DeFi by Design EP#107: How Celo Plans to Dominate the Rollup Wars

Transcript

[Music] welcome to D5 by Design where we talk all things blockchain and cryptocurrency while striving to educate Empower and enrich what is up welcome back to the rollup uh very special episode today we are welcoming the Giga brains behind cell uh and we're going to be talking all about the upcoming transitions that St has planned this is episode 107 of D5 by Design and we are very very grateful to have morac and Tim on the podcast today um we're gonna we're gonna let them introduce all of the exciting

updates that are happening over at CeeLo um you may have recognized CeeLo as the ecosystem the Network that has some of the the top defi applications right now and there are tons of exciting updates that we will get into in a moment um I will kick it over to M for a bit of an intro um about himself and a touch on the upcoming uh updates and announcements coming through CEO uh M before before we kick it over to you and Tim for intros and diving in uh Andy of course on the podcast as well Andy how you feeling today and I got my my livei shirt on we're bridging cross Shain baby every

day of the week is is is what we do we're here today to talk about some of the rollup Wars as I like to call it um and where where where these two Lads are going to position themselves some of the unique uh kind of propositions of CEO kind of the history and yeah let's just Dive Right In so um yeah GM s Tim why don't you kick us off and give us a brief intro as to what you guys are building um and a bit about um the kind of current uh move yeah thanks Andy so I'm Tim I'm CEO at cabs clabs is one of the organizations active in the um cell ecos system we do a lot of the product and Engineering work uh we've been

contributors to cell since before main net um and uh yeah I'll just quickly pause to give Mar a chance to give a give a quick intro over here everyone yes um my name is mar kski I'm one of the co-founders of c and um yeah also CTO at cabs where as Tim just mentioned all of the public goods development happens or or a good amount of the public goods development in the Sol ecosystem happens yeah over to you Tim yeah so um I think there's there there's a little bit of background to this um this is kind of my version of it I'm curious to hear marik's as well but you know when um the team working on bringing C to mainnet were were kind of

thinking about how to how to put together all of the pieces that we were um that that we were looking to to deliver um you know cell started out as this um peer-to-peer payments app you know almost like a kind of venmo for crypto this idea that you can um yeah send money to a family member the other side of the world and that person can then walk around the corner into a store and buy groceries with with that and crucially that all of this would be done using lowend uh smartphones that were just like at that at that point back in 2018 just completely prevalent and of of of course even more so now um and there are more people out there with smartphones than than have bank accounts

and that kind of realization that uh that you could use smartphones as a key way of being able to like close this gap between um you know Financial inclusion Financial access for so many people is was just kind of really powerful crypto was like an incredible empowering technology from that point of view but for cell to as a as a kind of project to be able to reach that Vision you know we were trying to um we were trying to build like a crypto wallet um a stable coin framework an identity framework so that you can like send um money directly to a mobile phone um we were like you know looking at like all of the kind of

pieces of the puzzle and in order to make this saying well we would obviously need like a blockchain and the first thought of course was you know ethereum was at that point like already like a dominant player in the space um we love what the ethereum project were was doing we just subscribed to so many of its values um number of the team had worked on ethereum projects already um but in order to kind of meet the needs of this payments use case it was It was kind of just just like in its current State back in 2018 was just not going to really cut it because with reorgs with um High transaction fees with slow block times

um having to hold a different currency to pay for like gas if you were like trying to make a stable coin transaction all of these things we felt were like barriers to um to to usability you know you want to be able to stand at a at a register and see your transaction for like 10 bucks or the equivalent go through through and be be kind of finalized and for the fee to be um modest and for you not to like have to hold a different currency in order to pay those fees at the same time and um it was because of those kind of needs that we in the end to like launch um you know as the code base that ended up

being launched by validators in the community as cell mainnet um in order to like achieve that kind of those needs the the developers fought um ethereum to and the go ethereum Goan client to to be able to um to be able to get there and so cell has always been like kind of wanting to be part of ethereum if you could have avoided um like sell bu building a solell separate Solo blockchain in the first place I think maybe that could have been in the past a preferred route but that option was never really available back in 2018 and so you know we've been tracking like lots of developers in the cell ecosystem are also developers in the ethereum

ecosystem like cellos full evm compatible like we we as an ecosystem were early to like invest in bridging and um lots of the developer tools and defi apps that you get on on cell and ethereum are very you know they're shared there's like shared team shared Heritage and I think you know this it's been super exciting this year because the emergence and the maturity of L2 like Stacks now is at a point where we can kind of see a a route towards C like coming home to ethereum and this is where I feel like um you know that just wasn't the case like 12

