The success of Web3 is still intimately tied to the Ethereum Ecosystem. Yet, the rise of Ethereum as the blockchain of choice for thousands of Web3 devs looking to build on top of it is under siege. Internally, more usage combined with the slow progress of Eth2.0/Consensus Layer has opened the door to legitimate complaints about slow transactions and high fees.
3. INTRODUCTION
INTRODUCTION
I
In 2022, the success of Web3 is still intimately tied to the Ethereum Ecosystem.
n 2022, the success of Web3 is still intimately tied to the Ethereum Ecosystem.
Yet, the rise of Ethereum as the blockchain of choice for thousands of Web3 devs
Yet, the rise of Ethereum as the blockchain of choice for thousands of Web3 devs
looking to build on top of it is under siege.
looking to build on top of it is under siege.
Internally, more usage combined with the slow progress of Eth2.0/Consensus Layer
Internally, more usage combined with the slow progress of Eth2.0/Consensus Layer
has opened the door to legitimate complaints about slow transactions and high fees.
has opened the door to legitimate complaints about slow transactions and high fees.
This situation opened another door to competing L1 chains that are taking both talent
This situation opened another door to competing L1 chains that are taking both talent
and financing away from Ethereum. L2 bridges arrived to help, but they are not a
and financing away from Ethereum. L2 bridges arrived to help, but they are not a
permanent fix.
permanent fix.
The following diagrams were drawn in order to understand the Ethereum network
The following diagrams were drawn in order to understand the Ethereum network
in general and the DeFi ecosystem in particular, so we can ID possible paths forward.
in general and the DeFi ecosystem in particular, so we can ID possible paths forward.
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4. (Web3.js, Node.js, Wallets, Remix, Truffle...)
(Web3.js, Node.js, Wallets, Remix, Truffle...)
Geth Node Networ
Geth Node Network
k
(via JSON-RPC)
(via JSON-RPC)
Mining Networks
Mining Networks
Utility Networks
Utility Networks
DeFi Ecosystems
DeFi Ecosystems
Layer1
Layer1 Network
Network
(Full nodes: EVM, Parity, Infura, blocks)
(Full nodes: EVM, Parity, Infura, blocks)
User & Test Networks
User & Test Networks
(Oracles, smart contract IPFS, swarm, & whisper nodes)
(Oracles, smart contract IPFS, swarm, & whisper nodes)
(see last page)
(see last page)
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3109.io
5. B
BOTTLENECKS
OTTLENECKS
(Ref: D1)
(Ref: D1)
Ethereum’s Layer 1/execution layer speed/fee problems are well known. Unfortunately,
Ethereum’s Layer 1/execution layer speed/fee problems are well known. Unfortunately,
per Vitalik - POS may not come with any Layer1 speed changes.
per Vitalik - POS may not come with any Layer1 speed changes.(R1)
(R1) Also, POW mining central-
Also, POW mining central-
ization will migrate to staking centralization as nodes will need a combination of staked
ization will migrate to staking centralization as nodes will need a combination of staked
ETH & up-time expectations.
ETH & up-time expectations.
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3109.io
6. BOTTLENECKS CONTINUED
BOTTLENECKS CONTINUED
Also POS has no native scalability upside - that job belongs to sharding. So,
Also POS has no native scalability upside - that job belongs to sharding. So,
in a sense, POS consensus is essentially trading POW counter-parties, that
in a sense, POS consensus is essentially trading POW counter-parties, that
will still rely on outside (ie. L2) projects for performance gains.
will still rely on outside (ie. L2) projects for performance gains. (Ref: D2)
(Ref: D2)
T
Trade-offs are inevitable in technology, but not permanent. Ethereum’s leadership
rade-offs are inevitable in technology, but not permanent. Ethereum’s leadership
is transparent about its’ goals which are still driven by decentralization.
is transparent about its’ goals which are still driven by decentralization.
