Ethereum Ecosystem Overview- Unit University

Unit Network
17 min readNov 22, 2022

Ethereum Ecosystem Overview

Decentralized Functionality

Presented by: Unit University

Contact: university@unit.network

www.unit.network/in/university

“I thought [those in the Bitcoin community] weren’t approaching the problem in the right way. I thought they were going after individual applications; they were trying to kind of explicitly support each [use case] in a sort of Swiss Army knife protocol.”

– Ethereum co-founder Vitalik Buterin

Ethereum Ecosystem

In 2014, Vitalik Buterin and his team at what is now the Ethereum foundation created Ethereum — a blockchain ecosystem directed at trying to add utility to the relatively stagnant Bitcoin ecosystem of the time.

Over the past decade, the Ethereum ecosystem has grown to become a significant player in the blockchain and cryptocurrency world and, at the time of writing, currently holds second place for the most prominent cryptocurrency by Market Capitalization.

The Ethereum ecosystem makes it so that users can deploy smart contracts built in Ethereum’s native language (Solana), which can be coded to solve a myriad of problems and opportunities. Like with most blockchains, trust is removed — there is no need for intermediaries like banks or agencies because all of these aspire to be trustworthy and safe to use.

Ethereum may be thought of as an entire ecosystem, whereas Bitcoin can be considered a payment network protocol and a value-transfer unit inside that system.

It has enormous potential, and many consider it to be the most significant technological advancement of the whole 2010s.

Key Information

Sector: Blockchain Ecosystem

Token Type: Native

Token Usage: Payments, Voting

Consensus Algorithm: Proof-of-Stake (PoS), following the initial transition from PoW

Precise Consensus

Algorithm: Nominated Proof-of-Stake

Genesis Block Date: July 30, 2015

Carbon Footprint

The long-awaited Ethereum merge was intended to significantly reduce the total energy usage of the blockchain network, and it appears that it has succeeded in doing so. The network has reduced its energy use and carbon impact by around 99.99%, according to research from the Crypto Carbon Ratings Institute.

Links

Website

Twitter

Telegram

YouTube

Founders

Vitaly Buterin

Vitaly Dmitriyevich (aka Vitalik Buterin), a Canadian-born programmer and writer of Russian ancestry, is widely recognized as one of the original creators of Ethereum.

As a co-founder of Bitcoin Magazine in 2011, Buterin got in on the ground floor of the cryptocurrency revolution. Ethereum was created in 2014 by Buterin, Gavin Wood, Charles Hoskinson, Anthony Di Iorio, and Joseph Lubin.

Links

Website

Twitter

Github

Email: @ethereum.org

Gavin Wood

The original Ethereum testnet was developed by Gavin Wood, a British computer scientist who then went on to create the Polkadot Ecosystem.

The “technical bible,” underpinning the Ethereum network’s ledger and smart contracts, was written by Wood and is known as the “yellow paper.”

Links

Website

Twitter

Github

Email

Joseph Lubin

Lubin is a computer scientist with a degree from Princeton who formerly worked for Goldman Sachs.

To seed the Ethereum ecosystem with infrastructure and apps, Lubin also founded ConsenSys, a Brooklyn-based firm.

Links

Website

Twitter

Github

Email

Start-up History

2011–2013- As a 17-year-old programmer, Vitalik Buterin got engaged with Bitcoin in 2011 and co-founded Bitcoin Magazine. This exposed him to and piqued his interest in blockchain technology. In 2013, he presented a white paper explaining what would become Ethereum using a broad programming language, and his vision for a platform that went beyond the financial use cases permitted by Bitcoin gained attention quickly online.

2014- Therefore, in 2014, Buterin and the other co-founders of Ethereum started a crowdfunding campaign, selling participants Ether (Ethereum tokens) to get their concept off the ground. They raised more than $18 million.

