Bankless AMA w/ Matt Finestone of @LoopringOrg

Transcript

all right everyone welcome to another episode of well this is actually not an episode this is an ama for the for the bankless nation so this is for you this is an opportunity for the bankless nation to ask somebody we find super interesting in the crypto community a whole bunch of questions and we brought on matt matt feinstein from the loop ring because he is doing some super interesting things in layer two and layer two is super important for ethereum because we've all paid 400 way gas prices so that's why matt's on matt welcome to the bank the station asking anything sir it's great to have you

thank you ryan hello nation so glad to be here thank you all right well fantastic you know what i think would just uh break the ice here and get things started a little bit is could you give us some background on what loop ring is i am i feel like you're somewhat of a representative of um ethereum layer 2 technologies can you tell us what loop ring is and a little bit about some of the tech that underpins it yes sure um so loopering it's kind of funny because you know we've had a long career in you know or a bit of a long history in crypto terms it's now three something years but uh so depending if

you'd like knew about loop ring two years ago and like you zoned out and now you're back in with all like the new hype you might be like oh i didn't know they're up to that um our identity has kind of expanded but all that said we are a zk roll up on ethereum that is a flavor of layer two scaling solutions um we'll dive into that and more i'm sure we started our life as just a dex protocol so loopering was a dex protocol we built an order book dex protocol on layer one we were not happy with our pitiful performance in the sense of actual performance trades we could accommodate so we looked into scaling solutions that led us to zk roll ups about a year and a

half ago and we implemented the first zk roll-up on ethereum in december 2019 so it's been chugging along for nine months pretty pretty cool to think that even though l2 has only like really gotten into the limelight these past few months with these absurd gas costs but um yeah we seek to make ethereum transactable for the little guy and and little girl who can't spend uh you know nineteen dollars in gas or this and that um we we want to bring i made a little tweet yesterday with our 5 000 user i said we want to bring the world to ethereum and ethereum to the world or vice versa whichever way it

sounds better and uh yeah that's what we try that's awesome yeah cheap transactions for the people right so so that ethereum doesn't become a transaction engine for for the whales and large capital pools um so i was curious about that and the way you you introduced matt so what was it the case that loop ring was a trying to be a decentralized exchange and you were like okay the only way we can be a decentralized exchange is to build out this layer to tech and then the layer two tech became its own thing or was it the case that you had always intended to build out layer two tech maybe in a roll-up maybe in something else and then you built the exchange as sort of an instantiation of that so which came first

yeah that's actually a really good question um we were so yeah we were a dex protocol but we always as you like it's clear that dex protocols could succeed on layer one that's where it's all happening now doing you know billions or near billions um daily like but i guess we kind of had a different idea in mind we wanted to be an order book exchange again like i don't know if we're like so married to that idea right three years ago like we only want to build order books period uh something in the future is going to come along called amms and we don't care about that right we just wanted to allow people to to trade on ethereum without giving up their keys um order

books were our way to do that a m ms and other like yeah amn's or pooled liquidity models are so interesting because like i kind of conceptualized them as this thing that emerged out of the like jungle they lived in they are like a prime predator in that environment right like amms work because you cannot have market makers like humans or robots with sophisticated strategies placing a trade removing a trade and doing like high throughput trading right so amm said like okay let's just have this slow pool of capital that like follows this formula that people could come so it solved the

problem and it's like restrictions so you're saying basically like amms uh are the apex predator of a super slow you know transaction engine system which is what the ethereum main chain is but they're they only work so well is because of those constraints the slow transaction speed is that right exactly great way to put it it's an apex predator in its environment and we were trying to be like the apex predator of like you know we came like we were like city slickers let's say going into the jungle and you know and like no it can't work like that so now we're trying to like make that yeah you get the point but that's a perfect way to think about it and then to become a predator in this ethereum jungle which has different constraints

you can just spin up an order book with low latency high performance and allow these legacy styles sophisticated traders to get to work we said okay how do we implement that here and that's what you need scaling for and that's where we led to zk roll ups and then i don't want to get too ahead of ourselves but then we expanded it even more once we could do trades on zk roll up like on a layer 2 it was actually like i always say this but at the behest of the community or specifically strong community leaders like vitalik and other just ethereum researchers said hey you're doing trades with very scalably why don't you just do transfers as well simple transfers and we said that's a great idea i can't believe we didn't think about it right like we just it was actually trivial to add on so we became

just a dex protocol to a scalable dex protocol on layer two to now just a layer two protocol where you can do trades and transfers and in the future hopefully more so kind of eking out some more generalizability as we go that is super cool all right so um can we talk about just maybe while we're still talking sort of overview so so everyone gets a picture of what this is so how do i get from layer one to layer two right so i'm a bankless you know a member of the bankless nation right i'm going bankless i've got my meta mask and i want to get over to loop ring to this layer two world to do something right am i like doing the you

know like just uh am i transporting over somehow or or how does that work and then once i'm there like what what sorts of things can i do and what are the fees associated with that right okay so yes you the good news is you could remain bankless uh we will never force you to to be banked on our lair too but you must indeed take one of you off of layer one and step onto this layer two okay um this is like super mario has to like you know go down the sewer pipe right he has to crouch down and like essentially go into a new world he has to warp into it

that's right you have to do that and this warping takes an on-chain transaction you are tying your metamask your ethereum address to another world another plateau that is only controlled by said address though by your signature so to get on to loop rings layer two by the way maybe it's helpful like we like to call loopering a layer 1.5 um and actually not just looping all zk roll-ups it's kind of like like a thing in the space because of all the different flavors of scaling solutions and of layer twos zk roll ups are like the most conservative i'd say are like tightly coupled to ethereum there's no extra validator set there's no it's not

