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Slide 1: Introduction to Ethereum

• What is Ethereum?

  • A decentralized, open-source blockchain platform that allows developers to build and deploy decentralized applications (dApps) using smart contracts.
  • Created by Vitalik Buterin in 2015 to overcome the limitations of Bitcoin by providing a platform for programmable transactions.

  Key Features:

  • Smart Contracts: Self-executing contracts with the terms of the agreement directly written into code.
  • Turing Complete: Ethereum’s programming languages (Solidity, Vyper) enable complex computations.
  • Decentralization: Powered by a global network of nodes without a central authority.

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Slide 2: What is ETH (Ether)?

• Definition: Ether (ETH) is the native cryptocurrency of the Ethereum network, used to compensate participants who execute operations on the network.

  Primary Uses:

  • Gas Fees: Users must pay Ether to run transactions, deploy smart contracts, or interact with dApps. Gas is priced in gwei (1 gwei = 10^-9 ETH).
  • Staking: With Ethereum 2.0, users can stake ETH to participate in the network’s Proof of Stake (PoS) consensus mechanism.
  • Medium of Exchange: ETH is used to transfer value between users, pay for services, or settle transactions in decentralized finance (DeFi).

  Tokenomics:

  • Supply: ETH has no fixed supply cap, but its issuance rate is controlled. Ethereum recently implemented a fee-burning mechanism (EIP-1559) that reduces ETH supply over time.
  • Gas Mechanism: Gas fees are calculated as Gas Limit * Gas Price, where the Gas Limit is the amount of gas a transaction can consume.

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Slide 3: Ethereum Network Architecture

• Core Components:

  • Nodes: Machines that run the Ethereum client software, validate transactions, and maintain the blockchain. Each node holds a copy of the entire Ethereum blockchain.
  • Consensus Mechanism: Ethereum transitioned from Proof of Work (PoW) to Proof of Stake (PoS) through the Ethereum 2.0 upgrade, using validators instead of miners to secure the network.
  • Shard Chains: Ethereum 2.0 introduces sharding, dividing the blockchain into multiple “shards” to improve scalability by processing transactions in parallel.

  Network Types:

  • Mainnet: Ethereum’s primary production network where real transactions and dApps operate.
  • Testnets: Used for testing without risking real value. Popular testnets include Goerli, Sepolia, and Rinkeby.

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Slide 4: Ethereum Ecosystem Overview

• Decentralized Applications (dApps):

  • Ethereum serves as the foundation for decentralized applications that operate without a central server.
  • Categories of dApps:
    • DeFi (Decentralized Finance): Financial services like lending, borrowing, and trading on platforms like Uniswap, Aave, and Compound.
    • NFTs (Non-Fungible Tokens): Unique digital assets representing ownership of digital art, music, or in-game items. Examples: OpenSea, Rarible.
    • Gaming and Virtual Worlds: Blockchain-based games and virtual worlds like Decentraland and Axie Infinity.
    • DAOs (Decentralized Autonomous Organizations): Organizations governed by smart contracts where decision-making is decentralized. Example: MakerDAO.

  Interoperability: Ethereum interacts with other blockchains and Layer 2 solutions, improving scalability, transaction speeds, and reducing fees.

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Slide 5: Ethereum Keys and Addresses

• Private Key:

  • A 256-bit hexadecimal number that controls access to an Ethereum account.
  • Must be kept secret, as possession of the private key gives full control over the corresponding funds and smart contracts.

  Example:

  0x4c0883a69102937d623141d45729f8aeb94e3b5bbbe917f93e098e12d346f6e9
  

• Public Key:

  • Derived from the private key using elliptic curve cryptography.
  • Used to generate the Ethereum address but does not need to be kept secret.

• Ethereum Address:

  • A 40-character identifier derived from the public key. It represents the user’s account or a smart contract on Ethereum.
  • Typically starts with 0x and is used to send or receive Ether.

  Example:

  0xde0b295669a9fd93d5f28d9ec85e40f4cb697bae
  

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Slide 6: Understanding Ethereum Transactions

• Transaction:

  • A cryptographically signed instruction to transfer value (Ether) or interact with a smart contract.
  • Each transaction on Ethereum contains fields such as:
    • Sender Address: The account initiating the transaction.
    • Recipient Address: The account or contract receiving the transaction.
    • Amount: The quantity of Ether being sent.
    • Gas Limit: The maximum amount of gas the sender is willing to spend.
    • Gas Price: The price per unit of gas (denominated in gwei).

  Transaction Lifecycle:

  1. Broadcast: Sent by msg.sender and broadcasted to the Ethereum network.
  2. Validation: Verified by validators/miners.
  3. Execution: The transaction is executed, and its result is added to the blockchain.

