Decentralized Sequencing, Fast Finality, and Challenger Networks with AltLayer

Transcript

what's going on guys welcome back to the rollup today we have a presentation from ammer Kumar reakes rollups welcome to Igan lay unlocked an interactive educational Journey Through the Igan lay ecosystem created by technical Founders and builders for the entire crypto Community a special thank you to our partners allir poer authentic skate and lrange for helping to make this happen our goal is to raise the collective knowledge of the Igan Lair ABS ecosystem and unpack the technical designs of the top teams in space welcome to ig lay unlocked what's going on guys welcome back to the rollup today we have a

presentation from amitt Kumar about reakes Roll-Ups um particularly interested in this one I had a look at the slides there's a lot of technical diagrams I know I'm gonna have a lot of questions so excited to dive in welcome on amme it's good to have you back well thank you Andy good to see you again sweet well let's jump in and learn about restake rollups Ben yeah sure so um to give a quick context on why we started working with restate rups right so for those who are probably new to reate rups you might know all C from its Ras Services right so we have helped a lot of companies who wanted to have their own rollup we have you know across for example op stack arbit orbit by the way unfortunately I never got the alll merch so I'm using arbitr merch here no

so anyway so uh yeah the idea is basically that we were helping people who wanted to have their own rollups and uh we were the one kind of running those notes so that developers would focus on building their own code app and would not have to worry about any of the info stuff right we would handle any of that so um one common feedback we're getting from all these clients say hey it's good that you manage the services for us but there's no way for us to get our community involved right you are the one running the vendor so you are the vendor you're running the my rollups I will probably build my DS but that's it there's no way for us to get the broad Community involved in running and managing Europe and how could we do that so this is this was I I would say

the initial motivation behind something that makes the system more decentralized something that makes the broad Community get involved in a rollup right and as the title suggests restake rollup is something that brings reaking to rollups as simple as that so basically bring IG layers reaking mechanism to rollups and offer certain services so um why are we talking about any of this right so first of all I mean this something probably you know we have gone through a number of times already but I think it's still good to give a little bit of context on why we talking about this right because you know um when arbitrum orbit arbitrum and optimism we're running about I think 2021 they were doing about 50k 60k transactions a day so it was very early days of ethereum oh sorry of

optimism arbit from or l2s when we started as a r service but since then things have changed dramatically since the launch of op stack and op stack got launched arbit from orbit got live and then polygon cdk now ZK Sync has its own stack and a bunch of other rollups out our building I mean you probably would know there's now Bas stack coming up um you know through built by Spire Labs as well so now there are different kinds of stacks being built and what has happened through that is now it has become as simple as deploying a bunch of contracts to be able to have your own chain up and running this is very different from let's say Cosmos style chain or poot style chain right we need to find hundreds of validators to run this so one Ro s are much easier to spin up and

with the Advent of let's say op stack and all the stacks with the Advent of Ras providers like ourselves I would say it has become 10x or 100x easier to launch a rollup and because of that what has happened is we are seeing a bunch of rollups being launched right every single day you would see at least one or two rups being built in stealth we ourselves have on board at least 40 clients across testet and Main it across all the stacks and then of course we are the only only one of the grass providers there are know five others providers as well so I think it's quite likely to say that there would be at least 1,000 rollups by end of 2024 and we probably are about 300 or something close that um now what happens when you have so many rollups right you have some

problems first of all uh if you look at some of the established ones like optimism arbm they run with this centralized sequencer model it's kind of fine for several reasons one is because in the end of course there are certain issues with simply sequence around riveness you know in terms of censorship in terms of meev extraction and so on but because these sequences are run by established foundations like you know op Labs or arbitrum Foundation you kind of trust them in some way you can trust them that they will not do anything malicious but that won't apply this this this idea won't apply to rollups that are being launched by arbitrary Anonymous dab developers they could actually take op stack Fork it insert something malicious into it and be able

to kind of Steal funds if if they wanted to right so centralized sequencing kind of works with established rers because you kind of trust them but it doesn't work for a long taale of daps that may emerge through op stack and some of the stacks that may come out y um yes so you have a question Andy no I just I couple things first is on the on the RAS point I think like um many of like the RAS providers are are basically figuring out that Ras doesn't provide any network effects um in the sense that like there's not there's not something there that is like not super commoditized so like moving away from that I think is what we'll see and then um and so I'm particularly excited to learn more about this model and then I I

also just put out a tweet saying I think there's there's also not only are centralized sequencing be are the norm now and that they're somewhat okay with trusted Stacks um there's also kind of a lack of incentive for the larger rollups to actually move away from that which is kind of problematic um but like I don't know that's that's a very kind of hot topic um but yes these are these are some of the issues for sure and I think the other like biggest one here is the composability but I'll kind of let you get to that we actually just had a really fun podcast about app specific sequencing yesterday um which was like quite interesting so yeah I I'll I just want to make those points sure of course

