Does Everybody Need to (and Should) Launch Their Own Rollup? by Hubert Kotliński

Transcript

we're now welcoming Hubert kotlinsky who will be talking about scaling solutions for ethereum so it needly connects to the previous conversation he is a business developer at L2 beat and um he will be talking about blockchains uh ethereum blockchain and scaling Solutions as I mentioned as well as the overall state of the market with a presentation should everybody launch their own rollup so if you could welcome him thank you very much thank you I just grab the quick really quickly so hello everybody I'm Hubert as he said uh and I would like to talk about sculling Solutions so basically uh does everybody should launch their own rollup

today so first one quick question uh did any of you use ethereum uh before this Kon like if if you do did you can raise your hand okay so how many of you used nl2 before thison and okay nice and which one may I ask for example you okay okay and you okay and you Al okay okay nice okay nice so basically if you used any of those networks you probably understand what is the problem here so uh in times when you have like a big congestion of users on ethereum so for example the new mem coin like pep is launching or aen layer CS are raised the

gas uh fees are going crazy so there is like I don't know you need to pay 100 or $150 per one transaction so uh if you're like a normal user that just starting if you're not a whale or something uh in our industry uh this is basically making you uh like basically you can't use ethereum net right so uh ethereum can now process around 14 transactions per second uh so if you compare it to stuff like Mastercard or VISA or anything that can process like thousand and thousands of transactions every second basically it looks like a pet project of somebody right so so it would be perfect if you could like somehow execute more transactions so more users can use it

actually uh but the problem is uh if we will uh do it oh excuse me only going okay uh so so basically like we have this problem that you know the block space is you know uh limited right we need to choose uh which transaction we'll get to the Block it's for me it's really similar to the stuff that happened like 20 years ago so why there is only like 151 original Pokemons because like you know the cartridges were limited you couldn't put more of them they were more designs more ideas to put it into the game uh but you just couldn't uh so like right now I think that ethereum is on the level of the Game Boy let's say and we still need to

move like to the stuff like you know Nintendo Wii or anything like that uh so what our choices how we can like allow more users to uh to come to ethereum and use it so basically we can scale it on chain so we can for example upgrade the code of ethereum somehow So like um introduce like some complex uh stuff like for example sharding that I will not be getting into because like it's like a topic for another presentation uh or for example we can use some alternative l1s like polygon or something and then transfer the pH funds with those or uh we can do it offchain so we can maybe have another solution that is somehow connected to the ethereum itself so the problem with

onchain Solutions is that ER they are extremely complicated and like uh developing them will take as at least another 5 10 15 even more years so and we have the right now right we want to use ethereum right now uh so they came up the researchers came up with the idea of offchain scaling so uh so-called Layer Two so another layer builded on top of ethereum that you can use uh that is like basically cheaper and more faster and allows you to uh then maybe somehow connect those transactions on ethereum to get its to still get its security because if you would for example make like for example block

space on eum bigger then some of the nodes that are running around the world are for example I know maybe Raspberry Pi or like some lowle Hardware right so they would need to be shut down right now so if there would be less nodes uh less computers that are making the ethereum network the security goes down right because it's easier to like for example do like 66% attack right so you can just set up your your own notes and take control over etherum uh yeah so so for now like vitalic butterin and other researchers agreed that the like the next step for the ethereum revolution uh for like at least a midterm uh is developing elus we have couple of versions of elus right now that mostly

depends if they actually send their data to ethereum or not or they are storing it somewhere else and if you can actually prove that the data there is like uh true so we have like two solutions right that fraud proofs and validity proofs that I will be talking uh more about in a second but first first question why we even needs rollups right why rollups and not like some other like alt one right like why not like polygon POS or anything basically the problem is that uh if you are building your own L1 you need to set up everything from scratch you need to start like ethereum did so you need to uh you know set up notes get people to know what you're uh what you are doing to like learn like for example ethereum has solidity so you maybe want to have

