What is Dencun? Everything About Ethereum Cancun-Deneb Upgrade

What is the Ethereum Cancun-Deneb (Dencun) Upgrade?

Since its launch, Ethereum has undergone multiple network upgrades to address scalability, efficiency, and security challenges. These upgrades typically take the form of hard forks focusing on specific aspects of the blockchain. The Ethereum Cancun-Deneb upgrade, commonly referred to as Dencun, represents the next crucial milestone for the world's second-largest blockchain network.

Ethereum co-founder Vitalik Buterin announced in early 2024 that the "rollup scaling upgrade (Dencun)" had been successfully implemented. This significant milestone aims to improve throughput and reduce transaction costs, benefiting the network's growing Layer 2 ecosystem.

Dencun seeks to enhance blockchain scalability through proto-danksharding. The Cancun and Deneb upgrades will work in tandem to strengthen the efficiency and security of the Ethereum network. While Cancun upgrades Ethereum's execution layer, Deneb addresses the consensus layer, creating a comprehensive improvement to the network architecture.

The Dencun upgrade focuses on optimizing Ethereum's execution layer, laying the groundwork for implementing complete data sharding on the network as part of Ethereum's long-term technical development strategy. Ethereum's co-founder mentioned that through the Dencun upgrade, the network will concentrate on eliminating scalability bottlenecks.

This upgrade signifies the initialization of the "Surge phase" in Ethereum's blockchain layer roadmap. The goal is to achieve mass adoption and enhance performance through Layer 2 rollups without compromising decentralization. By implementing these improvements, Ethereum aims to maintain its position as a leading platform for decentralized applications while addressing the growing demands of its user base.

When Was Ethereum Cancun Released?

The highly anticipated Ethereum Cancun upgrade was completed in the first quarter of 2024. Vitalik announced on March 13 that the "rollup scaling upgrade" (Dencun) had been finalized, explaining that the next objective would be Verkle Trees (staking structure improvement).

The initial plan scheduled the release for October 2023, but engineering complexities caused the upgrade to be postponed. This delay allowed developers to conduct more thorough testing and ensure the stability of the new features being introduced.

The Dencun upgrade was executed on the Goerli testnet on January 17, 2024, and transitioned to the Sepolia testnet on January 31, 2024. These testnet implementations allowed developers to identify and resolve potential issues before the mainnet deployment, ensuring a smoother transition for the entire Ethereum ecosystem.

Ethereum Dencun EIP Explained

Ethereum Improvement Proposals (EIPs) represent a series of recommended updates within Ethereum upgrades. These proposals focus on enhancing blockchain scalability, increasing efficiency, and improving security across the Ethereum ecosystem. The Dencun upgrade incorporates several critical EIPs:

• EIP-1153: Designed to optimize data storage within the Ethereum ecosystem. It introduces two EVM opcodes designed to make gas fees more economical. These opcodes are configured to automatically delete at the end of each transaction, reducing storage costs and improving efficiency.

• EIP-4788: Exposes Ethereum's Beacon Chain data to the execution layer by storing it in smart contracts. This aims to strengthen network architecture and improve security and functionality by enabling better communication between consensus and execution layers.

• EIP-4844: Proto-danksharding facilitates cheaper transactions by providing temporary data blobs for rollup use. This represents the most significant change in the Dencun upgrade, directly addressing transaction cost concerns.

• EIP-5656: Adds MCOPY, enabling memory copying in the Ethereum Virtual Machine in a simpler and cheaper way for better performance. This optimization reduces gas costs for smart contract operations.

• EIP-6780: Updates the self-destruct code to limit smart contract termination through code while strengthening user data protection and fund security. This change enhances the overall security posture of the network.

• EIP-7044: Removes restrictions on the reliability of validator exit messages, improving the flexibility of validator operations.

• EIP-7045: Increases the time available for including attestations as part of Beacon Chain blocks, enhancing network participation.

• EIP-7514: Limits the number of validators that can be activated during one epoch, preventing rapid validator set growth.

