%Ethereum (CRYPTO: $ETH) is undergoing an upgrade today (March 13) that will usher in the biggest code change to its %Blockchain in more than a year and help to lower fees.
Known as the %Dencun upgrade, the changes consist of two upgrades happening simultaneously on Ethereum’s consensus and execution layers.
Technically known as a “hard fork” upgrade, the changes are designed to usher in a new era of cheaper fees for the growing number of networks that operate on Ethereum layer-2 rollups.
The Dencun upgrade has been planned for years, but developers delayed it from an original target date of late 2023 due to some engineering issues, which have since been resolved.
Dencun is Ethereum’s biggest update since April 2023’s “Shapella” upgrade, which enabled withdrawals of staked Ether.
Dencun includes several code changes, but the biggest one comes with “proto-danksharding,” which introduces a new method for storing transaction data onto Ethereum.
Layer-2 networks like Arbitrum, Optimism and Polygon will benefit the most from Dencun. The networks help to scale Ethereum by bundling transactions from users and then passing them onto Ethereum where they’re settled in batches.
Analysts expect the average cost of sending Ethereum across layer-2 networks will decline significantly after the Dencun upgrade.
It currently costs anywhere from $0.24 U.S. to $2.85 U.S. to send Ethereum over layer-2 networks.
The price of Ethereum has risen 68% in 2024 to trade at just under $4,000 U.S. per token.
