Arbitrum Founders on L2 Competition | Steven Goldfeder, Harry Kalodne

Transcript

hey everyone welcome to arbitrum part two if you missed the episode earlier today that dropped all that arboretum's airdrop and orbit go listen to that episode first it's with Harry it's with Steven who you're going to hear from in this episode that you're listening to now they did an episode earlier this morning that we recorded last night uh on March 16th like 11 at night uh and then the episode that you're listening to right now episode two is all about their thoughts on uh ZK competitive space Mev on arbitrum their thoughts on arbitrum versus optimism Arbor drum versus coinbase is L2 but I think it's really good context to actually set it up with the episode uh right before this so go listen to the episode right before

this then go listen to this episode uh I think that's all you need to know so let's jump into it Harry and Steven welcome to Empire guys thanks great to be here thanks for having us there's a lot of really good stuff happening in Arboretum right so like I want to highlight a few of those so like you processed I think last Tuesday 1.1 million transactions you know about 20 000 more than ethereum L1 I think it was the first time the layer two blockchain surpassed ethereum and daily transaction count you on Wednesday I think you believe you repeated that um and so maybe give us a quick over update on what uh what has happened since we've had you on the Pod there's been a lot of teams building on arbitrum there's a lot of excitement

um you know talk to us a little bit about how that process has gone about over the last couple of months what are the more exciting kind of things that you've seen in the ecosystem um would be kind of great to level set everyone yeah so the original ecosystem is um I think a very welcoming place and that that was from us that we try to welcome teams and work with them to success but also the ecosystem as a whole it's like much much much larger than our team it's very welcoming and open and we're seeing we're actually seeing it so an influx of well two things one is very very strong projects particularly in D5 but also uh you know Treasure and Other uh in game fine nfts as well but but particularly in D5 probably our strongest uh um vertical right now very strong

projects and particularly Innovation right take GMX Innovation and defy it's not just like oh we're also going to launches here you're seeing very Innovative projects and frankly projects that people want to use right people are excited to to use to use them and to use these uh products and and they actually have real product Market fit we're also seeing an influx of of protocols come from other chains um to Arbitron uh you know Trader Joe since we last spoke they did an expansion from Avalanche to arbitrine um gains protocol from polygon did an expansion to arbitrum and and now arbitrary by the way uh has you know is their dominant Network in terms of in terms of their uh their value um Lyra which is an option is brought

about from optimism getting expansion to Arbitrage so we're seeing this convergence around the defy ecosystem and defy community and arbitrum which is um you know very strong and and it's not just transaction counts because you know people ask like you think this is real like you know are there other reasons why people are doing transaction counts so obviously I don't have uh you know um uh you know I'm not inside everyone's had that's using arbitrus so I don't know the exact answer and can't tell you uh you know if every when everyone's motives are their transactions but I can't tell you that it's not just one metric going off it's it's a series of metrics uh um that have it risen together and I'll walk you through those briefly number one is of course the transaction Gap number two is the TV out so arbitrum if you look at D5 llama D5

tvl we are uh We've surpassed um just about all other uh layer choos that were up even side chains so you know we're about 800 million dollars past polygon at this point you know past Avalanche pastelana uh well past optimism right now it's um you know in terms of a D5 chains arbitrum BSC sorry ethereum BSC arbitrum and when it comes to Dex volume actually um so it's not not just not that's tvl when it comes to actually volume being transactive indexes we're right now number two to ethereum it's just uh ethereum and if you scroll over to the right you'll see the Dex volume um um haven't looked at it today but this is how it's been for the past few weeks it's been um ethereum and then uh Arbitrage

although it looks like BSC is is you know or is slightly edged out today but over the past week or so um Arbiters been consistently in the number two spot but right up there with uh with uh with the SC as well um and the other metric which is a fascinating one is the number of East being bridged to arbitrum um this is one where like l2b traps this very well um and an interesting fact is arbitrum has more eth on it than pretty much all of our competitors combine so we have more Ethan our protocol than uh in the polygon Bridge optimism start whereas EK sync immutable x uh and more all these combined and we have actually so uh we're almost at um 1 million East in Arboretum we're about like you know we're about to uh to um uh to get to that point and um you

