The Eth2 launch process began in November 2020. The network’s switch to proof-of-stake is expected to make ETH a deflationary asset.
Ethereum co-founder Vitalik Buterin has outlined his vision for a “plausible roadmap” for Eth2, presenting a future where the largest smart-contract platform can increase its scalability while meeting high standards for trustlessness and censorship resistance.
In a Monday post titled “Endgame,” Buterin presented a thought experiment for how the average big blockchain — defined by very high block frequency, high block size and thousands of transactions per second — can still be considered sufficiently trustless and censorship-resistant. The obvious trade-off for this level of scalability is the centralization of block production. Buterin’s solutions, as presented in the blog post, do not address the centralization issue, but still provide a roadmap for implementation.
With respect to the solutions, Buterin suggested “a second tier of staking, with low resource requirements,” to carry out distributed block validation; “introduce either fraud-proof or ZK-SNARKS to let users directly (and cheaply) check block validity” directly; and “introduce data availability sampling to let users check block availability [and] add secondary transaction channels to prevent censorship.”
With these updates, “We get a chain where block production is still centralized, but block validation is trustless and highly decentralized, and specialized anti-censorship magic prevents the block producers from censoring,” Buterin explained.
Buterin said block production would remain centralized even with the implementation of so-called “rollups,” which are layer-two solutions that execute transactions outside of the main Ethereum chain. (Interestingly, Buterin presented a rollup-centric roadmap for Ethereum in October 2020).
“No single rollup succeeds at holding anywhere close to the majority of Ethereum activity. Instead, they all top out at a few hundred transactions per second,” he said. While it may appear that rollups could contribute to distributed block production, decentralization may not last because of the possibility of cross-domain maximal extractable revenue, or MEV. As the name implies MEV refers to the maximum amount of value that can be earned from block production in excess of standard block rewards and gas fees.
The Ethereum co-founder concluded that there’s a high probability that block production will end up centralized regardless of the path to scalability that the network takes. The benefit of Ethereum’s rollup-centric roadmap is that it’s open to all futures, he said.
Excitement surrounding Ethereum has been building since November 2020 when the protocol first embarked on its long transition to proof-of-stake. The highly anticipated London hard fork, which puts ETH on track to become a deflationary asset, was implemented in August of this year. The hard fork introduced EIP-1559, which aims to reform the network’s fee market. Over 1 million ETH has already been burned since the EIP-1559 came into effect.