Ethereum is scheduled to undergo two major upgrades this year: the Shanghai upgrade that was completed on April 12, and the Cancun upgrade that is expected to take place in the fourth quarter.
According to Ethereum's official documentation, there have been 24 milestone events since the release of the white paper in 2013, most of which were fork upgrades, and 12 of them were relatively important.
Blockchain technology can still be considered an emerging technology even though the basic concepts such as cryptography, decentralization, peer-to-peer networks and transactions have been studied for decades. However, it was not until the birth of Bitcoin in 2008 that people began to believe that these concepts could be combined to create practical products. Ethereum in particular did not appear in a public and usable form until 2015.
Although Ethereum’s development timeline and specific details have changed, it has continued to move forward as planned and continuously upgrade the protocol to improve usability, security, functionality, and decentralization.
This article will review and sort out the important hard forks and upgrades in Ethereum's history, and introduce the changes that the Cancun upgrade may bring.
Frontier Update - July 30, 2015
July 30, 2015 was the day when the Ethereum Genesis Block was generated, and it was also the first phase of Ethereum. In this phase, called Frontier, it is mainly for blockchain developers and node participants. People can participate by mining k, and the k-workers who mine the block will receive a certain amount of ether as a reward. In this phase, people can also upload smart contracts.
There are some key features of the Frontier phase. First, k-workers will be rewarded after mining a block. The reward is given in the form of Ether (ETH), and the reward for each block is 5 ETH. Secondly, there is a concept called Gas. In the beginning, the upper limit of Gas per block was fixed at 5000, which meant that operations on the network were limited. This was done to provide a transition period for k-workers and users to start working on Ethereum and using the client. After a few days, the Gas cap was lifted and the network could process transactions and smart contracts normally.
There is also a contract called Canary, which is used to inform users which chains may be attacked. The value of the Canary contract can be 0 or 1. If the value of the contract is 1, the client knows that there is a problem with this chain and can avoid this invalid chain. This Canary contract plays a role in protecting network security.
At this stage, Ethereum's user interface is very simple and can only be operated through the command line, without a graphical interface. The entire network is available, but only people who are familiar with and experienced in Ethereum can use it.
Later, two months into the Frontier phase, the upper limit on Gas was removed, the default price of Gas was set to 50 gwei, and a mechanism called the Difficulty Bomb was introduced. The purpose of the Difficulty Bomb is to transform the network from Proof of Work (PoW) to Proof of Stake (PoS). When the computing power is too high and k workers cannot mine any blocks, it is the best time to switch to PoS. It can be said that the plan to switch to PoS has been in place since the early stages of Ethereum.
So, from then on, Ethereum officially entered a quasi-usable PoW mining era, when the price of Ethereum was $1.24 per coin.
Homestead Updates - March 14, 2016
The Homestead upgrade is the second major version released by Ethereum and the first hard fork of Ethereum, marking the entry of Ethereum's roadmap into the second phase. This version brings some important improvements. The most important of these is the optimization of smart contracts and the introduction of new code for the smart contract language Solidity. In addition, this version also released the desktop wallet Mist, which allows users to hold and trade Ethereum (ETH), as well as write and deploy smart contracts. However, the Mist project announced the cessation of development in early 2019.
The Homestead upgrade is one of the earliest Ethereum Improvement Proposals (EIPs) implemented, which includes three specific improvement proposals, namely EIP-2, EIP-7 and EIP-8.
EIP-2 increases the cost of creating a smart contract through a transaction from 21,000 Gas to 53,000 Gas. Previously, the cost of creating a contract through a contract was higher than the cost of creating a contract through a transaction. By increasing the cost of creating a contract through a transaction, EIP-2 encourages users to revert to the method of creating contracts through contracts.
EIP-7 adds a new function called DELEGATECALL to facilitate code reuse. This opcode is similar to CALLCODE, but the difference is that it sends the sender and value from the parent scope to the child scope, that is, the created call has the same sender and value as the original call.
EIP-8 is a proposal for future network upgrades that makes the network protocol devp2p forward-compatible. This improvement ensures that all client software on the Ethereum network can adapt to future network protocol upgrades.
During this period, the price of Ethereum was $12.5 per coin.
