One of the biggest barriers to mass adoption of Ethereum is the high gas fees users must pay to transact or interact. When on-chain activity increases, gas fees will also increase significantly, pushing up the user threshold.
In order to improve Ethereum L1+L2 performance and solve the gas fee problem, the Ethereum Foundation proposed to use EIP-4844 to reduce gas fees and increase throughput as a mid-term transitional solution. This article will introduce EIP-4844 in detail and why it is crucial to the implementation of the Ethereum roadmap.
EIP-4844 Introduction
Ethereum EIP-4844 is the core of the Cancun upgrade, which introduces a new transaction type (blob-carrying transactions) to reduce Ethereum transaction fees. Blob-carrying transactions are the same as regular Ethereum transactions, but with some additional data, called blobs. Compared to the current calldata storage transaction data immutable and in-memory read-only, blobs are much larger and cheaper to store.
From the difference between blockspace and blobspace in the figure above, blobs are different from blocks visible to the Ethereum Virtual Machine (EVM). Blobs are only available for a short time and are not visible to the EVM. In addition, blobs are located on the Ethereum consensus layer, not on the execution layer that focuses on calculations. Most importantly, blobspace is much cheaper than blockspace.
EIP-4844, also known as Proto-Danksharding, will implement the same Danksharding framework and logic with new transaction formats and verification rules.
EIP-4844 Development Timeline
Over the past 3 years, Ethereum has undergone a series of upgrades to move from PoW to PoS consensus and make its blockchain more scalable.
Here is a timeline and overview of important Ethereum updates:
On December 1, 2020, the PoS-powered beacon chain went live, and Ethereum users can stake their ETH on a separate beacon chain to verify transactions.
In September 2022, the Beacon Chain merged with the Ethereum mainnet, combining the network's execution and consensus layers.
On April 13, 2023, the Shanghai upgrade (EIP-4895) was launched, opening the ETH staking withdrawal function for Ethereum validators.
These upgrades are necessary for Ethereum to become more scalable, but they do not directly improve the blockchain’s transaction speeds or gas prices. Future upgrades like sharding and Danksharding will make Ethereum truly scalable in practice.
What is Sharding?
Sharding refers to dividing a blockchain network into smaller units called "shard chains". Each shard chain can process transactions in parallel to maximize transaction throughput, reduce network congestion, and lower gas fees. In other words, sharding is a way to divide a database into smaller databases that manage specific segments of data, thereby improving the efficiency and performance of these databases.
Due to the high difficulty of sharding technology, Ethereum decided to adopt an intermediate solution, that is, to implement Proto-Danksharding first, and then eventually turn to the easier-to-implement Danksharding.
What is Danksharding?
Danksharding is a new sharding architecture that relies on large volumes of data called blobs to scale the Ethereum blockchain. The rollup-centric second-layer protocol uses the additional blob data space to ease network congestion, thereby reducing transaction fees.
Currently, the TPS of Ethereum's base layer is about 15, and the TPS of its second-layer rollup is about 100. According to rough estimates, Danksharding is expected to increase the TPS of Ethereum (considering L1+L2 as a whole) to 100,000.
Another innovation of Danksharding is a merged fee market, where there is only one proposer that selects transactions for all shards, rather than each shard having its own proposer. In order for this merged fee market to work smoothly, and to mitigate the problem of Maximum Extractable Value (MEV), a method called proposer-builder separation will also be implemented (proposers are the Ethereum protocol validators who choose which transactions to include in the next block).
However, implementing full Danksharding on Ethereum will not happen overnight, but will require several upgrades to be implemented gradually, such as EIP-4844 (Proto-Danksharding).
What is Proto-Danksharding?
Proto-Danksharding, named after two Ethereum researchers, Proto Lambda and Dankrad Feist, will increase Ethereum TPS to about 1,000, and is simpler, a required step before full Danksharding can be achieved. Most importantly, it will introduce a new transaction type that accepts blob data, which is an essential component of making full Danksharding possible.
Vitalik Buterin believes that Proto-Danksharding implements most of the logic and framework of Danksharding, but still does not implement any actual sharding. In other words, Proto-Danksharding is a prototype of Danksharding, which provides the framework to implement other sharding upgrades later.
How does EIP-4844 reduce gas fees?
The main purpose of EIP-4844 (Proto-Danksharding) is to reduce Ethereum gas fees by using blobs to carry transactions. Blob data is cheaper and the Ethereum Virtual Machine (EVM) cannot access it, it can only view commitments to blobs. In addition, the data bandwidth in Proto-Danksharding is fixed to 1 MB per slot.
Since simply making CallData cheaper could result in a mismatch between the average case and the worst case, Ethereum developers have attempted to reduce gas fees by building a new type of blob-carrying transaction that focuses on transactions coming from L2 Rollup.
