d/acc the Swiss Way: Building Permanent Innovation Villages for Ethereum

Transcript

Next, please welcome our next presenter, Miss Ira Moon. Please come up to the stage. Hey, everybody. Yeah, thank you for making it out in the morning. Uh it's great to be here and I'm here to talk to you today about DIAK the Swiss way and how we're building permanent innovation villages for Ethereum and for defensive acceleration.

So why do we need this and why is defensive acceleration important? Um, Vitalik shared an article, an essay about a year and a half ago now, I think, talking about my techno optimism and his ideas for the importance of accelerating technology. um and being optimistic about technology while balancing that with the dangers of technology and how to be defensive against some of those dangers especially now in this particular decade that we're in which may be the pivotable the pivotal decade for humanity um with the acceleration of AI and um the potential for that to lead to very bad scenarios for humanity if not managed correctly. Um, and so he asks the question in this

article, do we do we fall in this decade into one of a number of traps from which we cannot escape or do we find a way toward a future where we retain our freedom and agency? And the idea behind DIAG is that we do retain our freedom and agency. Um, and I had been part of Zuzulu very early on and part of that and it was decentralized. So Zuzalu were was a series of pop-up villages and experiments where people lived together in a certain place and the first one was in Montenegro for two months uh experimenting with what it looks like when we try to create the network effects of Silicon Valley and cross-pollinate ideas but do it in a place that is not in Silicon Valley or a major city and bring the right people together um and sort of bootstrap that

effect and and being part of that he decentralized the movement And I was really inspired by the ideas of DACK. And I personally have been living in Switzerland for 10 years. And as we were thinking this through with the team, we were thinking like, how can we build something meaningful under this movement? And realized that Switzerland, the country we're living in, is actually particularly well aligned for creating a sandbox that incubates innovation, but doing it in a DACK aligned way. And why is that? because Switzerland has a 700y year history of decentralization and we kind of started to think of it as Switzerland is like the OG of Diaak or like the only maybe nation state example of what DIAC could look like. So for a bit of context, Switzerland is a direct

democracy. Any law or decision can be changed by collecting 100,000 signatures and then having a referendum on that. Um, but that's just one example of many of why Switzerland is very very decentralized and has has a very very strong cultural technology towards DIAK. So just quickly for people that are new to the concept DIAK is good and why what is it? So it refers to defensive, decentralized, differential and democratic acceleration of technology. Um, and in particular, decentralized and defensive are important and that they protect us. So, for example, defensive acceleration could be seen as yes, let's accelerate AI, but let's make sure that we do it in

a way that's open source and we know what we're getting into, but why now? Yeah, as I said, the critical decade and how do these hubs actually potentially contribute to that? And why are we starting to go from pop-up villages to permanent hubs? And one of the things that we've observed is that these permanent villages actually provide a kind of a defensive social layer for Ethereum for open-source builders and for the community in that it's a lot harder to pretend to be someone that you're not or to be say a grants farmer if you're living within a tight social graph and there's a permanent community that let's say proliferates that tight social graph.

And so as we're we've had many pop-up villages in many different places, we're starting to see that these hubs can actually be places that defend Ethereum and defend the values that we want to live by and help us accelerate the the things that we want more of. More decentralization, uh more governance experiments, more open- source work and things like that and enable that high upside experimentation that will help us hopefully prevent bad the doom scenarios. Um there's a concept in sociology called free social spaces and it's an interesting one to look at in terms of understanding why these are important. Um free social spaces don't need to be physical spaces per se but they often are and what they represent is essentially a sheltered place that is free from some of the barriers of wider

society. allows radical social innovation to actually take place in a protected environment for those things to g gather momentum and be refined and then eventually when they're more ready for a wider society actually be scaled to that level. And we think that these hubs actually represent free social spaces for Ethereum and for DAK. Um just a couple of examples of the kinds of things that work in these hubs so far and from from the Zuzlu experiment so far. So one, as I kind of mentioned, the legitim legitimacy concentrator effect. Um these hubs allow kind of these short pathways between people and a tight social graph. Two, there's um this very strong sense that

people are much much more easily able to test with other users and to have fast iteration. often because many builders are in the same place and iterating. There's a lot of integrations and partnerships that happen at an early stage and people learn from each other. Um it's as I said a sandbox for the radical more radical innovation. Um it's enables testing of things that people might otherwise not use because the UX is quite difficult. Um you've kind of got this captive or audience of people that are willing to experiment with things that are more radical. It enables cross-pollination between high signal audiences and it also enables it gives you a sort of a captive audience for distribution and scaling. So now that I hope we all agree here

that this is something that's good, what is actually needed to gather and accelerate the act builders in these hubs. Um so we had a look into what actually makes people for example move to Silicon Valley and why do people move to other hubs of of a of a greater scale. Um, three things if you boil it down, access, lifestyle, and runway. Access, referring to being able to access talent, particularly also access investors, and also the kind of advisers that can really level up your company. Um, lifestyle is important. um despite all of our tendencies to burn out and do crazy things, um people are caring more and more about actually having a comfortable life. And places like San Francisco actually do have a nice natural environment and um

the most attractive places do have this. And then thirdly, runway. Quite simply, most people that move to SF are looking one first and foremost for runway and investment. They want to be able to raise money quickly and to spend their time building and not being looking for for cash. And that's something that's super important for us to recreate in these permanent hubs if we want to be able to attract top tier builders. Um, Zuzulu, just like as a bit of an example of this, what have they done so far? There's been, and these are only a few examples, but there's been pop-up cities in many different cities across the world. um they've attracted usually 200 builders at a time over between four and let's say four weeks and three months. Um and you could say that we've

