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Ethereum 2.0

Ethereum’s Path To Protocol Enshrinement: Balancing Complexity & Flexibility

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Vitalik Buterin, co-founder of Ethereum, has expressed his views on incorporating specific protocols into Ethereum’s code versus keeping them “on top” of the blockchain. In a recent blog post, he delved into the historical evolution of the network’s approach to protocol complexity and its implications.

Ethereum’s Evolving Protocol Approach

Initially, Ethereum aimed to maintain a simple core protocol, pushing most functionalities to user-created contracts on the blockchain. The ongoing debate between Layer 1 (L1) and Layer 2 (L2) solutions encompassed scalability and user requirements such as digital asset exchange, privacy, and security.

Ethereum 2.0 originally envisioned a protocol as a minimal virtual machine with flexibility for users to customize transaction validation logic, called account abstraction. However, this approach raised complexities, exemplified by EIP-86, which shifted complexity to miners’ logic. EIP-86 evolved into EIP-2938, introducing new complexities into the protocol.

To address these challenges and reduce protocol complexity, EIP-2938 transitioned into ERC-4337, an external Ethereum Request for Comment (ERC). Integrating ERC-4337 into the Ethereum protocol is being considered for several reasons:

ERC-4337 integration brings multiple benefits to the protocol, including improved gas efficiency, robust code bug mitigation, standardization of EVM OpCodes, and increased censorship resistance by enhancing user operation transparency.

Gas efficiency is crucial, as ERC-4337 transactions currently incur higher costs due to individual storage read/write and logic execution. Enshrining this functionality would provide universal access to shared libraries without fees.

Enshrining private mem pools, which keep transactions encrypted until inclusion in a block, aims to counter issues like frontrunning. Various encryption technologies, such as time-lock encryption and threshold encryption, have drawbacks, making in-protocol enshrinement challenging.

Liquid staking, another concern in the Ethereum community, addresses users’ desire to stake ETH for DeFi and collateral simultaneously. Liquid staking providers like Lido and Rocketpool offer solutions, but centralization risks persist.

The debate centers on whether to enshrine liquid staking functionality in the protocol. Various options, including limiting slashing penalties and adjusting node operator requirements, are under consideration.

Factors like complexity, costs, bug response, protocol powers, and censorship resistance are important when deciding to add features to a blockchain protocol. Balancing flexibility and enshrinement is crucial, as some features need protocol integration while others benefit from decentralization. 

However, the debate on feature enshrinement in blockchain protocols is multifaceted. Ethereum’s approach has evolved over time, emphasizing the importance of judicious enshrinement, flexibility, and adaptation to emerging needs and technologies.

Related Reading | FTX Hack Perpetrator Resurfaces With $4M Moves Amidst Ethereum ETF Excitement

Ethereum Merge: Google Hops On To The Trend With A ‘Surprise’ Doodle

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The Ethereum merge has raked up quite an attention and the latest to join the bandwagon is the world’s most widely used site Google. Search results with Ethereum display a count down timer, the difficulty, the hash rate, and a cartoon of two happy bears reaching out for an embrace.

The two bears likely represented the execution and the consensus layers and will move closer as the time approaches the merge date. The action reflects the growing interest in crypto among big businesses.

Google Cloud’s web3 engineer Sam Padilla who led the development of the merge integration into the search engine giant, first dropped the news in a tweet addressing Eth founder Vitalik Beuterin, and researcher Justin drake.

Hey Vitalik Buterin, drakefjustin & other ethereum folks, go google “the merge” for a fun little surprise & appreciation. Everyone is so excited about what is coming and appreciative of the work that has been going into this for years.

In response to Sassal, Padilla explained that he initiated the idea in a company-wide Web3 community talk and the “search and labs team internally” built out the search feature.

The developer also revealed the data is being pulled in real-time directly from Ethereum’s network using some of the nodes hosted by Google.

According to Padilla, the concept was developed by Google engineers just a few weeks ago who wanted to make “some amazing easter eggs” in preparation for Ethereum’s impending switch from proof-of-work to proof-of-stake.

At the time of writing, the Merge is expected to go live in exactly 2 days 20 hrs. 

Meanwhile, opportunistic crypto scammers are seeking to take advantage of the excitement around the event.