months ago and uh that's what led us to May and and to start really really doubling down on this idea that we wanted to propose to the cell Community hey how about if like cell became an l21 ethereum um preserved as many of its values its Community like the experience the apps for um users for Developers for Builders um but gained a ton more from like a closer Synergy those communities yeah I still remember going on um cell and defi summerish there were some incentive programs with sushi swap bridging over there getting active as

probably like the first or second day um you know it was just kind of a another place you could go get rid of the kind of high fees slow through put um and kind of had those nice incentives attached um you know and I always knew knew of you guys through kind of some of the um agencies that you were working with some of the pr and just through through experience i' had known that you guys were pretty like mobile first um I think we can touch on the move into the L2 um and kind of the state of the rollup Wars and the hard Fork um in a short time but I'm just kind of curious if your mental model for the way that defi scales is still lies within this

mobile first experience like think this this idea of like these pwas uh which is basically like these Progressive web apps for those who are listening basically taking these web apps onto the mobile phone I think friend Tech is obviously a huge example of that now um but yeah I'm curious if your thinking has shifted with regards to the mobile side of things um seeing that that was kind of like the biggest Focus for you guys in the early days um and if you still think that like Defi and crypto and is kind of headed towards a more mobile first experience still or if it'll be kind of you know more uh on the computer and desktop focused yeah we're equally excited about mobile and we continue to invest in in Mobile we think that um for just a whole

manner of reasons um mobile web 3 mobile defi um is just going to continue to to grow and grow and be um definitely take a bigger market share of of web 3 in general but but certainly be a huge driver for for a global adoption of web 3 um I mean just if you look at the numbers there's seven billion smartphones uh out there in the world uh significantly more than there are desktop and laptop computers these days uh and if you look at the the markets where crypto adoption has been growing during this bare market and the types of use cases that are driving that adoption they tend to be in markets dominated by

mobile um uh users and uh uh use cases that tend to be mobile mobile first um and so one one exciting example so I work um also uh part-time at a wallet company called Vora which is really easy to use mobile wallet that uh leverages a lot of the the features that sell has to offer you can use it to send value to people in your contact list you can pay for gas with stable coins uh it's it's 100% a mobile first experience that really um I would say um delivers on that Vision that Tim was mentioning

before that kind of global venmo use case uh that that we were working so hard on um four years ago five years ago now um and so that's a really exciting um I would say example of um you know companies delivering on on this mobile First Vision um but recently there's also been another uh player to enter the space that that's pretty exciting so Opera the browser company um recently and added a solo only stablecoin focused Mobile Wallet to Opera Mini Opera Mini is a browser that is is very light in terms of its size uh they have 100 million users uh

predominantly um throughout Africa uh and they launched uh mini pay which uh is very similar to Vora it's it's um it's a payment product built on crypto rails that lets you send stable coins to people in your contact list uh very very cheaply um and it's also compatible with Vora um can send money between both um and that's you know super exciting I mean I think Opera is a massive company they have a huge user base there's a huge need throughout Africa to be able to send stable value easily throughout the continent uh and and again that's where you know there's a lot of mobile users

and so uh the platform you know and and the whole ecosystem I think continues to really uh work hard on building um functionality that enables mobile developers to to Really execute well uh and I think that will continue going forward for sure yeah I I I think I see the vision um and and even looking kind of anecdotally at like how much time I spend on my my computer versus how much time I spend on my phone um I would say for It's relatively similar for me and I imagine that I'm one of the higher uh usage on desktop um and for the most

part uh people around the globe are probably mobile heavier um as far as how they balance th even those who do own desktops are probably spending much much more of their time on mobile phones so M totally and maybe just to throw a thatat that you might find entertaining 60% of people report that they uh use their mobile phone on their toilet uh which is I think is really I think um you know says something about about us um as humanity and I think specifically it says that 40% of us lie yeah I mean I'll be the first one to admit I I was on the toilet earlier

today and I was on my mobile phone so yeah that I'm part of that stat um okay so Switching gears here a little bit um to to look into some more of the on chain Dynamics um CeeLo has has capitalized on the mobile first movement um and now you have voro as well as Opera Mini and and others that are running on on top of the CeeLo blockchain so getting into uh the transition uh into an ethereum Centric rollup uh what H how does this transition um underpin the the message that you guys are sending to the world

