What did Vitalik Buterin say at the Ethereum Shanghai Summit? The Ethereum merger may begin in August

Original title: "First release | What did Vitalik say at the Ethereum Shanghai Summit? A review of the latest developments in the Ethereum ecosystem"

At the Ethereum Shanghai Web 3.0 Developer Summit (ETH Shanghai Summit), hosted by Mask Network, co-organized by the China Biodiversity Conservation and Green Development Foundation and China Business Network, and sponsored by the Ethereum Foundation, Ethereum co-founder Vitalik Buterin delivered a keynote speech entitled "ETH & Shanghai: Inside and Outside Shanghai".

The following is the full text of the speech. Click to watch the video of the speech.

Today, I want to talk about the latest changes in the Ethereum protocol at the Ethereum Shanghai Summit. I know that many people want to know about the news that Ethereum will merge PoS (Proof of Stake) into the existing PoW (Proof of Work). And what other improvements are happening in addition to the Ethereum ecosystem and applications.

The main topic today is "Merge", which means switching from the original PoW consensus mechanism to the PoS consensus mechanism. We have been working on the conversion of the two almost since the beginning of the Ethereum project. We have spent 7 years on the "merge". Now, all the efforts have gradually paid off. We have already carried out the "merge" on the Ethereum test network Ropsten a week ago. It is expected that we will complete it on June 8th. If everything goes well on the test network, we will "merge" on the main network this summer. This is our next major action and the biggest action we have done so far, which will lay the foundation for the "merge" of any on-chain application in the future.

If nothing goes wrong, the “merge” should start in August. However, there may be problems during testing, and the “merge” on the main network may be delayed, perhaps not until September or October. But the time for the “merge” is very close, and we should think about what will happen after the final “merge”?

Regarding this, I published a paper on protocol updates in May. These things have long existed among Ethereum developers, and the beacon chain and PoS have been developed by them for a year and a half. In fact, there may already be a small number of users in the beacon chain. EIP-1559 is now running. In the next few years, there will be many new changes. For your convenience, I will divide them into five parts, namely Merge, Surge, Verge, Purge and Splurge.

"Merge" means switching from PoW to PoS. Surge is a type of sharding that increases scalability by processing a huge amount of transactions through rollups. To this end, we designed EIP-4844 (Proto-danksharding). I think there are many different ideas for the ability to sample sharded data. For example, The verge can switch the Verkle tree, which can make Ethereum nodes run more efficiently. In this way, even if your computer configuration is not high, you can still easily become a validator and make the protocol more decentralized. This can make it easier for more people to verify and become a member of the Ethereum chain. In the process of "merging", there will be a lot of positive feedback.

For example, Purge can improve the efficiency of operation by canceling the permanent storage of all historical block information. For example, node service providers do not need to store all the data in the block, they only need to store data for the past year, and some data that has not been accessed for a long time will be placed in another storage space, and the node does not need to store them.

Some parts of the Ethereum protocol are too complex, which makes it harder to create an Ethereum node, and they can be removed from the Ethereum protocol, and then they can be simplified by Splurge, which contains a lot of important information. There is also an update on the virtual machine, which has a specific solution, which for us means that we will discuss our ideas for a longer time.

In short, there are a lot of changes coming. I don't think every one of them has to happen, so if we go through the "merge" without any surprises, Ethereum will still be a good system. In other words, I think if we successfully complete the "merge", Ethereum will be a more perfect system. The first major thing after we complete the "merge" is EIP-4844. Something worth keeping our eyes on in the near future is the improvement of the scalability of the entire Ethereum by sharding.

Recently, there have been a lot of changes and simplifications in the design of the sharding roadmap, and I had some ideas about Danksharding. That was released at the end of last year, and dankSharding really makes the sharding roadmap much simpler. In the past, there were 64 proposers for 64 shards, however in practice this led to a lot of duplicate confirmations, which in turn led to market centralization, but in danksharding, there is only one proposer who chooses all transactions and all data that go into that slot. The main feature introduced by EIP-4844 is a new transaction type, which we call blob-carrying transactions. A blob-carrying transaction is like a regular transaction, except that it also carries an additional data called a blob. Blobs are very large (~125 kB) and are much cheaper than a similar amount of call data. However, EVM execution cannot access the blob data; the EVM can only view the commitment to the blob. Because validators and clients still need to download the full blob content, the data bandwidth target in EIP-4844 is 1 MB per slot instead of the full 16 MB. However, since this data does not compete with the gas usage of existing Ethereum transactions, there are still big scalability gains. Projects like Arbitrum, Optimism, Stark Net, Polygon, and Rollups can all benefit greatly from EIP-4844. As more and more developers flock to them, they become more and more sophisticated. Currently, EIP-4844 is just the first step for Danksharding, and all nodes still need to download all the data, but it does a lot of work for Danksharding. Although it can't handle 16M of data, it can still handle 1M of data, which is a big improvement. We have done a lot of work for this, and a lot of work will continue in the next 6 to 9 months or so. I think EIP-4844 must be a very important ecosystem. I am looking forward to its progress.