Scammers Exploit Ethereum Merge Hype

A recent Ethereum [ETH] giveaway hoax was promoted using the official Twitter account of KMFM, a radio station based in the South East England county of Kent. Vitalik Buterin was used as the imposter.

Several additional verified Twitter accounts have been hacked in the last week with a focus on the Ethereum community. In mid-august, Buterin issued a warning saying that Instagram has been flooded by scammers with fake profiles under his name and face.

Users are advised to exercise caution and avoid falling for traps as there would be no such giveaways or airdrops in conjunction with the upgrade.

Elon Musk, CEO of Tesla, complained earlier this month about Twitter bots pretending to be Changpeng Zhao, CEO of Binance, in order to deceive unsuspecting consumers.

Ethereum Merge: Countdown Begins As The Final Upgrade Bellatrix Is Activated

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Ethereum’s Bellatrix update which *prepares* the chain for the merge has gone live. Co-founder Vitalik Buterin took to Twitter to reveal the expected release date to be from September 13-15. Tim Beiko, ETH’s core developer earlier put the network’s complete transition on Sept 15.

“The actual transition happens upon hitting a specific Total Difficulty value of 58750000000000000000000 on the proof-of-work chain”, the tweet read.

The hard fork that will transform Ethereum (ETH) from a proof-of-work (PoW) base to a proof-of-stake (PoS) mechanism is known as Ethereum 2.0.

Before the final merge comes the Bellatrix update for ETH which went live today at around 5:00 IST or 11:34 UTC. Here the update will trigger the Epoch value [the time taken to complete a specific amount of blocks] to rise by 144,896 on the proof-of-stake chain.

According to the Ethereum Foundation, the time taken to mine 30,000 blocks is one epoch.

The Bellatrix hard fork is crucial for a smooth merge as it consolidates the PoS chain with the current execution layer and is the last step before the Paris Upgrade, which will occur after “the Merge” [current proof-of-work].

The Paris Upgrade will bring Ethereum Blockchain mining to an end and signal the switch from a PoW to a proof-of-stake validation mechanism.

The goal here is to increase the eth network’s speed from the current 20 transactions per second to 1,000–1,500 tps. Also, to boost scalability and effectiveness to execute more transactions concurrently.

Eth proponents believe this figure has the potential to reach 100,000 transactions per second if an external solution [roll-up] is used.

Additionally, the change would significantly cut down on energy usage.

The Bellatrix upgrade along with the Beacon Chain is joined with the Ethereum mainnet, and the consensus algorithm is completely changed from PoW to PoS.

What’s Next After Ethereum’s Merge?

The next stage is to introduce the layer 2 scaling solution zk-rollups which uses an Ethereum sidechain to consolidate and execute several transactions at once. This is to lift the burden away from the mainnet by processing data elsewhere.

The two most crucial processes here are merge and surge.

The final comes sharding that splits up a blockchain into smaller groups for specific purposes. Each blockchain can have its own shard, which can also be replicated on multiple nodes. As per the ETH foundation, the 2.0 model would come with 64 separate shards

Buterin says once the merge, surge, and sharding are over, Ethereum will be close to 80% complete.

Ethereum Merge Sent Jitters Among Investors

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The most ambitious Ethereum [ETH] upgrade, which will transform the mainnet from the proof-of-work [PoW] to the proof-of-stake [PoS] mechanism, has sent jitters among investors.

Seeking to assuage traders’ fears, experts say the merge will bring in greater scalability while moving towards an energy-efficient with enough security and decentralization. Tushar Gandotra, founder and CEO, FiEx, a cryptocurrency-based startup, stated,

“The upgrade would result in a shift from an energy-intensive approach towards a green and environment-friendly approach, with insurance that the future scalability of ETH will be able to handle more transactions at a lower carbon footprint.”

On the price front, experts believe the upgrade will leave an impact on ETH price, as ETH use cases are expected to fall until the transaction fee reaches a stable rotational value. According to Punit Agarwal, founder, KoinX, a cryptocurrency taxation platform

“Staking rewards can rise by 50% from where it currently stands which will be beneficial for long-term investors,”

Market analysts also advised that ETH-oriented digital wallets may be required to update their nodes so as to keep up with the changes related to the merge.

