jakiro
Author: Filippo Pozzi Source: medium Translation: Shan Oppa, Bitchain Vision
Layer 2 has played an important role in the ecosystem before the “Dencun” update.However, after the introduction of this famous update,The explosion of Layer 2 has reached a level that was previously unthinkable, making it an indispensable element to expand and improve the efficiency of the entire ecosystem.Today, we will focus on analyzing the actual effect of the update about four months after its official release.This time period allows us to look at a large amount of data and evaluate the actual success or failure of the update.
What is Dencun?
Ethereum’s “Dencun” update was released on March 13, 2024, combining the “Cancun” proposal of the Execution Layer and the “Deneb” proposal of the Consensus Layer.The update introduces a series of Ethereum Improvement Proposals (EIPs) that aim to improve different aspects of the Ethereum network.Among them, EIP-4844, also known as Proto-Danksharding, is particularly important for Layer 2’s scalability because it creates blobs, thereby increasing the possibility of managing data within the network.So how did it do it?
Without going deep into the technical details, we can think of “blobs” as packets (256 KB), which represent a series of transactions that occur on Layer 2.These packets are then packaged and sent to the Ethereum network for verification.I’ll show you a graphical example via txcity.io.
Here we see the representation of two blockchains: Ethereum on the left and Arbitrum on the right (Dencun updated network), each representing a transaction.
Let’s focus on the Arbitrum blockchain, which represents one of Ethereum’s main Layer 2.As you can see, all those using the blockchain will leave a piece of paper on the counter before boarding the conveyor belt representing the Arbitrum blockchain.This piece of paper represents a transaction receipt that occurred within Arbitrum.Since Arbitrum uses a mechanism called Optimistic Rollup, it initially accepts all transactions as valid, based on the assumption that they are honest.These transactions are then reviewed publicly to everyone and disputed for a specific time if necessary.
When a certain number of transactions is reached, the “Postman” rotates to collect all transactions, creating the “blob” we defined.Then, if we look closely, when the postman starts toward the arrow pointing to Ethereum, we see the postman image representing the Ethereum blockchain appear on the left side of the screen.Here, the postman holds his blob, a packet of transactions that took place on Layer 2, and enters the Ethereum “bus” symbolizing the main blockchain block.
This process is as simple as a “normal” transaction.In fact, there is no difference between postman and many people boarding the bus represented by the Ethereum block.The difference is that the postman brings a series of transactions, while others represent a single transaction local to the Ethereum network.
Thanks to this “simple” process of creating blobs, individual Layer 2s have been reduced by more than 90%, allowing for nearly free operations within these blockchains, resulting in a surge in transaction volumes within all major Layer 2s.
Now, we will check for improvements brought by this update via on-chain data.
2. Average fees for major Layer2 transactions
Most of our discussion today can be summarized through this chart showing the average transaction fees incurred before and after the implementation of Dencun.
It is obvious from the chart thatStarting March 13, the average transaction cost of Layer 2 such as Arbitrum, Optimism, or ZkSync plummeted instantly, from a value of about $0.50 to a value of nearly 0.
Surprisingly, despite some highlighted peak transaction cost moments on the Base blockchain, all other major Layer 2 managed to remain stable, with transaction costs close to 0 and not suffering from blocks typical of blockchains like SolanaCongestion problem.
3. Active users on the blockchain
The reduction in transaction costs has opened the door for various investors, and even smaller investors can enter the industry.This sparked a wave of activity on all major Layer 2s, creating a real operational boom.
Another indicator that confirms the more intense activity of the main Layer 2 is undoubtedly the number of transactions verified on the blockchain.
As can be clearly seen from the above figure, in addition to zkSync, the number of transactions in other Layer 2 has increased significantly, resulting in a significant explosion in trading volume, especially in Base in early April and Arbitrum in late May.
4. Average number of blobs per block
This chart shows the operating status of the blockchain network in detail, highlighting the number of “blobs” contained in each Ethereum block.Target and limit lines represent the ideal and maximum values supported by the network itself.These parameters are crucial to optimizing the overall efficiency of the blockchain and avoiding excessive overhead.Actively monitoring the number of “blobs” in each block is critical to ensuring that the network can effectively handle transaction loads while maintaining its stability and performance.Therefore, this data is crucial to keeping operators informed of network health.
in conclusion
There is no doubt that this update significantly reduces transaction costs, and despite the increase in transaction volumes of the major Layer 2, it still maintains its effectiveness.
As Vitalik Buterin highlighted in his article Layer 2s as cultural extensions of Ethereum, Layer 2 has become an important part of the blockchain ecosystem and will continue to grow its importance.This is due to its extensive integration in infrastructure, making its use increasingly necessary for the Ethereum ecosystem.
I want to end with a passage from the article where Vitalik answers a question: How can this culture with Layer 2 development be successful?His answers seem very attractive to me and reflect the authentic and fundamental spirit that guides the community of developers and DeFi enthusiasts.
“The core value proposition of this Layer 2-centric culture is that it attempts to balance the benefits of diversity and collaboration by creating a range of different subcultures that still share some common values and in key commonalityWork together on infrastructure to realize these values.”
