veDAO Research Institute: Cancun Upgrade is Coming, Reviewing the Key Milestones of Ethereum History
Until today, blockchain technology can still be considered as an emerging technology. Although the basic concepts of blockchain (cryptography, decentralization, peer-to-peer network, and transactions) have been studied for decades, it wasn't until the birth of Bitcoin in 2008 that people started to believe that these concepts can be combined together to create usable products. Especially Ethereum, it didn't appear in people's vision in a public and usable form until 2015. Despite changes in the expected development timeline and specific details, Ethereum continues to progress according to plan, constantly upgrading its protocol to ensure usability, security, functionality, and decentralization.
This year, Ethereum is scheduled to undergo two important upgrades: the Shanghai upgrade, which was completed on April 12th, and the Cancun upgrade, which is scheduled for the fourth quarter. According to the official Ethereum documentation, since the release of the whitepaper in 2013, there have been 24 milestone events, most of which are fork upgrades, with 12 relatively significant upgrades. This article will review and summarize the important hard forks and upgrades in Ethereum's history, as well as introduce the potential changes that the Cancun upgrade may bring.
Frontier Upgrade - July 30, 2015
July 30, 2015, marks the date of the genesis block of Ethereum and the start of the first phase of Ethereum. The launch of Frontier signifies the official launch of the Ethereum blockchain network. This phase primarily targeted blockchain developers and participant nodes through mining, and it supported the uploading of smart contracts.
The Frontier protocol includes the following key features:
Block Rewards: When miners successfully mine a block on the Ethereum blockchain, they receive a reward in ETH. In the Frontier phase, the block reward for miners was 5 ETH per block.
Gas: In the early days after the release of Frontier, the gas limit per block was hard-coded to be 5000 gas. In other words, it meant that there won't be significant actions on the network. This allowed for a buffer period for miners to start working on Ethereum and for early users to install clients. A few days later, the gas limit was increased to allow for more activities on the network.
The upper limit is automatically lifted, and the network can start processing transactions and smart contracts according to the plan.Canary Contract: This contract is used to inform users which chains have been or are susceptible to attacks. The Canary contract is assigned a value of 0 or 1. If the contract is assigned a value of 1, the client can identify it as an erroneous chain and avoid mining on this invalid chain. Essentially, the functionalities of the Canary contract allow the Ethereum core development team to pause the network in case of issues. In the early stages of Ethereum, the Canary contract was an extremely centralized but indispensable protection mechanism.
Usability: All developers perform operations through the command line as there is no graphical user interface. The entire network is functional, but the user interface is very rudimentary and only individuals familiar with Ethereum and with operational experience have the ability to use it.
In the Frontier version, the Gas limit for each block was hard-coded to 5000 Gas. Then, in the Frontier thawing upgrade two months later, the 5000 Gas limit was removed, the default Gas price was set to 50 gwei, and the difficulty bomb was introduced. The purpose of introducing the difficulty bomb was to provide the network with a mechanism to transition from proof of work (PoW) to proof of stake (PoS). When the hash rate becomes too high and miners are unable to mine any blocks, it will be the optimal time to switch the network to PoS. It can be said that in the initial stages of Ethereum, there were already plans to transition to PoS.
From this point on, Ethereum officially entered the semi-functional PoW mining era, with the price of Ethereum being $1.24 per token.
Homestead Upgrade - March 14, 2016
The Homestead upgrade is the second major release of Ethereum. It marks the first hard fork of Ethereum and the start date of the second phase of the roadmap. The most important feature in this version is the optimization of smart contracts and the introduction of a new code for the smart contract language, Solidity. Additionally, the desktop wallet Mist was released in this version, allowing users to hold/trade ETH and write/deploy smart contracts. The Mist project later...Announced early in the year.
Homestead Upgrade is one of the earliest Ethereum Improvement Proposals (EIPs), which includes 3 EIPs: EIP-2, EIP-7, and EIP-8. EIP-2: Increases the cost of creating a smart contract through a transaction from 21000 Gas to 53000 Gas. Previously, the cost of creating a contract through a contract (recommended method) was higher than creating a contract through a transaction. With the increased gas cost of creating contracts through transactions, EIP-2 incentivizes users to adopt the method of creating contracts through contracts.
