Ethereum Gas Fee Upgrade SHOCKING RESULTS!📉 Coinbase Fees Go to Zero🔥

Summary

The video discusses the Ethereum upgrade and its implications for transaction fees on Layer 2 solutions like Optimism, Arbitrum, and Avalanche. It highlights the significant fee reductions achieved and the potential for further scalability improvements. The video also touches on the shift of projects like WAGY to Base and Aether Games potentially moving to Avalanche, emphasizing the importance of transaction volume and ecosystem growth. Additionally, it mentions the efforts of platforms like Base to cover user gas fees, fostering a more accessible web3 environment.

Takeaways

• 🚀 The Ethereum upgrade, known as Denuon, is expected to significantly reduce transaction fees, making Layer 2 solutions like Optimism and Base more attractive for Ethereum transactions.
• 💡 Jesse Pollock from Coinbase's Base team highlighted that after the upgrade, fees could be reduced by three zeros, indicating a substantial decrease in transaction costs.
• 📉 The comparison of transaction fees shows that Base is now much cheaper than Solana, positioning it as a competitive Layer 2 solution for Ethereum.
• 🔥 The introduction of sharding and blob growth strategies in Ethereum's Layer 2 is expected to further enhance scalability and reduce transaction costs over time.
• 🌐 The script discusses the importance of smart contract wallets, which are enabled by low fees, and how they can lead to applications paying for gas instead of users.
• 💰 Base is working on a solution to address the issue of high network fees when connecting wallets, which could further reduce the cost of transactions.
• 🎉 The Super Chain App Accelerator's $3 million fund aims to cover user gas fees, making web3 applications more accessible and affordable.
• 📆 The Polygon ZK-VM44 upgrade is estimated to go live around May 1st, indicating a timeline for the implementation of these improvements.
• 🔄 The script mentions the potential for cross-chain decentralized exchanges (DEXs) like Dextelot to benefit from the upgrades, as they can operate across multiple blockchain ecosystems.
• 🎮 Wagy, a gaming project, has decided to move from Immutable X (IMX) to Base, showcasing the potential for projects to migrate to platforms that offer lower fees and better scalability.

Q & A

What is the main topic of the video?

The main topic of the video is the upgrade for Ethereum called 'Denon' and its implications on transaction fees and scalability in the Ethereum ecosystem.

What is the significance of the Denon upgrade?

The Denon upgrade is significant because it introduces scalability to Layer 2 solutions, potentially reducing transaction costs and driving them down, which is beneficial for the entire Ethereum ecosystem.

How does the Denon upgrade affect transaction fees?

The Denon upgrade is expected to greatly reduce transaction fees, with some estimates suggesting a 90 to 99% drop in L2 transaction fees on Base and other chains, making transactions cheaper and more efficient.

What is the role of Base in the Ethereum ecosystem?

Base is a Layer 2 scaling solution for Ethereum that aims to provide fast and cheap transactions. It is considered an alternative for other Layer 2 solutions like Optimism, Arbitrum, and Avalanche.

What is the expected timeline for the Polygon ZK-VM44 upgrade?

The Polygon ZK-VM44 upgrade is estimated to go live on the mainnet around May 1st.

How does the video script mention the role of smart contract wallets in the future of transaction fees?

Smart contract wallets are expected to play a crucial role in reducing transaction fees. They could enable apps to pay for gas fees on behalf of users, which is facilitated by low transaction fees resulting from upgrades like Denon.

What is the Super Chain App Accelerator mentioned in the script?

The Super Chain App Accelerator is a $3 million fund launched by Base to cover user gas fees for on-chain apps built on Optimism, aiming to make the cost of using Web 3 apps on the Super Chain zero for users.

What is the potential impact of the Denon upgrade on the growth of the Ethereum ecosystem?

The Denon upgrade sets the stage for more growth in the Ethereum ecosystem by introducing scalability and reducing transaction costs, which could attract more users and projects to the platform.

What does the script suggest about the future of transaction fee structures?

The script suggests that transaction fee structures will continue to evolve, with the potential for further reductions in fees as transaction volumes increase and scaling solutions like Layer 2s continue to develop.

