Blockchain standards have a lot to do with how the values we envision from blockchains are realized, and looking at Ethereum's standards proposals can be a relatively effective way to see trends in the entire blockchain ecosystem and discuss future implementations.
More and more players are participating in EIPs, and many of the new EIPs are being proposed by these new players.
In addition, EIPs have some implications as good protocol governance practices and as a way to explore and refine specific ideas.
This article provides a brief overview of the history and the current state of participation in EIPs from a researcher's perspective, with the primary goal of educating a wide range of participants on the importance of EIPs as resources for understanding the past and present of the blockchain industry, but it also aims to inspire direct participation in improving current EIPs and ultimately becoming opinion leaders in spreading new trends within and outside of Ethereum.
Blockchain gave us the idea of a decentralized network structure, and the introduction of smart contracts gave us the possibility of various assets being programmed and utilized on a peer-to-peer network. With these, we establish a set of values that can be achieved through blockchain, such as data sovereignty, censorship resistance, security, and transparency, and prepare to face new digital interactions.
However, the blockchain industry is still a long way from actually implementing these values to replace or complement existing systems. This is because, apart from users recognizing the importance of the above values, users or applications need to understand the details of the protocol infrastructure or suffer the inconvenience of going through the extra steps involved to interact with various services on the blockchain - however in general, we do not care about the back-end or network issues that underlie them when we engage in digital interactions.
Some people refer to these as ‘Blockchain’s UX issues,’ but in the end, the only way to resolve these inconveniences for users is for the infrastructure to handle the processes required by users. In other words, the protocol standards at the infrastructure should be well organized so that applications can focus only on service interfaces without having to access the underlying infrastructure directly*.
*There are many layers to protocol standards, but especially middleware-like standards are often associated with this.
Therefore, looking at the standards of existing blockchain mainnets can help us understand why the value of blockchain is still so far from being realized, and it can also facilitate concrete discussions about how different applications can interact with each other in the future.
In this context, looking at Ethereum's standards in particular can be relatively effective in diagnosing the current state of the entire blockchain ecosystem and preparing for the future - as the standard history of Ethereum contains all the traces of thought that led to the creation of the various blockchains we see today. Furthemore, Ethereum has one of the strongest communities of any mainnet, so not only are new standards constantly being proposed to further develop the network, but there is also an active experimental effort to propose standards that can be learned from mainnets of a different nature. In short, Ethereum's standards are a giant archive that allows you to follow the macro evolution of the blockchain history.
Ethereum standards are proposed under the name of Ethereum Improvement Proposals (EIPs) process. According to EIP-1, the scope of EIPs is categorized into three broad categories, or broken down into six categories.
While many EIPs have been proposed (i.e., a total of 689 as of October 17th), the category that actually generates the most discussion is the Standard Track. EIPs categorized as Meta or Informational consist of proposals that are more of a meta-document describing the EIP process itself, or major changes to the protocol such as a hard fork of the Ethereum network - in fact, most EIPs in the Meta or Informational category were proposed before 2020.
Within the Standards Track, Core and ERC standards are particularly active, with Core EIPs consisting of standards that are directly related to implementing changes to the Ethereum network, primarily related to the consensus layer or the execution layer. Therefore, compared to other categories of EIPs, Core EIPs are more carefully reviewed and often require closer discussions with clients through additional processes such as AllCoreDevs Call prior to their adoption.
ERCs, on the other hand, are more application- or end-user-specific as they include standards and conventions that can be applied at the application level - they include token standards such as ERC-20, Naming Resolution Services such as ENS, library packages, account abstractions, and other familiar standards. Unlike Core EIPs, ERCs’ are often deployed at the application level.
EIPs, which falls under the Networking and Interface categories, consist of standards that make the communication of data within the Ethereum network work more smoothly or support Core EIP and ERC.
