A Balance-Changing Shift May Be Coming to Ethereum: Here’s the Proposal

A recent proposal for an Ethereum update could significantly increase the network’s throughput, potentially boosting transaction speeds by 50%. The proposed improvement aims to help Ethereum compete more effectively with speed-focused blockchains like Solana.

Ethereum Could Approach Solana's Pace

The Ethereum Improvement Proposal (EIP), officially dubbed EIP-7781 and introduced by Illyriad Games co-founder Ben Adams on October 5, proposes reducing slot times from 12 seconds to eight seconds. This adjustment would allow the Ethereum network to process more transactions over time, improving efficiency and speed.

EIP-7781 would also expand the blockchain’s ability to manage “blobs,” specialized data storage units used by Ethereum’s layer-2 networks to store transaction records. The proposal proposes increasing the number of blobs per block from six to nine, leaving more room for layer-2 solutions like Arbitrum and Optimism to send data to the Ethereum mainchain.

In ETH’s proof-of-stake system, slots are specific time intervals during which a block can be proposed. For each slot, validators are selected to propose a block, and if these validators are successfully approved, it is added to the blockchain. EIP-7781 aims to increase the speed at which transactions are processed by reducing slot times.

The proposal is still in its early stages within ETH’s open-source development community, but it has garnered support from notable figures. Ethereum Foundation researcher Justin Drake noted on GitHub that the proposed eight-second slot reduction could make decentralized exchanges (DEXs) like Uniswap 1.22 times more efficient. The development could also help reduce price differences between on-chain and off-chain exchanges, potentially saving users up to $100 million per year.

Ethereum’s blockchain is known for its security and high degree of decentralization, but these strengths have traditionally come with tradeoffs in terms of higher fees and slower transaction speeds compared to newer blockchain platforms like Solana. Earlier this year, Ethereum co-founder Vitalik Buterin proposed increasing the blockchain’s gas limit (the amount of transaction data that can fit into each block) in order to increase the network’s overall throughput.

EIP-7781’s proposal functions to increase Ethereum’s capacity in line with the proposed 45 million gas limit and nine blob limit. This adjustment closely matches the 40 million gas limit proposed by pumpthegas.org and similar proposals by Buterin and others.

Recent updates to the Ethereum blockchain have mostly focused on supporting third-party layer-2 rollup networks like Arbitrum and Optimism, which offer faster speeds and lower fees by processing transactions on Ethereum’s ledger. These networks have quickly become indispensable to Ethereum’s ecosystem.

Introduced in March, data blobs provide a cheaper, private space on ETH to store arbitrary bits of data, optimized for layer-2 networks that aggregate multiple transactions before sending them to the ETH blockchain. EIP-7781 aims to increase the efficiency of layer-2 networks while directly improving transaction speeds at Ethereum’s base layer by increasing the number of blobs.

However, while reducing slot times speeds up transactions for users, it can increase workload by requiring additional hardware resources for validators.

*This is not investment advice.