Ethereum biweekly vol.49: Ecosystem and projects’ updates, development tools and research articles

Published in

Paradigm

21 min readAug 4, 2020

21st July — 4th August. Meet Medalla multi-client testnet, Eth2 validator launchpad announced, Celebrating the 5th Anniversary of Ethereum, Teams submit solutions for Reddit’s scaling competition, Augur V2 goes live, Coinbase launches Dai rewards and much more!

Greetings, Ethereum family! These weeks have been a kind of wild ride, as Ethereum has reached so many milestones!
First and foremost, last week, we celebrated the 5th anniversary of Ethereum genesis block — and what a five years it has been! Our congratulations to the team! Keep it up!
Furthermore, after months of hard work from the Eth2 research team, along with Consensys and DeepWork Studio, the Eth2 validator launchpad (testnet version) has been released. The team released it last week so that you can keep track of, and make deposits into, the upcoming Medalla multi-client testnet later today, on August 4th. And they’ll continue to fine-tune the interface in the run-up to mainnet launch. Check more info on Medalla multi-client testnet, beta attacknets launch, updates on the eth1 <> eth2 merger and more in Danny Ryan’s latest Eth2 quick update. As Danny explains, Medalla will be a properly open beacon chain network with wide participation encouraged. It will be as close as possible to mainnet spec (with the obvious, and rather significant difference that participation is free: only testnet Eth is at stake.)
It was a pretty significant time for the ecosystem too. 22 projects and teams submitted their scaling implementations to Reddit’s scaling competition including StarkWare, Fuel Labs, MatterLabs, and more. The Augur V2 protocol contracts have been successfully deployed to the Ethereum mainnet. Bancor v2 launches. MakerDAO hit 1 billion USD in value locked up. As a result of an Executive Vote, MKR holders have accepted MANA (Decentraland) as a new collateral asset in the Maker Protocol. Coinbase customers in the US, UK, Netherlands, Spain, France, and Australia can now access a 2% APY on their Dai through Coinbase. Yearn.finance v2 announced. The yield dollar from UMA can now be minted by staking WETH as collateral which means that traders can leverage their long positions on ETH with a fixed interest rate. You can now track the entire DeFi market from the same place as your portfolio on Zerion. The Aave team introduced their new tokenomics upgrade proposal this week which includes key things such as a migration from LEND to AAVE at a 100:1 basis, the introduction of a safety module, liquidity mining and more. Synthetix released an update announcing that the Synthetix Foundation has been decommissioned and the protocol is now under the control of three distinct DAO’s: the protocolDAO, the grantsDAO, and the synthetixDAO. You can now trade thousands of tokens using Dharma’s Uniswap integration and pay zero gas fees while doing so. Dether protocol is on mainnet. Gnosis Safe multisig mobile beta announced. The Graph launches incentivized testnet. And much more!
And last but not least, Justin Drake announced this week that the Ethereum Foundation is building an internal security team dedicated to Eth2! Fuzzing, bounty hunting, cryptoeconomic modelling, applied cryptanalysis, formal verification — if any of these words mean anything to you, feel free to shoot an email to eth2security@ethereum.org with your application.
Ethereans, more to follow! Take care!

Development

GitHub metrics:

Developer activity (from Coinlib.io):

Protocol updates

Ethereum Core Devs Meeting #92 [2020–07–24]

Tim Beiko’s notes

Turbogeth public alpha — full sync in 2 days, 650 gigs disk space

Geth v1.9.18 bugfix release

A backrunning patch has been merged and is scheduled for Geth v1.9.19

Stationary behavior of EIP 1559 agent-based model

Backrunning has become an urgent network-clogging problem

Abstract networking away from Eth client?

Eth2.0 Call #44 [2020/7/23]

Ben’s notes

Eth2 Validator Launchpad Released: After months of hard work from the Eth2 research team, along with Consensys and DeepWork Studio, the Eth2 validator launchpad (testnet version) has been released.

