Harnessing the Untapped Potential of Bitcoin Staking | S8 E5 | David Tse

Transcript

if you think about it nft is something that's developed not on bitcoin somewhere else brought back to bitcoin through or nodes uh staking that we work on is a concept that is invented obviously in the proof of steak well in other blockchain ethereum uh saline Avalanche brought back to bitcoin bit VM is a very much a concept that came from the row up uh optimistic row up in particular technology that got brought back to bitcoin so here what we're seeing here is that people are seeing that these concept these technology and applications are having Traction in other blockchains and they say hey why why should Bitcoin be left out and I

think that is sort of one of the cultural plus technological movement that we're seeing here 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 l2s

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 GN you can click the link at the bottom of this episode go check them out tell them 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 all right everyone welcome back to another episode of bell curve um

today I'm joined by my trusty co-host miles O'Neal um we are Midway through this reaking season here and today we are talking to David SE of babyon David welcome to the program hey Michael M very nice seeing you guys again yes good to have you back we were just trying to figure out how long ago the uh the last time we had you on and I forgot it was for the app chain season I thought it was for the liquid staking season but I guess that makes sense since I think at the time you guys hadn't released your plans for Bitcoin staking yet right um but lots lots to get into today lots to get into and uh for for listeners it's uh I'd highly recommend going back it was it was a great podcast actually

um back on the app chain season and at that point we were talking about how Bitcoin checkpointing could help with the longrange attacks of some Cosmos app chains um and today we're going to be building on that because Babylon has come in enormous way um since then I mean even even in the in the amount of time that since we've done that season we've had this this whole new advent of uh of reaking which existed back then but has become you know a 20 billion tvl platform on ethereum in the form of Igan layer and now I think in general people are starting to look towards Bitcoin as a huge store of crypto native wealth and I actually want to before we even get into Babylon uh necessarily David and talk about some of the the work that you're doing there I would love I think

many listeners of bell curve probably spend a good amount of their time in either ethereum or salana or Cosmos in general and are aware of this sort of Renaissance that's going on in terms of Bitcoin they see ordinals l2s uh staking via Babylon Etc they're not really sure like what's what's going on and the sort of Changing of the Guard and the the cultural change that's happening over there as well so for folks who might not be as in the weeds of the Bitcoin ecosystem as you are can you just kind of walk us through what's been going on over the course of the last year what are what are some of the big like research changes technological changes that have enabled um what's going on on bitcoin and then where does Babylon belong in that framework yeah so uh that's a great start to our conversation

um so you know Bitcoin is the first blockchain ever right uh Bitcoin is what everything got started um but over the years the developers attention has shifted to new blockchains ethereum being the first one of the first ones but you mentioned salana Avalanche Cosmos all these are essentially new blockchains that are built by Founders who are kind of frustrated with the Bitcoin The Limited programmability of Bitcoin and they want to do more so give a good example Sunny I'm sure Sunny has appeared in this program at some point Sunny was actually a Bitcoin Maxi he wanted to build on bitcoin and in some sense his vision for Cosmos is sort

of the app chain forit coin in some sense and uh uh so what happened in the past one year uh I think there are several interesting things that happen one is that a few years ago there was a upgrade called a tap rout upgrade okay so in bit Bitcoin Bitcoin things happens like the Olympics okay once every four years things happen all right so typically an upgrade happens once every four years halfing happens once every four years so everything is like once every four years and the last half last upgrade was about I don't know 2020 around there 2021 uh tap rout upgrade so one thing about t upgrades allows and in

fact not necessarily intentionally but it allows U much bigger transactions so you can have transactions that essentially occupy four megabytes okay and uh at some point someone figure out that hey you can actually use that to Mint nft on bitcoin and that's the Genesis of the or no project that in some sense started this whole Bitcoin Renaissance because it demonstrate that hey you know what this um limited programmability of Bitcoin actually you can do do something interesting that's number one that's a technological point but there's also a cultural point which is that if you can do something on bitcoin then a lot of people a lot of interest will happen on bitcoin because

Bitcoin just have this you know it's like this gold this high status uh it's like an obious almost like an obious Goods because it's rare it's viable and that's what we see with the oros project right that nft got a take so that's uh that kind of started people's attention back to bitcoin so hey it seems that you can still do something with the limited programmability and if you can do something then people will come and uh so that's sort of the starting point now uh what happened after that is that because of this attention uh there are also a several technological technological kind of breakthrough with

Bitcoin uh one of which is Bitcoin sticking that we're working on I think this this is a technological breakthrough which I'm happy to go into more detail later on and another is this um concept or this prototype called bit VM bit VM is sort of a way of adding programmability to bitcoin by doing a lot of off chain computation that can be verified on chain okay and that lets the path of potentially building secure Bridges from Bitcoin so one thing about Bitcoin is because of the lack of programmability you can't really program a lot of stuff directly on the Bitcoin chain and also the block space is very

small and so uh what you have to do is to try to bridge the asset the Bitcoin asset to a sort of L2 of to or to another blockchain and to enjoy the programmability there but there even The Limited Pro even the bridging is hard to do for Bitcoin precisely for the same reason which is the limited programmability because Bridges sort of need to understand what happens in the outside world whether it's an L2 or another chain so bit VM is kind of gives people hope that one day we'll be able to build such secure Bridge so that's a second develop that's a second development technological now the third development is that people now start

thinking hey if you can do so much even with the limited programmability maybe we should consider another soft Fork of Bitcoin that adds in one or two new up codes and this is the op cat movement the op cat movement that we're seeing and so now basically the Confluence of all these things makes Bitcoin a much more promising places to develop new technology so uh David the a couple couple follow-up questions for you there maybe just on the the cultural squishy side here you know Bitcoin for famously had a Civil War fought um to keep it first of all small blocks but also I think part of the design philosophy of Bitcoin was

always this Simplicity over complexity you know you can go back to those old Bitcoin Forum posts and people had long really thoughtful intelligent arguments about this and I Bitcoin I think for For Better Or worth for a long time after the block size War when they settled on you know the the smaller block size they really leaned into leaned into this and a lot of the the folks that you started to see you know gain traction and large voices in that ecosystem were were really against change and from someone who's been following Bitcoin obviously for a long time but it isn't as deep in the ecosystem you know it seems like there's this new guard of folks such as yourself um guys like Robin lonus right the developer of the uh or you know one of the authors of the bit VM U Casey