2015- Frontier, Ethereum’s first full release, was released to the public in 2015. Over the years since its inception, the platform’s developer community has expanded fast. Buterin envisions a future where Ethereum can be used for any blockchain applications that don’t already have a dedicated platform. The scaling problems that have plagued Bitcoin are now plaguing Ethereum, which is still in its early stages of development.

2016- Concerns about the platform’s safety were raised after an unknown hacker stole $50 million in Ether in 2016. As a result, the Ethereum community was split, and Ethereum eventually forked into two separate blockchains: Ethereum (ETH) and Ethereum Classic (ETC).

2017- Ethereum’s value surged by more than 14,000% in 2017, despite wild price swings. Many investors are eager to get in on this rapid expansion, while others are weary due to the high degree of volatility.

2018+- After reaching that peak, ETH’s value gradually declined over the following months and years, eventually dropping below $100. The asset resumed its rising trajectory by 2021 when its value had risen to about $4,000. Ethereum’s value vs Bitcoin fell by 55% after the Merge in 2022.

Early Seed Rounds Investors

Institutional investors, such as pension funds, insurance firms, foundations, and others, are significant because they are often patient long-term investors who are less likely to trade on rumours or overreact to the daily news cycle. It is possible that with widespread cooperation from this group, we might find a solution to the crypto industry’s liquidity and volatility issues.

Top 5 Wallet Holders

With a figure of 549,160, down from a December high of 781,300, the total number of daily active addresses is very close to that of Ethereum. Binance’s CEX has the most, followed by Bitfinex’s CEX.

Top 5 Ethereum Politicians

Mayor Francis Suarez

Francis Suarez, mayor of Miami in 2021, invested in Bitcoin and Ethereum, and by year’s end, the city had made significant strides in the realm of cryptocurrencies. In August of 2021, the MiamiCoin was released, and plans were proposed to invest government assets in Bitcoin. Additionally, a cryptocurrency task committee was established for the county of Miami-Dade to look into the viability of accepting cryptocurrencies as payment for local taxes, fees, and other government services.

Sen. Cynthia Lummis

Wyoming’s new senator, Cynthia Lummis, came clean about her Bitcoin holdings in early 2018, saying she’d bought her first coin in 2013 for roughly $320. Lummis and Sen. Kirsten Gillibrand recently introduced legislation that would transfer regulatory authority for cryptocurrency markets from the Securities and Exchange Commission to the Commodity Futures Trading Commission, as the latter would treat the vast majority of cryptocurrencies as commodities rather than securities.

Andrew Yang

Technology policy theorist Andrew Yang is well known for proposing a universal basic income of $1,000 as a solution to the loss of employment to automation. However, Yang is one of the most prominent pro-crypto politicians, and his interest in technology and creativity continues to extend to cryptocurrencies even after his political career has ended.

Mayor Eric Adams

Eric Adams is another prominent pro-crypto politician; during his campaign, he made Bitcoin part of his platform for mayor. He even promised to accept his first three paychecks in Bitcoin. Following his swearing-in as mayor, he requested and received his first salary in Bitcoin and Ethereum via Coinbase.

Stacey Plaskett

Representative Stacey Plaskett is a strong supporter of crypto as a tool for broadening access to banking and fostering growth in the economy in the U.S. Virgin Islands. Moreover, in July 2021, Plaskett was one of eleven members that encouraged the U.S. Treasury to investigate blockchain for COVID relief funding.

Conferences & Events

Ethereum Community Conference

ETHCC is the largest annual Ethereum event in Europe. This three-day event has conferences, networking opportunities, and other learning experiences like workshops that are designed to build up the attendees’ knowledge and understanding of blockchain technology. Speakers for the ETHCC 5 include Gitcoin’s Kevin Owocki and Covalent’s Ganesh Swami.

ETHDenver

ETHDenver is the world’s longest-running ETH event. It’s also the largest #BUIDLathon (or hackathon) in the world for Ethereum. It unites blockchain enthusiasts, developers, and designers with the goal of further developing or contributing to the global blockchain ecosystem.

