Understanding the development route of Ethereum from the perspective of end users

Let’s take a look at the expansion roadmap of the Ethereum ecosystem! But this time from the perspective of the end user. Of course we will see a lot of updates in details, but what I introduce in this article will be the main updates. It will introduce in detail how each upgrade will affect the user experience. If you feel too lengthy, you can skip these parts and look directly at the “summary” of each paragraph. I think there are still many misunderstandings on the topic of “the arrival of Ethereum 2.0 will reduce gas fees, but this is a few years later”.

Finally, let me explain that all my content will be made public, and I am willing to share the content with those who need it and let them use it. I have removed all the links in it, so this post will not be deleted-if you want to learn more, you may need to search for more by yourself-sorry for the inconvenience.

Currently: smart contract rollup

It is worth noting that for end users, many great changes are now taking place. Of course, the biggest change is from the previous transaction on Ethereum L1 to the current transaction on smart contract rollups.

In January 2021, the Synthetix pledge function deployed on Optimistic Ethereum was officially launched on the mainnet. There are now two other applications on Optimism (except for token transfer): Uniswap V3 and Kwenta (dex of Synthetix). With the deployment of Chainlink, we expect a large number of projects to be deployed on OE in the next few weeks. OE is open to everyone-it’s really worth doing it yourself! Because the transaction fee is 1/10 of the Uniswap V3 transaction and 1/50 of the Kwenta transaction fee, and it is paid in ETH . But we can also see that Arbitrum One has adopted a completely different plan: first deploy the project, and then open it to users. What is expected is that it is also “almost ready” (quoting AJ Warner from Offchain Labs on Saturday), and I expect it to be open to everyone in August. I suspect they are waiting to complete the final critical infrastructure, such as the integration of Etherscan.

Of course, it’s best for you to see the specific operations yourself. Now that I have written this article, I will also describe my experience for readers. For example, if you go to the Kwenta.io website, click “Switch to L2”. Metamask (or other compatible web3 wallets) will ask you if you want to switch. At this time, just click again and you will switch to the Optimistic Ethereum network! It is just like using Ethereum, but the gas fee is 1/50 of the previous Ethereum fee, and the transaction is confirmed instantly, without waiting! (This applies to all rollups with a sequential mode) I hope all front ends and rollups can provide a similar experience. What you need to do is to bridge the tokens from Ethereum to OE.

Currently, there is only one option, that is, to use the Optimism gateway (its disadvantage is that the withdrawal is delayed for 7 days), but as time goes by, we will see that the “instant withdrawal” function will be deployed on different bridges. As far as I know, several projects are already trying to make the bridge between Ethereum and rollups (and between rollups) as seamless as possible. You can also withdraw and deposit directly between the centralized exchange/wallet and rollup-at least the information I see so far is that OKEx has publicly promised to support Arbitrum One and Coinbase OE. Binance recently announced the direct withdrawal/deposit function on Polygon-and the two formats are similar. In this way, we will see a class of new users: they will not use Ethereum L1, but directly deposit/withdraw fiat currency on rollups, and all their transactions will happen entirely on rollups. I can’t emphasize this too much!

At the end of this year or early next year, we will see the release of zkSync 2.0 and StarkNet, and Hermez will also be released in the second quarter of 2022. EVM compatible version). These programmable zkRollups will further enhance performance than rollups such as Arbitrum One, Optimistic Ethereum, and OMGX, allowing faster withdrawals, no bridging (which is essential for NFT), and better compression And privacy technology.

It should be noted that the transition to an industry centered on rollups is a gradual process, and it will take several years for this field to mature. Currently, most solutions still minimize viable products, that is, they also have auxiliary wheels (such as a single sequencer, transaction rate limit, and multi-sign L1 contracts, etc.). These are brand new technologies and it will take some time to prove their feasibility. The advantage of Rollups is that each chain has unique innovation points, which are faster than L1 in any time period. For example, all different rollup chains will have different MEV mitigation technologies: MEVA (OE), FSS (A1), time lock encryption (zkSync 2.0, StarkNet), VDFs (StarkNet), complete privacy (Aztec). Knowing just a bunch of meaningless acronyms seems useless, but the point is that they will all face difficult problems and lead to innovative solutions. This means that over time, the experience of each rollup will be very different. Although I expect that in the long run, most rollups will converge on the best solution.

