The Ethereum Dencun Upgrade Is Here

Transcript

it's really hard to predict the future of the space so I try to avoid it if I can I think the trade-offs for like the number of layer twos is do you care more about like liquidity and network effects or do you care more about prioritized [Music] execution hello and welcome to the protocol podcast I'm Brad C here with my co-hosts Margot nykerk and Sam Kessler we're excited to dive into Today's Show with the latest news and developments in technology behind crypto and blockchains first please do not forget to subscribe

to our Weekly Newsletter the protocol on coindesk.com and let's dive right into it we are very lucky today because we've got a big story this week which is good for journalists and we have exactly the right guest for this week's podcast uh the big story is the ethereum denune upgrade which is the biggest upgrade for probably almost a year at least um on the ethereum blockchain which of course is the world's second largest blockchain by market cap but you know also the first Super influential smart contracts blockchain that has really set the tone

for kind of all of blockchain development now that we're all seeing um even on bitcoin and uh this upgrade is super important for ethereum's scaling road map and our guest is Tim boo uh from the ethereum foundation he is the coordinator of the week bi-weekly allore Dev call for ethereum devs and he's joining us from Vancouver welcome Tim thanks me and Margo is our ethereum beat reporter and she has been all over this reporter for not just like weeks days but also months and like a year I

remember when you wrote your uh Denon preview sometime like probably last spring Margo maybe um yeah we wrote a brangelina story about denu about where that gets gets the name from right the denb and the the uh Cancun upgrade so you know these upgrade Tim can attest to this probably but these upgrades love to brangelina the the two names because of the two upgrades simultaneously going on at the same time on the different layers but um yeah why don't we get into this um let's start there so we're talking about this upgrade uh denune but maybe Tim you can you know just to set the stage for our audience like what are in your view the key points the key takeaways of what this denot upgrade

entails yeah of course um the main thing I mean this is kind of thing everyone talks about is EIP 4844 also known as Proto sharding and the idea with that is ethereum Will introduce uh aeral data storage to the network which we call blobs and layer twos uh which are kind of these these constructions that ethereum uses to scale in many different ways they consume a lot of data on ethereum and therefore they have to pay a lot of storage costs and as a layer to user if I'm sending a transaction on optimism arbitrum ZK sync most of my transaction fee is actually paying for the storage cost of data back on ethereum L1 and so with this upgrade uh

we're introducing Emeral data storage and because the data not stored forever then obviously ends up being cheaper and therefore it you know the those cost savings get passed on to Layer Two users so that's definitely the biggest part of it there's a ton of other stuff in the upgrade but um that's the focal point I'm curious you know you brought up the the the focal point is for layer twos and rollups especially because they are sort of now part of this like bigger road map um and part of like the bigger ethereum ecosystem and are sort of essential to scaling the blockchain and are there to sort of also allow for cheaper transactions you know from your perspective there's been a lot of conversation and rivalry among these these layer twos sort of who can deliver the best product and with this upgrade

you know they're going to also be competing for lower transaction fees like what do you sort of Envision in terms of like that reduction in terms of transaction fees like what is that ballpark um and do you have any sort of feeling in terms of what how they are anticipating this new Co chain basically yeah there's a lot to unpack here so the and and I guess we're get we're getting into the weed so the way the way the upgrade works is it basically segregates data for l2s in its own fee Market relative to like all the other gas trans actions on ethereum um and this means that there's just like way less people competing for that so like right now if I'm say sending a transaction on L1 and sending you some

tokens or doing a swap or whatever um I'm competing for my transaction gas price with the optimism sequencer and the ZK sync sequencer um on on like the IM auction and therefore you know like uh it raises the price for everyone so by having the separate fee Market you allow only l2s to like compete for this limited amount of blob space that we call it and that lowers the fees it's really hard to say like exactly how much has this lowered the fees is this like 5x 10x or whatnot because fees are a function of like supply and demand and so um you know like sure you could say like at today's prices and today's usage and like the demand for for Block space you know if all the transactions moved

you probably see something more than like a 10x reduction but then if they all start using blobs um and then more people want to use rollups because they're cheaper obviously this leads to like prices going back back up but you're serving more people at that's you know previous price point um so I I don't want to make like a specific prediction on like you know what the market equilibrium is but the way I think of it is like you know price is a function of supply and demand we're increasing Supply significantly for exactly the type of data that rollups needs and also type of data that's not pretty useful for any other applications on L1 and the implication there is like you know this creates like much more room for them to post their data and and therefore always the fees and the other thing that's really important about this

