Data Availability Bake-off and Solana Fee Market | Roundup

Transcript

I think it's pretty hard to argue with the fact that the larger you get as an application the larger the incentives are to own more of the stack or control all of your economics and they're aware that if an app basically starts taking up you know represents the majority of value being created or the majority of fees on salana the incentives to then move to their own chain are very high if I'm a salana developer how do I think about keeping these apps even the most successful ones in the network despite these incentives and I think that this is getting towards that sort of idea of like how do we keep them on salana but give them more ownership all right everyone we will be back to the program

in just a moment but before we do I want to share something that blockwork has been cooking up for these last couple of months March of this coming year in London blockworks is hosting D London the largest institutionally focused conference in all of crypto Goldman JP Morgan 72 all in one room so you can know what the big money is doing so click the link at the bottom of this episode it'll take you right over to the homepage and use bell2 for 20% off I will see you in Sunny London Town in March episode of bell curve before we jump in quick disclaimer the views expressed by my co-host today are their personal views and they do not represent the views of any organization with which the co-hosts are associated with uh nothing in the episode is construed or relied upon as Financial technical tax

legal or other advice you know the deal now let's jump into the episode all right everyone welcome back to another episode of B curve today you got me and Miles holding down the fort holding down the Old Fort Miles good to be back good to be back yeah um this was a good week we got to hang out a little bit in person uh this week um New York yeah it's been lovely great to be here yeah I've been I've been coming quite a bit this is where all the action is um and yeah got to got we had fun at a little salana Meetup uh earlier this week so so good to uh yeah good to be here that was great yeah we we'll talk a little bit about that blockworks hosted a little

Salon research hang in our office so we had um some of the folks from Ellipsis jeto margin fi um yeah it was it was a really good hang talked a lot about fees on salana and the the fee Market you know a lot of which is not working particularly well right now and I think fees are actually kind of the hottest topic within the salana community a lot of very interesting ideas about how to fix the fee Market maret and we'll get into we'll get into some of those later um you know I think I think what I wanted to chat with you about because it's something that you and I talk about a good amount off air is uh data availability it feels like that's going to be an enormous or data publishing as it's about to get rebranded um you know as as we move yeah so as as we move into

the new year it feels like this is incredibly important one um because if this bull market ends up coming back there's going to be a bunch of activity that flows there especially onto ethereum today and the largest cost for rollups on ethereum uh it's completely variable as well is Da so right now basically the dominant solution is for rollups to pay data availability to ethereum um and there's been you know in recent months a whole bunch of new Solutions have cropped up uh including Igan da um which is the first sort of In-House use case for igen layer reaking there's Celestia there's polygon ofil espresso its own data availability solution I want to emphasize that

there's a bunch of different da Solutions out there um even with some kind of you know like nearer is being used or it's being sort of touted or experimented with as a um as a as a DA solution for ethereum even salana I think Rome there's a startup which basically uses uh salon for eth rollup da so there's a bunch of different flavors of this I think you know to not boil the ocean you and I are going to focus on what is probably the leading two solutions today and the one that you and I maybe know the best which is uh Celestia and Igan that's not to say there aren't other flavors and solutions out there but um maybe just for the for the purpose of comparing contrasting in a hopefully useful and somewhat nuanced way those are the two they we're going

to focus on Miles maybe can I call on you here to just just give her a view of you know what is data availability why is it so critical um and where does it sit in sort of the cost structure for rollups today yeah absolutely so we've definitely uh are entering the period of the uh the da Wars um and it's it's funny because it is it is such a I would say you know not super sexy topic uh on the surface but it is going to you know I think be critically important for scaling really a rollup Centric future uh which is where we're going with everything right so maybe first of all like what why is Da important and why are people you know building all these

alt da Solutions and so just as a quick Refresher you know data from rollups needs to be published somewhere where everybody can see it right um and then they can dispute the data if NE if if need be um and if the data is withheld by a sequencer bad things can happen right funds can be stolen um you know in the case of optimistic rollups um and you know at the very least you basically cannot continue the state of the rollup right so if the sequencer were to were to drop out and the DI wasn't published anywhere nobody could continue the rollup so this is a critical function of of all rollups um and it's about uh 90% of the transaction costs for today's

rollups that use ethereum for da and settlement is attributed to these da costs right um so why do we care about da and why are all these Solutions coming out it's because I think right now with rollups this you know tried in uh rollup that uses ethereum for settlement and da you get 10x cheaper fees but if you you know with the solutions like Celestia you go from 10x to 100x cheaper fees and this is really important because if we are going to have this you know proliferation of rollups um these Alda Solutions at least today are necessary to make them you know I guess viable economically uh most rollups you know if

you're just a new upstart and you want to have your own execution environment and you're going to be it's going to take a long time to you know attract a lot of volume and users you're not going to be profitable um and so I think that that you know has really styed the the growth of Roll-Ups today it's why we have a lot of these like large rollup hubs but very few i' would say rollup app chains um so I think the combination of Ras providers that kind of abstract away the complexities of building and Alda solutions that make these rollups economically viable is really what's going to kind of like kick off this you know proliferation of of rollups um so maybe just to pause

there that's that's kind of why everybody is talking about this that's why it's because it's still a large bottleneck there's an enormous amount of emphasis on TPS but really ultimately if you're still for for a rollup basically what we've done with rollups right is we've moved execution uh off of eth main chain primarily right so we put it off in this own little segment cord off uh block space and you know we've we've borrowed the security through this clever arrangement of of rollups but ultimately um that allows them to sort of batch transactions and post down to the L1 which is much more efficient you also have a larger more centralized sequencer which is just better for you know sort of compute cost and throughput but if you're still using ethereum as

