Massive Arbitrum Acquisition!! with Steven Goldfeder & Preston Van Loon

Transcript

hey bankless Nation welcome to another state of the nation episode we've got a really interesting topic for you to cover this is the first I think in crypto history maybe ethereum history uh the acquisition of Prismatic Labs by off-chain labs this is arbitrum a layer two acquiring an ethereum core development team a core client team that's what we're here to talk about David what are we getting into today yeah I didn't know that this was possible I don't think anyone would realize like oh yeah you could acquire a client um and so this is what we're going to be talking about today uh why exactly did Arboretum acquire a client a layer one client what does that do for

arbitrum uh what does that do for prismatic labs in prism uh what is the future of prism is prism staying the same is it changing uh what's the future of arbitrum is that staying the same is that changing uh and there's also some broader questions as well uh I remember Ryan during the deaths of the bear Market 2018 to 2020 the ethereum world was plagued by how do we fund our open source software teams our open source layer ones does arbitrum with the acquisition of Prismatic Labs bring an answer to that table uh do we like that answer are there costs and trade-offs with that answer of a commercial entity acquiring a client a layer one client team so there's a discussion here

there's many many other things to discuss is like what does this do to the arbitrum tech stack and overall what is the win-win between Prismatic labs and off-chain Labs so these are the things we are all going to explore here on the state of the nation today yeah I think it's really interesting I think maybe the answer to the question is Layer Two will help fund the development of of layer one that seems to be what's going on today a full disclosure as we get in we do these disclosures the beginning of every episode I invested in arbitrum I don't think David did so uh David you could play the role of a bad cop bad cop I guess um arbitrim is also currently a bankless sponsor president David are super good friends and hang out a lot David did you write that in the agenda yeah that is my

disclaimer okay I guess that's a disclaimer maybe we should have a friend's disclosure page but um David would have to basically put everyone in crypto because he loves everyone uh anyway you can always find access to our disclosures in the show notes we'll try to mention them at the top of every episode but they're always published bankless.com disclosures also before we get in want to tell you about our friends and sponsors at push I want to know about something cool so push is an app for ethereum for polygon as well and it answers questions like this David have you ever woken up in the middle of night and you've been like oh my God is my ens about to expire like the the five the ten I have like hmm when was the expiration date I said that for a year

or was that like five years or even like questions like is my collateral okay am I liquidated well did you know push actually provide adds you a way to get notified of for when these things happen so for example ethereum ens name renewals you can opt in using push connect your wallet download the browser extension download the mobile app and you can opt into all sorts of notifications including maker Dao these are governance updates but also collateral ranges as well is your uniswap pool out of range if you stopped making money you can get notified about that uh David what else should we tell

them about push yeah overall it's just something we need to start to mimic the web to ux something like web 2 that's what ux is what they've optimized for and it's actually really hard to get push notifications out of the ethereum protocol these things don't really work very well so that is why push is here to cover that Gap and especially as we get into the world of the metaverse where there are many many many other types of notifications coming down the pipeline to explain to us what's going on in this Digital World we're building we're going to need something like push to actually push notifications to our mobile devices in a web 3 manner sorry take it from a robot like me you want robots working for you you don't have to do all the work yourself uh hire them so click the link in the show notes you'll find out

more about that okay why are we talking about this today David what is the overall significance and what should listeners pay attention to as we talk to Stephen from arbitrim and offchain labs and Preston from Prismatic yeah overall it's it's kind of what I said in the intro intro there is uh we perhaps have found an answer to Perpetual layer one client development there are synergies between a layer two who needs Tech and needs software that's similar to layer one and so there's actually some sort of like Elegance behind the acquisition of a layer one client team by a layer two uh how sustainable is this can other people copy this model are we actually

incentivizing more client teams to be built if we can like kind of show them that there might be a Payday at the end of this and how good is that all of these are things are important questions I actually Ryan in my time at Defcon asked vitalik buterin this question in a little micro interview that is currently in the hands of the bankless editors so vitalik's take will slow shortly be up on the bank List YouTube yeah I'm just using it uh uh because uh I was so chaotic that week that I can't remember what his answer was so well I've been appropriately teased sir because uh I I don't recall you mentioning it to me either guys will be right back this episode with uh Stephen and Preston talking about arbitrim's