know what that means is there's real value here there's real users transacting and um so I can't tell you the motives but it's the charger to see you know the true usage metrics go up as well and when I checked last week and I haven't looked it out uh today the average trading arbitrum was about a thousand dollars um so real users and not even only whales but users with you know um you know thousand dollars is is a moderate sum um but but it's not the millions you see sometimes transact and ethereum um so it's you know real usage for real people what's behind the scenes here like we've in this pod like talk about historically like it's pretty impressive polygon from a business development standpoint like

that they've managed to convince a lot of you know high profile companies build at least announce that they're going to deploy on polygon but we see like these massive reorgs that can like continue to happen and to your point earlier like we criticize like there's a lot of people in the ethereum community criticize like Solana outages but like these reorgs are you know not they're pretty concerning so I want to get your opinion on on like that process of BD how active are you on Business Development and you know you talk about Reddit and so I'm really curious to to get your perspective yeah so so a few things first of all you know uh I'm very

close to the polyvon team and yeah their business development team is is fantastic really really good and uh you know one thing here is to notice it's it's actually good for all of us right the fact that you have these consumer brands that are embracing crypto is not only helpful for polybond so it's helpful for all of us so I'm actually thankful for them for a lot of the uh the work that they're doing and bringing these Brands to crypto and and yeah definitely they have a fantastic uh business development team uh in terms of the reorgs um it definitely is a problem and I know it's a problem that you know I know there was a large Bureau last week and it's a problem that um you know it comes difficult for apps to you know to use but I think the team is keenly aware of this problem I think

that's one of the reasons why polygon team is really embracing the robot uh to roll up um uh vision and they're going to be uh you know launching their own roll up and maybe one day even converting the magic chain uh I don't know if they're playing as athlete to do a roll-up so um I think it's a validation basically of the vision that you know there's something very very uh special and uh strong about roll-up architecture and um you know I don't think that's controversial I think the polygon team will will be the first ones to tell you yes there are um serious problems with their current technology and which is why they're uh investing heavily you know in in building roll-up technology as well but um yeah definitely the intern in terms of us yes we have uh comparatively small but very Mighty business development

team and um you know the one thing to notice you know we don't have uh um all the same resources if we don't have a native token and sometimes you know we don't really have a grants program all these protocols you see an Armstrong I can confirm like I've never paid GMS anything right I've never paid um you know any D5 project anything to launch an arbitrum um and that's not to say it's bad too it's just those aren't resources that we have today so um you know we are competing uh in the Realms that we can and I think the things that people like would like about us is we have Best in Class you know resources and support we really try to work at the project to make them successful they stop that you know differentiates us from some other teams not to name anyone in particular there

are some teams out there that optimize for the announcement like we got an announcement this uh this is the project is moving to us where this company is launching on us we don't optimize for the announcement we optimize for the success the announcement is day one and then we day two once that media cycle has died down we say all right let's roll up our sleeves and make sure that this is an absolutely successful launch for you and I think the thing you'll see is all those projects that I mentioned before they've come to arbitrum they've been very very successful in arbitrim and I'm not going to take credit for it myself I think that's as an ecosystem we embraced but you know our team also does as much as we can as well how much of the how much have you think of like there's there's been speculation

about like a token launch some air drop happening like I feel like people are acutely aware of there may be a possibility to get an airdrop so that is an incentive to come over to arbitrum and you've seen an uptake connectivity I think uh you know recently um Maybe what do you I mean I'm not asking I'll play here but what is the what is the token strategy um for arbitrum yeah so so first I'll say is you know that's sort of what I was mentioning before around there's definitely a lot of people that are uh that might be you know coming for different reasons but uh typically you know what I see in uh from from those type of users

um they're doing very small transactions they're not touching dexes so um the fact that we have like all the key metrics of actual usage metrics up up as well is indicative of the fact that there's something you know really a player this is real usage um but again you know I'm not in the heads of all these users but you know it's nice to see the correlated metrics if transaction count was way up um or or you know or bridging us up at the or the number of people bridging was up but the value being bridge wasn't up right then I then you know that I'd probably be concerned like what's going on here you know why are people bridging to the shame and not actually doing anything the fact that people are bridging significant value and transacting with that value uh is indicative to us that there's um you

