Polygon: Building a Unified Environment for Value and Liquidity

Transcript

I do think that there are cases in which validity proofs are clearly Superior to a cryptoeconomic guarantee um so if you think about like what's required to to crypto economically secure a system you need to actually pay uh validators to uh to actually restake eth for your service and you need to ensure that there's enough stake um such that the the cost of launching an attack um is is higher than potential reward that you would that an attacker would receive if the attack is [Music] successful hello and welcome to the

protocol podcast I'm Brad count here with my co-hosts Margot nykerk and Sam Kessler so excited to dive into Today's Show with the latest news and developments and technology behind crypto and blockchains first please do not forget to subscribe to our Weekly Newsletter the protocol on coindesk.com and let's get right into it today we do have uh a pretty incredible guest um and I know I always say that but we have had some really good guests lately but an especially good guest today in the form of Brennan farmer of polygon who's one of the top architects of of their Tech and their strategy um and we're super lucky to have uh have you brand

welcome yeah thanks Brad really appreciate being here I I I don't know if saying incredibly good is setting the bar a little bit too high but uh yeah well you're gonna have to meet the expectations let's just put it that way so but all right well Brenan you know just watching polygon over the past few years and kind of rewinding just to kind of get us going here thinking about 2021 and it was just polygon polygon polygon polygon all the time and your token was zooming and that was when you were really working on the P what is now

called the POS chain right uh and fast forward and the tech kind of shifted and but what I've I've noticed about y'all is you you really pivoted with the tech and really have sort of all completely overhauled your game plan as well and I was just I just thought maybe you could talk a little bit about how what is the strategy now for polygon and and you have so many different projects that I see you working on and they're it seems like maybe they're disconnected sometimes or different trying different things but is there a

particular direction where you think things are going that might kind of tie tie all of it together what P got is working on now yeah sure so so I should first specify that I wasn't actually a part of polygon in 2021 so anything bad that's happened uh since 2021 you can probably blame on because all all the all the momentum that we had in 2021 was actually before uh polygon acquired the project that I was working on called Mir um I think that you can look at what's happened to PO since then as being uh like a really high conviction bet on ZK technology so pogon acquired a couple ZK

uh projects to sort of build uh in-house talent that didn't exist uh within polygon at the time um and so I think that you can view this strategy as basically being two things is first like to continue to innovate and to push the underlying ZK technology forward and I think that we've done that very successfully so we released planky 2 which was a proving system in 2022 um that was I would say between 50 and 100x faster than anything that was possible on ethereum at the time um we are almost ready to release planky 3 which is uh a further Improvement on plunky 2 um but on the product side I think that you can view polygon as

basically doing two things like uh deploying ZK powered l2s that's C2 ethereum so basically enabling this vision of like horizontally scalable loock space that scales to meet demand um but we're doing something that's really really important in addition to that which is we're building the AG layer which is designed to fix the problem of L2 fragmentation on ethereum and that's something that we are super super excited about now the AG layer as we were discussing just before the show started it can get real complicated real fast but I I was I just started talking with Margot before the

show and my idea was if you had kind of a realworld analogy to the agay maybe something in the physical world or mechanical world that people might relate to and and what is that yeah that's that's a tricky one so so so maybe give me give me two attempts I guess for all the listeners we've agreed ahead of time that we're going to take as many takes as we need for me to explain this in a way that's approachable and so I don't know what take you're actually viewing that makes in the episode but so the the first example that I would give is something that's physical and I think you can look at it sort of like interstates or like

highspeed trains and so right now we have blocks based on ethereum we have l2s that's SLE to ethereum and the problem is that anyone L2 is not going to accommodate every everything that the user is going to want to do in crypto and so sooner or later they're going to need to take their funds that are on some L2 some region of ethereum block space and they're going to need to move it to another region and right now that requires like 45 minutes of latency to go through the native bridge between two CK rups but with the AG layer we can do that safely in one to two seconds and so this is like connecting uh disperate regions of ethereum black space in a way that

