What's Next for Ethereum After Fusaka?

Transcript

If someone spend tens of billions or hundreds of billions of dollars to attack the network, they should fail. German mainets will scale probably around 10 times from the beginning of this year all the way to the end of next year. ZK technology finally arriving and it's maybe not final form but a very very mature form that is extremely promising and came almost as a surprise that it that it arrived so early. By introducing trustlessness, you reduce risk. So institutions are paying less money and can be more reliably competing on the markets without worrying about the infrastructure.

[music] Hi everybody, welcome. I'm Paul Brody. I am the chairman of the enterprise Ethereum alliance and I'm here with my good friend Puja. >> Hi, I'm Puja Ranjan. I'm the president at ECH Institute and together we are doing the final and concluding episode on Gifusaka files >> and this is actually a special episode. So, we've done a few episodes previously where we've talked to individual authors of specific proposals that are going to go into this uh Fusaka upgrade hard fork which is going to happen I think it's on the 3rd of December now. But today we have a special guest which is Thomas

Stanzac who is one of the two co-heads of the Ethereum Foundation. And instead of talking overly technical although as a past chairman of Nethermind like you could probably recite all 11 EIPs from heart. We're not going to ask you to do that. It's not a memory test. Instead, I would really like to use this as a way to talk about at the super high level in language that's really important for enterprise users, some big picture stuff. And I want to start with asking your take on a theme that's coming up over and over again. And I think it's really important for businesses, institutions, governments, which is talk to us about what is the meaning and the importance of this phrase credible

neutrality. >> Credible neutrality. Well, I always wonder if I get this definition right because I sometimes intuitively build it for myself and uh and I follow. The credible neutrality for me it means that uh you can always uh believe that the protocol will by its design behave in a way that doesn't favor any users or solution. So you can start using protocol Ethereum protocol and uh always trustlessly assume that the protocol be neutral for any market participants and and that the last part maybe is very important for institutions. It says that you practically have per execution on the

protocol by design and enforced by the protocol and uh all the security uh providers through the validators. So they make sure that transactions are not censored. So they have for access to the block space and [snorts] uh that the pricing systems for transaction fees uh are credibly neutral for all the market participants and so on. That's what you say. Usually we enforce it through either cryptographical or cryptoeconomic uh mechanisms. So you think about the mechanism design of the entire market as credibly neutral for all the participants.

>> That's hugely important. I fully agree with you. This is when I talk to our enterprise clients, one of the things that they care most about is this. They don't know how to put it in quite the right terms, but fundamentally at heart, I've heard it it put away in a couple of ways that are very important. Number one, they don't want to be funding their competition, right? They don't want to be operating in an environment where their efforts are contributing to the success of the long-term success of their competition instead of themselves, right? Uh and so this you're not favoring somebody, right? And obviously if you're operating on a chain that's run by a single company, that company is the primary beneficiary of transactions on that network.

>> Even even consoria chains that fault that very often they tend to lean towards the strongest participants, strongest builders of the consortia chain. >> They do. And one of the things that we've observed over and over again is that consorcia chains um they struggle because of infighting over people are constantly trying to game the mechanics to to favor themselves. And that's really problematic. >> That's what I see on Ethereum mainet. It's a public chain with thousands of participants. All of them have different interests. But what they care about is that the chain delivers that neutrality that whatever they want to build, it's not blocked. It's not prevented. They can just fully express uh their business on chain. The second thing that I've heard people talk a lot about is this L2

value proposition which is that if you do want to build your space you can do that but still the base layer interactions at the L1 are fully credibly neutral. So >> right sure >> and if I can add a question on top of that when we are looking into this Fusaka upgrade >> most of the people are talking about the podas and layer two proposals which are getting inside the fusaka upgrade >> which is great because it's a headliner and by design people should have headlines about the headliners >> that's right so my question is um on the future of Ethereum do we see Ethereum as the base settlement layer for most of the blockchain that exists because I know people trust Ethereum and that's why we have this kind of decentralization.