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fastest modular execution layer in the industry by supporting parallel transaction execution fuel unlocks significantly faster throughput for the web free world fuel also goes beyond the limitations of the evm with its own fuel VM which is more efficient and optimized opening up the design space for developers and lastly fuel brings a powerful developer experience with its own domain-specific language Sway and a supportive tool chain called fork with fuel you can have the benefits of smart contract languages like solidity while adopting the improvements made by the rust tooling ecosystem letting the fuel development environment go beyond the limitations of the evm if you want to learn more there's a link in the show notes to see how you can get involved with a fuel Network we are back guys a layer 2 team has

bought a layer one a client development team on ethereum you're here to talk about it this of course is the off chain Labs AKA arbitrum acquisition of prism uh is I think the the main the top ethereum uh two used to be called ethereum two Beacon chain consensus client I should say we have the two folks that know the most about what has just happened we've had them both on the podcast though previously they've been on different teams and now they're on the same team part of the same family of course we're all the ethereum family I guess but it's great to have you back uh Stephen goldfedter Steven is of course the co-founder CEO of off chain Labs the team that's building arbitrum and Preston Van Loon is the co-founder of Prismatic Labs a leading ethereum L1 client one of the first organizations to

start actually writing code for eth 2.0 and boy I remember it well when you guys stepped up to the plate and volunteered for that it was awesome uh first of all I just want to say congratulations on this Arrangement on this acquisition position it seems like a pretty good match thank you thank you so much yes so I definitely agree it seems like a great match and we're super excited about it well we're going to get into it um and um also I want to ask too because I know you're both at Devcon and that was just was that just last week David Stephanie and actually I was talking to this evening before you came on Stephen was actually not at Defcon so actually it was just oh you weren't okay so the guy who wasn't at Devcon is saying you were both a Devcon

so what David why don't you ask the Defcon question yeah president how is your Defcon that was amazing you guys should have been there well played um well why don't we start talking about um arbitrim and Prismatic then so um Stephen like how did this come about first of all and uh what do you see as the is the big win for both the organizations here yeah so the way it came about is we got to know the Prismatic team uh pretty well over the course of the past uh several months or many months at this point and um the more time we spent together starting virtually than we actually had in-person sessions uh the more it just made sense and we realized that we thought about a lot of things uh

in the same way um in terms of our vision our vision is you know to scale ethereum and its role of centric road map and that requires obviously layer one components and layer two components and we had a lot of the same shared goals and even personal interests the things that got us excited the conversations the whiteboarding sessions the you might say the nerdout sessions you know we did a lot of those and it was uh super super exciting and you know we um really um just meshed together and it felt right and as those conversations uh as those conversations move forward we basically um you know said hey we could accomplish a lot by by joining forces and by uh working on solving this problem together and you know the thing that we you know

in a very broad way the thing that we accomplish is we're really very much you know working towards the same goal from different angles of course working on different parts of this puzzle and different parts of this problem we have lots of shared experiences and lots of different experiences that we can apply and you know to one another's domain and it just felt right and felt like we really were values wise aligned and everything else just sort of fell into place I'm sure there's a a great dating metaphor here so I'll lean into this a little bit more so now that you guys are together uh what was the dating process like from your side of things Preston what was it like to to begin these conversations and overall like uh why how did these conversations get triggered in the first place like uh I

think everyone when we heard the announcement was like oh uh you can acquire a layer one client team uh who had this idea and how did these conversations progress why did you swipe right you know well with with the merge finally happening we were wondering so what is what is the next you know highest impact work that Prismatic Labs can do and our our mission since the beginning has been scaling um so we we started looking at the roadmap taking a look and saying what is the like longer term vision for for prismatic and and how do we further our impact and really be uh help you know make a theory be a thing it goes fast it's cheap um so we started thinking about the role

of centric roadmap the sort of the direction that we're all going and with that we reached out to the octane Labs team and said you know he we have some ideas for a collaboration what do you guys think about this we got EIP uh 4844 for data sharding coming out and it it makes sense to have a closer relationship and like Stephen was saying the the more I guess dates we went on the the better we all felt about it and and uh towards the end we're like wow this is a really cool idea and a really cool relationship that's forming and we are so aligned on the same uh uh vision of scaling ethereum that that it really makes sense to you know not only have a

close relationship because of the role it's a great future but also to you know be working together because there are things that that we think we do well and we know there are a lot of amazing things that uh our chain Labs as well and having that kind of synergy and and sharing knowledge and talent it it just you know it's for the greater good so we're really excited to to um to be joining forces with off chain so what are the big wins on the Prismatic Labs side of things like Preston what would you and Raul and all the members of the Prismatic Labs what's the Big W here for you guys well the the big win that we have is that uh the support from off chain is is massive right we have some resources there a much bigger organization

um that can help us sort of offload a lot of the tasks that that aren't core development uh I think the big thing that Raul and I learned over the last say five years is that uh there's a lot of work that needs to be done a lot of unfun work that comes with I guess running a business Prismatic Labs is a business and we have to think consciously about funding we have to think about you know what is our our like purpose like our bigger place in the community like long-term Vision especially after the merge where uh it's a very different world so um right away we we've got a bunch of time back uh we can leverage some of the resources capacity with with off chain labs

um we have a bigger talent pool now and we can share uh knowledge and brains between offshine chain and Prismatic uh working on the prism client you know the big takeaway here is that um we get to continue working on prism and do it even more of a focused fashion that's the big win that that that really helped us you know rationalize to say this is the right thing to do we're we're all scaling and and and right away we can realize the benefit even just this week does this um how does this benefit the ethereum community uh then present do you think is it is it kind of linked to that so you have now more time to focus on actually building you and Raul and the rest of the team can actually focus on kind of like building

the next feature set for ethereum maybe um you know shipping things like EIP 4844 faster potentially like you're less like you know I have more focus on that is that is this a win for the community and so you know zooming out from Prismatic Labs what would you say about the win for ethereum here yeah absolutely I mean from the core development side the layer one side we get to iterate faster uh to be more focused in our in our work and then in the bigger picture the longer term we're all scaling ethereum here so um that helps the ethereum community in in the bigger picture one one quick uh you know question I had 40 Preston was about like initially how

