ETH 2.0 Uncovered

Transcript

on thanks for being here I have the pleasure to welcome you today to this last session before the summer break of the Krypto Valley set of conference my name is Gabriel jacquard I will be moderating this this panel I'm a PhD candidate at the University of Geneva my thesis focus on smart contracts and I had the idea that we should speak about this theorem what is going on on the ETM ecosystem and the specialist got through to the pragmatics of of staking and what it would change to the economy of the interim as we know it today so the the

planning of today is to to to have an event a short event in terms of time to to have a very complete vision of what will be easier from a technical standpoint and have the pleasure to welcome mr. John the G she'll introduce to him later he is notably the president of a theorem France that will explain us the technical aspects of what will be theorem then we'll have an economical presentation of the the incentivization and and the how the system will work from an economical standpoint that will

be given by Alexander balanced and he is a professor at the University of Basel in economy and for in the end we'll have the question we of course we all ask yourself should we invest in any theorem right now so we'll have Martine Eisen ring who will try to tackle maybe the pros and cons of should we invest in any theorem and he will give us some some thought about about this so the presentation will be the the plan is threefold between all the this this

presentation we'll be able to submit through the Q&A button that is right below in the the screen of the the zoom interface you will be able to submit your question and we'll keep one after one question after every presentation will be asked to the presentator and in the end we'll have an open discussion maybe in 4045 minutes we'll have an open discussion where you will be able to submit your question and I'll read it out loud to the person that it is directed to so without further delay I have the pleasure to - to welcome mr. Jones latisha maybe he can you can activate the screen well I'll

make his presentation so Jerome is the head of client success at Leger right now he he started the blockchain practice of Ernst & Young in France in 2016 he opened the Paris office of consensus in 2017 and he is the current president of the etherium France Foundation which is a non-profit foundation in in France and he's an associate professor in economics we have the chance to have him he has a special he has a special boundary theorem and he knows we're about the system and especially he knows very well the the advance of the the

current upgrade going on so Jerome the floor is yours and I'll cut my camera right thank you for the a for the intro earlier so indeed um everything you said especially presidental feature on friends and we organized the conference every year at CCA every every March every first week of March I know that many folks from Switzerland are coming to the conference so thank you all for for your for your attendance to a conference and we will do it again the next month 20 20 20 21 hopefully you'll come numerous to to this new edition you can find me on social media and date you to shoot me an email if you want to

continue this discussion or if you I've missed something in this presentation so previously on the curium previously intagram we had that that's pretty much the history of vitriol in this graph this is the average gas limit of each block of material it dates back to the very start of each area the July 2015 up to July 2020 now as you can see you have many events that some of you may recall like the GOS attack during September 2016 or the ICO craze or cryptically craze or even recently the the rise of defy and so far the approach

of the network has been to enlarge the block size for for for being able to deal with the sudden surge of transactions that the network expected experienced and it hasn't been really a good way to deal with it since the block size in auditorium is measured in terms of gas and gas is the the sub currency that we use to measure how much computation a transaction is worse so transferring a in near c22 again will be something like between 36,000 gasps to 50,000 gas whereas from when Alice wants to transfer eater to

Bob she is spending 21,000 yes but if you like to play around with defy and use proxy accounts and instead of in the folding multiple time your position on Campbell and so on email you may very well reach out several hundreds of thousands of guests for one transactions so upgrading the guest limits is is a way to deal with sudden surge but at the expense of smaller nodes so if you run a node on your computer the bigger block as in the bigger the guest limit of the block the more expensive it is for your computer to compute the content of the transactions of the box so it's it's not

really the best approach since the gas limit will slowly kick out of the network nodes that are too small to follow the rhythm of new blocks come hence the the reproach of interim to that will be trying to tackle this issue with a proper scurrying mechanism and during the time that we were experiencing those events on the network the EDM family and an interim killers appeared all over the place so you have on the left side of this slide couple of projects that are using the e-tron virtual machine so completing your smart

contracts in a closed matter that how in a matter that is closed that - how each room deal with it - Shane started as a simple value transfer chain and now is going to do smart contracts in a very closed fashion as a terrarium and you are also other interim killers like AOS Kaido know and so on that took a different approach on the Virtual Machine side and trying to optimize it with some time some time having to to balance between decentralization and efficiency and number of full nodes and so on and all of that because frankly interim and delivery of interim to add

lots of delays the transition to prefer steak was meant to happen at some point and written on the paper since 2015 for 2014 in the in the original white paper and in in September 2015 the developers really committed themselves to transition into proof of stake as soon as possible and they introduced what called the difficulty bomb or the ice age I had to dig up the old commitment in the interim github - to find this very very introduction of this difficulty bomb and what the difficulty bomb did is upgrading the difficulty

exponentially at some point so whenever the the difficulty bomb block is reached the the computation of the difficulty of the next block is calculated in a different manner that goes up very fast and it happened before like around the July 2017 we experienced this is first ticking in of the Ice Age and it had the effect on the block time a pretty bad effect on the block time as you can see on the graph we went from a 15 second per block to almost 30 second per block and this difficulty bomb was to say to developer the robbers well if you don't delivery term - if we don't switch to profess take this difficulty

