Crypto's Multichain Masterplan | S7 E8

Transcript

the way that I view what's been happening in crypto thus far is something very akin to a commodity boom so you hear guys from Goldman in the 90s talk about this when Commodities got financialized and you put ETF an ETF wrapper around Commodities they boomed for over a decade and that is basically how I view what's going on with L1 ultimately they're going to Trend sideways and where the value is going to acrw is in this top l which is the application layer that ultimately has control and leverage through the users and we are still a a long ways away from this playing out hey everyone this episode is brought to you

by say the Blazing fast parallelized blockchain which is unlocking Salon likee performance for the vast ocean of e devs out there now you're going to be hearing all about say and their new V2 upgrade but if you take away one thing evm is here to stay there are some problems with it which we're going to get into later in the episode but say and especially there's to upgrade is helping solve that so thank you very much say for making this episode possible hey guys big shout out to Unis swap Unis swap is delivering the best onchain trading experience period Bar None they've got a bunch of cool new features coming out like Unis swap X limit orders real-time Data Insights we're going to be hearing all about those features later in the program but for now un swap thanks for making this episode possible we get right back to it

if you're building anything in web 3 you likely need oracles and verifiable Randomness that's why B curve is partnering up with Supra which offers the fastest oracles and D vrf free for for listeners of vurve for 12 months and you can get that at sub.com blockworks the link there is in the show notes or stick around we're going to be talking about them later in the program all right everyone welcome back to another episode of bell curve before we jump in quick disclaimer the views expressed by my co-host today are their personal views and they do not represent the views of any organization with which the co-hosts are associated with uh nothing in the episode is construed or relied upon as Financial technical tax legal or other advice you know deal now let's jump into the

episode all right everyone welcome to the wrapup episode of this season seven the multi-chain end game of bell curve Hart buddy this was a really fun one I uh I I was almost intimidated going in just the breadth of the subject matter that we were going to cover but I think this has been one of my favorite Seasons yet I mean Mike I'm still honored you asked me to be part of it so like thank you um it's been super fun I didn't think I'd like uh podcasting as much as I do um and yeah the breadth has been shockingly wide uh you know just all the ZK stuff all the pre-confirmation stuff there's like all these sort of Frontier texts in in crypto that we touched on

that I did not expect us to touch on when we went into this so probably means we'll have to do like what this was season 7 so like season 12 will have to be another one of these or something I agree we should make it a we could make it an update because the the whole purpose of this season was just that the tech and narratives move so quickly in crypto and like even if we had been doing this season a year ago the ZK part of this season would have been so much it would have been much less emphasized just because of how uh how much the tech has moved and ended up being a huge influence on the season and frankly my thinking of how the end game is ultimately going to play out so I can only imagine in another 12 or 18 months

things are going to be super different and we're going to look very silly asking the questions and making the predictions that we're going to go ahead and try to make here well like just on the ZK Point um as a developer as somebody building both like the across and the Uma protocols I can tell you very in a very real way we're like going to be using ZK Tech in the near future and like very near future it's it's ready it's production grade all this kind of stuff and that just was not the case even six months ago um yeah that is pretty wild and I think that's the kind of stuff that actually should keep people pretty excited about crypto in general is like these Frontier techs Frontier Tech keeps getting

incorporated into um our ecosystems um which is just kind of cool I agree so uh for listeners this is how we're going to try to divide this episode we are going to try to start with uh synthesizing and answering that kind of big question that we asked this season of what does that multi-chain end game going to look like we're going to do the tldr up front uh start with some of our conclusions and then we're going to just work our way through some of the highlights of the Season we had so many great guests on um and we went back and skimmed a little bit and kind of came up with the highlights and want to rehash some of the interesting points uh that I think we've had a little bit of more CH time to ruminate on and and think about so

maybe Hart just to kick this off I could put you in the hot seat here for a second and just gonna ask ask the question I mean how do you see this multi-chain endgame playing out and maybe we could split that into uh how is the multi-chain endgame look for users right so if there's a user of uh blockchains hopefully there are in 10 years how does it look differently from today and then how have things changed for developers yeah uh let's keep this super concise so users I think Mike you and I will agree in the multi-chain endgame users will be clicking buttons in their wallet they won't even really know it's a wallet maybe um but they'll click they'll click a single button to do an

action that action may occur on some set of blockchains they don't know which one um that action that we could call it a transaction maybe it's an intent but that action gets executed very quickly and very cheaply um and they don't have to fiddle with like wallet settings with switching networks or anything else like that um to me this ends up looking like the way you would click through venmo in on your phone today um venmo being us-centric but you know for the international users the your your kind of payments app you can make a payment with one click um and the underlying

infrastructure is completely abstracted away to me I think I think that's the clearest endgame uh on what it looks like for the user do you agree I agree yeah for developers um I think in my head I have a much clearer view particularly after the season of what it looks like although I will admit that there are probably more paths here so my view is intent Centric so listeners to the season will understand that we spent a lot of time talking about intense but what I will say from a developer perspective even if we ignore that word um a Dap developer will Implement a

standard uh which might be in the form of an SDK or some other kind of we'll call it General programming standard and when they want to do an action on their app they don't even want the so they'll have their own chain they'll go to a roll up as a service provider um deploy their own chain uh a lot of the time um their chain is gonna have incredibly cheap gas fees and be incredibly performant and they'll implement this standard in their dap that means as they'll ask a user to sign a single transaction um or message I should say and that message will look like an

intent it they'll then throw it into some infrastructure which we're going to call this like interop intent system yeah and that infrastructure will just execute it so they won't have to do anything more than Implement a standard and get a user to sign a message related to that standard and then their cross-chain action will just happen no matter where um the users funds are or what chain they're on or whatever else what do you think of that I don't know know if we've actually talked about this before yeah I like that I I actually you know in hearing you describe that and and going back and listening to some of our previous episodes

uh you know not to to criticize but I I don't think actually polygon has nailed their narrative particularly well but when I look at their construction now between the AG layer and their cdk and stuff like that kind of like that feels about right and you can go you can look out into the world of crypto and see like the cosmos SDK sort of looks like that what the Sovereign lab folks are sort of building that and I I agree with you on the and I'm going to defer to you because like I said I'm going to put my hand up and say I'm pretty divorced from the smart contract developer world and I understand their pain points only at a relatively high level but I agree with you there well oh so two more seconds because like uh when I was out the other

week um Mike we announced on the across side this um this standard for Crush in intense we announced it with Unis Swap and it's been given the ERC number ERC 7683 um and this is like I think a very first step like the very early step in developing a standard for um for what developers would Implement uh but again what I want to push the listeners who maybe you know don't write solidity code or whatever um the emphasis here and what like Unis swap shares the vision with us on here in this push is just I think of it like an order ticket um there's like an order ticket that if you

fill out the blanks in this order ticket and get the user to sign it then the infrastructure the quote unquote infrastructure will just execute that order ticket and it'll be executed cheaply and quickly and to me once we have that our multi-chain end game like really accelerates um in terms of how how many chains we don't care about how many chains we have we don't it's just all the ux improvements get way better and what we propose with Unis swap doesn't get us all the way it's like only a first step it um but it sort sort of is like a a stepping stone in that Vision which I get kind of excited about yeah I hey congratulations on that and there's

uh very no one better to do that within Unis swap so massive props props to a a cross for what you guys are doing there I I want to return to the point that you made about what this is going to look like from the user's perspective and I want to try to make some more uh some more predictions because I I think many people would be in the boat that yeah the you of crypto is really rough today and ultimately you know it's not going to be like hey I log into my wallet and then I Bridge five times and sign various transactions and we know that's not going to scale away so ultimately that's going to end up being abstracted away so I want to make some I want to make some more declarative predictions here I think the biggest shift the sort of seismic shift

