Make Ethereum One Chain Again - Alon Muroch

Transcript

[Music] No, not one. Okay, perfect. Perfect. Thank you. Thank you for the tech, guys. Thank you. Hi, my name is Alan. I'm the CEO of SSV Labs. We are uh the centralized infrastructure for Ethereum staking. Um we are the second largest protocol uh staking on Ethereum launched at the beginning of 2024 with uh a new type of technology at least back in the day called distributed validators. Uh grew quite significantly throughout 2024 and 2025. Today managing um just over 110,000 validators on on Ethereum.

That's roughly 3.5 million ETH and uh across 1,700 different operators. Um we've been in the space for quite a while. I' I'm personally been in a space for 12 years and um it's kind of obvious that Ethereum has tech supremacy right in terms of its approach to the technology obviously the ecosystem of developers it has and in general the type of innovation and research happening on Ethereum I think that's that's something we can all agree on obviously there are competitors but in terms of its technology and and kind of its vision going forward with today um obviously the rollup ccentric uh role road map going forward with the beam chain and and and and zking the entire Ethereum uh

blockchain and so on really big visionaries behind it and I think that um with the rolecentric road map we managed to scale up Ethereum but we also managed to kind of fragment it right uh there's a lot of different what is known as economical zones in Ethereum right you have the base economical zone and you have the optack economical zone and arbit room economical zone. Those zones are amazing. Each one of them generates a lot of different use cases for Ethereum, but none of them really talks with one another, right? Um if you enter the base ecosystem, you are in the base zone, although it's um loosely tied to Ethereum, but it is a base economical

zone. Then um other than just the fact that it's kind of loosely connected to Ethereum, there's also the question of fragmentation because from the users perspective, they're not really interacting with Ethereum. They're interacting with the based the base chain and that creates a lot of fragmentation both in liquidity but also just in plain user experience. If if there's a one app on chain A and I'm on chain B, I can't really interact with it. I need to move to chain A. That's quite quite difficult. Also, there's the question of value capturing. If those chains are kind of loosely coupled to Ethereum, where is all the value going, right? And I think this issue kind of culminates maybe not 100% but definitely

culminates in the ETH token. So, if the blockchain has tax supremacy, if the token is clearly lagging behind, here we have a comparison against um Bitcoin. But nonetheless, I think that kind of represents the idea or the distinction between the technology and the token. And this divergence is actually quite dangerous. Blockchains are not just a piece of software you can fork. Blockchain are a community that community is organized for the most part by economical incentives mainly tokens. We we already know that from the past seven eight years since the ICO age. And so this divergence is actually quite dangerous and I think it's reflected a lot by the fact that there's

fragmentation in economical zones and so on and so forth. But it wasn't really always that way, right? I mean, if the token was actually once a unifying element of Ethereum, if you go back to the ICOs of 2017, 20 U 16 even started, Ethereum the token or so Ethereum the blockchain enabled ICOs that was very novice. Ethereum the token enabled you to buy into those ICOs. If you wanted to participate, you had to buy the token. And that was an amazing value capturing property of Ethereum. Moving a few years into the future with the Defi summer of 2020, 2020 2021. Again, Ethereum the token powered up the DeFi summer because

you can provide liquidity with Ethereum counterparty trading against Ethereum and so on. So the blockchain enabled DeFi, Ethereum powered it, right? But but what's next? what will be the next use case because it's clearly missing right the blockchain continues to grow the is the token is not and I'm here to say that there's might be a solution I think that the next wave the next reason for answering a really super super simple question is why would the average Joe hold ETH it's clearly not because of gas prices anyone who's ever held ETH you don't need a lot of EH for gas so what will be the reason and I think the reason will be for securing for security. We are moving towards a world

where the settlement layer Ethereum itself is much more about the security properties it has credibly neutral censorship resistance decentralization much more than the smart contracts they have because smart contracts are ubiquitous. Everyone has smart contracts. Claiming you're the world computer in a world where there's a thousand world computers is not a competitive advantage. But being the most secure, incredibly neutral settlement layer is and I think there's a unifying story to it all which goes through something called based and composable roll-ups. You can think of it as kind of the next evolution of the next version of roll-ups. If Ethereum has the rollupcentric road map, then

this is the v2 of that. based in composable rollups offer for once the idea that Ethereum become Ethereum validator becomes this credibly neutral sequencing layer for roll-ups today most of the roll-ups are centralized in the way they sequence transactions basically the way they build blocks and that's quite quite big right that's a major part of being a rollup that's actually the business model of a lot of roll-ups based rollups are actually sequenced by Ethereum validators Ethereum validators is the greatest validator set on earth, the most decentralized, the most diverse and now it receives another type of responsibility that can do which is

sequence rollups. The advantage of that is we getting a lot of the properties from the validator set like livveness and censorship resistance and just decentralization in general but also value capturing because if the if the L1 validators are actually sequencing they actually can capture rewards and all of a sudden there's another stream of rewards coming back to validators which are just ETH holders right so base rollups have this type of property next base rollup also O offer something really interesting which is which are preconfirmations.