one the very valid point so yeah I mean sequencing is of course a major problem that I know there's all sorts of debate going on but there are other problems as well right for example if everything goes on ethereum you would't have to worry about you know let's say finality time and things like that how do you withdraw from this L2 to L1 and those sort of things start to become more prominent right um so especially in case of optimist rups you have to wait for this withdrawal period even in case of ZK sync or some of the ZK rups just for safety reasons they have been built some sort of a withdrawal period in some cases right so even for example in case of Z casing main net you cannot withdraw instantly there's a withdrawal period it's not necessarily because of the stack or or because of the tech it's

mostly because they feel like the tech is still relatively new and so it's good to P put some some buffer period right and then of course uh because you have now these 100 thousands of rollups you need to be able to figure out some way to kind of interoperate right and you could do that initially on L1 but you can't do that in a synchronous way you know in a straightforward manner through through through rups but of course you know their work being done there and then of course there other problems but but basically these are some of the problems that You' see if you if you were to have thousands of rollups immediately like going today so where does the restake rer fit in right so basically it's a for it's a framework that we've designed which is designed in a modular way and I'll come

back to what I mean by this modularity here but basically it's a rollup that takes a certain stack like op stack and gives them certain kind of avss that helps them with different things so for example you could imagine something like let's say arbitrum right um today arbitrum has fraud proof enabled right but the problem is that the validator set that is allowed to get involved in challenges and things like that it's per now they're building this thing called bold right that allows anyone to become a validator anyone can potentially become a challenger but that would assume that you have a network that would assume that you have some number of nodes that actually observing the network and challenging in if if needed and you could do that for example using something like an ABS right so once you

have a restate rollup you have this roll up but you have this bold like framework that allows you to do challenges for your rup so reaking brings that kind of network for challenges re brings a way to faster finalize your transactions it also gives you better security for example in case of let's say decent sequen of set right so you could have build an AVS that is not necessarily shared it could potentially it's not like espresso where it's shared across all the rollers but it could be your own specific sequen set and that gives you security and decentralization for your roller right and lastly it brings reaking TOS that's also important because to build these networks you need to be able to borrow secur you don't want to launch your own token and build another costos style chain so resing helps you in

boring all that security in a much easier way helps you bootstrap that security quite quickly uh what is what is really important is that we try to minimize as much as possible the changes that have to go to the underlying Road up stack okay because the problem is that if you change too much it diverges from the initial initial let's say stack code base and they'll be very difficult to maintain right that's one of the criteria so for example let's say if you are looking at Super chain or op stack uh super chain May build or super chain actually is building some sort of interupt solution at the moment for all the super chain rollups and if you make too many changes to the underlying stack they' be very difficult to be able to tap into all the benefits that super chain gives you so we try to minimize

that as much as possible yeah go ahead go ahead Andy yeah I was was gonna say um the the way that you described the restake ruup is that there is this basically that the AVS uh aspect of it is is the restake um eth that provides the security and eventually hear the the slash B igen token um but but um that security that you're deriving from is not the same as the security that you would get by building a quote unquote normal rollup and using ethereum for da it's more it's more of like a design of like uh akin to

like a um like a valid or like a side chain is is that right or no so so for example let's say let's consider for example um the um let's say sequencing for example right so um today if arbitrum wanted they could build a local consensus protocol for their sequencer set but instead of just running one sequencer and that one sequencer orders transactions in and out they could basically have let's say five notes let's say and that five would run a local consensus among themselves and be able to say okay this is the final order and that has nothing to do with what you do with ethereum so whatever security property you're getting from ether you're still getting it that's not changing right so so the only thing that you did was you added a new local

consensus on your sequenc set okay and what what we're saying is that you could do that with an ABS for example if you want it got it so it's like it's like sequence of rotation exactly for example yes yes yes so for example have a five let's say five node abs and you could say I don't know after every X blocks uh this sequence will be selected to do this so it could be a round robbing mechanism right or it could be a system as well yeah and then these restake robs would use like I for I da or Celestia or ethereum for da kind of like whatever the whatever they want BL they could use ethereum blob you know nothing changes so today arbitrum itself or optimism itself can build a decent L sequen set while using ethereum blobs as a TA layer

they could do that yes that won't change anything but yeah the rollups that come to us most of them don't want to use e da right I mean right now blobs have changed Dynamics but knowe know prior to blobs no one wanted to use expensive they wanted to use something like Celestia something like know I da I yeah you could use that and then it becomes like you're not like depending on definition of rollup you're not you're not really a rollup rollup but you're like you're rollup that uses let's say I D or some some other some other D solution what I'm saying is that you could still use optimism the way it works today and you could just replace that your centralized sequencer by a decentralized sequencer that you still be a rollup in the way of optimism and arbitrum our rollups today okay nothing

changes understood um okay so basically what what we mean by D Roll Up is basically three different avss and again you can pick and choose which one you want so for example let's say if you don't care about sequence or set um or decentral de sequence you don't have to pick pick that ABS you could pick something else so it's a completely this is what I mean by model they are model in the sense that you can pick and choose which one you want and you can combine them in certain ways uh so the first uh sequence first um AVS is what we call Squad um in short for like a team it's basically an AVS for D sequencing as I mentioned earlier and again you can could potentially have different configuration in which how you want to run this so for example you have

