Cancun's upgrade is finally coming, which targets will it benefit?

Later today, Ethereum is expected to officially activate the Dencun hard fork upgrade at block height 269568.

The so-called Dencun upgrade is actually the collective name for the two upgrades of Deneb and Cancun. The former is oriented to the consensus layer and the latter is oriented to the execution layer. The Chinese translation of Cancun is the long-awaited name of the Ethereum community. "Cancun Upgrade".

Before the official launch of the main network, Ethereum core developers and major client teams have successively deployed Dencun upgrades on Devnet, Goerli test network, Sepolia test network, and Holesky test network in the past few months. to test and observe the upgrade and subsequent network health.

Upgrade content: A total of nine EIPs, focusing on EIP-4844

According to the Ethereum Foundation, a total of nine EIPs (Ethereum Improvement Proposals) will be implemented in this Dencun upgrade. Specifically:

· EIP-1153: About transient storage opcodes;

· EIP-4788: About beacon block roots in EVM;

· EIP- 4844: About sharded Blob transactions;

· EIP-5656: About MCOPY, the memory copy instruction;

· EIP-6780: About SELFDESTRUCT in the same transaction;

· EIP-7044: About permanently valid voluntary exit signatures;

· EIP-7045: About adding the maximum timeslot included in the proof;

· EIP-7514: About adding the maximum Epoch churn limit;

· EIP-7516: Regarding the BLOBBASEFEE opcode.

For readers who are not familiar with Ethereum development terminology, you do not need to understand the specific content of each EIP mentioned above. You only need to focus on the most important update of Dencun this time - EIP-4844. .

EIP-4844, also known as Proto-Danksharding, is the front-end solution of Danksharding, the current mainstream sharding idea in the Ethereum community. The main content of EIP-4844 (Proto-Danksharding) is to introduce a new transaction type "Blob transaction" to Ethereum, by adding an additional temporary data space Blob to the block on the Ethereum main network, It is specially used to process Layer2 related transactions, thereby significantly reducing the transaction fee cost of Layer2.

Micro-analysis: How do blobs affect Layer2 transaction costs?

Earlier this week, Ethereum core developer eric.eth posted on the X platform that the implementation of EIP-4844 “will reduce Ethereum transaction fees to $0.01” —— eric.eth It has been admitted that this sentence contains a concept that is stolen. What it wants to express is that the gas cost of Ethereum-based Layer 2 transactions will be reduced to about $0.01.

So, how does “Blob Transaction” help Layer2 achieve cost reduction and efficiency increase? After the upgrade, can the transaction cost of the Layer 2 network really be reduced to an extremely low level of $0.01?

To answer these questions, we first need to focus on the operating mechanism of Layer2. Whether it is Optimistic Rollup or ZK Rollup, as long as it relies on the Ethereum main network as the DA layer in a narrow sense, it will follow the following operating model - Layer 2 needs to write its transactions, proofs and execution results to the Ethereum main network. calldata data space in the network, thereby passing its historical records to Ethereum, relying on the latter to ensure the decentralization and security of the network.

This data synchronization mode that relies on calldate has been running stably for a long time, but there has always been a serious problem - the calldate write transaction submitted by Layer2 needs to be synchronized with the Ethereum main network All transactions above compete in the same fee market, which will cause the transaction cost of Layer 2 to be significantly affected by the gas status of the Ethereum main network.

In order to ensure that calldate write transactions can be executed smoothly on the Ethereum main network,

Layer2 will pass on this part of the cost to users who execute transactions on Layer2. Currently, the cost of calldate writing transactions accounts for the vast majority of Layer 2 transaction costs, which is why users generally feel that the current Layer 2 transaction costs are still too expensive.

After EIP-4844 is implemented, Ethereum will add an additional data space Blob to the block specifically for processing Layer2 related transactions. At that time, Layer2 will no longer need to write data to the calldate space. Instead, it will use the Blob space to complete data synchronization operations. In addition, Layer2 related transactions will be distinguished from other Ethereum mainnet transactions as two independent fee markets. Come on, no longer interfere with each other.

