Expectation of the Ethereum ecosystem growth over the next ten years

I think over the last couple of years, the Ethereum ecosystem is in this very big and very important transition in its growth. Where I think for the last 10 years, the big focus on Ethereum was working on the basic technology and getting Ethereum to the point where it can actually do the things that we want it to do. And doing experiments in small communities, building applications that work for a relatively small group of existing crypto users. And the goal of the next 10 years should be to really bring those, all of the things that we've created in Ethereum to a much bigger audience and in the mainstream world. So I think one of the ways that we can look at this is comparing here the decentralized Twitter on Ethereum.

And on the left here, we have an example of decentralized Twitter as it existed in 2015. And on the right, we have an example of decentralized Twitter on Ethereum in 2024. So I think it's very easy to see the difference. How on the left, what we have is a very, very basic HTML page, a very simple interface. So users log in directly with Ethereum addresses.

The interface directly shows the Ethereum address. And every single post actually is a transaction that gets published directly to the Ethereum blockchain. So it works, but it's also a very basic design. On the right, we have a client called Firefly, which is a Farcaster and Twitter and Lens client for Ethereum. And this is what it looks like in 2024, right?

So what we see is there's a lot of improvements. And I think there is improvements that you can see. And there's also improvements that you can't see. So in terms of improvements that you can see, the quality of the UI is just obviously far better. This just is a Web2 competitive UI.

Then it looks very similar to something like Twitter. It's just as convenient to use. Firefly itself also, it doesn't just support one of these decentralized protocols. It supports Lens, it also supports Farcaster, and it also supports Twitter at the same time, which makes it much easier to use in order to do things across all of the ecosystems. So it provides a lot more value to different users in a lot of ways.

It provides a lot more value to different users in a lot of ways. Also, the underlying protocols that Firefly is reading and posting to are much stronger. If you look at Farcaster, for example, it's a very sophisticated architecture where it uses a combination of Ethereum and specifically Optimism for a small part of the activity so specifically for registering accounts and doing anti-spam and using a specialized data structure called a CRDT which is more efficient but it does not provide guarantees on ordering in the same way that a blockchain does to store the actual messages. So it's a much more optimized tech stack that really uses the right technology for the job that combines together blockchains with other components. So a lot of improvements over the last 10 years across the stack.

And I think this is a good example because it shows in a very clear and very visible way, a lot of the improvements that we've seen in Ethereum since then, right? So in 2019, if you're looking at transaction fees, for example, transaction fees were generally $1 to $5 per transaction. I still remember when I visited Argentina for the first time and I tried paying for things like paying for coffee in person there. And I remember the first time I did that, the transaction fee was like somewhere around like two to six dollars. And I also remember that the transaction took like about five minutes to get confirmed and look what i did that i understood why yeah everyone else like all of the locals there they were using accounts to accounts transfers in binance where which is basically that accounts to account transfers and binance even though they're centralized they're instant and they're free.

And if we want to actually have infrastructure for doing these kinds of things on chain, then it has to be competitive with that. Nobody's going to pay $1 transaction fees. Nobody's going to wait for five minutes for a transaction. If you look at 2024, the biggest upgrade that we saw is EIP-444, which massively reduced the transaction fees by adding this extra blob space to the chain that Layer 2 protocols can use. And so we've seen transaction a layer two, drop from about 20 to 80 cents, all the way down to regularly less than one cent.

Now, transaction inclusion time, after EAP-1559, it drops to about 5 to 20 seconds on O1. So for me now, I regularly send transactions and I see them confirmed in usually one slot. And on layer two, many layer twos offer reconfirmations, and so the inclusion time is one second or even lower. On wallet security, so for a long time, all we had are EOAs, which are accounts that are controlled by one single private key. So if you lose your private key, you lose the account.

If someone else gets access to your private key, they steal all your money. You also lose your account. In 2024, we see much more widespread usage of SAFe as a multi-sig. We see a lot of smart contract wallet usage. We see a lot of application keys.

Recently, Soul Wallet did a launch on Optimism, and they're actually using ZK email in production to do recovery there. So we're seeing a lot of really great progress on all of these fronts, right? Transaction fees, usability, security. are both the predictable costs and the unpredictable costs, both monetary costs and costs in annoyance and time are getting much, much lower than they were before. And this is the key thing that I think is really enabling all of these applications to go on top of that.

