Table of contents
first level title
Table of contents
Basic background on The Merge
For ETH: Towards Sustainable Deflation, the Digital Bond Narrative
For the Ethereum chain: energy saving, security, degree of decentralization and technical risk
For MEV: MEV still exists, exacerbating the income inequality of verifiers
For the Staking track: ETH asset attributes are prominent, which is good for the pledge market
Others: ETC is good, miners migrate
When we talk about forks and ETHPoW
Post-PoS regulatory battles and censorship storms
Merge - Ethereum's transformation from PoW to PoS - is an important milestone for Ethereum to build a secure, scalable, decentralized, and sustainable network.
fromthe macroFrom the point of view, The Merge is to make the Ethereum network a powerful processing layer and data availability layer, providing services for rollup as an infrastructure, and laying the foundation for sharding.
fromtechnologyfrom
technology
From the point of view, The Merge means that in 2020, the beacon chain run by PoS in parallel will replace PoW as the consensus layer. What remains unchanged is that the execution layer will continue to host the Ethereum Virtual Machine, and validate and broadcast transactions. Additionally, node operators must run both the execution layer and the consensus layer client in order to stay online.In the PoS network, anyone who wants to be a verifier can pledge 32 ETH to become a node participating in the network consensus algorithm. Finalizing a block requires signatures from at least 2/3 of validators to keep the network secure. The malicious party will face the penalty of forfeiting the pledge.
Merge does not support on-chain governancetime expectation
schedule: According to the Ethereum Foundation blog, the Ethereum merger is expected to be finalized between September 10th and 20th. The merge will be activated in two phases: the Bellatrix upgrade on the Beacon Chain on September 6th; and the Paris upgrade - which will be completed when the execution layer reaches a predetermined total difficulty value of 58750000000000000000000 for the terminal triggering the merge.Sepoliaschedule
: The Ethereum team has conducted a series of testnet mergers since 2017: on March 15, the testnet Kiln was launched; on June 18, the testnet Ropsten successfully completed the merger; on July 6Post-Merge plan
first level title
For ETH: Towards Sustainable Deflation, the Digital Bond Narrative
secondary title
As we all know, the issuance rate of Bitcoin is halved every 4 years, and the issuance rate of Ethereum will be reduced by about 90% when it is "merged". recognition. When the three "halvings" occur at the same time, it means that Ethereum will complete the 12-year journey of the Bitcoin network at one time.
How did it happen? Under the current Proof-of-Work (PoW) model, Ethereum issues approximately 13,500 ETH per day, accounting for approximately 4.3% of the total ETH supply per year. Because the PoS issuance model is based on the amount of ETH actively pledged on the network, PoS also does not need to issue a large amount of currency to pay for security fees. According to current forecasts, when the "merger" occurs, the issuance rate will drop to between 0.3% and 0.4%. (Bitcoin, for comparison, won't be equal to Ethereum until 2028)https://docs.ethhub.io/ethereum-basics/monetary-policy/#historical-issuance-impacts
image description
Ethereum’s issuance rate and supply curve, source:
This is not the first time Ethereum has set ETH monetary policy by increasing deflation.As early as a year ago, on August 5, 2021, Ethereum launched EIP-1559, changing the first-price auction fee mechanism to a new basic fee model with additional miner tips. In simple terms, instead of paying all transaction fees to miners, most transaction fees should be burned. This is not a simple upgrade of the Ethereum transaction fee management method, but a monetary policy tool to achieve deflation.When the "triple halving" brings a reduced issuance rate, combined with the BASEFEE destruction mechanism of EIP-1559, Ethereum will move towards sustainable deflation
, which means that there are fewer ETHs circulating in the market, which objectively helps the price of $ETH to go up. In fact, the expected deflation of ETH is an important logic for the recovery of Ethereum's market value in the first quarter.
