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.

Ethereum is scheduled to undergo two major upgrades this year, namely the Shanghai upgrade that was completed on April 12, and the Cancun upgrade that is expected to be carried out in the fourth quarter. According to Ethereum official documents, 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.

To this day, blockchain technology is still an emerging technology. Although the basic concepts related to blockchain (cryptography, decentralization, peer-to-peer networks, and transactions) have been studied for decades, it was not until the birth of Bitcoin in 2008 that people believed that these concepts could be combined to create usable products. Ethereum, in particular, did not appear in people's vision in a public and usable form until 2015. Although the expected development timeline and specific details have changed, Ethereum has insisted on moving forward as planned and continuously upgrading the protocol to ensure improved usability, security, functionality and decentralization.

This year, Ethereum is scheduled to undergo two major upgrades, namely the Shanghai upgrade that was completed on April 12, and the Cancun upgrade that is expected to be carried out in the fourth quarter. According to Ethereum official documents, 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. This article will review and sort out the important hard forks and upgrades in Ethereum’s history, as well as introduce the changes that the Cancun upgrade may bring.

Frontier Update - July 30, 2015

July 30, 2015, is the date when the Ethereum genesis block was generated and the date when the first phase of Ethereum began. The launch of Frontier marks the official launch of the Ethereum blockchain network. This stage is mainly for blockchain developers, and node participants participate in the form of mining. At this stage, uploading smart contracts is supported.

The Frontier protocol contains the following key features:

Block Reward: When miners successfully mine a block on the Ethereum blockchain, they will receive a reward in ETH. In the Frontier phase, miners’ block rewards are 5 ETH per block.

Gas: In the early days after Frontier was released, the gas limit per block was hard-coded to 5,000 gas. Plainly speaking, this means that there will be no big action on the network. This leaves a buffer period for miners to start working on Ethereum and for early users to install clients. After a few days, this gas cap is automatically lifted and the network can start processing transactions and smart contracts as planned.

Canary Contract: This contract is used to inform users which chains have been attacked or are vulnerable to attack. The Canary contract is assigned a value of 0 or 1. If the contract is assigned a value of 1, the client can recognize that this is an erroneous chain and avoid this invalid chain when mining. In essence, these functions of the Canary contract allow the Ethereum core development team to suspend the operation of the network when there is a problem with the network. In the early stages of Ethereum, the Canary contract was an extremely centralized but indispensable protection mechanism.

Usability: All developer operations are performed through the command line because there is no graphical user interface. The entire network is available, but the user interface is very rough and only people who are familiar with Ethereum and have operational experience can use it.

The gas limit of each block was hard-coded to 5,000 Gas in the Frontier version. Then, the 5,000 Gas limit was removed in the Frontier thawing upgrade two months later, and the default price of Gas was set to 50gwei, and the difficulty bomb was introduced in this upgrade. The purpose of introducing the difficulty bomb is to provide a mechanism for the network to migrate from PoW to PoS. When the computing power is too high and the miners cannot dig out any block, It will be the best time for the network to convert to PoS. It can be said that in the initial stage of Ethereum, there was a plan to switch to PoS.​

Since then, Ethereum has officially entered the quasi-usable PoW mining era, and the price of Ethereum is now US$1.24 per coin.

Homestead Updates - March 14, 2016

The Homestead upgrade is the second major version released by Ethereum. It is the first hard fork of Ethereum and the date when the second phase of the roadmap begins. The most important feature of this version is the optimization of smart contracts and the introduction of new code for the smart contract language Solidity. In addition, the desktop wallet Mist was released in this version, allowing users to hold/trade ETH and write/deploy smart contracts. Later, the Mist project was announced to be terminated in early 2019.

The Homestead upgrade is one of the earliest Ethereum Improvement Proposals (EIPs) implemented, and includes 3 EIPs: 2, 7, and 8: EIP-2: Increase 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 (the recommended method) was higher than the cost of creating a contract through a transaction. Due to the increased gas cost of creating a contract through a transaction, EIP 2 encourages users to re-adopt the method of creating a contract through a contract.

EIP-7: Added a new function 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 improving the network upgrade plan with an eye on the future, which 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.

At this time, the price of Ethereum is $12.5 per coin.

