- The Dencun upgrade was successfully rolled out on Ethereum mainnet on March 13 and aims to enhance scalability and reduce layer-2 transaction fees.
- Key features include proto-danksharding for improved data availability to reduce layer-2 fees, though mainnet fees remain high for now.
- Dencun lays groundwork for further scaling Ethereum though some limitations of layer-2 solutions remain according to Tezos co-founder Arthur Breitman.
The Dencun upgrade was successfully rolled out on the Ethereum mainnet on March 13 at 1:55 pm UTC. Dencun is the most anticipated hard fork since the Merge and is expected to significantly reduce the transaction fees of layer-2 networks and enhance Ethereum’s overall scalability.
What Does the Dencun Upgrade Do?
The Dencun hard fork incorporates nine different Ethereum Improvement Proposals (EIPs). The upgrade’s name combines the Cancun upgrade of Ethereum’s execution layer and the Deneb upgrade on its consensus layer.
The first part, Cancun, focuses on improving how transactions are managed and processed on the execution layer, while the second part, Deneb, aims to improve the consensus layer, which refers to how network participants agree on the state of the blockchain.
The introduction of data blobs via EIP-4844, also known as proto-danksharding, is among the most notable features of the upgrade. Proto-danksharding aims to reduce layer-2 transaction fees by enhancing data availability, a crucial move toward establishing Ethereum as a scalable settlement layer.
The Impact on Fees
However, the promised fee reductions won’t affect Ethereum mainnet users. In the short term, users who wish to benefit from this fee change must sacrifice some decentralization and security by transacting on L2s instead of Ethereum.
Gas fees on the Ethereum mainnet remain high, above 72 gwei. An average swap would cost users $8.615 in gas fees while NFT sales average $14.560 in gas according to Etherscan data.
Conclusion
While the Dencun upgrade is a step in the right direction, it won’t improve all the shortcomings of layer-2 solutions according to Arthur Breitman, the co-founder of the Tezos blockchain. However, it lays essential groundwork for further scaling Ethereum and reducing fees for users of layer-2 networks.
