Dialogue Record: Five Questions about the Merger of Ethereum

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: DeFi's Way

Title of the original text: Round table discussion: five issues after the merger of Ethereum

What is a merge?

Mindao, founder of dForce

Let's take a look at the development of crypto as a whole, from Bitcoin to various improved versions of forked coins, and then to the new public chain that we have seen so far. One characteristic of this trend is that their consensus algorithms have basically not changed significantly, such as Bitcoin POW, which has not undergone any changes until now, and Solana's POS consensus mechanism has not changed since the beginning. Ethereum is special. It should be the only public chain that has migrated from a consensus algorithm to a completely different consensus algorithm.

The change of consensus algorithm can be used as a metaphor. Ethereum has been a flying Jet aircraft since 2015. What should we do now? Due to the change in consensus, its engine needs to be replaced during uninterrupted flight, and the flight cannot be stopped. This is also a huge difference between a decentralized system upgrade and a centralized system. In a decentralized system, it is not allowed to maintain and upgrade during an interrupted time, as this can lead to many protocol clearing and other issues. In fact, since the end of 2020, the beacon chain has been executing POS algorithms, but there have been no transactions on the beacon chain, just a consensus algorithm system running.

Consolidation means that the engine of the consensus algorithm has been changed from POW to POS. After the consolidation, Ethereum has completely stopped mining in the previous POW and changed to the POS consensus mechanism. Other subsequent upgrades and expansion partitions of Ethereum 2.0 are based on the POS mechanism. For the entire public chain, this upgrade is not only a simple consensus algorithm issue, but also tests the ability of a public chain to switch from one consensus mechanism to another. If it can be smoothly migrated, it will be a significant milestone event for all public chain upgrades and hard forks. Another key point is that if the migration of POS is completed, it basically means that POS, as the infrastructure of the public chain, has formed its monopoly position. In the future, all infrastructure of the public chain may go to POS, which means that the entire public chain infrastructure resources, developer resources, and financing resources will be tilted towards POS.

However, currently, merging is only a migration of consensus algorithms, and there is not much significant change for users. Gas costs will not decrease, and TPS expansion will not have a significant impact. However, when some new modules are added in the future, it will greatly improve L2 and main chain expansion in the next two years.

Ambergroup Blockchain Analyst Lao Bai

Another image example of the transformation from POW to POS is that POW means everyone rolls the dice together. The first one who rolls the dice to six sixes can produce the dice first. Under the POS mechanism, the dice rolling has been canceled, and it has become a lottery mechanism. Since various subsequent expansion technologies of Ethereum require you to use this lottery mechanism, the consensus mechanism must be changed, and this change has basically set the tone when it was created in 2014. In fact, the POS mechanism has not had much impact on the TPS and GAS of Ethereum L1. Its purpose is to make L2 faster, cheaper and better used. After the merger, the future of L2 will become brighter, not to say where L2 should go, which is contrary to many people's understanding.

After the merger, will the degree of decentralization of Ethereum 2.0 be improved? Or will it be even lower?

Mindao

Let's first take a look at the L1 of other POS mechanisms, such as Solana, AVAX, and other new public chains. One of their characteristics is that VC institutions have a particularly large share of tokens, such as Cosmos. The first two or three nodes of many new hubs account for more than one-third of the proportion. Under the consensus of POS, more than one-third can basically stop a chain. Ethereum has a very good foundation and endowment, which is that it is converted from POW. After such a long time, the distribution of its entire Token has become very dispersed.

And even after switching to POS, I don't think that the degree of Ethereum centralization will be improved, or that the improvement of node centralization will have much impact on Ethereum's own governance, because Ethereum's own governance is not a pure chain governance at present. The so-called pure chain governance means that you have enough Tokens, and you can let an executable proposal pass through the chain, But I don't think that Ethereum 2.0 itself has this problem. Now Ethereum communities prefer to govern through social consensus. Under social consensus, it is not only the currency holders who play a role. In fact, through social consensus, it can resist the so-called POS node centralization problem to some extent.

