With the launch of Ethereum (ETH) 2.0 on the horizon, OKX co-hosted an ask-me-anything (AMA) session on June 17, inviting five ETH community leaders and builders and a panel of journalists to discuss the changes and expectations surrounding the upcoming upgrade.
The guests included ETH 2.0 core developer and co-founder of Prysmatic Labs, Raul Jordan, pioneer of ETH2 Multi-Client Testnets, Afri Schoedon, Loopring CTO Steve Guo, EthFans.org editor A Jian and Unitimes community partner Jason.
Other participants included journalists from Jinse, Cointelegraph, Chainnews and O’Daily, alongside Gattina from OKX Pool and Esther from Ethereum.cn (ECN).
Introductions from the guests
Raul Jordan: My name is Raul Jordan, Chinese name 麥文龍, and I am the co-founder of one of the teams implementing eth2, called Prysmatic Labs. I am originally from Honduras, a poor country with massive inequality and systemic problems. I was fortunate enough to leave my small city to attend Harvard University where I studied computer science with the goal of making a difference but was not satisfied with the status quo of what to work on until I discovered Ethereum after receiving the Thiel Fellowship a few years ago.
I helped start a team of software engineers looking to make a difference for Ethereum’s scalability, and now we operate a large public testnet for eth2 on track to a mainnet launch. In my free time, I dedicate a lot of study to ancient Chinese calligraphy 書法 and language learning 粵語.
Afri Schoedon: I’m a software engineer with seven years of experience in blockchain technology. Originally from Berlin, I specialize in software project management, release management, repository organization, issue triage, road mapping, technical documentation, user support, and developer relations.
Previously, I co-founded the Görli Testnet initiative, known for their Görli Ethereum Testnet, which was launched live at GörliCon-0 in Berlin. Currently, he is coordinating the Ethereum 2.0 multi-client testnet efforts including the launches of the Schlesi and Witti multi-client testnets.
Steve Guo: Hi everyone! I am Steve, CTO of Loopring. Launched as a blockchain project in August 2017, Loopring protocol adopts zkRollup-based technology that allows developers to build high transaction throughput, low-cost, non-custodial, and orderbook-based decentralized exchanges on Ethereum. Loopring Exchange (Loopring.io) is the first DEX constructed based on Loopring protocol 3.0.
More than that, we also launched Loopring Pay, also supported by zkRollup, achieving instant transfer for free, so congestion and high transaction fee are off the table. Loopring now is not only a high-performance decentralized exchange protocol but a highly efficient decentralized payment protocol.
A Jian: I am A Jian. I work as an editor and translator at EthFan.org. Starting from 2015, EthFan.org was one of the earliest established Chinese Ethereum communities, that has been publishing articles to promote Ethereum technology and introduce the cutting-edge issues concerning Ethereum technology and ecosystem.
ETH 2.0 vs ETH 1.0
Question: Could you explain what Ethereum 2.0 looks like in plain words? How does it differ from the current eth1 main chain?
Raul: To me, eth2 is a total redesign of the Ethereum blockchain to maximize for decentralization, censorship resistance, and scalability at the same time. It takes all the earnings we have had over the past few years and turns them into a much more sustainable approach to achieve its original goal of becoming a “world computer”.
Danny Ryan said that eth2.0 is built for Ethereum, and finally, it will become Ethereum itself. Ethereum 2.0 is to build the base layer of the next-generation Ethereum blockchain ecosystem. Eth2 differs from the current Ethereum in two respects: 1) uses the PoS (Proof-of-Stake) algorithm to drive the blockchain operations; 2) improves scalability by “beacon chain + multi-shard chain” architecture.
In plain words, blocks in eth2 are not produced by PoW miners but confirmed and finalized by stakers who deposited their ETH. Besides, “beacon chain + multi-shard chain” architecture separates the state inside PoS and that of transactions. Instead of executing transactions, the beacon chain will handle finalization and communicate with shards. Shards could be considered as complicated blockchains resembling the current eth1 chain, which execute transactions.
ETH 2.0 roadmap
Question: It’s been years since the Ethereum 2.0 plan was initiated. There are many opinions and wild guesses across the community about its official launch time. Could you share with us the current development progress of Ethereum 2.0? What are the major challenges to be solved? And when do you expect Ethereum 2.0 to go live?
Afri: One could say it’s January the 3rd or July the 30th. But the truth is, it won’t be either of the dates. We cannot tell when the mainnet genesis will happen. This is because there are so many moving parts.
