Insights and Reflections from Devcon: Ethereum is Showing Signs of a Nation, with Abundant Technology and a Lack of Applications

Author: kirinparadise.eth (Alen), Co-founder of y2z Ventures

This is my second visit to Bogotá this year and my first time at Devcon. Unfortunately, everything has changed.

My colleague, Dazhuang, has been saying that this year's Devcon is the first one held in three years, and the Devcon in Osaka in 2019 saw the emergence of DeFi projects like Comp and Uni, marking the dawn of DeFi Summer and even leading to the bull market at the end of 2021. So, since the beginning of the year, I felt that this Devcon was very important, especially in the current context where the narrative cycle has passed and innovation is lacking.

Here are some notes and reflections:

1. Ethereum has shown the embryonic form of a network nation

At the closing ceremony, it was mentioned that there were 6,000 attendees from 113 countries at this Devcon. As the dance troupe "Encore" entered the stage, raising flags from various countries and performing with the unique Latin American dance, the atmosphere became electrifying. The energy was so high that it felt less like Devcon and more like a carnival, a Spring Festival Gala, or the Olympics.

I believe every attendee felt a sense of identity, not related to nationality, but rather a recognition of participating in the Ethereum or cryptocurrency revolution.

Holding Devcon in Bogotá highlights the ambition of the Ethereum Foundation (EF) to expand into developing countries, combined with an important aspect of this Devcon: Global Impact and Public Goods.

Throughout the venue, various organizations were seriously promoting their ideas and attempting to implement technologies.

It can be said that compared to a single organization, Ethereum truly exists like a "network nation," actively exporting values and influence.

In the coming years, Devcon may become a symbol of global peace and equality, much like the Olympics. Considering the increased likelihood of future conflicts, the new light of civilization is worth looking forward to.

2. Abundant technology and a lack of applications

The key technical terms for this year's Devcon are basically ZK, L2, MEV, and new hot topics should be Danksharding and AA (account abstraction).

I'm not a tech guy, but here are my thoughts:

1) ZK: I couldn't understand the various hardcore technologies, but the scale was impressive. They said progress is definitely faster than before, but when I asked, it still seemed quite far from actual implementation. Additionally, my impression at the venue was that among the popular ZK Infra, Scroll stood out more and felt more grounded. You can check out the ZK application Showcase here, but it seems the video hasn't been uploaded yet, and there were long queues to get in.

2) MEV: Although MEV wasn't categorized this year, it and Validators basically dominated the Cryptoeconomics category. In the future, I might pay more attention to how the size of the MEV pie and its distribution will change with the evolution of the Ethereum ecosystem.

3) Danksharding: This year's new hot topic is Danksharding, which aims to solve Ethereum's scalability issues using DAS. It's quite complex and probably won't officially launch for another two years. However, Proto-danksharding (aka. EIP-4844) will launch next year, which will also be usable and will benefit those two OP Rollups.

4) Account abstraction and the derivative 4337 is another major topic this year. It should be the technology that is closest to Mass Adoption in this year's conference. The second-place team in the AA-themed Hackathon mentioned that what attracted them most about AA is that users can control their accounts with private keys and can switch wallets anytime if they don't like it. In the future, with smart contract wallets, users will no longer solely rely on private keys to control their accounts. This will lead to many changes and explorations in business models.

You can check out this thread from the Unipass team:

In summary, next year Proto-danksharding + L2 can address some scalability issues, and AA can solve user onboarding problems. I hope to see applications that can create significant CX through the above.

However, I did not see any projects in the applications that could replicate the dawn of the bull market like Comp or Uni in 2019, which suggests that this round of innovation cycles may take longer than expected.

The most impressive application was the physical cards from the collaboration between ENS and POAP. By registering for swag online with ENS, you could receive a physical POAP tag, and by tapping your phone NFT, you could obtain proof of "meeting xxx at Devcon6." A few days ago, the queue for obtaining the physical POAP was the longest; this application case is simply a marketing genius, and there was even a leaderboard, where I encountered many people who specifically wanted to scan my POAP. It was comparable to the best icebreaker tool. The consensus between ENS and POAP is terrifying, and I look forward to seeing what other interesting applications will grow from this.

POAP physical card

What amazed me the most was the on-chain gaming engine mud.dev designed by 0xparc using first principles, along with two games they released (one RTS and one on-chain Minecraft).

For two consecutive afternoons, in the cyberpunk-lit basement of the venue, we directly participated in a 4-player PK of Dark Forest and tried out the two games. The team was nuts, and the atmosphere was high.

Live testing, unfortunately, the network was poor

(In the future, investment institutions must personally participate in "stealing vegetables" games to obtain tokens, haha)

In contrast to the abundance of technology, there is a lack of applications. This phenomenon may be best reflected in on-chain gaming, as stated in the PPT above, "It's gonna be nuts." Although I believe on-chain games will be the future, their long-term lack of commercialization is also a reality. I can only say that nuts are responsible for building the technical foundation and crazy innovation, while large-scale promotion relies on other opportunities and organizations, which have yet to appear at this Devcon. Otherwise, Ethereum's desire to truly impact all of humanity and the people in developing countries will be hard to achieve.

