The initially scheduled Cancun/Deneb upgrade to Ethereum for the fall will be a game-changer for Layer 2 aggregation technologies such as Arbitrum and Optimism. The basis for this will be Ethereum Improvement Proposal (EIP) 4844, which will be the key token change for the upgrade, explained Kristen Kim, a vice president of the Galaxy Digital research team.
Last Friday, June 15th, the 111th Core Developer Consensus (ACDC) call was held. Led by Ethereum Foundation researcher Alex Stokes, the participants finalized the final scope of the upgrade. EIP 4844 (proto-thanksharding) is implemented.
Ethereum: The next upgrade is huge for ARB and OP
Like Kim He writes, EIP 4844 introduces a new transaction type called “blobs”. This increases the data and storage requirements of Ethereum blocks and creates a new fee market for valuing points separately from regular transactions.
The data points are the first milestone in the full Danksharding of Ethereum, which will allow groups like Arbitrum and Optimism to increase capacity by 100x. This is achieved by allowing nodes to securely process multiple blobs per block from the initial maximum set by EIP 4844.
Most importantly, EIP 4844 does not improve the scalability of Ethereum as a general-purpose blockchain for executing transactions and smart contracts, Kim notes. It does not significantly increase or improve the transaction capacity of Ethereum itself.
However, proto-danksharding reduces the cost of transferring large amounts of data to Ethereum and thus reduces the operating costs of the pool. This is of equal importance, as recent years have seen an increase in transactional activity from accumulatives such as Arbitrum and Optimism. While Ethereum mainnet transactions per second (TPS) have reached a maximum of 20 TPS this year, L2 TPS has peaked above 50.
Compared to the cost of publishing code and transactions directly on Ethereum, the additional pools have saved end users and dapp developers over 99% in gas fees. So the target of EIP 4844 is of great importance for scaling Ethereum.
“The Blob blockspace will be auctioned according to its own fee market, similar to the fee market design of EIP 1559,” says Kim who emphasizes that there are many similarities with the introduction of points on Ethereum and the introduction of segwit on Bitcoin. However, one of the main differences between segwit and EIP 4844 is the expected long-term impact of these code changes.
Arbitrage (ARB) The price is at the crucial resistance
In recent weeks, the ARB has shown relative strength compared to the OP. ARB price has cleared the previous decline and now needs to overcome the resistance at $1.03 to enter the May 6th to June 10th trading range. If the ARB price fails to do so in the next few days, the price discovery may be to the downside. imminent. Otherwise, a rally to medium-term resistance at $1.15 could be on the table.
Featured image from iStock, chart from TradingView.com