know some thing or wrong yeah something um uh really uh right I should say uh going going on here um in terms of you know we've uh obviously don't have a native token and you know can't uh I don't really have uh too much this year unfortunately about our plans there but what I will say is um the goal our goal as as technologists and and that's where we come from from this right we're first and foremost the Technologies of course off-chain Labs the business but we're first and foremost about the technology about the security that's why we chose to be in this business and that's what we care about that's what we're passionate about and um you know one important question is how do we get to uh you know how does

um a robot decentralize and how does a how does that full decentralization happen um and I think that's uh the context in which a discussion of a token makes sense in which can this help decentralize the protocol can it actually help in building a vision it shouldn't be a question of like hey you know this will be really good for for us uh um for some other reasons for us it's always about the technology and the key question we ask is will you know for any future will this make the product more decentralized more secure and actually help deliver in the mission and the vision that we have for a fully trustless layer two and you know that's how we consider uh the question about a

token and really all their questions in that and you know there are obviously some good arguments both ways there but that's sort of the framework that we use so maybe just a finer Point here so like we talked earlier about decentralizing the sequencer so in this context like would having a token make that easier like is is having a token part of the process of decentralizing the sequencer or can you decentralize a sequencer without having a token um yeah so maybe it's a stupid question no it's not a stupid question and and actually it's such a good question that I don't you know I'll tell you the truth people ask me all the time when are you guys going to decentralize a sequencer and I'm like 99 sure that like almost

everyone asking that question is really asking me when there's a Doppler because they've conflated those one token right that's exactly right yeah one one token right because these people like don't like um that was not the other's next question it's like what are you gonna right right Absolutely I'll take this an opportunity full disclosure guys there is some bias I'm an investor in Norwich from a very close to team I'm trying to be real objective here guys I'm trying so I'll ask you actually when you feed you this is a fun one we're in Denver now and um on Saturday we've taken over a Shake Shack for the day so we'll be

literally feeding our community for the day um but I don't think that's what people are are getting at um the the um yeah so decentralize the sequencer um you know there are definitely so there's sort of two parts of this technology decentralizing the sequencer means you have more people running the sequencer so it's not just one party it's many parties running the sequencer first of all I want to mention that also there's a difference between validators and sequencers validators are the ones that provide security for the chain you already have a dozen class of validators and the removing the white list will mean validation is completely decentralized and that will happen like I said in the coming months um so that is the core security property decentralized the sequencer is a bit different the sequencer in that world

doesn't have power to like push bad transactions or anything like that but the sequencer has power to do is to reorder transactions like it's extract Mev and so decentral and today we don't extract anything we tell you we don't and we really don't decentralize the sequencer is a guarantee that we don't you can verify so people often don't realize I think people conflate the open validation with sequencer we're going to get to the full security Point very very soon um you already have a dozen plus validators so the validation is already largely decentralized but will be fully decentralized soon in terms of the sequester though we still you know want to get to a point where the sequencers decentralized so we have these proofs that we can reorder transactions um so we have a protocol to decentralize a sequence error so how does you have a

bunch of people basically becoming one sequencer and then the question is how do you choose who's participating in that in that protocol so the sequencer maybe now is that of one node let's just make choose a number that's nice and fun is 10 nodes whatever that's just you know for argument's sake and the question is how do you choose those 10 nodes and that's where um you know I think in our case we probably really want reputable um companies to to to uh take part in this and there will be that you know we really want you don't just want your sequencer decentralized to uh 10 people 10 to 10 anons that like uh or a non so if you pronounce that that you don't actually know you know who they are you want there to be okay it's decentralized among reputable you know maybe the

ethereum foundation I'm not saying they would do that but like you know reputable parties that you can trust um but there could be a role and I think this is what people speculate there could be a role in which a token this decide you know decides who takes place and that you know who joins the decentralized sequencer but it's definitely not necessarily the decentralized sequencer you can largely decentralize the sequencer by having many nodes but many parties take place in the sequencing even without a token mechanism to choose who those people are you could use that but it's not necessary just to kind of quickly highlight and double down on that point like it's interesting in that sort of like it seems like the general perception publicly is that like oh what is decentralizing the sequencer mean like oh it's just like people like you know the prod you know people being

