Five predictions for the Ethereum ecosystem in 2023

原文标题：《 2023 年以太坊生态 5 大预测 》

Original article by neworder

The company is DeFi  The way

Our five predictions for the Ethereum ecosystem:

The bear market is not over;

EigenLayer will be Ethereum's most significant innovation;

Blob deals don't fix scalability issues;

ZK-Rollups will not see significant traction in 2023;

Layer 3    Will be   Cosmos  A real competitor;

Image by Maze AI

First, the bear market is not over

2022 promises to be a big year for crypto. With institutional capital pouring into Crypto-focused projects, exciting new financial idioms being developed, and its legitimacy as an asset class growing globally, the industry appears to have changed dramatically. Unfortunately, these narratives are obscured by the main story: a succession of financial misdeeds, mostly at the hands of bad actors in power. The exposure of this widespread fraud, coupled with global monetary tightening, has sent the crypto market into an unforgiving bear market comparable to 2018.

For crypto,   2022 was the year that mercenary capital reigned supreme - entities as value extractors as well as players moving from one opportunity to another, seeking outsized short-term profits but not having any interest in engaging the community or building the infrastructure of the future. This exists among most stakeholders in the crypto space, from end users to liquidity providers to crypto VC - all of which are involved in various forms of carpet-pumping and dumping activities. These three implosions, however, put the industry in a bind:

Do Kwon's   Terra-Luna took an inherently flawed algorithmic stablecoin model and bribed people to use it for artificial collateral gains. The algorithm's stablecoin decoupling wiped out $60bn of market capitalisation and emptied the savings of retail investors around the world.

Three Arrow Capital (3  AC), founded by Su Zhu and Kyle Davies, is a currency arbitrage fund that borrows heavily to fund its directional crypto bets. When the heavily over-leveraged company collapsed in adverse market conditions, its billions of dollars of bad debt left a gaping hole in the balance sheets of lenders across the crypto landscape.

Finally, when SBF embezzled customer deposits, he lent them to his trading firm. Alameda Research  , FTX  The trading platform crashed. The collapse of its FTT Token led to billions of dollars in losses, and several lenders went bankrupt due to the losses.

So what does this mean for the crypto industry in 2023? First, we expect FTX position unwinding and widespread bad debt to continue to have a negative impact on the crypto market over the next full year. As bankruptcy and criminal proceedings proceed, CeFi and DeFi are likely to continue to find liquidity problems and bankruptcy issues in their services. Second, the breach of trust involved in this bankruptcy will severely hamper the regulatory process, investor activity and consumer confidence.

Look into the future

Despite serious setbacks in our industry, we are optimistic about the prospects for crypto in 2023. While mercenary capital has taken a toll on our credibility, our industry is also full of dedicated builders who put a lot of sweat into this burgeoning Web3 world. These are what we call "visionary capital," people who are still building when most industry speculators have moved on. They have invested a long time in bringing Web3 to the cusp of irreversible entry into everyday life. We see 2023 as the year of visionary capital and the year cryptocurrencies transform from speculative investments into a core component of society built around Web3.

To some extent, this shift is already under way. In DeFi Protocol integrated with traditional financial Systems, DAO  Between vaults accumulating real-world assets and traditional game companies breaking into Web3, one of the emerging narratives today is that the line between decentralized solutions and the real world is blurring. The process will only go on. 2023 is likely to be the year the Web3 project enters the mainstream.

To name a few. In an era where data breaches are ubiquitous, companies may start adopting decentralized identity technologies that allow users to keep their data for themselves. Consumer applications of blockchain technology will occur in media, where marketing, storytelling and gaming will merge to create immersive, interactive worlds. By building blockchain networks on top of existing power grids, utilities will be able to integrate distributed energy into new networks of new decentralized energy sources.

While none of this is news to crypto Natives, these examples represent the introduction of a large new user base and suggest that the closed world we've seen over the past decade is getting ready to go public. Behind these fundamental changes to our daily lives will be a wave of technological developments that will elevate the crypto's capabilities and prepare it for its central place in metacomverse life. These events are unfolding in real time, and in a summary of our expectations below, here are our predictions for how crypto and Web3 will leap forward in 2023.