Danny Ryan’s Eth2 Quick Update #13: Medalla multi-client testnet gets a date (August 4th), beta attacknets launched, updates on the eth1 <> eth2 merger and more in Danny Ryan’s latest Eth2 quick update.

Participtaing in the Medalla testnet? You can get a POAP for doing so.

If you’re looking for help with validating on Medalla, join the eth2 staker discord

Ben Edgington’s writeup of the genesis process of Eth2’s Beacon Chain

What’s New in Eth2–25 July 2020: Updates on phase 0, testnets, the usual great explainers, links to new media and more in Ben’s weekly Eth2 newsletter.

Strategies for protecting validator keys

Attacknets: bounties for taking down the testnet. Right now single-client attacknets live for Lighthouse, Prysm, and Teku. How Jonny Rhea scored the first take down

Eth2 spec v0.12.2 — mostly mild networking changes (will be used in Medalla)

Infura’s eth2 API conformance testing tool

Eth1 and Eth2 merger: working simulation of an eth2 client using eth1 client for block production:

Layer 2:

Submissions Roll In for the Reddit Scaling Competition: 22 projects and teams submitted their scaling implementations to Reddit’s scaling competition including StarkWare, Fuel Labs, MatterLabs and more. You can check out all of them here.

Connext’s submission on using channels between rollups

Matter Labs Introduces zkPorter: zkPorter is a new L2 scaling technique combining zkRollup and sharding in a highly scalable yet atomically composable blockchain network.

Rollup exits with efficient witness generation

Pessimistic rollup

Celer’s Hybrid Rollup is live on Ropsten testnet. DPOS Sidechain with optimistic rollup opt-in for devs that want more security

Comparing OMG’s More Viable Plasmachain to a sidechain

Development tools

Solidity v0.7 breaking release with lots of backwards-incompatible syntax and semantics changes

Truffle v5.1.37 adds syntax highlighting for Solidity v0.7

hevm adds symbolic execution features and a tutorial for using them

Academic paper benchmarking Eth security analysis tools

EthCode plugin for VSCode had a new release

Building an encrypted to-do list with 3Box tutorial

Fairmint opensources its linear bonding curve code

Any.sender fast and cheap transaction relayer API now has zero gas overhead and a library for unit testing

Loredana’s decentralized spreadsheets demo in her lisp-like language, Taylor

How to create a Defi dashboard with TheGraph and GoogleSheets

Paul Berg’s Solidity template for his favorite toolstack: Buidler + Typechain + Ethers + Waffle + Solhint + Solcover

NomicLabs/Buildler’s initiative to improve the Eth developer experience, funded by EF

Truffle v5.1.36 — debugger stacktraces with contract addresses in the printout

Using Buidler with Truffle

WalletConnect v1.1 — i18n support for Spanish, French, German, Portuguese, Korean & Chinese

In-depth guide to testing Eth contracts

Designing unbounded lists in Solidity

build an ERC721 contract Factory with Webflow and DappHero video tutorial

Create-eth-app v1.3 — ethers v5, adds Maker, Kyber, Synthetix, Uniswap v2

Governance and new standards proposals

EIP2844: Add DID related methods to the JSON-RPC

EIP2831: Transaction Replacement Message Type

EIP2803: allow transactions from externally owned accounts to execute bytecode directly

Micah Zoltu doing lots of EIP cleanup moving into last call, final, withdrawn, etc

Follow the EIPs repo.

Ecosystem updates

Last week, we celebrated 5 years since the mainnet genesis block:

Miners pushed the block gas limit to 12.5m, so Eth’s max throughput is now 45 transactions per second. Barnabé’s analysis is that the gaslimit increase did not lower gas prices

Ethereum has a 54 day streak of more transaction fees than Bitcoin:

Check out this very cool txstreet transaction visualizer

A simple and easy interface to cancel pending transactions

Ethereum.org is now available in 30 languages

Ethereum.org Translation Program: Milestone and Updates: 467 volunteers from 52 language groups have helped make ethereum.org accessible to non-English speaking communities in their mother tongues.