bomb will kick in a lot and slow down the network so you have a you have a strong incentive to work on it because it don't deliver it stood as an enterprise so it was supposed to appear at first in July 2017 that was the initial plan I mean two years to transition to proof of stake and it proved itself too complicated to do so so a first first VIP six four nine that pushed back the the difficulty bomb - later in 2019 it turns out 19 we weren't really yet so we push back again in 2020 it turns out recently generated a very we had to push that again so the next difficulty bomb will arrive around the July in 2021

and as we will see interests reason Tatian July 21 with the hopefully the transition to shouting and to free functioning or almost fully functioning beacon chain by then if you want to read about this and read about the the the dead ends and the progress from the the research from an industry perspective Lanphier wrote a lot about this you can Google history of Casper about this all of you or open ending tonight scoring it 2.0 design goals but luckily in early 2020 we had a the specs of each room - that was stabilized and I'm very happy to do today little little trailer of what's coming next

hmm - the highly anticipated sequel of HRM so without further ado this is what it will look like et erm 2.0 will be is kind of brush I've taken this picture of a wooden hairbrush here wooden because it will be proof of stake so potentially less less stuff on on energy consumption so more respectful of the environment so this is a wooden brush and it's made of it's made of horsehair so also natural product so keeping it simple and keeping it cool for the environment here so you can imagine that the wooden part of the brush as being

the beacon chain the coordination layer of each room 2.0 and every range of air being its own job so the shot will be a full-fledged the block chain of themself communicating with each other food beacon chain and on every child there will be a proof of state mechanism to reach consensus and this proof of stake mechanism to reach consensus will be done by drawing very detours from the beacon train to validate on the shard and to bring the state of the child to the beacon train for the beacon train to fully validate the state of the beacon train of the short train and eventually communication between different charts through the big and train itself so if

you look at it from a vertical projection you have the global route that is handled by the beacon train and you have different charts that move along and if we trod as its own short sub state and since it as it on short sub state has its own execution environment so any decentralized application will be able to move to a chart and be executed on this chart and communication will be between charts will be a synchronously done through the beacon train itself the beacon train will be a next Raider which will ensure cross communication finality and of course random number generation for the charts to draw by editors or run maybe a

fancy lottery application or whatever will be useful with this this is the rollout phases we start with the beacon train and the beacon train is coming pretty soon and we will see it will all start with the deployment of the deposit smart contract on the maintenance allowing people that want to participate to the beacon train to deposit infer to to actually do this taking then one once we reach a certain number of deposited ever-so something around the 500k effort the Brazilian is the current threshold that is considered by the HRM foundation so once we reach 500,000 also if we're on the deposit contract the beacon chain starts and in

2021 it will be the rollout of the first shop chains and cross communications between the shots so the interim one proof-of-work chain will effectively be one of the chart and the beacon chain effort that have been locked at phase zero we'll be able to move between the different shots and hopefully by early 2008 - we have a full state execution between the jars with an evolution of the virtual machine that is currently known as the EVM - version more or more advanced ot wasum wasn't for weapons only so it's eg room inside webassembly and webassembly is a virtual machine that is being developed by Microsoft Mozilla Apple I

think I think Google is also in the in the mix it's an open source which are machine with lots of optimization so hopefully it will be very easy for any type of hardware to run the virtual machine when is it once it's there so what's interesting today I think is how do we interact with this deposit contracts and my fellow panelists will get a deeper dive on the economics I wanna just make a little focus on the security and how I will be down so to be varied at all there's no not a lot of work around you need to take 32 either if you stay class you won't be late at all if you take more you will be a very little of more than 32 either but only

32 of your offer will be at stake the rest will be extra balances that will only kick in if you happen to lose some of your money and go video SATA - so the extra balance will be brought in for you to continue very data so depositing is coding a function called deposit on deposit contract da and also providing for arguments that you can read there the first argument is a public key it's a TLS key so it's a new format of signature or Vieira's and this will effectively be your validate or key so the key that you will use to validate sign the block that you will propose or put your signature on propose blocks as to validate the block that people have

put proposed you will have also to bring your withdrawal credentials this will be the ash of another or may be the same but we highly suggest that we you use another be risky than the one you are using for gradation this will be the wizard robot key and this whisper key will be used in later stages such as phase one if you have exited validation and you want to withdraw your if we run another child you will use the withdrawn key to perform this which role you also provide a signature to validate that you have inputted all the data right so you ash everything in the deposit data root

key withdrawal key and a couple of version parameters you have everything you sign it with your validation key and that creates this signature this bytes 96 for the template contracts so you put everything inside the deposit function and the interim foundation has been working on the cool UI to do that and many many providers of of nodes software of doing the same so you effectively tablet your city to offer and you start your beacon chain node and that's it you are ready to wait for your assignment as a block producer so what you have to keep in mind when doing this process is that you need to transfer ether and

precisely 32 if ur you need to create a withdrawal public key and the associated private key so with role keeper say mo for the validator key you need to create a very little keeper you need to deposit this if ur once they have been deposited they cannot be retrieved so there is a there is a strong locking aspect to this and unlike other proof of stake chains the the user cannot delegate any term - in fact yeah it has been definitely designed to make it hard or almost impossible for you to properly delegate if you want to delegate you we need to trust the person to properly Endel - with all the B key and if you want to

