Ethereum’s four-minute settlement plan could lower the cost of moving crypto

Ethereum researchers are proposing to reduce the time it takes for a transaction to become final, from the current average of 16 minutes to approximately four minutes. This could potentially lower the costs associated with moving cryptocurrency between blockchains. Ben Edgington, who leads Ethereum's fast-finality research, along with colleagues Francesco D’Amato, Roberto Saltini, Yann Vonlanthen, and Mikhail Kalinin, submitted the draft proposal on Wednesday.

Currently, a transaction can be included in an Ethereum block before the network considers it finalized, which is the point where validators commit to never changing it. Participants moving funds to another network have to decide when it's safe to release the money. By shortening the finality time, services can free up funds sooner, thus reducing idle money costs.

For instance, a service holding $1 million an hour would save about $200,000 in waiting money if the finality time were reduced from 16 minutes to four minutes. Stablecoin providers like Circle, which issues the USDC stablecoin, already charge for faster transfer options. If the four-minute finality is implemented, the cost for fast transfers could drop significantly.

The current 16-minute finality time is based on how Ethereum validators cast their votes, with each validator casting a single vote that helps both pick the next block and lock older blocks in place. By splitting the votes, the researchers suggest that the locking-in process could run at a faster speed, eventually allowing for the implementation of quantum-resistant signatures.

However, the proposal is still in draft form, with many details, including voting timings and security analysis, yet to be finalized.