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Ethereum researchers propose a model based on UTXO that could cut data growth by 99.8%

2026-07-09 12:15:41
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Ethereum Foundation explores new ways to slow data growth, researchers propose introducing UTXO model

Developers of the Ethereum Foundation are exploring a new way to slow the rapid growth of data on the network. Researcher Toni Wahrstatter suggested introducing some elements of the UTXO (Unspent Transaction Output) model to Ethereum. This concept mirrors the architectural features that Cardano has successfully used over the years.

Reducing data load is at the heart of the proposal

The main challenge facing Ethereum stems from its account-based structure, which requires each wallet\'s balance to be continuously stored as active data. Even if a transaction occurs only once, these records will continue to occupy blockchain memory space. Through Ethereum Improvement Proposal (EIP) 8141, Walstedt introduced the concept of \"Frame Transactions\" to enable simple payments to be used in a single time.

Under this system, transaction details are verified from historical blockchain records only when needed. In active memory, a single bit can indicate whether a transaction output has been spent. Walstedt estimates that this framework could reduce unnecessary data growth caused by simple transfers on the Ethereum base layer by as much as 99.8%.

Mini Glossary

UTXO represents the output of unspent transactions and is a model where each new payment consumes the previous unspent output. eUTXO is an extended version adapted by Cardano to support more advanced features such as smart contracts.

Walstedt\'s proposal, which aims to turn simple payments into single-use, believes it could cut data growth at the base level by 99.8%. The proposal has entered the early Strawman discussion stage in the Ethereum community, and Vitalik Buterin is also monitoring progress. However, implementing such changes requires not only a technical evaluation, but also a comprehensive consideration of the compatibility of existing applications.

Hoskinson criticized and accused hypocrisy

Cardano founder Charles Hoskinson responded sharply to these developments. Hoskinson left Ethereum in 2014 due to differences with Vitalik Buterin over the network\'s business direction and long-term architectural roadmap. He believes that there is still an unwritten taboo in the Ethereum ecosystem that is unwilling to acknowledge his contributions. For Hoskinson, the debate is not only technical, but also symbolic. From the beginning, Cardano has designed around the extended UTXO (eUTXO) model to address the scale expansion challenge; Ethereum has long promoted account-based systems as the opposite solution.

Technology overlap brings new risks

The UTXO model has historically been related to Bitcoin, which mainly operates as a value transfer system with limited capabilities for smart contracts. Cardano extended this logic to create a more flexible infrastructure for complex applications. Nowadays, Ethereum researchers are considering learning from the model\'s ideas to solve the memory limitation problem. In the eyes of some people, this indirectly confirms the solutions first proposed in other fields. However, merging two very different architectures is not easy. This hybrid approach could pose compatibility risks to the many DeFi applications currently available on Ethereum.

This means Ethereum currently faces two main options: either continue to manage its growing database in the current way, or explore a hybrid solution that includes a more radical architectural transformation.

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