Navigating the Expanding Rollup Landscape | Roundup

Transcript

I think we can say like pretty definitively now that you know among those two like arbitrum and optimism have have definitely like kind of won out right like not won necessarily for the long term but they've won at least this first stage and I think you know big part of the reason they won is because they you know like basically eliminated eliminated like all discontinuities between building on ethereum L1 and building on their l2s right hey everyone this episode has brought you by namada the shielded asset Hub rewarding you to protect the multi chain so not only can you protect your own data across any asset in any chain but you also get shielding rewards for strengthening data privacy protections

for everyone so you can check them out at n.net and follow the domain net launch stick around you're going to be hearing all about them later in the program all right everyone welcome back to another episode of bell curve before we jump in quick disclaimer the views expressed by my co-host today are their personal views and they do not represent the views of any organization with which the co-hosts are associated with nothing in the episode is construed or relied upon as Financial technical tax legal or other advice you know the deal now let's jump into the episode all right everyone welcome back to another Roundup edition of bell curve today you got me and Miles uh framework guys are over in Singapore um so shout out Michael and Vance I'm sure tearing

it up and uh miles you and I are holding down the fort here uh once again once again it's great I kind of love kind of love conference weeks um when you're not at the conference and he just gets quieter and you can do some real work so uh but it's been yeah fun to you know watch from a distance um saw some pretty crazy marketing stunts going on as as one would expect you know the 20,000 condoms getting arrested going to Singapore is that what you that one um I think I saw drift with some like you know exotic like Ferraris and stuff like

that that you could rent or something like that um yeah drift type thing yeah I guess I guess so I don't know I don't know going fast all these different things um yeah but good stuff yeah it seems like uh you know I I've heard I've heard that token actually just smashed there's a ton of people there very different very different crowd than you see actually at us conferences which is interesting because for a long time I've been a little bit hesitant about just moving into that part of the world because if you look at even speaking lineups it's very similar to us conferences and it does sort of feel like the crypto industry is a bunch of just young people who kind of hop from their European circuit to the Asia

circuit to the US circuit and round and round we go and how much value is there really but I think it's a pretty different crowd and the thing that I have a little bit of FO up for at the current moment is just breakpoint uh I saw the manlets the manlets sold out they got 5,000 people there uh there's a great defi day organized ahead of time by Ellipsis and jeto and shoot there's another there's one more that I'm missing there I'll look it up in the show notes and give you credit but yeah I I I would be interested to see what the folks at salana are talking about at the current moment because yeah it's kind of been good year for that whole protocol yeah totally I feel like um you know it's just salana like circles or just you know either like super deep in

the engineering side um or you know super interested in the basically consumer application side um less of like the you know infra semantics debates um more just about how do we make this thing work how do we make it go as fast as possible and how do we like you know which what apps should we build that you know are going to be great the users want to use um so I've always respected that Spirit about them it's not going to be not going to have issuance curved debates and things like that um I I do think in general like uh the ecosystem is focused on the right things um especially at their stage so the the the one big question

mark that I have that I'm just very curious because it seems like they're doubling down on this is their phone so it's now there's a successor to salana Saga which is Seeker they exceeded 140,000 pre-sales which is pretty pretty impressive now if you remember back the meta around Saga was people were buying these because the Bonk airdrop you know more than paid for itself so they're literally airdrop farming the phone which is kind of funny but I mean still 140,000 pre-sales 140,000 pre-sales and it is you know it's for a very long time the design philosophy in crypto has been vertical integration is almost a bad word right this more traditional lens of you know creating an ecosystem which

again the negative way of framing that would be a Walt with vertically integrated it's kind of like the Apple Playbook is very the antithesis of crypto but I'd like to see people experimenting on the hardware side and yeah I mean why not I'm I'm rooting for them I hope it works uh I think me too um I guess two things two reactions I guess first is like this is the one of the best examples and maybe like maybe overly ambitious but a great example of basically what like a Labs development company could do right for both like sure monetization purposes but also as a way to like um facilitate greater usage of the apps in their ecosystem right yeah

um it's saying like we think crypto apps are going to be mobile first we know that there's you know a lot of friction right now because Hardware developers are not like mobile Hardware developers have no awareness of crypto it's like not on their radar right um let's put this out and let's get people having like seeing what like First Class right like mobile crypto experiences look like um then the second reaction is I do wonder what the end goal is here like I could see a world where the end goal is not for the salop phone to be one of the you know most like widely held like devices in the world it may be

like success for this might just be getting enough traction uh to get the attention of the apples and the you know like other Hardware developers of the world to say like hey what are they doing on this phone that's making these you know crypto applications really um you know much better right and if they are able to basically like get enough attention to get some of the features that make you know the mobile experience great on the salop phone into the phones that you know we actually use um that would be a huge huge win right

it doesn't and and they they could just like shut down shop of the hardware like you know after that if Apple like brings in a lot of these features right that are also like probably gonna be salana you know Centric just because salana has kind of like led the charge on this that's a huge win um even if the phone ends up being kind of like a relic that we look back on um you know fondly right at some point um so I guess I'm saying it's like there are other Big commercials like big indirect commercial successes that could happen even if the commercial success of the phone is not like you know actually uh pans out longer term here could be a I'm just reacting to what you said because I

agree I think that would be uh that would be like a a win for the industry and likely for Sal I'm I've listened to a couple Mark Zuckerberg podcasts recently where he's talking about their AI strategy and why they open source versus the closed uh you know the closed Source model and you know Facebook is big enough that they have this entire ecosystem of vendors that build to their specs and so by open- sourcing you know they actually get a bunch of people within their ecosystem to start building to the specs that they get to choose and I wonder if there's maybe a lesson that could be gleaned there from the salana side of things where if they launch and they're the first ones that get you know the broader array of um you know cell phone manufacturers to start looking at