fulfilled the hypothesis of can we actually attract builders to this thing. Um, so once we got past that, can we attract builders and pass the prototype of of pop-up villages, the thinking moved to the permanent stuff and Vitalik was in Zutherland at the beginning of the year and he sort of posed the question to us collectively. Um, how do we build these places? How do we make them attractive and accessible to the act builders? As an example, Switzerland is incredibly expensive. How do we make this thing investable? How do we for example um potentially subsidize builders so that they can come here? How do we if we're subsidizing builders, how do we make this financially sustainable? And how do we also if we're getting say investment

into these things, how do we ensure that builders actually retain agency over their village and aren't just owned by a bunch of external investors. And so we've been working on some tokconomics and investable models um for these permanent hubs and have a few design principles here. Um, we are given the Swiss long history of Swiss federalism. We're inspired by many of the Swiss values, autonomy, subsidiarity, direct democracy, and neutrality. We're also very much inspired by Ethereum values and uh, in particular open source. And we want to invest in and subsidize open source builders to build the things that are meaningful um, and may prevent doom scenarios. Um and some of those

principles that we're looking at with the tokconomics are we want it to be investable mission aligned. We also want to reward both capital and reputation. So not just you have a stake in this or you have a stake in governance or you have an upside if you have capital that you can invest but also if you somehow invest your reputation in the legitimacy that you've built up as a builder or in some other way in the ecosystem that you can sort of invest that in the ecosystem too and be rewarded for that. Um, we want something that pro protects against capture. Unfortunately, with some of our early learnings with these experiments were that people really love to control things if they think that there's something in it for them. And so creating things that are defensive um by also protecting them against governance capture is really important. And then of

course not just designing something for Switzerland that only works there, but trying to design something that works in principle for any hub and can be repeated um to create a transnational network of these permanent hubs. So where are we at in terms of our validation? Um the the three three core hypotheses that we have um one these village-like environments can mimic the network effects of Silicon Valley. We feel very clear in that that hypothesis being strongly validated by Zuzloo. So far, second one, permanent hubs uh can enable acceleration and cross-pollination between disciplines and that that will be something that's attractive to our target audience. We feel very confident from the feedback that we've had, from the opt-ins that

we've had that that is actually the case, but it is not perfectly proven yet as not not really any of these permanent hubs with full live-in capacity have been tested yet. And then finally, and very critically, permanent hubs can be extremely financially successful and provide subsidies to builders by accelerating frontier tech and having a focus on DACK and open source. And that is the highest risk of our hypothesis so far. Um we do very much believe in it but remains to be validated and um fully fully tested in over the long term. Um how what is like our take on how this should work and how it will work and how it can be successful. Um, we're looking at these as a mixture of co-working and

living hubs with a DACK focused and o open source accelerator. So, it won't be just people living there permanently and you're like a happy village. There will be some of that. But we do believe that the constant fresh blood coming in for different cohorts or different acceleration programs, fellowships, residencies, etc. is really valuable to the overall ethos. And there we're looking at campuses like Harvard and Stanford with their endowment funds. Um they have people living there long term, but there's also this um constant change and fresh blood coming in and cross-pollination from international universities. You have professors coming in um and all of those kind of students and professors and things are funded also and subsidized by the endowment

fund of the universities. And that's really the key part here is creating a self- sustaining endowment fund similar to what Harvard or Stanford have. Um hard to do potentially because those are big endowment funds and how do we get there? Um that is the billion dollar question. Um and so the question a little bit to figure out is can we get the right investment model for this and can open having an open source or open core ethos really provide the ROI required to um be financially successful and I I feel like I don't have a huge amount of time to go into this but um I I think that people kind of have the misconception that open source means that you can't

make any money. um and examples like Ethereum and Unis swap or let's say safe are um ex show that investors that put money into open source can make significant upside. Um there's also just a wider point that Alex Dano made in his speech about the Canadian startup e not his speech his his essay about the Canadian startup ecosystem. And he says like good angels are playing an infinite game and they often make a ton of money leading to the per perplexing advice for outsiders that the way to make money angel investing is to not sit out trying to make money. And personally I found that very much to be a true thing. Um if you invest in the in the people and you invest in the long term there's actually almost always an upside and a good one. And um beyond just the financial

modeling of these things which we are also doing I think that's an important kind of mindset to have is that if we create the value um if we invest in the value if we invest in what you might say the fertile soil then we will get the plants that are growing in them and the fruit will be will be born. Um so that's kind of how we're thinking about these things and our job now is pilot piloting like a DAC accelerator in Switzerland. um and figuring out exactly what that will look like. I think one important point for us is that this we're calling it the two house token, the zoo house token in English.

Um it's a bit of a play on words with German. Um the one really key important thing that we see in this is that there's like this social stake or this reputational stake and there's a kind of like legitimacy mining or you can stake your legitimacy and return uh receive token rewards not just stake your let's say financial capital and that's something that we're exploring how to do right now. Um, and I think another important thing that maybe people don't immediately imagine is that we want to have a focus on long-term ownership. And there were being inspired also by, for example, Swiss real estate cooperatives, which are very successful and have existed for a long time. Um, 25% of apartments in Zurich, for example, are actually owned by real

estate cooperatives. So there's something that is financially successful, but also they manage to provide subsidies and lowerc cost living to people that are in them. And so we're looking at those kinds of things for inspiration of how do we create something that is both financially successful and valuable to the people living in it. Um, and the ultimate hope is that we can create this self-reinforcing loop where like more legitimacy coming into these economies. More people building amazing open source tech equals stronger hub economies adding to the token value and leading to more capital that can be reinvested into open source and public goods.

