Incentive Structures In Modular Systems

Transcript

for all right what's going on guys uh yeah W welcome back to the rollup uh definitely some familiar faces I think everybody so good to be back um why don't we just go

through some super quick intros uh maybe uh um you know what you're working on and um where you're calling in from if you know mind Sharon cool uh I'm happy to kick things off uh I'm Matt uh co-founder CEO of Caldera Caldera is a leading rollups as a service platform we power uh at this point over 50 rollups um some of the ones you might have heard of like Kinto Manta Sano Etc um and I'm calling in from San Francisco so it's a little early here so got my Red Bull uh but excited to be here hey guys I'm uh Sam gasmi I'm the founder of fra and uh recently fraxel which is a modular rollup uh it has a

fractal scaling road map l3s and unique uh blog space and sets hello I'm phelipe I'm calling in from Brazil uh more specifically Rio de Jiro um with cartesia we are a modular execution environment uh and we have a Linux run time so the idea that you can do app chains L2 L trees uh making use of that Linux run time hey uh my name is Shake I'm the founder CEO of mosis um I'm calling here from Korea so mitosis is an ecosystem on liquidity layer one blockchain that facilitates uh newly created mod blockchains to capture tvl uh through the mitosis govern

process um yeah uh happy to be joining the CL awesome I'm I'm Andy also calling in from at least within five miles of phelipe although we haven't had a beer yet in Rio which is sad um got to get that set up and yeah excited to talk about points um Rob welcome in as well thanks man uh yeah I'm calling from Florida um and so uh feel like everyone's pretty tropical nowadays uh which is pretty cool um and I like to learn about incentive mechanisms at the rollup uh lots of friendly faces here so stoked to get into

it cool let's dive in um let's start with some I think one of the bigger trends of this kind of modular space is this shift from applications to kind of wanting to own block space and to become their own chain um and you know I think that that there's there's a different way to build communities when you're an application on a rollup or on a general purpose Chain versus like having to own your own block space and almost like design that entire mechanism from the ground up uh no one better I don't think than Sam to start here having built fra into now Frack stole um of course uh kind of launching your own chain now as

well and ecosystem of chains um I think like the like the first question here and then kind of opening the floor after is what is what is the the difference in uh incentive structures from daps to kind of app chains and rollups and chains yeah definitely that's a good question because when you're building a chain ecosystem there's actually two things at least in uh my opinion you want to do one is you want to make the incentive structure as as general as possible if it's possible to actually capture the value that you know all developers and and applications have because anyone can build anything on the Chain right you don't want it to be just this manual system of uh you you have to

go and like basically look at everyone doing everything and then just have only the system of you know Grant committees people doing these things by hand and manually you want to basically say hey if your application has uh some objective criteria right whether whether it's tvl or whether it's you know in our case it's how much uh gas is spent on it and and uh how popular the the smart contracts are right with fraxel blog space incentives then you want to basically be able to offer that to everyone in a transparent manner right so that's one of the uh important things and then the second thing I think this kind of probably resonates with um everyone especially Matt at at Calder is like you you want to encourage people to

actually uh launch their own chain as counterintuitive as that sounds uh if they want to actually start off uh by building in in the ecosystem whether there's like fraxel right whether it's uh optimism arbitrum you know uh cessi whatever it might be right and and if they want to actually eventually have their own app chain uh and and the the goal should be to make it possible for them to be the most successful L3 in your network for example this is why we call it uh fractal scaling and that's where fractl gets its name is that we actually want everyone to build anywhere on the fractal AKA like build an app and get get fractal points get incentives or

transition your app to nl3 or any kind of uh app chain that's positive some with the actual fractal Network that's all good and it's all part of the same uh ecosystem so yeah yeah I feel like one one thing that can seem to be an advantage of uh being on a shared environment or is that uh you can survive without having a clear economic structure for yourself right so you can launch an ethereum and you can survive just because people want to use ethereum for UNIS swap so your chain doesn't have to justify its own existence uh that sounds good but in reality you actually want applications that can actually justify their own existence uh and the advantage of moving

to your own chain is that you can uh tweak and and design the incentives to make sense to the use case for the use case that you're working with right so uh if you have like an exchange then you can designed incentives to to have people Market make or like provide liquidity and so on so this flexibility I think it's uh quite interesting because incentives are very hard to uh design and they very use case specific too so yeah yeah I I agree with all the above and I think um you know one of the important things to recognize as well as as Sam was kind of alluding to is like because these are sort of like nested

