Learnings from EthCC[7]: The Truth About Ethereum's Rollup-Centric Roadmap
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Galaxy Research’s Christine Kim attends the seventh annual Ethereum Community Conference (EthCC), which was held for the first time in Brussels, Belgium. The conference was re-located this year to avoid conflict with the 2024 Summer Olympic Games hosted in Paris, France. Jerome de Tychey, President of Ethereum France, announced on the final day of EthCC that the conference would not be returning to Paris next year. EthCC[8] will be hosted in a brand new destination in 2025, Cannes, France.
In this note, Christine shares her main takeaways and learnings from EthCC[7].
Caption: EthCC[7] conference venue in Brussels, Belgium.
Photo credits: Christine Kim
Unpacking the Impacts of a Rollup-Centric Future
I came to an important realization about Ethereum protocol development during EthCC this year. A rollup-centric development roadmap means protocol changes to Ethereum will matter less over time to end-users. It’s a rather obvious and in many ways, positive, conclusion for the ecosystem but there are lesser known and potentially difficult truths implied from it that are worth unpacking.
As Ethereum protocol developers become more hyper-focused on optimizations for data availability (DA), the rest of the Ethereum ecosystem will become less focused and engaged in protocol development. Ethereum as an execution layer will become less relevant to users because users will migrate to rollups as the primary point of contact for transfer of value and interacting with decentralized applications (dapps). The burden of responsibility for improving the user experience then as it relates to transaction speed, ordering, and confirmations falls primarily to rollup development teams. Thus, the upgrades that matter most for users will happen on rollups, as opposed to Ethereum. On Ethereum, protocol developers will prioritize improvements to the protocol as a DA layer. Indeed, they already are as illustrated by the code changes included in both the Dencun and Pectra upgrades.
As protocol developers become more hyper-focused on optimizations for data availability (DA), the technologies needed to achieve breakthroughs in the Ethereum user experience will primarily be built by rollup teams, not client teams. All the buzzwords catching the attention of investors and builders at EthCC, like maximal extractable value (MEV), trusted execution environments (TEEs), account abstraction, intents, and preconfirmations, have a waning relevance to Ethereum as a DA layer and growing relevance to rollups as the execution environment for the next major wave of crypto adopters. The innovative solutions and cutting-edge technologies being researched to address the hardest problems of crypto UX will become increasingly spearheaded by core development teams outside of Ethereum. This will also lead to an increasing number of protocol developers and client teams working for rollups in efforts to continue advancing the mission of Ethereum, even as the protocol of Ethereum narrows in use case and functionality. Already high-profile Ethereum core developers like Ben Edgington and “Protolambda”, as well as client teams like Prysmatic Labs, have reached this conclusion and now work for rollup teams full-time.
As protocol developers become more hyper-focused on optimizations for data availability (DA), they will have less visibility and agency over the values and ethos that drive product and app development on Ethereum. For most of Ethereum’s history, the code changes activated through a hard fork had direct impacts on user behavior. Protocol developers have adjusted the price of certain opcodes, introduced new precompiles, and removed features like gas refunds. Though many rollups take great care to mimic the execution environment of Ethereum today, their maturation will lead to greater deviations as Ethereum reinvents itself as a DA layer. It is not guaranteed that the same values that guided the design choices of Ethereum as a nascent general purpose blockchain will influence rollups to the same extent due to competition and a shifting regulatory environment. As Ethereum’s user base migrates to rollups, protocol developers must reckon with the fact that they will have reduced agency to influence and correct user behaviors on-chain through protocol changes.
Caption: EthCC[7] keynote talk by co-founder of Ethereum Vitalik Buterin.
Photo credits: Christine Kim
The Waning Importance of Ethereum Upgrades
Protocol changes on Ethereum are set to wane in importance the more serious protocol developers become about pursuing a rollup-centric roadmap. In many ways, the pros and cons of minimizing Ethereum’s role in the ecosystem are similar to the pros and cons of minimizing the Ethereum Foundation’s role in the ecosystem. The mentality of reducing the role of the protocol to help scale the reach of the protocol is risky but also necessary for decentralization. This is a vision for Ethereum that was most clearly explained by Aya Miyaguchi, the Executive Director of the Ethereum Foundation, when she was explaining her vision for the Ethereum Foundation.
She said: “Best part of Ethereum is that it is decentralized and because of this, the ecosystem has unique challenges. I see subtraction as a strategy to achieve two main goals. … The first goal is to have to seek the right balance. Building an EF empire and solving all the problems ourselves might have made ourselves look good for the short run, but that would have discouraged others [from feeling] that this ecosystem is for everyone to build, and the EF would also have become one single point of failure. If we kept adding, the ecosystem would rely on the EF forever.”
At EthCC[7], there was a plethora of side events, which is not a new phenomenon during the largest Ethereum conference in Europe. However, this year, more than in prior years, the side events were the main event featuring new ideas, experimental technologies, and important discussions that have the most relevance for Ethereum users. Though protocol developers were well-represented at EthCC and the topic of Ethereum as a protocol a headliner on the EthCC agenda, it was not the focus of the conference week for many attendees. This is because the building blocks for the future of finance are being built elsewhere. They are being built out-of-protocol. So, even though Ethereum protocol developers may pursue drastic and ambitious code changes to the core protocol, their relevance to the ecosystem should diminish over time. It is time for the impact of innovative solutions and new technologies built atop rollups and beyond to overshadow the relevance of Ethereum upgrades.
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