DAO Fork - July 20, 2016
In addition to the planned Ethereum upgrades and hard forks, there was another very important event that occurred in 2016. This event involved a decentralized autonomous organization project called The DAO, which raised $150 million in funds by issuing tokens. However, in June, hackers exploited a contract vulnerability in The DAO and stole tens of millions of dollars worth of Ether (ETH).
Faced with this huge loss, most members of the Ethereum community decided to conduct a hard fork. Their goal was to recover the stolen ether and fix the vulnerability in the contract. But not everyone agreed to this hard fork, and some people chose to continue mining and trading on the original chain. As a result, the stolen ether was not restored on the original chain, and a new fork was formed, known as Ethereum Classic (ETC).
Since then, Ethereum has split into two networks, Ethereum (ETH) and Ethereum Classic (ETC). Each network has its own supporters and community. This is why there are two Ethereum networks.
At that time, the price of Ethereum was $12.54 per coin.
Metropolis: The Byzantine Upgrade - October 16, 2017
After two important upgrades, Frontier and Home, Ethereum is about to usher in the next stage of upgrades, called Metropolis. Since the Metropolis upgrade has a lot of content, it is planned to be divided into two stages: Byzantium and Constantinople.
This hard fork includes 9 improvement proposals (EIPs), involving updates to the underlying layers such as opcodes and smart contracts. One of the important changes is to postpone the "difficulty bomb" to a year and a half later and reduce the block reward from 5 ETH to 3 ETH. Before the difficulty bomb was removed, the block generation time was close to 30 seconds. In addition, the ability to make non-state change calls to other contracts was added, and some cryptographic methods were introduced to support Ethereum's second-layer expansion.
During this period, the price of Ethereum was $334.32 per coin.
Metropolis: Constantinople Upgrade - February 28, 2019
The second phase of the Metropolis upgrade, Constantinople, was originally scheduled to go live in mid-January 2019, but on January 15, a security audit company called ChainSecurity released a report stating that one of the upgrades had the risk of giving attackers the opportunity to steal funds. In response to this security issue, Ethereum core developers and community members voted and decided to temporarily postpone the upgrade until the problem was resolved.
Finally, the Ethereum Foundation decided to carry out the final step of "Metropolis", a hard fork called Constantinople, on February 28, 2019. This upgrade includes 6 improvements. Some of these improvements ensure that the blockchain will not be frozen before the PoS (Proof of Stake) working mechanism is implemented; optimize the Gas cost problem in the Ethereum virtual machine; increase the interactive ability of address creation. Interestingly, there is also a hard fork called St. Petersburg at the same time, which removes a previous improvement proposal in Constantinople. In this upgrade, in addition to technical adjustments, the difficulty bomb was postponed again for 12 months, and the block reward was reduced from 3 ether to 2 ether.
The upgrade also introduces a new instruction in EIP 1014, called CREATE 2, which allows the contract address to be pre-calculated before the contract is officially deployed. This is similar to the concept of state channels in the Bitcoin Lightning Network, which can be calculated off-chain and then the corresponding contract can be deployed on-chain for settlement.
During this period, the price of Ethereum was $136.29 per coin.
Istanbul Upgrade - December 8, 2019
Ethereum 2.0 is scheduled to launch its first phase in 2020, but before it is fully launched, most users and developers may still mainly use Ethereum 1.X. Therefore, subsequent 1.X version updates are also very important. Among them, the Istanbul hard fork is an important milestone, which was activated on December 8 and included 6 improvements.
The goal of this upgrade is to continue to optimize the Gas cost problem in the Ethereum virtual machine, improve the system's resilience to distributed denial of service attacks, and enhance the performance of Layer 2 expansion solutions based on SNARKs and STARKs verification mechanisms. In addition, it also achieves interoperability between Ethereum and Zcash, and allows Ethereum smart contracts to introduce more creative functions.
According to Ethereum founder Vitalik Buterin, after this upgrade, the average number of transactions per second (TPS) will increase by about 5% to 10%, and for Layer 2 technology Rollup, the performance improvement can reach about 4 times. This means that the Ethereum network can process more transactions and achieve higher efficiency.
During this period, the price of Ethereum was $151.06 per coin.
