Upcoming Ethereum Upgrade Dencun May Virtually Eliminate Fees for Layer-2 Blockchains

By: Eliza Bennet

Ethereum developers are gearing up for a milestone upgrade called Dencun, which could result in near-zero fees for Layer-2 blockchains. As a first step towards a rollup-centric roadmap, the Dencun upgrade is pending execution by mid-March. An integral part of this upgrade is the implementation of the Ethereum Improvement Proposal (EIP) 4844. EIP-4844's unique aspect is that it introduces a new feature called 'blob-carrying transactions.'

Blobs, large amounts of data that users can attach inexpensively compared to traditional Ethereum transactions, are anticipated to be 3-5 times cheaper based on observations from Goerli testnet. The significant price difference can pave the way for innovative developers to create blob-inscriptions, competing effectively with Layer-2 solutions like Arbitrum or Optimism. However, roll-ups are considered superior as they possess scalability and are secured by the Ethereum mainnet.

Supporters of Ethereum and Layer-2 solutions are eagerly anticipating the Dencun upgrade's potential impact on the Ethereum network, expecting it to push Ethereum's value higher. As per recent trends, Ethereum's price continues to remain steady, trading above $3,800, with bullish predictions hinting at figures around the all-time high of $5,000. Amidst the rising prices, interest in Ethereum Layer-2 solutions is mirroring the positive trend. Platforms such as Arbitrum and Optimism are currently managing over $36 billion.