Prismatic was funded because I think some people don't know the full history of this like um you know some listening might be kind of old enough in in their ethereum or to kind of remember the the dark days maybe of uh 2019 where you didn't have much Direction in terms of this thing we called eth2 and sharding and um you know wasn't even called the merge back then but proof of stake and um Prismatic was a team that in the early days I think you and Raul kind of stepped up to the plate but there wasn't a business model for this like there wasn't um as I remember it now you were there you could you could tell me but there weren't a lot of VCS that were really excited about writing checks for something that already had a token I

mean you're developing for a token that already exists it's called eth wants your launch your own layer one with its own token and you know that's how we kind of make so you're doing almost like this this public good and as I recall in the early days Prismatic was very much Grant funded and I don't know if if that was difficult at times I can imagine it was like like knowing what the funding source was can you walk us through those early days and some of the uh you know maybe the struggles that that you saw with the the existing model for prismatic yeah so we we were one of the first teams to start working on eth2 as it was previously called we wanted to help bring sharding to the go ethereum client that was really the initial Vision uh

with Prismatic labs and this started at the beginning of 2018 around January and it was right around the time that the ethereum foundation announced that they had a grants program we applied for the grants program we we made it into the first round uh to to our surprise um you know Raul and I kind of uh just had met on the internet and said you know here's an opportunity where where two new people to to the community we haven't really contributed in any meaningful way so what's the I don't know the biggest highest impact thing we could do and that was to to work on charting and help scale ethereum uh proof of stake was already in a test net at the time with uh Casper

um the designs of that had really changed since then but throughout 2018 we were really just sort of working as a Moonlight project and and there was a bit of funding and that was exciting but it wasn't ever at least in 2018 it wasn't enough for us to to quit our jobs and to to dive head first and into crypto we were all kind of new you know to crypto so we didn't have a whole lot of finances in the in the same way that people who found Bitcoin in the beginning did uh so we were really just doing it for fun we didn't think we'd make any money out of this um which became a struggle when when the need for scaling the need for working on this became higher in demand and and we

really wanted to do it throughout that whole year we did you know had a really awesome Journey where the community came out and said we're going to support public goods and and this talk about you know how do we support public goods and and and and and finance these things that we all need to to uh to scale ethereum right the the prison project is an open source free software anyone can use it it's fully transparent it's always out there it will never cost you money it will never be something you have to pay for it's free to use uh which is really hard uh model to sell right like you just talk about having Venture Capital you know they say when

when prism token and that was never an interest of ours um and then the there were distractions like okay well we you know grants may not be forever especially towards the end of Indie of 2018 when ethereum went from like fourteen hundred dollars to to under a hundred dollars so it's a really hard time but um and we had distractions like oh should we do like you know where a block could should we expand to be a blockchain shop and and really work on other l2s or other l1s and and just try to get some Revenue through that uh but we said to ourselves like ethereum is the best positioned and this is amazing technology we really

want to just focus on that and minimize distractions uh thankfully with the grants from the ethereum foundation Community Support uh even the signal from vitalik himself when we complained uh publicly that that we had funding but it wasn't enough to to go full time he sent us a thousand ether from his own personal wallet and this is called the the YOLO Grant um at the time that was a hundred thousand dollars so it it was not uh a whole lot in the big picture but it was a a huge confidence boost we said that okay if we do this the community and and notable figures in it are not going to let us fail for something as as trivial

as uh uh funding reasons like we'll figure it out so 2019 uh all of us quit our our jobs some of us had pretty nice jobs and took the leap and you got a job at Google Preston right yeah I was working at Google and that's a really comfortable job uh where you can do a lot you can have a lot of impact um but the uh the problems are at ethereum scaling are so attractive they're so hard that that that we couldn't stop thinking about it I I was like waking up hours before work and doing work and then staying up late and working on it um it was our passion so with all these things combined you know we were able to

take that leap but over the years like it still was in the back of our mind like okay well we we're funded by grants which is not sustainable right like they thankfully they kept coming and the people responsible for for grants for managing their money well so that was nice but uh we still had no product to sell we had no Revenue we never really did any like Consulting for for anybody or really took any other outside jobs or anything like that or or consider doing a token but it was a distraction to have to think about and now we don't have this sort of distractions we have uh support from off chain we can really focus on getting back to work and I think this is the big takeaway from the ethereum community because of course the the prism client isn't going away like

