The Future of Cross-Rollup Interoperability: Open Liquidity Network (OLN) powered by Omni Network

Transcript

welcome back to the rollup High Roller Community as always nothing on the rollup is to be ConEd as Financial advice we are just an Educators in the defi space toss us a quick like give us a share a repost send it to a friend who may want to watch this and finally give us a sub or a follow it means the world to help support credibly neutral educational content in def5 we're here to educate Empower and enrich you and let's jump in what's going on guys welcome back to the rollup our lovely friends and Community um here today to talk about rollup interoperability very interesting set of Primitives that we've seen so far um and excited to dive into more and how we can make this security system better so we

have Austin I think I met Austin Austin we met in uh in Paris right we're just outside that one like uh or a restaurant or something we met in the streets I was trying to I was trying to get to some event we weren't even at event it was literally just the streets in between events and somehow we ended up chatting somehow about rollups uh but yeah good the good to see you here again yeah I think it was the gearbox thing they were like booked up or something I don't even remember but yeah was on a lot has changed right A lot has changed now you guys are building the open liquidity Network and trying to remove these walled Gardens that these rollup ecosystems are kind of being built as so

it's it's a little bit scary what's going on actually I mean honestly that's not even what it's about from our perspective uh I care way more like ultimately with all these things being deployed uh they're going to have to talk to each other somehow and so what I care about much more is making sure they talk to each other in a way that uh doesn't create some like proprietary blanket over all of this like modular ecosystem that's developing like these things need to be Open Standards that's the only like scalable way in the long term that they can talk to each other so that's the main thing uh that I think about um I think it's you know a bit rational for these smart contract platforms to build their own ecosystem but specifically the open liquidity network is mostly uh focused on just making sure that as we establish

standards for these uh platforms to talk to each other that they can do that in a way that doesn't bring in unnecessary risk and gives them sovereignty over really what they're building yeah so open liquidity Network we have shared sequencing we have Bridges where does this like kind of fit in in this in this current puzzle yeah so it's actually at really like the EIP level so Mo the open liquidity Network at large is a suite of open and neutral standards that different uh participants in the ecosystem can utilize to collaborate better um and so this really exists at the standards level this is not uh it's not even Omni this is something that we just really

care about promoting in space I'm happy to talk about what Omni is and how it works uh but the open liquidity Network really is a suite of open and neutral standards to facilitate communication across modular landscape yeah so you guys are V go ahead Andy I was just gonna say so you guys are bullish on on rollups then yeah 100% as the future yeah I mean I I don't think there is a future without rollups um if we look at where we're at today in terms of the scalability of these systems even with the rollups that are in production today we're still miles away from where we need to hit uh in order for these things actually be like useful uh by people

across the world um and so you know like I first got involved in crypto in 2017 there's been different attempts at scaling Solutions over time so like my first company actually that I built 2018 to 2020 was again an interoperability Network that link together l2s um at the time though l2s were things like lightning Network they were actually State Channel implementations as opposed to rollups rollups uh have the Fantastic property where we get the scalability of a layer of of these core L1 networks but we don't compromise on programmability which state Channel implementations like the lightning Network did so uh we could have really performant payments with those so like my first company we processed 10 billion payments before I sold it um but it's just payments right

and so then you can't do really exciting things like Defi and so rollups give us the full ability to still Implement uh things like defi uh but still make them cheaper uh than the basl one that works so I don't really think there is a future of crypto without abstraction that we layer on top of these L1 networks that make it much cheaper uh much faster confirmation time for end users there's a lot of infrastructure level work that needs to be done to make these things actually useful by the masses how do some of the standards that you guys are building for rollup interoperability compare or or are similar or different to like an IBC or some like the canonical Bridges what does that architecture look like and

then why why why Omni infrastructure cool so yeah um these things actually work in parallel right so the open liquidity NW network is not a bridge uh in many ways it kind of like deprecates the idea of a bridge um so Bridges historically we had to deal with things like wrapped tokens right you know it's like all right some new ecosystem spins up and they want to get uh liquidity into their Network so they find some interoperability Network or bridge to Port assets into there um these tokens then usually have some like prefix on them that like is kind of similar to the name of the like bridge that is bringing them there um we basically think that this is a bad

