The Ethereum Overhaul: What You Need to Know!

From Merging to making making Ethereum Quantum resistant

Nov 05, 2024

Ethereum as a blockchain ecosystem has been on the frontier of innovation pushing the boundaries of what can be done with decentralized technologies. From shocking the world with transitioning from Proof of Work to Proof of stake, and becoming a home for scalable L2s, the protocol keeps grinding ahead despite the numerous challenges it faces. amid recent bearish posts by folks on social media about the performance of ETH, the asset, Vitalik, the cofounder of Ethereum dropped a series of posts outlining Ethereum’s ambitious roadmap. Reminding folks why Ethereum is here to stay and possibly dominate. Here’s what you need to know.

Before we dive into Vitalik’s posts, feasts your eyes on the bigger picture, Ethereum’s ultimate end goal, or what others like to call “The EndGame”!

Possible futures of the Ethereum protocol, part 1 : The Merge

In “The Merge” post, Vitalik Buterin reflects on Ethereum’s successful transition from proof-of-work to proof-of-stake, highlighting improvements in stability, performance, and decentralization over the past two years. However, he identifies areas for further enhancement to maintain Ethereum's competitive edge and inclusivity.

Single Slot Finality and Staking Democratization

Currently, Ethereum finalizes blocks approximately every 15 minutes, with a minimum staking requirement of 32 ETH. Buterin proposes reducing finalization time to a single slot (~12 seconds) and lowering the staking threshold to 1 ETH to encourage broader participation. To achieve these goals, he suggests:

Advanced Signature Aggregation: Developing protocols capable of efficiently handling a large number of validators.
Orbit Committees: Implementing a system where randomly selected committees finalize blocks, balancing security and efficiency.
Two-Tiered Staking: Introducing different staking tiers with varying responsibilities and rewards.

Single Secret Leader Election (SSLE)

To enhance security, Buterin advocates for concealing the identity of the next block proposer until the last moment, mitigating potential attacks. He acknowledges the challenge of developing a protocol that is both simple and effective without adding excessive complexity to Ethereum's design.

Faster Transaction Confirmations

Buterin aims to decrease transaction confirmation times from 12 seconds to as low as 4 seconds to improve user experience and protocol efficiency. Approaches include:

Reducing Slot Times: Shortening the duration of each slot to accelerate confirmations.
Pre-Confirmations: Allowing proposers to publish preliminary confirmations during a slot, expediting the process.

Possible futures of the Ethereum protocol, part 2 : The Surge

Vitalik in this post delved into enhancing scalability while preserving decentralization.

Achieve Over 100,000 Transactions Per Second (TPS) on Layer 1 and Layer 2:
- Data Availability Sampling (DAS): Implementing DAS allows nodes to verify data availability without downloading entire datasets, enabling higher throughput without compromising decentralization.
- PeerDAS Implementation: PeerDAS, a simpler approach to DAS, uses existing peer-to-peer components to enhance data availability verification.
Enhance Data Compression:
- Reducing Transaction Data Size: By compressing transaction data, Ethereum can increase TPS without additional bandwidth, making the network more efficient.
Develop Generalized Plasma:
- Layer 2 Scaling Solutions: Generalized Plasma offers a framework for creating scalable Layer 2 solutions, reducing the load on the main Ethereum chain.
Advance Layer 2 Proof Systems:
- Zero-Knowledge Rollups (ZK-Rollups): Enhancing ZK-Rollups can improve scalability and privacy, allowing more transactions to be processed off-chain while maintaining security.
Improve Cross-Layer 2 Interoperability and User Experience:
- Seamless Interaction Between Layer 2 Solutions: Ensuring different Layer 2 solutions can interact smoothly will provide a cohesive experience for users and developers.
Scale Execution on Layer 1:
- Optimizing Layer 1 Performance: Enhancing the execution capabilities of the main Ethereum chain ensures it can handle increased activity from Layer 2 solutions.

Buterin emphasizes that addressing the scalability trilemma—balancing decentralization, scalability, and security—requires innovative approaches like DAS and Layer 2 solutions. He advocates for a rollup-centric roadmap, where Layer 2 solutions handle scaling while Layer 1 maintains security and decentralization.

Possible futures of the Ethereum protocol, part 3 : The Scourge

In this post, Vitalik addresses centralization risks in Ethereum's proof-of-stake (PoS) system, focusing on block construction and staking capital provision.

Key Concerns:

Block Construction Centralization:
- Current State: Specialized actors, known as builders, dominate block construction, leading to potential centralization and censorship risks.
- Proposed Solutions:
  - Committee Inclusion Lists: Implementing inclusion lists to ensure diverse transaction selection.
  - Attester-Proposer Separation (APS): Separating roles to distribute responsibilities and reduce centralization.
  - Encrypted Mempools: Utilizing encryption to prevent transaction manipulation and enhance privacy.
Staking Capital Centralization:
- Current State: Large entities dominate staking due to economies of scale, potentially leading to excessive control and value extraction.
- Proposed Solutions:
  - Two-Tiered Staking Models: Introducing different staking tiers to democratize participation.
  - Stake Capping: Implementing caps to prevent over-concentration of staked ETH.
  - MEV Burn: Redirecting Miner Extractable Value (MEV) to benefit the broader ecosystem.