and in fact actually there's more labor hours that are able to be poured into the prism client uh and I would imagine like Preston you you are the co-founder of Prismatic Labs you and Raul and so I would imagine you had to like do like normal HR stuff and like pay people salaries and things that you wouldn't really consider a Dev to do uh but Arbitrage I'm sure probably has like an HR person right right Stephen and so like now now like uh we can offload a lot of that same labor onto arbitrum's HR person and we can share that same resource between this layer two team and this layer one client uh and so uh Stephen I want to get into your head but just one last question to uh to round this story out on press inside uh

pressing like what what happens next for the prism team like are you actually gonna are you gonna hire more like can you how has this impacted the trajectory of the prison Sim client what's going on there yeah I mean in the short term it's full steam ahead right we have uh 10 or maybe 11 amazing Engineers so working on the prism client and we have a lot of great work to do um so that all stays the same uh I think that well I know that octane is hiring and that you know prism is down off chain uh projects so um we'll have uh be able to tap into a larger engineering talent pool and and really build

um at the same time there are really exciting problems at off-chain as well so this is a bit across collaboration between the prism team arbitrim team um and and without being that we can all sort of get together faster get there faster and my intuition is that uh probably salaries have gone up right and so motivations to to build on this thing also increase competitive market rates less distractions stuff like that too yeah exactly we're no longer on the core Dev salary yeah we can uh we can enjoy the the benefits that uh option provides it's really nice uh it's really cool to say I guess notoriously I mean you work for a public good and uh ethereum and you know uh government jobs don't pay really well

right so this is um you know it got to be definitely better in The Best of Both Worlds I'm curious Stephen from your perspective maybe speaking for off-chain labs and for arbitrum so so how do you see this is this kind of like arbitrim's contribution to public goods is it arbitrim's contribution to ethereum obviously the success of um of arbitrum is very much dependent on uh the success of ethereum and and kind of the layer one itself so is this just kind of a way to to pay it forward uh or and maybe it's not an or maybe it's an end question um what's in it for arbitrum what's in it for off-chain labs to do this is this completely altruistic or is there uh an

incentive at play here great question it's definitely um a bit of both right so absolutely um we think that it's critical to continue funding the development of prism and you know we're committed prism um you know we'll continue to be developed exactly as it was fully open source and um with as much or more resources as well as before you know as many resources it says as prism needs you know developers and needs we will make sure that that need is filled um so in our end so absolutely you know there's not like it's not like we're you know we're joking about a prism token it's not like we're taking prison and looking to monetize and attaching a token to or anything like that prison will remain exactly as it was and I'll be an open source project to the benefit

of the community and and one of many of course there are there was a client diversity is important and that will be um you know one you know definitely our contribution where we can participate in the community but more broadly um it's also a starting point for our contribution to the community and you know we mentioned for example eip4844 and that is something which um obviously some of the prison prison team you know tenants in particular and others are very very involved involved with and you know we have been involved in some of those conversations um you know even before the um the acquisition and now we'll be not only continuing to contribute the Prismatic resources that were uh that were there

and those we will of course continue to support prismatic's work on on these important eips and Beyond we'll also be saying you know I'm already having these internal working groups where there's knowledge sharing and saying hey how can how can other off-chain Engineers contribute to contribute to this as well so there's I think you'll see more contributions over time for us to not only continuing prison's work but also um continuing to support that and adding uh engineering capacity to that as well but to the second part of your question um I think they're absolutely absolutely are synergies and things that we can do together better than you know the the sum is better than uh or the whole is better than the sum of Parts probably just mess that up but you know in that expression

um and and what I mean by that is you know I focused before on how we have all these similarities and think about things the same way but we also have very very different experiences uh working on a layer one client and working on a layer two um are very different um you know they have great Engineers great we have great Engineers working on both them but very different and just looking over our shoulders and bringing ideas from one domain to the other I think could be incredibly valuable and already beginning to see that hey you know what about this Arboretum guys have you thought of that hey prism why does this work in this way um you know have you thought of this and it's just very technical conversations but often these I know just shining the light from slightly different angles is very valuable and because we're aligned

on the same goals right we all want to you know as president said their goal early on was scaling and um our goal is of course scaling but it's also more broadly building out ethereum's roll-up Centric roadmap and scaling is key to ethereum and key to the ethereum is roadmap is having a strong layer one and strongly and a strong Layer Two I think we're really aligned than that and just the synergies of working together and putting that brain power together is going to be very beneficial even for non even for uh you know for making both of our products better and so this is uh what I'm hearing from you Stephen this is largely an aqua hire where you are putting the prism team like proximate or adjacent to the arbitrum tech stack maybe there's not a