Um, these are just some of the topics that we are hoping to focus on with our hub in Switzerland. I think important to highlight is that if we're building an transnational network of these things that not every hub will have exactly the same focus. Some may specialize in one area or another. Um Switzerland for example is particularly strong in the ZK and privacy space. Um obviously because of the cultural background we we see it as really great for governance and democracy and experimenting in that space and say Zurich has an incredible pool of AI talent coming out of ETH. So those are things that we can really do well there. Um, but if you're thinking about, you know, could I have one of these permanent hubs in my city, it definitely pays to think like what would actually work potentially? What are those strengths that you have in your

city and in your ecosystem that could be played played on to really create a thriving hub? And if you're interested in that, like feel free to come and reach out after this um and talk to me. Um, yeah. Uh, so what are we up to now? Um, we're actually we hosted a pop-up city in May in this beautiful alpine village called Lux. Uh, and they have a wonderful resort there, uh, called Rox Resort where you have, um, long-term living apartments or like vacation apartments, but you also have a hotel, you have event space, you have a number of things that actually make it perfect for the MVP of a village. And they're very excited about working with us to test this and even bringing some of their like hotel functionalities on

chain. um or even potentially giving us say a building or something of that sort to actually start already MVPing this village um in real life there in LA. So that's something we're already working on. There's a few other things in the works uh too and the hope is that next year we will be at the point of having a permanent hub um that we can live in long term and really start building this out with. Um, so yeah, if you're excited about these things, um, keep in mind that we probably will be starting our a three-month residency focused particularly on privacy, identity, and AI safety next year. Um, we'll probably be having around 20 to 30 really focused residents there and building things out

with the focus on what would what is the technology we would actually need in this permanent hub um to enable everything that we want to do. And so yeah, that's it from me. Thank you very much for being here this morning. And [Applause] [Music] thank you very much, [Music] Stefan Cooks. Now, please welcome our next presenter, Mr. Stefan Cooks. The stage is yours. [Music] Yeah, good morning. So after this light and exciting topic we heard right now, I

have to make it a little bit darker. So some days ago, there was a big npm supply chain supply chain attack. Did anyone of you recognize this? It was an attack which could have a very strong impact on the web 3 community. Thanks to Yan Stak from Germany who discovered this attack and a lot of people in the community, this attack was detected very quickly and solved. So that the impact was not that strong but it could have been very intense.

So, but now let's steep a little bit inside this attack and see what impact it has on the web 3 community and the web 3 development and see what we could and should do better in the future. Before we start, some words about trust. So, trust is something very special. So, I trust my wife, I trust my friends, I even trust my business partners. But when it comes to the web free development, we should be very careful about trust. So often we talk about trustless systems. So even if I use this word, it's not really correct. So there is no trustless system. But we have also to talk about trust assumptions. So first of course when we talk about

the users of our applications we should not trust that these users are not doing anything malicious or try to do something what they should not do in our apps that's I think it's clear when it comes to hardware and operation systems of our computers we barely have to trust that they are doing what they should do right we we don't have a lot of impact of course we can test but yeah there we have not that much influence on it. But now when it comes to cloud providers, information providers, service providers, should we trust them?

Should we trust what they deliver to us? We should not. We should always try to verify and validate what information we get from them. And the other point is software dependencies. We are using in most of our software dependencies to other packages. Now we heard today already about open source software. It's a very great idea. I am a real big fan of open source if we use such libraries. We have to think about how much trust can we give into the systems and it depends really on what software we are writing. Now, if I'm writing a a dashboard where I show something, of

course, if a library breaks, it's not nice. My software might not work as it is expected. But if I'm building a security relevant application, I don't have to trust any software component, any information I get from somewhere. I always have to verify Most of our web free applications at the moment are written in JavaScript. And to be honest, I never understood why we chose JavaScript as one of the main languages to build such applications. So I worked for several years in the automotive industry and when we deployed software

for instance in in the cars the rules what needs to be done and what software needs to do were very strong and it was so there was a lot of rules that prevented something like dynamic code execution. So when we go to JavaScript actually this language was developed for a complete different reason. It was to developed to build nice animations to support in page interactions and so on. So to make our websites more attractive, more nice, more convenient. But now we are building a lot of different applications and even security security relevant applications with

JavaScript. So what are the problems when we uh look at JavaScript regarding secure applications? Do we have the dynamic code execution? You can inject code and execute it without having this code available during the compile time. So we can override global information, global variables, global functions and so change the behavior of the application from outside. We don't have sandboxes and we have a lot of dependencies. So everyone who ever used npm packages here would have seen this number how many dependencies a package has. And if you are using a lot of

different packages, you have maybe tens or even hundreds of direct or indirect dependencies. In the back to the automotive industry, when I wanted to use a single function from a package in my software, I had to prove that the whole package is tested every time. We are not doing this in JavaScript actually. We are using these packages how they come and we trust that they are not infected by malicious code. So what happened some days before and we will see exactly these things I just talked about JavaScript were the reasons for the or the foundation of this

attack. On September 8, there was some information available in the social media that we should stop using our wallets. We should not do any signatures. We should not do any interactions with blockchain because there was something happening and there was some malicious code injected into widely used npm packages. So how did this happen? There was a targeted fishing attack to a developer who was involved in a lot of different packages and they injected some code which changed the addresses of transactions so

that the receiver address were replaced by a similar looking address in uh from the attacker. So this code was injected from these external packages. There were a lot of different packages already um yeah infected with this code and by using these packages this malicious code were added to your application. So and the all the operation was in the background. There was no interaction with the with the user interface. That means everything which happened in the background was hidden from the user. He could not see it.