What is the significance of the mention of Wagy moving to Base?

Wagy's move to Base signifies that projects are considering migrating to different platforms for better scalability and lower fees, which could be a trend for other projects in the future.

What is the potential implication of Aether Games moving to the Avalanche ecosystem?

The potential implication is that projects are exploring various ecosystems for better performance and cost efficiency. Aether Games potentially moving to Avalanche indicates a strategic shift that could influence other projects in the gaming sector.

Outlines

00:00

🚀 Ethereum's Denon Upgrade and Its Implications

This paragraph discusses the recent upgrade for Ethereum known as Denon, which is anticipated to significantly reduce transaction fees. The speaker, Paul, highlights reports suggesting that the upgrade could lead to a substantial decrease in fees from 38 cents to just four cents. The discussion includes insights from Jesse Pollock, a leader at Coinbase's base team, who emphasizes the importance of the upgrade in terms of fee reduction. The upgrade is expected to make Layer 2 solutions like Base more attractive for projects due to its lower fees compared to other chains like Arbitrum, Avalanche, and Optimism. The paragraph also touches on the potential for unlimited scalability in Layer 2s and the impact this could have on the future growth of Ethereum and its ecosystem.

05:02

🌐 Web3 Development and Ecosystem Growth

The second paragraph focuses on the challenges and developments within the Web3 ecosystem. It addresses the complexity and high costs associated with using Web3 apps, which can deter new users. To combat this, the speaker announces a partnership with Optimism to invest over $3 million into the Web3 development ecosystem. The goal is to reduce the cost of using Web3 apps to zero by covering gas fees for users. The paragraph also discusses the F upgrade for Polygon and its timeline, as well as the potential benefits for other blockchain projects like Avalanche and Dexelot. The speaker mentions an interview with the Wagman team, discussing their experience with OpenSea and the possibility of exploring alternative platforms for game development.

10:03

🎯 Project Migrations and Upcoming Developments

In the final paragraph, the speaker speculates on the potential migration of Aether games to the Avalanche ecosystem, indicating a shift in the gaming and innovation landscape within blockchain projects. The paragraph also mentions the upcoming launch of Pulsar and a related giveaway event. The speaker encourages viewers to subscribe to the channel for exclusive content and NFT packs, emphasizing the importance of community engagement and the value of staying informed about the latest developments in the blockchain and gaming sectors.

Keywords

💡Denon Upgrade

The Denon Upgrade refers to a significant update for Ethereum, a blockchain platform. In the context of the video, this upgrade is expected to drastically reduce transaction fees, making Ethereum more scalable and efficient. The script mentions a reduction in fees from 38 cents to four, indicating a substantial improvement in the network's performance.

💡Ethereum

Ethereum is an open-source, blockchain-based, decentralized platform that enables developers to build and deploy smart contracts and decentralized applications (dApps). In the video, Ethereum is central to the discussion as the Denon upgrade is specifically for this platform, aiming to improve its transaction processing capabilities and reduce fees.

💡Layer Two

Layer Two refers to a framework or protocol built on top of a blockchain, like Ethereum, to increase its scalability and reduce transaction costs. These solutions process transactions off the main blockchain, hence 'Layer Two.' The video discusses Ethereum's Layer Two solutions and their role in the Denon upgrade.

💡Gas Fees

Gas fees are the transaction costs required to perform operations on the Ethereum network. They compensate miners for the computational work involved in processing and validating transactions. The video highlights the reduction of gas fees as a result of the Denon upgrade and Layer Two solutions.

💡Base

Base, in the context of the video, refers to a Layer Two solution for Ethereum that aims to provide faster and cheaper transactions. It is one of the alternatives discussed for reducing gas fees and improving the scalability of the Ethereum network.

💡Arbitrum

Arbitrum is another Layer Two scaling solution for Ethereum that allows for the execution of smart contracts and transactions off the main Ethereum blockchain, thereby reducing gas fees and increasing transaction throughput. The video discusses the potential of Arbitrum in the context of the Denon upgrade.

