How the Dencun Upgrade Could Lead to Millions of Layer 3s​

How the Dencun Upgrade Could Lead to Millions of Layer 3s​

March 19, 2024

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SUMMARY

The Dencun upgrade and focus on layer twos is revolutionizing the scalability of the Ethereum network, leading to increased transactions per second, lower fees, and the potential for billions of people to join the onchain economy.

• 00:00 🚀 The Dencun upgrade has increased transaction speed, reduced fees, and improved scalability for Layer Two solutions on Ethereum.

  • The Dencun upgrade has led to a significant increase in transactions per second and a reduction in fees, with average fees now in the one to three cent range.

  • Ethereum Improvement Proposal 4844, also known as the Dencun upgrade, aimed to solve a problem related to Uniswap.

  • Ethereum shifted its strategy to focus on scaling Layer Two solutions to make transactions cheaper and more modular.

  • Ethereum has implemented a new resource called blob space, which allows layer twos to post their data for faster and cheaper transactions, leading to potential scalability to thousands of transactions per second.

  • The upgrade to Dencun has led to reduced fees and increased stability for Layer Two Roll-Ups.

  • The Dencun upgrade has led to significant reductions in fees, increased transaction throughput, and induced demand for various types of transactions on the Base platform.

• 07:14 🚀 Layer 1 for settlement, Layer 2 for businesses and users, potential rise of Layer 3, Dencun upgrade could lead to millions of Layer 3s, Polka Dot 2.0 upgrade as a massive accelerator for the ecosystem.

  • Layer one will be for settlement, while layer twos will be used by businesses and for general user-focused contexts, with the goal of onboarding billions of people on chain.

  • The majority of people will use Layer Two for fast, cheap, and decentralized transactions, with the potential rise of Layer Three in the future.

  • Millions and billions of servers will become deeply connected to the onchain economy through the use of L3, enabling application developers to easily integrate assets and identity into their applications.

  • The Dencun upgrade could lead to millions of Layer 3s, with the anticipated Polka Dot 2.0 upgrade being a massive accelerator for the ecosystem.

  • Uniswap Labs builds tools for users to swap smarter and access DeFi liquidity through their web app, mobile wallet, and upcoming browser extension.

• 11:45 🚀 Ethereum's focus on layer two scaling and decentralization has attracted top talent, leading to significant developer growth and improved reliability, with potential for further improvement and increased interoperability.

  • Ethereum's focus on layer two scaling strategy has prioritized decentralization and attracted the best minds to help scale the platform, resulting in a successful strategy.

  • Ethereum's decentralized, modular approach has led to significant developer growth and improved reliability, with potential for further improvement.

  • Rollups are working towards becoming decentralized, with the goal of reaching stage one decentralized Ro this year and eventually achieving the decentralization of ethereum.

  • Progress is being made to improve interoperability between different layer 3s, making it seamless for users to transact across various chains.

  • The upgrade to Dencun could lead to increased interoperability and address challenges around decentralization and fragmentation in the ecosystem.

  • The upgrade to Dencun could lead to improved security and interoperability on the Ethereum network, with a focus on integrating different chains and proving out the value of interoperability at Layer Two.

• 17:49 🚀 The Dencun upgrade enables new use cases and innovation in decentralized exchanges, with features like transient storage and block header inclusion, while focusing on driving down fees and increasing throughput for Layer Two transactors.

  • The Dencun upgrade includes features like transient storage and block header inclusion, enabling new use cases and innovation in decentralized exchanges.

  • Layer 2 upgrades enable cheaper referencing of layer 1 data in transactions.

  • Participation in mint on Layer Two allows for composability between L1 data and L2 transactions, enabling interoperability and opening up the design space for developers building on Layer Two and layer one.

  • Continuing to focus on Ethereum's roadmap and scaling to bring the entire world onchain into a new global onchain economy that increases innovation, creativity, and freedom.

  • The focus is on driving down fees and increasing throughput and reducing execution costs for Layer Two transactors.

• 22:11 🔑 Smart wallets are being made default to bring more people on chain, with a focus on enabling developers to build Next Generation experiences and solving challenges to upgrade systems and make the world a better place.

  • Smart wallets are being made the default to enable more people to come on chain, with the goal of setting up users in less than 10 seconds and enabling developers to build Next Generation experiences.

  • The focus is on solving challenges and supporting developers to build applications that millions and then billions of people want to use.

  • The rise of the word "onchain" is seen as a new transformation in the crypto industry, drawing an analogy to the transformation that happened with the word "online" in the early 2000s.

  • Onchain is about upgrading systems and using technology to make everyone's life better by bringing the world on chain.

