From time to time, the Ethereum network needs to introduce new features to improve its utility and move the technology forward. It does this through hard forks, in which network participants adopt a new form of the blockchain that follows updated rules. For instance, Ethereum’s Shanghai-Capella upgrade was completed in April 2023, which introduced the ability for validators to withdraw their stakes from Ethereum’s Beacon chain.
The Cancun-Deneb (Dencun) upgrade includes multiple Ethereum Improvement Proposals (EIPs), covering everything from cost effective ways of adding data to transactions to changing how specific coding commands work. Though there are many parts to Dencun, perhaps the most impactful one is the introduction of proto-danksharding. This feature sets the stage for splitting up Ethereum’s blockchain into pieces (“shards”) designed to increase the speed of transactions and overall capacity of the network.
What are the parts that make up Cancun-Deneb?
The Dencun upgrade addresses both layers of the Ethereum network. Updates to the execution layer (home of smart contracts and decentralized applications) are named after cities where Ethereum’s Devcon has been held. Updates to the consensus layer (where nodes reach agreement about the state of the blockchain through a Proof of Stake mechanism) are named after stars. This is how the name “Cancun-Deneb” was derived.
Proto-danksharding (EIP-4844)
Sharding is a way of breaking up Ethereum’s blockchain into multiple segments that can independently handle transactions. Instead of every transaction waiting in one long line (slowing the network), this allows parallel processing of interactions. The result is magnification of Ethereum’s transactions per second (tps). In other words, it makes Ethereum faster.
The most anticipated part of Cancun-Deneb is proto-danksharding, detailed by EIP-4844. This is a prototype (hence “proto-“) of a sharding model designed by Ethereum researcher Dankrad Feist (hence “dank” and “sharding”). It uses a new type of transaction format called blob-carrying transactions that make large amounts of data more available—and cheaper—for rollups used by layer 2 solutions (L2s), augmenting Ethereum’s capabilities. Although this is not actually sharding itself, it lays the foundation for sharding efforts that will come later.
In summary, proto-danksharding is a step towards improving Ethereum’s scalability, setting the stage for future upgrades.
Other EIPs included in Dencun
Along with EIP-4844 (described above), there are a number of Ethereum Improvement Proposals (EIPs) included in Dencun. These EIPs make changes to both the execution and consensus layers of Ethereum. Some important highlights include:
- EIP-5656 – Enables an efficient way of “memory copying,” reducing the gas it costs to move blocks of data on the Ethereum Virtual Machine (EVM).
- EIP-6780 – Modifies how an opcode (operation code) called SELFDESTRUCT functions. SELFDESTRUCT has long been controversial in Ethereum’s development community due to a perceived lack of utility and the potential for harmful uses.
- EIP-4788 – Allows communication between Ethereum’s consensus and execution layers in a way that theoretically makes third-party oracles irrelevant.
- EIP-7514 – Slows down the growth rate of validators to better optimize economic features of the network.
- EIP-1153 – Allows “transient storage” on the EVM, making some transactions more efficient (i.e., use less gas) because they can offload data after they are complete.
How will Dencun affect Ethereum?
The components of Dencun prioritize preparing Ethereum to scale further while also making transactions on the network cheaper and more efficient. Proto-danksharding creates a scaffold on which formal sharding will one day be possible, allowing Ethereum to increase its transaction speeds and handle more traffic. In the meantime, it helps layer 2 scaling solutions operate more cheaply.
Furthermore, EIP-6780 fixes how a potentially harmful function could affect smart contracts, and changes to Ethereum’s consensus layer modify how the network grows to ensure Ethereum is economically viable in the foreseeable future. Meanwhile, EIP-4788 negates the need for trusted, centralized oracle systems, which has significant implications for platforms like liquid staking pools.
In summary, Ethereum’s upgrades have gone from focusing on the transition to Proof of Stake (the “Merge”) to increasing network efficiency and capabilities (the “Surge”). This is what Dencun attempts to do—both immediately and in preparation for the future.
Conclusion
- Ethereum’s Cancun-Deneb (Dencun) upgrade includes improvements to Ethereum’s execution and consensus layers, prioritizing network scalability and the cost efficiency of transactions.
- The most anticipated component of Dencun is proto-danksharding, which improves the operation of rollups through a new type of Ethereum transaction.
- Other new features include memory copying, a modification to problematic code, an effort to strengthen Ethereum’s economics, and more.