the data availability solution then you haven't really solved much because that bottleneck still exists the rollups are going to have to pay a bunch to eth validators for da and all those costs are going to get passed back on to the user so there are a couple of solutions here there's there's an eth native solution which is 4844 Proto charting where we're going to get basically a differentiated sort of subsidized form of resource in the form of blobs which is um a different resource to then gas on eel1 eventually we're going to get full dank sharting which should make those costs even cheaper but in the meantime the market is providing alternative Solutions uh which are these alternative da layers um and I do think it's worth talking about some of the businesses that are cropping up here to

support that those Integrations and makeing it even easier so today conduit just announced which is a rollup as a service provider for the op stack they just announced that they're partnering with Celestia so you could imagine you know the friction of starting your own app chain you know to your to your previous point a couple of like a year and a half ago where you basically had to do everything yourself um you know you're still paying data availability cost e validators but now with conduit you get a oneclick you know you can very easily spin up essentially your own your own rollup app chain and then if it integrates seamlessly with Celestia you can pay cheap data availability cost so you know to your point I think the frictions of of launching your own chain is is getting drastically lowered even in real

time yeah it is I um I I was reading that conduit thread and just for fun I clicked on the the link to actually go deploy your own rollup and it's it's shockingly easy um it's like actually a couple couple clicks and then there's option it says do you want to use ethereum this gives you 10x cheaper fees or do you want to use Celestia this gives you 100x cheaper fees and so if I'm you know putting my shoes in the putting myself in the shoes of like the next you know hundred rollup developers that are going to come in as soon as this bull market comes back right um and I have those two options and it says I could either have 10x or 100x I'm probably going to choose the the 100x and I think that you know today Celestia

has a head start they've been you know building they they are kind of the the pioneers of of modular blockchains in the first place and really this concept of data availability or data publishing um and so you know they've got a lot of Integrations already with the large Frameworks but you can see a future where you know a developer comes in and he's got kind of an array of options um for da Solutions and it's just a matter of time um and so yeah maybe we can start getting into like if putting ourselves you know in the shoes of this developer what are like the sort of decisions and tradeoffs um in selecting these if you're you know if you now have five different options that all say 100x

cheaper fees um you know which one are you going to choose yes all right let's get into it and again we're going to use the focus on the the two examples of aan Da and Celestia so Miles could you just kind of walk us through uh you know just mechanically what are these two different um Solutions look like today and maybe if you could uh explain the the sort of Distinction in between uh Das uh data availability sampling which is sort of pioneered on Celestia and then da scaling uh which I da takes advantage of yeah absolutely so maybe I think I think a lot of it does come down to those two concepts and the truth or at least what I've you know kind of observed is that

it's very hard to optimize for both you can either optimize for da scaling or da um sampling and what that actually means is you know with da scaling this is saying okay we want basically all this data to be available somewhere but we want you know to keep the requirements of the node operators of this network very low so we don't want every single node operator to have to download all of the data um and the way we're going to do this is basically you know if we have let's say 100 rollups and they all have data uh and we have say 10 validators instead of you know just having I guess

validator one download data from rollups 1 through 10 validator two download rollups from you know uh 11 through 20 um we're going to mix and match all this data together uh in a complex configuration using something called eraser coding and that will allow basically anybody to recover the full data set if only say 10% of these validators are are you know running um so that is you know da scaling that's to say okay we how do we basically optimize for you know um scaling the consensus bandwidth or scaling the the bandwidth of these um of this network by not

making every single validator download all the data now da sampling this does not optimize for I would say say like bandwidth scaling um this optimizes for you basically everybody um who is not a full node validator can verify that the data was published or not even though they are not downloading all of the data so with da sampling you're going to say okay we're going to have a very heavy validator set every validator is going to download all of the data um and we're going to basically you know we can do this because we have optimized a separate chain Celestia right to

specialize in just making this you know as scalable as possible it's still pretty heavy for these full node validators but if you are a rollup you know a lyia native rollup and uh the benefit of this is really that you can even if every single validator is lying to you you will be able to find out through sampling this data and so what that actually means me is that all of the data is downloaded by the validators but then it is eraser coded on the way out to another sort of network of light nodes they call it this Halo Network right and through da sampling um this Halo network of light nodes can

basically prove that you know the data is being withheld even if 100% of the validators were colluding and you could not do this if you were optimizing for da scaling because each of the validators does not actually hold all of the data um and so it's really optimizing for okay do I want everybody in the world who is not a full node validator to be able to prove that the data is there or not you know on chain um or do I want basically to uh you know scale the number of uh the bandwidth that can go through this network um and you know maybe I have some sort of trade-offs around the fact

that if it' be very hard to you know kind of recover this data if 100% of the the notes were malicious yeah all right that was a really helpful explanation I want to caveat to the audience now this is where you and I are going to leave sort of these formal definitions and maybe weigh into slightly more speculative Waters and just try to guess um that you know really we're getting into pretty deep technical stuff here I'd guess there's probably 50 people in the world that deeply understand the the engineering sort of coding level implications of this but I think I think it's to poke at the implications of these two different constructions so where my mind goes is okay you know what are the differences really in between these Solutions if I'm a if I'm a rollup framework right or or

if I have an app chain and you know the first thing that sort of comes to mind is cost right so how competitive can enan da versus Celestia be on cost and then what are the security guarantees you know is there is there really a difference a meaningful difference in between on the da solution okay all of the validators basically they're getting little pieces of the data that you could very easily reconstruct versus in the celesti example fewer beefier full nodes but ultimately it's being Erasure coded on the you know when it's being sent out to all these different light nodes like is there a meaningful security trade-off there I'm not actually 100% sure and then which one is the market going to care about more cost versus uh security guarantees yeah exactly um I think the

cost side is still very TV we only Celestia is in production um and I think it's fair to assume that Ian da will uh be able to match I think it's you know the the sort of cost improvements um and then so it maybe let's just say we'll wait and see uh between all these Solutions if there actually is Meaningful meaningfully different cost improvements but you know it could be the difference between fractions of a you know Pennies on on transaction fees um that I feel like may not actually really move the needle at the end of the day I could be I could be totally wrong but I I feel like cost is going to be kind of

