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Welcome back to 0xResearch. Here's what we've got for you today: |
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Where does Ethereum go next? |
BTC is $68k and ETH is $2.7k today. The last time bitcoin was at this price point was in November 2021, when ETH was ranging around $4.3K. |
Back then, Ethereum's prohibitively expensive gas fees averaged 130 gwei (27 gwei today). That prompted public declarations to "abandon" Ethereum for the alt-L1 chains then — remember "FOAN"? |
You could easily count every active rollup in those days. Today, there are at least 105 rollups scaling a cumulative total of about 296 transactions per second, according to L2Beat. |
The Ethereum L1 has a TPS of about 13, so that's about a 21x improvement from three years ago. All things considered, that's progress. |
This progress is largely thanks to the proliferation of rollups via rollup-as-a-service (RaaS) providers, like Caldera and Conduit, which makes it really easy and cheap to create them. |
The second major factor is the rise of alternative data availability solutions like Celestia, as well as the EIP-4844 Dencun upgrade in March 2024. The latter offered L2s rollups a cheaper way to post their batched data to the L1 — about 10x cheaper in cost savings. |
This is all going according to plan. But it's still a long way from Ethereum's endgame, which is to reach about 100k TPS on both the Ethereum mainnet and all L2s as part of the roadmap's "Surge" phase. |
For that to happen, much remains to be accomplished. |
For one, Ethereum needs PeerDAS (peer data availability sampling) to scale data availability. PeerDAS borrows some important ideas from BitTorrent's peer-to-peer file sharing by distributing broken pieces of data between Ethereum validator nodes to handle more data without the burden of having to store everything. |
Then there's data compression to make more compact the millions of daily signatures on transactions we sign via our MetaMask wallets, such that data usage of an ERC-20 transfer would cost no more than 30 bytes (180 bytes today). |
This can be achieved by aggregating several signatures into one that verifies against multiple public keys at once, using the BLS (Boneh-Lynn-Shacham) digital signature scheme — not currently possible on ECDSA (Elliptic Curve Digital Signature Algorithm) signatures today. |
Next is the use of plasma, a scaling solution wherein blocks are published off-chain with Merkle roots of those blocks placed onchain — a vast computational improvement over today's rollups, where full blocks are submitted onchain, or via validiums. |
That's just for the L2s. As for the L1, execution needs to continue scaling, either by increasing gas limits of L1 blocks or introducing piecemeal upgrades to make the EVM more gas-efficient. Methods look to adapting the EVM Object Format (EOF) bytecode, or creating parallelized markets for computation, data and storage (i.e., multidimensional gas pricing). |
All this ensures the L1 does not become a "ghost chain" used only for settlement and DA. In Vitalik's words, Ethereum still "needs to be powerful enough to be able to at least occasionally actually handle a highly complex and chaotic wind-down of an L2," which is why the "long-run security of the network" matters. |
Finally there are UX improvements like solving cross-chain interoperability, so using Ethereum doesn't feel like using 100 different chains. This effort is being tackled at the protocol level by developing better ERC standards like ERC-7683, and by having dozens of other players working in the "shared sequencing" and "chain abstraction" areas. |
All these roadmap features must be accomplished while preserving decentralization, which entails pushing L2s toward active proof systems that are trustless — and keeping an eye on centralization around the MEV layer. |
— Donovan Choy (X: @donovanchoy | Farcaster: @donovan) |
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Our modular infrastructure acts as an operating system that creates seamless interoperability among all L2s within the system. As such, BitcoinOS fully maintains Bitcoin's network effects, and establishes a permissionless, peaceful paradigm for the original chain to evolve in layers without ever needing to fork its code. |
Visit our website to learn more about Bitcoin's next act. |
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Memecoin frenzy on Solana: |
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Memecoin trading volumes (light and dark purple bars) are racking up new all-time highs relative to total DEX trading activity on Solana. In the last week, about $15.4 million in trading volumes came from memecoin trading, against a total of $19.8 million on all DEX activity. The pump.fun memecoin maker saw 31,615 memecoins deployed on past Saturday alone, marking its highest ever. |
