Ethereum Dencun Upgrade Boosts Activity and Transaction Failures on L2 Networks

user avatar

by Giorgi Kostiuk

2 years ago

Made with AI

  1. Introduction to Ethereum Dencun Upgrade
  2. Impact on Layer 2 Networks
  3. Divergent Views on Bot Usage


    4. Following the Ethereum Dencun upgrade in March, there has been a significant spike in transaction failures across various Layer 2 networks.

    Introduction to Ethereum Dencun Upgrade

    On August 22, Christine Kim, a researcher at Galaxy, shared insights on the X social media platform regarding the unintended effects of this upgrade. Her analysis is based on a detailed report by Galaxy, titled '150 Days After Dencun,' published on August 21. The Ethereum Dencun upgrade, implemented mid-March, introduces data blobs through EIP-4844, also known as proto-danksharding. This change provides temporary storage for rollup data, hence relieving some of the load on the Ethereum execution layer and reducing transaction fees.

    Impact on Layer 2 Networks

    According to Galaxy’s analysis, the reduced fees have inadvertently led to a surge in transaction activity on Ethereum’s L2 networks. Over the 150 days following the upgrade, daily transactions on L2 networks more than doubled, reaching an average of 6.65 million. However, this increase in transactions has also been accompanied by a rise in transaction failures. The issue particularly affected high-activity addresses driven by bot activity, typically attempting 100 or more daily transactions. On the Base platform, the failure rate reached a staggering 41.6%, while Arbitrum and OP mainnet saw failure rates of 20.87% and 12.85% respectively. Meanwhile, addresses with lower activity saw significantly lower failure rates, with a maximum of only 4%.

    Divergent Views on Bot Usage

    Comparing Ethereum’s Layer 2 networks with Solana showed that Solana also faces high transaction failure rates. According to Coinbase, between 25% and 45% of all non-vote transaction fees on Solana are spent on failed transactions. The use of bots remains a controversial topic: some view them as a source of spam, while others argue that bots provide liquidity and efficiency to markets. Michael Nadeau, founder of DeFi Report, noted that 'bots create liquidity and bring efficiency to markets…on public blockchains, they pay fees.'

    Clearly, the Ethereum Dencun upgrade has brought significant changes to the cryptocurrency ecosystem, especially within Layer 2 networks. The discussion around bot usage remains open, with varying opinions within the community.

Tier I

Sector: #18291

Sealed Hiding Place Room

Resource Cache

Resource Cache

Tier I

Requires 25% Tier Progress to Claim
Meme Cache

Meme Cache

Tier I

Requires 50% Tier Progress to Claim
Equipment Cache

Equipment Cache

Tier I

Requires 75% Tier Progress to Claim

After collecting, hiding places will be stored in your inventory and can be opened with Keys.

Other news

Thailand's SEC Takes Action Against Bitget for Unlicensed Operations

Thailand's SEC has filed a criminal complaint against BG Limited for allegedly operating the cryptocurrency exchange Bitget without a license.

user avatarAndrew Smith

VanEck Sees Buying Opportunity in Bitcoin Mining Stocks After Market Correction

VanEck sees a buying opportunity in Bitcoin mining stocks after a market correction, citing limited electricity capacity and delays in grid connections as potential advantages.

user avatarZainab Kamara

Bitcoin Mining Stocks Plummet Amid AI Infrastructure Concerns

Bitcoin mining companies that expanded into AI infrastructure saw an average stock price decline of 35% in October 2023 due to market fears about rising borrowing costs and economic uncertainties.

user avatarJacob Williams

Proposed Loss Carryforward Mechanism for Cryptocurrency Investments

South Korean government officials proposed a three-year loss carryforward mechanism for cryptocurrency investments to create a balanced taxation approach.

user avatarTando Nkube

Samsung Wallet Introduces Stablecoin Functionality for Galaxy Users

Samsung Wallet has launched a feature for US Galaxy users to manage stablecoin accounts, allowing them to buy, hold, send, and receive USDC on the Solana blockchain.

user avatarSon Min-ho

Evernorth Registers 737 Million Shares, Raising Concerns Over Stock Pressure

Evernorth has registered up to 737 million shares for potential resale, raising concerns about selling pressure on its stock.

user avatarAyman Ben Youssef

Important disclaimer: The information presented on the Dapp.Expert portal is intended solely for informational purposes and does not constitute an investment recommendation or a guide to action in the field of cryptocurrencies. The Dapp.Expert team is not responsible for any potential losses or missed profits associated with the use of materials published on the site. Before making investment decisions in cryptocurrencies, we recommend consulting a qualified financial advisor.