5 Meaningful Developments from EthCC 2019
I was excited to be part of the EthCC 2019 last week in Paris from the 5th-7th March. The conference saw the assemblage of hundreds of Ethereum developers, 250 international speakers, several Ethereum native projects as well as a wide range of initiatives in other areas of the blockchain ecosystem.
With many talks, workshops, and networking events there was lots of material and topics to discuss — some as a basis for celebration, some as a foundation for discountenance. Part of my desire to attend EthCC was to find out the most recent and exciting aspects of blockchain ecosystem in development. In this review, I will outline 5 stimulating and novel areas currently being developed and explain why I believe they are important in shaping the next phase of the blockchain ecosystem. Although EthCC was predominantly an Ethereum-focused conference, our selected themes have a theoretical application to the blockchain ecosystem more widely and their impact is by no means limited to a single platform.
In no particular order:
dApps quickness to launch
In October last year at the Web3 Summit, Gavin Wood did something special. Usually blockchains take significant time to design, test, implement, and revise. Gavin showed instead that it’s possible for blockchains to be spun up in less than 60 minutes on a factory fresh MacBook — a showcase we might look back fondly in 20 years time.
The first talk of EthCC began with Ryan Zurrer presenting ‘The State of Web3’. Part of Zurrer’s vision of Web3 is speed to launch for dApps. While most eyes were on Etheruem and its technical roadmap to 1.x and 2.0 to become a more suitable smart contract platform for dApps, a relatively new technology from Parity, called Substrate, allows for such rapid blockchain creation designed for specific applications. Developers can literally pick and choose in a modular fashion using the Substrate Runtime Module Library what features they would like to include even down to the consensus mechanism level. Substrate represents the ‘Wordpress’ for blockchains.
While developers use deterministic subset of WebAssembly by building on substrate, parts like the execute block function is hot-swappable, meaning developers can upgrade a blockchain’s logic and are not ‘locked in’ to design parameters by any means and can be theoretically changed at any time. I believe that such open source tech stacks allow for lower friction to creating blockchains for specific use cases and increasing the likelihood of overall adoption.
This whole approach enables blockchain developers to focus on what they want to focus on — the state transition function (STF). The real beauty of blockchain development on systems like Substrate is that it directly gives these blockchains direct communicative channels access to other blockchains (for example, Ethereum) if they are also ‘plugged into’ Polkadot ecosystem. Furthermore, it gives high security assurances given Polkadot’s shared security model in its hubs and spoke framework so developers need not worry about limited security achievement through their chain’s consensus if they ultimately decide to become a Polkadot parachain instead.
I very much look forward to seeing other teams build out similar initiatives that allow for developers to build out their own STFs with an increasingly wider set of capabilities and feature set. The ‘time to build’ dApps will only decrease in the future.
Polkadot as an interoperability protocol does not directly compete with Ethereum. What is perhaps more nuanced is the attractiveness for developers to build on Substrate and plugging into the Polkadot system to gain interoperability and certain security benefits. Ethereum and Polkadot are able co-exist together and perhaps the question of how both protocols can further the progression of the ecosystem as a whole is one we should be asking instead.
Experimentation with DAOs
While many believe that 2019 is the year for stablecoins, which may hold true, DAO experimentation is making strong headway. Having specific DAOs that only run experimental governance methods can be important tools to guide collective understanding about how best to coordinate ideas and action between numerous stakeholder groups. Their overall aim is to identify what effectively makes DAOs run better. How can DAOs be used effectively for this purpose and how can we ensure that participation is incentivised? Only last week, we saw the release of Aragon’s Agent that essentially allows any DAO to interact with any Ethereum-based smart contract as well as DAOs to interact with one another. This is one of numerous building blocks in the experimental playground we should see in the coming months and it will be fascinating to see what types of DAOs will be optimised most to encourage certain forms of behaviours. The answer? Currently unknown.
