The Dencun upgrade will further scale ETH and L2s by implementing EIP-4844 (Proto-Danksharding).
ETH/BTC Exchange Rate & On-Chain Data Comparison
Since October, BTC has surged 57.5%, while ETH gained 48.34% (as of December 15). Though the gap isn't dramatic, ETH has underperformed BTC for nearly a year.
BTC's strength stems from:
- Spot ETF expectations
- Approaching halving cycle
- Recent ecosystem innovations
While ETH lacks comparable short-term catalysts, its on-chain metrics show positive signals:
Key Observations:
Exchange Balances
- BTC: Steady decline since June, but spiked December 5–12 (coinciding with a price drop to $41K).
- ETH: More stable outflow trend since February 2023, with minor rebounds during/after price dips (e.g., December 11–13), suggesting profit-taking.
Social & Market Trends
- BTC dominates social media heat (Santiment data).
- MVRV ratios: BTC 41.17% vs. ETH 26.45% (both at 6-month highs).
- Institutional Interest
ETH holdings surged among institutions when prices stabilized at $1.8K–$1.9K (Cryptoquant). JP Morgan predicts ETH will outperform BTC in 2024, citing EIP-4844's scalability improvements versus "priced-in" BTC halving effects.
Ethereum Dencun Upgrade: Progress and Next Steps
Developers activated critical pre-upgrade steps in late 2023:
- Goerli shadow fork launching within 1–2 weeks to test Cancun/Deneb (Dencun) changes.
- Devnet 12 currently running full EL/CL client combos (including Prysm) with MEV-BOOST enabled.
Upgrade Components:
- Execution Layer (Cancun)
- Consensus Layer (Deneb)
Impact: EIP-4844 reduces L2 fees by introducing "blob-carrying transactions," enhancing Ethereum's scalability roadmap.
Vitalik’s Vision: Returning L2 Functionality to L1 via Wrapped zkEVM
Ethereum co-founder Vitalik Buterin proposes reintegrating select L2 features into mainnet using zero-knowledge proofs:
- Light clients evolve to validate L1 transactions like L2s, effectively embedding ZK-EVM.
- L2s retain roles in pre-confirmations, MEV strategies, and EVM extensions.
Industry Implications: Projects like Polygon and Scroll may shift focus as ZK tech becomes native to Ethereum.
2024 ETH Highlights to Watch
Dencun Upgrade (Q1 2024)
- EIP-4844 slashes L2 fees by ~10x.
L2 Ecosystem Growth
- TVL hits $16B (L2Beat).
- Non-EVM chains (eclipse, Flyent) expand use cases.
Real-World Asset Tokenization
- Traditional finance products migrate on-chain.
👉 Explore Ethereum's 2024 roadmap
FAQs
Q: Will ETH outperform BTC in 2024?
A: JP Morgan analysts believe ETH's technical upgrades (like EIP-4844) give it an edge over BTC post-halving.
Q: How does EIP-4844 reduce fees?
A: By introducing temporary data storage ("blobs"), it minimizes calldata costs for L2s.
Q: What’s wrapped zkEVM?
A: A method to integrate ZK-proof validation directly into Ethereum’s protocol, reducing reliance on external L2s.