that you are mobile first you're here for Speed and you're here for adoption H how did you incorporate some of those ideas into the the decision to become an L2 yeah it's a really great question um and I really like those three bullets um they align very very uh closely with um with a lot of our Focus um you know I think as Tim mentioned we our Origins were in ethereum um and and philosophically we're very aligned with the ethereum ecosystem uh and we didn't really have an opportunity to um to execute on our vision um back when we started um in any other way other than

creating an Nel one but now that you know there's a there's an ethereum rollup um road map um there's all this work that's been done on road on rollups um really more philosophically than anything else um you know we we have a desire to to transition C from or we at clabs had this desire which we then put forward as a proposal and then the community voted on it um to to transition uh C into an L2 just to be aligned with the ethereum road map just to just to just because again we we philosophically agree uh and have um our roots in in the ethereum

ecosystem um but that doesn't mean that you know we wanted to launch as L2 uh with all the same features that everyone else has you know I think we're uh there's a lot of things that make S unique and differentiated and and we wanted to preserve many of those things and so you know in The Proposal we had three main goals um I think the first one was to maintain cheap gas fees for a lot of the use cases on c um there people using it for payments is people using it for Community currencies for micro Finance for Universal basic income um for for mobile defi uh and a lot of these use cases uh and a lot of our users kind of required really cheap transaction fees and so we

needed uh to preserve that and so that ultimately uh meant um that we had to look for uh an alternative way of doing data availability but because we wanted it to be very ethereum aligned you know we ended up zeroing in On igen Da uh which is a middleware by igen layer which you know as you guys know and as I'm sure your listeners have heard before you know is a service run by by ethereum validators and so we really like the ethereum alignment of that and so we been working with the IG da team uh now or the igen layer team now to to to create this data availability layer so that's kind of requirement number one uh requirement number two was to

maintain decentralization cell has been running for three years with a decentralized network of validators that include you know companies um you know some really great um companies with really great production and devops experience uh and a whole bunch of really great solo stickers um that that have um in some cases been with the network since before it was even live as a main net you know back when all the test Nets were running um of the other the big companies you know we have folks like uh Google Cloud uh which recently joined um Dutch Telecom um which owns T-Mobile in the US uh they've been um in the

ecosystem for a while now um uh contributing in many ways including running validators um and you know many other big big companies the coin bases the bances the anchorages and all of that um and we didn't want to just throw away this validator set and just move to a centralized you know sequencer on one machine we felt that that would be a step backwards and so um one of the you know big topics right now in l2s is decentralized sequencing and so we we worked hard to create a design that would allow us to transition that decentralized validator set into a decentralized sequencer Set uh preserving you know all of that

decentralization uh and offering you know better liveness guarantees than than l2s today um and so um so that was requirement number two two and then the third requirement was around one block finality when you have a blockchain focus on on ease of use um on on payments on payment like use cases one block finality becomes I would say more important than than for other use cases whenever you're you're interacting with the real world say you're buying something like a physical object not an nft uh having a reorg means that only one of those two transactions um gets undone if you're doing buying an nft then both

of the transactions would get be undone and so it's actually less of an issue but as soon as you're interacting with the real world it becomes much more of a of a concern and so we worked really hard to create a design that that actually preserves cell's one block finality uh which we offer through you know crypto token economic um kind of incentives and so the the new design basically for the L2 provides uh ethereum level security uh when you wait 12 minutes uh for ethereum finality but Sol level security uh um on on kind of the sub 5c time frame um for um as well and so if

you're doing a smaller transaction where you don't really uh need ethereum security uh then you know that that transaction won't be reorg if you really are sending a huge amount of money then then maybe you'll 12 minutes to get that ethereum security for you know ethereum um Casper FFG level security would you consider that like a a hybrid design or in the in the world of zkr like ZK rollups optimistic rollups and different hybrid designs that I've done some research on as of as a recent how would you kind of classify that yeah it's a good question um you know I think um already many l2s are

doing something like this right sequencers give you an attestation that they will sequence your transaction the difference with the cell design is that you're adding some economic security there right it's not just you know like um a promise by some company um there's actually you know over a hundred companies that are um effectively giving you that promise but also putting up a stake that can get slashed if they ever break it uh and so so I think in some ways it's just the kind of evolution of of what is happening today for many l2s right yeah we can we I mean in another way I looking at it is we we can take

the fact that cell has been running as a like o L1 with like almost 100% up time uh for several years now um on a really like strong validator set with like cast iron um like uh kind of operational practices and security and be able to take all the benefits of that and like add in on top of that just this incredible um uh Economic Security that ethereum offers and so what you get hopefully if um if we we we kind of execute on this well as a community is like the most decentralized but also lowest cost like