EIP-7: Introduces a new function DELEGATECALL that facilitates code reuse. This opcode is similar to CALLCODE, with the difference that it transfers the sender and value from the parent scope to the child scope, meaning the created call has the same sender and value as the original call.
EIP-8: A future-oriented network upgrade plan improvement proposal that provides forward compatibility to the network protocol dev p2p. 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.
DAO Fork - July 20, 2016
In addition to planned Ethereum upgrades and hard forks, there was an unplanned fork event worth remembering. In 2016, a decentralized autonomous organization project called The DAO raised $150 million through token issuance. In June, The DAO's contract was exploited by hackers, resulting in tens of millions of dollars' worth of ETH being stolen by unknown hackers. The majority of participants in the Ethereum community decided to implement a hard fork to recover the stolen ETH from the wallets and patch the vulnerability. However, the hard fork did not receive unanimous approval from all participants in the community, and some participants continued to mine and transact on the original chain. The original chain where the stolen ETH was not recovered became known as Ethereum Classic (ETC). This is why Ethereum has two networks, ETH and ETC.
At this time, the price of Ethereum is $12.54 per.
Metropolis: Byzantium Upgrade - October 16,2017
At this point, Ethereum has already experienced two major milestones: Frontier and Homestead. The next planned step is the Metropolis upgrade, which is 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 opcodes and smart contracts, it also postpones the "difficulty bomb" for one and a half years and reduces the block reward from 5 ETH to 3 ETH. Before removing the difficulty bomb, the block generation time was close to 30 seconds. It introduces the ability to make non-state-changing calls to other contracts and adds some cryptographic methods to allow for Ethereum's Layer 2 scalability.
At this time, the price of Ethereum was $334.32 each.
Metropolis: Constantinople Upgrade - February 28, 2019
The second phase of the Metropolis upgrade, Constantinople, was originally scheduled to go live at block height 7.08 million in mid-January 2019. On January 15th, ChainSecurity, an independent security audit company, released a report pointing out that one of the five major system upgrades would allow attackers to steal funds. In response to 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 proceed with the final step of the "Metropolis" called "Constantinople" on February 28, 2019. This hard fork includes 6 improvements: ensuring that the blockchain is not frozen before implementing the PoS mechanism, optimizing gas costs in the Ethereum Virtual Machine, and adding interactive capability for address creation. Interestingly, in this upgrade, there is also a simultaneous hard fork called "Petersburg" that removes one improvement proposal (EIP-1283) from Constantinople. Among the 5 main updates, in addition to technical adjustments, the difficulty bomb is once again delayed by 12 months and the block reward is reduced from 3 ETH to 2 ETH.
At the same time, EIP 1014 introduces a new instruction called CREATE2, which allows for precomputing the contract address before the contract is formally deployed.
2, thus introducing the concept of state channels similar to Bitcoin's Lightning Network into Ethereum, where calculations can be performed off-chain before deploying corresponding contracts for settlement on-chain.At this time, the price of Ethereum is $136.29 per.
Istanbul Upgrade - December 8, 2019
The Ethereum 2.0 plan is scheduled to launch its Phase 0 in 2020. Before the full launch of 2.0, most users and developers may primarily use Ethereum 1.X, so the subsequent updates for 1.X are also important. The Istanbul hard fork, activated on December 8th, includes six improvements: further optimization of gas costs in the Ethereum Virtual Machine, improved resilience against distributed denial-of-service attacks, enhanced performance of Layer 2 scaling solutions using SNARKs and STARKs verification mechanisms, interoperability between Ethereum and Zcash, and enabling Ethereum smart contracts to introduce more creative functionalities.
Vitalik Buterin stated that after this upgrade, the regular 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, Ethereum is priced at $151.06 per.
Muir Glacier Upgrade - January 2, 2020
Within less than a month after the completion of the Istanbul upgrade, Ethereum underwent another emergency upgrade. It is very rare to have two hard forks in one month. The reason was that users and developers constantly noticed a slight increase in Ethereum's block generation times, which would result in a decrease in TPS for the Ethereum network. Ethereum developers discussed the situation and proposed a hard fork codenamed "Muir Glacier" at block height 9,200,000 to remove the difficulty bomb. It was expected to occur around December 31, 2019. According to the data shared by developers in the discussion group, Ethereum's block generation time will continue to increase until the difficulty bomb is removed and may reach between 25 and 30 seconds around January 6th.
