DeFi by Design EP#58: Exploring Zk-Rollups & Modular Blockchains w Syscoin

Transcript

welcome to d5 by design where we talk all things blockchain and cryptocurrency while striving to educate empower and enrich it's your boy andy and welcome back to the defy slate youtube channel smash the like button on this video that really helps us out and sit back and enjoy the content thank you very much what's going on everybody welcome to episode 58 of the d5 by design podcast merry christmas and happy new year to you all coming out we got a little bit of year-end tax loss harvesting happening the whales are trying to flood your bags right now take it easy guys enjoy the family time turn that leverage down and learn some about what's going on and defy in 2022 and that's what we're doing today uh today we're talking to an og

project from 2017 back when rob and i used to be freshman year in university trading on bittrex this project was there was on our radar it was pumping it and um yeah they've kept building and and they've kept going and now are pushing hard into the d5 space this project is ciscoin we're joined today with bradley and jag um great to have you guys on as always here with robbie as well robbie's posted up in tennessee in a cabin vibes i'm down here in florida enjoyed in the sun and we're excited to chat for a good hour talk about blockchain what cisco is building d5 in 2022 um and all sorts of trends that are going on so let's get started what's going on rob yeah yeah man well happy holidays to everyone listening and

a happy new year i'm super stoked to be talking to cisco like andy said they've been building and building and building uh pretty much since we got started one of the og projects out there that's been at the at the root of the fundamentals of blockchain um as kind of d5 evolved and some of the different use cases evolved into applications ciscorn has been at that fundamental layer uh all the way through so i'm i'm really excited to hear from bradley and jag um i guess to to start on kind of the evolution of how cis coin has uh really evolved over the course of um you know the last few years and with the emergence of some of these new applications kind of how cis coin

has dealt with them uh you know kind of seeing what's out there but continue to stay true to your mission um and you know that that's kind of open to whoever would like to take that bradley or jag but if you'd like to kind of walk us through uh you know what is ciscoin doing and how have you all evolved over the last few years yeah so my name is bradley stevenson i'm a cisco foundation board member uh very happy to be here um and dive into cisco so what attracted me to the project initially when i first really started looking into it in late 2016 was uh just the methodical approach design to design the the maturity um

from a development standpoint um the developers you know jag in particular seemed to really have his head on straight um he wasn't you know there wasn't like a um there wasn't a push to rush things to market um having a proper design that really accounts for where blockchain technology is at what the challenges really were and where cisco was at at that present time and sort of uh you know the direction that it needed to move towards uh you know becoming an ideal layer one for a scalable future uh you know which which had not been reached at that time um i i found to be

incredibly important and um i've been with the project ever since um as i said i'm i'm on the ciscoin foundation board um you know before we dive into cisco and um too much i think it's really important to give an overview of where we're at market-wise because these are some pretty key and important times and and when you when you understand what what's right over the horizon then you'll be able to grasp uh much better the importance of cis coin so i'll dive into that a little bit but i'd like um of course for jag to be able to give an introduction as well yeah hey guys uh no thanks for having us

uh it's pretty awesome to be on here um some of the interesting things that mark the historical precedent of ciscoin was going back 2013 where we wanted to see how you can bring more value than just our store of wealth using the blockchain so we initially created identities and e-commerce and certificates and escrow systems on the blockchain using kind of like i guess you can call them hardened smart contracts so these smart contracts were just coded in um to do a very specific job and they couldn't be changed and that was our cur you know our first foray this was before ethereum um we realized you know what works and what

doesn't work and we took a step back and we said okay well you know what does the next five or ten years look like and how are we going to get there of course the the big monster in the room was zero knowledge proofs and how do we uh leverage those effectively it didn't come till around 2018 or 19 we realized that zernal's proofs are going to be able to effectively solve this computational scale problem which is is huge because in a blockchain there's only two things there's data availability and there's computation and the reason why all the transactions are posted on the blockchain is because the data availability is needed for all the nodes to process things in order to be able to compute that the

blockchain is in the correct state if you can offload the computation to a secondary layer using journals proofs not only do not get any of the trade-offs of decentralization you're still 100 decentralized because you're using math and not game theory but you also get um you know the economies of scale we're talking about iot smart cities ai levels of scale where the more volume you have the more scalable the system gets and so from 2017 on we had our you know the horizon was we want to do smart contracts we want to do it right we want to wait for ethereum toolkits and two stacks to mature enough so that if we use them we can depend on

