Ethereum’s upcoming major upgrade, “Dencun,” slated for release on March 13, is anticipated to immediately reduce gas fees on layer 2s by 75%, as per developers. This significant enhancement is driven by a new technological feature known as proto-danksharding, or blobs, which enhances scalability.
Proto-danksharding channels a portion of the data from Ethereum’s layer 2s into temporary storage “blobs,” lasting up to one month, to alleviate some of the validation work, resulting in cost and speed improvements.
Experts anticipate that gas fees may decrease to a level where crypto companies and projects are willing to cover them. Post-Dencun, gas fees could potentially diminish to the extent that crypto companies and projects are willing to bear the cost.
Following Dencun’s implementation, it is projected that a majority of users will transition to layer 2s, attracted by the reduced fees, thereby marking a paradigm shift in Ethereum’s mainnet operation, which will continue to serve as the backbone for the entire layer 2 network.
Post-Dencun: Is Ethereum’s Year 2024?
The narrative surrounding Bitcoin’s exchange-traded fund (ETF) significantly boosted crypto prices from late 2023 into early 2024.
Spot Bitcoin ETFs function as Bitcoin funds, acquiring and storing significant amounts of the cryptocurrency while issuing and redeeming their own publicly-traded shares, facilitating mainstream investor access to crypto investment via a regulated framework.
This regulatory approval for Bitcoin ETFs by the SEC in January has led analysts to believe that spot Ethereum ETFs are the next logical step for various reasons.
Standard Chartered Bank, headquartered in London, recently suggested that approval for Ethereum ETFs is imminent, potentially before May 23, given the SEC’s previous approval of Bitcoin ETFs by its January 10 deadline.
However, Ethereum’s regulatory classification remains uncertain compared to Bitcoin, which the SEC has stated is not a security. This ambiguity may pose challenges for approving Ethereum ETFs, as greater oversight would be demanded if Ethereum were classified as a security.
A potential complication emerged with Prometheum, the sole SEC-approved crypto company in the US, announcing the launch of its first crypto product, Ether custody, in late March. Analysts speculate that this move may prompt the SEC to clarify Ethereum’s regulatory status.
Disclaimer
Be forewarned that the content within our website is presented in utmost sincerity and intended for informational purposes only. Any course of action undertaken based on this information is solely at the reader’s discretion, assuming full responsibility for their decisions. This content also does not seek to persuade or advise anyone to invest, as it does not offer financial or trading guidance. We urge you to exercise caution and conduct thorough research, seeking guidance from a skilled financial advisor, before engaging in cryptocurrency or securities investments.
