The upgrade in Cancun is approaching, reviewing the key milestones in Ethereum's history
This article will review and outline the important hard forks and upgrades in the history of Ethereum, as well as introduce the changes that the Cancun upgrade may bring.Author: veDAO Research Institute
Until today, blockchain technology can still be considered an emerging technology. Although the fundamental concepts related to blockchain (cryptography, decentralization, peer-to-peer networks, and transactions) have been studied for decades, it wasn't until the birth of Bitcoin in 2008 that people believed these concepts could indeed be combined to create usable products. Especially with Ethereum, it only appeared in a public and usable form in 2015. Despite changes in the expected timeline and specific details, Ethereum has consistently advanced according to plan, continuously upgrading its protocol to ensure improvements in usability, security, functionality, and decentralization.
This year, Ethereum is set to undergo two significant upgrades as planned: the Shanghai upgrade, which was completed on April 12, and the Cancun upgrade, expected in the fourth quarter. According to Ethereum's official documentation, since the release of the white paper in 2013, there have been 24 milestone events, most of which are fork upgrades, with 12 being relatively significant upgrades. This article will review and outline the important hard forks and upgrades in Ethereum's history and introduce the changes that the Cancun upgrade may bring.
Frontier Upgrade - July 30, 2015
July 30, 2015, marks the date of the generation of Ethereum's genesis block and the start of the first phase of Ethereum. The launch of Frontier signifies the official start of the Ethereum blockchain network. This phase primarily targets blockchain developers, with node participants engaging in mining, and it supports the uploading of smart contracts.
The Frontier protocol includes the following key features:
Block rewards: When miners successfully mine a block on the Ethereum blockchain, they receive rewards in ETH. During the Frontier phase, the block reward for miners is 5 ETH per block.
Gas: In the early days after the Frontier release, the Gas limit for each block was hardcoded to 5000 gas. This essentially meant that there wouldn't be much activity on the network. This left a buffer period for miners to start working on Ethereum and for early users to install clients. A few days later, this Gas limit was automatically lifted, allowing the network to begin processing transactions and smart contracts as planned.
Canary contracts: These contracts inform users which chains have been attacked or are vulnerable to attacks. Canary contracts are assigned a value of 0 or 1. If a contract is assigned a value of 1, the client can recognize that this is a faulty chain and avoid mining on this invalid chain. Essentially, these functions of the Canary contracts allow the core Ethereum development team to pause the network's operation when issues arise. In the early stages of Ethereum, Canary contracts were an extremely centralized yet indispensable protective mechanism.
Usability: All operations by developers were executed via the command line, as there was no graphical user interface. The entire network was available, but the user interface was very rough, and only those familiar with Ethereum and possessing operational experience could use it.
In the Frontier version, each block's Gas limit was hardcoded to 5000 Gas, which was lifted in the Frontier thawing upgrade two months later, setting the default Gas price to 50 gwei. The difficulty bomb was introduced in this upgrade to provide a mechanism for the network to transition from PoW to PoS. When the hash rate becomes too high, making it impossible for miners to mine any blocks, it will be the best time for the network to switch to PoS. It can be said that there were already plans to transition to PoS in the initial stages of Ethereum.
From this point, Ethereum officially entered the quasi-usable PoW mining era, with the price of Ethereum at $1.24 each.
Homestead Upgrade - March 14, 2016
The Homestead upgrade is the second major version released by Ethereum, marking the first hard fork and the beginning of the second phase of the roadmap. The most important feature of this version is the optimization of smart contracts and the introduction of a new code for the smart contract language Solidity. Additionally, the desktop wallet Mist was released in this version, allowing users to hold/trade ETH and write/deploy smart contracts. The Mist project was later announced to be terminated in early 2019.
The Homestead upgrade is one of the earliest implemented Ethereum Improvement Proposals (EIPs), containing three EIPs: 2, 7, and 8. EIP-2: Increases the cost of creating smart contracts via transactions from 21,000 Gas to 53,000 Gas. Previously, the cost of creating contracts through contracts (the recommended method) was higher than that of creating contracts via transactions. With the increase in gas costs for creating contracts through transactions, EIP-2 incentivizes users to re-adopt the method of creating contracts through contracts.
EIP-7: Introduces a new function, DELEGATECALL, to facilitate code reuse. This opcode is similar to CALLCODE, but it sends the sender and value from the parent scope to the child scope, meaning that the created call has the same sender and value as the original call.