That’s it for sharding, let’s move on to Account Abstraction. Account abstraction is currently just an idea of ​​mine, which allows each user to arbitrarily create accounts for their wallets, and these accounts are protected by a complex set of rules.

For example, you only have one wallet and one private key. If the private key is stolen, the wallet assets will be cleared. What if you have an account with three private keys? If one private key is stolen, it’s okay, you still have two. If another private key is lost, it’s okay, hackers can’t do anything with these two private keys. You can still use the last private key to urgently modify other accounts.

This example may be a bit complicated, but abstract accounts are actually more convenient than this. They can provide many functions, such as multi-signature and social recovery, allowing you to more easily recover your hacked account.

A more efficient and simpler signature algorithm helps your account resist hacker attacks and makes the account itself upgradeable. To achieve this, we developed the ERC 4337 protocol. ERC 4337 is not an EIP, it is an ERC, which means that there is no need to provide the basic principles and technical specifications of the technology. In fact, it is already possible to use ERC 4337 to create accounts and send transactions, and there is a community of developers who are already studying ERC 4337. I hope they can improve ERC 4337 faster, and you as developers and users can also join in.

It's almost time to talk about Verkle Tree, which is an upgrade that basically allows you to verify Ethereum blocks without any hard drive space. Currently, if you want to verify an Ethereum block, you must have the complete information of the block, which is about 40-50 GB in size; and you have to verify it in order. Verkle Tree will make it easier to verify a single block without any other information. Therefore, this makes it more convenient to have a client that can verify every Ethereum block without hard drive space. You can also verify blocks in any order, and Verkle Tree makes it faster for more different users to run nodes, which is an improvement to decentralized security.

MEV Solution. I think MEV is increasingly being recognized as a big problem that needs to be dealt with like Ethereum. If MEV is allowed, it means that miners or PoW record keepers can reorder, insert or censor transactions within the blocks being produced, and profit from the users of Ethereum because they have complete autonomy over the blocks. The challenge of solving MEV is how to design an ecosystem that prevents PoS from becoming centralized. There is a lot of work to be done here, and I have proposed an idea called proposer/developer separation. Anyone who wants to learn more about this can check out this article (https://notes.ethereum.org/@vbuterin/pbs_censorship_resistance). This is a new idea, and this long-term direction is mentioned in PoS.

This is another new idea, and there are some long-term changes proposed for PoS. One of the big changes is single-slot finality, which allows blocks to complete transactions in one slot instead of 64 slots as they do now. This will allow transactions to be processed faster while making the protocol simpler and resistant to MEV attacks. Although it is in very early experiments, there is a lot of research going on. This is something that will take a long time to achieve, and we may see results in three to five years. It is also a big improvement to the operating mode of Ethereum, making Ethereum simple, interesting and worth paying attention to.

One of my thoughts on the Ethereum ecosystem is that the crypto space, including the Ethereum space, is now too focused on financial applications. I think financial applications are good and important, but they also have great risks. I think when people continue to try to develop and optimize financial applications, they also bring great risks. Some of the early DeFi ideas in the past two years are actually great, such as MakerDAO, and the early stablecoin ideas are great. But I think some of their recent ideas for improving DeFi protocols are too much, and it’s hard for me to favor them. Take Luna and UST as examples recently. They just said, "Oh, you need collateral to get a stablecoin, let’s create a stablecoin that doesn’t require collateral." Of course they did it, and they successfully ran for two years in the bull market, and the price continued to grow. But now with the decline in Bitcoin and Ethereum prices, Luna has completely collapsed, and many people have lost a total of more than 10 billion US dollars.

