Fireside chat: Freedom, progress, and prosperity — zkEVMs will scale the internet of value

Transcript

after I say in Prague the larger I'm getting you know such good food well Alex thanks so much for taking the time very excited for our chat I think one interesting place to begin because I think most of the folks in the audience have an understanding of what matter Labs does and the role and importance of ZK in uh this industry and this ecosystem maybe walk us through the origin story and the core values that sort of underpin a firm that's based in rooted in technology but maybe don't have anything to do with technology I'm thinking freedom in particular of course so the origin of minor Labs because with my personal story I was born in Ukraine I agree up

there I moved to Germany when I was 12 or 20 or something in Ukraine I grew up in the period right after the collapse of Soviet Union and I experienced firsthand the transformation of society in the lack of Institutions and authorities where like they kind of still have power but they're not performing the functions anymore and they prevent people from actually being able to perform the functions so the crime is rampant they I had hyperinflation for two years like I still remember it as a small kid and then I moved to Germany and I experienced a very different Society and also people immigrants from Ukraine from Russia from Eastern Europe doing much much better

once the rules of the game are are changed and something is different and like the same the very same people do do much better and I I get very curious like what what is that and I started learning more and more about how Society is organized I was started as a programmer uh I I always was passionate about programming I was like part of Ukrainian national team at ioi International Olympic informatics I really like the solving complex problems um then I I became a team lead then I grew to a CTO I was CTO and a couple of companies and I could see how the the way you organize cooperation affects the productivity and the the overall results

and the more I learned about the way you organize things like on the local level at the team on the global level at you know a nation or or bigger than Nation the more I grew to appreciate the idea of freedom like as this fundamental key that enables you like everyone in society as a whole to really get the maximum out of your potential because Freedom leads to um a lot more motivation like compared like you you know you you have two different organizations one is prescribed like every single thing like you're micromanaged you're told what to do with every you like think North Korea

where people are like literally just being told every day what to do where to move what you like everything is completely organized how how big is motivation there versus you know like more a free country uh but like where you work in a big Corporation where everything is kind of your impact is minimal and you have a lot of bureaucracy a lot of rules versus a small startup where everyone like things are totally chaotic but like you feel a lot of responsibility and you have a freedom because no one else like have test time to to manage you everyone is busy with their own things right the the motivation the the outcomes the the learning curve is is going to be tremendously different and this works at

the uh National or societal level either the the same way and like we're here at uh uh parallel in polis The Institute of crypto Anarchy which is deeply inspired by The Works of uh Austrian economic economists by by the like this libertarian Classical liberalism school of thought uh which is a heterodox school of thought which is like it's going in the opposite direction of of what the mainstream economics and political science is doing for a reason because the mainstream school is is heavily influenced by the state and has state sponsored and obviously certain ideas have more right to further than uh in in this free part

of like Academia and uh intellectual world uh so uh it works the same way it's like you like I I when I started reading the uh libertarian and Austrian Economist uh authors my world perception just like changed from but it just went upside down I was like what like this is really how like it gives you a very interesting perspective on how the entire Society is organized from my point of view of a single individual like you have these choices A and B what you're going to choose like in Jersey let's say I don't know you have to work very hard and you're gonna get like a minimum wage interest B you just do nothing you go and get a subsidy from the state like

what what is like you know like no hard work you just sit home watch TV and you get paid like 1000 Euros in in Germany or France or whatever like what's going to be like it's very obvious to you then what choices you're going to be taking or like if you introduce Rand controls is it going to make this situation with uh apartment search like better or worse you know and and The Story Goes On and On like we we don't have time now to dive into that but like I got deeply impressed and I became a fan of Austrian economics yet before Bitcoin and then Bitcoin appeared and I thought like wow this is a really interesting experiment this this is probably going to be a toy will always remain a toy

um but it like if we could only somehow bind it to Gold maybe like this thing could could work but of course we had Liberty reserve and e-gold just before Bitcoin they collapsed this is why Bitcoin was born because like you you could not do it with centralized means like you needed something that is much more resilient and this brings us to it to a very interesting uh place where we are today uh the the the the struggle for freedom is what we've seen throughout the entire history of civilization like whenever you had more freedom in a giving space and time in history you we we had a lot more creativity

