EthCC Campside Chat: Protocols, Ecosystems, Community & Tokens | Vitalik Buterin & Christopher Goes

Transcript

hey everyone got a fun little surprise for you today we've got a break from our regularly scheduled programming we're going to be airing an episode that I did with vitalik and Chris goes of anoma which was the final interview of the intense discussion day at ECC this year which was phenomenal huge shout out to anoma for putting that on uh we're going to be airing a couple of different ECC related episodes to give you guys more of an on the ground view into what was going on at the conference we we still have one more episode for you on the reaking season miles and I are going to be airing that next week I promise that's going to be great um but for this episode I hope you guys enjoy Chris and vitalik are two of the most Visionary protocol designers in the entire space

and this was a really fun endgame discussion around intense protocol design and a whole bunch of other interesting stuff so again thank you very much anoma uh for putting this entire thing together and hope you all enjoy hey everyone this episode is brought to you by namada the shielded asset Hub rewarding you to protect the multi chain so not only can you protect your own data across any asset and any chain but you also get shielding rewards for strengthening data privacy protections for everyone so you can check them out at n.net and follow the domain net launch stick around you're going to be hearing all about them later in the program hey everyone this episode is brought to you by Kinto the safety first L2 which is accelerating the transition to the onchain financial system they've got some very cool features like user owned kyc and Native

account abstraction which solves a bunch of the onboarding and bottom back problems that many L2 suffer from so you're going to be hearing all about them later in the program but if you want to learn more and better if you want to join their launch program engine nen you can click the link at the bottom of this episode go check him out tell him I sent you all right everyone welcome back to another episode of bell curve before we jump in quick disclaimer the views expressed by my co-host today are their personal views and they do not represent the views of any organization with which the co-hosts are associated with uh nothing in the episode is construed or relied upon as Financial technical tax legal or other advice you know the deal now let's jump into the episode really excited about um the last

campsite chat um the topic is protocols ecosystems community and tokens um actually the first time these com sets were discussed in public outside of uh the work we do at our team was at the bell curve C podcast um that was hosted by Mike Pito from blockwood and I I find I find it really exciting because after that podcast this concept actually stuck I heard that Mike actually did mention use the same concepts with the same definition in other episodes well so yes please Mike thank you for joining us today and uh take you from

there awesome thank you uh I appreciate the kind words there and that shout out to the belr podcast I I learned everything I know on this topic really from from the team at anoma so huge credit um we've got a lot to cover today and I actually want to use this discussion as an opportunity to widen the aperture a little bit uh and zoom out and discuss how this uh this new paradigm of intents is changing the way that we think about uh blockchains and protocols and communities um but maybe we could just start with a super quick round of intros from our speakers here uh balic on the off chance that there is one person in this room who doesn't know who you are uh could I pick on you to go first here and give yourself a quick introduction then Chris if we could go

over to you sorry I didn't hear the question well oh I I just uh I'm not sure sorry can you hear me now introduce ourselves right yeah I think you can make yourself like 20 DBS louder I'd appreciate it um I'll try to yell okay so the question is introduce ourselves um yeah yeah so um okay so I uh I don't know I mean I I have a Blog you know v. e. limo I have a GitHub so if you like discover that the blog sucks you could go to like GitHub V and blog and then you can actually put PRS to the blog and like make help make the Vlog suck less so people have done that occasionally with typos that encourage

more people to do it um I mean if you want to make a PR that just deletes the whole blog because you think it's that negative to society you could do that too um you'll have to do some convincing to get me to accept it um I know otherwise like I me to dabble in this ethereum thing um you know yep um I I'm Christopher I also have a Blog actually but it's harder it's very hard to spell which I realized was like a shitty marketing decision and occasionally I end up in a position in Germany where I live where I have to explain to some person in the bureaucracy how to spell the word plur enmity and every time I just curse my life U the blog is plur anim.gif to your GitHub to delete your blog you

should make a PR to my GitHub that like adds my private keys back so I can claim my 200000 eth that I bought with Bitcoin then moved cross country and Seed phrase bye-bye yeah so balic let's see what we can do about that maybe we we'll take that offline though um all right guys I've got a I want to like I said use this as an opportunity to zoom out here a little bit we are now 15 years into this crypto experiment with the creation of Bitcoin we're about 10 years into the ethereum experiment um and Anova is we're a little bit newer but it's a very promising start and you know over the years uh balic that blog of yours that you mentioned has gotten a lot of eyeballs and it sparked a lot of discussions within the community and I would love you to maybe put your

protocol designer hat on here I know ethereum at this point is extremely decentralized but if you could just give us uh sort of a history of your thought process when you're first creeting ethereum what were some of the core design philosophies that you thought of back then and maybe with the benefit of hindsight what what are the things that you got right and developed largely in the way that you thought they might and then what were some big surprises to you or things that might have developed differently than you expected or you had the benefit of hindsight what would you maybe do differently yeah so the way that ethereum originally started right was that I was working for some of these other um you know like what were originally called Bitcoin 2.0 protocols back then things like covered coins and mastercoin and I eventually had this

idea that like the best way to increase their functionality is to add in a general programming language and uh at at that point I just realized that like actually at that point you might as well just replace their entire protocol with a general purpose programming language and I suggested this to them and they were like yeah it'll take a while before we get to an inner road map and then I realized that like they didn't get it and I started doing it myself um so then I think like this idea of a general purpose programming language was like the like very initial core like the thing that uh like made ethereum be what it is as opposed to being something else I mean but at the same time there obviously a lot of other peripheral design decisions that were made too

right decisions around you know for example the currency Supply that was uh originally you linear growth um around having an Asic resistant proof of work algorithm um around having the ability for like miners to vote on the gas limit instead of it being a fixed number um like actually um a whole bunch of things that we're basically saying like don't make the mistakes that Bitcoin made that was like actually a big like generator of uh ideas near the very beginning um one of the other things uh that I wrote at the beginning was of course the white paper right and the white paper in addition to like having protocol details it also listed some use cases right so uh the very first one was uh issuing

