Ethereum Researcher: Where Do We Go From Here?
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Ethereum Researcher: Where Do We Go From Here?
This article discusses the development history and future plans of Ethereum, focusing on the 2024 upgrades and how to address the risks of restaking.
Navigating Web3 tides with focused insightsWritten by: Mike, Stokes
Translated by Kate, Mars Finance
Overview
It has been over three years since Vitalik published his "Rollup-Centric Ethereum Roadmap" on paper. While tremendous changes have occurred during this period, the vision, like fine wine, has aged well as the Ethereum community continues along this path. The launch of the Beacon Chain, the Merge, withdrawals, and the upcoming proto-danksharding fork reflect outstanding engineering, research, and coordination efforts by individuals and teams contributing to the protocol. However, as we enter 2024, the noise is louder than ever. We believe it's worthwhile to revisit the "Rollup-Centric Roadmap" with an updated worldview. Modern problems may require new solutions.
Instead of starting with problems and assessing which one is most urgent or pressing, we suggest beginning with values. While this may seem dogmatic or disconnected from reality, we believe it is useful in helping answer the question: "What is the right problem to solve?" We adopt a "past, present, future" structure to provide a holistic view of the protocol’s evolution. Section 1 (Past) outlines recent Ethereum history. Section 2 (Present) highlights key issues today. Sections 3 and 4 pause the timeline to focus on where Ethereum excels (Section 3) and what Ethereum does not attempt to do (Section 4). This multi-part interlude sets the foundation for the forward-looking agenda presented in Section 5 (Future), broken down into near-term (Prague/Electra fork in 2024 [§5.1]) and mid-term (next 3–4 years [§5.2]).
Finally, we want to emphasize that this article represents only the authors’ views. The opinions expressed are in no way the “official” stance of the EF (even mentioning this feels presumptuous, but we do so out of caution). Sections 1–4 aim for objectivity, laying the groundwork for the more subjective ideas described in Section 5.
Section 1 – A Brief History of Ethereum
^ That’s how it would read
Before looking ahead, let’s take stock of Ethereum’s current state and how we got here. Over the past 3.5 years since Vitalik published his seminal piece "The Rollup-Centric Ethereum Roadmap" in October 2020, much has changed. Using protocol upgrades as milestones of progress, we highlight the "headline" of each consensus upgrade. For a comprehensive list of execution-layer upgrades and EIPs per fork, see the Ethereum history page.
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[December 1, 2020] – Beacon Chain Genesis
For just 35 seconds in the final month of the year, we had our first Beacon Chain block (we probably should have adjusted slot times to 0,12,24,36,48 instead of 11,23,35,47,59 (slide 41), but alas).
See the announcement.
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[October 27, 2021] – Altair
This fork required updates to validator incentives and added support for lightweight clients. It also served as a "test fork" for the consensus layer in preparation for the Merge.
Refer to the consensus specs and annotated spec.
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[September 15, 2022] – Bellatrix / Paris
“The Merge.” Ethereum is now fully proof-of-stake.
See the consensus specs, annotated spec, and execution specs.
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[April 12, 2023] – Capella / Shanghai
“Withdrawals.” A small fork to close the loop on the proof-of-stake mechanism.
See the consensus specs, annotated spec, and execution specs.
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[March 13, 2024 (expected)] – Deneb / Cancun
“Proto-danksharding (EIP-4844).” Upgrading data sharding.
See the consensus specs and execution specs.
At this granular level, the rationale behind the upgrade path is clear.
From December 2020 to April 2023 (~2.5 years), core developers and researchers executed the Proof-of-Stake Marathon™. The level of engineering, research, coordination, and collaboration involved in the Merge remains astonishing—its smooth execution stands as proof of the community’s technical excellence.
From early 2023 to today (~1 year), the community’s focus has shifted toward releasing proto-danksharding (EIP-4844). “Dencun” represents the first step in scaling Ethereum by reducing L2 data costs. While this upgrade has proven complex, the finish line is in sight—the mainnet fork date is March 13, 2024.
The strategy laid out through these hard forks is clear, focused, and aligned with the rollup-centric roadmap. Tim Beiko likened each fork to a “music festival lineup.” While many performers (EIPs) are bundled into one event, one headliner defines the fork. So far, the headlines have been “Beacon Genesis,” “Validator Incentives,” “Merge,” “Withdrawals,” and “Proto Data Sharding.” Even with the benefit of hindsight, we wouldn’t change the focus of any hard fork thus far.
