People have great expectations for Ethereum 2.0, but there is a common misunderstanding that "Ethereum 2.0 will reduce Gas fees".

There are two explanations for this sentence: first, the 2.0 upgrade is a long-term process, and the "merger" expected to be completed within this year will not reduce the gas fee, but what can really reduce the gas fee is the "sharding"; second, Even if the sharding is completed, it can only ensure that the gas fee of L2 is reduced. As for L1, it may always be the "noble chain".

Gas fees are essentially energy prices, so they are determined by supply and demand. The supply here is the space available for computing and storage, that is, scalability, and the specific measurement criteria are TPS level and block size.

Of course, you can speed up the block time of Ethereum by 10 times and increase the block size by 10 times, as Musk hopes, so that the handling fee can be reduced by 100 times. The implementation process is also very easy, just modify two One parameter is enough, but the final result is to transform Ethereum into another blockchain similar to Polygon or BSC. In fact, in order to take into account decentralization, the block size and block generation time of Ethereum have basically reached the theoretical limit.

Therefore, the only remaining route is to increase the TPS. However, the merger of Ethereum 1.0 and 2.0 will not increase the computing power of the network. This explains the first misunderstanding. After the "merger" is completed, the gas fee of Ethereum will not change in any way, and only the block generation method will be changed (the block generation time will decrease slightly, but the impact will not be significant). From another perspective, it may be more important to eliminate the accusation of "wasting energy".

What can really improve TPS is fragmentation technology, but fragmentation is a process, not an instant like merging, so it is still difficult to estimate the final TPS. According to the existing information, what we can confirm is that 64 shard chains will be launched in the first phase, but this does not mean that the capacity of Ethereum will increase by 64 times, because the capacity of shard chains is not equal to the current Ethereum . A reasonable estimate is that the capacity of each chain will be 1/3 to 1/2 what it is now, so the overall size will increase by about 21-32 times. According to the current progress, all this is not expected to be completed until the end of 2023.

However, even if everything goes as planned, it does not mean that the gas fee of L1 can be reduced. Going back to what I mentioned earlier, the price is determined by supply and demand, we just calculated the change in supply, but ignored the demand. Even if it is conservatively estimated, the future transaction volume of Ethereum will increase by at least 5 times. If the currency price also increases by 5 times, then the gas fee in US dollars will not change much.

Some people may think that 64 shard chains are only in the first stage, and will eventually increase to 1024. This is only at the theoretical stage. In fact, a "minimum number of nodes" issue is involved here. Sharding will disperse nodes, so the security of a single shard chain is not as high as the current Ethereum. In order to ensure that the shard chain will not be easily attacked, and for the network to have sufficient redundancy (including data availability sampling), the minimum number of nodes should be at least hundreds. Therefore, it is currently difficult to justify a blockchain with hundreds of shard chains.

With the gradual increase in demand, the gas fee of L1 will only become higher and higher. Our so-called reduction of gas fee actually refers to L2. L2 will create an off-chain transaction execution environment independent of L1, and upload the calculation results to any shard chain after processing the transaction. In essence, this reflects the impossible triangle problem of the blockchain. The reason why Ethereum cannot greatly improve scalability is due to decentralization. Rollups does not need to pay attention to these, but only needs to focus on improving transaction efficiency, and L1 is responsible for security and decentralization. Therefore, Rollups does not have the problem of the minimum number of nodes, its maintenance cost is very low, and naturally there is no upper limit on the number.

The current gas fee on OP Rollup is 1/8-1/3 of that on Ethereum, and the gas fee on ZK Rollup is expected to be 1/100-1/40 of that on Ethereum. Therefore, after the sharding is completed, the Gas fee on ZK Rollup will be further reduced to 1/7000-1/3000. Here we need to explain why sharding can significantly reduce L2 gas fees but not necessarily reduce L1. There are two reasons. First, the number of shard chains has an actual upper limit, while the number of L2 can continue to increase, so it can meet the infinite expansion of demand. Second, Ethereum has storage value, and its price is likely to rise with the continuous expansion of the encryption market, but the governance token of L2 is just fuel, and if it is too expensive, no one is willing to consume it.

Telegram Telegram Chinese Channel https://t.me/wublock

References:

1、https://vitalik.ca/general/2021/05/23/scaling.html

2、https://www.youtube.com/watch?v=b1m_PTVxD-s&t=1979s

Wu said: Independent and credible reporters are welcome to follow us here

Chinese Twitter https://twitter.com/wublockchain12

Telegram Telegram Chinese Channel https://t.me/wublock

According to the "Notice on Further Preventing and Dealing with the Risk of Hype in Virtual Currency Transactions" issued by the central bank and other departments, the content of this article is only for information sharing, and does not promote or endorse any operation and investment behavior. Readers are requested to strictly abide by the laws and regulations of the region and do not participate in Any illegal financial conduct. Wu said that without permission, it is forbidden to reprint or copy the content, and those who violate it will be investigated for legal responsibility.

According to the "Notice on Further Preventing and Dealing with the Risk of Hype in Virtual Currency Transactions" issued by the central bank and other departments, the content of this article is only for information sharing, and does not promote or endorse any operation and investment behavior. Readers are requested to strictly abide by the laws and regulations of the region and do not participate in Any illegal financial conduct. Wu said that without permission, it is forbidden to reprint or copy the content, and those who violate it will be investigated for legal responsibility.