This article is from Cointelgraph, original author: Nebojsa Urosevic
Odaily Planet Daily Translator | Moni
For the cryptocurrency industry, the scalability issue of Ethereum seems to have been obvious from the beginning, especially as the use cases continue to increase, and existing technology cannot handle a large number of transactions, implementing innovative solutions to expand the network is imperative.
If all goes well, the Ethereum Dencun upgrade will take place on March 13. Although this is an important step in the right direction, some community members believe that Dencun is just a short-term patch, and what Ethereum needs is a sustainable long-term solution.
Is Dencun a temporary solution?
The Dencun upgrade aims to enhance the scalability of Ethereum and is currently being deployed on the test network. Although a bug had previously caused a delay in the upgrade of the Goerli test network, the deployment on Sepolia and Holesky has progressed quite smoothly.
Dencun introduces the concept of "proto-danksharding," aiming to reduce transaction costs by using the "blob" format instead of "calldata." The blob will make transaction data temporarily available in a "compressed" format, significantly improving storage efficiency and being more cost-effective than calldata (it is claimed that it may reduce costs by 80% to 90%). Subsequent sharding upgrades will also use the same format. Overall, the Dencun upgrade will bring higher storage efficiency, lower gas fees, and a better experience for developers, while making Rollups more cost-effective.
Bitwise Invest researcher Juan Leon's analysis believes that IP-4844 will enable the "data fingerprint" of compressed transaction data structures, reducing L2 transaction costs to below $0.01, which will greatly promote the expansion of the Ethereum network and pave the way for mainstream consumer applications (transaction costs become negligible, which is a major obstacle). FalconX research director David Lawant also expressed a similar view, adding that "technological developments usually do not affect the price of cryptocurrencies, but the ETH upgrade is an exception. Before key upgrades, ETH's performance often outperforms BTC."
Although the Dencun upgrade is a step in the right direction, it is not a permanent solution. The focus of this upgrade is to make data storage more efficient, which is undoubtedly beneficial. However, the long-term problem facing the Ethereum network is capacity, and the focus of future development must be to expand network capacity to support the increasing number of transactions being executed. From this perspective, a multi-chain solution may be easier to achieve this goal.
The way forward: Rollups and AppChains
Multi-chain solutions, namely Rollups and AppChains, are long-term ideal mechanisms for increasing Ethereum's capacity.
AppChains, also known as application-specific blockchains, have their own dedicated processing power and storage, aimed at serving individual applications. AppChains can be built on a larger mainnet, such as Ethereum, or even L2 blockchains, to support offloading on-chain transactions from the mainnet and processing them on the AppChain. If widely used, AppChains will greatly increase Ethereum's capacity.
Rollup technology can be used to build AppChains, but the difference is that Rollups mainly handle off-chain transactions—transactions are executed off-chain and then "aggregated" into a single transaction feedback to the mainnet. Rollups are generally less efficient than AppChains because they are more dependent on the main chain to ensure security, and they are also less customizable than AppChains, but they can still provide a certain level of flexibility and are easier to deploy and manage.
Since each has its own strengths, combining the transaction efficiency of Rollups with the flexibility and customization of AppChains can achieve synergistic effects. Developers can also benefit from expanding from the L1 network to a more scalable and versatile environment, making it easier to design and deploy blockchain applications that meet the needs of user groups while maintaining high levels of efficiency and security.
By increasing capacity, throughput, reducing latency, and improving resource management, multi-chain solutions enable the network to accommodate a larger volume of transactions while maintaining optimal performance.
Apart from Dencun, how to deal with the blockchain trilemma?
Developers have been working hard to solve the blockchain trilemma, trying to find a balance between scalability, security, and decentralization. Multi-chain solutions emphasize interoperability and security, which may help Ethereum fully realize its potential.
Frankly, implementing multi-chain solutions on the Ethereum network also brings a series of unique challenges for developers. One of the main obstacles to multi-chain solutions at present is that the management of interoperability between different chains is too complex, so cross-chain communication protocols and integrated technology integration, as well as ensuring consistent security measures across multiple chains, are urgent. In addition, to overcome these challenges, a comprehensive understanding of the technologies involved is required, and efforts should be made to create an accessible and developer-friendly environment to promote the seamless integration and effective utilization of multi-chain solutions.
The future development of Ethereum is promising, and many industries such as finance, identity, gaming, supply chain, healthcare, and food supply have already begun to benefit from the Ethereum network, but rapid growth also comes with growing pains.
For Ethereum, capacity is becoming an increasingly worrisome issue. Although the Dencun upgrade will help solve this problem by improving efficiency, at this stage, this solution looks more like a "band-aid." Therefore, in the long run, the best way forward is still to increase capacity, and multi-chain solutions such as AppChains and Rollups may be a good idea.
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