Podcast Summary
Ethereum's Roadmap: Beyond EIP-4844 and Proposer Builder Separation: Ethereum's development includes statelessness, absorbing ZK tech, enshrined roll ups, fewer honest actors, quantum computing, and trustless mempools. Stator, Kraken, Arbitrum, and Mantle are part of Ethereum's future plans for advancements in technology, infrastructure, and user experience.
Ethereum's roadmap extends beyond EIP-4844 and Proposer Builder separation. Justin Drake and Tim Bako, two experts on the Ethereum frontier, discuss deeper aspects of Ethereum's development, such as statelessness, absorbing ZK tech at the layer 1 level, enshrined roll ups, and fewer honest actors needed for trustless operations. Additionally, quantum computing and trustless mempools are also part of Ethereum's future plans. Stator, a liquid staking service provider, allows users to stake Ether with minimal requirements, and Kraken, a preferred exchange for crypto in 2023, offers security, transparency, and client support. Arbitrum, a suite of Ethereum scaling solutions, provides faster transaction speeds and lower gas fees, and Mantle, the first DAO-led web 3 ecosystem, offers a builder experience that's intuitive, familiar, and fully EVM compatible. Overall, Ethereum's roadmap includes significant advancements in technology, infrastructure, and user experience.
Ethereum's Development Roadmap: Short-Term Improvements, Mid-Term Projects, and Long-Term Considerations: Ethereum is making progress towards its initial goals of being secure and scalable, but the expanding design space means ongoing exploration of new possibilities like MEV, layer 2 solutions, and quantum computing.
Ethereum is making significant strides towards achieving its initial vision of being a secure and scalable base layer, with the implementation of proof of stake and the emergence of layer 2 solutions. However, the expanding design space means that Ethereum may only be halfway to completing its initial goals while continuing to explore new possibilities. Some of these new developments include protocol adjacent phenomena like MEV and layer 2 solutions, as well as longer-term considerations such as upgrading to post-quantum cryptography and harnessing quantum computers for consensus. In the short term, Ethereum is working on improvements like account abstraction and encrypted mempools, while mid-term projects include Ethereum Improvement Proposals (EIPs) like EIP-4844 and Ethereum Name Service (ENS). Looking further ahead, Ethereum is exploring quantum computing and the potential for zk-EVM mainnet. Overall, Ethereum's development roadmap is a mix of short-term improvements, mid-term projects, and long-term considerations, with a growing focus on protocol adjacent phenomena.
Making rollups a first-class citizen on Ethereum with Danksharding: Danksharding upgrade allows temporary data storage on Layer 1, reducing Layer 2 transaction costs and making Ethereum more rollup-friendly, a step towards scaling to support a larger user base.
Ethereum developers are currently focusing on the near-term upgrade, Danksharding (Proto Danksharding), which aims to make rollups a first-class citizen on Ethereum. This upgrade will allow temporary data storage on Layer 1 for a few weeks, significantly reducing the cost of Layer 2 transactions by charging less for storage. Ethereum prioritizes this rollup-centric roadmap due to the high cost of posting data on Layer 1 being the main bottleneck. The long-term goal is to scale Ethereum to support a larger user base, potentially reaching hundreds of millions or even billions. Danksharding is a step towards this goal, as it makes Ethereum more rollup-friendly. Additionally, the deactivation of the self-destruct feature and the exposure of the Beacon state route in the EVM are notable improvements being delivered with this upgrade.
Introducing New Ethereum Resources: Enshrine Rollups: Ethereum is developing new rollups, Enshrine Rollups, which could be free for up to 12 months due to a temporary subsidy. These rollups could offer best-in-class security and access to social consensus. Existing rollups offer cost-effective batching and custom virtual machines.
Ethereum is working on introducing new resources called Enshrine rollups, which could potentially be used for free for up to 12 months due to a temporary subsidy. This could act as a bootstrapping mechanism for the new technology. In the long term, Ethereum aims to snarkify the EVM, making it a rollup itself, which would make the network more secure and efficient. This development could complement existing rollups, each offering unique advantages. For instance, application layer rollups may offer more cost-effective batching and the ability to fund public goods or use custom virtual machines. However, Enshrine Rollups will have the advantage of best-in-class security and access to social consensus. The development of these rollups is expected to take several years, but the progress of Snark technology has historically surpassed expectations.
Exploring Ethereum's New Roll Up Landscape: Roll ups like Optimism, Arbitrum, ZK Sync, and Polygon expand Ethereum's capabilities, offering faster development and new use cases. They have different engineering approaches and are not in direct competition, but rather represent a new and expanding Ethereum landscape.
