Ethereum Dencun Upgrade Rolled Out on Schedule but Failed Finality

The highly anticipated Dencun upgrade to the Ethereum blockchain went live on the Goerli testnet in the early hours of Wednesday, encountering unexpected issues with finality within the expected timeframe. According to live blockchain information, the upgrade rolled out around 6:32 UTC but didn’t initially finalize on the testnet.

Ethereum had unveiled plans to test the Dencun upgrade on January 17 through a note on the official GitHub repository. The same note also pegged January 31 and February 7 as the dates to apply the upgrade to the Sepolia and Holesky testnets.

However, the blockchain developer is yet to communicate a date to roll out the upgrade on the mainnet, which will be within the first quarter of 2024. It’s worth noting that the Dencun upgrade is final for the Goerli testnet, as Ethereum will stop supporting the testnet after the upgrade.

About the Dencun Upgrade

The ‘Cancun-Deneb’ upgrade, or Dencun upgrade for short, is a critical upgrade to the Ethereum blockchain, promising better scalability, reduced gas fees, and enhanced Layer 2 solutions, among other fixes and improvements.

The Fencing upgrade introduces Proto-Danksharding, a transaction mechanism that aims to lower gas fees by increasing blockchain space and incorporating data ‘blobs’. Ethereum has detailed documentation for the upgrade on its GitHub page for developers and blockchain analysts curious to see what has changed.

As is usually the case with Ethereum upgrades, the Dencun debut on the Goerli testnet is the first step in its rollout. Over the next few weeks, we can expect the same upgrade on the Sepolia and Hokesky testnets before finally seeing it go live on the Ethereum mainnet.

Why the Upgrade Failed Finality

Shortly after the scheduled upgrade rolled out to the Goerli testnet, observers noted a few problems with the implementation, chiefly its failure to finalize within the expected timeframe.

Blockchain developers pointed towards the reluctance of network validators to update their software as being responsible for the finality failure, demonstrating zero inherent problems with the Ethereum blockchain or the Dencun upgrade.

“The participation is low (~80%). Losing finality requires approximately 10% of validators to be offline,” blockchain developer terence.eth partly said in a tweet.

Other developers, including Tim Beiko, a non-executive employee at The Ethereum Foundation, corroborated His sentiments.

It’s worth noting that issues arising on a testnet during an upgrade are not out of the ordinary. Testnets exist because of these and others in the first place. Ethereum has testnets for a reason; if an upgrade has a problem like with Dencun, the development team will likely catch it before it rolls out to the mainnet.

What is Blockchain Finality?

Block finality is the final stage in a blockchain transaction that is deemed completed and irreversible, hence the name. After finality, the transaction is added to a block in the network and becomes immutable. Finality exists in Proof of Work (PoW) and Proof of Stake (PoS) blockchains. They work slightly differently.

Proof of Stake blockchains like Ethereum achieve finality when a portion of validators (usually two-thirds) approve the transaction. In simple terms, the Dencun upgrade did not achieve finality initially because most validators were offline. Since the active validators could not form the required quorum, the two-thirds approval requirement didn’t work, and finality failed.

Finality Issue Fixed; Dencun Ready for Sepolia Rollout

Hours after encountering problems finalizing the Dencun upgrade, the X handle of the Ethereum Foundation, retweeted a tweet from Ethereum DevOps Engineer Parithosh Jayanthi announcing the fork’s eventual finality.

“After the fix was patched in, the validators came back online, and the chain started finalizing again,” confirming earlier speculations that the finality issue was indeed from offline network validators.

With everything now appearing to work as expected, we expect the Dencun update on the Sepolia testnet scheduled in the build-up toward the final rollout on the Ethereum blockchain.

The Dencun upgrade is the largest since the Shapella hard fork of March 2023, bringing improvements in almost every area of the blockchain, including security, speed, and lower transaction costs. It is uncertain if the upgrade will affect things when it finally rolls out.