Ethereum as a self sufficient ecosystem

Transcript

hey everybody um my name is joseph uh the funny thing is that probably most of the people in the room know me uh for those who don't know me um i work with the ethereum foundation uh i work on operations and kind of like liaison between ops and r d teams um the topic i would like to talk today about is ethereum as a self-sufficient ecosystem and kind of just like throwing my pretty subjective view on like what what sort of a baseline um basel an amount of money that the ecosystem should kind of like strive to secure for like the core development and possibly research

um and like and if it's uh if it's possible to to get there and like what's the what's the actual like pathway towards an ecosystem that doesn't have to rely on like large treasuries um so today i'm going to talk about a bit about the the ecosystem itself we will doing we'll do like a little dive into the ethereum stack and like what do i understand by the stack um and then we'll talk about like a baseline funding so the state of the ecosystem i mean like as you can see well you know we are in the middle of pandemic but there is still stuff happening like there are new projects new companies like almost every day there

are like hundreds of startups um there are like hundreds if not thousands of people like joining the ecosystem uh if you go to like any of the uh you know the r d channels like the eat research forums uh if you just like watch twitter um the ecosystem is still booming in my opinion like each year i'm just like surprised by like how easy is to lose track with what's happening um so these are some numbers to throw out there um i kind of like try to use sources but it's quite hard to measure so there are like different you know there are different numbers that are kind of like um across like a range of like thousand or ten thousand

but uh i guess like um we can we can like a safe you know safe baseline for like in how does the ecosystem look like in terms of the people participating on it uh would be about like 2.5 k like core developers and people interested in research i think the um e2 r d discord has around like 4 000 people or something um maybe like roughly the same amount of people like participating in some of the forums obviously not everybody is like active day-to-day but uh if you if you go to like any of the implementation calls uh on like the merge or uh statelessness and so on you'll usually find about like i don't know

20 40 people participating in these calls and there's like obviously overlapping some of those but those are also quite um distinct groups between the individual like research topics um so uh based on the numbers from the like one million developers uh there's apparently about like um 200k um kind of capable developers that are aware of the ethereum stack can use it in some way uh this would be more on like the application side like where you have solidity developers um but um all of those kind of like understand the stuff good enough in order for them to be able to dive kind of deeper in case they they need it uh plus apparently there is over three million defy users that's

just the people that kind of like use the stack and obviously d5 is just like one of the segments uh but that's quite a lot of people already so well i guess the the protocol is used um if we go kind of like one level deeper um well we have like roughly five teams working on um e1 clients executioner clients we have roughly five teams working on e2 clients the consensus layer and we have more than five like l2 attempts or like research and development teams that are working on l2s and generally scaling ethereum um now like five seems you know good enough uh um although if you you

know if you actually really look at the network distribution uh based on like the you know each one client um just like network split um or you know like the percentage of like people running an eat one client uh you will you will actually see that like most of them are relying on single team on get um in e2 space is not as horrible but uh there's like a likelihood that that will eventually happen as well so i mean you know looks decent there's definitely redundancy in the system but it's like far from optimal speaking about companies booming in a space there's a there's like a lot of traction there's like a lot of startups building the tooling you

know um selling the the pixel shells uh building like um infrastructure for um for reading from from the blockchain state um there's a whole bunch of dows as well um these are kind of the most interesting part of the ecosystem these days probably uh like all of these like new concepts that didn't have to set up a company but they just run fully unchained but there is also like a lot of like large companies like uh fortune 500 companies having their own like blockchain teams um and i guess prettyman predominantly like interested in ethereum so we also have stock quite a lot of money in the

ecosystem uh so uh this is this is just a screenshot from two days ago from open original info uh david my house project that's my primary source of all of the data basically within these i don't know how many like 15 15 teams 15 dows mostly uh their sits around like six billion dollars um kind of i'm not saying what necessarily waiting to be spent but uh potentially utilizable for securing the infrastructure itself uh this doesn't account for quite a lot of companies in space uh uh df treasury is not there obviously it's like one of the sources of funding uh the old

like ico treasuries like things like golem things like argon the kind of stuff that's not there as well so probably the number is like much larger um but i guess these are the ones that wanted to open up so so yeah there is there is quite a lot of money sitting in your ecosystem another question is like uh is this enough um you know like are we fine with just the assumption that like there is a lot of money in the treasury is therefore like the ecosystem is self-sufficient and will just like keep on working even though um some of the you know initiators may like leave the ecosystem so to answer that we'll first have to kind of you know dive into what what is actually kind of the base

