As we approach the Dencun fork, in the quarter of 2024 there is great anticipation within the Ethereum community for a series of significant Improvement Proposals. These proposals hold importance not for the future direction of Ethereum but also for their potential impact on the overall cryptocurrency ecosystem.
During the meeting of Ethereums core developers a tentative schedule was set for the mainnet hard fork known as the Dencun upgrade. It should be noted that Ethereum developers plan to initiate forks, on Ethereums testnets on dates assuming no major issues arise:
Goerli; January 17
Sepolia; January 30
Holesky; February 7
After this testing schedule Goerli is expected to be phased out.
The developers also engaged in discussions regarding steps particularly focusing on an upgrade yet to be named Prague/Electra. The Ethereum community is currently deliberating whether to prioritize enhancing a core feature, which may require a years worth of work or pursuing an upgrade centered around smaller improvements that could potentially be completed by the end of 2024.
EIP 4844 has gained attention in the Dencun EIPs. Has been widely covered in news reports during 2023.
According to Eli Ben Sasson, one of the co founders of StarkWare this upgrade will greatly reduce data availability costs, for all L2s. As a result Starknet is eagerly anticipating its implementation as it will enable users to lower their expenses.
Lucas Henning, the Chief Technology Officer of Suku a Web3 wallet developer described this as “a year of groundbreaking advancements for Ethereum”. EIP 4844 is a technology that has the potential to decrease Rollup Gas fees by up to 100 times.
This proposal is part of Dencun. Aims to introduce a mechanism for handling temporary or transient storage during smart contract execution.
Traditional storage operations on Ethereum are permanent. This can be inefficient for data that doesn’t need to persist beyond a transaction.
EIP 1153 introduces an opcode that allows smart contracts to utilize storage, which will be automatically cleared at the end of each transaction.
The Uniswap team advocated for EIP 1153. Had hoped it would already be included in Shapella. However they were unable to gather support from core developers to reach consensus. This upgrade is expected to play a role, in enhancing the capabilities and efficiency of the Uniswap v4 protocol.
Enabling storage, through EIP 1153 has the potential to decrease the Gas cost associated with data storage during contract execution. It also offers developers flexibility in designing contracts.
By reducing the burden on storage and keeping state bloat to a minimum EIP 1153 can contribute to enhancing the scalability of the Ethereum network.
Lets think of Ethereum as a library consisting of two components: the Ethereum Virtual Machine (EVM) portion, which resembles a reading room where individuals come to execute smart contracts and the Beacon Chain portion, which acts as the librarys catalog system tracking all books and their respective locations (ensuring consensus and coordination across the Ethereum network).
Prior to EIP 4788 these two components functioned independently. The EVM section lacked access to the up to date catalog; it had to rely on indirect methods for staying informed about activities taking place within the Beacon Chain section.
EIP 4788 suggests including a “Beacon block root” (a summary or hash tree root of its parent block) within each EVM block. This transition is akin to moving from a card filing system (inefficient and sometimes inaccurate) at a library towards a system that is directly linked with real time accuracy, to the librarys main database.In this library whenever a new book is added, moved or removed (updates, to the Beacon Chain) readers using the EVM (Ethereum Virtual Machine) can immediately access information. It ensures that readers can trust they are receiving the up to date information and the librarys operations like executing contracts, align better with the overall catalog system of the consensus layer.
This approach minimizes reliance on trust. Eliminates the need for sources or oracles to provide data. As a result it reduces vulnerabilities or manipulation points.
This change brings benefits to staking protocols such as Lido, bridges based on smart contracts and restaking solutions. These protocols can now directly access data like validator balances and states from the consensus layer. This enhancement strengthens their security and operational efficiency.
EIP 4788 essentially introduces a protocol level oracle that disseminates Ethereums consensus state throughout the mainnet.
Misha Komarov, founder of Nil Foundation and developer of zkOracle, for Lido describes it as ” useful.” According to him “They need to incorporate consensus layer state roots into application logic (currently proven via zkLLVM to execute within Casper FFG). This integration is achieved through zkOracle design.”