Investment value of MegaETH

Source: Daoshuo Blockchain

A new Ethereum second-layer expansion project MegaETH has suddenly become popular in the past two days. The main reason for the popularity is probably its luxurious investment lineup. Large investors including Vitalik and a number of well-known venture capital firms have invested in this project.

A friend mentioned this project to me about a month ago. When I looked at this project at that time, I couldn't find much information, which led to some details that I still didn't understand. After the explosion this time, its information is much more detailed.

There are two points that impressed me deeply about this project:

First, it is the first Ethereum second-layer expansion that proposes specific performance indicators.

Second, it lists the ways and means of expanding the blockchain (including Ethereum's second layer) in detail in the white paper, and provides experimental data to support some important details (such as bottlenecks that affect performance).

Regarding the performance of Ethereum's second-layer expansion, in my impression, at least in the past few years, although it is also one of the important indicators emphasized by various project parties, in many cases, the improvement of performance by various project parties mainly focuses on a specific link or a certain method.

For example, the OP series mainly uses the route of "error proof" to improve the performance of the second-layer extension, and the ZK series mainly uses the efficiency of proof generation to improve the performance of the second-layer extension. On top of this, a certain degree of centralization (the sorter is a typical example) is added to achieve high performance.

After these projects were launched, when everyone found that their performance improvement was quite limited (far less than everyone expected), these projects turned their focus to other aspects: such as strengthening ecological construction and supporting ecological projects.

Of course, I 100% agree with the practice of these project parties focusing on ecological construction and supporting ecological projects, and I think it is right.

But the emergence of MegaETH suddenly made me feel that the pursuit of performance by these second-layer extensions has gradually faded.

From the perspective of Ethereum, it seems that the expansion of performance has gradually become an increase in the number of second-layer extensions: when the number of second-layer extensions increases, Ethereum naturally processes more and more transactions per unit time---this is indeed a certain degree of performance improvement.

But this performance improvement always feels a bit forced and lacks a bit of hardcore.

The emergence of MegaETH has once again focused the performance improvement on hardcore technology, and this style seems to have not appeared in this ecosystem for a while.

I think the description of each technical detail in MegaETH's white paper is worth reading. Such a detailed list of technical details has not been seen in the project white paper for a long time. It feels more like a review paper on many factors of current blockchain performance expansion.

For ordinary readers, you can ignore its technical details and explore and figure out the ideas and plans of the project party from its logic.

In short, after reading this white paper, readers can probably understand from which angles and what means the project party will use to make this second-layer expansion reach its claimed 100,000 TPS.

Of course, whether this goal can be achieved depends on the actual products in the future.

In my opinion, the overall idea of ​​this project is to classify nodes, subdivide the various functions of the second-layer extension into different nodes, let each type of node use hardware with different performance according to the performance it needs, let each function in the entire system reach the upper limit of its node hardware, and thus push the system's performance to the limit of the hardware.

This idea reminds me of an earlier article by Vitalik about the future node classification of Ethereum.

In that plan, Vitalik envisioned that Ethereum nodes will also be classified in the future:

Some nodes that need to efficiently process transactions and generate blocks use high-performance hardware, and these nodes need to pledge 32 ETH;

The other part of the nodes that only serve as block verification use very ordinary hardware (even embedded devices), and only need to pledge a small amount of ETH.

This not only meets the performance requirements of the Ethereum main network, but also satisfies the decentralization of the entire network as much as possible.

I wonder if it was because this idea of ​​MegaETH resonated with Vitalik that made him participate in this project?

Of course, I have some questions about this project: for example, does it always use a designated sorter or a sampling method to select from many candidates? This detail does not seem to be specifically explained in the white paper. If it is the former, how can the system avoid single point failure?

In general, MegaETH adds a high-performance project to the second-layer expansion ecosystem of Ethereum, making this ecosystem richer, which is definitely of great value to the ecosystem.

As for the investment value of the project, (if it issues coins in the future) I think so:

Projects like MegaETH require a lot of financial sponsorship in research and development, so it is difficult for such projects not to accept venture capital to join. This determines that the value of this project (if it issues coins) must take into account the interests of venture capital.

In addition, such projects are big white horses: its value is clear as soon as it is said, and its significance is clear as soon as it is explained.

Therefore, such projects generally have a ceiling for appreciation (of their tokens).

So in my opinion, MegaETH's ecological significance to Ethereum, especially the second-layer expansion, is far greater than its investment value.