Coinbase has been diligently preparing for the imminent launch of its layer-2 scaling solution, Base. The mainnet release is scheduled for today, Aug. 9. The community is placing its hopes on the triumph of this project for various compelling reasons. The network’s extensive integrations and partnerships, coupled with Coinbase’s formidable market influence, add to its potential for success. Amidst these considerations, an Ethereum Improvement Proposal [EIP] has been generating attention as a potential catalyst.
EIP-4844
EIP-4844 garnered significant attention for its goal of mitigating gas fees. Reports indicate that this proposal has the potential to significantly reduce gas fees. This could possibly range from 10 to 100 times lower by introducing a concept known as “proto-danksharding.” Danksharding represents a novel sharding architecture that utilizes substantial data units known as “blobs” to enhance the scalability of the Ethereum blockchain. Proto-danksharding serves as a prototype for danksharding. One can utilize its foundational framework as a basis to actively implement various sharding upgrades in the future.
This EIP will incorporate the integration of condensed data blobs that the Ethereum Virtual Machine [EVM] cannot directly process but can still be accessed. L2 protocols centered around rollups utilize the additional blob data capacities to alleviate network congestion, ultimately leading to a reduction in transaction fees. Therefore, this is highly beneficial for L2 networks. According to crypto analyst Miles Deutscher, this EIP could prove beneficial for Coinbase’s L2 scaling solution, Base. He tweeted,
EIP-4844 is anticipated to significantly decrease gas fees for various layer 2 chains. Notably, the Base platform, which utilizes Optimism’s technology, will benefit from this proposal. Following the implementation of EIP-4844, the Optimism network is projected to experience a substantial reduction in gas fees, with the cost dropping from $0.38 to $0.04.
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Will this EIP act as a catalyst for other L2 chains?
Deutscher pointed out that this particular EIP would have a huge impact on the L2 space. He wrote,
“Overall, I view this upgrade as a huge positive for the L2 space, as it will reduce barriers-to-entry for retail users by lowering cost, as well as making L2s comparatively more enticing to use vs. ETH and other (more expensive) chains.”
The announcement of EIP-4844 in June generated significant traction. This proposal might go live in the latter part of 2023. However, right after the announcement, there was a notable increase in the popularity of L2 assets such as Arbitrum [ARB], Synthetix [SNX], Optimism [OP], and Velo [VELO]. Consequently, many individuals within the market hold the belief that this EIP might serve as a trigger for the acceleration of L2 assets.
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