Ethereum’s Dencun Upgrade: Scalability Boost and Price Dip
Over the past year, the Ethereum network has seen substantial improvements in both scalability and transaction costs thanks to the Dencun upgrade. This update, which went live on March 13, 2024, combined enhancements to the execution and consensus layers, incorporating key features from the Cancun and Deneb proposals. The primary goal, achieved through the introduction of nine Ethereum Improvement Proposals (EIPs), was to lower transaction fees and increase the efficiency of layer-2 solutions.
Market data shows a dramatic decrease in the average gas fee on the Ethereum network, dropping from 72 gwei in early 2024 to just 2.7 gwei by mid-March 2025. This significant reduction has greatly improved the user experience on Ethereum. Previously, a typical token swap would cost around $86 in gas fees, and an NFT sale approximately $145. Now, these costs have fallen to about $0.39 and $0.65, respectively. This change has made decentralized applications (dApps) more accessible to a wider audience.
Ether Price Contraction After the Dencun Upgrade
Despite these operational cost reductions, the price of Ether has been affected by broader market pressures. In March 2024, Ether was valued above $4,070. However, by March 13, 2025, the price had fallen to around $1,891, representing a significant decrease of approximately 53%, according to CoinGecko.
“Monday’s drop erased all the TVL gains in DeFi since the election of President Trump. Amid the frenzy of memecoins on alternative chains and the recent obstacles faced by Ethereum, the industry is now in search of a more stable and secure path for DeFi.”
Dominik Harz, co-founder of Build on Bitcoin, commenting to Cointelegraph.
Challenges on the Horizon: The Pectra Upgrade
Ethereum’s evolution continues with the upcoming Pectra update, which has faced some developmental challenges during its trial phase. After being deployed on the Sepolia testnet on March 5, 2025, the upgrade experienced issues, including intermittent error triggers and the mining of empty blocks. Although the development team has since stabilized the network and restored normal transaction processing, these setbacks have delayed the full launch on the mainnet.
Developers say that once Pectra is fully operational, it will significantly improve the network by doubling the data capacity available for layer-2 solutions, further reducing transaction costs and improving overall performance. However, as Dominik Harz pointed out, these improvements might not completely solve all of Ethereum’s underlying issues:
“While this update is definitely a step in the right direction, the reality is that Ethereum is rapidly losing its standing as the go-to chain for developers, and Pectra does not tackle all of its deeper issues.”
Dominik Harz.
Tyler Matthews, known as “Crypto Cowboy,” is the newest voice at cryptovista360.com. With a solid finance background and a passion for technology, he has navigated the crypto world for over a decade. His writing simplifies complex blockchain trends with dry American humor. When not analyzing markets, he rides motorcycles, seeks great coffee, and crafts clever puns. Join Crypto Cowboy for sharp, down-to-earth crypto insights.