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Ethereum co-founder Vitalik Buterin recently sparked a conversation about EIP-7708, a significant update to Ethereum’s infrastructure. This proposal could solve a long-standing issue with tracking ETH transfers across different transaction types that has plagued the network for years.
EIP-7708 is designed to introduce a new logging mechanism for Ethereum transfers from both regular accounts and smart contracts. This proposal aims to output a log every time an ETH transfer occurs, regardless of whether the transaction occurs through a regular transaction, a smart contract CALL or a SELFDESTRUCT action.
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Logs are currently valid for tracking ERC-20 token transfers, but not native ETH transfers. While transactions from regular Externally Owned Accounts (EOAs) appear in the transaction list, transfers from smart contract wallets are difficult to track and often present complications. In the past, exchanges have sometimes experienced significant delays or been unable to properly recognize ETH deposits from smart contract wallets.
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EIP-7708 proposes that the network automatically generate logs that follow a standardized format whenever ETH is transferred. The logs contain three important data points: the sender address, the recipient address, and the amount of ETH transferred. This change will allow developers, exchanges, and users to more effectively track ETH movements, making it easier to track all ETH transfers in a unified system.
The biggest benefit of EIP-7708 is that it simplifies how ETH transfers are logged and tracked, which is especially important for developers and exchanges. This makes it easier to monitor all transfers through a single mechanism and brings Ethereum’s ETH tracking capabilities more in line with the ERC-20 token standard.
There are still some open questions regarding this proposal, such as whether the log should also include fee payments and withdrawals. While their inclusion may increase transparency, it also significantly increases the number of logs, raising concerns about performance and storage efficiency on the blockchain.
