Author: Kairos Research, Translation: Golden Finance xiaozou
1. Introduction
Today, EigenDA is the largest re-staked capital and unique address AVS (Active Verification Service) operator, with over 3.64 million re-staked ETH and 70 million re-staked EIGEN from 245 operators and 127,000 unique address staking wallets, totaling approximately $9.1 billion in re-staked capital. With the launch of a large number of alternative data availability (DA) platforms, it is difficult to decipher the differences between them, their unique value propositions, and how the accumulation of protocol value changes. In this article, we will take a deep dive into EigenDA and explore the unique mechanisms of its design, while also taking an overview of the competitive landscape and analyzing potential developments in this market space.
2. Understand DA (Data Availability)
Before we dive into EigenDA, let's first take a look at the concept of data availability (DA) and its importance. Data availability refers to ensuring that all participants (nodes) in the network have access to all the necessary data needed to verify transactions and maintain the blockchain. DA is part of a typical monolithic architecture, and we've seen a lot of people write a lot about it - but in short, execution, consensus, and settlement all rely on DA. Without DA, the integrity of the blockchain will be fundamentally compromised.
The reliance of all other parts of the blockchain on DA creates a scaling bottleneck, which is why the L2 roadmap is here. With the launch of Optimistic rollup in 2019, the L2 future was born. L2 execution is performed off-chain, but still relies on Ethereum's DA to maintain Ethereum's security guarantees. With this paradigm shift, many people realize that the advantages of L2 may be further strengthened by building specific blockchains or focusing on various services that improve the limitations of the monolithic architecture DA layer.
While specific DA layers emerge, providing realistic opportunities for reducing fees through competition, and further experimentation, the DA problem is being addressed on Ethereum mainnet through a process called "Dank Sharding". The first part of Dank Sharding was implemented through EIP-4844, which introduced transactions that carry additional data blobs, up to 125 KB, that are submitted using KZG (a cryptographic commitment) to ensure data integrity and future compatibility with data availability sampling. Prior to the implementation of EIP-4844, rollups were published to Ethereum using calldata to publish rollup transaction data.
Since the Dancun upgrade launched the danksharding prototype in mid-March, 2.4 million blobs (total data size of 294 G) have paid L1 more than 1,700 ETH. It should be noted that the EVM cannot access the blob data, and the blob data will be automatically deleted after about 2 months. The current limit of blobs per block is 6, a total of 750 KB. If you are a non-technical reader, you need to know that if you reach the blobspace limit for three consecutive blocks, you will get the equivalent of a normal Gamecube storage card.
This limit is indeed hit multiple times per day, indicating high demand for Ethereum blobspace. While the Ethereum blob base fee is around $5 at the time of writing, we should be careful to note that this fee fluctuates with the price of ETH, as does most DeFi activity. Therefore, during times of rising ETH prices, there will be more activity, which in turn will lead to more demand for blobspace. Therefore, in order to be ready for more DeFi speculation, or to open up the network to unseen use cases, the costs of data availability must be reduced further. There is still ample incentive to reduce these costs further to encourage continued active user activity.
3. Working principle of EigenDA
EigenDA is based on a simple principle that data availability does not require independent consensus to solve, so EigenDA is designed to scale linearly in structure, and the main role of operators is to handle data storage. The EigenDA architecture has three main parts:
● Operators
● Disperse
● Retrievers
EigenDA Operators are parties or entities responsible for running the EigenDA node software, who register with EigenLayer and obtain staking authorization. You can think of them as node operators in traditional proof-of-stake networks. However, the role of these operators is to store blobs associated with valid storage requests without assuming consensus responsibilities. In this specific instance, a valid storage request is one where the fee is paid and the provided blob block is verified based on the provided KZG commitment and proof.
In short, KZG commitments allow you to link a block of data with a unique code (the commitment), and then use a special key (the proof) to prove that a given block of data is the original data. This ensures that the data has not been changed or tampered with, thus maintaining the integrity of the blob.
Disperser is referred to as an “untrusted” service in the EigenenDA documentation and is hosted by EigenLabs. Its main responsibility is to interface between EigenDA clients, operators, and contracts. The EigenDA client sends a dissemination request to the dispenser, which Reed-Solomon encodes the data to help with data recovery, then calculates the KZG commitment of the encoded blob and generates a KZG proof for each data block. After this, the disperser sends these data blocks, KZG commitments, and KZG proofs to the EigenDA operator, who then returns the signature. The disperser finally aggregates these signatures and uploads them to Ethereum in the form of calldata. It should be noted that this step is a necessary prerequisite for slashing operators who behave inappropriately.
The last core component of EigenDA, Retriver, is a service that requests blob blocks from the EigenDA operator, verifies that the blob blocks are accurate, and then reconstructs the original blob for the user. EigenDA can host the retriever service, and client rollups can also host their own retrievers as a sidecar for their sorter.
The following is the actual operation process of EigenDA:
● The Rollup sequencer sends a batch of transactions as a blob to the EigenDA’s disperser sidecar.
● EigenDA disperser sidecar erasure encodes blobs into data blocks, generates a KZG commitment and multi-reveal proof for each block, and sends the data blocks to the EigenDA operator to receive the storage proof signature.
● After aggregating the received signatures, the disperser registers the blob on-chain by sending a transaction to the EigenDA Manager contract with the aggregated signature and blob metadata.
● The EigenDA Manager contract uses the EigenDA Registry contract to verify the aggregate signature and store the result on the chain.
● Once the blob is stored off-chain and registered on-chain, the sequencer publishes the EigenDA blob ID in a transaction to its inbox contract. Blob ID length does not exceed 100 bytes.