layer you know like what's the what are the car teams what is uh what are their funding requirements so this is my attempt to kind of like break down i guess the core parts of the ecosystem going just beyond like you know protocol itself into nice you know happy little boxes um and obviously there's much more um but i would just focus on on these so on the main and protocol side we have executioner clients base uregon get never mind open ethereum um we also have like nimbus and like other other kind of like smaller clients but let's let's just like take these into account on a consensus layer bunch of e2 clients lighthouse loadstar nimbus teku prism

and cortex which is i guess like nethermine's projects um now a project on you know building and consensus client um then kind of the the second layer of like what's important to actually use the et room like what is it you know what allows you to actually build applications on top of um the stack is the languages and contracts so you have the solidity team you have the formal verification guys that have a talk in the uh room next to us uh you have other languages like fed like zogorodes maybe circum like these are i don't want to say they're not as important but they're definitely more on the outskirts so again predominantly people will be using solidity uh but you have also like ides uh like the

development um uh environments and that kind of stuff which is also kind of necessary for the ecosystem to actually work uh then you have like research and governance buckets this is like what i'm uh the least sure to be honest in the numbers that uh i'm going to talk about but you have some like you know core development of e2 um just like figuring out the way forward uh focusing on the merch and so on you have a whole bunch of lds uh and this like l2s are just a you know box box of its own uh you have the zkp research uh you have statelessness kind of relates to car development uh but you also have like kind of like these governance mechanics like

eip process and you know doing the reviews doing audits of dcip's which also is important we probably couldn't survive without that uh and then finally you have the tooling that's kind of like connected to especially the you know mainnet and uh languages stuff uh where do you have like basically well you have kind of two links like for every um ecosystem or like developer ecosystem uh but let's focus on the dominant ones which is like javascript ecosystem and python one um and then you have like whole bunch of other dev tools like hard hat and truffle and like ganache and these kind of things that allow you to like test the contracts uh before you actually deploy them so all right that's quite a lot of people

um quite a lot of teams out there so how much how much money we actually need to make sure that like these folks can just work and don't have to worry about anything thanks um so this is this is my like estimate based on um kind of like working with some of these teams uh i'm again i'm least sure on the research and governance side there's probably like much more money being spent on these topics as well um but i would argue this is kind of the safe baseline so basically on the execution layer side you have like one million per client same with consensus layer uh i'm using some like buffers you know because there's always stuff that i don't know uh about kind of on the language and contract side

um you have fairly large team on solidity you have like some you know new languages popping up which are much smaller um there is there is like a whole team working on ids remix and that kind of stuff so these are like annual annual numbers um again a buffer on the research side well that's that's like a uh bottomless pit like you can you can throw like as much money into research as you want i guess uh it all then comes down to actually finding people that can do it but i think the appetite for just funding research in general is is pretty high um so so yeah ballpark numbers uh let's say let's say like the research team is going to be like a

you know in total roughly the same size as the as a client developers uh client developer team so it's like five mil for core development l2s the number in l2s will probably be like five times as high as this but again let's let's just focus on the baseline zkp is the same case there's probably much more money being spent on that uh stateless statelessness um this is like as far as i can see there's not really like uh as much focus on stateless statelessness in terms of funding at least um eips similar story but i guess like it's enough for the mechanism to work um and on the tooling side that's again like relatively small numbers compared to like the client

development but again let's just focus on a baseline basically having a team being funded for a year to work on topic so all in all i argue that yeah um there's roughly like 42.8 million dollars needed like yearly to secure all of this obviously a huge chunk of that is is the like the research side which again is the bottomless pit so um we don't even have to like consider that but uh but yeah let's say to be safe we need like 50 million dollars yearly to just secure the very like baseline um baseline setup of teams to be working um if i quickly go back there is like a

whole bunch of things that i didn't consider and obviously this is this you know these things are super important for the ecosystem there's the insert like wallet ecosystem actually allowing like end users to use whatever we built which i didn't consider in the funding because i don't i don't have insight into that all that much uh the entire application layer you know useful stuff as like ens it's like proxy contracts any kind of stuff also not considered um we wouldn't be here uh without even organizers and just like people that are doing education in a space um also super important but also like super like wide and in terms of like what can be considered there and it's hard to assess like what the baseline is and then you know the legal operations cost i didn't i didn't consider

like in the large you know client teams they they have like other folks working on a team probably their view of like how much we actually have to spend on a team is like goes beyond the number uh but again i'm trying to focus on like developers maybe some support staff but not really thinking about like marketing teams and you know like hr and sales and whatnot so yeah so we are at 50 million that's a lot of money but well you know there's like six billion dollars uh sitting in in treasury so it's probably well you know we could say well even if you just take the ballpark number and we say like we spend 50 million from that like each year

