Ethereum, the world's second largest cryptocurrency by market capitalization, is set to undergo a major hard fork update known as 'Dencun' on March 13. This update is expected to have a significant impact on the Ethereum ecosystem and several altcoins.
The Dencun update is part of 'The Surge', a series of updates in Ethereum's roadmap focused on improving the scalability, security and usability of the network. The update brings various Ethereum Improvement Proposals (EIPs), including:
EIP-4844: Will increase scalability and introduce Proto-Danksharding, a new transaction type known as 'blob-carrying transactions'. This EIP is expected to reduce transaction costs for Layer 2 (L2) users and increase Ethereum's transaction throughput.
EIP-1153: Will reduce on-chain data storage costs.
EIP-4788: Will improve security and functionality.
EIP-5656: Will improve Ethereum Virtual Machine (EVM) performance.
EIP-6780: Will improve network security.
The Dencun update is expected to greatly reduce fees on Ethereum Layer-2s, delivering the largest reduction in Layer-2 gas fees ever seen. This will benefit the entire ETH/L2 ecosystem and make these chains much more commercially viable for both decentralized application (dApp) makers and users.
Cryptocurrency analyst Miles Deutscher identified several altcoins that could greatly benefit from the Dencun upgrade:
- MATIC: Preparing to be rebranded as POL, MATIC has fallen behind other L2s but has made a significant investment in the implementation of zk technology.
- Arbitrum: With great metrics and a reputation as the go-to chain for new dApp launches, Arbitrum leads other L2s in Total Value Locked (TVL) and transaction volume.
- Optimism: The second largest L2 by TVL, Optimism has shown strength in the transaction space and recently announced its fourth airdrop.
- COTI Network: COTI recently announced the V2 release, a privacy-centric ETH L2 that introduces 'Garbled Circuits', an important way to protect privacy.
- Mantle: One of the fastest growing L2s, Mantle has over $1.5 billion of ETH staked as mETH (Mantle Staked ETH), making mETH the third largest Liquid Staking Derivative (LSD) after Lido and RocketPool. doing.
- Metis: Metis is well positioned for growth with strong tailwinds of support, including the $400 million Metis Ecosystem Fund and the launch of a decentralized sequencer alpha mainnet in March.
*This is not investment advice.