Ethereum Foundation researcher Toni Wahrstätter published a new design this week that treats payments as one-shot objects rather than permanent state records. According to the researcher, this approach cuts permanent state for payment workloads by roughly 99.8%. A fresh account entry currently occupies around 100 to 150 bytes, while a native UTXO leaves only about 0.3 bytes behind. The proposal introduces native UTXOs that would exist mainly in transaction history rather than permanent blockchain state, with each UTXO including a source account, payment value, recipient address, and a protocol-assigned index to prevent double spending. Instead of permanently storing every payment, the proposal records UTXO creation in event logs, with cryptographic proofs maintained through per-block commitment roots. The design also integrates with the proposed EIP-8141 Frame Transactions architecture, allowing UTXO inputs, account transfers, sponsorship mechanisms, and gas payments to be processed in a single transaction flow. The research document identifies a structural cost in Ethereum's account model: every time a new address receives ETH or an ERC-20 token for the first time, it generates permanent state storage that accumulates indefinitely as the user base grows.
Cardano founder Charles Hoskinson responded to the proposal in his latest YouTube video, claiming that Ethereum developers refuse to acknowledge his project's work. As reported by Hoskinson, he stated that 'EUTXO is the biggest innovation of the smart contract world and Ethereum cannot mention it as they literally try to copy it.' He added that mentioning Cardano is 'literally a crime' in Ethereum's inner circles. In a July 7 tweet, Hoskinson said: 'It's not like I've been literally working on this topic for over 10 years of my life and launched a cryptocurrency that was number three on CoinMarketCap with millions of users to deploy it.' Hoskinson followed up his X post with a livestream where he read Wahrstätter's proposal announcement and pointed out that it made no reference to Cardano despite his network spending years solving many of the engineering problems that Ethereum is now exploring. 'For ten years, we've worked on extended UTXO, smart contracts on UTXO,' Hoskinson said, referencing their paper called Chimeric Ledgers that shows how to run these two systems in parallel. Hoskinson argued that Ethereum has repeatedly dismissed Cardano's innovations before later adopting similar concepts, pointing to Cardano's on-chain governance, treasury system, and the Ouroboros consensus family as examples of technologies Ethereum could eventually embrace. He also highlighted Cardano's privacy-focused Midnight project and suggested that Ethereum will eventually move from hash-based cryptography to lattice-based cryptography as part of its post-quantum security roadmap.
The main irony of this dispute lies in the technical origins of the UTXO model itself. The UTXO model belongs to Bitcoin, but Bitcoin has no smart contracts - it operates as a simple wallet system. Cardano, however, took this mechanism as its foundation from the beginning and expanded it into eUTXO in order to run complex applications. As reported by u.today, Hoskinson noted that 'It's not like I've been literally working on this topic for over 10 years of my life and launched a cryptocurrency that was number three on coinmarketcap with millions of users to deploy it.' Unlike Bitcoin's UTXO, Cardano's design incorporates datums, redeemers, and script context, allowing smart contracts to function as deterministic local state machines without needing to access the global blockchain state. This determinism is key, as a transaction's validity relies solely on its inputs, leading to predictable fees and enhanced parallelism across UTXO sets, while minimizing front-running risks. The technical challenge lies in combining two different architectural models, as combining account-based and UTXO systems creates compatibility risks for already functioning DeFi applications. Wahrstätter's design remains a research post with no formal EIP existing yet, and any change of this scale would require community review plus a hard fork, meaning the coming months will show how far Ethereum moves into the model Hoskinson claims as his own. The proposal aims to improve Ethereum's scalability and state efficiency by adding UTXO-style payment mechanics alongside its existing account model, not replacing it.
Ethereum price has experienced volatility following the latest ecosystem drama, with the token currently trading around $1,730 after moving between $1,710 and $1,785 during the past day. Over the last week, ETH climbed as high as $1,830 before slipping back, showing buyers are still present even if they are no longer chasing every green candle. The first level to beat remains $1,820 to $1,830, which ETH has tested multiple times and keeps getting turned away. On the downside, $1,700 to $1,725 has been the spot where buyers continue showing up, with a break below this level potentially changing the market mood quickly. If ETH climbs back above $1,830, the conversation quickly shifts to $2,000, while a close below $1,700 could drag the price toward $1,600. ETH currently trades 64% below its all-time high, with the upside math remaining compelling on paper but requiring a full-cycle bull run that may not materialize in the near term. Meanwhile, ADA is outperforming ETH on the day, up +0.7% over the past 24 hours, compared to Ethereum's +0.4% over the same timeframe, as reported by 99Bitcoins.
This episode highlights a fundamental tension within the blockchain ecosystem regarding state management models. The choice between account-based and UTXO approaches remains one of the most fundamental trade-offs for any Layer 1 blockchain. The account model favors composability for DeFi protocols, while EUTXO offers valuable determinism for security and formal verification. If Ethereum were to integrate native UTXO functionality, it would represent a major architectural shift potentially comparable in complexity to the transition to Proof-of-Stake. The implications for dApp developers, wallets, and existing DeFi protocols would be considerable, and the Ethereum community is far from having reached consensus on this direction. For Cardano, this discussion represents the indirect validation, suggesting the EUTXO model possesses properties compelling enough to attract attention from the world's largest smart contract platform. Dori, a figure in the Cardano community, asserted that Ethereum's permanent state growth creates structural weaknesses by increasing node storage costs and concentrating validation power. He linked Ethereum's account model to issues like MEV, reentrancy attacks, and limits on parallel transaction processing, suggesting that eUTXO design effectively addresses these problems. The debate over blockchain architecture focuses on trade-offs relevant to specific use cases, while Ethereum's account model offers an advantage in synchronous DeFi composability, which is crucial for complex multi-step financial transactions.