EigenLayer will be Ethereum's most important innovation

One of the most significant differences in blockchain development is the degree of permission-free activity that can take place between the infrastructure layer and the application layer. Infrastructure upgrades and changes lag behind the application layer because application deployment is not permissioned, whereas core network upgrades are. Consensus, core, sharding, p  2  Changes in the p and middleware layers are based on the democratic vote of the specified parties, and the application is free to deploy and experiment on the core consensus logic.

Established and well-capitalized network systems require careful risk analysis prior to core upgrades or changes. This results in innovative solutions to consensus problems and core barriers being limited or lagging behind the market. Once the network of sovereign trust in the system is established, the protocol becomes very rigid and less likely to be innovated and upgraded. When innovative consensus mechanisms or middleware layers (e.g. Snowman, Chainlink  Or Nomad), there is no way to use the existing trust layer to run the new network in a permission-free manner.

In addition, new networks are often constrained by unavoidable capital boundaries. In order for a decentralized network to ensure the security of core consensus logic, it would need to be prohibitively expensive for malicious actors to self-enforce changes or control assets. Therefore, it is not enough just to have breakthrough technology, builders also need to find a large financial base for cybersecurity, which often becomes the biggest obstacle to infrastructure innovation.

Reward distribution further highlights the capitalization problem in network guidance. In the Ethereum verifier stack, 96% of the total award is allocated to the capital provider, while only 4% is allocated to the node operator. Far from being arbitrary, the distribution of rewards reflects the hidden cost of capital in a proof-of-equity (PoS) network. The implicit risk of mortgaging unstable assets for cybersecurity is fundamentally more expensive than running generic nodes that can be repurposed.

It is worth mentioning that the security of the boot core infrastructure is the primary consideration for a decentralized network. That being said, applications built on top of it are always limited by the least secure denominator in their infrastructure stack. Applications that include middleware layers protected by their own sovereign trust network, such as cross-chain Bridges and seers, are reducing the overall security of the system to the least secure dependencies.

In order to address the core divergence in innovation from infrastructure to application, EigenLayer is introducing a simple but extremely effective solution to the excessive cost of capital: re-staking.

EigenLayer's approach

EigenLayer is a smart contract layer on Ethereum that allows users to leverage existing trust networks and secure other core infrastructure and middleware layers by using heavy pledge. At the heart of the repledge is the use of the same pledges used for Ethereum network verification. ETH  To protect other networks. This gives ETH pledges greater flexibility in pledging capital, while extending the trust layer to peripheral infrastructure such as side chains, middleware, and even other non-Ethereum networks.

EigenLayer is introducing a two-way market in which ETH pledges can service networks that require a trust layer. This allows new networks to lower cybersecurity costs while gaining access to a huge pool of capital. In effect, this eliminates the problem of the least secure denominator in the application layer. Prophecy machines and cross-link bridge networks will gain security and trust from the same infrastructure layer that builds the application itself. EigenLayer allows it to solidify trust and ultimately improve security for all networks interacting with that layer. For example, a new entrant into the asset cross-chain bridge space could interact with EigenLayer and gain immediate access to a $18.7 billion security base.

Given that the ETH pledge incurs no marginal capital cost when verifying other networks, repledging greatly increases the range of possibilities for the pledge. Of course, EigenLayer does have some leverage and forfeiture risk, since the underlying pledged assets can be forfeited across multiple secure networks if malicious behavior is encountered. Whenever the same funds are used to validate multiple networks, the asset base is essentially leveraged, opening the system to potential cascades.

Forfeiture risk is complex and can lead to forfeiture contagion. Loss due to malicious behavior or downtime essentially reduces security considerations for all verified networks. If left unchecked or unchecked, this contagion can adversely affect system architecture. At startup, EigenLayer introduces careful leverage guidelines and restrictions to ensure the stability of the trust system.