2. Digital Bond Narrative
Can ETH be qualified as a security when the return on staking becomes a risk-free return?
image description
ETH researcher Justin Drake expects stakers to earn around 8-11.5% APR after the merger
This topic focuses on the discussion of the three elements of the Howey Test. What is currently controversial about ETH is the latter two points, the joint investment enterprise (In a common enterprise), and the expectation of profiting from the efforts of others. Putting this debate aside, the narrative about ETH becoming a global digital bond is not new. Bitmex CEO Arthur Hayes' article "Five Ducking Digits" in April this year elaborated on the great value of ETH as a perpetual bond and its ability to replace the U.S. dollar possible national debt. So what does ETH's bond narrative bring?
Regulatory discussion: After the merger, ETH becoming a quasi-government bond will be more conducive to regulation, and even promote some organizations or governments to accept cryptocurrencies; Firm regulations may change. In addition, the chairman of the SEC stated in an article that the SEC treats the encryption market the same as other capital markets, which also raises concerns that the merged ETH may follow compliance.
Promote adoption: Compared with a currency, the classification of ETH as a bond will help more general investors to make corresponding investment portfolios and accelerate participation in the crypto ecosystem.
Another challenge to the ETH bond theory could be the liquidity of derivatives. Hayes pointed out in the article that ETH/USD futures may experience "illiquidity" in the next three months. While buying and hedging ETH can be an active arbitrage trade, a lack of liquidity could hinder its adoption.
For the Ethereum chain: energy saving, security, degree of decentralization and technical risk
safety
safetyexplain。
From a security point of view, PoS networks will increase the cost of attacks, and have the characteristics of easier recovery from attacks and anti-censorship. Regarding these three points, Vitalik has made a very clear statement in the article "Why PoS?"
explain
We already know that there are two types of mining machines: GPU and ASIC. In order to improve mining efficiency, ASIC is specially used to calculate a series of formulas, which makes the cost higher.
The cost of using an ASIC mining machine will be higher, and the expected use time of the ASIC itself is two years, considering wear and tear. If a chain is attacked by 51%, the community will probably change the PoW algorithm to respond, and the ASIC mining machine will lose its value. According to Vitalik's calculation, the cost of attacking for 6 hours is about $486.75.
And the cost of PoS is almost 100% capital cost - staked ETH, assuming a ~15% return rate is enough to attract people to stake, the perpetrator attacks for 6 hours, and the total attack cost is about $2,189. And in the long run, if people get used to lower reward rates, the cost of attack may rise to the level of $10,000.。
secondary title
It seems that the attack cost of PoS network is 5-20 times that of PoW
Anti-aggression
In an ASIC-based system, although the community has a way to deal with the first wave of attacks, subsequent attacks will become easy. The community can hard fork to replace the PoW algorithm after the first wave of attacks, which also means that ASIC mining machines will become worthless, which will be a blow to the community and attackers, but if the attack If the attacker can withstand the blow of the ASIC becoming worthless and continue to attack, the next situation will be the same as the GPU attack described above.
Censorship resistance
Censorship resistance
decentralized
Finally, since GPU and ASIC mining are very easy to detect, this means that governments can easily shut down mining farms. In contrast, the PoS consensus mechanism that can be done through ordinary computers or even VPNs seems to be more resistant to censorship. However, it is not impossible for government agencies to review the block generation process. The article will be further analyzed in the "Regulation" section.
decentralized
Although GPU-based mining is sufficiently decentralized, according to the above-mentioned anti-attack comparison, GPU mining is far from the PoS mechanism. Participating in mining with ASIC mining machines means a cost of several million dollars, which is not something ordinary people can participate in. The threshold for participating in the PoS consensus network is relatively low: first of all, it needs to be understood that there are two types of nodes in the PoS network - nodes that propose (propose) blocks and those that do not propose blocks. If you want to propose a block, you need to pledge 32 ETH, which can be a one-time pledge or a small amount of pledge by retail investors through a pledge operator.