you know uniform in terms of uh it's they all they will all be orders of magnitude better than the status quo uh in terms of cost so then it really comes down to security right um and I think it's really depends on like what if you've already decided what kind of rollup you want to launch um because I think there is is sort of like one sort of comparison that we can make between these two da solutions for uh eth settlement rollups so these are rollups that have their um their rollup contracts live on eth L1 right uh but they're posting data somewhere else versus I would say you know like Celestia native or Ian da native rollups those that are basically just posting

data to Celestia but not um or Oregan da but not using you know uh another chain for settlement contracts yeah I thought you were bringing up an interesting point there actually um I was going to bring up the diagram of I think this is a critical point to bring up like what actually here uh kind of lead in there and then I might just jump in and I W to I want to Define for the audience the difference between a smart contract rollup on eth versus a um a sovereign rollup I feel like that's a critical point to yeah okay so between these two solutions you know I think again it's very different very important to differentiate between settlement and say Sovereign Roll-Ups um so and maybe we

can yeah go ahead I actually think that's a that's a really critical point to to dive in on and just just to level set with the audience I'm sure people have probably heard this sort of generic difference of okay on eth you have Smart contract rollups and there are even different flavors of smart contract rollup based rollups Etc and then Celestia has been you know sort of famous for pushing this idea of the of the Sovereign r and I think it's just actually there's a Celestia has a great just blog post on this it's it's very simple very short they have pictures which as we all know is great and uh and and I thought it would be helpful to actually just walk folks through the difference so if you're following along via screen here there's very helpful sort of uh visualization of what a smart

contract roll up on eth looks like so you see the four functions of a blockchain execution settlement consensus and data availability and you can see in the ethereum land of a smart contract rollup you're Outsourcing execution to a Smart contract rollup but ethereum still does settlement consensus and da now again in the context of what we're talking about here is we're basically talking about unbundling one additional thing with alternative uh data availability Alda Solutions so you know in this future that you and I are discussing here that feels imminent it's not ethereum that you'd be Outsourcing or doing uh that ethereum nodes that we'd be doing da it would be igen da or Celestia right so that's maybe one way that this could play out I

think it's important to understand what a sovereign rollup is and how that's different from a smart contract rollup because I think that throws a little bit of a wrench in how you're thinking about it so in a sovereign rollup and again it's it's very helpful to look at the pictures here if you can but what a sovereign rollup actually does is it does execution but it also does settlement and what you're Outsourcing is consensus and da to uh data availability layer and what this what this allows you what this affords you just immedi medely first of all there's a difference in cost structure in between Sovereign rollups and smart contract rollups but one of the other one of the other things that this affords you as an advantage is a settlement you you have you know one of one of the downsides of the the smart

contract Roll-Ups on ethereum is that ultimately all the transactions that get executed up on the rollup layer are going to have to settle down to ethereum and ethereum proposers are still ultimately responsible for the ordering they're still the single source of Truth so to speak and the most direct implications that this has for rollups is some lack of sovereignty over your fork Choice rule so for instance in the in the case that there was ever some exploit on any of the eth rollups today you actually could ex you could do a hard Fork but where you have control over his assets that are issued on the smart contract rollup chain but anything that's been bridged over to eth you you don't have control over um which makes

it much less safe for you if you're a holder of an eth bridged asset ultimately on a sovereign rollup because you have multiple different nodes that are all responsible for settlement you can do a hard fork and your the sort of assurances or uh that that you have in terms of um yeah if if there ever would to be a hard Fork it's just much safer on a on a sof buet exactly but at the same time you know you still are relying on another layer for consensus and data availability right um and the beauty of the Sovereign rollup that uses Celestia is that you know even if 99% of those um of the validators that you're relying on

for data publishing um and consensus are are being malicious you will be able to know and then you control your own destiny right and you can hard fork and recover the state of the rollup back to where you know the data stopped being published um right you cannot do that with an E settlement rollup like that is that is the big tradeoff here um I think that that also points to you know uh some of the trade-offs around Ian da and and Celestia right because if you're an eth settlement um rollup and Celestia is you know lying to you basically um you

can't really Fork anyways right and so this sort of you know some of the benefits of of what you get when you're a Celestia native rollup um in terms of I think it really like kind of replicates the sovereignty of say a cosmos L1 with you know a fraction of the overhead cost you don't quite get all of those benefits if you're an e settlement R up using Celestia it's it's still a 100x cheaper right and it's great for for fees but you you're not basically taking full advantage of the reason that you know Celestia is a blockchain right that downloads all of the data and has this amazing da

sampling Network full of light notes um you get a lot of those benefits but you know your your choice of being a need settlement rollup you're you know inherently kind of you know uh optimizing or or choosing not to have that level of sovereignty yeah now I think what some folks would say is well hold on a second um you know there are uh companies out there Sovereign Labs is working working on how to do Sovereign rollups on ethereum this is where I just I get a little confused I know there's a technical solution here but just from a high level where where my brain sort of gets turned into a pretzel and breaks is okay I I I sort of understand that you know you could theoretically use any da

solution that you want doesn't have to be Celestia like that's not the only way that you can have something like you can use any L1 right it's just right should should you is that L1 good good for this function like you could use you I think Celestia you know and and uh with the roll kit team has proved that you can you know have Bitcoin rollups uh or at least Bitcoin Sovereign rollups rollups that post to bitcoin um is that going to give you the most performant rollup possible like no it's but it is like a demonstration of the fact that you can you know with this sort of modular framework you can use any sort of base layer Celestia is the base layer that is like you know in line with the app chain thesis it is optimized to do one thing

