TronWeekly

Crypto World News

You are here: Home / Archives for Dencun Upgrade

Dencun Upgrade

Ethereum’s Evolution In Q1 2024: 9% Rise in Staking & Open Interest Surges by 50%

by

According to the Glassnode weekly insight report, in the first quarter of 2024, there were a number of key developments that have been reshaping Ethereum. These changes have influenced Ethereum’s technical capabilities as well as its market dynamics and investment activities.

One such development during this period was implementing the Dencun upgrade aimed at enhancing scalability on the Ethereum network and reducing transaction costs. This is significant for Ethereum as it continues to address scalability challenges and increase its handling capacity in transactions. The successful implementation of the Dencun upgrade has been received with excitement by the Ethereum community because it opens up opportunities for a stronger and easily scalable network

image 23
Ethereum's Evolution In Q1 2024: 9% Rise in Staking & Open Interest Surges by 50% 6

Ethereum experienced a tremendous price increase, reaching $4,000 per token following the Dencun upgrade. This price level was last seen two years ago and is indicative of investors’ increasing confidence and interest in Ethereum. The rise in price supports Ethereum as one of the leading cryptocurrencies and also shows its potential for further growth.

Rise of Ethereum Staking: Strengthening Security and Stability

Moreover, staking activity on Ethereum increased by 9% over the course of Q1 2024. Apparently, Staking is vital to the Ethereum Proof-of-Stake (PoS) design where participants lock their ETH tokens to protect the network while gaining rewards. There has been a remarkable increase in staking activities, which reflects more participation and involvement within the Ethereum community, further strengthening the network’s security and stability.

image 19
Ethereum's Evolution In Q1 2024: 9% Rise in Staking & Open Interest Surges by 50% 7

The incre­ase in Ethereum staking is due­ to several factors. Concepts such as Maximal Extractable­ Value (MEV), Liquid Staking, Restaking, and Liquid Restaking have­ played a role. These­ concepts offer exciting re­wards and opportunities for individuals to engage in staking activitie­s. Such influences have drive­n growth within the Ethereum e­cosystem.

image 22
Ethereum's Evolution In Q1 2024: 9% Rise in Staking & Open Interest Surges by 50% 8

Ethereum Open Interest Surges by 50%

Moreover, during the first quarter of 2024, the Ethereum derivatives market experienced remarkable growth. Ethereum options open interest soared by 50% reaching new highs, indicating more traders and institutional investors’ participation. This growth is indicative of increased interest in Ethereum’s financial products as well as its developing derivatives market.

image 20
Ethereum's Evolution In Q1 2024: 9% Rise in Staking & Open Interest Surges by 50% 9

The rise in open interest is associated with several factors, including the correlation between Bitcoin’s Market trends and Ethereum. Just as excitement over Bitcoin ETFs engulfed Bitcoin’s market, so did the Ethereum derivatives market respond accordingly. In addition to this, the anticipation for Bitcoin ETFs led to increased activities within its markets; hence, spill-over effects on Ethereum towards equity drive more involvement within the derivative market.

image 21
Ethereum's Evolution In Q1 2024: 9% Rise in Staking & Open Interest Surges by 50% 10

Related Reading | Shiba Inu’s 5% Surge Following Nexo Partnership: Sparks Investor Concerns 

Ethereum Dencun Upgrade: A Boost or Bubble?

by

The Ethereum network recently underwent a major Dencun upgrade. While this promises exciting developments, it also brings potential risks that merit a closer look. According to data from CryptoQuant, one of Dencun’s big impacts is reducing Ethereum’s total token supply. We’re seeing this driven by the incredible amount of network activity and transaction fees getting burned.

The supply has actually resumed declining after holding steady for a while, recently hitting a new low of just over 120 million ETH in circulation – the lowest supply since way back in August 2022. The average daily burn rate is now a whopping 5,000 ETH, marking the fastest pace of supply contraction since last May.

image 56

On the other hand, participation is ramping up like never before. Staking numbers have soared to over 31 million ETH staked, accounting for over a quarter of the total supply at 26%. That’s a ton of coincides, voting with their ETH and showing faith in Ethereum’s future following Dencun.

image 58

Speaking of participation, the network itself is absolutely on fire right now, with all-time highs for daily transactions and value transferred. This frenzy of activity speaks volumes about Ethereum’s growing adoption and use cases. It’s also the engine burning all those fees and constricting the token supply.

image 57

Ethereum Price Movement Post-Dencun

Even with all these positive fundamentals, there are some concerning valuation signals flashing. Metrics like the sky-high MVRV ratio point to ETH potentially being overvalued versus its realized value at the moment. So, while the upgrade is bullish, some cautious optimism may be warranted before getting carried away.

image 59

Interestingly, Ethereum’s price actually dipped by around 7% immediately after Dencun, sliding from over $4,000 to under $3,700 per ETH. As of today, March 16th, it’s trading at roughly $3,725, with 24-hour volumes down a chunky 35% from recent peaks.

