The Ethereum Network has completed its Dencun upgrade. The latest upgrade brings reduced transaction fees on Layer2 chains.
An L2 transaction that used to cost $1 can now be done for a cent, while a transaction that used to cost a few cents will now cost a fraction of a cent. Many chains rely on this link to the Ethereum Network, including Arbitrum, Polygon, and Coinbase Global. According to a press release by the Ethereum Foundation, the upgrade follows last year’s Shapella upgrade. It includes several changes, including the introduction of ephemeral data blobs with EIP-4844, also known as “protodanksharding.” These blobs help reduce L2 transaction fees.
If you are currently a holder of any Ethereum Ether (ETH), you don’t have to worry about anything, as the Dencun upgrade does not affect your current holdings. If you are a non-staking ETH node operator, you should update your node’s execution and consensus layer clients according to the respective client releases.
Also Read: Ethereum: Can ETH Hit $5,000 After Dencun Upgrade?
Furthermore, the Ethereum team explains that upgrades to the consensus layer use star names, and those to the execution layer follow Devcon city names. “Dencun” is the combination of Deneb, a first-magnitude star in the Cygnus constellation, and Cancun, the location for Devcon 3.
The reduced Layer2 transaction fees will likely push forward the development of new apps and chains via the network. The Ethereum Dencun upgrade also gave ETH a slight bump in trading, seeing the token’s price rise just under 2% this morning, and trading volume surge by 7%. Many investors expect the upgrade to cause a surge in ETH during the coming days.