them and not you know have them break on us so we waited until the right time and it was the right time around when the xero knowledge proof stuff was getting um really really mature enough i spoke with both uh the starkware team and the matter labs team to get a an idea of how mature and what the paths and the road maps are and i was convinced that in short amount of time ethereum is going to scale up uh and it's not going to make any trade-offs now where does that leave ethereum 2 and cisco and that picture we'll continue that but that's kind of where we started out and kind of what we are right now before the inevitable you know cliff of jumping into layer twos and scaling up with

economies of scale and all sorts of new use cases that come about as well and what's really interesting jag about that is we're finally starting to see this conversation hit the mainstream of twitter almost you know we we got the alternative layer one rush this past year which really i mean not a lot of people saw coming unless you were an early investor as a vc it was all about eth d5 last year in 2020 well i guess it's almost two years ago now and then now we've seen this alternative layer one and almost those are those are kind of almost in a position of oh well what if we can do better and now and now we're seeing quite a bit of this of this layer one against the zk roll up and kind of layer two debate um but you know

some of the stuff that i've read up on about cisco and actually kind of explains almost a little bit of both kind of in in the system if you will um so i'd love to kind of hear your thoughts about that current you know the current environment between the alternative layer ones and zk roll rollups kind of what your thoughts are briefly and then you know how does cisco and try to optimize um to create the best environment for all yeah you know bradley before you jump in let me let me just uh preface that with a rationalization on what ethereum foundation was thinking before the advent of zero knowledge proofs at us in a scalable way you know the the literature has been that ethereum is needs to scale cryptokitties and all

that stuff proved that something needed to be done but we didn't know what and so they um uh in order to cut down on the the blockchain bloat and the ability for light clients to sync up uh the blocks you know no one runs archive node for example the only really way to have a decentralized system is to break that system apart on the layer one and that's where they got into sharding and if you're doing sharding you need to penalize nodes in case they're not operating properly so that's where proof of stake comes because now you have a stake and you can eliminate that stake if they're not acting uh honestly um so you know that's where pos and sharding came was a result of a layer one optimization problem before the creation

of zkp's you know if you if you even go back to vitalik's 2020 uh quotes it was more about oh optimistic roll-ups are here now we still will do proof of stake we'll still do sharding and whatever gains optimistic roles gives us we'll multiply that by 10 because our layer one is more secure so that rationalizing happened you know from 2016 on and that's where the alternate side alternate layer ones came to be so people are like no you know you know we already we can already do staking and uh sharding in a better way so let us introduce a new layer one that can beat ethereum and its own game compa competition to ethereum uh but what's

happened since then is now the creation of layer twos you know solving this thing properly um it's hard for these layer ones to really grasp that they have been beaten at the scalability game because it's not at the layer one so what's gonna happen is layer twos are gonna start to uh form on these other alternate alternate layer one block chains and then the market's left to decide which proof of stake shard system with layer twos is is best uh and where we are a little bit different is instead of us thinking oh we need to we need to optimize the heck out of layer one we've instead stood back and said no bitcoin is the gold standard of security so let's stick with layer one being very secure and we'll scale with layer two without doing all

the sharding pretty mistake nonsense which is adding tons of risk i'll let bradley step in yeah sure so yeah yeah yeah um i was just going to say with with scaling have having been an issue for so long i mean on the value transfer side as well as you know of course the computation side with ethereum um i i think there's still quite a bit of people there they're sort of missing what what's really about to unfold here uh with a legitimate layer two for uh smart contracts emerging you know in the form of uh zk roll ups you know we had optimistic roll ups as well which

was sort of like gamification uh and security assumptions based um but zk roll ups really i think uh are the way so um it's it's an interesting situation where you have so many of these alternative smart chains with proof of stake models um that will essentially find themselves competing with ethereum which is proof of stake and has zk rollups and has a very resilient and robust network right so um i don't know that a lot of them will really have a differentiating point maybe other than the fact that they sort of have a um like a

sort of a cult following right like every chain kind of has a cult following um and but for the most part applications on an evm are compatible with any other evm right so um i think i think in most cases projects in the long run will end up choosing you know between ethereum or something like cis coin that offers um that you know gold standard uh nakamoto consensus proof of work you know that's merge mind and everything like that that's incredibly dependable as far as security and has all of the scaling benefits that you would find on ethereum as well so yeah i mean it's it's a big macro

trend that is emerging and it's really going to steer and change the surface of the market in a lot of ways we're going to see a lot of um of new use cases emerge with scale which is something that jag points out quite frequently um i forget the name of of of the doctor who who pointed out that when you have an increase of scale you know when it uh you know that your use cases uh tend to multiply right and uh when you combine that you know further with things like uh metaverse uh beginning to gain popularity now uh which is essentially like a parallel world that has its own physics right and economics is essentially an abstraction

