In a significant development for the Ethereum ecosystem, daily transactions on the Coinbase Ethereum layer-2 network, Base, have surged by a staggering 350% following the implementation of the Dencun upgrade. This notable uptick catapulted daily transactions to a record-breaking 2 million on March 16, just days after the upgrade took effect.
Record transaction volume and user growth
Before the Dencun upgrade, Base was processing approximately 440,000 transactions per day. However, following the upgrade, transaction volume skyrocketed, reaching 1.1 million the day after implementation and continuing to climb in the subsequent days, culminating in the unprecedented figure of 2,064,920 transactions on March 16.
Coinciding with this surge in transaction volume, daily new user registrations on Base also experienced a remarkable spike, reaching 666,866 on March 16 alone. This represents a monumental 3,200% increase compared to the average figures in the days leading up to the Dencun upgrade.
The surge in transactions on Base has been directly linked to a substantial reduction in transaction fees following the implementation of the Dencun upgrade. Blockscout reports that average transaction fees on Base have plummeted by over 60% since the upgrade, significantly enhancing the platform’s attractiveness for users.
The Dencun upgrade, facilitated by Ethereum Improvement Proposal 4844, introduced innovative measures such as data blobs and proto-danksharding to reduce layer-2 transaction fees. This enhancement in L2 data availability has reduced gas costs by up to 90% for some networks, including Base.
Industry impact and comparative analysis
Base, launched by Coinbase in August, has emerged as the sixth-largest network in the Ethereum layer-2 ecosystem, boasting a total value of $1.46 billion and commanding a market share of 4.1% of layer 2s, according to L2beat.
Notably, other leading layer-2 networks, such as Arbitrum and Optimism, have also experienced substantial reductions in transaction fees following the Dencun upgrade.
Arbitrum and Optimism continue to dominate the layer-2 landscape, collectively securing a significant portion of the market share, with a combined total value of $23 billion. The reduction in gas fees has been particularly pronounced for token swaps on decentralized exchanges, with Uniswap’s Optimism deployment witnessing fees plummeting to as low as $0.01 post-Dencun upgrade, according to protocol founder Hayden Adams.
Ethereum layer-1 gas fee dynamics
While layer-2 networks have witnessed a significant alleviation in transaction fees, Ethereum layer-1 transactions have continued to experience high gas fees, especially during periods of heightened market activity.
Despite the recent decrease in the price of Ether, layer-1 gas fees remain considerable, with an ETH transfer costing approximately $2.1 and a USDC transfer around $5. Comparatively, a swap on Uniswap commands a fee of around $16, as reported by Gasfees.io.
