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The Ethereum Dencun upgrade will introduce “Proto-DankSharding” to reduce the transaction costs of the L2 blockchain and solve scalability.The upgrade forms part of Ethereum’s majestic strategy to enhance scalability for its users and reduce transaction costs.This article will briefly introduce the technical components, development process, and its potential impact on the transaction capabilities and cost efficiency of the Ethereum network.
Dencun core features: Proto-DankSharding
Proto-DankSharding is a core upgrade of Dencun that reduces transaction costs on the L2 blockchain and reduces data availability costs, thus solving critical scalability challenges.This will lay the foundation for the final implementation of “Danksharding” and further expand these benefits.
Development process
Dencun upgrade is the abbreviation of Cancun-Deneb, where Cancun focuses on network scalability of the execution layer, while Deneb focuses on improving the consensus layer of Ethereum.In this upgrade, EIP-4844 is the core content, and improvement proposals such as EIP-1153, EIP-4788, EIP-6780 and EIP-7514 are also part of the upgrade.
The deployment process of the Dencun upgrade includes activation on various test networks. After the activation of Goerli and Sepolia test networks at the end of January this year, the final stage of testing on the Holesky test network was successfully completed on February 7.
The final version of Ethereum with Dencun capability is expected to be released by February 22, with validators still about two weeks to install the updated client version on their nodes.
At present, Ethereum developers have shared information about Geth V1.13.12, also known as Edolus, and are scheduled to upgrade Dencun on the main network at 13:55 UTC on March 13, block height 8626176.This date requires the developer’s approval and is confirmed through the open source software platform GitHub.
Dencun upgraded technology innovation
One of the famous technological innovations introduced by the Dencun upgrade is the “blob”, which aims to reduce storage and processing requirements through temporary storage and off-chain storage on Ethereum nodes.The blob is able to temporarily store data, which is only necessary for short-term transaction verification, and the data can eventually be deleted in case of overloading of network storage.The security and effectiveness of the data processing process are guaranteed by encryption technology that detects data changes.
According to previous reports, Proto-Danksharding reduced the number of blobs per block to 16, with the blob size of each block not exceeding 128KB.Therefore, the block space is expected to increase by about 2MB.The additional data space will allow Optimistic and Zero Knowledge Rollup to publish proof of transaction data on the chain, which will provide the actual data through a blob instead of “calldata”.blob data will be deleted in two weeks, while “calldata” will be stored on the Ethereum blockchain indefinitely.
Impact on transaction capabilities and costs
After the implementation of the Dencun upgrade, it is expected to significantly improve Ethereum’s transaction processing capabilities, ultimately allowing the network to process 30,000-100,000 transactions per second.This enhancement is crucial to Ethereum’s ability to support the growing ecosystem of DAPPs and users.
In addition, the Dencun upgrade will reduce the cost of Ethereum internal and rollup-related 10 times, improving Ethereum’s scalability and cost-effectiveness.Specifically, the upgrade will reduce Ethereum transaction costs from the current average of $0.23 to $0.02, a change that could accelerate adoption of the Ethereum rollup roadmap.At the same time, lower costs will make the L2 solution more attractive and competitive.
Since EIP-4844 can reduce the block space expenses paid by rollup by more than 10 times, the Dencun upgrade may reduce the Ethereum protocol fee income in the short term.The success of this upgrade can be measured by the following indicators: L2 adopts the blob transaction type; L2 sorter fee payment is reduced; L2 transaction fee is reduced; blob fees increase, making “spam” data economically no longer feasible; long-termEthereum will be adopted as a data availability (DA) rather than a competitive alternative, such as Celestia, etc.
Impact on Verifiers and Staking Operators
The expansion of staking services such as Lido and Rocketpool (as well as staking volumes from major players such as Coinbase, Binance and Kraken) has been one of the most important and active areas of research in the Ethereum community to improve the security of the Ethereum network.
Ebunker believes that as the amount of ETH staking increases, the consensus layer is under greater pressure.A large number of validators will lead to an increase in gossip messages and an increase in beacon state size. Archived Lighthouse nodes currently occupy 16TB of space.
While the growth rate of information volume and beacon state can be reduced by increasing the maximum effective balance (currently 32 ETH), introducing such changes requires a delicate balance that increases the threshold for Solo Ethereum validators.
Dencun upgrades are already working on this issue, and some solutions (such as the addition of Max Epoch Churn limit to EIP-7514) will reduce the rate at which new validators join the network.
The market impact of Dencun upgrade
The Dencun upgrade may affect the market value of the Ethereum network, which is mainly reflected in the following aspects:
Network feature enhancement: Dencun upgrades can significantly improve Ethereum’s transaction processing capabilities and reduce costs, and attract more developers and users to the Ethereum ecosystem.Increased Ethereum network efficiency and adoption may drive demand for ETH and have a corresponding impact on its price.
Investor perception: The successful deployment of Dencun can enhance investors’ confidence in Ethereum’s long-term viability and its ability to perform complex upgrades.This perceived reliability and momentum for progress may affect the attractiveness of Ethereum as an investment, which may lead to an increase in the value of Ethereum investment.
Market hype and sentiment: The cryptocurrency market is highly sensitive to investor sentiment.Expecting Dencun’s upgrade to be positive or market responses to its successful implementation may lead to short-term price fluctuations, while traders and investors will also adjust their positions based on the expected impact on Ethereum’s functionality and market position.
With the successful activation of the Dencun upgrade on the Ethereum test network and the full implementation of the main network in March, Ethereum’s transaction processing capabilities and efficiency will be greatly improved.Overall, the Dencun upgrade is a huge evolution of Ethereum, solving the problems of direct and long-term scalability, security and efficiency.
The EIP in this upgrade aims to optimize data availability and staking operations can significantly enhance network performance and user experience.The Dencun upgrade to address the pressing challenges facing blockchain networks by implementing Proto-Danksharding and introducing blobs is a milestone in Ethereum’s ongoing efforts to improve its scalability and reduce transaction costs.
