Metaversal is a Bankless newsletter for weekly level-ups on NFTs and the onchain frontier
Dear Bankless Nation,
It’s not every day that one of the biggest blockchains in the world undergoes a major evolution.
That’s why all eyes are on Ethereum right now, as the leading smart contract platform is undergoing a huge upgrade next week that will intro an unprecedented mechanism: blobspace.
The arrival of blobs on Ethereum is set to usher in the first golden age of Layer 2 (L2) scaling solutions, which in turn can kick off a revolution in how builders and users approach NFTs.
For today’s post, let’s run back a quick refresher on EIP-4844 and blobspace and some things to keep an eye on here going forward!
-WMP
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The 101: The upcoming Cancun-Deneb, a.k.a. Dencun, hard fork upgrade, set for deployment on Ethereum on March 13th, 2024, heralds the network’s shift into its Surge era, which is aimed at doubling down on improving scalability.
At the heart of Dencun is the introduction of EIP-4844, which will actualize proto-danksharding, i.e. blobspace, a groundbreaking innovation designed to help Ethereum’s L2 ecosystem march toward 100,000 transactions per second (TPS).
Why it matters: Blobspace is poised to revolutionize the Ethereum ecosystem by significantly lowering gas fees. This gas reduction is particularly critical for Ethereum L2 solutions and will make transactions on them drastically more affordable, thereby supporting their growth and increasing their appeal to a wider user base.
How blobspace works: At its core, blobspace introduces a new method of handling transaction data through blobs, which are temporary chunks of transaction data stored efficiently on the blockchain.
This system departs from traditional block storage, utilizing a separate pricing mechanism known as “blob gas” that is independent of Ethereum’s main gas market.
Blobs are created by splitting data into smaller pieces, which are then mathematically transformed into a unique identifier for storage and later retrieval. This process not only optimizes data storage on the blockchain but also ensures transactions can be processed more swiftly and cost-effectively.
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What happens next: With the Dencun upgrade’s implementation, Ethereum L2s will need to manually integrate this new tech to reap the benefits. Optimism, for example, plans to launch its Ecotone upgrade closely following Dencun’s deployment to enact blobspace in its Superchain ecosystem, e.g. on Optimism, Base, Zora Network, etc.
While complete integration work may take several months across all the various L2 platforms, the overall expectation is for swift adoption throughout the Ethereum ecosystem, thus beginning a new era of efficiency and scalability for the leading smart contract network.
Estimating the savings: The Optimism community has developed the Superchain Savings Estimator, a tool designed to preview the potential reductions in gas costs on Optimism’s Superchain L2s following the adoption of blobspace.
With this tool, examples like swapping on Uniswap on Base or minting Zora NFTs on Zora demonstrate a dramatic drop in transaction fees—in some cases, up to 98%. Some explicit examples, based on average recent Superchain transaction assumptions, are as follows:
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Previous Cost: $0.5822
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Estimated Cost: $0.0106
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Percentage Drop: 98.18%
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Previous Cost: $0.3013
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Estimated Cost: $0.0061
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Percentage Drop: 97.98%
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Previous Cost: $0.2032
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Estimated Cost: $0.0128
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Percentage Drop: 93.70%
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Previous Cost: $0.1476
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Estimated Cost: $0.0037
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Percentage Drop: 97.49%
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Previous Cost: $0.1758
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Estimated Cost: $0.0037
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Percentage Drop: 97.90%
An NFT revolution: Blobspace is set to revolutionize the NFT ecosystem by drastically reducing gas costs associated with NFT activities on L2s. This change paves the way for projects to potentially cover all transaction costs for their users, similar to practices around server costs in Web2 platforms.
Additionally, the lower fees will foster the development of new applications and cross-pollinations within the NFT app scene space that were previously unfeasible due to cost constraints, and this should lead to an explosion of new NFT innovations over time.
“Cheaper, faster transactions are absolutely critical for continuing to enable innovation and unlocking nascent use cases—such as onchain gaming and closed limit order book exchanges,” the Base team just noted. “They will also make it more practical to apply developing ideas from the rapidly advancing fields of cryptography and AI within onchain apps, leading to entirely new application classes yet to be conceived.”
Of course, beyond cost savings, blobspace will also open up a new design space for NFTs, from storage use cases to creating “headless” NFT marketplaces that exist entirely within blobs. New paradigms here are just around the corner accordingly!
NFT quests: If you’re like me, once L2s start integrating with the Dencun upgrade you’ll be keen to try some apps around the ecosystem to see for yourself just how big the gas savings are. Some activities I plan to experiment with, and that you might want to explore too, include:
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🔑 Buying and selling friend.tech keys (Base)
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📝 Collecting or publishing writing NFTs on Mirror (Base, Linea, OP, Zora Network)
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🎴 Creating a free mint drop on Zora (Arbitrum, Base, Blast, OP, Zora Network)
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🎉 Minting a trending NFT on mint.fun (OP, Base, Zora Network)
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🧹 Sweeping or pooling NFTs on sudoswap (Arbitrum, Base)
Note, there will also be some commemorative mints dropping next to celebrate the arrival of blobspace. For instance, I’m excited to collect Delivery at Dawn, a short film NFT created as a collaboration between Nouns, Line, and Stateful Works, with proceeds going to Protocol Guild to reward Ethereum core contributors. That’s just one example, so get ready for more mints!
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Not financial or tax advice. This newsletter is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This newsletter is not tax advice. Talk to your accountant. Do your own research.
Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here.
