Outlook on Ethereum Protocol Technical Upgrades: The Merge

Since October 2022, the co-founder of Ethereum has proposed a series of ideas regarding the future development of Ethereum, covering six main aspects: The Merge, The Surge, The Scourge, The Verge, The Purge, and The Splurge. This article will focus on the first part, The Merge, exploring the potential technical improvements of the proof-of-stake mechanism and its implementation path.

The Merge is considered one of the most important milestones in Ethereum's history, marking the transition from proof of work to proof of stake. After nearly two years of operation, the proof of stake system has demonstrated excellent stability, performance, and decentralization. However, there are still some key areas that require further optimization.

The technical roadmap for Ethereum in 2023 mainly focuses on two aspects: first, improving technical features such as stability, performance, and accessibility for small validators; second, addressing centralization risks through adjustments in economic mechanisms.

The main goal of The Merge

1. Achieve Single Slot Finality (SSF): Reduce the block finality time from approximately 15 minutes to within a single slot.

2. Confirm and complete transactions at the fastest speed while maintaining decentralization.

3. Lower the staking threshold to increase the feasibility of participation for independent stakers.

4. Enhance the overall robustness of the system.

5. Enhance Ethereum's resistance and recovery capabilities against 51% attacks, including preventing finality reversals, blocking, and censorship.

Single Slot Determinism and Staking Democratization

Currently, the finality of Ethereum blocks requires 2-3 epochs (about 15 minutes), and the minimum staking threshold is 32 ETH. This is to seek a balance among the three goals of maximizing the number of validators, minimizing the finality time, and reducing the operational costs of nodes.

Ideally, Ethereum aims to achieve two improvements while maintaining economic finality:

1. Shorten the block finalization time to a single slot (12 seconds or less).
2. Lower the minimum staking threshold from 32 Ether to 1 Ether.

These improvements will benefit more users with a higher level of security guarantees and significantly enhance the feasibility of independent staking. However, achieving these two goals will increase node operating costs, which is also the reason why Ethereum initially did not adopt single-slot determinism.

Single Slot Deterministic Scheme

To address the issue of single-slot determinism with a large number of validators, while avoiding excessively high node operating costs, there are currently several main solutions:

1. Optimize the signature aggregation protocol: possibly utilizing ZK-SNARKs technology to process millions of validators' signatures within a single time slot.

2. Orbit Committee Mechanism: A medium-sized committee is randomly selected to be responsible for the final confirmation of the chain, alleviating the burden on nodes while maintaining high attack costs.

3. Dual-layer staking mechanism: Set up two types of stakers, where only high-level stakers directly participate in the economic finality process.

Each solution has its pros and cons, and a balance must be struck between security, decentralization, and technical feasibility.

Single Secret Leader Election

Currently, the proposer of the next block is predictable, which may lead to targeted DoS attacks. The single secret leader election protocol creates "blind" validator IDs for each validator through cryptographic techniques and allows multiple proposers to reshuffle and re-blind the ID pool to address this issue.

However, implementing a simple and effective single secret leader election protocol still faces challenges, especially in maintaining the protocol's simplicity and resistance to quantum attacks.

Faster Transaction Confirmation

Further shortening the transaction confirmation time (for example, from 12 seconds to 4 seconds) will significantly improve user experience and enhance the efficiency of DeFi protocols. There are mainly two technical paths:

1. Shorten the gap time to 8 seconds or 4 seconds.
2. Allow proposers to publish pre-confirmations within a single time slot.

However, shortening the time slot duration may increase the risk of validator centralization, and while the pre-confirmation method can improve the average confirmation time, it cannot optimize performance in the worst-case scenario.

Quantum Attack Resistance

In the face of potential quantum computing threats, Ethereum needs to develop alternatives to the current protocol components that rely on elliptic curves, based on hash or other quantum-resistant solutions. This highlights the reasonableness of adopting conservative performance assumptions in the design of proof of stake.

Conclusion

The technical evolution of the Ethereum proof-of-stake system faces numerous challenges. Key issues that need to be addressed include single-slot finality, the democratization of staking, the election of a single secret leader, faster transaction confirmations, and the development of alternatives to quantum attacks.

The Ethereum team is actively exploring and innovating, weighing different technical solutions to find the best development path to achieve higher security, performance, and decentralization. This process will continue to drive the development and improvement of the Ethereum ecosystem.