Ethereum‘s highly anticipated Dencun upgrade has officially been rolled out, signaling potential shifts in the cryptocurrency‘s market value. This update is particularly significant for its introduction of “blobs,” which are designed to lower transaction expenses. This summary explores the implications of the upgrade for Ethereum.
The Onset of Dencun
Marked by a new block every 12 seconds, the Dencun update aligned with a peak in Bitcoin‘s price, suggesting a heightened influence on Ethereum’s value. The release occurred at 16:55 local time in Turkey, during a period of heightened anticipation within the crypto community.
Assembling the Update
Over a year of preparation went into the Dencun update, focusing on enhancing the efficiency and cost-effectiveness of layer2 solutions. The upgrade, melding the Deneb and Cancun projects, was executed across Ethereum’s consensus and execution layers. Its completion, initially set for the end of 2023, encountered delays due to technical issues, with extensive testing conducted on three testnets prior to release.
Impact on Layer2 Fees
Layer2 networks, such as Arbitrum and Starknet, operate as secondary smart contract platforms tied to Ethereum, allowing for improved speed and reduced costs. The Dencun update introduces “proto-danksharding,” facilitating the processing of layer2 data on the Ethereum mainnet, and is the update’s most substantial code addition.
Proto-danksharding paves the way for “sharding” techniques, which aim to lower costs and increase transaction throughput by segmenting the Ethereum blockchain. While the final form of sharding is still on the horizon, the Dencun upgrade marks a crucial advancement toward that horizon. The update is expected to significantly reduce transaction fees by 90% in the short term, drawing more users to both the main and secondary networks and potentially boosting the value of various altcoins.
