Translated by a professional translator, compiled by BlockBeats:
During the ongoing ETHTAIPEI, Ethereum founder Vitalik participated in a media interview. Overall, compared to the market’s narrative that “Ethereum is not doing well anymore,” Vitalik remains hopeful about Ethereum. He discussed the current issues of Ethereum as well as potential solutions, such as the “Rainbow Stake” concept to address the high dominance of projects like LIDO. However, this concept is still in the conceptual stage, and the market needs to give Ethereum more time.
Due to recent challenges posed by projects like Solana and modularization, the market has started to question whether Ethereum can maintain its position as the world’s leading public chain. Although Vitalik did not give a direct answer, from his words, it is clear that the market needs to give Ethereum time, as time will tell.
Here are the relevant contents about Ethereum from the interview compiled by BlockBeats:
What does the upgrade of Dencun mean for the Ethereum ecosystem?
Vitalik:
The purpose of the upgrade is to significantly improve scalability and reduce transaction fees for Layer2 (especially Rollups). This is achieved by creating a blob within each block that cannot be accessed by the EVM. In the past week or two, we have seen a significant decrease in Layer2 fees, reducing by approximately 50% in certain cases. It should be noted that these fees may rise again as the number of blobs increases. We expect the number of blobs supported by the Ethereum chain to continue to increase significantly in the coming years.
Is it better than what you expected?
Vitalik:
I think it depends on what you mean by “better.” From a technical perspective, the upgrade has been very smooth, with the number of validators dropping from 99% to 95%, which is better than any previous forks we have done. Currently, the usage is surprisingly low, with the goal being around three blobs per block, but the average usage is only one blob per block, which means blobs are very cheap now. If you want to publish a blob, you basically only need to pay the Ethereum transaction fee. High transaction fees may be one of the reasons for low usage. If the price of blobs tends to zero, then you can use them to back up encrypted copies of your hard drive or similar things. They are very cheap for current Rollups. I expect the usage to increase in the coming months.
What do you foresee as the most transformative things in the next five years for Ethereum?
Vitalik:
Yes, I believe the next five years will be crucial for Ethereum, as many previously theoretical and small-scale applications are now preparing to enter the real-world usage stage. One significant impact of the blockchain space on the real world is that the ideas generated in this field have permeated into a much wider world in many underappreciated ways. For example, Reddit will soon conduct an IPO, and one thing they are doing is giving the same participation conditions to highly active contributors, moderators, and institutional investors in the community.
In addition, the biggest practical impact is stablecoins, where people simply use stablecoins for saving and trading. First, there needs to be very low fees, which Ethereum did not have historically, but in the next five years, Ethereum can. We have already seen Layer 2 and projects like Base approaching and continuing to improve. In the future, Ethereum can make stablecoins more accessible, open, decentralized, and not reliant on fragile third parties.
Furthermore, I expect non-financial applications to start having a greater impact. We have seen the success of Farcaster in the past year and to some extent Lens and other projects in creating alternatives to social media platforms. The special benefit decentralization brings to these projects is that basically anyone can write a new client, and if you have a new client, you can access and write to the same content without starting from scratch to build your network effect. I expect the Ethereum-based identity space to grow rapidly, with technology improving rapidly, and I really hope to see some mainstream usage soon. One major challenge many people are currently concerned about is how to prove that an account on a platform is actually a person and not a bot or a million bot accounts controlled by the same person. The problem is that when people need to solve this problem, they turn to centralized solutions, which is very bad. I hope the Ethereum space can propose truly decentralized alternatives and make them easily accessible.
How do you view the challenges in Ethereum’s current POS and how do SSF (single slot finality) and other upgrades solve this problem?
Vitalik:
I think the main challenges in POS are currently related to various centralization risks. One of the concerns is related to MEV, and another is the risks associated with staking and being a validator. The challenge in terms of MEV is that the scrutiny risk is growing, and relayers are emerging as another centralized role. Execution tickets and inclusion lists can mitigate these risks. The thinking behind inclusion lists is basically to go back to Ethereum in 2016, where decentralized validators are responsible for creating blocks, but here, what we mean by “blocks” is just transaction lists, which transactions are included, as fairness and resistance to censorship are the most important things.
The other part is related to staking itself. In a recent poll I conducted on Farcaster, I asked why people don’t stake, and the most common answer was that they don’t have 32 ETH, and the second was that running a node is too difficult. For the problem of running a node being too difficult, we already have a pre-existing technical roadmap that is basically designed to address this issue. As a node in the future, you don’t need to store the state locally or most of the history locally, so the amount of data required to become a node will decrease from multiple TB to a node that can run in RAM in principle. Once we have this, resyncing and syncing, for example, will become faster, potentially taking only a few minutes. With the arrival of ZK-snarks, the requirements will be further reduced. I think in the long run, running a node will feel like downloading some data and can be done on any computer. There are also new POS methods involving sacrificing the requirement for every staker to participate in every round of consensus. If you sacrifice this requirement, then you can benefit from SSF. Rainbow Staking is one of these proposals.