For example, Lido is currently the largest pledge service provider on Ethereum, with millions of ETH pledged on it. Previously, the Ethereum community proposed a controversial proposal to limit Lido's market share to a certain number. Therefore, the Ethereum community itself has a strong sense of vigilance and self-awareness regarding decentralization, so I am not concerned about Ethereum's so-called higher centralization after POS, I don't think it's just a mechanism issue. Under the POW mechanism, nodes are actually concentrated in these large mining pools. Finally, there is the review and supervision of nodes. For example, in the Tornadocash incident, from the perspective of POS nodes, reallocating voting rights is actually much easier than POW. It is easy to transfer your voting rights from one node to another under POS. I believe that in this so-called regulatory matter, I personally believe that the POS system has stronger flexibility.

Old White

Regarding the anti censorship of POW and POS, I think POW is like opening a store, which is not easy to move. If it is censored, everything has to be thrown away. If it is POS, you can transfer assets at any time and then find a new staking service provider to pledge.

In my opinion, from the perspective of POW to POS, there will be a little more centralization. The most simple example is that you can build nodes with only 10000 or 20000 yuan to buy a Bitcoin mining machine, but you need at least 32 Ethereum mining machines. The higher cost of the latter means that most individuals will not run to Ethereum nodes themselves. Finally, we rely on Lido, Coinbase, Coin Security and other protocols or CEX to build a verification pool. The final situation may be that POS and POW will reach the same goal by different routes. That is, there will be a power structure of several ore pools to control the blocks. In fact, what deserves our attention is not the consensus mechanism itself, but there are core figures like Vitalik behind Ethereum, as well as centralized organizations like the Ethereum Foundation, infura, metamask There are also a large number of AWS Amazon Cloud interventions, especially many nodes and some infrastructure are using AWS, which is actually the current focus of Ethereum.

How to view the dispute between POW and POS consensus mechanisms?

Pan Zhixiong, Founder of Chainfeeds

It cannot be said that the era of POW has come to an end, because POW is essentially a competition for resources in the entire physical world, such as power resources and chip resources, which are physically limited. Therefore, POW has its own capacity limitation, which will lead to fewer and fewer new public chains adopting POW mechanisms. If there are more new public chains in the future, it is unlikely to adopt POW as a common mechanism.

But for old public chains, especially those led by Bitcoin, they have no reason to convert to POS because they can achieve better security through POW consensus. So, for some new public chains, POS is definitely their preferred option, while for old public chains, POW may be the only option.

Colin Wu, Founder of Blockchain, Wu Shuo

Now the world is facing the impact of the Energy crisis and the concept of low-carbon environmental protection. Against this background, Ethereum to POS is more suitable for this concept at least at this stage. Now, whether in the United States or the European Union, the environmental protection issues of POW are increasingly opposed.

Since Bitcoin did not enter the mass market and mainstream society as Ethereum did, nor did it generate so many applications on Ethereum networks, POW is fully sufficient for it, but for Ethereum, POS is a necessary transformation, which has relatively little relationship with Technology roadmap. Most of them must conform to the mainstream values of environmental protection after entering the mainstream society.

Zuriel, co-founder of Photon

Environmental protection is an additional benefit, mainly because of the performance benefits of POS. The underlying design of POW itself is relatively complex, and there is little room for improvement. For Ethereum, the historical technical burden is relatively heavy, such as account abstraction. There are many technical designs that have never been realized. Therefore, POS is an opportunity for everyone to get rid of this technical burden, and a rebirth opportunity. The main focus of this transformation is the friendliness towards Layer2, such as EIP-4844, which will greatly improve the expansion of Layer2.

What is the anti censorship capability of the merged Ethereum node?

Stephanie, core member of ECN Ethereum Chinese Community

The degree of decentralization can be judged from different perspectives. First, the number of nodes on the beacon chain is compared with the number of nodes on the original Ethereum. The number of nodes on the original Ethereum is more than 7000, and the number of nodes on the beacon chain is more than 10000. Secondly, from the distribution of nodes, the top five ore pools of the original Ethereum account for about 65%. In the POS Ethereum, the pledge pool accounts for 41%, the exchange 32%, and Jujing 11.5%. The top five project parties are Lido, Coinbase, kraken, Binance, and BitcoinSuisse, and the combined account for about 59%. From this perspective, POW and POS do not show obvious advantages, but the hardware threshold under the POS mechanism is relatively low, In addition, a decentralized pledge agreement like RocketPool allows people with less than 32ETH to operate nodes, making it relatively easier for its POS nodes to expand horizontally.

