News article to verify C31-2379

Ethereum’s Dencun upgrade, likely to take place in first-quarter 2024, is the next step in the blockchain’s journey to becoming a scalable settlement layer, Goldman Sachs (GS) said in a note Thursday. Updated.

“Dencun’s primary impact will be to increase its data availability for layer-2 rollups via proto-danksharding, resulting in a reduction of rollup transaction costs which will be passed on to end users,” the bank said:

A layer 1 network is the base layer, or the underlying infrastructure of a blockchain. Layer 2 refers to a set of off-chain systems or separate blockchains built on top of layer 1s. Rollups process transactions on another, faster, blockchain, or layer 2, then port the data back to the parent blockchain, at a fraction of the price.

Proto-danksharding will also “serve to set the scaffolding for future scalability upgrades, including danksharding, as part of the blockchain’s ‘Surge’ roadmap,” the report said. Danksharding is a way of making Ethereum more scalable, and applies the same concept of splitting the network into shards, but instead of using these shards to increase transactions, it uses them to increase space for groups of data.

“Dencun will enhance Ethereum’s scalability via rollups,” and will “optimize gas fees and improve the network’s security and implement a number of housekeeping updates,” the report added.

Ethereum’s Dencun upgrade, likely to take place in first-quarter 2024, is the next step in the blockchain’s journey to becoming a scalable settlement layer, Goldman Sachs (GS) said in a note Thursday.

“Dencun’s primary impact will be to increase its data availability for layer-2 rollups via proto-danksharding, resulting in a reduction of rollup transaction costs which will be passed on to end users,” the bank said.

A layer 1 network is the base layer, or the underlying infrastructure of a blockchain. Layer 2 refers to a set of off-chain systems or separate blockchains built on top of layer 1s. Rollups process transactions on another, faster, blockchain, or layer 2, then port the data back to the parent blockchain, at a fraction of the price.

Proto-danksharding will also “serve to set the scaffolding for future scalability upgrades, including danksharding, as part of the blockchain’s ‘Surge’ roadmap,” the report said. Danksharding is a way of making Ethereum more scalable, and applies the same concept of splitting the network into shards, but instead of using these shards to increase transactions, it uses them to increase space for groups of data.

HTML block with art19 embed

“Dencun will enhance Ethereum’s scalability via rollups,” and will “optimize gas fees and improve the network’s security and implement a number of housekeeping updates,” the report added.

Art19 podcast embed

A layer 1 network is the base layer, or the underlying infrastructure of a blockchain. Layer 2 refers to a set of off-chain systems or separate blockchains built on top of layer 1s. Rollups process transactions on another, faster, blockchain, or layer 2, then port the data back to the parent blockchain, at a fraction of the price.

“Tether has no exposure to SVB as its popularity lies more in the Asian region, meaning USDT doesn't rely on dollars being held in American banks, making it one of the safest stablecoins to pivot to currently,” said François Cluzeau, head of trading at Flowdesk, in a message to CoinDesk.

“We have seen a lot of USDC and DAI being traded for USDT, which has kept USDT liquid,” Cluzeau wrote.

The systematic risks of USDC affected dai stablecoins, which further strengthens tether’s thesis of holding a variety of assets to back its stablecoins, said Mitya Argunov, chief product officer at P2P.org.

"Tether’s performance during the crisis is largely due to its lack of direct exposure to SVB – it just didn’t have deposits there. Other major stablecoins like DAI were also indirectly exposed and de-pegged because they are actually largely collateralised by USDC,” Argunov said.

JW Plalist below

Meanwhile, some developers continue to remain cautious for the long term.

“Looking at Tether's history, it has experienced FUD and redemption issues in the past and has been stable amidst current market turmoil,” said Danny Chong, co-founder of Tranchess, in a note to CoinDesk.

“Tether's ability to maintain stability amidst recent challenges suggests that it may have a chance at long-term success,” Chong said, adding that further stress tests would show if it remained “resilient in the long run.”

social url - Twitter

USDC also demonstrated the effectiveness and resilience of its hedging strategy through collaboration with its banking partners as it recovered its peg swiftly the following week, Chong said.

Demand for stablecoins is undented, however.

“The swiftness of Circle’s USDC recovering its peg after their announcement of a recovery plan is further confirmation of how the market values the potential for stablecoin businesses,” Chong noted.

Embeddable chart

The often-controversial tether (USDT) stablecoins emerged as the best bet for traders looking for a stable haven earlier this month following a series of banking troubles in the U.S.

The USD coin (USDC) fell under 90 cents on March 11 after the collapse of Silicon Valley Bank (SVB) revealed some of the industry’s major players had exposure to the bank.

These players included U.S.-based stablecoin issuer Circle, which held a part of its USDC stablecoin’s cash reserves at Silicon Valley Bank as of Jan. 17, according to the firm's latest attestation.

Link List

On Monday, Chainlink’s co-founder Sergey Nazarov spoke at SWIFT’s global financial services networking event Sibos. Nazarov and Nigel Dobson, banking services lead at Australia and New Zealand Banking Group (ANZ), dove into cross-chain settlement using Chainlink’s Cross-Chain Interoperability Protocol (CCIP).

Chainlink and Depository Trust and Clearing Corporation (DTCC), which processes much of the trading in U.S. markets, announced a collaboration on Swift’s Blockchain interoperability project back in June. Chainlink's CCIP will enable complete interoperability between the source and destination blockchains.

On Wednesday, ANZ also used Chainlink’s CCIP to complete a cross-chain purchase of tokenized assets with A$DC, an ANZ-issued stablecoin tied to the Australian dollar. “This new development builds on the lessons learned from the recent Swift blockchain interoperability initiative and further showcases how financial institutions can utilize CCIP to facilitate cross-chain transactions across public and private blockchains,” Chainlink said on X (formerly known as Twitter).

On-chain data from spotonchain shows that four Chainlink wallets unlocked and transferred out 18.75 million LINK (worth around $117 million) over the weekend. About 15 million LINK tokens were deposited to crypto exchange Binance and 3 million were sent to a multisig address starting with 0xD50f.

Bulleted list

Numbered list

Read more: Ethereum Has Become More Centralized Since the Merge and Shanghai Upgrades: JPMorgan