rmore of ordinals and you know it it seems like there's kind of a this this drive towards actually creating utility for the blockchain this also solves the security budget problem that Bitcoin has had for some time so how accurate is that and what is the mood internally has there been push back on some of these developments like adding back opcat and things like that like historically Bitcoin has been really averse to those sorts of things so what does the internal sort of atmosphere feel like with all these changes taking place yeah so you know there's a saying in actually an old saying from the Bitcoin Community which is all other blockchains are test nets for Bitcoin in fact Bitcoin itself has a

very poor test net infrastructure there's hardly any test net on bitcoin we we we are we're victim of that because when we launch our test net which obviously uses a Bitcoin testet a Boton neck is actually not our own blockchain but our own testet but there a Bitcoin testet we ran out of uh token test net token for that uh so uh so the the saying is that other blockchains are tested for Bitcoin so what does that mean right that means that hey if you have a New Concept new technology like growups hey then you better test it on some other blockchain before you bring it back to bitcoin and that's exactly what we're seeing here if you think about it nft is something that's developed not on bitcoin

somewhere else brought back to bitcoin through or nodes uh staking that we work on is a concept that is invented obviously in the proof of stake well in another blockchain ethereum uh saline Avalanche brought back to bitcoin bit VM is a very much a concept that came from the rup uh optimistic row up in particular a technology that got brought back to bitcoin so here what we're seeing here is that people are seeing that these concept these technology and applications are having Traction in other blockchains and they say hey why why should Bitcoin be left out and I think that is sort of one of the cultural plus technological movement

that we're seeing here can you just give uh listeners an understanding of Babylon and how Babylon enables Bitcoin staking and then we can get into you know some of the parallels between what babyon enables and you know like the igen layers and reing platforms that listeners might be familiar with name them yeah in fact I I think I start describing about bitco Babylon Stak King Bitcoin Stak King we respect to Igan Le in fact and since this is a recking season uh so let's start with that and uh so what Ian Le did uh which is the following they said hey you know the merch in fact I started before the merch actually before the

merch but they said hey once the merge happens then there's Eve staking okay what can we do on top of e scking which increases the capital efficiency of e scking that's essentially you can think of one starting point of I layer now if you think about that in the Contex of uh Bitcoin because you know e is a very valuable asset obviously but what is more valuable than e is Bitcoin Bitcoin is about three times two and a half times depending on what time you look size of uh Bitcoin 1.3 1.4 trillion so one then the first step you're stuck because obviously Bitcoin doesn't have

sticking okay because Bitcoin is proof of work so therefore there's no way to build an ion layer for Bitcoin because Bitcoin doesn't have saking so what we did is that we said hey let's take a first step which is let's built Bitcoin sticking but now because Bitcoin is proof of work we can't use that asset the Bitcoin asset to secure Bitcoin chain unless we decid to change it to proof of stick and obviously that is not going to be a path that any startup would take uh so then that's where the a layer concept becomes viable because a

layer basically says that hey you can actually use an asset to secure another chain another abs and so in some sense what we're doing is we're combining ecking and I reaking into one package and we call Bitcoin sticking so taking Bitcoin a very large valuable asset and enable it to become a sticking asset not for its own chain but for other proof of stti systems but for other proof of stti system any proof of stick system that will benefit from from sticking can uh leverage this Bitcoin as a sticking asset and that's what our

technology enables I think that's super helpful and um maybe just to double click a little bit more into like the technical design differences between Babylon and and Igan layer just since folks know Igan layer and really the value prop as well um so the Igan layer you know if you need basically a network of operators and economic stake right to secure those operators they make both of those things veryy easy um ethereum has thousands of operators already or maybe hundreds of individual operators um and for Babalon you know the the economic stake story makes makes sense now right you have you can basically aggregate a bunch of um a bit Bitcoin on Babylon um that is going to go provide Economic

Security to to other networks but what about the operator side is that something that you guys are are interested in providing as well um where where maybe it's operators of the Babylon chain that are also going to go secure these these other um you know external networks or is it more hey we're really focused on the economic security side you bring your own operators but and we'll give you you know infinite amounts of of Economic Security so operators are very very important part of the Babylon protocol so uh in fact we have one dedicated team member just to uh collaborate with operators so who are these operators these operators are just

existing validator companies like P2P figment Etc so we're not inventing a whole new class of people now what for the what we asked them to do what they ask them to do for the Babylon protocol is to provide a service what we call a finale provider service Okay so what our design is entirely modular because one important set of customers we have are existing proof of stick chains okay or existing growups that would like to add Bitcoin sticking as part of the sticking asset so they may have so I give you a good

example which is one of our partners is the cosmos Hub okay so the cosmos Hub already have atom as a sticking asset but they want to in increase the security because they themselves are security provider they want to increase the security by adding Bitcoin So Adam is a reasonable size asset say two say four or five billion Bitcoin is you know 100 times that right yeah is it about 100 times that yeah maybe more than 100 times even uh a few hundred times so adding Bitcoin so therefore this is a modular design we are adding Bitcoin St king and the addition of Bitcoin sticking is to

have the validators running the so-call finality provider which sort of add an extra layer of signatures on the cosmos Hub blocks and that would give it an additional level of security from Bitcoin so this has always been sort of essential to our design and this fin provider is a very lightweight very lightweight operation so this is kind of piggy back on the existing validated infrastructure read so they're running notes they're doing foundations already and they're adding this extra function which is a very small incremental increase in the complexity of their operation okay that that's helpful and is

there I guess this is might sound like a dumb question but when would would should it be considered staking or raking when you're basically depositing to Babylon and choosing to secure a network um meaning are there are there slash faults on Babylon itself right yeah so uh so we have a first blockchain that would takes the Bitcoin sticking which is the Babylon chain The Babylon chain actually has a functionality which is exactly what we talked about a year and a half ago which is a Time stamping functionality that time stamping functionality turns out to be very useful for any blockchains for any blockchains that would like to receive the Bitcoin

staking because basically time stamping helps uh enables uh secure way of unbonding of stick okay so babyon chain is like the analogy of igen layers IG ba okay it is the first blockchain that would enjoy Bitcoin staking so uh at this point I lost track of what your original question is sorry can you is it um the original question was is it's like we we kind of call everything reaking these days oh okay staking in the first place okay so the way we CAU is that people are staking on the Babylon

