating significant cost reductions across a variety of layer 2 solutions.

According to blockchain analyst Marcov's Dune-based tracker, average transaction fees on the Optimism scaling solution have fallen to about 4 cents, from the previous average of $1.40.

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Similarly, fees for Coinbase's layer 2 solution, Base, dropped from around $1.50 to 3 cents, while Arbitrum's fees dropped to 40 cents. Other layer 2 solutions such as ZkSync and Zora have also experienced significant reductions in transaction costs.

This innovation allows layer 2 aggregations such as Optimism, Arbitrum, and zkSync to process transactions more efficiently and cost-effectively.

*This is not investment advice.

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