Ethereum’s next upgrade “Dencun”, what is the importance and merit?

Ethereum’s next upgrade

Ethereum (ETH) blockchain developers have compiled a list of improvement proposals (EIPs) for the next upgrade, Dencun, at a meeting on the 8th.

The upgrade is scheduled to be introduced later this year, and the name “Dencun” comes from the execution layer upgrade “Cancun” and the consensus layer upgrade “Deneb” respectively.

The biggest planned change is EIP-4844 “Proto-Danksharding”. This aims to reduce the transaction cost of transferring data from Layer 2 (L2) to Layer 1 (L1), resulting in a significant reduction in L2 transaction fees.

This will enable up to 100x reduction in transaction fees for Layer 2 scaling solutions such as Optimism (OP) and Arbitrum (ARB).

Other EIPs to be implemented in “Dencun” include the following.

• EIP-1153 – Introduce new opcodes used for temporary data storage and reset after each transaction to reduce storage costs and improve overall network efficiency.
• EIP-4788 – Added new data to Ethereum Execution Layer called “Beacon Chain Block Root”. This allows proof of values ​​contained in the state of the beacon chain block, such as staking balances.
• EIP-6780 – Improves security and efficiency by eliminating the SELFDESTRUCT opcode (the ability to terminate smart contracts).
• EIP-5656 – Introduce minor code changes related to the Ethereum virtual machine.

No specific hard fork date has been set yet, but it is expected to launch by the end of 2023.

connection:What is Blockchain Layer 2? | Explanation of types, points of interest, and typical networks

Importance of EIP-4844

Layer 2 is an additional layer that improves the transaction processing capacity of the blockchain, solving the problem of slow processing speed and rising fees when all transactions are recorded on the main chain like Ethereum. By accepting transactions from the main chain and returning the compressed data to Layer 1, it plays a role in increasing the number of transactions processed per second.

Layer 1 confirms the legitimacy of transactions and ensures security. Since Layer 2 is implemented as an additional layer, it is possible to support multiple Layer 2s without having to change the existing Layer 1 structure, a feature that has led to many new projects underway.

However, even with the introduction of the rollup, the fees could be higher compared to some cryptocurrency chains other than Ethereum, so further cost reductions were sought. EIP-4844 was designed to solve that problem.

Specifically, EIP-4844 “Proto-Dunk Sharding” introduces a low-cost way to add data to Ethereum blocks from Layer 2 solutions. This improvement proposal is also an intermediate step to further optimize layer 2 scaling.

EIP-4844 will introduce a dedicated transaction (blob transaction) that allows writes from L2 to L1. This transaction involves a large amount of off-chain data (blobs) that the EVM (Ethereum Virtual Machine) cannot access. Data in L2 written to L1 only needs to be accessible for a certain period of time, after which the blob is erased. This allows the nodes of the network to use less disk space, increasing efficiency.

The dunk sharding step expands the above blobs to 64. This is expected to be of great help when Ethereum implements sharding (a method of dividing the blockchain) in the future.

In sharding, blob transactions are distributed and verified per shard. This promises to allow Ethereum to support hundreds of individual rollups and process millions of transactions per second. As such, the “Dencun” upgrade is an important step in solving Ethereum’s scaling problem and achieving faster transaction speeds and lower costs.

connection:Vitalik Introduces Ethereum Scaling Solution EIP4844

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