ETH 7D graph coinmarketcap 3
CoinMaretcap

According to Changelly, technical analysis is giving mixed signals. Fear and greed indices are leaning bullish overall, but some near-term projections suggest ETH could potentially dip another 1.8% by tomorrow before bouncing back.

image 60

All in all, while Dencun solidifies Ethereum’s strong fundamentals for the long run, the market’s reaction so far has been pretty lukewarm. Only time will tell if this lights a fire under the next major bull run or if traders want to see more proof before piling in again.

Related Reading | Solana (SOL) Strong Performance Sets Stage for New ATH in March; Analyst Eyes $305

Ethereum Plummets 7% As Dencun Upgrade Activates: Analysis & Outlook

by

The highly anticipated launch of the Dencun upgrade for Ethereum finally occurred on March 13. This led to a drop in price by 7% from $4,082 to $3,656 as per CoinMarketCap data. However, during these periods of time, Ethereum was not operating under the same network conditions when it had croosed above $4,000 in late 2021.

ETH 1D graph coinmarketcap 2
CoinMarketcap

In particular, network congestion per transaction has been reduced to less than one-sixth of what it used to be. This reduced strain is due in part to better fee dynamics that came with the Ethereum 2.0 transition, causing average gas fees to stand at a relatively low $9.35. In history, Ether’s increased adoption over longer periods and thriving use cases have always been maintained by keeping lower charges and relieving network blockages.

The Ethereum Foundation’s 183rd All Core Devs Execution Layer (ACDE) meeting provided an encouraging post-mortem on the Dencun rollout. “The fork went extremely smoothly. No major issues were observed,” the core devs stated, despite node participation rates temporarily dropping from 99% to 95%, likely due to some node operators failing to perform the necessary upgrades promptly.

Dencun represented “the most complex fork shipped since the Merge” in terms of making sweeping systemic changes. It also matched the Byzantium fork by including the highest total number of approved Ethereum Improvement Proposals (EIPs) enacted in a single upgrade event.

Ethereum’s Latest Upgrade Hits its Stride

Tim Beiko, a key figure in the Ethereum developer community, commented on Dencun’s effect on X (Twitter). He noted that even as anticipated, “blob” transaction data handling did not result in delayed block propagation times—although there was a slight rise from 13-14 chain reorganizations/day pre-fork to 17-18 post-launch.

However, these re-orgs did not exhibit abnormal depth beyond the common single-block variety. Regarding the blob transactions’ fee market dynamics, Beiko observed that activity has yet to outpace the base fee levels, so the true long-term fee equilibrium remains uncertain. Overall, he hailed Dencun as “an extremely smooth conclusion to 2+ years of implementation work” and extended a “huge congrats” to all teams whose efforts made it possible.

Looking ahead, the next steps involve marking the Dencun EIPs as “Final” and initiating the official retirement of the Goerli test network within the next month, although most validators had already stopped utilizing it organically.

Then the discussion turns to prioritize proposals for Pectra hard fork, such as BLS signature precompiles, adjusting CALLDATA gas costs for blob transactions, aliasing ORIGIN as SENDER for security purposes and many others. Nonetheless, no final decisions about Pectra’s scope and timeline have been agreed upon since developers want to spend weeks evaluating the highest-impact additions before they finalize plans.

Related Reading | Raoul Pal, Real Vision Group CEO, Makes Waves With Dogwifhat (WIF) Investment

Ethereum Caught Between Negative Risk Reversals & Dencun’s Fee-Cutting Promise

by

A recent report from QCP revealed that Ethereum’s risk reversals for short-term option expiries have flipped into negative territory. This rather opaque metric actually provides an intriguing window into market sentiment. The risk reversal compares the implied volatility priced into call options versus put options. A negative reading indicates traders see a greater risk of the spot price declining.

The report pointed to a couple of plausible drivers behind this move. First, it may signal an uptick in demand for put options as traders load up on downside protection amid fears of an unwind in crowded long positions. After all, the crypto frenzy has drawn in a tidal wave of speculative money betting on perpetual upside. 

Secondly, the report suggests altcoin traders could be utilizing Ethereum puts as a way to indirectly hedge their exposure to other cryptocurrencies. If one altcoin tanks, it often drags down the rest of the space in a sort of “risk-off” ripple effect.

