Base primes for fee reductions as Dencun upgrade approaches

Ethereum layer 2 scaling solution Base is poised to deliver substantial fee reductions for its users from day one of the highly anticipated Dencun upgrade on March 13.

The upgrade, which includes the implementation of EIP-4844, aims to enhance data availability on the Ethereum network, potentially driving down fees for rollups like Base by 10 to 100 times.

In a recent announcement, Base highlighted its active involvement in contributing to the EIP-4844 effort over the past two years, working alongside Optimism, the Ethereum Foundation, and other core development teams. The team expressed excitement about the upcoming mainnet activation of the upgrade, which is expected to have a profound impact on transaction costs for Ethereum Layer 2 solutions.

“One of our 2024 roadmap initiatives is to drive fees down across the board. We believe that fast, affordable transactions on a secure, decentralized L2 is critical to enabling everyone, everywhere to come onchain,” Base said in its Mirror.xyz blog post.

EIP-4844 and the Dencun upgrade

EIP-4844 was initially proposed in 2022 by Protolambda from OP Labs and Ethereum researcher Dankrad Feist. The primary objective was to reduce the costs for rollups to transmit their data to Layer 1 (L1), thereby enabling them to pass these cost savings on to end-users. To achieve this, EIP-4844 introduces a novel concept called “blobs,” which are a new type of data associated with L1 blocks.

These blobs are designed to be purely additive to Ethereum’s existing capacity for data availability. Crucially, the fee market for blobs operates independently from regular transactions, ensuring that their costs remain low even during periods of high L1 network congestion.

Notably, L1 nodes can delete blobs after approximately 18 days, preventing data bloat and capping additional storage requirements. Rollup operators can archive blob contents off-chain to ensure long-term availability, further enhancing the scalability and efficiency of the Ethereum network.

In simple terms, blobs are designed to increase Ethereum’s data availability capacity without impacting the existing infrastructure. These blobs are associated with Layer 1 blocks and have an independent fee market, ensuring that costs remain low even during periods of high network congestion.

Base noted that the fee reductions enabled by EIP-4844 are crucial for fostering innovation and unlocking new use cases, such as onchain gaming, closed-limit order book exchanges, and the application of emerging ideas from cryptography and AI within onchain applications.

Following the Dencun upgrade on March 13, the Ecotone OP Stack upgrade will activate on the Optimism Superchain ecosystem, extending the benefits of EIP-4844 to projects like Base, Mode, Zora, Aevo, and Fraxtal.

Other Layer 2 projects, including Polygon, zkSync, and Arbitrum, have also expressed optimism about the potential fee reductions resulting from the Dencun upgrade, underscoring the upgrade’s broader impact on the Ethereum ecosystem.