Impact Of EIP-4844 On Ethereum: What You Need To Know

Key Highlights

• Big Goal: EIP-4844 aims to reduce costs for blockchain rollups by introducing blob transactions, making it cheaper to settle transactions on Layer 1 (L1) Ethereum.
• Qualitative Difference: Blob transactions are different from previous transaction types (“legacy,” “access list,” “normal”) and introduce a new data structure that gets deleted after 20-90 days, leaving only the transaction on-chain.
• Temporary Data Storage: Blobs are temporarily stored and then deleted, reducing long-term storage needs and managing blockchain bloat.
• Dencun Upgrade: On March 13, 2024, blob transactions were included in the Ethereum Dencun upgrade, a significant step for Ethereum’s scalability.
• In Simple Words: Think of a blob transaction like a detachable trailer on a truck. The truck (transaction) delivers the goods (blob), and after the delivery, the trailer disappears, leaving only the truck.

Introduction

EIP-4844, or Proto-Danksharding, is a pivotal proposal to enhance Ethereum’s scalability and data availability. It introduces a new transaction type called “blob transactions,” which are designed to significantly reduce gas fees and improve network efficiency. By incorporating these blobs into Ethereum’s infrastructure, EIP-4844 sets the stage for a more scalable and cost-effective ecosystem, ultimately making Ethereum L1 more accessible and competitive.

Ethereum’s Scalability Challenges

Despite its popularity and widespread adoption, Ethereum has long struggled with scalability issues. The network’s limited transaction throughput and high gas fees have been persistent bottlenecks. To solve the scalability trilemma, the Ethereum developer community has opted for L2 rollups.

L2 rollups— like Optimism and Arbitrum—execute transactions on their chains, bundle them, and settle them back on Ethereum Mainnet. This method reduces costs while retaining Ethereum’s security properties. EIP-4844 (Proto-Danksharding) makes the rollup implementation even better.

What Is EIP-4844 (Proto-Danksharding)

Proto-Danksharding, as proposed in EIP-4844, aims to create a more scalable Ethereum network. The key objectives of Proto-Danksharding are to reduce transaction costs and improve data availability without the full implementation of sharding. 

EIP-4844 Removes One-Time Data

Thanks to compression, transactions on L2 blockchains are already cheaper. However, L2 rollups must send batches back to Ethereum for verification, where they are stored forever, even though the data is no longer needed. EIP-4844 addresses this by enabling Ethereum to delete data after validation, ultimately making L2 networks even cheaper. It achieves this by implementing blob transactions.

Introduction of Blobs

EIP-4844 introduces “blob transactions,” a new type of transaction that includes large, fixed-size data chunks called blobs. Each blob consists of 4096 field elements, each 32 bytes in size, totaling 128 KiB per blob. These blobs are temporarily stored in the beacon chain nodes for around 18 days before being pruned, unlike traditional calldata, which is stored permanently.

Note: 4096 epochs is the default blob retention period. Some clients, e.g., Prysm, can be configured to store it for longer.

Blobs are not stored directly within the transactions. Instead, they are represented by a versioned hash of the blob’s KZG commitment hash. This design choice significantly enhances gas efficiency by segregating the blob data from the main execution layer, reducing the high gas costs associated with permanent data storage.

What’s KZG and Its Purpose?

KZG is one of the most popular polynomial commitment schemes, a method of representing large objects. In ZK-rollups, It enables effective verification of off-chain computations, using point-evaluation proofs rather than lengthy polynomials to check computations.

In Proto-Danksharding, data blobs are represented as polynomials, and KZG is used to compute their commitments. The mathematical properties of KZG enable data availability sampling, i.e., verifying that blockchain data is both available and correct without requiring all nodes to download the entire data set. This is critical to scaling Ethereum’s data layer.

See KZG in Practice: Polynomial Commitment Schemes for more technical details.

How Does EIP-4844 Work?

EIP-4844 works through blobs, which are not part of Ethereum’s main layer (L1) but are instead routed through a separate data layer. This segregation allows for lower transaction fees and efficient data management.

Lifecycle of a Blob

1. Creation: Blobs are created during the transaction process and attached to blocks.
2. Storage: Blobs are temporarily stored in beacon chain nodes, ensuring consensus nodes fully download them.
3. Usage: Layer 2 rollups utilize these blobs to store and retrieve data, enabling efficient off-chain processing.
4. Pruning: After a certain period, blobs are pruned to maintain network efficiency and reduce long-term storage requirements.