just a side chain that has its own validators or stuff like that it is so tightly coupled to ethereum only relies on ethereum for consensus uh nothing else like it doesn't require anything else so we like to call it layer 1.5 maybe that's like a nice mental model okay so so and it's 1.5 because the only security i guess assurances or the only um the only security that loop ring relies upon and zk roll ups rely upon or that of the ethereum main chain there's nothing else no other counterparties apart from that is that correct that's correct with an asterisk i should say plus zero knowledge cryptography you're relying so you're not relying on

like this new economic system and hey you have to stake this token and good behavior and bad behavior it's ethereum and just ethereum plus zero knowledge cryptography from the 1980s or like you know updated by the great other teams working on it like zcash and and all these other great things but ethereum plus this branch of cryptography equals zeke okay roll up very good yeah it's important to know that like when you say it's like a l 1.5 and that that zero knowledge cryptography component the reason why that zero knowledge cryptography component is what it is and why it's so cool and why we like it is because it doesn't add or change any assumptions about security right and so therefore

the security of a loop ring or a zero knowledge l2 system is equal to the security of ethereum under proof of work in its current form and proof of stake in its in its staking form right and so there's no additional trust mechanisms under the loopering system and so it is inextricably tied to the security of ethereum which is really really important especially when we talk about going bankless because at the end of the at the end of the day there's always some trust assumptions somewhere in all economic validation and loopering and zero knowledge doesn't change that and that's why we like loopering thank you and very very well said uh we

we are not implementing any other trust assumption of course i [Music] like i want to be conservative and say you have to be comfortable with the zero knowledge cryptography which some i won't say conspiracy theorists because it's not always the case but you have to be you have to be comfortable with the fact that like our trusted setup right this like computationally heavy thing that created the first like the proven keys and verification keys that that wasn't corrupted right like one person out of n was faithful and throughout their toxic waste i don't want to go into those weeds but there are i just want to you know to avoid irritating some people you have to be comfortable right saying like i trust zk snarks right right like as so yeah and in that case yeah then you

get the guarantee that no matter what if loopering ceased to exist or turned malicious or anything was leaned on by state-level actors a user of loot brings zk royal up the next day when they wake up and you know stuff hit the fan could always retrieve their assets if ethereum exists they don't need to ask anybody else hey can i have that piece of data that shows that that was me on your layer two environment no ethereum houses everything needed for a user like what are we all worried about what about the worst case scenario when loop ring or an application on top of looping turns malicious or disappears or gets pressured it doesn't matter if ethereum is there users can retrieve their funds right so secure and secure because crypto is magic at the end of the day ethereum

bitcoin these all work as well because crypto is magic right just a different branch of crypto um so that's what's uh zk rollups uh zk snarks that provides all right so we're trusting the crypto but nothing else we're trusting the ethereum main chain but nothing else so just on this thread we were warping into the loop ring world right so our initial transaction there's some initial transaction where we have to move from metamask to the loop ring world that costs some money right he tells us about that and then what do we get when we're on the other side in this roll-up environment right okay so yes it does take a transact an on-chain transaction and i like to say that this maps your ethereum address um

rsa.eth oh i'm actually happy oh rsa huh wow i get that yeah yeah i always give this example where i take the person's name i'm talking to and i'm like okay matthew.e i'm like i'm not sure if that's actually him nobody like try to try to de-anonymize him or whatever but i guess yours is out there so yeah you can talk to me it's fine it's already been done so so rsa.ed must make a transaction that asks the loopering protocol the set of smart contracts on ethereum that are open source and says map my ethereum address to a slot in this off chain environment specifically to a slot in this merkle tree okay the database where stuff is happening in the zk roll up that costs right now

274 000 gas okay which is like depending on who you ask cheap not not that cheap like it's like the like whatever at today's gas prices it's not cheap in dollar terms or eth terms like right it could be today today it might be 15 okay yeah at the height of the craziness uh a few weeks ago it was like 60 bucks uh to create to create an account which is a pretty steep feat just like get in the door um like uh so i'm glad to say i don't want to um uh i don't want to scare people too much in our upcoming version like our first ever upgrade since our zk roll up was

deployed in december version 3.6 is coming out it's about to enter audits right now that 274 000 gas will be reduced to below 5000 gas wow yeah so like i'm so excited about that like that we won't scare people right right at the door um so yeah but that's an on-chain transaction that maps rsa.eth or the hexadecimal address whatever it is to merkel slot id number 5041. whatever just like so that's how you enter that so then we're warped over at today's gas fees it it costs us about 15 to get into that new world uh in the future it could cost less in terms of gas

then when we're in that new world what are the fees for doing things okay so i'm afraid to say you still have to pay gas one more time okay you're in that world you have like your nice little house on layer two but you have no assets there um you need to deposit assets into your little merkle slot so that takes another on-chain transaction i believe that's about a hundred thousand gas um but right now so you have to deposit five ether one hundred die like whatever you're depositing it and forever more if you're going to deposit today and tomorrow and the next day it's an entrepreneur that's why i advise people to hey you know don't deposit 30 cents right now if you can deposit

something that makes you this not be a meaningful chunk out of it out of the gas so you deposit your assets and there now you're set up you're there on the layer two you have you have your merkle slot um and now you have your assets from there on is where the magic happens you could trade gas-free like you'll never see gas on the roll-up you'll only see gas again when you either deposit more assets or withdraw assets so basically when you're interacting l1 to l2 or l1 to l1.5 is when you must pay gas we cannot solve that we could reduce it as much as possible which we've successfully done for the upcoming