chain and then they can choose to rtick on other blockchains for example the cosmos Hub will probably be one of the first AVS chains that will come into the Babylon protocol and so people can choose on top of sticking on the Babylon chain they can rtick to the cosmos help as well okay that's that's super helpful um and maybe just to tease out a couple more design differences um we have this concept of of pulled versus attributable security with igen layer um or pooled versus isolated security now so so what's the first what's the first name uh pulled so when you're basically

reaking the same assets to multiple avss right or you would restake to an operator who who secures multiple avss um I'm curious with with Babylon does that concept also map over where the same Bitcoin could be you know restake to to multiple different consumer chains including the Hub or different Cosmos chains um or is it you know are there differences in the design that make it you know uh I guess isolated isolation right uh a requirement saying like Okay you can only restake one yeah before I answer the question maybe I would say a few words about sort of a little bit of Under The Hoot thing which is what is so because the the audience may say hey wait a minute you were just telling us

that Bitcoin doesn't have a smart contract and we know that I can layer has smart contract so how can you do what Ian layer is doing so that doesn't seem to make sense so it turns out that although Bitcoin doesn't have a smart contract it has a scripting language okay and we were able to write the staking contract okay entirely on bitcoin natively using the scripting language using the scripting language so very importantly we never move the Bitcoin from Bitcoin to say The Babylon chain and then it work from there that could be one design but we decided not to do that because why because that would involve bridging and bridging is what a lot of people wants to avoid in

the first place and so our design is entirely natively stick on the Babylon chain but we figur out way that it can provide security to prove of s chain okay now now the sing contract basically the you you has a part called a slashing condition okay and the slashing condition is what connect the sticking contract with the proof of stick chain and so our technology allows one to specify a stick a sticking transaction that has multiple slashing conditions if they want to stick to multiple chains

so that's where the that's where it that's where it comes in um yeah and I think that that speaks to um I think some of the advantages and and disadvantages of of building on on bitcoin itself um I'd say maybe one advantage is that you know we talked to S Ram a couple episodes ago about the complexity of of enabling native staking and Native reaking right versus just lsts and you have basically to communicate with a with a a consensus layer um which is very challenging and for you guys it's more about how do you communicate without you know to the proof of stake chain without um without any smart contracts and so I'm curious of all the things you've built so far

has that been the most challenging um to figure out yeah I would say it's the biggest Innovation that we came up with which is to allow the proof of stick chain to communicate the slashing events back to the Bitcoin chain when slashing needs to happen so the thing about slashing is it's a bit of strange thing because in a proper operation of approval of slick chain slashing should never happen however your technology should always allow the possibility of slashing so that it can be effective deterrent to bad behavior and we figure a way to essentially communicate the slashing

event back to the Bitcoin chain because you remember what I mentioned earlier is that one of the challenge of the Bitcoin chain because of the lack of smart contract it also makes Bitcoin chain very difficult to communicate with it's like a dumb person you keep on telling him something over and over again it just didn't get it it just didn't get it uh but here what we figured out is that Bitcoin is not dumb Bitcoin is a simple person is a simple person there's a difference between simple and dumb and because of the Simplicity we are able to sort of use cryptography to help Bitcoin a little bit and that's enough to communicate the

slashing event back to the Bitcoin chain uh and as you mentioned right uh the real the really important thing about Bitcoin is the Simplicity and in some sense the Simplicity is actually helping us here in a sense that you can't write very complicated contract on bitcoin and therefore from a security point of view it's actually much easier to audit it's actually a very small number of lines of code the scripting contract and so uh is because the very limited things you can do there very limited good things you can do there also very limited way of making mistakes so that's the that's the uh that's the interesting uh design

environment of the Bitcoin chain uh well I wanted to get a sense of that David and and poke a little bit because my understanding right of of uh Bitcoin scripting language is exactly what you just said is that it's much more limited in terms of functionality and so again maybe for folks that have a mental model for what's possible via igen layer and what that setup kind of looks like are is there what like limitations do we have um around the world of like staking and reaking for Bitcoin um that might not exist for uh some of the like smart contract chains out there yeah um so to give an example using our own protocol as an example right so a a typical slashing event a

very important slashing event is a so-called double sign so in if you go back to nakamoto's white paper he said the whole design of Bitcoin is to solve the double span problem is to solve the double span problem and so double sign double sign is the related to double span that means me that the validator is trying to assign two blocks to F to F the blockchain now that is a slash event and in fact that's provable because what happens is that you sign two blocks okay you sign two blocks and the two blocks are the same height however that data is entirely residing on the proof of stick chain so if you send all that

information back to the Bitcoin chain the Bitcoin chain has no idea how to process this right for example the Bitcoin chain needs to First understand are these actually valid signatures that the the valid design and now they have to understand the whole signiture scheme used by the proof of Stak system and so how do you program all in Bitcoin is almost impossible okay whereas on ethereum you can program that very EAS relatively easily as as a smart contract okay and uh that's essentially what I letter do I smart contract are basically do to program various slashing conditions okay various slashing conditions so what we do to overcome that problem is to say okay well what we

can do is the following we can do is that we can design a cryptographic scheme so to add a little bit more complexity in the proof of stick chain so that when you do the double signing then the private key of the validator will get leak to anybody observing the block so now we can build a set of so-called watchtowers like optim like in optimistic rups that can just inspect and once they observe some strange situation like double sign they can extract the private K validator and they

can just use that private key to spend the Bitcoin that sck or a fraction of the Bitcoin that is sticked so the thing is that Bitcoin doesn't understand much but it does understand that oh if someone has the private key then they can sign to spend the Bitcoin so that that it understands and that is the only functionality we need because of our cryptographic Innovation uh that we did that's incredibly helpful and could I I want to ask one more kind of dumb dumb question if you don't mind uh I'm curious how this you know we've we've most of us have played around with Igan layer we've seen the ux uh we kind

of understand the flow right how does how is it going to look on Babylon um am I going to be using basically like a Bitcoin wallet to deposit my Bitcoin into a Babylon uh right on bitcoin L1 and then I'm gonna have a Kepler sort of interface so once the bit you know once it knows my Bitcoin has been deposited then I go choose an operator to delegate to and then I choose chains to restake to or do I is there a like a one of those steps doesn't exist on Babylon or um is that is that actually right yeah so uh one very important uh uh concept I want to share with the

