With Ethereum’s London upgrade imminent and Ether prices starting to improve, the cryptocurrency world is watching the smart-contracts platform with a laser focus. This month the Ethereum community also descended on Paris for one of the largest and most talked about annual Ethereum events in Europe — EthCC [4]. Despite the crypto market downtrend, Ethereum is giving the crypto community a lot to be excited about.
In this article we first look at a few choice highlights from Ethereum’s three-day conference in Paris, picking out some of the most interesting developments from the 250-plus experts from around the world who shared their insights.
Following our summary of EthCC, there’s also the matter of the London hard fork, now scheduled for Aug. 4, and what it could mean for the price of Ether, which has risen more than 7.5% this week after spending a few days below the US$2,000 level.
EthCC Day 1
Jerome de Tychey, President of Ethereum France, kicked-off day one of EthCC [4] with an opening ceremony at which he spoke about this year’s strict COVID-19 measures and the crypto A-list of guest speakers.
Highlights:
- Stani Kulechov, founder and CEO of Aave, discussed the power of credit delegation and explained that the next frontier of decentralized finance would involve creating outflows of capital from DeFi back into the real economy.
“If we’re able to get competitive liquidity from DeFi and put it into the real economy, we can beat those lending rates across the globe that are very high,” Kulechov said.
- Aya Miyaguchi, Executive Director of the Ethereum Foundation addressed the crowd to discuss what made Ethereum special.
“Ethereum is an infinite game. It’s not just about the technology, but its ecosystem, also known as ‘the infinite garden,’ where the purpose is to keep playing, no end in sight, and where the rules and players are constantly changing,” Miyaguchi said.
- Joseph Delong, chief technology officer at SushiSwap, introduced the audience to SushiSwap’s new generation automated market maker, Trident. The new AMM is set to feature four customizable pool options. Delong said the new AMM represented “the best AMM in DeFi in terms of built quality & capital efficiency.”
Day one also featured two talks addressing concerns and points of interest for the Ethereum community that we look at more closely below. Tim Beiko, an Ethereum developer, explained the soon-to-be-implemented Ethereum Improvement Proposal 1559. Ben Lakoff, co-founder of NFT-protocol Charged Particles, discussed non-fungible tokens being leveraged for more than just art and collectibles.
Tim Beiko — EIP-1559: The road to mainnet
Beiko started by explaining the origin and history of development of the upcoming London hard fork upgrade, EIP-1559. But more significantly, Beiko also shared what will come after the release of EIP-1559 to mainnet as an Ethereum developer.
The first thing on the list after mainnet will be collecting metrics to examine whether EIP-1559 has succeeded in delivering what it promised, including better pricing of transactions. Beiko also mentioned that developers were already considering a minor adjustment to the upgraded Ethereum.
“One small change we might want to do in the future is kind of symmetric, base fee updates,” he said. Right now, the base fee goes down more quickly than it goes up. It is linear. The future of EIP-1559 could see more symmetric base fee updates, where the rises and falls will be smoother.
Additionally, after the “Merge,” the switch to the proof-of-stake mechanism from proof-of-work takes place, the transaction fees from the priority fee will be re-routed to fall on validators, not miners. Finally, Beiko revealed the plan to apply a “1559 mechanism” to data sharding. “So when we deploy shards on Ethereum 2, we’ll also use a 1559-type mechanism to price the cost of storing data on those charts,” he explained.
Ben Lakoff — NFTs: Not just art
Ben Lakoff, co-founder of NFT-protocol Charged Particles, discussed the common misconception that non-fungible tokens are just about art.
“All of [the conversation] is still very much focused on art and collectibles. But the reality is, NFTs are these unique tokens, and they’re so much more than just art,” Lakoff said.
Lakoff highlighted NFTs as in-game items and in the metaverse as examples.
“There’s actually a new publicly traded [exchange-traded fund, META. So in your brokerage account, you can now get exposure to the metaverse plays that are publicly traded. And then Epic [Games] has raised US$1 billion to support their long-term vision of the metaverse. These are big, big numbers,” Lakoff said.
Explaining the next progression in NFTs, Lakoff pointed to fractionalized ownership, rental NFTs and NFTs as collateral as some examples.
“Access tokens, token gates is an NFT as your access token so you can access private content, perhaps gated on a private part of a web page, community membership. This has the potential to replace traditional log-in methods, providing you this unique NFT that gives you access to these gated areas.”
A similar adoption, according to Lakoff, is NFTs as identity.
“NFTs as identity — so identity on the Blockchain, a Web3 passport, a DeFi passport, this on-chain credit scoring — all of these things kind of mixed together. You can notice some of these things might be similar to something like an access token. We can start to see how these things play together in a very, very unique way that paved the way for Web 3.0,” Lakoff said.
