Ethereum is preparing for two major upgrades: Pektra and Fusaka. However, these upgrades do not address underlying concerns about their talknomics.
Ethereum (ETH) is set to deploy two major upgrades this year, Pectra and Fusaka. However, these upgrades come when Ethereum is under constant threat. This is a research report by Binance released on April 16th.
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The following upgrades improve data availability, increased support for Layer 2 chains, and wallet expansion. However, investors continue to express concern about value generation. Specifically, some of these upgrades appear to favor Layer 2 networks over Ethereum’s own revenue generation.
Ethereum is getting better, but value capture is lacking
One is the Petra upgrade scheduled for May, which will introduce more chunks. The blob allows Layer-2 networks to post more data to Ethereum, allowing them to further reduce their fees. However, this also means that Ethereum revenue per transaction will decrease.
The upgrade also introduces wallet improvements aimed at improving the user experience by increasing validator caps from 32 ETH to 2,048 ETH. These changes are technically important, but do not provide direct value to the ETH holder.
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Fusaka upgrades scheduled for later this year will bring improved experiences for Dark Shard and developers. In particular, the introduction of the Ethereum object format can facilitate writing smart contracts, reducing errors and security risks.
Upgrades will become the future foundation infrastructure of Web3 in the Ethereum location. By empowering the Layer-2 network, Ethereum aims to be at the heart of the broader Web3 ecosystem. Still, this is hardly comfortable for ETH owners looking for value and returns.
Notably, Ethereum, which traded at $1,567, has lost more than 60% of its value since its December high of $4,106. Network volume drops. The increase in L2S has led to a decrease in transaction fee generation. As a result, ETH is becoming more inflationary, causing concern among investors.
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