Ethereum developers are exploring a native UTXO payment model similar to Cardano’s Extended Unspent Transaction Output (EUTXO) system, a move that Cardano founder Charles Hoskinson sharply criticized for lacking proper credit. The idea surfaced after Ethereum Foundation researcher Toni Wahrstätter proposed a way to drastically reduce permanent state use by 99.8% for specific payment tasks.
Ethereum’s Proposal Sparks Controversy
Wahrstätter introduced the concept of native UTXOs as temporary payment objects, which contrasts with Ethereum’s current account model that creates permanent account records. This approach is intended to reduce network bloat a long-standing issue for Ethereum by cutting the need for permanent state retention. The proposal ties into Ethereum’s Frame Transactions standard, EIP-8141, supporting Vitalik Buterin’s Lean Ethereum plan that aims to simplify and streamline the network.
Despite being still in the research phase and not yet formally submitted as an Ethereum Improvement Proposal, the idea caught Hoskinson’s attention. He stated that Ethereum is effectively copying Cardano’s decade-old EUTXO architecture without giving due recognition. Hoskinson emphasized the importance of the EUTXO model, which extends Bitcoin’s UTXO framework to enable smart contracts with more deterministic and predictable transaction execution. He pointed to a Cardano paper, "Chimeric Ledgers," which outlined combining UTXO and account-based systems years before Ethereum’s current proposals.
Hoskinson highlighted that the deterministic nature of Cardano’s transactions helps reduce failures and network congestion, creating a safer environment for decentralized finance applications. He also noted that within Ethereum’s community, mentioning Cardano is often discouraged, which he called "literally a crime." This episode adds to Hoskinson’s ongoing critique of Ethereum’s architecture and governance, including the absence of an on-chain treasury for sustainable development.
The conversation around Ethereum’s evolving design echoes challenges faced across blockchain networks striving for scalability and efficiency. For instance, some networks supported by Tether aim to cut billions in fees by backing rival chains, while Ethereum NFT projects show dynamic revenue shifts compared to competitors. These ongoing developments highlight the shifting landscape where innovation often involves borrowing and adaptation.
