What is Cancun Upgrade? After Shanghai Upgrade, the next update called Cancun Upgrade makes the Ethereum community extremely looking forward to it because it will create a special difference for current Layer 2 platforms such as Arbitrum, Optimism, zkSync, Linea, Base ,… So if Cancun Upgrade has anything interesting, let’s find out in the article below.
To understand more about Cancun Upgrade, people can refer to some of the articles below:
- Crypto Panorama 101 | Episode 3: What is Ethereum?
- What is Danksharding? All About Danksharding & Ethereum’s EIP 4844
- What is Shanghai Upgrade? Will ETH Be Sold Off By Investors?
Cancun Upgrade Overview
What is Cancun Upgrade?
Cancun will be the next Upgrade right after Shanghai and is expected to be deployed at the end of 2023. Cancun Upgrade will include many different EIPs including EIP 4844, EIP 6780, EIP 6475 and EIP 1153, of which EIP 4844 serves as the central EIP and receives the most attention from the community.
EIP 4844 is an update that introduces a new type of data compression called Blob Data to replace Call Data. Blob Data is different from Call Data in that if Call Data is stored permanently on the mainnet, Blob Data is only stored on the mainnet for a certain period of time, so Blob Data is expected to reduce transaction fees on platforms. Layer 2 a lot. The reduction in transaction fees caused by EIP 4844 is even greater than that of EIP 4844.
EIP 4844 also forms the basis for a complete Danksharding update over the coming years. To better understand EIP 4844, Danksharding, people can refer to the article What is Danksharding? All About Danksharding & Ethereum’s EIP 4844.
In addition to EIP 4844, we also have a number of other EIPs (Note: Some EIPs may not be included in Cancun Upgrade) include:
- EIP 6780: Is an improvement proposal for Ethereum that would disable the SELFDESTRUCT opcode, except in cases where it occurs in the same transaction in which the contract was created. This will help improve Ethereum’s security by making it more difficult to exploit vulnerabilities in smart contracts.
- EIP 6475: Introduces optional SSZ transaction format. The SSZ format is a serialization format that is smaller and more efficient than the RLP format currently used by Ethereum. EIP 6475 will allow developers to use the SSZ format for their transactions, which could help improve Ethereum’s performance.
- EIP 1153: Is an improvement proposal for Ethereum that introduces ephemeral opcodes for storage. This will help improve Ethereum’s performance by making temporary memory access and modifications cheaper.
- EIP 5656: Is an improvement proposal for Ethereum introducing MCOPY instructions for smart contracts. This guide allows smart contracts to copy memory areas faster and more efficiently.
- EIP 4788: Is an improvement proposal for Ethereum that introduces a new way for smart contracts to access data from the Beacon Chain. This will help improve the scalability and security of the network, while also opening up new use cases for smart contracts.
- EIP 5920: Introducing a new opcode called PAY. This opcode will allow contracts to send ether to other addresses without needing to execute any functions. This could help improve the security of smart contracts by making it more difficult to exploit vulnerabilities in smart contracts.
- EIP 663: Introduces two new opcodes named SWAPN and DUPN. These opcodes will allow smart contracts to manipulate a stack deeper than 16, which can help improve the performance of smart contracts.
The route takes place
The Cancun Upgrade is expected to take place at the end of 2023. The exact time has not yet been confirmed by the Ethereum Foundation.
Impacts of the Cancun Upgrade on the Ethereum network
Cancun has profound impacts on the Ethereum network and Layer 2 platforms as follows:
- Ethereum: EIP 4844 is an important step for Ethereum to move towards Danksharding, which can be said to be Endgame in helping Ethereum officially Mass Adoption.
- Layer 2: EIP 4844 introduces Blob Data which will certainly greatly reduce transaction fees on Layer 2 platforms.
So will the Cancun Upgrade have any impact on the price of Ethereum? The answer is no. But the impact of the Cancun Upgrade will be long-term, meaning we will have a flyweel that indirectly impacts the price of ETH in the long term as follows:
- Transaction fees on L2 are significantly reduced.
- => Users from Ethereum and other L1s continue to flock to Layer 2.
- => Users increased.
- => Transactions increase.
- => The amount of ETH used as fees is increasing.
- => The need to own ETH causes higher fees
- => ETH increases in price in the long term.
Some of the risks of Cancun Upgrade
Introducing a new compressed data poses many risks in the interaction between Layer 2 and Layer 1, so remember that there are currently billions of dollars in TVL on Layer 2 platforms such as Arbitrum, Optimism, zkSync, Base, etc. If there is a problem with the interaction, there will certainly be some major consequences if not promptly resolved.
Besides, many users expect EIP 4844 will be the Endgame for transaction fees on Layer 2 and what if transaction fees continue to be pushed up?
Summary
Cancun Upgrade plays an important role in Ethereum’s long-term updates, besides it also helps Layer 2 solve the problem of transaction fees. Hopefully through this article everyone will understand what Cancun Upgrade is?
