Learnings from ETHDenver 2024: Ethereum Embraces a Multichain Future
Summary
Galaxy Research’s Christine Kim attended ETHDenver, the world’s largest Ethereum hackathon, for the event’s 7th run in Denver, Colorado. Like last year, ETHDenver was hosted at Denver’s National Western Complex, a sprawling event hall of over 350,000 square feet used for hosting not only crypto conferences, but also livestock auctions, concerts, sporting events, expositions, and indoor festivals. In this note, Christine highlights the chain-agnostic characteristics of the conference this year that welcomed projects and protocols from all blockchain ecosystems to share the stage and event floor alongside Ethereum-focused ones.
Ethereum Cedes Execution to L2s
Contrary to what the first three letters of the conference’s name suggests, ETHDenver is not an Ethereum conference. It is a chain-agnostic cryptocurrency conference. Though in prior years this fact may not have been widely known among event attendees, it was impossible to ignore this year given the sheer breadth of programming and event space dedicated to promoting the ongoing development and wins of Ethereum competitors. As a blockchain for general purpose computation, Ethereum as a protocol through forthcoming upgrades like the Dencun upgrade is embracing the migration of its users for transaction execution to alternative networks, namely Layer-2 rollups (L2s).
L2s projects took to the mainstage at ETHDenver on Thursday, February 29 and shared strong sentiments in favor of experimenting with features that make their rollups increasingly differentiated from Ethereum and not exclusively reliant on Ethereum for security. Cofounder and CEO of Starkware Eli Ben-Sasson said, “We will be using different [data availability] layers as well. No objection there to that… The thing that our developer ecosystem wanted first to have is the blobs of EIP 4844 because they basically get Ethereum security turned on with no change. Once we bring in things like data availability or volition, it means that they would need to change parts of the code to use those things and it would be slightly more work for them, but it really depends on what kind of cost reduction we’ll see with [EIP] 4844. If it’s as significant as promised, then we’ll be happy with that for a while.”
Caption: The Urge to Surge panel at ETHDenver 2024. From left to right, Christine Kim (Galaxy Research), Steven Goldfeder (Offchain Labs), Eli Ben-Sasson (Starkware), Arun Devebhaktuni (Mantle), Haichen Shen (Scroll).
Source: Twitter, @EthereumDenver
Researcher at Mantle Arun Devebhaktuni confirmed that the cost savings in his view from the Dencun upgrade and EIP 4844 were not significant enough to keep the rollup his team is building from using alternative protocols like Celestia for data availability. Devebhaktuni added that rollups cannot be competitive without experimenting with features that make their networks less aligned with the Ethereum execution environment. “If you’re creating an L2 and you’re creating an L2 that’s fully EVM equivalent, you are going to have at this point a much harder time getting adoption for it than if you were to try and experiment. This is going to be the year I think that people are going to launch a thousand different rollups and if every single rollup is an EVM equivalent rollup, what’s the differentiator that gets you to be the rollup that people use?” said Devebhaktuni.
Rebuilding Ethereum’s Competitive Edge
As L2s increasingly look towards other solutions for data availability and security outside of Ethereum, Ethereum core developers are feeling the pressure to upgrade Ethereum as soon as possible to be a more performant and competitive network that can service L2s with their data needs. “If you provide scalable data then more users might move to Layer 2s because it’s cheaper. If we don’t do that, then there’s [data availability] solutions that’s coming. People will eventually move out of Ethereum anyways to use the other [data availability] solutions but then the downside of that is you’re not settling on Ethereum anymore and your posting [data] to something else and then as someone that is working in the Ethereum space, I would hate for them to take our lunch basically so that something we have to do,” said Ethereum protocol researcher and developer at Offchain Labs Terence Tsao at a panel at ETHDenver.
Caption: The Protodanksharding Dencun Upgrade panel at ETHDenver 2024. From left to right, Terence Tsao (Offchain Labs), Preston van Loon (Offchain Labs), Christine Kim (Galaxy Research).
Source: Twitter, @EthereumDenver
Despite these concerns that Ethereum will not only lose its edge as a platform for general purpose compute to L2s but also as a network for servicing L2s with their data needs, the sentiments shared by speakers on stage and attendees across the floor at ETHDenver were reflective of an expanding Ethereum ecosystem that embraces, rather than fears, competitors. Representatives from alternative data availability projects including NEAR, EigenDA, Avail, and Celestia spoke openly about their projects on the main stage of the conference, while representatives from alternative Layer-1 blockchains including Solana, Polkadot, Hedera, and Lukso commanded impressive booths to educate attendees about their protocols.
During last year’s ETHDenver conference, I opined on the impressive scale of the Ethereum ecosystem. Ethereum’s growth has by no means slowed since then as the ecosystem has doubled down on a multichain and modular future. However, it is becoming increasingly apparent to Ethereum core developers and the broader Ethereum community that to succeed in this future Ethereum must rebuild its competitive edge. Rather than a blockchain for general purpose computation, Ethereum must evolve to become the world’s most reliable data availability layer for securing L2s, starting with the forthcoming Dencun upgrade.
To learn more about the Dencun upgrade and EIP 4844, read this Galaxy Research report.
To learn more about the blockchain modularity thesis, read this Galaxy Research report.
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