27 October 2020
“Go ahead and ship it.” This is the message of Ethereum co-founder, Vitalik Buterin, to Ethereum 2.0 developers.
After several years of development, Buterin must be under tremendous stress as the eyes of the crypto world are upon Ethereum, which hosts billions of dollars of transactions each day. For perspective, the Ethereum platform, as sticky and perhaps gummy as it is, processes more transactions than Bitcoin. Sure, Bitcoin as the pioneer network has only one function: Value transfer.
According to a Messari analysis, the Ethereum blockchain is on course to surpass over $1 trillion in transactions in 2020. At this pace, it could surpass Bitcoin as the dominant network.
A potential explanation for the spike in transactions and value can be the accelerated adoption of decentralized finance (DeFi) in 2020. Uni, Sushi, Compound, Aave, and other DeFi protocols were rolled out by enterprising and innovative founders, minting millions of dollars for investors who taped the free flow of capital, earning big from deflationary governance tokens.
However, Ethereum’s functionality extends beyond DeFi and other attempts of disrupting traditional finance. Ethereum’s utilization of tokens and smart contracts enable it to surpass its predecessor as the de-facto platform for developers.
And it has been magical for those who got in early. Investors are not only neck-deep in profits despite the price slumps of 2018 but also should be proud of their innovation.
The Ethereum platform is the go-to platform for dApp developers, banking on the network’s first-mover status and security, and the fun of learning a new programming language in Solidity.
Beyond this, there are the bragging rights of participating in the first truly tested network, endorsed by executives of the stringent United States Securities and Exchange Commission (SEC).
With Ethereum improving without sidelining the community, comments Vitalik Buterin could dampen hopes of a possible Ethereum 2.0 rollout in the immediate term. Ethereum 2.0 will significantly change the Ethereum base layer, activating a new algorithm that is considered energy efficient while keeping decentralization intact.
A successful rollout, however, requires developers to thoroughly test the source code. The devil is always in the detail. A rushed launch could be disastrous for Ethereum’s reputation. As a safety net, Topaz, Spadina, Medalla, and recently Zinken test networks had to be activated to simulate how Eth2 Beacon Chain mainnet would function without risking millions and jeopardizing dApps anchored on the primary chain.
Onboarding problems were “ironed out” in the Zinken test network. As another safety net, the main library controlling transaction confirmation and private key generation is now being audited by the NCC Group, a cryptocurrency audit firm.
Danny Ryan, a developer with the Ethereum Foundation, in a Bankless Podcast last week, said the deposit contract date for the Beacon Chain won’t be set until the BLST library gets the thumbs up. He explained:
“This library is critical to creating keys, signing messages. Critical, in early phases, [means] that if you use this library, they need to be secure; if you use it to generate your wallets, it needs to have good randomness; and if you are signing your deposits which have a signature associated, it needs to be correct.”
There has been no word from the Ethereum Foundation or from Danny about the exact day when the deposit contract will be set other than the tentative mid-November date stated on the podcast. It remains a subject of conjecture, rumors, and expectations.
Ethereum developers are master delayers. Constantinople, St. Petersburg, and other intermittent hard forks in the Metropolis are prime examples of how development in Ethereum can be. Exciting but energy-sapping with marked price swings ahead of major upgrades.
Quantstamp are blockchain auditors and gave a greenlight to the source code of ConsenSys-developed Eth2 client called Teku. The client is designed for Enterprises. In a prepared statement, Quantstamp said Teku code was high quality and foolproof.
Reflecting this uncertainty is the market cool-off in the last trading day.
The Ethereum price is down 10 percent, below the $400 psychological round number. There are no specific causations but price dumps are evident across the board.
It’s advisable to monitor how Ethereum’s price reacts at $360, as its support trend line could determine the medium-term price trajectory. A close below this level may see ETH prices crater towards $320. Conversely, gains above last week’s high and $400 may spark demand especially if there are announcements around the deposit contract date for the Beacon Chain mainnet.