reduces fragmentation unifies liquidity and unifies state um I think another way to look at this is like similar to how the internet works and how the internet evolved um like the internet is a unified environment for information so if I am in the US and I want to access a website in Europe um I don't need to think about like how I'm going to bridge my packet or my request like all the way across the Atlantic Ocean I can just uh type in a URL and all of the complexity of getting data from this other geographic region to me is like completely abstracted away and so I think if we think about like what we want to build in terms of the internet

of value uh like making ethereum like the value layer of the internet um that kind of is what we need is like a unified environment for for value and liquidity in state just to say that uh I think we'll take both of those takes Brendan and uh I'm just going to ask one more and then I'm going to throw it to Margo in learning about the a layer and hearing you talk about it the question that comes to my mind is do you need everybody to buy into the AG layer in order for it to work in other words if it's just if the whole point is getting everybody in that one layer is it by definition it needs to be the only thing

so it doesn't need to be the only thing but I think that there are network effects there advantages in being part of the agare and so I I I think you raise a really good point which is that there's some there's sort of like a cold star problem there might be resistance from other Ro ecosystems to kind of converging on a single credibly neutral uh piece of infrastructure but the way that we've built the agare is very much with this in mind like the AG is designed to allow chains to completely Reserve and and choice and like to to completely govern their rollups and so you're not really giving up anything by participating in the a the AG is like

very minimal incredibly neutral infrastructure that allows us to address fragmentation across World ecosystems and like for us like we don't look at it from like a value capture perspective we're not like charging rollups rent to to participate in the Ager like there's no um sort of like fee sharing or profit sharing dynamic the cures um the way that I would look at it is it's like a positive sum only a positive sum transaction where if you're a rollup that has some economic value on your chain whether you have users or uh value or like some def5 primitive or some like innovation in in in your execution environment you can bring that to the AG and the EG obviously benefits because

you're bringing economic value but you are able to tap into all of the users all the liquidity that already exists on the AG and so I think that you know in the optimistic case uh it becomes a no-brainer for chains even ones that are like nominally competitive with polygon because like like take the POS chain for example there's still like3 billion dollar bridge to that chain there's a lot of activity and usage um those Chains would be able to tap into everything that already exists in the polygon ecosystem um and I think that the result would be a posit some win-win I come for you know this is a great transition because you sort of bring the agay into our conversation a sort that connects all these different mini

ecosystems within the polygon ecosystem right you know we were talking about in the beginning a little bit about how y'all have like pivoted to this ZK road map and I feel like we co ask rting a lot about polygon because there's a lot of stuff going on at polygon in terms of like Tech Ager sounds like this is the future like what you are betting on in polygon but I want to know what is polygon today because there are all these different like I said manyi ecosystems right like you we mentioned the POS chain we've talked a lot about on here about the zkm so just like for our listeners layout what it is what polygon is what this L2 ecosystem looks like would be great to to get your take

on yeah sure so um so I think first is the polygon POS chain which is a side chain that Brad mentioned ear that was was sort of made polygon in 2021 um that exists it has a lot of usage a lot of activity um the plan for that is to upgrade it to a ZK power chain so that it can plug into the AG um in addition to Pon POS we have polygon zkm um that's uh a type 2ish zkm that uh basically presents identical developer environment to the ethereum L1 but it's a rollup and it's scalable um I would say that the current state of the

pgon zbm is um it's I would say maturing I think every rollup has gone through this like sort of uncomfortable period where they launch and then they discover that certain design changes were maybe not the right ones so arbitr optimism did this where um they discovered that it's actually not a very good idea to use a custom uh evm execution client to run your roll up and we actually learned the exact same lesson uh because we we launched the pon Z kbm with a custom evm execution client and so uh in the short term what's happening with that chain is we're completely revamping the tech stack the approver the client um and I think that in the the coming months