Section 2 – Ethereum in 2024: Mood Check
Is anyone excited about the new “Wicked” movie?
Alright, enough patting ourselves on the back and reminiscing about the past. Let’s turn to Ethereum today. As Dorothy points out in the image above, “We’re not in 2020 anymore.” Modern problems demand honest reflection. As the ecosystem grows and specializes, many topics compete for attention and action. The resulting noise makes it difficult to discern what matters and why. We distill numerous discussion threads into three core pillars: Scaling, MEV[1], and Staking (roughly corresponding to Vitalik’s roadmap items “Surge,” “Scourge,” and “Sustain”). Still, we highlight several key questions associated with each theme.
1. Scaling – How should Ethereum continue to scale?
• Given the surge in alternative DA sources, how should Ethereum approach scaling DA?
• As we pursue the data sharding roadmap, should Ethereum attempt to scale execution?
• Should Ethereum have a clear narrative for handling cross-L1 liquidity fragmentation and L2 composability achieved via L1?
2. MEV – How should Ethereum respond to MEV?
• Is the current builder centralization status acceptable?
• How can Ethereum maintain strong anti-censorship properties in a power-law distributed block production world?
• How should Ethereum respond to dependency on mev-boost and recent issues around off-protocol software (Prysm bug, low-carb crusador, bloXroute optimistic failure)?
• Should Ethereum respond to the emergence of timing games on mainnet?
3. Staking – How should Ethereum staking evolve?
• How opinionated should Ethereum be about reducing staking centralization?
• Should Ethereum actively consider preserving some LST functionality?
• What are the medium-term risks of Coinbase and other centralized exchanges accumulating large amounts of Ethereum staking (especially considering Bitcoin ETF custodians may transition to ETH and staked-ETH ETF filings)?
• How can we protect solo stakers at all costs, given they are already a relatively small part of the network?
• How can we adequately address the risks of restaking?
While this wall of problems may seem daunting, we mustn’t let it lead to analysis paralysis. The following sections aim to reframe the discussion around protocol goals (§3) and non-goals (§4).
Section 3 – What Makes Ethereum Special?
Pausing our current timeline, let’s examine Ethereum exceptionalism®. Due to all external pressures, Ethereum’s priorities are rarely explicit. Rather than reasoning top-down about which risks are “most dangerous,” we propose revisiting bottom-up what Ethereum is and what makes it unique ✨.
1. Decentralized, censorship-resistant, trustlessly neutral, permissionless, trustless.
• These descriptors are rooted in Ethereum’s values. Each carries slightly different connotations (we won’t nitpick), but they all tap into the same energy, embodying the spirit of the protocol. They are the “it-factor.”
• Decentralization is a means to provide resistance against censorship. Without decentralization, a single party or group could exert influence over the blockchain, and with such power, abuse becomes inevitable.
• Censorship resistance enables credible neutrality. By definition, a system must treat all individuals equally to be credibly neutral.
• Resistance to censorship maintains permissionlessness. Permissionlessness encompasses using the blockchain (as transaction signers), deploying applications (as developers), and interacting with the blockchain without any trusted third party (as validators)—each is critical.
• Solo stakers[2] enable Ethereum’s decentralization. Every design decision in Ethereum must consider solo stakers. Without them, there is no meaningful decentralization.
• Resistance to censorship reveals itself in black swan moments. You only feel its relevance when it becomes the only thing that matters. For example, protecting your private property rights in Canada didn’t feel urgent until they were severely undermined in 2022.
2. Community.
• Decentralized governance. Ethereum aims to remain significantly larger than any single entity. Open-source ethos permeates client software, protocol specifications, research, events, coordination, and beyond.
• Client diversity. Ethereum boasts a thriving multi-client ecosystem. Beyond technical advantages, client diversity cultivates a broad pool of developers familiar with the protocol, contributing valuable energy, skills, and perspectives toward improvement.
• Ethereum is passionate and welcoming. The “people” (often called Layer 0) are essential components. With regular global gatherings, thousands of personal connections, and a generally positive atmosphere, Ethereum has long served as a “digital home” for new crypto participants.
3. Ether asset.
• Distribution. While we believe proof-of-stake is the correct consensus algorithm + Sybil protection for Ethereum, there’s no denying that seven years of proof-of-work was a great token distribution mechanism.
• Lindy effect. Through long-term existence, the Ethereum network has demonstrated its antifragility, building trust in the network token and its value proposition.
• Utility. We like comparing Bitcoin to digital gold and Ether to digital oil. After all, Ether is the gas token of the Ethereum network.
