What events occurred in Ethereum in 2024?
The winds are rising and falling, or perhaps it is 'fraught with crises'...
For Ethereum, this year is extraordinary. There is the peak following the approval of the US spot ETF, as well as the crisis of facing competition from Solana and various 'anti-Ethereum' sentiments.
Additionally, due to personnel changes, former researchers joined Eigenlayer as consultants, and later resigned from Eigenlayer positions for better development of Ethereum. There was also the Beam Chain proposed at Devcon and issues of liquidity fragmentation.
Every single event highlights this extraordinary year.
Fluctuating price trends
From the Ethereum price trend chart, it is already clear how many ups and downs it has experienced. From over $2,000 at the beginning of the year to over $4,000 in March, then back to the low 2s, and then rising again to over $4,000, it is filled with drama and uncertainty.
On January 11, 2024, SEC documents showed that the SEC approved the listing of 11 spot Bitcoin ETFs. Riding the wave of ETFs and the anticipation of the Ethereum ETF approval, Ethereum skyrocketed, nearly doubling in price within just over a month.
On July 23, the US spot Ethereum ETF went live. Although trading volume was explosive after the launch, surpassing $200 million within just 45 minutes, the price increase had already factored in the expectation of launching the Ethereum ETF, so the launch did not result in excessive price surges.
Due to the lack of sustainable innovation in the industry to support high prices, after Ethereum's rapid rise, in August, the price began to plummet again. Starting from July 30, Ethereum's price began a continuous seven-day decline, dropping from a high of $3,366 to a low of $2,111. After that came a long period of sideways trading.
Until Trump won the presidential election, Ethereum soared again, pulling it from the low 2s to a high of $4,170.
The continuous decline for seven days and then a rise for seven days, along with the rollercoaster-like fluctuations, reflect the extreme volatility of the crypto market, also showing the influence of market participants' emotions, expectations, and external events. (Indeed. This is crypto 🕶️)
The fluctuations are backed by a series of ironclad logics that must be acknowledged. For example, the significant rise in expectations for Ethereum ETF listings after the approval of Bitcoin ETFs at the beginning of the year, or the waterfall decline back to the starting point caused by the lack of real innovation and sustainable market demand relying solely on ETFs; and the crazy rise due to Trump's positive stance on crypto after taking office...
Looking back at Ethereum's price trends, it is not hard to see that its fluctuations are not only driven by external macro factors; technological advances often play a crucial role. From the launch of Ethereum 2.0, to the implementation of Layer 2 scalability solutions, to the continuous optimization and updates of the Ethereum network, each technological breakthrough has become the focus of the market. However, the price increases brought about by these advancements are not achieved overnight but are often obscured by short-term market sentiment.
Beam Chain, Dencun upgrade, Pectra upgrade, and other EIPs
Beam Chain
Beam Chain was proposed by Ethereum researcher Justin Drake at Devcon in Thailand. Beam Chain is Justin's proposal for redesigning Ethereum's consensus layer, aimed at upgrading the Beacon Chain, primarily related to MEV, lowering staking thresholds, achieving fast finality single slot finality, and making the entire consensus layer ZK-compatible. This proposal rides the wave of breakthroughs in SNARK technology, equivalent to an upgrade of the outdated Beacon Chain design from five years ago.
Dencun upgrade
The Ethereum Dencun upgrade went live on March 13, 2024, combining two core improvements: Deneb's consensus layer and Cancun's execution layer updates.
The highlight of the upgrade is EIP-4844 Proto-danksharding, allowing Rollups to send transaction, proof, and other data in the form of Blobs to Layer 1. Since Blobs serve as temporary storage and access for off-chain data, they significantly reduce the cost for Rollups compared to the original calldata. However, this also leads to a substantial decrease in Ethereum's revenue.
EIP-4844 is a rather controversial EIP. In the short term, it indeed leads to a significant drop in Ethereum's revenue and is one of the main criticisms against Ethereum; however, some refer to this EIP as 'a small step for Sharding, a big step for Ethereum's scalability', and its specific long-term impact remains uncertain.
The Dencun upgrade also includes some EIPs aimed at improving Ethereum's efficiency, such as EIP-7516, EIP-6780, EIP-5656, EIP-1153, etc. For specific details on the EIPs included in the Dencun upgrade, please see the following table.
Pectra upgrade
The Pectra upgrade combines two independent upgrades: the Prague execution layer upgrade and the Electra consensus layer upgrade.
The Pectra upgrade is a prelude to the Fusaka upgrade (specifically for implementing the Verkle transition). Since Ethereum developers unanimously believe that substantive changes should not be combined with Verkle, the Pectra upgrade is a series of other changes before implementing the Verkle transition. The Verkle transition represents the migration of all of Ethereum's state data from the Merkle Patricia tree structure to the Verkle structure.
This will enable nodes to generate smaller proofs related to state data, making it easier to transmit to other nodes, which is a prerequisite for achieving 'stateless clients'.
