Dankrad Feist: Ethereum Foundation – An Eth2 Progress Update #2 #397

Transcript

this is epicenter episode 397 with guest [Music] dankartfeist welcome to epicenter the podcast where we interview crypto founders builders and thought leaders i'm frederick anse and i'm here with brian crane and today we're speaking with dhankar feist who is a researcher at the ethereum foundation and heads the effort into sharding and state business updates for ethereum 2.

but before we talk about ethereum 2 with dunkrad we'd like to tell you about our sponsors for this week paraswap just came out with a huge update that's even faster and more liquid it's cheaper than uniswap and comes with a new gas token that can cut your gas fees by up to 50 periswab is now multi-chain and has expanded to polygon and binance marching start trading at powerstop dot io epicenter and also by exodus exodus is an easy to use wallet which supports lots of assets and has native apps for all the platforms including ios and android it's a fully non-custodial wallet they believe in not your keys not your coins and so yeah go to exodus.com and give it a try

and with that yeah let's let's hand over to dunkrod thanks so much for coming on maybe you can start before we dive into all of the technical topics do you mind introducing yourself a little bit and telling us sort of how your journey has come to working on ethereum yeah hello uh thanks for having me yeah my my journey to ethereum um is uh yeah a bit different from probably most people because i came to it uh quite late i'd say so i only started fully working in ethereum research around 2019 and before that i worked for all different

tech companies i had a startup and i was basically recruited into the ethereum research team after i had solved some research problems earlier for them and worked on them and yeah so basically since early 2019 i'm working for the ethereum research team it has been like a very fun journey and uh and i'm really enjoying doing research on the future of ethereum cool so we had an episode on ethereum two recently with danny ryan and we actually ended up talking about the merge and the switch to proof of stake for the entire episode but there's a couple of more

more updates that are coming with ethereum too so can you give us a very brief overview over the potential protocol updates and where they're at right now before we deep dive into them right um so yeah i mean there there will be um several more updates i think like the the really the biggest one that everyone is uh waiting for is the the big promised upgrade um of sharding um and so probably like um a while after the merge i don't know i would estimate between 6 and 12 months we will activate data charts which essentially means we are adding this very large data availability layer to

ethereum which means that you might have heard of roll-ups which are basically a system where you only post transaction data to the chain and you don't actually execute them you either use fraud proofs or zero-noise proofs in order to ensure that all this is actually valid and um and the data charts actually allow us to instead of posting that data on the um current very limited eth1 chain that will be merged into the beacon chain with the merge instead of posting it on there you can post it to um to these data charts and ensure like it's available and everyone can very easily verify that it's available but it will be much much cheaper because

you have so much more space available there this further to this um there will be a lot of work on on the security um of this so we will we we have kind of opted for this gradual rollout where we don't like um do everything in one big bang which kind of started with actually started last december with launching the beacon chain and we'll continue with the merge and then roll out of sharding and they will basically after that there will be many further upgrades which are probably a bit less obviously visible to the user because they're more security upgrades so we kind of

opt for this way of rolling out features first we start by like making the big rolling out the big features and then we add um everything that is required to get them to towards the highest security um so they will basically be um all the work around ensuring data availability and that's the the proof of custody and data availability checks which are basically um further upgrades that are required uh to make it uh to make data availability basically um fully incentive compatible like um to make sure that there are no um incentive problems for validators

before we go into i think there's like so much already i think that we should probably explore a bit more so you mentioned that the first sort of sharding is this data so data reality charts can you explain in so today right we have the existing system that we know and you know it's very much a capacity and the transactions are too expensive and you know it's a big pain for lots of for the users so when you have these data ability charts like how will they help scale ethereum and you know what kind of parts that gets executed today on ethereum will be moved there yeah so and that's basically going to be the roll-ups so um when you

