The Dencun upgrade in March 2024 was a major milestone for Ethereum, but it also brought with it unforeseen challenges, particularly for layer-2 networks.
Christine Kim, a researcher at Galaxy, highlighted that this update inadvertently caused an increase in transaction failures on these networks.
Ethereum Layer 2 Networks Face Challenges
August 21st Kim analysisTitled “150 Days After Dencun,” it revealed that since the fee reduction upgrade, there has been a noticeable increase in failed transactions and bot activity on Layer 2 networks.
The report highlighted that following the activation of EIP-4844, Ethereum L2 daily transactions more than doubled, growing by 6.65 million in 150 days. However, this surge in transaction activity has also been accompanied by a higher failure rate, which Kim attributes to bot activity driven by the fee reduction.
Most transaction errors are related to very active addresses, which are likely bots. Low L2 fees may be encouraging this increase in bot activity. For average users with normal transaction volumes, error rates are only slightly higher than before the Dencun upgrade.
Research has shown that Arbitrum, Base, and OP Mainnet have all seen notable increases in the proportion of failed transactions. On Base, the failure rate increased to 21%, on Arbitrum, to 15.4%, and on OP Mainnet, to 10.4% in the 150 days following Dencun. On the other hand, low-activity addresses with five or fewer transactions per day saw a maximum failure rate of 4.02% across all networks.
OP mainnet failure rate for these addresses has decreased since March 13, 2024, while Base’s rate has only increased slightly. Interestingly, Arbitrum’s failure rate for low-activity addresses increased by 545% after Dencun.
The reduction in rollup transaction costs and increased failures among high-activity addresses suggest that bot activity is likely driving the rise in failure rates on these rollups, according to the researcher.
Solana faces similar problems
Transaction error rates are not limited to Layer 2 networks alone. In fact, the popular Layer 1 network Solana also has a high transaction error rate.
In his recent reportCoinbase stated that of all Solana non-voting transaction fees, between 25% and 45% are spent on failed transactions.
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