Marek Olszewski & Rene Reinsberg: Celo – The Mobile-First High-Throughput Blockchain. Ep. 524

Transcript

welcome to epicenter the show which talks about the Technologies projects and people driving decentralization and the blockchain revolution I'm Fred ANS and I am here with Rene and M who are the co-founders of cell a mobile first blockchain with a strong emphasis on serving underserved communities before we talk with um both of them um let me tell you about our sponsor this week introducing the next generation of dydx and the next version of the dydx token welcome to the dydx chain new token mechanics mean you can stake to secure the network staking is fully decentralized in controlled by dydx token holders all fees are distributed to stakers earn rewards from using the

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back we had you on previously but maybe we can do a quick round of introductions and giving a bit of background on who you guys are how you met and what makes you get up in the morning sure yeah no it's it's lots a lot has happened since we were last on the show um but yeah I was just doing the mass the other day Merck we've been working together for uh 12 years at this point so amican has started a company previously we met at MIT um there was an AI company though back then we didn't think about it in that way um but it was uh you know there kind of the common threat there was it was actually helping

small businesses so again sort of you know sort of you know trying to support the little guy um by better competing online um and we uh sold a company uh to to g daddy and worked there for a few years helped take g daddy uh good go public and uh after that we went back to the drawing board and uh yeah a lot of the ideas that we were getting kind of excited about were things that you know we felt the technology to solice was was web three and so that was you know getting us into the the the rabbit hole so yeah um going on seven years of working on uh what has

become cell which is which is super interesting yeah you definitely make us sound old in crypto when you say that it's kind of hard to believe uh seven years the past already um yeah maybe just to add to that you know I have a technical background uh ADM my2 where where reny and I met I was working on a PhD in parallel Computing and um uh working on something called the terministic multi-threading which just very coincidentally has a lot of relevance for scaling um blockchain platforms today um and yeah coming back to the origin story you know we initially uh started by building a

wallet on top of uh ethereum um that wallet has now evolved and become Bora uh which you can play around with but back then um you know we wanted to make something that was just really easy for everyone to use um that was stable coin Focus that could be like a kind of a global venmo like product um and we tried for a while making it um be sufficiently easy uh for for normies although back then we didn't call them normies uh and ultimately we realize that that to do that we needed to to launch or to work with a community to launch a new chain that had some of the features that would allow you to

build a really easy to use experience um fast forward to today the the network is live and it's been humming along um really well for for the last couple years uh Vora is out uh and used in in countries yeah the community and ecosystem keeps growing and so it's just just been really exciting yeah super interesting um you just alluded to the fact that kind of um cell had to be built in a specific way in order to kind of um work for normies and on mobile phones so what does that mean concretely in terms of Technology yeah so I think first and foremost you know scalability um you need a a chain that can keep gas fees

cheap um just last week cell processed 20 million uh transactions in one day without raising gas fees um processing I think on average 270 or so um transactions per second for again for 24 hours so I think that's a good um example of just how scalable um we've been able to make uh and really it's the validator ecosystem has been able to make uh the sell platform secondly um we really wanted it to have a mobile Focus um and so we worked really hard to create a ZK snark Bas like client that that can sync on mobile devices uh but I think even more importantly we worked

really hard to create something that uh we now call social connect which is a protocol that lets you um effectively connect your phone number to your wallet address in a privacy preserving way this is an optional feature that some wallets Implement uh and and the wallet that do implement it uh allow you to effectively send uh value to to people in your contact list which uh it's just um a real Delight for for anybody who's not cryus ABY and then finally um we we learned early on uh through various tests in in Argentina that paying for gas with Batel assets was just too too confusing for a

lot of users um and so we we actually built native support for paying for gas with tokens that doesn't require account abstractions this is supported by EAS um and U that allows users to send you know stable coins to other users who can then forward those stable coins onwards without ever having to think about um you know what a gas currency is and how to get one there is a whole lot to unpack here maybe let's go through them one by one because kind of I want understand them uh in detail um so um how do you make it scale so kind of how do you get more transactions per second because kind of there's always kind of this scalability

dilemma with the uh security how how do you get it to scale to uh such lengths yeah so I think first and foremost by having an efficient proof of State consensus protocol um I think uh and then secondly um working hard to to ensure that evm execution is happening quickly um I think both of these generally are um challenges for evm chains um and you know we've been chipping away kind of both of these the reality is um on the consensus side you know there there is you know obviously

this trilemma and it's difficult to achieve ethereum level levels of kind of decentralization while achieving you know one block from ality short block times uh with a really high throughput um and and that's um why we're also really really excited about of this coming home to ethereum so to speak um through this L2 plan that solo announced or I guess that clabs proposed and then the community voted on and agreed upon uh earlier in the year um and so I think by transitioning cell to and L2 we can inherit uh ethereum's decentralization while still offering uh these really great features these this

high throughput this um yeah just the sidey throughput that that the chain provides we'll get into that in just a second but um maybe let's kind of go back to kind of um the way that kind of cell um started so basically are you saying that kind of the way that you could scale um so efficiently was by having a fairly constricted set of validators when compared to ethereum so ethereum has like 600,000 validators right so basically how much do you have have to constrict it in order uh for you to kind of get these uh really amazing throughputs cellos right now has 110 validators um and it's actually constricted not by the consensus protocol and scalability limits but more

