With Rollup at the center, the importance of Ethereum protocol upgrades is gradually decreasing

Original author: Christine, Galaxy Research

Original translation: Ismay, BlockBeats

Editors Note: As Ethereum gradually shifts to a Rollup-centric development roadmap, the importance of its protocol changes is gradually diminishing. This article delves into the reasons for this shift and its potential impact on the ecosystem. By analyzing the changing priorities of Ethereum protocol developers, the author reveals that as Rollup matures, the direct impact of protocol-level changes on users will decrease. The article also quotes the views of Aya Miyaguchi, executive director of the Ethereum Foundation, emphasizing the risks and necessity of reducing the roles of protocols and foundations. At the same time, this article points out that the core building blocks of future finance are being built outside of the protocol, and Rollup and other innovative technologies will gradually surpass the importance of Ethereum upgrades in the ecosystem.

The following is the original content:

Christine Kim of Galaxy Research attended the seventh annual Ethereum Community Conference (EthCC), which was held for the first time in Brussels, Belgium. This year’s venue was changed to avoid a conflict with the 2024 Summer Olympics in Paris, France. Jerome de Tychey, president of Ethereum France, announced on the last day of EthCC that the conference would not return to Paris next year. EthCC[8] will now be held in a new destination, Cannes, France, in 2025.

In this note, Christine shares her key takeaways and learnings from the EthCC conference.

Analyzing the future impact centered on Rollup

At this year’s EthCC conference, I came to an important realization about Ethereum protocol development. The Rollup-centric development roadmap means that changes to the Ethereum protocol will have less impact on end users over time. This is a fairly obvious and in many ways positive conclusion for the ecosystem, but there are some lesser-known and potentially difficult truths implied by it that are worth exploring in depth.

As Ethereum protocol developers increasingly focus on optimizing Data Availability (DA), the rest of the Ethereum ecosystem will pay less attention to and participate in protocol development.

Ethereum as an execution layer will become less relevant to users as they migrate to Rollup as the primary touchpoint for value transfer and interaction with decentralized applications (dapps). The primary responsibility for improving user experience (such as transaction speed, ordering, and confirmation) will fall primarily on Rollup development teams.

Therefore, the most important upgrades for users will occur on Rollup, not Ethereum. On Ethereum, protocol developers will prioritize improving the functionality of the protocol as a DA layer. In fact, this has already been reflected through code changes in the Dencun and Pectra upgrades.

As protocol developers increasingly focus on optimizing Data Availability (DA), the technology needed to achieve breakthroughs in Ethereum’s user experience will be built primarily by Rollup teams rather than client teams. With all the buzzwords that attract investor and developer attention on EthCC, such as Maximum Extractable Value (MEV), Trusted Execution Environments (TEEs), Account Abstraction, Intent, and Pre-Confirmation, the relevance of Ethereum as a DA layer is waning, while the relevance of Rollup as the execution environment for the next wave of major cryptocurrency adopters is increasing.

Innovative solutions and cutting-edge technologies to solve the most difficult problems of crypto user experience will be increasingly led by core development teams outside of Ethereum. This will also lead to more and more protocol developers and client teams working on Rollups to continue to advance Ethereums mission, even as the use cases and functionality of the Ethereum protocol become narrower and narrower.

Some high-profile Ethereum core developers, such as Ben Edgington and Protolambda, as well as client teams such as Prysmatic Labs, have reached this conclusion and are now working full-time on the Rollup team.

As protocol developers increasingly focus on optimizing for data availability (DA), their visibility and influence over the values and ethos driving product and application development on Ethereum will decrease.

For most of Ethereum’s history, code changes activated via hard forks had a direct impact on user behavior. Protocol developers adjusted the prices of certain opcodes, introduced new precompiles, and removed features like gas refunds.

While many Rollups today take great care to mimic Ethereum’s execution environment, their maturity will lead to greater deviations as Ethereum reshapes into a DA layer. Due to competition and the changing regulatory environment, the same values that guided Ethereum’s design choices as an emerging general-purpose blockchain will not necessarily influence Rollups in the same way. As Ethereum’s user base migrates to Rollups, protocol developers must recognize that the ability to influence and correct on-chain user behavior through protocol changes will be reduced.

Ethereum upgrades are becoming less important

As protocol developers pursue Rollup-centric roadmaps more seriously, the importance of protocol changes on Ethereum will gradually diminish. In many ways, the pros and cons of minimizing Ethereum’s role in the ecosystem are similar to the pros and cons of minimizing the Ethereum Foundation’s role in the ecosystem.

The mentality of reducing the role of the protocol to help expand the scope of the protocol is risky, but also necessary for decentralization. This is a vision of Ethereum, as Aya Miyaguchi, executive director of the Ethereum Foundation, said when explaining her vision for the Ethereum Foundation:

“The best part about Ethereum is its decentralization, and because of that, the ecosystem has its own unique challenges. I see subtraction as a strategy to achieve two main goals. … The first goal is to find the right balance. Building an Ethereum Foundation empire and solving all problems ourselves might make us look good in the short term, but it will make others feel that the ecosystem is not built for everyone, and the Ethereum Foundation will become a single point of failure. If we keep adding, the ecosystem will always be dependent on the Ethereum Foundation.”

There was a large number of side events at EthCC, which is not a new phenomenon during Europe’s largest Ethereum conference. However, this year the side events were more important than in previous years, becoming the main event to showcase new ideas, experimental technologies, and important discussions most relevant to Ethereum users.

While protocol developers were well represented at EthCC, and the topic of Ethereum as a protocol headlined the EthCC agenda, it was not the focus of many attendees during conference week. This is because the building blocks of future finance are being built elsewhere, outside of protocols.

Therefore, even though Ethereum protocol developers may make radical and ambitious code changes to the core protocol, their relevance in the ecosystem should diminish over time. It is time for innovative solutions and new technologies built on and beyond Rollups to outweigh the importance of Ethereum upgrades.

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