Countdown to Dencun: Re-understand the latest and most important upgrade of Ethereum in one article

Source: Coindesk

Compiled by: BitpushNews Mary Liu

Ethereum’s Dencun upgrade plan is expected to be launched at approximately 9:55 a.m. Eastern Time on March 13. This upgrade, called "proto-danksharding" or EIP-4844, will bring a new, more economical era to auxiliary networks (L2/Rollup) running on Ethereum. New Ethereum Improvement Proposals (EIPs) will be activated, providing users with lower fees and bringing more efficient operation to the entire Ethereum ecosystem. This upgrade is regarded as an important milestone in the development of the Ethereum network and is expected to bring more advantages and opportunities to users and developers. This move will help promote the development of blockchain technology, accelerate the popularization and application of digital assets, and provide a solid foundation for the entire cryptocurrency.

Dencun’s naming was inspired by Deneb and The combination of the two words Cancun symbolizes two important upgrades carried out simultaneously on the consensus layer and execution layer of Ethereum. This update will be one of the most significant updates to Ethereum since the Shapella upgrade in April 2023.

Proto-danksharding

Dencun will introduce Proto-Danksharding, a long process of transitioning from theory to practice (first mentioned by Vitalik Buterin in 2019), which changes the way Ethereum stores data The way.

Dencun adopts a new temporary way to store "blob" data instead of saving it directly on the immutable execution layer of the Ethereum main network, which is more cost-effective . While "blob" may sound unfamiliar, it's actually a common concept in computer science. Similar data management blobs also exist in programming languages ​​​​such as Javascript and Python.

Proto-danksharding is Ethereum’s first attempt at “sharding” technology. This approach breaks the blockchain into small pieces, called mini-shards or mini-chains, designed to process more transactions more cost-effectively.

Although the final version of sharding is still a few years away, Proto-danksharding can help solve Ethereum’s high gas fees in the short term by reducing the fees on the L2 network.

Proto-Danksharding origin?

Proto-Danksharding is named after two Ethereum researchers, Dankrad Feist and Proto Lambda, who proposed the change.

Proto-Danksharding is a necessary condition for the full rollout of Danksharding, which will further simplify data storage and will take several years to achieve.

Also, despite the word "sharding" in the name, neither Danksharding nor Proto-Danksharding is a tradition of "sharding" (or splitting) a database into smaller parts as known in computer science method (the original plan for Ethereum expansion). In a sense, Dencun's introduction of Proto-Danksharding was a serious departure from Ethereum's original roadmap, and it was chosen because it was easier to implement.

The first step in establishing Proto-Danksharding took place in 2022 – the largest “Trusted Setup” ceremony at the time. Named after the researchers (Aniket Kate, Gregory M. Zaverucha, and Ian Goldberg) who created key components of blob storage on Ethereum, thousands of people attended the KZG ceremony, which was collectively generated by the Ethereum community Raw danks are a way of sharding the secret string of random data needed to work.

In the gas-free era of Ethereum, which sectors will benefit the most?

Dencun will make L2 transactions super cheap - almost cost-free, which will push almost all activities on Ethereum to switch to these networks, some projects or protocols may do so by consuming the Gas that users would normally have to bear Fees to incentivize usage (cheaper than paying for marketing!).

After Dencun, L2 will be able to publish data to Ethereum within a dedicated blob space, rather than being forced to pay the higher cost of compressing the data into traditional transactions. In theory, this could help L2 process more data more efficiently, thus reducing costs for end users.

Layer 2 networks such as Arbitrum, Optimism and Polygon will benefit the most from Dencun. These networks help scale Ethereum by bundling users’ transactions and then passing them to Ethereum, where they are settled in bulk. Over the past year, they have become the dominant platform for trading on Ethereum, amassing multi-billion dollar pools and consistently boasting higher transaction volumes than the main Ethereum chain.

Proto-danksharding will also benefit a new class of blockchains entering the competition with Ethereum, called the data availability (DA) layer.

DA layers such as Celestia, EigenDA, and Avail help networks store large amounts of data; L2 often uses them to store transaction data. Proto-danksharding can reduce the cost of downloading DA data.

Polygon co-founder Jordi Baylina previously said, “The cost should be lower, mainly because it is a supply and demand issue. Your supply is larger and the data availability on Ethereum will be greater, so the cost should be lower. .How much? We don’t know, it’s hard to predict.”

Optimism Karl Floersch, CEO of OP Labs, a major web development company, said: “Scalability is the fundamental unlock that enables permissionless collaboration between developers across projects and teams. With EIP-4844 and Dencun, the entire Developers in the Ethereum ecosystem can build together more seamlessly."

He said the upgrade "will enable a loosely coordinated group of developers to truly build systems that deliver holistic experiences that will Subvert the top-down, centrally planned platform user experience that we were used to before."

L2 Transaction Data

According to L2Beat data, the average transaction volume per second (TPS) of the L2 network in the past seven days was 93.18, while the average transaction volume per second (TPS) of Ethereum was 14.42 , the L2 Scaling Factor multiple is approximately 8.36.

L2fees’ data also shows that the average cost of sending ETH on Arbitrum is $0.24 and the cost of exchanging tokens is $0.67. Optimism costs $0.47 and $0.92 respectively, while Polygon costs $0.78 and $2.85.

Fidelity’s report on this upgrade pointed out that L2 fees account for approximately 10% of the total L1 fees. The money manager said the ratio is expected to "decline significantly" following the upgrade.

After Dencun, Ethereum developers will begin to address content for the next upgrade, now called Electra Prague (Petra).

As of now, the developers have not decided what will be included in the package, but one of the most recognized upgrades is called "Verkle Trees", a new type of data category that helps node storage Large amounts of data. The development of VerkleTrees is ongoing, and Buterin has stated that individual stakers and network nodes of Ethereum will benefit from the deployment of VerkleTrees.

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