Immutable Live Reveal: Scaling NFTs to a Billion Players with L2/L3

Transcript

coming in hot thankless Nation welcome to another state of the nation episode we're doing a deep dive today on scaling nfts with our friends at immutable and this is a particularly important uh Topic in the whole scaling nft strategy David can you give us a preview of who we're talking to you and what we're talking about today yeah we've had Robbie Ferguson from immutable on the show a number of times before but he has brought his CTO Alex Connolly to bring to along with him because we are going and doing a deep dive into some of the technical aspects

that is going to create a revolution in both layer 2 technology as well as nft technology as well as gaming technology but you and I Ryan are going to do our best to make this simple and make this digestible for the rest of the world because what they have going on here I think is going to solve a lot of people's concerns about the future of ethereum scaling as we all know the gas fees on ethereum suck I guess and then we're all trying to move on to the layers to the same layer too and so that we can have all these composabilities but the issue is with we can't just have one single layer two we're going to have many many layer twos and so how do we restore composability while also having cheap fees and so this is the conversation that we're going to be

having today with the immutable co-founders and just to really kick things off with contacts last September vitalik buterin wrote a research post on the eth research forums titled cross roll up nft wrapper and migration ideas which is a proposal for how to make nfts cross roll up friendly allowing nfts to move across the entire layer 2 ecosystem and today what immutable is announcing is a their solution towards solving the cross roll-up composability issues so what does this mean this means we are going to have many many games with many many chains with many many assets and all of those things are going to be completely abstracted away and so users are not going to need to be D5 DJ ends to be

able to play their D5 game game developers are not going to be able not going to have to be smart contract developers to build a game and we're going to talk about all the different layers of complexity that exist to make this magic happen while on the surface level it doesn't feel complex at all Ryan yeah this is super cool this is a way to have your cake you need it too right we get all the scalability of layer twos with without losing composability and what that just means is we have the ability to like atomically move liquidity from one place to another be able to trade with you know one asset on one chain the other it's all interwoven it's all composable we get these to preserve these money Legos um David speaking of having your cake and eating it too dude we got to do

a shout out to alchemics they wanted us to tell the bank list community that uh their product is here it's fantastic I believe they have uh released some new token economics to power this thing but but the base is there there's only two points in time uh to get eat you know one is before the merge right now the other after right and so if you're if you're like me and David you are holding your e and yet at the same time you might need some liquidity on that eat you might need to you know to use some cash in the real world alchemics allows you to take a loan out on your eat without selling it and without being subject to liquidation a little bit of a magic there uh where they're pulling yields forward in order to make that

possible and you can get the mechanics of how that works but David they've also released some new token economics you have some details on that and where can people learn more yeah there is a link in the show notes if you want to dive into this that's uh bankless.cc Slash alchemics with a capital A in addition to just having stable coin pools they also have eth pools so you can pull out an eighth denominated loan and have that East denominated alone uh pay itself back over time overall alchemix has a lot of cool new things coming so look forward to all of those things uh coming up in the future uh you are muted Ryan I'm still muted all right David we're gonna get right into the podcast with

Alex and Robbie from immutable but before we do we want to thank the sponsors that made this episode possible the era of proof of stake is upon us and Lido is bringing proof of stake to everyone Plato is a decentralized staking protocol that allows users to stake their proof of stake assets using Lido's distributed network of nodes don't choose between staking your assets or using them as collateral and defy with Lido you can have both using Lido you can stake any amount of your eth to the Lido validating Network and receive Ste in return SCE can be traded used as collateral for Lending and borrowing or leverage on your favorite D5 protocols all this without giving up your ease to centralized staking services or exchanges Lido now supports Tara Solana kusama and polygon staking whatever your preferred proof of stake asset is Lido

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him on Bank list before we've had him on a number of times Robbie welcome back thanks David good to be here and in the bottom right corner first time on Bank list we got Alex Connolly the CTO of a mutable also co-founder Alex welcome to the show man thank you very much super excited to be here so we have a lot of stuff to get to get through a lot of material to get through but I want to start with this very very high level question uh we're coming off of the absolute Mania of of 2021 going into 2022 uh Gamefly has definitely embedded itself into the minds of more or less everyone these days um but I'm still yet to be playing a game uh I haven't found a web 3 game that's quite for me Robbie what would you say is really holding the world of

GameFly back right now I think there's two answers the first is we don't have a platform which is easy for mainstream Gamers to use at the scale at which these games will operate which is 100 million players or more per day in the largest cases and the second reason is that great games take time to build and often the lagging time on these is at least a couple of years and so although we've seen a huge influx of D5 profile picture projects which look attractive and can be built in a month it's really really hard to build long-term games there are very few which will be releasing uh you know up to this point but we're going to start to see over the next 12 months more and more of these games come out and the average standard of game rise dramatically

