1. What is Dencun Upgrade?

1. Its full name is the Cancun-Deneb Upgrade, but it is commonly referred to as the Dencun Upgrade.

2. Scheduled for mainnet implementation on March 13, 2024

   • Completed application on the Goerli testnet on January 17, 2024

   • Completed application on the Sepolia testnet on January 30, 2024

   • Completed application on the Holysky testnet on February 7, 2024

3. It is the largest-scale hard fork upgrade to be applied after the Shanghai Upgrade.

4. The upgrade applies simultaneously to the execution layer (Cancun) and the consensus layer (Deneb).

5. Key Features:

   • Scalability Improvement: Introduces proto-danksharding (EIP-4844) to fragment into blobs for enhanced scalability.

   • Security and Consensus Mechanism Enhancement: EIP-6780

   • Gas Optimization: Implements EIP-1559 (fee market change), EIP-2929 (state access gas cost increase), and EIP-2537 (BLS curve operations) to reduce gas fees and improve the user experience.

   • Laying the Foundation for Future Developments

2. EIP-4844

6. Among the major EIPs included in the Dencun Upgrade, EIP-4844 is the core of core.

7. The essence of EIP-4844 lies in the implementation of blobs to secure space on the Ethereum mainnet, enabling rollup solutions to process more transactions at lower costs and thus improving scalability.

8. So, what is a blob?

   • A new type of data stored only on the beacon chain (consensus layer).

   • The goal is to create storage space solely for data availability, separate from the block space of the execution layer.

9. The introduction of blobs leads to cost reduction for rollup sequencers submitting calldata to Ethereum → Rollup sequencers become the primary consumers of blob space.

   • By specifying the size and number of blobs that can be included per block, it prevents a surge in computation and thus avoids node centralization.

10. Why are blobs cheaper than calldata? Blobs are inaccessible to the execution layer = No access to EVM.

    • Because there is a separate space solely for blob storage, it can be stored much more cheaply than regular calldata.

11. Data within blobs is stored on the consensus layer (or beacon) for up to 18 days only.

    • The permanent storage of blob data can be managed by delegating roles to protocols that facilitate relatively easy data storage.

12. Although rollups have emerged as a scalability solution, there remains a problem that Ethereum mainnet blocks (calldata) must be submitted to verify the validity of transactions.

    • This process imposes significant costs on rollup solutions.

13. Therefore, the introduction of blobs aims to allow rollups to use blobs for storing transaction data, thus securing space on the Ethereum mainnet and enabling the processing of more transactions at lower costs.

    • Specifically, it allows rollup sequencers to broadcast "blob-carrying transactions."

14. Previously, since rollups transmitted calldata, the EVM could access this calldata to prove the validity of rollup transactions.

15. However, as mentioned earlier, the EVM cannot access blobs. So, how is validity verification conducted with the introduction of blobs?

16. This is made possible thanks to one of the new fields included in blobs, known as blob_versioned_hashes.

17. When a sequencer forwards a rollup transaction to the L1 mempool, the Ethereum proposer distributes it to the execution client and the consensus client as follows:

    • Execution Payload (Signedblobtransaction) → execution client

    • Sidecar (blob_kzg & blob) → consensus client

18. The Signedblobtransaction includes the blob_versioned_hashes, which essentially serve as a summary of the blob data.

19. Therefore, Ethereum nodes can validate the transaction's validity by cross-verifying that the blob_versioned_hashes accessible from the EVM execution layer match the blob_KZG commit values on the consensus layer.

20. Additionally, EIP-4844 plans to introduce a separate fee market for blobs, based on supply and demand for blob gas fee (data gas), independent from the existing block space fee market (gas fee market).

21. By creating a seperate market for data submission (blob submission), it is possible to significantly reduce the cost of submitting to the Ethereum mainnet, which constitutes a major portion of existing L2 costs.

22. This mechanism is very similar to EIP-1559, but it introduces a new element, max_fee_per_data_gas, set by the submitter.

23. Basic explanation of the mechanism:

    • Each blob can store approximately 125kb of data → each block can store up to 6 blobs (target is 3 blobs).

    • If a block contains more than 3 blobs, the price of blobs increases; if less, it decreases → designed to maintain a fair price around the 3-blob benchmark.

    • If rollups use too many blobs → the price of blobs increases → stabilizing the price of blobs and vice versa.

24. From the perspective of rollup users, the primary desires are

    1. low cost

    2. fast processing.

25. However, the introduction of blobs presents a dilemma in balancing these two conditions:

    • Prioritizing low cost → requires sending fully packed blobs (to reduce submission costs) → results in slower processing speeds.