Now there are many modular blockchain solutions, and we have also seen ideas like Ethereum being responsible for shared order execution. So, what problems should Layer1 handle, and what should be left to others?
Vitalik:
Modularity means that there are fewer single chains, and different components are completed by different parts. Researcher Justin Drake is a strong supporter of Ethereum’s shared order execution, which is a vision. If you look at the work of Layer1 today, Layer1 is responsible for shared security, which is a shared settlement layer. With Ethereum, every Layer2 has the ability to read any other Layer2 without relying on any centralized role. Ethereum provides data availability for Rollups but not for validium. The ordering, the selection of transaction order, is currently determined by each Rollup. Personally, I am neutral on the issue of shared ordering. I know some people support it, while others think shared ordering is overrated and believe that the benefits of shared liquidity are not as significant as imagined. For an average user, whether the market depth is $500,000 or $1 million doesn’t matter; you just need enough market depth to handle your own transactions. They also think that cross-Layer2 MEV is not that important, and any MEV between Optimism and Arbitrum can be decomposed.
For other types of functionality, I do hope that we can significantly expand the amount of data that Layer2 or Ethereum directly supports. In an ideal world, everything would be on Rollup, and Ethereum would not handle data availability for everything. I would like to see highly secure things on-chain through Rollups.
Another big issue is related to account abstraction. If your account has state that may need to be changed, especially if you have a key and you want to revoke that key and add a new key or if you want to change the algorithm, where does that state live? If you have accounts in a hundred places and need to upgrade/update your accounts, do you have to send the same data 100 times? One method is to have a minimal critical storage Rollup, where the state lives in one specific place, possibly a very neutral Rollup, and then all other Layer2s can call it to prove what the current state they are accessing for each transaction is. But these are all early-stage ideas.
How does ZK solve the trust problem for non-technical individuals? How do they know that ZK actually achieves identity? If you have a system that theoretically provides you with a certain level of privacy, how do you, as a user, know that you actually get that level of privacy?
Vitalik:
I see this question as an extension of the problem Ethereum already has, which is, if you put your assets into a smart contract instead of just giving your assets to someone, how do you actually know that your smart contract doesn’t have a backdoor that allows that person to take it or take your funds at any time? We can currently publish the source code through Etherscan, and Etherscan checks the source code, which is a good tool for developers and experienced users. For the average user, they can’t read a thousand lines of code themselves.
We see wallets becoming more complex, giving more warnings, telling you if you’re interacting with an application or if you’re interacting with some application that you haven’t interacted with before. What I ultimately want to see is DApp user interfaces becoming versioned. So, just like you know, instead of hosting the interface on a website, you upload it to IPFS, and every update has to be a blockchain transaction. You can have the authorization for that transaction controlled only by the team, so there is no server that can be hacked to enforce updates. Additionally, the opinions of high-quality researchers and audits need to be aggregated, and wallets play a very important role here, as they are an important active assistant that helps users aggregate all this information. The tools used on Ethereum should be used for ZK, such as publishing Cairo code and verifying it on a platform similar to Etherscan. These can all be done.
What are the benefits of integrating AI with cryptocurrencies, and how will it reshape the industry?
Vitalik:
Many people are very curious about the intersection of AI and cryptocurrencies and have been asking this question for the past 10 years. I think it is a valid question because at a very high level, AI tends to be centralized, while cryptocurrencies tend to be decentralized, so there should be some complementary aspects between the two. But the question is, can we get actual useful applications? In an article I wrote about two months ago, I tried to analyze this question and identify some specific meaningful applications. So, I mentioned, firstly, AI participating in prediction markets or other types of markets. The second is AI as part of a wallet, helping users understand the online and on-chain environment they are interacting with. The third is the use of cryptography, including things like ZK SNARKS and ZKML, MPC, etc. The fourth is AI for security and privacy, which can be applied to other fields if successful. Among these, I think the first two are short-term and can be seen, while the latter two are more speculative.
Another aspect is the role of AI in debugging code. One of the biggest challenges in this field is bugs in code. If we can achieve this, then we may eventually have a bug-free ZK-EVM. The more bugs we can reduce, the safer this space will be.
Are you more active on Farcaster than on Twitter?
Vitalik:
Farcaster is interesting, and the quality of participation there is higher. I am also looking forward to seeing alternative clients for Farcaster. It’s not a server; it’s a chain. You can make your own client, and your client can read or write the same content, so people using Warpcast can see it. Another thing I am pleased about is that Farcaster is easy enough to use for non-crypto people, which many other applications have not achieved.
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