Ethereum
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Ethereum Info
- Jul,2024The first Ethereum spot ETFs are approved in the United States, marking a significant moment for Ethereum’s integration into traditional financial markets. This provides institutional investors a new way to invest in ETH, further legitimizing Ethereum as an asset class.
- Feb,2024Ethereum completes the Cancun upgrade, introducing EIP-4844. This upgrade significantly enhances Ethereum's scalability by breaking down blocks into smaller “blobs” to increase network capacity and reduce transaction costs, laying the groundwork for sharding and further Layer 2 developments.
- Mar,2023The Shanghai Upgrade is implemented, allowing validators to withdraw their staked ETH for the first time, boosting staking participation and flexibility for network validators.
- Sep,2022Ethereum successfully completes The Merge, fully transitioning from Proof of Work (PoW) to Proof of Stake (PoS). This transition reduces Ethereum's energy consumption by over 99%, marking a key milestone in the network’s evolution.
- Jul,2021Ethereum introduces EIP-1559, which implements a fee burn mechanism that reduces ETH supply and creates deflationary pressure on the network.
Ethereum Team
OrganizationsEthereum Intro
Ethereum is the first blockchain project to implement smart contract functions. It carries the largest ecosystem and is currently the second largest project in the crypto.
Ethereum was proposed in late 2013 by Vitalik Buterin, providing a programmable transaction functionality that enables developers to eploy smart contracts，accelerating the birth of dApps for various purposes. In 2014, development work began and was crowdfunded, and the network went live on 30 July 2015.
The milestone event of Ethereum happened in September 2022, the merge of Ethereum was completed. Ethereum 2.0 was a set of three or more upgrades, also known as "phases", meant to transition the network's consensus mechanism to proof-of-stake, and to scale the network's transaction throughput with execution sharding and an improved EVM architecture. The switch from proof-of-work to proof-of-stake has cut Ethereum's energy usage by 99%.
In April 2023，Ethereum completed the upgrade of Shanghai, since then, users could withdraw the ETH staked at the node. This flexible mechanism has also gradually increased the amount of staked Ethereum.
Above are only for introduction, not intended as investment advice.
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What is Ethereum？
Ethereum is a decentralized blockchain platform that enables developers to build and deploy smart contracts and decentralized applications (DApps). Launched in 2015, Ethereum introduced the concept of a programmable blockchain, which allows anyone to create custom functionality using its native cryptocurrency, Ether (ETH). It operates on a global, distributed network of computers, ensuring security, transparency, and resistance to censorship.
Which sector does Ethereum belong to?
Ethereum primarily belongs to the blockchain and cryptocurrency sectors. It's often categorized as a Layer-1 blockchain platform, but its applications extend into multiple sub-sectors and industries due to its versatile functionality, including:
- Decentralized Finance (DeFi): Ethereum is the backbone of many DeFi applications, allowing for peer-to-peer financial transactions without intermediaries.Examples: Lido,AAVE.
- Non-Fungible Tokens (NFTs): Ethereum is a popular platform for creating and trading NFTs, digital assets representing unique items like art, collectibles, and virtual real estate.Examples: Magic eden.
- Smart Contracts and DApps: Ethereum's smart contract functionality enables the creation of decentralized applications (DApps) for various purposes, such as gaming, supply chain management, and voting systems.
- Supply Chain and Enterprise Solutions：Ethereum is used for tracking and verifying supply chains and enabling enterprise blockchain solutions.Examples: IBM Food Trust (leveraging Ethereum-based frameworks).
- Tokenized Assets and Payments: It facilitates the creation and transfer of tokenized assets, including stablecoins like USDT and USDC.
What Sets Ethereum Apart?
Ethereum stands out because it’s much more than a cryptocurrency—it's a platform for building decentralized applications (DApps) and smart contracts. Here’s what makes Ethereum unique:
- Smart Contracts: Unlike Bitcoin, Ethereum allows developers to write programmable agreements that automatically execute when specific conditions are met. These contracts eliminate the need for intermediaries.