Innovation motivation and we this led to Prosperity think of um Greek city-states for example like they had like there was it was a cluttered land with a lot of different policies a lot of different political systems they were competing a lot of different things and like you you have a this this growth of uh uh science and culture and all the great Philosophy from from the time then at some point Roman Empire takes over makes a monotone monolithic culture monolithic State uh control uh being imposed on all these places kill the Archimedes and basically the progress

comes to Halt for a couple of centuries then they fall then there is a period of what's called Dark Ages which was actually not that dark but uh it it like you kind of like we don't know much about the certain periods but then the Enlighten comes and you have again like the certain constellation of political actors and changes in technology changes in the uh like offensive versus defensive types of Technologies leads to a situation where the freedom flourishes once again you have a lot of small states you have the very strong Church in in the western world like you know like the papal State versus local small

governance no one has absolute power the power balance is very subtle and you have a thriving Merchant uh culture you have thriving again science everything is on the rise and then it transitions into the the modernity with like the Industrial Revolution and then it goes really parabolic and now we experience that with the uh the appearance of internet and and mobile internet and blockchains and future Ai and whatnot so like whenever we have more freedom it always leads to more creativity and that leads to more prosperity and so what will a more scalable ethereum mean for civilization in terms of freedom in terms of cultural and technological innovation what do you

anticipate so the the role of of ethereum like let's start back with where we'll let it with Bitcoin the greatest innovation of Bitcoin is giving an individual technology that gives you the power to withstand attacks from the most powerful actors in This World from like super nation states you know if you have your Bitcoin key or ethereum private key for that matter uh all these super computers in the world cannot break it for you so you kind of you you have it's yours truly it's you you it's not that easy to attack you the marginal cost of Oppression is very very high it's like attacking one individual costs as much

as attacking the the entire you know like you you can't go after one individual you have to go through some different like you kind of have to get a consent from the entire Society to try to oppress this one person and this is what like ethereum obviously extended the uh Bitcoins uh resilience with a lot more flexibility in terms of programmability and it brings us to this new paradigm called Web free which is essentially the next generation of the internet where like internet just gets supercharged with money and everything that touches value and I believe that what we will see over the next couple of years is basically web free just takes

over and everything like whatever internet has down to information web free will do to the world of value and everything that touches value will go on chain like from payments to uh um exchange to trades to like all the uh even smaller things like tickets and like everything property titles so before we get to that future in the current environment it's hyper competitive right if you look at the landscape of scaling right you have ZK sync polygon scroll how do you sort of see each of these groups approaching the problem and what are you guys doing differently

and is it zero sum um I think that the what's happening is a lot of experimentation we have different approaches like we started we were the first uh zika roll up actually working on ethereum um we we got initially Grant from the ethereum foundation so we're we're really grateful for that we had some freedom to experiment and try things out um the and we launched the very first zkvm live on ethereum Minot uh we the the only other dkvm life is uh polygons and we have starkware as a generic purpose programming um EQ rollup and that's basically the the

um the landscape today what is live and there are a couple of more projects in the works um the differences between the the live ones are we are focusing a lot on the future compatibility so like we we are um we're thinking about the ideal future world to which with the final destination where we want to arrive at and then we reverse engineer from there what do we need to build for the architecture uh the giving the restrictions giving the um uh prerequisites that we want to achieve there namely like we want to scale ethereum fully preserving this original

core values of Freedom resilience trustlessness um inclusivity through full permissionlessness that are there so like it's it's Paramount for us to keep all of that just add fully Limitless scale like where we like in the internet you you you you don't have any inherent limits there is no some magic number of like 1 million servers and you cannot exceed that or like 1 million transactions or like one billion like requests per second right you can always just add more servers more networks and extend it in in an arbitrary way so like this is what we're doing like we're looking at that and we're saying okay what do we need to get there so we

