#DappCon22: Day 1 - Gnosis Chain: Extending Ethereum - The Layer 1.5, Stefan George

Transcript

all right we have the last not the least presentation coming up in this morning block um it's going to be a presentation by Stefan giorga he's the CTO and one of the co-founders of kenosis it's actually a nice bracket that we have this morning Martin was Martin from grenosis was kicking off depcon with the opening speeds and now we have Stefan concluding the first morning block he's going to be talking about you know this chain and extending ethereum and what they actually need by a layer 1.5 Stefan yeah thank you everyone for coming also a warm welcome from my side

um I'm Stefan George and today I would like to talk to you about noses chain um so for those of you who have never heard about nose chain you might actually have used Moses chain anyways because many of the applications that are running on top of noses chain are obfuscating very well that they are running on top of noses chain so to give you a few examples if you have played this game here before this is a dark Forest game um like space exploration game I spent way too many hours on this if you played this game before then actually you have been operating on Autos chain this morning we had a talk by Patricio

about pull-ups and if you have some of your some of some props collected in your wallet then very likely they were actually issued on nose's chain so again you actually already did transactions on those chain and last but not least um if you were like using circles in the past and created a circus account you also operated on noses chain all those transactions were all mined and secured on noses chain so what does notice chain about so noses chain has actually quite some history it was not known as noses chain in the past actually it was known as X die antigenesis goes back to Berlin to East

Berlin in 2018 uh when Igor had the idea of creating a side chain to ethereum which would use dye the stablecoin die as the token to pay transaction fees and the reason for this was quite simple like improving the user experience by not requiring users who interact with apps that require just a stable coin to have two tokens in their wallet like you would have on ethereum like if you want to use an app on ethereum that requires diet and you still need ether in order to pay for transaction fees this is not the case for xdi you just need tie and you can do whatever you want and it's not a surprise like one of the most uh popular applications in the early days of x-star was the burner

wallet some of you might know it was a very simple easy to use browser-based wallet that allowed you to pay for food and drinks and ethereum events like this here and it was actually a very nice very easy user experience to even onboard your parents to blockchain without them having to understand a lot what's going on under the surface so last year the course of extra changed quite a bit we did a merger like gnosis and x i merged together like the stake token which was a token of the xdi network was converted to gno like stake talking holders were able to convert their stake to gno and um yeah in addition to the torque

converter we also changed the technical roadmap of xdi uh to deprecate their own consensus algorithm which is Aura consensus and to follow the ethereum 2 roadmap applying ethereum 2 uh to um yeah to xdi which was renamed to noses chain and one of the first actions that were done was to actually launch the equivalent to the ethereum beacon chain the noses Beacon chain in a slightly different setting making it easy for everyone to join and yeah the no speaking chain is still obviously operational up running and now it's a very much anticipated event for us as well to do the merge of Northern

speaking chain and the gnosis execution layer so how do we see noses chain relating to ethereum well obviously we are using the same technology now so we are we are funding the same teams we're contributing to the same technology and we hope that a lot of the work that we are doing will eventually also help ethereum to evolve as well uh we don't we see the relationship as a symbiosis between those two networks obviously ethereum has become quite expensive to operate a lot of use cases have been priced out on ethereum and we hope we can give those use cases a new home or nurses chain so to describe the technical aspects of

noses chain I would like to use the blockchain trilemma it's a term that was anything coined by vitalik it describes that out of the three desired properties the blockchain has or should have being decentralized being secure and being scalable you can really only optimize for two of them and you have to make compromises on one of them and I know many so-called ethereum killers they claim they can actually fulfill all of this but in fact they make usually very very big compromises on some of them so let's see how this applies to gnosis first starting with decentralization so our goal is to make noses chain the

most decentralized Network if you look at stakers.info then you see that right now the no speaking chain has about 100 000 validators ethereum has about 400 000 validators in the end it is just a number it's an important number but it's not the only important number what is also important is to understand how is the stake distributed our the validators distributed what's the diversity of validators is all of this controlled by a single entity how many entities are there how are they geographically distributed and all of this adds up to actually create a resilient decentralized Network and for us decentralization is very very important that's why we are in the space

