Five Major Trends in Blockchain Technology Development in 2023

1. Ethereum Important Infrastructure Upgrade
2. Innovation and Development of the Staking Ecosystem
3. Optimization and Application of Modular Blockchain Technology
4. The application of zero-knowledge proof technology in fields such as cross-chain.
5. Account abstraction and multiparty computing and other terminal application technology iterations

Ethereum Key Technical Upgrades in 2023

Shanghai Upgrade

After successfully opening the withdrawal function, it is expected to eliminate the security concerns of potential stakers, which is anticipated to drive an increase in staking volume. At the same time, this will intensify the competition among staking projects.

Cancun Upgrade

As the most significant technical upgrade of Ethereum in 2023, its specific content may still change. Mainly includes:

• Proto-Danksharding: Aims to reduce the transaction fees on the Ethereum mainnet. If successfully implemented, it will significantly enhance Ethereum's performance and lay the foundation for the development of L2.

• EVM object format ( EOF ): As the first EVM modification in two years, it will optimize smart contract execution performance and reduce transaction fee costs.

Preparation for Future Technological Development of Ethereum

• KZG Ceremony: Successfully launched in January 2023, providing the cryptographic foundation for Proto-danksharding.

• The establishment of the Danksharding standard: will address existing technical barriers. Although the probability of implementation within 2023 is low, a successful upgrade will mark a significant breakthrough in Ethereum's scalability.

Important Topics of Ethereum in 2023

MEV, Regulation and Anti-censorship

• Decentralized Block Builder ( block builder ) network development
• Cross-chain Heterogeneous Chain MEV Unified Platform: Expanding New MEV Market
• Protocol Layer PBS: Achieving separation of proposal, construction, and verification
• Improve the issue of luck similar to PoW in staking to maintain decentralization.

Development Direction of the Staking Ecosystem in 2023

• Liquid Staking: Improve the liquidity of staked tokens
• Decentralized Staking: Improve the liquidity of existing product solutions
• Restaking: Pay attention to the "second staking" innovation proposed by EigenLayer and its potential impact.
• Decentralized Validator Network ( DVT ): SSV and Obol explore decentralized validator technology solutions.
• Staking yield stabilization: addressing the issue of excessive yield disparities among different staking nodes.

Development of Multiple Versions of Ethereum Clients

• Paradigm's Reth: Adopts a modular client design
• Helios of al6z: Coupling the execution layer with the consensus layer client.
• A self-hosted blockchain explorer developed based on a new type of client to address the centralization issue of Etherscan.

Modular Blockchain Technology Progress

Data Availability Layer New Competitors

In addition to Celestia, more participants like Polygon Avail will join the DA track in 2023. Other innovative explorations include:

• Arbitrum AnyTrust, intmax and others adopt a Plasma and Rollup hybrid approach
• EigenDA's solution based on restaking technology

more flexible and efficient execution layer

• Fuel: Improve smart contract execution efficiency using UTXO and a highly parallel virtual machine.
• Rooch and other flexible execution layer networks

Layer2 optimization plan

• AltLayer: Modular Rollup Approach
• OP Stack: supports quick building and launching of Layer 2
• Stackr, dymension: Quickly build application-specific Rollups

Solve the centralization issue of Sequencer

• Shared sequencer: Provides sequencing services for Layer 2 and Layer 3 projects, such as Espresso, OP Stack, etc.

Layer2 Ecosystem Development

• Building Layer2 "subnets" has become a new trend in ecosystem development.
• Projects to watch: Avalanche ( Subnet ), Binance Chain ( Beacon Chains zkBNB, Sidechains, Greenfield ), and Shiba.
• L3 Development: Supports larger scale Blockchain expansion, such as Starknet's Slush, zkSync's Opportunity, etc.

zkEVM and ZK Application Progress

• Multiple zkEVM projects ( such as ConsenSys zkEVM, Polygon Hermezs Scroll ) will launch testnets or mainnets in 2023.
• ZK technology has broad application prospects in non-scaling fields such as cross-chain bridges.
• Two main implementation methods of zkBridge:

1. Use ZK proofs to verify validator signatures on light clients.
2. ZK the PoS consensus process

Cross-Chain Technology Trends

• Multi-chain ( full chain ) and cross-chain applications are increasing, such as identity and record cross-chain authentication, and liquidity sharing between Layer 2.
• Cross-chain MEV issues and solutions ( such as Skip Protocol ) have attracted attention.
• The MEV issue between Layer 2 and Layer 1 is becoming increasingly prominent.
• Cosmos launches interchain security ( Interchain Security ) solution

Wallet and User-End Application Development

• MPC(TSS) technology has become standard, supporting more application scenarios.
• Account abstraction (AA) design ( EIP4337) is nearing completion, and the wallet product combined with MPC is worth looking forward to.
• Lightning Network Application Innovation:
  • OmniBOLT Taro introduces stablecoins and custom asset types
  • DLC non-custodial solutions realize applications of financial derivatives
  • The integration of the social protocol Nostr with the Lightning Network brings new traffic.

Web3 Developer Tools Improvement

• The Move language ecosystem is expected to see growth in developers.
• Layer2(, especially the zkVM type ) development environment is complete.
• Low-code, no-code tools and new developer kits accumulate technology
• The data middleware layer and related tools improve on-chain data processing.
• Endpoint services achieve decentralization, faster execution, and richer features.