Vitalik Buterin: Ethereum – State of Affairs After the Merge #467

Transcript

welcome to epicenter the show which talks about the Technologies projects and people driving decentralization and the blockchain revolution I'm Frederica ants and today I'm speaking with vitalik butre and about ethereum the General State of Affairs and where everything is headed before I talk um with vitalik though let me tell you about our sponsor this week Teddy ho is an open source wallet redefining the wallet as a public good with Teddy hoe you can safely connect to D5 and web3 with everything you need from metamask plus a lot more you can view your nfts in a wallet across ethereum polygon optimism and arbitrum and you don't actually have to manually add these networks they already come

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and download the wallet and for epicenter we're hiring we're looking for a community manager to help grow our audience and take epicenter to the next level if you're passionate about crypto on creating great content we want to hear from you look look for the job description and details in the show notes and please also show with anyone you think might be a good fit for this and now without further Ado let's go to the interview with vitalik that was recorded at Defcon 6 in Bogota hi my guest today needs no introduction uh I'm here with vitalik um vitalik thank you so much for coming on fscent again thank you so much it's

good to be here again fantastic um we have an hour and I want to dive right into the meaty stuff I hope that's okay sure I love the meaty stuff I mean I prefer fishy stuff but you know meeting stuff is great okay um we will get to the fishy stuff later so let's start with meaty so uh the state of the network and credible neutrality so basically if you go to Mev watch dot info it currently shows that over 50 of blocks um are actually ofak compliant I.E censored um what do you make of that it's a concern um I mean I think uh it is important not to overstate the concern though right because uh censorship resistance is what I call a one of entrust model right so

if uh 50 of blocks are censoring that just means that a transaction that's being censored by them which just needs to on average weight two blocks instead of waiting one block and like you know even if a 90 starts censoring it will just have to on average weight 10 blocks instead of one but at the same time like it's also not a non-problem and it's uh definitely yeah importance for the ecosystem to start pushing against this more and come up with ways of uh reducing the percent of blocks that are censoring in the improving uh Trend the guarantee as the transactions have to get into good reliably right so I think the most near-term thing that's going to happen in that regard is Mev boost is going to have a transaction

inclusionalists added to them right so this is the thing that also has been called CR lists sometimes but the basic is that the block proposer provides a list of transactions and whoever provides the full block as a builder would be required to include those transactions or also the proposal would not accept it right and what that does is it kind of brings us back to the world of uh a world very similar to what Mev gas did before the merge right because uh whatever you guessed I did before the merge is it did not provide full blocks right it provided what's called bundles and bundles are collections of transactions that can sometimes take up a full 30 million gas

but very often they do not and if they do not then the miner at the time you know had the ability to just add whatever transactions that they want on top and if there were any transactions that the bundles were censoring then the miners could just uh what would even by default basically end up adding them right and the reason why that architecture did not carry over to Mev boost by D fault is basically because there was a desire to reduce the trust dependencies right because the way that Mev gas worked like was really centralizing in a lot of subtle ways right like it basically yeah required miners to be trusted right because uh if you put a give a bundle to an untrusted

Miner then or to a malicious minor then that minor could do what's called ABV stealing like they could figure out what strategy is being used to extract the media in the bundle and then just like search and replace the address collecting profit with their own and just take all the money for themselves right and the trust based approach to mitigating that is basically well you know only a few kind of big shot of wheat miners that people knew and trusted would be yeah whitelisted to participate in the system which was like a clutchy compromise for them for that moments but it really kind of sucked and you know Mev boost was designed without that idea in mind precisely because we don't want to be yes centralizing in that way right and so it's much harder to create a system that gives proposers freedom to choose

transactions for the purpose of uh censorship assistance but without giving proposals the power to do MVD stealing and so the simplest any approach to doing it was to just not bother with giving proposers any kind of control at all and just do all what's called Full block auctions right where the Builder just decides everything and that was MVP boost 1.0 the next version has these inclusion lists for the transaction Center specifies a list of transactions and then the Builder can add their own they can reorder transactions but they can't like remove the ones that the proposer included and so that way we get back to this world where like it doesn't look quite the same because it's like you don't have the proposal literally

adding the transactions to the end it's like the proposal provides them as a list and then the Builder chooses the order but you know it's still a different type of a partial block auction and proposers can't say you know hey I know about these and I absolutely wants to get them included right so that's the first step and there's more steps that are going to happen after that too you said that you're not worried about like 50 of the blocks being censored even 90 would would be okay where would you draw the line because I mean it's kind of a slippery slope no it is well I mean I would not say 90 is okay right I think uh I mean the optimum is um you know close to zero right and uh I think the question is not a kind of binary okay versus that okay the question is uh

if it happens what kind of response are we willing to do to try to change the situation yeah right um so like one example of a response that I think would be too much right is you know doing what's called social slashing right like which is this meme that I think has actually gone too far and we needs to be yeah you know really really careful about I think about saying those kinds of things because we don't want ethereum validators or cordovs to become a kind of general purpose morality police but the basic idea would be like do a hard work that you know deletes the balances of validators we decided censoring like that's just uh but that just kind of cuts through you know way too many norms and like it's emotionally appealing