crypto it kind of makes sense to start looking at salana as a spec as opposed to other chains and maybe that's a little bit of a trojan horse in um so kind of rhymes with the business strategy that you see for open source software even this playing out with AI at the current moment which would be right and like to my the the first point like I wouldn't you know if I'm Salon Labs like I wouldn't want I guess the secret sauce like that makes you know the uh mobile experience great on salop phone to like be a secret right like I'd be like here here's how you you know facilitate this from a hardware standpoint and this works great for the salon spec so maybe if you're just grabbing that off the shelf from like what we did and putting it into your own

devices maybe you also end up you know kind of catering better to salana apps in the first place um or at least as a start so yeah it's just super interesting I think there's you know like a lot of good that can come out of it um also just a lot of learnings like I think we'll I think we'll learn a lot um about you know how to um basically build these you know best-in-class like mobile crypto uh app experiences I'm also just in favor of a from a purely philosophical standpoint I love seeing people take big swings so power I will never poo poo with someone taking a big swing like this the other thing though that I think will be

interesting I agree with you that there are going to be a lot of learnings and you know this kind of recurring theme um I actually I was reading something the other day which referenced was kind of the birth of the cloud industry actually and you know there were all these big generalized Computing companies that were you know vying for they kind of had their their arms around something that was going to be Cloud I know Mark benof gets credited with this but Sun Microsystems was actually kind of playing around with this but you know who ended up winning right ended up being like Amazon ended up being a huge player and who would have thought that this like retail book seller right this like weird Niche app ended up winning but the reason is is because they started from the app designer perspective and then they built the

infrastructure around it and you know maybe there'll be some really valuable lessons from the consumer side for salana here um totally totally the whole industry hey everyone this episode is brought to you by namada the shielded asset Hub protecting the future of the multichain the ma is a chain that's near and dear to my heart because in previous seasons of B curve we've talked about how the Cardinal original sin of most blockchains is not thinking about privacy from the beginning but also because if we want to onboard a whole bunch of applications it doesn't work in a default transparency setting so NADA not only brings about a better future that we all want but it's going to help on board a ton of new applications so Nana introduces a novel shielding reward system the way that it works is if you

hold your assets in the shielded set you help strengthen nada's data protection guarantees and collect n Rewards in return the model will initially support IBC and ethereum based assets but eventually the idea is for this to expand into a comprehensive hub for all assets really really excited about what the folks over at NADA are doing I highly recommend that you go and check them out at n.net you can follow their mainnet launch which is soonm very exciting tell them that I sent you click the link bottom of the show notes all right so M maybe with that as a jumping off point we what what we wanted to talk today is about uh l2s actually so it's come up in a bunch of conversations usually around the L1 value acrel and L2 being parasite you know is it parasitic or whatever and you know we've talked

about that enough I think and actually just wanted to zero in on the L2 landscape today because I think it's more interesting than it's been in some time and you know you've kind of got these different buckets of l2s so you have the incumbents which is you know the optimism and the arbitrum of the world and they're starting to look pretty different today than some some NextGen or new l2s right so you've got Mega eth where there's a lot of hype around uh you know we had Eugene on this podcast um a couple weeks ago talking about Atlas which is a very unique design and then you've got some some other winners like the black the uh bases of the world right so wanted to try to get a sense of um maybe just have a fun conversation about some of the different business models that are

getting tried in this space um and how you think ultimately these different buckets of l2s are going to compete against one another so I mean maybe it just start off from like a high level there like how are you kind of just looking at this space and maybe what was some of the original wins that allowed arbitrum and optimism to be super successful and then we can talk about some of the different axes that this next gen is um focused in competing on yep I think that makes sense so like maybe going back in time um a little bit to when we had it was like kind of the big four right it was like arbitrum optimism Stark net ZK sync um and they were all launching around the same time I think obviously it took a lot longer

for and ended up taking a lot longer for the ZK rollups to launch um but I think we can say like pretty definitively now that you know among those two like arbitr and optimism have have definitely like kind of won out right like not one necessarily for the long term but they won at least this first stage um and I think you know a big part of the reason they won is because they you know like basically eliminated eliminated like all discontinuities between building on ethereum L1 and building on their l2s right they they had like evm equivalents which meant that you could copy and paste existing apps move them

up right to L2 with e you could if you were solidity developer um and you wanted to build a new app on you know one of these l2s there was nothing else you had to learn right there are no like sort of real pain points and friction about it um all the infra you know critical infra providers um whether it's data providers rpcs you know uh indexers right again they can just kind of copy and paste all their existing um setups and all of a sudden you know they're on L2 right and so I think that is what that was kind of like the the competitive differentiator that that won out um in this you know first stage of of rollups um but I think you know we're

starting to see like the trade-off that that comes with and I would say the trade-off is really around you the single-threaded evm is you know leaves a lot to be desired in terms of scalability performance um and then you know customization right which which some apps might want or um want higher levels of control right you're kind of like just building within the constraints of the evm um and and so I think you know now we have competitors that um like Mega eth that have you know kind of done a lot of work to the evm um you have

while like so basically making it Ultra performant but still allowing all of those info providers and existing apps basically just copy and paste their existing evm apps it's just going to work a lot better right um over the same period like I guess the ecosystem of Builders and infer providers around the svm has has increased a lot right so the svm is now somewhat com like like Inc getting I guess closing the Gap to the evm um in terms of like the developer base that that can touch it and so and the spvm obviously has a ton of advantages like we've seen around parallelization um even maybe like local fee markets right and so