Ethereum Cat Herders Update #26: Updates on client diversity, state bloat, Medalla testnet, Eth2 attacknets and more.

Dex volumes are threatening to pass centralized exchanges

Videos from the EEA’s Ethereum in the Enterprise conference

Securing enterprise chains with Luna HSMs and PegaSysPlus v1.2

Hyperledger Besu v1.5.1

“Ethereum now settles significantly more value per day than Bitcoin”:

Blocknative’s analysis of the transaction pool on March 12

Visa on its blockchain approach — it says they’re network agnostic but most of the post implies Ethereum

Gas Gambits — Game Theory Example of Incentivized Collaboration

The Ethereum Scaling War Effort

Gitcoin Grants Round 6 Retrospective

Balancer Thesis From Placeholder

Projects updates

0x:

The 0x Exchange Proxy: Bug Bounty: The 0x team announced a bug bounty for the 0x Exchange Proxy. The program is open to participation from anyone.

Matcha:

Matcha.xyz crossed $50 million in volume since launch thanks to a monster $9.5 million trade:

How Matcha finds the best prices for DeFi traders.

Aave:

July Update: Half Billy, Credit Delegation, and Aavenomics: July has been a wild ride for Aave team as they’ve reached so many milestones! Market size looking like a million bucks (well, more like $500M!). They also dropped some plans for native Credit Delegation, which will open up DeFi to the rest of the financial debt market, making DeFi a source of liquidity interoperable with OldFi. The team had some exciting new features and listings: $ENJ and $REN were added to the Aave Market as well as a Fiat to Crypto onramp powered by Transak. Last but certainly not least, the Aavenomics was released, an important step towards putting the decisional power in the hands of the Aave community.

Augur:

Augur v2 launched on July 28, 2020 and then relaunched with no more GSN/new account fee.

Augur v2 launched on Tuesday, July 28th. After the first hour it became clear that the user onboarding process was too complicated and expensive. The intent was to provide a solution for onboarding new and non-native crypto users, allowing them to trade with only DAI and abstract ETH away from their experience. In practice this “solution” resulted in unexpected consequences in user onboarding causing a difficult and frustrating experience. We heard you, we agreed, and we worked relentlessly over the past 72 hours to fix it.

Augur v2.1.7 Release:

The Augur Master Plan (Part 2):

Create beautiful easy to use mobile-first interfaces
Create open-source tools that make it easier for liquidity to form
Bring the offline social betting experience online through comments and chat
Now that the team has built a core platform that people can use, focus on growth and user activation
Build an open-source betting view for Augur, so it’s accessible to bettors in addition to traders

Bancor:

The Bancor v2 smart contracts have been successfully deployed to the Ethereum mainnet. BancorV2 offers a solution to the Key challenges holding back Automated Market Makers — namely impermanent loss, multi-token exposure, low capital efficiency and high opportunity costs for lenders.

Bancor v2 core contracts:

Bancor v2 features include:

Single-token exposure (100% exposure to a single asset)
Impermanent loss mitigation
20X liquidity amplification

More on Bancor v2 mechanics

How Bancor v2 Works:

Brave:

bitFlyer Partners with Next-Generation Privacy-Protecting Browser Brave.

Brave and Guardian Partner to Integrate Brave iOS Browser with Guardian Firewall + VPN, to Power the Fastest, Safest Browsing Experience.

Update (Six Months of Data): lessons for growing publisher revenue by removing 3rd party tracking.

Coinbase:

Coinbase Launches Dai Rewards: Coinbase customers in the US, UK, Netherlands, Spain, France, and Australia can now access a 2% APY on their Dai through Coinbase.

How Coinbase handled ETH network congestion on August 1, 2020

Coinbase continues to explore support for new digital assets

Who should join Coinbase: Builders

Around the Block #7: Understanding yield farming and the latest developments in DeFi

Compound:

Governance Updates, Delegate by Signature, HAL Q&A

Two new proposals have passed through Compound’s governance system since the last newsletter, with both passing almost unanimously.

