Five Major Trends in Blockchain Technology Development in 2023

Ethereum Important Technical Upgrade

1. Shanghai Upgrade: The withdrawal function will be opened, which is expected to increase staking volume and intensify competition among staking projects.

2. Cancun Upgrade: The most significant technical upgrade of Ethereum in 2023.

   • Proto-Danksharding: Aims to reduce mainnet transaction fees and hopes to increase performance by several times.
   • EVM Object Format (EOF): Optimize EVM, improve smart contract execution performance, and reduce transaction fees.

3. Prepare 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.
   • Danksharding's success will mark a significant advancement in Ethereum's scaling journey.

4. Important Topics: MEV, Regulation and Anti-Censorship

   • Decentralized block builder network
   • Cross-chain Heterogeneous Chain MEV Unified Platform
   • The protocol layer PBS realizes the separation of proposal, construction, and verification.
   • Improve the issue of luck similar to PoW in staking

Staking Track Development

1. Liquid Staking: Improve the liquidity of staked tokens, such as stETH.

2. Decentralized Staking: Needs to improve the issue of insufficient liquidity.

3. Restaking: The "secondary staking" innovation proposed by EigenLayer.

4. Decentralized Validator Network (DVT): SSV and Obol explore technological solutions.

5. Staking yield stabilization: Addressing the issue of excessive yield disparity among different nodes.

Development of Multiple Versions of Ethereum Clients

1. Paradigm's Reth: Adopts a modular client design.

2. Helios of al6z: Coupling of execution layer and consensus layer clients.

3. Self-hosted Blockchain Explorer: Developed based on a new type of client, solving the centralization issue.

Modular Blockchain Technology Progress

1. New competitors in data availability layer: such as Polygon Avail.

2. Flexible and efficient execution layer:

   • Fuel uses UTXO and a highly parallel virtual machine
   • Rooch and other execution layer networks

3. Layer2 Optimization Plan:

   • AltLayer: Modular Rollup
   • OP Stack: Quickly build Layer 2
   • Stackr, dymension: Quickly build application-specific Rollups

4. Solve Sequencer Centralization:

   • Shared sequencer service
   • Decentralized Sequencer Design

5. Layer3 Development:

   • Further vertical scaling based on Layer2
   • Such as Starknet's Slush, zkSync's Opportunity

ZK Applications and Other Innovations

1. zkEVM mainnet launch: Multiple projects are expected to release testnets or mainnets in 2023.

2. ZK Application in Non-Scaling Areas:

   • zkBridge: Validator signature ZKization or PoS consensus ZKization

3. Cross-chain Trend:

   • Multi-chain applications: such as identity and record cross-chain authentication
   • Cross-chain MEV: The MEV issues between Layer 2 and Layer 1 are prominent.
   • Inter-chain Security: Cosmos Shared Security Solution

4. Wallets and User-end Applications:

   • MPC (TSS) has become the standard.
   • Account abstraction (AA) combined with MPC
   • Payments and financial service innovations on the Lightning Network

5. Web3 Developer Tools:

   • Move Language Ecosystem Development
   • Layer2 development ecosystem, especially zkVM
   • Low-code, no-code tools
   • Data Middleware and Endpoint Services

These technological hotspots will drive the continuous innovation and development of the blockchain industry in 2023.