maybe but it's just a like it's just totally the kind of the wrong tier of escalation given the actual seriousness of the situation right which is like medium but not fatal um so the things that I do favor is uh you know working harder at these uh a kind of better Mev protocols if necessary yeah you know trying to re like socially leaning on um you know specific stakers and validators to and you know not use censoring technology is even trying to you know give uh grants to and subsidizing Alternate Builders and ultimate relayers like there's a lot of kind of ecosystem level um you know tools in the toolbox that I think we really should be using and you know if

the percent censoring goes up to 90 then you know we should obviously be you know using even more um but it's uh oh no I like I'm I just optimistic that things are going to improve quite a bit even after some simple hearing measures let me ask a question to kind of uh dig into that um do you think meditation should have agency because I think basically if you if you decline that right if you say like they're just um they're just a relay Network and they should have no opinion they should just you know be switched um do you believe that or do you think it's okay for them to be opinionated it's a complicated topic I think

different people inside of the ethereum foundation even have different beliefs on this I think our general approach so far has been to try to make validators as dumb pipey as possible um and you know basically have them just uh you know ideally run up run a piece of code that listens to the map wall figures out which transactions they include you know works with the uh some kind of Builder auction mechanism and then just chooses blocks um and you know the the benefit of uh validators being a kind of maximally yeah dumb pipey is like one is just um you know more more predictability um another is um that it just it makes it easier to

run a validator because if there's an expectation that validators like a validator becomes this kind of um you know even part-time job where you have to actively seek out lots of things and make judgments then like it becomes an intense thing and that's just going to drive more people toward pulling which we want to avoid right so you know we do want like being a validator out to be kind of as a low Resource as possible and that's uh you know both in the sense of technical uh resources and Hardware but also in the sense of Human Resources right so that's kind of the uh why validators should have low agency take the Arguments for why like at least the opportunity for Agency for validators

should exist is basically because like they are a second line of defense and we should use it right like there is some mechanism that gives um you know censorship or resistance by default because we did economic analysis and math that says that you know blah blah the equilibrium is that in order to prevent a transaction from getting in for n slots you have to pay you know like n times 100 or N squared or whatever um but you know if it turns out that like whether because the math is wrong or whether because there's like some outside the model thing that we didn't realize that ends up not working like it's really valuable to have the second line of defense where the portion of validators that are willing to um you know both uh kind of be more proactive and potentially sacrifice some

profit or kind of have the room to a kind of wiggle and I'm going to make sure that the Network's guarantees are kept up right so that's the case for I mean like not demanding validators to be yeah needed but at least you know giving them the room to be opinionated if they yell wants to be right so I think it's uh a balance between those two um in principle one could think of technical ways to kind of enforce um validators to not be opinionated for instance kind of you know in this shutterized Beacon chain scenario or you know commit reveal schemes what do you think of those yeah and so I mean the challenge I have with a lot of these uh like

threshold encryption based schemes is like the reason why I don't trust a threshold encryption is because threshold encryption has a 50 honesty assumption and it has a particularly Insidious 50 honesty assumption because 50 could collude to reveal all the information completely undetectably right like if 50 in a threshold encrypt NPC secret chair whatever you call it and just um you know all decide to send data to the NSA because the NSA leans on them then like there is literally no way that anyone is going to find out about this and you know they easily could run some sub protocol that kind of starts filtering particular things right so like I mean I'm like I'm generally yeah you know suspicious of honesty majority

assumptions and I'm always big on you know having career paths to recovery even if um you know dishonest the majority has become the case but like this just feels even worse than honest majority assumptions where in in order to do an attack like you know you have to actually do something visible on the network right so like that's uh the reason why I'm a kind of skeptical of those particular Solutions and you know even on all your two networks right for example like I think uh you know even among flashbots people a lot of them tends to even like prefer sgx to committees basically yeah exactly for that kind of reason right and you mean creating like making sure that it's

possible for layer 2 networks that do that sort of stuff and like maybe act as decentralized Builders uh to exist is uh I think definitely interesting um there I should also mention there are other ways to force uh like validators in their capacity as proposers to be unopinionated that don't involve like threshold stuff so Mev smoothing this is uh Justin Drake's favorite idea is probably the biggest one there right the idea there is basically that uh a tester's by default um like if they just see that a proposal uh voted on a yeah or accepted a bid that is um like significantly cheaper than the actual winning bid then they would like act as though that blocks did

not actually appear right so like they would basically treat a sort of non-optimal bid acceptance as a kind of um invalidity or unavailability condition which is uh I mean interesting and uh potentially sort of scary and unknown unknown way in ways in different ways because like that also starts making a testers be less down pipey um and it also like it does go way down the spectrum of removing agency from proposers right where like even where even if profit maximization kind of stopped working toward the yagova of censorship resistance like they would just not be able to do anything it's like I I counteracts that and so

that's but you know I'm sure Justin would have a kind of other arguments in favor and you know if you talk to him I'm sure he'll you know he'll give great arguments so I think uh I think stepping back a bit there's just uh you know lots of different considerations like lots of uh strategies that are still up to debate and so I think in the short to a medium uh term we want to take approaches that are forward compatible with as many likely paths as possible uh just so that you know we don't end up taking a particular path and just realizing like oh my God we just uh you know typically screwed ourselves and then wasting a year on going back if it ends up leading to the chain censoring really heavily are you worried that this

will progress in ways other than the number of blocks being censored so for instance what I could imagine is that um a test as all of a sudden say look this this block has a tornado cash transaction in it I will not attest to it and I mean obviously that would cause you know a whole different set of network problems right okay well so one very subtle thing about a tester is that I think people don't talk about enough right is that like you there's the the legal bar to preventing uh you know speech and you know even including a kind of you know speech study is actually about computer programs is high but the bar to compelled speech is way higher right and as a detester you actually have three options one option is to attest to the uh you know the block that contains controversial