Proposal 17: REP Migration

Status: Executed July 24th, 2020
Proposer: blck
Voting Results: 757,201 For and 1 Against
Summary: Ahead of the launch of Augur v2 on July 28th, blck has initiated a process of deprecating REPv1 on Compound. The proposal disincentivizes the use of cREP by disabling supply and borrow functionality, disabling COMP distributions, and setting the reserve factor to 100%. Users are encouraged to wind down outstanding cREP positions, as a potential fork event is likely in the near future. Read the community discussion on the proposal here.

Proposal 18: Upgrade cDai Interest Rate Model

Status: Executed July 28th, 2020
Proposer: Dharma
Voting Results: 895,108 For and 1 Against
Summary: Following a previously failed proposal (012) earlier in July, this proposal from Dharma makes three changes to the interest rate model of cDAI: Increase the supply APY from 15% to 25% at 100% utilization, change the utilization rate ‘kink’ from 90% to 80%, and increase the slope of the interest rate curve before the ‘kink’ (gapPerBlock from 2% to 4%). Read the community discussion on the proposal here.

Join the Compound governance discussion on Comp.xyz, or delegate your COMP voting rights to the delegate of your choice. Leading delegates can be seen on the Delegate Leaderboard.

Delegation and Voting with EIP-712 Signatures

Compound protocol governance features EIP-712 signature functionality, which enables users to sign a delegate or vote transaction for free, so a third-party can and write the transactions to the blockchain for them (and pay the gas fees).

This functionality is powerful. It enables, for example, third-party protocol politicians to request signed transactions from other COMP-holders, and aggregate voting power to have a greater influence on Compound governance.

To learn how to build a user interface that takes advantage of this functionality, see the developer guide for Delegation and Voting with EIP-712 Signatures on the Compound blog.

Read HAL Q&A. HAL is a 1-click-setup IFTTT for Ethereum, featuring dApp-specific integrations with webhooks, Discord, Slack, Telegram, Twitter, and emails. Using new Recipes you can create and share your favorite triggers in a new and collaborative way! We also created the @compoundgovbot on twitter, which automatically tweets when there are on-chain events related to Compound’s governance system.

Dharma:

Dharma integrates Uniswap: the team introduced *the most powerful way to trade assets in DeFi, right from your pocket.*

Trade all 2000+ tokens in Uniswap
Pay Zero Gas Fees
And for a limited time, they’re waiving the trading fee as well

Gitcoin:

Announcing APOLLO (Gitcoin x Filecoin)

Gnosis:

Gnosis Safe Multisig Mobile (Beta) announced.

You can now stake SNX, mint and burn sUSD, and claim staking rewards through Gnosis Safe apps.

Gnosis Bug Bounty launched: Find bugs, get rewarded. Earn up to $100,000 for every bug you report. Head here for more details.

An Omen of Things to Come: Future Updates: What a month it’s been since Dxdao launched decentralized prediction market Omen! Read through the full report.

There is a big fight on Kleros over how an Omen market should resolve.

Golem:

Summary of the Golem AMA July 2020: the summary of the bi-monthly Reddit AMA, July 2020.

Graphene v1.1 has been released! The Graphene v1.1 release marks the second stable release of this promising project done in collaboration with Intel, ITL, Texas A&M and UNC. It’s a snapshot of the latest features and improvements since the last major release, v1.0, September last year.

Keep Network:

75,000 KEEP Awarded to PleBTC in Festival Hackathon.

Kyber Network:

Kyber Network Live Q&A: Chainlink Integration, Decentralized Oracles, & The Future of DeFi

V-ID (VIDT) is now available on Kyber Network

renBTC is now available on Kyber Network

Maker DAO:

Making Maker: July 2020: In July, MKR holders accepted Decentraland’s MANA as a new collateral asset into the Maker Protocol, and several votes on asset debt ceiling increases were held. Details are in the Governance section.

Executive Vote: Reduce the Base Rate, Whitelist DyDx on the ETHUSD Oracle: The Governance Facilitators and the Maker Foundation Smart Contracts Team have placed an Executive Vote into the voting system which will enable the community to approve the following alterations to the protocol.

