The upgrade enables layer 2 solutions to store data in “blobs” rather than costly call data.

Ethereum’s Dencun upgrade, launched on Wednesday, has implemented a mechanism aimed at reducing transaction costs associated with layer 2 solutions. These solutions batch and compress transactions before sending them to the mainnet, and the latest data indicates that the upgrade is delivering on its promises.

According to blockchain analyst Marcov’s Dune-based tracker, the average transaction fees on popular scaling solutions like Optimism have significantly decreased. For instance, the average fee on Optimism has dropped to nearly 4 cents from around $1.40, while Coinbase’s layer 2 solution Base saw its average fee decrease to 3 cents from approximately $1.50. Fees on other solutions like Arbitrum, zkSync, and Zora also experienced declines.

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The Dencun upgrade introduced Binary Large Objects (blobs), which allow for the attachment of large data chunks to regular transactions. Unlike call data, which is permanently stored on-chain, blobs store data off-chain and become inaccessible after three weeks. This change enables layer 2 rollups such as Optimism, Arbitrum, and zkSync to store data in blobs instead of costly call data, thereby processing transactions at a lower cost. However, it’s important to note that rollups need to implement blobs manually. Currently, Base, Optimism, Arbitrum, Zora, and zkSync have done so, according to Marcov.

Experts predict that the blob mechanism will eventually lead to a significant reduction in transaction costs on layer 2 solutions, with estimates suggesting a potential 90% decrease. For example, while 125 kb of call data costs approximately 0.06 ETH ($238), a similar-sized blob is expected to cost 0.001 ETH ($3.98), according to decentralized prediction platform Polymarket.

Despite these developments, the Dencun upgrade has not yet sparked increased investor interest in the native tokens of rollups, which are expected to benefit the most from the introduction of blob-carrying transactions.