tokens uh but then there was uh stable value assets Financial derivatives uh decentralized file storage markets that was a fun one that was in there parametric insurance and then like the list a Dows and a couple of other things and uh I feel like um most of that list got tried at least in some form or other I think uh I mean probably the decentralized storage Market stuff is like probably the one that kind of uh disappoints me the most uh but uh you know who knows maybe it's still possible um the one big surprise uh I mean nfds were a big surprise I toally wa did not expect nfts um at all um in terms of uh like more pure technical stuff I think

uh I mean there were a bunch of Errors like uh the 256 bit VM um and I like various other smaller decisions I mean I think uh doing KCK was probably a mistake there's like smaller things the um one of the bigger overarching ones I think was like basically yeah not like underestimating development time like I think if we had a clear picture of development time we probably would have like kicked out uh the like four out of five less important things in the road map and like focused much harder on getting a much simpler proof of stake done and getting a much simpler

scalability solution done um so uh like that's definitely something that we've learned from over time right like the like we've done a much better job of like focusing on what's actually important since then yeah Chris maybe I'll I'll kick the same question over to you and I know you were integral to the development of IBC so I'd like to you to talk about that in a little bit but you also and I apologize because I called on you in the spell cve episode to talk about this as well but yeah it seemed there was a lesson that you took away from the the founder of signal give a talk Moxy Marlin Spike about the uh prosen some one of the drawbacks of Designing decentralized protocol so I'd love if you could actually just read itate that again to the audience and then maybe how

that informed your entire philosophy of protocol design right I'm I'm very happy to do this so the talk in question is a talk by Moxy Marin Spike I believe it was given at 33 C3 you can find it online and it's called the ecosystem is moving and basically the talk was a defense of why he chose not to Federate signal um and the reason he gave for why he chose not to Federate signal or you know at the time he was kind of running the signal development or organization why they chose not to Fed Federate signal was that they wouldn't be able to iterate on the protocol as fast and he viewed signal as competing with basically centralized messaging services with WhatsApp with uh you know Services provided by Apple provided by Google

provided by these like web2 companies headquartered in California and none of those Services shared signals values of privacy or user sovereignty or anything like this they were just going to ship features as fast as possible to get as many people as possible to use their chat apps and in his View and I think that this is like frankly just been borne out by recent history um the critical disadvantage of federating your protocol is that now the social consensus to change it becomes much more complex so now in order to get a bunch of you know in order to like Matrix is may be an example of a protocol that actually tried to do this in order to make changes in the protocol you can't just change the protocol on your one server you have to talk to all of these people you have to convince them of

something there's politics and in his view that you you know Federation has he wasn't he wasn't denying the benefits of federation to some kind of operational decentralization but in his view the most important variable for signal to optimize for was an ability to she ship fasters Qui features quickly enough that they could compete with the centralized protocols and still provide the like privacy that he viewed as essential to you know their mission and values as I understand it um so that was kind of his reasoning and I think that uh that you know often that philosophy can can be really usefully applied app to decisions we make in the blockchain space in particular um once you make a decision to launch a protocol or to put something out in the world to have it transact

with real money to kind of decentralize the operator set decentralize the governance everything becomes slower it becomes an order of magnitude slower and I think there are many reasons that we want to do this like it's you know I I I I wouldn't want to give up on this dream but I think we also kind of need to balance it with a need to iterate on the protocols quickly enough that we can build something that's actually competitive with with to or with banks or with what have you considered holistically from the perspective of the user and so I I guess the what that begs the question of is is how do we as designers of and contributors to decentralized protocols ultimately successfully compete against our centralized counterparts right where

they have the efficent where they have the advantage of sort of efficiency and speed I would love to get a sense just over the years like what is the trade-off that we're all comfortable accepting here and how can decentralization be a superpower and I think that's going to bleed into the discussion around Community here but mean talk to me about your guys perspectives like okay we know that we can't just unilaterally make decisions like we could if we were operating in more of a company setting but what are we getting on the other side of that ledger like what's the benefit there yeah um I mean I think uh I mean I actually think it's easy to overrate the uh extent like to be overly pessimistic about the ability like actually upgrade these protocols together right like

ethereum has done it right like we execut like upgrades of the execution and consensus layer across an increasing number of client teams and are like getting a more and more efficient pipeline for actually doing this um I think uh kind of uh and actually think the kind of like the force functioning aspect of consensus there helps quite a bit right basically that a you know if uh the if a hard work is decided on then you know if you're at some you know the date is fixed and at some point if you're lagging then you're just like not part of the chain anymore um so I think you know these are really things that can be uh improved on quite a bit and I think

uh I like I actually think that we've done quite a good job and certainly a much better job than uh a lot of people were expecting at the beginning um I mean in terms of the uh benefits that we get I think I mean it is case specific I think if you zero in on like say ethereums multic client architecture for example right the I mean one um the original reason for this is basically the uh political benefit of like avoiding centralization within one development team right and that's and that itself is one of those kind of learning from bitcoin's failures kind of situation right you know with how basically you know the way that I

interpreted it and I think I would say still consider kind of you know bit the Bitcoin core teams a strangle hold over the protocol at the time like basically ended up uh you know leading to a bunch of uh decisions on you know things like the block size and so forth um and uh if you have multiple teams and there's like more realistic choice and like the ability to sort of uh you know like you know fire one of the dev teams actually becomes a more realistic thing um so that's one thing that I think is valuable another thing that I did not appreciate at the beginning is that I think having five parallel teams like actually gives you a lot like a larger pool of expertise that ends up being helpful in like a whole bunch of ways

that are difficult to like even anticipate right like basically the pool of people that just understands like ler one like code development issues and that's uh able to push forward on proposing ideas like much more efficient you know archive database architectures is like 5x bigger right and like that's not even a benefit I was going for right that's like a benefit that I learned uh over time so I think like that's uh also something that's uh proven to be really valuable for us I mean I would say to me the great benefit of decentralization is diversity of sort of perspectives and diversity of uh ideas and opinions and even diversity

