Everyone in the crypto industry is addressing the latest upgrade that Ethereum saw. The Dencun upgrade has just gone live, and this means layer 2 blockchains became cheaper, among others.
Ethereum upgrade goes live
Just the other day, the upgrade was successfully rolled out on the Ethereum mainnet. Just to refresh your memory, this is the most anticipated hard fork since the Merge.
It’s also important that we note the fact that this is expected to reduce the transaction fees of layer-2 networks and also boost the scalability of Ethereum.
Ethereum will most likely massively outperform Bitcoin soon.
Retail coming back.
Major Ethereum upgrade launched successfully.
Spot Ethereum ETF incoming.
Ethereum is now deflationary this bull market. pic.twitter.com/dDmXPa5OTa
— Mister Crypto (@misterrcrypto) March 14, 2024
Cointelegraph notes the fact that the upgrade is a step in the right direction, but this will not be improving the shortcomings that layer-2 solutions still have, Arthur Breitman, the co-founder of the Tezos blockchain, stated. He told Cointelegraph the following:
“The Dencun upgrade does the bare minimum to extend the data usable by rollups on Ethereum, which should lower transaction costs in these L2 solutions. This is a step in the right direction, but ultimately, rollups built on top of Ethereum remain very throughput constrained and are forced to adopt extreme centralization measures.”
According to blockchain analyst Marcov’s Dune-based tracker, the average cost of transactions on scaling solution Optimism has dropped to nearly 4 cents, down significantly from the recent average of around $1.4, as reported by CoinDesk.
Also, we should note the fact that the average fee on Coinbase’s layer 2 solution Base has dropped to 3 cents from roughly $1.50, while Arbitrum’s declined to 40 cents. “The average fee on zkSync and Zora also fell,” the online publication notes.
Cointelegraph also noted that the promised fee reductions wouldn’t affect Ethereum mainnet users.
This has been said via a March 6 report by Max Wadington, a research analyst at Fidelity Investments.
“In the short term, users who wish to benefit from this fee change must sacrifice some decentralization and security by transacting on L2s instead of Ethereum.”
He continued and stated:
“This will certainly spur more users to bridge assets elsewhere. However, we strongly believe that transacting on Ethereum for application-specific purposes will still be considered the best option (especially for high-value transactions) in the medium term as L2 platforms continue to mature.”
The whole crypto market is on fire, so make sure to stay tuned for more juicy news.