Ethereum Merge Braced For Its Own “Y2K Moment”

That said, there are many unknowns about the Ethereum merge, scheduled to take place on September 22 with some equating it to the infamous Y2K hysteria.

The year 2000 problem or most commonly known as the Y2K bug was a computer flaw or bug, that was thought to cause problems when dealing with dates beyond December 31, 1999.

Such is the effect that even Coinbase Global, the largest US crypto exchange, announced recently that it will pause withdrawals and deposits of all Ethereum-based tokens “as a precautionary measure”.

Richard Galvin of Digital Asset Capital Management sought to address concerns by saying that any major change like the ETH merge comes with its own risks, but should not be given too much attention.

“We have a lot of faith in the development community in Ethereum and the program they’ve gone through to test it, but it’s not 100 percent certain,” he said.“If it goes well, you’d expect the reduction in risk should lead to potential price increases.”

Here’s when Binance Will Conduct Wallet Maintenance For Ethereum

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Binance announced that it would carry out three-hour wallet maintenance for which deposits and withdrawals on the Ethereum Network [ERC20] would be temporarily paused at 6:25 a.m [UTC] on August 31st.

In the blog, the leading crypto exchange stated that the trading of tokens on the Ethereum Network will not be affected during the wallet maintenance. Binance assured to restore deposits and withdrawals after the maintenance is completed but won’t send out a separate notice to users for the same.

The crypto exchange has already backed the Ethereum Merge, slated to occur next month.

Last week, the trading platform sent out a statement suspending ETH and ERC-20 token deposits and withdrawals twice one for the Bellatrix upgrade, and the other for the Paris upgrade.

Both of these events are scheduled to happen at about 11 a.m. UTC on Sept. 6 and at 12 a.m. UTC on Sept. 15 respectively.

Binance had also earlier provided notice regarding the Merge. The exchange outlined a few steps it would undertake to mitigate any risks that the upgrade may bring. The firm listed a series of actions it would perform when the transition eventually occurs.

In the event of different chain formation, Binance revealed it would use the ”ETH” ticker for the PoS chain. On top of that, the exchange will credit users’ accounts with the forked token at a 1:1 ratio. The snapshot taken before the Paris execution layer will determine the distribution, it added.

Binance Signs MoU With South Korea Busan City

In a separate development, the world’s biggest crypto exchange revealed that it has signed a Memorandum of Understanding [MOU] with Busan Metropolitan City, located on the southeastern tip of the Korean peninsula, which is the second largest city in South Korea with a population of roughly 3.4 million.

Speaking on the deal, Binance CEO a.k.a Changpeng Zhao [CZ] said, “We are happy to be working with the city of Busan to bring tangible blockchain-related developments that benefit and support the city’s innovation efforts.” He also stated,

“Through our industry-leading position and technological expertise, combined with the city of Busan’s strong support for the blockchain industry, we hope to help grow crypto adoption within the city and beyond.”

Ethereum’s Development Activity Ranks At The Top With 401 Projects

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Ethereum is at the top position among the projects with the most development activity in the last 30 days. With a total of 401, ETH rules the roost followed closely by open-source blockchain platform Polkadot [DOT] and Kusama [KSM] occupying the second and third, respectively, each recording 400 development activities.

Coming in the fourth place is Cardano [ADA] with 389 projects, while Status finishes off the top five spot at 324. 

The network’s development activity coincides with the highly-awaited Merge upgrade that will transition the network to the Proof-of-Stake [PoS] protocol. This would certainly act as an impetus for the growth of several projects on the platform looking to invest in the new version of the blockchain. 

It is also believed that the number of projects might also increase during the post-Merge period since the network is deemed to be in much better shape compared to its earlier version. 

As reported by TronWeekly, Ethereum 2.0 client, Teku released the version 22.8.1 update, which consists of a Merge configuration and an upgrade to the Bellatrix network. This is undertaken to prepare for the upcoming merge on September 15.

According to the document published by the client, all mainnet users must complete the update before September 6.

The update is pivotal for Teku as well as the execution client. Without it, Teku will display a message either “Execution Client is offline” or “Merge transition configuration issue.”

