After Ethereum Danksharding landed, these tracks and projects may break out

Written in the front: In February this year, “The Way of DeFi” began to popularize Ethereum’s latest expansion killer, danksharding. This expansion plan first proposed by Ethereum researcher Dankrad Feist aims to avoid the MEV (miners can extract value) problem, thereby Maximize system decentralization and security properties, and this is achieved through a combination of proposer-builder separation (PBS) and crList.

In the eyes of Ethereum researchers, danksharding may become the salvation scaling solution for Ethereum. The recent EIP-4844 proposal written by Vitalik Buterin et al. is the first step in implementing the danksharding expansion plan, which will greatly reduce the gas cost of the existing rollup layer 2 network, thereby improving the competitiveness of the entire ecosystem.

So when the danksharding scheme is successfully implemented, what projects will it be a catalyst for? Vaish Puri, a researcher from thetie, presented several projects that he believes will be positively impacted: Arbitrum, Optimism, Chainlink, and LayerZero. We can first look at the logic of his statement, and then come to a conclusion of our own based on our thinking.

After Ethereum Danksharding landed, these tracks and projects may break out

(Image via Dankrad Feist)

Who will be the beneficiaries of danksharding?

Assuming that danksharding is deployed to the Ethereum network with the “Shanghai hard fork” at the end of this year (a few days ago, Buterin wrote a FAQ page for the prototype danksharding (EIP-4844), interested readers can take a look), So in addition to Ethereum itself, what other projects will be the direct beneficiaries?

Vaish Puri suggested that Rollup layer 2 network projects (such as Arbitrum and Optimism), Chainlink oracles, and the emerging cross-chain project LayerZero would be the biggest beneficiaries of danksharding.

Here are some of the arguments he makes:

Arbitrum, Optimism and Chainlink

Arbitrum is an L2 project that adopts an optimistic rollup scheme. The TVL of its network is currently slightly over 2 billion US dollars. It is currently one of the leaders of the Ethereum L2 track. As Ethereum is set to implement danksharding, Arbitrum’s growth may be exponential growth.

After Ethereum Danksharding landed, these tracks and projects may break out

It’s worth noting that while Arbitrum’s TVL was starting to emerge, their GitHub commits dropped significantly, while Optimism remained in steady development. This is a bit odd, as one would expect that as public interest in a project grows, so does the frequency of team development, but that doesn’t seem to be the case with Arbitrum.

After Ethereum Danksharding landed, these tracks and projects may break out

In early 2020, Offchain Labs co-founder Ed Felten announced that Abritrum plans to integrate with Chainlink’s decentralized oracle network, thereby reducing network gas fees and increasing network throughput.

After Ethereum Danksharding landed, these tracks and projects may break out

Additionally, the Chainlink-Arbitrum integration outsources valuation to Chainlink nodes and allows developers to integrate Chainlink price feeds into their dApps without having to rewrite any smart contracts. As danksharding makes the execution layer and sharding more tightly coupled, we expect to see a spike in demand.

After Ethereum Danksharding landed, these tracks and projects may break out

Since Chainlink has become a major leader in the oracle market and it has partnerships with many projects, it is safe to say that Chainlink will be well-positioned for a surge in volume/cap by the end of the year. A major problem with Chainlink is that it is not really a decentralized project (strictly speaking in terms of governance), although this does not appear to affect the overall health of the system.

After Ethereum Danksharding landed, these tracks and projects may break out

Comment: Recently, the optimistic rollup scheme has outperformed the zk-rollup scheme by an overwhelming support advantage, mainly because of the proposal of danksharding. In the short to medium term, Arbitrum and Optimism are indeed easier to scale, and currently Arbitrum is in the lead in terms of TVL, but Optimism is better in gas optimization (see https://l2fees.info/), and The competition on the L2 track has not yet entered the white-hot (token issuance) stage, and it is difficult to say which team will be the final winner. In the long run, zk-rollup will still be the final L2 solution, which has not changed.

