Ethereum Improvement Proposals (EIPs) are documents that provide information to the Ethereum community with the goal of improving the Ethereum network.
Ethereum is one of the fastest-growing crypto projects in existence. Launched in 2014, its popularity grew twice as fast as Bitcoin’s, and it quickly became the go-to blockchain network for deploying decentralized finance (DeFi) protocols and smart contracts.
Over the years, Ethereum has undergone several upgrades, primarily transitioning from a Proof-of-Work to a Proof-of-Stake consensus mechanism.
However, the evolution of the network is not over yet, as developers are still working on new upgrades. This is where EIPs come in; they play a central role in proposing changes and improvements to the Ethereum network, guiding updates and decisions on the blockchain.
The Merge, Surge, Verge, Purge, And Splurge
The evolution of the Ethereum network after the transition from the Proof of Stake can be summarized into these five stages: Merge, Surge, verge, Purge, and Splurge. It is within these phases that the EIPs fall.
- The Merge – Ethereum is transitioning from Proof of Work to Proof of Stake
- The Splurge – Post-Merge, Ethereum adopts Proposal-Builder Separation, combining centralized block production and decentralized block verification.
- The Surge – Introduction of danksharding, designed to counteract MEV, also serves data sharding purposes.
- The Verge and Purge – Shrinking Ethereum state and storage using proto-danksharding’s pruning of historical data to avoid excessive growth, resulting in stateless Ethereum
Ethereum Improvement Proposals to Watch For in 2024
The largest Ethereum upgrade this year will be the Dencun hard fork upgrade. The hard fork is slated for Q1 2024, and given that no obstacles popup, public testnet:
- Goerli: January 17
- Sepolia: January 30
- Holesky: February 7
Before we delve into the Ethereum Improvement Proposals that developers are working on, it is important to know that the EIPs are not worked on chronologically. For instance, EIP 1559, necessary for the last phase of the Ethereum evolution (the Splurge), was introduced long ago and already exists.
Here are Ethereum improvement proposals to look forward to in 2024.
1. Proto-Danksharding Implementation (EIP-4844)
EIP 4844 (AKA proto-danksharding) was introduced by Vitalik Buterin and Dankrad Feist. Danksharding is a form of sharding for Ethereum, spreading processing power horizontally. The proposal suggests using a single validator for transactions for a blob, reducing gas fees.
EIP 4844 specification is already done and has passed the prototype stage. In 2024, we can look forward to seeing danksharding implemented.
Expected impact: up to 1000X reduced gas fees for L2 rollups like Arbitrum and Optimism, Faster implementation and deployment, and manageable network disk space use.
2. PeerDAS (EIP-7594)
PeerDAS is a proposed network structure aiming to achieve a greater DA scale using battle-tested p2p components from Ethereum. With PeerDAS, the Ethereum network will take on a simpler structure.
EIP 7594 will lead to the adjustment of data size, total nodes, minimum work for honest nodes, and node capacities. The reconfiguration of these parameters will lead to data availability scaling on the Ethereum network.
3. Data Pruning Implementation (EIP-4444)
Authored and proposed by George Kadianakis, lightclient, Alex Stokes. The EIP seeks to give Ethereum execution clients the power to prune historical data on the p2p layer locally over one year.
George and his team found that Historical blocks and receipts occupied over 400GB of disk space, and pruning would reduce the disk requirements.
EIP 4444 implementation would change the data extraction process from the blockchain and potentially impact how blockchain queries and indexing protocols like the Graph work.
4. Account Abstraction (ERC-4337)
ERC 4337, originally EIP 4337, introduces account abstraction for flexible blockchain interaction and enables the democratization of blockchain. With the implementation of this proposal, users can interact without worrying about private keys.
The impact will foster the rapid onboarding of non-crypto users to Web3. ERC 4337 introduces gasless transactions using tokens instead of ETH, enhanced security through transaction signature separation, improved scalability and social wallet recovery features
5. Base Fee Endgame (EIP-1559)
Ethereum Improvement Proposal EIP-1559 changes Ethereum’s fee market and monetary policy. It replaces the first-price auction with a base and priority fee (tip). The base fee burned, tip, and block reward go to miners.
EIP-1559 may reduce gas prices due to fee predictability. Furthermore, burning base fees may make ETH deflationary.
6. Execution Layer Triggerable Exits (EIP 7002)
Created in September 2023, EIP 7002 adds a stateful precompile for validators to trigger exits using execution layer withdrawal credentials. This EIP will protect honest validators and users by returning excess fee payments to the contract caller (user) and control stability by adjusting fees exponentially.
EIP 7002 re
7. Beacon Block Root Commits (EIP-4788)
EIP 4788 seeks to integrate Beacon Block Root into each Ethereum Virtual Machine block. If Ethereum were a large library with two sections, Ethereum Virtual Machine would be the reading room, and the Beacon Chain would be the library’s catalog system.
This enhances alignment between EVM and Beacon Chain, improving security and operational efficiency.