The post Transaction Failures for Ethereum’s L2s Surge Despite Dencun Upgrade ⋆ ZyCrypto appeared on BitcoinEthereumNews.com.

Advertisement &nbsp &nbsp The Ethereum network’s Dencun upgrade has brought about unexpected challenges for its Layer 2 (L2) solutions, leading to a notable surge in transaction failures. The update, activated in March 2024, aimed to enhance efficiency and reduce costs for these secondary networks. However, recent data reveals that the benefits may have come with unintended consequences. According to a recent report by Galaxy Digital, the Dencun upgrade significantly decreased transaction fees on Ethereum’s L2 solutions. Interestingly, while this was initially seen as a positive change, it has inadvertently increased the MEV bot activity across these networks.  Maximal Extractable Value (MEV) bot activity refers to automated programs that exploit opportunities within blockchain networks to maximize profits by manipulating the order of transactions in a block. Notably, as per the report, the Dencun upgrade’s impact on transaction failures has been particularly pronounced on various L2 networks. For instance, as per the report, Base, Coinbase’s L2 network has experienced a failure rate as high as 21%, while Arbitrum and OP Mainnet have seen rates of 15.4% and 10.4%, respectively. These figures starkly contrast with the performance metrics of bot addresses, where failure rates are even more severe. On Base, bot addresses are responsible for 41.6% of failed transactions, Arbitrum sees 20.87%, and OP Mainnet has 12.85%. Advertisement &nbsp Christine Kim, Galaxy Digital’s head of research, highlighted that the surge in bot-driven transactions is a major factor behind the rise in transaction failures observed since the upgrade. “Activity on the leading L2s picked up immediately post-Dencun. However, the rise in transaction (txs) counts has been met with rising failure rates. The majority of the failed transactions stem from high activity addresses, likely bots. Low fees on L2s could be driving increased bot activity.” Kim tweeted on August 22. The increased failed transactions have…

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Filed under: News - @ August 26, 2024 9:27 pm