uh I think the first generation of like evm equivalent rollups kind of vanilla evm rollups um you know are now thinking about okay how do we um reach sort of like how do we improve like the performance of the stack right like we have the distribution but we know these guys are coming and how do we reach parody you know on a feature level before these guys can reach us in terms of like distribution reach um I completely agree with that um I think it's I mean even rewinding back in time to the choice that arbitra made there I think it was absolutely the right one um the challenge is that you know when you zoom out it's the the whole point of

rollups actually and I really do agree with this part of Mega eth's philosophy is that you know ethereum has optimized for this very specific set of properties censorship resistance decentralization Etc and so the roll the whole point of the rollup is that you know you you don't have to you're willing to make the rollups willing to make tradeoffs that ethereum is not otherwise able to make or willing to compromise on and so now that's the sort of position that like the mega eths and atlases Etc of the world are in so here are the different here are the different ways that I see these different rollups trying to compete one is on performance right and that could be there's kind of like the svm flavor of rollup so that's Atlas and Eclipse um or it could be Mega eth which is you know technical term just cranking

that [ __ ] up to 11 and putting everything in Ram and letting it it's been and then there's um and then there's also a distribution um as a differentiator so that's the base sort of model here and then I know you you rejected this one but uh maybe it's a lesser one but ux in general and I think that there are some rollups out there that like blast is kind of trying to do this they're trying to just do you know they're calling themselves like the full stack rollup or Zora is another good um example of this where they just have a really nice easy user on boarding flow wallet you know application it's all it's all very easy and feels like web to um yeah and I guess obviously performance is one of the one of the axes so I guess and then yeah I agree

with the way that you frame that they're competing against the incumbents basically you know liquidity Network effects Lindy you know whatever they have in terms of um you know uh first mover Advantage so and I would also I would add two other differentiators that we haven't really seen yet but I think are coming um one is privacy right so we have like you know eventually we're going to get these privacy Centric rollups um it will be very interesting to see like just you know how many developers like actually care about privacy and and how it can be used really to create like really differentiated apps that can only happen on on privacy Centric chains so you know aste kind of leading the charge there

then the other one which is a bit wishy-washy but I would say like security is and and and trustless right is another axis of competition um we saw like vitalic talk about you know he's not going to mention any rollups that aren't whatever it is like stage one or stage stage maybe yeah stage one or stage two right right so there's just kind of like um you know New Way new value prop right that you can compete on um which is to say hey we're like you know the right the way that rollups were like meant to be right as a like in in accordance to the road map and you know we are inher like you're inheriting even more of like the security of ethereum

etc etc with with our model of let's say like combination of working Pro like proof system with decentralized like sequencers um and I think you know just quickly on that piece like I think it's good that there's a spectrum of like Trust basically that that rollups kind of like enable right um and you should compete on on that like spectrum of trust um you'll probably have to pay more right to use a rollup that has like a large decentralized sequencer set um and other sort of like higher security prop or even like a based rollup right um and that

maybe customers are willing to do that right um especially like when we get into more high stakes high value sort of like uh activity happening on l2s um or maybe customers are you know the market will say like hey most of us are totally fine uh we with a centralized sequencer that we know like there's upgrade Keys etc etc right um so I just wanted to point that out as like something that you know as these rollups are like evolving past you know the the getting the training wheels off like maybe some of them keep them on maybe some of them take them off it will be it will be interesting and I think that you know we shouldn't be like too prescriptive about what's right right this is like super

subjective um right the I will say though on the sequencer Point stage one stage two is non-prescriptive about how many sequencers there there are it's it's purely to do with the fraud proof system or validity proofs and uh and with who can update the um you know the uh the bridge contract right like sure so so so maybe that doesn't apply like the phase one phase two but it does apply to things like liveness that like people do care about right um and you know have like some projects out there calling themselves a rollup and other people are like are you guys a rollup though like it doesn't seem like you are um so uh that's one I totally agree with uh

verticalization um and I think verticalization and uxdx like play hand inand right because you can if you're like outlas and you want to be opinionated you know about uh enshrining certain things in the protocol that are you know specifically helpful to like a defi sector like yeah that is go it's like amazing for developers that they don't have to worry about you know oracle updates or like um you know stale Oracle updates and it's great for developers that they can just plug into to let's say like an you know an order book that kind of like lives underneath all the the the rest of this composable ecosystem um that's going to matter more and more because I do think that you

know we're kind of at a stage where the come one come all build anything on top of this we're trying to you know you as general purpose as possible is you know it's a challenging Playbook like there's just so many so many of those options that are more battle tested and have more existing users and liquidity than you do so if you're coming to Market with that sort of like really unopinionated approach um you know it it it is I see it as a risk these days um you want to be able to say like we're the best place for this right because of XYZ um unless you're base and then you can be like well we we have millions of

users on our like centralized exchange and by the way we're letting them like perform actions like with their balances on coinbase right like that's a form of verticalization as well that I think is you know not specific to any like sector necessar neily but um you know just a huge draw for like a developer yeah of of all of the I mean this is like the least hot take ever but Bas has got to be kind of the big winner right over the last 12 months if you look at what they've been able to do just in terms of flows I I think a a really useful metric to look at in terms of because I think that the moat for these incumbents uh like the optimism optimism and arbitrum of the world is going to be the amount

of eth basically that they have liquidity I think um is going to be a massive moat for these um these kind of first movers because that's it takes a long it takes a long time to bootstrap that even if you do have you know Wicked performance and you know you said this is the home of defi like you know you still got there's that cold start problem that I think these l2s are going to have in the beginning and some of it you can solve with a token and incentive programs and whatever but it's it's going to be challenging right but uh but base has been extremely successful in attracting a whole bunch of capital to their platform in a relatively short period of time the other thing that they can do and this isn't as sexy but they've got this really neat onboarding funnel uh you know with their smart