The interesting thing was there was no RBC infected. There was no wallet infected. There was no seat face stolen but transactions sent money to the wrong address. It was just the the code which was used by the app and which was trusted. This was infected. So what kind of packages were infected? So in the first site we would think okay yeah if they infected some cryptographic packages or some web free packages this could be could have impact. But if you go to this list of all these packages you will see these are packages for font manipulation for column manipulation for some debug

functionalities and so on. None of these packages were crypto packages. So that means these are packages only used in the user interface. But by using these packages, the malicious code was injected in the application and did some very bad behavior. So how does it exactly work? When one of these packages was used then it in it replaced some global functions this fetch function for instance this global fetch function or the web3 provider and manipulated them and then when there was an interaction from the application with the wallet. Now for instance you had a wallet you

you signed the transaction you want to send one ETH to an address then this malicious code detected here is an transaction and they replaced the receiver address by a similar looking address from the attacker and then the user received this information in his wallet and if the user would not read exactly if this is the right receiver address he would sign this attack or would sign this transaction and by doing this there would be a regular transaction this would be sent to the blockchain the money would be sent but not to receiver but to the attacker's address so this that means even if I use a hardware wallet it wouldn't make any

difference because if I don't read exactly what is the receiver address and click to quickly sign this transaction would have been signed So and as I said everything of this went in the background. So the user interface maybe your nice wallet would show all the information how you expected and only at this time when it comes to your wallet where you do the signature there was a little difference in the address. So why could this happen? So what was the reason that something like this could happen? So we have a lot of trust assumptions and a chains of trust in our

applications and especially also in our web3 applications. So first we are using packages from MPM and as I showed even if I use only a simple small package for UI manipulation it could have impact to any other position in my code. The other thing is we often trust RPC providers that they really deliver us the right information. I will not go in detail with this. I will talk later this day about the this the topic uh trusting RBC providers but this is also a problem we have in most of our web free applications.

Yeah. And often we notice there are transactions generated and signed and sent without testing if this signed transaction is really this what it should be. So we what do we really need to do to prevent this from happening? We we must see that we give attackers not only a way to break our assumptions. Now if we have a lot of trust assumption in our code, it's very easy for the attacker to do something which is not that what we want to have in our applications. So I have to repeat don't trust always verify everything. Now we have to verify any aspect in our

application and do not tr or to build trust chains in our applications. So what can we do to detect such and misbehavior like it was in this attack? So first yeah we should not trust any uh input we get from RBC provider unfortunately this would not have saved us in this attack but this is something which is also very important. The other point is we should never send untested transactions to the network. So even if I build a transaction in my application, I have to check after this transaction is signed if this is exactly

what I want to do. I have to simulate it locally, not on the server because then I have an attack vector again. I have to locally check if the transaction is really doing what it should do and this by a local simulation. So yeah, but how can we do this? It's quite hard to run a full node in every application. So when we go back to the early days of Ethereum, maybe some of you remember the mist browser. So when you were running the mist browser which was the execution environment for smart contracts and for decentralized applications it had an included Ethereum node and it started to

synchronize it and then you had your local node and you had all the information to be trustless but as we know vidik talked about this on two days ago it's way too big for most applications now you cannot run a full node in your web application in your mobile application. It's not possible. Then we have these light clients and light lines are very interesting and nice evolution. So light lines don't synchronize the whole chain only some parts of it. The block headers and some information which are really needed.

They are way more lightweight than a full node. But for most applications they are not feasible. Now if you have a web application and have and you run a light client in it, it needs to be online all the time or you have to sync all the missing blocks when you start. If you have a smartphone application, your users will be not happy if you are synchronizing all the day even if it's only a small piece of header in the in the block header. So what can we do? We should or do we need to use stateless but fully verifying clients. That means we have to use clients which can a can be able to get information get proof that that this information is correct

and no synchronization no state but full trustless verification. And these stateless clients also need to verify all information before they are sent to the blockchain. So with Kibri stateless we build such a stateless line. There are others also in development like Helios is a light client a little bit more heavyweight and others also providing technologies we can use to do this verification in our applications and we need to do this.

So how this would or could have been prevented by using kibra. So in case of this attack it would be possible to detect this change. So in this small piece of code you see that the KIP client is graded. He gets this information that every transaction needs to be verified and that means if the transaction is generated, it's sent to be signed in the wallet and before it's delivered to the network, it's again checked and we verify that the intention and the the content of the transaction is still the same. And in the case of this attack, it would be easy to detect that the receiver address

was changed and that's why this transaction is not a valid transaction and so the transaction would never have been sended to the network. So with state with kip I already mentioned this is a stateless client completely not synchronizing with blockchain just getting the information getting the proofs in the other talk I have at 2:00 I will go a little bit deeper into the mechanism we can use this client already to really have trustless connection to blockchain by validating all the information we get from blockchain and simulation everything locally before we send it. Yeah, let me give a short summary. So

this attack was a very critical attack thanks to the quick action of the community and a a good portion of luck. It was detected very quickly so that we could stop it before a lot of of impact could be seen in the network. So that means even if this was a critical attack it was the impact was not that bad but it have have could been this we we never can fully protect us from these supply chain attacks but we should do as much as we can do to um yeah prevent this from having a big impact. So one thing everyone can do reduce your dependencies. The best application is if it has zero

dependencies. Of course this is not possible. But if we use some dependencies we have to check them. So if you say that's not feasible and I if I use these packages I have let's say 20 dependencies I cannot check every dependency then you should not use these packages in security relevant applications we also should introduce new methods to have in our CI these checks we the CI should or really verify that the versions they are used are audited versions which are secure.

Yeah. Never use unverified code. Never use unverified transaction data. Never use information from the blockchain which is not verified. And if you verify always do it locally in your device, in your application so that you can be sure no attack vector can manipulate this data. Once again, don't trust, verify everything and always stay safe. Thank you very much. [Applause] Thank you very much. [Music] Now, please welcome our next presenter, Mr. Har.