update is ethereum has like much more long-term scaling plans so we call this Proto than sharding um because it's kind of the first step towards full sharding and what we've done with this upgrade is we sort of set up all the infrastructure and scaffoldings for rollups to use this and and in the future when we kind of continue scaling and and just have more basically blob space on the network rollups won't need to do anything to support it so they'll need to like change things now to move from like this permanent data to this this temporary data but in the future as we come up with like different scaling mechanisms to add more of this temporary data rollups will just sort of get those upgrades happening in the background without having to do anything and I'm

glad we're getting into the weeds I also sort of jumped ahead of of all this but we'll get into that in a second with s and Brad um but I wanted to ask one more before I'll turn it over to them we are speaking to you quite frequently I feel like on a or on a yearly basis at this point in terms of like the upgrades itself right last year around this time it was April W chaella the merge was obviously like the big like the big upgrade that everyone sort of was looking forward to I guess it's a year and a half from year to year it seems like ethereum sort of goes through like one major big upgrade where does um denune rank in terms of like the most important upgrades to ethereum compared to these past upgrades in terms of importance it's a hard question in a way

because um the other essential I guess is right after the merge um I think the merge will probably never do anything as significant and it's probably good as well I don't want to do those things every year um but I think yeah probably right after the merge and the I guess there's a couple reasons for this one is um just the amount of like complexity and like sort of be risking that in a way knowing that that you can ship this this whole additional layer of of data to ethereum that's a pretty huge milestone and then I think also the fact like I was just saying that it enables a lot of the future scaling is another Super valuable property and then the third bit would be um Justin dr's been

talking about this idea of based rollups uh a time in the past few months and based rollups would basically leverage all of this as well um and I think this is another part we're really laying like valuable infrastructure with this upgrade even though it's maybe not as like not all visible in the same way that like the merge was you know a a very distinct shift from proof of word to proof of State um this time around you sort of see the tip of the iceberg with like you know the the small number of blobs we're adding um but most of the work was actually just like the infrastructure to to get this in in a spot where we can build on it in the future so um this is the first time that um ethereum has kind of taken a swing at sharting this is Proto dang sharting

it's kind of like this early version of the concept of kind of like adding Lanes to the ethereum highway right to improve to increase capacity to you know increase the amount of traffic it can handle order to reduce fees this time it's focused on rollups so we're going to be reducing fees for ideally reducing fees for the rollups that people use the layer twos on top of ethereum rather than the base ethereum chain which is super expensive so first off just to like Orient ourselves is sharding still on the ethereum road map like are we still going to see fee reductions for the base ethereum chain that might be two questions not just one and then I've got some follow-ups again fee reduction is hard because the function of supply and demand so I I I think the think of is just like can we increase the supply

of block space at like a given level of security like obviously there's a bunch of ways you can increase the block space and make the chain less secure we don't want to do that um so like yeah can we increase the block space significantly on L1 um what like reducing security and the main blocker to doing that today is there's a lot of ways you can basically there's a lot of ways you can deal with the history of the state you can deal with like all these these like tempor temporary data for rollups but the biggest part of it eum that we sort of can't reduce down is what we call the state size so States on ethereum is everybody's balances all the contracts all their all their code all their storage so you know think like I own some eth so there's somewhere in

ethereum state that says you know my address has this amount of eth and I have an ens so there's like an ens contract somewhere that says you know tim. eth owns this address and there's a function by which I can buy and sell this token um so all those things this is not even like the historical balance it's just like the current view right now we need to nort distor this this is what we're sort of bound by like why couldn't we just have 10 times more transactions on ethereum is the amount of new addresses the amount of new contracts would just grow uh super quickly and then it would be really hard to run a note so so the way we we think you know this can be approach is uh this idea of like stateless ethereum um so today on ethereum when I send a

transaction all I send is like the exact changes I want to do on this State and the assumption is every note on the network has a local copy of that state and they're just going to update it against one way you could you could change things is if every node only stored a part of the state or even none of it at all and when I send you my transaction you have like the state rout so you know like the what everything sort of hashes up to and then I send you like the part of the state I want to touch and what I want to do on it um and this is something we'd like to do and we've been working on for a really long time the challenge with doing this today is that sending these parts of the state is really uh bandwidth heavy today so

