Bankless: Next steps for Ethereum: Cancun upgrade, DVT, PBS

Disclaimer: This article aims to convey more market information and does not constitute any investment advice. The article only represents the author's viewpoint and does not represent the official stance of MarsBit

Disclaimer: This article aims to convey more market information and does not constitute any investment advice. The article only represents the author's viewpoint and does not represent the official stance of MarsBit.

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Source: MarsBit

Dear Bankless friends,

Last week's Shapella upgrade was significant for Ethereum, but work on expanding the network has only just begun.

Today, let's take a look at the development direction of Ethereum after Shapella.

Bankless team

Bankless Author:DonovanChoy

EIP-1559 completed

Merge completed

Shapella completed

This may be a bear market, but it has not prevented the release of the Ethereum developer community.

What is the next step in the Ethereum roadmap for the rest of 2023? Enter EIP-4844 Cancun hard fork, as well as work on distributed verification node technology and proposer builder separation. Let's delve deeper.

1. EIP-4844 Cancun Hard Branch

EIP-4844 is the next major hard fork aimed at addressing the scalability issues of Ethereum. We have heard countless comparisons: Visa processes thousands of transactions per second, while Ethereum can only process up to two digits of transaction volume per second. The root cause of network availability issues needs to be addressed: scalability.

Today, scalability issues have been alleviated through rollup chains (Arbitrum, Optimism). The basic idea behind how Rollup extends Ethereum is that they push the computational burden of processing transactions to the second layer. After completion, they publish the transaction data back to the underlying first layer beacon chain to achieve consensus and storage.

Unfortunately, roll up is only a temporary solution that is still too expensive and slow. This is not Rollup's fault - it is largely due to the design architecture of the underlying Layer-1 chain. The fastest roll up still requires submitting a large amount of data to establish consensus on the Layer-1 chain, which lacks free storage space for data. In addition, it imposes a heavy burden on nodes to download this data - it is estimated that 95% of the transaction costs of rollup are only used for publishing data costs.

This leads to EIP-4844. EIP-4844, named after Ethereum researcher DankradFeist, is a "proto banking" proposal aimed at improving the speed and cost of using roll up. In Dankrad's words, this is the accelerator for Rollup. Proto danksharding was an early pioneer of complete danksharding, and it will take a few more years on the Ethereum roadmap, so the prefix "proto" was used. But even this early proposal foreshadows significant changes in Ethereum.

EIP-4844 divides the blockchain network into different databases, which increases the space for millions of transactions on Ethereum (a new data availability layer). This segmentation is called 'sharding'. Simply put, sharding is similar to adding lanes on highways currently congested with Ethereum networks. Therefore, EIP-4844 entered the stage of what was once referred to as a "surge" in the Ethereum roadmap.

After the proto banksharding is completed, the Ethereum block can store 1-2MB of data (currently 50-100KB in capacity), greatly reducing the cost of using roll up by an estimated 20 times (a complete danksharding will eventually allow the block to carry 16-32MB). For a more comprehensive discussion, please watch Vitalik and Dankrad's Bankless podcast.

As the space of danksharding increases, the space of "blob carryingtransactions" also increases. It is a new type of transaction that retains a finite time of weeks or months in the beacon chain nodes. During this period, the node validator adopts a clever technique called "data availability sampling", which can randomly sample certain parts of the data blob for verification without actually downloading all the data.

Source: eip4844.com

Why is EIP-4844 important? Ethereum rollops (just like their current work) are not suitable for use cases such as games or social media that require higher transaction loads. But builders cannot wait, so they found a way to expand through compromise and decentralization, as we see in most crypto games and side chain bridge designs. EIP-4844 is the unlocking of fully on chain use cases, which may usher in a wave of innovation for builders.

When will proto banking be completed? At present, we know that EIP-4844 is scheduled for a certain time in Q3-Q4, 2023. But like most large Ethernet network upgrades, it is expected to be affected by potential delays.

2. Distributed Verification Node Technology

Another key technological innovation that Ethereum needs to pay attention to in the near future is the rise of distributed verification node technology (DVT), which is a research field that the Ethereum Foundation has been exploring since 2019.

Nowadays, operating Ethereum nodes is a heavy individual adventure in technology, requiring operators to hold 32 separate ETHs. Node operators can reduce the burden and choose to pledge through Coinbase or Lido, but these alternative solutions require critical trade-offs in terms of decentralization.

DVT attempts to simplify node validation without sacrificing decentralization. It is achieved through an independent 'team pledge'. A group of friends can jointly hold different numbers of ETHs and run a node, instead of holding 32 ETHs individually. This is achieved through Multiparty Computing (MPC), which allows a group of individuals to share a private key (such as multiseg) and run a "distributed verification node" together.

DVT disperses the cost of individual pledges by reducing financial barriers for individuals or small DAOs to participate as Ethereum validators. This may greatly reduce the market concentration ratio of ETH pledge accumulated in Lido and centralized exchanges.

Source: DuneAnalytics

DVT also makes node validation a more robust process overall. When hardware failures occur, distributed verification nodes operating on the same node can replace each other. Just like multiple signatures, sharing a private key through DVT makes it more difficult for attackers to exploit it.

DVT is currently not publicly available, but companies like Obol have just started testing and deploying it on the main network and may be ready in the third quarter of 2023. For more information about DVT, please check out companies such as RockX, SafeStack, and ssv.network.

3. Proposer builder separation

The term 'decentralization' is widely used in the field of encryption, but the public secret is that most blockchains do not.

One of the main centralization vectors of the Ethereum protocol layer lies in the way blocks are constructed. When we submit transactions on the wallet, they will enter the ocean of Memory pool waiting for transactions. The block verifier (the miner in the PoW, the pledger in the PoS) took a bird's eye view of the Memory pool, found a profit opportunity, and began to sell the priority access right of block construction to arbitrage robots (searchers) in the underground bribery market.

These types of value extraction techniques are known as Maximum Extractable Value (MEV) attacks. They are largely hidden from daily users, but still pose a survival threat to Ethereum's decentralized spirit, with block miners extracting approximately $676 million before the merger.

Proposer Builder Separation (PBS) is the answer to this question by the Ethereum development community. As the name suggests, PBS aims to establish a division of labor between the two key tasks of block building: proposing blocks and building blocks. By doing so, the block verification node is deprived of the ability to distinguish individual transactions, as the content of the block is not determined by the same entity that ultimately built it on the chain (for more information, see Bankless's "Ethereum Review Getting Started Guide").

PBS will not be ready by 2023, and it is likely not to appear in another two years. Prior to this, third-party solutions such as Flashbots' MEV-Boost had already emerged, while alleviating this problem by creating an open free market in block building.

extend

MergeShapellaextend

EIP-4844, distributed verification node technology, and proposer builder separation are just some noteworthy big solutions.