L to in the ethereum ecosystem um and the way that you get that kind of security get you get all those benefits is like through this kind of layering of like immediate finality nothing's going back within five seconds um to the tune of the kind of Economic Security in cell and then on top of that you know um the uh like if you're if you're prepared to wait or you you feel like you need to wait like the um Economic Security of ethereum and a a validator set for cea is providing consensus I'd like to kind of just flush out this this

understanding and then and then hopefully it illuminates the architecture of CEO excuse me C and and that can uh we can kind just kind of all better understand rollups as well as as the audience so my under understanding of of the these validator sets is it provides consensus to the network and ethereum has its own validator set which is now proof of stake and everyone can stake if they have 32 eth they can stake these in ethereum validators and contribute consensus to the network is consensus a unique feature of cell that other rollups such as arbitrum

optimism because they rely on E ethereum's they use ethereum's gas token my understanding is that arbitrum and optimism don't have their own consensus whereas it sounds like cell does is that true right so cell is an L1 today and and we'll transition to an L2 with a decentralized sequencer tomorrow uh and so for both of these you need consensus and and as Tim mentioned we get to we have the um um fortunate position of being able to reuse our production grade um consensus protocol that that's been running uh in production Rock Solid for the last 3 years the the arbitrum and the optimism are

all moving in this direction um as well um in order to have a decentralized sequencer you need consensus around your decentralized sequencer nodes as to what the next transaction bundle is you don't have to have consensus about the the state of executing those transactions but I think just agreeing on the fact that that will be the next transaction bundle um uh is something that yeah you can you can achieve consensus on uh and um you know folks like espresso are working on this as well um you know there's a whole um I would say um this has become a really interesting research topic and

you know something that a lot of folks are are now looking into uh and certainly the direction that all l2s will go eventually and we're just excited to be at the Forefront of it and picking up on on like this this transition to this architecture um you and almost an adaptation of the question Andy asked earlier about this hybrid model and it is the consensus that you guys are you're using the ethereum consensus to provide the ultim Security on chain and then you also are layering in another layer of decentralization and consensus with cellos validators

and that's to me that signals this the hybrid architecture whereas okay and I I see some nodding heads so I take it that is kind of the hybrid model where you you're able to combine um the cello consensus for greater Economic Security on top of ethereum's value validator Network which provides ethereum and ethereum Centric architectur their own their own level of security so does this unlock I think you did mention a few features this unlocks one of them intuitively sounds like greater Economic Security more like like stronger consensus around what the next transaction is what are other features

that that this hybrid model unlocks yeah I think fundamentally shorter block times with economic security not just with you know some uh company um claiming that they won't um reorder these transactions or exclude them in the future um so that's number one and number two um the the economic some economic finality uh that you can rely on to know that that transaction um will once it's in um an L2 you know unsafe block to to borrow um the vernacular of op stack you

know it won't be that unsafe block will eventually uh get promoted to a safe block and it won't be reordered got it cool and I'm glad you bring up op stack uh because I I I think that's kind of a uh next direction to to go into um so yesterday is an is an all L1 tomorrow will be an L2 so there's a transition that takes place and that that means developing and building um and there are lot there's there's several Solutions out there to deploy new rollups or it sounds like migrate existing l1s into L2

rollups so what is the infrastructure stack that cell is choosing to to leverage to make this transition wait to see who's going to go um so so I guess I I guess that's that's that's a pretty exciting question funny you should ask that so um you know the original proposal that we as cabs wrote um you know tackles this question right so one of the things that we really really wanted to do was make this proposal to the cell Community hey we should become a l to um roll up on ethereum um like really like concrete was to kind of sketch out like an implementation

plan on how to do that right we didn't want this to be taken in any way it's just like marketing um and the um the we're big fans of um the op stack we're big fans of um I mean to be honest we're big fans of like the work the optimism and arbitrum have done both both um projects have done like blazing the trail here um but from a kind of openness point of view from the kind of enthusiasm and willingness to like kind of collaborate and like uh shape the future of a project I think like you know uh the op stat kind of stands out

um there and I think it represents from the kind of uh Cab's initial proposal that was like I think the the kind of root that we proposed that we go down in order to take um cell forward as as an L2 you know what's super interesting of course is like this space is advancing so so quickly that like even in the few weeks since we put that proposal out since like um we kind of unveiled it at etcc and the cell governance process and Community decided to take that forward we've like seen advances in this space

and like new projects and like new uh new things emerge yeah and um and so I think that's been really interesting I think after we put out the the op stack based proposal um at ECC uh we got a lot of inbound from a lot of different projects saying hey you know um heavy looked at R stack um a lot of ZK um um evm based projects I would say reached out um and you know many of these projects are um continuing to to either release or launch or you know upgrade their their stacks and in some cases um the