of physics when you when you factor all that in and you know then you begin to realize that metaverse will essentially remove the blinders from people's eyes and insofar as how they see value and they'll be thinking outside of the box so just the the um i would say the future is really going to be a hot bed of innovation as far as decentralized tech in ways that um we haven't seen yet um and you know so many so many of uh you know centralized services i would say or users user experience is normally only associated with you know centralized infrastructure [Music]

those experiences will be possible now and using decentralized infrastructure and projects and businesses enterprises will have the ability to maintain their business models or even enhance their business models while decentralizing um you know because of some of the benefits that zk roll-ups provide it's it's it's really such a vast topic it's it's it's so game changing um not just for technology but for the crypto market um you know just very exciting times coming yeah and for everyone who's listening to unpack the benefits of zk roll ups which

we've touched on in the podcast um we know that there's two main benefits over and above optimistic roll ups one one being the the finality each each transaction has its own uh proof uh so it's proven validity um even before it's posted to the ethereum blockchain so there's no seven day withdrawal uh time um and the other benefit of zk in kind of uh in excess of these other layer two solutions is that it it becomes faster and more efficient um i guess the word that jag used was computationally scalable it becomes more scalable as

there's more volume and that's because as there's more transactions there's more roots on this merkle tree so that there's there's more efficient um computation as the as the chain scales and i want to now you know dive a little bit deeper into layer two specifically zk roll ups and how cis coin is leveraging bitcoin's security model and how that offers a competitive advantage over some of these other layered twos yeah so the way that i like to explain it yeah just uh and um yeah go ahead we're both eager to talk oh it's just i was just gonna say that the optimistic roll ups um you know they

may just as be scalable as a zk roll up but in a zk roll up you have the option of storing the data off chain because again in optimistic roll-up you have to take account of a challenge you know in a challenge when someone says oh that's not the state that the blockchain should be in let me post the data that involves the merkle root and all all the transactions and then you and then the smart contract rebuilds the state and sees who's right and who's wrong now that is different than uh a validity proof which guarantees that the system is correct rather than relying on someone else to say oh that's wrong i need to do something about that

so if there's no one watching that system it's hopelessly insecure however it's just as scalable you know because the data going on the chain is almost the same as the zk roll up however in the context of a off chain roll up where you know some businesses may prefer to keep the data off chain to increase scalability another 10 or 50 x that option doesn't exist in optimistic law because the data has to be on chain for it to be proven valid the last concept that actually no one is really talking about is privacy preservation and the current iterations of optimistic roll-ups you do not have the ability to do privacy because a smart contract needs to be able to see all the transactions and a zk roll up

with uh some of the stuff happening especially around the zke evm where you'll have direct evm provability on the opcode basis you'll be able to do client-side validity of a transaction meaning i go to metamask and i sign a transaction and i actually validate and a proof that my transaction is valid and i send it to somebody else in a proof they don't see what the transaction is who's involved what it is what the amount is all they do is they roll that up they roll all of the proofs into an outer proof and store that on the blockchain and so there's no privacy given up um in in any of the transactional model whereas an optimistic uh you can combine these concepts maybe have a zk plus optimistic for privacy privacy

preservation but the current iteration optimistic roles don't do that so just wanted to highlight that and then there actually is a third type of blockchain and that is a succinct blockchain myrrh and minnow protocol are examples and those end up boiling down if you really refactor it enough those end up boiling down to be a single roll up it really is just a single roll up because all of the transactionality happens on one layer and therefore i would call it a monolithic design because everything happens on one layer whereas in ethereum and ciscoin you'll have this the one layer but all of the transactionality will be off on secondary layers it's not to say that mer and mina can't do that but the way

it's designed is that everything is posted and the proofs are posted on the on the first layer and so all of the data will have to be posted on that layer as well yeah and just real briefly not too much of a digression but we haven't touched on the uh difference between a monolithic blockchain and and what i what you're pointing to it as the other type uh as a modular blockchain and i believe cisco it fits into this more modular category if you could just briefly describe kind of the difference between a monolithic blockchain and a modular one i can give examples like um celina and avalanche ada tron bsc these are monolithic designs even

ethereum one is a is a monolithic design as it is today however the road map has adjusted since last year to be a modular design roll-up roll-up centric roadmap is what they called it we cisco is designed from ground up to be a modular design because we have slow block times and finality after 15 seconds of a block and we have uh selfish mining we solve that and we're proof of work and so a little bit slower on there one but more thought of is like a court system stable secure you know you've got the lindy effect on bitcoin and everything happens on there too and what that means is you can have all your transactionality not being on that one layer it's they're all going to be

