M3TA 101 - Episode 7: Ethereum, eh?
You've heard 'The Merge', 'Liquid Staking', 'zkEVM'. Now you hear 'Restaking', 'Distributed Validator Technology', 'Shared Sequencing' and 'Multichain'. What is all of this about?
Ethereum, a pioneer in decentralized applications and smart contracts, is undergoing significant changes, starting from the transition to proof of stake (PoS) consensus mechanism, known as ‘The Merge.’ After The Merge, it was the enabled withdrawals for ETH stakers called ‘Shapella.’
Since then, quite a few initiatives have pleaded their case strong enough to surface to the crypto enthusiast community. Most of these key advancements will be explored in this article, including Liquid Staking, Restaking, Distributed Validator Technology, zkEVM, Shared Sequencing, and Multichain.
Note: We’re a platform partner of Korea Blockchain Week 2023. These articles are both available on their platform and ours. Check them out!
Liquid Staking & Restaking
When we mention about Liquid Staking and Restaking, we talk about Double Rewards and Enhanced Security. Liquid Staking, pioneered by Lido, allows users to trade or use their stake as collateral in DeFi. Restaking, introduced by Eigen Layer, allows ETH stakers to reinvest or "restake" their native ETH or LST ETH using a separate smart contract, providing extra security to new applications or middleware in the Eigen Layer ecosystem.
Interested in a more thorough exploration of these concepts? Visit our Substack article for an in-depth analysis!
Distributed Validator Technology (DVT)
Moving on to the next development, let's talk about Distributed Validator Technology (DVT). Just as knights need their shining armor, Ethereum's validators, who are tasked with safeguarding the network from malicious actors, also require the highest level of protection. That’s where DVT comes in.
Instead of each validator being tasked with managing 1 validator key in full, DVT can limit the risk associated with keys lost or compromised by distributing the duties of managing keys and signing across a cluster of node operators. DVT reduces stake concentration by boosting returns for individual and small group stakers and strengthens the overall resilience of Ethereum.
Want to learn more about this concept? Explore our in-depth article on KBW Blog!
ZK-EVM
As we delve into the world of Layer 2, it's impossible not to mention ZK technology. Zero-Knowledge (ZK) technology is a game-changer for Layer 2 blockchain development, offering scalability through ZK Rollups, secure cross-chain transactions for improved interoperability, and optimized smart contract execution for minimal fees. And let's not overlook the significance of those 'minimal fees' – a direct benefit that end users will surely appreciate.
The way zkEVM works is it replicates the Ethereum environment using ZK-rollups, taking the initial state, processing transactions offline, and generating an updated state along with a ZKP.
Discover more about these fascinating concepts in our detailed article on Substack!
Shared Sequencing
Around May of this year, when rollup Layer 2 platforms were garnering significant attention, the concept of Shared Sequencing emerged as a noteworthy solution. By creating a collection of sequencers not tied to any specific rollup, Shared Sequencing addresses centralization concerns in rollup implementations. This decentralized approach fosters fair competition, encourages interoperability between rollups, and strengthens resistance against harmful practices.
For a deeper dive into these concepts, check out our comprehensive article on KBW Blog!
Multichain
Last but not least, we talk about the future of chains: Multichain (even Vitalik digs it!). The Multichain concept enables users to transfer funds seamlessly across various independent chains, ensuring enhanced security during the fund transfer process. By creating these chains within a mainnet, Multichain ensures that users can retain ownership and control over their funds, minimizing the risk of financial loss.
For a more comprehensive understanding of this concept, don't miss our article on Substack!
Conclusion
In conclusion, the developments surrounding Ethereum, including Liquid Staking, Restaking, Distributed Validator Technology, zkEVM, Shared Sequencing, and Multichain, are all contributing to a more secure, scalable, and decentralized blockchain ecosystem. As the EIP-4844 upgrade approaches, we can expect more developments to be made known in the future.
Disclaimer
These articles are provided by M3TA for FactBlock as a content partner on KBW 2023.
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