Ups and downs, ups and downs: taking stock of the changes and history of Ethereum in 2024
Reprinted from panewslab
01/03/2025·3MWritten by: Tia, Techub News
There are turbulent times, ups and downs, or "dangers everywhere"...
This is an unusual year for Ethereum. There are climaxes after the approval of US spot ETFs, and there are also crises in the face of competition from Solana and various "anti-Ethereum" remarks. In addition to personnel changes, a researcher previously joined Eigenlayer as a consultant and later resigned from Eigenlayer in order to better develop Ethereum. There are also Beam Chain and liquidity fragmentation issues raised at Devcon. Every detail reflects this extraordinary year.
Ups and downs in price action
Looking at the Ethereum price chart, we already know how many ups and downs it has experienced. From more than 2,000 US dollars at the beginning of the year to more than 4,000 US dollars in March, back to the beginning of the second word, and then rising to more than 4,000 US dollars again, it is full of drama and uncertainty.
On January 11, 2024, the U.S. Securities and Exchange Commission (SEC) documents showed that the SEC approved the listing of 11 spot Bitcoin ETFs. Riding on the trend of ETFs and the expectation of Ethereum’s approval of ETFs, Ethereum has been soaring. In just one day, Over the course of many months, prices nearly doubled.
On July 23, the US spot Ethereum ETF was launched. Although the trading volume of the spot Ethereum ETF was booming after its launch, the trading volume exceeded US$200 million in just 45 minutes. However, since the price increase in the first half of the year has included the expectation of issuance of Ethereum ETF, the US spot Ethereum ETF was launched and did not achieve excessive growth.
Since there was no sustainable innovation in the industry to support the high price, after the price of Ethereum skyrocketed, in August, the price began to fall crazily again. Starting from July 30, the price of Ethereum began to decline for seven consecutive days. It fell from a high of $3366 to a low of $2111. What follows is a long sideways movement.
Until Trump won the presidential election, he sang all the way again, raising Ethereum from the beginning of 2 to a maximum of $4170.
The seven consecutive days of decline and seven consecutive days of rise, as well as the roller coaster-like double rise and fall, reflect the extremely high volatility of the crypto market and also show the influence of market participants' emotions, expectations and external events. (Yes. This is crypto 🕶️)
Behind the rise and fall is a series of iron logic that has to be acknowledged. For example, the sharp rise in expectations for the listing of the Ethereum ETF after the approval of the Bitcoin ETF at the beginning of the year, such as the waterfall decline that returned to the original point due to the inability of ETFs alone to continue to drive an industry that lacks real innovation and lasting market demand; another example is that due to After Trump came to power, there was a crazy rise in the enthusiasm for crypto...
Looking back at the price trend of Ethereum, it is not difficult to find that its ups and downs are not only driven by external macro factors, but technological progress often plays an important role in it. From the launch of Ethereum 2.0, to the implementation of Layer 2 scalability solutions, to the continuous optimization and update of the Ethereum network, every technological breakthrough has become the focus of the market. However, the gains brought about by these improvements do not happen overnight, and are often overshadowed by short-term market sentiment.
Beam Chain, Dencun upgrade, Pectra upgrade and other EIPs
Beam Chain
Beam Chain was presented by Ethereum researcher Justin Drake at Devcon Thailand. Beam Chain is Justin's proposal to redesign the Ethereum consensus layer. This proposal is a further upgrade of Beacon Chain. The main goals are related to MEV, lowering the pledge threshold, achieving fast finality single slot finality, and ZKizing the entire consensus layer. This proposal rides on the breakthrough of SNARK technology and is equivalent to an upgrade of the old Beacon Chain design from 5 years ago.
Dencun upgrade
The Ethereum Dencun upgraded version was launched on March 13, 2024. The hard fork combines two core improvements: Deneb consensus layer and Cancun execution layer updates. The highlight of the upgrade is EIP-4844 Proto-danksharding. Rollup can send transaction, proof and other data to Layer1 in the form of Blob. Since Blob is the temporary storage and access of off-chain data, compared with the original calldata, using Blob will make the cost of Rollup much lower. But this also caused a sharp decline in Ethereum’s revenue.
EIP-4844 is a controversial EIP. In the short term, it is indeed the reason for the sharp decline in Ethereum's revenue, and it is also one of the main reasons why Ethereum is criticized; but some people call this EIP "a small step for Sharding, a big step for Ethereum expansion" ”, in the long run, its specific impact is still unknown.
The Dencun upgrade also includes some EIPs that improve the efficiency of Ethereum usage, such as EIP-7516, EIP-6780, EIP-5656, EIP-1153, etc. The specific EIPs included in the Dencun upgrade are detailed in the table below.
EIP-4788
|
Consensus layer
|
Improve information exchange issues between Ethereum’s execution layer and consensus layer. Prior to EIP-4788, the EVM had no direct access to the latest directory and had to rely on indirect methods to understand what was happening in the beacon chain. EIP-4788 proposes to put the beacon block root (the hash tree root of the digest or parent block) into every EVM block. In this way, information and data can be transferred without relying on third parties.
---|---|---
EIP-7044
|
Consensus layer
|
Improve the exit mechanism of Ethereum staking
EIP-7045
|
Consensus layer
|
Extend the maximum time for Attester to submit proofs.
EIP-7514
|
Consensus layer
|
Introduce restrictions on the "epoch churn limit" to limit the growth rate of the number of Ethereum validators.
EIP-4844
|
Execution layer
|
EIP-7516
|
Execution layer
|
Is an opcode that returns the current data blob base.
EIP-6780
|
Execution layer
|
is an opcode that allows a smart contract to delete itself from the blockchain.