ETHSydney

Those curious about Ethereum’s blockchain technology can find helpful information and peers in this community. Techies, business owners, attorneys, students, blockchain devotees, and those just curious participate in attendance.

EthereumBA

EthereumBA aims to promote and create decentralized apps, and its members are all passionate about the technology. Anyone curious about Ethereum and the Blockchain

is welcome to join, study, and share their knowledge with the group.

Top Ethereum DAO’s

KyberDAO

The Kyber Network, which allows for the persistent trading of cryptocurrency tokens, is the progenitor of KyberDAO. In July 2020, the Kyber Network Decentralized Autonomous Organization (KyberDAO) was launched, granting KNC token holders a voice in the management of the network.

Aragon

Aragon is both a DAO and a building block for the introduction of other DAOs. In theory, a DAO should make it possible for users to communicate with anybody, anywhere. It promises to be the backbone of 1,500 different DAOs. The total value of all assets held by these DAOs is around $350 million.

GnosisDAO

The Gnosis decentralized autonomous organization (GnosisDAO) has just come to light. It’s a tool for coding in the DeFi realm. Forecast markets constitute the basis for how GnosisDAO handles oversight. It provides helpful suggestions to its distributed representatives based on the state and requirements of the market. SAFE tokens will be used for DAO management, and the DAO will control over eight billion GNO tokens and over 150,000 ETH.

Rocket

Tokens issued by Rocket’s decentralized autonomous organization (DAO) are non-fungible and may be exchanged for either the DAI dollar-fixed token or U.S. dollars. Unlike cryptocurrencies like Bitcoin and Ethereum blockchain, NFTs cannot be converted into or exchanged for other tokens. That’s why Rocket provides an option for NFT holders to have access to liquidity without having to sell their NFTs.

Top Ethereum NFTs

The NBA’s Best Shot

True NBA lovers should invest in this Ethereum NFT project. The NBA endorses this marketplace where fans may buy, sell, and exchange NBA memories using NFTs. This marketplace is quite well-liked within the NFT community, and it now holds more than $300,000,000 in NFTs.

Axie Infinity

Axie Infinity, first published in 2018, is one of the most played games on the NFT market. A large fan base of almost 2 million people have helped develop this game. Created by the video game studio Sky Mavis, it has both player-versus-player and solo gameplay. In this play-to-earn style game on the Ethereum Network, players may earn tokens by playing.

Gods Unchained

Gods Unchained, another massive Ethereum NFT project, has done quite well over the past year. With this downloadable free-to-play NFT game, you may keep whatever you earn. A card trading and collecting game like Axie Infinity.

Decentraland

Decentraland, like Cardano’s Pavia Metaverse, is an Ethereum-based virtual universe. In this MMOG, the $MANA money is used to purchase non-fungible token (NFT) parcels of land. A lot of people have started using this platform since it came out in early 2020.

Bored Ape Yacht Club

Bored Ape Yacht Club, one of the most expensive and well-known NFTs, was introduced in April 2021. This NFT’s value has surged ever since it was introduced to the market, and it is thought that the NFT has generated sales of about $1 billion.

Top Ethereum DApps

OpenSea | Marketplaces | $4.78M Volume

True NBA lovers should invest in this Ethereum NFT project. The NBA endorses this marketplace where fans may buy, sell, and exchange NBA memories using NFTs. This marketplace is quite well-liked within the NFT community, and it now holds more than $300,000,000 in NFTs.

Uniswap v2 | Exchanges | $209.69M Volume

Uniswap is a fully decentralized protocol for automated liquidity provision. It eliminates trusted intermediaries and unnecessary forms of rent extraction, allowing for fast, efficient trading. Where it makes tradeoffs decentralization, censorship resistance, and security are prioritized.