design um and it's not only that we think that it's just it's been proven you know we've lost over a billion dollars a lot of which has just gone to North Korea and brought a ton of uh like bad attention into the space so it's really hard you know like credit words it's do like it's really hard to build uh interoperability networks in a secure way um but fundamentally what you're building with an interoperability Network or a bridge um is a distributed system that monitors other distributed systems and comes to consensus around what the like aggregate of those distributed systems look like so it's like multiple it's two layers of having to like discern truth from a network of computers that are just distributed throughout the world that's inherently really hard to do it's really hard to do

just in one layer but let alone an like an abstracted layer that is monitoring multiple and so fundamentally it's just like a risk part of the stack than a smart contract platform uh for example so what we have done historically is we have allowed the risk that comes from working with an interoperability Network to kind of be baked in to different layers of the stack and this really happens uh at a few different layers so there's one asset issuers if you have tokens that are Downstream of some specific interoperability network if that Network gets compromised that asset is going to get destroyed because people are going to Mint an infinite amount of it and just like dump it on the market Market there so that is effectively asset issuers giving up their sovereignty which is an unnecessary risk

they don't need to do that so one of the standards that we're promoting in the open liquidity Network it's originally built by the connect team it's called xc20 and what it does is it allows teams to uh whitelist interoperability networks to move their tokens around but ultimately the asset issuers themselves are the ones who remain in control in these different platforms they don't have some like prefix thing on there so the asset does not become a derivative asset of the interop network so an example of like we need to make clean abstractions so that we can scale and like actually engage in the modular ecosystem but do in a way that we don't take on unnecessary risk so that's at the asset issuer level this also happens you know you can do this at this whole like blockchain or like smart contract platform level we saw this with moon

beam before there was a canonical bridge that got compromised and it destroyed the entire ecosystem and so like they inherited that risk of the interoperability Network into the entire ecosystem and you know this also applies to developers if you're you're building on top of a specific interoperability protocol if something happens with that interoperability protocol all of your users funds are at risk as well so what we really care about is cleaning creating clean abstractions that like Place sovereignty where they should be in the stack that minimize risk at large as we like really move into the modular space because there's a ton of incentive to move into the modular ecosystem and embrace this but there's also risks so we care a lot about minimizing those risks yeah we Harmony is another one

that was kind of like it inherited that bridge risk and then all the stable coins got wiped out from the bridge hack like we we talk a lot on this channel about like especially with regards to modularity about like the unbundling process like all of the scalabilities in in it it is elevated because of like kind of the the interchangeable parts and the specialization of modularity but then we lose like a lot of the seamlessness and the the interconnectivity because now everything is UN bu it's like it could be fragmented if it's not brought back together these interoperability protocols kind of bundle everything back together so it's a it's a cohesive and seamless process again so yeah 100% in in like the

modular interoperability like space is the goal to like is it is it again like a hub and spoke model where it's like now everything is plugged into this one interoperability layer or are there like specialized connections from rollup to rollup module to module that are specific to those modules or those rollups not all of it connecting back to the same interoperability layer but like specialized modules to connect between these modules yep so that's a great question I think that actually illustrates the whole concept of this open liquidity Network very well so you've probably heard some interoperability uh networks you know pitching themselves as the TCP

IP of crypto or the h HTTP of crypto um fundamentally that does not make sense because at the end of the day every single one of these networks has a business model it takes money to operate them so they need to ACR fees somewhere the reason we got TCP IP and HTTP at the internet level was because they had no bias they were just open neutral standards that anybody could use um so it to me it's a little weird that especially with how many parallels to the evolution of the internet that are made in crypto that we' have seen so many interoperability protocols really try to take this proprietary strategy where they try to be the TCP you know you were asking about like Hub and spoke like okay does this work if everybody plugs into it um no like it is just an

open neutral standard you can work with multiple interoperability networks you can just work with one if you want you can actually use multiple um like fundamentally uh interoperability networks are more akin to like telom infrastructure and so uh they are not the open neutral standards that will facilitate all this communication they're the ones that are behind the scenes working with these Open Standards to pick up a state update from one domain and put it on another at the end of the day that is the job of an interoperability Network just like you know the like routers that exist throughout the world and so with Omni are we trying to create the TCP IP of crypto no we're trying to create the starlink where like we are just a hyper performance system behind the scenes