💡Optimism

Optimism is a Layer Two scaling solution for Ethereum that uses Optimistic Rollup technology to batch and process transactions off-chain, leading to lower gas fees and faster transaction times. The video mentions Optimism in the context of its potential benefits from the Denon upgrade.

💡Avalanche

Avalanche is a high-performance, open-source platform for launching decentralized applications and decentralized finance (DeFi) protocols. It is mentioned in the video as a platform that could benefit from the shift in projects looking for alternatives to Ethereum's Layer Two solutions.

💡DEXEL LOT

DEXEL LOT is a cross-chain decentralized exchange (DEX) mentioned in the video. It is highlighted as an interesting component in the ecosystem, especially with its potential launch on Arbitrum, which could significantly increase its daily trading volume.

💡Polygon

Polygon, formerly known as Matic Network, is a platform for Ethereum scaling and infrastructure development. It is mentioned in the video in relation to its upcoming upgrade, ZK-Rollup (ZKVM44), which is expected to improve the network's performance and scalability.

💡Wagy

Wagy is a gaming project mentioned in the video that has decided to migrate from Immutable X (IMX) to Base. This move is significant as it indicates a shift in projects looking for more efficient and cost-effective platforms for their operations.

💡Aether Games

Aether Games is mentioned in the video as a project that might be considering a move to the Avalanche ecosystem. This is significant as it suggests a trend of projects exploring different blockchain platforms for better performance and cost-efficiency.

Highlights

Denon upgrade for Ethereum aims to significantly reduce transaction fees.

Ethereum's Layer Two solutions, such as Base and Arbitrum, are expected to see a reduction in fees due to the Denon upgrade.

Jesse Pollock from Coinbase's base team highlights the transition from two zeros to three zeros in terms of fee reduction.

Base is being considered as an alternative for Layer Two solutions due to its low fees and fast transactions.

The Denon upgrade introduces scalability to Layer Twos, potentially leading to unlimited scalability and continuously decreasing transaction costs.

Optimism and Base are expected to benefit greatly from the fee reductions, making transactions cheaper than on other platforms like Solana.

Base is working on a solution to eliminate the high network fees when connecting wallets, which is a significant issue in current Layer Two solutions.

Coinbase is investing in smart contract wallets, which could lead to apps paying for gas instead of users, enabled by low fees.

Super Chain App Accelerator is launching with a $3 million fund to cover user gas fees, aiming to attract more users to the ecosystem.

Polygon's F upgrade (ZK-VM44) is estimated to go live on mainnet around May 1st, indicating a timeline for the implementation of the Denon upgrade.

Aether Games is potentially moving to the Avalanche ecosystem, indicating a shift in the gaming sector towards platforms with lower fees and better scalability.

Wagy, a project initially on IMX, is moving to Base, showing a trend of projects migrating to platforms with lower fees.

The Denon upgrade is just an incremental step towards a more aggressive sharding strategy for Ethereum.

Dexelot, a cross-chain DEX, is expected to see an increase in daily volume if it launches on Arbitrum.

The upgrade aims to make transactions essentially free, driving a 90 to 99% drop in L2 transaction fees.

The fee reductions are expected to open up a new class of applications and bring in a new cohort of users.

The ecosystem is seeing growth with decentralized social networks and web3 gaming, but user experience and high gas fees remain challenges.

Transcripts

[Music]

