Ethereum, the world's second largest blockchain network, has long faced the scalability problem. Rapid user growth and the deployment of DeFi and NFT applications have overloaded the network, leading to high transaction fees and slow processing speeds. The Dencun upgrade was born with the goal of solving these challenges, opening a new era for Ethereum with outstanding Layer 2 scalability.
From Vitalik Buterin's vision comes the challenge of scalability
The idea of Ethereum was conceived by Vitalik Buterin in late 2013, with the desire to create a blockchain that goes beyond conventional payment systems. Ethereum has become the foundation for an explosion of groundbreaking applications such as smart contracts, NFTs, and DeFi.
However, rapid user growth has caused the network to become overloaded, causing gas fees to skyrocket. In January 2021, sending an ERC-20 token could cost more than 60 USD, a simple Uniswap transaction ranged from 60 to 100 USD, and a complex smart contract interaction could cost up to 100-200 USD. USD.
Graph from YCharts showing Gas costs on Ethereum over the past few years Layer 2 Solution: Efforts to offload the main network
To solve the problem of gas fees, Ethereum developers have continuously searched for solutions, including Layer 2 (L2). L2 acts as a second layer built on Ethereum, allowing for off-chain transaction processing or transaction aggregation before confirmation on the main network.
However, L2 also has some limitations such as: increased complexity for users when having to learn about different chains and technologies, risk of centralization if the number of validators is limited, and fees Data transfer to the main network is still high.
Dencun: A New Step for Ethereum Scalability
The Dencun upgrade, which includes Shanghai (April 2023) and Cancun-Deneb, marks a new step in Ethereum's development.
Shanghai focuses on optimizing the Ethereum Virtual Machine (EVM) and introducing protocol improvements.
Cancun-Deneb (Dencun) upgrades the execution layer (Cancun) and consensus layer (Deneb) of the network, to provide a more powerful infrastructure for DApps and smart contracts, thereby enhancing openness spacious and secure.
Ethereum's Dencun version upgrade roadmap:
Ethereum Proto-danksharding Dencun Version Upgrade Roadmap: The Key to Layer-2 Scalability
One of Dencun's highlights is EIP-4844, which introduces danksharding and proto-danksharding.
Danksharding proposes a new approach to scaling Ethereum by dividing the blockchain into smaller units called “blobs”. These blobs act as containers for transaction data and smart contracts. By processing these blobs in parallel, the network can handle significantly larger transaction volumes, improving scalability and overall throughput.
Blobs, short for “binary large objects”, are collections of data in binary form, which do not necessarily follow a specific file structure. In the Ethereum network, blobs act as independent segments, contributing to increasing the overall processing capacity of the entire network.
Proto-danksharding, implemented through EIP-4844, builds on danksharding by introducing additional storage space in the Ethereum network. This increased storage capacity allows for more efficient processing of larger data sets, further enhancing scalability.
How does Proto-danksharding improve Layer-2 scalability?
Blob structures as additional memory in the network, providing a more cost-effective alternative to traditional call data. Unlike call data, which stores information permanently on the main network, blobs can temporarily store large blocks of data alongside regular transactions. This data will be inaccessible after a certain period of time (usually three weeks).
Blobs can contain large amounts of data, including transaction details, smart contract code, and related metadata. This allows for efficient processing of significant volumes of data within each blob. By allowing L2 solutions to store data in blobs instead of expensive call data, EIP-4844 paves the way for faster transactions and significantly reduced fees.
Vitalik Buterin estimates costs will decrease by up to 60-fold, with 125 kilobytes of call data costing around 0.06 ETH (about $3.34 for a similarly sized blob).
Data tracking platform Dune Analytics has revealed that average transaction fees on L2 have also plummeted.
Benefits of Dencun: Reduce fees, increase speed, optimize experience
The introduction of proto-danksharding offers the potential to significantly reduce costs for Layer-2 solutions. Blobs serve as temporary storage containers, reducing processing costs and ultimately leading to lower transaction fees for Ethereum users.
With Dencun, Ethereum users can expect:
Faster transactions: Transaction processing is optimized, providing fast processing speed.
Lower transaction fees: Proto-danksharding helps reduce data storage costs, thereby reducing transaction fees.
More stable and secure network: Upgrade network security and stability, ensuring a strong foundation for interactions.
The future of Ethereum after Dencun
Dencun is expected to create big changes for Ethereum. It not only solves the problem of transaction congestion on the main network and reduces gas fees, but also reduces transaction fees on Layer-2 solutions. This could encourage users to stay within the Ethereum ecosystem, reducing the appeal of migrating to other blockchains.
Dencun will likely stem the tide of user migration from Ethereum to other blockchains. It can promote the development of DeFi, NFT, GameFi, SocialFi and metaverse applications built on Ethereum. Additionally, the network will lower the barrier to entry for new users. These factors could lead to wider adoption and bring Ethereum closer to the financial mainstream.
Conclude
The Dencun upgrade marks an important milestone in Ethereum's development journey. By solving the scalability dilemma, Ethereum is moving closer to its goal of becoming the world's leading blockchain platform, ready for the future explosion of applications and users.
