Runaway Time Comment: 2020 is a year of ups and downs for Ethereum. The unexpected popularity of DeFi has brought infinite glory to the Ethereum network, but also caused prohibitive network congestion and high GAS fees. After a long delay, the Ethereum 2.0 upgrade finally started at the beginning of this month.
2020 is a year of ups and downs for Ethereum. Between Ethereum 2.0 and the pursuit of scalability, just the explosion of decentralized finance (DeFi) and the success of interoperability and currency settlement are enough to support Ethereum to show more vividness and richness than Bitcoin itself. The narrative. Bitcoin is a reliable and stable uncle, while Ethereum can be said to be the maverick young generation in the crypto world.
Ethereum has experienced a lot of ups and downs this year, and it will be meaningful to review and emphasize the major events shaping the project in 2020.
The biggest achievement: the launch of Ethereum 2.0
Ethereum 2.0 has become the main narrative of the project even before its actual launch. This upgrade promises two major improvements: getting rid of the Proof of Work (PoW) consensus that is considered wasteful, and introducing scalability through a technique called sharding.
Sharding, in short, is to create a set of parallel blockchains coordinated by a standard chain called the Beacon Chain. In 2020, we finally saw the launch of the Ethereum 2.0 beacon chain, realizing the sharding of Ethereum (ETH) for the first time.
On December 1, the press conference was held smoothly. During this year, the progress was obvious, with several iterations of the testnet.
On August 4, a testnet called Medalla was launched. Although this was not a perfect start, the team learned valuable lessons from experience and steadily fixed all errors and problems that appeared.
This conference is undoubtedly a success for Ethereum, because it finally marks the official start of an upgrade that has been brewing for five years. “I think we are very happy with its progress,” Ben Edgington, head of ConsenSys product at Ethereum 2.0 client Teku, said in an interview with Cointelegraph.
After years of development, the team is eager to ship some real things. “The willingness to deliver in 2020 came through consensus between the teams. Yes, we promised,” Edgington said. “When the Ethereum 2.0 memo has been around for a long time, we would like to proceed from this point to prove that we can achieve our goals.”
Nevertheless, Edgington assured that there was no cutting corners in the development process. “If we are aware of major deficiencies, we will not simply push the project based on the planned date,” he said.
The roadmap guarantees a faster scalability time frame
Although Phase 0 has been launched, there is still a lot of work to be done to feel the practical benefits of the new blockchain.
The community has always been more excited about the later stages. In the first stage, the first form of sharding for data storage will be introduced; in the second stage, the sharding technology will be fully available for decentralized applications based on Ethereum. At some stage in this process, the existing Ethereum 1.0 blockchain will be merged into one shard, and the PoW mechanism will be phased out.
During 2020, the Ethereum development community has assembled another vision: a rollup-centric roadmap. Rollups is a type of second layer solution that is expected to expand the scale of the blockchain by eliminating most of the computational burden.
But this is not just a problem of rollup. As Edgington explained, the concepts of stage and linear development have been completely replaced by a more flexible approach.
“Phase 0 has not changed and has been completed. But now we are building other projects in parallel. Therefore, there is already a decoupling between the scalability of sharding and the merger of Ethereum 1.0 and Ethereum 2.0. Therefore, They can be carried out in parallel, and the merger of Ethereum 1.0 may happen first, or sharding first. They can be delivered independently of each other.”
All of this means that Ethereum 2.0 may be faster than expected-of course, provided that there is no major delay.
The success of DeFi and its positive impact on Ethereum
When Ethereum’s base layer saw slow but continuous progress, DeFi set off a storm in the crypto world in 2020—and so far, most DeFi projects have been developed on Ethereum.
In the “DeFi Summer” and throughout 2020, we have seen many great achievements. Uniswap has become one of the exchanges with the highest trading volume in the world. More than 13 billion US dollars of value enters the Ethereum ecosystem to seek yield. The grassroots project based entirely on decentralized autonomous organizations has become a heavyweight project in the crypto field.
The significance of DeFi so far does not come from what it does, but how it implements financial infrastructure. Concepts such as composability, where one agreement integrates another agreement effortlessly, or non-custodial transactions and lending, have all proved their potential this year.
For Ethereum itself, the DeFi infrastructure is still stubbornly tied to its application layer. This fact consolidates the potential of the blockchain. In the future of the further development of DeFi, Ethereum is now ready to harvest.
(To be continued)
