Ethereum Dencun - The planned upgrade for March 2024!

The Ethereum Foundation recently announced the deployment date of the Dencun upgrade on the mainnet. Scheduled for March 13, 2024, this long-awaited hard fork will bring significant structural changes to the Ethereum network.

Ethereum, Technical Improvements Brought by Dencun 

Technically, Dencun introduces several notable new features to the Ethereum blockchain:

• Transition to a proof of stake consensus to validate blocks, replacing energy-intensive mining with validators. This is a fundamental change in the protocol, ending the use of intensive computing power to secure the network in favor of a system based on holding ETH.
• Transaction fees significantly reduced, divided by 100 thanks to Dencun. The Ethereum network becomes much more affordable for end users and improves its competitiveness against competing blockchains.
• Improved scalability achieved through larger blocks and solutions like sharding. The goal is to support 100,000 transactions per second compared to only 15 currently. This increased capacity is crucial for Ethereum to meet growing demand.
• Enhanced security thanks to new EVMs and “proto-danksharding.” These technical changes will make smart contracts and transactions on Ethereum more robust against exploits.

These technical improvements prepare Ethereum to welcome many more users and decentralized applications. They significantly modernize the infrastructure to make it more efficient, secure, and scalable.

The Economic Impact of the Hard Fork

Beyond its technical implications, Dencun will also have significant economic repercussions on Ethereum:

• End of new ETH issuance through mining, replaced by only 900 ETH created each day. This drastic reduction in the network’s native inflation strengthens the scarcity of Ethereum (ETH) and favors an increase in its price by eliminating mining sales.
• Destruction of transaction fees, made possible by the EIP-1559 mechanism. This mechanically reduces the total number of ETH in circulation when network activity is high. A positive deflationary impact.
• Announced end of the triple halving of issuance with each major fork. Dencun will be the last fork to divide the issuance by three. In the long term, ETH becomes increasingly scarce.
• Staking rewards encouraging Ethereum holders to participate in securing the network, with an estimated yield between 5 and 15%. A much less inflationary model than mining.

With its Dencun upgrade, Ethereum enters a new decisive technical and economic era on March 13, 2024. These fundamental changes position the blockchain as an ideal infrastructure for Web3 and decentralized finance, and the anticipated positive impact on the value of ETH also generates considerable interest from investors.