on separate layers like ibm can run one intel microsoft can run one they can all be completely separate and not have to intermix any of the accounts and therefore they'll achieve true parallelization right like if you have two different roll-ups running those accounts are not connected the systems don't need to touch each other therefore they can operate independently and therefore the scalability is multiplied by two instead of you know in some systems you'll have to have shared accounts or and you have to synchronize them and you're making synchronization assumptions stuff starts to break those were some of the uh innovations that selena was bringing to the tables doing optimization and parallelization and that kind of thing but at scale those become more complex

and so if you keep them separate uh the only real way to keep them separate is through is to math right not cryptographic assumptions because as soon as you make these assumptions you know that some the black swan event is always going to happen at some point in the case of zk roll ups the black swan event is a mathematical digression or some sort of quantum breakthrough or something like that which is a much stronger assumption on uh on the on the system it's a weaker cryptographic assumption you know it's probably more safe than assuming that uh there's going to be no black swan event of people colluding or something like that right yeah the way that you kind of put it it makes it pretty easy to understand as the

monolithic block chains are kind of all in one right they have the availability of the data layer and the execution layer basically in one chain um and effectively the modular ones where each is heading with each 2.0 rollups um you know and and cisco as an example are effectively they separate the availability and data layer and the execution layer to basically offer max scale so that's kind of the downside to these um you know alternative layer ones while users are really happy to use them now including you know me and rob high yields quick you know quick transactions cheap fees it's been great but you know you start to see the the downfalls when compared to

these kind of you know higher level uh you know more scalable modular blockchains and it's kind of interesting to to see y'all's opinion in developing the vision of cisco and being ogs if you will in the space zcash zuko zk snarks bitcoin of course you know being in crypto in 2013 2014 2015 you kind of keep this level of bitcoin as gold if you will z cash is like you know the the good um privacy coin right of course there's others um so it's kind of interesting to see how that has shaped y'all's vision compared to some of these earlier builders or sorry some some of these newer builders who you know perhaps

didn't quite get let's say baptized if you will so i'm curious to kind of hear more about um the development of y'all's security model um both sides the zk roll ups and the bitcoin model and why you guys think it's the best for scaling blockchains yeah so um you know there's the lindy effect theory um which is that essentially the longer the technology has um has been around and has been relevant and used um then sort of the longer that that you can project that it that it will be relevant into the future uh and we see that with bitcoin right and we see that with ethereum as well um

both being first movers in their respective areas bitcoin with um uh decentralized secure settlement ethereum with decentralized computation um and so you know we we've been a bitcoin merge mind um blockchain uh for a while um and you know we we always saw the value in that um merge mining was an idea of satoshi himself you know that he put forth on the bitcoin talk forums years ago when he was talking with the guys at bit dns you can go back and and sort of look through that but i think it's going to become a lot more relevant into the future um and i'm

excited about that um i think it's i think i think merge mining is is just as prophetic uh in its importance as um you know satoshi's idea for the utxo model and change addresses right because now that we see advancements in quantum computing and you know people tend to bring up this question all the time about blockchains you know are they quantum resistant and i think a lot of that's overblown in many cases but um you know in particular with bitcoin you know because those change that change address scheme is there it is like inherently quantum resistant already and um it's almost like satoshi saw that ahead

of time right and i and i think um i think the same holds true with merge mining particularly later on in bitcoin's life once it really becomes mature and it reaches towards that you know you know hitting that max supply um that that will be a way that bitcoin will continue to function but as far as cisco goes uh cisco is essentially a system of systems which you know is is modular in nature and also as far as our base layer uh that's also a system of systems where essentially you've got the large sphere which is ciscoine and within that you have two smaller spheres um one is the bitcoin model the other is the ethereum model for computation and we leave both of those models intact

right we don't want to we don't want to wreck the lindy effect we want to to maintain that um and where we can with you know with minimal overhead we we will tweak certain things like um you know we have uh the mev resistance from multi-core finality on the bitcoin side um you know on the on that's you know that secures and protects against um you know people people bidding um to take other people's value um you know in an mev attack uh or 51 attacks and things like that so we have uh we have we can establish that finality because of some unique characteristics of our network in particular uh the fact that we have

incentivized full nodes and that the quantity of those full nodes at any given time is is fairly steady and predictable because we have implemented a seniority benefit model for people who want to operate full nodes so right now we have like 2500 incentivized full nodes an untold number of just regular full nodes that aren't incentivized but we know we have about 2500 incentivized full nodes that have to run a base layer you know they have to i mean they they have to run at base um they have to provide a base amount of resources you know fulfill a resource requirement so we have a rough idea sort of of what we can expect out of our network um

