An enormous surge is expected for the Ethereum network as the project’s co-founder and crypto enthusiast Vitalik Buterin has unveiled a new feature for the Ethereum blockchain that promises to speed up transaction confirmations times significantly. The new Single Slot Finality (SSF) feature has the potential to make Ethereum transactions very instantaneous, by streamlining the consensus-building process on the network.

Ethereum Network Transactions Sees Major Upgrade

With Ethereum continuing to develop, Vitalik Buterin‘s announcement emphasizes the continued efforts to address problems with efficiency and scalability. Single Slot Finality’s (SSF) debut is a critical step in improving the network’s ability to process more transactions swiftly and safely.​ 

Buterin revealed the latest innovative solution in a blog post titled “Epochs and slots all the way down: ways to give Ethereum users faster transaction confirmation times.”

Presently, Ethereum‘s Gasper consensus employs a slot and epoch architecture. With this system, a subset of validators can broadcast a vote on the head of the chain every 12 seconds, and all validators have 32 slots (6.4 minutes) to vote. After two epochs (12.8 min), these votes are reinterpreted as messages in a consensus mechanism that resembles PBFT and provides a solid economic guarantee known as finality.

Due to the existing approach’s drawn-out procedure, users have grown increasingly uneasy with it over the past few years. This is because the slot-by-slot voting method and the epoch-by-epoch finality mechanism are intricate and common with interaction flaws and 12.8 minutes is an excessively long time, as no one is interested in waiting that long.

However, with the introduction of the Single Slot Finality, all of this is about to change, as the SSF will supersede this approach with a process more akin to Tendermint consensus where block N is finalized prior to block N+1 being made. The primary distinction with Tendermint is that users can maintain the “inactivity leak” method, which keeps the chain alive and helps it recover in the event that over one-third of the validators go offline.

Although the new feature promises swift transaction time for the Ethereum network, there are also challenges it could face. Utilizing the initiative ignorantly will suggest that every Ethereum staker would have to post two messages every 12 seconds, potentially putting a huge burden on the chain.

Two Distinct Preconfirmations System

According to the blog post, the SSF feature boasts of two distinct approaches which include the Rollup preconfirmations and the Based preconfirmations. 

The Rollup confirmations generate a division of concerns within the Ethereum ecosystem. As a result, ETH layer 1 solutions will concentrate on being censorship-resistant, trustworthy, stable, and preserving and enhancing a specific fundamental core of functionality, while layer 2s will focus on engaging with users directly by making different technological and cultural compromises.

Meanwhile, the Based preconfirmations strategy assumes that ETH proposers would develop into highly skilled players for MEV-related purposes. By providing incentives for these knowledgeable proposers to take on the duty of offering preconfirmations-as-a-service, the approach capitalizes on this expertise.

Featured image from Adobe Stock, chart from Tradingview.com

On-chain data shows the Ethereum long-term holders have recently been increasing their total share of the cryptocurrency’s supply.

Ethereum HODLers Currently Carry The Majority Of ETH Supply

According to data shared by the market intelligence platform IntoTheBlock in a post on X, the Ethereum long-term holder supply has been on the rise recently. The “long-term holders” (LTHs), as defined by IntoTheBlock, refer to the ETH investors who bought their ETH more than a year ago.

Statistically, the longer an investor holds onto their coins, the less likely they become to sell at any point. As such, these LTHs, who tend to hold for long periods, include the investors least probable to sell in the market.

One way to keep track of the behavior of these HODLers is through the total amount of supply held by them. The below chart shows the trend in this supply for Ethereum since the start of the year 2024.

Looks like the value of the metric has been going up over the last few months | Source: IntoTheBlock on X

As is visible in the above graph, the Ethereum LTH supply has been riding an uptrend this year so far. This increase has continued in the last few weeks, with the metric even noticing a jump sharper than usual.

Something to note, though, is that when this indicator goes up, it doesn’t signify that these HODLers are buying in the present. Rather, it implies that some accumulation occurred a year ago and these coins have now matured enough to become a part of the cohort.