we're going to see like a huge leap forward in maturity and a huge leap forward in like what that chain is actually able to do and we're going to be able to drive more activity and usage to it this is the ZK evm chain that you're talking about okay yeah exactly um like frankly we just have not had enough confidence in the majority of of the chain to actually invest a lot of time and effort into um driving usage to it um and then beyond that you get into sort of like some of the other R&D projects that polygon has been working on so um one of these is polygon miden so miden is this really really cool kind of like NextGen execution environment uh it's not an evm um but it uh I I think

one way to look at it is uh it it's trying to answer the question like if you didn't have the evm and you were trying to build like a blockchain from scratch what would it look like and I think that it would look a lot like M um but I think the way to look at all of these projects so uh POS ckvm miden is they're all uh going to be going to like power block space in in the polygon ecosystem and the agare ecosystem and they're going to offer choice for developers um so a developer could build a chain on miden or on zkm a type one or type two zkm um and I think this is a really good thing for developers because

they have like they get to customize and have sovereignty over their execution environment but they don't lose out on like access to liquidity or access to users in the polygon ecosystem and so you know you mentioned that you guys are working on some new technological innovations I think part of that you know we've written about this prover I'm curious though because POS chain was sort of like the core of polygon a year or two years ago right prior to zkm launch um and now there's all these other ZK powered Technologies in the ecosystem and so part of that what what I remembered is that POS chain is going to eventually become ZK combat where does like I know that theover fits

into this but like how or or or it's going to it plugs it into the AG can you clarify that a little bit like when do we anticipate this happening the timeline for the POS train so so I I gu to step back um we developed the type one zkv which basically allows you to take any existing evm chain and generate proofs for it you don't have to like migrate the state you don't need to change anything about how the client Works um you can just immed immediately start generating proofs that guarantee the validity of every transaction on that chain and so the timeline for actually bringing the POS chain and upgrading it to a I guess a ZK powered L2 um is before end of year it's a

little bit complicated because the bridge for the POS chain uh secures a lot of value obviously and and I think we just want to be really careful about the migration of an existing running chain that actually has a lot of activity and and users and so we just want to kind of handle that I think judiciously is the way word sure and but I'm I'm curious too like Mo I bring this up because as y'all have mentioned you're betting heavily on ZK and so this posos chain used to be like the way to scale ethereum so like what is the need for the posos chain when you have all these other chains that like do that purpose especially I mean I know there's like a ton of you know value locked into

this now and all sorts of apps that are probably on it but where does the POS chain go when when all these other new um chains are sort of like overtaking its purpose yeah so so maybe um maybe I'll try to answer that and like a weird way that eventually gets to answer your question so so I think that like one way to look at the development of the agir is it's trying to solve this like structural problem that exists for chains and that structural problem is if you want to launch a chain you you have to do two things so first you have to design uh something like that adds value like a new execution environment um maybe like a new D5 primitive like

something that didn't exist before that you think can fill like a need in the market and the second thing that you have to do is you need to figure out how to bootstrap activity and liquidity and value on that chain and so that thing that you do is you run this Playbook that was initially I think kind of popularized by polygon where you release a token you use the token to uh do liquidity mining incentives and airdrops and and you you tried to overcome the cold star Problem by like crypto economically engineering your way into liquidity usage and this was frustrating because uh we' done this for the POS

chin but now we had a new zkm chin and and we basically had to like rerun the same Playbook where we we had to figure out a way to incentivize usage and to attract value so that we could have uh like a functioning ecosystem um especially in defi that would actually support usage and would offer value to users and so one way to look at the AG is it's like eliminating this problem and this challenge for new chains they no longer need to to think about like how do I bootstrap liquidity and usage on my specific chain it's more about how do I build something that adds value and then plug into the liquidity and value

and uh and user base that already exists in the ecosystem that's built around the AER and so I think the way that I would look at this the POS ZK upgrade is it's less about like how do we make the POS chain competitive with ckvm I I I think P chain will just represent like additional capacity additional block space in the polygon ecosystem but it's really important to take all of the value and the users that are sort of like sticky on the POS chain and onboard them into the AG EOS system and so that's kind of the way that we're thinking about the OV that's really great uh Brandon thank you so much uh we're going to take a quick break we'll

