How much cheaper will the Dencun upgrade really make the Ethereum ecosystem?

The Dencun upgrade, which developers are calling the upgrade they’ve been “dreaming about,” will forever change what it means to build on Ethereum.

On March 13, Ethereum is about to undergo the latest Dencun network upgrade. While the event is sure to be of great interest to networking technology enthusiasts, it has received relatively little attention in the mainstream media compared to the 2022 merger. This merger will lead Ethereum towards a more energy-efficient proof-of-stake model, a development that is of great significance to the future development of the Ethereum ecosystem.

But let’s be clear: Dencun will be a major milestone in blockchain history by eliminating GAS fees on scaling the network, according to the developer responsible for running the largest Layer-2 network built on Ethereum. , opening up a new era of possibilities for on-chain development.

Karl Floersch, CEO of OP Labs, which built the Layer-2 network Optimism, told reporters, “This is the beginning of a new paradigm for how Ethereum operates.”

He went on to note: "We've been stagnant for almost a decade on user experience and feature sets since 2015, requiring a lot of fundamental research. Now that that fundamental research has been completed, we're in the process of bringing this research to The stage of transformation into actual patterns."

Many other Layer-2 developers expressed similar views when interviewed by reporters: Dencun is expected to push Ethereum to new heights, mainly by reducing Layer-2 transaction costs and improving the convenience of verification.

David Silverman, vice president of product at Polygon Labs, told reporters that he said that once the settlement contracts of all Layer-2 networks are updated in about a month after Dencun is launched, the network will pass on the cost savings to users. This will result in significantly lower gas charges on most Layer-2 networks. Silva also emphasized that Polygon is committed to ensuring that users benefit from cost reductions.

Offchain Labs developer Terence Tsao told reporters: “It can be safely said” that if the Dencun upgrade is carried out at current network traffic levels, Gas charges on the Layer-2 network are expected to be immediately reduced by 75%.

Why did Gas prices plummet so so fast?

This is all thanks to "blobs," which will introduce a new method for temporary data storage to Ethereum through a process called proto-danksharding. Currently, data can only be stored on Ethereum forever, which is very expensive. Proto-danksharding will allow Layer-2 data to be temporarily stored for about a month instead of permanent storage. The process will be just as safe but much less expensive.

To understand the potential impact of this change, Polygon Labs’ Silva said to look at Ethereum as one path forward. Over the past few years, Ethereum can best be described as a rural back road, a reliable way to get from A to B but slow and prone to congestion.

Silverman said proto-danksharding would catapult Ethereum from that back road into a four-lane highway. Eventually, comprehensive danksharding will see the network expanded to a 16-lane motorway. These extra lanes may come in handy at some point, or they may become redundant; either way, Dencun is what brought Ethereum into the modern transportation era. And for developers like Silverman, the significance of this leap cannot be underestimated.

Gas fees will not only become trivial after Dencun; they may drop to the point where cryptocurrency companies and projects bear their costs, much like Web2 giants like Google bear the costs of video conferencing and email to attract users.

"We're going to move into a world where most users won't be aware of gas at all," Silverman said. "It's going to seem abstract."

Terence Tsao said, “To be clear, that gas-free future will exist in Layer-2 networks, not the Ethereum mainnet. However, after Dencun, the vast majority of retail user traffic will likely permanently shift to Layer-2 networks outside of the Ethereum mainnet, such as Arbitrum, Optimism and Polygon, and Offchain Labs, appear to be exactly what Ethereum developers want."

Tsao previously worked on the Ethereum mainnet before turning his focus to Arbitrum. Dencun will mark a major shift in the way users interact with Ethereum, he said, with the mainnet “fading into the background.” But it remains essential as an effective engine for protecting data on Layer-2 networks and facilitating communication between them. The vast majority of on-chain transactions, whether for NFTs, shoes or a cup of coffee, will never take place on the Ethereum mainnet again, and stories of burning millions of dollars trying to mint NFTs will soon become a fascinating thing of the past. remains.

OP Labs’ Karl Floersch expects that Dencun will redefine what it means to build applications and exist on-chain.

“We’ve never seen what the world will look like when there’s plenty of block space, and we’ve never seen what types of applications people will build,” he said.

Floersch anticipates that a crossover renaissance will soon occur across various mediums, websites, and platforms by effectively removing the barriers between on-chain elements and any product integration.

As an example, he proposed an idea to generate NFT in the game, interact with the DeFi protocol, and use social media to influence the gameplay. All of this will happen seamlessly and at virtually zero cost.

He said, "Oh my gosh, I've been dreaming about this feature and I'm really excited that the world is going to see why we're so excited about cryptocurrencies."

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