ETHCC summary: Crypto market is improving overall, and the infrastructure layer is entering a summer season.

Translation: LeftOfCenter, BlockBeats

This article collects the on-site review experiences of BlockBeats reporters and several cryptocurrency industry practitioners at this year's ETHCC, including Mippo from Blockworks, David Hoffman from Bankless, and davidev.eth, the Vice President of Product at Polygon Labs. By summarizing the activities of ETHCC Paris, even cryptocurrency users who did not attend the event can experience the optimistic sentiment surging in the bear market. According to the on-site experiences of several cryptocurrency industry participants, ETHCC presented an overall optimistic sentiment of "improvement".

Many attendees felt the enthusiastic developer atmosphere and saw many applications that solve key problems, and the infrastructure is also developing in a positive direction. David Hoffman from Bankless said that the underlying performance optimization is ready, waiting for the bull market and users to come. David Phelps, the founder of ECO DAO and Jokerace, said that ETHCC made him believe for the first time that cryptocurrency will succeed and can create better applications than the Internet.

Additionally, these ETHCC attendees also mentioned some possible future trends in the cryptocurrency industry. BlockBeats has summarized them as follows in tldr:

1) The encryption industry will usher in the Ethereum L2 summer, and multiple L2s have released their own SDKs for expanding new chains. Although their strategies vary, they will all result in one thing: launching chains based on L2 will be like generating web pages based on HTTPS, and eventually, application chains launched based on Ethereum will be as common as HTTPS web pages on the internet today.

2) Customizing L2 application chains has become mainstream, but for independent developers, this is still a high-cost investment, requiring high upfront costs and operating expenses. Therefore, developers with insufficient funds can choose the "collaborative chain" approach. Currently, Gitcoin has launched the Public Goods Network (PGN), and all participating application developers can receive income sharing from the sorter based on application-related metrics data.

Related reading: "Interpreting the new paradigm of public goods donation, how does Gitcoin become self-sufficient through PGN?"

3) The encryption industry will usher in a post-token era, and this paradigm is having a broader impact. This paradigm is not anti-currency, but rather a supplement to tokens. Without currency, a political structure that no longer dominates the community by the rich can be promoted, because the data on the chain itself can serve as the basis for establishing social and reputation portraits, thereby providing a better foundation for exercising governance rights.

4) Zero-knowledge proof can unlock the potential of cryptocurrency, achieving large-scale adoption in the three core areas of privacy, provenance, and reducing computational costs. Among them, ZK implementation of privacy is the most powerful way for developers to monetize in the encryption field, while Risc Zero and similar universal engines and markets can greatly reduce computational costs, making them game changers in this field.

5) Instadapp, Patch Wallet, and Biconomy are challenging Safe's early leadership position in the contract wallet field. EIP-7212 will unlock more features, and a better user experience is on the way.

6) Ethereum L1 will not monopolize the definition of EVM, L2 is preparing to use more functional extensions of EVM (EIP-7212), looking forward to the joint efforts of Polygon, Arbitrum, Optimism, and others to push EVM towards a more user-friendly direction.

However, at the same time, ETHCC also revealed some issues in the cryptocurrency industry:

1) L2 scalability has entered its strongest moment in history. The underlying infrastructure is rapidly developing, and L2 is pushing out application chain SDKs in large numbers, but lacking application chain builders and users. The missing piece of the puzzle is the application chain builder and block space consumer (also known as the application). Polygon Labs' Vice President of Product, davidev.eth, believes that L2 still lacks functionality for enterprise users.

2) Interoperability cannot be achieved between L2 rollups, making L2 look more like a "walled garden" than ever before. However, this situation presents an opportunity for builders and market makers.

3) The builder is trending towards centralization. Whether it's executing cross-chain transactions for users or participating in shared sorter services, substantial financial support is required. This is an opportunity for large hedge funds, but it remains uncertain whether it's a good thing or a cause for suspicion for the entire crypto community.

4) Homogenization trend of encryption products, including decentralized stablecoins, third-party fillers such as UniswapX, and L2 application chain infrastructure, and other vertical application fields are fiercely competitive. Davidev.eth, the product vice president of 0xPolygon Labs, predicts that Uniswap and DAI will dominate their respective markets. Meanwhile, LayerZero has already established a foothold and is difficult to be replaced by similar products such as Chainlink CCIP.