chains right we have l2s but we're going to have l3s and maybe even potentially l4s down the road all using all these different modular components the incentives kind of go both ways like if you're launching your chain you're probably getting incentives from some folks whether that's the stack providers the da layer potentially the settlement layer maybe a shared sequencing layer pretty soon um like you're you know so you're able to to kind of use those to like start building your community solving those that cold start problem like figuring out a way to Justify Your Existence U as Felipe said um and then and then you're you're basically taking all those aggregating them into your own network with some decentralization with its own differentiated block space and then you have your own incentives to try

to like bring people onto that so like the really cool thing is like it's it's sort of like you know most of the teams we work with they're getting incentives from somewhere and then they're also like giving them out and like that's kind of like where some of the differentiation is coming from cool cool um yeah lots of lots of good points there um and and I think that that kind of even guides us to like the idea of okay so we we are in the in a monolithic system you're you're kind of building a lot of apps on a single chain um and the ideas are different and then you know going into Mods or you kind of expand into more chains uh which you know now we've kind of established the key differences there and um Felipe

prior you raised a good point about kind of uh the differences there so would love to have you elaborate a bit more on kind of what you were thinking about how incentives are are are different in the monolithic systems versus modular based on that on on the first point there and um kind of dive into your thoughts there yeah sure so on on monolitic chains uh the incentives are also unified in a sense right so you have the validators validating ethereum for instance and uh you can like plug stuff in so they validate a bunch of stuff and it's the same incentive right the block rewards and so on uh there are problems with that uh notably vitalic wrote a post recently uh actually he wrote it a while

back but he wrote an addendum recently about multi-dimensional gas which is explaining a difference in pricing for for data and computation for instance uh and they have different incentives and they have different costs and so on and that kind of points to the problem and the more efficient uh aspect of the modular blockchains which is each layer needs its own incentive so the incentive for people to hold data is different from the incentive for people to execute computation and to prove computation which is different from the incentive for people to order transactions and incentive for people to let go of MAV and so on uh so in a sense the modular the incentive structures on modular ACC

systems are trickier because they they're bundle up but they are also more efficient because you can price stuff uh specifically like you can design your incentive for the data layer which is different than the the incentive that you're designing for the execution layer and so on so I think it's a huge challenge but it's also a way to to make the whole thing more efficient cool yeah Rob is is there like have any of you guys looked into me um because Felipe you brought that up and you know something that like I I realized about ethereum Bas layer is that we have um

like the sandwich attackers and the validators that end up extracting some of that meev or even different levels like the block Builders even that stack is getting a little bit more modularized I'm curious how do that work in this app chain ecosystem um have have any of you guys looked into that U yeah a little bit not too much MV is a super complex topic right uh but on app chains I I guess uh you you get a lot of Me by being able to follow many chains at once so you can take opportunities on different app chains uh so if you have Atomic execution for instance then you can uh uh Ste M from from multiple Labs at the same time uh I

I don't think it changes a lot from modular to monolitic to be honest I think you do have more agents uh selling information in a sense but the the concept of me still stands unfortunately that's not something that uh I I think we're going to make great progress on modular at least compared to montic I think it's going to be very similar yeah that that makes sense um but point we do we do make it more more efficient by by unbundling and then pricing things differently and more accurately to what what value they provide yeah exactly just to be clear I'm not a huge uh researcher of me so I'm just like sharing my intuitions

maybe that's something that we should uh debate more often in the modular space as well cool all right well now now that we've kind of set the foundation for how we're thinking about this let's kind of dive into some of the more practical terms here um we've got a bunch of uh of mitosis fans in the house so we're gonna pass this over to Jake and uh talk a little bit about some of the some of the points meta um work that is happening I think um basically up till Ian layers drop uh there we go gito and J we also have a community question for Matt about his profile picture that's coming soon um but Jake passing to you I think for

my opinion igen layer was kind of like the like the Pico top of of of points and sense the sentiment is kind of has kind of diminished um I guess what's your uh thoughts on points and what's your mental model going forward for uh incentivizing usage of different projects you know pre-t toen pre-launch yeah um uh I think we could start with uh on the negative side of point points first and then um elaborate more on the bright side of points on the negative side uh I think points have a tendency of uh proc procrastination of economic

rewards and it leads to the misalign of incentive structure in terms of users and um protocols but I'm not saying that points are bad but there's a clear reason why points uh are being met at uh but there uh but I want to emphasize there's like clear imbalance between individual liity providers uh they want more clarity in terms of what they're getting and for from protocols it's harder for them to kind of uh promising fixed amount of token in um it maybe like a due to the ambigu of how much liquidity that they could

