The Coinbase Ethereum layer-2 network, Base, has experienced a dramatic surge in daily transactions following a recent upgrade. This significant increase is attributed to a substantial reduction in transaction fees.
On March 16th, just days after the Dencun upgrade, Base processed a record-breaking 2 million daily transactions. This represents a staggering 350% increase compared to pre-upgrade levels, where the network averaged around 440,000 transactions per day. The growth didn’t stop there, with daily transactions steadily climbing in the days leading up to the 2 million mark.
The fee reduction also appears to be attracting a significant number of new users. On March 16th, Base saw a massive 3,200% increase in new users compared to the average before the upgrade, welcoming a staggering 666,866 new users to the network in a single day.
The key driver behind this surge in activity is believed to be the substantial decrease in transaction fees on the Base network following the Dencun upgrade. According to data from Blockscout, average transaction fees on Base have plummeted by over 60% since the upgrade.
Launched by Coinbase in August 2023, Base operates as a layer-2 network built on top of the Ethereum blockchain. Layer-2 solutions aim to address scalability issues on the main Ethereum network by processing transactions off-chain before settling them back on the main chain.
The Dencun upgrade implemented Ethereum Improvement Proposal (EIP)-4844, a protocol advancement that introduces “data blobs” or “proto-danksharding” to significantly reduce layer-2 transaction fees. This upgrade enhances data availability on layer-2 networks, leading to a cost reduction of up to 90% for gas (transaction fees) on some networks.
The Dencun upgrade wasn’t exclusive to Base. Leading layer-2 networks like Arbitrum, Optimism, zkSync Era all experienced similar benefits, with average transaction fees dropping between 60% and 90% according to Dune Analytics.
Despite the significant growth for Base, established layer-2 networks Arbitrum and Optimism still hold a dominant position in the ecosystem. Together, they command a combined total value locked (TVL) of $23 billion, representing a market share of 65%. While Base is currently ranked sixth in the layer-2 ecosystem with a TVL of $1.46 billion and a 4.1% market share, these recent developments signal its potential for further growth.
It’s important to note that while layer-2 fees have decreased significantly, Ethereum layer-1 gas fees remain high. As of this writing, an ETH transfer on the main Ethereum blockchain costs around $2.10, a USDC transfer costs around $5, and a swap on Uniswap could set you back around $16 according to Gasfees.io.
Read Also: The 4 Top Free Cloud Mining Platforms in 2024: Stable, Reliable, and Efficient Choices
Disclaimer: The information provided in this article is for informational purposes only and should not be construed as financial or investment advice. Cryptocurrency investments are subject to market risks, and individuals should seek professional advice before making any investment decisions.
- Advertisement -
Comments are closed.