right and it's doing that one thing at the very bottom of the stack um whereas you know other Cosmos chains and are are optimized to do one thing but at the app layer right um so yeah I think I think that's that's kind of uh a big part of this is um you know I think there's a lot of back and forth between the two teams right now um specifically talking about the tradeoffs for eth settlement rups um and I think that you know it's it's kind of getting a bit confusing I think so too I think you nailed it it's okay people sort sometimes sort of get a little bit distracted about is it technically possible to do this yeah it may be technically possible to do it Is

it feasible and is it realistic is the much more pertinent High signal question to ask and I don't know I I OB I I don't have direct access to the the costs which I ultimately think is going to be you know there's some element of this as well is like is Da going to be commoditized you know to front run a little conversation that that you and I had that'll be coming out in January like is there wagu sort of Da or is it just kind of good enough uh to attain the security guarantees they you want um that is that's something that the market is going to ultimately have to prove out but then there's a a sort of squishier social layer and reason for choosing your da solution where like I think not to speak for you as well but like I'm not a huge fan of

this eth alignment sort of meme but for the time being I feel like it's still relatively powerful so maybe Ian DA has a bit of a leg up there because hey you're still okay you're not explicitly Outsourcing Your da to or using e node validators for da but you know probably what's most likely going to happen is that e stakers are going to opt into uh through reaking running these you know these this da sort of solution so it's still gonna kind of it still kind of feels eth aligned and maybe that's what a lot of eth rollups do and whereas for Celestia I think how I was thinking about it was initially sort of being very competitive with Anan da on you know stealing sort of stealing rollup so to speak competing for the same pool of

eth Roll-Ups and then getting them to Outsource to Celestia versus Ian da and to be clear I think that's probably what's going to happen in the next like six nine months or so and they'll they'll compete and Celestia will get some and aan will get some but I think what started to excite me recently about Celestia is it's kind of a I think Celestia's success will be determined by convincing the market and showcasing to the market that there is an alternative and in some ways Superior construction of how rollups can happen and from the perspective of a a new entrepreneur that's building a rollup framework or an app chain or something like that that you know I think the the hearts and Minds battle to

win here is you I'd rather build a sovereign rollup on Celestia as opposed to a Smart contract rollup on on ethereum I feel like that's the IAL thing to to win I think it's uh that's the long game I think but the reality is that today most rollups are eth settlement rollup so that's where the competition's goingon to really like in the in the near term I think um heat up the most and then um later I think with Sovereign labs and and once Ras providers or you know the the Frameworks themselves providing R Services um really launch we'll begin to see you know the Sovereign rollup as more of a a viable option but I think you know just to go back maybe to to Ian da and and

why it's positioning itself like how it's positioning itself um it is even more specialized than Celestia it's saying we're not just specializing to be a DA layer we are specializing to be a DA layer to eth settlement rollups only like right I Ian da actually doesn't make a lot of sense to use if you're not an eth settlement rollup I could be wrong but that's my sense um but I think they've said okay here's where most of the market is today let's build a solution that's even more specialized and guess what these rollups already have an ordering service in terms of uh living on ethereum L1 that's where the settlement contracts are so we actually don't need Igan da to be its own chain

with ordering and data publishing we can just have this be a network of nodes that basically give data attest stations um and because you know this is where the eth alignment thing comes in um let's you know maybe we're we're to start here okay so first of all eth alignment because we are going to um basically have these nodes also be ethereum validators and because we're optimizing for da scaling and because we want a very large Network right of of these Igan da validators um and because the igen da validators are already running full nodes of ethereum we need to make

this as light as possible and so we're only going to send portions of the data to these node operators um and then they're basically going to attest to it through a protocol called proof of custody and they're going to basically send uh serve data back to ethereum and once it hits ethereum that is the ordering right so it's saying okay if we ju if we just want to serve e settlement rollups what is the optimal design and that's where you know Ian da is going with this now the the sort of other meta piece of eth alignment here is that let's be honest if these da Solutions take off that is the majority of L2 fees that would be going to L1 validators

going to other networks right and so you and I have talked about this before like the less bullish case for ethereum is that they outsourced so many of these costs elsewhere right that rollups only are using like eth for settlement and that's 10% of the fees that they pay today so how do we like you know continue to reward I guess the the network that is you know securing our whole rollup anyways um we might as well pay you know if we're going to pay a network of nodes for da it might as well be the same you know ethereum validators that um are securing our chain in the first place so that's like kind of the the the other piece of this where or their you know kind of the the alignment

side it's a very interesting question and I've internally flip-flop about this quite a bit and I think we're just going to have to see how this ultimately ends up playing out but here I think people really talk past each other on fees this is GNA sort of intersect with fees and fee markets but generally there are two camps on Twitter that say fees are good it shows that people are using the the uh the block space there's demand for Block space which I agree with where I don't really agree is that people have started to contort ethereum into a p&l and say this is eth revenue I don't agree with that I view eth as a commodity um and I think

actually and and there's then there's this concept of like where is a network in its life cycle um should you be at the value capture stage now or if you know because it makes it more expensive for devs um as opposed to in the beginning should you be trying to lower fees and just attract developers and users and ultimately you know the original purpose of fees fees are a uh a gating mechanism or rate limiting mechanism it's it's against you know Cil attacks right a Dos attacks like that's that's the whole purpose of eth and or fees in general and there's probably some concept of like a parabola here of where your optimal fees are so if your fees are way like to to use a really uh you know hyperbolic example if your fees

are probably salon's fees today or are too low right 0.1 C you're not pricing your resources appropriately and eventually you're going to overload the network um if fees were a million dollar gas you know per transaction that'd be way too much you're actually losing a bunch of transactions there's this is kind of the concept of dead weight loss there's some uh appropriate amount of fees and fees up good and low fees good are probably it's probably not the right way of there's a it's an optimization problem and it's and it's somewhere in the middle I think another another thing that you know I'm curious about as well because I think it has direct implications for which da solution ultimately ends up taking off it's like what is the market structure going to look like for l2s so something you and I have talked about quite a bit as well