It is worth mentioning that in order to prevent additional Blob data space from causing too much burden on the Ethereum main network nodes , the data in the Blob will be cleared regularly, which also means that the historical data storage mechanism of Layer 2 will undergo some new changes in the future.

Based on the above analysis, it can be expected that after the implementation of EIP-4844, the data synchronization cost of the Layer2 network will drop significantly, thereby indirectly reducing the user transaction cost on the Layer2 network; in addition, as this is The block space occupied by Layer2 is released (transferred to Blob), and the competitive fee pressure faced by other Ethereum mainnet transactions will also be alleviated. Therefore, EIP-4844 will also reduce the transaction fee cost of the Ethereum mainnet to a certain extent.

As for how far the transaction costs on major Layer 2 will be reduced after the upgrade is completed, Optimism has launched a website called welovetheblobs to intuitively query the cost changes of various operations. For example, the transaction cost of executing a swap on Velodrome will be reduced from US$0.52 to US$0.03 in real time.

Good targets: What else besides Layer2?

For investors, in addition to understanding the content and functions of the Dencun upgrade, the most interesting topic is which potential targets this upgrade will benefit.

First of all, Dencun upgrade will naturally directly benefit the entire Layer2 sector. L2BEAT data shows that the number of Layer 2 currently in operation is as high as 45, and the number of Layer 2 to be launched on the main network is also 34, which includes Optimism (OP), Arbitrum (ARB), and Starknet that we are already quite familiar with. (STRK), Metis (METIS), Manta Pacific (MANTA) and other issued currency projects, as well as unissued currency projects such as zkSync, Blast, Linea, Scroll and so on.

With the Dencun upgrade, especially the implementation of EIP-4844, the above projects and more Layer 2 not mentioned will all be realized. The "cost reduction and efficiency increase" enable the Layer 2 network to eliminate the disadvantages that it once had with low-cost Layer 1 such as Solana in terms of transaction costs. In the long run, the reduction of transaction attrition will help major Layer 2 attract and retain more users, and will also help attract more developers to conduct multi-faceted development attempts, thus continuously improving the vitality of the ecosystem. .

Among the many Layer2s, zkSync may need special mention, because zkSync founder Alex Gluchowski once mentioned that the new expansion solution zkPorter will be launched after the implementation of EIP-4844, and zkPorter needs to rely on Using zkSync's native token to ensure data availability, This may mean that zkSync should not be too far away from issuing coins.

In addition to directly benefiting Layer 2, the Dencun upgrade will also indirectly benefit other related fields and tracks.

For example, Layer 2 games, social networking and other projects with "high concurrency requirements" and "low unit value" attributes may usher in a window of accelerated growth. Currently, due to the problem of high cost, the mainstream application types above Layer 2 are still "low concurrency requirements" and "high unit value" projects represented by DeFi, because only such projects can be used in larger The ideal economic effect can be achieved under high costs. With the advent of Dencun upgrade, this situation may also usher in a change.

Furthermore, Storage concept projects may also usher in certain development opportunities due to changes in Layer2’s storage requirements for transaction history. Since Blob does not store data permanently like calldate, this means that Layer2 needs to find other ways to store historical transaction data for a long time. New needs are new opportunities.

In addition, If Layer2 can further win market consensus after reducing transaction costs, RaaS-type "water delivery" services may also see more utilization demand, but this is relatively long-term. topic.

In short, as the Dencun upgrade gradually becomes a reality,the overall fundamentals of the Ethereum ecosystem will surely improve significantly, and this benefit will also radiate to all components within the Ethereum ecosystem.

In the short term after the upgrade is completed, users may not have any other obvious perceptions except the reduction in Layer 2 fees, but in the long term, the Dencun upgrade itself can bring The potential ecological vitality and its role as a foundation for subsequent upgrades will undoubtedly drive Ethereum to a new stage of development.

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