Ethereum network has completed its highly anticipated Dencun upgrade. The latest upgrade aims to bring lower transaction fees on Layer-2 chains.
A Layer-2 (L2) transaction that used to cost $1 can now be done for a penny, and a transaction that used to cost a few cents will be almost free. Many chains, including Arbitrum, Polygon, and Coinbase Global, are awaiting this development on the Ethereum network. According to a press release by the developers, the upgrade will follow last year’s Shapella upgrade. It contains several changes, including the introduction of temporary data blobs with EIP-4844, also known as “protodanksharding”. These blobs help reduce L2 transaction fees.
If you currently hold any ETH, the Dencun upgrade will not impact your existing holdings. If you are an ETH node operator, you should also update your node’s execution and consensus layer clients to the relevant client versions.
Additionally, the Ethereum team explains that upgrades in the consensus layer use star names, and those in the execution layer follow Devcon city names. “Dencun” is the combination of Deneb, a first-magnitude star in the constellation Cygnus, and Cancun, the location of Devcon 3.
It aims to reduce Layer-2 transaction fees and develop new applications and chains over the network. The Dencun upgrade has also given ETH a slight boost in trading, seeing the token price rise just under 2% this morning and trading volume up 7%. Many investors expect the upgrade to cause a surge in ETH in the coming days.
