As Ethereum continues to evolve, a key upgrade on the horizon is Proto-Danksharding. This improvement, also known as EIP-4844, is set to revolutionize Ethereum’s scalability and efficiency. Proto-Danksharding is an intermediate phase towards complete Danksharding. It introduces “blob-carrying transactions”, a new type of transaction that allows for more cost-effective data handling.
These blobs provide temporary storage for Layer 2 rollups, crucial for reducing operational costs. The introduction of Proto-Danksharding will significantly increase Ethereum’s transaction capacity while simultaneously reducing transaction costs. As the need for block space grows, transaction costs are becoming economically unsustainable for basic actions.
Proto-Danksharding aims to address this by decreasing gas prices and transaction fees. The implementation of Proto-Danksharding will also bring about a new fee mechanism for blob-data. This two-dimensional nature means that block builders will need to simultaneously avoid hitting two different limits (gas limit and data limit) when accepting transactions.
Moreover, Proto-Danksharding is expected to pave the way for full Danksharding. Full Danksharding is essentially a new kind of data availability layer. It is expected to result in a significant increase in block space and significantly reduce transaction costs, up to 10x less than current gas fees.
Ethereum’s End Users, the Primary Beneficiaries of EIP-4844
The enhancements suggested in EIP-4844 and the implementation of Proto-danksharding are primarily designed to benefit end users. The key outcome of these improvements is a substantial decrease in transaction expenses.
Lower fees also have the added advantage of enabling arbitrageurs to rectify minor price differences, which in turn draws more users to DEXs by making them more liquid and cost-effective to run. In the long run, enhancing the scalability of the Ethereum network encourages broader adoption, which is advantageous to all members of the ecosystem.
A part of the crypto community remains cautious regarding the impact of proto-danksharding on the price of ETH. A year after The Merge upgrade, Ethereum continue to trade at around the same price it did before the change took place. Others, however, are a bit more optimistic and claim the proto-danksharding upgrade will have an increasing impact on the price of ETH, going so far as to predict ETH reaching $4000.
In conclusion, the introduction of Proto-Danksharding is a game-changer for Ethereum. It promises to enhance scalability, reduce transaction costs, and prepare Ethereum for future advancements. As we look forward to its implementation next year, it’s clear that this upgrade will play a pivotal role in shaping the future of Ethereum.