capture or based on the legal issues but based of several uh because of the several reasons um points has been a very um useful tool for protocols and projects including us uh that we don't have to um like promise certain amount of tokens in incentives from the start uh but people to capture um provide liquidity into the protocol and then giving up uh points uh but I think there's like uh um the design of the space have creaded the points meta it's I don't think it's anyone's fault and I just

think that the more uh the recent Trends are uh showing is that individual LPS will get squeezed uh and there will be more um complain and frustrations from Individual liquidity providers so I think there's needs to be a somewhat uh movement of how to fix this imbalance and this ambiguity of incentive uh structure so yeah um yeah I just want to jump in there actually um first I if you think of what points are or what they're supposed to

be right the way that I just think about them is like they're forming a distribution uh right like like things that important and and actually form a market around is a distribution of of something right like like a group a coordination uh mechanism to create a a group of people that essentially creates a market around it right and one of the main reasons for example with like uh fraxel points we wanted to make sure that it was on chain so like you can actually go and see every single smart contract in in users and EA balances like we wanted to actually make explicit what that distribution is no matter when it's tokenized or or whatever because that actually has value right and I

think we're might be one of the few I mean you could correct me if I'm wrong but um we might be the only ones right now and to to actually explicitly have a you know erc20 contract that says like fractal points it's not transferable there's no transfer function but everyone and every smart contract has balances and then you know one day uh the the the whole thing might have a transfer function right um but the idea with it and and I'll actually kind of say this as an side like fra still is having like a huge hackathon and so like there's people building um there's anyone that's you think they can build l3s or daps and stuff and the winners in addition to cash priz they'll get fraxel points as

part of the fraxel point distribution and people will see that on chain they'll see what it was for they'll see why it was uh allocated and I think a lot of the times right now points are like kind of a front thing right like when you earn points or um when you earn blast or like you know any of these points that are the the big kind of meta uh right now I think you just see them right and and like I mean I'm not a big BL like blast or other LRT Farm or something so anyone can correct me if I'm wrong but I I think you just see them and and and then it it just stops there until like there's like a token announcement or something like that and I think that really kind of gets uh it doesn't do justice to the to the growing

um utility of the distribution because it's the distribution that actually gets the the market value when when things can actually uh can trade right can actually move so that's kind of what we're doing with fraxel points like the more holders there are and the more you could actually see them on the Chain yes there's no transfer function yet um the more valuable it actually is because they have the history of all participants that in some way you know contributed earn FR axal points through the log space since then if they won a big hackathon they did X Y and Z and and they combined to actually create a larger and larger group of holders like I think there's probably like thousands uh and thousands of holders for fraxel

points the cool thing is I can just pull it up right now and actually so Sam it's like a it's a transparency thing it's like a it's a it's a transparency of how much you have verifiable on chain but even still in the fractal situation and and you can explain how many are there and things even still though uh the users would be unknowing how much like one fractal point is equivalent to like token or but at least they have this this this point on chain that's like not just like a little like a front end thingy it's EXA exactly and so like right now there's 8, 82 uh fraxel points holders you can literally look it up and

and as you said yeah they don't have everything right there's there's not like necessarily the exact um Supply or like when the transfer function will will like be be turned on and things like that but what what there is is you can consistently just have more and more functionality to it you can also air drop to this functionality right like this this distribution which is powerful and is there a way Sam and Jake real quick just real quick is there a way that there could be a Points Market on for fractural points that doesn't have to go through like whales or a different market like like by putting the points on chain does that make them more fungible than what they previously would be um definitely it gives more

fungibility in terms of um if you make it into a tokenized version but the currently as SE mentioned earlier that the fractal points are not transferable yet but I think uh in the later future when that's uh transferable and I'm I'm sure pretty sure that there will be a market for that as well and not just about I really think that what Sam and Frack team is doing is creating a very good great uh example for how uh teams should uh carry on on their point system but in the reality what we uh are seeing is that many teams can't prepare like transparency into from day one like they

hoped uh they could provide like more clarity in terms of incentive structure and if you create something like the launching points that's that's a very cool function but it's not being uh widely adopted because uh everything should be executed fast in in terms of their uh new newly created teams so uh and the more the teams and the pro projects are coming out it it it gets harder for them to capture like liquidity and I think this is like a really big problem when there's like many different Moder blockchains funning out uh and and on top this the modern