able to pick who the sequencer is but like that's fundamentally like not that interesting because you're still you know you get to vote on who you're trusting but you still are just kind of trusting a single entity as opposed to the kind of like much deeper technical point that Stephen was talking mentioning which is basically like actually Distributing it so that there's not like one elected party everybody trusts there's actually a group of people with with a threshold of trust where you could totally have some number of them being fully actively malicious and the system is still strong can hold its properties can I can we get into Mev actually because you guys had a little stuff going down in the uh in the flash while it's Discord last week that I just

wanted to get your take on um I don't know if this is a question for Harry or Stephen but would love to just get your take I mean I can explain the situation from from my view of how I saw it but would love to get maybe one of your takes on Mev the situation last week in the flashbots Discord would love to get your thoughts on this yeah yeah happy to it's uh it was it was an interesting one yeah yeah it looked enjoyable uh from you guys then I think you know one one very interesting I mean you know there's a lot of interesting lessons here um one is kind of like even in sort of like a centralized sequencer model with with sort of fair ordering there are still ways to get advantages with Meb which is kind of something I think we

already knew but is like relatively subtle um and the kind of the the actual situation that arose was that we have this kind of gets a little technical there are different components of arbitrum and you have the sequencer it posts transactions and batches to ethereum but before it actually posts the batches it sends out the transactions that it's sequencing on a feed that anybody can subscribe to and that's how you get to um and that's how you get to the uh the uh kind of fast confirmations um but it turned out that it was they were being sent out in a random order to all of the people who were subscribing and so um we figured out that basically

um there was a huge incentive for back Runners to subscribe tens of thousands of times to the feed um in the hopes that they would get they would hear about the already confirmed transactions milliseconds sooner than their competitors and gain an advantage so I mean it really kind of highlights that that sort of it there are always these opportunities for for Mev um and kind of back running is one that that is kind of generally a good it's the reason why kind of the you know the decks actually shows the right price because there's an Arbitrage opportunity and and somebody will come in and sort it out so that users can actually sort of pay the what whatever the kind of

correct price is but it also is like relatively anti-social in that sort of everybody is relatively mercenary or and out for themselves and trying to do whatever they can to sort of you know make as much money as possible and so it's kind of there are a lot of interesting lessons that we're taking in terms of kind of how to maintain how to let these sort of negative externalities of mhd extraction um where people try to find Corner cases and ways to sort of abuse the system in order to make money how to sort of design a system where the negative consequences of that don't really like affect sort of a regular regular person who wants to run a node And subscribe to the feed but uh you know they can't because it's being overloaded by

searchers yeah I I mean I feel like one of the pushbacks here was that off chain Labs would be from this PR was that off-chain Labs would be taking any potential any of the revenue for Arboretum and giving it to like AWS or something Farms or something like that and keeping it for themselves or instead of the ecosystem like that was the narrative I'd say that was getting everything I'm I think yeah no I know I think that was an overblown thing is but when I dug I think that was an overblown thing but it does affect the question of like what is the solution like do you embed a Searcher into the sequencer to and return value uh that the seat that the Searcher captures and return that value to like eventual token holders or something so I'm just curious how you think about Mev not right now but longer

term absolutely and it's definitely something that like we're very interested in I think kind of the the thing people reacted to was essentially kind of what we viewed as a short-term Vex um in order to make sure that kind of the the actual quality of service of the system to real users was effective definitely not like an ideal solution I think that like fundamentally the idea of sort of capturing um a significant portion of or as much value as possible from Mev that's being extracted on a chain that's kind of the you know that that's sort of the way flashbots has been building and doing a lot of interesting work this particular issue issue of sort of latency to get transactions doesn't really have a

direct parallel um in in most other systems because kind of when you have a well it sort of does but it comes in sort of be having like a distribution of nodes throughout the network so that you hear about transactions sooner as opposed to all transactions coming from a single place so it's kind of a relatively different problem but but in general both for this and for kind of just kind of reducing the degree to which kind of the other place we have this in our system right now is basically latency races for submitting transactions which is another area we're kind of working on and I think um Stephen I think actually like later this week we're planning on like publishing a research posts um which kind of discusses the last thing today kind of playing Adrian oh it's a perfect timing

