On December 30, 2023, Vitalik Buterin, the co-founder of now the world’s second-most valuable cryptocurrency, announced the 2024 roadmap for Ethereum on X, the social media platform formerly known as Twitter.
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The roadmap represents a series of much-needed upgrades that will make Ethereum more scalable, secure, and sustainable. Even if Ethereum is a sturdy platform, it’s constantly being refined to open the ecosystem to new and more comprehensive use cases, which may attract new investors to the community. All in all, the specific improvements made to the protocol will bring about benefits like cheaper transactions, extra security, better user experience, and future-proofing.
Ethereum developers are set to release the Dencun upgrade, which expands on the success of previous enhancements like the Shanghai upgrade, implemented in April last year. The name is a portmanteau that describes Cancun and Deneb, two separate upgrades that’ve been amalgamated to create the term “Dencun.”
The anticipation surrounding the latest development shaping the future of Ethereum has already influenced its value. If you’re looking to buy Ethereum right now, please visit binance.com/en for detailed guidance. There’s nothing you can do to prepare for the Dencun upgrade except to be suspicious of blogs, emails, and X posts.
The Dencun Upgrade Has Been Successfully Activated on All Testnets
Ethereum developers use testnets to run projects before their launch. It helps them monitor the blockchain performance, fixing bugs and other kinds of failures. An error on the mainnet can be costly. A testnet is a dedicated and controlled blockchain network that mirrors the functionality of the mainnet yet operates in a risk-free environment.
Basically, it provides a simulation of the main blockchain where developers can test upgrades without unnecessary risk. The most prominent Ethereum testnets are Sepolia, Goerli, Holesky, Rinkeby, and Ropsten. The Dencun upgrade has been rolled out to several testnets, according to the Ethereum Foundation Blog. Proto-danksharding will soon go live on the mainnet.
These Are the Key Features and Improvements of The Dencun Upgrade
The Dencun upgrade, which symbolizes the outset of The Splurge, is the first step towards a rollup-centric future. Ethereum seeks to slow down its core components, leaving innovation and user-level focus up to layer 2s.
The new upgrade aims to address core aspects of Ethereum’s framework, unveiling many opportunities. There’s nothing you need to do to prepare, as the Dencun upgrade will happen impeccably. Here’s what you can expect:
Proto-danksharding Sets the Stage for Further Scalability Enhancements
At the core of the Dencun upgrade is proto-danksharding, more commonly known as EIP-4844. One of the critical obstacles of Ethereum’s mass adoption is high gas fees, directly correlated to network activity. In spite of a large user base, the blockchain’s limited processing capacity generates high fees.
Proto-danksharding will address Ethereum’s high gas fees by augmenting block space and enhancing data availability, especially for rollups in Layer 2 scaling solutions. EIP-4844 is expected to make Ethereum a more attractive network to build on for startups. Regrettably, the fee reductions promised to Layer 2 users don’t apply to those transacting on the mainnet.
Proto-danksharding is a step in the right direction, but not yet at the desired result. Danksharding is the present design proposal for Ethereum – the goal is to make transactions on Layer 2s as affordable as possible for users and scale the blockchain to 100,000 transactions per second.
Labeled the “scalability killer”, danksharding represents a shift from the traditional sharding system to a new paradigm for how Ethereum operates. It makes use of distributed data sampling across blobs to scale Ethereum. Erasure codes can be sampled to obtain the actual data added to a slot or block, which is stored for a limited time on the consensus layer.
The Upgrade Lowers Costs for Layer 2 Blockchains to Store Data on The Mainnet
Layer 2s will slowly but surely transition to proto-danksharding, optimizing how they settle to the base layer. Blob-carrying transactions will considerably reduce the costs for Ethereum, which can be prohibitively expensive. On a rollup, transaction costs are executed in batches; data availability costs still account for 90% of the price of a transaction on a rollup.
Rollups eliminate congestion on the mainnet by processing and verifying transactions off-chain. Optimistic rollups and ZK rollups are typically used in Web3 projects to achieve higher throughput, better security, and protection against censorship. Examples of Ethereum Layer 2 altcoins you can purchase before the Dencun upgrade are ARB (Arbitrum), IMX (Immutable), and STRK (StarkNet).
DeFi Is About to Change Forever
There’s a huge opportunity to foster innovation, and that’s exactly what the Dencun upgrade does. Ethereum has long been home to the DeFi ecosystem based on transparency, open access, and data-driven automation. There are approximately 990 Ethereum-based projects ranging from regular mobile and web-based apps to cutting-edge solutions for the blockchain era.
The integration of blob-carrying transactions through the Dencun upgrade is poised to have a notable impact on DeFi and NFTs. More precisely, cheaper fees will incentivize greater on-chain participation in Ethereum’s ecosystem.
DeFi protocols, not to mention on-chain bridges, have become fashionable and cause problems for Ethereum’s base layer, resulting in too many transactions, high gas fees, and slower confirmation rates. The more Ethereum succeeds, the more it must overcome these hurdles to remain the blockchain of choice for hosting various dApps.
Low gas and more transactions per second will foster more use cases, as people will no longer have to worry about transaction fees while enjoying a rich ecosystem. NFTs, which represent ownership of unique digital assets, are primarily built on Ethereum due to its flexibility and flexibility. The Dencun upgrade is a testament to Ethereum’s commitment to improving scalability and efficiency.
To Sum Up
There’s nothing quite like a new upgrade to get the Ethereum community talking. The Dencun upgrade builds on the Merge and kicks off The Surge era, so it doesn’t come as a surprise it’s a highly-awaited hard fork. The job of upgrading Ethereum won’t ever be finished, according to the experts, so it’s necessary to embrace the ongoing changes as part of a dynamic ecosystem.
