Dencun: A Big Step Towards Mass Adoption

The CEO of layer-2 network Metis, Tom Ngo, believes that Ethereum’s Dencun upgrade is a significant move towards mass blockchain adoption and could also benefit traditional financial companies in the crypto space. Ngo explained that this upgrade allows companies to have more predictable transactions on their balance sheets, which is crucial for both blockchain and traditional finance. One of the key benefits of the upgrade is the reduction of gas fees, which is a major obstacle for mainstream user adoption. The Dencun upgrade aims to lower transaction fees on layer-2 (L2) blockchain networks and improve Ethereum’s scalability.

Since the Dencun upgrade went live on the Ethereum mainnet on March 13, several L2 protocols have seen a significant decrease in transaction fees. Median fees on Starknet, for example, dropped as much as 99% from $6 to just $0.04 after the upgrade. It’s important to note that the upgrade has not addressed the issue of high gas fees on the Ethereum mainnet itself.

Despite this, Ngo believes that L2s will continue to attract more users and capital, as they provide more secured ways to transact and are backed by trusted names in the industry. He also pointed out that L2s are crucial for building and scaling Ethereum, and their popularity and usage are expected to grow year over year. According to L2beat data, the total value locked in L2 solutions has already reached $39.48 billion, a significant increase from $10.3 billion just a year ago.

When it comes to the challenges of mainstream decentralized finance (DeFi) adoption, Ngo highlighted two key concerns: user experience and interoperability. Improving the user experience and making DeFi platforms more user-friendly will be crucial for attracting mainstream users. Ensuring interoperability between different blockchain networks and protocols will enable seamless communication and interaction, further promoting the adoption of DeFi.

Ethereum’s Dencun upgrade is a major step towards mass blockchain adoption, benefiting both traditional financial companies and the crypto space. The reduction in transaction fees on L2 blockchain networks improves scalability and lowers barriers to entry for mainstream users. L2s are expected to attract more users and capital, playing a crucial role in building and scaling Ethereum. Overcoming challenges such as user experience and interoperability will be essential for the widespread adoption of decentralized finance.