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Ethereum Co-Founder Vitalik Buterin Voices on Dencun Upgrade
Ethereum co-founder Vitalik Buterin expressed his thoughts on the recent milestone Dencun upgrade, highlighting a lower-than-expected level of “usage” from layer-2 networks following the implementation.
Analysis of Dencun Implementation
During an event at ETH Taipei, Buterin responded to a question from Rug Radio by stating that the success of Duncun depends on the interpretation of “better.” He commended the flawless execution of the update by Ethereum’s developers but noted the limited contribution of Dencun to network traffic on layer-2 networks since its activation.
Dencun introduced blobs, a novel data storage solution through proto-danksharding, enabling layer-2 data to be temporarily stored on-chain for approximately a month. This innovation significantly reduced layer-2 gas fees to almost zero. However, actual usage levels remain substantially below the developers’ initial expectations, with current rates approximately 67% lower than the target.
Impact on Layer-2 Networks
Despite the subdued usage on layer-2 networks, there has been a significant surge in transaction volume since Dencun’s launch. Traffic on Coinbase’s layer-2 network Base reached unprecedented levels, leading to intermittent transaction failures on Coinbase.com and Coinbase Wallet. This surge was accompanied by a sudden spike in gas fees on Base, attributed to a frenzy of trading bots engaging in meme coin-related activities.
1/ Transaction costs on Base spiked today.
The cause appears to be increased activity from trading bots willing to pay high priority fees.
As a result, Base has been more expensive to transact on today than other L2s that use blobs. pic.twitter.com/smjsd1lcNl
— Kofi (@0xKofi) March 21, 2024
Despite the surge in layer-2 traffic, expectations for even higher levels following the Dencun upgrade remain unfulfilled. The reduction in L2 gas fees was expected to attract more users, particularly amidst rising gas fees on the Ethereum mainnet that have become burdensome for retail users.
Future Prospects and Integration Challenges
Marius Van Der Wijden, an Ethereum core developer, emphasized that it may be premature to evaluate the success of blobs, as some layer-2 networks are yet to integrate Dencun fully. He highlighted the potential for further growth as more networks transition to blobs.
Notably, Polygon has not completed its transition to Dencun. David Silverman, Polygon Labs VP of Product, anticipates that all layer-2 networks, including Polygon, will be fully integrated with Dencun within the next one to two months. The current low usage of blobs has led to minimal transaction costs on layer-2 networks, although an increase in demand may escalate transaction expenses in the future.
Looking ahead, Vitalik Buterin expressed optimism about the future utilization of blobs, anticipating a gradual increase in usage over the coming months. He emphasized the importance of affordable transaction costs for present-day rollups while eagerly awaiting the realization of his usage expectations.
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