Ethereum developers are gearing up for the highly anticipated Dencun upgrade scheduled for Wednesday, heralding the most significant code modification to the blockchain in more than a year.

Dencun, a fusion of the project titles Deneb and Cancun, encompasses two simultaneous upgrades on Ethereum’s consensus and execution layers. This “hard fork” in blockchain parlance is slated to commence around 13:55 UTC (9:55 a.m. ET) and aims to usher in a new era of reduced fees for the expanding array of auxiliary networks operating atop Ethereum, known as layer-2 (L2) “rollups.” These changes will coincide with the activation of a new Ethereum Improvement Proposal (EIP) named “proto-danksharding” or EIP-4844, enhancing the chain’s capacity to manage data from L2 networks.

While elements of the Dencun upgrade have been in the works for several years, developers postponed its implementation from the initial target of late 2023 due to certain engineering concerns. Subsequently, the package underwent testing on three distinct test networks (testnets), with most tests running smoothly, barring a minor delay in the first Goerli test that was swiftly resolved post bug-fixing.

In celebration of Dencun’s official rollout, some Ethereum enthusiasts are organizing watch parties, including the EthStaker developer community and Nethermind, a prominent Ethereum infrastructure team, hosting livestreams.

“Dencun” marks Ethereum’s most substantial update since the Shapella upgrade in April 2023, which facilitated withdrawals of staked ether ETHUSD.

One of the key components of Dencun is “proto-danksharding,” introducing a novel approach to storing transaction data on Ethereum known as “blobs.” Layer-2 networks such as Arbitrum, Optimism, and Polygon stand to gain significantly from Dencun, as they play a pivotal role in scaling Ethereum by aggregating user transactions before settling them in bulk on the Ethereum chain. These networks have emerged as primary transaction platforms atop Ethereum, accumulating substantial deposits and consistently recording higher transaction volumes than the main Ethereum chain.

Post-Dencun, L2s will be able to transmit data to Ethereum within the designated blobspace, reducing costs associated with fitting data into conventional transactions. This efficiency enhancement could lead to lower fees for end-users.

Additionally, “proto-danksharding” represents Ethereum’s initial foray into “sharding,” a technique to partition the blockchain into mini-shards for processing more transactions cost-effectively. While a comprehensive sharding implementation is still in the distant future, proto-danksharding aims to alleviate Ethereum’s high gas fees in the short term by reducing fees for L2 networks.

Moreover, proto-danksharding is poised to benefit a new category of blockchains within the Ethereum ecosystem known as data availability (DA) layers, like Celestia, EigenDA, and Avail, which aid in storing substantial data volumes. This advancement could potentially lower the costs associated with retrieving DA data.

Looking ahead, Ethereum developers will shift focus to the subsequent upgrade, tentatively named Electra + Prague (Petra). While the specific features of this upgrade are yet to be finalized, “Verkle Trees” emerges as a strong contender—a new data category aimed at enhancing nodes’ data storage capabilities.

In the words of Karl Floersch, CEO of OP Labs, the primary developer firm behind the Optimism network, the upgrade will facilitate decentralized collaboration among developers across projects, fostering innovative user experiences akin to centralized platforms.

The evolution of Ethereum through upgrades like EIP-4844 and Dencun paves the way for a more collaborative and scalable ecosystem, empowering developers to create cutting-edge systems that rival centralized platforms in user experience and functionality.