how we can leverage it and we can depend upon those um incentivize full nodes for some things like quorums right so um a quorum is formed um every 12 hours it's randomly it's it's it's a random selection of 400 uh incentivized full nodes and every single block which we have a two two and a half minute block time um about 15 seconds after every block um the quorum is reached and the chain lock is applied um so if there is if there aren't 400 incentivized full nodes you know we don't we don't necessarily foresee that happening because we're you know we have a pretty dependable network um

uh but essentially what our security will do is is roll back to um to the bitcoin way of doing things you know there there won't there wouldn't be a chain lock in that case if 400 nodes couldn't agree on the chain lock uh and instead of breaking the system you know if that were to happen it simply just reverts back to standard you know standard bitcoin style consensus so so yeah that that provides a lot of benefits it secures d5 um uh and essentially uh going back to the model that we have where you know we we have these uh we have these two we have these two models this model for computation with ethereum this model for security with bitcoin inside of the bigger cisco model we interconnect those

through protocol adaptation in such a way to where our computation model that we call any vm is is able to inherit the security of um of the bitcoin model through merge mining um so we leave those models intact right we don't we don't change them in any way because we want to maintain uh those tried and true characteristics but we in but we do enhance upon them uh without creating new assumptions right so that's some that's effectively sort of a kind of a visual of how ciscoing works yeah it's important to note that in a d5 system

you need to start to think about finality a little bit because of the so-called auctions that you can actually roll back the the blockchain in the state if there's enough value to arbitrage for example so if you're not thinking about finality uh the d5 of of your on your platform may actually cease to exist or become less valuable and so ethereum is planning for finality on their their one blockchain mostly the data is going to be the thing that's going to be secured on ethereum but that it'll take about 10 minutes and the reason it takes 10 minutes is because they've got to be really really sure because if they're not really sure on ethereum it's proof of stake and the system will break it will require a fork

there's no fallback there's no proof of work fall back or longest chain rule or bitcoin consensus or anything like that in our system we decided to flip flip it on its head and say we don't want to break if we can't achieve finality but we will in the best case scenario have finality and most likely 99.99 of the time we will achieve finality right in those cases no mev attacks are possible no selfish mining is possible you know you can't 51 attack the network however um that our finalities also achieve through 15 seconds or less because we're not we're not going to break if the system can't achieve finality if you can't achieve finality it simply falls back to the bitcoin model so it's a

little bit more you know a little bit of nuance there on how we achieve that uh characteristic but in the proof of stake model it's much harder therefore it has to be hardened to a point where it never can happen and we know black swans happen so the system is designed to kind of fail if it's left for 100 years whereas in a system that falls back to bitcoin we know that system is probably likely to not you know be untouched and still survive for a long period of time gotcha yeah i think bradley uh kind of succinctly stated the uh the competitive advantage that ciscoin offers as this system of systems it's

able to integrate bitcoin's security model with ethereum's computational model and and that's what ciscoin is calling nevm um and i'm curious i guess the the extent of that interoperability does ciscoin provide for uh smart contracts and d5 on on bitcoin like native bitcoin um in addition to being uh interoperable uh with say metamask and and some of the other evm chains like what is the extent of that interoperability well the the the bitcoin uh work is borrowed and so there's different ways to try to do this you can use actual bitcoin through merge mining and then also plugging into the

consensus rules of bitcoin however if you do that then you're considering bitcoin utility in your system and also you have to worry about onboarding and off boarding costs and times right because we know the block times are super slow and expensive to use and bitcoin is not really utility it's more store value so do people really want to use it for gas so you're conflating concerns in that sort of system what we thought about was bitcoin is the the value of bitcoin is in its work it's in the it's not in the policy right the policy is just a utxo model and you can't double spend that's all the policy is right we don't really care about that we have our own policies which follows almost exactly the same

rules but we don't we're not worried like our our tokenomics are geared towards being a utility and a gas rather than more of a store of wealth if that makes sense because we have an eip 1559 model if you know what that is it's a static inflation that that engages um through more vitility purpose if more people are using it more coins are burned if not then it's inflationary so thinking of it with that lens it makes more sense to just borrow the work but not rely on the consensus of bitcoin and apply your own rules inside uh instead of like the risks or risk or stacks blockchain trying to directly plug it into bitcoin by borrowing the

consensus and the work we actually don't care about the consensus we only care about the work okay and and bradley touched on this briefly but maybe we can unpack it a bit more by borrowing the the work on the bitcoin network is there any uh concern of a lack of incentive for these validators yeah that's it's a good thing uh that you brought that up because uh as bitcoin subsidy starts to narrow down the questions start to arise like what happens when the subsidy goes to near zero will the fees be enough to sustain such a large network and will difficulty start to drop because as you know there's a correlation with price and