but I I was listening to the vanc uh Matthew I'm bling at Matthew seagull I believe of over at VC research did it did an episode on Bank list where he was predicting the consolidation of l2s this coming year and I was thinking to I'm really torn on that because and he pointed to crypto exchanges as a as a an an analog and yes right now crypto exchanges are consolidating but how long did that process take miles took years years and years to do so I could I could see a continued fragmentation at the L2 layer but what might catalyze a change there and more of a focus on interoperability is the ux the more layer twos that you add where there's meaningful like an AAP that only exists

on this L2 and not on that L2 I think the you know even if you extrapolate that out to 30 layer twos that have meaning daps on it you have significantly degraded the ux of a user of ethereum and they're going to have to prioritize that otherwise chains like salana are going to ultimately end up succeeding and this is where I think Celestia has an has a an advantage as well because you know they Cosmos chain and not only do you have you know IBC over there but there's also just more of a cultural focus on interoperability that the idea of Cosmos is starting out as a network of Connected app chains and I just I think honestly it I think it's probably already at the breaking point even if

you didn't add any additional layer twos the fragmentation just makes the ux shitty even if the bridges are great it still sucks to have to bridge between these things I don't know it's so I think that might actually hasten and catalyze a change and then that has implications for for instance Ian DA's decision to focus only on ethal TW um I don't know that's I think another important question ask I mean I think they're both not betting on the consolidation of l2s I think yeah if l2s at least on ethereum consolidate into like a couple major hubs that then these GA Solutions don't really have businesses in my opinion because um you know it's just the number of customers

are are extremely low and those rollups can probably be profitable on their own if that's the case um without having to you know use these LDA Solutions so I think the Alda Solutions are you know the precondition for there to be this like like huge web of rollups and then yeah we deal with the interoperate interoperability problems um or we just you know deal with like a lot of you know improve the onboarding experiences so that you don't necessarily need to like be bridging across maybe or like you know using privy to spin up new wallet for an app chain um that you just want to try out right and then if you really like it you can Bridge some assets over later uh from your main wallet so anyways I think that is that's

definitely a part of um but it's not I I think it's it's slightly separate um and I think that yeah I think I think I think you are right in that you know if the proliferation of like rollups is probably you know it's just going to be a little bit like the ux is going to be probably a little bit better in the celestial world just because you know we in in Cosmos has been kind of preparing for this and they have IPC and a lot of things although this week people tried to buy some bad kids and and seemed like nobody had a good experience in Cosmos anyway so there's like a long there's like a long way to go even with the ecosystem that's been you know preparing

for this future for since Inception right um it's it's a really good point I think I I think I texted you and I was like dude I'm trying to I was a little bit ahead of the Cur but I was like I'm trying to buy a bad kid I literally can't figure out how to do this and made so sad yeah I know I know well but but it actually doesn't feel like it's that wild it feels like a solvable problem at least in Cosmos and where I was actually getting hung up specifically is in Kepler you know you usually your experience with if you have a phantom or metamask or something like that and you connect to a DEX it will just see your account balances and you can trade where I was getting hung up from the Kepler ux ux experience is you

know you actually you can see you can log on to something like osmosis and it'll see your Kepler wallet but because there are actually multiple different chains you know it doesn't just pick up your account balance you actually have to deposit into osmosis which is is just look is that wickedly complicated no was it confusing for me as a Crypton native yeah it was actually confusing for me it just added a little bit of friction and when you when you're in when you're in a bull market you're that those frictions are actually critically important this is when all the users come in right The Meta is going to change it's already changing you know no one really spends on marketing everyone builds product during bare markets that is going to change this is when all all of your users are going to come in in the next

year like you're going to grab as many of them as you possibly can you're going to try to hold on to them through the bare market and then you're going to repeat it and ux is going to be a big thing and for for both for both Cosmos and Celestia and ethereum not picking on any of these ecosystems we are going to have to figure out interoperability in what I because I already think for as many changes there are on Cosmos and ethereum let's say we get no additional new ones it's already broken like bridging sucks you should only have to do that when you're you're moving between big trust zones or ecosystems I I just it's too there needs to be better interupt I view it as a massive uh impediment I think um yeah a couple things there so I

think there are some ux tricks that um will be coming in on the cosmo side like uh with I think next month's uh SDK upgrade you'll have fee abstractions so you can pay fees you can pay gas fees in any token you don't need a new token for every you know chain you op you you you are active on um and you know there'll be lots of like kind of oneclick tricks so even though these assets are like held on different chains uh if you say you know I want to trade on osmosis it's going to abstract away that hop that that got you uh in the background so these are like the things that you you don't really even learn until a a bull market comes back and like new users

come in who haven't used it and you're like oh yeah we we should we should figure that out um and then I think just yeah props to skip by the way Who's lead like just going so far out of their way to help with this Sam Hart did this great Twitter post a couple days ago hey if anyone's using Cosmos and there's something on the ux like I will help build this uh just so Props to skip on just dedicating you know scarce company resources they just doing good things for the ecosystem like those guys are the real heroes yeah they are yeah grow grow the pie for for Cosmos um and then I would just say two more things on the interrupt that I think give me hope is one this sort of intense um or you know Market maker based

