Ethereum has numerous problems, but one we can all recall is scalability. Due to this challenge, Ethereum has been compared to Visa, a centralized business that handles transactions, as being considerably inferior despite decentralization policies. Ethereum can settle around 15 TPS, while Visa has a capacity of over 24,000 TPS.

For the moment, Ethereum has a few solutions to improve scalability, from rollups to data shards. Other upgrades that will follow include scalability measures, but the truth is that solving this issue takes time and resources.

That’s why a new upgrade set for the beginning of 2024 will contribute to a more scalable Ethereum blockchain. The solution might help nodes in processing more transactions at the expense of the exact costs since, currently, all nodes and validators process and verify each transaction individually, which is time-consuming, so if you want to know how to buy ETH and browse a scalable blockchain, here’s all about the Dencun upgrade. 

Decun upgrade is another efficient, quick fix based on rollups

Rollups have been used for as long as modern blockchains existed because their support enhances security and decentralization while reducing transaction costs. They haven’t been used only with Ethereum but have expanded to almost all other networks since they’re compatible with most environments.

At the same time, every blockchain has specific rollups. For instance, on Ethereum, you can find multiple types of rollups, such as the following:

  • Optimistic rollups provide fraud-proof against illicit transactions;
  • ZK-rollups are backed by cryptography and work in different ways compared to Optimistic ones;

Besides rollups, other technologies leveraged for increased scalability include off-chain and on-chain scaling, such as sidechains, state channels and plasma. Taken individually, they might not be that efficient, but together, they complete the requirements for developing scalability.

The Decun upgrade is, therefore, a similar solution that will work through rollups in order to improve gas fees and the blockchain’s security.

The solution will most likely occur in the first quarter of 2024

The Decun upgrade was initially postponed from the end of 2023 to the beginning of 2024. This is a positive aspect of the update, showing that developers are taking their time to make it right. It is expected that Decun’s first effects will increase data availability in order to be compatible with layer-2 rollups, after which every user will benefit from better transaction costs.

The update will also proto-danksharding to put the base of a more significant update that is about to expand in the following years, the Surge, of which plan is more complex in ensuring scalability. Users will operate on Ethereum more quickly and more efficiently, which will eventually prepare the blockchains for future updates of the Verge or the Purge.

The update has five EPIs that will solve scalability

Recently, developers announced the Decun upgrade to be ready to deploy in a few months since its five EPIs (Ethereum Improvement Proposals) were also fully developed. These solutions are made to add more data storage to the network, therefore reducing fees and transaction time. But the EPIs will also:

  • Improve staking pool designs;
  • Slightly change aspects of the EVM;
  • Offer more safety for smart contracts;

The Dencun is actually a combination of two forking updates that will be deployed together at the same time. The Cancun will take place on the execution layer, while the Deneb will be on the consensus layer of Ethereum, therefore getting more space for development.

Both layers are specifically different, separated by other networks and protocols so that the Dencun update will handle the entire network simultaneously.

Why is scaling so important to Ethereum?

Scalability challenges will automatically lead to poor performance of the blockchain, meaning the network’s high gas fees might hinder investors, developers and regular users from counting on its security. Increasing fees also influence the number of decentralized apps adopted on the blockchain.

Moreover, the rapidity of how transactions are being processed is vital for the network’s improvement. If the blockchain can’t keep up with the increasing number of users and transactions, its validators and nodes will get overwhelmed by the workload since it can become unprofitable in the long term.

What’s more efficient: Layer 1 or Layer 2 scaling solutions?

What we covered until now is included in the Layer 2 scaling solution, but there’s also Layer 1, and their importance is crucial for any type of blockchain. Together, they can ensure networks have all the required processing power to handle transactions and users without becoming incredibly slow and unresponsive, which might’ve happened to Ethereum, too.

Layer 1, for instance, puts the base for the network’s architecture through the used consensus mechanism. Some examples include Bitcoin and Ethereum, which use PoW and PoS to handle transactions. Followed by Layer 1 is Layer 2, whose protocols are created to improve the first and later through scaling solutions. For example, Polygon and Bitcoin Lightning Network are such solutions.

Scaling Layer 1 is relatively simple compared to Layer 2. Their consensus mechanisms increase the block size to expand the network’s capacity, which is what Bitcoin Cash did. Another solution is to update the consensus mechanism and choose a more efficient one. Ethereum was updated from the old PoW to PoS for increased efficiency and sustainability. Finally, sharding is a well-known way for Layer 1 to scale databases since it breaks them down into multiple pieces that can be quickly processed.

All these processes contribute to the work of Layer 2, which uses rollups, side chains and state channels to improve transactions, whether on-chain or off-chain. Regardless, the two solutions must be used accordingly because otherwise, they risk forking the blockchains, a practice that can devalue a cryptocurrency. At the same time, all these technologies used simultaneously might be more complex to verify than individual ones.

Bottom line

Another upcoming update for Ethereum, Dencun, is set to take place around the beginning of 2024. The primary purpose is to contribute to enhanced scalability on the network. Still, parts of the upgrade will develop different sides of the network, from the consensus to the execution layer. This is only one step ahead for transforming Ethereum and making it more reliable, but we’re sure that after completing the entire roadmap, in a few years, Ethereum will rule the market.