By
Godfrey Benjamin
May 9th, 2024
On March 13, at slot 8626176, the Ethereum network hard fork for Dencun will take place on the mainnet, after successful testnet launches.
Ethereum (ETH) developers have chosen March 13 to launch the Dencun upgrade on the mainnet. During a bi-weekly call on Thursday, the developers officially began a countdown to making significant and long-awaited chances on the Ethereum network.
Dencun is Coming to the Mainnet
Ethereum developers had consensus layer call 127 the day after Dencun was launched on the Holesky testnet. Testnet launches had begun on January 17 with the Goerli testnet, and the Sepolia testnet on January 30.
The Dencun upgrade is one of the biggest sets of changes to the Ethereum network for several reasons. Perhaps the largest is proto-danksharding, a feature that brings “blobs” to the network. The blobs allow for temporarily storing heavy off-chain data to reduce storage needs. Introducing blobs helps to reduce transaction costs on layer-2 networks by providing dedicated data storage space. Transactions that carry blobs will function like regular transactions but with extra data.
According to Blocknative, the proto-danksharding process only allows a maximum of 16 blobs in each block, each one a maximum of 128 KB. This will add about 2 MB of space to each block. According to Nebojsa Urosevic, the co-founder of ETH development platform Tenderly, “Dencun will probably lower rollup transaction costs by up to 10 times, depending on blob space demand.”
The Dencun upgrade hard fork will occur on the Ethereum mainnet at slot 8626176, precisely at 12:55 UTC. Nonetheless, developers must ratify the date and confirm it on GitHub.
One of Ethereum’s main challenges is scalability. Without L2 networks or sidechains, ETH can only handle 15 transactions per second (TPS). This makes it almost impossible to compete with other networks, such as the Lightning Network, which can handle 30 million TPS.
Potential ETH Price Rally
News of the Dencun upgrade ushered in a recent rally in the price of ETH, with observers sure that the world’s second-largest cryptocurrency would hit $2,400. As of this writing, CoinMarketCap data shows that ETH is now at $2,518 after rising 4.1% in 24 hours and 9.5% in seven days. There were similar increases in other major cryptocurrencies, with Bitcoin’s 7-day performance showing a nearly 11% increase over 7 days. Other altcoins also rose, with BNB adding 8% and Solana gaining 6%.
In addition to the Decun upgrade, the possibility of spot ETH exchange-traded funds (ETH) is another factor in favor of ETH. Several prospective issuers have submitted applications for spot ETF ETFs to the United States Securities and Exchange Commission (SEC). Unfortunately, the SEC has yet to make any approvals. Instead, the Commission has announced multiple delays.
On January 18, the SEC delayed Fidelity’s application, announcing 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. However, this section in the amendment is in brackets, suggesting that it is not critical to the application. Bloomberg ETF analyst James Seyffart already thinks the SEC will reject staking.