you're already we already have several roll-ups active on ethereum now so for example zk sync um and others and basically right now the way they work is they um they post um so for example zika roll-up works by posting this blob of data on the chain that says like here all the transactions here and then at the end there's a proof that says okay this is the new state rule that comes out of it so with data availability charts you only have to put put this very last part on the execution chain you only have to put the part that says um this is the proof and this is the new state route on the on the actual execution chain and everything else um just can just go on

on the data availability shots so you basically save like a huge amount of gas that you don't need anymore to post this data but actually today i guess you don't have roll ups taking up a a big part of the block space no i haven't looked at the stats in detail um but i would suspect that um at least i mean they're still very very new right like um we we haven't had roll ups for a very long time but um i i would suspect that they would very quickly dominate the block space because essentially they allow you to do things paying about 100 times less gas so why would you do a transaction and pay

100 times more if you can do it for 100 times less and and of course since it's much cheaper there will be a lot more transactions right i mean it's a kind of obvious like consequence from having some sort of demand curve for transactions um so i would say the natural economic equilibrium should be that almost everything happens inside roll ups okay so um let's talk about the concept of of a shard right so is a chart kind of like a second blockchain that runs in parallel with the first one or how do i how do i imagine this so i i will i will answer this question uh from the perspective of um data sharding which is kind of this goal that we're currently working towards and

um there might be or they will likely be in the further future execution charts which will actually also be also an execute code um but that is currently like that that is several years in the future and um and so i i will not take that mainly into account because data shards already achieve a lot of what we want to do so from the perspective of the data charts that we're rolling out now you shouldn't see the charts really as as different blockchains because they will not come they will not kind of come with their own fork choice rule and build on each other and so on it's basically just you could say it's just additional blobs of data that you put on the chain

but with a special property and that property is that full nodes do not need to download these blobs in order to ensure that they are available like they it that we have a scalable solution that allows full nodes to know that they're available without downloading them how does that work so this is this comes from a very interesting um technique um that that is called data availability sampling and the essential idea is that you you can you can sample you sample small amounts randomly selected from the data and thus you know that very very likely very large parts of the data available

so this is obviously not enough because when you if you do that then you notice that oh like but 99.9 of the data being available is not enough because that 0.1 could be exactly where an attacker hides their malicious transaction that prints 1 trillion ether for example we need 100 and the way you do that is by encoding the data in a special way that makes sure that even if you only have 50 of it you can always reconstruct 100 and that is the key trick towards data availability that allows it to scale and that means that basically with a very small constant amount so it does not actually depend on the total amount of data that we ensured to be available

of these samples you can ensure that the full data is always available for download if you look at ethereum one you have miners and you will have validators after after the merge so how are the shards maintained are there also validators who maintain the shots yes um so validators will be randomly selected essentially so there there are committees um a committee is um is a random selection from the full valley data set and these basically validate the shards um they they are kind of i guess the right thing to say with data shots they are the first barrier this

this first group of people who like are responsible for checking that the full data is available and they need to do nothing else because there's no execution so they do not need to do anything except for knowing that the data is available because that's all the data charts do and the validators they are but but they only validate on the charts they don't validate on the main chain they do no no it's the same valid data so this is it's only one set of valid data so it's all the same okay and they both um they both validate the beacon chain and they validate the shots and um and this is this is essential like i mean this is one of the i mean this is why

why sharding is so important in in our terms like um it's this notion that we call shared security so like the essential part is we don't want i mean you could ask the question like well can't can't you just have like many different blockchains communicating with each other um and uh you get the same as charts problem is that you don't you don't get shared security like each of these blockchains only has its own smaller valid data set um and so has much less value securing it whereas like in a charter system the essential thing is that it's always the full value that is securing the the whole system there's no like subset that is responsible for one chart okay so basically

say i'm a validator now on on the main chain and i also then have to validate um the shards do i have to validate all of them or do i get a subset basically you get randomly assigned every apoc to one of them so basically it's you you have like a completely a completely random one that you have to validate so you don't have to validate all of them you will be on you will be will be validating all of them but each epoch you only apoc you only validate one of them and that is random so you are you're basically you are you're only doing the work of validating one of them okay so does this also mean that proof of stake is a prerequisite for for sharding

