Layer 2 Cryptocurrencies Show Mixed Performance Following Ethereum's Dencun Upgrade

According to CoinDesk, layer 2 cryptocurrencies displayed a mixed performance as the Ethereum blockchain's Dencun upgrade went live. Tokens of Polygon, Arbitrum, and Starknet experienced gains, while Immutable X and Celo declined. The Dencun upgrade, which is considered the biggest milestone for the ecosystem in almost a year, introduced a new way of storing data on the congested blockchain. This change was expected to reduce transaction costs on layer-2 networks to a few cents and spur activity and attract more applications. Native tokens of Polygon (MATIC) and Arbitrum (ARB) added 8%-10% before the upgrade, retracing some of the advance by the time the upgrade kicked in at 13:55 UTC. They are still up 6%-7% over the past 24 hours, while METIS' 2% gain outperformed the broad-market CoinDesk 20 Index's (CD20) 1.5% advance. Starknet (STRK) had been falling until the upgrade activated, then shot up almost 10%, erasing earlier losses. It was recently 6% higher over 24 hours. Starknet posted that it already submitted its first batch of data in a "blob" that benefits from the reduced fees Dencun makes possible. The Starknet Foundation, an organization behind the network's development, also laid out plans on Tuesday for further cost reductions for users. Optimism (OP) also rallied nearly 10%, but dropped more than its rivals ahead of Dencun and was up less than 2% on the day. Gaming-focused L2 Immutable X (IMX) ended a short-lived advance to decline 6%. Celo (CELO) slid 7% while the Ethereum blockchain's native token, ether (ETH), was little changed just below $4,000. QCP Capital noted that ether could see a correction as anticipation for the upgrade passes and diminishing probability of a spot ether ETF being approved in the U.S. in the near future. A correction in crypto markets is often seen as a decline of at least 10%.