>> Yes. Because nowadays when you go to institutions, they they'll tell you why they choose Ethereum or what is convincing for them on the properties that are Ethereum properties, which is uh security of the chain. It's over 10 years of zero downtime. And it's not just over 10 years, it's since the beginning, since the very beginning. No downtime on the chain. 100% all the time. app servicing transactions never stopping the so the security the censorship resistance which is like firm uninterrupted market access uh privacy solutions for for the chain so there are multiple different primitives for the privacy for institutions so because of that the institutions feel that this is blockchain that is requiring less trust

so it means that uh it's lower risk chain so it's simply uh cheaper uh to hold assets and to transact on the chain in the context when you start calculating the risk cost and uh then L2s as you mentioned they are opening space for customization for innovation for more control so it's it's the L2s that in a way act a bit like consorcia chains if needed or private chains uh but then always they borrow the security characteristics of um of layer one of the Ethereum mainet and that's very very valuable because cost of securing network on Ethereum is significant.

There's tens of billions of dollars paid to the validator as validators as rewards for participating in verification of every single transaction of verification of correctness of consensus achieving consensus in time and providing that security against arbitrarily well not arbitrarily but like very very well quantified levels of attacks which can be in the area of if someone spend tens of billions or hundreds of billions of dollars to attack the network should fail and credibly lose the investment into attack. So like they if they spend $und00 million they should be at a loss of hundred billion uh just because they tried to attack the network. Uh so all

of that comes for institutions to say oh so if we go there it means that not even an attack of a country trying to disrupt infrastructure will interrupt our operations interacting with other institutions. So seamless hard forks, exceptionally high uptime, it does not happen by accident. Talk to us just a little bit about like what are the things that the Ethereum foundation does that are designed to lay this groundwork for maintaining that high uptime. Right. This is not a you know, one of the things I I talk to our clients a lot about is like in a in an environment where you're planning to hold and manage trillions of dollars in assets, you do not want a move fast and break things mentality. You want a move

carefully, sustain uptight mentality that doesn't happen by accident. Talk about some of the things that the foundation is doing for the ecosystem as a whole to make sure that continues into the future. So I think it's u ecosystem has the culture of moving carefully and foundation takes the responsibility of allowing the ecosystem to move as fast as possible but also providing the uh security testing and so on. Why do I say as fast as possible? Because we provide a coordination mechanism. So you have the hundreds of core developers and researchers which are independent from the foundation that participate in the uh transparent governance process where you can go to to website like forecast.org and track all the past recordings of all the conversations

transcripts. You can see discussions about the future of the network about the potential vulnerabilities, challenges, uh ideas for addressing the requirements of the very many different industries. Now to support work of all of those researchers and engineers and governance participants foundation tries to provide coordination work builds the network of people that can work together build tooling that accelerates work tooling for developers uh or maybe even nowadays more often coordinate the efforts of building the tools. So this is public goods funding very often tools for developers for governance are not really something that is easily

monetizable. So we identify places where we can accelerate the work on Ethereum. We can uh secure Ethereum more and see what the market will not fund by itself. So you cannot rely on uh on venture capital. You cannot uh rely on monetization from products. Uh but there is a very very important public goods work that has to happen. So supporting protocol, protocol security and supporting coordination to move fast with delivery of the necessary network upgrades that take advantage of the latest innovation in technology in cryptography. And this is this is what foundation does. And uh slightly on the side of this apart from protocol support there's also ecosystem development. And

uh this is something that for many institutions may be seen as like some kind of business development work. uh but we act maybe less as business developers but uh accelerators uh coordinators of other business developers. So we move in we connect people with each other and we move out and we create spaces for for people to meet to collaborate uh to discuss we one one big part of our efforts as the uh annual conference defcon dev connect that brings uh various industries together talks about the innovation talks about protocol and so on. [snorts] How is it decided if some if a particular EIP is going to be in a hard fork?

>> Oh, this is a very interesting process. So, first of all, for the IP to appear, you have to have some kind of trigger of the idea. So, it can be either innovation in for the research on cryptography on mechanism design on the engineering ideas. So it may arrive from the publications of technology providers or from the discussions of the website called if research probably many other websites. It might be a research paper from prestigious university. So that's that idea then allows someone to compose the improvement proposal an EIP or maybe request for comment ERC which is standard. It doesn't have to go through the same process. EAP now if it's submitted uh can take advantage of

support from Ethereum Foundation and others helping to edit it properly and add all the >> EIP for for institutions that business users EIP stands for Ethereum >> improvement proposal exactly uh so this is entirely open process anyone can submit EIP I had the situations of discussing that with institutions they were asking how does the governance process look uh is it entirely open does it mean that we can participate and I said yes of course you can not only submit the IPs you can submit ERC's you can also participate in the calls suggest everyone we would like to participate in the discussion about which IPS to include usually as the more of the institutions themselves feel that the compliance department wouldn't allow

