‘Dencun’ Upgrade Officially Deployed On Ethereum Mainnet, ETH Price Holds Steady Below $4,000
14 March 2024 - 12:00PM
NEWSBTC
Ethereum (ETH) has completed a major software upgrade, Dencun, that
promises to make utilizing the network ecosystem more
cost-effective. This update specifically targets Layer 2 (L2)
networks, such as Arbitrum (ARB), Polygon (MATIC), and Coinbase’s
Base, which are interconnected with Ethereum. With Dencun,
transaction costs on these networks have significantly decreased,
with fees dropping from dollars to cents or even fractions of a
cent. Ethereum Dencun Upgrade And Cost Savings Considered the most
significant change in Ethereum’s end-user experience, the Dencun
upgrade is expected to foster the development of new applications
and services by significantly reducing expenses. As NewsBTC
reported on Tuesday, the update introduces a new data storage
system, departing from the traditional approach of storing Layer 2
data on Ethereum itself. Adopting a new “blobs” repository reduces
data storage costs since information is warehoused for only about
18 days instead of indefinitely. Related Reading: Zooming NEAR:
Solid 75% Growth Sparks Crypto Frenzy One of the notable benefits
of the Dencun upgrade lies in its impact on decentralized exchanges
(DEXs) and gas costs. For instance, projected gas costs for popular
Layer 2 networks, such as Arbitrum, Optimism, and Coinbase’s Base,
are set to be significantly reduced. The projected savings
translate into a reduction of Arbitrum’s swaps from $2.02 to $0.40,
Optimism’s swaps from $1.42 to $0.28, and Coinbase’s Base swaps
from $0.58 to $0.01, emphasizing the pivotal role of this
upgrade. As the upgrade was successfully launched on the
mainnet, Tim Beiko, Ethereum Foundation core developer, expressed
his satisfaction with the work accomplished and claimed: Dencun is
both the most complex fork we’ve shipped since the Merge, and tied
for “most total EIPs in a fork” with Byzantium. There were more
teams than ever involved in the process, and it somehow all worked
out smoothly…! Grateful to work with all of them, onto the next
one. Blob Transactions And Pricing Changes Layer 2 network
Arbitrum has provided insights into the upgrade process.
It will take around one to two hours for blob transactions to
commence posting and for the new pricing changes specified by
EIP-4844 to come into effect. ArbOS Atlas, an upgrade that
supports Arbitrum Chains, will introduce further fee reductions for
Arbitrum One, set to be activated on March 18th. The updated
configurations include a reduction in the Layer 1 (L1) surplus fee
from 32 gwei to 0 per compressed byte and a reduction in the L2
base fee from 0.1 gwei to 0.01 gwei. Related Reading: Bitcoin
Whales Are Cashing Out Amid Push To New All-Time High The Dencun
upgrade unlocks cost-saving opportunities for Layer 2 networks and
addresses congestion concerns by freeing up more space on the
Ethereum network for additional transactions. While the upgrade
offers enhanced efficiency, it does come at the cost of no longer
retaining a complete record of all data indefinitely. However, as
Layer 2 networks embrace this new update to the Ethereum ecosystem,
the stage is set for accelerated adoption, usage, and broader
accessibility within the Ethereum community and its underlying
protocols. Dencun Upgrade Fails To Propel ETH Above $4,000
Despite the successful upgrade, ETH’s price remains unaffected,
continuing to consolidate below the $4,000 threshold. The token
attempted to surpass this crucial resistance level on Monday and
Tuesday but failed to sustain its position above it. For over 24
hours now, ETH has been trading between $3,930 and $3,970.
Nevertheless, it’s worth noting that ETH has maintained its upward
momentum, with gains exceeding 18% over the past fourteen days and
nearly 60% over the past thirty days. Additionally,
introducing the Dencun upgrade is expected to drive increased
demand for ETH, potentially sparking a renewed uptrend that could
bridge the gap between current trading prices and its previous
all-time high (ATH) of $4,878, achieved in November 2021. Featured
image from Shutterstock, chart from TradingView.com
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