This article collects the on-site review experience of this ETHCC from BlockBeats reporters and several encryption industry practitioners, including Mippo from Blockworks, David Hoffman from Bankless, and davidev.eth, vice president of product at Polygon Labs. By summarizing the review of the activities of this ETHCC Paris, crypto users who did not go to the scene can also experience the optimism that is undercurrent in the bear market. According to the on-site experience of several encryption industry participants, ETHCC showed an optimistic mood of "overall improvement".
Many participants felt the enthusiastic developer atmosphere, and saw many applications that solve key problems, and the infrastructure is also developing in a good direction. David Hoffman of Bankless feels about ETHCC that "the underlying performance optimization is ready, waiting for the bull market and the arrival of users." David Phelps, the founder of ECO DAO and Jokerace, said that ETHCC made him believe for the first time that cryptocurrencies will succeed and can create Create better applications than the Internet.
In addition, these ETHCC participants also mentioned some possible future trends in the encryption industry. BlockBeats extracted the following tldr:
1) The encryption industry will usher in the Ethereum for the L2 summer (Ethereum for the L2 summer) . Multiple L2s have issued their own SDKs for extending the new chain. Although the strategies are different, they will all produce a result based on the L2 issued The chain is like generating a web page based on HTTPS, and eventually the application chain initiated based on Ethereum will be as many as today's Internet HTTPS web pages.
2) Customized L2 application chain has become the mainstream, but for independent developers, this is still a choice with high capital investment , which requires high fees and operating costs in the early stage, so developers with insufficient funds can choose In the way of "cooperative chain" , Gitcoin has already launched the public goods network PGN, and all application developers who join can obtain the revenue share from the ranker based on the application-related indicator data.
Related reading: " Interpreting the new paradigm of public goods donation, how does Gitcoin rely on PGN to be self-sufficient?" "
3) The encryption industry will usher in the post-token era , and this paradigm is taking effect on a wider scale. This paradigm is not an anti-coin, but a complement to tokens. Nocoin can advance a political structure where plutocracy no longer dominates the community, as on-chain data itself can serve as the basis for building social and reputation profiles, thereby providing a better basis for exercising governance rights.
4) Zero-knowledge proofs can unlock the potential of cryptocurrencies and achieve mass adoption in the three core areas of privacy, provenance, and reduced computing costs. Among them, ZK's realization of privacy is the most powerful way for developers to monetize in the encryption field, and general engines and markets like Risc Zero can greatly reduce computing costs, which will be a game changer in this field.
5) Instadapp, Patch Wallet, and Biconomy are challenging Safe's early lead in contract wallets. EIP-7212 will unlock more content, and a better user experience is coming.
6) Ethereum L1 will not monopolize the definition of EVM. L2 is preparing to expand EVM (EIP-7212) with more functions . We look forward to the joint efforts of Polygon, Arbitrum and Optimism to push EVM to a more user-friendly direction.
But at the same time, ETHCC also revealed some problems in the encryption industry:
1) L2 scalability has entered the strongest moment in history. The underlying infrastructure is developing rapidly. L2 has launched AppChain SDK together, but there is a lack of AppChain builders and users . The missing piece of the puzzle is AppChain builders and block space consumers (aka applications). Davidev.eth, vice president of products at Polygon Labs, believes that L2 still lacks functions for enterprise users.
2) L2 rollups cannot interoperate, making L2 look more like a "walled garden" than in the past . But this situation is an opportunity for builders and market makers.
3) The builder tends to be centralized. Whether it is user cross-chain transaction execution or participation in shared sequencer services, strong financial support is required. This is an opportunity for large hedge funds, but it is uncertain whether it is a good thing or a doubt for the entire crypto community.
4) The trend of homogenization of encrypted products , including decentralized stable coins, UniswapX third-party fillers, and L2 application chain infrastructure, has fierce competition in multiple vertical application fields. Davidev.eth, vice president of product at 0xPolygon Labs, predicted that Uniswap and DAI will dominate their respective markets. And LayerZero has gained a firm foothold, and it is difficult to be replaced by similar products like Chainlink CCIP.
5) The honest majority trust assumption accelerates economic inequality and is currently the root of all problems in on-chain communities (DAO and NFT communities).
In addition, at this ETHCC, a general consensus among most participants is that although the underlying infrastructure is ready, there is a lack of corresponding applications/application chains. Bankless David Hoffman mentioned the consumer application - Gnosis Pay, in addition to , davidev.eth, vice president of product at 0xPolygon Labs, mentioned some new things that have not yet been launched but have potential: ENS + POAP combined with near-field communication (NFC) gameplay, Paulygon, the first Quest-based customized NFT project on Polygon, may use To ERC-6551 (few); Interop may change the overall pattern of expansion. And I am very much looking forward to the arrival of EIP-7212 , which will expand more functions for L2 EVM and unlock more valuable functions for wallet abstraction.