latest work that that um they're working on isn't always public um and so I think that was pretty interesting to to to hear from these folks um but ultimately you know sell was decentralized project uh cabs is just one party in in the ecosystem and you know to a large extent had already done a lot of research and and kind of made a call uh and so I think ultimately uh What uh what we've seen uh is these projects uh wanting to to have those conversations in the open with the whole cell ecosystem and so um you know we've seen for example polygon has

posted to the cell Forum fairly recently and started engaging with the ecosystem about you know uh having cello transition uh using polygon cdk uh as part of kind of the polygon 2.0 Vision that they're working on um and it's been really interesting seeing those conversations pop up and and and hearing about some of the offerings that that polygon has that you know could potentially offer an alternative path for for C to to migrate and so um I think it's a fun you know interesting time I would not have predicted this at all um um you know and I think our jobs at clabs is to help the ecosystem

navigate this in in a way that is as Fair as possible to to all the different projects um kind of coming to the ecosystem and ultimately that that uh results in in I think the the best outcome for for the cell blockchain and the cell ecosystem you know I think we uh we think that you know ultimately that's really important and so yeah it's going to be you know interesting to see how this plays out if you know any of your listeners have any viewpoints you know I would highly encourage you to kind of join the conversation and and jump on forum. c.org um and uh you know continue the conversation yeah we messing around before about being the hot girl in the

room and and that's kind of where you guys are at it's funny to see like the the proposals come up um and I think from a from an incentive point of view these these rollups as part of this rollup war that I'm pushing there's two there's two kind of sides there's how do we attract the users which is going to be a question that you guys will be faced with after your kind of transition it's always a question that you've been faced with right during uh Past Times current and future um but even even you know furthermore there's going to be more and more rollups launched it's going to be how do we attract the users how do we get sticky liquidity how how do we get people that kind of want to use this as a home base and that's a whole another conversation but then

there's also these kind of stacks that that that just have projects like cell that want to turn that want to become a rollup and like what is their kind of pitch you know and I'm I'm kind of curious from uh you know from that perspective I guess a lot of it is on the forms there um you know but I'm curious if there's been any sort of like key standout points I I I I'll give you an example there's this L2 called mode which is doing uh sequencer feed distributions to the uh devs which build on uh that that uh chain which is just an example of kind of like intensiv isation of these protocols and teams um so I'm curious on that front and because

my Wi-Fi is shaky I'm going to throw another one at you guys which is is the economic model of a rollup very very appealing when compared to the economic model of a proof of stake L1 if so why or if not kind of why not so first kind of like um that kind of what's what what are some of those like incentives you know to kind of that you may have seen or that you've heard of and then kind of the economic model is that a big push you know is that much better yeah I can I can take that um I I think you know when it comes to um um attracting developers and users to to the plan form and growing Network

effects um you know I think the L2 transition plan doesn't really change anything you know I think our our strategy has always been to build a blockchain that makes it really easy for people to build applications that are accessible uh and easy to use um by you know a lot of people um you know which again is is why there's a big focus on on mobile and and you know we think that that um will continue to be attractive to to developers and we're going to continue to to um iterate and improve things on that front and we think that the upper mini um launch of you know mini pay uh with 100 million users again

that they are um re this this is not a new product that they're releasing that requires people to download install a new app this is part of an existing browser app that is installed on I think 500 million uh devices already and you know with with over 100 million active users um and so that is a huge audience uh for dap Builders to um to get their daps in front of um in terms of economic in um the kind of to token economics of the move you know it is interesting you know I think with a um using uh igda for data availability uh I think makes um the

lol2 plan um I would say result in a pretty small change in in token economics you know right now I think 90 to 95% of gas on most l2s is is spent uh paying for uh data availability right paying for that transaction to be then stored on on ethereum that number will go down with Proto sharding and we'll go down even more with with Dan sharding eventually uh and you can think of end da as effectively being dank sharting available you know two years before it might eventually roll out to ethereum um and so Our intention uh right now is you know

obviously to eventually migrate to dank sharding um you know once it's available you know I think that um that's going to offer the best uh um data availability you know and security for for the L2 but absent of that you know we think that IG da is just an incredibly great option uh given that it's bringing that technology to uh ethereum validators and you know to users of the ethereum ecosystem uh sooner um but ultimately it means that you know that 95% transaction fee portion basically goes to almost zero uh because it's just so so so much cheaper um and yeah I think I think base is paying uh over

