Rollup Roundup with Gelato, L2Beat, Succinct, and Spire | Livestream

Transcript

If you care about what's actually happening on chain, subscribe to the Xerox Research newsletter. Our team at Blockworks Research sends a daily brief with analyst insights, datadriven breakdowns, and sharp opinions on what's happening on chain built by people who live in the arena. Subscribe at the link in the description today. Nothing said on ZeroX Research is a recommendation to buy or sell securities or tokens. This podcast is forformational purposes only and any views expressed by anyone on the show are solely our opinions, not financial advice. Pokio, Ryan and our guests may hold positions in the company's funds or projects discussed.

[Music] Welcome, welcome to another episode of ZeroX Research. Uh today Mark and I from the Blockworks research team are joined by uh a big cast of rollup related uh L2 related uh various uh spaces within the ETH rollup and L2 ecosystem. We've got Lewis from Gelato, uh Leland at Succinct, Hubert with L2B and M team of Spire Labs. Uh how's everyone doing today? Glad to have you all on.

>> Super excited to be here. Awesome. >> Yeah, great to be here. Perfect day, perfect timing to discuss the ML2s, I think, after yesterday's uh FUD. I suppose mix of FUD. Like everybody is fing each other, I feel. But yeah, perfect time. >> Yeah, there's been um I think some hot topics here around we're getting into one of those conversations on TT at least again around uh good for ETH, bad for ETH. Um, you've got a lot of large companies, corporations, and even crypto adjacent teams announcing like new L1s that maybe are EVM based, but um, perhaps surprising that they're not, you know, roll-ups or L2s specifically. Um,

you know, the Stripe Paradigm, uh, Tempo Chain, you've got Circle with I think it's ARC. Um, there's been several other recently in the past, you know, maybe weeks to months. Um curious your guys' takes on you know what are your thoughts here? Maybe just open it up like you know if you want to hop into the is this bullish bearish ETH or just what this means for like the L1 versus L2 relationship. What do we think this means kind of going forward and how are we thinking about it? >> Yeah, I'm happy to open the floor here although I'm already looking forward to to all the other spicy takes. Um so yeah from my end uh like first of all I'm Lewis I'm the co-founder of Gelato and

we have been running very various services on EVM chains originally Ethereum like six years ago I think we started the project uh but we're also very much known for our rollup as a service offering powering uh chains like Kraken zinc chain that's running on gelato rhea um chain that's a perex open campus um arena We have a bunch of these chains and we deployed these chains into production for for two years now and we gathered a lot of information on how are real customers and their users actually using uh rollup technology what are they doing on their chains what what do they care about um I would say the way I read this uh stripe L1 circles arc L1

uh Google's L1 or whatever like is in reality L2s are readyish, but they're also not really ready. Uh, at least not in the original way that they were meant to work and were envisioned by Ethereum. And and you know, back in the day, L2s were meant to inherit Ethereum security. That was the whole point. Um, Ethereum came to the conclusion that the L1 alone wouldn't scale for the world's use cases for the the the Stripe payment chain or whatnot. So like I think I Ethereum was is already like very much better positioned than a chain like Solana um to actually deal with the the fact that

there's huge companies with their own use cases that want to build chains like stripe right like Stripe launching their payments ch thing on on Salana would would be like really I think like no one is even considering that um but they could have launched an Ethereum L2 and they didn't right and and why why did they decide to go with their own one? I mean, best would be to ask uh them themselves, but I'm sure they will pull out some statements. My own personal take is sure, there's always like an L1 premium type thing. I think there's a lot of projects considering L1's because they think it will pump their token or valuations more. There's some truth to that. I don't think that's a major factor for Strive. They We all know that they're like a private company that that

wants to stay private for as long as possible probably. So, who knows? Maybe they have some DJ token play there. Paradigm is involved. So I'm sure there's some some token play as well. Um but uh I I don't think so much to be honest that that's the major factor. I think uh I could imagine that they want to build something huge here like I think they want to shake up the world and right now having a centralized single sequencer server is not really that big. I mean Bass has been killing it. Coinbase has been killing it on their server, but I think Stripe is thinking bigger than that. And in reality, you can't really do that today so well with Ethereum. Um, because we we currently lack the technological maturity of based rollup based

sequencing technology. We lack the technological maturity of native rollups. Um um so we still have single sequencers like single boxes servers like arbitron Coinbase um many of the chains that we are running gelato chains like a single sequence of boxes that's very different from what Ethereum is right and I think stripes aspiration is to be similar to what Ethereum is and u but for payments right u and we still have security councils and multisix securing our L2s um so like that is also not Ethereum right Ethereum is not a multisik it's a network of validators right and I think Stripe even though they start fairly

centralized they what I found really bullish I think I'm in general was very bullish that they are launching a chain for payments that's hugely bullish for the space like that's 100% PMF for blockchains for global payments that's so sick um but what what I was also bullish on in their announcement is that they put in there that they said that they want to become permissionless at some point and progressively decentralize which just means is that they want to become like Ethereum. Um but they can't because there's no base sequencing like at least not at scale in production readiness today. Um there's no native roll-ups. There are no native roll-ups today. Um so they they would have to opt for a single server box.

They would have to opt for multisix and smart contract upgradability. And last but not least, ZK is uh we have Leland here from succinct. ZK I think is also really what was missing from Ethereum rollups. the big ones today, arbitum base, they all have optimistic fraud proofs and that just means their settlement times are insanely slow, 7-day windows. Um, and that is, you know, very far removed. I mean, Ethereum is mocked for being slow. But like, if you look at an L2 through the lens of how close is it to Ethereum, 7 days is definitely much slower than Ethereum is, right? So, so I think this combination of the of of the lack currently Ethereum's lack of base sequencing based pre-confirmation technology, its lack of native rollup technology uh to to

supplant the the need for different sort of proof system implementations and multiix guarding them and the lack of of ZK and Ethereum rollups is like this trifacto is essentially really isn't positioning Ethereum as a very strong candidate for a stripe L2 to if their ambition is to be global decentralized permissionless right now. That's just we have to be honest ourselves to ourselves as as Ethereums. But the good news is we can very much get there and we've seen the first wave of roll-ups. They've built some great technology and now it's time for wave two. I'm sure many rollups will update like what many of the current day rollups like arbitum they will also participate in phase two.

We've we've seen this announcement. Congrats by the way Leland that uh that uh succinct is working with arbitum on a ZK version. uh you know who would have thought um so so the good news is we can get Ethereum to a stage where Stripe would have launched on there but we're simply not there yet today. Uh so yeah that that would wrap up my long speech here. Thanks for for waiting uh for me. Yeah, I'll jump in here real quick to say like I I totally agree from the perspective that you're you're coming at here which is like it's not so much about these companies that are launching their like about Ethereum. And I think people uh way too often question like is something bullish or bearish for ETH without

you know that thing being about Ethereum. If it's a Salana upgrade um then you know maybe there's competition pressures with Ethereum but I think it's much more valuable to actually look at what Ethereum is doing. Um and you said it great there's like a few pieces of technology that we've been waiting for. Um layer one scaling data availability sampling um ZK. So, but all these things together, uh, and I think you have a much more appealing kind of technical stack for layer 2. Um, if I had to guess at like why the these layer ones are not layer 2s, I would say it's probably, you know, Matt and the Stripe board got into a room and um and said we should launch a layer one

together. And no one even brought up it should be a layer two. Uh I think it's just not a um there's not enough of a value proposition from an economic perspective uh of being a layer 2. I think the I think John said earlier said the greatest advantage of being a layer 2 is you can siphon users away from Ethereum layer 1. Um and I think for for many chains that is like that's a really good distribution mechanism, right? Because a lot of they're they want to get Etherland. Uh so a lot of their users are on there want a lot of liquidity. they can. But for someone like Stripe, I think they're looking for a different class of users, but for banks, they're looking for small

businesses and for like e-commerce. Um, and those just kind of things just don't exist on layer one. Um, they they could at some point in the future and I think they will exist quite prominently on layer twos, but for Stripe, I think the the appeal of being a part of the Ethereum ecosystem just isn't worth it for them. Um, yeah, that's my take. And I would maybe just add that now is probably the last possible moment to launch an L1 also. That's why they called them like the Al1 final boss. uh because if you think about it, we are in this pivotal moment when after a couple of years of uh developing uh L2us uh the tech is slowly uh getting credit to all

of those big update updates like based and native right because like three four years ago without all of these uh ZK research and development I don't think anybody would even you know uh would think about native rollups in like uh next five to 10 years from back then. Uh so I also think that's uh maybe a bit more strategic for them to get as big uh of a cut from the from the pie as they can. I see. Um I mean I think the main reason why they went with L1 is probably because they want like more customizability.