transactions the second is to attest to the main competing block and the third is to not a test at all right and I'm not aware of any legal argument for why the second would be mandated the third is always an option right and once you start you know not a testing at all then well there's different ways you could do it but you could start not just you know being quiet until the uh until a censoring block or a daily block containing controversial transactions I guess I I confirmed and then you go back or if that becomes untenable then you know as an elder you just exit right and I yeah I do think that a lot of Staker and even the the big staking pools they are well-meaning and you know if it comes down to it and they get winds are not that hard a lot of them would be

yeah willing to uh just exit and leave but you know if they don't then like the good news is that we have a very kind of queer uh technical definition of like what it means to be yeah to be like kind of attempted 51 attacking the chain right and that attempted that definition is basically if proposals that appear on time get uh do not become become part of the canonical chain right so if a proposal appears on time uh but then other blocks start winning then like clearly the majority of a testers did not vote for the head that they were supposed to vote for and like that's the situation where you can uh you know you can start doing what kind of user activated soft forks and inactivity

leaks and you know all kinds of these uh kind of more extreme mechanisms I hope they never happen I hope so too but I think like it's good to have them I mean it's it's kind of like nuclear deterrence right in the sense that like having a very queer story about how to respond and like it itself may may well be the deciding factor in ensuring we never have to yeah absolutely it's kind of like they make a shutdown you you know that in principle you could trigger it um so you already touched upon it me how much of a problem do you think it is and who should solve it is interesting because there's many kinds of Mev and like some of it is a problem and some of it is not a problem and some of it is a yeah problem of different

kinds right so I think there's different classes of Med problems that people tend to identify right so one glass of problem for example is just like outright exploitation right so I send a unit swap transaction I want to convert one eth um you know 1200 uh usdc and uh someone um you know some Mev Builder front runs and kind of does a sandwich attack where they sell some a us some youth first and then they buy back at the end and I mean I get like five percent less usdc right so that's one example of Mev which is like completely harmful and it would be cool if like somehow it could be eliminated entirely right the second kind of

Mev is Mev that is to some extent unavoidable and is probably even benign so one example of this is just Arbitrage right so like if uh you know in the most recent block on unit swap the East usdc price is at 12 20. uh but then within those 12 seconds um you know the price on binance or whatever shot up to 12 27 then you know you could do a little um you know unit swap trade make kind of get that transaction as the first transaction on the next block and then you do the you know so you would kind of buy up a bit of ether then you'd sell some Nissan binance and like you know and make a couple of dollars of Arbors Rush profits right so that type of Mev is uh like it's not an abuse of anyone

and it's even good because it keeps prices synchronized but it's Mev in general still leads to this issue of economies of scale and block production right where you need sophisticated algorithms to produce optimal books and these algorithms change a lot and like we really really don't want proposers to have to you know like update their software to stay in touch with all of these uh you know algorithms that are trying to optimize mevm and the solution with uh you know PBS whether it's kind of Mev boost style extra protocol stuff whether it's ethereum protocol stuff or whatever is to try to like you know create two different classes of actors and try to again if keep Builders as

decentralized as possible and try to ensure you know censorship resistance even sorry keep proposed to be such as possible and try to ensure censorship resistance even in the case where our builders get very centralized yeah and I mean we've we've kind of we have been seeing that Builders have gotten very centralized right yes so uh do you think it's it's um a problem that apps in principle have to solve do you think this is on the app that the user because obviously to a user and first of all any one User it's not usually not that much money I mean it's like a percent or so in that is a lot in aggregate but for every single one it's not that much um do you think we should make the daps understand that they have to build a

process that is Mev resistant in the best case so I think uh like we can't count on Old apps uh becoming uh you know good from an Mev point of view because there's just like there's always going to be dumb developers somewhere right and you know those dumb developers are going to cause like you know base fees flats and Mev and all sorts of things and the change just needs to be able to absorb that right like if the chain can just be you know taken down by a couple of idiots that use a bad auction mechanism to sell their monkey has done like it's not actually if you're a robust chain right but from the app the interesting question is like from the app's point of view like is it I guess more socially optimal for the apps to take charge on

reducing or redesigning themselves to reduce Mev because that's in their interest or is it better to have some kind of you know more like more abstract higher layer possibly protocol level possibly some middleware that prevents that value from again disappearing or into I mean you know exploitative maybe the actors hands or whatever yeah and I think there's uh the interesting thing is that both paths exist right so like just continuing the unit swap example because I think realistically uniswap style things are basically are like 90 of the Mev that's uh going on like generally with the exception of spikes like um you know there was that like Zen thing that

uh pushed the BC up and I'm not sure what that what that even is and then like the the monkey thing that caused like 60 000 each try to get burned earlier earlier this year and so forth but in the unit swap case um like one approach is the cow swap route right like you make a better alternative to unit swap where the order is an off chain object and you first make a best effort on off chain matching and if for the off-chain matching doesn't happen then as a backup you go on chain and you do the swap right so that's a very Mev minimizing architecture because in the average case you get an off-chain Swap and so there isn't a way to like make money by sandwiching or even back running it right so now we could also consider the other strategy right so

