How To Make Ethereum Great Again: Insights from Ethereum R&D

In a recent episode of the Unlayered podcast, hosts Sal and Dave sat down with Emmanuel Awosika, a prominent member of the Ethereum R&D community, to explore the current challenges facing Ethereum and potential solutions to help make the network competitive with newer, high-throughput blockchains like Solana. The discussion covered a wide range of topics, from the technical hurdles of scaling Ethereum to the cultural shifts needed within the ecosystem.

The Current State of Ethereum

Ethereum, once the undisputed leader in smart contract platforms, is facing increasing criticism and competition. Emmanuel Awosika points out that much of the current negativity stems from Ethereum's success in some areas, coupled with underestimation of the challenges in others:

"I think you could say it's the inverse of maybe succeeding too much. So for example, you have Bruno Central, Bruno is finally taking off. So you have like base and a bit from an optimism. And that's why he once said, we wanted to become big and all that. But we also did not like keep careful like starting problems."

This success has led to unforeseen issues, particularly around incentives and the economic models of Layer 2 (L2) solutions. The Ethereum community, according to Awosika, didn't adequately plan for the rapid growth and adoption of L2s, leading to fragmentation and coordination problems.

The Challenge of L2 Interoperability

One of the most pressing issues facing Ethereum is the lack of interoperability between various L2 solutions. As more applications and users migrate to L2s to escape high gas fees on the Ethereum mainnet, the ecosystem is becoming increasingly fragmented. Awosika notes:

"Now you have proposals and ideas and even VC back companies that could maybe solve some of these issues with fragmented liquidity and L2s, things like chain abstraction. But to me, this feels like we have now just created the same set of circumstances where it's a problem that will be solved in three years, not something that's allable today."

This fragmentation poses a significant challenge for developers and users alike, as it becomes increasingly difficult to move assets and data between different L2 solutions seamlessly.

The Ethereum Scaling Roadmap

While Ethereum has long had a scaling roadmap, Awosika argues that it may not be adapting quickly enough to changing circumstances:

"Um, like one of my recent tweets was this idea of having like base rule ups as the KVMs and you find them and then all of them are verifying proofs on along with the L one. And this is what's happened like with like sci-fi for the most part, but you have like polygon, polygon and started polygon generate blocks like snark proof for L1 blocks in like 24 school is building a similar problem."

He suggests that Ethereum should be more flexible in adjusting its roadmap to reflect advancements in zero-knowledge proof technology and other scaling solutions.

The Decentralization Dilemma

A key challenge in scaling Ethereum, particularly through L2 solutions, is maintaining decentralization. Awosika points out that there's an intrinsic tension between decentralizing L2s and the profit motives of their creators:

"Isn't there like an intrinsic issue with trying to decentralize these L2s? Because if you're going to decentralize it, that means you can decentralize the sequencer set. And ultimately, that means you have to give up the, um, the sequencer fees."

This raises questions about the long-term sustainability and decentralization of L2 solutions, as teams may be reluctant to give up the lucrative sequencer fees that come with controlling the network.

Lessons from Solana

While Ethereum has been the dominant smart contract platform for years, newer blockchains like Solana have gained significant traction due to their high throughput and low fees. Awosika believes Ethereum can learn valuable lessons from Solana's approach:

"I think something that I do appreciate what I saw now a lot on all the systems is being able to take like parroture efficiency so this is um very soon conclusion those is sweet I interacted with in a long time ago when someone was like films after a problem is not this media they were trying to solve it's not shared sequences although like a disappear system they be like yeah they point like the point the as a third problem is not shared sequences or intent or or base preconks or it's in a fraction of all that it's actually scaling like once you scale once you it's like this hydra like it's like once you cut off the head a lot of things become easier to solve"

This focus on scaling as the primary challenge, rather than getting caught up in complex solutions to secondary problems, is something Awosika believes Ethereum should emulate.

The Need for a Sense of Urgency

One area where Awosika believes Ethereum can learn from Solana is in adopting a greater sense of urgency:

"So rhinoxians have this sense of urgency that's why like for example in terms of so in terms of when there were no production to give you around like give you contract like the only to give you behind we're like application specific so you got like sequencing light you have like new great we can see what you think it just looks three years you have like major production design games we already proven no one works"

This urgency, he argues, has allowed Solana to rapidly iterate and deliver solutions that users can actually use, rather than getting bogged down in theoretical discussions.