wallet as well yeah and the ux is actually a huge differentiator for them as well so I mean Bas is definitely a super interesting rollup to look at here I've got a question for you you know because there there are now lots of very fast very cheap rollups or you know there there will be very soon how much of a differentiator do you get the sense of like 0.01 Cent per transaction versus 1 cent per transaction you know we a couple of years ago it was really easy to look at ethereum which was the smart contract platform where you wanted to launch and say hey there are a bunch of apps which don't make sense today right you can't even do a central limit order book because market makers need to be able to place bids and cancel them very quickly and that doesn't make sense if

each bid is like 30 bucks or whatever gas was but now you know we've drastically drastically drastically lowered that and it's a little unclear to me even if have we are we already below the threshold um you know where apps a lot bunch of apps make sense or if we were to go from a penny to a fraction of a penny suddenly there's way more opportunity there you know I don't really have a good sense of that I think the reality is it's um or at least my my take is that uh the it matters only in specific context for specific actors um you and me like buying you know an nft or doing something on like Blackbird

like we we don't give a [ __ ] if it's a a cent maybe like two cents or like a fraction of a penny right right um but I think Eugene mentioned this in in that podcast that you guys did but you know they're in a perfect world you could say Okay normal user normal trade action on Atlas gets normal pricing right right uh market makers doing tons of volume and placing thousands and thousands of orders right should have a different sort of fee structure um both at like the The Exchange level but also like the chain level right um than normal users

because they actually are more sensitive because they are you know generating like you orders and Orders of magnitude more transactions than normal user um and they're critical for like supporting the you know keeping the entire like liquidity ecosystem you know healthy right um and so it will be interesting like this is another form of like verticalization where you could you know basically um Grant sort of different pricing structures to different actors ba you know based off of like specific actions right um so that would be like some way where in the same way that you like you have let's say like the

enshrined Oracle right those are like prioritized and free transactions um regardless of like the priority you know um fees on the Chain you know I saw I saw Henry devent penumbra tweet this out um this week uh protocol designers should figure out ways to enable gasless transactions note a gasless transaction is crucially distinct from a transaction for which someone else pays gas on its behalf so that would be like the account abstraction uh you know allows apps to pay gas on behalf of your users whereas this would actually be making like a kind of a tiered list of accounts and you know a certain type of actor doesn't need to pay gas you know who actually put to and I think this ended up getting

surfaced in the thread underneath his uh underneath his post but Dave OHA of um osmosis and shoot I'm going to blank on the other guy's name I will link this to the show notes sorry I'm not giving anyone the proper credit today but they came out with a really in um paper about a year ago on gasless transactions and you know they theorized that you could do other actions right which is like staking a certain percent like if you have a certain percentage staked to the network right then in theory you are that's a form of C like gas exists for Cil resistance reasons right so you know you're proving to the ACT to the network that you're a good actor because you have X percentage Stakes so you shouldn't have to pay gas that type of thing I think um will be super

interesting if people you know want to experiment on yeah I think that was Sam Sam Hart Who uh chimed in just to give him it's always Sam every every good idea yeah you can look not too far away and Sam Hart will be right there yeah I would say like folks in this conversation are pretty high up on that list um so yeah that's that's um I think this theme of like again going all the way down to the protocol design like level right to enable these ux experiences which is something very near and dear to like cosmos's heart right like that's why they you know have app chains in the first place and I think you could do it with something like they described which I think makes a lot of

sense for like a cosmos chain I think for you know a rollup where there might not necessarily be staking or something like that maybe it's special transaction types right you have multiple different transaction types they have different um you know they're handled in different ways they are you know maybe certain trans action types are permission to certain addresses um so yeah there's a lot that can be done here um at the protocol level that is I guess we've seen a little bit of it in Cosmos but I think like very a lot of unexplored design space um in in uh with rollups so zooming back in on uh like if you had to

sort of Stack rank here um you know what you think the the different axes that we've laid out here so far there's distribution ux we can maybe lump this all into like performance um performance as a category um and then security and decentralization you know what do you think are going to be the most important axes for some of these new rollups like what would you be zeroing in on um and trying to focus on and then how do you think that these new Protocols are going to be able to compete with you know the uh optimism and arbitrum the world yeah um so I don't think there's any one correct ordering of those sort of features uh it again is context specific on what you're trying to be

um if you are uh an app developer that wants to build your own rollup then you're going to put a lot of focus on verticalization right and and creating like a an app the perfect place to build XYZ sort of complimentary apps or maybe even you just verticalized everything into your own app and you just you know that is what creates the best version of your app so you're going to go for it and swing for the fences right um if you're trying to be like a general purpose sort of rollup maybe you care about you know performance and liveness right for every every like you know rollup every single team right so they can depend on you um longer term and and

you know have great user experience um and then I think there's another angle like um where you want to you you instead of starting off with your own like first party rollup and then pivoting or like updating the road map to being like an ecosystem of rollups that's kind of like what we see with with um with optimism you know polygon CK sync uh Stark net they're all kind of like going after that um sort of road map there's another class of roll like a rollup framework that is basically trying to do that sort of like ecosystem play from the start right so like Anisha Anisha is a really good example of this

um Anisha is a cosmos chain that is purpose-built to support rollups um these rollups all are Celestia rollups You could argue like in some sense like they they settled to Anisha but they post data to Celestia um and you know Cosmos and I IBC is Right In like probably the most well functioning form of like you know of a cross chain interop standard and so because they're building as a cosmos chain these um you know the the the settlement chain serves as like an IBC routing Hub um for all of the the rollups it's kind of like the original