So the next question is, what can Ethereum do over the next 10 years? I think for me, the big answer is build the best possible applications in every space where using Ethereum makes sense. So just a few more comparisons to give. So prediction markets, right? So recently, yeah, PolyMarket has been getting popular.

to give. So prediction markets, right? So recently, yeah, PolyMarket has been getting popular. And in 2019, we saw Augur. And Augur, it worked, but it had a lot of challenges.

It was a very clunky interface. I participated a lot, and I had to pay over $1,000 in transaction fees. If you look at PolyMarket in 2024, much lower fees, much cleaner interface. And we've actually seen that the differences in quality are large enough that there is actually non-crypto people, like very mainstream intellectuals, that are actually paying attention. So the question is, well, what are the further improvements, right?

Where is this going to get to in 2034? Let's look at wallets. So a wallet is, I think, the simplest and still most important app. The most basic app of crypto is still just being able to send coins around. So Ethereum wallets in 2015, so this was one very basic version here on the left, right?

So they worked, but they were these relatively clunky applications, relatively difficult to use. In 2024, what I have here is a screenshot of Dymo, which is an Ethereum wallet that's specifically designed to be mainstream quality and to compete with things like Venmo and potentially even replace Venmo for regular users. And the interface just looks incredibly clean. Everything about it is Web2 quality. The only difference is it's using Ethereum twos, and it's using stable coins under the hood.

And so the next question is, well, what is a wallet going to look like in 2034? Let's look at voting. In 2015, this was the one voting application I could find. There was a smart contract on Solidity that lets you create a poll. And then there are functions that let you vote in polls.

And in order to vote in this, you basically had to use either a very basic and crappy user interface or just do it manually by crafting transactions by hand. In 2024, we have, this is the Raramo voting system. This is a very sophisticated thing that uses a combination of blockchains and layer twos and zero-dollar proofs in order to provide voting that is both open and censorship resistant and that is also privacy preserving, right? So the votes in 2015, not privacy preserving at all. Votes in 2024 are privacy preserving.

So a lot of progress that's over here. And I think this is like a very big difference that is important to think about, right? Because I think there's a lot of people who rejected blockchain and crypto-based voting options because in 2015, the technology did not work. But in 2024, it actually does. So now, what is voting going to look like in 2034?

Ethereum's scalability. None of this works if there isn't a scalable and secure and functional base layer. And so one of the biggest things that's happening now is these improvements in scalability, especially for Layer 2 protocols. So today we are where we are on the left, right? So with EIP-4844, in every slot, there's 384 kilobytes of data space.

In every slot, there's 384 kilobytes of data space. Then we have a roadmap for adding data availability sampling, which increases the amount of data space, but keeps the amount of data that each individual node needs to download to the same relatively low level. And so first we have a transition stage called peer-to-asset, then we have full-to-asset. So this moves us from 384 kilobytes to 1 to 4 megabytes, and then 16 megabytes. At the same time, we have compression, which reduces the amount of data that's required per roll-up transaction.

So today, we have uncompressed or very limited forms of compression that give you 150 to 180 bytes. And this, by the way, is for an ERC20 transaction. And then finally we have aggregation, stateless and stateful compression, and the end game is 23 bytes per transaction. Now, actually roll-ups are not the only way, right? So we see there's projects like itmacs that are moving forward on Plasma and that are doing hybrid roll-up Plasma architectures.

And their hybrid roll-up Plasma can do five bytes per transaction on-chain. And so you can ask, well, how much scalability does this give you? Well, you can take 16 megabytes per slot, divide it by 12 megabytes. And so that's 1.33 million per slot.

And then divide that by five bytes and it max, and you get a theoretical maximum of 267,000 transactions per second. And I think this is not even the end. I think after this, we could go even further. So more and more transaction volume, lower and to lower fees. One other thing about Ethereum that I think is improving is Ethereum's quality as a base layer.

So improvements in censorship resistance with things like inclusion lists, ongoing improvements to staking decentralization, just ongoing trust that's being built in the Ethereum base layer as we're seeing staking continue to maintain its decentralization. So more and more progress on Ethereum itself. User experience and security. So the vision, I think, is that we want to combine Web2 quality UX with Web3 values of user sovereignty and even be more secure than traditional Web2 services. I think people underestimate the extent to which it's actually possible to make something using Web3-based tools that is more secure and more reliable than something like a Google account.