I think all these chains will have some level of like block list or allow list and they've already like mentioned this in their like press release and so ultimately I see these new L1s as like very bullish for crypto but you and gives like even more credit to EVM because both tempo and circle like up front said like oh we're supporting EVM whether it's like EVM equivalent is like still to be determined and like there may be some nightmares over there. I mean that but that overall will mean like more tooling for the EVM and just more general awareness for crypto overall. And I think like as time evolves like as L1's become more mature maybe like they will reconsider their like L1 stance or like future chain like I guess like future like corporate

chains will be like hm like they'll maybe like Robin Hood and like oh actually want to go full like arbitr like why roll our own stack because rolling your own stack is also like way more difficult too. I think it's also an interesting question to ask what would convince them to go the L2 way in the future, right? Uh that's an interesting question to ask and I think um while I agree with your point M team that um Stripe probably didn't care about any of the liquidity or users on Ethereum and one way to look at O2s is like you said you can siphon off or you can you can take liquidity and users from Ethereum to your chain. I mean technically that thesis would have

to play out for uni chain. I'm not sure how well it's going there. Um but um uh I I I think there's also simple infrastructure technology aspects uh that Ethereum is very well positioned for that have nothing to do with the L1 that make it attractive as a settlement/data availability layer for L2s. And there I think um I mean that's technically um that's the whole point of rollups at least for example the way that Celestia looks at roll-ups is um they're just chains that post their data to another chain for like data availability consensus like Cosmos had this idea right like why is Stripe not building a Cosmos chain is also an interesting question right why not why

they're not building a Cosmos L1 and why why are they not using that stack um and I I think um like the the reason for Stripe to move to an L2 model would be if their stakeholders and operators in the system would be able to reduce their cost bases basis massively because um these global networks they do cost money right like Ethereum has a lot of costs as well I don't know if you guys at Blockworks have data on this how much does it cost to run the Ethereum network I'm sure there's figures um across all of the nodes and validators right they have to be paid Um and uh like essentially what are we buying as L1's

or L2s with our money is like we're buying uh data availability consent like we're buying decentralization right um the problem with the current L2s is that um they were supposed to therefore also become really decentralized on Ethereum and they're not today. Um and I think Stripe wants to be decentralized. I actually think that they honestly like again their their goal is as big as Ethereum's goal, right? Like they want to be just like Ethereum, a global permissionless decentralized network for payments at some point. H the the funny thing about Ethereum's positioning though is technically Ethereum is positioned and wants to position as a network layer to build other Ethereums on top, right? And

right now like with a single L2 single sequencer server box that's not an aspiration like to be another Ethereum right like Ethereum is not a single server box but with base roll-ups native roll-ups DK roll-ups you can really build on top of Ethereum another Ethereum that is um has one thing that is different. It doesn't need to spin up its own validator consensus layer anymore. That's the point of a rollup, right? But it can focus on execution and application specific use cases. So I think there's a massive uh there might be a massive pull for Stripe eventually to update to become an L2 uh once it's evident that they can achieve similar level of decentralizations worldwide um by building on top of Ethereum as an as

a based L2 and uh yeah like I think Ethereum wants to be like it's almost like it's positioned as Ethereum as a service but the re reality is today you can't really do that because tech isn't quite H and the good news is you will be able to do that very soon is if we keep pushing for base preconf technology, keep pushing for ZK, keep pushing for native rollups. I think native rollups out of the three is the the least developed thus far. Um but yeah so I think that's the interesting question and if if you can as a network achieve the same degrees of decentralization and then then there's always an existential question of like okay why do we even want decentralization right and I think the reason is um to span global jurisdictions to have credible

neutrality to have permissionless innovation permissionless payments at some point be done on your platform and I believe these are all goals that Stripe probably aligns with and they actually want to build themselves right now because I mean First of all, yes, it's a big story for them, but also probably right now they see an easier path to get there by rebuilding the L1 from scratch scratch right now because um L2s don't give you like this nice template for for for achieving Ethereum level decentralization right now. It's it right now probably still see if you're serious about it, it's there's a path of being an L1 to get there, right?

right like Ethereum has shown that path other Solana has shown that path um to various degrees. Uh and the path for an L2 to be truly decentralized is not really laid out. I mean what L2 truly is right like I think Tao and so on they tried but um to be honest here it's not as proven as an Ethereum as a Solana right? So I think they are big enough to to go what to do what the big guys already did because they know that that can work. Uh and they maybe don't feel the need to be the first to prove that you you can also do this as an L2 because like why be the first if you're big enough to to go a proven route already and have less uncertainty there.

Yeah. So let me just I will just add to that. Uh I pretty much agree with uh most of those stakes uh because if you will like like even check out tob.com right now there is not a single like stage two um general purpose roll up uh that is actually having any canonical uh value on it and yeah it's the same story with like based and and native ones right so so yeah we don't really like like I I love what arbitrum team is Right. I I I love what optimist is doing with their like stage one implementation but as you mentioned they are still mostly optimistic

uh at least like I would say like 70 to 80% of all uh TVL is on the optimistic ones right so this 7day waiting periods uh all of this is not uh not something that a team like stripe would like to go with right now I know you know there is opac I know there is uh spire right and all of those uh other options but you know they are they are just starting and yeah I think they will be moving very very fast so and their plan is as you mentioned to go as big as possible so they can't allow themselves to to wait >> I mean we the theme here is that um you

know maybe Ethereum didn't capture this new vertical because the tech isn't mature Fair enough. But to be candid, I mean, I've been I'm I'm going to leave native roll-ups out of this because it's a little bit newer. But to be candid, I've been hearing about bass rollups for 5 years. It was called something else. It was called Anarchy when Vitalic wrote that blog post about it. I've been hearing about ZK for like I don't know 6 years plus now. And it's like, oh, ZK is moving a lot faster than we thought. It's moving all so much faster than we thought. But then like where is it here now? like like we I keep hearing that it's coming, but I do we when is it actually going to come? Like when when do we think that Ethereum is going to have this level of maturity that the

next time a large payments company thinks about launching their own chain at least an L2 is part of the conversation. >> I I would say definitely like ZK has advanced tremendously in the last six years. I would say like or I guess the first generation of ZK rollups. think of like ZK stack, Aztec like these came around roughly maybe two years ago and then now you kind of have like the latest generation of ZK rollups of OP sync. So in the prior generation like building on them was I'll just say a bit difficult. They weren't like you know 100% EVM equivalent. Maybe some pre-ompiles were missing. The DVX was quite horrible. They had their own fork

of Anvil yada yada. But now with the latest generation of ZK rollups such as like op sync which currently works for optimism there's like two chains live on mainet you can use the same tooling as e as as if you're like deploying on ethereum or like any like obstacle except now you have like faster finality but I think what's ultimately unclear to me is like how fast of finality you need to have before larger institutions become like really excited about these types of tools. Like for example, like B has been an optimistic roll up since the start and they have a lot of assets that are just like issued natively or sorry natively is the wrong word. They have a

lot of canonical assets or Coinbase issues assets directly onto base that kind of entirely ignore like this like optimistic finality window. And like for them like base is just a chain like they don't if it's optimistic if it's ZK like maybe it doesn't really matter because they're just issuing assets directly onto it and just assuming that there'll never be like a challenge. And so the question is like how good or how fast does like finale need to be for ZK rollups before I guess customers are issuing assets like through the canon like natively on the L1 and bridging it via the canonical bridge instead of using like a third party bridge. And so I

think that's like the big open question today. It's like is one hour finality enough or does it need to be like way faster? >> Yeah, I really like your your question mark. Um you know because it's definitely true. I've been hearing about ZK for a very long time. Also been hearing about based uh for for a long longer time. M team definitely has been very prolific tweeting about it for some time. Um I think there is another like ultimately we have to go back to the question um not so much why is Stripe launching not launching an L2 or the real question is why are they launching a chain right because like actually we we are on Twitter fighting about oh why

why is it an L1 not an L2 like the the interesting question is why do they even launch a chain to begin with right so um we go back to the fundamentals of of blockchain like what what are they there for? And um I I think uh blockchains where they really shine still like the original vision for block blockchain still especially in a world where ZK is used for verifiable execution is for censorship resistance um global neutrality. Um and like what this affords you is uh like permissionlessness.