The Pectra upgrade is tentatively scheduled to activate on the mainnet in early 2025. Among them, the more significant is account abstraction EIP-7702, which primarily aims to extend smart account functionality to EOA.
EIP-7702 is an improvement on EIP-3074, proposed in May 2024. EIP-3074 was the community's first attempt to explore extending smart account functionality to EOA.
Unlike ERC-4337 (which introduces a smart contract called EntryPoint, allowing smart contracts to behave like user accounts), EIP-3074 requires implementing Ethereum hard forks to achieve account abstraction.
It primarily extends the smart account functionality to EOA by introducing two opcodes—AUTH and AUTHCALL.
EIP-7702 is a further improvement on EIP-3074. Unlike the opcode implementation of EIP-3074 for EOA's smart account model, with EIP-7702, EOA can now store an address called 'delegated pointer' that points to a smart contract.
When a transaction is sent to the EOA, it can execute the code at the specified address as if executing its own code, resembling the way 'delegated calls' work in smart contracts.
EIP-7702 addresses many concerns raised by EIP-3074 while bringing smart account functionality to EOA, providing complete compatibility with ERC-4337 and a clear upgrade path, and plans to be included in the Pectra upgrade.
Due to the shift in focus to Verkle Tree after the Pectra upgrade, EIP-7702 may be the last EIP related to account abstraction upgrades, as there may not be another two-year window to include account abstraction-related upgrades after this.
So far, other code changes regarding Pectra mainly include enhancements to user and smart contract developer experiences. For a more detailed introduction to the Pectra upgrade, please refer to this article.
Other EIPs
Not all EIPs approved through review need to wait for hard fork upgrades to begin use; Ethereum has also passed some major process/standard EIPs this year, such as cross-chain intent standard ERC-7683 and account abstraction standard ERC-4337 (ERC is a subset of EIP). These changes rely more on community recognition of the EIPs, specifically whether the community is willing to accept or actively implement them.
Some EIPs that need to wait for user, DApp, etc. acceptance to achieve widespread adoption can only begin to be used after the hard fork upgrade.
Interactivity: Cross-chain / Rollup standards
As Ethereum's Rollup-centric roadmap and the growing variety of Layer 1s develop, on-chain liquidity is fragmented, and one of the greatest advantages of on-chain, composability is gradually lost with the fragmented situation.
Interactivity has two gradient problems to solve: one is how to achieve fast, low-cost, and secure cross-chain asset transfers, and the second is how to achieve synchronous composability.
Currently, many protocols can solve the first gradient problem. Protocols like Across have greatly improved cross-chain speed, and transaction fees are also very low.
Due to its intent-based architecture, user cross-chain security issues have been fully transferred to the solvers. Currently, some proposals related to cross-chain / Rollup mainly focus on solving some preliminary standard issues.
Synchronous composability will subsequently be handed over to Based Rollup for implementation. Specific proposals related to cross-chain / Rollup are as follows:
ERC-7683
ERC-7683 is a cross-chain intent standard jointly proposed by Across and Uniswap, through which all intent interaction orders can share the solver network.
ERC-7683 combined with ERC-3668 and ERC-3770 will bring an initial interoperability experience to L2.
ERC-7683 creates a unified framework for cross-chain intent accessible to all solvers; EIP-3370 adds identification tags to blockchain addresses, clarifying the specific blockchain network to which an address belongs, preventing users from sending money to the wrong network; ERC-3668 CCIP Read effectively completes off-chain verification, providing a secure mechanism for obtaining off-chain data without additional trust assumptions, effectively automating the support of compatible L2 blockchains for lightweight clients without requiring any extra configuration from wallets.
RIP-7755 (L2 calling standard)
RIP-7755 is an L2 calling standard, which was launched on October 17 by the Base research team, aiming to achieve seamless cross-chain interoperability between different Ethereum Layer 2 networks, particularly mainstream second-layer networks like Optimism and Arbitrum.
The proof of concept for RIP-7755 applies to blockchains that meet the EIP-4788 standard, and it can currently verify the state of OP Stack chains and Arbitrum.
Conclusion
The above is an overall review of the major events experienced by Ethereum in 2024.
Of course, the journey of Ethereum in 2024 is far from over.
It also includes disputes with Solana, criticisms of unclear positioning and centralization, large institutions beginning to hold Ethereum spot ETFs (the Michigan pension fund disclosed holdings of over $10 million in Ethereum spot ETFs), large institutions launching tokenized products on Ethereum (UBS launched an Ethereum-based tokenized money market fund uMINT in Singapore, Wall Street giant Guggenheim tokenized $20 million in commercial paper on Ethereum), and V God publishing six articles about Ethereum's roadmap after facing a crisis, along with AMA responses on Ethereum Research Reddit, etc...
Ultimately, everything points to a pending question: what lies ahead in the future?
This article is collaboratively reposted from: Deep Tide
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