let's uh just for the sake of example remove sandwiching right and let's say the sender sets a slippage of zero and what's also you know let's say it was fancy account abstraction and some you know far future it becomes safe to have a slippage of zero because if that transaction doesn't get it included like you don't even have to pay a fee um so you know nobody even will bother to include it the other thing that happens is back running right so like if for example I'm selling I don't know 100 eth and converting it to a usdc that trade by itself might decrease the price of each on the amm by let's say two percent right and and so on average I'm losing uh one percent on the trade so what happens is that creates a back

running opportunity right that basically means that after my trade the price is uh two percent out of balance and so someone else can come and make a unit swap purchase in the opposite direction uh to buy back some if and then on binance they can go sell some if and uh you know they can make an Arbitrage profit that is uh assuming optimal everything uh going to be equal to the yeah one percent uh slippage that I lose right so what you could do is you could potentially come up with some auction mechanism where you know using weird fancy stuff um you could yeah basically say yeah you know oh basically find a like auction off the right to learn about this opportunity to

background me and in an optimal auction that would get sold for uh um you know close to the uh the the one percent that I lose and so I will I as a user would get most of the revenue from the auction and so I would get most of my money back right so both of those strategies are legit and both of those strategies could maybe work but that second one requires you know a lot of uh fancy infrastructure work but on the other hand it doesn't require per application work but then you know if you do the per application work then it's like harder on each individual application but you don't need to do things to kind of complicate the de facto protocol Stacks that people use to

send the transactions through to ethereum so that's how I view the trade-off I guess the guy instinctive answer there is like apps would probably yeah take the responsibility on themselves to minimize nav in the short term and then in the longer term we can come up with these more kind of general purpose and all encompassing Solutions yeah I I like that uh idea how do you feel about um this attempted and in in in some way also successful narrative shift that you know the very smart people had like Paradigm and uh flashpads and so on pushed that basically um extracting Mev is good for the network because it secures it I feel like it's a really weird Spin and I

think people if if you onboard someone and you tell them about this this is not the the the uh conclusion that people usually would go to yeah yeah I mean I I get it like I get how like you know it's uh to an outside Observer like you could feel isomorphic to how you know Philip Morris has this uh lovely um ads and websites to talk about how they're making the future of um you know like a a post a cigarette smoking that's going to be much healthier or whatever and so the you know the reality is different but I guess the arguments from uh their point of from their point of view if I had to I think I would explain it like one Mev is uh inevitable and in particular if they did not step in to

try to extract that Mev in a reasonably decentralization preserving way then it would have been extracted in a way that's much worse right and I have heard things about how even a couple of years ago the reminding polls that were seriously looking into to having internal teams that would do Mev extraction and so if flashblocks type people never existed and never kind of democratized the media extraction then you know the argument is that the Mev the the big mining pools would just get more profitable because they have these fancy internal teams and that would just think centralized ethereum to hell and we would not even have an answer to this uh post merge and like even post merge everyone will just consolidate into the

biggest staking pool right so that's probably the iron of divide there right like to the extent so that Mev is inevitable it's like it's better that it gets captured in a way that preserves decentralization and is an open protocol and uh you know give is a neutral between um you know small stickers and big stickers but then you know the I guess the uh argument against that argument that's like well you know is intellectual energy being pushed into um a kind of optimizing Fair Mev redistribution that could have instead been pushed into making protocols that are not as Mev in the first place and that's like it's a good argument to have

and I think it's definitely good that there's a kind of the Skeptics in the community that are really yeah pushing hard and making the argument um but I think you know to what extent each side is Right ultimately ends up depending on like really complicated technical considerations right so like one example of a technical consideration is that let's suppose that we had magic delay encryption where you can encrypt data and it would be guaranteed that you know after six seconds so you know six times uh 9.3 trillion vibrations of a cesium atom or whatever the physics definition of a second is um you know the yeah data will get decrypted right then you could it like we would be able to very easily just you

know have delayed encryption baked into the protocol and then when you send a snar a transaction it would come with um you know some kind of snarks that proves that if it gets included it pays a fee and you know you'll get included and then everything else is encrypted and then one slot later it would get decrypted and that would be extremely MVD minimizing and that would like make everyone happy right but the problem is that there's all of these kind of technical considerations and like you know we don't actually have magic delay encryption and all the substitutes that we have are in perfect in various ways and so you know depending on how the technology sorts itself out I think the yeah and the result is going to be some combination of the two you said one thing I want to take issue

with okay do you think flashbots by and large has been a factor for decentralization in the ecosystem because to me it looks the it looks like the exact Converse I think they have so they have successfully prevented decentralization of the layer under them which is which is my stakers and I think that's really important because that's like the one thing that's much more difficult to reverse but you know on the other hand flashbots itself has definitely turned into a centralization vector and uh yeah you know they they have their own narrative about how this is uh going they really wants to improve this over time but I definitely think the community should also take charge and kind of push really hard for you

know both things like MVP boost and trying to support uh competing builders in relays and just like you know basically all of these tools in the toolbox to try to ensure a more distributed market and so you know I think that stuff's really important too cool yeah it makes a ton of sense um I'm done with the meaty stuff shall we go on to the fishy stuff sure okay fantastic um ethereum core development okay fantastic so um we all know you know the merge the search The Verge The Purge the Splurge I'm probably not the right order but did you know that rhyming is a veracity signal because it kind of it says to you oh yeah that makes sense that checks out our rhymes

