Vitalik Proposes Keyed Nonces for Ethereum State Scalability, Addressing 500B Nullifiers Problem

According to Foresight News, Vitalik Buterin recently proposed Keyed Nonces, a new mechanism that could enhance Ethereum’s state scalability while supporting on-chain privacy solutions. The proposal addresses a critical storage challenge: if on-chain privacy transactions maintain 2,000 TPS over eight years, they will generate approximately 500 billion nullifiers that cannot be pruned. Storing all nullifiers in the existing general-purpose state would impose significant pressure on node storage and decentralization. Keyed Nonces creates dedicated storage types tailored to specific use cases, such as sharded storage where nodes hold only partial data, or Bloom Filter optimization reducing verification overhead to approximately 8 bits per nullifier. Buterin suggested migrating most use cases to more specialized, cost-efficient storage while preserving full dynamic state for applications requiring high flexibility, such as DeFi.