particular problem or like nut to crack that you need the prism team for but overall you kind of think that having the uh the prism team around the arbitrum tech stack might produce some sort of serendipity that might help improve the arbitrum tech uh just by having these guys like just you know in the same like slack Channel or Discord or whatever you guys use it at arbitrum is that kind of a summary yeah so I think you know it's it's you know there's obviously in the early days it's it's very much of the um you know being in their channels together I think over time there will be you know um much more organized cross uh you know um cross-domain um collaborations as we think about these problems and and um while the talent and the amazing team you know Preston Raul and the rest of their amazing team is

obviously a big part of it um it's definitely an acquisition in the sense that we're super excited to take the prism product and and you know and continue to fund that and continue to to make sure that stays well funded and that's our commitment so um yeah I think you know we think of very very much as an acquisition um where uh we're continuing to develop and committed to develop prism as a client and committed to um you know giving it all the resources that it has already continuing to fulfill its resource needs and also obviously the amazing team that Prismatic lives have assembled are super excited to work on them um both to have them continue to develop prism but also to work together with them on this shared roadmap and honestly future you know the future the future to

um to executing this roadmap will include layer one initiatives like data sharding Layer Two initiatives and I think um thinking about those things together will be very valuable not only for us but for the community as a whole yeah what I do what I do think is obviously so the future of ethereum is the you know the execution layers in Layer Two right consensus layer is you know down in the stack the prism Prismatic and and team is one example of a consensus layer client there has been this criticism of core devs and I I don't think it's uh totally warranted but like uh oh core devs are not they're disconnected from the app layer or from kind of the execution layer right and like I think um you know the consensus layer core Dev

folks would argue well like the apps don't understand what we what we deal with and what we go through and what's nice about this is this um brings together a bit of kind of like shared shared learnings from kind of the consensus layer in an execution layer like like there too and see that Advantage I also see the advantage of being able for I guess you know for the sake of ethereum shipping uh EIP is like 4844 that much faster and of course uh eip4844 is proto-dink sharding it's going to make uh layer twos much cheaper it's a it's a boom to the layer 2 ecosystem for sure and this is um in the the best advantage of like the this is um I think a shared goal of

everyone in ethereum everyone who builds apps everyone is doing layer twos like just everyone in ethereum has the shared goal I guess part of my question though Stephen comes with like um so we have shared goals like getting eip4844 done clearly that's good for the theory in the community it's also good for layer twos and that's great win-win-win we all win what happens if in the future there's some EIP or there's some uh feature or there's something that starts to conflict with something that maybe off-chain Labs wants or arbitrim wants and like the consensus the social consensus layer the good of The Wider ethereum Community there has been some uh concern or question with this for all of the benefits a concern about maybe a

loss of credible neutrality of the Prismatic team and I want to hear Stephen on this uh respond to maybe some of these questions and then also also Preston but what do you think about this uh Stephen is this is this a realistic is this a valid concern um and um you know to any extent that it is um what are some ways to to sort of mitigate this great question so I think uh in the abstract is a very very fair question to ask absolutely like it's a very fair question to say you know what if hypothetically there is um some point where um arbitrim's goals are different than uh maybe a standalone client client standalones clock Standalone clients

goals would be extremely fear requestment to ask and and my answer to that would be um you know we are committed to um continuing to develop prison prism um as a neutral client my neutral we mean where um we have people of Integrity on both sides of this deal and this was literally part of the of the of these drugs you know we thought about these questions and we said you know prism will remain neutral it will not push uh off-chain Labs uh interest in any way that's uh sort of um detrimental to the community if those things uh would arise so we're fully committed to that and you might say hell hey how do you how do you you know obviously you have to trust the Integrity of the people but of course you know these are are the same people

that we're building prism beforehand you know you heard Preston's story and in our story end as well um you know we are absolutely committed committed to that goal and we'll be operating prism prism as such the second thing I'll say is though despite all that being true um you know that I say if it arises I I actually can't think today you know we are very very much aligned on the goal of making ethereum the best player one right um which it is but continuing to develop ethereum and continuing to um develop develop ethereum layer one layer two and execute the role of centric road map so if I actually you know when I've had this conversation with people and I say what are those things that that like you know off chain arbitrary might push um we're hard-pressed to find examples of those

today to be honest I think we really are aligned and that is is a is a big focus and Alignment is there and I actually can't think of things today that um you know would really advantages there are things that would Advantage Layer Two generally like eip4844 which we're all we're all working on and you know when we're already reaching over the aisle you know both ways and working with our competitors on I think that's great for the ethereum community um so I'm not sure what those things are but I'm also not not saying that those scenes can't arise today I don't know what those things are but absolutely if those things do rise we are fully fully committed to operating prism neutral you know and and the community will hold us in check and make sure that we do that but we're pretty confident that we will

um Stephen on the community holding in Tech I want to get pressed and weigh in on this but like first of all um is prism always going to remain open source because like one of the the constant checks that of course the open source Community has and the crypto Community has is we have the right to fork and so let's say bad scenario happens and somehow like you guys turn evil or something like this and this is what crypto teaches us uh you know verify don't don't trust well couldn't we just as long as it's open source uh Fork prism code have a new set of of developers continue it on in a different direction uh and um like you know pick pick up the project uh where it left off um can you talk a little bit about

