The Dencun upgrade to the Ethereum ecosystem was designed to reduce transaction costs and increase the network's accessibility. While the introduction of 'blobs' has drastically reduced Layer-2 fees by over 90% across various networks, it has also indirectly reduced Ethereum (mainnet) gas fees significantly. The low fees have led to less ETH being burned, increasing the supply and putting a damper on the price.

As a result, Ethereum's L1 revenue has dropped by 99% according to Token Terminal. Fees, which were as high as US$35.5 million (AU$52.8 million) in March, have dropped to a mere US$578,000 (AU$859,877) in early September.

Meanwhile, Layer-2 networks have become cheaper, leading to a significant increase in their active user base and transaction counts. The largest L2 chains, Arbitrum and Base, now account for the majority of Ethereum's active users, leaving OP Mainnet and zkSync Era behind.

Source: https://cryptonews.com.au/news/ethereum-worries-l1-revenue-drops-99-post-dencun-upgrade-123184/

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