Ethereum‘s upcoming Dencun update, set for March 13, marks a pivotal transition towards a rollup-centric enhancement road map. Prior to this significant network evolution, Fidelity Digital Assets published a research report underscoring the update’s capacity to transform Ethereum into an effective distributed database for Layer 2 solutions. Analyst Max Wadington predicts that the upgrade could result in near-zero cost transactions for users.
Enhanced Scalability and Market Growth
The report highlights the scalability improvements that the Dencun update is projected to bring, making Ethereum a more fitting distributed database for other blockchain networks. This scalability is foreseen to facilitate the accommodation of millions of users on Layer 2 networks, thereby expanding Ethereum’s user base and market reach.
The Dencun update’s key feature is the anticipated reduction in data storage costs on Ethereum for Layer 2 networks. This cost-saving measure is expected to lower transaction fees and foster enhanced accessibility and affordability across the network.
Rollups and Layer 2 networks, which enhance transaction speeds and reduce costs by operating atop the Ethereum mainnet, are central to these developments. Despite these advancements, the primary beneficiaries of the reduced transaction fees will be users of Layer 2 networks, not those on the main Ethereum network.
Layer 2 Altcoins Take the Spotlight
The current roster of top Layer 2 altcoins by market capitalization includes leaders like Polygon (MATIC), with others such as Optimism and Immutable following suit. According to market analysts and reports from Fidelity Digital Assets, these altcoins could experience significant valuation surges post the Dencun update.