Alex where would you add to that I think there's a a big trade-off here between the games where they are sort of gamified economies right so that's where you're basically having a defy like construct but with a game UI where it sort of feels a little bit like a game and a game where it's fundamentally built to be a fun game that you can play and then you're sort of soft on board into crypto at the moment most of the games that are being built are the first one right so those economic games and those are great but for most players they just are very fun and so the reason that you're not playing them so far is that we haven't actually been able to build the type of games that you would play even if you didn't yet know about nfts and crypto we think it's really

necessary to have that soft onboarding so that people can use this technology for the first time without having to spend two thousand dollars on Virtual sneakers I think when we all uh hear the word GameFly or web3 game or asset powered game we more or less think of the games that we all played in our childhood World of Warcraft Diablo Starcraft but when we find items in these web 3 games uh just like we did in our old games they're actually items they are actually assets but other than that the blockchain element and at least this is how I interpret gaming in my mind web3 gaming where the blockchain elements just aren't present in the game I don't have to be signing metamask transactions I don't have to be worried about gas fees and everything just

happens instantaneously and so they look and feel like the games of my childhood but they are also with real world assets Robbie a same question but back to you like why haven't we found this yet what are the ingredients that we need to really get to this point of Gaming so I think we need a few things uh the first is as we'll talk about in today's episode the scale and user experience that enables you know billions of players to eventually play these games which is the total um Market of sort of gamers in the world but the second is I think we need really robust gaming playbooks so that games in the web 2 era can come into web 3 and actually be able to build things successfully without being economic experts because when we

look at every previous Paradigm of success for gaming whether it was Mobile gaming as pioneered by Supercell whether it was so uh social gaming is pioneered by ziga or whether it was even free to play gaming which had massive backlash from uh Gamers and games industry folks are like when it first came out the commonality between each of these industries is they only truly took off when a winner developed content into space and then turned that content into playbooks for everyone to use you know they they reskinned uh Farmville and Mafia Awards into 10 different skins of games and created the playbooks that any publisher could create you know social graph uh incentivized marketing for for Facebook

um for supercell it was developing the playbooks that people could just build you know mobile games and gutter games at scale we need that moment for web free we needed to be hey here's how you take an MMORPG and develop it into a play and earn economy which empowers creators and players inside that game we need hey here's how you develop a MOBA and RPG at scale with exceptional user experience and those are the playbooks that immutable is investing in and so the uh this is a line that I have later in the show but I'm going to pull it up here where the future of game fire web3 gaming or asset powered games is not that game developers become smart contract developers too it's that the smart contract developers build the

scaffolding to allow the game developers to continue to be game developers yet also just pull in assets and I think that I think it's a great transition to uh what at a high level what you guys are announcing here today so as we are going through the whole rest of this show unpacking all the details Robbie can you just explain what immutable is uh releasing here today so immutable is releasing the first cross roll-up liquidity solution which will allow games to have their own dedicated L2 or L3 instance which means that now World of Warcraft can come on board and their 100 million players can have a dedicated you know 10 000 TPS or multiple instances of it while we fundamentally solved the reason that

multiple Roll-Ups would suck today which is siled liquidity and siled orders assets can't be easily traded between them and do orders can't connect anywhere so with immutable's open order book we solved a fundamental liquidity problem with nfts today which is that assets traded on One Marketplace or venue cannot be matched against assets traded anywhere else which is really going to be a fundamental thing that would prevent gaming liquidity from taking off with this announcement today our cross roll up liquidity platform we're basically supercharging those highways so now not only can you trade from any Marketplace wearable GameStop open C but each of those can have the TPS required to support you know the next bill million players on my theory hey Robbie so quick question for you I

think some people are still you know you're almost talking about a problem ahead maybe a problem that many of the game uh Publishers and developers and certainly you guys see right now which is like hey uh we don't have kind of the composability we have the ability to to move from kind of one roll-up chain to another a lot of people are still stuck on the first problem when they think about crypto games which is like the eth gas fees are too damn high and like transaction speed are too low could you give some other context for actually what what main problem a mutable is solving and then also fit that into kind of the the next Horizon of problem set which is like you know making sure that we have liquidity and composability we

can trade assets from one layer two to another but like the question of why do why layer two's in the first place and will this actually fix you know gas fees on ethereum what what would you say to that right now if you trade an asset on ethereum layer one it'll cost you anywhere between you know twenty to hundreds of dollars in gas fees depending on how congested the network is and the problem with this is if you're creating an economy where you want to create tens of millions of nfts per day and have players trade these nfts as part of a real economy it doesn't make sense why would you pay 50 in gas fee on an item that costs you know a dollar or two dollars to trade and so what we're fundamentally doing is bringing a scaling solution where the

consumer and business facing gas cost is zero in order to if you want to Mint 100 million nfts on the immutable today plus to literally zero dollars in gas fees and the reason we're so passionate about that part of our Tech architecture you know which no other sort of side chain or scaling solution has is because what's most important is an economy can be generated where you don't know the value of which these entities will trade you know it's just tokenizing stuff like you can own these Assets in real life and the reason that's so important is now players can onboard without having any Ethan their wallets and start to earn and trade instantly but also games can just create real economies where they don't have to worry about you know paying millions of dollars in in minting costs to create a true economy in the

first place and they can just monetize through a player incentive aligned manner as they take these secondary fees and so this is of course bringing and collapsing the cost of uh being a game inside the web 3 space down to zero but Alex I want to throw this next question to you uh why can't we all just do that on uh like a this dark net or one single ZK roll up why why do we have to have many chains correct question what this comes down to for us I think it speaks to immutable's positioning in the space as well just as you asked before uh yeah what why are we looking so far into the future uh to next year and Beyond that's partly because we speak to these game studios every day we speak to all the major game developers

