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Ethereum's Dencun Upgrade Finally Hits the Testnets, Marking  Another Step Towards Enhanced Scalability and Network Efficiency

The Dencun upgrade launched on three test after the bug fix

In early 2024, the Ethereum network heralded a significant milestone with the Dencun upgrade, initially deployed on the Goerli testnet. This update promises to revolutionize the Ethereum ecosystem, particularly benefiting layer 2 rollups. As Ethereum edges closer to a more efficient future, the Dencun upgrade is set to dramatically lower gas fees and enhance transaction speeds for these rollups.

This upgrade encompasses a suite of Ethereum Improvement Proposals (EIPs), with EIP-4844 playing a starring role. Introducing proto-danksharding, this EIP is a much-anticipated enhancement poised to slash layer 2 transaction costs. However, the path to this technological advancement wasn't without its hurdles. The Goerli testnet's initial deployment of Dencun encountered a snag due to a bug in Prysm, Ethereum's proof-of-stake client, leading to a slight delay and a quick response from the development team to rectify the issue.

terence.eth (@terencechain):

“Prysm encountered a bug right at Goerli's hard fork. The bug has been identified, and a fix is currently being merged. A hot patch image will be released within the next few hours. Sorry for the inconvenience, and thank you for your patience!”

The prospects of proto-danksharding: a potential game changer for Ethereum

EIP-4844, central to the Dencun upgrade, introduces proto-danksharding to the Ethereum network, a development eagerly anticipated by the crypto community. This innovative approach is set to revolutionize how transaction data is managed, offering a solution that significantly reduces costs while maintaining Ethereum's robust security standards.

Proto-danksharding achieves this by introducing a new form of transaction, known as 'blob-carrying transactions.' These transactions differ from traditional calldata by storing information in a compressed format, which is more space-efficient and, crucially, more cost-effective. This method is expected to reduce transaction storage costs by an impressive 80 to 90%, a game-changing improvement for Ethereum's scalability.

The impact of proto-danksharding extends beyond mere cost savings. By enhancing the efficiency of data storage and transmission, Ethereum can support more complex and demanding applications, thereby attracting a broader range of developers and users to the platform. 

The Goerli testnet hurdle

The journey of Ethereum's Dencun upgrade was not without its challenges. A critical moment came during its deployment on the Goerli testnet, a crucial step in validating the upgrade's readiness for the broader Ethereum network. This phase was momentarily disrupted by an unexpected bug in Prysm, Ethereum's proof-of-stake client, leading to a delay in the upgrade's finalization.

This hiccup was characterized by a synchronization issue, where the network struggled to sync with nodes due to the bug in Prysm. Nebojsa Urosevic, co-founder of Ethereum development platform Tenderly, explained that such delays are not uncommon in network upgrades and underscore the importance of testnets in identifying and addressing potential problems. 

Nebojsa Urosevic:

“The network could not sync with nodes because of a bug in Prysm, Ethereum’s proof-of-stake client,"

“It's one of the reasons why there are multiple clients, and why testnets exist.”

Tim Beiko, Ethereum Foundation protocol lead, provided further insight, explaining how the bug was related to a historical roots value setting in Prysm. 

timbeiko.eth ☀️ (@TimBeiko):

“In short, every 256 epochs, CL clients save a specific value, called the Historical Root. A bug in Prysm set this value to 0 instead of copying over the last historical root when Deneb activated.”

The roadmap to Ethereum’s scalability: From testnets to mainnet

Following the successful implementation on the Goerli testnet, Ethereum's journey continues with the upcoming upgrades on the Sepolia and Holesky testnets. These stages are essential, as they ensure the upgrade's robustness before its highly anticipated deployment on the Ethereum mainnet.

The Dencun upgrade is comprehensive, incorporating nine different Ethereum Improvement Proposals (EIPs), each contributing to the overall enhancement of the network. Among these, proto-danksharding and blob transactions are particularly noteworthy. 

Nebojsa Urosevic:

“Proto-danksharding is a major step toward improved Ethereum scalability, thanks to the use of blob-carrying transactions instead of calldata.”

The successful deployment across all testnets is a precondition for the upgrade's transition to the mainnet. This meticulous process underscores Ethereum's commitment to delivering a well-tested, reliable upgrade that will enrich the user experience without compromising on decentralization or security. It sets the stage for a transformative shift in how Ethereum operates, paving the way for new applications and broader adoption.

The impact on rollups: economic viability and scalability

Philippe Schommers, Infrastructure Director at Ethereum sidechain Gnosis, emphasizes that Dencun will not only provide more block space and lower costs for layer 2 solutions (L2s) but also revolutionize data storage on the blockchain. 

Philippe Schommers:

“This is scalability in a way that is compatible with our endgame, without sacrificing decentralization.”

With the introduction of a new data handling mechanism, data previously stored indefinitely on the chain will now be discarded after two weeks, striking a balance between scalability and decentralization.

This strategic approach to data management will enable L2 networks to store data on Ethereum more efficiently. The utilization of blobs, which are periodically deleted, offers a cheaper alternative to traditional transaction calldata. 

Nebojsa Urosevic:

“L2 networks will be able to store data on L1 more efficiently. Blobs will be deleted approximately every two weeks, which is enough for L2s to manage, retrieve, and verify the data. This makes blobs cheaper than typical transaction calldata which is stored indefinitely,”

This shift is expected to lower rollup transaction costs by up to ten times, depending on blob space demand, thus enhancing the economic feasibility of L2 solutions.

Anurag Arjun, co-founder of data availability blockchain Avail, highlights that the growth in demand for block space from rollups in 2023 indicates a need for data availability solutions. The Dencun upgrade, with its focus on scalability and security.

The Dencun upgrade's emphasis on lower costs and faster transactions is opening doors to more complex applications on L2 solutions, marking a pivotal shift in the blockchain landscape. It promises a future where Ethereum's rollups are not just technically proficient but also economically attractive, fostering innovation and growth in the wider blockchain community.

Anurag Arjun:

“It still settles to Ethereum and provides data availability guarantees that are decentralized and secure. This is becoming quite an attractive option for blockchains looking to move into the Ethereum ecosystem.”