TL;DR
EIP-4844, also known as proto-danksharding, is a proposed upgrade to the Ethereum protocol meant to reduce fees and increase transaction throughput. It intends to achieve these objectives by introducing a new transaction type that accepts “blobs” of data.
A simple way to understand EIP-4844’s function is the following alliterative phrase: “EIP-4844 bolts blobs onto blocks”. It is a transitional upgrade that will ultimately lead to full danksharding in the future, thereby enabling Ethereum to manage the capacity for a global transaction network.
Introduction
For years, Ethereum developers have been seeking solutions to cater to a growing user base. Through what’s known as The Ethereum Upgrades, major improvements like The Merge and rollups have been proposed. These changes have helped Ethereum increase transaction throughput and lower transaction costs.
However, fees remain too expensive for many and throughput is not where it needs to be, which slows down the pace of mass adoption. To address this issue, Ethereum has made data sharding its long-term solution.
Since deploying data sharding is a long and complex process, EIP-4844 is being proposed as a transitional solution. As such, it will prepare Ethereum for full danksharding that will reach a throughput of around 100,000 transactions per second (TPS) without compromising decentralization or security.
What Is EIP-4844?
EIP stands for Ethereum Improvement Proposal, a protocol that allows developers to propose new features and solutions to the Ethereum protocol. Proto-danksharding is named after two Ethereum researchers, Proto Lambda and Dankrad Feist.
To understand EIP-4844, it’s necessary to first understand what sharding is. Simply put, it’s a way of partitioning databases into smaller ones that manage specific data segments, thereby improving the efficiency and performance of these databases.
When applied to blockchain — and Ethereum in particular — sharding takes on some unique features. Ethereum plans to implement a type of sharding, called danksharding, that will help lower transaction costs and increase throughput. Labeled the “scalability killer”, danksharding is expected to increase Ethereum’s TPS to around 100,000.
In comparison, the Ethereum base layer processes around 15 TPS and its layer 2 rollups process around 100 TPS as of Q1 2023. While these numbers are rough estimates, the effect of danksharding is clear: it will allow Ethereum to increase scaling by an order of magnitude.
Some of the main differences between danksharding and previous Ethereum and non-Ethereum sharding proposals is that danksharding will attempt to provide more space for blobs of data, rather than for transactions (more on this later).
Another innovation of danksharding is the so-called merged fee market, where only one proposer chooses transactions for all shards, instead of each shard having its own proposer.
To make this merged fee market work and to alleviate the issue of maximal extractable value (MEV), a method called proposer/builder separation will also be implemented. A proposer is a validator of the Ethereum protocol (called a miner before the Ethereum Merge) that chooses which transactions to include in the next block.
EIP-4844 (proto-danksharding) is the step that will come before full danksharding and will increase TPS to approximately 1,000. Most importantly, EIP-4844 will introduce a new transaction type that accepts “blobs” of data — an important element of making full danksharding possible. EIP-4844 is expected to be implemented in the second half of 2023, though there may be delays.
How Does EIP-4844 Work?
At its core, EIP-4844 will introduce a new transaction type called blob-carrying transactions, which are like regular transactions but with added pieces of information known as binary large objects or “blobs”.
Ethereum contributor Ben Edgington summarizes EIP-4844 with the memorable alliterative phrase, “EIP-4844 bolts blobs onto blocks”. It succinctly describes how blob-carrying transactions entail “blobs” attached to blocks, which increases the amount of data blob-carrying blocks can handle.
This may be confusing as it seems akin to increasing block sizes — a contradiction of Ethereum’s stance against arbitrarily large blocks that would require greater computing power and could thus lead to centralization.
However, there are some critical differences between blockspace and blobspace.
Blobs: bounded storage costs and no execution costs, but every node bears a bandwidth cost. Source: Ben Edgington
Blobs are large in size but unlike blocks that are stored forever and visible to the Ethereum Virtual Machine (EVM), blobs are only available for a short period of time and are not visible to the EVM. Additionally, blobs reside on the Ethereum consensus layer instead of on the computation-heavy execution layer. Most importantly, blobspace is much cheaper than blockspace.
Aside from introducing blob-carrying transactions, EIP-4844 will also implement execution-layer logic, verification rules, multi-dimensional fee markets, and other system changes required for full danksharding in the future.
One thing to note is that even though EIP-4844 will implement most of the logic of full danksharding, it won’t implement any actual sharding. Nevertheless, apart from getting Ethereum one step closer to achieving the cost and throughput levels needed for mass adoption, EIP-4844 can still offer some scaling and cost-saving benefits.
How Will EIP-4844 Benefit Users?
EIP-4844 is a protocol upgrade that’s part of Ethereum’s rollup-centric roadmap. Preparation for the implementation of EIP-4844 is moving rapidly, with some devnets having already been run and the specs for the upgrade almost finalized.
Users will see noticeable improvements after EIP-4844’s implementation, mainly in the form of faster transactions and lower fees. The successful implementation of EIP-4844 will also make Ethereum more competitive in the cryptocurrency space.
Some users may wonder what they should do if they want to access old blob data that has been deleted. As explained earlier, blobs reside on the Ethereum consensus layer, whose purpose is to provide a highly secure real-time bulletin board for other protocols’ longer-term storage. So, even though blobs are deleted after weeks, their data should still be available in longer-term storage elsewhere.
Closing Thoughts
EIP-4844 is a highly complicated Ethereum protocol upgrade that’s part of a larger roadmap and that’s connected to other system upgrades, such as proposer/builder separation (PBS) and EIP-1559 blob fee adjustment.
While an understanding of EIP-4844 will better prepare average users for the coming changes, one should note that most of that change will come in the form of lower costs and faster transactions.
The Ethereum protocol is constantly evolving and improving. EIP-4844 is one of the critical near-future upgrades meant to enhance the network’s capabilities. Successful implementation of EIP-4844 will make Ethereum highly competitive as a global transaction network.
Further Reading
Disclaimer and Risk Warning: This content is presented to you on an “as is” basis for general information and educational purposes only, without representation or warranty of any kind. It should not be construed as financial advice, nor is it intended to recommend the purchase of any specific product or service. Please read our full disclaimer here for further details. Digital asset prices can be volatile. The value of your investment may go down or up and you may not get back the amount invested. You are solely responsible for your investment decisions and Binance Academy is not liable for any losses you may incur. Not financial advice. For more information, see our Terms of Use and Risk Warning.