let's say a set of nodes that or operators in the igen layer notation you have some operators that you that you ask them to to bring restake assets and once they have brought in enough collateral enough stake then you allow them to become your your your sequencer you could also because it's an app specific model you could say I don't want this to be completely open I want this to be operating a POA style model where I would Whit list who becomes my sequencer through some sort of a governance mechanism right so you could say look I'm going to do a vote and I have selected let's say I don't know figment blog demon and the likes to become a set of potential set of operators and my committee will vote on which operators are supposed to be my sequence set okay so it doesn't

necessarily have to be fully open because it's an app specific model so you can custom in all sorts of ways so you could say I'm going to select list my own set and then that set will act as my sequenc set and again that different rather than yeah sorry guys sorry so rather than uh in the traditional kind of Ras model where effectively each Ras provider is running the sequencer of these rollups or or is running that Hardware you're giving the the ability for uh these teams to either run their own like single node or is it just they can run they have to run a a set of nodes with with different actors or can they just run their own single note as well yes so there could be there could be two I I would say propose to have at least two notes at the very minimum one

could be run by the RAS vendor okay because they understand the mechanics much better than the underlying project and the second could be run by the underlying project so the understood so I would say this is the base like if you want to decent at least put two things right at least two yes the very minimum otherwise there's no point uh but in this model you could have two rasses compete on the same sequence set as well so for example you could have let's say in a model where you have let's say three nodes and one node is run by let's say all cair the other node is run by let's say Caldera and third node is run by the project itself and then all clay and Calera could compete on sequencing fees auction mechanism right in the sense that you could say look block

number X is ready to be you know to be to be sequenced who's going to bet or who's going to auction it like who right yeah and the entity that's willing to to to put the best bit gets taken right and he's he has the it has the right to to to sequence for that block so it could be in that model as well so we are giving that flexibility in how you want to manage this of course the different Frameworks need to be built for example round ring mechanism sort of consensus mechanism soort of a stake based mechanism or completely permission thing or an auction based mechanism but there are wide there are wide ways in which you could implement this so this is this is at a high level what Squad does the second part is called which we call Vital it's considered as a decent Challenger

Network so as I said in case of arbitrum or hopefully you know it will happen with optimism as well where you will have fraud proof mechanism built in and fraud proof Works only if you have someone observing the network I mean the security model assumes that there's at least one Hest party that is actually looking at the network on a regular basis and be able to flag anything that looks malicious right but of course you can't have just one node right because it's not going to work because because if you have only one node observing it and if that no goes down basically things kind of have to be escalated at the social lay which is not good so what do you want is at least some number of nodes it doesn't have to be Millions it doesn't have to be 10,000 but at least some number of

nodes um that gives you enough rency to to operate and for example in case of arbitrum if I recall correctly there are like 10 if I'm not wrong 10 or 15 something around that uh two digit numbers maximum number of nodes that are currently validating arbitrum uh you know main net yep so the the role of this uh Network would be again that you come in as an operator and you'll have to stake your coll you know your restake ke and then you would observe the network and how how the blocks are produced and if any block looks you know bad or malicious to you you would report that you say look this is this is wrong and he's a proof that this block has been done as the operator that's the operator's responsibility yes yes so you have the sequencer sequencer comes in

with a block there's an Executor that executes the block and tells you here's the last the final State and then these are the operators that are Challengers they will challenge that Block they'll say look look this block doesn't look good okay okay so at high level this is what vital does so it is a network of DED network of challenges and again if you lose the the bisection game then you would lose your you know you lose your stake the same with arbit marbits bsection protocol Works Y and the third one is what we call Mark it's uh it's a fast final l so for example if today if you want to rely on ethereum's finality you have to wait for the rollup sequencer or the executor to post blocks or the transaction data on ethereum right and because theum does not have

instant finality or single slot finality you have to wait for 12 to 13 minutes for that block to be finalized and that's not ideal and so what people end up doing is they rely on sequences to give you instant confirmation but again sequenc have no economic backing so Seer could say something to you and they could lie and they decide not to posst this transaction at all and so the markk is to give you slightly stronger guarantee around around sequences as you can imagine all of this still makes your rollup still your rollup Still Remains a rollup nothing changes these are additional services that you could have to make your rollups better secure and decentralized okay okay um so at a high level this is how it works uh in a setup model so you have let's say users um who hold e or

any of the lsts they will take their eth and lsts they will delegate that to a certain operator and that operator will pick um you know which of these AVS will they support for a certain rollup and for example let's say figment comes in and figment says you know what I want to support be a decentralized sequencer operator for I don't know let's say some some some rollup and you could have they could be assigned to that roller and again because of that you know they will be rewarded through the rollup provider it could be in terms of their own native token it it could be in terms of native eeld that comes from let's say sequencing revenue for example today arbitr if they wanted they they could again if they wanted they could decentralize the sequence set and they could say look whatever sequencing

