Ethereum Seven Days Talk: Ropsten testnet merger was very successful

The Merge

Ropsten testnet merge was a great success

Danny Ryan summarized the Ropsten merger. He believed that the Ropsten merger was very successful and said that if the mainnet merger performed like this, he would jump for joy. Here are some data analysis:

~14% of validators offline during transition

1. 9% of them - configuration issues of Nimbus team, which were solved by modifying CLI and redeploying

2. 1.8% of them - Nethermind's known concurrency vulnerability, some nodes need to be restarted

3. 2.5%-3% of them - Nimbus-Besu web-socket issues, switch to http if these problems are also found in the mainnet transition

9% of node operators had configuration issues. There were two minor vulnerabilities affecting a small number of stakers, which could be fixed locally (without deploying new code)

That said, this can be seen as a huge success.

Ethereum Foundation developer @parithosh_j also added: “We will try to find a solution to the proposed blocks with no transactions (~10-20% of the blocks) + run synchronization tests in the next few days and find other ways. Also, on the mainnet, because EIP 1559 is deployed, the 0 transaction problem will not occur.

We will not see a throughput reduction issue itself, but this issue will definitely be resolved in the next testnet.

source:

https://twitter.com/dannyryan/status/1534928766022979584?s=20&t=VoM_UfOqaH-hzyc0b7yzAw

Difficulty bomb delayed until mid-September

At the 140th Ethereum Core Developers Meeting (ACD), developers discussed the difficulty bomb. The current block time is close to 14 seconds, which will increase by about 0.1 seconds by the end of June and by about 0.5 seconds in July.

After a long discussion, developers reached a consensus on postponing the difficulty bomb by about 2 months, and the upgrade will be carried out in late June. The EIP-5133 proposed at the meeting proposed a postponement of 500,000 blocks, about 2.5 months, that is, until mid-August.

But according to Tim Beiko's statement yesterday in the "Delaying Difficulty Bomb to mid August 2022" thread on the ethresear.ch forum, during the regular testing meeting of the client and testing team, after discussion, they finally decided to delay 700,000 blocks, which is about late September, when the block time will be roughly the same as it is now (~14.5 seconds). Therefore, two weeks before mid-September, the impact of the difficulty bomb will start to become noticeable (greater than 13.5 seconds to produce a block, similar to the situation in early June).

Discussion thread: https://ethresear.ch/t/delaying-difficulty-bomb-to-mid-august-2022/12762/9

At the meeting, Geth’s Marius indicated that delaying the difficulty bomb would be a “5-line code change” for the client, and would be easy to implement. This does not mean that it will slow down the merge process.

source:

https://twitter.com/TimBeiko/status/1535334143369760768?s=20&t=VoM_UfOqaH-hzyc0b7yzAw

What kind of progress do client teams need to see to feel confident about doing the next testnet merge?

At the 140th ACD, after summarizing the Ropsten testnet, Tim Beiko asked the client teams what kind of progress they needed to see in order to have the confidence to proceed with the next testnet merge. The following are the responses from the client teams.

Nethermind: Seeing all hive/kurtosis tests pass, solving block proposal issues, and fully solving their current parallelization issues. They want to see at least 1/2 of the code on the testnet basically finalized.

Erigon: Agreed that those tests needed to pass, and identified that they had a lot of issues to fix. Additionally, they reiterated that they wanted to fix their block building code, and resolve an issue related to returning the latest block in the merged JSON RPC.

Besu: Agree with all comments related to testing and emphasize the synchronization issues.

Geth: Agrees with other teams, and it is missing a JSON RPC flag for "safe" blocks.

The Teku, Prysm, and Lighthouse teams all had representatives in attendance, and they seemed ready for the next testnet merge, and although each had some minor issues, they did not see any of them as obstacles.

source:

https://twitter.com/TimBeiko/status/1535326595979673600?s=20&t=T_ly5ApyUk5uRT-dI2p5xw

Next, the order of test network deployment

Regarding the order of merging the Sepolia and Goerli testnets, developers discussed this issue at the 140th ACD.

First, you need to understand the difference between Goerli and Sepolia. Goerli is a large testnet with a lot of activity on it, where stakers can run merge transitions (with the Prater beacon chain).

Sepolia is a new testnet with little activity and a permissioned beacon chain. Goerli can give us a lot of data in many areas, and the transition to Sepolia will be much easier.

At the meeting, there was no clear consensus on this order, but the consensus layer team seemed to prefer to merge Sepolia first and then to Goerli, so that Goerli could be merged with code that is closer to the mainnet.

