Ethereum Dencun Upgrade- The insights

In this blog, we are going to see one of the most significant Ethereum upgrade since The Merge. This upgrade will be implemented on the Ethereum mainnet on 13 March, 2024 (Wednesday).

The last upgrade we saw in between these two upgrades was the Shapella upgrade. Now, the Dencun upgrade is going to affect most users- by lowering gas fees to be paid on layer 2.

Let's see a little detail about the process and what's inside it.

What is Dencun Upgrade?🤔

Dencun is an upgrade, technically known as "Hard Fork", consisting of 2 upgrades, happening simultaneously: Deneb-Cancun, collectively known as Dencun.

This upgrade is going to start "The Surge" era of Ethereum. During “The Surge”, Ethereum will prioritize scalability and will aim to hit “100,000 transactions per second and beyond.”, according to Ethereum co-founder Vitalik Buterin.

What is inside this upgrade?

The Dencun upgrade consists activation of 9 Ethereum Improvement Proposals(EIPs). The biggest one is EIP-4844, aka proto-danksharding, which is designed to improve the chain's ability to handle data from L2 networks.

The EIP-4844 will introduce temporary storage space called “data blobs” for Ethereum L2 networks to use.

This extra storage space enabled by temporary data blobs will increase the data availability capacity of the Ethereum mainnet. L2 rollups can now use this extra space to efficiently submit their data to the mainnet, ultimately leading to reduced L2 gas fees for the end user.

Who's in benefit?

Layer-2 networks like Polygon, Arbitrum, etc. will benefit the most from Dencun. These networks help Ethereum in scaling. It bundles up the transactions done by users and passes them to Ethereum. Layer 2 networks are used very much over the Ethereum network.

Dencun upgrade will help L2s settle more amount of data, with more efficiency, therefore reducing fees for end-users, isn't that a big thing?

Some important points

• The data blobs, we talked about earlier, will be stored on Ethereum mainnet for 18 days only, allowing increased data availability without overburdening the Ethereum nodes.

• The Dencun upgrade is not for reducing gas fees on Ethereum mainnet, but only for layer2.

Conclusion

Proto-danksharding is Ethereum's first swing at "sharding," which is a set of techniques to break up the blockchain into mini-shards (or mini-chains), to process more transactions for cheap.

The Dencun upgrade is one of the most significant steps for reducing the gas fees on layer 2 blockchains, affecting millions of users on them, positively.

Let's see where Ethereum heads to in future.

Thanks for reading.

Keep learning. Keep hustling.🫡

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