Ethereum PoW Receives A Crucial Update

As stated on the official Github page of Ethereum PoW, the project received the second code update, with EIP-155 being enforced. The main update is carried out in the Chain ID, which would come with a compulsory signature for all the transactions on the network.

This would add a layer of extra protection to the PoW version of the second biggest cryptocurrency on the market as it would protect the asset from a replay attack of other forks.

A replay attack is a form of network attack where a bad actor maliciously or fraudulently repeats or delays transactions on many blockchains by intercepting a secure network communication.

Ethereum Clients Release Updates In Preparation For The Merge

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Ethereum 2.0 clients Teku and Geth released the required update v22.8.1 for all Mainnet users laying the groundwork for the Merge. The update includes the Bellatrix upgrade and Merge transition configuration. All Ethereum Mainnet users are required to upgrade before September 6, the date of Bellatrix activation on Mainnet.

Sharing via a tweet on August 22 Teku and Go Ethereum [Geth] announced the release of v22.8. and Geth v1.10.22 [Promavess], respectively.

As per Geth’s GitHub, the update allows Eth mainnet merge at a Terminal Total Difficulty 58750000000000000000000 scheduled for September 15.

According to the information available, it would require an average of 872.2 TH/s to achieve the final TTD. The current hash rate is around that range with a total difficulty of 56938771076282196928114.

In addition to that, “the Merge will require both an execution client [Geth] and a consensus client.”

“Both Teku and your execution client will need to be updated to prepare for the merge. If the execution client fails to update it will regularly report an error like:”

*** Transition Configuration error:

For those new, The Merge is a protocol upgrade to the Ethereum blockchain, which transition from “proof of work” [PoW] to “proof of stake” [PoS]. In this way, Ethereum is essentially modifying the way it processes transactions on its blockchain.

“Ethereum Merge will reduce energy consumption by nearly 10,000%”

As previously stated by Eth developers, the new system will boost the network’s security, making it almost impossible to attack the network. Besides that, they claimed it will also be more energy-efficient, reducing energy consumption by roughly 10,000%.

It’s been dubbed as “the Merge” as the upgrade involves combining the Eth Mainnet with the new PoS chain, also known as the Beacon chain.

Since December 2020, the Beacon Chain has been running and the Ethereum community has been using this particular chain to carry out tests, get rid of bugs, and gather enough validator nodes to run the network. 

The Merge will take place when the last block of data is created on the old PoW blockchain. The very next block will be produced on the new Beacon Chain. So from a user’s point of view, nothing will change.

Ethereum Merge: Talk of the town

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The Ethereum merge is the only topic being discussed right now in the crypto sphere. A hotly debated subject has been the network-wide update that will turn Ethereum into a proof-of-stake (PoS) network. Given the numerous setbacks it has previously had, some people are still optimistic about its appearance in September, while a small number of others are more pessimistic. But Tim Beiko from the Ethereum network gave the community new hope with his tweet.

Beiko shared a link titled “The Merge Mainnet Readiness Checklist” earlier today. The fact that almost everything on the list had been completed demonstrated that the Merge was proceeding as planned in September.

Source: Twitter

Stress tests, which included single client load/metrics and network load testing, under which bigger blocks and shorter slot periods were included, were the only remaining items. Additionally, post-merge resource depletion and threat analysis had not yet been done.

Several platforms continued to support Ethereum’s major change in the midst of this. Aave only advised its members to continue supporting Ethereum’s PoS chain yesterday. Yuga Labs said earlier today that everything was prepared for the forthcoming Merge. However, the company also stated that, in the event of a hard fork, it will only accept NFTs on the PoS chain.

Source: Twitter

Ethereum merge might lose support if watchdogs get invested

Following the Merge, there have been numerous speculative claims on how Ethereum might come under the control of authorities, and several members of the community have expressed alarm about these claims. Brian Armstrong, the CEO of Coinbase, said that the company might stop offering its Ethereum staking services in light of the current circumstances.

Source: Twitter

Coinbase later opened its doors for ETH staking earlier this month.

Although there appear to be alternatives, Armstrong hopes that such a situation won’t arise.

However, ETH seemed to be taking a hit in the market with respect to price. At the time of press, ETH was priced at $1845.32 with a hike of 0.12% over the last 24 hours.

