There’s no doubt that Ethereum is the leading smart contract platform in the world right now.

It boasts a market cap of over $225 billion. That’s more than five times the size of its next closest competitor.

Ethereum is also the most widely used network based on total value locked (TVL), which measures the total value of digital assets in a platform.

Its 58% share is also nearly five times the size of its next closest competitor.

It has developer mindshare as well. Today it boasts nearly 2,000 full-time developers.

That’s three times more than the next closest project.

And it’s one of the most active blockchains, with over 400 million daily active users.

That’s why Ethereum upgrades draw a lot of attention. They’re important events for the ecosystem. And they can be major catalysts for certain tokens.

Take the Paris upgrade, for example. That was the code name for the Merge, which transitioned Ethereum from proof-of-work to proof-of-stake.

It had the benefits of making Ethereum more secure and significantly reducing its block rewards (meaning a lower supply).

Consequently, the ETH token rallied 150% from the launch of the Beacon Chain into the Paris upgrade.

Another example is the more recent Shapella upgrade.

The upgrade enabled stakers and validators to withdraw assets from the Beacon Chain for the first time since December 2020.

It had the benefits of reducing the risk of Ethereum staking, improving the liquidity of Ethereum, and paving the way for new, innovative products.

We saw ETH rise another 30% leading up to the upgrade.

I bring this up because there’s another major Ethereum upgrade on the horizon…

Getting Ready for the Surge

With the transition to proof-of-stake out of the way, Ethereum can now focus on the next stage of the road map, the Surge. And the Surge is all about scaling.

So what’s going to help Ethereum scale? Layer-2 networks.

You see, Ethereum is considered a Layer-1 network. Layer 1 is the fundamental base network of a blockchain platform.

Layer-2 networks live above the Layer-1 network. This technology helps the Ethereum network scale by greatly reducing network congestion on Layer 1.

Bottom line: Layer-2 scaling solutions make Ethereum more efficient by reducing transaction costs and increasing speeds.

Ethereum co-founder Vitalik Buterin has written extensively about a Layer-2 future for Ethereum. That will take Ethereum to 100,000 transactions per seconds (tps) and beyond.

Helping it get there is the next upgrade, codenamed Dencun.

The key Ethereum Improvement Proposal (EIP) in that upgrade is EIP-4844, also known as proto-danksharding.

The problem is that as Layer 2s produce an increasing amount of data, it becomes more expensive to post that data to Ethereum.

EIP-4844 creates a new transaction format for what it calls “blob-carrying transactions.”

We’re not going to get into the technical weeds here. What you need to know is that blobs can store more data, and that data doesn’t need to be permanently stored.

Users will see noticeable improvements after EIP-4844’s implementation, mainly in the form of faster transactions and lower fees.

The immediate benefits of EIP-4844 to users is that the capacity of rollups can be increased by 10 to 100 times, gas fees can be reduced by one-tenth to one-hundredth, and it can be done without sacrificing the security and decentralization of Ethereum.

While no official date has been set for Dencun, it’s already in the final planning stages. And developers have stated their aim is to go live in the second half of 2023.

Invest Now Ahead of the Next Upgrade

The time to invest in the next upgrade is now.

As we’ve showed you, Ethereum grew in value leading into the last two major upgrades. And we expect that to happen again.

With the Shapella upgrade done and out of the way, Ethereum, the most dominant smart contract platform in the world, is ready for the next stage of the road map.

And that’s the Surge, scaling Ethereum through Layer-2 solutions.

It’s already happening. Layer-2 solutions are growing in key metrics such as transaction activity, TVL, and active users.

But it’s going to get even better with the next upgrade, Dencun, which we expect around the end of the year.

With this upgrade the capacity of Layer-2 networks will be increased by 10 to 100 times. And the costs will be reduced to one-tenth to one-hundredth.

The simplest way to profit from the Surge is to buy some Ethereum (ETH). We believe it’ll eventually hit $5,000 per token. That’s a 167% gain from today’s price.

But as Ethereum grows, it’ll act as a slingshot from smaller tokens in its ecosystem.

That’s why Daily editor Teeka Tiwari recently held a special event called Big T’s FINAL Call. (You can click here to stream the replay.)

Here’s what I mean by that…

This will be the last Crypto Winter we’ll see of this magnitude.

Once the big players enter this space, the crypto market will trade more in line with the broad stock market – just like internet stocks did when that sector began to mature.

And those volatile moves that generate life-changing gains… They’ll be fewer and farther between.

So it’ll be exciting to see the impact of Dencun on Ethereum.

Regards,

Greg Wilson
Analyst, Palm Beach Daily