5) The assumption of honesty by the majority has accelerated economic inequality and has become the root of all problems in the on-chain community (DAO and NFT community).

In addition, at this ETHCC, most attendees have a general consensus that although the underlying infrastructure is ready, there is a lack of corresponding applications/application chains. Bankless David Hoffman mentioned a consumer application - Gnosis Pay. In addition, davidev.eth, the Vice President of Product at 0xPolygon Labs, mentioned some new things that have not yet been launched but have potential: ENS + POAP combined with near-field communication (NFC) gameplay, and the first customized NFT project Paulygon based on Quest on Polygon may use ERC-6551 (few). Interop may change the overall pattern of expansion. Also, eagerly anticipating the arrival of EIP-7212, which will extend more functions for L2 EVM and unlock more valuable functions for wallets.

Developer DAO founder Nader Dabit directly started the sarcasm mode, believing that the infrastructure protocol is too hot and no one is developing usable products. ETHCC gave him the feeling that everyone is talking about hypothetical and ideal situations, but no one is building actual products. He believes that "everyone is building their own slightly different infrastructure protocol, and the vast majority of people are actually building any application that runs on all of these infrastructures." The implication is that the protocol layer is too hot, but there are few real application products that can be provided to people.

Here is an excerpt compilation:

1, Mippo (Blockworks): Despite the bear market, the atmosphere is not "bearish" at all

1) Rollups DA cost reduction, application chain takes off

Rollups DA solutions have always focused on Ethereum, which is not an ideal choice for many reasons, but mainly because of the high cost. Today, DA has become the biggest cost for most rollups.

Moreover, DA is not a fixed cost (so it cannot be shared as the user group grows), and the cost of DA is variable and expands linearly with usage. As a result, only large rollups with sufficient funds can afford it.

However, this situation will change. I speculate that the change will come within 6 months. There are several viable solutions currently underway, including EigenLayer, Celestia, Avail, and Espresso Systems. This is a good start, but it's only the beginning.

The competition in the data availability layer will greatly reduce the entry barrier for new rollups. If progress goes smoothly, it is predicted that we will see a variety of application chains developed based on ZK or OP Stack explode in the next 18 months.

The translation is, Cheap DA + Modular Application Chain = Takeoff.

2) rollups lack interoperability

The interoperability between rollups may never be resolved. The OP Stack, ZK Stack, and Arbitrum Orbit are all toolkits that use modular and interoperable components to launch specific application rollups.

These allow for interoperability between specific application class rollups, but the reality is that mutual interoperability cannot be achieved.

I really like this architecture and have been familiar with the application chain paper pioneered by Cosmos for a long time. The "super chain" of Optimism and the vision outlined by ZK Credo feel like an extension of this idea. Everything is great.

That is to say, it seems to have become a consensus that interoperability between L2s cannot be achieved within a certain period of time (if any). There are some technical reasons (contracts need to be embedded in Ethereum), as well as some strategic reasons (teams hope to limit activity within their own ecosystem).

To be honest, I'm not sure if this is a bad thing or not. But if there is no interoperability, L2 does seem more like a "walled garden" than before. This could be a problem or an opportunity. However, there are two winners here: builders and market makers.

3) Centralization of the builder

If L2 cannot interoperate and there are no longer any trusted bridges, large hedge funds have the opportunity to intervene. Users still need to execute cross-chain transactions, and market makers can provide this service. This means that market makers are now doing the work of the bridge.

Large centralized builders are inevitably rising, mainly due to two driving factors:

.Widespread adoption of Intents

.roll ups Shared Sorter

All of these changes will drive demand for abstraction, and builders are clearly adept at this.

Intents allow users to specify complex cross-chain priority options, all of which are executed immediately. Dapps achieve this by assigning user preferences to market participants (liquidity providers/builders). DEXs such as CoW Swap and UniswapX have already done this, and I expect more projects to follow suit.

Participating in the shared sorter service also requires participants to have large amounts of funds.

We need well-funded large-scale builders. The sorter can only guarantee packaging, not execution. In order to fulfill the promise of Shared Sorter (SS) (composability and cross-domain MEV), we need a centralized builder that can be plugged in.

Again, I'm not sure if this is a good thing or a bad thing. In my opinion, the community believes that the benefits of large centralized builders outweigh the drawbacks. As long as we can have decentralized, commoditized validators, this is an acceptable compromise.

