The Merge Is Done. What’s Next for the Ethereum Ecosystem?
Just after 3am in the morning on September 15th, 2022 the Ethereum community made history. After seven years of relentless work across this ecosystem, the Ethereum Merge was successfully completed. Ethereum is now using Proof of Stake and its implications for not only the blockchain, but the world are profound: the merge will reduce the worldwide electricity consumption by 0.2%. No other technology in history has reduced its energy usage to this extent. From darkness, to twilight, the new dawn of Ethereum starts today. We at ConsenSys will forever cherish this moment with gratitude and hope.
We are grateful to the core devs like Ben Edington, Mikhail Kalinin, Adrian Sutton, and others from the Ethereum Foundation and around the world who persistently saw the transition to Proof of Stake through. And while congratulations are in order, the Merge is also the beginning of a new phase of Ethereum’s development. In this blog we describe what’s next for Ethereum’s protocol development.
At EthCC in Paris this past July, Vitalik explained the next phases of making Ethereum more scalable, private, and secure — upgrades he’s calling the Surge, Verge, Purge, and Splurge. (Nice alliteration, Vitalik.) Below is a diagram of the Ethereum protocol development roadmap shared by Vitalik in this tweet that outlines each upgrade:
Each of these upgrades will not necessarily follow one after the other. They are fairly independent and are being worked on in parallel. The order of rollout of these upgrades has not yet been decided, but the work is happening simultaneously as you read this.
According to Vitalik, after these upgrades, Ethereum will be capable of processing “100k TPS”. He also said that each phase will be 55% done post-merge.
Let’s review each phase in detail to sustain today’s momentum.
TLDR: This just happened! Ethereum now confirms transactions with a Proof of Stake (PoS) consensus mechanism.
PoS reduces Ethereum’s energy consumption by ~99.98%, making the blockchain more sustainable as we move towards mass decentralization. This is important because as the network grows, it must be environmentally sustainable and now, it is.
The merge will also make Ethereum more scalable by introducing sharding for improved throughput.
The transition to PoS also improves security by allowing individual validators – anyone with an internet connection and an ETH balance – to stake from home and validate a portion of the network. This shift in approach makes ETH a more secure collateral foundation for individual and institutional users alike.
To keep learning about the implications of the Merge you can visit the ConsenSys Merge Knowledge Base.
TLDR: Post-merge Ethereum’s scalability will be greatly improved by sharding.
Now that Ethereum runs on a PoS consensus mechanism, builders will be able to start using a form of data partitioning to improve throughput, called sharding. Sharding is a horizontal scaling technique common among other major database providers.
Sharding involves splitting a blockchain into multiple pieces, or “shards,” and storing them in different places. Here is a visual example of sharding on the Beacon Chain:
By storing the data across different networks, the computational burden of Ethereum is reduced which improves latency and allows the network to process a larger volume of transactions, faster:
- Ethereum pre-merge: 15-40 transactions/sec
- Rollups: 1,500 – 4,000 transactions/sec
- Rollups with sharding – 100,000 transactions/sec
TLDR: Storage is optimized through Verkle Trees that can increase validators on the network.
What Vitalik was referring to with “The Verge” is that PoS transitions data storage systems from Merkle trees to Verkle trees. These are the database patterns that provide pathways to all the data on the Ethereum blockchain.
Verkle trees serve the same function as Merkle trees – store a large amount of data for someone else to verify who has the root of the tree. What makes Verkle trees special is that they are more efficient in proof size which in turn reduces node size. This reduction allows for stateless clients to finally be viable. Stateless client execution is a major upgrade to layer one blockchains like Ethereum and will provide the ability to validate execution blocks without having a full account state.
This will make validation more scalable, faster, easier to set up, and further decentralize the network, because more validators can join now that they will not have to store extensive amounts of data to participate.
TLDR: Excess historical data will be purged.
This reduces network congestion and hard drive space requirements for validators.
Similar to the verge, the purge cuts down the amount of space you have to have on your hard drive to participate in the network. This upgrade simplifies the Ethereum protocol over time by eliminating the need for nodes to store historical data and thus technical debt. Here is a visual example of this upgrade’s network process:
As you can see, not all nodes have to permanently store all of the historical blocks. Instead, clients will stop storing historical data that is more than one year old. This means that hardware requirements for nodes will decrease and the bandwidth of the network will reduce.
TLDR: With the transition to PoS successfully implemented, the bulk of the work is done.
Now there’s time to work on what Vitalik calls “the fun stuff.” This involves smaller updates and maintenance to ensure everything runs smoothly. These are miscellaneous upgrades that should simplify the use of Ethereum and make it more accessible to an average user.
As Ethereum’s transaction capabilities increase, so does its potential to be a major global settlement layer for finance and different types of information. By 2025, Ethereum will look more like a cluster of layer 2 blockchains, data availability protocols, and side-chains or other Layer 1 blockchains. However, execution, consensus, and data shards will still stay within the Ethereum mainnet.
All of the layer 2 options around it will create bridges and proofs to the mainnet execution layer. The purpose of having L2s is to link the security and certainty of mined TXs back into Ethereum mainnet. Meaning that Ethereum acts as a settlement for all these chains.
The below visual created by, emkoscp, illustrates what Ethereum could look like in 2025:
Top left: Validium architecture has separate external data (so data isn’t stored on mainnet), but uses zero-knowledge proofs to bridge information.
Bottom left: Side-chains like Polygon’s Matic network and alternative layer ones like Solana will bridge to the execution layer by creating wrapped tokens or trusting a relay to convert tokens to mainnet or viceversa.
Top right: Rollups at the top are both connecting to the execution layer, saving data into the data shards, and executing transactions. Examples of live rollups today are Optimism and Arbitrum.
Bottom right: Volitions, which are fairly new, are similar to ZK-rollups, but commit state roots and proofs to Ethereum. Unlike a ZK-rollups that also post transaction call data exclusively to Ethereum, a volition lets users choose their alternate data availability solution. This means that all users and applications can share the same state root.
Long live Ethereum
Just after 3am in the morning on September 15th, 2022 the Ethereum community made history. Now more than ever there is so much to look forward to in this ecosystem and while we can’t say when all these upgrades will happen, we can say we believe they will, because we believe in the future of the Ethereum blockchain. Long live Ethereum!
Visit the ConsenSys Merge Knowledge Base to keep learning about PoS.