EIP 4844 is going to be the biggest ethereum upgrade for 2023, In this article we have explained it in a very simple manner.
Ethereum is an open-source blockchain platform that is constantly evolving. Its development roadmap includes a wide range of features and improvements that are designed to make the Ethereum network more scalable, secure, and user-friendly. EIP-4844 (Ethereum Improvement Proposal 4844) is an important part of this roadmap, as it aims to reduce the cost of executing smart contracts on the Ethereum network. This could be particularly important as the Ethereum network continues to grow and attract more users, as it could help to make Ethereum more accessible and attractive to a wider range of developers and businesses.
Introduction
Ethereum is a decentralized, open-source blockchain platform that enables the creation of smart contracts and decentralized applications (dApps). Since its launch in 2015, Ethereum has become one of the most popular blockchain platforms, with a wide range of applications ranging from financial services and supply chain management to gaming and social media.
However, as the Ethereum network has grown in popularity, it has also faced some significant challenges. One of the most pressing issues has been the high cost of executing smart contracts on the Ethereum network. Smart contracts are self-executing contracts with the terms of the agreement between buyer and seller being directly written into lines of code. They are an important part of the Ethereum ecosystem, but executing them requires “gas” – a unit of computation used to measure the amount of processing required to execute a contract.
The cost of gas can vary significantly depending on the complexity of the contract and the current demand for processing power on the Ethereum network. As more and more users have begun to rely on smart contracts, the cost of executing these contracts has become a major concern. This has made it more difficult for some users to afford to use the Ethereum network, and has also made it more challenging for developers to create and deploy new contracts.
In 2021, a proposal called EIP-4844 was put forward as a way to address this issue. EIP-4844 (Ethereum Improvement Proposal 4844) outlines a series of changes to the Ethereum network that are designed to reduce the cost of executing smart contracts. In this blog post, we will take a closer look at EIP-4844 and explore how it aims to address the high cost of smart contract execution on the Ethereum network. So, let’s dive in and see how EIP-4844 could potentially revolutionize the way smart contracts are executed on the Ethereum network.
EIP-4844
EIP-4844 is a proposal for the Ethereum blockchain that was put forward in 2021. The proposal outlines a way to reduce the cost of executing smart contracts on the Ethereum network, which has become a major concern as the network has grown in popularity.
One of the main ways EIP-4844 aims to reduce the cost of executing smart contracts is by introducing a new type of contract called a “pay-as-you-go” contract. These contracts would allow users to pay for their contract execution on a per-operation basis, rather than upfront. This would allow users to more accurately predict the cost of their contract execution, and could help to reduce the risk of unexpected gas costs.
Another way that EIP-4844 aims to reduce the cost of smart contract execution is by introducing a new type of contract called a “stateless contract”. These contracts would not have their own storage on the Ethereum blockchain, and would instead rely on other contracts to provide the necessary data. This could help to reduce the amount of data stored on the blockchain, and could also make it easier for developers to write contracts that are more efficient and cost-effective.
How does it work?
EIP-4844 is an upcoming upgrade to the Ethereum network that aims to significantly reduce the cost of executing smart contracts and other on-chain activities. It does this by introducing a new type of transaction that accepts ephemeral “blobs” of data, which can be used to store rollup data in a more efficient and cost-effective manner. This new data storage system is purpose-built for layer 2 rollups, and is expected to reduce fees by 10-100x. In addition to making Ethereum more accessible and attractive to a wider range of users, the upgrade could also help to pave the way for full sharding, which is another scalability solution that has the potential to further reduce the cost of executing smart contracts. Over the past few months, a team of developers from OP Labs, the Ethereum Foundation, and other organizations have been working to specify, implement, and test EIP-4844, and they are now in the process of launching a fully functioning testnet. Once this testnet is live, they hope to deploy EIP-4844 to the mainnet as soon as possible, in order to unlock more on-chain experiences for more customers.
Blobs and Shards – EIP-4844
Blobs are small pieces of data that are stored on the Ethereum blockchain in a way that is optimized for storing rollup data. Rollups are a type of layer 2 solution that allow users to batch together multiple transactions into a single, more efficient transaction that is processed on the Ethereum main chain. By storing rollup data in blobs, EIP-4844 aims to create a new, lower cost fee market for executing smart contracts and other on-chain activities.
In addition to blobs, EIP-4844 also relates to the concept of sharding. Sharding is a scalability solution that divides the network into smaller “shards,” each of which can process transactions independently. This allows the network to process more transactions in parallel, which can help to reduce the overall time it takes to process transactions and can also help to reduce the cost of executing smart contracts. EIP-4844 includes provisions that are intended to make it easier to implement sharding on the Ethereum network, which could further help to reduce the cost of executing smart contracts and other on-chain activities.
Closing Thoughts
In conclusion, EIP-4844 is an important proposal that has the potential to significantly reduce the cost of executing smart contracts on the Ethereum network. By introducing pay-as-you-go contracts and stateless contracts, EIP-4844 could help to make Ethereum more accessible and attractive to a wider range of users, and could also help to drive further adoption of blockchain technology in general. While there are still some technical challenges to be addressed and the proposal has not yet been implemented, it is an exciting development that could have a big impact on the Ethereum network and the broader blockchain ecosystem.
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