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Ethereum’s (ETH) development team is all hands on deck, preparing for the highly awaited Dencun update happening today.
This isn’t just another update, this is one of the biggest change implemented on the Ethereum blockchain in over a year. The Dancun name is a combination of the project names Deneb and Cancun, indicating a dual upgrade on Ethereum’s consensus and execution layers that were named this way.
The update is expected to go live around 13:55 UTC and the costs of transactions is expected to then take a dive. The effects should be even more noticeable on the burgeoning number of secondary networks, or layer-2 “rollups,” built on top of Ethereum.
What is Dencun?
At its core, Dencun introduces the long-awaited “proto-danksharding” with Ethereum Improvement Proposal (EIP) 4844. This change is expected to significantly improve the network’s ability to handle the data generated by layer-2 solutions.
The road to Dencun travelled along a bumpy road, with the team originally eyeing a launch in late 2023. However, the implementation was slowed by technical challenges which pushed the target date forward. Still, following test network implementations — which had issues of their own — the roadmap is moving forward once again.
How to follow the Ethereum Decun upgrade?
The Ethereum community is buzzing with excitement, and the EthStaker developer group along with Nethermind, an Ethereum infrastructure firm, are hosting live streams to celebrate Dencun’s debut which you can watch below.
Dencun’s crown jewel is the aforementioned new feature called “proto-danksharding.” It’s introducing a whole new way to store transaction data on Ethereum through so-called “blobs.” Those blobs are then deleted when their data is not necessary anymore, significantly decreasing the strain on network resources and lower costs.
Proto-danksharding is Ethereum’s first attempt at “sharding,” a technique aimed at breaking the blockchain into smaller pieces to process transactions more cheaply. Though a full-blown sharding solution is likely still a few years away, this step could mean high fees can more easily be avoided through layer-2s in the meanwhile.
Moreover, this update will make life easier for a new breed of blockchains known as data availability (DA) layers, which L2s often use to store large quantities of transaction data. Proto-Danksharding could result in cheaper DA data downloads. Polygon’s co-founder, Jordi Baylina, told Coindesk in early March:
Prices should go down… it’s a matter of supply and demand.
The next steps for Ethereum
After Dencun, the team’s eyes will be on the next big thing, currently dubbed Electra + Prague (Petra). The EIPs that will be included in this update are not yet decided, but “Verkle Trees,” a new way to help nodes store data, is being considered. Karl Floersch, the brain behind OP Labs — the company behind the Optimistic Rollups layer-2 implementation Optimism (OP) — explained:
Scalability is the key that unlocks permissionless collaboration.”
The development follows recent reports that United States-based publicly traded cryptocurrency exchange Coinbase met with the Securities and Exchange Commission (SEC) to discuss the Ethereum exchange-traded fund (ETF) proposed by asset manager Grayscale Investments.
