Ethereum Plans for Dencun Upgrade: Is This the End of the Rollup?

Ye Zhang, co-founder of Scroll, a layer 2 project that uses zero-knowledge proofs, is cautiously optimistic about the upcoming Dencun upgrade. in post At X, Zhang pointed out Dencun’s potential advantages, especially its low transaction fees.

However, in the same post, the co-founders highlighted issues that can appear with existing layer 2 scaling solutions that use rollups.

Dencun Releases EIP-4844 on Ethereum: What It Means

Ethereum developers plan to implement Dencun in mid-March. Implementing EIP (Ethereum Improvement Proposal)-4844 is a big part of this hard fork. With this implementation, the proposal introduces a new “Blob Carrying Transaction” feature.

What’s unique about these transactions is that they allow users to attach large amounts of data, blobs, inexpensively compared to traditional Ethereum transactions.

Based on observations from the Goerli testnet, Zhang expects Blob to be three to five times cheaper than traditional call data on Ethereum. So the huge difference means that innovative developers can come up with blob inscriptions. These inscriptions will compete effectively with layer 2 solutions such as Arbitrum or Optimism that utilize rollups.

Since EIP-4844 essentially aims to reduce layer 2 transactions through blob transactions, this possibility cannot be ignored. In fact, this proposal represents the basis of the Blob inscription.

This solution takes a different approach, but could use a roll-up platform if widely adopted. It will be when users who process large amounts of data realize the benefits of using the blob inscription route.

Nonetheless, rollups offer distinct advantages over blob inscriptions. What’s noteworthy is Rollup’s excellent scalability. These solutions can inherently process more transactions per second. Moreover, it is safe because it inherits the security of the Ethereum mainnet.

ETH price remains above $3,800.

However, the impact of EIP-4844 will not be thoroughly measured until after Dencun is implemented. Overall, the Ethereum and Layer 2 community is excited about the upgrade and expects ETH to push even higher during the current bull market.

Ethereum is trading above $3,800. It rose by double digits last week and experts expect further increases to come.

Related Reading: Analyst Cites Key Indicators That Indicate a Bitcoin Correction

In the medium term, bulls are targeting an all-time high of $5,000.

As ETH and cryptocurrency prices soar, interest in Ethereum layer 2 solutions continues to grow. The latest L2Beat data shows that Arbitrum, Optimism, and other alternatives manage over $36 billion. Arbitrum, which enjoys a first-mover advantage, manages nearly $16 billion.