Vitalik Buterin and Friederike Ernst. Ethereum Economic Zone

Transcript

Fantastic. Vitilik, thank you for being here today. >> This is the last talk in a in an easy themed block. So kind of I'll I I'll ask you for your take on >> So the next talk will be in a hard block. >> Yeah. Actually, so kind of medium first and then hard. So kind of >> I see. Okay. >> We're still cutting it on the easy side. >> I see. So we're going to do like a tutorial of like circle starks after this. >> Yeah, absolutely. Um so guys, um I'll leave some time for questions from you in the end. So kind of if you have questions already kind of like maybe think on kind of like what you want to ask. So um we already heard Martins's and Jod's and Phillips take of the E easy. So kind of >> the term Ethereum economic zone

obviously kind of does a a lot of the heavy lifting here but kind of what what um what does what makes the easy um in your head? Is it primarily kind of like an economic thing in kind of like kind of like a single market kind of sense or is it kind of like an economic operating system? >> What's it take? Yeah, I mean I think for me the core right is uh basically it's an effort to rethink you know what layer 2s are um in a way that kind of both gets uh a lot more of their a lot more of the benefits um and at the same time less of the drawbacks of uh all of

the approaches that we've tried so far far right and uh to make something which is much much more integrated into Ethereum and so it's not just basically a separate you know EVM chain where like it can be difficult to like see you know like the connection beyond the branding level right and it's uh like actually very deeply integrated in a way that's like very visible to users and developers and at the same time to like actually get benefits from that integration right and uh like to me the benefit of uh being benefits of being in L2 has always been um you know the tight integration with the uh Ethereum market um and the and the Ethereum user base um

and also the uh the fact that you don't have to be responsible for a lot of your own infrastructure right like you don't have to be responsible for having your own set of nodes to the same level I mean if you have a based rollup you don't even need your own nodes you can uh like basically your infrastructure load on every level is just much much lighter, right? You potentially if you do it right, you know, you don't even need to convince a to convince users to create new accounts. That's also another thing we should work on, right? and uh the possibility of having this like synchronous composability between L2s and like having much better forbes of

bridging on top of that with better developer experience and also having ZK proofs securely enforcing that like it really does accomplish all of those goals, right? And so, you know, you get uh more you get more integration and you know, you get kind of more power at uh this at the same time and uh like at lower cost, right? So, it's uh something that should be a win-win for everyone. >> Well, that that fits in super nicely with m with what what Martin said. He said kind of like kind of the it extends basically um what the presence is. M so kind of what the present is for for Ethereum and kind of like all the zones

in the easy essentially they kind of start living in the same now and Jodi said um kind of you um kind of by having differently natured zones you can actually extend Ethereum rather than kind of just adding more block space you can actually see specific um >> uh you can see use case specific chains or um chains that are specific in some other way. So kind of if you kind of think maybe five or 10 years in the future, if you sort everything that anchors to Ethereum >> into a few buckets.

>> Mhm. >> Um what are they? >> I think the um projects that we've seen so far, right, that uh like extend Ethereum in an interesting way that's not just uh like EVM with uh like with more TPS. Um, one of them is privacy, right? So, you know, like IntMax and Aztec are good, very good examples there. Um, and, uh, I know there's, uh, more and more projects trying to do this. I mean, I actually even think of, uh, things like tornado cache and rail gun and privacy pools as being L2s. Like they're L2s of privacy instead of L2s of scalability, but I also think of them as L2s. I mean, with rail gun, you can even

do internal transactions. those are I think great and uh underrated by a lot of people. Um then the second is uh like very high TPS for specialized use cases right so lighter would be a good example there and uh I think in general like having a a mass scale uh prediction market uh or other type of like D5 primitive but I mean I think ultimately you can sort of define every D5 primitive as a special case of prediction markets in some sense um then like having that run on an easy roll up I I think feels ideal. Um then if you want if he wants to kind of

start going further right then uh and I think like privacy is a dimension we have to keep improving on right and I expect uh I mean as Aztec has already started doing right for and especially as Ethereum L1 um continues improving on privacy natively like privacy focused proh L2 connecting into Ethereum will have to get into uh private programmability And uh we're seeing that. I uh I hope to see more of that. I hope uh we'll also keep getting better cryptography that helps us keep getting even more of that. Um then I I think there's like interesting directions that are underrated and

having an integrated oracle I think is interesting. Like you know the uh the whole oracle space I still think is you know one of the sort of skeletons in the closet of Ethereum, right? Like if you compare the level of rigor that people like L2 beat have brought to uh the you know like L2 space with things like stage one and stage two and just all of the you know like efforts that uh you know like optimism and and arbitum and and tao and others have spent like actually getting getting there and like if you compare that level of security to uh like what happens inside of many oracles it's like night and day right and uh you know like one of the things I always keep saying is that there's no

point in giving reinforced steel doors to your house if the windows are like made of glass that breaks after one hammer hits it, right? Um and so like I think we might even be in that kind of situation, right? And uh so I've always been thinking like actually like maybe the thing that's even higher priority than a push to stage two is improving oracles and uh you know the push to stage two will happen naturally especially with native rollups and ZKVM sort of giving us that for free. Um and uh with like integrating an oracle into an uh L2 like I think you know oracles can't be perfectly economically secure but you know you want the security base

