SVM on Ethereum?! Bullish or Bearish $SOL? with Neel Somani, Founder, Eclipse

Transcript

Solana on ethereum that is the question we explore on today's episode with a new product release as well this is an opportunity to pick into a topic we haven't yet touched on on ethereum which is a virtual machine that Solana has called the SVN that's the Solana virtual machine so proponents have said for a long time that it's much better than the ethereum evm has multi-threaded execution lots of bells and whistles that ethereum doesn't have and now on today's episode we're finding out that it is coming to ethereum in the form of a layer two the eclipse mainnet is what it's called that is the layer 2 that is launching

today with the svm embedded and eclipse is not only a new layer 2 on the scene but it's an entire framework kind of similar to the optimism super chain uh Network as well so this poses a lot of interesting questions as you might imagine that we're going to dig into today including who wins is this a is this a W for ethereum is this an L for Solana or maybe the reverse uh what does this mean for the future of our industry a lot to unpack on today's episode I would even say that a lot of ethereum people will say that yeah the svm the Fantastic piece of technology and it is better than the evm especially when it comes to the things that virtual machines do which is execution there's

some massive questions that this brings to the table and I'm about to ask them but first I want to talk about our friends and sponsors over at layer zero who have a brand new announcement on the scene this came out of permissionless Google cloud and layer zero our partnering together to help thread together 15 different chains across the web3 ecosystem so what does layer 0 do it passes message messages across from change and chain what does Google Cloud do well it is the service provider the Oracle that does those message that message passing is the default Oracle for layer 0. but if you don't want Google you are free to also pick your own Oracle uh you could do if you could just like Google

um how Google is the default search browser for many browsers Google is the default Oracle for layer zero there's a link in the show notes if you want to find out more layerzero dot Network and there and so that is a call to action there there's a link to the channels there are some big questions on today's episodes and so we have the uh the founder of the eclipse Layer Two his name is Neil simani uh and he's going to be jumping on the podcast in a minute here but David we're going to be unpacking four different protocols all right so it's not just ethereum and Solana they there are a few others as well that are woven into this layer too so what what are listeners for what are the big questions to prepare us yeah the

question doesn't stop it is this ethereum versus Solana ethereum or Solana Celestia and risk zero are also relevant here and I think one of the questions is like the big question if we are investors in this space trying to invest in the future we want to ask the question who wins what are what are these components doing together and does some of these components win more than others what does it mean to win and or am I just using this lens of winning versus losing because that's my lens for all blockchain system and is that even the right lens so the the first question I think we're going to get get at is does the Solana VM as an ethereum layer 2 is that a bigger win for ether than it is for Seoul the Solana Fanboys in my

mentions are convinced that this is the ethereum protocol moving closer to Solana but the layer 2 soundtrack take is that all good execution Tech will eventually settle on ethereum liquidity and security but then what the hell did Celestia have to do with this equation and what's risk zero doing there uh so this is not just a question about like the tug of war between these two cooperating competit competing protocols but what does this mean for the modular thesis at large uh so some very big questions and I think uh I listened to Neil samani over at the modular Summit back in ECC and some some of his talks around the space and I think he's got some of the answers so we're going to ask all these questions to Neil here in a second but first a moment to talk about some of these

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introduce you to Neil somani the founder of eclipse a project working to bring the Solana virtual machine the svm to ethereum today Eclipse has announced their svm mainnet the first Eclipse layer 2 on ethereum that uses the svm as its execution engine but ethereum for settlement and liquidity is that is that a curveball well it doesn't stop there because eclipse is also using Celestia for data availability and risk zero for fraud proofs so Solana's execution environment settling on ethereum with eth has its gas using Celestia for data availability and then security offered by risk zero fraud proofs my first big question to you Neil is what the hell is that what is this who even allowed you

to play what did you create what did you create what is this I love this image this is amazing thank you this is the uh what the hell is this family guy meme for the for the people listening on the podcast it's like Noah on the ark and there's some kind of hybrid animal like a giraffe elephant like well I don't know what that tail that is but some kind of hybrid animal that's been created like the Platypus yeah that is awesome uh David Ryan thank you for having me yeah so Neil let's let's where did this idea to put four different networks together come about and maybe talk about some of the motivations here so the original idea was just to put salon on ethereum and that was the motivation behind eclipse and what we

ran into was just a ton of constraints and things that you'd expect to be true for a virtual machine because that's how it is in the ethereum world so an example is like chain ID when you switch your meta Mouse wallet to another ethereum chain or another evm chain then they actually have like a well-defined mechanism for doing that another example is there's no Global miracle treat for Solana so the lack of these Primitives means that that initial idea was not so easy to implement so we basically implement we had to add in Celestia or risk zero out of necessity in order to make this possible wait so you had to add Celestia and and risk zero like it wasn't an option to just do a layer two um I think so it depends on the amount of transaction volume that we end up

running but at our projected amount of transactions uh ethereum da would just proved to be very expensive and it would also lack a lot of the benefits of the salon of the on which is that you're going for scale meaning that you want the transactions to be really cheap so right now it's like the base cost for writing 200 bytes to ethereum is about 15 cents so that would that would be like much more expensive transactions and that opens this up to a junk from the salon Community which is like oh we're much cheaper than you by doing it this way then we can actually be competitive on price too I I want to get back to to why Solana because that's the the big question why the svm right but before we do just really quick um yes data availability is very expensive in today's world however there

is some hope we just did it release an episode earlier this week with um with Dom from eth research on um blob space and eip4844 where the cost of data availability for Roll-Ups is going to drop quite significantly or maybe let me just say rephrase that and say the availability of data availability is going to be uh increase massively through the in the form of these blobs does that change the calculus at all for you or is it kind of the same it's still more expensive than something like Celestia it definitely changes the calculus yeah given that it's a fee Market we have to see where that fee ends up Landing so I want it to be live but yeah there's great research going on in the ethereum community for scaling

