Cancun upgrade: another milestone after Shanghai

Introduction to Cancun Upgrade

Cancun-Deneb (Dencun, hereinafter referred to as Cancun upgrade) is an important upgrade of the Ethereum blockchain, which will improve the scalability, security and availability of the Ethereum network.

Cancun is an additional upgrade of the Ethereum execution layer based on the Shanghai upgrade. The first step has been completed in the Shanghai upgrade on April 12 this year, while Deneb represents the upgrade of the Ethereum consensus layer. The upgrade includes the highly anticipated EIP-4844, also known as Proto-DankSharding, which will lay an important foundation for the implementation of comprehensive DankSharding.

DankSharding

The launch of the beacon chain and the implementation of the merger are the first two parts of the upgrade of the entire framework of Ethereum, and DankSharding is the third part, which is also the highlight. This newly designed structure will completely replace the core team's original idea of introducing 64 shard chains.

**DankSharding is not to allow more transactions on the main chain, but to focus on increasing the data availability of rollup. **Rollup is a layer 2 technology that bundles blockchain transactions together and processes them. Any rollup operator can process a batch of transactions and submit the results and proofs to the main chain. Using specific rollup techniques like optimistic or ZK, other validators or smart contracts in the network can vet the results.

Currently mainstream Ethereum Layer 2 extension protocols include Optimism, Arbitrum, Metis, zkSync Era and Scroll, etc. To help the Ethereum network begin the long-term transition to full DankSharding, EIP-4844 will introduce a number of key execution layer components this year.

Proto-DankSharding

EIP-4844, also known as Proto-DankSharding, is a temporary upgrade of the Ethereum network proposed by Ethereum developers Protolambda and Dankrad Feist. On the EIP-4844 Q&A page, Ethereum co-founder ** Vitalik Buterin described Proto-Danksharding as a "stopgap" solution that will drastically reduce rollup gas fees until full sharding is implemented. **

EIP-4844 is an expansion plan around Rollup, and it is also the first step in the expansion of Ethereum. Before the upgrade, rollup data is permanently stored on Ethereum, and the storage cost is expensive. 90% of the transaction cost paid by users for rollup is due to the storage cost.

For this reason, EIP-4844 introduces a new type of transaction - Blob Transaction. The data will be migrated to the "Blob" for temporary storage. The storage time is about 1 month, and the data will be deleted afterwards. If you want to store long-term data, it will be stored by other service providers according to actual needs.

Shard blob transaction

Just mentioned, EIP-4844 introduces a transaction type called "blob carrying transaction". Blob (binary large object) is short for "binary large objects" and stands for 125 KB of payload data. To create a blob carrying transactions, a rollup needs to commit its data to the blob and append it to the block.

A blob carry transaction can contain up to two blobs. Additionally, **to encourage such transactions, the upgrade will implement a multi-dimensional EIP-1559 fee market. This feature will introduce variable gas fees for blob carry transactions based on supply and demand. **

The main benefit of blob-carrying transactions is cost-effectiveness. Currently, rollup permanently stores transaction data on the Ethereum blockchain via CallData. However, blob data is much cheaper than CallData because it is not kept forever on the execution layer (Ethereum Virtual Machine). Instead, beacon nodes store it in the consensus layer, and after a month or a year, the blob is deleted. The process is similar to clearing cached data from a laptop or device.

Blobs, although introduced by EIP-4844, will be fully compatible with the format used in final sharding. In EIP-4844, each rollup transaction contains at most 2 blobs, and each block contains 8-16 blobs, which is about 1MB to 2MB. In a full sharding scenario, the blob can be further expanded to 16MB to 32MB.

In other words, when blobs become part of the Ethereum protocol through Proto-DankSharding, more blobs will be added to the Ethereum block. At this time, the throughput of Ethereum will be greatly expanded again, and the transaction cost will also decrease. .

During a transaction, a polynomial scheme called KZG (named after its creators Kate, Zaverucha, and Goldberg) will verify the transaction data posted in the blob. Like other zero-knowledge verification systems, KZG can verify without revealing the full contents of the blob.

Core for Cancun Upgrade: EIP-4844

**According to the Ethereum Executive Layer Core Developers meeting in June, the Cancun upgrade includes 5 EIPs aimed at adding more data storage and lowering fees. **The core content of the upgrade is EIP-4844, which aims to realize the temporary storage and retrieval of off-chain data through Ethereum nodes to meet the data and storage needs of blockchain applications.

Devnet test network is constantly improving

Since October 2022, Ethereum developers have launched a multi-client testnet, also known as a devnet, for EIP-4844. Since the successful activation of the "Shanghai Upgrade" on April 12 this year, Ethereum developers immediately turned their attention to the preparations for the "Cancun Upgrade".

