Ever wondered how new improvements make their way into Ethereum? Today, let’s dive into how proposals are made, discussed, and eventually become part of the Ethereum ecosystem — everything you need to know, all in one place.

So, How Does Ethereum Evolve?

Ethereum’s development process is modeled after Bitcoin’s. While Bitcoin uses BIPs (Bitcoin Improvement Proposals), Ethereum has EIPs (Ethereum Improvement Proposals). These documents outline proposed enhancements to the network, reflecting Satoshi Nakamoto’s influence.

Here’s how it works: If you want to propose an improvement to Ethereum, you go to the dedicated forum at ethresear.ch and write a blog post outlining your idea. Anyone can submit a proposal — there are no restrictions, and no formal format is required. Generally, these proposals come from researchers within the Ethereum community or development teams.

Once a post is up, it’s discussed by the researcher community. They first tackle a crucial question: Should this proposal be integrated into the Ethereum protocol, or is it better suited as a separate product? Most proposals end up as products. If you browse the forum, you’ll find a wealth of innovative ideas for decentralized technologies — ideas that can be developed into new products. Many leading crypto technologies have been discussed here.

If developers decide a proposal could be integrated at the protocol level, someone steps up to draft a document describing the technology — this is the EIP. The EIP must explain what the proposal is, why it’s needed, and how it will improve the network. Technically, it’s a document in a GitHub repository. If no volunteer emerges to create the document, the idea remains on the forum, waiting for attention.

There are now over 8,000 EIPs in total.

The EIP Discussion and Prototyping Process

Next comes the EIP discussion on the forum. If the community isn’t interested, the proposal might be set aside and forgotten. But if an EIP sparks interest, a developer or team might jump in and say, “We’ll build a prototype!”

The funnel from EIP to EIP with a prototype is roughly 1:10. That means out of 8,000 ideas, about 800 are developed into prototypes of reasonable quality. Often, these prototypes are created by developers from various teams within the Ethereum ecosystem since there’s no direct payment for developing an EIP prototype — it’s a purely non-commercial effort. Occasionally, if an EIP is especially compelling, it might receive a grant, though that’s more of an exception.

If the prototype is completed and the community approves it, the proposal can move forward to implementation. This means the EIP discussions enter the call with All Core Devs. All Core Devs is an assembly of, usually, one developer per Core Dev team of the Ethereum ecosystem. The number ranges at times, but generally, it’s about 10-20 teams that work on the key Ethereum tech.

The goal of these All Core Devs calls is to decide what should be implemented into the network’s protocol next. This should be a conclusive decision, meaning that they should reach a consensus.

From Ideas to Hard Forks

Ethereum devs gather all the ideas that accumulate over time in EIPs into a massive roadmap, which is often demonstrated by Vitalik Buterin. In this Ethereum Roadmap, there are different directions and work blocks, but under each block, there’s one or more EIP — those very ideas from the forum (Vitalik could write those ideas too).

The All Core Devs team spends a lot of time discussing and gathering EIPs during their calls. These EIPs are then grouped into a package, referred to as a Hard Fork. This list is public, so anyone can view, discuss, and review it. So, the next time you read in a reputable financial publication or hear from Bitcoin maximalists that Vitalik changes Ethereum on a whim, you can argue that it's actually a decision made by the All Core Devs assembly.

Naturally, when deciding which EIPs make it into a Hard Fork, disputes arise. Each team wants their EIP included in the next fork, and it's not uncommon for frustrations to surface when a proposal gets sidelined. There have been instances in Ethereum's history where the All Core Devs didn’t assemble simply because they thought, "What's the point? We'll just end up arguing." So, if there hasn’t been a hard fork in a while, it likely means consensus hasn't been reached.

Researchers often pack as many prototypes into a fork as they can. They didn’t develop all these ideas just to let them sit idle, right? Once the prototypes are in, the All Core Devs teams have to sift through them and narrow down the EIPs. After all, they’re the ones who’ll be responsible for making everything work. Running a network with over a million users involves more than just drafting documents and brainstorming ideas.

Development and Implementation

To develop complex EIPs, Ethereum conducts offsites, usually once a year. These are internal events where core developers gather for a week or two in a hackathon format to code all the ideas needed. They work on coding, discussing well-thought-out ideas that need a bit more development, and fixing bugs.

There could also be separate themed calls focused on complex or large EIPs. Note that not all core developers know every aspect of Ethereum; that’s likely only Vitalik. Each developer typically has their own area of specialization.

Once it’s decided which EIPs will be included in a fork, the Core Devs team and prototype developers start the implementation into production code. There’s a funnel here — not all planned EIPs can be completed within schedule. In fact, only a small number make it into the hard fork on time and with production-ready quality.

EIP Politics

And what about politics? If you want the Ethereum community to focus on your specific EIP, you'll need to lobby for it. That’s why many EIPs have their own websites, communities, and thought leaders pushing them on Twitter. It’s hard to say if this strategy works, but anyone can give it a shot.

Some EIPs, by the way, become the very tokens you create, buy, and sell — like the current ERC20 (fungible tokens, similar to currencies), ERC721, and ERC1155 (tokens for unique assets). So, out of over 8,000 ideas, only three have become global token standards. Right now, the community is working on creating economic tokens, dividend tokens, revenue-sharing tokens, and other protocols that distribute money. When developers solve this problem at the standard level, it could significantly improve all our lives.

The most promising innovations for mass adoption — Ethereum wallet accounts linked to regular Web2 email addresses and the Account Abstraction technology — are the standards ERC 4337 and ERC 7579.

Summing Up

In essence, the foundation of many cutting-edge fintech developments worldwide can be traced back to specific ideas within the Ethereum ecosystem. These ideas are meticulously documented through Ethereum Improvement Proposals (EIPs), each representing a potential advancement for the network. The significance of EIPs goes beyond the written proposals; they are part of a broader, collaborative process where the community actively participates in shaping the future of Ethereum.

Interestingly, the discussions that lead to these innovations are often public. Platforms like YouTube host real-time debates where developers dissect and deliberate over various EIPs, offering transparency and insight into the decision-making processes that drive Ethereum forward.

This collaborative and decentralized approach explains why Ethereum remains a top network in the blockchain space.

*This text is a free rewrite of a pitch about Ethereum development from one of its developers.