Related reading: "Gnosis Card: The first Visa debit card tied to a wallet is coming"
Nader Dabit, the founder of Developer DAO, directly opened the complaint mode , thinking that the infrastructure protocol is overheated and no one has developed usable products. ETHCC gives him the feeling that everyone is talking, discussing assumptions and ideal situations, but no one is building actual products. He argues that "everyone is building their own slightly different infrastructure protocol, and the vast majority are actually building any application that runs on all of that infrastructure." There are products that can really be applied to people.
The following is an excerpt compilation:
1. Mippo (Blockworks): Although it is a bear market, the atmosphere is not "bear" at all
1) The cost of rollups DA is reduced, and the application chain takes off
Traditionally, rollups DA solutions have been focused on Ethereum, which is not ideal for a number of reasons, but the main one is high cost. Today, DA has become the largest cost overhead for most rollups.
What's more, DA is not a fixed cost (so that it cannot be amortized as the user base grows), DA cost is variable and scales linearly as usage increases. As a result, only large rollups with sufficient funds can afford them.
But that's about to change. My guess is that change will come within 6 months. There are several viable solutions in the works, including EigenLayer , Celestia , Avail and Espresso Systems currently in development. It's a good start, but it's only the beginning.
Competition in the data availability layer will significantly lower the barrier to entry for new rollups. If it goes well, it is predicted that in the next 18 months, we will see the explosion of various application chains based on ZK or OP Stack.
The translation is, cheap DA + modular application chain = take off.
2) Rollups lack interoperability
Interoperability between rollups may never be resolved. OP Stack, ZK Stack, and Arbitrum Orbit are all toolkits for enabling application-specific rollups using modular, interoperable components.
These allow interoperability between application-specific rollups, but the reality is that they cannot interoperate with each other.
I like this architecture very much, and I accepted the application chain paper pioneered by Cosmos very early. The vision outlined by Optimism's "hyperchain" and ZK Credo feels like an extension of this idea. It's all good.
That said, it seems to be a consensus (if ever) that interoperability between L2s won't be possible for some time. There are some technical reasons (the contract needs to be embedded on Ethereum) and some strategic reasons (the team wants to limit activities to their own ecosystem).
To be honest, I'm not sure if that's a bad thing. But without interoperability, L2 does look like a more "walled garden" than in the past . This can be a problem or an opportunity. There are two kinds of winners here, though: builders and market makers.
3) Centralization of builder
If L2 is not interoperable, and no one trusts the bridge anymore, there is an opportunity for large hedge funds to step in. Users still need to perform cross-chain transactions, while market makers can provide this service. This means that what the market maker is doing now is the work of the bridge.
The inevitable rise of large centralized builders mainly comes from two driving factors:
.Wide adoption of Intents
.roll ups shared sorter
All of these changes will drive the need for abstraction, and builders are obviously very good at this.
Intents allow users to specify complex cross-chain preferences, all of which are executed instantly. Dapps do this by assigning user preferences to market participants (market makers/builders). DEXs such as CoW Swap and UniswapX are already doing this. I expect more projects to follow.
To participate in the shared sequencer service, participants also have a large amount of capital requirements.
A large builder with strong financial resources is required. The sorter can only guarantee packing, not execution. To realize the promise of Shared Sequencer (SS) (composability and cross-domain MEV), we need a centralized builder that can be plugged into it.
Again, I'm not sure if this is a good thing or a bad thing. My opinion is that the community believes that the benefits of a large centralized builder outweigh the disadvantages. As long as you can have decentralized, commoditized validators, this is an acceptable compromise.
4) ENSHRINING IS BACK
Historically, Ethereum has been cautious about adding embedded consensus at the protocol layer.
However, that may be starting to change. In his "Account Abstraction" talk, Vitalik himself acknowledged that some level of embedding might be necessary. I see similar sentiment in other areas of Ethereum, including the L2 prover/orderer split.
When asked about "Eigenlayer will be enshrined", founder Sreeram Kannan said in a Bell Curve interview that this is the goal of the agreement. Ethereum has clear benefits, but also clear risks.
5) This is not a typical bear market event. A typical bear market event is characterized by low attendance and silence.