DNA we're watching it closely and we have Ambitions to eventually just be fully on ethereum uh and just use that for GA as well okay well let's talk about the the big thing here so the Solana virtual machine the svm we've not done an episode comparing the svm versus the evm um we've been thinking about doing one this maybe gives us a little taste of that can you tell us what is what is so great about the svm why do people um some people you know sing its praises and seem to prefer it for certain things the way to think about it is uh by starting with the evm and just understanding the failures of the evm so far in scaling ethereum and I think that if you ask a lot of the researchers in the ethereum community scale is pretty

much the biggest issue but it feels kind of redundant for me to be saying that because everyone's talking about it yet the way that they've tried to bring scale to ethereum is just by taking the evm and uh and turning into a roll-up effectively but what's nice about a roll-up is that once you've decoupled execution consensus settlement and DN is that you can make that executionally or whatever you want so the issue with the evm is that it's single threaded as it exists right now meaning that all the transactions get in a single file online they're executed one at a time and that means that if there's a big nft drop for example then that's going to really spam the network and there's no way to get your D5 transaction in unless you're competing with all those other transactions that are online but what's nice about a parallelized virtual

machine is that you can execute those transactions concurrently given that they're not touching the same piece of the state so that's what the Solana virtual machine primarily brings and it's the most battle tested VM in the sense that Salon has been around as opposed to moving over some other parallelized version which are much newer and that means that you also get the benefits of the existing Solana code base any existing libraries that are written for the SVN and we can take all those and immediately ported to Eclipse so that's the the main reason to use aspm which is just scale and scale is an inherently maximalist take for a roll up to claim because we're basically saying that if you have one SPM you don't need all these other single threaded VMS around it yeah so one of the um reasonings I've heard around the evm is that while the

evm does execute because that's what virtual machines do it was not built for execution it was built for the ethereum layer one uh and that has prioritized other properties uh and while the evm has had a ton of just Network effects the open source Network effects around the evm are super super strong I think in this day and age in the year 2023 uh one of the things we're seeing is that the network effects around the svm are growing sufficient Tailwinds that Neil I think what you're saying is that well I can feel safe that there is sufficient momentum in the network effects of the svm code base that is going to be a an alive code base moving forward into the future and so it is going to be the

execution virtual machine that we can deploy to ethereum because if we have a role of centric roadmap we aren't beholden to the evm on layer twos is it this is my interpretation is this about right yeah that's right and what's cool is that it actually goes beyond just the existence of the sbm per se it's a bit of a misnomer because the svm is actually the Berkeley packet filter and virtual machine and that's been in the Linux kernel for like decades so this is a very old virtual machine and it has RAW support Ruskin compiled to the byte code and there's a few surrounding extensions that are pretty battle tested as well so we're taking all this existing wealth of Open Source Code and just repurposing it as an ethereum ml2 how much better is it Neil like yeah I would argue if it's like orders of

magnitude like 100 a hundred times or some something some ridiculous magnitude or faster yeah okay so like if if we take a roll up with the exact same stack you're talking about but um rather than the svm we have the evm versus what you're doing with the svm how much better is yours you're saying an order of magnitude like times yeah it's always tough to talk about throughput because the reality is it depends on what are the state access patterns like if everything let's say every transaction in the svm was accessing the same piece of State then you actually can't beat sequential because that that's just like a the fact what databases right you'd have to impose if it was a six muscle rights let's say so then you have to lock the trade you have to lock that piece of state to execute the

transaction then do the next one then do the next one so you're not saving anything in this sequential case but assuming they're all touching different pieces of state which if the crypto thesis is right we're gonna have all kinds of applications doing all sorts of different things and that's effectively what these evm Roll-Ups are mimicking if you look at op stack the reason why people are deploying these a lot of times they cite dedicated block space but that's exactly what the SPM already solves for so our thinking is why fragmented liquidity fragment the user experience make them switch networks it's looking like a mess already but uh you can prevent all that by just keeping it all in the same chain okay so one of the I guess the Bold case for the evm is basically I don't think anyone really prefers it for its uh execution prowess

and capabilities they all prefer it because of the network effect it's because we started with the evm a whole bunch of apps were built and now we could just very easily Port those apps to uh roll-ups that's kind of why and I guess with svm it is you're you're making the case that it is much uh like better for just kind of the execution layer type thing and you're still taking advantage of some of the network effect that that Solana has has built as well I I want to ask a question here because I'm not sure I fully understand this but about like kind of different fee markets and and resourcing um how do how does that work so is it the case inside of your roll up that if there is a big nft drop or some sort of app that is consuming a uh a large

quantity of the block space inside of eclipse um is that somehow isolated or segmented or is there some kind of um bifurcation of resources between another layer localized fee Market is yeah this is this is a term that I have not fully understood but I know our friends on the Solana side really purport this as one of a main virtue of actually a Solana is like these localized fee markets tell us about that yeah it's critical and if you've looked at Arboretum lately fee is still spiked substantially on Roll-Ups uh if they're single threaded and that's because of that exact reason that you're mentioning the global fee Market if GMX gets a bunch of activity then everyone suffers

as a result but economically that's not actually really the way that it should be because there's this negative externality to GMX being imposed on all the other apps but really it should be constrained to not want to know so it's as if you took all these Global fees and you just concentrated it on the one app that's actually causing on the on the hot spot or a state hotspot as some of the folks in the honest I will describe it as uh then you just uh everyone else can just keep like merely happily uh walking along and they can execute on other cores so it's really a property of the scheduler within the validator because in every validator they have to somehow decide what order am I going to process transactions and they're saying everything that's accessing this piece of state is going to all go on a single

