In November 2020, the Eth2 launch process began. The network’s transition to proof-of-stake is expected to turn ETH into a deflationary asset.
Vitalik Buterin, co-founder of Ethereum, has laid out his vision for a “plausible roadmap” for Eth2, presenting a future in which the largest smart-contract platform can increase its scalability while meeting high standards for trustlessness and censorship resistance.
In a Monday post titled “Endgame,” Buterin presented a thought experiment for how the average big blockchain — defined by very high block frequency, high block size and thousands of transactions per second — can still be considered sufficiently trustless and censorship-resistant. The obvious trade-off for this level of scalability is the centralization of block production. Buterin’s solutions, as presented in the blog post, do not address the centralization issue, but still provide a roadmap for implementation.
Buterin proposed “a second tier of staking, with low resource requirements,” to carry out distributed block validation; “introduce either fraud-proof or ZK-SNARKS to allow users to directly (and cheaply) check block validity”; and “introduce data availability sampling to allow users to check block availability [and] add secondary transaction channels to prevent censorship.”
“We get a chain where block production is still centralised, but block validation is trustless and highly decentralised, and specialised anti-censorship magic prevents block producers from censoring,” Buterin said.
Buterin said block production would remain centralized even with the implementation of so-called “rollups,” which are layer-two solutions that execute transactions outside of the main Ethereum chain. (Interestingly, Buterin presented a rollup-centric roadmap for Ethereum in October 2020).
“No single rollup succeeds at holding anywhere close to the majority of Ethereum activity. Instead, they all top out at a few hundred transactions per second,” he said. While rollups appear to have the potential to contribute to distributed block production, decentralisation may not be sustainable due to the possibility of cross-domain maximum extractable revenue, or MEV. MEV, as the name suggests, refers to the maximum amount of value that can be earned from block production over and above standard block rewards and gas fees.
The Ethereum co-founder concluded that there’s a high probability that block production will end up centralized regardless of the path to scalability that the network takes. The benefit of Ethereum’s rollup-centric roadmap is that it’s open to all futures, he said.
Eth2 isn’t going to solve all of society’s challenges, but its design is well suited to empower people to solve them together, argues @ViktorBunin https://t.co/JhBvyVjr49
— Cointelegraph (@Cointelegraph) April 24, 2021
Since November 2020, when the protocol first began its long transition to proof-of-stake, excitement has been building around it. The much-anticipated London hard fork, which puts Ethereum on track to become a deflationary asset, took place in August of this year. EIP-1559, which aims to reform the network’s fee market, was introduced by the hard fork. According to Cointelegraph, over 1 million ETH has already been burned since the implementation of EIP-1559.