Justin Sun’s Poloniex Exchange Lists Ethereum Forked Tokens

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Justin Sun-backed Poloniex Exchange has finally listed Ethereum forked tokens. As per the official announcement the exchange published the listing of ETHS/USDT, ETHW/USDT, ETHS/USDD, and ETH/USDD trading pairs.

Among these tokens, ETHS stands for proof-of-stake-based tokens, while ETHW represents for proof-of-work-based tokens. At present, all ETHS and ETHW transactions have no transaction fees.

In an earlier blog post, the trading platform decided to extend support for these two tokens to mitigate the risk “from market volatility during the hard fork” as well as secure users’ assets.

The blog further stated that ETH holders can swap their tokens with the two potential forked tokens on Poloniex before Ethereum 2.0 upgrade at a 1:1 ratio or vice versa.

The much awaited “merge” refers to the network’s transition to proof of stake which would essentially discontinue ETH mining, upsetting well-known miners like Chandler Guo.

As a result, Guo and his ilk are attempting to launch ETHW in order to allow GPU miners to continue to mine a form of Ethereum.  

If the merge, which is slated to occur on September, goes off smoothly, then Poloniex will automatically convert all ETHS into upgraded, post-merge ETH. And, if during that time, Guo and his followers fail to fork the Ethereum network, Poloniex will suspend and delist ETHW and its related markets, in accordance to the blog post.

Buterin Takes A Jibe At Justin Sun

TRON founder Justin Sun’s latest endorsement also correlates to his tumultuous relationship with Ethereum and the network’s co-founder, Vitalik Buterin who take a dig at Sun occasionally.

During South Korea Blockchain event, Ethereum founder, Buterin, without directly referring Justin Sun slammed those trying to push for a hard fork of ETH to retain proof-of-work as “simply trying to make a quick buck.”

Vitalik stated that he has received many support for proof-of-stake from within the community and claimed that most people who intends to keep proof-of-work are “outsiders.”

On the other hand, Chainlink protocol decided to not entertain the forked versions of the Ethereum blockchain and recommended developers and dApp teams to paused smart contract operations to avoid unforeseen incidents and help protect end users.

Ethereum Investor’s Sentiment Plunges Despite Merge Hype – Report

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Ethereum’s upcoming transition to a proof-of-stake [PoS] system which is scheduled for Sept. 19, has been the talk of the town, causing both hype and FOMO over the last week.

And to top that, ETH co-founder Vitalik Buterin recently laid out the next steps in the roadmap for the network with monikers Surge, Verge, Purge, and Splurge.

But as per a data analytics platform Santiment, the hype has so far failed to put any positive impact on the investors’ outlook.

The study highlighted that the asset is trading in severe negative sentiment territory as traders braced for a price drop in the upcoming Federal Reserve’s Federal Open Market Committee [FOMC].

The Fed’s meeting is slated to be on 26th and 27 July this week and is expected to raise interest rates by another 75 basis points, following in the footsteps of June’s rate hike.

The report also pointed out that any price rally of the coin would be short-lived and volatility would persist for some time.

“ETH had an up and down Sunday, jumping above $1,640 before dipping back down to $1,540. The trading crowd continues to not believe the hype and is expecting prices to fall heading into the FOMC meeting. ETH should continue to stay volatile.”

Ethereum Held On Exchanges Hit A 4-Year Low

In a separate study by Glassnode, Ethereum held on exchanges hit a four-year low after record staking figures on Ethereum 2.0 [the network’s incoming upgrade, recently rebranded to “Consensus Layer”].

Glassnode also found that centralized exchanges [CEX] currently hold over 19 million ETHs. The latest data is a little over 20 million back in July 2018, Glassnode suggested.

The sharp decline in Ethereum held across exchanges is likely due to the increasing number of Eth staked as the network prepares for its biggest upgrade yet.

Chainalysis, a blockchain data tracking platform, also reported similar findings: “The change in ETH held on exchanges experienced the largest one-day decrease in 202 days, decreasing by 432.84k ETH to 249.58k ETH.”

In contrast to the current network, Eth 2.0 is a proof-of-stake [PoS] network where validators stake 32 Eth to verify the network’s integrity.