- Decentralized Applications (DApps): Ethereum supports DApps across industries, from finance (DeFi) to gaming and beyond. Developers use Ethereum’s infrastructure to create innovative solutions.
- Ether (ETH): While ETH can be used as a digital currency like Bitcoin, its primary purpose is to fuel the Ethereum network. It pays for transaction fees and computational services, making it integral to the ecosystem.
- Flexibility and Upgrades: Ethereum is continuously evolving. For example, it transitioned to Ethereum 2.0, upgrading to a more energy-efficient proof-of-stake (PoS) system.
- Open-Source Community: Ethereum boasts a large, active developer community, which drives innovation and ensures its relevance in the blockchain space.
- In summary, Ethereum’s ability to act as a global, decentralized computer makes it a powerful tool for reshaping industries.
What is tokenomics of Ethereum (includes allocation and supply schedule)?
Ethereum's tokenomics, including its allocation, supply schedule, and the mechanism for creating and managing its supply, are detailed as follows:
Initial Token Allocation
Ethereum had an initial allocation during its launch in 2015:
- Pre-sale (crowdsale): 60 million ETH were sold to the public.
- Ethereum Foundation: 12 million ETH were reserved for the Ethereum Foundation and early contributors.
- Mining Rewards: Initially, miners earned block rewards, which incentivized network security.
Supply Schedule and Creation Mechanism
- Transition to Proof-of-Stake (PoS): The Merge, which occurred in September 2022, marked Ethereum's transition from proof-of-work (PoW) to PoS. This transition significantly altered the ETH issuance process.
- ETH Issuance: Under PoS, approximately 1,700 ETH are issued daily to stakers, based on about 14 million total ETH staked. This issuance rate can fluctuate depending on the total amount of ETH staked.
- Reduction in Issuance: The shift to PoS reduced the total new ETH issuance by about 88%, as the pre-PoS mining issuance of approximately 13,000 ETH/day ceased.
- Burning of ETH: Concurrently, ETH is also burned as part of transaction fees. The base fee, paid in ETH for each transaction, is burned, removing it from circulation. This burning mechanism was introduced with the London upgrade in August 2021.
- Inflation/Deflation Balance: The interplay between the issuance and burning of ETH affects the overall inflation or deflation rate of the Ethereum currency. If the average gas price stays at or above 16 gwei for a day, the amount of ETH burned can offset the \~1,700 ETH issued to validators, potentially bringing net ETH inflation to zero or even negative.
Overall Supply Management
- Liquid Supply Curve: The liquid supply curve for Ethereum includes the estimated liquid supply entering circulation. This encompasses inflation from PoW Block Rewards, PoS ETH 2.0 Issuance, and the original Genesis Distribution during the 2014 Ethereum ICO. The curve also accounts for burned fees as per EIP-1559, providing a comprehensive view of the net distribution of Ethereum's block reward. Ethereum's tokenomics reflect a dynamic balance between creating new ETH tokens through staking rewards and reducing supply through transaction fee burns. This balance is crucial for the network's economic model, especially after the transition to a PoS consensus mechanism. The initial allocation of tokens laid the foundation for its widespread distribution, while the ongoing supply management aims to maintain a sustainable economic environment for Ethereum's ecosystem.
What about the team and the investors of Ethereum?
Ethereum was co-founded by eight individuals in 2014. Here's the most notable being and its funding history:
Key Individuals and Organizations
- Vitalik Buterin: The most well-known figure behind Ethereum, Buterin co-founded Bitcoin Magazine and was instrumental in conceptualizing Ethereum. He remains actively involved in the Ethereum Foundation and leads the research team.
- Ming Chan and Jeffrey Wilcke: Chan serves as the Executive Director of the Ethereum Foundation, and Wilcke is a founder who implemented Ethereum in the Go programming language and has been its head developer.
- Gavin Wood: Created the Ethereum Virtual Machine (EVM) and wrote the first technical specification.（Update）
- Numerous Developers and Contributors: Ethereum is an open-source project with a large and diverse community of developers who contribute to its ongoing development.（Update）
Investors:
Ethereum was initially funded through a public crowdsale in 2014, raising over $18 million in Bitcoin. Its development has since been supported by:
- Enterprise Ethereum Alliance (EEA): Includes hundreds of companies and organizations building on or supporting Ethereum for enterprise applications.