Given the sheer amount of leverage deployed across crypto markets, this souring in risk sentiment understandably has analysts on edge about a potential corrective shakeout. However, bulls maintain any selloff would be quickly reversed as dip-buyers eagerly jump back in at lower levels.

Ethereum’s Dencun Upgrade

Amidst the positioning tug-of-war, the Ethereum blockchain took a major step forward with the launch of the long-awaited Dencun upgrade around 13:55 UTC today. This upgrade kicked off the implementation of EIP-4844, designed to slash transaction fees across layer-2 scaling solutions like rollups.

The impacts could be staggering – data from IntoTheBlock shows fees for a DEX swap on Arbitrum may fall from $2.02 to just $0.40. Optimism could see fees cut from $1.42 to $0.28. And most incredibly, Base fees could plunge from $0.58 all the way down to a penny per swap.

image 41

How? The key lies in EIP-4844 enabling efficient offloading of large chunks of data unrelated to transaction execution itself. By unbundling this extraneous information from the core workflow, Ethereum can process a higher volume of activity at a fraction of the cost.

For an ecosystem often criticized over cumbersome fees, this paradigm shift promises to open up new frontiers of use cases and widespread adoption as developers innovate with lower barriers to entry. It may also spark an influx of users put off by high gas fees.

While market positioning indicators hint at brewing volatility, Ethereum’s successful Dencun upgrade delivers a counterweight by hardcoding a fee reduction narrative. Where prices ultimately head will depend on which force exerts a greater gravitational pull over traders’ psyche.

Related Reading | Unlocking Cardano’s SuperNode: Decentralized Growth Engine

Ethereum Gears Up For Spotlight Amid SEC Decision Deadline

by

The cryptocurrency world is gradually shifting its attention from Bitcoin to Ethereum in anticipation of the SEC decision on spot Ethereum ETFs looming in May 2024. While Bitcoin has been trending lately after the United States approval of spot Bitcoin ETFs and the one-month prior halving that will happen in April, considerable developments for Ethereum are anticipated.

Ethereum’s Dencun upgrade, scheduled for March 13th, 2024, is a significant leap forward for the platform. The Solana Smart Contract Platforms Crypto Sector is fast chain-like, but this upgrade aims to improve its scalability so that it can meet these others more competitively.

Grayscale Research Highlights Ethereum’s Tailwinds

According to Grayscale Research, Ethereum has some factors in its favor that make it grow as a cryptocurrency, including the forthcoming upgrade, net deflationary supply, substantial network revenues, and an SEC ruling on spot ETFs. Moreover, the network is finding more use cases for its network security capabilities to enhance its market position.

By Bitcoin’s founding year of 2009, it set the pace in the crypto industry, whereas Ether developed in 2015, completely changed how public blockchain works with smart contracts. With the help of its broader ecosystem, the network supports decentralized apps (dApps) that have many uses, such as gaming, digital artwork, stablecoins, and tokenization of financial assets.

Even though Ethereum is leading in market capitalization and other metrics, it faces stiff competition within the crypto sector of the Smart contract platforms. In 2023, its performance was below par compared to the average sector rate and some competitors like Solana and AVAX. Nonetheless, through the Dencun upgrade soon to come, the network looks forward to dealing with its challenges related to scalability, thus improving its competitiveness.

The Ethereum 2.0 initiative, consisting of the Dencun upgrade, wants to make the network the most secure and scalable settlement layer for dApps. By taking up a modular approach, the netwrok plans to address issues of scale while ensuring network integrity.

image 102
Analysis of Tradeoffs for Modular versus Integrated Chains

With regard to this, so far, layer 2 solutions integration has shown some positive results by increasing Ethereum scalability and attracting more users into its ecosystem. Despite problems like costly transfer fees and competition from other chains, the network’s strategic improvements and expanding community offer considerable prospects.

Ethereum Rockets Toward New Heights: Experts Foresee Price Surging to $8,322

by

Ethereum (ETH) surged above $3,000, marking its most elevated level since practically two years ago, pointing toward a rather strong bullish signal for the asset. A flurry of bullish predictions comes from crypto analysts, and the upward trend of ETH looks ready to go as predictions in the short term go between $3,300 and $4,500 while looking beyond long-term visions all the way up to $11,000.

Tom Crown, CEO of Crown Analysis, predicts that ETH can hit $3,300 by the end of February. On the other hand, the target for ETH to be achieved before the end of the year has been set at $11,250 by Altcoin Gordon, who is a much-known figure on Twitter.