    • Prioritizing fast processing → entails sending blobs that are not fully packed → leads to increased costs.

26. Therefore, when blob prices are low, the focus can shift towards fast processing, and when blob prices are high, the focus can shift towards minimizing costs, thereby finding a balance between the two.

27. The research below unfolds a methodology to find a price that achieves this balance:

    • It attempts to find the optimal frequency of blob usage by assigning a nominal dollar cost to the time it takes to process transactions and minimizing the sum of blob costs and waiting time costs.

28. The sum of the submission cost (blue line), which decreases inversely with the size of the blob, and the waiting cost (red line), which increases proportionally with the size of the blob, records its lowest point at approximately 15,000 bytes/blob.

29. The study also finds that rollups with active transaction processing can fill a full blob in less time, thus recording good performance in terms of cost.

30. Conversely, it is mentioned that small rollups, which process fewer transactions, might prefer the existing cost structure, where they only pay for the calldata they use, rather than always paying the price for a full blob.

31. According to the GitHub, the current gas price for blobs is 1 gas per byte.

32. According to Arbitrum docs, the cost of L1 data submission is 16 gas per byte.

33. Therefore, the application of blobs can reduce the cost of data submission by 1/16, resulting in a reduction of approximately 93.75%.

References

https://xangle.io

야 (EIP)4844, 너지?

본 리포트는 2부로 구성되어 있다. 전반부에서는 이더리움 샤딩의 발자취를 따라가면서 샤딩의 역사가 어떻게 변화했고 이더리움의 장기적인 비전인 댕크샤딩(Danksharding)이 무엇인지 살펴본다. 후반부에서는 프로토-댕크샤딩의 구조와 의의를 들여다보고 EIP4844 적용 이후 롤업의 경제 구조가 어떤 식으로 바뀌게 될지 그려본다.

https://medium.com

EIP 4844: What does it mean for L2 users?

As of this writing, EIP-4844 and the rest of Dencun upgrade are currently scheduled to go live on Ethereum mainnet on March 13. Dencun, the next Ethereum hard fork, is on testnet and will be coming...

https://consensys.io

Ethereum Evolved: Dencun Upgrade Part 5, EIP-4844 | Consensys

EIP-4844, also known as "proto-danksharding" will drastically reduce the cost of posting L2 rollup data to Ethereum mainnet via "blobs".

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This article provides the summary of "GIGANTIC REBIRTH: TOP CRYPTO TRADERS 2024" from ARKHAM.

Summary

1. Introduction

1. GCR is a legendary CT in the crypto, known by his alias (Gigantic-Cassocked-Rebirth) used in FTX.

2. From 2021 to 2022, this individual frequently appeared on the FTX leaderboard.

3. Gained fame during the bear market of 2022 by successfully shorting altcoins.

4. Notably, in April, he made headlines for placing a $20 million short bet on Luna.

2. Background and History

5. Began with a seed capital of $1,000.

6. Solely increased his seed through trading, primarily using political forecasting.

7. Invested up to 120 hours per week on Twitter, working even harder during bear markets.

8. Amassed a significant followers in 2021 and 2022, then went silent at the beginning of 2023.

3. Early 2021 - The Bull Market

9. GCR enjoyed taking positions contrary to market consensus from the start, embodying the principle of "sell greed and buy fear."

10. Continuously emphasized the virtues of 'patience' and 'expertise in a single sector.'

11. Warned of a coming bear market in April and May 2021, cautioning against a retail-led bull market.

4. Late 2021

12. Persistently warned of a bear market arriving in 2022.

13. Showed interest in NFTs in August, due to their lower market cap compared to meme coins, and purchased hundreds of Pudgy Penguins.

14. Founded RebirthDAO, a decentralized hedge fund.

5. The Big Short of 2022

15. Two weeks after BTC hit its all-time high of $69k in October 2021, GCR left a note about "back and shorting" and took a vacation on November 22nd.

16. He then focused on identifying oversold altcoins.

17. Targeted coins with the highest planned inflation and gathered information on token unlocks.

18. Concentrated on shorting the 'weakest' altcoins rather than BTC or ETH, especially those with a majority of their supply being unlocked in the first three to six months of 2022.

19. Many of these targeted coins were part of the Solana ecosystem, supported by FTX funding, and had a high proportion of investor volume locked in low liquidity tokens.

20. The most profitable position was shorting Luna, netting a profit of $230 million.

21. Also predicted an increase in DeFi hacks during the 2022 bear market, advising to "bet on incentives during bear markets."

