Ethereum Q1 Highlights: Key Results
Ecosystem Results
Ethereum’s strong Q1 growth was not without pains. Gas prices spiked in Q1 due to the incredible popularity of DeFi and NFT applications. Level 2 scaling, which is already being deployed across the ecosystem, aims to alleviate congestion and bring cost and power consumption down to near zero. Ethereum Ecosystem Highlights
Outlook In April the Ethereum core dev team approved EIP1559—a software update that improves the bid process for block space and introduces a burn mechanism for the base portion of the transaction fee. Fee burn will offset a substantial portion of Ethereum issuance, paving the way for long term network security with minimum dilution. EIP1559 is on track to be deployed on test nets on June 9th followed by official rollout via the London hard fork on July 14th. Ethereum has a dual pronged approach to scaling network capacity—rollups and sharding. Rollups batch and compress transactions off-chain, increasing transaction throughput by ~100x. Sharding breaks the Ethereum main chain into sub-chains to enable parallel computation, further improving throughput by ~100x. By employing both technologies, Ethereum 2.0 at maturity could process upward of 100,000 transactions per second versus 15 today. In early Q2, Ethereum ecosystem partners launched a number of projects powered by rollups. dYdX launched its zk-rollup platform for perpetual futures trading while Immutable X launched a zk-rollup based platform for minting and trading NFTs. Transactions via rollups consume negligible energy compared to the main chain, addressing one of the main criticisms of the NFT economy. Uniswap—the most popular decentralized exchange for Ethereum is expected to launch rollups via Optimism in the coming weeks. Toward the end of the year, Ethereum aims to switch from its current proof of work algorithm to proof of stake. The initial version of the proof of stake chain (“beacon chain”) was released in December 2020. On May 12th developers conducted a successful merge of the two chains in a test environment. Proof of stake will reduce Ethereum’s energy consumption by 99% while providing democratic access to staking rewards for all ETH holders. Balance Sheet Results Table Source: https://draecomino.substack.com/p/ethereum-q1-2021-results [link] [comments] |
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