the way the way ethereum stores the state is kind of like a Christmas tree so it's like this long and a narrow tree and if you want to send a proof you have to go from like the tip all the way to the bottom and you have to send this along with your transaction so this is just like not tractable today ethereum has this other Road mapap item which we call the Verge which is about changing how we store all of the state on ethereum so going from like a Christmas tree to something that's more like a bush which is like super wide very narrow um and then if I want to send you a proof I only need to send you like a shorter amount and we could gossip that um so this is actually the thing we'll be working on not in the next Fork but

the fork after that we've already started working on it but uh it's still going to take some time so we can probably do another quick Fork before this goes live but this is effectively you know I think the only way you can you can raise uh the amount of L1 box space without making any compromises is if you're able to provide proofs every time I transaction is generated and then if you want if you want people to actually be able to send and verify those groups you need you need them to be lightweight so so we have like this long road map of like okay we go from the Christmas tree to like the the the sort of bush and one of the things actually in this upgrade uh that enables that is deactivating the self-destruct op code so on ethereum uh we have this

up code called self-destruct which basically deletes a contract and in our Christmas tree model if not the end of the world you just like find the place in the Christmas tree and you you sort of cut off that Branch uh but when we're going to move to this like Bush model if you wanted to Del a contract because it's spread out across the entire Bush you'd have to search the whole thing and that's just not doable uh in like a 12C block so in this upgrade the one US activating tomorrow we're deactivating the sof code which allows us to transition from One Tree to another in a couple upgrades and then once we have this transition we're able to start building nodes which don't require a full copy of the state and once we have that up and running then you can raise the the gas limit much more because

you're you're sort of uh not relying on everybody having a copy um it's a long way of saying like yes we care about L1 U but it's like a complicated problem and in the meantime if there's stuff we can do to help L2 scaling then that feels like like a no-brainer to do hey Tim you know I think I I've read the is it 18 days is that how along the the blobs are stored Y and and why why did you choose that number like I I think maybe there's something um so the the main reason or the main constraint on that number sorry is the rollup exit window uh for optimistic rollups so if you deposit money in an optimistic rollup they credit it to you immediately but if you

withdraw your money the way an optimistic rup works is they post your withdrawal back to L1 and they tell people you have seven days to dispute this and because they've posted all the data of all the transactions back on L1 if like I thought you had like a fraudulent transaction I'm able to go to L1 look at all this data be like oh no actually this withdrawal is invalid because look at this transaction they made this thing that was illegal and so I can like dispute that and block your withdrawal so rollups already have this assumption that if you've made your if you've made your withdrawal on L1 you've waited seven days you're sort of good to go um and that's how the L work today Zer rups don't exactly have the same process it's more a matter of like a

couple hours than a couple days um but there's still this this idea that like you want to you want to verify the data that's been posted to L1 and you want to be able to retrieve that data on L1 so 18 days is effectively you know like 23x the like s day window so it's like a comfortable buffer around that um and also because this is like a new upgrade um if something went like really really wrong in the entire history of ethereum like there's probably not anything we haven't fixed in like two weeks um so like imagine something's goes ter wrong and we needed the first bit of data before we had like a fix out or something um it would give us enough time to do that um but the the real Bing constraint is just that revased

window and and you know Margo obviously writes all the time about the race between all the l2s and and there's the competing Technologies of optimistic versus ZK I'm curious you know in your opinion is this like a technology neutral upgrade or is this favor one or the other technology I'd say it's pretty neutral um yeah like there's there's probably a bunch of ways you can nit pick on both sides um but yeah in general it's like both both rollups can use the blobs you know there's no like it's not like impossible for ZK rollups to use the blobs or optimistic to use the blobs like they can all use them um there's a bunch of work that you know they had to do to

like support them on both sides um yeah so I yeah I don't think it signicantly favors one over the other and this update Falls in line with fic's rollup Centric road map the idea like you were talking about before of kind of fixing ethereum's capacity problems not by necessarily reducing fees for transactions in the base chain but now at least in the short term reducing fees for using these Layer Two rollups that which are really the main platforms that people are using to transact on ethereum today but there's like a couple of issues with that that I wonder like if you you can talk to us about uh that that members of the community have raised so like I I mean there there's several things first there there's fears that just these rollups might lead to fragmentation of the ethereum ecosystem