exit the validation process you need to sign a message with this reservoir publicly so we've been working on on different workaround for this for our clients for a b2b client or b2b b2c client that are interested in participating into the the validation process but there are no there are no real solution or there are no best cases are your best best practices yes but we definitely working on this as you might have seen in the presentation there is the withdrawal and the validation and the very thing he is kind of a hot key key that is need to be requested for requested for signature from time to time by the by the by the node so it has

to be kind of hot or kind of be kind of you know available for signature on the flights and the residual key itself is really meant to be stored in a cold place or in a hardware wallet so what we've been working on at ledger is creating the capability for generating and signing with the skis and we recently proposed a firmware update for the legend of X and if you read the the changes roughly you've seen we had in the cryptographic support for the Vieira's 12 381 which is the curve for the signature on material so we are getting ready and we don't want to kill the bear before to sell the bear skin before it's it's killed its killed but

we are working on that and I hope that we'll be able to announcer terrific stuff pretty soon so on other proof of stake chains but we've done is creating a validation validating application so the application dedicated to the variation process on proof of stake chains so you would store your very dating key inside your legend I know and plug this legend I know to your no to your hardware that you used for validation and you will be able to request the signature from the key with an additional layer of protection like if you were to sign something that is buggy or that will lead you to to to being slashed or to being to lose some of your steak maybe this application will be able to do a couple of checks and

prevent you from from buttering yourself to the network so we will be also working on that but have nothing to announce for sure yet but that's definitely things that we are we are looking at and yeah so when I said that it was hard for you to delegate it's on the other on the other hand it's it's easy to run a note so that's a screenshot from from last May when I first started my interim to note this note runs on the coin 9 you have you have you have two specs here it's really not cumbersome for the RAM it's really not cumbersome for if you use a razor and and it's fairly easy to install you

should check it out look at a look at a tutorial on how to install each from two notes I'm working on the version for interim France in French and you can run it on the Raspberry Pi 4 so it's really meant to be accessible hardware the only drawback is that the order to configure us to run all the time of course because you need to be connected and ready to worry dates but if you have not computer from 2012 or 2013 it should be enough for you to run your own note here so here's the timeline that's the burning question when interim - is it a good time to invest you is there is the delivery already priced in and so on I let my fellow panelists answer this my my personal take on this is that July

August September we are still run the multi client test net and maybe September maybe October maybe November we will start the first steps toward deploying the beacon chain with the very first step being the deposit contract published on the each ROM one chain and 2021 to 822 for phase 1 and phase 2 respectively so if you don't know if you are it's a good time to invest or not at least you can profit from the rollout I invite you to check it out oh man that adds that link or use another one short URL that eighty / hi hpx those are prediction markets where you can bet on the fact that each room will launch at which months or will the develop contract be deployed or not or

will will the phase zero linked compete all out and start at the beacon train happened before three to one you can bet on it by by a token representing a yes or no and if it turns out that you were right you will have a payout and fully slaughter the one with the blue border is one I've studied myself and I bought it yes yep and that's all for me happy to take any questions thanks yes thanks very very much Jerome for this great presentation there were several question on the chat so I'll pick the one with with the the the most like we cannot unmute you if Jonas if you you are asking if you have

the 64 ether is taking down in two separate contracts so the question is how will the the smart contract be actually design is it wrong let me get this one 48 so if you have 64 you need to do two separate deposits on the same contracts the deposit contract is one single contract that everybody will interact with so you need to make two deposits each of the two differ to this specific contract with each time a difference vary with validate or public key so you will have to generate very little public

key for your first deposit and generate a very big if for your second deposit so once you have done this two transaction to deposit each time so the two differ with two different buried a top ability you will technically have created two very details on the B contain okay and just a small question from a technical thing yeah we'll eat here um 2.0 keep its promises I heard Vitaly was talking it could scale up to a hundred thousand transaction yeah would be able from is it sound technically speaking it's a yes-or-no question basically answer will

be yes what we wanted to advertise yeah yeah I'm pretty sure it will be yes okay because because every every shot have its own execution environment so have its own limitation but you take you take the outputs of you take the better way for which I am today and you multiply it by 64 you already reach super high numbers and if you on top of it consider that we have order of magnitudes more volumes because of new new cryptographic technique that we introduced on interim - thanks to BLS notably or takes things

to roll ups also I think it would definitely keep its price yeah we already observe very high throughput on layer 2 solutions or on roll-ups on et Ramon and so those are MVP stages and once integrated to 280 rome 2 shots it will have the full-fledged power what's been advertised yes ok thank you very much Jerome will no pass to the second the second presentation just remember you can always interact with the chat and if you have any question you will be able to also ask your Jerome at the end of the present

the presentation may be 30 minutes the I will type the answer for the for the remaining questions yeah sure so it's now time to introduce you to mr. Alexander Bernstein Duke so Alexander is a professor of economics at the Faculty of Business and Economics at the University of Basel they have a specialized center of in crypto currencies and he specialized in monetary policy instruments and especially on blockchain and crypto assets he's a research fellow at the Federal Reserve Bank of San Luis a technical advisor for the BIS and he's a member of the Advisory Board of somatic equity funds for credit risk asset management

