Ethereum’s highly anticipated Dencun upgrade went live on the mainnet on Wednesday at 9:55 AM ET, at the beginning of epoch 269568, for those following on-chain.
According to developers, the upgrade will reduce transaction costs on Layer-2 to the extent that gas fees may become obsolete.
Dencun Goes Live
Apart from lowering transaction costs across Ethereum Layer-2 networks, the Dencun upgrade also massively expands the blockchain ecosystem’s capabilities. Following the implementation of the upgrade, settlement contracts across Layer-2 networks will incorporate it, a process that will take a couple of months. According to one Ethereum developer, once incorporated, gas fees on Layer-2 networks should immediately fall by 75%.
Ethereum developers held a live stream in the hours leading up to the upgrade and discussed different Ethereum Improvement Proposals (EIPs) that would be rolling out with Dencun. They also explained some of the new technologies and terminologies associated with Dencun, especially blobs, which are a new way to organize and send data across the Ethereum network.
Details Of The Upgrade
Dencun is a scalability-focused upgrade that includes EIP-4844, also called Proto-Danksharding. Proto-Danksharding creates a dedicated data channel for Layer-2 on Ethereum, significantly reducing transaction fees on rollups. The upgrade ships a total of 9 EIPs, tying it for the largest single fork in terms of number of improvements shipped. Following the upgrade, most users will begin seeing benefits within hours or days, as data blobs introduced by EIP-4844 significantly slash transaction fees. According to Hannes Graah, a builder at crypto wallet Zeal, this real-world benefit is driving huge anticipation for the upgrade.
“The Dencun upgrade brings us closer to a future where fees are an afterthought, not a dealbreaker. Just as we generally don’t worry about the cost of traditional domestic bank transfers, Web3 users should be able to transact without worrying about fees.”
Major Reactions
Aki Balogh, co-founder and CEO of DLC.Link has compared EIP-4844 to the NoSQL movement of 2010, which removed the constraints of structured SQL data through developments such as MongoDB.
“Giving developers large blobs of temporary data (deleted after 30 days) provides them the opportunity to innovate while not increasing load on the network. Similar to Mongo’s effect, this proposal will help innovation as dApps and chains find new ways to use the temp storage space.”
Gnosis’s head of infrastructure, Philippe Schommers, said that in contrast to scaling in Web2, the new data storage channel does not compromise on decentralization. Gnosis already implemented the Dencun upgrade on Monday.
“When working towards scalability solutions on the blockchain, there are choices that developers have to make to prioritize decentralization. When you look at Web2 infrastructure, it’s easy to see how centralized scalability can be done, but that’s not the path we’re trying to follow.”
A Network-Redefining Upgrade
Ethereum has gone through multiple upgrades, including the hugely significant 2022 Merge which saw the network transition from an energy-intensive Proof-of-Work consensus mechanism to an energy-efficient Proof-of-Stake consensus mechanism. Another prominent upgrade was the Ethereum Shanghai upgrade that unlocked tens of billions of dollars worth of ETH that was staked with the network.
However, developers believe the Dencun upgrade will change the network to a degree not seen before. According to core developer Marius Van Der Wijden, Dencun is a much bigger upgrade than Shanghai,
“I think that this upgrade will have the biggest effect for users of all the Ethereum upgrades yet. Dencun is a much bigger update than Shanghai.”
According to David Silverman, VP of Product and Polygon Labs, Dencun converts Ethereum from a country back road to a four-lane highway in terms of efficiency.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
