April 19, 2024
Dencun Upgrade Targets 10x Lower Ethereum Rollup Costs
Latest Cryptocurrency News

Dencun Upgrade Targets 10x Lower Ethereum Rollup Costs

The Ethereum ecosystem is nearing a substantial reduction in gas fees and faster transaction speeds for layer-2 rollups with the impending implementation of the Dencun upgrade across the network’s three testnets in early 2024.

The Dencun network upgrade was successfully activated on the Goerli testnet on Jan. 17, introducing several Ethereum Improvement Proposals (EIPs). Notably, EIP-4844, facilitates proto-danksharding, a highly anticipated enhancement aimed at lowering L2 transaction fees.

A temporary setback occurred during the deployment of Dencun on Goerli, with a four-hour delay attributed to a bug hindering the testnet’s upgrade finalization. Nebojsa Urosevic, Co-founder of the Ethereum development platform Tenderly, shed light on the bug, stating, “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.”

Urosevic, also the Senior Vice President of Tenderly’s engineering team, highlighted that client synchronization delays are common, allowing for the swift identification and resolution of the bug. Ethereum Foundation protocol lead Tim Beiko shared insights from the All Core Developers Execution Call on Jan. 18, revealing the historical root issue related to Ethereum’s proof-of-stake client Prysm setting the historical roots value to 0, preventing the Goerli testnet from finalizing the Dencun upgrade.

The Dencun upgrade comprises nine different EIPs, with Urosevic emphasizing proto-danksharding and blob transactions as the most anticipated. Data blobs are expected to enhance storage efficiency by temporarily presenting transaction data in a compressed format, offering a potential cost reduction of 80%–90% compared to calldata.

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

Following the successful implementation on Goerli, the Sepolia and Holesky testnets are next in line for the Dencun upgrade. Urosevic highlighted the necessity for successful deployment on all three testnets before planning the upgrade for Ethereum’s mainnet.

Philippe Schommers, Infrastructure Director of Ethereum sidechain Gnosis, emphasized that Dencun will provide more block space and lower costs to L2s. Additionally, data previously stored indefinitely on-chain will be discarded after two weeks, offering storage improvements.

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

Urosevic echoed these sentiments, noting that Dencun’s impact includes more efficient storage of data on L1 by L2 networks. Blobs will be deleted approximately every two weeks, making them more cost-effective than typical transaction calldata.

“Dencun will probably lower rollup transaction costs by up to 10 times, depending on blob space demand.”

Dencun’s implementation is expected to result in lower gas fees and faster transaction speeds, unlocking opportunities for new, more complex applications on L2 solutions. Rollups, in particular, are poised to benefit significantly, with their economic viability and scalability enhanced by reduced operational costs.

Anurag Arjun, Co-founder of data availability blockchain Avail, highlighted the substantial growth in demand for block space from rollups in 2023. He suggested that while proto-danksharding provides some relief, addressing the increased demand for block space for data availability from L2s requires careful consideration of decentralization, scalability, and security.

As Ethereum undergoes systematic upgrades aimed at lower fees and faster transactions, protocols like Avail could provide interim solutions for the block space demands of rollups. Arjun mentioned recent benchmarks showing a 90% reduction in transaction fees with Avail’s zero-knowledge Ethereum Virtual Machine Validium.

“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.”

Urosevic described the end game of the Dencun upgrade on the Ethereum mainnet, stating that its implementation will directly address scalability issues for the first time. “Multiple EIPs will bring greater storage efficiency, lower gas fees, and an overall better experience for developers while making rollups even more cost-efficient,” Urosevic concluded.

Photo by Bastian Riccardi

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