Buterin outlines ETH2.0 roadmap but delays cause concern
Buterin’s projected roadmap anticipated ETH2.0’s anti-fraud and anti-censorship features
Ethereum co-founder and former CEO Vitalik Buterin has published a “plausible roadmap” for ETH2.0, anticipating anti-fraud and anti-censorship features that could make high-capacity ETH2 domains more secure. However, according to Buterin, this process could take some years.
Buterin confirmed that the upgrade to ETH2.0, which had been expected to start between Q1 and Q2 2022 with the blockchain switching from a proof-of-work protocol to a proof-of-stake one, is facing some delays and won’t be live before Q4 2022.
The upgrade is expected to speed up the blockchain while also improving security and sustainability, as the blockchain would be secured by ETH, not computing power, via staking or the act of depositing ETH32 to activate validator software, so bypassing miners.
The Ethereum co-founder said he is “presenting a future where the largest smart-contract platform can increase its scalability while meeting high standards for trustlessness and censorship resistance”.
The Ethereum blockchain has often been criticised for its high transaction fees, which stand at $39.38 or ETH0.009 at the time of writing, compared to less than $1 for some other leading cryptos.
Buterin said the new features would provide the anti-fraud and anti-censorship ‘armour’ that high-capacity domains need to be secure, making it easier to move assets between rollups “safely and cheaply”. However, so far efforts to improve the speed and affordablity of transactions on the blockchain have proved to be in vain, narrowing the metaverse to a bunch of stakeholders.
With NFTs on the Ethereum blockchain representing 82% of total NFT trading volume, according to DappRadar data, recent research from the Moonstream Team showed that a handful of NFT owners, around 18%, control around 80% of NFTs on the blockchain.
The ETH2.0 upgrade is expected mainly to speed up the Ethereum blockchain, guaranteeing more transactions per second without increasing the size of the nodes in the network which are vital network participants storing and running the blockchain.
The upgrade consists of three main steps, namely the ‘Beacon Chain’ (which has already happened and paved the way for the ETH layer 2 protocol), the ‘Merge’ and the ‘Shard Chains’. The latter two stages were expected to happen in the first half of 2022 but have already been delayed to the end of the year.
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Such delays prompted the community to work on the layer 1 protocol, on which ETH1.0 is based, and which will be updated on 8 December to make transactions cheaper.
“Transaction fees are the biggest pain point for users using Ethereum right now, and this EIP [Ethereum improvement proposal] would provide another incentive for migration towards rollups,” the ETH community said.
The Sevens experience
Recent research from the Chainalysis group, The 2021 NFT Market Explained, underlined how high transaction fees affect the NFT market.
In particular, after including gas fees in profitability calculations, newly-minted NFTs become a much less attractive investment. Researchers quoted the example of a recently minted NFT collection called ‘The Sevens’, a series of 7,000 NFTs that dropped on 7 September 2021.
“Within just an hour after minting began, users had attempted over 26,000 failed transactions, resulting in over $4 million in fees,” explained researchers.
“Most users who attempted failed transactions didn’t try again. But interestingly, several addresses failed multiple times, and some addresses ended up attempting over 100 failed purchases, paying over $100,000 in gas fees,” they added.
“In total, users who purchased NFTs during The Sevens’ minting event have collectively realised $20.5m in gains after selling the NFTs. But if we factor in the $4m in failed transaction fees, the collective profit falls roughly 20%.”