EIP-5656
|
Execution layer
|
Is an opcode that optimizes the process of copying data in memory
EIP-1153
|
Execution layer
|
Is an opcode that allows smart contracts to use transient storage, that is, the storage is cleared at the end of transaction execution.
Pectra upgrade
The Pectra upgrade combines two separate upgrades: the Prague execution layer upgrade and the Electra consensus layer upgrade. The Pectra upgrade precedes the Fusaka upgrade (specifically designed to implement the Verkle transition). The Pectra upgrade is a series of other changes that precede the implementation of the Verkle transition, as Ethereum developers agree that no other substantive changes can be combined with Verkle. Verkle transition represents the migration of all Ethereum state data from the Merkle Patricia tree structure to the Verkle structure. This will enable nodes to generate smaller proofs about state data that can be passed to other nodes more easily, and is a prerequisite for implementing a "stateless client".
The Pectra upgrade is initially planned to be activated on the mainnet in early 2025. Among them, the more important one is the account abstraction EIP-7702, whose main function is to extend the smart account function to EOA.
EIP-7702 is an improvement of EIP-3074 and was proposed in May 2024. EIP-3074 is the community's first attempt to explore extending smart account functionality to EOA. Unlike ERC-4337 ( which allows smart contracts to behave like user accounts by introducing a smart contract called EntryPoint ), if ERC-4337 is a way to achieve account abstraction that does not require changes to the execution layer or consensus layer, EIP-3074 requires an Ethereum hard fork to be implemented. It mainly extends the smart account function to EOA by introducing two operation codes - AUTH and AUTHCALL.
EIP-7702 is a further step forward from EIP-3074. Unlike EIP-3074's opcode that implements EOA's smart account mode, with EIP-7702, EOA can now store an address called a "delegation indicator" that points to the smart contract. When a transaction is sent to EOA, it can execute the code on this specified address as if it were its own code, similar to how "delegation calls" work in smart contracts.
While EIP-7702 brings smart account functionality to EOA, it addresses many of the concerns raised by EIP-3074, provides full compatibility with ERC-4337 and a clear upgrade path, and is planned to be included in the Pectra upgrade.
Since Pectra will shift focus to Verkle Tree after the upgrade, EIP-7702 may be the last EIP for account abstraction related upgrades, because after this, there may not be another 2-year window to include account abstraction related upgrades.
Other code changes for Pectra so far include improving the experience for users and smart contract developers. For a more detailed introduction to Pectra upgrade, please refer to this article .
Other EIPs
Not all EIPs that pass the review need to be upgraded after a hard fork before they can be used. Ethereum has also passed some major process/standard EIPs this year, such as the cross-chain intent standard ERC-7683 and the account abstraction standard ERC-4337, etc. ( ERC is a subset of EIP), such changes rely more on the community's recognition of the EIP, that is, whether the community is willing to accept or actively implement it. Some EIPs that require hard fork upgrades before they can be used will also need to wait for acceptance by users, DApps, etc. before they can reach universal adoption.
Interoperability: Cross-chain/Rollup standards
With the Ethereum Rollup-centered roadmap and the growing number of various types of Layer 1, the liquidity on the chain is fragmented and the composability, one of the biggest advantages of the chain, is also gradually lost with the fragmentation.
There are two gradients of interoperability problems that need to be solved: one is how to achieve fast, low-cost and secure cross-chain assets, and the second is how to achieve synchronous composability.
Currently, there are many protocols that can implement the first gradient problem. Protocols like Across have greatly improved cross-chain speeds with very low fees. Due to its intent-based architecture, users’ cross-chain security issues have also been completely transferred to the solver. Currently, some related proposals on cross-chain/Rollup are mainly devoted to solving some preliminary standard issues.
Synchronous composability is subsequently transferred to Based Rollup. Specific proposals related to cross-chain/Rollup are as follows:
ERC-7683
ERC-7683 is an intent cross-chain standard jointly proposed by Across and Uniswap. Through this standard, all intent interoperability orders can share the solver network.
ERC-7683 combined with ERC-3668 and ERC-3770 will bring preliminary interoperability experience to L2. ERC-7683 creates a unified framework for cross-chain intentions that can be accessed by all solvers; EIP-3370 adds an identification label to the blockchain address, clarifying the specific blockchain network to which the address belongs, and preventing users from sending money to In the wrong network; ERC-3668 CCIP Read has completed off-chain verification well. It provides a security mechanism to obtain off-chain data without additional trust assumptions, and will effectively automatically support L2 compatibility. A light client for the blockchain without requiring any additional configuration from the wallet.
RIP-7755 (L2 call standard)
RIP-7755 is an L2 calling standard. This POC was launched by the Base research team on October 17. It aims to achieve seamless cross-chain interoperability between different Ethereum Layer 2 networks, especially mainstream Layer 2 networks such as Optimism and Arbitrum. The proof-of-concept of RIP-7755 is applicable to blockchains that comply with the EIP-4788 standard, and is currently able to verify the status of the OP Stack chain and Arbitrum.
summary
The above is an overall review of the major events that Ethereum will experience in 2024. Of course, the journey of Ethereum 2024 is much more than this. It also includes the dispute with Solana, criticism of unclear positioning and centralization, large institutions starting to hold Ethereum spot ETFs (Michigan pension fund disclosed holding more than 10 million US dollars in Ethereum spot ETFs), large institutions on Ethereum Launch of tokenized products (UBS launched uMINT, a tokenized money market fund based on Ethereum in Singapore, Wall Street giant Guggenheim tokenized US$20 million in commercial paper on Ethereum), and V after facing the crisis Shen published 6 articles about the Ethereum roadmap, conducted AMA answers on the Ethereum Research Reddit, etc...
And in the end everything points to an unanswered question, where is the future?
chaincatcher