If it is decided to merge Sepolia first, the schedule is that the Sepolia beacon chain will be created on June 20 and merged on June 21 (TTD will be set at the consensus layer meeting on June 16 or the ACD on June 24). The specific configuration is as follows:

source:

https://twitter.com/TimBeiko/status/1535323877747748864?s=20&t=T_ly5ApyUk5uRT-dI2p5xw

Proposed changes to the Ethereum Block Builder Specification

At the 140th ACD, consensus layer researcher @ralexstokes proposed a modification to the Engine API and wanted to get feedback from other developers. This modification allows the consensus layer to specify a gas limit. This data will be added to the Engine API call and transmitted to the execution layer, which is useful for external block builders.

issue: https://github.com/ethereum/builder-specs/issues/29

Background of this issue: After the merger, validators will control Ethereum's gas limit, just like miners today. This parameter is set when producing blocks as part of the execution layer. Each time you select a block, you can adjust the gas limit up/down by 1/1024, or keep it as it is.

If you assume that stakers are block producers, then it is up to the stakers to communicate their desired gas limit to their execution layer, and that’s it. Things get complicated when validators are not the ones building the blocks themselves.

In practice, this is related to MEV. Validators who want to earn MEV fees need to run additional software to get blocks from searchers/relays. Therefore, in order for external block builders to follow the validator's gas limit choice, it is useful to make the gas limit specified by the validator explicit as part of the Engine API call. This is what this proposed change aims to achieve.

At the meeting, everyone agreed that this call should not modify the current API, but should be another version of it. Although everyone thinks it is useful, there are still some details that will continue to be discussed in the coming weeks.

source:

https://twitter.com/TimBeiko/status/1535321487845883904?s=20&t=T_ly5ApyUk5uRT-dI2p5xw

Layer2

Review of the Optimism Attack

On June 9, L2 scaling solution Optimism released a review of the OP attack. The following is a summary and subsequent progress:

In order to prepare for the OP token airdrop, the Optimism Foundation hired the well-known liquidity market maker Wintermute to provide market making services, aiming to make users experience a smoother experience when obtaining OP tokens and encourage users to participate more actively in the governance of the Optimism Collective. The Optimism Foundation allocated a total of 20 million OP from the Partner Fund to Wintermute.

The Optimism Foundation first sent two test transactions, and after receiving confirmation from Wintermute, it sent the remaining funds. Wintermute later discovered that they did not have access to these tokens because the address provided to Optimism was a multi-signature address of Ethereum/L1, and they had not yet deployed a multi-signature contract on Optimism/L2. So they started some remedial measures and tried to deploy the L1 multi-signature contract to the same address of L2.

Unfortunately, the attacker used different initialization parameters to implement this scheme first, thus gaining control of the 20 million OPs. The address then sold 1 million OPs.

The Wintermute team promises to monitor the transaction activity of this address and buy back the tokens it sells.

On June 10, Optimism released an update stating that the hacker had returned most of the OP, and the 1 million OP transferred to Vitalik Buterin had also been returned, and the remaining 2 million OP would be compensated by the Wintermute team.

Source: https://twitter.com/optimismPBC/status/1535275162060341248

0xPARC Foundation launches zkREPL, an online development environment for zkSNARKs

0xPARC Foundation is an organization focused on zero-knowledge technology popularization and education. It recently launched an online development environment zkREPL for zkSNARKs: https://zkrepl.dev/

Source: https://0xparc.org/blog/zkrepl

DeFi privacy bridge solution Aztec Connect delayed launch on mainnet

Previously, Aztec Connect announced that it would launch the mainnet on June 9. However, on June 10, Aztec said that it would postpone the mainnet launch of Aztec Connect due to some technical difficulties. The following is a review of the events released by Aztec:

The Aztec rollup is very large because it contains encrypted transactions, and the Aztec proof is over 300 kb, which exceeds the 128 kb transaction size limit of Geth. And because Geth is the most widely used Ethereum client, this makes it particularly difficult to send large transactions.

Our mainnet deployment planned to send large rollups via Open Ethereum, which has a higher transaction size limit. However, sending large transactions on Ethereum did not work, so we turned to Flashbots (a Geth fork that supports larger transactions). But sending transactions via Flashbots also encountered some problems: Flashbots transactions failed due to a format error in our PR.

Finally, Aztec said it would hold off on the release date and set a new timeline.

Source: https://twitter.com/aztecnetwork/status/1535024623456120832

Ecology

Celsius announces suspension of withdrawal, exchange, and account transfer functions

On June 13, Celsius, a centralized cryptocurrency financial services platform, announced that it would stop all withdrawal, exchange, and account transfer functions on the platform, sparking heated discussions.

