The price of ETH experienced a decline of 3.2%, dropping from $4,076 to $3,949, shortly after the launch of the Dencun upgrade on Mainnet at 1:55 pm UTC on March 13 2024.
The upgrade constitutes a part of Ethereum’s broader strategy to improve scalability and decrease transaction costs for its users. One of the notable features of the upgrade is referred to as proto-danksharding (EIP-4844), which introduces a new transaction type involving ‘blobs’ of data that are small enough to keep disk use manageable.
At @EthereumDenver we hacked together a full data-blob-transaction prototype! (a.k.a. mini-danksharding)
Data blobs are the first milestone towards full ethereum sharding, enabling rollups like @optimismPBC to grow 100x in capacity.
Here's a tweet thread about the prototype 🧵
— proto.eth (@protolambda) February 20, 2022
Over the past 30 days, the price of Ether has surged by 58%, surpassing the broader cryptocurrency market’s performance by 14%. Although it struggled to maintain levels above $4,000, Ether achieved its highest price in over two years.
Ether prices recovered slightly from the early losses but remains 2.3% down in the last 24 hours trading at $3,974.53, according to CoinGecko.
According to analysts, the coming upgrade was one of the narratives driving Ether’s bull run, in addition to the spot Ethereum exchange-traded fund (ETF) decision. The U.S. Securities and Exchange Commission is anticipated to deliver its final decision on the matter by May 23 2024.
Historically, the cryptocurrency has experienced a rally leading up to the upgrade, followed by traders selling off during the event.
But going forward, the introduction of blobs is expected to result in cheaper transactions across Layer 2 rollups, with the end result that the upgrade would help make decentralized applications more cost-efficient and accessible for users on Layer 2s.Â
The benefits are material with the #Ethereum Dencun upgrade 🫡 (h/t @gelatonetwork @mlphresearch) pic.twitter.com/vcZulnYZFG
— Chris Burniske (@cburniske) March 13, 2024
The upgrade occurs approximately a year after the Shanghai upgrade in April 2023. The Shanghai upgrade marked a significant milestone as it allowed network participants to unstake their Ether for the first time following the network’s transition to a proof-of-stake consensus mechanism after the Merge.
Before Shanghai, Ethereum underwent the ‘Merge’ upgrade, which transitioned Ethereum from a Proof of Work to a Proof-of-Stake algorithm in September 2022.
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