100k a day right now I think if I'm not mistaken because of frch just to get all that all all that data there it's insane um and I think one other thing about the op stack that you guys can take advantage of if that's the route that you take is eventually there will be shared there'll be shared service model where you know all of the rollups on the on the op stack should be sharing the cost of the sequencer so they should have a shared sequencer and they should share the data ability data availability cost so to a certain extent like almost a move to if you can get more and more chains to kind of come on to the op stack as the technology evolv for the shared shared cost model um it kind of helps everybody who's building there definitely yeah I think one of the

most interesting things happening in the L2 landscape today is uh something that I think is orthogonal but very related to the stacks that that uh folks are using and that's um kind of these these l2s um kind of aligning themselves together and forming these types of alliances around their sequencers but I think more significantly around their Bridges and sharing liquidity in bridges as well uh and it's obviously easier to do that if you share or in some cases required to do that if you uh share the same stack um but ultimately you can share a stack and I'll be part of this as well and so

I think something that uh will be important for the cell ecosystem to to have a conversation around and to decide on is is not just kind of the stack but also like looking a little further forward uh um you know what about these what about a shared Bridge uh what what makes the most sense for the ecosystem um because that I think ultimately will translate into a whole bunch of additional functionality uh between those l2s in the future right yeah I mean it's it's it's a super super interesting and challenging uh kind of thought experiment to kind of project forward to figure out like almost like which free

trade zone do you want to be part of right and that is has so many factors um in involved in it um you know you're you're kind of trying to make a bet on not only the technology but also the success of the other r2s that have not even yet been created that have not and the applications that have not yet been built and we know how quickly they can come up as per like friend right um uh because they're ultimately what's going to be attracting um attracting users attracting liquidity and that like rapid sharing of like liquidity between those l2s and the stack is really um very interesting and of course there are

going to be a lot of network effects here and I think like Andy your like L2 stack Wars analogy is potentially like I mean we're seeing a little bit of this I think with like the super op super chain and with um the polygon cdk like a you know the polygon team have put together really really compelling and interesting technology stack I mean they have like a lot of expertise um in the validium space and I think um what they're proposing in the aggregation layer is very interesting and there's like hints at the kind of beginning of this um of this kind of like um this liquidity um this this bridge which rapidly moves liquidity between l2s and

while minimizing like the cost of running on ethereum um and so you know this the op stack has like tons of potential here as well and I wouldn't be surprised to see proposals like this uh from from other players in the spaces as as well in general as the kind of um uh as the space emerges but you know like none of this was even like stuff we were talking about like three months ago really um and so it's just evolving so fast it's really exciting to see where it's going yeah why I was curious about the incentives you know just like um are these guys offering like who's Like Money Talks you know like which which ecosystem wants you wants the users and

the and the builders and um yeah I think Rob had some well I was curious ultimately how these the decision is made um it goes through Community governance um and then in cell kind of what what does that look like in practice whether it's on Snapshot or tally you know we can all go to The Forum and and kind of check out those proposals um and then and then how does a decision how is a decision made uh from there yeah great question so cell has built in smart contract based onchain governance and has had since main their launch it controls like all aspects of the smart contracts deploy all the core kind of protocol owned

smart contracts that are deployed on on cell and that governance mechanism can also be used for kind of indicative temperature checks of cell voters just by like not attaching any kind of code execution to the proposal and you know that has been used by a bunch of folks in the community for a range of purposes before uh and that's kind of exactly what we did after like putting the Forum post out for the L2 proposal um of course uh from a hard for perspective it's you know slightly different ultimately any adoption of um a major new stack like this is going to be a hard for and for that you need like a um Quorum of by like two-thirds Quorum of validators or in this case as the

validators transition to becoming sequences decentralized sequences um you know you you'll need uh like strong participation from that Community as well to be able to to have this done but I would be um you know with many like web three communities we've always tried to like cell as a grouping has always tried to like operate with like um you know strong uh consensus like you know like operations like we try to get buy and as many folks in the community as possible and like you know work things through so that everybody has kind of got General consensus around an approach rather than like you know forcing things

through to like a a token based Vote or like you know having validators validators make the decisions so I think um I I I suspect it would be like you know something that was done after a lot of discussion agreement between like validators like you know app developers um protocol developers um token holders and and you know the whole constituency really and yeah you you asked question about incentives as well I mean like again this is totally new new era right like you know this is essentially one protocol suggesting that another Community or protocol be adapted right and so like what does what does that even look like