So the approach that I recommend is multi-sig wallets. So either to use directly or for social recovery. But if you have a multi-sig wallet, you still have this choice of who do you actually choose as being your keys. And my view is that there are different options to choose from. And for different kinds of users, options to choose from.

And for different kinds of users, different options will make sense. So we have your own devices, laptop, phone, trusted hardware device, USB key, paper wallet, friends and family, so other people's accounts, and then institutional guardians. This could be specialized services, or it could be ZK stark wrappers of existing services. So we have ZK email starting to be used for production. We have ZK wrappers of government ID, such as Anon at Par, and so on.

So we have a lot of different options for one thing securing a different account. And with OBSIG Wallets, we can combine different combinations of these options so we still have decentralization because we are not putting all of our users' trust into one single provider. Standardization is what they challenge. So using Ethereum layer 2s should feel like using Ethereum. It should not feel like 34 different watchings.

And so if we look at depositing to Polymarket today, it's a fairly complicated thing. You have to select USDC as a currency, you have to select Polygon as a network, and it cannot be Polygon to the end, it has to be Polygon. You have to know that those two are different, and if you send to the Royal Pond, you might lose your funds. Then you deposit, and then you have to know that those two are different. And if you send to the wrong one, you might lose your funds.

Then you deposit and then you have to go through a version protocol. You have to know what version protocols are. And then you have to do three or four different things. In the future, I think you should be able to just copy paste an address. That address should just specify the YAL layer two and colon and then the address and then your wallet should be able to interpret that and it should be able to automatically do all of these bridging operations under the hood.

So still a lot of improvements in standardization to be made. One big takeaway that I think is really important for people building today is that I think we should not replicate Web2. I think we should speed ahead of Web2, and we should get to the things that need to be built before Web2 gets there. So what are things that we can improve on? One is other form factors, right?

So I think in the last 10 years, we moved from just doing desktop to also doing mobile. I think we're going to have like five other form factors in the next 10 years. Wearable devices, it includes smartwatches, it also includes glasses, talking to a locally running AI. So I think in the next 10 years, we're going to see a big increase to how much people can do without even needing interfaces. Users would just say what they want to do and that locally running AI models would interpret it and just do it automatically.

brain-computer interfaces. The way in which users will interact with computers, I think, is going to change a lot. And I think there's value in the Web3 space, actually, yet, like, speeding ahead and even innovating here. Epistemic technology, this is a big one. So I think some of the best things that we've seen this year are technologies like community nodes and prediction markets, both of which are a kind of open and decentralized collective truth finding, right?

So they're technologies that allow us to better distinguish between things that are true and things that are false or things that are misleading in a way that is open and democratic and does not rely on entrenching single centralized authorities. I think these kinds of technologies are good, but I think they can be integrated much more, integrated into a wallet, integrated into a browser. I think there is other kinds of epistemic technologies. So, for example, I think within the crypto space, users need a lot of help detecting scams. And I think automated scanning that happens on the device can really help there.

again and again. This functionality of detecting scams often gets abused by centralized and powerful actors, governments, corporations, anyone, as a way of trying to push their own biased opinion of what is a scam and what is fake and what is real onto everyone else. And so I think one thing that's valuable is doing this technology, but doing it in a way where users have a choice. And it's much more democratic than the options that we have today. And so I think there is value in the crypto space really innovating on this.

Finally, I would need to lead the way on security. So formally verifying as much as possible, doing on-chain content versioning. So when you access a DAP, instead of accessing a regular website where you talk to a server, I think it should all be done with IPFS and your browser actually checks the hash. And then you see when the hash was last updated, you actually have a multi-sig that can update the interfaces. And so you have this like much stronger security assurance that you can't even have if you do things in a centralized way.

So I hope that we actually start really innovating on this user experience and security in this way. So summary, right? I think that recent improvements on core layer one technology are clearing the way for a very bright future in Ethereum. I think there is very powerful and very consequential applications that are already happening here. And I think in the next 10 years, we can really do a lot more.

And I'm excited to see people building and being part of making that happen so thank you and q a session for 10 minutes please raise your hand if you have any questionsお願いします I'm unspecified location in Europe. Thank you. Thanks for the talk. Any specific like on like 437 and like future of account abstraction? Yeah, so I think 437 has been making a lot of progress.

