The Great L2 Migration | Cross-Chain L2 Panel

Transcript

hey bankless nation it is panel time today panels are some of my favorite discussions we have on bank list a great cross section on a specific topic and today we are talking about bridging bridges cross chain bridges this goes into a theme we've been talking about in 2022 which is the great layer to migration i think there are a few reasons we're doing this we'll get into them but before i do uh david we've got ben here as a co-host for this topic uh ben it's great to have you can you explain why ben is joining us for this conversation yeah uh we did this uh expert panel for eip1559 uh and that was uh co-moderated by

another technical moderator tim baiko and that was really really useful because some of the developers out there just ask questions that i think are really really smart that i wouldn't have thought to think myself so ben we're bringing you in as a member of the optimism team as somebody who can ask some more technical questions than what ryan and i would have thought about uh and so we're gonna first off before we get into the content we're gonna have just a little bit of a discussion uh some questions that five panelists don't need to ask like what are bridges um but before we get there ryan we have some things that we need to talk about such as our friends at on juno on juno is our new checking account for the crypto natives uh and so for those that are frustrated that things like usdc or

btc or eth aren't in your wells fargo account on juno might just be for you it's a checking account that loves crypto so inside of on juneau you can get four percent on your usdc you can also buy crypto assets with zero fees and you can also get your paycheck in crypto so when you get paid by your company it can go straight into your on juno account and automatically get converted into into crypto reducing the amount of time that you need to hold the inflating dollars in your bank account so big fans of there anything you want to add to that ryan david i've heard that uh you know that dollar is inflating away at seven percent per year that was just like as of this morning so you definitely want to get a crypto native bank account so you're not using a legacy wells fargo bank account that's

giving you like .01 interest rate this is a way to do this they also give you a fantastic uh card as well so a debit card it's metal debit card really nice really enjoying this i set up my accounts recently excited to get started so if you're interested in doing that use the code bank list 50 on your first crypto paycheck you can do that at onjuno.com uh david you know i just want to say a few more things about why we are doing this topic on bridges today because i think it's important and there's really three reasons we're doing this um the first reason is there's really no future world in crypto that doesn't require a massive amount of bridges okay no matter what you believe about the future whether it's going to

be a multi-chain future with all sorts of different layer ones okay you need bridges whether this is going to be an ethereum dominated world with bunch of layer twos okay you also need bridges so bridges are this nascent infrastructure and a massive opportunity i think both for users or and investors who are listening to bank lists the second reason something that we've talked about in our modular blockchain thesis is there's really no future for users on layer one on ethereum layer one i wanna say that again because i think that's a hard pill to swallow for a lot of people there is no future for users on layer one unless you're some kind of a whale okay the main chain is actually not for users anymore it's for chains okay this

is a layer two roll-up centric world you can get caught up on bankless past episodes if you want to school yourself on that including the one we released in early january with vitalik and the third reason is this we've simply never done a full episode on bridges and it's like it's about damn time okay because bridges are going to be a huge topic in 2022 and i feel like the panel structure is the perfect way to get just a variety of different opinions and ideas and projects to the table to educate us on this subject so we have a bunch of people on the panel these are some of the biggest bridging projects they bring you know different flavors different approaches different trade-offs different design decisions but this is a fantastic cross-section a few more housekeeping items for you as

usual if you have a question a burning question you want us to ask this is a live stream okay so go to youtube hit us up with those questions use the troll chat box for that we'll look at them we'll filter them we'll find the best ones we'll bring that to the panel if it makes sense uh and uh with that you know what david i think we should get to ben to give us a quick overview on bridges so uh what do you want to lead with for like our 101 on on bridges david yeah let's just start with the most basic question ben what is a bridge because you know most people think bridges is like the thing that you drive your car over over a river but not in the world of crypto or or across chains cross l2s just at the most basic level what is a

bridge and why do we need them indeed oh and thanks for having me on by the way guys these are my first words and i feel like i'd be remiss if i didn't start there so hi everyone okay what are bridges and why do we need them great question so fundamentally a bridge and bridging refers to the at the deepest level the passaging of communications between two different chains so basically taking information from some authenticated source on one chain second sending it across to be authenticated or received on another chain so that at the you know most fundamental level is usually what it is what is being communicated now that is most commonly movement of assets right so when you're moving your uh

tokens from one chain to another you've got to bridge them somehow so that's you know technically there's actually when you're moving those tokens around a sort of more fundamental thing that you might call bridging that is like sending a message that says hey alice has just decided to bridge over x amount of funds this is the erc20 this is the amount this is where the destination is but but most importantly i think for users this is talking about moving assets between chains that's the most common form of communication and what we have a lot of great panelists trying to help facilitate so diving into that a little bit more what is technically going on behind the scenes and i think this question actually might unpack some different kinds of bridges there are cryptographic

bridges and there are multi-sig bridges can you just uh unpack what technically happens when you bridge an asset and how that is different based on what kind of bridges out there that's that's a great question so i'll ignore the details you know we could obviously get into nuance of kind of the details of those messages that i was talking about right because you have you know the messages got to express who is depositing where they're depositing to or it could be withdrawing right where that where the assets are being bridged to what is the acid that's being bridged and so on and so forth um i think what i would say is that there is a like what is actually going on when you're bridging is really dependent honestly on what bridge you're using and what change you're bridging between and also what change the bridging between

may have an impact on what bridges you can use or what fundamental things that you can do so in general i mean to speak to my expertise on on roll ups right because that's what we're building with optimism generally generally speaking there is a sort of native bridge that is sort of treated as the canonical secure way to move assets back and forth between the chain and so when what's going on behind the scenes when you use that which is for example you know maybe the default if you go to like gateway.optimism.io right usually what's happening there is basically on l1 right on the source chain if you want to generalize right assets are being locked up and they're being locked up and they're emitting some sort of message or in the case of a roll up an event or some sort

of storage that says hey you know alice has locked up 100 eth on l1 and alice wants to use that ethon l2 please credit alice 100 eth on l2 for this money that she locked up on l1 and the only way to unlock those funds is if you bridge in the opposite direction which says hey somebody who had those funds on l2 decided that they wanted to get it back out on l1 so they're trying to withdraw these assets please unlock those assets on l1 so that's usually what you're doing at a sort of a native layer and depending on the construction of the two different chains you're moving between those might have different properties so in the case of a roll up we would consider this very secure because you have these fault proofs right that are basically a dispute layer

that are going to keep those funds secure in all cases but in general what you can do is build on top of these chains and build on top of those native bridges bridges that have different properties that might be more compelling or more economically efficient and make a different set of trade-offs in terms of things like security or user experience or what's going or what's going on so when we talk about bridging we're talking about locking funds in one place and unlocking them in the other there's a lot of details that go on there there's native bridging that can very tightly couple this in a very secure way that forms the basis for roll-ups and then there are layers of applications that you can build on top that accomplish the same goals with some different sets of assumptions or trade-offs uh that you might want to