Um like you being viewed as a neutral platform and that should lead to the whole world adopting your ledger, your chain for for finance and payments and whatnot, right? Um and like according to their statement, Stripe is on a mission to build that as well, right? Like they they purposefully put permissionlessness as a northstar for them in their announcement. Um, so, um, they're building for that reason. Um, I think, uh, because otherwise, why the hell would they use like why the hell would they build like their own blockchain like in terms of longevity, right? Um, so I I still think that they probably have a grand big vision. They're not

just there like saying, "Oh, let's launch a chain for the funs fun and joke." they pro probably have a huge vision for this um which is like replacing how global payments are done nowadays with replacing Western Union replacing whatever other payment systems you have there right like the real loser here isn't Ethereum I think Ethereum ultimately even though they went the L1 way still benefits from this the real loser here is supposed to be probably Western Union or any of these old payment systems that Stripe is going after with blockchain technology right um but like this will come back to the question like if if they actually want the highest degree of decentralization this is the whole like like what is what

are is Ethereum saying like they are saying we are the most decentralized and we have proof for it right that's why like that's Ethereum stance against Solana and everything else right uh and the the the idea of Ethereum L2s was to get that as well pretty much um and um yeah I think if if Stripe is on that mission. Um then at some point uh once the tech is ready um it will simply be um sure right like maybe right now there's a way for us as an L1 to progressively build that up but once the tech is already improved once based native CK is already improven uh there

is this sort of um escape velocity or like this great filter moment where it's like from one day to the next you can spin up a chain and it's from day one as decentralized as Ethereum. And I think that's super hard to compete with with your own L1. And at that point, um, we won't be see like at that point you can you can build a global decentralized payments network very cheaply on top of Ethereum and just you're essentially renting from that validator system that was already built up over decades, right? Uh I always come back to that like I know Mark your question was like okay isn't that hasn't like isn't it about time for that tech to be ready like we've been hearing about it for so

many years in reality these things take way longer base is fairly new I think total anarchy was an initial idea from Vitalik that was abandoned for many years and then picked up again much later ZK like I think the sin team like what from what I've been hearing from them and customers using them hibbachi and and many others is like they have some break they have made some breakthroughs in in the last year. Um, you always have to be careful with ZK marketing. I say we we at Gelato we were running ZK EVMS with Polygon two years ago was way too early. Um, we found out the hard way. Uh, but you know like at the same time um I think it's getting ready for ZK native rollup still a big question but I think native roles is mostly a standardization effort anyways

and based um I mean I think M team is building there. Uh we've also at Jalato working with a a project called Gataka they're building there. Um so there's stuff happening and we have test nets based test nets. So um it is going in a direction. Uh I think we have to be a little bit more patient but at the same time it's important that we create this urgency and and we don't become complacent and get this inertia. Um the wakeup call here is L2s aren't finished yet. Even though Coinbase has one with billions of TVL in there, that's not the final form of L2s. H this ain't even my final form, right? Like there's a next wave coming. And uh and I think uh yeah, so so stay tuned for the next wave of

L2s. Too bad that Stripe already wants to launch now, but I I wouldn't say the chance is zero that they won't upgrade to an L2 model in in the far future. like not far but maybe like who knows maybe five years from now. >> Louis like what would be the feature spec like the fe like the features of like the next generation of L2 like how would you define like what is the defi what like what is that definition of is like an hour finality one minute finality like what does that mean exactly? Yeah, actually I think >> real quick.

>> Um I think there's there's a there's a temptation to like think about the um the the features that like we care about as like nerds building this stuff. Um but I think like most practical ideal next generation roll up for me would be instant withdrawals uh to layer one. So you know call it um call it a withdrawal just like moving tokens. I want more than that. I once uh I wouldn't be do any contract call from my layer 2 to layer 1 instantly. And we know it's possible like we've done the research.

Um SME is building it for layer 3s and layer 2s right now. There's no reason you couldn't put that um onto layer 1. And I think the the ideal case is the ideal features I should say are um instant deposits and withdrawals. And those deposits and withdrawals can be whatever you want, anything crosschain. Um and developers can have a seamless experience doing it. um that's like very developer facing though for users. I think there's there's very much a uh demand for lower latency. It's like uh you know it's like the Amazon thing.

Users will always want faster deliveries. Users will always want faster transactions uh cheaper transactions. But we can get there. We have the we have the technology and we have the research. Now it's just a scale issue of putting it all together. And um I do want to hear from you on how to think about that as well. Yeah, 100%. So there's this whole article that I wrote on ETH research um and we also worked on an a version of it with with block works um which goes very much into data on current L2s um and uh there's this uh Ethereum settlement score ESS that I propose very much to L2B to to Hubert and the team here uh

trying to get them to derive value from what I'm proposing there. It's drawing upon what they built already. a lot of the data that they have already as well, but it's just this new way of of sort of measuring what an L2 how close to Ethereum and L2 is like it's measuring the Ethereumness of an L2, right? And with the goal here being that as an L2, your decision is okay, I don't want to launch on Ethereum because it's too slow, it's too expensive, but I do want to have the same level of global distribution decentralization and censorship resistance that Ethereum has.

And if you have a perfect ESS score of one, then you're you are basically like Ethereum. That's like that's the meme. It's a score from zero to one. U it's spicy because technically all current L2s would get a straight zero. There's not not a single nonzero L2 today. Um and one is a bit of a me mimatic northstar. I think you can be very like achieving a score of 0.2 on the Ethereum settlement score is already pretty high. Um uh I could share my screen here. I don't know. Anyways, check it out on ETH research Ethereum settlement score. It's opposed to that. Check it out on Blockworks. Um there's an article that we published. Um but to get to your to your question like um yes, it's about instant uh deposits. That's the bridging

part from the L1 to the L2. Um but for me really it's a it's a question of hey, who's securing this deposit, right? Is it Ethereum or is it some third-party bridge provider that you hope will never be hacked, will never see a server or hack, right? And Lazaros will have a much easier time hacking all of the bridges that we use nowadays that already provide you with instant deposits as because as a normal user, you think, wait a second, instant deposits, they already exist, right? But in reality, it's like a third party bridge provider that gives that that abstraction for you today. It's not Ethereum that is securing that transfer or that asset. So um I think that's why ZK is so important and I know I know

that's also what you meant MT probably right like getting to instant canonical bridging like instant asset transfer of Ethereum assets between Ethereum and the L2s that only involves CK math and doesn't involve a third party server that everybody prays doesn't get hacked right um that will definitely make your roll up more like Ethereum and I mean pay uh Stripe like it's an interesting question like like is Stripe going to have proof of stake I actually didn't look that up. But what what is what is even securing the chain, right? Like what are their validators doing? Is it proof of authority? At which point it's it's basically like a um um a very centralized consortium chain. I I I think they have bigger aspirations that like that. But if it's proof of stake, you can very easily also measure the uh

the security of Stripe versus Ethereum. And I'm sure they would be interested in acquiring more security, right? If they want to be the global payments network. um security doesn't sound too bad like not having fraud and payments uh reverting and whatnot on your chain would would be very great and that's what Ethereum is known for right so so so yeah I think achieving a similar level to Ethereum security means uh the rollup has to um be zk all of the assets on the rollup have to be on Ethereum um and then um you get instant bridging into the rollup and very important uh transaction inclusion That's what L1's are good at good at. If they're decentralized, you have a decentralized validator set, meaning

