Danksharding and Its Effects On Ethereum

Danksharding and Its Effects On Ethereum

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Ethereum is the second-largest blockchain network by market capitalisation, trailing only behind the flagship Bitcoin. Instead of resting on its laurels, Ethereum has continuously innovated on its strong foundation. Despite trailing behind Bitcoin, Ethereum is easily the most functional and value-driven network among the popular choices on the market. 

Ethereum’s deep functionality and rising popularity have taken their toll on the network’s congestion and scaling capabilities, making it slower and more expensive for the average user. 

This article will discuss one of the possible solutions to Ethereum’s ever-present scaling issues — Danksharding. 

Key Takeaways

  1. Ethereum’s smart contract functionality and the network’s global popularity put a massive strain on the platform. 
  2. The subsequent network congestion has resulted in increased gas fees and unreasonable processing periods. 
  3. Sharding and its conceptual successor, Danksharding, are two possible solutions to Ethereum’s congestion issues. 
  4. Danksharding methodology promises to minimise gas fees and processing times of Ethereum transactions, but it has considerable security downsides. 

What is an Ethereum Virtual Machine?

Before delving into the complex topics of sharding and, subsequently, dank sharding, it is vital to understand Ethereum’s virtual machine (EVM) and how it makes everything tick. EVM is the core processing technology behind Ethereum, enabling the network to have robust functionality of smart contracts. As a result, Ethereum has become the most extensive network supporting decentralised applications. 

While other platforms have similar functionality, none compare to Ethereum’s scope, scale and quality of services. EVM allows developers to try new technologies and digital concepts to develop the foundation for the decentralised internet. However, EVM’s unparalleled utility and value among the popular networks have caused severe issues with scalability, speed and transaction costs, a.k.a. gas fees

This problem has plagued Ethereum for a better part of the decade without any obvious solutions or offsetting mechanisms. In 2023, Ethereum remains expensive and quite slow compared to Bitcoin and other popular altcoins. Thus, developers are trying to come up with a plan to alleviate the network saturation without sacrificing the robust smart contract functionality that makes Ethereum unique. Sharding and Danksharding practices are among the most promising concepts for fixing the Ethereum scaling issues. Let’s explore further. 

Ethereum Sharding Definition

As Ethereum’s scaling problems led to full-blown network congestion, Ethereum creators and expert developers returned to the drawing board to search for a permanent scaling solution. As a result, Ethereum introduced the idea of sharding, which had the potential to alleviate congestion issues and let the network process up to 100,000 transactions in a single minute. 

So, how does the sharding concept work? In layman’s terms, sharding divides the Ethereum network into shard chains, all used to validate and process transactions in a segregated manner. The genius of this solution lies in its ability to prevent network-wide validation processes. Without sharding, every transaction on the Ethereum mainnet must be processed through all existing blockchain nodes. 

Ethereum Sharding Definition

This validation process significantly strains the network infrastructure, causing it to be slower, more expensive and inaccessible for new users. Yet, with the sharding practice, Ethereum divides itself into smaller chains, each processing thousands of transactions simultaneously. Since each shard chain acts as an autonomous network and houses significantly fewer blocks than the Ethereum mainnet, transactions can be validated quickly. 

So, it is not difficult to see why sharding is considered the best Ethereum update to date, as it could fix the most fundamental issue with the network. However, developers have yet to implement a fully working and realised version of sharding, as it requires heavy adjustments to the existing Ethereum mainnet structure. 

For some time, Ethereum creators and community developers almost gave up on the sharding concept, as it proved immensely difficult to implement. Instead, many different creators proposed off-chain roll-ups and other concepts to fix Ethereum’s scalability problem. However, in 2023, the blockchain world witnessed the revival of the sharding concept through its spiritual successor — Danksharding. 

As the sharding idea became more and more impractical, Ethereum researcher Dankrad Feist came up with an idea to combine sharding and roll-up methodologies into a single scaling solution. 

Fast Fact

Danksharding Explained

Danksharding, also known as EIP 4844, was conceived by the Ethereum researcher named Dankrad Feist with a mission to solve Ethereum’s scalability issues on a fundamental level. While Danksharding is not a direct successor to the sharding practice, it utilises this concept to deliver cheaper data to the network. With its innovative fusion of sharding and roll-up concepts, Danksharding could be a permanent solution to scaling Ethereum and reducing transaction and processing periods. So, what is Ethereum Danksharding, and how does it work exactly? 

Danksharding Explained

This brand-new concept utilises the roll-up practice of analysing and processing transactions. Roll-ups are a revolutionary scaling solution in their regard, batching numerous Ethereum transactions into a single batch and validating them off-chain to take the processing burden off the Ethereum mainnet. 

However, the roll-up methodology is far from perfect, as the transaction data is fully transferred into the rolled-up batches, making the entire process slightly redundant. After all, roll-up technology was created to decrease traffic on Ethereum, but due to inefficient data processing, it has failed to increase transaction throughput dramatically. 

With Danksharding, the roll-up concept can finally fulfil its initial potential, as it can utilise the sharding principle to batch only the relevant data points into the rolled-up nodes. To further visualise this concept, suppose we have 100,000 transactions on the Ethereum network. The Danksharding process will allow roll-ups only to take and process a fraction of the transaction data, making the process much more efficient. Moreover, Danksharding methodology enables roll-up data to be temporary instead of permanent. Without this practice, transaction data utilised in validating blocks is permanently stored within the roll-up database. This practice severely clutters and strains the network, containing billions of unnecessary data bytes. With Danksharding, transaction data is available on roll-up chains as long as it is necessary for validation. 