of of liquidity of developers and so on to all these other disperate networks and then there's also kind of the the fear here that ethereum by shifting to these rollups is kind of increasing the community's appetite um and and comfort with chains that don't hold the same sort of security decentralization principles at least at this current moment as as ethereum does they don't have the same security apparatus using them is not the same as using ethereum which is you know very secure really robust and also has this decentralized network but also has all the constraints with fees and so on that that come with something like that so there's a fear that by allowing people to move to these l2s or pushing them to the l2s you're kind of making people more comfortable

with a very anti- sort of ethereum vision so I I that's kind of two questions again but I wonder you know how are you thinking about those those sorts of issues with the rooll of centric road map maybe to starts with like the developer fragmentation and whatnot like I think this is like much more featured in a bug so like different people being able to deploy different types of rollups and experiment with that is hugely valuable if you were bottleneck on like ethereum L1 core devs for every like Innovation and in just like transaction computations um like it take forever and I mean like look we're shipping sort of uh the first part of of sharding right now if we had to ship a rollup as well like we wouldn't have

neither an optimistic nor a ZK rollup live in production and now there's like many of of both um so I think this is like actually like that was actually a great decision in hindsight of like letting the market come up with all these Solutions and seeing look if people if people prefer to use optimistic rollups because they can copy and paste their contracts from L1 than braids if people prefer to use ZK rollups with different VMS because they're able to use like a a native VM that doesn't have the same constraints as the evm does because it's operating in a different environment and they can do way more performance stuff like d dydx was probably the first like you know real good example of this um that that's amazing as well and like the fact that we have both today is something I'm

I'm person I'm stoked about this like um I would not want like the decision like do we do optimistic or ZK rollups to have to like come through all four devs and be debated for years it's like no just start using ZK roll up and they'll see if people use it um and I think you know I feel similarly in terms of like liquidity like but you know if people want to use a big rollup like there'll be Network effects there um if if like moving liquidity from one rollup to another is like a big enough problem then people will provide a service for that um so I I I lose like absolutely zero sleep over any of this um I don't think like it's ethereum's role to dictate how like the whole Market structure should evolve um and I'm glad there's just more options for users I

think in terms of the security uh assumptions like that is valid like brups today are definitely not as secure as ethereum L1 for a bunch of reasons um and that said you know they are moving towards that and I think you know teams like L2 beats for example do a great job of documenting exactly what is like the state of things and and like what is like how did they fall relative to each other but also like how do they actually Implement things um you know in detail and so I think yeah it's it does follow on us as a community to like educate people around that but the the flip side though is we can't prevent people from like going to other chains where it's

cheaper right like you know ethereum like look we have an L1 it has these properties around security and this limited amount of block space people bid to to compete for this block space um clearly like the price of that is higher than a less secure chain for a bunch of reasons um I think what we can do though is say like okay we have an idea for a construction that can be secure with rollups um theoretically it's sound but then there's always all these like implementation details that get there fully um and be like open about like look there is this thing there that has these properties it's cheaper but like you know you're making these tradeoffs and ideally comparing them all against the other and and allowing users to make a decision I I think that's like the

best we can do there's not a world where like ethereum can say like don't use cheap chains right like people will we can at least trying to find a way to get cheap secure chains over to medium term fascinating Tim thank you so much uh all right we're going to take a quick break and uh and we'll be right back calling all developers score a consensus 2024 developer pass for just $19 but Act Fast only a limited number of these passes are available you may have heard that consensus ain't for devs but here's why you're wrong consensus is the only place you can fully immerse yourself in a multi-chain environment and learn directly from 20 plus chains including arbitrum chain link salana and

