Ethereum in the Decade of Adoption

Transcript

[applause] >> Hi everyone. I'm very happy to be here. Um I've been at the Ethereum Foundation for close to 5 years. I've been in Ethereum core research for 7 years now. Um in the past year I've been leading the scaling work at the Ethereum Foundation and I'm currently also co-leading the Ethereum governance process, the Orca does process. And I'm here today just to share some reflections. I'm here not on behalf of the Ethereum Foundation. It's really more personal um about uh what I think is this new time period that crypto as a whole and Ethereum is in. And I think actually like this so far has been an absolutely beautiful conference and I think it's

emblematic for this new time period. And what do I mean by this? Well, but for that let's go back first. Um 2014 to 2024 of course where you exactly start is a bit ambiguous. I picked the Ethereum yellow paper, the Ethereum technical specifications as the start of the of of really smart contracts um as smart smart contract blockchains. The idea of smart contract blockchains you could go a year earlier or later. Um and I think really that marked the starting point of something something very new. Like the first few years of blockchains, Bitcoin and Co.

that really was about crypto assets only, cryptocurrencies. And then with Ethereum there was this idea that blockchains can actually be a foundational layer of infrastructure. And so the first 10 years of blockchains really was all about building out the tech stack. That required many zero to ones. I listed a few here. You can list many more like wallets, transaction supply chains, um all all kinds of things um really like you you needed to build up the entire tech stack from the ground up and not just the zero to ones. I I call here zero to ones but but really like bringing all of these individual ingredients to maturity.

And so what does it mean 2024? Does it mean that work is over? No, of course that work continues. The firm foundation, many different entities in the ecosystem continue to build out the tech underneath blockchains, but what has changed is that blockchains really are ready. And in particular, I would say I'd call it the ChatGPT moment. I think I've also heard Timely use the same phrase. Basically and it's it's an interesting mental model because as opposed to AI where there really was a singular moment, the ChatGPT moment where the industry went from infrastructure to adoption, I think crypto went through through a different similar transition, but it was not a single um individual reason. It was this

perfect storm of individual elements that all came together at the same amount moment in time. Um one as you know, I said the tech stack really became ready. Ready for for for real widespread use. The second one of course we are in the US right now. Crypto is really truly global, but the US is a very important place for financial use cases. And so the the shift in the in the US regulatory environment from open hostility to to a very friendly environment of course came at just the the time the tech was ready. And then stable coins. Stable coins really was a slow burn. They started several years earlier already. But at this rough moment in time they really hit PMF for

not just crypto internal use cases. And so take all of these things together and you really had this ChatGPT equivalent moment for crypto. And so I really would say that as of last year crypto as a whole is squarely in well, the decade let's say maybe decade of of adoption. And what does it mean for Ethereum? What role should Ethereum play in that uh in in that world? And for that I basically wanted to answer the question first by saying what is a world that could happen that we don't want? And that's I sketched it out here. So, basically like that that is a potential world that that that crypto could could end up in.

Basically, you have all kinds of different systems. You have some general-purpose chains, some app chains, some chains focus on privacy, some on permissioned use cases. All of those valid, useful, important use cases, but basically in this world they're all just independent of each other in in their separate corners. And then you have to basically build individual links between each each one of them, right? So, like why is that a bad thing? Well, for for several reasons, but the two I wanted to highlight here is one um is the security, right? So, basically in this world we've seen this keeping a blockchain secure and operational live is actually a non-trivial task. There have been numerous failures in the past.

And here every chain has to basically provide its own security and every user, institutional or consumer, has to reason about the security model of of each individual chain that they're interoperating with. But the more important reason why I think that is a bad outcome would be a bad outcome is because of the brittleness of the interoperability, the brittleness of the links, right? Anytime you want to interact, you want to to basically interact across two of these systems, you have to basically custom build a link. You have to build a link per pair of of of of of chains here. You have to build a link per pair of assets, per use case.