Nonetheless, an increase in the indicator is still naturally a bullish sign for the cryptocurrency, as it suggests that HODLing behavior is growing among the investors.

Following the latest rise, the Ethereum LTHs hold around 78% of the entire circulating supply of the asset. This means that a majority of the supply is currently locked in the hands of these holders who don’t easily sell.

While ETH has been seeing this bullish development in terms of its LTHs, the same hasn’t been true for Bitcoin. As the analytics firm has pointed out in another X post, the BTC HODLers have been shedding their supply throughout the year.

The value of the metric appears to have been going down recently | Source: IntoTheBlock on X

Whereas buying has a one year delay, selling doesn’t have the same quirk attached to it. This is due to the fact that coins have their age reset to zero as soon as they are transferred on the blockchain, so they are instantly removed from the group.

In May, the Bitcoin LTHs sold around 160,000 BTC, worth a whopping $10.1 billion at the current exchange rate. Their selling did slow down last month, though, as they distributed about 40,000 BTC ($2.5 billion).

ETH Price

At the time of writing, Ethereum is floating around $3,500, up more than 5% over the last seven days.

The price of the asset seems to have been on the rise over the last day or so | Source: ETHUSD on TradingView

Featured image from Dall-E, IntoTheBlock.com, chart from TradingView.com

On-chain data recently showed that the Ethereum staking has experienced significant growth over the last month. This undoubtedly presents a bullish outlook for the Ethereum ecosystem, which is already oozing with a lot of bullish sentiment heading into July. 

Almost 60,000 Unique Depositors Join Ethereum Network

Data from the on-chain analytics platform CryptoQuant shows that 59,894 new depositors have joined ETH’s staking network since May 20. Interestingly, this significant increase began around the time Bloomberg analysts James Seyffart and Eric Balchunas increased their approval odds for the Spot Ethereum ETFs to 75%. 

This again highlights the Spot Ethereum ETFs’ positive impact on ETH, although they haven’t begun trading. Thanks to these funds, the network has achieved a 4% increase in staking participation in just over a month. Increased staking participation is bullish for ETH, making the network more decentralized. 

Furthermore, the increase in the number of new depositors will also reduce ETH’s already dwindling circulating supply since these depositors have to lock up a significant amount of ETH to become validators on the network. Data from Dune Analytics shows that over 33 million ETH is locked up, representing almost 28% of Ehereum’s total supply. 

ETH’s Supply Side Paints A Bullish Picture

A reduction in Ethereum’s circulating supply is a bullish fundamental since it helps reduce the impact of any potential selling pressure on the crypto token. The positive impact of these locked-up tokens also becomes more evident as the demand for Ethereum increases since ETH’s price will bow to the dynamics of supply and demand. 

ETH’s distribution also paints a bullish picture for the crypto token. Data from the market intelligence platform IntoTheBlock shows that about 78% of ‘s supply, including staked ETH, is held by long-term holders, those who have been holding the crypto token for over a year. 

This shows that Ethereum’s supply is concentrated in the hands of individuals who are unlikely to offload their holdings anytime soon. This is significant, considering institutional investors are set to increase ETH’s demand once the Spot Ethereum ETFs begin trading. These funds are expected to start trading this month. 

Balchunas recently suggested that these Spot Ethereum ETFs could begin trading soon after July 8. Balchunas and Seyffart had previously predicted that these funds could begin trading by July 2. However, Balchunas noted that the Securities and Exchange Commission (SEC) had taken extra time to get back to the Spot Ethereum ETF issuers, so they had to change their timeline for when these funds would launch. 

Bitwise’s Chief Investment Officer Matt Hougan recently predicted that these Spot Ethereum ETFs could attract $15 billion in their first 18 months of trading. 

At the time of writing, ETH is trading at around $3,470, up over 2% in the last 24 hours, according to data from CoinMarketCap. 

Featured image created with Dall.E, chart from Tradingview.com