Posted:
- The recorded value of zkEVM dropped last week along with network activity.
- The Dencun upgrade will reduce transaction fees, which could help zkEVM.
Polygon [MATIC] zkEVM has been witnessing a decrease in network activity for a week. Initially, things seemed worrying for the L2, but thanks to Ethereum, the scenario could soon change [ETH].
zkEVM benefit from Dencun?
AMBCrypto’s analysis of Artemis data revealed a drop in zkEVM network activity.
Over the past week, zkEVM’s daily active addresses dropped. Thanks to that, the L2’s number of daily transactions also followed a similar downward trend.
Source: Artemis
The drop in network activity also took a toll on the L2’s captured value. This was evident from the significant decline in both zkEVM’s fees and revenues over the past seven days.
However, Ethereum is about to undergo a major upgrade that could change the fate of all L2s, including zkEVM.
Source: Artemis
For starters, Ethereum’s Dencun upgrade will be the next major update since last year’s Shapella upgrade. The long-awaited upgrade aims to improve the scalability and efficiency of the Ethereum network by lowering the cost of L2 transactions.
The Dencun upgrade will include several new features, including the use of proto-dankhardening, which will ultimately allow more transactions per second.
The upgrade is scheduled for March 13.
Also, IntoTheBlock recently posted a tweet revealing that the update would reduce L2 transaction fees by up to ten times.
Since transaction fees would drop, this could increase the likelihood that L2s like Polygon zkEVM will gain more transactions in the coming months.
L2 transaction fees are expected to drop by a factor of 10 from the current average of $0.23, thanks to the upcoming Ethereum Dancun upgrade. pic.twitter.com/9GuLgxky08
— IntoTheBlock (@intotheblock) February 10, 2024
Polygon zkEVM versus competition
While the Dencun upgrade could change zkEVM’s fortunes, it still has a long way to go to catch up with its top competitors.
According to Artemis, both Polygon zkEVM’s daily active addresses and daily transactions were significantly lower than those of zkSync Era and Base.
However, things in the DeFi space were not in zkEVM’s favor either, as the L2’s TVL remained much lower than its contemporaries at the time of writing.
Source: Artemis
Read Polygon [MATIC] Price prediction 2024-25
In the meantime, MATIC price gained bullish momentum. According to CoinMarketCapthe token has risen by more than 10% in the past seven days.
At the time of writing, MATIC was trading at $0.8567 with a market cap of over $8.2 billion, making it the 14th largest crypto.