commitment to you to open source ethos and kind of the the right to Fork uh being ever present with uh with prism um yes absolutely so prism will remain fully open source under the same under the same license and uh the right to Fork is is absolutely will be maintained and that was um you know you know not to go too into the details of how this emerged but the first the very first time there was a document produced um initially produced by the prison team uh that principle was was in there and that was literally never something that was ever discussed past that it was both sides said yes of course that is something that we're committed to and and that won't change so yeah so there are signatures on paper that say prism

will always remain open source so that yes that that that that was yeah that that is the foundation of the entire um deal documents I'm not going to pretend that I that I read the entirety of it this turned into but but back in the in the in the uh the documents that were uh digestible to uh you know unfold to someone like me yes absolutely um that was you know one of the core principles that we that we built this deal deal on that prism has to remain neutral the prism Discord will also continue to remain separate by the way from the off-chain labs Discord to make sure that that Community has a voice that's separate Mars as well because when you say how do we keep the community in check well making sure there's a forum for that to happen and that form continues

is going and we don't sort of crush that for him but not that we would again you know it's sort of kind of strange to have these conversations because like we're imagining that we're the bad guy but it's it's a very good conversation to have but but I do also just want to put that disclaimer in like we are very much ethereum aligned like um you know arbitrim had its legitimacy by itself on its own by building a layer two um in a way that you know um was very much Tech first is Tech first and we delivered on that and we continue to deliver on that and this is taking two high integrity teams that are very much aligned and there is no bad guy here that being said it's a fair question so someone from the outside saying but what if you become bad what

if you are acquired or this you know are there Protections in place and the answer is um absolutely there are those uh there are those protections Protections in place and and we will continue to make sure that those and these are you know not not different from the principles and values that we're committed to in in general and nothing changed and like I said that point was in our initial document and it was literally never like negotiated or debated This was um obvious from from both sides this is what we want and we will and that was some of the initial alignment that we saw that made this um easy to come together Preston could you weigh on this because I know this is very important to you as well yeah you know we we built prism based on transparency and

that's not going to change right the principles that we had that brought made you know the person clients so successful those continue on and we push us forward and and continue to advocate for our transparency open source is free forever uh those kind of key principles the cool part about the way that ethereum is built um you know we do have to think about these questions like what would happen if if prism went away for whatever reason well that's why that we have this insurance policy of multi-client client diversity um last year this may have been a a bit of a bigger issue when prison was uh it's like 75 of the network uh they flew some much smaller amount today it's uh I

don't know 30 35 something like that and what that means is you know prism is not like the the authority on on core development right it's not the only player in the game uh in fact there's only so much that we can influence uh as as a team without the significant buy-in of the rest of the core development Community um so with that it's like you know ethereum is resilient to to like when we think of threat modeling about ethereum it is resilient to these kind of things like what if what if a core development teamlet Rogue or disappeared or just shut it down one day and rugged everybody well you have awesome Alternatives as well we're not going to

do that obviously we love working on this stuff it is is an immense privilege to to be building four ethereum and to be building on such high impact software but we do think about that we question ourselves we make sure that we're doing the right thing always and sticking to the the values virtues and and mission of ethereum and and what the ethereum community wants and deserves and so this conversation thus far has brought up uh some memories I I I have triggered some memories of my conversation with vitalik uh and so I want to bring up some of the the angles that I discussed with him here at Devcon about this particular acquisition and his thoughts on that but I'll share those for after we get back from talking to some of these fantastic sponsors that make the show possible sequence is the

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interviews at Devcon and one of them was with vitalik and I asked him about a whole range of subjects one of them was this announcement and this announcement being one of the bigger announcements perhaps the biggest announcement that happened at Defcon uh and I asked I have to tell his thoughts about the uh the uh acquisition of Prismatic Labs by arbitrum and Stephen you were talking about how like there's no bad guy here and I really just think this that angle is really emblematic by like it's there's a commercial entity acquiring like an open source entity that's really like the angle that we're taking here uh and vitalik's response was that um there's there's many many nuances right like on the optimism side of things um uh it was Proto Lambda that I think went from the EF to optimism uh and so

that's while that's not the same thing as an actual like straight up acquisition there has always been some sort of dynamic between layer two teams and layer ones uh and so that was his thought about that is like this is actually not completely unprecedented although it is different with an acquisition uh but then also I asked him the question of okay imagine that every single client team got acquired by a layer two or some sort of commercial entity and actually we had no clients left that were actually completely independent like what what would that make him feel he's like yes but this is also a question of decentralization right like it's okay that some commercial entities acquire some clients as long as it doesn't you know think of it like a client diversity right and so