At this time, the price of Ethereum is $127.18 per.
Berlin Upgrade - April 2021
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Starting from this version, the upgrade code will follow the order of the Ethereum Developers Conference Devcon, and the first Devcon 0 was held in Berlin. Ethereum had planned many improvements for the Istanbul upgrade, but due to various reasons, some of the improvements that did not make it into Istanbul will be moved to Berlin. This optimization addresses the gas cost issue in the Ethereum Virtual Machine and adds support for multiple transaction types.
At this time, the price of Ethereum is $2454 per coin.
London Upgrade - 5 August 2021
This upgrade involves five proposals: EIP-1559, EIP-3198, EIP-3529, EIP-3541, and EIP-3554. One of the most impactful EIPs for Ethereum is EIP-1559, which aims to change the existing Ethereum fee structure by splitting fees into a base fee and a miner fee, and by burning a portion of the base fee to reduce the circulation of ETH.
It directly changes Ethereum's economic model. Previously, block inclusion was an auction mechanism where the highest bidder gets all the Gas fees. EIP-1559 splits the Gas fees into two parts, with one part going to miners and the other part being burned, thereby ushering in a era of deflation for Ethereum.
At this time, the price of Ethereum is $2621 per coin.
Paris Upgrade (The Merge) - 15 September 2022
The upgrade (merge) is a direct modification of the Ethereum execution layer and consensus layer, and is an important upgrade that transforms the Ethereum mainnet from PoW consensus mechanism to PoS consensus mechanism. This upgrade brings some rule changes to the Ethereum network, and the specific changes are as follows:
Validator Node Change: The original miner nodes will be replaced by validator nodes. Validator nodes need to have 32 ETH as a deposit and run corresponding software to participate in network validation and block packaging.
Block Reward Change: The original block rewards will be canceled, and instead, earnings will be obtained through transaction fees.
Transaction Fee Mechanism Change: In the new version, transaction fees will be directly paid to validator nodes instead of the Ethereum Foundation.
Improved Dynamic Fee Mechanism: The new version adds a new feature called "EIP-1559," which can dynamically adjust the fee price, enabling users to complete transactions faster and reduce excessively high fees.
Optimized State Storage Method: The new version adopts a technology called "Rollups," which stores a large amount of data on side chains and aggregates it 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 introduces a virtual machine called "EVM 384," which can improve contract execution efficiency and security.
Overall, the Ethereum Paris upgrade significantly improves the scalability and efficiency of the Ethereum network by improving the consensus mechanism, optimizing the transaction fee mechanism, improving the state storage method, and enhancing contract execution efficiency.
At this time, the Ethereum price is $1472 per ETH.
Shanghai Upgrade - April 12, 2023
The Shanghai upgrade will be the first major upgrade of the Ethereum network after the merge and is an important milestone in the Ethereum roadmap. It brings three major changes:
Shanghai has upgraded and unlocked the staking withdrawal function for Ethereum. This not only helps to maintain the vitality of the Ethereum network, but also benefits the sustainable development of Ethereum in the future and continues to attract more validators to join the Ethereum network.
Lower the Gas fees of Layer-2 solutions running on the Ethereum blockchain, which to some extent makes Ethereum faster and cheaper. The Shanghai upgrade will further optimize the Gas fees of transactions on Ethereum.
As the largest blockchain network supporting 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 $1917 per.
Cancun Upgrade - Q4 2023 (estimated)
The Cancun upgrade is an additional upgrade to the ETH blockchain after the Shanghai upgrade, with EIP-4844 and potentially EIP-6969 primarily aimed at achieving the goal of reducing costs and increasing speeds for Ethereum Layer 2: By then, the speed of Ethereum Layer 2 will be increased by 10 times, and even have the opportunity to increase by 100 times with lower costs.