• EIP-7516: Introduces the BLOBBASEFEE opcode, which returns the blob base fee value of the executing block, providing transparency for blob transaction costs.

What are EIP-4844 and Proto-Danksharding?

EIP-4844, also known as proto-danksharding, is one of the EIPs scheduled for implementation in the Ethereum Cancun-Deneb upgrade. Ethereum users are expected to pay lower transaction fees for Ethereum Layer 2 transactions through this improvement.

The Ethereum network has undergone multiple upgrades over the years to maximize capacity. In recent years, developers have been working to provide effective solutions to two problems: high gas fees and transaction volume limitations.

Sharding, a method of improving performance by dividing databases into smaller sizes to manage specific data segments, has been proposed as a long-term solution, but it is time-consuming and complex. Proto-danksharding offers a better interim solution that can be implemented more quickly.

The proposed modification to the Ethereum network is designed to significantly lower transaction fees and increase throughput. Proto-danksharding, a prototype of danksharding, is a temporary modification introduced before full danksharding implementation in the future.

Danksharding and proto-danksharding are core elements of Ethereum consensus layer upgrades and the most important mission to optimize Ethereum's potential. Danksharding refers to a type of sharding that occurs in the final stage of the Ethereum 2.0 upgrade. It focuses on improving transaction processing and simplifying data storage to optimize data availability and management within the Ethereum system.

To achieve proto-danksharding, a transitional stage of the danksharding strategy, a new transaction type with unique features allowing data blobs will be introduced. Essentially, EIP-4844 attaches blobs to transaction blocks. Through danksharding, Ethereum is expected to dramatically scale by increasing TPS to approximately 100,000.

As mentioned earlier, the Cancun upgrade will focus on optimizing the execution layer (Layer 1). This will become the foundation for ultimately implementing complete data sharding according to Ethereum's long-term development strategy.

What is Sharding?

Sharding refers to dividing blockchain databases into smaller pieces. The goal is to increase overall efficiency by distributing the processing load across multiple nodes. Through the Cancun upgrade, a new form—proto-danksharding—has been introduced as an interim step toward full sharding implementation.

The Importance of Proto-Danksharding

As explained earlier, proto-danksharding is a crucial step for maximizing operations, optimizing data management, and reducing transaction costs within the Ethereum ecosystem. It addresses the fundamental challenges that have limited Ethereum's growth.

Proto-danksharding presents a viable solution to Ethereum blockchain's trilemma of security, decentralization, and scalability. These three elements have hindered Ethereum from operating efficiently at low costs, creating a constant tension between competing priorities.

Proto-danksharding is a critical component in upgrading Ethereum's consensus layer and is expected to enhance Ethereum's proficiency and scalability. It introduces temporary storage space, allowing users to load data into blobs attached to transaction blocks at lower costs.

Additionally, data is deleted after a certain period, saving space and reducing transaction costs. Therefore, more transaction volume can be achieved cost-effectively through Layer 2 rollups. Proto-danksharding, an essential component of EIP-4844, is a key element of future Ethereum scaling efforts. Furthermore, it has now been officially integrated into EIP through the Ethereum Cancun upgrade.

Benefits of Ethereum Cancun

Ethereum Cancun promises many benefits not only for Ethereum's growing user base but also for developers working within the ecosystem.

• Enhanced Security: This update promises a more secure and user-friendly experience. It will revolutionize transaction processing and protect user data through improved cryptographic methods and validation mechanisms.

• Improved Cross-Chain Communication: This upgrade enables easier, more secure, and seamless interaction between different networks, supporting interaction with Layer 2 solutions and fostering greater interoperability.

• Improved Scalability: The proposed revisions will address scalability constraints, significantly increasing transaction throughput per second within the Ethereum network, enabling the platform to handle greater user demand.

• Improved Data Availability and Storage: This update aims to optimize Ethereum's data storage and reduce storage costs, improving efficiency and making the network more sustainable in the long term.

• Reduced Operating Costs: This update aims to lower gas fees per transaction on the Ethereum blockchain through blob-carrying transactions, making the network more accessible to users.

