Home | Crypto News | Ethereum’s Long-Awaited Dencun Upgrade Goes Live, Bringing Reduced Transaction Fees On Layer-2 Networks

Ethereum’s Long-Awaited Dencun Upgrade Goes Live, Bringing Reduced Transaction Fees On Layer-2 Networks

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Key Takeaways

  • The Dencun upgrade was implemented on the Ethereum mainnet on March 13th, 2024, marking a new important milestone for the Ethereum ecosystem.
  • Anticipated to be the most notable upgrade since the Merge, Dencun aims to lower transaction fees for layer-2 networks and improve Ethereum’s scalability.
  • The promised fee reductions from the upgrade will not directly affect Ethereum users in the short term. However, Ethereum’s superiority for high-value transactions is expected to continue in the medium term.

The Ethereum blockchain completed its much-anticipated Dencun upgrade on March 13th, 2024. This update, considered the most significant upgrade since the Merge, assists in proto-danksharding, a technology that enhances scalability and reduces transaction fees on layer-2 networks.

EIP-4844: Proto-Danksharding

Proto-danksharding, or EIP-4844, is a first step towards a more scalable Ethereum blockchain. EIP-4844 introduces a new type of transaction that allows rollups to include data in blocks at a lower cost. This latest transaction type bundles data into large, fixed-size ‘blobs’ and is stored separately from the primary block data, freeing up space for more transactions on the main chain.

In simpler terms, proto-danksharding is like adding an extension to your house to create more space without needing a complete rebuild, clearing the way for Ethereum with even more efficient transaction processing.

Impact And Future Developments

While the Dencun upgrade positively impacts Ethereum’s scalability, experts view it as just the beginning of Ethereum’s roadmap.

Post-Dencun, users are expected to see benefits within hours to days, as the availability of data ‘blobs’ on Ethereum should slash transaction fees by 5-10x. However, layer-2 solutions are expected to decrease, and some argue that the limitations of rollups could still impede overall throughput.

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