After talking about RWA, let’s talk about something worth mentioning on ETH and Solana
Let’s talk about ETH first
The most noteworthy thing about ETH should be the Native Rollup proposed by Justin some time ago. This is a further expansion of the current Based Rollup, but of course the implementation difficulty is much greater.
Let me first briefly talk about Based Rollup -
This is what Puffer/Taiko is doing. Compared with traditional L2, the sorting rights are given to L1. There are two main benefits. First, L1 can capture more value. Second, all Based Rollups are theoretically interoperable.
I was originally confused about 2, but later when I was chatting with a Based Rollup project, I asked the Founder and confirmed that interoperability is indeed possible, because in any 12S slot on L1, there is a certain selected validator responsible for block production, and the sorting of all Based Rollups will be the responsibility of that selected validator, so these Based Rollups can indeed form interoperability.
But there are two follow-up questions that arise
1 is one of the L2s that currently occupy an absolutely important position. I can’t think of any motivation to transform into Based Rollup
Second, if there are dozens or hundreds of Based Rollups in the future, the burden on the validator responsible for producing blocks on L1 will be much greater, and the hardware requirements for him will definitely be much higher than now. And because the validator is randomly elected, that is to say, the hardware requirements of all candidates must also keep up, otherwise you will not be able to withstand the sorting of these dozens or hundreds of L2s, and the decentralization of ETH Validator will inevitably be greatly affected.
Regarding these two questions, please leave me a message for discussion.
Let’s talk about Native Rollup
Based Rollup gives the sorting right to the L1 verifier, while Native Rollup gives the proof system to the L1 verifier, and introduces a pre-compilation to allow L1 to perceive the state transition of Native Rollup in each block (this pre-compilation blind guess needs to be added in a hard fork upgrade). In the early stage of the proof system, Re-execution (that is, the L1 verifier runs the transaction himself) was used as the initial solution, and Real-Time Proving (based on Snark proof) was used as the optimization solution, but this requires a significant improvement in ZK technology (the proof of a block can be produced within a few seconds, which is completely unattainable at present, and it is estimated that it will take at least 3-5 years)
There are three points worth mentioning about Native
1. You will find that this is actually very similar to the earliest ETH expansion plan. How can this be called a Rollup? Isn’t this just sharding?
Second, you will find that ETH and Solana meet at a certain point. Solana’s two expansion projects, MagicBlock’s Ephemeral Rollup and Lollipop’s extended execution layer, are somewhat similar to Native Rollup, and both have a sense of sharding.
3. I am not 100% sure but I think/hope that it is like this, that is, the user experience of Native Rollup and MagicBlock does not require users to switch networks. That is, you stay on ETH/Solana L1 on MetaMask/Phantom, and your assets do not go in and out of L2 through the bridge. Native/Ephemeral Rollup only acts as an external execution layer to complete the calculation, and then automatically completes the settlement on L1, so that there will be no island problem in liquidity.
However, I always feel that ideals are full, but reality is very skinny. Not to mention the technical difficulty and time for implementation, the existing L2 interest division problem alone makes it difficult for people to be optimistic. The development of the currency circle has long ceased to be the spirit of crypto punk and technology first, but the arena of the world.
As for the Prague upgrade next month, there are already many articles on the Internet interpreting it, so I will not repeat them here. I hope that after this upgrade, 7702 can put an end to the chaos of account abstraction of various EIPs and come up with a final solution at the chain level. Of course, whether the end users and developers will buy it is another story.
Then let’s talk about Solana
There are also two things worth mentioning about Solana recently.
One is the SIMD-0228 proposal which was very popular some time ago.
The proposal is basically to change the current Sol inflation from the current fixed annual 15% reduction to an inflation rate that is dynamically adjusted according to the pledge rate.
In general, there are several characteristics
1. MEV revenue status improves (Solana's MEV revenue in Q4 2024 is 10 times that of Q1, but with Pump.fun shutting down, I am curious about what level MEV revenue will be in 2025)
2. Dynamic adjustment of additional issuance, setting three balance points of 65%, 50%, and 33% according to the pledge rate
3. The new proposal is not too disadvantageous to small and medium-sized validators
4. Solana is also shifting from “overpaying to ensure safety” to “looking for the minimum necessary payment”
The proposal ultimately failed because it did not receive 66.7% of the votes in favor, but it was not far off. 61% seemed to be
Although the proposal was not passed, there are two interesting points worth mentioning.
1. Antatoly was not too frustrated. He believed that "Solana's governance needs to be fast and decisive, and fast governance actions will be the key to finding better solutions." In other words, the failure of SIMD-0228 is also a reflection of the high efficiency of Solana's autonomy. This proposal took only about one month from Multicoin's initiation to community discussion to the end of voting. "Quick pass/fail" and then the next one is very important for the fast-evolving Solana
2. The interpretation of the inflation rate of this proposal by Chinese media is almost all wrong. Most Chinese media, including Chinese Twitter, interpret the inflation part of this proposal as "reducing inflation by 80%, that is, reducing inflation from 4.8% to about 0.8% under the current staking rate of about 65%. I was shocked when I first saw it, and I changed several Souces and they all interpreted it this way! How is it possible? The validators are going crazy! Even if Mev income increases, the additional issuance income will be reduced by 80% in an instant. The rhythm of Validator is going to go on strike... Then I went to read the original proposal and the interpretation of KOLs in the English area. Under the current staking rate, it should be reduced from 4.8% to about 4% by 0.8%, not directly to 0.8%. It is estimated that the author of the earliest interpretation article in the Chinese area misread the formula and directly understood it as a reduction to 0.8%. All the media + KOLs copied the homework directly, and then copied it wrong collectively. .
The second thing I want to talk about is actually not news. It is something that will be available in 2024, but the first time I knew about it was when I was chatting with the founder of an RWA project on Solana. It is Solana Token Extension. I guess many of you don’t know it, so let me share it.
Solana Token Extension - A new generation of SPL token standard, a Solana chain-level token solution, including private transactions (only the amount of privacy is private, the transfer parties cannot hide), transfer hooks (such as requiring KYC, mandatory royalties), non-transferable tokens (similar to SBT), interest-bearing assets, metadata, etc., a total of 19, which can be used in any combination
This is also the main reason why the RWA project uses Solana. In addition to TPS, Solana has chain-level native privacy, KYC and other token standard solutions, which are composable, which is much more flexible than the various ERC token standards on ETH. For the new generation of Move chain, it is not possible to have such rich native-level availability for the time being, so Solana has become their only choice. This also makes me more confident in Solana. Solana can do much more than just Pumpfun and Meme. I believe that the flexible use of these Token Extensions can create many meaningful projects.
Finally finished talking about ETH and Solana, this weekend I will write the last article of this series, Observations and Thoughts on Crypto X AI in 2025