I think a lot of the reason people are interested in DeFi comes from dissatisfaction with traditional finance and the collapse of the system in traditional finance in 2008. It showed that the financial system was too eager to pursue efficiency and ignored better resilience and being robust in very special times. But unfortunately DeFi went too far in that direction. I think the problem is that, like more innovations in the financial field, it just creates something that is riskier. Even if they are like our Uniswap V2 and Uniswap 3, they just improve the way they work a little bit. But it's like the difference between Uniswap V2 and Uniswap V3 is not that big, right? You know the difference between Uniswap V3 and Uniswap V4? I think it's smaller, just like having better DeFi, I think it will be an improvement. But it's not going to be like massive changes to completely change the world. I think people are in crypto because they really want to change the world and do something big. And I just don't think there are too many major impacts on financial applications, and I think it makes more sense for more developers to start focusing on other areas. I think DeFi is great, and I think we do need our own DeFi, and beyond that we need more things like blockchain non-financial applications.

One of the applications I'm excited about is the Sign in with Ethereum feature. Basically, whether it's a dApp or an app, you can sign in with your Ethereum account. Even if you go to a chat site like chat.blockscan.com, it's a centralized chat application. But you can still sign in with your Ethereum account, and this is something that more and more services are adopting, and we expect to see more services use Ethereum as a login method. I think there are a lot of advantages to signing in with Ethereum compared to centralized logins. First of all, it's not connected to any centralized identity, so you control your account. Your account can't be closed because a company wants to close it, which is very data sovereignty. You can own your identity in this way. But it also has a mesh effect, it connects to the open ecosystem, which means that if you sign in with your Ethereum account, you are also signing in with your ENS domain. You can verify that you have a Humanity profile, POAP, NFT, or verify everything else. All of these applications that people are building on Ethereum can really be connected to each other, and I think this is a very exciting feature.

Soulbound tokens, this is an idea that I've been talking about for a while, and it's going to launch this year. This idea, we like not just tokens that are not transferable. These tokens have a lot of value in creating transactions, but there's no way to transfer that value because it's tied to your identity. You own it, but you can't move it, you can't trade it, you can't rent it out. This is a technical problem that we're working on right now, and I've thought of some of the things that we can do and some of the ways that we can monetize it. So Soulbound tokens make identity and reputation meaningful and make decentralized governance more possible. Any application that's not financial in nature can benefit a lot from this.

We already have DeFi, and I think we might see DeGov. Optimism is a project that I’m personally very interested in because I think it pursues a concept that I personally care about very much - governance that is no longer based on tokens.

Like the popular DAOs today, the main governance method is based on voting based on tokens. If you have ten times more tokens, you can vote ten times more. I have written a lot about this topic. I think the current voting governance model actually has a lot of problems and limitations. Therefore, when they use governance tokens to vote, they also take a lot of risks while gaining benefits. If we are in this non-token-based, non-transferable citizen governance and bicameral governance model, we will have to talk to each other and negotiate with each other to make major changes. This is a long-term governance experiment. I think there will be considerable opportunities with the birth of more governance experiments and DAOs. We can see that many various DAOs, like VitaDAO, are doing research on longevity, which I think should be considered "scientific DAOs" - decentralized science. We can see that DAOs are constantly developing in various fields, and I am really happy to see that DAO governance is constantly developing towards privacy protection.

We already have apps like TornadoCash to keep funds private, but I think the non-financial applications that preserve privacy are more interesting. MACI is a privacy-preserving voting system that we've been developing for over two years, and we've made a lot of progress. Privacy-preserving reputation systems, UniRep Social, and actually a lot of developers are working on privacy-preserving applications based on zero-knowledge proofs, and these applications are making good progress. If people want to get involved in building today, I think it would be a good idea to build in these non-financial applications, or in application categories that can combine financial and non-financial attributes.

Many interesting things are happening in the Ethereum protocol, for example, the consensus layer of Ethereum has many exciting improvements. But it is also necessary to talk about the Ethereum ecosystem. My big idea about the Ethereum ecosystem is that I think the cryptocurrency circle, including the Ethereum community, is focusing too much on financial applications at this time, although financial applications are also important.

The Ethereum roadmap is stabilizing, and there is more and more consensus on the future direction. If you have been following the development of Ethereum, you will see that the changes in the Ethereum roadmap are getting smaller and smaller. Maybe two or three years ago, there would be a lot of changes in the roadmap. But in the past year, I think we have seen very little change. I think the current Ethereum is making progress in one direction, which is very good.

I think in the future, most of the work will be done at higher layers, so core improvements in Ethereum are very important, but in the application field, ecosystem, bottom or second layer protocol, Ethereum address login, privacy... these will become more important. I think we should see more good applications in the future, more focused on non-financial applications. I hope this will inspire developers who are working on these ideas. The Ethereum ecosystem is huge, and there are a lot of interesting things to learn about and study. Today there are more tools that allow people to do amazing things than ever before. I am excited about the things people can create in the future!

Speech: Vitalik Buterin

Compiled by: Dimension Tech