that I see happening over the next 10 years to maybe qualifier statement a little bit more is there's going to be a shift in leverage from the base L1 layer to the application layer and this has been a design principle I I think everyone just needs to sort of 180% reorient themselves in terms of who has the leverage and the control because I think ultimately Whoever has the most proximity to users has the leverage and the control and that has a lot of implications because we in crypto are very The Narrative has been fat blockchain or the fat protocol thesis right uh settlement Network effects like you've got an all all these very supply side oriented investment Arguments for

crypto and where value is going to acrw but really I think there's going to be a fundal shift over the next 10 years to the app layer the demand side and I think people are going to look back now at this something that feels like it has a lot of wisdom right like you hear this from the Bitcoin Community the eth community even protocols in a sense like we're going to push complexity elsewhere well what you're what what I hear when people describe that is I want to become a commod because the organizations that solve and harness complexity like there is an enormous amount of value to doing that and whoever ends up tackling that thorny complex challenge is probably going to be where users end up living I would split this future into three different layers I think there are going to be

applications that have an enormous amount of Leverage and value and that's where most of the users are then I think there's going to be this middle let's call this an aggregation or like you can just call it aidd Ware sort of layer and that's this that's this right now it feels like this very distinct world of bridges a layers l2s Etc but think about it as the app layer is where origination happens like orderflow origination intent origination happens then there's going to be this complicated layer of many different players underneath that batches and then routes those layers down ultimately to the L1 where basically what the L1 serves as as like a Tim stamp and basically it's like hey

uh I I did this thing and now this middle layer is very concerned with how do I batch and cheap as cheaply as possible route this down to some bottom layer and then I just need Boop okay I want to be on this record that this happened and Mike can I interrupt you on that because it so fits with not only the way we've always thought about a cross as our protocol but also there's um a working group of chain abstraction called like the cake working group um I actually forget what the acronym stands for but the C and the a are chain abstraction right um and in the cake it's like three layers of the cake which is the same as the way we describe across too the top layer is um like user order kind of like intent generation

whatever the user wants to do we can call the application that's the top layer of the cake the middle layer we generally call the solver layer like solver relayer filler it's the routing uh like how we get the user the top layer how we get it filled and the bottom layer I call the settlement layer of like how do you settle this transaction so it it's you can think of it escrow plus proving that the action happened how do you prove that the user action happened before you like repay the solver so I I'm just gonna point out to you that you've been thinking about this separately but like a whole working group of chain abstraction people are spot on with the same way you're you're you're stacking your cake here and

directly how across is thinking about the world to but I interrupted you keep going all right that's that's good to hear that I'm not on an island here and insane we all like to to hear that okay so what that like I want to then break apart what I think that implies and what I think that implies is that the bottom layer is that I think that with a full the fullness of time it's going to prove out that the bottom layer the L1 layer basically are they're Commodities in my view for a long time that's been forming is one just to make concrete predictions I think there are going to be five to seven l1s that ultimately end up having some amount of traction and getting widely adopted I can't remember where

I've heard this quote but there was I remember listening to this FX podcast that really stuck with me that of all the you 180 currencies in the world or whatever or about six that have any real adoption and liquidity it would be poetic to me if that same number ended up happening in crypto with a totally different set of you know technical AR architecture underneath so I think that's what's ultimately going to end up happening and I think the way that the way that I view what's been happening in crypto thus far is something very akin to a commodity boom so you hear guys from Goldman in the 90s talk about this when Commodities got financialized and you put ETF an ETF wrapper around Commodities they boomed for over a decade and that is basically how I view

what's going on with L1 so I think there are going to be five or six of these things they're going to keep running for a period of time but then ultimately they're going to Trend sideways and where the value is going to acrew is in this top layer which is the application layer that ultimately has control and leverage through the users and we are still a a long ways away from this playing out but I do think that you're starting to see evidence of that I would point to actually arguably the most successful applications in crypto which are centralized changes and just look at look at bass look at what bass has been able to do in a relatively short period of time because they have 100 million users 100 million accounts I don't know

how many actually daily active users they have but that that is ultimately I I'll stop there because I'm conscious of going on a monologue here but that is my view of the world and and how I see things playing out going to the Future pretty good monologue Mike thanks thanks the the bit about the commodity boom I I actually want to underscore that because that is a new thought for me uh as it relates to crypto and it's super interesting so just to play back for um for the listeners you know e commodity ETFs got invented sometime in the 90 late 90s I think and through the 2000s and it it

did I I was I was at Goldman and the later part of this did lead to this huge commodity boom where like literally um the amount of money that was made by like the Goldman commodity desk trading the Futures role which is like when the ETF bought or sold the old Futures Contract and bought the next one that was like a huge Money Maker for like a 10-year period just because this flow was so intense right and the thought here though that I think this is pretty insightful I and Kyle brought this up on our episode too like l1's have this weird premium associated with them right now um and in a lot of ways it doesn't make sense it's like block space is

cheap what's the demand or whatever but it does feel like we are in this boom where people are like block space is the commodity that we are just trying to Hoover up because we think it's valuable valuable right and if block space it block space is close to a commodity there are some con that get built in some places that make it make maybe some block space more valuable than others but it's at least like it's still just block space right so I do think the application at the end State when there are web 3 applications that have a billion users and they have some power to dictate where they

actually store their data or where they what block space they use I should say then yeah I agree with you that that application has a lot more power um I got one other thought though around this it's a little bit different and I think you might have interesting comments it's this idea of like reserve currency status so the US dollar right has this Reserve currency status and people it's sort of like people use the US dollar because everybody uses the US dollar and um and there's some switching cost to not using the US dollar and that switching cost in traditional Finance is relatively High um it's just you got to

get people to do like FX transactions on the way in and the way out if you wanted to abstract away use of the US dollar and because the traditional banking system is so broken those FX transactions are actually expensive right um in a lot of the things you talk about about exporting the L1 asset I do think like ethereum and salana in particular are competing to be the reserve currency that the the default thing that people denominate transactions and things in maybe alongside like usdc and usdt maybe but I'm kind of curious what you think about that and if let's say ethereum

does become something of a reserve currency in this crypto ecosystem maybe it does have an unfair advantage and carry a premium relative to other block space okay that that is basically the The Devil's Advocate to what I've been describing here so let me let me start by saying why I view l1's more as commodity like than Equity like and then address that point because I think that has a that has influenced my view of how I see the Paro playing out in terms of L1 adoption because it's not like there's going to be okay there are five it's going to be 20% 20% 20% I think there's going to be much sharper par

than that so the the reason that I think there was there was a chart that actually yurian Timmer at Fidelity presented to me on a podcast three years ago that basically changed my entire view on all of this stuff and it was a really simple chart it was just you look at uh the perform the relative performance of cash interest bearing Cash Gold Commodities equities over time it's like all the everything other than equities kind of trends like this you know gold underperformed basically everything interest bring back cash is pretty good and there was like equity's way up here why why is equities way up there I think the reason is there's this quote from Chuck AER who describes the what you're trying to do with a company

is is not just generate cash flow it's really to compound returns and the reason why we care about cash flows and why Equity can perform so well is because when you generate a cash flow you have this organizing body in the form of a company that can reinvest it and compound your advantage that that is what l1s do not have it's the the benefit of an L1 is that it's extremely decentralized there's no one strategic organization that's doing thing but no one that the pro is also the con and so this is why I've never liked the idea of people talking about the p&l of ethereum the reason we care about a p&l and cash flow from the standpoint of a company is a I can either dividend it out to you or I can reinvest this and compound

