Bitcoin and Beyond EP8: Alpen Labs' Modular Rollup Layer via ZK on Bitcoin

Transcript

[Music] [Music] [Music] what's going on guys welcome back to the rollup for our series of Bitcoin and Beyond today we have a special guest David Cy of Alpin labs to talk about some of the developments that they've been working on and pioneering in the

Bitcoin scaling space Rob we're about uh nine or 10 episodes deep deep into the weeds of technicals and some more higher level conversations um yeah H how you feeling today feeling smarter than I started this series or maybe I don't know actually when I think about it it's like I I do still have a lot more questions than I have answers when when I think about it but we've gotten plenty of answers so far um there's been like a ton of really cool designs uh Innovative designs and then we've also seen a lot of uh similar architectures when it comes to this with with minor tweaks across different projects and so uh David I'm pretty stoked to talk about Alpin um I think

there's some other Bitcoin l2s out there that are doing some things with ZK passing ZK proofs back to the Bitcoin L1 and so I'm pretty stoked to get into the design choices that you've made at Alpin and then your general feelings on the landscape overall of how you're seeing Bitcoin evolve in the in the recent times yeah no I I appreciate you guys having me uh I'm super excited you know Alin we haven't really had much of a public facing presence just because we're kind of focused on a lot of the research and development side um but you know I've been keeping an eye on kind of some of the you guys have been doing and I think it's amazing I think it's great diving into these topics and I think that you guys have uh really done a good job of investigating them yeah

appreciate that and we've heard a lot of like through the rumor mill Alpin has been uh one of the more highly regarded rollup architectures which I want to dive into more of the ZK work that you guys have done and some of the more technical design but I think it'd be super helpful for our community to really have an understanding as to like how we even got here in the first place um being some of the ogs if you in the space on your end I feel like you've seen this kind of evolve and now kind of like blow up after ordinals and now it's like Bitcoin scaling Bitcoin l2s Bitcoin uh modularizing if you will is is happening um and could we say that you predicted this maybe um and so or played a strong role in it so perhaps if you

want to kind of shed some light onto yeah how we got here and um you know how Alin played a role in that uh well I definitely didn't have uh you know a role in kind of predicting or or or bring this to fruition uh you know I was mostly just Dooms scrolling and ship posting on Twitter and I happen to get connected with with a lot of people who are much smarter than than myself and you know maybe that made me somewhat early um but you know the flowers really go out to to a lot of the other people one of the earliest touch points was I mean Eric Wall just like in 2019 when zky posted and said hey we can do this thing called R he's like what if this one day got brought to a Bitcoin everybody ignored it like nobody nothing

related to bitcoin ever come came Intel um I think it was about in like maybe 2022 there were two researchers that independently wrote papers about how you could build rollups on bitcoin one lesser known one is is uh try albanis wrot this article saying hey with covenants here's how we can design some sort of rollup like uh uh mechanism um a little bit after that a researcher named John light uh in collaboration with the starkware foundation and some of the stuff set up by Eric wall and the human rights foundation with Al gladstein wrote like a pretty detailed research paper that said here's how we to create ZK rollups on bitcoin and I think that was the initial piece that nerve sniped a lot of people and then shortly after that the Alpin team um kind of busted on the scene uh which there's four

co-founders all MIT grads and they took a lot of that work and they created a detailed technical white paper actually showing beyond the research like how you could actually develop all of this out and I would say those were the kind of foundational pieces that that everybody else now has in my opinion kind of based a lot of their their work on uh that work though was mostly just theoretical because in all of the research papers from Trey's to John's to to Alpin um you essentially needed two soft Forks um to bring ZK roll up you need covenants more specifically like recursive covenants and then a ZK verifier to receive the zero knowledge proof and verify at them L1 so up until this point it just nerd sniped some people but it wasn't actually possible

then people know the story usually that you know about nine months ago Robin lus busted onto the scene and said hey here's this thing called bit VM where we could um you know essentially compute anything on bitcoin so you perform this computation offchain and then you can arbitrate it onchain and that gives us What's this called this like oneof end trust assumption where as long as you have say a 100 parties and one of them is honest then the computation is valid so you can run that computation to verify a zero knowledge proof and that allows us to circumvent uh some of these prior requirements of having something like recursive covenants and and a native zero knowledge proof verifier and we kind of hack in this um what we'll call not trustless but trust minimized zero knowledge rollup uh structure and

