This episode is sponsored by the Stellar Community Fund
Follow the show here for more.
In this installment of "The Protocol," hosts Brad Keoun, the founding editor of The Protocol Newsletter, and tech journalists Sam Kessler and Margaux Nijkerk, explore the following stories:
TOPICS |
- Dencun - The Next Big Upgrade
Developers also penciled in the end of February as a soft target for the upgrade to hit the main Ethereum blockchain. - Updated Ethereum Roadmap
Ethereum co-founder Vitalik Buterin released an updated version of his Ethereum ecosystem roadmap last weekend. The roadmap is used as a rough guiding post and progress tracker for the overall development of the Ethereum ecosystem, and this year's update gave a glimpse into how Buterin thinks the second-most valuable blockchain ecosystem might be able to address two of its biggest challenges: speed and centralization.
PROTOCOL VILLAGE SEGMENT
- SOLANA: SOL token
Solana has been one of the biggest gainers of the latest crypto cycle, with a handful of airdrops and meme tokens accelerating big boosts in the price of SOL. Also, Ethereum co-founder Vitalik Buterin has released an updated roadmap for the ecosystem.
EPISODE LINKS |
Ethereum Developers Target January for First Testnet Deployment of Next Big Upgrade, 'Dencun'
https://x.com/vitalikbuterin/status/
Single slot finality | ethereum.org
The Protocol: Is Solana's Rebound The Real Thing?
Sign Up forTHE PROTOCOL NEWSLETTER
From Our Sponsor:
The Stellar Community Fund (SCF) is an open-application awards program that draws on community input to support developers and startups building on Stellar and Soroban. Accelerate your web3 project today.
Apply for Funding at communityfund.stellar.org
The Protocol has been produced and edited by senior producer Michele Musso and our executive producer is Jared Schwartz. Our theme song is “Take Me Back” by Strength To Last.
TRANSCRIPT
Audio Transcript: This transcript has not been edited and may contain errors.
Margaux:
Hello and welcome to the Protocol Podcast. I'm Margot Nykerk. I'm here with my co-host, Sam Kessler, and Brad is out today. Brad Cowen is out today. So happy New Year to all. We hope that Brad is enjoying his time off. But first, before we begin, don't forget to subscribe to our newsletter, our weekly newsletter, The Protocol on CoinDesk.com. And let's dive right into it, as we say, with the latest news and developments in tech behind crypto and blockchains.
In our first segment, we're gonna talk about the latest update that developers were penciled in over the holidays that we might've missed, but Ethereum developers basically agreed on a date for Ethereum's next big upgrade, DENKUN, to go live on the first testnet, Gurley. This is happening on January 17th, I believe.
And so here we are, another year, another upgrade for Ethereum. And for those who don't know what DENKUN is, it's basically the big upgrade that consists of ProtoDank sharding, EIP 4844, which will help make the cost of transactions on rollups less expensive. The tech behind this basically comes from sharding, which is a mechanism that splits the blockchain up into many blockchains.
known as shards. This is the first iteration of that will help, will bring that sort of mechanism for blobs of data. I like to think of it for those who don't really understand it as like, this is a highway that's adding lanes to the highway to be able to add more cars in and process that faster. So yeah, this is a really big anticipated upgrade. And this is, you know, we're finally kicking off a testing process. And that was, yeah, just an exciting.
little note to have happen at the end of the year. But I don't know, Sam, do you have any thoughts on this?
Sam
Yeah, so I know this was planned for last quarter, right? It's pretty complicated though, which is why I got pushed back. Do you know like what those complexities were? I know you go to these calls every, well, I guess it's bi-weekly every other week where they touch on kind of why things are slowing down. What was hard to implement here?
Margaux
Yeah.
I think a lot of it has to do with the coordination with all this. This is, like you said, this is an effort that requires a lot of technical complexities and it gets really into the nitty gritty of things. But mainly Ethereum is a global network and these teams are sort of based all over the world and things happen. And so I think as the merge, like with the merge that was postponed or...
they would say it wasn't postponed, but it was delayed. It was anticipated to happen earlier. Same here, I think Ethereum developers want to feel confident in what they are shipping. And yeah, this was supposed to happen over the fall. Now it looks like it's happening towards the end of February, maybe even early March, which sort of coincides with ETH Denver. So I'd be kind of excited to see if that falls right in the middle of ETH Denver or right before or after. Who knows if they'll be tired.
Sam
Yeah.
Margaux
But yeah, that I think a lot of it just has to do with coordination at this point.
