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Ethereum Developers Evaluate Reducing Data Transfer cost 5x, EIP 4488 Becomes Possible Solution

The second leading crypto asset ethereum has been dealing with high fees since the end of June and today the average ethereum transaction fee is between $5 and $34 per transfer. Although there have been many complaints about the high cost of ether gas this year, Vitalik Buterin, Ethereum founder, has suggested an Ethereum Improvement Proposal. This proposal aims to reduce transaction costs by five-fold. Tim Beiko, an Ethereum developer, also discussed the idea and discussed possible “challenges”, both short-term and long-term.

Moving Ether, Transferring an ERC20, and Swapping Tokens on Ethereum Is Costly — Tim Beiko Shares EIP-4488 Insights

Following the London upgrade during the first week of August, it was assumed that EIP-1559 would relieve at least some of the pressure. However, the average transaction network fee continued to rise after the London upgrade reaching, $62 per transfer on November 9. Today, ether gas cost is lower as bitinfocharts.com indicates the average ether fee is 0. 0083 ETH per transfer, or $34.09. The web portal l2fees.info shows an ETH transaction as low as $5. 77 per transfer, but the cost to move an ERC20 is $13. 20, and swapping ETH-based tokens can cost $28. 27 per swap.

On November 22, Bitcoin.com News reported on the arguments taking place on crypto forums and social media platforms like Twitter, between Ethereum and Avalanche advocates. Ethereum is facing stiff competition from blockchains such as Binance Smart Chain and Avalanche. Developers are being pushed to do more about high gas prices due to the high fees. On November 26, Ethereum developer Tim Beiko shared the most recent developer discussion and talked about an idea to lower the costs of rollups.

The gas costs have further pushed Ethereum co-founder Vitalik Buterin to propose leveraging an idea called EIP-4488. “Decrease transaction calldata gas cost, and add a limit of how much total transaction calldata can be in a block,” Buterin suggested on Github on November 24. Essentially, the solution could decrease data transaction costs significantly and estimates say gas cost could be reduced by five times. EIP-4488 leverages a scheme called “calldata,” which is utilized in L2 (layer 2) solutions such as Optimistic and ZK rollups. Beiko discussed the possibility solution in his Twitter thread.

“The cost of rollup txns is a function of the data they post back to the Ethereum mainnet,” Beiko said. Rollup transactions are cost-effective if a rollup compresses transactions and charges Y gas to send them to the mainnet. To do this, rollups add calldata to their transactions, which is currently priced at 16 gas per byte. If we reduce the calldata cost, then we reduce the cost of rollup transactions,” the programmer added. Beiko further stated that one of the challenges to the calldata solution is that it “influences the block sizes on Ethereum.” Beiko continued:

It’s literally data we add to each transaction. We can have larger blocks if we reduce the gas cost and maintain the same gas limit. This can cause problems in the long-term and short-term. It increases the worst-case block size in the short term. If, for example, calldata was 1 gas/byte, with a 30m gas block, you’d get a 30MB block (average right now is

EIP-4444, EIP-4490, and the Upcoming Arrow Glacier Upgrade

Currently, ethereum (ETH) users either are not transacting with ether at all, leveraging expensive L1 (layer 1) network fees, or they are utilizing rollup layer solutions. Loopring costs $0.01 per transfer. L2 solutions are cheaper than L1 fees. 25 per transfer. Polygon Hermez costs $0. 25, Zksync is around $0. 27, Optimism costs $2. 39 today, and transferring with Arbitrum One is $2.43. Beiko noted in a thread that L1 fees were very high, but L2 fees were quite expensive.

“Fees on Ethereum are *highand also aren’t trivial on rollups today (~3-4$ for a ETH send on ORs and ~0. 25c on ZKRs), so it’s worth thinking about the tradeoff more,” Beiko said. In addition to talking about EIP-4488, the software programmer also mentioned EIP-4444 (Bound Historical Data in Execution Clients) and EIP-4490. “Clients must stop serving historical headers, bodies, and receipts older than one year on the p2p layer,” the EIP-4444 description says. The EIP-4444 abstract summary adds:

Clients may locally prune this historical data — This change will result in less bandwidth usage on the network as clients adopt more lightweight sync strategies based on the PoS weak subjectivity assumption.

The Ethereum developer also posted information on Twitter about the December 8th Arrow Glacier upgrade. This upgrade aims to delay the network’s difficulty bomb. Open-source programmers are working to fix the network’s problems, but alternative blockchain networks are moving ahead.

What do you think about the recent solutions proposed to address the Ethereum network’s high transfer costs? Please comment below to let us know your thoughts on this topic.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. This article is not intended to be a solicitation or offer to buy or sell any products or services. Bitcoin.com does not provide investment, tax, legal, or accounting advice. The author and the company are not responsible for any loss or damage resulting from or related to the use or reliance of any content, goods, or services in this article.

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Ethereum

Ethereum Overtakes Tron as the Leading Network for USDT Supply

Ethereum has emerged as the leading blockchain for Tether’s USDT supply, surpassing Tron in a monumental shift for stablecoin dominance.