since the early days this is why ethereum was created to create a really decentralized Network most of the yeah I feel like most of the competitors to ethereum or like many that operate in the space they don't value decentralization that much actually I can kind of echo what I think edu described in in his talk about that note that um well we kind of sometimes forget why decentralization matters it's not only about censorship resistance also about creating permissionless Innovation and their view values is very highly at nurses and that's why we want to contribute to this and we want to make sure that noses chain is highly decentralized and that's also what we took into into account when we designed

the setup for our own Beacon chain so again like ethereum if you know speaking chains using the same technology as the ethereum beacon chain but we changed uh the parameters of how this chain operates or can be operated and one important change is that we for example change the minimum requirement for participating it notice change you only need one gno which is about 160 170 dollars versus an ethereum we need right now like 32 ether which I think based on today's price is something like fifty thousand dollars um we also uh have like non-punitive uptime requirements so if you go offline for a while it doesn't really harm you at all and we made sure that it's really

easy for you to start your own node we actually collaborated with depth node for a very long time already for many years to create a software that allows you to easily spin up your own node and participate in validating the network and we also incentivize this quite heavily so we gave and we are still giving dno tokens to everyone who's purchasing such a hardware device as you can see here uh to have your own computer that you can set up at home and uh yeah you can you will receive some gno tokens which you can use to start validating the network it's still kind of mind-blowing to me that everyone globally can just buy this device and actually participate in decentralizing this network

and yeah again like this is really the number one metric that we want to optimize noses chain four in the next few months making sure that this is a super decentralized super resilient Network that we have big diversity in nodes and people running nodes and doing one metric I think Martin already mentioned this morning is we would like to have one person in each country on this planet to run a node and participate in decentralizing this network so this slide downside of of this kind of setup which is we have already a lot of non-professional stakers a lot of hobbyists that are running the nodes and they sometimes are maybe in a setup

where they're not all where the node is not always available and you can see that a noses change we are missing a few blocks so if you see um yeah how many blocks you missed about something like 10 maybe 15 whereas on ethereum it's just one percent does this really matter not that much it just matters that the capacity of the noses chain is a little bit like a little bit lower than it could be when you hit higher uh up times um but it doesn't really matter in the worst case you have to wait maybe one more Block in order for your transaction to be included or like wait a bit longer until the block is actually mined so it doesn't really matter that much so let's look at the next property security

so security is derived from decentralization and yeah there's two ways you can compromise the security wonders well yeah the famous 51 attack when you control 51 of the network and you have 51 of the tokens then you can eventually compromise this network the other is to actually try to attack uh stakers and validator services to try to compromise their stake and take over the network um this has been a concern and has been discussed quite widely recently also within the ethereum community on Twitter and other social media because of the chart that you can see in the top

it just shows like yeah how how much of the stake has been deposited by which entities and you can clearly see that the alidos kind of dominating party right now but we also have some centralized exchanges such as Kraken and binance which are really dominating this right now is this really a concern well probably for now it's not really a big concern because well all of those companies are highly professionalized they have amazing opsec there's it's super super unlikely that they'll be compromised is this good for Optics probably not it doesn't look really great and of course there's still like a small chance and something can go wrong and we should aim for having something that is a lot more distributed

so to be fair like nurses chain is just below and you can see uh we kind of run into the same issues so we have here the biggest ones actually also liquid staking providers stake wise on those um and we have like one large rail but then you can see like everyone else like about 50 is pretty nicely distributed among many different parties and our goal is to yeah even get it more distributed get more providers on there and have something that looks a lot more diverse than it does today so one reason also why this valid data set is very important to us is the bridge between ethereum and noses chain so today if you look at the multi-chain

ecosystem that we're in then the acrylic here of the ecosystem are bridges like most of them are at most like glorified multi-signature wallets and to be honest nurses change is no exception and those chain like the bridge between noses chain and ethereum even though it's very Innovative it is still in the end a multi-stick and in the end you depend on very few parties that have to collude in order to compromise everything that's going on this network and that should not be the case right like we don't want this we don't want anyone to compromise decentralization on this at this angle and that's why we started collaborating with the team at eurax Park it's a research Collective

working on DK technology to build the first uh Beacon chain Lite client using DK technology so previously it was considered pretty much impossible to do this because the snobsp compile available on the execution client and if you want to simulate or like have a like find running on another Network it would cause enormous amount of gas now things through ZK technology we are able to Outsource these companies uh computation into the DK snog and are able to verify this um on also's chain and vice versa also on ethereum so we can build actually a Lifeline based Bridge and in simple terms what does this mean

