Ethereum has rapidly become one of the most influential and widely-used blockchain platforms in the world. As the second-largest cryptocurrency by market capitalization behind Bitcoin, Ethereum provides a decentralized virtual machine that enables the deployment of smart contracts and decentralized applications (dapps).
Since its launch in 2015, Ethereum has seen massive growth and adoption across many industries. Decentralized finance (DeFi), non-fungible tokens (NFTs), dao governance structures, and much more have been built on top of Ethereum. The platform now settles over $1.5 trillion in transactions annually.
However, as Ethereum usage has increased, the network has faced challenges with scalability, security, sustainability, and more. The core Ethereum development team has been hard at work building solutions to these issues to ensure the platform can continue to grow.
This article will provide an overview of Ethereum’s past upgrades as well as what’s coming in the future roadmap. We’ll cover the key changes coming to Ethereum over the next 1-5 years and the impact they will have.
A Look Back: Previous Ethereum Upgrades
Since launching its mainnet in 2015, Ethereum has undergone several planned protocol upgrades or “hard forks” to introduce new features and security enhancements. Let’s take a quick look back at some of the major upgrades so far:
Homestead (March 2016)
The first planned protocol upgrade for Ethereum activated in March 2016. Homestead introduced several protocol changes and security enhancements to prepare for wider network adoption.
Byzantium (October 2017)
Byzantium introduced key improvements including:
- Adjustments to Ethereum’s proof-of-work mining algorithm to delay an “ice age” difficulty bomb. This ensured mining would continue to be profitable.
- Added ability to make zk-SNARK zero-knowledge proofs to enable privacy-focused dapps.
- Increased security against denial of service attacks.
Constantinople (February 2019)
Constantinople implemented the following enhancements:
- Transitioned Ethereum towards a proof-of-stake consensus model from proof-of-work. This is a key step towards the Eth2 upgrades outlined below.
- Improved efficiency of the Ethereum Virtual Machine (EVM) that runs smart contract code.
- Introduced native cryptographic functions to Ethereum for contracts.
- Adjusted gas costs for certain operations to optimize fees for users.
Istanbul (December 2019)
The Istanbul hard fork contained further improvements:
- Made the EVM more resistant to certain types of denial of service attacks.
- Enabled interoperability with privacy-focused blockchain Zcash.
- Adjusted gas cost for certain opcodes.
- Allowed contracts to quickly verify if a transaction originated from a specific Ethereum account.
This covers some of the major protocol upgrades that have activated so far. Next we’ll explore the future roadmap and changes still to come.
The Future Ethereum Roadmap
While Ethereum has accomplished a lot so far, even bigger changes are still ahead on the development roadmap. Let’s look at some of the most important upgrades in the pipeline over the next 1-5 years.
Short Term: The Merge to Proof-of-Stake
The most imminent major upgrade is called The Merge, expected to take place over 1-2 releases in 2022.
The Merge will transition Ethereum’s consensus protocol from proof-of-work (where miners compete to add new blocks) to proof-of-stake. In proof-of-stake, users can become validators by staking 32+ ETH to help add new blocks and secure the network.
Some key benefits The Merge will provide:
- Much higher transaction throughput – up to 100,000 transactions per second estimated, compared to 30 TPS currently.
- Significantly more energy efficiency – reduces energy usage by ~99.95%, making Ethereum sustainable.
- Better security via economic incentives for validators. Malicious attacks are financially disincentivized.
- Lower barriers to participation as any ETH holder can stake to become a validator.
- Aligned incentives as validators must hold ETH and want the network to appreciate.
The Merge is the most hotly anticipated upgrade on Ethereum’s roadmap. After years of research and testing, it is nearly ready for deployment. The upgrade will put Ethereum on strong footing for further innovation.
Medium Term: Shard Chains
The next major innovation planned is called shard chains. Shards will greatly expand Ethereum’s capacity from hundreds to potentially tens of thousands of transactions per second.