so the answer is yes and the the reason is that miners don't have any sort of identity so you cannot that the notion of assigning like a minor to a random committee and telling them like you need to validate this chart now it doesn't make any sense because they don't have any the only thing that identifies them is how many how much hash power they have whereas validators improve stake they have to pay this deposit and after that they have a public key and we can say like this is the public key that is now in this committee so in that way it is essential to have proof of stake for sharding okay and are all um data shards created equal or

are there different flavors and how many of them will there be so they they are they are exactly equal there's no difference between them the only way is how applications use them so there could be rollups which basically decide i only accept blocks that are submitted on a certain chart number which makes sense for them because then they need to check less data for whether it's relevant for them but but from the from the consensus layer um they they are exactly equal and how how can i make sure that my transaction gets sent to the right chart so this would this would only

be relevant um so i mean this is an application specific um detail but like but the answer the answer will depend on what kind of roll-up you use and it's i would say it's very likely that in most applications a user will not usually at least directly send their transaction to a chart or like to the validators even and they will rather send it to whoever is responsible for creating blocks of this rollup and they will then put it on on a chart so if i understand correctly the data charts are mainly targeted at rollups can i use this to store other kind of

data so kind of say for instance oracle data that kind of clogs the blockchain currently yes i mean i don't see why it couldn't be used uh for oracles yeah i mean you you have to think about basically the only thing is it would still be a kind of roll-up oracle i guess like so in in a way in a way it's it's all roll-ups um yeah um but but but i mean you can you can have many different kind of roll-ups like you could have like a contract specific roll-up like i mean actually many roll ups right now are very application specific right for example they only do transfers which is in in essence one application

um so i think the roll-up notion is not uh is not restrictive it can do everything it's just it's just an a way of implementing what you want to do when you want to trade tokens on ethereum make sure to consider paraswap powerswap is a decentralized exchange aggregator so that you can get the best price across multiple ethereum dexes and now periswap has just been integrated in ledger live this means you can swap tokens using your ledger directly from the ledger lite app no third parties involved purswab is also multi-chain and available on polygon and binance smartchain give parashop a try at parisrop.io epicenter we'd like to thank parisrop

for their support of epicenter maybe it would make sense to spend like a few minutes if you could explain a little bit like how do roll-ups work and what do you think the role of roll-ups is going to be in the future yeah roll-ups are essentially this notion that you use the chain only to ensure that data is available without itself computing the correct execution of the of the data so most obvious way this is when you when you use so there are two flavors of roll-ups right there's they're optimistic roll-ups and zk roll-ups or zero noise roll-ups so the way zk roll-ups do do this is

maybe the more obvious one like you put all the transaction data on the chain and then you have a zero noise proof that says this is the result of the execution of that and here is the new state route now you could ask the question why do i even need to put the data on the chain if i know that the computation was done correctly right why does that matter and the reason for that is that you need to be able to reconstruct the state as well as just the root like if you just have the root the problem is that the root is not enough to access your account you always also need a proof that shows that your balance in that account is x right you need this as well and you can only generate that

if you have the state so that's why it's essential for preserving this trustlessness that you that you also get all the data that's required to reconstruct the state this can actually be less than all the transactions so you can also in a ck rollups for example it can also just be a diff of the state it can just be literally like the difference in the state that you need to put on chain but that part is essential an optimistic roll up does it slightly differently it it puts all a list of all the transactions and in this case it has to be all the transactions even including signatures um on the chain and uh also adds like the new state route says like this is the result of executing this