  Example of a Transaction Structure:

  {
    "from": "0xSenderAddress",
    "to": "0xRecipientAddress",
    "value": "0xAmountInWei",
    "gas": "0xGasLimit",
    "gasPrice": "0xGasPrice",
    "data": "0xOptionalData"
  }
  

Slide 7: Messages in Ethereum

• Message:

  • An internal call made by contracts to interact with other contracts or accounts. It is not a full transaction but an invocation.

  Key Concepts:

  • msg.sender: Represents the initiator of the call or transaction. In the context of a contract, it shows who triggered the function.
  • msg.value: The amount of Ether sent with the message.

  Example:

  function sendFunds() public payable {
      require(msg.value >= 1 ether, "Insufficient funds sent");
      // Logic here
  }
  

  • msg.data: Contains the raw data sent in the message. This can be used for low-level function execution.

Slide 8: Understanding Ether

• Ether (ETH):

  • The native cryptocurrency of Ethereum, used for transactions, paying gas fees, and staking in Ethereum 2.0.

  Denominations:

  • Wei: The smallest unit of Ether. 1 ETH = 10^18 Wei.
  • Gwei: Used commonly for gas pricing. 1 Gwei = 10^9 Wei.

  Usage in Smart Contracts:

  • Ether can be transferred between accounts or smart contracts, and is necessary for running computations.

  Example:

  function depositEther() public payable {
      require(msg.value > 0, "Must send Ether");
      // Logic to handle Ether
  }
  

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Slide 9: Gas and Gas Fees

• Gas:

  • The computational cost of executing operations on the Ethereum network.
  • Gas Fee Calculation: Gas fees are calculated based on the gas limit and gas price set by the user. The total cost is Gas Limit * Gas Price.

  Key Concepts:

  • Gas Limit: Maximum amount of gas a user is willing to spend for a transaction.
  • Base Fee and Priority Fee: After EIP-1559, Ethereum introduced a base fee (burned) and priority fee (tips to validators) to improve transaction pricing efficiency.

  Example of Gas Use:

  • Sending Ether: 21,000 gas.
  • Complex Smart Contract Interaction: Can consume hundreds of thousands of gas units depending on the computation.

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Slide 10: Ethereum Virtual Machine (EVM)

• EVM:

  • The Ethereum Virtual Machine is the decentralized computation engine that executes smart contracts. Every Ethereum node runs the EVM, ensuring consensus across the network.

  Features:

  • Turing Complete: Capable of executing any computational logic, making Ethereum highly programmable.
  • Bytecode Execution: Solidity code is compiled into EVM bytecode and then executed by nodes.
  • Deterministic: The same input will always produce the same output across all nodes.

  Security:

  • The EVM operates in a sandboxed environment, isolated from the host system, ensuring safe execution of smart contracts.

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Slide 11: EVM Overview

Title: Ethereum Virtual Machine: What is it?

• A Turing-complete virtual machine designed to execute smart contracts on Ethereum.
• Operates on the Ethereum blockchain at a lower level, interpreting and executing bytecode instructions.
• Each Ethereum node runs its own instance of the EVM to maintain consensus.

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Slide 12: EVM Instruction Set (Opcodes)

Title: EVM Instruction Set (Opcodes)

• EVM executes bytecode—a compact set of instructions.
• Instructions are 256-bit (as EVM uses 256-bit words for stack operations).
• Examples of common opcodes:
  • PUSH1, PUSH32: Pushes 1 to 32 bytes onto the stack.
  • ADD, MUL, SUB: Basic arithmetic operations.
  • SLOAD, SSTORE: Interactions with the Ethereum storage.
  • CALL, DELEGATECALL: Used to invoke other contracts or functions.

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Slide 13: Bytecode Compilation

Title: Compiling Smart Contracts into EVM Bytecode

• Solidity → EVM Bytecode
  • Smart contracts written in Solidity (or Vyper) are compiled into EVM bytecode.
  • Compiled contracts are distributed to every Ethereum node and stored on-chain.
• Example:

  function add(uint x, uint y) public pure returns (uint) {
      return x + y;
  }
  

  Compiles to:

  PUSH1 0x60  
  PUSH1 0x40  
  MSTORE  
  PUSH1 0x04  
  CALLDATASIZE  
  LT  
  PUSH1 0x10  
  JUMPI  
  

• Metadata is also embedded in the bytecode (e.g., contract constructor, deployment info).

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Slide 14: EVM Stack

Title: The EVM Stack Model

• EVM uses a stack-based architecture for computation.
  • Word size: 256 bits (to match Ethereum’s cryptography primitives).
  • Stack depth limit: 1024 items.
• All operations (e.g., arithmetic, logic) work with the topmost elements of the stack.
• Example:
  • Opcode ADD pops the two top values, adds them, and pushes the result.