To be precise, Cancun is the name of the next upgrade of the Ethereum Execution Layer (EL), while Deneb is the name of the upgrade corresponding to the Ethereum Consensus Layer (CL). During the ACDE conference call, developers discussed the final scope of the Cancun/Deneb upgrade, which will center on EIP-4844, the implementation of the blob transaction type, in preparation for Deneb, starting with the launch of Devnet 5.

Some notable changes were made to Devnet 5, such as the execution layer (EL) disallowing zero-blob transactions, switching the blob transaction type to 0x03, and decoupling blobs and blocks. In terms of engine API updates, there are plans to add corresponding proofs to the not-yet-merged getBlobsBundleV1 and merge the "getPayloadV3" and "getBlobsBundleV1" calls into one. In terms of the beacon chain API, adding a blob signature port is optional.

At the end of May this year, Ethereum community developer terence.eth shared the content of the 22nd EIP-4844 implementer conference call. The conference mainly covered three major topics:

1.Deneb engine API version control;

2. Add "data_gas_used" to the execution header;

**3.Devnet 6 scope and testing update. **

Among other things, the conference has decided to add "data_gas_used" to the execution header in the EIP-4844 update, because the regular base fee was calculated using the current header in the previously used EIP1559. In EIP-4844, the data gas calculation uses the parent header instead of the current header, excess_data_gas is the price of the next block, and base_fee is the price of the current block.

In addition, the meeting decided that in order for Devnet 6 to cover the "data_gas_used" update, before "data_gas_used" is transferred to Devnet 6, another testnet subordinate to EIP4844 will be used for testing.

**At the end of June, developers of the DevOps team of the Ethereum Foundation stated that all EL and CL client teams have passed the relevant Hive tests of Devnet 7, and plans to launch Devnet 7 on June 30 or July 3 at the earliest. **Devnet 7 is a dedicated short-term test network for EIP-4844, no other code changes will be tested.

The launch target for Devnet 7 is to increase the blob limit from 2 to 3, and increase the maximum blob limit from 4 to 6. The goal of increasing the blob capacity was proposed by Dankrad Feist, a researcher at the Ethereum Foundation, after conducting data experiments to test the network's ability to handle large blocks.

Regarding the Cancun upgrade progress, the developers have agreed to update the pre-compiled address of EIP-4844, the test case of EVM instruction copy memory area (EIP-5656) has been added to the test framework, and the engine API meeting responsible for the communication between the consensus layer and the execution layer Faced with some changes, Devnet 6 has been stabilized after leak checking and filling, and Devnet 7 with the same code will be launched and focus on EIP-4844 related testing.

Estimated launch time of Cancun upgrade

On May 26 this year, **Alex Stokes, a researcher at the **Ethereum Foundation, stated that a reasonable target date for the activation of Cancun is October 2023. **Geth (EL) developer Lightclient affirms this statement, believing that an upgrade based on its current scope is at least 5-6 months away.

On June 9th, Tim Beiko, the core developer of Ethereum, posted a post on his social platform summarizing the discussion of the latest Ethereum Executive Layer Core Developers Conference (ACDE). The meeting finally determined that the Cancun upgrade contains 5 EIPs, aiming to add more data storage and reduce fees.

The core content is EIP-4844, which aims to realize the temporary storage and retrieval of off-chain data through Ethereum nodes to meet the data and storage needs of blockchain applications.

Other selected EIPs include EIP-1153 (reduce the cost of storing data on the chain, thereby improving block space), EIP-4788 (improve the design of cross-chain bridges and equity pools), EIP-5656 (add minor code changes) and EIP-6780 (removal of code that could terminate smart contracts). The meeting did not make an accurate prediction on the timing of the Cancun upgrade, but it is expected to take place before the end of 2023.

Aims and Impact of the Cancun Upgrade

The overall goal of the Cancun upgrade is to continue preparing for a full data sharding network while scaling rollups during the transition period. The introduction of blob carrying transactions will increase the data availability of rollups and greatly reduce the cost of rollups. EIP 4844 will also include most of the execution layer logic and the groundwork for full sharding. This step will greatly reduce the implementation effort required for subsequent upgrades.

**After the activation of the Cancun upgrade, users will experience faster and cheaper payments when using the native cryptocurrencies, applications and ERC-based tokens of the Ethereum ecosystem. **The Cancun upgrade is an important upgrade of Ethereum, which makes Ethereum L1 sharding open a new chapter, reduces the transmission cost between L1 and L2, achieves lower gas fees and higher TPS, and benefits L2 and other related ecology, thus further strengthening the competitiveness of the "Ethereum + L2" architecture.

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