Saturday, June 10, 2023
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Vitalik Buterin Says High Ethereum Fees Might Be Gone Even Before ETH 2.0

Ethereum (ETH) Co-founder Vitalik Buterin brought his new proposal to the table that could make high fees on the network a thing of the past sooner than initially expected.

Summarising his ETHOnline Kickoff Summit presentation last Friday, Buterin wrote in a Twitter thread today that his proposal for Ethereum 2.0 is “not “rollups instead of sharding”, it’s “rollups on top of sharding.”

Rollup is a scaling technique that keeps transaction data on-chain, in a compressed form, but the computation is pushed off-chain. Meanwhile, sharding divides the blockchain’s nodes into smaller groups, known as ‘shards.’ Rather than validating the same transactions at the same time, different shards then validate different sets of transactions, thereby increasing the number of transactions that can be processed per second.

Buterin added that “rollups are already here or coming soon even before sharding, and rollups without sharding still offer that 100x increase in throughput. So get on a rollup today!”

With the network’s rising popularity, as well as the decentralized finance (DeFi) boom, things are getting increasingly crowded, and the way the network deals with this currently, said Buterin, is with higher fees – which recently hit a new all-time high.

“The [layer 1] is nearly unusable for many classes of applications,” wrote Buterin, “and there’s no non-[layer 2] path that can get us to scalability in the short-to-medium term.”

Layer 1 (L1) is the base protocol (the Ethereum blockchain), while Layer 2 (L2) is any protocol built on top of Ethereum.

It is Phase 1.5, which is an interim update, or ETH 1.0 to ETH 2.0 merger phase, when a scalable proof-of-stake (PoS) network could already be reached instead of waiting until Phase 2, by using shard chains as data availability layers and rollups as the execution environments instead of the shards. Or as Buterin wrote in a recent post: “phase 1.5 and done.”

He offered a scaling roadmap for which he said encompasses the next 1-2 years and includes “combining the scaling mechanism of sharding with the scaling mechanism of rollups.”

At pixel time (11:15 UTC), ETH trades at USD 352 and is up by 1% in a day, trimming it’s weekly losses to 2%.

Learn more: Bitcoin And Ethereum Scale Slower Than Cryptoverse Grows


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