In which we’ll bе reduced to a spectrum of gray*

Why is Ethereum Ethereum

Sure, Ethereum is great and all, but why? What exactly made it into this vibrant and innovative ecosystem? And can it last? I’m writing this post in an attempt to clarify to self and pinpoint Ethereum’s unique value offering and the emergent decentralized finance ecosystem.

Composability — everyone’s talking about it

The composability everyone’s referring to is, I suppose, the ability to compose different functionalities while acting on and inside the same state. Ethereum combines open source shared functionality with Nakamoto Consensus to enable shared alterable state.

CAP

In this section I want to illustrate and emphasize that composability + shared state = synchronous composability. Indeed, acting on a shared consensus state effectively requires that each transaction at its turn locks the state, fully executes, and completes its full update of the state, as in the Alice and Compos example above. I disagree with Georgios:

The bad news

But shared state is inherently unscalable, as every individual transaction imposes externality costs on the entire network. This is the why and what of sharding — splitting the state across different zones so that a transaction imposes a computational burden on the validators of its shard only.

  1. Alice contacts an LP that has sufficient funds in the relevant fungible token, on both rollups.
  2. Alice sends her token to LP, on rollup X.
  3. LP sends Alice the same amount of the corresponding token (minus a commission), on rollup Y.

Ethereum future.0

After this deliberation, and reflecting on the possible outcomes, I see few possibilities for the Ethereum system henceforth:

GHOST protocol (Ethereum), CS postdoc @ Harvard