Layer 2 Sleeper Leading the Zk-Rollup Race

Transcript

[Music] d5 slate team [Music] what's up y'all real quick if you like the d5 state content on twitter and youtube and sub stack please please give us a like and a subscribe on this video on youtube and join our channel join the community we'd really appreciate it we're pumping this stuff out for you all as much as we can and we really enjoy the support and the community that we've built thank you very much enjoy hey guys what is going on this is defy slate uh with another video today we're talking to the hermes project uh today we have jeff and david um as guests so uh hermes is a zk uh roll up layer two uh they're

all about decreasing transaction fees on ethereum and increasing transaction speed so you know you've probably heard about some other layer twos and hermes is another one to be thrown into the mix here um so i'm gonna pass it off to uh jeff and let him introduce himself and then we will get started on what is going on at hermes and uh everything about ethereum so how's it going today jeff i'm doing great and what about you yeah you're doing well man it's another beautiful day in florida so we're just kicking it amazing yeah yeah so maybe you can tell you know tell people uh kind of your background here and what led you to the hermes project yeah i'm a senior blockchain engineer at hermes i got a look to be invited

and hired by david to to start since uh march to help to hermes grow and create this i think very valuable project for the athenian ecosystem i i used to work for uh with with in paypal as this 2016 when i left to paypal i start to work with the tedium and uh create some kind as i i'm golan developer i was helping to some projects in ethereum infrastructure also create some dapps using solidity and javascript and uh cis or in the i think two months and a half

helping hermes you know to to develop this uh i think this valuable uh project for the teenage system yeah and and before you know david maybe you can explain a little bit more about your background and and how you got started with hermes um a real quick question for you for you jeff was it a big culture shock in terms of the work that you were doing with a centralized team at hermes and and more of a i'm not sure how decentralized you guys are but uh more of an open project on on the blockchain with uh hermes uh i think um was not a i i used i i worked with the other another you know uh how could i say remote projects people from

different places in the world uh i think this is very common in a blockchain world you know uh to general blockchain projects are international uh projects so that's the good part of note when you create adapt you know this kind of your software is deployed and more than 5 000 servers in different servers in the world so um i think the join hermes wasn't that complicated uh it's very you know we have people from i think five different countries in different i think four different time zones so it was kind of a very pleasant you know to talk

to different people with different cultures yeah yeah that's great to hear i mean we we talk to people all over the world with crypto and it's it's uh really unifying just kind of connecting to people all over the world and rallying around some common technology cool so yeah um you know i think you are the founder and uh kind of you know took jeff in into the project um kind of what was the motivation behind the project um and kind of what led you up to this point to start hermes yeah well i'm one of the founders together with jordy and anthony the idea was to just gently convince me to to work with him into the entity project which is called

three uh this was 27 2017 and then we just started to to solve problems with identity and one we found critical was the scalability problem and since we wanted to implement this identity model in ethereum um we wanted to to get some some experience with scalability and by the end of 2019 we had a proven concept of the first uh roll up implementation city lap implementation and we decided to to go for it in in a different model in a centralized model uh written in golang by the mid to 2020 the motivation was to to get this around the

implantation of a roll-up decentralized by by design and also to get experience to to solve the identity scalability problem that we already are trying to to do but um well many many things have happened since we started the project and we have now different challenges we can talk about this uh now but many many topics to cover very interesting point today yeah yeah absolutely um you know one thing i'm i'm interested in is a little bit more technical i guess how uh hermes and it's zk technology differs from polygon which you know really is kind of shown itself as more of a leader of these other l2s

um maybe you could compare and contrast a little bit and get into some of the other um you know topics that you mentioned okay uh well polygon um they are very strong today and uh in a side chain based on plasma if i'm not wrong i'm not the expert in polygon but our proposition here is to it's a ct roll-up which is a layer two solution so this capability solution runs on top of esteem we leverage on all the security that the stadium and in this one model we run some smart contracts and we have also some some protocol not just to to manage this transition of states