that's what a lot of the teams uh such as ourselves and Alpin and craa and and some of these other teams are pursuing uh it's not a perfectly trustless rollup for that we would need you know some sort of soft Fork um but it it should be kind of good enough I can pause there or I can kind of go into where the state of the BBM stuff is yeah yeah I mean let let's unpack that and then we'll we'll keep going um you mentioned how there was uh these two foundational papers you built on on top of those and took those more theoretical papers and put them into more practical implementational terms and so I'm curious um how essentially how you guys did that but I

also want to Loop in like a couple of the things that we've been seeing as of like just in the Zeitgeist as of recently which was you mentioned one of those foundational research pieces was from starkware in collaboration with Eric wall and and some other people and so they recently announced that they're going to deploy Stark net as uh on top of Bitcoin um and so I'm curious how start starnet and and Alpin are similar and different and then how you both sort of built on top of that foundational research piece put out by starkware but have maybe evolved into different directions could you just kind of like uh yeah like you know kind of

like compare and contrast how you and Stark net are thinking about this in more recent terms and and how you formalized that that theoretical piece sure so the the key link between all of this is is somehow the ability to verify a zero knowledge proof on the Bitcoin based layer and if there's no softw works you have to go through bit VM and then even within bit VM there's tons of different implementations that we can talk about there's like the BBM one the BBM 1.5 2 2.5 like there's just a bunch of stuff going on there that the kind of like the default scenario nothing else uh uh um like no softw works are are needed what um what Ellie Benson and starkware team are are pursuing is if there can be a softwork of opcat for

concatenate that comes in then you could potentially hack in a stark verifier so a stark um you know is a cinct transparent you know argument of knowledge it's a type of zero knowledge proof that starkware specializes in that Ellie Ben San was a a kind of pioneer and and if you had CAD then you could potentially natively have a stark verifier on the L1 and if you have a stark verifier then uh you know it makes it much easier for starkware to create or take their pre-existing rollup structure which is Stark net and then uh Bridge Bitcoin onto that and kind of merge it with some of their ethereum ecosystem over there and so what starkware is doing is is they're putting out a $1 million uh Grant uh which

people will be able to if they can demonstrate research for the positive or even the negative benefits of of of opcat and I think that there is hope that if opcat comes in whether it's a standalone softwork or maybe part of you know Rusty Russell's great script restoration or or another sort of covenants proposal then you can create the Stark verifier you can start verifying uh Stark proofs which allows you to you know bridge in uh allows you to start using Stark net um similarly with on Al side before we get into alpen side just real real quick qu like basic question on on that Stark Side of things could you just eluc serate like the difference of covenants and

concatenation well covenants is a a a broad category uh where you can take a u utxo and you can essentially uh constrain how it could be spent um and that simple primitive um allows you to do a lot of different things and add more expressivity in kind of programmability to bitcoin and so in Bitcoin circles for years now we've been talking about having covenants but there's a huge debate as to which type of Covenant do you want a simple Covenant do you want a generalized Covenant do you want one that's kind of recursive is it dangerous is it's not it's it's kind of a complex scenario I I'd say the vast majority of the Bitcoin Community says hey we want covenants but they haven't yet agreed on which type and which one to activate opcat is a very very simple primitive that allows

you to concatenate two elements on the step which sounds very simple but it has a ton of powerful implications and so a lot of people see opcat as the lowest common denominator in the Covenant discussion they say okay it's very simple and it's kind of clunky and like it's not going to make things very cheap on the L1 it's maybe not the best way to do it but we feel pretty confident that it's reasonably safe and we feel pretty confident that it's it's quite powerful so again it's that kind of like lowest common denominator for the covenants people uh and then for the starkware people they want to use it so that you can verify uh as zero knowledge proof specifically a zkp called a stark awesome okay that that's great and now uh so that sounds perfect let's let's

dive into what Alpin is doing with snarks yeah so um right now uh in order to verify some sort of Zer La proof I I had mentioned that uh without any sort of changes right now you can use bit VM so Robin lus released bit VM which is a virtual machine um and in that uh VM structure the the main downside is that if you go through this what's called challenge response game where is this worst case scenario where the situation is contested and it's like we need you know to to make sure that um the proof is valid it could take up to six months which is like a substantially long time so if somebody's trying to bridge out their funds they could essentially freeze for six months before the situation is resolved it can cause tons tons of issues what Alpin did and I will

