Ethereum Launches “Dencun” Upgrade: A Leap Forward for Layer-2 Networks
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In a major development for the blockchain industry, Ethereum has successfully activated its highly-anticipated “Dencun” upgrade. This upgrade is expected to drive growth across layer-2 networks like Arbitrum and Polygon by significantly reducing data fees.
The activation of the Dencun upgrade, which is technically a hard fork, took place at Ethereum epoch 269,568, starting at 13:55 UTC and completing by 14:10 UTC. Despite this milestone, the price of ether (ETH), Ethereum’s native cryptocurrency, saw a minor increase of 0.41% to $3,996 over the last day, following a remarkable 50% surge in the past month.
One of the key features of the Dencun upgrade is the introduction of “blobs,” a new method for data storage on the blockchain. These blobs provide a dedicated and cost-effective space separate from standard transactions.
This upgrade, the most significant for Ethereum in almost a year, marks a pivotal moment in its history. It signals a new era in addressing the platform’s high transaction fees and could spark a competitive race among prominent layer-2 networks to utilize the enhancements for blockchain scaling.
At the core of the upgrade is “proto-danksharding,” a new transaction category that will store data on Ethereum through these data blobs.
Ethereum Dencun Will Benefit Other Layer-2 Networks
While direct Ethereum users may not be the primary beneficiaries of this upgrade, layer-2 networks like Arbitrum, Optimism, and Polygon stand to gain the most. These networks improve Ethereum’s scalability by consolidating user transactions and settling them on the main blockchain in large batches.
The blobs have arrived on Ethereum! 🐡
The Dencun upgrade has successfully launched on Ethereum mainnet making it one of the biggest upgrades to support Layer 2’s in scaling Ethereum.
Now with the Ethereum mainnet upgrade complete, we expect the ArbOS Atlas upgrade to be…
— Arbitrum (💙,🧡) (@arbitrum) March 13, 2024
The Dencun upgrade represents the first step in Ethereum’s ambitious journey to implement “sharding,” a technology that aims to break the blockchain into smaller segments, or mini-shards, to enable a higher volume of transactions at a lower cost.
While the full implementation of sharding is still in the works, the interim solution of proto-danksharding provided by Dencun is a promising step toward reducing Ethereum’s high gas fees.
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