Key Points
- Ethereum developers have chosen March 13 for the mainnet deployment of the Dencun upgrade.
- The Dencun upgrade introduces proto-danksharding, a feature that brings “blobs” to the network, reducing storage needs and transaction costs on layer-2 networks.
- The upgrade will occur at slot 8626176, precisely at 12:55 UTC, pending ratification and confirmation on GitHub.
- The Dencun upgrade could potentially cause a rally in the price of Ethereum.
- There are several applications for spot Ethereum exchange-traded funds (ETFs) submitted to the United States Securities and Exchange Commission (SEC), but no approvals have been made so far.
The developers of Ethereum (ETH) have selected March 13 as the date for the mainnet launch of the Dencun upgrade.
During a bi-weekly call on Thursday, they officially started a countdown to initiate significant and long-awaited changes on the Ethereum network.
Dencun is Coming to the Mainnet
The decision was made during consensus layer call 127, the day after Dencun was launched on the Holesky testnet.
Testnet launches had started on January 17 with the Goerli testnet and continued with the Sepolia testnet on January 30.
The Dencun upgrade is considered one of the largest sets of changes to the Ethereum network for a number of reasons.
The most significant of these is the introduction of proto-danksharding, a feature that brings “blobs” to the network.
These blobs allow for temporary storage of heavy off-chain data, thereby reducing storage requirements.
By providing dedicated data storage space, blobs help to lower transaction costs on layer-2 networks.
Transactions that carry blobs will function like regular transactions, but with additional data.
According to Blocknative, the proto-danksharding process only permits a maximum of 16 blobs in each block, each one a maximum of 128 KB, adding about 2 MB of space to each block.
Nebojsa Urosevic, the co-founder of the ETH development platform Tenderly, stated that “Dencun will probably lower rollup transaction costs by up to 10 times, depending on blob space demand.”
The Dencun upgrade hard fork will take place on the Ethereum mainnet at slot 8626176, exactly at 12:55 UTC.
However, developers will need to ratify the date and confirm it on GitHub.
One of the main challenges faced by Ethereum is scalability, with the network currently only able to handle 15 transactions per second (TPS) without L2 networks or sidechains.
Potential ETH Price Rally
The announcement of the Dencun upgrade has led to a recent increase in the price of ETH, with observers predicting that the world’s second-largest cryptocurrency could reach $2,400.
At the time of writing, data from CoinMarketCap shows that ETH is now valued at $2,518, having risen by 4.1% in 24 hours and 9.5% in seven days.
Other major cryptocurrencies have also experienced similar increases, with Bitcoin’s 7-day performance showing a nearly 11% rise over 7 days, while BNB added 8%, and Solana gained 6%.
In addition to the Dencun upgrade, the potential for spot ETH exchange-traded funds (ETFs) is another factor favoring ETH.
Several prospective issuers have submitted applications for spot ETFs to the United States Securities and Exchange Commission (SEC).
Unfortunately, the SEC has yet to approve any of these applications, instead announcing multiple delays.
On January 18, the SEC delayed Fidelity’s application, and did the same for BlackRock on January 24.
The Commission also postponed a decision on Grayscale’s application on January 25.
On Wednesday, ARK Invest and 21Shares amended their application with provisions that specify cash creations and not in-kind creations.
The proposal also introduces staking, allowing 21Shares to stake some assets from its Cold Vault Balance via third-party providers.
