In-depth Analysis of the Post-Upgrade Era in Cancun: Data and Investment Perspectives

Introduction

Since its official launch on July 30, 2015, Ethereum has undergone 12 upgrades in history, each attracting significant attention.

The main goal of the Ethereum Cancun-Deneb upgrade ( Dencun upgrade ) is to enhance the scalability and modularity of Layer 2 networks, strengthen the security features of the Ethereum network, and improve overall usability.

1. What is the Dencun upgrade

1.1 Upgrade Introduction

1.1.1 Origin of the Name

The Ethereum base layer is composed of two parts: the execution layer and the consensus layer, each with different naming conventions.

The execution layer upgrade is named after the host cities of Devcon, such as the Berlin upgrade, London upgrade, Shanghai upgrade, etc.

The consensus layer upgrade is named after celestial bodies in alphabetical order, such as Altair (, Bellatrix ), Capella (, etc.

The overall upgrade name is composed of two parts. This upgrade takes place in Cancun, Mexico, and the consensus layer is upgraded to Deneb, hence the abbreviation Dencun upgrade.

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)# 1.1.2 Upgrade Background

The Dencun upgrade is based on the long-term development plan of Ethereum, aiming to enhance user experience and ultimately achieve a decentralized, censorship-resistant, and open-source ecosystem.

Corresponding to the surge section announced by Vitalik, the goal is to improve network efficiency and reduce transaction costs, laying a foundation for future development.

Vitalik believes that reducing transaction fees can prevent blockchain from being limited to asset speculation, benefiting the realization of value.

1.1.3 Upgrade Time

Execution Layer ( Cancun ): March 13, 2024 Consensus Layer ### Deneb (: March 13, 2024

)# 1.1.4 Involved Content

Includes 9 EIPs, improving the execution layer and consensus layer.

Key points of the Dencun upgrade 1.2

(# 1.2.1 EIP-4844 Shard Blob Transactions ) Proto-Danksharding ###

Introducing a new data storage structure called Blob, specifically designed to store transaction data submitted from L2 to L1, significantly reducing L2 transaction fees and increasing throughput.

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)# 1.2.2 EIP-1153 Transient Storage Opcode

Introducing new opcodes TSTORE and TLOAD to reduce storage costs and Gas consumption.

(# 1.2.3 EIP-4788 Beacon Block Root in EVM

Implement communication between EVM and the Beacon Chain, supporting use cases such as staking pools, re-staking, and cross-chain bridges.

)# 1.2.4 EIP-5656 MCOPY - Memory Copy Instruction

Introduce new command MCOPY to optimize memory copy efficiency.

1.2.5 EIP-6780 SELFDESTRUCT only in the same transaction

Limit the functionality of the SELFDESTRUCT opcode to improve development stability.

2. Impact on Data Layer After Upgrade

2.1 Gas Fee Impact

Layer 2 gas fees have decreased significantly, meeting expectations of a 90% reduction. Ethereum gas fees have decreased, but not significantly.

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) 2.2 Trading Volume Impact

The trading volume of each L2 has increased, with Base rising from 500,000 to 2,000,000, benefiting the most.

2.3 TPS impact

The TPS of each L2 has increased, but the extent is not significant, laying the foundation for future development.

2.4 Blob usage

Blob has started to be used, but the overall usage rate is not high and has not reached the estimated goal of an average of 3 Blobs. The data costs on L2 are significantly lower than on L1.

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) 2.5 price impact

The price of the issued L2 token has fallen after the upgrade, in line with the pattern of profit-taking.

3. Impact of Investment Value

3.1 Ethereum Relay Handoff L2

Ethereum is gradually shifting its expansion focus to L2, and ETH is more inclined towards long-term investment assets.

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) 3.2 L2 Ecological Explosion

L2 transaction fees have dropped significantly, attracting more users. Arbitrum and Optimism are worth paying attention to as leaders. Base data performs brilliantly, with clear advantages backed by Coinbase. Unlaunched L2s such as Blast, Zksync, etc. still need attention.

However, a large number of concurrent transactions may still lead to an increase in the fee for a single L2 transaction.

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4. Conclusion and Outlook

1. The Dencun upgrade has shown significant effects, with L2 transaction costs greatly reduced, but the decrease in Ethereum itself is limited.

2. The upgrade enhances Ethereum's scalability, laying the foundation for future high concurrency.

3. The L2 ecosystem is expected to thrive further, with Arbitrum, Optimism, Base, and others worth paying attention to.

4. The user experience has significantly improved, which is expected to drive a positive cycle in the ecosystem.

5. There are still investment opportunities in L2 projects that have not issued tokens, and they are worth continuous attention.