Ethereum’s (ETH-USD) dominance as the leading smart contract and Web 3.0 platform is facing its most significant test yet. The upcoming Deneb/Cancun upgrade could once again revolutionize interest in this token. However, it’s also an upgrade that comes with some element of risk. Thus, it’s wise to align your portfolio to benefit from any potential impact of this upgrade, and do so in a way that limits your downside exposure.
The main feature of this upgrade is called proto-danksharding. In plain English, this scaling solution should make Ethereum layer 2 rollups much faster and cheaper to use. For those unaware, rollups move computation and data storage off the main Ethereum chain. However, these computations still retain the underlying security and decentralization Ethereum provides.
Proto-danksharding allows large blobs of transaction data to be stored briefly on the main chain, just long enough for validation, before getting passed along to rollups. This eliminates the need for expensive calldata that has previously congested the Ethereum network.
While the upgrade could be a huge boost for many Web 3.0 projects built on smart contracts or reliant on transaction speeds, Web 3.0 assets remain highly speculative. As such, I only recommend allocating a small portion of your crypto portfolio to chase the upside in these tokens.
With that said, here are three cryptos to buy ahead of this major upgrade.
Ethereum (ETH-USD)
As the dominant smart contract and Web 3.0 ecosystem, Ethereum has the most to gain from its ambitious Deneb/Cancun upgrade. While the upgrade aims to solve Ethereum’s nagging fee issues, Vitalik Buterin has hinted that base gas costs may still rise, keeping prices high for end users. However, developers could have a field day with greatly-improved layer-2 efficiency. This might just be enough to retain developers into Ethereum’s orbit, rather than losing talent to rival chains like Solana (SOL-USD) or Avalanche (AVAX-USD).
I remain adamantly bullish on Ethereum heading into the upgrade event. As a deflationary cryptocurrency, growing demand for Ethereum tokens fueled by Web3 apps should drive prices higher. And with Ethereum hosting most smart contract-based platforms, demand is likely to increase 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 promising emergent use cases that could propel Ethereum adoption. Decentralized finance (DeFi) retains strong activity, decentralized autonomous organizations (DAOs) are on the rise, non-fungible tokens (NFTs) are transforming digital ownership and asset provenance, and even central banks are experimenting with the prospect 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)
As a leading layer-2 scaling solution utilizing optimistic rollups for Ethereum, Optimism (OP-USD) checks 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 in a big way once Optimism leverages proto-danksharding and blobs to enhance its rollups.
Optimism offers an encouraging 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 hit the ground running 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 poised 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)
0xGasless (0XGAS-USD) is a Web 3.0 project focused squarely on expanding Ethereum’s addressable market by eliminating gas fees. It’s a great choice for investors seeking outsized upside from higher Ethereum transaction volumes after the upgrade.
At the core of 0xGasless’ offering is support for ERC-4337 and account abstraction. This is a standard that replaces traditional externally owned accounts (EOAs) with smart contract wallets. These wallets feature built-in logic for transaction validation, authorization, and, crucially – gas payment. This shields users from managing seed phrases, paying volatile gas fees directly and losing funds to theft or mistakes.
0xGasless also offers intriguing functionality that could hasten mainstream adoption. For example, users can deploy ERC-4337 smart contract wallets on the user-friendly Telegram platform. Additionally, a custom paymaster service enables gas fee payment using any ERC-20 token.
Projects like 0xGasless building on account abstraction and user experience have asymmetric upside. The road to mass adoption starts by allowing users to easily access Ethereum applications without crypto’s usual harsh learning curve.
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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.