that gives people extremely high security uh extremely fast responsiveness anytime they're making transaction and at the lowest cost that is what we're trying to build and at the same time our really our go to market strategy here is something that is just deeply aligned with the ethereum ecosystem at large we're just Open Standards like there is no proprietary lock in if you're using Omni uh like the open liquidity network is use Open Standards and then look at these different interoperability networks and compare them upon those three properties like which is the most secure which is the fastest and going to give the users uh of your application the best user experience and what are the costs there so that's really like how we look at the space at large yeah and just to play Devil's Advocate on your point with regards to

your alignment as well as um General perspective um how H how do you see Omni kind of um generating revenue and sustainability for the long term what's kind of your vision for the broader um kind of goals there for your company yeah so uh it's actually pretty straightforward it costs money to operate the Omni network uh and it'll take fees uh when transa when it is used as the relayer uh of State updates across these different domains so very like straightforward in that sense and how do we make that the most sustainable in the long term from my perspective we create the best product we make it extremely secure and extremely performant in the time Dimension and in

the sense of just relaying these transactions extremely quickly to pull in more activity into the network that's really the simple answer there yeah it's always an interesting one like balancing between um building the best products and uh nature of like a public good almost versus um you know trying to get a Competitive Edge in the market on the economic side it's often I something that I feel for crypto builders on because it's like sometimes your quote unquote competitors which on this channel we almost don't even think about anybody in crypto as competitors but you know oftentimes Builders do sometimes your competitors are are you know taking the shortcuts in terms of uh decentralization that they kind of opt

out of that or security they kind of opt out and you know they can be quicker to Market and things but with more risks and then we kind of see the same iterations that we've seen so I think taking this balanced more like neutral standard uh quality Tech approach um is the way forward you know yeah and honestly we've seen that already so you know it's January 30th right now we only announced the open liquidity Network in the like first week of January and already there are like multiple tier one projects that are on boarding into this you know we have injective we have flow we're going to announce more later this week and there's like 15 in the backlog um and so when you think about any of these other proprietary token standards that uh have been launch like none of them have grown that quickly and

fundamentally I think it comes down to the fact that like what we are pitching is a better product experience it's like okay uh you maintain sovereignty as you are expanding and embracing the modular ecosystem the standard is a way that you can do that and not give up control over your asset um and so really just like I'm like very deeply in the belief that when you act eth alignment is not a goto Market strategy it's more of like a product design philosophy and if you design your product in a way that like uh actually resonates with the principles of crypto that'll hit when you're trying to sell it and so that's worked really well for us as where we've been onboarding uh different assets into this network yeah what what are the options now for someone who's looking to like

interoperate across applications and rollups like is it is it a choice between using this and like a bridge aggregator or or like one of these one of these existing Bridges is that kind of like the tradeoff that projects are considering yeah so where we'll get with all this is just a different level of abstraction it it's kind of crazy where we're at right now in the crypto space where it's almost as if people are trying to use the interet internet and when they're on one website they have to go pick up their packets and then take a 15minute walk and go put them on another website that is going to be entirely abstracted away from the end user experience here it'll probably be the like default user experience by the end of 2024 and so the whole point here is abstract that no user should think about

bridges like really that's like an infrastructure level decision do you think about like what you know VM the website that you are on is being hosted in the cloud no you don't cuz like it's abstracted like the website just works uh it'll get to that point in crypto but we're in this just kind of like almost like laughably bad state from a ux perspective where people have to personally pick up the packets from one website and Ferry it over to another we'll get to a point where you'll have rollups and uh you'll switch from one world to another and the ux will look comparable to just switching a we like switching from one website to another um because we are going to get like uh an infrastructure level there where this will just happen on the order of seconds um so it's all about abstracting past

kind of these paradigms where we're at today it's not about competing with Bridges like this will deprecate Bridges at large there is no need for Bridges when you are using open and neutral standards um what you need behind the scenes is interoperability networks that are picking up these State updates and putting them in other places in a secure and fast way so that's kind of what the competition will shift to more got it and I got a question it's pretty it's a pretty theoretical question but it's something I've seen on on crypto Twitter as late like the interoperable all right and we we've got a podcast coming out with espresso today so if you're watching this go check that so like what when you you start talking about interoperability a lot of it is like all right you're you're gonna take