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Slide 15: Memory and Storage

Title: EVM Memory vs Storage

• Memory:
  • Volatile, temporary storage during execution.
  • Unbounded, but gas cost increases as more memory is used.
  • Accessed with MLOAD and MSTORE opcodes.
• Storage:
  • Persistent storage across transactions.
  • State variables in contracts are stored here.
  • Accessed with SLOAD (read) and SSTORE (write) opcodes.
  • SSTORE is one of the most expensive operations in terms of gas.
• Mapping: Stored as a Keccak256 hash of key-value pairs.

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Slide 16: EVM Gas Model

Title: Gas: The Fuel of the EVM

• Every EVM operation consumes gas to prevent abuse (e.g., infinite loops).
• Gas cost for common operations:
  • ADD: 3 gas
  • SLOAD: 2100 gas
  • SSTORE: 20,000 gas (if changing from zero to non-zero)
• Transaction Gas Limit:
  • Defines the maximum gas the sender is willing to pay.
• Refunds:
  • Some operations (e.g., clearing storage slots) provide a gas refund.

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Slide 17: EVM Execution Context

Title: Execution Context: Transactions and Contracts

• Transaction Execution:
  • A transaction triggers the execution of contract code.
  • Transaction data (input data, sender, value) is passed into the EVM as msg.data and processed by CALLDATA.
• Contract Execution:
  • Contracts execute in isolation within their own execution context.
  • CALL and DELEGATECALL are used to execute functions in other contracts.

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Slide 18: EVM Transaction Lifecycle

Title: Transaction Lifecycle in EVM

1. Transaction Creation: Sender signs and broadcasts the transaction.
2. Transaction Validation: The network validates the signature and checks the sender’s balance for gas.
3. Gas Allocation: The gas is allocated and the transaction begins execution.
4. Bytecode Execution: The EVM executes the bytecode, consuming gas for each operation.
5. Result Storage: If successful, storage or state changes are committed.
6. Finalization: Any remaining gas is refunded to the sender.

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Slide 19: EVM Execution Phases

Title: Phases of EVM Execution

1. Frontier Phase:
   • First phase where the EVM was introduced.
   • Focus on executing smart contracts using proof-of-work.
2. Metropolis Phase:
   • Added optimizations like gas refunds, precompiled contracts.
   • Enhancements for developer usability.
3. Serenity (Ethereum 2.0):
   • Proof-of-stake is introduced, but EVM remains the execution layer.
   • Separation between consensus layer and execution layer (EVM).

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Slide 20: EVM Gas-Related Attack Vectors

Title: EVM Attack Vectors: Gas and Reentrancy

• Gas-Related Attacks:
  • Malicious contracts could exhaust the gas limit to cause denial of service.
  • Protection: Carefully managing gas and using mechanisms like gas stipend.
• Reentrancy Attacks:
  • Contracts can call back into themselves before a previous call is completed, causing inconsistent states.
  • Protection: Use checks-effects-interactions pattern and reentrancy guards.

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Slide 21: Future of EVM

Title: The Future of the EVM

• EIP-1559: Gas fee model introduces a more predictable fee mechanism, improving efficiency.
• Ethereum 2.0: EVM remains in Ethereum 2.0, though it may be improved with better state management.
• EVM Evolution:
  • Introduction of EVM-Compatible Chains like Binance Smart Chain, Avalanche, and others.
  • Modular execution models may appear in future iterations to optimize performance.

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Slide 22: EVM Conclusion

Title: Conclusion: EVM - The Backbone of Ethereum Execution

• The EVM allows Ethereum to execute smart contracts in a trustless, decentralized manner.
• Understanding its internals (bytecode, gas, stack, memory) is essential for optimizing smart contract development and avoiding security vulnerabilities.

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Slide 23: Applications of Ethereum

• DeFi (Decentralized Finance):

  • Ethereum is the backbone of DeFi applications, which offer services like lending, borrowing, staking, and decentralized trading (e.g., Uniswap, Aave).

• NFT Marketplaces:

  • Ethereum powers the largest NFT ecosystems, with standards like ERC721 enabling

the creation of unique digital assets (e.g., OpenSea, Foundation).

• DAOs (Decentralized Autonomous Organizations):

  • Organizations governed by smart contracts where decision-making is decentralized (e.g., MakerDAO, Aragon).

• Supply Chain Tracking:

  • Ethereum smart contracts can track and verify goods in real-time, providing transparency in industries like agriculture, manufacturing, and pharmaceuticals (e.g., VeChain).

• Gaming:

  • Ethereum-based games, such as Axie Infinity, allow players to own in-game assets as NFTs, which can be traded or sold in decentralized markets.

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Slide 24: Conclusion

• Ethereum is more than just a cryptocurrency platform; it’s a decentralized world computer enabling new financial systems, applications, and organizations.
• Core Takeaways:
  • Programmability via smart contracts.
  • Ether (ETH) as both currency and utility.
  • The EVM ensures global consensus for computations.

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