realize for example that uh and stock were made the same Choice by the way that you have to start with focusing on natives your knowledge proofs first whereas most other projects that are working on ZK VM start with evm compatibility to the highest degree first we will eventually converge but the the the priorities are important so we start with something like how do we build something that that is going to be like what what is the world going to look like once ZK takes over and the fact that ZK will take over is I think is broadly accepted but like if if uh if it's not obvious like that's the only technology that gives us the

ability to this to build this infinite like Limitless internet of scale or Internet of value nothing else works like all the bridges that we have today are having in very very fundamental inherent problems they're very scary they are well you have a lot of uh exploits precisely for this fundamental problems like you you like you require very high degree of trust you you have to introduce a lot of trust assumptions in those networks those trust assumptions can be abused and this is what we see like most of the hacks are not on the smart contract level yeah they are through like the oh the malicious sector or the service a compromise so when you know like things like this so let's just take it for granted like ZK is the only way for us

to build this fully trustless infinite Bridges if that's the case and we want to to bring everything like the entire water value to to ethereum using ZK you have to start with something that gives you the absolute maximum efficiency like you like you don't build a new Macbook with the with the thoughts like oh I want to be running the old uh you know like programs that are like 10 years old in exact compatibility mode no you start with like a new brand new chip like M1 M2 and then you have and you tell everyone you have to recompile your programs for this new chip because that's going to give you the maximum efficiency now after you have that you can build an emulator which will run

the in the in simulation mode the older programs in compatibility mode where like things will still work you will have some trade-offs on efficiency but like they will be like uh still functioning like whatever is missing other projects other like except for Stark was dark was also doing this they just not using um evm they you can really easily compile solidity and run it and start we have to rewrite everything in a new language which I think is a very high uh uh entry of a barrier entry for for a lot of like you have to rebuild the entire ecosystem from scratch so we thought like this is unacceptable for us we need to stay in the open Paradigm in in the open standards of ethereum but everyone else is trying to build the evm equivalence

first we're like let's let's just like get something to work exactly the way ethereum works and that's going to give you a lot of performance penalty and eventually uh it will be very hard to go from evm equivalence to this maximum like you can do the other way around you cannot first build in in like computer that simulates like an old architecture and then say let's supercharge it with like highly performant applications if that makes sense so but you still have to go through the process of decentralization what do you think are the biggest hurdles to properly decentralizing Roll-Ups are the HW requirements already

still too high or is it an acceptable threshold and what might be some of the challenges with effective orderly governance um so let's start with technical challenges then talk about the governance on the technical side the big um hurdle was the uh proof generation record like the requirements to run the approver was predictively high it's now going down to consumer gpus like all of the proofs like we now have technology we we have something that that will run or just on on consumer gpus and we basically can leverage all the existing mining farms uh for people who are previously around like like

mining things on on gpus they will all switch over to generate the proofs for like snarks for for ZK based chains um so that is solved like there will be marketplaces for this but like fundamentally the the the the memory requirements the GPU requirements are now like falling down to very low with recursion because we can generate smaller circuits like we can prove smaller circuits and they recursively aggregate basically any number of them in the single snark which then finalizes uh the block on ethereum uh that is not a problem uh a bigger problem would be data availability um in in that like you can only build something Limitless

in this network if the if you extend the ZK roll up data availability Paradigm with with something external that works off chain and then there is a challenge like how do like you you degrade the security somewhere yeah right you open up an attacker there there are so this is an ongoing research area of what's the best way to do it uh in the most decentralized way how do we build something that does not rely on MLS majority so this this is a like I can't yet uh talk deeply about the outcomes of This research is it's ongoing but like we will have something that that is more or less

comparable like it's not 100 of security from ethereum but like maybe 99 98 and that's going to be acceptable for a lot of cases and then like really big transactions really big amounts of funds you will have to keep in ZK Roll-Ups and ethereum itself is moving forward with uh Proto dunks sharding then dunk sharding and then like proper sharding where we'll have and we just said the previous talk about that like we will have a much more scalable bandwidth for ZK Roll-Ups so I expect everyone in the world and we expect the world population to stabilize around 10 billion people I think everyone will will have a chance to have their own accounts in ZK