your audience is that the sticking of the Bitcoin is entirely an interaction between the Bitcoin holder and the Bitcoin chain not with the Babylon chain actually not with the Babylon chain it's with the one and only Bitcoin chain and so what happens is that you your your Bitcoin is on the wallet okay and what happens is that you will be sending the Bitcoin to your own to another Bitcoin address but your still your own address and that address has two functionalities to it which is

one your Bitcoin is locked for a certain amount of time to enable staking and two is that it can be spent through some condition which is a slashing condition okay and this contract will just get submitted as the utxo transaction so in Bitcoin language this is the the main uh transaction are soal utxo transaction so the saking transaction is a utxo transaction with two spending conditions submitted to the Bitcoin chain that's it okay and how the operator is connected to this is that the signature that is needed for the

slashing condition is precisely the one that can be provided by the operator that you want to delegate your stick to so that's it so it is a relationship between you and the Bitcoin chain with the signature or the key of the valid involved in that sticking contract okay that makes sense it really all happens on bitcoin um and and if you want to say stake to say i' you know I've stake to the cosmos Hub and then I want to stake to uh Cosmos chain number two right is that me just going and adding another slashing condition

basically uh again just staying on bitcoin and and having you know a different sort of utxo output or or maybe another sort of potential burn address uh output you'll be adding so you if you are stick so so the relationship between very importantly right the relationship is between you the Bitcoin chain and the finale provider or the operator okay the operator of course is signing for a particular chain but your relationship with is with the operator now if the operator decides to validate for multiple chains then you will be relate you'll be sticking with multiple chains

but in our design we mainly thinking of each operator is validating one chain and if it wants to validate multiple chains they should spin spin off multiple instances as opposed to use the same key for mple chain uh so yeah so when if you want to add a validator another fale provider for another chain then you will be adding a spending condition to your staking transaction yes hey everyone this episode is brought to you by namada the shielded asset Hub protecting the future of the multichain the ma is a chain that's near and dear to my heart because in previous seasons of B 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 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 Nana 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 and returns NADA 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 NADA are doing I highly recommend that you go and check them out at n.net you can follow their mainnet launch which is soon TM very exciting tell them that I sent you click the link bottom of

the show notes he 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 Fink 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 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 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 XYZ 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 David I want to I want to transition a little bit to the supply side of this market and try to get a sense of the the magnitude of the opportunity here so part of what we've been talking about so far in the season of reaking is there are previous instances of shared security which didn't take off quite as much for a variety of reasons so we've been giving I think polka dot deserves the credit for sort of the first uh you know major major instantiation of shared security The Hub is another good example I layer really took off much more than either

those first two and I think there was kind of this combination of they fixed a lot of the um they fixed a lot of the implementation details that maybe precluded people from uh like polka dot or the Hub from taking off quite as much but also they picked the right asset eth right I mean it's much larger market cap much more liquid people were used to using it and things like and paying for nfts with it Etc and so you know when you fix the implementation details and then you launch into this enormous Marketplace you know we see the incredible amount of success that igen layer has had and so I think that it's not just babyon but I think that's part of the reason why people are so excited

about ordinals and Bitcoin defi in general because as large as the market cap of eth is Bitcoin is much larger um it's over a trillion dollars of market cap I believe today or somewhere in that in that neighborhood and you know people think it's a pretty massive opportunity on the other hand uh there are sort of cultural differences in terms of how holders think about their Bitcoin versus maybe their eth again in ethereum land people are used to paying for things and like they're used to paying gas and they're used to uh you know staking like moving their eth into smart contracts and borrowing and lending and doing all this stuff and they're not really used to that in in Bitcoin land so can you give us your sense of you know how how do you weigh these different factors

maybe the pros and cons of the Bitcoin versus the eth opportunity set and and rough size yeah so um that's a really good question uh so I think to our first order right the Bitcoin is a very big asset is like three times more of ethereum and I think you're right I think IG Le took off as compared to say the cosmos Hub or the polka dot is one of the main reason is the huge size of this ethereum asset and the timing is impeccable in the sense that the merge so in some sense shiram is a risk taker because he launched Ian layer before the merge happened who knows whether the

merge will happen or how long it takes to happen because there was many many delays of the merge so I think he he bet very correctly that the merge will happen and it happen in good time so um so Bitcoin is a very big asset now you can think that indeed it has uh less use cases so I think the main observation is that the fact that Bitcoin has very little use cases okay as compared to ethereum it's a little bit of a double edged sort because on

the one hand maybe you can say that the people are not very used to it but on the other hand is that right now it's just if you ask any bitcoiners what did they do with the Bitcoin 99% of the time they would say nothing it just sits on the wallet now bitcoiners are not really like some alien people unlike you and me there are also people they're also investors in some sense in the crypto community and in fact many of them probably also hold eth okay so they know that the eth is useful they know that they can stick the

E so therefore out of this 1.4 or 1.3 trillion Bitcoin our bet just like I can layer bet on ethereum staking our bet is that there will be substantial number of people Bitcoin holders than the Bitcoin that would be eager in participating in the staking Market provided they can do it in a very secure way and that is the product that we're producing to satisfy that demand Supply I should say Supply exactly yeah um we were talking about the exact same thing before uh we we started the show and kind of uh

speculating into what will who will which asset will have the lowest cost of capital for for staking right uh because I think that will make the the that asset and the reaking platform that supports it the most competitive um and yeah I think you could make an argument that Bitcoin will be able to offer the cheapest security because it's the most abundant right and it's not earning any yield right now uh and there aren't that many other things you can do with it right like go lend it in a defi protocol um but at the same time I think yeah go for it yeah I think I think one very important point to think about yield right think about yield for Bitcoin is that unlike polka

dot or Cosmos Hub or the cosmos those uh reaking or those security sharing solution are very ecosystem Centric Cosmos is Cosmos po uh polka dot relay chain is polka dot right but Bitcoin is like a un universal currency in loss of people of Bitcoin so therefore there's a much bigger opportunity to use Bitcoin as a staking asset across many many different ecosystems and therefore there's much more opportunity to get reaking yield from Bitcoin because now you don't need to secure only one chain in one

