6 Blockchain Takeaways from Ethereal Virtual Summit 2020
“Ethereum is probably the only thing that transcends language, that transcends gender, that transcends religion, that transcends location. It’s a common language that people have gathered around. I don’t think there can be many of those—potentially only one.”Collin Myers, Global Product Strategy, ConsenSys Codefi
Over the past two days, 200+ developers, entrepreneurs, enterprise veterans, and leading industry minds came together from across the blockchain ecosystem for the first-ever Ethereal Virtual Summit. Their mission: to debate, collaborate, and educate the broader crypto community on the most important developments in the pipeline for 2020, and at every layer of the stack, from Eth2 staking to enterprise permissioning to DeFi applications. If there’s one overall takeaway, it’s that nothing—no plague, no outage, no laggy videostream—will stop the community in their effort to make blockchain mainstream. As Joe Lubin emphasized in his conversation with Mike Novogratz, the revolutionaries and the evolutionaries need to work together to “bring the wisdom down the mountain to the people.”
In coming days, we’ll release individual video recordings so you can catch any sessions you missed and also revisit your favorites. In the meantime, here are the top 6 takeaways from the two jam-packed days of interviews, panels, demos, and more.
1. The COVID-19 economic shocks are waking people up to the potential of digital assets.
“COVID is the brush fire that is making way for the green shoots to come up.”Angie Lau, Editor-in-Chief of Forkast.News
Many people, the crypto community especially, see the current global economic crisis as a wakeup call for system change, particularly around financial infrastructure. The idea of “digital scarcity” and ETH as “economic bandwidth” has been popping up in conversations with regard to the problems of money printing and the devaluation of the dollar. As Mike Novogratz explained, “COVID has unleashed a fiscal and monetary response like we’ve never seen before.” And not necessarily an effective one. For that reason, Central Bank Digital Currency (CBDC) has attracted attention in the banking sector as a compelling blockchain application for streamlining payment rails and increasing financial access for individual citizens. With the upcoming Bitcoin halving and Ethereum’s native scarcity mechanisms around ETH supply, many see our unique economic moment as a turning point for blockchain and digital assets to capture global attention.
2. Ethereum 2.0 Phase 0 is the most anticipated network development of 2020.
“We’re already at the point where Eth1 was a few months before launch.”Vitalik Buterin, Co-Founder of Ethereum
Phase 0, the first phase of Ethereum 2.0, is the Beacon Chain, the heart of the Eth2 system. Phase 1 is sharding, in which the Ethereum blockchain will be “split” into 64 different parallel chains. Joe Lubin emphasized that Ethereum 2.0 “will be really useful virtually immediately.” As Vitalik explained, “Eth2 will drop transaction costs by a factor of 100, allowing more operations to take place at lower cost.” Eth1 will eventually exist as its own shard on the Eth2 network.
In anticipation of Phase 0 and the economics of its new consensus mechanism, staking was also top of mind. Mara Schmiedt from ConsenSys Codefi and Carl Beekhuizen from The Ethereum Foundation introduced the Ethereum 2.0 Launchpad, the EF’s official way to deposit your ETH for Eth2. The Launchpad is currently in active development for testnet.
“This thing is complicated and incredible and exciting,” the EF’s Danny Ryan said, describing the complexity of the Eth2 system. “If you’re gonna do it, do it right.” The most important step now, besides testing, is educating users on the fundamentals, benefits, and risks of staking. The Codefi team recently published an Ethereum 2.0 Staking Ecosystem Report to explore the motivations and concerns of ETH holders who intend, or not, to stake.
3. Ethereum 1.0 has big scaling solutions in order.
“If you look at blockchain today, it’s like computers before Apple … With SKALE, we want blockchain to become mainstream.”Stan Kladko, CTO of SKALE Labs
The SKALE Network is an elastic blockchain network of sidechains that are compatible with the Ethereum mainnet and can run up to 2,000 transactions per second per chain. The team plans to launch the SKALE testnet this month and is preparing for mainnet in coming months. The SKALE Network is launching on the Codefi Activate platform, which uses a unique token mechanism called Proof of Use that is, as SKALE CEO Jack O’Holleran explained, “designed around network health, putting dapps first.” Even with Eth2 updates around the corner, scaling solutions like SKALE are a huge opportunity for Ethereum to meet network demand in the near-term.
4. “Enterprise Ethereum” is just Ethereum with the privacy and compliance add-ons that enterprises need.