This groundbreaking concept is made possible thanks to data availability sampling, which permits networks to retrieve small data fractions from the transaction database without painstakingly going through the entire chain of blocks. With data sampling, roll-ups receive enough data to validate transactions with data-sampled blobs, which batch several transactions together without straining the mainnet. As a result, Danksharding transforms roll-ups into highly efficient validation mechanisms that can process thousands of transactions in seconds. 

Thus, Danksharding is the logical progression of two core ideas surrounding the Ethereum scaling dilemma – sharding and roll-ups. While the exclusive on-chain concept is no longer viable, Danksharding might be the best possible middle ground between the two scaling solutions.  

Benefits of Danksharding

As outlined in the previous section, the Danksharding concept is a revolutionary idea that could eliminate the Ethereum scaling problems once and for all. As the Danksharding methodology becomes more and more tangible, Ethereum users could possibly receive a Pareto improvement to their everyday interactions with the network. Let’s explore the practical benefits of applying the Danksharding process to the Ethereum network. 

Benefits of Danksharding

Reduced Transaction Fees

Since Ethereum became a go-to platform for smart contracts and dApp creators, the transaction charges have been anything but satisfactory. In some cases, gas fees might exceed the principal amount of ETH transactions, severely limiting ETH users’ freedom. In simple terms, Ethereum network participants have to be highly selective with their transactions, as lower-volume transactions might not be worth executing in the first place. 

Additionally, the popularity of Ethereum motivates select individuals to add tips to their base transaction fees, which further increases the price benchmark for average users. Thus, the current gas fee situation is quite restrictive and unfavourable on the Ethereum network. However, the Danksharding practice promises to alleviate this issue permanently. 

Currently, high gas fees trouble the Ethereum network due to the exponentially increased data processing needs. The complex EVM protocol at the heart of Ethereum demands substantial operating power to validate transactions and re-check all existing blocks in the network. The Danksharding process aims to solve this problem by dividing the processing intervals into much smaller and manageable pieces. Thus, a single transaction will require a minuscule amount of raw processing power to validate and execute trades.  

So, Danskharding stands to alleviate the most significant problem prevailing in the Ethereum community, which will, in turn, increase the network-wide transaction activity. In the end, Danksharding has the opportunity to facilitate Ethereum’s growth and make it a competitive option in the international payment landscape. Currently, the circulation of ETH coins is far behind other more accessible altcoins, and Danksharding could reverse this trend in a matter of weeks after launch. 

Increased Transaction Throughput

Aside from decreased fees, the Danksharding process will also facilitate faster transactions. As outlined above, the Danksharding process utilises only a fraction of transactional data to validate new blocks. Every transaction will be processed within the roll-ups, requiring mere seconds for validation. Thus, users will no longer have to wait several hours for each transaction to process and execute. 

As Ethereum’s executive team described, Danksharding’s roll-up and transaction blob combination will batch thousands of transactions and validate them simultaneously. Thus, several thousand transactions will be processed with the same amount of power that used to be enough for just a single block validation. 

This Danksharding benefit is just as critical as reduced gas fees, as it will liberate the network users from unreasonably long processing times. Currently, Ethereum’s processing periods leave much to be desired, and users with time-sensitive transactional needs generally avoid this platform. With Danksharding, Ethereum stands to gain a new stream of users due to minimised processing periods. 

Network Efficiency Across The Board

Finally, Danksharding’s importance might even go beyond immediate gas fee reductions and minimised processing times. As we have mentioned above, Ethereum is a technology-driven network that strives to create a better environment for the Web 3.0 wave of innovations. Danksharding will facilitate Ethereum’s base capabilities, letting developers create dApps with lower costs and higher efficiency. 

Currently, dApps built on Ethereum are restricted by the network’s speed, gas fees and overall efficiency. With Danksharding, the market will witness Ethereum-based apps that run faster and have almost no gas fees to hamper their user adoption. Thus, Danksharding is not just a neat solution to help Ethereum compete with flagship speculative cryptos but a gateway to Ethereum’s dominance in the upcoming Web 3.0 landscape. 

The Biggest Problem With Danksharding 

Thus far, the Danksharding concept has proven critical for Ethereum’s near future. Without this novel practice, Ethereum is only left with temporary scaling solutions that alleviate some network congestion without solving the core problem. However, Danksharding is not a perfect fix without flaws, as it compromises Ethereum’s security in the long run. 

As discussed above, the sharding idea was popular due to its on-chain nature. In simple terms, the sharding concept kept the actual data of transactions within the Ethereum blockchain network. This meant that Ethereum’s transactions could become cheaper and faster without compromising the airtight security provided by the platform. 

However, as sharding gradually transformed into the Danksharding idea, developers had to make a compromise. As described, Danksharding uses the same methodology as sharding to create blob-carrying transactions, but it no longer supports block validation on-chain. This change-up has divided the Ethereum audience, as the off-chain block validation is clearly less secure and reliable. Numerous users have issues with this practice, as it goes against the initial promise of Ethereum and blockchains in general. 

However, the controversy is not just about general principles, as Danksharding could also be pretty risky in practice. Smaller roll-ups that contain blob transactions are much easier targets for malicious attackers, as they have to breach a smaller Quasi-blockchain network with much less encryption. While roll-ups have robust security in their own regard, their security measures can’t be compared to the Ethereum network’s protection mechanisms.  

Closing Remarks

Danksharding is quite possibly the key to the massive Ethereum’s next giant leap. The Ethereum network has struggled to provide robust smart contract functionality and accommodate its global user demand for several years. With Danksharding, Ethereum will no longer have to sacrifice its functionality for faster and cheaper transactions or vice versa. 

However, Danksharding poses some security challenges as well, possibly weakening Ethereum’s capabilities against malicious attackers and other data disasters. Since Danksharding is still in development, Ethereum creators may also come up with a more optimal solution that solves the security dilemma. 

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