really cool work try to basically balance um the idea of sort of still protecting our users and our number one Focus will always be on minimizing MVP and protecting our users from Mev because it's kind of broadly speaking most types of many types of Mev are bad for users uh but there is good Mev and kind of making seeing how we can design a system to capture that value is something very much on our one other thing I want to mention here is I think the process actually worked as it should have and I don't think you know I think that the narrative was a little bit unfair in some ways right so we had this uh problem and we brainstormed Solutions and and our one of our Engineers actually created a PR but PR is that even though they get

pushed pushed uh Master for us often don't don't always get merged he literally went to the flashbots Discord and said hey what do you think and you know asking for feedback on that and and you know we got feedback both of the last boss on Twitter actually we decided not to do that into a band that but we didn't we explicitly didn't go ahead and push something without um Community feedback we we very much went and solicited feedback and um and the process worked out and we got actually loud and clear and and we uh we took that feedback very seriously but yeah I don't think people I don't know obviously that's I don't think people saw it from that Viewpoint uh we're not actually deploying that change

now because of the week right we are holding it out as a if we need to we will but for now we have kind of other workarounds and need two will basically be sort of KN sort of the non-mev ecosystem continue to have a good experience using the chain is sort of the most important principle um um I want to uh to you up Stephen or or Harry to talk about stylists and what you guys are building with like stylists or evm plus but I've won maybe like a related question before which is um Stephen when you were talking about optimism it kind of at the beginning this episode it made me think about like kind of the two different strategies you guys are taking um on the developer side of things and uh it seems like you guys are looking to

support more like web 2 developer languages to like onboard more devs and instead of going modular uh you guys have spun out arbitrum Nova as like this completely separate this is my understanding it might be wrong here but like as this completely separate chain for like social apps and gaming apps whereas optimism is going for this more like modular narrative with with bedrock and I'd be curious to hear like hey am I even right there but B uh is that like what's the rationale behind that strategy yeah I think there are two pieces so yes we do have like you said two uh Layer Two Chains that are on ethereum today um but we will and you know have and actually you know we'll announce our first partnership here probably next week or two but there will be um a healthy ecosystem a layer of three

chains we call them an arbitrum or these application specific chains built on Arboretum one so in terms of that you know we'll have you can call that module of the same modular vision of how the many chains uh anchored onto the arbiting one chain so I don't think there's actually a difference there Arboretum uh Nova with cited uh you know for um specific reasons you know uh specifically uh for the partners that wanted to bridge very fast directly to ethereum we decided to launch it on top of ethereum but we will have um a blossoming ecosystem of layer 3 chains and we're ready you know um we'll be in a position to announce the first uh first of these you know quite quite soon um yeah so so that's that that's you know I don't think that there's a

there's a big difference there in terms of so you know the expanding our technology developers that's that's additive in all this so both on the arbitrum one chain and on every other of these chains that are launched on top of us or our Nova they'll all get you know if they use the r between technology they'll all get the ability to um if they just choose to include it to uh to have this um Diversified developer support yep Stylus is one of the coolest things I think I've seen in terms of like onboarding more developers my understanding is that um so through these like webassembly smart contracts users are going to be able to deploy uh programs on arbitrum written in their favorite programming languages like rust or C or C plus plus that run to to run

those alongside evm uh evm programs on arbitrum so I'd love to just hear that like that's my very basic understanding of it but would love to hear what you guys are building with evm plus and and uh and stylus yeah I know Stephen loves talking about stylist yeah I saw Steven's I had and I was just you know all right I'll do the overview and then if you have if you once you asked yeah sorry you can uh console details um you know the idea is basically evm is is is great and you know we are the most evm compatible or equivalent or or whatever term you want that that you can that you can be right so building an arboretum today is exactly like building an ethereum other than it's a lot cheaper in terms of the developer

