Overview of Ethereum Cancun Upgrade

Cancun, a famous tourist city in Mexico, also hosted the Devcon 3 conference. According to the Ethereum upgrade naming convention, the Cancun upgrade is named after locations. It targets the Ethereum execution layer.

Ethereum’s Upgrades Over the Years

Currently, Ethereum has completed the first two phases and part of the third phase of its journey, encompassing 24 milestone events, most of which are fork upgrades, with some significant ones including:

• July 30, 2015: Frontier upgrade, Ethereum’s first quasi-system-level version (Beta), akin to the risks and opportunities of the American Wild West during the gold rush era.

• March 14, 2016: Homestead upgrade, marking Ethereum’s second major release, transitioning from “Frontier” to “Homestead.”
• July 20, 2016: The DAO attack led to a hard fork, a compromise forced upon Ethereum in its darkest hour, resulting in the split between ETH and ETC chains.
• October 16, 2017: Byzantium upgrade, initially planned to be split into Byzantium and Constantinople upgrades, later subdivided into upgrades like Istanbul, Berlin, London, etc.
• February 28, 2019: Constantinople/St. Petersburg upgrade, initially delayed due to security vulnerabilities, Ethereum underwent two upgrades simultaneously after a two-year hiatus, namely Constantinople and St. Petersburg upgrades.
• January 2, 2020: Muir Glacier upgrade, an emergency upgrade conducted due to an incorrect estimation of the time for the mining difficulty bomb to “explode.”
• April 15, 2021: Berlin upgrade, the first upgrade named after the city where the Ethereum Developers Conference (Devcon) was held, continuing the tradition.
• August 5, 2021: London upgrade, introducing the impactful EIP-1559 to Ethereum, burning a portion of gas fees.
• September 15, 2022: Paris upgrade (The Merge), Ethereum formally completed the transition from PoW to PoS consensus.
• April 12, 2023: Shanghai upgrade, mainly addressing withdrawal issues with ETH staking.
• March 2024: Cancun upgrade, focusing on resolving Ethereum’s scalability issues.

Ethereum Cancun-Dencun is a significant hard fork aimed at enhancing the scalability, security, and usability of the Ethereum network. It introduces major changes through Ethereum Improvement Proposals (EIPs), including EIP-4844 for native fork improvement to enhance network efficiency and reduce transaction fees. Building on the success of previous upgrades like Shanghai, this upgrade aims to provide stronger infrastructure for decentralized applications and improve the overall user experience of Ethereum.

The Ethereum Cancun upgrade signifies a significant advancement for the Ethereum blockchain, aiming to strengthen its scalability, security, and overall efficiency. This upgrade introduces the concept of Proto-dank sharding, an important step in optimizing data management and reducing transaction costs within the Ethereum ecosystem. The Ethereum Cancun upgrade leverages innovative data storage technology, poised to fundamentally change the way the network processes transactions, paving the way for a simpler and smoother user experience.

What is the Ethereum Cancun Upgrade?

The Ethereum Cancun upgrade, also known as the “Cancun-Deneb” upgrade, is a combination of the Cancun and Deneb upgrades, with the English abbreviation being “Dencun.”

Each Ethereum upgrade corresponds to a specific layer of the Ethereum network. The Cancun upgrade aims to improve the performance of the Ethereum execution layer, while the Deneb upgrade focuses on the consensus layer. To better understand these concepts, it is necessary to first understand the current architecture and state of Ethereum.

Before the Ethereum merge, the Ethereum network was mainly composed of two parts: the execution layer and the consensus layer, which operated independently of each other.

The execution layer is primarily responsible for processing the execution logic of smart contracts, where transaction calculations take place. It is the original Ethereum mainnet, also known as “Ethereum 1.0.” It is also responsible for maintaining the state of the Ethereum network and executing Ethereum Virtual Machine (EVM) code.

The consensus layer ensures that all transactions and smart contracts are validated through proof-of-stake (PoS) consensus, achieving consensus among all nodes and clients to reach a consistent state. It is the beacon chain formed after the merge with the execution layer, also known as “Ethereum 2.0.”

Each consensus layer upgrade is assigned the name of a star, chosen in alphabetical order: Altair->Bellatrix->Capella->Deneb->Electra->(F)unknown.

After the merge, the execution and consensus layers of Ethereum run in parallel, communicating or exchanging information through the Engine API interface. The Engine API allows execution clients to request block information from consensus clients and allows consensus clients to send new blocks to execution clients or request execution validity proofs.

The upgrade of the execution layer is called Cancun, while the upgrade of the consensus layer will be called Deneb. The name of the entire upgrade is Cancun-Deneb. Although the upcoming Cancun upgrade and Deneb upgrade are technically different, they are implemented simultaneously, so the compound term “Dencun” is used to refer to this combined upgrade.

Benefits of the Ethereum Cancun Upgrade

As mentioned above, the Ethereum Cancun upgrade will bring many benefits, including improved transaction processing speed, reduced transaction costs, optimized data, and improved cross-chain communication. This upgrade also aims to simplify data processing and enhance overall network efficiency by introducing the concept of transactions carrying Blobs.

1. Increased Scalability: Proto-danksharding introduces temporary data storage capacity, allowing Layer 2 aggregation (and the entire network) to process more transactions per second.
2. Lower Transaction Costs: Transactions carrying Blobs support additional data to be added to Ethereum transactions more cost-effectively.
3. Optimization of Data Management: EIP-1153 will optimize block space, reducing on-chain data storage costs.
4. Improvement in Cross-Chain Communication: EIP-4788 aims to enhance interoperability between different blockchain networks by exposing the Beacon chain at the execution layer.
5. Enhanced Security: EIP-6780 will enhance the security of user data and funds by disabling the “SELFDESTRUCT” opcode to reduce the risk of smart contract termination.

Potential risks of the Ethereum Cancun upgrade

Risks associated with the upgrade may include potential impacts on existing smart contracts and the complexity of integrating new data storage technologies. These require extensive testing and careful consideration during the implementation phase to ensure a smooth transition for all stakeholders.

Expected Launch Date of the Ethereum Cancun Upgrade

The upgrade is expected to take place in the first half of March 2024. The Ethereum network is undergoing rigorous testing and optimization, with the community eagerly anticipating the official launch of the upgrade and expecting a transformative change in how transactions are processed and data managed within the Ethereum ecosystem.

Summarize

The Ethereum Cancun-Deneb (Dencun) upgrade marks a significant leap for Ethereum in seeking to improve scalability, efficiency, and user experience. The Ethereum Cancun upgrade will introduce Proto-danksharding and lay the foundation for future development, potentially fostering growth in decentralized finance and blockchain technology.

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