Source: EIP-1 (Data as of 17th, Oct., 2023)
All of the above EIPs can be proposed by anyone, starting with preliminary discussions. However, not all proposals become finalized - as the name suggests, EIP is a sort of proposal, so individual item should follow the process as above to be finalized.
Idea : This is a preliminary step before entering the full adoption process, where the appropriateness of the proposal's inclusion as an EIP is discussed in a forum.
Draft : When a proposed proposal has been formatted, it is merged into the EIP Repository by the EIP editors.
Review : This is the step where the proposal is eligible for peer review.
Last Call : This is the step for the last review before the proposal moves to Final, which is determined by the EIP editors - a final deadline for review is set, typically 14 days or later.
Final : This step means that the proposal has been finalized.
Stagnant : Proposalsn the Draft, Review, and Last Call statuses that have not been changed in six months or more will be moved to this step. However, it can be changed to another status when it is resumed or updated.
Withdrawn : This step means that the proposal cannot be fully revived where the only way to continue discussing the proposal is to propose a new EIP.
Living : This step is a special status where the proposal can be continuously updated. There are only two EIPs in this step at the moment (i.e., EIP-1 & EIP-5069).
Please refer to EIP-1 and EIP-5069 for the details of this process, the format of the EIP, and the responsibilities and roles for EIP editors.
However, it's important to note that the EIP process requires the participation of a wide range of actors at each stage, including EIP authors, EIP editors, Ethereum Core developers, and other stakeholders and community members, and that these discussions take place offline. As a result, depending on the current state of the protocol, a particular EIP may be adopted very quickly, or it may be delayed indefinitely, and prior discussion on forums like Ethereum Magicians is highly encouraged to make the process more efficient.
The fact that nearly 34% of the 689 EIPs proposed so far are in the revision or final stage is a testament to how far the Ethereum network has come, but it's also a testament to how difficult it is to adopt standards - it is no wonder that the more standards there are, the more complex the network, and the more expensive it can be to vet them to avoid conflicts with existing standards.
The EIPs that have been documented so far have directly or indirectly reflected the industry trends of the time, as well as the very basic elements of how networks are organized. Of course, as more and more mainnets emerge with different characteristics than in the early days, it's hard to say that the EIP is the leading standards framework in all areas at this point in time, but the stream of standards still seems to be centered around Ethereum.
Prior to 2017, the concept or identity of blockchain was largely established and various blockchains were emerging, so discussions were focused on implementing basic functionality for the network to work or to ensure its stable operation.
The EIPs proposed at the time were trendsetters for the industry, as many of the standards underlying network communication specifications and those related to tokens and contracts that exist today were proposed around this time.
These include ERC-20, the most popular token standard, ERCs that form the backbone of ENS, and ERC-191, the standard for signed data. Other EIPs have been proposed for various tokens & contracts standards, libraries, and OPCODE (Operation Code), as well as standards related to code optimization.
Over the next two years, applications began to be deployed on these rudimentary mainnets - notably, this is when NFTs and DeFi really took off, and blockchain became widely known to the public for the first time. The most widely recognized NFT standard, ERC-721, was also proposed at this time, and with so many other token standards and contracts emerging, the need for an organized framework for managing such smart contracts on the network level naturally arose.
In response, a number of standards have been proposed to detect various contracts and manage their ownership, including EIP-1167, which opens the door to upgradable contracts, and ERC-1014, which proposes a new OPCODE (i.e., CREATE2) to create contract addresses based on contract codes.
This is also the time when the policy on network gas fees started to become an issue as network usage gradually increased - in the past, users had a very difficult time predicting gas fees due to the structure that relied too much on gas fee competition. As such, EIP-1559 was also proposed at this time, which separated the Base Fee from the optional Priority Fee to make it easier to predict the gas fee per transaction.
After two years of seeing the potential of applications including NFTs and DeFi on the Ethereum mainnet, various token projects and DApps have emerged on different mainnets with their own unique features. As a result, many more L1s have emerged and gained traction, and the narrative of the NFT and DeFi ecosystem has been intensified by the public.
