Ethereum has grown from a novel smart contract platform to a blockchain supporting thousands of decentralized applications (dApps). Developers considering Ethereum face some unique opportunities and challenges that differ from those in traditional software development.
The Ethereum blockchain continues to mature regardless of the price of Ethereum, as can be seen on sites like Binance, Forbes and Bloomberg for example. The price of the ETH token may fluctuate but the underlying technology and developer tooling have steadily improved since Ethereum's launch in 2015. Here are a few key areas developers should investigate.
Smart contracts
Smart contracts are the backbone of Ethereum development. These self-executing programs run on the Ethereum Virtual Machine (EVM) and enforce agreements between parties (e.g. a seller and customer) without intermediaries, or a middleman. Written primarily in Solidity, smart contracts handle simple token transfers, complex decentralized finance protocols, and various applications in between.
The immutable (unchangeable) nature of deployed smart contracts calls for a different mindset from a developer. Once deployed, code can't easily be modified, making thorough testing and security reviews even more important. Upgradable proxy patterns such as OpenZeppelin's upgradeable contracts do allow contract behavior to evolve, but some developers underestimate this relative permanence until first experiencing a flawed deployment.
The Ethereum development stack
Building on Ethereum requires some familiarity with several technologies. These include smart contract languages like Solidity and Vyper, development frameworks such as Hardhat and Foundry, testing libraries like Waffle and Chai, node providers, frontend libraries, and wallet integrations. Each of these components serves a specific purpose in the workflow. Frameworks like Hardhat have simplified the process, integrating environments for writing, testing, and deploying contracts.
Gas optimization
Optimizing gas (fees paid in ETH) remains a consideration for developers. Each operation in a smart contract costs gas, with prices varying based on network congestion. Inefficient contracts can become too expensive for users. Optimization strategies include minimizing storage operations, batching transactions, using appropriate data types, implementing gas-efficient patterns, and avoiding loops with unpredictable iteration counts.
These optimizations mean developers have to think about computational efficiency differently than in traditional software development, where resources are often more abundant.
Security
Ethereum's immutability and financial nature make security crucial. Some vulnerabilities include integer overflow/underflow, reentrancy attacks, logic errors, front-running (which can now be mitigated in part by tools like Flashbots), and access control issues.
Security-focused development should include audited libraries like OpenZeppelin, formal verification, following established patterns, comprehensive testing, and securing multi-signature requirements for critical functions.
The consequences of security failures on Ethereum are immediate and often irreversible; attacks can result in permanent loss of funds.
Layer 2 solutions
Layer 2 technologies operate on top of the main Ethereum chain, Layer 1. These increase throughput and reduce transaction costs. Solutions include:
- optimistic rollups (Optimism, Arbitrum)
- ZK-rollups (zkSync, StarkNet)
- state channels
- Validiums (off-chain data availability) and volitions (hybrid on/off-chain models).
Each of these approaches makes different tradeoffs between decentralization, performance, and security. Understanding the distinctions helps developers choose the right scaling solution for their specific application requirements.
Testing and deployment
Effective testing typically includes: unit tests for individual functions; integration tests for contracts; Mainnet forking for realistic test environments; and formal verification for critical components.
Deployment requires careful planning. Developers must select appropriate networks (testnet, mainnet), manage contract upgrades, set up monitoring systems, and implement emergency measures.
The EVM and Bytecode
Developers should understand the Ethereum Virtual Machine for insight into how their code executes. The EVM is a stack-based virtual machine that processes bytecode, the compiled form of Solidity or Vyper contracts. Key concepts include opcodes and gas costs, memory management, storage layout, and call stack limitations.
The knowledge becomes particularly helpful when optimizing more complex contracts or debugging unusual behavior.
Ethereum's roadmap and Improvement Proposals
The blockchain's development roadmap is guided by Ethereum Improvement Proposals (EIPs) that outline potential protocol changes and new standards.
Notable examples have included ERC-20 (fungible tokens), ERC-721 (non-fungible tokens, or NFTs), ERC-1155 (multi-token standard), and EIP-1559 (fee market change).
Keeping track of EIPs helps developers anticipate changes that could affect their apps, and also leverage new capabilities when available.
Interoperability
Modern Ethereum apps usually interact with other apps. Developers should consider how theirs may interact with other smart contracts, multiple blockchains, Layer 2 solutions, and external data sources (oracles), as well as traditional systems.
Interoperability requires thorough planning of contract interfaces and understanding of cross-chain communication mechanisms.
Development tools
The Ethereum development space offers useful tools for different stages of the process. There are local development environments like Ganache and Hardhat Network; code analysis tools; documentation generators; and block explorers like Etherscan. Using these tools, developers can streamline their workflows and identify potential issues before deployment.
Governance and community
Ethereum operates through distributed governance and decisions are made with community consensus. Developers should research the governance process, community channels for discussion, how proposals are evaluated and implemented, and the roles of various stakeholders.
Participation in governance discussions helps shape Ethereum's future and ensures apps remain aligned with new developments.
Regulation
The regulatory landscape for blockchain apps continues to change. Developers should be aware of compliance requirements, KYC/AML considerations if working in finance, securities regulations for tokens, and data protection requirements.
Takeaways
Building on Ethereum requires mastering skills specific to blockchain development and adapting to an evolving space. The most complete developers combine deep technical knowledge with an understanding of the economic, social, and governance aspects of decentralized systems.