make so that's sort of what's going on in uh in a bit of a ramble there no that makes it makes a ton of sense and just to reiterate with roll-ups and also with multi-stick bridges going from across l1 to across l2 or across from l1 to l1 there is what you call the canonical bridge as in ultimately all things that are built on top of this canonical bridge use and it's the conversation what we're going to have today is how different implementations can use that canonical bridge in different ways to make things a little bit easier for users and so there is the the slow bridge the canonical bridge and then there's like fast bridges that i think most of the users of these l2 cross chain ecosystems will ultimately use and that is who so

many of our panelists today are what they are building and so ben we have you from optimism who's building a roll-up which must include a canonical bridge or else how else would people get there and then we have many of these panelists that we're about to bring on after this who are using your canonical bridge to make different flavors of bridges that make different trade-offs and so ben my last question for you before we tune to our panelists just what are you excited to hear about from these panelists today what do you want to learn what are you uh interested in hearing about and what should listeners have in their heads is what they should be paying attention to in order to get the most out of this panel most definitely so um i hope you all ready for some gardening because i want to get into the weeds

so i definitely think we have an incredible lineup of different bridge projects here and like i said every bridge project makes different trade-offs has different designs and the implications of what the bridge gives you and what you give to use the bridge change so i think that's going to be an absolutely fascinating thing and i think for people listening that are trying to use you know these bridges that's incredibly important it's really important to understand the properties of the system that you're using because there are bridges that may have weaker security assumptions they may have stronger security assumptions there may be ones that are more expensive there may be ones that are cheaper so i think that's one thing and then i think the other part for me at least that i'm personally excited about is hearing a little bit about the future and sort of

the more uh you know next next year or two years of bridging what's that's what that's gonna look like because now that we're starting to see many of these different chains coming online we're really starting to see these bridge markets actually play out and i think it's gonna be really fascinating to hear what our panelists are cooking up in the background for the next releases and that sort of thing well i think with no further ado we should go and get right into this panel because they have so many things to talk about we have a list of questions that we're going to get through so let's go ahead and get our panelists on the scenes right after we talk about some of these fantastic sponsors that make this show possible slingshot is a decentralized trading platform that combines the performance and ease of a

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once because we'll also introduce you guys all individually but everyone thank you for being here cheers thanks for having us thanks a lot thanks for having us uh so we're gonna start with this very basic question and we're gonna go one by one what is your project what makes it unique and uh what's its flavor does it have a flavor and let's start with heart from across protocol totally um well thanks for having me guys um and yeah our project is unique uh because across started as just a demonstration of what uma's been building with our optimistic oracle and so sidebar here i actually know ben from back in 2019 sitting in a conference room screaming at me about how i need to be more

optimistic um and this actually never be too optimistic never be literally what he was saying and this informed the design we had this oracle we call an optimistic oracle that has a really simple concept where we can say hey anyone can say ask a question on anything anyone can propose and answer that question and that question is taken as truth if no one disputes it um and so this is an optimistic approach to uh ask getting data and we realize we can use this optimistic oracle uh to do cross-chain messaging and cross-chain to look at what's happening on other chains um and so that's what um has been focused on with our optimistic oracle and you know about four months ago the

idea came to us that like holy this bridging thing is a big issue specifically the specific question we're looking at is fast withdrawals from optimistic roll-ups or from roll-ups to layer one and that's actually where we're focused and we realize that we can come up with a design that uses our optimistic oracle to quickly securely and in a capital efficient way actually move assets back from l2 to l1 and across itself is this side project that the the team behind the mic was called risk labs built we built it very quickly um because it's using our oracle and we built it as a demonstration of

this optimistic oracle technology with this specific focus just focused on l2 to l1 um and it turns out it works really well um which like gets me really stoked it's like it's capital efficiency we'll get in those details later um but that's that's our origin story and that's how we got here awesome thank you heart for that that was hart from across protocol again a product out of uma and now we are going to go to vc out of mover that's mov r vc uh can you just tell us about uh mover how what's does it have a flavor what is it optimized for what makes it unique in the world of bridges yeah for sure so like more is like probably quite uh different than you know all the flavors here like uh

more essentially we call it like a meta bridge our approach here is like taking the modular uh approach that that we saw with you know like uh scaling l2s you know having like different settlements different dla so we are trying to take like a modular approach we where we have like a standard uh bridge building framework that can be plugged into any sort of bridging mechanism be it optimistic be it hdlc based be it like a oracle or something and that allows us or like you know developers to like build this this like hybrid sort of applications where you know like movement between l2s could be trustless but if that app also wants to go to some somewhere like solana they could use like a more you know trust

minimized solution so we are we are trying trying to like go in this like uh modular phase where people can build their bridge applications without you know kind of thinking of like what the exact bridging mechanism or like you know message transmission mechanism would be so yeah that's kind of like the unique uh thing in the direction that we are taking with mover and you know hope to showcase something really soon absolutely thank you thank you vc moving into chris chris from hop protocol chris tell us a little bit about hop what's its unique feature what's its flavor of bridge what's it like sure and then thanks for having us on the show and um yeah so we're building hop protocol we're very optimized for ethereum's ecosystem and ethereum

scaling solution so we actually use ethereum as as a hub to kind of bridge um between all of the different layer twos and scaling solutions and previously our team was working on a wallet called the ethereum we actually built up just out of pure necessity to get our users onto layer two have them stay on layer two and just never touch uh layer one at all and yeah so it's very optimized for for ethereum's ecosystem awesome and then last but not least we have arjun from connext arjun all right connection's been around for a real long time uh and it started actually as payment channels before it turned into bridges arjun can you tell us about uh connext and what flavor of bridge it is

what makes it unique yeah um so yeah as you mentioned connects has been for been around for a very long time uh we actually built the first ever like non-custodial l2 system on ethereum was pretty cool in partnership with spanx chain in like 2018 um uh obviously things have changed quite a bit since then because that was a very simple like micro tipping system uh using payment channels um uh connext is a an interoperability network that lets you basically transfer funds and then also do some forms of message passing between chains so like calling contracts and things like that um we're working towards like more general purpose interoperability that's completely chain agnostic

what we focused on is two things uh trust minimization so we are extremely extremely extremely patched about making sure that like connex has the exact same trust tradeoffs as you know using ethereum itself or or at least as close as possible and like um generally speaking uh the the security model of connects is effectively the same as the security model of the role of itself um uh and then um or or potentially better in some cases um and then uh in addition to that uh we we also have focused a lot on extensibility so like um the the idea there was that we don't quite know yet what the what the right mechanisms are going to be are going to be in the future around like how l2's will be built um and of course we also have this like uh world right now where