- Ethereum Foundation: A non-profit organization ensuring the growth and sustainability of the Ethereum ecosystem.
- Andreessen Horowitz (a16z): A venture capital firm heavily invested in blockchain and Web3 projects, including Ethereum-based startups.
- Paradigm: A leading crypto-focused investment firm that supports Ethereum ecosystem projects.
Funding History
- Initial Concept and Development (2013-2014): Ethereum was initially proposed by Vitalik Buterin in a white paper in late 2013. The formal development began in early 2014 through Ethereum Switzerland GmbH (EthSuisse). The project was announced at the North American Bitcoin Conference in Miami in January 2014.
- Crowdsale Funding: Ethereum's development was primarily funded by an online public crowdsale from July to August 2014, where the Ethereum value token (ether) was sold for bitcoin. This method of funding helped kickstart the development and implementation of the Ethereum platform.
- Launch and Subsequent Developments (2015-2016): Ethereum officially launched in July 2015. The platform has since undergone several protocol upgrades, including the notable DAO event in 2016, which resulted in a contentious hard fork, creating Ethereum and Ethereum Classic.
- Continued Growth and Alliance Formations (2017-present): The creation of the Enterprise Ethereum Alliance in 2017 marked a significant step in Ethereum's growth, attracting major corporate members. Further investments and partnerships continued to support the platform's expansion, including investments from Visa Inc., JP Morgan Chase, and others. Ethereum's journey from concept to a leading blockchain platform has been marked by collaborative efforts, key individual contributions, and innovative funding methods. The project has evolved through various stages, adapting to technological challenges and expanding its influence across multiple sectors.
What is the development history of Ethereum?
The development of Ethereum has seen several significant milestones and events over the years. Here's a chronological list of these key developments:
| Year | Events |
|---|---|
| 2013 | Vitalik Buterin published the Ethereum whitepaper, outlining the vision for a decentralized platform with smart contract functionality. |
| 2014 | Ethereum launched its initial coin offering (ICO), raising significant funds for development. |
| 2015 | Ethereum launched its initial coin offering (ICO), raising significant funds for development. |
| 2016 | The DAO incident occurs, leading to a fork and the creation of Ethereum Classic (ETC). |
| 2017 | Byzantium: Launched on October 16, 2017, it reduced block mining rewards from 5 to 3 ETH, delayed the difficulty bomb, added the ability to make non-state-changing calls to other contracts, and introduced certain cryptography methods for layer 2 scaling. |
| 2019 | Constantinople: On February 28, 2019, this fork reduced mining rewards from 3 to 2 ETH, optimized the gas cost of certain EVM actions, and added the ability to interact with future addresses. Later in the same year, the Istanbul fork (December 8, 2019) optimized gas costs, improved DoS resilience, enhanced Layer 2 scaling, and enabled Ethereum-Zcash interoperability. |
| 2020 | Muir Glacier and Staking Deposit Contract: Muir Glacier, deployed on January 2, 2020, delayed the difficulty bomb, which threatened to degrade usability by increasing transaction times. On October 14, 2020, the staking deposit contract was deployed, introducing staking to Ethereum and impacting the Beacon Chain's timeline. The Beacon Chain itself began on December 1, 2020, marking a significant step towards Ethereum's vision. |
| 2021 | Berlin, London, Altair, and Arrow Glacier: The Berlin upgrade (April 15, 2021) optimized gas costs and supported multiple transaction types. The London upgrade (August 5, 2021) introduced EIP-1559, reforming the transaction fee market. Altair, the first Beacon Chain upgrade (October 27, 2021), added "sync committees" and increased penalties for validators. Arrow Glacier (December 9, 2021) delayed the difficulty bomb. |
| 2022 | Gray Glacier, Bellatrix, and Paris (The Merge): The Gray Glacier upgrade (June 30, 2022) further delayed the difficulty bomb. Bellatrix (September 6, 2022) prepared the Beacon Chain for The Merge by updating fork choice rules and increasing penalties. The Paris upgrade (September 15, 2022), known as The Merge, transitioned Ethereum from proof-of-work to proof-of-stake, a major milestone in its history. |
| 2023 | Shanghai and Capella: Most recently, in April 2023, the Shanghai and Capella upgrades enabled staking withdrawals from the Beacon Chain to the execution layer. |
What is the progress and future roadmap of it?
