HTX Ventures: These Changes Are Quietly Happening in the Ethereum Ecosystem One Week After the Ethereum Dencun Upgrade
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HTX Ventures: These Changes Are Quietly Happening in the Ethereum Ecosystem One Week After the Ethereum Dencun Upgrade
As a stakeholder in Ethereum's growth, HTX Ventures is excited about these new development directions.
Navigating Web3 tides with focused insights
On March 13, 2024, the Ethereum network underwent the Dencun upgrade, a significant milestone in its development journey. This upgrade brought substantial cost reductions for Ethereum's Layer 2, opening up vast possibilities. In this report, HTX Ventures analyzes the impacts observed one week after the Ethereum upgrade, focusing on cost reductions, network performance improvements, and their profound implications for the entire Ethereum ecosystem.
As a stakeholder in Ethereum’s growth, HTX Ventures is excited about these new developments. The Dencun upgrade is fostering a more inclusive ecosystem and paving the way for more innovative and sophisticated applications in gaming, SocialFi, DeFi, cross-chain interoperability, and beyond.
HTX Ventures is the global investment arm of Huobi HTX, integrating investment, incubation, and research to identify the world’s most outstanding and promising teams. To date, HTX Ventures has supported over 200 projects across multiple blockchain sectors, with several high-quality projects already listed on Huobi HTX.
The chart shows that Ethereum remained highly popular in the market leading up to the Dencun upgrade on March 13, 2024. Source: Google Finance
Cost Reduction and Network Efficiency Improvements
EIP-4844 Integration
The Dencun upgrade introduced EIP-4844, which aims to address Ethereum’s high fees and slow processing times through the implementation of data blobs. Although technical complexity means full integration into rollups is still ongoing, significant improvements in Layer 2 gas costs have already emerged:
- Transaction fees significantly dropped across L2 platforms:
Average transaction fee changes: median down 50%-99% (as of March 14; source: DuneAnalytics Dashboard)
Arbitrum: $0.39 → $0.14
Base: $0.37 → $0.03
Optimism: $0.32 → $0.01
zksync: $0.19 → $0.1
Zora: $0.2 → $0.001
- Cost of posting data on L2s drastically reduced:
(Data as of March 14; source: DuneAnalytics Dashboard)
By shifting to data blobs for data publication, Layer 2 solutions successfully reduced Ethereum data publishing costs by 88%, from as high as $400 per transaction down to approximately $40.
- Mainnet Gas Fees Unchanged: Currently, Ethereum gas prices have not been significantly affected. However, as Blob API adoption continues, a reduction in Ethereum gas fees may become observable. This potential decrease can be attributed to several factors, including shifting rollup demands to blobs—freeing up capacity on Ethereum’s execution layer—and the separation of Ethereum gas fees from blob fees.
Source:https://ycharts.com/indicators/ethereum_average_gas_price
Future Outlook and Danksharding
Danksharding, a key component of Ethereum’s upgrade roadmap, promises further enhancements in network capacity and performance. Planned improvements include increasing the number of data blobs per block and exploring advanced data availability (DA) solutions such as PeerDAS. Ongoing research into MEV resistance, Verkle trees, and network optimization also aims to create a more efficient and user-friendly Ethereum ecosystem.
HTX Ventures Perspective
As a stakeholder in Ethereum’s growth, HTX Ventures is enthusiastic about these new directions. The Dencun upgrade’s focus on reducing costs, enhancing scalability, security, and usability not only fosters a more inclusive ecosystem but also paves the way for more innovative and complex applications in gaming, SocialFi, DeFi, and cross-chain interoperability.
Emerging Trends and Competitive Landscape
- Lower fees are enabling application-specific chains to return to Ethereum in rollup form, while the emergence of new L2 and L3 solutions marks a significant transformation within the Ethereum ecosystem.
- Competition among L2 solutions is intensifying, underscoring the importance for founding teams to prioritize users and developers, strengthen community building, infrastructure development, and implement comprehensive growth strategies—including business development, sales, and marketing.
Ethereum Side Notes:
- The emergence of Eigenlayer brings expanded connectivity to numerous protocols within the Ethereum ecosystem, introducing greater flexibility and diversity, ensuring the ecosystem becomes more agile and adaptive, further strengthening overall resilience and scalability.
- The pending approval of ETH ETFs, along with the SEC’s classification decision on Ethereum, will significantly impact the asset’s exposure in traditional markets. HTX Ventures is closely monitoring developments related to these events.
Conclusion
HTX Ventures remains committed to supporting Ethereum’s developmental journey, providing comprehensive assistance to projects at the forefront of decentralized data innovation. By advancing cutting-edge technologies, we aim to contribute to the long-term success and expansion of the Ethereum ecosystem. We believe that with technological progress and continuous community efforts, Ethereum will unlock even greater potential, delivering increased value and opportunities for users and developers alike.
References
2. Tom Wan
3. HTX ETH Dencun Upgrade Twitter space
4. https://ycharts.com/indicators/ethereum_average_gas_price
5. https://www.google.com/finance/quote/ETH-USD?sa=X&ved=2ahUKEwiZqoz1wISFAxV7EGIAHUAbAB4Q-fUHegQIBxAf&window=YTD
About Us
HTX Ventures is the global investment arm of Huobi HTX, integrating investment, incubation, and research to identify the world’s most outstanding and promising teams. As a pioneer in the blockchain industry for over a decade, HTX Ventures drives the advancement of cutting-edge technologies and emerging business models, offering comprehensive support—including funding, resources, and strategic advisory—to partner projects in building a sustainable blockchain ecosystem. To date, HTX Ventures has backed over 200 projects across diverse blockchain verticals, with select high-potential projects already listed on Huobi HTX. Additionally, HTX Ventures is one of the most active fund-of-funds (FOF) investors, collaborating with top-tier global blockchain funds such as Bankless, IVC, Shima, and Animoca to co-develop the blockchain ecosystem.
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