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Unichain: Liquidity (Potentially) Begets Liquidity |
Unichain aims to establish a liquidity layer, potentially addressing fragmentation issues across L2s. The chain could significantly impact asset issuance dynamics and liquidity distribution across Ethereum and L2s. While Unichain offers potential benefits for UNI token holders through MEV revenue and staking, it could face challenges in attracting liquidity and competing with established L2 solutions. The success of the chain will depend on its ability to attract activity, volumes and liquidity onto the chain and navigate potential security risks associated with its architectural design. |
Read more → |
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EigenLayer: Growth at What Cost? |
EigenLayer's shift to permissionless AVS onboarding and token support promises enhanced flexibility but introduces new risks. Dynamic stake allocations create a fluctuating security landscape, requiring vigilant monitoring. The move towards an "ETF-like" restaking model opens doors for diverse, tradable portfolios. However, token volatility and a challenging vesting schedule loom large, threatening potential dilution. As EigenLayer navigates these waters, its success hinges on achieving exceptional adoption to offset supply expansion. |
Read more → |
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Is AI x crypto overhyped? Permissionless is bringing you the highest signal conversations at the nexus of these two nascent technology sectors. |
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Why the bull run might look different this time around |
Plus, could we carve out new all-time highs before the election? |
Read more → |
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Funding Roundup: Gaming startup Azra Games raises $42M |
A gaming studio helmed by an Electronic Arts veteran announced a Series A this week. |
Read more → |
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 | sassal.eth/acc 🦇🔊 @sassal0x |  |
| | Replying to@KyleSamani | @domothy Hello again Kyle - time to dispel more of your misinformation (not that you care since you're a pathological liar, but once again this reply is for the people you continue to mislead). Layer 2's *are* Ethereum (as much as you don't want them to be) so people are still using… x.com/i/web/status/1… | | | 6:34 AM • Oct 21, 2024 | | | | | | 241 Likes 27 Retweets | 21 Replies |
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|  | Mippo 🟪 @MikeIppolito_ | |
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Stripe acquiring Bridge for $1.1B is a big deal. The lack of successful equity exits in crypto has been a big headwind for the industry. If investors don't have a line of sight to an acquisition or IPO, they're less willing to allocate to later stage startups. This is part of… x.com/i/web/status/1… | | | 11:09 AM • Oct 21, 2024 | | | | | | 65 Likes 10 Retweets | 3 Replies |
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|  | Ryan Connor | BWR 🟪 @_ryanrconnor | |
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I'm obviously rooting for crypto ETFs, but there is a lot wrong with this framing. The biggest issue: The ETF industry is 40x larger today than when the first gold ETF launched in 2004. Put another way: ETFs were niche in 2004, now they are the norm. Adjusting for this… x.com/i/web/status/1… |  *Walter Bloomberg @DeItaone
BITCOIN ETFS INFLOWS HIT $20B, OUTPACE GOLD ETFS 10X: WHAT'S NEXT? While ETFs are seeing heavy inflows, Bitcoin's exchange inflows have dropped significantly by over 95.93% in the last 48 hours. This suggests a shift in investor behavior as fewer participants are moving their… x.com/i/web/status/1… |
| | | 12:50 PM • Oct 21, 2024 | | | | | | 6 Likes 0 Retweets | 0 Replies |
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|  | Aylo @alpha_pls | |
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Thoughts on GOAT: • Supply is very well distributed, as verifiable using @bubblemaps
• No VCs or cabal - many early buyers also out
• Completely fair launch, as it spawned organically via @truth_terminal tweets - was impossible to snipe etc.
• Unites the left and the right… x.com/i/web/status/1… | | | 10:03 AM • Oct 21, 2024 | | | | | | 367 Likes 73 Retweets | 33 Replies |
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The insights, views and outlooks presented in the report are not to be taken as financial advice. Blockworks Research analysts are not registered broker/dealers or financial advisors. Blockworks Research analysts may hold assets mentioned in this report, further outlined in the Firm's Financial Disclosures. |
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