in the world we speak to all the major Indie Studios the midmarket studios the Triple A Studios and we get to hear what they're thinking about building and what they would need to make that happen and the truth is that what they're looking for often is a little bit different and they want to make slightly different trade-offs some of them absolutely must have their own dedicated roll-up because they need hyperscale some of them need different guarantees around privacy or around data availability or they want to have different sequencer structures to enable better resiliency or for some Roll-Ups people are comfortable paying a low gas fee for each transaction some Roll-Ups people will say okay well we we have to find some way to subsidize these costs to make them zero our big belief is that in that end state if we want to have every major game

which has non-fungible tokens and truly owned assets built on ethereum we need to ensure that we can actually offer them the Roll-Ups that make sense for those games and that means we have to support multiple Roll-Ups rather than everything just being on one wallet and I think if you just like take it at face value it makes sense that uh game developers aren't going to want to share space with other game developers they're going to want to spin up their own chains just because that's just kind of what they're used to they want more control over the way that they're they're Layer Two their ZK roll-up looks and feels and so we've got a graphic that you guys threw us before the show talking about some various spectrums of L2 designs that are available to be chosen by any sort of game designer that

uh was interested in making a a crypto game so Alex can you walk us through some of these different choices that a game designer would make and why they would optimize for some and then instead of others absolutely so I think I'll start by talking to the top half of this chart on the right is a technology that Robbie was talking about earlier so we've partnered with the software team we've worked extremely hard to basically build the best infrastructure in the world for building nft Gates and on the right you see that Stark X offering that's what's live today which is an application specific roll-up right which is extremely optimized for the needs of nft projects so most nft projects can deploy today they can experience really strong scale they can experience you know an

incredible trading experience with no gas fees and instant confirmation of transactions but the trade-off there is that you lose composability and smart contracts so because it's application specific you can't write custom functionality while this is okay for many nft games for those particularly more game fire oriented games who need more complex tokenomics they need that smart contract support right or solidity support at the top left there you see what everyone in the community is also extremely excited about the moment I'm sure you guys have had uriod previously talking about stocknet and what that's going to do this is an early stage product but it's one which is going to be increasingly important for ethereum over the course of the next year that's

a product where you have some trade-offs that we introduced so you have a gas fee mechanism even though the gas fees are substantially lower right but you do get in return that awesome power of smart contracts composability interoperability on the bottom half of the chart right if you're a game if you're a game developer looking at the bottom half it's essentially the same benefits as the top half but you're also getting the license the benefit of much more control over your environment so you can tune it to your game's particular needs it's not just about the total theoretical TPS right this is an important point for for many people to realize the total theoretical TPS is one number but also remember that if two major games decide to launch a midnight

promotional event where they want to Mint a million nfts to a million players and they decide to hit the button at the same time it's important that ethereum's infrastructure is resilient to that use case and it's extremely important that that doesn't result in a bad user experience or how much turns people off game and so there are all sorts of reasons why you might want a particularly customized roll-up solution but the obvious trade-off is that you won't have access to the apps that are that have been built uh elsewhere in the ecosystem right so I think the big challenge for us to solve as we look at this graph and we see this as hey how can we solve the problems of game developers how can we offer them the environments that they need to be successful is how do we avoid fragmenting asset liquidity and Order

liquidity right on each of these roll-up platforms so as we lean into this world of many many chains I think it becomes pretty obvious especially is it with these kind of crypto deep crypto native games there was the whole like loot phenomenon where uh these one single assets will be a part of many many games and in in that world that's going to be somewhere on the left side of the spectrum this dark net side of the spectrum where you do need that interoperability but in order to have that you have to pay gas fees and so even though the fees on starknet are very very low and affordable it still is a design choice to have to click a transaction on your game to make that thing happen and so that is one end of the spectrum on the other ends of the spectrum there are completely gasless

from the user perspective gas list games where everything is taken care of and each one will have those own verticals but we what you guys and we'll talk a little bit how this actually works but the thing that you guys are announcing today is that it doesn't matter what chain it's on it doesn't matter where your money's on it doesn't matter where the assets that you want and what their chain is on because of this interoperability layer coming out of immutable ever everything all interoperates pretty seamlessly Robbie is that is that all right am I tracking here so the really unique thing about this is every roll up by default in today's model would have its own siled asset book in Order there's no improvement in liquidity even if some game has a massive success on one roll up and the problem is everything in the world comes

down to liquidity the most successful financial markets are the ones where you get the price by going and trading that now this problem doesn't exist as much in fundable token markets because if I even have half a percent of the fundable token Supply and I'm you know running an amm on you know ethereum and usdc people will just ARB up inefficiencies but it can't work that way with nfts every single nft Market is unique and it's really really tricky to build this Global liquidity standard that allows players and users to trade any unique in-game item anywhere and so the fundamental thing we're doing is we're building this liquidity bridge and platform across every single Wallop so even if that ends up being a thousand servicing you know tens of thousands of different games with millions of daily