experience um both you know on the surface and under the hood exactly the same and the question that we asked ourselves is that's great and we're going to keep that always but is that our limit and I believe the answer that is no I think evm compatibility is the floor not the ceiling that's the foundation and the base that we need but there's so much more that we can do and the principle here is one of inclusivity right I think people like uh I Know Myself included you know it's hard this week I'm in Denver there are 25 000 people here so you've got this impression that like uh the entire world that knows about crypto and we have taken over the world but it's not true if you zoom out just a little bit uh you see that the crypto Community is still very very small even

among the technical community crypto is a very small community and the question is can we Embrace those people and particularly can we do it in a way where we Bend to them but don't ask them to bend to us that is we make affordances and say hey you're a developer you're an Enterprise with development teams that have support in traditional languages we're going to make our technology work for you and make it easier for you to build an arbitrine building web 3 rather than say hey retrain your team or hire new developers it's not about Talent it's also about the libraries right you might have some great rust support or libraries that you want to run but you you know rewrite those in evm is not something you know that we that you know that that we want to say again evm was fantastic and it will always be our

foundation but the question is are there more affordances that we could that we can build and particularly can arbitrum the layer twos generally be a breeding ground for Innovation where we don't say okay we're the same as ethereum and that's where we want to be we say we are we support everything ethereum does and now let's see how can we make it even better because you know the vision is it's a vision that's like you know basically a meme at this point we want to get to the next billion users but my thesis is to get to the next billion users we need to get to the next million developers and to get to the next million developers we're going to have to build affordances that allows them to use book their knowledge and their tooling that they already have and so what we're doing with Stylus is we are

um going to be adding initially C and C plus plus and rust supports your three programming languages three popular programming languages for uh so you'll be able to write your smart contracts not only in solidity and evm languages that's not going to change right if your contracts are written already or you want to continue writing the m and I'm sure many people will and we will support that uh of course that's not going to change but if you want to write a rust since and or CNC plus you'll be able to do that as well and this is a big change because today there are chains that support rust like Solana for example supports rust but it's a binary decision you're like do I want to go on the evm chains would you want to go on the rust chains and this decision that I

want people to make is wait I want to choose the ecosystem I want to be in I want to be in the orbitrum ecosystem and I don't want my decision flooring to be do I want to build in rust or evm languages solidity or move I want to First choose my ecosystem and then any language I want that I can use and there's one added benefit here which is um as almost a side effect but no really core to what we're doing building you know using some of these affordances like building these languages are just much more performant than the EVMS so you'll be able to get like a 10x uh increase in performance by doing that so what that might mean is you might have an evm or solidity app and arbit room today and you'll say hey there's this one piece maybe it's a cryptographic

code that's like really expensive so let me actually just take that piece out you know rewrite that and roster call out to a rust library and now my whole contract is more efficient which means my users pay less I use less gas which means the chain has more capacity because if everyone's using less we can fit more into the same amount of space I think that is you know as we scale that data it's basically another factor of 10 in our scale because if you imagine everyone moves over it's using these affordances now we can we have 10x the capacity of our chain without actually using any more resources um from ethereum so a lot of different angles when the inclusivity angle one the scaling angle and um one just you know giving developer a better better experience um yeah that's basically the motivating uh what's motivating this this uh

upgrade but again evm support is not going to change it's not going anywhere so if my thesis is wrong and no one wants this nothing will change right everything will work exactly and I think that people will want this but the point is I have a feeling it's a good good thesis even for what it is worth yeah we invested a lot I mean like we've we've had to be fair like we've had other chains and like other networks and they've admittedly said look the tooling is not there uh like Cosmos for instance like you know Great Tech but they sort of will tell you we need we need to go a long way and for making it easier for developers to come on board and there's just a whole segment of developers that understand

these other languages that we just expedite the process for them to start getting interested in writing um and building stuff so I I agree with Jason here I think it's fairly positive um who do you guys see do you see like coinbase is L2 and optimism and like the other l2s as your main competitors or do you see like Solana and Avalanche and like alternative l1s is your main competitor who do you think of as like when you hit the Whiteboard yeah so Harry and I may have different answers here I'll answer you from the sort of uh partnership BD perspective um you know when I view the main competitor basically is when I'm talking to a project you know who else are they