But I can give a realistic view of the open issues and milestones. First of all, all clients have to implement the final version of the spec, v0.12.1. Currently, only one client has a release out, and the other four clients are still working towards a stable release. We will see the first multi-client testnet with the final v0.12.1 spec be launched potentially at the end of this month.
If this goes well, we will be able to prepare the public multi-client testnet launch under mainnet conditions early July. This is the long-awaited milestone, sometimes mistakenly referred to as “official” multi-client testnet. But if it goes well, we can do the final public testing in July.
There might be a couple of smaller developer testnets on the side, but the main focus should be the public one. If the public multi-client testnet turns out to be stable over the period of two or three months, we can start working towards a real mainnet launch.
First of all, this requires a deposit contract. A ceremony to determine the contract that is to be used as the one and only bridge to ETH2 deposits needs to be held. How this will look like is not entirely defined yet. I know Carl is preparing that. We should ask him soon. I expect the earliest possible date for such a ceremony would be the end of August or rather mid-September.
Once the ceremony is done and the contract is deployed, technically the rush into ETH2 has officially started. Even without an official launch date, people could start making the first validator deposits on the ETH1 chain as this is an entirely permissionless process.
I would suggest scheduling the minimum genesis time for the beacon chain mainnet to be exactly 90 days after the genesis time of the official multi-client testnet. This would give us 8 weeks of testing and 4 weeks of buffer time in case we would have to fix something.
Regardless of the deployed deposit contract, we can always push back the genesis time for the mainnet if needed. But given the steps outlined above, the earliest possible mainnet genesis time would be somewhere in October. This does not take into account that we need at least 16k deposits before we see a mainnet genesis event. This could additionally take some weeks to ramp up.
So, to sum up…November if everything goes well. October if we are very optimistic and pushy about the date. Pessimistically speaking, it would be 2021 in case anything needs to be patched in the spec and adapted by all clients…I don’t think we will launch in December.
ETH 2.0 interoperability
Question: Interoperability has been one of Ethereum’s edges. I still remembered the “Interop Lock-in” last September, and I am excited to see eth2 clients communicate and sync with each other. The question for Raul is that is there anything more happening around client interoperability? And why client interoperability matters so much to eth2?
Raul: Client interoperability matters so much because that’s the way we can catch critical bugs in a single implementation. For example, if all of eth2 ran using our Prysm implementation, we would never find a critical problem regarding validator rewards and penalties that we have found thanks to client interoperability.
Multi-client testnet targets
Question: The multi-client testnet is considered to be the ultimate hurdle before we see real eth2. As the initiator of eth2 multi-client testnets Schlesi and Witti, could Afri share with us the primary targets of multi-clients, and Witti’s current running state?
Afri: The first phase of Ethereum 2.0, phase 0, is the beacon chain. The old ETH1 clients will not be able to run a beacon chain. For the first time, a variety of newly implemented clients will be working together on a brand new blockchain with a new, unique approach to networking and consensus.
Before such a mainnet can be launched, we need testnets that mimic mainnet conditions as good as possible. This requires us to have stable, long-term, and persistent testnets up and running that are supported by not only one client but multiple clients, ideally, all clients. The Schlesi testnet was one of many steps in that direction, the Witti testnet is another, and soon we will launch Altona.
Witti is running fairly stable. It currently has seen around 150k slots and good liveliness. The participation rate of validators is hovering at 71%.
All clients still experience bugs and introduce new optimizations. I suspect we still need a lot more multi-client testing.
Question: It’s said that the final multi-client testnet has to remain stable for at least 2 months before beacon chain release, so what are the indicators for stability measurement? When is the public multi-client testnet expected to go live?
Afri: Indicators for stability are “no consensus issues” and “no permanent forks” obviously, all clients should agree upon the correct chain. Also, we need to finalize proper networking, there are a lot of rough edges and hiccups between the different clients. I hope we can ban ENR into the backend of the clients before we launch and have a proper multi-address format for wiring nodes.
Further indicators are attestations and validator activity. If we maintain above 80-90% activity and the chain stays in perfect liveliness with high finality, we should be good to go.
As I outlined earlier, the soonest possible launch date for a public multi-client testnet would be mid-July.
Layer 1 and Layer 2 scalability solutions
Question: With the eth2 development in full swing, we are seeing Layer2 solutions achieve the “basic” success as well. After the official launch of eth2, with the support of Layer1 solutions like PoS and sharding, Ethereum is heading into a new scalability epoch. The adoptions of Rollup techniques fuel the transaction speed while reducing the transaction fees significantly, bringing a much better experience to users.
As the CTO of Loopring, the first and ever decentralized protocol with working ZK-Rollup, could you please describe how ZK-Rollup is designed to optimize our user experience?
