Ethereum, the blockchain known for conducting constant upgrades to rise above its competitors, undergoes times of network bottleneck and costlier transaction fees, challenging its capacity to process the rising number of individuals trying to buy Ethereum online and decentralized apps. Devs are contesting whether the upcoming Ethereum Improvement Proposal, shortened EIP, can be the solution to the scaling problems found in layer 1, with a focus laying on the massive latency challenges triggered by climbing transaction volumes. These troubles naturally generate longer waiting times for utilizers as their transfers pile up in a pool and wait to be processed by miners.
Nethermind contributor and Illyriad Games co-founder Ben Adams presented his proposal, dubbed EIP-7781. This proposal strives to slash Ethereum’s slot time from 12 to 8 seconds in an attempt to decrease peak bandwidth. If implemented successfully, this could double the overall throughput of the network, besides benefitting decentralized exchanges (DEXs) and decentralized finance (DeFi).
What do all these bids and efforts mean, how may stakers be impacted, and what do experts think? Here’s the tea.
The main goal
The first and foremost objective of the proposed EIP-7781 is to enhance the rollups’ latency and enlarge blobs’ capacity – a provisional data structure developed to slash layer-2 networks’ gas fees. Additionally, the pitch looks to dispense bandwidth usage more uniformly in the long run. Like this, the bid strives to decrease peak bandwidth requirements and further a handier and stronger network with no upsurge in individual block or blob count.
In layman’s terms, the EIP-7781 suggests slashing Ethereum’s block times from 12 to 8 seconds, possibly doubling the network’s throughput down the road. Besides better throughputs, this undertaking aims to decrease rollup latency and improve data capacity, avoiding a possible boost in the number of blobs or blocks.
What experts think
Well-known figures in the crypto space endorse this move, including the likes of community expert Justin Drake and Ethereum co-founder Vitalik Buterin. The former works as a researcher within Ethereum Foundation and notably, he stressed that a successful outcome could improve the UX for smart contracts by slashing confirmation waiting periods by 33%. Additionally, the “peak load” could drop across more slots, improving the network’s resiliency when activity hits zeniths.
Lastly, such an undertaking could boost throughput by 50%, representing an unmatched rise to a 45 million gas limit and a nine blob maximum. The researcher disclosed that cutting block times could improve the efficiency in DEXs like Uniswap v3 by nearly 22%, leading to savings of around $100MN in CEX-DEX arbitrage yearly and better user execution. The guru states that his immediate goal aligns with those brought up by Vitalik Buterin and several scaling organizations.
Similarly, pseudonymous dev Cygaar expressed in an X post that the proposal’s approval may represent an unmatched milestone in enhancing L1’s performance down the road. Vitalik Buterin stressed the greatness of the collaborative struggles to improve the system, possibly hinting at the proposed EIP, 7781.
Solo stakers could be at risk
Looking through economic glasses, it’s safe to say that slashed block times may bring about higher fees on the solo staker. Some developers brought to everyone’s attention that slashing block times may have a direct impact on solo stakers.
Slashed block times may result in an execution state increase, expanding a blockchain’s held data amount. Stakers may need more potent hardware and bandwidth to disseminate the blockchain’s state more rapidly to stay afloat.
Adam Cochran, collaborator at Cinnehaim Ventures, expressed in an X post that the newfound proposal appeared pertinent with its limitation on solo stakers, supposing a block’s gas limit stays unimpacted. While the expert admits to desiring to see some test being carried out to ensure some stakers aren’t left behind, his immediate thought is that the new modification would permit the blockchain to remain accessible by the bulk of stakers.
Nevertheless, stakers’ rising requirements may raise concerns about blockchain’s journey toward decentralization down the road. Suppose stakers deem the validating acts increasingly challenging because of the hardware restraints; the network is at threat of becoming more and more centralized. Naturally, such an outcome may only threaten Ethereum’s long-standing objective of being a leader in decentralization.
The new EIP emerged soon after Vitalik Buterin tackled a long-debated concept. According to the co-founder, diminishing the inferior threshold necessitated to break into the Ethereum network validating is possible, proposing a slash from the current 32 Ether to 24 or 16 Ether. All of this highlights the developer’s intention to enhance the network’s decentralization and security.
How blockchain is permeating the banking system
As banks navigate the transformative blockchain technology to enhance their services’ security and transaction speed, proposals like the 7781 currently debated may create room for benefits that could improve the appeal of banks’ offerings. Think of cryptocurrency banking platforms working at the speed of light. Such a scenario may seem luring, so one should remain wary about this tendency’s long-term impact on the financial systems. These patterns spark discussions around centralizing tendencies within modern economic structures.
What about web3?
The EIP-7781 may affect Web3 adoption rates within the banking sectors, which are looking to enhance decentralization and user data control. With Ethereum’s boosted efficiency and scalability, Web3’s progress into the traditional financial landscape may hit new peaks.
The quest for equilibrium continues
Ethereum developers furthered a new proposal for one of the most prominent networks of our time, soon after the Dencun upgrade was launched. The current EIP-7781, the hottest subject in the crypto arena at the moment, presents an unmatched occasion, but comes laden with worries regarding the network’s centralization.
With the emergence of proposals like the outlined one, investors and developers should consider whether trade-offs can impact decentralization.
What’s your viewpoint?
Is the world prepared to manage and guide this network effectively? Frankly, only time can tell since debates around the EIP-7781 continue. Stay close, and let us keep you posted on further updates!