Notable developments in Ethereum

Yesterday's article briefly shared some recent developments in Ethereum. Some of these details are worth digging into and learning from, as understanding them can give us a clearer view of the general direction Ethereum is heading in the future.

Today, I will share Ethereum's progress in three areas.

• Ethereum Interoperability Layer (EIL)

Recently, a new concept proposed by the Ethereum Foundation regarding the unification of all Layer 2 (L2) expansions of Ethereum was published on the cutting-edge research site ethresear.ch, namely the Ethereum Interoperability Layer (EIL).

Interoperability refers to allowing users to initiate an operation on any Ethereum Layer 2 expansion that can be executed both on the main chain and on other Layer 2 expansions.

In the current Ethereum Layer 2 ecosystem, when a user only has funds on Layer 2 expansion A (such as Arbitrum) but wishes to operate on Layer 2 expansion B (such as Base) (for example, to purchase an NFT on Base), they must first transfer the funds from A to B through a cross-chain operation before proceeding with the operation on B.

This process requires a cross-chain operation.

If this cross-chain operation is done through a third-party bridge, it carries implicit security risks; if done through a native bridge, there may be some delays. In short, it is either troublesome or time-consuming.

However, with EIL, users can directly initiate the purchase action on A, and the system can help them buy the NFT on B. Users no longer need to perform a cross-chain operation.

Thus, EIL can abstract the entire Layer 2 expansion ecosystem experience into operating on "one" chain.

This not only improves user experience but also provides a kind of "unification" of liquidity across the entire Layer 2 expansion ecosystem—allowing users to no longer feel the fragmentation of liquidity between different Layer 2 expansions.

To some extent, this concept could replace the existing cross-chain bridges between Layer 2 expansions, enabling the entire Ethereum network along with all Layer 2 expansions to form a highly liquid network.

• Ethereum's Privacy

Privacy has always been a topic of concern in the crypto ecosystem. However, the understanding of privacy has different emphases at different stages.

Recently, there are two popular categories of privacy technologies:

One is privacy technology represented by zero-knowledge proofs, and the other is privacy technology represented by fully homomorphic encryption.

Privacy technology represented by zero-knowledge proofs (ZK) is increasingly playing a role in simplifying the verification of the Ethereum mainnet using privacy technology, thereby improving the performance of the Ethereum mainnet.

For example, in previous articles, we shared how the Brevis project significantly shortened Ethereum block verification time using zero-knowledge proofs, leading to performance improvements.

In addition to Brevis, there are other projects (such as Succinct and Zkysnc) that have recently made significant breakthroughs in this area. Their main breakthrough lies in achieving the verification of mainnet blocks at a lower cost (the cost of GPU investment). According to relevant data, based on their current progress, it only requires less than $100,000 to run a zero-knowledge proof verification node for Ethereum.

I believe that with further advancements in technology, this cost will significantly decrease in the future, and performance will greatly improve.

On the other hand, privacy technology represented by fully homomorphic encryption (FHE) has recently attracted attention due to the progress of the ZAMA project.

FHE technology can be summarized as enabling transaction privacy. ZAMA is not a new blockchain but a privacy protocol layer built on top of Ethereum.

In the current Ethereum network, when user A transfers an amount to user B, we can immediately see A's address, B's address, the token transferred, and the amount in the browser.

This is very unfriendly for users, especially those with commercial purposes.

After using the ZAMA protocol, the situation changes.

In the browser, we can only see that a transaction has occurred, but we cannot see the addresses of A and B, nor can we see what tokens were transferred or how much was transferred.

Therefore, with the continuous advancement of such projects, we will soon see Ethereum meeting the privacy protection needs in commercial scenarios.

• Improving Performance Without Compromising Decentralization

Improving performance in the Ethereum network has never been an easy task. The biggest challenge lies in how to enhance performance without compromising decentralization, rather than simply improving certain metrics to boost performance.

Take the commonly used Gas Limit as an example; if one simply wants to improve performance, they could just increase the Gas Limit. However, doing so would increase block size, force the use of higher-performance node servers, gradually raise the cost of block production, elevate the entry barrier to the network, and ultimately sacrifice decentralization.

Therefore, Ethereum has always been very cautious and slow in improving network performance.

Recently, thanks to the development of zero-knowledge proofs and related technologies, the cost of block verification has been greatly reduced without affecting block time, which has given Ethereum the confidence to accelerate progress in this area.

"Blue Fox" envisioned Ethereum in the next 5-10 years in one sentence, and I generally agree with it. Here are some key metrics I would like to share:

• "L1 TPS 10,000; L1+L2 TPS 1,000,000";

• "The era of mobile verification, a more decentralized Ethereum";

• "Hundreds of L2 application chains processing over hundreds of billions of transactions monthly";

• "Achieving quantum-resistant Ethereum";

• "The liquidity fragmentation between L1 and L2 is basically resolved, and the value capture issue is no longer a concern."