Go Back

What is the Ethereum Dencun Upgrade?

Everything you need to know about the upgrade and benefits of trading on Sushi

Date

Everything you need to know about the Ethereum Dencun Upgrade and the benefits of trading on Sushi.

TL;DR: 

The Ethereum Denouement Upgrade, nicknamed "Dencun," introduces significant code changes aiming to lower fees for layer-2 networks on Ethereum. Core to this Upgrade is EIP-4844, known as "proto-danksharding," enhancing Ethereum's ability to handle L2 network data. With this, "blobs" are integrated, enabling cheaper Layer 2 transactions. Blobs improve data availability without disrupting infrastructure, benefiting Layer 2s like Base, Optimism, Arbitrum One. While some Layer 2 chains may adopt blobs immediately, others may take time. Sushi users benefit from lower gas fees on L2s that have implemented blobs and lower fees on cross-chain swaps in between L2.

The Ethereum Denouement Upgrade is live! Termed "Dencun" as a fusion of the project names Deneb and Cancun, the upgrade marks a significant milestone for the Ethereum blockchain, introducing the most substantial code changes in over a year. The Dencun Upgrade is designed to reduce fees for the growing layer-2 networks that operate on top of Ethereum.

At the heart of Dencun lies Ethereum Improvement Proposal (EIP) 4844, colloquially dubbed "proto-danksharding," which aims to enhance the blockchain's capacity to manage data emanating from L2 networks. 

“The Blobs”

With the activation of EIP-4844, Ethereum's core developers have integrated "blobs" into the mainnet, heralding a new era of cost-effective Layer 2 transactions. Ethereum Layer 2 rollups can now use blobs instead of the “calldata” method for posting transactions — offering a direct path to fee reduction and passing these savings to end users.

Blobs are intended to enhance Ethereum by improving data availability while not affecting the current infrastructure, thereby reducing transaction costs on Layer 2s such as Base, Optimism, Arbitrum One, and several others. A separate fee market for blobs will attempt to maintain low transaction costs for Layer 2s, even in times of high network congestion.

While some Layer 2 chains plan to integrate blobs immediately such as Optimism and Base, others may take a while.

Lower Network Fees for Sushi Users

The most important question: How can users on Sushi benefit from this Dencun upgrade?

Users on Sushi can enjoy lower network fees in two key ways:

  1. Swap or Transact on L2s: The upgrade introduces lower network fees for all Layer 2 swaps or transactions on Sushi. This means reduced transaction costs, making trading more affordable for traders.
  2. SushiXSwap Cross-chain Swaps: Sushi’s cross-chain swaps allow users to swap assets across 7 major networks, including Ethereum, BNB Chain, Avalanche, and L2s such as Arbitrum, Optimism, Base, and Polygon. Users can enjoy lower network fees on swaps across chains activated by blobs, such as Base and Optimism.
Hover over Network fee to see the network fees of both chains

Overall, the Dencun upgrade enhances the trading experience on Sushi, offering users greater flexibility and affordability in the decentralized finance (DeFi) space.

Swap with low fees now:


Share article

Latest articles

Sushi Launches Automatic Tax Token Support