Ethereum has successfully completed a major software upgrade that should make using the blockchain network ecosystem cheaper. Referred by developers as Dencun, the update lowers expenses for so-called Layer 2 networks — dozens of chains like Arbitrum, Polygon and Coinbase Global Inc.’s Base that link to Ethereum. A transaction that used to cost $1 can now be done for a cent, while a transaction that used to cost a few cents will now cost a fraction of a cent. The upgrade is being hailed as the most significant change in Ethereum ecosystem’s end user experience ever, and expected to spur on development of new applications and free services. With Dencun — a combination of the “Deneb” and “Cancun” named portions of the update — Ethereum introduced a new system of storing data. Currently, most Layer 2 blockchains store data on Ethereum. Because that data is stockpiled forever, on every Ethereum node, the storage often adds up to about 90% of the Layer 2s’ costs, which they usually pass on to applications, and they in turn charge consumers. With Dencun, Layer 2s can store the data in a new type of repository called blobs. Blobs will be cheaper because the data will only be warehoused for about 18 days. As blobs gain traction, there should be more space left on Ethereum for other transactions, so the network should become clogged less often. On the other hand, it will no longer store a complete record of everything forever. Shares of Ether, the native cryptocurrency of the blockchain, have jumped around 75% so far this year.
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