ecosystem but you can secure multiple um proof of sck systems and so even though perhaps uh so therefore the advantage is that now the the Bitcoin can you the a chain can only need to provide a very relatively small yield to bitcoin but because it's Universal there could be multiple chains aggregating this yield to still gives a good uh yield generation for the Bitcoin holder so I think that is another angle that I would like to mention yeah and I I think we have a few more questions because I really want to dive into the demand side of the market basically what you're seeing on that um

which I think you're touching on right now but quickly before we do I I am curious who uh who are the stakeholder Types on the supply side that you've been chatting to the most that are the most you know interested in basically finding reaking yield uh for their Bitcoin uh are these are you talking to a lot of miners right that are thinking about you know long-term sort of security budgets and um how they're going to be profitable right are you talking to kind of like Crypt native whales I I'd be curious if there's any or funds yeah we talking we're talking to anybody who has Bitcoin you have Bitcoin I'll talk to you okay uh yeah so um yes miners is one

side and a very important class are basically wallets and custodians because they they have a lot of customers so for example a wallet like okx wallet they know that there are hundreds of CAS of Bitcoin for their customers they know that they're Idol because they monitor what happens to those Bitcoin so they know that if they integrate with us that and provide a very good sticking UI to their customers then a good fraction of them would join our platform through the wallet so we are so you know we are not really a sort of a retail so we don't you know go and

talk to every individual customer we do talk to some of them to to do educational thing but in terms of the integration effort we try to integrate with wallets with custodial and so forth so that they can be our channel to for their customers to bring into the protocol so that's sort of our main strategy like for example with uh Cobo we just had an announcement of integration with coobo Cobo is a very important custodial services that many miners uses because Cobo is actually started by f2p founder f2p co-founder one more question for you David on on this side of things before

we get into the demand side so uh you know or maybe just almost like a a closing point which is the I was actually I got to give credit to uh David soy from alen Labs who gave me this word of virgin ground actually for Bitcoin and I uh you know miles and I were having a conversation actually last night about something kind of unrelated but this idea of sort of fragmentation um and it it does strike me that you know I think the when when you talk to some folks especially in the ethereum ecosystem you know they'll say this like well the bitcoiners just want to uh you know bury their you know if they died with their cold their cold wallet in their hand uh you know it be like with all their Bitcoin to be a life well-lived right like that's uh but I

agree I I I think that there are a bitcoiners are not so different like I have a lot of Bitcoin as well like that's what got me into crypto originally and um I think you actually have a couple of positive like proof positive points where like for instance when blockfi was in existence like that was super popular with the bitcoiner community right that they wanted yield on their Bitcoin um and because you actually don't have many choices for what to do with your Bitcoin I actually think that it could go the other way and uh there's like less competing interest for for what to spend with so yeah I think the combination of the higher market cap and and fewer choices actually could be super I I agree with you I think it's a double-edged sword and it could cut the other way U that

argument really resonates um I want to get into the the demand side of things here and get a sense of okay so Bitcoin and in a sense Babylon through reaking is now competing with the likes of Igan lay because igen lay is also um and I mean maybe you disagree but in a sense right IG L is also going out into the world and saying hey we want to use this uh eth to secure other chains and get paid the native yield of of these other chains and so I want to get a sense um from you of like what does the what does the opportunity set and World on the demand side of things look like for Bitcoin reaking uh there are obviously some like Bitcoin native Solutions like probably the Bitcoin l2s uh I would guess are like kind of the most obvious

one um but I also want to get a sense of like you know even outside of that like where does uh Babylon see opportunity yeah I I think uh you know I think the focus of aan Lair and focus of Babylon on the demand side is a little bit different of course there's some overlap but I think their focus has always been on innovating new avss on the etherum ecosystem so you look at the mainnet in the mainnet the the AVS they launched many of them are new avss they're not existing chains so whereas our Focus has more been earlier B

on sort of existing chains existing chains or existing ecosystems who would like to get Bitcoin sticking so that's one side and another side where there's very little overlap is the recent excitement with Bitcoin L2 okay because people wants to build Bitcoin L2 uh our our protocol becomes a very natural security sharing mechan mechanism for them to share the secure Bitcoin so because if you're L2 then you're supposed to get security from Bitcoin how do you get security from Bitcoin Bitcoin Bitcoin sticking it becomes a very important form of secur

Shar for them so a lot of our partners that we have been integrated working with are Bitcoin L2 so I think those are the sort of the two big classes examples like Cosmos Hub osmosis that we've been talking to and several other chains uh uh and uh and then the Bitcoin L2 world love to um understand a little bit more about what the reaking use cases are in the Bitcoin L2 World um so of course we have like a a ton of these rollup microservices or really just microservices that are targeting rollups

that are built on igen igen layer including obviously igen da itself um that are providing all sorts of things right uh but I'm curious what if it the same categories like map over perfectly to bitcoin and its l2s or maybe you guys are starting off with something as simple as just securing the um you know the the trust minimized Bridge right between Bitcoin and the L2 itself um or maybe it's a sequencer right I yeah the Bri I have to tell you the bridge is a longer term role map brid is a is probably one of the hardest problem in Bitcoin soft I mentioned bit VM right but bit VM is still in his a little bit of more of

experimental stage so Robin lus the inventor BDM is actually our collaborator as well we work together with him on on bitcoin staking actually uh and so we know that there's still a lot of experimentation of different architectures of bit VM how to reduce the cost the cost is still very high on the Bitcoin the transaction fees are very high Etc so it's still a little bit early so our current main use case for bit for rups L2 rups on bitcoin is to provide what we call fast finality we just actually published a Blog on this Bitcoin secure fast finality the problem with Bitcoin row up is that Bitcoin is very slow in

achieving finality and so if you have to go back and use the Bitcoin finality which is like six block deep or 10 block deep that will take you hours to get finaly okay and by using Bitcoin sticking we can help the row up to get fast penality so that's the main technology that we are building in consum conjunction with the rest so the r like outlayer of collaborating with us and they will be providing Bitcoin saking as sort of one of the option for people to build row up s when they build row up they can pick Bitcoin sticking to get faster analy so that's what we are working on right now on the row up

side okay because yeah I think the two obvious downsides of building a rollup on bitcoin to me are the it's the time to finality and just the cost of of posting any data on bitcoin so are they they're datail that is a data availability problem yeah so yes yes okay and it's and with the are they basically using Babylons like checkpointing services to um increase the speed to finality or no no no no no it's using Bitcoin sticking to a so it Bitcoin sticking is not only useful for proof of stick chains but you can use it for R up as well because R up is like a