your own programming language or anything like that so it's becoming kind of you know hard to do it and right now you know ethereum is dominating in the dev Market let's say the there are like a lot of devs there and also the second problem you need to be build this Economic Security and for example like Bitcoin right now have around 10.5 billion of Economic Security it's like you know compared to the hashes that uh the hash power that the uh network has because you know this is still proof of work implementation uh and ethereum has 105 billion of Economic Security so that's because to validate any transaction on ethereum we basically need to set up a note have at least 32

if right uh and then you can only like you know start securing those transaction start uh start uh earning some additional if as well uh so if somebody would like to for example take uh advantage of that like take control over ethereum they need at least 66 billion of if theoretically right in USD so uh it's actually pretty safe to use right so ideally you would have you would want to have your own solution that is using uh that is like for example faster cheaper as I said and then store the data on on on ethereum and in case if you're like your chain that is like less secure right maybe you have only one server that everything is running on this server gets destroyed

you still have the data on ethereum so you can basically uh do a roll back and you can set up a network again with like everybody's B bance will be the same right nothing will change and the phones are still safe so right now we have like most of the researches I know at least this uh agrees that rollups are the way to go they are like like a bit Supreme L2 Solutions uh for now because there are the most secure ones uh so we have two implementations of those we have ZK rollups and optimistic rollups so ZK rollups you could say there are like pessimistic rollups uh because uh let's say you have you have this chain right you are executing some transactions you are building a block then this block needs to be sent to ethereum and uh then

uh like like everybody can send something to etherum light it's permissionless so uh so like the problem is like you can send a block that one transaction is changed for example and I don't know you send me 100 if and I just deleted the transaction or like like maybe it makes more sense in the opposite direction I added the transaction that you sent me 100 if and now you you have nothing and I have all of your money uh so then you need to somehow uh check if this state that we are sending to eum is uh is true so in terms of ZK rollups we are basically validating every single block so we are checking if the data from the Block is actually like you know uh correct uh but that's you know gets expensive because

you need to run those uh those operations on ethereum itself so you still need to pay the gas for it and then you have optimistic rups so we are putting the you're optimistic that everything is fine basically we are putting those blocks with transactions On ethereum and nobody everybody assumes okay we are all super honest nobody light uh and we we only disputing if somebody is like thinking okay this this block feels kind of sketchy let's check if everything is fine there and only then you run those those uh uh operations to check if it's like true right so uh like as as you can probably imagine it's a lot more uh it's like less secure

um yeah so what could be the purpose of the rollup right now um we have like let's say two two ways of thinking we have a general purpose rollups so like the biggest one that you guys used so arbit room optimism base as a fork of optims as well blast Stark net whatever and they support arbitrary computations allowing for the development of arbitrary applications and functionalities so basically like build anything and there are like application specific rollups so let's say you are like the biggest decks on ethereum or something and you are basically your users are pay paying a lot of fees to operate on you so uh maybe you can like move to ethereum you move to L2 you are making your own own chain the your users

will come with you because you know they like your uh they like your brand I don't know they like your implementation or anything they feel safe when they are using your deck uh they will move with you uh there you are basically making all the money because they you know you own the networks the not work so the fees are go still going to you for every single transaction uh and then at the end of the day you are just sending the data of those transactions on ethereum and they are still theoretically uh on the same level of security as when you were operating on ethereum itself uh so like right now application specific rollups this is from our website so you have like launchpads for example you have like some kind of nfts marketplaces you have like uh I don't know gaming right so if

you have a like a game that everybody is playing you don't want to do it on ethereum because they they will pay like $200 for a gas or something so you you you just have your own uh you're just launching your own solution uh so basically let's say let's say right now we have this roll up that we have the other chain somewhere uh so how to send your FS from ethereum to such solution so you there you can move it like in couple of different ways the two most important ones are native Bridges and third party Bridges so you can use a native Bridge uh that is basically like you know the smart contract builded by the the rollup team and it's like set on ethereum you are sending some let's say if to it then it's locked there in the

