The much-anticipated Dencun upgrade of Ethereum, which enables a reduction in gas fees on layer-2 solutions through proto-dank sharding, has been launched on March 13. This development has garnered both praise and skepticism from speculators.
Ruslan Lienkha, chief of markets at crypto wallet provider YouHodler, believes that the upgrade will not have a significant impact on the price of ETH in the short term. However, he expects an increase in activity on the blockchain and foresees long-term growth in ETH’s price due to its enhanced value in the competitive landscape of new layer 1 blockchain projects.
Mara Schmiedt, CEO of liquid staking development firm Alluvial, holds a bullish view on the implications of the Dencun upgrade, even in the short term. She highlights the recent institutional surge in Bitcoin and the approaching $100 billion total value locked in Ethereum’s DeFi ecosystem as factors that make this scalability-focused upgrade highly anticipated. Schmiedt emphasizes that Ethereum’s scalability issues have hindered mainstream adoption and the accommodation of a growing number of users and transactions.
Onno Sterk, chief operating officer of crypto exchange OSL, considers the Duncun upgrade to be of significant importance as it addresses critical issues that have hindered the network’s development for years. Sterk believes that high transaction fees and limited scalability have stifled innovation and hindered the wider adoption of blockchain technology across various sectors.
Over the past year, ETH has experienced a 141% return, driven by optimism surrounding the Dencun upgrade, speculation about the approval of spot Ether exchange-traded funds (ETFs), and the broader recovery of the crypto market. However, ETH’s performance has been overshadowed by Bitcoin, which has seen a 198% return during the same period. While crypto enthusiasts anticipate a favorable decision on Ether ETFs by the U.S. Securities and Exchange Commission (SEC) in May, not everyone shares this sentiment.
Lienkha believes that the SEC will find excuses to postpone the decision and does not expect approvals this spring. However, he considers the probability of a positive decision to be quite high. Eric Balchunas, senior ETF analyst at Bloomberg, has also cautioned that the odds of an Ethereum ETF approval in May may not be as optimistic as some may anticipate.
Schmiedt emphasizes that for Ethereum to achieve meaningful adoption, institutional adoption, widespread accessibility, and clear regulatory frameworks are crucial. She encourages active participation from the Ethereum community, including developers, users, and investors, to contribute their expertise and perspectives to shape the future of Ethereum.
Overall, the Dencun upgrade going live on the Ethereum mainnet has generated both excitement and doubt among market participants. Its potential impact on gas fees, scalability, and the future of Ethereum remains to be seen.