Beyond Layer 2, to Layer 3

Transcript

hello hi everyone my name is alvin and i'm an evangelist at the gate essentially digate is a decentralized exchange trading protocol or dex protocol that's focused on building on ethereum layer 2. today i want to talk about something a little bit bigger than that it's about the idea of layer 2 and layer 3 and how layer 3 the concept of layer 3 can help us scale even faster than we're doing right now so i'm going to go jump right in here we go everyone knows that the layer 2 summer was hot this is a screen grab from bangla style uh arbitrary is launching i mean that soon um we we had a great talk from the cto of optimism super love is optimism

and i'm really intrigued by the results oracle and so on and so forth uh and for good reason um ethereum layer 2 is going to really help us to scale and reach a much wider audience than what is currently available which is which is already great but there's a problem so layer 2 is still really expensive let's look at an example in layer 1 currently maybe we have about 1.5 million 1.5 million transactions a day that's about 17 transactions a second whereas in layer 2 maybe we could improve the throughput by a hundred times so we get about one thousand seven hundred transactions a second now

everything seems great uh and with uh the launch of um the merge of ethereum everything seems great but let's let's let's take a step back and look at the assumptions assume that assume with the guests price of 50 gray and if price of 3 400 us dollars so we're looking at a per transaction gas usage of maybe six thousand um so what this means what this translates to is that in theory maybe we get uh we have to pay in in for a transaction on ethereum maybe we have to pay eleven dollars per transaction and theoretically in layer two we might be paying if we use some uh optimistic rollup for example like um arbitrary theoretically we could be playing paying something like 10 cents

but don't forget that with um with the demand with supply cams demand so there will be an increase in demand and so we're looking at right about one dollar per transaction uh say an order or magnitude high and that's a one or one dollar per cent section which is still a lot to pay for one transaction and it and it kind of negates some of the many smaller transactions that we want to do on on ethereum so what's the answer um here's sean parker from the movie the social network obviously he's talking about facebook and in it he says something uh of course justin timberlake playing sean parker says you know what's cool that a million uses a billion users so you know what's cooler to paraphrase

justin you know what's cooler than a million transactions a day a billion transactions today a thousand times a million and we think that um we think that in the in the near term at the very least zero knowledge proves uh key um a one way to really scale up uh in the near term uh to implement a layer three conceptually on top of an optimistic roll-up layer to ors or a major layer to solution what does layer 3 look like here's the gates model just to give you a sense it's just one model basically a layer 3 is we think that zero knowledge proofs can help to scale uh layer two and take care of many of the smaller uh transactions especially for a use case like ours

which is a decentralized exchange trading protocol but it could be used for anything else like uh for enantis gaming you name it we think that it could work too briefly i want to talk a bit about the gate it's a new new project uh it's decentralized in the design we are looking for three things decentralized trustless and permissionless decentralized in the sense that in the final design we're looking to create clients um it's just like a bitcoin client where everyone can use the protocol in a decentralized fashion trust this the key idea here is to do no we cannot do evil so there's no central person that can do evil in this in this design and permission is in the sense that um any project can look to use the gate protocol uh to exchange so so

it's a fairly launched doll centric ethereum layer to a trading protocol um it is what it says on the on the slide and we i'm going to take you through like how we are trying to uh implement the concept of the layer 3 and the early early success of what we're getting from it so in this architecture there's ethereum layer one and there's a roll-up layer too in this case um uh we're working with uh optimistic roll-ups and there's a match node layer three theoretically what this does is there's a maker who wants to buy or sell or sell at a certain price and the ticket wants to take that price and only when there's a match then do we settle the order on layer two

so think about it this way um i have a i have a i have somebody a maker who wants to sell ethereum at three thousand dollars and a ticket wants to buy it and they both sign that they they wanted to take that trade um our zero knowledge proof circuit we run it through the circuit and it confirms that this is true that it is true a statement that there is a match in the nickel pricing ticker price and we batch all these matches these transactions and we settle once on layer two hence we get the security of layer two but we get the increased throughput through zero knowledge in this magic technology of of the match node and if you have many mesh nodes they kind of form a layer three so conceptually we

we're pursuing this design to really um help us to to scale the idea of transactions or in a decentralized exchange okay so i want to go i don't want to go too deep into this but there's the architecture of layer 3 is basically building on zero knowledge to match um buyers and sellers on on layer 3 with a zk roll up so we think that this really complements the the current um upcoming arbitrary uh mainnet and other uh all these layer two optimistic rollup solutions to create like a much faster theoretically a thousand times faster transaction speed than is already uh that might be possible a hundred to a thousand thousand times theoretically

so this is the bit of the architecture behind it i won't go into too much detail but the higher level is zero knowledge magic technology scales later too okay uh why are we doing this well um currently currently um from the user perspective there's a bit of a there's a bit of a um some users love the the decentralized exchange experience um but you know it's not for everyone so with an intense focus on users especially the people who to make and take trades as well as market makers we really want to improve the throughput to reach a much wider audience in this specific use case

so um theoretically with uh with the layer three uh on top of layer two you can get a much faster and cheaper order build trading uh not just amm trading automated marketing trading but all the book trading uh theoretically amy is now designed to instantly place and cancel orders cancel orders for free place orders for free and theoretically we can make it free for market uh for makers to trade um by subsidizing their gas fees so all this is in with the sense of making it cool and fast to trade limit orders in the decks experience and this is the this is the the the design goal we're pursuing [Music] uh so so the the the the evangelists the thinkers and the the court the core

contributors that they get we're all about layer two uh we've been talking a lot about later we have a layer two show on youtube uh that's out there our um evangelist and and talking about layer two and the on youtube and we we you know we're constantly exploring all late all things later to how they can help to really uh bring the benefits of the blockchain to a much wider audience and we're also at the same time researching on the theory of layer 3 using zero knowledge and how they can scale throughput even more in the meantime so it's really exciting times and we think that it's not just about um it's not just about the the

the the dex scenario it could be uh this idea of zero knowledge is going to really revolutionize uh along with optimist roll ups uh the whole landscape for what might be possible in the mainstream for for for um not just traders but um all kinds of applications not just in finance gaming uh digital rights through nfps and so on and so forth really exciting times and um we're really looking to learn from all the other um thinkers and creators and builders in the layer 2 space so uh i have a bit of more time so i want to talk a bit more about the protocol itself why we're doing this uh the the core team is a really strong team um which which is early believers

in ethereum for example one of the founding contributors gulu uh was the original translator of the ethereum white paper uh officially from english chinese co-translator and naming name of the word e tai fung which is uh chinese for ethereum you know team is from fintech and blockchain tencent binance ibm uh you know the ministry of finance in singapore uh is where i spent um a good a chunk of my career and we'll and we're looking to really improve um the experience of the of the of the crypto currency world improve liberty but also improve flourishing and order in the and contribute our small part to the entire

ecosystem and also we want to make um we want to offer our alternative to it so without further ado this is uh you know you can you can reach out to us for more information um at thegaydex uh on youtube eddie that's on twitter.com and contact us really wanna thank the organizers at uh really wanna thank the organizers at icon um for for having us and we look forward to a great day ahead uh have a great time building and all the best so reach out to us uh we're always hiring and looking for great people to join the community as well take care bye