version but you will still have to pay gas and be subject to ethereum confirmation times etc but in the zk roll up you can make a trade where we will charge you a trading fee but it's a flat trading fee akin to buying finance or whatever basis points 20 base like right now a taker fee for looping is between six basis points and 20 basis points for a taker or zero fee for a maker if you're adding liquidity to the order book but basically you don't care if gas spikes to 750 gway tomorrow you're laughing because you're like ah i could trade or my you know fixed little proportional trading fee and uh finally i'll say you could also

do transfers i don't so again we started out as a dex protocol where all we cared about was trading then in may or june they said hey once we're on there wouldn't it be nice if we could transfer to each other we're like yes so we implemented that you could transfer to anybody else on this layer for free that's zero zero fee completely so no gas and we actually don't institute a little uh fixed uh percentage at all so fully fully free for transfers that might change one day because there is still a negligible fee per transaction that we are covering right um loopering we could get into actually what is the fee that loop ring is paying because i think it's instructive about how this actually works but yes that is on layer

two is when you go fast and and free or gas free and you don't worry about gas until you want to withdraw and pay a gas fee so very good oh go ahead david yeah so let's summarize what we're doing so far and i kind of want to put this into into different words that that people might be might be more useful and so for for listeners who are are hearing about this and are like this is a brand new world like this is new to me like i don't know what to expect you actually do right and so the first transaction that matt talked about where you get your slot in the merkle tree that's creating an account that's creating a bank account in loopering that's your loopering account and you kind of mimic this behavior when you sign up for coinbase

and coinbase gives you a deposit address or you sign up for binance with your email and password and then you binance gives you your ether deposit address right that's the same thing but instead of signing up with your email and password this is the bankless alternative where you make a transaction on ethereum right and so no email no password you just make a transaction for whatever whatever that costs 15 to make your your loopering account which now replaces your binance account now replaces your coinbase account and so therefore you've opened up the account and then mike and then matt said okay then you need to make a second a second transaction which is where you deposit your funds right so after you've made your binance account you go to your deposit ether deposit die deposit usdc you copy that address and then you send

your funds there that's that's what he's talking about and then your account on loopering is funded right and then just like on on you can do anything on on coinbase and binance you can now do on loop ring except you have the the main difference is that you have the securities of the ethereum l1 which is what you don't have on coinbase which is what you don't have on binance you're with coinbase you're trusting the nation state and regulation and then in binance you're trusting cz right and on loopering you're trusting ethereum proof of work and proof of stake right fundamentally different but still the same experience that you've ever had and so and and what matt is saying is like sure we were a a dex protocol to begin with but there's nothing fundamentally

different than just like paying people right and so now that we are in now that we have our loopering account not only does it act as a binance or a coin base but it also acts like a venmo right and so now we can just start sending people money on our loopering accounts to their loopering accounts and at zero gas fees right and so that's that's where we are so far in in this explanation if you want to put it into different less crypto magic terms well said sir that was a great summary david um you poached him [Laughter] it was inevitable you know just it bankless sucks people in it it did the same to me it's not dna yeah so all right so um that is so awesome and okay so just so that we wanted to

set the context so everyone understands like how powerful loop ring could be and by the way david you've had this theme a bunch of times i just want to add this because i was thinking about it when you were saying it um you know what's super interesting is that potentially in the future fiat could come in from the other side it could come in and get injected into this new world rather than having to go from coinbase your fiat to the ethereum main chain to loop ring well what if loop ring or some third party set up a nice way to beam your fiat directly into this loopering world right wow now you have a bank account essentially a bankless bank account and you're paying almost no transaction fees that's super cool and i bet i bet

bloopering it or others are thinking about that um but so that so this doesn't turn into a uh a bankless podcast with just david and i we have a ton of questions rolling in matt so i'm gonna start with one uh hello gents will metamask soon integrate loop ring or other layer twos without metamask integrating this adoption will be difficult metamask for some of its warts you know is still the primary tool that many of us use in going bank list that nice browser extension is there a way to get loop ring or other layer twos into metamask sir yeah really great question

and i definitely cannot say anything with certainty here not because i'm being a coy but because it's uncertain metamask will pursue its layer two strategy inevitably i believe that they will be agnostic or kind of you know more flexible in what they support it will not just be loopering there's many other scalab scalability solutions that are amazing um specifically in our flavor of zk roll ups there's matter labs zk sync um so that's matter lab's z casing product there's square um you know where it also tries to scale it does scale exchanges and payments so

what metamask will integrate i view it as you know when you see which network you want to connect to whether it's uh rinkeby or kovan or mainnet or it might be extinct and matter absolutely yes sorry i was just focusing on like the zk or the validity proof ones but yeah i view that i don't think metamask is going to say this is what we're going with um i think i could be wrong i think they will have a few you'll be able to choose your network and ideally we the scaling solutions will make it easier on metamask and other wallet integrators we will create bridges between each other uh loop bring to matter matter to to starkwear and then

to x dot like i think first we might see like zk to zk once it might be be able to speak each other's language but yeah that is to answer the question simply i think they will they will integrate a bunch of them but i i agree like we need to be integrated where the users are um absolutely yeah and i just i i bet that question has the follow-up question on his mind when sir when do you think this is going to start happening i've seen metamasks for instance on their mobile edition they've got some layer two options now david mentioned next eyes layer two i know that's a layer two and yours is you know zk is 1.5 but when sir when do you think that's going to start happening do we have a fire under us to get layer 2 solutions into our

