• Ethereum developers plan to implement the ‘Dencun’ upgrade later this year

• Dencun will significantly enhance the efficiency of level 2 roll-ups.

Following the successful implementation of the Shapella Upgrade, which enabled the withdrawal of staked ETH, Ethereum engineers are already working tirelessly to prepare for another upgrade.

On June 8, developers on the Ethereum (ETH) blockchain gathered and formulated a series of improvement proposals (EIPs) for the upcoming upgrade called Dencun. They plan to implement this upgrade later this year, combining “Cancun” and “Deneb” to represent the execution and consensus layer upgrades.

The main change in the pipeline is the implementation of EIP-4844, also known as “Proto-Danksharding.” The primary objective of this upgrade is to decrease the transaction cost associated with transferring data from Layer 2 (L2) to Layer 1 (L1). As a result, it will substantially reduce transaction fees for L2 scaling solutions like Optimism (OP) and Arbitrum (ARB), potentially achieving up to a 100x reduction in fees.

Exciting EIPs on the Horizon: The “Dencun” Upgrade Lineup

• EIP-1153 – Its work is to introduce new opcodes to enhance temporary data storage, which will reset after each transaction. This measure aims to minimize storage costs and enhance the network’s overall efficiency.
• EIP-4788 –  The Ethereum Execution Layer has introduced a new addition known as “Beacon Chain Block Root.” This addition enables the inclusion of proof for values discovered in the state of the beacon chain block, which includes staking balances.
• EIP-6780 –  Eliminates the SELF-DESTRUCT opcode, which allows for the termination of smart contracts, increasing safety and effectiveness.
• EIP-5656 –  Add minor code modifications pertaining to the Ethereum virtual machine.

There is no specific date for the EIP-4844, but they anticipate launching it by the end of 2023. The developers are currently testing the EIPs for Dencun before finalizing which proposals will be included in the upcoming major hard fork. 

The significance of EIP-4844

Including this EIP brings forth a fresh data layer within the EIP-4844, serving as a point of interaction for both the existing consensus layer and the execution layer. Moreover, the introduction of EIP-4844 will incorporate “data blobs,” which aim to address the increasing transaction costs and alleviate the strain caused by expanding block sizes.

This upgrade will significantly enhance the efficiency of level 2 roll-ups. The smaller size of the blobs will significantly improve data retrieval speed. Furthermore, the non-permanent storage of these blobs potentially contributes to a reduction in gas fees.

When the main chain, like Ethereum, records all transactions, it gives rise to issues of slow processing speed and rising fees. Layer two serves as an additional layer that enhances the transaction processing capability of the blockchain.

Increasing the number of transactions handled per second is extremely important since it receives transactions from the main chain and sends compressed data back to Layer 1 promptly. Additionally, implementing Layer 2 as an additional layer allows for the support of multiple Layer 2s without the need to modify the existing structure of Layer 1. This feature has sparked the initiation of numerous new projects.