8 months ago
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The Ethereum Dencun upgrade is meant to further reduce layer two gas fees to make Web3 mass adoption a reality amid heightened L1 competition.
After months of meticulous research and development, the Ethereum (ETH) mainnet will undertake its largest upgrade since the Shanghai upgrade dubbed the Dencun upgrade. The Ethereum core developers have now scheduled March 13 as the date for enabling the Dencun upgrade on the mainnet at epoch 269568.
As a result, the Ethereum validators and node operators have been advised to update their software to the latest versions. However, the ordinary ETH user will not have to perform any updates unless otherwise informed by the respective protocols.
“When running a validator, both the Consensus Layer Beacon Node and Validator Client must be updated,” the announcement emphasized.
Closer Look at the Ethereum Dencun Upgrade
The name of Ethereum Dencun upgrade is a combination of Deneb, a first-magnitude star in the Cygnus constellation, and Cancun, the location for the Devcon 3. Moreover, Ethereum upgrades to the consensus layer (L2s) uses star names whilst those meant for the execution layer follow the Devcon city names.
The Ethereum Dencun upgrade has been undergoing rigorous testing in various environments, including Goerli and Sepolia, for the past year to ensure no error is passed on to the mainnet. Having been certified on all the testing protocols, the Ethereum core developers are now ready to make the mainnet more competitive. Furthermore, emerging layer one projects like Solana (SOL) and Cardano (ADA) have been working on dethroning Ether as the web3 and DeFi king.
Notably, the Ethereum Dencun upgrade will include several changes that are included in the EIP-7569. However, the most notable change will be the introduction of the data blobs through EIP-4844. The data blobs, also known as the protodanksharding, will help reduce the overall transaction fees on the Layer Two networks.
The introduction of lower transaction fees on Ethereum’s layer two networks will attract more Web3 developers, especially in the GameFi sector, which thrives on higher throughput for small transactions. Consequently, Ethereum will become more programmable amid the mainstream adoption of web3 protocols and digital assets.
Impact on the ETH Price Action
The implementation of the Dencun upgrade on the ETH price action is almost palpable amid the ongoing crypto bullish outlook. According to the latest market data from TradingView and Coingecko, ETH price has successfully broken out of a macro bearish trend. As a result, ETH price is now aiming for an all-time high (ATH) in the coming g months amid high-impact news.
In addition to the confirmed Dencun upgrade, the Ethereum ecosystem is anticipating an inevitable approval of the spot Ether ETFs in the United States by May.
With the heightened demand for Ethereum from institutional investors and retail traders, analysts forecast ETH price could easily reach at least $10,000 during this bull cycle.