blockchain there are several different defi applications on top of that and they're fighting to capture liquidity and I think uh it will get even more harder um to capture um the liquidity and there's like clear imbalance between and what mitosis is trying to solve is that um as an individual liquidity provider um don't just provide um liquidity into a very ambiguous incentive structure uh just provide with mitosis mitosis provides uh to a newly created l2s or mod your blockchains and get a deal like a B2B style and then we uh sweeten up the deal at when there's

more more and more liquidity inside mosis so uh I think we're what we're doing is a pretty exciting experiment where we try to empower more individual LPS uh that if we move together we can act as a whale and when we act as a ale whale then it means that we could sweeten the deal and we have certain amount more bargaining car in terms of getting more exclusive deals so we can exclusively work with new created l2s and provide liquidity in like six months and during this these six months we can also provide like liquidity to the apps like defi apps in L2 and we can closely

collaborate and during the time we can boost their tvl and boost also the users and I think in that way uh it gives more uh Power for individual out these uh rather than just like providing the qu by themselves and yeah gotcha you've got the uh yep go ahead Felipe just you've got quite the quite the fan here in Halo Co I was just gonna say that I I think it's really cool to to have points on CH I think that the transparency is a a big deal of the current point system uh and

I think points like there's a lot of detractors of points a lot of people say that points are unfair or unsustainable but I don't think points have their places especially when you're trying to devise an economic system uh that needs scale so you can use points to bootstrap that scale and that community and it's also a great way to uh monetize or acknowledge participation right so when a protocol is starting up there there are a bunch of different ways to to help it right not only code not only provide liquidity but as Sam was saying like a hackaton for instance participating in a hackaton is a is a way to help a protocol to reach the scale that it needs to survive or to

make economic sense right and a poter a way to to transform that into like an incentive and then Kickstart a community so I do think uh people are a little bit unjust with points but I might change my mind if the points matter uh starts to to grow a little too uncontrolled as it giving signs right of of doing yeah cool all right good uh good segment there that was uh that was kind of the key takeaways I think is like these like onchain points the transparency going forward of like at least being like as honest and as upfront with users as possible um and kind of like not farming your community you know like I think

that's kind of been like a bad Vibe going on um and so wanting to put that out there kind of Shifting Gears uh we have at least three projects here with unconfirmed uh plans for you know tokens or different kind of incentives down the line um you know we don't need to get too like uh you know too rigid in like confirmations or anything like this um but just a broader question like I'm curious what what you guys think about this idea of like using an A A airdrop as a marketing strategy with specific nft communities um like that that kind of broader meta um as well as just like any Innovative uh strategies that you've

seen from other projects that you know you've liked that you've worked with um or that have happened that you think are are kind of uh a good way to go about it and Matt will pick on you I know it's like 8 am over there but you've been a little quiet and then we can go around sure yeah I mean yeah I mean you know as you kind of alluded to like no no confirmation about any token plans from our end um but just you know saying this is like an observer in the space like I think the the nft community like airdrop meta like is very very interesting I mean a lot of nft holders especially of like some of the OG collections like they're the types of people who like you know

basically there it's like proof of diamond handedness right like they they've you know if you're a punk holder um you know or a an ape holder or uh you know even some of the newer you know Pudgies Etc like sloths potentially like you know first of all you're willing to like buy into a community you're you're you know it's proof that you're willing to either get in really really early on a cool project or you're you know kind of willing to put your money where your mouth is and like buy into something really cool and you know show show strong alignment with the community um you know and also that you're willing to hold that you know kind of like through the bull through the bear um and so I I think it's like a really really interesting strategy when we talk to other Founders um some of whom are our

users about like their um airdrop strategies that's kind of like the um you know like that's that's s like the gold standard of the type of user you want to air drop to someone who's not going to dump someone who you hope will will stay align so um I think it's like a very very interesting you know proxy for that and and candidly you know with hindsight I'm surprised that the space didn't coales around something like that until recently because I think with hindsight um it feels quite obvious um I think in general like around incentive alignment what we're seeing with a lot of the I there's sort of like you know I think like a couple um types of projects that are launching tokens right now they're like the ones that have a strict

kind of like B to to C uh is relationship so like I think these are like the chains themselves I just saw like I think Tao announced the token but like you know zky uh it sounds like is going to do one as well um you know not not no inside info there but just based on public comps um like those projects and of course like things like even igen layer are like a little different from like projects like I think some some of ours right like like on this call where like I think a lot of the teams here we have like a BTO Dev relationship or like B2 uh you know B2B to see um and so it's very interesting for like a project like us you know as we think through like what designs might make sense like you know even in not just like explicit

