Ethereum Proposal Could Increase Throughput by 50%

As a seasoned blockchain researcher with years of experience under my belt, I must say that the Ethereum improvement proposal (EIP-7781) has piqued my interest. Having closely followed the blockchain landscape and its evolution, it’s clear that Ethereum, despite its strong security and decentralization, has faced criticism for its relatively slow speeds compared to newer players like Solana.

A new upgrade proposal for Ethereum could improve network throughput by 50%, enhancing its ability to compete with speed-focused blockchains like Solana.

Originally suggested by Ben Adams, one of the founders at Illyriad Games, on October 5th, this Ethereum enhancement proposal aims to shorten slot durations from 12 seconds down to 8 seconds. This adjustment is intended to increase the network’s capacity to handle a higher number of transactions gradually over time.

As an analyst, I’m excited about the upcoming upgrade, officially known as EIP-7781. This enhancement significantly boosts our blockchain’s ability to manage blobs – think of them as dedicated storage areas used by associated layer-2 networks to store transaction data. The modification will essentially double the number of blobs per block from six to nine, offering increased space for layer-2 chains such as Arbitrum and Optimism to deposit their data onto Ethereum, enhancing its capacity overall.

In Ethereum’s proof-of-stake system, time periods called “slots” determine when a new block can be created. For each of these slots, one validator is chosen to create (or propose) the next block. If this proposal is successful, the newly created block gets added to the blockchain.

The proposed upgrade for Ethereum is set to navigate through the Ethereum open-source development process, and it has managed to garner some significant backers along the way.

Vitalik Buterin’s proposal

Justin Drake, a researcher at the Ethereum Foundation, mentioned on Github that shortening block times to eight seconds would boost the efficiency of decentralized exchange (DEX) platforms like Uniswap by approximately 1.22 times. This potential adjustment could help bridge pricing disparities between on-chain and off-chain trading platforms, potentially saving users up to $100 million annually, as per Drake’s estimation.

Compared to many other blockchains, Ethereum is highly admired for its robust security and significant level of decentralization. However, these advantages often come with a trade-off – higher transaction fees and slower processing speeds, particularly when compared to more contemporary platforms such as Solana.

Initiator of Ethereum, Vitalik Buterin, suggested in January an expansion of the blockchain’s “transaction capacity limit,” aiming to enhance the overall performance and processing speed of the network.

As an analyst, I would express it as follows: According to Drake’s interpretation, EIP-7781 essentially equates to a boost in both the gas limit (to approximately 45 million) and the blob limit (to 9). This proposed adjustment seems to be in line with the suggested 40 million gas limit by pumpthegas.org and the 8 blob limit proposed by Vitalik and others.

In recent years, enhancements to the Ethereum blockchain have largely been geared towards facilitating the creation of third-party “rollup” networks such as Arbitrum and Optimism on a layer-2 level. These autonomous blockchain platforms ultimately verify their transactions on the Ethereum ledger, but they provide users with faster speeds and reduced fees. As a result, these networks have quickly become the preferred platform for users to engage with the Ethereum ecosystem.

In March, extra storage spaces called “data blobs” were incorporated into Ethereum. These spaces enable the blockchain to store various data types independently and at a lower cost compared to the standard block space on the network. Unlike regular transactions, these data blobs are more efficient for layer-2 networks, which group numerous transactions together before sending them all to Ethereum simultaneously.

EIP-7781 may expedite and reduce costs for layer-2 networks when submitting data to the main chain, as it boosts the quantity of data chunks or “blobs”. Notably, this is the first update in a while specifically designed to enhance speed on Ethereum’s core blockchain.

Cutting down slot times from 12 seconds to just 8 could immediately speed up transactions for users. However, this change might put extra pressure on validators, potentially requiring them to upgrade or add more hardware resources.

The news was reported earlier in CoinTelegraph.