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GM, Tim here.
- Vitalik Buterin explores possible futures for Ethereum.
- Why layer 2 token losses could get worse.
- Jito launches Solana restaking.
Ethereum’s future
Ethereum co-founder Vitalik Buterin just completed a series of blog posts exploring the top smart contract network’s future.
The six posts, which clock in at a combined 31,000 words, are a follow up to the roadmap Buterin first unveiled in 2022.
Here’s what will impact users:
- Users will be able to run validators with just one Ether (down from 32 Ether).
- Developers will focus more on interoperability between layer 2s.
- An encrypted mempool will minimise risks of excessive value extraction from users.
- Transaction verification will become so easy that every mobile wallet, browser wallet, and even smart watch can do it by default.
- Ethereum’s transaction history will be shrunk down to make the network more efficient.
- Developers will eventually make account abstraction the default on the network and explore advanced cryptography techniques.
The updated roadmap comes at a critical time for Ethereum.
Sentiment is low as Ethereum has underperformed both Bitcoin and rival smart contract network Solana so far this year.
Many of Ethereum’s faithful are also concerned that the focus on scaling via layer 2s is negatively impacting the network.
Layer 2 tokens fall
Major layer 2 tokens have fallen sharply in 2024 despite a rally in the broader crypto market.
Arbitrum is down 66%, Optimism has fallen 56%, Starknet is down a whopping 84%, and the newly-launched ZKsync is off 55%.
Big increases in circulating supply have created sell pressure, driving down token prices, Thomas Bautista, a research analyst at GSR, told DL News.
And there are more unlocks coming.
Over 40% of all Arbitrum tokens are in circulation, according to Token Track. Only 29% of OP tokens are currently in circulation, and Starknet will face an even larger supply shock, with a mere 19% of its tokens circulating.
Solana gets restaking
Solana liquid staking project Jito just opened deposits for its restaking protocol.
Deposits have already hit the protocol’s $25 million cap.
1/ The time has come!🚨
— Jito (@jito_sol) October 30, 2024
Jito (Re)staking deposits are now LIVE 🥳 pic.twitter.com/FAUvrnKd9x
Restaking is a way for users to use staked tokens to secure multiple networks simultaneously. It’s often advertised as a way for stakers to earn higher rewards than they would just by staking.
Restaking on Solana rival Ethereum ballooned to a $21 billion sector earlier this year.
But that figure has bled to around $14 billion due to a combination of Ether’s price falling and several controversies impacting top Ethereum restaking protocol EigenLayer.
Whether Jito’s restaking will fare better remains to be seen.
This week in DeFi governance
VOTE: ENS DAO votes down working group funding proposal
TEMP CHECK: GFX Labs asks Uniswap DAO for $250,000 to fund DAO interface Tally
VOTE: Arbitrum establishes a DAO events budget for 2025
Post of the week
Ethereum Foundation researchers Justin Drake and Dankrad Feist have dropped their advisory positions at EigenLayer after receiving criticism earlier this year.
TLDR: I dropped the EigenLayer advisorship, left the ultra sound team, and made other changes to double down on neutrality and focus on L1 research and coordination.
— Justin Ðrake 🦇🔊 (@drakefjustin) November 2, 2024
In September I let go of the EigenFoundation advisorship. I want to apologise to the Ethereum community and EF…
Got a tip about DeFi? Reach out at tim@dlnews.com.