The Ethereum team is preparing Dencun. Scheduled for the first quarter of 2024, this major upgrade should improve the blockchain scalability Ethereum.
Goldman Sachs is excited about this future update
According to a note from Goldman Sachs published last Thursday, this update is considered the next step in Ethereum’s evolution as a scalable settlement layer.
Dencun’s main objective is to improve the availability of data for layer 2 rollups. And this, thanks to proto-danksharding. This should result in a reduction of transaction costs for end users.
đź—“ Ethereum’s Dencun upgrade will likely take place in Q1 2024.
A note from Goldman Sachs specifies that this upgrade will improve the scalability of the blockchain using rollups, optimize gas fees and improve network security. pic.twitter.com/kdmwygfHg9
— Goku 🗞 (@Crypto__Goku) October 27, 2023
To better understand, it is essential to clearly distinguish between layer 1 and layer 2 of Ethereum. Layer 1 represents basic infrastructure of the blockchain. For its part, layer 2 brings together off-chain systems or some distinct blockchains built on top of layer 1.
Rollups process transactions on another, faster blockchain or layer 2, then send the data back to the parent blockchain. The cost of this process is much lower than the classic transaction via layer 1.
“The main impact of Dencun will be to increase the availability of its data for layer 2 rollups via proto-dankshardin. This will result in a reduction in rollup transaction costs which will be passed on to end users,” notes Goldman Sachs.
Additionally, Ethereum developers recently agreed on the full scope of the “Dencun” network upgrade. This update, which actually corresponds to a hard fork, includes five suggestions for improvement of Ethereum (EIP).
A technical point on this famous “Dencun” upgrade
L’EIP-4844better known as proto-danksharding is therefore at the heart of Dencun. This functionality will indeed allow scale the blockchain freeing up more space for data blocks. However, this upgrade does not come alone. It is accompanied by four other major EIPs. These also aim to increase data storage capacity and reduce gas costs on the network.
- EIP-1153 : Reduced on-chain data storage fees. This should increase the space in the blocks.
- EIP-4788 : Improved the design of bridges and staking pools.
- EIP-5656 : Added minor changes related to the Ethereum virtual machine.
- EIP-6780 : Elimination of code that could terminate smart contracts.
A double upgrade
Although the exact date of the hard fork remains to be determinedit is expected to be deployed by the first quarter of 2024.
One includes concurrent upgrades on both sides of the blockchain. The upgrade “Cancún” will take place on the execution layer, where all the protocol rules reside. For its part, the consensus layer, responsible for validating blocks, will undergo its own update, known as “Deneb”.
This upgrade promises to bring significant improvements to the Ethereum blockchain. The goal is to reduce transaction costs, increasing scalability and while strengthening network security. This is a major breakthrough that will continue to strengthen Ethereum’s position as a central player in the crypto, blockchain and decentralized finance industry.
Sources: Coindesk
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