Roll-Ups to have like 100 security from ethereum for most of their like what's the size ceiling it's not about the size it's about the transaction cost like the the cost of trans like you know like if you're gonna have like if 10 billion people have let's say 10 accounts each you have 100 billion accounts if they transact once per month you can calculate back from there what's the TPS for Roll-Ups is going to be like to support just the basic population needs for just moving funds from your savings account your current accounts which is likely going to be on something like zika Porter right uh so so those are technical challenges which I think they're soluble now on the governance side um the there are a lot of experiments

with governance going on like we definitely want to move as fast as possible to a system where there is no single honest majority that can dictate anything like for example upgrading your roll up should not be done by the team should not be done even by a multi-seek of uh like the team plus some security committee like it should be done by a broad acceptance um of the users of of a given L2 and whoever is the minority who do not agree with the new upgrade should have a chance to exit in a very cheap very affordable and very timely manner to a different L2 that they trust more

this is very fundamental now the the challenge here is we can't really do it the same way as uh on L1 because the l2s are not forkable if you have native ether or native other like L1 assets locked in a single L2 you like they have to stay there they have to be governed by the rules of the smart contracts and like while things like upgrades with time lock are now becoming standard everyone will embrace them uh we are we have them for the kissing Collide for the first version of the protocol like the the basic proof of concept for payments we will use them for easy casing era the easy KVM as soon as we are out of alpha

um but that's not enough because time lock upgrades do not protect you from like uh urgent vulnerabilities in the protocol which are inevitable in the early phase of development and we want to be doing like more frequent uh you know like rollouts of new features and so on so like for for that part I think we'll have to stick to Security Council and maybe some other more more interesting ideas with like broader ethereum governance maybe can step in somehow uh which uh vitalik recently criticized in his blog post about the overloading of social consensus of ethereum so this is also a very interesting research area not how you govern you know like things like protocol treasury for example or

how we give grants you you can afford to experiment in different ways you can do liquid uh democracy you can you can Empower people to vote you can have delegates because a lot of people are going to be passive naturally they will not be actively participating in this voting but this hard governance of upgrades and like what the security issues it remains a big challenge of the protocol so happy to like if you guys have ideas happy to talk after as long as there's just clear communication though because that's what we've seen historically in this industry is communication hiccups can lead to confusion which leads to a whole slew of problems and animosity towards the

people running the show I fully agree we have to be extremely transparent about the risks about like what I mean if you're doing the governance in a way uh that like manages treasury or whatever you have to be very very clear very um crisp in communication to to avoid misreadings like you your words will always be taken out of context and will be like abused and and so on so you have to be like always very precise in in the way you communicate but especially what concerns the security the risks the uh like the protocol itself like when people trust your money their money with the with a certain protocol they have to be really aware of what are the risks and we're in very early days for all the

l2s the even thing even even like optimistic Roll-Ups that are older get some vulnerabilities to get get some patches from time to time like not none of us is is free from that right so the bugs are always a reality uh and we'll have to do it so I'm curious what uh maybe keeps you up at night um if I'm thinking about myself it's one chair Gensler over at the SEC is it the regulatory environment perhaps or is it something more technical um and in terms of a potential token does Mr gensler's Crusade against crypto make that any less likely