by the um the ZK snark like client that we have we built this like client we started working on it I think four years ago launched it two years ago using um I would say first generation ZK technology it's a huge achievement um we're really really proud of it um but it does use a very very big circuit two to the 27 constraints using a very big curve pw6 and that is a very big proof uh that we have to generate daily on a very big machine uh and um we couldn't increase the validor Set uh beyond the current

limit without making that even more honorous um and so so that is a current constraint but as it so happens you know it uh we think it's a a really great level of decentralization especially for a decentralized sequencer as again sell transitions to al2 okay so basically that means like users have a ZK Li cine on their phone um and that means kind of they don't have the full state but kind of the full dat is kind of like processed by 110 validators kind of giving you that level of decentralization is that is that kind of reframing it correctly so yes wallets can can use wallets and daps can can use uh we have some code that works in in um using wasm

that works even in a browser wallets and apps can use like client uh or they can use a decentralized RPC endpoint like lava or they can use a trusted endpoint like in fura and connect it to chain that way absolutely okay why don't we see more mobile first blockchains because in principle it seems almost like a no-brain kind of that there would be at least some because kind of if you look at the world as a whole almost everyone is kind of primarily on their phones rather than on um laptops or more powerful devices why don't we see more of those chains yeah maybe I can I can jump in I do think there's

certainly you know it's been surprised to us for how long it's taken for more you know for the broader ecosystem to kind of think more about mobile um and we're we're seeing this you know even if you look at sort of the um kind of average transactions on say Unis swap or curve on Cell right versus on like ethereum inet right amounts tend to be smaller people are accessing these stabs from their from their phones right um and I think that that's uh there's a fundamentally different use case and for a lot of the early Builders right I think um it was just more lucrative to focus on sort of more high value transactions right that traditionally still you know tend to happen um on

desktops right um so for us it was really it started just with a being you know in a sense being very determined to try to make this work for everyone right and obviously like you said most people have mobile devices and it kind of into the ecosystem right where there's the the technical architecture of the chain is is one side but then also you know the kind of wallets that are being built right and there's a rich ecosystem of wallets that includes laora and others that um you know have enabled in a sense like this kind of mobile first experience of of web but then it extends all the way into the deps right where people are have built sort of much simpler interfaces things that can

actually be more easily accessed through a wallet right or you know hooks into kind of wallets that kind of allow you to kind of intact with these protocols and I think there's there's a whole um yeah kind of space for Innovation that I think is we're just starting to kind of see happening and I'm quite excited about when I think about you know even going into the next uh cycle where my hope is that a lot of the you know usage and kind of activity is going to come from Real World users um not speculating on asset prices but you know accessing these rails for you know getting access to credit right or making payments Commerce all these things and uh that's in a sense um needs to have mobile at the core um and so we

hope that some of the stuff that we've built and we Haven we haven't gotten through the whole list so we we should uh come come back to some of these Innovations like social connect that are um you know or fat connect that are kind of starting to be more widely adopted even you know with interest beyond the cell ecosystem right now with the L2 move uh can pave the way for that to happen more quickly yeah absolutely let's come back to uh to these usability improvements when most people think about blockchain kind of it's difficult to kind of even explain to fairly Tech forward people right it's like okay download download this wallet oh okay this is your seat phrase you have to write it down you can never show it to anyone you can also never lose it because otherwise everything is gone so

H how how do you get from there to a place where kind of you can't just give it like less technology forward people you can give it like actual honors to God Nores I can give I can give another example am you I'm sure you have a bunch too but I mean uh this is kind of a very recent example so uh Opera um very successful browser company right I mean their uh market share in Africa is like 90% And Opera Mini is a browser that's built for Android and it's extremely popular because they also subsidize uh bandwidth for for their African users uh they built a seller wallet into into mini called mini pay and the onboarding uh is quite magical I mean people I mean

they're on Android right so people can very easily back up uh their seat phrase on their on their Google account and you know we've uh seen this since the launch of the product in mid-september you know there no one has lost their seat phas right they've been like I don't know thousands I don't want to reveal like you numbers that they're not ready to reveal but there's been very high number of users restoring their wallets successfully without kind of a glitch and that's a massive success for web right that's something that a few years ago we would have all been just very worried about right that that would just you know result in a bunch of you know messages or support calls or people just you know being frustrated and giving up

maybe and um I would say that's a problem that you know today really I mean we can sort of say it's it's it's solved right we have the tools to to Really onboard people that you know maybe other than sort of a browser or Whatsapp don't really even use you know much you know on their phone right and so that's that's amazing right because that opens up a whole new uh population to participate in this digital economy which is I think why a lot of us are here yeah absolutely I I had no idea that Opera penetration in Africa is that high that's uh that's crazy yeah it's it's over 100 million people it's pretty impressive yeah um you said earlier that um uh basically um you let people pay