like the validator network of this uh Ledger or or network and then you're going to combine it with another one and now you have basically like this network of networks right and you have like this this network that's now comprised of two uh two distributed ledgers essentially right combined into one now you can you can extend this to like n networks right so like it's not just interoperability between two networks it's an inter it's interoperability combin all the networks into one Global M pool or one Global like settlement Network or right so is that like the ultimate goal with liquidity like is it are we going to get to this like one universal like like

mempool of intense and like it all the activity will happen in there is that like where we're going or is there like is is it going to be more modular does that create centralization risk like how do you reconcile one like the combination of multiple networks into a single a single Network yeah so From omni's perspective so I'll walk you through how Omni works and I think that will give my perspective on how think this will play out so we started designing Omni about it year and a half ago two years um and really this actually came from our own experience so previously we built a protocol called Rift um went really well we onboard 50 mil in tvl in the first

like two days that it was live so we started to think about how do we scale this across different platforms and we've been in the eth ecosystem for a long time and so we knew that the future of ethereum largely was going to be built on blups even though this wasn't really the case at that time when we started looking at what the best way to design this was uh we knew we needed it to be extremely secure and extremely fast we looked at a number of different solutions you know we looked at ZK for this uh ultimately what we came down to uh for this is uh a network that is effectively a subset of the ethereum network which uses ethereum's cryptoeconomic security budget to secure these State updates across domains in a way specifically that does not require

rollups to uh do something like post the State updates to Omni so Omni is kind of this network that exists around the existing ethereum ecosystem drives its security from ethereum using reaking and monitors the State updates from these different rups and so uh my perspective here is that uh we are likely going to see we we are going to likely see many different M Pools on paper um there are ultimately going to be different distributed systems that accept a block into them and those are there's that's going to be a large I don't want to say mess but there are going to be many of them um there's likely going to be centralization at the Builder level low

uh this is one thing that has me concerned about the ethereum ecosystem at large um you know I think the most promising work on this right now is inclusion lless um but it's not this actually doesn't even only apply to the ethereum ecosystem they're natural centralization effects to Meb and what we're seeing today is that like four to five uh companies are producing basically all the blocks uh on ethereum large and so there will be many different blocks that are being updated across all these different independent networks I do imagine uh that there will be large centralization though that happens at the Builder level this is something that I care like very deeply about because if we don't do this well we will lose censorship resistance and if we do that uh there we lose one of the fundamental properties of why we've

been building everything uh throughout this time so um at large kind of like Omni exists uh it's not going to no network will become This Global me pool there's going to be like maybe even literally millions of me pools that are like waiting for blocks there will likely be some coordination layer though that is feeding those blocks uh to these different networks though yeah it's the uh what the dream you open up your computer jump on with whatever wallet that you have and you just go on apps and you don't even think about where your where your coins are what what where just it's just it's just there you know you could be on one of a thousand networks and you click the button to deposit on that dab and you

don't even have to think about the the instant bridge to deposit to to stake to this to that to send to all of it right like it's just there I mean kind of dreamy at this point it's hard to actually see I mean it's funny to hear you say that because to me I see like a very pragmatic path as to how we get here like I'm CEO of this company but like I'm an engineer uh I spend a lot of my time thing about protocol design uh we're going to have systems like this by the end of the year where it will be able to be seamless like you'll hop from a Dap on one rollup and you'll change websites and go to adap on another rup and you won't even have to think about like what where the state is living where your assets are and stuff that

will be abstracted away because they'll be so fast that uh you won't need to think about it as an end like even if you're assets run one roll up and adapts on another and you want to deposit there it's just the the level of of speed in the interrup from that rollup to that rollup and then into the deposit so quick basically like you can it can the the DAP can show that you have funds on any chain basically because as long as it's a rollup that's compatible with ever their network is the level of speed from what when you click deposit or whatever bridge and go is like so fast that it just feels like it's all in one and so the really cool thing here is

it's not even about whether the rollup is compati ible with the other rollup that wherever your assets are in it's really as long as they're using Open Standards um because then you know like kind of the web two equivalent of what you're saying is like if everybody is running like Huawei telom infrastructure these websites will work but you know the TCP IP level is abstracted out from the actual Telecom providers so it doesn't matter you can like route across these different networks so maybe uh you know where your assets are at Hop from one rollup across one interoperability network uh then bounce to the rollup that like this application is on through another interoperability Network and you can do things like that using xcc2 um so yeah super exciting uh we'll get there