of organizational structures like I think it's fantastic that uh you know ethereum sort of informal governance has the ability to pull off something like the merge which is still as far as I can see the most kind of complex distributed system upgrade ever executed in the history of humanity ever which is a pretty good big achievement uh but also I think it's good that there are like perhaps more centralized or just earlier stage projects in the ecosystem that are doing other things and offering different perspectives you know it's like with with Thea for example I view part of our you know part of what we should do in order to be valuable to the ecosystem is be like different than ethereum right like the world has an ethereum we don't need another ethereum we need something not only different but

maybe even complimentary in specific ways like maybe you know we've VI part of our role is trying to provide kind of a different angle to the research discourse that can eventually meld and become complimentary and even be kind of synthesized but that starts from a different position and in starting from a different position it can articulate a different perspective and then through synthesizing these we can come to perhaps some common understanding that ultimately Bridges the gap between like the theory of the layer one and the theory of the user so that's that's sort of where we start from um uh as far as concerns that question I I think the other you know the other challenge that I see here is not really you know maybe this one is a bit less related to moxy's talk but um the thing that makes it

really difficult to change is not just de centralized collaboration it's also like having a blockchain that carries Financial assets and we when you have all of this you know state that people deem to be valuable moving around they really don't want anything to go wrong and so you have to move very slowly and you just have to move slowly it's not like like the people don't want the wrong thing right they're right but on the other hand I except for the one time when you move quickly which is when you have do attacks and consensus failures true true true true um but I think uh there's something to be said for like spending some time designing a protocol before you launch it I think often the quest to make tokens liquid or something like this and the view of those you know

liquidity of those tokens for whatever reason being coupled to some kind of protocol leads projects like I mean I guess I felt this way with Cosmos which I worked on before leads projects to launch very quickly before they've kind of thought about all of the problems and then once you've launched as soon as you have operational decentralization and real sort of assets real value flowing around then it becomes very difficult to make decisions um and sort of now you're kind of uh you see a sort of plateau in terms of the rate of change so I think it would be interesting to investigate Capital structures which didn't have this problem it's not just one of operational decentralization hey everyone this episode is brought to you by namada the shielded asset Hub protecting the future of the multichain NADA is a chain that's near and dear to

my heart because in previous seasons of bell curve we've talked about how the Cardinal original sin of most blockchains is not thinking about privacy from the beginning but also because if we want to onboard a whole bunch of applications it doesn't work work in a default transparency setting so NADA not only brings about a better future that we all want but it's going to help on board a ton of new applications so NADA introduces a novel shielding reward system the way that it works is if you hold your assets in the shielded set you help strengthen nada's data protection guarantees and collect nonrewards in return the model will initially support IBC and ethereum based assets but eventually the idea is for this to expand into a comprehensive hub for all assets really really excited

about what the folks over at the mod are doing I highly recommend that you go and check them out at n.net you can follow their mainnet launch which is zoom TM very exciting tell them that I sent you click the link bottom of the show notes hi everyone this episode is brought to you by Kinto the safety first L2 with user own kyc and Native account abstraction that is accelerating the transition to the onchain financial system now we've been talking about Larry thinkink on this program and how he's been shouting the good word about tokenization to all of his buddies on Wall Street this is happening and the very cool part about Kinto is that they are built to accept a whole bunch of assets and a whole bunch of users from the traditional Financial system which current l2s have done an okay job but

there's a lot of room for improvement for onboarding so it features very nice things like user owned kyc and Native account abstraction that solve some of the biggest blockers around mainstream adoption namely security and user experience you can become a founding member at engine. Kinto doxyz if you believe in this onchain financial system join Kino's launch program and thank me later cheers guys and the link bottom of this episode click it now so I I want to actually maybe uh take this as an opportunity as well to try to get a sense of maybe vitalic I'll I'll con you here because you wrote a a phenomenal blog post a couple of months ago after blobs went live um saying that we've kind of moved from this being a zero to one problem from a to a 1 to n problem um and I think this this blog referred

to a couple of previous blogs where you sort of show this uh this um growth scale um where there was a lot of changes that were happening in a very short period of time and now we've moved on to a more plateau uh Plateau phrase uh phase sorry for ethereum's growth where there are still some definitely big upgrades coming like bral trees Etc but a lot of the technical growth that needed to happen in a very short period of time has has happened can you just expand a little bit on what you wrote in that blog post and if uh if we're done with a lot of the really hard fast moving uh technical parts of ethereum's road map what what comes next yeah I mean so like the merge was like crazy complex right and it was crazy complex

from an implementation perspective from a spec perspective from the perspective of uh the ecosystem adapting to it all kinds of perspectives right like even an ideal upgrade to proof of stake like take uh you know like the ideas of single slot finality and then plus some kind of pre-confirmation on top of that like even a change like to that right the Delta between like now in Utopia is considerably smaller than the Delta between now in proof of work right um and I mean even like just the fact that you like proof of stake has like fixed salot times and it has things like finality like that alone gives us like many more possibilities to actually run that upgrade smoothly right or even the fact that we actually have execution get

sent to separation right like all of these different uh things like make any future upgrade much easier for the uh The Surge right so the uh L2 Centric road map right so the things that have been done already are one is getting users in the ecosystem comfortable with l2s right and I mean there definitely are big bumps in the road that we're talking about but like we've already seen a lot of upgrades like even for example with some of the newer wallets having to manually switch networks for an application is not a thing anymore right um so like like a large number of applications are happening on l2s I mean I think uh the closest we have this cycle to like a legit application that's

attracting Main interest I mean it might quite possibly be poly market and that's know it's on polygon right so big success of l2s right there uh in farcaster you know on an L2 you lots of things happening on l2s um then we and then from a technical perspective right the thing that 4844 did in particular is it created this blop structure right which basically change like basically me that that l2s have to do this onetime work of moving their data from being called Data to being blob data and if they did their job right then like basically everything that we do from here including peer do

