The Coinbase Ethereum layer-2 network, Base, experienced a significant surge in daily transactions, reaching a new peak of 2 million on March 16, shortly after implementing the Dencun upgrade. This remarkable increase signifies a momentous shift in activity and user engagement on the platform.
Unprecedented Growth in Transactions and Users
Prior to the upgrade, Base’s daily transaction volume hovered around 440,000. However, this figure escalated to 1.1 million the day following the Dencun upgrade and continued its upward trajectory, culminating in 2,064,920 transactions on March 16. Alongside this surge, the platform also witnessed a dramatic rise in daily new users, with figures soaring to 666,866 on the same day—a 3,200% leap from the days preceding the upgrade.
Fee Reduction Sparks Activity
A significant catalyst behind this surge is the substantial reduction in transaction fees on Base, attributable to the efficiencies introduced by the Dencun upgrade. Post-upgrade, average transaction fees on Base have plummeted by over 60%, as reported by Blockscout. This reduction has made Base an increasingly attractive option for users seeking cost-effective transaction solutions within the Ethereum layer-2 ecosystem.
Base’s Position in the Layer-2 Landscape
Since its launch in August by Coinbase, Base has rapidly ascended to become the sixth-largest network within the Ethereum layer-2 ecosystem. Boasting a total value locked (TVL) of $1.46 billion, it commands a 4.1% market share of layer-2 networks, according to data from L2beat.
The Impact of the Ethereum Dencun Upgrade
The Dencun upgrade, which introduced EIP-4844, has played a pivotal role in reducing layer-2 transaction fees by facilitating data blobs or proto-danksharding. This enhancement in L2 data availability has led to gas cost reductions of up to 90% for some networks. Following the upgrade, average transaction fees on prominent layer-2 networks like Arbitrum, Optimism, Base, and zkSync Era have decreased by 60% to 90%, as indicated by Dune Analytics.
Despite the impressive gains by Base, Arbitrum and Optimism continue to lead the layer-2 market, with a combined TVL of $23 billion, translating to market shares of 42% and 23%, respectively.
Layer-1 Gas Fees and Market Observations
The upgrade has also had a noticeable impact on decentralized exchanges, with Uniswap’s Optimism deployment experiencing token swap gas fees as low as $0.01, a development highlighted by protocol founder Hayden Adams. Meanwhile, Ethereum’s layer-1 gas fees have remained elevated due to the asset’s fluctuating price, with current costs for ETH transfers around $2.1, USDC transfers approximately $5, and swaps on Uniswap about $16, as per Gasfees.io.
| Feature | Details |
|---|---|
| Daily Transactions on Base | Increased to 2,064,920 post-upgrade |
| Daily New Users on Base | Spiked to 666,866 on March 16 |
| Transaction Fee Reduction | Over 60% decrease post-Dencun upgrade |
| Total Value Locked on Base | $1.46 billion, 4.1% market share |
| Impact of Dencun Upgrade | 60% to 90% fee reduction across layer-2s |
| Ethereum Layer-1 Gas Fees | Varied, with Uniswap swaps around $16 |
The remarkable growth in Base’s activity following the Dencun upgrade underscores the dynamic nature of the Ethereum layer-2 ecosystem and the continuous pursuit of scalability and efficiency improvements. As the landscape evolves, the interplay between technological advancements and user adoption will remain crucial in shaping the future trajectory of Ethereum and its layer-2 networks. This period of innovation not only enhances the user experience but also broadens the horizon for decentralized applications, setting the stage for further advancements in blockchain technology and digital finance.
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