Calm thoughts before Ethereum Dencun upgrade: short-term patch or long-term solution?

This article comes from Cointelgraph, original author: Nebojsa Urosevic

Odaily Planet Daily Translator | Moni

For the crypto industry, Ethereum scaling issues seemed obvious from the beginning, especially as use cases continued to increase and existing technology was unable to handle the large number of transactions, making it imperative to implement innovative solutions to scale the network.

If all goes well, the Ethereum Dencun upgrade will take place on March 13. While this is an important step in the right direction, some community members believe that Dencun is just a short-term patch and that what Ethereum needs is a sustainable long-term solution.

Dencun is a temporary solution?

The Dencun upgrade is designed to enhance Ethereum’s scalability and is currently being deployed on the testnet. Although the upgrade of the Goerli testnet was previously delayed due to bugs, the deployment on Sepolia and Holesky is progressing quite smoothly.

Dencun introduces the concept of “proto-danksharding”, which aims to reduce transaction costs by using the “blob” format instead of “calldata”. Blobs will make transaction data temporarily available in a “compressed” format, thereby significantly improving storage efficiency and being more cost-effective than calldata (it is said to have the potential to reduce costs by 80% to 90%). Subsequent shard upgrades will also use the same format. Overall, the Dencun upgrade will bring developers higher storage efficiency, lower gas fees, and a better experience, while making Rollups more cost-effective.

Bitwise Invest researcher Juan Leon analyzes that IP-4844 will enable the “data fingerprint” of compressed transaction data structures and reduce L2 transaction fees to less than $0.01, which will greatly promote the expansion of the Ethereum network and provide mainstream consumer applications. procedures paves the way (transaction costs become negligible, which is a significant obstacle). David Lawant, director of research at FalconX, expressed a similar view, adding that “technological developments generally do not affect the price of cryptocurrencies, but ETH upgrades are an exception. Before key upgrades, ETH often performs better than BTC.”

While the Dencun upgrade is a step in the right direction, it’s not a permanent solution. The upgrade focuses on making data storage more efficient, which is certainly beneficial. But the long-term problem facing the Ethereum network is capacity, and future development must focus on expanding network capacity to support the increasing number of transactions being executed. From this perspective, a multi-chain solution may make it easier to achieve this goal.

The way forward: Rollups and app chains

Multi-chain solutions, namely Rollups and AppChain, are ideal long-term mechanisms for increasing Ethereum capacity.

Application chains, also known as application-specific blockchains, have their own dedicated processing power and storage designed to serve a single application. Application chains can be built on larger mainnets, such as Ethereum, or even L2 blockchains, which support on-chain transactions being offloaded from the mainnet and processed by the application chain. If widely used, Utility Chain will greatly increase Ethereum’s capacity.

Rollup technology can be used to build application chains, but the difference is that Rollup mainly handles off-chain transactions - transactions are executed off-chain and then “aggregated” into a single transaction and fed back to the main network. Rollups are generally less efficient than application chains because they generally rely more on the main chain for security than application chains. In addition, they are less customizable than application chains, but they can still provide a certain degree of flexibility and are easier to deploy and manage.

Since both have their own strengths, synergy can be achieved by combining the transaction efficiency of Rollup with the flexibility and customization of Application Chain. Developers can also benefit from scaling beyond L1 networks into more scalable and versatile environments, making it easier to design and deploy blocks that meet the needs of their user base while maintaining high levels of efficiency and security. chain application.

By increasing capacity, throughput, reducing latency and improving resource management, multi-chain solutions enable the network to accommodate greater transaction volumes while maintaining optimal performance.

In addition to Dencun, how to deal with the blockchain triangle dilemma?

Developers have long struggled to solve the blockchain’s impossible triangle problem, trying to find a balance between scalability, security, and decentralization. Multi-chain solutions that emphasize interoperability and security have the potential to help Ethereum reach its full potential.

Frankly speaking, implementing a multi-chain solution on the Ethereum network also presents a unique set of challenges for developers. One of the main obstacles to current multi-chain solutions is the complexity of interoperability management between different chains, so the integration of cross-chain communication protocols and integration technologies, as well as ensuring consistent security measures across multiple chains, is a top priority. Beyond this, overcoming these challenges requires a thorough understanding of the technologies involved and a commitment to creating an accessible and developer-friendly environment that facilitates seamless integration and effective utilization of multi-chain solutions.

The future development of Ethereum is exciting. Finance, identity, gaming, supply chain, healthcare, food supply and many other industries are already beginning to benefit from the Ethereum network, but rapid growth also comes with growing pains.

Capacity is a growing concern for Ethereum. While the Dencun upgrade will help solve this problem by increasing efficiency, at this stage the solution is more of a Band-Aid. So in the long term, the best way forward is still to increase capacity, and multi-chain solutions like AppChain and Rollups might be a good idea.