It is a well-known fact that Ethereum 2.0 is a significant network upgrade. Several core aspects of the ecosystem will change over the coming 12-18 months. Even decentralized applications, or DApps, may benefit from this upgrade.
Different Stages To Roll Out Upgrades
Given the vast complexity of the Ethereum network today, it is not easy to upgrade everything at once. For this reason, the developers opt for a multi-phase rollout of Ethereum 2.0. A smart approach, as there will be many critical changes to perform. Ethereum 1.0, as people currently know it, will be transformed into an entirely different creature.
Of these core changes, some may impact smart contracts and Dapps in the coming months. As the network grows more robust, there will be additional features to experiment with. Moreover, developers will introduce far more complexity into their projects, which benefits overall innovation.
What Needs To Change
People who have followed the Ethereum ecosystem in recent years will be familiar with the many issues. Ethereum, while developer-oriented, is a slow and clunky network in terms of throughput. Even though it has a 20-second block time interval, it is incapable of scaling to meet overall network demand. Transaction congestion and rising gas fees have become the new standard more often than not.
With Ethereum 2.0, both of these aspects should become a thing of the past. Thanks to chain sharding, the overall network throughput will increase by a factor of 64, if not more. All data transfers and transactions are processed in parallel, creating a new scalability level previously thought inaccessible.
Furthermore, these upgrades will result in far lower gas fees. As it becomes easier to process data quickly, it will also become cheaper to do so. Paying over $10 for a transaction on Ethereum 2.0 should – in theory – never be required. Only time can tell if that will effectively be the case, however.
What Does This Mean For DApps?
With more data processing capacity and lower transaction fees, DApps may see a renewed interest from enthusiasts. It is often too expensive to interact with decentralized applications more than once per week or month. That said, it remains unclear if the Ethereum 2.0 upgrade is capable of alleviating all of these concerns. This upgrade sounds good on paper but has not been put through its paces on a large scale just yet.
One thing to keep in mind is how proof-of-stake may affect DApps. As more users may learn toward staking their Ether balances, existing and new decentralized applications will need to find other ways to gain traction. Internal competition is a good thing, as that will often drive innovation. For the time being, the impact of staking Ether is minimal for DApps, but that situation can change on a dime.
At the same time, it is equally possible there will be an influx of new DApps. In a perfect world, that will lead to more people exploring these projects regularly. Achieving this vision is only possible if this upgrade is entirely flawless. Any setback or issue can quickly erode confidence in the entire Ethereum ecosystem.
One of the new DApps to keep an eye on is The Standard. It introduces decentralized borrowing and lending with support for precious metal and crypto asset collateral. Users lend the S-EUR stablecoin against their holdings, but are not requried to sell their assets permanently. Additionally, The Standard maintains a DAO structure to let TST holders help determine the future of the protocol.
For the foreseeable future, there will be no significant changes affecting the DApps landscape. Ethereum 2.0 rolls out in different stages, which may take months or even years to complete. Until the upgrade finalizes, significant changes are unlikely Developers of decentralized applications need to prepare for the upcoming changes. With more throughput and capabilities to take advantage of, now is an excellent time to start dreaming big as a DApp developer.
You can now trade Ethereum with physical allocated Gold and Silver, with more pairs in the pipeline! This will let people hedge the risk of the ETH 2.0 roll out.