Dencun Upgrade


Dencun is essentially the fusion of two separate upgrades - 'Deneb' and ‘Cancun’ together targeting improvements across Ethereum's consensus and execution layers.

What Is the Dencun Upgrade?

The Dencun upgrade is Ethereum's latest major upgrade that follows the Merge and Shapella upgrades over the last two years. Dencun is essentially the fusion of two separate upgrades - 'Deneb' and ‘Cancun’ together targeting improvements across Ethereum's consensus and execution layers. While Deneb focuses on the consensus layer, Cancun deals with the execution layer.  

The core motivation behind the Dencun upgrade is enhancing Ethereum's scalability and efficiency. This includes boosting transaction speeds, reducing network fees, optimizing smart contracts, and enabling advanced scaling solutions. Beyond scalability, Dencun also aims to heighten security, improve the staking experience, and make Ethereum's architecture more robust.

At a high level, Dencun introduces a series of Ethereum Improvement Proposals (EIPs) under its umbrella, with the central one being EIP-4844 which enables 'proto-danksharding'. This essentially allows rollups or Layer 2 solutions built atop Ethereum to post data on-chain at almost 10 times lower costs.  

How Does Proto-Danksharding Boost Scaling? 

At the heart of the Dencun upgrade lies EIP-4844 which introduces a method called proto-danksharding to improve Ethereum's scalability. To understand how it achieves this, we first need to examine what proto-danksharding actually is. 

Fundamentally, it allows rollups to post data on Ethereum in a more efficient manner by introducing a new transaction type called blobs. Blob refers to a large binary data object that contains compressed transaction data from rollups in an off-chain batched format. 

So instead of submitting the entire data like today, the blob transaction just posts a small reference pointer to the blob along with some key details. The actual blob itself is only stored temporarily rather than permanently.

This method essentially enables Ethereum to handle large amounts of data without overburdening the network or execution layer. As a result, calldata costs are reduced by 10 times for rollups when posting transactions. 

Key Benefits of Blob Transactions

The data within the blobs itself provides some unique advantages. First and foremost, since blobs are stored in a compressed temporary format, they take up far lower permanent storage on the Ethereum consensus layer. This greatly reduces the overhead burden, especially as transaction volumes grow.

Secondly, the cryptographic references ensure that even though the underlying data is not perpetually stored, any unauthorized modifications are easily detectable. This retains the security guarantees without excessive data replication.

Finally, the verification process also becomes simpler because execution engines only need to check the small hash pointer rather than processing entire datasets. Together, these blob transaction properties enable more scalable and efficient data handling.

What Changes Are in Store for Staking?

The Dencun upgrade also introduces some notable improvements for the staking experience on Ethereum. Two key EIPs - EIP-7044 and EIP-7045 target enhancements in voluntary exits and validation flexibility respectively. 

EIP-7044 ensures that all pending voluntary exit requests remain perpetually valid across upgrades to avoid validators having to submit exits again after forks. This provides continuity. Also, it allows for trigger-based automated exits if certain conditions are met e.g. prolonged inactivity.

EIP-7045 increases the window size for validators to send signed attestations from 32 slots to 64. This provides more flexibility for validators to submit votes on proposed blocks, accelerating inclusion speeds. As a result, block confirmation times are faster.

Additionally, late attestations also remain eligible for inclusion in this expanded window duration. This bolsters censorship resistance while allowing validators some leeway.

Together, these improvements around voluntary exits and attestations help deliver a smoother staking experience while enhancing user control and network resilience.