Although the vast majority of nodes do not propose blocks, they also play a vital role. They are responsible for listening for new blocks, verifying their validity when they arrive, and holding all block proposers accountable. If the block is valid, they will broadcast it to the network. Running such a node only requires a normal computer and a network.This setting ensures that everyone can run a node, thereby ensuring the degree of decentralization of Ethereum.Of course, the decentralization of PoS is not without voices of doubt. Some people think that the PoS mechanism makes the rich richer, but Vitalik’s point of view is that ASIC mining also makes the rich richer. In contrast, at least PoS’s The threshold is lower, so that more people have the opportunity to participate. Because of the wide range of PoS participating groups, and the node's pledge and Gas fee sharing, it is equivalent to the number advantage of small nodes
slow down
energy saving
image descriptionhttps://ethereum.org/en/energy-consumption/
technical risk
Post-PoS energy consumption, source
technical risk
The merger means the fusion of two network systems - the beacon chain and the main network, but it is not a simple addition. The merger of Ethereum has always been adhering to the principle of "minimum damage", because it involves a lot of funds and applications on the network. At the same time, the Ethereum team is also constantly testing and practicing - which is why there are eleven shadow forks and four testnet merge tests before the official merger.communicateThere are currently 4 unique clients running Ethereum PoS nodes, which means that if a node operator encounters problems with execution, they can switch to other clients. During the execution of the merger, there needs to be goodcommunicate
Update to the correct maximum difficulty value (TTD) and ensure a uniform update of nodes, because if enough nodes go offline, the Ethereum network will be forced to pause.
Although there are many challenges, there are no major problems in the merger of testnets in history, and the beacon chain has been running smoothly since its launch in 2020. In addition, developers are encouraged to find bugs, with bounties of up to $1 million between now and September 8.
first level title2021For MEV: MEV still exists, exacerbating the income inequality of verifiers
MEV or Maximum Extractable Value fromIt has gradually become an important issue in the Ethereum ecosystem since 2010, and its impact is wide-ranging - from the introduction of centralization to the user experience. Therefore, what impact the merger of Ethereum will have on MEV is also one of the issues worth exploring.
A brief recap of what MEV is。
: Although theoretically the definition of MEV is the value that miners or verifiers can extract when they are sorting transactions, reviewing blocks, or even reorganizing the blockchain. But in fact, what makes MEV happen is a group of independent network participants called the searchers. By running complex algorithms, they can capture potential MEV opportunities. When such an opportunity is found, the searcher will be willing to pay a higher gas fee to get the transaction executed, and this part of the gas fee goes to the miner or validator hands. In this way, miners or verifiers are the executors and indirect beneficiaries of MEV.
In fact, the above description has revealed that MEV will still exist after the merger, and the profits from MEV will flow to the validatorsAs mentioned earlier, the Ethereum merger is the upgrade and integration of the Ethereum execution layer and the beacon chain as the consensus layer. The client of the original PoW was stopped from the responsibility of consensus, and focused on mempool, execution effectiveness and EVM. The beacon chain is initiated with consensus responsibilities, namely block voting (attestation) and block proposal (proposal).The reason why MEV exists is because the merged Ethereum network still has the shadow of the PoW period：
. From the figure below, it can be seen that the merged client of Ethereum includes the beacon chain client and PoW client. And the merged block needs to go back and forth between the two clients
comminicate
2) Beacon chain client: The proposer includes it into the block of the beacon chain and prepares to be voted on by the attester on its validity.。
The generation of MEV exists in the first stephttps://ethresear.ch/t/eth1-eth2-client-relationship/7248
image descriptionNote: Because the term ETH2.0 is outdated, this article uses ETHPoS instead of eth2, and ETHPoW instead of eth1. source:It can also be seen from the flow chart below that the former part remains the same as before the merger, which is the ordering of transactions and collection into blocks, which is also the part where MEV opportunities are generated.
