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Interpret the four EIP that will be activated in the Shanghai upgrade of Ethereum

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Why the urgency of this Shanghai upgrade? Currently Ethereum, which can be stored but not withdrawn, is "trapped" on the Ethereum network with a total pledged value of nearly $23.5 billion.

[Interpretation] Four EIP to be activated in Shanghai Upgrade of Ethereum

The Lord of the Fourteen

After the Ethereum Paris upgrade (merge, consensus to POS) another major update is coming -- the Shanghai upgrade! At present, the core community of Ethereum with thousands of professional developers has gone through 15 mainnet upgrades in the past 15 years, and this Shanghai upgrade will provide unlocking capability for the 23 billion dollars of POS pledged ETH locked on the chain, along with the integration of many EIP for GAS optimization.

Take a closer look at the role, principles, and application directions of the EIP proposals that will be activated on the mainnet

1. Background

1.1 main llevel

In 2015, Ethereum proposed four stages: frontier, homestead, Metropolis and tranquility. It is well known that the symbol of the "quiet" stage is just 2 months ago that the Ethereum consensus algorithm changed from POW computing power mining to POS equity pledge mining. Now it is the chief public chain that is energy saving, safe and decentralized enough. Every time the main network is upgraded, its name is Berlin, Paris and Shanghai. There have been many other major network upgrades in history that have brought great changes.

1.2 Review 5 August 2021 - London Upgrade

At block height 12,965,000, Ethereum completed a hard fork upgrade code-named "London", involving five proposals. The most significant was the launch of IP-1559, which was proposed by Ethereum founder Vitalik Buterin. From now on, every transaction on Ethereum will burn basic gas fees. This will automatically reduce the supply of ETH in circulation, sending Ethereum tokens into a deflationary era.

Let me give you an example.

Ip-1559 has changed the calculation logic of Gas fee for those with a higher price. Before, in order for miners to timely package their transactions, users need to increase the price to pay miners' fee. The higher the bid, the greater the probability of being preferentially packaged, which will result in unlimited growth of Gas fee to a certain extent. The tip to the miner incentivizes bidding out blocks, and the base fee is destroyed. Although there is still some bidding out of the block, miners' profits are down by around 20% and the economic model has shifted into deflationary mode.

Essentially, the 1559 design takes advantage of the second price auction model, which ultimately allows all transactions in the same block to pay roughly the same price, which is fairer to users (i.e. because transactions that pay the base price are always packaged, distinguishing between urgent and regular transaction needs).

2. Shanghai Upgrade

Why the urgency?

In the past, it is common to carry out a major upgrade only one or two years, such heavyweight upgrade as the merger consensus conversion will be tested in advance after 1-2 years of stable operation of the network will really step into the main network upgrade, then why the Shanghai upgrade is so urgent?

What about the EIP that will be basically finalized in just two months? The central factor is that all transactions on the merged Ethereum network will no longer be verified by energy-intensive "miners", but by individuals and organisations "validators" who have deposited or pledged large amounts of ETH. For the verifier, the ETH they pledge can generate and collect new ETH. The so-called "new ETH" is the reward for them to prove the verification transaction and protect the network.

But currently Ethereum, which can be stored but not withdrawn from ETH and has a total pledged value of nearly $23.5 billion, is "trapped" on the Ethereum network. If the unpledge function is not opened as soon as possible, the appeal of pledged ETH will be greatly reduced, and there will not be so many people entering the Ethereum network in the future, which will undoubtedly have a huge impact on the future development of Ethereum and network security.

3. Detail interpretation

According to the latest github update record submitted in Shanghai on October 28

https://github.com/ethereum/execution-specs/blob/master/network-upgrades/mainnet-upgrades/shanghai.md

3.1 & have spent Ip-3651: Warmer COINBASE

https://eips.ethereum.org/EIPS/eip-3651

What is he?

The translation of the title is rather confusing. COINBASE is not the company behind the trading platform. It comes from the concept of Bitcoin, where the first transaction in a block is a special transaction called a creation or coinbase transaction, which was originally designed to be used by miners to collect gas tips from mining.

Warm and cold, which refers to whether the transaction is pre-loaded or not, affects the gas fee for the miner to package the coinbase transaction

If there is no pre-loading, is cold, then Gas cost is higher

If it is pre-loaded and is warm, the gas bill is lower

What's the use?

现在矿工打包的交易可能可以用作更多用途，比如 ERC-4337 中用于收集用户签名后，批量实现交易，其次也可以用同类原理来实现多种 Token 结合逻辑的元交易支付等。

Before EIP-3651, more incentive to use ETH payment method

After IP-3651, more incentive to use ERC20 payment method

In short, it is a transaction type proposal that affects incentives.

3.2 & have spent Ip-3855: new PUSH0 instruction

https://eips.ethereum.org/EIPS/eip-3855

What is he?

For the EVM, the Ethereum virtual machine (the system that executes the contract code), there are several instructions designed, but the previous design of push0 is not designed for the value of the stack, and this EIP adds PUSH0. 0x5f) Instruction, which pushes the constant value 0 onto the stack. This instruction needs 2.

What's the use?

The result of the absence of push0 is that some operations that rely on the offset of 0, such as remote call and return, have many arguments that are 0. To operate 0, the only alternative is to use the instruction PUSH1 0, which costs 3 gas. Secondly push1 & have spent As a result, the cost of deploying this contract is also 2*200gas. The EIP also calculates the resulting gas losses: Of the existing accounts, 340,557,331 bytes were wasted on the PUSH1 00 instruction, representing a deployment loss of 68,111,466,200 gas

In short, a proposal to reduce meaningless GAS consumption.

3.3 & have spent Ip-3860: Increased initialization code limit

https://eips.ethereum.org/EIPS/eip-3860

What is he?

When the contract is deployed, there is an initial code size. Based on EIP170, the initcode size is limited to 24576, but now the maximum size limit of initcode is increased to 49152, which is doubled. And apply an additional gas cost of 2 for every 32 bytes of initcode block

What's the use?

Obviously, the larger code capacity allows the smart contract system to do more things. The current code size of only 24kb makes it difficult to implement the system with a single contract. Previous temporary solutions were deployed in multiple contracts and then called to each other, but it is clear that cross-contract reference is a high gas cost.

In short, a proposal to raise the cap on smart contract systems and reduce gas consumption.

3.4 & have spent Ip-4895: Beacon chain to draw as operation instruction.

https://eips.ethereum.org/EIPS/eip-4895

What is he?

It can be said that this is the core of the Shanghai upgrade. As a result, it implements a pledged ETH withdrawal operation by introducing a system-level directive withdrawal based on beacon chain (consensus layer) information, giving direct and unconditional control of ETH balances at specified addresses. There are many ways to execute the withdrawal operation. The characteristics of this withdrawal operation are as follows: it is initiated by the system itself, rather than by a user. It is more concise and easy to review without gas consumption. No EVM execution process, using the simplest implementation strategy.

What's the use?

Don't forget that there are still 1,400 million ETH worth $23.5 billion "trapped" in the Ethereum beacon chain.

4 What is the focus of the future Ethereum?

The chart below shows the latest roadmap released by Ethereum founder VitalikButerin. The green section represents the progress of progress. You can see that there are still a lot of goals around performance, security concerns, privacy, and account system AA (based on 4337) that have been found.