I have to honestly say like I have a really good sleep these days we were just talking backstage we both slept like 12 hours last night yeah this is true uh uh so like these days I feel much more confident about both aspects the technical things like we have um with regard to security for example like this would this was something that kept me up at night a couple of years ago uh I'm feeling much better now because we have Security in depth spent more money from from what I can gather in public sources like we're close to four million dollars on Audits and public contests in security alone and we are doing like multifaceted approach to this not just like you don't

really just an audit you don't rely just on on on open sourcing and uh crowds or security you do more things you you think like through scenarios like what can happen if there is a compromise like how you can mitigate that how can you like cover the damages how can you limit the damages to something that is going to be bearable and so on so we have a lot of this in-depth security these days and we we have spoken about that on Twitter and our Public Communication that gives me pretty high degree of certainty that that we're going to be fine there on the regulatory side I think that the uh I mean there are people who are openly anti-crypto in certain countries there are other countries that are very Pro crypto very friendly they're embracing of this new progress uh

leaning ideas and uh and also within the countries like the us there is a very strong Pro crypto movement in the government in the in the Congress and in Senate in um in the political establishment overall and we're going to see some bottle but like they cannot go against people like I I so like I really like the initiative of coinbase to display in in the coinbase app yeah The Stance of your politician in in like your phone number of a politician so you can call them and and share your you know like this is the beauty of crypto this is the beauty of though we have nothing better to do except you all are legislators well like just just being there just just showing your your like you know

just like aligning incentives of a huge amount of people using this technology using something like tokens fungible tokens or nfts get like uh is massive this is something we never had in the history before where we can individually just say like these people have something in common and they are capable of collective action and they they all know that like that everyone else is like it's game theoretical it's like it's in everyone's interest to create pressure on politicians to to behave properly and like to to push the status quo you're not isolated anymore this is what internet has done to information originally like before internet you only

had television radio newspapers fairly centralized the the editors the Publishers there had a lot of soft power and hard power they were very powerful entirely connected to politicians and now the internet like has disrupted all of that right because now the media is decentralized and you have a lot of the everyone can become their own blogger and an influencer and if you're smart and you have a lot of interesting ideas and you can engage people you can easily go to like millions of followers and or maybe not not easily but like you have a like you don't have to ask for permissions permissionless it's meritocracy it's like your ideas are stronger so people like you and you're gonna your your voice is gonna get stronger you don't have to get the

consent from certain political parties and this changes the Dynamics and with tokens with the with with the internet the value changes the Dynamics even further they cannot attack it individually they we have the example of BitTorrent War where like the the Publishers of of content were like trying to shut it down and it failed because you can't really oppose the popular movement if like the majority of people don't support an idea you will look like an oppressor and but with BitTorrent like the the incentives was like lowering just it's just personal for you like either you pay one dollar per song or five dollars per movie or you you download it and and use it here it's a lot more powerful with like with

with tokens and the value of these tokens and the price going up and down depending on certain actions like people are feeling like very very engaged in in this kind of uh you know a lot more motivation because of the protective properties of cryptography that like keep you there the the the these powerful guys cannot just go to one organization and say shut down all of these tokens you know you can't write a letter to bitcoin you can't write a letter to to ethereum it it's just there it's the fact that you have to deal with it this is really cool so when uh token um the this is a good question I like this question but I I never say like I'm not going to answer this question I always do and uh the token is something

that has to be organic like you have to need it yeah so it's the moment you need it yeah there will be a token right so like the for certain things you do not need a token to use ziki sync you do not need the token to pay gas you don't need any specific token like we we figured that it's um the ux is going to be one of the key enablers of mass adoption so if you have to like a friend of mine received a thousand usdc from for some job on on his like in crypto so he had to create his wallet he got the money there then he wanted to send it to his bank account and he came to me and said like oh I I can't like how do I do it it says they I

don't have enough funds to pay fees how come I have one thousand dollars there and I'm like well you need the The Ether to pay the gas fees and the key like yeah I I already figured that out so I tried to convert my usdc to Ether but it told me that to convert I need some ether in the first place where do I get like this this is cage 22 type of situation which isn't it like just just ridiculous it's absurd right so into kissing that would not be a problem because we have native account abstraction for all accounts like AP 457 is it leads away on on mainnet for for smart wallets but you can't you really use it with uh with uh EOS right with metamask you can't really use like gasless