he studied at University of Basel burn and the LSE and he held several visiting position on world the world from California to Switzerland he maybe you can begin your presentation right now he will speak about the economical aspects of this if you're 2.0 so you have the floor ok thanks for the invitation as you said I'm an economist so I'm another technical guy here but I looked at the transition from eth1 to ETH to from you know kind of investor's point of view and you know what the first thing that

came to my mind was a tightrope walker here I have a nice picture actually I think it's a very very delicate transition from a technical point of view we have seen some some of the aspects before but I also think from the traumatic economics point of view is a delicate transition and will be interesting to see whether it succeed so what are the risks the risk are kind of obviously the technology risks the many delays that we have seen is because apparently it's less simple to do than probably people thought initially there is a threat form from competitors and

then there is a threat from regulators which they're still trying to figure out here at the BIS and other places how to regulate these assets and then of course there is this taking economics as this is another kind of risk you know good I designed incentives correctly so that people are actually willing to put up their editor and I will mainly talk about this today so we saw the transition but I want to just replicate it very quickly you know basically there are these three phases phase 1 phase 0 is the proof of stake face there's already there is a question mark I mean it was just recently discussion whether they want to delay it

to next year but now they say no it's going to be this year then there is phase 1 shorting there is no date set as yet as far as I know and for phase 2 I mean you can look at their official statement phase 2 is still actively in our Indian does not yet have any formal specifications so there's a lot of uncertainty and the way I understand it only once phase 2 is in place you can actually use that theorem to the way we use a theorem today maybe I'm wrong and it can be collected on this one okay so Jeremy also mentioned this so if you want to become a validator you need to deposit 32 either into a deposit contract and

it's a one-way transaction so the funds are log onto phase 1 once phase one kicks in you actually can use your own also talked about this number and before phase 0 can actually start you need at least 16384 validate this is roughly half a million either staked I don't think that this is a big hurdle because I believe that people will you know they're enough kind of back holders that will put up key settles you know because I mean this thing can't fail because if this thing fails if Hume goes

in my view is going down okay here are the incent if the stay key rewards this is from the more or less official web page some estimates I think they still are able to tweak these numbers the current nom stage they put up and what you see here - you know at our validating for if two different amounts of enter that I'm going to validate this phase zero you see basically to the right hand side here you will see you know what is the expected return if kind of 1 billion either are going to validate is 18 percent here you see suppose the three million either validating so typically

this number is less than actually the at stake because somebody might stake and then not validate then the the return goes down to 10 percent and here you also see the kind of contribution to the growth of the supply of other and it's actually pretty modest this point one seven percent additional supply to the other thing from this staking process good as a stake of course you have some cost most most of you know that computing resources maintenance cost there is some risk recording risk I mean if you know even the deposit contract it might turn out there is a mistake or

something you that you never know security risk class slashing risk etc now I think T from the point of view of an economist I think the most critical part is actually the opportunity cost if you want to okay you have this kind of costs that you have you have to assess them and then compare them to the return the expected return that you might have and but you also have to think about you know web I mean these 32 others I could also invest in some other you know project unchanged for example and Jeremy also mentioned that did explosion of defy thinking about compound highway and so on I mean right

now I don't know what is happening in three months or six months but right now you can easily get 18% if you if you look at all of this you know measures to kind of earn interest on your other then of course there are other chain again this is the you know the competitor failure there might be other change where you can also earn some money I don't know he's changed but I guess they baby and then off J right I mean off Jim basically means you can sell the other get some US dollars or euros and then just go and buy some stock buy a Tesla stocks for example good so I mean this is this is the overall things that you

have to look at and then to decide whether you want to invest what I have what I show you here is just two graphs and I didn't produce them myself it's from cryptochrome but basically it shows you you know kind of a risk return reward that you have from from staying these are different ways that you can stake and define and basically plot that this is to basically earn some money on donator and when you think about staking Heather you see you basically taking presents that will be here but now it's very

difficult to assess you know what what is actually the risk of the staking you know you know the probability the whole project fails and you know other risks that you have and so so either you are going to be on this side here or you're going to be on this side here so if you are on this side of the of this curve here basically means you take more risk then you get compensated forward in terms of a return if you were above you actually receive a higher return than actually the risk that you take this graph is without taking into account the volatility of prices for example the voltage usually at the price and this graph here to the right it is

basically the same graph but it takes into account the volatility of 50 at the price okay summary I think for me basically there are two major issues is illiquidity you know once you move your edit with the post contract they are locked for kind of undetermined period of time we don't know when phase one is coming even the history of delays that we have seen so far I would be very risk-averse here and then of course then the other costs that you should look at is this opportunity cost what else can you do by investing look at the current unchain

earning opportunities and my overall assessment is really that I think the staking returns are modest in my view there are little bit too modest even though I know that in this kind of community there are many people that don't do this just for the money they also do it just you know because they are interested in doing these things nevertheless okay so that's but that's my assessment you know from a purely you know economics it investment you now that's another thought that I have you know and I think that project could fail there is no I mean I don't know the

technical parts of it but I think he could fail as this kind of scatterbug actually failed so luckily he survived because the parachute he made it later I guess he made it later and so the questions a little bit has a few many parachute here or what do they do if they you know don't take me wrong I mean I'm really a big fan of this project so I wish them good luck and I mean just for in order to prove this so we invited the victaulic like two years ago and give him an honorary doctorate at the University of in the middle was probably the first one without the time so we are really

