A Complete Guide to EIP- 4844: Proto-Danksharding

Introduction

While the launch of the Ethereum network back in 2015 opened the gate for real-life blockchain applications through smart contract functionalities, Its scalability is an ongoing concern. The Ethereum dev team has been seeking solutions to overcome this issue to make the network accessible for many. Several upgrades and improvements, from merge to rollups, have already been introduced to reduce gas fees and boost network throughput.

However, the gas fee prices are still high, and throughput remains lacking in many aspects, ultimately hindering the mass adoption of Ethereum. For this, Ethereum Foundation has worked on a long-term solution of implementing sharding. Data sharding is a complex process, and several changes need to be made before its full implementation. One step towards this is EIP-4844, also known as “proto-danksharding”. 

In this article, we will explore EIP-4844, what proto-danksharding is, it’s working, and how EIP-4844 benefits us users. 

Read More: What is Etherscan & Blockchain Explorers?

What is EIP-4844?

Ethereum Improvement Proposal 4844 (EIP-4844) is a network upgrade created on February 25, 2022, that executes a new transaction type, blob-carrying transaction, to reduce transaction fees on the Ethereum network. This upgrade aims to improve scalability by implementing a new transaction format and logic for danksharding. But before we get into danksharding and proto-danksharding, let’s understand sharding. 

Sharding is a method of partitioning a database into smaller units which will then manage transactions separately, improving the performance and throughput of the network. Ethereum network aims to implement this sharding mechanism not on transactions but on data blocks through danksharding. 

Danksharding is a new sharding design that aims to expand space for data called blobs. The purpose of danksharding is to provide storage space for layer-2 rollups to increase their transaction handling capability or throughput from the present 100 TPS to approximately 100,000 TPS (transactions per second). Furthermore, it also introduces a merged fee market, in which a single proposer chooses transactions and data for all shards instead of having fixed shards with distinct blocks and block proposers.

EIP-4844, or proto-danksharding, is an upgrade proposal that will occur before danksharding. Proto-danksharding name came after researchers and authors of EIP-484, Dankrad Feist and Diederik Loerakker, a.k.a Proto Lambda. EIP-484 introduces a framework, verification rules, and a new transaction format that will reduce gas fees and increase network throughput but not implement sharding.

How does EIP-4844 work?

As discussed earlier, EIP-4844 implements a new transaction type called blob-carrying transactions to reduce gas fees. These transactions are similar to regular transactions but contain additional data called “blobs” which are cheaper and can not be accessed by the Ethereum Virtual Machine (EVM).

However, do not confuse Blobspace with Blockspace, these are two different entities. Blockspace is space available in a block, approx 940kB, and is accessible by EVM, whereas Blobspace is extra data size of approx 125kB and is only available for a shorter time period. Furthermore, since these blobs reside on the consensus layer of the Ethereum blockchain instead of the execution layer, they are not accessible to EVM. This means blob carrying transactions do not have any execution costs and can carry large data without changing actual transaction size. 

Proto-danksharding introduces a limited data bandwidth of around 1 MB per slot, that is a transaction block can contain 16 blobs. Each blob can hold data of around 32 byte, resulting in 1MB data transfer, which is much higher in comparison to roll-up blocks that can only carry around 2-10kB. This approach provides significant scalability to the Ethereum network while reducing gas fees of existing Ethereum transactions.

Benefits of EIP-4844

• Users will be able to perform fast transactions at lower gas fees than present high costs.
• The EIP-4844 is implementing blob-carrying transactions in the same format as they will be after the full sharding of Ethereum. This allows rollups and future developments to scale. 
• The merged fee market will enable low-fee transactions even at high network times.
• Improved scalability and cost-efficiency will lead to broad adoption of the Ethereum network with growing decentralized applications(dApps).

When Will EIP-4844 and the Cancun-Deneb Upgrade Go Live?

Ethereum upgrade has undergone several upgrades in the past years, from Proof of Work to Proof of stake in 2020, then Beacon chain merge with Ethereum mainnet in September 2022. The most recent Shanghai Capella upgrade on April 23, 2023, enabled staked ETH withdrawal for Ethereum blockchain validators. The next major upgrade, the Cancun-Deneb that will implement the proto-danksharding mechanism, improving the scalability of Ethereum to the next level, is expected to go live by the end of 2023. Here listed are the segments of full dank-sharding which are included in the EIP-4844 proposal: 

• A new transaction type that is the same format as needed in “full sharding”.
• All required execution-layer logic
• All required consensus cross-verification logic 
• Layer separation between “BeaconBlock” verification and data availability sampling blobs
• Most of required BeaconBlock logic
• Independent self-adjusting gas price for blobs

Read More: What is Ethereum Cancun-Deneb Upgrade?

Conclusion

Implementation of EIP-4844 is a significant protocol upgrade that will lower network gas fees and boost transaction throughput, improving the scalability of the Ethereum network. This will make Ethereum a competitive blockchain without compromising its security and decentralization. As an investor or trader, you can leverage this opportunity by understanding its application and upcoming changes in the decentralized realm.

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