Dencun Upgrade: Inside the Bits of Ethereum Hard Fork That Haven’t Made the Headlines

Key Takeaways

• The Dencun upgrade introduced various Ethereum Improvement Proposals (EIPs).
• Despite the technical success, some community members expressed concerns over Ethereum’s price movement.
• Major rollups like Base, Optimism, zkSync, and StarkNet are already leveraging fee reduction.
• Discussions about the next major upgrade, Pectra, have begun.

The Ethereum network underwent a significant upgrade known as Dencun, aiming to enhance scalability, efficiency, and security. While the headlines have focused on the technical advancements, there’s more to the story, including the community’s reactions and future implications.

EIP-4844 and Its Impact

The discussion around the Dencun upgrade, activated on March 13, was centered around EIP-4844. The EIP introduced proto-dank sharding to reduce gas fees for Layer 2 data transfers while improving its capacity to process them.

This upgrade was crucial for Ethereum’s scalability, making it more efficient and cost-effective for users and developers.

Following the upgrade, some users voiced dissatisfaction with the Ethereum price’s volatility, suggesting a rollback of the Dencun upgrade. Ethereum was unable to achieve a breakthrough above the $4,000 price point until March 15.

However, research on the Dune analytics dashboard  points to L2 fee reduction post-upgrade. The median gas fee, which is the cost to perform transactions, decreased substantially across several platforms. Arbitrum’s fees fell by 71.8%, Base saw a 94.8% drop, and Optimism experienced a 96.7% reduction. Zksync and Zora also saw notable decreases in fees, with Zora’s dropping by an impressive 99.6%.

This reduction in fees is partly due to the implementation of “blobs” in the Ethereum network, which are designed to optimize data storage and reduce costs. The network aims to include an average of three blobs per block to keep fees low.

As a result, DEX trading on platforms like Optimism has seen a substantial reduction. This upgrade has made transactions on Ethereum’s L2 solutions much more affordable, significantly impacting the overall cost efficiency for users and developers alike.

Next Steps Post-Upgrade

In a recent All Core Developers Execution Call, Ethereum Foundation Protocol Support Lead Tim Beiko and other developers reviewed  the Dencun upgrade’s rollout. The upgrade was praised for its smooth implementation, despite minor hiccups like a temporary dip in participation rates.

Beiko noted that, fortunately, there weren’t any significant delays in processing transactions, though there was a small uptick in the number of times the system had to backtrack a bit to keep everything in order.

Meanwhile, the developers are already looking ahead to the Pectra upgrade, discussing potential EIPs and adjustments to further enhance Ethereum’s functionality.

Beiko said in a thread on X, “Goerli will “officially” be sunset in the next month. That said, most validators have already shut down and the network is no longer in a stable state.”

While the Dencun upgrade has been largely successful, some users have reported higher-than-expected gas fees for certain transactions. Andrew Levine, CEO of Koinos Group, said it was expensive to move ETH from L1 to L2, indicating that the upgrade’s benefits might not be fully felt.

Eyes on Ethereum

The Dencun upgrade marks a significant milestone for Ethereum, bringing notable improvements in scalability and efficiency.

However, the benefits of the upgrade might not be fully felt at this time as some community members cite expensive transactions. ETH continues its journey to a scalable, secure, and efficient network. Investors are anticipating a significant price breakthrough before the next major upgrade.

About the Author

Shraddha Sharma

Shraddha has around five years of experience as a financial journalist, focusing largely on the Asian markets. Starting her career in Mumbai, India, as a news trainee and producer, she quickly found her niche in crypto. She is keen on learning how emerging technologies affect the broader markets and enjoys explaining complex financial ideas in a way that's easy to understand.

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