like we we rely on the honesty of this in committee which is 512 validators out of which I think 60 have to confirm so in simple terms it's like we upgrade the multisig which currently I think consists of 11 of 11 owners to a multi-stick which has 512 owners which are shuffled every like 256 epochs which is approximately every 27 hours um to validate what's going on on this bridge so let's look a bit deeper what does this again actually mean so what does is that the light client actually do so the light client that you're building

right now allows us to verify that we are on what is called the canonical chain yeah so you see this a small diagram here we have a blockchain with block number one two three and then three a and canonical chain basically shows you like what uh like what is the top of the chain is this three or three a and that's something that we can verify with the DK like client that we're building right now what this does not allow you to do is to make sure that there are no invalid State transitions in this bridge being confirmed and this is quite important because if you would have invalid State transitions then you would obviously also be able to compromise anything that's going on uh in this bridge and yeah funds could

be stolen and yeah security would be compromised so fortunately there is a new technology coming up which we are we find very promising which could help to complement this which is ckevm and what does ekm do it does allow you to verify State transitions in the ZK snog itself so we can actually know that the state is correct we don't only know that we are following the right chain but we also know we are following the right State transition and this has big implications so what does this mean if we if we kind of combine those two very promising Technologies it basically lifts the security of this

bridge to a level where it is equivalent to Ezekiel rollup or noses chain on ethereum so that's why we are kind of thinking about the term of what we should apply to to name this technology we came up with layer 1.5 if you have a better idea let me know and still very early but yeah effectively what we're able to do is we have a separate Network that runs uh in parallel to ethereum but all the communication going on between ethereum and gnosis chain arbitrary messages like token transfers relayed over this bridge they are highly secured like with a similar security guarantees or the same security guarantees as you would have if

you operate on a ZK rollout on top of and uh the great thing is our technology is already available today like you can operate on it and this bridge is of course like a very important missing speed piece that we can now start rolling out slowly um like the first prototype for the light client based part is actually already um operating on the test network of ethereum on Northwest chain and hopefully we can make it through an operational also on those chain itself so this is like a pretty big deal most people I think haven't understood the potential of this but effectively it allows us to have many many networks

operating using Beacon chain consensus and be able to have uh like secure communication between those and yeah this can actually change I would say the landscape of yeah how blockchain networks operate quite significantly obviously there's a lot of heavy lifting required the KVM itself is still very very new um I'm very excited to hear about your all these update who's working on this at polygon there's also an interesting panel going on I think on on Wednesday with a surprise guest that I recommend you all attending so I'm really running out of time so I have to rush a little bit let's look at

the last part scalability now I kind of already hinted that yeah decentralization security is very important to us so obviously we kind of have to compromise on scalability however we try to push as far as we can on scalability without having to compromise on decentralization and security and that's why we have been investing and working closely together with the Aragon team for the last couple of years to to build the most effective and most efficient evm-based client and we're very happy that they have a dedicated team which is optimizing this client to be operational for noses chain and there was a consequence of this well

simple consequence is that we can increase the computational capacity of what knows the chain can process from about 30 million today to about 100 million without having to make any sacrifices in terms of how decentralized and secure the network is so in it is not like the overall scalability solution it's not like we have unlimited computational space but yeah we get about eight times of what you can do on ethereum today that also implies that we have to use other Technologies as well in order to improve the computational capacity so we are also very much convinced about Layer Two in fact optimism is already running today on those chain hardly anyone knows but

yeah the latest version of the dark force game actually operates on optimism uh on those chain and yeah a few more interesting applications upcoming which will also operate on optimism or other layer tools on top of noses chain so this kind of sums up the technical part let's look or look at like what's actually running on this network today so today we have a lot of like different especially dials running on top of noses chain became kind of the home for many dials simply because there's a lot of dial tooling available especially also our own tooling zodiac is optimized also to run on noses chain we have a lot of social applications like circles Ubi proof of humanity to

