Ethereum Dencun, the largest upgrade to Ethereum since The Merge, has just been officially launched on 13th March 2024.
Through this update, Ethereum promises that transaction speeds will increase and transaction costs will decrease drastically due to improved communication quality between Ethereum and its layer-two blockchain.
After implementation, these promises have indeed been fulfilled, although there was an incident with one of Ethereum’s layer-two blockchains.
Ethereum Dencun Successfully Implemented
Ethereum Dencun has been successfully implemented with its primary Ethereum Improvement Proposal (EIP) being EIP-4844.
EIP-4844 is the most anticipated update as it introduces a new mechanism called Proto-DankSharding through an innovation called Blob.
Blob itself is a new data transfer mechanism that essentially enhances communication efficiency between Ethereum and its layer-two blockchain.
Through Blob, data transfer from Ethereum to its layer-two blockchain can be done in batches rather than one by one, thus increasing transaction speeds.
Additionally, through Blob, Ethereum’s layer-two blockchain no longer needs to store transaction data from the validated Ethereum blockchain, unlike before, reducing costs by eliminating the need for storage space for that data.
A key developer from the Ethereum Foundation has officially announced on Twitter that the launch of Blob was successfully executed on 13th March 2024 and has been smooth since early morning.
Through this mechanism, transaction costs on layer-two blockchains that assist Ethereum transactions are said to continue to decrease.
Unfortunately, after this update, there was an incident on one of Ethereum’s layer-two blockchains, namely Blast.
Blast experienced temporary downtime for several hours after the Dencun update, rendering its users unable to transact.
This temporary disruption is still considered normal albeit disappointing, as Blast is still relatively new and requires many future improvements.
The good news is that on other layer-two blockchains, the update has been implemented successfully without any issues.
Drastic Decrease in Transaction Costs
Transaction costs have also significantly decreased, with several blockchains already implementing this Blob mechanism.
Starknet was among the first to report that transaction costs for processing Ethereum transactions on its network have dropped to around $0.03 to $0.05 after the Ethereum update.
There are also reports that transaction costs on Base, another layer-two blockchain focused on supporting Ethereum, have dropped from around $0.44 to $0.00048 per transaction.
Jumper Exchange, a decentralized exchange (DEX) operating on multiple blockchains based on Ethereum Virtual Machine (EVM) and Solana, also reported significant differences on several blockchains after the Dencun update.
There is a full list where transaction costs on several layer-two blockchains have dropped below $1, with Optimism being the cheapest as promised by Vitalik Buterin, aiming to bring transaction costs below $0.01 per transaction.
Unfortunately, some are still above $0.1, such as Arbitrum, the layer-two blockchain that processes the most transactions from Ethereum compared to other layer-two blockchains.
However, it is likely that transaction costs will continue to decrease, so in the future, transaction costs on all layer-two blockchains supporting Ethereum could meet Vitalik Buterin’s statement of falling below $0.01.
On the main Ethereum network itself, transaction costs are still high, around $20. Therefore, it should be understood that Ethereum’s current main focus is improving its relationship quality with its layer-two blockchains rather than its own network.
Regarding transaction speeds, all layer-two blockchain speeds still depend on their individual speeds, so there are still no signs of achieving 100,000 transactions per second, as stated by Vitalik Buterin.
Nevertheless, the decrease in transaction costs is evidence that Ethereum continues to evolve and will continue to grow alongside the improvements and innovations made in this update or future updates.