gas in any token um how do you do that is it just kind of via relay Network or how how is it implemented yeah so it's actually implemented natively in the platform so no relay is required no pay masters required um and and the way it works is um the Celler BL client um basically supports a new end envelope style transaction uh envelope transactions were introduced um with the IP 1559 in ethereum and this new type of transaction basically takes an extra field that is a address for a token that you'd like to pay for gas with and then we we technically don't allow um paying

for gas with any token it's only through a limited set of uh allow listed tokens uh that um are governed through on governance sell has a kind of a dow uh that um has a lot of different uh functionality and one of which is I guess retaining this this allow list and then basically the the client right before executing your transaction will check that the token is that the gas currency desired gas currency is in the allow list and if so it will debit um your balance in that token by doing an evm call into to the Token contract to um to deduct how much you're bidding

for gas um and then at the end of of your transaction it will do the same to credit you any um any balance that owed to you for as a refund um and that's it and you know naturally to help validators order these transactions relative to each other we we do currently have each of these tokens um have an oracle that reports on the price relative to cello it's technically not needed because validators can choose to order these things however they want using whatever price that they they they want but we just wanted to make their lives easier and just have something that they can um look at to make it easier for them to

order the men pool and you know the end result is really easy ux for end users for wallets for daps you don't have to have all of these extra complexity around you know Rel layers or uh new types of ways of signing transactions and additional folks playing a role in the platform uh everything just works natively really really easily and and honestly it's been a a really big success people really like being able to cash in into C USD and then be able to you know Buy eth on a DEX without having to go to a centralized exchange right if you think about kind of the the dream of

enabling fully decentralized you know capital D dap um experiences um than allowing people to to cash into stable coins ideally to a stable coin that's pegged to their local currency uh and then to be able to start transacting straight away um that's really a nice experience a nice self- custodial uh experience that that's possible on solo and with C wallets um that you know helps and support daps uh and and more decentralization yeah absolutely um how do you think about confirmation time so H how how long is acceptable kind of for

mobile user um who actually uses it for like a real world thing yeah it's a great question so we did some testing early on and we found that 5 seconds is still feels Snappy enough uh and so C has 5 Seconds block times with one block finality um that gives us more time to uh achieve consensus which uh is is good for um processing large amounts of transactions per second but you know I think realistically given that there are chains with lower block times I think as part of the L2 transition we're talking about moving that down to something closer two seconds uh but the end result for users is going to be pretty similar

I think uh if you transact on the cell platform Everything feels you know very very Snappy cool um so you guys cater heavily to the to the global South are there challenges that you wouldn't have in the global North for instance I heard that um that kind of device memory is often a problem um so that basically for instance people can't install new apps because kind of they're out of uh out of memory um and like problems we don't usually think about because kind of most people in our bubble have like uh uh the latest uh iPhone or you know top of the

line Android device what has experience taught you yeah maybe just expanding on the kind of mini pay mention I mean that was a big uh Factor also I think when we started chatting with them about sort of this product and they told us sort of how they uh launch products into the market right I think this kind of uh it mapped with a lot of things that we had heard um and learned in in Pilots or projects right we had been a part of as as part of the C Journey um and there were some really nice benefits right so I mentioned that mini Opera Mini kind of subsidizes user bandwidth uh which means

that if you have a wallet that's in the browser right you also basically get subsidized you know uh for for your wallet use so that's that's really cool um they built the actual wallets to be only kind of two megabytes package um compared to I think like I metamask is like 68 megabytes and quis wallet like a lot more even then right so and so that's where you're starting to get into challenges when you have users that are living from you know sort of 50 megabytes 100 megabytes at a time right to get through the week and do all the things they need to do online on that um the cost of sort of updating or even just installing a new app to try it is kind of prohibitive um for for a lot of

users so being really mindful uh around that and you know orienting the experience around that has been yeah definitely kind of a key factor and again this extends to to the ecosystem right and thinking through sort of every touch point every bit of interaction right is there stuff that you can sort of streamline and um make work better um you know on sort of those constraint environments and and sort of loow devices I will say though you know I mean as someone in the global North uh some of these improvements also you know feel quite nice uh when you're you know kind of accessing things on the latest iPhone right so I think it's just like

some of it is you know things don't need to be as convoluted sometimes as they need to be right and sometimes Simplicity even when you are not constrained uh on bandwidth uh can be kind of a nice uh can be a nice forcing function for a better experience so yeah I think that's uh you know it's nice to have the start with sort of the kind of you know the users that will have most trouble accessing the experiences that you're building as an ecosystem and then I think that has nice sort of Downstream effects in terms of all users right and um obviously we have a lot of users in the global South but you know there's also a lot of people in Europe and you know all over sort of the global do kind

of using using cell products yeah I think Luke uh rubeli wrote a book called mobile first back in the day when web two companies were were thinking about uh their mobile first uh Transitions and Journeys and one of the things he talked about in that book is about when you build in a mobile first manner you you know you focus on bandwidth you focus on you know B bundle size all of these things that Ry just mentioned uh but then the end result is everyone benefits even people using your desktop applications and certainly we've seen that in the C ecosystem as well one thing that I think uh people all over the place will uh benefit from is um this user identity linking linking to the to the phone numbers what