Sam
Maybe it'd be useful to zoom out for people. I've been writing, like, I think I wrote about proto-dang sharding maybe even at this point, like two years ago. Like for those who don't know, like this idea of sharding that you were talking about, Margo, that was initially supposed to be shipped with the merge, which is that big upgrade that happened not this previous summer, but the summer before where Ethereum shift away from mining to the current proof of stake system. And the idea of sharding,
Margaux
Yeah.
Sam
I was going to be like this sort of revolutionary way to, like you said, split up Ethereum into a bunch of different lanes in order to process transactions more quickly. The idea of protodank sharding though was to kind of, it's almost like sharding light. And this is dank sharding light, which we won't even get into all of the differences between dank sharding, protodank sharding, and so on. But the idea here is it kind of like embraces the reality that sharding itself was not
Margaux
Yeah.
Sam
…deemed enough to scale the Ethereum network. Too complicated, it would have been kind of like risky to implement and it would have kind of solved some of the issues that are already being solved by Ethereum's rollups. So this, you know, even though it's not the merge, which was like a huge thing, it is a pretty big deal because it marks the biggest step that Ethereum's really taken that I can remember in terms of facilitating this big vision towards a rollup-centric Ethereum.
The idea being that these blobs of data will be, you know, the main currency. I'm not, you know, not in the big capital C currency, but the, yeah, the main way these chains works, um, work from the chain works from now on.
Margaux
Yeah, no, and also there was Shopella right between the merge and this. So this was postponed again. That was also supposed to, you know, they were talking about maybe adding it into staked ether withdrawal. So this keeps being postponed. So I guess this is finally happening. But yeah, I think, you know, this is also, it's interesting that it's coinciding sort of with, you know, as we've talked about a lot on this podcast, the L2 races, I mean, like a year ago, I think.
L2s were picking up a lot of steam, especially as these zero-knowledge roll-ups started to come out. And so it's just interesting to see the timing around all this. Yeah.
Sam
Yeah, yeah. I mean, maybe one more thing I realized we haven't mentioned too is like, we keep on talking about these blobs and using all of this jargon, but then like, why does it actually help with these rollups? So just to refresh people, like rollups are these chains that operate alongside Ethereum to help scale it. You know, you can do transactions on these chains, optimism, Arbitrum, and so on. Then they all get bundled up and then passed down to Ethereum where they're settled onto Ethereum's ledger.
And this whole idea with proto-Denk sharding is it kind of like contends with this new reality where most activity is happening on these roll-up networks rather than on Ethereum itself. And a really efficient way or a more efficient way for these roll-ups to operate is to, you know, make it more native for Optimism, Arbitrum, these roll-ups I mentioned and so on, to post kind of these amorphous blobs of data to Ethereum rather than...
transactions and this kind of more rigid structure that exists today. They kind of have to jerry rig all of the data that comes from rollups to fit the Ethereum mold as things work currently. But under this new system, it'll become drastically more efficient because you can really post any blob of data and it can get interpreted and so on and so forth to speed things up. Maybe we can move to our next topic.
Margaux
Yeah.
So why don't we transition to the next topic? Well, we're still sticking in the Ethereum space. Over the holidays, Vitalik Buterin, the co-founder of Ethereum, released his updated roadmap of the blockchain. He comes out with these roadmaps every once in a while and updates them according to where Ethereum might be going. It's not like a set in stone. It's not a Bible. But maybe Vitalik is a little bit of a biblical figure in the Ethereum space. Depends who you ask. But you know, he's not, his word is not set in stone. So these were suggestions and different tracks that these formats have different tracks that happen simultaneously and there are updates and upgrades that.
Sam
Yeah.
Margaux
…happen at the same time to make Ethereum more efficient, more user friendly. And so this was sort of interesting to see that, he was busy thinking and releasing this over, I think it was like between the Christmas and New Year's. But I don't know, Sam, you took a look at the roadmap. What were your thoughts on this?
Sam
Yeah, so like you said, he kind of breaks things down into different tracks. I honestly forget the word that he uses, but the merge, the surge, the scourge, the verge, the purge, the splurge. Yeah, it's kind of, it has a ring to it. And he likes his rhyming, but each of these tracks, it's essentially a bucket of different upgrades meant to upgrades, code changes, concepts, and so on.
Margaux
Yeah.
Got a nice ring to it.
Sam
that is organized around some theme for the chain. And one thing that I was interested in this time around is that as Vitalik kind of notes in an X thread about the updated roadmap, he's changed the definition for one of these buckets to be a little bit wider. So the bucket that, he made several kind of changes of this nature, but this one was the one I thought was the most interesting. So there's this thing called the scourge.
Margaux
Mm-hmm.
