The Dencun upgrade was successfully rolled out on the Ethereum mainnet, at 13:55 UTC, on March 13.

Dencun is expected to significantly reduce the transaction fees of layer-2 networks and enhance Ethereum’s overall scalability, as the most-anticipated hard fork since the Merge.

While the Dencun upgrade is a step in the right direction, it won’t improve all the shortcomings of layer-2 solutions, according to Arthur Breitman, the co-founder of the Tezos blockchain. He told Cointelegraph:

“The Dencun upgrade does the bare minimum to extend the data usable by rollups on Ethereum which should lower transaction costs in these L2 solutions. This is a step in the right direction, but ultimately, rollups built on top of Ethereum remain very throughput constrained and are forced to adopt extreme centralization measures.”

Dencun’s launch comes nearly a year after the Shanghai upgrade last April, which enabled network participants to unstake their Ether for the first time after the network transition to a proof-of-stake network following the Merge.

The Dencun hard fork incorporates nine different Ethereum Improvement Proposals (EIPs). The upgrade’s name combines the Cancun upgrade of Ethereum’s execution layer and the Deneb upgrade on the consensus layer. The first part, Cancun, focuses on improving how transactions are managed and processed on the execution layer, while the second part, Deneb, aims to improve the consensus layer, which refers to how network participants agree on the state of the blockchain.

The introduction of data blobs via EIP-4844, also known as proto-danksharding, is among the most notable features of the upgrade, according to James Wo, the CEO and founder of Digital Finance Group. He told Cointelegraph:

“[Proto-danksharding] aims to reduce layer-2 transaction fees by enhancing data availability, a crucial move toward establishing Ethereum as a scalable settlement layer.”

However, the promised fee reductions won’t affect Ethereum mainnet users, according to a March 6 report by Max Wadington, a research analyst at Fidelity Investments. He wrote:

“In the short term, users who wish to benefit from this fee change must sacrifice some decentralization and security by transacting on L2s instead of Ethereum. This will certainly spur more users to bridge assets elsewhere. However, we strongly believe that transacting on Ethereum for application-specific purposes will still be considered the best option (especially for high-value transactions) in the medium term as L2 platforms continue to mature.”

Gas fees on the Ethereum mainnet remain high, above 72 gwei. An average swap would cost users $86.15 in gas fees, while nonfungible token sales average $145.60 in gas, according to Etherscan data.

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