22. However, GCR did not anticipate the FTX bankruptcy.

6. 2023 and Beyond

23. After the bankruptcy of FTX, the @GiganticRebirth account was deleted, and he resumed activity under @GCRClassic.

24. In early 2023, he predicted a bull market originating from China.

25. Advocated for engaging on WeChat.

26. From 2021 to the 2024 presidential election, placed bets on Donald Trump.

27. Purchased over 300 Milady tokens from January to March 2023, selling half of them in June following a mention by Elon Musk.

28. Successfully arbitrage traded $4 million of USDT for USDC during the USDC depegging event.

29. Ceased Twitter activity on April 20, 2023, after a final post stating "ETH 10k."

IMO

30. Lessons learned from him

    1. Establish strong convictions and demonstrate unwavering strength and patience.

    2. Possess the judgment to not merely follow market trends but to anticipate the future.

    3. Have the decisiveness to act on knowledge, like the USDT to USDC swap, which, while widely known, few dared to execute.

31. But,

    1. To multiply wealth like GCR, one must almost exclusively sleep and consume Twitter, dedicating over 17 hours a day.

    2. Must always bear the risk associated with futures trading.

32. TLDR; Do not be swayed by the market; instead, conduct daily research, develop a thesis, and invest accordingly.

34. We are currently passing the early stages of a bull market, where the narrative cycle changes exceptionally quickly, transitioning from:

    

    Bitcoin Ecosystem -> Solana -> Airdrop boom -> Inscription -> Modular & DA -> Alt L1s -> DePin/DeSoc -> Ethereum Ecosystem(LRT, L2) -> Again Bitcoin Ecosystem -> AI

    • Also there were some small narratives that came along with the mainstream above, such as RWA, Gaming, Japan, China, Identity, etc.

35. Without a personal thesis, chasing sectors simply follwing their prices could likely make one a victim of the capital shifts occurring during these narrative cycles.

36. So, what's the strategy? I recommend 'Maintain one stable main position with low volatility (holding stables/ETH for airdrops, depositing Bitcoin or Ethereum) + two sub-investments in high liquidity areas':

    • For sub-investments, look for those just beginning to be mentioned on X and less talked about on Telegram.

    • Focus on sectors that haven't yet caught the narrative wave or those where the narrative has significantly aged.

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This article is aiming for providing basic information about Farcaster and its ecosystem for those who recently started to navigate it.

0. What is Farcaster?

1. A sufficiently decentralized social graph protocol created by Dan Romero and Varun Srinivasan, both of whom are veterans from Coinbase.

2. The term "sufficiently decentralized" implies that anyone can read and write data and build apps on it.

3. Vitalik has been shilling Farcaster for a long time, with the protocol also being highlighted in Messari's 2024 research and Variant Name Service research.

4. Farcaster is responsible for storing items such as a user's handle, casts (Farcaster's version of tweets), and reactions (like likes and recasts).

5. Users are free to create clients such as Warpcast on top of the Farcaster protocol.

6. A client serves as an interface for accessing the protocol, similar to how Twitter is to the protocol, and Tweetdeck is to the client, with the current state of Twitter integrating both the protocol and the client.

7. The Farcaster architecture can be divided into on-chain and off-chain components.

8. On-chain: Optimism contracts that perform the following three tasks:

a. User ID registration

b. Storage registration

c. Key registration

9. Off-chain: A peer-to-peer network of hubs that store user data and are interconnected.

10. To reduce costs and improve performance, Farcaster stores most user activity data, such as casts, follows, likes, and profile updates, off-chain, minimizing on-chain operations.

11. As mentioned earlier, Farcaster is a sufficiently decentralized network that allows anyone to read and write data, facilitated by the operation of hubs.

12. Anyone can become a Farcaster hub by running computer software.

13. Hubs download on-chain Farcaster data from Optimism and off-chain data from other hubs.

14. Each hub stores a copy of all Farcaster data accessible through APIs, similar to how blockchain nodes synchronize with each other.

15. Using a hub enables reading and writing data on Farcaster, and anyone looking to build a Farcaster app must interact with a hub.

1. What is Warpcast?

16. Warpcast is nominally Farcaster's wallet and the most renowned Farcaster client.

17. It can be simply viewed as Twitter utilizing Farcaster as its protocol.

18. Beyond Warpcast, various clients leveraging Farcaster's data can certainly be developed.

19. For related information, check the A16Z curated Farcaster clients or the Farcaster applications homepage.

a. Among these, FarQuest is actively accumulating points, known as Farpoint.

20. While Warpcast has introduced Farcaster to the world, the driving force behind Farcaster's rapid growth is Frame.

2. What is Frame?

21. Frame is a new feature of Farcaster, built as an extended version of the Open Graph Protocol developed by Facebook, which is a content standard.