token designs but also things like our recent Quest campaign like a lot of it is focused around like customer success like highlighting our developers our you know the folks in our community Etc um and I think like you know that's going to continue to be the meta for like a lot of these more modular systems like for a project like you know Celestia for example again no no inside info but like they're very interesting where like the actual consumer of their block space is entirely like startups but they've done a really really good job at positioning Celestia as like this community you tap into with all this you know great usage and and Retail attention and users like um where like kind of aligning yourself with that with that Community will probably lead to to more usage over time

um and I think like that's kind of like the thing that a lot of the folks in the sort of like modular middleware infrastructure space are kind of working towards yeah and I I'll I'll jump in there and and say uh first about your like question about tokenization and and stuff obviously there I'm not going to confirm anything but I just want to say the fractal points contract is like 9/10 of the way there to an erc20 contract it's like literally one transfer function away so like you can kind of gauge uh what that might mean um but in terms of the other uh things so I think Matt said said it uh pretty well the the cool thing is like it's actually kind of like Matt's job as a rollup as a service

provider to proliferate a bunch of uh you know modular stack chains and networks communities and then it's it's us uh on on this call uh the other uh ecosystems to actually build out our ecosystem of you know uh roll up and then you know hopefully likely l3s and everything and so there's there's different types of relationships there right for like the the mainnet network right uh especially with something like fraxel mainnet you want to be the most uh Dev friendly Dev incentives and and positive sum and every way and then you also want to actually remember a lot of the community there eventually can turn into a not just app level you know

player but then they can be the the B2B of of your chain by launching an L3 or app chain right and as as it Things become more modular that's why we have the whole uh fractal Vision right because you can build kind of anywhere on the fractal and like you want to build the relationship between Developers app level you know all the all the defi things and and everything there but also you want to build a relationship where your chain is is known as uh one of the best positive some places to uh connect to in terms of an L3 settlement and and things like that so that that's how we think about it Jake I think this is a pressing

question for you as well seeing as Rob and I have certainly tapped into the Expedition and claimed our Mito points for penguins and sloths and bad kids yeah yeah um so start with uh like our community development um we open up our Twitter profile less than like I think less than three months but starting from zero now we have like 130k followers in Twitter uh and we have uh like near nearly zero marketing budget in terms of like pay promotions or something like that and I

think the clear reason why this uh is happening and why we had a huge success is with collaboration with n projects and and thanks to like they they were very friendly in terms of uh collaborating with us uh we even gave like U like badges in in in during the Expedition campaigns and that be begin the kick of of like very loyal users came into our Expedition campaign and then farm and then uh form the testnet tokens and then after tested their farming maina tokens as well um so we

opened like two epochs like one Epoch was like 3 million second e was like 11 million so inomine we have like 14 million right now and we're opening up our third EO tomorrow by the way and that's like 40 million cap and both East been closed less than like like one one to two hours and the huge success has been driven by I think the collaboration nft uh projects and because of these loyal users have recognized what we're doing um like we haven't spent any budget in terms of marketing and it has been always like a very natural and organic growth from our side uh so I

mean so is there a airdrop we can't confirm on that detail but definitely I'm not going to betray on these uh nftd projects that have really helped our growth in in our initial stage um we were pretty frustrated in terms of like how to grow the community and something like that but when we like um talk to more uh loyal users in nft space we kind of like know how the space works and yeah we we don't have any uh um incentives for us to um make the frustration for the ones who have helped us in the initial stage so yeah so

that's the thing that I can kind of confirm and the one thing that we're doing also is something called a Morse NF project uh that is a internal uh um mitosis nft campaign um and I think the good thing about mors is that we're not selling like we're not like here to sell any nfts I I I've seen like new projects uh they're doing PGE uh that they come up with the NF project they're selling at like some some amount of e and then after that people in the community are angry and Furious about oh um so am I farming the wrong thing am I just like

should I just like buy an and I think the misalignment happens when you sell the nfts and the reason why we're building nfts is that I think uh what we're doing is a very like um cool experiment and on top of the cool experiment we are doing the concept of something called DN 404 uh which we can uh trade uh in a more like erc20 fashion uh so that we can kind of like remove the you know soft hands uh in an initial stage where people who like just came here to farm the dn44 erc20 tokens uh they're was