It’s just that those who have ultimate control over MEV become validators, because they request the block from the PoW client and include it in the block of the beacon chain.
what does that mean? Before the merger, MEV was one of the serious problems in the Ethereum ecosystem because the huge wealth value brought by MEV was concentrated in the hands of a few groups, such as MEV search robots and block builders - they can be compared to people Better extraction of MEV value (more time investment + better algorithm).However, after the merger, the verifier becomes the ultimate controller of the MEV supply chain terminal, and the process of becoming a verifier becomes more democratic and decentralized after the merger, which means that the group that extracts MEV becomes more diverse and dispersion.
Of course, there is another view that MEV after PoS will be monopolized by validators with sufficient capital. The predictability of block generation after the merger allows users to no longer send transactions to the public transaction pool (mempool) but privately propose bribes to specific nodes, and switch from public bidding to private bribery. Nodes or operators with more pledges will have more opportunities to bribe and withdraw MEV.
Flashbots will launch mev-boost as middleware to build a healthier auction market for validators, allowing Flashbots and other block builders to bid in the market together, and validators only need to ask mev-boost relay for the highest price block.Alex ObadiaandTaarush VemulapalliAccording to theand. In addition, looking back at the internal impact of the merger on ETH, since ETH becomes micro-deflation after the merger, this also means that the rewards obtained by validators will be compressed, which makes the rewards of MEV more attractive. Since MEV significantly increases the validator's reward, this may indicate that more validators may join the network verification, indicating a more secure network.
source:https://hackmd.io/@flashbots/mev-in-eth2
image descriptionsource:In addition, the difference in revenue between validators is not only affected by MEV, because validators are randomly selected to propose blocks, so luck also determines the number of blocks that a validator can propose (that is, the number of times MEV is captured): According to statisticsdistributed
From this point of view, the possibility (luckiness) of the verifier being selected further increases the difference in the verifier's income.videoThere are several potential implications of this difference, Alex of Falshbots invideoSuch a difference may allow validators to participate in staking pools - to gain more evenly, rather than being individual validators. In addition, such differences may also exacerbate the "rich get richer" theory, as asset-rich validators will get more opportunities to propose blocks, thereby capturing more MEV value.
Of course, these speculations still need to be further corroborated by the combined data.
first level title
For the Staking track: ETH asset attributes are prominent, which is good for the pledge market
In the description of the early white paper of Ethereum, the main value of ETH lies in: the currency attribute in the encrypted market; Gas consumption; interest-bearing assets. ETH has always been one of the most important collaterals, providing liquidity for the encryption market. With the introduction of "merger" pledges, the participation of various DeFi protocols, exchanges, wallets, and ETH pledge services has continued to deepen. In this context, as a means of production, ETH's asset attributes will become more and more obvious.
No matter which PoS public chain, it is not a simple matter to independently become a node for Staking. When ordinary users cannot directly participate in staking, there is also a question mark over the overall security and decentralization of the public chain. Users also hope that third parties with professional operation and maintenance equipment, knowledge, experience and sufficient funds can entrust voting rights, and validators will replace them to maintain network consensus and receive rewards (a certain percentage is used as a reward for the services they provide) .
Under this supply and demand relationship, some institutions have been born to provide ordinary users with proxy staking services, that is, Staking as a Service. It is mainly divided into Node Operators and Liquid Staking Providers. The former runs nodes , to maintain consensus; the latter provides pledge derivatives to solve the liquidity problem of PoS pledge.
image description
Track classification, source: mint ventures
For Ethereum, which is converted to a PoS consensus, compared with other PoS public chains, due to some restrictions (such as the public key of the verifier and the withdrawal certificate for depositing 32 ETH), the pledger will face many problems:
High capital: Although 32 ETH (just a balance point between node size and degree of decentralization) is not a permanent setting, it is still a lot of money
And these are precisely the pain points that liquidity staking service providers solve: canceling the pledge threshold, pledge pools to solve withdrawal needs, and pledge certificate tokens to solve liquidity.