cryptographic methods do you use to ensure privacy and Security in this uh verification process yeah it's a great question um and so we have this this protocol it's it's called social connect which under the hood uses another protocol called Odis which is um a threshold cryptography system so we use uh threshold signatures on bls2 377 uh that effectively allow uh a quorum of uh Otis uh nodes uh to respond to any request to look up a um a particular s number um or the address for a particular phone

number and by doing this no node on its own can uh recover the phone number for or the address for a particular phone number uh without uh a threshold I think is 50% of these nodes are responding and I think that's really really nice because you know certainly it it offers privacy guarantees it allows uh these nodes in a distributed way it's not quite decentralized because it's a permission set of O signers but it's a um a big set there's I think tens of these notes uh and they're all doing their own kind of attack detection to uh

make it uh hard for any one attacker to try to um identify all of these phone numbers okay so basically in essence it's distributed um Set uh with a threshold but where where basically I can ask them for the private key that is uh somehow connected with your phone number basically they they they give me that but basically I can't go the other way around is that is that correct or how do I think about it that's close I think with the one changes they give you the um not the private key but they give you a Suk that you can use to uh derive the wallet address and so the wallet

addresses are stored on chain but are uh hashed with a unique salt per phone number uh and that salt is what this Odis server um Otis servers uh are are giving you uh for any given phone number and and you need to to request it from a threshold of these servers okay and if I want to update um my address I can I can do that by contacting them too right yes you don't even need to contact them you just update uh on chain the mapping um because you you know your own salt and so uh you're able to uh to to update the mapping yourself and can you do that

counterfactually so so someone who's not been uh registered with um their phone number can I send them is it deterministic can I send them uh kind of funds and the um threshold set um can kind of know which uh which address um the the the wallet's going to be deployed to kind of like cre to yeah it's a good question so the Sal is deterministic um per deployment of Otis we're on our second deployment now um and so there was a dkg that was done um so that's a terministic but the and that's deterministic regardless of what portion uh of these nodes respond um

what 50 % portion of these um servers respond but the second piece is registering your wallet address on chain and that part is non deterministic you can register any wallet address if I send it to someone who's not yet kind of signed up it just goes into Nirvana so right the solution for that flow is we have an escrow smart contract and so wallets can detect that the user hasn't yet um signed up at that phone number um and so they send the money instead to an escro smart contract and then uh the escro smart contract will only release the funds to someone who signs up with that phone number uh

and then wallets can automatically um fetch the funds as part of onboarding um and so I think you're asking about what's the experience like for you for someone who's sending money to someone who isn't yet uh doesn't yet have a wallet and and the answer is that the experience is exactly like you would hope hope it to be which is that you know the user uh can send the money anyway uh and then gets prompted to to invite the um the recipient you know to the platform usually using like a WhatsApp or text message uh and then those users can then sign up and and have the the funds claim the funds automatically you said earlier that uh

that um cell announced um over the summer that kind of it would or there was vote over the summer that kind of it would become an L2 on ethereum rather than remaining its own L1 so specifically kind of if I recall correctly um you're going the validium route on the op stack um with um like data availability um with igen da how did you arrive at this decision I mean first of all kind of like the general move kind of like of coming home to ethereum rather than remaining your own L1 because obviously it also comes with drawbacks right I mean you you you do inherit a security from ethereum to Second certain extent but you also pay

for it um I mean you avoid most of that that cost by uh by by not doing data availability on etherum natively but it still comes with considerable cost which kind of when you when you look at um serving the global with sa with kind of like low value transactions and so on it it must have been a difficult decision no maybe Merck let me jump in first and then you can go into maybe more of the detail but um and I think you had mentioned this in the earlier part of the conversation right uh that when we first started settle we actually built on ethereum right and in in many ways

this has been a constant I think we've been obviously closely following everything that was happening in The Ether world and uh the sort of idea had come up before but this was the first time where you know also to what you pointed out right that there was a potential design where the end us experience particularly around uh fees right would be workable um in terms of not sort of creating kind of obstacles that would be to hi to you know for the current sort of use cases on Cell but also for the stuff that we want to continue to see on C so uh when that became clear I think there was very quickly uh kind of excitement building within the community and uh

before we kind of went more public with it in the sort of broader Community um yeah I think we we kind of did sort of our initial research on it and we can go into the details but I will just say and you know a lot of this work is driven out of cabs um and so meric can can can come in more in the sort of playby playay but it's been just phenomenal to also see how um for us it's kind of it feels like a coming home moment but also we've been receiving such a lot of support from the broader e theum community and a lot of people that I think had followed our work over the years but um now I think felt sort of maybe also more uh more urgency or just seeing that there maybe kind of more

opportunities to kind of partner and collaborate which has been uh really amazing to see but but yeah mer I'll hand it to you for some of the technical choices in that initial design and maybe kind of where where some of that uh is is now yeah and you know I think this has definitely been kind of a journey for the whole ecosystem and and Community I think as Ry mentioned you know we we started off um building an ethereum um and ultimately to accomplish what we wanted to to accomplish we we felt that we had to work with the community to create a new chain an evm compatible chain because we believed in ethereum and we believed in evm but