core and everyone else can use the other course and and there's no contention on this so Neil this is really just a statement uh the design philosophy of eclipse is just a statement that it's a bullish statement on the growth of the svm network effects so maybe in this day and age if you were like optimism or arbitrum you're going for this thing called ethereum equivalence just then they are making a statement that hey we are bullish on the growth of the evm network effects and the I mean Network effects of different virtual machines can grow independently it's not in either or but what you're the philosophy of eclipse is saying like hey there's the svm network effects are going to grow they're going to grow a lot uh we want to take that and couple into

whatever the value is of being a part of the ethereum ecosystem that's my like synopsis of this yeah I'd even argue that evm Network effects have proven to be not so important and I think it made a lot of sense initially a few years ago when you had polygon and BSC launching but if you look at the types of apps that were deployed there you get like sushi swap which is effectively a 4 work of unit Swap and now I recognize they've deployed even to like ethereum but those are the types of apps you often get and it's rare that those apps are actually net new whereas by bringing the svm to ethereum I think we're actually going to see net new applications in the ethereum ecosystem just given that there's a lot of apps that just couldn't exist without parallelism exceptional women order books being a great example we've seen a

lot of decentralized physical infrastructure networks on Solana so we can bring those to ethereum as well uh apps like that I think are going to be more interesting to me rather than porting apps that already exist certainly okay so that was the execution environment of the eclipse project remember when we live in the modular world that there are different modules so there's a few others that we're going to go to I want to go to the ethereum module next um ethereum is directly enshrined in the eclipse Tech stack the ethereum bridge enforces the correct ordering for Eclipse transactions can you talk about the significance of this like what what is ethereum providing to eclipse what is the what is the ethereum module doing here yeah so what this means concretely is that an eclipse full none includes an

ethereum flona so an eclipse phone number is also watching ethereum it's looking at that bridge and that bridge has significance and how the protocol operates meaning if the bridge gets rolled back the bridge gets reordered this all influences the eclipse full none and it will also get reordered there will also get rolled back so that's that's what it means and there's a second more subtle aspect which is that we use ethereum for gas or we use ether for gas and that's an important fact because that increases the money in the rest of it and we could have we had the option to deploy our own token and use that for guests instead but we recognize that everyone in the theorem ecosystem already uses ease there's a ton of it and people are looking for things to do with that so we wanted to keep that intact and use it for a gas

blockchain too so how similar is that this is what makes Eclipse a layer two how similar is it to other layer twos that that we know today versus kind of different so one one categorization is it an optimistic uh Layer Two or is it sort of a ZK Layer Two that might be one way to look at it but there are probably others can you classify it with respect to the existing players that people know about what's weird is because this Solana VM settlement is so different from evm layer twos the terminology might have to change a little bit and I have some thoughts on that later but uh but in general I would describe this as this is an optimistic roll-up that uses some

zero knowledge technology it uses some serial improve in the optimistic settlement so that's that's what the roll-up is as it exists today and moving forward there's a route where we could actually become a full zero knowledgeable on an optimistic roll up because there's some sort of fraud proof window right you're not using kind of like ZK to do sort of all of the uh you know all of the that side of things there's a there's yeah we don't prove every single transaction got it okay okay so we have uh so this is a layer two uh an eclipse node and contains an ethereum node which is the bridge uh ethereum enforces correct ordering for Eclipse by proxy of all of this that me this means that like the assets on

ethereum the liquidity on ethereum have a direct and open pipe into the eclipse ecosystem does this mean that Eclipse gets ethereum for security or is that the fraud proofs element of this so security can be thought of as safety and aliveness so the fault proofs are basically providing execution safety so if something gets executed incorrectly then the fraud proof will prevent that from being settled to the bridge and users should really look to that bridge if they're figuring out what's the last correct state of this chain that's that's the truth and and that's the canonical change the full note yeah there is like this trustless bridge type concept then yeah that's the critical part of the particle yeah yeah

and of course like the main Poll for being on ethereum in the first place is I'm assuming just it's the most secure decentralized chain with all of the liquidity and all the assets like that's the simple cases or anything else to add to this I think that's exactly what you want for subtle man yeah beautiful okay I feel like that checks the ethereum Box relatively quickly unless you have anything to add around no I'm just uh it's fascinating to me this decision I'll just make a comment to use um eth for kind of gas rather than a native token and uh we we might come back to that but of course I'd imagine you have to like Eclipse has to pay taxes denominated in ether right you guys are at the end of the day buying some block space from ethereum so that element certainly makes sense uh yeah

and I'll just comment that's a interesting uh design decision and certainly uh you know one that is commendable uh I think in many ways so I think the the this part in the conversation I think is that really relatively easy to people for people to wrap their heads around take the Solana virtual machine put it inside of a layer to settle on ethereum but we got some extra curveballs um Celestia for data availability so now we're bringing in the cosmos ecosystem uh so why not ethereum for data availability uh why not now and then also why not ethereum for data availability even considering post 4844 proto-dink sharding like what's the thought process behind Celestia for data availability so Celestia when it goes mainnet will be

the most advanced scalable block space that exists right now for making transactions available so that was the and the reason for that is one if you just look at the amount of bandwidth available on ethereum you can pretty much upper bound the amount of transactions that can be posted in by like a few hundred transactions right now and then of course the the thing that I don't want to ever like bet against research so that's why I don't want to write off saying like oh we could never use ethereum for DNA because you know research happens in like this exponential way but but as it exists uh it's just a little bit cheap constrained and that's exactly what's the last year has been solving for and Mustafa actually wrote the original data availability sampling white paper uh and he co-authored that with metallic and what they're basically doing is as a

