Ethereum, the second-largest cryptocurrency by market capitalization, is preparing to launch its most anticipated upgrade: Dencun. This is a hard fork, i.e. a radical change to the protocol, which will introduce proto-danksharding, a technology that promises to improve scalability, reduce transaction costs and increase the availability of data on the blockchain.

What is Dencun and its update

The Dencun upgrade successfully passed the last test on the Holesky test network, which took place on February 7. This was the third and final test, after those carried out on the Goerli and Sepolia networks in January. Now Ethereum developers will have to decide on the date to activate Dencun on the mainnet, which could happen in March, CoinDesk reported.

Dencun is considered a key step for the future of Ethereum, which is competing with other layer-1 blockchains, such as Solana, which offer higher performance and lower fees. Dencun will make it possible to better leverage layer 2 solutions, such as rollups, which are secondary chains that rely on Ethereum to ensure the security and finality of transactions.

How proto-danksharding and blobs work

In addition, Dencun will introduce blobs, new data spaces that will be broken down into fragments, or shards, to optimize processing and storage. This will be the first step towards danksharding, a feature that will be implemented in the future and that will allow to increase the number of transactions that Ethereum can handle per second.

Proto-danksharding is a simplified version of danksharding, which involves only creating and deploying blobs, without the need to execute code or transactions on them. Blobs are data packages that can be used by decentralized applications (dApps) to store and retrieve information efficiently and securely. The blobs will be divided into 64 shards, each of which will have its own chain of blocks, called a shard chain.

How Dencun connects to Ethereum 2.0 and staking

Dencun is Ethereum’s biggest upgrade since last March, when Shapella was launched, enabling staked ether (ETH) withdrawals. Staking is the process that allows users to lock up their ETH to participate in validating transactions on the new version of Ethereum, called Ethereum 2.0, which is based on the Proof-of-Stake consensus mechanism, instead of Proof-of-Work.

Ethereum 2.0 is an ambitious project that aims to make Ethereum more secure, scalable, and sustainable, but it takes several years and several stages to complete. Dencun is one of these phases, and it represents a challenge and an opportunity for the Ethereum blockchain, which wants to confirm its role as a leader in the cryptocurrency and decentralized applications sector.

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