Ethereum co-founder Vitalik Buterin has published a bold new research proposal aimed at solving one of the blockchain’s most persistent scaling challenges: the state size problem. His approach envisions moderately expanding the existing Ethereum state while introducing cheaper, constrained forms of state for specific use cases such as token balances and NFTs, paving the way toward potentially 1,000× scalability gains.
Why State Scaling Matters
Ethereum must scale three core resources to grow: execution, data, and state. While execution and data have relatively clear paths to large improvements through zero-knowledge virtual machines and data availability technologies, state—the blockchain’s database of accounts, contract storage, balances, and code—remains the hardest to scale. Buterin explained that even dramatically scaling block execution and data throughput still leaves the state with immense growth. At current rates, Ethereum’s state grows by around 100 GB per year, and a 20× expansion would push this into multi-terabyte territory within a few years, burdening node operators and risking centralization.
A Hybrid State Strategy
Buterin’s proposal avoids a one-size-fits-all approach. Instead, it predicts the future Ethereum state will evolve into multiple tiers:
- Permanent state — for core accounts, smart contract code, and critical DeFi infrastructure.
- Cheaper and restricted state forms — for repetitive user-centric objects such as ERC-20 token balances, NFTs, short-lived event data, and collateral positions.
- Temporary or UTXO-style storage — designed to reset periodically or behave like inputs/outputs in Bitcoin-style models.
This multi-tiered architecture would give developers choices: stick with the current state model for full flexibility, or opt into the newer, cost-efficient mechanisms where appropriate. Buterin argued that many everyday constructs like token balances or individual positions are well suited for these restricted state systems, which could dramatically reduce long-term storage costs and node resource requirements.
What This Means for Ethereum Applications
Under the plan, Ethereum applications could transition gradually:
- Existing core contracts and composable DeFi protocols would remain in full permanent state to preserve backward compatibility and interoperability.
- Items like user token balances, collectible NFTs, and short-term game or event state could move to the cheaper tiers over time.
- Temporary storage might reset monthly or follow UTXO-like workflows to minimize cumulative storage needs.
This design aims to strike a balance: not breaking existing contracts while still enabling much higher scale without forcing all users into new state paradigms overnight.
Developer Choice and Ecosystem Impacts
Buterin highlighted that developers will decide how much to leverage the new state types. Standard tools and workflows are expected to emerge for common patterns like handling ERC-20 token data or NFTs in cheaper storage tiers, while more complex applications may innovate tailored strategies to fit these new constraints.
The proposal reflects growing consensus in the community that Layer-2 rollups and sharding alone are not enough to sustainably scale Ethereum’s Layer-1 (L1) without rethinking state architecture. Buterin’s model is positioned as a pragmatic future for Ethereum’s core ledger, emphasizing incremental compatibility and developer agency.
Looking Ahead
While the proposal does not immediately change Ethereum’s protocol, it sets a bold roadmap for future research, client development, and community discussion. Many analysts view the tiered state idea as a potential turning point in long-term Ethereum scaling strategy—especially as ecosystem activity continues to grow and mainstream adoption accelerates.
Key Takeaways
- Vitalik Buterin proposes adding new lower-cost state tiers alongside Ethereum’s existing state model.
- High-value and composable items like smart contracts and accounts stay in permanent state; smaller per-user items can move to cheaper, restricted forms.
- The proposal aims to unlock massive state scalability while preserving backward compatibility and developer flexibility.
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