Uniswap v3 | Exchanges | $14.9B Volume

A protocol for trading and automated liquidity provision. Concentrated liquidity, giving individual LPs granular control over what price ranges their capital is allocated to. Individual positions are aggregated together into a single pool, forming one combined curve for users to trade against.

MetaMask | Swap DeFi | $19.13M Volume

A crypto swap from the wallet & gateway to blockchain apps. Trusted by over 5 million users worldwide.Swap tokens directly from your desktop or mobile wallet.

1inch Network | Exchanges | $1.03B Volume

A distributed DeFi network for various protocols on Ethereum, BNB Chain, Polygon, Avalanche, Optimistic Ethereum, Arbitrum, Fantom and Gnosis Chain.

Similar Ecosystems

Solana is a brand-new, very effective, permission-less blockchain that is now being used as an open-source project.

It is one of the most effective blockchains available today and the hub of a dynamic cryptocurrency ecosystem that includes several other projects in the fields of DeFi, NFTs, Web3, and other technologies.

Solana is also contributing to environmental conservation outside of its local neighborhood

As part of an ambitious effort to build an “Internet of blockchains,” the Cosmos ecosystem is a decentralized network created to connect numerous blockchains.

Inter-Blockchain Communication (IBC) protocol is a cutting-edge technology that Cosmos uses to enable smooth communication and information sharing across chains in its ecosystem.

Polkadot was built to be the ‘blockchain of blockchains’ — attempting to connect the majorly fragmented existing technologies under one hood. Many parachains, or connected, application-specific sub-chains, may be supported by the Polkadot blockchain network, which is a blockchain platform.

Every chain built by Polkadot makes use of Parity Technologies’ Substrate modular design, which lets developers pick the parts that are best for their networks’ particular applications. Polkadot is the aggregate term for the network of parachains that link to the Relay Chain, a single core platform.

This foundation platform, which also makes use of Substrate, incorporates Polkadot’s voting, finality, and consensus logic, but does not offer application functionality; instead, it protects the network’s parachains.

Integration

ETHU

Since its inception, Unit Network planned on integrating ETH into its platform. In March 2020 the integration of ETHU was implemented successfully. Today, Unit Network stores $1.4m in ETHU. ETH is deposited and wrapped as ETHU to LP stake, trade, and buy new and exciting token projects.

Brief history of ecosystem growth and development

Ethereum, as a blockchain, provides access to a wide range of useful features for those creating applications or services built on top of the Ethereum platform. Ether (ETH) is the native cryptocurrency of the Ethereum network and is used to do business on the network. Vitalik Buterin is just one of many inventors of the Ethereum blockchain, but he is the one who first published a white paper outlining the idea behind Ethereum in November 2013. After Buterin laid the groundwork, many other minds contributed in various ways to finish the project. Ethereum was created by a group of people including Vitalik Buterin, Gavin Wood, Charles Hoskinson, Amir Chetrit, Anthony Di Iorio, Jeffrey Wilcke, Joseph Lubin, and Mihai Alisie.

At a Bitcoin conference in Miami, Florida, in early 2014, Buterin introduced the notion of the blockchain project, which included Ethereum. Later the same year, the project held an initial coin offering (ICO) to collect cash for its development; the ICO resulted in the sale of millions of dollars worth of ETH.

Over $18 million worth of Ethereum (ETH) was sold in the asset sale between July 22 and September 2, 2014, using Bitcoin as the preferred method of payment. Although the idea came to fruition with the launch of the Ethereum blockchain in July 2015, its creation would be a time-consuming, multi-year endeavour.

Ethereum’s initial blockchain implementation, dubbed Frontier, hosted smart contracts and proof-of-work (PoW) mining but otherwise only got the chain up and running. After the first launch, miners and other network contributors may begin setting up their equipment and working together to expand the network’s capabilities.

