Ethereum (ETH-USD), the leading platform for smart contracts and Web 3.0, is on the brink of a significant challenge. The impending Deneb/Cancun upgrade could rekindle interest in this token, but it’s not without its risks. Therefore, it’s prudent to adjust your portfolio to benefit from any potential impact of this upgrade, while also limiting your downside exposure.
The key feature of this upgrade is proto-danksharding. In layman’s terms, this scaling solution should enhance the speed and cost-effectiveness of Ethereum layer 2 rollups. For those who may not know, rollups shift computation and data storage away from the main Ethereum chain, while still maintaining the underlying security and decentralization Ethereum offers.
Proto-danksharding enables large chunks of transaction data to be temporarily stored on the main chain for validation before being passed on to rollups. This eliminates the need for costly calldata that has previously clogged the Ethereum network.
While this upgrade could significantly benefit many Web 3.0 projects built on smart contracts or dependent on transaction speeds, Web 3.0 assets remain highly speculative. Therefore, I would only advise allocating a small portion of your crypto portfolio to pursue the upside in these tokens.
Now, let’s look at three cryptos to buy in anticipation of this major upgrade.
Ethereum, as the dominant smart contract and Web 3.0 ecosystem, stands to gain the most from its ambitious Deneb/Cancun upgrade. While the upgrade is designed to address Ethereum’s persistent fee issues, Vitalik Buterin has suggested that base gas costs may still increase, keeping prices high for end users. However, developers could greatly benefit from the improved layer-2 efficiency. This could be enough to keep developers within Ethereum’s sphere, rather than losing them to competing chains like Solana (SOL-USD) or Avalanche (AVAX-USD).
I remain staunchly bullish on Ethereum as we approach the upgrade event. As a deflationary cryptocurrency, the growing demand for Ethereum tokens driven by Web3 apps should push prices higher. And with Ethereum hosting most smart contract-based platforms, demand is likely to rise over time. Deneb/Cancun will be a definitive test of Ethereum’s technical prowess and its ability to meet user needs.
Beyond the upgrade, there are some emerging use cases that could drive Ethereum adoption. Decentralized finance (DeFi) continues to be active, decentralized autonomous organizations (DAOs) are gaining traction, non-fungible tokens (NFTs) are revolutionizing digital ownership and asset provenance, and even central banks are experimenting with the idea of central bank digital currencies (CBDCs) on Ethereum. As both a crypto asset and a decentralized network powering Web3, Ethereum remains a top long-term buy.
Optimism (OP-USD), a leading layer-2 scaling solution that uses optimistic rollups for Ethereum, ticks all the boxes as a top Deneb/Cancun speculative buy. The project aims to provide faster and cheaper transactions for Ethereum dApps like decentralized exchanges, gaming platforms, and social networks.
Importantly, Optimism is EVM-compatible, meaning developers can deploy existing smart contracts on Optimism with minimal effort. While the network is currently live, supporting prominent apps like Uniswap (UNI-USD), Synthetix (SNX-USD), and Chainlink (LINK-USD), wider usage has been hampered by throughput constraints. This could change dramatically once Optimism leverages proto-danksharding and blobs to enhance its rollups.
Optimism offers a promising early sign of its upgrade readiness. Its team recently implemented the Ecotone hard fork on the Optimism Goerli test network. This hard fork trial enabled batch submission via EIP-4844 blobs, verifying that Optimism will be ready with blob support on mainnet post-upgrade.
With strong fundamentals and a 25% market share of total value locked in layer-2 platforms at over $5.4 billion, Optimism looks set to capitalize on the greater efficiency unlocked by Deneb/Cancun. As rollup activity expands, Optimism could be one of the biggest beneficiaries of Ethereum’s push to scale.
0xGasless (0XGAS-USD) is a Web 3.0 project squarely focused on expanding Ethereum’s addressable market by eliminating gas fees. It’s an excellent choice for investors seeking outsized upside from higher Ethereum transaction volumes post-upgrade.
At the heart of 0xGasless’ offering is support for ERC-4337 and account abstraction. This standard replaces traditional externally owned accounts (EOAs) with smart contract wallets. These wallets feature built-in logic for transaction validation, authorization, and importantly – gas payment. This protects users from managing seed phrases, paying volatile gas fees directly, and losing funds due to theft or errors.
0xGasless also offers intriguing functionality that could speed up mainstream adoption. For instance, users can deploy ERC-4337 smart contract wallets on the user-friendly Telegram platform. Additionally, a custom paymaster service allows gas fee payment using any ERC-20 token.
Projects like 0xGasless that are building on account abstraction and user experience have asymmetric upside. The journey to mass adoption begins by allowing users to easily access Ethereum applications without the usual steep learning curve of crypto.
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Read More: How to Avoid Popular Cryptocurrency Scams
On the date of publication, Omor Ibne Ehsan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
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