say I think craa their Clementine Bridge was like the first one to kind of maybe say hey we can build some sort of zkp verifier within this BBM what our founding pher Liam Egan uh did is he took some of the work that that that uh he's done and we stripped out the virtual machine of bit VM and we made it into a circuit which means that you can't program all this arbitrary different things we only wanted to do one thing and one thing only which is verify a zero knowledge proof so we stripped out the VM which made it more efficient and then he performed some other ZK magic that I probably can't really speak to and we were able to shorten that six-month window down to less than than one month as far as I know that's the best implementation uh or maybe maybe it's not implemented yet

but that's the best kind of uh theoretical uh structure that you can get with like bit BM one so we can call that bit BM 1.5 what um Robin and the zero sync team is working on is what they call bit BM 2 which can drop that down to two weeks which is even better the problem with bit VM 2 is that right now as far as I know it's not practical it's it's it's too large to go on chain it's too costly it they haven't yet fleshed out that details so as far as I know the best thing that you can get is what we created is this like BBM 1.5 which we've called snark NATO and um uh but then if Robin and those guys solv BVM too then you could add some of the tricks that we

did to get to the snark NATO and make it maybe like a bit BM 2.5 which can reduce and make that even more efficient that's probably as good as you can get without any sort of soft Fork the next step is a lot of the starkware stuff that that that we talked about where if we get opcat then it's like do you even need bit VM or can you just verify a stark proof directly if you want to go one step further beyond that the community maybe eventually says hey we really love these zero knowledge proofs let's just natively get you know a way to create a a like a dedicated op code that all it does is uh verify Zer knowledge proofs so you kind of go from this like I'm trying to map this out as like no soft Forks but probably least efficient to

maybe uh hey we need a soft Fork it's still a little bit in efficient to endgame you know op code with a zkp verifier hopefully that makes sense yeah it does and it it seems like that that also goes in from like least amount of social consensus effort all the way to like maximum amount it's like figuring out where the balance is currently or like it's almost like where is the the Bitcoin Community going to be willing to like budge and like what what will what will it take what tech advancements or what like almost guarantees or soft guarantees will it take um to not have the the like a you know catastrophic effect on the network as the worst case or even any sort of like detrimental effect as a whole I'm

curious like in your circles like where are you seeing like the budging happening or like has there been over the last six months more of like this like open-mindedness happening or is the social cons uh consensus still very much so like we should still build bit VM because you know this this this software end goal or end result may not happen because if it does then it almost seems like a lot of the bit VM work would be you know rendered somewhat uh you know not really worth uh the effort or the time to kind of continue on that path yeah I mean I think that's a pretty good assessment you know at Alin lbs like even even before any of this BBM stuff came out it's like our Baseline is like no changes will ever happen to bitcoin

and like we will eventually you know position ourselves in the community to say look you know here's all the research here's all the resources if people want these types of of softworks like we'll code it up we'll build it out we'll offer that Community but we're not necessarily going to push for it like our default is whatever the Bitcoin Community has decided we will work within those confines um but you made an interesting point and this is something that I've been saying on Twitter is that is that the you know the overtime window is shifting a bit and like the the the power is kind of Shifting where I think that the builders are becoming a bit more in power than than they used to it's like in what I'll call the old world uh Bitcoin the default is is like you you really couldn't build anything

or like you could but like very very very clunky and so even if people wanted to build things they they just couldn't and it was kind of the oopers or uh I guess like the uh just like the non-technical you know maximalists were were kind of in charge now even if we don't get any sort of uh softworks people are going to build and they're building like some pretty cool and pretty complex things and you know maybe those things aren't done in the most efficient manner possible maybe they take up lots of block space or they're going to like increase block fees but the bottom line is they're going to be able to get built and so this shifts more of the power to the Builder Community where people say look I don't need to argue here on Twitter anymore I'm I'm not necessarily G to like you

know spend all this time advocating please please please get in my softwork like we're just going to build our solution and and test it in the market because it exists within the current confines of of Bitcoin and I think that's like a very cool and very powerful thing and that may help progress this conversation forward where people say hey a lot of the stuff is already going to get built let's just do it in a in a proper clean Manner and let's let's push forward that conversation on covenants and so I I do think to answer your question that has push forward uh people's interest where they say look like maybe we do want to activate opcat and if we do want to activate opcat you know maybe we want to activate you know other uh Covenant proposals a lot of this is kind of above

