Implications of EIP-4844
As I have previously covered how Arbitrum has developed in two different articles and also Optimism, the natural segway would be to dive into how EIP-4844 will affect the current leading optimistic rollups on Ethereum. As the upgrade is approaching, people are getting quite excited about what that will do for the L2s so let’s dive into what it is.
What is EIP-4844?
EIP-4844 is an Ethereum improvement proposal that introduces proto-danksharding. Now this terminology might be a headache for the average Joe (I don’t blame you) so let’s break it down. In order to understand, proto-danksharding we need to understand sharding first.
Sharding
Imagine a blockchain like a big puzzle. Sharding is like breaking that puzzle into smaller pieces, called shards. Each shard works on its own part of the puzzle. By doing this, we can solve the puzzle much faster because different people can work on different pieces at the same time.
On a blockchain-level, shards are like mini-blockchains that process their own transactions. This makes the whole system faster and able to handle more transactions. Each shard only needs to worry about its own part of the puzzle, so it doesn't get overwhelmed with too much work.
However, we still need a way for all the shards to talk to each other and make sure they agree on the final solution. This is like when different people working on different puzzle pieces need to share information to make sure the pieces fit together correctly.
So, sharding helps make the blockchain faster and more efficient by dividing the work among different shards, just like dividing a puzzle among different people to solve it faster.
However, the upgrade won’t allow full danksharding yet which is a core part of Ethereum’s roadmap. Still, it is a step in the right direction that introduces blobs.
Blobs
A blob is a raw byte string that is attached to a transaction.
What is being introduced are new “blob-carrying transactions” that contain additional added data that gets stored “along” with a block. To be clear, this is not increasing the block space, see it as an additional piece of information stuck alongside the transaction and not inside it that increases the amount of data each transaction can carry. Meanwhile, while blobs are larger in size than blocks, they are not stored forever. Instead, they are available for a limited amount of time as their commitment can be viewed by the EVM long enough to ensure that fraud proofs can verify the validity.
Why does this matter?
These new blobs will ensure that fees will be separated for storage and computation and users that want to store data on Ethereum can now decide if they want to store it for a limited time period or on the blockchain forever. Thus, for the average user, the transaction fees that already are cheap on the L2’s are about to become even cheaper by tenfold on the layer 2 solutions.
Most people don’t upload data onto the blockchain as they just execute transactions. Considering there will be an independent gas price for blobs, this will be extracted away from the average user that won’t be as affected by a congested network when people want to upload large amounts of data through blobs and it makes the current fee market more dynamic.
People that have been here for a while now will remember how Arbitrum’s Nitro upgrade kickstarted a rally within the ecosystem and the general excitement is that a similar case potentially happens again for both optimistic rollups. People have been positioning themselves by bidding $OP and $ARB for now and time will tell if that trickles down into respective ecosystems.
I hope you enjoyed the post. Don’t forget that you are more than welcome to leave feedback or drop any questions in the comment section.
Sharing this post helps it reach out to more readers which would be great. If you are interested in future posts from me, do not hesitate to subscribe. Thanks for taking the time!
Make sure to take your wallet security seriously and get yourself a Trezor Hardware Wallet
Disclaimer: All Content on this site is information of a general nature and does not address the circumstances of any particular individual or entity. Nothing on the site constitutes professional and/or financial advice, nor does any information on the site constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. This post may contain affiliate links. I am just a random degenerate sensei sharing an opinion.