Lakoff became more passionate when talking about NFTs as financial products that could hold other tokens.
“One is an NFT gift basket, so you have your NFT that acts as a basket, owning all of these different types of assets,” he explained, adding that baskets could contain social tokens and interest-bearing assets all in one place. The significance of the NFT gift basket is that it makes transferring a portfolio extremely easy. “So you have this gift basket, this basket of all these different assets that I can transfer with one click ERC-721 transfer and the entire basket can be transferred to another party,” Lakoff said.
Day 2
The hits kept coming on day two, with a full slate of talks from the community of EthCC speakers on topics ranging from how crypto could help to end poverty to taking DeFi to traditional finance sector businesses.
Highlights:
- Santiago Siri, Founder of the Democracy Earth Foundation, talked about how crypto could help to banish poverty, and discussed how the Proof of Humanity protocol enabled a universal basic income economy that had the potential to subsidize transaction fees for users of the Ethereum network.
Siri said that by 2050, most jobs done by humans would likely have been replaced by artificial intelligence. He said: “Looking into the future, the relevance of universal basic income becomes more important, and we should ask ourselves, ‘Are the machines working for us? Or are we working for the machines?’.”
- Ajit Kumar Tripathi and Rebecca Rettig from AAVE chatted about bringing DeFi to the world of traditional finance. Both speakers concluded that there was enormously increased interest from institutions following last year’s “DeFi summer.” The AAVE duo explained that the yields seen in DeFi were simply too large for traditional financial players to compete against. They would either take to crypto or risk becoming irrelevant.
The main draw on day two was the appearance of Ethereum co-founder Vitalik Buterin, who took the discussion away from DeFi to focus on the blockchain’s potential to reinvent other centralized aspects of society, including social media.
Vitalik Buterin — Things that matter outside of DeFi
Buterin said that Ethereum, over the past few years, had become synonymous with the DeFi space, but urged the community to accept that “the Ethereum ecosystem needs to expand beyond just making tokens that help with trading other tokens … Moving beyond DeFi is not about being against DeFi. I actually think the best applications will combine elements of finance and non-finance.”
Explaining why financial applications had come to dominate the Ethereum space, Buterin reasoned that it was because “finance is just the area where centralized technology sucks the most.”
“I can send you a centralized email and you will get it within one second. And maybe various intelligence agencies will read it, but at least you can read it one second from now,” Buterin said. “International bank wires do not work that way. They’re still notoriously annoying and inefficient. And there are a lot of these extra frictions that persist in the financial system.”
One such area Buterin said he was passionate about was leveraging Ethereum’s blockchain and applications to improve social media. The issues that plague centralized services had created viable options for the Ethereum community to explore mechanisms to combat them, Buterin said.
For example, a decentralized sybil resistance could be developed to combat bot spam accounts. In blockchain, a sybil attack is similar to bot spam account creation, as it involves the attacker creating a large number of pseudonymous identities and using them to gain a disproportionately large influence over the blockchain. One mechanism Buterin suggested was a ”proof of humanity consensus” — a kind of reverse Turing test, to verify that the user was in fact human.
The Ethereum co-founder also warned against the dangers of becoming too greedy when it came to yield in the DeFi space, which he said could have grave consequences for the Ethereum network and draw the ire of regulators.
Day 3
Day three topics ranged from ways to make Ethereum more inclusive and accessible to the social dilemma of public goods and ways in which token economics could provide alternative funding for governments and non-profits.
Highlights:
- Griff Green, co-founder of the Commons Stack, discussed token economics as a better alternative to governments and non-profits for the funding of public goods.
Green, who said that non-profit workers were systematically undervalued, said: “Our mission is to enable communities to design and develop their own micro-economies that reward the creation of public goods.”
- Discussing the values of Web 3.0, Gregor Žavcer of Ethereum Swarm said developers should not compromise on values such as privacy, data interoperability and data sovereignty in order to design fair technology.
“Are there projects that are tokenizing things that they shouldn’t be tokenizing? There’s a slippery slope with how we use technology and it’s moving very fast. For this reason, it’s good to stop, breathe and ask ‘the why,’ and uncover the values that inform our design and are manifested in the technology,” Žavcer said.
On day three we took a closer look at the accessibility and inclusive design of Ethereum, as discussed by Sasha Tanase, a product designer and researcher for the Keep Network. The Keep Network is a protocol that allows public blockchain users and apps to privately transfer and store data in off-chain containers called “Keeps.”
