What is the difference between ESC-VM and existing Layer2?
Author: Arrow Chat
"Ethscriptions is a protocol that allows users to share information and execute computations on the Ethereum L1 at a lower cost, bypassing the use of smart contracts for storage and execution, and applying deterministic protocol rules to Ethereum call data to compute state."
I first learned about eths in mid-August this year. At that time, it was not a new concept, and various inscriptions were flying all over the place. Many people just regarded it as a copy of ERC-20.
And at that time, there was definitely no enthusiasm for this concept on Twitter. It wasn't until today that I saw teachers discussing whether eths is a Layer2 that I became interested.
I searched various media platforms in the evening, and it seems that there is no popular science about the concept of Ethscriptions Virtual Machine (ESC-VM), so I decided to write an article to see what this thing is, trying to explain it in a simple and straightforward manner without delving into technical details.
Layer2
Let's briefly go over Layer2. This concept should be quite clear to everyone. I previously wrote about mainstream Layer2 scaling solutions such as OP Rollup, ZK Rollup, and the theme article of OP Stack as a Chain SaaS tool. We won't go into many basic issues here.
The core problem that Layer2 aims to solve is scaling and reducing transaction costs.
Because there are excessive nodes on the chain competing for limited block space. With the rapid development of the Ethereum ecosystem, more execution and computation need to be completed, leading to severe congestion of on-chain transactions and exorbitant gas fees.
There are many solutions to achieve L2, and they are constantly being updated. Early state channels, Plasma, Validium, and the currently popular Optimistic-Rollup, ZK-Rollup, etc.
The Rollup solution involves performing transaction calculations and specific state changes off-chain, processing on-chain transactions and final state summaries after transaction batching, and then verifying them on-chain, effectively alleviating congestion on Ethereum.
But at that time, we did not consider eths as a Layer2 solution, or even discuss it as a contingency plan, because at that time, eths was only considered as a kind of Ethereum inscription protocol and did not have any particularly special features.
However, in subsequent updates and upgrades, a proposal to improve the Ethscriptions protocol, ESIP-4: The Ethscriptions Virtual Machine, fundamentally changed many things.
Ethscriptions (ETHS)
Ethscriptions is a protocol that allows users to share information and execute computations on the Ethereum L1 at a lower cost.
It bypasses the use of smart contracts for storage and execution, applying deterministic protocol rules to Ethereum call data to compute state.
This approach is cheaper because it uses Ethereum transaction call data instead of smart contracts to store data on-chain, naturally reducing costs and eliminating verification costs similar to OP's optimistic proof mechanism and ZK's valid proof mechanism.
Of course, there is already a lot of content about Ethscriptions. Let's focus on The Ethscriptions Virtual Machine.
ESIP-4: The Ethscriptions Virtual Machine
The Ethscriptions Virtual Machine, the core content of the improvement of eths in the ESIP-4 draft, is precisely the functional expansion of this proposal that has allowed it to move beyond the concept of inscription speculation and become practically functional.
According to a sentence in the white paper, we can clearly understand its development purpose:
The goal of ESC-VM is not to replace smart contracts or L2, but to prioritize providing low-cost computing power in decentralization.
In the ESIP-4 draft, the concept of the Ethscriptions Virtual Machine (ESC-VM) is introduced, which is a new protocol built on top of Ethscriptions.
ESC-VM allows ethscriptions to function as a set of computer instructions, enhancing the functionality of the Ethscriptions protocol. These computer instructions allow users to interact with special programs called Dumb Contracts.
In the previous ETHS inscriptions, the "engraving" of various images used Ethereum "call data," i.e., "Calldata" functionality.
Calldata refers to the data provided in the call to a smart contract. This is also the core point that is cheaper than using contract storage.
In the dumb contracts of ESIP-4, commands can be executed: deployment (creating new contracts), invocation (calling state-changing functions of existing contracts). This process is also stored in an inscription manner, with transactions stored on-chain in the calldata field, bypassing EVM execution and storage costs.
ESC-VM provides a similar environment to EVM for dumb contracts, allowing the functionality of dumb contracts to run in parallel with smart contracts. In simple terms, ESC-VM can basically be considered as EVM.
In this process, because EVM execution and storage costs are bypassed, dumb contracts are much cheaper than smart contracts, which can significantly reduce costs, thereby solving the core purpose of Layer2.
But there are definitely significant differences. Let's take a look at the differences between ESC-VM and existing Layer2.
Differences between ESC-VM and existing Layer2 (Is the ESC-VM an L2?)
In the ESIP-4 white paper, this point is actually very clear and reasons are given.
The ESC VM is not an L2. One way to understand this is to consider the two notions of consensus that exist on Ethereum:
(1) Consensus over what transactions are included in each block and in what order.
(2) Consensus over the aggregate impact (1) has on the state of the EVM.
The main idea of Ethscriptions is:
To build a fully decentralized system by focusing on (1), because the state of the blockchain clearly and deterministically specifies the state of the EVM. Anyone can independently and precisely verify the state of the EVM based solely on the blockchain itself.
On the other hand, verifying the "truth" of (1) is impossible because it is a non-deterministic process with no "correct answer." Combining (1) and (2) in the Ethereum protocol is ideal.
However, for most applications, this combination is too expensive. Ethscriptions sacrifices a part of the Ethereum protocol (2) and builds tools to make the computation of deterministic states convenient.
In contrast, L2 takes the opposite approach. Because L2 states are managed in the context of the blockchain, they are more convenient to verify than the state of the Ethscriptions ecosystem.
However, the verification of L2 is conditional. It says that given X transactions are included in a block with a sequence of Y, we can infer that the state of the blockchain should change to Z. But in the L2 system, there is no way to verify if X and Y are correct.
In general, X and Y are only fair when they align with the goals of the organization operating L2. The company operating L2 has a fiduciary responsibility to shareholders that outweighs the interests of L2 users. In extreme cases, if L2 no longer serves the company's interests, it will be shut down.
The concept represented by Ethscriptions is:
In the absence of decentralized consensus on non-deterministic issues (such as block inclusion and transaction ordering), the blockchain can never be considered secure. The goal of using ESC-VM is to combine decentralization and security with functionality close to EVM.
Existing Issues
Currently, there are some issues that need to be addressed with Dumb Contracts.
① Dumb contract functionality cannot make direct payments and requires bridging.
② ESIP-4 does not allow arbitrary creation of dumb contracts. Dumb contracts can be deployed and executed in an untrusted manner, but the code itself is defined together with the rest of the Ethscriptions protocol rules in the ESIP process.
③ @ethan0x8699 mentioned a very important issue: eths is extremely dependent on indexers, but the mechanism does not give enough attention to indexers. Given this issue, a separate in-depth article can be written, so I won't discuss it further here.
References:
① ESIP-4: The Ethscriptions Virtual Machine: https://docs.ethscriptions.com/esips/esip-4-the-ethscriptions-virtual-machine…
② @ethan0x8699: https://twitter.com/ethan0x8699/status/1717421307619688501…
③ @cryptocupideth: https://twitter.com/cryptocupideth/status/1717191327543443633…
④ @0xNing0x: https://twitter.com/0xNing0x/status/1717186567130030476…
⑤ @wangfeng0128: https://twitter.com/wangfeng0128/status/1717188580471406858…
⑥ 世链财经: https://panewslab.com/zh/articledetails/3x3fi5984w57.html…
⑦ Arunkumar Krishnakumar: https://cointelegraph.com/authors/arunkumar-krishnakumar…
⑧ Arrow's previous articles on Layer2: https://twitter.com/ArrowCrypto_eth/highlights
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