difficulty right if it doesn't achieve mass effect in the consumer market like through maybe embedded devices and iot devices the difficulties can be really hard to keep going up right because the boards aren't getting any smaller now they're not getting any more efficient and it just requires more and more people to buy into it now what happens if the subsidy is the only thing that people are relying on then the bitcoin price has to be exponentially rising to account for uh enough for more and more people to join and the difficulty to go up otherwise it starts to drop again in our case we you know we actually have a static subsidy that's applied up to the miners on the nevm so just like ethereum is

applying a static subsidy it doesn't go down it doesn't go up it's a static amount throughout eip 1559 we modeled that out to be around starting around one percent inflation per year right now it kind of ties into the population growth right because as more and more people are coming to the earth they need a system that's going to secure them financially over time that's about one percent growth right now but it'll be dropping over time and so we kind of modeled it out in that regard super interesting the correlation

between the the population of the world over time and on chain users and and blocks and mining and difficulties it's it's something that you wouldn't even have to think about you know eight years ago and now and now you know the lindy of bitcoin as we've stated is is here it's not going anywhere and now we're starting to to really put some crazy real world use cases to it um yeah jag i love the canadian accent on the ooch man i just had all my all my canadian ancestors and cousins down and the whole house was saying hey all week so um but yeah no um a lot a lot of us defy slate guys community chicks dudes older dudes

younger women whatever it is we uh we like to get in the trenches you know and get our get our hands dirty with some yield farming some nfts you know some of the more djen stuff so i think bradley might have a little smile on his face here as well would love to kind of hear about the upcoming app layer on the cisco network what users can expect kind of some of the stuff that rob touched on the interoperability as far as getting funds there you know kind of what's on the agenda for creating a community of users yeah so um you know our ecosystem is growing um we've got uh currently

three dexes looking to launch um on cisco and evm um pegasus really is the first dex that came along um that's managed now it has cis in the name so people kind of assume that maybe that's managed by the cisco team or something but it's not it's it's an independent team that we have done work with in the past but it's their project and they're aiming to launch on um just on the any vm layer one right and then extend that into roll-ups once those are available we also have mute which uh you're probably familiar with mute it's a privacy oriented defy suite and an amm and you know they're very much oriented

to to zk roll ups and have been developing specifically you know for that for a while now we um we happened to interact with them quite a bit before they were called mute and you know jag gave them uh give them a lot of consultation on essentially how to go forward he he recommended um zk roll ups to them uh as the avenue for them to fulfill what they were really looking to do uh which is to have a privacy oriented device suite um you know and there's some there's a there's another one that i won't mention quite yet um uh we also have partnered with um the project currently known as any swap uh which i think i think they're rebranding

to multi-chain um uh and you know they're they're essentially a um you know a cross-chain bridge um that uses sort of an optimistic approach which works for now but that will be a great way to to get value from other chains into our ecosystem as well we've got an ai oracle project that's you know very interested in launching as well and just a number of others i mean they keep coming i personally you know have a little bit of a challenge in like trying to keep track of them all but we do have a burgeoning ecosystem

it its growth is driven by tvl incentives and by really our willingness you know on the ciscoin foundation to to you know to consult and you know communicate with these projects and and ensure that they have you know the degree of support that we can provide to to help them out to onboard and you know it's the some of the challenges that we face being a young uh and burgeoning ecosystem or is is sort of like the the chicken and egg problem you know where you know you'll talk to a bigger project and they'll say well what's the tvl on your platform you know how many users do you have and we're like well we're just we're we're kind of you know this this ecosystem is being kick-started right

now so but the great thing about our design and what we have to offer when we talk to projects um is that you know the idea of launching on any vm really becomes a strategic move right so even though we're just sort of like building our ecosystem and fostering it um kind of at its beginnings it's going very well and you know we're getting a lot of ears and a lot of attention from projects and you know a lot of people do see the strategic value and what we have to offer uh and you know they're they are interested in sort of coming together and um you know and building our ecosystem with us which is

you know you don't really have an ecosystem if you're building it all yourself right that doesn't exactly make the definition so yeah we got we got two dowels we got about three or four bridges that want to want to link into layer one and layer two um we got three of the dexes um and there's other staking d5 farming sort of things uh we're partnered with uh was that uh uh zach cole's project uh from white block which one was that again um it's on polygon right now but yeah it's it's like a defigating uh system or defraguating amm system uh they'll be