Here is how shard chains are designed to work:
- The network will be split into 64 new chains, or shards, all secured by proof-of-stake validators.
- Each shard can process contracts and transactions parallel to the other shards.
- This multiplies overall network capacity and throughput.
- Validators will process transactions and create new blocks simultaneously across shards.
- Users will be automatically assigned shards but can optionally switch as desired.
With shards, Ethereum will be able to support large-scale applications with millions of users. The explosion of Web3 and metaverse activity could be supported through massive scalability gains.
Longer Term: Continued Improvements
Even further down the roadmap, the Ethereum core developers plan ongoing enhancements:
- Continued improvements to the EVM and tooling. As Ethereum evolves, so does the EVM to optimize contract execution.
- Ongoing upgrades to improve security and prevent attacks. Security is always job #1 in blockchain networks.
- L2 scaling solutions like rollups and validium to achieve 100,000+ TPS speeds.
- Reducing smart contract gas costs to improve affordability for users.
- Storage rent to lower costs for contracts storing data long-term.
- Governance changes to transition protocol governance to decentralized models.
- And much more! Ethereum’s roadmap will continue evolving as the community determines the priorities.
The next 5+ years will see rapid evolution as Ethereum strives to meet user needs at greater scale.
The Impact: Mass Adoption of Web3
Ethereum’s roadmap sets the stage for an explosion in Web3 and metaverse adoption over the coming years. Here are some of the key impacts to expect:
- Mainstream adoption of DeFi and crypto. Ethereum powers most of the DeFi industry today. With greater scalability and lower fees, DeFi and crypto will become accessible to all.
- The rise of a decentralized internet and applications. Ethereum allows building open, decentralized versions of all major applications including social networks, marketplaces, creative platforms, games, and more.
- Millions of NFT users. As gas fees reduce and scalability increases, NFTs will surpass niche usage to mass consumer adoption.
- The open metaverse goes mainstream. Ethereum’s global computing platform provides the base infrastructure for open metaverse worlds owned by users.
- Enterprises embrace public blockchains. Public Ethereum sidechains that inherit Ethereum’s security will be suitable for major enterprises.
- New business models emerge. New earn-to-play, own-to-earn, decentralized autonomous organizations and more will appear.
- The future of finance is DeFi. Open access, composable primitives will allow the creation of a radically transparent and accessible financial system.
Ethereum is set to enable a whole new Web3 economy and society. An open metaverse, democratized finance, decentralized apps and services, and user-owned economies will flourish on Ethereum’s infrastructure.
Conclusion
Ethereum has already transformed the capabilities of blockchain technology since its inception in 2015. Upcoming upgrades like The Merge and sharding will take Ethereum to new heights in terms of scalability, security, sustainability, and decentralization.
Many challenges still lie ahead in executing on this ambitious roadmap. However, with one of the largest open-source developer communities in the world behind it, Ethereum is poised to succeed.
The next major phase of the internet is Web3 – open, decentralized, and owned by users. Ethereum will be the foundation that makes this revolution possible by providing a global platform to build it on. The future is bright for Ethereum and the new applications it will enable.
FAQ
Here are some frequently asked questions about the Ethereum roadmap:
Q: When will The Merge launch?
A: The Merge is expected to take place across 1-2 hard fork updates, starting between June and September 2022. However, timelines are estimates and subject to change.
Q: How will shard chains affect my ETH and dapps?
A: The shard upgrades will happen behind the scenes. Users won’t have to take any action. Dapps will automatically run across shards to take advantage of the capacity boost.
Q: What happens to miners after The Merge?
A: PoW mining will end on the Ethereum mainnet after The Merge. Miners will be able to continue mining on the original PoW chain now called Ethereum Classic.
Q: Could the roadmap plans change?
A: Ethereum’s roadmap is always subject to change based on community priorities and new research. However, The Merge has been thoroughly researched and is highly unlikely to change.
Q: Will gas fees reduce as a result of the upgrades?
A: Yes, scaling solutions should significantly reduce gas fees, making Ethereum usable for all types of applications.