Ethereum Upgrade Paves the Way for More Scalable and Private Apps
Hello defiers! Here’s what’s going on in decentralized finance,
- Ethereum’s scheduled hard fork is in two days
- Zerion raises $2m in seed round led by Placeholder
Ethereum About to Undergo a Major Upgrade
The Ethereum network is scheduled to upgrade in two days, paving the way for more scalable and private applications.
The Istanbul upgrade, Ethereum’s eighth hard fork, is scheduled to be implemented in block number 9,069,000, predicted to occur this Saturday. There will be six major changes, comprised in what’s known as Ethereum Improvement Proposals.
These EIPs will*:
- Modify the cost of running some computations in the system to protect against denial of service attacks. Having mis-priced functions, or opcodes, can open the door for attackers to cause congestion in the network by flooding it with cheap transactions. It’s been a common tweak in past hard forks. (EIP 1884)
- Enable Ethereum and Zcash to interoperate with relays and atomic swaps, which allows for the exchange of ether and Zcash. The two chains have collaborated in the past and future hard forks on both networks will continue strengthening this bridge. While Ethereum’s focus is on smart contracts, Zcash’s is on privacy. (EIP 152)
- Changes to the cost of storage will enable more creative functions including re-entry locks and the ability to send multiple transactions at once. (EIP 1344)
- zk-SNARKs and zk-STARKs, a technology which allows for users to transact by revealing only necessary data and keeping the rest private, will be cheaper to use. This will allow Layer 2 solutions using this technology, such as ZK-Rollups, to increase throughput, a.k.a, become more scalable. (EIP 1108, EIP 2028)
*Info from EthHub and Eth.Wiki
This last point is likely the most relevant for DeFi applications, which as users grow, will need to handle a greater amount of transactions and maintain users’ privacy. EthHub’s Eric Conner said EIP-2028 will allow Ethereum to scale to 3,000 transactions per second, and highlighted teams such as Uniswap and StarkWare which are already planning to introduce ZK-Rollups in the future.
Geth lead developer Peter Szilagyi cautioned that Ethereum’s “Layer 1 will most definitely not scale any better all of a sudden,” but the Istanbul upgrade “will enable is a bit more wiggle room for Layer 2 solutions.” Still, these solutions are still in research and cannot interact with Layer 1 yet, he said.
One similar technology which is ready fro production is Optimistic Rollups. Read about the difference with ZK-Rollups here, and my interview with Jinglan Wang, who is leading optimistic rollup development at Plasma Group, here.
Aside from the details, the take away is, there’s progress being made to improve scalability and privacy on Ethereum.
It continues to impress me that this is all happening in a decentralized and open way. All these EIPs were discussed in public calls, where anyone is free to contribute. Anyone is also free to propose new EIPs and discuss current ones. Decisions on which ones get approved are made by developers on these calls.
To be sure, it’s debatable how representative this is, as often no more than a dozen or so people join and decide by “rough consensus.”
The upgrade itself also happens in a decentralized manner: Node operators (people running the Ethereum software and storing a copy of the network’s transaction history) and miners (who confirm transactions in exchange for ether) have to make the upgrade by downloading the new version of the software.
So far, 57 percent of nodes are still not ready for the upgrade, according to Ethernodes. Nodes which fail to upgrade will be “stuck on an incompatible chain” and unable to send ether or operate after the fork, the Ethereum Foundation said.
If you’re running a node, go upgrade! The rest of us, be reassured by the fact that past hard forks have largely gone without a glitch.
DeFi Dashboard Zerion Raises $2 Million in Seed Round
Chai Double-Interest Thread
In a recent post about Chai –which wraps Dai and the interest it generates from the Dai Savings Rate in one token– I brought up the question of, what happens if that token, which already represents a different token that’s gaining interest, is lent out to generate even more interest? –enough to make your head spin, I know.
Check out this interesting thread, which takes a shot an answering that question:
FollowTheChain⛓ @FollowTheChain1/ If @compoundfinance listed $CHAI (a DSR wrapper), would the cCHAI holder be double-lending (i.e. lending a lending voucher)? 🤔8:32 PM ∙ Dec 4, 201930Likes9Retweets
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About the author: I’m Camila Russo, a financial journalist writing a book on Ethereum with Harper Collins. I was previously at Bloomberg News in New York, Madrid and Buenos Aires covering markets. I’ve extensively covered crypto and finance, and now I’m diving into DeFi, the intersection of the two.
