Ethereum’s Dencun Upgrade: Could This Spell the End for Roll-Ups?

Ethereum

Ye Zhang, co-founder of Scroll, a layer-2 initiative based on zero-knowledge proof, is cautiously hopeful about the imminent Dencun update. Zhang mentioned Dencun’s potential benefits in a post on X, including the cheap transaction costs. However, in the same piece, the co-founder emphasized the potential issues it may provide for existing layer-2 scaling solutions based on roll-ups.

Dencun Introduces EIP-4844 In Ethereum

Ethereum developers want to deploy Dencun around mid-March. Implementing the Ethereum Improvement Proposal (EIP)-4844 is an important aspect of this hard split. With this execution, the proposal will include a new “blob-carrying transaction” functionality. What distinguishes these transactions from standard Ethereum transactions is the ability to attach blobs, which are massive volumes of data, for a minimal cost.

According to findings from the Goerli testnet, Zhang expects blobs to be 3-5 times cheaper than regular Ethereum call data. As a result, the significant difference allows creative developers to create blob inscriptions. These inscriptions will successfully compete with layer-2 systems such as Arbitrum or Optimism, which use roll-ups. This option should not be dismissed because, in essence, EIP-4844 seeks to minimize layer-2 transactions through blob transactions. The concept effectively lays the groundwork for blob inscriptions.

This solution takes a different approach, but it has the potential to compete with roll-up platforms if adopted broadly. This will be the case if users who trade in large amounts of data recognize the benefits of using the blob inscription method. Even so, roll-ups will have a noticeable edge over blob inscriptions. Roll-ups provide a considerable scalability advantage. These systems can inherently handle more transactions per second. Furthermore, they are safe because they inherit security from the Ethereum mainnet.

ETH Prices Steady Above $3,800

Still, until Dencun is implemented, the impact of EIP-4844 will be extensively assessed. Overall, the Ethereum and layer-2 communities are happy about the update, which is expected to propel ETH even higher in the current bull run.

Ethereum is now trading above $3,800. It has risen by double digits in the last week, and experts forecast further rises in the coming days. In the medium term, bulls aim for $5,000, which is close to the all-time high.

Despite the recent increase in ETH and crypto values, demand for Ethereum layer-2 solutions remains high. The most recent L2Beat figures suggest that Arbitrum, Optimism, and other alternatives handle more than $36 billion. Arbitrum manages roughly $16 billion, benefiting from its first-mover advantage.

Author: Simeon

Simeon is a seasoned crypto writer with a passion for exploring the fascinating world of blockchain and digital currencies. With a background in finance and technology, Simeon brings a unique perspective to his writing, delving into the complexities of decentralized finance, cryptocurrency trading, and emerging blockchain projects.