there are ethereum compatible or even ethereum friendly uh chains that are not actually like tied to the base l1 and there may actually be a room for for those to exist as like a lower trust environment um or more trusted environment sorry uh in the future as well um and the goal with k'nex is just to make it one simple interface that allows you to connect to all of all of these different systems um allows you to have like a true kind of internet of ethereum so arjun maybe um you sticking on this for a moment could you tell us a bit more about how we compare these various bridging solutions like sort of the the trade-offs of them and also get into if if you're thinking about um like the the perfect bridge the success

criteria for a bridge what are the kpis that you really look at is it number of users using this thing is it amount of capital flowing through it so first how do we compare these bridges and secondly what are the success criteria and sort of kpis yeah um so there's a there's a mental model that we've been using and of course all mental models are simplifications but i think this is a good simplification um and the mental model is is something that we like to call the interoperability trilemma or the bridging trilemma which is similar similar in concept to the scalability trilemma where all interop systems can only really have two of three properties and those properties are uh extensibility so being able to like go to multiple chain multiple different you

know l2s and chains very easily and work the exact same way and all of them um generalize abilities the ability to do arbitrary data passing and then trust minimization and what we've seen is that all bridges kind of like pick end up having to pick for for just because they have to end up picking like two out of those three properties um uh everybody that's on this call uh has selected uh trust minimization and extensibility so that's why you're able to like run the system on l2 and then also on uh on ethereum and also do it without without you know introducing a lot of trust but the you know we've talked earlier on this call about multisig bridges um that you know multisig bridges pick generalizability and extensibility but they're obviously more trusted um so yeah generally we've seen that there's

like three overarching flavors of bridges and then of course a lot of other subcategories within them um can you repeat the second part of your question yeah so like success criteria for a bridge what makes um what makes a bridge successful is it amount of capital is it you know users what what's what are the kpis yeah um this one's a bit more difficult because it's like it depends on what the bridge is being used for right so like if if your system like hop connects i guess everybody that's on this call um your kpi is going to be like uh transaction volume so the amount of value that is flowing between chains because the vast majority of what you're doing right now is like helping users transfer value from one system one l2 or chain to another um whereas uh you know if you if you once you start moving

towards like more generalized data passing where you're allowing people to build like actually cross l2 apps that are fully generalized um uh then it becomes a little fuzzier because it's like now you're running this like you know system on top of on top of these l2s and like the purpose of that system may not be to move funds it may be you know just to pass arbitrary messages so in that case it would probably be something more similar to like ethereum where it's like you look at number of transactions that the chain is doing um or perhaps even like the amount of fees that are being earned by the by the actual uh service providers so chris wondering if you could kind of build on arjun's definition here so we're talking about comparing different bridge projects and yeah i'm struck by all the time how how much surface area

for education there is here because now now we uh we need to do something with with kind of the community and we need to make sure the community understands the difference between like multi-sig trusted bridges and these like more trustless bridges and it sounds like all of the panelist participants fall in the the trustless category but even within that that you know uh trustless category what are the other trade-offs or differentiations you you would make between these bridging projects how can we how can we compare them yeah it's a great question um so so there's definitely kind of a few trade-offs within this uh trustless uh design space of uh bridges and so um i i guess kind of the main uh

types of bridges would be like you know i think us and across share very similar properties where we kind of have both um passive and active liquidity providers i know we're going to be talking about that stuff a little bit later um and basically you know have these active or yeah have the active liquidity providers fully verify different um chains and and uh facilitate the bridging and then have kind of the passive uh liquidity providers take on uh longer tail risk of stuff breaking or challenge windows not being long enough uh and stuff like that um but yeah and then the other side of things is uh kind of like atomic swap uh type of bridging and uh you know that that can be trustless it

can be extended to chains outside of the ethereum ecosystem you know which can't uh necessarily happen with hot uh and and you know this will you know ux wise you you do have to wait for kind of like two steps of finality so so if you if you're thinking about like an optimal bridge uh an optimal bridge will um be able to do a transfer within just one step of finality so so you wait for the source chain to reach finality and then you receive funds at the destination uh and and so like an atomic swap setup you do have to kind of wait for for two steps so that that's kind of one of the trade-offs but then there are big advantages around capital efficiency and stuff like that um that

that are worth uh taking a look at so if you see vcm and mover you guys touch a whole bunch of different bridging solutions and i'm trying for for a minute to to put us back in the headspace of a typical user who's like i want to get from here to there from this chain to that train and they're looking at the landscape and they see all of these different bridge solutions you know one's a two-lane bridge one's you know a one-lane bridge one is kind of just like uh i don't know uh built out of wood the other is like a nice you know suspended bridge all of these different bridge solutions how do they evaluate the differences and make a decision on which is the best bridge to take is like safety and security the

primary concern is it how much the toll is how much it costs what are the primary concerns from a user's perspective so like from a user's perspective i would say you know like it you know kind of depends a lot on the user profile so it's like a degen you know they they could like prefer a really centralized bits that allows them to just you know kind of operate on a single database and just like move things around before the block on the sending side even receives finality because like the liquidity provider here can take the risk of the source side kind of rolling back so like it it definitely kind of depends on like the user uh so we've like kind of built out this

thing called fun more which is like a bridge aggregator that kind of like allows to just like see what all options are there right now they're you know like different security properties they're different like outputs gas fees and so on and you know kind of judge from there so like a user depending on his preference can just like see what what he prefers to you know kind of move his funds from one chain to the next so yeah you know heart i'm wondering if you could weigh in on this this you know conversation so far so uh is it it seems like there's so many different bridge solutions is it good that the ecosystem has a plurality of different solutions or is that is that more confusing uh

what types of bridge solutions do you think the ecosystem needs to develop in order to get us where we need to go in this this great migration from layer one to layer two yeah ryan i'll give a controversial answer here i think um [Music] which i i hate i i think the number of solutions is problematic and i think the different security properties they have makes us a show and actually exposes users to a lot of risk that they don't know they're taking and so again this panel we're all aligned in that we at least are are closer to the trust minimization side of things or the trustless side of things and we value that um there's other people that are not on this panel that

um like are more generalized and supportive of chains that aren't on that and there's some really scary um going on out there the problem in my view is that users are ultimately going to pick a bridge based on price and mostly based on price alone or let's say price and speed so i think that's going to end up being what we have happen and that could be very scary um if people pick up the cheapest bridge but that has the worst security assumptions and then something goes wrong so i think that there's this uh i think what we all got to do as like on this group of people we got to get to be the cheapest and i think price really

