The Ethereum development puzzle behind the reversal of the attitude of the three arrows capital from abandonment to the true fragrance

On November 20th, Zhu Su, the co-founder of Three Arrows Capital, was dissatisfied with Ethereum’s high GAS fees and tweeted to abandon Ethereum. They believed that Ethereum’s high handling fees were no longer suitable for new users to join.

However, on December 7th, Three Arrows Capital transferred another 91,477 ETH (worth about US$400 million) from major trading platforms . Zhu Su said that his previous words were too aggressive and he will buy more in the future. Ethereum.

The two extreme statements within a month are confusing, but it is worth noting that the Three Arrows team has indeed begun to deploy other public chains. Zhu Su believes that there are more public chain solutions with better performance than Ethereum, such as Solana, Avalanche (AVAX) and so on.

Behind the series of actions, it can be seen that many people’s patience with Ethereum is decreasing, and maybe there is not much time left for it…

How expensive is the Ethereum GAS fee?

In August 2020, a transaction on the Uniswap platform consumes approximately US$3 to US$10 in GAS fees. In the previous period, the average handling fee was as high as US$90, an increase of nearly 10 times.

The Ethereum development puzzle behind the reversal of the attitude of the three arrows capital from abandonment to the true fragrance

The increase in GAS fees was mainly due to the increase in the unit price of GAS and the continued rise in the price of Ethereum.

This year, the average daily gas price of Ethereum continued to increase. On November 26, the average daily gas price surged to 600Gwei, setting a new high for the year. (Gwei is the unit of calculation of the Gas fee, 1ETH = 10⁹ Gwei)

Usually in a single transfer of Ethereum, a fixed amount of 21,000 GAS needs to be consumed, plus a floating amount (depending on the length of the transaction information). In other words, even if the number of floating GAS is not included, in the face of such a high gas unit price, based on the author’s observation time, the transaction volume of a transaction can reach about 55 US dollars.

Ethereum gas fees remain high. In addition to the large amount of demand that causes network congestion, it is also related to the increase in the price of Ethereum.

At the beginning of September last year, the average daily gas fee of Ethereum reached 514Gwei. Although it also hit the highest point since 2017, considering that the price of ETH was only US$480 at that time, the gas fee was not as high as it is now.

It’s no wonder that Zhu Su of Three Arrows Capital decided to abandon the Ethereum ecosystem, because too high a fee is likely to cause the Ethereum community to lose transactions and users to other platforms.

Layer2: Short-term optimal solutions to efficiency problems and rate problems

Layer 2 is the expansion plan for the realization of Ethereum 2.0. It is equivalent to creating a second layer of the Ethereum network to handle excess transactions on the Ethereum main network in a supplementary layer.

Through Layer2, it is possible to allow some transactions to be processed on the Layer2 layer. On the one hand, it reduces the pressure on the main network and indirectly makes the processing speed faster. Ideally, the current processing volume of 15 to 45 transactions per second is increased to 1500 to 1500 per second. 4000 pens.

On the other hand, it is natural to reduce the handling fee for a single transaction, and the lower renewal rate is expected to attract more transactions from other main networks to Ethereum, thereby ensuring that the upgraded revenue of the entire network is higher than the current level.

Among the solutions to achieve expansion goals, there is essentially more than just Layer 2 as a route, as well as multi-chain and side link lines. However, considering the comprehensive security and decentralization degree, Layer 2 is the more mainstream implementation path.

There are also many competing schemes for implementing Layer2. At present, ZK-rollup, which combines security and privacy, seems to be a better technical choice.

V God also stated in an AMA at the beginning of this year that ZK-rollup is a more reasonable choice in the long run because it is more reliable in terms of ensuring asset and application security.

In the short term, Layer 2 is a better solution to solve the high handling fee, but in the long term, it is necessary to combine sharding to achieve the goal of improving performance.

Is there a specific timetable for PoW to PoS?

The Ethereum development puzzle behind the reversal of the attitude of the three arrows capital from abandonment to the true fragrance

The complete switch to PoS is an important milestone in the ETH2.0 upgrade, and it is too early.

Now, the beacon chain (Beacon Chain) has been launched, that is, the first step to switch the consensus mechanism has essentially been realized. The beacon chain is a public chain based on PoS and is completely independent of the Ethereum main network. ) To the main network, completely introduce PoS to Ethereum.

When the merger is successful, the current ETH of the main network will no longer operate, and will be replaced by ETH2 of the beacon chain. However, due to the large number of Ethernet main network nodes, it takes a very long time to coordinate the transition of all nodes from PoW to PoS.

After completing the merger of the main network and Beacon Chain, the final stage will be sharding, but the premise is stable operation after the merger.

The purpose of fragmentation is to increase the processing speed, which is similar to splitting the database horizontally to avoid a single point of network congestion.

However, the current sharding is still in the research stage, and the team estimates that the implementation time may be in 2023, but the specific time depends entirely on whether the effect of the merger is ideal.

What do industry insiders think?

  • Kain Warwick (Founder of Synthetix)

Synthetix is ​​a synthetic asset agreement project on the Ethereum chain. Kain firmly believes that Layer 2 can solve the shortcomings of Ethereum and is a solution suitable for the continued long-term development of Ethereum.

The Ethereum development puzzle behind the reversal of the attitude of the three arrows capital from abandonment to the true fragrance

Therefore, he satirized some early investors in Ethereum in a tweet on November 21, thinking that they had become speculators, which disappointed him. He said that these are the people in the industry he respected very much before, but now he chooses to become short-termists in pursuit of profit.

But he also believes that these people will also join the Ethereum ecosystem again after the success of Ethereum Layer2. What he might criticize in words is that Three Arrows Capital’s abandonment of Ethereum is undoubtedly a speculative.

  • Hayden Adams (Founder of Uniswap)

The Ethereum development puzzle behind the reversal of the attitude of the three arrows capital from abandonment to the true fragrance

Adams, the father of Uniswap, believes that Three Arrows Capital has insulted all those who work for Ethereum 2.0 and Layer 2. Adams believes that Ethereum can solve performance problems through Layer 2 upgrades. If you want Ethereum to develop conscience, you must be patient.

  • Chris Burniske (Partner of Placeholder VC)

The Ethereum development puzzle behind the reversal of the attitude of the three arrows capital from abandonment to the true fragrance

Chris is the first Wall Street investor who proposed the valuation of crypto assets. He expressed his optimism about Ethereum. Although the transaction fee of Ethereum is more expensive than other Layer 1, it also surpasses other Layer 1 in terms of the number of users. It has a mature ecology and Community.

Although the other Layer 1 is cheap, the number of users is also very small, and there is no such mature development blueprint as Ethereum.

summary

There are many challenges facing the upgrade of Ethereum. There are challenges from performance upgrades, the transitional adjustments of consensus mechanisms, the challenges that must be lowered, and the challenges from whether the economic model works, as V God himself predicted. , It may take about 6 years to fully realize the upgrade.

Although the current progress is slow, the first stage of the handover of PoS has been successfully realized through the efforts of the community.

In terms of capacity expansion, in the short term, capacity expansion through Layer 2 is the most ideal solution, but after all ROLLUP cannot completely place all transactions in Layer 2, and it still needs to process some transactions in Layer 1. The overall performance still cannot meet the larger concurrent volume, so the station From a longer-term perspective, sharding is a must.

From the perspective of sustainable development, switching POS is the strategic value of Ethereum, and the realization of other modules is only a matter of time.

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/the-ethereum-development-puzzle-behind-the-reversal-of-the-attitude-of-the-three-arrows-capital-from-abandonment-to-the-true-fragrance/
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