Podcast Summary
Exploring Ethereum's Roadmap and Focus on Censorship Resistance: Ethereum's commitment to censorship resistance and its comprehensive roadmap, including six parallel paths, position it as a crucial component of the future Internet as a property rights system. Key developments like TOKU and Mantle offer solutions for managing token grants and stable, cost-effective Ethereum layer 2 solutions.
Ethereum's prioritization of censorship resistance sets it apart from other platforms and is crucial for the future of the Internet as a property rights system. The Ethereum roadmap, as outlined in a comprehensive update by Vitalik, includes six parallel paths towards the next 3-5 years. Two guests, Dom and Mike, were brought in to discuss the deep parts of this roadmap. Ethereum is seen as one of the most important computers humanity has ever made, and its focus on censorship resistance ensures that financial freedom and inclusion can be achieved in a world that increasingly values these principles. The episode provides a comprehensive overview of Ethereum's future and is a must-listen for anyone interested in the world of Internet money and finance. Additionally, the importance of tools like TOKU for managing token grants and the emergence of ecosystems like Mantle, which offer stable and cost-effective Ethereum layer 2 solutions, are key developments in the Ethereum space.
Exploring Different Aspects of Ethereum Roadmap: Data Sharding and MEV: Ethereum researchers Dom and Mike are focusing on data sharding (EIP 4844) and MEV respectively, with significant EIPs like EIP 4844 and EIP 4788 in upcoming Ethereum upgrade, Dankshrine.
Ethereum researchers Mike and Dom, who have previously appeared on the Bankless podcast, are currently focusing on different aspects of the Ethereum roadmap. Dom has been working on educational content related to Ethereum Improvement Proposals (EIPs) such as EIP 4844, which is a part of the data sharding roadmap for scaling Ethereum. Mike has been focusing on the MEV (Maximal Extractable Value) space, which is considered a scourge in Vitalik's roadmap. The upcoming Ethereum upgrade, Dankshrine, includes significant EIPs like EIP 4844 and EIP 4788. EIP 4844 aims to increase Ethereum's data throughput by introducing BLOBs (Binary Large Objects) and has a high confidence of being implemented on Mainnet by March 13th. EIP 4788 adds the beacon root inside the EVM, allowing the EVM to be aware of the consensus layer on the beacon chain and reducing the need for trust in protocols like Lido and Rocket Pool. These are just a few of the many exciting developments happening in the Ethereum ecosystem.
Ethereum's Merge and Surge: First Steps Towards a More Scalable and Robust Platform: Ethereum's Merge and Surge are the first steps in a larger vision for Ethereum's future, focusing on reducing reliance on oracles, making consensus more robust, and providing data availability for roll-ups, all crucial for Ethereum's scalability. These upgrades are part of a six-part strategy, with the Merge and Surge being the first three 'Urges'.
The Ethereum network is undergoing significant upgrades, starting with the Ethereum Improvement Proposal (EIP) 4844, also known as the Merge and the Surge. These upgrades aim to reduce reliance on trusted oracles, make consensus more robust, and provide data availability for roll-ups, which are crucial for Ethereum's scalability. The Merge focuses on the continuation of proof-of-stake evolution for Ethereum, making it more robust and stable. The Surge is about data availability, a key component of Ethereum's stack, which is essential for the roll-up centric roadmap. Furthermore, these upgrades are part of a larger vision for Ethereum's future, as outlined in the "Endgame" episode with Vitalik Buterin two years ago. This vision is organized into six horizontal swim lanes, or "Urges," each with a specific goal. The Merge and the Surge are the first three Urges, with the remaining three being the Verge (focused on privacy), the Purge (focused on reducing waste), and the Splurge (focused on experimentation and innovation). Together, these upgrades and Urges represent Ethereum's long-term strategy for becoming a more robust, scalable, and accessible platform for decentralized applications.
Ethereum's Development Roadmap: The Merge, The Surge, The Scourge, The Purge, and The Splurge: Ethereum's development roadmap includes transitioning to PoS, scaling, addressing MEV, simplifying protocol, and additional improvements happening in parallel, led by a decentralized ecosystem including core devs, client implementers, and roll-ups.