matters here um that's kind of my view and we've got to be cheapest while being trustless um and that means iterating on a and i got a lot to say on that too but you look like you're about to say i want to get to i want i i do want to get to arjun and some of the others really quick but but like scare us straight for just one second hear heart okay so like when goes wrong how how could it go wrong if we're depending on centralized more trusted solutions for bridging like why why is this so bad what is the iceberg that people don't see in the water in some ways i think um ben's big brain might be actually best to answer some of the really scary here but generally speaking it's just

like you don't get your money or the tokens you think you have you just don't have right um and like you know a hundred percent losses um are a bad thing um and then people providing liquidity like losing out on that are a bad thing and i think it's um a reasonable expectation a reasonable expectation to think that in 2022 some of the biggest hacks uh will come from bridges or bad bridging solutions that would be like my my ben would you out here yeah i mean well definitely to heart's main point like yeah what do we need as a community we need like the thought leaders and people with successful podcasts and twitter followers to tell

those users about the dangers and tradeoffs that they're making so i feel like we're doing the right thing i would say that bridge security is an interesting problem there are these trusted bridges which effectively assume these same security assumptions as side chains right so if you want to see a multi chip bridge right a side chain is kind of like a multi-sig chain and for some use cases maybe that is the level of security you want it's definitely less but it's interesting um and once but one thing to add to that is that for the perspective of people that are bridging there is one difference which is that the funds that are in transit are the things that are currently at risk of being locked so it's not like once you bridge your money the bridge collapsing

an hour later could affect you right like i think good bridge designs even that are centralized and do have trust assumptions they at least give you that so like one thing i always tell people when they're bridging if they want to use a you know sketchier more custodial bridge is literally you should be going to the twitter immediately before you bridge and look if they went down because realistically if they're going to go down some point the next week you might be fine using it right now right so you need to understand that risk and you need to be informed i think the question that i would actually follow up and ask this panel because i really liked hart's comment that it's our responsibility to make the safe bridges and the the trustless bridges as cheap as possible i actually i'm curious though i think this is at

least a bit of an open question on my mind do we think that's possible i think there is some intuitive argument that tells me trustless trust trusted bridges by making trust assumptions can exercise some capital efficiency that gives them an advantage so i'm really curious if we think that we can get those bridges as cheap as possible or do we think it's an impossibility result that there's a trust cost trade-off because i am worried that that's the case who wants to take that one first uh heart you just unmuted so go for it no chris go ahead okay chris go for it sure so ben i think you're right like i i think that there are trade-offs that that you can do in a more

trusted way that we could just never compete with uh in terms of capital efficiency that being said i i do think that there are trustless models um you know including where we're approaching where once you scale up the fees just get so so so cheap um and so like right now we're you know bridging across hop you're probably looking at 10 to 20 basis points um more like nine uh basis points if you're if you're bridging with beef um but you know as that scales up more and more the batches get bigger uh the the fees really go through the floor and you know it might be that that uh users are willing to kind of stay within this uh you know more trustless environment uh because you know one or two basis points they

just don't really care about yeah i i just have a question on this just to help me understand because this this new world hasn't yet come yet right it's still being developed but do you guys think that like you know how everyone complains about gas fees today you know as they should i understand it's very expensive to transact on on layer one do you think tomorrow they'll be complaining about bridge fees like the toll to cross from from one chain to another is like too high and that'll be a pain point for users is that the future we're looking at what do you think chris i i personally think we'll only see high bridge fees when there's you know a huge net flow uh in just one direction from like one chain to to ethereum or one chain to another chain uh but when things are pretty balanced i i think you

know as we scale up these are just going to go through the floor ben you've got to so go ahead no always going to say david is just to add like to chris's point i think that there are designed to ben's question around just are there trade-offs here with capital efficiency versus trust assumptions um i think there are designs that get more specialized that actually solve for this and even get a little bit in the weeds and compare what we're doing versus what chris and hop are doing um we right now we don't support l2 to l2 transfers but we are highly capital efficient on l2 to l1 transfers whereas hop just on the flip side here

is less capital efficient on l1 l2 transfers it takes about twice as much money um just from like funding a pool side of things but they can do l2 to l2 things and so there's sort of like a trade-off here in our own designs that um highlights to me if you get pretty specialized you can actually get really capital efficient um and like right now for for context um across can bridge a million bucks a million usdc our average fee on that over the last few days about four basis points um so it's like four cents per hundred dollars uh to do that and that's not um ryan back to your original point that's not a cost that goes up with usage

that's like an interest rate fee that's like a cost that only uh so so unlike unlike uh l1s where the costs get more expensive as more usage happens this isn't exactly the same thing it's like it's about a capital availability um yeah to like add on what heart just said i think we are like kind of missing out on um you know on a mechanism for for bridges that are like you know maintenance uh mint and burn based so like you know kind of like imagine a world where there are let's say only zika roll-ups that settle you know every five minutes or so uh then we can actually have like you know l2 to l1 and l2 to l2 you know like fast movement

of assets you know within five minutes or you know like uh adding like l1 latency like 20 minutes or so without the need of external capital so i doubt there's like a you know trade-off between trust assumptions and costs i think there's a trade-off between trust assumptions and latency uh i think like that's much much more likely oh and yeah i heard this first from james best rich yes yeah um just to follow on that because i think i like completely agree like i don't think the capital efficiency of the bridge is necessarily directly related to the trust considerations because like if you think about you know systems like any swap or thor chain what they're doing is uh utilizing a

multi-sig bridge that is backed by stake and the staked asset is the token and so like the the capital efficiency of that bridge is not like while you're normally thinking of the liquidity available in their liquidity pools the capital actual capital efficiency of the bridge also includes the staked assets because that's like the fallback mechanism the the benefit that those bridges have is not that they are more capital efficient they're not um it's just that because they're using a multi-sig as this like cross-chain oracle they are able to have fully passive liquidity provision for for like the system and and or they're able to like mint and burn ticket tokens without really any recourse so you know it's it's almost like you you

don't necessarily it's like less of a consideration around how capital efficient it is and more just around how difficult it is to build um and of course like it's it's same as like side chains versus l2s like l2s will get cheaper than sidechains at some point it's going to take more work to get there but they will get cheaper it's just that side chains are very readily available they're very easy to build and roll out it's going to take more work to get there should be the hashtag of ethereum i think and so it makes sense it makes sense that all the people with trust minimize minimize bridges are all kind of aligned on that um ben i want to tie off this section of our our questions with this question and hopefully that

can lead us into into the next phase of the of this panel but um we we've we have so many different flavors of bridges here and so many different trade-offs and uh from at the end of the day if we want crypto to take over the world like users are just not going to care they're just going to want to press buttons and have things happen so and we've started to see some of this in the uh the decentralized exchange landscape where first there was uniswap and then there were other decentralized exchanges and now there's more decentralized exchanges and then there became decentralized exchange aggregators um some of these aggregators are built right into meta masks thing and also things like like matcha and one inch or just making it a lot easier for people to just route around the different liquidity and defy to get what

