Price feeds as public goods

Transcript

[Music] foreign [Music] welcome to this presentation we're going to be talking about price feeds as public goods um I'm Jasper I'm the CTO and co-founder of Ceta Sera is the um foundation for data on web3 essentially it's a horizontally scalable Oracle with sustainable economics that also allows you to Outsource compute um we won't dive into the architecture too much today since that would take quite a

while because it's not the subject but what you are doing today is announcing that we're actually building our own network it's called seta chain it's built on a cosmos stack and we truly believe that this will be the underlying infrastructure that will power all data flow on web3 into the future um yeah and also like the the goal of this presentation is essentially the the subject came up building this thing like this is what we're talking about is something you can build on top of our Network so at launch we will support any evm chain and in the future we will roll out to non-evm chains as well as well um we're looking to launch a public test

net in the next two three months actually yeah well time's flying like one and a half two months with mainnet hopefully uh q1 2024. uh we have a bunch of money that we raised I don't know okay so um public goods infrastructure let's let's kick off like why are we talking about this um take a step back what defines a public good it's uh probably go to something that's non-excludable and non-revelous which makes sense right you have like a good it's not excludable it's non-rival words but the first time I read that I was like what and what so uh non-excludable means something that is hard or impossible to be excluded from using so

even if you didn't pay for it it's something that's still usable to you so I think the clearest example of this for example is a public park I can fly to any country where I'm not paying taxes and enter public parks without somebody telling me hey wait you're not a citizen you cannot be here and the opposite would be like let's say a pizza or something if I don't pay for the pizza I'm not getting the pizza something that's non-river is means that simply because somebody uses something doesn't mean that now one less person has access to it so an example of this for example is National Security if you are a citizen or you're residing in a country that has a public National Security just because you have a

neighbor or neighbor enters your village doesn't mean that you now are less secure depending on the neighbor but um yeah so why are we talking about price feeds like why is this something that's worth discussing well in order to do that let's take one step back and talk about oracles why are price feeds a thing well smart contracts by definition don't have access to data outside of their execution environment to like make that a little bit more clear if you deploy a smart contact on ethereum all it has is access to data that's actually on ethereum it doesn't have any access to real world data or

anything that's not happening on chain so what people have done is they've built um I call them like data bridges that bridge data from The Real World to blockchains and now that data becomes usable because it's accessible to a Smart contract which enables use cases such as Randomness if you've ever minted an nft you've used an oracle circuit breakers to prevent Bridge attacks or hacks real world assets um it literally has in the name real world that means that um you need a bridge to the real world in order to Define what the public access is on chain and make it accessible perpetuals to set a liquidation and pricing and lending markets to set

collateralization ratios and perform liquidations as well and then there's a bunch more and a lot of these requires price feed specifically price feeds are truly a core infrastructure for any divide protocol and not having price feeds live on your protocol means that you're heavily restricted in the amount of protocols or the brevity of protocols that can be built on your network so in our opinion price feed should be cheap easy to deploy in Access backed by sustainable economics because if you're building a decentralized network that should work into perpetuity and you're building it on a centralized service that provides your data that means that a lot of your selling points are essentially down the drain

and rewarding data providers based on quality of data right like fair value distribution we're not seeing this a lot in current Oracle models basically paying the people actually providing the data based on the quality so having like an open market for this essentially and it should be accessible from any L1 or L2 which comes back to the sustainable economics oh sorry to the accessibility it should be a core and it's a core infrastructure so it should be accessible from any ecosystem it's the idea so essentially how have public goods been funded historically um there's like three most obvious ones there's there's a lot

more but like the most like obvious ones would be taxes so if you are a tax citizen somewhere you're paying taxes that's being used to fund public goods infrastructure public goods [Music] yeah uh in general or bonds right you have people that issue certain bonds for large projects uh the darker side of things like war bonds for example but there's other other examples um and then there is companies that turn out to be building public goods so you have for example public radio where they anybody has access to it but they fund it essentially by advertising right so by using the service you are essentially paying for the uh for the service and

then philanthropist and Foundations which is uh another one um all right so what are the parallels between um existing public infrastructure funding and web3 well um I'd say that you could make a comparison between transaction transaction fees on a blockchain and vit you're essentially paying for the added value of having immutable um and deterministic transactions compute being done on your transactions and you're paying a dynamic tax based on competitiveness of block space

essentially for that for that transaction um yeah so that that's one way to fund polygots like ethereum's funded that way for a large part but another part that's more of a hidden tax for eth for example is Mev uh Mev used to stand for minor extractable value since eth pivoted to approval stake maximum extractable value to keep the abbreviation uh is uh is more accurate um and essentially Mev is the amount of money that a validator can make by reordering censoring or including certain transactions into a block originally the picture that was painted

by the people that were early on researching this was that it would be the miners themselves performing computations to see the maximum value of a block right now what we're seeing is that's more done by Searchers and then block Builders so that the sort of like stakeholders in this ecosystem have broadened greatly and are not the same as people thought they would be but essentially the validators end up making a lot of money based off of the Mev in Block certain blocks that takes us to oev Oracle extractable value if we push data on chain as an oracle it creates this new chain State changes of