I did not know that it's very convincing um so let's talk about the surge first so Deng sharding requires a trusted setup right right should you worry about that um I mean lots of people have different opinions I mean my opinion is that it's a uh one of Interest assumption where n is going to be in the thousands and so it's that's much less likely to be the thing that breaks than like 10 other things in the ecosystem but like at the same time you know I recognize uh both the uh like the fact that even that like one event assumption is still uh worse than a zero assumption and the fact that like you know people value aesthetic Purity and that is important and I do

think that it is uh it is important to try to move away from the interested setup based approach over time so I did do that deep dive into you know we looked into ipas at the Stanford uh events and then I did my deep dive into whether or not we could replace uh the whole thing with the arithmetic hash functions and try to like upgrade to snarks or Starks over them and the challenge is that all of the other approaches just have to too many trade-offs and you know they don't quite fit nicely in the same way and so it just feels like you know all things considered uh the kcg interested setup based approach is like the least bad of

all possible worlds and uh from each trust point of view you know keep in mind that like if like if we don't do something then the risk is that like the mentality will entrench that um you know instead of it being best to do things on Roll-Ups it's like oh you know it's okay to use external data availability committees and so you know if we don't like really take seriously the desire to have some kind of a good and you know very strong and effective by scalability on the ethereum bass player than like this other layer could easily get a kind of centralized and lose the trust assumptions in a way that's irreversible right so that's kind of the arguments for pushing ahead with Casey g4844 now

um there are I think a lot of things that we've done to try to make it be forward compatible with a speedy replacement uh with uh something better when the yeah time comes right so probably the biggest example of this is the point evaluation pre-compile right the idea here is basically that there is this pre-compile which lets you uh verify the uh kind of the evaluation of The Blob if you treat the blob as a polynomial at a particular point right and that lets you like that's a general purpose facility that allows ZK Roll-Ups to use blobs as a data source and it allows optimistic Roll-Ups to also use Point evaluations it kind of points to particular locations for a fraud proof right because fraud proofs these days

optimism and arbitrum both use multi-round depth roofs and so they can just uh you know focus on one value right but the nice thing about making that be a pre-compile is that it lets us seamlessly upgrade the cryptography that's used to manage the whole thing without Roll-Ups needing to change the line of code right so today kcg gets used and points evaluation as a kcg Amino pairing uh you know you provide a G2 element but in the future you know it's going to be maybe a Poseidon Merkle root maybe a reinforced throughout concrete and Mortal Roots some maybe a you know Poseidon over a 64-bit field uh Merkel route because I hear beside it over the 64-bit Fields is like insanely fast now and the cryptography is going to be totally

different but because Roll-Ups are going to use it through this black boxy way they're not going to need to even change their code at all and you know it'll be just done in this uh way where it's just completely yeah seamless for them and you know we can make that upgrade in a future hard Fork right so that's kind of both uh you know why we're doing the kcg thing now and also the roadmap for getting off of it once uh you know better snark technology really catches up cool and maybe let's talk about um the the road towards Deng sharding right so basically um back in the day um we thought that um shards would be smart and they would uh you know like have compute

um and basically the ethereum has kind of moved away from that um and uh it has C basically shards are now basically it's a data availability solution mostly right do you feel um how do you feel about that move because one could argue that basically the the use case for ethereum of distributed compute and this is proven whereas data availability is not and there's also other Solutions out there that could have been you know integrated right well are there though like the pro like shorted EDM execution is uh theoretically possible but uh doing it in ways that preserve good assumptions

is not really doable without working ZK VMS which is not something that we had before right because like if we just said okay you know we're gonna have 64 shards and each of these shards is going to have an evm inside of it then like there's a lot of complexity that actually multiplies right like one you have to have an in protocol facility for a cross-shard communication and you know Crossroad each transfers and all of that absolutely yeah um then two you have to deal with the question of like what if something wrong happens in one of the shards and it doesn't get caught because everyone only verifies a small portion of the data and if you rely on fraud proofs then you're adding synchrony uh asynchrony assumption to uh to the chain safety property which what if which like if we're willing to do that then like

what's the point of even having finality right if you're willing to make safety dependent on synchrony then we just give up on finality and you know just like you know block a test to block a test and we just like kill half of our consensus spec code and like you know lots of people would be happy um but with so with aziki snark some you know you just completely solve that issue because you actually would be able to like prove the validity of evm stuff uh happening in real time right but when the roll-up Centric pivot was made ZK VMS were still very far away and uh the ethereum core developments process was uh very yeah kind of type you know was pretty much you know like fully occupied with both you know the merge and 1559 and other things

right so like one of the reasons why I think we've been preferring a lot of these kind of outside of protocol approaches to a lot of problems is because like core developer bandwidth is limited and if we can solve problems and iterate on Solutions outside the protocol then it's just much easier than doing it inside um erc4337 um account obstruction is another good example of this right like the our strategy for account abstraction before was erc2938 which basically uh attempted to do kind of the same thing 4337 does except like sticking everything into the protocol and uh like adding a whole bunch of complexity into the protocol to verify you know that the verification process

of a transaction is not like accessing anything on the outside and you know this and that and that and it would have taken a long time for core dust Implement and it probably yeah I mean it would have delayed eip1559 and or the merge by um you know half a year or a year or you know some pretty crazy amount right so if you know but on the other hand erc4337 is this uh extra protocol thing it's something that exists um you know basically thanks to uh proposal Builder separation right like UOB builders that add the f4337 user operations into a transaction that goes into a bundle and because of that there's just been this lovely Community that's just solving it in a way that's totally separate from the core Dev

