Ethereum Developers Propose Key Changes to Boost Transaction Capacity Amid Rising Gas Fees and DeFi Security Concerns

Ethereum developers have put forward two key ideas to boost the blockchain's transaction capacity. Core developer Giulio Rebuffo suggests increasing the block gas limit. This change would allow more transactions in each block. Meanwhile, Ben Adams, a contributor to the Ethereum client Nethermind, proposes reducing the slot time to potentially increase transaction throughput by 33%.

Previously, Vitalik Buterin, one of Ethereum's co-founders, mentioned that raising the gas limit could enhance network performance. These proposals could kick off a broader effort to improve Ethereum's efficiency. While Ethereum remains the top smart contract network, it faces stiff competition from newer platforms like Solana. There’s also a growing belief among Ethereum users that layer 2 networks, once seen as a scaling solution, may not be the best way forward.

However, these changes might come with some challenges. For instance, increasing the block gas limit could make it harder for individuals to run Ethereum validators from home. This ability is crucial for maintaining the network's decentralization.

On the security front, decentralized finance (DeFi) has shown improvements. Data from TRM Labs reveals that DeFi hacks have decreased by 25% in the first nine months of 2024 compared to all of 2023. In contrast, centralized exchanges and custodians have seen a dramatic rise in hacking incidents, jumping nearly 1,000% to $401 million compared to last year. Most of these losses stem from attacks on their infrastructure, which have exposed private keys in their crypto wallets.

As DeFi protocol developers learn from past mistakes and work to fix bugs in their code, hackers find it easier to exploit vulnerabilities related to private keys.

Additionally, the restaking protocol EigenLayer is under scrutiny after a hacker tricked an employee into transferring $5.5 million worth of its EIGEN token. Many in the DeFi community criticized the project for distributing tokens directly to investors instead of using automated smart contracts. EigenLayer has stated that it is working with law enforcement and has managed to freeze some of the stolen funds. This incident adds to the ongoing concerns surrounding the protocol, which once attracted $20 billion in deposits and faced criticism for its first EIGEN token airdrop.

In governance updates, the Uniswap DAO has elected two new members to its accountability committee, while Synthetix has voted to revamp its token and restart its governance structure.

Ethereum gas fees are climbing again, which could make the network deflationary once more.