EigenLayer is also developing a data availability layer for Ethereum called EigenDA. This layer is similar to the current danksharding specification and includes features such as data availability sampling (DAS) and managed proof. However, EigenDA is an optional piece of middleware, not a core component of the protocol. As a middleware layer, it can be stress tested without the need for a hard fork, which provides several advantages: permitless experimentation in the DA layer, and allowing validators to participate on an opt-in basis. If the implementation of pseudo-danksharding is successful with EigenDA, it could become the de facto DA layer for all optimistic and zk-rollups built on top of the Ethereum ecosystem before the long process of Ethereum-level protocol changes.

Liquidity is expected to continue to seek safety within Ethereum during the prolonged 2022-2023 bear market, further cementing the network as a haven and central layer of trust for the crypto. Security competition will further widen Ethereum's capital base, widen the gap between alt-L1 and drive the capital cost of new locally verified networks to prohibitive levels.

Gaining heavily pledged ETH security will greatly reduce the cost of scaling middleware, side chains, and general decentralized technology stacks. We believe Eigen will bring the most significant change to the way decentralized networks are built since Ethereum was first introduced in 2015.

Third, Blob deals don't solve scalability problems

Blob transactions won't be a magic fix for Ethereum scalability until modularity is achieved. There are considerable technical hurdles and delays in implementing modularity. The dramatic increase in on-chain data will also drive state expiration to mitigate the need for state inflation, and may even lead to changes in Ethereum's peer-to-peer structure. The Blob transaction introduces a new data format for calldata (on which rollups relies) that contains a significant amount of additional data that will not be accessed by EVM implementations, but only by commitments.

As Rollup and modular execution requirements grow, this new data market will become increasingly competitive. That means we may see price competitiveness, just as we saw competitive gas prices on Ethereum, we may see competitiveness around Data_gas, which is the new type of gas that is being implemented. There are still many issues to be resolved, such as whether gas should be time-based or slot-based, because if it is slot-based, it is possible to miss slot without blob transactions, which would make demand appear to increase and thus affect gas prices.

https://www.eip  4844.com/

There is also equivalence (P  2  P) The actual gossiping problem of blob deals on the web, because the size of these blobs is so much larger than anything currently being gossiped about. This requires further research at present. Paradigm  Is exploring. It will be interesting to see what happens with this and whether the Ethereum network can handle this further state bloat and data. In any case, it's likely that state expiration will be needed to limit the growth of Ethereum state - which currently stands at an insane 1079 GB for full blockchain synchronization and is growing daily. State expiration is achieved through state rentals, so state can be rented to off-chain storage, or by monthly or weekly state deletion and then stored on archive nodes (unfortunately, they are very centralized at this point).

https://ycharts.com/indicators/ethereum_chain_full_sync_data_size

As it becomes clear where Ethereum and many L1 will be positioned over the next few years, it is clear that in order to remain decentralized and "up to date," they will have to move to modularity.

4. ZK-Rollups won't see significant traction in 2023

ZK-Rollups will not gain significant traction in 2023 because they lack production readiness and are not sufficiently decentralized. For production readiness, we refer specifically to their VMS and proof time.

In contrast, ZKP is expected to be widely used, especially in non-interactive state proofs. Projects such as Herodotus, Axiom, ETHStorage, and Lagrange will use them for a variety of data-sharing purposes that require proof of on-chain or cross-chain storage.

Many cross-chain Bridges are expected to start using ZKP for interoperability purposes, and some are already moving in this direction, including Wormhole, Polymer and ZKBridge collective.

