Dom, aka Domothy, is a researcher at the Ethereum Foundation who is working on the research and development of some key Ethereum protocol upgrades like EIP4844, danksharding, and MEV Burn. We last had Dom on Bankless about that last one, MEV Burn, and this time we’re bringing him around to fully understand an incoming new property of Ethereum that EIP4844 is going to introduce… a new resource market… called BLOBspace…  kind of like Blockspace… but for Blobs!

What are blobs? What is Blobspace? How is it different from blockspace and blockspace markets? What will it do for Ethereum and its rollups? These are the questions we explore with Dom today. 

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✨ DEBRIEF | Ryan & David unpacking the episode:
https://www.bankless.com/debrief-blobspace

You know how we say blockchains sell blocks? Well, soon Ethereum’s going to be selling more than just blocks. It’s going to be selling blobs too. 

We’re just a few months out from the biggest Ethereum release since the merge and no one’s fully mapped out the implications. But it’s going to be huge. 

- Ethereum’s getting a new product to sell… it’s called Blobspace
- The cost of transacting on L2s is about to drop toward zero…
- The economics of ETH gas and the burn are about to change forever…

Blobspace, EIP4844, proto-danksharding…that’s what the geeks call this new ETH feature upgrade. 

This is everything you need to know about Blobspace with Ethereum Researcher Domothy in this absolute banger of an episode. 

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TIMESTAMPS

0:00 Intro
7:20 Why We’re Doing This Episode
8:45 Blobspace 
9:40 History of Blobspace 
11:30 Sharding & Dead Ends 
14:00 Execution Sharding 
16:50 Layers of a Blockchain
21:00 Ethereum Rollups 
22:50 Vitalik’s Thought Process 
26:10 Ethereum Development Hidden Genius
30:00 Current State of Ethereum 
34:00 What is a Blob?
39:25 Blobspace Explained 
44:20 Validator’s Perspective 
47:00 Data Availability vs. Storage 
56:31 User’s Perspective 
1:00:30 How a Blob Becomes a Blob
1:04:00 Properties of Full Danksharding 
1:05:20 New Math & Tech Behind Blobs? 
1:12:00 L2 Blobspace & Scaling Factors 
1:15:40 Blobspace Economics 
1:20:00 Block vs. Blobspace Balancing 
1:23:20 L2s Competing For Blobspace 
1:32:10 Ethereum Subsidiaries  
1:39:00 What’s Next?
1:41:30 Closing & Disclaimers

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RESOURCES

Domothy 
https://twitter.com/domothy 

Domothy article on Blobspace
https://domothy.com/blobspace/

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Not financial or tax advice. See our investment disclosures here:
https://www.bankless.com/disclosures⁠

Welcome to Bankless, where we explore the frontier of internet money and internet finance.

This is how to get started, how to get better, and how to front run the opportunity.

This is Ryan, Sean Adams, and I'm here with David Hoffman, and we're here

You know how we say blockchain sell blocks?

Well soon, Ethereum's going to be selling more than just blocks.

So we're just a few months out from the biggest Ethereum release since the merge, And I think no 1 has fully mapped out the implications of this, but it's going to be huge So a theorem is getting a new product to sell it's called blob space That is in addition to block space the cost of transactions on layer twos is about to drop towards 0 the economics of ETH gas and the burn are about to change forever.

We're calling this upgrade the Blob Space Upgrade, EIP-4844, Proto-Dank Sharding.

That's what the geeks are calling this new Ethereum feature upgrade.

And we want to cover today everything that you need to know about Blob Space and this coming Ethereum upgrade with Ethereum researcher, Domothy.

And this is an absolute banger of an episode.

I couldn't be more proud to present this to the bankless nation.

Number 1, we go through what is Blob Space?

Number 2, we go through the history, how we actually got here, this roll-up-centric roadmap.

What does this mean for Ethereum's economics, for ETH value accrual, for ETH the asset?