active players each and then interactive content like tick tock ultim really what we've done is created the global pool where any asset can be traded on any roll-up on any Marketplace instantaneously and in one single Atomic transaction that's seamlessly end user and that is what builds this this sort of gravity and massive Network effects around liquidity Robbie is that any roll-up or is that any roll-up in kind of this the starknet ecosystem or like ZK relapse specifically any immutable support at all yeah like that's that's all by doing okay so any immutable supported Roll-Ups that would be right now kind of you know ZK sync Tech more sort of starkware is that correct that that will be that would be stockpile okay got it got it yeah can I

ask you guys uh you know the the bigger question here high level question here and you know maybe allow you to um to kind of explain this a little bit so this is another graphic that um you guys helped to help us understand what's going on here it's just um we've got these different layers here and of course we've talked so much on Bank lists about Layer Two which is this layer that sits on top of ethereum and that's where kind of the Roll-Ups reside and uh we could talk about you know kind of uh that being Layer Two being the New Frontier that's where the new property is the new block space is uh we also have this diagram a layer three is kind of like built on top of a layer two I'm wondering if you could explain that but before we explain everything in the

that's depicted here can you give us the high level of like why are we doing layers at all like why are we doing Layer Two why not just for what you said you know gaming publisher needs hundreds of thousands of TPS tens of thousands hundreds of thousands of TPS one thing Just Launch their own chain to create their own separate chain why are we doing why are we going to all the work of doing layer twos in the first place uh Robbie you want to start with that and I'd love to Loop Alex in too sure look I think that one's very easy which is uh Network effects and security every single other L1 or sidechain which has been created so far has an inferior security model to ethereum in some cases this means users lose billions of dollars I don't think I need to call up

you know that the recent examples um but I will by the rest of the 600 million dollar poly Network hack this was a 600 million Ronin Bridge hack uh the you know 40 billion dollar um demise of Luna which was more due to sort of Game Theory and economics and the underlying security is the consensus mechanism but the reality is that security fundamentally matters um when we build the architecture of these blockchains now end consumers do not care on which blockchain something is built which is why immutable is so passionate about making sure the best possible prices and the best possible user experience for playing what is going to be the most popular consumer apps built on the blockchain in the next decade by far gaming are on ethereum because we don't ultimately want to build infrastructure

which is insecure we don't want it to be owned by matter and have 52.5 fees I mean this stuff is really really important because whatever platform wins now becomes the default we'll set the standard for what security fees and decentralization looks for how people own digital stuff yeah so I you know the the lunarthink I think reminded the ecosystem you know when we had that meltdown it's like there are so many uh developers actually like scratching ahead and going like now what we have we have invested months uh developing on top of this layer one ecosystem in in Luna and now it's completely disappeared underneath us like the economy is completely collapsed and so has the security by the way all

of the security budgets completely went to zero so it had to be like you know trying to open a storefront in the middle of the Weimar Republic right it's just like everything's collapsing around you and it's you know fires everything's burning and uh so so that does we once in a while I guess we get these reminders Robbie that hey security does matter when it's a hack or whether it's a collapse of an entire layer one Alex what would you add to that and can you explain this uh this diagram that's in front of us for a minute sure I mean just just to round that off we hear this from the perspective of game developers so we're out there in the market we're talking to the people who are building these games right and what they're telling us even if users are okay you know they're happy to sort

of they don't really understand what's going on it's hard to explain the different trade-offs what's the difference between the side chain and L2 but game developers particularly game developers were looking to build long-term games that's a multi-year investment that's millions of dollars of upfront upfront capitals being invested in those games they want to build on the best tech and that also they want to build on the winning ecosystem they don't want to be left somewhere out on an island and right now that makes ethereum extremely attractive to many of the world's top game developers we just have to get the user experience there in terms of how we get the user experience there that's what we think this this diagram comes in so we've heard a lot on on the show previously about Layer Two the concept of Layer Two is actually extremely simple how can we take transactions

right process them on layer two and then roll them up to layer one using a ZK roll up or an Optimum optimistic roll-up where we're verifying that all those transactions actually happened on the layer one so if you're not verifying on ethereum layer 1 right you're not ml2 the way that you should understand Layer Three is that essentially we can take the exact same concept right and then do it uh one one more time so remember that process that I just described how we take a lot of transactions we generate a proof for those transactions and then we verify that proof using a smart contract on a base layer well we could do the same thing where we gather a number of transactions on layer three generate a proof for those transactions and then verify that proof in a layer 2

transaction which remember is going to be later verified itself in a layer 1 transaction when that transaction itself is rolled up what this this is called fractal scaling and what this means is we are able to use through the shared state of ethereum we're able to build the types of things we discussed earlier so different Roll-Ups with different trade-offs right which can be even cheaper which can make even deeper trade-offs and you could build those such that they share a settlement layer in ethereum so you can see in that L3 slot we have a number of different designs for what a layer 3 might look like there's the application specific roll-ups there is the Private Stock Nets there is another version of Stockton on top of

public stocknet all these things which can be built customizably to the needs of world-class games but which can settle all the way back to Layer Two and will be even cheaper than layer 2 transactions so this is a you know I think a huge a huge Innovation and if you want to read more of the technical detail about it I really strongly recommend the stockware fractal scaling article okay so and within this layer three uh Alex this is what you're saying what you've just rolled out does is you're connecting all of these chains within within the layer three you're connecting liquidity you're enabling the ability for assets to move back and forth you're providing that composability sort of the the glue that will connect this entire layer three so it's not like a whole bunch of different