Ethereum's development roadmap, dubbed "The Merge, The Surge, The Scourge, The Purge, and The Splurge," is a collaborative effort from the entire Ethereum ecosystem, not just the Ethereum Foundation (EF). The merge refers to Ethereum's transition to a proof-of-stake consensus mechanism, the surge focuses on scaling Ethereum's data processing capabilities, the scourge addresses the issue of MEV (Maximal Extractable Value) extractors, the purge simplifies the protocol by eliminating technical debt, and the splurge is a miscellaneous category for additional improvements. These developments are happening in parallel, not sequentially. The ecosystem includes core developers, client implementers, and roll-up and layer-two projects, with the EF acting as a coordinator. This decentralized approach to development and governance sets Ethereum apart from other blockchain projects.
The Ethereum ecosystem's long-term vision: Censorship resistance: The Ethereum ecosystem, with its decentralized and open-source nature, prioritizes censorship resistance and collaboration to build a larger, more secure network. The merge, a significant step towards single slot finality, enhances efficiency and security while preserving solo staking abilities.
The Ethereum ecosystem is a collaborative effort that values decentralization and censorship resistance above all else. The open-source community is working together to build something much larger than what a single team could accomplish, with a long-term vision prioritizing censorship resistance as its most important feature. The merge, a significant event in Ethereum's development, aims to establish robust proof of stake consensus while preserving solo staking abilities. The ultimate goal is single slot finality, ensuring that blocks are produced and finalized simultaneously for a more efficient and secure consensus mechanism. The beauty of Ethereum lies in its open-source nature, where anyone can contribute and work on what they believe is important for the ecosystem's growth. This organic, quasi-life form of development sets Ethereum apart from traditional commercial software development.
Achieving single slot finality in Ethereum merge process: The Ethereum merge process aims to achieve single slot finality, allowing for more consolidated control of validators and reducing the number of signatures that need to be verified, but the current high number of validators is a limiting factor.
The Ethereum network is working towards achieving single slot finality as a key goal in its merge process. This concept refers to the idea that a block will be considered finalized once it has been voted for by more than two-thirds of the stake in the consensus layer, within a single slot or block opportunity. Currently, blocks take a long time to get finalized due to the use of epochs, which divides stake and validators evenly over 32 slots, requiring multiple epochs to reach the 2/3 threshold. The lack of single slot finality can result in a large number of validators, currently numbering at 925,000, each with a hard cap of 32 ETH, leading to an excessive number of messages and increased bandwidth usage. The implementation of single slot finality would allow for more consolidated control of validators, reducing the number of signatures that need to be verified. However, the current high number of validators is a limiting factor in achieving single slot finality as it is not yet feasible to verify the necessary signatures within the 12-second time window.
Ethereum Proposes Max Effective Balance Upgrade: The Ethereum network's upgrade, Max Effective Balance, increases the maximum stake amount for validators, enabling solo stakers to compound interest and move towards single slot finality, enhancing security and settlement assurances.
The Ethereum network is proposing an upgrade called "max effective balance," which allows validators to have different amounts of stake beyond the current minimum of 32 ETH. This change increases the maximum amount of ETH a validator can stake without centralizing the network. The upgrade also allows solo stakers to compound their interest and stake at a more granular level. Max effective balance is a step towards achieving single slot finality, which is important because it provides stronger assurances that transactions are immutable and irreversible on the Ethereum blockchain. This upgrade enhances the security and settlement assurances of the network.
Ethereum's transition to single slot finality brings faster settlement assurances: Ethereum's single slot finality provides maximum security every 12 seconds, contrasting Bitcoin's longer wait time and benefiting Ethereum's layer 2 ecosystems
Ethereum's transition to single slot finality represents a significant upgrade in terms of settlement assurances. This means that all of Ethereum's economic security is placed in a single block, providing maximum security every 12 seconds. In contrast, proof-of-work networks like Bitcoin require more time for transactions to be finalized due to the need for multiple blocks. Ethereum's current system spreads out the finality over 32 slots, leading to a longer wait time. Single slot finality will bring faster settlement assurances, benefiting Ethereum's layer 2 ecosystem, where transactions are settled on Ethereum. Additionally, Ethereum's proof-of-stake system, which creates new ETH based on the amount of total ETH staked, ensures that there is always a reward for validators to join the network, even if almost all of the Ethereum supply is staked. This is a complex issue with significant downstream effects, and researchers are actively exploring the optimal amount of Ethereum supply that should be staked.
