Ethereum Dencun Upgrade: Mixed Reactions from Industry Veterans

The highly anticipated Dencun upgrade for Ethereum has officially launched on March 13. This upgrade aims to reduce gas fees on layer-2 solutions through proto-dank sharding. Speculators have mixed opinions on its impact on ETH’s price in the short term. Ruslan Lienkha, chief of markets at YouHodler, believes that while there may be an increase in blockchain activity, the upgrade may not significantly impact the price. Lienkha expects ETH’s price to grow in the long term as the upgrade makes it more valuable in the competitive landscape of layer 1 blockchain projects.

Mara Schmiedt, CEO of Alluvial, is optimistic about the Dencun upgrade’s implications, even in the short term. Schmiedt sees it as a scalability-focused upgrade that addresses Ethereum’s scalability issues, which have hindered mainstream adoption and restricted the network’s capacity to accommodate the growing number of users and transactions. She believes that the upgrade is highly anticipated, especially considering Bitcoin’s recent institutional surge and Ethereum’s DeFi ecosystem approaching the $100 billion mark in total value locked.

For Onno Sterk, COO of OSL, the Dencun upgrade is significant as it allows Ethereum to address critical issues that have impeded its development for years. The upgrade’s focus on proto-danksharding aims to drastically reduce transaction fees and increase the network’s processing speed. This development is fundamental as it enables Ethereum to serve as a database for other blockchains, facilitating a more efficient and interconnected digital asset ecosystem.

Over the past year, Ether has delivered a 141% return, driven by optimism surrounding the Dencun upgrade, speculation on the approval of spot Ether ETFs, and the broader crypto market recovery. It has somewhat underperformed compared to Bitcoin’s 198% return during the same period. While many are hopeful for a favorable decision on Ether ETFs by the U.S. Securities and Exchange Commission (SEC) in May, not everyone shares the sentiment. Lienkha believes that the SEC may use any excuse to postpone the decision, although he still believes the probability of a positive outcome is high.

Eric Balchunas, senior ETF analyst at Bloomberg, has also expressed caution regarding the odds of an Ethereum ETF approval in May. Alluvial’s Mara Schmiedt highlights that for Ethereum to achieve meaningful adoption, institutional adoption, widespread accessibility, and clear regulatory frameworks are essential. She encourages active participation from the community, including developers, users, and investors, in shaping the future of Ethereum.