including full data availability sampling even including you know replacing the kcg with some kind of like Stark based structure like even that that can all be done in such a way that rollups I again if they did their homework right can just keep functioning without any changes whatever right and like that's powerful uh so that's uh something basically uh like the change there are there is still work that needs to be done but the work is kind of inherently more behind the scenes that and inherently less disruptive than before right so I think the common threat across a lot of these right is that like the future work there's still

significant stuff remaining but like as you go further and further down the road map like the changes start smaller they start becoming like actually more incremental they start becoming less disruptive and like I think on an even faster curve they start becoming less disruptive to Applications right so there is this uh very real way I think in which we've like crossed a bunch of big chasms already and you know there are definitely still very significant chasms left across but I think they're already you know like smaller than the ones we've already gone through so I you know one one uh quote that stood out to me that you wrote um was uh was from from your blog was

emphasis is already slowly shifting and will continue to slowly shift from L1 problems such as POS and scaling to problems closer to the application layer um and later you know you used even stronger language and said what this means to developers you know given all the advancements that we've had so far in the scaling road map for ethereum is that we no longer have an excuse up until a couple of years ago we were setting ourselves a low standard building applications that were clear not usable as scale but today we have all the tools that we will need and indeed most of the tools will ever have to build applications that are simultaneously cyer Punk and userfriendly uh which is just a really strong quote and deeply resonated with me we know what do you view the duty if anything that ethereum that L1 has um in

terms of creating like a better uh user experience for users especially now that many users are on sort of l2s is this kind of up to l2s and applications at this point and we just need to you know like the metaphor fire under their butts or there additional things that the and L1 can do yeah it's a good question I think it's like in some ways the the key question that's being discussed right I think uh there's like a certain uh kind of set of uh kind of things that like seem pretty well understood right like basically you know the idea that El one is this like common know settlements way here it's uh the thing that kind of ask

um ultimately end up moving in between it's a thing that allows l2s to be able to do things like reading each other's State um and uh so on and so forth um and then there's definitely um like stuff that's around the edges right so like one of the ideas around the edges is like basically if one service that end user applications need is uh fast like Fast confirmation times right and then the question is like one ex possible extreme of a road map is basically if we like explicitly say that L1 is not for users or almost entirely not for users L1 is for l2s and uh it's l2's responsibility to provide fast

confirmations for users and then if we do that then like the optimum strategy for L1 would be for example to like do a single slot finality with I like for example like potentially even set conservative parameters to make things lighter like uh 32 seconds slat time with would be perfectly fine right and then l2s what would be responsible for doing like things on a much faster basis and then you would even have you know things like ERC 7683 for like faster cross L2 operations and so on and so forth and L1 would basically just have to focus on being as censorship resistant as possible as 51% attack resistant as possible as simple as possible and that's it right the other road map is to say like basically can we

to some extent make L1 somewhat more expansive and the benefit of making L1 more expansive is that there's like further guarantees that are guaranteed to users at the L1 level and that means that l2s have to do less work it might also even mean that some portion of applications are able to just continue living on L1 um it's uh and basically you're essentially trading off like sub amount of L1 complexity but then you get like potentially a very large gain in L2 Simplicity right and so if like one can have like faster confirmations for example then like that greatly increases the set of l2s that could just be based rollups and being a based rollup is just

like incredibly simple right like the amount of work that you have to do as an L2 goes down Bel like a factor of two if you're based and so that's uh I think like that's one of those big dimensions that's like still really uh open to a lot of discussion and open to I mean a lot of uh I mean still a lot of technical proposals right I think basically yeah you know there's like the minimal L1 Vision which basically focuses on this like entirely on the sment layer approach and basically pushes L2 to provide all the functionalities and then you know you can go kind of more maximalist in uh like particular specific directions what do you personally think

the ethereum L one should do see this so okay here's the the thought experiment imagine that like you could make a sort of invisible dictator decision and change some parameters you could even change the issuance rules you could like fund EIP 7683 development or something like this and then no one would know you had done it we just reset history and everyone thinks it was social consensus so you know taking out the kind of long-term effects of someone making such a decision what would you do yeah no this is um I'm trying to think because uh like there there's definitely things

that like I would have done differently in the past right so like one of them is just uh like start with uh a much simpler version of proof of stake and like basically not do the whole Gasper thing right basically do something that's like very uh you know kind of like chain based proof of stake and then upgrade to like what we're thinking of as being SE swad finality now like some um at some point in the future and that could have just like saved us years on uh that entire development stream um I think uh okay on like specific properties that I think are valuable for for the L1 I think uh I mean okay there's a couple that I think are super valuable regard all kind of regardless

of the direction right so one of them I think is that uh like ethereum still is the like from what I can tell the only the only L1 ecosystem and like this like not even Bitcoin does this that like really tries to take the concept of recovery from 51% attack seriously right like basically everyone else either waves their hands and says it will never happen because incentives or um you know basically they say like oh social consensus will fix it right and like both of those answers kind of worry me right because uh you know I definitely don't think that you can just rely on incentives because you know we've seen that like extra protocol incentives can just like very quickly right and then the problem with saying Social consensus

will fix everything is like that feels good to say while we're in this like happy fluffy Kumbaya ecosystem where I you know like everyone meets at conferences and goes to panels yeah and like everyone you know like vaguely agrees on like you know like cyber libertarian ideals of like how we should think about censorship and not sure that I'm agreeing with that but yeah um and you know I get so and so on and so forth right but then uh imagine like 10 years in the future uh you know you have uh like you know like black rock in the ecos in the ecosystem you have like major trillion dollar funds you have like huge corporate stakeholders then uh

you know are we really going to be that certain that like if a 51% censorship attack happens the other 49% of the companies are like actually going to like coordinate and refer the ch out of their loyalties to ethereum values right it's like no um and so I think the best shot that we have um is to make 51% attack recovery something that's as automated as possible and there like there are like actual kentus Theory or like research directions that can like really improve on this right I mean obviously there's mathematical results that that basically say that like 100% Utopia is impossible right but you know like 90% May may be possible Right like even you know there are designs by which