wallets right i dare not answer when in concrete terms i simply do not know i think there is a fire kindling under them they know their users uh really well and what pains them so i think soon tm but let me say this something that i could say and not equivocate on is we are not waiting for anybody to integrate us we want to put our solution into the hands of but we want to offer something sooner than than later we have been working on a mobile smart contract wallet with loop ring zk roll up tucked into every nook

and cranny whether you're doing a transfer it's on the zq rope whether you're doing a trade it's on the zk roll up this loop ring wallet right this is what i said like our identity is expanding we were a dex protocol now we're a layer two protocol but now we're like a wallet product well you're you're like a layer two banking mobile right and and now we don't just want to be the rails and the infrastructure but we say also here's an app that like you normal folks like in a good way you people that we need to use this could could use so we have this loopering mobile wallet that i'm using right now which is so awesome it still is rough around the edges we hired a new ui ux designer to to polish it but i

hope that we could release it to a significant group of beta users by the end of this month and i'm not saying like this is going to replace metamask surely metamask is going to continue to be a leader and all these other great wallets and we need them to integrate loop ring but we will also offer our standalone looping wallet with us tucked in natively and that i think that'll happen before metamask integrates us because i'm hoping by two weeks from now we could put that in the hands of some users well if you are looking for some really excited beta testers i think i know the uh the community or should i say the nation who could help you out with that so uh let us know when you're releasing that um i've got a follow-up to the to the questioner so uh what

about the impact of eth2 so it seems like heath 2 is actually on the horizon um what impact does that have i guess in the short run and then in the longer run for loop ring yeah very good question um and uh okay so it it's so it's this is like a big topic but the first thing is and this is kind of just interesting to hear about like blueprint team operates taking eth to success completely for granted right like we don't say like oh this is like if this happens we believe that ethereum two will happen as i'm sure a lot of these listeners do so our solution is made for eth2 as well as as it is for each one uh

like when that migration happens things will continue to work the effect of scaling like and this has been like well discussed already we need base layer to scale with eth2 plus a thriving layer two ecosystem for the whole world to get on ethereum you need both right some people say will eth2 uh obsolete layer twos no you need both and the effect the scaling effect is multiplicative um this is something vitalik likes to talk about if you have a loop ring zk roll up running on shard number whatever like running on a shard then that is now a more scalable environment right i guess i am not smart

enough to know how this actually plays out like is there like is shard number 11 the loop ring zk roll up shard and like we're kind of occupying that completely or are we like across multiple shards and how so i don't know enough but the effect is multiplicative multiple shards with multiple rollups on it it's it's a multiplicative effect okay i'm going to ask you i want to ask you a follow-up to this right so uh because we have we've had hussey bonds the community knows about this idea of different shards and how you know some could be like the analogies like cities and some could be more farmland right more empty but i want to ask you a question because this has been uh in my top of my mind about before all the way we get to to eve 2.0 right and we have

the shards and they all have some version of an evm running inside of them okay so face 1.5 seems of of ethereum right seems like it could be a magic phase i think for some of the roll-up tech because what that can bring is a data availability layer to roll up tech is that true does that help something like loopering something like zk sync tech right yes so that's a very good point except just to make sure i understand the data availability layer of a roll-up whether that's zk or validity proof like

zk roll-ups are called are validity proof roll-ups right all state transitions are being proven with the validity proof and then they get committed the chain optimistic roll-ups are another flavor of roll-ups where you don't have a validity proof first you put the stake and then you wait for people to challenge you you're optimistic that this person that committed this is truthful you're happy-go-lucky and then you have a period of uh fraud challenge ability so i don't want to get off track but a roll-up solves the data availability problem with ethereum if you do not put data on ethereum you're not a roller so we and all the other zk roll ups and all

the other forthcoming optimistic roll ups that are going to be very exciting all of us put our data availability on ethereum so um i when you say could this solve the data availability problem from a rollups point of view the data availability problem is solved ethereum is the solution it's slightly more expensive right like a plasma that does not commit this extra data to ethereum could go faster but they lose that extra guarantee so so sorry i don't want to um i'm not sure that answers your question and i don't know specifically about phase 1.5 but rollups will continue using ethereum as their data availability layer that's what makes a

roll up a roll up got it and i was i think that so my thought with one 1.5 is right so two is fully fledged edm and we can actually run you know um state transactions in eth 2.0 right but before that a number of things happen you know phase zero is this proof of stake phase you know phase phase one is kind of the networking phase and you know with that networking phase i i thought there was possibly some room for more um roll-up type transactions to be stored on the ethereum chain prior to phase 2.0 um yeah is that the case or i was always sort of hazy on how

the rollups would actually work with an earlier version of each 2.0 does that make sense i know we're a bit in the weeds so if it doesn't we could just move on but no no i i think actually you're you're right on first of all i'm not like an authority on this at all but now i see what you're saying a bit better is roll ups will have more room yes for data availability before all of before the final phases are complete more shards will be able to be used as data availability which is good for roll-ups yes absolutely uh that's a very good point very cool all right um let's jump to another question david before we move on actually the the question um that that we were we've been circling around is

how does eth2 impact uh loopering and vice versa right and when we when you're initially giving your pitch where you make you make your loopering bank account right like you make that transaction that first initial transaction where that gets you a seed slaw in the lubricant merkle tree that costs fifteen 15 that's today's prices and like the main benefit that i see on with eth2 and with the own with your own shard is that i don't expect that to cost 15 anymore and that's actually really important because like some when we talk about um what ethereum really is as and it is many things and one of those things that we really like to rally behind is a tool to bank the unbanked right like if you don't have a bank account well then you