um and then anyone can if if there was an incorrect one if there was some incorrect execution and this is not the correct outcome then anyone can pause the fraud proof that reverts this block and um and resets the chain to the previous state so that ensures that a fraudulent transaction can never be included in that roll-up to get some more background on zk sync and zk roll ups last week's episode was with alex kowski of metal apps so you can also go back one episode and check that out so democrat can i ask about the switch from full charts or execution charts as you called them earlier

to date availability charts because if i recall it correctly a while ago the idea was to actually have full execution charts that would not just make data available but also be able to execute smart contracts and then loop back into the main chain why was this abandoned or at least if not abandoned then kind of split into two into a journey of two parts right um so to be actually clear here i think doing these data shots first has always been on the roadmap but was probably less emphasized i guess uh several years ago it was thought that

this is like just a first step to kind of test the whole system out and test it under load and more and more um it has become clear i would say how awesome roll ups are like how what because they on their own already provide this 100x scaling essentially if they do if you do them well so in the end you could ask the question like why would you do why would you even do and like even on the execution charts why would you do anything other than rollups um so this is i would say why it has more and more converge towards this notion of well actually like the main the main advantage like the the huge scaling

comes when you have the roll ups and and and maybe execution in the end won't even be necessary but a factor of 100 i mean that's still not enough right i mean basically if you look at the adoption of ethereum right now and the potential adoption of ethereum and if you if you then also look at what the um what the gas prices currently are it seems to me that a factor of 100 yeah it's something but it's not a lot all right absolutely oh no no but i mean the the rollups can scale the current system as it is pre-sharding by 100x now once we add sharding

data shots just data shots to that then you get another like 100x of the data availability roughly like order of magnitude so now we add 10 000 x so that that is that is a serious amount of scaling to start with and that is not an absolute limit like we can add further shots um so the 64 shards is um is according to that that is that is just a constant um of course there are trade-offs and like um it depends on how much value we have at stake and also importantly how many users there are how many shards we can support um securely but it can be scaled further from that point so there's no that that 100 x is not

the limit that we are at let's go back to the execution charts so i now understand that the data availability charts were always part of the plan but what do you gain from execution charts that currently data availability charts cannot give to ethereum so i guess this depends um so this basically this depends on how far um zero knowledge proof technology will develop in the future so i think the main downside there are basically some downsides of optimistic roll-ups in terms of their finality into well i mean yeah so so basically they need this very annoying two-week

withdrawal delay that you can kind of work around for small users like that don't have too much value but but it's always going to be a problem like the solution is great for many things but it's not perfect so now if you if you have very good if we can get a very good xero knowledge virtual machine basically a complete virtual machine that you can run inside a [Music] zero knowledge proof um within the next few years then theoretically you can already with that um like build essentially what are execution charts

um from uh from what we have now and then potentially at that point getting execution charts might just mean nothing more than enshrining that um that zk roll up that is doing that um so that might be like a very simple step if we if we get there well i mean i'm i'm very interested to see the progress on this like the xero nudge proof space has like made really amazing progress and almost every year like delivered more than i would have expected um so i would i would not say it's impossible but it is still a very very difficult thing to to deliver the full the full kind of everything that the evm does now

in a in a zk rollup if we don't get that then execution shards might basically special kinds of shots where you essentially get much faster finality because the difference to like the problem with the with the optimistic rollups is that you have these kind of finality delays um and uh and if we if we do make validators responsible again for taking execution which is essentially what an execution chart would mean then then you would basically get um get this another settlement layer on on top i would say well it's super interesting i actually i would would love if you can speculate a little bit

on how do you think the sort of supply of ethereum block space and throughput is going to develop you know over the next year so and how much and when do you think those different technologies will start to have an impact i mean i think my intuition is that we can see the impact of rollups right now like we have seen this huge crash in gas prices essentially and i think that is probably partially because a lot of people have actually moved to roll-ups now for some simple applications which is amazing i i don't think the gas reduction on the main chain is going to last but the reduction on the roll-up is

going to last um so so that's pretty great so there there's basically right now at least for simple things there is already this um pretty much 100x uh increase in supply as long what as what you'd want to do is transfers of ether ether or esc20 and then the next the next very big thing from that will essentially be sharding so when we activate the data charts then um for everyone who uses rollups there will be another 100x increase in supply in block space let's get to our sponsor exodus exodus is a fantastic cryptocurrency wallet that strikes the right balance between

