🔥Ethereum (ETH), the second-ranked crypto by market cap, has had a breakout month as Ether price has climbed from $2,165 on Jan. 23 to hit a high of $3,488 on  29/02/2024 representing a gain of 60%. 

💥According to Kerel Verwaerde, the Chief Marketing Officer for Cryptology.com, “The Dencun upgrade, which is divided into two upgrades – one in the execution and one in the consensus layers – is a continuation of the efforts to make Ethereum more scalable, especially using layer 2s (L2), which paves the way for the continuation of Ethereum being the undisputed king of utility blockchains.” 

“When looking at the growth we've seen in the Layer 2 space over the past year, it's clear the underlying infrastructure is primed for explosive growth if we can further reduce costs,” said Jesper Nielsen, Chief Operating Officer at Northstake. “Developer activity on L2 networks increased by 133% and the number of contracts grew by 303% – that's tremendous momentum. But right now, settlement costs still pose a barrier.” 

“The Dencun (EIP-4844) upgrade could reduce those costs by an order of magnitude or more,” Nielsen said. “Imagine if a company like Slack, which spends an estimated $85 million per year on cloud fees, could see those costs reduced 10x to just $8.5 million annually. Those kinds of savings could be transformative and help spur the uptake of decentralized solutions.” 

💥He noted that “Previous Ethereum upgrades tended to solve narrow problems — things like reducing gas price volatility,” but said EIP-4844 “could take Ethereum to the next level by fundamentally improving its scaling and efficiency through vastly lower settlement fees. That doesn't just close gaps – it enhances Ethereum's core capabilities.” 

“If EIP-4844 can deliver on its promise of reducing costs by 10x or 100x as hoped, it could ignite a Cambrian explosion of activity and use cases across Layer 2 networks,” Nielsen concluded. “The future is bright if we can unleash the pent-up potential of the burgeoning L2 ecosystem.” 

“The Dencun upgrade is going to bring scalability and cheaper transactions to Ethereum L2s, and, in consequence, to Ethereum as well,” said Miguel Prada, co-founder and Tech Lead at Diva Staking. “It provides new features that enable novel trustless applications that were not possible, especially those related to Ethereum staking, for which Diva Staking, a new liquid staking protocol, is especially excited about.” 

💥Prada said the improvements to scalability will make “the network more suitable for day-to-day applications and potentially attract new crypto users who find the current ecosystem excessively costly or convoluted.” 

“Imagine the Ethereum network as a large, bustling city, like New York or Hong Kong. The Decun upgrade for Ethereum is like a city-wide renovation project that comprises a number of simultaneous projects,” he said. “Just like a city upgrade might include fixing roads (the execution layer, with the Cancun upgrade) and improving the power grid (the consensus layer, with the Deneb upgrade), Decun aims to make Ethereum more efficient and cost-effective.”  

💥Leclere said proto-danksharding is like “introducing a new, faster, and cheaper public transportation system into a city. Right now, Ethereum uses ‘calldata’ for transactions, which is like using taxis for every single person in the city. It works, but it can get pretty expensive and congested at times of high demand.” 

 

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