Ingeun Kim | ingeun92@naver.com | CURG
This article was originally written in Korean, and you can find it here !!
Warming Up with Ethereum
Before diving into the Ethereum Dencun upgrade, let’s begin with a warm-up on Ethereum, as the readers who have found their way to this article are likely already familiar with the topic.
Ethereum is a decentralized computing platform and cryptocurrency launched in 2015 by Vitalik Buterin. Ether (ETH), the native currency of Ethereum, is a cryptocurrency traded like Bitcoin. It is one of the most prominent altcoins, with the highest market capitalization among altcoins that emerged after Bitcoin.
Ethereum | Wikipedia
The above is the dictionary definition of Ethereum. Currently, Ethereum has completed the Dencun upgrade and has entered the second stage of its roadmap, “The Surge,” which will be discussed in more detail later.
As a side note, Vitalik Buterin, the founder of Ethereum, visited Seoul for an ETH Seoul event and had the chance to enjoy the flowers in bloom, as shown in the image. (By coincidence, the author encountered Vitalik Buterin while strolling in the area at that time!)
For reference, at the time of writing this article (2024.05.20), the price of Ethereum is around $3,000. It remains to be seen how much of a price impact the Dencun upgrade will have on Ethereum.
Dencun
The Name of a Star and a City
The official name of this Ethereum upgrade is Dencun, which is a combination of Deneb (a star) and Cancun (a city).
Traditionally, Ethereum has been naming its upgrades. The naming conventions differ slightly before and after the Merge.
Before the Merge, upgrades were named after cities, such as the Berlin upgrade or the London upgrade.
However, after the Merge, where the consensus and execution layers were separated, the upgrade names were divided accordingly. The naming convention involves using city names for execution layer upgrades and star names for consensus layer upgrades. For example, the previous Shapella upgrade combined the execution layer upgrade Shanghai and the consensus layer upgrade Capella. Notably, the next upgrade after Dencun is named Petra, combining Prague (execution layer) and Electra (consensus layer).
The Dencun upgrade includes several improvements and fixes, with the most significant being EIP-4844, which will be the focus, along with a brief overview of the other EIPs implemented.
EIP-4844: Shard Blob Transactions
The recently introduced EIP-4844, also known as Proto-Danksharding, addresses the need for and implementation of Shard Blob Transactions. Let’s explore why this was necessary and what it entails.
Ethereum Roadmap — The Surge
Before delving into EIP-4844, let’s understand where the Dencun upgrade fits within the Ethereum roadmap. The Dencun upgrade is a part of “The Surge” stage, which aims to improve Ethereum’s efficiency and scalability through various enhancements, primarily focused on sharding. The quantitative goal of this stage is to achieve over 100,000 transactions per second (tps).
Sharding
As mentioned earlier, sharding is a central topic in “The Surge.” But what exactly is sharding?
Ethereum sharding is a scalability solution that divides the blockchain network into smaller “shards” to significantly improve transaction processing throughput. Much like multiple computers working on tasks simultaneously, sharding allows the Ethereum network to process more transactions faster and more efficiently.
Introducing sharding is expected to bring the following benefits:
- Increased TPS: Ethereum’s current TPS is around 15, which is relatively low. Sharding could potentially increase this by hundreds or even thousands of times.
- Reduced transaction fees: Improved transaction throughput will lead to decreased demand, naturally lowering transaction fees.
- Alleviated network congestion: Network congestion causes delays and high fees for users, which sharding aims to mitigate, enhancing the user experience.
However, despite these promising benefits, concerns about centralization risks and technical difficulties led Ethereum to pivot away from direct sharding toward an indirect approach via Layer 2 solutions.
Ethereum shifted its focus to Layer 2, considering a form of indirect sharding called Danksharding that would benefit the Layer 2 ecosystem. This Danksharding approach became the central topic of “The Surge.”
Danksharding
Danksharding is a new sharding technology closely integrated with rollup technology. Rollups process transactions off the Ethereum main chain and then bundle and record them on the main chain. Danksharding was designed to efficiently store and process data generated by rollups.
Danksharding stores rollup data in a Binary Large Object (blob) data storage space. This solves the problem of securing storage space for rollup data and simultaneously enhances the efficiency of sharding and rollups.
EIP-4844 a.k.a Proto-Danksharding
EIP-4844, also known as Proto-Danksharding, is an initial step towards full Danksharding, laying the groundwork for improving the efficiency and scalability of Layer 2 solutions. As the Layer 2 ecosystem continues to expand, EIP-4844 has garnered significant attention, with its core features including:
Block Size Expansion
EIP-4844 increases the amount of data that can be included in a block, allowing for more transactions to be processed. This is achieved by expanding the block size from 1MB to approximately 2MB.
Introduction of BLOBs
Proto-Danksharding introduces a new data structure called “blob” to the blocks. A blob is a space for storing additional data related to transactions, which is particularly useful for efficiently storing data generated by rollup technologies. Information included in the blob storage space is automatically deleted after a certain period (approximately 18 days). This differs from the calldata storage space, which is permanent, and allows rollup data to be transmitted to the Ethereum mainnet at a lower cost by using blobs.
With the new blob storage space, Ethereum blocks are allocated up to 0.75MB of additional space per block, and the target for occupying that storage space per block is 0.375MB, half the maximum. To regulate this, the same BaseFee calculation methodology that was applied in EIP-1559 will be applied to manage it.
Gas Cost Improvements
EIP-4844 improves the way gas costs are calculated, increasing the efficiency of transaction processing. This helps users save on transaction fees.
Other EIPs
While EIP-4844 was the star of the Dencun upgrade, other improvements were also included. Although they won’t be covered in as much detail as EIP-4844, a brief overview of these supporting actors is provided out of respect for the Ethereum core developers.
Conclusion
Currently, Ethereum is facing challenges with low processing speed and relatively high fees, hindering its efficiency and scalability. To address this, Ethereum has adopted the Danksharding approach, and the Dencun upgrade serves as a preliminary step toward realizing the future envisioned by Danksharding.
If subsequent Ethereum upgrades enable Danksharding to find its footing and operate smoothly, in conjunction with the existing Layer 2 platforms, a more extensive Ethereum ecosystem could be created, with Ethereum serving as an efficient and scalable Layer 1 solution.
Of course, some argue that Danksharding’s ultimate goal of Layer 2-based indirect sharding is merely a temporary solution and not a fundamental fix. However, the author commends the Ethereum core developers for their efforts and attempts to overcome the current difficulties, and will continue to observe Ethereum’s progress.