Ethereum is currently undergoing a series of upgrades, collectively known as the Ethereum roadmap, aimed at improving its scalability, security, and user experience. The main initiatives are often categorized as the "Surge," "Scourge," "Verge," "Purge," and "Splurge."
Key milestones and future plans include:
- The Merge: This significant upgrade, completed in September 2022, transitioned Ethereum from a Proof-of-Work (PoW) consensus mechanism to a more energy-efficient Proof-of-Stake (PoS) mechanism.
- The Surge: This upgrade focuses on improving Ethereum's scalability by introducing sharding, a technique that divides the network into smaller shards to process transactions more efficiently.
- The Verge: This upgrade aims to enhance Ethereum's privacy and security features, potentially through the use of zero-knowledge proofs.
- The Purge: This upgrade will streamline the Ethereum network by reducing historical data storage requirements.
- The Splurge: This upgrade includes various smaller upgrades to enhance performance and user experience.
- Additional developments and future possibilities:
- Layer-2 solutions: Ethereum's Layer-2 solutions, such as Optimism, Arbitrum, and zkSync, offer scalable and cost-effective ways to build decentralized applications on Ethereum.
- Interoperability with other blockchains: Ethereum is exploring interoperability with other blockchains, enabling seamless communication and asset transfer between different networks.
- Enhanced user experience: Ethereum is working on improving user experience, making it easier for individuals and businesses to interact with the network.
Ethereum's Future Roadmap:
https://ethereum.org/en/upgrades/
These links lead to the official Ethereum website, providing detailed information on each upgrade and the overall development trajectory of the Ethereum blockchain.
All important links related to Ethereum
Ethereum Blog: Updates and announcements directly from the Ethereum team.
Ethereum Community and Information:
- Ethereum Stack Exchange: https://ethereum.stackexchange.com/
- Reddit: https://www.reddit.com/r/ethereum/
- EthHub：Community-curated repository of Ethereum-related knowledge and updates.
- Ethereum Block Explorers:
- Etherscan: The most popular Ethereum blockchain explorer for viewing transactions, smart contracts, and wallet balances.
- Ethereum GitHub Repository
- Open-source codebase and development tools for Ethereum.
Related Pages:
Read more about the Layer 1 index that contains Ethereum. You can also check out all available SoSoValue crypto indices.
Curious about Bitcoin and Ethereum's long-term potential? Read this article comparing Bitcoin vs Ethereum.
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Discover the latest staking data for Ethereum on SoSoValue data analysis. Find out how much ETH is currently staked and the overall staking ratio.
Ethereum is the first blockchain project to implement smart contract functions. It carries the largest ecosystem and is currently the second largest project in the crypto.
Ethereum was proposed in late 2013 by Vitalik Buterin, providing a programmable transaction functionality that enables developers to eploy smart contracts，accelerating the birth of dApps for various purposes. In 2014, development work began and was crowdfunded, and the network went live on 30 July 2015.
The milestone event of Ethereum happened in September 2022, the merge of Ethereum was completed. Ethereum 2.0 was a set of three or more upgrades, also known as "phases", meant to transition the network's consensus mechanism to proof-of-stake, and to scale the network's transaction throughput with execution sharding and an improved EVM architecture. The switch from proof-of-work to proof-of-stake has cut Ethereum's energy usage by 99%.
In April 2023，Ethereum completed the upgrade of Shanghai, since then, users could withdraw the ETH staked at the node. This flexible mechanism has also gradually increased the amount of staked Ethereum.
Above are only for introduction, not intended as investment advice.