sympathetic toward that project and we really wish it the wish it good luck that's my presentation acts up for listening thanks a lot Alexander for for this amazing presentation I think the the parachute was very talkative to the audience there is there is a question from an grace considering your opportunity cost isn't there a risk of too many people sticking through taking pools rather than on their own and thus a risk of concentration similar to one that emerge of a time with proof-of-work in a few

words will it be the this 32a theorem looks like anyone can afford to be a stager and be part of the consensus mechanism but in the end will it be a game of the of the the whales as we see right now in being the Bitcoin mining which became an accessible actually to to the the small actors I think it is I mean if you have really skin in the game in in your theorem maybe they will try to do everything you know that for this project to succeed and then if it's necessary to stake we are going to stake but there are many ways you know that they just have a lot

of money they have no no feelings for for a project if they say and if they see actually didn't know you know that thing might is a small chance to not succeed they are not going to do it they are not going to stake it's just a very it's kind of a risky risky project there you cannot even calculate the risk you know it's not like a price where you absorb the volatility of the price in the past it can make an estimate about future volatility of the price and price it a mean some pricing formula that's a risk if I I wouldn't even know how to calculate okay so thank you there is a there is another question but I'll

propose that that we take this one in the open discussion we might have in in 15 minutes after Martin has given its presentation so Alexander Martin if you can yes you open thank you very much Gabrielle and Alexandra and children for your insides I'll explain a bit my ideas I don't come with the formula have to infer the presentation I know you're very well known that everybody knows I think in my opinion just I mean the question you asked before to Alex and I think this is probably also in my opinion a good idea to have owned it to meet you need only 32 eaters to also to

validate that this because this just also prevents that whales are getting to import and I think it's important to have a quite low threshold to come in as validator like this probably it's much larger community will be able to play this very important role and to risk is probably it's a risk diminishing to have this threshold not too high I wanted to discuss now about the possibilities and the risk which we had in the market now and in the DfE market I think it's very important that a theorem which plays a very important role now functions well

and I understand also that now this upgrade which is planned 3 theorem 2.0 that they really have to get it right I mean it's very difficult to engineer this it's a very complex task and we have to bear in mind that there is no corporate organization or a structure I mean it's it's it's it's a bunch of independently engineers who have to do this together and I think and what we have seen in the crypto market in the last few years but also in the last few months I think security and risk team innovation is one of the very important task to fulfill otherwise mass adoption will not have and if if there is always

the risk to lose your coins I think people will just stay in the legislature like legacy systems and will not be willing to switch over to a more decentralized eco system and in this opinion from this point of view I think it's very important to get it right it's better to be of course it would be great if we would have been great if we would already had now end of tune first like this beta chain now to be open but still I think security first that's very important in the current environment

when we see what happened now in the last few months and years I think we have to look to the defy market I think it's very interesting and we saw how much it's all in the last few month TV in QT q to 2020 sort a lot ether the ether locked for transactions sky rocked and we had I mean it wasn't increased attention towards revenue created on different tire with different application and in my opinion if we look

back q2 2020 will probably be looked as the tipping point in the rise of defy and therefore also on ether I mean I my opinion if I has the opportunity to really revolutionize the financial markets and to enable much greater global access of applications with remarkably low fees we always have to keep in mind that still a large number of human beings do not have access to financial markets do not have access to

shares and other financial instruments and I think here III theorem and especially theorem 2.0 will have an important role to play if we look back now in the 2020 we saw that all right in q1 we had we have reached the milestone of 1 billion or react people and of 1 billion USDollar were locked into d fear defy applications afterwards with global financial downturn due to covet 19 we had we had 50% downscale and and now we're back up

at 2 million deposited in died in DV applications of it's quite tremendous I mean we have quadrupled now value in the last few weeks in my opinion there is really lots of innovation going on and if I will have probably I mean hats in the last free month more innovations than regular financial legacies did in the last three decades and it's also important to bear in mind that in May the amount of bitcoins on the theorem surpassed the Bitcoin on the Lightning Network on the layer to scaling network

of Bitcoin so I think also even for Bitcoin transaction ithi room chain has a very important role to play nevertheless as I mentioned before we have to keep in mind that even with defy also there were many risk I mean we had balance of 430 30,000 US dollar were drained out with llandaff taught me 25 million u.s. dollar were stolen fortunately the team was able to renegotiate with the thieves through that these coins were reissued but still I mean we have to see there is still many risk associated this and before but

that's what I guess head at the beginning if that's how I end also my presentation security first we have really to make sure that people can trust that their coins will not be stolen that they will be in their position that's why the quality of he theorem two points view is absolute key for the success of the whole blockchain environment before the future this is the one thing and the other thing which is I think very important is also that interchange the cross chain

compatibility between these different coins so that we can really create the market which is easy and fun and and safe to handle and I think if if this will be achieved I think then there will be the masses also mass adoption will be possible thank you very much Martin still we have a question from Shahab I guess it's a user name well while launching an ICO will adhere Oh 2.0 will maintain the same sanity while defining shareholding agreement

