Ethereum Cancun (or “Cancun-Deneb”) is the next significant and highly anticipated upgrade in the Ethereum (ETH) network after the Shanghai-Capella (Shapella) upgrade. The implementation of the Cancun upgrade will address some of the most crucial issues facing the network, including scalability and security.
Ethereum upgrades, typically executed via a hard fork, touch various parts of the network, and the Cancun upgrade will factor in the changes proposed by five Ethereum Improvement Proposals (EIPs) to improve multiple aspects of the network’s Layer 1.
Collectively, all the changes effected by the Cancun upgrade are designed to increase network throughput and reduce gas fees. This will lower the barrier limiting the mass adoption of cryptocurrencies on the Ethereum blockchain by increasing the transaction volume and making transactions more affordable.
Cancun Upgrade Explained
The Ethereum Cancun upgrade is also known as the Cancun-Deneb (Dencun) upgrade. This is because it entails a major upgrade for each of the two Ethereum layers, Cancun for the execution layer (L1) and Deneb for the consensus Layer (Layer 2).
The Cancun upgrade aims at increasing the network’s transaction per second (TPS) to allow for increased traffic while maintaining decentralization. This corresponds with Ethereum’s tiered roadmap’s “Surge” phase, which aims to scale the rollup performance to 100,000+ TPS.
Ethereum Cancun EIPs
Additionally, the upgrade will also factor in EIP-1153, which is meant to lower the cost of on-chain data storage and optimize block space, as well as EIP-4788, which will improve the structure of cross-chain bridges and stake pools.
EIP-6780 was also considered for the Cancun upgrade since it removes the SELFDESTRUCT code that could potentially terminate smart contracts, enhancing security. Part of the upgrade will also introduce minor code changes to the Ethereum Virtual Machine (EVM) through EIP-5656.
In the long run, the upgrade should make the network an even more alluring ecosystem for developers and users by increasing throughput and decreasing the viability of attacks on the network and all the projects and protocols that run on it.
When is Ethereum Cancun Going Live?
Initially, Ethereum Cancun was slated to go live in October 2023. However, following a discussion at the All Core Developers Consensus Call #121 on November 2, the upgrade has been delayed until the first quarter of 2024, potentially in January.
In the meantime, EIP-4844’s devnet-12 is expected to launch in early December to enable the continuation of testing and development without affecting the real assets on the mainnet. Thereafter, the upgrade will be put on the public testnet for a few weeks before finally going live on the mainnet.
Key Benefits of Ethereum Cancun
The Ethereum Cancun upgrade is expected to bring several benefits to the Ethereum network and ecosystem. Aside from solving some of the most prevalent issues facing the network, the upgrade will also open up the ecosystem to new users and use cases, which widens possibilities on the network.
1. Enhanced Scalability
The main goal of Cancun is to increase the transaction volume that the Ethereum network can sustain per second, enabling the network to scale up. This will mainly be achieved through proto-danksharding, which will introduce temporary storage space that Layer Two rollups can use to attain higher transactional volume.
2. Reduced Gas Fees
Another benefit of EIP-4844 will be a reduction in the gas fees paid per transaction. The implementation of proto-danksharding will introduce a new type of transaction known as blob-carrying transactions.
These transactions act like ‘sidecars’ that can be attached to Ethereum transactions to include additional pieces of information. These blobs are large in size but less costly compared to current call data, making them a cost-effective solution for reducing gas fees.
3. Enhanced Security
The Cancun upgrade also includes EIP-6780, which will disempower the SELFDESTRUCT code. This will limit the termination of smart contracts, increasing the protection of user data and their funds.
4. Improved Cross-Chain Communication
Through effecting EIP-4788, which exposes Beacon chain data to execution layers, the Cancun upgrade is expected to enable more seamless and safe interactions between various blockchain networks.
5. Better Data Storage
The upgrade will also incorporate the changes proposed by EIP-1153, which is set to optimize data storage on the Ethereum blockchain. The upgrade will lower the cost of storing data on-chain data and optimize block space.
This will result in more efficient and cost-effective operations, which will boost the operations of Layer 2 solutions that rely on optimal data management on Ethereum.
6. Encourage Technical Innovations
Cancun is also making minor alterations to the Ethereum code through EIP-5656, which will pave the way for future technological developments. This may encourage the development of Layer 2 solutions to better operations on the network.
The Importance of Proto-Danksharding
The Ethereum ecosystem constantly faces the blockchain trilemma, security, decentralization, and scalability, which affects its ability to perform optimally at the lowest possible cost. This remains to be the driver of all innovation going on to improve the network.
Proto-danksharding is an intermediate solution geared towards enhancing the scalability of the Ethereum network. The solution is a stepping stone towards danksharding, which will ensure true scalability of the network.
Proto-Danksharding enhances scalability by enabling users to load data to data blobs that can be attached to blocks at a lower cost. The data is also deleted after a fixed period, which, unlike calldata that lives on the block forever, saves on both space and the cost of transactions.
Like all the other upgrades made to the Ethereum network so far, the Cancun-Deneb upgrade promises to improve the network and make a significant step towards solving the blockchain trilemma.
From improving the network’s scalability and security to enhancing its overall efficiency, the upgrade will mark a milestone in bettering the crypto ecosystem at large and potentially boosting mass adoption.
However, the Ethereum community now has to wait a little longer until the next quarter for the upgrade to go live on the mainnet. In the meantime, Ethereum developers continue to test the technical implementations of the various EIPs even as they await the launch of devnet-12 in December.