Revenue we make let's say x% of that would go to um these U you operators that are running my dcent sequencer Network and then y% would go to the Dow you know so they could divide in certain ways I I think the the the main thing here is that um the rollup token part where right now like um the tokenomics of rollups are kind of uh weak in the sense that there's not really a lot to do with them um they're kind of used for governance but that's also like kind of uh the most basic use case because of like regulatory reasons or because of just lack of uh a decision- making within a dow um like what why is a rollup token a key part of this model

and like does that just provide more Economic Security or does that provide these the these operators with like something to uh like some basically some better tokenomics so like what what's the thought process here look I mean reaking is great but I think at some point people would have all these worlds will have a token let's be honest it's not going to go away so if you're launching a rollup there will have to be a token at some point in the future uh up until recently the only thing that you could do with your token was put it it as a gas token that's all or governance token right so for example arbitrum and optimism have used op token or the AR token as a governance token yeah um they haven't used for gas for many reasons right one is for example it creates all

s of user experience issues right so for example if you want to come and use arbitrum you have to go and change e and blah blah blah right it is too painful um and the thing is like for arbitrum OPM it kind of even makes sense they might even do it right and it it might even work but the problem is it may not work with app specific rollups because you would have these 10,000s you know Islands little Islands working and imagine if as a normal user you have to go and check and go and buy that Rel token to be able to transact on that specific change is going to be painful super painful the other thing is that unless you generate huge Revenue in your token in the end you are paying ethereum fees right because you have to post data on ethereum so you have to at

some point you have to convert your token to Ether and then be able to pay that um to etherum validators which also kind of creates some sort of sell pressure on your token essentially right so it's not a good idea but eventually like what I'm saying that initially people all all everyone wanted to have their own token as gas token but I think people realized over time that's not really a good idea for many reasons and so how could the token get used on one way is to pair it off with reaking right so for example you could say look I am I'm willing to bring restake e because it gives me all the benefits of of reaking and if let's say my token let's say goes down for whatever reasons at least I have some security that comes with ethereum right so you give the

balance but in the end you also want your token to be used you also want to reduce know your your you know full Reliance on ethereum that's not ideal either right because you still want to capture value in your own token as well in some point so I say it it gives many benefits one is it gives more utility to your token and it's much better choice compared to using your token as a gas token for your up the second thing is also brings value acral to your to your token so for example if you want if you want sequencing Romy to be distributed to let's say your Staker that could happen through this mechanism got it because I think those tokens are still kind of struggling with like how do we do how do we get utility like what's the like what's the you know

what's the point of having one and obviously there's the token solves the nothing at State problem currently in terms of like there's governance and there's Dow voting there's grants that you can do and there's an ecosystem you can build but yeah I'm super Keen to see more and more like l2s kind of take an Innovative approach to how they want to do their tokenomics so honestly six months ago everyone that so there people were coming to us on the RAS side they were saying hey when would arbitr morbit or when would op stack support gas token like custom gas token yeah yeah demand for it honestly and and therefore we pushed arbitr guys and op guys we gave them feedback that hey you should have this feature as soon as possible because everyone is looking for

it but sadly when actually went live people started to back off uh not saying that the feature was bad it's just they realized over time that that's maybe not a good idea it's not a good idea to use your own dab token as a gas token for your because it just creates also painful experiences but they really way to bring the token use and one one way is this yeah cool okay so um um so this is the Squad part so at high level what happens is user takes in transactions uh sends through their classical RPC providers and this transaction goes to the network uh which is built using reaking and then uh you could have different mechanisms that uh you know could employ to order transactions for

example you could have round robing mechanism where you could say I'm going to select um so every let's say sequencer has the right to sequence the first the T end block example and it kind of rotates in certain way it could be an auction mechanism uh where you know the rights to sequence of block is auctioned off to certain players and people bed there could be consensus mechanism as well if you wanted unfortunately at the moment um as far as I know igl does not have a consult protocol built in among the operates it doesn't come out of the box so if you wanted to do that you have what does that mean so so let's say for example I wanted to basically run a small Cosmos Network let's say Style Network like through through tendered you can't do

that directly with IG so at the moment the way igl works is these avss will sign things but that's it okay they don't run a consensus protocol like BB pbfd so so so so the avss amongst themselves cannot come to like a global a global consensus amongst themselves in a true consensus sense it's not possible they would reach cons in a multi style way if you see what I mean like they they would reach okay here is my thing here's my vote but what if the you know those votes are blocked in somewhere Network level those those sort of things doesn't get considered okay so there are certain issues that you can't build in but like eventually at some point I think I will

build this bft as well so you could actually have a proper consensus among those notes so to have like got it little little Cosmos chain for example yeah um but yeah as I said there are different mechanism you could build your squad and then again the squad basically spits out a block which is ordered and then that goes to ethereum in the same way it goes to it works with other rollups today and again um if let's say for example if you say something like hey I'm going to I'm I'm here to here's my order and if you deviate from that order for example let's say an auction model right you are the one who bed and you are the winner of that bed of the auction but if you decide not to post that block then you'll be slashed

for example right so this is where slashing comes to be your St so so the the sequencers who want to participate in the network in this kind of rotational model have to put up some yes some collateral at stake that's yeah yeah exactly that's the reaking thing right so everyone brings and those are those are operators that are that are doing that or no those are those are just separate entities no so operators are the ones that are running the client the the sequencing client and users who have e they would delegate their eth to these operators understood okay so they would say look I have 100 e I'm going to delegate to to you to this operator