DAO Fork - July 20, 2016

In addition to the planned Ethereum upgrades and hard forks, there is also an unplanned fork event that is worth remembering. In 2016, a decentralized autonomous organization project called The DAO raised $150 million by issuing tokens. In June, The DAO's contract was exploited by hackers, and tens of millions of dollars worth of ETH were stolen by unknown hackers. Most participants in the Ethereum community decided to implement a hard fork to restore the stolen ETH in the wallet and fix the vulnerability. However, the hard fork was not unanimously recognized by all participants in the community, and some participants continued to mine and trade on the original chain. The original chain where the stolen ETH was not restored is called Ethereum Classic (ETC). Since then, Ethereum has parted ways to form ETH and ETC, which is why Ethereum has two networks.

At this time the price of Ethereum is $12.54 per ether.

MetLife: The Byzantine Upgrade - October 16, 2017

At this time, Ethereum has gone through two major milestone upgrades, Frontier and Homeworld. According to the plan, the next step is the Metropolis upgrade, but the Metropolis upgrade has more content, so the plan was divided into two phases: Byzantium and Constantinople.

This hard fork includes 9 improvement proposals (EIP 100, 658, 649, 140, 196, 197, 198, 211, 214). In addition to updates related to the underlying layers such as opcodes and smart contracts, the "difficulty bomb" will be postponed to a year and a half later, and the block reward will be reduced from 5 ETH to 3 ETH. Before the difficulty bomb was removed, the block generation time was close to 30 seconds. The ability to make non-state change calls to other contracts has been added; some cryptographic methods have been added to allow Ethereum's Layer2 expansion.

At this time the price of Ethereum is $334.32 per ether.

Metropolis: Constantinople Upgrade - February 28, 2019

The second phase of the Metropolis upgrade, Constantinople, was originally scheduled to go live at the 7.08 millionth block in mid-January 2019. On January 15, an independent security audit company called ChainSecurity released a report stating that one of the five major system upgrades would give attackers the opportunity to steal funds. In response to the issues raised in the report, Ethereum core developers and other members of the community voted to postpone the upgrade until the security issue was resolved.

Finally, the Ethereum Foundation decided to carry out the last step of "Metropolis" on February 28, 2019, which is a hard fork called "Constantinople", which includes 6 improvements: ensuring that the blockchain will not be frozen before the PoS working mechanism is implemented; optimizing the Gas cost problem in the Ethereum virtual machine; adding interactive capabilities for address creation. Interestingly, there is also a hard fork called "St. Petersburg" in this upgrade, which removes a previous improvement proposal in Constantinople (EIP-1283). In this five major updates, in addition to technical-related adjustments, the difficulty bomb will be postponed for another 12 months, and the block reward will be reduced from 3 ETH to 2 ETH.

At the same time, EIP1014 introduces a new instruction CREATE2 that can pre-calculate the contract address before the contract is officially deployed, thereby introducing the concept of state channels similar to Bitcoin’s Lightning Network into Ethereum. The corresponding contract can be calculated off-chain before being deployed on-chain for settlement.

At this time the price of Ethereum is $136.29 per ether.

Istanbul Upgrade - December 8, 2019

Ethereum 2.0 plans to launch the first phase (Phase 0) in 2020. Before 2.0 is fully launched, most users and developers may mainly use Ethereum 1.X, so the subsequent updates of 1.X are also very important. The Istanbul hard fork was activated on December 8 and included 6 improvements: continuing to optimize the Gas cost issue in the Ethereum virtual machine; improving resilience to distributed denial of service attacks; improving the performance of Layer2 expansion solutions developed based on SNARKs and STARKs verification mechanisms; achieving interoperability between Ethereum and Zcash; and allowing Ethereum smart contracts to introduce more creative features.

Vitalik Buterin said that after this upgrade, the normal number of transactions per second (TPS) will increase by about 5% to 10%, while for Layer 2 technology Rollup, it can increase by about 4 times.

At this time, the price of Ethereum is $151.06 per ether.

Muir Glacier Upgrade - January 2, 2020

Less than a month after completing the Istanbul upgrade, Ethereum urgently carried out another temporary upgrade. It is very rare to have two hard forks within a month. The reason is that users and developers have found that the block generation interval of Ethereum has increased slightly recently, which will cause the TPS of the Ethereum network to decrease. Ethereum developers discussed it, and someone proposed a hard fork codenamed "Muir Glacier" at block height 9,200,000 to remove the difficulty bomb, which is expected to occur around December 31, 2019. According to the data from the developers in the discussion group, Ethereum's block generation time will continue to increase before the difficulty bomb is removed, and may reach 25 to 30 seconds around January 6.

