Ethereum Dencun Upgrade is Approaching: Which Layer 2 Tokens Stand Out?

• Layer-2 DeFi platforms on the Ethereum blockchain demonstrated strong network activity last week, leading to a robust price rally in DeFi tokens.
• Among some of the leading DeFi tokens showing strong price increases and transaction activity are $UNI, $COMP, $COTI, $SUSHI, and $AAVE.
• As of the time of writing, Mantle is trading at $0.95 with a market cap of over $3 billion and a 24-hour trading volume surpassing $175 million, marking a 200% increase.

With Ethereum’s Dencun upgrade approaching, tokens of Layer-2 DeFi platforms on Ethereum have started to gain attention.

Interest in Ethereum L2 DeFi Tokens

Layer-2 DeFi platforms on the Ethereum blockchain demonstrated strong network activity last week, leading to a robust price rally in DeFi tokens. This comes during a period when Ethereum is preparing for the London upgrade, which is expected to bring significant improvements to the network in terms of security, scalability, and functionality.

Following last week’s Uniswap announcement, DeFi tokens, especially those associated with Ethereum Layer-2 scalability platforms, emerged from the shadow of AI tokens. Among some of the leading DeFi tokens showing strong price increases and transaction activity are $UNI, $COMP, $COTI, $SUSHI, and $AAVE.

One of the recent entrants, Mantle (MNT), drew attention by recording a 20% gain in the last 24 hours. As of the time of writing, Mantle is trading at $0.95 with a market cap of over $3 billion, and its 24-hour trading volume has surged over 200%, surpassing $175 million.

An important feature of Mantle Network is its compatibility with the Ethereum Virtual Machine (EVM). Its modular architecture divides transaction execution, data accessibility, and transaction finality into separate modules, allowing for individual updates and integration of the latest developments.

As Mantle (MNT) has experienced significant growth, the value of Ethereum staked as mETH (Mantle Staked ETH) has surpassed $1.5 billion. Therefore, it plans to provide attractive airdrops to mETH holders.

How Does the London Upgrade Benefit L2s?

The Dencun upgrade is a significant component of Ethereum’s ambitious initiative called “The Surge,” bringing a series of Ethereum Improvement Proposals (EIPs) aimed at enhancing the network’s efficiency and functionality. One standout is EIP-4844, introducing Proto-Danksharding, a groundbreaking development for Ethereum’s scalability.

A notable feature of EIP-4844 is its introduction of “blob-carrying transactions,” a new transaction type that significantly reduces transaction costs for users, especially on Layer-2 (L2) networks, thereby increasing Ethereum’s transaction capacity.

The substantial reduction in fees on Ethereum Layer-2s is expected to make L2 chains an attractive option for both decentralized application (dApp) developers and users. Therefore, the appeal and adoption of Layer-2s are expected to surpass alternative Layer-1 solutions.

The effects of the Dencun upgrade are impacting the entire Ethereum ecosystem, influencing decentralized finance (DeFi) applications, gaming platforms, and various other sectors.