Data Sources:https://defillama.com/protocols/liquid staking
image descriptionData Sources:cut off
Although the centralized exchange was the first to start the Ethereum pledge service, and the validator nodes operated by exchanges such as Kraken or Binance became the largest group, but with the practice of the concept of decentralization of Ethereum, the pledge pool has been removed. Centralization will be the next anchor. There are currently three liquidity staking protocols that use publicly traded tokens: Lido, Rocket Pool, and Stakewise, among which the Ethereum community has selected a staking pool against CEX, and Lido finance, known as the decentralized guardian of Ethereum, whose pledge certificates stETH has demonstrated the moat and network effects brought about by its liquidity and DeFi composability. In particular, the team has shown impressive determination and hard work on the issue of "Trustless Ethereum Mortgage Road" (technical details please checkoriginal）。
image description
Coinbase launched the liquid pledge token cbETH before the merger of Ethereum, and users can sell, transfer, spend or otherwise use the locked pledge ETH through cbETH
first level title
Others: ETC is good, miners migrate
To ETC (Ethereum Classic, Ethereum Classic) ecology
The emergence of the ETC chain originated from the hard fork of the DAO event in 2016. In the past month, the price of ETC has increased dramatically by 140%. As of August 25, according to 2miners data, the computing power of Ethereum Classic has increased by about 86%. In addition, Antpool also invested $10 million to support the Ethereum Classic ecosystem. ETC may face a favorable situation in the short term, but in the long run there will be no continuous improvement in performance. The difference in computing power between Ethereum Classic and Ethereum is nearly 37 times. The influx of miners into Ethereum Classic will inevitably lead to a surge in the computing power of the entire network and increase the difficulty of mining. At the same time, considering that the price difference between ETC and ETH is nearly 42 times, in the long run, miners are likely to leave because the benefits are less than the costs.
In addition, Messari's analysts also pointed out that the ecology of Ethereum Classic has actually not improved-the number of users, transaction volume, and applications can be said to be basically non-existent. So in the short term, the merger can be a user's speculation on ETC, and has no other meaning.
one year
first level title
When we talk about forks and ETHPoW
secondary title
hard forkhard forkandsoft fork。
and
A hard fork is a complete change to software that requires all users to upgrade to the latest version of the software. So a hard fork is a permanent divergence from the previous version of the blockchain (but with the caveat that since the same history exists, if you held coins before the fork, you would be on both networks at the same time The temptation of this "candy" to obtain tokens is also the reason why some speculators are crazy about hard forks). For example, in 2017, Bitcoin forked due to the block capacity dispute, and the original Bitcoin (BTC) and the new Bitcoin Cash (BCH) appeared.
2.Soft forks are implemented by supporting backward compatible software upgrades. In general, since new upgrades don't conflict with previous rules, you can only enforce certain restrictions. Soft forks have been used in the Bitcoin and Ethereum blockchains, among others, often to implement software upgrades (such as the aforementioned EIP-1599).
secondary titlewhy fork
The option to experiment with open-source software is a fundamental part of cryptocurrencies and also contributes to being able to make changes and upgrades in decentralized systems.
3. Forks are critical to the long-term success of blockchains, helping blockchains and cryptocurrencies integrate more new features as they are developed. Otherwise, we can only hope that during the life cycle of a certain agreement, the code written by these developers will never have bugs, and the immutable rules can protect us forever.
secondary title
Can Forks Be Avoided?
In 2016, The DAO project was hacked and lost about $60 million in ETH. In order to recover the stolen assets, the Ethereum team voted to adopt a hard fork. Since then, Ethereum has split into two chains, the original chain (ETC) and the new forked chain (ETH).
This has caused huge community controversy. People who oppose the fork believe that the foundation's hard fork actually violates the core principles of blockchain decentralization. So these people stayed on the original ETC chain, which is called Ethereum Classic. Today ETH is the second largest cryptocurrency by market capitalization, but ETC still exists, even though its market cap is only about 2.5% of ETH's.In comparison, the fork worldviews of Ethereum and Bitcoin are very different. The Bitcoin community resolutely resists any hard fork, such as using computing power to crush and attack (of course, it is inseparable from its positioning as a "value store" and the pursuit of maintaining stability). Vitalik is very tolerant of ETC, and the Ethereum community has never used 51% of the computing power to attack ETC.How to answer the topic of whether forking can be avoided? first,A fork is a setting in the consensus rules, it's a feature not a bug. Secondly,fork is freedom. The blockchain defends the individual's right to choose. Even if a small number of people do not agree, the minority still retains the right to choose freely to fight against the vast majority.