whatever Advantage I've built up so when people talk about burning the base fee as Revenue that's just your missing the point you know that that's not getting returned to you and I mean you could make an argument that it sort of is but it's you can never compound it and that's why these things look much more commodity like to me than Equity like over over a long over a long stretch of time the other the other difference I would also say in between equities and commodities this is going to sound a little bit high level and Squishy there's a long-term incentive to make equities go up and a long-term incentive to make Commodities go down so for instance if commodity prices are ripping right inflation might be picking back up now not to bring back to this but what is the government going to do to respond

they're going to move Heaven and Earth to make gasoline prices go down right no one wants gas prices going up during an election people have to fuel their cars there's a long-term incentive if gas gets high enough to push it back down the opposite is true for equities if equities do extremely poorly over a long period of time our policy makers will move Heaven and Earth to make them go back up and that is the the interesting thing about that is that I think that's a little bit reversed in crypto and to your point about to bring it back to what you were describing about the reserve currency the monetary premium Etc if I had to describe The Virtuous cycle that kicks in in these blockchain ecosystems the L1 goes up it creates a wealth effect and that ends up funding development and I actually I've heard

people describe this in terms of ethereum there's a guy I can't actually not to call anyone out I remember who it is but he was describing that when as the price of salana has gone up it made it more expensive for devs and he was arguing this is kind of a bad thing no it's not because whatever the like the the the price of salana going up you whatever additional developer cost is made back tenfold in the amount of new users and apps Etc that have come onto the chain right no one that's just not how it works so also every developer owns some soul like in PA here too like in your company does or something yeah so there's this the the commodity effect of that exists in the real world is sort of reversed in crypto and everyone has

this sort of collective incentive to pump and uh you know acrew around or like uh gather around the L1 so it's sort of the opposite and I do think ultimately that these things hopefully maybe Bitcoin ends up getting used as some sort of money and there just are tremendous Network effects when it comes to l1's like why are l1's realistically doing better today because they have the most liquidity right like anyone that is trading in size like you basically have to buy your your your Universe of investable assets is extremely low so people are buying l1s and I think that that the network effect at the asset level is going to be a massive driving Factor so this implies

two things is that one those Network effects are probably going to stay constant and that would that would align nicely with this these very neat charts of like Bitcoin know ethereum sort of matching the progress of Bitcoin from the previous cycle and then salana matching ethereum Etc because that it's really less about what's going on underneath the hood in the tech it's much more about the liquidity Network effects that are actually driving the price there I think that's what's in the the driver seat and and matching the in control but it also implies that the Strategic imperative of the L1 is to export its asset to as many hands as possible and just said really simply it it's actually kind of self-evident if you believe this thing is a currency how is a currency successful you got a bunch

of people using it right and so I think I think that is maybe we can get into this in that like middle sort of L2 organization layer but that is is really the lens that I've started to look at these l2s or Sovereign rollups or whatever the the objective is from from at least the L1 perspective is to export a version maybe a wrap version of the currency as far and wide as possible so that's what I think I mean again Mike I love it's interesting to frame this in the in the conversation around the multi-chain endgame right because in a sense what you're doing is you're making kind of like long long-term price predictions for L1 assets here kind of yeah and to maybe to say the unpopular

thing my heretical view would be that these things basically have like another five or 10 years and then I think they basically all trade sideways like that this what I want this is what I want to like kind of summarize from what you're saying so and I think it's super fascinating and there's lots of new thoughts here I hadn't haven't thought about but like and I find fascinating is a guy that used to be kind of a macro Bond Trader right but you're saying you're seeing that um blocks space is mostly commodity like there's going to be some exceptions here but it's mostly commodity like one interesting point you made and it's true the the quote unquote policy makers so we'll call it like ethereum deep state right um here uh if transaction fees get too expensive they want to whack it down like you can't

actually have uh ethereum being too expensive because then people will stop using it so you have this perverse incentive to make it cheap to use like make less money which does seem very commodity like the whole idea behind Commodities is like there inputs to something greater and you want to make your input costs as low as possible for your commodity to be far as wide and to be distributed far and wide then your point about okay well if that's true and they are more commodity like then you're like and but we're in this commodity super cycle here yeah you're like all right so this new invention is going to be valuable for some period of time uh

but it can't get too expensive uh and you're saying in order for that commodity to capture value in the long run you want that commodity to be used in as many places as humanly possible this is like exporting your L1 so to make the analogy super direct I want to export my oil to every corner of the globe so that people use oil instead of using natural gas right um and they build their machines around using oil um and that creates some value and then we are further adding in this Reserve currency concept too where my commodity might have some other slight premium if it is just sort of the de facto standard

unit of exchange um and that would let it be a little bit more valuable than the next equivalent or something like that um yeah and then your last point just to be clear is you're saying in this transition so in some five to 10 year transition where the Commodities really become where block space really does become a commodity applications then become the more Equity likee things that have the actual power um or are are increasingly grow power over um which Commodities they choose and use to ex yeah yep yeah pretty good thesis man you know I mean you're probably gonna

get a lot of hate on Twitter for it but it's still a pretty good thesis yeah well that's how you know I was I was describing I was actually talking to our managing editor the other day and he was like we just launched this the newsletter Empire and he was describing he's like damn I haven't gotten any hate mail on it yet and I was like well you just made that sound like a bad thing he's like yeah well if you get hate mail you know you're really living in people's heads that's such an interesting perspective uh okay so let me also just to get a little bit more concrete around this this doesn't sound super fuzzy and I know people like to say the ethereum Deep state but the listen to the there was a really great podcast that got just as as a little bit

of evidence that this is on people's minds this exact line of reasoning that I'm sort of trying to angle at here is there was a great podcast Uncommon Core that John and hassu did with um onar and shoot I'm blanking on the other person's name in the ethereum foundation but they had this there's there's a debate right now around minimum viable issuance and uh targeting a certain percentage of basically capping stake at a certain percentage and what It ultimately comes down to is do we want to uh preference or give preference to canonical eth the asset or the LST and so just just by way of and and by the way these are ancient arguments in Bitcoin as well why did Bitcoin care

so much about keeping the block size low why did they care so much about uh having the requirements for node operators be extremely low is because the the the more dispersed the the validating sort of environment is and the simpler the actual sort of code is then the more money like your thing looks like the challenge with that and this is why we have rollups in this new modular road map is then you basically can't scale beyond what one single laptop on a regular internet connection can do and so in order to make the asset money like you need very low hardw worth and uh hardware and bandwidth requirements on one layer so then you

say well I actually still want people to this network to be more usable so I need to put a whole bunch of stuff on another layer but then you need to move the canonical asset into another onto another plane and that is the that's like the challenge right so I I actually think even though this sounds I almost hate giving these sorts of weird predictions because it sounds so pie in the sky but I think you can actually see it playing out I think you can see it playing out in in real time here so basically I think and then just to your point about the network effects and are we building a reserve currency here look I'm not smart enough to make that prediction in 30 years are we all going to be using Bitcoin and E at the grocery store I just don't know but again just

responding to incentives if I was unilaterally in charge of Bitcoin or ethereum which is obviously impossible what I would be concerned with is trying to move as much of as Bitcoin or some WRA version of eth into people's hands that by the the time the apps start uh wrangling a whole bunch of users and acre value and and leverage over these ecosystems that there was such a strong Network effect around my currency that people just wanted to use the currency and that the apps couldn't do much much about it and so that's that's how I would look at it um okay the only thing I want to add to that point is I actually think the L2 strategy on ethereum is then pretty brilliant because you're having all

these teams build huge amounts of structure around your commodity around ethereum and I think before the show Mike you're talking about how like maybe there's ways you could like check you could actually have l2s um uh do their checkpoints on different blockchains or whatever but regardless I I do think that getting all of these very competent very aggressively competitive teams building around your commodity is brilliant way of exporting your asset into many many people's hands he everyone want to give a big shout out to today's title sponsor say now I want to talk to you guys a little bit about why

