Is it getting cheaper or higher? Ethereum Dencun Upgrade and ETH Likely to Rise Above $4,000
The highly anticipated Dencun upgrade to the Ethereum (ETH) ecosystem is coming soon and promises significant benefits. cut down the money There are notable changes to layer 2 (L2) networks. The update, scheduled for March 13, will introduce a new data storage system known as Blobs, which will reduce congestion on the Ethereum network and power key new features in a variety of areas.
Ethereum Denkun Upgrade
As recently highlighted in Bloomberg: reportDencun aims to reduce the costs of layer 2 networks like Arbitrum (ABR), Polygon (MATIC), and Coinbase’s Base by making previously costly transactions much cheaper.
In particular, the report noted that the cost of transactions that previously cost $1 has now been reduced to 1 cent, and the cost of other transactions that used to cost cents has also been reduced to less than 1 cent. These cost savings are expected to significantly improve the end-user experience and are a significant improvement over previous upgrades such as “Merge” in September 2022.
One of the most important aspects of the Dencun upgrade is the introduction of blobs, a new type of data storage for layer 2 networks. Current layer 2 blockchain Storing data on the Ethereum network passes significant storage costs onto applications and users.
But for blobs, layer 2 Cost savings are achieved by storing data for a much shorter period of time, approximately 18 days. This change sacrifices storing the full history of every transaction forever, while also reducing congestion by freeing up more space on the Ethereum network for other transactions.
AI-based trading strategy
According to the report, the introduction of Blob through the Dencun upgrade opens the way for using artificial intelligence (AI) in a variety of applications. For example, games can integrate AI-based non-player characters to provide advanced gameplay features and deeper experiences.
in Decentralized Finance (DeFi), automated market makers can incorporate “complex trading strategies” based on AI models. This newfound flexibility and complexity is expected to foster innovation and foster the development of advanced applications in the Ethereum ecosystem.
Additionally, the Dencun upgrade is expected to significantly reduce the operating costs of the layer 2 chain. Previously, getting a Layer 2 project up and running required significant venture funding. However, Bloomberg reported that the cost savings brought by Dencun will allow small teams to launch and maintain layer 2 chains.
While the adoption of Blob and its associated cost benefits are expected to bring immediate benefits, Blob’s costs include: stain This may increase over time as demand increases.
How can Dencun boost ETH price?
Although the price of ETH has corrected by more than 3% in the last 24 hours, with the current trading price at $3,916, the Dencun upgrade is likely to have a positive impact on the price.
This upgrade aims to make Ethereum a more attractive platform by significantly reducing the cost of the layer 2 network and improving the overall user experience. decentralized application (dApp) and other use cases. By lowering transaction fees and improving scalability, Dencun can attract more users and developers to the Ethereum ecosystem, potentially increasing demand for ETH tokens.
It is worth noting that despite the ongoing correction, the current ETH price is not far from its two-year high of $4,084. However, it is important to consider that the price has been formed. double top pattern For the second day in a row, this could be a short-term hurdle for ETH price on daily timeframe. The market’s reaction and ETH’s ability to break above the nearest resistance level are yet to be seen.
Featured image from Shutterstock, chart from TradingView.com
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