that you even if one validator senses you, another one will include you. This doesn't exist today on roll-ups. There's force inclusion mechanisms, but they're quite naive. They take 24 hours or so to clear on arbitum. Technically, there's a multisc that can still censor you, I think. Uh I think that's what stage two is about if I'm not mistaken to be. Uh but yeah, like censorship resistance, that's really important. getting your transaction included in the ledger on time. Um, you know, like that's what Ethereum is really good at. Um, and for that we need based base sequencing. We essentially need uh users to like get the confirmations of inclusion from the L1 validators even though they're transacting on a rollup. And yeah, last but not least, there we should remove

multisc that secures everything like it is on today on L2s. Um and yeah, so again I re recommend everybody listening to this pod uh read my ETH research post Ethereum settlement score. I come with a lot of great data in there about current rollups. And the essence of the Ethereum settlement scores is essentially uh not just saying that we should use um based sequencing to get censorship resistance on rollup rollups or or um that we should use DK to get instant sort of instant deposits and proving latencies and withdrawals. It's also using um empirical data from your rollup saying okay how are are the users using the rollup what are the assets on the rollup

are they actually assets that exist on Ethereum or are they just minted on the rollup L2 at which point Ethereum is basically completely out of the picture I think someone just mentioned that uh with tokens on base like Kaio or others that basically don't even have a record on Ethereum and like Vitalik recently said Ethereum wants to be the world ledger if you have a native asset on the L2 that doesn't exist on Ethereum the L2 to asset in this sense is definitely not using Ethereum as the world ledger and yeah there's other things like canonical bridge volumes and and and this and that. Um but uh yeah to to cut this story short um in in in a hypothetical world where you can deploy an L2 and you get Ethereum level of censorship

resistance and decentralization with that L2. Um h like that world we don't live in now. I think if we lived in that world, maybe Stripe would have gone that way and I think we can get there. >> Cool. Um I actually have to drop in in just a couple minutes. Um so I'll kind of give some closing thoughts here. I think that the um there's a lot of exciting things happening in Ethereum on the technology side, but none of it really matters until we can get it in front of users and in front of institutions. Um there's a lot of really great teams that are pushing for that. I think L2 beat is doing a lot of stuff behind the scenes that's super super

helpful on that side. Um I just want to shout out Ether Realize and all the work that they're doing with um Tried institutions as well. I think that um yeah, just final closing thought, we should all take a little bit more time to think about uh what Ethereum is doing that's bullish for ETH or bearish for ETH instead of um constantly comparing it to um to these projects that aren't even live yet. So, um that's my closing thoughts. Thanks, uh Ox Research. It's it's been great. >> Bye, guys. >> Awesome. Thanks for hopping on M team. Uh before we uh jump over to the next couple of topics, I'm going to do a quick shout out for our sponsors for today's show. Uh first off, before we get to the sponsors, uh Blockworks

itself, we are hiring a research data analyst. So if you live in SQL, you love onchain data and making sense of it, check out the link in the show notes and apply or check the QR code. Um oh, that's the new newsletter QR code. Sorry. Check the link in the show notes to apply. Uh we would love to hear from you guys. Actively hiring and data is of course the core of the Blockworks business. So um definitely want to hear from you on that. Uh shout out to our sponsors for today though. Apttos. Uh Bitcoin DeFi is heating up on Aptos. With nearly 400 million in BTC assets on chain, Aptos users can now earn yield on their Bitcoin via Echo ABTC and OKXBTC without the typical bridge risks and high fees. Thanks again Aptos for sponsoring today's stream as well as IEN

layer. Uh, is your treasury losing value to inflation? Learn how to make digital assets like ETH and Soul productive with uncorrelated protocol-driven staking rewards. For CFOs, DATs and corporate treasures, the path to integrating liquid staking and restaking should be riskmanaged and aligned with long-term strategic goals. The productive treasury report from liquid collective liquid collective and ien cloud outlines practical adoption and a forward-looking vision for the role of the modern treasury as a strategic enabler of new technology. Read the productive treasury report today by following the link in today's show notes. Thank you to today's sponsors. Uh let's jump back into it. I think Lewis M team kind of left us off there with a nice note. Um you started to jump into a couple of different ideas. Uh I think there's maybe two directions we could go here. One is

around this idea of like kind of where bridges are today, canonical versus sort of like third party bridging. Um as well as like this idea of how we you know measure you know giving scores to things and using those as like targets you know when it comes to L2s and rollups specifically it's like you know today they're maybe stage one stage two and we want them to be some ideal target in the future. Um I don't know curious to jump wherever you guys are are most interested like this issue of you know canonical versus external bridge usage like why why so much dominance of external bridges and is this something that we see getting flipped at some point or is this kind of like an a harsh

reality you know inevitability that we just kind of have to deal with. Yeah. So maybe I will just add some context to our viewers because we at L2B actually have a framework to measure uh three different types of of tokens on L2s. So you basically have uh canonical canonically bridged uh assets. So uh the ones that use Ethereum as their main ledger, right? You have natively limited ones. So like stuff that was mentioned for for base for example that they issue their their their own tokens on on their own chain and externally bridge ones that rely on those either external blockchains right or using some third party third party bridges and maybe like

uh two quick um case studies. So like the first would be uh like the example I'm using is uh USDC on arbitrum. Uh so for example on arbitum you actually have three different types of USDC. So you have canonically breached one natively minted one and the one that is using um circle CCTP. Uh so like in case of arbitrum going down like like technically speaking all of those three would behave differently. I mean like USDC is already pretty permissioned uh by design but uh but yeah like in in terms of like if arbitro would go down in theory having such a stable coin uh

for if you would be the lucky one to have actually like the canonically bridged version you could probably just come back to Ethereum right and that wouldn't be a big deal for you h but if you would have like a native one that might you know look the same on front ended or whatever right maybe you don't know what's the difference between USDC USDC E or whatever. Uh yeah, you would be all of your assets would be lost slash stack right? >> Saber on Salana. >> No, no, no. >> Okay. So, okay. So, this is like some lower from several years ago. So, Salana used to not have any like natively issued USC.

So there were like like 10 different bridged versions and Saber was a DEX just for I was switching between like different versions of ECC and it was like really really bad because like having 10 versions of like one stable coin is horrible. Like sorry keep on going. >> This this was actually a great example. I I'd love to jump in on that. Like you know you you'd have to bridge over from wormhole and then they'd give you some you know XYZ you know prefixed USDC and then yeah you had to go and swap it for the some other one that was used the most in in the liquidity pool. So yeah, big it was a big big problem at the time for sure.

>> Yeah, I would say it's still a big problem right now. Uh like because like even if you look at our framework uh like technically you for example let's like use another case study. So like starknet versus facet right so startet I think everybody knows them and facet this is like this newer roll up that is technically stage two uh by our framework. Uh but the difference between those two even though starknet is stage one right uh like 100% of TVL on starknet is canonical. So like every single token on stark net is actually minted on ethereum and then breached back to starknet. So like in case of starknet going down you you will be always uh able to to withdraw uh in a per technically permissionless way. uh

and with facet right even though they are like stage two by design uh actually like every single token is externally breached right so like this stage two mark kind of doesn't mean anything in their case right so that's also what we uh try to explain to all of those straty guys or or users uh that's also part of our work to actually make sure that they understand those little differences here and there u yeah and I think it will become more and more important because you can actually see that a lot of those L2s have outages. So like I think like uh you know starknet had one uh not so not so long ago that there was like uh

an outage on scroll and so on so on right. So so uh I think people will care uh what type of those assets they are actually using. Uh maybe it's a bit technical for them but but we will try to uh make it more digestible to them. Uh yeah, but uh I would say that like this this score by by Louis here is like very much very much needed and that's something that is pretty much omitted but by uh most of the most of the teams right now and that's also why I think that uh this based plus native uh uh development is so much needed because uh why people are using external bridges

right to actually have those those benefits of uh of uh like you know bridging uh faster breeding uh like paying lower fees or whatever and also utilizing their uh like vast BD efforts. So like layer zero is probably the best example because you know why would you use like canonical bridge when you can actually use Stargate or whatever and get like some additional incentives on top of on top of that, right? So you can get an airdrop, you can like you know you can bridge to optimism using layer zero and get some OP tokens or whatever. So, you know, there are like uh there are like, you know, there are companies that want to make money, right? So, they will always offer you probably a a better deal, but you know, there's there's

always a a tradeoff uh for this type of uh things. So, so yeah, I think like everybody that is like interested should just jump on L2 to bit uh at least once in their lifetime and maybe just having a quick glance uh over all of this data that we uh that we present and kind of try to came up with their own conclusions I would say. >> I guess Huber in your opinion like what is like the ultimate design for bridging? Is it like canonical plus like a fast bridge like a cross on top of it or like in your like what would you recommend?

