- Dencun promises to reduce operating costs for L2 platforms and transaction fees could decrease by up to 75%.
- The increases in the value of L2 tokens reflect the market’s expectation of the benefits of the Dencun upgrade.
Following the implementation of the Dencun upgrade on the Ethereum network, we have witnessed a shocking decline in transaction fees on Layer 2 (L2) protocols, with reductions reaching up to 99% in certain cases.
This phenomenon not only reflects Dencun’s efficiency in terms of scalability, but also marks a before and after comparable to the importance of the merger, known as Merge, in Ethereum’s recent history.
Focusing on Optimism and MATIC, they have benefited the most from post-Dencun fee reductions.
In the first 24 hours after the update, average rates at Optimism fell to $0.05, while Polygon reported rates of $0.064 reducing by 4.7%.
Arbitrum and zkSync also got percentage markdowns of up to 11%, evidence of Dencun’s broad positive reach across the Ethereum ecosystem, so we’ve studied at ETHNews.
The anticipation of the Dencun update has generated a positive effect on the value of tokens associated with these L2 solutions. Specifically, we have seen notable increases in the price of Arbitrum’s ARB, Optimism’s OP and Polygon’s MATIC tokens .
This is because investors and users anticipate that these platforms will directly benefit from a more efficient Ethereum network. The improved data processing efficiency promised by Dencun may result in lower operational costs for L2 solutions and, consequently, lower transaction fees for end users.
The up to 75% reduction in transaction fees is particularly significant, as high gas fees have been a sticking point for many Ethereum users, limiting the accessibility and adoption of decentralized applications (dApps) and decentralized financial services (DeFi).
By reducing these fees, Ethereum can become more attractive to users and developers, boosting growth and innovation on the network.