22. It can be understood as a portal within Warpcast that allows users to use apps they've created.

23. In essence, using Frame within Warpcast means seamlessly using App A from within App B.

24. Since its launch on January 27th, Farcaster's DAU has surged, surpassing 40k.

25. The reason Farcaster has been able to attract so many users through Frame is due to its ability to

    1. utilize user data stored on the blockchain, allowing

    2. anyone to freely create the applications they desire, which can

    3. operate seamlessly within Warpcast without data leakage.

26. Unlike Web2 SNS where embedding links, photos, and polls is possible, the differences with Frame include:

    a. Anyone can utilize user data to set conditions for executing frames.

    b. Applications can operate internally.

    c. Various derivative activities are possible through a logged-in wallet.

27. For instance, current examples of Frame's unique capabilities include:

    a. NFT pre-minting can be conditioned on specific comments, recasts, likes, etc., and verified for issuance.

    b. Playing text-based games or viewing articles in card news format is possible.

    c. Ordering cookies with payment through Coinbase Pay or receiving token airdrops is feasible.

28. These interactions all occur through the simple action of pressing a button. The interaction process involves:

    -> Pressing a button sends a POST request with a signed payload to a URL within Frame, which then interacts with other Frames.

    -> The signed payload contains a cryptographic hash that can identify which button was pressed and the submitting user, enabling the distinction between bots and real users.

    -> This process internalizes the inconvenient CAPTCHA mechanism.

29. The NFT minting process includes:

    -> Developers create an NFT contract and pre-fund it to cover minting costs.

    -> When a user clicks the mint button within a Frame, the server finds the user's connected address and issues the NFT from the developer's wallet to the user's address.

    -> Incorporating a payment process in this step is also straightforward.

30. Interaction between Frames is certainly possible.

31. Another advantage of Frame is that developers can create a variety of applications without worrying about UI/UX, thus building a virtuous cycle of network effects.

32. The process of building network effects involves:

    1. Farcaster gains popularity based on Frames.

    2. Users flock to the platform.

    3. Since developers can advertise and demo for free on a platform with 35k DAU just by uploading their app to a Frame, there's a strong motivation for Frame developers to create applications.

    4. As more apps are created, more users gather, establishing a virtuous cycle of network effects.

33. McCormik describes this as "Small Apps, Growing Protocols."

34. Base, particularly, is the network where transactions through Frame occur most frequently (40%).

35. By declaring the cost of creating Frames on Base free through the Pimlico policy, Base has shown a very proactive stance.

36. Although Frame is still in its early stages, with most applications appearing simple and not very intuitive, considering that it has been only a week since their creation, the initial hype is deemed very high.

37. Should it successfully navigate through this transition period and establish a diverse Frame-based ecosystem, users could engage in numerous on-chain activities within Farcaster itself, eliminating the need to leave the platform and naturally increasing retention.

38. In addition to the mentioned Frames, the token $DEGEN also plays a role in energizing Farcaster.

3. What is $DEGEN?

39. $DEGEN, a meme token launched on Base as an ERC-20 token in January of this year.

40. It has 70% of its allocation dedicated to the community, with a planned inflation of 1% per year starting four years after its launch.

41. Currently, it is in the midst of its second of three planned airdrops.

    

42. Farcaster users are utilizing $DEGEN as tips to express gratitude or to execute specific Frames.

43. Each user is given an allocation of tips they can provide, with those receiving more reactions (likes, recasts, etc.) per cast being allocated more tips (independently of the DEGEN they hold in their wallet).

44. Providing tips is straightforward: writing "XXX $DEGEN" in a comment on a cast transfers the amount directly to the user's wallet address without additional steps.

45. Moreover, various experiments are being conducted, such as limiting the number of NFTs that can be minted based on the amount of DEGEN held.

46. Although DEGEN's position has not been explicitly defined, it is naturally becoming the representative coin of Farcaster.

47. However, the utility of tips has clear limitations, prompting speculation about future Frame-based uses of DEGEN.

48. For example, content that only users holding a certain amount of DEGEN can access, similar to OnlyFans, or the creation of games and roulettes using DEGEN.

4. IMO

49. The concept of apps within an app, facilitated by Frame, significantly expands the potential of Farcaster.

50. The platform has the potential to attract many users tired of the simplistic content production on Twitter.

51. The seamless on-chain expansion from hot topics in Warpcast to Base demonstrates the platform's flexible growth.

52. With solid backers and founders, along with consistent hype from Vitalik, the project clearly stands out as one deserving attention.

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