ver ver like vision for the cosmos Hub but instead of all these being app Chains It's all rollups that you know settle to Anisha so like they will have probably the best um you know cross chain interop of any rollup ecosystem from you know when they launch um this is something that like optimism and the super chain have have talked about wanting to do like right right now it's pretty like limited what they offer in the super chain because they don't have these like you know kind of like the the interop features the first class interupt features that that they want to develop over time um so I think you know that's where we'll see more

specialization um and either specializing for like a CT for your own app specific sort of like you know theme or specializing in the sense of like Hey we're not going to um we're never going to like try to host activity directly we're going to like purpose build this framework and a bunch of like value added services that make this the best place to go you know launch your rollup but we're not going to like have a main chain right um so yeah I think there's there's a lot there's a lot coming but so ju to um I have a lot of thoughts on what you just said but just to to go into um in terms of Stack ranking for me I think the thing is going to be

distribution I I would be just to put some you know sort of sort of prediction here on on paper instead of being very high level like I just think that distribution is much more important by like an order of magnitude than everything else on that scale and I think in particular people really tend to focus in on performance um and like speed and cost and transactions and I think you need that but it's not enough and this isn't meant by way by the way as a dig at Mega eth at all like I actually think they're doing really well on the BD front they've built a great brand but I think they would probably say this as well that it's not enough to just have super cheap super fast transactions at this point in the game with the lead that other Frameworks have you have to do some of the other stuff

as well um so I think that's just really important the the ohop sorry no go for it go for it and the the thing that I think is going to be really interesting to see is is um you know what two assumptions that you know is like the decentralized sequencer roll up as a service type part of this equation like it was interesting to talk to Eugene by the way actually should say I'm a u investor in Atlas should have disclosed that I'll dis close that up at the beginning of the episode but um uh yeah it's it was interesting to hear him say that I'm I'm actually not going to build a stack model and I think you know and everyone got very excited about this like app chain thesis and rollup Centric road map and everyone's like everyone's going to have their own

chain and you know I think rightly so you know I tend to push a little bit more on the value of cruel and like does this make sense from a business standpoint and I do think I've one thing I've noticed with some of the the rollup Frameworks recently and even you know other l1s which enable this is like hey is it like really beneficial to us to allow you to just spin up your own chain here like um it's like unclear and if you look at a lot of these rollup Frameworks a lot of the activity has moved off of their main net into all of these different chains and it's not really clear that it makes sense for them to interrupt or that they're willing to pay to interrupt and so then you're kind of getting this like almost like recurring but pretty low SAS type

fee and you know I I think the rubber is starting to hit the road in terms of whether or not that really makes business sense from the framework standpoint and then I also think that one of the big unanswered questions is going to be is there one sequencer or multiple sequencers and I just my opinion on this is that I think it's very hard to justify from a pure business standpoint but I do think that eventually regulation is going to going to become a bigger and bigger thing here and I do think that's probably the Catalyst which um gets everyone to adopt multiple sequencers would be my bet here yep I agree with that um so maybe it'll touch on like the the business model thing and then you talk about distribution um yeah I think it's pretty

clear that like the largest revenue generators the revenue winners will um will come from sequencer revenue from very valuable block space right it's like if you have like going like a defi chain right and you have lots of people willing to pay high priority fees um even on base right now right I feel like there are people paying priority fees right for me opportunities right are they pay a teeny tiny fraction of you know the total sequencer fees down to ethereum right um it's pretty clear like the biggest Revenue generating like

opportuni is in creating valuable like shared St blocks shared State and owning the sequencer associated with that um now if you like maybe Outsource the sequencer to some third parties I would do so in a way where like you are still retaining the majority of that Revenue it's getting sent to a treasury or something like that and you're paying like a commission fee to those to those actors rather than just basically you know kind of opening this up to have all the fees go to these like operators and ster stakers may maybe that's how it ends up working out I don't really know um I guess that to me is in the at least near medium term

going to generate much more Revenue than saying we will take you know I guess the the other way to try to do this is to try to create an ecosystem where there's tons and tons of valuable block space and you provide enough value to those uh rollups on top of you that you can you know justifiably take a rake right um that I think you know longer term could end up being even bigger than any individual like one chains you know Revenue opportunity um yeah but in the if I were building like a roll up you know then the next like two three years like I would just I would probably

rather it's lot easier to like build a chain and get app you know apps come directly to you have valuable block space or build a great app that creates valuable block space and take the sequencer fees than it is to say like you know we need need 50 different rollups they all need to be generating this much revenue if we're taking 10% of that then maybe we get close to the amount that like you know one super successful like you know shared State sequencer fee Revenue you know outcome would would uh would get you here's a uh here's a Black Swan type or here here is an embedded assumption that I see in a bunch of different Frameworks and even

like L1 in crypto is that you'll be able to charge for interop interop is the killer feature and you'll be able to charge for it and that I think was a nested assumption in this like op stack like stack model where you're GNA have a bunch of different chains and they're going to want to interoperate with each other so you enable that interop and you can charge for it as opposed to like here's another way that you could have gone about this um monetizing the different apps and chains that you want to build is something that you brought to my attention which is like first-party hosted Services which is like instead of um conduit running your rollup as a service like that could just be something that's vertically integrated within the within the uh you

know that the that the framework itself has and so you could imagine different tiers of being a chain which is one the you know you get like a basic sort of tier which is just uh you know you get to spin something up but then also if you want services and to make it really easy and you know manage all the end points and all that thing then it's like a tiered kind of service offering there um I don't know like that's another route that you could have gone down but the the challenge that I see with asking people to pay for interop is it's a it's going to be a power law like of all of the different op stack chains one of them is going to take off and everyone's going to want to pay to interrupt with that one chain but that one chain