they want is the future of bridging something like this where just an aggregator just says hey we'll take care of all of these complexities and trade-offs is this a logical conclusion can we take a page out of the history of defy to extrapolate into the future of bridging yeah i think that what hart said is probably accurate which is that users are probably most reactive to price so that argument would indicate that bridge aggregation is a very strong potential future i'm sorry i'm sure that uh vibe agrees with that what i would say to build on that is that ultimately it's not quite the same from a technical perspective as

these as these exchange aggregators because in the example of a one inch or a matcha the trust assumptions of the dexes that are being aggregated are completely homogeneous right so at the end of the day no matter what new bridge is pardon me no matter what new decks that one inch chooses to integrate next the fundamental contracts that are a part of the one-inch system will enforce that the exchange rate is only you know held if it was agreed upon by the user and the money came from somewhere this is not the same as these different bridges because you are relying on more than smart contract security it depends on what you

know details and those trade-offs that we just talked about are made but i do think that it's worth noting that that's a fundamental difference an exchange aggregator it's all contracts on l1 it's all 100 composable all of that stuff that's not the case for bridge aggregation so i think what will play out will definitely be dependent on cost i think it will also be dependent on the same depth of reaction to security trade-offs that users will have actually with using chains as well so definitely a world that i've imagined is one where like in my wallet i can kind of say how trusted i am and then maybe the aggregator will only aggregate the top you know 10 of most trustless bridges or whatever right so i think those questions are just

general like crypto ux questions that apply to sovereign chains as much as they apply to the bridges between them and i hope that as we get more sophisticated software it'll all disappear in the background but we'll be able to keep uh being trustless yeah ben i just add to you that i think there are a lot a lot of parallels to what has happened with dexes here too and then there are the differences you pointed out but parallels for example like um uh if it was ryan or david but you said you kind of started with unislav but they weren't the first it was like 0x before that and 0x was like active liquidity provision which is kind of like connects and some of this other stuff and then it became really useful in other ways the future once it got

aggregated and then like unit swap v3 was super capital efficient and this one thing and you saw v3 was winning on the volume things because of their capital efficiency and then it's getting aggregated up so if you kind of want another view i think there is going to be this pattern of these different techniques will have their strengths and weaknesses um there will be a strong focus on capital efficiency and fees um and then somebody will aggregate this all together but then you add in the complication like what ben talked about is that it they're not homogeneous trust assumptions and so here the role of the aggregator i think actually becomes all that more important because the aggregator is now the gateway that's going to pick which

bridge solutions are actually safe and which aren't um that would be my thesis for my hypothesis for how this world plays out in the next three years and i just wanted to add something to uh what you were saying earlier about like the the you know whether we can achieve kind of the same fees that that a trusted bridge can achieve and i think what you're saying arjun makes a ton of sense like like basically that the the trusted bridges can have just purely passive liquidity and their their active you know what in our cases would be liquidity providers they're the active piece of their bridges are just multi-sigs they don't have any kind of capital requirements and so like you know what you were saying hart i i think

the way uh across is is able to kind of achieve uh like more capital efficiency is just by by shortening that that challenge window um so you know outside of the passive liquidity the you know the capital efficiency comes down to like how long do these active liquidity providers need to lock up capital so so with with hop we have a full day uh challenge period and i think with the cross you've you've taken it down to uh three hours uh and so like while that is you know eight times shorter and eight times more capital efficient it is you know it could be argued that it is kind of trending into that that more trusted territory uh by by having that uh shorter challenge window

do a response to that but we can come back to it later vcu do you want to add in any thoughts yeah uh just on the aggregator thing i think like uh for uh dex aggregators we could like you know pretty much black box the whole thing because like you know everything's atomic you know you don't care what uh what decks you are going through uh until you get you know x amount of die at the end of the transaction but uh kind of bridge aggregators are more like you know this uh this like sky scanner wipe where you need to like you know kind of select do i want to go via lufthansa or do i want to go where i just like you know some new that i've like never heard of flight which is cheaper but i you know kind of trust

lufthansa more so it's like going to be there where like users have to like you know make like a manual selection or like what security properties they are opting into but yeah we can like kind of abstract all of that out by uh you know having this like we are like still working on this but uh having this sort of like uh security score per bridge that like a aggregator or like you know us as a community can decide on and then people can just be like hey man just give me all the pages with security for a security score four and above and so on so like i think like you know by working on some like ux stuff we can make it happen are you going to add in some those yeah go for it yeah um i like the skyscanner analogy a

lot and uh and i mean it's a little dark because basically what you're saying is like the trusted the trusted bridge equivalent is like you know your plane crashes because it's less trusted um but i do i do like the analogy because you're right that like uh you know users users will eventually in theory learn to like base their choices on more than just just price um i wanted to touch on capital efficiency a little bit uh because i think that's a that's a really important point and i think that's like one of the ways that like we try to differentiate as well um and you know i one thing to note is that like like capital efficiency is largely ends up being determined by like the constraints around your protocol so in the case of like pop the capital efficiency comes or that you know the

capital usage comes from the need for passive security on both chains and then the lock up um in the case of a cross it comes from you know the the the shorter lock up and then like the the like uh the money that is kept in reserve in the event that like fraud occurs and dispute needs to happen um and so i think like in the in the interest of kind of talking a little bit more about capital efficiency i think it's important to remember that like while it's true that capital efficiency is super important it may not actually end up being the case that it results in like the best possible price um and the reason is that like uh the overhead that you end up going through to be able to ensure high capital efficiency and all doesn't always end up being valuable so like a

good counter example to this is like you know um so like the way that connects works for instance is like uh you have a set of lps and then you and then like uh you basically just directly swap with the lps the lps take no capital lock ups their lock ups are like less than two minutes um and uh and so it ends up being a really capital efficient system and like the the idea behind it is very similar to like rfq systems or clearing houses and the problem is in many cases those rfq systems you know like those rfq systems didn't actually really work out that well for dexes and the reason is just like the additional overhead and complexity involved in having order books to like match trades with between people ended up costing a lot more money than than like using a slightly less

capital efficient system like unispot um right like unispot doesn't have didn't have great capital efficiency um 80 plus percent of liquidity was just never used um it was just sitting there and but at the same time like you because you had this really easy system which was really predictable and nobody had to deal with like on-chain order books and nobody had to deal with all this other complexity users ended up saving a lot of like cognitive costs and also ended up saving a lot of costs in terms of having to wait for things having to like post their data upfront on chain um and i think like those things are also pretty important to consider as part of this like larger conversation around cause guys this has been such an amazing conversation i'm gonna have to listen to this again once we are done here uh

we're gonna come back with a question out of ben about vitalik's cross-chain commentary a blog post that he wrote in the past that uh has predictive components perhaps about the future of a multi l2 world versus a multi l1 world i think that's a topic a lot of us want to unpack so we're going to come back with that right after we get to some of these fantastic sponsors that make the show possible when you shop for plane tickets you probably use kayak expedia or google to compare ticket prices so why would you limit yourself to just one exchange when you trade crypto when you make your trades you want to make sure you're getting the best possible price on your trade and that's why you should be using matcha matcha has smart order routing that splits your trade across all the various liquidity sources in ethereum

