Now that ‘The Merge’ is behind us, Ethereum (ETH) is gearing up for its next major enhancement, better known as ‘The Surge.’ This strategic move hopes to solve the long-debated problem of soaring transaction fees.
Curious about Ethereum’s roadmap? Walk with us in this excerpt as we break down the blockchain’s upcoming plans to address gas fees, security, privacy, and centralization challenges.
Ethereum Roadmap Stages
- The Merge.
- The Surge.
- The Scourge.
- The Verge.
- The Purge.
- The Splurge.
How Will Ethereum Achieve Global Scale Levels?
Ethereum has been persistently working to bring open and permissionless experience to the numerous DApps built on it. These applications come from crypto exchanges to digital collectable shops, asset tokenization platforms and data platforms.
Buterin recently outlined three key technical steps that Ethereum must take to make a mark on a global scale.
Scaling Via Rollups
Ethereum’s game plan is to achieve a worldwide audience by using rollups, essentially Layer 2s (L2) chains built on the primary blockchain (L1). Simply put, these rollups handle transactions on the L2 chain, bundle them together, and then release the grouped transactions on the L1 chain.
This bundling process is important because users won’t have to pay gas fees for each transaction, making the system more efficient and cost-effective. Dealing with the high gas fees on Ethereum has been a real pain point for users, sometimes reaching up to $50 during peak times, acting as a major roadblock to Ethereum’s widespread acceptance.
Smart Contract Wallets
Typically, wallets are like the entrance gate to the crypto and Web3 space, but their clunky onboarding processes have held back wider adoption. Security concerns, such as wallet hacks and thefts, have also left users counting losses in thousands of pounds worth of crypto and NFTs.
Thankfully, Ethereum’s upcoming upgrades plan to bring in smart contract wallets to streamline onboarding and account recovery processes. This change will make transferring cryptocurrencies across different blockchain networks much more straightforward.
Privacy Transition
In the pursuit of progress, Ethereum remains committed to prioritizing user privacy. The roadmap includes upgrades geared towards ensuring “privacy-preserving funds transfers.” Buterin envisions a future where users transition from having one address per chain to one per transaction, although this is still a work in progress.
Recap: Successful Integration and Shanghai Enhancements
In 2022, Ethereum achieved a significant milestone by transitioning from proof-of-work (PoW) to proof-of-stake (PoS).
Let’s take a look at the accomplishments of “The Merge”:
- Multi-Phase Scaling Roadmap: The Merge initiated a multi-phase scaling roadmap for Ethereum, setting the stage for future developments.
- Enhanced Decentralization: It increased decentralization by reducing barriers to entry for transaction verifiers and block creators, fostering a more inclusive ecosystem.
- Crypto Economic Security: The protocol’s security was boosted by introducing penalties, such as slashing and reinforcing the crypto economic framework.
- Drastic Energy Consumption Reduction: The move to PoS resulted in a remarkable 99% reduction in energy consumption, aligning Ethereum with more sustainable practices.
- Circulating ETH Supply Adjustment: The introduction of staking reduced the circulating ETH supply, contributing to the overall dynamics of the cryptocurrency.
The Shanghai upgrade enabled the withdrawal of staked ETH from the blockchain, making staking less risky. Now, ETH tokens are not locked up and can be withdrawn at the user’s discretion, hence, greater flexibility and control.
EIP-4844: Proto-Danksharding
EIP-4844, affectionately dubbed proto-Danksharding, is set to bring about a fresh approach to Ethereum’s upcoming upgrade by providing rollups with a more cost-effective method of incorporating data into blocks.
While L2 rollups like Optimism and Arbitrum have made strides in reducing gas fees on the Ethereum network, it’s not uncommon to still encounter gas fees exceeding £0.7 ($1) per transaction. At the same time, developers are keen on pushing for Ethereum rollup gas fees to be as budget-friendly as possible for users.
Enter Proto-Danksharding. This upgrade will introduce temporary data blobs to each block, offering rollups a way to process transactions at a lower cost. As a reminder, rollups cleverly batch transactions off-chain before presenting them on Ethereum in a condensed form, cutting down on the gas fees associated with each transaction.
The Bottom Line
One key lesson from The Merge is that implementing Ethereum upgrades takes longer than initially anticipated. This results from meticulous testing and planning that developers undertake to ensure a smooth implementation, considering the significant financial stakes and the millions of users involved.
Looking ahead, the challenges persist, with many upgrades lacking a blueprint as they represent novelty. It’s not just about improving the protocol; fundamental changes in our interaction with Ethereum require deep adjustments from applications and wallets.
Despite the endless hurdles, the Ethereum community remains optimistic and confident, as seen in the seamless execution of The Merge in 2022. We eagerly await the day when Ethereum gas fees become competitive with traditional finance.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