Bridges where the you know complexity and the risk um so maybe like the settlement time and all of that complexity is pushed on to the market maker uh and the user gets basically their order filled on the destination chain immediately or destination rollup immediately um we have you know projects like across are are kind of spearheading this but I think there's a lot more coming and then the other piece is uh you know all of these storage and state proof providers I think are going to help a lot right so let's say um you have an app on you know Stark net and you you know are let's say it's a a lending and borrowing app on on Stark net if I want to use this app I actually

may not even have to move my assets from eth L1 so this app is going to say for give me a sto give me a storage proof to show what your account balance is on L1 okay based off of that you can borrow off of you know that collateral without actually having to bridge these things so I think that technology is going to take a little while to get really um um I would say you know implemented into a lot of DBS but um between that and then with Bridges moving towards pushing you know the shitty weight times the settlement risk two market makers who are going to front you your liquidity like we're coming we're coalescing on some models that actually I think are going to begin to uh to solve these

things but they may not be ready in time for this bull market I think that's the that's the pertinent question which is I I'm not sitting here saying this is an unsolvable problem it's 100% a solvable problem but it has implications how how quickly you solve this problem has implications for how your chain is going to do in this coming this coming EOS I I totally agree and and you know may maybe for that reason there is like a consolidation of activity around these big these big hubs for the foreseeable you know mid to near term uh near the midterm but yeah maybe back to yeah wrap up on the on the alt da Solutions yeah yeah yeah so little bit there but I know well it's but it has so basically I I can't

remember I heard this so long ago but you know real this oh this was a Kathy Wood thing where Innovation actually comes from radical decreases in cost and she used the example of the human genome so remember there was that Pro you know that whole project a couple of years ago I should go back and look at it but it cost me man it might have even been I don't want to say something stupid but I can't really remember it but definitely in the millions potentially you know High sort of nine figure bill it was this whole human genome sequencing project it took years before they finally sequenced a human genome and then you know if you fast forward about 10 years you can do that and pay like 300 bucks I mean so so then the amount of things that you can do with uh you

know build businesses around on that now that it's economical you know you just sort of get this explosion in Innovation and I do on the same at the same time that everyone is starting to fade the app chain thesis Etc we're about to get a massive unlock in costs and explosion in economics for rollup Frameworks and I don't know look that you and you and I've been talking about this for so so long there's so many things you can do when you have complete sovereignty and ownership over your block space that is just much more difficult on when you're building on a yeah on General let's talk let's talk about the status quo today of app chains is either you can basically be an eth settlement rollup app chain

which is you prohibitively expensive apart from like the most successful daps or you can be a cosmos chain which requires you to basically be an expert at you know the chain level as well as the app level and everything in between um and there's just not a lot of teams that can do that um but we're moving the future is we have those two options still but now we have two new options we have e settlement rollups that use alt da Solutions so now you can do you know as easy the you know couple clicks with conduit and also have a economically viable rollup if your app is you know gets some decent amount of usage or you have can be a sovereign rollup on Celestia which I think gives you pretty

much as close as possible to the full sovereignty and all the benefits you'd get with a cosmos chain without having to deal with the overhead right and so now we've got I would say like uh cheaper and almost uh equally good version of a cosmos chain and we have a cheaper 10 you know 100x cheaper version of an e settlement rollup and so that just opens up the market right to more to this model is now viable for for so many new applications um when today they're they're just not viable or like teams don't know how to you know build a whole chain yeah it's and you know what actually one even additional stop on

this I feel like of all of the little metaphors and things that you and I have talked about in the last year on the show I think this kind of sovereignty ownership over your block space spectrum is going to ultimately probably come down as maybe the most useful way to think about different applic or different uh applications today and if again sort of to use the if you have all the way over here like total composability atomicity between different um you know Atomic composability between different daps a Dap on eth L1 and then a full stack app chain over here there are so many different flavors in between and there's a spectrum of trade-offs which is now being I think meaningfully explored so maybe on um maybe a a sovereign app

chain would be you know one step uh to the right um if you're following along my hands of a full stack app chain then maybe there's something like a uh op stack what am I the law of chains your op stack law of chains type thing over here another interesting new rung I think that just got added to that actually is this very interesting debate around fees in salana so this this sort of came out of this this research discussion that that we're both at um you know this week and one one of the things that was frankly very interesting is you know the current implementation of local fee markets on salana leaves a lot to be desired I think basically the

incentive still exists to spam because priority fees this my intuition about priority fees they basically work like they do in ethereum where they're very they're deterministic and you know the validators or the block Builders realistically today will just line up transactions in both in in in terms of how they get paid the most and if you pay more you can be added at the top of this block but salana has multiple different cores and the priority fee isn't as deterministic so the incentive actually still exists to spam um so they haven't really they've kind of they've helped it a little bit but they haven't totally fixed it and there's another issue I mean really the spam problem still exists in salana and they're considering there's a there's a very interesting proposal out there actually which is I think over a year old but is

starting to to regain Steam and it is uh so s IMD 016 um and this is program uh rebatable account WR fees Pro fees yeah we're gonna have to work on The Branding a little bit of about this particular proposal but but it is but it is it is uh the reason it's kind of interesting is it's generated an enormous amount of attention and maybe controversy isn't the right word but people really have strong feelings about this and line up on both sides which is exactly how people felt 1559 as well I'm not saying this is 1559 or in that in that same ballpark but again one of the one of the problems with the way that fee markets

work on salana today is that you can just uh lock uh basically lock any account um and you you're not charged to to do that so if you you know are a Dap developer someone can basically either spammers or even competitors can basically just lock your account for no charge you can't protect against this Etc what this is what this is doing is it's introducing a a fee that the owner of salana accounts can can charge and what you can do for your organic users you can just immediately rebate that fee um back so you wouldn't even really notice it from a ux perspective as a user you have to pay a fee to you know

write lock to this specific account your action ends up happening and then the DAP can rebate that fee on the other hand though what they can do the the critical thing about this proposal is that um if a transaction fails you still owe you still owe that amount so if you're a spammer and you're just right locking a whole bunch of different accounts and these transactions are failing suddenly you're getting charged this fee and the DAP can just decide not to rebate you and that's that's pretty powerful and what what it is is it's sort of miles a form of sovereignty here right this will for for those Cosmos folks that are listening it's sovereignty over a small partition of General block space which is the account that you own and have created as a Dap developer so pretty interesting there's