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fillers that you're getting the best execution price so finally if you want to go check out all this stuff which I highly recommend that you do click the link at the bottom of the show notes so they know that I sent you cheers guys hey everyone this episode is brought to you by Supra delivering the freshest Oracle price feeds across 50 plus blockchains when it comes to crypto speed and security are both critical and luckily for y'all super has you covered on both of those things be that for liquidation triggers critical price levels whatever it is supra's got your back the other great thing about Supra they love listeners of bell curve so they're going to hook you guys up with 12 months of free Oracle services and verifiable Randomness they call it dvf decentralized verifiable Randomness so 12 months free you just got to go to

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you know start using ZK proofs on a very short time Horizon and ZK is kind of is I went into this season and it was a little bit of a blind spot for me because it you know it's a little bit of moonmy you you described it really well it's not even the tech even the concepts are hard to wrap your brain around you're like how is this even possible um and I don't know if you had many sort of conclusions around the ZK part of this even just it was very helpful for to hear you and Uma describe how unusable it was and expensive it was even a year ago it seems like costs on proving have come down like two orders of magnitude you now have these ZK uh ZK VMS like um oh gosh I'm blanking on it was spl1

right or what risk zero is building and that's going to make things a lot easier so you don't need an entire team of ZK gigabrain to build your circuits out you can actually just Express you know whatever computational preference like you written in rust or C++ or whatever and and that can go through a zkm or zkm and spit something out that's useful but how do you how do you view like what are the big implications maybe from an interop standpoint that that ZK is going to have in the next couple years yes so first off I it's worth repeating that like ZK has two properties that are useful it has the zero knowledge bit yes which is the Privacy bit okay and that's actually the one that's like it's very

complicated to explain or conceptually understand how Mike I could prove to you I know something without telling you what I know that like really makes your head hurt right but put that aside the Privacy bit is actually not what I think a lot of the current excitement around ZK Tech is really leaning into privacy is important but like that's it's its own it's its whole other kind of like industry if you will um the other property of ZK is the succinct property um and that's where Umar Roy's company is literally called succinct labs and they're focusing on the succinctness and it means that I can very quickly prove an incredibly

complicated um computation and this is where in the episode with Chris go I had this like conceptual unlock it's I guess it's stuff I knew but I never really thought about it this way and he's like look ZK is the glue because of the succinct property Z is the glue between different blockchains and in essence there's some Nuance around this but in essence if you think of the entire history of Bitcoin as one giant computation which like it is it's a proof of work going back more than a decade it's a huge ass computation what the succinct property of ZK allows me to

do in concept is prove that entire history of computation in one little proof that I can validate anywhere cheaply and if you think about that you're like whoa mind explosion that's wild so now given that I can can prove the state of of Bitcoin kind of anywhere and there's some Nuance around how you kind of like sync these things and like all that like um but just at a high level that is a mind-blowingly powerful concept of how you can use the succinct property of ZK to glue together different blockchains from an interop perspective completely agree that and I

we were talking a little bit about this before the episode but there's so there's so many times I'm Rel listening to an episode it's like man I wish I had that I have so many follow-up questions now that I wish I had asked at the time but okay so I think again trying to knit I think one angle that at least I just whiffed on because I didn't understand it well enough going into the season but you know I still have maybe from that that season that we did with hu this very me way of looking at the world and you know when I was thinking about ZK proofs within the context of interop I was thinking well how can you maybe do something like you know Dex toex Arbitrage which I know is silly because it's just binance to De Arbitrage anyway but you know maybe

there's this world where we move more volume on chain and you could do you know proof on chain A and B and aggregate it together and then batch it down and you could do this sort of Arbitrage that people have been talking about forever and I just think even if like the latency it feels like even though ZK proofs have gotten much cheaper it seems like the latency would still be a massive challenge there like you would need to get that down to the order of mill seconds which that just doesn't seem like it's going to be possible and maybe with the economics of proofs because there's going to be many layers of aggregating and batching the timing just doesn't work on something like that here's an angle that I just totally missed whiffed on and wish I had poked more on is one how are ZK proofs

or and ZK accounts the adoption of these going to impact l1s and two what is this going to end up doing to this the sort of middle aggregation layer or l2s and I would point I would on the L1 point like two one two interesting things that have happened recently well one thing has happened is Bitcoin l2s like many of them are premised on ZK so that is interesting right as soon as everyone kind of wrapped their heads around this idea of zero knowledge and something was figured out with the bit VM honestly I'm still not an expert on this at all but now you're actually seeing this probably the most impactful thing that's happened in the last 12 months is Bitcoin l2s I would say and then Celestia Mustafa wrote a great post that was sort of

equivalent to the endgame uh we can link it in the show notes about the adoption of Celestia ZK accounts on Celestia so Celestia has many Bitcoin like properties and that it's not there aren't smart contracts that are enabled on the L1 so one of the big challenges there again to this point of exporting tiia currency is you can't trustless Bridge Tia from Celestia up to this ecosystem of sovereign rollups that they're trying to build you can with a ZK account so you could have some proof instead of like a valid signature from a smart contract that that uh lets you bridge through a a rollup you could have like a ZK account that said hey basically some sort of state state different proof so there's a there's a

change to L1 architecture but then the other thing that maybe think about this is what if l2s end up changing so that we talked a little about the polygon AG layer what if L what if right now like a neat way that this could work is that most l2s right now end up being l3s and they just batch there there are uh each one of like the transactions that happen on these l3s there's a proof that's attached then they get aggregated in one layer which is the L2 or the a layer today and then that just gets batched down to ethereum that I think that would make a lot of sense to be honest and then the the implication sorry just to finish to

close this Loop because you were just describing the succinct property is suddenly in that proving environment uh the the bridge the bridge needs from the L1 to the L2 change and so it would be pretty trivial if like let's say optimism is like Hey we're this great brand we're going to change everything under the hood so that there's no more like optimism main chain and like the op stack thing doesn't really make sense you're all l3s now and you submit proofs down to this aggregation layer and then we batch it down to ethereum it would be trivially easy for optimism to in the same way that they could decide to checkpoint it to ethereum they could decide to checkpoint it to bitcoin or salana or whatever so I think it opens up the L2 space a little bit in terms of

that yeah yeah Mike there's like 15 thoughts in there that I think I know sorry dude I always no it's good but I think listening to you I think it's actually most useful to go to compare the Celestia the Tia example to like how um eth is bridge to optimism right now or arbitrum right now so and I don't think I'm an expert on this too and I want to actually talk to the Celestia team about this but what I think you're saying is because Celestia and tia are trying to be ZK native here um I can have a quote unquote canonical Bridge from Celestia to any Sovereign rollup based on ZK Tech

so my I lock my Tia on Celestia and get a ZK proof that I could then use to bridge to any of these Sovereign rollups where I could use my Tia on that rollup and vice versa I can go the other way um to get a ZK proof and unlock it there and that allows me to um I'll use the word trustless we're trusting that the ZK Tech is is correct but it allows me to trustless bridge between Celestia and these Sovereign rollups using ZK um the time and speed to do that means I have the cost of a ZK proof and the time to generate that ZK proof and that's not zero and it's not even that tiny a

