Ethereum’s issuance has dropped to its lowest level since August 2022 following the significant Dencun update activated on March 13. This was reported by CNBC, citing a report from CryptoQuant.
According to Ultra Sound Money, the market inflow of ETH over the past 30 days fell to -0.88% compared to an average of -0.25% since the implementation of The Merge hard fork.
“Activity on the Ethereum network has led to high transaction fees and, consequently, the burning of more fees,” noted CryptoQuant’s head of research, Julio Moreno.
According to The Block, the network has reached annual highs in the number of active and new addresses, daily transactions, and their volume.
“The total number of daily transactions is at a record high not seen since May 2023. High activity leads to a sharp increase in fees, burning more coins, and reducing the overall supply,” Moreno emphasized.
Since the activation of the fee-burning mechanism during The Merge, approximately 7 million ETH have been issued, while about 4.2 million have been burned. The market supply of the asset stands at 120 million ETH.
A key component of the Dencun update was EIP-4844. It includes the Proto-Danksharding option, designed to scale the network by creating a new type of transaction for large binary data arrays (BLOB). The solution aims to reduce fee sizes for L2 protocols, especially those based on Rollups technology.
Following the activation of the hard fork on the Ethereum mainnet, second-layer networks recorded a significant reduction in gas fees.
In the Base network, the number of daily transactions surged to a record 2 million from approximately 420,000 before Dencun.
Rollups Benefit from Dencun. Is Base Leading?
According to L2BEAT, the Coinbase-backed protocol ranks sixth among L2 solutions by capitalization, with a value of $1.47 billion. This is ten times less than the segment leader, Arbitrum One.
However, after Dencun, the Base network shows the lowest fees for interactions, such as with the leading DEX Uniswap, slightly surpassing the Optimism mainnet with a TVL of $8.14 billion.
Uniswap founder Hayden Adams noted the success, stating that trading on Optimism now costs less than $0.01 per transaction.
Trading in Uniswap on Optimism now costs less than $0.01 in gas
Let’s fucking go, we’re scaling ethereum
Huge shoutout to everyone involved in shipping Dencun pic.twitter.com/CDmWEvS8LW
— hayden.eth ? (@haydenzadams) March 14, 2024
Polygon developers have also expressed hope for fee reductions as a result of Dencun, acknowledging that Rollups networks will be the primary beneficiaries.