Author: Sophia Cruz

Vitalik Buterin thinks it’s time to dump something he built. The Ethereum co-founder says modular exponentiation precompile, or modexp, is slowing down scaling and causing problems for zero-knowledge proof systems.

The problem is serious. When generating zero-knowledge proofs, modexp creates verification delays up to 50 times worse than average blocks. Buterin admitted on X that he “bows his head in shame” as the original inventor of the feature, but says it’s time to replace it.

Zero-knowledge EVMs generate cryptographic proofs that validate Ethereum computations off-chain. This enables faster transaction processing without compromising security. But the prover component responsible for creating these proofs struggles badly with modexp operations, which are mainly used in RSA encryption and signing functions.

Here’s the catch: only about 0.01% of Ethereum users actually need modexp functionality. Buterin argues that instead of investing resources to optimize a feature almost nobody uses, Ethereum should replace it with standard EVM bytecode. This would increase gas costs for those few users but dramatically reduce proof generation complexity for the entire network.

Applications that need modular exponentiation could wrap their operations in SNARKs, an alternative cryptographic proof system that handles the inefficiency better. Buterin’s proposal prioritizes ecosystem stability and scaling progress over maintaining legacy features with narrow use cases.

The proposal changes how Ethereum handles cryptographic operations that bog down zero-knowledge proof systems. The Foundation keeps bringing up privacy these days. Back in October, they warned that without better privacy protections, Ethereum could end up as “the backbone of global surveillance rather than global freedom.”

Last month, Buterin detailed GKR, a cryptographic technique that verifies calculations ten times faster than traditional methods. The protocol processes 2 million calculations per second on standard laptops and can validate entire Ethereum transactions using just 50 consumer graphics cards, compared to traditional methods requiring 100 times more computational work.

That breakthrough matters because faster verification means cheaper transactions and better privacy across the network. The modexp proposal fits into this broader push to make Ethereum more efficient for privacy-preserving technologies.

Getting rid of modexp won’t be popular with everyone. Some developers built applications around it. Buterin’s fine with that trade-off if it speeds up Ethereum’s privacy and scaling plans.

Ethereum climbed to $4,716 on Tuesday before dipping back down. That caps off a strong week where the token gained roughly 11%. After a rough September that saw prices dip below $4,000, the recovery has been sharp.

Trading activity tells part of the story. Daily volumes are running at about $40 billion right now. Ethereum’s market cap is back around $570 billion. Bitcoin’s recent push to new record highs has certainly lifted the whole space, but Ethereum’s rebound stands out among the majors.

What’s getting attention is the return of institutional buyers. U.S.-listed Ethereum ETFs pulled in around $177 million on Monday. Over the last six trading days, these funds have seen close to $1.5 billion in net inflows. That’s not just a one-off spike. It points to real money coming in with a longer view.

The charts are looking better too. Ethereum broke above a downtrend that kept it stuck through most of September. It’s also holding above its 30-day average around $4,300, which used to be a ceiling. Now it looks more like a floor. Momentum gauges are sitting in the middle, so there’s still space to move higher if buyers stick around.

Traders are now focused on whether $4,700 can hold as support. If it does, a test of $5,000 comes into play. That’s a level Ethereum last saw mid-year before sellers took over. On the downside, there’s support between $4,100 and $4,200. Stronger buying would probably show up closer to $3,800 if things pull back that far.

The big variable is whether ETF money keeps flowing in. If institutions stay active through October, this could turn into something more durable than the usual volatility we’ve seen. That would be a shift worth watching.

For now, the combination of better price action and steady institutional interest has Ethereum set up for a possible run at key levels above. Whether it gets there depends mostly on how long this buying appetite lasts.

Ethereum’s been swinging around $3,800 as traders wait for the US inflation report. Trading volume jumped 33%, showing people are ready to move but also nervous about which way this goes.

The Ethereum Foundation moved $650 million recently, which kicked off about $700 million in profit-taking and liquidations of long positions. Analysts see two paths from here: a breakout toward $5,000 or a drop to $2,850 if support cracks.

Crypto markets are stuck in neutral right now. Ethereum dropped about 4.8% over the past week while Bitcoin sits just above $108,000. Everyone’s waiting on the Consumer Price Index release to see where things head next.

Spot Ethereum ETFs aren’t helping. They shed $145 million in a single Monday after losing roughly $311 million the week before. On October 22 alone, outflows hit $18.77 million. ETF trackers show money leaving in six of the past eight trading days.

Those outflows matter because they show institutions backing away from ETH through regulated products. Even with Ethereum’s fundamentals intact, the lack of fresh ETF money creates a gap and points to weak short-term confidence.

The US inflation data is the big event everyone’s watching. The government shutdown delayed the release to October 24, making it the next major macro catalyst. If inflation runs hot, it could kill hopes for rate cuts and hurt risk assets like Ethereum. A cooler reading might bring buyers back.

Ethereum isn’t just reacting to crypto news anymore. It’s tied to broader macro signals. The ETF outflows and price consolidation suggest many traders are sitting on their hands until they see that inflation number.

Ethereum pushed for $4,000 but couldn’t get through. That $4,000 to $4,300 range keeps bringing out sellers every time. Now back around $3,800, some analysts warn of a correction toward $3,100 if buyers don’t show up. Technical charts point to a bear flag pattern, which usually means more downside if momentum builds that way.

A clean break above $4,000 would flip sentiment bullish. But negative buying volume on spot exchanges suggests the current price doesn’t have strong conviction behind it.

Right now, institutions are picking Bitcoin over Ethereum. Bitcoin funds recovered quicker from the outflows. Ethereum’s institutional backing? Not as solid. You’ve got Bitcoin as the go-to risk play, while Ethereum deals with more short-term questions even though its ecosystem is strong.