Author: Climber, Golden Finance
The much-anticipated Ethereum Cancun upgrade is finally here!
On March 13, according to the official blog of the Ethereum Foundation, the Ethereum Cancun upgrade was activated on the mainnet at epoch 69568. As another important milestone for Ethereum after its Shanghai upgrade last year, it is of great significance to the project itself and even the entire blockchain industry.
Reports and research articles about the Cancun upgrade have been increasing day by day since the Shanghai upgrade. What investors are most concerned about is which tracks and projects this upgrade will benefit. To this end, Golden Financial System has sorted out multiple valuable information in this incident for readers’ reference.
Relevant data performance on the occasion of the Ethereum Cancun upgrade
With the arrival of the Ethereum Cancun upgrade, the prices of Ethereum TVL and ETH have also arrived Stage high point.
According to DefiLlama data , the current TVL of the Ethereum network is approximately $57.865 billion, setting a new high since May 2022.
At the same time, Ethereum TVL ranks first with 58.13% of the existing 258 chains, and it is still the unbreakable "King of Ten Thousand Chains". In addition, there are as many as 990 protocols on the Ethereum chain.
The price of the Ethereum project token ETH is also rising, rising from around US$1,500 in mid-October last year to the current US$4,066, an increase of approximately 171%. Especially in the past month, ETH has increased significantly, with an increase of about 60%.
Looking back before and after the Shanghai upgrade, one month before April 13 last year, the low of ETH was $1,368.39. Later, stimulated by the positive news, it rose to $2141.54, an increase of approximately 56.57%. But it has been falling since then.
There is not much difference between the two in terms of increase, but it should be noted that the current encryption market can be described as a bull market. BTC has broken its all-time high, and most currencies are rising. However, ETH, the second largest cryptocurrency, has only increased so far, which is a bit unconvincing.
At the same time, the current Ethernet The GAS fee of Fang Network is still high, which makes people a little discouraged when interacting. According to OKLINK data, since February 20, the amount of ETH burned has been increasing day by day, with 6K+ ETH being burned almost every day, which is approximately US$24.39 million at current prices.
However, from the above It can be seen from the comparison of the data in the figure that even if the Cancun upgrade is completed, the transaction fees for the Ethereum network have not been reduced.
The main contents of the Cancun upgrade
The full name of the Cancun upgrade is "Cancun-Deneb", which is a combination of the two upgrades Cancun and Deneb. The English abbreviation is "Dencun". Among them, Cancun focuses on the network scalability of the execution layer, while Deneb focuses on improving the consensus layer of Ethereum.
From 2015 7 Counting the Ethereum border upgrade on March 30, as of today, Ethereum has been upgraded 12 times.
The Cancun upgrade includes five EIPs designed to add more data storage and reduce fees. The upgrade is centered on EIP-4844. In addition, it also includes four improvement proposals: EIP-1153, EIP-4788, EIP-5656, and EIP-6780.
EIP-4844: As the core of the Cancun upgrade, EIP-4844, also known as Proto-Danksharding, is an expansion plan centered around Rollup.
Proto-DankSharding is a core upgrade to Dencun that reduces transaction costs and reduces data availability costs for L2 blockchains, thereby solving key scalability challenges. This will lay the foundation for the eventual implementation of “Danksharding” and further extend these benefits.
EIP-4844 is also the first step in the expansion of Ethereum. Before the upgrade, Rollup data was permanently stored on Ethereum. Since storage costs are expensive, 90% of the transaction costs paid by users for Rollup are due to this storage cost.
To this end, EIP-4844 introduces a new transaction type - Blob Transaction. The data will be migrated to "Blob" for temporary storage. The storage time is about 1 month, after which the data will be delete. If you want to store long-term data, other service providers will store it according to actual needs.
When Blobs become part of the Ethereum protocol through Proto-Danksharding, it will be possible to add more Blobs to the Ethereum block. At this time, Ethereum's throughput will be greatly expanded again (> 100 times), while transaction costs will also fall.
Other selected EIPs include:
EIP-1153: Reduce the cost of storing data on-chain, thereby improving block space.
EIP-4788: Improve the design of cross-chain bridges and stake pools.
EIP-5656: Add minor code changes related to the Ethereum Virtual Machine.
EIP-6780: Remove code that may terminate smart contracts.
Key features of the Ethereum Cancun-Deneb upgrade include:
Enhanced scalability: By implementing native encryption technology (EIP-4844), the upgraded version aims to The chain is divided into smaller parts or "blobs". This allows transactions and smart contracts to be processed in parallel, greatly increasing network capacity and reducing transaction fees.
Improve security and consensus mechanism: The upgrade of the consensus layer (Deneb) focuses on strengthening network security and improving the Ethereum Proof of Signature (PoS) consensus algorithm.
Optimizing GAS efficiency: Introducing various EIPs, including EIP-1559 (changes in charging market), EIP-2929 (increased cost of national access to GAS) and EIP-2537 (BLS curve operation), aiming to improve GAS efficiency reduces transaction costs and improves the overall user experience of the network.
Optimizing Data Storage: Implementation of EIP-1153 will lead to more efficient blockchain data storage, improved operations, and lower costs, which will enable Layer 2 solutions that rely on simplified data management Benefit.
Enhanced cross-chain capabilities: EIP-4788 is designed to improve the ease of use and security of cross-blockchain interactions, supporting enhanced interoperability with Layer 2 solutions.
Overall, the Cancun upgrade is expected to improve the adaptability, security, and user experience of the Ethereum network, solidify its position in the digital asset space, and enhance the capabilities of layer 2 solutions.
Favorable tracks and projects
The most significant positive track of the Ethereum Cancun upgrade event is Layer 2. The introduction of blobs has reduced L2 transaction costs has dropped significantly, and TPS has also been improved to a certain extent.
According to L2BEAT data, the current TVL of the Layer 2 sector is approximately US$38.98 billion. , and has increased by 11.08% in the past 7 days, and the TVL of many star projects has also increased significantly.
At the same time, the Cancun upgrade will also drive the prosperity of L2 ecological projects. Therefore, the top and popular projects on each L2 chain are worthy of attention.
In addition, the Cancun upgrade will also drive the development of DA, DeFi, LSD, full-chain games, and Infra tracks. Potential projects are as follows:
DA: EthStorage, Covalent, EigenDA, Polygon Avail, Caldera, Altlayer, Lumoz and more.
DeFi: ApeX Protocol, Aevo, Vertex Protocol, GMX, Synthetix, GNS.
LSD: Lido, Rocketpool, Swell, Eigenlayer, Renzo.
Full-chain games: MUD, Redstone, Sky Strife, Loot Survivor, Issac, Influence, World Engine, Cardinal.
Infra: Caldera, Altlayer, Lumoz.
Summary
The arrival of the Cancun upgrade means the beginning of the expansion of Ethereum. Higher transaction throughput and lower transaction fees will With the development of more projects and the influx of users on L2, the possibility of generating high-quality projects and funds will also be greatly increased.
From this point of view, the Cancun upgrade is of great significance to both Ethereum, the L2 network, and its on-chain ecological projects. In the future, attention inside and outside the encryption market will likely focus on the Ethereum ecosystem with L2 and L3 as the core, and the legend of Ethereum will also be continued. We may as well wait and see.
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