I want to give you guys an update on

Denon the upgrade for ethereum and what

this might mean there's actually some

reports now to where we can give you

guys some insights it's going to be good

my name is Paul be welcome back in Tech

path before we get started thanking our

sponsor and that is it trust Capital if

you guys are looking at long-term

holding of crypto one of the ways you

can do it is a crypto Ira so just jump

over to the itrust capital website

you'll get a $1 funding reward if you

decide to use our code down below does

help the channel so try to do that you

can hold your ethereum in there and also

your Bitcoin no monthly fees all you do

is is pay a little fee on your trades

just like a normal exchange so check it

out itust capital.com all right so we

were showing you guys this chart

yesterday or the day before on our eth

video on the Denon upgrade this is a

good example of it what the expectations

were for fees uh from a projection

standpoint you can kind of see it from

38 cents down to four Etc arbitrum po on

all reducing quite a bit for sure

another thing that if you look at it for

base the fees were even much lower uh

notice though this is a34 rate from 17

cents mainly these are the gas fees for

being able to transact on ethereum uh in

Layer Two so that was the purpose of den

con all right so one thing you can see

from Jesse Pollock this is one of the

guys that leads coinbase's base team

after two years hard of hard work um but

after the den it's actually instead of

you know what we showed was two zeros

it's actually three zeros

00005 in terms of the fee I'm going to

kind of zoom in on that and then it

shows some of the the base transactions

pre and then post right there in terms

of network fees so this is good for Bas

and it's good for a lot of projects to

maybe look at Bas as an alternative for

their layer to fastest and cheapest and

way to send ethereum is on base now you

can kind of see it right here as it

lines up against eth arbitrum avalan C

chain optimism Etc all right and some of

those issues I'll explain in a second

but this right here is just a good

example of how it Compares against Salon

much cheaper right now than salana so

that's another Advantage for Bas okay so

I want to go to a clip real quick this

is based on the fee reductions them

talking about it listen it put those

things together and that means blobs are

basically going to be free at first um

and so if you do the math with that

we're going to see 90 to 99% um drops in

in uh L2 transaction fees on base and

and other super chain chains I think

even over the longer term it's going to

be at least 10x um and it sets sets us

up for more growth in the future as well

right this is I like to emphasize that

uh this version of 4844 is just an

incremental step towards a more um

aggressive sharding strategy for uh and

and blob growth strategy for for l2s in

ethereum yeah and this is something I I

think most people don't realize is this

is just the beginning we're going to

actually be able to increase this blob

space capacity you know every 6 to 12

months kind of forever uh to keep up

scaling with all the the new transaction

growth that's coming on

ethereum all right so what that simply

means is that scalability has just been

introduced into layer 2os maybe

unlimited scalability we'll see but the

point being is that transaction costs

will continue to drive themselves down

and that is a huge huge deal for all of

the L twos now there the one thing I was

kind of explaining here all right so to

do anything on optimism you've got to

have eth in the wallet so you've got to

be able to go into the bridge so this is

showing the bridge uh right there on eth

uh two base and you can kind of see here

we're just putting in a you know a

number but on uh one e but if you look

here the network fees pretty low right

in terms of being able to transact that

the problem is when you actually connect

your wallet and go in what you have on

the back side are the eth network fees

so there's still a fairly good feat now

there is a solution that Bas is working

on that'll fix this this is so important

and I'm gonna go to a clip real quick

they'll explain it listen in I think

it's going to really open up an entirely

new class of applications and bring on

an entirely new cohort of users um we

you at coinbase we're investing heavily

in smart contract wallets um I think

we're going to see things like apps

starting to pay for gas right not users

having to pay for gas um and that is

enabled by smart contract wallets and

smart contract wallets are enabled by

low

fees so as you can see the daps will be

the bearer of the wallet cost or the The

Exchange fee costs uh of being able to

go into that is that sustainable yeah

could be in terms of a strategy to be

able to draw in a lot of people within

this larger ecosystem with what Bas is

doing so here's a good example of one

that is already covering gas fees on

this one so they launch super chain app

accelerator it's $3 million fund

optimism for onchain apps to cover their

users gas fees that's straight up kind

of the point here that they were talking

about there at base all good listen in

the clip that they were talking about

here decentralized social is taking off

web 3 gaming is exploding layer 2s are

experiencing more activity than ever

before however web 3 is still a daunting

place for users using a web 3 app is

complex and expensive with high gas fees

and a poor user experience it's time

kill the friction we're excited to

announce that we're partnering with

optimism to inject over $3 million into

