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Why You Should Care About Data Availability

In this post:

  • Binance Research just released a report about DA, explaining the concept and how it affects L2 rollups.
  • The report shows why the Data Availability issue is so important despite receiving close to no attention from the crypto community.
  • Admittedly, the Data availability issue most affects L2 rollup teams, as it exactly a visible problem to the general public. 

So, before we get our hands dirty, what exactly is Data Availability in blockchain technology? The term actually sounds quite self-explanatory if you ask me, but frankly, the term is a lot more technical, even for the average blockchain and crypto user. 

Data availability is primarily a developer-centric concept, as rollup developers are mostly the ones in constant interaction with the DA layer. Since blockchain end users typically do not interact with transaction data, it’s normal for them not to care about how their data is handled. A typical case in point is how users barely have control over how much of their data can be used by big tech companies in the Web 2 space, like the giant social media platforms. 

So, what exactly is Data Availability, and how important is it to the end user, rollup developers, and blockchain nerds in general? To have a better understanding, we’ll have to dive deep into the Ethereum Dencun hard fork that went live on March 13th this year. 

Data Availability Explained in Simple Terms

In all blockchain systems, the Data Availability or the DA layer ensures that transaction data is systematically made available on-chain. In quite literal terms, the word appears to be quite self-explanatory, until we involve the term Data Retrievability. DA is not the same as Data Retrievability in the sense that DA only refers to the “confidence a user can have that the data required to verify a current block is truly available to all network participants.”

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The strong confidence that the required data is truly available to all network participants for verification is not synonymous with the typical historical database on blockchains. 

Ethereum’s Dencun Upgrade and EIP-4844 were primarily focused on solving the DA problem by including a new transaction type known as the blob-carrying transaction. 

You see, the blob-carrying transactions have this unique feature where it incorporates an additional piece of information called a blob. The blob-carrying transactions are never executed on the EVM; instead, they are executed in the consensus layer. 

The blob allows users to temporarily solve the data availability problem without overloading the Ethereum L1 block space.

Below is a clear distinction between the blob-carrying transactions update and the Ethereum L1 block space previously. 

FeatureEthereum L1 block spaceEIP-4844 blob space
Seen by all nodes?YesYes
How Long is data storedPermanently(forever)Approx – 18 days
Visible to EVMYesYes
Gas MarketMain Ethereum L1 gas marketSeparate blob gas market
Data Sourced from Binance Research Report

According to Binance reports, the impacts have been felt mainly by L2 Rollups. Their transaction fees have decreased by 50-95%, and similarly, the cost of posting data to Ethereum has seen an average decrease of 72% across the top Ethereum L2s. 

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Data Courtesy of Dune Analytics (@21co), Binance Research, as of April 9, 2024.

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Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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