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Ethereum is a decentralized open-source blockchain system that runs smart contracts, dApps (decentralized applications) that can execute code without intermediaries or censorship. Following Bitcoin in terms of popularity, Ethereum is a cryptocurrency whose underlying technology has the power to completely alter a variety of industries.
Non-fungible tokens (NFTs), which can stand in for anything from art to physical assets, can also be created and traded using Ethereum. This provides new opportunities for artists to commercialize their work and for people to have more control over their assets.
Ethereum is constantly evolving and improving, thanks to the contributions of Vitalik Buterin, Mihai Alisie, Gavin Wood, Joseph Lubin, Anthony Di Iorio, and its diverse and passionate community.
One of the ways that the community proposes, discusses, and adopts changes to the Ethereum protocol and standards is through the Ethereum Improvement Proposal (EIP) process.
What is an (EIP) Ethereum Improvement Proposal?
EIP stands for Ethereum Improvement Proposal. EIPs are proposals that suggest new features or processes for the Ethereum network. They include technical details for the proposed changes and are considered the definitive source of information for the community. The development and discussion of network upgrades and application standards for Ethereum occur through the EIP process.
Any member of the Ethereum community can create an EIP as per the guidelines mentioned in EIP-1. An EIP should provide a precise technical specification with minimal motivation. The EIP's author is in charge of gathering community consensus and documenting divergent viewpoints. Due to the technical expertise required to submit a well-formed EIP, most authors have historically been developers of applications or protocols.
How are Ethereum Improvement Proposals (EIPS) approved?
EIPs are approved after discussion, deliberation, and consensus. An EIP can be proposed by anybody, but before it can be implemented, it must be evaluated and accepted by the Ethereum community.
Following is the procedure for passing an EIP: An EIP proposal is made by a developer and uploaded to the Ethereum repository.
- The EIP is examined by the EIP editors, who look for grammatical errors and technical soundness.
- The EIP is available for public discussion and is posted on the Ethereum website.
- The "Last Call" stage is where the Ethereum Core Developers review the EIP if it receives positive feedback.
- The Ethereum software incorporates the EIP if the Core Developers agree with it.
Not all EIPs are approved. An EIP may be rejected or delayed if there is sufficient opposition to it. In the end, it is up to the Ethereum community to decide whether or not to pass an EIP.
Additional information regarding the EIP procedure is provided below:
- EIPs are not enforceable in court. They are merely ideas that the Ethereum community has approved.
- EIPs may discuss any topic that has an impact on the Ethereum network, such as brand-new features, modifications to already-existing features, or process enhancements.
- EIPs are not always put into action right away. They can be rejected outright or put off until a later time.
- The EIP procedure is clear-cut and open. The discussion and debate surrounding an EIP are open to everyone.
The Ethereum governance structure includes the EIP process, which is crucial. It guarantees that modifications are done thoughtfully and deliberately and gives the community a voice in the network's direction.
Let’s dive through the important Ethereum Improvement Proposals (EIPs):
Ethereum Request for Standard Token (ERC-20) :
ERC-20 establishes a standard for fungible tokens or tokens that are identical to one another in both type and value. Like how one ERC-20 Token is and always will be equal to all other Tokens because an ERC-20 Token behaves precisely like ETH.
Tokens are powerful tools in the Ethereum ecosystem. They can represent virtually anything, from reputation points in an online platform to the skills of a character in a game. ERC-20 is a standard that defines how fungible tokens should work on Ethereum. This means that each ERC-20 token is exactly the same as every other ERC-20 token, just like how each ETH token is the same as every other ETH token.
ERC-20 tokens are frequently used to symbolize digital assets like corporation shares or fiat money. They can also be used to represent intangible goods like game cash or reward points. All ERC-20 tokens are required to implement a set of functionalities that are defined by the ERC-20 standard.
These activities include an ERC-20 token contract is a smart contract that adheres to the ERC-20 standard. The produced tokens on Ethereum will be managed by an ERC-20 token contract after it has been launched. On Ethereum, a number of assets can be represented by ERC-20 tokens, which are a strong tool.
They are the de facto standard for fungible tokens on Ethereum, and they are widely supported by wallets, exchanges, and other dApps.