process right you know you have you know joov and jarur and the infinitism team and the Soul wallet people have been you know really stepping up at and and making an implementation and kind of popularizing and doing a lot of community work around it and there's multiple panels on it and like 4337 sort of really blossoming into this massive ecosystem and we'll even be able to deploy it on way or two is before layer one right and there is even a compelling case for it on Layer Two is because the signature aggregation feature of 4337 lets you uh you know combine all the signatures of uh of the accounts if they're BLS signatures into one and on roll ups the data is the most expensive thing and so transactions become like two times cheaper right so that sort of

stuff um like in the case of account abstraction right that's the benefit of kind of spinning things off into an ERC and Roll-Ups are the exact uh I think same arguments but for the yeah 10 times harder problem which is uh scaling right and I think it's been successful so far like uh the Roll-Ups are you know very mature in a lot of ways I mean you know obviously there are some things that are behind right like it has taken them longer than I've hoped to take off training wheels but you know some have right like the yeah some some of the starkware systems have taken off training wheels fuel has taken off training wheels and I think you know we are going to start to see a kind of partial removals of training wheels start happening over the next

year so you know the benefit of uh ding sharding as a whole is basically that you know it lets us split off the development effort and the problem core developers have to solve as a much simpler problem and the remaining work gets shunted off to a kind of very separate and increasingly amazing community of rollup developers and also it allows us to really keep the ethereum based protocol much simpler and you know get something out I think much faster it also moves a lot of the value accrual to like third party uh for-profit companies right this is true um there are costs to this and there are benefits to this right so uh I mean one

of the benefits is that you know if we have non-east tokens in the ethereum ecosystem then you know those tokens could contribute to public goods funding right so op is probably the best example of that um and uh I think you know they've really kind of taken the kind of theory and philosophy around public goods funding took a really amazing level but you know there's other examples of things like this in the ethereum ecosystem right like the yeah uniswap Dao has has a huge amount of funding in its uh independent from the ethereum foundation and so like that by itself has a significantly increased to the uh a lot of funding decentralization in the ethereum community um so those are benefits but the costs

are yeah like some portion of the adfe is uh definitely yeah you know goes to other people and uh some portion that could have otherwise gone dead holders but like you know [Music] I don't think East holders should be the only band of people who benefit from all these people's hard work you know sure Roy had a threat this morning on Twitter um talking about how basically if we took the base fee and didn't and wouldn't burn it but instead kind of put it towards roll up like if you're in Foundation based roll-up development um you know we could have an ethereum based layer tool that's not proprietary yeah so the concept of um like in

protocol issuance going to specific development teams like this is something that has been brought up before and this is something that has been pretty soundly rejected right like um I think it was emp2025 or like somewhere close to that there was an attempt to make a a an issuance of 0.045 East per block that would go to the east one point x team and then just got you know shut it down really hard and uh like the reason is basically that like you know birchbind to minimize governance not maximize it right and um you know we yeah once the governance a load of the chain to go down over time we don't we definitely don't want the chain uh to you know become legally classified as some kind of economic political agent that we don't want uh

the the core developers they've been insistent in a whole bunch of contacts that they want their role to be as nearly technical as possible and they're just uh you know very fearful of making these a kind of social value judgments that are going to inevitably leave lots of people very angry at them because uh you know they they do a tough job and you know like way too many people are angry at them for lots of things already um so there's I think a very understandable Desire by all parts of the ethereum ecosystem to like really value credible neutrality of ethereum and eth and that is something that's uh that probably prevents that from being a solution I mean you know if we had a magic wand and could go back eight years

in the past and um you know like pre-mind an extra three million Eastern have that go into a long-term fund that gets uh eventually governed by Soul bound tokens and uh you know whatever whatever like maybe but like we have to live with um you know the ethereum ecosystem as it is today and like the closest that we have uh to being able to kind of benefit from um you know token based public goods funding is like basically yeah allowing the acceler twos with uh separately or two revenue streams to prosper okay that's fair um now maybe if we look at layer twos and compare them to

um to layer ones that are connected via trustless Bridges so kind of the ZK like crime bridges that we've seen recently um which is kind of more of the IBC model right like it's a cosmosification of the ethereum ecosystem how do you see that in comparison to the real layer tools yeah I mean well I think there's a big difference between those two models is like whether or not you have shared security right it's like ethereum has shared security and it also has this uh like really nice tight coupling property that basically says that like the states of the different things that wave inside and came here to ethereum it are going to be kind of compatible with each other

even if ethereum gets 51 attacks right like even if there's a massive reversion even if something terrible happens the yeah like you're not going to like you you might be able to revert some things but you're not going to be able to cause an inconsistency right whereas if you have chains or separate governance then like first of all you know you could try to try to concentrate and take out one without taking out the others then there's a question of you know what there's what if there's some internal political dispute inside of one that leads to a hard Fork but not the others and they're um like there's just kind of more of that kind of uh I guess security concern friction with uh any kind of interoperability with that model

um so yeah like basically the yeah the argument is like you know one is like every blockchain is like a country but the other is like um you know every blockchain is like a country but they're all part but they're all part of the same defensive Alliance and I guess ethereum has kind of committed itself to that approach and then of course there's the yeah you know you you could go even further and kind of take the yeah extreme of saying well you know no we're gonna kind of force all the countries to merge with each other and make a really big big superpower which is uh the uh I guess the equivalent of kind of the you know ultra big layer ones um so you know there's a spectrum and like there's a costs and benefits on all sides of the spectrum and I guess you

