- Ethereum blockchain could scale past proto-danksharding or EIP-4844, according to the latest proposal by a research group.
- The proposal was developed in conversation with Ethereum founder Vitalik Buterin and other ETH core developers over the past two years.
- Amid developmental updates, Ethereum whales have been rapidly accumulating the altcoin across centralized exchanges like Binance.
Ethereum developers discussed the issue of scaling that challenges the ETH blockchain’s wider adoption among users. Over the past couple years, a group of researchers in conversation with ETH creator Vitalik Buterin developed an alternative to scale beyond EIP-4844, the improvement proposal for “proto-danksharding.” Find out more about EIP-4844 here.
The researchers have drafted a proposal and shared it with the ETH community in what many call a bullish development for the altcoin’s utility and adoption in the long run.
Alongside the research and development that is ongoing on the Ethereum blockchain, large wallet investors on the network have consistently accumulated ETH tokens, reducing the supply on centralized exchanges like Binance. This fuels a bullish thesis for Ethereum in the long term.
Also read: When is EIP-4844, and why is it considered the biggest game changer for Ethereum?
Ethereum developers propose scaling beyond EIP-4844
Ethereum network’s researchers are exploring a different peer-to-peer solution to scale the underlying blockchain. The idea is to simplify the design and scale Ethereum faster than the EIP-4844 and existing solutions within the ecosystem.
Researchers presented an early draft titled PeerDAS and invited feedback and a discussion to improve their research. The ideas in the proposal were derived from conversations with Ethereum creator Vitalik Buterin, Dankrad, members of Codex, RIG, ARG and Consensus R&D. Developers explained that this has been under development for the past couple of years.
Further development of the scaling solution will require rounds of testing and other phases, before it is approved and lined up as an upgrade to the Ethereum blockchain.
The research and development update likely fuels a bullish sentiment among holders, as its end goal is to tackle the altcoin’s challenge of scaling its blockchain network, which is currently being solved by Layer 2 and 3 chains.
Whale accumulation supports Ethereum’s bullish thesis
On analyzing two key on-chain metrics:
- Supply held by top addresses (as a % of total supply): A metric used to identify accumulation by large wallet investors over a given period of time
- Supply on exchanges: Volume of Ethereum tokens held in centralized exchange wallets in the ecosystem (Used to identify whether there is buying/ selling pressure on an asset)
Whales have been consistent in their accumulation of Ether tokens since August 18. Further, large wallet investors have continued scooping up Ethereum alongside bullish developments and updates in the ETH ecosystem like the recent research into tackling the challenge of “scaling.”
As seen in the chart from crypto intelligence tracker Santiment, top addresses now hold 35.26% of the total supply of Ethereum, up from 34.89% on August 18. This is a key date on the chart, since supply held by top addresses and supply on exchanges diverged significantly. ETH supply on exchanges declined nearly 2% between August 18 and early on Tuesday.
Supply held by top addresses vs supply on exchanges vs price
The reduction of ETH tokens held across centralized exchanges is indicative of a reduction in selling pressure and fuels a bullish thesis for Ethereum price. Similarly, accumulation of ETH tokens by large wallet investors signals that ETH price is positioned for gains.
At the time of writing, Ethereum is trading at $1,624.20 on Binance.
Ethereum is a decentralized open-source blockchain with smart contracts functionality. Serving as the basal network for the Ether (ETH) cryptocurrency, it is the second largest crypto and largest altcoin by market capitalization. The Ethereum network is tailored for scalability, programmability, security, and decentralization, attributes that make it popular among developers.
Ethereum uses decentralized blockchain technology, where developers can build and deploy applications that are independent of the central authority. To make this easier, the network has a programming language in place, which helps users create self-executing smart contracts. A smart contract is basically a code that can be verified and allows inter-user transactions.
Staking is a process where investors grow their portfolios by locking their assets for a specified duration instead of selling them. It is used by most blockchains, especially the ones that employ Proof-of-Stake (PoS) mechanism, with users earning rewards as an incentive for committing their tokens. For most long-term cryptocurrency holders, staking is a strategy to make passive income from your assets, putting them to work in exchange for reward generation.
Ethereum transitioned from a Proof-of-Work (PoW) to a Proof-of-Stake (PoS) mechanism in an event christened “The Merge.” The transformation came as the network wanted to achieve more security, cut down on energy consumption by 99.95%, and execute new scaling solutions with a possible threshold of 100,000 transactions per second. With PoS, there are less entry barriers for miners considering the reduced energy demands.
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Source: FX STREET