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communication is not an unsolvable problem it is just a a difficult engineering problem to get all the details right at least for asynchronous communication for synchronous um then then yes you have you have a very difficult problem at hand not an unsolvable one again but i think that that yes that essentially my guess would be that's not going to happen um that you will do synchronous communications across shards or in data charts world you actually have the same problem it's basically cross-roll-up communication in this case okay can you just explain synchronous and asynchronous

communication in this context yes so um asynchronous is basically um without like without a certain delivery guarantee like you can you can't so so synchronous communication would be what enables uh composability uh directly between charts um which i think um is is not is not a very realistic thing to expect in that in in this sense because um because it would mean that anyone can lock up resources uh on on the blockchain like i mean essentially what composability means is that you have this

lock on the on the whole chain in a way right way where only you get to determine what happens and i don't feel like this is likely to be a thing across charts um although very theoretically possible i mean in computing we have all the models to do that um it doesn't make that much sense to me there are all kinds of ideas to get around this um but i think the more realistic thing of how that will work out is that that you have certain ecosystems in certain charts or certain roll-ups that care about composability internally but not but are more loosely coupled

um to the other systems around them and are okay with asynchronous communication which is you send a message and it will be delivered at some point but you don't have any guarantee when like any absolute guarantee in practice it will always be very very fast but you have to consider this very worst case that could be delayed for a very long time okay so let's talk about composability across datashot so basically if i have um data within different rollups are these still available after the factor setup problem can these be accessed by other applications at a

later point in time yes so that is basically the way we've designed it it's instantly available to to everyone so there's no delay in in communication between um between the different data shots there is a limit in i i don't think i think it's theoretically possible to have some notion of composability between zk roll ups um i don't know if that will be built it's pretty much impossible for optimistic rollups to do anything like that however i think maybe one notion we should we should correct here that many people have so one roll up doesn't necessarily

have to be only on one chart so you could have a roll-up that basically takes up ten sharp blocks like every in every um cycle right and and essentially that roll up internally can provide full composability so it is not like we are limiting any sort of composability between the data shards as long as there's one roll up and um at least for zk roll ups we we can in theory build these big roll-ups um it's a matter of optimizing everything enough that approvers can handle this and are not too crazy expensive but you could you could have these huge roll-ups that provide internal composability at least oh cool that's that's super interesting

um to hear and i think this kind of clears up most of our questions around charting so i i'd kind of like to switch gears and move into the second topic for today which is statelessness so state business is another big issue that the ethereum foundation research team is working on so can you explain what the ethereum state is and how it's used so the ethereum state is essentially it it consists of on everything that is stored on the ethereum blockchain so it would be for example for you as a user it would be you the balances of your accounts it would be the balances in erc 20 tokens that you have but also any

other kind of data that is necessary for for example a smart contract to know whether something is valid um it's the code of the smart contracts um and all of these things those are all part of the ethereum state and um and at the moment every every node in the ethereum network has to store this because the only way to know um from whether one block is valid is to have the state and execute the all the transactions in that block and update that state and and and know that this was all done correctly what's the current state of ethereum so the size of the state and is

that in itself the problem i i don't have the very best idea of the numbers here because they also depend on on implementation details it's somewhere in the tens of gigabytes as far as i'm aware i've been quoted numbers between 10 and 100 gigabytes i i believe it really depends on what exactly how exactly you store it and you can do that more or less optimized it is a problem in the sense that already that makes it necessary because each block does a lot of state accesses right like each block um each single transaction already accesses like at the very least two accounts like the sena

