The highly anticipated Dencun upgrade for Ethereum, which introduces proto-dank sharding to reduce gas fees on layer-2 solutions, has officially launched on March 13. This development has garnered both positive and skeptical reactions from speculators.
Ruslan Lienkha, the chief of markets at crypto wallet provider YouHodler, believes that the upgrade will not have a significant impact on ETH’s price in the short term. However, he expects an increase in blockchain activity and foresees long-term growth for ETH due to its enhanced value in the competitive landscape of new layer 1 blockchain projects.
On the other hand, Mara Schmiedt, the CEO of liquid staking development firm Alluvial, sees bullish implications for 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 the growing number of users and transactions.
For Onno Sterk, the chief operating officer of crypto exchange OSL, the Dencun upgrade is of significant importance as it addresses critical issues that have impeded the network’s development for years. Sterk states that high transaction fees and limited scalability have not only stifled innovation but also restricted the wider adoption of blockchain technology across various sectors.
Over the past year, ETH has seen a 141% return, driven by optimism surrounding the Dencun upgrade, speculation on the approval of spot Ether exchange-traded funds (ETFs), and the broader recovery of the crypto market. However, it has underperformed compared to Bitcoin’s 198% return during the same period. While there is anticipation for a favorable decision on Ether ETFs by the U.S. Securities and Exchange Commission in May, not everyone shares this sentiment.
Lienkha believes that the SEC will find reasons to postpone the decision and does not expect approvals this spring. Nevertheless, he considers the probability of a final positive decision to be quite high. Eric Balchunas, a senior ETF analyst at Bloomberg, also warns that the odds of an Ethereum ETF approval in May are not as optimistic as some may think.
In order for Ethereum to achieve meaningful adoption, Mara Schmiedt of Alluvial emphasizes the importance of institutional adoption, widespread accessibility, and clear regulatory frameworks. She encourages active participation from the Ethereum community, whether as developers, users, or investors, to contribute their expertise and perspectives in shaping its future.
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Dencun upgrade goes live on Ethereum mainnet