The ETHCC activities this season are completely different from the bear market atmosphere. This is an event about solving key problems. Viable solutions are not only proposed, but are being launched. Infrastructure is moving in the same direction. In other words: progress is being made.
2. David Hoffman (Bankless): The underlying performance optimization is ready, waiting for the arrival of the bull market and users
1) Before the next bull market comes, Web3 is fully prepared for computing and low-cost storage.
This is mainly reflected in the optimization progress of various data availability solutions .
Among the transaction fees of the Rollup expansion plan, the data availability fee is the largest expenditure cost. And EIP4844 and alternative data availability solutions reduce the cost of block space on Ethereum to unprecedented cheapness.
The arrival of the Dencun upgrade, which eventually merges into EIP4844 (aka protodanksharding) into the consensus layer will introduce a massive scalability upgrade, which will allow us to have cheaper block space "blobspace" on L1, close to the economic resources of cryptocurrencies The theoretical minimum value of the cost.
Ethereum is not the only protocol optimized for low-cost data availability. Celestia, Avail, and EigenDA are general solutions for data availability (meaning that DA solutions can be extended beyond Ethereum), which can scale blockchain performance to an unprecedented degree.
In addition to data availability, Espresso, through its partnership with Eigenlayer, will focus on optimizing the service of the shared ordering layer to alleviate the problem of centralization of the orderer.
In addition, zkSync released an upgraded version of Boojum that supports running "prover" nodes on mid-to-high-end gaming GPUs. The ability to run "prover" nodes, a key component of zkRollup, on consumer hardware means that zk proofs can enable a decentralized network.
2) More vertical fields, slightly converging, fierce competition with each other
Stablecoins : Aave launched the decentralized stablecoin GHO, MakerDAO launched the currency market "Spark", and Frax has been developing its own stablecoin, currency market and LSD vertical ecosystem for more than a year. These three protocols will compete in the stablecoin space — TVL, stablecoin supply, and most importantly, fees.
UniswapX Third-Party Filler : UniswapX, launched by Uniswap, introduces a new vertical — a network of third-party fillers that compete with each other by offering traders the best transaction prices. When a user conducts a transaction, a third-party filler (Note: anyone can become a third-party Filler of UniswapX Swap) can directly fill the transaction, or lead the user to a suitable AMM fund pool, thereby providing traders with Provide the most cost-effective token replacement price.
In addition, the third-party filler can also act as a bridge abstraction layer, allowing the free market to choose its own solution to perform cross-chain DEX token swap transactions, a token 1 on the A chain wants to replace a token 2 on the B chain , the third-party stuffers provide users with the fastest and best-priced routing solutions through the free competition market.
L2 Chain Launch SDK : Multiple L2s have released their own SDKs for extending new chains, including OP Stack by Optimism, Orbit by Arbitrum, ZK Stack by zkSync, and Supernets by Polygon 2.0. Although the strategies are different, But all will produce a result, the chain based on L2 is like generating web pages based on HTTPS, and eventually the application chain based on Ethereum will be as many as today's Internet HTTPS web pages.
With the official launch of the Base mainnet in early August, Ethereum for the L2 summer will usher in.
3) Consumer application stands alone: Gnosis Pay
Encryption protocols and the underlying infrastructure are progressing rapidly and gaining momentum, requiring more consumer applications and users.
L2 offers larger block sizes, near-minimum data availability costs, better latency and responsiveness than ever before, and it’s time to build crypto applications again.
One impressive consumer application seen at ETHCC is Gnosis Pay and Gnosis Card by Gnosis.
The usage experience of Gnosis Pay is no different from that of traditional payment systems. However, the bottom layer runs a set of encryption protocols, which connects traditional financial payment systems and Web3, and also makes it possible to use cryptocurrency to buy coffee and other daily consumption.
3. Davidev.eth (Polygon): L2 also lacks features for enterprise users
Davidev.eth is the VP of Product at 0xPolygon Labs, and here are his 8 quick thoughts after attending ETHCC:
1) Be optimistic about the two stablecoins Gyroscope Protocol (ECLP is just the beginning) and Spark Protocol;
2) @LucemansNL and @v3xlabs are using ENS x POAP Near Field Communication (NFC) to create the best possible activation experience. very promising.
3) Ethereum L1 will not monopolize the definition of EVM. L2 is preparing to expand EVM ( EIP-7212 ) with more functions, and expect the joint efforts of Polygon, Arbitrum and Optimism to push EVM to a more end-user-friendly direction.
4) No one else is building anything like Interop. If executed correctly, the scaling landscape will change.