• Increased Transaction Processing Speed: Ethereum's transactions per second have increased. This move is expected to facilitate faster and more traffic on the Ethereum network, improving user experience.

• Encourages Technological Innovation: The Dencun upgrade lays the foundation for future technological development, opening the way to improve operations and increase Ethereum's competitiveness in the evolving blockchain landscape.

Risks of Ethereum Cancun

Like previous upgrades, the Dencun upgrade carries several risks that must be carefully managed.

• Impact on Current Smart Contracts: Introducing new features and changes, such as innovative data storage technologies, may cause compatibility issues with existing smart contracts, requiring developers to update their applications.

• Integration Challenges: While the Ethereum Cancun upgrade aims to increase data storage efficiency, data migration may not proceed smoothly. This could negatively impact ongoing operations and require careful coordination across the ecosystem. Therefore, proper planning and information sharing before execution are crucial to minimize disruption.

Ethereum's Dencun Upgrade and Potential Impact on Validators

Ethereum's Dencun upgrade is expected to have a significant impact on validators. It promises improvements to the Ethereum network and is expected to address related issues within the system, such as high gas fees and scalability constraints. These improvements will make Ethereum transactions more economical, benefiting both validators and users.

Dencun's upgrade focuses on the Proof of Stake consensus algorithm, making it more robust to increase efficiency and attract more validators. By improving the validator experience and economics, the network aims to strengthen its security model.

Through improved throughput, scalability, and efficiency, the network will be able to attract and support more users while protecting the security of assets. Additionally, with Ethereum's continued evolution, this upgrade will lay the foundation for future innovation, considering the demands of the constantly changing blockchain field.

Deneb Upgrade: Setting Up to Strengthen the Ethereum Ecosystem

The modifications proposed by Ethereum Cancun-Deneb address scalability, efficiency, and security, with the main goal of lowering transaction fees and increasing Ethereum's overall value. Modifications will be applied through various EIPs designed to realize Ethereum's broad vision of a stronger, more scalable, and cost-effective Ethereum network.

Ultimately, this upgrade will strengthen the Ethereum ecosystem and lay the foundation for the blockchain's future development strategy. Without a doubt, the Dencun upgrade will solidify Ethereum's position as a leader in innovation in the digital asset field and a key player in decentralized applications, ensuring its continued relevance in the competitive blockchain landscape.

FAQ

What is Dencun upgrade? What do Cancun and Deneb refer to respectively?

Dencun upgrade combines Cancun and Deneb upgrades. Cancun upgrades Ethereum's execution layer, while Deneb upgrades its consensus layer. Together they enhance network scalability, reduce transaction costs, and improve overall performance.

What are the main improvements of the Dencun upgrade? What impact does it have on Ethereum?

Dencun upgrade primarily enhances Ethereum's performance and security, especially for Layer 2 solutions. It significantly reduces transaction fees and improves network efficiency by implementing proto-danksharding, making Ethereum faster and more scalable for users and developers.

When will the Dencun upgrade launch? How does it reduce transaction fees?

Dencun launched on January 17, 2024. It reduces transaction fees through EIP-4844 (Proto-Danksharding), which introduces blob data and expands block space, significantly lowering Layer 2 transaction costs.

What is Proto-Danksharding (EIP-4844) in the Dencun upgrade?

EIP-4844, Proto-Danksharding, introduces blob transactions to reduce Layer 2 fees and enhance Ethereum scalability. Data temporarily stores in beacon nodes at significantly lower costs, serving as a precursor to full Danksharding.

How does the Dencun upgrade help Layer 2 solutions?

Dencun upgrade increases Ethereum's data storage capacity, significantly reducing transaction costs for Layer 2 solutions. This enables faster, cheaper transactions while maintaining security and decentralization.

Do ordinary Ethereum users need to make any preparations for the Dencun upgrade?

No special preparations needed. The Dencun upgrade applies automatically to the network without affecting daily transactions. Regular users can continue normally. Only developers and node operators need to take action. Simply ensure your software is up to date.