Ethereum Layer-1 Fees Drop 99% After Dencun Upgrade, Paving the Way for Layer-2 Solutions

The Dencun upgrade on the Ethereum network has caused layer-1 fees to collapse by 99%, marking a significant shift in how transactions are processed on the blockchain. This fee reduction has led to a surge in layer-2 solutions, which are now competing to capture market share as users seek faster and cheaper transaction options.

The drastic fee reduction has created new opportunities for scaling solutions, but it also raises concerns about network sustainability, particularly with respect to miner revenues and Ethereum’s long-term security model. The upgrade’s impact on the broader ecosystem is still being assessed, but the near elimination of layer-1 fees is already reshaping Ethereum’s competitive landscape.