Recap of the Dencun Upgrade: A Smooth Transition and Evolving Landscape

This past week the Ethereum community achieved a significant milestone with the successful completion of the Dencun upgrade.

Here’s a brief recap of the key takeaways from this event:

1. Smooth Transition:

The Dencun upgrade unfolded without a hitch, with no reported major issues. This seamless transition was widely anticipated, thanks to the extensive testing conducted by the Core Developers across several testnets. Although the participation rate momentarily dipped below 98.5% upon activation of the upgrade, it has steadily risen back to pre-Dencun levels.

Source: Metrika’s Network Upgrade Performance dashboard

Notably, this minor decrease remained far from the threshold where network issues could arise. Another contributing factor to the smooth upgrade was the proactive approach taken by node operators, who diligently updated their clients well ahead of time.

We observed that over 68% of nodes had upgraded their clients to the hard-fork compatible versions, 2 days in advance, ensuring a stable and uninterrupted network upgrade process.

2. Reduction in Transaction Fees:

One of the immediate effects observed on Ethereum was the gradual reduction in the Effective Gas Price. As anticipated, the implementation of the Dencun upgrade has started to alleviate the burden of high gas prices, offering users a more cost-effective environment for executing transactions.

With the majority of the previously biggest gas spenders now using blobs to post their data, average transaction fees are down ~44% in the last 5 days since the upgrade.

It is early days though, so it’s prudent to wait for a few weeks to a month until the market stabilizes to fully assess the long-term impact of the upgrade on transaction fees.

Source: Metrika’s Gas and Fee Markets dashboard

3. Adoption of Blobs:

The adoption of blobs, a pivotal scaling feature introduced by the Dencun upgrade, witnessed a steady increase following the upgrade. Notably, rollup networks Starknet, zkSync, and Base emerged as the primary adopters of blobs. To date, we’ve seen 8 rollups in total leveraging blobs to enhance data posting efficiency and reduce fees for users and we expect many more to follow.

Source: Metrika’s Gas and Fee Markets dashboard

As we reflect on the outcomes of the Dencun upgrade, it’s important to acknowledge that the landscape of Ethereum is continuously evolving.

While initial observations are promising, the full effects of the upgrade are yet to be realized. Only with time and more data will we gain a comprehensive understanding of how the Dencun upgrade shapes the Ethereum economics and encourages innovation on the application layer.

As we move forward, let’s remain vigilant and adaptive, embracing the dynamic nature of blockchain technology and its potential for transformative change.

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