Um And that and these links just are very vulnerable. We've seen this time and again that these links can fail. And so, what is the Ethereum answer to this? Like what world and state is Ethereum building towards? And I tried to sketch this out here a little bit. Of course, all of these are like they're more trying to to give the intuition across. But the Ethereum answer is to say, "Look, the customizability of all of these individual environments, that's great. That's exactly what we want to embrace. That is, of course, where the needs are. You can have direct apps on Ethereum.

You can have You can have general purpose chains on top. You can have even things like L3s are being explored. You can You can have privacy zones, permission zones. These can be on the base layer. They can be somewhere else." What makes this different from the picture before is that all of this happens on top of a singular foundational framework. All of this happens on Ethereum. Um now, why is this good? Not just, you know, like I'm an Ethereum fan. Of course, I want this to all be on on Ethereum. But why do I think this is objectively the better world, right? And just to mention, like usually whenever a new technology's adopted, the standards being set, they are usually sticky for many decades to come. So, why is it important to have that this is how the future for the next decades of financial

technology will look like? Well, it comes back to basically the same um points that I just talked about. I put them here in in text. But basically, the first two The The first one is the the most important one. Trustless interoperability on bridging. So, that means here, because all of these chains are rooting back to Ethereum L1, you can basically establish a link between any pair any pair of chains, any pair of or execution systems. Again, it can be apps on the L1 as well. Any Any pair of assets, any type of use case, you can establish a fully trustless link if in a unified way. Now, I want to be fully transparent. This is not how the Ethereum ecosystem quite looks like

today, right? Like this is still aspirational. Um and I will I will say in this age of adoption that we're in now, getting this promise to reality really is an absolute priority. It has to be an absolute priority, but only by being on top of a share chain do you have the potential to to get to that place? And that is clearly like a much superior place in order of to tightly integrate these systems. Uh the second one, also important, shared security guarantees. Uh Ethereum is famous. You know, if if if you if people need to name one thing about Ethereum, it's often like perfect uptime, um perfect robustness, high security.

And by basically like this was the the L2 promise all along basically by by basing all of the system on top of the Ethereum L1, you can propagate the security guarantees of Ethereum into all of these places. And then of course there are other um um supplementary benefits, right? As I said, like you still have the exact same full customizability. Sometimes there's this like misconception that just because everything is rooted on Ethereum L1, it needs to in every single place have exactly the same properties. Right? Like you you need to be fully permissionless, you need to be No, it's of course you mix and match the way you need that for your system. You can build privacy in, you can do whatever you need for your system, you can do on top of Ethereum.

And I think that one is actually really important one. Ethereum L1 as the single entry point, it means that as a user you really only have to understand Ethereum and everything else it comes from there. And for example, if you want to put some asset on chain, well, you only have to speak Ethereum. You put your asset on Ethereum and then from there it will just propagate to wherever it needs to be, it wants to be. And of course if you want to put in restrictions, that's possible as well. So, all in all, right? Like I really think this is a much much better outcome. And then last but not least, I really wanted to mention it here, ETH has not received as much love over the last months, but actually in this world ETH ETH's role really is very very um uh foundational because it is the one

native asset across the on-chain economy. So, that is the way we're trying to go, way Ethereum is trying to go. How is Ethereum trying to get there? And here I wanted to just point out one specific aspect, one specific element of how Ethereum is trying to approach this. And I put a quote uh this is from a tweet that uh from Vitalik from maybe a week or two ago. Uh the quote is the EF, the Ethereum Foundation, is not a center of Ethereum, rather the Ethereum Foundation is one node with a defined purpose alongside other nodes.

