The Protocol: Ethereum Developers Warn on ‘Diversity Problem’

In
this
week’s
issue,
we’re
covering
crypto
developers’
renewed
focus
on
the
Ethereum
blockchain’s
controversial
overreliance
on
a
single
software
“client”
called
Geth,
and
the
grumbles
of
crypto
users
who
were
hoping
for
a
bigger
token
airdrop
from
the
Manta
project.

We’ve
also
got:

ETHEREUM’S
DIVERSITY
PROBLEM.
In
the
blockchain
tech
context,
“client
diversity”
refers
to
the
goal
of
having
multiple
software
programs
–
known
as
“clients”
–
available
for
node
operators
and
validators
to
access
networks;
as
the
thinking
goes,
if
one
of
these
clients
goes
down,
due
to
a
bug
or
some
other
mishap,
there
are
plenty
of
other
clients
that
would
remain
largely
unaffected,
preserving
the
blockchain’s
uptime.
Ethereum’s

problem,
based
on
a
debate
that
erupted
on
the
social-media
platform
X
over
the
past
few
days,
is
that
it’s
heavily
reliant
on
the
client
software
Geth,
which
powers
around

85%
of
the
blockchain’s
validators.
As
our
Sam
Kessler

reported
this
week,
a
bug
on
the
“minority”
client
software
Nethermind,
which

powers
around
8%
of
the
validators
that
operate
Ethereum,
knocked
out
a
chunk
of
those
operators
on
Sunday.
Since
the
share
was
relatively
small,
the
blockchain
kept
running
as
designed.
But
some
experts
took
the
opportunity
to
point
out
how
bad
things
could
have
gotten
if
Geth
had
gone
out.
Cygaar,
a
crypto
educator,

noted
in
an
X
post
that
“Ethereum
has
terrible
client
diversity,”
adding
that,
“A
critical
issue
in
Geth
can
lead
to
potentially
millions
of
ETH
being
destroyed
from
validators
running
Geth.”
DCinvestor,
a
pseudonymous
crypto
investor
with
a
large
social
media
following,

claimed
in
an
X
post
that
they
were
pulling
their
staked
funds
from
Coinbase
until
the
company
switches
its
validator
operations
to
a
system
that
relies
less
on
the
Geth
client:
“I
can’t
ignore
the
risks.”
Per
the
website,

ClientDiversity.org,
which
billboards
the
mantra,
“Diversify
Now,”
the
goal
is
for
no
individual
client
software
to
have
more
than
a
33%
market
share.

MANTA
RAID:
So
much
of
the
drama
in
the
blockchain
industry
revolves
around
the
pursuit
of

airdrops
–
token
giveaways
to
early
adopters,
designed
to
incentivize
growth
and
build
community.
Rarely
do
these
things
come
with
hard-and-fast
expectations;
there’s
a
leap
of
faith;
users
ape
into
protocols,
hoping
they’ll
get
rewarded.
Last
week’s
airdrop
of

MANTA
tokens
to
users
of
the
Ethereum
layer-2
network
Manta
shows
what
it
looks
like
when
the
airdrops
fall
short
of
expectations.
According
to

The
Defiant,
Manta
allocated
3%
of
its
total
supply
to
early
users,
quickly
derided
as
“the
most
disappointing
of
the
year.”
CoinDesk’s
Shaurya
Malwa

reported
that,
as
the
rewards
trickled
out,
the
network
was
hit
with
a
distributed
denial
of
service
(DDoS)
attack,
leading
to
longer-than-expected
withdrawal
times
and
a
slow
network.
“We
know
the
community
has
mixed
feelings
right
now,
and
we
are
very
thankful
to
those
that
have
reached
out
to
support
and
help
us
get
through
this,”
a
representative
of
the
project

tweeted
on
Jan.
18.
The
project,
for
what
it’s
worth,
describes
its
new
Manta
Pacific
network
as
“the
first
Ethereum
L2
using
Celestia”
for
data
availability
–
a
coup
given
how
large
Celestia
looms
in
the
increasingly
dominant
“modularity”
push
among
blockchain
developers.

Top
picks
of
the
past
week
from
our
Protocol
Village
column,
highlighting
key
blockchain
tech
upgrades
and
news.

See
the
entire
Protocol
Village
list
from
this
past
week
here.

Ripple
Labs
CTO
David
Schwartz
is
hailed
as
a
guru
in
some
corners
of
the
cryptocurrency
industry
–
especially
among
the
XRP
Army,
comprised
of
fans
of
the
cryptocurrency
XRP.

But
the
XRP
Ledger,
the
blockchain
that
Ripple
Labs
created,
has
had
critics
ranging
from
Bitcoin
and
Ethereum
purists
to
the
U.S.
Securities
and
Exchange
Commission.

When
Ripple
scored
a
win
six
months
ago
in
its
years-long
legal
battle
with
the
SEC,
the
result
capped
off
years
of
limbo
for
the
blockchain
tech
firm.
The
lawsuit
made
it
difficult
for
Ripple
Labs
to
attract
banks
and
other
customers
to
its
institution-focused
RippleNet
–
a
cross-border
payments
platform
powered
by
the
XRP
Ledger
and
the
XRP
cryptocurrency.
But
it’s
not
just
Ripple
Labs’
legal
drama
that
hampered
adoption:
Since
inception,
Ripple
and
the
XRP
Ledger
have
failed
to
break
into
the
same
developer
zeitgeist
as
Bitcoin,
Ethereum
and
other
crypto
mainstays.
Ripple’s
legal
victory
could
draw
more
developers
into
its
fold.

All
this
and
more
was
on
the
table
when
Schwartz
sat
down
for
an
interview
last
week
with
The
Protocol.
Schwartz
discussed
the
aftermath
of
Ripple’s
SEC
win,
his
method
for
dealing
with
XRP’s
rabid
fanbase,
the
XRP
Ledger’s
approach
to
decentralization,
and
much
more.

For
the
full
Q&A
by
David
Schwartz,
please
go
here

Fundraisings

Deals
and
Grants

Data
and
Tokens

Electric
Capital,
an
investment
firm,
came
out
with
its

annual
report
on
crypto
developer
activity
in
2023,
providing
a
sweeping
view
of
the
overall
ecosystem
–
including
which
projects
are
up,
and
which
ones
are
down.
Usually
we
just
provide
one
chart
in
this
section
of
the
newsletter,
but
since
the
Electric
Capital
report
is
viewed
as
an
industry
benchmark,
we
decided
to
include
a
few
of
the
key
slides.
(Hey
there
were
181
in
all!)
The
big
picture
emerging
from
last
year’s
crypto
winter
shouldn’t
be
surprising
to
regular
readers
of
The
Protocol,
who
were
subjected
to
our
regular
updates
on
just
how
many
jobs
were
getting
cut
at
some
of
the
largest
blockchain
projects.
But
here’s
what
the
final
tally
looked
like
–
a
24%
drop
in
the
total
number
of
active
developers
to
22,411:

Not
surprisingly,
Ethereum
(blue
in
the
chart
below)
and
Bitcoin
(orange)
accounted
for
a
big
percentage
of
all
crypto
developers:

Among
larger
ecosystems,
defined
as
those
with
at
least
150
developers,
these
were
the
fastest-growing,
led
by
the
Ethereum
layer-2
“zkEVM”
network
Scroll: