Ethereum Cancun Upgrade: The Shanghai Update with revolutionary scaling technology

The Ethereum Cancun-Dencun upgrade marks a turning point in network development. Implemented on March 13, 2024, this update brings fundamental improvements for scalability, Transaction Cost, and data management. It follows the Shanghai upgrade and sets new standards for decentralized financial applications.

The Core: Proto-Danksharding and Blob Transactions

The core component of the Cancun upgrade is the introduction of Proto-Danksharding (EIP-4844). This technology enables cost-effective data storage through so-called blobs – additional data packets that are temporarily attached to Ethereum transactions.

What makes it technically interesting? Traditional sharding fragments the blockchain into several parts but requires complex coordination mechanisms. Thanks to sharding, named after Ethereum researcher Dankrad Feist, this architecture is radically simplified. It reduces the number of block proposers and prioritizes data availability over complexity.

Proto-danksharding is the transitional solution – the first practical step towards the complete danksharding framework. The blob transactions significantly reduce the transaction cost for Layer-2 rollups already now, without needing to overhaul the entire system.

Four Improvement Proposals (EIPs) in Detail

The upgrade is based on four Ethereum Improvement Proposals:

EIP-4844 – Proto-Danksharding: Reduces rollup fees through temporary blob storage

EIP-1153 – Transient Storage Variables: Increases the storage capacity of blocks and reduces on-chain data storage costs.

EIP-4788 – Beacon Block Root Access: Improves cross-chain communication by providing direct availability of the Beacon blockchain for execution layers.

EIP-6780 – SELFDESTRUCT Restriction: Reduces the risk of manipulation of Smart Contracts and better protects user funds.

Concrete Impact on Users and Developers

Faster transactions and lower fees are the obvious benefits. Layer-2 solutions can now process more transactions per second – a direct step towards the Ethereum roadmap, which aims for scaling to 100,000 TPS.

Data management becomes more efficient: Blobs are deleted after about 18 days, creating a temporary storage mechanism. This reduces blockchain bloat and enables faster light clients.

Security is improved by EIP-6780: The SELFDESTRUCT opcode will no longer be used uncontrollably, thereby eliminating certain attack scenarios.

Historical Background: From Shanghai to Cancun

The Shanghai Upgrade laid the foundation with staking improvements and energy efficiency measures. Cancun builds on this and focuses on data efficiency. The vision: Ethereum as the base layer for thousands of decentralized applications, while scalability is addressed through Layer-2 solutions.

Originally planned for October 2023, the upgrade has been postponed to March 2024 – necessary for thorough testing and examination of all components.

Risks and Challenges

Not everything runs smoothly. Existing smart contracts may have compatibility issues with the new mechanisms. EIP-6780 could affect applications that rely on SELFDESTRUCT.

Integration of new data storage technologies requires careful monitoring. Node operators and stakers had to update their software – to the versions listed in official announcements.

The Big Picture

The Ethereum Cancun upgrade positions itself as a significant step in the long-term development strategy of the network. Proto-Danksharding is not the final stage – full Danksharding will come in future updates. But this milestone shows: Ethereum is continuously evolving and addressing real issues such as high transaction costs and scaling limits.

The Shanghai Upgrade laid the foundation, Cancun now provides the practical scaling solution. Together, these updates pave the way for Ethereum as the leading decentralized finance platform with true mass adoption.