>> I mean like uh I will be able to answer this question very very soon. So like maybe like a little spoiler but we are actually redesigning the whole bridges section on L2B that was kind of forgotten uh till now. Uh and you will be able to check the origin of every single token uh what's which bridge they are using you know what is the what what are the trade-offs right and so on so on and we probably came up uh we will probably create just another framework uh for all of those but you know also I'm I'm credibly neutral and and I think okay >> and we will we will of course like like

we pages will probably give people like like very high level overview of how we think uh they should approach those those problems. So like I think like you know with roll apps we don't like tell people like what to do exactly. There's like a lot of different ways to achieve stage two right. Uh so I guess my answer is like let's wait for a month or two and then then I will be like we will make something as digestible as stages and and risk ro and you will be able to you know make your own conclusions on that topic. So we need need we need just a bit little bit more time on that.

>> Yeah. I guess the the big thing here to to focus in on is there's this at least as it stands today for a lot of a lot of cases is the sort of convenience versus risk or security trade-off. Um and and maybe the difficult part there is solving the convenience without uh sacrificing on that that risk or security part of the the puzzle. Um, I don't know. Do you guys have big thoughts there on, you know, how solvable that is or will the sort of like canonical solutions always sort of lag behind?

>> Yeah, >> I wouldn't say they lag. Okay, go on. Go on. >> Uh, yeah, I I would say um I mean I have like the ideal L2 bridge, right? Um and we when we talk about L2 like when we talk about the ID bridge it's very important to say that this is in the context of an Ethereum L2 because you can't do the same necessarily with uh like a bridge to Solana and then TON and so on right like like I think the real there will always be some fragmentation and some trade-offs made if you want your token to be freely transferable between any chain outside of Ethereum as well. But within the context of Ethereum like L2s were meant to be the extension of Ethereum and in the multi-chain world

around Ethereum right um there I think the ideal bridge design would be uh ZK um so every and canonical um so that means every asset gets issued on Ethereum that positions Ethereum as the decentralized world ledger that Vitalik is also now saying it should be it's not the world computer it's the world ledger now right um so that's very important and this is I mean in line with the L2 design is you use Ethereum as the final record of who owns what asset now you lock your asset on Ethereum into the L2 canonical bridge contract because you want to do application specific stuff with it on an

L2 like a payments L2 or or a private L2 or a per L2 whatever it is and um here is the problem of now of current day L2s uh you lock them up in these bridge contracts and these contracts are upgradable and owned by a multisyc for various reasons. Um that's the first issue. So goodbye like like Ethereum is out of the picture to be honest at this point. Like if a multisc is owning that brush contract like it is nowadays on a tools or a security council there's various of course degrees of security that these multis afford right there's there shades of gray here but uh still it's a multisc uh yeah so in the ideal case um this uh is not a multisc anymore. It is in the

ideal case a smart contract from a rollup that has a rollup state transition function that is natively executed on by Ethereum VL1 that's like a native rollup and uh that has instant decay which Leland and the CING team are working on instant decay would be the ideal bridge because um actually when you deploy a rollup on Gelato or another RAS provider um picking a bridge is is also like sometimes s annoying because you have to work with these third party brick provider teams. You have to get them to be interested in your rollup and normally you also have to pay them or some to to even deploy on your rollup.

What they give you in turn like layer zero for example, they're probably the best at it. They give you instant bridging from into your rollup and they give you this nice network of of routes. Um, right. So that it's it's often a good deal for teams, but at this point they're they're definitely not like these assets that come in via layer zero of TS or something, they are not secured by Ethereum anymore once they enter your roll up, right? Like so you've given that up completely and ZK sort of instant ZK removes the need um for this because now um you can instantly deposit into a rollup and you can instantly get your money out of a rollup and if you

build some fancy contraption on top of it like egg layer or something you can now have instant bridging between these rollups and this is not done by like let's say a layer zero server anymore. um that uh like you know is very much unsecure versus compared to Ethereum and ZK it's all done by Ethereum and ZK right that's the ideal bridge for Ethereum I'm saying for Ethereum here because layer zero will continue to exist in this world because they will be happy about this this is the ironic part they would love this because they don't like to have the liability of all these assets on their server that's a huge liability for them and layer zero will continue to exist because there will be many chains still existing outside of the Ethereum ecosystem system, Solana, whatnot. and layer zero will build build

rappers on top of these and liquidity on top of these tokens and they will say look on Ethereum I'm using these routes um for max security at least token issuers can make that like they can opt in to say look on Ethereum I want my my assets to be secured by Ethereum but then when I go to another chain uh I can do like I can use a a cross or whatnot to go into the same token representation on another chain that isn't secured by Ethereum anymore but now by some other security model. So, so yeah, like bridging is a like uh it's it's for L2s, it's really all about bridging. Um, which is also an interesting question like that I can open up later maybe if we just discuss sovereign roll-ups as

well, which are the polar opposite to base native CK rollups I would say. Um, uh, because there you don't really have an enshrined bridge anymore like you do on an O2. And there's a question of like it's an interesting question like what bridges will strive have, right? like will Stripe have a bridge to Ethereum, will they have a bridge to Solana? Um or will they just issue the only their own stable coins on that chain and that's it, right? Or and maybe use circle CCTP um uh yeah or USDC. Now that you mentioned like USC, I I think there's a fun question like USC used to be canonically issued on many rollups and then they invented CCTP

and then they're like okay like no need for canonical issuance anymore. Um I I wonder like if you have instant finality on all rollups, will Circle ever go back to you issuing like issuing via the conical bridge? But I think like now USC is so prevalent across like so many chains like it may be unlikely unlikely for them to ever move back. And so I think there is like some urgency to push like advanced ZK technology even faster.

So you don't have other really big stable coins saying like oh I'm just going to create my own bridging standard because so much distribution that like having their own bridging standard like makes sense for them. So I think we have this impetus to like move as quickly as possible to like accelerate the technology before more really large assets decide to like build their own custom bridging or use CC CCTV. Yeah, maybe maybe also add that uh yeah, I think everybody agrees that you know ZK ZK is the way and then based and then native. So like kind of if you look at it from a certain perspective, you could tell that we are we we kind of did like the full circle back to the idea of like shards. So like I would say like the

native road apps in the future will behave kind of like like the initial uh ideas about about sharding. Uh so that's pretty cool in my opinion but uh I will also add that uh I don't like the approach that is I think growing very fast right now that you know ZK is will just suddenly appear and save uh all our problems will probably not agree with me here uh but because you know Primo not all ZK projects are are equal so like we asel to beat launched zk catalog recently uh and you can actually see that even using ZK tech as a rollup uh there might still be like hidden trust

assumption that make it not Ethereum level uh security anyway. Uh so so yeah so like uh like I'm curious what uh how sustain will position uh themselves uh like outside of just you know like op saxint or or maybe like you know like developing it further. Um but yeah, I don't like I I I think like we are still like at least like two or 3 years from from the basic conception of a of a native rollup and like the conception of like the scaling end game and only then we'll be able to kind of

uh like end or maybe not end but like like like start like developing the the last uh the last pieces of tech that we need. >> No, that's a good point. Like not all like ZK solutions are the same. There are like subtle like differences between them. Um and this is why like Eve really cares about having like multiple clients because like one client has a bug like the chain will hopefully not halt and they care a lot about like client diversity. This is actually relevant for the stripe chain very much just ones will not have multi-client of course like building one client's hard enough so like expecting them to have

