Reflections on OFR Partner’s Attendance at EthCC VC and ZK Everywhere, Ethereum Takes a Big Step

Reflection on OFR Partner's attendance at EthCC VC and ZK Everywhere, Ethereum advances significantly.

Author: JX, OFR Partner

I made two Meme pictures to represent my most intuitive experience at EthCC, which also reflects the current situation of the industry:

There are too many crypto VCs, to the point where a side event organized by a unicorn project with a private funding round exceeding a valuation of 1B implemented a policy of “No VCs allowed”, unfortunately, these “dogs” are allowed to attend. Therefore, VCs are not as…

Almost all projects that started developing applications six months ago, whether it’s games, NFTs, or social media, have expressed that they have started working on the underlying infrastructure, which is Infra, and every pore is using ZK, very smooth. Don’t believe me? Come and try our new Odyssey.

What’s New

During the EthCC conference, many projects announced their updates and progress. Here are some projects that I personally think are worth paying attention to:

Chainlink CCIP – “Encapsulation”

Chainlink, the leader in the middleware sector, announced its foray into cross-chain direction during the EthCC conference on July 20th, following its Oracle track. Its cross-chain interchange protocol, CCIP, has officially started and supports the testnets of Ethereum and four main EVM L2 chains. Interestingly, this version is not called a testnet or beta version, but referred to as the Mainnet Early Access phase. Let’s appreciate the art of language.

CCIP overall architecture diagram

The overall architecture is divided into off-chain and on-chain parts. The off-chain part uses Chainlink’s DON node network to submit and verify cross-chain transaction Merkel Proofs, ensuring the finality of transactions on the original chain and meeting the risk control requirements of active risk management (ARM) nodes for cross-chain transactions.

If you are familiar with cross-chain projects, you might find the architecture in the above diagram familiar. The diagram below shows the structure of Layerzero, which recently reached a valuation of 3 billion USD:

Layerzero structure diagram

Off-chain part: Relayer corresponds to Executing DON, Oracle corresponds to Committing DON;

On-chain part: Communicator corresponds to Router; Validator and Network correspond to on/off ramp. Chain A and Chain B correspond to two token pools.

The two main cross-chain architectures can almost be matched one-to-one, with the difference being that Chainlink’s CCIP adds an additional layer of Rust implementation of Chainlink contracts and independent nodes for independent verification of cross-chain transactions, and more importantly, Layerzero currently uses Chainlink as its Oracle.

In the latest trendy language, you can say that Chainlink has “encapsulated” Layerzero.

Uniswap X – “Decoupling”

The Uniswap team is slow in token empowerment but very active in product innovation. After announcing the product plan for Uniswap V4 in June, they launched a new product called Uniswap X on July 17th. To give an imperfect analogy, Uniswap V4 is like Apple releasing a new generation of iPhone, with the previous product being Uni V3, and Uniswap X is like Apple launching a new product line similar to iLianGuaid.

Uniswap X Product Architecture Diagram

The most core part of Uniswap X is to outsource the transaction routing and aggregation functionality to a new participant called Filter. Filter works together with Uniswap Router to execute order taking and order matching tasks. Filter can be a transaction aggregator like 1inch, a market maker, an individual, or even an MEV searcher. In this way, due to the existence of a bidding mechanism, the potential MEV loss of traders will be compensated during the bidding process, so the value of MEV will be internalized.

This decoupling of system components to reduce the complexity of the core system is also the essence of Uniswap V4. Uni V4 decouples the permission to create liquidity pools from the core system into a new role called Hook, which defines personalized rules for liquidity pools, thereby meeting the flexible needs of users while maintaining the stability of the core system.

The same system design logic is also part of Ethereum’s Rollup-centric roadmap, gradually placing transaction scalability into various Rollup L2 solutions and continuing to decouple data availability, which has also provided ample space for the birth of numerous L2 and DA projects.

Of course, Uniswap X also brings important functional improvements to enhance the user trading experience, such as Dutch auction orders, cross-chain transactions, and the transaction fee optimization module for Permit 2. It is worth mentioning that Uniswap X defines the atomic trading object as a signed order, setting the tone for an intent-centric on-chain transaction model.

Towards the Modular Blockchain Era – Endgame

With many Layer 2 solutions going live on the mainnet this year and announcing important milestones during the EthCC conference, it can be said that Ethereum’s era of modularity has officially arrived.

· Linea, owned by Consensys, goes live on Alpha Mainnet

· Mantle, incubated by Bybit, goes live on Alpha Mainnet

· Zero Knowledge Proof solution proposed by O(1) Labs for OP Stack is selected

· Following OP Stack and Arbitrum Orbit, Starknet also released its Starknet Appchains

Since around 2020, with the establishment of Ethereum’s Rollup-Centric roadmap, the trend of Ethereum’s modularity has been foreseeable. This Ethereum scaling approach, which involves Rollup handling the transaction load, breaking down the monolithic chain functionality components, and distributing them to a modular chain system, has been referred to as Ethereum’s Endgame by Vitalik. (Later, the term Endgame became a hot term in Web3 and was frequently used, such as MakerDao)

In the future, Ethereum will not only exist as a chain or L1, but as a secure DA layer and consensus layer solution. As Ryan, the founder of Bankless, said, “Ethereum’s main chain is not for users, but for the chain,” or more specifically, for different Rollups and Raas platforms.

In the modular world, it is no longer simply distinguished as L1, L2, or L3 fractal scaling; but rather various combinations of execution layers, DA layers, and consensus layers:

A modular ecosystem centered around Celestia

The focus of blockchain infrastructure builders in the future will also shift from various types of L2 to various components of modular blockchains, as can be seen from the changes in speakers at the Modular Summit over the past year: more decentralized sorters, faster execution layers, frameworks that adapt to different types of Rollups, and so on.

In addition, there are many other new releases at this EthCC conference, such as Lens V2 and Gnosis Card, etc. Since the conference still focuses on infrastructure, this article will not go into too much detail.

To Be Continued

Vitalik’s speech at the main venue this time is about the development history of account abstraction, and there isn’t much new stuff, but his speech on aggregation at the Modular Summit, in my personal opinion, is more interesting. He mentioned that one of the great advantages of ERC 4337 is that it can use BLS aggregated signatures, which greatly reduces the size of transactions and saves Ethereum’s block space. Similarly, there is a lot of work being done to improve efficiency using SNARK proofs for aggregation. The theoretical and technological progress in aggregation may be a breakthrough for future Rollup upgrades.

One of the largest side events at EthCC, the Modular Summit, had a whole day dedicated to discussing PBS (Proposer-builder seLianGuairation), which is also a well-known topic. The Ethereum Foundation’s R&D roadmap can be summarized as the heart-shaped diagram below, divided into two main categories: in-protocol and out-protocol. The specific content is complex, and I can only explain it in a separate article in the future.

Finally, let’s look back at the “past” and at the EthCC conference in 2022, Vitalik’s expectation for Ethereum is to eventually “Settle Down,” meaning that Ethereum achieves enhanced system compatibility, reduced complexity, and ultimately a balanced and stable long-term operation. If, as Vitalik said, Ethereum was at the starting point of a steep climb last year, then looking at it this year, Ethereum has taken a big step towards the summit.

(Who says the view from the summit is Cosmos’? Speak up)