On March 13th, according to data from OKLink, Ethereum officially activated the Dencun upgrade at block height 269568, entering the era of Layer2 low-cost transactions. After the cost reduction and efficiency improvement, can Ethereum make a comeback as the king?
Ethereum was officially launched on July 30, 2015, ushering in a new era of smart contracts. It has flourished with the development of on-chain applications such as DeFi and NFT Summer. However, it has faced challenges due to the low gas fees of high-performance public chains like Solana and the syphoning effect of the Bitcoin ecosystem. Although Ethereum has attempted to reverse the situation with the 2.0 version, the long and complex technical iteration process has resulted in unsatisfactory platform performance in the short term. The high gas fees have become one of the key reasons for users to migrate. The tremendous pressure on Ethereum’s congestion has directly driven the grand narrative of Layer2. Vitalik Buterin began to support various extension solutions for Layer2. In his article, he wrote profoundly, “Without the development of Layer2 and Rollup, Ethereum will fail due to high transaction costs.” How to solve the “expensive and congested” performance problem has become the core theme of Ethereum’s current development. According to data from OKLink, the TVL of the L2 ecosystem has shown a continuous upward trend, with a total TVL of L2 ecosystem reaching $38.31 billion.
Mainstream L2 solutions such as Arbitrum and Optimism share the security of Ethereum. Although the computation is moved off-chain, the data is processed and permanently stored on the Ethereum nodes, which ultimately transfers these costs to the users. Therefore, L2 alleviates the transaction pressure on Ethereum and reduces gas fees to a certain extent, but compared to Web2 users who enjoy free usage, L2 has limited effects.
The successful implementation of the Cancun upgrade officially opens the era of L2 cost reduction, injecting new vitality into the L2 ecosystem and Ethereum. On March 15th, according to data from OKLink, after the Cancun upgrade, transaction fees on L2 networks such as Starknet and OP dropped by more than 90%, and their active addresses and TPS also significantly increased. As a leading one-stop Web3 gateway, OKX Web3 Wallet now fully supports Ethereum and the L2 ecosystem, providing an important foundation for users to explore the on-chain world.
Data source: OKLink
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Understanding the Cancun Upgrade
How to Explore Ethereum and L2 Ecosystem through OKX Web3 Wallet?
The Cancun Upgrade Injects Vitality into Ethereum and L2
The Cancun upgrade refers to the Dencun upgrade, which combines the Cancun execution client and the Deneb consensus client. The core purpose is to optimize the user experience of Ethereum staking and achieve cost reduction and efficiency improvement for L2. The Cancun upgrade includes a total of 9 Ethereum Improvement Proposals (EIPs), including EIP-1153, EIP-4788, EIP-4844, EIP-5656, EIP-6780, EIP-7044, EIP-7045, EIP-7514, and EIP-7516. The most crucial one is EIP-4844, also known as Proto-Danksharding.
EIP-4844 is the foundation of the complete sharding expansion Danksharding. It introduces a new data storage structure called Blob to Ethereum, which is specifically used to store transaction data submitted by L2 to Ethereum. It no longer competes for storage space with Calldata, resulting in cheaper transaction fees and more efficient transaction experience for users.
In the context of the contradiction between Ethereum’s prosperity and high gas fees, Ethereum has been criticized for competing for limited block resources, leading to inefficiency, congestion, and high costs. Previously, all L2 transactions on Ethereum were stored in Ethereum’s Calldata. However, Calldata space is limited, and the data stored in it is processed and permanently stored on the chain by Ethereum nodes. It is reported that 80% of the transaction costs and gas on L2 networks come from Calldata data storage costs. Blob creates additional temporary data storage space on Ethereum, significantly reducing L2 data storage costs and achieving higher transaction throughput.
According to OKLink data, mainstream L2 networks such as Arbitrum, Optimism, Starknet, and Base have all integrated EIP-4844, resulting in a more than 90% reduction in network gas fees.
However, it is worth noting that the data stored in Blob is temporary, with an available time of 4,096 epochs, or approximately 18 days. Ethereum needs to ensure real-time data availability rather than data retrievability. The value and significance of permanently storing transaction data are not high. Clearing Blob data periodically can save storage space, overall helping Ethereum maintain its core competitiveness and gain more market share in the public chain race.
However, the discarded portion of the Blob data still has potential value for calls, such as preventing node malicious behavior, rug operations by public chain operators, and helping to establish escape hatch mechanisms or forced withdrawal mechanisms. Therefore, OKLink will be responsible for securely storing all Blob data to ensure the security and retrievability of historical data, supporting the healthy development of the Ethereum ecosystem, and providing services to individuals and public chain teams with demands for Blob data.
