Ethereum will provide a new transaction format through the EIP-4844 update. Therefore, it is possible that the reduction in gas prices can significantly help users. According to crypto analyst Akash Girimath, it is possible that some altcoin projects could potentially rise in anticipation of this upgrade.
Ethereum gas fees will improve drastically on EIP-4844
cryptocoin.comAs you follow, the announcement of the SEC and Ripple lawsuit caused crypto investors to rise after being confused last month by Bitcoin’s rangebound movement. However, with Ethereum Improvement Proposal 4844 (EIP-4844), it’s possible that things could get interesting for a particular set of altcoins.
Ethereum (ETH) has gone through major hard forks over the past few years, ranging from the London Hardfork to the recent Merge upgrade. With these code changes, the developers aim to make the Ethereum Blockchain more secure and scalable. It also aims to keep it in a decentralized structure. The latest in a series of upgrades is the EIP-4844, which aims to reduce gas fees by introducing a special transaction type. aka Shard Blob Transactions update. The official EIP website for Ethereum summarizes the purpose of this upgrade as follows:
Introduce a new transaction format for ‘blob-bearing transactions’ with large amounts of data that cannot be accessed by EVM execution, but whose commit is accessible. This format is intended to be fully compatible with the format to be used in full sharding.
This new trading format will be compatible going forward. It will also be available for use in future sharding upgrades.
These altcoin projects will be in focus: OP, ARB and MATIC
The update will prepare the Ethereum Blockchain for full dank sharding. Besides that, EIP-4844 will have a big impact on gas charges. Despite the Merge or London hard fork, the gas costs of Layer-1 solutions are still high for many users. Tier 2 (L2) solutions have reduced gas fees by three to eight times compared to L1 Blockchains. However, it’s still high for many individual investors.
While EIP-4844 aims to reduce gas fees for Ethereum’s Beacon Chain, the benefits will inevitably be compounded for Tier 2 scaling solutions. So, this update will attract many investors to interact with L2 Blockchains like Optimism (OP), Arbitrum (ARB), Polygon (MATIC) and more. This speculative move will improve the fundamentals of L2 Blockchains. At the same time, it will likely trigger a massive rally for these altcoins. Because it will also attract traders and potential buyers.
The opinions and estimates in the article belong to the analyst and are not investment advice.
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