The Ethereum Dencun upgrade in March inadvertently led to an increase in transaction failures across layer-2 (L2) networks, Galaxy Research says.
Christine Kim, a Galaxy researcher, highlighted this finding in an Aug. 22 post on X, discussing the impact of data blobs introduced by the upgrade.
She referred to an in-depth analysis by crypto investment firm Galaxy, named “150 Days After Dencun,” published on Aug. 21. The report showed that failed transactions and bot activity on layer-2s had increased significantly since the upgrade, which reduced fees.
Following the activation of EIP-4844, the average daily transaction volume on Ethereum L2 networks doubled to 6.65 million in the 150 days post-upgrade. However, this uptick also correlated with higher failure rates in transactions, largely attributed to bots exploiting the lower fees.
Kim noted that the majority of transaction failures came from high-activity addresses: “The majority of the failed transactions stem from high-activity addresses, likely bots. Low fees on L2s could be driving increased bot activity.”
According to the report, Base had a failure rate as high as 21%, Arbitrum saw up to 15.4%, and OP mainnet experienced up to 10.4%.
Addresses engaging in 100 or more transactions daily saw even higher failure rates, reaching 41.6% on Base, 20.87% on Arbitrum, and 12.85% on OP mainnet. Conversely, addresses with lower activity, making five or fewer transactions a day, faced much lower failure rates, with a maximum of 4% across the observed networks.
Ethereum L2s are not alone in facing such challenges. A Coinbase report on layer-2s from Aug. 13 revealed that Solana also has a high transaction failure rate, with 25% to 45% of non-vote transaction fees being spent on failed transactions.
However, DeFi Report founder Michael Nadeau argued that bot activity is not necessarily harmful, asserting that bots create liquidity and improve market efficiency while paying transaction fees on public blockchains.
The March upgrade, through EIP-4844, introduced proto-danksharding, which enabled temporary data storage for rollups, reducing the strain on Ethereum’s execution layer.
