Cancun Upgrade: Unleashing the Next Revolution of Ethereum NFTs

Written by: William M. Peaster, Bankless

Compiled by: Yvonne, Mars Finance

Large blockchain projects in the world do not experience major evolutions every day.

That’s why all eyes are now on Ethereum, as this leading smart contract platform is set to undergo a significant upgrade and introduce an unprecedented mechanism: Blobspace.

The arrival of blobs on Ethereum will usher in the first golden age of L2 scaling solutions, which in turn will spark a revolution in how builders and users handle NFTs.

In today’s article, let’s quickly review EIP-4844 and blobspace, as well as some key points to watch for in the future.

Preparing for EIP-4844 and Blobspace NFTs

101: The Cancun-Deneb (also known as Dencun) hard fork upgrade, set to be deployed on Ethereum on March 13, 2024, signals that the Ethereum network will enter the Surge era, aimed at doubling scalability.

At the core of Dencun is the introduction of EIP-4844, which will implement a native fork known as blobspace, a groundbreaking innovation designed to help Ethereum's L2 ecosystem move towards 100,000 transactions per second (TPS).

Why it matters: Blobspace is poised to revolutionize the Ethereum ecosystem by significantly lowering gas fees. This reduction in gas fees is particularly important for Ethereum L2 solutions, as it will drastically decrease transaction costs, thereby supporting growth and increasing appeal to a broader user base.

How blobspace works: The core of blobspace introduces a new method for processing transaction data through blobs (temporary data blocks stored effectively on the blockchain).

This system differs from traditional block storage by employing a pricing mechanism independent of the Ethereum main gas market, known as "blob gas."

Blobs are created by splitting data into smaller fragments, which are then converted into unique identifiers through mathematical methods for storage and future retrieval. This process not only optimizes data storage on the blockchain but also ensures that transactions are processed more quickly and cost-effectively.

What’s next? With the implementation of the Dencun upgrade, Ethereum L2 will need to manually integrate this new technology to reap the benefits. For example, Optimism plans to launch the Ecotone upgrade immediately after the Dencun deployment, implementing blobspace within its Superchain ecosystem (including Optimism, Base, Zora Network, etc.).

While completing integration across all different L2 platforms may take several months, the overall expectation is for rapid adoption throughout the Ethereum ecosystem, thereby ushering in a new era of efficiency and scalability for the leading smart contract network.

Estimated cost savings: The Optimism community has developed the "Superchain Savings Estimator," a tool designed to estimate how much gas costs for Optimism Superchain L2 might decrease after adopting blobspace.

With this tool, examples such as swapping on Uniswap on Base or minting Zora NFTs on Zora indicate a significant drop in transaction fees— in some cases, by as much as 98%. Based on recent average transaction assumptions from Superchain, here are some clear examples:

Uniswap swap on Base:

● Previous cost: $0.5822

● Estimated cost: $0.0106

● Decrease: 98.18%

Minting Zora NFT on Zora Network:

● Previous cost: $0.3013

● Estimated cost: $0.0061

● Decrease: 97.98%

Minting Mirror NFT on Optimism:

● Previous cost: $0.2032

● Estimated cost: $0.0128

● Decrease: 93.70%

Minting Mint.fun NFT on Zora Network:

● Previous cost: $0.1476

● Estimated cost: $0.0037

● Decrease: 97.49%

Sending USDC on Base:

● Previous cost: $0.1758

● Estimated cost: $0.0037

● Decrease: 97.90%

NFT revolution: Blobspace will significantly reduce gas costs associated with NFT activities on L2, thereby transforming the NFT ecosystem. This change paves the way for projects to cover all transaction costs for their users, similar to practices around server costs in Web2 platforms.

Moreover, lower fees will foster the development of new applications and promote cross-pollination within the NFT application space, which was previously unfeasible due to cost constraints, leading to an explosion of new NFT innovations over time.

"Cheaper and faster transactions are absolutely crucial for continuing to drive innovation and unlocking new use cases, such as on-chain gaming and closed-limit order book exchanges," the Base team points out. "They will also make new ideas from the rapidly evolving fields of cryptography and artificial intelligence more practical, leading to the development of entirely new categories of applications on-chain that have yet to be conceived."

Of course, beyond cost savings, blobspace will open up a new design space for NFTs, from storage use cases to creating entirely "headless" NFT markets that exist within blobs. Therefore, new models are just around the corner!

NFT tasks: If you’re like me, you’ll be eager to try out some applications in the ecosystem once L2 begins integrating with the Dencun upgrade and see firsthand how much gas can be saved. Some activities I plan to try include:

● Collecting a BasePaint daily open edition (Base)

● Buying and selling friend.tech keys (Base)

● Collecting or publishing NFTs on Mirror (Base, Linea, OP, Zora Network)

● Creating free mint airdrops on Zora (Arbitrum, Base, Blast, OP, Zora Network)

● Minting popular NFTs on mint.fun (OP, Base, Zora Network)