Ethereum remains above $1,700, despite a minor dip in value. EIP-9698 proposes a massive gas limit increase aimed at improving scalability. While facing some technical challenges, this could significantly boost transaction capacity. In technical analysis, Ethereum shows potential recovery against Bitcoin, while proposed fee reforms seek to maintain competitiveness with platforms like Solana.
Ethereum (ETH) has managed to stay above the $1,700 support level, even though it experienced a slight decline of 1.2% over the past 24 hours. The relative price stability continues as fresh scalability proposals emerge, with researchers eyeing substantial throughput enhancements for the Ethereum platform, which is renowned for its smart contracts functionality.
The Ethereum Foundation’s Dankrad Feist has introduced Ethereum Improvement Proposal (EIP-9698). This ambitious project aims to increase Ethereum’s gas limit by a staggering 100 times over the next four years. Starting on June 1, the proposal suggests a methodical and deterministic gas limit growth, boosting the current cap of 36 million to an impressive 3.6 billion, in two distinct tenfold phases.
Feist’s plan could elevate Ethereum’s transaction processing capability to over 2,000 transactions per second (TPS). This would significantly enhance its competitiveness against other high-throughput chains like Solana, which currently achieves between 800 and 1,050 non-vote TPS. He emphasized that the predictable nature of this gas limit increase aligns well with projected advancements in hardware and protocol efficiency.
However, Feist did point out some potential challenges, such as the increased load on less-optimised nodes and longer block propagation times. But, he reassured stakeholders that the gradual epoch increases would allow both node operators and developers ample time to adjust and optimise accordingly.
This proposed change may indicate a shift away from Ethereum’s current scalability strategy, which has largely relied on layer-2 solutions. Critics argue that this layered approach has compartmentalised the ecosystem, resulting in siloed chains that reduce interoperability, thus complicating user experience.
On the other hand, ETH has displayed resilience against Bitcoin, with analysts noting that it has reclaimed its local range. That might signal a potential market recovery. With a positive movement observed in several altcoins, there’s a sense that market sentiment is improving. However, bulls must push prices towards resistance levels, especially aiming to recover the 4-hour 200 MA and EMA, to maintain this upward trend.
Ethereum is currently trading around $1,780, down from a recent peak of $1,861. The daily Relative Strength Index (RSI) shows a reading of 53, indicating a slight decline in bullish momentum. Key levels to keep an eye on are immediate support at $1,700, critical support at $1,449, resistance at $1,861, and the psychological level of $2,000.
In parallel to the scalability discussion, Ethereum developers Kevin Owocki and Devansh Mehta are advocating for a new dynamic fee structure. Their proposal uses a square root formula to adjust the fee percentage according to funding capital, which aims to ensure a fair fee structure for both application developers and users. Once an application’s funding surpasses $10 million, fees would be capped at 1%, supporting smaller developers in creating dApps without overwhelming costs.
These discussions reflect a broader push within the Ethereum community to reassess how value is generated and distributed, in response to competitive pressures from emerging platforms like Solana. It’s been reported that more developers have flocked to Solana this year, while Ethereum’s fees have dropped to their lowest point in five years, mainly due to reduced activity on its base layer.