"I take care of looking good, you take care of making money," decentralization, composability, modularity, and everyone doing their part can lead to a win-win-win situation.

Before the opening of Devcon, when I was scouting the venue, I found that a coffee expo was being held across the street in Colombia. I was fortunate to act as a "taster" and tried six types of coffee at once. While tasting, I could intuitively discern the differences that I usually wouldn't notice. However, most ordinary enthusiasts wouldn't taste multiple types of coffee at once. This reminded me of a metaphor used by Chess a few days ago, which I think is very appropriate to describe the current state of technology and applications.

The current architecture is like a recipe, with various technical categories serving as ingredients. For example, tomato scrambled eggs. The recipe defined by Vitalik describes how to cook a delicious plate of tomato scrambled eggs, so various technologies began to research how to grow good tomatoes and raise good eggs. If we compare zk technology to tomato farmers, various technologies are like those saying, "I want to grow sour tomatoes," while another says, "I want to grow sweet tomatoes." If we compare L2 to egg suppliers, various projects are saying, "I have free-range eggs," "I have sterile eggs," etc. However, the frustrating thing is that these suppliers say, "It will take me 1 or 2 years to supply goods; I'm still planting."

But not all diners will care about the 100 ways to prepare tomatoes and eggs, just as not everyone has the opportunity to taste six types of coffee to discern the differences.

What users need is still a plate of delicious tomato scrambled eggs. While they can eat other dishes, isn't it said that tomato scrambled eggs are delicious? We must provide users with a hot and tasty plate of tomato scrambled eggs. At this point, the chef needs to find a way to make a delicious plate of tomato scrambled eggs with the limited ingredients available, and ensure that users are willing to pay for it. This is what various applications need to do now: under existing technologies, attempt to create dishes that users are willing to eat, and gradually replace them with better ingredients, and even later specify ingredient suppliers.

Speaking of cooking, which country's chefs do you think cook the best?

3. The balance of "orthodoxy" and the EF's subtract philosophy

"Orthodoxy" is a universal term in the cryptocurrency world, as if all problems can be solved with the endorsement of the word "orthodoxy." Once it is established, everyone becomes patient, and smiles become brighter. Coming to the "orthodoxy" stronghold this time felt refreshing.

After Rollup Day, I discussed some MEV issues with Teacher Lin @blankerlin. He mentioned that many issues are difficult to discuss together because there is too much background information on many technologies. It's like the Marvel Cinematic Universe, where the branches become increasingly complex, and each hero continues to have sequels. If newcomers haven't watched the previous series or haven't seen a summary video of several minutes, it's basically impossible to discuss together. Of course, this is a normal phenomenon. However, in such an environment, it is easy to give rise to so-called authorities. Due to the special nature of technology and academia, in traditional markets, this might be called academic hegemony. When academic hegemony combines with capital and media, the power of discourse and pricing power is greatly amplified.

Ethereum has been upgrading continuously, and each upgrade brings a new wave of project opportunities (such as new concepts like danksharding and account abstraction wallets). New concepts and new projects mean new interests. "Orthodoxy" is the universal term for capturing this layer of interest, and whether Ethereum can maintain its orthodoxy while moving towards a small circle and nepotism is a question.

In some categories lacking sufficient competition, "orthodoxy" is necessary. However, in categories where competition is sufficient, perhaps "orthodoxy" should not be overly mythologized, just like Arbitrum in relation to OP.

Conversely, the benchmark definition of orthodoxy sets the track and valuation, while the bias against challengers leading to valuation inversion may present investment opportunities. As Chess said, religion is indeed sacred, but high productivity's dimensionality reduction strikes are also very real.

Aya, the Executive Director of EF, mentioned during the opening ceremony that the Ethereum Foundation aims to achieve a philosophy of "restraint" in senior management, minimizing governance, distributing opportunities, and allowing peripheral organizations more chances to participate, etc. This is the real antidote to the aforementioned issues, at least conceptually.

I hope a balance can be achieved.

Philosophy of restraint

4. The collision of decentralization and regulation

Another important topic at this Devcon is the response to regulation.

As the scale of Ethereum or the cryptocurrency circle grows larger, more and more governments see its value or "threat." Naturally, this leads to unavoidable collisions with centralization. For example, Europe has begun to impose foreign exchange controls on dollar stablecoins like China, and there are regulatory issues regarding Ethereum nodes, although I didn't hear much about this. However, Tang Han's thread on regulation was very enlightening (ps. I felt the same shout as Teacher TT from Tang Han's words, the power of scarcity! So moving!)

Starting next year, it will be a hard year for the collision between the decentralized world and the centralized world of regulation.

At the opening ceremony, compared to the awkward dance of Vitalik and the Ethereum Foundation before, this time a professional local Colombian dance troupe was invited, which improved the effect significantly. However, in the visible future, various external environments are unlikely to be "friendly" to cryptocurrencies. For the network nation to truly take root and continue the spirit of globalization through cryptocurrencies, it must confront many real "hard bones" in advance. At that time, there may be no time to appreciate the professional dance troupe, but it won't stop the crypto punks from jumping awkwardly once again.