my my my pay grid and I don't feel comfortable like specifically advocating for it but I will say that in some of the conversations I've had at conferences and and with people in the note it does feel like that conversation is progressing a lot where the taboo topic comes up is is like activation you know it almost feels like there's a consensus where people say yes like we want covenants or like cat is is good to go even a lot of the the the biggest kind of dissident of of of cat are kind of turning and saying they're okay with it but if if somebody mentions like activation like how do you actually activate it do you go through the miners do you do a speedy trial um like what about a user resisted soft Fork like that's that's a very topic that Nomine people have wanted

toach um because it can get very contentious yeah that's kind of like what what I'm coming to like this is like oh it feels like an uphill battle almost like like why not just go build on ethereum and I'll kind of pose this question like like why do we even need this like like like like what is the ecosystem that we're aiming to to kind of build on top of Bitcoin I I guess outside of just let's build more transaction fees or let's build more Tech to to get more block space demand so the transaction fee model of Bitcoin is stronger long term like like but like why why build this Here and Now versus just going and building on like a smart contract platform that's you know that that has smart contracts oh man I have

so many hot takes on this uh you know I I think what we're seeing in in the ethereum ecosystem is a lot of the research is getting like actually very Advanced and and and kind of like fleshed out there there are still some blanks and and and and some spaces to to kind of fill in but a lot of them are saying hey like we will have the high throughput we will have the high bandwidth like we will have the expressivity like we will solve all of these you know cross composability and interruptibility issues but it's like where are the apps and and there's a little bit of a crisis going on there where people are saying like you know all right like what's the next World computer or or all the stuff that we're going to use for and from my perspective the app has always been money like money

has and always will be like the primary app and for all of you know I think some of coin's uh shortfalls and faults what it has remained steadfast on is this idea of money like the the the bitcoiners to their core have understood that that is the core Revolution like that is this this Unstoppable force that that is is is coming for us and I think that is why despite Bitcoin just being this digital rock it does nothing why it has still maintained itself as the kind of like the black hole that everybody wants to be a part of that has maintained like the highest market cap because there's always been holding out this hope that that even even if if none of this other stuff came to bitcoin that that single use case is good enough but if we can combine it with this world of

like ZK and expressivity and scalability that is the true endgame not only just for for money but this idea of taking like any sort of arbitrary computation any way to express yourself and you can compress that into a simple cryptographic proof and you can post that to the Bitcoin base layer which is this kind of like digital anchor of Truth you could take any sort of expression there there's kind of a beautiful philosophical element there of there is like you you are allowing people to speak any language and express themselves in any way that they can possibly think and then you can anchor that to this like Ledger of of Truth all surrounded by money like that is such a powerful concept and I think what a lot of the ethereum community has done they've really created this kind of modular setup where they say look we're

going to scale the E the expressivity in the computation offchain we're gonna have like the da offchain but like we have to maintain the Bas layer as small as we possibly can you're only going to post zero knowledge proofs there everything else is going to be tracted off chain I I don't even know if they meant to but they really built like the perfect scaling solution for Bitcoin in my opinion yeah if we if we operate on the premise that money is anything valuable it is so then it's so General anything that that we're going to Define as valuable we we can use it as money and put it on a blockchain and then it all becomes composable and interoperable with one another and so all of a sudden we get this this Bitcoin is money and maybe it's the most widely

whether it's the best store value or it's the best cash people can use it for whatever they want to use it for and then we can also combine it with all of the other things that people find valuable and this is the power of of blockchain uh because it's no longer just this siloed environment for operating in a single single vertical of money but it's this expressivity of anything valuable and using anything valuable in this like wide array economy and so that is really really powerful to build to build money because what I'm hearing you say is that it's not just Bitcoin that is a money application money is the application of blockchain and so Bitcoin is one form of money that

lives on a blockchain but there are so many so many more forms of money that can live on blockchains and all coexist with the other forms of money on chain yeah I mean in my opinion I mean Bitcoin both the network will be the anchor to post all these zero proofs on and bit coin the asset will be the the collateral which all these other assets are based on everything will essentially be a a derivative of either the Bitcoin Network um or Bitcoin the asset sure if as a byproduct we get all this other stuff you know stable coins real world assets whatever that that that's cool but for me personally the revolution hasn't always been about about you know Bitcoin yeah that's I Thinkin Maxi sound like ma like I'm a Bitcoin Maxi or I'm I'm I'm I'm hated by