you know you could do things like if you're like your validator um you know sees that like other trans like particular transactions are being censored then it could like refuse to build on the censor chain or it could refuse to build on chains that are trying to that are trying to censor you right and like basically there's a lot of like design opportunity to try to build architectures where if a 51% attack happens it basically automatically just by people running default software fails in the direction of the attacker having one chain and then basically all of the honest good guys being able to coordinate on a single minority chain right and uh if you have something like that then um

like basically you know the kind of social consensus game theory around uh like actually make recover like coordinating around make recovering from that 51% attack and like actually burning the money of everyone who participated like suddenly becomes more viable right and so like this is why like I'm like I continue to not be a fan of uh like I think there definitely is a kind of like a a uh like SL economic consensus and like slashing defeatist mentality that's popular in some other L1 communities that basically say things like oh you know we cannot protect against all the failures because like at the very least censorship is not a fully attributable and so therefore you know we have to rely on social

consensus and so therefore we should just lean on social consensus fully right and like I'm not comfortable leaning on that right and I think there is value in like ethereum being the chain that stubbornly specializes in in refusing to rely on that right and in like you know like actually being like actually having a very very clear and uh you know like both like maximally programmatic where possible but also you know kind of very culturally ingrained where culture is necess um strategy for like actually being able to recover from 51% attacks so that's one aspect another aspect is of course like really caring about censorship resistance right so like uh one Ben one uh challenge for example of this minimum L1 road map is like let's say we have 32

second finality on L1 and let's say and 32 second swats on L1 and then l2s are responsible for providing fast confirmations right one big downside of that world is that uh if one of the l2s decides to censor you then like they can basically suddenly degrade your experience by a factor of like a thousand right like if l2s provide 32 millisecond latency which servers totally can then like if one of them decides to censor you your latency goes all the way up to 32 seconds right and like for sub applications that feels fine it's like okay fine let's say I'm you know like donating to you know like controversial political Charities who cares if the money gets over in 32

seconds or 32 milliseconds but if you think of like Financial applications where we're talking about like defi Liquidations in the context of like rapidly moving market conditions or even let's talk about like doing games on chain right it's like okay imagine you're like we put World of Warcraft on chain and like we you know you really care about that's the real goal of ethereum World of Warcraft on chain yeah and like imagine like you really care about whether or not your latency is like 150 milliseconds or 330 milliseconds and then at some point it's like oh you know you're playing uh you know again and you know you're playing on like that uh like that that version of hard mode where if your character dies you go all the way back to one and then you know you get into like a PVP fight with someone and then the person

you're PVP fighting against they manage to like hack you into the server and the server starts censoring you and then they censor all of your spells for 32 seconds and within 32 seconds the other guy kills you and then your character is gone and you lost mons of work right so you know basically 32 like censoring someone for 32 seconds is like very trivial in some applications right and so like that actually is one of the arguments in favor of like a more maximalist Vision specifically in this in the case of like let's say yeah the L1 providing I mean like let's say like confirmations on a two to four second level instead of just finality on a 322 level right so there but regardless of like which one you choose right like I think it's a like I

think incl it's good that inclusion lists are being highly valued and I think it's good that like even some of these uh you know like multi parallel multi proposal ideas that might even obate the need for inclusion L something like that gets adoped are being considered right so like I think basically regardless of whether we take the kind of minimalist L1 path or like a somewhat moderate L1 path I think like actually taking this like very sophisticated approach and asking like what does it really mean to have a maximally robust base layer and uh like actually trying to do that like I like I would love to see uh like actually doing more of that so I I think another question that

I have as well is I I would love to transition into talking a little bit about you know as we're moving to a more modular world and we're beginning to unbundle some of the functions of blockchains what do what does the role of Standards have there as well and do do the two of you see any limitations to say just pure unbridled free market competition where there's an analogy in the real world where there's something called The Tragedy of Commons where you can't just toss everything up to the free market um because you know Fishers will you know literally fish an entire Reserve until it's down to nothing and and things of this nature we have we have something called the government that will step in and try to moderate some of that and I would be curious you know as we increase the complexity and

move Computing to different environments you what is the role of Standards if any play here maybe Chris I could toss it over to you first yeah I mean first I would want to draw a distinction when we use the word modular I think often modularity in protocols is conflated with like modularity in networks and if you draw boxes that kind of stack things on top of each other one interpretation of those boxes can be layers of a protocol which build sort of abstractions one on top of the other and hide implementation details which Mak sense when you design protocols but another interpretation of those boxes can be n uh nodes sitting in between you and like the L1 in the network and often the actual modularity that has happened is more the latter

thing it's like less about you know in practice it has been less about designing very clear abstract interfaces in your protocols and more about I don't know uh putting a lot of intermediaries in the network and I think the reasons for this latter thing have more to do with capital structure than any like particularly well-rounded design philosophy um you know to me the important part in you know modularity and protocol design is critical and it needs to separate out kind of the right things like you want a clear understanding of um what the different kinds of entities can be what kind of roles different kinds of entities can play in your protocol what roles are really like fundamentally distinct what roles are fundamentally coupled and how do you um you know want to reason about

who is performing those roles and how who is performing them is changing over time so for example in uh you know in in kind of a rollup based road map as I understand it or sort of a modular blockchain frame the L1 chain is providing both at least temporary data storage data availability and ordering and in some kind of more plasma likee scaling road map the L1 chain is only providing ordering so there's a different set of like roles that are coupled in this plasma road map they're like maximally I I don't think you can I mean decoupling ordering more you need ordering to happen in one logical place so decoupling ordering more I think the only Direction I see there is something like inclusion lists uh so one thing I like about that kind of frame is that it illuminates like what kinds of

decoupling are possible because what kinds of decoupling are possible is sort of a property of like it's a property of mathematics I don't know a property of a property of protocols whereas what kinds of coupling actually make sense just relates to sort of economics and incentives and I think as protocol designers you actually can't choose which kinds of coupling make sense you can try to restrict by building protocols that support only one thing or another thing um you know that protocols that only support certain roles being coupled together but then the incentives in actual practice will kind of play against that and you end up with sort of hacky intermediate Solutions stuff like this so I think an analytic approach that tries to maximally decouple things is really helpful even if the actual