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2024 and we're back with uh Brenan farmer of polygon having a pretty uh incredible discussion about the AG layer just real quick one and then I'm gonna throw it to Sam who has some questions I'm curious one thing we see in this blockchain race is one team comes up with something and then you see all the other teams just immediately race to do the same thing Sam wrote about the the emergence of the stacks last last year and the the software development kit the chain development kits and that everybody had one and it seems that happens a lot I'm curious if

any of these other teams racing to build their own a layers now yeah there are um I think uh I think a lot of like a lot of teams realize that fragmentation is a real problem and a lot of Team realized that like uh a single chain will always be limited in in through poent capacity even if you're able to like really push the limits of engineering and vertically scale like the salana approach you're always going to run into um limits either in terms of throughput or in terms of like giving developers the flexibility to like make different choices in their execution environment that will never be possible with a

single chain and so if you accept that the future will be a set of heterogeneous chains then the question is like okay how do how do these chains like not compete with one another how do we build Network effects around the ecosystem and so I think what we've seen is like the Ager concept really resonates with with the people that are working in the space and kind of understand the the design and and so you know I I I think competition is is really good for for the ethereum ecosystem and um yeah I think it's like not not a bad thing one thing kind of to to this same note but also going back to a question that um I forget if it was you Brad or or Margo um was asking

earlier it does feel like time and time again we have these solutions to fragmentation um and as a result of everybody releasing these fragmentation Solutions we just get more and more fragmented um I wonder how you think about that in the context of AG layer so you mentioned like you know Network effects are obviously going to be a boon to this service um should a lot of people adopt it how do you avoid it from Just becoming another thing where everybody has their a layers and we're fragmented again we need something else um to to layer over all of those yeah I I think that's a really good question um I think the way that you avoid fragmentation is you build a system that is incredibly neutral and is not trying

to rent seek or extract value in the short term and I I think it's fair to say that polygon really stands alone in our approach we're not trying to take sequencer fees like other ecosystems we're not trying to limit the execution environments or the clients that chains can use we're not trying to impose governance decisions on individual chains and so I think that's a good start and I think beyond that um I think it's like you know like like any ecosystem building project in crypto you just need to like convince Builders and and you know allow them to have conviction and confidence in in what you're doing and um kind of so what is the the business this case um for you

all um you're not rent seeking you said in the short term like what is what is the shortterm um uh you know Revenue model for for polygon to build this and then what is the long-term model yeah so so I would say that we're not rent seeking in the shortterm or the long term um okay I think that the the goal is s well sort of the the approach in the perspective I think for polygon is a little bit different because we uh we had you know a fresh token in 20 in 2021 we ran the Playbook that you used to like attract TBL and and maximize the value bridge to ecosystem and I think the prospect of doing that again like didn't really make

sense I I I think it's like a fairly in efficient uh process and um you know it doesn't lead to like long-term durable value that's created on your chain necessarily and so I think for us like we just had to figure out a different approach and um I think that like our perspective was it's much better to be like part like a slice of a growing pie than it is to try to like you know create a world in which all crypto activity like occurs on your platform I think you know I I I think there are some like options for Value capture uh in the long run

that like within the ecosystem um but I think in the short term uh we're very focused on like being aligned with other chains to join the agir and like the our own chains that we run within this ecosystem like assuming that they will grow as the ecosystem grows so I imagine um it does seem like in general it's almost we mentioned Network effects in a different context but it is a game of networks where just like with Facebook um even like with Amazon when it was like sort of more of a loss leader um for the it's always a game of just trying to get users and then figuring out later on how to monetize those users do you feel like crypto has kind of been plagued plagued

isn't even the word because it is like an early IND we're early in the industry but are are you worried that we are kind of in this weird sort of like Turf battle where it's like okay layer twos um now the layer two race is over it's kind of shaking out we We'll add a new layer um but if layers don't work then we're going to add like some you know service like some some you know block building service or an analytics thing on top of it it's all people are trying for Regulatory and for financial reasons to be that they want to be the one that is like the funnel um how do we get out of that or is that just the game forever and ever maybe that's just business I don't know yeah so I I I think the way you put it is is kind of perfect and

