The recent launch of Ethereum’s Cancun-Deneb upgrade, which includes the implementation of EIP-4844, has sparked discussions about the potential of Layer 2 (L2) solutions to improve scalability and reduce fees. While many see this upgrade as a major step forward, Eric Wall, a veteran cryptocurrency technologist, offers a more cautious perspective, pointing out potential limitations in achieving very low transaction fees on Ethereum L2s after the Dencun activation.
According to Wall’s analysis, certain design aspects of L2 sequencers could still lead to fee spikes in certain situations, even with the improvements brought by EIP-4844. He advises against overestimating the scalability gains, stating that even with the maximum capacity of blobspace, L2 rollups after Dencun would likely only be able to handle 100-1,000 transactions per second (TPS). He emphasizes that reaching maximum theoretical capacity does not guarantee consistently low fees, especially during times of increased network activity, such as periods of high buying pressure.
Since the implementation of the Dencun upgrade on March 13, various Ethereum L2 networks have experienced significant changes in fee dynamics. According to data from the L2Fees tracker, popular L2 solutions like Optimism, Arbitrum, Starknet, and zkSync Era have seen substantial reductions in transfer and cross-asset swap fees, dropping to less than $0.01 per transaction. However, some networks like Loopring, zkSync Lite, and Boba Network have shown minimal changes in fees, indicating that not all L2s were equally affected by the optimizations triggered by Dencun.
The fee reductions observed on prominent L2 networks after the Dencun activation have important implications for Ethereum’s scalability and usability. Lower transaction costs make Ethereum’s L2 solutions more attractive, potentially attracting more users and applications to the ecosystem. Additionally, reduced fees can facilitate microtransactions and enable new use cases that were previously hindered by high gas costs.
However, Eric Wall’s cautious stance serves as a reminder that scaling blockchain networks is a complex task with nuanced challenges. While fee reductions are a positive improvement, they do not completely eliminate the possibility of fee spikes in certain situations. Wall’s analysis underscores the importance of ongoing research and optimization efforts to effectively address scalability concerns.
As Ethereum continues to evolve, it is crucial to focus on optimizing network performance and addressing scalability challenges. The Cancun-Deneb upgrade and the implementation of EIP-4844 represent important steps towards achieving Ethereum’s scalability goals, but it is essential to maintain a nuanced understanding of the limitations and challenges involved in achieving consistently low fees on L2 solutions. By continuing to work towards addressing these challenges, Ethereum can further enhance its scalability and usability, attracting more users and applications to its ecosystem.
