Ethereum is a distributed blockchain platform for smart contracts and space-divided applications founded by Vitalik Buterin. Ethereum comes at 2nd most important and valuable cryptocurrency after Bitcoin, within 2 years of its release. The Ethereum network gained a lot of interest around the world when China claimed that it is the best blockchain network ever created. Ether (ETH) is a native cryptocurrency used in all transactions in the Ethereum blockchain.
On March 13, 2024, Ethereum is set for a major upgrade called Dencun, named after Cancun and Deneb upgrades. This hard fork is all about making Ethereum better in terms of how much it can handle, how safe it is, and how easy it is to use. One big change is EIP-4844, which focuses on something called proto-danksharding. This should make the network work better and cheaper for users.
Dencun is like combining the good parts of previous upgrades, like Shanghai. It's all about making Ethereum stronger for apps and making it nicer for people to use.
The upgrade brings together improvements from both Cancun and Deneb upgrades. This means making changes to how things are done when transactions happen and how the network decides what's valid. With Dencun, Ethereum aims to grow and handle more transactions smoothly.
Increase Scalability:- The Dencun upgrade of Ethereum aims at improving and increasing the scalability of the Ethereum blockchain to handle the greater volume and transactions on the platform without compromising the performance of the Blockchain.
Layer 2 Incorporation:- The Dencun upgrade focuses on streamlining and incorporating the layer 2 solution into the Ethereum Blockchain ecosystem to reinforce Ethereum’s capabilities for decentralized applications and smart contracts for making the Platform consumer-friendly.
Lowering Gas Fees:- The Dencun upgrade concentrates on reducing the high transaction cost on the platform to make it cost-effective with better performance and increasing reliability so that there should be an increase in traffic on the platform.
Data Efficiency Enhancements:
An upgrade (Proto-dank sharding - EIP-4844) introduces the concept of data blobs, particularly boosting throughput and efficiency for Layer 2 solutions.
Smart Contract Optimization:
Enhanced temporary data storage (EIP-1153) within smart contracts now includes specialized opcodes to clear intermediate data after transactions, effectively reducing the burden of permanent storage.
Measures such as EIP-6780 aim to enhance the stability and predictability of smart contracts by imposing restrictions on certain functions like SELFDESTRUCT.
Streamlining memory management within the Ethereum Virtual Machine (EVM) is the focus of EIP-5656, resulting in more efficient processing of smart contracts.
Reduced Reliance on External Sources:
To minimize dependence on external oracles, EIP-4788 integrates Beacon Chain's block roots directly into a smart contract, effectively creating an internal oracle for smart contracts to access the consensus state.
Validator Management Improvements:
Enhancements like EIP-7045 extend the capacity for including validator attestations, improving efficiency within the Beacon Chain.
EIP-7044 simplifies the exit process for validators, ensuring their actions remain valid across potential future forks.
EIP-7514 sets a reasonable churn limit for Ethereum validator activations, maintaining stability in the validator set.
Transparent Blob Fee Management:
The introduction of EIP-7516 brings the BLOBBASEFEE opcode, empowering smart contracts to access current base fees for data blobs directly on-chain. This capability assists in managing and predicting data blob costs efficiently within rollup contracts.
Enhanced Scalability: The Dencun upgrade aims to boost Ethereum's scalability, allowing it to handle increased transaction volumes without compromising performance. This is crucial for accommodating growing user demand and fostering widespread adoption of decentralized applications.
Seamless Layer 2 Integration: By streamlining and integrating layer 2 solutions, Dencun enhances Ethereum's capabilities for decentralized applications, making the platform more user-friendly and accessible. This integration opens up new possibilities for developers and users alike, driving innovation within the ecosystem.
Reduced Transaction Costs: Dencun targets high transaction costs on the Ethereum platform, making transactions more cost-effective while ensuring better performance and reliability. Lowering gas fees encourages increased participation and activity on the network, promoting its growth and sustainability.
Improved Smart Contract Efficiency: The upgrade introduces various improvements to smart contract efficiency, including enhanced temporary data storage and streamlined memory management. These optimizations increase the efficiency of processing smart contracts, ultimately improving the overall user experience and facilitating smoother interaction with the Ethereum blockchain.
Enhanced Validator Management: Dencun introduces improvements in validator management, simplifying the exit process, extending capacity for validator attestations, and setting reasonable churn limits. These enhancements ensure the stability and integrity of the validator set, crucial for maintaining the security and reliability of the Ethereum network.
As JP Morgan and Chase highlighted Ethereum's Dencun Upgrade is one of the major factors in the ongoing Bull run in the crypto market is one of the major implication of Dencun upgrade. The other implication includes the improvement in the efficiency and effectiveness of Smart Contracts in the Ethereum Blockchain further it increases the security in the Decentralized applications which are prone to security breaches and losses as highlighted by Immunefi’s recent report.
The Ethereum Dencun Upgrade showcases Ethereum's commitment to innovation and ongoing development. Through enhancements in security, network optimization, and scalability achieved via proto-danksharding, Dencun is set to significantly bolster Ethereum's position as a leading blockchain platform. With the mainnet launch scheduled for March 13, 2024, anticipation is high within the Ethereum community regarding the benefits this upgrade will bring to developers, users, and the entire ecosystem.