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consensus. coindesk.com now to secure your developer pass before they're gone explore the epicenter of blockchain Innovation at consensus 2024 and we're back with uh Tim boo of ethereum foundation um Tim this is a great great conversation thank you so much uh okay you know I I just say that sometimes I say that you know Bitcoin in you know it's 15 years of existence 2009 did I do that math right uh is um you know has already earned a chapter in monetary

history I think you could say the same thing about ethereum you know I mean just incredibly successful incredibly influential and you know it's fascinating to see it all how it's all coordinated it's all you know so these cord Dev calls are all so Global you know people have talked about how ethereum is the coordination and the attempt decentralized more has maybe slowed down the pace of some of these Innovations we're already seeing some of these you know the the problems with the congestion on ethereum and the fees and we've had all these you know alternative data availability solutions that have come around and are now basically offering to maybe I guess kind of compete with ethereum's da but I'm just

curious if you have any thoughts on kind of those bigger tradeoffs and what you know what that says about ethereum's current state of development or adolescence or adulthood or you know toddle or you know where is where is ethereum and it's in its growth yeah no that's a great question and maybe like the first thing I'll say is we absolutely take a sort of efficiency hit in order to maintain a more open and like permissionless system right like there's no way like ethereum you shouldn't think of it as like a company or something like that like obviously if it was just you know 20 of us and you get to choose everything and when

there's a disagreement you get to say like no the CEO chose X and we're doing X um yeah we chip way faster but we chip like much lower quality stuff and I think this is the thing that that is kind of wild about ethereum is it's this open protocol um to a degree you know that like not a lot of of chains have where the ethereum specification is not even like production software it's basically just more like an instruction manual right like we agree first and foremost like what are the rules of this thing and then we have these 10 different teams that go and they each Implement their version that takes a lot of time right but the flip side is you get all of these smart people across

these 10 teams who are like extremely opinionated who you know have like different perspectives and whatnot to like argue with each other to get to the best result and there's just no world in which like one you could get those 10 teams to work together on the same code base like you know smart people just disagree on too many things to like all work together smoothly forever and then two it's also something where like you know we can't really gatekeep if you want to come tomorrow and start building an ethereum client like it's permissionless you just go you write the code and over time you get people to use it and you know it is like an extremely valuable property where it's not like say compared to something like like I

don't know like phone manufacturing or like or or Hardware manufacturing um you don't have like this lock in where it's like okay you have to like be like an Apple device and like there's no way I could go and make like a tweak to a Macbook or something like that right so yeah this does come out the cost it comes at the cost of like you have to like make space for this debates to happen you have more open debates and there's also less of a of a forcing function of like making the decision right like I don't get to choose what goes the hard Forks right I get to like run the call where people over time you know come to consensus on it but if I show up tomorrow and I'm like you know guys like we've been talking about this too long we're just going to do X Y and

Z like these people don't have to listen to me they don't have to like you know another boss or anything like that I I think we've gotten better at like the processes of thing so like you know running our open process in like a more efficient way um and I'll say one like big big accelerant there has been just uh investing in better testing and like infrastructure that all the different teams can come and use I think this is something in the past like three four years since working on the merge where like the EF and other orgs have just like double down on like can we build really good like basic infrastructure so that when we agree to do something we can actually like ship it really quickly

and not spend all our Cycles you know like trying to figure out how it's all going to work together but yeah I I don't know where that puts us in in like a stage of development I think everybody involved values the openness of the process you know over time we get better as like executing and and just like working together with more and more people too like I think this is the other big difference where today there's about 10 core client teams and before it emerg you know there were also there's maybe eight but they were separated in like four and four we didn't really have to work together so the merge we sort of went from 4 to 8 having to work together and then we're we're basically up to 10 now and now we also have these teams like in this last upgrade uh folks from

coinbase folks from unisoft folks from optimism all like contributed um like serious engineering resources to make this happen so um yeah I one thing I'm super excited about is just it feels like we're able to do this fairly efficiently at scale in the open that's pretty unique I wanted to ask because um Brad briefly mentioned about data availability Solutions and you know the core of this up grade is about the data that on ethereum and that it's gotten more expensive um and as a result of that like these da Solutions like celesa like Igan da like Avil have sort of come to life to sort of solve that problem for now um but I'm wondering like in terms of you know longer term like where

does that sort of fit into the like bigger um ethereum like road map or ecosystem as like this is trying to solve that data problem but data is still probably more expensive on ethereum but at the same time as well I've heard from these L2 teams that like the best data is the L1 data how do you sort of evaluate those trade-offs between these da Solutions and L1 data yeah I'd say that probably the main thing you can think about if you're not like a networking expert which I'm not it's just which validator set is securing you know your data and therefore like which trust assumptions are you are relying on so if you use ethereum then it's like the entire eum validator set is the thing that secures

