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Ethereum’s EIP-7781 Update: Everything You Need to Know

Ethereum’s EIP-7781 Update: Everything You Need to Know

CCNCCN2024/10/08 02:00
By:CCN
Key Takeaways
  • EIP-7781 could increase network throughput by 50% and lower transaction confirmation times by 33%.
  • Solo stakers may struggle to keep up with higher bandwidth requirements on their hardware.
  • Vitalik Buterin wants the minimum network validator deposit to be lowered to just one ETH.

Following the latest Ethereum Improvement Proposal, EIP-7781, the Ethereum network may see another major boost to its overall performance.

EIP-7781

Introduced by Illyriad Games co-founder Ben Adams, EIP-7781 proposes to improve the network at its base level.

It seeks to reduce Ethereum’s slot time from 12 seconds to 8. Shorter times would allow for more frequent block production and, therefore, increase the network’s transaction throughput.

#Ethereum EIP-7781 proposed to reduce slot time from 12s to 8s🔥

Will make:
– 50% boost in network throughput (same as 45Mn block gas limit)
– 33% faster transaction confirmations, improving DApp UX
– saving of ~$100M in arbitrage MEV annually for DEXs like Uniswap

Can lead to:… https://t.co/zPYFHuQtiU

— vikram (@PowersOfTau) October 7, 2024

EIP-7781 could see throughput and transaction confirmation speeds drastically increase. Ethereum Foundation researcher  Justin Drake approved the idea, positing that such a change could increase throughput by 50%. In addition, he notes:

“It will make DEXes like Uniswap v3 roughly sqrt(12/8) ≈ 1.22x more efficient, saving roughly $100M in CEX-DEX arbitrage per year and ultimately leading to better execution for users.”

The proposal could also see bandwidth usage distributed evenly over time and “smoothing” peak load across more slots. Overall, it looks like a major step forward for the Ethereum network.

Concerns

However, this increased efficiency doesn’t come without a cost, and numerous observers have pointed out that there are implications for ETH stakers and hardware requirements. More specifically, shorter block times could result in execution state growth, aka more data on the blockchain.

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As pointed out by Web3 researcher  Vikram and others, this may impact solo stakes. This may impact home validators, whose hardware might not be powerful enough to handle the increased speed and size of the blockchain.

Optimistically, Cinnehaim Ventures partner Adam Cochran said the EIP’s imposition on solo stakers could be “reasonable” if the gas limit per block is unchanged.

Ethereum Staking

It’s an interesting proposal that follows Ethereum co-founder Vitalik Buterin’s recent proposal to lower the minimum amount of ETH required to become a network validator.

I think there's a sane version of this where we recognize that 32 ETH is much more of a barrier than bandwidth reqs, and temporarily do a trade where we up the bandwidth reqs a bit and in exchange drop the staking deposit minimum to eg. 16 or 24 ETH.

It's net-good for both…

— vitalik.eth (@VitalikButerin) October 3, 2024

Buterin recently championed the notion of reducing the minimum ETH deposit for being a staker from 32 ETH, to 16/24 ETH. However, this would come in exchange for a slightly higher bandwidth requirement.

This does reduce the barriers to becoming an Ethereum network validator, but it’s still quite the ask at over $2,400 per ETH. According to Buterin, the deposit minimum could drop to just one ETH following some additional developments.

This will greatly reduce the entry barriers for those looking to secure the Ethereum network, in turn significantly enhancing its decentralization. But as noted, EIP-7781’s potential to increase the hardware requirements for stakers could fly in the face of Buterin’s minimum stake ambitions.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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