Another X (previously Twitter) user borovik.eth projects ETH to become a trillion-dollar asset in this market cycle, potentially reaching $8,322 per coin. Such forecasts confirm the generally prevailing optimism regarding the future of Ethereum’s growth.

Moreover, Bitcoin has dominated headlines recently due to institutional interest after the US Securities Exchange Commission (SEC) approved Bitcoin ETFs. Bitcoin’s performance has been overshadowed by that of Ethereum. However, despite breaking ETF inflows for BTC, ETH’s price rally has been particularly impressive.

Ethereum increased its price by 33.7% to reach $3,000 on February 20 for the first time since April 26, 2022. However, since this peak, the price has slipped a little, and at the time of writing, ETH now trades at $2,918.02, and its 24-hour trading volume is at $37.82 billion, while its market capitalization stands at $350.64 billion.

ETH 1D graph coinmarketcap 1
Source: CoinMarketcap

Driving Forces Behind Ethereum’s Soaring Value

Several factors are believed to have contributed to Ethereum’s recent surge. However, there are growing expectations that ETH will be approved for the spot ETF by the SEC, as has been the case with Bitcoin. Also, the imminent Dencun upgrade will only strengthen ETH’s market positioning further.

The Dencun upgrade will tackle Ethereum’s limitations in terms of transaction speed and cost because it has a sharding characteristic of breaking network data into smaller “shards” to increase computation throughput in general. According to Vitalik Buterin, the Dencun update is crucial to lead the way for further development of an upgrade to increase its scalability, reduce transaction costs, and lead the way for further development in the upgrades.

Furthermore, integrating Verkle trees on the Ethereum blockchain is expected to streamline Ethereum nodes’ storage needs while maintaining their block validation capabilities, enhancing efficiency and decentralization within the network.

Ultimately, the recent surge of the ETH price to over $3,000 indicates a very bullish trend, supported by positive market sentiment and a bunch of important technological developments within the Ethereum ecosystem. Therefore, with predictions from analysts of even higher price targets in the short and long term, Ethereum will continue to be one of the leading rising cryptocurrencies in this ever-evolving digital asset landscape.

Ethereum’s Dencun Hard Fork Locked For March 13

by

Ethereum’s highly anticipated Dencun hard fork is poised to kick off on March 13, following the finalization of the mainnet launch date during a crucial meeting held on February 8. The meticulous planning has pinpointed the exact moment of the upgrade at 13:55 UTC, coinciding with the blockchain’s attainment of slot 8626176 on March 13.

Communities within the Ethereum ecosystem have welcomed the news with enthusiasm. One member expressed admiration for the improved precision in hitting target dates, acknowledging the growth of core developers in meeting deadlines. This sentiment marks a notable shift from past skepticism, with users now taking release dates at face value.

No one is talking about how much better ethereum core developers got at hitting target dates. It’s honestly impressive. I used to discount every date by a few months, and now I take them at face value. Bravo, TimBeiko, and all the contributors!

Touted as the biggest overhaul since April 2023, the Dencun upgrade aims to streamline layer-2 transactions and enhance data availability on the Eth network. A key feature contributing to this enhancement is the introduction of ephemeral data blobs through the “proto-danksharding” mechanism. This innovation is designed to cut costs for transactions on auxiliary “layer-2” networks built on Ethereum by providing a dedicated space for data storage.

Protodanksharding, a pivotal aspect of the upgrade, has been in the works for almost two years, with developers successfully deploying a full data-blob-transaction prototype on February 21, 2022 [referred to as mini-danksharding]. These data blobs represent the initial step towards the broader goal of full Ethereum sharding, offering substantial capacity boosts to rollups like optimism PBC.

30M Staked Ethereum

The lead-up to the mainnet launch has seen a notable surge in staked Ethereum, with a staggering 30 million ETH, valued at nearly $73 million, already staked. This constitutes 25% of the circulating ETH supply, as per data sourced from theblock. Among Ethereum staking platforms, Lido Finance has emerged as a dominant force, with 9,471,392 ETH deposited, making up over 30% of total deposits.

Ethereum
Ethereum's Dencun Hard Fork Locked For March 13 22

The successful implementation of “The Merge,” which marked Ethereum’s transition from proof-of-work to proof-of-stake consensus, has facilitated increased participation in the network, resulting in an upswing in the ETH staking ratio. Concurrently, the number of ETH validators has surged from around 488 to over 928, showcasing the network’s resilience and adaptability post-merge, according to reports from Beaconcha.in.