Potential Risks of High ETH Staking Rates: High ETH staking rates could lead to loss of its role as a raw component in DeFi, centralization concerns, and Ethereum protocol losing control to external incentives. It's crucial to maintain a balance between staking and keeping raw ETH in the application layer.
As more pressure builds for staking Ether (ETH) due to its use as economic value in various applications, there are potential downsides to consider if the percentage of ETH staked reaches extremely high levels. If almost all ETH is staked, it could lead to a loss of its role as a raw component in decentralized finance (DeFi), potential centralization concerns, and the Ethereum protocol losing control to external incentives. Additionally, if all ETH is solo staked, everyone would be diluted at the same rate, making issuance rewards essentially zero. Instead, it's important to strike a balance between staking and keeping raw ETH in the application layer. The Ethereum community should be aware of these potential risks and monitor the situation closely.
Exploring solutions for Ethereum's challenges through EIP 4844 and PureDAS: Ethereum's community is working on improvements like EIP 4844 and PureDAS to tackle challenges, merge to proof of stake, and enhance scalability and decentralization.
The Ethereum community is actively exploring ways to address current challenges, such as incentive warps and limited data throughput, by considering changes to the issuance curve and implementing new technologies like EIP 4844 and PureDAS. The merge, which shifts Ethereum from proof of work to proof of stake, presents an opportunity to reevaluate monetary policy and optimize security and decentralization. EIP 4844 introduces blob space, a crucial primitive for scaling Ethereum, and PureDAS is a stepping stone towards full dense sharding, enabling more blob space and improved data availability sampling. These advancements aim to enhance Ethereum's position as the leading decentralized application layer without compromising decentralization.
Ethereum's Multi-Step Plan for Scaling Data Availability and Rollups: Ethereum's multi-step plan includes EIP 4844's blobs for 3x block space, Piridass for further blob scaling, and eventual full dank sharding. Ethereum prioritizes decentralization and security, using data availability sampling and efficient DA self-healing.
Ethereum is working on a multi-step plan to scale its data availability (DA) and achieve cheap transactions on rollups through a series of improvements. The first step, Ethereum Improvement Proposal (EIP) 4844, introduced blobs to increase Ethereum's block space by three times. The second step, Piridass, aims to further scale the number of blobs, potentially leading to a 3x increase again. The ultimate goal is to reach full dank sharding, which would require additional improvements and potentially another 2-3 years. Ethereum is prioritizing decentralization and security, understanding that it won't scale as quickly as alternative layer solutions. Data availability sampling and efficient DA self-healing are innovations that come with Piridass, ensuring that rollups can prove they've published data on layer 1 and maintain the same guarantees as layer 1. These techniques are the same as those used in alternative DA solutions, meaning Ethereum is not lacking in this regard.
Ethereum's Decentralization and DA Self-Healing: Ethereum prioritizes decentralization through solo staking nodes, and its efficient DA self-healing ensures trustless guarantees. This process allows nodes to reconstruct missing data and acts like a Sudoku puzzle. Ethereum aims to offer strong guarantees, attracting rollups, while remaining cost-effective to retain them.
Ethereum's decentralization is prioritized through the use of solo staking nodes with low requirements, and the concept of efficient DA self-healing is a solution to ensure trustless guarantees for stakeholders. This self-healing process allows nodes to reconstruct missing data through a peer-to-peer broadcasting system, acting like pieces of a large Sudoku puzzle. As Ethereum's full dank charting (super blobs) is completed, alternative DA systems may become more attractive due to cost efficiency. However, Ethereum's strong guarantees may make it a more desirable choice for rollups that require full layer 1 data. The flexibility of DA allows rollups to easily switch between different DA layers, but the hope is that Ethereum's DA becomes cost-effective enough to retain rollups. Ethereum should aim to be the Manhattan of both block space and blob space, offering strong guarantees and attracting various players in the crypto ecosystem.
Ethereum's future: High-value rollups and improving security: Ethereum prioritizes high-value rollups for censorship resistance and security, optimizing rollups and developing fraud provers and zkEVMs for scaling, and focusing on MEV in the economic supply chain.
