This article covers Vitalik Buterin's recent publication, summarizing the latest Dencun upgrade and spotlighting the key tasks for the forthcoming years. We break down, in layman's terms, the anticipated updates and surprises that could shape the platform's future.
Why is Ethereum Undergoing a Transformation?
Blockchain technology, initially nurtured by a tight-knit community of enthusiasts, has ascended to unprecedented global prominence over a decade. This breakthrough was achieved with the advent of L2 solutions—innovations designed to augment Ethereum's efficiency and cost-effectiveness. The foundational L1 blockchain continues to serve as the cornerstone for all architectural solutions. Despite a growing trend of migrating applications from L1 to L2, Vitalik views this foundational aspect as a constant.
The motivation behind this transition is straightforward: it's all about the disparity in transaction fees.
Yet, this shift presents a conundrum: L1 suffers from sluggish transaction speeds, while L2 faces limitations in data storage capacity.
The resolution to this issue was unveiled with the March Dencun upgrade through the introduction of EIP-4844 (Proto-Danksharding) and what's termed "binary large object transactions" (BLOBs). These innovations enable the blockchain to house substantial volumes of information. Consequently, Ethereum's focus has naturally pivoted towards enhancing L2 solutions.
Over the last few years, we have seen Ethereum slowly shift over to becoming an L2-centric ecosystem. Major applications have started to move over from L1 to L2, payments are starting to be L2-based by default, and wallets are starting to build their user experience around the new multi-L2 environment.
Vitalik highlights several L2 advancements, including:
- DAS (Decentralized Autonomous Storage), a durable solution for segregating vast amounts of L2 data from L1.
- The launch of PeerDAS, a streamlined variant of DAS that permits individual nodes to store portions of L2 data.
- The expansion of rollup capacity, significantly boosting L2's transaction processing speed.
Without the evolution of these Layer 2 solutions, the network can neither achieve enhanced speed and cost efficiency nor offer a more user-friendly experience.
What are the Practical Implications?
Vitalik is set on making decisive strides. He asserts that the Core team has laid out all the necessary tools for high-quality development work. Thus, there’s no longer room for excuses to craft subpar applications that lack scalability. Ethereum stands fully primed for widespread adoption, and the ball is now in the court of developers working on L2 projects.
Buterin contends that the founders of these Layer 2 projects have only themselves to blame for setting the bar too low, leading to the proliferation of inefficient apps within the Ethereum ecosystem. These apps are essentially unscalable prototypes. Buterin, however, is determined to change this status quo.
Today, we have all the tools we'll need, and indeed most of the tools we'll ever have, to build applications that are simultaneously cypherpunk and user-friendly. And so we should go out and do it.
Buterin is vocal about his belief that investments should focus on addressing real-world problems rather than ephemeral projects with proprietary tokens that quickly enrich their creators at the expense of others. He believes that even meme coins should serve a purpose, hinting at potentially stricter criteria for L2 projects ahead.
Kathleen Breitman, the co-founder of Tezos, makes a valid point: Ethereum's leadership could introduce protocol-level scaling solutions to cut costs and enhance network efficiency, without solely depending on L2 solutions. While L2 has addressed the issue of scalability, it has also led to a glut of valueless tokens and significant issues for the crypto community, driven by unwarranted hype.
Ethereum has upgraded from being "just" a financial ecosystem into a much more thorough independent decentralized tech stack. Across the ecosystem, we need to fully readjust mindsets accordingly to this too.
The lingering question is how Vitalik plans to achieve this in a decentralized network open to all developers. Will mere ideological appeals suffice, or will it necessitate direct prohibitions and crackdowns?
