The Blockchain Sector 2023-03-05
Here are some of my thoughts, takeaways and musings from the event.
Topics & Narratives
I went through the schedule and tallied the number of talks that addressed each subject.
Zero Knowledge 18
Account Abstraction 6
Real World Assets 3
Zero Knowledge EVMs were a hot topic, with Polygon set to launch their zkEVM later this month and zkSync releasing a mainnet beta. The recent release of ERC4337 allows developers to do a lot more with contractual wallets.
Interestingly, I didn't hear many people talking about sharding, withdrawals, or Ethereum upgrades, as I had expected. Perhaps the merge went so well that expectations for flawless rollouts in the future seem guaranteed.
There were many more VCs in attendance compared to Devcon in Bogota, and there were more booths set up on the main event floor. Generally, the atmosphere felt more commercial, which is not surprising compared to a developer-specific conference.
I always find it amusing how well Ethereum embraces its competitors, with BNBchain and Near being main sponsors. There was even a "Near Day" on the main stage 🤷♂️
There was a lot of optimism about the technology and markets, but there was also a hesitation of caution. After a market decline, human psychology shifts to being more cautious, which doesn't serve us well. However, most VCs are looking for projects that are generating revenue. A few investors I spoke to said they weren't even looking at token deals and are just interested in equity deals where there is product-market fit and value accrual.
For developers, zero knowledge proofs have been in vogue for some time, and it seems like we are getting to the stage where they might become more widely used in production environments. There were a number of people working on privacy solutions, which is great to see after the Tornado Cash fiasco where developer Alexey Pertsev remains in custody.
ZKrollups are believed to be the future of Ethereum execution, and there are several teams working on this at the event:
ZKsync – mainnet launched~ish
Polygon – mainnet March 27th
Taiko – mainnet 1 year
Scroll – mainnet EO Q2 2023
All these teams are using the same circuits, which are being worked on by the Ethereum Foundation-funded Privacy & Scaling team. These circuits have 30,000 lines of code, and one of the developers suggested there were almost certainly going to be bugs that need ironing out. There are going to be risks involved with using ZKrollups for some time, and these will be mitigated by varying degrees of centralization, like "training wheels."
The same privacy and scaling team also has an active repository in their Github for its chain: https://github.com/privacy-scaling-explorations/zkevm-chain
Could Ethereum launch a native zkRollup L2 or network of L2s that have greater interoperability between themselves and the L1 mainnet at some point?
Account abstraction is something I need to do some research and work on. I felt a bit out of touch with the latest developments and the potential for this technology.
EIP-4337 is a new kind of account abstraction for the Ethereum network, enabling users to use smart contract wallets instead of externally owned accounts (EOAs) for transactions.
Smart contract wallets are more flexible than EOAs and can define different rules and configurations within their code, offering capabilities such as permission controls, batch transactions, account recovery, and transaction limits. EIP-4337 introduces a “pseudo-transaction” object called a UserOperation, which goes into an “alt mempool” and can be picked up by bundlers who package multiple user operations into a single transaction known as a “bundle transaction”.
There were a number of companies at the event looking at this such as:
Gasless.xyz swaps authorized offchain without any tx
Blocknative.com tx bundler, gasless
These send the bundle transaction to a global “singleton” smart contract known as the EntryPoint, which calls a special function on each smart contract wallet called “validateUserOp” to verify the operation’s signature and pay the fee.
Each smart contract wallet also implements a function called “execute” to actually perform the operation sent in by the EntryPoint contract. This kind of account abstraction allows users to transact with greater privacy and security, switch between multiple accounts, have more control over personal information, and make payments with more security and less fees.
Overall, it seems like ETHDenver was a great success with a lot of interesting discussions and developments in the Ethereum space. It's always exciting to see the progress being made and the potential for new technologies to emerge. As the blockchain industry continues to evolve, it will be interesting to see how these developments impact the wider world and how they can be used to create new opportunities and solve existing problems.
Full write up at: https://jamesbachini.com/ethdenver/