January 25, 2024

Dencun Upgrade Paves the Way for 10x Lower Rollup Costs and Faster Ethereum Transactions

The upcoming Dencun upgrade in the Ethereum ecosystem is generating anticipation as it holds the potential to significantly reduce gas fees and enhance transaction speeds, marking a transformative shift.

In a major step toward alleviating gas fees and accelerating transaction speeds, the Ethereum ecosystem is on the brink of a groundbreaking transformation with the imminent introduction of the Dencun upgrade.

Activated on the Goerli testnet on January 17, the upgrade aims to tackle key challenges, particularly in the domain of layer 2 (L2) rollups.

Efficiency boost for Ethereum through Dencun

Dencun’s upgrade incorporates several Ethereum Improvement Proposals (EIPs), with a focus on EIP-4844. This proposal introduces proto-danksharding, a highly anticipated enhancement set to significantly reduce L2 transaction fees.

Alongside EIP-4844, the Dencun upgrade brings changes to both Ethereum's consensus and execution layers, encompassing a total of nine distinct EIPs. Proto-danksharding and blob transactions stand out as eagerly awaited improvements.

Proto-danksharding revolutionizes transaction handling by employing blob-carrying transactions instead of calldata. This innovation enhances scalability and promises substantial cost reductions, estimated between 80% and 90%.

Other EIPs expected with the Dencun upgrade include Transient storage opcodes (EIP-1153), Beacon block root integration in the EVM (EIP-4788), and the introduction of Shard Blob Transactions (EIP-4844).

These advancements collectively propel Dencun towards a more efficient and cost-effective Ethereum ecosystem.

Dencun's timeline commitment

On January 17, the Dencun upgrade faced a temporary setback during its deployment on Goerli. Ethereum core developers encountered a four-hour delay due to a bug in Ethereum's proof-of-stake client Prysm.

Despite this setback, experts believe such challenges are crucial for refining the system. Nebojsa Urosevic, co-founder of the Ethereum development platform Tenderly, explained that synchronization delays are common and can be quickly rectified with multiple clients and testnets.

Despite the Goerli testnet issues, Ethereum core developers remain committed to the Sepolia and Holesky testnet launch timeline.

The developers plan to proceed with the Sepolia release on January 30, 2024, and Holesky on February 7, 2024. Once the three upgrades run effectively on the testnets without issues, mainnet activation will be scheduled for launch, according to the official Ethereum blog post.

Christine Kim, vice president of the research team at Galaxy Digital, expressed a 60% probability of the upgrade's mainnet activation by the end of March.

Eagerly awaiting Dencun's mainnet launch

Meanwhile, as the Ethereum community eagerly awaits the mainnet debut of the Dencun upgrade, a recent report by Electric Capital indicates that interest in the blockchain protocol continues to surge among developers.

The study reveals that Ethereum is the preferred blockchain for crypto developers, with over 70% of new contract codes debuting on the network. The 2023 Crypto Developer Report found that developers, now residing outside North America, are concentrated in countries in Latin America and Western Africa.

The report highlights Ethereum's appeal, attributing 71% of initiated contracts on the platform to its distinctive smart contract code.

A notable trend is the rise in multi-chain developers, increasing from 3% in 2015 to an impressive 34% in 2023, reflecting a tenfold rise in eight years. This cross-pollination extends between Ethereum and Ethereum Virtual Machine (EVM) blockchains, including BNB Chain, Polygon, Avalanche, and various layer 2 networks.

Electric Capital observes that BNB Chain hosts the largest share of multi-chain developers, followed by Ethereum at 39%, Polygon at 36%, Arbitrum at 24%, and Avalanche at 18%.

Interestingly, the report also reveals that 40% of developers actively engaged with both the Ethereum and Bitcoin protocols in 2023. Despite Bitcoin experiencing a 25% decline in monthly active developers, Ethereum remained resilient, with the drop in Bitcoin's figures attributed mainly to part-time developers and those exploring multi-chain solutions.

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