Category: NFT News

Ethereum Layer 2 Adoption Trends High After Dencun Upgrade

By Published On: March 20, 20242.2 min readViews: 1660 Comments on Ethereum Layer 2 Adoption Trends High After Dencun Upgrade

L2 throughput approaches all-time highs following Dencun and amid an uptick in market volatility.

Ethereum’s highly-anticipated March 13 Dencun fork has bolstered Layer 2 adoption, with active addresses and transaction volume both trending near all-time highs following the upgrade.

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According to data from L2beat, combined daily Layer 2 throughput tagged its second highest level on record at roughly 136.5 transactions per second (TPS) on March 16, just a few days after Dencun’s execution.

The current all-time high of 149.5 TPS was set in mid-December amid a short-lived bubble of skyrocketing inscription activity across Layer 2 networks.

Combined Layer 2 transaction throughput. Source: L2beat.

Daily transaction count volume on leading Layer 2s supporting EIP-4844, the principal upgrade included in the Dencun fork that drove L2 transaction fees down, has more than doubled over the past seven days.

Data from GrowThePie shows weekly transaction count increases of 100% on Arbitrum, 124% on OP Mainnet, 187% on Base, and 179% on Starknet. GrowThePie also shows increases in the number of active addresses across said networks of between 17%, 75%, 81%, and 89% over the same period.

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Transaction volume on leading Layer 2 networks. Source: GrowThePie.

While the recent uptick on market volatility has likely contributed to the number of transactions jumping, many on-chain traders appear to be migrating over to Layer 2 after Dencun reduced fees on leading Layer 2s by more than 80%.

According to GrowThePie, average transaction fees have dropped by 98% on Base, OP Mainnet, and Starknet over seven days following Dencun, while fees on Arbitrum and ZkSync Era are down 96% and 86% respectively.

Dencun’s activation coincides with persistently high transaction fees on the Ethereum mainnet, driving up ETH’s burn-rate.

According to Ultra Sound Money, 43.5% of ETH burned after The Merge — Ethereum’s September 2022 upgrade that introduced Proof of Stake consensus and dramatically reduced new Ether issuance — were removed from supply since the start of November, despite the period making up only 25% of time elapsed since The Merge.

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The supply of Ether is down by nearly 450,000 ETH since The Merge went live, comprising annual deflation of almost 0.25%. Annual deflation has trended at a rate of 0.91% over the past 30 days.

In other Ethereum news, the Ethereum Foundation’s Tim Beiko issued a “final announcement” reminding testnet users to migrate onto Sepolia or Holesky in preparation for the deprecation of the long-running Goerli network on March 18.

Beiko noted that while Georli was scheduled to operate for roughly one month following Dencun, “nearly all validators” have already shut down support for Goerli.




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