4）ENSHRINING IS BACK

From a historical perspective, Ethereum has been very cautious about adding embedded consensus at the protocol layer.

However, this situation may be starting to change. In his "Account Abstraction" speech, Vitalik himself acknowledged the need for some degree of embedding. I have seen similar sentiments in other areas of Ethereum, including the separation of L2 proofers/sorters.

When asked about "Eigenlayer will be enshrined", founder Sreeram Kannan stated in a Bell Curve interview that this is the protocol's goal. Ethereum has clear advantages and also clear risks.

5) This is not a typical bear market event. The characteristics of a typical bear market event are low attendance and a cold atmosphere.

And this season's ETHCC event is completely different from the bearish atmosphere. This is an event about solving key issues. Feasible solutions are not only proposed, but also being launched. The infrastructure is developing in the same direction. In other words, progress is being made.

2, David Hoffman (Bankless): Underlying performance optimization is ready, waiting for the arrival of the bull market and users

1) Before the next bull market arrives, Web3 is fully prepared for computing and low-cost storage.

This is mainly reflected in the optimization progress of various data availability solutions.

In the transaction fees of the Rollup scaling solution, the data availability cost is the largest expenditure. However, EIP4844 and alternative data availability solutions will reduce the cost of Ethereum's block space to unprecedented levels of affordability.

The arrival of Dencun upgrade, which will ultimately be merged into EIP4844 (also known as protodanksharding) to the consensus layer, will introduce a large-scale scalability upgrade, allowing us to have cheaper block space "blobspace" on L1, approaching the theoretical minimum of economic resource cost in the cryptocurrency industry.

Ethereum is not the only protocol that optimizes low-cost data availability. Celestia, Avail, and EigenDA are universal solutions for data availability (meaning that DA solutions can be extended beyond Ethereum) that can expand blockchain performance to unprecedented levels.

除了数据可用性，Espresso is partnering with Eigenlayer to focus on optimizing the shared sorting layer, in order to alleviate the problem of centralization in sorters.

In addition, zkSync has released an upgraded version called Boojum, which supports running "prover" nodes on mid to high-end gaming GPUs. The ability to run "prover" nodes on consumer hardware for this zkRollup critical component means that a decentralized network can be achieved through zk proofs.

2) More vertical fields are slightly converging, and competition among them is fierce.

Stablecoins: Aave has launched its decentralized stablecoin GHO, MakerDAO has launched the currency market "Spark", and Frax has been developing its own stablecoin, currency market, and LSD vertical ecosystem for over a year. These three protocols will compete in the stablecoin field - TVL, stablecoin supply, and most importantly, fees.

UniswapX Third-Party Filler: Uniswap's UniswapX introduces a new vertical field - the third-party filler network, which competes with each other by providing traders with the best trading prices. When a user makes a transaction, third-party fillers (Fillers) (note: anyone can become a third-party Filler for UniswapX Swap) can directly fill the transaction or lead the user to the appropriate AMM liquidity pool, providing traders with the most cost-effective token exchange price.

In addition, third-party fillers can also act as bridge abstraction layers, allowing the free market to choose their own solutions to execute cross-chain DEX token exchange transactions. If token 1 on chain A wants to be exchanged for token 2 on chain B, it is done through third-party fillers who compete in the market to provide users with the fastest and most cost-effective routing solutions.

L2 Chain SDK: Multiple L2s have released their own SDKs for expanding new chains, including Optimism's OP Stack, Arbitrum's Orbit, zkSync's ZK Stack, and Polygon 2.0's Supernets. Although their strategies differ, they will all result in one thing: building on L2 chains will be like generating web pages with HTTPS on the internet today, and eventually application chains launched on Ethereum will be as ubiquitous as HTTPS web pages.

With the official launch of Base mainnet in early August, we will usher in the Ethereum for the L2 summer.

3) Consumer application dominance: Gnosis Pay

The progress of encryption protocols and underlying infrastructure is rapid and poised for action, requiring more consumer applications and users.

L2 provides larger block space, and the cost of data availability is close to the lowest. The latency and responsiveness are better than ever before. It's time to build encrypted applications again.

At ETHCC, an impressive consumer application was seen, which is Gnosis Pay and Gnosis Card launched by Gnosis.