through circle plant to true small contracts please explain them I mean I'm also I'm not an engineer I presume that yes but I cannot I mean I cannot confirmed is how the design will exactly be maybe Shalom will be better qualified to respond to this question but I in my opinion I mean III III 2.0 will create new opportunities and will not reduce the currents or the possibility which we had already lithium and so I in my opinion I mean there will be more

possibilities and not less possibilities so today indeed the the relativity room - won't affect the state of the contractors being deployed an interim one so if you have done a nicely on interim one and your token or interim one and each room - because life's already you will still be able to use your your tokens or on the each room one change and in there are migration plans that are being time being evaluating related for people to migrate from one chain to another so potentially your smart contract this one of your IC

o---- will want to migrate to another child but don't worry your friends will be safe the sanity of the balances will be kept for sure so maybe now that that Martin has done its presentation you can yes we can all join to this to a panel the to the audience you can of course always send your question now is the time so Alexander you can come in in the panel so we can discuss the four LS thanks to the question of the units for now so if I understood you you are completely the three of you we have a solution that is technically technically sounded that makes a lot of sense we lots of thoughts about it many

experts I heard how many expertise they're working on the project over thousand of something like that developers an expert Jerome maybe you know it while we are at the range of three hundred thousand three hundred well yeah trend right would be will be a good number or for clients that are liven up in the same destiny so that's all the engineers of those four clients maybe 10% of our clients press all the researchers and developers am I being trained right is a good but even though the easier is is around two hundred and ten euros right now the economists and the investor will say no defy makes more

sense from an economic standpoint that's what I got from from from this so your bed will be rather on the defy aspect rather than than in the the staking which will be actually another way for Wells to to make money so it's a the mining process will will still be well no story I don't want to monopolize the the mic here so I'll try to be quick today if you want to make money on define you need to be able to move around something in the tens of thousands of USD because every transaction cost you fixed costs and

this fixed cost will just eat up your your your yield if you want to define so if you're not a whale you were probably not benefiting a lot from defy but if you have lots of money and you want to play around with liquidity providing or all you yield your farming and so on there are many application it's great I liked what what has been saying on this on this panel notably on the fact that not everybody has access to to financial derivatives and that's amazing because now we have a synthetics for example that it's you get an exporter to Apple or to the food CEO or whatever it directly uninterrupted you don't have to be able to drop an account so that that's also pretty great but when it

comes to staking if you are a one single guy with a small computer and good internet connection and you can run your note basically that's just as the advertisement is you can run your note and you will be able to stakeouts reefer and you will have the same yield as someone that will take multiple potatoes and the whale that runs tons of very dead or the problem is that he or she has to run a ton of notes as well because if he runs all the way it's also the same note in this very single node goes down all the very details that you run on this node will be affected by slashing or loser or lose some of the money that is at stake so the the greater the amount at stake

the greater the risk that you could have on running one single node and running multiple no it means that you would have multiple equipment to provide later so the price goes up in terms of cost it gets clear flow for Wales and so I expect people to just live there if you're on an exchange and say to the exchange yeah well yeah not my e4 for three months and give me some yield on the on this Alexander you mentioned crypto comets it's one of our clients for the custody to be custody a technology that we sell at your vault and in they are offering already today yield on ever if you lottery for on a centralized exchange and that will continue and I expect all the exchange

to propose a yield for sticking and tell their customer just lock your in for on our exchange which is a boon foliation right okay that the the liquidity will remain there and and we can also let you withdraw even if the phase one is not there let me take a discount of what you that will be applied at the actual video but they will run away the risk on the on the infrastructure that they have because if their infrastructure goes down then everything at stake will be affected and it will be publicly affected also because you know we followed there is a big concern Explorer run by each s can so you can already play around rivets so the risk people in the centralization power of the

sensation effects is it's not clear to me and I expect many people to to be their own very data as when we started the etrem chain with proof of work made of GPUs I've seen hundreds of youngster with a couple of GPUs from the gaming computer and why don't you just play around and get some air so if so I expect the same we were lucky we can have an answer for martinandheike stand there and then I will switch to the question I have not forgetting forgotten you guys maybe you want to resign what I believe the lower the expected return is the more decentralization you will get because because then basically the real you know

the tech guys the young guys probably don't have that much money they have some either but they really you know have their heart in the project David will do it if you put too much of a for return I think then the big ways are coming because they were this fantastic opportunity and I'm coming a little bit disagree with your assessment of T I think you know if you if you run a lot of nodes simultaneously I think you also have the money and to invest this properly and maybe and say ok and I I really buy some good hardware you know so I think I don't think that running more nodes is more risky I think it's is it less risky at some point because you

you you you have you can expend more because you make more money you can invest more in better Hardware maybe maybe to two remarks if when we start to become train with a five hundred thousand if our expected return will be around 18% and as as the number of infrared state goes up the expected return goes down so that will be an effect you say to the Wales well if you were looking for 18 maybe you get 18 in the beginning but you won't get 18 in the long run because more people really I mean you have to when you do the stake you know you basically have to form expectations about how many others are

coming in absolutely when it comes to other to be to be more precise you can run as many very details as you want on the same note so you can have the approach of having I have a beefy node with a beefy connection and happy with it that's great but if my DP node goes down all my very details are affected with the downtime and may lose some of their balance because of this so when approach would be to say I have one and I'm gonna run ten notes and put 100 very details on each of those notes if I put all my very details on all nodes so having all the very details running on all the nodes there is a high risk that one of the nodes react to the same thing at another nodes and there is no backup

