Explore how the Ethereum Cancun-Deneb upgrade, featuring EIP-4844 or Proto-Danksharding, revolutionizes scalability, reduces gas fees, and sets the stage for future Ethereum network enhancements.

## Introduction

EIP-4844, Proto-Danksharding, is the next major upgrade to Ethereum. EIP-4844, set to roll out in the first half of 2024, introduces ‘blob-carrying transactions’ to efficiently manage large data, setting the stage for future full sharding implementation on Ethereum.

### Fun fact

Where did Proto-Danksharding get its name? The name 'proto-danksharding' is derived from its two visionary creators, [Protolambda](https://twitter.com/protolambda) and [Dankrad Feist](https://twitter.com/dankrad).

## About Danksharding

Danksharding, presently the proposed design for sharding on Ethereum, employs sizable data ‘blobs’ to increase transaction throughput. Proto-Danksharding serves as an interim measure towards full Danksharding, with the aim of reducing transaction costs and boosting throughput by leveraging the blob-carrying transaction type that L2 rollup sequencers will use.

To learn more about Ethereum scaling and L2 rollups, please take a look at our previous blog post [The comprehensive guide to scaling Ethereum & Rollups.](/content/insights/eip-4844-proto-danksharding#/index.html)

### Why EIP-4844?

Essentially EIP-4844 adds a new data storage option that Layer 2 blockchains can take advantage of, to directly lower their transaction fees by around 10x. Don’t quote us on this, but if currently sending ETH in L2s is around $0.10 to $0.20 we are confident that post EIP-4844, sending ETH will cost pennies. And, as L2s blockchains post data back onto Ethereum, mainnet fees will be marginally lowered too.

Layer 2 activity is accelerating, due to the already-lower cost associated with gas fees. The higher fees on some layer 1 blockchains make it impractical for businesses with high transaction volumes to move on-chain (for example when completing non-financial transactions like gaming transactions or low-value NFT activities). High fees on layer 1 blockchains have been a barrier for many to date, playing a role in stifling the often talked-about mass adoption vision for the Web3 industry.

EIP4844 going live will effectively increase the bandwidth of ETH Layer 2’s, and will continue to improve scalability and user-centricity. By bringing down those fees but still inheriting Ethereum’s security, L2s will benefit from a whole new range of use cases that can and will move on-chain. Use cases that were previously benched by the classic ‘blockchain scaling argument’, such as buying goods with crypto, on-chain order book (CLOB) trading, gaming and more SocialFi platforms to name a few.

Anything that is transaction intensive will now be welcomed on-chain.

Additionally, the Ethereum Cancun upgrade encompasses several other noteworthy updates such as, the incorporation of execution-layer logic, verification rules, and a two-dimensional fee market — all essential components for the eventual implementation of full Danksharding down the road.

## Conclusion

Through the incorporation of the majority of logic necessary for complete Danksharding, EIP-4844 plays a pivotal role in the journey towards achieving full scalability for the Ethereum network.

Our take? EIP-4844 will kick-start the next wave of on-chain onboarding for a wider range of use cases than we have previously seen. All things considered, 2024 is shaping up to be an exciting, bullish and expansive year for the Web3 industry.