The emerging roll up technologies, such as Optimism, Arbitrum, ZK Sync, and Polygon, represent a new landscape for Ethereum, rather than direct competition. These roll ups offer more flexibility and faster development than Ethereum L1, and may unlock new use cases. The term "enshrined roll up" refers to the least opinionated type of roll up, which is built by taking the Ethereum Virtual Machine (EVM) and optimizing it. The engineering for this technology is mostly being done by ZK roll ups, with the EVM eventually becoming a zkEVM. One significant advantage of these roll ups is the potential for reduced computational requirements for validators. For example, a smartwatch could potentially validate transactions, as the verification time for a SNARK is only a millisecond. However, the current proving and verification process on L2 is not very decentralized or efficient, and relies on high-powered sequencers. In the future, technology like folding may be used to break down the big computation into smaller tasks for low-powered approvers, allowing for more decentralized and faster proof production. It's important to note that these roll ups have different use cases and engineering approaches, and are not necessarily in direct competition with each other. Instead, they represent a new and expanding landscape for Ethereum, with the potential to unlock new capabilities and applications.
Ethereum's Decentralization Efforts through Rollups and Hardware Acceleration: Ethereum is optimizing rollups and hardware acceleration to reduce latency, decentralize its network, and make it more accessible, potentially allowing devices to participate with fewer honest actors required.
Ethereum is working on reducing latency and decentralizing its network through the use of optimistic rollups and zk rollups, specifically zkSync and Polygon zk tech. These rollups allow for the breaking down of computation into smaller, "bite-sized" trunks called opcodes, which can be streamed through for faster processing. Hardware acceleration further reduces the latency, potentially from half a second to just 5 milliseconds. This unlocks the potential for decentralization, as the network could rely on a large number of redundant provers, even if most go offline. The goal is to make Ethereum more accessible and functional with fewer honest actors required, potentially even allowing devices to participate. The Ethereum roadmap involves maturing zk rollups, extracting their technology for application to the layer 1 Ethereum Virtual Machine (EVM), and sharding computation. This shift from EVM to zk EVM simplifies block proving for individuals and allows for mass participation. Overall, these advancements aim to make Ethereum more efficient, decentralized, and accessible.
Ethereum's Decentralization and Roll Up Technology: Ethereum's decentralization and computational power make stopping it challenging, roll ups will eventually return as the secure and scalable solution, MetaMask Portfolio manages crypto needs, Polygon 2.0 provides scalability and unified liquidity, TOKU helps navigate labor laws and crypto regulations.
Ethereum's decentralization and computational power have reached a point where stopping it is comparable to stopping the flow of water. This was the summary of the conversation regarding Ethereum's decentralization and the role of roll up technology in its scalability. The conversation also touched upon the history of Ethereum's development and the strategic decision to open up a commercial space for its growth. Looking ahead, the community will eventually return to maximally credible and neutral roll ups, which will have the same security properties as Layer 1 Ethereum. MetaMask Portfolio was introduced as a solution for managing crypto needs in one place, while Polygon 2.0 was presented as the value layer for the Internet, aiming to provide unlimited scalability and unified liquidity. The conversation also discussed the challenges of complying with labor laws, payroll, and tax obligations, tax reporting, and crypto regulations in every country when employing people. TOKU was introduced as a solution to help companies navigate these complexities. Overall, the conversation covered the short, middle, and long-term aspects of Ethereum's roadmap, focusing on roll up technology and its role in Ethereum's scalability.
Exploring Proposer Builder Separation for Ethereum's Inefficient Mempool: Ethereum's mempool inefficiencies lead to suboptimal transaction execution and lost value. Proposer Builder Separation, with encrypted mempools and MEV rebates, offers a potential solution. Users can benefit from MEV rebates through centralized solutions, but trustless and standardized technology is needed for widespread adoption.
The Ethereum network currently experiences inefficiencies due to the public mempool, leading to suboptimal transaction execution and lost value. To address this issue, a concept called Proposer Builder Separation (PBS) is being explored, which involves encrypted mempools and MEV (Maximal Extractable Value) rebates. In the short term, users can benefit from MEV rebates through centralized encrypted mempools offered by companies like Flashbots and Block Native. However, the lack of trustless technology and standardization hinders widespread adoption. To move forward, there's a need for standardization efforts and the development of trustless or trust-minimized encrypted mempools. This progression includes SGX (Trusted Hardware), threshold encrypted mempools, and delay encryption. A significant event is expected on July 18th, where key wallet operators and the searcher community will come together to discuss and potentially establish community standards for this technology. Instead of an Ethereum Improvement Proposal (EIP), it's likely that an Ethereum Request for Comments (ERC) will emerge as a result.