in layer 2 but also to have a decentralized protocol to to accept the permissionless coordinators or validators so compared to polygon we are different we're different uh there are many other ways to solutions um grouped basically in optimistic roll-ups and 6k roll-ups and we are part of this cd roll-up environment gotcha and and i i've you know kind of crossed the bridge back and forth between the polygon network and and ethereum's main chain and they still have a delay period i think it's three days maybe seven days um to bring funds from polygon network back to the main ethereum l1 um is that

same the same case for zk technology or um is that only kind of a function of side chains rather than the roll ups yeah this is a problem that the the side chains needs to face uh layer two solutions they are just on top of the stadium in in our case um we have this uh call it a settlement which is a pretty pretty instant we call it the foreign consensus protocol is decentralized so we don't have centralized servers at this point the coordinators um can just be anyone we just can participate into into the consensus protocol and the

transactions are just settled in later on so you need to put the phones and we call it deposit in layer 2 and you can do a withdrawal but this is pretty pretty fast it's called a matter of minutes so it's different technology different model i would say yeah and and the scalability narrative is taking over um i mean i mean we're we're just now starting to see some on-ramps that that are able to process uh fiat directly to l2 which in my opinion i'd like to hear your thoughts um you know that that's really really opening up the floodgates for some more adoption because you know people don't ever have to hit l1 um and pay 30 40 50 for for some sort of transaction um and right away

they they have the ability to engage with d5 protocols on layer two do you guys have any plans to to implement some sort of fiat l2 uh gateway maybe work with some custody providers or you know different exchanges well we have um a plan to to onboard exchanges and what we have on board some hermes is a project that doesn't intend to be kind of a intermediary in the in the user experience we are just providing a decentralized network uh and then we need to build this ecosystem of actors just providing services we call it exchanges we have users we have other wallets we have other

other networks to to connect so probably these services that you mentioned they are very interesting uh for somebody who wants to provide this exchange in layer 2 or bring liquidity on on-ramp and so on but it's not in in our scope we are just just providing the infrastructure and the decentralized network so probably someone else we tend to provide the tools everything we do is open source we open the sdks so we provide all the tools that the other projects can use and maybe these projects already exist i want to do some integration between networks some breaching some some applications and the d5 components it's uh we're just

trying to do something well which is uh bringing this network into into the scene and make this uh happen in a decentralized way and a very convenient way yeah yeah um it's kind of interesting how there's you know lots of different solutions almost to the same problem i'm sure you're aware of that scalability trilemma right where you have three corners and it's it's really where you can only pick one or kind of a sacrifice blend of each of the three being scalability uh security and decentralization um so so yeah i mean it's interesting kind of how these different solutions to the same scalability problem

are popping up um maybe you could explain a little bit more how you found that product market fit um you know how you brought your solution um and kind of offer that value um where it's missing in other parts of the ecosystem so our solution i mean we weren't exploring these scalability solutions like kind of two years ago and it was complex we wanted to to bring something which was transparent to stadium which was also not sacrificing security as you said the trilima is difficult to solve and you know the scalability part we were very keen on the serial

knowledge geordi he's created the silicon language and some libraries to run to run the runtime for the same knowledge we were applying this to the privacy in entities but at some point we thought it would be interesting also to apply this to scalability it was in the fourth of the community some ideas arose and and we were also participating there so for us the ck model where we just process the transactions in a layer two but it is of chain and then we just compute these validity proofs to just it's cryptographic it's something based on mathematics and some i mean transactions are done in a correct way or the proof is not created and you have this rule of transactions between

change of states caused by transactions and this validity proves and validated on chain also we just not not store the proof but also all the data in these transactions so this is the model we believed it was good and other projects that they are doing secure roll-ups they were even faster than us to bring this into the scene and it was very very exciting to to see this in production uh our approach is just to do this in a centralized way from the beginning we thought on how to do this uh trustless you with a need to somebody trust into the operator you know and this was our contribution also we have very uh no big knowledge into this uh serial knowledge technologies and we wanted to bring something very efficient because the first problem we wanted to