just going to leave in the like early stage and someone who are diamond hands will like still stay and uh get gain more tokens so that they can like convert that into a an nft and so that is how we um kind of like recognize who's the like actual user and the actual um Community member in matosis gotcha cool yeah that uh 404 standard was is pretty interesting they had that big runup earlier this year um excited see kind of how you guys Implement them um this next one's kind of for for um the three guys who kind of

have these chain ecosystems um being being kind of like like like rollup Frameworks or kind of like R uh Realms and you know Rob and I had this idea where like there should be some sort of incentive mechanism somehow where like the the token holders or the community of certain Ras providers or rollup Frameworks should be exposed to the upside of the chains that are launched within that framework or within that Ras where you know it's it's almost like my argument for like the value of like a Caldera or or a CES or or fra is like if there are apps that go and build

using your your Tech and uh they end up uh you know being very successful that that all kind of trickles back down to being like yo I started on calir like I was built with tesi you know and so I'm curious how you guys are thinking about ways to like align your community um you know whether it be token holders or some some sort of uh community that that you have with also the upside of your of your um of the chains and applications building within your ecosystem um and if anybody wants to take a stab first we can go around yeah I can I can start so I I think it's a good point um in terms of there's a lot of rollup like

framework uh like um I guess programs right there's like the op super chain right the ideas like and and fraxel is part of the super chain in terms of uh fraxel Manet there's arbitrum orbit there's uh all these things right and and like you're saying the idea is like if you belong to any of these or if you were built with a specific role of a service provider if you kind of fit into any of these places you are kind of in this Collective right and so um with fraxel we also have this idea of like if you build anywhere uh that's associated with with frax on the defi layer on on fraxel mainnet or later an app chain or L3 you will earn uh fraxel points and and be part of that distribution in fact

it's almost the other direction you you will you'll earn points rather than you know the the community will kind of extract any fee or value and there's actually tail emissions too which means you know same way as like Bitcoin has these emissions for you know over a hundred years they just get lower and lower right uh fraxel points do do as well right they they don't it's not just an airdrop program as we started off saying we have this algorithm we have the system to continually uh make this distribution of people building on on fraxel more and more valuable by aligning all of their incentives into like years and years and as as the fraxel points distribution gets more valuable so does earning it right even

if the amount of points gets gets less so yeah so that's like users and devs building on fraxel will every action that they take there's there's there's always some sort of of of retroactive reward kind of biged in yeah exactly yeah was exploring some stuff related to that so on app chains you have a problem of a economics right so you have like thousands and millions of web chains and the users don't know which one to use and the validators don't know which one to validate so we actually have a proposal on our vision Forum currently which is quite interesting it's a a cator system in

which you can stake uh ctsi behind an application uh which is a signal that that application is going to be popular and then you can get trickle down value from the application being being popular so we're still it's it's early stages but it's quite similar to the uh graph uh the graph uh token economic system which is super nice they do the this cator things for reader nodes and and and schemas it's very nice but the whole idea is uh aligned with what you said which is uh kind of uh splitting incentives right and and distributing incentives across the ecosystem to reward uh popular applications and

reward users and and and reward reward the protocol from like the popular applications also rewarding the protocol that help them become popular so I think there are a lot of different angles that you can take there we are definitely exploring some actually actually super quick wanted to jump in and say like so the vitalic LA uh published a blog post yesterday that I think is super relevant to this uh question and topic which was like he was like um if you think of sharding right on on the L1 layer which is is is just a bunch of computation and then ZK aggregation and into like the the entire State kind of is is the same thing as the rollup L2 Centric road map

view right he was actually started off the the blog post and and I highly recommend people read it which is like if ethereum had the sharding road map instead of the L2 road map like like front and center uh aren't they just the same thing because because like they all split computation right and then they all like aggregated back to like some state right and he was going through like what is actually the difference right is this charting is it just because like that mechanism is enshrined in in the protocol uh and versus like l2s or smart contracts where like computation happens and then everything's pushed uh onto that L2 contract and the thing he said is um actually more about Innovation and incentive design right because in a in a

sharting Centric road map there's just one way to do shards right there's basically like one uh thing and then if if you wanted to innovate on chards it would basically be up to the ethereum foundation right like if you wanted to have like different Shard execution environments or something else or different types of ZK proofs that that prove the computation stuff you everything would have to be done basically by like vitalic and and the EF right it's kind of like the centrally planned so to speak thing and that that would be uh the opposite of the L2 road map in an economic structure this sort of way right versus with l2s everyone can experiment with different uh you know execution environments different