everyone you know because it's like a I go and talk to some of my my ZK and like crypto friends and they're like oh you know Bitcoin Boomer whatever you know Bitcoin digital Rock and I talk to some of my Bitcoin Maxi friends and they're like ah you know like what's this you know ethereum stuff you talk about but but now I feel like this I guess I'll call it like a middle ground like it's it's gaining huge ground swell and and I will say behind the scenes I mentioned this early you know alpin's not really a super public facing company but a lot of the conversations that were having in private I've just I've never been more excited or more optimistic for what's happening I think that we are seeing a reversal of the brain drain not just of like Financial capital and VCS looking

for some new thing to like you know pump but but but true like hardcore intellectual researchers and developers and um like ecosystems that that are saying hey this is really freaking interesting and we potentially see this as an end game I just I don't know I I feel like I'm riding High over the past six months with Alin yeah I don't believe me I mean the whole thing has just been like fully constructed over the last I mean it feels like it's been fully constructed but as you said it's been it's been six months of of like excitement and uh attention but it's been years in the making um and and kind of coming back to that point and to your larger thesis with regards to the the structure of Bitcoin scaling we've heard

quite a bit about like this leap fraud effect where a lot of Bitcoin scaling can basically emulate what ethereum has done but then just kind of skip right to the end game which I think that you kind of have this thesis on with Alp and about and we've talked a lot about it being ZK proofs but like on the road to the endgame what we're seeing on this series that we're doing is all all these Solutions are like they're they're extremely centralized and they're extremely like they're extremely risky from a from a tech perspective compared to uh other rollup designs or the Bitcoin L1 as itself like how do you how do you feel about this ironic uh this ironic character of Bitcoin is this hard

money this it's it's basically unfuck with theable but then like these solutions that are being built to to scale it are like are are are early and but they're still they're almost like the opposite where they're extremely extremely [ __ ] with theable yeah I think that's like if I'm understanding what what you're saying is that uh you know to put it in a basic analogy it's like with Bitcoin we want small boxes like we want small like computer small Hardware everybody can run a node that's what keeps it decentralized but like somewhere along the stack to scale it's like you need a big box you know this fundamentally goes this idea of like why they wanted to raise the the the block size um during the block size Wars and why it was so contentious because it's

kind of like at odds with with decentralization and maybe what you're implying here is with rollups you have maybe a hyper centralized sequencer or you have these provs that need to be run on these big giant computers and it's kind of like whoa like you're preaching this this decentralized small box Vision with Bitcoin yet you know how you're proposing to scale it is with these kind of like big box centralized Solutions and I will say um you know one of the beauty of of a rollup and these ZK Solutions is that you can still maintain some form of like you can inherit the little box philosophy of Bitcoin within your kind of big box so so even if we have a hyper centralized sequencer and we have a very centralized prover if

both of those entities go Rogue or uh they want to deceive you can always circumvent them you can go around them you don't have to go through the big box sequence or you can submit directly to the Bitcoin L1 or you can create the zero knowledge proof yourself so it's kind of like in good and happy times we're willing to use the the the big boxes the centralized sequencers and and and the provs but if they ever go Rogue we know that we always have some sort of Escape valve and even with that in mind I will say that there is some very bleeding edge research where maybe we can decentralize the the the sequencer maybe we can you know have client side proving or real time proving to where you can create the zero knowledge proofs directly from your phone as opposed to sending it to a big you know AWS

warehouse and so some of that admittedly is still TBD it's under active research but there's reasons to believe that that we're progressing towards that vision for us at Alpin even if we we we never get the decentralized sequencer even if we never get these kind of client side proving schemes and this efficient zkp proving like I still think it's good enough like I still think that that even if you have a a single centralized sequencer you know that sequencer can't steal your funds it can't rug you like this allows us to build towards those solutions that I still think is is good enough um with the hope and expectation that that we can have the full Grand Vision of where everything kind of becomes the little box philosophy in in the future hopefully that makes sense

yeah it does I mean I mean I I mean I've drawn a lot of comparisons to like rollups on the ethereum landscape but you know we've been promised fraud proofs for some time and and you know that still hasn't happened so I think like it's just continuously a progressive decentralization a a gradual kind of shift to towards the the end game of of what scaling a base layer is and I think there's still very much up for grabs uh I think it's a good time to kind of dive into that I mean you you guys are are clearly technically sound in this in this scaling um of of ZK proofs of Bitcoin um so maybe we can dive into kind of why you've buil built Alpin the way that it is built now um

