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23/08/24
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Ethereum’s Dencun Upgrade: Surge in Transactions Coupled with Rising Failure Rates
The recent Ethereum Dencun upgrade, implemented in March, has led to an unexpected surge in transaction failures across various layer-2 networks. An analysis by a crypto investment firm highlighted the changes observed since the enhancement was activated. Following the introduction of EIP-4844, which aimed to reduce transaction fees through data blobs, the average daily transaction activity surged to over 6.65 million within the 150 days post-upgrade.
While the upgrade has facilitated this increase in transactions, it has simultaneously resulted in higher rates of transaction failures. This trend is understood to be primarily driven by bot activity, which has become more prevalent due to the reduced fees associated with layer-2 transactions. The analysis indicated that a significant portion of these failed transactions originated from high-activity addresses typically associated with bots.
Data revealed alarming failure rates among various networks: Base recorded a failure rate of 21%, Arbitrum reached 15.4%, and OP Mainnet experienced a 10.4% failure rate. Notably, users identified as high-activity or bot addresses attempting over 100 transactions a day faced staggering failure probabilities, with rates of up to 41.6% on Base and over 20% on Arbitrum. In contrast, addresses engaged in fewer than five transactions daily demonstrated substantially lower failure rates, capped at 4%.
This issue is not confined to Ethereum’s layer-2 solutions. Recent findings on Solana indicated that up to 45% of all non-vote transaction fees were linked to failed transactions, suggesting similar challenges across different networks. The role of bots in these contexts has sparked debate, with some contending that they contribute positively by enhancing liquidity and market efficiency. Meanwhile, the Dencun upgrade, which introduced proto-danksharding, intended to alleviate pressure on Ethereum’s execution layer, now finds itself entwined in a complex scenario of rapid growth coupled with operational challenges.
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