So-Cal sequencer the sequencer is like a single node proof of stick chain and so it turns out that we figur out only very recently actually that Bitcoin sticking can also increase the security of that centralized equin interesting okay yeah I'd love to learn more just published a Blog on that about two weeks ago so welcome and um and then the other side of your I guess the demand side of the marketplace obviously Cosmos is is kind of uh the natural place to go right uh given that babylon's a cosmos chain so you can communicate with those chains very very easily um and I don't know is it fair to say that you know maybe

Babylon and Bitcoin is going to have more success with I would say like Cosmos or other smart contract app platforms because they don't view Bitcoin as a direct competitor with with their ecosystems right there's there's no like smart contracts on bitcoin um or is it mainly just because you know Bitcoin is this asset that probably the only asset that everybody in crypto you know all holds and all feels off enity for I think Cosmos and Bitcoin there's some very natural synergism uh because as you said Bitcoin has no smart contract and therefore it's not really competing with terms of the services that the customers chains provide also Bitcoin is a very big asset and actually What's Happening Here is that maybe I

should mention something um is that a lot of people are now building liquid sticking protocol on top of Babylon so think about what happens in ethereum right e thicking what is the first thing that e scking enables was Lio basically so in some sense many people are building the LI though for Bitcoin on top on top of Balon yeah so then the natural narrative would be chains that receive Bitcoin sticking can also receive the liquid token of the Bitcoin stick so that they can get security and liquidity and liquidity is very important for many Cosmos chains right

and so would that LST be specific to the chain and operators that it's staked to um meaning that you know if a let's say like the cosmos Hub um if you're restak your Bitcoin to the cosmos Hub and you have you know a receipt voucher right that's liquid on top of that is that not fungible with let's say like a a Bab on LST that's restak to a different Cosmos chain yeah so there are multiple uh lsts and multiple design the ones I'm familiar with is that uh they're non-fungible yeah non fungible so

they're the receipt is specific to the Target chain the target chain where is Meed but that's really interesting um because you know I think we've we've talked about that on earlier episode with with Sam Hart and some other um you we're talking about lrts and I think that you know explicitly translating security into liquidity is is um you know I'm actually surprised we haven't seen that happen with with lrts yet um but it sounds like that's something you're pursuing with Bitcoin which is great yeah so a few of them are launching probably around the same time as we launching our main so David maybe zooming out of of this for a second and as we start to wind down here you know help us

understand uh you know I don't want to push you into numbers or anything like that but help us get an order of magnitude here in terms of what you're thinking about this ecosystem is going to look like I think that igen layer obviously there are some core differences in terms of just the overall function and design of the marketplace and the chain Etc but I think it caught us all by by surprise in terms of just how quickly um they started to see success and I think a lot of people now are looking at Bitcoin like very smart investors users Builders Etc and if like staking is just the core primitive building block of all the stuff that's trying to get built on bitcoin whether we want to call it staking or or reaking

so you know let's just say we uh it's been another year um right before and then we have you back on B curve again and where we're talking about everything that's happened in in Babylon and the size of the ecosystem and all that stuff you know what are we going to be talking about then like do you have a sense of the rough order of magnitude that we're going to be talking about here uh what should folks be like looking down the pipe in terms of this whole world of Bitcoin reaking and Renaissance in general yeah so um if you look back at the success of Igan layer right I think one of the success of igen layer is to use the supply to bootstrap the entire ecosystem the accumulation of tvl on the

igen layer spect uh platform gives a uh sort of a snowballing or a flywheel effect and so we are following a similar strategy because we are but for maybe somewhat different reasons our reason being that we are recognizing that most Bitcoin is Idol and so therefore there should be enough of a supply from even like if you think about it right like 1% of all Bitcoin which is roughly like say bitgo uh uh the bridge uh what you call uh rap BTC around 1 1% if you look at that number 1% of Bitcoin is about 10 billion

or 13 billion okay so if we can attract somewhere around there then we should be able to get a good amount of Bitcoin stti on our protocol and that should provide flywheel effect for projects to join because the projects would like to get access to that uh Capital both as security and perhaps as liquidity as well and I think that's what we are uh shooting for now I have to have a caveat here right which is you're correct that e sticking PR precludes ion layer retick so in some sense they already have a very solid

foundation right because people who stick on e resticking is a the marginal additional step is smaller we are basically combining two because we're kind of playing catchup you know because Bitcoin start from a low level we're playing catchup we need to help Bitcoin first to get to ethereum level and then we can go the I layer reaking so we kind of playing catchup and so in some sense we are also a bit of a more experimental so if you ask me one year later to tell you estimate how much TV we have in our protocol I would say that I think is some as someone said uh predicting the future is difficult or

was it the predicting the past was difficult so what I would say is that we are an experimental right our experiment is essentially to test out my hypothesis that I said earlier that there are a lot of idle Bitcoin that would like to have this very basic but highly secure way of earning yield and uh so yeah I leave it at that so one year later we'll review the result of the experiment I want to be back we are optimistic uh cautiously optimistic well David uh you've been super generous with your time here and uh congratulations on all the success with Babylon and guys if you're

listening to this um I would I would highly recommend that you go back and listen to this episode that we did with David back last year and just some of the stuff we were talking about and how how far uh he's come frankly um and all of Bitcoin like the whole ecosystem is just so exciting and um David if uh if folks want to find out more about you or if there are holders of Bitcoin uh that you might want to talk to what is the best way to get in touch with you to follow you or to I guess get in touch with the Babylon team if uh if need be yeah uh you can find me on uh Twitter uh dnts is my hand Babylon chain.i is our website Babylon chain is our Twitter please follow us and um you can go to

the website directly to our test net we have a test net running right now uh just the last test net before a main net phase one launch so you can stick some test net Bitcoin and try it out a lot of people have already yeah or actually Shameless plug for blockworks here but David's going to be speaking at our conference permission list so you can come out there at Salt Lake City October 9th through 11th meeting yourself um so great all right uh David this has been a ton of fun thank you so much for doing this we really appreciate you uh and uh yeah we'll have to do it again in another year or year and a half yeah thank you so much for all the great conversation thank you course thanks David bye bye