let's say maybe figment and the figment is the one running that sequence of client for that and would those would those would those users uh would those uh you know uh stakers or rakers be able to would they be eligible for the yield that comes from the sequencing rights that they win in these lotteries or in these auctions yes so for example today so that's where the yields going to come from then it's going to come from the sequencing exactly so there are two ways in which you could get healed one is by the way um I recently released this post um I think about a month ago about this they didn't have the payment mechanism built in but I has released it very recently where the idea

is the ABS will or the network will basically push incentives and then whatever incentive goes out 10% of that stays with the operator and the remaining goes to the delegators if this $100 comes out in terms of rewards then $10 will go to the operator and the remaining $90 will get distributed to all the all the delegators that have delegated to that specific operator okay so that's something that they have fixed at the moment so you can't change that metric quite today I think at some point they will make it flexible but at this moment you can actually do that and you you are forced to pay 10% to the operator uh so by the way there are two mechanisms which you could you could reward one is like pure token let's say for example your rollup doesn't actually

generate much revenue like let's say in that case you would pay uh incentives in your token the rollup token and let's say when the future when your when your sequencer uh you know when you roll up kind of SE traction and when it has actually started to produce Revenue at that point you could potentially reduce your um you know reduce your token incentive or token inflation by saying okay only 10% of that will come from inflation the remaining would come from the actual Revenue that my RO up makes you could do that yep okay so um the second part as I said is vital it is a challenger Network so consider something like um unfortunately um so by the way these two

things are not built yet just to be very clear there's something that we're still thinking about it and the reason it's not built yet because there are certain things that we are waiting for the underlying role of Stack to be developed and I'll give you an example of this so for example vital right so um vital is mainly for decentralized challenging so um again from arum Context which is the only one I think that is live with fraud I think probably fuel as well has it but let's say let's start with arbitrum so arbitrum has this fraud proof mechanism been built uh but the problem is the people who can actually do challenges they are permissioned today and that's changing with the new protocol that's called bold uh with bold anyone can become a challenger and then if the um the rollup commits a certain block and

you if this Challenger feels like that rollup is invalid or the block is invalid then you can go in Challenge and if you you would engage in a FR proof game with the with the sequencer with the executor and then you if you win then you'll get your get some money um so the idea is if you wanted to extend that to app specific rollups you need this network right you need a network that comes out of the box when you launch the rollup and that's what VTO is so um again very similar flow so you you user save transactions they send it to the sequencer which Again by the way it could be a centralized sequencer by the all of this is model you don't have to use vital withd Squad you could use purely vital not squat you could be a calized sequencer then you have someone

that executes those transactions and commits a state and then the vital comes in this would say okay look you have posted this block but this block is invalid and here's a proof and you have to engage with me on challenges and you could do this through the entire bold protocol so vital operator will run basically the Bold client that is being built by arit okay and again the incentive comes from the same way where if you if you win the challenge you will earn rewards okay so um again when we come to the idea of uh using this vital mechanism as an ABS which is restake eth um this this is this is sounding like

the security that we're getting is from a all like a committee if you will that's not that's not like the L1 and then we're also getting some L1 security so this is like this is like from a technical perspective it's it's less it' be less secure than a typical rollup that's not getting any security from a committee that's not just the L1 no no no no this this what am I missing yeah so let me explain so in Aram today you have these nodes uh which are Whit listed today okay and these nodes they have nothing to do with L1 or L2 they're just nodes they're just nodes you know they're people or entities running some client that's it okay has nothing to do

with L1 nothing to do with L2 so they just nodes what they do is they take blocks that has been produced by the validators in case of arbitrum they're called validator so the validators take transactions from sequencer and they produce a block and then these U these Challengers uh will take this block and will check whether the block is valid again so far they're all doing this offchain there's nothing onchain here they're just doing offchain yes when they feel like okay this is something wrong there's something wrong here then they will do Challenge on the L1 okay so the whole challenge actually happens again challenge is also bsection protocol also offchain but parts of that goes on chain okay so those those things will happen on chain vital doesn't change any of that what only says that Network that number

of nodes that we're doing these challenges now we have to be we have to make it decentralized so they will now form a network and they will still do the same thing which is they Challenge and then they will you know do the challenge and post things on the L1 nothing changes there only thing that we're doing is they're saying that that Network that previously was permissioned now you can make it public by using the Bold protocol got it okay yeah so it's more about decentralizing the challenging of um the rollup blocks than it is is about inheriting security from the L1 um correct like changing where you're getting the security from exactly

exactly so you're not changing any of that you're just saying Hey I want to have some node of network some network of nodes to do this how do I find those nodes right and how do you make sure that those notes have some collateral otherwise you know if if you you bring random people with no collateral they will just lie things right they don't have to wait to check there has to be some mechanism to bootstrap that Network and reaking is that mechanism okay but you not changing your security protocol you're still relying on L1 for all these uh you know fraud proofs to be settled that still happens on the L1 this is not this is not a chain okay there's just a bunch of notes got it makes sense okay um okay so this is vital so again to caveat this so Squad and vital