them to participate but we we invite everyone who has the AP process has the experience understands that so it's it's based on the perceived meritocracy and you have the calls so the calls happen [snorts] nowadays is twice per week. So the ACDT calls are u dedicated to delivery of the current uh forks. So testing feedback on verification of uh coordination with tooling providers where they identified any risks last moment risks in the deliveries of the new forks. Uh the other aspect is the ACD e ACDC like execution consensus client uh meetings which bring together all the core developers and uh kind of

product managers of the client team. So those who build the software that is used for running the network [snorts] they come together together with researchers and start discussing the APs that were proposed. So EIP go through various stages and are discussed for sometimes much ahead for maybe inclusion two or three network upgrades ahead. So it might be that we start discussing EIPs that will come in in two years to the network right and at sometimes during the year it's established that there is this final discussion around the inclusion for the uh upcoming fork network upgrade which might be 6 months from now let's say or 9 months from now or more or less >> and how like who makes that final decision of what's going in and what

isn't >> and it's interesting because you have a various theory of governance and if it was very formal voting then uh it's a gameable system right so they you say oh this people are voting maybe you have the entire theory of uh of auctions of bribes and the truth is you have rough consensus you have multip group groups of people institutions coming expressing what they feel and from through that discussion that is open and visible for everyone uh there is a gradual emergence of clarity of what should go uh into the network upgrade it works and the opensource uh transparent governance model it works is a tough process sometimes it's a it's a

very difficult discussion on what should be in it means that rough consensus always means that there will be people that are very disappointed with the delays of the network upgrades that they would like to see uh but generally something that will be agreed on you should be able to easily publish that everywhere and see no more severe push push back on what what you've discussed what you decided or maybe at least the one that you see has already been discussed by everyone else and and and decided to be now foundation does help to coordinate also the discussion process. So uh invite everyone that may want to express well negative opinions.

invite everyone that cares about accelerating or delaying the process. Maybe because of lack of readiness of some important part of the network tooling ecosystem uh maybe accelerating because there are some security risks if there is no delivery on time and so on and so on. So the the coordination is very I guess multiple aspects to it. It's like bringing the right people in uh helping to keep the tone of the conversation, bringing very detailed documentation, but also on top of it uh providing testing of all the different combinations and providing feedback whether testing identified some issues

with the design of the IPS. >> Now I want to add because uh >> the Ethereum Foundation is not the only entity here. In fact, Pua's organization has a big role to play. Uh and Puja maybe just uh uh talk for a minute about what the ETH cat herders do and and uh how you're part of this process because I think there's this sense when I talk to people in the enterprise space that Ethereum is like some kind of monolithic entity. The Ethereum Foundation is almost like a corporation directing all of these things and it's really not like that. It is many nonprofit public goods focused organizations that are working together. And so um just for once in this process, let me turn the spotlight on you Puja and just talk about like the Ethereum cat herders what you do and how

this this fits together because it is people need some a little bit of understanding of some of the nuance behind this and it's not monolithic. >> Uh that's very great of you like you brought it up and thank you to mass like you literally summarize the EIP summit that we had here in the dev connect today. So uh the Ethereum governance process is very open and anybody can participate. A few days ago, I was uh talking to someone from the enterprise and they want to propose something which is not in the near road map of Ethereum upgrade as such. That particular thing is still in the research work like ETH research and they wanted to propose an EIP. And they said who will propose the EIP for me. I said nobody you have to come and propose it. He said can I do that? I'm not a developer. I'm not from

Ethereum Foundation. Yes, you can do that. Anybody who has an idea willing to support, willing to make a standard can join us. And that's where Ethereum cat herders comes into picture. What we do is we organize an EIP editing office hour every Tuesday around 1600 UTC to invite those new authors to learn about the process. They understand how EIP should be documented, how it can be moved forward in stages. And then Tomas you very well mentioned about ACDT, AC/DC and ACDE. So in all these calls we make decisions and uh there are so many participants of decision. It's not the client dev only tooling teams are adding their input and communities are adding their input. So there are so many calls