from a from a from an in incentive perspective right it's like you know it's kind of interesting Uncharted Territory here yeah exactly like how do you you know is there is there discounts on fees is there payments up front token allocations this that the other Deb resources liquidity you know things like that um so I kind of want to posit us one add to that one of the really nice things about having full onchain governance with execution is that the the governance participants effectively create a dow that can hold the treasury as well and so that also presents additional opportunities around incentives right it can be a grant that

goes to the to the onchain Community Fund that then can be governed by basically cell holders which I think is you know definitely pretty unique and interesting yeah and optimism has a huge grants program and other um other communities did too and I mean that the the whole arbitrum situation kind of got me on that incentive um conversation with regards to incentivizing protocols with their users and kind of trying to get a little stimmy going for the arbitrum ecosystem arbitrum was kind of like the only ecosystem for l2s there and then all of a sudden it's like oh what's going on in arbitrum there's nothing going on anymore yeah because there's freaking 69 4,020 other l2s that have just launched in the last month and everyone has a a memory of a goldfish

but anyway shifting shifting kind of Gears to a post hardfork world today we're preh hardfork what does this post hardfork world look like um seeing as the the listeners are watching this Thursday or or or further kind of what's the difference between the hard Fork world yeah and you know for listeners um wondering what hard Fork Andy's referring to it's the gingerbread heart Fork that's happening uh on Tuesday the the 26th of September so a few days after you guys um uh or a few days before you hear this in our case it will be tomorrow um yeah it's an exciting hard Fork it's the first of two hard Forks

that basically are part of this L2 transition so you can think of this hard Fork as really setting the uh uh foundation for the eventual um hard Fork that will transition C into and L2 uh so it's pretty exciting um but beyond that there's also a whole bunch of bonus features and so there's a lot of scalability work that also went in um with this change or with this hard Fork cell will be able to process just um shy of 900 transactions per second which is no small feed for an ebm based chain and certainly within Striking Distance of our of our goal to get to 1K

transactions per second um really really soon um so that will be exciting um there's um also a really cool change happening um so cell supported EIP 1559 since three years ago before ethereum adopted it um but the base fee has always gone to the Community Fund uh starting uh with this hard Fork 80% of that base fee will be burned and 20% will go towards a um green fund as we're calling it uh which is a contract that can convert those fees into carbon offset credits on chain and and then

retire the carbon offset credits and so you can think of um this is um resulting in every transaction that you post to the chain uh contributing to carbon offset credits being purchased and retired to help offset the uh the carbon of the actual transaction itself and this is already in addition to cell using uh emissions to buy carbon offet credits So speaking of oning governance literally the first governance proposal that anyone brought to the community was to make cello a carbon neutral uh platform three years ago and have it use emissions to buy carbon oide credits programmatically and so it's

been doing that for the last three years and it's been carbon negative because actually it's bought more credits than uh we estimate the network has um contributed to um you know CO2 um but with this change you know every transaction will also have an impact and so we're calling we're calling this Ultra green money uh inspired obviously heav believe with by ethereum's ultrasound money and so we're pretty excited about this as well um and then a whole bunch of other improvements uh around governance participation and um um and and again um L2 related uh transitions um you know for anybody

interested you know definitely um I encourage you to to read the blog post we have about the release notes um it's it's G to be really exciting nice thanks man yeah that's awesome that you guys been negative for that long shows a good faith effort to really just you know what's what are we doing here on this Earth You know on on this podcast in this digital world you know like what are we doing we're just trying to prolong life and make a better place so um big ups for that uh as we kind of wrap up I'm just kind of curious like your your mental model um on this this this might take us for another

world but like it we talked a lot about the optimism stack and kind of optimistic role UPS being naturally more flexible and you know a bit less restrictive than the ZK stacks and and the ZK RS that we see now and really more conducive to actually like adopting you know a ton of people on apps like FR Tech but do you guys hold the belief that rollups will all become eventually ZK and that optimistic will be phased out or do you guys see a world where they both exist Hybrid models like I'm just curious on what you guys think on the state of rollups let's say one to three years from now and then if you can any any way that you you kind of have thought about this with your decisions with c as we kind of wrap up Tim do you

want to take this one yeah I wonder whether my answer is going to be the same or different years we should commit to an answer and reveal it together yeah yeah yeah no I think it's think well I I mean I'm gener I'm gonna make a joke about that um so I think I think ZK Tech is extremely interesting and very powerful but also still extremely early in terms of we're beginning to see the first kind of practical evidence of like what this proving technology can do and like exploring some of the use cases for it

