Ethereum is the second largest cryptocurrency by market cap, behind Bitcoin. Its revolutionary technology as a Layer 1 blockchain has enabled many projects and innovation to exist and nurture on its network. For Filipinos, cheaper networks such as Polygon, Arbitrum, or Solana are much more favored due to their popularity and cost efficiency. However, Ethereum’s Dencun Upgrade hopes to make user experience more suitable and friendly for everyone.

What is the Dencun Upgrade?

The Dencun Upgrade aims to reduce the bottleneck issue of Ethereum by improving its scalability and efficiency to support a larger volume of transactions.

Think of Ethereum as one big stock exchange. With a large volume of transactions happening in one area, bottleneck and congestion is bound to happen. In order to compensate for the bottleneck, more resources are needed to execute a transaction which are the cause of high gas fees. There are multiple nodes across the world working to scale Ethereum’s processing speed, every node will have to synchronize transaction history which still causes massive backlog problems for Ethereum.

Ethereum Improvement Proposal (EIP) 4844 aims to make bottleneck issues with nodes much more efficient by creating “blobs” through Proto-danksharding. Proto-danksharding is a new term that was coined by the Ethereum Foundation that manages large chunks of data separately into “blobs” in an individual node that will expire in 30 days. Blobs will act as a secondary network on an Ethereum node without having to sync with the rest of the nodes in consensus. In simpler terms, if the entire Ethereum Network is one big stock exchange, blobs now act as a secondary stock exchange to help with the network’s congestion.

How does this help Filipinos?

The Dencun Upgrade not only solves bottleneck issues on Ethereum but also makes Layer 2s that operate on Ethereum such as Optimism and Arbitrum cheaper to use. This would break barriers to adoption as gas fees would be friendlier. Typical gas fees on Ethereum range between $15 up to as high as $100 worth of Ethereum for a simple swap, which is an obnoxious amount for the Filipino masses.

Layer 2s have been the favored network for simple transactions due to their already cheap gas fees to navigate blockchain and cryptocurrency. However, Filipinos are underexposed to NFTs and tokens traded under Ethereum due to the high gas prices. The Dencun Upgrade will lead to more exposure to future airdrops, tokens, and staking for projects that use the Ethereum network.

The Dencun Upgrade does not only address Ethereum’s scalability issues but also solves the socioeconomic problem that Filipinos face in cryptocurrency by easing the tough barriers of Ethereum’s high gas prices through even cheaper Layer 2 gas fees. This would lead to heavy cryptocurrency adoption as the Filipino masses wouldn’t have to worry about bottleneck issues from large transaction volumes and high gas prices.