The Dencun hard fork is an important upcoming update for the Ethereum network. It represents a significant step in the ongoing development of Ethereum and is aimed at improving the blockchain's capabilities in various aspects.
- What is Dencun?
- Main Components of the Cancun-Deneb Update
- What Prospects Await Ethereum After the Update?
What is Dencun?
Cancun-Deneb, also known as Dencun, is a significant update in Ethereum, following Shapella, launched in April 2023. This hard fork includes two aspects: Deneb, responsible for consensus, and Cancun, related to execution.
The main goals of Dencun can be outlined:
- improving scalability,
- reducing gas costs,
- enhancing security,
- improving cross-network communications
- optimizing data storage.
The upcoming update is a step towards future sharding in Ethereum.
Main Components of the Cancun-Deneb Update
In June 2023, developers approved a set of components for implementation in Cancun. This list includes a number of improvement proposals aimed at optimizing network performance.
Update Description EIP-4844 A key update in the Ethereum blockchain, introducing Proto-Danksharding. This feature aims to expand network scales by introducing a new type of transactions for processing large volumes of data (blob), which should lead to reduced fees for second-level solutions based on Rollups technology. EIP-4788 Focuses on improving the operation of cross-chain bridges and staking pools. EIP-1153 Aimed at more efficient use of block space and reducing data storage costs in blockchain. EIP-5656 Aimed at enhancing the performance of Ethereum Virtual Machine (EVM). EIP-6780 Important for eliminating obsolete code that may interfere with the normal operation of smart contracts.
The details of the Deneb upgrade, which is part of the consensus mechanism, cover a number of improvements supporting the main update EIP-4844 (Proto-Danksharding) in the Ethereum hard fork. These include EIP-7044, EIP-7045, and EIP-7514, which contribute to improving user interaction quality and network security.
The initially planned Dencun hard fork in Ethereum for October 2023 was postponed to 2024 due to technical problems discovered in 10 test networks.
What Prospects Await Ethereum After the Update?
After the implementation of Shapella, the last major update of Ethereum, a slowdown in growth in its ecosystem was observed. Experts from JPMorgan characterized the network activity as insufficiently active, pointing to a decrease in daily transaction volume by 12%, a reduction in active addresses by 20%, and a decrease in total locked funds (TVL) in DeFi protocols by 8%.
However, this only applies to activity in the main Ethereum network. Ethereum's development strategy includes shifting activity to higher levels, such as L2 and L3, using Rollups technology.
In November 2023, Vitalik Buterin, the founder of Ethereum, proposed resuming work on scaling the network using Plasma technology, previously postponed due to high data storage costs. Buterin believes that the application of zk-SNARK technology can help solve this problem.
For example, Uniswap, a decentralized exchange, is waiting for the implementation of Cancun to launch its fourth version, which will offer improved cross-network asset exchange and new features for dynamic fee adjustment and creating diverse types of orders.
StarkWare, the developer of the second-level solution StarkNet, is also awaiting the hard fork to adapt its network to the updates, which will improve its efficiency and reduce transaction costs for users. Dencun is expected to influence other second-level networks as well, including Optimism, Arbitrum, and zkSync.