5) ERC-6551: Lens Protocol may be the only project that mentions this standard at this event, but this will unlock the huge potential of NFT (hint: Paulygon, the first Quest-based customizable NFT project on Polygon, may use ERC-6551)
6) EIP-4337 is just the beginning of account abstraction, Instadapp, Patch Wallet, and Biconomy are challenging Safe's early leadership in the contract wallet space. EIP-7212 will unlock more content. A better user experience is coming.
7) While everyone is rolling out their own "appchains", I've noticed a lack of functionality in the enterprise market. Hopefully we'll end up seeing L2 teams fighting Quorum for enterprise users instead of fighting each other on Twitter.
8) Can the brand alone win the market? Uniswap X is basically Cowswap, Maker is moving closer to the Frax/Aave model, and Chainlink CCIP is basically equal to LayerZero. I think Uniswap and DAI will dominate their respective markets. And LayerZero has established deep roots according to the OFT and ONFT standards, so it is difficult to be replaced.
4. David Phelps (Jokerace): For the first time, I believe that cryptocurrency will succeed
The next important evolution of the application chain is the cooperative chain (cooperative-chain)
Collaboration chain is also called "ecosystem chain" by @owocki, which allows the project party to obtain the revenue share of the underlying chain through value contribution. A quick way to think about this is this: while owning your own chain brings many benefits, such as faster speeds, revenue capture, customized block times, and use-case-specific economic models, the upfront costs can be high, But also need to operate the chain. Using the cooperative-chain method, project parties can join forces to contribute value to the underlying chain and obtain fee income shared by the underlying sequencer. This is the first economically sustainable system we have for supporting public goods, similar to an on-chain tax system, but with one key difference from a national economy, and that is that this system is entirely opt-in.
The first implementation of the collaborative chain mechanism is the public goods network PGN initiated by Gitcoin . The network is developed based on OP Stack, and its goal is to explore a new funding mechanism to provide a sustainable source of funding for Ethereum and other public goods (Public goods). This is also the first time that the income from the OP Stack sorter will also be used in the public goods funding mechanism.
The honest majority trust assumption has been the root of all problems for on-chain communities (DAO and NFT communities).
Everyone is learning that honest majority trust assumptions pose risks to crypto infrastructure, but no one is discussing honest majority trust assumption risks for DAO and NFT communities.
However, we have seen many cases of “community being attacked when the price of the community token drops below its vault market cap”, honest majority trust assumptions are also risky for tokenized community organizations. There are 100 reasons why you should believe that 51% of the token supply should not be subject to community decisions. Is plutocracy really the best way to build an organization? Are random token holders the best people to make high-stakes decisions? The bottom line, though, is that the wealthiest token holders will always have the most power to manipulate tokens to make themselves richer.
The honest majority trust assumption accelerates the economic inequality that is at the heart of everything that is wrong with the on-chain community right now. This is something @CelestiaOrg and @eigenlayer have been thinking deeply about, how to build a sustainable social consensus.
The necessity of Smart contract trigger withdrawals
When liquidity pools handle users' staking and re-staking tokens, we face a problem: when any single user does something stupid that causes them to be slashed, all users in the pool can be penalized.
Smart contracts triggering withdrawals essentially make people who make mistakes responsible for their actions, so that innocent people will not be affected. This is critical for future staking and restaking.
Cosmos Roadmap Wins, Ethereum Adopts Cosmos Vision
Today, the dilemma of the Blockchain Trilemma has actually been transformed into a dilemma between sovereignty and composability. On the one hand is the sovereign vision of Cosmos modularity: everyone has their own chain, which can be customized on demand, just like choosing which country to join.
On the other side is Solana's overall vision of composability, a single chain that solves every interoperability challenge between users in the network.
Obviously, Ethereum has adopted the vision of Cosmos and realized the modular world of the application chain. This makes Solana even more valuable as a single-chain alternative. If you are bullish on Ethereum, then this is "very" good enough and good reason to be bullish on Solana. But as Solana Labs co-founder @aeyakovenko explained at @modular_summit, Solana's major innovations in fraud proof are built on top of @CelestiaOrg's modular vision. And Cosmos is the core of all current mainstream encryption projects.
The Cosmos and Ethereum ecosystems are rapidly merging into one constellation
Two Cosmos-based rollup-as-a-service products—Eclipse and Dymension—both will support the EVM, and Berachain's Polaris, built on top of the Cosmos SDK, will support any Cosmos chain to integrate into the EVM. All of these are powered by Evmos.