now we have like commercial diversity and so we have I think what actually might be the version of a commercial entity that actually is the closest thing to the ethereum layer one possible which is a layer two team uh acquiring a layer one is actually the best version of a commercial entity to do that and now we do have this like corner of ethereum that is perpetually funded uh by this closest thing possible that is a commercial entity to be aligned with the ethereum layer one and so as so I think his overall General take is that like it's not so crazy uh and and also we can't have too much of it but also we should be grateful that we have this Perpetual funding in the space uh so Stephen no question but those are the thoughts that I can remember from my

interview with uh vitalik what do you think about this first I'm looking forward to uh to uh seeing the interview that's first but um yeah I I I totally you know I agree with just about all that which is um like you said this is not actually not unprecedented at all um I don't know if actually I think the thing that might have been unprecedented is that you had a team like Prismatic that wasn't really doing any sort of um external development work or be or or other other funding sources because a lot of the other layer you know the client teams they they do they do you know sometimes do security auditing where they work for other layer twos already or they have developers that are so I think this is actually actually you know almost

like you said there obviously are nuances with an acquisition but it's it's it's definitely um not unprecedented in principle of having these alignments um and and definitely um you know one learning that I had actually was you know to me you know while we discussed all these things it was clear that we were obviously you know the good guys and very much value aligned and I realized you know with all this thing that maybe we need to talk more about our values and and make sure that people know how ethereum aligned we are and and those values um exist not that there are people that are doubting those just to make sure that people you know proactively know those values and that we have you know full ethereum alignment um I do agree with uh you know vitalik that having a diversity is is very very

important um you know having arbitrim's view but also our competitors View and also um independent teams and also teams that come from just completely different angles the ecosystem that's that's what where the important is you know in general diversity uh of opinions and diversity of views is going to bring forward the best product and so yeah it's a fair question to ask when two teams come together you have a little less diversity because you know previously you had arbitrim's voice and remember we already had a voice about how prismatic's voice is separate out it is another one definitely but you also solve another problem in which um Prismatic is now how well funded and those voices are still remaining independent um because of our of our commitment of course but now have actually more time to dedicate uh to

that development um and I think one other one other one other point and this is more of a meta Point um which the community has to think about is um what is public good funding what goods funding look like where does it come from and you know I think this is actually a big success for that in US funding funding you know it's funding a development team but those who may say you know we want these independent teams as well I agree with them those are important but I think it's important to think about how are those funded and if that funding by the way comes you know if you if it comes from a particular source is that Independence really exist anyway right so you can have you know those same questions even short of an acquisition if there's you know uh one team that's funding a client team

exclusively and they're sort of the lifeline you have some of these same questions so um I think there are really important questions here to be asked in general about Public Funding in a way that allows Independence um but what I can say is about this particular deal is this is um of us obviously acquiring the product and the team but also us committed to um giving them and maintaining their own voice in their own Discord um their own developers and the one thing I'll say about um you know Preston's here but we're all on the whole team this very much was in an acquisition of a team that's like oh no we need to be acquired right this was like a team that like literally like weeks earlier did you know the biggest event you know accomplished accomplish their goal they're they're one of their

first goals of the merge and really was one of the the most successful teams you know uh in play and these are people of extremely high integrity and it's not like you know this wasn't a fire sale this was two teams that wanted to work together and thought through a lot of these very hard issues and really believe that this was best for the ecosystem and and continue to believe that do you know okay so one one thing I was just thinking of on the backdrop of this of course like we've got two very values aligned very ethereum aligned organizations and kind of like them merging okay cool get it like we've made the case for this but what happens if like um Justin's son goes and tries to acquire Geth okay uh dokwan you know comes back and he raises a whole bunch

of VC money and he goes and inquires I don't know the lighthouse team or something like this um has arbitrary just opened up the floodgates for like client team Acquisitions and I'm wondering Preston if if like you think we have a defense here and like my inkling is the defense always goes back to layer zero like the people it goes back to like are the core devs for any amount of money or for any offer going to actually work on something they don't believe on in and the evidence for that is probably no because they're already doing what they do and they could go work in

Silicon Valley make higher salaries they could go like launch eth competitor number five and get VC funded and like you know Bank out that way so my inclination is we're still ultimately protected by layer zero which is like people who actually believe in the thing that we're building and the kind of the right to fork and the right to continue on that belief system but is this is this Instinct correct I mean put us in the mind of a a core Dev is that our protection here what's to prevent uh Geth from being acquired by someone who would mean harm to the ethereum ecosystem

