Last Wednesday, on March 13th, Ethereum launched its biggest upgrade in the past 18 months, marking a significant milestone since the Ethereum Merge on September 15, 2022. Dubbed Dencun or Cancun-Deneb, this upgrade introduced the eagerly awaited Proto-Danksharding feature, aimed at dramatically enhancing the scalability of Ethereum’s Layer 2, also known as rollups, and slashing the costs associated with rollup transactions, while making them less volatile.

Proto-Danksharding brought to the table so-called ‘blobs’. These are sizable chunks of data that can be incorporated into Ethereum blocks but are kept distinct from the transaction data needed for smart contract execution. ‘Blobs’ are crafted to temporarily store hefty data elements from rollup transactions, such as batches of transactions or zero-knowledge proofs, and are deleted from the blockchain after 18 days, once they are no longer required for transaction validity verification.

For months leading up to the implementation of Dencun, the potential of Proto-Danksharding has made us incredibly optimistic about Ethereum and various Layer 2 tokens, as highlighted in Crypto Moves #16. We encourage you to check out this note for deeper insights into rollups and our logic behind including various Layer 2 tokens in our crypto portfolio.

It has been just over a week since the Dencun upgrade went live on Ethereum, and we are already confident in saying that Proto-Danksharding fulfills all its promises. We believe Ethereum, powered by Proto-Danksharding, is set to make any other Layer 1 obsolete, with the exception of Solana. This upgrade is poised to unlock a whole new realm of possibilities for the Ethereum ecosystem and pioneer new use-cases onchain. Let us dive into the data from the first week to back up this statement.