- zkEVM’s captured value dropped last week, along with its network activity.
- The Dencun upgrade will reduce transaction fees, which could help zkEVM.
Polygon [MATIC] zkEVM has been witnessing a decline in network activity for a week now. At first, things looked concerning for the L2, but the scenario might change soon, thanks to Ethereum [ETH].
zkEVM to benefit from Dencun?
AMBCrypto’s analysis of Artemis’ data revealed a drop in zkEVM’s network activity.
Over the last week, zkEVM’s daily active addresses sank. Thanks to that, the L2’s number of daily transactions also followed a similar declining trend.
The drop in network activity also took a toll on the L2’s captured value. This was quite evident from the considerable plummet of both zkEVM’s fees and revenue over the last seven days.
However, Ethereum is about to undergo an important upgrade, which could change all L2s’ fate, including zkEVM.
For starters, Ethereum’s Dencun upgrade will be the next major update since last year’s Shapella upgrade. The much-anticipated upgrade is aimed at enhancing the Ethereum network’s scalability and efficiency by reducing the costs of L2 transactions.
Several new features will be included with the Dencun upgrade, including the use of proto-danksharding, which will eventually enable more transactions per second.
The upgrade is scheduled to take place on the 13th of March.
Also, IntoTheBlock recently posted a tweet revealing that the update would reduce L2 transaction fees by up to 10 times.
Since transaction fees would drop, it could increase the chances of L2s like Polygon zkEVM gaining more transactions over the coming months.
L2 transaction fees are expected to drop by 10x from a current average of $0.23 thanks to the upcoming Ethereum Dancun upgrade. pic.twitter.com/9GuLgxky08
— IntoTheBlock (@intotheblock) February 10, 2024
Polygon zkEVM vs. competition
Though the Dencun upgrade could change zkEVM’s fate, it still has a long way to go to catch up with its top competitors.
As per Artemis, both Polygon zkEVM’s daily active addresses and daily transactions were considerably lower than those of zkSync Era and Base.
However, things in the DeFi space also did not favor zkEVM, as the L2’s TVL remained much lower than its contemporaries at press time.
Read Polygon’s [MATIC] Price Prediction 2024-25
In the meantime, MATIC price gained bullish momentum. According to CoinMarketCap, the token was up by more than 10% in the last seven days.
At the time of writing, MATIC was trading at $0.8567 with a market capitalization of over $8.2 billion, making it the 14th largest crypto.