operation ends up being coupled in practice um just to touch quickly upon the second question that you asked about sort of protocols and and and Market structures I mean I think there's a lot of uh uh both value and danger in the choice of metaphors and often we think of you know protocols at least in this ecosystem as some kind of free market competition and I think the free market competition is good for the protocols like it's good for the ideas because the ideas can be freely copied and remixed and recombined they can easily evolve no one is you know the ideas are the permissionless part right um so I think it's very good in terms of building a kind of collaborative research discourse and just making progress although a lot of terminological confusion tends to

come in if marketing gets too involved um but I think the disadvantage of a very kind of decentralized protocol development ecosystem is that the guarantees provided to the user tend to be fragmented difficult to understand and too complex if you look at like the most successful consumer software companies mostly they're like large hierarchical organizations like Apple or Google or Microsoft or something like this and I personally hate living in a world where most software that people use is made and controlled by those organizations but I think the reason that we do live in that world is partially um just the fact that those organizations can coordinate what software they're building they can coordinate the interfaces they're internally not markets they're like uh

sort of I don't know patronage structures or something like this um and that that coordination allows them to deliver an ultimate product that's sort of more more aligned with the needs and the interfaces that the user wants and expects so I think maybe one way to investigate how we could improve crypto's ability to deliver this is to investigate kind of alternative Capital structures that would meld in between this kind of free market which certainly has some benefits and a kind of you know single hierarchical organization which has some different benefits and drawbacks if we can somehow split the middle there I think it could be really interesting yeah and I think uh to me the big thing that's really important to preserve as we uh enter this um like L2 world is to make sure that it's like the

greater ethereum verse still feels like ethereum right and like the reason why like I intentionally wants to use this kind of like more abstract framing instead of like specific statements that have like mathematical meanings like synchr disc composability is that I think most of the time Sy disc composability is not what people want right like uh people generally I think don't care as much you know if they're uh like thing finishes within one transaction or within two transactions a second apart from each other like the biggest pain point is like oh my God what does it mean when I go to a different D I have to like suddenly switch networks and what does it mean that like I have to like figure out how to deposit to polygon what is deposit to polygon I'm using ethereum here right

and uh like the biggest composability unlocks that like matter I think is like the 8020 of composability is basically like you should be able to take an address and put your address an address into the receive field of your browser of of your browser wallet and then click Send and then that should click Send to the recipient is and that recipient address should include whatever chain the uh like L1 or L2 or whatever the uh recipient wants to receive their coins on right so like basically like me that's just uh you know ERC 3770 right and like basically yeah like actually having that integrated as a like a default thing across across wallets and also getting to the point where like uh

fast cross L2 transfers which realistically requires liquidity forwarding are kind of like this ecosystem wide public service that exists without dependency on you know specific intermediary actors right so and like those are just examples right like I think if we walk through the list I mean know we can talk about how like it should be possible to change the owner of a safe account without doing it in 100 places and then get that gets into like you know key store wallet discussions and then there's like various other instances of that right but uh like that's where I see uh the greatest value of uh standards and then in terms of like incentive structures I do think that there need to exist some

kind of like entities that actually do a good job of actually building that stuff and I think the properties that those entities need to have are basically uh that they need to have kind of like incentives that are either sufficiently aligned with the whole ecosystem or where they are like basically a part of the ecosystem stack that's just on a completely different axis right where it's like basically like it's a commoditize to complement strategy for them essentially right and uh you know we've seen like for example Unis swap like you know like already do a lot of work in like IRC 7683 for example right I mean I don't think we should lean on Unis swap I think you know there's uh there's definitely more that the

ethereum foundation can do there's probably as I've suggested before room for making you know any equivalent of the protocol Guild that's like cross L2 infrastructure Guild and then keep going from there what would you think of something like changing the eth issuance rules so that you can issue some eth to rollups that feel like and not to rollups that don't that's a fun one I mean I think this is actually one of the reasons why I'm like really grateful that zash exists right because I think uh I mean okay so the general reason to be scared of that sort of stuff is like basically the possibility that he gets captured right and like zcash managed to do that with offchain governance right and like zcash is more centralized in terms of its Community

than like I would like although I know that you know with things like shielded labs they like trying to actually make an effort to improve on that which I think is super cool um but uh you know basically like I think it's uh you it's definitely nice that there is experimentation with those kinds of ideas I mean I think the big thing to solve for in that case is like basically uh like how to make that stuff not be a political show right and like I think the best technology that we have for not creating political shows is often in direction right basically yeah it's like instead of choosing who gets the money you choose the mechanism that decides who gets the money or even you

choose the mechanism that decides the mechanism that decides who gets the money and like the more in Direction you add the more you like actually put people I you know behind the veil of ignorance right so like poly market for ethereum public goods funded by L1 emissions right like retro funding I mean let's uh I mean we uh you know let l2s figure that out I mean I think you know if ethereum governance like 5 years from now ends up know deciding to like do things like that with like 25% of uh you know the uh like 1559 burn like interesting right I mean I think I mean this not not out of the Overton window it's within the Overton

window what's uh let's uh okay let's say it's like within the guys like you you know I mean like can like we please have like other people debate this right fair fair I mean it's my job conceptual terrorism right oh W that's like that's like such a fun phrase yeah okay yeah well you can be ethereum's official conceptual Theory all right I I've got a I've got a maybe a final closing line of thought and again I gotta give credit to the the Chris um Chris and anomis team here to uh for giving me the words to describe this but I think one of the you know one

of the ways that we talk about unbundling different parts of what a blockchain does is we tend to talk about it through the lens of data availability and execution and settlement and actual things that blockchains do but in in another higher sense I think you're actually unbundling what it means to what are the different uh core components of a blockchain which is an asset a security model uh in a community and you know one of the things that I think the the rollup scaling uh road map has accelerated uh is this unbundling of kind of like ethereum or whatever blockchain you know blockchain user exists as a community versus the asset and the mental model I think that a lot of people have about how blockchains can compete is hey I'm