Reduce the Base Rate: As per the weekly Base Rate poll the Base Rate meta-parameter will be reduced from 0% to -4% if this proposal passes. Stability Fees are calculated from the Base Rate and Risk Premiums using the formula Stability Fee = max(Base Rate + Risk Premium, 0%).

Whitelist DyDx on ETHUSD Oracle: As per the MIP10c9-SP5 poll that took place under the weekly cycle DyDx will be whitelisted on the ETHUSD Oracle if this proposal passes.

Increase the ETH, USDC-A, USDC-B, W-BTC, BAT debt ceilings: The Interim Risk Team has placed an Executive Vote into the voting system which will enable the community to approve the following alterations to the protocol.

MANA Approved by Maker Governance as Collateral Type in the Maker Protocol: As a result of an Executive Vote, MKR holders have accepted MANA (Decentraland) as a new collateral asset in the Maker Protocol. The token can now be used to open Maker Vaults in order to generate Dai.

Executive Vote: Approve Monthly Governance Cycle Bundle, Increase the ETH Debt Ceiling.

Executive Vote: Lower the USDC-A Liquidation Ratio and Approve a New Gitcoin Light Feed Key: The Maker Foundation Governance Facilitator has placed an Executive Vote into the voting system, which will enable the community to lower the USDC-A Liquidation ratio and approve a new Gitcoin light feed key: Lower the USDC-A Liquidation Ratio to 110% This will lower the USDC-A Liquidation ratio from 120% to 110%. Note, there will be no […]

MakerDAO becomes first DeFi protocol to hit $1bil locked:

Melon:

The Melon DAO reached quorum on a vote to lower the AMGU price by 80%:

Ocean Protocol:

Filecoin Storage integrated with Ocean Protocol by Protofire

Should Product-Market Fit Come Before Tokens?

OMG Network:

Raiden Network:

The Wolpertinger is here. Raiden Network have released version 1.1.1 of the Raiden client. The new version includes:

Updated the WebUI version
Add `/contracts` endpoint
Add minimum required balance for MonitorRequest
Some bugs were fixed

Raiden Weekly:

Set Protocol:

Macro-Focused Hedge Fund, Davoa Capital, on Finding Hidden Opportunities — Set Social Trader Spotlight

Techemy Capital — Set Social Trader AMA Series

Set releases the Fixed Income Proxy Set by Moonquant Capital:

Davoa Capital as a new social trader on TokenSets announced:

Status:

Privacy — The Power to Selectively Reveal Oneself to the World

Ethereum 2.0 — What’s the Score?: The scheduled Ethereum 2.0 implementation will result in better Scalability, Security, Fairness & Usability for the network. This article explores how & why.

The Status Network Quarterly Report — Q2 2020: Highlights of ongoings around Status Network in Q2 2020 — a tour through The Status Network looking at all of the recent news — across development, community, and ecosystem.

Roundup: Status All-Hands Roadmap Planning Workshop

KyberDAO and KNC Staking in the Status App

The Case for Pseudonymity

Storj:

July 2020 Development Update from Storj Labs

Remote Work Blog Series Reducing Meeting Bloat Across Remote Teams

Remote but Not Alone

Managing Remote Teams

Synthetix:

Roadmap Update H2, 2020: A summary of what you can expect to see from Synthetix for the rest of 2020

State of Synthetix H2 2020: Synthetix founder Kain Warwick on the current state of Synthetix

Silver product release: All the updates the frontend team has launched last week

Everything you need to know before participating in the second Ether collateral trial: Key information before you open an sETH loan

Staking SNX is now available for Gnosis Safe wallets! How you can use a multisig Gnosis Safe to stake SNX

The Spica release: A summary of what’s being deployed in the Spica release

Synthetix Foundation Decommissioned: The transition from the Synthetix Foundation to 3 distinct DAO’s

iETH migration summary: A summary of the events concerning the iETH staking incentive

SNX to be listed on OKEx: Information about SNX’s listing on OKEx

Also, Synthetix also announced that institutional liquidity providers such as DTC Capital, Three Arrows Capital and ParaFi have joined the platform.

