I have been paying close attention to the Layer 2 sector recently and have noticed that the overall narrative framework is quietly changing. The substantial progress of the Cancun upgrade has finally arrived, which could be the key to Ethereum's turnaround.

First, let's discuss the core developments. The latest from Ethereum core developers reveals that the Dencun upgrade (including the Cancun and Deneb upgrades) has been successfully tested on Devnet #12, with multiple clients including Reth and Lighthouse fixing bugs. The consensus at the meeting was that if progress continues smoothly, the Goerli testnet fork date will be set in early 2024, aiming for mainnet launch in January. Although the final mainnet timeline has not been confirmed, the fact that Goerli, as the closest testnet to mainnet, signals enough confidence to boost the entire ecosystem.

Why is the Cancun upgrade so important? Simply put, it reduces costs for Layer 2. It opens a new stage for data storage and retrieval, directly lowering transaction costs on Layer 2, which is a qualitative leap for the entire sector's development.

Even more interesting is that in recent months, new forces have been continuously entering the Layer 2 space. Blast, a yield-generating Layer 2 launched by the founder of Blur, secured $20 million in funding. By introducing a points airdrop mechanism, its TVL surpassed $800 million in less than a month—this growth rate is indeed somewhat crazy. Meanwhile, a major exchange announced the launch of a ZK Layer 2 based on Polygon CDK, planning to activate the mainnet in Q1 2024. Gaming studios and cryptography companies are also pushing their own Layer 2 solutions.

What’s more attractive is the airdrop anticipation. Starknet Foundation has already taken a snapshot for the airdrop, and the STRK token contract was deployed 379 days ago, waiting for the final airdrop plan to be announced. ZKFair also announced the launch of its testnet, planning to airdrop 100% of tokens via gas fees to community users after mainnet launch. These expectations have directly ignited community enthusiasm.

Data shows that capital continues to flow in. The total TVL of Layer 2 has risen to $16.14 billion, up 24.9% in the past 30 days, more than tripling since the beginning of the year. ETH price fluctuates around $2.33k, and the Layer 2 sector has also risen accordingly.

Honestly, during the times when Bitcoin and Solana were in the spotlight, Ethereum and Layer 2 were somewhat underestimated, and the community was arguing over Ethereum’s value for a while. But now, with the substantial progress of the Cancun upgrade and the explosion of the Layer 2 ecosystem, this narrative might be about to reverse. After Dencun goes live, the optimization of transaction fees and user experience will open up more application scenarios, making this sector worth continuous attention.