On Ethereum, where the richness of the ecosystem has naturally led to more transactions, the discussion of scalability solutions or gas fees has intensified, and standards have been proposed to enable more advanced features to further their narrative in the NFT and DeFi space - ERC-2981 to enable royalty policies for creators, and flashloans (i.e., ERC-3156) to enable both unsecured lending and repayment within a single transaction.
2022, and 2023 were the years when people's interest in blockchain was at its peak, but also when it cooled down rapidly due to the Terra and FTX debacles, followed by the adverse effects of the macroeconomy. As a result, each protocol further solidified its identity and growth strategy, which may include clashing ideologies (e.g., Monolithic vs. Modular), migration for more flexible environments, or building their own ecosystems (e.g., AVAX - Subnet / Polygon - Supernet / Cosmos - ICS, etc.).
In particular, much of this discussion has focused on Ethereum, as Ethereum is approaching a major turning point in its Proof of Stake(PoS) transition roadmap, and a series of events have brought the relatively more secure and decentralized ecosystem of Ethereum and Rollup to the forefront of attention compared to other mainstream mainnets. As a result, a number of EIPs have been proposed related to creating the underlying network environment for PoS, and a series of EIPs related to Rollup have also been proposed, depending on the details of the PoS transition roadmap.
Meanwhile, discussions about use cases or UX for blockchain have begun to emerge both within and outside the industry. As such, many middleware-like standards that can actually improve users' application experience and bridge the gap between Web2 and Web3 have been proposed - ERC-4337-based account abstraction, which has been on hold for a long time, has received renewed attention, and many other middleware-like standards related to transaction, identity, and token-bound accounts have been proposed, and many extension standards that can show new experiences by combining ZK and AI have also been proposed.
Other interesting points that can be found in the previous graph are 1) that the number of EIP proposals peaked in 2018 and 2022, when blockchain started to receive a lot of public attention, and 2) that these peaks were driven by the number of ERCs proposed - in other years, Core EIPs were dominant, but we can observe that ERCs were dominant in 2018, 2022, and 2023.
However, if the composition of the actors proposing EIPs remains unchanged (i.e., if EIPs continue to be proposed only by actors that have been contributing to the EIP since its inception), this trend of increasing the number of proposed EIPs is not well explained. Moreover, the more standards accumulate in the network, the more complex they become, which should slow down the process of proposing and adopting new standards.
It's true that many EIPs have been proposed by those most familiar with the Ethereum network and who have been shaping it since its inception (including EIP editors). But what's surprising is that, aside from them, a significant portion of the EIPs are made up of people with less experience in proposing EIPs - to date, there are approximately 790 EIP proposers, with over 90% of proposers having experience with fewer than five EIP proposals.
This becomes even clearer when we project the number of new proposers (i.e., entities that have never proposed an EIP before) by year - with the exception of the outliers (i.e., 2018's & 2022's), the number of new proposers is steadily rising. What's even more striking, however, is that these new proposers contribute, on average, over 7-80% of all EIPs proposed in a given year.
In other words, this means that a significant number of new people join the EIP every year, and they make significant contributions to the creation of new standards as they mingle with the existing Ethereum community.
Ethereum is the only mainnet that started from a blank slate with few references and codified the many discussions that took place to improve the network. So, as we've briefly touched on, looking at EIPs can be a very helpful for diagnosing the history and current state of blockchain. Furthermore, more and more new players are joining and the EIPs they propose are helping to shape the future we envision for blockchain.
Below are some musings on additional implications and limitations of the EIP framework.
Governance is the decision-making process of an organization, and its primary purpose should be to achieve the organization’s vision. Therefore, a protocol's standards, as determined by its governance, must be consistent with the protocol's vision and proposed to be effective in achieving that vision. In this respect, the scope of EIPs is quite consistent with Ethereum's vision, which aims to be "a world computer that allows a wide range of people to benefit from the network without compromising security and decentralization (i.e., solving the trilemma)".