nonetheless still a new chain and you know over the years obviously the rollup um based scalability road map um kind of continued to get refined more rollups launched it became very very clear that um that ethereum was succeeding with the strategy and so given our excitement for for ethereum you know I think the community he actually been long talking about ways you know going as far back as 1.5 one and a half years ago you know talking about what could cell look like as as a potential L2 and so coming back to this year you know cabs um I think

with the announcement of Igan da realized that oh actually there's a there's a way for us to become an L2 while keeping gas fees cheap while also doing it in a very ethereum aligned way with igda you know effectively being run by ethereum validators you know we felt that we could create an L2 design that preserves all of the features of C all of the benefits of cello while still plugging into the ethereum scalability road map and being part of you know ethereum's scalability plans and so I think that that was this aha moment for us and and ultimately why

you know cabs put forward this proposal we wanted the proposal to be very concrete and so we actually did the leg work to come up with an architecture that uh as you said you know leverage OPAC uh leverage IG da we also thought long and hard a lot about one block finality which is a feature that sell offers and we wanted to preserve not and one that's not trivial for l2s to offer and so we spent a bunch of time on that we we put forward a very detailed architecture proposal uh that the community voted on um I will say that you know since then uh we've got a lot of inbound from a lot of L2 Stacks that have been pitching the community um on

you know other LT Technologies and so even though even though clabs has been building on op stack since July since that proposal passed um there continues to be conversations at the community level about you know maybe there's others ZK evbm Stacks that might be a good fit for for C and so um that's been exciting to see it's just been you know really great to see not just the whole cello ecosystem get really excited about this but you know the broader ethereum ecosystem the reception has been just absolutely amazing so it's been really really great how does single single block find it kind of mesh with fraud proofs and

kind of uh maybe it's a false dichotomy but in my head either you can kind of you get shared security from ethereum and then kind of you need to to let people um to to leave them a pass to actually access um ethereum security layer by kind of escalating a conflict on on the L2 um or you get single slot finality how do you to that tow that line yeah it's a great question and I think the the answer relies on this kind of fundamental observation that uh for finality the the fraud proof window is actually not important and and neither is you know CK proofs necessarily ultimately finality

for most l2s is accomplished by posting transactions uh to the L1 uh and as soon as they're on the L1 they're deemed kind of final right any fullness node uh following the chain deriving blocks on the Chain uh will will will deem those blocks as final the fraud prooof window is actually irrelevant that's mostly for the bridge itself for the native bridge but not so much for finality um and so there's two sources of um potential reorgs that can happen in L2 uh one is from the L2 itself so if you have a sequencer that tells you that

the next block will look like this but then submits a different block to the L1 then L2 clients will have to reorg when they you know first they'll get the the first block and they'll assume that that's kind of an unsafe but likely block to uh to get promoted to a finalized block but then when they see what actually um got posted to ethereum they're going to have to uh reorg and enroll back and so that's one source of noner of reorgs and then the other source of reorgs is just the L1 itself right if ethereum reorgs then the L2 uh naturally has to reorg and so to address this we um came up with a design that one has a

decentralized sequencer uh and two relies on slashing for equivocation by that decentralized sequencer uh so if the in order for a um transaction batch to be um to be kind of sequenced you need 2third of these sequencers to sign off on it and if they ever sign off on another transaction batch and post that to ethereum uh then that's easy to prove uh and a slash B condition and by having a more than one sequencer you can actually have um more stake that is at stake um when uh when

these folks misbehave and so that allows you to effectively have what we call kind of cello security to offer uh a finality guarantee that can exist uh in a shorter window than uh whatever period by which you know batchers are are submitting transactions to the L1 and then secondly um you know for the L1 reorg uh the solution there is to effectively wait for transaction to be finalized on the L1 uh before they are imported into the L2 so that means any Force transactions any deposit transaction that happens uh on the L1 we have to wait 12

minutes effectively uh before those transactions appear on the L2 and in that way even if the L1 reworks those transactions you know won't have appeared yet on the L2 and so the L2 doesn't have to re yor um so those are the two kind of changes and I was talking about this in the context of a rollup posting transactions to to the L1 but everything is very similar even in the case of the L2 using an Alda like I da I think uh that that makes a lot of sense do you use the the validator set that you had kind of as an L1 um kind of for the decentralized sequencer or how

do you construct it because kind of that's been a really hard problem for all l2s kind of sequence or decentralization and by in a way you already had like I mean if if you think about it in those terms kind of the the the sequen in in is is kind of your validator set right so basically the sequencer is that entity that's allowed to kind of actually build um the blocks and you already had 110 distinct entities so how do you unmesh the these two things yeah that's a really great question and the answer is 100% we will transition the valider set to the decentralized sequencer set there's a lot of benefits in doing that uh and it just ends up being a much more