number but it's a lot less than the 7-Day bridge on optimism or arbitrum right now agreed yeah agreed y so compare that to bridging from ethereum to optimism or arbitrum um where uh you you have like a contract on ethereum the bridge contract where you deposits assets too and then ethereum achieves finality and then you can see that on the roll up and then going other way because of the fault proof window you have to wait seven days to unlock it um and that seems very inefficient and I think what you're saying is like okay well if I replace well you you actually had many thoughts in what you walk

through but just replacing that canonical Bridge part with a ZK bridge now means um I have much faster and if the ZK math is correct equally trustless uh bridging between these chains and we just keep it there now I'm going to make a plug for my worldview my intense Centric world view here too um because I think this is actually really important um in without even plugging across in what I'm building but we're saying the ZK Tech will allow us to connect these blockchains and move canonical assets um relatively quickly and relatively cheaply uh but but unless we

have millisecond super cheap ZK proofs which just seems like it's hard like you said yeah um maybe five years out I don't know but what we can do instead is have going back to your cake the middle layer of solvers actually filling users incredibly quickly and Incredibly cheaply with their own Capital which is how a cross works today and then they can rebalance get paid back quite quickly using like the ZK Tech but they can Aggregate and amortise the cost of the ZK proof over hundreds or thousands of transactions which is exactly what across does today um with optimistic

Tech not ZK Tech and just gets better um with ZK things so to me this all fits in the intense style bridging uh becomes the common ux experience and the ZK Tech becomes the glue that makes it work better and cheaper um will still allowing the user like a near instant experience okay so why don't we hard if I could put you on the spot here basically describing everything maybe trying to knit everything together could we in a very futuristic scenario like five or 10 years into the Future How might transactions flow from let's say

you know some some sort sort of onchain super app right let's say like the we've built some kind of onchain super app and you can do things like borrow lend and swapping and whatever in there and it's originating a whole bunch of order flow and uh uh preferences from users right let's say that the ZK like let's say that the intent layer across is the gigabrain owner of the intent layer right you've won that game uh and let's say there's this sort of ZK proof and aggregation layer underneath and then there's uh and then there's I guess rollups somewhere in there and then there's the L1 can we just walk through a little bit how that transaction like how those transactions would ultimately flow down from app to L1

settlement okay yeah Mike this is fun you know we also probably should do another episode on um EIP 3074 too I know I think I haven't done one on that it just feels like a massive Miss for for not having done but yeah well you know what we can do like I'll push you on us doing a bonus episode after this we're going to do the wrap up and then we can do a bonus episode because EAP 3074 kind of came out of the blue for users this is like it's it's a form of account abstraction but just more like giving eoa superpower it came out of the blue I was like up on my Glacier skiing completely out of selfs service and I came back and

everybody was like uh the ethereum core davs are going to include this in the next hard fork and people were like seemed surpris um but whatever it it's pretty interesting so that's not the answer to your question we're going to go through transaction like Light Flow five years in the future so yeah I'm gonna make the assumption that um uh a user has a home chain where they generally like to keep their assets um it's possible that it's like a bunch of chains that keep assets on and they have a unified view I don't know it's a little bit Irrelevant for this but I'm going to say I have a home chain um I'm going to call it um my block Works chain okay so blockworks is my home chain right how do you know we're launching a

chain such a so blockworks chain I exist that's that's where I want to kind of execute from and then there is uh some other chain I don't even know it's a chain but there's an application we'll just call it Mike's app that happens to have its own chain um because it just does and I I don't even know that as a user and um Mike's chain has implemented a a standard or a set of standards that allows uh it to uh execute intents for users here um and it actually and then I click a button in my wallet that says

Hey I want to spend five bucks uh on Mike's chain I don't know Mike's chain is a fund lottery app or something um and I want to like execute this action over on Mike's my it's it's making predict Mike's chain is making predictions on whether uh uh ethereum is a commodity in 10 years okay so it's a prediction Market um so I sign this action um and then it gets thrown into this ecosystem of solvers that go to compete and fill this action on Mike's chain cheaply and quickly my five bucks is escrowed um on the

blockworks Chain momentarily and it doesn't get released to the solvers until we verify that they in fact did uh fill my action fill my intent on Mike's chain okay um okay so so far what's happened here is the user signed clicked a single button to sign a transaction um and then this solver infrastructure very quickly competed to fill that user and we're talking like sub 200 millisecond fill for that user on mic chain um the users funds have actually been escrowed they haven't yet been released to the solver but the user's happy they got their action

filled it was like a web web two like experience okay and now now um what we would do is using ZK Tech we would prove that uh the solver did in fact fill Bill the action on Mike's chain and release their funds on the blockworks home chain to that solver caveats here um uh we might actually batch and aggregate a bunch of those solver actions so that we don't have to pay the ZK cost on that one transaction the ZK proving cost could be aggregated over that solver doing a thousand different things right that's

what I was that's what I was going to ask like my naive brain is okay so almost in the same way now that a lot of order flow and trafi markets get internalized by Citadel Securities and sort of netted out against each other I could imagine like one perhaps the most well naive sounds a little condescending but like the naive way that you could do this is every single transaction gets some some sort of proof attached to it but you could also just say hey as a mar Market maker A and B you know I'm I'm going to end up netting out you know thousands or tens of thousands of transactions per day and at some sort of checkpoint I just want to look at the state differentials in between you know time a and time B and whatever has changed you know we we said proof that's

attached to that then set that down to that one because my my my my very naive understanding of this sort of middle layer is this is all about economies of scale and minimizing cost down to like because there's going to be an expensive cost of settling down to whether it's ethereum or Bitcoin or whatever yeah I mean M this okay now this is like slight chill mode for exactly how a cross looks of the world but like the concepts here I think um should be used by everyone where um if we're living in a world where there are billions of uh actions happening that are in this multi-chain endgame so billions of actions happening between these chains um every day uh obviously I

want the cost of those billion actions to be light to be as lightweight as possible and if there's things I can do to aggregate um the expensive part of those billion actions um that makes a ton of sense here and it's an optimization problem now around okay so well actually step back I want those billion transactions to be really freaking fast like instantaneously Fast almost so we want to make those billion things as fast and as cheap as possible and then aggregate them in intelligent ways so that the overall costs of the system are the minimum possible thing you talk about like netting here

and remember there's two things going on so this whole cross-chain intent thing um which across has done and we're working with Unis swap on is solvers are filling users with their own Capital they're fronting money to users with their own capital and if um so they need to get their Capital paid back so the first thing we need to batch and the first expensive thing to do is how do we verify that the intent was fulfilled do we do that verification on a per message basis so each single message we verify which is how most kind of bridges work today they send a single message per Bridge transaction and it's

expensive or do we batch together that verification and say after a thousand transactions or whatever we're going to verify all these things and that verification cost is amortised over those thousand transactions that that the latter makes sense and that's like what a cross does and then there's a second part about like rebalancing assets here um where it because I've as a solver they've made loans in different places they might actually have like the best case is they have balancing flow everyone that was bridging from arbitrum to optimism there was an equal number of people bridging from optimism to arbitrum right and then I I've extended

loans on both chains but then when it comes back and I actually verify all those fills they net out and turns out I just don't have to like rebalance any assets between these chains so these are exactly the type of like Financial engineering is Concepts that when people think about um cross chain interop I don't necessarily know they think about financial engineering um but this concept of netting transactions and netting uh netting flow is core to keeping it cheap okay so I'm following you on all that and I think that that leads to

