Vitalik Buterin Proposes Overhaul to Enhance Ethereum Network Efficiency

Vitalik Buterin has proposed a major overhaul of Ethereum’s execution layer to enhance network efficiency and scalability by replacing the EVM with the RISC-V instruction set. This change could improve efficiency over 100x and comes as transaction fees reach 5-year lows due to low demand and increased Layer-2 blockchain activity. Currently, ETH is trading at $1,644.66, down over 50% this year.

Vitalik Buterin, co-founder of Ethereum, recently proposed a significant enhancement to the network’s efficiency and scalability through a blog post. He advocates for the replacement of the current Ethereum Virtual Machine (EVM) contract language with the open-source RISC-V instruction set architecture. This change aims to tackle enduring scaling issues and improve zero-knowledge EVM proving, which is essential for off-chain computational verification.

Buterin’s vision suggests that under specific circumstances, implementing this new architectural framework could yield efficiency improvements exceeding 100 times compared to the existing model. This proposal emerges as Ethereum has seen a marked decrease in overall transaction activity and fees, with average transaction costs dropping to levels akin to those of May 2020 as reported by Etherscan. Such reductions typically indicate lower network demand.

The decline in transaction fees has implications for ETH’s deflationary measures since a portion of those fees is burned, leading to a gradual increase in inflation as fewer ETH are removed from circulation. Analysts note that this decrease correlates with the increased usage of Layer-2 blockchains and the Dencun Upgrade, which has notably reduced transaction fees, diverting on-chain activity from the foundational Ethereum chain.

Currently, Ethereum is trading at $1,644.66, registering a 3.28% increase in the last 24 hours according to Benzinga Pro data. However, the cryptocurrency has experienced over a 50% decline year-to-date, highlighting the challenges facing the network amid its efficiency overhaul discussions.