smart contract or or maybe Burns is sent to like some random random address uh and it's let's say right now it's staying there right and at the same time you are meeting the same amount of if on this on this like L2 uh and of course they are using the same cryptography so your private key on ethereum is like your public address on ethereum is the same uh as on this L2 if you are using this the same private key uh and then you can operate on this on this L2 send some transactions to your friend uh let's say they cost like I don't know 0.1 dollar or something or even less now uh and then let's you decided okay I I had some fun I sent some transactions now I want to I

want to leave because you know the L2 is uh less secure than ethereum itself I want to go back we just go to the native Bridge you are putting some you can so withdraw to ethereum right and after some time the you you are losing the if on the on the Chain itself on the L2 chain and your if on L1 is uh fre and you can use it again H so this this is like the most secure approach uh for most of the rollups uh because your your if is always there in the smart contract uh and if the the state is like the the fact that you send some if to the chain is on etherum itself because you know the original smart contract is on L1 uh so if the L2 will like somehow

get deleted from air right let's say you had only one one server as I said in some country and the countries lost the access to Internet on I so you lost the access to the server as well um you can still withdraw it theoretically with the correct implementation of this smart contract just then when the the the chain will be up again uh they will just know know that you withdraw it during this time and you will not longer have this if on the Chain right on the on the L2 chain and then you can use third party Bridges they are usually faster and cheaper uh but the problem is uh you have for example don't have this you are sending the if from one L2 to like the other one right so if both of them are dead uh and

you had like 100 if on them you have no proof that you actually sent anything on ethereum itself because you know ethereum never went down since the match uh and you are basically like screwed a bit right so so so only like for example the some other users send their if like to those l2s via those via the native Bridges and they can withdraw you can the problem with that is that uh some some new l2s like blast I don't know if any of you heard about it for example uh he thought okay users are sending the if to our to to this smart contract we have this L2 they are doing some easy stuff some random stuff on our chain right but there is just so much if on this smart contract like oh my God they send us

like 1 million if or something like and just sitting in in there and you know let's let's maybe do something with it right so for example let's say we take 70% of it we are putting in in some like I don't know on the deck or anything we put it on Leverage and we like let's say oh if will go up right and they are putting it like 1 million if on The Leverage and they won right so they the if went up and now they have additional $1 million and they okay half of half of this money we'll take for ourselves and half of it we'll give to our users so you have like this so-called native field then so everybody that's deposited to their their smart contract is getting some additional if in like said periods of time for example right the problem is

70% of this if is somewhere else not on the smart contract itself so let's say I don't know somebody heard that there is a B on blast or something so and everybody there's a start of uh Bank right everybody wants to go from blast back to ethereum because ethereum is safer nobody will there is a no bags on ethereum right so right now uh so um yeah the problem is that there is only 30% of this if on this smart contract so only 30% of people can actually withdraw it right because the the other part is somewhere else nobody knows where uh so if you are like you know you if you hear about it one day or two days after you are also screwed you can't withdraw anything you just have

some like token on the L2 that everybody knows is broken in some way so nobody wants to use it anyway uh so let's say your if on this L2 is not exactly the same as the if on on L1 itself right yeah so there are like many ways of thinking for me I would prefer like a normal like you know like for example arbitrum Beach or anything that that I know that my PHS will be secure on but maybe you are a g or you want make some more money uh and still like have some more risk associated with it that's also cool uh yeah okay so as I said uh there are this concept of l2s right and the problem is ethereum

foundation said okay make l2s right the rollups are the way to go for the future of ethereum but they didn't make like for example one only one or or two or three official rollups for ethereum and uh said okay use those chains like they are like official ones they just thought okay this is open Market build whatever you want uh so then like you know arbit room happened Optimus happened uh Stark net Linea anything you would think about and if you are an an end user when you are hearing those words arbit optimis like I don't know like blast anything like that you don't really understand what is going on like which this every single L2 is different right different teams are building it there are different implementation there

