Data Blobs: New Efficiency and New Challenges
Covalent, the leading historical data availability network empowering developers with its Unified API and open source SDK, is aligning its innovative solutions to meet the needs of future advancements of Ethereum, particularly in light of the Ethereum Improvement Proposal 4844 (EIP-4844). With Covalent's robust infrastructure, users and developers can access a wealth of structured data from an ever-growing repository of over 225 indexed chains. This integration is pivotal in enriching Ethereum's ecosystem with increased scalability, efficiency and decentralization.
As of Beacon Slot 8929176 (roughly March 13th 2024) Ethereum underwent the Dencun hardfork. First introduced with the Ethereum Improvement Proposal 4844 (EIP-4844), proto-danksharding is now live on Ethereum. This marks a significant change to the network increasing blockchain scalability and providing more efficient data management.
It’s incredibly exciting to see this core upgrade to Ethereum, we haven’t ever seen such a fundamental change to Ethereum like this since the launch of Proof of Stake. Here’s to lower gas fees across the Ethereum network.
EIP-4844 represents a fundamental shift in blockchain technology, introducing a novel data structure called "blobs." These efficiently processed data chunks are a key element of a new transaction type, capable of handling up to 125 KB of opaque byte strings. Upto 6 blobs can be added per block, allowing for a throughput of 750kb/block. This development addresses the current limitations faced by rollups like Base or Optimism due to the high costs associated with posting proof data in smart contract CALLDATA, a fully on-chain process. By moving this specific use case of CALLDATA into a more fundamental function of Ethereum, gas fees are expected to come down.
Innovative 'Sidecar' Blob Transactions and Consensus Mechanism
Central to EIP-4844 is the 'sidecar' design for handling blob transactions. This groundbreaking approach significantly reduces the blockchain's load and enhances data handling. Honest validators produce Beacon blocks with blobs, then sign and publish the associated blob sidecars. Thus blobs are referenced on the beacon chain but propagate as separate entities, offering forward compatibility for future data increases like data-availability-sampling (DAS) and full-danksharding, a research area very familiar to Covalent.
Crucially, the data within these blobs are not accessible to the Ethereum Virtual Machine (EVM). As mentioned, the consensus layer is tasked with persisting the blobs for data availability, however, it is set for automatic deletion from beacon nodes after approximately 18 days (or 4096 epochs), aligning with Ethereum's scalability and data management objectives.
Another change is the dynamic pricing model for base fees where it will be algorithmically adjusted. Similar to EIP-1559, the dynamic pricing model involves a base fee for transactions, and it fluctuates based on network congestion—rising when the network is more crowded and falling when it is less used.
Covalent and the Ethereum Wayback Machine: Pioneering Data Availability Solutions
These changes mean expensive CALLDATA driving up Ethereum Mainnet gas prices with all of the hundreds of rollups posting data to the L1 EVM will begin to reduce driving down transaction costs for Ethereum users. In other words, more people can participate onchain. However, this also means that important data that is to be used to verify the transactions on L2 rollups is now both set for deletion after 18 days and is no longer part of the Ethereum network of execution nodes like Geth, and thus no longer stateful.
In this evolving landscape, Covalent's Ethereum Wayback Machine emerges as a critical tool, designed to maintain the availability of blob data indefinitely in a decentralized way. This capability is vital for developers and funds, enabling the development of a plethora of downstream use-cases of historical data, including AI model fine-tuning, machine learning, risk estimations and future as-of-yet unknown unlocks.
Covalent stands ready for Blob transactions
The introduction of EIP-4844 and the move towards full danksharding reflect Ethereum's steadfast dedication to innovation and improvement. This breakthrough addresses scalability and data management challenges unlocking new possibilities for onchain applications. With these incredible changes, Covalent is prepared for Ethereum’s further progress into the purge ready to provide developers and researchers the tools to confront historical data availability bottlenecks and centralization risks. The Ethereum Wayback Machine is a shining light in this era, ensuring continued access to historical data at an enterprise scale, thus supporting the ecosystem's growth and fostering decentralization.
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About Covalent:
Covalent provides the industry-leading Unified API bringing visibility to billions of Web3 data points. Developers and analysts use Covalent to build exciting multi-chain applications like crypto wallets, NFT galleries, and investor dashboard tools utilizing data from 229 + blockchains. Covalent is trusted by a community of 40,000+ developers and powers data for 5,000+ applications, including 0x, Zerion, Rainbow Wallet, Rotki, Bitski, and many others.