  • The industry needs to embrace the language of onchain to upgrade systems and make the world a better place.

  • The Weekly News recap discusses the tax benefits of buying and selling crypto in an individual retirement account with I trust Capital.

• 27:50 🚀 Ethereum's Dencun upgrade reduces transaction fees on layer 2 networks, Bitcoin ETFs shift focus to Ether ETFs, Vanc cuts fees to zero for its spot Bitcoin ETF, and legal complications arise in the crypto industry.

  • Ethereum's recent upgrade has led to a significant reduction in transaction fees on layer 2 networks.

  • The Dencun upgrade introduced Proto sharting functionality via EIP 4844, decreasing costs for storing transaction data on layer 2 networks and leading to significant reductions in transaction fees on various platforms.

  • Bitcoin ETFs investor attention turned toward Ether ETFs as the SEC has a May 23rd deadline to make a final decision on the first spot eth ETF applications, with analyst Eric Bhunes revising his estimate downward to a 35% chance of approval.

  • Vanc has cut fees to zero for its spot Bitcoin ETF, leading to a surge in investment, while grayscale Bitcoin trust is creating a lower cost alternative due to outflows.

  • The US District Court rejected motions to dismiss a lawsuit filed by the SEC against Genesis and Gemini for offering and selling unregistered security products, leading to legal complications in the crypto industry.

• 32:28 📉 CZ facing legal troubles for violating bank secrecy act, Roman Sterling OG found guilty for money laundering, UK judge declares Craig Wright not Bitcoin creator.

  • The former CEO of Binance, CZ, is facing legal troubles and has been ordered to surrender his passport and is awaiting his sentencing hearing for violating the bank secrecy act and failing to maintain an effective anti-money laundering program at Binance.

  • Roman Sterling OG, a Russian-Swedish national, has been found guilty in the US for his involvement in Bitcoin fog, facing a maximum of 50 years in prison for money laundering and operating an unlicensed money transmitting business.

  • UK judge declares Craig Wright is not Bitcoin creator Satoshi Nakamoto, as he was sued for alleged forgeries and attempts to claim authorship, with Judge James Miller stating Wright is not the author of the Bitcoin white paper or the person behind the pseudonym Satoshi Nakamoto.

• 35:58 📈 Bitcoin users dispute Wright's claims, Elon Musk considers accepting Dogecoin for Tesla, and $690,000 raised for dog meme on Las Vegas Spear, with updates on unchained crypto and coindesk podcast Network.

  • Bitcoin users dispute the veracity of Wright's claims, Elon Musk hinted at the possibility of buying a Tesla with Dogecoin, and nearly $690,000 was raised to put the dog with hat meme on the Las Vegas Spear.

  • Recap of unchained crypto.com and sign up for the free newsletter to stay updated on the latest in crypto, now part of the coindesk podcast Network for the latest in digital assets.

INSIGHTS

Ethereum's Scalability and Layer Two Strategy

• 📈 The average amount of transactions per second has increased by 5x since the upgrade, leading to lower fees and driving up the price.

• 📈 The Dencun upgrade could potentially lead to millions of layer 3s, revolutionizing the scalability of the Ethereum network.

• 📈 Ethereum's shift to focusing on scaling Layer Two instead of Layer One has sparked a new strategy and modular scaling approach within the community.

• 📈 The long-term strategy for Ethereum and layer twos involves increasing blob space to scale to thousands, tens of thousands, and even hundreds of thousands of transactions per second.

• 💰 Ethereum is moving towards being a business chain, with layer twos serving as the general purpose, user-focused context for onboarding billions of people on chain.

• 🏗️ Embracing a decentralized modular open strategy has allowed ethereum to attract large companies like Coinbase to dedicate significant engineering resources to scaling the platform.

• 💰 The upgrade led to a significant drop in median transaction fees on layer 2 networks, benefiting users with cheaper transaction costs.

Impact of Layer Three on Global Economy

• 🚀 The rise of layer three could revolutionize the way we interact with the global economy.

• 💰 The onchain economy is going to grow faster and faster, making assets like USDC and Ethereum, as well as identity, extremely valuable for application developers.

• 🔄 The vision of the super chain and interoperability could lead to the disappearance of current challenges in the next year.

• 🏗️ The job is not finished until the entire world is brought into the new global onchain economy.

• 💼 Making smart wallets the default could enable the next billion people to come on chain, but it's a huge step forward in terms of how quickly we're going to be able to get people on chain.

• 🌍 Onchain is about using technology and blockchains to build new experiences and bring the world on chain, ultimately making everyone's life a lot better.