Ethereum Network to Get 50% Faster with EIP-7781, ETH Price Outlook Brightens

• EIP-7781 aims to significantly enhance Ethereum’s transaction processing speed by reducing slot times and increasing data blob capacity, promising faster and cheaper operations.
• The anticipated improvements to the Ethereum network’s efficiency and speed may contribute to a brighter outlook for ETH prices as it could increase the network’s attractiveness and usability.

Besides Coinbase stating that Ethereum’s underwhelming performance is linked to the broader market structure, as reported by CNF, where investors’ liquidity is trapped in smaller altcoins, Ethereum’s recent updates have predominantly focused on supporting the development of third-party layer-2 solutions such as Arbitrum and Optimism.

These rollup networks operate independently but settle their transactions on Ethereum’s ledger, offering users faster processing speeds and lower transaction fees. Consequently, these networks have quickly become the primary means for interaction within the Ethereum ecosystem.

Introduction of Data Blobs for Efficiency

Later in March, Ethereum implemented a significant feature: data blobs. These blobs allow the blockchain to store arbitrary bits of data in a dedicated, cost-effective space, separate from the traditional block space.

This enhancement, particularly designed with layer-2 networks in mind, enables these networks to consolidate large batches of transactions and post them all at once, operating more efficiently than standard Ethereum transaction methods.

EIP-7781 and Performance Improvements

The proposed Ethereum Improvement Proposal, EIP-7781, aims to further enhance the efficiency of layer-2 networks by increasing the number of data blobs available, making it quicker and cheaper to post data to Ethereum.

This upgrade is notable as it focuses on speeding up Ethereum’s base layer, the first such focus in a while. A key aspect of this upgrade is the reduction of slot times from 12 seconds to 8, which will result in faster transaction times for users.

However, this change may present challenges for validators, potentially requiring them to upgrade their hardware to keep up with the increased processing demands. As of today, according to CoinMarketCap data, Ethereum (ETH) is trading at $2,434.48 with a decrease of 0.92% in the past day and 7.70% in the past week.