Ethereum's Proof of Stake transition and its impact on MEV: Ethereum's Proof of Stake transition involves short-term deployments and medium-term goals related to MEV, including PBS, inclusion lists, and MEV burn. Addressing incentive incompatibilities and maintaining censorship resistance are ongoing priorities.
The Proof of Stake (PBS) transition in Ethereum, while related to MEV (Maximal Extractable Value), primarily impacts users and searchers at the current stage. Short-term developments include the deployment of core PBS within the next 12 months, while medium-term goals involve the implementation of inclusion lists and MEV burn, which could take up to 5 years. MEV burn, a crucial component of MEV, relies on Entrance PBS and inclusion lists to determine the most valuable blocks for inclusion on Ethereum. However, the potential for censorship through high financial penalties is a concern, and incentive-compatible solutions like Inclusionless are being explored to maintain censorship resistance. Another significant issue in Ethereum's future is the stateless bucket, which represents the Ethereum state's current balances and contracts data. Addressing these incentive incompatibilities and ensuring a secure and fair Ethereum network remains a top priority.
Ethereum's focus on cryptography for scalability and security: Ethereum is enhancing scalability and security via cryptography, introducing zk EVM, TRYAN roll-ups, encrypted mempools, and discussing stateless clients.
Ethereum is working towards a more scalable and efficient network through various means, primarily focusing on cryptography. The roll-up centric roadmap led to the development of zk EVM on layer 1 and TRYAN roll-ups, utilizing zero-knowledge technology. Encrypted mempools, another cryptography-focused development, ensures privacy and security in transactions. The latest discussion revolves around stateless clients, which aim to remove the need for nodes to store the entire state by transitioning Ethereum's database structure, making proofs smaller and more efficient. This cryptography-heavy approach aligns with the philosophy of "if you can't do something with cryptography, do it with cryptoeconomics. But if you can do it with cryptography, do it with cryptography," as stated by Ethereum co-founder, Vitalik Buterin. By focusing on cryptography, Ethereum aims to incrementally upgrade its systems while maintaining safety and security. Additionally, it is now possible to completely solve safety in blockchains with cryptography, addressing two essential aspects of consensus: safety and liveness.
Quantum mechanics offers solutions for perfect finality and trustless systems: One shot signatures, a quantum innovation, enable private keys to sign only one message before self-destructing, offering perfect finality, trustless delegation, potential elimination of staking, and creation of quantum money.
Quantum mechanics, a field once thought to only pose a threat to cryptocurrency through quantum computing, now offers potential solutions for achieving perfect finality and creating trustless systems. Specifically, one shot signatures, a quantum innovation discovered in 2020, enable a private key to sign only one message before self-destructing. This property offers significant benefits, including perfect finality, trustless delegation, the potential elimination of staking, and the creation of quantum money for transactions without the need for routed channels. These advancements can provide value beyond consensus and could potentially be implemented at the layer 1 level in the long term. Ultimately, the assurance of a single address being able to sign only one transaction opens up a world of new use cases, offering increased trustlessness in the crypto space. However, it's important to note that while the theory is established, the practical implementation of one shot signatures is still under research and development.
Ethereum's shift towards statelessness for sustainability: Ethereum's move towards statelessness through cryptography-based solutions will make the network more sustainable and efficient by reducing the need for vast storage and resources, while maintaining trustlessness.
Ethereum's move towards statelessness through cryptography-based solutions will make the network more sustainable and efficient. Currently, when a user makes a transaction, the data grows the size of the Ethereum blockchain, requiring every node to download and store it forever. This model is unsustainable as it imposes a one-time cost on the user and a continuous cost on every node operator. With statelessness, nodes can prune the blockchain while maintaining trustlessness, reducing the need for vast amounts of storage and resources. This shift also empowers individuals by leveraging cryptography to provide them with the same capabilities as larger institutions. While Ethereum's monetary policy does not rely on cryptography, the importance of sustainability is evident, especially when compared to networks like Bitcoin that lack a sustainable monetary policy and security model.
Ethereum's monetary policy moving towards sustainability: Ethereum's economics focuses on minimal issuance, maximum burn, and capturing value for the community, with future phases including MEV burn and restaking yield
Ethereum's monetary policy is moving towards sustainability through minimal issuance and maximum burn. The network has reached the end game of minimal viable issuance with the proof of stake merge. However, the burn mechanism is still in its early stages, with only concession fees being captured. Future phases include capturing value from transaction contention (MEV burn) and restaking yield. Ethereum's economics will continue to evolve, focusing on maximizing value capture for the community. To learn more, follow the speakers on Twitter or join the Ethereum R&D Discord. Remember, Ethereum and DeFi are risky, but the potential rewards make it an exciting frontier. Stay informed and join The Bankless Journey.