user you can verify yourself whether a block is being withheld and the more users are doing that the more block space philosophy can provide so that's their path to winning which is that there's this critical network of facts around the more people are using Celestia the more secure it becomes and the more available becomes and and for that reason Celestia might just always be ahead of whoever is the next best in DNA so even with Proto dang sharding 4844 and then even with full dank sharding given the fact that Celestia achieved some sort of critical mass of adoption there's a world where Celestia can even outpace full dank sharding because full dank sharding has a lot of scale um but what you're saying is like word jury is still out as to the race between Celestia versus full dang sharding as who can provide the best bandwidth

exactly like what was last year's biggest advantages right now is that they're about to be live and no one else is there right now okay is there a trade-off in your mind Neil about you know on kind of security here so um in this entire episode we've we've called what eclipse is doing a layer two notably rather than a roll-up and this is because there's some recognition I think in kind of the the ethereum community in general that hey in order to be called an ethereum roll up you actually have to do not only your settlement consensus on ethereum but also the data availability layer right the da on ethereum as well and so that's like you know dankrad uh posted this and you know I think it certainly this idea has some Merit and the idea there is um

in order to be given the title of an ethereum roll up then you got to be doing everything all of both of those layers on ethereum and so the the notion that this is uh you know comes with increased security is certainly present there do you see that as a trade-off or is that not something that you are worried about for eclipse or is Eclipse just optimizing you know somewhere else on the on the trade-off landscape so it is technically a trade-off uh I I will say that we're doing everything we can on ethereum just to start but the trade-off is back to those properties of safety and liveness so in order to create a fault proof you of course need to have access to those transactions you need to run them all yourself you need to identify which one was invalid and in order to do that uh you have to look at

whatever layer one those transactions were posted to so if they were posted to ethereum then you haven't really added any additional trust assumptions that ethereum is behaving correctly but if you post a Celestia theoretically the Celestia validators could collude they could they could sign off and say yeah we got the block but then they just don't give it to you so to me that threat is unrealistic in practice we could have like theoretically made this into a millennium or something like that where we post the blocks to some centralized GA or some DAC or something and that I would say is a very different point in the security spectrum because the DAC really quickly that's not that many entities that would be required to say we're going to withhold the block whereas the full L1 blockchain with slashing uh that that's a little bit harder to to imagine and let's talk

about the other side of this equation so the benefit of this and how you've laid this out is how cheap are transactions going to be on Eclipse so it's hard to say for sure because D.A is always a female market so because Celestia is not live we need to see where that fee Market lands but based on our projections it's going to be comparable to Solana comparable okay and and how what are Solana transactions going for these days guys it's like um yeah okay yeah so I want to talk about the economics that um are created as a result of this choice so settlement and liquidity come from ethereum ether as gas there there are economic Tailwinds behind ether there Celestia for data availability uh

instead of using ethereum for data availability so Celestia is capturing some of ethereum's uh value capture if you will how can we think about uh who is splitting the pie here between ethereum and Celestia when you choose to use Celestia for data availability so I think it's the difference between money-ness and quote-unquote value flow so if you look at the cost of a transaction the majority of it typically doesn't go to Da in the case of no conjunction if there's congestion that a lot of it will go to the execution layer uh similar that's what causes the fees by said I was referring to an arbitrum what their Global fee markets so so that value of course just last year of course the cost of operating Celestia is much higher so as far as what's the validated profit it might end up being like even

close to zero uh after you've accounted for all the costs of their bandwidth but uh given that ether is used for gas then we're all like transacting things and ether we're denominating our nfts and ether I think that's probably the bigger piece of value accrual for a token in my opinion so that's that's how I uh how I think about it and then of course there's a critical dependence on ethereum uh for security so just given the fact that we're just posting to ethereum periodically with the state route well it's not really state route but with commitments uh that's uh that's a that's one source of value flow onto ethereum okay so put you're posting data to ethereum it's not a blob in 484 it's just it's kind of is is it called Data it's in the call data field uh so the data that we posted ethereum

is uh that's State Route has actually been to a Smart contract okay yeah I keep saying State Route because that's how what it is for an ethereum role for an evm roll-off but because there is no Global Market free for our rollout uh it's not quite that instead it's like a commitment to what the output of the transactions are okay so previously when we think about these things in um uh what we will call normal roll-up land like optimistic role of Slayer optimism arbitrum they we talk we the way the meme that Ryan and I say is that layer two's by ethereum block space um but that's less true with Eclipse because you're buying Celestia block space for data availability um but you're still buying sunblock space because you're doing something you're updating the state of uh a smart

contract the the eclipse smart contract on the ethereum layer one like I I know like rough numbers are always hard to ask for but how do you like how much gas is that basically how much are you paying ethereum is the question I'm trying to get at yeah well one other like critical place where we're paying gas is for all the permitting anytime someone puts money into eclipse or takes it out uh it's like a hash time law contract the way it's written right now so that that costs money they're anytime I mean that's true for any asset if you want to do forced inclusion so it's hard to ask I mean that depends on what's the gas price for ethereum and right what's the price of getting a block space so it's hard to estimate that but compared to compared to like an optimistic roll up

today that's you know I don't know last I looked at this all of the Roll-Ups um in general were like uh consuming 200 to 500 each per day or something like this um for a deal there's going to be a fraction of that yeah mostly so if you look at it like optimism like op stock if you I think it's worth separating the DEA cost and the settlement cost and the da cost is is the vast majority of that of that 200 if you were mentioning uh and then settlement is yeah I mean like one tenth of that if even settlement's actually a small fraction event in terms of just raw cost but I I don't know if that's even what's valuable for the I I don't want to ever say like price of anything but I I think the reason why ether is so valuable is because we use