David, why was this episode significant to you?

I think if there's any sector of conversation that you and I really just love, it is the intersection of cryptography and economics.

Like numbers and economic manifestations on

So, I mean, we've talked about EIP-4844, we've talked about proto-dink sharding, those are the same things.

We've defined it a handful of times in a number of different capacities.

We've never done the aggressive headfirst dive down the rabbit hole and come out the other side of Economics so like we have technically scaled data availability at a technical level that is a protocol improvement But how does that connect to the markets side of Ethereum?

The 2 marketplaces, the 1 marketplace that are now being fractured into 2, block space and blob space are now 2 different independent markets that are being contained each inside of an Ethereum block.

What does that mean for the marketplaces that arise around these things?

How does the equilibrium of the supply and demand of each push and pull on each other?

What does this do for layer 2 scalability?

What does this do for economic use cases on top of layer twos.

How does demand for layer 1 change the demand for layer 2?

There's so many good stuff at the bottom of this conversation.

We're gonna start with the basics, the ones that bank listeners probably know all about 4-8-4-4 just to lay the groundwork.

But then we're gonna poke out the other end of the rabbit hole into the economic side of this conversation, which I don't know if many people have even had before.

Other than back channels and Harvard DMs and speculation.

Yeah, going through the implications is perhaps my favorite part.

And this is 1 of my favorite types of episodes that we do because it's both frontier and imminent.

I mean, we're just talking months away from this upgrade.

It's very relevant to our here and now lives.

This is the stuff we get to look forward to.

So guys, we're going to get right to the episode with Domothy, but first we disclose.

There's always a link to all bankless disclosures in the show notes.

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Bankless Nation, we are excited to introduce you once again to Dom, also known as Domothy.

He is a researcher at the Ethereum Foundation.

He's working on research and development of some key Ethereum upgrades that are coming down the pipe, including EIP 4844.

Also full Dank Sharding and also MEV Burn.

We last had Dom on the podcast, in fact, to talk about MEVBurn, and this time we're bringing him on to describe this new property that Ethereum will get post-EIP-4844, and that is Blobspace.

If you've not heard about Blob Space, you don't know what this means, this is the episode for you.

We're going to take you through the 101 of Blob Space and get all the way to the 400s level.

All right, so we're going to get into what Blobs are, Blob Space, how it's different from Block Space.

And I think we want to do that in kind of 3 different sections here.

We're going to talk about how we got here and why roll-ups are really going first.

And then we'll get into the technical of what Blob Space actually is.

And then we can conclude with the economics, what all of this means.

I just want to give a quick TLDR at the very beginning of like why we're doing this episode, why it's important, and I think there's probably 3 reasons.

Number 1, Blob Space is a new resource on Ethereum, okay?

And I think, we think, that this will be as important a resource as Blockspace.

Number 2, Blobspace makes rollups really, really cheap and scalable.

And that's going to change everything we know about the Ethereum ecosystem.

And number 3, Blobspace is coming, like possibly this year.

Of course, we don't have firm dates from the Ethereum core developers, but that might be a consensus bet.

And once it does, it's going to reshape just about everything economically, structurally about Ethereum.

So that's why we're doing this episode right now and why it's timely.

ask a very simple question is to understand Blob Space?

Is Blob Space just block space for Layer 2s?

All the data that Layer 2s need to commit on-chain are going to go into these blobs, which is the new resources, Ryan said, into Layer 1.

And the Layer 1 doesn't know what's inside these blobs, it's just there to prove that Layer 2 committed it so that no 1 can cheat.

Blob space is just block space for Layer 2s.

And right now, Layer 2s are actually using Ethereum block space instead of blob space.

And what we're doing with this new upgrade, EIP-4844, is we're partitioning off this new resource called blob space, and we're making that cheap and very available for rollups.

And so now they can start consuming more blob space than they do block space.

