Ethereum’s Dencun upgrade, which activated EIP‑4844 (proto‑danksharding) on March 13, 2024, was a game-changer. By slashing Layer‑2 transaction costs by up to 90%, it significantly altered Ethereum’s scalability dynamics. But what does this mean for Ethereum price prediction, and how will it shape ETH’s trajectory?
1. Understanding Dencun and Proto‑Danksharding
Dencun (Deneb + Cancun) is a core upgrade in Ethereum’s “Surge” roadmap phase, introducing blob transactions, large temporary data blocks that L2 rollups can use to store data on L1 (Ethereum mainnet). These blobs are stored for around 18 days, then pruned, dramatically reducing data storage costs.
Proto‑danksharding primarily benefits Layer‑2 networks. For protocols like Arbitrum, Optimism, Starknet, and Base, L2 transaction fees dropped over 90%, often to just $0.01 or lower per transaction. This makes Ethereum L2 transactions nearly as cheap as some competing blockchains (e.g., Solana), without compromising security.
2. The L2 Boom and Ecosystem Expansion
Widespread L2 Adoption
Since Dencun, active wallet counts on L2 networks surged. Weekly active users across L2s recently hit 4.6 million, up significantly from pre-upgrade levels. This user boom drives more volume, new dApps, and deeper ecosystem activity.
DeFi and Onchain Volume Revival
Post-upgrade, L2 DeFi activities like trading, lending, and staking have entered a renaissance. Lower costs encourage more frequent transactions, smoothed yield farming, and improved capital efficiency. Some L2s report daily transaction volumes doubling compared to pre-Dencun.
ETH Utility and Fee Dynamics
Although L1 fees haven’t dropped significantly, the bulk of ETH utility is now funneled through L2 activity. This sustained usage supports ETH burns and validator revenue via transaction tips, creating positive pressure on ETH’s value that is vital for Ethereum price prediction.
3. Challenges in the Post‑Dencun Landscape
Despite enthusiasm around Dencun, several challenges could temper its impact:
Blob Congestion & Fee Volatility
Blob capacity is capped (3 blobs per block post-Dencun; increased to 6-9 after May 2025’s Pectra upgrade). This can cause congestion during peak activity, driving blob fees higher when demand exceeds supply.
Reduced L1 Revenue for Ethereum
Lower L2 fees mean declining revenue for Ethereum’s protocol revenue model. Data shows L1 earnings have plunged by over 99%, from $544 million in March 2024 to under $2 million in September 2024.Though this boosts adoption, it raises concerns about long‑term protocol funding.
Dependency on L2 Integration
Benefits of Dencun depend heavily on swift L2 adoption. While rollups like Optimism have integrated support, others lag behind, leading to fragmented gas savings and uneven delivery of benefits.
4. ETH Price Outlook Post‑Upgrade
The Dencun upgrade laid the foundation for potential mid- to long-term upside, though expectations must account for nuances.
Bullish Catalysts
- Expert analysts call proto-danksharding a “bullish catalyst,” projecting ETH rally potential to $6,400+ by late 2024.
- Reduced transaction friction fosters increased adoption, pushing ecosystem activity and ETH utility higher.
- Layer‑2 use cases (payments, gaming, micro-transfers) become economical, scaling ETH beyond speculative finance.
Risk Factors
- Slowing upgradability: subsequent upgrades like full danksharding or sharding timelines could alter fee dynamics.
- Market volatility: macroeconomic headwinds (e.g., Fed decisions) could suppress yields and on-chain momentum despite technical improvements.
- Caps on blob data: in-demand blob usage could maintain fee premiums on rollups, limiting economic benefit.
Median Responses
- Finder analysts expect around $5,824 ETH by the end of 2025, assuming continuous tech and adoption growth.
- More cautious forecasts estimate $6,000–$15,000 in stable markets, while bearish outlooks warn of slower price action tied to poor macro indicators.
All told, Ethereum price prediction models now weigh scalability-driven adoption more heavily, increasing ETH’s odds of sustained upward movement.
Conclusion
The Dencun upgrade and its proof-of-concept proto-danksharding are igniting Ethereum’s next scaling phase, reimagining L2 economics, reducing transaction costs by 90%, and unlocking vast potential for mainstream use cases.
Yet it’s not without hurdles: revenue decline, blob congestion, and variable L2 uptake could temper enthusiasm. For Bybit users and ETH investors, short-to-medium-term upside hinges on successfully capturing L2-driven activity into ETH yields and utility.
As Ethereum continues its layered journey into “The Surge,” structurally integrating L2 growth with protocol evolution, Ethereum price prediction grows more robust and more informed. Smart investors will see this technical milestone as both a present utility boost and a forward-looking signal of long-term maturity.