Over the past month, Tether issued $20 billion in USDT on the network, possibly marking it as the go-to blockchain for activity involving the fiat-pegged cryptocurrency.

Strategic Expansion

Figures shared by the on-chain data platform Token Terminal show that Tether’s $20 billion issuance on the world’s largest blockchain by total value locked is nearly twice the active loans on protocols like Aave.

Additional information from another blockchain analysis platform, Lookonchain, indicates that the surge in USDT minting started on November 6. Since then, Tether has been issuing between $1 billion and $2 billion of stablecoins every few days across Ethereum and Tron, with the former accounting for the lion’s share.

The trend is more than just numbers. Some analysts imply it is a nod to the reputation of the platform co-founded by Vitalik Buterin as a “trusted” and socially reputable network—a critical factor for institutional adoption.

Furthermore, commentators like DCinvestor on X have suggested that the uptick is just the beginning. They predict that Ethereum’s stablecoin supply could go up exponentially, potentially reaching as high as $1 trillion by the end of 2025. If it became a reality, this growth would represent a massive boost to the network’s overall economy, even cementing its position as the backbone of decentralized finance (DeFi).

USDT’s Dominance

According to DefiLlama data, Tether has continued to expand its issuance, controlling more than 69% of the $201 billion stablecoin market. In Q4 2024, records revealed that about 109 million wallets held the asset, more than double those holding Bitcoin and less than 20 million behind those with Ethereum.

Additionally, the issuer registered more than 4.5 billion web hits in the first 9 months of the year, with emerging markets accounting for nearly half that number.

With a presence in over 80 blockchain networks, USDT currently has a market cap of $140 billion, up 12.55% in the last month. Its closest competitor, USD Coin (USDC), valued at $41.5 billion, recently entered into a strategic partnership with Binance, seeking to challenge the Tether’s dominance.

While details of the collaboration remain scant, it is intended to expand the global adoption of USDC. Binance will incorporate the stablecoin into its full suite of products and services, making it accessible to its 240 million-strong user base.

Attempts to reverse USDT’s hegemony aren’t limited to USDC. Not long ago, several crypto companies, including Robinhood, Kraken, Galaxy Digital, and Paxos, came together to support the development of the Global Dollar (USDG). Its proponents claim the asset will help speed up the adoption of such instruments around the world.

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Ethereum

Top Ethereum (ETH) Price Predictions: New ATH or Another Severe Correction?

TL;DR

  • Analysts predict ETH could hit $5,000 or even $10,000, with key resistance at $3,750 signaling a potential breakout.
  • Rising daily active addresses and positive network growth suggest increasing Ethereum adoption, supporting a bullish outlook.

Where’s ETH Headed Next?

The second-largest cryptocurrency was on a tear last week, with its price briefly surpassing $4,000 on December 6. This was the highest level witnessed since March 2024.

Since then, though, ETH started losing steam, tumbling to approximately $3,500 amid the latest market correction observed at the start of the new business week. In the past several hours, the bulls have prevented a further fall, pushing the price to the current $3,720 (per CoinGecko’s data).

ETH Price
ETH Price, Source: CoinGecko

Despite ETH’s wobbly performance as of late, multiple analysts remain optimistic that the asset has yet to record fresh peaks. The popular trader using the X moniker CoinMamba predicted a new all-time high of $5,000 before the end of 2024.

My target for $ETH is still $5k by the end of this year. Do what you will with that information..

— CoinMamba (@coinmamba) December 10, 2024

X user Skew also envisioned a potential pump for ETH if it reclaims the $3,750 resistance level. However, the trader remains rather pessimistic if the valuation drops below $3,500. 

Crypto Patel presented a bullish scenario, according to which ETH’s price may skyrocket to a new ATH of $10,000. The X user also assumed there is a chance for a potential crash to the $2,500-$2,800 range, describing it as “the perfect accumulation zone.”

What Are On-Chain Metrics Signaling?

Some essential indicators suggest that ETH could indeed be poised for an upside move. One example is the increase in Ethereum’s daily active addresses. According to IntoTheBlock, the figure has jumped by almost 7% on a 24-hour scale, surpassing 600,000. 

This resurgence usually suggests growing usage of the Ethereum blockchain, which, in turn, could lead to a price spike. 

Another metric on the rise is the Net Network Growth (a momentum signal “that gives a pulse of the true growth of the token’s underlying network”). It is up 0.30% daily, entering the bullish zone. 

On the other hand, the “In the Money” indicator, which measures the change in the number of ETH investors currently sitting on paper profits, is slightly down for the same period. As of writing these lines, around 89% of those exposed to the asset are in the green, while only 8% are underwater.

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Ethereum

Argentina Opens Foreign Crypto ETF Investment Opportunities

Argentina is opening its stock market to crypto exchange-traded fund (ETF) opportunities. The Argentine SEC equivalent greenlighted the introduction of prospects to allow investments in crypto—bitcoin and ethereum—foreign ETFs under the figure of Argentine deposit certificates. Argentina Opens Its Stock Market to Foreign Crypto ETF Opportunities Argentina is opening its doors to more investment options [……
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