essentially this generalized Computing environment and I you can build a bunch of apps here and maybe those apps generate money and that somehow Acres value to my token uh but for me the the Stark data point that contrast this is actually Bitcoin where the token has continued to do well and compete um in this in this market of monies for a long time despite growth on the technical side being relatively stagnant although that is definitely that is definitely changing and I would love maybe Chris it was originally your blog post that inspired this idea but if you could describe this uh process of unbundling of different core components of a blockchain and then what are the different vectors that like a community can compete on versus a protocol versus an asset to compete on and how separate

are all all of these things going to be going into the future right um I mean that's a very broad question but just to kind of summarize the direction of change as I see it you know we all started here because of Bitcoin and Bitcoin bundled together everything into like uh I mean Satoshi was many things but he was not the most elegant coder and Bitcoin was an asset a protocol a community it was all of those things like rolled up into one and at the time I mean I don't know uh I guess I I participated in Bitcoin talk in 2011 or something 2011 2012 but at that time which is the the only one I know um people really viewed these things as like essentially coupled like they didn't you know sometimes there were

people experimenting with color coins or starting to experiment with ethereum um but they viewed like the asset and the protocol in the community as a very coupled thing right um You would always have assets associated with protocols and over time we've seen these things start to decouple you know there's an ethereum Community which at least I see is related to but but meaningfully distinct than eth the asset right you don't have to you know no one when you go to conferences asks you do you have 32 eth that would be like solo Staker test you know if you don't have 32 eth you can't attend this conference right you're unaligned right right right um you know there's some there's maybe a softer definition there are values there are kind of things that the community wants to see wants to build um things

that they want to do for users um it's like if one person runs Linux but they have no eth and then the other person does everything on an phone but they have a th eth who's more aligned right right the alignment test right so there's there's some there's some social thing going on that is I mean it's definitely not specified in the yellow paper Let's uh let's do somewhere between neutal good and chaotic good right right um and I think that you know one you know to me the value of the ethereum of ethereum like comes from the community and comes from even if you want to look just at you know the asset if you are a I don't know you are a US dollar Maxi and many of us appear to be closet Us doll Maxis at least by revealed preference if you are a Us doll

Maxi the thing you care about in the context of ethereum is just how many US Dollars can I traded for right if you are it's a very boring life I don't recommend it but that's what you care about um and if you care about that then the thing you care about is just like who will trade me US dollars for ethereum like that's the only thing you care about how many of those people are there what is the supply demand you don't care about how many people are paying eth for gas on the L1 except in so far as it like forms some of the demand but but most of the demand is not coming from that most of the demand is coming from people who you know are just want to like buy into the community who want to support the project who think

that the project will do well but ultimately that's like that goes down to some reason that they think that there's something uh you know valuable in the ideas and in the community much more so than just gas being paid on the protocol MH I agree um hey got to compensated for the five- minute monologue somehow the other other so just to like this is kind of throwing an idea into the mix but um I to to to touch upon the like if we understand these things as separate an advantage of doing so is that it opens up many very different capital structure options like one reason that assets are so competitive with each

other is that they are viewed typically as Alternatives that you like sell a to get b or you sell B to get a but there's nothing inherent to like the identity of assets that forces them to be alternatives for example if asset a issues 50% of its Supply every year to Holders of asset b or to asset B governance or something and asset B issues 50% of its Supply to asset a these are really like they're almost not disting distinct assets anymore they're kind of partially melded and if you take this number up to 100 they become literally the same thing um so there's this kind of sliding scale we could use in coupling assets together that I think might allow for more just collaboration and more duplication of actual work within the ecosystem but we then need to

open the sort of open the capital structure exploratory window to allow for some of these things and some of them you know to touch upon your point earlier are tricky because they uh are difficult to do in a way that's sort of objectively neutral that if you have some governance function deciding what an asset get gets issued for or what an what other assets an asset gets issued to uh you know that that there's no there's no like way to to decide that via some abstract mechanism you could put prediction markets there you could put something you can put like more things in between but ultimately there are some people and they need to make some arbitrary decisions about what they think will be valuable in the world so I think there's kind of yeah some some some conceptual tension to square here yeah I've got a I've got a final closing

question for you and I I can't see the timer because of my virtual experience here but just okay excellent thank you um I would love to get a sense from the two of you and Chris this is something I've asked you in the past but pic I'm curious to get your opinion as well is let's say we're having this conversation 15 or 20 years in the future and we're looking back at the crypto experiment and we're deciding what made it successful or not successful what would make you look back and say this has been an extremely worthwhile use of all of our times and I'm very proud of this versus what would make you say this might have been disappointing and how can we avoid the disappointing outcome H me I think uh ultimately you know the

final determinant of this uh is going to be what what the technology gets used for right um so uh you know if uh we actually do get uh you know either um like to the point of uh mainstream or to the point of kind of being like a Linux level credible alternative to the mainstream something like uh you know like for example uh you know ethereum based accounts as replacement for you know like signing in with social accounts um or like just like cryptocurrency as a financial system um or Dows like as an alternative to um either corporations or nonprofits um or um or know like one of like any one of

applications in know like the various different spaces whether I'm like decentralized social media or prediction markets or whatever like if I at least of those take off and it becomes clear that it's had at least the same level of impact on the world that Linux has then I mean to me that's a success I mean if uh you know on the other hand basically the space gets remembered as a bunch of a dwindling group of idealists screaming in the group as a slightly more slowly a dwindling group of people trade you know like digital monkeys and celebrity pictures with each other then like I would say that's not not an honorable uh you know result for the space right and

so I think uh I mean my thesis for continuing to work on this stuff in 20124 is that like I think it's even more like it's even more High leverage than just kind of the average value of the space because um I think like basically the way that I see it is like you know the monkeys and the celebrity photos are going to be traded regardless of whether fees are two or 2 cents or $20 and regardless of whether finality happens in 2 milliseconds 20 hours but uh a lot of the more like you know use cases that we actually care about like that's uh like really does depend on having a reasonably you know competitive level of things like fees and user experience right and so the more we can