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human counterparties or centralized intermediaries just autonomous code on ethereum input the token you want to sell and receive the token you want to buy the uniswap grants program is accepting applications for grants do you have something of value that you think you want to contribute to the uniswap ecosystem no matter how big or small your idea is you can apply it for a unique grant at uniswopgrants.org and help steer unit swap in the direction that you think it should go thank you uniswap for sponsoring bankless all right welcome back y'all okay so i wanted to kick off this next question prompted by a post from vitalik i think it was in an ama but he also tweeted it by the way vitalik's back on twitter this year very exciting

um that was talking a lot about some of the the trust related conversations that we've been talking about here so i'll try to very briefly it's it's a it's a longer post that i'll recommend you check it out as listeners if you haven't posted on january 7th but i think that maybe a bit of background which i would share is that originally when we were thinking about uh bridging or these cross-chain sort of scenarios the actual first thing that came up was something called an atomic swap and this is actually not a direct messaging there's actually never really a in protocol way that one chain talks to another but it was a way that two users with assets on two different chains oh my god adorable doge arjun two different two different users on two different

chains could agree to a price and trustlessly swap you know i mean what was in the beginning like bitcoin for litecoin i think that's dan robinson's classic joke is like what is litecoin's use case it's for being the example of the other coin in a cross-chain swap so anyway in any case that's that's sort of a different uh form of swap in some sense than what we're starting to see in more advanced ecosystems and it actually is very similar to this analog analogy we were making right before the break where xerox and ether delta had were dexes that had order books and then we moved to uniswap which had this more passive form of liquidity so there's actually a similar thing that's emerged in cross chain discussions which is basically whether you which basically comes down to wrapping

one asset on another chain so before we had these protocols where you could exchange eth for bitcoin and there were different protocols to do that and you could do that fairly trustlessly between two people later on we realized that there were these ux advantages of having something like wes well i mean wrapped bitcoin where you would or keep right where you would actually take bitcoin and sort of express it as an erc20 token on ethereum and vitalik's kind of argument here is that that's less secure because imagine that you take one asset on one chain and then you wrap it and express it another chain then you wrap it and express it on another one and you wrap it and express and express it another one right you have all these hops no relation hot protocol you have all these hops of connected wrapping and wrapping and

wrapping and there's a risk that if any step in that wrapping process fails you wouldn't be able to unwrap so if any of the chains along the way were able to unwrap were able were to go down then you risk you know the entire sort of chain of wraps so this is the sort of term he used was arguing that the future will be multi-chain but it won't be cross-chained because this rapping exposes uh security so i'm just really curious honestly i saw a lot of great discussion about this online i think there were strong points for and against but you guys are the cross chain experts so i'm curious for your takes if you guys have any spicy opinions thoughts agree disagree i don't know it's a bit of an open question but hopefully someone has something interesting to say yeah i think it's super interesting like

a lot of people were thinking about idc as kind of like holy grail you could do l1 to l1 bridging and you know not have a lot of uh trust assumptions um but my biggest takeaway here was that we kind of think about 51 percent of attacks as these like end-all be-all like worst-case scenario and i think what uh vitalik is is saying here is that you know we shouldn't necessarily optimize for preventing a 51 attack in in like all absolute cases uh and that you know that there are good ways to recover from 51 attacks and that you're only kind of like the only things that are at risk are kind of the in-flight uh transactions during the 51 attack and and that

his point is that once we kind of get into this like cross-chain world not just a multi-chain world where you're using assets based on one chain on another chain that has you know a completely different uh consensus layer that now all assets are at risk and this is much much less secure than if everything's on the same consensus chain and we can you know do our social recovery from a 51 attack so that i thought that was a big insight um for myself yeah um so we've we've spent a bunch of time thinking about this as well because you know like i said we're sort of this open system that can be kind of permissionlessly deployed um right now

to evm chains but it's also possible to plug us into anything and uh and that definitely brings up a lot of complexity right because it's like what happens if uh someone is we we sort of inherit all of the security properties of like the chain and tokens that were that are being used in our system but like what happens if someone plugs us into like xyz chain that has zero economic security and that xyz chain has their own representation of usd usdc or die or something um you can you can basically use that that really really centralized very very insecure chain as a way to like spoof u.s fake usdc or fake dive back to ethereum take it from this very low security environment to very high security environment um and it's it's unclear how that should be handled right

because like you know if you want to get to the to the ideal case where like bridges across chain bridges are like fully trustless and they're permissionless and nobody can really stop them then um how do you stop this from happening um i think like my my my personal view is that there are there are a need to like bridge over blue chip assets and like have them exist in rat forms on different chains um that does add to security risk uh i think we'll probably have to the the sad reality is like even even if we like in a closed room environment say that's not the most secure option and that adds a lot of tail end risk it's going to happen so i i almost think that the the discussions should more be should more be around like uh how do you mitigate the risk of these of these

potential cases rather than stop them um because there really is no way to stop them and from a mitigation standpoint i think there is some really interesting things that you can do using models like connects top um i'm actually not sure about across i would need to think about a little bit more but like in the case of things like connects and hop you're you have like pricing on a chain change dynamically based on demand for that chain um and that pricing can reflect this risk in a in a decently realistic way if if like a black swan event happens and the other thing is that that pricing can actually adjust like you know we talked earlier about like what happens if everybody is going from one direction to another uh on a given chain like uh you know through hop or through connect well at a

certain point the price is just gonna get incredibly expensive and it's going to become unfeasible for people to continue trying to move more liquidity out um i think there's some i think you can use those sorts of things as like interesting risk indicators but yeah go ahead hard no arjuna was gonna say is like i actually think one way we reduce the bridging of blue chip assets um like cross chain uh like for example take like blue chip d5 tokens on ethereum like how do we reduce the bridging of that cross chain well we make it such there's no need to bridge it to another chain which we do by making l2s really

awesome right excuse my language so i actually kind of put this all back on ben where like he's like to my ears baby but but i'm i'm actually dead serious like to me it's never really made sense to take like an ethereum based asset and put it on solana unless ethereum's ecosystem is so expensive to use there's like you can't do the thing you want to do on ethereum and that's like not maybe always true maybe you want to use it as like collateral to land in the salon ecosystem or something but i generally speaking think that if like l2s are really really good the need to like leave the ethereum bubble goes down i could it would be a whole separate