all right partner great episode great to talk to David after a little Hiatus from his last episode on velro it seems like babylon's come very far away yeah and and to to your points on the on the recording I mean like Bitcoin is has come a really really long way uh since we last chatted and I think at the time we were talking a lot about okay you Bitcoin has all these properties that make Bitcoin the asset you know um so durable and and and uh probably like the hardest sort of crypto currency in the world and we're trying to like figure out how Bitcoin can export those same Properties or turn those same properties into more services right um to other ecosystems and the cool part is that uh

in that in the time since we've um recorded that Bitcoin now has its own sort of native smart contract ecosystem built on top of it right yeah so it's not it's not just about exporting now to like places where activity actually happens like in Cosmos and things like that but it's it's there's more native opportunity here which I think just makes it a little bit easier um you know to to validate the opportunity for Babylon you know what's funny is you and I did this episode with Zaki and shiram about a year ago we've referenced it a couple times this season about the very clear fit in between ethb based reaking via

igen layer and Cosmos app chains as uh chain design and ironically we had already talked about that and guys like David had seen this fit in between Bitcoin and Cosmos app chains even before this and so yeah I think there's there's a real natural fit there I I guess to maybe discuss what you know because I think this is the number one question that comes up during these um during the discussion about like Bitcoin defi in general but it's what is the attitude of bitcoiners going to be and at this point in time I think I personally come around to I thought David was almost pretty humorous about this like Bitcoin bitcoiners aren't aliens you know they're they're people just like you and me right and in fact they probably own eth and do all this

other stuff and I I think the the combined market cap and I think bitcoiners will be much more willing than than people think to opt into things like staking and Defi and move moving their Bitcoin onto l2s and things like that so I I'm I'm pretty much in the camp that I think this is a huge opportunity in terms of the supply side I think on the more the challenging side is going to be you know we got into the weeds a little bit on some of the limitations right and Bitcoin obviously ethereum this is the whole point of ethereum is that it's a Turin complete you know General smart Contracting platform Bitcoin is much more limited in terms of what you can do from a functional perspective and I think and also because they haven't been building this native defi ecosystem that has all

these requirements of different types of abss I think the demand side is going to be a little bit challenging uh and so actually one of the on the maybe the other side of the coin that I think there's going to be tons of demand to stake this stuff this is sort of the challenge for igen layer as well right which is that they had there a ton of people that were willing to restake their eth but there weren't a ton of abss and I could actually maybe see that being uh even an even more exacerbated challenge for you know Bitcoin uh reaking at least in the beginning but what do you think yeah no I agree with that um with Bitcoin it's a bigger pie that you only you don't need as large of a slice of right uh as Ian layer does to

for that to be like a a huge huge huge tvl number right um to get to you know 20 billion doll TBL would you know the percent of total Bitcoin that would have to opt in to do that is way less than the percent of uh total ethereum that already has opted into that right so there's less less people that you need to convince but I think it's a it's a bigger uphill battle to sort of um I don't know get get folks to come come around on doing something with their Bitcoin obviously um and then yeah let's say that like you we underestimate how difficult that sort of you know uh conversion process is going to be and then they do end up with

like 50 billion dollars of like Bitcoin TBL and uh like okay what do we what do we do with this right like how do we start chipping away really at you know putting this Bitcoin to work and that's when that's why I was asking about pooled versus you know isolated Capital like in the design right because the same Bitcoin can be put to work in a lot of different places then you know I think that might that might make things a little bit easier um but if you're kind of you know having these like onetoone sort of staking relationships then yeah it's just going to take a lot of those um to get up to a point where you've even made a dent in what the tvl

is um so I think it helps now that again like it's not just looking at exporting Bitcoin to these uh you know other ecosystems right for security it Bitcoin can look just do its own rollups right um as a as a source of demand um but yeah there's no such like the concept of uh we've been talking a lot about this like feature Edition you know use case of reaking for ethereum right we're talking about like proposer commitments and things that are having you know using reaking to basically optimize like L1 blocks um I don't that's not obvious it's not obvious to me like if any of

that really Maps over to bitcoin um that said I think everybody you know is like Bitcoin is um is less directly competitive with a lot of smart contract ecosystems right and so this whole idea of alignment might actually be um you know more widely applicable to for in AIT in the context of Bitcoin than it is for you know like an an app on or like some part of infrastructure on salana is never going to be want to be like secured by restak eth right um but you could see little factions of salana or Cosmos really you know interested in in bringing over

Bitcoin um so that's like the The Meta strategic sort of um you know game here and I'm not sure how it's gon to play out I have a here's here's maybe another mental model that you could look at for just reaking demand in general is you could look at some of this as being like ecosystem specific and maybe that's a mix of uh feature Edition that we've been talking about like you know proposer networks opting into performing new tasks around consensus and things like that uh and then maybe there are just going to be you know some things that there's like a middleware provider that only does things on ethereum and for reasons of alignment and maybe even like insurance and liability reasons like you just it just makes sense to basically

have most of your uh you know your restak security purchase through in denominated underneath but maybe there's another world which is I I can I can imagine a world in the future right which is this future that we all think we're going towards where apps are much more ecosystem agnostic and in that world I think Bitcoin does very well because in in this world of like this future end state of like fiveish years or five to 10 years or God willing before 10 years but there are large applications that aren't necessarily associated with any one ecosystem and maybe reaking at this point is pretty commoditized and it's like a back-end design decision that you'd opt into in the same way that you're like a

cloud-based application that no one really cares or has to know about it just works like this on the back end and I think in that world Bitcoin reaking does really well because it is first of all you can procure huge amounts of cheap uh you know Bitcoin security and it also is kind of asset agnostic and I mean frankly I mean you got companies out there in the real real world that are holding it on their balance sheet already I actually am not a huge believer in that but like yeah you got like clearly um it's actually cross the casm into the mainstream of stuff that people are willing to hold and find valuable so I don't know I think that they probably there's a good amount of the the ecosystem specific use cases are really dominant right now they it'll probably be enduringly a part of the pie

but it'll shrink and shrink and you know as we get further and further out I think that Bitcoin does better in that in that world I agree with that I do um I think it's worth calling out like we spent a lot of time getting into the the weeds with of the technical design and the differences between you know uh Babylon and and igen lay um and we were just talking about the differences between igen lay V1 and Babylon right um and we just had Ludwig and uh Lucas on right on the previous episode and they were talking about the importance of attributable security right so security like you know basically Insurance um and we talk about how that's like you can't argue that