Mr. Harun, the floor is yours. [Music] Hello everyone. Uh my name is Harry M. I am a smart contract lead at offchain labs and today I'm going to briefly talk about some challenges of decentralized rollout. But first let me explain what is optchain labs like in the arbitum ecosystem. So option labs is a service provider to the arbitum foundation which act as a steward to the arbitum dowo. Albert DA govern the arbitum one and arbitum no chains and like option labs provide technical expertise to the foundation and dow such as like shipping upgrade to this chain when like we need to upgrade like say uh we have like a

ethereum hot focus new eip. So as I said like or like I mean maybe a lot of people already know one is like one of the leading decentralized roll up and friends to our friends at L2 bit like we can look at this dashboard about like um some um some summary of the characteristic of one and you can see that one is actually a stage one roll up according to their definition and if you look at the pie at the right side you can see that we have Every slice is in green color except for one slide called the exit window. So what is the exit window? Like um in simple word you can think about exit window is like a time

lock for rollups like you allow user on this roll up to exit the roll up when they don't like a certain change. For example, if the owner try to run or like they try to like make a change to how the the bridge is like custoing their fun user should have like a window of time to exit the chain and and even if the sequencer is sensoring but how do you actually um guarantee they have like certain amount of time to exit like it's basically a mix of waiting and also like some protocol level like sens censorship resistant like cook such that you make sure like if someone want to exit, they will have the window and also have the like ability to exit the chain. And why really not a stage two right now

is that because like if you look at L2 based like u requirement on the right like bottom right side, you can see that they actually require a 30-day exit window if the change is not related to a bug. And we also look at the life cycle of AIP which is average improvement proposal and like due to the governance latency people have to work like we have a CH period because we are optimistic up there exit window requirement there also like censorship resistant like like requirement and AIP actually will take at least 35 days from the proposal creation on chain to execution and that is not including the time of a potential column extension of two days. Like um we have an optional snapshot temperature check of one week and also like there

are audit time for any code chain which is can be weeks and then of course there will be development time for any change we want to make and you can see that like it's actually like really like a slow process once your your roll up is decentralized and you it's actually decentralized it because it's like take a lot of time to ship any change. So why are we talking about L1 hard fork? What is the implication of roll up? There are usually like three types of change that can impact a roll up. Um the first kind of change is basically um L1 breaking change. Sometimes like L1 decide to ship certain breaking chains that like on on on L1 and then some example will be like 7702 which like changed the behavior on like in the past for example we can detect if you're a EA

by using text origin and message standard you cannot now and then like in the upcoming forak we also have like a new change that going to introduce a transition gas limit cap. So this like some of the L1 braking change can impact roll up because like for example the proofing system of the roll up may actually need more gas than the transition cap and that's something we have to evaluate. Um there's another cost of like difference is like L2 I have to implement new feature of L1 like basically any like Y change we have to implement on L2 and like some of the example can be also be 7702 because like like when L1 have 7702 like user would usually expect to have like 7702 across all the chain and then they can use abstraction everywhere but

like because like of like the process I talk about is really usually really hard for us to ship that like when like magnet ship the same feature and then we will user left a window that they just cannot use this on average one and the third type is basically about L3 L3 is like arbitum's term orbit chains uh arbitum term for like roll up on the roll up and then there are additional cons consideration when trying to implement EIP on this chain because of how like the parent chain is different it's not actually L1 is L2. So you have to consider how L2 works when you implement those chain and there there's like additional comp capacity when we have to implement those feature. So like to recap basically there's like three type of like challenges. First is timing

like do we want to like ship before mainnet or like at the same time or after like it's really hard like actually like to ship like at at the same time as magnet because of the 35 minimum delay. Usually it's like two months to be honest because like we actually have to write code like no AI haven't replaced that yet but like um that's a thing. Um there's also like certain like um sometimes they make last minute change to how what EIP is included in the hard fork or like what is the actual implementation like for example if they figure out like they suffer a bug after the test net fork then they have to make change or like for example famously like in the past we have like a year removed it completely from the for like the last fork and then

that's if we like decide to frontr run mainet and prepare everything like in advance then we will basically have to scratch everything and then like redo and it's like the problem like what usually is that why we want to ship as close to mainet as possible is because like user expectation like in a road centric road map like user want to have the same experience across different chain likes but if like for for example if one don't have 7702 enabled in day one is really like not the best experience for user and then um that can make like like the experience worse and this going to be even harder when the

exit window is set to 7 day to fulfill a stage two requirement because like when I say 35 day is actually like built around a 10day exit window like like considerate like assumption but if you want to make it 30 day it's going to be like at least 60day kind of like scale we're talking about and then it's make going to make the thing even harder. So where do we go from here right like I mean as a one and other roll up progress and want to be more decentralized there like they want to like move away from like having a onchain dow voting on things but like then having another multisake to execute that's like the easy way of doing decentralized stuff but we all know that is not that

decentralized right because like the that those multis usually don't have a very like obligation like at least they can kind of do whatever they want like and you want to do something more close to what the AM D is doing which is like allowing the DAO to have complete control of everything on on um on chain and then um there's also a security console which can make change like immediately but like we usually like basically like security console is built for like security issue like like working shipping and mainet like like EIP IP is usually not a security issue. So like we usually don't use the security console for this kind of stuff unless it's for example the type of

thing I talk about a L1 breaking change that may actually impact how the L2 like security. So how do we solve this? Um I feel like I don't really have a good answer to be honest like decentralized is really hard like we are still early we are still figuring out like Dow is one of the biggest D right now and then but like there are still a lot of like issue we have discovered like in the recent time like how how hard is to run a D to make sure everything is decentralized also but also functional but I feel like there's like a few area that we might be able to improve like one being the EIP process like we should like try to avoid breaking change like that's like I don't think we like

