Ethereum Dencun upgrade day triggers surge in layer 2 protocol token value Ethereum Dencun upgrade day triggers surge in layer 2 protocol token value
The Dencun upgrade is expected to have a significant impact on Ethereum's ecosystem, with an anticipated reduction in layer2 network fees.
2 min read
Updated: Mar. 14, 2024 at 5:07 pm UTC
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The imminent launch of the Ethereum Dencun upgrade at 14.00 UTC today, March 13, has sparked a notable surge in the prices of native tokens for layer-2 protocols, including Arbitrum, Polygon, and Optimism.
According to CryptoSlate’s data, the sector has surged by approximately 5% in the last 24 hours, reaching a total market capitalization of $20.21 billion. This growth maintains a consistent upward trend of 10% observed throughout the week.
Layer-2 tokens increase
In the past 24 hours, Arbitrum’s ARB token surged by approximately 10% to reach $2.18. This surge coincides with the team’s planned release of over $1 billion ARB tokens this week.
Arbitrum is the leading layer-2 Ethereum scaling solution, with assets worth approximately $16 billion locked on the platform, according to L2Beat.
During the same period, Polygon network’s MATIC token witnessed a 4% uptick to $1.23, marking its highest value since March 2023. This upward trend is concurrent with a notable increase in the active addresses on the Polygon PoS chain, which recorded over 1 million daily active addresses for 20 consecutive days.
Similarly, Optimism’s OP token rose by 2.26% to $4.5, according to CryptoSlate data, a significant milestone considering its starting point at around $3.5 earlier this month.
Notably, the Optimism Foundation disclosed a private sale of 19.5 million OP tokens last week. While the buyer remains undisclosed, the agreement includes a 2-year vesting period.
Lastly, Loopring’s LRC experienced a more modest gain of 1.34% during the same reporting period, currently trading at $0.43140 as of press time.
Why are they rising?
The token’s price surge can be credited to the upcoming Dencun upgrade, which is set to launch within a few hours.
Dencun aims to improve Ethereum’s network scalability significantly. The integration of EIP-4844, known as proto-dank sharding, will introduce blob-type transactions, lowering transaction costs for layer-2 chains. This move will enable mass scalability via layer-2 rollups by minimizing data availability expenses.
Mara Schmiedt, the CEO of Alluvial, told CryptoSlate that the Dencun Upgrade represents a giant leap in Ethereum’s ecosystem resilience and performance.
According to her:
“The combination of Ethereum’s rollup-centric scalability model, the upcoming Dencun upgrade, and the rapid proliferation and transaction growth on L2 points to an optimistic future.”
Mentioned in this article
Author 
Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
Editor Editor 
Liam 'Akiba' Wright
Also known as "Akiba," Liam is a reporter, editor and podcast producer at CryptoSlate. He believes that decentralized technology has the potential to make widespread positive change.
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