• Monetary properties. Unlike its analog counterpart (extending the oil analogy), Ether also possesses monetary properties (collateral asset in DeFi, unit of account for digital goods and economic security, medium of exchange across the ecosystem), expanding its value and granting it a “monetary premium.” Ether’s candidacy as “internet commodity money” remains strong.
• Value is necessary for security. A core principle of the “super sound money” thesis is that network security depends on the value of the Ether asset. We believe this is true. If Ethereum aims to become the settlement layer for trillions of dollars in economic bandwidth, the token securing those settlements must hold value.
• Network effects. Liquidity, existing applications and developers, the EVM, rapidly growing L2 adoption—all contribute to strong network effects for the Ethereum asset and the broader Ethereum ecosystem.
The above is neither exhaustive nor prescriptive. These points highlight elements of Ethereum differentiation. This enumeration is particularly relevant as we now turn our attention to the protocol’s “non-goals.” In our estimation, focusing on the following would be “missing the forest for the trees,” even if short-term gains result.
Section 4 – What Isn’t Ethereum Trying to Do?
“You’re preaching again.” If this is your current attitude, this section is for you. Contrary to what Ethereum excels at, we also try to identify explicit non-goals of the Ethereum network (in our view).
1. Provide the friendliest L1 execution.
• This is a critical starting point because the rollup-centric roadmap *explicitly* aims to push user activity to L2. By sharding data rather than execution, Ethereum takes a strong stance that L1 execution may remain expensive and unsuitable for everyday transactions.
• Resulting example – When application-layer developers complain about long slots and high fees, the truth remains that Ethereum L1 is not intended to be an app platform. Designing Ethereum as “the best DA and settlement layer for L2s” may directly contradict desires of L1 application developers. For instance, reducing slot time (purely hypothetical) would greatly improve UX for L1 transactions but harm the solo staker community. Such a trade-off doesn’t seem worth it.
• However, this doesn’t mean Ethereum should actively make L1 execution worse. Since L1 still provides forced transaction execution support for L2s, ensuring reasonable transaction processing on L1 remains important. Discussions about increasing the gas limit might help.
2. Provide the cheapest DA layer.
• This is important because alternative DA layers and the “modular” blockchain narrative continue gaining momentum. Alternative DA layers don’t use any magical technology unavailable to Ethereum. Instead, they simply don’t intend to build and nurture a solo staker ecosystem.
• Resulting example – Ethereum won’t scale byte-by-byte at the same rate as these networks, as Ethereum refuses to compromise on bandwidth (and compute) requirements to keep demands reasonable for solo stakers.
• However, Ethereum aims to remain the “Manhattan” of block + blob space. Scaling blob space “fast enough” to remain highly usable without compromising security is crucial. Ethereum already occupies a “catbird” seat and benefits from it. Existing liquidity, composability, applications, and L2 network effects are extremely strong. Ethereum DA should continue offering Rollups the best value per dollar of security.
3. Operate like a startup.
• As mentioned, Ethereum has real decentralized governance. With multiple consensus and execution clients, application developers, infrastructure providers, application-layer service providers, researchers, educators, etc., many stakeholders with potential conflicts of interest have a voice in the protocol’s future. Ethereum governance cannot and should not try to mimic the operational efficiency of companies/startups with clear hierarchies and centralized decision-making.
• Resulting example – Network upgrades are arduous tasks. Many outsiders complain about delays between upgrades, lack of concrete timelines, and the ACD process, but the ship is working as intended! Recall §1.
• However, Ethereum should still strive to be effective and efficient within the bounds allowed by decentralized governance. While the protocol must eventually solidify (practically slow-changing, like IPv4/IPv6), clear improvements remain for managing long-term viability. Ethereum should avoid premature ossification due to politicization and continue executing roadmap initiatives.
* Stepping off the soapbox. * While we think the previous section is uncontroversial (plugging ears to avoid screams), we allow it to lean more subjective. The next part enters mature opinion territory. But it’s necessary. With limited resources, tough decisions about Ethereum’s future must be made. Here are our thoughts on the Prague/Electra fork (§5.1) and mid-term (§5.2).
Section 5 – Looking Ahead
Feeling optimistic upon waking up
If you’re still here, thank you for sticking with us. We finally feel equipped to tackle the “looking ahead” question. That’s what roadmaps are for, right? This essay on the rollup-centric roadmap and today’s understanding aims to frame Ethereum’s future based on what’s been discussed:
• Acknowledging the historical perspective outlined in §1.
• Recognizing Ethereum’s current reality as presented in §2.