and perhaps even start with with the broader structure as a whole and then we can kind of dive into some of the technical details and intricacies um you know and see if we can find any kinks in the armor here why we chose our our uh you know our kind of like implementation or or or details I mean I think that this is like what we're doing is the closest thing you can get to the most trust minimize or or or trust a solution without any sort of softw uh you know just just to make it an easy example you know a lot of chains are just essentially functioning on multisig uh that's obviously not very trustless you know what we want is using the bit VM structure using the best version of bit VM where you can kind of post data onto the the Bitcoin L1 you can create the

zero knowledge proofs you can unilaterally exit like that gives the best and the highest assurances um to bitcoiners um I I will say uh you know maybe something like lightning uh you know arguably has higher uh you know uh better trust which is valid but I think that we've seen limitations with lightning that it really only does payments it probably doesn't scale very well with the number of users so I should say you know we wanted the most trust minimized solution within the context of adding you know an expressivity layer to to to bitcoin which I don't think lightning need to do I think lightning is amazing I hope it does exceedingly well but there's just a ton of use cases that it really cannot go after so you mentioned quite a bit about lightning Network as well um being

kind of a a an option or kind of something that the Bitcoin ecosystem has tried um you know as well as your technical designs and kind of the the philosophy that you guys are uh embracing let's talk a bit more about some of the similarities and differences between Alpin and some of the other of ZK rollups if you will in the Bitcoin scaling space um you know I know that you guys are doing some different things with the way your blocks are confirmed pre-c confirmed informations um as well as some other aspects so maybe you can kind of talk us through some of the technical design choices there and kind of why those are how they are uh sure well so the most obvious you know

technical design trade-off is kind of whether you want to go multisig or closer to this like trust minimize or or or trustless solution um you know we're obviously going to be as close as we can to having everything verified by bit BM or what we call snark NATO which allows you the best sort of trust assumptions uh I think a lot of other uh uh teams or projects just be very skeptical and assume the default you know is everybody's guilty until proven innocent with with working code and by that I mean everybody's probably on a multisig until they provve uh otherwise um but we're definitely kind of building in that direction of more of the trust minimize within the actual rollup itself uh you know one thing that we're doing that may be unique is we'll have uh pre-confirmation so uh essentially when you kind of like

submit some sort of transaction uh in Bitcoin it takes 10 minutes to confirm in ethereum it takes 12 seconds to confirm in rollups you could have what's called pre-confirmation where you can get a transaction receipt sent back to you that says look I am promising you that that this will be submitted into a valid block and that gives you the Comfort to kind of update your UI or progress your your application and so Alpin could do that in you know 250 milliseconds which is uh very very fast and instantaneous the initial version of it will be kind of a a trusted version where you're trusting that we will in fact submit that to the Block in the future you could probably set up some mechanism to where you you have a stake and if you if Alpin says to someone that we will submit into the block and it

doesn't then they would be slashed and kind of reimbursed and compensated for that that's one of the major uh different design choices that we're making uh and then another popular one that people talk about is offchain Da uh so I do expect Bitcoin fees on L1 to go up very very very high and that will impact everything including you know rollups but uh rollups when they post their da offchain it's called a validum or aition that allows us to scale in theory you know infinitely but you're taking on additional trust assumptions you're trusting where that ever that data is posted so we'll have optionality for users to on a per transaction basis uh be able to post on this offchain da so if you say hey this is a a very high value transaction I want this on bitcoin great you're paying a little bit more

for that if you say Hey you know like I'm fine maybe posting my data on ethereum like this is not as high value of a transaction then you could take on that that that da so having uh alternative Das that you can post to uh is is is very very interesting um um I think those are the major design trade-offs I've already spoken at length about you know snark NATO you want to say a few words about the uh applications an ecosystem that you have uh in the works on Alpin um I think this is going to be particularly of Interest as to why someone is going to bridge uh or I guess maybe about the bridge too uh which you mentioned briefly but um also about the applications that are on that uh on the other side of that bridge over on Alpin okay I do want to mention the

bridge because this is really important I'm probably a differentiator we've talked a lot about how bridging from the BTC the asset to the L1 to the L2 it goes over this bridge and people think that that's kind of BBM BBM or our version of BBM which we're calling SAR NATO that is one component that's just the way to verify the zero knowledge proof in this challenge response game on top of that you have the actual Bridge implementation in design so these are two different things that teams can kind of vary on is how they want to implement BBM and then how they want to implement the bridge so we uh I think created snark NATO which allows that like one month which is the best on BBM and then a little bit of an alpha leak here like we'll also be releasing you know a

