The Ethereum ecosystem has come a long way in terms of scalability in recent years. One major milestone in Ethereum’s scalability roadmap was Proto-Danksharding (EIP-4844), which was included in the Dencun upgrade on March 13th. This upgrade introduced a new data structure (blobs) to enable rollups to batch transactions off-chain and post the proofs to Ethereum at a lower cost. Since the implementation of EIP-4844, the throughput and scalability of Ethereum and its associated rollups have climbed to over 220 TPS today and significantly reduced costs for rollups and their end users.
In this piece, we will examine EIP-4844 and Ethereum’s blob market in depth to understand its impact and how it will evolve.
EIP-4844 was an important upgrade that served as an intermediate step in Ethereum’s rollup-centric roadmap, laying the groundwork for highly scalable, cost-effective rollups. Its purpose was to improve the scalability of rollups on Ethereum and reduce their cost for end users. It achieves this by introducing blob-carrying transactions attached to blocks containing executed transaction data from rollups.
Blobs (Binary Large Objects) are large blocks of data (up to 128kb each) introduced as a part of EIP-4844 and designed to provide a cheaper way for rollups to add data to blocks. Blobs are a new transaction type included in each block with its dedicated gas market. The maximum size for blob storage per block is currently 0.75 megabytes.
Ethereum Blobs - @hildobby Dune Dashboard
Before EIP-4844, rollups would post batches of transaction information in L1 CALLDATA, incurring significant costs to the rollup, which would bear this cost and pass it on to their end users via higher gas costs.
Blobs are so much cheaper than CALLDATA because they are temporary, lasting only 18 days before being deleted. In addition, the EVM cannot access the data in these blobs; instead, the contents of the blobs are gossiped through a consensus client sidecar and not available to the execution client.
Rollup Economics - @niftytable Dune Dashboard
Since EIP-4844 was implemented on March 13th 2024, data fees from rollups have fallen dramatically from over $41m in March to just over $260k in August.
Given blobs' unique role in the Ethereum network, EIP-4844 creates a new blob gas market that operates similarly to EIP-1559. As of EIP-4844, each block can contain up to 6 blobs.
EIP-4844, Blobs, and Blob Gas: What you need to know - Blocknative Blog
If there are more than the target (currently 3) number of blobs in a block, the base fee will increase in the following block; if there are less than 3 blobs in a block, it will decrease, and if there are exactly 3, it will stay the same. While CALLDATA transactions are no longer used by rollups today, rollups have the additional option of utilizing CALLDATA, which may be cheaper depending on network conditions and demand for blobs. This can provide a floor on mainnet demand and a release valve for the blob market during high congestion.
