The Ethereum Surge: The Post-Merge Future of The Blockchain
In my previous article, I walked you through everything you need to know about the Ethereum Merge. Ethereum’s shift from the traditional Proof-of-Work consensus mechanism to the Proof-of-Stake does not only mean lower energy consumption but could also be a step in the right direction for the blockchain and crypto industry to play their parts in reducing their carbon footprints.
Vitalik Buterin, co-founder of the Ethereum blockchain, spoke at the Ethereum Community Conference in Paris about his expectations for Ethereum in the post-Merge future. Buterin concluded the presentation by stating that Ethereum will be approximately 55% complete after the Merge.
So where does this put Ethereum in the world after Merge? Many have viewed the Merge as the network’s big finale. However, Buterin claims that after the Merge, Ethereum will now be addressing “the Surge, the Verge, the Purge, and the Splurge.”
The Ethereum Surge
The Surge refers to Ethereum’s introduction of mechanisms that will make the network more scalable by enabling the construction of layer 2 (companion) products, such as sharding and rollups, hence making it simpler for users to function on the Ethereum network.
The Ethereum Sharding
Sharding is a computer science concept that enables applications to support additional data by scaling them horizontally. If sharding is implemented on Ethereum, each user would only need to store a portion of the database update rather than the complete transaction.
A post-Merge future has also garnered significant interest at Danksharding. Ethereum enthusiasts have resorted to this prototype as a solution to make Ethereum more scalable, despite the fact that Buterin did not address the concept in Paris.
Danksharding employs the same concept of sharding the network, but instead of utilizing the shards to enhance the number of transactions, it uses them to increase the amount of space for groups of data. This enables Ethereum to process greater data volumes.
While coverage emanating from Paris has begun to bring attention to Ethereum’s exploration of sharding, sharding has been a concept since Ethereum’s inception in 2013. The implementation is anticipated to commence in 2023.
How danksharding works:
Danksharding is a sharding system that incorporates the concept of a merged market fee; unlike traditional sharding, in which different block and block proposers exist for each shard, danksharding has only one proposer. It is the responsibility of the block builders to select the data and transactions that go into each block slot.
Danksharding employs “data availability sampling,” a technique that enables nodes on Ethereum to validate vast quantities of data by sampling a small number of its instances. Essentially, it permits Ethereum to process more amounts of data than it could previously.
Post-Merge Ethereum will initiate a paradigm shift that is significantly more profound than the simple transition from proof-of-work to proof-of-stake. Adopting a modular infrastructure approach may usher in a new type of stakeholder: the block builder.
Under the present PoW system, Ethereum miners are responsible for both validating and constructing network blocks. These miners have the final say over the precise order of all transactions they validate.
Controlling the flow of transactions enables you to profit from on-chain operations; this is a valuable position to hold. The value retrieved by miners is known as the Maximum Extractable Value (MEV).
Take a look at this for example:
In the cryptoverse, ETH is a major currency and can be used everywhere. Let’s compare it with buying train tickets, game tickets, pizza, paying restaurant bills, etc.
You order groceries from a smart contract on an open marketplace. A tiny local business sees your order and is able to offer you the best price, including delivery by bicycle. But a big corporate has paid the MEV auction winner to remove any food purchases other than their own from the block. They need not even compete on pricing. You would overspend on your purchases and the local business goes bankrupt. This is one issue with MEV.
MEV originally stood for “Miner Extractable Value,” however after The Merge, when miners will no longer be required, this moniker would not have been appropriate. Instead, validators will play the primary role in safeguarding the chain.
After block builders submit a request to determine what goes into each slot (that will ultimately create a block.), it is up to the proposer to choose the highest bidder Once a builder is assigned to a slot, they are responsible for processing the entire block.
According to the Ethereum team, the primary purpose of this design is to limit the two unjust constraints now exercised by miners which is the Maximum Extractable Value (MEV.)
First, block proposers may exhibit unfair preference by selecting their own transactions or those of their acquaintances. Second, block proposers can manually select transactions with the highest bidder, leaving millions of others in the mempool for hours or days.
With danksharding, however, no one knows the contents of the builder’s submitted sorted list of transactions. Therefore, the miners or proposers have diminished authority.
Rollups
In simple terms, rollups bundle transactions outside of the main Ethereum blockchain and then return the transaction data to the main Ethereum network to execute, update accounts, and finalize.
On the one hand, we have layer 2 solutions such as State Channels that are fully secure by Ethereum security but only work well for a specific set of applications; on the other hand, we have sidechains that run in parallel to Ethereum and are typically EVM (Ethereum Virtual Machine) compatible and can scale general purpose applications, but they do not rely on Ethereum for security and instead have their own consensus model.
Rollups attempt to combine the best of both by developing a general-purpose solution built on top of Ethereum’s security. Rollups resolve transactions outside of the main Ethereum network, but provide and finalize transaction data to the Ethereum network, therefore drawing their security from the Ethereum protocol.
Each rollup has its own contracts launched on the Ethereum mainnet. Rollups process the transaction off-chain, primarily on a rollup-specific chain, and then batches, compresses, and transfers the transaction data to the main Ethereum chain; this decreases the transaction processing load on the main Ethereum network.
This contributes to the reduction of blockchain fees and adoption by expanding participation. Rollups also permit the redeployment of all existing Ethereum smart contracts with minimal or no modification.
Conclusion
Basically, the primary objective of the Ethereum Surge is to boost the scalability of the blockchain.
“After the merge, you will be able to design an Ethereum client that does not even know the proof-of-work phase has happened.”, said Vitalik Buterin. “At the end of this road map, Ethereum will be a much more scalable system. By the end, Ethereum will be able to process 100,000 transactions per second.”
Since the Merge will only make the Ethereum network 55% complete, developers have a long road ahead. The whole community will be on the lookout for more exciting changes.
