For years, one of the Ethereum blockchain's most significant failings has been the astronomically high gas fees. There have been multiple attempts to resolve or (on the part of users) evade this issue. These efforts include layer-2 scaling solutions to simple hacks with timing and the much-discussed Ethereum 2.0 update dubbed Serenity.

However, the developments mentioned above will not be this article's focal point. Instead, we'll look at EIP-4488, an Ethereum Improvement Proposal designed to reduce transaction costs on layer two scaling solutions. Ethereum founder Vitalik Buterin authored the proposal alongside network dev Ansgar Dietrichs.

The pair came up with the update as a short-term fix ahead of more comprehensive answers to the high fees. Let's review all the details of Ethereum's long-running problem before we dive into how exactly EIP-4488 can help.

Keywords: Ethereum, EIP-4488, Proposal, Gas fees

Gas Fees; The Ethereum Blockchain's Prolonged Battle

Critics and competitors often cite the expensive nature of transactions as Ethereum's Achilles heel. "Ethereum killers" offer cheaper fees to give themselves an edge over the world's go-to smart contract platform. Of course, this raises questions on the issue's roots: what exactly are these gas fees, and why are Ethereum's so high?

Ethereum charges users fees to carry out transactions and other operations on its network, and these charges are called gas. It's crucial to keep in mind two things: the first is that transactions incur varying costs based on their complexity; that is, it would take more gas to transfer ERC tokens than just to send ETH. The other point to be aware of is that each block on the network has a gas limit.

The gas limit can change depending on several factors, and due to this, at a particular point in time, not all transactions end up on the same block. The gas fees determine who gets in a blockspace; miners will first verify a transaction with the highest gas fee (reward). Other operations are put on hold until later blocks come along, and they might not be processed at all.

This process explains Ethereum's expensive fees; as the most popular network, it attracts a lot of users. These individuals are all vying (with their gas fees) to get a spot on the limited blockpace. Thus, if several transactions are conducted simultaneously, the gas costs are guaranteed to soar, leading users to pay hundreds of dollars for a single transaction. Furthermore, if the gas fees an individual pays during rush hours are inadequate, their transaction will fail, and the network will still deduct the gas.

How has this Affected the Ethereum Network?

There are two major ways in which the high gas fees have affected Ethereum overall, and they mostly have to do with user perception.

Some believe the expensive nature of the network means it is the best available. Ethereum's current popularity due to its focus on decentralization makes it seem like a hotpot as a smart contract platform. Many users don't mind the exorbitant fees if they gain access to what they perceive as premium services in return.

The negative aspect of the gas fees is the exact opposite of the "positive" side of the situation. Users are more likely to defect to other platforms where they can use similar services at cheaper rates. If the issue draws on longer and the gas fees run even higher, Ethereum killers might just actually assume the name. The chances are slim, though, as Ethereum users have demonstrated an unparalleled level of loyalty since the network saw gas price break through the roof in 2017 when Cryptokitties shot up in popularity. 2021's NFT craze also drew new users to Ethereum, causing the network to become congested, leading to exorbitant gas prices. Regardless, users have remained.

Details of EIP-4488

Buterin and Dietrichs introduced EIP-4488 in November 2021; they called the proposal "Transaction calldata gas cost reduction with total calldata limit." EIP-4488 does two things to reduce gas fees, the first of which is decreasing the transaction calldata cost.

Source;Github/Ethereum/EIPs

As stated earlier, EIP-4488 focuses exclusively on reducing gas fees for Layer-2 rollups such as Optimism, Arbitrum, and ZKSync. These solutions essentially "rollup" transaction data; they compress user transactions and submit them in bulk to validators via calldata. Calldata is a read-only byte-addressable region that retains the data provisions of an operation. The process can be viewed as outsourcing the bulk of the data and returning only the minimum information to the miners. This helps speed up transaction verification and brings down prices as less data is added to the network mainnet, and the gas fee is divided between the users who conduct the compressed transactions.

EIP 4488 first imposes a limit on the transaction calldata that can be added to a block and then reduces the cost of the calldata to eliminate the chances of inducing network instability. This drives down the fees users have to pay, and according to its creators, the proposal pulls this off without lowering the network's security. The upgrade will work to bring transaction costs 3-8 times lower than on the Ethereum base layer; ZK rollups would be significantly lower, bringing the cost down 40x-100x.

Community Concerns; How EIP-4488 Affects Users and Devs

Besides the obvious advantages for users, such as the reduced gas fees on rollups, EIP-4488 does have other effects. One risk to users is the likelihood that they might encounter the original problem; users may have to pay higher gas fees bidding for the same call data space.

During the community discussion, questions arose as to why they could not simply cut the rollup costs. However, the Ethereum founder explained that just dropping the call data gas cost from 16 to 3 could expand the maximum block size to 10M bytes. Larger blocks could cause problems in the long run and even in the foreseeable future. The proposal could cause the Ethereum blockchain to grow 5x faster than its current rate, rising from 0.1Mb to 0.5Mb per block.

Buterin pointed out that such a move would cause "unprecedented levels of strain" and possibly break the network. Additionally, community members noted that Ethereum users gunning to become validators could be hindered by the need for better hardware which the expanded block sizes could call for.

Source;Github/Ethereum/EIPs

However, Vitalik further clarified that increasing the data space for rollups was feasible because the pertinent solutions were unlikely to take over Ethereum anytime soon. Hence an expansion to 1.5MB would suffice for the meantime and keep the security risk at bay. Devs at large seem satisfied with the proposal; one Ethereum user took to Twitter to enthusiastically express their support and explain EIP-4488.

Source; Twitter@protolambda

Conclusion

It is essential to remember that EIP-4488 is a temporary solution; Vitalik himself pointed this out. The proposal is only applicable in the short term and hence is perfect for filling in while the team comes out with more-efficient strategies and, most importantly, the Serenity update.

The network's long-anticipated transition to proof-of-stake has been a long time coming but is well worth the wait as it will likely resolve the entire issue. The best tactic is to hang in there and maybe use a rollup.

Author: Gate.io Observer: M. Olatunji

Disclaimer:

* This article represents only the views of the observers and does not constitute any investment suggestions.

*Gate.io reserves all rights to this article. Reposting of the article will be permitted, provided Gate.io is referenced. In all other cases, legal action will be taken due to copyright infringement.