- Ethereum’s Dencun Upgrade went live on Wednesday, expected to significantly reduce transaction costs on Ethereum's Layer-2.
- ARB and LDO are up nearly 5% as part of ETH beta plays.
- Anonymous crypto user Spreek reports many queries about how to restore an L2 back online.
- Blast L2 reported challenges relating to Ethereum’s upgrade
Ethereum Dencun Upgrade went live on Wednesday, a landmark event expected to have a significant impact on transaction costs for the network’s layer 2 (L2) projects. With its, several L2 tokens have rallied, including Arbitrum (ARB) and Lido DAO (LDO), which are bother up nearly 5%. Amid the euphoria, the update has put ducks up for shooting.
Also Read: ARB, OP, LDO, METIS: ETH beta plays heat up this week as Dencun Upgrade goes live on Gnosis
Ethereum Dencun Upgrade impact on dead L2s
Ethereum Dencun Upgrade had already been pushed live on several of Ethereum's testnets. However, the real push, to Ethereum's mainnet occurred on March 13, roughly a year after the Shanghai upgrade from April 2023. This was when the newly upgraded Proof-of-Stake (PoS) network made it possible for users to un-stake their ETH.
Key rewards of the upgrade include:
- Significantly reduced transaction costs on Ethereum L2s.
- Enhanced network efficiency
- Cost-effective for users
Dencun upgrade reduction estimates for a few of the L2s in the Ethereum ecosystem
With these perks coming together, anonymous crypto user @spreekaway reported that there were many queries about how to restore an L2 back online. This is likely as users looked to leverage the provisions of the upgrade.
fiverr devs and chatgpt receiving unprecedented number of queries about how to bring an L2 back online
— Spreek (@spreekaway) March 13, 2024
Testimonies are already out, with @DwarfBattles indicating, “After the Dencun upgrade, fees per mint of our NFT badge decreased by more than 5 times!”
Impact on Blast L2
Elsewhere, reports indicate that with the upgrade, Blast L2, a new player in the Layer 2 space, was also affected. Specifically, the Blast Mainnet stopped producing blocks due to issues related to Ethereum’s Dencun upgrade. Core engineers were deployed to solve the issue.
The Blast Mainnet has stopped producing blocks due to issues related to Ethereum’s Dencun upgrade.
— Blast (@Blast_L2) March 13, 2024
Core engineering contributors are working on a fix. We’ll share an update and post-mortem once the fix is live (eta 30-60 min).
Blast L2 took the market by storm, with influencers and early adopters flocking it as it on-boarded projects with the promise of a unique approach to decentralized finance (DeFi). Specifically, it committed to promoting financial inclusion achieved via a community-driven platform.
The project started the early access phase of its airdrop in November, with participants requiring an invite code to enter.
Ethereum development FAQs
What is the next big Ethereum software update?
After the Merge, the Ethereum community is looking at the Sharding upgrade next, which has been slated for sometime later in the year. The development can be summarized in four words, “scalability through more efficient data storage.” The software update will increase the capacity of the blockchain, widening the amount of data that can be stored or accessed. At the same time, all services running atop the Ethereum blockchain will enjoy significantly reduced transaction fees.
What is the difference between hard fork and soft fork?
A fork is the splitting of a blockchain after developers agree and proceed to implement upgrades. The decision comes after these developers reach a consensus for a software upgrade. The ensuing part will see one part continue with the status as is, while the other one will proceed with new features combined with the former ones. A hard fork basically entails permanent divergence of a new side chain from the original one, while a soft fork is doing the same, only difference being that it is temporary.
What is EIP-4844?
EIP-4844 is an improvement proposal for the Ethereum network. The upgrade promises reduced gas fees, which is a valuable offering considering the high transaction cost that continues to daunt crypto players. It has been a long-standing concern for the Ethereum network. The proposal is also referred to as “proto-Danksharding,” with an unmatched ability to increase the speed of transactions on the Ethereum blockchain. At the same time, it helps to reduce the transaction cost as everything becomes decentralized.
What is gas in the context of Ethereum?
Gas token is a new, innovative Ethereum contract where users can tokenize gas on the Ethereum network. This means they can store gas when it is cheap and start to deploy the gas once the market has shifted to the north. The use of Gas token helps to subsidize high gas prices on transactions, meaning investors can do everything from arbitraging decentralized exchanges to buying into initial coin offerings (ICOs) early.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
LINK price jumps 10% as Chainlink races toward tokenization of funds
Chainlink (LINK) price has remained range-bound for a while, stuck between the $16.00 roadblock to the upside and $13.08 to the downside. However, in light of recent revelations, the token, which powers the verifiable web of the decentralized computing platform, may have further upside potential.
Gaming token Notcoin down by almost 50% after airdrop launch
NOT experienced a rapid decline hours after its anticipated launch on Thursday, shedding almost 50% of its value. This continues the cycle of huge selling pressure faced by cryptocurrency airdrops after their launch, especially the launch of gaming tokens in recent times.
Ethereum drops below $3,000 again, spot ETH ETF sparks debate in crypto community
Ethereum again went below the $3,000 key level on Thursday after posting signs of a rally. The price action follows predictions from the community regarding the SEC's decision on spot ETH ETFs next week.
SUI price defends $0.8880 amid multiple Sui network integrations
Sui (SUI) price failed to heed to the broader market recovery on Wednesday, extending the fall to the $0.8880 support level. However, with multiple network integrations in the works, the altcoin has pivoted around this level and is scaling a recovery.
Bitcoin: Why BTC is close to a bottom
Bitcoin (BTC) price efforts of a recovery this week have been countered by selling pressure during the onset of the American session. However, the downside potential appears to have been capped.