chain States create opportunities opportunities are being uh taking advantage of by miners or or validators or searchers so essentially what we're doing is we have built something we call data flow auctions so what we're doing is we're auctioning off the right to background uh Oracle updates and we actually like internalize that uh that Revenue now so what happens today is that um you can what happens today is like if there is a price feed update in the mempool there is a bunch of me free Searchers they simulate exactly what's going to happen how much money can be

made and they do like flashbulse auctions to get that Revenue essentially right and we're saying well if we own the entire supply chain from data to network we can actually internalize that Revenue by bundling our transactions beforehand and having the auction done on our Network and that could in theory greatly subsidize uh our Network and made transaction is a lot cheaper that's uh quite challenging um so there is like a very much like a a good thing that can happen and a bad thing that can happen based on this I stole this slide I see Jacob saying uh to take a picture from yeah um so dystopia is oev profits are not

being used to subsidize fees at all uh oev profits are not distributed in a fairway so basically it's the um the validators in our Network are like oh great like we're making a bunch of money of oev we're just going to keep it ourselves and like just just pocket it essentially and since Mev in general is very much volatility driven uh it's very hard to predict and have sustainable Revenue uh projections so it's hard to build trust in the system relatively and the Utopia is that the oev is so high that you can actually query data for free using our Network um and that it's obviously just the opposite of the other point so like oav profits are shared amongst all

stakeholders in a fair way and revenue is consistent and predictable resulting in faith in the system I think I rushed through that pretty fast I don't know how we are on time okay yeah questions [Applause] if you have a question just raise your hands so how sustainable do you think this model if price feeds are actually become free yes compared to we see like the model of chain link I mean they have like crazy fees per query how

sustainable you think this would be well it's very hard like we we're doing research on the exact numbers of oev available and we know it's pretty high um but we need to gain a lot of market dominance essentially to take up enough of that uh uh sort of like pie in order to make it sustainable also on the other side of things in this I also make the assumption that compute is going to be cheaper into the future and like querying decentralized network is going to be cheaper also um so it's it's definitely a long-term vision and you also have of course Market driven sort of like if it becomes free then people can start spamming it and that type of stuff so I don't know how realistic it is but a man can dream hmm

thanks it hello hello hi um yeah so is this part of your sort of Market capture strategy internalizing value so you can offer a cheaper Oracle service is that is that you're seeing it kind of like a flywheel what other what other strategies are you um deploying to Heat against chain link yeah so uh I think in my opinion our greatest sort of selling point is that our data is queryable from any layer one without us having to deploy there um so all you have to do is deploy a smart contract that can parse our proof and our data becomes accessible all you need is one relayer to send the proof over essentially right so that's one so you can eat up a lot of the security on or like Oracle Security on new chains

that we're chaining is not live and that builds reputation and then hopefully over time we that becomes a convincing argument another thing we do is allow for arbitrary compute so when you issue a data request it's sort of like an HTTP request the default State essentially you can add a wasn't binary on how the data should be computed exactly and that can be super super Advanced so you can actually do super Advanced complex computation on our Network that would normally not be possible on a smart contract awesome thank you I'm just wondering so if you're talking about the verifiability is it possible

to expand this like llms by any chance buy what uh expanded like llm usage on the network um it's something we toy around with the idea of like ML and llm on on our network uh I don't know why you would do it but in theory it should be possible to build a pretty crappy llm model on on our infrastructure I think um yeah I guess the Romantic was like essentially um there might be a trend where uh proposals of governance could be like you know kind of just replace or verified by element huh um yeah it's just uh yeah I mean you can also I mean with our system it would be easier to query gpt3 through that that

would be like the the first step so you can query gtp3 to like perform some sort of analysis on a proposal gonna ask you how the consensus mechanism that determine the price determine the update yeah look like yeah so our own chain is a tenderman chain but we have something we call an overlay Network so the overlay network is essentially a network of independent nodes that can be selected randomly by our main Network and they perform the computation and querying um it's like a secret committee

essentially that gets selected by our proof of stake Network then we have a secret committee that actually performs the querying and computation and they then get to consensus using commit reveal um we have some other security mechanisms built in because it's it is susceptible to 51 attacks we have something that's solved for that but I think it would be too deep to dive into right now as of today who are the nodes in the so as of today so we're looking to launch this specifically uh late this year uh publicly uh right now what we're doing we have Oracle products live and that's like a first party Oracle model so it's like data providers pushing data on chain directly themselves

sorry and signing it yeah yeah so the idea uh with that model was essentially that uh we used that to get the market see if our business strategy worked it did last year we grew in seven weeks from zero total value secure to 3.7 billion which actually grew in like no time to the large second largest Oracle and then we came up with like a very large list of reasons why we didn't like that model and we're like okay let's take let's go back to the drawing board and now that we know our strategy works and people want oracles let's actually uh build something that scales right and and fits the philosophy of our space I think that's also core yeah super interesting and I totally agree what the

3.7 million stands for sorry what the 3.7 million stands for 3.7 billion total value secured total value secure yeah yeah yeah so like essentially if somebody would have hacked our Oracle would have been able to steal 3.7 billion that's the yeah in seven weeks that's sleeping under your desk type money you know thank you yeah all right cool if somebody else have questions please raise your hand okay yeah perfect um if no more questions thanks everybody [Applause] [Laughter]

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