Since the London upgrade in 2018, Ethereum has entered the era of deflation through EIP-1559, which achieved fee splitting and partial burning. The Paris upgrade in 2022 successfully merged POW with the beacon chain, officially entering the POS era and ending the history of mining. The Shanghai upgrade implemented in April this year achieved free access to Ethereum staking, promoting rapid growth in ETH staking volume.
However, despite Ethereum undergoing a series of positive changes, issues related to network performance and fees still hinder its widespread adoption. To address these challenges, the Cancun upgrade comes into play. Scheduled for the fourth quarter of 2023, this upgrade aims to significantly increase the main chain's transaction processing speed (TPS) and reduce Gas fees, paving the way for Ethereum's mass adoption.
The core of the Cancun upgrade is the expansion of the Ethereum main chain. Currently, the two main directions for Ethereum expansion are well-known Layer 2 solutions, specifically Rollup, and Ethereum's mainnet sharding scheme. Among them, Optimism Rollup and ZKRollup are mainstream Layer 2 solutions, with the former being a short-term solution and the latter a long-term one. Through these technologies, the Cancun upgrade will greatly enhance Ethereum's network processing capacity and is expected to drive the rapid development of the L2 ecosystem.
Therefore, the Ethereum community has high expectations for the Cancun upgrade. It is not only a technical upgrade but also an important step for Ethereum towards maturity and widespread application. Through the Cancun upgrade, Ethereum will further consolidate its leadership position in the blockchain world, laying a solid foundation for future development.
In the process of implementing Sharding, various solutions continue to iterate and optimize, including EIP-4844 and other related proposals. EIP-4844 primarily reduces the cost of data transmission by implementing temporary off-chain storage and retrieval of Ethereum node data. It allows Rollup data to be transmitted on L1 in blob form at a lower cost and stored non-permanently. This not only reduces the cost of data transmission and storage but is also an important prerequisite for Ethereum to achieve complete Sharding. After implementing EIP-4844, the storage capacity of a single Ethereum block will increase from the current 50-100KB to 1-2 megabytes, which is expected to reduce overall costs by about 20 times. Full danksharding will further allow blocks to carry 16-32 megabytes of data, although this solution is currently in the technical discussion stage. This means that without sacrificing decentralization, Ethereum will significantly reduce costs and Gas fees while significantly increasing TPS and scalability.
However, after the 118th Ethereum core developers' consensus meeting, the schedule for the Cancun upgrade has been affected by the failed launch of the Holesky testnet on September 15. Developers have expressed concerns about the entire upgrade schedule, leading to rumors of a possible delay. Ethereum core developer Tim Beiko raised questions about the Dencun test schedule, stating that if developers cannot release Dencun on the public testnet before the Ethereum developer conference Devconnect in November 2023, the mainnet activation of Dencun is likely not to occur this year. This statement has heightened community concerns about a possible delay in the Cancun upgrade.
The Cancun upgrade is an important step in the development of the Ethereum network. It includes a series of technical proposals aimed at improving network performance and security, such as EIP-4844 and EIP-7514, while also involving some community and economic issues that have attracted attention and discussion. Although there have been some challenges and controversies during the upgrade process, such as the heated discussion sparked by EIP-7514 and concerns about a possible delay in the upgrade, the entire community and development team are actively seeking solutions to ensure a smooth upgrade. It is worth noting that the development and specific impact brought about by the Cancun upgrade still need validation from the market, and caution is required to avoid market risks caused by excessive hype.
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