The Future of Stablecoins on Ethereum

Stablecoins represent one of the most successful use cases for cryptocurrencies, particularly in emerging markets. Awosika sees significant potential for growth in this area:

"I think stable coins are the one crypto application that makes sense at least to most people. I can't find. I've often like a developing country, so I know what's going to have your local currency like red by inflation, like one million people and see like things increase almost every time."

However, he also notes the increasing regulatory scrutiny on stablecoins and suggests that we may see a bifurcation in the stablecoin market, with some coins focusing on regulatory compliance while others prioritize decentralization and censorship resistance.

Tokenization and Ethereum's Future

The concept of tokenizing real-world assets on Ethereum has gained significant attention recently. However, Awosika raises important questions about how this will work in practice:

"I think the idea part of the idea is for them is like my group is like I also honestly I think one of the things like tokenization I think one of the things that I'm talking to is enough but because they have like so much like Wall Street vibes and it's like this one so but you could imagine a world where you have like these things going on and if anything except to your point if anything happens there that needs to involve trading like actual throughput and store then it's good to make it for some sort of like do on L2"

He suggests that while tokenization might bring institutional interest to Ethereum, it shouldn't be seen as the end goal for the network.

Upcoming EIPs That Could Transform Ethereum

Awosika is particularly excited about several Ethereum Improvement Proposals (EIPs) that could significantly enhance the network's capabilities:

"Yes like yeah peace seven, seven zero two like I mentioned it's been like originally was going to be a period of seven four and so like this very long and confederate three it felt like came out before it was it was around before eric four three three seven but then like there were little issues it was going to say results in like in the four like folks gets done do like security and concerns around it so we had like this solution that doesn't require like a consensus because eric four three three seven and that's like the whole meme of construction and I can't track on like really powerful"

These EIPs could introduce features like gas sponsorship, transaction batching, and more flexible authentication mechanisms, all of which could significantly improve the user experience on Ethereum.

The Need for Standardization

One of the challenges facing the Ethereum ecosystem is the lack of standardization across different L2 solutions and bridges. Awosika emphasizes the importance of addressing this issue:

"More standardization like it's not enough for you to have like I have different preference solution the building in taro solution and very visual like vendor mode in doesn't happen an example of that I don't know if you guys know it is it took you to standard code um erc seven to each one it's called so called xdr 20"

He argues that without proper standardization, users will face increasing fragmentation and poor user experiences as they try to navigate between different L2 solutions and bridges.

Ethereum's Identity Crisis

Awosika suggests that Ethereum is going through something of an identity crisis as it faces real competition for the first time:

"I think that's part of why Ethereum is maybe going through this identity crisis at the moment because it started in 2015 Bitcoin was basically the only competition obviously Bitcoin is this sort of anarcho hyper edge case technology when it started out and then Ethereum has lived in like an almost vacuum of zero real competition for about five six seven eight years"

This lack of competition, he argues, has led to complacency in some areas and a failure to adapt quickly enough to changing market conditions.

The Timeline for Ethereum Scaling

When asked about the timeline for Ethereum to achieve throughput comparable to Solana, Awosika is cautious:

"I think base is like one example we are considering within the next two three years that's like you're very optimistic on perspective because base has been like progressing to be the gasoline means so yeah so I'll say like two three years for pit on four for chains like base for every joint optimism maybe like four five depending on how there are many like factors in place"

He emphasizes that scaling is not just a technical challenge but also requires coordination and incentive alignment across the ecosystem.

The Importance of Real-World Adoption

Throughout the discussion, Awosika repeatedly emphasizes the importance of focusing on real-world adoption and use cases:

"I feel like the best like ecosystems that end up winning are the ones that like appeal to us many people as possible. So if you're if you're like awesome, I'm for very small sets of a span. They're like, they're like, that like puts in this not very cool position."

He argues that Ethereum needs to focus on creating applications and solutions that appeal to a broad user base, not just a small group of crypto enthusiasts.

The Role of Regulation

Regulation is likely to play an increasingly important role in shaping the future of Ethereum and other blockchain platforms. Awosika notes:

"Yes, that's something that's called many friends. I think it scares the low suit is like is it a particular part of the build that sort of that doesn't like there's an artistic for you to decide if something's scary."

He suggests that while regulation may push some projects towards greater decentralization, others may choose to embrace regulation if it provides a path to broader adoption.