Muir Glacier Upgrade - January 2, 2020
Less than a month after the Istanbul upgrade was completed, Ethereum urgently carried out another temporary upgrade, which is a very rare situation. The reason is that some users and developers found that the block generation interval of Ethereum increased slightly, which may cause the number of transactions per second (TPS) of the Ethereum network to drop.
Ethereum developers discussed and proposed an emergency upgrade at block height 9,200,000, codenamed "Muir Glacier". The purpose of this upgrade is to remove the difficulty bomb, a mechanism that will gradually increase the block generation time. This upgrade is expected to occur around December 31, 2019.
According to data from developers in the discussion group, Ethereum's block generation time will continue to increase before the difficulty bomb is removed, and may reach a time of one block every 25 to 30 seconds around January 6.
During this period, the price of Ethereum was $127.18 per coin.
Berlin Upgrade - April 15, 2021
Starting from this version, Ethereum's upgrade code will be named according to the order of Ethereum developer conference Devcon. The first Devcon conference was held in Berlin, so this version is called the Berlin upgrade.
In previous plans, Ethereum planned to implement many improvements in the Istanbul upgrade. However, due to various reasons, some improvement proposals were not included in the Istanbul upgrade in time, but were delayed to the Berlin upgrade.
In the Berlin upgrade, Ethereum optimized the gas cost problem in the Ethereum virtual machine, which means that users will be more efficient when conducting transactions and smart contract operations. In addition, the Berlin upgrade also adds support for multiple transaction types, making the Ethereum network more flexible and adaptable to different transaction needs.
During this period, the price of Ethereum was $2,454 per coin.
London Upgrade - August 5, 2021
This Ethereum upgrade involves five proposals, namely EIP-1559, EIP-3198, EIP-3529, EIP-3541 and EIP-3554. Among them, one of the proposals with the greatest impact on Ethereum is EIP-1559. The goal of this proposal is to change the fee structure of Ethereum, divide the fee into basic fee and mining fee, and reduce the circulation of ETH by destroying part of the basic fee.
In the previous mechanism, Ethereum block packaging was conducted through auctions, and the highest bid Gas would be given to the K-worker. However, EIP-1559 changed this mechanism and divided the Gas fee into two parts: one part was given to the K-worker, and the other part was destroyed. As a result, Ethereum entered an era of deflation, because each transaction would reduce the total supply of ETH.
At the current time, the price of Ethereum is $2621 per ether.
The Merge - September 15, 2022
This Ethereum upgrade is very important. It directly modifies the execution layer and consensus layer of Ethereum, and transforms the main network from the PoW consensus mechanism to the PoS consensus mechanism. This upgrade has made some changes to the rules of the Ethereum network, including the following aspects:
First, the change of verification nodes. The original k-worker nodes will be replaced by verification nodes. Verification nodes need to pledge 32 ETH and run the corresponding software to participate in network verification and block packaging.
Secondly, the block reward will be changed. The original block reward will be cancelled and replaced by earning income through transaction fees.
The transaction fee mechanism has also changed. In the new version, transaction fees will be paid directly to the validating nodes instead of being paid to the Ethereum Foundation.
Another important improvement is the introduction of a dynamic fee mechanism. A new feature called "EIP-1559" has been added to the new version, which can dynamically adjust the fee price, allowing users to complete transactions faster and reduce excessive fees.
In addition, the state storage method has also been optimized. The new version uses a technology called "Rollups" to store a large amount of data on the side chain and aggregate it to the main chain, thereby reducing the burden on the main chain and improving the efficiency and scalability of the entire system.
Finally, the way contracts are executed has also been improved. The new version introduces a virtual machine called "EVM 384", which can improve the efficiency and security of contract execution.
In general, Ethereum's Paris upgrade has greatly improved the scalability and efficiency of the Ethereum network by improving the consensus mechanism, optimizing the transaction fee mechanism, improving the state storage method, and improving the efficiency of contract execution.
The current price of Ethereum is $1,472 per ether
Shanghai Upgrade - April 12, 2023
The Shanghai upgrade is the first major upgrade after the Ethereum network merger and an important milestone on the Ethereum roadmap. This upgrade brings three major changes:
First, the Shanghai upgrade unlocks Ethereum's staking withdrawal function. This means that people who participate in verification can withdraw part of the funds from their staked ETH. Doing so will not only help maintain the vitality of the Ethereum network, but also contribute to the sustainable development of Ethereum and attract more validators to join the network.
