Written by: Zeqing Guo, Jeffrey Hu
Looking back at history, it is easy to find that many of the cutting-edge technology discussions in the Ethereum developer community have ultimately evolved into current daily application products, from DEXs and lending to rollups and DA; all have followed this path. This also contains opportunities for investment layout.
So, at this time point in early 2025, what valuable information can we capture from Ethereum's roadmap, recent DevCon, and the upcoming Pectra upgrade discussions next year? This article attempts to sort out and explore.
Ethereum's roadmap
The Ethereum roadmap has always been an important reference for observing future development directions, including various phases such as The Merge, The Surge, The Scourge, The Verge, The Purge, and The Splurge. Vitalik has also published extensively in October to introduce the content of each phase. Among them:
The Merge: The main completion is the execution layer and consensus layer, thus achieving the transition from PoW to PoS. However, The Merge also includes some improvements in the consensus protocol, such as single-slot finality and lowering the threshold for validators.
The Surge: The main discussion focuses on future scalability aspects, improving from the ground up to better serve rollups. Among them, EIP-4844 has gone live, with future key content including PeerDAS to reduce node pressure and cross-rollup interactions.
The Scourge: Mainly addresses some issues related to MEV, including excessive concentration of builders and MEV value being captured by large LSTs.
The Verge: Includes changing the underlying structure from Merkle trees to Verkle trees and snarking the EVM.
The Purge: Reducing the pressure of Ethereum node data storage and state maintenance through the deletion or archiving of historical data. It will also clean up some technical debt.
The Splurge: Some more cutting-edge improvements, including the EVM base layer, account abstraction, and other cryptographic applications (VDF, etc.).
We have extracted key improvements from these phases in the table below, introducing their main effects and outlining the current progress.
DevCon
In addition to the roadmap, another valuable source of information is the recent Ethereum DevCon conference, where current issues and potential solutions were discussed.
One of the most eye-catching topics at DevCon may belong to Beam Chain. The slightly sarcastic yet inaccurate 'Ethereum 3.0' reflects the community's desire for new development directions in the future. Beam Chain proposes many underlying improvements, including snarking the base layer and improving block generation and staking. However, the roadmap is expected to take about 5 years to complete, so it does not require too much additional attention for now.
https://www.youtube.com/watch?v=Gjuenkv1zrw
Topics related to rollups remain a hot topic during DevCon. Among them, the most discussed issue is the fragmentation of liquidity between rollups and the difficulties in interaction that affect user experience; many presentations and panels addressed this issue or related solutions. In addition, the current technical maturity of L2 was also discussed at the conference, as currently only Optimism and Arbitrum have entered Stage 1 (with permissioned fraud proof), while most other L2 projects remain at Stage 0 (centralized upgrades, no fraud proof, etc.) and need to synchronize with L1 upgrades.
Additionally, during DevCon, chain abstraction, pre-confirmation, cryptographic applications, future upgrades, and other topics were also discussed in depth. We will focus on introducing the Pectra upgrade content in the next section.
Pectra Upgrade
Recently, it is worth noting the Ethereum Pectra upgrade expected to be completed in Q1 2025, which will also include multiple relevant transformations from the underlying layer to the user end.
EIP-7702: AA
The most relevant to users is EIP-7702, which further develops EIP-4337 based on the design of EIP-3074, granting all EOA accounts the ability to temporarily convert to smart contract accounts, which can further improve user experience (one signature for multiple transactions, 0 gas, etc.). However, it may also increase security risks such as signature phishing. Meanwhile, EIP-7702 will apply to all EOAs, so wallets and other products should also be synchronized to adapt to this upgrade. Overall, the activation of EIP-7702 will still bring new opportunities to all AA projects. More information can be found in our previous report.
EIP-7691: Increase number of blobs
The Pectra plan aims to adjust the target number of blobs in each block from 3 to 6, and increase the maximum number of blobs from 6 to 9. Blobs provide cheaper storage space for rollups; increasing the number of blobs will further reduce the cost of rollups at the expense of increasing node operating costs and enhance Ethereum's DA competitiveness. Therefore, it will further benefit rollup-type projects. At the same time, the adjustment of target values and maximum values will make gas decrease more rapidly when blobs are unused, and gas will increase more slowly when blobs are at maximum capacity.
EIP-7251: Increase staking cap
The Pectra plan aims to raise the current staking cap from 32 ETH to 2048 ETH. Ethereum staking service providers and whales no longer need to distribute their ETH across multiple nodes but can merge it and place it in a single node, reducing the number of validators in staking.
Future Opportunities
All of the aforementioned technical changes or research discussions may bring about new changes and opportunities. We summarize some of the more important opportunities as follows.
Interoperability between Rollups
Whether from the roadmap or many shares from DevCon, the liquidity intercommunication and interoperability between Layer 2 (rollups) are the key focuses of developers.
Currently, the community has proposed different solutions from various levels to solve liquidity and interoperability issues between rollups.
Based Rollup: Since many L2s currently implement transaction ordering using their relatively centralized sequencers and then publish to L1, rapid and timely interaction cannot be achieved. One solution is to implement ordering functions via L1 to ensure atomicity of interactions between L2s that use this ordering function.
Shared Sequencer: In addition to based-rollups, another implementation method is for L2s to share a group of sequencers to complete interactions.
Cross-chain Intents: In addition to solving problems from the sequencer level, using intents to meet cross-rollup demands is another solution.
Currently, the aforementioned solutions are in progress, such as the Based Stack proposed by Spire Labs, which is expected to go live in Q1 2025 for implementing based rollups; the shared sequencer-related Astria, Espresso, and Polygon AggLayer are being launched and iterated; ERC-7683 is starting to be used by Unichain, Arbitrum, etc., to solve cross-chain liquidity issues; and the ERC-7802 introduced by Optimism can realize SuperchainERC20 to support a unified standard for assets within the superchain ecosystem and facilitate liquidity transfer. These different solutions may compete for the market's favor in 2025.
Account Abstraction
Since it involves all EOA account addresses, the activation of EIP-7702 will provide a new opportunity for AA projects. Moreover, EIP-7702, in combination with chain abstraction, intents, and other functions, may also build more complex cross-chain or multi-chain interaction capabilities. However, due to the previously lukewarm market performance of ERC-4337, the Pectra upgrade may also be the last opportunity for the AA track to validate PMF.
Therefore, after the Pectra upgrade in Q1 next year, teams that participated early in EIP-7702 and were prepared, such as Zerodev, may experience a new wave of growth, with specific effects soon to be seen.
Cryptographic Applications
Whether in the Ethereum roadmap or in DevCon discussions, cryptography-related technologies and applications remain a major topic. On the technical side, zkEVM and zkVM frameworks are gradually maturing, while ZKP combined with MPC, FHE, etc., may have more potential application combinations. Additionally, some cutting-edge cryptographic technology discussions during DevCon, such as the indistinguishability obfuscation (iO) praised as the crown jewel of cryptography, may also receive more attention.
In terms of application, cryptographic technologies will have many opportunities at the consumer end. Verification applications such as ZK Email (especially based on Aztec Noir) and zkTLS may see more adoption. Additionally, recent events, such as OFAC's sanctions against Tornado Cash being deemed overreach, may alleviate some concerns regarding compliance for privacy-related applications.
Special thanks to Zhixiong Pan and Yan for their review and suggestions on this article!
