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Ethereum Cancun-Deneb (Dencun) upgrade, explained

Dencun, an amalgamation of two separate upgrades Deneb and Cancun tackles both Ethereums consensus and execution layers in a single upgrade.

Technically a hard fork in blockchain terminology, the upgrade rolled out at Ethereum epoch 269,568 at 1:55 pm UTC and finalized at 2:10 pm. The upgrade is set to significantly slash the transaction fees of layer-2 solutions and boost the scalability of Ethereum.

The objective of the Deneb upgrade is to augment the consensus layer, which deals with how network participants agree on the state of the blockchain. Cancun, on the other hand, improves the way transactions are managed and processed on the execution layer. The Dencun upgrade came nearly a year after the Shanghai upgrade in April 2023, which enabled Ether (ETH) holders to unstake ETH, which was locked into the network.

Burgeoning gas fees on Ethereum have necessitated remedial measures on the part of Ethereum developers. While layer-2 solutions offered Ethereum a path to scalability by processing transactions off the main chain, gas prices on L2 solutions remained a hurdle for widespread adoption.

Dencun unveils proto-danksharding, which will benefit L2 networks such as Polygon, Arbitrum and Optimism, among others. The key feature of Dencun, proto-danksharding focuses on making layer-2 transactions significantly cheaper, paving the way for massive scalability improvements on Ethereum. It is also important to note that shard chains are no longer part of the Ethereum roadmap.

Proto-danksharding, a stepping stone toward full danksharding, lets layer-2 solutions on Ethereum store bulky transaction data off-chain like in a temporary storage locker lowering fees for users on L2 solutions by keeping the main Ethereum network free for essential transactions.

Proto-danksharding, which has introduced data blobs via Ethereum improvement proposal (EIP)-4844, is the most notable feature of the upgrade.

Data blobs are a novel solution intended to improve the efficacy of L2 transaction data storage. Currently, L2 solutions use transaction calldata, which the upgrade will replace with blob data. Calldata stores limited transaction data on-chain, which needs to be retained by the nodes forever, significantly increasing the burden on validators.

Proto-danksharding is a novel technique that removes the limitations of the present on-chain data storage system, opening up a vastly more effective data management system. By utilizing data blobs specifically designed to manage large volumes of data outside the Ethereum blockchain, rollups benefit from more scalable data storage.

The new rollup transaction storage method is expected to reduce the data overhand on Ethereum nodes. It reduces network congestion and optimizes network size for better performance. Additionally, lower gas prices will increase the usability and efficacy of L2 applications. Moreover, as blobs are pruned after about two weeks, Ethereum validator nodes can optimize disc space usage.

EIP-4844 also introduces cryptographic tools like the KZG commitment scheme. These tools ensure the off-chain data stored in blobs can be efficiently verified as valid (without actually revealing the data itself), maintaining the networks security.

Although Ethers price dipped following the upgrade, Dencun is regarded as a significant advancement toward resolving Ethereums scalability issues.

Dencun paves the way for a more affordable and accessible Ethereum ecosystem. There are various reasons behind why it is important, including:

Dencun introduced a technique for layer-2 scaling solutions based on Ethereum that reduces transaction fees. These layer-2 networks bundle transactions to cut expenses before transferring them to the main Ethereum blockchain. The primary functionality of Dencun, proto-danksharding, proposed via EIP-4844, lowers the costs of layer-2s by enabling them to keep specific transaction data off-chain.

Dencuns proto-danksharding introduces essential concepts necessary for full danksharding, the ultimate sharding solution for Ethereum, even though it does not implement sharding itself. As mentioned, it introduces blob transactions with off-chain storage to handle bulky data and reduce fees. Additionally, cryptographic schemes allow efficient verification of this off-chain data.

Moreover, Dencun implements fee-reduction algorithms for layer-2 solutions, which are essential for later fee management within shards. Lastly, it lays the groundwork for a future where transaction data and processing are separated, a core principle of sharded systems.

With significantly lower transaction fees, layer-2 solutions on Ethereum will become more attractive to users, which could lead to broader adoption of Ethereum for various applications, such as nonfungible tokens (NFTs) and decentralized finance (DeFi). Additionally, reduced fees on layer-2 solutions demonstrate how Ethereum constantly evolves and helps it remain competitive with other blockchains.

Dencun simplifies consensus processes and transaction handling. As a result, developers may find it simpler to create and implement decentralized apps (DApps) on Ethereum. A more seamless development process may encourage increased innovative projects on the Ethereum network.

Although security improvements were not the Dencun upgrades primary emphasis, it includes several upgrades to improve Ethereums security posture. One aspect of Dencun involves EIP-4788, which serves as a communication link between Ethereums consensus layer, where validators safeguard the network, and the execution layer, where transactions are processed. It might be more challenging for attackers to take advantage of weaknesses in either layer in the presence of robust communication between these layers.