there's an enormous amount of discussion around fees in the salana ecosystem at the current moment so yeah so maybe just to contextualize this like um I don't know if you agree with this but I think I think it's pretty hard to argue with the fact that the larger you get as an application the larger the incentives are to own more of the stack or control all of your economics right right and I think salana is not like um you know they're aware of this fact uh and they're aware that if an app basically starts taking up you know represents the majority of value being created or the majority of fees on salana the incentives to then move to their own chain are very high right and so how do

we you know how does like if I'm a salana developer how do I think about keeping these apps even the most successful ones in the network despite these incentives and I think that this is getting towards that sort of idea of like how do we keep them on salana but give them more ownership um and and it seems like maybe this is my like pretty non-technical read on it but it's kind of giving more ownership to the devs over their contracts and their their applications right they can they actually now have can customize control like of very you know critical economics versus like this would never happen on ethereum right ethereum it's like we want to basically

keep all the economics like of the base layer completely separate and unaware of what's happening at the app level um and I think this is salana saying okay in you know a couple years if we have big daps how do we stop them from like going to Cosmos or going to you know launch their own even a salon rollup right like how do we keep them all here because that actually you know like our whole value prop is having everything in one place right um and I think this is getting towards that but I don't know did you have the same read I do I do have the same read I'll tell you I think there's one more angle that's worthwhile exploring here is the history of updates to fee markets across

uh crypto and actually several other sort of related branches of research and development like me there is a through line the through line is a first of all these these sorts of things are always contentious because there's a redistribution of value across multiple stakeholders and always always the push is away from the proposer it's always away from the validators and that is I think the generally unsaid thing about at least in the ethereum ecosystem when you talk to people they're deep in the meev ecosystem like well yeah there's one stakeholder here who's getting paid way too much and it's the proposer and we basically did an entire season you know with Dan Robinson on on how like how at the app layer of ethereum you

know people are dead set before there's even a you know a distribution of value between swappers and LPS in aex you're we're trying to reduce the Mev leakage that's going to proposers today and that is another through line of of this I think salana proposal because right now a lot of those fees are just going to a proposer where this actually allows a little bit more autonomy and frankly value capture for dap developers like sovereignty over their accounts so I think that's another through line which is basically a lot of folks in crypto you know you don't really it's kind of like marketing right you you don't you think you're paying too much but you don't know exactly how much and it's actually really critical so in the beginning just overpay the proposers and

the validators of your ecosystem but eventually that's like the very first stakeholder that you look to redistribute some value yeah just like aggregation to you know we had an aggregation period to the proposer now it's being completely disaggregated um and in a lot of ways right either orderflow auctions um doing more and more compute offchain we have now pushing like Shadow Events off chain we have lots of I would say lots of ways that like I I guess all this Valu is or at least people are trying to make this value flow back to the applications themselves um and I think you know ethereum is kind of working around some sort of Baseline constraints that

everybody understands whereas Salon is got a little bit more of a a flex more flexible design space um and I think it's notable that you know this is this like proposal is co-authored right by the mango um the mango markets team and you know you don't see any EIP like that are being proposed by daps uh over on ethereum right like I think if Unis swap like for to submit an EIP that says hey this would really help us people would probably not react so so positively where I think it's pretty interesting that I think you know first of all Salon adapts um the and the builders themselves are like very very uh um like aware of what's happening at the chain

level and incorporating all of these Dynamics into their applications that feels a little bit more like Cosmos almost right um and and they're actually have influence in some of these decisions over core core road map items um I think that's bullish that's good should be there should be more interfacing between the platforms and the apps right that just makes sense it's it's a platform for apps I'm with you miles I'm with you although I would say I do think this actually happens in ethereum as well like I I don't think it's as explicit but my sense is that for not to pick but you Unis swap or Al or whatever I think there's some plenty of lobbying that goes on with eips as well and um like if

you talk to a lot of the EAP developers they will know exactly when you know updates to ethereum are coming not just because relevant because they've been involved in it as well but and yeah that that's the cool sort of moment in time thing about salana today it first of all they're just everyone loves to root for an underdog um they're they're younger in their existence right they're not as mature as a chain so they're getting I mean one of the advantages that they have is they can move a little bit faster they can be slightly less concerned about breaking things just like ethereum was in its early days right now ethereum kind of seems like this older more aifi sort of chain and there there advantage of that and eventually salana is probably going to be like that too but at this particular moment in time there's just a lot more

change rapid change happening in that ecosystem so um it's a lot of fun but I will say you know the value of an older rified chain probably more secure as well um so I I would say pros and cons right to each one of these things we don't need to be I agree I agree it's like ethereum's doing kind of incumbent things right but uh to their they they on the flip side of that it's the Lindy right that I think for especially Financial applications like there there is no kind of substitute for trust um so yeah I agree it'll be interesting to see how it plays out um and when you know we kind of keep going back from like right now it's all about cost and

interoperability problems like which sort of ecosystem already has that solved like salana um but then I think we'll probably over index towards these big like you know general purpose platforms and then we'll come back to the op chain thesis once uh you know there are new viable models that that have been battle tested um so I think it'll just kind of go back and forth for a little while and then we'll find some equilibrium all right everyone we will be back to the program in just a moment but before we do I want to share something that blw has been cooking up for these last couple of months March of this coming year in London blockworks is hosting D London the largest institutionally focused confer conference in all of crypto we are gathering 12200 of the world's largest asset managers so thinkk trafy macro

funds Crypton native funds big allocators and financial institutions so Banks payment processors Etc all in one spot it's very rare to get the likes of Goldman JP Morgan 72 whatever all in one room so you can know what the big money is doing we're diving into the themes that they care about so we're talking about the intersection of macro and crypto where we are in the cycle real world assets so everything from stable coins to unchain treasuries to tokenized assets it's going to be a last but the other reason you really want to go it's London baby center of the world at one point you got Pub culture you got fish and chips great beer it's going to be a blast so because you're such great listeners to bell curve there's a Code Bell 20 that's going to get you 20% off so click the link at the bottom of this

