- The Dencun upgrade caused volatility for L2 tokens.
- Activity on Polygon and Arbitrum grew as fees fell, but optimism did not benefit.
Ethereums [ETH] The Dencun upgrade was expected to have a huge impact on the Ethereum network and its price.
However, Layer-2 networks were also expected to be affected by the introduction of ‘blobs’, designed to significantly reduce L2 costs.
An increase in volatility
Popular L2 tokens like Arbitrum [ARB]Optimism [OP]and Polygon [MATIC] witnessed huge price swings since the launch of Dencun.
There was a significant increase in the prices of all these token prizes, followed by a decrease at the time of writing.
In the last 24 hours, ARB’s price grew by 11.87% and reached a high of $2.562 before correcting and falling to $2.0625.
OP’s price had a similar trajectory, rising 7.45% before falling 4.19%. At the time of writing, OP was trading at $4.32.
MATIC was one of the few tokens to come out on top after witnessing volatility as it increased in value by 1.1% over the past 24 hours.
How did the networks respond?
Similarly, OP and ARB suffered from network growth, which declined in recent days. This indicated that new addresses were losing interest in these tokens.
OP’s number of new addresses at the time of writing was 2152, while ARB was 4074.
However, MATIC did not see a similar decline as network growth was a whopping 187,000 over the same period. So it could still keep the same interest from new users.
Source: Santiment
The frequency with which ARB and OP were traded had also decreased over the same period. ARB’s velocity was 1.894 at the time of the report, while OP was 3.188.
Source: Santiment
Along with the falling price, the fees paid to users on L2 networks also fell significantly. Data from Dune Analytics showed that costs for most L2s had dropped dramatically over the past 24 hours.
Source: Dune Analytics
In terms of network activity, it was found that both Polygon and Arbitrum witnessed an increase in activity after the Dencun upgrade.
However, the same couldn’t be said for Optimism, as it failed to take advantage of lower fees for users.
Read Polygon [MATIC] Price forecast 2024-25
AMBCyrpto’s analysis of Artemis data indicated that the number of daily active addresses on the Optimsim network has fallen from 115,000 to 73,000 in recent days.
Source: Santiment
While the impact of the Dencun upgrade has not been extremely large on L2 networks, the lower costs could help these protocols attract more users in the long run.