separate discussion if i started rambling about how l2s need to address the real concerns that solana poses that ethereum tries to stick in its head gets head in the stand about sometimes but we'll save that for another day well i i actually have a follow-up on this because so one of the implications i think of this post so vitalik used this this term uh zones of sovereignty to sort of define kind of the difference like for people who aren't tracking so on ethereum if you have an erc20 on ethereum and you put that on a layer 2 chain you inherit basically the the asset inherits the economic security of layer one but when you bridge that erc20 that token from ethereum to say solana or um

you know tezos or um avalanche or something like that then then you lose those security properties and it actually becomes a different asset right it's like an asset that you're has different trust assumptions and you can't you don't have the same security guarantees that uh it's actually backed by the things you think it's backed okay and so the implication of this i think everyone going into 2022 from a macro perspective that's why i want to throw this question the bridging panel but from a macro perspective investors users everyone is looking at like two different paths to the world one is this multi-chain path and by multi-chain i'm not talking about the way vitalik's using it but multi-chain meaning like there's ethereum and then

there's all sorts of other l1s and it's this universe kind of like the cosmos vision the ibc type vision of things that's sort of the multi-chain path and then there's another path where you have ethereum as a settlement layer and it is kind of the dominant settlement chain and then you have a bunch of layer twos and it's kind of an ethereum ecosystem and that's sort of the dominant player i think investors users everyone is trying to figure out what's going to happen is it going to be a like multi-chain universe or b is it going to be layer 2 ethereum ecosystem dominated universe i'm wondering if this this zones of sovereignty thing provides a clue here like if bridging is actually the clue here because it strikes me if

you have a multi-chain world you have a completely different set of trust assumptions here and it might actually break down when we start trying to bridge assets from chain to chain to chain i don't know if anyone on the panel has a thought on that but like it's something that has consumed me very much like in 2021 and going into 2022 how do you think bridges play into that um arjun maybe you have a point on this yeah um so there's there's like there's sort of like an objectively ideal solution and then there's like what's probably gonna happen because the world is messy and people hate standards um the objectively ideal solution is always gonna be to have one settlement layer right

because like the whole point of this ecosystem the whole point of the work that we're doing here is to move towards a world where you have the maximum amount of cryptoeconomic security associated with this like base layer um and so it makes sense to concentrate all of that into one chain because that provides the best kind of long-term economic guarantees against what could potentially and probably will potentially one day be like sovereign level state level actors attacking chain um in that vision yes you know data availability shards l2s that is that is the best world because you what you're saying there is like um everybody is leveraging ethereum's crypto economic security no one else needs to think about bootstrapping a validator set anymore because bootstrapping validator

set is hard and it's expensive and in you know it fragments liquidity um and instead you just focus on like execution and other other pieces built on top unfortunately um as i mentioned people hate standards like even even in a non-uh bag holder environment like the internet itself uh like is made up of a ton of protocols and of course we know that you know we know about tcp we know http like you know these things have been generally adopted at standards but also there are a ton of other protocols that people don't know about that that get used all the time and like we actually have to build adapters to all of them it's a huge mess and in those cases like none of these were you know like uh community funded or vc-backed companies trying to issue a token and

create their own communities like that those nobody had any any stake in the game except for ego um and so i i think like the reality is that you know we'll probably have some combination of the two we'll probably have this like ethereum universe um and then we'll also probably have a solano universe in a cosmos universe and a you know xyz polka dot universe um and uh and they'll sort of follow this like long tail pattern um and we'll have to kind of figure out how how it should work once you get there yeah i totally agree with the kind of power law distribution like you know having kind of probably ethereum capture the majority of high-value use cases um just because it is optimized for

decentralization and security uh and then you know i do think we'll see other chains that you know where use cases you know might not make sense on ethereum you know even if we can get uh layer twos to be like the theoretical maximum efficiency there's always gonna be use cases where you need you know sub one cent transaction fees sub one basis point uh transaction fees uh and and you know i i think it's you know while it's important that we we like capture as much as we possibly can and drive those fees as low as we possibly can on ethereum's layer two i think it's also important to kind of uh recognize that that there's use cases that that you know should be very interoperable and

close with ethereum where users can like go on another chain and play a game where they make 100 transactions and don't have to pay you know a thousand dollars to to play that game and then and then can always retreat back to safety uh to ethereum and so like chains like uh like polygon and stuff like that i think have kind of provided that more of like a playground uh where users can you know keep their secure funds on say optimism where they know that they have this this like absolute strong like i can keep my life savings here you know maybe one day uh maybe today uh and then they can also take you know say like a hundred bucks or the amount of money you keep in your your wallet your actual wallet uh and go go play games

and and and then come back to safety all right guys i think we're going to start to wrap up some of the questions here ben do you have any last questions that you want to hear from our panelists before we come to our closing questions oh man i mean i i do because i can talk with hours and do talk with hours for hours with all these folks i think none without opening up a big new thread of discussion that maybe we don't have time for i think the name of this game though was trade-offs and that would be what all my questions are about and if there's one takeaway for the the audience is trade-offs always and not just about l2s but about all things crypto but then also about all things life just tradeoffs all the way down um there's one last question

that hart brought up during the break and it's about how are bridges going to be used um and i think that heart you might even be able to ask this question yourself better to yourself so can you go ahead and ask that question and then also answer it sure the ask me answer my own question thing um yeah no david my point here is i think it's useful to have a thesis for how we think this bridge usage is going to get played out and i'd actually really want to hear other people's opinions and perspective um and and i want to be opinionated here so in my opinion our goal as kind of ethereum maximalists ish right is we want people to stop

using l1 i think ryan made this point earlier like users stop using l1 get to l2 and our goal from a consumer perspective is to have people bridge in one direction and not go back to layer one that's like something that is good for the ethereum ecosystem so then my question actually becomes like the question ask myself is like who actually does the bridge in the other direction like maybe the whole optimistic roll-up uh withdrawal window isn't a problem if nobody's moving back to l1 um and i think actually for the vast majority of users they're not going to be moving back to l1 that's the whole point the people that will be moving back to l1 though are arbitragers and i think

that's where this real use case comes from so you're going to have people that are like seeing price differentials on the uniswap deployment on optimism versus the uniform deployment on ethereum and you have arbitrage that need to move back need to balance these trades across assets and that's the thing they got to do so from a cross's perspective just to share insights on how what we're thinking here we're trying to be really hyper efficient and really really low cost for big transfers from l2 to l1 specifically to help arbitrage do that job because i think that the core user is going to go in the direction to l2 and not move back and that's that's i'm kind of want to know what other people think of that

