EIP-4844 is a key update to the Ethereum ecosystem that aims to improve scalability and reduce the cost of fees for transactions within the network. The update introduced a new type of transaction: large binary objects. These allow large amounts of data to be temporarily stored on the Ethereum blockchain without loading the platform.
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Table of Contents:
- What is EIP-4844?
- How Does EIP-4844 Work?
- Benefits of EIP-4844
- Potential Drawbacks and Considerations
- Comparative Analysis
- Summary
What is EIP-4844?
EIP-4844 release date was 13 March. It solves 2 of Ethereum’s major problems: high gas charges and limited network bandwidth. The introduction of Blob objects significantly increased the amount of data that can be transferred and processed in a single transaction while reducing the need to store that data on the blockchain permanently. Blob objects are stored temporarily, reducing the load on nodes and ensuring more efficient utilization of network resources.
The main aspects of Ethereum EIP-4844:
- The new binary object transaction type allows large amounts of data to be included in blocks, reducing transaction costs and increasing network bandwidth. The information is stored temporarily, usually for a few months, after which it is deleted, helping to optimize the use of space and resources in the ecosystem.
- Proto-danksharding is a transitional step to full danksharding, allowing Ethereum to scale to 100,000 transactions per second. This upgrade increases the efficiency of transaction processing and reduces the load on the core network.
- The introduction of Blob objects implies a reduction in the cost of gas per transaction, as data can be efficiently compressed and temporarily stored, reducing the total amount of information required to reside permanently on the blockchain.
EIP-4844 is a significant step forward for Ethereum, offering solutions to the network’s limitations and laying the foundation for future scaling. This update not only improves performance and reduces users’ financial costs but also improves Ethereum’s position as the leading blockchain platform for developing decentralized applications.
How Does EIP-4844 Work?
Proto-danksharding (EIP-4844 explained) is a significant Dencun upgrade to the Ethereum ecosystem to improve performance and reduce transaction costs. To understand how EIP-4844 works, it is important to review the concepts of Ethereum sharding and danksharding, as well as the key innovations introduced by the EIP-4844 timeline.
Therefore, let’s first understand these terms:
- Sharding is the process of dividing the blockchain database into smaller segments, or shards, each of which can process transactions in parallel. This increases overall network throughput because multiple shards can process transactions simultaneously, reducing the load on each individual node and speeding up transaction processing as a whole. In the context of Ethereum, sharding is part of a long-term plan to improve the network’s scalability.
- Danksharding is an advanced version of sharding, specifically designed for Ethereum, that introduces the concept of Blob objects for storing large amounts of data. These Blob objects are designed to be temporarily stored on the blockchain, reducing transaction costs and increasing network bandwidth while keeping data available for processing and verification. EIP-4844 represents the first step towards implementing danksharding by introducing support for Blob objects in Ethereum.
Therefore, EIP-4844 is only the first step toward a large-scale optimization of the decentralized Ethereum network.
Benefits of EIP-4844
EIP-4844 results in more streamlined pricing for crypto rollups and lowers overall transaction expenses. The mechanism for Blob fees, similar to EIP-1559, targets average block sizes of 1MB, representing a significant advancement from Ethereum’s current capabilities. This improvement primarily benefits crypto rollups, fostering competition among different solutions and markedly reducing transaction costs.
So, here are the EIP-4844 benefits brought with the Dencun upgrade:
- Rollups Ethereum experiences a 100x drop in transaction fees. With EIP-4844’s introduction of “blob transactions” and a combined fee market, a notable decrease in transaction fees for crypto rollups becomes achievable. This heightened cost efficiency benefits users and encourages broader adoption of Ethereum’s layer 2 solutions.
- Scalability for a global transaction network. EIP-4844 lays the groundwork for Ethereum to effectively manage a global transaction network. By optimizing data handling and scalability, Ethereum becomes more capable of accommodating a higher transaction volume, thereby supporting diverse applications and users.
- Enhanced competitiveness in the cryptocurrency landscape. Through lowered fees, enhanced transaction processing, and scalability, Ethereum gains a competitive edge in cryptocurrency. It can solidify its position as a premier choice for developers, users, and businesses seeking a secure and economical blockchain platform.
- Efficient data pruning and management. EIP-4844 introduces streamlined data pruning mechanisms, ensuring data availability only for requisite durations. This reduces long-term storage demands and expenses, promoting Ethereum’s sustainability and environmental friendliness.
- Future-ready for network enhancements. By embracing a modular approach and a specialized data layer, Ethereum becomes better equipped to adapt to future alterations and upgrades. This adaptability enables distinct teams to focus on their respective domains, fostering continual innovation within the Ethereum ecosystem.
- Enhanced user experience. Reduced transaction fees and improved scalability translate to a superior user experience. Users benefit from quicker, more economical transactions, making Ethereum a more appealing platform for various applications, including DeFi, NFTs, and beyond.
Now, many Web3 projects leverage EIP-4844 to their advantage. By the way, if you want to develop your own Web3 product and face the challenge of choosing out of many blockchain development platforms, our IdeaSoft team can help you.
Potential Drawbacks and Considerations
Despite EIP-4844’s significant potential to improve scalability and reduce transaction costs on the Ethereum network, the update has been criticized.
One of the main disadvantages pointed out by critics is the temporary storage of Blob objects. While this reduces network load and transaction costs, it raises questions about long-term data access and preservation. Temporary storage of data may create an obstacle for some applications that require long-term or persistent access to information.
Another criticism concerns the difficulty of implementing and integrating the new type of transaction with existing applications and infrastructure. Application developers must adapt their systems to work with Blob objects, which can require significant effort and resources. It also entails time-consuming training and transition costs, which can slow the adoption of the EIP-4844 update on a wide scale.
In addition, there are concerns about the potential increase in centralization on the Ethereum network due to changes in the processing and storage mechanism. Some experts have expressed concerns that the introduction of Blob objects and changes to the transaction structure can lead to an increased role for large validators and nodes with significant computational and storage resources, potentially degrading the decentralized nature of the network.
Comparative Analysis
Here is a comparative table of how gas has changed after the EIP-4844 date.
| BEFORE EIP-4844 | AFTER EIP-4844 | |||
| PROJECT | GAS TO SEND | GAS TO SWAP | GAS TO SEND | GAS TO SWAP |
| Ethereum | $1.04 | $5.21 | $0.104 | $0.521 |
| Starknet | $0.22 | $0.71 | $0.022 | $0.071 |
| Arbitrum | $0.12 | $0.33 | $0.012 | $0.033 |
| Polygon zkEVM | $0.11 | $0.40 | $0.011 | $0.040 |
| Optimism | $0.06 | $0.12 | $0.006 | $0.012 |
Summary
The main consequence of EIP-4844 for users is a significant reduction in the cost of transactions in L2 networks and a reduction in the price of gas in the Ethereum network. This, in turn, gives impetus to the rapid development of rollup solutions and their ecosystems.
Our IdeaSoft team carries a remarkable mix of profound Ethereum expertise, a proven track record in working with rollups, and an emphasis on strategic goals. We understand the nuances of EIP-4844 and how it can boost your Web3 product. We’ll work closely with you to create custom solutions that lower expenses but also open unknown opportunities for your project in the growing cryptocurrency terrain.