And I think one of the best things that we saw this year is with 7702. I think one of the best things that we saw this year is with 7702, we're seeing short-term account abstraction be done in a way that's really compatible with the work that we want to do on long-term account abstraction. One other thing that I'm excited about is that it feels like smart contract wallets are really making a lot of progress. So we've had Safe for a long time. We now, like as I mentioned, we have a sole wallet that is actually using ZK email and optimism.

So I think the things that I really want to see are wallets that really use these smart contract features, both for functionality. And I think 7702 is going to be really good at making sure that that innovation happens both on smart contract wallets and on existing EOAs at the same time. And so it can really happen faster. Second, I hope that we can start seeing this much more diverse ecosystem of different things that you can choose as guardians for a social recovery or multi-sig wallet and uh i think uh you know cke mail was a good start i think the yeah work that's been done by the yeah i forget the name but the the team in japan that was making uh zk wrappers of the minor card and uh also anon at har and all of these similar efforts. And so I hope to see more of that.

And then third is I hope to see account abstraction wallets continuing to lead the way on cross L2 functionality, because that's one of the bigger UX weaknesses of the Ethereum ecosystem right now. And we really need to work hard at fixing that. So I've been seeing a lot of progress and that's where I hope we can see even more progress on. Hi, thank you so much for the very clear visualization of how much the ecosystem of how much the ecosystem solved a lot of issues, you know, you guys, we used to have, to nowadays we're solving in a very, you know, like a fast speed now. And my question is, I believe one of the great things what I could see in Ethereum developer community is very inclusive community.

And then, you know, no matter what their background is, it's very welcoming and warm community. So what's your vision to be to have the community enough open minded and welcoming for the next five years? I think to me, the biggest thing is that it's important for the community to not just be welcoming in the sense of like people being friendly and like, and having warm feelings and making people feel included, but also in like this, some of the very practical aspects of like really making sure that our developers anywhere across the world really have the knowledge and tools and the ability to meaningfully contribute directly to things that are at the frontier of the ecosystem. And so I think part of that is like broader accessibility of knowledge. So knowledge about what's happening on a one about what kinds of things are happening with account abstraction, a lot of that is like crossing language barriers and making more content available in a translated form.

A lot of that is also just that, like directly supporting specific communities and helping them grow to have a large enough basis of people who understand what's going on and so that they can help teach more people as well. I think one of the big successes that I've seen over the last couple of years is like, I think both account abstraction and ZGASNARCS have been spaces where it's really, what we've seen a lot of success in teams outside of like Europe and the US especially, like actually really being able to contribute and really making like frontier things that people from around the world end up using. And I think that's a good success and it's valuable to build on it. I think it's also worth trying to expand that to other parts of the stack. So, for example, one big point of concern that I see is that the parts of the ecosystem that are closer to the user, I think, are doing a relatively good job of really being open and welcoming to people from all kinds of regions from the world, also being open and welcoming to the younger generation.

welcoming to the younger generation. But I think Ethereum layer one core dev has been less effective at doing that so far, right? And Ethereum layer one core dev definitely still like relatively feels like a more restrictive club than the other parts of the ecosystem. And I think it's really valuable to fix that. And I think there's like very pragmatic reasons to write because I think if those two are the like one group keeps getting bigger and bigger, but L1 Cordapp continues to be the same people, then you get a lot of friction, and like mistrust, and like a lot of this perception of, you know, that the two groups are not going toward different goals.

And so I think there is a lot of value in doing some bridging there and making sure that LeaderOneCoreDep also expands as well. So these are all things that the foundation has been continuing to work on and continue to find more ways to try to improve. And I think it's an important problem. I see. I have a quick follow up question or like a note.

One of the things is to sharing the knowledge and to keep the, you know, like discussion and everything will be open and transparent enough. I think your blog post is really effective and one of the great things that any, probably that all developers will watch what your thoughts is and also what idea you have. I'd say every very progressive idea of the implementation, for some extent, comes from your blog post originally, I'd say. So I really appreciate your efforts. Okay, well thank you for the feedback.

I will keep writing more then. Okay, well, thank you for the feedback. I will keep writing more then. Thank you, Vitalik. And this will be your last question.

So please give a big applause to Vitalik. Thank you.