revised Bridge spec within the next like week or two and one of the complaints about a lot of these Bridges which crae I got from the taper wizard guys is this liquidity issue where where if if uh if somebody requests say 1010 billion from the the uh L2 back out on the L1 the operator or the bridge operator essentially has to front that money they're they can't just take 10 billion dollar out of the bridge and then swap it over they have to pay 10 billion out of pocket first and then get reimbursed and if they don't then they get slashed and the bridge starts to break so it's been this huge critique as to how do you solve this this liquidity issue and I will say that I think that we have a design which which massively mitigates and arguably uh solves that issue um I think I probably don't want

to go into details on that I'm not sure what I'm allowed to share or not probably not a big deal but that uh paper will probably be coming out in the next like couple of weeks or so and I think that will be a good design that a lot of teams will look at and want to implement on the uh on the app side I think we're going to try to keep the ecosystem uh you know relatively curated uh I think that we are prioritizing like Bitcoin is money and financial applications if a lot of the kind of like apes and degeneracy and nfts and ordinal all that stuff comes on like inevitably will that's fine it is what it is but like our priority as a team is saying look we believe in uh Bitcoin as like sound money uh we believe in these

ideas of like uh you know a Bitcoin based Financial ecosystem so things like being able to borrow against your Bitcoin bit back stable coins maybe eventually you want Bitcoin back stable coins that earn significant amounts of yield kind of like an Athena style product um you know within that maybe you want perpetuals you want people to be able to trade uh Bitcoin you could have a perpetuals product where if somebody wanted to trade Tesla stock but they only had Bitcoin as collateral you could use the Bitcoin as collateral or you could use Bitcoin back stable coins as collateral and you can trade you know Tesla or Apple shares like that's potentially a very cool product I also like this idea of something like um hash rate futures or block space futures um I think that was a very compelling product um there are a few other things that I

think we're we we're cooking internally that may be unique but really it's just kind of like adding these vanilla uh defi applications with the highest level of security possible yeah I I'm so I'm so stoked to see Bitcoin defi Leap Frog ethereum Defi and uh and build out a lot of the financial applications that have found product Market fit I think D5 is one of the few things on ethereum that has found product Market fit and now seeing Bitcoin re uh kind of like bring that bring that to life in in a reimagined form I think is is super exciting um and and very curated too because it doesn't make sense right like if you're if you're if

you're trading meme coins and apes stay on ethereum and salana like there's Bitcoin is like going to be the home of money and I think it makes sense to keep those two types of ecosystems separate and then combine them when it makes sense for for that Niche type of user um so I think that makes a lot of sense quick question on the bridge or Andy do you have a if you have a question on the there just no way you're gonna keep the Apes out like the speculation if money's the number one use case speculation is the number two like I mean good luck David yeah no and don't get me wrong like I know the deal I know what moves markets like I know how these people operate it's especially funny when you go out to like Asia and you talk to them

and they're like what are you talking about like they're like we've had Bitcoin l2s for like three years now and yeah yeah that's what I've heard like the the Western World if you will has a especially like in ethereum there's like this big argument about like centralized sequencers and like where's the offchain da being posted and then in like some of these Eastern world uh Bitcoin l2s are like yeah no it's in L2 it's a roll up they truly don't care and like there's not even a hiding of it where they like you know put up this guys they're just like no like we're here to Deen like what else what else is there it's like I don't know change change in the world with money um yeah yeah so so my question on the bridge side which is just a little bit

separate from the degeneracy meme coins that might happen on the other side of the world is like this this bridge is something that we've sort of seen in the ethereum landscape where it's like there's this General message passing layer underneath and then there's like a bridge passing asset transfer layer on top and so this underneath layer call it shark NATO is more of like these messages that we're passing are the ZK proofs right and so we're kind of like generating the proof on the L2 where it's cheap and quick to do so and then we're passing that message back to the L1 to verify a little bit like there is it it doesn't quite have the

same mechanism like if you're familiar with this idea of a pre-signed Bitcoin transaction uh it's essentially you're almost like creating a template and you're like filling in everything and I'm handing it off to you guys and I'm saying look I've filled in all of my parts of this transaction if and when you want to submit this in the future you just add your uh your your signature and you submit to the Bitcoin CH chain it's essentially pre-signed by me it's ready to go all of these Bridge designs um it's a a ton a ton a ton of pre-signed Bitcoin transactions and the reason you do that is you essentially map out you say what is every possible scenario that can happen like who can steal who can come to the rescue if that person steals can this person come to the rescue like if we submit this CK

