Ethereum Layer 2 Fees Plummet 90-95% Post Dencun Upgrade

Ethereum Layer 2 transaction fees have plummeted by 90-95% following the Dencun upgrade in March 2024, which introduced EIP-4844. This upgrade created a new data storage method called 'blob space' that rollups use instead of costly calldata, significantly reducing costs for batch posting transactions.

The fee drop is attributed to several factors, including enhanced compression, smarter batching, and competition among Layer 2 providers. However, fees still vary by transaction complexity, time of day, and demand for blob space, and could rise again if blob capacity is overwhelmed or if the price of ETH increases.

Users are advised to check live fee aggregators and consider factors like liquidity and bridge safety when choosing an L2 for transfers or swaps. This will help ensure that transactions are processed efficiently and at a reasonable cost.