Ethereum is now gearing up to hit a major upgrade that will change the way the entire network operates in several ways.
This upgrade, called the "Dencun" upgrade, has now been scheduled to hit the Ethereum mainnet on March 13, at 13:55 UTC according to the latest announcement by the ETH core developers.
And we would all like to know:
What exactly will Dencun upgrade, and what will happen to Ethereum's price before 13 March?
The Dencun upgrade
This is the first and biggest upgrade since the network switched from a Proof of Work to a Proof of Stake blockchain, in the September 2022 Beacon chain launch.
Dencun is set to introduce a new upgrade to the ETH network, allowing faster and much, much cheaper transactions in a process called Proto-danksharding.
The Ethereum network will now be able to use proto-danksharding to handle thousands of transactions per second.
For context, Ethereum's current TPS (transaction per second) speed is a measly 15 transactions per second.
This means that Ethereum is about to hit some steroids and start crunching a lot more numbers, every second.
Proto-danksharding optimizes the use of data on the ETH network, by creating specific containers for storing data blobs.
This allows Layer-2 solutions, like Optimism, ZK-Sync, and Polygon to access these blobs and use them to validate transactions off-chain.
Currently, layer-2 solutions waste gas fees and result in expensive transactions by storing data in the calldata field of transactions.
However, proto-danksharding addresses this issue by developing a new class of transactions known as proto-danksharding transactions, which store data blobs in a different area, known as the data availability layer.
In essence, Layer 2 solutions rely less and less on Ethereum itself, reducing their gas fees drastically, and increasing their scalability.
If you thought sending money through Polygon, Arbitrum, Avalanche or even Optimism was cheap before, then think again.
Analyst, Michaël van de Poppe commented recently on the Dencun upgrade in a recent tweet, saying that:
"People underestimate the significance of the Dencun upgrade on ETH.
If that's fully applied to the ecosystem, chances are significant that Ethereum becomes the secure settlement layer the ecosystem is looking for."
Moreover, on 7 February this week, the Dencun upgrade went live on Holesky, the final ETH testnet, driving the price of the cryptocurrency up, according to data from CoinMarketCap.
ETH is up by around 3.6% over the last day and is now fully above the $2,500 resistance.
In the charts, we have the cryptocurrency up above the $2,400 resistance line, and targeting the $2,717 high from 12 January.
Ethereum's price prospects seem strong from all perspectives, especially now that the cryptocurrency is about to become even more powerful among Defi protocols.
In terms of price, we could see the cryptocurrency go as high up as anywhere between $3,000 and $3,500 in the coming weeks.
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