actually get to that level the more that uh like that stuff actually happens right and I think we even see some examples of this being true right so I think uh you know going back to kind of the two uh you know application use cases that are that kind of maximize you know for me the dot product of like being successful and being what I personally find interesting I would say you know like poly market and like decentralized social media right and uh I think what's interesting about the main contenders in both of those spaces is just how much better the ux is today versus the version of both of those that existed five or 10 years ago right like so kir has like traded on poly Market in

the last year who here remembers trading on augur 5 years ago trading on augur 5 years ago was like not a good experience right I agree yeah I mean I remember I I mean first then eventually there was catnip which made it slightly better but even on catnip I paid over $1,000 of transaction fees and like even still there's like a whole bunch of UI hell right and with a decentralized social media we basically had the exact same thing like who he remembers trying status in 2019 also hell right like yeah but but impressive ambitioned still they you know basically I think they I think they got the memo they went into a cave and

like they've actually come out of the cave like have you tried their latest demos no it's like actually good so it's uh basically like the ux level has like actually gotten to the point where like it's moved off away from like being a you know this like geek toy where we basically have a decentralization religious fundamentalist to put yourself through the experience to something that like normal people actually wants to use and participate in right and like that's been a huge gain that's happened over the last five years alone and that gain has proven itself in the like actually much more successful level of adoption of both of those use cases right so basically like I want like that but you know like five times more and then five

times as many spaces mhh yeah I mean I would second that I mean I think I would answer in sort of just to build on that two parts here one is to me the the kind of promise and the limit of what the technology can really offer to communities is the ability to intricately balance between or to have both in many cases of autonomy and interoperability so in most of the systems in the world today uh communities both like at all levels at the level of the individual at the level of the family at the level of the group The City the Society even the country often face choices between autonomy and interoperability if you want to interoperate with the US Financial

system you have to use Swift if you want to interoperate with you know the financial as a country you have to use Swift as or as a bank as an individual you have to use Bank um even if you just want to I don't know like give promises to other people that are denominated in dollars or something like this you don't have the ability to do that you have to trade off your autonomy for interoperability with the system and I think crypto can provide uh kind of standardized protocols that allow communities to very cleanly delineate the kind of parts that they want to be dependent on others for and the parts that they want to run inside themselves autonomously and if the protocols facilitate easy interoperability then the switching costs are low so then when you want to change the topology you want

to change who's part of your community you want to change who you're dependent on you can do that easily uh the second part of the answer I would give is social I think in 15 years I would like to be completely irrelevant blockchain technology should be boring it should be like a database conference like who here would go to a database conference nobody one person okay uh well we someone will still be here for you but it won't be me if we succeed right time's up thanks a lot um vitalic Christopher and Mike we have time for one question of course naan I have a question yeah balic you made a really interesting comment on the existential danger soci short

and it's existential is there a ro for accelerations here know oh interesting so you want to like start the eak movement to 51% attack I'm think maybe like functioning the question yeah no the question is basically like is there value in like taking in accelerationist approach to like some of the economic problems in the space so that we basically kind of like run through all the failure modes and have a chance to fix them before the

space becomes uh you know even bigger and we're even more incapable of coordinating I think I mean it's definitely uh an interesting argument right and you know I think like there's definitely you know ways in which that's kind of ended up uh already panning out out almost Accidentally In some ways right it's like you know imagine the world if like the M go collapse and never happens right that plausibly could have been a world where like people would just have thought nobody would have thought that Dex technology is important right and you know where like people would be like 10 times more comfortable just using centralized exchanges for everything and then it's possible that like FTX might have been

worse by you know enough that the total amount of money lost could have been greater right so uh and I mean it's the sort of thing where like uh it's like we we're talking about like a very like response to threats is a a very chaotic system and it's like it's very easy for arguments like that to be correct but then it's like also very easy for like bad people to narrativize themselves into thinking that they're good uh by yeah using these kinds of uh arguments even when they're not true um and so I think I mean my personal preference is like I want that stuff to happen but ideally at smaller than ethereum scale right like I think uh you

know what we want like I think the missing middle for a lot of this is like we we need something that has an economic scale that's like somewhere in the would say the geometric mean between like a test net and a main net right like this is what I advocate for you know like for example uh you know the whole kind of like base free confirmations direction right basically that like like or or execution tickets rather right basically because uh like from a technical perspective like within the mathematical model it seems fine but then there's like all of these centralization risks and multiblock M risks and like all these blocks risks that are just like inherently very hard to model and like you're not going to learn anything about them on a test net

right but if you were to try them on an L2 where the tvl of the L2 and the level of defi activity is like somewhere in the tens to hundreds of Millions dollars instead of like ethereum scale then I you know we would actually learn something right um so yeah I mean this is probably you know the one unclaimed you know Niche for an L2 right like basically you know the the explicit kind of like you know the crazy the it's like the the the sez of crypto Anarchy right basically you know just like the thing where you're just like encouraged to go crazy and like there's a a social contract where basically beg as many Regulators as possible to just like make

us all all the stuff legal and if you want to play play there you can otherwise you know you just like you know just like stay in the regular World um and uh like you actually get like some level of this kind of economic data and like hopefully get like actual answers before they can go like to even to ethereum scale like that would be better right I mean I think you know applying that to ethereum it's like using ethereum itself has a Sandbox I feel like the snakes are like getting to the point of being a bit too high already but like we or two is you know they feel at about the right level of scale hey everyone hope you all enjoyed today's episode wanted to give a final shout out to namada again a team that is near and dear to my heart they are

building the shielded asset Hub which is protecting the future multichain talked a little bit about how that works in the mid roll but for now what I would highly recommend that you do is go check them out they're in their main net launch phase you can follow along with everything at n.net you can start rewarding Yourself by shielding your actions and strengthening data privacy for all across the multichain so thanks again to MA for all the great work that you're doing