Tech
Ethereum Prepares Dencun Upgrade as Blockchain Layer-2 Starknet, Lower Fees for Polygon Eye
Ethereum developers are preparing for Wednesday’s long-awaited Dencun update, set to bring the biggest change to the blockchain’s code in over a year.
Technically known as a “hard fork” in blockchain terminology, it is expected to begin around 1:55 pm UTC (9:55 am ET). The update is designed to usher in a new era of cheaper fees for the growing range of ancillary networks operating on Ethereum, called layer-2 (L2) “rollup.” Those changes will come with the activation of a new Ethereum Enhancement Proposal (EIP) called “proto-danksharding,” OR EIP-4844, which is designed to improve the chain’s ability to handle data from L2 networks.
Some elements of the Dencun update have been planned for several years, but the developers have delayed it from the original goal of late 2023 due to some technical issues. Since then, developers have tested the package on three separate testnets (testnets) and most of these tests ran without a hitch. (The first test on Goerli has not finalized for a few hours, but once the bug was fixed, things started working smoothly again.)
Some Ethereum fans are celebrating the occasion of Dencun’s official launch by participating in watch parties, with the EthStaker developer community e Infernal Minda leading Ethereum infrastructure team, each hosting livestreams.
“We are making sure all our clients and bootnodes are fully updated and ready to fork,” said Barnabas Busa, a DevOps engineer at the Ethereum Foundation. “Our monitoring infrastructure has been expanded to ensure we don’t miss anything important.”
Dencun includes a number of code changes, but the biggest comes with “proto-danksharding,” which introduces a new method for storing transaction data on Ethereum, called “blobs.”
Layer-2 networks like Arbitrum, Optimism, and Polygon will benefit the most from Dencun. The networks help scale Ethereum by batching user transactions and then transmitting them to Ethereum where they are settled in large batches. Over the past year, they have become the leading venues for transacting on Ethereum, amassing billions of dollars in deposits and consistently boasting higher transaction volumes than the main Ethereum chain.
After Dencun, L2 will be able to send data to Ethereum within dedicated blob space, instead of being forced to pay a higher cost to feed data into conventional transactions. In theory, this could help L2 companies handle more data more efficiently, thus reducing fees for end users.
Proto-danksharding is Ethereum’s first approach to “sharding”, which is a set of techniques for splitting the blockchain into mini-shards (or mini-chains), to process more transactions at low cost. A full version of sharding is still years away, but proto-danksharding could help address some of Ethereum’s high gas fees in the short term by reducing fees for L2 networks.
Proto-danksharding will also benefit a new class of blockchain that has entered the Ethereum fray called data availability (DA) levels.. DA layers like Celestia, EigenDA, and Avail help networks store large amounts of data; L2s often use them to store transaction data. Proto-danksharding could make DA data download costs cheaper.
Polygon co-founder Jordi Baylina he told CoinDesk in a previous interview that “prices should fall mainly because it is a question of supply and demand. Your supply is higher, the availability of data on Ethereum will be higher, so the price should go down.”
“By how much? We don’t know, it’s hard to predict,” Baylina added.
After Dencun, Ethereum developers will begin to face what will come in the next updatenow called Electra + Prague (Petra). At the moment, the developers haven’t decided what will be included in that package, but a strong contender is an update called “Verkle Trees,” which is a new type of data category that should help nodes store large amounts of data.
“Scalability is the fundamental unlock that enables permissionless collaboration between project developers and teams,” said Karl Floersch, CEO of OP Labs, the lead development company behind the Optimism network. “With EIP-4844 and Dencun, developers in the Ethereum ecosystem can build together more seamlessly.”
The update “will allow a loosely coordinated group of developers to actually build systems that provide overall experiences that rival the user experiences we’re used to from top-down, centrally planned platforms,” he said.
Currently, the average number of transactions per second (TPS) over the past seven days on Layer 2 networks is 93.18, compared to Ethereum’s average of 14.42. These figures generate a scaling factor of 8.37x, second L2Beat data.
A Loyalty report on the update it is stated that Level 2s represent approximately 10% of the total Level 1 fees. That share is expected to “decrease significantly” after the update, the money management company said.
Data from L2 tariffs shows that the average cost to send ETH on Arbitrum is $0.24 and exchanging tokens costs $0.67. Optimism’s fees are $0.47 and $0.92 respectively while Polygon’s are $0.78 and $2.85. These figures are expected to decrease following the update.
Representatives of the Starknet Foundation, an organization that supports the Starknet chain, issued a press release on Tuesday saying that its users “will get the highest savings of any Tier 2,” because “a larger percentage of Starknet commissions go to DA than to any other level 2 rates.”
The foundation said the planned innovations would bring additional savings and that it plans to charge fees “at future rates, covering the difference until improvements are in place.”