lines up really well with how I kind of view the dynamic in the industry I I I think that projects are really really focused on like short-term value capture and establishing modes and I think like largely to their detriment so I think the way that we avoid capture by any single entity is to create like competitive marketplaces like everywhere on this deack and so um I think like uh like sh sequencers and and uh like coordination infrastructure will sort of exist on top of the agare and we will facilitate a lot of the um the cross chain interaction that we see but it's really important that like those projects don't become the like you said

like the point in the funnel where like all the value is extracted ecosystem and direct it to a certain project and so I think like I I think we have some idea of how to do this at the execution layer and at the coordination infrastructure layer um but I think like establishing coordination or establishing competitive marketplaces for Block building for sequencing for execution I think that like we can kind of see how to do that but I think it's really important to like build a crypto ecosystem in which that happens and then maybe to you know top this all off but take it into a different direction you mentioned block building um that's something I'm personally really really interested we've talked about it a little bit on

this show but I'm curious what you know um I actually don't know enough about Ager and your approach there um can you just kind of like give broadly an overview of like what is that Marketplace and is me still the same kind of a force as it is there um as it is on on ethereum and and other chains yeah so this is a great question and it's one that Brad might have to uh to cut me off if I get too too technical but um uh yeah so so the way that I would think about the AG is like the AG is sort of this like cryptographic infrastructure that's basically enforcing that by the time everything reaches ethereum it's all like safe like all like Crush interaction is consistent

this shared bridge that allows for asset functionability across chains is like respected and and you know is is protected um and so above that you have uh shared sequencers which basically allow uh a proposer that's building a particular block on any chain to be shared across multiple chains and so this is really important because it unlocks the ability for a single proposer to basically delegate their proposal rights to a builder and a builder like doesn't look like uh sort of like a validator on ethereum it like a builder might be extremely sophisticated and professionalized and like have a huge like compute capacity

and and ability to to execute transactions across many different blocks um but what this enables is for blocks to be built simultaneously by this Builder across many different chains and so a user can do things across many different chains um in a way that feels like they're using a single chain so they could have funds on some chain and and want to like commit an nft and sell it and take out a flash loan and do some Arbitrage and like some like really convoluted degenerate def5 thing that they can only do in this model where where they're Builders um I think that the to your your question about market dynamics I think that there's

this sort of concern uh but I think it's a superficial and and the concern is okay if we have uh really high requirements for Builders to be competitive doesn't that reduce decentralization doesn't that isn't that sort of like against the ethos of crypto and I would say no because decentralization kind of matters in different ways depending on like where we look for it so at L1 uh you want a ton of L1 validators because you want uh you know the system to be resistant to uh a tax and and to sort of be like democratically um uh like run and and uh and and very impervious to like sort of

capture and and monopolization and all these things that really matter at that level of the stack but if you look at Builders um we we're already getting censorship resistance from the L1 when we talk about rollups and so what we really care about in the Builder Marketplace is that it be permissionless and that that it' be like reasonably competitive and by reasonably competitive we mean that like there are enough actors that are participating in building blocks that are bidding against one another that there isn't really the potential for a single Builder to extract rent or or to act as a monopolist uh in this Marketplace and so I think like the way that the Builder

Marketplace evolves will be really really interesting but I think it's a mistake to view it like from the same perspective that we view Len validators know I wanted to sort of circle back to some of the other stuff we were talking about earlier with uh polygon and specifically the polygon ZK evm chain there was the news recently that it went down on I think it was like a weekend uh for 14 hours like it was like a Saturday or Sunday and I well maybe you can explain to our listeners like what exactly happened but also what are you guys doing at polygon to ensure that this doesn't happen moving forward we seen chains go down for a few hours and we've talked a lot about that on here

