Major Ethereum Upgrade Dencun Goes Live on Mainnet
Mitchell Nixon
The eagerly anticipated Dencun hard fork for Ethereum has concluded, marking a significant enhancement to its flourishing Layer 2 ecosystem’s scalability.
Nearly a year following the Shanghai upgrade in April 2023, which facilitated network participants’ ability to unstake their Ether for the first time post the network’s transition to a proof-of-stake model after the Merge, Dencun makes its debut.
The Dencun hard fork integrates nine distinct Ethereum Improvement Proposals (EIPs). The nomenclature of the upgrade combines the Cancun upgrade of Ethereum’s execution layer with the Deneb upgrade of its consensus layer. The first segment, Cancun, concentrates on enhancing transaction management and processing on the execution layer, while the latter, Deneb, endeavours to refine the consensus layer, pertaining to how network participants reach agreement on the blockchain’s state.
Implemented on March 13, it introduces a substantial reduction in transaction costs on Ethereum’s Layer 2 solutions. This is achieved by replacing the gas-intensive calldata with lightweight Binary Large Objects (blobs) through EIP-4844, also referred to as proto-danksharding.
In contrast to calldata, blobs don’t vie for gas within Ethereum transactions and are pruned from the blockchain after approximately 18 days. This enhancement notably enhances data availability and diminishes expenses for Layer 2 rollups. During a live-stream on March 13, Domothy, a researcher at the Ethereum Foundation, highlighted that numerous protocols intend to indefinitely host blob data going forward.
In an interview with CoinTelegraph, James Wo, Digital FInance Group Founder and CEO stated: “[Proto-danksharding] aims to reduce layer-2 transaction fees by enhancing data availability, a crucial move toward establishing Ethereum as a scalable settlement layer.”
Nevertheless, as stated in a report dated March 6 by Max Wadington, a research analyst at Fidelity Investments, the anticipated fee reductions will not impact users of the Ethereum mainnet:
“In the short term, users who wish to benefit from this fee change must sacrifice some decentralisation and security by transacting on L2s instead of Ethereum. This will certainly spur more users to bridge assets elsewhere. However, we strongly believe that transacting on Ethereum for application-specific purposes will still be considered the best option (especially for high-value transactions) in the medium term as L2 platforms continue to mature.”
At the moment, gas fees continue to soar on the Ethereum mainnet, surpassing 72 gwei. Etherscan data indicates that the average gas fee for a swap stands at $86.15, while non-fungible token sales command an average gas fee of $145.60.