Ethereum (ETH) has faced limitations due to its inability to handle large volumes of transactions. As its use cases expand and its importance to various sectors grows, it is crucial to implement innovative solutions to scale the network. Although 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 challenge of finding a balance between scalability, security, and decentralization has long been a concern known as the blockchain trilemma. However, multi-chain solutions offer the potential to help Ethereum reach its full potential by focusing on interoperability and security.
The Dencun upgrade, which aims to enhance Ethereum’s scalability, is currently being implemented across testnets. Despite a bug causing a delay on the Goerli testnet, the deployment on Sepolia and Holesky went smoothly.
Dencun introduces the concept of proto-danksharding, which reduces transaction costs by using the “blob” format instead of calldata. Data blobs improve storage efficiency by temporarily compressing transaction data. They have the potential to be significantly more cost-effective than calldata, potentially reducing costs by 80 to 90%. The same format will be used for the full sharding upgrade in the future. Overall, the Dencun upgrade will improve 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 focus should be on expanding the network’s capacity to support the growing number of transactions through multi-chain solutions.
Multi-chain solutions, such as 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 chains, significantly increasing Ethereum’s capacity.
Rollup technology processes transactions off-chain and then aggregates them into a single transaction fed onto the mainnet. While less efficient than appchains, rollups offer flexibility and ease of deployment and management.
Using rollups and appchains together can achieve a synergistic effect, combining transaction efficiency with customization. Developers can expand beyond layer-1 networks into a more scalable and versatile environment, meeting user demands while maintaining efficiency and security.
Implementing multi-chain solutions on Ethereum presents challenges, including managing interoperability and ensuring consistent security measures across multiple chains. Overcoming these challenges requires a comprehensive understanding of technical intricacies and a commitment to fostering an accessible and developer-friendly environment.
The future of Ethereum is promising, with various industries benefiting from its network. However, capacity is becoming a growing concern. While the Dencun upgrade improves efficiency, increasing capacity through multi-chain solutions like appchains and rollups is the best long-term approach.
Nebojsa Urosevic, co-founder and senior vice president of research and development at Tenderly, emphasizes the importance of expanding capacity. He holds a bachelor’s degree in computer science and informatics from the University of Belgrade.
This article provides general information and should not be taken as legal or investment advice. The views expressed here are the author’s alone and do not necessarily reflect the views of Cointelegraph.