The user experience of Gnosis Pay is no different from traditional payment systems. However, it runs on a set of encryption protocols that connect traditional financial payment systems and Web3, making it possible to use cryptocurrency for everyday purchases such as buying coffee.

3, Davidev.eth (Polygon): L2 still lacks features for enterprise users

Davidev.eth is the Vice President of Product at 0xPolygon Labs. Here are his 8 quick thoughts after attending ETHCC:

1) Keep an eye on two stablecoins, Gyroscope Protocol (ECLP is just the beginning) and Spark Protocol;

2) @LucemansNL and @v3xlabs are using ENS x POAP near-field communication (NFC) to create the best activation experience. Very optimistic.

3) Ethereum L1 will not monopolize the definition of EVM. L2 is preparing to expand EVM with more features (EIP-7212), and we look forward to the joint efforts of Polygon, Arbitrum, Optimism, and others to make EVM more user-friendly.

4) No one else is building something like Interop. If executed properly, the expansion pattern will change.

5) ERC-6551: Lens Protocol may be the only project mentioned in this event related to this standard, but it will unleash the huge potential of NFTs (hinting that Paulygon, the first Quest-based customizable NFT project on Polygon, may use ERC-6551).

6) EIP-4337 is just the beginning of account abstraction. Instadapp, Patch Wallet, and Biconomy are challenging Safe's early leadership position in the contract wallet space. EIP-7212 will unlock even more possibilities. A better user experience is on the horizon.

7) Although everyone is launching their own "application chain", I have noticed a lack of functionality in the enterprise market. I hope that we will eventually see L2 teams and Quorum competing for enterprise users, rather than fighting each other on Twitter.

8) Can a market be won solely on brand? Uniswap X is basically Cowswap, Maker is moving towards the Frax/Aave model, and Chainlink CCIP is essentially LayerZero. I believe Uniswap and DAI will dominate their respective markets. Meanwhile, LayerZero has already established a strong foundation based on OFT and ONFT standards, making it difficult to replace.

4, David Phelps (Jokerace): The first time I believed cryptocurrency would succeed

The next important evolution of application chains is cooperative chains (cooperative-chain).

The collaboration chain, also known as the "ecosystem chain" by @owocki, allows project parties to receive a share of the underlying chain's revenue by contributing value. One quick way to think about this issue is that although having your own chain brings many benefits, such as faster speed, revenue capture, customized block time, and economic models for specific use cases, the upfront costs may be high and the chain needs to be operated. By adopting a cooperative-chain approach, project parties can join forces to contribute value to the underlying chain and receive fee income shared by the underlying sorter. This is our first economically sustainable system for supporting public goods, similar to a tax system on the chain, but with a key difference from the national economy, which is that this system is entirely voluntary.

Honesty is the root of all problems in the on-chain community (DAO and NFT community) that most people trust as assumptions.

Everyone knows that the assumption of trust in honesty can bring risks to the cryptographic infrastructure, but no one has discussed the assumption of trust in honesty for the DAO and NFT communities.

However, we have seen many cases of "community token attacks when the token price falls below its treasury market value". The honest majority also faces risks when it comes to tokenized community organizations. There are 100 reasons to believe that allowing 51% of token supply to make community decisions is not a good idea. Is plutocracy really the best way to build an organization? Are random token holders the best candidates to make high-risk decisions? However, the most important point is that the wealthiest token holders always have the greatest power to manipulate tokens and make themselves even richer.

The majority of honest people believe that assumptions have accelerated economic inequality, which has become the core of all problems in the current on-chain community. This is also the issue that @CelestiaOrg and @eigenlayer have been deeply thinking about, namely how to build a sustainable social consensus.

智能合约触发提款（Smart contract trigger withdrawals）的必要性

The Necessity of Smart Contract Trigger Withdrawals.

When a liquidity pool handles a user's staking and restaking of tokens, we face a problem: if any individual user engages in foolish behavior that leads to their being slashed, all users in the pool may be subject to punishment.

Smart contract triggered withdrawal is essentially making the person who made the mistake responsible for their own actions, so that innocent people will not be affected. This is crucial for future staking and restaking.

cosmos Roadmap Wins, Ethereum Adopts Cosmos' Vision

Nowadays, the impossible triangle dilemma has actually transformed into a dilemma between sovereignty and composability. On the one hand, there is Cosmos' modular sovereignty vision: everyone has their own chain that can be customized as needed, just like choosing which country to join.