you know like salana and some of these other l2s but um you know polygon is a pretty big has a pretty big presence in the ethereum ecosystem um and so yeah like I just sort of want to want to get your take on on what happened over there yeah sure so I think it's like a good rule of thumb for anyone building the ecosystem to never like I try to like well I I I not try I like I have never like uh sort of celebrated when other chains go down because I think it very much feels like there's this Dynamic where like you might be next and we've seen a lot of l2s that have had availability issues um a lot of old ones and I think that we were just exposed

and and some of the technical decisions that we made were exposed particularly around um the use of a customer client and so we had an outage um that lasted for yeah I believe 14 hours and was eventually um remediated uh in terms of what we're going to be doing to to fix that we're going to be completely changing the tech stack and and everything from the prb to the client and so like the zkm that we see three months from now will be completely unrecognizable from from the current product and um yeah I I just think that there's this tension where you want to release a chain uh into on mainnet and

because you want to get data and and and you want to get like uh some information about how people are going to be using it in the real world and so I think there's always a tension between like technical maturity and being able to launch on Main net and get that data um and I think that we're just like going through this kind of uh sort of like well trodden but also painful process of uh like fixing the ISS issues that we found with that chain and um I think we're nearing kind of like the end or at least the end is in sight um for that but uh I would just emphasize that like the level of technical maturity will increase really really dramatically the

name in zkm is mayet beta right like this technology is still very much in its like nent phase um but at the speed of how crypto works and blockchain works it already feels like you know Dogg centuries or decades ago let's let's settle on that but um so how you know like you said that this is that the development of this kind of technology is going to be different in three months time from the Lessons Learned now how do you sort of precaution users uh who are you know playing around with this technology um that this is like this technology is still in it's you know has still has many gaps and and then how do you square that sort of with this what sort of you know this whole conversation

that we've been talking about that your team is at the Forefront of this like Cutting Edge new research technology that's still untested um or hasn't been tested through and through necessarily so like what kind of precautions do do you all have in place to to sort of warn users like yeah come use the chain but um you know that there's still a lot of hiccups and and hiccups is a light word I guess I use yeah I I made a 14 hour hiccup is a pretty um I think uh I think it's two things so I I think first it's like really being honest in our messaging about like what we view as the technical maturity and and kind of the the state

of maturity of the chain um and so we've done that by calling mnet Beta And by like prompting users with uh warnings when they bridge to to ZM um but I think more importantly it's being honest with ourselves about what we view as the risk and the technical limitation of the system and guarding against that with uh with like what we call training wheels so basically precautions that even if the approver is broken or uh there are some issues that might allow an attacker to steal funds we have those guard rails up so they can't uh effectively take advantage of those uh of those bugs and and and uh put user phones at risk and

so I emphasize that like an outage is really bad but it's uh certainly less bad than user funds being stolen from a bridge and uh no user funds has been stolen from the zkm bridge and and I think that's uh in large part due to um to the precautions that we've taken with training wheels um I think in terms of the like how we Square this sort of inconsistency and tension between like being really successful in the R&D side and then having like I think less success and less technical maturity on the implementation side um I think it's just sort of completely different uh

skill sets so like the issues that we've had with zkb have not really been ZK related at all they've been related to the technical decision to use a custom PBM client and that's something that I think everyone at polygon wishes that we could go back and change um but we have just had to to work on remediating that um uh over the past few months and and this year but um yeah I I think it's just like like for us internally as an organization fixing that pipeline from uh technical R&D which I think you know most in the industry would agree that we're we're pretty good at and like actually ensuring that we're able to build stable and successful products hey

brandan you mentioned the training wheels and that's a concept that comes up a lot and um if I read correctly when this happened it went to the Security Council is that right yes and that's a that's a group of humans who make a decision right and I was curious is that the first time that group of people has been called and I'd love to hear kind of how that worked and practice you know did you have to raise people on their cell phones in the middle of the night how did you Corral people how how did it work in practice when that was called on yeah so so I and my team were not

