¶ EIP 4844: Proto-Danksharding
¶ The World Computer
Ethereum exists between a network of 1,000s of computers (nodes), each running a local version of the Ethereum Virtual Machine (EVM). All copies of the EVM are kept perfectly in sync.
Any individual EVM is a window into the shared state of the World Computer.
Today the computer is... primitive. Execution is slow, gas costs are outrageous and user experience is terrible.
What's worse: the more people use it the worse it gets.
Fear not... upgrades are coming!
¶ Scalability Trilemma
Before we discuss Ethereum's roadmap, we need to understand the challenges of blockchain scaling.
Summarized by the Scalability Paradox, it is (seemingly) impossible to remain decentralized, secure and scalable; optimizing for one compromises the other two.
But thanks to the world class researchers and devs at the Ethereum Foundation, we have a solution; the Scalability Paradox has been reduced to the Scalability Trilemma!
Here's how it'll be done:
¶ The Merge
The first major upgrade has already happened: Ethereum will be switching its consensus system from Proof of Work to Proof of Stake.
Instead of being secured by the computing power of the computers (minders) supporting it, The World Computer is secured by the economic value of ETH.
With Proof of Work, the system required top-of-the-line computers; now anyone with a home computer will be able to participate in the Ethereum network.
The Merge was a leap forward for decentralization, allowing large scale participation and removing the economies of scale factor.
This provides a network with credible neutrality, where everyone plays by the same rules.
No centralized player can change the rules to pick winners and losers. No personal conflict can spill over into the rules of the network.
One computer, supported by >10k nodes.
¶ Scaling Execution
The problem: as Ethereum/the EVM becomes more simple, its capabilities/speed stop improving.
The solution: move the execution environment off-chain.
The Ethereum blockchain will always be the settlement layer of The World Computer, but execution will migrate to layer 2. Rollups will focus on execution, users will interact with rollups.
Proof-of-stake will make Ethereum the most secure and decentralized consensus layer for rollups while all the difficult stuff moves off-chain, to the powerful computers.
Today, we already have rollups. Between chains like Arbitrum and ZKSync, billions of dollars of TVL have been moved to layer 2.
But this is just the beginning! Ethereum is currently general purpose, now its time to build to the rollup-roadmap.
¶ Data Availability
Deep Dive: Data Availability Bottleneck
The EVM is the virtual computing environment in which all of Etherum exists and all transactions happen.
After compressing a bundle of transactions, a rollup loads it into the EVM and commits it to the Ethereum blockchain.
From a function standpoint, we only care that the compressed bundle is committed to the blockchain (settlement).
We can build tools to decompress the bundle into a readable format and/or move the data off-chain, but we don't need the EVM to be able to access it.
Today, the EVM treats a bundle exactly the same as core programatic variables... and the gas fee market reflects that.
A rollup must pay a relatively large amount of ETH to commit a bundle, even though the bundle's contents are irrelevant to the operation of the EVM.
¶ EIP-4844: Proto-Danksharding
Which brings us to EIP-4844: Proto-Danksharding. (Fun fact: Danksharding is named after researcher Dankrad Feist. Proto-Danksharding is an upgrade recommended by researcher protolamda, hence Proto-Danksharding).
The technicals are out of scope of this thread, but we are going to talk big picture. EIP-4844 brings important changes to Ethereum's base layer that fundamentally reorients the system towards the rollup-centric future.
Today, rollups post into a field called "calldata," storage which persists on-chain forever. You can see this data within a transaction.
Under EIP-4844 rollups will be able to post bundles under a new transaction type.
This transaction will carry a blob, a large amount of data - inaccessible by the EVM - which is much cheaper than calldata.
Blobs are 10x larger than blocks, but they are pruned out of the blockchain after ~a month.
A new data-availability layer will arise, and the scalability of the system increases by an order of magnitude.
¶ A Dedicated Gas Market
EIP-4844 also creates a separate fee market for these transactions.
The result will be a tailored data layer – regular transactions and blobs will get distinct fee markets with independent gas prices.
So even if some NFT project is blowing up gas fees or arb bots are desperately chasing a huge liquidation, your rollup data costs won’t go up (though settlement costs would).
¶ Summary
Proto-Danksharding is an upgrade critical to the Ethereum endgame.
The most important thing to understand is that Ethereum will scale by offloading execution to high performance (possibly centralized) chains while retaining decentralized settlement.
Rollups will still generate data, in fact far more data than Ethereum can economically hold.
The solution:
- create more space for rollups
- decouple the market for EVM code and rollup settlement data
¶ Resources
Source Material - Twitter Link
Source Material - PDF