Ethereum developers have new update as Merge clocks one
- The Dencun upgrade had new additions, including a validator reward scheme.
- Arbitrum, Optimism, and liquid staking protocols may have a role in the next upgrade.
Ethereum [ETH] developers have begun work on the next phase of the blockchain’s roadmap. In a new communiqué provided by Tim Beiko, lead developer at the protocol, the Dencun upgrade was the next major development for Ethereum.
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It was even more interesting that Beiko provided updates on the Dencun phase on the eve of the Ethereum Merge anniversary. Recall that on 15 September 2022, Ethereum transtioned from the Proof-of-Work (PoW) to the Proof-of-Stake (PoS) consensus mechanism.
Although this switch provided the foundation for other upgrades like the Shanghai/Capella upgrade, it has not been without any hitch.
Preparing for Dencun
For context, the Dencun upgrade, also known as Cancun-Deneb, comprises a series of improvements, including upgrades to Ethereum’s execution layer and the consensus layer. According to Beiko, there have been new updates to the proposed upgrade.
@NethermindEth shared that their blob transaction pool is now ready, and after a few days of testing it on a single node, they've deployed it on all Dencun testing nodes. Geth's blob txn pool is also nearly done.
— timbeiko.eth ☀️ (@TimBeiko) September 14, 2023
Beiko’s post on X (formerly Twitter), covered a lot of discussions the developers had. As the above post noted, Dencun nodes had already been deployed. He, however, noted, that there has been a development with the EIP-7514, which focuses on staking and validator rewards.
Primarily, the EIP-7514 aims to decelerate the growth rate of ETH staking, thereby providing the Ethereum community additional time to craft an improved validator reward scheme. Sharing more on the proposal, Beiko mentioned that,
“This would slow down the rate at which the % of ETH stake grows in the worst case.”
Another developer, Dankard Feist, noted that he was in support of EIP-7514 because liquid staking protocols like Lido Finance [LDO] would continue to grow.
My reasoning on why I'm for EIP-7514. It is currently unclear if (especially liquid) staking will keep growing indefinitely. In the case that the withdrawal queue does not empty over the next few months, the lower churn limit will give the Ethereum community the time needed to…
— Dankrad Feist (@dankrad) September 14, 2023
Following the disclosure by the developer, Santiment showed that Ethereum’s development activity skyrocketed. The development activity measures the public GitHub repositories committed to a blockchain.
Therefore, the increase means that there were a lot of developers committing codes to the Ethereum network. Also, there has been a considerable increase in ETH deposits on the Beacon Chain. This means that validator activity on the network was still very present.
L2s have a role to play
Meanwhile, Beiko also mentioned that the last discussion brought up the introduction of Arbitrum [ARB] and Optimism [OP]. As relatively new L2 networks, the due have not been exactly involved in Ethereum upgrades.
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But this time, Beiko noted that the developers had Arbitrum in mind to help out with L1 costs and base fees. For Optimism, protolambda, a pseudonymous developer from OP Labs, said that it would be a nice feature to have Optimism work on the blob base fee.
In conclusion, Beiko highlighted that all the necessary audits were not complete. He, however, noted that there were plans in place to optimize gas usage.