Gas fees slashed as innovation soars
There is growing consensus that Ethereum’s ETH token will breach the US$7 000-plus mark in 2026 and move well beyond that in the coming years.
Layer-2 growth and greater buy-in from international banks are already driving the world’s second-biggest blockchain towards this target, but one of the most important factors in its favour is the impact of its EIP-4844 upgrade.
It is little secret that the blockchain has run into scalability problems since being unleashed onto the crypto market in 2015.
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Its “gas” fees, or the amount it costs to transact on Ethereum, had been high.
Depending on current block space demand, this fee could be as much as $100.
That all changed in 2024 when Ethereum gas fees dropped by up to a staggering 98% for Layer-2 rollup networks.
L2 rollups are known for bundling transactions and then resettling them at a much lower cost on Ethereum’s live transaction blockchain. These savings are then passed on to investors.
Photo-Danksharding data purge
The EIP-4844 upgrade last year took the L2 rollup process to even greater heights.
It is based on a process called photo-Danksharding.
Photo-Danksharding doesn’t fully implement sharding, thereby improving data availability and cost-cutting.
The key lies in what happens to L2 rollup data once it is resettled on Ethereum.
Until recently this data had lived permanently on the blockchain’s main-net, even though it no longer served any purpose.
The introduction of EIP-4844 changed the game by enabling Ethereum to delete the data once verification was complete. This meant prices became even lower for L2 rollups and boosted the Ethereum to USD rate.
’Blob’s your uncle’ for Ethereum
The name might be a little unflattering but the main ingredient in Ethereum’s scalability drive is known as a “blob”.
Blob data “packets” are only stored by computer nodes for a maximum of 18 days.
This means that the strain on the Ethereum network is eased and transactions can take place at a much faster rate than before.
Needless to say, less data on the network translates into less money spent on operational costs.
There had been some challenges with the technology.
For example, fork rates – referring to the frequency with which a community changes a blockchain’s established set of rules – increased due to bigger block sizes and increased blob processing.
The outcome was instances of network instability but, again, developers came up with a solution in the form of EIP-7691.
This boosts the per-block blob target from 3 Target 6 Max to 6 Target 9 Max. eliminating the gremlins that have crept into the system and ensuring greater efficiency.
Hitting the crypto trifecta
With the long-standing scalability issue now seemingly behind it, it is little wonder that forecasters are viewing Ethereum as a solid long-term value proposition.
It is now seen as a winner that has hit the targets of scalability, security and yield, giving further credence to analysts’ assessment that the $7 000 figure+ is well within reach.