Preconfirmations are the idea that you can preconfirm before the block even hits the blockchain. Preconfirm a transaction to the user. From the user's perspective, they can get a 100 millisecond confirmation when they click the broadcast on their favorite wallet. Just think about it. 100 millisecond transaction confirmation. Nobody offers that. Nobody. Not Solana, not every anyone. So it's both based and does preconfirmations but then because we have the same L1s sequencing multiple blockchain multiple rollups we can actually do something called composability. Composability is the idea that we can do between rollup

transactions which are atomic and synchronous meaning within a single transaction I can interact and touch multiple chains multiple rollups and introduce transactions to them and actually interact with DAPs on top of them. So I'll give you an example. Imagine that you are on rollup A where that's where your wallet is but there's a an interesting arbitrage opportunity on rollup B or some NFT you really want to buy right today what you'll have to do is bridge from rollup A to rollup B either through some centralized service or exit rollup A go to rollup B with composability you can still have your assets in rollup A interact atomically

with rollup B your NFT execute on arbitrage returned this the assets back to rollup A in the same transactions within two two seconds that with preconfirmation 100 millisecond preconfirmations basically you've acted on multiple chains with 100 millisecond transaction confirmation that's what base composable roll-ups bring to the table it's a new version or the next version of of of roll-ups and the important point I think it's hyper aligned with Ethereum so we've talked about the economical zones of Ethereum and the way they kind of detach themselves not fully connected to Ethereum but loosely coupled to Ethereum. But if the L1 validators are

actually the ones sequencing the transactions, all of a sudden those rollups are very much aligned with the interest of Ethereum holders because they generate extra rewards to those ETH holders. And so that's extremely important. It's not just about composing or kind of defragmenting Ethereum. It's also about the value capturing properties we add to Ethereum. As we all know, staking on Ethereum has it's kind of a um a zero sum game because the more people stake, the less the returns are, the the rewards are. But now we're opening up this new opportunity. If gas is kind of the new oil, then and and L1 validators from Ethereum can actually sequence and

get rewards out of selling that oil. All of a sudden we have a new reward stream. And so the value capturing properties of Ethereum changes completely. And so going back to the first slide I had which is why would people hold ETH? That's the answer. Because if gas is the next oil meaning computation on the centralized uh blockchains is the next oil and it will grow exponentially yearbyear. If ETH holders can tap into that and basically get fees out of that, that's amazing. That basically means you can buy a position on oil 200 years ago and enjoy the rest of the of the time.

It creates new value and new use cases. This is the reason to hold ETH because no other chain has this amount of use cases and activity that can actually drive a lot of value back to the token. Most chains use inflation to get rewards back to their users. Ethereum might be the only chain that is positioned well enough with enough users, enough enough deps to actually generate those rewards from the users themselves directed to the infrastructure that runs Ethereum which are the validators. And so that's how kind of it's the organizing story of it all. How we can both solve fragmentation and those economical zones within Ethereum, but also how do we answer a very simple question. Why would people

hold ETH? And the answer shouldn't be for gas. it should be for building a position against all of the activity Ethereum has. Thank you so [Applause] much. I don't know if we have any any time for questions. All right, thank you so much everyone. [Music] [Applause] Sorry about this. Uh I I'm a fresh mom

and I have a six-month baby and needed to check that she was okay. That's the the human reality of technologies, ladies and gentlemen. Thank you so much um for for the talk. The next talk we have coming up, we actually have quite a little bit of time. So my apologies. We have 16:30 as the next talk. So, do you have any questions? Anything you'd like to say apart from people leaving us, which is sad. No. All right. Well, in that case, you have around 15 minute. Oh, yes, please. Yes.

