I tried this way, but it's not working on elementary OS.
Can I do rolling release update or is it impossible on elementary OS?
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elementary OS does not support rolling releases. I also advise you not to try to do so.
Attempts to use a rolling release repositories on elementary OS will result in broken packages since core elementary OS packages rely on Ubuntu's LTS ones. The packages you'll get are even development versions, which can make your system unstable and buggy.
If you are really into rolling releases but want the Pantheon desktop, Arch is the way to go. However, it requires you to read all the necessary documentations and to make sure that you know what you are doing.
To add to Axel's answer:
The packages that elementary is responsible for are updated frequently. Think about the Wingpanel (top panel), Gala (window manager), apps like Files, Videos etc.
One great example was the introduction of the AppCenter in the Loki 0.4.1 release.
Two quotes from Daniel Foré on Reddit:
It wouldn’t be possible to have an app ecosystem and be completely rolling. We need stable APIs. We’re already semi-rolling in that all 3rd party apps published in AppCenter continue to receive updates, all 1st party packages get updates, and the Ubuntu LTS hardware enablement stack is also rolling these days. The only things that don’t continually update are 3rd party apps and libraries inherited from Ubuntu.
As you know, we do currently roll the apps and desktop environment. We're pushing fixes and new features on a regular basis to all parts of the operating system. So from a user perspective, it's more or less rolling already.
As others have said, having a known good stable API is important for developers so that they can build apps for elementary OS. If we rolled the base, that would make it much harder for 3rd party developers to keep up and it implies breaking their apps and that would make users very unhappy when their favorite app suddenly doesn't work anymore because API it depended on has changed.
As far as release upgrades go, this hasn't gone well in the past because we were using Ubuntu's tools for managing and updating software. Now that we've deployed AppCenter, we have more of a basis to try to make this possible, but testing that won't really be possible until later this year when we'll have alphas of the new LTS to attempt upgrades to. We have a sprint planned with System76 at the end of August where we'll be working on installation and onboarding and I would guess that release upgrades is a topic that will come up if we have time.
In the distant future I can imagine that because of the way that sandboxed package formats like Snap and Flatpak make use of a runtime/platform that having a stable API for developers will be easier to provide since you could theoretically have multiple runtimes/platforms installed at the same time. So maybe in 5 years or whatever we could be much more aggressively rolling more parts of the operating system without making it hard for developers to write apps for elementary OS.
As a side note, another way to make moving from one release to another less painful is with deeper cloud service integration. Moving to a new computer or setting up an additional computer is a task that should also be simple. When I get a new phone, it's easy to restore all of my data and settings because of services like iCloud. So that's definitely a goal in the future is to eliminate the back up step and make sure that all the things are already backed up always and easy to restore with a single sign on.