● Before receiving a blob ID into the rollup inbox, the inbox contract asks the EigenDA Manager contract whether the blob is authorized for use. If so, the blob ID is allowed to enter the inbox contract. Otherwise, the blob ID will be discarded.
In simple terms, the sorter sends data to EigenDA, which splits the data into blocks, stores it, and checks whether the data is safe. If everything looks good, the data will be given a green light to move forward. If not, the data will be discarded.
4. Competition landscape
Looking at the competitive landscape of DA services more broadly, EigenDA has a clear advantage over other services in terms of throughput. As more operators join the network, the opportunity to scale potential throughput also increases. Furthermore, when considering which other DA service is most "Ethereum-aligned," it's not hard to see that EigenDA is the clear choice.
While Celestia has groundbreaking innovations in DAS, it is difficult to view it as completely consistent with ETH, and it is not mandatory, but it will definitely have an impact on clients' decisions about which service to use. Celestia also implements an interesting strategy in its light node architecture to support larger blocks, so more potential blobs can be included, but subject to certain restrictions.
Celestia has succeeded in reducing the operational costs of rollups and passing them on to end users. However, despite being a meaningful and impactful innovation, there has been little actual traction in terms of fee accumulation, despite a fully diluted valuation in the billions (~$5.5 billion at the time of writing). Celestia launched last Halloween, and since then, 20 rollups have integrated their DA service. These 20 rollups have published a total of 54.94 GB of blobspace data, supporting the protocol to collect 4,091 TIAs, worth about $21,000 at current prices. However, the accumulated fees are paid to stakeholders and validators, which is fair, and the price of TIAs has changed over time, reaching an all-time high of 19.87, so the actual amount may vary. Using secondary data, we can estimate that the total fees in USD are more likely to be around $35,000.
5. Current Rollup Landscape and EigenDA Positioning
EigenDA pricing was recently announced, and it has an "on-demand" option, as well as three different tiers. The on-demand option offers variable throughput at 0.015 ETH/GB, and "tier 1" is 256 KiB/s for 70 ETH. Looking at the current DA situation on the Ethereum mainnet, we can make some speculations about the potential demand for EigenDA and how much revenue this might generate for investors.
As it stands, there are about 27 rollups publishing blobs of data to Ethereum L1 using query data. After deploying EIP-4844, each blob published to Ethereum has 128kb of data. In these 27 rollups, about 2.4 million blobs were published, totaling 295 GB of data. So if all of these rollups are priced at 0.015 ETH/GB, that's 4.425 ETH.
At first glance, this may seem a bit problematic. However, it is important to note that rollups vary widely in terms of unique product offerings and architectures. Due to design differences and different user bases, the amount of blobs released and the fees paid to L1 vary greatly. For example, for the rollups in this article, this refers to the amount of blobs (GB) used by each rollup and the fees.
From this analysis alone, 6 rollups have crossed the relevant cost threshold, making them justify choosing EigenDA’s tier 1 pricing, but from a pure data throughput perspective, it doesn’t seem to make sense for them. In fact, using EigenDA’s on-demand pricing still reduces direct costs by an average of about 98.91%.
This therefore puts re-stakers and other ecosystem stakeholders in a dilemma. The cost reduction brought by EigenDA is good for both L2 and their users as it will bring more profits and revenue to L2, but this has not discouraged re-stakers who hope that EigenDA will become the AVS with the highest re-staking rewards.
However, another explanation is that the cost reduction of EigenDA spurs innovation. Throughout history, we have seen numerous examples where cost reductions have been key growth catalysts. For example, the Bessam steelmaking process in the history of steel was an innovation that significantly reduced the cost and time of steel production, enabling the mass production of stronger, higher quality steel at an 82% cost reduction. One could argue that similar principles apply to DA services, and that the introduction of multiple DA service providers not only significantly reduced costs (reinforced by competition), but also inherently spurred innovation, allowing more high-throughput rollups to be released, expanding design boundaries that had not been explored before.
For example, Eclipse, an SVM rollup that just started releasing blobs 28 days ago, already accounts for 86% of all blobs on Celestia. Their mainnet isn't even open to the public yet, and while it's likely that much of this use is purely for testing purposes to ensure the reliability of the technology, it gives us an idea of what's possible with high-throughput rollups, and shows us that they will consume more DA than most rollups we see today.
6. Conclusion
So where does this leave us? To reach the $160,000 monthly revenue target set by the EigenDA team in their blog post, choosing tier 1 pricing of 70 ETH per year, assuming an average ETH price of around $2,500, you would need to have 11 paid rollups. In our analysis, we see that since EIP-4844 went live in early March, there have been around 6 rollups paying more than 70 ETH in fees paid to L1 alone. As we said earlier, on-demand pricing would still reduce the cost of all of these rollups by about 99%, but ultimately their desired throughput will be the deciding factor in whether they choose to use EigenDA.
Beyond that, we’ll likely see demand driven by the creation of multiple high-throughput rollups like MegaETH to drive down costs. In the future, it’s also possible that these types of high-performance rollups could be deployed through Rollup-as-a-Service (RaaS) providers like AltLayer and Conduit. However, in the short term, it will take some proof of work to reach the $160k monthly revenue target, assuming only 400 operators backing EigenDA to break even. Overall, EigenDA opens up the possibility of new designs that could have very high added value, but it’s not entirely clear how much value EigenDA will capture and how much will go back to re-stakers. Nonetheless, we continue to believe that EigenDA has the ability to capture a large portion of the DA market share as a DA provider, and we’ll continue to keep an eye on one of the most prominent AVS.