It was actually a very easy question that is when like when uh when do you see it coming uh like for real on uh on baset? Thank you. Um yeah so um I believe that base rollups are going to happen in 2025 and there's there's a few tracks in parallel. So base rollups are one track synchronous composability that's kind of that the thing that connects all the chains together. I think that will come in 2026 and probably in 2026 we'll also see realtime ZK proofs for L2s. That will actually open up not just L2 to L2

synchron synchronous composability but actually L1 to L2 synchronous composability. So imagine that you can within one single transaction on Ethereum, deposit into an L2, from one L2, buy another token in another L2, return back to that original uh rollup, and then exit from the roll up back to Ethereum all in one transaction within 12 seconds. And so that's kind of the parallel tracks coming up. I I think the next 18 months will be pretty crucial in that that kind of development. Thank you very much. Is there another question? Yeah, sorry. Thank you.

Hi Alen, thanks for the talk. Uh maybe I can just give a comment and and you can comment back on that. What I was looking forward to you saying more was that Lol came up as a an opportunity when the gas fees were super high, but now with the latest tech ads, Ethereum has low gas fees. Anybody can build. Is there even a use case for L2s? I understand with the rollups you can go back and forth, but why go back and forth when the home is good enough? What you think? So, if we take all of the gas used by rollups and try to push that back to Ethereum, one, it wouldn't be able to manage that, but second, you'll have

again 500 bucks um you know, gas fees, right? Um, so it's it's not um it's not a bug, it's a feature because if you've moved all of the transactions back to L2s, then obviously Ethereum itself becomes much less competitive as versus L2s. That's the whole the whole idea, right? I do think there is a strong case to be made on actually expanding Ethereum um in terms of the gas. So there's a big push now to um to almost d not almost double the um gas capacity for blocks and that's for one for users that actually want to inter interact with Ethereum. Two is for more more blob spaces but also just for having more sophisticated verification and

validation um opportunities again for rollups. And so I don't see that as um as a bug. I really see that as a as a as a as a feature. Right? We've managed to get to a point where the amount of activity on Ethereum is, I don't know, 100x than it was a couple of years ago, but the gas prices are low. That means that we're on the right track. Um, what's dangerous is not the gas price of Ethereum. What's dangerous is that those rollups create their own economical zone and and and they're less and less kind of tied back to Ethereum.

Thank you very much. Um, there was one more question hanging out in the air. Yes. Thank you. Alan, is there any major upgrade to Ethereum needed to make it happen? Um, no. There are a few upgrades which will make it easier. Um, so there's one EIP that uh people are working on on deterministic uh look ahead for validators. That's super technical, but the idea is that it will make it easier to do base rollups, but it's not um it's not a condition for base rollups. Um and so in that sense um you know, if Ethereum continues the same tracks um increasing blob sizes and or blob

numbers and so on and so forth, that that's good enough. Thank you so much. Any more questions? I've actually got one. When we were preparing, um you mentioned you called yourself a dinosaur. again as an archaeologist I appreciate that but you've been in the uh Ethereum and crypto world for a very long time. A lot of has changed. New players like Salana have come in. What do you see the future um of Ethereum against those big players like the traditional ones like Bitcoin or the new emergent ones like like Salana in the last couple of years? How do you see that playing out? So I don't think Bitcoin is competitive to anything. It's I mean people buy it because they believe in the 20 mill 1 million um pyramid scheme I guess. Uh I mean not not to say Bitcoin is not

important. It is important but I don't really see the value in today's world. Uh other than the fact that it's very speculative and people like it in terms of the actual competition. I think that um this road map coupled with a bunch of different other things on Ethereum. Basically um there's not not going to be any competitive advantages to any other chain. The only path to those chains is not to directly compete with Ethereum is to reinvent themselves as featured chains. So for example, they have a feature that Ethereum doesn't have and that kind of may be very specific for a specific use case, right? But all in all, I mean, if we can get to this horizontally scaling composable network of of rollups within the next 2 years with 100 millisecond

even subund millisecond transaction confirmation, that's it. This is a done deal. There's nothing else uh remains in and for for anyone else. that Ethereum will regain its control on on most of the other kind of, you know, deps around. Uh it's not the first time Ethereum has been tried to be killed off. I mean, we had a bunch of them. I think Solana is probably the best one at it because they're serious and they they they actually do a lot of things which are not techreated like BD work and marketing and PR and actually going and talking with people, something that Ethereums don't really want to do. Um, so they're really good at that and I think that's a specific use case, but as a general world, as a kind of general purpose world computer, I think this is

the endgame. It's uh it's it's a done deal. Fantastic. I love that. Thank you so much for your inspiring talk and thank you very much for the questions. Thank you. Round of applause for Alan, please. Thank you. [Music]