can just buy one on loopering for the cost of whatever it costs to make a a loopering account and fifteen dollars for the you know fifty percent of the world is a large sum of money right but if we can open up a loopering bank account which allows you to trade assets for one another which is important like these people aren't like speculating but they do need to swap currencies in in certain ways especially in the future when that becomes more accessible and they also need to store their value and pay people and so have going from a bank account that costs 15 to open to 15 cents to open all of a sudden the bottom 50 of of the world in terms of wealth is this becomes much more accessible to them and

so they can actually use loopering as a place to store their wealth and send money around to people and ethereum 2.0 makes that much more accessible to a lot much wider part of the world population very good point it absolutely it will reduce the cost or i hope i'm assuming like usage and popularity doesn't overtake the scaling of of the base layer that's true but again we are not going to rely on anybody we did the work ourselves to reduce the gas cost to spin up an account so even before eth2 it should cost cents as soon as i hope december

in 2020 i hope you'll be able to onboard to loop ring or sense which would be crazy so right awesome that's that's what i'm looking forward to as well um so so matt the vision i have in my head when i think about l2s is uh and this is my very american-centric uh attitude or or interpretation of this but like i always envision the santa monica pier and for those that don't know the santa monica appears this famous pier in california that has this very very long like walk out to this amusement park right and so like you're you're on the californian coast you're on the pacific pacific coast highway very popular a popular highway very congested highway and then you come across the santa monica pier you park in the parking lot and then you walk out to the amusement

park that's at the end and that takes a while that's like a mile it's like a mile long pier it's ridiculous but then once you're there there's a whole amusement park out there there's like there's a ferris wheel there's a roller coaster there's a bunch of activities right and so i view this long pier that's away from the body of the main traffic of america as like this bridge that you have to cross but then once you're there there's all these activities and what's going on in in in the loopering pier the the loop ring like uh here is that there is an exchange and there is a payment vehicle right so what else is going to be built in the loop ring pier like what else is coming to like the the uh the uh carnival the festival that is loopering

yeah no real really nice analogy that's that's perfect i'll probably steal it and um i think what we so okay the first thing i'll say is we will support other types of trading first this is an announcement we made last week that 3.6 this version that will also reduce the gas cost to get on board we'll be able to support amms because right now we only support order book trading which is really cool and we believe will like remain the dominant form of trading like you know 50 years from now when all trading is happening on ethereum we think it'll be order books on layer twos or layer threes but amms as we've said before this apex predator that has a

merged in like the you know the mucky slow jungle we could now take that and make it much cheaper on our zeke roll which right now is not possible like anywhere else people have been hoping for optimistic roll-ups which i don't want to have to like describe that or get into the weeds why but let's just take it for granted that it's more generalizable that's a nice property of optimistic roll-ups it's not as constrained it's a wider pier let's say or it has more like somebody could like more easily spin up a carnival ride on their pier ours is like sturdier like it won't like sink but you can't uh like whatever um so now we will be able to have amms like pooled

liquidity trading on our z girl so that means like our exchange today which is still doing you know about could support the long tail of assets just like uni swap does very well but we'll able to we'll be able to do that so when a user trades they're not going to pay you know seven dollars in a gas fee they'll pay again just six basis points um so that's the first thing our pier is getting like we have like a mini roller coaster and we're getting like like that's the exchange like we're getting a much much better one that people could play or are you guys building that that second uh roller coaster like that a amm or someone else building that is like a uniswap or somebody coming aboard and

doing that right yeah so that's the big question that everybody asks it's kind of a mix of both we are not building the loop ring amm but basically our zk roll up will be able to support everyday users like you ryan or you david or you you know team a team building an amm can implement their curve on layer one with the trading logic settled in layer two so l1 still houses like the curve let's say it's the balancer style curve um so so yeah the way to think it's not like we are going to uni swap is not coming to loopering

wholesale balancer is not coming to loop ring wholesale but people will be able to create a balancer style pool or a bank or style pool on layer one that has its trades happen on our zk roll up i'm not sure if that's clear this is a week old i haven't have had a good way to like really explain it yet but yeah it is not some proto some protocol like in earnest porting over to us it's just that now we could support settling those trades on our layer so one of the interesting things about l2s is that they are in my mind they are going to start to mimic l ones right like all of the

carnival rides all the all the attracting attractions that you would find in disney world in the l1 you would also find like in in the santa monica pier uh you know smaller disney world right same same same products just at a different scale and also in a more uh smaller but in a more scalable fashion right but in in my mind like it seems to be that loopering is really the the team that is building out all of these things is there a way to open up uh building on the loop ring l2 to others so because that's where really composability comes from like one team there's no way that one single team could have built all of the all of the activities that you see on the ethereum l1 and so if you just

loopering is the only one building on your guys's l2 that would be not as explosive as in a developmental process as if anyone or everyone could build on on the loopering l2 is there any plan to open the loop bring up l2 up to everyone yeah uh completely agree um but i will i'll i'll clarify one thing anybody can build on loopering right now it's an open source protocol it's just there's not a million teams doing it because it's it's somewhat difficult uh is the first thing and it still somewhat restricted what you can build

you can't build your arbitrary carnival ride on us yet right so like if you have a new idea for a cool game which indeed all these new things are games happening money games but like you cannot just arbitrarily build that but what like the extension to what uh ryan just asked is anybody will be able to create their amm pool with the logic settle the looping like anybody they'll create the um you know like a david token plus so i i understand that that's not as elegant or like explosive as somebody building a whole new style of game but what you will be able to see is anybody be able to create a pool which is like a mini game like with like a different a