The fees on Ethereum Layer 1 have always been high, and necessary improvements are urgently needed to reduce overall operating costs. Currently, the main scaling solutions on Ethereum are Layer 2 Rollups. Rollups do help users save a lot of Gas Fees, for example, the Optimism project represents and the regular expenditure of Gas Fees is only 0.001 gwei, far lower than the regular expenditure on Ethereum Layer 1 mainnet; ZK Rollups has better data compression performance and does not require including signature data, lower fees, and can even reduce to one percent of the Ethereum Layer 1 mainnet. However, for a wider range of users, even with the Rollups solution, Gas Fees are still relatively expensive burdens. In addition, Ethereum's efficiency in processing parallel transactions is still low, and it can only process double-digit transaction volumes per second at most, all of which require new improvement solutions to help improve scalability.
Sharding is a powerful improvement method to solve the above problems, but the current Ethereum cannot implement it, and the timely introduction of the improvement proposal EIP-4844 is a compromise that can be applied to the current stage of Ethereum, laying the technical foundation for the overall data sharding in the future. Therefore, EIP-4844 is also known as "Proto-danksharding."
EIP 4844 proposes a
Ethereum has introduced a new type of transaction that allows data to be stored in a space called Blob at a cheaper cost. This enables data previously stored in Layer 1 to exist in Blob, greatly reducing the cost of Layer 2. In addition to the highly anticipated EIP-4844, the Cancun upgrade includes the following approved improvement proposals: EIP-1153: Adding Transient Storage Opcodes, which are specifically designed to address intra-block communication solutions. EIP-6780: Modifying the functionality of the SELFDESTRUCT opcode to prepare for the future Ethereum application Verkle Tree architecture. Apart from ETH itself, there are also some noteworthy projects under the Cancun upgrade: Layer 2: The biggest beneficiary of the Cancun upgrade is undoubtedly Layer 2. Prominent Layer 2 solutions such as Arbitrum and Optimism, which have a significant first-mover advantage, deserve attention. Leading applications in the Arbitrum ecosystem, such as GMX, RDNT, and Magic, will also experience significant growth with the explosion of Layer 2. Additionally, projects like Metis, built and improved upon OptimisticRollup, and Boba Network, an Optimism-inspired project, are expected to benefit from the Cancun upgrade. ZK-Rollups: Considered a more advanced solution in the industry, zkRollup is also expected to shine with the Cancun upgrade. zkSync, StarkNet, and Scroll are the three most well-known projects in this field. Although these projects have not yet launched their tokens, their potential should not be underestimated. zkSync, developed by Matter Labs, is a Layer 2 scaling solution that combines the security of Ethereum with the speed of zkRollups.Based on the ZK-Rollup architecture, an extension solution. Mainly targeting the payment-oriented 1.0 mainnet and the fully compatible 2.0 testnet with EVM support. Recently, zkSync also upgraded its 2.0 entry, supporting the payment of network fees using any token, greatly improving user flexibility.Starknet is a decentralized Validity-Rollup, operating as an L2 on Ethereum, enabling any application to scale massively without impacting Ethereum's composability and security.
Scroll is a zkRollup based on zkEVM on Ethereum, serving as an L2 solution to address Ethereum's congestion issues.
Others
In addition to the aforementioned categories, the Cancun upgrade will also benefit other centralized types of projects. This includes cross-chain protocols similar to L2 functionality. Due to the short data storage time of Blob, it will also benefit data availability layer projects. Representative examples include: Layerzero, currently the most popular cross-chain protocol. It is a cross-chain communication protocol that can transmit "information" from one chain to another by deploying a series of smart contracts (Endpoints) on the chains, enabling decentralized inter-chain information services.
Celestia is a data availability layer project. Based on the Cosmos architecture, it provides data and consensus layers for other L1 and L2, building modular blockchains. The principle is similar to Ethereum's sharding solution and can somewhat alleviate the transaction fee bottleneck of Rollup, namely "data storage cost".
With the implementation of EIP-4844, L2 will become more competitive compared to other L1, and its future development prospects are relatively significant. In addition to significantly reducing L2 transaction costs, EIP-4844 also provides a favorable environment for the future application of Danksharding, making it easier to achieve data sharding in the future. Lower transaction costs, better transaction experience, and even the birth of more application scenarios, the Cancun upgrade will become a turning point for Ethereum L2.
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