Core Dev is a bottleneck, but not from a tech stand-point, but from a man power
Core Dev is a bottleneck, but not from a tech stand-point, but from a man power
one. Slow progress & chronic delays make that point. In the rush to build dapps
one. Slow progress & chronic delays make that point. In the rush to build dapps
and forked tokens, dev talent migrated to other chains or to services closer to
and forked tokens, dev talent migrated to other chains or to services closer to
the end-user .
the end-user .
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8. DAPP NETWORKS
DAPP NETWORKS
Dapps are at the heart of Ethereum’s growth and pave the way for its’ future; but
Dapps are at the heart of Ethereum’s growth and pave the way for its’ future; but
dapp teams need to be run like Fintech teams – here is why. Best practices keep costs
dapp teams need to be run like Fintech teams – here is why. Best practices keep costs
down and ship faster. Web3 is till in speculation mode due to a lack of standards
down and ship faster. Web3 is till in speculation mode due to a lack of standards
–
– including the double-edged sword of regulation.
including the double-edged sword of regulation.
Open source has always had a problem with consistent focus, that’s why it is
Open source has always had a problem with consistent focus, that’s why it is
often co-opted by centralized organizations. Case in point RedHat Linux. Even
often co-opted by centralized organizations. Case in point RedHat Linux. Even
Ethereum has the Enterprise Alliance and sovereigns are buying Bitcoin now.
Ethereum has the Enterprise Alliance and sovereigns are buying Bitcoin now.
Blockchain is a never ending rabbit hole of learning, testing, rinse, repeat. If you
Blockchain is a never ending rabbit hole of learning, testing, rinse, repeat. If you
are a problem solver you are used to this, but you are in a very small minority.
are a problem solver you are used to this, but you are in a very small minority.
Thus, Fintech UX/UI is useful to Web3 as is Agile/Scrum project management.
Thus, Fintech UX/UI is useful to Web3 as is Agile/Scrum project management. (Ref D3)
(Ref D3)
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3109.io
10. DEFI ECOSYSTEM
DEFI ECOSYSTEM
The DeFI ecosystem started with DAI in 2015, & the waves of talent & capital
The DeFI ecosystem started with DAI in 2015, & the waves of talent & capital
streaming into it have no rival since.
streaming into it have no rival since.
The ability to grow via experimentation had more upside than downside. Yes
The ability to grow via experimentation had more upside than downside. Yes
there were massive failures like UST & hacks at Cream, Beanstalk, &
there were massive failures like UST & hacks at Cream, Beanstalk, &
Compound; but those issues only highlight the point that protocol standards
Compound; but those issues only highlight the point that protocol standards
and outside regulation are needed in order to get more liquidity into the market,
and outside regulation are needed in order to get more liquidity into the market,
and thus more adoption.
and thus more adoption.
Decentralization is not just about trust in the code, it’s also about trust from the
Decentralization is not just about trust in the code, it’s also about trust from the
legacy world that operates alongside it.
legacy world that operates alongside it. (Ref D4)
(Ref D4)
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3109.io
12. ADOPTION
ADOPTION
Earlier this year Vitalik spoke to Bankless and mentioned Eth 2.0/CL was at the half-
Earlier this year Vitalik spoke to Bankless and mentioned Eth 2.0/CL was at the half-
way mark
way mark (R2)
(R2). He should know time waits for no one in the tech world. Look at Nokia,
. He should know time waits for no one in the tech world. Look at Nokia,
AOL, and MySpace.
AOL, and MySpace.
You will find projects on 3109.io that will ship blockchains this year with Eth 2.0
You will find projects on 3109.io that will ship blockchains this year with Eth 2.0
feature set built-in, yet the original hopes to roll-ouy in phases with no definitive
feature set built-in, yet the original hopes to roll-ouy in phases with no definitive
dates, again.
dates, again.
In 2022 crypto failed to decouple from the fiat markets and Ethereum owns that
In 2022 crypto failed to decouple from the fiat markets and Ethereum owns that
problem more than Bitcoin. ETH gave the world EVM, which gave blockchain utility, yet
problem more than Bitcoin. ETH gave the world EVM, which gave blockchain utility, yet
here we are nearly 10 years in and yesterday’s problems are still today’s problems.
here we are nearly 10 years in and yesterday’s problems are still today’s problems.