usually like try to breaking change but like sometime like this this thing happen and then like we should like have better like tracking on like what like the IP might break a certain protocol or not. Um we should also aim to see if we can have like more clear signal on when is the hard actually finalized it to avoid any last minute like change. um DOF probably one of the good example uh but like you know Ethereum itself is also decentralized so like it's also something that really hard to figure out and for the Dow side I think there's probably something we can do from the how u to improve the D governance process although I currently don't see it like something that can be changed

materially because like a lot of like delay is basically just giving people time to vote and like like exit and you you you don't really want to like say hey I'm just going to this going to give this multi the ability to like ship whatever change they want like this also not very decentralized sounding so maybe not something what we want to do um user education is probably one of the thing we can do like maybe we should let user know that L2 actually because of the security properties they should let behind L1 like they maybe they should not expect L2 to always have the same features set immediately ely as L1 ship them. But that's also hard like I mean even if you educate them them they like the UX is still bad. So like probably not the best solution. I hope like

someone like maybe we can also think about this because like I feel like usually like these um like we want everything to be decentralized but we don't usually think about too much about how these thing operate once they are decentralized it like we have like a long way like to go before we can make like um L2 rollups like fully decentralized it optimistic or not I feel like this like a problem like for for it's actually not a problem just for roll up. It's probably all for all other deps too like because like if you're decentralizer you will come at a time where like you like you will need a lot of time to ship upgrade and then it's very hard to like anticipate like when

what is the IP is going to incur and then how can you time your upgrade with those. So thank you like um yeah thank you very muchent [Music] thank you for waiting now resume the presentation now please welcome our next presenter Mr.

U Suzuki. [Music] Hi. Hello everyone. ZMZM uh thank you for coming today and for listening to my talk. So hopefully like you know this talk will be are one of the unique talk you will listen through this aircom and also like I I just wanted to say like thank you to like Eric organizing this is a really great event and thank you so much for inviting me to the speaker. So there I I will start like about like my introduction first introduction.

So I'm Udai Suzuki. I'm co-founder of Fractton Ventures which is not a VC or this is a incubator based in Japan other my background is a record startup incubator since 2017 18 or since then or I saw first generation of blockchain startup everyone called blockchain startup at the time. So the I supported record blockchain startup first generation or in 2017. So I since then like you know I was like a big fan of like I I'm a big fan of blockchain technology in the also like a decentralized infrastructure technologies and uh so like I introduced so many like blockchain first generation of blockchain startup founder Japanese founders to VCs investors in Japan

market but anyone everyone couldn't understand this potential one of the guy as I could realize try to realize that such such a kind of similar application of record or or chain analysis at the time is it 2017 or maybe you guys know chain analysis or offer recently signed with FBI or any big American agency using this technology as well but you know there so many record BC couldn't understand this point you know why someone why you where is a user who would use this technology so you have a blockchain you know is a scam. So it was a it was my beginning story you know. So since then I have been starting to oh we

have to create really strong ecosystem for Ethereum in Japan. I just started like a founder community first in Tokyo and for all of like blockchain and especially for Ethereum protocol founders I collected in there and like do a like a drinking or networking event together and for knowing each other. So this is my starting ry. So fractton or this is like a Tokyo based incubator and it's not only for Japanese founders or we are providing incubation cohort and as a cohort style to our more wary people as like as like Asian founders too. So the fractton has a three things we are doing. First one is a fractton incubation which is a flagship incubation model. So that we are

providing cohort style means six months or three months. Cohort style record acceleration incubation model or plus educational content or plus inter or super or or interesting or innovators like mentoring opportunities or we are providing through this program. So fractum enterprise teams so like recently we created enterprise teams for or supporting more enterprise. So how our enterprise or big corporate especially in Japan too or can understand the value of ETH. So there is a two meaning of like Ethereum the Ethereum is a world computer that it can covered by fractal incubation through this inc protocol incubation. So there is a ETH is money ETH money is covered

by this fractal enterprise. So this is the things and also like we are organizer co-organizer of east Tokyo and we are organizer of DA Tokyo. Yeah there hopefully like so many guys like already attended to this year's D East Tokyo as well. So it could be success successfully we finish record this event. Hopefully like we will re back to record Tokyo again and uh hopefully record Eric will keep providing our event in Osaka as a like any collaboration that we we'd like to see and we are are hosting like a monthly meetup in Tokyo and like if you come back to Tokyo please say hi to Fractton team. So if you want to talk about something, if you want to share

your research, please use our meetup opportunities. This is for yours. It's not my handle. So this is for yours. So fract is doing recruit entering is doing eMM incubation is Asian protocol funders and the incubator over 40 protocols is a target is very simple after hackathon and two angel and pre round. So there nobody this is super tough hardest timing for cryp founders you know anyone will not support nobody you know you are just challenger oh you are doing things okay like good luck that's it so who will support strongly for this artist founders this is the things I will skip it the

cohort five will start very soon we are we are expanded like a deadline of this application if you are building really new protocol and the super in you are in super early stage please apply to fractton website. So please find like our Twitter or x record or our handle is we can dow it. So please search we can dow it. So there yeah I would skip it. So as a back to the main topic so we are E3. that everyone is our Ethereum. So we love why we love Ethereum. I think there is a three reason I I personally too. The first one is a decentralization.

