Denkun update is not enough to measure Ethereum

Ethereum (ETH) has limitations. It was clear from the start that the current technology could not handle the large volume of transactions. With the ever-increasing use cases and critical importance to various sectors, it is important to implement new solutions to measure the network. The reform of Denkun – scheduled for March 13 – is a step in the right direction, but it is only a short-term patch that needs a permanent and lasting solution.

Finding balance, the balance between security and decentralization, is a long-standing issue of blockchain's trilemma. However, multi-chain solutions, with an emphasis on functionality and security, have the potential to help Ethereum reach its full potential.

Denkun is a temporary solution

Denkun's update, aimed at increasing Ethereum's scalability, is currently being implemented on testnets. While a bug caused an update delay on the Goerli testnet, work on Sepolia and Holeski went well.

Related: Why Solana Wins Despite Ethereum ETFs

Denkun introduces the concept of proto-danksharding, which is designed to reduce the cost of transactions by using a “blob” format instead of call data. Data blobs provide major storage efficiency improvements by making transaction data available in a temporary “compressed” format. They can be more cost-effective than call data, with the potential to reduce costs by 80 to 90%. The same format will be used later for the full update. Overall, Denkun's upgrade brings higher storage efficiency, lower gas bills and an overall better experience for developers, and makes packages more cost-effective.

The Denkun update, which is expected to be completed on March 13, is driving ETH.

The EIP-4844 enables “data footprints” that compress transaction data structures, reducing L2 transaction fees to less than $0.01.

This gives the Ethereum network massive recognition, and… https://t.co/VulEgyEzZD

— Juan Leon (@singularity7x) February 22, 2024

A step in the right direction, denkun reform is not a permanent solution. The update is focused on making data storage more efficient, which is no doubt the case. But the long-term issue facing the Ethereum network is capacity. The future focus should be on expanding the capacity of the network to support the growing number of transactions and we will do this through multi-chain solutions.

The way forward

Multi-chain solutions, such as blockchains and blockchains, are ideal methods to increase Ethereum's long-term capacity.

Appchains, also known as application-specific blockchains, are specialized blockchain networks with their own processing power and storage designed to serve a single application. They can be built on a larger mainnet, such as Ethereum, or layer-2 (L2) chains. Transactions are offloaded from the main network and processed on the appchain instead. If widely used, appchains can and will increase the potential of Ethereum significantly.

Rollup technology can be used to build an appchain, but it is different in conducting off-chain transactions. Transactions are made off-chain, then “referred” to a single transaction and fed into the mainnet. Rollups are generally less efficient than appchains, as they usually rely more on the main chain for security than appchains. They are also less customizable than AppChain, but still offer some flexibility and are easier to deploy and manage.

Related: 2024 Will Be the Biggest Year in Ethereum Network's History

While both are beneficial in their own right, using Bundle and AppChain achieves a synergistic effect, combining Bundle's marketing efficiency with AppChain's flexibility and customization. In addition, developers can expand beyond Layer-1 (L1) networks into a scalable and versatile environment, allowing users to design and deploy blockchain applications while maintaining greater efficiency and security.

By increasing capacity, throughput, reducing latency and improved resource management, multi-chain solutions allow the network to handle higher volumes of transactions while maintaining optimal performance.

Navigating the challenges

In fairness, implementing multi-chain solutions on the Ethereum network presents a variety of challenges that require careful exploration and attention for developers. One of the primary obstacles is the complexity associated with managing interactions between different chains, requiring a thorough understanding of cross-chain communication protocols and integration techniques. Ensuring consistent security measures across multiple chains is another challenge.

Overcoming these challenges requires a comprehensive understanding of the technical complexities involved, and a commitment to creating an accessible and developer-friendly environment that promotes seamless integration and effective use of multi-chain solutions.

The future of Ethereum is exciting. Finance, identity, gaming, supply chain, healthcare, food delivery and many other industries are reaping the benefits of the network. But the growing pains are increasing.

Capacity is a growing concern for Ethereum. Although the dengue modification helps the condition by improving the efficiency, it is only a band-aid solution. In the long term, the best way is to increase capacity, which is done through multi-chain solutions like Appchain and Packet.

This article is not intended for general information purposes and should not be construed as legal or investment advice. The views, ideas and opinions expressed herein are solely those of the author and do not necessarily represent the views and opinions of Cointelegraph.