multiple clients is just like not going to happen like even Salana like building multiple clients has taken a long time for them. Um, and which is also why for Ethereum like real-time proving like their goal is to have like two or three like ZKVMs like or well they're now like a dozen plus ZKVMs but their goal is to have you know two or three achieve like real time proving and like >> maybe it'll enshrine it maybe they won't but they definitely want to have like multiple systems out there all providing I guess like added security and so like I think like tao sort of the first version of it right they use like R0 they use SP1 they use TVs you want to combine is like much technology together to ensure your thing is like secure and like that one hidden bug doesn't take

down your system. That's true. >> Yeah, we had to add like a new slice on our pizza uh for their multiproofs, but unfortunately it's still red to this day. So yeah, there is like there are some some trust assumptions here and there all the time. So >> that's the pineapple on the pizza. >> Yeah. Yeah. Exactly. Exactly. Yeah. So I think at the end of the day all of the all of those teams are building very similar things. So it's kind of like you know chains and bridges, right? So there are like some executional environments and there are ways to move the assets around them and like move the value around them, right? And the the the chase here is to basically be the like to make make sure that Ethereum is the

first uh chain that will figure it out and yeah and and stay this this this uh universal ledger for for everything. So that's that's the future I want to believe in at least. But you know everybody is I guess uh allowed to have their own. So, Hubert, you said two to three years. Let's take the middle and say two and a half years. I'm going to hold you to that. Um, that's when everything is going to have a be, you know, some level of mature, but with the um, you know, with with Ethereum's northstar to scale L1. You know, you know, we're expecting block latency to go from 12 to six. Not any next upgrade,

not in the one after that, but hopefully in the one after that. um some some northstar that is but um we we're expecting that but I mean is that and and and then and then further block latency red reductions after that is that going to keep pushing what the definition of real time proving is um on on Ethereum are we going to get real time proving if Ethereum keeps cutting down the latency? Uh you know Leland I'd love to get an answer from your end or if it's going to change the pie at all. Hubert let me know. Yeah, I think like that like everybody that is interested in this topic should that should just probably first check if proofs uh then check ZK catalog and then just talk with

all of those teams directly because I think like when I was checking uh most of the ZKVN road maps I would say that they all have they all have like fairly similar ideas but they like you know one team is saying that they will do it in one year. The other one is saying that they will do it in five years and the other one is saying that they will do it in coming soon. So, so I guess that kind of that's a hard question to answer I would say. So, I don't know like maybe probably Land is the best person to speak here.

>> Yeah, I I think within 12 seconds like with our latest version like SP1 Hyper Cube, we were able to prove something around like 90% of blocks or 80% of blocks within you know those 12 seconds. And there are other teams that are getting like very very close like OpenVM I think earlier this week released their like GPU benchmarks and they can prove Ethereum blocks in like 15 seconds like if we look like a year ago like this would have been unbelievable like we just like the progress has been asmtoic and so I do believe like or the EF definitely believes that they can get real-time proving like end of year which from our discussions with them which is very ambitious. I suspect at least like one team will be able to achieve that

like doing like 99.9% of blocks or their like under 12 seconds and maybe give it a year or two faster executors like faster GPUs like you can possibly see it under six seconds. I think this is definitely achievable in the next or I think 12 seconds definitely achievable by end of year early next year in six seconds in like maybe in several years. Yeah, I just going to drill on a little bit more because I mean, you know, to Louis's point, this is like endgame. This is like super important for Ethereum. Um, what what you know, you can't do with 90%. 90% is not good enough in under 12 seconds because it tends to leave out probably the most economical blocks, right? Um, is 99, you said 99.99%.

Is is is that good enough? Is that the goal? >> No, I think it needs to be 100%. I agree. Okay. Um, it actually needs to be less than 12 seconds because you need to take in like latency of gossiping and stuff like this. >> Um, but there are things that Ethereum can do to make this like more uh to make it easier on these KBMs. Like for example, current like there's some EIPs that will have a cap on how much an individual transaction can use. And like currently how a lot of ZKVMs do realtime proving is they like prove on a per transaction basis. So if one transaction is really really big, it slows everything down. And so if you limit how big like a a transaction can be say like maximum like five million

gas or some arbitrary number, it actually does help speed up like proving time in the worst case scenario. and the EF is like seriously considering like does it make sense for us to like implement this EIP if it helps like real time ripping >> that's in the there's one in the fusak upgrade to to to limit that right um later this year I mean at least proposed um and then you said you know it's 12 seconds now roughly last year you said that would be unheard of what what was it last year and then like so I'm trying to get like an an idea of the trajectory that we're Yeah, last year is in the order of magnitude of minutes.

>> Okay. So, and is it going to be exponential growth from here or we going to like start to hit bottlenecks and be like linear slowly cutting off a second now here and there >> and it's it's it's really hard to say. >> Last year we're like wow this is really fast and we found some like tricks that we can do. I the lowhanging fruit is getting harder to solve, but like we're expo exploring like new proof systems and entirely new designs, so it's hard to say. >> Yeah, I didn't mean to put you on the spot there. I only asked because it's hard to get this information online anywhere else. It's very hush hush.

>> We we don't we don't know, right? So, even we don't know. >> Awesome. We can uh I'm going to do one more shout out for our sponsors and then we'll take it in one last direction before we close out today. Guys, uh another quick shout out to Aptos. With nearly 400 million in BTC assets on chain supported by a secure, fast, and affordable MBM environment, Aptos has become the BTC growth chain. Apptos users can now yield on their Bitcoin via Echo's ABTC and OKX's XBTC without the typical bridge risks and high fees. With support from Ekko, OKX, and STAX's SBTC, Aptos is the best place to go for best-in-class yield on Bitcoin.

Appreciate the support, Aptos, as well as IEG layer and IGEN cloud. Uh, corporate and protocol treasuries face a major challenge today. Cash and traditional instruments are losing ground to inflation. A new industry report from liquid collective and INECloud lays out the next evolution of the digital asset treasury. Moving beyond just passively holding Bitcoin to actively making digital assets like ETH and Soul productive through liquid staking and restaking for CFOs, DATs and corporate treasuries. The path to integrating liquid staking and reststaking should be riskmanaged and aligned with long-term strategic goals. The productive treasury report outlines practical adoption and a forward-looking vision for the role of the modern treasury as a strategic enabler of new technology. Read the productive treasury report today by following the link in today's show notes.

jump back into it. Um, if anybody had anywhere else they wanted to take that combo, but one thing I wanted to ask which I think feels kind of preient um, and maybe loops everything back together to this idea of of Stripe launching their own chain is, you know, I think we've been hitting some of these walls in the conversation here of like, you know, Mark and Leland going back and forth on, you know, how many years until real time proving is really, really, really real time, especially if if things continue to speed up. Same goes for like, you know, at what point in time are we getting, you know, native roll-ups that are actually, you know, live and real. Um, is there sort of like a a race and maybe a risk here when we consider some of these large institutions kind of coming on chain?

You know, you already have Coinbase, you know, exploring and and making waves with Bass. Robin Hood obviously is another big one. Um, and their sort of roll out and work with Arbitum. Um, and then obviously all the conversation around Stripe today. Um is is there something is there sort of a risk here from a timeline perspective of you know if if these you know sort of roll up and zk proving and other necessities to like really get this ideal system put together take too long um you know these large corporations and companies and other other players who might come on chain um are sort of forced or get stuck like you know they they choose to go a certain direction and then maybe that's just good enough um and there's not really a reason for um to maybe change

course at some point in the future. Um would love any thoughts on this like how we're thinking about it. >> Yeah, I think um there's I would flip it to there's a lot of opportunity right now that you know Ethereum doesn't want to miss. I'm sure um uh so it's all about the opportunity but sometimes I think we have to step away. We all like fully like working on crypto full-time, right? So we are all very impatient. Like a day in crypto is very long and a year is very short. Like it's crazy, right? Like and I think sometimes we have to remind ourselves of what we're doing here. We're literally revolutionizing disrupting the world of finance, the world of payments

completely like the world of banking. um we're disrupting that right and uh like this this will be a multi-deade up to a century journey because at the end of it the world will look very different to what it looked like before. So this is like a sort of this is this is the revolution of our time pro probably together with AI and um a one to two to three to four to five year horizon is simply too to too too short even though we like you know like two or three years in crypto seems like like a century right but in reality what we're building here and so on will will echo far into the future and it will keep being updated and it will take a very long

time to reach its final form at which point the old institutions that that we know today like Visa, Mastercard, Western Union and so on. Who knows if they will even be around to see the end of this revolution, right? Um so so this is what I'm saying uh here but there it doesn't mean we should be complacent. I think we should also have some focus in um in Ethereum and elsewhere and um uh yeah ZK there's always been talk that it's it's it's almost ready. Um, if you listen to Succinct, it's ready now and we now we have to put we have to put the pedal to the metal and prove it. Um, yeah, because you always need some early adopters, right? Like that that's always like the the hard part about crossing

crossing the the chasm. Um, I will say that I think there can be like if if let's say Stripe everyone they launched the L1 now, why would they move to L2s or some like a more Ethereum aligned architecture in the future? um either two options either because it will benefit them massively um because they will save a lot of costs this way and and increase profit margins. That's the the obvious one. The other one is because they will be almost forced to because the will be hacked, right?

