EIP Fun Weekly #21: Growing Validators, Growing Pains
This week we look at the challenges arising from Ethereum's exploding validator count, plus updates on key EIP meetings, new ideas, and more!
Hello everyone! Welcome to read the 21st issue of EIP Fun Weekly. Let's take a look at what happened in the EIP community this week.
EIP Updates
First, let's review some of the key meetings this week and the formal changes to EIPs.
AllCoreDevs Execution Layer Meeting #174
Takeaways:
Testing Upgrades: Devs successfully tried a test upgrade, Dencun, on a small test network. Dencun is a part of the Cancun/Deneb upgrade that will introduce blobs, a new data structure for Ethereum. They plan to test Dencun on a larger network before applying it to the main Ethereum network due to the costs involved.
Technical Tool Updates: They discussed changing some technical tools to include new data related to blobs, such as the execution API methods eth_feeHistory and eth_blobGasPrice. They also asked for feedback from Layer-2 protocol teams on these changes.
Simplifying Upgrades: There's a plan to make it easier for certain programs to verify complex proofs, such as Verkle proofs, which are a part of the Verkle upgrade that will improve the scalability and efficiency of Ethereum. They're debating whether a previously discussed tool (the BLS precompile) will work or if they need a new one (the Verkle proof verification precompile).
Meeting Schedule: Initially considering canceling upcoming meetings due to conflicting events, such as Devconnect and the U.S. Thanksgiving holiday, they decided to keep the meetings going to prevent delays in the Cancun/Deneb upgrade, which is a significant and urgent upgrade for Ethereum.
Want to know more details?
Check out: Ethereum All Core Developers Execution Call #174 Writeup by Christine Kim.
EIP Status Change
Here is the EIP that has been approved for a status change asynchronously this week:
EIP-7549: Move committee index outside Attestation
Status: Undefined →ReviewAbstract: This proposal aims to make Casper FFG clients more efficient by reducing the average number of pairings needed to verify consensus rules. While all types of clients can benefit from this EIP, ZK circuits proving Casper FFG consensus are likely to have to most impact.
EIP of the Week
Then let's take a look together at the applications or developments related to EIPs this week.
New Idea: A fully decentralized, account abstracted, zk leveraged smart contract wallet
The main point of this proposal is to create a fully decentralized, abstracted account wallet that allows users to access and spend funds using just a username and password.
Poseidon Hash which is used to create hash from the password and is snark-friendly is used to secure the security of this method.
Siddharth Patel made this proposal in Fellowship of Ethereum Magicians forum.
What’s its potential (use cases)?
According to the original post, this method can create a user-friendly and decentralized wallet solution that simplifies the access and spending of funds while maintaining a high level of security and privacy.
Poseidon hash may not a familiar term in Ethereum community, and Siddharth is welcome to any feedback from the community.
New Idea: Decentralized reputation system for voluntary donations, positioning/advertising, and customer review
This proposal suggests a system where sellers donate to charities to boost their online reputation. Sellers provide customers with special tokens for leaving reviews, controlling costs. Reviews also involve charitable donations, making sellers look socially responsible. Overall, it's a streamlined and secure way for sellers to build trust and a positive image.
Piotruscik posted this idea on Ethereum Research forum.
What’s its potential (use cases)?
This proposal can help create a reputation management system for online sellers. Sellers can enhance their online image by making donations to charities. They provide customers with special tokens to encourage reviews, controlling costs. The reviews, when posted, trigger charitable donations, showcasing the seller's social responsibility.
Related EIPs
It draws inspiration from ERC-4337 (Account Abstraction) to create review token without cost from the customers.
Idea: A Proposal for the Ethereum Reality Service
The proposal outlines the Ethereum Reality Service (ERS), which aims to link physical or real-world assets with blockchain assets in a standardized manner.
The ERS introduces a set of components and registries to achieve this goal, including the ChipRegistry, ManufacturerRegistry, TSMRegistry, and ChipResolver. These components work together to enable the association of chips with smart contracts and attestations, allowing for the authentication and verification of physical objects on the blockchain.
Ccamrobertson, cadillion, ryanouyang, creeefs, digit, pmg, and ramicaza collectively created this proposal.
What’s its potential (use cases)?