Celsius was founded in 2017 and became the first platform to provide USD collateralized cryptocurrency loans. The platform covers 2B (corporate) and 2C (consumer) businesses, supporting functions such as savings, lending, deposits, payments and transfers. So far, the platform holds more than 150,000 BTC assets, has asset insurance worth 750 million on the fund custody platform GK8, and has paid more than 80,000 ETH and 5,000 BTC to the community.

After Celsius announced the suspension of service, Jack Niewold, founder of Crypto Pragmatist, gave an interpretation that can help readers understand the whole story of this incident from a certain perspective:

First of all, Celsius is a centralized DeFi platform that is responsible for hosting/managing cryptocurrencies on behalf of investors. It has gradually emerged in the past few years, guaranteeing investors a fixed interest rate and earning benefits for them. In fact, Celsius provides services similar to hedge funds or asset management, which are risky and require supervision.

Its main sources of income:

• Grant loans to institutions and individuals;

• After performing functions on behalf of the client, retain any remaining profits.

So, if they advertise a 5% yield on depositing USDC, and then convert the USDC into UST which yields 20%, they can keep 15% of the profit.

Celsius has performed better in 2020 and 2021, reaching a valuation of $10 billion and recently raising $400 million.

The problem is that Celsius is being managed like a group of high rollers or degens: According to CoinDesk, Celsius acknowledged that it suffered losses in the $120 million BadgerDAO hack, but is not going to detail its losses.

Currently, Celsius has stopped providing services for reasons of poor investment:

• The asset position involves Terra, which may hold up to $500 million in UST and is at risk of imminent collapse;

• The asset position involves Lido, which relies on a 1:1 ratio between stETH and ETH because it needs to match assets and liabilities, which is feasible in a bull market. In the face of liquidity crises and bear markets, the ratio between stETH/ETH will tilt. (In fact, the relationship between the two tokens is not 1:1 anchored, and the ratio between them fluctuates with the secondary market)

• Regarding the issue of unwinding the position, Celsius may not have achieved risk isolation: it took USDC collateral and exchanged it for UST, and it took ETH and exchanged it for stETH. Therefore, when all cryptocurrencies fell, customers wanted to get their funds back, resulting in a shortage of funds for Celsius.

As a result, Celsius is currently facing a severe liquidity crisis, and its spiraling price will become increasingly difficult to match its assets and liabilities, so it is shutting down its services.

Since Celsius has no liquidity, where are their assets? The answer is below:

• Approximately $400 million worth of assets are staked on the Ethereum beacon chain;

• There is another 400 million in assets placed in the Maker protocol for leverage (but Maker is approaching the liquidation stage).

In addition, Jack Niewold also proposed measures to solve Celsius’ current predicament:

• External funding;

• borrowing;

• Accept acquisition (Nexo has proposed to acquire Celsius)

Source: https://twitter.com/JackNiewold/status/1536401979466981377?s=20&t=VoM_UfOqaH-hzyc0b7yzAw

Snapshot announces official partnership with StarkWare

On June 9, Snapshot officially tweeted that it had formally entered into a partnership with StarkWare. The strategic cooperation between the two aims to improve the efficiency and inclusiveness of DAO governance, and to ensure that users can enjoy both security and cheap fees.

Source: https://twitter.com/SnapshotLabs/status/1534872022257311744

Gitcoin Grants receives support from a large number of institutions

On June 10, Gitcoin launched the 14th round of Gitcoin Grants (GR), which will last until June 23. Gitcoin Grants aims to find valuable web3 projects and verify and shape a better Web3 future with the support of cryptocurrency market leaders.

Gitcoin is a platform that helps raise funds and coordinate open source code development through quadratic financing. In this round of Grants, Gitcoin welcomes donations from all types of projects, including software, tools, major infrastructure, media, and communities. At the same time, GR14 and three different types of GR14 Hackthons are taking place simultaneously:

• a main round of donations, totaling $1 million in matching funds;

• 13 rounds of ecosystem grants, totaling more than $1.1 million in matching funds;

• 3 rounds of utility donations totaling over $1 million in matching funds.

Azeem Khan, the builder of the Gitcoin system, mentioned in a BSC news report,

We are excited to see the results of GR14’s grantmaking so far, with the number of individual contributors to the project already small, and we have raised over $3 million to award grantees from many good companies. Funding public goods is one of the most important things we can do in this space to foster an open internet of the future. We are honored to have the opportunity to empower a generation of builders.

Gitcoin is committed to empowering communities and projects to build on Web3, and has received support from well-known sponsors such as Coinbase, Yearn Finance, Chainlink and Polygon.

ECN: https://gitcoin.co/grants/380/ethereumcn

Source: https://www.bsc.news/post/gitcoin-grants-earn-massive-institutional-backing