it to pay for so many things and that that's the that's the fundamental benefit of it it's gonna play a critical role in our ecosystem yeah one of the models that we say for the layer two um for um 4844 for uh proto-dink charting and full dank sharding is that ether is making ethereum is making a trade-off with its own layer twos where it is extracting less rent from them by producing extremely cheap data availability for these layer twos so it doesn't have to consume that much gas to post blobs um and it the trade-off is that while it doesn't charge much to be a roll-up post 4844 it gets to be money in all of these networks and so I guess extending that logic um Celestia gets to capture the value flows is what you're saying is why you

say it flows I'm assuming it's less he gets to capture the value flows the bulk of the buying of the block space but ethereum ether skill gets to be retained as like the money of um of uh Eclipse am I on track here I think that's the right way to think about it yeah what's fascinating about this conversation is because I feel like we've been trying to um describe the um the animal that Noah has just brought in the The Ark over the last like you know 15-20 minutes and how long we've been talking what's so fascinating about this and I love it by the way is because I think this is going to break crypto Twitter's brains because do you know how we're all always so divided in terms of tribes right and here's Neil uh saying I've got this um this layer two called

eclipse and by the way ether's money Solana has the best virtual machine Celestia is the best data availability layer and by the way it's not an optimistic roll-up or a ZK roll up it's something in the middle right you're just gonna like I don't know if everyone's gonna love you or you're just gonna piss everyone off but I know you're gonna confuse a lot of people with with this approach and uh it makes me so happy honestly yeah I'm pretty excited about it too and it's going to force people to also think a little bit more about like what are the security assumptions what are they what do they actually like about each blockchain I I think that's a really good reevaluation especially in the roll-up landscape there just hasn't been enough innovation in my view like all the evm Roll-Ups kind of look the same

and I'm glad to push the frontier on that can we ask this last piece so um risk zero is um being used for fraud proofs I believe and our first exposure to risk zero was just a couple of weeks ago and this may be an indication of how fast the space is moving so I only just learned about your project yesterday Neil and uh you know that's how much is going on at you know at the moment which is a very exciting time for building in crypto but um what is risk zero doing for uh Eclipse how is it helping you yeah so just take a step back risk zero is a very ambitious ZK UVM and in general ZK VMS have been very constrained it's like they just want to

prove some bespoke program they want to approve a virtual machine that's restricted to crypto like the evm but risk zero took a ordinary virtual machine or which is risk five and they're DK proving any risk Supply program and what's cool about that is that risk 5 has been around before blockchains but there's also that there's so much stuff written for his fund so you could just take these existing rust programs or whatever you want compiler to respond which almost everything does and run it there so what's weird is that the Solana virtual machine doesn't use risk fly by code but what we've effectively done is we take a BPF bytecode which is a salon ovm by code we output risk 5 by code we proved that compilation and then we execute it within risk zero and this way we can

prove that the execution of a transaction was done correctly and we'd say these are the outputs and here's a little small piece of proof to show that it was actually correct and then that's where we use risk zero four so the reason why it's relevant for fault proofs is that if you want to say that something is fraudulent rather than re-executing that transaction on ethereum which should be very difficult given that um the svm uses pre-compiles and stuff that doesn't exist in ethereum uh instead we just generate the ZK proof let me just pass it to ethereum we should say here's the bulletproof Union that it was executed incorrectly and notably uh one of the most the popular um optimistic rollups on ethereum Arboretum just got their fraud proofs optimism still TBD which means bass still TBD uh and then in comes Eclipse

we're like oh yeah we've got like this super ambitious uh ZK fraud proofs here we go we're already ready for them and yeah it's live it's kind of nuts surprising yeah and I think maybe like Ryan talked about all these different tribes that are now confused here I think that if there's one thing that is definitely the absolute winner here if assuming that you know eclipse is uh achieves its division that it wants to achieve is the modular thesis uh which actually doesn't isn't any One Tribe uh there are many a handful of tribes that are all modular like ethereum is a modular Network Celestia is a part of the cosmos modular ecosystem and it's providing a module of data availability so no one tribe works but the idea of modularity I think is unlike

categorically taking the Dub here would you agree with that Neil definitely yeah this is a very modular Maxi type uh if that sentence even makes sense given the modularism isn't really like a maximalist it's almost oxymoronic yeah oh yeah I actually I recently read uh Anatoly of Solana being described as a Single Shard maximalist which is the first time I've heard this so so maybe there's a counter to the modular maximalist well they just yeah um yeah I'm calling it integrated now they have the no starting podcast actually someone on my team wrote a really good response Sydney uh against the whole integrated blockchains piece and there's all sorts of things you can basically only achieve in the roll-up

world so that that was the premise of it yeah sovereignty being the big one yeah that was that was a great piece I didn't know she was on on your team um okay so there are a few more things that we want to talk about uh this is not just a layer two this is not just a single network but Eclipse also is coming with its framework so just like the op stack or arbitrum orbit or the ZK stack Eclipse has a framework that is bringing to the table which means there can be multiple Eclipse chains but a question that comes to mind is like well I thought if we're using the Solana virtual machine I thought we just needed one execution environment so I want to ask you about that and then also there's a roll up as a service component of eclipse the company and so that is

another vertical that I want to talk about and then I want to get to ultimately Neil the the big question of who wins here who wins we have four different projects in various loose competition in cooperation with each other I think everyone kind of wants to know the punch line is like all right who even though we are definitely growing the pie somebody's taking a larger piece and so I want to unpack that conversation as well but first i'm going to talk about some of these fantastic sponsors that make the show possible metamask portfolio is your One-Stop shop to manage your crypto assets and to tap into D5 all in one place and the most important part of that experience buying crypto obviously metamask portfolio's buy feature enables you to purchase crypto easily without going through centralized exchanges designed with you in mind you can fund