looking to launch on most likely there too most of our value is going to be on there too right layer one you do need um the indexing the amm uh the bridging to get in right and then you're gonna be like okay well let me move into layer two and uh let me try to plug in um tiller to to get the scalability and efficiency gain so we you know when we talk to projects it's more about yes we can launch you on there one today but it's not as cool as what we want to be doing and putting you on there too uh and to that regard we are talking to the madder guys and the stark starkware guys trying to get them to plug in to sis uh we will have avenues of doing our

own as well uh researching the zke evm stuff i'm not sure if you guys heard of that but really it's just like by next year you'll be able to formally prove the ethereum blockchain using a validity proof um you know as it is without having to go into any any language or anything like that actually taking the evm and running a transaction and creating a validity proof of that transaction using the existing evm spec which is huge because that opens up interoperability it opens up you know almost trustless decentralized free light client services you know think about think about it like a decentralizer trustless and fira right because infera is very trustful right

now um but think about making that trustless because you just get a validity proof that your blockchain is valid and you can trust it and then you can sync up to the blockchain within a couple seconds so having you know really really interesting like client avenues which is another reason why um e foundation added sharding and staking was because of like clients um but now with with zkevm you're gonna solve that you're gonna solve interoperability and you're gonna solve um doing validity proofs um to further scale the layer one where ethereum is gonna go is they're gonna end up just having um their blockchain just be a zika evm recursively proven at you know if you wanna prove that at any given time

your blockchain is valid you just get the evm proof and you can uh validate that within a few milliseconds you don't need to download the rest of the blocks you can download just the tip and know that it's valid that's what zk van will will unlock and that's where they're going to go with that once you know maybe in a couple years when they add that we'll be right there as well yet jag that that's really interesting kind of as you describe zk evm and how it opens up the trustless nature of some of the more uh inner core components of of the internet um you know web 3 has kind of taken on like this meme value uh at least

recently um where people are equating cryptocurrency to web 3 as like almost a marketing tactic but as you describe the the benefits that it uh it transcends into with zk evm and how that opens up trustless infuria um kind of coupling that with the evolution of ens we're starting to see web 3 take shape more so than just uh the transfer of of wealth across the internet as far as cryptocurrencies yeah the elephant in the room with web3 right now the big problem with it and this is coming from someone that worked on the polygon ecosystem and they're advising us on on um direction with

define web3 is the uh the spam and the denial service attacks on those rp3 rpc endpoints you're seeing this with bsc today with polygon with phantom a lot of these systems even though they're very well distributed they've maybe got a hundred endpoints very easy to attack right because you could just spam it and it doesn't know or care where the source is coming from if they start rate limiting you then they're going to start limiting a good user as well and it's going to affect the experience so how do you solve that well if you have an inferior type service you can definitely solve it we have to log in get an api key and then get rate limited if you use it too much but it becomes a trusted service right you're trusting in fear as

a company and they can they'll know your data they'll know you know your throughput they can also stop you from transacting however if you couple that with a validity proof you can actually you know trans transfer that into a trustless service so you know getting that response back you don't need to trust that inferior is telling telling a lie or not and if infera is not responding to you there will be a whole bunch of other services doing the same thing because it's it's so cheap and easy too so that would be the really interesting thing that to solve the denial service and the spam attacks with web3 which is plaguing most of the projects right now yeah that was hitting me today on chrono shane crypto.com chain couldn't get anything to load had to reset the rpc

still wouldn't work dexes wouldn't load balances transactions wouldn't go through it's just going chain list and he tried to get him going again and yeah it's interesting that that's uh i didn't realize that that it was easy to kind of cause that um you know it hasn't really happened too much to me before but definitely uh ironically today um yeah as we kind of wrap up here brad and jack thanks guys for coming on i would love to kind of ask you guys uh two quick things first is what is each of your bold predictions for 2022 in crypto i'll uh have jack go first i i think we're uh we're in an uber bull phase technically like in the on the

technological road map where um was it uh professor dan bonnet was saying every time you scale up ten percent you get five or two new or you know untold number of use cases that you never thought would have been possible and where our industry is largely driven by zero barrier of entry to create any use cases because every time you get a use case you get your money get new interest you get velocity flowing and therefore appreciating d5 uh tvls right uh having the scalability aspects solved to give us 50 to 100x increase of scale without actually uh affecting decentralization you know we're seeing actual economies of scale where the number of users start pouring in the actual cost start to go down

which is amazing because that never has been possible before that will usher in a whole slew of new use cases we never will be able to comprehend uh a year from now we'll we will look back and say it i never knew that would be possible um so that will that means to me that we are in a phase of uh of discovery of tech and use cases much like maybe bitcoin 2014-15 where we're discovering what it really is and uh the enterprise markets start to jump in and institutional start to jump in it's the great store value it's the bottom of extras pyramid it's the you know the gressim's law of money being applied uh that is going to transfer