the blobs right whereas other other da providers have different validator sets but so like that's like the main tradeoff and you can think of this almost as like using like a different L1 from ethereum right like if you use another L1 with a different validator set that you're relying on that validator set for the security of your your assets um and you know like different validator sets have different properties so I think ethereum optimizes for like a highly secure validator set you know through like a high just like Economic Security level uh through like a decentralized validator set and all of that um and different projects can make different trade-offs there I think the other aspect of like you know different da Solutions is you can obviously compete on like the technical um design

that you choose um but I think you know to be fair um other other teams might ship you know other Innovations quicker in ethereum that are like a net Improvement but ethereum can also you know use use those things and integrate them over over time if we think that they're like safe and secure enough um so this is probably the other trade-off that's just like harder for an average user to see is just you know what is the actual technical implementation is it like a genuine Improvement or is it just like making a compromise somewhere down the stock um and I think on ethereum's uh in ethereum's case this is just not something we're willing to do so we try to wait longer and it's taking longer to ship and potentially being more expensive in the meantime uh but

shipping something that we know uh you know we're highly confident in when it when it feels life you mentioned this in in in your last response in the last question about like having the research and like the engineering resources from like a base and an arbitrum and optimism sort of contribute to 4844 and you know as ethereum sort of becomes not just like the core devs or like the core L1 protocol but sort of becomes this like whole other industry of rollups and da Solutions and like all reaking you know you you're at the EF and that's that's sort of at the core of of coordinating what's happening on ethereum how do you sort of see your role and how does the EF sort of play a role in coordinating with these other teams like like you said like arbit like representatives

from arbitr and base have like come on to join that like a call about 4844 but I imagine like there's going to be so many more upgrades that affect not only like the L1 but also all these other mini ecosystems what is the EF thinking about in terms of like getting everyone on the same page as this umbrella and this big tent gets like becomes an even bigger big tent yeah that's a good question I think there's like probably three ways you can break this down uh first is like coordinating the L2 ecosystems or the restated ecosystem like I don't think the EF should be doing that at all right like you know arbitrum can coordinate its ecosystem ier can coordinate its ecosystem like we don't you know have or necessarily want to have any say in that like I think again again it's just great to have like

different ecosystem behave differently and adopt different things so um that's all up to them I think the second part though is like how do you bring in their voices when stuff affects them um so I think you know if we are doing something that's going to affect uh l2s that's going to affect uh restating that's going to affect you know even just like smart contracts in general but for example if uh I mentioned we're removing self-destruct in this in this Fork um when we did this you know me and others at the EF spent time like one we just hired Auditors to tell us which contracts would potentially break and you know find out if any and then reach out to them but then we're okay are the l2s use self-destruct in a way that's

like weird and different from l1's like can we get them to actually sanity check this or like other other like big contracts and I think like yeah it because you know we end up coordinating a lot of this stuff like like how we coordinate across like all the rollups or all stuff like that I think this has been like one of the hardest questions because we definitely don't want the EF to be a bottleneck to that and it's like finding the sweet spot between like can you can you help and like help them all like talk to each other but not have them depend on you uh or like you know ask for your permission or something like that so we've we've launched an initiative to to to try that it's called rad call where we we try and discuss

like potential standardization stuff for l2s um and I'd say it's been you know it's it's been it's been all right so far um a couple things we've had is like l2s use different pre-compiled which are like special contracts on on ethereum there's like a range of addresses for these contracts we we used about like 10 of them give or so we agreed you know based on these discussions all the l2s they want to do a bunch of more special contracts so we agreed okay we're going to give them like half the space like okay we have a thousand a thousand addresses reserved and you can know that like from 500 to a thousand L1 is never going to deploy anything there um so I think that's like a small example of like you know it's not like a huge amount of of change but by L1 teams

saying like know this space is yours it it sort of creates more certainty for them l2s to go and debate okay what do we actually want to do in those 500 addresses L1 doesn't have to have an opinion about that you know you could sort of do whatever you like um but like at least you know okay this is like the sort of sandbox where like um you can go and run these experiments so I think for things like that like it makes sense for for you know the EF and for like just L1 coordination to sort of extend there but I would never want to see it go to a level where it's like okay you you have these 500 addresses and we think you should do you know X Y and Z and you know those are the good ones and you know these other ones are bad ones like