Ethereum deserves to succeed, because it’s mission has not changed, but it must be
Ethereum deserves to succeed, because it’s mission has not changed, but it must be
ultra critical of itself to survive extremely smart and well financed competition. It
ultra critical of itself to survive extremely smart and well financed competition. It
is literally now or never. Existing Fintech can bridge the fiat world as powerful
is literally now or never. Existing Fintech can bridge the fiat world as powerful
allies, but Ethereum needs to reboot in order to take full advantage of those bridges.
allies, but Ethereum needs to reboot in order to take full advantage of those bridges.
Only Ethereum leadership and the core devs can do that. No other group has the
Only Ethereum leadership and the core devs can do that. No other group has the
Knowledge or power to decide the fate of this chain.
Knowledge or power to decide the fate of this chain.
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3109.io
13. CONCLUSION
CONCLUSION
“
“One of the great mistakes is to judge policies and programs by their intentions rather
One of the great mistakes is to judge policies and programs by their intentions rather
than their results.”
than their results.” - Milton Friedman
- Milton Friedman
Web3 cannot survive on speculation alone, it will need useful products that your typical
Web3 cannot survive on speculation alone, it will need useful products that your typical
iPhone & Android user will love. That is billions of people without the patience or time
iPhone & Android user will love. That is billions of people without the patience or time
to learn MetaMask, Etherscan, or calculate gas fees. The whole ethos of crypto as currency
to learn MetaMask, Etherscan, or calculate gas fees. The whole ethos of crypto as currency
has nearly disappeared from reality.
has nearly disappeared from reality.
IT is a ruthless environment where projects ship on time & on budget or someone loses
IT is a ruthless environment where projects ship on time & on budget or someone loses
their ability to pay their mortgage & feed their kids.
their ability to pay their mortgage & feed their kids.
Urgency is key & time is running out.
Urgency is key & time is running out.
The Ethereum Foundation should create a strategic plan with tactical KPIs – one
The Ethereum Foundation should create a strategic plan with tactical KPIs – one
of which is core dev manpower. The focus is experienced Go, Rust, Python, JS devs, &
of which is core dev manpower. The focus is experienced Go, Rust, Python, JS devs, &
Agile/Scrum cat herders. If that’s a problem, they should open aN internship program at
Agile/Scrum cat herders. If that’s a problem, they should open aN internship program at
Stanford, MIT, & the like. Find a list of university programs
Stanford, MIT, & the like. Find a list of university programs here
here.
.
The best tech teams understand automation is king & abstraction is queen.
The best tech teams understand automation is king & abstraction is queen.
Adoption is checkmate.
Adoption is checkmate.
3109.io
3109.io
14. Learn more about Web3 at
Learn more about Web3 at https://3109.io
https://3109.io
REFERENCES
REFERENCES
●
R1:
R1: https://blazetrends.com/vitalik-buterin-ethereum-probably-wont-get-any-faster-than-this/
https://blazetrends.com/vitalik-buterin-ethereum-probably-wont-get-any-faster-than-this/
●
R2:
R2: https://open.spotify.com/episode/52iY04NvyN9uaahNfNJy1t?si=2e03f8340f6d4c3a
https://open.spotify.com/episode/52iY04NvyN9uaahNfNJy1t?si=2e03f8340f6d4c3a
●
R3:
R3: https://www.ethereumcatherders.com/about/
https://www.ethereumcatherders.com/about/
●
D1:
D1: https://wavegp.com/ethereum-research-paper/
https://wavegp.com/ethereum-research-paper/
●
D2
D2:
: https://medium.com/the-5th-p/what-is-sharding-223cc5d3ef6f
https://medium.com/the-5th-p/what-is-sharding-223cc5d3ef6f
●
D3:
D3: https://loanscan.io/
https://loanscan.io/
●
D4:
D4: https://dappradar.com/defi
https://dappradar.com/defi
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3109.io