to be as big and as diverse as possible. Um so I think uh that approach is interesting. Um then what other things for L2s? I mean just like there's the whole different kind of L2 which is sort of ultra specializing for uh like like enterprise type use cases, right? It's like basically you approach the problem from the other end. You instead of saying we have an Ethereum chain, how do we make it more scalable and user friendly? You start from the other end and you say like here is some enterprise thing that's uh serving many millions of people and like helping a lot of economic activity happen but it's like totally trust dependent and centralized

and like how do you add proofs to that so that you give users better guarantees and that could apply to supply chain things it could apply to finance it could apply to medicine it could apply to voting systems right and uh you know like Orin's interfold work I think is uh one of those great examples of that. Um so no I think I know there's a lot of different uh directions from which you can uh tackle this problem. >> Do you think about um chains that are run by nation states or so kind of because I mean obviously nation states are typically extremely hesitant to kind of put any kind of infrastructure >> onto Ethereum. Do you do you kind of um

see Ethereum becoming kind of the ultimate settlement layer even between nations that don't speak anymore as we kind of increasingly see? >> Yeah, I mean it can happen, right? Like uh one of the patterns that we've seen historically is that uh you know there are these government blockchain projects that first try to make their own consortium chain and like they go all their way out in the direction of like satisfying the more conservative people and then that just never ends up actually getting any interesting properties. And so four years later, everyone forgets about it and the thing spins down. And then another four years later, um, you know, the same country just quietly spins up a thing where they

just like dump freaking NFTs on mainet, right? And like it's actually more useful. Um, so I I think it's uh it's use case dependent, right? I think you don't want to sort of attach like too many of these uh you know like philosophical connotations to the concept of like being on L1 or the concept of like being on um L2 right it's uh it's kind of like attaching you know like too many philosophical connotations to like being in a house or being in an apartment building right it's uh like you want to kind of view it as a a technical matter of uh like what are things that you wants to be close

to. What are things that you want to have very easy ability to interoperate with? What are forms of scalability that you want to have? What are forms of privacy that you wants to have? Um and uh I mean I think sometimes um you know easy something like easy is a good solution. Sometimes you know just dumping a freaking NFT on mainet is a solution. Sometimes dumping a freaking ERC20 on mainet and then letting that bridge into easy is a solution, right? So, I know you want to be open to all of those. >> Yeah, absolutely. >> Um, so kind of if you look at Ethereum and kind of like how it's developed over the last couple of years, um, Ethereum made a very explicit choice that >> most or maybe all other chains didn't kind of like it put censorship

resistance above everything else. So, kind of namely above speed, above cost, above recourse if anything goes wrong, right? Um, so if kind of once kind of the code's committed, it just runs. So that that's a choice and that's a choice with real losers to some extent because most users they don't wake up and and say oh I want to be on um the most neutral chain possible or they kind of they want their payment to clear and they want their money back if they were scammed or something breaks right so should it um >> should it be the base layers job >> um to serve users at all or do you think kind of it should be kind of more of a

neutral ground that other networks then build user experiences on that kind of users >> are happy with. >> It's a difficult trade-off, right? I think uh because there's a lot of attraction to kind of going all the way and basically saying like well the base layer does you know the minimum possible to ensure things like trust and security and then uh everything else happens on top and people can choose. One of the challenges is that often if the base layer provides too little then like you still get certain types of capture that happen at uh higher levels right and you know if you don't care about interoperability explicitly for example then interoperability gets captured by

centralized providers um and then uh like you get applications that basically don't think of uh you know like themselves as serving Ethereum users but think of themselves as like creating identities for users fully inside of their application in a way that kind of really maximizes a lock in like doesn't really create the benefits of uh a user's accounts being able to be part of multiple applications at the same time. Um, and so there's like there is a balance there, right? where if you don't try to like make sure that things like interoperability, censorship

resistance, just like stronger pressures toward having a proper competitive market actually exist at the user layer. Then uh effectively what you get is like you get these walled garden monopolies just to sort of wrap around the uh base layer and like use the base layer a little bit basically just so they can virtue signal and say that you know hey we're on Ethereum but then uh like actually the thing is not bringing freedom to people. Um and uh I mean I like I actually again you know like view easy as a a quite helpful effort in that regard because it's uh like really doing that work to make these higher levels of uh interoperability available not just uh kind of in theory but uh like

actually create actually creating standards so that uh if L2s get built inside of it that interoperability exists between them by default. Cool. Let me ask one last questions and then I'll hand it out to you guys. So, if I say I um I had a an extremely specific crystal ball and kind of it would allow me the answer of kind of to one question. Um exactly. And that's kind of whether a specific kind of network exists in the Ethereum economic zone in 2035. Um what network would you ask for to kind of see whether it's there to kind of gauge the the success?

>> Huh? Um I mean I guess one natural use case is like to have at least two you know like high performance highTPS DeFi type things which uh you know again you know could be lighter style could be a prediction market I mean could even be also um something that provides privacy and then like actually see the like easy deposit easy withdraw and like cross composability happening between them and like actually see the uh the value provided by that. Um so that would be one answer. Um I think another answer is like it would be interesting also to kind of see some of these in more

non-financial L2s and uh like the the possibilities for having like say Dows that kind of integrate into that and like use one for their governance you know use another one for like managing their internal assets and so on. Good. Thank you. I