again maybe we can talk a little about the episode that we did with Brian and again my sort of naive understanding much less than both you and Brian do about is you know what I heard on that episode is two you knowly very bright motivated guys that were kind of operating at different layers of the stack and having a bit of a debate around which layer is ultimately going to be more more useful or valuable and one thing that you have asked many times this season heart that I've thought more deeply about is what are ultimately this is all going to be dictated by the demands of the application and users and what if the demands for interoperability is just much lower than we think like even something a because you add all

this technical complexity to something like cross chain borrow lend but all right here's a subtler distinction that I would also poke at you like in the early days of defi summer we used to talk about uh defi Legos right and a and Unis Swap and maker all came up at the same time it's like hey cool how cool is this Unis swap is just this decentralized exchange and a is just borrow lend and maker a stable coin and you know Buy incentivizing growth on a right like we can get adoption of D Etc now we we play we play that forward a couple years and essentially we're just talking about different financial services and maybe the market says oo not all these are actually equal and

actually stable coins are a much more valuable product or feature to have and so then a is in this sort of weird situation where they're like oh well I don't want just the end of the stick here where I'm doing the commoditized borrow lend part of I'm not saying a is but you get my keep the analogy going uh I don't want this like I you know it turns out that I I think I should actually have a stable coin as well and now you you start you're started to see all of these individual defi Legos vertically integrate launch other products and kind of makes me wonder question that whole thesis where okay even if every application is on the same chain right and in operability isn't a challenge like Yay we've got composability there might just be these long-term incentives from a company

standpoint point where you know maybe it's not a technical challenge maybe these things were just never going to be composable just because of incentives what do you think about that idea I I mean Mike I agree so okay everything goes in Cycles um yeah defi money Legos super cool super cool Innovation super cool concept but if you play forward what Black Rock wants on Black Rock chain right and there's incred incedible precedence for this they do not want you to take your black rock assets on Black Rock chain and move them to a different chain to go and use a right they don't want

that they will simply be like oh you want to do a a collateralized borrow against Black Rock assets on Black Rock chain here you go here is our version of a on Black Rock chain right yeah um and they vertically integrate um the traditional Finance concept is like share of wallet right every investment advisor wants the maximum share of wallet of their client and they want to get that as high as possible Vanguard right has a whole protective cuddly ecosystem even though they hate on crypto and so idiotic of them but like Vanguard has made a whole push to own as big a share of wallet as they can right

every Private Bank everybody else they want to have all your money on their platform and not have it leave um and like look there's a counterargument here that people would be like uh okay well we have new technology which allows different ways to operate and which which is true but you got to create uh a really strong incentive for why we would have this sort of not vertical integrated this um in this future world because people are capitalistic and respond to their financial incentives and they're going to make more money if they can make it in if they can make it relevant and easy for you to keep your

assets in one spot that does not mean there's not interop though right but here is here is my example and I think this is part of the conversation I had with Brian and you were kind of referring this as two layers there is some layer of General ized message passing generalized interop right and this is the layer that like layer zero sits at it's like in their name which I actually think lar zero is a pretty good name by the way like sit at the bottom level um and you and I just talked about how this might be ZK is um or heavily ZK incentivized in the future um and at any point there will be

some need for messaging between blockchains but you and I also talked about how if there's billions of thing of cross-chain things going on we might aggregate that down it might make a lot of sense to aggregate that down into relatively few ZK messages that get sent between chains and to me this is kind of obvious um the layer on top of that so where you're doing the billion um cross chain actions really quickly what's happening there and my like core argument that I am more firm on following this season with you is that

bridging um and it might be bridging plus action but bridging is the killer app of interop and the billion things 90% of those billion things that people are doing between blockchains is going to be moving money between blockchains maybe moving money to than do an action so moving money between Black Rock chain and Vanguard chain to go and do a swap on Vanguard chain that might be the thing um but 90% of it is is related to this like moving money concept it's so hard for me to disagree with you on this because a I I agree with you and it feels like the natural the natural

incentive even that a a lay person like like me could follow along with is that there is there is a natural incentive to save money and and it's this sort of combination of of uh you know batching things and um and then trying to pay as little on the settlement cost uh as as you possibly can and so yeah it feels like there is going to be this intent sort of layer across different chains and different layers of the chain Etc um and then there's going to be a general message passing layer and the question is like who ends up sort of recuring more more value and one one it was it was it was a it was a question that we began to ask at the very beginning of the season with Chris goes is what do

standards look like right this is really what I think Goma is doing this obviously is what you and Unis swap just did but we need even in this world of intents and preferences that are handled by these market makers we still need to your point composability and interop are not the same thing in order for there to be interop in between these different sort of trust zones we still do need some common set of shared standards so maybe that's already marching forward with the work that you're doing with Unis swap or maybe a nomat ends up uh you know playing a party in that as well but this idea of Standards has just been around you know actually a fun fact the first event blockworks ever did uh I'm proud of the event I'm not proud of the name it's called cryp talks the very

first event I ever put on and and I knew nothing about the industry do you know what it was interoperability and standards and back this was like seven years ago people were like we need standards and interop and the the the analogy that we gave on this panel was every all wheels on cars in the US are the same size and the reason why that's useful is so that you can go to any auto shop and they just know you know roughly what to do and we just have not solved that for blockchains and maybe ZK plays a part in that maybe this intent layer plays a part in that but even in the intent layer it still feels like we need standards yeah well so I think the real more the more nuanced question is at what like

layer do we put the standard right let's let's use your wheel analogy right okay so actually like the the tires are different sizes and shapes uh the rims are different sizes and shapes but where the standard is is like the Hub right with the like the five bolts the five bolts that's the same standard that every wheel has okay so then you can have different rims and different tires and they all works differently but we've got the The Hub with the five or six I don't know what whatever I think it's five five bolts that's all the same um and it wouldn't have worked if we tried to standardize Rim sizes because cars are different sizes and they

different size rims right uh and if we Tred to standardize Tire tires it wouldn't have worked either because cars are different sizes and different size tires right so we figured out the standard at the right spot that made everybody's lives easier um in my view if we believe that 90% of interop is really some form of moving assets between blockchains and then like doing an action after you mve the asset and again I'll just be like all the evidence all the theory I can think through supports this actually and and sidebar I actually think both chain link ccip and layer zero are also going down this path right chain link ccip

they just they put out again while I was away they put out um transporter which is like their Bridge uh to try to bridge assets because they I I think they realized that at the at the message the generalized message passing layer that's not there's not enough demand there the layers at like the bridging thing um and layer zero put a lot of effort on Stargate because again they kind of ler zero kind of deemphasized Stargate for a little bit and I feel like they've reemphasized it a lot recently because they've realized that the the majority of their messaging volume is actually Stargate bridging volume too yeah um so wait I got distracted here so the question is where

should what layer should this standard live at yep and I think that the generalized message passing layer I think it's not hard for settlement layers settlement systems to implement many different types of message passing layer um and they can implement the one that works best because it's kind of like a low-level Tech it's like you can plug and play different types of settlement Technologies there I think the layer that makes sense is actually much closer to the user so whatever the user signs that should be a standard where the user says here's what I'm

intending to do pun on intents here here here's what I want to do um and I don't give a what happens below the surface on how it gets done that's all I care about and then I I personally think like reasoning through this if the if we if we Define what the user wants to do elegantly enough um the solvers get better because the solvers now there's a common standard for what it means to Sol a user order it's like it looks like this figure out how to route it and then the settlement layers talk to the solvers and they figure out how to uh uh how to settle the the solers

