In the ongoing ETHTAIPEI event, Ethereum founder Vitalik participated in a media interview. Overall, compared to the market sentiment of “Ethereum is not doing well,” Vitalik remains hopeful about Ethereum. He discussed the current issues with Ethereum and also mentioned potential solutions, such as the “Rainbow Stake” concept for solving the high proportion of LIDO-like issues. 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 modular blockchain solutions, there are doubts in the market about whether Ethereum can maintain its position as the top global public chain. Although Vitalik did not give a direct answer, from his words, it is clear that the market needs to give Ethereum time, and only time will tell.
Below are the highlights from the interview with Vitalik on Ethereum, as compiled by BlockBeats.
Q: What is the significance of the upgrade to Ethereum’s ecosystem?
Vitalik: The purpose of the upgrade is to significantly improve scalability and reduce transaction fees for Layer 2 solutions, especially Rollups. This is achieved by creating a blob within each block that is not accessible by the EVM. In the past week or two, we have seen a significant decrease in Layer 2 fees, reducing them by about 50% in some cases. However, it is important to note that these fees may increase again as the number of blob users increases. We expect the number of blobs supported by the Ethereum chain to continue to increase significantly in the coming years.
Q: Is it better than you expected?
Vitalik: It depends on what you mean by “better.” From a technical perspective, the upgrade has been going very smoothly, with only a decrease from 99% to 95% in the number of validators, which is better than any previous forks we have done. Currently, the usage is surprisingly low, with an average of only one blob per block, even though the target is around three blobs per block. This means that blobs are currently very cheap. If you want to publish a blob, you basically just need to pay the Ethereum transaction fee. The high transaction fees may be one of the reasons for the low usage. If the price of blobs tends towards zero, they can be used to back up encrypted copies of your hard drive or similar things. They are very cheap for Rollups at the moment. I expect the usage to increase in the coming months.
Q: What do you foresee as the most impactful thing in the next five years for Ethereum?
Vitalik: Yes, I think the next five years will be critical for Ethereum, as many previously theoretical and small-scale applications are now preparing to enter the real world. One significant impact of the blockchain field is that the ideas generated in this field have permeated the wider world in many underappreciated ways. For example, Reddit is soon going public, and one thing they are doing is giving active contributors, moderators, and institutional investors the same participation rights.
Apart from that, the most significant practical impact is stablecoins, where people use stablecoins for savings and transactions. There has historically been a lack of low-cost stablecoin solutions on Ethereum, but in the next five years, Ethereum can provide that. We have seen the emergence of Layer 2 solutions like Base, and they are getting closer and improving. In the future, Ethereum can help stablecoins become more accessible, open, decentralized, and not reliant on vulnerable third parties.
Additionally, 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 the success of Lens and other projects in creating alternative social media platforms. The special advantage that decentralization brings to these projects is that 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, and the technology is improving rapidly. I really hope to see some mainstream usage soon. One major challenge many people are 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. When people need to solve this problem, they tend to turn to centralized solutions, which is very bad. I hope the Ethereum space can propose some decentralized alternatives and make them easily accessible.
Q: How do you view the challenges in Ethereum’s POS and how do SSF (single slot finality) and other upgrades address these challenges?
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 validators themselves. The challenge with MEV is that the censorship risk is growing, and relayers are emerging as another form of centralization. Execution receipts and inclusion lists can mitigate these risks. The thinking behind inclusion lists is basically going back to Ethereum in 2016, where decentralized validators are responsible for creating blocks. However, in this case, the “block” we are talking about is just a transaction list, and what transactions are included is the most important thing from a fairness and censorship resistance perspective.
The other part is related to staking itself. I recently conducted a series of polls on Farcaster, asking why people don’t stake. The most common answer was that they don’t have 32 ETH, and the second reason 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 to address this. In the future, as a node, you won’t need to store the state locally or store most of the history locally, so the amount of data required to become a node will decrease from multiple TBs to a node that can run in RAM. Once we have this, resyncing and syncing will become faster, possibly 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 some new POS methods that involve 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 ordering, so what problems should Layer 1 handle, and what should be left to others?
Vitalik: Modularization 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 ordering, which is a vision. If you look at the work of Layer 1 today, Layer 1 is responsible for shared security, which is a shared settlement layer. With Ethereum, each Layer 2 has the ability to read any other Layer 2 without relying on any centralized role. Ethereum provides data availability for Rollups, but it does not provide data availability for validium. The ordering and selection of transactions are currently determined by each Rollup. Personally, I have a neutral position on the issue of shared ordering. I know some people support it, while others think shared ordering is overestimated, and they 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 sufficient market depth to handle your own transactions. They also believe that cross-Layer 2 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 truly expand the amount of data that Layer 2 or Ethereum can directly support. In an ideal world, everything would be on Rollup, and Ethereum would not handle data availability for everything. I hope to see highly secure things being on-chain through Rollup.
Another major 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 the key and add a new key, where does that state live? If you have accounts in 100 places, do you have to send the same data 100 times to upgrade and update your accounts? One approach is to have a minimal critical storage Rollup where that state lives in a specific place, possibly a very neutral Rollup, and all other Layer 2s can call it to prove what the current state is for the transactions they are accessing. But these are early-stage ideas.
How does ZK solve the trust issue for non-technical individuals? How do they know that ZK actually achieves privacy? If you have a system that theoretically provides a certain level of privacy, how does a user know that they are actually getting that level of privacy?
Vitalik: I see this question as an extension of an existing problem in Ethereum, which is if you put your assets into a smart contract instead of just giving your assets to someone, how do you know that your smart contract doesn’t have a backdoor that allows someone to take it or take your funds at any time? We now have the ability to publish source code through Etherscan, and people can check the source code. This is a good tool for developers and savvy users. However, for regular users, they can’t read a thousand lines of code themselves.
We see wallets becoming more complex and giving more warnings, telling you whether you are interacting with an application or an application that you haven’t interacted with before. What I ultimately want to see is versioned DApp interfaces. 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 make the authorization for that transaction controlled only by the team, so no server can be hacked to force an update. Also, the opinions of high-quality researchers and audits need to be aggregated, and wallets play a crucial role here as an important active assistant to help users aggregate all this information. The tools used on Ethereum should be used on ZK, such as publishing Cairo code on something like Etherscan and verifying it. 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 this question has been asked for the past 10 years. I think it is a valid question because at a very high level, AI tends to be centralized, and cryptocurrencies tend to be decentralized, so there should be some complementary aspects between the two. But the question is, can we actually find useful applications? In an article I wrote about two months ago, I tried to analyze this question and identify some specific applications that make sense. So I mentioned that first, AI can participate in prediction markets or other types of markets. The second is AI as part of a wallet to help users understand the online and on-chain environments 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 applicable to other fields if successful. Among these, I think the first two are short-term applications that we can see, while the latter two are more speculative.
Another area is the role of AI in debugging code. One of the biggest challenges in this field is bugs in the code. If we can do that, then we might eventually have a bug-free ZK-EVM. The more bugs we can reduce, the more secure this space becomes.
Are you more active on Farcaster than on Twitter?
Vitalik: Farcaster is interesting, and the quality of discussions there is higher. I’m also looking forward to seeing alternative clients for Farcaster. It’s not a server; it’s a chain. You can create your own client, and your client can read or write the same content. So people using Warpcast can see it. Another thing I’m pleased about is that Farcaster is easy enough to use for people outside the crypto community, which many other applications have not achieved.
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