Ethereum developers are getting closer to launching Dencun, but some experts are not confident that the upgrade will deliver on its promises.
Days before Dencun was deployed to the Ethereum mainnet, two industry veterans offered differing opinions on the impact of this highly anticipated upgrade amid the soaring Ether (ETH) price.
The hype and euphoria in the cryptocurrency market pushed ETH to a two-year high, with the cryptocurrency surpassing $4,000 for the first time since late 2021, the peak of the previous bull cycle.
Core DAO, Wormhole Expert on Ethereum Upgrades
Ethereum developers said Dencun will implement expanded data availability for layer 2 solutions like Arbitrum and Optimism, improving transaction capacity with lower gas fees.
Rich Rines, an early core DAO contributor, said in a statement received by crypto.news that focusing on Ethereum L2 could lead to unforeseen issues related to liquidity and on-chain fragmentation.
This allows for higher TPS across the network, but questions still remain as to whether this is a long-term solution. Over-reliance on Layer 2 can result in fragmented ecosystems and liquidity as activity moves away from the base layer. Layer 2 may also include more trust assumptions and may have a suboptimal impact on the base layer as transactions and fees are increasingly removed from the base chain.
Rich Rines, early core DAO contributor
Rines noted that observers should closely monitor Dencun’s progress after deployment, expected by March 13, barring any unforeseen delays. Core DAO contributors also said it may raise questions about whether the upgrade goal was the right one in the first place.
On the other hand, Robin Burkey, co-founder and CCO of the Wormhole Foundation, is bullish on Dencun and expects this upgrade to significantly increase cross-chain asset transfers.
The Dencun upgrade is definitely a positive development in the cryptocurrency space. This upgrade really improves Ethereum’s scalability and security, which bodes well for DeFi and overall interoperability. This allows for cheaper and easier asset movement and cheaper transactions on Ethereum.
Robin Burkey, co-founder and chief creative officer of the Wormhole Foundation.
Burkey said the Dencun upgrade will strengthen defi usage, accessibility and dynamism, as lower fees should encourage more on-chain participation in the cryptocurrency’s largest decentralized ecosystem.