The ERS has several potential use cases, including:
Supply Chain Management: ERS can be utilized to track and verify the authenticity of physical goods throughout the supply chain. By associating physical assets with blockchain assets, it becomes possible to ensure that products are genuine, not counterfeit, and have a verifiable origin.
Asset Tokenization: ERS enables the tokenization of physical assets, allowing them to be represented as non-fungible tokens (NFTs) on the Ethereum blockchain. This opens up new possibilities for fractional ownership, liquidity, and transferability of traditionally illiquid assets, such as real estate, fine art, or collectibles.
Gaming and Virtual Worlds: ERS can be leveraged in gaming and virtual worlds to authenticate and validate in-game assets or virtual goods.
Anti-Counterfeiting Measures: ERS helps combat counterfeiting by enabling the verification of authenticity for various products, including luxury goods, pharmaceuticals, electronics, and more.
Related EIPs
The ERS does not explicitly mention any specific EIPs. However, it aligns with the broader Ethereum ecosystem's efforts towards interoperability, asset tokenization, and decentralized applications. Some EIPs that may be relevant in this context include:
EIP-721 provides a blueprint for representing unique assets on the Ethereum blockchain.
EIP-1155 allows for the creation of both fungible and non-fungible tokens within a single smart contract. This standard is often used for gaming and virtual world applications.
EIP-712 defines a standard for Ethereum typed structured data hashing and signing, which is useful for verifying cryptographic signatures and attestations associated with physical assets in the Ethereum Reality Service.
Anecdote of the Week
Ethereum is facing a major challenge - the number of validators securing the network has grown exponentially, surpassing 790,000 as of September 2023.
This rapid expansion is straining Ethereum's peer-to-peer layer, which is the networking protocol validators use to communicate and reach consensus. The network is already experiencing some signs of stress and congestion, such as high gas fees, low throughput, and frequent block reorganizations. If the validator growth continues at the current pace, the network may face more severe challenges and risks in the near future.
The root cause of the issue is Ethereum's model for validators. In Ethereum's current validator model, there is no native support for delegation. Validators must directly stake 32 ETH to participate in consensus and earn rewards.
This differs from some other proof-of-stake blockchains that allow "delegated staking." In delegated staking, token holders can delegate their stake to validators without needing to set up validator infrastructure themselves. The delegate earns a share of rewards based on their staked amount.
Because Ethereum lacks delegated staking, the only way to earn staking rewards is by running your own validator node. This encourages more individual validators to participate, since people can't just delegate their ETH to a few big players.
However, a downside is that every new validator must stake 32 ETH. As more ETH gets staked overall, more individual validators get created to maximize rewards for those staking.
There is no way to consolidate stake to fewer validator nodes, like you can with delegation. More ETH staked always means more validators.
So in summary:
No delegation means more individual validators
But no delegation also means validator growth is unchecked as ETH staked grows
More validators = more strain on the network
Unbounded validator growth centralizes the network over time, as more sophisticated hardware is needed to support the demands. It also makes planned upgrades riskier and harder to implement.
To curb growth in the short term, Ethereum developers plan to cap new validator activations at 8 per epoch in the upcoming Cancun/Deneb upgrade. Finding an optimal solution won't be easy, as changes to validator economics are highly political. But some change is necessary to ensure Ethereum can scale sustainably alongside its growing popularity.
Want to know more about it? Check out:
EIP Events
EIP Editing Office Hour Meeting #27
Date & Time - Nov 14, 2023, at 15:00 UTC
For details about the meeting, you can visit this GitHub issue.
EIPIP Meeting #94
Date & Time - Nov 15, 2023, at 15:30 UTC
For details about the meeting, you can visit this GitHub issue.
AllERCDevs #14
Date & Time - Nov 16, 2023, at 15:00 UTC
For details about the meeting, you can visit this GitHub issue.
Tokenbound Weekly Dev Call (ERC-6551)
Date & Time - Nov 16, 2023, at 15:00 UTC
For meeting message and more detail, you may join the official dev working group here.
That's all for this week from EIP Fun. EIP Fun is created and supported by LXDAO and PlanckerDAO. We aim to serve as the “layer 2” of the EIP ecosystem, simplifying and accelerating the adoption of EIPs.
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