Decentralization has a lots of meaning. node client rebel decentralization geographically re decentralization and or any other record you know or any other or any specific or name of organization couldn't provide the record you know central record or top down readership model in the market or something like this so the and uncensorship so so we are we need this point as well to because like Ethereum is for everyone I posted this this word like yesterday. EM is for everyone means like you know any single person like or we will we should not to shut out them or from network it means like you know the someone carefully AML okay like you can

use GKP for checking AML right so like EMA itself they shouldn't do like you know shut out someone from the network and the last one is a positive subcoordination so oh sorry So maybe like my internet my connect is not good. Okay. So the possible connection coordination is like a most important things to do it. So the everyone is like standing on open sourcebased culture. So open source based culture means every protocol can forkable fork forkable or to from source code and you can use use the code. So the record and as a tokconomics too the record if token incentive model is a bringing to new value and outside of the community to into the new community or to own

community the community will grow. So there everyone is just a comm talking about like we have a community we have a community there are you is this real human is this is a program you know so many bots maybe you guys are hold like over 20 wallets or something in person right so like so like more important things is that like how we can create like a more positive some loop or looping or through the protocol design through the token token design as well. So big question what are we missing in the Ethereum ecosystem? When I say Ethereum ecosystem it's compar or aligned to like Ethereum L1 plus L2 as well. I can describe as well and so next question is Erem ecosystem means it call

EBM ecosystem. I personally think sorry for any other EBM guys like you know I personally think EVM is not a ecosystem it's just there is a just a solidity developer developer can write solidity for virtual machine can run using solidity language this is just a EBM EBM is completely open source everyone can use it so EBM if fork from like a Ethern is sorry Ethern to any other chain is it can network it's it doesn't mean to actual ecosystem I'm personally thinking so so this is my imaging so there is a etherm l1 there's e l2s and the specific side chain when I say specific side chain

impersonally I think like a nosis polygon they are in so this is my imagination so everyone can easily to say we are in like a EBM ecosystem together right bro no no this is not an ecosystem So this is real ecosystem Ethereum ecosystem. So as a question is that like you know where are three developers in the market. So the maybe like research has made by electric capital there they are reporting like every year for where is the developer are in in the market. So there maybe like uh Solana other chain or internet computer all interesting appto base oh base is ecosystem eum ecosystem as well so near

okay so I don't know the I think this is just like a developer number so it's not it doesn't mean to number but like also like where is the developers if developers keep developing some solid or using solidity for EBMS in other chain outside of Ethereum ecosystem. I want to say recorder please come back to here how we can do it. So how can we EBM developer return to the Ethereum? This is a program this is a question for you all. So why don't they build on Ethereum? Please think about like one minute like why what do you think why don't they build on Ethereum

maybe other chain has lots of grant opportunities printing money printing money something I don't know so and the partnership offers we can easily to say co-arketing together bro okay okay it's good so the my interest is that like you know if EBM developer means like a solidity developers rethinking about the what is the meaning of Ethereum development what is the meaning what is the value of like development for Ethereum if seriously they will start to rethink again I think they will go back my answer is that no place to get serious mentorship for super audi protocol founders the reason is that so the point is that you know so

many Audi developers looking for opportunity as grant as a partnership. The reason is that like you know you don't know any new protocol names the new protocol comes in the market there there's a really serious founder they are developing over 20 years writing a code this is crazy this is good but also even the situation you don't know the name of the protocol right you will not use the protocol so if they say you know we partnership with bra foundation ABC foundation ABC foundation ABC braos something like this so the record so we got a record grant and or from like this hackathon this finalist something like this. Okay. So like you know or finally like a foundation approved your name and also like there maybe like maybe will maybe someone will get interest to use

this application this protocol as well. So the my why I say this answer is a my opinion is that there as a incubator Ethereum incubator we always thinking about where is a good place to like get provide a mentorship for super early stage founders. So like I I am believing like all of attendees in here is like a maybe like a maybe like a half a percent is a speaker in the aircom over half a percent I think so. So there now you are speaker on edcom but like a you was like a timing you were timing to like a just a super beginning phase of the protocol developer protocol founder right so at the time who

supported you so how so stage protocol founder need opportunities need opportunity means like are if new protocol creation activity comes from hackathon. They have to start to thinking about like is this a good idea? Should I spend my life for keep building this protocol? Something like this. Okay. You know, you have to share this idea to like a very good mentors you know. So I think recorder these guys record you know these attendees are really very good where if we you can you have a motivation to do a mentorship for Ethereum ecosystem from tomorrow maybe new founder we will see

more new founders and they need I say like they need mentors mentors is not just like angel investors but also like are more collaborate together and share their networking resources trust resources and I know him guy the the guy understood at this point you have to talk with him like that. So someone should like introduce or in to or bring new founder to core deeply ecosystem prayers and start to doing a chat. The type of opportunity is really really important for everyone and the and the last point is they need a grant or angel investment too. So there it's it's depends on the case but you know like you don't need a money you

have a money and you can keep developing this is the best but also like realistically you know there is a timing to like you know we are we can easily to face financial program there we have an idea we have a motivation we have a good team as including developers but we don't have a money okay you have to raise raise the money so the record So about one question big question especially for early stage funding or fast funding is that like you know the investor audi investor engine investor too can easily to ask there who or which ecosystem which player approved your name in the ecosystem. So you know like it's just bit of hurt it's just I think this is a just like a chicken and egg

program you know someone should approve like I'm supporting this protocol but also like before coming to this information so like investor cannot say yes like okay I am personally like like you but like personally like you means like you know I can't invest like to your protocol directly like on that so what we are doing in the case. So, Fractton benches is a continuing to provide 1% of token offer to incubate protocols. So, we are not investors. We will not invest. We haven't invested but we just offered like a 1% of future token from each of incubated protocols. Someone said, "Oh, you guys doing like a

13 work in the space kind of kind of." Yeah. But okay why I saying why I why I'm believing this model is good is that so other other incubator or accelerator in the market in web3 in c of crypto they are are offering around like a four to six% token to each of projects maybe you guys can understand four to six% is quite big number you know maybe like a roughly 20% of equity or something the similar meaning is too risky to do this and more important things is that why I offering why we are offering 1% of token to each of project the reason is that the we are not an investor we we want to take we want to get more position as as

a side of like a more co-ounding member level for you guys to keep supporting your project this is a sense so we started to thinking about this model we have been providing this model since 2021 over four years we already incubated over 40 protocol 45 protocol in the market or mainly from comes from Japan but not only from Japan so recently we started to new Dow or alliance initiative it's called east reactor east reactor is like a new DAO formation a DAO doron incubator collective for Ethereum.