transactions and then the settlement layers use some generalized message passing underneath um and they can figure out which generalized message passing works best too but it's kind of like different levels of specialization along the stack that's my take but I'm biased here that's a super interesting analogy honestly I This Is A New Concept to me so it's I I'm going to avoid the temptation to try to Think Through It live here and just say that's a really nuanced point and yeah you're absolutely right and silly me I was thinking oh yeah all Tire yeah of course not all tires are the same size but you're right the hub cap is the same size so and and ultimately I think it just the reason I think also it's going to be very interesting to see what across and Unis swap do is you guys are dominant

bridging platform dominant exchange I think one of the one of the things that you sort of need here is is again the way that this works in Trad fight you could it's a bad thing or you could just say that it's inevitable is the industry leaders kind of set the standard because otherwise everyone's just jocking for this should be my standard or your standard someone just someone with some leverage just has to say guys this is the way that we do it and that's that's it so I I agree with that I want to say actually like this is the cool thing about our industry too right um so there's this whole uh working group that Frontier research um who does very great research stuff out there too oh my God Stan's been on the podcast yeah and I actually caught up I don't I sometimes I

don't know if I should mention people by name some of their researchers shout out onit sorry onit but onit is also shout out onit yeah onit and ston and their whole team are doing brilliant stuff um it's pretty cool and they put together this like working group because they just realized that chain abstraction is an issue um yeah and so they've called it the the cake framework uh it parallels our thinking it parallels literally your thinking um and like talking with them because we previewed this this standard with them too um they're also very uh practical they're like yeah you got someone's got to make a stab at what this looks like and then you kind of like push it into uh a group and get feedback and improve the

standard with that group's feedback and it's a little bit messy because standards are always me coordinating people is messy um but what's so cool about ethereum is you do have a lot of crypto you do have a lot of like people that just want to work together kind of genuinely um and so oh my God that's been fun yeah it's the it's the there are so many I like I said I never thought that I would find an industry that I want to work the rest of my life in and I've definitely found that in crypto it is unique in so many ways and even though it's it's got its challenges even though it's becoming a commodity Mike even though it's becoming a i parts of the industry are becoming commoditized and I think we've got a long way to go so well zoning in there I

I want to actually talk a little bit about the pre-confirmation episode that we did as well which I thought was a fascinating episode on a relatively technical subject and I thought it was interesting for all right let's say three reasons so one there's a question and again this is a little bit the the Chris Go's views of the world and Chris I'm sorry if I'm putting the incorrect words in your mouth here but his whole thing is that we're unbundling different parts of what a blockchain historically has been and the execution environment and protocol can be very separate from the security model and maybe users would have a preference over the security model I honestly would go one step further and say I don't think most users are going to have a preference or understand what that is and I think ultimately that's going to be for this

sort of middle layer to decide where they're going to batch transactions down to but can I add one Nuance on that I think it's a conversation between the application which might have a preference for the security right so the application developer and like in my case the silver Network so the applications in the silver might they are the ones that are like here's the security we need and then the user is basically trusting the application I I think to have made sensible decisions so Nuance agreed the other thing that I would add again just to show my own intellectual bag from before is it might be it might have something to do with the security properties but it also might have something to do again with how big the quote unquote user base of

ether Bitcoin bagle are right this is this this is the sort of alignment question that like imagine I'm an app developer and I'm deciding okay do I want to use Bitcoin or etherium to settle my transactions down to like okay some percentage of that is going to be maybe I think Bitcoin or ethereum is just super secure I think in a certain point most apvs are going to get divorced from the inner workings of the infra and like have much less of an opinion about that but much more of an opinion of hey there's 500 billion of Bitcoin wealth out there versus 200 hence the reason I think the network asset effects are actually or the asset Network effects are actually very critical but uh the the question does remain um are users going to have a preference about that security model I I would say probably not and the the

reason why that's relevant today and now is in this pre-confirmation era is our user right now users already get pre-confirmation from centralized sequencers that are run by L2 teams and there's going to be a question about whether or not they care about uh pre-confirmation that are issued by L1 proposers and again the two very smart guys that we had uh from Prime Evan chainbound come on here they might disagree with me I would probably push back a little bit and say I don't think most users are going to care about that so maybe that maybe that matters or maybe it doesn't but I think there's I think there's a question there then I also think there's this question about how is the L2 ecosystem in ethereum going to play out today because from the standards question you know we're sort

of asking ourselves okay what's the incentive for everyone to play nice and integrate here so that was a big question mark for me coming out of that episode and then the last thing was let's say pre-confirmation do end up getting adopted and ethereum L1 proposers do end up doing more things does that change the role of the ethereum L1 proposer meaningfully going forward into the future so I apologize I always do three things at once uh it's well I don't know that I've answers or thoughts on all of them I think uh so I think the the way based proposers really Catch Fire I think is if there is efficiencies from batching them at that

level um and I think there are efficiencies that exist where if you have um like this L1 proposer that is propos that is giving you pre-confirmation across all of these different l2s um there might it might be cheaper and more effici efficient for them to do that um and this some of this goes to just like weird technical things like blobs are relatively large and there aren't that many of them in each block and so uh if optimism is using its own blob but they're only using 5% of The Blob size for that block right like it

would make sense to kind of share it with a whole bunch of other l2s and fill that BL blob something like that like so there's I'm not the expert on this but I think that there are reasons why it could become more efficient and that creates a reason why this might happen I do agree with you that from a user perspective from a user trusting the security of a more decentralized sequencer pre-confirmation system versus just trusting like the optimism sequencer I don't think the user cares it's the set truth right agreed agreed with that the I guess the reason why to Devil's Advocate my own point the user might care is this was an interesting takeaway from our episode with Uma is that there are limitations

to the amount of like true synchronous composability that even ZK proofs can afford you really in the current instantiation without you know to your point uh like single slot finality and extremely low latency proofs you need the block proposer to be the same entity right on so that's what in theory pre-ms could get you like users might not care that I'm getting an assurance from an L1 block proposer versus a an L2 that just doesn't really matter that much but at the end of the day it would be really nice if you know anything that I do on polygon or arbitrum or optimism are synchronous with with one another like that would be cool that would be cool but again I think you can so this is where I think the political and

capitalist incentives I think you and I did agree on this yeah I don't think there's any incentive I think there's actually a strong anti- incentive for polygon arbitrum and optimism ecosystems to interrupt right it's leakage from their perspective right it's ch like yeah yeah and it's it's funny in some ways it feels like kind of sad it's like I you think of like uh little kids in the playground you're like why can't you all just get along and like play nice together right but like they're not little kids these are like sophisticated adult kids these are big kids and they're like they have their own Social Circles and they do not

overlap right uh or they don't want them to overlap right something I think that analogy totally broke but um I just don't see them um wanting to interrupt and that's where again I think you go to a different layer which is the solver layer which is where the intense thing kind of solves this and it's the thing that creates the itop but between them um and then there's going to be there there needs to be some degree of interoperability between these ecosystems even if it has to route through the Hub of ethereum right um but if you have this solver and intent layer it can like do quick things between these ecosystems and then route uh batch

and Route the things it needs to through the expensive and slow layer um which might be the only way they're truly connected yes oh also to shill another intellectual bag of mine for a second the one thing that I also think is interesting is and then we can wrap this up because I've got this last question for you that we've been asking throughout the rest of the season the performance of the L1 as well might have has some interesting implications in terms of the L2 ecosystem and INR so for instance like base sequencing is very challenging in ethereum because of how slow it is but salana has 400 millisecond block times and actually a lot of this could be really easily solved by just down to L1 up to other L2 which is is interesting and I've been I've been saying this for a long time