different style of game but but here's the thing like loopering is an open source protocol anybody could build like right now all people could build on it is an exchange or payment application the thing we haven't touched on but it's important to note is zk roll ups scale and optimistic roll ups too but roll up scale by that which we described that ryan gone to when he does a transaction it is like he like one little person gets on a plane and then somebody else does a transaction and they get on a plane loopering has this jumbo jet that could fit to be exact 4096 people on it those are transactions

state updates before like somebody has to fly that plane and take these people from the merkle tree back to ethereum to update that contract where it says hey now ryan doesn't have 100 die he has 98 die but like a david token or whatever right david token is going to be worth more than two divisions like loopering a portion of our team is that jumbo jet operator literally they are called the operator or the relayer they aggregate those transactions kind of compress it let's imagine we shrink this jet and then we

suffer the gas costs the fuel cost to land this plane on ethereum that says hey this is the new state of the world and ethereum says oh great thanks now i update the contract with all the new balances so loop it is not easy so i want to wrap this up like it's not easy to fly that jumbo jet so even if somebody were to build something they still have to do that hard part the off chain part remember we scale by doing so much off-chain that is why we can't be as explosive and creative and composable as ethereum itself which is just unchained every where zk rollups scale by doing 99.9 percent of everything off-chain in an

aws and google database just in a computationally correct and provably correct way but then transmit so that is why you can't see this you know cambrian explosion of innovation right because you need that off-chain thing you say hey loopering team can i fill up your jet with these types of transactions and either it's like we say no or it's like physically impossible like you cannot fit that giraffe on our jumbo jet i'm sorry but the point is anybody could also operate their own jumbo jet right they could be like hey i'm a really smart engineer i am going to build i'm going to operate my own jet that takes me from a merkle tree to ethereum using the loop ring rules right that would be a different

implementation anybody can it'd be a different loopering implementation a different pier and it's it's just it's just different pier they could be connected you could have a little uh a little boat that connects the pier so you don't have to go back onto the congested highway you could have like you could have a yes um you could have that and like uh that's a bit shoddy in my mind how i can say like that will be more and more possible peers being connected and not blueprint matter and starkware but yeah i hope that's clear i hope that wasn't like uh uh too long-winded that is the problem doing everything off-chain means like you have to speak to us humans to do stuff it's

not as simple as ethereum that's the problem right but you do get your uh your super strong economic securities that way as well like that is the trade-off right exactly i think the uh the community's really digging your excitement on this stuff uh matt it's like it's palpable and you know i'm getting excited hearing you talk about this and this is a question from above average joe so there's this great post that came out a couple weeks ago about the ethereum being a dark forest i don't know if you caught that or not but it's basically this idea that you can always get sort of um front run possibly on the main chain by miners it's this whole idea we've talked about before of minor extractable value

mev what sort of dark forests and pitfalls are you aware of with loopering right now is there a way for somebody flying the jumbo jet as you said on the edge of the pier with so many analogies going on right now but uh we'll work them off is there somebody to front is there somebody who can front run you in this kind of setup as a minor kid on the main chain yeah really good question above average joe and by the way i love that dark forest post and i love the game that zero knowledge dark force game that happened because i'm obsessed with these books the dark forest comes from the three body uh problem trilogy and three body dot e is my oh i didn't know that yeah wow i did notice that

so people uh yeah so it comes from that um which are just awesome books everybody should read them the dark force is probably the best one the middle one um anyways yeah front running could happen but in a zk roll up context or in loopering as it stands today it is the jumbo jet operator the the roll up operator that could front run you he could say or like we could say you know when you're getting on the playstation no you go to the back you sir sit up front uh you're first class like we are literally packaging that plane right we are producing the zk roll up block like maybe let's move away from the jumbo jet like we are aggregating this block

to compress and then submit the the smaller and validated form to ethereum we could front run those transactions uh i'll say it very plainly that is a risk so it is the same risk that exists on uh coinbase or binance when you press trade you cannot be front run by ethereum miners obviously you're living in some centralized companies database but they could be like ah nice trade you know david gmail.com i'm gonna do that first right and they'll front run you and then you you know lift a worse offer because they from right we could do that right now we've been doing so that we can say no like you're not getting on the plane we do

not like you uh like we see that merkel slot 5040 is rsa and for whatever reason we don't want to put you on the jumbo jet today that is a big risk um and david and i have discussed this in the past so this this is not censorship resistant the jumbo jeff operator allows who could come into their to their plane i will say though before people are saying ah that's uninteresting it's looping protocol supports multiple jumbo jet operators so if ryan doesn't get on my flight he could wait until it's the next operator's flight to take off and they may not have a bias against him or may not so

loopering protocol solves that problem by allowing any operator to pick okay i'll i'll submit that next block but to be frank the loopring.io product right now is only being serviced by one jumbo jet operator the loopering operator is servicing it um but i just wanted to be clear that the design allows for censorship resistance by allowing multiple people to submit blocks it just so happens that we don't use that right now because frankly our users don't demand that they don't think we are going to front run them the deterrent to that is just like business reputation and not being hated right if you rsa try to send a transfer to a trade and you don't and like it's not working