elegant migration for for the ecosystem um and things like uh slashing for equivocation we actually get for free if we do that because we already have uh slashing for equivocation on cell and so all of the finality guarant that we offer today basically the L2 inherits and then adds to that ethereum security and finality uh just with a longer time period so if you're doing a small transaction then maybe you're happy to wait for the cell sequencers to uh agree on a transaction batch but if you're doing a big transaction maybe you wait a little bit longer until that transaction uh the existence of that transaction gets logged on on

ethereum how often do you settle to to ethereum because I mean so basically if you look at the costs of l2s I mean it it it depends how often you kind of check into ethereum but typically like 95% of the transaction costs kind of go to data availability and then like 5% go to like checking in obviously you can kind of lower that by kind of checking in less frequently but then kind of you have security later so H how do you navigate that and did you decide kind of kind of on a ceiling price say for 100,000 gas or something that kind of you think would be acceptable to your average user yeah it's a really great question um so we haven't uh decided on on the period or or the price right now I think

we're still doing that work and one Nuance I guess for us is that we're staring the transactions in IG da uh and then IG da reference kind of pointer back to us and we have to store that on ethereum uh and that is much smaller than obviously the set of all transactions and so the gas cost of of storing that is is much much much less and so that's how we can keep our low gas fees is basically by replacing that 95% cost that you just referenced with a much smaller cost that um is is likely going to cost you know something like 5% so we might double the transaction fee

on cello but we won't you know 20 exit um as part of this transition uh the exact period by which we'll be posting that I think also depends a little bit on igda IG just went to testnet uh two weeks ago and so we're still waiting to see what the production specs will look like which will definitely impact kind of the design Choice here so the danger with being an L L2 on ethereum is obviously that kind of your transaction fees are directly coupled to eum transaction fees right because you kind of have to you have to pay Pro rator the kind of check-in costs of cell on eth and currently gas fees are pretty

low but we've seen them spike in the past and if you if you kind of expect ethereum to kind of eventually become the global settlement layer and if you look at kind of the the the scaling road map of ethereum there's not actually I mean Beyond dank sharding which doesn't help you all that much because you're already using igda anyways um there's not all that much to seriously speed up um uh scalability on ethereum in the next couple of years H how how do you think about that kind of in terms of the applications that kind of rely on fairly low fees yeah I I think this design um caters to them so I think by only having

to sore the the IG ref um you can you can dramatically dramatically lower the fees uh and certainly you can also um change the period by which you're storing this so that might also potentially give some uh wiggle room for for the chain but yeah I think given this design I'm not not too concerned even as ethereum prices go back and and go beyond where they were in um in the last B market I think it goes It goes back to the earlier question as well right I think you know you can offer cell security right for some like for a lot of transactions right that kind of are below a certain threshold but that have

ethereum security for sort of the more valuable transactions right and sort of um you know I think in many ways this is a concept that we're pretty familiar with um even kind of pre web stre right in terms of like you know the stuff that's in my physical wallet right kind of the security of that versus you know what's in my bank account and and so on so I think it's kind of you know and I think this is just a very simplified view of this but I imagine as some of the L2 infrastructure kind of hardens right and uh the improvements that you know all the teams that are focused on this are making even you know since July since we kind of more openly started kind of that exploration has been pretty

encouraging that there's a path towards continuing to lower that cost but even if you completely discount kind of like all of the data availability cost that you incur kind of just by settling on ethereum periodically you kind of you have to pay that fee kind of as in L2 and you kind of have to kind of put this on the single transactions that kind of happen on Cell which does actually put um a um a flaw on how little a transaction can cost right and kind of if if costs on ethereum go up kind of the costs on sell have to go up by the same amount just by virtue of kind of

ultimately settling on ethereum so I think so you're right there is a floor uh but interestingly this floor is not tied to the number of transactions in the L2 right uh it is for rollups right because you have to store transactions on chain but if you're using um igda for data availability then the number of transactions that you put in any given block can be arbitrary uh the size of this IND reference is fixed uh likewise when you update the state route for the L2 Bridge uh the amount of transactions that uh executed uh between State root updates can be arbitrary so so if it

came to that you you would just kind of prolong the period you'd wait until kind of updating the state route on ethereum yeah I would be surprised if we would have to do that because I think um uh even at high gas fees um the uh just based on the amount of economic activity happening on sell today like I I don't think that that would be necessarily required but yeah absolutely I think that I think more than that I think we would look to scale solo so that it it keeps up with ethereum gas prices I think is the answer in principle it also seems like a good route for kind of other chains to kind of decentralize their sequences

right because kind of yeah it is a major problem but maybe let's just move on um so we already talked about mini pay the application um of Opera Mini um that kind of gives users natively a wallet without them kind of having to think of it as a wallet um you also recently um had something launch on Cell called credit Collective which I found very enticing can you talk about that yeah I mean one one of the use cases I've personally been uh and I think many in the ecosystem since the very early days is giving people access to credit um and so this actually was really an entirely L uh kind of community Le effort uh where a bunch of

people that were working on credit protocols got together and started meeting and organizing and uh you know some of the activity was centered on Cell but it wasn't like you know that wasn't sort of like oh you know you can't you know can't be here if you're not on S so actually a lot of uh the early members were kind of building in different ecosystems and uh one thing that was kind of interesting with with credit Collective it started really just uh as a bunch of people that shared that kind of interest in bringing these solutions to Market um meeting up and exchanging ideas without sort of it starting you know like usually a lot of these things start with like you know funding or some other thing right here it was really

