Ethereum's Dencun Upgrade: Explained

Since its inception, Ethereum has undergone various upgrades to enhance its network. Created as a smart contract enabled distributed computing platform for the development of decentralized applications (dApps), Ethereum soon faced scaling challenges as a result of its high adoption rate, which required a rethink of how it would deliver on its objectives.

While each of the upgrades to the Ethereum network has been executed through a hard fork, they have generally stayed within Ethereum’s roadmap and focused on different parts of the Ethereum network. For instance, the Ethereum Shanghai upgrade was designed to enable ETH validators and stakers to withdraw their staked ETH from the Beacon Chain.

Now, Ethereum developers are gearing up for the Ethereum Dencun upgrade that’s expected to improve on a myriad of unresolved matters, such as scalability and network security, that weren’t addressed with the Shanghai upgrade. The Dencun upgrade is expected to offer a much more user-friendly and seamless experience for end-users and developers by addressing Ethereum’s scalability challenges.

Before You Get Started

As we take an in-depth look at what the Dencun upgrade is and its benefits to the Ethereum network, remember that you can buy, sell, and manage your ETH tokens using your Trust Wallet.

Trust Wallet can be downloaded as a mobile app, or you can install the Trust Wallet Extension for your desktop browser. For this guide, we'll focus on creating a new wallet using the Trust Wallet mobile app.

Step 1: Get the most updated version of Trust Wallet

Below you’ll see the steps to create a new wallet, but you could just as easily import an existing Web3 wallet to Trust Wallet, if that’s your preference.

To create a new wallet:

• Download, install and then open Trust Wallet

• Choose “Create a new wallet”.

• Choose your backup option, or you can optionally postpone the backup process by choosing “Skip”.

• Start using Trust Wallet.

Step 2: Buy crypto using your Trust Wallet

• Select the “Buy” button, from the wallet’s Home screen.

• Choose Ethereum (ETH), and enter the amount you wish to purchase.

• Select the third party provider & payment method you’d like to use.

• Select “Buy ETH”, and then follow the steps to complete the purchase.

What is the Dencun Upgrade?

The Dencun upgrade is the next significant update to the Ethereum protocol that seeks to enhance the efficiency, security, and scalability of the Ethereum blockchain. Dencun is a blend of the names of the planned hard forks for the Ethereum consensus layer (Deneb) and its execution layer (Cancun).

The Cancun upgrade will include a major update for Ethereum. The update will center on the suggested modifications involving five different Ethereum Improvement Proposals (EIPs) set to improve several aspects of Ethereum’s execution layer. On the other hand, the Deneb update will be centered on Ethereum’s consensus layer and will complement the Cancun upgrade.

The Dencun upgrade should increase Ethereum's transaction speed from 30 transactions per second (TPS) to 100,000. Hitting the 100,000 TPS speed will be proof that the Ethereum blockchain is on course to achieving ‘The Surge’ phase of its tiered roadmap. But for Ethereum to have a successful upgrade of such magnitude, its developers will need to carry out extensive testing to ensure a smooth transition during the implementation phase.

To this end, Ethereum has announced, via an official note on its GitHub page, that it will begin testing the Dencun upgrade on the Goerli testnet on January 17, 2024. The Goerli testnet is a test network for the Ethereum blockchain that was launched in 2019. It was created to imitate the behavior of the Ethereum mainnet.

The Dencun update will thereafter be added to the Sepolia testnet on January 30, 2024, before being added to the Holesky testnet on February 7, 2024. While Ethereum hasn’t announced when the upgrade will be executed on the mainnet, the Ethereum community anticipates that this could happen in Q1 of 2024.

One of the most crucial EIPs that the Dencun upgrade will implement is EIP-4844, which will introduce Proto-Danksharding. Proto-Danksharding will enable Ethereum to achieve mass scalability by introducing a new transaction type that will accept ‘blobs’ of data to be sent and attached to blocks for a short period, resulting in cheaper transactions.

Besides EIP-4844, EIP-1153 is also another crucial EIP as it seeks to increase the data storage capacity of the Ethereum network. This proposal, once implemented, will introduce transient storage to the Ethereum network, which will allow storage to be utilized only for the period of a transaction.

Besides the two EIPs, other key EIPs that will be part of the Dencun upgrade include EIP-2322, EIP-4788, EIP-5656, and EIP-6780.

Benefits of the Dencun Upgrade

The Dencun upgrade, once implemented, is expected to have a host of benefits that will enhance the Ethereum ecosystem.

The update, through EIP-4844, is expected to enhance Layer 2 rollup efficiency through Proto-Danksharding. Proto-Danksharding will create ‘blobs’ attached to the current blocks on the Ethereum network. These blobs will offer fixed storage space for Layer 2 rollups, which will reduce operational costs as Ethereum will be able to significantly increase the transactions it can process at once. This will result in a more accessible platform with reduced fees for both developers and end-users, making the Ethereum ecosystem more efficient thanks to Layer 2 rollups.

Besides enhancing Layer 2 rollup efficiency, the Dencun upgrade will improve the user experience by improving cross-chain communication, data storage, scalability, security, and reduced gas fees.

In addition, by increasing its transaction speeds, the Ethereum network will inch closer to addressing its scalability issues. This can, in turn, open up the Ethereum platform to more users and new use cases. Simply put, the Dencun update has the potential to help the Ethereum network achieve mass adoption.

The Dencun upgrade, through EIP-5656, will also prepare the Ethereum network for future technical advancements. EIP-5656 proposes some minor but significant code changes to the Ethereum Virtual Machine (EVM) for increased performance.

Conclusion

Planned for early 2024, the Dencun upgrade is essential for the Ethereum network as it will help to fix unsettled issues that weren’t addressed by the Shanghai update back in April 2023.

The Dencun update will address Ethereum’s scalability by making improvements to code changes, cross-chain communication, data storage, gas cost, security, and transaction speed. All these improvements will be made possible by the different EIPs proposed by Ethereum community members, which seek to make the Ethereum platform more appealing to both end-users and developers alike.

While no specific date has been announced for when the Dencun upgrade will go live, testing on Ethereum’s Goerli testnet is expected to kick off on January 17, 2024. Ethereum upgrades typically undergo testing, which can last a few months before the update is deployed on the Ethereum mainnet.

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Note: Any cited numbers, figures, or illustrations are reported at the time of writing, and are subject to change.