Steve: ZK in ZK-Rollup means zero-knowledge; Rollup could be considered as bundled transaction processing. Loopring chose zkSnark as its zk proof framework (tested by ZCash for years), with the smallest verifying data size so far, which means lowest on-chain cost. And zkSnark doesn’t require many off-chain computing resources to generate proofs.
There is a relayer system in ZK-Rollup. First, the relayer will organize all account information off-chain into a Merkle tree where the hashes are computed in pairs until we get the Merkle root hash. Given that any change in arbitrary leaf value results in a different root hash, the root hash will be the only display of the whole tree’s current state.
Then the relayer will collect a transaction set (transfer or buy & sell) off-chain and generate zk proofs for those transactions.
The proof generation process: the last stored root hash R1; every transaction is signed by users; update the Merkle tree according to those transactions, and verify the changes; get the updated root hash R2;
Finally, the relayer submits critical data (e.g. balance), zk proof and updated root hash R2 onto the blockchain. The pre-deployed smart contract will verify if the proof is valid based on the recorded root hash R1 and transaction data input. If it’s valid, the root hash R2 can be updated because the relayer has conducted honest changes to the off-chain Merkle tree.
Here lies the key point of this scheme, it slashes the resources consumption and improves the overall blockchain performance by only keeping data storage and zk proof verification on chain, and moving computations off-chain. And more importantly, the security and validity of processing asset off-chain can be guaranteed by on-chain verification, so that we don’t need to compromise security for better performance. Theoretically, Loopring could bear 2025 tx/s at a cost of $150 per million transactions with the same security level as Ethereum mainnet.
Question: Could Steve and Jason further share your insights on how the Ethereum ecosystem will benefit from the combination of Layer1 + Layer2 scalability? And what are the potential driving forces for DeFi?
Steve: The real application of Layer2 scalability is indispensable for the Ethereum ecosystem. Recently some fraud schemes lead to a surge in gas price, and the network has slowed down, which would be damaging for mass adoption of Ethereum. For example, Reddit has already decided to use Ethereum as its token distribution platform. With the tremendous user base of Reddit flooding onto Ethereum, the traffic would be too much for the network to handle.
Fortunately, Loopring has implemented a payment system, Loopring Pay, based on ZkRollup, which was officially launched on June 7. Now it has already supported 10+ token transfers on layer2 with zero fees, which helps mitigate issues like network congestion and expensive fees. While for DeFi apps, if we can handle transfers on layer2, then the layer1 bandwidth could be eased.
To begin with, it’s a matter of choice. The rising layer2 scalability solutions endow developers and users with more choices while avoiding the potential single layer2 failure. Take ZK-Rollup and Optimistic Rollup schemes for example. Seen from token transactions, ZK-Rollup is a better choice for DEX apps and users with faster transaction speed and settlement. Maybe that’s why Loopring adopted ZK-Rollup. While Optimistic Rollup is more friendly with the logical implementation of smart contracts, which allows developers to build more delicate DeFi apps. So we saw Synthetix with Optimistic Rollup. The more choices pop up, the more prosperous the ecosystem will be.
Secondly, at a higher level, the security and scalability of Ethereum improve. Layer1, the Ethereum main chain, serves as the basic security guarantee for data. On one hand, scalable layer1 improves on-chain data processing while lowering the possibility of spam transaction attacks. On the other hand, with more solutions deploying on layer2, layer1 can alleviate its scalability burden and focus more on the security side. That is, Ethereum will become more reliable while ensuring the user experience, which encourages more users to build on Ethereum, including DeFi apps, where security comes as a priority.
Thirdly, I’d like to talk about value capture and network effects. The combination of layer1 + layer2 enables Ethereum to cover the demands of most applications in finance or other spaces. With PoS and booming DeFi, there will be more staking assets on Ethereum, which might eventually make Ethereum the “settlement layer”. Meanwhile, greater network effects will come along with thriving finance, which would be strong positive feedback by driving further development of the Ethereum ecosystem including DeFi.
Staking economy in perspective
Question: It’s been known that when eth2 phase 0 happens, Proof-of-Work Ethereum will turn into a Proof-of-Stake blockchain where the staking economy will be a major player. What are your insights on the staking economy? How could various stakeholders participate in eth2 staking, such as average investors, miners, mining pools and DeFi services, etc.?
A Jian: Eth2 staking distinguishes itself from existing staking models due to its unique protocols. To decentralize, the protocol layer places many curbs on staking mechanisms, and this is exactly where service providers could come in.
