EXPLAINER | The Ethereum Dencun Upgrade, the Latest Effort to Enhance Scalability

Ethereum, the prominent proof-of-stake blockchain, is undergoing a significant upgrade known as ‘Dencun,’ which introduces a new feature called ‘proto-danksharding.’

The Dencun upgrade was activated on the Sepolia testnet at the end of January 2024 following its activation on the Goerli testnet. It constitutes a part of Ethereum’s broader strategy to improve scalability and decrease transaction costs for its users.

Proto-danksharding is designed to lower transaction costs for layer-2 blockchains and diminish data availability expenses, tackling crucial scalability hurdles. It sets the foundation for the eventual deployment of ‘danksharding,’ which seeks to expand these advantages even further.

Following full implementation, Dencun is anticipated to substantially augment Ethereum’s transaction processing capacity, potentially enabling the network to manage over 100,000 transactions per second. This advancement is critical for Ethereum’s capability to accommodate a burgeoning ecosystem of decentralized applications (dapps) and users.

The deployment process for the Dencun upgrade involves activations on different testnets, with the Sepolia, Goerli, and Holesky testnets already concluded.

One notable technical innovation introduced by Dencun is ‘blobs.’ These are designed to decrease the cost associated with rollups on the Ethereum mainnet by compressing transaction data off-chain, thereby reducing storage and processing requirements.

Blobs temporarily store data, which is only necessary for short-term transaction verification, allowing for its eventual deletion to prevent network overload. Secure and efficient data handling is ensured through cryptographic commitments that detect any data alterations.

####Ethereum Outlook