From the perspective of client diversity, the diversity of consensus layer clients is much healthier than that of the execution layer. Currently, there are five mature consensus layer clients, with the highest proportion of Prysm accounting for 43.48%, which is much better than the situation under the POW mechanism. Therefore, considering this, the security of POS will be better. As for privacy and anonymity, there have been no significant improvements in this merger. In order to improve the anti censorship ability of interview nodes after the merger, it may be necessary to pay attention to a scheme called PBS, which proposes a separation scheme between proposers and builders, which can effectively enhance the anti censorship ability of validators.

Colin Wu

Firstly, whether the anti censorship incident is a technical or political issue is worth exploring. It is also doubtful whether it is a good thing or a bad thing for the ecology to make anti censorship stronger. For example, after Litecoin passed the privacy scheme, it was taken off the shelves by a large number of centralized exchanges. So if ETH technically makes anti censorship good enough, will it encounter more severe regulatory backlash, and finally make it a political issue?

It is not meaningful to discuss which is better to resist censorship between POW and POS from the Technology roadmap. We see that Ethermine, the largest mine pool of Ethereum POW, has refused to package transactions related to the sanctioned mixed currency agreement, which shows that it is not meaningful to consider anti censorship from the Technology roadmap. More like a political issue, it needs some community leaders, as well as some large companies and exchanges to communicate with the US government and the EU, Technicians should take a middle course, as if they make censorship resistance too strong, it may lead to a stronger rebound at the regulatory level.

Pan Zhixiong

After the TornadoCash incident, the whole Ethereum community still hopes to completely solve the problem of censorship. However, from another dimension, the Bitcoin community will pay more attention to anti censorship. Whether from the node distribution of Bitcoin or the model design of UTXO, it is more resistant to censorship than Ethereum itself, but it is not a general-purpose computing network, and it cannot carry smart contracts. Ethereum uses an account model, so it will be easier to track, but it is technically possible to solve the problem. Now we can see that the Ethereum community is proposing some EIP solutions, There may also be more ways to gradually solve this problem in the future.

Zuriel

Anti censorship incidents are a hot topic, but not an issue. In the short term, anyone can pledge 32 Ethereum as verifiers to obtain the right to block out and vote. In the most extreme case, all centralized institutional nodes are required not to be packaged, but those private nodes running on personal computers can also be packaged for transactions, so they cannot be fully reviewed in the short term. In the long run, Ethereum is promoting the separation of blocker and packager, that is to say, there will be a bunch of computers with strong performance, which will package the transaction and give the packaged transaction to blocker. The blocker does not know what specific transactions are inside, so that the blocker can be left out of review.

What is the most anticipated next step?

Pan Zhixiong

At present, Ethereum itself has actually divided several layers of the network, and now it has been divided into at least three layers. Then each layer may continuously iterate and introduce technologies such as ZK, which pose significant challenges and challenges. I think that in addition to the network layering, ZK technology will also bring great changes and differences to the basic layer of Ethereum, which is worth looking forward to

Zuriel

The code in Ethereum 2.0 is written in go language, but there are concerns about the quality of the code. I have also found some bugs before, so it is very likely that others will find the bugs and launch some attacks on the merged Ethereum. For example, I attack the network while shorting Ethereum. Of course, this attack will only result in the non blocking of the consensus layer of Ethereum. The funds and these are still on the execution layer, and there is no problem.

Next, of course, I will focus on upgrading in Shanghai. For OP and ZK L2, OP will be a good choice in the short and medium term, but ZK will be the key in the long run. But ZK is not a blockchain problem, but a Cryptography problem. This challenge of Cryptography+engineering combination, I think, may become the key to Ethernet.

Stephanie

My expectation is that on the one hand, Ethereum's capacity expansion can make ordinary people feel free to use GAS; on the other hand, the cost of running nodes is getting lower and lower, which makes it easier to decentralize, challenge and crisis. I think the current Ethereum system is becoming more and more complex. With more and more EIPs added to it every time, this may lead to no developer being able to have a very familiar and overall understanding of the entire protocol, In this situation, the seeds of crisis will be planted.

Cryptoleek

My opinion is that the future of Ethereum is L2, and the future of L2 is ZK. Because Ethereum really carries a lot of things, and stability is the most important thing for him. Even after the merger really starts, we need to continue to observe, and then for the upgrading of Shanghai, which is very important for Danksharing.

Responsible editor: Kate