solve is the scalability of transactions we wanted that these transactions are really cheap so we provided the cryptographic technology which is the most efficient and and also we wanted also to be interoperable so we proposed some models for this problem of different layer twos and how can the users just move tokens around and we proposed a a solution that needs to be discussed with more groups and uh we will be perfect it could be accepted or also something similar to this but we need to interpret at some point how does this fit into your vision of ethereum uh overall um you know you want to be interoperable with the

different applications um i i've heard others say that we're kind of kind of leaning towards a world where there's uh different layers different l2s or side chains for different purposes like you know games or or gambling or defy um you know it do you kind of see things the same way do you think uh ethereum kind of um takes on more of a uh internet of blockchains type of you know format um where do you where do you see hermes kind of fitting into your vision of ethereum overall over the next few years well hermes is it's a our own proposal we wanted to to propose a different

model specifically specifically for the efficiency and decentralization and interoperability the specific proposal we have we don't know if it's going to be successful or not of course we have our own roadmap and everything is open source we want to contribute probably other groups could benefit from our ideas if it makes sense uh or we have on our own roadmap and this roadmap is very ambitious i would say because we are trying these technologies are very experimental at this point and we are i mean we need to build uh some some castles of co interoperabilities and features and so on so it's clear that there are many options and it's difficult to understand which one is better for what but as you

said it seems like it makes sense to to have this ecosystem of alternatives around ethereum depending on the purpose and depending on the application today we focus on token transfers you know roadmap is also to develop a solution to to run smart contracts from zero knowledge and this should be conserving the properties of decentralization and their interoperability this is the model we have of course these things change very fast because we have new new eips new comes ethereum 2.0 we will see because this is a fast-changing space but uh you know roadmap is just to to bring this

own you know specification and protocols and an implementation um and then we we think we have our strengths we have our differences and it's probably something that we will see in the next months if it's uh some ideas we have make more sense or other other people's ideas make more sense we will see but the project is in development and it's open and it's something it's not written stone but we want this to contribute to doing something that makes sense that provides value and this something is still ongoing your fault may i may i add few things yeah for sure okay so uh i think the as as david mentioned as david mentioned in the beginning i think our

idea is to provide a platform you know so over our platform that we are over an athenian i think uh all entrepreneurs or and other developers other people can create new new kind of stuff and the good part to create a platform is that after people start to use your platform they come up with new ideas or new business that you never thought before you know so i think creative people can uh learn more about hermes and start to create new new stuff so um i think our our idea so that's something that i felt in love and the first time when i started

start to study hermes before to join the group was that wow uh this is a decentralized model that i can scale up but i have a security because i can create a uh um application top of hermes and i don't know maybe something for instance if david decided to do other thing in in his life you know okay i give up i don't want to to work on armies anymore uh the the project the platform doesn't rely on him doesn't rely on on your d the project is are besides to be open source all the data all the the important data are stored in the fitting so the net the hermes can

you know still go on and uh and uh work properly without the the team original team it's a very strong platform so that's why i think uh nowadays even within 2.0 uh i think we are going to achieve uh good things because good people can create nice projects on top of our armies and uh if it's k the athena scale of course hermes is going to scale and so more more good stuff people can build on top of our platform gotcha are y'all a dow uh are you all are you is your project is is hermes a dow like a

decentralized autonomous organization yeah no no it's not a doubt and i mean we explained this in the white pepper we we have plans to to decentralize also the management of the network at this point we are in the bootstrap phase and this phase is where we just uh just test the concepts deploy technology manage the basic parameters we have to to be sure that the security is the right one and the maturity of the network is growing at the beginning also the network needs to bootstrap in number of transactions uh to to become more secure as any other blockchain and also need to to bootstrap the network of uh