At this time the price of Ethereum is $127.18 per ether.

Berlin Upgrade - April 15, 2021

Starting from this version, the upgrade code will follow the order of Ethereum developer conference Devcon, and the first Devcon 0 was held in Berlin. Ethereum has planned many improvements for Istanbul before, but due to various reasons, some of the improvement proposals that were not put into Istanbul in time will be moved to Berlin. This time, the gas cost problem in the Ethereum virtual machine is optimized; and support for multiple transaction types is added.

At this time the price of Ethereum is $2454 per ether.

London Update - 5 August 2021

This upgrade involves a total of five proposals: EIP-1559, EIP-3198, EIP-3529, EIP-3541 and EIP-3554. One of the EIPs that has the greatest impact on Ethereum is EIP1559, which aims to change the existing Ethereum transaction fee structure, split the transaction fee into a base fee (basefee) and a miner’s fee, and reduce the circulation of ETH by destroying part of the base fee.

It directly changed the economic model of Ethereum. Previously, block packaging was an auction mechanism, and the highest gas price won and all was given to the miners. EIP1559 divides the gas fee into two parts, one part is given to the miners, and the other part is burned, thus bringing Ethereum into the era of deflation.

At this time, the price of Ethereum is $2,621 per ether.

The Merge - September 15, 2022

This upgrade (merge) is an upgrade that directly modifies the Ethereum execution layer and consensus layer. It is an important upgrade that transforms the Ethereum mainnet from the PoW consensus mechanism to the PoS consensus mechanism. This upgrade has brought about some rule changes to the Ethereum network. The specific changes are as follows:

Verification node changes: The original miner nodes will be replaced with verification nodes. The verification node needs to have 32 ETH as a deposit and run the corresponding software to participate in network verification and block packaging.

Block reward changes: The original block reward will be cancelled, and instead, revenue will be earned through transaction fees.

Changes to transaction fee mechanism: In the new version, transaction fees will be paid directly to the validator nodes instead of the Ethereum Foundation.

Improvement of dynamic transaction fee mechanism: A new feature called “EIP-1559” has been added to the new version, which can dynamically adjust the transaction fee price, allowing users to complete transactions faster and reduce excessive transaction fees.

Optimization of state storage method: The new version adopts a technology called “Rollups” to store large amounts of data on the side chain and aggregate them on the main chain, thereby reducing the burden on the main chain and improving the efficiency and scalability of the entire system.

Improved contract execution method: The new version adds a virtual machine called "EVM 384", which can improve the efficiency and security of contract execution.

In general, the Ethereum 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.

At this time the price of Ethereum is $1,472 per ether.

Shanghai Upgrade - April 12, 2023

The Shanghai upgrade will be the first major upgrade of the Ethereum network after the merger, and it is also an important milestone on the Ethereum roadmap. The main changes it brings are:

The Shanghai upgrade unlocks Ethereum’s staking withdrawal function. This will not only help maintain the vitality of the Ethereum network, but also be beneficial to the future sustainable development of Ethereum and continue to attract more validators to the Ethereum network.

Reducing the gas fees of Layer-2 solutions running on the Ethereum blockchain has made Ethereum faster and cheaper to a certain extent. The Shanghai upgrade will further optimize the gas fees of transactions on Ethereum.

As the largest blockchain network that supports smart contracts, the Shanghai upgrade will maintain Ethereum’s leading position in this field by introducing EOF (EVM Object Format).

At this time the price of Ethereum is $1,917 per ether.

Cancun Upgrade - Q4 2023 (estimated)

The Cancun upgrade is an additional upgrade to the ETH blockchain after the Shanghai upgrade, with EIP-4844 and possible EIP-6969 mainly to promote Ethereum L2 to achieve the goal of reducing costs and increasing speed: by then, the speed of Ethereum Layer2 will be increased by 10 times, and there is even a chance to increase it by 100 times and at a lower cost.