In addition, EIP-4844 will introduce a new fee market for Blob, which is more conducive to maintaining better prices. The introduction of the Blob data storage structure will greatly reduce the cost of Ethereum L2, for example, zkSync, the first L2 to use Blob, reduces sequencer costs by about 88%, and Starknet’s actual gas fees are as low as $0.01, and so on. However, the actual effect depends on various factors of L2 itself. It will also help to speed up L2 transactions by 10 or even 100 times. Of course, in addition to EIP-4844, this upgrade also includes EIP-1153, EIP-6780, and more. In short, after the Cancun upgrade, there will be more transaction activities, providing long-term support for L2 and the development of the Ethereum ecosystem.
After the Cancun upgrade, users can conduct on-chain transactions with very low gas fees. As a leading one-stop Web3 gateway, OKX Web3 Wallet now fully supports Ethereum and the L2 ecosystem, providing an important foundation for users to explore the on-chain world.
Currently, OKX Web3 provides comprehensive support for Ethereum and Ethereum Layer2 ecosystems, and has already integrated mainstream L2 networks such as Blast, Optimism, Arbitrum, Starknet, zkSync Era, and Manta Pacific. Users do not need to manually configure and can switch to these networks for corresponding asset management with just one click.
To improve capital efficiency, users can interact with Ethereum re-staking protocols through the OKX DeFi section. The concept of “re-staking” was first proposed by Eigenlayer, allowing users to re-stake ETH on other consensus protocols through Eigenlayer after staking it on the Ethereum mainnet. This allows these protocols to share Ethereum’s security, and users can also receive additional rewards. The “Re-staking and Earning” activity launched by OKX Web3 DeFi has now connected to various types of re-staking protocols, providing users with additional points or token rewards. Through “ETH Re-staking,” “Liquidity Staking,” or “Liquidity Re-staking,” users can earn additional rewards. For example, participating in Kelp earns an additional 30% point reward, participating in Renzo earns an additional 10% point reward and up to 20% interest reward, and so on.
Users can exchange and cross-chain Ethereum and L2 assets through OKX DEX, enjoying the best liquidity, optimal prices, and zero trading fees, making it easy to trade any asset. Currently, OKX DEX supports multiple Ethereum Layer2 networks, such as Avalanche C, Arbitrum, Optimism, zkSync Era, Polygon zkEVM, Linea, Base, Mantle, Starknet, Scroll, and more. OKX DEX is a powerful DEX and cross-chain aggregator, aggregating more than 20 cross-chains, more than 20 public chains, and over 400 DEXs. It also has features such as DEX market section, limit orders, and KYT security checks. It has added the intention trading mode, helping users enjoy gas-free trading experience.
To lower the barrier to entry into Web3, reduce search costs, and make use of fragmented time for precise interaction, Cryptopedia has launched interactive tasks for L2 ecosystems such as zkSync Era. By aggregating and selecting high-quality DApps and setting interactive tasks, it helps users experience the smooth on-chain world and obtain multiple rewards. For example, users can explore the L2 ecosystem through selected zkSync Era DApps on OKX Cryptopedia and gain rewards. OKX Cryptopedia is a one-stop DApp exploration and reward interaction platform that regularly launches activities with different blockchain networks as themes and sets DApp interactive tasks in collaboration with corresponding partners.
OKX Discover has taken the lead in exploring the Layer2 ecosystem, supporting the Canucn upgrade for Ethereum in the first time, helping users participate in Ethereum and L2 ecosystems quickly and securely. In addition, to explore the Ethereum and L2 ecosystems more extensively and discover and interact with popular DApps, users can use the OKX Discover section to discover and jump to popular DApps, making it easier and more convenient to explore the on-chain world. For example, OKX Discover has added multiple hot sections such as re-staking, Solana ecosystem, inscriptions, Bitcoin ecosystem, essential tools, and popular blockchain games, providing users with the latest and most popular on-chain dynamics.
In addition, users can view L2 network-related data, including the most intuitive data such as price and fee reduction, possible developments caused by changes in fees and TPS, TVL, TVB, active address count, and changes in Ethereum data through the OKX browser or the Dencun upgrade special page launched by OKLink. They can also view the complete development history of ETH and the review of upgrades.
OKX Web3 Wallet helps users explore the on-chain world easily, securely, and efficiently through its support for Ethereum and L2 ecosystems. It has become an essential Web3 tool for users, thanks to its excellent technical accumulation and continuous innovation, providing advanced market tools and greatly reducing the barriers to user participation in Web3, allowing them to fully enjoy the on-chain world.
Although Ethereum has been progressing slowly, this massive creative machine has never stopped. From the border, home, metropolis, to tranquility, after multiple upgrades and numerous EIP proposals, each step is getting closer to becoming a scalable, decentralized, and globally accessible settlement layer. In addition, as market attention shifts from Bitcoin spot ETFs to Ethereum spot ETFs, it will bring more attention and vitality to Ethereum.
This article is provided by the official source and does not represent the position and investment advice of this website. Readers must conduct their own careful evaluation.
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