Ethereum, the second largest cryptocurrency network, has been taking steps to be better than it was yesterday every day. It has rolled out methods and protocols, tweaked its architecture, and implemented various updates towards the goal of better.

Ethereum operated under the Proof-of-Work (PoW) consensus mechanism until 2020, when the Beacon chain was created, a first step to moving Ethereum towards a Proof-of-Stake (PoS) mechanism. In the same year, 2020, Paris (The Merge), an upgrade to the execution clients, allowed Ethereum to transition completely into a Proof-of-Stake consensus mechanism.

Of course, the transition to Proof-of-Stake was a big step in enhancing Ethereum’s and its sibling layer two chains' scalability. Other upgrades have been brought to life. The EIP-4844 upgrade moves towards using architecture called sharding. Before we go fully into EIP-4844, let us define what sharding is.

Sharding

Sharding is a technique that involves dividing a database into smaller pieces, known as shards, which can be processed independently, resulting in better transaction speed on the blockchain. By introducing shards on-demand and executing transactions simultaneously, the blockchain can potentially improve its scalability. Sharding is one of Ethereum’s main goals for achieving scalability, and it will be called Proto-Danksharding on the Ethereum blockchain.

What is EIP-4844: Proto-Danksharding?

The Ethereum Improvement Proposal 4844 (EIP-4844), also known as Proto-Danksharding, is a proposal by the Ethereum community designed to enhance the scalability of Ethereum’s layer two structure. The primary goal of this EIP is to enable rollups to make the most of a new fee market for embedded data and to scale without needing to wait while full sharding gets implemented.

Named after two of its authors who proposed it, Dankrad Feist and Protlambda (Diederik Loerakker), Proto-Danksharding introduces an interim solution for scaling Ethereum using rollups, as the Ethereum layer one scaling strategy, sharding, gets implemented. The changes proposed in EIP-4844 are designed to be compatible with the upcoming sharding solution. This compatibility will ensure a seamless transition into sharding when the technology is fully ready.

The reason behind this compatibility is that EIP-4844 is already implementing some of the developed elements of the sharding task but without enabling different validators to process and validate multiple data shards.

How does EIP-4844: Proto-Danksharding work?

EIP-4844 is set to introduce a new transaction type that will feature an extra data field called a blob. This blob can essentially be an opaque byte string up to 125kb. Blobs are secured using a novel cryptography style called KZG, named after Kate, Zaverucha, and Goldberg (authors of the “Constant-Size Commitments to Polynomials and Their Applications” paper). The KZG is a fixed-size vector commitment scheme. These blobs are forward-compatible with data availability sampling. They can play a role by assisting in relieving the network’s burden caused by growing block sizes and unsustainable transaction gas costs.

Transactions carrying blobs enable layer two solutions to get the data in a reasonable timeframe and at a lower cost than CALLDATA (where data from external calls to functions is stored), primarily because the data is smaller. It is important to note that Blobs will only be stored in the consensus layer, also known as Beacon nodes, and future developments will not require compatibility or composability with the execution layer, also known as the Ethereum Virtual Machine.

Adding blobs in transactions will dish out a new fee market that operates separately from the gas market used for transaction payments. Data blobs will be automatically deleted within a fixed time frame of one to three months. This will allow Ethereum nodes to stay slim and help avoid the need to acquire additional hardware for data storage as the Ethereum network continues to grow.

With the implementation of EIP-4844, layer two solutions will benefit the most, as transactions submitted to layer one will become significantly cheaper, thereby benefiting end users.

Benefits of EIP-4844: Proto-Danksharding

While EIP-4844 is still in the proposal stage, its benefits are self-speaking. EIP-4844 is the first step towards the implementation of sharding. While its main target is to be of proper and industry-changing benefits to layer two roll-up solutions, in the long run, it will also help Ethereum reduce gas fees and help facilitate the onboarding of the next million users.

As for rollups, instead of putting data within conventional transactions, they would post data to the Ethereum blockchain using blobs, ultimately taking advantage of lower transaction costs.

Conclusion

Proto-Danksharding represents yet another significant step in the advancement of the Ethereum ecosystem. While we eagerly anticipate its full launch, it is clear that one of its primary objectives is to enhance scalability on the Ethereum network. This, in turn, will bolster security and decentralization within the ecosystem.

As we approach the dawn of a new chapter for Ethereum, it's essential to stay informed and updated on technologies that excite you. After all, the true purpose of education is to transform the mirrors of knowledge we see into windows of opportunity.