The Dencun update was released on March 13 within the Ethereum blockchain and now all the layer 2 solutions such as Optimism and Linea can benefit from it, promoting new data blobs within the blocks.
Immediately after the first hours, the first blocks containing this new type of transactions were seen on-chain, and over the days, more and more layer 2 chains have updated and started to take advantage of this update to lower their network fees.
In today's article, we want to compare the costs before the update with the transaction costs today, post-update.
For those who are not familiar with Dencun, it is the update of Proto-Danksharding and here on the official MetalSwap blog we have dedicated a mini-series to this topic.
In the first article, titled “Improvement Process: Proto-Danksharding” we introduced this update and it is absolutely the article to start with if you know nothing about this topic.
In the second episode of the mini-series, the article “Improvement Process: EIP-4844 Impact on DeFi” focuses on understanding how this revolutionary update for the Ethereum ecosystem could change the DeFi landscape.
Finally, in the third and last episode, “Improvement Process: DeFi Derivatives Dencun Revolution” the focus was on how this update could changes the specific sector of decentralized derivatives, of which MetalSwap is obviously a part thanks to its hedging contracts, the first to allow the opening of hedging swaps through trustless and decentralized smart contracts.
Estimates before the update were around a reduction of x10. In reality, however, at least until today, we have seen a greater reduction in commission costs, closer to a factor of x20/50.
Thanks to the L2 Fees website, we can see a summary of the current network costs on various layer 2s:
It is surprising to see network costs even lower than $0.01 on chains like Optimism, where MetalSwap's hedging contracts are available.
What does this mean?
Now users can essentially consider network costs to be free and thus have much more economical operations.
To compare with the costs before the update. On the MetalSwap dApp, one could pay from $0.15 to $0.40 to open a hedging position.
Even a simple swap on Uniswap, the decentralized exchange where XMT is also available, before the update could require fees of even $1 in times of high congestion on layer 2s like Linea or Arbitrum.
Today, it is possible to perform a swap on Uniswap on the Optimism blockchain between ETH and XMT for less than $0.01!
We can therefore define the Proto-Danksharding update as a real success, with the final result even surpassing the pre-update expectations.
Now, operating on MetalSwap and protecting against asset volatility is even simpler and cheaper!
-The DeFi Foundation
MetalSwap is a decentralized platform that brings Hedging Contracts on financial markets with the aim of providing coverage to those who work with Digital Assets and an investment opportunity for those who contribute to increase the shared liquidity of the project. Allowing the protection for an increasing number of operators.
With MetalSwap we enable Hedging Contracts on the DeFi field, AMM style.