Edgware, which is built on top of Substrate that is intending to be used as a test net for on-chain governance. Within Edgeware, there are several layers in the governance stack including treasury, voting, and identity. Core network developers can propose and create upgrades for scalability and security while stakers and validators are able to earn tokens for block production. In the future, it is likely we will see further functionalities in multiple choices beyond binary choices as well as zero-knowledge proofs (ZKPs).
Furthermore, I’m seeing experimentation within the DEC universe too. DAOStack. The dxDAO from DAOStack is being implemented for the DutchX trading protocol initiated by Gnosis, a decentralised exchange for ERC-20 tokens. In other words, the trading protocol for the DEX will be governed wholly by the community. Anyone is able to participate in the governing process by locking in ETH or other ERC-20 tokens that are traded on the DutchX protocol. The 0x team are also leading the governance space for DEXs by allowing 0x token holders more power to secure and upgrade the network over time.
Arguments for on-chain and strict off-chain governance have been copious with some arguing that decentralised governance can never meaningfully exist void of any politics.
What is clear is that decentralised finance still lacks foundational decentralised infrastructure. DAO experimentations may help probe the question of whether or not the two are not mutually exclusive, allowing for on-chain governance mechanisms to be implemented (e.g. lock-duration, adaptive quorum biasing, quadratic voting, split votes) while also creating certain signalling modules (e.g. non-binding voting options). It is hard to know exactly what signalling modules and on-chain governance mechanism will be effective over time over time but this represents the exact reason why DAO experimentation can be so powerful especially when off-chain components are considered in the mix.
The off-chain on-chain governance debate has always puzzled me when you consider that a topic is not binary, but rather lies on a spectrum. There will quite clearly be cases that will fit more into one of the buckets over the other. If we agree that both frameworks can work in unison, what is perhaps more meaningful is determining whether off-chain modules can support increasingly complex decentralised on-chain modules from an incentivisation perspective. Can both of these target separate areas of a blockchain’s governance effectively?
Zero-Knowledge Proofs
Zero-Knowledge Proofs (ZKPs) have been written about extensively but how they are evolving as an incredibly useful tool has been less of a focus, likely because it is constantly changing. Beyond allowing for private transactions, reducing the size of blockchains, indirectly increasing scalability, ZKPs are an incredibly interesting technology to enable cross-asset interoperability. To see the reason why, if a developer wants to build a privacy-based dApp using ZKP but wants to interact with zero-knowledge assets in the ecosystem, then interoperability is necessary to do this. Aztec Protocol is one project that is allowing for such tools to be implemented.
The second area for consideration is the creation of developer-friendly tools. Customisable confidential transaction semantics are going to be increasingly more relevant for confidential digital transactions. Flexibility for blockchain developers must extend to the realm of privacy. If a developer wants to create a private token, they must be able to define all of the logic and customise the privacy features very much like customising an ERC-20 token. Aztec Protocol is testing a wide range of AZTEC proofs developers can choose from, such as simple unilateral value transfer, bilateral transfer, and dividend payouts. Further, governance mechanics with privacy at its core can be achievable by Aztec’s efficient range proofs.
Aztec Protocol has recently formed a partnership with Ren, integrating AZTEC into Ren’s ZK transaction layer. RenEx will represent the first decentralised exchange that offers completely private value exchange using Aztec’s based zero-knowledge tokens. These tokens can be traded without revealing the actual trade or the value within the order book.
In other areas, projects like IDEN3 are approaching ZKPs with off-chain scalability for identity infrastructure. ZKPs for identity infrastructure can be run by having identity claims being sent a signed tree root off-chain to relayers.
ZKPs are quickly allowing for platforms such as Ethereum to enable complete private transactions for real-world financial applications including existing financial institutions. What happens when ZKPs are commonplace across smart contract platforms and developers are allowed to easily integrate privacy features into their applications? Having privacy features is de facto no longer a selling feature for smart contract platforms —in the future, a highly interoperable blockchain ecosystem where developers can choose specific parts of their application to run on specific blockchains further points to this inevitable outcome.