still being built simply because as I said bold protocol is not built yet right so we are still waiting for I mean okay built yet but it's it's on test Nets it's not kind of for orbit chain quite yet so we can't use it quite yet but the idea is once that that becomes completely public then we would be able to build B protocol as a part of vital what is what is ready today what's being what's life in production is the third thing that we call Mark which is basically a fast finality layer um now it's slightly weaker than than I would say vital in the sense that in vital the notes actually go and challenge they could actually go and engage with let's say your your you know faulty block right Mark doesn't want to do that Mark is slightly weaker than that They al

they basically check take a block and they run things and if they look okay to you they say look here's everything is good here's my attestation to it that's all they Mark operators don't go and engage in in of course you can extend it if you wanted to but we try to keep the design slightly simpler and model you say okay if you only want fast finality don't worry about challenging then you can just use MK but if you actually want to do challenges then you could use vital okay um again the motivation very simple um you know you r on ethereum today for finality but finality on ethereum takes 12 minutes and that's not ideal and so ends up happening is people end up relying on the sequences and sequences give you these pre-confirmation basically a pinky promise that says hey I have seen your transaction here's how

I'm going to order it but that's it there's no guarantee that I'll will actually abide by it yeah and that's that's a weak promise um and so how do you how do you make it stronger and the idea is you can combine IG lay with this mechanism to make it slightly stronger and the way it works is you have the sequencer again it could be centralized decentral doesn't matter right you you take your sequencer sequencer takes you the block gives you the block you take the block and you also take the state and you give it to this Mark network markor will check whether the blocks look okay they will not do challenges this is the main difference they're not challenging anything they're just checking good to them okay the mark network is happy they will sign your thing they would say look here's my

testation on this block this block looks good to me and then they they can potentially pass that data to a okay so it kind of like it becomes like a middle when Network that sits between the sequencer and ethereum okay the good thing about Mark is because like sequencer doesn't have any stake in the system but Mark network has so if they misbehave if they say look this block is actually invalid or this block never gets committed on ethereum then they will get slashed okay but doesn't the sequencer in your model theoretically is going to have stake in the vital model so so okay they will have stake okay so this is designed in a way that sequencer could both be you know it could be centralized model it could be a squad okay it doesn't have so it's it's done in model way okay so you could decide not to use

Squad at all not to use vital at all you just you want to use Mark understood so for example today you could use Mark network with OP stack op op main net you could use Mark network with arbitr arbitr main it okay and you're not changing the sequence of mechanism you're not changing how the fla proof mechanism works all you're saying is I'm going to take a block from the from the arbitral manate U you know block and I'm going to verify if it looks good to me so that you don't have to wait for eum to already validated okay and because I'm putting Stak into it I know that if I say something bad if my blog gets this blog gets invalid or is considered invalid then my stake will get slashed and so I have some incentive in the game which sequences don't have

okay yeah um so um I can as as uh at the time of this being out it'll be live it'll be trading in the billion somewhere but like the the concern with this is that I I if if if Mac Network can't have can't acrew enough operators willing to commit uh and delegate restate e to it then there's there's a certain threshold that of rollup size if of tvl or of of the amount of transaction volume or or or how much value is being uh sequenced that that there's a threshold that is like a a ceiling to where where the stake um of the Mac Network

becomes uh less than the value being transacted on in the sequencer and the the the the like the alignment of of incentives skews towards the Mac Network could theoretically like um there could be oper operator collusion in accepting of slashing if there's a outcome on on the sequencer side where they have other stake that is POS positively affected if this transaction goes through to ethereum so like is that I mean like I I'm going on a limb here so like fill in some gaps but like how how are you thinking about that it's a very valid

question okay so um so there are kind of theorical things and there are kind of practical things that happens in in in real world right so let's be honest right so in the in theory um you mark Network normally U I think s point this term which is like some sort of a weighted average over a week or something so for example let's say you're building a bridge let's say using ABS mechanics using reaking you the amount of amount of um the amount that you can secure depends on on the kind of the stake that is being there right so for example let's say if you want to secure let's say 100 let's say your Bridge does 100 million of trading 100 million of volume uh by directionally on a weekly basis then at

least you have you should have 100 million of Stak Ethan to at least last at least at the very least because otherwise you know anyone can come in and if let's say if you're L they're willing to sacrifice this because they can actually steal the enti 100 million right now that's that's that's the theorical thing which is true which is true now the thing is it depends on how how easy it is to slash how slash the system is right so in a bridge and we have seen that in the past right Bridges have been hacked many times and therefore therefore slashing risk is quite High um if let's say if you consider Mac as a really A system that is very prone to slashing then of course you have to make sure that you have to have enough

quality enough enough let's say U restate asset to be able to slash them so for example if your daily transaction volume is let's say $10 million a day Market must have at least a collateral of 10 million at the very minimum right so that that's that's I agree with you now in Practical terms um slashing unfortunately is not enabled today on I it will come at some point but it's not enabled today second things we believe that Mark network will probably not have huge slashing risk because all you're doing is basically saying hey sequencer is doing things here's my here's my attestation that's it your sequencer and The Valor are the ones that are actually being the more risky notes in a sense all you're doing here all you're doing

