Ethereum 2.0 (Serenity)

Ethereum 2.0 (Serenity) Phase


Serenity upgrade from Ethereum will bring Sharding, Proof of Stake, new virtual machines (eWASM) and more. It is important to understand that this increase will not occur at one point in time - instead, it will be launched in stages. This document seeks to be a reference point for these phases and what is included.

Design Objectives

Ethereum researcher Danny Ryan has set 5 different design goals for Ethereum 2.0:
  • Decentralization: to enable ordinary consumer laptops with O (C) resources to process/validate fractional O (1) (including system-level validation such as a flare chain).
  • Resilience: to stay alive through the main network partition and when most nodes are offline.
  • Security: to utilize crypto and design techniques that allow the validator's large participation in total and per unit time.
  • Simplicity: to minimize complexity, even at the expense of some losses, inefficiencies.
  • Longevity: to select all components in such a way that both are quantum-safe or can be easily exchanged with quantum safe counterparts when available.

Phase 0 - Beacon Chain

What is included?

Phase 0 is the name given to the launch of Beacon Chain. Beacon Chain will manage the Casper Proof of Stake protocol for itself and all-glass chains. As Ben Edgington said, "There are a number of aspects to this: managing the validator and the stakes; nominating the proposed block nominator for each glass at each step; organizing validators into committees to vote on proposed blocks; applying consensus rules; applying prizes and penalties to the validator; and, it becomes the anchor point where fractions register their countries to facilitate cross-fraction transactions. "

The main source of a burden on the Beacon Chain is "endorsement". The endorsement is voted available for glass blocks and, simultaneously, stock sound proofs for flare blocks. An adequate number of endorsements for the same glass block will create a "crosslinking" that confirms the glass segment to the glass block into the Beacon Chain.

Phase 0 will use Casper the Friendly Finality Gadget (FFG) for finality. Finality, in very loose terms, means that once a certain operation has been carried out, it will forever be etched in history and no one can restore that operation.

ETH 2: New Ether

Phase 0 will introduce ETH2 which will be a new asset for the peg (validator) that will be used on the Beacon Chain. This will be made by two methods:

  • As a gift for validating the Beacon Chain (and fractions after phase 1).
  • Buy for 1 ETH by every ETH1.X user through a registration contract. The contract calls it a deposit.
There is currently no way to withdraw ETH2 from the flare chain in Phase 0. After being saved in the ETH1.x validator registration contract, ETH1 is effectively burned. Beacon Chain validators watch this contract and send deposit information to Beacon Chain, which then issues ETH2 to depositors.

Finally, Beacon Chain will produce good quality randomness (distributed, verified, unpredictable, and (sufficient) unbeatable) for the entire system. This will use RANDAO which is only a way to combine contributions (individual random numbers) provided by many participants into one output number.

This will be used to organize the validator into the proposer and the block committee.

What is the network like?

After Phase 0 is complete, there will be two Ethereum chains active. For clarity's sake, let's call it the Eth 1.0 chain (currently, the main PoW chain) and the Eth 2.0 chain (the new Beacon Chain). During this phase, users will be able to migrate their ETH from the Eth 1.0 chain to the Eth 2.0 chain and become a validator. However, they will NOT be able to migrate this ETH back. The reason someone might want to do this is that they can get the interest paid in ETH on the Eth 2.0 chain.

To run Beacon Chain, you need a Beacon Chain client. This is currently being developed separately from the standard Ethereum client familiar package (Geth, Parity, Pantheon, et al.) By a number of teams. Prysmatic and Lighthouse make regular updates about the progress of their client's development, and several teams offer prizes to contributors to include more developers in building 2.0. You can contribute to Gitcoin grants here

By itself, the Beacon Chain may not be very useful. However, as the first component of Ethereum 2.0 delivered, this is the foundation of the whole system.

Important Considerations

  • ETH2 can be transferred to and from fractions after Phase 2 is finished.
  • There will be a minimum number of ETH pegs needed to first bootstrap the flare chain. This is defined as CHAIN_START_FULL_DEPOSIT_THRESHOLD in the deposit contract that will live on the Eth 1.0 chain. At present, this is set to 16384 validators needed. That means it takes 524,288 ETH total shares. This will pay an interest of ~ 11% for the bet maker.
  • To become a validator, you must bet 32 ​​ETH2.
  • During Phase 0, all user transactions and smart contract calculations will still occur in the Eth 1.0 chain.

Phase 1 - Shard Chain

What is included?

Shard chains are the key to scalability in the future because they allow parallel transaction throughput.

Phase 1 mainly deals with the construction, validity, and consensus on this shard chain data. Phase 1 does not determine the execution of the shard chain status or account balance. This would be like an experiment for fractional structures rather than an attempt to use fractions to scale. Beacon Chain will treat the glass chain block as a collection of simple bits without structure or meaning.


Periodically, the current conditions ("combined root data") of each glass are recorded in the Beacon Chain block as a cross-link. When the Beacon Chain block is complete, the corresponding shard block is considered complete, and the other shards know that they can count on it for cross-shard transactions.

A cross-link is a series of signatures from a committee that proves a block in the shard chain, which can be entered into the Beacon Chain. Cross-links are the main means by which the Beacon Chain "learns about" the state of the renewed glass chain. Crosslinks also function as infrastructure for asynchronous cross-synchronous communication.

The Shard validator, randomly selected by the Beacon Chain for each fraction in each slot, only reaches agreement on the content of each block. They prove shard content and declare it through cross-links. It doesn't matter what information appears on the glass block, as long as all committees reach consensus and update the Beacon Chain on the glass regularly.

What is the network like?

The Eth 1.0 and 2.0 chains will continue to operate in parallel after Phase 1.

Important Considerations

  • In Phases 0, 1, and 2 the main PoW chain (Eth 1.0) will remain alive when testing and transition occur on the Eth 2.0 chain. This means that prizes will be paid to the Ethereum 2.0 validator as well as normal PoW block prizes. Therefore, the combined inflation of the 2 chains can surge initially but then begins to trend towards the 0-1% range because the PoW chain is gradually stressed.

Phase 2 - Country Execution

What is included?

Phase 2 is where functionality will begin to coalesce. The glass chain transition from a simple data container to the state of the structured chain and the Smart Contract will be reintroduced. Each fraction will manage a virtual machine based on eWASM. This will support the accounts, contracts, status, and other abstractions that we know from solidity. We can expect familiar tools such as truffle, sold, ganache to be ported to support eWASM before or during phase 2.

Leasing the State is also a very possible inclusion for Phase 2 and it poses a challenge for developers. Rather than being able to store codes and data indefinitely, state leases will require contract developers and users to pay for eWASM storage over time. This ensures that unused information leaves the country over time.

At present, not much information is available about this phase and whatever is available will almost certainly change over time.

Important Considerations

A dApp must select the desired fraction. The decision was important because "Cross-shard communication will definitely be slow at the base layer, but there is a higher-level mechanism that can be used to implement fast cross-shard communication above the base layer which enables cross-shard communication at all even if slow," according to Vitalik Buterin.
A dApp must be really large to consume all resources in a certain glass to justify its spread across many sources.
This phase will provide fractions with eWASM as EVM 2.0.
This is an open question when and how Ethereum 1.0 accounts and contracts will be migrated to Ethereum 2.0, there are several upgrade plans

What's next?

The sharding road map according to the official wiki suggests 6 phases. Justin Drake strongly believes that fractional phases 1 and 2 will come in 2020 and 2021, respectively (assuming that the Beacon Chain was launched in 2019).
From Phase 3 onwards, whatever speculation is made can change, you can visit the wiki to get information on the next phase.

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