I definitely agree with that right like we had you know in prismatic's Journey we had entertained the idea and sort of considered you know what are alternative sources of funding but when it wasn't ethereum it just wasn't something we were interested in and I think what's cool about uh our team and and people like Prismatic is that we didn't we didn't come here to make money we just came here to solve hard problems problems that you you can't Google the answer you can't just look it up problems that have extremely high impact ethereum aims to be the biggest um technology you know ever maybe

perhaps it wants to be a global settlement layer and to be able to work on that is extremely attractive to a lot of Engineers I I would even go as far to say is there there there wasn't a a dollar amount that you could have said to to pull us away from ethereum that's something we always wanted to work on and I feel like with other core developers they must share the same mindset because a lot of times this is really hard work sometimes it is a thankless job sometimes it is difficult to do especially to be so just centralized that it's very difficult work um but it is also extremely rewarding and and and very fun so uh you know that

layer zero what you're talking about it's like we believe in ethereum and and that's why we're here um and I know that every quarterback person aligned in that and so I just want to ask some some direct questions that just make this conversation really really explicit like Stephen do you think this acquisition of of um of Prismatic labs this makes Arbitron like a a maintainer of like core critical ethereum infrastructure and then does it does it also would you say like give arbitrum more direct representation in like ethereum soft governance it's a little bit like if you think like the core devs of ethereum and like the the the bi-weekly Dev calls as like kind of like the Congress of

ethereum where like they like decide on things and hopefully the community accepts them uh do you think like now Arboretum has like a more direct access to what's going on in these conversations um arbitrum has obviously is fun as teammates um that we are you know committed to uh funding their work that are obviously part of those conversations yes so definitely um we do have um more representation there but I think um the teammates have um agreed to represent their values which which are the values that we the reasons why we chose to join forces with them because we believed in those and and again right now I think those values are fully aligned but but but you know as Preston just said there was no there

was no dollar amount that could that could make those values change and you know you know as he's heard press the story earlier when he had a job somewhere else he was working out you know getting up early working late that wasn't where you know that wasn't where where their their hearts were and there were lots of there were no shortage of shortage of other things they could do if they you know if their goal was taking home a large paycheck at the end of the day so yes of course we're represented um at this point I think you know I don't see a difference in in our in our values that that idea hasn't hasn't emerged that sort of point where we'd want a and a1b but um I'm confident that Preston would follow um you know his belief you know his his life's working I might say Preston it's

Preston Raul Terence Nishant the whole team you know I would want them to to operate as such and by the way that's how I would want all our developers uh you know all of chains earlier developers as well like if if our best check to make sure that we remain non-evil as an organization which I strongly believe we are is the people internally the people that care and that includes the both prismatics developers but also all of chain off chains developers and I think that we all um very much try to participate and listen to the community and I don't think that will change at all yeah and I do to definitely take the point that having the prism team is an even more powerful check uh on on Arbitron like internally because uh these like we said like these

core devs uh won't do anything else other than work on ethereum uh and so the fact that that this deal was Inked and the handshake was made I think is indicative of of the alignment here uh and so I want to ask that question uh what was Prismatic Labs worth well what was the size of that deal uh how much was actually handed over how much was actually paid for it's even though that was that one's for you yeah so I'm not going to say the exact financial terms but I think the principle is is what we are is what we're going getting at here it wasn't what was prismatic's Labs was worth it was also who Prismatic Labs would take an offer from right I'm sure that they were you know to your point before there were people in other

ecosystems that um you know that that were wanting to build some alignment and these might have been different um for us it was very much um the alignment first and the alignment that drove this and you know not to repeat myself but I'm going to remind me myself uh you know these were wasn't a team that was looking for for an exit or needed an exit in any way this is a team that was looking for the best way to continue to do the work that they love in the most you know pure way in a way that they didn't have to deal with certain overheads that that are cumbersome and and trust me I as as a former developer in my day I know a lot about about this overhead um and I I no longer um do as much technical work as I once

did um so I can very very much relate but that's what sort of led the deal so it's a long way of declining to answer but I hope that you provided some useful context sure of course and one of the thing things that got me into ethereum in this first place in the first place was this whole kind of like theoretical Vibe of a regenerative Financial system where we could fund things that are harder to fund and so when I see good guys like Preston and everyone at the as the Prismatic team getting a Payday for their their uh like their sweat and toil and Blood Sweat and Tears into building ethereum uh that makes me happy and is definitely illustrative of why we're here in the first place so Preston and all of the prismac team congrats congrats guys yeah thank you

so I think uh my last question will fulfill my commitment to the YouTube chat here uh Stephen uh win ARB token stay tuned but no comment today there you go chat that's all we got I do appreciate the energy of the chat and uh I'm glad that um yeah that you are staying uh you know keep keeping us uh keeping us in check and asking the important questions when you uh when when you do decide to release any information about that just uh make sure make sure you look us up there Stephen because I think you got a chat room that'd be really excited um Stephen Preston congrats on the acquisition it's been great to have you thank you for explaining this next exciting chapter of uh prism development

and ethereum core development we appreciate you guys coming on thanks for having us yeah thanks so much guys of course gotta end with our usual disclaimer none of this has been Financial advice eth is risky so is crypto the entire ecosystem is risky so with D5 you could definitely lose what you put in but we are headed west this is the frontier it's not for everyone but we're glad you're with us on the bank list Journey thanks a lot