On the other hand, Solana's overall vision for composability is to solve every interoperability challenge between users in the network with a single chain.

Obviously, Ethereum has adopted Cosmos' vision and realized the modular world of application chains. This makes Solana more valuable as a single-chain replacement solution. If you are bullish on Ethereum, this is a "very" sufficient and compelling reason to be bullish on Solana. But as explained by Anatoly Yakovenko, co-founder of Solana Labs, at the Modular Summit, Solana's main innovation in fraud proof is built on the modular vision of CelestiaOrg. And Cosmos is the core of all mainstream crypto projects currently.

 Cosmos and Ethereum ecosystems are rapidly merging into one constellation

Two major Cosmos-based aggregation-as-a-service products, Eclipse and Dymension, will both support EVM. Additionally, Polaris from Berachain, built on the Cosmos SDK, will support integration of any Cosmos chain into EVM. All of these are supported by Evmos.

For Cosmos, this is a bittersweet victory. The vision of Cosmos has been achieved. The future of modular blockchain still largely relies on the core technological achievements of Cosmos: the Cosmos SDK for chain development, Tendermint for consensus engine building (via Ethermint), and IBC for bridge building. However, the future seems to be increasingly built on the EVM, and ETH as a reserve currency for the internet will also be increasingly used for application building.

We have entered the post-token era.

This paradigm is currently having a wider impact.

—Aave initiated a DAO proposal, attempting to decouple governance from tokens.

- @eigenlayer provides secondary security for Ethereum, allowing other protocols to avoid issuing their own native tokens.

- No Coin Community Boys Club and SheFi

- Cryptocurrency investment firm DBA co-founder Jon Charbonneau discusses the need for "governance proof" of subjective permission in Rollups.

- The most interesting thing is that @evansforbes makes an implicit comparison between token holders and monarchs.

I believe that the three pillars supporting the Post-token paradigm are:

A. Axiom is a storage proof protocol that can compute on-chain historical data to analyze user behavior.

b. Applications similar to Jokerace and POAP can incentivize users to establish reputation proof, thereby unlocking long-term airdrops, access, and governance rights.

C. Reputation protocols, such as Intuition, Gateway, NEWFORUM, and Karma3 Labs, can handle on-chain data from the first two chains to generate on-chain user profiles.

After token mode is not a reverse currency. All of these solutions can be viewed as a supplement to a token, unlocking use cases for mainstream tokens such as $ETH and $USDC, and even (like Jokerace) making it "easier" to run tokenized communities.

This brings us into a political structure where the rich no longer dominate the community, as the on-chain data itself can serve as the basis for building social and reputation profiles, providing a better foundation for exercising governance rights.

This will lead us to a world where unlocking cryptocurrency is built around some L1 tokens for applications, protocols, and communities, while tokens like $ETH, $AR, and $SOL will operate as digital native currencies.

Zero-knowledge proofs unlock the potential of cryptocurrencies in privacy, source attribution, and reducing computational costs

Provenance: For a creator to prove that they have created certain content, they need proof of ownership. Bundlr Network provides such a solution. In the long run, zero-knowledge proofs can also be used by creators for a wider range of cases, including proof of ownership of content that has been distorted, remixed, and resized without permission.

Zero-knowledge proof can unlock the potential of encrypted currency, achieving large-scale adoption in the three core areas of privacy, provenance, and reducing computational costs. Among them, ZK is the most powerful way for developers to monetize privacy in the encryption field, while general engines like Risc Zero and markets can greatly reduce computational costs, making them game changers in this field.

Encryption currency will succeed and create better applications than the Internet

In the past few years, I have had doubts about this industry, but as a builder, I can say that this is the first time I have felt that this technology has the potential to create off-chain applications on the chain. This is the real revolution. ETHCC provides ample evidence that it is not far away.

5, Ader Dabit (Developer DAO): Infrastructure protocols are too hot, and no one is developing usable products

After saying all the good things, let's pour some cold water now.

ETHCC's impression is that everyone is talking about hypothetical and ideal situations, but no one is actually building practical products. He believes that "everyone is building their own slightly different infrastructure protocol, but most people are actually building any application that runs on all of these infrastructures." The implication is that the protocol layer is overheated, but there are few truly useful application products.

He suspects that most of these people just want to get rich, but I also realize that many truly necessary things are being built and improved, and all of these are mixed and integrated together.

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