As the blockchain has evolved since Ethereum’s debut, it has received several modifications, including Byzantium, Constantinople, and the Beacon Chain. Changes to the blockchain have been made with each release. Ethereum’s switch to PoS is a big deal since it was done to increase the blockchain’s capacity. There have been many efforts to create useful apps for the Ethereum network.

Significant interest was paid to Ethereum-based decentralized finance (DeFi) initiatives in 2020 and 2021; nonetheless, participants struggled with high network fees due to Ethereum’s scalability problems. The gradual migration from Ethereum’s current consensus layer to PoS will eventually allow the popular blockchain to scale.

There have been several upgrades to the Ethereum blockchain throughout time; some of these updates were predetermined milestones in Ethereum’s development, while others were made in response to unforeseen circumstances, such as hacks.

Price and Protocol Upgrades

History

Nick Szabo, an American computer scientist and cryptographer was the first to introduce Smart contracts — back in 1994. However, smart contracts gained popularity with the introduction of Ethereum.

Definition

A “smart contract” is simply a program that runs on the Ethereum blockchain. It’s a collection of code (its functions) and data (its state) that resides at a specific address on the Ethereum blockchain.

Digital Vending Machine (Nick Szabo)

A smart contract, like a vending machine, has logic programmed into it. Like how a vending machine removes the need for a vendor employee, smart contracts can replace intermediaries in many industries.

Permissionless

Anyone can write a smart contract and deploy it to the network. You just need to learn how to code in a smart contract language and have enough ETH to deploy your contract. Deploying a smart contract is technically a transaction, so you need to pay Gas in the same way you need to pay gas for a simple ETH transfer. However, gas costs for contract deployment are far higher.

Immutable? (Matt Rickard)

Smart contracts deployed to Ethereum are, in theory, immutable. Bytecode is uploaded, a constructor function is executed, and the resulting code is stored on the blockchain and cannot be updated. But in practice, contract execution is mutable (delete a contract and potentially re-upload different bytecode at the same address, call another contract’s code, or store the code in state and execute it )

The Merge

The Merge (September 15, 2022)

The Merge was the joining of the original execution layer of Ethereum (the Mainnet that has existed since genesis) with its new proof-of-stake consensus layer, the Beacon Chain. It eliminated the need for energy-intensive mining and instead enabled the network to be secured using staked ETH.

Ethereum Mainnet uses proof-of-stake, but this wasn’t always the case. The upgrade from the original proof-of-work mechanism to proof-of-stake was called The Merge. The Merge refers to the original Ethereum Mainnet merging with a separate proof-of-stake blockchain called the Beacon Chain, now existing as one chain. The Merge reduced Ethereum’s energy consumption by ~99.95%.

Carbon Footprint

Before the Merge upgrade, in 2022, the energy consumption of Ethereum ranged between 46.31 terawatt hour (TWh) per year to 93.98 TWh per year. The Merge, which is considered one of the most significant blockchain upgrades on Ethereum to date, brought down the network’s energy consumption by 99.9% immediately.

On Sept. 15, 2022 the Ethereum blockchain migrated from proof-of-work (PoW) to a proof-of-stake (PoS) consensus mechanism in an effort to transition into a green blockchain. What followed was an immediate and steep drop in total energy consumption of the Ethereum network.

Starting from Sept. 15, the day of the Ethereum Merge, Ethereum’s energy dropped down by over 99.9% and continues to maintain low energy usage. As a result, the network’s carbon footprint currently stands at 0.1 million tonnes of CO2 (MtCO2) per year.

When translated to single Ethereum transactions, the electrical consumption is as low as 0.03-kilowatt hour (kWh) and the carbon footprint stands at 0.01 kgCO2, which, according to digiconomist, is equivalent to the energy used when watching two hours of YouTube.

Governance

When something has to be changed in the Ethereum protocol, it goes via the governance process. It’s worth emphasizing that this procedure has nothing to do with how users and programs interact with the Ethereum protocol, as the latter is permissionless.

