1. Introduction: Ethereum’s sluggish performance and future concerns
Ethereum’s recent market performance has been unsatisfactory, a phenomenon that has caused concern among many community members. Ethereum’s price growth has significantly lagged Bitcoin and Solana so far this year. Especially since Ethereum decided to adopt a modular architecture strategy, the value growth of its network seems to have failed to meet expectations. In this context, many people can’t help but ask: Is Ethereum’s strategic choice correct? Does the future direction still need to be adjusted? This article will conduct an in-depth discussion around the current status, Beam Chain proposal, modularization strategy, and future challenges and opportunities.
2. Current situation analysis: Ethereum’s performance in the market
2.1 Price performance comparison
If you compare the market performance of Ethereum with Bitcoin and Solana, you will find that Ethereum has significantly lagged behind in this cycle. According to tradingview data, the price of Ethereum has increased by 150% since the beginning of 2023. In comparison, Bitcoin has increased by 422% and Solana has increased by 1,629%. It is generally believed that Ethereum’s choice of modular architecture is an important reason for its poor price performance.
Data source: https://www.tradingview.com/x/zfBGgFQv/
2.2 Short-term impact of modular architecture
The modularization strategy allows Ethereum to give up some infrastructure services and hand over functions such as execution, settlement, and data availability to Layer 2 (L2) or other independent projects. This means that Ethereum’s core source of income is network handling fees. Reduced. The EIP-1559 mechanism introduced by Ethereum shrinks the supply by destroying part of the handling fees, thereby supporting the price. However, with the rise of Layer 2, the effect of this strategy has gradually weakened. In other words, although the modularization strategy enhances the flexibility and scalability of the Ethereum ecosystem, it has a negative impact on the price of ETH in the short term.
2.3 Overall value of the ecosystem
Looking at the market value of the entire ecosystem, Ethereum and its modular infrastructure tokens will create a value comparable to Solana in 2023, totaling approximately $50 billion. However, in 2024, this performance has declined, which may be due in part to the wavering of market confidence in modular strategies, as investors gradually become confused by decentralized infrastructure tokens and find it difficult to grasp the growth potential of the entire ecosystem.
3. Beam Chain Proposal: Opportunities and Challenges of Redesigning the Consensus Layer
3.1 Core content of the Beam Chain proposal
At the Devcon conference, Ethereum Foundation researcher Justin Drake proposed a consensus layer upgrade proposal called "Beam Chain". The Beam Chain, called "Ethereum 3.0", aims to improve the performance and security of Ethereum through large-scale upgrades. Sexuality is significantly improved.
Beam Chain’s goals include:
Speed up block production, reducing block time from the current 12 seconds to 4 seconds
Achieve a smaller validator staking threshold, reducing it from 32 ETH to 1 ETH to attract more new users to participate in staking
Use SNARK technology to achieve "chain SNARKization" to improve efficiency and security
Justin Drake regards this proposal as a sign that Ethereum has entered the "ZK era" and will ensure that Ethereum remains safe in the face of quantum computing threats in the future by using post-quantum encryption hash and signature schemes.
3.2 Batch upgrade and accelerated fossilization
The Beam Chain proposal plans to implement multiple major changes at once. Although it can accelerate Ethereum into maintenance mode and reduce long-term uncertainty, it also increases systemic risks. Péter Szilágyi expressed concern about this, believing that large-scale bundle upgrades may lead to some potential problems not being discovered. It will take time for the community and the system to gradually adapt to these changes, and iterative upgrades may be more secure.
4. Reflection on Ethereum’s modular strategy
4.1 Advantages of modular strategy
Since Ethereum decided to adopt a modular architecture in 2020, its impact has gradually emerged. The modular strategy aims to decompose different functions and hand them over to multiple projects, such as Layer 2 processing execution, Celestia and other projects to handle data availability. This architecture makes Ethereum more adaptable and scalable. In this way, Ethereum is able to maintain the flexibility of the ecosystem and adapt to unpredictable technological changes in the future.
Flexibility: Modularity allows Ethereum to quickly adapt to new technologies, such as the integration of SNARK and zkEVM.
Scalability: Expanding the surface area through Layer 2 reduces development and user costs.
Reference source: https://ethereum.org/zh/layer-2/
4.2 Disadvantages of modularization
However, this strategy also brings short-term economic and technological negative consequences:
Reduced handling fees: The rise of Layer 2 has diverted the handling fees originally belonging to the Ethereum main network, affecting the price of ETH.
Reduced user experience: The complexity of modularization means that ordinary users may face problems such as complex operations and limited mobility when using Layer 2.
Centralization risk: The concentration of holdings of some infrastructure tokens may have an adverse impact on the decentralization of the network.
