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Ethereum co-founder Vitalik Buterin has introduced a new Ethereum Improvement Proposal (EIP-7706). The proposal is aimed at optimizing the way transaction call data is charged. This could potentially lower fees for users and developers on the blockchain.
Ethereum transactions currently incur two types of gas fees: execution gas, which accounts for the computational power required to process a transaction, and storage gas, which is the cost associated with storing data on the blockchain. Buterin’s EIP-7706 introduces a novel concept—a separate gas fee for call data, which is essential information sent to smart contracts during transactions.
This third type of gas would mean that the Ethereum blockchain assigns a unique fee to the data transferred in transactions. It will be distinct from the costs for executing contract code or storing data. The proposal outlines a new transaction type that would specify maximum base fees and priority fees for execution gas, blob gas (data storage), and call data gas.
A Shift in Base Fee Adjustment
Currently, Ethereum uses different mechanisms to adjust the base fee for execution and storage. However, Buterin suggests that with the addition of call data gas, it would be more efficient for the network to adopt a unified approach to managing all three types of fees.
The introduction of a dedicated fee for call data could lead to significant reductions in transaction costs. This is especially true for data-heavy operations that do not require extensive computation. According to Buterin, this new model would reduce the theoretical maximum call data size per block but make call data generally cheaper.
This proposal comes as part of Ethereum’s ongoing efforts to address the high gas fees on its network. The shift from a proof-of-work to a proof-of-stake consensus mechanism was initially intended to enhance scalability and reduce costs. However, challenges with transaction fees persist.
If accepted, EIP-7706 could represent a critical step towards more efficient and cost-effective blockchain operations. It will also align with Ethereum’s broader goals of scalability and user accessibility. Buterin has called for the adoption of a dynamic model that adjusts all three fees simultaneously. This ensures a more balanced and economical approach to managing blockchain resources.
Ethereum Technical Overview
The cryptocurrency market is never static, and Ethereum on the 4-hour chart provides a vivid picture of recent fluctuations. Based on the latest technical data, Ethereum has shown a downward trend in its closing prices. During this time, ETH has moved from $2,950.99 down to $2,890.52 over the last few sessions.
Examining the moving averages, the 9 Exponential Moving Average (EMA) has consistently decreased from $2,945.07 to $2,924.60, trailing slightly below the 20 EMA, which shifted from $2,947.17 to $2,935.85. This crossover typically indicates bearish momentum, suggesting that sellers are currently dominating the market.
Further supporting this bearish sentiment, the Moving Average Convergence Divergence (MACD) presents a negative outlook with the MACD line dropping below the signal line. Despite a brief positive histogram peak suggesting a potential reversal, the continuous decrease in MACD values reinforces the downward pressure.
In terms of market sentiment, the Relative Strength Index (RSI) has progressively declined, moving from 49.12 to a bearish 37.71. This descent below the midline (50) into bearish territory indicates that the asset is potentially oversold. It might attract buyers looking for a bargain, thus introducing possible volatility in the price.
Key Levels to Watch for Ethereum
Considering these indicators, Ethereum faces immediate resistance at $2,965.57 and a more challenging barrier at $2,993.79. Should a bullish reversal occur, these levels will be crucial for determining the strength of the uptrend. Conversely, support levels are established at $2,889.92 and $2,869.71. A break below these could exacerbate the bearish trend, pushing prices lower.
Volumes have fluctuated, with spikes coinciding with significant price movements, indicating active trading during these periods. Potential traders might consider entry points for a long position around the lower support level if signs of reversal such as increased volume and bullish MACD crossover occur. For those looking at short positions, a failure to break above the current resistance with increased selling pressure could serve as a trigger.
Disclaimer: The information presented in this article is for informational and educational purposes only. The article does not constitute financial advice or advice of any kind. Ecoinimist is not responsible for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to exercise caution before taking any action related to the company.
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