These ZKP applications are almost ready and are expected to be validated on-chain at a reasonable price. These uses of ZKP increase efficiency through recursion, which involves aggregating multiple proofs into one smaller proof. Most protocols have recognized the need for recursive ZKP to reduce costs and increase efficiency, although some proven schemes are more effective than others. However, it does come with some caveats, as some proven programmes are more effective than others.

https://ethresear.ch/t/reducing-the-verification-cost-of-a-snark-through-hierarchical-aggregation/5128 

Many existing ZK schemes and algorithms with compact proof sizes incur high overhead during proof generation time (also known as proof), which limits their efficiency and scalability. To address this problem, projects such as Supranational, Ingonyama, and DZK are working to improve the efficiency of proof generation. However, it is important to realize that this hardware acceleration is only part of the proof of efficiency. Optimization is needed at the algorithmic level, software level and other aspects. It is also important that the said system remain sufficiently decentralized, which is difficult to achieve in practice.

https://eprint.iacr.org/2022/1010.pdf

Finally, the proof time also increases with the complexity of the relevant ZKP. Given all the factors mentioned, there is no doubt that it will be difficult to build a ZKRollup sufficient to gain significant traction in 2023. Currently, the most effective use of ZKP is in smaller-scale operations, such as non-interactive state proof and interoperability mentioned earlier.

Layer 3 will be a real competitor to Cosmos

Layer 2    (L2) Increases scalability of Ethereum by reducing gas costs and increasing throughput. Because of these extensibility factors, as well as the tradeoffs that exist, L2 must choose to optimize for specific projects. Layer 3  (L3) is an application-specific blockchain built on L2 that aims to mitigate these trade-offs and make more improvements. They are similar to   Cosmos, Avalanche  And   Polkadot  Etc., but benefits from building on a modular blockchain protocol stack rather than a single chain protocol stack. Thus, deploying a fully modular blockchain infrastructure stack, including a common L2 as well as customizable L3, will mark the end of the era of single app chain ecosystems and the beginning of a new era of decentralized app development.

https://medium.com/1  kxnetwork/application-specific-blockchains-9  a  36511  c  832 

Single application chains are currently the preferred option for many applications, as they allow them the freedom to create custom logic and smart contracts while achieving better execution. In addition, application chains own their own block space, so they don't have to compete with other chains in execution. But this is not as efficient as it could be. Using a singleton blockchain architecture, such as an application chain built on modular software (such as Cosmos) or as a fully singleton application chain (such as the Avax subnet) limits their ability to reduce transaction costs and increase computing throughput.

In contrast, application chains built on fully modular blockchain protocols reduce unnecessary friction because they can take advantage of optimized blockchain layers built for specific functions. Suppose you will be building in   An L3 above zkSync (L2), which utilizes   Celestia  Data availability, proof of settlement and consensus using Ethereum, compared to a single application chain that combines all or part of the layers. In this case, the only way forward is to build modularly for better scalability while preserving decentralization.

It is important to note that these benefits are measured beyond what can theoretically be achieved by a single application chain. For example, the cost of L2 is 100 times lower than that of L1, and the cost of L3 is 10 times lower than that of L1. 000 times. zkSync is being built for zkPorter L3 by reducing costs by approximately 100 times, as well as 20 %. The maximum TPS of 000+ improves scalability. L3 not only provides improved performance, but also can be customized for specific purposes. This includes adding privacy features when using ZKP, designing custom DA models, and enabling efficient interoperability solutions.

Almost every associated EVM L2 plans to develop customizable L3 on top of its L2. In addition, opportunities will arise to build more modular blockchains using Celestia's base layer of shared data availability. However, the important thing to note about this prediction is that the future development of app chains will be as L3 on a modular blockchain stack, not as a single chain. Combining the decentralization and security of EVMs with scalable L3 makes a modular environment far superior to a single application chain ecosystem. Important interoperability issues still need to be addressed, especially for cross-rollup transactions. However, we are making progress and expect L3 to launch by the end of 2023.

Therefore, if L3 can solve interoperability problems, then deploying application chains built on a modular blockchain technology stack will be the killer of single application chain theory. L3 will retain a degree of Ethereum security, improve speed and scalability, and allow DApps to be customized for specific use cases. App chain ecosystems like Cosmos will continue to gain traction in 2023. However, with L3 finally deployed in 2023, we will see the app chain narrative shift from a single chain ecosystem to a modular ecosystem.

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