you know zero knowledge proofs and everything so it's almost like it is a sharded uh like road map but you kind of delegate it out to Innovation and then people can tokenize their Shard so to speak right and I thought it was a really good way to think about it because it actually lines kind of with our our fractal kind of vision and why fractal is named like that because we're going to build fra main net and make it really really vibrant and and everything and then encourage everyone else to build uh on top or on the side or whatever on on the fractal l3s or who knows L4 social uh adaps and stuff in in three four five years from now right and we don't want to actually do too much we

want to make sure everyone's incentivized to do that kind of uh Innovative layer release their own app chain token release their own app token on fraxel mainnet wherever they have happened to be and when I read it I just thought that's actually exactly how we think about it and why we did the the fractal branding and and this cool that metallic is kind of talking about the same way cool that was uh oh there's Jake um yeah Matt just wanted to to to let you jump in there as well I'm quite curious as to like how you see Caldera Community being a reciprocal um like a benefit of um you

know all the success of the CH yeah um so candidly this is something we're still thinking about um I think generally what we've seen in the web 3 space is that like heavy-handed approaches tend to work uh tend to work worse than like kind of more light touch approaches um right like there there is potentially a world in which you know ethereum insisted right like every L2 that like Launches on ethereum like you know it's our recommendation as like eth core devs for them to give you know uh let's say you know tokens to eth stakers for example right or eth validators I I think that like trying to you know in shine those things like in protocol or

at the business level um has some pretty significant tradeoffs um when you're building a network the most important thing is to grow the network um and so the more friction you add to doing that like the you know the the kind of harder it gets to actually get that Network to to critical mass that being said um you know from that perspective our our view is is basically uh to give more than we get as a community right so if we if we build like a really amazing Community with a lot of Highly engaged users then we expect that that things will fall into place um I think like Celestia you know and some of the other uh folks have have done this fairly well where it's like you know you can just by getting that community's buy in you you have an

initial set of users or or you know some Dev some validators Etc and like we want to position our community in the same way like we you know we our goal is to always help our chains succeed and so for us growing our own Community is just like another way to do that and we hope you know as we demonstrate value to a lot of like the chains and the other communities that we work with then like you know hopefully like just you know that'll be reciprocated and there will be you know generally Good Vibes all around um but yeah candidly like I know this is something a lot of people have talked about when it comes to to Ras and like some of these other platforms like Dimension initia Etc I'll be very interested in seeing like how the incentive design uh actually ends up you

know manifesting in the long run but like my guess generally is that you know if you want to build a developer platform you know the the kind of name the game is to reduce friction and like any sort of strict token or distribution requirements I think is is likely to to harm that mission so that's just like my general personal take but yeah very very interested to seeing like what ends up happening yeah yeah and real quick Matt they were they were wondering if you were going to change your profile picture to a SLO yeah so I've I've been so I said I was gonna do it um whenever I say I'm gonna do something I mean I mean what I say and it's gonna happen I guess like Peak behind the curtain is like you know I have like a surprisingly low amount of

liquidity like I I I was going to go out to buy a bike the other day and I realized I didn't have enough money in my bank account when the money like comes into my my bank account I uh you know I'm mostly deploying it into Angel Investments Etc um so I need to I I need to figure out some way to get liquidity obviously I could you know I didn't want to sell any Celestia to buy a sloth that felt like you know a wrong thing to do but it's gonna happen um you know now that I saw it and in the community questions I think that's the impetus to do it um I'll you know I'll make a commitment to the community it'll happen like by this time next week U my my pfp will be a slot that I that I own um but

yeah have been and then real quick as as as well for Sam and Jake we've got um we've got a lad that would like to see frax eth into uh mitosis um so maybe there's some there's some room to spread fra eth even further into The Ether heck yeah uh let's let's talk uh right after uh love to chat and make that happen yeah me too sure cool uh Rob o over to you sir I don't know if I can top a product integration in real time but uh I'll try I mean um no I just I was going to mention like on this idea

of kind of like the rollup framework and and rra like under underlying layer tokenization and then and then what comes up like on top because looking at op uh and the optimism token and then the super chain as a as a pretty good like uh example for all of that like op op ism is a governance token but you don't you know op isn't the gas token and it it's not used to pay for transactions on optimism main net or any of the optimism super chain and so to me it's like and you also don't even see like the the chains on the super chain using optimism as their governance token so