chains in layer three it's just almost like from a from a developer perspective or maybe from a user perspective it's one deep liquidity pool one pool of inventory of assets just it's almost like looking at one chain in my understanding you correctly yeah so it's not just about layer three it's Layer Two and layer three right so it's wherever you have these the ZK roll ups right and your user you own uh let's say uh I'll take the example from earlier you've got an asset in World of Warcraft right which is operating as an L3 application specific roll-up to like hyper optimize targeting of people at Planet scale and you've got eight on public stock net because you were doing scalable D5 there if you want to purchase the asset that someone else has listed over there okay

having to go through all the process like the you know moving things around uh between between Roll-Ups right bridging orders between it will massively hurt ethereum's ability to service the best games in the world okay and we're providing it's basically it's basically the ability to to take that order right from uh you know the World of Warcraft roll up and to fill it with the eighth that you have on public stuff okay so we we've encouraged people in uh listening Bank list to go start to explore the layer two that they want to you know live in to like go tour the neighborhoods go look at schools you know go look at the the roads and infrastructure the traffic patterns and figure out where you want to live let's say I want to go live on public Stark net that's going to be my Layer Two or

one of my layer twos because that's the cool thing I don't have to just pick one now we have all of these other kind of layer three metaverses one of which is my favorite game it's World of Warcraft meets nfts and it's the best thing ever I've got another game that's uh MMO RPG type game I've got another game that's like a first person shoot or whatever and I also have this whole nft a system on on layer three you're saying that because I'm living in the the Stark net ecosystem in Layer Two that's the neighborhood I've chosen it's like I'm right next door to all of these other mini metaverses right and like I can swap my assets back and forth it's not even a thing and that's what immutable is providing the ability for it to be all seamless interoperable same wallet

users experience I don't even know that I'm moving I'm teleporting from one you know neighborhood to to a different city because it's all at my at my fingertips is that correct exactly exactly and I think it's a immutable's vertical integration is what allows us to offer that like full seamless experience right we really want to be there as the platform to solve these problems for games and that requires you to build all the intermediate components uh to actually make this happen right I think there is a uh there is so much value that we can offer to users here simply by giving them much greater liquidity than they have right now where they're moving between their swallows okay so I'm gonna I'm gonna do my best to tie all this together because uh the IMX Community is

incredibly energetic and they're always every time we bring you guys on they're always in the chat and uh people are asking for uh just a little bit more elaboration so I'm going to do my job to summarize absolutely everything that I can here uh so we got we got ethereum at the bottom uh and that's of course the blockchain that we know and love uh and what we were talking about earlier with all of the varying spectrums of varying Roll-Ups that you can produce you can produce generalized ones you can produce application specific ones and the cool thing that immutable is helping companies gaming companies do is to spin up their own particularly suited flavor of blockchain and that's going to be in the L3 layer and so World of Warcraft Diablo all of your favorite games there might be web 3 versions of these things

and they're all going to have perhaps their own specific blockchain there's also going to be games that are built on the Public Public and open blockchains like starknet but there's going to be many many many chains there's probably going to be up up to one chain per game and all that does is breaks composability like you can't just live on one chain especially when you exist in gaming and so while we're seeing these lines go to all these different chains think of like an application specific Stark net or a stark X validium or Stark X roll up these are all different ways to construct a game in ways that a gaming developer might choose to best suit their game now instead of having just how many are there five different

uh types of blockchains in that L3 layer multiply that by numbers of games and so you guys call this fractal scaling and now I want the listeners here to think of a root system that is growing out of the Public's dark net for every single game there's a new route and so this is what allows this whole gaming ecosystem to grow and that increases in complexity it complete increases in surface area and it increases the ability to onboard users into a particular flavor of game because that allows that game to be maximally useful based on of the ZK blockchain Tech that it is built upon and so there are no limitations a base in the blockchain world for what a game developer can build in the layer 3 layer

and that layer 3 layer ultimately gets settled on the layer 2 which ultimately gets settled on the layer 1 but what but the whole entire thing the reason why you'll notice the box that surrounds everything is the immutable X ecosystem which is all this mesh Network to allow your your asset on one game to hop to another game and if your ether is on one chain but you want to buy an asset on a different chain it doesn't matter what chain it's on because of the vitalik paper that I talked about in the introduction and so uh I'm just super bullish on this thing I'm going to do a throw a bone to all of the the listeners out here who are here here because they they probably like the IMX token all of that value all of that economy is being funneled into the immutable ecosystem

and the way that the IMX token is useful is that it's a staking token so as there's these fractals of uh chains getting birth because every single blockchain game bursts its own ecosystem its own economy ultimately that all that value of all those transactions on that chain gets put into the IMX token thank you Ryan it gets put into it gets put into the IMX token and so like imagine an insane amount of like surface area for all these blockchain games and it's all being collapsed down into the immutable uh core ecosystem which ultimately gets settled on the ethereum layer one so for all of you all the YouTube people who are talking about

how way too complicated that is I hope that that was the explanation to really drive this home Robbie Alex did I mess up anywhere is there anything that you want to add I'm going to take that two minute snippet and put it on our home page uh no I I completely agree and I think the really important thing to remember is that the whole reason that ethereum is the greatest most liquid place to kind of deploy an nfe project today is because all of the wallets are shared all the network effects are shared all the composability between smart contracts and share that is what generates this business machine and what ties it all together is the security of the consensus mechanism um and the robustness of that Network that exists today what we're now saying is we can take this scale create zero