doesn't want to it's what's the incentive for them you know I think um I don't know if paying for interop is like the best way to frame it um what I'd say is like there's a lot of benefits as a developer there are a lot of benefits to owning your own block space right the control that you get from owning a on block space um the value capture opportunities the ux the verticalization of everything right there's a lot of tradeoffs that come with owning your own block space it's right you know n it's a distribution problem it's an onboarding problem it's like um just an overhead like problem you have all these things to think about around like you know different bridg to use getting usdc and tether to issue natively on your chain

right um You have a bunch of you know devops people you need to hire now to like run the chain and so I think the common thread I guess that I would say like these either it's an L1 or an L2 with an ecosystem on top like should be doing is breaking those tradeoffs right and so if you are saying hey you can have your cake and eat it too can have your dedicated block block space and we have this system that makes it so much less painful right because you're not out on an island anymore like we have this way of basically getting you the equivalent of shared State while having the control of your own block of your own block space or sequencing right now

that starts to become like something that's interesting to pay for and if you add the option as well to like say oh and we'll like host and run this like you know hardware for you because that's noncore to your like application like you don't you're not like an info company or an app company that wants its own chain right so we if you want to like we'll take that off your plate too that's more of like an offchain sort of you know I would say like could go to like the development company versus I think more at the protocol level right which is something that would you know be more tied to like the Dow of and like the the framework more directly right is are those value added Services um so I don't think it's like paying for

interupt I think it's more like this combination of you know services that definitely includes interupt maybe it includes like some other first- party things like um you know you have this like solver Network that's first party to your like ecosystem right um could be I think like the you know the smart wallet thing is is an interesting example too like maybe you try to like differentiate on the wallet side for ux um point being is like it's interop is just one subcomponent of like um you know if if you're taking the approach of not trying to get people to build directly on your train you're

trying to support this like ecosystem right yeah you just want to give developers like you know the ability to get the benefits of Both Worlds um the benefits of like you know their own chain and the benefits of shared state or like what they're leaving behind kind of right um and that to me is a much more compelling like you know sort of um value prop and and has a higher chance I think of of getting willingness to pay and like creating sticky features with like you know or like the you know the benefits of staying and paying a little bit are greater than you know what you would get if you were to like go off on your own um even if you're really successful yeah all right I think that's

a good way of framing it I agree um there was one other thing you mentioned earlier like I agree with you distribution it's all like that is definitely like the winning axis but like I I I think it's it's not super obvious how you differentiate on distribution outside of hey I'm coinbase I have a company I built with a massive user base like I'm launching a chain will have a distribution Advantage like of course you do but like if you're a new project right um there are it's it's much more limited on how you like um or fuzzy on how you differentiate on distribution um and

like you know if you're Mega eth then you're saying like well yeah we we're trying to like we're laser focused on distribution but we're doing it with like a brand and a Community First like Bottoms Up approach right um kind of like a Grassroots like having hackathons getting like you know we're a new project we'll attract other new projects come on in um and then you could something extreme is like going back to the salon of phone example like no roll up no rollup will do that but you see like the spirit of that it's like we're trying to differentiate on mobile you know experiences um you know ton right like if ton was a rollup like that would be another one right um it's more

similar coin base but so I I think the with the one caveat I'll say that like a new L1 I don't think this applies to you because you can't really do this but I think that there's going to be I think that the I think that the winners there been a long held view of mine is that it's going to be people who build apps like you're right there's actually not there's just a very limited Playbook that you can really run um as a pure play developer platform like like a new L2 or something like that you can you know you can do the you can get your bear chain baddies or your like build the community and all that kind of stuff which is super real and super valuable um but you know the what Eugene has right going into Atlas um and I'll

they're just the most recent example here which is why I'm referencing them but you know they started they actually built an exchange so not only do they have a lot of knowledge but they have a user base that they can import on day one and all the other examples that you mentioned started with an app coinbase started with an app telegram uh and you know Amazon did as well so I think this is one of the metas that hasn't like fully shifted in this industry yet like people are so used to building infra that that I I don't think it's I don't think that the shoe has dropped or the Light Bulb Has clicked on that you got to start with users and then once you have the users because you built something that they want then you can reverse engineer your way down the stack

like there's there's a real strong bias for starting at the base of the stack in this industry um as opposed to the other the other end yeah I think it's also just the DNA of of like a large part of the developer Community yeah um agree you know I don't think a lot of the app developers are thinking about chains and I don't think the chain developers know that they should probably start with an app or feel comfortable starting with an app they think like you know maybe that scares off other thirdparty developers um but you know I think like friend Tech's a pretty interesting example it had a moment in time where like could have been printing sequencer fees right um and you know maybe that's just not

the team that like had the you know the desire actually you know what I think they were going to do friend chain for like a second towards the very end but like it's a good example you just you know bring that to your own bring that to your own chain like you had you almost you almost had like you know enough distribution to kind of like get something going around there and then have like a bunch of social apps kind of be built around it um I think the next time we see one of those like big breakout social apps like it would be interesting um you know we'll see like maybe they continue just to not give a [ __ ] about owning infra um but maybe one is like all right great I

launched as a smart contract app I found you know pmf or enough of it right that I'm just gonna go right on over to my own chain try to build an ecosystem around it um yeah I um you know FR I don't want to get too derailed here and talk about frch but frch is a super interesting one I think I think a lot of people feel like personally gutted by that one because it was you know first of all it happened at a time when everything was completely dead it took over everyone's feed it was like hey we finally have an app that looks like the beginnings of actual product Market fit uh it was by Crypton native and they just you know on the one hand you could say hey they aband you know they stopped uh they turned over ownership of the contracts

