Ethereum L2s Arbitrum, Optimism and Polygon See Gains Ahead of Dencun Upgrade

Just hours to go until the Dencun upgrade goes live on Ethereum mainnet, the tokens of layer-2 scaling solutions like Arbitrum, Optimism, and Polygon have all seen hefty gains.

Arbitrum is the only one to have seen double-digital gains as the Ethereum community counts down the minutes to Dencun. Its ARB token has risen 11% in the past day and 7.5% compared to this time last week. ARB rose as high as $2.25 early Wednesday morning, but has since settled to $2.20 at the time of writing.

Arbitrum is one of the largest layer-2 Ethereum scaling solutions, with a total of $16 billion worth of assets on its platform, according to L2 Beat. That gives it roughly 41% of the the L2 scaling solution marketshare.

An Ethereum Layer-2 (L2) solution is a secondary framework or protocol built on top of the Ethereum blockchain. The main purpose of these solutions is to increase the network’s capacity for transactions and improve scalability, without compromising on security.

That means L2 users get all the security benefits of Ethereum mainnet’s decentralization without having to pay the often-high gas fees on Ethereum.

The Dencun upgrade, which occurs later today, will enhancing the underlying architecture of Ethereum so that it can more efficiently process data. With it, developers have said that L2s will see their operation costs go down and that users will see transaction fees reduced by as much as 75%.

Here is what rollups spent on posting data to Ethereum in February.

Excited to see these costs get slashed when EIP-4844 goes live this month!

1. Arbitrum – $7.23m
2. zkSync Era – $6.02m
3. Optimism – $5.68m
4. Base – $3.79m
5. Scroll – $3.64m
6. Linea – $2.29m
7. Mantle -… pic.twitter.com/IY5SR0cLcI

— Kofi (@0xKofi) March 4, 2024

Meanwhile, Optimism—which handles roughly 24% of Ethereum L2 throughput—has seen its OP token gain 3% in the past day. OP has gained 27% over the past month, but is 3.5% lower than it was last week. At the time of writing, OP is changing hands for $4.50, according to CoinGecko data.

Just last week, the Optimism Foundation announced that it had entered into a private sale of 19.5 million OP tokens. The foundation didn’t disclose who the buyer is, but did say that the agreement includes a 2-year vesting period. While the tokens are locked up, they can still be delegated to third parties for use in voting in governance proposals.

Polygon, former known as Matic Network, maintains the Polygon PoS token bridge. It’s far and away the most dominant among Ethereum L2 bridges with a 30% marketshare, according to L2 Beat. Token bridges allow users to move assets from one network to another.

At the time of writing, its MATIC token has gained 4.7% in the past day and is trading for $1.24. The token has gained a staggering 18% since last week and has a market capitalization of $11.5 billion, according to CoinGecko.

And Ethereum’s ETH has mostly managed to keep its head above $4,000 in the run-up to the Dencun upgrade. At the time of writing, ETH is trading for $4,055.30 and has gained 1.2% in the past day. It’s 6.5% higher than it was this time last week, before it broke past $4,000 for the first time since 2021.

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