there is then one other like sidebar which is what about going l2 to l2 and that's something that like we don't do right now and that i think is a strong use case where then you could have consumers that are on optimism but want to use arbitrarily or whatever else and so there's a bridge case there um but i think i'm talking too much so a question to the panel how do you think people will use l like how would you think people use bridges what do you think the future is and like what are your opinions there um yeah i'll um i'll you know probably at some points here so like most likely arbitrages are you know like not not going to be you know like heavy bridge users to like you know capture like this like arbitrage opportunities because

like at the minimum we have to like wait for a finality on the source side you know so like at the minimum it's like you know going to be two seconds five seconds and arbitrage opportunities are lost in like you know like a minute of milliseconds right so it's like most likely going to be arbitrages like having two different liquidity pools and you know kind of you using and like their own like you know centralized system and kind of you know you using their own liquidity pools between these two you know chains and rebalancing via layer one yeah and apart from like maybe like the users one directly go to layer once but i think like conditional transfer protocols or repayment protocols like hops or like you know other like bridges could you know just like batch all of

these user transactions and you know just like do a single on-chain transaction for them it you know most likely will be rebalancing across the uh you know different arbitrage pools across you know different chains and like you know other other bridging protocols and so on but yeah most likely hopefully you know things remain on it yeah like that that was kind of our approach was really you know optimizing for layer two to layer two stuff because you know like you're saying hard you know a majority of users are kind of moving to layer two right now uh and then not necessarily moving back and and what we're seeing is this like really diverse and rich uh set of layer two uh

solutions kind of come up uh and so you know like obviously optimism and arbitrary are big ones and then the uh the zk roll ups are starting to to get traction but you know i kind of expect the zk roll-ups maybe to have a slower start uh just because a lot of them are requiring a custom language or something like that but there still might be use cases where user wants to jump over to that chain they want to use those applications and they need to be able to kind of move across this this rich layer 2 ecosystem very fluidly so you know i kind of see that as how users are using these bridges to go from one app to the next depending on uh what what underlying l2 solutions it's uh built on

the ability to fluidly move from one layer two to another layer two feels like table stakes feels like a necessity this is core infrastructure if we're going to get to uh where we started this channel with the episode with is the great migration to l2 from l1 to l2 it's something that is in process now happening in 2022 but i'm wondering as we close with this last question from the perspective of the the bridging projects themselves how long do you think this great migration is going to take like how long until we are fully off layer one into this glorious layer two world the bridges are in place people

you know new users on board onto layer two they use bridges to you know hop from place to place and and do their work that way and they never they never even need to touch layer one that is the end destination but how long is it going to take to get there chris what do you think yeah i kind of think it's gonna be uh slow and then all at once uh you know one thing we're really looking out for our token incentives and so like uh lido cohen from from our team has been working on a proposal with uniswap to uh incentivize uh you know more liquidity on layer twos um and then there's this this really kind of uh i don't know if it's called like a if you call it a network effect but it's

kind of uh as more people move to layer twos the the more the layer twos take up the block space on layer one driving the cost up forcing more people to then move on to layer twos and then it kind of has this flywheel effect where now all of a sudden you can't really afford to to transact on layer one because the layer twos are taking up all the block space so you have to move arjun what do you think timeline how long's this great migration going to take um so first of all i just want to say like there it is fully 100 possible percent possible to use ethereum right now without ever touching a lot like that is already available to everybody um we have users in our ecosystem

for some reason and i don't know exactly how this happened but a lot of the users that enter into our ecosystem are like fresh fresh users to crypto who have never really even used metamask before and we end up having to debug a lot of that which is sometimes kind of challenging um but uh what we're seeing though is that like a lot of these people are are kind of jumping headfirst into you know uh the ethereum l2 ecosystem and some of the ethereum friendly side chains and they are never touching ethereum because they're completely priced out um and they're only interacting with l2 applications and that's created this like massive l2 applications that don't never really exist on ethereum would never really have deployed on ethereum but they're just they're just l2 native um i think like

you know as chris mentioned it's like a flywheel effect like it's going to happen and like it it's like sort of every hockey stick where you know you sort of see this kind of like growing like this and then all of a sudden it shoots up because like the exponential effects just kind of kick in more and more um and we are rapidly approaching that um i would say for me the biggest barrier is really just going to be like token incentives really big one and then um uh you know uh it'll it'll be the uh like the the things that drive down the cost of roll up via like bigger batching um uh so you know arbor term nitro um i think optimism you guys might have just on this uh but basically things that

push down those gas costs even further vc what would you add to this timeline what do you think timelines are definitely hard you know being a dev like i i have extremely bad estimations so i like you know definitely wouldn't comment on that but yeah like the graph definitely agree it's it's like going to be hockey stick growth whenever it happens there is there's still a lot of work to do as we all you know kind of uh got to before uh so yeah here's to just like you know hoping it it happens sooner than later uh and you know i think everyone here is is like you know 100 confident that it's going to happen and we are all here you know just like

trying to empower that thing whenever that whenever it happens anything to add here yeah my very cheeky answer is um tell me when uh optimism and arbitrage release their token and i'll tell you when that hockey stick well this is uh maybe we should end with ben then uh you know final thoughts on this discussion then and uh maybe your perspective on timeline too i mean we set up the hashtag guys we set up the hashtag guys it's l222 baby you know you know it's coming no i i feel like similarly to bc i've gotten enough trouble for uh for trying to predict highlights over the years

i think that definitely the most important point and i'm really interested to hear you arjun having this from a bridge perspective as well because i almost think of bridging as being like an advanced thing so it's really exciting to hear that you are getting like new crypto users using it for it's worth fiat on and off ramps are live on optimism today and i think other l2s as well so like it already is the case totally that you can move straight into l2 so i am hoping and i would think i would make that prediction that that is going to drive usage and depending on what happens with the fee markets as well on l1 i think that will just naturally continue to drive that usage so i think big things are coming this year vc is right we should never we should

never put timelines on things but all the pieces seem to be in place the bridging is super nice you can buy the ethon l2 directly all the pieces are really coming together you know the jigsaw is almost complete l2 22 we are building that jigsaw panelist thank you so much for the work that you're doing in the bridging infrastructure we've learned a ton thanks for joining us today thanks for having us thanks guys thanks a lot guys bankless nation the great migration has begun it's going to start slowly at first but it is headed towards hockey stick growth that is the prediction of the panelists i heard at least three of them mention tokens as well and i would just echo these are my words not the

panelists you should start using these systems you should start using everything in crypto because you never know how users are going to be rewarded in the future um risks and disclaimers guys let's close on this of course crypto is risky bridging is risky too ethereum is risky everything we do in this space comes with some degree or another of risk you could lose what you put in but we are headed west this is the frontier it's not for everyone but we're glad you're with us on the bankless journey thanks a lot hey we hope you enjoyed the video if you did head over to bankless hq right now to develop your crypto investing skills and learn how to free yourself from banks and gain your financial independence we recommend joining our

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