Ethereum Remains Below $2,500 As Developer Proposes New EIP To Increase DEX Yield & Efficiency

• Ethereum will see a 50% speed increase and improved DEX efficiency if a new proposal is approved.
• EIP-7781 is already receiving support from key members of the Ethereum community.
• Ethereum maintained its consolidation below the $2,500 level after posting a Doji candle.

Ethereum (ETH) is up slightly by 0.1% on Monday following the appearance of a Doji candle, indicating a potential price trend reversal. The potential price change follows a new Ethereum Improvement Proposal (EIP) EIP-7781, which aims to reduce slot times and increase network speed by around 50%.

Ethereum’s new proposal to increase DEX yield and efficiency

The new EIP-7781, originally proposed by Illyriad Games co-founder Ben Adams, aims to increase Ethereum yield by 33% through a process that will reduce the time interval from 12 seconds to 8 seconds. Slot times are intervals at which validators propose new blocks to the Ethereum network.

Decreasing the time interval also implies a reduction in the based accumulation latency. Based rollups are a new type of rollup that uses the main chain for transaction sequencing, unlike optimistic and ZK rollups.

The changes also involve an increase in the number of blobs – a data structure for storing L2 transactions introduced in the March Dencun – from 6 to 8, or an increase in the gas limit from 30 million to 40 million.

EIP-7781 is already receiving support from key members of the crypto community, including Ethereum researcher Justin Drake, who said the proposal will improve speed by 50% and make decentralized exchanges like Uniswap v3 1.22 times more efficient. Such efficiencies could translate into $100 million in savings from price discrepancies that arbitrageurs take advantage of, “ultimately leading to better execution for users.”

While many have expressed concern about the potential hardware requirements of implementing the proposal, Adams noted that it could achieve these benefits without increasing peak bandwidth.

EIP-7781 will go through the Ethereum governance voting process before developers can take the next step towards its implementation.

Meanwhile, Ethereum ETFs globally saw a net outflow of $29 million last week, according to CoinShares data.

Ethereum is consolidating below the $2,500 level following the key indecision candle

Ethereum is trading around $2,450 on Monday, slightly higher on the day. The top altcoin has sustained close to $57 million worth of liquidations in the past 24 hours, with long and short liquidations accounting for $41.23 million and $15.75 million, respectively.

ETH is consolidating in a key rectangular channel after retracing around the psychological $2,500 level, posting a Doji candle on the 4-hour chart.

ETH/USDT 4 Hour Chart

Doji candles are formed when the opening and closing prices of an asset are almost the same. The candle represents indecision among traders and could signify a potential trend reversal. As a result, ETH could see a short break from support near $2,395.

The bearish move is supported by prices breaking below the convergence of the 50- and 100-day simple moving averages (SMA) near $2,470.

The Relative Strength Index (RSI) and Stochastic Oscillator (Stoch) momentum indicators are slightly below their neutral levels, indicating bearish momentum among traders.

A daily candlestick close below $2,395 will invalidate the thesis.