The Need for Pragmatism

Throughout the discussion, Awosika advocates for a more pragmatic approach to Ethereum development:

"Instead of having to like say we're going to like have we have this hammer and nail on it it's like so cr by fourth we should also like be also pragmatic our reality becomes when this time you can also like scale in our making sure like crypto is useful for like I mean if you look at this theory if revolution gets conned today what's going to defend it theory on"

This pragmatism, he argues, should extend to all aspects of Ethereum development, from technical decisions to governance and community building.

The Importance of User Experience

One area where Ethereum has historically lagged behind more centralized solutions is in user experience. Awosika believes this needs to be a key focus going forward:

"We should not forget the actual things. So most of who you're trying to sell these things so they're not on to it. And that's why so if I'm in build on it, I see that all the Chinese getting optimized for Wall Street's, I feel turned off."

He argues that Ethereum needs to focus on creating applications and interfaces that are accessible and user-friendly for a broad audience, not just crypto experts.

The Role of Layer 2 Solutions

While Layer 2 solutions have been touted as the key to scaling Ethereum, Awosika cautions against viewing them as a panacea:

"So for example, like these pre confirmations, which is a, which is considered the good standard for rule of this, like confirmations. So that's like three, four years in the future. And I think that's some of that problem we've had."

He argues that while L2s are important, they shouldn't come at the expense of continuing to improve and scale the Ethereum base layer.

The Importance of Community

Throughout the discussion, Awosika emphasizes the importance of the Ethereum community in driving the network forward:

"I think the good thing about Ethereum is I mean, the same way I had I tend to like have views that like people disagree with is like everyone can just come on like have their views. And we have this sort of robust stuff like checks and balances that ensures that one person doesn't."

This diversity of viewpoints, he argues, is crucial for Ethereum's long-term success and ability to adapt to changing circumstances.

Lessons from Big Tech

While many in the crypto space are quick to dismiss centralized tech giants, Awosika argues that there are valuable lessons to be learned from their success:

"Big tech works like centralized and for so like i mean we only set the best problem it works it's not it's like dystopia like a lot of sometimes in crypto we just like pretend like oh this is bad and evil blah blah blah like two-thaw worth your bank worth people making this is it's already worth"

He suggests that Ethereum should strive to match or exceed the user experience and efficiency of centralized solutions while maintaining the benefits of decentralization.

The Future of Ethereum

Despite the challenges facing Ethereum, Awosika remains optimistic about its future:

"I think that's why like um CR should also like corn like boughindaleist uh this is also good and i think that's why it's good like we're getting like very good trees because now like solo stickers can theoretically not have to like um old sumo states they can maybe like weld it um the chain with more so just like you return right"

He believes that with the right focus on scaling, user experience, and real-world adoption, Ethereum can overcome its current challenges and continue to lead the way in blockchain innovation.

The Importance of Accessibility

Awosika emphasizes the need for Ethereum to become more accessible, particularly in developing countries:

"In more land developing countries non western countries you can like how do people like think like lower requirement which is good or or not i'm trying to translate it really but like when we start also living by the leaders well if you need to get the display we have like open open leaders that looks like deep you will you will need but just be wrong"

He suggests that lowering the barriers to entry for staking and participation could help drive adoption in these markets.

The Path Forward for Ethereum

In conclusion, Awosika outlines a vision for Ethereum's future that balances technical innovation with pragmatism and a focus on real-world adoption:

"We uh quite the long list of things there um so i think like very unusual so yeah yeah i i think um but what you say makes sense and i think what's awesome is you've put all this on paper and so i would encourage our listeners to definitely check out all of your tweets as well as your blog where you really do a great job of kind of describing these in detail"

By addressing the challenges of scaling, improving user experience, and fostering a vibrant ecosystem of developers and users, Ethereum can maintain its position as a leading blockchain platform while adapting to the evolving needs of the crypto space.

While Ethereum faces significant challenges, the insights provided by Emmanuel Awosika offer a roadmap for how the network can evolve and thrive in the face of increasing competition. By learning from the successes of platforms like Solana while staying true to its core principles of decentralization and innovation, Ethereum has the potential to overcome its current hurdles and drive the next wave of blockchain adoption.

As the crypto space continues to evolve, it's clear that the future belongs to platforms that can balance technical sophistication with real-world usability. Ethereum, with its vast ecosystem and passionate community, is well-positioned to lead this charge - provided it can address the challenges outlined by Awosika and others in the space.