plan with one thing done and the other coming up and eventually I will sign two thing at the same height so I think my my notes contradict themselves in Indiana I may lose a lot of money for doing that so it's highly this isn't device for people to run the same validators on the same note so distributing you know you're very detours among multiple nodes will be an approach but in the end it's it's it's really risky and you have to find the right balance between your hardware expenses and the yield that you would like to give the floor to to the to the audience where they are pinching us with with some some question how is the return on staking the determined is it

hard setting a sir or is there some dynamic algorithm deciding this and the risk return analysis must have the sticking timeframe determined before many will stake it's a question from Alex I think it's more it's more linked to the economical so how can we analyze the risk return and and what was the first one oh it was it was deleted anyway so it was about the the risk return analysis and how this the return will be determined when the victor is kind of clear I mean a surety the figure the problem is the risk is very

uncertain is relative to the risk main risk will be you know that you are you might be locked in and you don't know how long and the other risk will be you know maybe that thing never materializes I mean I don't hope so I pray for for forever to you succeed I - I think it's a fantastic project but I die percent still I mean in my opinion either I mean if you have if if if you have to see risks in this market and we have risks everywhere steam we play here I mean III is the big boy in the game and it's like I mean also Apple has risks it's the big boy in the tech sector and I will compare III

maybe to Apple and so I mean of course there is risks I mean we don't know exactly where the mayor of markets had to but still it's proved during the last five years in this game and I think this is the one thing if the other one is I mean the more staking happens this is also sign that more and more people believe in it and that's why the revelation will go down and this is also so I mean it's like all the more people are play playing became the last time or the mass less yield you will get so I think I mean from the design perspective

I wouldn't see or I wouldn't have a better idea than the one which was which was chosen okay we have some question about defy as you guys try to to acknowledge for the opportunity that exists there we have a question linking to defy how do you first see the potential of deals on ET rom 2.0 and where do you see that intersect with defy this is the one of the first question from Santosh so di O's intersection with defy on the theorem to Pune you know maybe you have a great response here I don't see any specific

benefit for da OS thanks to interim to accept the fact that it will probably push the gas price super down so maybe it will be less costly for for people to use the eos and that's the yeah but that's basically only they own the only benefit which 440s internship yeah I mean IIIi share this that I wouldn't say I think it doesn't really matter now else I mean seeing now economics I don't see really very much if it doesn't make differentiation if it's dia or or or or or anyone else you know taking advantage

of new infrastructure even of the current infrastructure so I think I mean the more adoption we get the lower the transaction fees will become the more Easter's will be locked in the more probably price of Heath will go up so maybe maybe one thing we will start to see to see new offerings on staking pools and maybe organizing the fashion that it's kind of a Dao like you can use take four or five if you get a you get staked taking down talking and this

taking down so can you can you can get rid of it against the yield that the present hasn't really been able to move yet or this kind of thing like that I'm pretty sure people will come up with crazy ideas like this but it will be it will be a new type of Dao but things that we can already do now and the way to benefit from from from from to you right now is look at prediction markets those are run by downs as well so they already everywhere there are agree with you like it's it's the same infrastructure that so there's no there's nobody low hanging fruit you to pick up here for in term two and then we have Robin he's he proposed to to

summarize a little bit what the economists said they say he and he proposes his vision he says that stable coins will drive defy that will drive the ETH bail value up and will decrease thus taking risks has hands increasing interest in staking increasingly quality and he asked for an Archon Alec Alexander to kind of react to this formula so stable current driving defy driving et everyone value and decrease instance taking risk hence increasing interest in this introduced like I was very hard formula maybe a budget or it's probably this is

you know this was also this person probably talks about that right and there was always this claim stated was driving the bit called Christ oh you know and and there and I just don't believe it there is look at this the market size is so huge and there are so many uncertainties and other things you know building people's belief changing from day to day about you know how this is going to pan out into the future that you know just creating a couple of stable coins it's not going to drive that price and a significant in particularly stable current slide like the high or other where you actually have to put up collateral tether maybe a

little bit more because you don't even know whether there is this thing is just created out of nothing there is nothing behind it but for now I I don't believe that stable corn has a significant effect on the house okay I think I think the stable coin they were very important because it's a gateway to get in and out of a coined of an investment I it's the same thing as if you go if you buy and sell shares go into fear up and you go out of Fiat so it's a absolutely indispensable tool for the market but it's not an investment object itself it's like holding cash I mean you have certain risks maybe do you believe the

bank where you have to catch that it will pay it out one day or not this is more probably the same assumption of which you have to make if you invest in in USD T or in theater and so on but and so it I think it's an important tool but if you go long on something you won't go into a stable coin because there is no value proposition for the future so I think it's an important tool it's without doubt the market would not work without having this gateway but I think for long-term investors who believe into a project it's much better to invest into being associated directly in this

project and in a coin which has a value proposition tend to go just into a stable coin which is linked especially to a fiat currency now totally agree on that definitely the double coin are a wonderful tool for adoption of different and and and and if you were to look at what will drive the price of ether up I would look at E I P 1559 we working of the fee market on material that would lead to burning if or every time a transaction is done then we will create the link with with stable coins one of the most gas using contracts on atrium is right now desert