Secondly, the Shanghai upgrade reduces the gas fees for Layer-2 solutions running on the Ethereum blockchain. This makes Ethereum faster and cheaper, and can further optimize the gas fees of transactions.
As the largest blockchain network supporting smart contracts, the Shanghai upgrade maintains Ethereum’s leading position in this field by introducing EOF (EVM Object Format).
The current price of Ethereum is $1917 per ether.
Cancun Upgrade - Q4 2023 (estimated)
The Cancun upgrade is an additional upgrade to the Ethereum blockchain, implemented immediately after the Shanghai upgrade. The upgrade introduces EIP-4844 and possibly EIP-6969, which is mainly aimed at promoting the goal of lower costs and higher speeds for Ethereum Layer 2. It is expected that through the Cancun upgrade, the speed of Ethereum Layer 2 will increase by 10 times or even 100 times, and the transaction costs will be lower.
Ethereum Layer 1 fees have always been high, and improvements are urgently needed to reduce overall operating costs. Currently, the expansion solution on Ethereum is mainly Layer 2 Rollups. Rollups do help users save a lot of Gas fees. For example, the Gas fee of the Optimism project is only 0.001 gwei, which is much lower than the fee of Ethereum's first-layer main network; ZK Rollups' solution has better data compression performance and does not need to include signature data, so the fee is lower, and can even be reduced to one percent of the fee of Ethereum's first-layer main network. However, for a wider range of users, even after the Rollups solution, Gas fees are still a relatively expensive burden. In addition, Ethereum's efficiency in processing parallel transactions is still low, and it can only process a few dozen transactions per second at most, which requires new improvements to improve scalability.
Sharding is a powerful improvement method to solve the above problems, but it has not yet been implemented in the current Ethereum. Therefore, the timely proposal of EIP-4844 has become a trade-off solution suitable for Ethereum at this stage, laying the preliminary technical foundation for Ethereum to achieve overall data sharding in the future. EIP-4844 is called "Proto-danksharding", which introduces a new type of transaction that can store data in a space called Blob at a lower fee, thereby greatly reducing the cost of Layer 2.
In addition to the much-anticipated EIP-4844, the Cancun upgrade also identified other improvement proposals for implementation, including:
EIP-1153: Added Transient Storage Opcodes to solve the solution for intra-block communication.
EIP-6780: Modified the function of the SELFDESTRUCT opcode to prepare for the future application of the Verkle Tree architecture in Ethereum.
In addition to ETH itself, the Cancun upgrade involves a few other projects worth noting:
Layer 2
The Cancun upgrade is the biggest beneficiary for Layer 2, and in the Layer 2 field, Arbitrum and Optimism, which have first-mover advantages, are projects worth paying attention to. They will usher in greater development opportunities after the Cancun upgrade. At the same time, leading applications in the Arbitrum ecosystem such as GMX, RDNT, and Magic will also usher in greater development with the vigorous development of Layer 2. In addition, projects such as Metis, a project based on OptimisticRollup technology, and Boba Network, which is similar to Optimism, are also expected to receive further improvements and development under the dividends of the Cancun upgrade.
ZK-Rollups
The Cancun upgrade will bring opportunities to zkRollup, which is considered a more advanced solution in the industry, and zkSync, StarkNet and Scroll are the three most well-known projects in this field. Although these three projects have not yet been officially released, they all have great potential.
zkSync is an extension developed by Matter Labs based on the ZK-Rollup architecture. It is mainly targeted at the 1.0 mainnet for payment purposes and the universal 2.0 testnet that is fully compatible with the Ethereum Virtual Machine. Recently, zkSync has been upgraded to version 2.0, which supports the use of any token to pay network fees, greatly improving user flexibility.
StarkNet is a decentralized Validity-Rollup that runs on Ethereum as a Layer 2, enabling any application to achieve massive scalability without compromising Ethereum’s composability and security.
Scroll is a zkRollup based on zkEVM. As a Layer 2 solution, it aims to solve the congestion problem of the Ethereum network. $Cancun Upgrade $ETH