but um it is still early from the point of view of like proof size like edge cases amount computation or like dollars for actually creating these proofs amount of gas on ethereum in our case for like um you know in in L2 in General's case for like actually verifying them um the amount of effort it takes to build the circuits the first place and like the specialization of knowledge I think we're going to see is like um the new proof families kind of emerge and the tooling improves I think we're going to see just like a kind of explosion in in the practicality of this stuff in in in a couple of years um but

it is I think um the polygon cdk is making a bet on a bunch of this stuff they have some very talented folks there um working on it but it is still definitely feels to me like early so I guess the question was like does everything end up there I don't know but I think like it'll be more stuff than not probably just yeah and my take is everything will end up there I don't know I don't think it'll take a year prob take closer to three years but um you know if you think about um security of l1s and l2s right one of the nice things about an L1 that's just a standalone L1 is that

if you run a full node you can um verify every transaction and you know exactly what your balance is you don't need to trust anyone if you're in an ecosystem of chains using like client based Bridges say like Cosmos then you have to start trusting the other validator sets of all these other chains unless you run a full node for every chain that is communicating through IBC uh and so that creates a bigger trust um um I think requirement of you and ultimately may not scale which is why you know ethereum ultimately moved away from its sharded design and moved towards the rollup Centric model which you know under the optimistic design

only requires one honest party on every one of these chains right uh to be able to to to request a fraud proof or to submit a fraud proof and so that's a huge improvement over kind of the uh the like client-based bridging model um and then if you go to ZK you don't even need to have that right as long as you trust the moon maath and as long as there's no bugs um which I think is the biggest challenge today uh then suddenly you can scale to you know millions of l2s uh and not require uh everyone having to run a full node for any all of them right or even you know anyone running them uh and that's really elegant

especially when it comes to finality and the ability to transfer value between and send messages between these things not having to wait a week is is really quite lovely um you know I'm I'm hearing rumors that um there are you know L optimistic designs that give you some of these benefits in the works and you I think they're yeah fuel approver fuel network has a really cool one and I think ultimately they still you know are going to use ZK Tech but in more of an optimistic design but I still think that you know ultimately ZK uh is just going to play like a huge huge role you know there's still a lot of challenges to

overcome right I think the uh the circuits are big it's hard to uh it's hard to prove correctness you know zcash um had a bug right in their uh in their circuit that actually allowed anyone to uh mint an infinite amount of money without anyone else knowing right um especially for the Privacy focused ZK EVMS you know that's that's going to be a really really big potential challenge um and uh and then of course the fact that gas costs uh are different for proving than for running um means that there's dos opportunities there's a whole bunch of potential problems and then you know all of these systems are

built on prover ZK PR technology from you know around like a year or two years ago and there's a whole new um um set of Innovations happening right now around folding techniques around Supernova uh that might unlock even more performance in the coming future and so there's going to be new proving technology in the future and then there's going to be an interesting question about how to migrate to all of that I think in a IDE World um there'll be you know one very very audited um very um high performance proving system that everyone adopts and then they create will create front ends

around it um and in a very Ideal World those front ends will Target uh isas of you know like myips or or risk five that will allow people to just run to create proofs that are effectively just execution traces of of existing code um because I think that will make it much easier for everyone to adopt it it won't require uh those cryptographers having to create these circuits every time there's an upgrade to gu right I think uh you know we've been around for uh you know in production for over three years and we've been tracking uh gu and and tracking Mainland ethereum that's a lot

of work uh to keep pulling in these changes if you have to create circuits for every change that's coming in uh that that can be you know quite owner is and so in an Ideal World you know folks won't have to do that we'll just have high enough performance uh systems that can proove arbitary machine code obviously risk zero is working towards that and you know they've having some success with it but I think the performance has to get a lot better uh in in the next year or two for it to really go mainstream but I'm actually pretty optimistic that that will happen um I think talking to a lot of cryptographers today the types of improvements in performance that they're predicting are actually really really high and so I'm really cautiously

optimistic that that that world will will happen sooner than later nice yeah thanks for the in-depth answer it's been a pleasure guys um I mainly asked that question because at ECC I was sitting in on a panel where I was co-founder of meus was the moderator and it was three ZK guys and Harry from arbitrum and the debate or the conversation started off quite civilized and then within about three minutes it was three ZK bullies ganging up on arbitrum as to why they're basically gonna fade into irrelevance in the coming years and then there was the arbitrum guy laughing away because his

tbll is more than all the combined ZK and that takes us to the end of this one so thank you guys for coming on it's been a pleasure thanks for having us yeah thanks for having us Cheers Cheers this was a blast thanks guys yeah great chatting yeah