. Similarly, today you can also choose not to obey PoS, you can choose to fork, as to whether it can succeed or not, how far it can go is another matter.
4. Ultimately, what we reserve is the right to determine which cryptocurrency unit has the majority consensus. Because history has shown that people generally follow blockchains that have a majority consensus among cryptocurrency users.
secondary title
Possibility of an Ethereum Fork
After several delays, Ethereum seems to be one step closer this time, with numerous information showing that it will usher in a merger in September this year. The first discussion that followed was whether Ethereum will fork this time.
In BitMEX's latest research article "ETHPoW vs ETH2", we can see that there is a more objective conjecture about exploring the feasibility of ETHPoW after the merger of Ethereum PoS: Although the ETHPoW chain may face many technical challenges, there are problems with its long-term feasibility , but its existence may present exciting opportunities for traders and speculators in the short to medium term.To put it simply, there are difficulties, but it will fork, there is room for short-term manipulation, and there is no medium- and long-term narrative logic."In the latest open letter from ETC Cooperative Zhibao Erye (the leader of the bifurcation event), the ETC Foundation believes that the background of the current bifurcation discussion is completely different from the background of ETH/ETC back then. There was no DeFi or stable currency at that time, so unable to do real damage, the implication is that"The other party underestimated or ignored this
5. Unforkability
Reality, because the ETH PoW fork will bring huge confusion and user losses, and the current time for the fork is tight and it is difficult to change. A smarter decision would be for ETH miners to move to ETC to maximize their income in the long run.
In this Ethereum civil war, what is the current (as of August 25th) attitude of all parties?
6. It is worth noting that in this civil war, the Ethereum Foundation and Vitalik are no longer the only dominant players. As Vitalik said, stablecoins may be "an important determinant of future hard forks." Ethereum, which has been pursuing to break through the impossible triangle, may have more controversial hard forks in the next five to ten years, and the centralized Stablecoin issuer may become a more influential decision-maker.
secondary title
probability of success
Therefore, it depends on how you understand the "success of the fork", whether to evaluate a short-term behavior, or to define a long-term vision.
7. With the fork project EthereumPoW writing an open letter to reply to ETC and publishing the source code of the initial version of ETHW Core on GitHub, all parties have continued to question it. At present, ETH-POW has won the support of some communities, exchanges, miners and KOLs, but as a tool for short-term profit games, it is destined to be short-lived as the liquidity dries up. After all, those who really believe in PoW can directly choose ETC has experienced all of this, but the future of everything is reflected in the price.
secondary title
Influence
The wealth effect brought about by the fork: it is good for exchanges and miners, but the fork chain is also a huge retail trap. The value of candy does bring short-term transactions. While users get free tokens, they also face arbitrage risks. When everyone is thinking of shorting USDC, stETH or any token that will lose value, the chances are still slim without considering the MEV robot; at the same time, the volatility of assets will increase during the merger, which may trigger an undercollateralization level User liquidation.
Market chaos caused by forks: Judging from current statements, mainstream assets, protocols, and infrastructure are against forks, but if the forks are successful, it is still unknown whether they will support ETH-POW instead. For example, among the many DeFi protocols that support multi-chain ecology, which ones will support the PoW version, and which ones will continue to be completely consistent with the Ethereum PoS? This is bound to bring economic and governance chaos.
Post-PoS regulatory battles and censorship storms
1. When discussing the supervision of post-PoS Ethereum, there are two perspectives: one is the macro discussion on whether the PoS mechanism is a bond, and the other is the anti-censorship of PoS nodes.
secondary title
Will ETH be considered a security after the merger?