Now, when speaking of Eth2, it’s more about the coming phase 0, which won’t bring disruptive changes to the whole ecosystem at once. So it’s totally fine to keep watching. I suggest that if you want to participate in Eth2 staking, understanding how its protocols are designed would be helpful for your assessments, no matter if you choose to DIY or use third-party services.
Jason: On the market side, staking behavior results in reduced ETH market circulation which will definitely stimulate a rise in ETH price. This is what all ETH holders would like to see. As integral parts in the Ethereum ecosystem, most average investors, miners and pools are driven by earnings. After all, stakeholders need to make ends meet in the first place, and then they can afford to sustain Ethereum’s growth.
Therefore, players in the Ethereum ecosystem will form a community with shared interests. Everyone is expecting Ethereum to play safe, which potentially empowers and pushes Ethereum forward.
A more straightforward way for average investors to participate is purchasing ETH, or staking their ETH via staking services provided by exchanges or wallets. If you want to run your own PoS node, it’s not that difficult.
This is what DeFi servers would like to see, as implementing fractional reserves is a little bit tricky. One thing is that managing your asset with DeFi is still risky. Moreover, other public chains are relatively smaller in volume, and sometimes staking earnings will fail to cover the loss when price goes down. However, maybe DeFi servers could see net earnings by staking with extra assets in their pools.
Raul: The staking economy, to me, will define the security of Ethereum. We wish to make staking easy for most people, including hobbyists that want to run a validator at home. If most staking only happens on a few centralized exchanges, we believe the chain will not be as secure or trustless as it should be. Most stakers can get started today with experimenting on eth2 by joining one of the public testnets. At Prysmatic Labs, we run a public testnet called Onyx that you can join here: https://prylabs.net and monitor here: https://beaconcha.in
Steve: Personally, I’m optimistic about Eth2 staking giving a boost to ETH price. And it’s likely more than 10 million ETH will be locked in staking. For average investors, there are three options: holding ETH; running staking nodes; choosing a staking pool.
I think there few users would prefer running their own nodes, as it requires some technical background and operation cost. The first or third option could depend on how many ETH will be staked by then.
Loopring is also considering providing our staking pool, as users will gain no excess earnings by leaving their assets in smart contracts. But by staking they will. However, we promise that users’ assets will still remain non-custodial via smart contracts, which means users have the right to know and control their assets.
Challenges in expanding the Ethereum community
Question: Our guests A Jian and Jason are representatives from Chinese Ethereum communities EthFans and Unitimes, which have been contributing a lot to domestic Ethereum education and promotion.
We wonder what are the challenges for community builders on the verge of Ethereum 2.0? What could be best practices to engage community members or even more mainstream population into the next generation of Ethereum?
A Jian: A big challenge lies in the complexity and durative roadmap of the Eth2 system, which requires more patience to tell what really matters at the current stage and what is valuable in the long term. Otherwise, there’s time reserved for us to popularize the complicated Eth2 system with more delicate efforts.
I think community builders should keep a good sense of the whole changing ecosystem, in order to deliver interesting and exciting stuff. Technologies might be dry, but there are always marvels and novelties happening around the Ethereum ecosystem. The ecosystem as a whole is diverse and fascinating.
Jason: The biggest challenge facing the Ethereum community is that currently there are still not many fans and contributors to the blockchain open source technology.
On the one hand, the technical threshold is a bit high, which means people should have a good mastering in various disciplines to better understand blockchain. On the other hand, such technology is too advanced to be popularized and even some are still biased towards it. Let’s say Ethereum, with the biggest and strongest developer community, still has a long way to go in building the Chinese Ethereum community.
One thing is that in the past few years, most users have been wandering in the secondary market for earnings, staying out of the Ethereum ecosystem construction. Moreover, it’s a bit hard for some potential Ethereum learners to get over the language barrier, lacking community maturity and rapid iteration of Ethereum technologies. Eth2 or Eth1.x might be around before someone understands Eth1. And in this case, we still need to carry forward education on Ethereum and developer community building.
Now we have EthFans, Unitimes, ECN and EthPlanet to work as Chinese community contributors. Eth2 is a brand new start which is also an opportunity for the Chinese Ethereum community to thrive. We still get plenty to do such as organizing online or offline seminars, workshops and developing educational resources.
Disclaimer: This material should not be taken as the basis for making investment decisions, nor be construed as a recommendation to engage in investment transactions. Trading digital assets involve significant risk and can result in the loss of your invested capital. You should ensure that you fully understand the risk involved and take into consideration your level of experience, investment objectives and seek independent financial advice if necessary
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