The highly anticipated Dencun upgrade has officially gone live on the Ethereum mainnet. This update introduces a series of Ethereum Improvement Proposals (EIPs), with the EIP-4844 taking center stage.
EIP-4844 also known as ‘proto-danksharding’ improves the blockchain’s ability to handle data from layer 2 networks. This upgrade combines Cancun on the execution layer and Deneb on the consensus layer for comprehensive enhancements.
One of the primary benefits of the Dencun upgrade is the introduction of a new transaction category that stores data through the use of ‘blobs’.
Blobs, or large data packets included in Ethereum transactions, are a key component of the Dencun upgrade designed to improve the blockchain’s scalability and reduce gas fees for layer 2 networks like Arbitrum, Optimism, and Polygon.
They are an inexpensive and temporary memory, carrying data about transactions, known as blob-carrying transactions. Blobs are designed to make data storage more efficient and cost-effective on the Ethereum blockchain.
They are also used by L2s for settlement instead of storing data directly on the Ethereum blockchain, which should help reduce gas fees and improve scalability.
With the increasing importance of blobs, The Graph, a decentralized indexing protocol, has crafted a solution to efficiently index and provide easy access to blob data.
This empowers developers to create applications that utilize blob data, enhancing the functionality of layer 2 networks and the entire Ethereum blockchain.
The Dencun upgrade also includes eight other code updates, such as EIP-4788, which introduces an ‘enshrined oracle’ to improve communication between Ethereum’s two base layers. Additionally, EIP-1153 focuses on ‘transient storage’, a feature needed for Uniswap version 4.
It is important to note that the Dencun upgrade is a crucial step in Ethereum’s quest to implement ‘sharding’, which is a technological feature designed to process more transactions for cheap.
It is an interim solution for Ethereum’s high gas fees, as the full implementation of sharding is still years away.