Ethereum ecosystem is also working to lower the barriers to entry to facilitate the onboarding of EIPs through localized conferences, forums, blogs, regular developer calls, Translathon hosting, YouTube channels, and a variety of other content - and as a result, the number of new EIPs each year is steadily increasing, and the new EIPs they propose are making significant contributions to the value of the Ethereum network.
In short, if we define decentralization as "an environment that makes it easy for a wide range of participants to onboard," then Ethereum's governance is a good example of protocol governance as it aligns with its mission and results in an increasingly decentralized distribution of participants.
On the other hand, EIP is a space where different standards converge, but general-purpose protocols designed to support a wide range of interactions, such as Ethereum, have to consider various possible conflicts between existing standards, so by default, adoption of individual standards is not fast, and it is not easy for standards focused on specific problems to be finalized.
Therefore, to observe a specific use case, it may be more effective/efficient to choose or build a protocol optimized for that intent and experiment agilely with it, rather than expecting it through a general-purpose protocol. However, exploring and building a separate protocol is also time-consuming and expensive.
As such, it may be a good idea to start this process by forking Ethereum based on a specific EIP - for example, Fabian Vogelsteller, author of ERC-20, has pointed out the inflexibility of existing token and account standards within Ethereum and is creating a protocol called LUKSO to allow a diverse creative economy to be built on top of ERC-725, which is still in draft. This kind of approach allows you to experiment with specific use cases while maximizing the use of EIP and taking advantage of the synergies that come from compatibility with Ethereum.
This means that proposing various EIPs or participating in their discussions could be another opportunity for certain project to be born and another way to indirectly contribute to the Ethereum network.
The various use cases and values we potentially envision for the Ethereum network are not limited to a handful of developers, but are created by all sorts of participants who could potentially onboard the network, so ultimately, the people who co-create Ethereum's standards should also be made up of opinion leaders with diverse perspectives including general users, creators, business people, etc.
However, non-devs’ EIP onboarding is still challenging. As mentioned above, the Ethereum ecosystem is trying to lower the barriers to entry for EIPs through various communication channels, but crucially, high-level resources to help non-developers understand them are either nonexistent or fragmented. Furthermore, there is no landscape things for EIPs - it's still difficult to keep track of which EIPs are mainstream, and the numbering conventions for EIPs are very confusing.
If the onboarding challenges for non-developers, such as documentation and timelines of key events, which are still largely Western and developer-centric, could be improved, it might go a long way toward accelerating the discussion of standards that are needed to bring more value and actual adoption.
Thanks to Kate for designing the graphics for this article.
We produce in-depth blockchain research articles
The crypto industry, initiated by Bitcoin, has developed through the narrative game and is now entering a stage where its technical infrastructure is maturing. Crypto provides a foundation to assign economic value to any idea or interest and enables trading, paving the way for new types of applications and business models. Currently, the crypto industry faces the key challenge of developing popular applications and attracting users. To achieve this, it is necessary to actively apply strategies that leverage speculative demand as a core function.
This article is the last part of a three-part series covering the DeFerence 2024 event, sponsored by Four Pillars.
Base, aiming to onboard 1B onchain users, has emerged as a hub for consumer-oriented onchain applications within a year since its mainnet launch last year, driven by factors such as reduced fees, the memecoin frenzt, and the growth of social network applications like Farcaster. Unlike other blockchain ecosystems focused on DeFi and infrastructure, Base predominantly features consumer-oriented applications similar to Web2 services. It leverages a unique community and brand to onboard more applications. While social and community applications are the most actively developed, new categories of onchain applications in content, gaming, and commerce are also emerging, indicating significant potential for user expansion.
This article is the second part of a three-part series covering the DeFerence 2024 event, sponsored by Four Pillars.