Big news for Ethereum! So, make sure to mark your calendars for January 17th, 2024. The Dencun upgrade will be about lowering gas fees, which is something we have all been waiting for, especially since that was kind of promised with the Ethereum Merge with its transition from Proof of Work to Proof of Stake.
Ethereum developers targets its first testnet deployment of the big upgrade dubbed “Dencun.” January 17th, 2024 will be the date for the Goerli testnet to run through Dencun, the next upgrade that will enable Proto-Danksharding (EIP-4844).
Purpose Of The Upgrade
Essentially, this is going to reduce the fees for Layer 2 Rollups and will scale the blockchain by increasing space for “blobs” of data.
The upgrade was originally planned for Q4 this year, but was pushed back due to engineering complexities. Dencun would be the first major upgrade since the “Shapella” upgrade earlier this year, which enabled staked Ethereum withdrawals.
Read: Understanding EIP-4844: Ethereum’s Upgrade Focusing On Blobs
Ethereum Merge Context
Ethereum merged over from Proof of Work (PoW) to Proof of Stake (PoS), Proof of Work is a consensus mechanism that Bitcoin uses and essentially makes the network a little bit more secure but sacrificing scalability.
But essentially, it was kind of pushed on to us. The reason why Ethereum developers wanted to merge over to the Proof of Stake consensus mechanism was to lower these fees. Another reason would be that nobody in traditional finance (TradFi) is going to use Ethereum if the fees are high, and we have seen a lot of people from TradFi that absolutely love Ethereum (i.e. JPMorgan and those who have applied for an Ethereum Spot ETF).
Read: JPMorgan Bullish on Ethereum’s Prospects, Expects Bitcoin Underperformance Come 2024
Why Should You Care
When we are talking about developers, especially on Ethereum, they take their time and there is no need to get mad or upset if the planned date does not work out or gets delayed.
But anyways, this is essentially supposed to help lower the gas fees so that we can actually transact on the Ethereum blockchain. This is going to be important because gas fees are still really high on Ethereum — this is also actually good for the entrepreneur market in crypto because we have all of these Layer Ones that are competing such as Solana (SOL), Cardano (ADA), and many more, competing to be the best, fastest, being the most affordable, and the one that gives the best user experience; this is what we want to see.
Read: EIP 4844: Ethereum Proto-Danksharding and the Road to the Merge
Final Thoughts
We do not know who is going to be the top when it comes to the Layer Ones, but it is good to see a lot of these projects continue to scale and make things more cheaper and will give users a better experience.