Ethereum

Blast

Arbitrum

Polygon

Celestia

<p>Ethereum just hit the ground running with its latest Dencun upgrade. Being the second most popular blockchain after Bitcoin, Ethereum has released this update to help layer-2 networks like Arbitrum and Polygon grow by lowering their data fees.<a href="https://www.coindesk.com/tech/2024/03/13/ethereum-activates-dencun-upgrade-in-landmark-move-to-reduce-data-fees/" rel="noopener noreferrer nofollow" target="_blank"> </a></p>
<h2 class="wp-block-heading" id="a-new-dawn-for-data-and-fees">A New Dawn for Data and Fees</h2>
<p>At the basis of the Dencun update is a cool feature that is meant to directly attack Ethereum’s notoriously high transaction fees. The addition of “blobs” changes everything because they create a different space on the blockchain for data storing that is not used for transactions and costs much less. Everyone will find this big because it’s Ethereum’s biggest change in almost a year, and it’s all meant to make things easier and cheaper for everyone.</p>
<p>For the layer-2 networks, this is like being handed a golden ticket. These platforms, which work by grouping transactions together before passing them back to the main <a href="https://www.cryptopolitan.com/layer-2-tokens-soar-as-ethereum/" data-type="post" data-id="483162" rel="noopener noreferrer nofollow">Ethereum</a> blockchain, stand to benefit the most. By utilizing blobs for data storage, the upgrade will streamline the process, making it more efficient and, crucially, reducing costs. This, in turn, should trickle down to end-users, who could see a noticeable drop in fees. It’s a win-win situation that could spark a fierce competition among layer-2 networks eager to take advantage of the new setup.</p>
<p>But not everything went off without a hitch. The layer-2 network Blast hit a snag, temporarily halting block production due to issues related to the Dencun upgrade. However, they quickly resolved the matter and promised a detailed analysis soon. This hiccup aside, the upgrade has been met with enthusiasm and optimism by the community.</p>
<h2 class="wp-block-heading" id="shards-and-solutions-ethereum-s-path-forward">Shards and Solutions: Ethereum’s Path Forward</h2>
<p>The Dencun upgrade is Ethereum’s first step into what’s known as “proto-danksharding.” This is an important step toward solving Ethereum’s scalability puzzle. By breaking the blockchain into mini-shards, or smaller chains, Ethereum aims to process transactions more efficiently and at a lower cost. Although the full implementation of sharding is still a ways off, proto-danksharding offers a promising interim solution, especially for data-hungry rollups.</p>
<p>Another interesting development is the boost this upgrade gives to data availability (DA) layers. These new kids on the blockchain block, including names like Celestia and Avail, specialize in storing vast amounts of data for rollups. Proto-danksharding could lower the costs associated with accessing this data, further easing the financial burden on users and developers alike.</p>
<p>The upgrade could also intensify the competition among layer-2 networks as they vie for users by offering lower transaction fees. How this “fee war” will play out remains to be seen, but one thing is clear: Ethereum and its auxiliary networks is set for some significant changes.</p>
<p>Despite these advancements, it’s worth noting that the Dencun upgrade is not a silver bullet. While the upgrade expands the data available for rollups, it doesn’t solve all the challenges faced by layer-2 solutions built on Ethereum. These networks still grapple with throughput limitations and centralization issues.</p>

Ethereum’s Dencun upgrade goes live: Here is a rundown

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