Ethereum's future lies in prioritizing high-value rollups, or "Manhattan," while continuing to improve its security and decentralization. These blue chip rollups, which offer the best censorship resistance and security properties, will extend Ethereum's World War 3 resistance to blob space. The coordination and governance layer associated with this roadmap is evolving, with rollup improvement proposals (RIPs) becoming a key instigation point for discussions and innovations. The optimization of roll ups and the development of fraud provers and zkEVMs are crucial steps towards scaling decentralized layer twos. The economic supply chain and value transfer aspect of Ethereum, known as The Scourge, focuses on MEV and is currently undergoing significant developments. Overall, the Ethereum community is working towards a future where high-value, decentralized, and secure rollups coexist with the main Ethereum network.
Addressing Centralization in Ethereum's MEV Market: The Scourge tackles centralization in Ethereum's MEV market by introducing solutions like Electra's inclusion lists, allowing validators to regain control over block space while maintaining MEV rewards.
The Scourge, which refers to managing MEV (Maximal Extractable Value) on Ethereum, is crucial for maintaining a decentralized and censorship-resistant compute platform. MEV, due to its complex nature, resource requirements, and the potential for centralization, has become a significant issue in Ethereum. The current state involves a proposal builder separation, with a small set of centralized parties, called builders, controlling the majority of block building. These builders are skilled in extracting value and conducting arbitrage, making latency a critical metric due to the rapid price movements on centralized exchanges. The Scourge aims to address this centralization by introducing solutions like Electra's inclusion lists, which allow validators to regain control over the block space without sacrificing MEV rewards. Ethereum's longer slot times and high DeFi activity contribute to the prevalence of MEV on the network. The first notable EIP addressing The Scourge is Electra, which introduces forced inclusion at the layer 1, ensuring builders cannot exclude transactions. Inclusion lists have the potential to improve Ethereum's censorship resistance story by reducing censorship at the builder and relay levels.
Addressing centralization in Ethereum's network: Ethereum's inclusion lists and encrypted mempools decentralize validation and ensure fair transaction processing, reducing the need to trust individual builders.
Ethereum's inclusion lists and encrypted mempools are significant steps towards addressing the centralization issue in the network, particularly with regard to block builders' power to censor transactions. The inclusion list ensures validators include all transactions, regardless of nature, and acts as a way to decentralize the validation process. Encrypted mempools, on the other hand, hide transaction information from builders, preventing them from exploiting it for profit and ensuring a fair transaction processing system. SwaVE, a project by Flashbots, aims to create a builder-less block building mechanism using encrypted mempools and trusted execution environments, further reducing the need to trust individual builders. Ultimately, these developments contribute to maintaining Ethereum's censorship-resistant and permissionless nature.
Decentralized Finance Faces New Challenge: Minimum Extractable Value: MEV poses a threat to decentralization in DeFi, but solutions like Arbitrum, Celo, and initiatives like Flashbots and EPBS are working to minimize its impact and maintain trust in the Ethereum blockchain.
The decentralized finance (DeFi) ecosystem on Ethereum is facing new challenges in the form of MEV (Minimum Extractable Value), which can lead to centralization and the bypassing of blockchain use. Uniswap x, for instance, allows transactions to be filled off-chain before they even touch the Ethereum blockchain. This defeats the purpose of using the blockchain for DeFi activities and instead relies on centralized parties. However, solutions like Arbitrum and others are working on scaling Ethereum and minimizing the effects of MEV, allowing for trust in the chain rather than off-chain centralized parties. Additionally, tools like crypto tax calculator help simplify complex crypto transactions and make tax obligations more manageable. The community-driven Celo blockchain is also exploring Ethereum layer 2 solutions to bring advantages like low gas fees and interoperability. Efforts to tame MEV through initiatives like Flashbots and EPBS (proposer builder separation) are also underway, ensuring the long-term sustainability and decentralization of the Ethereum ecosystem.
Ethereum's Proposer Builder Separation and Mechanism Design: Ethereum's Proposer Builder Separation allows users to build their own blocks or outsource to centralized builders, while Mechanism Design aims to internalize MEV auction into the protocol, distributing its value to ETH holders, and reducing centralization by burning MEV.