now but I heard one of the Sovereign Labs guys say it on another podcast I'm like yes I'm not on on an island here just speaking this out into the Wilderness so I I do think that that the performance of the L1 is going to be interesting and that is why I do wonder if there's some serious limitation for the Bitcoin l2s because I mean man even like a 12C block time is is sort of or 12C block time is kind of challenging but 10 minutes on average right some are even longer than that is that is rough uh yeah I am firmly of the opinion users need things to happen in sub two seconds and ideally sub 200 milliseconds and like there are ways on all of these

systems there are ways that I think you can get there um but it's just a matter of how hard it is if your base system has 10minute block times of which you need to wait for like three to six blocks for True confirmation so you're waiting for 30 to 60 Minutes like that just has a KnockOn cost and I think it's hard doesn't mean I think it's impossible but yeah I think it's super interesting yeah maybe there's I don't know if you've ever heard this argument that you can't destroy risk you can only transform it this is uh comes from one of the volatility guys but maybe there's some there's some element of that with centralization and complexity as well and I do think base layers like Bitcoin that has all right so here's one of the

things that I feel like I've seen play out in eth a little bit this design philosophy being very non- opinionated at the base layer you push all the complexity up to the this other layer but then surprise surprise it's a super centralized layer and then you start to ask well is like what what are the benefits and trade-offs here and it would be kind of an ultimate irony if Bitcoin was Ultra unopinionated really basic and then you get this ecosystem of l2s and it's so unperformed that you need basically really centralized actors to step in and make it even a little bit remotely usable anyway that would be an interesting irony for me or you do some crazy Frankenstein thing where like Bitcoin L2 are issu pre- confirmations on salana or something like that like they use salana as their in between and then settle to bitcoin there's like

weird Frankenstein stuff that might happen um and again it'd be kind of fun to see yeah heart all right I think we've done a good job here hopefully of uh monologuing through some of the the takeaways for the season I'm going to ask you question that you and I both both asked each other at the start of the season and we asked several guests so this weird world of crypto 10 or 20 years into the future is going to only get more complicated and weird I think we're all going to have to question some assumptions that we've held deer for a while and things are going to change and that's again to being the benefits of working crypto is one of the coolest things about this industry that is still changing and innovating but the question is especially as we start to get more complicated and maybe accept some

compromises is what would a good outcome be for crypto right what what if if we're looking back at this crazy experiment we've been running would make you say that it's been a successful or not successful experiment so I said this on our episode with Kyle um my bease for crypto is we invent better Financial Plumbing like better Global Financial plumbing and I say it's my bease because to me and this is where I think Kyle and I like really agreed and I think you did too Mike but like it is so obvious to me that using blockchains for payments and settlement it makes like all the sense in the world

and again I'm coming from like Goldman Circa 2013 when I left we still had a massive back office to like do a bunch of paperwork to settle trades it's just idiotic right and that cost ultimately just bleeds into the economy it's just like an irrelevant cost of this like back office settlement stuff and a blockchain can do that with technology in a trust trustless way makes total sense so it's abstract but it's also just very obvious to me uh Financial infrastructure should run on blockchains period full stop and so um my bease as a good outcome is we have better Global

Financial infrastructure that has cheaper overhead costs it's just cheaper to use um globally accessible so leveling the playing field and you will have cheaper access to financial products and services uh that again in a uniform way across the globe that makes economies better because less gets wasted on kind of like friction points um in in financial interop the bull case is that we invent a bunch of cool that we haven't yet even figured out on top of this um kind of in the same way that uh you know cell internet plus cell phones led to social

media which was pretty interesting and led to like YouTube and twitch and Tik Tok right um so I don't know what do you think yeah I would Echo a ton of what you just said so I think one thing that I am really personally looking forward to is this like actually the multi coin guys did a podcast back in 2017 where they called it maybe it's 2018 like a new design space like new Industries in the same way that social media was something that was just brand new you can argue about whether it's not social media is good whatever but this to go on a little bit of a tiate about this this is why so many times in crypto I just like much less interested and being like oh this company big company XYZ is going

to do something on chain when social media and YouTube got invented it wasn't the existing broadcasters weren't the ones who crushed it on YouTube it wasn't like the original the celebrities at the time that Facebook was getting rolled out like they were the big people on Facebook or Instagram it was new people Kim Kardashian came up at the same time as Instagram PewDiePie and Mr Beast came up with YouTube there are going to be new Industries and New Opportunities and new people will get a bite at the Apple and that I just I I believe that for crypto and I'd hope that for crypto and that's what would make it a success in my book and new Industries are not perfect warts and all in the same way that social media has warts also I I

think that was a great add-on because I agree um there will be warts so net new stuff and I'm probably in this Camp of that technology moves advances the wheel The Arc of humanity in like a positive direction so I would say that and then techno Optimist I like it Mike techno Optimist exactly and the other thing that I would say is I think there is a big part of crypto which gives you cryptographic assurances basically better assurances and transparency than whatever local jurisdiction you're wented to so right now and I think this is part of the reason why crypto's taken so long to like truly catch on in the US because you have pretty good assurances

yeah you can say the legal system sucks better than every other legal system and if you have your assets in a bank or bny melon or whatever you're Pro those are probably going to get protected the the challenge is though if you're in some other legal jurisdiction and you just don't have those same so equality of assurances and it's by cryptography and not your legal jurisdiction yep it's it's it's enforcing commitments through a blockchain that doesn't care where you are it's on a blockchain versus forcing commitments through a legal infrastructure where you need to have a physical presence to actually access that legal infrastructure and by the way the legal infrastructure is way more

expensive to to enforce too this is something that I this is why I got in crypto in the first place and I totally agree Mike it's like it levels the playing field in a way that feels Democratic and it feels like good yeah so totally totally and the last one that I'll say is I something that has been happening to me recently is I think this whole Bitcoin Renaissance and like the return of innovation and new ideas to bitcoin has like made me remember why I'm a Bitcoin because to be honest I've been a little turned off for the last couple years when it's just like hardos screaming on the internet about you know hard money and if you're coiner then you know

you're doomed and and I started to really view it through the view of like religious zealots and the the return of the return of this and frankly this season and thinking about Network effects around assets versus protocols has reminded me that a huge part of what we're doing here is the money it is the money aspect and I I do think it's that governments have as much leeway and unilateral you know decision-making as they do to to put their thumb on the scale of the money supply and I think a huge part of what this season reminded me is that the money the return to this commodity like money this basket of commodity like monies actually is an end in and of itself I think that would be a net good

for the world if more people moved on to these things and started using them his currency so those would be my three buckets I love it and I fully agree man yeah well Hart this was uh this was an absolute Banger season it's been lovely getting to know you my friend this has been a real treat and we'll do some well maybe we'll get that bonus episode in and at the very least we'll have to bring you on for a whole bunch more stuff in the future and yeah yeah man friendship via podcast it's a it's a fun way to to do it make friends on the internet you know great I love it um I'm with you but Mike honestly it's been a pleasure thank you for having me uh thank you for all our listeners for their thoughts and comments on Twitter and elsewhere um and yeah man let's uh

let's do some more episodes in the future this has been really fun for me let's do a partner all right I me cheers thank you sir hey everyone want to give a final shout out to this episode's title sponsor say now there are a whole bunch of really exciting reason to be building on say V2 outside of just parallelization I want you to head over to say. to looking into building on theu devet again click the link at the bottom of this episode and head over to say. start building something today