– Ethereum network features Dencun Upgrade on Wednesday, combining two separate updates.
– Markets anticipate dramatic impact on gas fees for Ethereum scaling networks.
– Arbitrum, Optimism, Lido DAO and Metis are likely to enjoy liquidity overflows as part of ETH beta plays.
Arbitrum (ARB), Optimism (OP), Lido DAO (LDO) and Metis (METIS) could record some volatility this week as part of the Ethereum (ETH) beta plays.It comes as
cryptocurrency markets anticipate March 13, when the Ethereum network’s Dencun Upgrade will take place.
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Is it time for ETH beta rotation as Ethereum Dencun Upgrade and Ether ETF narratives catch steam?
Ethereum Dencun Upgrade due on Wednesday
Ethereum (ETH) price is holding stable above the $4,000 psychological level, kept buoyant by speculation about the spot ETH exchange-traded funds (ETFs) and the Dencun Upgrade.Based on recent reports, the update has already gone live on Gnosis mainnet.This means you can send blobs on the Gnosis Chain.
The Dencun upgrade has been activated on the— Gnosis Chain (@gnosischain)
[@gnosischain]mainnet!
Next ➡️ Ethereum Mainnet
[pic.twitter.com/S6GKhfe3TX] [March 11, 2024]
However, the Dencun upgrade will take place on Wednesday, March 13, and is intended to significantly reduce transaction costs on Ethereum’s Layer-2 (L2).This would make it more efficient and cost-effective for users.
Of note, Dencun has already been pushed live on several of Ethereum’s testnets.But the real push, to Ethereum’s mainnet, will occur later
this week.
The upgrade is happening roughly a year after the Shanghai upgrade from April 2023, when the newly upgraded Proof-of-Stake network made it possible for users to un-stake their ETH.Ethereum price is, therefore, expected to record volatility around this event, but traders could find better trading opportunities with other altcoins on the Ethereum network.
ETH beta plays around Ethereum Dencun upgrade
Around this event, traders could find opportunities with lower market capitalization sized tokens in the Ethereum network.
Among them are Arbitrum, Optimism, Lido DAO, and Metis, with the first two being Layer-2 (L2) networks on Ethereum.
These altcoins could do well if the Dencun Upgrade radically reduces the L2 fees.However, we might see a short-term sell-the-news event.
Other projects that could benefit from the upgrade include Celestia, Avail and EigenDA, which could become more attractive because of the reduced cost of data available on Ethereum.
Also Read:
Ethereum price trades above $4,000 while anti-Ether political campaigns downplay spot ETH ETF
Ethereum development FAQs
What is the next big Ethereum software update?
After the Merge, the Ethereum community is looking at the Sharding upgrade next, which has been slated for sometime later in the year.The development can be summarized in four words, “scalability through more efficient data storage.” The software update will increase the capacity of the blockchain, widening the amount of data that can be stored or accessed.At the same time, all services running atop the Ethereum blockchain will enjoy significantly reduced transaction fees.
What is the difference between hard fork and soft fork?
A fork is the splitting of a blockchain after developers agree and proceed to implement upgrades.
The decision comes after these developers reach a consensus for a software upgrade.The ensuing part will see one part continue with the status as is, while the other one will proceed with new features combined with the former ones.A hard fork basically entails permanent divergence of a new side chain from the original one, while a soft fork is doing the same, only difference being that it is temporary.
What is EIP-4844?
EIP-4844 is an improvement proposal for the Ethereum network.The upgrade promises reduced gas fees, which is a valuable offering considering the high transaction cost that continues to daunt crypto players.It has been a long-standing concern for the Ethereum network.The proposal is also referred to as “proto-Danksharding,” with an unmatched ability to increase the speed of transactions on the Ethereum blockchain.
At the same time, it helps to reduce the transaction cost as everything becomes decentralized.
What is gas in the context of Ethereum?
Gas token is a new, innovative Ethereum contract where users can tokenize gas on the Ethereum network.This means they can store gas when it is cheap and start to deploy the gas once the market has shifted to the north.The use of Gas token helps to subsidize high gas prices on transactions, meaning investors can do everything from arbitraging decentralized exchanges to buying into initial coin offerings (ICOs) early.
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