Ethereum's Proposer Builder Separation (PBS) and the related Mechanism Design (Mechanism Design, or MEV) are essential components of Ethereum's evolving monetary policy. PBS allows Ethereum users to either build their own blocks based on local transactions or outsource block production to centralized builders. Outsourcing block production to centralized builders can lead to more valuable blocks due to their sophistication and efficiency. The proposed Ethereum PoS Base Fee Burn (EPBS) aims to internalize the auction for block production into the protocol itself, creating an MEV oracle. This oracle can distribute the value of MEV to ETH holders, making the value of MEV more accessible to a wider and more decentralized set of stakeholders. Burning MEV is important because MEV is currently extremely spiky, leading to a centralizing force where large pools have a higher probability of obtaining high-value slots. By burning MEV and distributing it to ETH holders, Ethereum aims to increase the scarcity of ETH and make the rewards for validators more meaningful.
Maintaining Ethereum's Decentralization and Security: Ethereum's security depends on anyone verifying transactions and blocks, but MEV can lead to potential attacks and distorted incentives. Burning MEV or making verification easier can help maintain decentralization and security.
Ethereum's network security relies on the ability for anyone to run a node and verify transactions and blocks, ensuring trust and decentralization. The MEV issue, or "The Scourge," where validators can collect large fees, can lead to potential attacks and distorted incentives. Burning MEV, or removing it entirely, would provide more precise control over transaction fees and eliminate opportunities for malicious actors to manipulate the network. Additionally, The Verge aims to make block verification easier and more cost-effective, allowing more people to participate and further secure the network. This is crucial for maintaining Ethereum's decentralization and censorship resistance.
Delegating Node Validation for Blockchain Adoption: Experts or elites validate and maintain nodes for efficient blockchain adoption, but trust and neutrality are risks. Verification and validation are distinct, with verification checking a block's validity and validation attesting and staking. Personal verification adds security, and future advancements may allow less powerful hardware to validate.
For the mass adoption of blockchain technology, it's more efficient to delegate node validation and maintenance to experts or elites with advanced hardware and expertise, allowing for more block space and more people on the chain. However, this comes with the risk of relying on the trustworthiness of these validators and maintaining the system's neutrality and permissionless nature. Verification and validation are related but distinct concepts: verification is the process of checking a block's validity, while validation involves attesting to a block and putting one's stake on the line. Anyone can verify a block, but only validators can validate and receive rewards. While most users today delegate verification to trusted nodes, there are benefits to personally verifying high-value transactions for added security and trust. In the future, advancements like stateless clients and fast execution verification may make it possible to run verification software on less powerful hardware like Raspberry Pis, further reducing reliance on storage space and increasing accessibility.
Revolutionizing Proof Technology with Vertical Tries: Vertical Tries use advanced polynomial math for shorter, aggregated proofs, enabling scalability and cheaper gas prices by reducing storage requirements for nodes.
Vertical Tries, a new proof technology, is set to revolutionize the blockchain industry by providing shorter and more aggregated proofs compared to Merkle trees. These shorter proofs will enable more scalability and cheaper gas prices on layer 1 by reducing the amount of storage required for nodes. The magic of Vertical Tries lies in their use of advanced polynomial math, which allows for the creation of much shorter proofs that can be quickly checked by nodes, even without knowing the previous block's details. This innovation will make running a node significantly cheaper, as nodes will only need to store the latest block and its associated state proofs instead of the entire blockchain history. The storage and verification responsibilities will be delegated to builders, who will hold the entire state in their centralized, powerful systems. This setup ensures that builders cannot provide false proofs due to the inherent cryptographic limitations. With Vertical Tries, users will only need to concern themselves with their own balance, significantly reducing the amount of state information they need to store. Overall, Vertical Tries represent a significant improvement in proof technology, paving the way for increased scalability and cost savings in the blockchain space.
The Verge protocol improves Ethereum's scalability and efficiency: The Verge protocol uses vertical merkle trees to outsource complex tasks, reduce storage requirements, and enable faster synchronization, improving Ethereum's relationship with consumer hardware and allowing for potential implementation of snarks for increased scalability and efficiency.
