Ethereum Seeks to Cut Permanent State Usage with Native UTXO Proposal

Ethereum researchers are exploring ways to reduce permanent state usage on the network, and a new proposal suggests using native UTXOs (unspent transaction outputs) could cut this usage by 99.8%.

The current account model creates a permanent entry in Ethereum's state for each receiving ETH or ERC-20 transaction, which can lead to significant growth in the network's state. However, some transactions only require temporary storage and do not need to be stored permanently.

The proposed native UTXO system would record payment details in transaction history and retain only whether each UTXO has already been spent, reducing the permanent state usage for payment workloads by an estimated 99.8%.