And the logic of demand growth for oracles analyzed by Vaish Puri, the translator thinks it makes sense, and Chainlink, as the leader of the oracle track, will naturally become one of the concerns of investors, and other predictions like UMA The machine project is also worthy of our follow-up progress.

LayerZero

LayerZero is a “full-chain” interoperability protocol whose mission is to provide a “future-proof” immutable infrastructure where developers never have to change interfaces in smart contracts.

After Ethereum Danksharding landed, these tracks and projects may break out

LayerZero has launched the “Ultra Light Node” (ULN) scheme and claims it has all the security of a light node and the cost-effectiveness of an intermediate chain. This is achieved by streaming block headers to the oracle on-demand, rather than keeping all block headers in order.

Essentially, LayerZero is just an on-chain endpoint protocol using ULN that uses language machines and repeaters to transfer data between on-chain endpoints. LayerZero leverages the security features of oracles like Chainlink and adds another layer of security through a relay system. LayerZero’s endpoint design is actually light enough that it can run on expensive L1 systems without passing most of the cost on to the end user.

After Ethereum Danksharding landed, these tracks and projects may break out

In fact, with the help of the LayerZero protocol, we can not only realize cross-chain transfers, but in theory we can also perform cross-chain lending, cross-chain swap transactions, cross-chain governance, and cross-chain state sharing.

LayerZero’s full-chain bridge, Stargate, has gone live and is laying the groundwork for a fully composable liquidity transfer protocol.

Long story short, LayerZero seamlessly connects all chains, whether it’s an EVM chain or a non-EVM chain. Essentially LayerZero creates a cross-chain communication protocol.

After Ethereum Danksharding landed, these tracks and projects may break out

Currently, the combined TVL of all cross-chain bridge projects exceeds $22 billion, with Avalanche’s cross-chain bridge taking the lead.

After Ethereum Danksharding landed, these tracks and projects may break out

With the implementation of danksharding, the traffic and throughput of the Ethereum network is expected to increase rapidly.

And the rapid global adoption of Ethereum will bring huge demand, which will make traditional cross-chain bridges unwieldy and affect the speed of response. And cheap inter-chain communication will become very popular, and LayerZero’s Stargate could theoretically meet that need.

The development of LayerZero is relatively in its infancy, as we can see from their gitbook page as well as their GitHub page, but progress on the project is progressing at an alarming rate nonetheless.

Comment: After the implementation of danksharding and the promotion of the Ethereum ecosystem, the cross-chain demand between rollup and rollup will increase significantly, and the demand for short-term EVM fork chain to shift to l2 chain will also increase, and Stargate supports Arbitrum, Optimism and non-Ethereum ecosystems at the same time The EVM fork chain, which is indeed ready for the next wave of asset transfer, but security is the attribute that our users should focus on. In the short term, testing should still be the main focus. And other cross-chain bridge projects between rollup and rollup are also worth tracking.

Summarize

Danksharding is not just a redesign of classic sharding, it is a game-changing proposal that, once successfully implemented, will mark a new era for blockchains. Soon, Dankrad Feist and the magicians of the Ethereum Foundation will be able to solve the trilemma of scalability, decentralization, and security. The implementation of Danksharding will revitalize the rollup ecosystems such as Arbitrum and Optimism, as well as oracle projects such as Chainlink. At the same time, it will also create an environment that promotes innovative solutions such as LayerZero.

In this article, we consider the beneficiaries of the Danksharding scheme, but do not talk about the associated victims, and this topic is also very interesting. In the next article, we will talk about this issue in detail.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/after-ethereum-danksharding-landed-these-tracks-and-projects-may-break-out/
Coinyuppie is an open information publishing platform, all information provided is not related to the views and positions of coinyuppie, and does not constitute any investment and financial advice. Users are expected to carefully screen and prevent risks.

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