Full text of the conversation with the Ethereum Foundation: Will 1559 be postponed? When will POW end? Are you worried about sidechain competition?

Wu said author | Colin Wu

Editor of this issue | Colin Wu

Wu said that unencrypted conversation is our new column. We found professionals who have tens of thousands of hours of experience in a specific field, and they are willing to condense their experience into 1 hour of practical information to tell everyone.

AMA time: July 23, morning, Beijing time

The two guests this time are from the Ethereum Foundation, they are: Tim Beiko: Coordinator of the AllCoreDevs conference call; Hsiao Wei: Ethereum researcher.

We know that both Ethereum investors and miners are very concerned about the future upgrade of Ethereum. In my latest survey, 55% of more than 4,000 readers on the Chinese social media Weibo prefer Ethereum to Bitcoin. From the very early days, Chinese investors and industries have been important supporters of Ethereum.

Since last year, Ethereum’s DeFi ecosystem has flourished, but it has also faced challenges from insufficient performance and side chains. I believe everyone has many questions.

1: Congratulations on the London upgrade being completed soon. Can you briefly introduce the significance of this upgrade to the development of Ethereum? Yesterday there was a joke about the delay of 1559, so will it really be delayed this time?

Tim Beiko: London will bring some major changes to Ethereum. The most anticipated is EIP-1559, which provides a better user experience and economy for the Ethereum network. Other interesting changes are EIP-3529, which will improve the way smart contracts handle gas refunds, and EIP-3541, which reserves some specific instructions in the EVM to add more features in future upgrades.

Jokes aside, the only reason we might have delayed London is because of security. We found a bug yesterday and fixed it today. We will discuss the best ways to secure the Ethereum network on tomorrow’s AllCoreDevs call.

2. We all know that the London upgrade will have a certain impact on Ethereum miners. Could you please give us a detailed introduction? It was previously said that EIP-1559 would reduce miners' income by 10-30%. Is this calculation accurate? Will it drive miners to invest more in MEV?

Tim Beiko: It is true that EIP-1559 cuts some of the transaction fee income of miners, but not all. In each block, a baseFeePerGas is specified, which is the minimum effective Gas Price you need to pay in the transaction. The baseFeePerGas, multiplied by the amount of gas used in the transaction, is the base fee of the transaction, which will be destroyed.

However, transactions also specify a priority fee (priorityFee), which goes to the miner. This fee is like a "tip" that compensates the miner for the risk of mining an uncle block (uncle blocks are not included in the main chain). Empty blocks propagate faster on the network than full blocks, so they are less "risky". The priorityFee is a fee paid to the miner for this risk.

MEV is usually paid by users who have a strong demand for transaction priority, not just to have their transactions included in the current block, but to be included as the first transaction in the current block. Because there are valuable arbitrage opportunities (such as front-running on decentralized exchanges), people are willing to pay miners a lot of fees to get the first position in the block. We have seen growth in this area: about 60% of blocks now have MEV transactions, compared to close to 0% at the beginning of the year.

So 1559 will not directly affect this, but since it reduces miner income slightly, some miners are looking for other sources of income.

We don’t know yet how much miner revenue will fall. The best analysis is here: https://insights.deribit.com/market-research/establishing-bounds-for-miner-revenue-in-eip-1559/

3. After the London upgrade, the existing Gas Token solution will become invalid. Does the developer community currently have any alternative options?

Tim Beiko: Yes, EIP-3529 in the London upgrade will invalidate the Gas Token solution. Gas Tokens are bad for the network because they fill the network with "junk data" when gas prices are low and create large blocks when gas prices are high. This leads to network instability, so it was decided to remove it in London. As far as I know, there is no alternative solution yet.

4: Is there a timetable for the merger of ETH 1.0 and 2.0? When will Phase 1 of ETH 2.0 start? It was previously said that POW will be stopped as early as the end of this year. Is there a new timetable at present?

Hsiao Wei: Timeline for Eth1<>Eth2 merger and PoW cessation, you can check out Trent’s great chart to get a rough idea of ​​the timeline:

https://twitter.com/trent_vanepps/status/1415741658067517441

This year, developers have been working on some proof of concept merge prototypes in the Eth1/Eth2 implementations. The good news is that, thanks to Mikhail and his colleagues, it entered the EIP process yesterday: https://github.com/ethereum/EIPs/pull/3675

IMHO, a merge in early 2022 is more feasible to have confidence that the required testing will be completed in time. Security is always the first priority and we are definitely not rushing it. Regardless, this is indeed happening and soon, we will see a pure PoS Ethereum. If you are considering buying Ethash hardware today, please consider the time frame when calculating the price/performance ratio.

(Someone asked, when the transition to 2.0 is in 2022, should the PoW mining mechanism still coexist with PoS for a period of time? Tim Beiko replied: The coexistence may continue until the merger, but there will be no PoW after the merger)

> When does the first phase of ETH 2.0 begin?

To be clear, Phase 1 means data sharding Ethereum. Sharding R&D is proceeding in parallel with other topics (merging, light clients, etc.). I think we will define the scope of basic sharding functionality and advanced sharding patches (e.g. proof of custody, data availability sampling) this year so that the timeframe is clearer.

5. What are the current concerns or biggest challenges that developers face regarding the PoS transition?

Hsiao Wei: I think generally speaking, as with all planned Ethereum upgrades, our concerns can be categorized as:

- Security: all possible edge cases, attack models during and after the transition

- Simplification: How to simplify the current specification

- UX: How to integrate Eth1 and Eth2 software well

- Communication: governance and user education

6: Are developers worried about challenges from side chains such as BSC and Polygon?

Tim Beiko: As someone involved in Ethereum core development, we try to focus on our core strengths and not be distracted by fears of "competition". Developers and users are free to build/use whatever they like. We will continue to develop Ethereum to make it more powerful and secure for the projects/users it has. The cryptocurrency market can be full of uncertainty, so we don't usually think about trying to build expectations for other L1s. Personally, I look forward to Layer 2 protocols providing Ethereum users with more secure and trustless features, such as sidechains or other L1s.

7: The market now believes that the market seems to be turning from bull to bear. What impact will the changes in the market have on the important upgrade of Ethereum in the next six months to a year?

Tim Beiko: I think this won’t change much for Ethereum. Researchers and developers have been building for years and will continue to build more. As @hwwang said, we will focus on security, ensure extensive testing of protocol changes before going live, and continue to work on improving Ethereum.

8. After EIP-1559, some miners shut down their machines. Will this cause security issues?

Tim Beiko: The cost of paying for the security of the Ethereum network is the block reward, not the transaction fee. Because transaction fees fluctuate, it is very dangerous to rely on them to provide security. We hope that the network can achieve security with only 2 ETH block rewards and miners without transaction fees. If you look at the history of Ethereum, there have been several times when transaction fees were close to 0, and we hope that Ethereum will still be secure in these cases.