Feb 14, 2024 - Business

Ethereum's Dencun upgrade rolls out a new type of transaction

Illustration of blueprint papers laid out to show a glowing wireframe cube in the plans.

Illustration: Annelise Capossela/Axios

The Ethereum blockchain reached its final testnet, its last practice run in simulating a new feature that starts the countdown for its Dencun upgrade.

Why it matters: When complete, Dencun will improve the world's second largest blockchain and all the layer-2 chains that rely on it.

Details: Ethereum has been making step changes to better enable transactions, without sacrificing security, because it's slow and expensive to use.

  • Dencun aims to solve that issue by raising the total throughput of computations on the overall Ethereum Network, to make it more competitive with speedier rivals like Solana or other, more centralized, networks.
  • The upgrade, or "hard fork," will be triggered when the blockchain reaches slot 8626176, which developers estimate will occur March 13.

Be smart: The upgrade is based around a concept known as "sharding."

  • Sharding is the idea that network data can be broken into "shards," each containing their own set of blockchain data, including token balances and smart contracts.

Zoom in: Ethereum's Dencun upgrade is about Proto-danksharding — a precursor to full danksharding, a type of sharding architecture that splits Ethereum blocks into pieces. (Full danksharding is the ultimate goal.)

  • There are different ways to do this, but this design would make a single validator responsible for fragmenting the blocks.
  • Proto is the first upgrade to get to full sharding, where it will make more block space available, so that layer 2 scaling solutions can process more transactions off-chain in a cost-effective way.

Between the lines: Dencun focuses on so-called rollups, which are used to execute transactions off the main Ethereum chain, dealing with cost of execution and verification, and increasing efficiency.

  • But the data underpinning those transactions also has to be sent back to that main layer at some point.
  • That's expensive, because it's processed by Ethereum nodes, and generally cumbersome because the data lives on-chain forever.

Proto-danksharding rolls out a new transaction type that carries "blobs," or binary large objects. Blobs would store data temporarily for short-term transaction verification, and delete the data to prevent overloading the network.

  • Blobs would replace calldata, which wouldn't compete with other Ethereum transactions for gas, the term for what users pay to do anything on Ethereum.

Flashback: The Ethereum blockchain's last major upgrade in April allowed staked ethers to be withdrawn for the first time, and was a necessary step before this one.

What they're saying: Ethereum cofounder Vitalik Buterin and Ethereum Foundation researcher Toni Wahrstätter said Dencun was "taking a big step towards making Ethereum more rollup-friendly," in what they thought would be a more effective use of block space.

  • The pair explained that block sizes, measured in bytes, have doubled over the last 12 months, possibly due to trends like inscriptions.
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