use different code different libraries anything you can think of uh and the problem is you know what is happening anymore so you can uh so this is when l2b is coming basically ethereum Foundation wanted to have some kind of like you know a website that uh that every single user could check uh which rollup is for example more um secure and which one is more decentralized so we are researching those Solutions we are checking them uh in every single aspect we are just checking their smart contracts and then we present it in like easy to understand way I will we have like for me at least we have two most important uh things uh right here our

decentralization uh dashboard called stages and uh risk rosset Pi uh so I will talk about it maybe in the in the minute but first maybe let's visit L2 bit or I just hope uh I can do it on this computer right so I would just would like to show it like directly if it's possible yeah yeah yeah in the mean time if you are interested you can scan the QR code and have fun on our website yourself but if it's a problem it's okay

lb.com okay so here's our website I will just put it into the dark mode I'm in dark mode Maxi uh so basically you have this website that lists every single L L2 out there you see the total value locked on that like you know for the whole like let's say market like for every single L2 if you will go down you have every single L2 other as well so we have stuff like arbitrum optimism base blast and so on and so on uh you can check their risks for for example let's say you want

to send send FS there so what will happen if there is some kind of malicious upgrade right so you know that they want to change something in the code and then you you will not be able for example to withdraw your if that right so we have like a stuff called exit window so uh when they will like try to announ They will announce such an upgrade you have exactly two days to withdraw your funds other than because like later you are screwed right right now again and there are like many other like you know risk uh parts that I don't have unfortunate time to talk about right now but I'm like I can after this presentation also this stages thing I talk about this like the how much the L2 is decentralized compared to ethereum for example because like most of them

are still in like these early stages so for example the team that uh builded certain L2 so for example offchain laps or anything like that still like for example is running their own noes and only they can do it or like this is like uh not true of course uh I mean I'm not sure if that's true because I didn't check but let's say this is like this theoretical uh scenario uh and if they will shut down the servers the whole the nodes the whole network goes down right uh yeah so like go nuts check it out uh we have also we we have have a lots of other stuff on our website as well so da when those data of those transaction is

going is it going to Celestia is it going to ethereum directly we have stuff like liveness finality uh to check if those uh chains are actually posting stuff uh on the chains they should be posting activity of course so if there is like more transactions on a certain chain like for example right now I see Bas has a lot of them uh probably another uh another like mem coin or something not sure uh and then and then uh costs this is the new one so basically I don't know if you heard about blops uh and AIP 4844 so basically we are now we are tracking how much those rollups are paying to set up on on ethereum or as I said they were doing that this is like the main advantage of

a rollup and now it was like completely uh this was like super super crazy expensive for them so arbitrum for example paid 34 millions of in if to to set up on on ethereum so as you can see it was pretty significant and right now after iip for 844 they can use blobs blobs have a completely separate market for gas fees uh they are a lot cheaper I also would like to talk about blobs after the presentation because my time is running out uh and and and since the since they changed so like since the changed so like let's say 30 days they paid only 226k uh so as you can see like the shift from paying you know millions of dollars

to like hundreds of dollars is pretty significant and like all the money that they are saving now they can use for example for stuff like grants stuff like I don't know uh paying for for like conferences or anything via the the the governance so as you can see it was a PR pretty significant stuff so maybe let's quickly go back to the presentation right now and I will just finish talking about this as well yeah okay yeah so uh so like yeah like we talked about L2 beit so I also like

would like to talk about the current state of the space really quickly so you have the you have the teams that were building uh l2s for a long time like like arbitrum or op optimism so the codes are open source you can actually use it yourself if you want as well as for example polygon cdk basically those codes are backed by like companies with millions of funding so you know they will probably make them even better uh in the future uh in my view this is like basically like all of the nodejs libraries like or anything like in the standard standard uh developer uh field uh you know like you can just take it basically right now use it for yourself uh and then when optimis will add for