gas costs for any game developer any application building on it while preserving all of that same benefits of you know um shared liquidity shared order and asset State uh shared network effects Alex is there anything you want to add as well yeah the way I'd round it off is by saying if all that sounds complex right there is a lot of complexity there the goal is to make sure that both to game developers and to users right that just looks like a really really seamless ecosystem environment right so you as a game developer you just say hey get me to use this wallet and initiate a trade right it doesn't matter to the to the game developer how you're funding that transaction where where the funds are coming from across robot this is a crucial point this is why we see ourselves we are like

really in the business like of obviously building these scaling Solutions building this liquidity infrastructure but we are just in the business of getting the best games in the world to build on ethereum and we think that that is what's necessary to unlock everything we talked about in the introduction you have to make the user experience awesome and you have to make the developer experience awesome right you need the empowerment that all these different tools give you and all this complexity on the back end right you need you you actually genuinely need some of that infrastructure to build some of the mechanics that your games need or to support the use account that you want right but unless we're able to successfully abstract a ton of that complexity away from particular users and honestly developers as well right no one is going to be able to build that

type of Planet scale ethereum game that everyone wants to see it's the bottom line of what you guys are saying is that like okay ethereum is now scaling and we're open for business 55 like we are we saying are we going as far as saying we've now solved the scalability problem so if you were worried about building your game in crypto or like don't be because it's now solved would you guys I I know Alex is an engineer so he's feeling that and solved the problem I don't know for sure but like but like is this kind of what we're saying in this first section here I think this is the path to solving those problems for a theory I think the uh ZK rollups ABM compatible JK roll ups and to secure Ops in general are here

ahead of schedule like the one of the few things in the ethereum road map that has been consistently delivering at a really really strong pace and we think there's some amazing Tech that's been built there and that Tech is going to be the foundational piece that allows ethereum to go fractal and to get to that number of users there is now a much clearer path I would say for ethereum to scale right then even some of the monolithic you know uh sort of high high TPS Auto ones there is a much clearer path to how ethereum is going to scale to build to have the biggest games in the world built on it than there is for any other blockchain guys there's a few more conversations that I want to get through I want to differentiate this strategy uh between just going multi-chain and I think that

is definitely worth something parsing apart and all and also I want uh Robbie I know that you gave me a line yesterday about how um uh well ultimately the way that this ecosystem works with this like mesh network of interoperability that's also ultimately how ethereum grew into having such high success so I want to have that conversation I also want to talk about win games uh because these are blockchains are cool but games are also cool and so I want to I want to hear about your guys's BD relationships and who you guys are working with and that also will lead into a conversation about wearable and so we will get to all of these conversations right after we get to some of these fantastic sponsors that make the show possible oh my sponsor files have gone somewhere

so we are still live so we're gonna roll into the second half of this show well I figure that out uh so uh one question I just wanted to ask um well while we get into uh multi-chain is um Alex and this kind of relates to multi-chain but you made that point about um yeah just ethereum right now and its scalability path being even better than some of the monolithic genes and of course over the past few months we've we've even seen some of these quote unquote high throughput high transact High TPS monolithic genes you've actually seen them go down like there have been outages imagine if that's your platform it's not just like World of Warcraft the zig World of Warcraft Starcraft you have all your favorite

games on the same platform and then power goes down like none of them work can you talk a little bit about the scalability limitations on monolithic genes versus this dig into that a little bit more and contrast that with maybe where David was going with kind of the multi-chain strategy yeah so look I I think at the end of the day blockchains are technology and Technology can have can have challenges particularly early stage technology I think it's easy to forget now like ethereum has been around for and has been almost you know entirely stable for most of the past year seven seven plus years right there's been a ton of work that's been invested in building uh the core infrastructure of ethereum to make it the most reliable right and most

performant infrastructure in the space you'll see this now with a lot of the ultra ones that are coming out are simply forking forking ethereum and sort of turning down the security parameters for a while right the danger of this for many game developers right is a right you're reliant on a development team that is like less confident less credible and less aligned to the ESOP ethos of building great blockchains right and so we're seeing a lot of developers come to us concerned about these types of uptime incidents that you've seen on on other chains right obviously there's nothing you can do that will totally and categorically eliminate all types of downtime but seeing chains go down for eight plus hours where they're not processing any new transactions imagine if that's the midnight launch that you poured 50 million dollars of your game's

marketing budget into that could be really likely to be at lunch time right exactly exactly and that's right at the moment that you critically need that scale right that could be the point that Things fall over 50 000 players when nowhere near the type of games that even make a dent in the real world so this stuff has to be able to scale to those experiences um and to give traction to the numbers that Alex is saying immutable's up time is right now 99.9 X percent um where you know X can vary month to month but when you look at something like Solana we look at something like polygon you know these are both in sort of the the 95 to 97 ranges based on downtime over the past couple of months

um which is not to sort of show those in particular but like monolithic architecture really can't support the scale um alone but that we need to to get to the next 100 million players on web3 okay guys we're gonna try the sponsors again right after we get to some of these fantastic sponsors that made the show possible Ave is the leading decentralized liquidity protocol and now Ave V3 is here ave3 has powerful new features to enable you to get the most out of D5 including isolation mode which allows for many more markets to be launched with more exotic collateral types and also efficiency mode which allows for a higher loan to value ratios and of course portals allowing users to Port their Ave position across all of the networks that Ave operates on like polygon Phantom Avalanche arbitrum

