Ethereum (ETH) has its limitations, particularly when it comes to handling large volumes of transactions. To address this issue and support its increasing use cases, the Ethereum network needs innovative solutions to scale. While the upcoming Dencun upgrade on March 13 is a step in the right direction, it is only a temporary fix, and a sustainable long-term solution is necessary.
The blockchain trilemma of scalability, security, and decentralization has long been a challenge for Ethereum. However, multi-chain solutions that prioritize interoperability and security have the potential to unlock Ethereum’s full potential.
The Dencun upgrade, which aims to improve Ethereum’s scalability, is currently being implemented on testnets. Although there was a bug that caused a delay on the Goerli testnet, the deployment on Sepolia and Holesky went smoothly.
Dencun introduces the concept of proto-danksharding, which uses the “blob” format instead of calldata to reduce transaction costs. Data blobs offer significant storage efficiency improvements by temporarily compressing transaction data. They could be up to 80 to 90% more cost-effective than calldata. This format will also be used for the full sharding upgrade in the future. Overall, the Dencun upgrade will enhance storage efficiency, lower gas fees, and provide a better experience for developers, making rollups even more cost-efficient.
While the Dencun upgrade is a step in the right direction, it is not a permanent solution. The main long-term issue facing Ethereum is capacity. To address this, the focus should be on expanding the network’s capacity to support the growing number of transactions. This can be achieved through multi-chain solutions.
Multi-chain solutions like rollups and appchains are ideal for increasing Ethereum’s capacity in the long term. Appchains are specialized blockchain networks designed to serve a single application, offloading transactions from the mainnet. They can be built on top of Ethereum or layer-2 (L2) chains, significantly increasing Ethereum’s capacity.
Rollup technology, on the other hand, processes transactions off-chain and then aggregates them into a single transaction that is fed onto the mainnet. While less efficient than appchains, rollups offer flexibility and easier deployment and management.
Using both rollups and appchains can create a synergistic effect, combining transaction efficiency with flexibility and customization. This allows developers to design and deploy blockchain applications that meet user demands while maintaining efficiency and security.
Implementing multi-chain solutions on Ethereum presents developers with challenges such as managing interoperability and ensuring consistent security measures across multiple chains. Overcoming these challenges requires a deep understanding of cross-chain communication protocols and integration techniques.
Increasing Ethereum’s capacity through multi-chain solutions is crucial for its future growth. While the Dencun upgrade improves efficiency, it is only a temporary solution. By embracing appchains and rollups, Ethereum can overcome its capacity limitations and provide a scalable and versatile environment for developers.
Nebojsa Urosevic, the co-founder and senior vice president of research and development at Tenderly, emphasizes the need for multi-chain solutions to support Ethereum’s growth. He holds a bachelor’s degree in computer science and informatics from the University of Belgrade.
In conclusion, Ethereum’s limitations in handling large volumes of transactions necessitate innovative solutions for scalability. While the Dencun upgrade is a step in the right direction, a long-term solution requires embracing multi-chain solutions like appchains and rollups. These solutions can increase Ethereum’s capacity and provide a more efficient and secure environment for developers.