is as op is just taking things and signing it that's it you're not doing any more than that so the slashing R is much lower that's first point the second point is today we have about five marks life and literally we had to limit the total amount of e that could have been St there the first Mark that we has five billion dollars worth of each St restake there yeah which in my opinion will never get used right five so that's that's one of the larger avss then yes that's probably one of the largest I mean probably some of them have probably even large but that's one of the largest avss I think the least the one the AV that we have live today that has the least amount of e that has about 100K eth I think at the very minimum which still quite large so I would say that's

enough but I see your point I I agree with your point but as long as your mark network has enough restake security compared to let's say daily volume or monthly volume or something of that kind you're fine cor you're fine and the the actors would have to be highly sophisticated to pull this off and also be well capitalized so um today for example in operators most of the operators don't bring their own Capital by the way unless you're coin base or things like that you don't bring your own Capital mostly it's get delegated so you and me we like users we have e you know left over we would say look here's my st e to and we delegate to the op operators generally don't bring their own E Yeah and though honestly they're not risking that much maybe that should change but they're not risking that much

as far as I know yeah cool got it well that was my only question there okay so um and by the way if if you have fast finality L you could potentially build interop through that so the way it will work is let's say you have rollup a and you have roll up B Ro up a takes his transactions and state gives it to Mark Mark checks it and verifies it and then informs like Signs it and says look here's my signature on this on this rollup a block and it's it passes it to rollup B okay and rollup B says look this Mark guys have verified it it looks good to me I can now do something with this so for example let's say you wanted to do a lock mint style transaction across these rollups so you would have a lock transaction rollup a

that blocks goes to Mark Mark verifies that this indeed a rollup uh transaction with lock transaction in and then it will inform roller B that look everything looks good to me take my word for it and roller B would then uh would then act upon it so for example it will it will mint something on roller B now if something goes wrong again Mark will will Mark stake will get slashed so you could potentially build some sort of interop layer using leveraging Mark as your verification lay so it's kind of like some of the bridges that exist today where you have these nodes that are that are acting as a p network and they're verifying things for you so it's it's kind of similar to that so yeah um

but so H how how is rollup B going to have so this isn't going to be Atomic interoperability this is not going to be settled in the same States across different rollups but it's just that it's just that if I can get fast confirmations from rollup a that my transactions are valid then I can share that that state route with rollup B and they can ATT testate the validity of that and then basically that interoperability trans like that transaction or or basically the interoperability providers between those two rups um Can facilitate faster um faster interrup in like the in like the

traditional interrupt sense where you need like validators to kind of confirm what he side this doesn't really change anything for intense based interrupt though like if if there's an intense based interrupt with solvers they can go from rollup a to rollup B regardless of the state finality of the finality of the chain because it's the solvers that are taking on the the inventory risk and the cross chain risk not the not the um not not the validators of this interrup protocol but in those in those in those more like transport layeres protocols this can help them is that right yes exactly so for examp let's say all the traditional Bridges the way they existed up until recently they all had to run a full node for exactly on sh yeah only

exactly and that's not very scalable right especially if you have thousands of rollups right you can't go and build and run a full note for every single rollup no no um and so what you want to do is you want to rely on someone some sort of resar network that that gives you that confirmation that hey look you don't have to run full node we are running a full node for you and here's a economic stake behind it so if if our operators were to lie or do something malicious we will be we will be slashed at some point it it helps you solve this requirement that every single Bridge operator today has to run a full load now you don't have to because you have someone else running it for you if with economic State okay that that's that's important and if you want you could have

for example some of the other parties tap into this in ideally for example let's say um you could leverage let's exchanges for example centralized exchanges could leverage let's say mark to say look I have I have this Mark Network and one of those operators is run by let's say binance or coinbase or whatever and we have seen that the rollup blocks look good to us and so we are happy to allow you to withdraw assets from my exchange uh instantly because we are running full not okay y uh previously they had to run the full not themselves now they don't have to they could potentially be an operator in this set or they could basically rely on someone else with that service right so they could personally tap into that so that's kind of the model here got it cool makes sense okay so um very

quickly summarize the technical benefits of Mark for example you get faster finality much quicker um you potentially have the shared guarantee as I said across Bridges exchanges and rpcs they could all leverage that without running a full note themselves you could potentially have this interoperability and potentially it could help you with some sort of me mitigation as well but that's kind of a longer topic um there are ecosystem benefits of this as well now because of this Mark you actually create because you can use your own token as I said earlier you can actually have a token sync for your token an adapt developer who has the token can use that token as a reaking token here it allows you to build a network right because now you're not limited to a Ras vendor which is a very closed system right here is a closed system and R the

one that does everything for you now you can let's get your investors involved you can get your you know operators involved so it becomes a much more Network thing uh and you can actually build a network around your infrastructure that was previously not possible um and then it allows eth vals to get involved for with you as well so if you if you're you know if you're building a Dap and you want I don't know the likes of chorus and all the variaties that are on eum today you can get them involved today and most importantly it's we tried as I said earlier in the beginning we Tred to minimize as much as possible the changes that you have to make to underlying underlying rollup stack so this way you can keep running your rollup the way it is running you just add this bit on the

