Decun’s Impact on Ethereum’s L2: CoinEx Research’s Stance

CoinEx, a global exchange, recently detailed the eagerly awaited Dencun mainnet upgrade for Ethereum in 2024. The company provided insights into the upgrade’s main elements, including Proto-Danksharding, blobs, and KZG Polynomial Commitment.

Dencun is set to encompass five Ethereum Improvement Proposals (EIPs), with EIP-4844 receiving the most attention due to its focus on addressing Ethereum’s scalability issues and reducing transaction costs for tier-two solutions like L2. Alongside EIP-4844, Dencun will also feature EIP-1153, EIP-4788, EIP-5656, and EIP-6780, each bringing unique enhancements to the Ethereum ecosystem.

CoinEx Research highlighted Proto-Danksharding as a crucial component of the upgrade, aiming to revamp how Ethereum stores information essential for L1 mainnet and L2 network interactions. Additionally, Dencun will introduce a new data structure called a blob to store transaction data transmitted from Tier 2 to Tier 1, while implementing the KZG Polynomial Commitment to ensure the security and immutability of this process.

The activation of these upgrades is expected to expedite L2 transactions and reduce costs through optimized data logistics. EIP-1153 will reduce gas-related overhead for users and on-chain developers, while EIP-4788 will enhance compatibility between L2 blockchains and the Ethereum Virtual Machine (EVM). Furthermore, EIP-5656 will lower gas costs for users and decentralized applications (dApps).

With the focus on EIP-4844, Dencun’s upgrade promises to improve layer 2 throughput and lower transaction fees through the introduction of blobs, ultimately enhancing the competitiveness of Ethereum-based Tier 2 projects. CoinEx’s experts emphasized that dApps such as derivatives, LSD, staking applications, and bridge categories will benefit significantly from the activation of Dencun.

CoinEx, established in 2017, is a global cryptocurrency exchange offering a wide range of services such as spot and margin trading, futures, swaps, automatic market maker (AMM), and financial management to over 5 million users across 200 countries and regions. The platform maintains a user-first approach, aiming to create a fair, respectful, and secure cryptocurrency trading environment for users of all experience levels. CoinEx’s easy-to-use products provide an entry point for individuals looking to enter the cryptocurrency world.

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