The fees of Ethereum Layer1 have remained high, and necessary improvements are urgently needed to reduce the overall operating costs. At present, the expansion solution on Ethereum is mainly Layer2 Rollups. Rollups do help users save a lot of Gas Fee. For example, the representative project Optimism has a regular Gas Fee of only 0.001 gwei, which is much lower than the regular cost of Ethereum Layer 1 mainnet; ZK Rollups' solution has better data compression performance and does not need to include signature data, so the fee is lower, even down to one percent of Ethereum Layer 1 mainnet. However, for a wider range of users, even after the Rollups solution, Gas Fee is still a relatively expensive burden. In addition, Ethereum's efficiency in handling parallel transactions is still low, and it can only process a maximum of double-digit transactions per second. These require new improvements to help improve scalability.

Sharding is a powerful improvement method to solve the above problems, but it cannot be implemented on Ethereum now. The timely proposal of the improvement plan EIP-4844 is to find a balance between solving the above needs and implementing sharding upgrades, which can be applied to Ethereum at this stage, and lay the early technical foundation for Ethereum to realize overall data sharding in the future. Therefore, EIP-4844 is also called "Proto-danksharding".

EIP4844 introduces a new transaction type to Ethereum, which can store data at a cheaper cost in a space called Blob, so that the data previously stored in Layer1 by Layer2 can be stored in Blob, greatly reducing the cost of Layer2.

In addition to the highly anticipated EIP-4844, the improvement proposals that have been confirmed for implementation in this Cancun upgrade include:

EIP-1153: Add Transient Storage Opcodes. Transient storage is a solution specifically designed to solve internal communication within the block.

EIP-6780: Modify the function of the SELFDESTRUCT opcode to prepare for the future application of Verkle Tree architecture in Ethereum.

In addition to ETH itself, there are some projects worth investing in under the Cancun upgrade:

The biggest beneficiary of the Layer 2 Cancun upgrade is undoubtedly Layer 2. Arbitrum and Optimism, which have sufficient first-mover advantages and are L2 leaders, deserve attention. At the same time, leading applications in the Arbitrum ecosystem such as GMX, RDNT, and Magic will also follow suit. The tide is rising with the outbreak of L2. In addition, projects that imitate Optimism such as Metis, which is built and improved on OptimisticRollup, and Boba Network are also expected to receive dividends from the Cancun upgrade.

  ZK-Rollups

ZkRollup, considered a more advanced solution by the industry, is also expected to shine as Cancun upgrades. zkSync, StarkNet and Scroll are the three most well-known projects in this field; these three projects have not yet issued coins, but their potential cannot be underestimated.​

ZkSync is an extension solution developed by Matter Labs based on the ZK-Rollup architecture. It is mainly aimed at the 1.0 mainnet for payment purposes and the general 2.0 testnet that is fully compatible with EVM. Recently, zkSync has also upgraded the 2.0 entry to support the use of any token to pay network fees, greatly improving user flexibility.

Starknet is a decentralized Validity-Rollup that runs on Ethereum as an L2, enabling any application to massively scale without compromising the composability and security of Ethereum.

Scroll is a zkRollup based on zkEVM on Ethereum. As an L2 solution, it solves Ethereum’s congestion problem.

other

In addition to the above two categories, the Cancun upgrade will also benefit other centralized projects. Including cross-chain protocols with similar functions to L2; because Blob data has a short storage time, it will benefit data availability layer projects. Among them, the representatives are: Layerzero is currently the most popular cross-chain protocol. It is a cross-chain communication protocol that can transfer "information" on one chain to another chain, and realize decentralized information cross-chain services by deploying a series of smart contracts (Endpoints) on the chain.

Celestia is a data availability layer project. Based on the Cosmos architecture, it provides data layer and consensus layer for other L1 and L2 to build a modular blockchain. The principle is the same as the Ethereum sharding solution, which can reduce the current transaction fee bottleneck of Rollup, "data storage cost", to a certain extent.

With the implementation of EIP-4844, L2 will be more competitive than other L1s, and its future development prospects are relatively large. In addition to greatly reducing the transaction fees of L2, EIP-4844 also provides a good soil for the future application of Danksharding, so that data sharding can be easily realized in the future. Lower transaction fees, better transaction experience, and even more application scenarios, the Cancun upgrade will become a turning point for Ethereum L2.