Ethereum upgrade “Dencun” improves scaling through “Proto-Danksharding” – BitcoinBlog.de – the blog for Bitcoin and other virtual currencies

“Dencun” is scheduled to go live on March 13th: The Ethereum upgrade will introduce, among other things, proto-Dank sharding. This will reduce fees on rollups – and mark the first step towards full sharding.

The Ethereum Foundation announces the upcoming Dencun upgrade. The upgrade, which is highly anticipated due to “proto-Danksharding,” is scheduled to go live on March 13th. Since this is a hard fork, all full nodes and stakers must upgrade their client beforehand.

Dencun implements nine EIPs (Ethereum Improvement Proposals). Most of them improve details or correct minor errors. EIP-4844, however, is considered a milestone. It aims to usher in a new era of scaling through “proto-thanksharding” – not just for Ethereum, but for crypto in general.

Rollups and their limits

What is it about? To understand Proto-Dunksharding, you should know a few things about how Ethereum scales. The “mainchain” – also called the “beacon chain” – only has a limited capacity. Most transactions already run on so-called “Layer-2”, which primarily means “rollups”.

A rollup is a type of compression of transactions: While the transactions themselves take place on the rollup server, it places evidence of them on the blockchain at regular intervals, which the stakers and nodes can verify.

Rollups have the big advantage that they leave the Ethereum user experience unchanged and are easy to integrate into wallets. All of the important “Layer-2” of Ethereum are rollups – such as Arbitrum, Optimism, Starknet, Base – and they already scale Ethereum by a factor of almost 10: For every transaction processed on the main chain, there are currently 9.3 transactions on a rollup.

Nowhere has scaling at higher levels been as successful as on Ethereum. But the technology reaches its limits: It reduces the onchain footprint of transactions – but does not completely eliminate it. A certain part of the transaction data will always leak through to the main chain through the evidence. As the fees on Ethereum rise, they also rise on the rollups, and especially for complex transactions that involve smart contracts, you quickly pay a mid-double-digit cent amount.

This is not a wild problem, but it is somewhat disruptive and prevents Ethereum from fulfilling its potential as a “blockchain for everything.”

Half way to sharding

EIP-4844 is now supposed to change this with Proto-Danksharding. This is not the final solution, but promises to alleviate scaling pain in the short term.

The long-term plan is to reserve a certain amount of data in each Ethereum block for the rollup evidence – around 16 megabytes – and to sharply separate this data from the rest of the block so that not every full node has to download and store it. This process is called sharding. You can imagine it like an extra lane for public buses.

Proto-Danksharding is now taking the first step towards this: It introduces the corresponding transaction format and reserves space for it in the blocks, but without clearly separating it from the rest.

So far, the evidence from the rollups has been saved as “call data”. This is a data format that can be fully addressed by the EVM (Ethereum Virtual Machine) and therefore must be stored on the blockchain forever. With Proto-Danksharding, the rollups can now save the data as a “blob”: This is a format that is not directly available to the EVM, but can be verified by the nodes.

About 0.35 megabytes of blob data should be reserved per block. These must be downloaded by all nodes in order to verify them. However, since they are irrelevant for future operations, the nodes can delete them after a relatively short period of time.

Most importantly, the reformatting decouples the rollup data from the general fee market. You no longer compete with all calldata transactions, only with other blob data. Accordingly, fees on rollups are expected to drop significantly after the Dencun upgrade.