• Aligning with the uniqueness of Ethereum highlighted in §3.
• Defaulting to what Ethereum isn’t trying to achieve, as stated in §4.
Up to this point, we’ve remained objective, focusing on facts. Conversely, proposing opinions on how Ethereum should move forward falls entirely into the realm of subjectivity. Below are the authors’ views—and thus carry their biases—please note. Yet, we believe it’s better to express our views while listening to others. “Strong opinions, loosely held.”
With the groundwork thoroughly covered, we divide our outlook into two shorter timeframes. First, we outline a hypothetical Prague/Electra hard fork (conditioned on an EOY 2024 target, which seems a rough consensus). Second, we look toward the “mid-term” future, defined as the next 3–4 years. In each subsection, we break down the vision into the three previously mentioned tracks: Scaling, MEV, and Staking.
§5.1 – To Prague/Electra (targeting end of 2024)
Inspired by reth, prysm, and Sigma Prime sharing their views on the Prague/Electra fork, we share what an ideal (from our POV) year-end fork would include.
• Scaling – “Continue scaling Ethereum into the ‘Manhattan’ of block and blob space.”
Increase blob count based on mainnet 4844 data analysis, possibly adjusting CALLDATA cost. Begin implementing PeerDAS without bottlenecking it on the Prague/Electra fork[3].
• MEV – “Take the first step toward addressing MEV centralization risk in-protocol by loading inclusion lists.”
See EIP-7547 and related work.
• Staking – “Improve staking UX and begin allocating development resources to Verkle trees and statelessness.”
Add EL-triggered exits (EIP-7002) and fulfill Osaka hard fork’s Verkle commitment.
Zooming out slightly (but not fully), a 3–4 year window gives us more room to consider broader themes.
§5.2 – And Beyond (“Mid-Term” ≈ 3–4 Years)
• Scaling – “Scale Ethereum DA by 3x over the next four years.”
Ansgar’s articulation of this ambitious goal is far from settled, but it offers a mental model for how Ethereum might reasonably commit to scaling in the mid-term. The following measures would grow data throughput 81x over these four years…
2023 (~) – 3x via EIP-4844
2024 – 3x via increased blob count and gas adjustments
2025 – 3x via adding PeerDAS
2026 – 3x via full Danksharding
This would maintain Ethereum DA’s competitiveness per byte per dollar of security. Retaining “blue-chip” general-purpose rollups on Ethereum DA is necessary, as Ethereum’s scaling roadmap depends on having “no impact” on security from rollups.
• MEV – “Conduct R&D to determine long-term protocol solutions for MEV.”
With ePBS, execution tickets, pre-confirmations, MEV-burn, encrypted mempools, timing games, censorship-resistance diversity, and more, many open questions remain about how the protocol should respond to MEV.
We believe, within a mid-term framework, concerted effort should go toward researching and realizing terminal protocol features to address MEV.
• Staking – “Protect Ethereum’s solo stakers as we iterate on proof-of-stake.”
Implement Verkle trees and max_effective_balance. Both upgrades enjoy broad support, benefit solo stakers, and ideally should ship as soon as possible.
Decide the path toward single-slot finality. This route depends on decisions around Ethereum’s target validator count and issuance adjustments (see Anders’ recent work [1,2]).
Address major uncertainties arising from staking centralization, restaking implications, and LST + LRT (possibly the most important task).
Finally, Ethereum is defined by its community. Much has changed since 2020, but the “people” haven’t. Beyond any technical direction emphasized above, setting aside “alignment,” politics, and zero-sum thinking—while striving to remain the most open and welcoming community—is vital to the project’s success.
Thank you for reading 📖🤓
1. We use “MEV” broadly to capture externalities related to execution protocol: MEV, censorship, timing games, etc. Again, Vitalik’s “Scourge” is the correct mental model, but we use “MEV” as an umbrella term because it’s familiar.↩︎
2. We use “solo stakers” to broadly categorize the long tail of Ethereum validators participating in consensus. In the future, this participation may change, but what remains constant is that individuals from many jurisdictions participate. The counterfactual where “all staking/validation/consensus participation is handled by professional operators in a small geographic region” exposes the protocol to external pressures.↩︎
3. An under-discussed fact about PeerDAS is that outside of implementing the interface on each client, it doesn’t need to be rolled out in every client during a specific hard fork. Once everyone “speaks” PeerDAS, clients can safely choose which blobs to download. Clients downloading all blobs effectively become “super nodes.” See Francesco’s documentation for more on PeerDAS.
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