provide like an ident like identity layer on top of noses chain where we hope that many other applications can build on top of we have social depths like pull-up that was already mentioned CLR funds you have games like the Dark Forest sports betting with azero and many many other applications which you can enjoy and I recommend everyone to try out um what's also exciting to look at what is coming to North's chain so circles is a very important part to this so if you have never tried circles yeah it's like a universal basic income which also creates a social graph at the same time so it's kind of it's like it's a Ubi but at the same time you create a social

network and uh yeah we're very excited about this too and have now multiple teams actually working on this on the last day you will see I think one stage is purely dedicated to Circle CBI so you should definitely take a look at what's going on and how it will influence nurses chain in the future another project I want to mention I mean there are many projects coming but the two that I want to mention the other one is a payment Network there's a presentation actually later today at two o'clock like how we want to build a decentralized payment Network or noses chain it's an effort which is a pretty significant and it's obviously like one of these like early use cases that have never been really fulfilled surprisingly I

mean it was in the Bitcoin white paper Bitcoin peer-to-peer electronic cash system it should be a payment system today until today unfortunately there is no payment system even though it's such an obvious use case and yeah we are trying to to actually make this a reality and I would recommend you guys to check out this talk later today this is it for noses chain you can find a lot more information online um also knows this chain is operated through noses Dao which is an open uh yeah an open dial for everyone to join so we are happy to hear your thoughts and your proposals on our forum and uh yeah would be happy to work with you guys

thank you [Applause] I'm sorry I run over time we still have time okay questions so okay questions hello hello yes uh the eggs that I token is back backed by die on maynet right and I is largely backed by usdc and in light of the recent event is there's a threat to either security or decentralization

of diagnosis change yeah that's a good question so we are we are very closely following what's going on at maker and Edition different initiatives that they are taking they are now also considering to eventually depack from uh use from yeah from USD which I think also makes sense so yeah for now we are following very closely and of course eventually it is possible to change also the token which is used for fee payments um we haven't done like a full technical analysis on this uh it requires a few things to be done I mean everything can be done all like technology only but uh yeah we we will see we will talk to in

constant discussions with maker also for different reasons um but yeah like in case we see that there's actually like strong risk of centralization then of course it's not not in line with our mission and then we will have to consider other options foreign somewhat related to the last question are there plans for private or shielded transactions or what is the kind of

privacy-based layer plans for nurses right yeah so yeah if you're a big fan of privacy tools and we have been also supporting them um so also to Native cash team is very close to us of course we have to be um like we want to embrace this so we I think we we are in talks also with different privacy layers like ad stack um and and others and there's not like one clear master plan at this point um my view is also we should just try to embrace all of them ideally we have like a like an ad set roll up on top of noses um we actually also are like working with another company called mystico

which builds like a ZK kind of based Bridge also the perspective of our own DK based Bridge obviously also opens the door to to create privacy directly in the bridge itself so they are right now like many different initiatives and I think at this point we we just want to support all of them to see how they develop and ideally we can get even to a level where like every transaction that's done on noses chain is is actually a private transaction because I think that's also kind of the issue with tornado cash right now is if you look at like hey who are the main users of this technology yeah then unfortunately the top 10 users are black hat hackers and vitalik and and of course you have to

make sure that those those Technologies become will be quarters that they're used everywhere and then the number one use case is not money laundering is just like everyone doing Simple transactions and I think that's also where we want to go okay let's do one more question hello uh we heard we know a lot of dollars run on closes chain what other kind of applications do you want to attract on your chain for example do you also look at Enterprise use cases so for one thing that's for me pretty

obvious is that we have to get more real world use cases I feel like over the last seven years we have been building crypto for crypto people and it's really important and I think it's also the biggest potential to get more real world use cases that's why I think also for example this payment network is something where we have a very clear connection uh to the yeah to the real world and this obviously involves a lot of Enterprises as well like the only reason why this is possible is because we collaborate with Enterprises that can add add to this and I feel also a lot of like real world use case are so difficult because it's not a technology problem right like we can solve technology that's why we've been solving a lot of technological problems in the last seven years but in order to

actually touch the real world you have to talk to Regulators you have to embrace a lot of like other like parties which we usually don't want to talk to or like it can be can be painful evidence for me obviously this has to happen so if there's a really clear use case where you can see the sustainable and it can allow a lot more users to operate on this network than yes we should do this thank you very much Stefan cool thank you