And I think I wanted to just like give a little bit of background here. Of course, again, I'm not speaking for Vitalik, not speaking for the Ethereum Foundation, but because I think people have not yet fully appreciated like what the background of of of of this decision really is. I think as I said, we for the last 18 months, maybe, we have been in this non-new time period of adoption. And it really has fundamentally different challenges for the ecosystem and for also for the role of the ecosystem steward, right? That the Ethereum Foundation has historically been. And so, you've seen a lot of changes at the Ethereum Foundation over the last year um in various ways. And as of this year, as of the last few months, kind of like the Ethereum Foundation has made a decision around like how does it

want to approach um this time period and its role in it. And it it is basically um by doubling down on the Ethereum way, the Ethereum way of doing things. And that is specifically instead of bringing it all back into a single entity that owns the ecosystem, it is really about like embracing the decentralization and specifically building up multiple ecosystem stewards, multiple nodes that can help to get the bring Ethereum uh into this future. And so um as maybe over the next weeks and months, you'll hear continued, you know, changes, announcement, all these kind of things. Keep that in mind as a lens of like Ethereum really getting ready instead of basically being

being on a back foot of like oh we are now in the age of adoption it's about like no no the adoption is here. Let's configure the Ethereum ecosystem to really be able to win in this new time period. Um and where does it leave the Ethereum Foundation? Well, I mean of course it will always be the most important node in this multi-node ecosystem and it will always be the guardian of Ethereum's values. And I wanted to maybe have my last full slides before the conclusion um focused on um talking a little bit about the Ethereum values because I do think that sometimes a little bit misunderstood. I've heard the kind of the the characterization of that in a way maybe Ethereum is too I don't know too old school too like ideological too much focus on its values

and I actually think I'm here at least maybe I'm biased but I'm here to tell you it's the other way around. I really really deeply believe that Ethereum's values are deeply deeply synergistic with this vision that I tried to describe to you over the last 10 minutes. And what do I mean by this? I I I picked I picked out two really important values in particular that I wanted to briefly talk about because I think they illustrate this point really really well. The first one is security and um I already talked about it a little bit earlier like there's these things like the 100% uptime through the redundancy sometimes painful redundancy right? Like I've I've been moderating this the the this all quarters process we have roughly 10 different Ethereum clients. It's not it's not always so easy but that is

exactly why Ethereum has this promise that that no other chain can in the same way give. And to maybe already go to the third point there especially in these coming next years right? Like I think by now it's almost it's it's a consensus view that like especially the next few years will be maybe the the toughest in the history of of of cyber security specifically because of this wave of AI capabilities but the systems are not yet hardened by those same capabilities. So, there will be a time period during which it will be like a in an arms race until we get to new equilibrium. And Ethereum is by far the best positioned of all blockchains to to make it safely through that time period.

And then a second big big topic right now unrelated of AI, there are still big topics other than AI these days. Quantum, I also wanted to briefly mention it. It's another example of how Ethereum's in a way insistence on these like boring nerdy like really really like deep conviction topics pays off as well. Some of you might remember I think it's by now a year and a half ago or something when Justin Drake first announced like the beam chain on for Ethereum. Like it was called that back then and people were a little bit confused like it was a heavy focus on post quantum back then there was not a big topic.

Like why does Ethereum care so much? Well, Ethereum cares a lot because you need to these these topics often these like big technological shifts they need time and now it turns out every other chain out there scrambling. Like what is the answer to post quantum? Like it's it's a it turns out it's hard. It's not so easy. Ethereum has a clear plan. Ethereum is working towards that plan. We have a timeline. We will get there in time. I I don't think there's any other chain that I have like full confidence. I think many of them will make it but like they all have to scramble. Ethereum does it the proper way and I think that is time and again Ethereum insists on doing it its way the proper way. It sometimes in the short term looks a bit confusing and then I think in the in the fullness of