As mentioned in the "Digital Bond Narrative" section, whether the PoS mechanism after the merger of Ethereum is more in line with the Howey test standard is still under intense debate.Although the former chairman of the CFTC has hinted that the tokens used as collateral in the PoS consensus mechanism are likely to be regarded as securities commodities. And, the relatively stable income brought by the validator's pledge may also make regulators think that the validator is closer to the financial entity than the miner.。
Assuming that the merged Ethereum is defined as a security (securities), on the one hand, it is believed that this will facilitate regulation and promote the acceptance of cryptocurrencies by institutions and governments; on the other hand, voices such as Michael ***** *Saylor believes that PoS will make validators non-compliant and exposed to onerous regulatory requirements, especially exchanges led by CEX will need to adoptnew business modelalso show
2. “There is no reason to treat the crypto market differently from other capital markets just because it uses different technology, the securities laws still apply.” It seems highly likely that the merged Ethereum will follow the securities laws for compliance.
secondary title
What is the anti-censorship ability of the merged node?
Concerns Raised by OFAC Sanctions
Since Tornado Cash was sanctioned by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), the Ethereum community has expressed concerns about the censorship resistance of post-PoS nodes. The data on Dune also verified this concern. The current beacon chain is indeed relatively centralized, and 66% of verification service providers may comply with OFAC's supervision, such as Lido, Coinbase, Kraken, etc.
What sanctions will node operators face, and how should they respond?
This means that regulators can conduct protocol-level scrutiny of Ethereum through the protocol's validator nodes and prevent validators from packaging certain transfers.Lido FinanceFaced with the potential for sanctions and a sense of crisis, Eric Wall of the crypto hedge fund Arcane Assets initiated a discussion, "If the validator nodes that pass certain protocols (such as Lido, Coinbase, etc.) are supervised, Ethereum will be reviewed at the protocol level. , How will the Ethereum community react” A total of 7363 people participated in the vote, 62% of them chose “will see this review as an attack on Ethereum, and choose to burn their pledge through community consensus”, 9.3% of people Choose "tolerate censorship", and another 28.7% choose to abstain. Among them, Vitalik also participated in this vote and chose to regard censorship as an attack on Ethereum.38%Subsequently, the community's heated discussion about censorship pushed centralized staking service providers to stand in line. Recently, Coinbasde CEO Brian Armstrong expressed that he would rather quit the staking business than accept scrutiny from government departments. Ethereum staking operator with the highest market shareStakeed.usIt also states that “Lido’s mission is to make staking simple and secure, and to keep Ethereum (and other PoS networks) decentralized and censorship-resistant.” The two operators control
of staked Ethereum. Other Ethereum validator operators include Kraken, Binance,
, Bitcoin Suisse, etc. have not made a statement yet.？
The specific actions of pledge service providers in response to the review may be to move specific operations out of the United States. The ethereum core developer teleconference also discussed the coping mechanism of social slashing to punish this behavior, that is, to coordinate ethereum to implement hard forks to eliminate violating validators, and to encourage users to disperse to different pledge agreements.From the perspective of the block construction process, how the validator responds to the reviewFrom the point of view of the validator's block production process, anti-censorship is very complicated, because anti-censorship is not two black and white choices-follow or not follow. Bitmex at the nearestresearch articlepointed out that the anti-censorship of Ethereum after PoS will be more complicated than that of PoW, and its solution is also Vitalik's
own blog
topic of ongoing research. This complexity comes from the fact that post-PoS Ethereum nodes face at least 8 choices compared to the 3 choices miners face when they are censored:
Refuse to include "OFAC prohibited" transactions in the blocks you produce.
Reject attestation blocks that contain transactions prohibited by OFAC.
Produce and validate OFAC-compliant blocks, even if they conflict with non-compliant blocks.
Refuse to generate blocks on top of blocks containing transactions prohibited by OFAC.
Refuse to verify blocks in the chain that contain transactions prohibited by OFAC.