validators but at some point um the strategy here is to minimize the the governance here we want to just uh transform every activity that today is done by management uh we need to just decentralize be a smart contract and ideally we will try to to just reduce to almost zero the management and the governance if there are some parameters that can needs to be just governed in some way we will just tap it out but this will be the site some months from now but we still just in the bootstrap phase our intentions uh are very clear as as much as we can

decentralize the better yeah gotcha um can you kind of explain more like how these phases uh will you know roll out um you mentioned you're in the boots dropping phase now uh what is the plan you know for the rest of the boots dropping phase in the short term and then uh kind of the next couple phases after that yeah well the phase is just a bootstrap and the bootstrap is uh we set up the network we just launched uh we are still improving many features and so on on the way we are also testing the the protocols uh they are very new they are very experimental at some point so we need to just set up and test everything and we are just well a protocol works

in a time in time slots so we we have the ways to just set up some some configuration for uh every hour has six slots that repeat over time and we will start decentralizing some of these slots for any permissionless coordinator to just control the network as as there are more transactions these slots will be readily decentralized until they are all decentralized and it's a configuration that cannot be undone so this is the process uh as we grow in transactions more slots from from today is zero that will be six slots will be completely decentralized then the network will be will fly along

they will need to just also change the the smart contracts for the last time to just change the governance and the multi-sigs on control and they will be this is done so what we need to do is to for example there's a process to create uh transistor tokens in the network and we need to to do this automatically for somebody to just pay some fees and the token will be there so these these specific points where we need to do some changes today needs to be transformed um in a way that this will be decentralized yeah and if you can automate the process where it kind of unlocks that new validator um automatically by someone paying a fee um right that then you don't need any manual processes

or anything is there certain incentive mechanisms that you have built into the system to kind of prepare for that um i guess like is there a token coming out is really the question there but um yeah like what what do some of the incentives look like um whether that looks like liquidity mining or or you know some sort of validator reward what do you guys have planned well we actually have a token it's a hermes network token and this token is used for for the validators to participate in the in the consensus protocol which is auction based so coordinators need to to place a bit and the the highest bid earns the right to to just create blocks and create we call it batches so

this is the the use for a token and this token is also used to to collect the value from the bit and this value in the auction is distributed in three ways the one part is burned to avoid the collusion games and these kind of things we other part is donated to two other projects in the community to fund we started with bitcoin but it could be other projects which forty percent of what is collected is donated and thirty percent will be used uh for payment of the bootcase nato initially but then will be zero and it will be used for net user rewards so there will be a model when the users as they go they receive some some rewards to for using the network so this is the the governance will also be based in token if any governance and

this is basically the model yeah so at first i guess it it sounded initially like uh the token might be correlated to gas cost where if there was more transactions validated validators would collect more rewards um and paid out to more token holders but you know it sounds like there's a very wide distribution here going to uh some bitcoin grants other projects um and you know funding other sources where it's not it's not really correlated to uh transaction cloggage really on the network network congestion isn't so much correlated to the token price you mean the hermes token price yeah

yeah like um you know it's not too effective even though it is generating some rewards from transactions on the hermes network yeah the value here the key value here is the number of transactions in the network because this value just uh marks or just a position which is the price of the option the more transactions the more agreement it will pay for for this drive because the coordinator collects all the fees so the parameter here is not the hermes token price it's just a value in the network in general in transactions so this value will also be distributed to to bitcoin grants uh we have already talked with them they weren't even even considering to create a specific fund for this

but it's uh it's open we we are as i said before we don't want to participate in in the governance because it needs to be decentralized so at some point uh this will be automated we are able considering we were talking with the train foundation just in case they can implement a router for for these funds to to decide if they go to bitcoin or somebody or somewhere else depending on the mobility of other funds so we don't want to be in control where these funds are distributed it's something that needs to be managed by the community the the objective here is to to get this value back to the to the community we leverage knowledge one probably makes sense that some value went back to layer one and other projects around the community