uh and we just clearly need to get there to provide user experiences that are not this like crazy Bridge wait half an hour for your like funds maybe think they got like deleted somehow in the meantime then they appear and then you go do whatever you're trying to do um that that'll all be abstracted away um and I'm happy to get into you you know conversations around finality and like how we'll actually like get to these like seconds level uh confirmation on these but at large that is what the user experience will be and that'll happen uh soon it'll happen very soon here yeah that's the thing with ZK right is like the the key thing that we're trying to solve with ZK is kind of that time to like proving time basically and I think that unlocks a whole another

realm as well um right because actually yeah so R take get Omni uh effectively is like you don't need that uh what we're seeing I talk with like a lot of teams that have been working on ZK Solutions right now we've made a ton of uh fantastic progress uh as an industry on this but what's holding us back right now is the cost to generate these proofs and the time to generate these proofs those are still lagging substantially uh like a very far way away from being able to provide uh a user experience on the level that we're talking about so you know we built the Omni Network like fundamentally with this concept of reating it's like he if we can get an extremely large cryptoeconomic security budget um that allows us to do things in

a very secure way um and the really nice thing about cryptoeconomic Solutions is they're fast you don't have to wait for some super computer to generate a proof you still have extremely high security uh guarantees as you're doing it and so um eventually you know uh ZK will improve to a point that these proofs will be generated faster um but you know when we're talking on the timeline of like this year providing these us experiences to people it's my belief that'll happen from cryptoeconomic based Solutions yeah I lay avss are pretty freaking cool this is a world where uh where um new app chains don't even have to launch their own token for security they could just use AVS basically they

could just use eth Economic Security instead of having to launch their own coin be really kind of a crazy uh concept where these apps no longer necessarily need tokens as as long as they can use eth restake security yeah you can get like extreme scalability with that as well so that's one reason that we started working with IG layer is that um when we're talking about this security budget um there are historical interop networks that have tried to achieve what we're doing just by like launching a token and necessarily you have a more volatile uh and a lower security budget at large just because it's Capp B based upon the market cap of this token that you created

when you work with uh em layer what you can do is you can tap into ethereum's existing security budget and so this gives uh scalability literally like two orders magnitude greater than uh like previous generation networks you know what uh settlement Network the only one that has a do you know which one is the only one other than ethereum that has a or the only one that has a higher cost of corruption than ethereum interesting I'm curious Bitcoin interesting um yeah well yeah I mean like for sure uh it's definitely not an all L1 like that that's definitely yeah certain not the case yeah that was a

joke but I botched the delivery a bit that was awful but it was funny good Austin was like stumped I mean that's great it's it's echoing your point that uh it is like security is totally dependent on market cap of the token that you use to secure your network yeah if you're using a cryptoeconomic solution 100% uh if you're using a ZK Solution that's different there are just like other serious bottlenecks uh for Solutions like that at this time um the tech will get there and it will be very interesting when it does um but when we're talking about solving urgent problems we've stepped into this kind of dystopian realm in ethereum where uh you

know Andy to kick off this call you talked about people trying to create like their own little like sub Moes within the ethereum ecosystem um you know people from the salon community at this point mock ethereum um and it's legitimate like we have stepped into this weird reality where there's all these little sub networks many of them which are not decentralized at all and really just run from like one server from the foundation um and they are just create like degrading the global Network effects of ethereum uh to a point that this is very much become an exent threat to the ethereum ecosystem at large um so yeah like what we really care about is solving that problem uh in a way that's open and neutral so that there is no

existential risk that's laid in on top uh as you're solving this problem of fragmentation that has come about and really degraded the properties of the network well sir we are bullish on Omni thank you for your time and for the uh efforts and just great conversation it's uh been able to kind of understand a bit more um about your vision with regards to rollup interrup and kind of the future of uh abstracting away complexities um as well as some other interesting topics so um thank you for coming on and it's been a pleasure and uh look forward to see the evolution of the open liquidity Network and the upcoming Partnerships as well yeah

likewise and thanks for hosting me you guys uh you guys do a great job educating people on the coolest advancements happening in the space so keep doing the quality work yeah thank you sir apprciate it man Rob's Rob's got jokes too