side that helps you with these things okay so you're not changing so for example if you're getting security from with you still the case your rollup hasn't become a validum it's still roll up nothing has changed there you're just adding an extra bit of piece that helps you with these Services what I'm saying is B cut that off so tomorrow let's say you switch mark off your system doesn't become less secure or if you add Mark it doesn't become system doesn't become more uh you know doesn't change the security in the model in that sense it helps you in add additional security I mean this is a very low level thing but basically a high level idea is that you have this ethereum network that does everything for you so you have all these sorry for the visibility um you have a bunch of contracts that come from

igen L for example the way operators would register uh the way the operator stake will get considered and so on so forth so you have a bunch of contracts handling all of that on chain and then you have this Mark Network where you have this Orit that has to draun a client a client for for example for sequencing a client potentially for Challenger Network like bold or a client for faster finality and then they would basically update things to to uh uh this proxy and the proxy would sign transactions and say look I have seen this block this block looks good to me here's my BLS signature and then there's an aggregator thing which Aggregates different signatures from all the all the operators and that goes to ethereum and if enough signatures have beened then you would consider that block to be valid and and real quick what is a BLS

signature so BLS is basically a signature mechanism that allows for better aggregation so if you have many people signing you don't have to have n signatures you can basically compress them into one signature so it combines so this is super super useful for the AVS is because of their sign based model for verifications exactly I mean honestly many US networks do use BL signatures today yes it's a way to compress signatures from many parties into one single signature awesome um and this is like a mechanism like on the contract side so there's a way where um you The Operators inform ethereum that hey on ethereum contracts that hey here's a block that looks not okay and then you as a as a

user can actually query the contract to get the state so you could say okay tell me if there are any blocks that don't look okay to you and you would pull that data from the contract and lastly we have this um what we have built a Gateway which is like a proxy so as I said you could have many avss one AVS for each rollup so you could have one mark for let's say optimism chain one mark for arbitrum chain one mark for base chain for example and you want like a common Gateway instead of kind of pinging each one of them individually so you have this one common Gateway that we call Mar Gateway and you would say hey can you tell me if optimism blocks uh block number X looks okay to you or are there any alerts that you don't you find find

weird for optimism and then it will kind of redirect to the right abs and do everything for you so it kind of like a proxy and a wrapper around all the abss uh well this is a service manager set it's basically a mechanism to handle all the onchain components for abss so registration thing uh reporting thing slashing thing those sort of things that that get needed for abss and this is a basically a function where you can check for alerts directly through S contract so it will it will you can make a query there is a function call you can make a query and the function will tell you whether um this chain has an in invalid block that the mark considers to be invalid and uh that's it um I hope I'm not

too too late still it's good my last question is um um what do you anticipate the the kind of uh demand for um like I understand so we have the supply side operators are going to be providing into Squad um vital and Mac um and where do you like what kind of demand you anticipate for for these as they go live from rollup operators um and kind of uh what what is the yield situation potentially going to look like so um of course all everyone wants to have this because they know that um there's no slashing risk today at least for because

of I I mechanism I has enable slashing so you know for them it's like free to operate anything as long as their cost gets covered right uh on the on the kind of reward side um and of course many people want to use this because one they give them so as as a r Builder you want to have Mark because it gives you uh I mean other than technical benefits it gives a token your your token is some utility right some a way to create a sync a way to value and so on so it's beneficial for the for the for the builders who are building their own chain on the reward side I think initially most of the mar operators will get reward from token incentives it won't necessarily be rewards in pure Revenue by the roller because only handful of projects today

handful of rups actually make money and base of course arbit optimism but there they're not too many so I think I I suspect that initially uh you know the rewards of the yield would come come from uh the incentives directly by the by the project itself um I mean again depends people say that whatever you're getting ealed in terms of eum if you if if if any incentive that's around 1% or even lower than that that's fine because anyway it's it's there's not so much additional risk that you're taking as long as the underlying ABS is safe so I would say something that tops up ethereum yield by 1% I think that's something that people are expecting yep but it's not going a pure p style incentives by the way

it's not going to be like I don't know 10% 20% 30% apy no happen um one thing to know that because I has this Quorum mechanism built so you could say I'm going to take my rewards I'm going to give let 70% reward to my token stakers and only 30% of rewards to to eum re stakers so they could they could decide how they how they adjust their rewards to these different communities so it's quite possible that and you would be potentially encouraged as a community to push a lot more incentives to your token stakers than to e stakers we stakers very interesting it seems like a lot of things that are happening in the space right now including in igen Lay as well

as outsid or um it seems like a lot of people are trying to lower the yields to eth L1 validators and just like how can we get this this Capital moving elsewhere um so it's going to be really interesting to watch play out over the next couple years um em I really enjoyed this conversation I learned quite a bit and I appreciate you you taking the time as always happy happy to be here thank you very much Andy for bringing me here fantastic all righty speak to you soon see you soon yeah