you're like this product that sucks i'm out of here uh but yeah you do not have those um so that is the risk the operator could front run but once that jumbo jet is packed and it's taking off to ethereum when that jet lands on ethereum it cannot be reorganized the block that the zql block cannot be reorganized a miner if they include it they're going to include all the state updates at once so yeah i'll leave it there very good okay so another listener is asking the question about composability interoperability in fact this is like a number of different questions are are coming our way on this topic so maybe you can address it so the question is is there going to be interoperability

between the peers right between the ovm optimistic roll up we just had kane talking about that that's going to be on our monday episode podcast is talking about building an optimistic roll ups and the ovm and loop ring so our like composability are we going to be able to preserve that in d5 or at least a bridge between some of these layer two layer 1.5 solutions yeah that is the big question um the short end like these things break composability uh in the near term there's no like soft way to put it they break composability you can even just conceptualize it right

it's actually i wanted to mention this in the sharding question it's not too dissimilar from how i conceptual conceptualize shards right same way everyone said oh is there going to be like a defy shard everyone is going to live on a shard of course cross-shard communication is going to happen but some people still assert which i believe to be the truth it's best to be on one shard so it's still best to be on one roll up at least for now i again take for granted that cross roll up communication will happen i think first it might be validity proof roll ups to validity proof or zk roll up to zk rob and then zk to optimistic um communication must happen but yes

composability is broken let's be blunt it is not as composable especially in zk zk again on this layer two spectrum or we're even on a different one layer 1.5 zk roll ups are the most restrictive because everything has to go through this black box crypto magic that we said we trust and you can't just jam anything through there you have to like fit it's like um you know it has to follow a specific shape for you to get a square square peg in the square hole it is not that yeah exactly that's exactly right um [Music] uh okay so i mean that is the biggest trade-off like the

reason why there's not a million users on zk roll up on on loopering right now is because you can't do everything you want to you could only trade and you know we have limited liquidity to start and you can only transfer by the way i should say right now you could only transfer to other people on the roll up i could only send money to rsa.eth if he has registered in the upcoming version you could send to any ethereum ad really wow and if you send to another experience it's really annoying to not be able to do that that's that's incredible and if you send to another ethereum address who's on the main chain is there an additional fee for that for like reporting from loopering to the main chain i would think there would be right

so basically if i send rsa.edu i'm on loopring i send a completely free transfer to rccd you would have to be notified somehow the same problem of like not knowing when your ethereum just gets them although there are solutions or you can have an app that does it but i would i would text you hey ryan i sent you something a loopering you would go to a loopering integrated wallet or loopering.io itself or the looper wallet or metamask when it integrates it and you say hey i have a hundred di in there i want to withdraw it which would cost you money it would cost you money with a drop or you could say oh let me just on board onto this layer 1.5 for 5 000 gas so i'm

not forcing you to come on i sent you money it's in your address it'll always be in there if you never claim it it'll be on the layer the layer to the associated slot and it's up to you do you withdraw because you don't care about this layer two nonsense or do you on board yourself uh yes so so let's recap that real fast that's how that so so i have a loop ring account and ryan doesn't ryan doesn't and i send ryan uh his ethereum address on loopering uh which he doesn't have which he hasn't created yet he hasn't made that account yet but i send it there anyways and the reason why i would do that is because only the owner of the rsa.ethe ethereum address would be able

to collect those funds and so it doesn't matter that he doesn't have a loopering account he can go make one and then claim those funds or he can just claim those funds anyways without making an account or he might as well just make a loopering account to claim those funds but like it's uh the assurances that lubring provides is that only the owner of whoever rsa.etha is whoever that guy is only they can claim the funds that i send on loopering they just have to go get it perfectly said again you're you're so good at this um it's not that cool to think about this me just sending you know rsa.e one thing because that might have even in high gas prices a transfer is still you know in our privileged at least western work like a couple bucks like max max but

imagine you want to send the bankless nation you know one dollar each then you would want to do that on loop right and hey totally even if you don't have your account set up go there either withdraw or onboard yourself so yeah exactly said um just to be clear we don't have that functionality right now because that's very useful for payments and remember payments just got tacked on to the loopering protocol recently we were always exchange focused where it made sense that a user was coming on to onboard themselves like you go to binance.com because you want to onboard but like venmo it's much more interesting if you could send money to anybody in the world or anybody on ethereum not if if they've if they come there so exactly said one other point i

want to mention to that to that last question a way that we will be able to preserve composability which i view as a bit of a hack um a hack in a good way not the not the bad way is right like all of the die on loop brings zk roll up right now let's see there's a million dollars on luke brings layer 1.5 right now it is just sitting there we could allow people to earn money on that die in a scalable way kind almost in in the wifey way of it by just aggregating it we take those that die and we say hey everybody we are putting it in the dsr or

let's use hey everybody we are putting this heath into the why eath vault so all of that so it's kind of like i'm not sure if that's clear but we could take all of the idle funds that are sitting in the roll-up missing out on all these great farming opportunities in the upcoming version the deposit contract the loopering deposit contract which lives on layer one could speak to other could speak to other it could speak to ave it could speak to compound it could speak to to wifey it could do that so taking the bulk fees the bulk idle assets and putting it to work i didn't realize that so that's super big so when you cross the pier and you're in this amusement park of loop ring right basically you're saying you

could still have access to all of the d5 money legos not directly but say there might be a button in the amusement park that says i want to take my a thousand dollars and die and i want to park it in the dsr i want to take my you know thousand dollars worth of youth and i want to park that in the the y eth vault you could do that with potentially this is not here now but you could do that with the click of the button while you're you know across the pier in the amusement park exactly right wow exactly but to be clear it'll all it it'll only really be scalable though if other people also press that button

