Ethereum DENCUN Upgrade.
As many know, Ethereum is a decentralized platform that allows the creation of smart contracts and distributed applications (DApps) without the possibility of fraud, censorship or third-party interference. It is also the second largest cryptocurrency by market capitalization and has been instrumental in the development of the decentralized finance (DeFi) and non-fungible tokens (NFTs) sector.
In just a few hours, an important event is about to occur, the Ethereum upgrade known as DENCUN. Scheduled to activate on March 13 at 1:55 p.m. UTC, this update is a significant step towards improving scalability and reducing transaction costs on Ethereum Layers 2, thanks to a new process called "proto-danksharding".
The "proto-danksharding" process, also known as EIP-4844, is an intermediate update in Ethereum's roadmap to full Danksharding. This process introduces what are called “data blobs,” which allow rollups to more cheaply add data to the blocks.
Proto-danksharding is crucial because it addresses one of Ethereum's biggest challenges: scalability. Historically, rollups have been limited by the high cost of publishing their transactions to CALLDATA, as this requires all Ethereum nodes to process and store that data indefinitely. With proto-dankharding, data blobs provide temporary storage for rollup transactions, which are then automatically deleted after a fixed period, thus reducing costs and enabling cheaper transactions for end users.
This update is a combination of the "Deneb" and "Cancun" improvements, which introduce an innovative form of data storage called “blobs” within the Ethereum network. Data blobs are not accessible to the Ethereum Virtual Machine (EVM) and are automatically deleted after a set time. Rollups publish the transactions they execute to these blobs and also publish a "commit" to the data. This is done by fitting a polynomial function to the data, which can then be evaluated at various points to verify the integrity of the data. If the original data changes, the function will not be identical, and therefore, neither will the values evaluated at each point. This verification method is compatible with zero-knowledge techniques used by some rollups and, eventually, other parts of the Ethereum protocol.
Blobs are an innovative solution for data storage that promises to reduce transaction costs from a dollar to cents, and even less than a cent in some cases. This technical improvement is crucial to improve the end-user experience and encourage mass adoption of blockchain technology. Additionally, proto-danksharding has the potential to scale Ethereum to over 100,000 transactions per second, making transactions at layer 2 as cheap as possible for users. This represents a significant step towards creating a truly scalable and efficient blockchain.
It should be added that Ethereum's DENCUN update has several implications for validators who "stake" their Ethereum as collateral and who benefit from transaction fees and block rewards. With the reduction of transaction costs, thanks to DENCUN, there could be an increase in network activity, potentially resulting in more transaction fees.
It must be remembered that the Proof of Stake (PoS) model depends on validators to keep the network secure. With the DENCUN upgrade, the network is expected to be more efficient and scalable, which could attract more users and validators, thus increasing the decentralization and security of the network. Additionally, if the upgrade results in greater adoption and usage of Ethereum, this could increase demand for ETH and potentially its value.
The update has generated positive buzz among Ethereum investors, developers, and enthusiasts. DENCUN is anticipated to lead to long-term application innovation and user engagement, strengthening Ethereum's position in the future of decentralized finance. It would be a catalyst for a resurgence in the DeFi sector and a step towards future improvements on Ethereum, which continues to focus on scalability and efficiency.
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✍ Originally Posted: Publish0x
