The Impact of the Dencun Upgrade
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1. What is the Dencun Upgrade？
Every upgrade Ethereum undergoes is named after the location of the Ethereum Developers Conference. Past upgrades include the London upgrade, the Berlin upgrade, and the previous Shanghai upgrade. This time, the Ethereum upgrade is named after the Mexican coastal tourist city of Cancun. Ethereum's Dencun upgrade is also known as Cancun-Deneb upgrade. If you want to learn more about the history of Ethereum upgrades, you can read "A Quick Review of Ethereum's Past Upgrades Route."
The purpose of the Dencun upgrade is to address Ethereum's scalability needs while reducing transaction costs on the second layer network and improving transaction efficiency. This Dencun upgrade is based on several Ethereum Improvement Proposals (EIPs), including EIP-4844, EIP-6780, EIP-1153, and EIP-6475, with EIP-4844 being the focus of this upgrade. For more details on upgrade proposals and scalability-related explanations, you can read "Dencun Upgrade: A New Chapter in Ethereum Scalability."
2. Dencun Upgrade Time
The Dencun upgrade is scheduled to officially launch on March 13, 2024. This date was determined after successfully deploying all Ethereum testnets (including Goerli, Sepolia, and Holesky), indicating that the Ethereum mainnet is ready for the upgrade.
Before the mainnet launch, comprehensive testing and verification of the upgraded features can be conducted on different testnets to ensure thorough preparation and network stability before the mainnet launch. If any contract vulnerabilities or issues are discovered during testing, adjustments may be made to the final launch time accordingly.
3. Impacts of Dencun Upgrade
3.1 Improving Network Efficiency and Scalability
The Dencun upgrade adopts a new scalability solution called Danksharding, which significantly enhances the network's transaction processing capacity and greatly improves scalability.
3.2 Reducing On-Chain Data Costs
After the Dencun upgrade, the gas fees for Layer2 data publishing to the Ethereum mainnet will be reduced. Especially for solutions based on Rollup, the gas fees for publishing data to the mainnet will be reduced to less than one-thousandth of the current cost.
3.3 Enhancing User Experience
The characteristics of low gas and high TPS will further unleash the potential of Layer2 networks, fostering more use cases such as games with high-frequency transaction needs. Users will no longer worry about transaction fees and efficiency while enjoying a richer ecosystem on Layer2 networks.
3.4 Boosting Investor Confidence
The Dencun upgrade will significantly enhance the utility of Ethereum, consolidating its position as the "King of Public Chains." Meanwhile, it will benefit Layer2 protocols and their ecosystems. The OP ecosystem will become more diversified, and the ZK ecosystem will become more available due to enhanced data availability.
The impact of the Dencun upgrade may have a positive effect on the market perception of Ethereum, which will help increase investor enthusiasm for ETH. Additionally, tokens related to the Layer2 sector affected by the upgrade, such as OP and ARB, will also become considerations for investors.
You can buy ETH Layer 2 network tokens on MEXC. Simply select [Spot] on the official MEXC website, select a spot trading crypto, such as ETH, OP, ARB, etc., and select an order type, such as market order, to place a buy order.
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