A new Ethereum improvement proposal (EIP), officially designated as EIP-7781, has been submitted to increase the blockchain’s throughput by a significant 50%. This development follows earlier proposals from Ethereum co-founder Vitalik Buterin and others aimed at enhancing the network’s processing capacity.
Background: Scaling Challenges in Ethereum
Ethereum has faced growing criticism for its inability to scale the main blockchain, with proponents arguing that it has mainly focused on enabling the proliferation of affiliated layer-2 networks optimized for higher transaction execution. While these networks offer users higher speeds and lower fees, they also raise concerns about security and decentralization.
The New Upgrade Proposal: EIP-7781
Proposed by Ben Adams, co-founder of Illyriad Games, on October 5th, EIP-7781 aims to reduce slot times from 12 seconds to eight seconds. This change would enable the network to process more transactions over time, directly translating to faster transactions for end-users.
Impact on Layer-2 Networks
The upgrade would also ramp up the blockchain’s capacity to handle blobs, which are dedicated data-storage chambers used by affiliated layer-2 networks to stash transaction records. The number of blobs per block would increase from six to nine, providing more space for layer-2 chains like Arbitrum and Optimism to post data to Ethereum.
Potential Drawbacks
While the upgrade has the potential to significantly improve network throughput, it also raises concerns about the added strain on validators. They might need additional hardware resources to support the higher throughput, which could be a major challenge.
Vitalik Buterin’s Proposal: A Comparison
EIP-7781 is similar to Vitalik Buterin’s earlier proposal to increase the blockchain’s gas limit, which would effectively boost network throughput. However, EIP-7781 takes a different approach by focusing on reducing slot times and increasing blob capacity.
Justin Drake’s Analysis
Ethereum Foundation researcher Justin Drak noted on Github that reducing block times to eight seconds would make decentralized exchange (DEX) platforms like Uniswap 1.22 times more efficient. This change could help close pricing gaps between on-chain and off-chain trading venues, saving users up to $100 million per year.
The Importance of EIP-7781
While the Ethereum blockchain is praised for its strong security and high degree of decentralization, its benefits have historically come at the cost of relatively high fees and slow speeds. EIP-7781 has the potential to address these issues and make Ethereum more competitive with speed-focused blockchains like Solana.
A Path Forward
The upgrade proposal will need to work its way through the Ethereum open-source development system, but it’s already earned some key supporters. If implemented successfully, EIP-7781 could be a significant step towards improving network throughput and making Ethereum more scalable.
How EIP-7781 Could Help Layer-2 Networks
- Increased blob capacity: The upgrade would allow for more blobs per block, providing more space for layer-2 chains like Arbitrum and Optimism to post data to Ethereum.
- Faster transactions: Reducing slot times from 12 seconds to eight seconds would directly translate to faster transactions for end-users.
- Improved efficiency: EIP-7781 could help close pricing gaps between on-chain and off-chain trading venues, saving users up to $100 million per year.
The Potential Drawbacks of EIP-7781
- Added strain on validators: Validators might need additional hardware resources to support the higher throughput, which could be a major challenge.
- Security concerns: Increasing blob capacity could raise security concerns if not implemented properly.
- Decentralization risks: The upgrade could also raise concerns about decentralization if it leads to increased centralization.
A Comparison with Vitalik Buterin’s Proposal
- Similar goals: Both EIP-7781 and Vitalik Buterin’s proposal aim to increase network throughput by reducing slot times and increasing gas limit.
- Different approaches: However, EIP-7781 takes a different approach by focusing on reducing slot times and increasing blob capacity.
Conclusion
EIP-7781 has the potential to significantly improve Ethereum’s network throughput, making it more competitive with speed-focused blockchains like Solana. While there are concerns about added strain on validators and security risks, the upgrade could be a significant step towards improving the network’s scalability. If implemented successfully, EIP-7781 could help close pricing gaps between on-chain and off-chain trading venues, saving users up to $100 million per year.
References
- CoinTelegraph: Ethereum Upgrade Proposal Could Increase Throughput by 50%
- Github: EIP-7781
- Justin Drak’s analysis on Github