The conversation between Awosika and the Unlayered hosts serves as a valuable reminder of the importance of critical thinking and diverse perspectives in the blockchain space. As Ethereum and other platforms continue to develop, it will be crucial to maintain this spirit of open dialogue and constructive criticism to ensure the technology reaches its full potential.

Facts + Figures

• Ethereum is facing increasing criticism and competition after years of dominance in the smart contract space.
• Layer 2 (L2) solutions on Ethereum have seen rapid adoption, but this has led to unforeseen issues with incentives and economic models.
• Lack of interoperability between L2 solutions is creating fragmentation in the Ethereum ecosystem.
• Ethereum's scaling roadmap may not be adapting quickly enough to changing circumstances and technological advancements.
• Decentralizing L2 solutions presents challenges, as teams may be reluctant to give up lucrative sequencer fees.
• Solana's focus on scaling and sense of urgency in development is seen as a potential model for Ethereum to emulate.
• Stablecoins represent one of the most successful use cases for cryptocurrencies, particularly in emerging markets.
• Tokenization of real-world assets on Ethereum is gaining attention but raises questions about practical implementation.
• Several upcoming Ethereum Improvement Proposals (EIPs) could significantly enhance the network's capabilities.
• Lack of standardization across L2 solutions and bridges is creating user experience challenges.
• Ethereum is going through an identity crisis as it faces real competition for the first time in years.
• Timeline for Ethereum to achieve throughput comparable to Solana is estimated at 2-5 years, depending on various factors.
• Regulation is likely to play an increasingly important role in shaping the future of Ethereum and other blockchain platforms.
• Improving user experience is seen as crucial for Ethereum's future success and adoption.
• The diversity of viewpoints within the Ethereum community is seen as a strength for driving innovation and adaptation.
• Lowering barriers to entry for staking and participation could help drive adoption in developing countries.

Questions Answered

What are the current challenges facing Ethereum?

Ethereum is currently grappling with several significant challenges. These include scaling issues on the base layer, fragmentation and lack of interoperability between Layer 2 solutions, and an identity crisis as it faces real competition for the first time. Additionally, there are concerns about maintaining decentralization while scaling, improving user experience, and adapting to potential regulatory challenges.

How does Ethereum plan to address scaling issues?

Ethereum is pursuing multiple strategies to address scaling issues. These include the development and optimization of Layer 2 solutions, implementation of upcoming Ethereum Improvement Proposals (EIPs) that could enhance network capabilities, and ongoing research into technologies like sharding. However, the timeline for achieving throughput comparable to high-performance blockchains like Solana is estimated to be 2-5 years, depending on various factors.

What can Ethereum learn from Solana?

Ethereum can learn several lessons from Solana's approach. These include adopting a greater sense of urgency in development, focusing on scaling as the primary challenge rather than getting caught up in complex solutions to secondary problems, and prioritizing user experience. Solana's ability to rapidly iterate and deliver solutions that users can actually use is seen as a model that Ethereum could potentially emulate.

How important are Layer 2 solutions for Ethereum's future?

Layer 2 solutions are considered crucial for Ethereum's scaling strategy, but they shouldn't be viewed as a panacea. While L2s can significantly increase transaction throughput and reduce fees, there are challenges around interoperability, user experience, and maintaining decentralization. The development of L2s should complement, rather than replace, efforts to improve and scale the Ethereum base layer.

What role will regulation play in Ethereum's future?

Regulation is likely to play an increasingly important role in shaping Ethereum's future. While some projects may be pushed towards greater decentralization to avoid being classified as securities, others may choose to embrace regulation if it provides a path to broader adoption. The Ethereum community will need to navigate these regulatory challenges while maintaining the network's core principles of decentralization and innovation.

How can Ethereum improve its user experience?

Improving user experience is seen as crucial for Ethereum's future success and adoption. This could involve simplifying interfaces, reducing gas fees through scaling solutions, improving wallet functionalities, and creating more intuitive ways for users to interact with smart contracts. Additionally, standardization across different L2 solutions and bridges could help create a more seamless experience for users navigating the Ethereum ecosystem.

What is the importance of real-world adoption for Ethereum?

Real-world adoption is critical for Ethereum's long-term success. The network needs to focus on creating applications and solutions that appeal to a broad user base, not just crypto enthusiasts. This involves developing use cases that solve real-world problems, improving accessibility, and creating interfaces that are user-friendly for non-technical users. Without significant real-world adoption, Ethereum risks remaining a niche technology rather than a transformative force in global finance and technology.