episode it'll take you right over to the homepage you'll see all of our speakers and use Bell 20 for 20% off ticket prices are going up soon make sure you go use that code I will see you in Sunny London Town in March I would also say you know Jason had this funny interaction with someone who was involved in the building of the internet in the 90s and Jason was describing this battle of modular versus monolithic today he's like that's so funny that literally happened in the internet he pulls up this diagram of the seven layers of the internet um and there was this whole battle about there's a fully modular or fully integrated stack versus one that's entirely modular have people started talking about hybrid yet you know whereas instead of fully entirely integrated or totally modular you actually have certain parts that are

like it was a seven layer stack for the interet maybe these two or these three layers there's kind of a winning bundle across different layers in the stack and that I you know obviously analogies are by you know sort of definition are imperfect but that feels intuitively like what's going to happen here as well they're going to be different flavors of what plays out and being a totally modular Maxi versus a totally integrated Maxi you know Big World lots of room to grow I would say I think that's a I loved that analogy um and maybe just a like going back to Igan da and Celestia let's like that plays in here right because Igan da is just da publishing uh Celestia is Da publishing and consensus

right so that could be considered a hybrid and it's being a hybrid because combining those two things allows it to serve a really unique value to say Sovereign rollups that now have like superpowers um but if you didn't combine those two things you know maybe that's better for eth settlement s that don't have those superpowers um or maybe they're the same I think yeah maybe just to wrap up on that like I I think this is it's super emergent I don't think like the product tradeoffs are going to really like uh come through to most Developers for a long time um I think brand is going to be extremely important in messaging here um I think you know Celestia obviously has a big head start

in terms of the fact that they have Integrations with all the big Frameworks but you know I and da is definitely pushing the the eth alignment and the fact that hey you guys are already using you know ethereum for for ordering you can just use something even more modular right in us um and so yeah we'll we'll see how it plays out but um I think I think it will be interesting I agree I agree now one more one more thing to cover here and this is we're departing a little bit from the crypto tivity but just you know we're we're nearing year end and we should actually do a predictions episode I was I was thinking um I've I've a couple things that I've been thinking about I know putting on the spot but one thing that's you know as we're as we're nearing the the close

of the Year here so moving a little bit out into the world of more macro we had a really important probably the most important fomc of the year that happened yesterday so Wednesday fomc is when you know chair poell at the Federal Reserve will say hey this is basically we're raising rates we're leaving them unchanged or we're lowering them he left them unchanged changed but he did show a dotplot which is an aggregation of how other folks at the Federal Reserve see interest rates playing out over the course of the next year and they were basically pricing in uh three Cuts so the Dot Plot and what the market ends up pricing in are two different things the Dot Plot has been wrong in the past but it was a very dovish sort of conference

and It just strikes me going into this year uh this new year that a lot of stuff that was headwinds like here here's why it sucks so much when a bare Market you can feel it coming on it's just there's no light at the end of the tunnel miles it's just so everything is going against you at the same time so you have you have the macro regime you have rates going against you which sucks you've got this psychological okay it's historically played out in four-year increments I know it's going to be at least two years of absolute crap there was that you had the regulatory stuff that was moving against us simultaneously in the US it just everything was going against you but now I don't know you have so first of all you're moving back into a positive sort of bullish regime for assets liquidity

all that type of thing that we know crypto does super well in you've got a potential Bitcoin ETF and within within 30 days and then also the having in in April which has historically been really positive you've got um you've got a positive regulatory environment here so courts have pushed back on a lot of the what's been going on with the SEC I don't know baby we got we got headwinds turning into Tailwinds is how I'm feeling going into this this next year so and all this cool stuff that infra has come a long way so I'll be honest like I've been less active on chain during bare markets I've been much more active recently and it is a much better experience than I remember in a really relatively short period of time

so yeah I don't know I'm just super optimistic and excited going into this year is how I feel I I agree you know like I don't closely track these macro developments um I basically rely on you for that um but you know it was it did feel a little weird when like crypto felt like we are back um but you know rates there really like no uh tons of news about like rates coming back and the like the rest of the non- crypto Market coming back so it's more like you know it's always a little um it's it's less less certain in terms of like whether or not a bull Market's back when it's just crypto ripping so um maybe this is the start of like other things

or maybe crypto just front runs like a lot of these announcements are like General unit I don't know I think it does I think crypto front runs expectations around liquidity it's I think it's actually become a pretty decent indicator for that I think it's why it did so poorly so fast back in 2021 when they did their their pivot and that's why I think it's doing that's why I think it's doing well now I think probably yeah the economy looks like it's or it's I don't even know if the economy is picking up but it's there's a more bullish environment for asset prices especially risk so yeah even bad kids went up we're in great shape Cosmos can have like yeah an expensive nft this is great let's go

baby we love the bad kids dude you have a great bad kid I didn't even realize how you you've got a very exclusive good one I will I will reveal my bad kid one you got to make that the profile picture that's a that's a little Flex you got in early you get a bad kid from a while ago I was gonna open you up some air drops I can't I can't abandon my Casey afflac uh pfp it just love that my logo I think it's so funny wait didn't you were at uh uh cosmoverse or something a little while ago and they put that the organizer just assume that that was you yeah exactly I was like speaking uh at cosmoverse and there's just a huge picture of Casey Affleck

wearing a Dunkin Donut or like Bruins hat in the background like Smoky a s or something like that and uh yeah that was funny yeah all my friends got a kick out of that one yeah white Boston guy this checks out this is exactly what I was picturing basically this this feels exactly right so funny boy yeah anyways it's good stuff all right partner yeah we are yeah well knock on wood but yeah better sure sure all right all right partner this was a fun one have a great see you man yeah [Music] cheers h