Key Takeaways:
- Check out what Ethereum’s Dencun upgrade brings to the network and how it contributes to the network’s long-term vision.
- Explore the various use cases that the latest upgrade to Ethereum will bring to the blockchain, elevating its success level.
- Look how this improvement can bolster the prospects for Ethereum token development for aspiring business owners.
The blockchain space has been subject to a lot of game-changing improvements that have enhanced its prospects in the global market. They have also elevated its stature as a viable alternative technology to conventional centralized norms, giving the control lever to the end user. In particular, whatever happens in Ethereum has become a sensational topic due to the network’s huge community presence and market longevity. The layer-1 blockchain has rolled out its Dencun Upgrade, which is set to revitalize several aspects of the network. This blog exclusively focuses on Ethereum’s latest upgrade and how it could affect various Ethereum development services.
What is Ethereum’s Dencun Upgrade All About?
On 14 March 2024, a monumental milestone was achieved in the Ethereum network – The layer-1 blockchain successfully underwent its latest upgrade labeled “Dencun,” a combination of Deneb and Cancun. This update has been a significant one ever since the network transformed into a Proof-of-Stake (PoS) blockchain from a Proof-of-Work (PoW) one during the Merge in 2022.
- The Dencun upgrade has modifications in both the consensus and execution layers, shown by the names Deneb and Cancun, respectively. The upgrade comes with the implementation of a plethora of Ethereum Improvement Proposals (EIPS) that enhance Ethereum’s functionality in diverse ways, as we will see in a later section.
- The Dencun upgrade’s spotlight is on layer-2 networks running on Ethereum, as opposed to the mainnet itself, as demonstrated by the addition of Proto-danksharding, a new category for transactions. Such scale of the upgrade technically makes it a hard fork, although no secondary blockchains will be formed.
- While the upgrade has not impacted Ether ($ETH) prices anyway (ETH has been trading in the region of $3600 as of writing), the long-term effects could be seen across the ecosystem in the coming months as layer-2 networks adapt to the changes. With that being said, developers say there will be negligible impact on the Ethereum mainnet due to this upgrade.
Diving into the Details of Dencun
It’s time to delve into the intricate details of the Dencun upgrade that makes the Ethereum ecosystem a better place for the decentralized economy. As we saw earlier, proto-danksharding, a process focusing on creating smaller shards for data storage, is the main element of this update.
- The process enables new places for storing data on the blockchain, known as Blobs, that serve as temporary storage mediums for layer-2 transactions. These blobs work separately from the mainnet, meaning transactions processed here are separate from those on the main blockchain. These spaces tend to increase the data availability in the Ethereum mainnet, ultimately reducing transaction costs.
- The Dencun upgrade is part of the Ethereum network’s Surge phase, where developers will prioritize improving the blockchain’s scalability and transaction throughput (in the order of 100,000 TPS). The update is a blessing for rollup-based layer-2 blockchains like Polygon, Arbitrum, and Optimism. By doing so, Ethereum looks to foster a better ecosystem for dApps by offering high-quality infrastructure bolstered with robust architecture.
- The Deneb part of the upgrade improves consensus and security by updating the Proof-of-Stake (PoS) mechanism. The Cancun part of the upgrade emphasizes enhancing scalability and optimizing the gas fees on the Ethereum blockchain. Together with proto-danksharding, the update brings a revolutionary step for the network that has been facing tough competition from multiple layer-1 blockchains.
Ethereum Improvement Proposals (EIPs) Implemented in the Dencun Upgrade
As we said earlier, numerous Ethereum Improvement Proposals (EIPs) have made it to the Dencun upgrade, making it one of the most followed events in the global blockchain community. Each of them benefits different classes of people involved in the network, which together unleashes an attempt to make the blockchain thrive.
- EIP-7514: This focuses on managing the influx of validators on the Ethereum blockchain, limiting new additions to eight per interval to avoid congestion.
- EIP-1153: This introduces transient storage to the Ethereum Virtual Machine (EVM), which enhances efficiency and reduces gas costs.
- EIP-4788: This creates a direct channel between the Ethereum network’s execution and consensus layers, boosting safety and efficiency for decentralized applications.
- EIP-4844: This forms the basis for proto-danksharding that enables temporary data blobs to store and process transactions from layer-2 blockchains.
- EIP-6780: This enhances Ethereum’s stability and reliability by restricting access to the SELFDESTRUCT operation to the “creator” smart contract.
- EIP-5656: This introduces the MCOPY operation to the Ethereum Virtual Machine, which facilitates efficient data copying within the network’s memory and enhances efficiency.
- EIP-7044: This simplifies voluntary exiting in Ethereum’s staking provisions, ensuring easier experiences for stakers who had to undergo a lengthy process.
- EIP-7045: This boosts Ethereum’s block confirmation process by extending the time window for validators to attest blocks, enabling smoother processes.
- EIP-7516: This introduces the BLOBBASEFEE operation code to Ethereum, which streamlines transaction processing by ensuring fairer and faster transactions for L2 chains.
Planning to Conduct Ethereum Token Development in the Rejuvenated Network?
How Can Ethereum Token Development Projects Benefit from Dencun?
So far, we have discussed almost everything about the Dencun upgrade that has put Ethereum in the spotlight. But, for an average user or a business-minded individual, the obvious question pops up – How does the Dencun upgrade benefit my needs? Well, if you are looking for some answers, this is the right place to look out for as we explore how Ethereum token development projects can gain heftily in the long run due to the Dencun upgrade.
- While Ethereum-based projects cannot benefit from the starring aspect of the Dencun upgrade (proto-danksharding), ventures based on layer-2 networks built on the network can benefit from reduced gas costs. Market experts predict there will be heavy competition between layer-2 providers to attract projects toward their ecosystems.
- Still, with other improvement proposals coming into the act, projects running on the Ethereum mainnet can benefit from enhanced scalability and smart contract security. Those two points have been among some of the pressing needs of the Ethereum ecosystem, and the newly approved EIPs can bring a sign of relief for ventures.
- Ethereum token projects can gain from EIP-4844 as valuable block space is preserved from batched transactions from layer-2 networks that tend to congest the main network at times. The act of enabling transient storage on the Ethereum Virtual Machine also contributes to the possibility of token-based ventures in the network.
Conclusion
Therefore, we have seen what the Dencun upgrade brings to Ethereum’s ecosystem and the Web3 market as a whole. With the cryptocurrency space set to experience a bullish phase soon, this upgrade is seen as a vital factor in making Ethereum the Web3 leader again, as several blockchains compete to occupy the lucrative spot. If you’re planning to leverage the benefits of the Dencun upgrade, tap into our professional Ethereum development services to work on both Ethereum mainnet and dependent layer-2 networks to unleash powerful projects.