Here are well-known currencies that use the ERC-20 token standard:
- Tether USD (USDT)
- USD Coin (USDC)
- Shiba Inu (SHIB)
- Binance USD (BUSD)
- BNB (BNB)
- DAI Stablecoin (DAI)
- HEX (HEX)
- Bitfinex LEO (LEO)
- MAKER (MKR)
These are just a few examples of the many ERC-20 tokens that exist. As the Ethereum ecosystem continues to grow, we can expect to see even more ERC-20 tokens being created.
EIP 137: Ethereum Domain Name Service (ENS)
A proposed protocol called the Ethereum Name Service provides flexible resolution of short, human-readable names to service and resource identifiers. The specifications of the Ethereum Name Service are described in EIP 137.
This allows for human-readable and simple-to-remember names to be used by users and developers, and it also enables those names to be modified as needed when the underlying resource (a contract, content-addressed data, etc.) changes. Providing reliable, readable identifiers that may be used to define network resources is the aim of domain names. In this method, visitors can get to the right resource by typing a memorable string, such as "vitalik.wallet".
The relationship between names and resources may evolve over time, allowing users to switch wallets, website hosts, or swarm documents to be updated to a new version without having to alter the domain name. Additionally, a domain need not describe a single resource because it can reference multiple resources thanks to various record types.
ERC 721 NON-FUNGIBLE TOKEN:
The ERC-721 (Ethereum Request for Comments 721) standard is used to define non-fungible token ownership, with each token being distinct and verifiable on the Ethereum network. The fungible token (i.e., a token that can be exchanged for its counterpart and retain its value) is ideally suited for the ERC-20 token standard by simply identifying variations in wallet balances.
On the other hand, ERC-721 smart contracts map a distinct token ID to an owner rather than checking balances. Having several NFTs would mean that each one is distinct and that their token IDs correspond to various owners.
Since they may be in enormous file formats and sizes sometimes going upto tens of gigabytes, digital objects like images, audio, collectible cards, and other sorts of digital files are typically not directly kept on the blockchain.
For instance, digital collectibles like baseball cards are stored off-chain, but information about them, such as their ID, some metadata with links to external resources that store them, their hash, etc., are stored on the blockchain and linked to an owner thanks to the ERC-721 standard.
ERC-1155 Multi-Token Standard:
ERC-1155 permits the development of both fungible and non-fungible tokens. The ERC-1155 Ethereum token standard combines the capabilities of earlier standards like ERC-20 (for fungible tokens) and ERC-721 (for non-fungible tokens).
Blockchain-based assets may now be created and traded more cheaply and efficiently thanks to ERC-1155, which facilitates the efficient transfer of both fungible and non-fungible tokens in a single transaction. The ERC-1155 standard, which combines the traits of ERC-721 and ERC-20, offers applications in a range of fields, including gaming, creator monetization, and more.
EIP 1679 The Ethereum Hardfork Meta:
Istanbul tracks the changes included in the Istanbul hardfork. Istanbul is the eighth Ethereum hardfork and was activated on December 7th, 2019.
EIP 3675 Consensus upgrade from to Proof-of-Work to Proof-of-Stake
EIP-3675 intends to change the Ethereum network's consensus method from Proof-of-Work (PoW) to Proof-of-Stake (PoS).
On July 22, 2021, Mikhail Kalinin, Danny Ryan, and Vitalik Buterin created this proposal. The proposal defined the collection of modifications introduced by the consensus upgrade to the block structure, block processing, fork decision mechanism, and network interface.
The purpose of this proposal was to assure the Ethereum network's survival and success by implementing a more sustainable and safe consensus mechanism.
EIP 4337 The Birth of Account Abstraction:
ERC-4337 is an Ethereum standard that enables smart contract wallets to act as primary accounts without any consensus-layer changes. This standard defines a new type of account called a smart account. Smart accounts are controlled by a combination of private keys and smart contracts.
To create a smart account, you would need to generate a private key and a smart contract. The smart contract would define the rules for how the account can be used. For example, the smart contract could define who can access the account, what transactions the account can send, and how much gas the account can spend.
Once you have created a smart account, you can use it to interact with the Ethereum blockchain. You can send and receive transactions, create and deploy smart contracts, and participate in decentralized applications.
EIPs play a crucial role in the Ethereum ecosystem. They allow anyone to propose changes to the blockchain, and they help to ensure that the blockchain is constantly evolving and improving. If you have an idea for an EIP, do consider submitting it to the Ethereum Improvement Proposal repository.