So Dom, in order to fully understand how we got here, how we got to blob space, I think it's worthwhile going back into memory lane to understand the fullness of the Ethereum roadmap because it came to a very logical conclusion of Blobs and Blob Space.

So maybe we can go back in time because at 1 point in time, Ethereum's roll-up-centric roadmap was not a thing.

We had this thing called execution charting, which we never actually got, but we kind of are now.

And can you take us back to wherever in the history of Ethereum's roadmap is appropriate to really understand the full context of Blob Space?

Yeah, so in the research space, it was always assumed that the solution to scaling a blockchain was going to be some form of sharding in 1 way or another.

And back when we were at proof of work, it didn't really work to split the blockchain into 64 or

or whatever power of 2 number of mini blockchains because each blockchain would have like 1 a very small fraction of the overall security so the plan was always proof of stake first and then we do this magical split into mini blockchains that run in parallel, where each validator is like randomly shuffled.

That was basically the the general idea for execution charting to flip the trilemma of scalability on its head where instead of being limited by the lowest requirement node on the network, now you would have more nodes equal more scalability, which is what we're going to see.

So that's pretty much the research goal was to get to sharding.

And then we had more research discovery along the way, but that was the the earliest design to get sharding.

So, so, Dom, when you say sharding, that's basically just like splitting Ethereum into different pieces, right?

This is a concept that already exists in computer science or database management.

Basically it's sharded as in it's a lot of smaller shards of the blockchain get much more scalability in parallel.

So this is the, that was the goal, but it turns out it's pretty, it's pretty hard to do that safely with execution charting.

And it's a, it was a very debated area of research until rollups came.

Yeah, I was going to ask you and this is by the way, we're going to memory lane.

Yeah, like that was around the timeline, where we sort of discovered that, oh, sharding in this way, full execution layer sharding, is going to be really hard.

And it might overly complicate the protocol.

And so there was a lot of like, I felt anyway, as not not an Ethereum researcher, but like an Ethereum, I don't know, advocate user, like investor, it felt a little bit sad and hopeless back in 2019.

This technology that we hoped would be possible, scaling blockchains was never going to happen because there were all of these dead ends.

Can you describe what the dead ends actually were?

It was a very big upgrade that was planned.

If you remember around 2019, that was the ETH 2.0 slogan where the goal was to have 1 big upgrade with proof of stake, with sharding, with everything along.

We were going to go from like the stone age of Ethereum to sci-fi Ethereum in 1 single upgrade.

We were going to get all the upgrades that we've gotten in the last like 4 years at once.

Yeah, so 1 big jump and it turns out that's hard to do.

lot of complexity involved and it was split up into different phases.

And then we said, okay, first we're going to launch a vegan chain, then we're going to figure out how to actually merge it with the current execution layer.

And then we're going to do phase 1, which is just data sharding.

So no execution, just All these smaller blockchains, they're just going to contain data.

And then we're going to figure out how to do execution charting.

So it was a lot of let's figure it out as we go, but also in a safe way, so we don't do something we regret later and then break the whole blockchain, because there's a lot of economic activity going on on it.

I want to keep on going and defining execution sharding just because once you understand execution sharding, the current roadmap of Ethereum, the rollup-centric roadmap of Ethereum is placed into even better context, I think.

And so a quote from your article Dom that you wrote is that sharding execution sharding the original plan for sharding of Ethereum and I and I did like how you said that we were going to get to sharding 1 way or another We just didn't know how we were going to do it.

We knew sharding was the answer We thought originally a theory in the roadmap was like, okay execution sharding turns out that we that was a dead end and we picked a different path, still ended up getting to sharding, a different flavor of sharding, which we'll get to.

But in the beginning, you wrote this article, this line in your article about execution sharding and the technical details about it.

And you said, sharding is the shuffling of validators, the Ethereum beacon chain layer 1 validators that we know today.