Ethereum January 2024 Hard Fork Unveiled

by

In the latest community meeting, Tim Beiko, Ethereum’s lead developer, provided insights into the upcoming developments for the network. Beiko highlighted the anticipated Dencun hard fork of the Goerli testnet, revealing plans for its execution in January 2024, contingent on the smooth progression of preparations. Most teams involved are reportedly ready for the testnet fork trial, and there are plans to conduct a Goerli shadow network fork in the ensuing weeks.

Dencun, encompassing EIP-4844, marks the imminent network upgrade for Ethereum and is slated to be the final fork deployed on Goerli. Although there is no definitive mainnet deployment date, the core developers are currently eyeing January for the transition from the Goerli testnet to Dencun. Some community members speculate that the mainnet shift might occur in March or April.

Ethereum
Ethereum January 2024 Hard Fork Unveiled 24

About Devnet 12, recently launched, it was reported that nearly all clients are operational on the new platform. Multiple errors at various clients, including Reth and Lighthouse, were identified and subsequently rectified. Notably, the Prysm Ethereum Client team is still absent from Devnet 12, focusing on ongoing work related to Blob caching and verification. They aim to join Devnet 12 within the next one or two weeks.

The development team is well-prepared for the upcoming testnet fork, with plans for a substantial Goerli shadow fork in the coming weeks. There is unanimous agreement among developers that, should these processes unfold smoothly, the Goerli fork date will be finalized early in 2024, with aspirations to activate Dencun on the network in January. The last ACDE meeting of 2023 is scheduled for December 21 at 22:00 Beijing time.

Ethereum: Shadow Fork On The Horizon

Looking ahead, discussions during the meeting centered on the teams’ readiness to progress toward forking testnets. A significant Goerli shadow fork is on the horizon, and pending any unforeseen issues, forking Goerli itself is deemed to provide the most valuable testing insights.

Prior statements from Ethereum client developers confirmed that the highly anticipated Dencun upgrade would not undergo deployment through a network hard fork before the close of 2023. Meanwhile, Ethereum has experienced notable price momentum, reaching $2,370, its highest point since June 2022. This surge is attributed to growing institutional interest in the second-largest cryptocurrency by market cap, propelling Ether’s price by 25.7% over the past 30 days. The sustained trading above $2,300 suggests an increasing focus on Ether, with a year-to-date price increase of 96.5%.

Challenges Ahead: Ethereum’s Dencun Upgrade Faces Delays & Consensus Hurdles

by

Ethereum client developers have officially confirmed that the highly anticipated Dencun upgrade will not be deployed through a network hard fork before the conclusion of 2023, according to the latest report.

This announcement follows a series of consistent consensus issues that have emerged during testing on the ten developer networks (devnets) established over the past few months. Notably, none of these test networks have performed satisfactorily, prompting concerns about the feasibility of implementing the upgrade on time.

It was already apparent last month when the Holešky testnet was successfully launched, albeit behind schedule, that the upgrade might not be adequately tested by the end of the year. During a recent All Core Developers call, a more optimistic timeline for the upgrade was proposed, but the prevailing sentiment, as voiced by Prysm developer Potuz, was a resounding “there is no way we are forking mainnet in 2023.”

Divided Ethereum Clients

The division between Ethereum clients is evident, with one camp focusing on the execution layer and the other on the consensus layer. This division is reflected in the name of the Dencun upgrade, with consensus teams adopting city names (e.g., Cancun) while execution client developers choose star names (e.g., Deneb). The divergence in readiness is clear, as execution layer client teams report being well-prepared for upcoming testnets, with one developer, known as Lightclient, stating that “we are in a pretty good place.”

Devnet 10 was recently launched, with plans for execution clients to transition to a larger test on the Goerli testnet. However, Prysm’s Potuz expressed reservations about this plan, citing substantial and ongoing changes in the codebase and suggesting a delay until after Ethereum’s Devconnect developer conference in mid-November in Istanbul.

The Dencun upgrade relies on sophisticated cryptography to ensure the security of the Ethereum scaling improvement known as Proto-Danksharding. The KZG Ceremony, which involves multiple participants and secret computations, produces a “structured reference string” integral to the cryptographic scheme. After months of soliciting contributions, a total of 141,416 participants have contributed to this process, ensuring the security of the upgrade.

Carl Beekhuizen, who coordinated the ceremony for the Ethereum Foundation, invited participants to verify their contributions at ceremony.ethereum.org, where they can input their wallet address and receive a commemorative POAP NFT, marking a significant milestone in Ethereum’s ongoing development.

Related Reading |  FTX Debtors Shuffle $20M SOL and ETH Cold Wallets