transactions like or like someone else pays fees for use for you but like you know on ziki sync you can so he would be able to just send usdc to any other account to an exchange whatever and pay a fees in in the sense like you don't need the token to use the keysync you don't need a token to you know like to secure the network because it's secured by ethereum itself right but you will you might need it for certain functions like to decentralize the network there is no better way to to do it permissionlessly but to have something to give people like you know like you have to have some stake which depends on the success of the network we can't really use ether to secure the validators to to create decentralized sequencer because if we use ether then

no matter like you behave properly or you censor people or you do some other nasty things the price of your collateral is going to remain the same right so it has to be correlated that would be one thing where it's organically needed there are more things like to decentralize the governance in general same thing like your governance decisions have to be tied to to this collateral it has to be established some link so for those things once they once we come closer to that we need them the token will become necessary and then like that will is going to dictate the actions of the protocol which is going to be decent which has to be decentralized like matter Labs is just the Creator combo creator of ziki sync which will be

one of many contributors just like ethereum Foundation is one of many um contributors to the ethereum ecosystem but it's it's actually everyone is contributing like a lot of companies a lot of individuals researchers uh hackers are working making ethereum stronger and we envision the same for for this for zika sync which is just an extension it's a layer of computation layer of scalability on top of that maybe we can take the last few minutes uh absolutely to uh are we taking questions I don't know this guy is ready yeah um yeah yeah my question is uh around the SEC right I mean of course Bitcoin and ethereum they're decentralized it's

nice and beautiful we love that but the SEC can go after um ethereum it's not that because he didn't say whether ethereum is security or not during the hearing in in the U.S that he's not thinking about a strategy to to attack it right that the SEC has has had a 100 win rate right against their cases so I have to we really have to think about that possibility they can even go after the the ethereum foundation in Switzerland if they wanted to um even if it's not their jurisdiction but they can they have done it in the past so um what what do we do as a community to fight the SEC I mean obviously you can vote them out right I mean next year um

at the state level and and obviously at the presidential level but uh how I mean I think we are underestimating that that threat and how how do we feel about that I mean we've seen what's happened recently right on the market overreaction of last night Etc so is that the end of it we can all learn KRON McGraw and head down to Maryland just kidding that's a good question so like I I am mindless worried because I uh we have investors like pretty strong investors from from the US for example and recent Horowitz let our Series be around uh they are very active in DC in they engage with politicians

and uh uh you know in the efforts to educate people uh about the these new technologies and I know that the The Stance of political establishment in the US is not homogeneous it's not like everyone is just against crypto there are a lot of open-minded people and a lot of really really powerful people so like for example they had of the financial Committee of Congress is very Pro crypto he has some really really tough questions Mr Gensler at the hearings and there are many others so like on the one hand this is the result of this like popular adoption of ethereum and Bitcoin and crypto in general in the US which creates this motive for for politicians

to like like our voters are are like a users of this technology our creators are like there are jobs at place we have to protect them like it's it's not just something like completely irrelevant on the other hand let's imagine that they succeed so they attack ethereum what does it mean like they can ban ethereum from exchanges in the US not from like okay or they can attack ethereum Foundation fine will ethereum survive without ethereum Foundation or without them if they are getting crippled or like they're being fined or whatever of course we will survive like it's like we're way past that point where we will depend on vitalik on ethereum Foundation or or someone else right the we are much stronger now like

ethereum Will Survive we'll continue to thrive if it's going to be banned in one country well that's going to be a Pity but like they they it's not going to be banned in Switzerland and Singapore and Malta and in the UK and other places so the world is decentralized already there is no like Global World Government and by using crypto we can push for like for the status quo to just to improve not to get worse so like we want we want to prevent that huge totalitarian Global state from appearing and would like protect our freedom by using this technology that that's our mission thank you thank you Alex thank you [Applause]

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