proof like that's how all these Bridge designs work that's also why they're they're very very clunky so I don't know if there's as much of this like message passing mechanism or anything like that as opposed to us just straight up defining every possible scenario that can happen this is also why something like covenants is so hyper valuable where if you remember what I said you can you can restrict the output of a utxo so if you can restrict it and say hey it can only happen with these one or two use cases then we don't need to make pre-signed transactions for you know a 100,000 or a million different use cases it's like the Covenant says you can only do this type of thing so that's a pulling back a little bit of the technical curtain yeah so so how does the soft fork change the implementation

that you guys have now like we you know we spoke about leap frogging right if you if opcat gets approved would you guys Leap Frog to like a a different design that is more like verifying on the L1 without bit VM uh if covenants get approved would you guys Leap Frog to a different design how do some of those bips change uh your imple implementation yeah okay so right now with like the BBM setup you have to think about it like um like say somebody transfers over 10 Bitcoin that's like one utxo it goes on the stack and you're creating a ton of pre-signed transactions to say if somebody wants to bridge back that exact same 10 BTC utxo they have to go through this whole BBM process with all these

pre-signed transactions if somebody wants to Bridge Over another one Bitcoin same thing you have to presign all these transactions so like in the current bridge design you almost think of it's like stacking like receipts of like utxos and to bridge them in and out you can only bridge out those whole entire utxos and each one of those is bound by a set of like pre-signed transactions and setup so every time somebody bridges over there has to be a massive setup process and be because you have to expect like if somebody wants to withdraw like what are all the different scenario that that can essentially happen um and so it's it's again it's a very kind of clunky it's very inefficient you need snark Nat you need um pre-sign transactions you need the the bridge implementation all this stuff if you had some sort of like zkp

verifier or or or covenants like we talked about you could almost create like what's called like like a a utxo pool where uh you could just have like one utxo address where many people can essentially pull funds in there so instead of it being like you know one Bitcoin 10 Bitcoin da like like a stack it's almost just like 's like a th Bitcoin in here and if you want to move these thousand Bitcoin and you want to send them to somebody else back onto the L1 you need to receive a zero knowledge proof so if we had Covenant in a native zkp verifier whether it's like with cat kind of like what starkware wants to do or this like dedicated op zkp verifier that we've talked about you create this kind of Covenant or this this this coin pool and you you restrict that utxo

again I I'll say that a covenant allows you to restrict how funds are spent and you say you can only spend these transactions if you submit a valid zero knowledge proof for that and so in order to move funds out of the pool you receive a zero knowledge proof so slightly different types of setups there the latter one is obviously much cleaner much cheaper uh much easier to reason about I think but that requires covenants and Covenants require a soft Fork yeah yeah I mean best case scenario we get a softw fork of a zkp verifier and we get like a dedicated covenants I will say the alpen labs team a lot of people don't know this but they actually put forward a ZK rollup proposal where you could do that setup that I just mentioned to you without covenants so I would say the lowest common denominator

is like a pure zkp verifier if you have the zkp verifier everything else becomes possible getting Covenant is just a nice bonus on top of that awesome do you have any um crazy predictions for the Bitcoin scaling space in 2024 2025 I think within the next year I think we'll see an average of ss per V over 500 that's pry bite uh for context I think it's at like 10 right now so maybe like a 50x uh uh growth in in fees and I think that will uh make a lot off and make the miners very very happy well yeah I mean like quick tangent uh you

know we talked to some of these miners like I I haven't but just you know you meet you meet some of the conferences and stuff like yeah we're building rollups or whatever and they're kind of like you know they're they're just so oblivious like to a lot of the stuff that happens in Bitcoin they're they're just ruthless like mercenary capitalists and it's like yeah no like I think like they say well what do you think sasur bite is gonna be and you just see their eyes like light up they're like oh my God you know the the amount of money that I think some of these rollups uh and a lot of these l2s whether they're real or not are going to bring to minors is going to be absolutely insane it is nuts um David we got a bounce thank you for your time really appreciate your

insights here and uh look forward to Alpin and would love to have another conversation soon see if your prediction comes true yeah thanks guys I I appreciate you having me