so if desert were to burn if for every time the treasure transfer was done then for sure it will drive the ether price up instead of rejecting the ether that was used to the miners and I hope that this e IP 1559 will be soon canonical so we can all benefit from the rush on the oddity file so here here I would have actually a question so jerem what do you think about the probability that this is going to be implemented because I think there is some I think the miners or something or somebody doesn't like it I don't know who here has been pretty tough with the miners all the time but so far the miners have

found themselves happy with the changes so and they have a good good good stack of ether I since they get paid in effort so I I personally I did I did it donation on the implementation found of this of this IP you can check it out on get a coin you can contribute to to the fund to implement the CIP I am pretty sure it will be implemented and I'm a pretty sure it will be implemented before 2021 there is also pollution market for this hope so also because it will definitely drive the the gas price down and let the the network be used by wider audience than today

where no small transfer is actually forecasted I think it's in the interest of the ecosystem also to have quite the heart stands with demanders of course miners are very very important players but in the end it's machines behind it and I think it's it's it's important don't long wrong that we do not have too many whales in the whole ecosystem because whales they are probably the biggest risks for a coin because I mean they can basically influence the market and that's not where we want to go we want to have a transparent fair market

and we want anime enable people who have difficulties to access to financial products so they are also even in Europe or in the US where we have we paid too high costs - let's say Viva these are MasterCard our banks etc so I really see the opportunity now with eater revolution to revolutionize this market and to to lower the costs and to you know to bring down the hurdle and the threshold - for normal people to access the financial market and specially if we look at our current times it's very difficult for young

people to to build the financial resources and they are basically excluded of the current market and that's why in my opinion also we have an increasing differentiation between people who have money and other ones who do not have and I hope and I wish that now at this new markets will have the ability the ability to disrupt and to to bring a fairer and better system on this planet give me the opportunity to to reach to the two last question of this session that has been one hour and a quarter

right now one of the question is is actually a regulatory one a legal one what is the regulator's reaction to ATM 2.0 so I think it's more directed to - Martin yeah I mean now it's not live so we will see what happens I mean in my opinion I think we just quickly discussed it before and of course is it the security or not I mean this discussion was already held with with the theorem one point zero in my opinion it won't change because it is the same structure of course this is always very much dependent on the country where you

living in because the financial market regulation still is something which is a subject to national laws or maybe the European Union etcetera but from my point of view the amendments from ether two points a tweet the two point zero two should not change their legal qualification I don't expect any change okay and the last question of this panel I think it's it's a good question because it's it's kind of bring bring the legal the economical and the technical together canif is a phase zero Drive the beginning of a new art season with defi tokens being emitted all the

time so at the same time you know more jobs lawyers more technician and more job for for financial economists what do you think of those guys okay let me say something I believe that I would put Bitcoin in a theorem in the same league so everything else is alt if a theorem is going that's going to create a alcone season for sure yeah I'm sure they agree of this so it's as the president of interim friends I'm clearly in territorial so III think that the delivery of interim to will be at the start of the new phase of the market

where we realize that very ambitious project can be delivered and not stay at the whitepaper stage for quite some time which will lead to a new usage of the Ifrit token and probably a start you rarely I'll need behind the terrarium and then just flow to all the tokens and also change that will be like a year diversify and put some of this it would say suppose it succeeds oh yeah but we don't have even even some others right I know I don't see it not succeeding because whenever we have a problem we fix it on a tea room I mean we have to be a little bit self-critical

- I mean you just look at all of your announcements I mean this no there's no complaint from my point of view because I am not helping you know I mean it's not from the outside it's not so clear that you're going to I don't know it would be a failure or like here we deployed a big country and we realized that oh there I'm the communication between those two clients is really bad and it leads to a super big bug well it happened before I care it happened on Bitcoin it doesn't also change that we do hot fixes we do a Forks to correct bugs and we factor on some problems that we find along the way and and we fork and go back to things that were put in

blocks like for the for the dog hack for example we have done it before so we we clearly made with the fork down not taboo anymore in the Russian space so I expect that problems will come up but we will deal with it and make if you run to a success whatever the whatever the problem we faced I mean we don't see to the few we don't see to the future we will see what happens I'm also strong believer I mean still be theorem has a track record of five years it's a success for a story of five years it's I mean was enabling so many projects with either with with also year C 20 tokens

and I think this was just the beginning and if we look again I mean I told this in my presentation if we see what happened the last six months I mean we had 1 billion u.s. dollar equivalent locked in to defy create q1 we went down to half a billion now on 30th of June a pair we're back up at 2 billion I think that that's that's first of all on its it was a stress test which was successfully managed and handled and there are no guarantees for the future but I see lots of opportunity if I would have to bet I will bet on the success okay so I think we can end up and wrap

up this session with with this comment I'd like to thank that the the speakers it was very interesting to listen to you guys who have your your advice that's are very complimentary and I would like you to Thanks also Jerome byyyee and Nicky X Annie and also all the team did the committee team from the crypto various sessions are organized into to helping you to to really be able to present you with with such a quality panel of people on the internet for you so very much a good day