Dencun is already here: what will change in Ethereum in March 2024?

Ethereum is ready for a major leap. March 13, 2024 marked the network’s transition to the Cancun-Deneb upgrade, also known as Dencun — an upgrade that the crypto community has been anticipating for at least two quarters. This is not just a technical enhancement. With the implementation of Proto-Danksharding (EIP-4844), a new era of Ethereum scalability begins.

But let’s break it down without unnecessary jargon: what actually changes for those who use Ethereum and trade?

Main Point: fees drop by 10-100 times on Layer-2

The most noticeable change concerns Layer-2 networks. According to L2fees, before Dencun, average fees were:

• Arbitrum: $0.24 per ETH transfer
• Optimism: $0.47 per ETH transfer
• Polygon: $0.78 per ETH transfer

Actual token swap costs looked even worse: $0.67 (Arbitrum), $0.92 (Optimism), and $2.85 (Polygon).

EIP-4844 radically changes the mechanics. Instead of costly data processing on the main chain, Layer-2 solutions now use “blobs” — temporary data storage that exists in validators’ memory rather than on the permanent blockchain. The result: fees decrease by 90-95% on Layer-2.

How it works: Proto-Danksharding in simple terms

Proto-Danksharding (EIP-4844) is not full sharding but an intermediate step. The Cancun upgrade focuses on the data availability layer, while Deneb affects the consensus layer. Together, they create a new way of storing information.

Blobs are the main tool. These are large data packets (about 1 MB per slot), which Layer-2 solutions can use cheaply and then delete. Validators hold them in memory for only 18 days — enough for finalization but not enough to overload the network.

This is especially important for data availability projects (Celestia, EigenDA, Avail). Proto-Danksharding reduces their costs and makes their economics viable.

The Dencun upgrade also includes other improvements

In addition to EIP-4844, Ethereum received several key updates:

EIP-1153 introduces temporary opcodes for data storage. This helps smart contracts operate more efficiently and reduces gas costs.

EIP-4788 adds the Beacon chain root directly into the main layer. Developers can now access consensus data directly without intermediate steps.

EIP-5656 adds the MCOPY opcode for fast memory copying in smart contracts.

EIP-6780 limits SELFDESTRUCT — a function that could enable destructive attacks on contracts.

EIP-6493 makes small changes to validator block selection rules, improving finality and reducing centralization.

Dencun rollout schedule

Testing began in January 2024:

• January 17 — Goerli testnet
• January 30 — Sepolia testnet
• February 7 — Holesky testnet
• March 13 — Ethereum mainnet

Initially, the upgrade was planned for Q4 2023, but developers postponed it during the All Core Developer Consensus discussion in November to ensure thorough testing.

What will users and developers gain?

For users: Ethereum’s throughput will jump from about 15 TPS to 1000 TPS (thanks to Layer-2). Transactions will become cheaper and faster. On the mainnet (Layer-1), changes will be less noticeable, but Layer-2 solutions (Arbitrum, Optimism, Polygon) will become almost free channels for activity.

For developers: Blobs open new possibilities for data storage. Developers will be able to experiment with dApps that were previously economically unviable on Ethereum. Improved compatibility between Layer-1 and Layer-2 simplifies development.

For DeFi: Layer-2 networks will become much cheaper to operate on. This could lead to a mass migration of liquidity to more economical ecosystems. Protocols with low volume, which barely survived on Layer-2, suddenly become profitable.

Impact on the Layer-2 ecosystem

After Dencun, Layer-2 networks get a new boost:

Compatibility improves — moving between Layer-1 and Layer-2 becomes cheaper and easier.

Throughput increases — Layer-1 processes blocks faster, Layer-2 networks keep up.

Security is standardized — new standards introduced by EIP-6780 and other improvements create a more resilient ecosystem.

According to Fidelity, Layer-2 networks currently account for about 10% of total Layer-1 fees. After Dencun, this figure should decrease even further.

Potential risks

Not everything is smooth. The upgrade carries some risks:

Technical bugs — any major update may hide bugs that could surface later.

Compatibility issues — some old smart contracts might operate unstably during the transition.

Temporary fee volatility — gas behavior in the first days after Dencun may be unpredictable as the network adapts.

Developers and users are advised to monitor changes carefully and prepare for adaptation.

What’s next: what awaits Ethereum?

Dencun is just the beginning. Ethereum’s roadmap includes several key phases:

Beacon Chain (2020) laid the foundation for PoS.

The Merge (September 2022) combined the mainnet with the Beacon Chain, reducing energy consumption by 99.5%.

Shanghai/Capella (April 2023) enabled ETH staking withdrawals.

Dencun (March 2024) introduces Proto-Danksharding.

Electra + Prague (Petra) — the next stage, where Verkle Trees (Verkle Trees) will enable even more efficient data storage.

And finally, full Danksharding will split Ethereum into shards, each processing independent transactions. This could increase scalability by 100-1000 times, reducing fees to less than $0.001.

Conclusion

The Dencun Ethereum upgrade is a turning point, especially for the Layer-2 ecosystem. Fees are falling, throughput is increasing, and developers are gaining new tools. March 2024 will mark the beginning of a new era of affordable Ethereum.

For traders and investors, this means a more viable ecosystem where microtransactions and small-volume trading become economically feasible. It could lead to a wave of innovation on Ethereum and its Layer-2 solutions.