just it was kind of like um you know a group of people getting together and exchanging ideas and then at some point cre Collective sort of formalized that and actually applied to the the cell onchain uh fund uh for for funding for effectively funding to help bootstrap adoption of these protocols so they requested I think it was a total of 2 million uh sell Euros kind of s back stable coin or kind of linked stable coin P stable coin um to be used as uh kind of seed seed capital on these protocols to extend in many cases what is you know direct to consumer or kind of you know small Enterprises in the global sales uh you know kind of credit

and and just to be clear these are you know for the most part uh under quized or non- quized uh loans so not sort of the the ones you would get on a or or compound um and and really sort of extending I think the utility uh of of web3 right to kind of the real world which is which is something that's really exciting yeah I don't know if you had specific questions about it we should also um you know I maybe to connect you to some of the people working on that but I've I've been pretty excited by seeing something like that kind of take form and you know sort of that self-organizing and uh you know creating sort of funding umbrella uh to it you know was was really cool to to see to

see that happening yeah and it's been cool to see some of these projects take off right so impact Market which is Ubi project on Cell uh recently launched a micro lending campaign I think they have uh hundreds of thousands of of dollars now that they've been uh lending out in the form of microloans you can think of this as being an analogous to Kaa uh in the web two World um I think Kaa has had a lot of success in in having this kind of donate to lend kind of uh strategy and and I think it's it's had a lot of impact globally and impact Market is now replicating that by by using crypto rails

um allowing them to operate at you know a fraction of of the overhead of of something like kba and so yeah it's been it's been really great to see um I think this these are the types of use cases that we have long talked about in web 3 and that have gotten a lot of people uh you know myself included excited about web 3 early on uh and it's just you know so nice to see them you know finally working on a large scale um yeah been great are these sort of local initiatives so kind of is this kind of like say for instance I don't know where uh where impact markets or kind of the the the K equivalent um are based but are these kind of by locals for locals

or is this kind of by um well-intentioned Global northeners um for the global South it's a mix um so they're definitely projects that are originating in you know nari Manila and you know sort of Right Where the activity is um but it's but it's also yeah it's people coming out of the keas right and wanting to bring that uh experience to solutions that I think have the potential to scale um you know a lot better and and leverage sort of the the infrastructure that web stre can provide so it's uh it's actually interesting because I

think that cross pollination is also some that's I think benefits both right it brings more of that local expertise to you know maybe the teams that are coming at this not with that firsthand experience um and also you know the other way kind of helps um the teams that are kind of local right kind of exchange ideas with you know in terms of like yeah product development other things that are maybe you know harder to kind of find peers in sort of local markets uh especially around some of these very specific use cases so um yeah that's that's been that's been fun to see how do you Foster and engage with um your local communities I imagine that I mean you are both you

know Global Northern us so kind of how how do you build communities in those places look a lot of it happens at events community events sort of in you know nothing is replaces in person I think in many ways um americ and I joke about this but the pandemic I think has probably uh you know put us you know back you know kind of definitely quite a bit right because in in those years it was impossible kind of to travel right and and spend time with with comput on the ground but um I mean personally I try to spend time um you know going going to meet with kind of local entrepreneurs and like even kind of see

how the products that they're building being used and just try to stay as close to that as possible because I think it does help you know when you talk to enough entrepreneurs and they tell you kind of their honest opinion of what needs to improve for them to be successful right that kind of um gets you the clarity on sort of the more infrastructure level right what are some of the things that are not you know that that maybe you can help sort of move move on right and so that's kind of how things like social connect or Fiat connect which is you know protocol for helping people on and off ramp more easily in in these different markets have come about and that's I think uh something that you only I think uh do get a sense for if you do spend a lot of

times with the the builders in in local markets and I assume you kind of you have Community people that are employed by the foundation or one of your companies kind of like in in in those local communities right we do yeah I mean a lot of the team members also that are working you know at clabs or Vora or Foundation or Mentor you know some of the kind of early ecos some projects are also based U you know kind of all over the world so there's there's also a lot of that kind of expertise um but I'll personally say I you know I try to spend as much time as possible with with with Founders in ecosystem and you know I think that's been that's been really I think for me the best way to stay up to date on

what's Happening um you just mentioned Mento um and reminded me that last week you guys announced that there's going to be a Mento Dow spinner out tell us about that let's get into it yes so I mean for people that have followed cell for um you know since the early days uh they may remember that through onchain governance um a series of stable coins were were launched um still a dollar still a Euro still real and uh you know that's become definitely one of the differentiating factors for the ecosystem and I think we've been very fortunate that there that there's been a team that's uh um basically said hey you know we want to uh go and and grow this

much more quickly than you know I think is otherwise would be possible um as just kind of a public good under the sort of General ecosystem umbrella and uh basically created a proposal um or kind of a process for um for taking this uh protocol and really making it Standalone and yeah very kind of recently just I think it was last week or so um the team has put forward a proposal to kind of start talking about how they Envision uh governance to transition from from cell to kind of a sort of a mentor token to to to do that um so pretty exciting to see um you know in a sense of taking some of these