because we will again aggregate those button clicks and say okay we are depositing your your eat your eats your ethioris all into the why eat vault at once if it's just you you will not have a scalability benefit because it's just the equivalent of you withdrawing your eat and putting it into the why eat ball that's why what may be very interesting to be frank is to just do it forget the button when you enter an application built on liberty and says hey we love wifey we take all eth that is resting in the deposit contract and put it in there for you if you are not comfortable with this maybe opt out or don't use this product but like by default it's there so your is earning money you don't click a button and that way we for sure get that scalability benefit

because we are batch pushing all of that at once so many possibilities with this it's super exciting hey matt we've gotta start to wrap this up and close it down so we're gonna do a few quick lightning uh questions maybe we have time for two or three left um all right so one question is if you could have any problem solve with the snap of your fingers what would you solve what problem snap your fingers it's done oh i guess it's boring because we spoke talk about it but i want to be able to do anything on the zk roll up somebody asked me yesterday if they could register enf names in bulk and i'm like no you can't i wish i could say yes yes yes anything you want to do scalable and as you can reload that's that's just not

the case as we learned very cool what are your favorite uh other defy teams in the space who's who else is doing great work that's another question oh yeah i'm such a fan boy boy of so many teams and i'm a user of many products um i mean i'm a real big fan of of wifey i don't want to give like the the cool answer du jour but i'm a real big fan of that um i'm a fan of our zk roll up compatriots of of matter and starkware and all the optimistic roll-ups that are coming yeah i really i'm really rooting for all of like our later two years to succeed uh so i

really i'm a fan of that i i'm a here here's a a unique answer i'm a big fan of the dx dao which lou brewing has been a member of since inception hold a reputation in there and it is it got off to a slow start like apathy in a large group and it was tough to do but now they're pumping up products uh i really like what the dxda is doing i view it as a very very value as is coming to light these days it's like a very valuable like almost like shell of like a governance scheme and it could do a lot it's almost like a like a spa like uh it's like a special purpose it is the most distributed dow to my knowledge like there's like i don't know 500 reputation holders

it's it's so like it's very robust it's like you know the gnosis team did a great job of like kind of setting it up and letting it free like i really am i'm really down with with the dx dow the dx dow will actually be launching a uh a product built on loop ring soon just like a front end but you know hosted by the dx now on enx ipfs so really like you know bankless aligned the front end cannot be subverted so yeah i i like that very good all right so um one last question i'm surprised we didn't get a couple of questions no questions on the lrc token which is interesting so maybe we'll have some follow-ups also no question on band protocol which has had some interesting uh in the news but but

perhaps that's fine matt so um last question is price predictions we're in a bull run people want to know the price predictions matt you sound like you're bullish lots of things in the bankless space give us a price prediction for end of year eth and then give us total locked value end of year and then also both of those things in three years and you are in trouble if you get these wrong [Laughter] yeah right oh man um it's true like i am an east super bowl uh i don't so much think in terms of like price pre i think like just the the next meant i think pretty simplistically the next like it has to be a trillion

dollars relatively soon uh eath market cap has to be a trillion dollars um that will correspond to i guess a bit less than a thousand dollars per coin um by the time it reaches that uh no sorry ten thousand ten thousand dollars uh yeah don't forget that zero 100 yeah um i i think eve has to hit a trillion um total value locked oh man i don't know because it it's too difficult with all these games now like siphoning liquidity it's like a hard metric uh i don't have about this one how about how about total

value locked in um layer twos yeah right so we just passed like 20 million i know it's like pitiful compared to all the bees that are being scared hey we were when d5 passed 20 million locked in defy we were stoked yep right we're stoked too yeah so we just passed that but to be fair a lot of that is just because of price appreciation which is the same thing for t like totally locked like yeah count it yeah count it for sure so yeah we have 20 million in we have 5 000 users as of yesterday um that's you know i am so excited by that i guess as some of your your viewers said um how much i want to have so okay once the loopering

mobile wallet is out plus version 3.6 that should be combined and like beautiful by the end of 2020. so let's look one quarter out from there so end of q1 2021 i hope there is 150 million dollars in our zk roll up awesome there it is guys we got the predictions too those are bullish predictions uh but they are exciting matt you're just a pleasure to talk to you my friend this is our first time chatting i know david spoke to you before but uh your enthusiasm for layer two and bankless and scaling is infectious sir you've made me yeah you've made me more bullish uh you know and i it's surprising it's

it's hard it is yeah i didn't know that was possible so uh we are super excited about what you're doing super excited about the project the bankless nation supports you one quick note to the bankless nation we still have um a a way actually to get reduced fees on loopering accounts so we'll include a link to that in the show notes we'll include a link in our discord channel also on the youtube channel when you click that i think you get uh there's it's something like your your trading fees uh you get upgraded to vip uh tier tier four which is like the highest vip you can be in loop ring and um trading fees you know are like point zero zero four percent so if you're doing any trading in the space

um like you know look they're building liquidity but the user experience is like that of a centralized exchange it's absolutely fantastic if you want to do it in a bankless way head on over to loopering and check it out and you can trade for practically free with those types of fees matt it's been a pleasure to have you thanks so much for being with uh the bankless nation for this ama thank you so much really appreciate the kind words there by the way i'm i'm blushing here uh really nice of you to say uh um thank you so much and i'll say that bankless code is now you're the last one to get it because like my team said hey stop giving out like our best vip tier that we make zero dollars on so you're you're grandfathered in but everybody like i

can't give those out anymore so wow exclusive very good that's what we like we appreciate it super supportive what you what you're doing thanks a lot thanks guys