Who is touching the “cheese” of Ethereum? The opportunities behind this main narrative in 2024

24-02-16 15:00
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Original Title: "Who is Moving Ethereum's 'Cheese'? Opportunities Behind the Main Narrative of 2024"
Source: ODAILY Star Daily

"Legitimacy", a word that seems to contradict the spirit of Web3 in its literal sense, has recently been appearing more and more frequently in people's field of vision.

Especially the big discussion about the legitimacy of Ethereum DA raised by the encryption community involves a number of star projects such as EigenLayer and Celestia. Even Ethereum co-founder Vitalik Buterin has started to speak out frequently. So what is DA and what does the debate about its "legitimacy" mean?

What is DA?

DA, which stands for data availability, is an important component of modular blockchain architecture today.

Unlike a monolithic blockchain, a modular blockchain splits different parts of a blockchain network into corresponding functional layers, such as execution, data availability, consensus, and settlement:

Comparison between single-chain and modular blockchain, image source: internet.

Execution: Responsible for processing transactions and updating states in the execution layer;

Data Availability (DA Layer): Responsible for storing the data required to verify the validity of transactions.

Consensus: Responsible for determining the transaction order and final confirmation within the block, that is, determining the order in which transactions in the memory pool are included in which block;

Settlement: Responsible for verifying Rollup L2 state data and processing fraud proofs/validity proofs;

Currently, with the escalation of the L2 war and the continuous development of modular narratives, there are numerous projects such as Rollup, which focuses on execution, and Celestia, which focuses on data availability.

In the modular world, the core function of Data Availability (DA) in the encryption industry is to ensure that on-chain data is available for use and access by all network participants, responsible for reducing costs and expanding the blockchain.

What are the benefits of doing so?

First of all, it is naturally more specialized. Taking the separation of data availability and execution as an example, in a modular architecture, a group of nodes can be fully responsible for DA, while another group (or multiple groups) of nodes can be responsible for execution, each performing its own duties. In this context, a dedicated DA layer can not only achieve higher throughput, but also improve interoperability and reduce costs.

In theory, every node in a blockchain network must download all transaction data to verify its validity. This is an inefficient and costly task, but it is currently the way most blockchains operate and a barrier to scalability, as the amount of data required for verification increases linearly with block size.

Secondly, it greatly improves scalability, making each blockchain like Lego blocks. Developers can build more scalable blockchains by combining specialized modular chains, and deploying new L2s is becoming increasingly simple through Rollup-as-a-service providers such as Caldera, AltLayer, and Conduit.

So, to put it simply, taking the modularity of Ethereum as an example, it utilizes the L1 main chain as the settlement and data availability layer, while using various L2 solutions such as Rollup as the execution layer to achieve scalability.

This is also the roadmap for Ethereum to move towards a modular blockchain stack. Once this transition is complete, users will be able to use L2 solutions while still benefiting from the security of the Ethereum base layer.

DA "Orthodoxy" Debate

So why has there been a big discussion about DA among Vitalik and the community recently? What is the reason for the debate?

It's simple. Currently, the mainstream projects for data availability layer, apart from Ethereum (which directly submits state data and proofs to Ethereum L1), have also emerged new solutions such as Celestia, EigenLayer, and Avail.

With the development of Celestia, it has competed with Ethereum in terms of data availability layer due to its scalability, sovereignty, flexibility, and shared security features. This has attracted some general Rollup L2 solutions such as Manta and ZkFair to adopt Celestia.

The most direct impact is that Manta Pacific migrated the data availability layer from Ethereum to Celestia, which is the first L2 based on Celestia and has sparked widespread discussion and attention in the Ethereum community due to the "broken window effect".

For Manta Pacific, the motivation for doing so is undoubtedly to reduce the cost of data availability - according to official disclosures, since migrating the DA layer to Celestia, the cost has decreased by 99.81% compared to using the Ethereum mainnet, which is a significant decrease by orders of magnitude.

Of course, third-party DA solutions like Celestia sacrifice some security compared to Rollups that use Ethereum as the DA layer. However, when it comes to the trade-offs of these L2 solutions, the choice of which DA to use is crucial for both cost and security, with cost having a more significant impact.

Therefore, new projects such as Aleo, Dymension, and ZKFair have joined the new DA solution Celestia to reduce costs. Even Polygon has chosen to turn to NEAR and openly stated that it is "8,000 times cheaper than Ethereum".

Translation: 8000 times cheaper than Ethereum!

I want to know how this compares to other DA solutions like Celestia.

It can be foreseen that as long as cost advantages continue to exist, more and more L2 solutions such as Celestia will be integrated in the future, which will have a significant impact on Ethereum, especially sparking a dispute between the Ethereum community and the Celestia team over the definition of Ethereum L2.

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