The Ethereum Merge Is Here—What Comes Next?

InfoNesia.xyz – After years of anticipation, the merge has arrived. Early Thursday morning, Ethereum’s landmark transition to proof of stake went off without a hitch.

With tens of billions of dollars of digital assets on the line and zero margin for error, the Ethereum merge consumed the focus and energy of the network’s elite cadre of core developers for almost half a decade.

With that gargantuan technical feat now in the bag, what’s next for Ethereum?

For the next two to three weeks, Ethereum’s core developers will hold no group meetings and make no collective decisions about the future of the network. This respite from high-octane decision-making will be short-lived, however.

Within the next month, the network’s core developers will have to collectively determine which features they plan to include in Ethereum’s next upgrade, Shanghai. Opinions within the group are torn. And once again, the decision will have multi-billion dollar implications.

“Lots of people have lots of things they want to go in [Shanghai], but there isn’t yet consensus on what will actually make it,” Ethereum core developer Micah Zoltu told Decrypt.

Likely the most immediately pressing feature being considered for inclusion in the Shanghai upgrade is the ability for Ethereum validators to withdraw staked ETH.

The merge just transitioned Ethereum to a proof-of-stake
mechanism; starting today, all transactions on the Ethereum network will be validated not by energy-intensive “miners” but by individuals and organizations which have deposited, or staked, sizable amounts of ETH. Staking ETH will allow these entities to generate and collect new ETH as a reward for proving the computing power necessary to validate transactions and secure the network.

At the moment, however, ETH can only be deposited into Ethereum’s staking mechanism. It cannot be withdrawn. That means the over $21 billion worth of ETH currently staked on the network is stuck there until Ethereum’s developers add a withdrawal feature.

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Understandably, withdrawal capability is at the top of almost every core developer’s priority list for the Shanghai upgrade.

“I’d say that’s definite,” Ethereum core developer Marius Van Der Wijden told Decrypt, regarding the likelihood that core developers will agree that staked ETH withdrawal should be addressed by Shanghai.

But what else will be included in the upgrade is less clear.

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“Top priorities differ by person. Everyone has a different list. What is ‘pressing’ is also very subjective and not agreed on,” said Zoltu.

The second most likely suite of features to be included in Shanghai are updates to the Ethereum Virtual Machine (EVM), the developer-oriented mechanism underlying Ethereum that defines the rules governing how blocks on the network interact. There have been no updates made to the EVM in over two years, in part because incorporating those improvements into the merge would have created a massive headache for developers.

“Adding any more complexity to the merge would have increased testing tenfold and made it even harder,” said Van Der Wijden.

Another long-rumored Ethereum feature that has generated a fair amount of interest is something called proto-danksharding, which has to do with the scalability technology rollups.

Rollups are tools that address the Ethereum mainnet’s slow speed and exorbitant gas fees by rolling collections of transactions into a unit that is presented to the Ethereum blockchain as a single transaction.

Proto-danksharding would serve as the preliminary version of danksharding, a process by which large amounts of data on rollups are verified by only sampling small pieces of data. Essentially, the update would dramatically increase the speed and ease with which huge amounts of data could be verified on Ethereum layer-2 networks like Optimism and Arbitrum.

“This will decrease the amount of gas that is used by rollups on-chain and will allow rollups to scale a lot and decrease their transaction costs by a lot,” said Van Der Wijden.

While the prospect of danksharding is immensely attractive to layer-2 users, who would likely see the upgrade slash both gas fees and transaction times, the development would also come at a cost.

The more intricate the collection of features included in Shanghai, the more complex and, importantly, delayed, the upgrade will be.

“Some of the more research-focused people don’t really consider that all of this has to be implemented and tested,” said Van Der Wijden. “If we have ten changes [in Shanghai], then you need to test each change individually, but you also need to test how these changes interact with each other. The amount of testing you need to do grows exponentially with the amount of features you include in an upgrade.”

There is no estimate yet as to how long Shanghai will take to implement. Van Der Wijden is confident though that the upgrade will occur within the next year.