that is happening around Ethereum protocol that people can join in order to participate in the EIP process as well as in the network upgrade process. We would love for them to come and find the agenda for upcoming meetings in Ethereum/PM GitHub repository. That's where all the breakout room meeting information is available and all meetings that happens around. Well Tomas continuing this discussion I would be curious to hear from you. is the future road map of Ethereum. If it is up to you, what would be the two features or one what you can prefer whatever it is that you would like to see incoming network upgrades in next like two to five years? M I pay pay a lot of attention not to express my opinions uh

on what I would like to see in the future forex really so much of the effort that I'm putting into talking to lots of institutions builders and asking them what they care about the moment I would like to I would express my opinions just somehow might be given uh too much of the of the weight and it's very important for me to stay neutral deliver is representative report about what people need, what is important to see. So what I can say is that um this year after having all of those conversations, we said it's important to see scaling >> Mhm. and it's scaling of the main net and scaling of layer 2 supporting the

scaling of layer 2 and the features on interoperability user experience inter UX and that allowed people to shape Fusaka network upgrade to deliver exactly that and also to shape the next upcoming upgrade the clamsterdam to scale even further and now when we see the road map we see that uh the term mainet will scale probably around 10 times From the beginning of this year all the way to the end of next year, we are seeing dramatic progress on ZKVMs that will support us with scaling further into 1,00x ranges and uh we also see a lot of effort into the

interoperability features different different approaches but because we deliver that message that that's what industries are asking us about that's what layer 2s are asking for the ethereum mainet as uh as a protocol, as a platform. uh so everyone adjusts and and having the researchers and engineers to start reacting to what is needed after receiving feedback was the most important thing about focusing the efforts of the foundation on ecosystem this year and I'm I'm I'm very happy that uh that we see it and the moment I would start talking about my personal preferences I could really do a lot of harm and and this is also a bit of the role of Ethereum foundation that we

discussed here about that foundation itself tries to the best way represent what is needed instead of being overly opinionated. We do have teams that are specifically researching some areas or engineering particular aspects of of networking and so on. They act a bit like the one of many researcher clients teams. they are a bit more opinionated but this would be 20 30 people up to 200 that have very specific roles of delivering the very specific designs of EIPs so here it's more of the expertise of of our researchers but the moment you go to coordinators uh they would just help to have discussions and then coming

back to uh to your questions what I want to see is that we deliver uh what we promise that we'll focus on uh so scaling interoperability ility on the interperability side we talked about OAF EIL so frameworks for uh for expressing intents for the trustless execution across multiple chains on the scaling side we see mostly ZKVMs the talking about if proofs uh massive scaling opportunity and ZK technology finally arriving and it's maybe not final form but a very very mature form that is extremely promising and came almost as a surprise urprised that it that it arrived so early and we are extremely

excited about it. >> So in this multi-dimensional uh uh area one dimension of consideration is collecting input from enterprise and other projects what they would like to see in Ethereum's road map. >> It is and it also cannot be you know like very very formalized process because even here we're trying to to arrive at the rough consensus. So there's lots of legitimacy, expertise, judging, a lots of meritocracy based participation and uh and we have to somehow react to world what world needs what the world needs and uh and this is uh there's so many different like cases you have financial institutions uh you

have the charity organizations the centralized organizations you have uh cypher bank ecosystems uh that talk about privacy a part and the trustlessness but all of this it seems that there is definitely alignment between institutions and the values of Ethereum uh that by introducing trustlessness you reduce risk so institutions are paying less money and can be more reliably competing on the markets without worrying about the infrastructure and we're delivering some really positive change to society that everyone can take advantage >> thank you so much >> this brings us to the end of the very last episode of the Fusaka files uh and Even though nobody ever said this in the history of the world that we need

another podcast, there is a reasonably good chance that Puja and I will be back together for I don't we can't call it the Faka files anymore, but they'll be Glammsterdam and and when we do Glamster, maybe we'll even shed some some light on the secret process for how these uh upgrades are named. >> Awesome. That is great. Thank you, Paul. It was really lovely talking to you. Uncovering the enterprise use cases of a EIP side was really great and I had a lot of fun. Learning more about enterprise use cases of these EIPs would definitely help more people to get involved. And Tomas, we really appreciate you taking out time and joining us here today on the final episode of the Fusaka File. But this is not the end and we will be coming back with the Glamster File. Before we get

into the Glamster area, please join us on the [music] live stream of the Fusaka network upgrade to learn more about EIPs. Pep and EP are there and Fusaka file are there. So yeah, thank you so much once again. Thank you. >> Thank you so much. Thank you for having me.