Zilliqa:

Exclusive Zilliqa NFTs Up for Grabs via 48-hr Twitter Contest

Mintable’s NFT Marketplace on Zilliqa now open for business. You can now monetise and trade unique digital assets through Mintable

The future of Fintech is here, and you can contribute

Other project’s updates:

Dether protocol is on mainnet: peer-to-peer cash-to-crypto on/off ramp

MyCrypto and Binance return 10k to phishing victim

1inch passed 1 billion USD in volume and Silicon Valley’s Russ Hanneman made 1inch a “3 comma club” video

New Zerion Launched: You can now track the entire DeFi market from the same place as your portfolio on Zerion. Explore trending liquidity pools, Sets, crops and more.

Rotki v1.6.0 Released: This new version now has support for Aave, balance overview for all DeFi protocols, ENS support and a redesign of the accounts & balances page.

Yield Dollar Now Live: The yield dollar from UMA can be minted by staking WETH as collateral which means that traders can leverage their long positions on ETH with a fixed interest rate.

RAI Now Live on Kovan: The RAI reflex bond is now live on the Kovan testnet for the community to have a play around with.

dForce is back doing a similar yield aggregation

How to protect yourself against hacks with Nexus Mutual

YFI and forks had quite a week: a fork called YFII catching fire in China before getting removed from the Balancer UI, YFI started farming YFII and dumping it, and then a different fork (YYFI) was a scam where the owner drained the Balancer pool

Yearn.finance v2 Announced: Yearn.finance v2 has 3 main components; yVaults, Controller and Strategies. You can read the full details here.

The official yEarn governance forum was also announced.

mStable EARN Goes Live: EARN consolidates all of mStable’s incentivised liquidity pools into one place, and lets anyone track their Meta rewards in real time.

FuelPlaysPokemon Demo Now Live: Fuel Labs created a demo of their optimistic rollup technology using the infamous TwitchPlaysPokemon game — check it out here.

Loopring Monthly Update — 2020/07: Updates on on-going audits, hummingbot, new pairs and liquidity mining added to the exchange, advanced orders added to the relayer and more.

UMA’s Liquidity Mining Program Now Live: Farmers can earn UMA by providing the yUSD “Yield Dollar” token into a 50/50 yUSD <> USDC pool on Balancer.

The Graph Launches Incentivized Testnet: The Graph’s incentivized testnet, Mission Control, is a competition where Indexers can operate nodes, complete missions and contribute to improving The Graph Network ahead of mainnet launch.

KeeperDAO Raises Seed Funding: KeeperDAO raised a “seven-figure” seed round led by Polychain Capital and Three Arrows Capital.

Introducing Short DAI: Using InstaDApp, you can create a short position by up to 14x via a Maker USDC Vault in a single click without price volatility risk.

Introducing Boardroom: Boardroom is a universal governance dashboard and SDK for DeFi and cryptocurrency protocols.

EPNS Whitepaper Published: You can now read all about the technical aspects of the Ethereum Push Notification Service in their shiny new whitepaper.

Reality Cards Update: Two new markets now live along with minor changes to the platform.

Luxor Released: Luxor is a decentralized data spreadsheet that includes support for Ethereum. You can watch a demo video here.

Turbo-Geth Public Alpha Now Live: You can check it out here.

🔥_🔥 Introduced: 🔥_🔥 is a collective of passionate crypto natives fully entrenched in the web 3 world, designing strong token economic and governance systems for major players in DeFi and beyond.

Opinion and research articles

Vitalik’s fully homomorphic encryption explainer

An Efficient CBC-Like Finality Gadget for 99% Fault Tolerance

The Eth 2.0 Economic Review

A proposal for an Improved Mechanism for ETH 2.0 Staking, intended to protect the protocol from very large fluctuations in Eth prices. EIP here.

Afri updated his client benchmarks.

