The Ethereum (ETH) network has undergone the long-awaited major upgrade with the Dencun software. The upgrade will affect Level-2 (L2) networks, specifically Arbitrum (ARB), Polygon (MATIC) and Coinbase's Base, which are based on Ethereum.
Ethereum's Dencun upgrade introduces a new way to store data, which is expected to increase activity and attract more applications.
The upgraded ecosystem should become more cost-effective, as Dencun is expected to significantly reduce transaction fees. The reduction will be from a few dollars to a few cents or even fractions of a cent.
Dencun is expected to be the most significant change for users of the Ethereum blockchain, according to experts. In addition, the reduction of gas fees on the network will lead to the development of new applications and services.
Dencun has introduced a new storage system, which is different from the traditional Level-2 storage scheme in Ethereum. Data storage costs are reduced thanks to using a new repository of "BLOB objects". This is due to the fact that they are only stored for 18 days.
The main benefit of the upgrade made by Dencun is cited as making changes to decentralized exchanges (DEX) and reducing gas fees. Level-2 networks such as Arbitrum, Optimism and Base will be affected.
On the Arbitrum network, the changes will reduce swaps from $2.02 to $0.40, on the Optimism network from $1.42 to $0.28, and on the Base network from $0.58 to $0.01.
Starknet's Level-2 network successfully synchronized with Ethereum's Dencun upgrade, resulting in a significant reduction in gas fees. Dencun reduced the gas fee on Starknet from $2 to $0.01-0.04, a 99% reduction. This increased Starknet's popularity by 10% and encouraged an influx of new developers.
Ethereum Foundation core developer Tim Beyko commented on the results after the successful upgrade: "Dencun is the most complex fork we've released since the merger. It has the highest total number of EIPs in the fork" with Byzantium. More teams were involved in the process than ever before to make sure everything went smoothly. Kudos to everyone for a job well done!
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Level-2 network Arbitrum has published data on the upgrade process. It will take approximately two hours for BLOB transactions to start posting, during which time the fee changes will take effect.
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Additional fee reductions for Arbitrum One will be launched after the ArbOS Atlas network upgrade scheduled for March 18th.
Dencun introduces additional savings for Level-2 networks and eliminates congestion issues by providing more transaction space on the Ethereum network. Dencun guarantees improved network efficiency by eliminating full writes of all data.
The expansion of the upgrade to Level-2 networks has impacted the entire Ethereum ecosystem. This created a foundation for accelerated adoption and expanded availability in Ethereum protocols.
It's worth noting that even though the rollout of the upgrade was successful, it still didn't cause the value of ETH to rise above $4,000.
At the time of writing, ETH is trading at $3,971, and the change over the day amounted to -1.6%.
The asset is experiencing a consolidation at the level of $4,000, and experts believe that a jump in price will occur some time after the upgrade.
The Dencun hardfork is expected to cause an increase in demand for ETH, which will lead to a new upward movement, thanks to which the asset will be able to overcome the historical high (ATH) of $4,878, recorded in November 2021.
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