Sasha Tanase — Accessibility: Ethereum for everyone
Tanase spoke about taking Ethereum accessibility to the next level by creating inclusive designs for people with various impairments.
“So what’s inclusive design? Actually, this is a design approach that ensures that places like this building or venues and experiences online and offline are accessible to all people, and it’s agnostic to age, disability and background,” Tanase said, adding that Ethereum needed to be more inclusive and open to all users.
Tanase discussed three types of impairments — visual, motor and dexterity, and color-deficient vision — and how user interface design could cater to each impairment. She walked audience members through her own design process for people with color blindness.
“Well, first of all, we could check all the time if our color schemes are color-blind compliant. I am using a third-party plug-in called Colorblindly. It was built by the Color Blind Association. And actually we can try to avoid these color schemes.”
The final frontier of inclusive design for decentralized apps and Ethereum websites was what could be done with charts and data visualization for blind users.
“So there is a solution created by Highcharts, which is called Sonification, and it’s basically bringing life to the chart with the use of sound. So, what this does is that it uses a musical scale and every value from the chart will get a musical note. So if the value of the chart is lower, you will get a low-pitched note. If the value of the chart is higher, you will get a high-pitched note. And if there is a strict juxtaposition in the chart, the screen reader will make a polyphonic sound,” Tanase said.
Tanase stressed the importance of accessibility in blockchain applications and websites, saying: “Accessibility doesn’t only concern designers, it’s actually concerns developers, product managers [and] CEOs, because all of the users have to have the right to use their product.”
London upgrade and Ethereum prices
With EthCC now in the community’s rear-view mirror, the next milestone is the London upgrade to the Ethereum network.
Ethereum’s London hard fork is an update to the Ethereum blockchain that’s set to take place on Aug. 4, if everything goes to plan. The update will make significant changes to Ethereum’s transaction fee system, which has long been a contentious subject due to congestion on the network that has hosted the vast majority of DeFi and NFT projects — both sectors having grown exponentially over the past year.
Ethereum’s London update will prepare the network’s evolution to Ethereum 2 — a full transition from the proof-of-work consensus model to proof-of-stake. The London hard fork will introduce new Ethereum improvement proposals, which are set to make the blockchain more competitively priced and user-friendly.
As the London upgrade looms, Ether prices have been steadily rising, and many in the crypto community are wondering whether Ethereum has bucked the overall downward trend of the crypto markets.
Ben Caselin, head of research at AAX, an Asia-based cryptocurrency exchange, told Forkast.News he did not see Ethereum breaking its price correlation with Bitcoin and the overall market.
“We have to remember that the major crypto assets move almost in unison, and the largest driver of trend-changing price movements still rests primarily on Bitcoin sentiment, and that includes Ethereum.” said Caselin, “The B Word conference addressed prevalent misconceptions around Bitcoin, but it also cleared some air around Ethereum as a by-product.”
Caselin said that although the London upgrade and other tweaks were all essentially steps towards Ethereum’s switch to proof-of-stake, which could drive optimism and expectations of the cryptocurrency market, “we must not forget that Ethereum is still largely an experiment.”
“During this cycle, as in 2017, Ethereum’s main value proposition lies in versatility,” he said. “It hosts stablecoin projects, NFTs, digital bonds, prediction markets, Web 3.0 initiatives and so on. But that complexity is also its Achilles’ heel, leaving the platform vulnerable to bugs and what I would call ‘dumb contracts’ — essentially smart contracts that are of low quality and that can easily be exploited.”
According to Caselin, for Ethereum to stay on top of the market in the long term, it’s vital that at some point it converges on a clear narrative and set of principles — not something akin to Bitcoin, because that spot is taken, but something that truly distinguishes the platform from other smart-contract platforms.
“This is still lacking today. The promise of Eth 2, beyond short-lived hype, might not be enough to capture mainstream attention over the long term as the rise of competing protocols that will vie with Ethereum in terms of security, performance and scalability is inevitable,” he said.
Rick Delaney, a senior editor at OKEx Insights told Forkast.News that although ETH/USD outperformed the wider market and increased by around 17% on July 21 versus an almost 14% daily increase in the total market cap of all digital currencies, following the B Word conference, there was still a way to go before Ethereum resumed any sort of bull run.
“ETH’s price remains within — albeit at the top — of a larger descending triangle. Should the price continue its breakout, bulls will likely encounter resistance at the 50-day moving average, which currently sits at around $2,170,” Delaney said.
At the time of publication, Ether was trading at US$2,059, up more than 4.5% in the past 24 hours and more than 7.5% for the week. Ethereum has a market capitalization of US$240 billion, and Ethereum dominance stands at 17.4%, according to CoinGecko data.