Interview with the Ethereum Foundation: Can 1559 be on time? Will POW end? Worried about sidechain competition?
AMA time: the morning of July 23rd, Beijing time
First, we welcome two guests from the Ethereum Foundation: Tim Beiko: Coordinator of the AllCoreDevs Call; Hsiao Wei: Ethereum Researcher.
We know that both investors and miners of Ethereum are very concerned about the upgrade of Ethereum in the future. And in my latest survey, more than 4,000 readers on Chinese social media Weibo, 55% prefer Ethereum to Bitcoin. Chinese investors and industry have been important supporters of Ethereum since its very early days.
Since last year, the DeFi ecology of Ethereum has developed vigorously, but there have also been challenges brought about by insufficient performance and side chains. I believe everyone also has many problems.
One: Congratulations on the upcoming completion of the London upgrade. Can you briefly introduce the significance of this upgrade to the development of Ethereum. There was a joke yesterday about the 1559 being delayed, so will it really be delayed this time?
Tim Beiko: London will bring some big changes to Ethereum. The most anticipated is EIP-1559, which provides a better user experience and economics for the Ethereum network. Other interesting changes are EIP-3529, which will improve the way smart contracts handle gas refunds, and EIP-3541, which preserves some specific instructions in the EVM to allow more functionality to be added in future upgrades.
Jokes aside, the only reason we might be postponing London is safety concerns. We found a bug yesterday and fixed it today. We'll be discussing the best ways to secure the Ethereum network tomorrow on the AllCoreDevs call
Two: We all know that the London upgrade will have a certain impact on Ethereum miners. Could you please introduce it in detail? It was previously said that EIP-1559 would reduce the income of miners by 10-30%. Is this calculation accurate? Will it drive miners to invest more in MEV?
Tim Beiko: Indeed, EIP-1559 cuts some of the transaction fee income of miners, but not all. In each block, baseFeePerGas is specified, which is the minimum effective Gas Price that you need to pay in that transaction. The baseFeePerGas is multiplied by the amount of gas used in the transaction to obtain the base fee for the transaction, and this part of the fee will be destroyed.
However, the transaction also specifies a priority fee (priorityFee), which goes to the miner. This fee is like a "tip" that compensates miners for the risk of mining uncle blocks (uncle blocks are not included in the main chain). Empty blocks propagate across the network faster than full blocks and are therefore less "risky". priorityFee is to pay miners for this risk.
For MEV, it is usually paid by users who have strong transaction prioritization needs, not just wanting transactions to be included in the current block, but wanting to be included as the first transaction in the current block. Because of the existence of valuable arbitrage opportunities (such as front-running on decentralized exchanges), people are willing to pay miners a lot of fees to get the first position in the block. We’ve seen growth in this regard: around 60% of blocks now have MEV transactions, up from close to 0% at the start of the year.
So 1559 won't affect that directly, but since it lowers miners' income a bit, some miners are looking for other sources of income.
We don't yet know how much miner revenue will drop. The best analysis is here: https://insights.deribit.com/market-research/establishing-bounds-for-miner-revenue-in-eip-1559/
Three: After the London upgrade, the existing Gas Token token scheme will be invalid. Is there any alternative alternative for the developer community?
Tim Beiko: Yes, EIP-3529 in the London upgrade will invalidate the Gas Token solution. Gas Tokens are bad for the network because they fill the network with "junk data" when gas prices are low and create large blocks when gas prices are high. This caused network instability, so it was decided to remove it in London. As far as I know, there aren't any alternatives.
Four: Is there a timetable for the merger of ETH 1.0 and 2.0? When will Phase 1 of ETH 2.0 start? It was previously said that POW will stop as early as the end of this year. Is there a new timetable?
Hsiao Wei：Eth1<>Timeline for Eth2 to merge and stop PoW, you can check out Trent's awesome chart for an approximate timeline:
https://twitter.com/trent_vanepps/status/1415741658067517441
This year, developers have had some hands-on proof-of-concept merge prototypes in Eth1/Eth2 implementations. The good news is that, thanks to Mikhail and his colleagues, it entered the EIP process yesterday: https://github.com/ethereum/EIPs/pull/3675
IMHO it is more feasible to merge in early 2022 to have confidence that the required testing will be done in time. Safety is always the number one priority, and we never rush into anything. Regardless, this is indeed happening, and soon, we will see a pure PoS Ethereum. If you're considering purchasing Ethash hardware today, consider the time frame when calculating price/performance.
(Someone asked, in the transition to 2.0 in 2022, should the POW mining mechanism also coexist with POS for a period of time? Tim Beiko replied: The coexistence may continue until the merger, but there will be no PoW after the merger)
>When will the first phase of ETH 2.0 start?
To be clear, Phase 1 means data sharding Ethereum. The R&D process for sharding is parallel to other topics (merging, light clients, etc.). I think we will define the scope of basic sharding features and advanced sharding patches (eg, proof of escrow, data availability sampling) this year to get a clearer picture of the timeframe.
Five: Regarding the PoS transition, what are the current concerns or biggest challenges for developers?
Hsiao Wei: I think in general, as with all Ethereum planned upgrades, our concerns can be categorized as:
- Security: all possible edge cases, attack models during and after transition
- Simplification: how to simplify the current specification
- UX: How to integrate Eth1 and Eth2 software well
- Communication: governance and user education
Six: Will developers worry about challenges from side chains such as BSC and Polygon?
Tim Beiko: As people involved in the core development of Ethereum, we try to focus on our core strengths, rather than being distracted by fear of "competition". Developers and users are free to build/use whatever they like. We will continue to develop Ethereum to be stronger and more secure for the projects/users it has. The cryptocurrency market can be fraught with uncertainty, so we don't usually consider trying to build expectations for other L1s. Personally, I look forward to Layer 2 protocols providing Ethereum users with more secure and trustless features like sidechains or other L1s.
Seven: Now the market thinks that it seems to be turning from bulls to bears. What impact will the changes in the market have on the important upgrade of Ethereum in the next six months to one year?
Tim Beiko: I don't think this has changed much for Ethereum. Researchers and developers have been building for years and will continue to build more. Like @hwwang said, we will focus on security, ensure protocol changes are extensively tested before going live, and continue to work on improving Ethereum.
Eight: After EIP-1559, some miners shut down, so will there be security issues?
Tim Beiko: Paying for the security of the Ethereum network is block rewards, not transaction fees. Because transaction fees are volatile, relying on them to provide security is very dangerous. We want the network to be secure with only 2 ETH block rewards and no transaction fees for miners. If you look at the history of Ethereum, there have been a few times where transaction fees have been close to 0, and we hope that in those cases Ethereum is still safe.