Oracles for smart contracts
Current (scriptable) smart contracts have come a long way since the days of opcode smart contracts and simple bitcoin multisignatures, but there are still certain widespread limitations — namely their lack of connection to real-world data. By extension, there is as strong desire create a bidirectional relationship between smart contract execution and real-world events. Most people think of real-world data being fed as an input into a smart contract but the smart contract can equally trigger an event in the real-world based on these data inputs (e.g. payment through paypal).
Chainlink have been working on providing end-to-end smart contract reliability with the addition of oracles. They have envisioned a world where developers will need the flexibility in choosing how many oracles they want to guarantee the validity of a real-world data input. Developers are given this freedom in order to give them flexible pricing. More oracles in the Chainlink network = higher cost.
At the moment, the first big step for Chainlink is utilising multiple nodes supporting input data (i.e. multiple data sources, multiple oracles nodes). The next and most progressive phase in oracle infrastructure might be the use of specialised hardware such as Intel SGX within the oracle network layer where the hardware can talk directly to the application with its own segregated resource. There are some notable benefits. Firstly, data can be delivered to node operators off-chain which means an oracle operator or multiple Chainlink nodes can never know what data they are processing. Furthermore, developers are able to send private smart contract transactions off-chain when delivering the same data on-chain would be too costly. Secondly, private keys that only a specific contract can use can be housed within the TEE meaning an Ethereum contract can control a Bitcoin address that can sign multi-signatures. This Ethereum contract now has interoperable capability to other private key based resources based on certain commands in the contract.
It remains to be seen how practically effective TEEs will be in a complex web of multiple oracles using specialised hardware but the theoretical benefits are limitless. For example, random number sequences can be generated in highly secure TEEs and sent to a smart contract that requested it. What is even more powerful is that the TEE is able to prove the number was generated fairly from the random number generator code by providing a signature. This can be performed with more than one oracle node for a smart contract, thereby increasing the level of decentralisation that is desired by the smart contract creator.
Meta-transactions
While meta-transactions might be well known, their power cannot be overstated enough. Meta-transactions are a way of paying miners through an identity proxy smart contract or a secondary network. This proxy smart contract can parse instructions after it sends a transaction to a third party and execute my commands. This all means that one is able to interact with the blockchain from accounts that do not hold any Ether. There is one transaction for pickup/claim all completed by Relay.
Nick Dodson, Founder of NickPay, showcased how meta-transactions can be utilised when sending Ethereum to another individual through just a simple email. Essentially, an individual can retrieve their funds at any point using a meta-transaction but the claims can also be set to have an expiry date which dictates the funds have to be used by the recipient in a time frame or they are simply directed back to the sender. The beauty of all of this is perhaps most apparent when claimants are able to leave their received funds within a meta-transaction (the assets are claimed to them now) but can freely send their newly received ERC-20 tokens without the need for gas — It makes little sense to send someone tokens where they then cannot send (use) their assets themselves without having to go through the hardship of acquiring Eth for gas for sending those assets. It’s an end-to-end solution.
Platforms for smart contracts that utilise stable digital currencies as native can allow for an unlimited number of use cases, including lending and insurance. Moreover, developers will also now have the benefit of knowing gas costs fixed in USD terms if stable digital currencies like DAI are used.
The use cases also extend further. Games, such as EthBattle, allow people to play and win crypto games with only having metamask installed while not having Eth sitting in their wallet. Identity platforms like uPort can confirm an identity by users sending gasless transactions to a target dApp address.
While meta-transaction infrastructure is still in its infancy, we are just finding out how such infrastructure might be to help the ethereum ecosystem and reduce friction in a plethora of different ways.
Disclaimer: the content within this article does not constitute any investment advice.
Twitter: @_LewisHarland_
