To the surprise of many, the ETH merge went smoothly: but this is just the beginning of a multi-step plan to optimize ETH, as quickly as possible.
In episode #138 of the Bankless Podcast, Vitalik joins hosts David Hoffman and Ryan Sean Adams to reflect on the merge, and explain the work to be done ahead.
Read our notes below to learn more.
Vitalik on the Merge
● ETH critics may say sharding will never happen, or that ETH will face issues scaling.
● Testnet merges didn’t go as smoothly as the actual merge did, due to settings choices.
● Climate change is a legitimate risk, PoW contributes to this.
● ETH PoS allows investors who are concerned about climate narrative to buy ETH.
● ETH doesn’t have to choose to appeal to either people who value climate, or people who value economic freedom.
● Some energy will go to ETH PoW chain, but long term the merge will reduce energy consumption significantly.
Journey to PoS
● ETH roadmap has changed a lot over the years.
● PoS initially planned as a smart contract system built on top of ETH via a separate sharding chain.
● In 2018 Justin Drake inspired the idea of ETH beacon chain.
● Sacrificed certain things to finalize the merge, including optimizing the EVM.
● Still very far from optimal ETH PoS.
● Other chains e.g., Zcash, and Dogecoin, could learn from how ETH implemented their move to PoS.
● Looking back, Vitalik would have liked to have focused on the merge format earlier. He also would have liked to focus more on rollups as scalability options.
● No point in making a rollup that isn’t general purpose.
ETH Timeline
● What will be added to ETH in the near-term:
● 1. Post-merge withdrawals.
● 2. Distributed validators.
● 3. Single secret leader election.
● 4. Single-slot finality and signature aggregation. This item has been prioritized by ETH devs and the community. Implementing this could mean sacrificing the 32 ETH validator balance or economic finality level.
● “The Surge”: Currently working on implementing dank sharding via EIP- 4844, which increases scalability for rollups. There is a lot to be done, and this is the current priority.
● “The Verge”: Have made progress on verkles trees, will be a large engineering challenge. This allows users to run nodes more efficiently.
● “The Purge”: Have deprioritized many steps in this stage, including state expiry. May need another year or more of prioritizing important issues before getting to this stage.
● “The Splurge”: Account abstraction, MEV smoothing are important. Vitalik emphasized that ZK-SNARK technology for everything is more important than the splurge.
Staking Economics
● Could make staking deposit and withdraw queues shorter. This makes validating easier, as well as incentivizes more decentralized staking pools.
● Changing MEV architecture and implementing MEV smoothing would reduce the variance of staking revenue and incentive to be in a stake pool.
● System requirements for nodes will decrease.
● Vitalik is hopeful that staking on mobile phones will be possible within 5-10 years.
● 2 methods to reduce ETH staking deposit:
● 1. Can rotate validators in and out.
● 2. Have every validator stake in every slot. This removes the need for individual validators to have multiple slots. This would increase speed and create more staking options.
● Lido is still relatively decentralized and can be trusted for the most part.
● For comparison, over 50% of BTC network is in a few mining pools.
● ETH PoS much more decentralized than PoW ETH.
● ETH PoS can better recover against a 51% attack.
Censorship Resistance
● People should be worried about on-chain censorship.
● Common method for censorship would be block producers being controlled by centralized entities.
● To combat this, people have developed counters, including:
● 1. Validators pre-setting certain transactions that must be approved by block producers.
● 2. Validators could add certain transactions to the end of a block, so the block producers don’t realize what they’re approving.
● Numerous other solutions to bring autonomy to validators.
● Relayers may not be apart of ETH in the future, only builders.
● Censoring causes builders to produce lower bids, reducing the chance of validators selecting them.
Vitalik on L2s
● ZK EVM rollups are progressing.
● Optimistic rollups may just decide to become ZK rollups before they fully upgrade.
● Important to get wallets, bridges, and dApps on L2s ready for users.
Important Links