and the receiver um and and so you have these hundreds of transactions and potentially like thousands of state accesses in them um and if you if you know anything about um disk io then like you know that for example a normal hard disk like you can't really handle that like each axis costs already like on the order of 10 or more milliseconds so like that is a very long time to wait and that is why right now um ethereum nodes basically need ssds there's no way around that so it is a problem right now it is also a much bigger problem is that you can do a dos attack against this and blow the state

up relatively cheaply to an even much larger size and so like a lot of our gas costs are have to be structured around this making this so expensive that it won't happen so basically the the goal for statelessness is to kind of go to a version of ethereum that doesn't have this humongous state right so how would that look like yes so to be clear the state will still be implicit and some people and this is something to be discussed further some people will still store that full state and the question of stagelessness around who needs to store that state and um and so one thing

that you can do basically with statelessness is to structure everything so that you can uh you can validate a block without needing the state like you can like just if i just send you that one block in isolation without anything else you can just from that information decide whether it is a valid ethereum block or not you do not need any other context than that and that is what statelessness does so how does this work technically wouldn't i have to have like some sort of representation of the entire state for that to actually work um so it works because we have cryptographic techniques that allow us um to commit to to states and very succinct

forms and like basically everyone knows about these they called merkel trees uh as is for example one of these um that's so basically it gives us this just 32 byte um what we call state route that that is a commitment to the state in the sense that you cannot find any other state that would would allow you to compute this commitment and and what statelessness does is it it gives you all the data that has been read by the transaction including so-called witnesses and the witness is a proof that this is the correct data given the state route and you have the state route like you

know that because it's only very short so you can just have that so that's the only thing you need to store as the current state um and the witness tells you yes this this is the this is the correct data given that state route okay i see you you said earlier that some people or some validators still have to have the entire state why is that well i mean this is a design choice and um there are different potential designs here but the design that we are aiming for now is is what we call weak statelessness and weak statelessness means that you do need the state in order to produce blocks but you don't need it in order to

validate blocks and that is a very good trade-off in our opinion because it's okay to limit somewhat more the number of people who are able to produce blocks and that is in practice unfortunately in some ways it's going to happen anyway because of the whole mev thing but as long as you have the the ability to very easily verify it by everyone that is okay that has that has some very nice uh implication in terms of um the design space like it means that um as a user for example you don't like if you don't have this weak statelessness if you want like strong statelessness and in quotation marks

then then what you would need is that every user always keeps the witnesses for their accounts around uh and i don't think that is a very practical design i think like from the ux point of view that the weakness statelessness is really like a sweet spot that is a very like kind of nice spot to live in okay so this would then not reduce the size of the state but basically you would reduce the number of people we acquired to actually keep that state that's correct another idea that's been thrown around is state rent right so basically so you don't actually pay to store some sort of data on the blockchain once when you when you send it in your transaction but

you actually pay continuously until until you need it no longer stored or your money runs out and it gets deleted automatically where's that head do you think that's going to happen now do these ideas work together or is this something else entirely we we had these discussions around state rent and [Music] in a way so statelessness alleviates this problem a lot because suddenly instead of like i mean we want a very large number of full nodes right in the ideal um world um everyone who who works in any way with ethereum blockchain

would run their own full node for several reasons that's not really completely realistic now but this is the future that we're working towards that and some notion that this is possible and and therefore like statelessness really like reduces this problem of like having the state a lot because from like tens or hundreds of thousands of parties or millions who need to have or the state around all the time on their own ssd um you suddenly reduce it to like say hundreds of parties who are actually producing blocks on ethereum who have very large incentives anyway to keep

the state around um i mean they yeah they they will need it to produce the block so uh it alleviates this problem a lot um it is a debate i would say whether that whether with that um state rent is still necessary um i would say if it comes it will come in a in a slightly different form from what people consider state rent now so it won't really be um a notion of you continuously pay in order to have your state alive it's more that um your state will be will be well after some period say one year if you didn't do anything with it it will become part of of a kind of old