know ethereum has chosen the yet costing the benefits of the Middle Road at this point that's fair um but but the security assumption on Layer Two this is only for tokens at average right it's not for natively issued tokens on layer twos right why wouldn't it be though because you can't you can't uh you can't force an exit right why can't you force an exit because there's there's not necessarily a representation a representation of what of the token on on mainnet right so you're saying if there's a token where kind of the home base of the token is of optimism then well I mean I think like if like we get to the point

where optimism is fully trustless uh then uh you know no you just uh you know you make a copy of uh like you make a wrapper of uh like of your token on optimism of your token that is um based in arbitrum and you make a wrapper that's based on the main that you make a rapper that's based everywhere else like it's basically just its equivalence to a shorted system right like you're just uh like you have wrapper tokens on all the domains and it does it almost doesn't matter which domain is the home domain eventually like this this is assuming that the home domain is governance minimized I think you you do want the home domain of a token you issue to be governance minimized but aside from that I think I have to think about that but I take your word for it for now

um what about centralized choke points in Layer Two so basically they typically this at least at the very least the sequencer and all layer shoes that I'm familiar with is still very much centralized right yes so decentralizing the sequencer is very important right and I think there's a couple of different steps on that roadmap right so the first is that like optimism already has implemented and I'm not sure maybe arbitrom already has this about it I don't know it's like this concept of backup channels right like there is an alternate way to send it if you're like anyone can send an ethereum transaction that contains a bunch of optimism transactions and the yeah rules of the optimism protocol Force those transactions to be considered and

to be applied to the state within some amount of time I think it might be within the next 10 minutes or something like that right um so that already means that even if the sequencer wants to censor the secrets or can't censor so that's step one but then step two is I think that's insufficient and you do wants to make these systems be independent of a central operator and for that you have to decentralize the sequencer right and I think there's uh different approaches to decentralizing the sequencer right um so one example of this is that you know you could make an in protocol auction where you just like make an auction for um you know you could just do a descending price auction if you want to

make the auction cheap and like limited to um you know one transaction per winning bid where you're just kind of you know buy up the right to be the sequencer for some future is what um so that's a a simple approach and then you can change it around you could say instead of one future Salon it could be 100 future swats or 50 future swats you could even say oh it's going to be 100 slots but then there is governance that could kick you out if you do things that are abusive like uh like making sandwich attacks earlier so that's one route another route is that you could um start like you could basically have you know an in protocol proposal mechanism what's like very similar to what ethereum does right but then you know you have this question of like how

do you handle a v extraction and then you know are you going to need an auction mechanism on top of that um and another thing you could do is you could do a kind of uh you know hybrid a kind of proposer and layer to a tester design right so this is a if he wants to keep the concept of free confirmations and you want to keep them trustworthy then you have like a bunch of adjusters that are you know let's say in the case of optimism it would be op token holders or it could be yeah you know citizens or whatever and you they would have to sign off on like every micro blocks that a sequencer makes right so sequencer makes a micro block two-thirds of the yeah adjuster sign off sequencer makes a micro block two thirds of the adjuster sign off the nice thing is that you

don't even need a complicated tenement so like all you need is just that the kind of the dump consensus algorithm that says that like the thing is fine if two-thirds of people agree on it and like you know one-third gets slashed if they just sign on competing things the reason you don't need a full consensus algorithm is because full consensus algorithms are harder because they have like they they work in the case where like there's nothing else to appeal to if there's a disagreement but in this case like there is something else to appeal to if there is a disagreement which which is the chain right so that's another kind of approach and then another approach might be is that you know if someone makes a really good decentralized builder then um you know you could just like make them be the sequencer um you could even have an auction Market

between like try to only accept decentralized Builders as a sequencers so there's a bunch of approaches there's like a bunch of tools in the toolbox I think the challenge is like how quickly can you get to something that is significantly better than the status quo that we have today and it's like you know they have to balance lots of complicated constraints right like there's a minimum like specific security constraints there's Optics constraints there's legal constraints and all sorts of things and you know they know how to balance all those issues much better than I do but you know I'm hoping that we can get there soon do you venture to make a guess on how soon no in like you know months or yes good question I think uh well obviously the Roll-Ups have a

prioritization challenge between the two problems that are have a kind of similar Spirit but they're doing different things right which is uh decentralizing the Secret store and taking off the training wheels and uh I mean there's you know there's this challenging question of like which one do you spend more effort on and I think uh one of the challenging things is that from a yeah like protecting users funds point of view like prioritizing having safe training a safe fraud proofs or ZK proofs and uh reducing or removing the training wheels is more important but then you know I don't know it's possible that from a legal point of view decentralizing the sequencer ends up getting prioritized by some of them but you know or hopefully

they you know have enough resources to have two separate teams right because uh like especially when resources are not your constraints right like the the best way to improve productivity is to kind of split a problem in half and make sure those halves don't have to talk to each other right so yeah I don't know I mean I think I'm gonna over the next couple of years we are going to see a very serious improvements on both okay and when deck shouting so dig shorting is interesting because it's like inherently this multi-phase thing right so phase one of Dan sharding is a proto-dink sharding AKA eip4844 and uh that like people really want it to be in um you know early to mid next year but you know that could get delayed more um the good news is that the EIP is