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go directly to D5 with uniswap Mobile Wallet safe simple custody from the most trusted team in D5 download the uniswap wallet today on iOS there is a link in the show notes and we're back and now we're going to open up the topic of the eclipse super chain should I call it super chain Neil or is there a different word that you have for this I almost feel like it's an anti-super chain because super chains imply many chains at all being connected whereas I feel like it should all be on this one chain so okay that launched today is is the chain that you're saying well we don't need more of these things just use this one yeah there are cases where it makes sense to have your own chain and it

comes down to things like ownership if you want to be able to fork and upgrade it at your free will but in general most applications I feel pretty much belong on a shared chain and that just arose from the fact that we've deployed a lot of app specific chains we actually got to see those unit economics firsthand we were the ones paying the cost and we were just like this doesn't seem to make sense given the value of the transactions that are being run on the trend so I'm confused here so is eclipse going to be just one chain or like a no so it's a framework uh it's it's our the eclipse team is only going to own this one chain as of now okay uh but we do have a roll-up framework that anyone can deploy you can deploy your own instance of it and it's built in such a way that

it's easy to do that and even swap out the modules and we've actually dog food it with a few folks as well why would you build a framework then if yeah so it's because we didn't anticipate that it would be so scalable we thought that it was going to be like 100 chains or something initially or thousands of chains and honestly just through our experience we realized it wasn't needed and it also just wasn't practical okay so the idea here is that there's the eclipse the eclipse Maxi take maybe that we're going to get some Eclipse tribes now is that uh there will be like 95 plus of economic activity on the eclipse networks on this one dominant mainnet chain and then there will be a splattering of app specific Eclipse chains that just want to have their own

home base not unlike the um maker Dow Rune conversation that got started not too long ago about maker down forking Solana to have its own app specific chain things like they could just use this roon could just use this framework well I think roon and and I think they wanted to make their own layer one specifically but for people that don't want to go that far and still want to have some tie to ethereum yet still use the Solana code base they could use eclipse is this right Neil so we are chatting with maker to be fair there's a way together but we don't have any uh you know Rin I'm sure already has a pretty thought through vision of what he wants to do uh but but yeah that I I think that's the right way of thinking about it and in my opinion it's just

that there aren't that many whales that could justify their own change I think bass is a great example of a chain that makes sense they absolutely should have a chain and we can see the results of that they've generated millions in Revenue already they haven't even been live for that long but how many coin bases really exist in the world right right yeah okay so you think there'll be a small number of um layer tubes then not uh you know hundreds of thousands of of Roll-Ups out there and layer twos out there I think we need more scalable Roll-Ups and if we have scalable Roll-Ups then we don't need thousands or at one time I saw someone say we're gonna have millions of Roll-Ups I was like this is getting truly out of hand that might that better than me I might have said that

well one reason why I don't like it is just aesthetic reasons I just think it looks pretty ugly they have a bunch of these like tiny little chains and then you have to have shared sequencers and you have to like prove the bridging or the liquidities everywhere you've got started to be chained someone posted a tweet of their metamask wallet and it was like 40 chance and they're like can made a mess please have a way for me to search chains like this just shouldn't be an issue it seems like an anti-pattern and just just to be clear on what's shipped today so what ship today uh on mainnet because you mentioned that Celestia isn't even on mainnet so obviously yes you're not doing the da with Celestia right now so what's ship today on eclipse and what can people go do so right now it's so right now what's

live is actually the test at and the main architecture is announced so that's going to be shipping later this yeah exactly got it so testnet now and then when is when maynet when mainnet um I I don't want to um say it publicly yeah so it's all but yeah weeks not months kind of uh it's on the order of yeah it's on the water weeks yeah okay so we plugged up the intro sorry for bankless listeners that feel right to buy that um almost to hold your breath amount of time uh okay so Neil I want to get to the uh who really wins here conversation four different protocols I'll have components of their protocols being used but not no one protocol has all the protocol being used so how do you think about like the winner and losers of

these of these systems so I think the most obvious benefit is to ethereum right given that ether is being used to denominate everything and it's being used for critical security properties I think value flow to Celestia is a pretty big win especially given they're about to be mean that so having a big roll up on there and having some value flowing in is gonna be really valuable for them Solana is the one that's really tricky because there are indirect benefits to broader VM adoption that's true there's also risks that are incurred because of course projects can move from Solana to the Rolla uh you might have folks that um that maybe they would have been

forced to use Solana before now they can bridge to this via this trust minimized bridge and stay on ethereum and just get a lot of the benefits so that's that's definitely a question mark uh they have that you know that like there's like BCG growth share Matrix there's like a question mark where it's like we don't know how this is going to turn out I think that's where I'd probably put my answer um for for this kind of thing one difference between the eclipse and Solana is that Solana is is further down on the decentralization scale um and Layer Two is famously don't have to be decentralized in order to actually fulfill some of their Vision that's one of the reasons why layer twos are layer twos is because of fraud proofs ores or trusses bridging Etc

um you actually can be have your The Operators have a chain be centralized because you are checked by ethereum so how does this dynamic between eclipse and Solana change the game here because I would imagine eclipse in terms of uh Hardware nodes running the system there's much much fewer of them than than with Solana how does that change the the numbers in economics and game here yeah that's right there's thousands of validators for the Solana Network and so while while I don't want to commit to like specific numbers in terms of like what's the resulting dollar amount you get the it is correct is that the fixed cost of eclipse is 4 000 times cheaper than Solana as an L1 because there's only one you don't need four thousand dollars so uh that that's true and I also paid like when people talk about

