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Abbas🎩👾
@abbass.eth
Ethereum layer-1 network revenue collapses - What's causing it? (1/3) Despite a sharp rise in monthly users and daily transaction costs on Layer 2s, Ethereum Layer 1 network revenue has dropped by 99% since March 2024. Network fees peaked at $35.5 million on March 5, but the Dencun upgrade, which significantly lowered Layer 2 transaction fees, caused the decline after it went live on March 13.
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Abbas🎩👾
@abbass.eth
(2/3) The Dencun upgrade led to a significant drop in Ethereum Layer 2 fees, triggering a surge in competing L2 scaling solutions. Currently, there are 74 L2 and 21 L3 projects, far more than what the market needs, according to Anoma's CEO Adrian Brink. This intense competition has driven L2s to lower transaction fees, attracting users away from the Ethereum base layer and further decreasing network fees.
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Abbas🎩👾
@abbass.eth
The Dencun upgrade's lowered transaction costs offset the deflationary impact of EIP-1559, which burns a portion of fees. This reduction in fees has decreased demand for Ether (ETH), leading to a steady increase in its supply since the upgrade. The historically low transaction costs and reduced demand have driven ETH's price below $3,000.
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not_not_Duna 🍖➰🎩
@imduna.eth
holy shit 74 L2 and 21 L3 is enormous, way too fucking much
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