Possible futures of the Ethereum protocol, part 4 : The Verge

Vitalik addresses the challenges of running fully-verifying Ethereum nodes, which are essential for maintaining the network's decentralization and security. He emphasizes the need to make node operation more accessible and efficient, enabling a broader range of devices, including mobile wallets and smartwatches, to participate in network verification.

Key Objectives of 'The Verge':

Stateless Clients:
- Goal: Enable fully-verifying clients and staking nodes to operate with minimal storage requirements, ideally just a few gigabytes.
- Approaches:
  - Verkle Trees: Implementing Verkle trees allows for more compact proofs, enabling stateless validation of Ethereum blocks. This means a node can verify a block without storing the entire state, reducing storage needs.
  - STARKs (Scalable Transparent Argument of Knowledge): Utilizing STARKs to create proofs of Merkle branches in a binary tree structure, offering quantum-resistant alternatives to Verkle trees. Recent advancements have improved the efficiency of STARKs, making them a viable option for stateless verification.
Validity Proofs of EVM Execution:
- Goal: Develop methods to verify Ethereum Virtual Machine (EVM) execution using succinct proofs, ensuring correctness without extensive computation.
- Approach: Employ zero-knowledge proofs (ZK-SNARKs or ZK-STARKs) to validate EVM execution, enhancing security and efficiency.
Validity Proofs of Consensus:
- Goal: Create proofs that verify the consensus process itself, ensuring the integrity of the blockchain without requiring full data access.
- Approach: Develop cryptographic proofs that confirm consensus correctness, allowing lightweight clients to trust the blockchain's state.

Possible futures of the Ethereum protocol, part 5 : The Purge

Buterin emphasizes the importance of balancing the reduction of bloat and complexity with preserving the permanence that makes blockchains valuable. He notes that while Ethereum has made progress—such as transitioning from proof of work to proof of stake and limiting the storage of old data to six months—ongoing efforts are necessary to ensure the network's scalability, technical sustainability, and security.

Key Objectives of 'The Purge':

Reducing Client Storage Requirements:
- History Expiry: Implementing mechanisms to reduce or remove the need for every node to permanently store all historical data, thereby decreasing client load and sync time.
- State Expiry: Exploring strategies to manage and potentially expire state data, ensuring nodes do not need to store outdated information indefinitely.
Reducing Protocol Complexity:
- Feature Cleanup: Eliminating unneeded features to simplify the protocol, making it more robust and easier to maintain.

Possible futures of the Ethereum protocol, part 6 : The Splurge

In the Splurge, Vitalik discusses various enhancements to Ethereum's protocol that don't fit neatly into other categories but are crucial for the network's success.

Key Enhancements in 'The Splurge':

Account Abstraction:
- Objective: Simplify user interactions by allowing accounts to function as smart contracts, enabling features like multi-signature wallets and social recovery mechanisms.
- Approach: Implement account abstraction to reduce reliance on externally owned accounts (EOAs) and enhance security and usability.
EIP-4337 Integration:
- Objective: Improve transaction flexibility and user experience by enabling features such as batched transactions and sponsored gas fees.
- Approach: Integrate EIP-4337 to facilitate these advanced transaction capabilities.
Proposer-Builder Separation (PBS):
- Objective: Enhance Ethereum's resistance to censorship and improve block construction efficiency by separating the roles of block proposers and builders.
- Approach: Implement PBS to allow specialized entities to construct blocks, while proposers focus on finalizing them, promoting decentralization and reducing MEV (Maximal Extractable Value) risks.
In-Protocol MEV Mitigation:
- Objective: Address the challenges posed by MEV, where validators can extract additional value through transaction ordering.
- Approach: Develop in-protocol mechanisms to mitigate MEV, ensuring fairer transaction processing and reducing incentives for manipulative behaviors.
Single Secret Leader Election (SSLE):
- Objective: Enhance security by concealing the identity of the next block proposer until the last moment, mitigating potential attacks.
- Approach: Implement SSLE to prevent adversaries from targeting specific proposers, thereby increasing the network's resilience.
Quantum Resistance:
- Objective: Prepare Ethereum for potential future threats from quantum computing by developing quantum-resistant cryptographic solutions.
- Approach: Research and integrate quantum-resistant algorithms to safeguard Ethereum's cryptographic integrity against future advancements in quantum computing.

Collectively, these initiatives are crucial for Ethereum's future, as they address current limitations and prepare the network for broader adoption and technological advancements. By focusing on scalability, security, decentralization, and user experience, Ethereum aims to remain a robust and adaptable platform in the rapidly evolving blockchain landscape.