EIP-8: A forward-looking network upgrade proposal that improves the network protocol devp2p for backward compatibility. This improvement ensures that all client software on the Ethereum network can adapt to future network protocol upgrades.
At this time, the price of Ethereum was $12.5 each.
DAO Fork - July 20, 2016
In addition to the planned Ethereum upgrades and hard forks, there was an unplanned fork event worth remembering. In 2016, a decentralized autonomous organization project called The DAO raised $150 million through token issuance. In June, The DAO's contract was exploited by hackers, resulting in the theft of tens of millions of dollars worth of ETH by unknown hackers. Most participants in the Ethereum community decided to implement a hard fork to restore the stolen ETH in wallets and patch the vulnerabilities. However, the hard fork did not receive unanimous approval from all participants in the community, and some continued to mine and trade on the original chain. The original chain, where the stolen ETH was not restored, is known as Ethereum Classic (ETC). Thus, Ethereum diverged into ETH and ETC, which is why there are two networks for Ethereum.
At this time, the price of Ethereum was $12.54 each.
Metropolis: Byzantium Upgrade - October 16, 2017
By this time, Ethereum had experienced two significant milestone upgrades: Frontier and Homestead. The next step, according to plan, was the Metropolis upgrade, which was divided into two phases due to its extensive content: Byzantium and Constantinople.
This hard fork included 9 improvement proposals (EIPs 100, 658, 649, 140, 196, 197, 198, 211, 214). In addition to updates related to opcodes and smart contracts, the "difficulty bomb" was postponed for a year and a half, and the block reward was reduced from 5 ETH to 3 ETH. Before the removal of the difficulty bomb, the block generation time was close to 30 seconds. The ability to make non-state-changing calls to other contracts was added; some cryptographic methods were introduced to allow for Layer 2 scaling solutions based on SNARKs and STARKs.
At this time, the price of Ethereum was $334.32 each.
Metropolis: Constantinople Upgrade - February 28, 2019
The second phase of the Metropolis upgrade, Constantinople, was originally scheduled to go live in mid-January 2019 at block height 7,080,000. On January 15, an independent security auditing company called ChainSecurity released a report indicating that one of the five major system upgrades would give attackers an opportunity to steal funds. In response to the issues raised in the report, Ethereum core developers and other members of the community voted to postpone the upgrade until the security issue was resolved.
Ultimately, the Ethereum Foundation decided to carry out the final step of "Metropolis," the hard fork named "Constantinople," on February 28, 2019, which included 6 improvements: ensuring that the blockchain would not freeze before implementing the PoS working mechanism; optimizing the Gas cost issues in the Ethereum Virtual Machine; and adding interactivity for address creation. Interestingly, there was also a hard fork called "Petersburg" that occurred simultaneously in this upgrade, which removed a previous improvement proposal (EIP-1283) from Constantinople. In this set of 5 major updates, in addition to technical adjustments, the difficulty bomb was postponed for another 12 months, and the block reward was reduced from 3 ETH to 2 ETH.
Additionally, a new instruction called CREATE2 was introduced in EIP-1014, which allows for the pre-calculation of contract addresses before contracts are officially deployed, thereby bringing the concept of state channels similar to Bitcoin's Lightning Network into Ethereum, allowing for off-chain calculations before deploying the corresponding contracts on-chain for settlement.
At this time, the price of Ethereum was $136.29 each.
Istanbul Upgrade - December 8, 2019
The Ethereum 2.0 plan is set to launch its first phase (phase 0) in 2020. Before 2.0 is fully online, most users and developers may primarily use Ethereum 1.X, so subsequent updates to 1.X are also very important. The Istanbul hard fork was activated on December 8 and included 6 improvements: continuing to optimize Gas cost issues in the Ethereum Virtual Machine; improving resilience against distributed denial-of-service attacks; enhancing the performance of Layer 2 scaling solutions based on SNARKs and STARKs; achieving interoperability between Ethereum and Zcash; and allowing Ethereum smart contracts to introduce more creative features.
Vitalik Buterin stated that after this upgrade, the ordinary transactions per second (TPS) would increase by about 5% to 10%, while for Layer 2 technology Rollup, it could increase by about 4 times. At this time, the price of Ethereum was $151.06 each.
