Average transaction fees for layer solutions such as Optimism and Base will drop after Ethereum’s Dencun upgrade.
The upgrade allows layer 2 solutions to store data in ‘blobs’ instead of expensive call data.
Ethereum’s Dencun upgrade went live on Wednesday, introducing a mechanism to reduce the fees associated with transactions on layer 2 solutions that batch and compress transactions before sending them to the mainnet.
The latest information shows that the upgrade meets expectations.
According to blockchain analyst Marcov’s Dune-based tracker, the average transaction cost for scaling solution Optimism has fallen to almost 4 cents, significantly lower than the recent average of around $1.4. The average fee for Coinbase’s Base tier 2 solution dropped from about $1.50 to 3 cents, while Arbitrum’s dropped to 40 cents. The average rate on zkSync and Zora also decreased.
The Dencun upgrade introduced Binary Large Objects (blobs), which associate large chunks of data with regular transactions. Blobs store data off-chain and become inaccessible after three weeks, unlike call data, which is stored permanently.
As such, layer 2 combinations such as Optimism, Arbitrum, and zkSync can now store data in blobs instead of expensive call data, processing transactions at a lower cost. Rollups calculate transactions off the Ethereum main chain and then bundle multiple transactions into a single transaction before submitting them to the main chain.
Note that merges require deploying blobs manually. So far, Base, Optimism, Arbitrum, Zora and zkSync have done this, Marcov said. According to data tracking website L2Beat, there are more than 40 rollups on Ethereum, 26 of which are upcoming projects.
The consensus is that the blob mechanism will ultimately lead to a 90% reduction in transaction costs for layer 2 solutions. According to Vitalik Buterin, 125 kb of call data costs approximately 0.06 ETH ($238). Meanwhile, a blob of similar size is likely to cost 0.001 ETH ($3.98), according to decentralized prediction platform Polymarket.
That said, the Dencun upgrade should still increase investor interest in rollups’ native tokens, which will likely benefit the most from the blob-bearing transactions.
At the time of writing, Optimism’s OP token was trading 4.6% lower at $4.30, and Arbitrum’s ARB token changed hands at $2.07, down 6% on a 24-hour basis, according to the data from CoinDesk.