The upgrade is expected to significantly reduce the transaction costs of Ethereum-based layer-2 protocols and enhance the network’s scalability and speed.
The highly anticipated Dencun upgrade will be launched on the Ethereum mainnet on March 13, and the crypto community is abuzz with excitement. The upgrade is expected to significantly reduce the transaction costs of Ethereum-based layer-2 protocols and enhance the network’s scalability and speed.
What to Know About The Dencun Upgrade
The Dencun upgrade is one of Ethereum’s biggest steps in transitioning from a Proof-of-Work (PoW) consensus mechanism to a Proof-of-Stake (PoS) network. The upgrade follows the Shapella upgrade in April 2023, which occurred after the Merge, an event that joined the PoW Ethereum mainnet with the PoS beacon chain.
Dencun will use an approach called proto-danksharding or ephemeral blobs (EIP-4844) to scale Ethereum’s layer-2 rollup efficiency. Proto-danksharding aims to reduce storage demands by implementing temporary storage space and providing access to off-chain data. This process will cut layer-2 protocol transaction fees by 10x or more, enabling the Ethereum network to have higher transactional throughput, possibly processing up to 100,000 transactions per second.
The event is a hard fork encompassing nine Ethereum Improvement Proposals (EIPs). The name of the upgrade is a combination of the Cancun upgrade of Ethereum’s execution layer and the Deneb upgrade on the consensus layer.
The upgrade was initially scheduled to go live in October 2023, but certain circumstances caused developers to delay the launch. The event was moved to Q1 2024 with a three-phase implementation plan.
ETH Rallies Amid Dencun Anticipation
Dencun was first deployed on the Goerli testnet on January 17. Although the launch experienced some issues during this phase, developers eventually finalized the upgrade. The second deployment was on January 30 on the Sepolia testnet. The event was successful and void of issues.
On February 7, Ethereum developers announced the launch of the Dencun upgrade on the Holesky testnet. It is worth mentioning that the Ethereum Foundation intends to cease support for the Goerli testnet one month after the upgrade goes live on the Ethereum mainnet.
Meanwhile, ether (ETH) has rallied significantly amid excitement and anticipation of the upcoming upgrade. The crypto asset has recorded a 60% rise in the past month and 15% gains over the last seven days. At the time of writing, data from Cryptocurrencies to Watch showed that ETH was trading above $4,000.