DeFi & L1L2 Weekly - 📈 Ethereum L2 Transactions Surge as Fees Drop Post Dencun
Transactions spike as fees drop in Ethereum L2s post Dencun. Fidelity adds staking to Ether ETF application. Arbitrum rolls out Atlas upgrade, with additional fee reductions and more.
Weekly DeFi Index
This week's market capitalisation and volume indices were negative at -14.97% and -2.81%, respectively, while the volatility index was positive at +19.30%.
Chart of the Week
Ethereum Layer-2s have been seeing an increase in transactions following the successful activation of the Dencun upgrade on 13 March.
With this highly-anticipated upgrade is EIP-4844 which introduced ‘data blobs’. These blobs bypass the traditional ‘call data’ process to publish information on the Ethereum mainnet, enabling lower transaction fees in L2s. The reported jump in transactions can be attributed to the vast reduction in fees following the update. Average transaction fees on these L2s have experienced a significant reduction, with some platforms reporting up to a 99% drop.
News Highlights
Fidelity has updated its proposal for a spot Ether ETF to include staking, aiming to generate additional income for investors by staking a portion of the Ether held by the fund through trusted providers.
Arbitrum has implemented the Dencun upgrade within the Arbitrum ecosystem through the ArbOS 20 upgrade, known as ‘Atlas’. Atlas aims to reduce Ethereum Layer-2 transaction costs by integrating the blob transactions feature enabled by Dencun. With Atlas now live, Arbitrum also plans to implement additional reductions in execution transaction fees.
PancakeSwap is set to launch Version 4, introducing four key features – hooks, custom pool types, singleton, and flash accounting – to enhance on-chain trading efficiency and reduce costs.
Fantom prepares to launch Sonic upgrade, its latest release slated for spring. Sonic will introduce a new smart contract coding language and execution engine in the Fantom Virtual Machine, which was developed as an upgrade from the EVM Fantom previously borrowed from Ethereum.
Cosmos-based Canto Blockchain has unveiled Cyclone Stack aimed at scaling and improving performance by introducing an optimistic parallel execution Ethereum Virtual Machine (EVM). It also decided to remain a Layer-1 network instead of transitioning to Ethereum's Layer-2 as previously planned.
Decentralised derivatives platform Aevo has launched its token and airdrop, distributing over $95 million worth of AEVO tokens, leading to dissatisfaction among some users due to the amount received and high gas fees on the Ethereum mainnet.
The Solana-based meme coin, Slerf, encountered a major setback when the project's developer accidentally burned a significant portion of the token supply, resulting in the loss of $10 million from presale participants. Slerf’s price recorded an increase of approximately 242% hours following the incident.
Layer-2 network Blast halted for nearly an hour following the deployment of the Ethereum Dencun upgrade. The team did not specify the Dencun-related issue, however, core engineering contributors are actively working on a fix for the issues encountered during this pause in block production.
Mozaic Finance, a DeFi and yield optimisation protocol, was exploited for $2.4 million on the Arbitrum network on 15 March. According to blockchain security firm Certik, the attacker drained funds by calling the “bridgeViaLifi” contract, which is only callable by a developer wallet, thus citing the root cause to be a private key compromise.
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