involv we we we have not been involved thus far in in the actual production engineering of the zbm so we work on on the R&D side and you know eventually our our work will be incorporated into into zkm in the near future but um I think it was basically what you described which is uh the Security Council is composed mainly the majority are external to polygon and so it was just about reaching them explaining the situation and uh ensuring that they could sign off on on an emergency upgrade got it okay thank you uh I had another question maybe completely out of the blue I don't know if you've gotten this

one and it may not be a well formed question but we had shiram Kanan of Igan layer on last last week and his vision or their vision of how the ethereum security gets extended seems to be a totally different setup right from the l2s connected by ZK proofs or the the fraud proofs and the optimistic rollups and I'm curious is is the the L2 vision is that in competition with the igen layer liquid

reaking Vision or reaking Vision or do they work together yeah that's a really good question so um so I would say they're not necessarily in competition and so there are areas where reaking can be uh like an augmentation of uh like a ZK powered ecosystem so like the latency for ZK proof generation is still uh like long enough where you don't want users to be waiting on or or chains to be waiting on proof generation in order to move forward and so in certain cases you can imagine services like um like espresso is a shared sequencer that that

is planning on doing something like this where uh you can use uh igen layer resters to uh basically provide finality um uh at lower latency than proof generation or ethereum finality um and so that's an instance where I I think the two can be complimentary um I do think that there are cases in which validity proofs are clearly Superior to a cryptoeconomic guarantee um so if you think about like what's required to to crypto economically secure a system you need to actually pay uh validators to uh to actually restate eth for your service and you need to ensure that there's

enough stake um such that the the cost of launching an attack um is is higher than the potential reward that you would that an attacker would receive if the attack is successful and so if you think about like from a capital and efficiency perspective this is actually uh like much much more expensive than just the cost of proof generation which is actually very very low um and so we we've already seen instances in which like sort of a like a cryptoeconomic alternative to validity proofs actually ends up being much much more expensive than just using validity proofs in in the first place and so a good example of this is um like optimistic grups have a 7-Day withdrawal period and this

withdrawal period I think is very adverse to users because they have to have their funds locked up um they're holding a volatile asset that they can't uh move or or can't access um and so obviously what most users do is they they exit optimistic rollups via third party Bridges and so this is bad for two reasons first uh they're trusting the bridge to um to not be hacked or not be compromised which uh I think is is not an ideal uh scenario but the second thing is like the capital cost of exiting thirdparty Bridges if you look at the the total that users have paid on third party Bridges and arbitr um it's

actually like 35 to $40 million in over the the lifetime of of the chain and if you compare that to the cost of just generating proofs for every transaction on arbit it's actually like 100x smaller than uh than than paying uh liquidity providers and and like sort of taking this like cryptoeconomic shortcut around having validity proofs and so I think that they're like not identical but similar cases uh for reaking versus uh poity proofs that's super interesting and I think we're gonna wrap it up pretty quickly here Brendan but one more Margo obviously was writing day in

day out about the recent Denon upgrade on ethereum and the EIP 4844 and the new blob market and we're sort of still in early days of seeing that and uh I don't know if if if that's your area in particular but I'm curious what's the PO on perspective on kind of how it's working out so far yeah I mean it's not not really my area of of expertise um but I think so far it's it's really promising it's managed to to reduce funds in in a really meaningful way for for rups um I think that uh like as we see more organic usage and and you know hopefully um like L2 usage in general

increases pretty dramatically that I I think we will see fees start to hit capacity limits um for for data availability but um I think the road map toward uh toward charting da and toward increasing capacity on ethereum is is a really important part of of skill all right uh thank you Brandon really really appreciate you coming on with us and answering all of our questions and uh dialing it in for us and our audience and that is is a wrap for this week's the protocol podcast and we would like to thank our producer Michelle muso and our Booker Mel monz that's it for this

week thank you for listening to the protocol podcast if you have any questions about any stories or comments please reach out to us at podcast coindesk.com subject line the protocol you can listen to US Weekly on coindesk podcast Network or wherever you get your podcasts also please subscribe to our Weekly Newsletter the protocol on coindesk.com Brendan are you subscriber to the protocol newsletter of course well I think I think so I I I should be all right thanks a lot see you next week