state where it can be reactivated at any time for like maybe paying slightly more gas it's not you you you can't work with it anymore so basically there's there's no continuous payment there's just like uh probably this is at least the most likely version of staterun that i see would be that if you don't use your state for a very long time you will pay slightly more because you have to pay for a slightly larger witness okay so i see how the size of the ethereum state is a problem for some users and that it requires ssds and so on um but in some sense an even larger problem with ethereum is the fact that

the evm doesn't allow for parallelization of computation right so basically you have to do everything in a certain order and always look at the entire state where some other blockchains have taken a more advanced approach i mean they were also later to the party so basically for them it was easy to see what the problems are so i'm not taking sides here but how do you feel about this inherent inability of the evm to allow for parallelization yeah i mean i think that's that's a good point um and that is that that's very uh interesting i honestly i'm not an evm

engineer so i cannot say in detail if there if it's impossible to change this um i can i i think like one large part of that is actually related in some way to statelessness in that one one thing you would need in order to parallelize things is to know what state each transaction accesses right and in a way we are starting to do that now i don't want to say we have a complete way um to paralyze things but yeah i mean i i can see that that is that is definitely like a very very important part and that that would allow um for a certain amount of scaling if if you if you if you parallelize things and

i would say like um it's certainly a very good decision to to design around that um and i would encourage people who designed rollups to to do exactly that to think about that as well and and maximize the parallelism they can get out in order to be faster well let's zoom out a little bit and talk a bit about you know ethereum and where this project is going like what makes you excited and what do you think is the impact that ethereum will have on the world wow i think like uh that is it's still i mean it's very very hard in our time to make predictions about things further than five to ten years out i would say

because there's just too many things that are on on exponential trajectories i'll settle for five to ten years out there i think ethereum can provide many many different things for different users it's essentially this coordination layer that allows you to make certain certain parts of course it doesn't replace a community in any way right like it's it's only a technical layer but it allows you to solve some of the problems of getting communities aligned on certain goals and turning things into positive some games i think that is the amazing thing that this technology

allows and we have seen that around this resurgence now after i guess the initial shock of dao's like where many many people have started creating taos and um and they they seem to work in some ways at least for now which is great like this is amazing communities have found together and have found a way to coordinate around certain goals without having to go through the traditional way of doing this by a corporation for example which would have been the old way which has like other costs associated with it essentially you said that um it turns things into positive some games so let me ask you for the metric so basically what's the metric that you

think is going to improve for the average joe using blockchain technology i mean the average joe right now doesn't use blockchain technology right um basically nobody does that um and uh i think the the question can be on many many different levels and i think we're already seeing it surprisingly like it it essentially it changes the game of finance at the moment mainly because financial applications are what comes first just because they just have the most money the most willingness to pay um but but this permissionless ecosystem that allows anyone to just go there and create like create something and deploy it without having to ask anyone for

permission allows people to just play with it a lot and i think we are right now we are already seeing the effect of that in terms of all the the fintechs like i mean my my online banking apps have improved like tons over the last years and i think this is obviously not based on blockchain technology but it's based on the pressure that these companies now see where the compute competition will come from like you don't have to be a blockchain user in order to see the improvement it will come to you anyway because the others have to keep up otherwise we're coming for them so you mentioned finance as this kind of first area that's getting a lot of

traction and then you also talked about how you know on a high level you see ethereum or blockchains as this like coordination layer that allows you know allows people to accomplish things more efficiently together to what extent do you also think that blockchains will kind of financialize a lot of things around coordination that are today don't rely on financial incentives directly oh this is a difficult uh question i'm not i'm not sure what you mean like do you mean your local sports club is going to become a dao and suddenly everyone has a token or something i i'm

not sure what that question refers to well i guess that sort of ties into like i think gnosis especially has done like some work around ideas like this to write where you use like prediction markets to have make decisions as organizations and um i i think i mean i i can see this fear but i think like mainly it provides new options i don't i don't think nobody is going to force you to use a financialized prediction market it is still like it is still your choice so i don't see why why it would it would become like a forcing function for average people to just financialize everything and you can but this is your choice and i think like