There are challenges in interoperability across L2 and L1<>L2, but as I mentioned above, multiple projects such as Biconomy, pNetwork, Celo, Celer, Connext, Hop, Chainbridge, and Witnet are trying to figure out how to solve this problem Plan. Rollups development teams such as StarkWare and Loopring even reached a collaboration to release a viable innovative solution dAMM, which alleviates the fragmentation of liquidity by allowing multiple zk-L2s to access the liquidity on L1.

For more than a year, we have had application-specific rollups such as Loopring, zkSync 1.x, and DeversiFi. Many of these may transition to smart contract rollups, but application-specific rollups continue to exist independently, such as Reddit’s Arbitrum chain and Sorare. In the end, users are free to continue trading on Ethereum, but I guess that general users will switch to rollups, and over time, Ethereum L1 will become rollups (publishing its transaction data and proofs), behemoths, and financial Playground for institutions and governments.

Summary: You will be able to conduct transactions on different chains with much lower transaction fees and instant confirmation.

This week: EIP-1559

Another major change is EIP-1559. For this change, the current view is roughly divided into two directions: Ethereum L1 and rollups:

On Ethereum, you will no longer need to choose the gas price. When in use, the wallet will display a gas price, which means that most transactions can be confirmed with this price in the next block; and in most cases, the transaction can be confirmed in 7 seconds (average time). This is actually a new beginning: users no longer have to work hard to figure out how much gas will cost to determine the success of the transaction, and they don’t have to go through a long wait. At the same time, experienced users can also customize tips.

In some rare cases, the time to wait for confirmation will be longer, for example, because the above-mentioned Defi veterans grabbed rare NFTs and caused the price to soar suddenly. As for the transaction peak, it will return to normal sooner after 1559. Because first the throughput of the network will temporarily double. For example, the sale of Stoner Cats occupies most of the network and took 36 minutes to complete. After EIP-1559, the same transaction will be completed in about half of the time, that is, 18 minutes (a side note to the creator of the NFT: please choose to use L2 like zkSync 1.x or Immutable X for large-scale delivery ).

Will EIP-1559 lower the price of gas? In daily usage scenarios, it can prevent users from bidding too high, so we expect the gas price to drop slightly. When there is a sudden, short-term peak (a few minutes), the gas price will be significantly stable compared to before. However, for a situation like Stoner Cats that continues to soar for more than 10 minutes, we expect that high gas costs will still occur, because senior players may not care about the issue of excessively high priority fees. For ordinary users, it is basically The cost will also increase. Fortunately, compared with the previous situation, it only takes half the time before, so this is still 2 times the net income.

Let’s take a look at rollups. In fact, both Arbitrum One and Optimistic Ethereum already have mechanisms similar to EIP-1559. In this way, users can already enjoy the advantages brought by these upgrades. Using EIP-1559, rollups can more easily estimate the gas cost of L1, so end users of rollups can enjoy lower gas cost. For example, OE currently has a 50% indirect cost bottom line, which is used to buffer fluctuations in gas costs. The changes after 1559, coupled with the competition from other rollups, we can fully expect a significant drop in this cost.

Summary: On L1, the gas price does not need to be guessed blindly, and most of the transaction time can be confirmed within 15 seconds. On L2, there will be lower gas costs.

Late 2021 and beyond: Social recovery smart contract wallet on L2

This is actually a bit like a dark horse, but I expect smart wallets to develop rapidly with the outstanding performance of rollups. Social recovery smart contract wallets (very awkward-I will call them smart wallets) may be able to abstract a lot of complex things from the end user.

Imagine a wallet where you deposit fiat currency and start using it. It has a built-in “simple mode” that aggregates DEX and DeFi. When you want to buy ERC20 tokens, you can do it with just one click. When you want to earn interest, just deposit the principal to Year or other aggregators/pools. All the cumbersome steps in the process-such as converting U.S. dollars into USDC , converting into ETH to pay for gas, authorizing transactions, choosing the correct protocol, etc.-are all done in the backend. With the migration to rollups and L2, each of the above steps will be so cheap that users do not need to hesitate. Of course, your wallet can also be used to log in to other protocols that are not directly built-in. As the Ethereum login interface matures, it can be used as a universal wallet for Web3. Argent is a good example of a smart wallet-they will complete the integration of zkSync this year.

As Vitalik pointed out in his EthCC speech, such wallets are not only better software and hardware wallets for ordinary users, but they also have significant advantages compared to centralized solutions. Who do you prefer to believe? Five out of ten relatives and friends? Or Facebook or Wells Fargo? The latter must also take longer to process your recovery request.