example fraud proofs or any other implementation you can just basically uh you know uh upgrade your rollup as well then you have rollup as a service so basically like some kind of like cloud services for rollups so basically you can just go to their website set up everything okay I want to like for example conduit old layer or Caldera websites I want to use op stack and I want to set up on ethereum and I want to uh the gas to be paid in like my own token because let's say you already have like some kind of project that I don't know you launch your own your own token before and the gas on this network will be the token itself so your users who bought this token in the past can actually you know uh they don't need to

change it for ethereum for examp for ether for example uh and then you have this new Hot Topic that is like let's say like six months old or something so da after Celestia launched so let's say like as I said before before 4844 uh posting this data on eum was crazy expensive so uh Celestia okay so maybe let's make a chain that you can like post that is strictly for like containing the data of your transactions from L2 and let's make a special type of bridge between Celestia and ethereum and then if like there is like some kind of app on ethereum that wants to know if the like the data that you are like doing some transactions on L2 actually you know happened uh they can just ask

Celestia and this like basically Crazy Cheap to check it right then like a lot of course avail uh is coming aen da uh from aen layer and like many other implementations as well so this is like basically a Google Drive for your company you can if you are a rollup you can just sense your data there but you are not running the infrastructure yourself so this is like this implementation has more risks right uh it's more risky than like setting up on ethereum directly uh yeah and the blops uh 4844 uh you can check on our da tab which L2 is actually using it if they are using it they are probably a lot cheaper than their competitors right now

um the the market for blobs is different it's like the new type transaction fre uh type three on on ethereum uh but as I said I don't really have time I think to talk about those so catch me after the presentation uh yeah the the the costs uh so how much do it cost to maintain your the this might seem like less important topic right but there were some cases that somebody launched an L2 via op stack let's say and back then you had to uh send the data to ethereum even if nobody made any transactions on your chain you were just posting like you know nothing basically and you still had to pay the

gas on eum itself so there were some chains with no users uh and uh they still had to post it and they basically like were running the like the bleeding money let's say so like it's really important if you're making a roll up to just think about anything that can happen maybe there will be a month or two months or three months that nobody will do anything on your chain because I don't know they will move to somewhere else right so so you need to have that in mind as well so what are the cost of course you can choose to uh to send the transaction as call data so like normally like then they will take like this like same like you would do an ethereum right like in very similar way then blobs uh then like you know you

need to uh pay something for for computing and there's like standard overhead uh price uh that you need to pay for as well uh yeah and the last thing I would like to show you uh is deploying how easy it is to actually deploy a roll app uh right now um if you for example have an app right on ethereum that is using it if you if you could uh open the uh the conduit it website as well there are lot of roll up as a Services I'm not saying that H you know one is better than another but I'm not sure if I will be able to show it though because I guess I would have to make an account

uh I hopefully not but let's see okay I would need to sign up with Google I don't want to do that it's is not my computer but basically you would have to go there uh this like as I said this cloud service in some sort uh they are running the you want to make an a rollup they run the infrastructure for you you are just clicking okay I want to oh I have a demo here I want to have uh op stack that is setting up set link up on Celestia uh and uh and I want to use my own token as a g token and you are just paying like I don't know $3,000

that I guess depends on the on the roll service provider and the rollup is here you are just need to basically launch a great marketing campaign promise some points to your users and they will be keep throwing if on you no no no joking of course but but you could theoretically do it right so yeah coming back to my presentation I think that's the the end of it uh this as acrobat read right okay Power Point okay okay so so basically I hope I I at least showcased the whole L2 space uh for you and you now you understand where where is actually going to uh and what

is happening I skipped like the technical part because it's super complicated but I would love to talk about it with you as well uh yeah so let's stay in touched I I I hope I hope you liked it and and ask any questions you would like right now thank you yeah yeah I'm staying I'm staying for for like Paul hakon there because I'm also a judge so so any more like questions or not really if not like as I said I'm here

feel free to just come to me and and ask those and yeah see you around thank you