Dencun Hard Fork to Implement Ethereum Improvement Proposal EIP-4844
The highly anticipated Dencun hard fork, set to launch in March 2024, is generating excitement in the Ethereum community. This hard fork will introduce multiple Ethereum Improvement Proposals (EIPs) on the Ethereum mainnet, with one in particular drawing significant attention – EIP-4844, also known as proto-danksharding. This proposal has implications for Ethereum rollups, which are crucial layer-2 scaling solutions aimed at enhancing transaction throughput and reducing costs.
Challenges with the Current Method
In the current Ethereum ecosystem, rollups rely on the security of Ethereum by having execution layer nodes hold a temporary copy of the network's ledger and history to ensure transaction accuracy. However, the existing method of using "calldata" for this purpose is prohibitively expensive, costing around $1000 per megabyte. This poses significant challenges for layer-2 solutions, especially during times of high demand.
Introducing Blob Transactions
EIP-4844 aims to address this issue by introducing "blob transactions" as a more cost-effective alternative to calldata. These blobs are large packets of data that serve as temporary data storage to meet the data availability needs of Ethereum rollup solutions. By implementing blob transactions, the hope is to achieve more efficient processing and storage.
Key Features of Blob Transactions
Edward Felten, co-founder of Offchain Labs, elaborated on the role of blobs in rollups. These blobs will provide a reduced level of data availability service, and Ethereum nodes will retain them for a limited period of 18 days. This duration is deemed sufficient for the completion of any realistic proving mechanism's verification tasks.
Dynamic Pricing Model
According to the proposal, blob transactions will adopt a dynamic pricing model, with costs fluctuating based on usage levels. This means that prices will increase when usage is high and decrease when it is low. However, the exact impact of EIP-4844 on the cost of posting data for rollup solutions is uncertain, as it depends on variables such as potential increases in layer-2 traffic and the specific ways rollups utilize blobs.
Exploring Data Posting Strategies
To mitigate costs, one potential strategy is shared posting, where two different rollups combine their data for submission to the Ethereum mainnet. This approach would require coordination to manage delay costs and determine cost-sharing arrangements.
Alternative Data Posting Options
It's worth noting that Ethereum is not the only blockchain option for rollups to post their data. Other data availability solutions are emerging to cater to these needs, giving layer-2 solutions the flexibility to choose their preferred data posting destination.
Balancing Cost and Trust
When deciding where to post data, the Ethereum community will need to consider the trade-off between cost and trust. Relying on a specific data availability system involves placing trust in its reliability.
The implementation of EIP-4844 through the upcoming Dencun hard fork holds promise for Ethereum rollups, offering a potentially more cost-effective approach to data availability. As the Ethereum community eagerly awaits its launch, the impact on transaction throughput and costs remains to be seen.
Analyst comment
Neutral news.
As an analyst, the implementation of EIP-4844 (proto-danksharding) in the Dencun hard fork is expected to enhance Ethereum rollups’ efficiency and reduce costs by introducing blob transactions. However, the impact on the market is uncertain, as the pricing model for blobs is dynamic and dependent on usage levels. Rollup solutions may explore cost-saving strategies like shared posting, but they also have the flexibility to choose alternative blockchain options. The decision on data posting will involve weighing cost versus trust in data availability systems.