Another point is that EIP-3074 brings some such benefits to Ethereum L1 users who use EOA wallets, but with the transition to rollups and smart wallets, I will have more expectations for the development of smart wallets on L2.

At the same time, I am worried that centralized players like Venmo or Square should solve this problem first, minus some decentralization factors.

Summary: No need to tangle or worry about the private key; much better user experience.

Early 2022: The Merge

This is the big event everyone is talking about: proof-of-work mining is about to end, and the execution layer of Ethereum (the current eth1) becomes driven by the beacon chain.

Strangely, from the end user’s point of view, this is not a “big event” worth noting. Since the block generation time has become a constant 12 seconds instead of the variable average of 13.5 seconds in the previous proof of work, that is only a slight increase in throughput by 10%.

If you trade one hour before the merger or one hour after the merger, and you don’t know that the merger will occur during this time, you will not notice it as an ordinary user in experience.

Of course, proof of work will bring other less obvious benefits: your transaction will now consume more than 99% less energy, and the nature of security and decentralization will be different (most people are Will be better” agreed, but there is still no final conclusion).

Summary: The impact is small, but there are some noteworthy benefits.

Mid-2022: Staking withdrawal function opens

There is not much to add at this point. This moment has finally arrived: users can claim 32 ETH (translator’s note: or a multiple of 32) shares that have been pledged for a long time and receive staking rewards. Moreover, the transaction fees and MEV earned after the merger can also be used at any time on the execution chain.

There may be other small improvements in this fork, such as switching to SSZ transaction coding and changing the way of execution chain synchronization, but these are currently unknown.

Summary: The mortgager can withdraw money.

The end of 2022 / the beginning of 2023: data fragmentation

By now, I expect that the rollups ecosystem will begin to mature, and most transactions will take place on rollups. Data fragmentation will increase the throughput of rollups by 18 times. With simple transaction functions like token transfer, the throughput on zkRollups will increase to 100,000 TPS. Each data shard has its own gas calculation model. As data and execution are separated, and rollups start to use data sharding, we will see gas costs plummet.

Data sharding is a solution that is still being developed. Later in 2023, we will see an upgrade of the security model to data availability adoption. After years of development, as the agreement matures, there are changes such as Moore’s Law and Nielsen’s Law, the emergence of more efficient erasure coding technology, and the more decentralized network, we will Seeing more shards join, each shard provides greater data availability. I previously estimated that due to data fragmentation, by 2030, all rollups can add up to 15 million TPS.

In terms of L1, there is not much change-the gas price will continue to remain high, although developers may find a way to solve the L1 smart contract gas price using data sharding.

Summary: On L2, the throughput has increased by an order of magnitude, and the gas cost has dropped significantly. On L1, there is little change.

2023: Stateless client

After years of exploring stateless clients, we finally saw a major breakthrough this year and saw the release of the first draft of the EIP. For users who run nodes, SSD is no longer a necessity, and it only takes a few MB to run and verify Ethereum. However, bandwidth requirements will increase by 2-5 times because you need to download witness data (witness). However, this requirement is not excessive in comparison.

With the stateless client and state expiry mechanism (see below), we can be less conservative on the gas upper limit, and realize that the state will grow without affecting the degree of decentralization. As a result, we can see that the throughput on L1 is slightly increased by about 3 times. However, given that most transactions now take place on rollups, will this have an impact? If the execution chain starts to become the bottleneck of state expansion and proof, rather than data fragmentation, it may have an impact.

Summary: Running an Ethereum node will become very easy, and SSD is no longer a necessity. For users who do not run their own nodes, the throughput of L1 is increased by 2-3 times.

2024: State sleep mechanism

Approximately one year after the stateless client, the state expiration is about to begin. This is a very complementary system, which will further enable the growth of the state scale of the system to present a sustainable state. For active users, this should not be considered a major event, but it may have some impact for less active users. For example, users cannot interact with expired states that are more than 2 years old. It is too early to say how this will be done, but users may have to provide verification from the block explorer to fix such an expired state. I also believe that a user-friendly solution will be developed in the end.

Summary: It is too early to say, but inactive users may have to provide verified data to restore their relevant status. Further consolidate the sustainable state scale management in the future.

Of course, there are other upgrades and improvement plans, but in the medium term (the next few years), it should have covered the main upgrades and how they will affect ordinary Ethereum users.

Author: u/Liberosist

 

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/understanding-the-development-route-of-ethereum-from-the-perspective-of-end-users/
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