into the real d5 the real cool use cases the smart cities and ai concepts start to come into play in the metaverse alternate realities start to come into play and they all start to touch each other and open up a whole slew of new use cases that may be uh gaming related or not that that may we may not have known would have been possible so that's what's exciting like i don't even care about what the charts are doing right now because i know that um it's still promising on the technical side and you're hearing it from someone that's in this stuff every day that um it's kind of irrelevant on what and what people are doing with the charts and buying and selling or whatever let's go brad what's your bold prediction of 2022

yeah so i mean i don't want to wax too dark because there's such a bright and amazing future ahead for us with with the the direction that tech is going now and that's going to have some very positive and and great things kind of ripple out into the market as well but but i do want to say that you know a lot of layer ones that you know have have had a monolithic approach my prediction is you know unless they come up with some way to you know some very some very important differentiation between them and ethereum 2.0 that really has value which i see you know they're kind of in a rock and hard place right now some of them um i i don't think that they're going to maintain uh the level of you know market

presence that uh that they have today that just my prediction uh and i don't i don't want to throw shade on them on on those projects i think they have value and i think that the you know the vast majority of the developers are good um i just i see i see you know in all likelihood of a lot of them you know becoming rollups unless they come up with um you know some new idea and recognize some some need uh that that you know maybe other people aren't picking up on i think the future is modular blockchains um and you know another prediction that i have um and i don't know that that will happen in 2022 maybe over the course of the next few years um you know it all

depends on just you know how enterprises handle this and how aggressive they choose to be but you know i do see i do see a future where regulated securities will actually be able to use decentralized infrastructure they'll be able to they'll be able to utilize the blockchain in a way that does not involve custodianship over other people's funds they'll be able to comply with regulations or enforce whatever business rules that they need to to make sure that they're doing business the way that they're supposed to i i think that's going to be an absolutely huge market um in the

future and it's just a matter of time until that happens because the technology the the the fundamental technology that's needed to provide that is is actually now here there have been attempts to accomplish that um over over the the past several years uh particularly i think like in 2018 there was a lot of that going on you know in more like the eastern side of the world where they were trying to um they were trying to like have like compliant blockchains or something but the paths that they chose to try to pursue that really weren't right it um it wasn't really the right and proper design um but there is a right and proper design for that blockchain

foundry um which uh happens to have uh you know a presence on the ciscoin foundation board they're a publicly traded company um you know created by the founders of the original founders of ciscoin um they have some solutions specifically uh for that problem that are really very elegant and tight are able to tie into to cisco for those sort of enterprises that need that kind of uh sort of permissioned layer i know it sounds kind of dirty to a crypto anarchist like myself but regulations exist they'll probably exist in the future and there are solutions for that now that are actually really really elegant when you sit down with someone and actually explain

how it works so yeah so i see i see securities being able to leverage um open public decentralized blockchains um in the future yeah i would touch on the advent of zero knowledge proofs is gonna be as great or greater than the blockchain itself and the connection between the blockchain and zernal's proofs creates a holy grail system so just just you know basically that the power of the tech uh like bradley was saying he doesn't think that unless they come up with world-changing tech that's gonna enable monolithic chains to scale uh xeron's proofs are big as big or bigger than the invention of blockchain itself because they don't need to be used with the

blockchain they can be completely separate but with the blockchain they become really really useful amazing guys amazing thank you so much for coming on talking about um everything that that is coming in 2022 d5 what's going for cis coin all sorts of roll-ups scaling really really forward-looking conversation and you know if you if you didn't come out of this excited to keep building next year then uh i don't know i don't know what you just listened to but it wasn't this podcast so thank you guys for coming on thank you yeah it's great to come on maybe we can do it again in the future sometime soon

yeah yeah that that'd be great um and uh brad to your regulation point i think we're starting to see a lot of acceptance kind of all across the world uh us and and abroad um and it's super exciting to see all of these applications jag as you mentioned kind of more more scalability just paves the way for more use cases um and it's going to be it's almost unpredictable uh what will happen but it is it is almost certainly positive so uh yeah looking forward to doing it again in the future and uh the bright future for cisco is kind of paving the way illuminating the way for you know a lot of these new applications thanks for coming on and uh yeah that would love to do it again

yeah thanks guys merry christmas happy new year and uh hopefully we can connect again once we have our layer twos up operational and we can connect again on a number of users and use cases and the apps that are jumping on board cheers guys thanks guys thanks again bye