EIP-6780, also part of Dencun, changes how smart contracts SELFDESTRUCT function operates. A smart contract can practically destroy itself because of this feature. By making it more difficult for attackers to abuse this feature for nefarious ends, the modification may increase the general security of Ethereum smart contracts.

The Dencun upgrade marks a significant step forward for the Ethereum ecosystem, benefiting both users and developers.

Proto-danksharding lowers costs for layer-2 scaling solutions based on Ethereum, offering users a more cost-effective experience, especially when using NFTs and DeFi services.

Layer-2 solutions bundle transactions before sending them to the main Ethereum blockchain, and Dencun enables them to keep some transaction data off-chain to save costs.

Dencun streamlines transaction handling and consensus mechanisms for developers, which translates to a smoother development experience, making it easier and faster to build and deploy DApps on Ethereum. Enhanced developer experience further unlocks a wave of innovative projects, further enriching the Ethereum ecosystem.

In addition to its immediate advantages, Dencun sets the stage for further developments by introducing critical concepts needed for full Danksharding (as discussed above), which is the ideal way to address Ethereums scalability issues.

Sharding essentially splits the Ethereum blockchain into smaller partitions, allowing for parallel processing of transactions and significantly increasing throughput. In essence, Dencun brings Ethereum closer to becoming a truly scalable and user-friendly platform, poised for broader adoption and a more vibrant future.

Ethereums roadmap to full danksharding is a staged approach, with Dencun being a crucial first step. The following milestones will involve building upon the concepts introduced by proto-danksharding.

Developers will concentrate on innovations simplifying block production, such as proposer-builder separation. They will also work on data availability solutions, ensuring that off-chain data may still be verified if certain validators are offline. Finally, a complete Danksharding system will divide the Ethereum blockchain into shards, each of which will handle a distinct set of transactions. This parallelization will make massive scalability possible.

Up next on Ethereums roadmap is the Petra upgrade, merging Prague and Electra. While specifics are still under discussion, potential features include Verkle trees for efficient data storage and laying the foundation for The Verge, which aims to simplify block verification. This focus on scalability paves the way for a more user-friendly Ethereum.

The precise time to full danksharding is unknown; estimates range from a few years to a decade. Nonetheless, Dencuns successful implementation shows the Ethereum communitys commitment to ongoing development. Like Dencun, every milestone along the journey offers advancements and prepares the road for a scalable and future-proof Ethereum.

See more here:

What is the Ethereum Dencun upgrade, and why is it important? - Cointelegraph

Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.

As Ethereum experiences fluctuations, with its value recently descending from a high of $4,000, investors are diversifying their portfolios by turning towards DeeStream (DST), attracted by its novel approach in the crypto space.

Ethereum (ETH) has been plummeting after reaching $4,000 price days ago, with the token floating around $3,000 $4,000. Market holders thought that it was for the greater good when the token surpassed $4,000 and believed it was going towards a new peak. Ethereum is currently trading at $3,586, down by 8.17%. Those holders who diversified earlier are now into some good profit, while new ones are hopping into DeeStream (DST).

Most of February and the first part of March was a bullish run, and now, top analysts are wondering how long the bearish market will run. If it extends till Bitcoin (BTC) halving, that means the aftermath of the bullish market, especially on Bitcoin halving, will boost many market tokens, and DeeStream is on course to become a promising crypto. Market users can get a DeeStream token at $0.055 in stage two of the presale.

While the Ethereum market price goes down, holders are going to other tokens, especially DeeStream, in order to get a square of what the token offers. Ethereums positive green market run might have ended, but holders can get other tokens and achieve the incoming return on investment.

Though crypto analysts believe that Ethereum could reach a new peak in Q2, what matters now is the outcome of the halving. The declining market activities for Ethereum have posed a market problem, with the market cap down by 2.69% and trading volume down by 43.71%.

Ripple holders are predicting that DeeStream could become one of the best things to happen to streaming in the crypto market. Despite the SEC legal case and current bearish market, Ripple (XRP) trades at $0.6053, and if the bullish market finally arrives, Ripple could finally get past $1. Market observers hope Ripple holders benefit extremely because these holders have had to endure the hectic fluctuating crypto market.

DeeStream streaming platform has been gaining numbers daily with crypto whales, getting into the platform for the streaming solution it provides for streamers. One of the platforms best features is the decentralized governance that allows users to suggest changes and vote for them. Also, the platform wont censor users and will allow them to speak freely.

The project will ensure low streaming fees on the platform when transacting and offer better security. It has generated about 14,700 registered users and over 2,600 holders who are interested in benefiting from what the platform has to offer. DeeStream also has the chance to become a blue-chip crypto.

On the platform, transactions are secured, transparent, and immutable. Users are very much allowed to view their transactions and records, thereby making it a great place to trade. In conclusion, DeeStream will be offering a low-cost platform for creators and users.

