Ethereum has emerged as the leading platform for decentralized applications, smart contracts, and digital assets. However, as adoption grows, so do the challenges of scalability, transaction speed, and cost. To meet increasing demand while maintaining security and decentralization, Ethereum relies on layer 2 scaling solutions, commonly known as rollups. These innovations are transforming how transactions are processed, making Ethereum faster and more affordable for everyday users.
This article explores the evolution of Ethereum scaling—from current rollup technologies to upcoming upgrades like Proto-Danksharding and Danksharding—and how they’re paving the way for ultra-low-cost transactions. We’ll also examine efforts to decentralize rollup infrastructure, ensuring long-term resilience and trustlessness.
How Rollups Scale Ethereum
Rollups are layer 2 protocols that process transactions off the main Ethereum chain (layer 1), then bundle or "roll up" the results and post them back to Ethereum for final settlement. This reduces congestion on the main network and dramatically lowers fees.
There are two primary types of rollups:
- Optimistic rollups: Assume transactions are valid by default and allow challenges if fraud is detected.
- ZK-rollups: Use cryptographic proofs (zero-knowledge proofs) to instantly verify transaction validity.
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Despite their efficiency, today’s rollups still face limitations—particularly around data availability and centralization. Addressing these issues is key to unlocking Ethereum’s full potential.
Transaction Cost Reduction: The Road Ahead
While current rollups are already 5 to 20 times cheaper than transacting directly on Ethereum layer 1, future improvements promise even greater savings:
- ZK-rollups will reduce fees by an estimated 40–100x due to more efficient data compression and proof verification.
- The Proto-Danksharding upgrade enables temporary data storage via "blobs," slashing costs by reducing permanent on-chain data usage.
- Full Danksharding implementation could deliver another 100–1000x improvement in throughput.
Ultimately, users can expect Ethereum transactions to cost less than $0.001, making microtransactions, gaming, and global payments feasible at scale.
Making Data Storage Cheaper with Proto-Danksharding
One of the biggest contributors to transaction costs in rollups is data availability—ensuring that all transaction data is published so anyone can recompute the state and verify correctness.
Historically, this data was stored permanently on Ethereum’s main chain, which is secure but expensive. In fact, over 90% of rollup user fees go toward data storage costs.
Introducing Blob-Carrying Transactions
Proto-Danksharding solves this by introducing temporary blob storage. Instead of storing full transaction data permanently on-chain, rollups attach data to blocks in the form of “blobs” (binary large objects). These blobs:
- Are cheaper to store than regular calldata.
- Expire after approximately 18 days.
- Are pruned from nodes automatically once outdated.
This shift moves long-term data retention responsibility to parties that need it—such as rollup operators, exchanges, or indexing services—while keeping Ethereum secure and accessible.
Proto-Danksharding was successfully deployed as part of the Cancun-Deneb (Dencun) upgrade in March 2024. Since then, major rollups have adopted blob transactions, resulting in:
- Millions of transactions processed via blobs.
- Noticeable drops in user fees across popular layer 2 networks.
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The Future: Full Danksharding
Proto-Danksharding lays the foundation, but Danksharding represents the full vision: a highly scalable, decentralized data availability layer for Ethereum.
Key components of Danksharding include:
- Data Availability Sampling (DAS): Allows lightweight clients to verify that data is available by randomly sampling small portions of blob data. This ensures security without requiring every node to download all data.
- Proposer-Builder Separation (PBS): Decouples block construction from block proposal, preventing censorship and enabling specialized builders to create efficient blocks without compromising decentralization.
- Distributed block building: Encourages a competitive ecosystem of block builders, increasing resilience against centralization risks.
Together, these mechanisms allow Ethereum to handle vastly higher throughput—potentially supporting dozens of rollups simultaneously—while maintaining decentralization and security.
Development is ongoing, with active progress on prerequisites like PBS and peer-to-peer network enhancements to support efficient data propagation.
Decentralizing Rollup Infrastructure
While rollups have made Ethereum more scalable, many still rely on centralized components, creating potential points of failure.
Centralized Sequencers: A Temporary Trade-off
Most rollups today use a centralized sequencer—a single entity responsible for ordering and processing transactions before submitting them to Ethereum. While this improves performance during early stages, it introduces risks:
- Potential for censorship (e.g., blocking specific transactions).
- Vulnerability to regulatory pressure or technical outages.
The goal is to transition toward decentralized sequencing, where multiple participants share the responsibility using consensus mechanisms or fair ordering protocols.
Validity Proof Generation
Another area needing decentralization is proof generation in ZK-rollups. Currently, only a small set of trusted provers generate validity proofs. Expanding this to a broader, permissionless network of provers enhances security and reduces reliance on single entities.
Projects are exploring solutions like:
- Proof markets, where anyone can submit proofs competitively.
- Distributed proving networks using consumer-grade hardware.
These advancements ensure that no single party controls critical parts of the rollup stack.
Current Progress and Real-World Impact
The Dencun upgrade (March 2024) marked a turning point in Ethereum scaling. With Proto-Danksharding live:
- Layer 2 transaction costs have dropped significantly.
- Blob usage has surged across leading rollups like Arbitrum, Optimism, and Polygon zkEVM.
- User activity has increased, demonstrating strong demand for low-cost transactions.
Meanwhile, research and development continue on full Danksharding and decentralized sequencing models. Though timelines vary across projects, the direction is clear: a more scalable, open, and resilient Ethereum ecosystem.
Frequently Asked Questions (FAQ)
What is the difference between Proto-Danksharding and Danksharding?
Proto-Danksharding introduces temporary blob storage to reduce data costs—a stepping stone toward full Danksharding. Danksharding will implement advanced features like data availability sampling and distributed block building for maximum scalability and decentralization.
How do rollups reduce Ethereum transaction fees?
Rollups process transactions off-chain and submit compressed results to Ethereum. By batching many transactions into one, they minimize gas costs and reduce load on the main network.
Are rollups secure?
Yes—rollups inherit Ethereum’s security. They publish transaction data on-chain so anyone can verify or challenge incorrect results. ZK-rollups offer instant finality through cryptographic proofs; optimistic rollups allow fraud proofs within a challenge window.
Will Ethereum ever reach $0.001 transactions?
With Proto-Danksharding and future upgrades like full Danksharding, average transaction costs are expected to fall below $0.001—especially for simple transfers on layer 2 networks.
What are blobs in Ethereum?
Blobs are temporary data containers used to store rollup transaction data off the main execution chain. They expire after ~18 days, reducing long-term storage burden and lowering fees.
How does decentralization improve rollup security?
Decentralizing sequencers and provers removes single points of failure and censorship risk. It ensures no single entity can manipulate transaction order or suppress valid activity.
The journey to scale Ethereum is well underway. With rollups at the forefront and groundbreaking upgrades like Proto-Danksharding already live, the network is evolving into a high-performance, low-cost platform for global use. As decentralization advances and new technologies mature, Ethereum is poised to support billions of users—without sacrificing its core principles.
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