5. Historical summary: from "merger" to the present
5.1 Review of "merger" in 2022
"The Merge" in 2022 is one of the most important upgrades in the history of Ethereum. It marks Ethereum's shift from Proof of Work (PoW) to Proof of Stake (PoS), significantly reducing the energy consumption of the network, and This lays the foundation for future scalability improvements.
The merger not only improves the energy efficiency of the network but also paves the way for future scaling solutions such as sharding. With the proposal of Beam Chain, Ethereum is gradually moving towards achieving a more efficient and sustainable blockchain ecosystem, and merger is a key step in this journey.
5.2 Development after merger
Energy efficiency improvement: The introduction of PoS has reduced network energy consumption by 99.5%.
The rise of staking: validators replace miners, making the network more decentralized and efficient.
Foundation for future expansion: The merger lays the technical foundation for expansion solutions such as sharding and Beam Chain.
6. Future plans and challenges
6.1 Implementation Roadmap
The implementation of Beam Chain is divided into multiple stages:
2025: Specification formulation stage
2026: Formal development stage
2027 and beyond: A testing phase lasting at least two years to ensure the security of new technologies before being deployed on mainnet
6.2 Technical and governance challenges
This long timeline also reflects the complexity of technical implementation and the difficulty of governance coordination. In addition, how modularization and Beam Chain work together is also a major challenge in the future. Modularization expands the "surface area" of Ethereum through Layer 2, while Beam Chain aims to enhance the core performance of the consensus layer. The combination of the two will determine the balance point of Ethereum's future expansion and security.
6.3 Key issues that need to be addressed
Technical complexity: The integration of technologies such as on-the-fly SNARKization and post-quantum encryption is extremely difficult.
Governance coordination: Requires broad community support and close collaboration among multiple development teams.
System security: When introducing new technologies, new vulnerabilities must be avoided to ensure the long-term security of the network.
7. Refutation and critical thinking
7.1 Advantages of phased upgrade
Regarding the Beam Chain proposal, Péter Szilágyi made some critical points. He believes that Beam Chain attempts to revolutionize the consensus layer by introducing multiple changes at once, which may increase systemic risks, especially without sufficient time for testing and evaluation. In contrast, it may be more prudent to implement low-difficulty improvements gradually, and then consider a comprehensive reconstruction when necessary, and is more in line with the concept of gradual evolution of Ethereum.
7.2 Centralization issues in modular ecology
The complexity of modularization and the risk of centralization also require attention. Although modularization enhances the flexibility of the Ethereum network, it also increases the complexity of user operations. Especially when transferring between multiple Layer 2, the user experience may be greatly compromised. In addition, the concentration of holdings of some Layer 2 development teams and infrastructure tokens may have an adverse impact on the decentralization of the network.
8. Comparison of competing products: analysis of Solana and other L1 blockchains
8.1 Solana's "monolithic" structure
Compared with Ethereum's modular strategy, Solana has chosen the development path of a "monolithic" blockchain, attracting a large number of users and developers by directly achieving high throughput and low latency at Layer 1. This gives Solana certain advantages in user experience, especially since users do not need to worry about cross-layer complexity.
High throughput: Solana achieves significant performance advantages through parallel processing and an efficient consensus mechanism.
User-friendliness: Since no cross-chain operations are required, the user experience is relatively simple and intuitive.
8.2 Scalability and future challenges
However, this "monolithic" structure also has inherent scalability bottlenecks. Once system requirements exceed its design capabilities, Solana may need to rely on external expansion solutions, which is contrary to its current design philosophy. In contrast, Ethereum’s scalability through modularization and Layer 2 solutions enables it to respond more flexibly to future technical challenges and market needs.
Scalability limitations: The scalability of the monolithic structure is limited, and it may be necessary to break through the limitations of the existing architecture in the future.
Insufficient flexibility: Solana is not as flexible as Ethereum in terms of technological innovation and cannot quickly integrate new technologies through modularization like Ethereum.
9. Summary: How will the future of Ethereum evolve?
9.1 The combination of modularization and Beam Chain
The combination of Beam Chain and modular architecture represents an important attempt by Ethereum in expansion and technological innovation. In the next few years, the success of Beam Chain will determine whether Ethereum can continue to maintain its leading position as a smart contract platform. At the same time, while Ethereum’s modular strategy enhances network adaptability, it also needs to solve the problems of centralization and user experience.
9.2 Ecosystem activity and innovation
In general, the future of Ethereum depends on the activity and innovation of its ecosystem, as well as the community’s support and consensus on the technical route. In the ever-changing technology and market environment, only through continuous innovation and iteration can Ethereum truly realize its vision of a "world computer" and stay ahead of the next wave of blockchain technology.
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