Ethereum is being fundamentally renovated. In addition to Medalla, the Testnet Optimistic Ethereum is also live, turning the block chain interior upside down and putting scaling solutions through their paces.
The Ethereum network is gradually bursting at the seams. The rapid growth of the DeFi sector is increasingly testing the limits of the Ethereum Blockchain’s resilience. While the total volume of tokens bound in DeFi applications (Total Value locked) was around 700 million US dollars at the beginning of the year, it has now exceeded 11 billion US dollars.
As a result, DeFi is increasingly clogging up the transaction channels and is gradually driving up the corresponding fees. The total transaction fees for 2020 in the Ethereum network already amount to 354 million US dollars. By comparison, fees in the Bitcoin System network have so far totalled US$ 157 million.
The increase in fees clearly shows that Ethereum has a scaling problem. To get to grips with this problem, developers are working on different approaches to solving it, which will be tested in various multi-client testnet environments before the Mainnet launch.
Light at the end of the tunnel
One of them is from the Plasmagroup, which recently launched the first phase of the Testnet Optimistic Ethereum. The team is developing a layer 2 scaling compatible with the Ethereum Virtual Machine (EVM) to process data and transactions faster.
The Testnet will go through a total of four phases in which more and more Mainnet conditions will be simulated.
Synthetix will be the first early adopter to test the scaling solutions and provide 200,000 SNX as rewards for participating in the network. According to the development team, the test network is open for public use, but is still bug-prone and not suitable for contract processing.
Ethereum-Testnet Medalla on the right track
The official testnet Medalla also reports progress towards the 2.0 version. According to beaconcha.in, the Testnet environment currently counts 63,290 validators, of which almost 2 million are staked by the Görli ether test token (GöETH).
Medalla, however, represents the last major Testnet environment before phase 0, which is to be introduced by the end of the year and in turn represents the actual start of Ethereum 2.0. Under the upgrade name Serenity, Ethereum will then go through two further phases, at the end of which all functions and updates such as proof of stack consensus, beacon chain, sharding functions and asset Ether 2 will be fully transferred to Mainnet.
So the Ethereum developers have set their sights high. According to chief developer Vitalik Buterin, it could ultimately take five to ten years until the final version is available. However, as long as the DeFi market continues to expand, and the opposite cannot be assumed at present, transaction costs in the Ethereum network are likely to remain at a consistently high level. In this respect, the scaling solution of Plasmagroup could actually bring light at the end of the tunnel.