Find out more about the DeeStream presale by visiting the website.

Disclosure: This content is provided by a third party. crypto.news does not endorse any product mentioned on this page. Users must do their own research before taking any actions related to the company.

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DeeStream continues to attract Ethereum, Ripple investors - crypto.news

A recent paper by Austin Adams, a researcher at Uniswap Labs, contends that swapping and liquidity provisions on layer-2 networks are significantly cheaper than on Ethereums mainnet.

According to the paper, chains like Arbitrum created over three times more liquidity positions this past year than Ethereum.

The report further shows that, when looking at USDC/ETH pools, 97.5% of swappers with trades under $125,000 did better on layer-2s than on Ethereum mainnet.

Read more: Uniswap releases new tools for swappers

This is likely because retail swappers, with trades under $125,000, are much more likely to benefit from the lower gas costs and higher liquidity concentration on layer-2s than the mainnet.

It is worth noting that Ethereum is responsible for only around 25% of the total transaction count but over 60% of the volume demonstrating that, despite boasting higher transaction volumes, network activity is still predominantly on layer-2s.

Additionally, layer-2s often offer shorter block times, or the time it takes the network to produce a new block. On Ethereum today, the average block time is roughly 12 seconds. On Arbitrum, on the other hand, the average block time is around 0.26 seconds.

Read more: Cheatsheet: Ethereum on track to burn $10B ETH over next year

The shorter the block time, the less opportunity there would be for the market price of an asset to move, meaning that arbitrage attempts will likely not be as profitable.

Less successful arbitrage attempts are a good thing for liquidity providers, who are making 20% more in returns from arbitrage on layer-2s than they are on mainnet, the paper shows.

Although there are significant benefits for users to trade on layer-2s, the paper does note drawbacks. One primary concern is the centralized sequencer.

Read more: Shared Sequencing could help unite blockchain rollups

The paper notes that many existing rollups today still operate under one centralized sequencer. This sequencer could take advantage of the situation by reordering transactions to maximize MEV profits for themselves.

Additionally, optimistic rollups today do not have decentralized fraud proofs, which are necessary to correct sequencer errors.

Read more: So your layer-2 is secured by Ethereum what does that mean?

Finally, there are over 40 layer-2 ecosystems present today. The proliferation of these networks means further liquidity fragmentation, as they cannot trustlessly speak to one another in real time. This means that they will need to rely on bridging infrastructure, which is both costly and time-consuming.

The developers of layer-2 networks are working to address these concerns. Optimism recently revealed a permissionless fault-proof system, while shared sequencer networks like Espresso have explored ways to diversify sequencers for rollups.

For decentralized markets to fulfill their full potential, aggregate trading costs must continue to decline and user experience must continue to improve, Adams wrote. We believe that the studied generalized layer-2s still have many benefits that users can utilize today, and any future improvements will only continue to benefit the trading experience.

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See the article here:

It's cheaper to swap on layer-2s than on Ethereum, Uniswap research finds - Blockworks

Key points:

According to Craig Salm, Grayscales Chief Legal officer, the firm has submitted an amended Form 19b-4 filing for its Ethereum ETF application. Salm considers the move a crucial step in Grayscales effort to upgrade ETHE to start trading on the New York Stock Exchange (NYSE) Arca.

We just filed @Grayscale Ethereum Trust's amended Form 19b-4 filing. This is an important step in our effort to uplist $ETHE to NYSE Arca.

Investors want and deserve access to #Ethereum in the form of a spot Ethereum ETF and we believe the case is just as strong as it was for pic.twitter.com/fOwJlHS71o

In a post on X, Salm noted that investors want and deserve access to Ethereum as a spot Ethereum ETF. He believes the argument for an Ethereum ETF is just as strong as it was for the spot Bitcoin ETFs.

Grayscales move towards actualizing a spot Ethereum ETF started last October when the firm filed with the SEC, requesting to swap its ETHE for a spot Ethereum ETF. The SEC has kept the investment companys ETH ETF application on hold, citing ongoing scrutiny.

Along the line, the SEC has set repeated deadlines, seeking ample time to access Grayscales Ethereum ETF proposal, with the next deadline slated for May 2024. That is consistent with the SECs procedures, considering the steps before it approved the spot Bitcoin ETF proposals earlier this year.

If approved, the spot Ethereum ETF could become one of the significant events around the flagship altcoin in the current bull cycle. Many users believe it could have a similar impact as the spot Bitcoin ETF, which attracted inflow into Bitcoin.

ETH traded for $3,720 at the time of writing, dropping by 10% from its recent high of $4,095, according to data from TradingView. Meanwhile, many crypto users believe an ETF approval would form the tailwind for significant growth in ETH, in addition to the upcoming Bitcoin halving expected to impact the entire cryptocurrency market.

Excerpt from:

Grayscale Files Crucial Ammendment on Spot Ethereum ETF - TradingView