Ethereum developers are preparing the Dencun update, which will bring the biggest code change on the ETH blockchain in over a year.
Dencun update will take place at approximately 16:30 Turkey time (UTC+3).
Dencun, a combination of the project names Deneb + Cancun, consists of two simultaneous updates in the consensus and execution layers of Ethereum.
This transaction, technically known as a “hard fork” in blockchain terminology, is designed to usher in a new era of cheaper fees for the growing number of ancillary networks running on top of Ethereum, called layer-2 (L2) “rollups.”
These changes will come about through the activation of a new Ethereum Improvement Proposal (EIP) called “proto-danksharding” or EIP-4844, which is designed to improve the chain's ability to process data from layer 2 networks.
Components of the Dencun update had been planned for several years, but the developers had delayed it from the original target of late 2023 due to some engineering concerns. Since then, developers have tested this new package on three separate testnets, and most of these tests went smoothly.
Dencun includes a number of code changes, but the biggest comes with “proto-danksharding”, which introduces a new method called “blob” for storing transaction data on Ethereum. Layer-2 networks such as Arbitrum, Optimism and Polygon will benefit most from Dencun.
After Dencun, layer-2s will be able to send data to Ethereum within private blob space, rather than having to pay a higher cost to compress data into traditional transactions. In theory, this could help L2s parse more data more efficiently, thus reducing fees for end users.
Proto-danksharding will also benefit a new class of blockchains entering the Ethereum fray, called data availability (DA) layers. DA layers such as Celestia, EigenDA, and Avail help networks store large amounts of data, and layer-2s often use these layers to store transaction data. Proto-danksharding could make DA data download costs cheaper.
This update will be recorded as the biggest update in ETH history after the Proof of Stake update that ETH underwent in September 2022.
*This is not investment advice.