Sam
So previously, the goal for the scourge, this bucket, was to quote, ensure reliable, incredibly neutral transaction inclusion and avoid centralization and other protocol risks from MEV. So it was essentially this bucket of things focused on fixing the problems with maximal tractable value. This idea of like looking at things in Ethereum's mempool yet to be processed transactions so that you can front run people, back run, sandwich attack, all these things that you can look up that allow people to milk a little bit of extra profit from Ethereum. And that led to some centralization issues. And that was what this bucket was supposed to address. But now what Vitalik's done is he's kind of redesigned the scourge to be broader. He says it's quote, "About fighting economic centralization and proof of stake in general in two key theaters," not just one like before. So now it's maximal extractable value, but also...general stake pooling issues. So he's added to this bucket a set of updates that are focused on the phenomena of things like Lido the big staking pool, which has amassed a ton of staked ether which you know correlates to power over the blockchain the concern being that if just a few of these staking pools like Lido get most of the stake they you know
Margaux
Mm-hmm.
Sam
kind of can amass a disproportionate amount of control over the networking can theoretically slow things down, mess things up, so on and so forth. So Vitalik is taking aim specifically at that category of things with the new definition of the Scourge. And you can kind of check out that thread that I mentioned, just look at Vitalik's Twitter or X to see the specifics there. But Margo, I wonder what you think, what really stood out to you this time around?
Margaux
So the other topic that I think was interesting that Vitalik added was this idea of single slot finality. Right now, finality is a measurement of adding blocks to the blockchain. It takes about 15 minutes for blocks to be finalized. This idea would mean that it would come down to a single slot.
for it to be finalized. So it would just move a lot faster, which would alleviate certain security concerns, like reorgs and MEV attacks. So I think this has more to do with the security of it. I don't really think there's an end user change, except for maybe a more secure network. But yeah, this is interesting. This is something else I'll be following over the next few months and seeing if that enters any upgrades.
Sam
I mean, I think from like a user standpoint too, this could be pretty cool because like the biggest, I mean, we're gonna talk next about Solana preview. One of the reasons why Solana and so many other chains have been positioned as like the Ethereum killer is because like Ethereum is historically like a pretty slow blockchain. Like you said, it can take 15 minutes for a transaction to finalize, which means between the time you submit a transaction and the time it actually gets cemented onto Ethereum's ledger in a, you know, theoreticallpermanent way. You know, there's some nuances there, but basically a permanent way takes 15 whole minutes. And that's just like not fast enough for certain kinds of applications. You want to have a guarantee that your trade has been executed. Like you might, you know, make a certain trade and it you know, have a contingent on that, you know, on a previous trade being successful, you don't want to wait 15 minutes in order for that contingency to come through.
So I think there's a lot of different kinds of apps that today can exist really efficiently on Ethereum itself, currently exist on Ethereum's roll-ups or exist on other chains that are faster like Solana that might be able to kind of move their way back to the main Ethereum chain if they manage to speed things up. And I think this is broadly interesting just because we mentioned the centralization problem that Vitalik was trying to address with the scourge. This kind of like hits on another one of the big problems for Ethereum which is, you know, speed and it's just the consistency of centralization and speed being these two things that, you know, Ethereum and all these other blockchains seem to be dealing with. It is just like, you know, perennially, the thing that just year after year after year, um, yeah, these ecosystems are going to have to focus on. And it's just interesting seeing, um, you know, how that progress is, or, or isn't made on a, on a year to year basis. Um, so anyway, yeah.
Margaux
Yeah. No, totally. I mean, we'll be following all this as this progresses. But anyway, we're gonna go take a break. And as Sam said, we're gonna be talking about Solana when we come back.
<BREAK>
Margaux
All right, we're back from the break. Thanks, everyone. Welcome back. We're going to be diving into Solana. It's been a lot in the news lately. But maybe, Sam, why don't you kick us off with what's happening in the Solana world?
Sam
Yeah. So Solana has been doing pretty well. Solana, for those who don't know, is, you know, if you're listening to the Crypto Tech podcast, hopefully you've at least, you know, heard of it. It's the, you know, it was positioned, like I said before, as like this Ethereum killer when it came out several years ago. It's this blockchain that has, you know, much faster settlement, but throughout its history, particularly like recent history over the past couple of years, has had a You know, historically, it was seen as a much less reliable chain than like a Bitcoin or an Ethereum had a lot of outages, it had a lot of slowdowns and so on and so forth that got in the way of one of the key value adds of blockchains, which is reliability compared to traditional, you know, financial systems. But the other problem for Solana is that
A lot of those sole SOL tokens that are the native token of the Solana ecosystem were held by Sam Beckman Fried, famously CEO, founder of FTX Alameda, who is now behind bars. It was not a good look. So the price of Solana went from over $200 in 2021 during the heyday of crypto, the most recent heyday. It went down. It crashed after SBF and everything fell apart to under $10 in 2022.