or whatever and that's what Unis swap did but yeah but Unis swap isn't a social app like you you could the the the the the protocol was basically done on V1 and you could just swap um but that's not really the case with a social app you have to keep they were they were they were printing enough revenue from inapp fees too that well I don't think like sequencer fees would have really moved the needle but like could have could have people were trying to SN snipe those keys and stuff like that like that's me poly Market's another interesting one right as definitely having this moment in time where it has distribution um it's got tons of Mind share and you know I don't know what their monetization angle is it doesn't

feel like they really care about having like an ecosystem of thirdparty builders on poly Market but like I think that's you know another one they if they were to move over to their own rollup um maybe there's too much product friction right now but maybe you could do it like post election um it's really interesting I'd love to be in the room for some of these like um some of these build and just uh you know I always try to like ask when I talk to you know Builders of like a decently successful app that's on a shared State chain it's like well what would push you over the edge to like have your own chain um and yeah at the moment just not really a priority for most of them so Miles I know we we got

to wind down here in a second but this is the classic question right but like endstate uh Market structure for this you know right now there are I guess in maybe the editorial iiz a little bit here it felt like there was this whole wave of l2s that launched you know sometime over the next the the previous 18 months and there was kind of it was all gen purpose and some were optimistic a bunch were ZK but there wasn't an enormous amount of differentiation in between them right and now we're on the the cusp of this NextGen wave of l2s which are starting to differentiate on some of these axes be it like the performance of Mega eth or the you know very sector specific Focus or whatever it is uh you're starting to get more

Innovation but still just the raw amount of l2s that exist are very high and uh and honestly like the optimism and arbitrum of the world have a huge advantage in terms of just the you know the network effects that they have on their platform and every day there's a pretty crazy chart of just the amount of eth that flows into arbitrum on a daily basis it is huge and that lead is only extending so I don't know how do how do you view this you know playing out uh you know brass tax over the next couple years assuming maybe we get a bull market with some more activity I mean it feels like we've got too many but I'm unsure of how it actually ends up shaking out yeah like in general I've always been kind of like um you know a

believer of horizontal scaling uh in in the long term which does point to like you know lots and lots of chains but I do think that horizontal scaling does not work at the current moment given the amount of trade-offs that I was just talking about earlier around like you know the pain that comes with like going to your own chain um and I could see you know a lot of this getting solved uh in the next like five years um and then you know I think a combination of could have little sort of zones right of like ecosystems uh the Frameworks providing a lot of you know first Party Services

tooling infra like interop Services um and you you know maybe have like a few big like framework winners and maybe those outcomes are not even as big as the app winners right on top um I think in general like if these things become platforms the goal is like you know the the value of like the the framework of the platform itself should be a fraction of the value you know created on top um and so I don't know if the right way to think about endstate Market structure is like you know which framework like wins if the Frameworks maybe end up being less valuable than like the big winners on their platforms that that help them

like win right um so yeah I think it's just I don't I don't have a great answer for you um I think you're right in that you should just be following like distribution and following the apps um and seeing what their preferences are right because maybe these large shared State sort of you know um platforms end up winning out I mean there's never going to be just one of them right but I think maybe that's where like like the value of of keeping things every everything together in one place just is always better than you know this the the sort

of trade-offs that come with like horizontal scaling fragmentation um so I don't know if a great answer for you I just think that you know we're kind of in a transition stage um or some they're going to go for like the you know base layer that's supporting a big ecosystem on top and some are just going to go all in on their own shared State um miles what do you think about the uh this idea that l2s might try to spin off and be their own l1s eventually where do you fall on that subject um I don't think they will I think I just think the economics are actually much much much better be an L2 um and yeah I just I'm not sure the

benefits will ever outweigh like the um the costs like I I really do think that like you could build like Mega eth versus uh manad will be a great example right um if the two have like complete feature parody like let's look at what the economics of the of the chain of the you know respective chains end up looking like um you just get you don't have to do as much right as an L2 um but some of these l2s are functionally the same as what a lot of l1s are trying to be right like optimism is trying to now be you know

like kind of a settlement layer right for like a bunch of rollups on top that's kind of what ethereum is right um but they don't have to pay as much as ethereum does right to to to serve that role for its l3s because it doesn't you know it inherits security it doesn't need to pay you know thousands of validators Etc um yeah so I I just do think that like I don't I don't know at what like how many product benefits you really get from trying to go to an L from an L2 to an L1 um and I don't people always say like they want to become an L1 because it

pumps the token I don't think that's necessarily like true in the long run when people look at these things actually start looking at the economics a little bit more closely um so yeah that's that that's why I'm skeptical that like the most successful l2s just become l1s unless um I don't know they're like overwhelming product and economic benefits to doing so maybe someone could who is more technical than me could could explain this so if you're sitting there listening to what I'm about to say and it's wrong please hit me up just DM me on Twitter but I think one of the other challenges with L2 spinning off and being their own l1s would actually be a huge part of like one of the big Moes that I think optimism and arbitrum

have today is just the raw amount of eth that's on the platform and remember this is a WRA version of eth and it's very safe wrapped eth because of the you know how safe that bridge is between the L2 and and ethereum and if you were to spin that off and be your own L1 then that changes quite a bit right um and so I don't know I'm I'm just I'm I'm with you on that I've flip-flopped around this I I was in the camp that they might spin off and be their own L1 but I think probably you know as long as that flow of eth you know continues to be from main chain up to the l2s it it just doesn't really ultimately end up making that much sense I think I don't think

any of the assets in the Bridges can like without a ton of friction and pain be migrated like that's what I was thinking too like would that even work I I don't know yeah um like the only time we've ever seen is DX but it was on such a smaller scale right yeah um and yeah they were able to migrate like most not all of like the eth over um but it's pretty painful um and I could never see anything that's like not just like imagine if there's a shared Bridge right for all of the super chain and l2s and l3s