And there's going to be zero days. I'm still surprised that we haven't seen a a major bridge hack in a longer time. But remember three four years ago the bridge hacks were common place like Ronan Bridge, Binance, Wormhole like massive hacks, right? Like who says that circle CCTP will never be hacked? That would be disastrous, catastrophic, right? At this point they they might reconsider having their own server attestation servers for bridging and going back to a a ZK instant bridging with Ethereum. That might be very compelling after such a hack, right? So two options uh either it will be cheaper for them and they will have higher profit margins or they will be forced to because you know uh around and find out at some point uh with all of this stuff and if we

proliferate this technology and everybody's launching a chain application chains and tokens and bridges this and this and that there's so many targets on our back and Lazarus will find them right like if they can do the bybit hack uh they can they can like that was a hard one right like they can they can I'm sure many of these chains that will launch will will have some some issues there. So, so I think these are the two vectors for for bringing people back to Ethereum. And what is Ethereum even doing? Ethereum is an exporter of censorship resistance and thanks to ZK of security as the world ledger because hacking Ethereum is impossible. Like it's not impossible, but we know how hard it is, right?

Hacking wormhole, layer zero, whatnot, all of these like chain link whatnot is is much easier than hacking Ethereum. So if Ethereum wants to be the world ledger, I think um then ZK is is the unlock to uh export assets on the world ledger to to chains with ZK which will and and you will still have layer zero and so on because um this will be the Ethereum chain system, the the most secure one. Uh but you will have other systems that aren't part of the system that still need to be connected somehow and they will have less security. Um but but yeah like I think it's an interesting question also to ask why like like you know does Stripe care about bridging? They actually explicitly

said they don't care about Ethereum bridging. I think we sometimes forget that the main purpose of L2s is to get the same pristine version of Ethereum on your chain right of ETH the asset. I mean and actually interestingly if you look at the data and nowadays L2 is why they have high TBL it's like ETH is actually like the amount of ETH on L2s is very small right so this already shows you that they are a much worse version than Ethereum is for ETH the asset um so like >> and the outflows are growing as well like since like couple months so actually >> like you know they are getting it's getting even worse >> the the ultimate test for L2 first and foremost is uh before we go to whether

Stripe uses or not like that's that's like the endgame, it's like are Ethereum holders using L2 tools with ETH and and that we're not even there yet, right? Like we we not we can't even convince Ethereum holders to put the ETH on these L2s. So we very long very long way to go for for inside the Ethereum ecosystem. Uh but yeah, like there's even a question like does Sprite want any canonical bridge or do they say no, we we simply issue three stable coins on this chain natively and all we need is these the ledger to be secured and we're building our nice little sort of valid data system for that, right?

um in this world uh I still think there would be better off being a rollup uh than being an L1 and and there's this little known um architecture called a sovereign rollup which which I call rollup L1 and the only difference to a normal L2 would be that uh you don't have a bridge um so maybe you also don't have ZK on a sovereign rollup because you don't need it because normally ZK is very useful for securing the bridge a and like like even in that world I would At the very least, even if Stripe says, "Look, we don't need a bridge to Ethereum. We don't care about ETH asset. We don't care about issuing our assets on Ethereum. We're fine with issuing them on our own ledger and securing them with our validator set." Um, like that last

part is I think whereas like you should still become a rollup and and use a more decentralized validator set like Ethereums or Celestia to s to uh to you know secure your rollups, your chains consensus and um immutability. Um, so yeah, like whether you need to become base native and ZK very much depends on whether you want to use Ethereum as the world ledger. And there's very good reasons to do that. You get a lot of security, I think, for cheap in the future. But even if you don't want to do that, even if Stripe simply doesn't want to do that ever, they should still not be an L1. They should still be a rollup. and and on the other extreme side of of like here you

have the the Ethereumness the base native CK version on the other extreme end of that spectrum you have a sovereign rollup that simply doesn't have any settlement client any bridge to another settlement layer but it still uses a consensus DA layer like Ethereum sovereign roll-ups are a concept invented by Celestia but they can very much exist in Ethereum as well um like Ethereum or Celestia to to not have to build your own validator set so like that's a no-brainer for Um, if Stripe doesn't want to become an Ethereum L2 for whatever reason, they don't need it or what not, there should still be a roll up, I think, on it on Ethereum if if Ethereum's DA scales a bit better for me because to be honest, Ethereum DA is very constrained still.

Um, or another DA layer that is more higher bandwidth already like Celestia. >> Yeah, I think my view on this is like there are always companies who want to like roll their own tech stack and I think this is like just like human nature. humans like enjoy creating their own things like whether it's your own blockchain or own rollup stack or built against something else like there are just teams out there who will like never use Ethereum never use Salana they were like we're going to build everything in house and like that's totally fine but then there's like a large category of companies such as Robin Hood who are like willing to use existing technology out there or like companies who are so who are maybe on the fence like should we go with Ethereum or should we Ethereum as in building an L1 building a

rollup etc. or rolling their own stack. And I think Mark has a really good point where more corporates are deciding go unchained. And the question is like what pieces of technology do we need to have out there to facilitate this transition? And I mean I would argue like if you have rollups that are very high throughput and this is actually sufficient. If you look at Ba Bass right now, they do, you know, 100 120 TPS. They have a lot of assets that they, you know, that are native to the chain. Like their customers were kind of oblivious to this. Um, I think the most important thing is just like scaling up like TPS

and having gigas for rollups. And then I think with that a lot of corporates will be like, oh, high performance chain that's like tied to Ethereum that we can inherit our assets. Perfect. like this finality stuff doesn't really matter because we'll have our own like custom bridges and like because we're big enough like people don't necessarily need to trust like people can trust us because we have like a great reputable brand in the system. I think for some like random roll up like ZK matters a lot because if you're a random roll up like who are you? you don't have a name, you don't have a brand. Versus like for Robin Hood, like oh, if all the bridges are trusted, like users already deposit, you know, $100,000 into the Robin Hood account, like if you already if you already trust them to hold $100,000 for

your brokerage account, like you also trust them to like bridge money across too. And so I think like the most important thing is just like having higher throughput roll-ups. I think ZK is definitely a great nice to have and sometimes essential for more emergent uh users that like don't have as of a robust brand in the space and also you know ZK makes life much easier for developers too by having fast bridging of course. >> I think it's a good point. I just quickly wanted to say like for me um blockchains are inherently B2B technologies. I I I don't say that a user will ever know or willingly knowingly select I want the native base

whatever thing. No, please. Like no way. Right. But but um a company like Robin Hood or even big banks sometimes we think these guys are flawless but big banks are losing hundreds of millions of dollars in mistakes, frauds, hacks every year. Like billions of dollars, deca billions of dollars. So they they will eventually be the ones that pick the technology that reduces the their risk and liability I think right like so it's not so much a question of whether a user trust Robin not or so it's more a question of does Robin have a way to to protect the risk and reduce the risk and and even losses to hacks and frauds I think and that's where um ultimately like blockchain decentralized blockchain

technologies also really shine I mean we know most centralized bridges and exchanges at some point were hacked um But Bitcoin, Ethereum, never had a hack, never had anything stolen. >> Well, I mean, there was like E Classic for a reason, but that's in the past. >> That's a smart contract hack. That's not a blockchain hack, right? Like, of course, smart contracts get hacked all the time. >> Yeah, great shout out. I think um I agree with you Lewis on um this point around at least today there are certainly there's a certainly a big like cost and effort tradeoff to launch and bootstrap

uh a brand new layer 1 chain versus just shipping an L2 or rollup somewhere um anywhere really whether it's ETH or not but of course the resources on the EVM side are quite massive at this point uh in that space so yeah when you consider you a a corporation maybe getting into like you know an experimentation of launching some onchain ecosystem or apps. Uh it seems like from like a raw cost and effort tradeoff that it would just make sense today to go and do that in a you know in an L2 rollup manner or if it's an L3 or you know what have you.

