Trend analysis of Ethereum after upgrade

The Ethereum upgrade will reduce transaction fees, increase speed, promote the prosperity of the DeFi and NFT markets, the rise of Layer 2 solutions, increase institutional investor participation, and consolidate its "world computer" status.

Apr 10, 2025 at 04:01 am

As a pioneer in blockchain technology, Ethereum has a profound impact on the entire digital asset field every upgrade. Accurately predicting upgraded market trends is crucial for investors and developers. This article will explore in-depth various trends that may appear after the upgrade of Ethereum, helping you grasp the pulse of the market and understand the future trend.

Statement: The cryptocurrency market is changing rapidly. The following analysis is only a speculation based on current market conditions and industry trends and does not constitute any investment advice. Please make careful decisions based on your own situation.

1. Review of upgrade content: Understanding the basis of impact

To analyze the trend after upgrading, you first need to review the core content of the upgrade. Generally speaking, the Ethereum upgrade involves the following aspects:

• Changes in consensus mechanisms: For example, transitioning from Proof-of-Work to Proof-Stake will affect the energy consumption, security, and how the network is involved.

• Optimization of transaction speed and fees: The upgrade may use sharding technology, Layer 2 solutions and other means to improve transaction speed and reduce transaction fees, thereby improving user experience.

• Extension of smart contract functions: Upgrades may introduce new smart contract functions, such as oracles, cross-chain interoperability, etc., providing developers with more possibilities.

• Security enhancement: Upgrades may fix vulnerabilities, enhance network attack resistance, and improve platform security.

2. Analysis of potential trends after Ethereum upgrade

1. Further prosperity in the DeFi field:

• Lower transaction fees and faster transaction speed: After the upgrade, the transaction fees of the Ethereum network will be reduced and the transaction speed will be increased, which will lower the threshold for the use of DeFi applications and attract more users to participate.

• New DeFi protocols and applications: Upgrades may introduce new smart contract capabilities to provide more possibilities for DeFi protocol innovation, such as more efficient lending, more complex derivative transactions, etc.

• The integration of DeFi and CeFi: With the advancement of compliance, DeFi may be more closely integrated with centralized finance (CeFi) to provide users with richer financial services.

1. The continued development of the NFT market:

• More convenient NFT transactions: After the upgrade, the transaction fees of the Ethereum network will be reduced and the transaction speed will be increased, which will reduce the cost of NFT transactions and improve transaction efficiency.

• New NFT application scenarios: NFT is not only limited to artworks and collectibles, but can also be applied to games, virtual worlds, identity authentication and other fields. Upgrades may bring more possibilities to NFT applications.

• Institutional Investors Entry: As the NFT market gradually matures, more and more institutional investors are beginning to pay attention and participate, which will bring more funds and resources to the NFT market.

1. The Rise of Layer 2 Solutions:

• Solve the scalability problem of Ethereum: The Layer 2 solution can significantly improve the transaction speed and throughput of the Ethereum network without sacrificing security, and solve its scalability problem.

• Reduce transaction fees: The Layer 2 solution can significantly reduce transaction fees on the Ethereum network, making it more competitive.

• Diverse Layer 2 technology: Various Layer 2 technologies have emerged on the market, such as Rollups, State Channels, Plasma, etc. These technologies have their own advantages and disadvantages and are suitable for different application scenarios.

1. Institutional investors' participation increased:

• More mature infrastructure: With the continuous improvement of the Ethereum ecosystem, infrastructure such as trading platforms and custody services has become more mature, providing convenience for institutional investors to participate.

• A clearer regulatory framework: As governments gradually become clear on digital asset regulatory policies, institutional investors' confidence in participating in the digital asset market has increased.

• New investment products: Institutional investors may launch more Ethereum-related investment products, such as ETFs, funds, etc., to provide retail investors with more investment channels.

1. Ethereum's position as a "world computer" is more stable:

• More application scenarios: With the continuous development of technology, Ethereum's application scenarios will be more extensive, covering finance, supply chain management, the Internet of Things, artificial intelligence and other fields.

• More developers join: Ethereum has a huge developer community, and they will continue to innovate and contribute new applications and protocols to the Ethereum ecosystem.

• Greater social influence: Ethereum will have an increasingly greater impact on traditional industries and promote social progress.

3. Risk warning

• Technical risks: Technical problems may arise during the upgrade process, resulting in network instability.

• Security risk: The upgraded code may have security vulnerabilities and be exploited by hackers.

• Market risk: The cryptocurrency market is extremely volatile and prices may fall sharply.

• Regulatory risks: There is uncertainty in government regulatory policies on digital assets.

4. Summary

The upgrade of Ethereum is an important milestone in the development of blockchain technology and will have a profound impact on the entire digital asset field. Only by deeply understanding the content and potential trends of upgrades can we better grasp market opportunities and achieve investment returns. At the same time, we should also pay attention to risk control and invest with caution.