The Verge protocol aims to make Ethereum more scalable and efficient by outsourcing certain complex tasks to sophisticated builders, while preserving the decentralization and censorship resistance of the network. This is achieved through the use of vertical merkle trees, which reduce the storage and bandwidth requirements for nodes, allowing for higher gas limits and faster synchronization. The builders, who specialize in these tasks and are incentivized to do so, are checked and constrained by cryptography, ensuring they cannot lie to the network. This allows validators and verifiers to remain lightweight and decentralized. The relationship between the Ethereum network and consumer hardware capabilities is improved, as vertical trees enable the network to utilize the increasing capabilities of hardware more effectively. Additionally, the eventual implementation of snarks, or zero-knowledge proofs, at the layer 1 level could further increase scalability and efficiency by allowing for quick and cheap verification of transactions. Overall, The Verge protocol is a step towards making Ethereum more scalable and efficient while maintaining its decentralized and censorship-resistant nature.
Scaling and Simplifying Ethereum: zkEVMs and The Purge: Ethereum focuses on scaling and simplification through zkEVMs and The Purge. zkEVMs improve efficiency and security, while The Purge simplifies the protocol by removing unnecessary data, allowing new participants to join easily without sacrificing historical property rights.
Ethereum's future involves a significant focus on scaling and simplification. The implementation of zkEVMs on Ethereum's layer 1, also known as "snarkifying everything," will enable more efficient and secure execution environments. This innovation will not eliminate the need for layer 2 solutions but will instead amplify their scalability. Additionally, Ethereum's "Purge" initiative aims to simplify the protocol by removing the need to store the entire blockchain history. This change will streamline the codebase for clients and enable new participants to join the network more easily. Despite purging history, the decentralized nature of blockchains ensures that the honest history will always prevail, and participants can still access their historical property rights through various means.
Ethereum's Transition to Lighter Verification Process: Ethereum is transitioning to a lighter verification process, allowing nodes to no longer store the entire historical state of the blockchain. Users who want to prove ownership of early assets will need to keep additional data, such as a short proof and their seed phrase.
Ethereum is transitioning away from the requirement for nodes to store the entire historical state of the blockchain. This change aims to make the verification process lighter and more efficient, but it also means that users who want to prove ownership of assets from the early days of Ethereum will need to keep additional data, such as a short proof and their seed phrase. This data will allow them to prove their ownership even if all the state data has disappeared. It's important to note that running a historical node is still an option, but it will no longer be the default. This change is driven by the incentives of builders to hold the entire state, as anyone who prunes an account from the data they hold could prevent the user from making transactions using those old assets and collect the fees instead. The use of vertical merkle proofs is a solution to this problem, allowing users to prove ownership of assets without relying on other providers for the blockchain's history. This change is part of Ethereum's ongoing evolution and is intended to make the network more scalable and efficient while maintaining the security and trust that underpin its decentralized nature.
Improving transaction pricing and resource allocation on Ethereum with multidimensional 1559: Multidimensional 1559 separates gas pricing into individual resources, allowing for more accurate and efficient pricing, and includes features like setting targets for state growth and history bloat, changing the pricing curve for transaction censorship, and allowing block builders to buy block space.
Ethereum's EIP 1559 proposal, also known as multidimensional 1559, aims to improve transaction pricing and resource allocation on the Ethereum network. Currently, all resources required for a transaction, including compute and storage, are priced under a single unit called gas. However, multidimensional 1559 separates the pricing of different resources, allowing for more accurate and efficient pricing. Additionally, individual targets for resources like state growth and history bloat can be set, enabling smoother pricing adjustments. Other aspects of the EIP 1559 proposal include changing the pricing curve for transaction censorship and allowing block builders to buy block space, potentially increasing the cost of censorship. Overall, these changes aim to improve the Ethereum network's scalability and resource management.
Preserving decentralization and censorship resistance, scaling value and security, and addressing centralization pressures: Ethereum is prioritizing improvements to its censorship-resistant settlement layer and scalability on its layer 2, while maintaining its neutral, decententralized, and censorship-resistant blockspace as its unique value proposition.
