In 2023, the Ethereum layer-2 (L2) landscape underwent significant expansion. The demand for blockspace and scaling solutions skyrocketed, with users eager to leverage their relative benefits. The year marked a significant shift in scaling solutions built on Ethereum’s base layer.
On January 1, 2023, the Ethereum mainnet averaged 13.67 transactions per second (TPS), while the combined throughput of the scaling solutions was a mere 4.38. However, by December, the scenario had dramatically transformed. The scaling factor of L2 rollups surged to 5x and, on certain days, even 7x. On December 15, scaling solutions averaged over 91 TPS compared to Ethereum’s 13.45.
Such a growth trajectory provided ample reasons to be optimistic about Ethereum L2s. Yet, the best was still to come. The most anticipated Ethereum upgrade of 2024, the Cancun-Deneb upgrade, also known as Dencun or EIP-4844, was on the horizon. This upgrade, popularly referred to as Proto-Danksharding, aimed to achieve 10-100x cost savings on the rollups.
On-chain analyst Leon Waidmann highlighted the projected reduction in gas fees following the upgrade. The cost for swapping tokens on decentralized exchanges (DEXs) was expected to decrease by up to 90% for networks such as Starknet, Optimism, and Arbitrum. The upgrade was under active development, with a testnet launch scheduled for January 17.
Rollups, as is widely known, help reduce fees by bundling thousands of transactions into a single transaction and sending them back to Ethereum for validation. However, the data is ultimately stored on the chain indefinitely, and the storage costs are included in the total gas fees. With EIP-4844, the data is sent to the nodes on the consensus layer, which is automatically deleted after a certain period. During this time, nodes verify the data’s authenticity. As the data is not stored permanently, the storage cost component is eliminated, resulting in significant savings for users.
This News Article was automatically generated by Bob the Bot (AI)
| Information | Details |
|---|---|
| Geography | Global |
| Countries | |
| Sentiment | positive |
| Relevance Score | 1 |
| People | Leon Waidmann |
| Companies | Arbitrum, Starknet, L2Beat, Optimism, AMBCrypto |
| Currencies | Ethereum |
| Securities | None |