Consensus Security

New Data Type Problem 

EIP-4844 introduces blobs, which add a new data type to be propagated and processed, potentially increasing the burden on the consensus layer. Implementing EIP-4844 has led to an increase in propagation sizes due to the additional data blobs. This increase has impacted synchronization times, making it longer for nodes to sync new slots. Consequently, the fork rate has risen from 3.097 to 6.707 slots per 2000 slots, indicating a direct impact on network stability.

The problem necessitates adjustments in how data is propagated across the network. To maintain synchronization without overburdening the network, more efficient handling and temporary storage of blobs are needed.

Ethereum Usage Data

Post-EIP-4844, there has been a marked increase in the total data size posted by rollups on Ethereum, with a notable shift from calldata to blob usage. The average data size per block increased by 116.8%, while the calldata size decreased by 56.8%. The total fees paid by rollups for data availability have significantly decreased, reducing the economic burden on rollups. Specifically, optimistic rollups have seen an 81% reduction in calldata usage, whereas zk rollups experienced a smaller decrease. These changes indicate enhanced efficiency and cost-effectiveness in Ethereum’s role as a data availability layer, encouraging greater network participation and rollup activity.

Rollup Transactions

EIP-4844 has led to a substantial increase in rollup transaction volumes, with all major L2 rollups (Arbitrum One, Optimism, Base, Starknet, zkSync Era, and Line) showing marked increases. For example, the Base rollup experienced a 224% rise in transaction volume. However, user delays for transaction settlement on Ethereum have increased for four out of six rollups, indicating longer wait times for transaction finalization. Arbitrum and zkSync Era, on the other hand, achieved significant reductions in user delay times, demonstrating improved efficiency in these cases. The variability in user delay times has also increased, except for Arbitrum, suggesting a mixed impact on the predictability and efficiency of rollup transactions.

Blob Gas Fee Market

The implementation of EIP-4844 has introduced a distinct fee market for blob gas, a significant aspect of “Multidimensional Gas Pricing.” Historically, computation or storage requests to an ETH node were bundled into a single unit called “gas.” However, EIP-4844 introduces “blob gas” to measure computation involving blobs, with each blob consuming a constant 131,072 (2^17) blob gas units.

Dynamic Fee Adjustments

The base fee for one unit of blob gas is dynamically adjusted every block in response to network congestion, mirroring the mechanism established by EIP-1559 for regular gas fees. The adjustment uses a formula to maintain an optimal target of three blobs per block, dynamically altering the base fee based on actual usage for balanced and efficient pricing.

Future Outlook: An Interim Solution Before Danksharding

Essential for solving the scalability trilemma, sharding is a proposed method of distributing data across multiple machines to process transactions in parallel. EIP-4844 is an interim solution before full data sharding, which would enable support for hundreds of rollups and millions of transactions per second by expanding blobs from 6 to 64 per block. While Danksharding is still years away, Proto-Danksharding (EIP-4844) provides immediate scalability and has been implemented on all testnets and went live on Mainnet with the Cancun-Deneb upgrade in March 2024.

Conclusions & Opinions 

EIP-4844 introduces “blob transactions” and a merged fee market, leading to a significant reduction in transaction fees for rollups, enhancing cost-efficiency and incentivizing Ethereum’s layer 2 adoption.

Proto-Danksharding represents a significant step forward in Ethereum’s journey toward scalability and cost-efficiency. This proposal addresses critical transaction costs and network load challenges by introducing blob transactions and a merged fee market. The expected 100x reduction in rollup transaction fees will make Ethereum more accessible and competitive, enhancing its appeal to developers, users, and businesses.

The improvements brought by EIP-4844 will streamline data management, support a higher volume of transactions, and foster ongoing innovation within the Ethereum ecosystem. As Ethereum continues implementing such forward-thinking upgrades, it sets a benchmark for other blockchains, driving the entire industry toward greater scalability and efficiency.

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References

Refer to the official EIP-4844 proposal and related developer resources for more technical insights and code snippets.

• Impact of EIP-4844 on Ethereum
• Ethereum Roadmap: Danksharding
• Ethereum Evolved: The Dencun Upgrade Part 5 – EIP-4844
• Blobs and Blob Gas: What You Need to Know
• What is EIP-4844? Proto-Danksharding and Blob Transactions Explained