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card that hooks right into the Ledger Live app right next to all the defy apps and services that you're already used to doing like swapping tokens and staking so if you don't have a ledger Hardware wallet go to ledger.com grab a ledger and take control over your crypto and we are back and so Robert I want to take this conversation into just a conversation around overall liquidity uh and how multiple chains kind of feed off of each other because if we have this mesh network of chains that all have this layer of interoperability where assets can go from chain to chain to chain this is meaningfully different from a multi-chain strategy where if Ave for example deploys on the ethereum main L1 but then also polygon but then also Avalanche they actually have to split up

their Dev resources but that's not what we're talking about here we're talking about every time a new game comes and deploys a new ZK roll up and brings a new player base they're adding their own unique economic energy to a shared pie they're adding more more players they're adding more money they're adding more liquidity to this whole ZK roll-up ecosystem that you guys are pioneering can you talk about just like the inversion of just like splitting and dividing versus collecting and converging you have assets you have audits you have composability and you also have wallets or currency ready to be spent and what

we're doing is making sure that any Improvement any one of those inputs can bring shared value to every single other application or game built on immutable so I'll give a specific example let's say alluvium becomes absolutely massive which I absolutely think it's going to and it gets you know like 50 million down and it needs its own dedicated L3 instance and someone on boards onto alludium they've never played another game before but they're like um biosemite or they buy some nfts with credit card now anytime they sell that if they sell that on the you know eluvium in-game Marketplace and it's bought on the GameStop Marketplace or the wearable Marketplace anyone can purchase that with eth from you know a completely different roller from a

completely different game that they've onboarded to and then over the top we have immutables open water book so the problem this song is right now if they were sold in the alluvium in-game marketplace not on immutable they could only be bought from that same location which is a fundamental problem because the places that people will trade nfts are as numerous as the places that people trade real stuff like we're talking about the data standard by which people will own digital goods and the most important thing is that if I sell it somewhere it can be bored anywhere and everywhere and so the fundamental difference we're building is rather than just offering a myriad of sort of you know multi-chain scaling Solutions where someone can use the application on this instance but ultimately it's still every

blockchain racing to build liquidity and to build success every single game and every single application adds users wallets uh liquidity and interoperable sort of composable smart contracts that can be used by everyone um and this is the infrastructure that's going to be needed to sort of take ethereum to the next billion players just just to build off the top of that I think it's a really important point to note here about the about bridges in general because obviously a lot of projects have gone multi-chain you can sort of bridge your funds into you know from from ethereum to survival bridges are by far the most fragile point of the entire blockchain ecosystem right they are more fragile than the consensus mechanisms of alter at once they often have a very small

group of multi-seek signers these blockchains can't actually talk to each other so what happens is people are locking up funds here and there's a group of people that are saying yep issue them some funds over on over on uh you know back on Eighth right and that can obviously result in people printing money bugs can result in people printing money so we saw that with things like the Wormhole uh the Wormhole smart contract bug right not so not like not even hacked just brutleness in smart contracts could cause big issues when we're talking about people moving assets between roll-ups because those assets share a settlement layer so because they all rely on ethereum at the end of the day whether on well two all three because it all all points back you can move assets between Roll-Ups with none of those major security trade-offs that people who are just building in a

multi-chain world have right and so like they're fixing it's fixing one of the most fragile points that the current blockchain ecosystem which is Bridges I hate Bridget I hate uh insecure unsecured Bridges I think they are it's kind of the worst thing that we are introducing in this generation of blockchain architecture I almost feel like David we should rename this podcast bridgeless because like the worst bridges are actually Banks when they are just multi-cigs those are just like a bank of another flavor and I think the a theme of of well now 2022 but like we had some catastrophic Bridge hacks in 2021 and 2022 over a billion dollars and then we also had the collapse of the terror

ecosystem which was like almost 50 billion dollars and so we had an Instagram secure L1 and we had insecure Bridges represent the majority of the losses of the entire crypto ecosystem for its entire lifespan It All Happened inside the last like nine months of time and so this should be in stark contrast to what is going on here where we have strong cryptographic Bridges inside of a same shared ecosystem with shared assets uh and and just to drive drive this home about the usability of this when we do want to scale blockchains up to a billion users in a different and a billion players who are going to invest billions of hours of time into these whole things we need to make sure these

things are secure and the beauty ultimately of this this ecosystem is that you do get that security but also uh this it's probably going to be like the same wallets that users use because of that it's all in the same ecosystem so like if you have like your one wallet on one game that's probably going to work in a different game and regardless of where the destination of your ether is on one chain you can still use it and so users are going to be using these bridges in the background not knowing it but we can actually feel secure about these things in the uh obfuscating away so much complexity from the users because of the fundamental secure Primitives that we have in the background