The average Ethereum block size is about 90 KB, but theoretically the maximum block size is about 1.8 MB. This means that Ethereum blocks can accommodate more transactions during periods of high network activity, but at a very high gas fee. If calldata is 10 times cheaper, the number of transactions will increase 10 times, and in extreme cases the block size will increase 10 times (18 MB). Obviously, Ethereum cannot accommodate such huge blocks in its network.
solution
ProtoDanksharding solves the gas pricing crisis through a multi-dimensional EIP-1559 fee market.
Before ProtoDanksharding was proposed, EIP-4488 attempted to solve the problem of high gas fees.
EIP-4488 has two rules: the gas fee for calldata is reduced from 16 gas units per byte to 3 gas units; the 1 MB limit per block is added to 300 bytes per transaction, which can reach a maximum of about 1.4 MB.
The block size cap is the simplest way to ensure that a spike in average block load does not cause a spike in extreme case load. In addition, the worst case block size (1.4 MB) is always lower than the current maximum block size (1.8 MB).
Since EIP-4488 has already proposed a solution for the gas problem, why did the Ethereum community finally choose EIP-4844 to reduce gas fees? Because although EIP-4488 minimizes the current changes (maintaining stability), more changes will be needed in the future. In contrast, Proto-Danksharding aims to make more framework changes to help the Ethereum network upgrade to danksharding in the future.
Proto-Danksharding creates a separate transaction type that stores data from L2 Rollup in large blobs, and the number of blobs that exist per block is capped, which greatly reduces L2 fees. The blobs are stored on the consensus layer, not the execution layer, and are therefore not accessible to the Ethereum Virtual Machine (EVM).
Sharding will still be a complex task even after Proto-Danksharding, but the complexity will be limited to the consensus layer. Therefore, execution layer client teams and rollup developers do not need to do any additional work to transition from Proto-Danksharding to full sharding.
EIP-4844 also separates blob data from calldata, making it easier to store blob data for shorter time periods.
Data storage options for EIP-4844
Proto-Danksharding with approximately 1 MB per slot (12 seconds) will generate 2.5 TB of data per year. The consensus layer can address the data storage challenge through history retention periods (EIP-4444) and implement logic to automatically delete blob data after a period of time.
Regarding how to access old blob data, there are multiple ways to store historical data on decentralized protocols. For example, protocols for specific applications such as rollups, Bittorrent, Ethereum portals, block explorers, API providers, and third-party index protocols (The Graph) can all store complete history.
What upgrades are there before and after EIP-4844?
Ethereum developers proposed several upgrades before EIP-4844 to reduce gas fees. For example, EIP-3651 reduced gas fees for block builders interacting with Ethereum block building software Coinbase, EIP-3855 reduced gas fees for developers through Push 0, and EIP-3860 reduced gas fees for specific use cases.
EIP-4844 is a step towards full sharding, which will scale the Ethereum network and reduce gas fees. Developers are planning to follow up EIP-4844 with “Verge,” which will introduce Verkle trees for scalability.
Impact of EIP-4844
The main goal of EIP-4844 is to reduce Ethereum’s L2 gas fees by 10–100 times by using a new type of blob-carrying transactions, making the transition to full sharding easier since all future upgrades will be done only on the consensus layer.
At the architectural level, EIP-4844 introduced blob-carrying transactions. This is the first time that Ethereum has built a separate data layer for L2, laying the foundation for subsequent full Danksharding.
At the economic model level, EIP-4844 will introduce a new fee market for blobs, which will also be the first step for Ethereum to move towards a multi-dimensional market.
In terms of user experience, the most intuitive perception of users is the significant reduction in L2 fees. This important improvement at the underlying layer will provide an important foundation for the explosion of L2 and its application layer.
summary
EIP-4844 is a major upgrade that makes the Ethereum network more scalable while requiring fewer updates for future full sharding. Proto-Danksharding increases the space for blob data groups, which will allow for more data processing, thereby reducing network congestion and lowering gas fees.
As a highly complex protocol upgrade, EIP-4844 is an important part of the Ethereum roadmap. It is also related to other system upgrades such as the separation of proposers and builders and EIP-1559 blob fee adjustment.
In addition to introducing blob-carrying transactions, EIP-4844 will also implement execution layer logic, validation rules, a multi-dimensional gas fee market, and other system changes required for full sharding in the future.
It is worth noting that while EIP-4844 will implement most of the complete Danksharding logic, it will not implement any actual sharding. In addition to bringing Ethereum closer to the cost and throughput levels required to achieve mass adoption, EIP-4844 can also improve scalability and cost savings.
Although EIP-4844 does not have an exact release date yet, it is expected to be implemented later this year. After EIP-4844 is implemented, users will see obvious improvements in Ethereum, especially L2, mainly faster transactions and lower fee experience. The successful implementation of EIP-4844 will also make Ethereum more competitive in the cryptocurrency field.