time it makes sense like why the Ethereum values specifically for something that wants to be the substrate the foundational layer of all of blockchain why that really is the right and the only responsible approach. And the other one I wanted to mention it's maybe a little less salient than security is neutrality. Neutrality is a bit of a strange topic topic. We also often say credible neutrality which is I guess just doubling down on the concept. And so that's things like censorship resistance, right? Censorship resistance just like security, it comes from this like this like very like, you know, cypherpunky, you know, I we want to make sure that even if there is World War ongoing and there's rogue nation states and they all like the entire force of the world is trying to shut me

down shut me up and like I can still freely speak on Ethereum. Okay, that's you know, like that's this like wild we you know, dream. But why why is that also practically important? Well, I mean, go talk to any financial institutions and choose one and ask them, "Hey, do you want to maybe put all your business flows on chain?" Well, one thing they really don't want is that they have some sort of time critical flow and all of a sudden for some reason for minutes hours days they are they are not able to actually interact with the system, right? And the system goes goes off the rails and goes wrong and and they basically have no way of of of stepping in. That's just a non-starter, all right? And like there is this kind of leap of faith if you go into these um

into these on-chain systems where basically everything is rule-based. Like you can't just go and edit a database and and and fix a mistake. Like you really need properties like censorship resistance. And all of a sudden it's not so cypherpunk. All of a sudden it actually is very real, very useful. Um and the other one sounds maybe a bit strange, strategic reliability. What do I mean by this? Well, um this is this again comes back to this vision of no one controls Ethereum. What well, why is that also practically important? Well, uh I the other day I read an article about Amazon and how for them, for example, it's like really really important. They have this philosophy, uh never be downstream of some central choke point of technological choke point like, you know, Nvidia GPUs. They built

their own training um stack uh back before then the the the duopoly of of of AMD and and Intel with CPUs. They they built their own um uh there as well. They are now building their own satellites. Like basically anytime there's a risk that they might be dependent on some sort of central point of control that that that is upstream of them, they basically like they choose the very costly option of of basically building up an alternative, trying to, you know, it's it's this it's this old principle of of commoditize your complements.

So, again, a very cypherpunk value, but like Ethereum basically I would call it the Amazon test, right? Like a very like, you know, like a boring big tech company like Amazon, would it be comfortable putting all like its business flows, its like economic flows onto a central platform like Ethereum? Where it basically then is exposed, it's vulnerable to Ethereum's behavior, right? And the answer, if the answer is yes, if Ethereum is neutral enough that entities like that and at the same time like the small the the the individual somewhere in a country where it's it's suppressed, where when both the individual and Amazon can trust that Ethereum can never rug them, that Ethereum will always have the same properties, the same guarantees,

Ethereum basically is useful across the spectrum. And so, I really believe, deeply believe that principle equals practical for Ethereum. And so, just like a conclusion slide to leave you with. So, we are now, I think, in the maybe decade of of adoption for crypto, and Ethereum's plan is pretty simple. One, maybe I wasn't so I didn't focus on this here in this talk, but continue the like principle infrastructure work, things like post quantum, other upgrades. Um Ethereum has always been the leader on this front, continue this work, that's crucially important, but two, really focus on establishing Ethereum as this shared settlement layer with ETH specifically as the native asset.

And I actually think, you know, I'm maybe that's me personally, I really think ETH its best time is yet to come. Um and then the other two third again more on this in the near future set up additional ecosystem stewards like really help decentralize the ecosystem to make sure everyone can tackle this future and can help Ethereum succeed together in this. And the last one is double down fully double down on the values that make Ethereum unique but also double down on leveraging those values. Those values are Ethereum's unique potential but we also now have to make sure and that's for example this

interop example we have to make sure that the promise of these values is everywhere and fully fulfilled. And I think if we if we follow this four-step plan you know dot dot dot profit I really think Ethereum is going to be in a in a great spot and I think not just Ethereum but I really think it's it really makes a difference for the world for the next decades whether we are in a fragmented outcome or whether Ethereum can can can achieve what it set out to do so. I think we're in a great spot there. Awesome. Thank you very much. >> [applause]