COTI V2, a privacy-centric Layer 2 solution built on the Ethereum network, is expected to grow exponentially due to its close link to the Ethereum blockchain. As the Ethereum ecosystem strives for optimal performance, security, and scalability, COTI V2 is also readily aligning itself with L2 protocol upgrades, strategically leveraging the upcoming Dencun upgrade while adding to the continuous transformation of the Ethereum network.
The Dencun upgrade, named after the Cancun and Deneb upgrades, is set to be released on Ethereum’s Gnosis chain on March 13. This upgrade is expected to reduce transaction fees on layer-2 networks and improve Ethereum’s scalability. Ethereum’s value has increased by 132.5% since 2023, with the Dencun upgrade causing a 0.27% price fluctuation. Gnosis has confirmed the activation of the Dencun upgrade on the Gnosis chain, following Ethereum’s Merge and Shapella upgrades in the past two years.
Advertisement
The Dencun upgrade is expected to enhance COTI V2 in several ways, including reducing transaction costs. This will be achieved by significantly improving transactional latency, which allows for an increase in the amount of transactional data per block and eliminates any previous bottlenecks. The anticipated adoption of COTI V2 is projected to be driven by advantages such as cost reduction and the ability to engage in high-frequency trading.
The Dencun upgrade introduces ephemeral data blobs using EIP-4844, also known as proto-dank sharding. This is important for reducing layer-2 transaction fees by providing a new transaction type dubbed “blob-carrying transactions.”
Advertisement
EIP-4844 facilitates the integration of larger amounts of data per transaction by implementing exclusive transactions that can carry blobs. This is advantageous for layer 2 scaling solutions such as rollups, as they can consolidate multiple transactions into a single large transaction and submit it to the blockchain without delays. The Layer 2 of COTI V2 is specifically built to accommodate the enhanced model, allowing users of COTI V2’s dApps and network to benefit from its scalability.