the web3 development ecosystem bringing

the cost to use web 3 apps built on the

super chain down to zero no e required

Builders who qualify will receive

sponsorship for contract deployments

account abstraction and gas fees for

your apps user give them access to this

broad user base and extensive

distribution all right so talking about

polygon this is kind of the layout of

what they're going to do uh which is is

really talking about this item right

there which is the F upgrade now what

does that mean in terms of timeline the

timeline kind of rolls it out right here

on the polygon uh Tech site polygon ZK

vm44 estimated to go live on mainnet

around May 1st that's a little bit

further away than I kind of thought so

that in itself little bit behind there

but Hey listen everybody's going to be

kind of working this into to their

systems I think this is the key of being

able to grow in Layer Two definitely a

big one let me jump to another piece

piece right here this is kind of what

they're talking about polygon approve a

stake chain doesn't benefit from 4844

it's not a rollup therefore it doesn't

use a theum called at histor transaction

for polygon cdk chains support 48 488

4844 will be included later this year so

more delay there I think that's maybe

one of the disadvantages you know of

where this plays into the situation

around there too so I think optimism

wins on this Bas is obviously going to

be uh winning in a big way for sure the

other one is going to be Avalanche and

this is dexel lot coming in because this

is a pretty interesting component as

well dexel lot and arbitrum now being

know remember dexel lot is a cross chain

uh deck so that in itself pretty cool uh

you have to kind of look at the entire

uh ecosystem where many of these

projects are are line and where some of

these things are going to be able to

expand from so pretty interesting stuff

here of course is dexel lot after that

announcement it exploded on the charts

and a lot went up uh being the token a

lot went up appropriately so that's kind

of expected here Avalanche is going to

continue to do some pretty cool things

all right so one thing to kind of

compare here is also the uh just the

potential launch on arbitrum or when

they launch on arbitrum you're going to

continue to see this thing uh in terms

of daily volume absolutely explode so

Dex lot on the look for that one as well

I want to jump over to a clip we did

with the Wagman team it's been a while I

think maybe five six months go and we

were talking to them about the potential

shift of wagney listen in so you guys on

your Twitter you had uh you did your

announcement you had the September 27th

drop uh first of all how did it go you

to be honest with you it didn't go as

well as we expected it to there was a

little bit of some hoops that you guys

had to jump through it right now the way

the openc mint work because we were

actually featured on openc is we had to

leverage what they had to do as far as

the mint was concerned so they have L2

on IMX quite yet so therefore you know

having to do the L1 for the actual packs

when I look at IMX I just look at you

know there's a limited amount of of

featured marketplaces here I still look

at you know obviously things like

Avalanche uh salana you know some of

those other platforms that are

eventually going to grow so is this in

your road map at some point to maybe

look at some Alternatives there I mean

do you feel trapped in IMX at

all all right so that was some something

we talked about obviously IMX is a is a

very good project launch pad for many

games coming into the ecosystem but wagy

made a move and this was Scott Herman

talking about I'm very excited we've

been working for this for quite some

time wagy now going over to base so

that's a pretty big deal even Brian

Armstrong retweeted this so uh very

important with uh games because if it

does show the path for some of these

projects to be able to migrate be kind

of interesting to see how this goes

remember transaction and volume and

ecosystem matters in a big way and now

you're talking about something with this

upgrade that is going to be replicated

to be able to continue to reduce fees as

transaction scale climbs so all good

signs for everything another one to

watch that you need to pay attention to

is this one right here Aether games now

I'm going to zoom in on this right here

I want you to look at that that Q2 2024

what do you see there Aether subnet now

this is is another one that could be

moving and if this one moves it's going

to most likely go into the Avalanche

ecosystem so have we discovered Maybe by

mistake or intention that Aether games

is moving their way over to avac

interesting stuff man I think this is a

this is the cycle in which a lot of

these projects games and Innovation that

are happening in these key gaming

centers whether it is in layer 2 on eth

whether you look at salana what they've

been able to do and also Avalanche all

of this really kind of jumping in Pulsar

is getting ready to launch as well by

the way we're going to be doing a huge

giveaway for Pulsar on some nfts you

guys don't want to miss it I think we're

going to be doing that video on Friday

so make sure and subscribe to the

channel right now we'll be dropping that

in the video and you guys will have an

ACC access to a a pbn only uh nft pack

that is unbelievable it's you guys are

going to love it so uh subscribe to the

channel make sure and like this video if

you guys want more content like this we

always love it and of course catch me

out there on x Paul Baron we'll catch

you next time right here on Tech

by