Ethereum Co-Founder Suggests Technical Solutions To Address ETH's Scaling Issues Are Imminent

March 17, 2021 03:15 PM
Ethereum coin

Ethereum coin




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The amount of USDt supply deployed on the Tron network has reached 45%, compared to 53% on Ethereum (ETH). USDt transfers on ETH have historically been a major contributor to ETH capacity challenges. This shift coincides with comments from Vitalik Buterin, which suggest technical solutions to address scaling issues are imminent.

Ethereum can roughly be described as a decentralized computing network. This network’s capacity to process computation has been far outpaced by its growing usage, i.e. USDt, decentralized finance, and exchange deposits/withdrawals. As such, the price per unit of computation capacity has risen to the point where applications, such as USDt, have become difficult or uneconomical to use. 

In a podcast last week, the network’s founder Vitalik Buterin said he believes Optimism, a startup developing scaling technology for Ethereum, will launch its “Rollup” solution “fairly soon.”

Broadly, Rollups— which are being developed by a number of startups— are smart contracts that process activity off of the main Ethereum chain, and then communicate large chunks of data to the network which serves as a final settlement layer. This implies that demand for Ethereum can shift to Rollups, alleviating the computational capacity of the main network. 

Buterin implied that Rollups can increase the capacity of Ethereum by a factor of 100, allowing the network to process “somewhere between 1,000 and 4,000 transactions a second, depending on how complex these transactions are.” The network currently processes about 15 transactions per second.

 In Buterin’s view, Rollups can solve Ethereum’s scaling challenges until ETH 2.0, which promises to further increase scalability, is fully operational; though he admits it’ll take time with teams to become familiar with the new tech. Buterin has previously endorsed other scaling tech, like Plasma, an off-chain computation solution similar to Rollups in concept. 

For example, in a 2017 tweet, Buterin wrote, “For the record: I said ethereum (+plasma et al) *will have Visa-scale tx capacity*, not that it will ‘replace Visa’. Sigh.” Plasma was introduced via a 2017 whitepaper co-authored by Buterin, which described the solution as being “scalable to billions of computations per second with minimal on-chain updates.”

Plasma has seen limited uptake, if any, and was revisited by Buterin, who wrote about “Plasma Cash: Plasma with much less per-user data checking,” in 2018.

Ethereum’s scaling has been a central contention to the network’s growth since its launch. However, the network’s capacity has largely remained flat with unsuccessful solutions proposed along the way. 

Buterin has used his outsized role in the Ethereum ecosystem to influence expectations and manage a vision for the network. For example, in October, Vitalik described a “Rollup-centric Ethereum roadmap” where the scaling tech is prescribed as the answer to scaling in the medium term. 

As Ethereum congestion rises in parallel to the emergence of rival networks, Buterin’s confident comments, such as those regarding Rollups, should be considered in the context of past statements that haven’t panned out.

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