How does the Ethereum Dencun upgrade achieve breakthrough scalability through EIP-4844

As the primary platform for smart contracts and decentralized applications, Ethereum faces a long-standing challenge: scalability bottlenecks. As user growth and network activity surge, transaction confirmation speeds slow down, gas fees skyrocket, and this severely hampers large-scale applications. However, the upcoming Dencun upgrade brings hope—through a series of Ethereum Improvement Proposals (EIPs), especially EIP-4844, this innovation promises to significantly reduce transaction costs and improve network throughput.

Core Goals and Mechanisms of the Dencun Upgrade

The Dencun upgrade is part of Ethereum’s roadmap phase “The Surge,” specifically targeting network scalability issues. It introduces multiple EIPs to address transaction throughput and data management bottlenecks. The most notable is EIP-4844 (also known as Proto-Danksharding).

This upgrade offers three core advantages for the Ethereum ecosystem:

1. Significantly Faster Transactions — enabling lightning-fast processing in DeFi and NFT sectors, attracting more users and developers to the ecosystem

2. Drastically Reduced Gas Fees — Proto-Danksharding technology lowers computational costs for transaction validation, making network usage more economical for ordinary users and developers

3. Unlimited Scalability Potential — laying the foundation for full sharding and leaving room for future network optimizations

The Significance of EIP-4844: Proto-Danksharding Innovation

EIP-4844 is not Ethereum Foundation’s first attempt at scaling. Early solutions like State Channels and Plasma offered improvements but faced issues such as liquidity shortages and complex user experiences. In contrast, EIP-4844 adopts a more pragmatic approach: introducing the concept of BLOB data.

BLOB Data — acts as a temporary storage container for transaction data. These data are not permanently stored on the main chain but are processed off-chain, relieving storage pressure on the main chain. Coupled with Rollup technology, EIP-4844 protects the security of main chain data while greatly increasing transaction throughput.

This innovative proposal offers four major advantages:

1. Doubling Transaction Throughput — EIP-4844 is expected to increase Ethereum’s throughput from the current 15 transactions/sec to hundreds of transactions/sec, significantly shortening transaction waiting times

2. Revolutionary Drop in Gas Fees — Off-chain processing greatly reduces the computational resources required per transaction, with costs potentially dropping to one-tenth of current levels

3. Dual Security and Decentralization Guarantees — Unlike compromise solutions like State Channels and Plasma, critical data remains on the main chain, with cryptographic proofs ensuring transaction immutability

4. Sustainable Scalability Framework — laying the groundwork for full sharding and further optimizations in the future

Other Key EIPs Included in the Dencun Upgrade

In addition to EIP-4844, four other important improvements are noteworthy:

EIP-1153 (Non-Consensus Fork Upgrade) — allows network updates without hard forks. Past upgrades often caused network splits (e.g., the 2016 DAO fork). The new mechanism makes updates smoother and less risky.

EIP-4788 (State Data Certification) — improves communication efficiency between consensus and execution layers by issuing data certificates instead of full state information, accelerating data exchange and reducing network load.

EIP-5656 (MCOPY Opcode) — optimizes memory operations in smart contracts, making data copying more efficient, thereby speeding up execution and reducing gas consumption.

EIP-6780 (SELFDESTRUCT Gas Accounting) — precisely calculates gas costs for contract self-destruction, preventing re-entrancy attacks and other security vulnerabilities, enhancing smart contract security.

Direct Benefits for Layer 2 Ecosystem

The Dencun upgrade has the most direct impact on Layer 2 solutions. Rollups can leverage the low-cost data storage provided by EIP-4844 to significantly reduce transaction costs.

It is expected that this upgrade will reduce Rollup transaction fees by ten times, which is a huge boon for L2 platforms like Arbitrum, Optimism, Polygon, Mantle, and Metis. Lower costs mean more users are willing to migrate to Layer 2, driving explosive growth in DeFi, gaming, and on-chain trading applications.

Additionally, the upgrade is expected to triple Ethereum’s data availability, which is especially critical for ZK Rollups and other advanced solutions, potentially solving the long-standing issue of data availability costs.

Impact on Various Participants

Developers — benefit from lower deployment and execution costs, enabling the development of more complex and efficient applications, fostering innovation

DeFi Users — enjoy significantly lower transaction fees and faster confirmation speeds, improving lending, trading, and liquidity mining experiences

NFT Creators and Collectors — face lower creation and trading costs, making markets more active and increasing artists’ revenue potential

Node Operators and Validators — although reward structures may adjust, Dencun strengthens Ethereum, supporting long-term value growth, and creates new opportunities for validators involved in BLOB data protection

Next Steps in the Ethereum Roadmap

The Dencun upgrade is scheduled for launch on March 13, 2024. While this upgrade is highly significant, it is only the beginning of Ethereum’s full vision. According to the official roadmap, Ethereum Foundation plans to continue advancing after “The Surge” phase:

• Scourge — focusing on censorship resistance and MEV risks
• Verge — optimizing block validation
• Purge — reducing node operation costs
• Splurge — other innovative improvements

Current Data and Outlook

According to the latest data, ETH is currently priced at $3.31K, with a 24-hour decline of -0.91%, 24-hour trading volume of $706.70M, and a circulating market cap of $399.48B. During the Dencun upgrade launch, volatility may increase—buyers may seek to bottom out, while traders might adopt a “sell the news” strategy. In the long term, successful implementation of the upgrade is expected to positively impact ETH’s value.

Key Risks and Security Considerations

The Dencun upgrade has been thoroughly tested on testnets like Goerli, Sepolia, and Holesky, with security measures ensuring only authorized validators can access BLOB data. Ordinary ETH holders do not need to take action, but Ethereum node operators should update their clients.

As with any major upgrade, there are technical risks that could cause network delays or disruptions, but careful testing and community feedback have minimized these risks.

Summary

The Dencun upgrade marks a key milestone in Ethereum’s scalability journey. Through the Proto-Danksharding (EIP-4844) technology, it promises to accelerate transactions, lower costs, and greatly increase throughput. But this is just the beginning—full sharding and stateless Ethereum in subsequent phases will continue to expand the network’s capabilities.

For participants in the Ethereum ecosystem, this is an exciting moment. Whether developers, traders, or holders, everyone will benefit from the efficiency and cost improvements brought by this upgrade. Keeping an eye on Ethereum’s evolution may be the best way to understand the infrastructure of the next-generation financial system.