Ethereum is focusing on preserving its decentralization and censorship resistance, scaling its value and security, and addressing various centralization pressures in the medium term. The emphasis is on improving the censorship-resistant settlement of Ethereum's layer 1 and the scalability of execution on its layer 2. Ethereum's unique value proposition lies in its neutral, decentralized, and censorship-resistant blockspace. The settlement layer of the global Internet of value is a great vision for Ethereum's future, and it should not compromise its core values to compete in areas where it may not excel, such as scaling execution to the moon or competing byte for byte with larger block sizes. The next few years will see continued development in these areas, with a focus on MEV, staking, and proof of stake.
Ethereum's endgame: Centralized block production, decentralized validation, and strong censorship resistance: Ethereum prioritizes censorship resistance, setting it apart from traditional blockchains and ensuring its long-term value. Ethereum's endgame involves a system with centralized block production, decentralized validation, and strong censorship resistance, achieved through innovations like BlobSpace, zk EVMs, and addressing MEV and fraud.
Ethereum's endgame involves a system with centralized block production, decentralized validation, and strong censorship resistance. This endgame is significant because it signifies the convergence of various scaling approaches towards this single goal. Ethereum's pragmatic approach, which includes BlobSpace innovation on roll ups, zk EVMs, and ensuring censorship resistance on layer 1, all contributes to this goal. Even if there is one dominant roll up or many flourishing roll ups, Ethereum will still end up at this endgame. The importance of censorship resistance as a priority for Ethereum means that traditional blockchains, which have not prioritized this aspect, will need to go back and add it to their roadmap in order to reach Ethereum's endstate. This includes addressing issues such as MEV and adding anti-fraud mechanisms and encryption for the mempool. Ethereum's focus on censorship resistance sets it apart and ensures its long-term value.
Scaling Ethereum: Decentralize from the start: Starting decentralized and addressing centralization choke points can lead to a more resilient Ethereum network, but coordination issues and vested interests remain challenges.
While building a decentralized blockchain network like Ethereum from scratch comes with its challenges, it may be easier to start with a decentralized base and then scale horizontally and vertically, rather than starting centralized and becoming more decentralized. However, potential roadblocks include centralization choke points, such as MEV, restaking, and liquid staking, which could lead to a stagnant governance process if not addressed. Additionally, coordination issues and vested interests can hinder progress and lead to ossification. Yet, Ethereum has built-in fallbacks to mitigate potential issues, such as the inactivity leak for finality and the social layer for resilience. The focus on Ethereum, the network, versus Ethereum, the asset, is also an interesting distinction, with the former being the focus of this conversation.
Building a censorship-resistant blockchain network computer leading to a strong asset, Ether: Ethereum is developing a censorship-resistant blockchain network that will result in a stable, long-term asset, Ether, used for gas payments and collateral for staking.
The Ethereum project, which is a collaborative effort of some of the brightest minds on the Internet, is building a censorship-resistant blockchain network computer. This network will result in a strong asset, Ether, which functions as a digital oil or decentralized store of value. Ether's properties as a monetary unit are solidified by the network's security and censorship resistance. The network and Ether asset have a symbiotic relationship, with Ether being used for gas payments and collateral for staking. The Ethereum roadmap has a long-term outlook, possibly spanning decades, due to the unknown complexities of future cryptography. The next 5 to 7 years are expected to answer most of the big questions about Ethereum, making it a stable and boring network in the future. The focus is now shifting from research to implementation details.
Transitioning Ethereum from Proof of Work to Proof of Stake: The Ethereum team is working towards a safe transition to proof of stake, with potential future developments like single shot finality and one shot signatures. They're motivated by the community and the technology's potential, and encourage listeners to explore Ethereum's depths through previous Bankless episodes.
The Ethereum team, including Justin Drake, Mike Reck, and Dom's Blob, are working diligently on the Ethereum roadmap towards its end goal, which is a safe transition from proof of work to proof of stake. However, there may be further developments and research in the future, such as single shot finality and one shot signatures. The team is motivated by the community and the potential of the technology itself, rather than financial gain, and they invite listeners to explore the depths of Ethereum through previous Bankless episodes on the endgame, the next hard fork, and MEV burn. It's important to remember that crypto, including Ethereum, involves risk, but the potential rewards make it an exciting frontier worth exploring. Listeners are encouraged to prepare for the upcoming hard fork and dive deeper into Ethereum by following the links in the show notes to previous Bankless episodes.