Hsiao-Wei did some analysis of Ethresear.ch activity over the years:

Podcasts

Vitalik Buterin on Ethereum’s Five-Year Anniversary on Unchained

Camila Russo on the Most Pivotal Moments in Ethereum’s History on Unchained

MetaMask: The Gateway to Ethereum on Into the Ether

Axie Infinity: A New Paradigm in Gaming on Into the Ether

Investing in DeFi | Joey Krug on Bankless

Balancer: The Automated Market Maker Protocol for Programmable Liquidity on Epicenter

UMA: The Open Financial Platform for Building Synthetic Assets on Epicenter

Stani Kulechov talks Constant Innovation, Credit Delegation and Cross Chain Aave on Ethereum Entrepreneur Podcast

Unchaining Interoperability with Loong Wang of Ren VM on POV Crypto

🎙️ Check out Paradigm’s METACAST: Top Crypto Podcasts of July 2020.

Finance

Information from Etherscan.io:

Roadmap

Vitalik’s eth2 and beyond flow chart:

An annotated version of Vitalik’s Eth2020 roadmap.

To date, the Ethereum network has undergone eight hard forks, including Byzantium and Constantinople — sub-sections of the massive Metropolis upgrade.

Check out the original timeline for the Ethereum development stages and the intermediate hard forks here.

Eth2 — Serenity

Serenity is the last stage of Ethereum development. It will introduce Eth2, the new Ethereum blockchain that will finally have Casper, a new Ethereum Virtual Machine, and much more. The goal of Serenity is to improve the scalability, security, and programmability of Ethereum. Instead of 15 TPS on a single chain, Eth2 will process thousands to tens of thousands of transactions per second without compromising on decentralization.

The majority of developers foresee these main phases of Eth1’s evolution to Eth2:

Phase 0: Beacon Chain (Q1 2020)
Phase 1: Shard Chains (2021)
Phase 2: eWASM (New Ethereum Virtual Machine) (2021/early 2022)
Continued Improvement (2022)

Phase 0 — Beacon Chain Shipping in late Q2/early Q3 of 2020

On the beacon chain, we will finally see Casper. The Beacon Chain will be a separate blockchain from the main Ethereum blockchain. This new chain will have a PoS consensus algorithm, and it will run in parallel to the main PoW Ethereum blockchain. Initially, the blockchain will be created for simplicity and will not support smart contracts or accounts.

Phase 1 — Sharding Shipping in 2021

Sharding will be introduced on the Beacon chain, and it will have initially 100 shards. Validators will validate transactions from their own shard, and in the first phase, they won’t approve any smart contract, account or asset.

While sharding will bring more scalability, there are a few setbacks to take into account. Validators have a small pool of transactions to validate, which makes it easier for a 51% attack, as they only need 51% computing power (or stake) of the shard they are in, instead of the whole network. This technique can also lead to higher centralization, as each shard can be validated with a small group of validators.

It will be fascinating to see how this stage is implemented, as it still needs thorough testing to ensure all validators are randomly selected to avoid centralization and any risk attack.

Phase 2 — State Execution Shipping in late 2021/early 2022

During Phase 2, the foundational aspects of the previous Eth2 releases will come together and provide functionality for the updated network. A new operational mechanism called Ethereum WebAssembly (eWASM) will be launched instead of Ethereum’s Virtual Machine. eWASM will work much faster.

One of the main issues with the current EVM is that it processes transactions sequentially. With the PoS and Sharding changes, there’s a need to process transactions in parallel, and the current EVM won’t be suitable for this.

The new EVM called stands for Ethereum WebAssembly, an open standard defining a portable binary code format for executable programs. This new architecture for the EVM will allow for much better performance and will make it possible to support smart contracts, accounts, states and much more on the new blockchain. The current status of the eWASM development is at the very early stages, as it is planned to be released in 2021. There’s still a lot of research to do around this phase.

Continued Improvement

Continued Improvement is the code name to encompass all the future changes, fixes and improvements of the previous stages, and whatever comes along. The following technologies to be implemented: