Ups and downs: A review of Ethereum’s changes and journey in 2024

Written by: Tia, Techub News Ups and downs, or perhaps "crisis lurks on every side"... This year is an unusual year for Ethereum. There have been climaxes after the approval of the US spot ETF, as well as the crisis of facing competition from Solana and various "anti-Ethereum" remarks. In addition to personnel changes, a researcher joined Eigenlayer as a consultant and later resigned from the Eigenlayer position to better develop Ethereum. There was also the issue of BeamChain and liquidity fragmentation raised at Devcon. Everything highlights this unusual year. Ups and downs in price trendsFrom the Ethereum price chart, we can already understand how many ups and downs it has experienced. From more than two thousand dollars at the beginning of the year to more than four thousand dollars in March, back to the beginning of the two-digit, and then rose to more than four thousand dollars again, it is full of drama and uncertainty. On January 11, 2024, the U.S. Securities and Exchange Commission (SEC) document showed that the SEC approved 11 spot Bitcoin ETFs for listing. Riding on the east wind of ETFs and the expectation of Ethereum's approval of ETFs, Ethereum has soared all the way. In just over a month, the price has nearly doubled. On July 23, the U.S. spot Ethereum ETF was launched. Although the trading volume of the spot Ethereum ETF was hot after it was launched, the trading volume exceeded 200 million U.S. dollars in just 45 minutes. However, since the price increase in the first half of the year has already included the expectation of issuing Ethereum ETFs, the U.S. spot Ethereum ETF went online and did not achieve excessive increases. Because there is no sustainable innovation in the industry to support high prices, after the Ethereum price has been running wild, in August, the price began to fall wildly again. Starting from July 30, the price of Ethereum began to fall for 7 consecutive days. It fell from a high of $3,366 to a low of $2,111. After that, it was a long period of sideways trading.   Until President Trump won the election, it was on a high again, pulling Ethereum from the beginning of 2 to a high of $4,170.   The 7-day decline and 7-day rise, as well as the roller coaster-like exponential rise and fall, reflect the extremely high volatility of the crypto market, and also show the emotions, expectations and external events of market participants. (Yes. This is crypto 🕶️)   Behind the rise and fall is a series of iron logic that we have to admit. For example, the sharp rise in expectations for the listing of Ethereum ETFs after the approval of Bitcoin ETFs at the beginning of the year; the waterfall-like decline back to the starting point caused by the inability of ETFs alone to sustainably drive an industry that lacks real innovation and lasting market demand; and the crazy rise in Ethereum prices after Trump came to power due to his optimism about cryptocurrencies... Looking back at the price trend of Ethereum, it is not difficult to find that its ups and downs are not only driven by external macro factors, but technological progress often plays an important role in it.From the launch of Ethereum 2.0, to the implementation of Layer2 scalability solutions, to the continuous optimization and update of the Ethereum network, every technological breakthrough has become the focus of the market. However, the gains brought about by these advances 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 to redesign the Ethereum consensus layer. The proposal is a further upgrade of Beacon Chain. The main goals are related to MEV, lowering the staking threshold, achieving fast finality single slot finality, and ZKing the entire consensus layer. This proposal, riding on the momentum of the SNARK technology breakthrough, is equivalent to an upgrade of the old Beacon Chain design from 5 years ago. Dencun Upgrade   The upgraded version of Ethereum Dencun was launched on March 13, 2024. The hard fork combines two core improvements: the Deneb consensus layer and the Cancun execution layer update. The highlight of the upgrade is EIP-4844 Proto-danksharding. Rollup can send data such as transactions and proofs to Layer1 in the form of blobs. Since blobs are temporary storage and access to off-chain data, using blobs will make the cost of Rollup much lower than the original calldata. But it also caused a significant drop in Ethereum's revenue.   EIP-4844 is a controversial EIP. In the short term, it is indeed the reason for the sharp drop in Ethereum's revenue and one of the main reasons why Ethereum is criticized; but some people call this EIP "a small step for Sharding and a big step for Ethereum's expansion". In the long run, its specific impact is still unknown. The Dencun upgrade also includes some EIPs that improve the efficiency of Ethereum usage, such as EIP-7516, EIP-6780, EIP-5656, EIP-1153, etc. The specific EIPs included in the Dencun upgrade are detailed in the table below.   EIP-4788 consensus layer improves the information exchange problem between the Ethereum execution layer and the consensus layer. Before EIP-4788, EVM could not directly access the latest directory, it had to rely on indirect methods to understand what was happening in the beacon chain. EIP-4788 proposes to put the beacon block root (the hash tree root of the digest or parent block) into each EVM block.In this way, the transmission of information and data can be completed without relying on a third party. EIP-7044 Consensus Layer Improves the exit mechanism of Ethereum staking EIP-7045 Consensus Layer Extends the maximum time for Attester to submit proofs. EIP-7514 Consensus Layer Introduces restrictions on the "epoch churn limit" to limit the growth rate of the number of Ethereum validators. EIP-4844 Execution Layer EIP-4844, also known as the proto-danksharding proposal, reduces the Gas cost of Layer2 data published on the Ethereum mainnet by implementing temporary storage and access to off-chain data. EIP-7516 Execution layer is an opcode that returns the current data blob basic fee. EIP-6780 Execution layer is an opcode that allows smart contracts to delete themselves from the blockchain. EIP-5656 Execution layer is an opcode that optimizes the process of copying data in memory EIP-1153 Execution layer is an opcode that allows smart contracts to use transient storage, that is, the storage is cleared at the end of transaction execution. Pectra Upgrade The Pectra upgrade combines two separate upgrades: the Prague execution layer upgrade and the Electra consensus layer upgrade. The Pectra upgrade is an upgrade before the Fusaka upgrade (which is specifically designed to implement the Verkle transition). Since Ethereum developers agree that other substantive changes cannot be combined with Verkle, the Pectra upgrade is a series of other changes before the implementation of the Verkle transition. The Verkle transition represents the migration of all Ethereum state data from the Merkle Patricia tree structure to the Verkle structure. This will enable nodes to generate smaller proofs about state data, which can be more easily passed to other nodes, and is a prerequisite for achieving "stateless clients". The Pectra upgrade is tentatively scheduled to be activated on the mainnet in early 2025. So far, Pectra's code changes mainly include improving the experience of users and smart contract developers, so it is expected that the upgrade will not have a large impact on the value of ETH. For a more detailed introduction to the Pectra upgrade, please refer to this article. Other EIPs   Not all EIPs that have passed the review need to be used after the hard fork upgrade. Ethereum has also passed some major process/standard EIPs this year, such as the cross-chain intent standard ERC-7683 and the account abstraction standard ERC-4337 (ERC is a subset of EIP). Such changes rely more on the community’s recognition of the EIP, that is, whether the community is willing to accept or actively implement it.Some EIPs that need to be used after a hard fork upgrade also need to wait for the acceptance of users, DApps, etc. before they can be widely adopted. Account abstraction EIP-7702 EIP-7702 is an improvement of EIP-3074 and was proposed in May 2024. EIP-3074 is the community's first attempt to explore the extension of smart account functions to EOA, that is, without. Unlike ERC-4337 (which introduces a smart contract called EntryPoint so that smart contracts can behave like users' accounts), if ERC-4337 is a way to implement account abstraction without changing the execution layer or consensus layer, EIP-3074 requires an Ethereum hard fork to implement. It mainly extends the smart account function to EOA by introducing two opcodes, AUTH and AUTHCALL. EIP-7702 is a step further than EIP-3074. Unlike EIP-3074, which implemented EOA’s smart account model through opcodes, with EIP-7702, EOA can now store an address called a “delegate indicator” that points to a smart contract. When a transaction is sent to EOA, it can execute the code at this specified address as if it were its own code, similar to how “delegate calls” work in smart contracts.   While bringing smart account functionality to EOA, EIP-7702 addresses many of the concerns raised by EIP-3074, provides full compatibility and a clear upgrade path with ERC-4337, and is planned to be included in the Pectra upgrade.   Since the focus will shift to Verkle Tree after the Pectra upgrade, EIP-7702 may be the last EIP for account abstraction-related upgrades, as there may not be another 2-year window to include account abstraction-related upgrades after this. Interoperability: Cross-chain/Rollup Standards With Ethereum’s Rollup-centric roadmap and the growing number of Layer1s, on-chain liquidity is fragmented and one of the biggest advantages of the chain, composability, is gradually lost with the fragmentation. There are two levels of interoperability problems that need to be solved: one is how to achieve fast, low-cost and secure cross-chain of assets, and the second is how to achieve synchronous composability. At present, there are many protocols that can achieve the first level of problems. Protocols like Across have greatly improved cross-chain speeds and have low fees.Due to its intent-based architecture, the security issues of user cross-chain have also been completely transferred to the solver. At present, some proposals related to cross-chain/Rollup are mainly committed to solving some preliminary standard issues. Synchronous composability will be subsequently transferred to Based Rollup for implementation. Specific proposals related to cross-chain/Rollup are as follows: ERC-7683 ERC-7683 is an intent cross-chain standard jointly proposed by Across and Uniswap. Through this standard, all intent interoperability orders can share the solver network. RIP-7755 (L2 call standard) RIP-7755 is an L2 call standard. The POC was launched by the Base research team on October 17. It aims to achieve seamless cross-chain interoperability between different Ethereum Layer2 networks, especially mainstream second-layer networks such as Optimism and Arbitrum. The proof of concept of RIP-7755 is applicable to blockchains that comply with the EIP-4788 standard, and the status of the OP Stack chain and Arbitrum can be verified. Summary The above is an overall review of the major events that Ethereum experienced in 2024. Of course, the journey of Ethereum in 2024 is far more than that. It also includes the dispute with Solana, criticism of unclear positioning and centralization, large institutions began to hold Ethereum spot ETFs (Michigan Pension Fund disclosed that it held more than 10 million US dollars of Ethereum spot ETFs), large institutions launched tokenized products on Ethereum (UBS launched uMINT, a tokenized money market fund based on Ethereum in Singapore, and Wall Street giant Guggenheim tokenized 20 million US dollars of commercial paper on Ethereum), and after facing the crisis, V God published 6 articles on the Ethereum roadmap, and conducted AMA answers on Ethereum Research Reddit, etc. In the end, everything points to an unresolved question, where is the future?