the whole the whole like uh like value proposition around governance tokens was like well if this ecosystem is important to maintain then the stakeholders in that ecosystem are going to are going to Value the governance token so that they can they can have control over how it's governed but you don't you don't you just don't see that playing out and so I'm yeah generally curious as far as like you know you know Felipe Sam Matt like how you guys and I think Matt Matt hit on a good point about like you don't want to stunt the growth of the ecosystem by requiring certain token distributions um but it would also be it would be cool to see some more uh like Hands-On incentivization and uh and like

togetherness of the chains in an ecosystem and then the like more core chain or asset layer in in fr's case of like how that is incorporated into the app chains that surround it more of an observation than like any anything but but yeah Sam I saw you on mute so period yeah so so like definitely I definitely have opinions on this I think the first thing is the the control for value is is was probably pretty wrong because people don't uh and pay for for votes in fact you have to kind of pay people to like get active in governance it's even in trafi right no one votes with their stock in fact there's like uh you know things where PE like companies couldn't get uh Bor you

know things to uh pass because they're just like if if they have too much retail uh stockholders if you've seen those like Bloomberg articles like they can't pass like 20% of of the vote because like everyone on Robin Hood that holds the stock is not going to like randomly vote and and log in uh unless there's like some kind of uh even incentive so I think the main thing which has been my view and why fra Finance the the the the layer that actually is in the defi layer could actually like you know focuses on money stable coins and and lsds and things like that is that the main use of of a lot of these tokens is uh either staking as economic security that currently like

igen layers made that really like explicit with reaking or uh monetary premium which is the the thing basically the fact that these tokens actually are the most liquid in some environment whether it's their chain or or an L2 uh and then having these tokens most likely translates to utility and being able to earn other tokens right because other projects have the lp uh pairs against this token or like you can actually borrow against this token if you know someone launches a lending uh protocol it's like the first thing they integrate that's called monetary premium like the actual utility that this thing uh provides you by being some kind of unit of account in an extremely liquid uh environment and usually one of the most

liquid uh things so I think the best way to say that uh how to make governance tokens valuable which is either like fxs and and fra Finance fra the tokens here or or something is like you want them to be first class citizens of like in an environment where they are the one of if not maybe probably the most valuable and liquid in a in an environment in an economy so to speak and then the fact is there needs to be social coordination on this token is the thing that uh most projects will incentivize right if it's a gas token you kind of have to right actually my my money Centric View of the world is not like oh like ethereum is valuable

because you have to pay gas and you have to like pay da eventually in a multi like L2 world if you think about it like most of ethereum's market cap comes from its monetary premium and there's like 99.99% of btc's you know couple trillion market cap now comes from only monetary premium Bitcoin doesn't even get fees right so ethereum even if you think about for example 20 billion dollars of cash flows from like da payments in a 10,000 rollup world right that calderas and conduits and all these things have have launched let's say ethereum uh makes 20 billion in like eth fees EIP 1559 if you think about it if you give it even like a 40 like 40 p& right like

which is like pretty good right that's like barely like half a trillion right like like that's basically the current market cap right imagine a world where ethereum makes 20 billion Revenue in da which would require like insane amounts of ll2 it doesn't even get to a trillion Mark yet based on like cash flow uh analysis so cash flow uh and fundamental analysis uh is is not how governance tokens get valued right or or like any asset and so encourage everyone to make their asset uh money right it's called cryptocurrency for a reason I think there's probably an entire

another conversation I have about like monetary premium um because it it makes a ton of sense like uh when you start to really dig into the valuations of things that's not that's not what is uh creating the value um and so it's this other monetary premium thing that that's really that's really getting to the meat uh yeah Felipe I just have a very quick point I mean this could be a very long conversation but something that you mentioned that is quite interesting is about op tokens specifically so like op token is a governance token and it's not used for gas which is I I guess it's uh By Design because they the incentives that you have are very different right

like a governance token you're supposed to hold if you care about the ecosystem and a gas token you're supposed to spend if you want to use the ecosystem so if you have both tokens in one then you're actually spending like the people that actually using the applications are diminishing their governance power so it's like very tricky to design incentive but I guess this is like an hour long conversation yeah yeah want to be mindful of your guys time and we have to balce as well thank you so much for uh jumping on uh looks like we have a very important question here from the community really just really type of extremely influential and uh really just top top of the line here please don't

make this thanks buddy all right guys we'll speak to you guys soon and again thank you so much for for joining thanks cheers guys