Achievements of Ethereum in 2023: A Year of Innovation and Growth

Ethereum, the world's leading programmable blockchain, has had a remarkable year in 2023, making significant strides in various aspects, including its technical infrastructure, partnerships, and impact on the broader cryptocurrency ecosystem. We review 5 biggest and exciting achievements of Ethereum in 2023:

1. The introduction of Sharding:

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Sharding is a process of dividing the Ethereum network into smaller subchains, or shards, which can significantly improve transaction throughput and reduce latency. By spreading the network's workload across multiple shards, sharding can significantly increase Ethereum's transaction capacity, enabling the network to handle more transactions per second without compromising security or decentralization.

Particularly, in January 2023, the first stage of Sharding was successfully launched on Ethereum, enabling the network to process up to 100,000 transactions per second. This was a significant milestone for Ethereum, as it addressed one of the key limitations that had hindered its widespread adoption. Later on, in September 2023, Ethereum developers announced the timeline for the completion of full sharding, which is expected to occur by the end of 2024. This will further improve Ethereum's scalability, making it more capable of handling the growing demand for its services.

2. The development of EIP-1559

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EIP-1559 is a major upgrade to Ethereum's transaction fee mechanism that introduced a fee burning mechanism. This mechanism has helped to stabilize the network's transaction fees and contributed to the growth of Ethereum's ecosystem. For example, before EIP-1559, transaction fees on Ethereum were completely unpredictable, often fluctuating wildly based on network congestion. This made it difficult for users to plan their transactions and led to widespread frustration. EIP-1559 addressed this issue by introducing a fixed base fee and a variable priority fee that is burned, or destroyed, on Ethereum's blockchain. This mechanism has helped to stabilize transaction fees and make them more predictable for users.

3. The launch of Ethereum Layer 2 scaling solutions

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To further address Ethereum's scalability issues, several Layer 2 scaling solutions have been launched in 2023. These solutions operate on top of the Ethereum blockchain and provide alternative transaction pathways, enabling faster and cheaper transactions without compromising security. To put it in perspective, some of the most prominent Layer 2 scaling solutions include Optimism, Polygon, and Arbitrum. These solutions have helped to reduce congestion and improve transaction speeds on Ethereum's mainnet, making it more user-friendly and accessible to a wider audience. In fact, in May 2023, the total value locked (TVL) on Ethereum Layer 2 scaling solutions surpassed $100 billion for the first time, demonstrating the growing adoption and effectiveness of these solutions.

4. The growth of DeFi applications on Ethereum

The DeFi (decentralized finance) ecosystem, which allows users to borrow, lend, trade, and invest in a variety of financial products without the need for intermediaries, has continued to grow in 2023. Ethereum has played a key role in this growth, as it provides the underlying infrastructure for many DeFi applications. The total value locked on Ethereum DeFi protocols surpassed $150 billion, indicating the immense popularity and potential of these applications in August 2023. In order to muscle up this effort the creation of a DeFi Infrastructure Grant program to work on innovative DeFi projects was announced about 3 months ago.

5. The increased adoption of NFTs

Ethereum has also played a significant role in the growth of non-fungible tokens(NFTs ), which are unique digital assets that can represent ownership of virtual goods and collectibles. Ethereum's smart contract capabilities make it possible to create and manage NFTs, and the network has become the primary platform for NFT trading. In February 2023, the NFT trading platform OpenSea surpassed $1 billion in daily trading volume, demonstrating the growing demand for NFTs on Ethereum as a blockchain infrastructure.

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