Roll-Ups and decentralizing their sequencer because that sounds like a bad thing yeah it's just it's not an important conversation because what they should be talking about is what are the security properties right today and that's much more important and if you get all the same security properties it doesn't matter if there's a component that's centralized I will say that like three uh sequencers like a handful of sequencers can make a ton of sense but when people say decentralizing the sequencer they're talking about like yo spread that all around the globe like smear that ice cream all over that or screen that cream cheese all over that bread that's the weirdest metaphor I've ever used um small number of sequencers to preserve

uptime and liveness and still retain like the vast majority of uh execution um and costs right and latency yeah exactly and the really the only impact is to liveness because let's the risk is what if the sequencer just refuses to include your transaction but what's good about Roll-Ups is that's exactly what the cutah bridge prevents which is you can submit the transaction there directly it doesn't matter if someone wants to censor you so and the downside there is that of course we submit to ethereum directly it's going to be much more expensive so there's there's like a cost imposed on online on short-term liveness okay so I I want to make a you know a statement here and um the salon tribe might sort of hate this but so so I'm just absorbing this right now and I

kind of feel like this is good for the svm as a technology so that's a huge dub yeah this is a win for the svm and again we're you know contingent on Eclipse being successful and all of these things right but we we know you're you're going to be doing uh major things and this is going to be a very successful layer too that's the contingency a win for the svm but a loss for Solana so everything that you asked for a soul where Solana is for me kind of like Soul plus the svm that's not what Solana Soul token holders care about dude they care about the same thing that token holders do which is like they want to propagate they want their investment they want Soul number to go up so sure Solana as a concept has won just in the same way that you know

modular has won but can I invest in modular coin do you know what I mean like it seems to be a because what you're just what you guys were just talking about which is like this decentralization that Solana has versus eclipse and they do have a much wider validator set and they're much more decentralized than eclipse and of course that's because eclipses outsourced its decentralization settlement consensus layer to ethereum right and it doesn't have to pay those costs so what you know what one kind of group is is holding up as sort of this is an attribute we're a bit more decentralized that's like a millstone because that's a massive cost of running the infrastructure right and this is this is why maybe your statement Neil of a you know modular uh Centric

maximalist is is kind of coming true this is what the modular bulls have sort of predicted is that the economics of running an execution layer uh as a layer two on top of something like ethereum a far outstrip and Far outpace what you can do uh independently as an alternative kind of layer one execution layer so it's it's really I I do very much see uh all of the different Roll-Ups and all of the different layer twos and Eclipse included it's execution layer against execution layer that's really really where the competition is in in that world and so my conclusion is that this is actually a win for the svm

but potentially a loss for soul tokens and for Solana and I know the Solana community may not like hearing that but um wow that I don't know how else you interpret this can someone give me the counter to that or maybe not on this call maybe maybe that's a follow-up episode there's no question there yeah okay cool I'm just making sure I was gonna get I wasn't sure if I should give commentary on that on the record do you want to give commentary on that have I said it I think that well I don't try to predict token price that's something in general I don't even look at prices I have like a ton of crypto it's not about price it's about value capture yeah so I mean of course like there

isn't really any activity from this chain on that translates to the salon right it's like if you run a transaction around Clips nothing happens on Solana as a result so that that part I think goes without saying uh but yeah it depends on whatever whether it's good or bad is the same as whether maker deaths proposal or is good or bad for Solana I think meaning that maker down is also proposing a separate chain and the salon communities seem to like that right so I think well however they receive that should probably be how they treat the eclipse is what I think do you think that's gonna happen you think they're gonna receive you with open arms here the crypto tribes would love to reinterpret any news as positive for them that's part of the game part of the Arena of crypto Twitter to be fair to

Fair total Ambassador into collapse so he's very like grow the pie I think uh in his in his thinking Neil is there a BD person at eclipse or are you guys all Engineers right now we have our chief business officer Vijay who is head of beauty at uniswa of he was head of media dydx he has some great plans for bringing liquidity to eclipse and we're going to be supporting D5 protocols in a pretty big way so that's going to be a big emphasis for this chain so isn't one of like the biggest ways that Eclipse wins is to convince Solana apps and apps and consumers to migrate to eclipse I think there's a lot of reason for them to try auto collapse but the similar to that point about evm compatibility like

that go to market tactic I think it's a little bit I think it's a good initial Tailwind but in the long run I really want to see new apps on Eclipse just like true Innovation on on the ethereum side especially in decentralized physical infrastructure networks I used to be a quantity to set it all in the Commodities group so I do a ton of physical stuff and in particular like all these energy related projects I think are really interesting so I talked with those guys all the time what's fascinating to me about this project too is um a lot of people have said oh this the Solana should just become a layer two on ethereum right this is that it's been very clear that uh Solana is not going down that path or at least not right now not entertaining it I mean that that seems pretty clear and so

they're not doing that therefore someone else is like the white space will be filled by a market competitor right this is very darwinistic you know evolutionary type social pressures where the space and the Gap will be filled and you're doing that exact play now you have to start with a blank slate where you have no kind of network State no apps and you're building from the ground up but it's basically that play You're executing Solana as a layer two on top of ethereum and you're watching that experiment play out and that's kind of interesting yeah I think that's true with markets in a really weird way especially in crypto where eigen layer is another good example of that where people are like I

want to do more stuff with my eth that isn't necessarily enforceable on Chan and I don't want to change the ethereum core code so that eigen layer pops up so like you can restate your AIDS and we can have additional slashing conditions I think that kind of like avoid filling happens in the ethereum landscape more than anywhere else so no token uh planned or like what what ever I'm using eth for gas like what's the story here as of now the eclipse mainnet has no token doing this all without a token and of course I guess costs are low right you don't have validators to pay in the form of token issuance because you're just paying a little bit for Celestia block space and uh ethereum block space