Why it needs because like a pre- search on like east reactor or ETH without E reactor or east reactor on X there is a there is a X account only 100 members following right now it's super beginning timing so so why it needs fractton offering this model so ino in in in many days and also like you know we are also thinking about like you know how we can do more global rebel same action in the market.

So e reactor has recently started with these communities. They're from Japan or Fractton will join in this D. Suchi or blockchain rout which is a behind of like East Betam they will join and narrative from South Korea will join East Sony has joined and also like Isa Cinco de Mayo the like which is like a Mexican community they has joined and like is Panama community is is called east cano has joined and the napoli east which is Italian community has joined and the isabare which is a servanian community it has joined too. So what will will we do? This is like a E is reactor is like a global D formation

through by our E is react umbrella powered by incubator collectives especially for Ethereum aligned incubator collectives. So the meaning of this record there is a lots of record hackathon in globally. So you can you can jump on to the new hackathon new hackathon new hackathon as a mentor ja something like this. So behind of the hackathon there's so many regional record reader Ethereum reader player in the market we want to on board them into the one place to work as like a DAO member DA formation together to do incubation and offer 1% of token in regional market everywhere. So there technically like if we on board if we reach the on board every global country

into is reactor is reactor brand can get like a global access through this global is reactor brand name this is a DAO so so this is the formation of east reactor actually do so regional incubator joint in this DA so regional incubators means like you know behind of the is hackathon or incubator they are already ing and run on incubation program together and globally. So the through this is reactor names is reactor brand. Okay. So we we can run is reactor or makish cam or incubation program like this and the request like incubated teams to allocate 1% token to do it and one of the goodest motivation for us incubators is that we can share more idea more

regional opportunities collaborate discussing with incubators circles this is a one super unique opportunity to do it normally Japanese incubator like us don't have a motivation to share what's going on Japan. So what type of protocol we should incubate from Japan with international people or any other ide normally we will not have a we don't have a motivation to share the idea to any other countries incubators sometime like we can take like you know it's not an enemy but like you know it's like just a bit of like business it's not doesn't mean to like business synergy normally but like is can create more aligned incubtors corrective success this is focusing on. So this is a things

of like EAC as model. So first as I mentioned earlier so incubators they're normally as as IM incubators we are always supporting really very early stage founders they started from hackathon they try to hackathon so many times and starting a build record teams and just finalizing the ideas and also record here recent or you know research everything and doing for like a real finalizing think like of this protocol architecture. Okay, this is good. So maybe these information like who is our underrated talent in the Egyp regional market could capture we capture by like a regional incubators right. So

Zer if you are living in your country you know everything this country normally around your community and who will who will be joined who who are recently interest in this market this protocol this type of idea like that like that imagine like you know like if someone or if new market comes in the market like a uh like that if there's an idea like New Oracle mechanism is need of for the market any specific reason. So okay this is good okay so through this e selector brand we are starting like researching on everything who guys are like act already started to like you know

researching on new architecture model or new value model of oracle mechanism or there there's a lots of oracle in the market or including chain link too. So why we need new type of oracle is there is this a critical reason someone should create a new protocol or not and if it's it's true okay you know what type of architecture is the best so e reactor is a hub for everyone is a correct more ideas protocol ideas into the e reactor brand and also like we can share ideas with like a collaborative arigned incubators and story through the incubators we can easily to find really good talent in regional market maybe

some case the founder comes from like Japan and the Korea and Makkiso and the co-ounding together for one protocol I think this is the best so reactor can work for more providing more increase or coordination opportunities for in the Ethereum ecosystem especially for Ethereum incubation phase And also like as as I mentioned like is director will do our cohort style like incubation programs. So normally incubation program are is just a bit of hard to like you know are are providing actual beneficial or benefit to mentor or guest speaker each of programs. Normally everyone everyone

doing just a super voluntary work or just accessing to like RD protocols are only the reason they are doing but we have to create more actual like incentivized model through this action too and if really good mentor support deeply to really specific founder the founder will success in the future the mentor will record it something calculate something as his mentorship It was really very good in early stage something like this how we can capture how we can track on this. This is the things and the left one is a record grow them as a regional reading protocols. I think as I personally think is there depends on the market but like

especially in Japan too the market has been recently changed a little bit. It means so the puzzle of timing there I think like ecosystem is like a puzzle piece of puzzle. So there so many lots of piece of puzzle are already in in the puzzle. So there is like a big lending protocol there is like a you know stable coin protocol there is a you know the risk takingaking protocol like this. So if protocol is already enough someone should aggregate protocols into the one application and sip as like one product. Why I saying like is that like a

protocol is more ossbased like open source based smart contract based one and the product means you know like more providing record the things on it like this. So and the last message from istorrector is like this things. So we have support for RC founders and if you are running like your regional community please let me know or we'd like to on board you to retor what let's work together I think this is a new chapter for eMM incubation. Thank you for listening. [Music] Thank you very much.