many many blockchains will will provide things that are not financial in nature like systems can be built on top of them who says we can't now already for example build a twitter a decentralized twitter for example i think that would absolutely be possible people are already building decentralized messaging apps that doesn't have to be be financialized so i don't i don't see that automatically everything has to be financialized so so you think uh the fact that open finance has moved in fast um is just because of ideological proximity or you know being tech adjacent and the more social

apps are going to come at a later point in time but they'll come i think right now i think it's just that the um the more social for example apps as you call them are just priced out of it and that is a natural consequence of finance just always like being there and and being just a very valuable application like let's be honest about it finance is a very valuable application um but it means that it prices out a lot of things which is kind of a shame from the development perspective because obviously we are losing kind of important time where these other systems could bootstrap themselves and could start providing valuable things

but but i mean we are now building the rails that will allow this in my opinion i think like when we have sharding when we have this um people will build all these other systems on them and they they will come i think and i think i think i'd end on a divisive question here um do you think the applications that will need less economic security because they will not be securing the values that financial applications inherently do will actually need ethereum as a base layer i mean could they could they run on any number of other protocols that don't have the economic guarantees that ethereum currently has i think we're there are different

questions here and i mean i i would say probably yes if you if you expect that the decentralized twitter will just put its data on the charts i don't expect that that will be the case i think what it will do what many applications might do is use some blockchain and maybe ethereum because it is the settlement layer but who knows whether that is necessarily the case in the future and will use this for example any of these applications they ca right now let's talk about tool for example which is concrete decentralized applications that's out there now but it has huge problems getting people to actually

run nodes right we we do need some sort of payment for this like we do need some way of getting people to like run the infrastructure and so on and i think that is more important like that that is where blockchains like ethereum come in probably not for the data itself you don't you don't need to button but it could be for some sort of commitment to the data that makes a lot of sense but not for the data itself i would i would predict in the long run but the economic incentive there surely the the economic securities that should require depends on how large the incentives are right so basically if the incentives um are minuscule compared to the um

security that ethiopia affords you then using ethereum as a base there may be overkill right i i expect that um ethereum with roll-ups and charts will be will be quite cheap so um i i do not think that you expect uh to pay well i i i i would say it's in the center or subset range what you would expect for normal transactions in in that future in ethereum and i think a lot of applications will be able to pay that i think this is actually a super nice closing statement so sub send transaction fees you heard it here first democrat thank you so much for coming on it was uh pretty technical but i think

there was a lot there so if people want to dig into this um somewhat where should where can they go and find more information on these topics this depends obviously on the technical level that they want to get into there are a lot of people trying to write blog posts about um about these things i i can certainly collect some resources and we can add them to the description of the podcast honestly we could do better in that respect i don't think we're like we're and i would encourage if anyone's to come forward and is good at digesting the information writing it up we we need more of that it's way too little in the whole space and i know many people have

trouble catching up if you really want to get into the tech then i think eth research the forum is an amazing like resource that has a lot of stuff and it's usually not super difficult to understand people try to make it somewhat understandable but the main problem is just a huge amount of information to digest that most people probably can't completely catch up with okay we'll link to these thank you for joining us on this week's episode we release new episodes every week you can find and subscribe to the show on itunes spotify youtube soundcloud or wherever you listen to podcasts and if you have a google home or alexa device you can tell it to listen to the latest

episode of the epicenter podcast go to epicenter.tv subscribe for a full list of places where you can watch and listen and while you're there be sure to sign up for the newsletter so you get new episodes in your inbox as they're released if you want to interact with us guests or other podcast listeners you can follow us on twitter and please leave us a review on itunes it helps people find the show and we're always happy to read them so thanks so much and we look forward to being back next week you