l2s should should be able to to govern that as we're starting to kind of wrap up here I wonder if we can kind of look past um Denon towards the next step on ethereum's road map um the next set of updates Prague and Electra can you tell us briefly like what is going to be in those packages um and what should we look forward to over the next year or two of ethereum's development yeah so prag prag and Electra um is is going to be a relatively small upgrade so since the merge we've sort of gotten this pattern of doing like one really big fork and then a smaller one and then this is the bigger one coming up and then prag will be a smaller one and the reason for that is it allows us to work on like two forks in parallel so I mentioned all the

stuff earlier around veral trees and that transition we are working on that but it's going to take you know more than a year so in the meantime we have bandwidths to like work on other small small winds and similarly on the consensus layer uh they want to keep scaling ethereum providing more more blob space basically and there's a bunch of work on that but it's also going to take a while so the idea with pectra is to try to find AR like a bunch of small winds that we can get relatively quickly while we we sort of prototype the larger stuff um so far we have things like triggering uh triggering validator withdrawals from Smart contracts which is like a very nice thing um that you can't do today adding the BLS pre compil which is the curve that's used on the

beacon chain that you can't verify natively on L1 today um and or and removing uh the deposit window so when you when you make a deposit for a new validator you have to wait 2,000 blocks for it to be activated this was in the proof of work base H because you know we didn't want to have reorgs past that point obviously since the merge we we don't need that anymore the validators know every block sort of what's up on the on the execution chain as so we're going to remove that in the next Fork um so you can think of it as like just all these sort of small but valuable things and there's a big conversation around wallets and EAS and account abstraction as well so we might see a fork uh or sorry we might see an EIP in that fork that that addresses that somehow um so

you can think of it like yeah a bunch of small nice things coming in Petra hopefully sometime this year um early next year something like that and then in parallel a lot of work done on like these larger initiatives um on the execution and consensus s yeah I mean one of the great you said we're going into the weeds I think uh one of the great things is is having somebody who really knows it explain it because you you uh explain it in very simple terms which is very much appreciated uh and okay just one last one here um you know I was talking with our editor and chief Uh Kevin Reynolds just a little bit ago and we were talking about the number of layer twos and I just just pulled up the website

l2b which I'm sure you check occasionally maybe you do um and they list 45 active layer twos 34 upcoming projects and then they've they've now have a layer three three projects they got four active but you know I'm just curious extrapolating out I mean we included something in the protocol newsletter that you know one person was predicting 10,000 or twos by the end of this year but I'm just curious you know as this goes through you know what sort of You Know What's It Gonna unleash in in your view yeah it's it's it's really hard to

predict the future of the space so I try to avoid it if I can um I think the tradeoffs for like the number of layer twos is do you care more about like liquidity and network effects or do you care more about um prioritized execution and what I mean by that is if you have like a specific app that everybody needs to like touch at the same time um and it's really important that like you touch it all the time like you like gaming is ugd example that people come up with this right like you need to always be like touching that contract over and over it kind of makes sense to have like your your own chain because you don't want like other transactions to like uh slow down the rate at which you can you can post your updates

whereas if you have something that's like super super interconnected right like defi is a great example of that where I want to like you know put some collateral borrow against it take my Bor collateral put it in some other protocol then you care more about like the network effect and like getting say those three transactions done in one block so I wouldn't be surprised that we see something like kind of two types of layer twos one is like just like effectively similar to L1 where you have you know like a big interconnected ecosystem and then you see like way more specialized chains where people want to go there they want to do like this one thing super efficiently super specialized um and maybe it's not just one right maybe it's a handful but they

they have like a more narrow use case and then they optimize everything around that and then once you're done with that use case you know you can Bridge back out from like that specialized L2 to like a more generalized one so um medium confidence in this again predicting the future is hard um but I think it it will be possible to have like many many different types of l2s I mean it's already the case today and with the blobs as well I I no there's a bunch of people already working on like um sharing blob services so when you when you set a transaction with a blob you need to you need to fill up the full blob but then if you have a bunch of small LTS maybe they don't so people are working on like a service with just say okay you use 10% of The

Blob you use 20% and then you know we can put like five different l2s in a single blob um so I'm sure all of that will will emerge and we'll see about tomorrow to I I want to ask like 10 questions about what you just said but uh I think we got to wrap it and I know you've got a busy uh you're quite busy yourself so uh Margo thank you for leading this uh fascinating discussion Tim thank you so much