Layer 2 Blockchains Become Cheaper After Ethereum’s Dencun Upgrade

Layer 2 blockchains are witnessing a decrease in costs following Ethereum’s Dencun upgrade. This upgrade allows layer 2 solutions to store data in “blobs,” which are more cost-effective compared to call data. The recent implementation of the upgrade has proven successful, with transaction costs on platforms like Optimism and Base significantly dropping. For instance, the average fee on Optimism reduced to nearly 4 cents from around $1.4, while Coinbase’s Base saw a decrease to 3 cents from $1.50. Even Arbitrum’s average fee dropped to 40 cents. The introduction of blobs, which store data off-chain and become inaccessible after three weeks, has allowed layer 2 rollups to process transactions at a lower cost. However, rollups need to manually implement blobs. Despite the positive impact of the Dencun upgrade, it has not yet generated increased investor interest in the native tokens of rollups. Tokens like Optimism’s OP token and Arbitrum’s ARB token have experienced minor declines in trading value. Nevertheless, it is anticipated that the blob mechanism will eventually result in a significant decline of up to 90% in transaction costs for layer 2 solutions.