Shuffling validators randomly across distinct shards of the blockchain, Each shard essentially being its own mini blockchain running in parallel to the beacon chain Which sounds a little bit like what we have today with roll ups But the difference here is that the shards of aetherium are actually a part of the layer 1 protocol It's like something that has been in my mind lately is like the relationship that a chain has with its own infrastructure.

And so execution charting to me is like state-sponsored charts, as in the protocol, the layer 1 protocol actually determines what the shards are.

And that stands in contrast to the rollup-centric roadmap that we have today.

But really, to me, execution sharding is, first we started with 64 with a planned upgrade to 1, 048 shards.

But it was the Ethereum layer 1 was going to be all 64 of these shards operated and managed and produced by the Ethereum layer 1 protocol.

And that was where that's where we started.

So I would say that the way we're getting execution sharding this way is more indirect with rollups and data sharding, but it's kind of like a cheat code from a research perspective because Ethereum Lera 1 has much fewer things to do and worry about and then the rest is offloaded to rollups, which is in my view better than the original plan, like you said, state-sponsored shards where everything is the same.

It's the same blockchain, same EVM, same trade-offs about everything, which was imposed on users.

And now instead of that, you can have roll-ups competing against each other to get the best environment, the better trade-offs.

Like if you personally prefer like super speed over super security, then you can go on a different rollup and you have more choices and there's more innovation and competition at layer 2.

There's so much, I guess, to unlock here.

And there's a lot of, I know we're trying to explain blob space at the 101 level, but there's so much kind of like, I guess, stacked knowledge that it feels almost necessary to explain going into this episode.

We have a ton of resources at Bankless to explain these various topics.

But 1 I just want to touch upon is the 3 different layers of a blockchain and kind of this modular world that Ethereum is in.

There's the consensus layer, and this will be a recap for some bankless listeners, but there's the consensus layer, there's the data availability layer, and then there's the execution layer.

With Ethereum mainnet, by the way, all 3 of these layers are kind of, you know, combined in the same thing.

The consensus layer is arguably what a blockchain should really be focused on doing, figuring out what's true in the most decentralized, you know, corruption resistant way possible.

Which is true being the order of the blocks.

Exactly, the order of the blocks, exactly.

The next layer out is the data availability layer.

And that, you know, my rough approximation of what that is, is what's happened.

So you've got what's true consensus, what's happened, that's kind of like the data layer of a blockchain like Ethereum.

And then you have the outside layer, which is kind of where all the activity is.

And the original Ethereum 1.0, let's call it, combined all of those 3 things on mainchain in just 1 environment, couldn't be parallelized.

And now what we're doing with rollups, the rollup-centric roadmap with Ethereum, is we are, I guess, sharding out.

I'm resistant to using that word, but maybe increasingly we will kind of use that word, sharding out execution from the main chain into these rollups.

But The rollups, in order for them to be still secured fully with the similar security guarantees as Ethereum mainnet, have to post their data, that is what's happened, back to the Ethereum mainnet in order to get the consensus benefits and the data benefits.

And it costs kind of a lot of money relative to what they're doing.

and what we're calling proto-danksharding, the reason for this whole discussion is the economics change post this update in a very roll-up favorable way.

But anyway, Important for us to know that when we're talking about consensus and data layer and execution, all 3 of those are kind of separate layers in this new Ethereum paradigm that we're moving towards.

Dom, David, do you guys have anything to add there?

I would say you got it pretty much correct.

I'll just insist more on the certain point is that data availability right now is more implicit and it boils down to trustless verification, right?

We want everyone to be able to verify the chain by themselves and not have to have a trust me bro third party in the middle, which right now this is the bottleneck, right, you need to be able to verify everything, which implicitly means you need to have the data available to you to check the state transitions and execute the transactions so that anyone who sends you money, then you can verify that it's legit and they really did send you that money and it's not like on some other worthless fork or something.

