What is EIP-4844? How will Layer-2 solutions benefit?

Several suggestions to raise the EIP have recently surfaced on the social network Twitter. In today’s article, we continue to uncover an enhancement plan that is also well worth anticipating in the near future, which is EIP-4844!
Recent noteworthy proposals

EIP-1559 is a suggestion that gained a lot of attention about a year ago when it completely changed the working financial mechanism on Ethereum, assisting to generate deflationary strain for this network.

The proposal EIP-4626 has been available since March 2022. This is a proposal to aid in the standardization of Vault Tokens (tokens that signify when end users give liquidity to Vaults).

And in the near future, the Ethereum neighborhood is anticipating the EIP-4844 update. With the name called Proto-Sharding. This idea is expected to help reduce tier two transaction fees (especially on rollups) by 5-10x. So let’s find out what’s special about it!

What is EIP-4844?

EIP-4844 is a proposal written by several programmers constructing the Ethereum ecosystem (which includes the father of this network, Vitalik Buterin).

This idea assists in dividing the information required in a gathering transaction – known as “staines.” According to the authors, this will be the first step toward Ethereum’s eventual Sharding goals. Furthermore, EIP-4844 is known as Proto-DankSharding (roughly translated: DankSharding money, where “Dank” is an abbreviation for Dankrad Feist – a member who made significant contributions to this proposal).

If you are interested in the details, you can follow the podcast episode among Bankless and the authors of EIP-4844 below.

Impact of EIP-4844

As mentioned above, EIP-4844 can help reduce gas fees in the Ethereum ecosystem, especially with Rollups solutions. It is estimated that Optimistic Rollups solutions cost 3-8 times less than Layer-1. Meanwhile, ZK-Rollups solutions do even better with gas levels 40-100 times lower than Ethereum’s Layer-1.

In addition, the model of transferring data into small pieces (blobs) will help optimize the Data Availability problem of Rollups.

Often Rollups will need data to prove that a transaction is fraudulent. However, currently, the call data stage of Rollups is laborious and not optimized. Simply because Rollups only need data to validate a transaction at a specific point in time, instead of having to load a large batch of data at once. Therefore, the broken data blobs from the EIP-4844 upgrade will help the Rollups to optimize a lot in this authentication stage.

However, as the authors suggest, this is only a temporary solution to Ethereum’s scaling problem. In addition, some technical issues will be broken down to improve gradually, laying the foundation for the future Sharding process.

Roadmap and some latest updates
  • EIP-4844 was first introduced and tested at the ETH Denver event.
  • After being successfully deployed at the Execution layer, EIP-4844 will be deployed on the Consensus layer of Ethereum.
  • If all goes well, Proto-Danksharding is expected to be implemented in Ethereum’s Shanghai hard fork.

With that, we’ve gone over some background information about the latest upgrade as well as some explanations to help simplify the complex concepts surrounding this proposal. Hope the article will help you better understand these new updates during the Ethereum 2.0 upgrade.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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