Why Ethereum’s EIP-4844 could kickstart bull run for Optimism (OP), Arbitrum (ARB), Polygon (MATIC)


  • Ethereum’s EIP-4844 upgrade could kickstart a rally in Layer 2 tokens.
  • The reduction in gas fees due to the introduction of a new transaction format via this update could significantly help users.
  • Some altcoins that could potentially rally in anticipation of this upgrade include Optimism, Arbitrum and Polygon.

The announcement of the SEC vs. Ripple lawsuit caused crypto investors to flip bullish after being confused for the last month due to Bitcoin’s rangebound movement. But with Ethereum Improvement Proposal 4844 or EIP-4844, things might get interesting for a certain set of altcoins. 

Read more: Ethereum Improvement Proposal EIP-4844 turns experts bullish, will ETH price rally?

Ethereum gas fees to improve vastly in EIP-4844

Ethereum (ETH) has already undergone major hard forks in the last few years, ranging from London Hardfork to the recent Merge upgrade. All of these code changes are aimed at making the Ethereum blockchain more secure and scalable while keeping it decentralized. 

The latest in the line of upgrades is the EIP-4844, aka Shard Blob Transactions update, which is aimed at reducing gas fees by introducing a special transaction type. The official EIP website for Ethereum summarizes the goal of this upgrade as follows.

Introduce a new transaction format for ‘blob-carrying transactions’ which contain a large amount of data that cannot be accessed by EVM execution, but whose commitment can be accessed. The format is intended to be fully compatible with the format that will be used in full sharding."

This new transaction formation will be forward-compatible and will be used in future upgrades of sharding. 

Also read: Top 3 altcoins to buy for next alt season: PEPE, OP, BNB

Why Layer 2 solutions are in the spotlight?

In addition to preparing the Ethereum blockchain for full dank sharding, the EIP-4844 will have a huge impact on gas fees. Despite the Merge or London hard fork, the gas fees for Layer 1 (L1) solutions are still high for many users. While Layer 2 (L2) solutions have reduced gas fees by three to eight times than L1 chains, it is still high for many retail investors. 

Although EIP-4844 is aimed at reducing gas fees for Ethereum’s beacon chain, the benefits of it will inevitably be compounded for Layer 2 scaling solutions. Hence, this update will attract many investors to interact with L2 chains like Optimism (OP), Arbitrum (ARB), Polygon (MATIC/POL) and so on. 

While this speculative move will improve the fundamentals of L2 chains, it will also attract traders and prospective buyers looking to capitalize, which could trigger a massive rally for these altcoins.


Like this article? Help us with some feedback by answering this survey:



Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended Content

Editors’ Picks

Trump-inspired memecoin MAGA shows bullish on-chain metrics ahead of US elections

Trump-inspired memecoin MAGA shows bullish on-chain metrics ahead of US elections

MAGA trades slightly down to around $3.4 on Tuesday after rallying more than 20% since Sunday. The former President Donald Trump-based memecoin is poised for further gains as daily active addresses and network growth metrics rise, signaling increased network usage and adoption.

More Meme Coins News
Bitcoin ETFs beat Gold ETFs with 65% gain since launch

Bitcoin ETFs beat Gold ETFs with 65% gain since launch

Bitcoin ETFs have reshaped the digital asset investment landscape since their approval in January. Their total assets under management climbed over $70 billion during the weekend, placing them ahead of other investment products, including gold.

More Bitcoin News
XRP eyes 10% rally amid relisting across crypto exchanges and growing institutional demand

XRP eyes 10% rally amid relisting across crypto exchanges and growing institutional demand

Ripple's XRP is trading at $0.5050 up slightly by 0.2% in the past 24 hours as it struggles to sustain a move above a key symmetry triangle resistance. Meanwhile, in its recently released Q3 report, Ripple noted the rising listing and relisting of XRP across crypto exchanges and global platforms.

More Ripple News
Ethereum Price Forecast: ETH struggles below $2,500 amid State of Michigan pension fund investment in ETH ETF

Ethereum Price Forecast: ETH struggles below $2,500 amid State of Michigan pension fund investment in ETH ETF

Ethereum is trading near $2,420, down about 1% on Monday, but could bounce off a key descending trendline close to the $2,258 historically high demand zone. Meanwhile, the State of Michigan pension fund revealed an investment of $11 million in ETH exchange-traded funds.

More Ethereum News
Bitcoin: New all-time high at $78,900 looks feasible

Bitcoin: New all-time high at $78,900 looks feasible

Bitcoin price declines over 2% this week, but the bounce from a key technical level on the weekly chart signals chances of hitting a new all-time high in the short term. US spot Bitcoin ETFs posted $596 million in inflows until Thursday despite the increased profit-taking activity.

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP