TL;DR
- Ethereum Layer 2’s recent Dencun upgrade has driven record adoption of Layer 2 solutions.
- The inclusion of EIP-4844 in Dencun has dramatically reduced transaction fees on Layer 2 networks, increasing daily transaction volume.
- Ethereum will end the Goerli network, encouraging users to migrate to alternatives like Sepolia or Holesky.
Ethereum’s recent Layer 2 upgrade, known as Dencun, has made a significant impact on the adoption of this technology. Since its implementation on March 13, there has been a growing increase in the activity of active addresses and transaction volume on Layer 2 networks. This increase has led the combined daily throughput of Layer 2 to reach its second-highest level recorded, with approximately 136.5 transactions per second (TPS) on March 16.
The main improvement introduced by the Dencun upgrade was the inclusion of EIP-4844, which significantly reduced transaction fees on major Layer 2 networks. As a result, the daily transaction volume on these networks has more than doubled in the past seven days. This increase is reflected in specific data, such as the 100% increase in transaction counts on Arbitrum, 124% on OP Mainnet, 187% on Base, and 179% on Starknet. Additionally, the number of active addresses on these networks has experienced significant increases, ranging from 17% to 89% in the same period.
The drastic decrease in transaction fees on Layer 2 networks after Dencun has incentivized many on-chain traders to migrate to these platforms. It is estimated that average transaction fees have decreased by 98% on networks like Base, OP Mainnet, and Starknet, while they have decreased by 96% and 86% on Arbitrum and ZkSync Era, respectively.
Ethereum to End Goerli
This increase in the adoption of Layer 2 has also been influenced by the persistent high volatility in the market. Traders are seeking alternatives that allow them to transact more efficiently and economically, leading to a massive migration to these networks.
Furthermore, the activation of Dencun coincides with a period of high transaction fees on the Ethereum main network, contributing to a higher ETH burn rate. Since the implementation of The Merge in September 2022, approximately 450,000 ETH has been burned, representing significant annual deflation for the cryptocurrency.
In parallel, the Ethereum Foundation is preparing to deprecate the Goerli network, encouraging testnet users to migrate to other alternatives like Sepolia or Holesky. Although Goerli was scheduled to operate approximately one month after Dencun, most validators have already discontinued their support for this network.
