Once all the upgrades are completed, throughput of 100,000 TPS may be possible on the network.
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The Ethereum “Merge” which led to the transition of their consensus mechanism from “proof-of-work” (PoW) to “proof-of-stake” (PoS) was completed successfully last month and was touted as one of the biggest advancements for the blockchain community. According to the roadmap, there will be many more upgrades to the network: the surge, the verge, the purge, and a splurge. In the coming weeks, we plan to cover the intricacies behind their planned upgrades, starting with “Surge” today.
In December 2021, Vitalik, the founder of Ethereum tweeted about Ethereum 2.0 roadmap and the developers are making solid progress on it ever since. This roadmap has five main upgrades. With the merge completed successfully, we are already seeing marginal improvements in transaction speed as well as reduction in the token supply and gas fees.
<source: Vitalik Buterin>
What is Surge?
This is the upgrade that will exponentially increase the scaling capability of Ethereum network using Layer 2 rollups. Solutions such as Optimism, Arbitrum, Immutable X and many more do all of their computations and storage off-chain, while posting data back to Ethereum. The scalability of these rollups is achieved through sharding.
Although the term “Sharding” may sound new to few, this has been in existence in database products from early 1980s and is the abbreviation for “System for Highly Available Replicated Data”. From a technical perspective, the Ethereum network achieves around 13 transactions per second. Once all the upgrades are completed, throughput of 100,000 TPS may be possible on the network. This is a monumental change and is also expected to lower gas fees by greater extent.
How does Sharding work?
It is the process of splitting the blockchain into smaller pieces in an algorithmic way to manage them more efficiently, with many pieces overlapping. It is done in a way that will allow someone to verify their own shard and know that they can still trust the rest of the blockchain. The original plan was to do sharding on the entire blockchain, including the EVM, accounts, smart contracts and the data. Now they have decided to only shard the data, therefore rollups will be able to increase scale, as the team believes this the best way to get more and more computations done off the main chain. This is done by breaking up the data that is being processed by the Ethereum mainnet into 64 smaller segments.
The steps we see in the timeline of surge below can be summed up to slowly increasing sharding. At first the blockchain will be shared and people will still need to verify the entire chain, which is to ensure that the algorithm is working correctly before going to where we cannot return. The last step here is called DAS or data available sampling, which will allow all clients to easily verify that all data is real without having to download the entire blockchain. This can go a long way to achieve maximum scalability with maximum security and gives us balance on the scalability trilemma triangle.
When will it happen?
While the Merge transitioned the blockchain to the eco-friendly PoS consensus mechanism, Ethereum’s transformation is only 55% done, according to co-founder Vitalik Buterin. “Unlike what many understand, the Merge is just one of five key stages of evolution that the Ethereum protocol is billed to undergo in order to be tagged as a fully efficient proof-of-stake protocol,” Eitan Lavi, cofounder of permissionless crypto bridge ChainPort, told BeInCrypto.
The Surge upgrade is expected to happen in 2023 after the Shanghai upgrade, which would enable Beacon Chain withdrawals, EVM object format and Layer 2 fee reductions. According to the Ethereum Foundation, “sharding” will boost network capacity, cut costs and improve transaction speeds. Experts are touting that this upgrade may get delayed, just as we have seen with the “merge”.
A unified settlement and data availability layer unlocks exciting capabilities for rollups utilizing validity proofs. These benefits allow for lower latency, higher bandwidth for validators (and thus a higher EVM gas limit). The main goal of Ethereum’s roadmap is to minimize trust assumptions and provide in-protocol scalability through implementing native solutions. The base layer of Ethereum is host to an entire ecosystem of decentralized applications promising a fundamental shift in the digital ecosystem and these upgrades are expected to be vital in shaping the web3 future on a global scale.
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