yeah it sounds like you're probably safe uh but yeah that's not happening really is it so um [Music] so yeah like one one way to you know one direction of thinking would be how can we like unlock those treasuries but um this that's also just like a one-off solution to a problem that will just remain so let's try to focus on different things let's try to focus on like how much the projects that are kind of like closely bound to ethereum on the baseline on the base layer that actually like make a business model and revenue on top of ethereum like um what's what's kind of the fees that these projects these projects generate and if we can actually like lift from that or if the baseline can lift from that

so again pulling data from crypto fees.info there is uh this is just like a filter of um fees generated by ethereum and a whole bunch of dabs deployed on ethereum uh these are again like two days old numbers uh what i did basically just took the average um and said well yeah we are not in a like overhyped bull market um these days uh the activity on the network is like mediocre so uh yeah i did the easy and lazy thing and just said well all right if we take the average and just um say well you know what if this was the case for the entire year like during the bull market these numbers were much

higher uh now let's hope those you know those won't fall anywhere uh below like the today's today's numbers so all in all uh if we exclude ethereum as such uh like the mining fees the validator fees um if we exclude like yield farming and kind of the token incentives if we exclude kind of the off chain stuff the you know the off chain fees like uh software as a service like consultant fees like software development house uh houses and like these companies that obviously also have a huge incentive to participate in the ecosystem and to like fund development and you know have their own teams working on the core layer stuff and there's like

lucky letters there's a lot of these companies um um then you know um we just really focus on what what actually happens on chain uh and there's also the the number i'm going to show you also doesn't doesn't take into account like exchanges and the trading fees which is also like a huge part and um yeah i mean there's like an untapped potential there so yeah all in all excluding all of that other stuff yeah there is still like 1.6 billion dollars like basically generated on top of ethereum um every year and uh yeah it's i mean the filter of those 15 15 projects so probably the number might be much higher as well

so yeah so um yeah what if we what if we like just said all right so with all of these fees uh are we able to like sustainably fun fun development of the base layer well yeah pretty much yeah it's like three percent of the fees that are being accumulated um on top of the stack so my argument is yeah i mean if we if we want it uh the ecosystem already now could be pretty much self-sufficient obviously there is like tremendous potential of like the other things that can be funded and like there's no doubt that um you know much more than 50 million dollars can be deployed in the ecosystem to let it grow to let it

flourish on like the different layers um but already now there is you know there is a there is a chance you like stop relying just on the big treasuries like ef like unit swap uh and just like proactively fund the core work um with a relatively like you know small costs or compared to like what these what these projects actually actually generate so um so yeah um kind of what i what i think will will be necessary to happen in the ecosystem in the following years is that some like you know uh dao some projects that like generate generate a lot of fees

um they will eventually like start supporting you know the individual teams or like classes uh in the ecosystem like the client teams or tooling and it seems like even if you know the the large grants entities like ef or even unit swap like disappear um the likelihood of the ecosystem being able to like find the money to actually fund itself is quite large because there is quite a lot of space so i hope this will like end on on a positive note it's not just like a general like governance governance talk um but yeah i think that was i'm pretty much on on time uh that was it um thanks for listening and does anyone have any questions

oh yeah hi so so do you think there will have to be like proactive almost like a business development reaching out to all those projects and sort of almost asking them to contribute or do you think the national natural evolution is going to be that you know they will just show up yeah i think i think luckily we are in the ecosystem where people generally like feel it's beneficial for everybody if they kind of contribute back um so there were people in the past and they're kind of like you know new and new people like showing up uh to fund ecosystem i mean like you have things like git coin right that work pretty well um but they don't get to these numbers yet and these are like bitcoin is like primarily you know like ecosystem

run uh thing where just recently you started seeing kind of participation from like larger treasuries i don't know like kraken and so on uh and git coin runs but otherwise that was just like individuals funding like other individuals um now you can see like uh you know especially i guess the large dowels kind of um or people from those dials showing up with proposals to fund core development you had to build like the uniswell proposal to fund cat uh you have like many more uh many more people in the space that are kind of like willing to spearhead some of the some of the dow proposals to get commitments in these treasuries i mean from

from the conversations that i had at least i think though there is an appetite to do that and yeah luckily people feel like it's the way to go so i'm very hopeful this this will happen like more or less organically if we look back at numbers i think we you know it's there is no there's no rush like we don't have to be stressed about it but eventually i think this is something we should we should kind of strive for eventually i think this is something what will happen uh because uh you know the the large treasury is like maybe here for ages and obviously like we may be lucky and like it can the number can go up only uh but uh but yeah we shouldn't rely on that and uh luckily it seems like we won't have to

cool [Applause] you