considering building on right that that's that's uh you know from a technical perspective it might be whose technology is closest to us but from you know a a an ecosystem uh growth perspective it's you know what choices are you considering and I think the the probably the one the the ones that we see most are people people are either coming to us or polygon those are um most of the conversations that we see today um so in some sense we're competing with Team you're competing uh for polygon with polygon for teams but again you know it's uh a very friendly competition and you know we have great respect for the polygon team and a really good relationship with them if

like I feel like constantly kind of like driving ourselves forward like you know being dissatisfied with just like things we've had to do and areas we can improve like I don't think we want to like I don't think we're we're opening up you know working to open up validation because of competitive pressure I think we're working to do it because it's the the damn thing we've wanted to do for like four years now and we're excited to do it the reality is I think you said Stephen and we heard this from the coinbase guys too is like to think about competition now it's kind of really stupid because there's like 10 users yeah and like so like if if everyone acquires business doing the BD efforts and brings

on an incremental user then it's that positive because I guess the the question here is multi-chain deployment is is you need to believe that that's going to be the case right like like the Trader Joe example you mentioned the liar example like a lot of these teams as you mentioned earlier may have deployed in another L2 or another L1 and eventually if the users are there they're going to want to come to arbitrim right they're going to want to have a footprint there and I think the best if you invert if you believe that to be true then you go out and acquire as many users you don't really kind of focus on because that's the thing I think I think fundamentally historically in crypto we've talked a lot about like acquiring this like circle of techno whereas the name is how do we get the

million 10 to 100 million users because then there's a lot to go around right I think everyone wins in that scenario unless of course to your point Harry and Steven is if your Chain's not secure then go home pack up your and go like yeah yeah I mean like yeah I I agree um yeah I completely agree and like I said you know I cheer every time I see polygon have like a big BD win where a consumer brand comes because it just means that there's more knowledge of our industry and whether they're on polygon or an orbitrum or net polygon now but you know maybe they'll be an arboretum one day like that to me is a win for our industry and that's what we need we need that you know particularly in the post FTX there's so much like people look and just say like they think they can't

differentiate they just think this is all bad some people and they're obviously in my opinion very incorrect but the idea that we get more mainstream adoption is a win for our entire industry and in some sense um you know we all rise together I want to get your thoughts on um the zks obviously we look at pictures of eat Denver it's all the rage every like the room is full everyone has a strategy you guys have been relatively quiet although I think you we've talked about this in the prior episode I'm curious to get your thoughts on like the evolving landscape of zero knowledge proofs and CK Roll-Ups and there's a bunch of teams it's a it's a term that gets thrown around very like Loosely but I think there are many distinctions so maybe just spend like a lot you know last like

10 minutes talking about zks what's all the rage what's your strategy if there is one and then we can go from there yeah so a few things one you know we have nothing against ZK or ZK proofs um you know if you look at my research history I I I've been researching and doing work in ZK and cryptography generally um for you know goes back to probably 2013 or so um that being said um so then and you know one other thing is I think that differentiates us from some of our competitors if you look at the name of our company we're off-chain Labs right I think just about every other one of our competitors has their particular technology built into their name that could be like um optimism or it could be ZK sync or

Star Ware and again a lot of these are fantastic teams but the idea is that we come to this problem and say we want to solve the problem with the best tools available today we're going to not come here and say Hey you know if you if you if you have a plumber come to your house you wouldn't want someone showing up your door and saying um here's a a wrench this is what I'm using to fix you say don't you want to take a look at the problem first maybe the wrench isn't the right tool it's like no whatever your problem is I'm going to fix it with this wrench I think that's the wrong approach here I think our goal is to say we need to bring scale to users and by the way we need to bring scale to users today and we're

bringing scales users today and we need to do that using the best and most secure Tech possible today and that is you know indisputably today um arbitrum and arbitrance particular flavor of optimistic role um and we're happy to innovate and if ZK proofs come to a time where I think that they are cost competitive which I don't believe they are today because the proving costs are going to be much larger than our costs when they're compatible which they're not today because you know evm is not built to be in a circuit and you have all sorts of incompatibilities both in terms of gas accounting you know things that are expensive in circuits are cheap in the evm like hashing and vice versa and you just have a developer experience that that's different and you know often

