Coinbase Logo

Supporting EIP-4844: Reducing Fees for Ethereum Layer 2 Rollups


  • Following the Merge, EIP-4844 is an upcoming upgrade to Ethereum that will introduce data availability for rollups, leading to reduced fees and more transaction throughput 

  • We see EIP-4844 as a key enabler for bringing our customers into the cryptoeconomy with a secure, easy to use experience that is faster and cheaper

  • We’ve been helping drive this effort alongside the Optimism and Ethereum Foundation teams, dedicating significant internal engineering resources to accelerate the work

  • If you’re interested in contributing to the effort, you can see the open items in the EIP-4844 readiness checklist or join our next community call

By Jesse Pollak


, October 6, 2022

Coinbase Blog

In mid-September, Ethereum completed the largest upgrade to the network to date: the Merge. The Merge upgraded Ethereum from Proof-of-Work to Proof-of-Stake, thereby making it more secure, less energy-intensive, and better for implementing new scaling solutions. With the Merge complete, the next big focus for Ethereum protocol development is the Surge: scalability improvements to the network that will reduce transaction fees and increase throughput. The Surge is oriented around Ethereum’s rollup centric scaling roadmap, which will unlock these cost and scalability improvements on “Layer 2” rollups that inherit the user experience and security of the Ethereum network.

At Coinbase, we are excited about the Surge because we believe that reduced onchain transaction fees and increased throughput will have a positive impact on the rate of adoption of the cryptoeconomy and help build the bridge to web3. As a reminder, when users interact with a blockchain like Ethereum, they pay “gas fees'' to the Ethereum network for the computational cost of the onchain activity. Even with Ethereum gas fees near recent lows, fees are still too high ($1-10 per transaction). And as we saw last year, when crypto usage surges, these fees can increase by multiple orders of magnitude ($10-100 per transaction), making onchain activity inaccessible for users. Our priority is to bring our over 100 million existing customers and the rest of the world into the cryptoeconomy, and we must make it cheap and easy for them to use crypto at scale. 

Enter EIP-4844: an upgrade to the Ethereum network that will reduce the cost of layer 2 rollups by 10-100x and shepherd in a new era of low cost onchain activity. EIP-4844 works by introducing a new transaction type to Ethereum that accepts ephemeral “blobs” of data. This new blob data storage is purpose built for storing rollup data and enables us to create a new, lower cost fee market. With this change in place, we expect fees on layer 2 rollups to decrease by 10-100x. The upgrade also takes us one step closer to full sharding (another 10-100x cost reduction!) and ensures that the new data storage requirements are manageable for stakers. 

In May of this year, we got together with OP Labs (the core development team behind Optimism) and the Ethereum Foundation and began collaborating to specify, implement, and test EIP-4844. As part of this collaboration, we’ve dedicated significant engineering resources to the effort because we believe it will have an outsized positive impact on both our business and the broader ecosystem. Thanks to the hard work of these teams and others, we now have a full specification for the execution and consensus clients, working implementations in the Prysm and Geth clients, nearly complete preparations for the KZG ceremony, and a launched Devnet v1. Over the next few months, we expect to further harden the specs, expand implementation work to additional clients, and launch a fully functioning testnet. 

Given how important reducing transaction fees and increasing throughput is to bringing our customers into the cryptoeconomy, we believe that the sooner EIP-4844 can safely be deployed to mainnet, the better. As we get EIP-4844 live, and continue on the Surge workstream, we’re excited to unlock more onchain experiences for more customers, enabled by the lower fees and higher transaction throughput it unlocks.

If you want to learn more about EIP-4844, you can dive deeper at Fully landing EIP-4844 will be a major community effort and the effort is always looking for additional contributors. Whether you’re a rollup, an exchange, or just an interested individual, if you’re interested in supporting the effort, you can see the open items in the EIP-4844 readiness checklist or join our next community call.

Coinbase logo