The Changes Brought by Ethereum's Dencun Upgrade

The term “Dencun” is a portmanteau of “Cancun” and “Deneb.” “Cancun” represents the name of the Ethereum execution layer upgrade, while “Deneb” refers to the name of the protocol layer upgrade. Together, the Cancun upgrade and the Deneb upgrade are collectively referred to as the Dencun upgrade.

The Dencun upgrade aims to increase data storage and reduce costs. It is centered around EIP-4844 and includes five improvement proposals: EIP-1153, EIP-4788, EIP-5656, EIP-6780, and EIP-7514.

EIP-4844:

EIP-4844, also known as “proto-danksharding,” is the core of the upgrade. This proposal introduces a new transaction type that can accept “blobs” data that is persistently stored for a short time on beacon nodes. This improvement creates more space for blockchain expansion and is forward-compatible with the Ethereum scalability roadmap. Its significance lies in reducing Layer 2 fees while improving performance.

EIP-1153:

EIP-1153 introduces a temporary storage opcode. When using temporary storage, the values are discarded after each transaction processing and are never serialized into storage.

EIP-4788:

EIP-4788 aims to improve the design of bridges and staking pools. This proposal exposes the beacon chain block roots in the Ethereum virtual machine. Beacon chain block roots are a form of accumulators used to prove arbitrary consensus states.

EIP-5656:

EIP-5656 introduces a new instruction that allows developers to copy a specified memory area.

EIP-6780:

EIP-6780 changes the functionality of the SELFDESTRUCT opcode. Previously, this opcode made extensive changes to the account's state, especially by removing all code and storage. While developers considered removing the SELFDESTRUCT opcode in the past, this proposal presents an alternative solution.

EIP-7514:

EIP-7514 aims to slow down the growth of validators by limiting the Max Epoch Churn Limit. This shifts the maximum validator growth rate from exponential growth to linear growth, allowing more time to study the future of Ethereum staking and solutions while managing validator growth.

According to the latest information, the Dencun upgrade is unlikely to be completed within this year and may be postponed to the first quarter of 2024. This delay is due to the Ethereum Holesky testnet experiencing delays during its launch last month, leading to a general belief that the likelihood of completing the Dencun upgrade by the end of 2023 is low.

An anonymous Prysm developer, Potuz, confirmed in the latest core developer conference call that the Dencun upgrade is unlikely to take place on the mainnet in 2023. He noted that in the past few months, 10 developer networks (devnets) for testing the upgrade had encountered consensus issues, with none making smooth progress.

In a report released on Thursday, Goldman Sachs suggested that the Ethereum Dencun upgrade may be implemented in the first quarter of 2024, marking the next step for Ethereum to become a scalable settlement layer. The report stated that the primary impact of the Dencun upgrade would be to improve the data availability of Layer 2 rollups through proto-danksharding, thereby reducing the cost of rollup transactions and passing those cost savings on to end users.