to just develop this ecosystem yeah like a community owned layer two um you know not something that is just individually owned even by the token holders but you know goes back to the entire community that's i mean it's charitable and we're seeing more more and more uh you know charity coins but ultimately it i think is part of a greater feedback loop that is ethereum as a whole uh really because without you know ethereum's main chain uh there wouldn't be a lot of layer twos on top of that of course um operating transactions and and adding to that um well that that's great and you know you guys have a lot of things coming up in the future is there there it's live now is there a

lot of applications that are on hermes do you guys have any farms uh like yield farms that are happening on on hermes lair too no no at this point uh academics only supports transactions kind of applications we we can support is just the ones that just provide these token transfers so in the womba we have this uh feature of a smart contact support but it's not ready yet so this is the model today you can integrate and applications that can do micro payments or or transactions they're fine but we are this in the face of the bootstrapping yet and we have this uh integration with exchanges ongoing and also integration with wallets we're

working to grow the ecosystem at this point this is the situation i mean it's like that we want to to grow more and we want to to support more more transactions as possible we also have a promotion which starts next week we have a a campaign for use of the war uh we did an initial air drop i i think it was one month and a half ago for bitcoin donors and now the second the second way of promoting the network will be just for users that they can approach a network and try the service so they can just receive some some value back from that so it's uh announcing twitter and so on so the next thing we will do is to to enable a feature of uh

token swaps so users can just use the liquidity that exchanges on hermes can be can be provided and and these users will be able to to swap tokens uh uh seamlessly from the wallet and a very in a very convenient way without getting into the uh having to log into into these exchanges um it's for non-traders you know so this occasional swaps and this is an interesting feature we can probably we can provide very soon for for users to just uh having more more use cases in canvas and by the time the uh our audience is watching this um which is probably next week or sometime you know i imagine the airdrop is gonna be live so what what are some of the

next steps um that you know someone watching this should take to uh claim you know their portion of their airdrop and then ultimately provide liquidity on hermes uh for for the airshop you only need to follow basic steps which is uh do a depositing hermes just put some some fans there from the supported token list uh you can find them in hermes dot io and from here you you have in the wallet you have a guidance you need to do a couple of transactions and from here you just will see which is the reward you will get so it's the first round we're gonna make more rounds uh depending on the on how this first one is going we will you know change a little the

requirements to just guide the users through through the experience we are we are interested for example if we launch into the token swap probably this reward will be focused on token trap so this is what we want to to do today to to promote the the use of the hermes awesome great and then and then providing liquidity after that just kind of engage with hermes and and they'll be able to provide liquidity for swaps to provide liquidity at this point it's just limited to two exchanges but we are providing also we will provide some some apis and some sdk for someone else to do it at some point but uh at this point is not open we are just developing this today

and once it's released we will share with the community which are the possibilities about this awesome yeah that's great so guys head over to hermes and make a couple transactions so you can claim your portion of the airdrop uh it's been great talking to you guys david and jeff thank you for coming on um is there anything you guys want to add to anyone listening before we hop off i would like to invite the the developers the in that is in audience to check it out our github is github.com hermes network as david said we have a couple of uh very you know armies that amis know this open source other tools related to to zika rollover is also open source

so i invited the developers to you know visit our github use use and uh if you want to collaborate the project is open to prs so send the contributions how is going to be very welcome awesome yeah yeah and i want to have to to what jeff's just saying i think he's very right we are open to collaborations we open to feedback we want to learn from other people's experience and especially from developers so jeff here is a strong person regarding this contact with developers we have set up a couple of hackathons now

there's one open i think it's the the hard money and i think it's interesting if you want to follow us in the social media and social networks also to to just be in contact with us to participate in hackathons and provide fever that will be awesome great all right guys well check it out that's hermes dot io um check out their github and uh yeah click claim your airdrop this is uh the layer two for the people so all right guys yeah