that's a meme right and I think that's uh where igen layer and and other more programmable program like like services are probably betting on um you know in terms of long-term differentiation uh because that's just more challenging to do right right on on a Bitcoin um something that's built on bitcoin and so I'm not sure how that's going to play out but I think it is worth calling out that you know symbiotic um Babylon I think a lot of these these competitors are really focused on V1 staking which is basically good to cover double signs um but is not something that's going to be able to you know deal with like inter

subjective faults uh I think that's you know an invention that we don't know like how big a problem it it could solve attributable security like insurance we don't know just how big that you know the demand is going to be for that but I think um it's worth noting that you know the the road map of Ian lir I think is it's much more expansive um from a feature standpoint than than what others have have really started to or at least like signal that they're focused on um and that's not necessarily gonna means that like Ian L is going to win it just means that they're betting on you know additional demand from that rather than saying like this is the be all end all right now of of

aking yeah it's it's a really good point I um I I I do think that uh I mean just the technical limitations of I think it's just going to be difficult to know until we see it in production the technical limitations of something like uh Babylon on bitcoin versus and you know no shade of the Babylon team like they're you know excellent it's more it's more just like the core restrictions of like Bitcoin it's like it's amazing that they've been able to sort of programability yeah I agree okay so here's something I'm interested in outside of reaking in general but we've talked about how all these different blockchains are we're all building the same thing we're all converging on pretty similar design architecture where most of this the Computing work is done in some sort of

async way and then proved via ZK batched together and then posted down to a chain which is pretty dumb and unopinionated and like a the bulletin board thing right and that's like what we're sort of all lining on but everyone's coming from different directions everyone has different levels of technical debt uh and everyone is sort of optimized for something different originally and yes we're all going towards the same thing but I do have a feeling that some of these small design choices that were made along the way and the path dependency is going to be somewhat significant here you know like totally I don't think it's really one for one that you can look at and say hey this was the reaking demand of on eth and therefore it's going to be somewhat

similar for you know Bitcoin and salana and Celestia they're cord design decisions and those uh protocols that might impact the the use cases and demand so yeah totally totally and there's um you know they're there're are very different places in their own road maps I think as well um like we like opcat is going to be a very very big deal for Bitcoin to start competing as like a you know in that Bolton board sort of like you I guess value proper like positioning right with ethereum um and salana were starting to see a couple Roll-Ups come together and you know I don't know like yeah go for it I was just going to say and I I'm now really

just derailing the conversation here but I know I know you are more cautious on this than than I am but I really wouldn't be surprised if we saw especially some of the ZK rollups really pivot hard into the Bitcoin ecosystem first of all I just think that'd be interesting but I think it makes good sense and again I'm not trying to throw any shade here you can look at the tvl on defi Lama for yourself but there there are you know a couple of the rollups on ethereum have like clearly pulled away and it seems like they're getting a lot of momentum I think the the ZK stuff you know opens you up to uh something like rollups on bitcoin much more you know conduci than something like an optimistic framework and so yeah I could see some of these ZK rollups on ethereum they're like hey maybe I'm

struggling a little bit to retract tbll I could see them making this pivot um well yeah we saw the Stark net announcement a couple weeks ago right or they're like you know once we cat is good we're going to have a trust you know or um a trust minimized bridge to bitcoin right um and I agree I think the strength of Bitcoin is the just pure amount of liquidity right the magnitude of of like the market cap and knowing that if you only get 1% to come over to your rollup right that's an an enormous sort of success um I think the challenge are challenges are uh you know time to finality um cost right and then of of

posting anything on bitcoin and then you know maybe how wonky the sort of security is because you're kind of bending over backwards to make make all of this possible and so you end up with things that look a lot like multi sigs and so I think the combination of of of staking right to solve that sort of security problem um staking to take on you know like finality risk people that are willing to like you know guarantee finality on your behalf right um and then lsts or lrts I don't know what you want to call right those the super critical to unlock like the strength of Bitcoin which is liquidity and so what if you can get like you know have the bridge and the sequencer secured through

reaking and then all of the capital that's been restak to you you can convert into an LST that is able you're able to use right on that rollup or on that app chain um I think that combines like okay you're using reaking to solve problems that are introduced by building on bitcoin um and you're using you know a liquid reaking token basically to unlock like the the strengths of building on bitcoin which is which is liquidity um and it just sounds so wonky and like like really challenging to to interact directly with Babylon and like um just as it is with layer frankly and like that's why lrts were so successful uh in kind of inserting themselves in

between the user and operators right for for igen Lay I think lrts have a huge opportunity here um with Babylon because I think there's just as much complexity that they need to abstract on behalf of the user and I think we talked about with Sam this whole idea of like you know having these AVS specific lsts right um is going to be a big value problem and maybe that helps with this like huge over supply problem um if there's a rollup that only needs a hundred million doll of security but would gladly take $900 million right of liquidity along with that to have like a billion dollars of tvl then then yeah that's that's fantastic um maybe they

will overpay because they're willing because they know they're not just getting security they're getting you know they're converting that security into users of liquidity on their rollup um that that to me feels like worth paying for um but we'll see hugely man that would be a I mean you know one thing it'll be interesting to see is crypto's a pretty big place now and one thing that I've noticed is that uh I I I think you do a really good job of this as well but just like trying to stay on top of like all the different ecosystems is already pretty tough and a lot of the people that are at the heads of like one uh you know respective ecosystem like maybe they pay attention to another but it's it's very difficult to uh to follow

everyone and it it'll be interesting as all these ecosystems combine like are the do the Bitcoin rollups today are they aware of LST and LRT Dynamics and you know have they really been following along like maybe um but I think there's quite a bit of value more so than there's ever been in terms of like now that all these designs are converging like make sure you learn the lessons of other ecosystems frankly yeah it's um any I think there's a big opportunity here for folks that um can bring Lessons Learned From ethereum from Celestia from salana from Cosmos over to bitcoin um it's just really hard to have that level of like context and expertise in other ecosystems as well as like the network

and the you know having been like that closely to bitcoin core development to the point where like you know it's the right place to build for you as a developer um but there should be some teams like that I think I think our friend crane from an earlier episode might be one of them agre more to come from him but uh indeed yeah good stuff long crane all right miles this was a fun one buddy all right see you next week see you guys 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