Merger is the biggest event of Ethereum in 2022. With the status of Ethereum, there will inevitably be people or projects that use “Ethereum merger” as an investment narrative.
Then by analyzing the details of the “Ethereum merger”, who will use “Ethereum merger” to guide the investment “narrative”?
The merger of Ethereum, that is, the transfer from PoW to PoS, is currently in the key process of testing. During the merger, the verifier running the beacon chain node will run the execution client to support the original Ethereum 1.0 chain with the new execution layer node. , the Ethereum 1.0 chain will become the execution layer, and will develop into one of the shards in the future. The beacon chain becomes the consensus layer and dominates the consistency of the ledger. It is expected that the gas fee for application operations will be attributed to the execution layer nodes.
The merged route, as well as Surge’s introduction of shards and Verge’s introduction of Verkle trees. So in addition to the merger, there may be other points used to guide the narrative.
Surge is the next step of the merged Ethereum, which is to build a sharding structure. The ultimate goal is to have 64 shards operating at the same time. The sharding node is predicted to be similar to the merged operation, and it will be promoted and deployed among many Ethereum verifiers. Layer client, expand the number of nodes that can be allocated by the shard, and then adjust the algorithm and actual practice. The planned completion date is 2023.
Verge refers to the introduction of Verkle tree technology, whose goal is to help optimize Ethereum storage and help reduce node size. Compared with Merkle tree, Verkle tree can store data of the same size and occupy less space. Proof in traditional binary Merkle tree will take about 1 KB, and in Verkle tree, this proof will be less than 150B.
From these steps, there are 3 kinds of role speculation.
1. Disposal of computing power
The core of the Ethereum merger is to abandon PoW. The original PoW node miners cannot be directly used by the beacon chain or the execution layer. How to deal with these computing power?
This will be the first thing in the Ethereum merger narrative: where is the value of the PoW chain going?
The ETC, which was once forked by Ethereum due to the DAO attack, may be the first transfer and resettlement direction of computing power. In addition, there must be new organizers who try to re-publish a chain by synchronizing the original global state of Ethereum. And tokens, according to PoW consensus to place computing power.
The idea may make it easier to transfer the current computing power of Ethereum to the new network. Although ETC is interoperable with the ETH1.0 chain algorithm, its value on the chain will be different from that of Ethereum. In terms of the project’s narrative There will be good and bad.
But in general, the new currency or the narrative oriented by computing power may be enough to maintain consensus support in the short term, while in the long run, the development directions of PoW chain and application chain are different.
2. Node Mortgage
The main development idea of Ethereum merging is to gather all efforts towards the vision of Ethereum 2.0 to realize PoS. The carrier of realization is the beacon chain and sharding, and the builders of these network nodes all need 32 ETH as collateral assets to operate.
Therefore, node staking will become another mainstream narrative, and participants in this part may benefit from it.
The first is the service provider who completes the node mortgage, which includes many projects. Like Lido, these projects can help users complete the mortgage, issue anchor coins to maintain liquidity, and earn Ethereum node rewards.
Secondly, because the threshold of 32 ETH mortgaged by Ethereum nodes is too high, mining pools and service providers can allow users to participate with decentralized ETH. In general, there must be a threshold.
Under this line of thinking, some projects that use MPC technology and cryptographic multi-signature technology to complete retail investors’ participation in staking may use this to spread their own technical narrative.
3. Ethereum Challengers
The merger of Ethereum is a major event in the public chain, and it is an attempt to explore the public chain. It means that after the merger, the value of Ethereum still needs to be studied, whether Ethereum is good or not, and whether it can bear the amount of application development in the future.
Specifically compared with Ethereum, it will be those Ethereum challenger public chains.
Public chains with high concurrency, sharding, and expansion ideas will all become public chains in this category that combine narratives.
The current roadmap of Ethereum is centered on rollup, with sharding as the development goal of the L1 layer, which will transfer the expansion pressure to L2.
In terms of sharding, many other public chains have been implemented. In rollup, there are more projects. In the L2 project of Ethereum, rollup and zero-knowledge proof are the main technologies used together. Compared with Ethereum The practice in ecology is very difficult and takes a long time.
Therefore, the public chain and L2 that will take the lead in implementing technologies such as rollup, zero-knowledge proof, sharding, data availability, and stateless client are likely to be the narrators of this merger.
write at the end
If the main attributes of cryptocurrencies are defined by investment attributes, it seems that narrative will become a necessity for the industry, but in the chain with technology as the background, using narrative to guide the development of the industry seems to allow silent technology to also replace other consciousness disputes Among them, it is staggering.
Posted by:CoinYuppie，Reprinted with attribution to:https://coinyuppie.com/who-will-use-the-ethereum-merger-to-guide-the-investment-narrative/
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