Reject block validation for blocks with OFAC prohibited transactions.
Refuse to include the certification of the block in the chain, because OFAC prohibits transactions in the block you produced.
Disregard OFAC rules.
At present, regulators may not understand these technical nuances, making it difficult to start.
Additionally, some in the ethereum community are concerned about censorship of MEV-Boost “relay operators,” or entities that connect validators to block builders. But thankfully, Flashbots has recently open-sourced their software for running relayers, which should encourage more people to run relayers and expand the choice of validators.
Questions of censorship remain heavy
The solutions mentioned above are all positive and feasible, but we also have to face the heavy reality: responding to OFAC’s sanctions on Tornado Cash, Ethereum’s infrastructure Infura and Alchemy, the company behind the stablecoin USDC Circle, and the application Both Uniswap and AAVE have blocked TC-related addresses.At the recent Ethereum core developer meeting, someone said that the development indicator of Ethereum has always been to become a neutral and censorship-resistant network, which is why people tolerate high transaction fees. If one day Ethereum is brought under regulatory control, it will symbolize the failure of the network and the exodus of developers.We all have a good vision for decentralization, but the realization of the decentralization of Ethereum does not rely on a good vision or moral compliance, but through a series of mechanisms to make it harder to do evil and make the cost of regulatory review more expensive. high and achieved. We cannot morally kidnap centralized node operators to confront regulation, cryptocurrency lawyer Geoff Costeloe explained, "because they are entities with profit obligations after all. From the root point of view, when "resistance to censorship" is no better than "censorship" When it is more profitable, it is the essence of the problem". Since the current anti-censorship solution is still in the research stage, we can only expect the Ethereum team
Research results
and its specific implementation.
Will the merger of Ethereum be completed smoothly as scheduled, and where will the miners go? Will the hard fork be successful, and will it bring a state of chaos to the current Ethereum ecosystem? Will ETH be considered a security after the merger, and what impact will OFAC regulation have on the decentralization of Ethereum? Is the current Ethereum really ready to switch to POS?
Reference
https://launchpad.ethereum.org/zh
https://blog.bitmex.com/ethpow-vs-eth2/
https://newsletter.banklesshq.com/p/ethereum-merge-investing-strategy-eth?triedSigningIn=true
https://notes.ethereum.org/@vbuterin/pbs_censorship_resistance
https://www.coindesk.com/tech/2022/08/10/whats-at-stake-will-the-merge-turn-ether-into-a-security/
https://foresightnews.pro/news/detail/9029
https://www.youtube.com/watch?v=zsgC6mNP9eU&ab_channel=ETHGlobal
https://www.bitpush.news/articles/2931401
https://www.chaindd.online/3682050.html
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Without the authorization of DODO Research Institute, no one may use without authorization (including but not limited to copy, disseminate, display, mirror, upload, download, reprint, excerpt, etc.) or allow others to use the above intellectual property rights. If the work has been authorized to be used, it shall be used within the scope of authorization, and the source of the author shall be indicated. Otherwise, its legal responsibility will be investigated according to law.
about Us
"DODO Research Institute" led by the dean "Dr.DODO" led a group of DODO researchers to dive into the Web 3.0 world, doing reliable and in-depth research, aiming at decoding the encrypted world, outputting clear opinions, and discovering the future value of the encrypted world. "DODO" is a decentralized trading platform driven by the Proactive Market Maker (PMM) algorithm, which aims to provide efficient on-chain liquidity for Web3 assets, allowing everyone to issue and trade easily.
More information
Official Website: https://dodoex.io/
GitHub: https://github.com/DODOEX
Telegram: t.me/dodoex_official
Discord: https://discord.gg/tyKReUK
Twitter: https://twitter.com/DodoResearch
Notion: https://dodotopia.notion.site/Dr-DODO-is-Researching-6c18bbca8ea0465ab94a61ff5d2d7682
Mirror：https://mirror.xyz/0x70562F91075eea0f87728733b4bbe00F7e779788
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