like that's gonna be like a lot of eth and a lot of coordination it just won't happen so yeah I mean arbitrum one alone has almost 14 billion doll on it like I don't know I mean that's just yeah even even at today's numbers it would just I think make everyone very squeamish and yeah I think I think the bigger question is not do like the Frameworks like end up moving it's just if you're like in the super chain right or you're in orbit orbitrim like orbit L3 what keeps you there once you're big and you know have the ability to maybe you know have like a stronger narrative or product benefits

token benefits by moving um to your own L2 outside of there like really ecosystem it's tough to speculate on this because it's been the wrong move I think to be you know no offense to Cosmos here I think Cosmos is going to get the last laugh in the end but it's been the wrong move to launch for the most part as a full stack g chain right like whatever benefits you incurred in terms of um you know performance you sacrifice that for distribution and being on your own sort of Island now there have actually been some cos like Celestia is technically a you know Cosmos chain and they there would be becoming an ecosystem in their own right and be chain uh you know still very early days but they could be end up

being very successful so but I don't know I think for the most part this um you know the shelling Point common ecosystem you know layer of of trust is probably the has been the right way to go and it's you know that makes a lot of sense to me that I I can paint a pretty logical case that as long as the main use case is money and finance related that's going to continue to be the case it just really haven't seen a something that's a little bit like gaming or social networks like really take off right where there's less there's less need to be interoperable and you can be on your own little island because it's just an app that people use so I don't know sure I mean it's just so hard to it's just so hard to guess at what that

world looks like you know and you also have AV avss now too right that's an option it's not like totally your own chain maybe you have you don't even have like you know ordering maybe or like a like a stateless ABS too um yeah so that is now an option that's a little bit more tethered right to distribution uh than completely being on your own um so yeah but I I do think we'll continue to see like um for specific very narrow use cases like um full L1 like Cosmos chains coming out I don't I just don't know how many more like bar chains or monads

there really will be but like you know we see like story protocol like the IP you know chain right that's choosing to be a cosmos chain um people start to see like okay could this have been a rollup what would have would the tradeoffs be um so yeah no lot lot lot more like I don't know just a lot of the Roll-Ups basically been kind of like the same thing so far um and so it's just they're pretty apart from ZK versus optimistic quick I'm still long the L1 trade personally like I just even um I don't know I think how long is that going to keep working as long as Bitcoin and ethereum probably keep going up on a

somewhat consistent four-year basis I think they're going to be new l1s and I've had I've had the perspective for a while that I think they're going to be five or six with staying power at the end of the day and I think those are actually going to end up being super valuable um whereas to me you know it's kind of like who needs the next L1 but I think you could very like the L2 space looks more crowded than the L1 space from where I sit like personally it looks like more money and more teams and more Talent are pouring into that space than L1 so you know I think the L1 space is going to continue to work and I think there are going to be some new ones that surprise people to the upside this next cycle yeah yeah or just people look at

rollups more and more just like as chains right that's how Roll-Ups are framing have begun to frame them M themselves now like sometimes they don't even mention the word rollup right and you like find that if you dig into the docks a little bit so just call yourself a chain L1 L2 maybe you know doesn't matter I know maybe we'll stop with all these words like AVS rollup whatever it's just you know it is it is a little funny it's like this is like your backend architecture right it's just you're a you're a word right you're just a chain you're just in N work uh yeah but yeah I also do think over time there will be less words like monetary premium and stuff like that I I which by the way I'm

a Believer in I think you could look at I know miles you're a hater of that term but I just I think that is real for things like ethereum and Bitcoin and salana I just it gets so wishy-washy and it's so hard to be quantitative about it at all it's so yeah I'm I'm more of a fan I'm more on the side of like the mid curve cash flows side of things long run I think that's too me too yeah I'm with you I'm with you yeah I don't ready ready to end the monetary pre premium not just for like new entrance like no you're not gonna like the goal is not to create a monetary premium if you're also trying to create like develop like a

developer ecosystem I agree I agree dude do you see Trump uh bought his first uh bought a burger with uh Bitcoin at pubkey this week oh boy yeah I I think I saw that I think I saw that they weren't sure if the transaction went through uh took a couple minutes some guy can can we get these guys you know something a little bit better you know I've been I've been to pup key a couple times and I I the first the first yeah it's very cool no no no I know I but I did ask the guy who was behind the bar I was like hey do a lot of like Bitcoin people come through here and try to pay he was like no dude so I don't want to blow a PP key spot but you

know he also didn't you know I was I was wearing probably something normal not like a not easily identifiable crypto person he was like no no no don't worry um so it's a cool like it's more of like a cultural like you know salon right like for for Bitcoin people and or no for crypto people like broadly um not necessarily like awesome you know purchasing experience with Bitcoin but that's okay Trump he he's got some he's got some good publicity whoever is advising him is doing a good job although the world Liberty fi uh that looks like it's going to be an unmitigated disaster so if if it's not too late you know maybe pull out of that because I don't think that's I don't

think that's gonna be a great look um no yeah no yeah we won't it's okay whatever all right buddy this was a fun one glad we could hold down the fort while the the whole industry is gone and uh you know partying and Singapore so it's fun though yeah exactly just fun to pick a topic and kind of Riff on it for a while uh we'll do it again soon cool all right dude cheers see man hey everyone hope you all enjoyed today's episode wanted to give a final shout out to namada again a team that is near and dear to my heart they are building the shielded asset Hub which is protecting the future multichain talked a little bit about how that works in the mid roll but for now what I would highly recommend that you do is go check them

out they're in their main net launch phades you can follow along with everything at a.net you can start rewarding Yourself by shielding your actions and strengthening data privacy for all across the multichain so thanks again to MA for all the great work that you're doing