basically finished and you know they're even I think are like basic devnet implementations of it and the address of ceremony has started and uh so it looks like we're pretty far but you know at the same time there's still a lot of work left to be done and so yeah I know it depends like optimistic spring pessimistic fall but you know we'll see it so that's phase one then phase two of the ink sharding is uh how do we um you know go from one megabyte to 16 megabytes and how do we actually like start splitting up the data load that gets more complicated and you know there we have to deal with issues of like you know what is the data availability sampling going to look like you know is it going to be a

peer-to-peer Network or might it be dependent on like somewhat of interested supernode thing at the beginning um might and then you know decentralize more over time are we gonna one of the things I think we're with a data availability sampling is that I don't think we're going to see an all at once transition I think we're going to see some nodes uh transition to sampling over time and let me know possibly like the big rich people are going to keep downloading full data and then you know start off with 20 of the network sampling and then 40 and then 60 and as that happens the total cap on the number of blob transactions and like the megabytes might increase you know slowly from the current one all the way up to 16 and then even higher you know so I think it's going to be a very

multi-stage thing um both in terms of the you know trust assumptions and the percentage of the nodes that are participating and just the all kinds of considerations I want to skip over the Verge and the splurge and so on I think we'll just do an interview with another cool deaf at some point um but I do actually have a big picture a question to kind of end with um so when you look at this space the number of hacks right I mean it's 3 billion this year Alone um and the possibility space for future hacks is only getting larger by introducing all this ZK technology right because in I mean in principle You

country there's there's going to be bugs in in that so how how do we get to a point where we can in good conscience kind of roll this out to the numis um it's a big challenge um it's uh I mean it's a challenge I have actually talked about it roll up day a couple of days ago right specifically in the ZK case that's uh like there's going to be a long period of time between when we have ZK VMS that look good and they're available and you know they make polynomials that you know look legit to the time when we can actually trust that they are a really really robust and they're like as a Lindy as you know hash functions are whatever and but within that time I

think there's different routes that we can take like one of the things that I'm a fan of is the kind of multiple implementations approach right so you know we have multiple ckvms so we don't need the standardize on a single one right like you know different uh clients can have different ZK VMS and you can have a ethereum blocks you know going around with different proofs attached to them and within a roll-up like you know you can literally have like a yeah uh the thing I suggested is like agnosis safe multi-sig where the address is going into the nose is safe just like our addresses that kind of output a message that says send the money out if there is a zero knowledge proof of a particular role model so with that kind of uh stuff like you know we might be able to have a

middle phase where we get a lot of uh benefit from the technology protecting us but like we aren't fully vulnerable to like one thing having uh bugs that break everything but that's on the on the ZK yes side and on things like course it to the base layer on the application side it's like a different story right because like I I mean almost all of these uh defy hacks they happen in applications that I don't use and I would never endorse using and there's like all of these other communities of people that just have you know much more aggressive ideas about what kinds of things they want to do on chain and you know some of them are just inevitably going to overshoot

uh well you know whatever as they get actual kind of level of capability of what we can make secure um so I think the best that we could do is just kind of slowly expands different tier of What kinds of things can be done safely over time right so you know we have we have safe multi-sig wallets now we did not have safe mode to say well it's five years ago you know remember parody right um we uh you know we have you know the unit swap has been safe for a long time right like um you know the makerdale contracts have been safe for a long time and then people start to make Forks off of them um you know we're going to move towards like different Dow governance contracts becoming more and more safe over time

safety is going to increase with what you know more and more fancy form of verification happening and there's going to be a bigger and bigger space of things that you can do where it's fairly comfortable that time you know you can do them safely and then there is going to be this kind of bigger zone of uh you know crazy stuff where if people go into that zone they're going to lose lots of money and like that's unavoidable the bet the thing that we can do and that is important is of course like do a much better job of communicating the difference between the yeah safe Zone and the crazy Zone and uh that's something that like we've been I think medium good ad over time um

there like there's a limit to how good we can be because uh like unfortunately you know if you uh if you call out bad projects for being bad then like you're not going to be welcomed in the bad project Community anymore and there's uh going to be a community of people that just kind of ignore you know the same people entirely but uh like try more to do that um that's you know yeah try more to do that put more safety tools in uh people's hands try our best to protect the people that we can protect uh but try our best to um you know when we can responds to hacks after the facts uh do a good job of uh responding them just kind of do

the stuff that the good parts of the ethereum ecosystem have been doing but um you know just keep doing them and do a better job of them that's uh I think that's that's a perfect answer um we just got a figure from from your people so I hope that means one more question a very short one um what what do we absolutely need to get right in the next year as an ecosystem so what's the one thing you think we need to pay attention to um in order to succeed I'd still say scalability scalability okay I think uh scalability is like the big one because uh I do think that there it is one of those areas where there is a limited time window because uh if we don't solve scalability by the next 12 market then you know there's just an

overwhelming chance that like forms of scaling by sacrificing all attempts at trustlessness are just going to become legitimized and dominate and that's something that's going to be very hard to come back from right and uh like scalability is something that you know we have to get right we have to make progress at getting right and uh you know we have to kind of put in the initial steps to make sure that there is a good path toward improving that scalability over time and it's like a big challenge but you know there's also lots of various modded hard-working people working on making it happen perfect thank you so much for coming on epicenter thank you thank you so much for being epicenter