Dencun: the upgrade that promises to transform Ethereum's scalability in 2024

Throughout 2023, Ethereum has solidified its position as the most robust smart contract platform, but faces a persistent challenge: gas fees and processing speed. Everything changes with the arrival of Dencun, the Cancun-Deneb upgrade that is redefining the near future of the network.

Why is Dencun the inflection point everyone was waiting for?

While other projects try to capture users with promises of scalability, Ethereum takes a different path: the introduction of proto-danksharding through EIP-4844. This proposal is not just cosmetic improvement but a fundamental transformation in how Ethereum processes and stores data.

The Dencun upgrade, scheduled for January-February 2024, began its testing phase on Goerli on January 17, followed by Sepolia on January 30 and Holesky on February 7. Currently, the protocol is validated on Devnet 12 before deployment on mainnet.

The core of Dencun: EIP-4844 and data blobs

The central innovation is simple but powerful: “blobs” or Binary Large Objects. These data packets are stored temporarily in the Beacon Chain instead of permanently on mainnet. The result is dramatic: gas fees on Layer 2 solutions could drop between 10 and 100 times.

This means transactions that currently cost $0.50 could cost less than $0.01. For millions of users, especially in emerging markets, this completely changes the economic calculus of using Ethereum.

Complementary technological improvements in Dencun

Beyond EIP-4844, the upgrade incorporates critical optimizations:

EIP-1153 - Transient Storage: Introduces opcodes that allow smart contracts to use temporary memory during execution, reducing costly accesses to permanent storage. This is especially relevant for DEXs and financial protocols.

EIP-4788 - Access to Beacon Root: Enhances interoperability between execution and consensus layers, allowing smart contracts to access validation data directly. This improvement enables new use cases, such as more efficient liquid staking and improved oracles.

EIP-5656 - Improved MCOPY: Optimizes memory copy operations in contracts, reducing computational costs for routine operations.

EIP-6780 - Restriction of AUTODESTRUCTION: Closes security vectors by limiting the use of a function that has historically presented vulnerabilities. This measure strengthens network stability.

From theory to practice: impact on scalability

The numbers speak for themselves. Ethereum currently processes around 15 transactions per second (TPS) on mainnet. With Dencun, especially on Layer 2, the network could reach between 1,000 and 2,000 TPS, a capacity increase of 100-1000x.

But the real winner is the Layer 2 ecosystem. Projects like Optimism and Arbitrum, which already offer scalability, will see their transaction costs collapse due to Dencun. For frequent DeFi, trading, and NFT users, this is a game-changer.

Expanded data bandwidth

Dencun introduces a fixed data bandwidth of 1 MB per slot, significantly expanding temporary storage capabilities. This allows developers to design more complex dApps without gas spikes, opening new possibilities for enterprise blockchain applications.

The path to Ethereum 2.0: from proto-danksharding to full danksharding

Dencun is not the final destination but a crucial stepping stone. Ethereum 2.0’s roadmap reflects a multi-act vision:

Act 1 - Beacon Chain (December 2020): The beacon chain establishes the foundations of Proof of Stake consensus.

Act 2 - The Merge (September 2022): Ethereum transitions to PoS, reducing energy consumption by over 99.5%.

Act 3 - Shanghai/Capella (April 2023): Unlocks liquid staking, allowing users to withdraw staked ETH without exiting the system.

Act 4 - Dencun (January-February 2024): Proto-danksharding introduces partial sharding via blobs.

Act 5 - Full danksharding (near future): Total sharding will split Ethereum into multiple parallel chains, processing transactions independently. This is the ultimate scalability.

Who benefits from Dencun

Users and traders

• Reduced fees make trading and swaps accessible
• Faster transactions on Layer 2
• Better experience in DeFi and gaming applications

Developers

• Cheaper data space for storing contract information
• New application architectures possible
• Better support for liquid staking and complex mechanisms

Layer 2 projects

This is the winning category. Optimism, Arbitrum, Polygon, and other scalability protocols will see their operational costs skyrocket. With gas fees 10-100x lower, these ecosystems become competitive even against alternative chains.

Investors

The market has been waiting for this event. Dencun is expected to revitalize interest in Ethereum as an infrastructure platform, especially for projects relying on Layer 2.

Risks: not all is celebration

Implementing changes of this magnitude carries legitimate risks:

• Technical complexities: Any error during deployment could cause temporary instability
• Compatibility: Some existing smart contracts may require optimizations to benefit fully
• Transition: Migrating data and processes on the active chain always presents potential vulnerabilities

That’s why Ethereum follows a rigorous testing process across multiple networks: Goerli, Sepolia, and Holesky before mainnet. Caution is essential at this scale.

Liquid staking makes a comeback

Dencun also brings renewed momentum to ETH liquid staking. With cheaper gas, staking derivatives (LSTs) like Lido, Rocket Pool, and Frax Ether become even more economical to operate. Users can participate in validation and earn rewards without sacrificing liquidity, making Ethereum an even more attractive platform for long-term accumulators.

Perspective: the path toward true scalability

Dencun marks a turning point. It is the moment when the promise of Ethereum 2.0, which began with the Beacon Chain over three years ago, starts to transform the daily reality of millions of users.

The Cancun-Deneb upgrade not only solves technical problems; it redefines Ethereum’s value proposition against alternative ecosystems. While others promise scalability, Ethereum delivers it incrementally but proven.

For traders, developers, and investors, Dencun is the event to watch in Q1 2024. The impacts on fees, performance, and investment opportunities will become evident almost immediately after deployment.

Ethereum’s evolution continues, and Dencun is just the next chapter in a story that still has many pages to write.