um in the the most simplistic and and probably one of the cheapest ways to do it today rather than bootstrapping an entirely new chain. But um yeah, I guess for and I think you mentioned this early on in the in the pod, but you know, for Stripe, for Paradigm, since this is sort of like a co-led venture, I guess some of those other aspects that um that are frequent talking points within the space at least um you know, is there going to be a token? Is there sort of maybe going to be an L1 premium associated with that? Are they maybe looking for, you know, to get that attached valuation to this network by launching a chain like an L1 chain versus doing um a rollup or some other design? Um maybe those are swaying their decision at this point in

time. Um, and maybe those factors don't play as as large of a role in the future if if things continue to shift from, you know, constant new L1s with big high premiums and big, you know, big dollar signs next to them versus, you know, maybe more apps or more chains or more corporations um, just launching a, you know, quick and easy cheap solution um, via a rollup or, you know, whatever that that simplest and easiest expression is versus, you bootstrapping and building an entirely new network.

>> Yeah, I I think uh I mean you would expect someone like Stripe to launch an L1 because they can actually pull it off, right? Like I mean they could also make this L1 really decentralized like Solana has done this um right like um so Ethereum is not the only network that can build like a decentralized blockchain. There's if you have the distribution, the money, I think you can you can build it. um um probably not to the same degree that Ethereum has um but um but you can at least try to get closer to that. Um so I like I mean smaller projects they should always launch rollups L2s because they simply can't like don't have a chance of of

building a proper L1. I mean at some point if you don't care about decentralization censorship resistance at all then you like Ethereum also shouldn't matter to you because Ethereum is all about that. Ethereum again Ethereum exports censorship resistance global censorship resistance I would say that's the main export. Why is that interesting? Well, it allows um businesses and um commerce to oper like to span multiple jurisdictions um and to have like a tr truly internet global commerce and permissionless innovation happen right like it's a it's a sort of big picture thing and it's therefore the world of global payments commerce uh social media whatnot right um so I think a big company like it's

totally like makes sense for them to to think about an L1 because they they probably have a shot there. Um the question the interesting question for me is at what point are rollups and L like and L2s right like again they're not the same thing per se L2s are roll-ups but there's also L1 rollups like sovereign rollups at what at what point are they more interesting even for the companies that have these massive budgets um and that could pull off their own L1 and for me that's simply when they can achieve like what is Stripe pursuing again like they might like they might just be chasing an L1 premium. I don't know, right? But technically, anything that they said like their batch paying, whatever application specific

optimization that they did, this has nothing to do with L1, L2. That's like an VM customization and you might as well take that VM and make an L2 out of it, right? Like the L2s are execution environments. Like I mean the oldest L2 was like Stark X or something, right? like like so it's L2s support any custom execution environment any highly whatever parallelized whatever payment system you can make the SVM the Solana virtual machine into an L2 like Eclipse has been trying to do and so on right like anything goes on an L2 the only issue is for an L2 you then also have to build the the proving mechanism and that can be a bit harder for fraud proofs for sure like OP and arbitron all built very custom implementations to get fraud

proofs done I s are synced with SP1. They actually have a generalized prover for rust. So maybe you know even that will be easier in the future. Um but uh but yeah like ultimately the question here is if you truly want to build a decentralized global system that is much better than Western Union, Visa or whatnot because it's truly decentralized anywhere any anybody on on the globe um can like treat this as the world ledger and they know that they won't be arbitrarily censored by a validator in that system.

uh if that is your goal then then then then Ethereum is is has should have the right solutions for you. Um and I believe Stripe actually wants to have a shot at that goal because that's the biggest goal that they could chase, right? Uh and it's true that Ethereum L2s right now simply don't offer Stripe a clear way like right now to build that. it might be seem easier to them to just try and build it build it from scratch like consensus network layer based I mean but in a hypothetical world where Stripe can get the highest degree of decentralization at a much cheaper cost of investment that than what they have now uh then I think that would that if that was clear to them evident to them then the the calculus is very

simple like if they're honest about their goal to be a permissionless global payments layer which I think they're honest about and Ethereum can get them to the end state of that like the most decentralized uh state instantly, not progressively like they're doing now and for a cheaper cost than spinning up their own validator network. I don't even know how these validators work. Is it proof of stake? They said they don't want a cryptocurrency token. So, are they going to be paid by dollars? How is that going to work? How how how are they getting paid if if transactions are zero? None of these things are answered for me at least right now, right? Like we'll find out. But if if they want to have a robust global system and to be fair to Ethereum, Ethereum is that, Bitcoin is that, right? Um uh then I

think eventually there is a moment where they will reconsider their choices and um right now is not that moment. We have to be honest to ourselves. Ethereum simply isn't ready for that. Uh right. And um we can get there. >> Awesome. Uh, I think we can call it there. Good close out from Lewis. Um, what I'd love to do though is, uh, Lewis, Leland, Hubert, if each of you guys want to just do a quick shout out if you got stuff coming up with your respective protocols, projects, um, that you want to shout out before we close out for today. Um, it was great having you on and I'll I'll kind of roll out the red carpet for you to, um, say your

piece. >> Yeah. So, we actually have a new ZK rollup going to mainet later this month. So, we're really excited and hope you guys use it or interact with it. And then also we're short we'll be shortly releasing a new version of SP1 in the coming months. >> Yeah. So, so for us uh that will be uh two new sections on L2. Uh so the first one will be dedicated to specific uh stack ecosystems. So like you know opt orbit orbit and so on so on. Uh I think uh you will like it very much because you will be able to very easily compare

uh those stacks between each other. And the second uh is uh this new framework from uh for bridges but this will come uh a bit later. H not sure if this will it will be this year but we will do our best to achieve it. >> Yeah. So on on our end same old you can launch your uh L2s and rollups with us whether it's Arbitum OP all the good stuff. Um you can use our uh pay master bundler 7702 systems if you want to build cool onchain smart wallets um gasless wallets account abstracted wallets all of that stuff um and in the

rollup land we've been working with the succinct team quite closely and uh I think you can expect gelato to have some sin power zk rollups in the not too distant future as well. um we will contribute to that and uh yeah we've also been experimenting with based uh roll-up technology um and there will be some exciting announcements about some of the bigger customers that Gelato has that are also interested in becoming based Ethereum rollups and we're helping them to get there. So, so yeah, that's that from my end. And again, I'm just chilling. I hope you guys can put it into the podcast notes, the show notes.

Uh, my Ethereum settlement score, revitalizing the roll-up centric roadmap post on ETH research and also the Block Works article that Mark wrote that is referencing that. >> Yeah, drop uh drop that link over to me afterwards. We'll make sure we get it in the uh the pod notes for sure. Um, but otherwise, awesome. Thanks so much, guys, for coming on today. It was great discussion. Um really appreciate you all making the time. Um but otherwise we will see you and the viewers next time. So appreciate y'all. Have a great weekend. Uh certainly touch some grass.

You I think Lewis, you commented on it. Uh days in crypto are very long. So it's great to uh get away from the screens and uh if you can touch make time to touch grass, definitely do so. So uh awesome. Everyone enjoy your weekends and uh again it was great having you all on. Appreciate it. Thank you very much guys. >> Thanks everyone. Bye. See you. [Music]