“It’s the same technology. It’s how you deploy it that’s different.”Yorke Rhodes, Co-Founder of Blockchain at Microsoft
With some key advancements in privacy and permissioning over the past several years, more and more enterprises are moving toward the open source Ethereum blockchain for launching low-cost, highly programmable, extremely resilient IT. “Let’s think of it as IT,” John Wolpert mused. “Boring old corporate IT. Maybe boring is the new exciting.”
PegaSys, the protocol engineering team at ConsenSys, announced today that the PegaSys Ethereum suite—which includes Hyperledger Besu, PegaSys Plus, and PegaSys Orchestrate—will be available on the Microsoft Azure Marketplace. In addition, The Microsoft Blockchain Development Kit for Ethereum will now support Hyperledger Besu directly. These new offerings will help enterprise developers easily access the platforms and tooling they need to build private, permissioned Ethereum networks that are compatible with mainnet. Wolpert, who co-founded the Baseline Protocol initiative, put the advantages of the Ethereum mainnet in clear terms: if you’re an enterprise, you can “use the mainnet as a message bus to connect your system of record with other people’s systems of record.”
“In 2015,” Wolpert recalled, “we were incapable of saying the word ‘blockchain’ in corporate America.” Considering the number of blockchain-fluent enterprise titans at Ethereal Virtual Summit over the past two days, it’s clear that all that has changed.
5. Devs are unlocking economic models that get people hooked. Dapp users are running businesses straight out of their Ethereum wallets.
“With Ethereum, everyone can have their own mini, digital collectibles-based business. All they need is Internet and an Ethereum wallet.”Jeffrey Zirlin, Growth Lead at Axie Infinity
Blockchain games have become a powerful Web3 onramp for newcomers. As Peter Kieltyka of Horizon Games observed, “80% of our userbase are people who have never touched blockchain.” “Play-to-earn” games like SkyWeaver, in which users can create and trade digital collectibles, are especially popular. With robust scaling solutions like SKALE on the horizon, MetaMask mobile in the works, and the novel economics of Ethereum-based games, the dapp ecosystem is poised to take off this year.
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6. Security is top of mind for DeFi.
“I don’t think it’d be a bad idea to start coordinating community audits. We all have a stake in it.”Kyle Kistner, Co-Founder of bZx
Perhaps the overarching question for the DeFi track at Ethereal was Jordan Lyall’s question on Day 1 during the “Challenges of Operating and Growing a DeFi Platform” panel: “How do we encourage innovation and keep users safe?” The DeFi ecosystem reached its billion dollar milestone earlier this year but also faced a few attacks and anomalies with the global market shocks. Open source tools like DeFi Score have emerged to help users measure platform risk around factors like centralization and liquidity. The general consensus was that DeFi protocol teams need to conduct exhaustive user research and smart contract audits, especially as they see increased volume.
DeFi protocols are the most active Ethereum dapps for a reason. Spencer Noon of DTC Capital put it plainly: “Finance is the first best use case for Ethereum.” Decentralized finance platforms like Compound and Uniswap have awed many in their composability and commitment to full decentralization. Joe Lubin demystified the DeFi space on Day 1 for everyone: “‘Magical internet money legos’ is just a bunch of protocols for lending, trading, borrowing. It’s a brave new world and we’ll all be able to operate it ourselves.” Diligent security measures and increased education and transparency around platform risk should make that brave new world more navigable for newcomers.
Bonus: Deepfake might be the Internet’s next earthquake.
“It took UN intervention to take down deepfake video.”Kathryn Harrison, Founder of DeepTrust Alliance
Kathryn Harrison may have stolen the show when she shocked the audience with cheapfake and deepfake images that got her livestream pulled off YouTube (!), likely triggering Google’s content mods. The DeepTrust Alliance is a non-profit organization and global coalition of stakeholders that uses blockchain technology to combat disinformation and deepfakes. Kathryn’s jarring presentation was a powerful reminder that, as Argent’s Itamar Lesuisse eloquently captured earlier in the day, “Decentralization is not just philosophical. It’s about whether people will trust the platform.” And in the case of deepfakes, whether people will trust the content. Decentralized systems of verification can help expose the chilling cases of misinformation and malinformation that perhaps some Ethereal viewers were not tracking before Kathryn’s talk today.
And so the fight continues. Against COVID-19. Against fragile systems. Against centralization. Against misinformation. But yesterday and today have been hard proof that so many are dedicated to the fight, and as committed as ever. Thanks so much for tuning in and for all your hard work. Stay safe out there, and stay connected.