But now it's back above $100 since October when it was still pretty low in that $10-ish range. And there's a lot of things that we can attribute that to. Margot, were you kind of surprised to see this? We can talk a little bit more about it, but what do you think about Solana as somebody who focuses more on the Ethereum ecosystem? How do people talk about it?
Margaux
Yeah, our Solana Beat reporter a lot more closely to figure out what's happening over there in Solana world. But maybe, I don't know, maybe you can explain a little bit, like maybe why the price of Solana is moving back up. Is this having to do more with a wider market confidence, or does this have to do with some other innovations happening in that ecosystem?
Sam
Yeah, we should send this podcast to Danny so he can send it to some of his sources and see what they see what they have to say about what. Yeah, I know we should bring. Yeah, we should. Yeah, we could have had him sub in for Brad maybe, but I'm sure he's had some stuff. He'll have some stuff to say about, you know, whether Solana has been dead the past couple of years and certainly has seemed dead from the outside, you know, or particularly from a price, you know, if you look at markets, which we don't that often, but anyway, where's the market hype coming from this time?
Margaux
We should get him on. We should get him on, Danny. Come on next time.
Sam
I think Solana fans will kind of caveat what I'm about to say by saying that Solana did seem to be experiencing something of a come up, starting like I said before in October, which is before some other developments happen that I'm going to talk about in a second. And so it did seem to see some organic growth just from more developers entering the ecosystem, more projects proliferating just in a broad sense.
I do think that as we kind of move towards December, a lot of the hype that we're seeing around Solana is based in similar sorts of like hypey, me-me, airdrop focused sorts of phenomena that we've seen in past cycles on Ethereum and elsewhere where people get really excited about super buzzy projects, if not the core tech itself. So, You know, one key thing has been bunk this big meme coin on Solana, which is kind of like Solana's Dogecoin or Shiba. Shiba Inu. It it went way up in price, even though it's a little bit down in right now, relative to where it was at its peak. It's still up over 200% in the past 30 days. At a certain point, there's this phone, the Solana phone that was, you know, it had like dismal sales, it wasn't really going anywhere. It seemed pretty much dead on arrival, this Android device, people actually started finally buying Solana's Android device just so that they could get this bonk airdrop that people realized that Solana phone holders were entitled to. So people bought this phone, finally it found its market just so that people could get a hold of those bonk tokens that were worth more than the phone itself. And then the price of the phone you know, sword to thousands of dollars. But, you know, there's been a couple other things. There's Pith, which is an Oracle network that's based mostly on Solana, but has since expanded that launched a token, a governance system, governance system, and has seen a bunch of trading of that governance token. And then the big one was GEDO, which is a liquid staking service, kind of like a LIDO type program, you know, on Solana, which alsojust airdropped its token. And I have sources that have made tens of thousands of dollars just on that airdrop with using, because they used GEDO years ago and kind of forgot about it. It's insane. So you saw a lot of hype. I'm rambling here a bunch. There is a lot more to say about whether all of this is sustainable, but I'll just close by saying there are these individual projects, these airdrops, these big, buzzy tokens that have led to, I think some of the gains that we've seen are accelerated them on Solana. But...
Um, you know, I think fans of the ecosystem will point to, you know, the reliability of Solana and, and say like, Hey, Sam, I can free that. That story's kind of in the past. Solana itself, technically, if you look at it, um, it has not had an outage since last February, which, um, you know, that's pretty good. Um, you know, um, broadly speaking, but specifically for Solana, which used to, it felt like monthly, sometimes multiple times a month have outages. So Solana has fixed a lot of the problems that were plaguing it before. And so.
Margaux
Yeah.
Sam
know, some of this, some of these gains might be, you know, sustainable and speak to the technology itself. Sorry for sucking all the air out and talking there for a while, Margot.
Margaux
No, you're fine. No, you're good. Yeah, no, I think we'll be paying, I think we're going to be starting to be paying a lot more attention to Solana on this podcast. Personally, I've definitely noticed Ethereum figures start to talk about Solana again, which means that maybe Solana is giving Ethereum a run for its money. But anyway, I think that's about it for today. So thanks, Sam. Thanks all for listening. Thank you for coming to the Protocol Podcast. And thank you, Michele Musso our
producer who makes us sound divine.If you have any questions about any of the stories or comments, please reach out to us at podcasts at coindesk.com and the subject line use the protocol. You can listen to us weekly on the CoinDesk Podcast Network or wherever you get your podcasts. Also subscribe to our weekly newsletter, The Protocol on coindesk.com and we shall see you next week at this time.
Take care, happy new year.
Sam
Thanks everybody.
