This layer 2 is the biggest winner from Ethereum’s Dencun upgrade so far

Base's user metrics soared following the Dencun upgrade, achieving record low transaction costs and an all-time high of 855,000 daily active users.
The upgrade slashed Base transaction fees by 99.9% from the fees on Ethereum.
The upcoming Coinbase smart wallet may further boost Base's growth by making it easier for users to gain access to decentralised apps and assets.

User metrics on Base, an Ethereum layer 2 network that was incubated by centralised crypto exchange Coinbase, have surged since Ethereum’s Dencun upgrade went live on March 13, lowering transaction fees on layer 2 networks by as much as 98%.

Dencun was a series of nine different Ethereum Improvement Proposals, or EIPs. The most important was EIP-4844, which dramatically cuts the cost of transacting on layer 2 networks.

EIP-4844 introduced “blobs,” which are a unique transaction format that segregates layer 2 network transactions from standard network activity on the Ethereum mainnet, reducing congestion and transaction fees.

Thanks to Dencun, the median transaction cost on Base hit the lowest level of any layer 2 network. The cost to swap on popular decentralised exchange Uniswap now costs only $0.0018, and the cost to transfer Ether between wallets is only $0.004.

Median gas price to perform different transaction types on top layer 2 blockchains (GasFees.io)

A swap on Base is now 99.9% cheaper than it is on Ethereum, and it’s 98% cheaper than it is on Arbitrum, the largest layer 2 network by total value locked,

User metrics on Base surged following the upgrade, most notably, on March 16, when the number of daily active users hit an all-time high of more than 855,000.

The number of transactions in a single day hit an all-time high of more than 2.1 million on March 16, and as of today, there is $709 million of crypto assets deposited on the blockchain, another all-time high.

This makes Base the 11th-largest blockchain in terms of total value of crypto assets deposited and the fourth-largest Ethereum rollup.

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Aerodrome, a decentralised exchange, is the top protocol on Base by total value of crypto assets deposited, with over $310 million deposited and $482 million in weekly volume, both all-time highs. The native token, AERO, is up 19% in the last seven days.

Coinbase’s new wallet

Still, some users think that Base has even more room to grow because of the release of the Coinbase smart wallet.

Jesse Pollack, founder of Base, introduced the wallet to social media on March 1, saying it is the last piece to bringing billions of people onchain.

The wallet is still in a testing phase, but once it is live, it will enable traders on Coinbase to use their Coinbase balance to trade onchain.

That would significantly enhance the user experience for Coinbase users, because they would be able to access decentralised apps, tokens, and NFTs that aren’t available on the centralised exchange without having to use different wallet apps.

For protocols, once the wallet is released, it potentially opens the door to an influx of new users who may have not conducted transactions onchain before.

Given the close ties between Base and Coinbase, some believe Base will be the biggest beneficiary of this new change.

Got a tip about DeFi? Reach out at ryan@dlnews.com.