So the rollups post the Ethereum data availability layer so that it's not a trust me bro type of situation.

What does that mean for a user inside of a rollup?

Does it mean they always have a way to withdraw their assets from the rollups?

Or like what kind of certainty, security does that give them?

Yeah, so at its core, we say that rollups inherit the security of L1, which is a very quick tagline for rollups.

And the way it works is you have the layer 1 contract that bridges asset between Ethereum and rollups.

And this ideally this smart contract can and should in the future all be immutable and not upgradable.

And which is why layer 1 is going to enforce some constraint on what these layer 2 block blockchains can commit to layer 1 and so that they can't steal assets and if they censor then you can still rely on the layer 1 contract to enforce like withdrawing your asset or forcing a transaction to go through on layer 2.

This is why by the way I think Dankrad said recently that his definition of an Ethereum rollup is a rollup that posts its data on Ethereum.

And if it doesn't do that, then it's something else.

Maybe we use the term Validium or something else for that.

Do you subscribe to that way of defining an Ethereum rollup, Dom?

He actually said this about Layer 2, not rollups.

He says Layer 2 are rollups and there's no other, there is no layer 2 thing that isn't a rollup according to Dankrad.

And he means that as in, like you mentioned, Valadiums that have data availability of chain not enforced by Ethereum.

And Once you leave this Ethereum bubble of security, then you have more trust assumptions regarding the data availability, which leads to a sort of semi-trust me bro situation.

If you want to exit your assets, then you need to get the data from somewhere.

And if it's not Ethereum itself, it's going to be someone else.

And you have to rely on them to give you that data.

Not only do you have to rely on them, but you also have to rely on the mechanism.

So you could post your data on Bitcoin if you wanted to.

But then you need to trust whoever's facilitating that relationship.

And so, just wanted to add that nuance there.

There's another quote in your article, Dom, from Metallic that I'm hoping you can kind of put us into the shoes of, tall order, I know.

The quote that you put in there is it seems very plausible to me that when full execution Sharding finally comes essentially no 1 will care about it Everyone will have already adapted to a roll up centric world whether we like it or not and by that point it will be easier to continue down that path than try to bring everyone back to the base chain for no clear benefit and a 20-100x reduction in scalability.

Basically we could do the complex thing in scale at layer 1 execution but All that would really achieve is that rollup sequencers would be like, oh cool, more data, and then barely touch the execution that we took so long to shard.

This is Vitalik saying that Ethereum layer 1 was always destined to only ever be for settlements even if we sharded layer 1 execution anyways.

Can you kind of just put us through this, the thought process of Vitalik?

Why did we know that even if we did do execution sharding of the layer 1, that we would still ultimately end up at the rollup-centric roadmap anyways?

The idea is that rollups can afford to do sacrifices that layer 1 can't do, because layer 1 enforces constraints on layer 2 with the bridge contract that I mentioned earlier.

So it's something that we can't just achieve this scale and the order of magnitude that rollups can, even if we shard execution at layer 1.

And the quote about Vitalik is that we're going to spend so much time doing execution sharding and it's not going to matter because rollups are still going to be much more scalable.

And even if we do scale execution, that also means scaling data, because like I said earlier, to check execution, you need to have the data.

So scaling execution implies scaling data, but not the other way around.

So to get back into context, scaling layer 1 just means it scales layer 2 exponentially.

So whether we want it or not, rollups are here and they're going to be much more scalable than layer 1.

So the pragmatic thing to do is to just go down that path and work with rollups rather than like try to be some kind of layer 1 maximalist that said, no, you stay on my modular, my monolithic chain that I spend so much time sharding.

Everyone's going to say, why it's so much faster on layer 2.

Isn't this related to the dynamic I was talking about earlier where execution sharding is like the state-sponsored version of sharding where every single shard is totally homogenous?

See all Bankless transcripts on Youtube

The Next Ethereum Upgrade: Blobspace 101 with Domothy