On-chain events are open to everyone, anywhere in the globe. Everyone is free to create applications and make transactions without interference from any authority.

These apps are built on top of a core protocol, but there is a procedure for submitting proposed changes to that protocol.

There is a high coordination bar for modifications to Ethereum’s core both social and technical structures because so many people rely on it to operate — and therefore, a proposal process is used to approve changes and modifications and voting — This is to guarantee that any updates to Ethereum are safe and have community support.

Governance on-chain vs. off-chain

As a result of blockchain technology, new forms of governance are possible.

Proposed protocol modifications are decided by a stakeholder vote, often by holders of a governance token, with voting taking place on the blockchain.

Some types of on-chain governance already have the suggested

protocol modifications encoded, and will be immediately deployed if they are approved by the stakeholders.

On the other hand, off-chain governance involves reaching a consensus on any necessary protocol changes through ad hoc social debate before enacting these code changes.

Ethereum governance is conducted off-chain, with many different parties engaged.

Decision Making Process

Participants in the Ethereum community play a variety of roles in the network’s administration. Moving in from the most distant participants in the protocol, there are:

  • Ether Holders: Ether holders are those who possess a variable quantity of Ether Token. To learn more about ETH, read on.
  • Users of Apps: Users of apps on the Ethereum Blockchain are those who engage with these applications.
  • Developers of Apps: Developers of apps and tools for interacting with the Ethereum blockchain create programs like DeFi and NFTs that can be executed on the Ethereum network (e.g. wallets, test suites, etc.)
  • Node Operators: Block and transaction propagation is the responsibility of node operators, who are responsible for rejecting any erroneous blocks or transactions they encounter.
  • EIP Authors: Authors of Ethereum Improvement Proposals (EIPs) are those who draft and submit proposals to update the Ethereum protocol (EIPs).
  • Miners: Individuals that operate nodes and validate transactions are known as miners or validators, and it is them who add new blocks to the Ethereum blockchain.
  • Protocols Developers: These individuals are responsible for the upkeep of the many Ethereum implementations (e.g. go-ethereum, Nethermind, Besu, Erigon at the execution layer or Prysm, Lighthouse, Nimbus, Teku, Lodestar at the consensus layer).

Impact:

Pros:

Open Ecosystem

A novel, general-purpose blockchain network that allows developers to create and integrate applications into Ethereum, serving as the base layer of an open ecosystem capable of hosting smart contracts and decentralized applications (DApps).

Decentralized Disruption

Ethereum-powered tools and services essentially disrupted various business models or invented new ones with decentralized finance (DeFi) and decentralized applications (DApps).

Proof of Work to Proof of Stake Stake

Proof-of-stake (PoS) underlies Ethereum’s consensus mechanism. Ethereum switched on its proof-of-stake mechanism in 2022 because it is more secure, less energy-intensive, and better for implementing new scaling solutions compared to the previous proof-of-work (PoW) architecture.

Cons:

Scalability

The Ethereum blockchain has an inherent scalability issue, which limits it to around 30 transactions per second. Network congestion arising from the sheer volume of transactions often results in delays and skyrocketing fees.

Competition

There are a ton of emerging smart contract platforms, giving Ethereum a run for its money; namely Binance Smart Chain, Cardano, and Polkadot.

Conclusion

Main Value Proposition — Decentralized Functionality

In terms of market cap, Ethereum is now the second-largest cryptocurrency. The principal programmer of Ethereum, Vitalik Buterin, published it in 2015.

The underlying philosophy of Ethereum is fundamentally different from Bitcoin, providing users with greater functionality.

While Ethereum may be viewed as an entire ecosystem, Bitcoin is a payment network protocol and a value-transfer unit inside that system — and this is what Vitalik and the Ethereum team had envisioned when setting out on the journey to create this.

The potential of Ethereum is enormous, and many claim that it was the most significant technological advancement of the decade — bringing cryptocurrencies into the limelight and closer to the mainstream.

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