things that you know initially maybe were kind of smaller features that may cello unique that have becoming protocols in their own right and I think you know because of that are able to have a much more ambitious um you know kind of agenda and potentially impact on the broader ecosystem um as a result so that's that's been that's been really exciting to see yeah especially just thinking about this in the form of just Dow governance right I think having a potential Dow spin out I think it's just an exciting exciting thing to be happening and so yeah I'm just eagerly awaiting next steps on on that it's pretty cool yeah super cool so you guys have been been around um with cell

for say six or so years where where do you hope to be in six years from now wow probably still working on Cell uh I mean I really I I do feel there's with every sort of you know inflection point in terms of the technology or you know how the ecosystem is growing I think there's you know you kind of you it's like you're climbing a mountain and then you kind of you get to the point and you're like oh man there's all these kind of new Pathways to explore and like different ways to grow and and so I I really I mean our uh I think we talked about this in the past right sort of the cell uh as a as a name comes from

Esperanto means purpose and you know we early on one of the first things we did even before writing a line of code was to sit down and write down you know kind of a mission for what we wanted to build and a set of values and I think that has uh really created a lot of space for within that what cell can be right and of course now it's no longer just the two of us and SE co-founder and some of the early team but it's it's a whole Community right and so a lot of the stuff we kind of get for free on where people are sending us M hey I built this on Cell It's like wow yeah this is like so cool I don't think we would have ever gotten to this right so that's nice to see but I think there's still a lot of

uh White space right in terms of if we we take sort of prosperity for all as sort of The Guiding Mantra you know that that can mean a lot more things than the things we're able to execute on today right and I think that's um that's really exciting because I think the metric that um is probably least talked about in these uh things is sort of the the Brain Trust you can build around a project and an EOS and sort of the ecosystem right and I I think about like some whatever you recently we were kind of going deep down the rabbit tool on on D side and I just you know happen to be in our community space here in Berlin and I was like there was a founder and was like hey have you talk have you

looked at this and like oh yeah you know here's some ideas and he immediately pointed me to some kind of other things and it's kind of like it's incredible to see how much more quickly one can move as an ecosystem on some of these pretty hard difficult kind of Concepts and I ideas right and some of these things may take years to get to full fruition right but it's possible when you have kind of a mission Allied group of people that are all sort of in a way like oriented around the same kind of shared set of goals and so yeah six years from now probably you know like yeah working on things that uh hopefully expand sort of what what cell can can

mean in terms of bringing more prosperity to more people um but probably also some very you know like stupid things that we thought would be solved by then you know I mean I back six years and we're like okay on off ramping seems pretty easy like lines seems pretty hard right and uh guess what we're still we're still tackling on an off ramping right so I think that's sometimes also hard to predict but um I think a lot of you know whatever it is it will be under sort of that kind of General umbrella of the the mission Northstar maybe just to offer my take people are are frequently surprised to hear that Tron is is is the number one chain by daily active users uh and they do that primarily because there's a lot

of payments happening um with te on Tron globally and so my sincere hope uh for this H ecosystem and for the ethereum ecosystem uh is that you know we can reclaim uh the ethereum ecosystem can reclaim that top spot and you know that sell can be the L2 uh that um where you know that that type of activity is happening um we're already seeing a lot of that happening on solo I think we're frequently a top 10 Chain by daily active users um but uh let's work together as an ethereum ecosystem and and take the the top spot we don't need to wait five years for

that we can do it sooner that's a lovely closing remark um where can people go and find out more about C how to build on you or how to kind of uh use products that I build on cell or kind of just get involved um with the community I mean definitely cell or.org um is our website uh for the ecosystem uh Twitter uh as well I think is sort of form where the you know we try to kind of capture things that are happening in the ecosystem there's regular uh Community uh you know kind of meetings some of uh them kind of organized by the community uh usually at

most of the major conferences there's you know eum conferences there's going to be some event or meet up as well um I would my recommendation would be if you're someone who's interested in sell or getting involved in the ecosystem just yeah find out where the next event is and show up or or ping someone you know in the community of founder even um I think there's so many touch points and I think uh I'm you know happy to vouch for you know really you know the ecosystem Founders that they're all a friendly bunch and you know will be very happy to chat and uh and and sort of give their perspective and and and help and support new people coming into the space and uh yeah I think those are probably the sort of more General things

um I do probably also want to plug uh unpluged which Merrick you you started with Kobe a while back just to share updates on the progress around the L2 work and you know where you're sort of bringing folks on uh to to give sort of more detailed kind of tech deep Dives on on some of the diff you know kind of the different areas kind of across that that stack that is being considered and I think I mean I I like every time I listen in on on those I I learn uh I learn something so highly recommend that even you know if you're not just interested in sell but just generally following L2 uh sort of developments in the Brad ecosystem super cool thank you

both for coming on to was super interesting thank you for yeah thanks for having us this was amazing I love the questions