Muir Glacier Upgrade - January 2, 2020
Less than a month after completing the Istanbul upgrade, Ethereum urgently conducted another upgrade. It is very rare to have two hard forks within a month, as users and developers continuously discovered a slight increase in the block generation interval of Ethereum, which would lead to a decrease in the TPS of the Ethereum network. Ethereum developers discussed and proposed a hard fork codenamed "Muir Glacier" at block height 9,200,000 to remove the difficulty bomb, expected to occur around December 31, 2019. According to data from developers in the discussion group, Ethereum's block generation time was expected to continue increasing before the removal of the difficulty bomb, potentially reaching 25 to 30 seconds around January 6.
At this time, the price of Ethereum was $127.18 each.
Berlin Upgrade - April 15, 2021
Starting from this version, the upgrade codenames will follow the order of the Ethereum developer conference Devcon, with the first Devcon 0 held in Berlin. Ethereum had planned many improvements for the Istanbul upgrade, but due to various reasons, some proposals that could not be included in Istanbul were moved to Berlin. This upgrade optimized the Gas cost issues in the Ethereum Virtual Machine and increased support for multiple transaction types.
At this time, the price of Ethereum was $2454 each.
London Upgrade - August 5, 2021
This upgrade involved five proposals: EIP-1559, EIP-3198, EIP-3529, EIP-3541, and EIP-3554. One of the most impactful EIPs on Ethereum is EIP-1559, which aims to change the existing Ethereum fee structure by splitting transaction fees into a base fee and a miner fee, and by burning part of the base fee to reduce the circulating supply of ETH.
It directly alters Ethereum's economic model. Previously, block packaging was an auction mechanism where the highest Gas price received all fees, but EIP-1559 divides the Gas fee into two parts: one part goes to miners, and the other part is burned, thus ushering Ethereum into a deflationary era.
At this time, the price of Ethereum was $2621 each.
Paris Upgrade (The Merge) - September 15, 2022
This upgrade (the Merge) directly modifies the execution layer and consensus layer of Ethereum, marking a significant transition of the Ethereum mainnet from a PoW consensus mechanism to a PoS consensus mechanism. This upgrade brought some rule changes to the Ethereum network, specifically:
Changes in validator nodes: The original miner nodes will be replaced by validator nodes. Validator nodes need to hold 32 ETH as a deposit and run the corresponding software to participate in network validation and block packaging.
Changes in block rewards: The original block rewards will be eliminated, replaced by earnings from transaction fees.
Changes in transaction fee mechanisms: In the new version, transaction fees will be paid directly to validator nodes instead of the Ethereum Foundation.
Improvements in dynamic fee mechanisms: The new version introduces a feature called "EIP-1559," which can dynamically adjust fee prices, allowing users to complete transactions faster and reduce excessively high fees.
Optimization of state storage methods: The new version adopts a technology called "Rollups," which stores large amounts of data on side chains and aggregates it to the main chain, thereby reducing the burden on the main chain and improving the overall system's efficiency and scalability.
Improvements in contract execution methods: The new version introduces a virtual machine called "EVM 384," which can enhance contract execution efficiency and security.
Overall, the Paris upgrade significantly enhances the scalability and efficiency of the Ethereum network through improvements in consensus mechanisms, optimization of transaction fee mechanisms, enhancements in state storage methods, and improvements in contract execution efficiency.
At this time, the price of Ethereum was $1472 each.
Shanghai Upgrade - April 12, 2023
The Shanghai upgrade will be the first major upgrade of the Ethereum network after the Merge and an important milestone on Ethereum's roadmap. The main changes brought by this upgrade are three points:
The Shanghai upgrade unlocks the staking withdrawal feature of Ethereum. This not only helps maintain the vitality of the Ethereum network but also supports the sustainable development of Ethereum in the future, continuing to attract more validators into the Ethereum network.
It reduces the Gas fees for Layer-2 solutions running on the Ethereum blockchain, making Ethereum faster and cheaper to some extent. The Shanghai upgrade will further optimize the Gas fees for transactions on Ethereum.
As the largest blockchain network supporting smart contracts, the Shanghai upgrade will maintain Ethereum's leading position in this field by introducing EOF (EVM Object Format).
At this time, the price of Ethereum was $1917 each.
Cancun Upgrade - Fourth Quarter 2023 (Expected)
The Cancun upgrade is an additional upgrade to the ETH blockchain following the Shanghai upgrade, featuring EIP-4844 and possibly EIP-6969, primarily aimed at achieving cost reduction and speed improvement for Ethereum Layer 2: it is expected to increase the speed of Ethereum Layer 2 by 10 times, and even potentially 100 times at lower costs.