It was a bittersweet victory for Cosmos. The vision of Cosmos has triumphed. The future of modular blockchains still looks to be largely built upon the core Cosmos technical achievements: the Cosmos SDK for chaining, Tendermint (via Ethermint) for building consensus engines, and IBC for building bridges. But the future also seems to be increasingly built on top of the EVM, and ETH as an Internet reserve currency will increasingly be used to build applications.
We have entered the post-token era (Post-token)
This paradigm is currently at work on a broader scale:
—The DAO proposal initiated by Aave, trying to decouple governance from tokens
— @eigenlayer Provides secondary security for Ethereum, freeing other protocols from issuing their own native tokens
—No coin community Boys Club and SheFi
— Jon Charbonneau, co-founder of crypto investment agency DBA, on Rollups’ need for subjective permissioned “proofs of governance”
— Most interestingly, @evansforbes implicitly compares token holders to monarchs.
In my opinion, the three pillars supporting the Post-token paradigm are:
A. Proof-of-storage protocols such as Axiom can calculate historical data on the chain to analyze user behavior
b. Apps like Jokerace and POAP that incentivize users to build proof of reputation, thereby unlocking airdrops, access and governance power in the long run
C. Reputation protocols, such as Intuition, Gateway, NEWFORUM and Karma3 Labs, can process data from the first two chains to generate on-chain user portraits.
The post-token model is not an anti-issuance currency. All of these solutions can be seen as a token complement, unlocking use cases for mainstream tokens such as $ETH and $USDC, and even (like Jokerace) making it "easier" to run tokenized communities .
This brings us to a political structure in which plutocracy no longer dominates the community, as on-chain data itself serves as the basis for building social and reputational profiles, thereby providing a better basis for exercising governance rights.
This takes us to a world where cryptocurrencies are unlocked by building applications, protocols and communities around some L1 tokens, and tokens like $ETH, $AR, $SOL will function as digital native currencies.
Zero-Knowledge Proofs Unlock the Potential of Cryptocurrencies in Privacy, Provenance, and Reduced Computational Costs
All the way down is zk. We have every reason to believe that zero-knowledge proofs can unlock the potential of cryptocurrencies for mass adoption in three core areas: privacy, provenance, and reduced computational costs.
Privacy : With the zk-ML solution from Modulus Labs, anyone can programmatically participate in on-chain algorithms for finance and games without exposing the algorithms themselves. Privacy through ZK is arguably the most powerful way for developers to monetize in the crypto space.
Provenance : If a creator wants to prove that he has created a certain content, he needs to have a proof of ownership. Bundlr Network provides such a solution. In the long run, zero-knowledge proofs can also be used by creators in a wider range of cases, including proof of attribution of content such as "permissionless distortion, remixing and resizing of content".
Reduced costs : Zero-knowledge proofs allow us to quickly and easily prove behaviors without having to face the massive computational cost of their authenticity. Suddenly, with the ever-decreasing cost of proof, we can compute a user's entire history quickly and cheaply. Universal Engine and Market Risc Zero will be a game changer in this space. reduce costs reduce costs
The above three points will greatly unlock encrypted projects to achieve sustainable monetization.
Zero-knowledge proofs can unlock the potential of cryptocurrencies to achieve mass adoption in three core areas: privacy, provenance, and reduced computational costs. Among them, ZK's realization of privacy is the most powerful way for developers to monetize in the encryption field, and general engines and markets like Risc Zero can greatly reduce computing costs, which will be a game changer in this field.
Cryptocurrencies will succeed and create better applications than the internet
In the past few years, I have been skeptical about this industry, but as a builder, I can say that this is the first time I feel that this technology is possible to build applications on the chain due to off-chain. This is the real flip. ETHCC provides ample evidence that it is not far away.
5. Ader Dabit (Developer DAO): The infrastructure protocol is overheated, and no one is developing usable products
Enough talking, let's pour cold water.
This is a complaint from nader dabit, the founder of @developer_dao : the infrastructure protocol is overheated, and no one develops usable products
ETHCC gives him the feeling that everyone is talking, discussing assumptions and ideal situations, but no one is building actual products. He argues that "everyone is building their own slightly different infrastructure protocol, and the vast majority are actually building any application that runs on all of that infrastructure." There are products that can really be applied to people.
Most of these people, he suspects, are just trying to get rich, but I also realize that there are a lot of really necessary things being built and improved, but all intermingling and merging together.
There are a lot of things where these people get a lot of money from investors just by selling good hopes, and retire early with financial freedom before even delivering the product. It is much more difficult to make a real product, you must have real users, and you cannot rely on airdrops and self-operated operations to maintain the appearance.”
In the end, he hopes that more smart people will pay attention to the application layer, and maybe make less money.
