Upgrade of Ethereum Will Lower Costs for Layer 2 Networks

The upgrade of the Ethereum network will take place on the 13th of March and will help lower costs for the Layer 2 networks. Chains like Arbitrum, Polygon, and Coinbase Global attribute the connection to Ethereum. A transaction that would have cost $1 will now be 1C. Developers have named the upgrade Dencun. It is expected to be more effective than Merge, introduced in 2022.

As per an engineer at Coinbase, Roberto Bayardo, the new update will bring in a fresh mechanism for storing data. Presently, the maximum number of Layer 2 blockchains store data on Ethereum. In the case of Dencun, Layer 2 will have the option of storing data in a fresh kind of repository known as blobs, which will cost less due to the data being held for eighteen days only.

In the words of a retired professor at Princeton University, Ed Felton, it is indeed a good trade-off for Ethereum to offer. The change may heighten the usage of AI in games wherein ono-player characters will have the option of showing a classy attitude boosted by the AI module, which was impossible without a higher cost in the past. Overall, it will pave the way for a more advanced attitude about applications.

It is also possible for the upgrade to propel the release of more Layer 2 chains with lesser running costs. Before this, Layer 2 projects required many funds to introduce and operate, but it is no longer necessary. As per the co-founder of Attestant, Jim McDonald, a chain may be developed to issue tickets for sole events.

McDonald added that it would take a while for Layer 2 chains to utilize blobs. This is because Arbitrum’s decentralized governance mechanism requires the change to be voted on. In his opinion, as the demand for blobs rises, they will become active accordingly.

From the viewpoint of the co-founder of the optimism project, Karl Floersch, the fees will, in the end, be raised, but it will be a long time coming.

Scott Cook

Scott Cook got into crypto world since 2010. He has worked as a news writer for three years in some of the foremost publications. He recently joined our team as a crypto news writer. He regularly contributes latest happenings of crypto industry. In addition to that, he is very good at technical analysis.

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