The Five Major Hotspots in Blockchain Technology Development in 2023

Important Technical Upgrades of Ethereum

In 2023, Ethereum will undergo two important upgrades: the Shanghai upgrade and the Cancun upgrade.

The Shanghai upgrade will open the staking withdrawal function, which is expected to increase staking participation while intensifying competition among staking projects.

The Cancun upgrade is the most significant technical upgrade of Ethereum in 2023, mainly including:

• Proto-Danksharding: Aims to reduce mainnet transaction fees, significantly improve performance, and pave the way for L2 development.
• EVM Object Format: Optimize EVM, improve smart contract performance, reduce transaction fees

In addition, Ethereum is also preparing for future technological development:

• The KZG Ceremony successfully launched in January, providing the cryptographic foundation for Proto-danksharding.
• Establish Danksharding standards to address technical barriers.
• The success of Danksharding will mark the successful scaling of Ethereum.

Ethereum also faces important issues such as MEV, regulation, and censorship resistance:

• Achieve builder decentralization
• Expand cross-chain heterogeneous chain MEV platform
• Consolidate the existing MEV market position
• The protocol layer PBS implements separation of proposal, construction, and verification.
• Improve the staking luck value issue
• Decentralized Block Builder Network

Staking Track Development

After the upgrade in Shanghai, the Staking track will welcome more development:

• Liquid Staking: Improve the liquidity of staked tokens
• Decentralized Staking: Improve the liquidity of existing solutions
• Restaking: The "secondary staking" innovation proposed by EigenLayer
• Decentralized Validator Network: Exploring Technical Solutions
• Staking yield stabilization: addressing the issue of node yield disparity

Another point of interest is the multiple versions of Ethereum clients:

• Paradigm's Reth: Modular Design
• Helios of al6z: Coupling of Execution Layer and Consensus Layer
• Self-hosted Blockchain Explorer: Solving Centralization Issues

Other emerging technology topics include stealth addresses, lattice-based cryptographic techniques, etc.

Modular Blockchain Technology Development

Modular blockchain will make progress in multiple areas:

New competitors in the data availability layer:

• There will be more participants beyond Celestia
• Arbitrum AnyTrust adopts a compromise approach.
• EigenDA is based on restaking technology

More flexible and efficient execution layer:

• Fuel uses UTXO and a highly parallel virtual machine.
• Rooch and other flexible networks

Layer2 Optimization Plan:

• AltLayer Modular Rollup
• OP Stack supports quick construction of Layer 2
• Stackr and others support the rapid construction of application-specific Rollups.

Solve the centralization problem of Sequencer:

• The shared sequencer provides services for Layer 2/3
• Decentralized Sequencer Design

More Layer2 and Layer3:

• Building Layer2 "subnets" has become a trend
• Avalanche Subnet, Binance Chain ecosystem, etc. are worth paying attention to.
• L3 provides further vertical scaling tools

Application of ZK Technology

zkEVM is expected to launch multiple testnets and even a mainnet in 2023, but it will still take time for the technology to mature. ASIC hardware supporting zkEVM proof is expected to have mature products by the end of the year.

The application of ZK in other fields is worth looking forward to, especially zkBridge:

• Validator signature changed to ZK proof
• PoS consensus process ZK-ified

Other trends in cross-chain:

• Multi-chain applications are more common, such as identity verification and liquidity sharing.
• Cross-chain MEV Development
• Inter-chain Security Solutions

Development of Terminal Applications

Wallet and User-end Applications:

• MPC has become standard, supporting more scenarios.
• Account abstraction technology matures
• Development of applications such as Lightning Network payments and financial services.

Developer tools improved:

• Development of Move Language Ecosystem
• Layer2 Development Ecosystem
• Low-code tools, data middleware, endpoint services, etc.