High gas fees on the Ethereum network will soon be a thing of the past after core developers implemented the long-awaited Dencun upgrade on the mainnet on Wednesday.
Dencun introduces “proto-danksharding” to the number one proof-of-stake blockchain, a feature designed to reduce layer-2 transaction costs, making data availability cheaper while also tackling Ethereum’s notorious scalability issues.
Dencun Goes Live Without A Hitch
The Dencun hard fork has officially been executed on the Ethereum mainnet, ushering in a new era of significantly cheaper transaction fees.
Dencun, considered to be Ethereum’s most significant in almost a year, was triggered today and successfully finalized at epoch number 269568 at around 10 a.m. ET. It will now take roughly a month or two for settlement contracts across all layer-2 blockchains such as Base, Optimism, Arbitrum On, Polygon, Starknet, and others, to integrate the update. Once they do, transaction costs should drastically fall.
The name Dencun combines the Cancun upgrade of Ethereum’s execution layer and the Deneb upgrade on its consensus layer. A pivotal element of the update is the activation of proto-danksharding, a novel method of data storage on Ethereum that introduces ‘blobs’. Blobs are intended to lower rollup costs on the Ethereum mainnet by first compressing transaction data off-chain, thus reducing the storage and processing load. In other words, L2 rollups will now use blobs instead of the “calldata” technique for posting transactions — ensuring their operation costs go down and that end users enjoy reduced transaction fees.
Before Dencun, layer-2 data could only be stored on Ethereum infinitely, a very costly option that significantly limited what data was uploaded on-chain. With the execution of Dencun, data can be stored on-chain temporarily for about a month.
Ethereum has experienced a handful of high-profile upgrades in recent years, including the September 2022 merge, which shifted the network from a proof-of-work model to an environmentally-friendly proof-of-stake consensus, and April 2023’s Shanghai upgrade, which allowed users to withdraw tens of billions of dollars in ether staked on the network. However, some pundits believe Dencun is set to transform the Ethereum ecosystem to a level never before seen.
Other Dencun Improvements
While Proto-Danksharding is Dencun’s main focus, eight other Ethereum Improvement Proposals (EIPs) have been activated on the network.
This includes EIP-4844, which improves designs for bridges and staking pools. Another improvement brought by Dencun is EIP-1153, which focuses on “transient storage” and reduces fees for storing data on-chain.
ETH was changing hands for $3,987 at press time, a 1.8% gain on the day.
