Ethereum's Path to Efficiency and Speed: A Challenging Journey with a Bright Future
Recently, Ethereum co-founder Vitalik published a diagram explaining the "Polynomial Commitments" method on Twitter.
(Image source: Vitalik's Twitter)
It is reported that Ethereum co-founder Vitalik's proposed Polynomial Commitments scheme aims to solve Ethereum's state explosion problem, with the goal of drastically reducing witness data for stateless Ethereum clients, approaching near zero.
So what exactly is the Polynomial Commitments scheme about?
Wall Street analyst Jacob offered this interpretation: "The problem Vitalik is addressing (i.e., the Polynomial Commitments scheme) involves adding powers of complex numbers to general elliptic curve codes to achieve greater confidentiality and larger scale, among other benefits. It's a great idea — following this approach, many new codes can be developed. For instance, one can select two encoding systems X and Y to form a Cartesian product (x, y) and a relationship P between x and y to create a new encoding system."
Explaining it from a mathematical perspective can be somewhat abstract, so let's look directly at the advantages of the Polynomial Commitments scheme: Most notably, data availability checks become easier and free from fraud, since we can simply make random requests openly. Non-interactive custody proofs may also become easier, thereby improving Ethereum's operational efficiency.
Throughout, the Ethereum development team has never stopped its efforts to improve Ethereum's efficiency. Vitalik began researching the switch to a PoS network back in 2015 and officially proposed the 2.0 plan at the 2018 Devcon 4 conference. Of course, completing the Ethereum 2.0 plan is by no means an overnight feat — according to the currently published roadmap, eWASM deployment is scheduled for 2022 at the earliest, and only when this new chain goes live will the complete version of Ethereum 2.0 be officially released.
Prior to that, the development team proposed Layer 2 — a comprehensive solution to enhance the performance of the Ethereum network (Layer 1). Under the Layer 2 framework, several specific solutions currently exist, including: Rollups, State Channels, Sidechains, Plasma, Validium, Hybrid Solutions, and more.
Here, let's briefly break down Rollups, which has been widely discussed recently. In essence, it打包s the large amount of trading data originally distributed across blocks into a single bundled trade and publishes it on-chain. To ensure the validity of each trade within, Rollups employs different mechanisms to maintain security consistent with Layer 1. From an operational perspective, the relationship between Rollups and Ethereum is quite similar to that between Bitcoin and the Lightning Network. Eric Wall, Chief Investment Officer of crypto hedge fund Arcane Assets, stated, "Rollups can enable Ethereum to achieve a transaction processing speed of 2,000–3,000 transactions per second."
As is well known, the current ETH main chain based on PoW consensus has a transaction processing speed of only 15–20 transactions per second, and network congestion and high fees caused by insufficient processing efficiency have long been a point of criticism. Especially after the rapid rise of DeFi, peak fees一度高达数百美元, not only preventing many large-scale applications from being implemented on the Ethereum network but also keeping many smaller-fund investors out of DeFi.
(Ethereum network daily average fees over the past year, data source: OKLink)
From the monitoring data on OKLink, we can see intuitively that between July and October 2020, as DeFi erupted, Ethereum on-chain trading fees also rose significantly. During this period, DeFi users often joked that "the money earned from mining wasn't enough to cover the fees."
Therefore, the EIP-1559 proposal that Vitalik put forward in 2019 has once again attracted heated discussion in the community. The proposal suggests reducing transaction fee volatility by burning the fees paid in ETH rather than distributing them to miners. Clearly, this proposal would hurt miners' interests, and pool operators have already voiced opposition: "This is like not tipping the waiter, and then当面烧掉小费来嘲笑他们."
Ethereum community KOL A-Jian also raised doubts: He believes that adding "fee burning" would effectivelyamount to imposing a相当高的所得税on Ethereum miners凭空, while due to the unpredictability of demand, EIP-1559 is very likely unable to make transaction fees more predictable or lower Gas prices, so it cannot create a better user experience. Despite the obstacles, the EIP-1559 proposal has been officially included in Ethereum's next major hard fork upgrade — the "London Hard Fork." Regardless of how miners view this proposal, some analysts believe this upgrade could push Ethereum's price higher and make it cheaper to use. In fact, after EIP-1559 was widely discussed, ETH's price did rise significantly. According to OKX market data, from March 7, 2021, ETH's price rose more than 30% over the following week, once approaching the $2,000 mark.
(ETH price trend, source: OKX)
Therefore, on the path to alleviating Ethereum network congestion, improving trading efficiency, and reducing fees, multiple approaches are still needed, seeking a balance of interests among all parties.
Shifting focus back to Rollups — if Rollups can push Ethereum's TPS above 2,000, the improvement to user experience would be like switching from an ox cart to a high-speed train. It also wouldn't harm miners' returns, making it seem like a better solution compared to the EIP-1559 proposal. But in reality, it's not that simple. Rollups are not a perfect, flawless solution. Like the Lightning Network, this method of bundling off-chain and then placing on-chain has also raised concerns about security and trust — in other words, does this deviate from blockchain's decentralization philosophy?
On one hand, the community is brainstorming ways to improve Ethereum's efficiency at this stage; on the other hand, developers are moving full steam ahead with the Ethereum 2.0 upgrade.
According to DeFi Pulse statistics, the amount of ETH locked in DeFi has reached 9.3 million, representing an increase of over 300% compared to the same period last year, which also demonstrates the community's confidence in Ethereum's future to a certain extent.
Therefore, before the full realization of Ethereum 2.0, the development team and community must ensure that Ethereum is safe and decentralized, absolutely reliable and trustworthy, while also improving transaction processing speed as much as possible, continuously growing the on-chain ecosystem, and retaining project developers and traders — this is indeed a formidable task.
However, as the leader in the public chain赛道, we have reason to give the Ethereum development team sufficient time and patience. Currently, the ETH 2.0 upgrade is proceeding as planned, and we have seen many highly innovative technical solutions, including the Casper consensus, sharding technology, and the new eWASM virtual machine — these are Ethereum's trump cards to maintain a leading edge in future blockchain infrastructure competition.
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