then yeah that's what's cool it's like a small business in the sense that like it's a small like maybe I phrase that weird in the sense that it's just like profitable from day one every transaction pays for its style unlike a layer one where they typically have to inflate the hell out of their token that's just not how Roll-Ups work so it's a big advantage I feel like now we're at a different um stage of the cycle than we were in 2021 and 2022 which is now we have real cheap uh block space and it is plentiful we have this is our high bandwidth moment and so maybe uh you know a question for you if like all right so who's gonna buy all this block space that we've now produced I mean where are the apps what are they going to be is

there anything that you see there or is this going to take some like months and years to really uh you know play out to build out these ecosystems I think definitely on the order of months I think on day one uh it'll be stuff that we've already seen in crypto just given that new apps need that it's like a chicken egg problem where until the highly scalable infrastructure existed I don't think there was any way for someone to build like truly game changing apps in the evm world up until now like I think frantic has been highly constrained by by the fact that the fees are actually getting quite high now there's a lot of reasons why even the fact that it's and I mean I can I can talk about like more details on it but I think even like the amm construction for

example is kind of an artifact of a load throughput blockchain because if you truly had things your way you'd probably start by trying to build an order bug and people did try out ethereum it just never worked so um so yeah I think that this is going to enable a lot of new stuff that people can start experimenting with Neil you said earlier um and you know maybe we'll come full circle this eclipse in your mind isn't quite a layer two isn't quite a roll-up you had some ideas on uh you know the bet the best term or the West best way to describe this so how would you describe it what kind of term should we use for this new platypus type of creature that has just emerged so basically I want to rename terms where I think if the world roll up maybe

you should even be eliminated but I know that's too confusing and people have been using it for a while but it's because it's too broad of a category like people call it everything a little up and L2 should maybe even be reserved to in line with uh what Donald crowd was saying just something that is a maximally using ethereum for like everything I can so ideally it's using ethereum for da because there's a bridge there it used for gas that's an ethol too and then everything else like for example if you put your um your da off-chin and you're using a ZK proof for the entire transaction chain then that's a validium if you're using off chain da for like basically I want to like give new terms to each specific uh construction but but that might just be overly confusing for your

average layperson so I I haven't come up with a term for what Eclipse should be called per se but but I do have like some issues with existing terminology and I feel like it's so much easier to be a Critic so that's why I have issues with existing terminology but I would call you guys an ethereum layer to validium uh with the svm as its execution that seems reasonable I think that that's like it's it's like it captures all the important properties yeah yeah that's not a you know that's not memeable we'll call it eclipse for now all right that's cool um you know I've learned a lot uh this is very very exciting oh can you give us like kind of the short-term roadmap I

know um mainnet launch date um weeks or months maybe something like this um but also what else is on the horizon that people might be excited about yeah so mainly not on the order of weeks uh this upcoming quarter uh we're gonna bring uh so this is uh early next year we're bringing IBC compatibility so this is actually something that Solana Foundation gave us a grant form so uh we're just like wrapping up and productionizing that work and what that'll mean is that all these Cosmos chains who historically wanted to get access to the salon ecosystem it actually what's what's weird about a class I mean this is just like a fact about Roll-Ups in general is the bridging is the most important part so historically Solana just hasn't had very good Bridges such as layer zero they announced their test at deployment on

Solana but the main net deployment has been repeatedly delayed and that's because the execution model of Solana has all these small little details but but basically um what I'm saying is that we're going to be interoperable with all with more chains that's that's something that's coming up on the horizon and the Solana Foundation gave you a grant to do this yeah for the IBC work yep well interesting like full credit to Anatolia who's maybe an investor here and also this the Solana foundation for funding a grant because this is really has the potential you know to maybe cannibalize some of what they're doing and it looks like they're they're forging into that so I I certainly have to respect that um you know as stated Anatoly and others have always said hey I'm we're just trying to propagate uh the svm and this open source technology and so

um some points there for uh for Solana maybe at the end if we we still have any uh Solana listeners left at the end of this conversation um Neil last question for you at least for me and maybe David's got something too um we didn't open with this and we usually do but I I kind of feel compelled to ask it at the end how did you get into crypto this project just like magically appeared on my radar kind of this week and I don't know very much about um you know now I know a lot more after doing this episode but I don't know anything about you so so tell us about yourself it's a bunch of facts that I try to hide but I was working in Trad five so I was working on set it all and then around the time I think March of last year I

left I was briefly building an evm for Cosmos that was actually my first thing that I was building in crypto and then Tara famously debugged and all the TBL just like flowed out of Cosmos and then I was like wow like that seemed to be like the thing that was holding like kind of propping the cause was up to some degree at that time so I had to reevaluate that project I ended up scrapping it uh and then I just spent a lot of time thinking about the economics of out ones versus Roll-Ups and the Celestia team reached out and they got me completely roll uphill I was chatting with some researchers in the ethereum world and and yeah then that initial idea was just all right now I want to make Solana into an ethereum roll up and just ran into all the issues that uh

that I I think most people probably wouldn't anticipate from first principles but but that's uh that's effectively what happened well thanks Neil what a story oh yeah that's a great story yeah I guess we'll close it at that we we appreciate time looking forward to uh what you're building here and thank you for introducing us to the eclipse a platypus today it's an exciting New World of uh new change that we can construct here and uh that I like what you're doing here thank you so much for having me gotta end with some disclosures of course we are long-term investors not journalists we don't do paid content there's a link to all bankless disclosures in the show notes neither David nor myself are invest in this project of course we are bullish generally on layer twos and either the asset gotta let you know

crypto is risky you could lose what you put in but we are headed west this is the frontier it's not for everyone but we're glad you're with us on the bank list Journey thanks a lot