these uh protocols will have a small laundry list of incompatibilities or things that differ between evm and the compatibility is not there and um even to the extent that they are there by the way there's in my opinion no path that these projects can realistically you get to anything like stylist where they you know the extent that they're getting evm support is because they're very hard much hard-coding decisions now in their circuitry to get them to tailor to the evm to get something general like stylist that allows us to to add more programming languages I don't think it's there today so there's costs there's compatibility and then there's just our future revision which are currently not compatible um with the ZK technology as we know it was just as we see it and I think we're significantly far away from that but if that changes I'm not going to eat my

words I'll be happy you know uh you know we you know and we will happily Embrace that technology or anecdotally anecdotally the one of the key Innovations in the arbitrum research paper which was our Princeton we published at Princeton in 2018 of the music security conference was what we call the arbitrary virtual machine or the AVM and when we launched um in in August of 2021 that was powering our fraud proof the arbitrum virtual machine um when we launched Nitro a year later we retired the AVM completely so this thing which was like the you know uh Crown Jewel of our research we said it served its purpose but we've built something better now so that thing which I can confirm Harry myself and literally spent years working on and it was a it's

a work of art and from an academic perspective it's extraordinarily elegant but we have the realization and said that's you know we have something that's actually simpler and actually works better and we can build our fraud proofs in a way that also allows us to extend them in more ways and be more performant and use uh um you know more standard tooling and so we're going to retire that and there was no one half the year to retire that than me and probably Harry was also it was great and the point is um you know we're happy to continue to innovate and build our technology you know we're we're scaling up right we have a team of you know a a large research team larger narrative is only getting larger because we're saying we're not saying all right let's Pat ourselves in the back we built this

we're done we're saying how do we get even better and one of the fallacies I think people make with ZK they like to compare the state of Arboretum today with some futuristic state of ZK and as we evidenced an arbitral Nitro that big upgrade we made arbitrary is not staying still we're not stagnant so you either have to compare ZK today to Arboretum today and it's clear that arbitrim is the winner there it exists it secures providing real value to users today or you can compare Arboretum in you know the future a year or two or three or four or five from now with ZK at the same time and arbitrum won't look like it does today at that time and and frankly you know I'm actually looking forward to the launch of you know ZK evm chains I think like I said I have nothing against their technology

I'd like to see how they perform and it'll be the first time where users can actually do a direct comparison because right now it's a comparison between a live system with all the baggage that comes having a live system you actually can pin yourself to a metric and a quarter to a PowerPoint tweet presentation that just speaks about you know what will come in the future but now we'll have an apple to Apple comparison and my my expectation is that we'll fear quite well and as the again but there are fantastic teams that are building here and there are no there's no question make Innovation over time I don't personally think they're we're there yet but you know if it comes the point where where we are we will um just like we abandoned the AVM and just like you know we will absolutely say all right there's something better

here we don't have ego about that and we'll contribute to that future and we are contributed to that future we have a research team that's that's looking very closely at you know ZK and other Technologies and just to close out what I can guarantee you is in five years from now arbitrim will look nothing like um you know it does today from a technology perspective I don't know what it will look like but we'll have five years of research and Innovation and hopefully Community participation of making arbitrum a much stronger and better and decentralized product and there's no question just look at what he accomplished in the last year and a half is there a question in a five-year Horizon we're going to reinvent ourselves and be so so so much better from a security perspective from a usability perspective you know we're going to have everything that's just far

improved and will that include ZK maybe I don't know I will include whatever we believe to be the best technology to bring that Vision I don't have a I'm not I'm not coming here and saying I need to use this wrench I'm saying I need to solve this problem I know the solution today and I'm working on saying how do we make that solution even better guys you guys are uh it's been amazing to see everything that you've built appreciate you coming on uh arbitrary sitting at Fourth for tvl right now across all chains third for volume it's been super cool to see just how quickly you've grown and uh how you guys have not just helped build Arboretum but I think build the entire on-chain ecosystem so keep it up I uh I will definitely miss my flight right now so I need to jump and I'll see

you guys later thanks so much guys [Music]