The fees for Ethereum Layer 1 have remained high, urgently requiring necessary improvements to reduce overall operational costs. Currently, the scaling solutions on Ethereum mainly consist of Layer 2 Rollups. Rollups have indeed helped users save a lot on Gas Fees; for example, the representative project Optimism has a regular Gas Fee expense of only 0.001 gwei, far lower than the regular expenses on Ethereum's Layer 1 mainnet. ZK Rollups solutions have better data compression performance and do not require signature data, resulting in lower fees, potentially even down to one percent of the Layer 1 mainnet's costs. However, for a broader user base, even with Rollups solutions, Gas Fees remain a relatively expensive burden. Additionally, Ethereum's efficiency in processing parallel transactions is still low, with a maximum capacity of only double-digit transaction volumes per second, all of which require new improvement solutions to help enhance scalability.
Sharding is a powerful improvement method to address the above issues, but the current Ethereum cannot implement it. The timely proposal of the improvement plan EIP-4844 has found a compromise that can be applied to the current stage of Ethereum between addressing the above needs and implementing sharding upgrades, laying the technical foundation for Ethereum's future realization of overall data sharding. Therefore, EIP-4844 is also known as "Proto-danksharding."
EIP-4844 introduces a new transaction type to Ethereum, allowing data to be stored in a space called Blob at a lower cost, enabling data previously stored in Layer 1 for Layer 2 to exist in Blob, significantly reducing Layer 2 costs.
In addition to the highly anticipated EIP-4844, the Cancun upgrade has also confirmed the implementation of the following improvement proposals:
EIP-1153: Adds transient storage opcodes. Transient storage is specifically designed to solve internal communication within blocks.
EIP-6780: Modifies the functionality of the SELFDESTRUCT opcode to prepare for the future Ethereum application Verkle Tree architecture.
In addition to ETH itself, there are also some projects worth laying out under the Cancun upgrade:
Layer 2
The biggest beneficiaries of the Cancun upgrade are undoubtedly Layer 2 solutions. With sufficient first-mover advantage, leading Layer 2 projects like Arbitrum and Optimism are worth paying attention to. Additionally, leading applications in the Arbitrum ecosystem, such as GMX, RDNT, and Magic, will also rise with the explosion of Layer 2. Furthermore, projects like Metis, built and improved based on Optimistic Rollup, and Boba Network, which mimics Optimism, are also expected to benefit from the Cancun upgrade.
ZK-Rollups
As a solution considered more advanced in the industry, zkRollup is also expected to shine with the Cancun upgrade. zkSync, StarkNet, and Scroll are the three most well-known projects in this field; these three projects have not yet issued tokens, but their potential should not be underestimated.
zkSync is a scaling solution based on the ZK-Rollup architecture developed by Matter Labs. It mainly targets a payment-oriented mainnet 1.0 and a fully EVM-compatible general-purpose 2.0 testnet. Recently, zkSync upgraded its 2.0 entrance to support using any token to pay network fees, greatly enhancing user flexibility.
Starknet is a decentralized Validity-Rollup that runs as Layer 2 on Ethereum, allowing any application to scale massively without affecting Ethereum's composability and security.
Scroll is a zkRollup based on zkEVM on Ethereum, serving as a Layer 2 solution to address Ethereum's congestion issues.
Others
In addition to the above two categories, the Cancun upgrade will also benefit other centralized-type projects. This includes cross-chain protocols similar to Layer 2 functionalities; due to the short data retention time of Blob, it will also benefit data availability layer projects. Among them, Layerzero is currently the hottest cross-chain protocol. It is a cross-chain communication protocol that can transmit "information" from one chain to another by deploying a series of smart contracts (Endpoints) on-chain to achieve decentralized cross-chain services.
Celestia is a data availability layer project based on the Cosmos architecture, providing data and consensus layers for other L1 and L2, building a modular blockchain. Its principle is similar to Ethereum's sharding solution, which can reduce the current transaction fee bottleneck of Rollup, "data storage costs," to some extent.
With the implementation of EIP-4844, Layer 2 will be more competitive compared to other Layer 1s, and its future development prospects are relatively large. In addition to significantly reducing Layer 2 transaction fees, EIP-4844 also provides a good foundation for the future application of Danksharding, making it easier to achieve data sharding in the future. Lower transaction fees, better transaction experiences, and even the emergence of more application scenarios will make the Cancun upgrade a turning point for Ethereum Layer 2.
