Ethereum’s Major Upgrade “Dencun” Set to Reduce Gas Fees by 75%
Ethereum’s highly anticipated upgrade, known as “Dencun,” is scheduled for release on March 13. According to developers, this upgrade will immediately decrease gas fees on layer 2s by a whopping 75%. The significant reduction in gas fees is made possible by a new technological feature called proto-danksharding, also known as blobs. This feature funnels some of the data from Ethereum’s layer 2s into temporary storage blobs for up to one month, offloading some of the validating work and making transactions cheaper and faster.
David Silverman, Vice President of Product at Polygon Labs, expressed optimism about the impact of Dencun on gas fees. He mentioned in an interview with Decrypt that gas fees might even drop to a level where crypto companies and projects are willing to cover them. The ultimate goal is to create a world where most users do not have to experience gas fees at all.
After Dencun: Is 2024 Ethereum’s Year
The recent boost in crypto prices has largely been attributed to the narrative surrounding Bitcoin exchange-traded funds (ETFs). These ETFs allow investors to gain exposure to Bitcoin without directly buying and storing the asset. Given the approval of spot Bitcoin ETFs by the SEC in January, experts believe that spot Ethereum ETFs are next in line for approval.
Standard Chartered Bank predicts that spot Ethereum ETFs will be approved before May 23, based on the SEC’s previous actions. However, there is some uncertainty surrounding Ethereum’s classification as a security. If the SEC views Ethereum as a security, it could pose additional challenges for ETF approval.
Prometheum, the only SEC-approved crypto company in the US, plans to launch its first crypto product in late March: Ether custody. This move may prompt the SEC to clarify its stance on Ethereum’s classification.
Hot Take: Dencun’s Potential to Reduce Ethereum Costs
The upcoming Dencun upgrade has the potential to significantly reduce gas fees on Ethereum’s network. With a 75% decrease in gas fees on layer 2s, users can expect cheaper and faster transactions. This development could lead to a world where gas fees become negligible and are covered by crypto companies and projects.
Additionally, the possibility of spot Ethereum ETFs gaining approval in the near future opens up new investment opportunities for traditional investors. The success of Bitcoin ETFs has paved the way for Ethereum ETFs, further fueling the growth of the cryptocurrency market.
As Ethereum continues to evolve and improve, 2024 could be a pivotal year for the cryptocurrency. With upgrades like Dencun and potential ETF approvals, Ethereum is poised for significant growth and adoption.
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