Ethereum Cancun Upgrade is Coming, What Changes Will the EIP Protocol Upgrade Bring to the Execution Layer and Consensus Layer? This article is sourced from the author BLOB, compiled, organized, and written by BlockBeats.
(Previous Summary: MT Capital Research Report on Understanding the Principles and Investment Opportunities Behind the Cancun Upgrade)
(Supplementary Background: Ethereum Goerli Testnet “Activated Cancun Upgrade on 1/17,” Mainnet Expected by the End of February)
Table of Contents:
Introduction
What is EIP?
What are the Execution Layer and Consensus Layer?
What is Dencun?
Deneb: Consensus Layer EIP
Cancun: Execution Layer EIP
With the Ethereum Cancun Upgrade approaching, Layer 2 has become lively. This article discusses the Dencun upgrade from a high-level perspective, explaining all the changes it will bring to Ethereum, including the Execution Layer and Consensus Layer.
This is the first article in a series of educational articles about Dencun, EIP4844, and lower transaction fees on Ethereum L2.
Here, we will discuss the Dencun upgrade from a high-level perspective, explaining all the changes it will bring to Ethereum, including the Execution Layer and Consensus Layer.
Introduction
What is EIP?
EIP-1
Describes it as:
“EIP stands for Ethereum Improvement Proposal.”
EIP is a design document that provides information to the Ethereum community or describes new features of Ethereum, its processes, or its environment.
Anyone can start a conversation on Ethereum Magicians or Ethereum Research forums to discuss the changes they would like to make on Ethereum. Once there is consensus on the idea, the author can write an EIP-1 following the process described in the EIP.
What are the Execution Layer and Consensus Layer?
Since Ethereum underwent the Merge (also known as the “Paris Upgrade”), Ethereum has been operating on two separate and isolated layers: the “Execution Layer” and the “Consensus Layer.” These layers have different functions and together form the PoS version of the Ethereum blockchain:
Execution Layer (EL): Responsible for applying the changes brought by transactions to the blockchain.
To understand what this means, let’s take an example of Alice wanting to exchange 10 WETH for BLOB: Alice needs to send a transaction to the Ethereum blockchain specifying the exchange of her WETH for BLOB. When Alice’s transaction is included in the blockchain, the Execution Layer is responsible for executing all the necessary code (token exchange on Sushiswap) and updating Alice’s token balance and approvals, effectively modifying the blockchain’s database.
Essentially, you can think of the Execution Layer as the engine of Ethereum that powers it when users interact with the blockchain.
Consensus Layer (CL): Responsible for reaching consensus among all blockchain nodes. Since the blockchain is supported by a distributed network of participants, these participants (usually referred to as “nodes”) must agree on the blockchain. If this doesn’t happen and Ethereum nodes disagree, we would enter a world where part of Ethereum thinks Alice has 10 WETH while another part thinks Alice has no WETH.
Think of the Consensus Layer as the steering wheel of Ethereum, defining the path the entire Ethereum blockchain is going to take!
Key Point: The Execution Layer and Consensus Layer are separate and independent, maintained by different teams.
What is Dencun?
Dencun = Deneb + Cancun
Since Ethereum now consists of 2 separate layers, both layers need to make their own modifications to support large-scale changes (such as EIP4844).
Therefore, major upgrades now require upgrades to both layers. For this reason, Ethereum core developers like to use one name to refer to the general Ethereum upgrade, obtained by combining the names of the upgrades for each layer:
Shapella = Shanghai (EL) + Capella (CL)
Dencun = Cancun (EL) + Deneb (CL)
Interestingly, EL upgrades are named after cities, while CL upgrades are named after planets.
Now that we understand the two main components of Dencun, let’s dive deeper into them.
Deneb (CL Upgrade) will include 5 EIPs, and Cancun will include 6 EIPs.
Deneb: Consensus Layer EIP
EIP-4788: Beacon Block Root in EVM
This EIP introduces a “proof” of the consensus layer condition and makes it available for smart contracts on Ethereum, located in the execution layer.
Staking pools, re-staking protocols, bridges, and other systems will benefit from improved trust assumptions during execution.
EIP-4844: Shard Blob Transactions
This EIP introduces a new transaction format for “Blob-carrying transactions.” This new transaction format will be adopted by L2 networks like Arbitrum and Optimism to release their L2 transactions on Ethereum in a compressed format. This improvement will also establish a separate fee market for these transactions, meaning Ethereum users and L2 networks won’t compete in the Ethereum fee market and will have their own gas prices.
EIP-7044: Voluntary Exit with Permanent Effective Signature
This EIP brings improvements to the quality of life for Ethereum validators executing with split certificates, making it easier to withdraw a validator’s stake when verification certificates and withdrawal certificates are held separately.
Curious readers can learn more about this EIP here.
EIP-7045: Increase Maximum Proof Inclusion Slots
This EIP extends the longest time for which Ethereum block submission proofs can be proposed. Proofs are “votes” cast by validators for proposed blocks: enough votes determine whether a new block will be accepted and added to the blockchain.
EIP-7514: Add Maximum Epoch Churn Limit
This EIP intends to introduce a limit on “epoch churn limit,” which directly translates to a limit on the “maximum validator growth rate.” Ethereum core developers plan to limit the speed at which the number of Ethereum validators grows, allowing the team more time to research more comprehensive solutions to address potential issues that may arise when 100% ETH staking is reached.
Cancun: Execution Layer EIP
EIP-1153: Transient Storage Opcodes
This EIP introduces TLOAD and TSTORE opcodes to the Ethereum Virtual Machine. These will be used to specify that certain smart contract data is temporary: it will return to its original value before the transaction is completed! This means smart contracts will be able to have storage that only changes within a transaction! Such storage will revert to its original state after the transaction ends.
Many contracts and protocols will benefit from this as the gas cost of variables used in reentrancy protection will be reduced. (Reentrancy protection is a variable set to an initial value that is modified during transaction execution and reset to the initial value at the end of the transaction)
EIP-4788: Beacon Block Root in EVM. This EIP is of interest to both CL and EL.
EIP-4844: Shard Blob Transactions. Our beloved EIP-4844 has already been discussed in the Deneb section.
EIP-5656: MCOPY Memory Copy Opcode
This EIP introduces the MCOPY opcode to the Ethereum Virtual Machine, allowing for copying a segment of memory during smart contract execution and writing it to a different part of memory.
EIP-6780: SELFDESTRUCT Only in the Same Transaction
This EIP is part of an overall plan for deprecation. It changes the behavior of this opcode to delete an account only when the opcode is executed in the same transaction that creates the smart contract.
It has long been intended for deprecation as it hinders the immutability of the Ethereum blockchain. Therefore, the opcode will be modified to allow account deletion only in the same transaction that creates the contract! SELFDESTRUCT
EIP-7516: BLOBBASEFEE Opcode
This EIP introduces the BLOBBASEFEE opcode, which returns the current base fee of the data blob. Similar to how transaction fees work on Ethereum today, data blob transactions will be priced using a flexible base fee mechanism that determines the total gas price for sending such transactions!
Just like normal transaction base fees, if the number of Blob transactions exceeds the target transaction count, the Blob base fee will gradually increase, and if it falls below the target transaction count, the Blob base fee will gradually decrease.
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