um Robbie Alex you guys want to add on to that yeah I think the one thing I'll add is that the blockchain space is particularly as it's become more commercialized over the last few years constantly in this kind of tug of war between people who are racing to build the commercially most important things which is how can we onboard users incredibly easily and create a good experience for customer facing applications and how can we Bridge liquidity which is ultimately the most important thing to sort of bootstrap new networks versus how can we all do this in a really really secure way how can we make sure that this infrastructure is going to be around for the long term and I think the worst thing that could happen is the most commercially successful applications in the short

term are built on completely insecure technology and unfortunately we've actually seen that you know essentially twice in the last nine months and both of these instances push back web3 adoption they push back developers from trusting what they're building they push back consumers because you've been burned you know you bought um thousands of dollars of of lunar or whatever um and I think the most important thing that we we want to do as a mutable is build the easiest possible to use commercial solution for building web free games to allow users to you know scale to these sorts of heights and have the best prices for assets but to always do it while preserving sort of a self-custodial protocol 100 user security uh and we'll never kind of violate those standards along the way

because we know if we want to go the next five ten years and and build something people have to have fundamental reputational trust in sort of ethereum and what we're building okay guys so we have the technology you guys are helping to release it we have the block space we have the scalability now and the question that we want to return to is okay when games when are we going to get the games and uh just came back from the permissions conference last week I was talking to some people in the game find space and uh you know they're Builders so they're not bearish but GameFly is very bearish right now from a market sentiment right it's like kind of uh axi infinity has gone down quite a lot I think it's it's uh impacted a lot of the gaming economy in the Philippines and other places uh and

the market in general is is kind of bearish on it but uh Robbie you're in the trenches with with the builders and you're talking to the game studios uh is there some hope here should we be should we be bearish or is there a reason that we we should remain excited about game five and if so what are those reasons yeah so my strong belief is that the successive game should be entirely decorated from the general crypto markets and I think that's what it's going to help provide this and we've seen crypto markets have reduced speed at every cycle right like that they're becoming reducing volatility even with a you know 60 down 68 down from ADH it's it's like less than 2019 and 2018. and so

um what I'm really passionate about is games will truly be driving success on on web free and mainstream successfully almost stopped talking about it is like game five being in a beta mode because it's well hey if there's this game over here that is 100 million players and there's this game over here with 50 million players and under the hood people are using nfts people are truly digitally owning their items and experiencing 10 times the value they could get through a web 2 game and that's when the narrative is obsolete because the product is there the adoption is there and the leading indicators that we're seeing today that mean we're going to arrive at that uh maybe sheer amount of talent and Venture Capital pouring into Webster against the space you know every single VC if you're in gaming right now 50 of your pictures

are for web3 the majority of funding is going into web 3 games rather than ordinary games right now and out of the top 10 most mainstream game developing companies in the world worth tens of billions of dollars well then eight of them have full-time web 3 teams focused solely on exploring their strategy I mean like that that's that's and I'm not saying they're going to launch this year next year because this is a massive change and they're the incumbents reaping the benefit of the current model what we have to do is take the alluviums of the world you know the planet Quest the Embers swords The Guild of Guardians and God's unchain chains of the world and say hey we can create an experience that is 10 times better than that competition and that forces them to get their act together and say oh we

actually have to go build this now like that's the classic kind of innovators dilemma so um I'm feeling extremely confident I think the reason it will take longer is games take time to build as I said like alluvium is building for nearly two years now they have more than 200 full-time employees and as like you know a war chest of hundreds of millions of dollars the only reason they get into a stage where they can release this kind of like Triple A game in the next six months is because of the fact they started so well now we're seeing those games having been built over the last year and the next year I think like we're no longer going to say sort of crappy quality play to learn games be successful every single game you play that rises up to the top of the market

is going to be a credible double or triple A game that that's incredible Alex you have anything to add to that as we close yeah I think the future is extremely exciting for weather games and all you have to do is zoom out a little bit right there are there will obviously be Market sentiment that's caused when you actually don't have many people playing these games just as Robbie said the key thing that all Builders can do in our message to everyone you know we're talking to many game developers but if you're listening to this uh podcast and you're not a you're not a game developer uh the future is extremely bright as long as you build things that people genuinely want to use right and actually they can be a lot of noise in times of great hype where people are just using things because it's there right in times

where there isn't quite as much frothiness you can actually focus on building a product that people genuinely would play and would love but even if they're not earning anything to begin with and I think that's actually a big blessing for Builders Amazing Alex Robbie how far we've come thank you so much for uh for joining us in this conversation for everything that you guys are building over at mutable we appreciate you that's cool before we sign off however uh since we're here uh this is gonna be completely adjacent but also immutable relevant Robbie what's going on with variable yeah so uh we announced today that wearable will be integrating immutable acts into its Marketplace so it's the second largest energy Marketplace in the world by volume today

well I feel like on a different day a different week that would have been a show in of itself but sadly we are out of time so guys thank you so much for coming on to the show and and Diving deep into this uh a very sci-fi sounding future that seems so close guys thank you thanks guys thank you for watching disclaimers Everybody of course none of this was a financial advice all of crypto is risky eat this risky solar Layer Two so is D5 you could definitely lose what you put in but we are headed west this is the frontier this is the gaming Frontier now it's not for everyone but we're glad you're with us on the bank list Journey thanks a lot hey we hope you enjoyed the video if you did head over to bankless HQ right now

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