Key Points
- The Dencun upgrade led to significant volatility for Layer-2 (L2) tokens.
- Despite reduced fees, Optimism didn’t benefit, while Polygon and Arbitrum saw increased activity.
The Dencun upgrade, a significant development for the Ethereum network, resulted in considerable price volatility for L2 tokens.
The upgrade was also expected to affect Layer-2 networks due to the introduction of “blobs”, designed to lower L2 fees substantially.
Price Fluctuations
Notable L2 tokens such as Arbitrum [ARB], Optimism [OP], and Polygon [MATIC] experienced significant price swings following the Dencun launch.
These tokens’ prices experienced an initial surge, followed by a decline.
In the past 24 hours, ARB’s price increased by 11.87%, reaching a high of $2.562, before correcting to $2.0625.
OP’s price followed a similar pattern, rising by 7.45% before dropping by 4.19%. At the time of reporting, OP was trading at $4.32.
Despite the volatility, MATIC managed to appreciate by 1.1% in the last 24 hours.
Network Growth and Activity
In terms of Network Growth, OP and ARB suffered a decline, indicating a loss of interest from new addresses.
At the time of reporting, the number of new addresses for OP and ARB were 2152 and 4074, respectively.
Contrarily, MATIC’s Network Growth remained robust at 187K, suggesting it maintained interest from new users.
The trading frequency of ARB and OP also decreased during the same period, with ARB’s Velocity at 1.894 and OP’s at 3.188.
Alongside the price decline, the fees paid by users on L2 networks significantly reduced. Data from Dune Analytics showed a drastic drop in fees for most L2s in the past 24 hours.
In terms of network activity post the Dencun upgrade, Polygon and Arbitrum saw an increase, but Optimism didn’t capitalize on the reduced fees.
Analysis of Artemis’ data showed that the daily active addresses on the Optimism network dropped from 115,000 to 73,000 in recent days.
While the Dencun upgrade’s impact on L2 networks hasn’t been extremely significant, the reduced fees may help these protocols attract more users in the long run.
