Ethereum Dencun Update Launches in 2 Days: Why It Matters
Ethereum's upcoming Denkun update is scheduled to ship on March 13th and is one of the most anticipated dry forks since the merger. Why is there so much anticipation around the update?
Ethereum's Denkun update could be a major milestone for Layer-2 matching solutions, as it is expected to significantly reduce the transaction fees of Layer-2 networks and increase Ethereum's overall scalability.
Denkun's hard fork consists of nine different Ethereum Improvement Proposals (EIPs). The name of the update combines Ethereum's execution layer with the Cancun update and the Deneb update on the consensus layer. The first part, Cancun, focuses on improving how transactions are managed and the performance layer, while the second part, Deneb, aims to improve consensus, which refers to how network participants agree on the state of the blockchain.
According to James Wu, CEO and founder of Digital Financial Group, the upgrade could greatly enhance the overall scalability, efficiency and security of the Ethereum network. He told Cointelegraph.
“A key feature of the Denkun update is the introduction of ephemeral data blobs with EIP-4844, also known as proto-danksharding. This development aims to reduce Layer-2 transaction fees by enhancing data availability, a critical step in establishing Ethereum as a scalable settlement layer.
However, the fee reduction promised to Layer-2 users will not affect users who transact directly on the Ethereum mainnet, Fidelity Investments research analyst Max Waddington said in a March 6 report. wrote:
“In the short term, users who want to take advantage of this payment change will have to sacrifice some decentralization and security by transacting on L2s instead of Ethereum. This will certainly encourage many users to link assets elsewhere. However, for application-specific purposes, transacting on Ethereum We still strongly believe that L2 platforms will continue to grow as the best option (especially for high value transactions) in the medium term.
Gas payments on the Ethereum mainnet rose to an average of 98 gwei on March 5, a level not seen since early May 2023. The average exchange costs users $87.45 per gas bill, while non-vulnerable token sales average $147 per gas, according to Eterscan. Data.
Speculation surrounding the update pushed Ether to $4,000 on March 8 for the first time since December 2021. The world's second largest cryptocurrency is up 14.7% on weekly and over 59% on monthly charts.
Bitcoin also hit a new all-time high of $71,415 on March 11, 36 days ahead of the Bitcoin halving event scheduled for April 20.
Related: Lowering developer friction is key to mass-scaling blockchain applications – Polygon Founder
