According to the investment and asset management company, Hashdex, the update that the Ethereum network experienced yesterday gives more reasons to invest in ether (ETH).
Dencun, the name of the protocol update, came with the promise of reducing the commissions paid for making transactions on Ethereum and its second layers.
This news is especially relevant considering the notoriously high fees that have characterized the Ethereum main chain , especially during times of network congestion.
The update is based on two key concepts: blobs and temporary data storage.
On the one hand, the ability to generate blobs a mechanism for organizing data in the blocks that optimizes the use of space in each of them. Likewise, the ability to save off-chain data (outside Ethereum's accounting) that is always available to the nodes contributes to this optimization.
For Hashdex in its most recent report, the importance of a new feature called Proto-Danksharding, intended to improve Ethereum is notable .
The activation of the Dencun update marks an “important milestone in the latest evolution of Ethereum,” as noted by Hashdex. Although the benefits of this upgrade may not be immediate, this improvement is essential to establishing a technological framework that allows Ethereum to attract millions of new users and applications.
Despite this, the price of ETH has not yet seen significant movements related to Dencun. From the point of view of market analyst Mike Fay, digital assets in 2024 will continue to be driven by “hype and, in some cases, scams.” However, Fay believes that there are valuable assets in this space and that proper capital allocation in these assets can generate great returns.
In this sense, ETH, the Ethereum cryptocurrency, a network created by Vitalik Buterin, stands out as one of the best long-term bets , says Fay.
Despite the risks and volatility inherent in the world of cryptocurrencies, Ethereum remains the largest decentralized financial ecosystem in the digital asset space , according to analyst opinion.
However, the biggest risk remains regulatory uncertainty, especially when it comes to ETH classification. The United States Securities and Exchange Commission (SEC) continues to value any cryptocurrency other than bitcoin as a security .
In addition to this, there is still a long way to go “from cheap transactions to mass adoption of traditional finance on the network.” In this scenario, ETH continues to be an attractive option for investors looking for long-term opportunities in the cryptocurrency market.
