Why We're Bullish zkSync | FULL DISCLOSURE

Transcript

foreign [Music] welcome to another full disclosure episode this is an occasional episode that David and I do this is about ZK sync today the first CK evm that is live technically live on ethereum just uh some background on this series full disclosure we publish it on YouTube it is occasional an occasional Series where we talk about projects that David and myself are personally supporting as advisors so these are special projects only and we're firewalling this from a regular bakeless content because uh maybe we're a little bit more biased than usual I mean there's a reason we took these projects on as advisors so full disclosure full disclosure we have

bags in the project that we are about to talk about we're close to the teams we think they're going to win we're very bullish if you think that this utterly biases our opinion then stop watching but you have been warned full disclosure obviously we have all of our disclosures listed there's a link in the show notes we can find that at the bank dot com slash disclosures page for all of the details David should we get into this episode yeah there's I think a lot of information that I think the community wants to hear about ZK sync so we're going to go in to all that with Steve Newcombe Steve welcome welcome thank you thanks for having me again so Steve we've had you on the banquet show before so you the people aren't totally new to you but you still are overall like I think new to the secret

ZK sync world and overall crypto so who is Steve Newcombe can you just uh give it a little bit of an introduction and are you related to Duke Nukem in any way I've been called Duke Nukem my whole life for sure that that has been part of my life for sure um yeah I I uh I'm been a four times founder um the companies that I've been involved with I got to see the first email across the chasm on a Nokia phone I got to see the first what we call distributed voice recognition system light up uh we now call that Siri and Google Voice and Alexa um I was founder of a company called powerset which is now called Microsoft Bing search engine I got to got to have on my team at

powerset uh Tom Preston Werner and Chris wanstroff who later created GitHub um then created a company called famous which is a JavaScript 3D rendering engine uh on in while at that got to participate and help creating node.js one of the largest open source projects in the world got to help fund and be on the board of directors of jQuery which is the largest open source project in the world study crypto for a couple of years took a couple years off and just really got into it and I ended up joining matter Labs as the chief product officer Steve you're like deep internet man yeah that's like an impressive bio like you've done a lot of things on this thing that we call the internet right yeah I mean when ever since I was a little kid I was like I just want to be

part of History I don't care if I'm the janitor or the CEO it don't doesn't matter to me I just want to be part of where history is being made so how did you find your way to Z casing can you tell that story yeah through uh so when I started to learn the space I called up uh Andreessen Horowitz Lightspeed Ventures and Sequoia and I said hey can you guys introduce me to the founders of layer one and layer two companies in crypto um and Andreessen really just helped me get into the into the space and really introduced me around as well as Lightspeed um got to meet the founders of everyone from arbitrum met you know got to meet optimism got to meet of course matter uh really fell in love with the space and the one that the one company that

took my eye for both technology and Mission was matter and it was perfect fit with me and Alex the the founder here uh it's it's it's been a very very very awesome partnership with Alex and I it's been it's been amazing yeah having gotten to know Alex over the years like technically minded like definitely mission-driven ethos-minded but also uh it doesn't really care for the public speaking nearly nearly as much and so that's kind of where I've seen you like really step into and lean into over at CKC you are now kind of like the uh the public spokesperson for Z casing is that a fair description yeah yeah I'm much more of uh comfortable in front of a camera and sitting on stage than than he is and

it's it's sort of the good Yin and Yang of each of us we both offset each other in a very very good way so uh I'd like to go into the actual like launch of the ZK evm ZK saying ZK evm on ethereum because there's a in the the world of the layer two Wars which uh bankless is in the middle of there's been a lot of confusion with the ZK evm uh what is an actual ZK evm what does it mean for a ZK evm to be live who's first who's got who's first is it always a big question uh and so Z casings claiming to be first because you guys were live on mainnet a few days ago uh can you talk a bit a little bit about what is actually live and kind of the rollout plan and just really make some uh clarifying

details as to what we got here on mainnet yeah and and the whole first thing I hope I hope that goes away soon enough um starkware was the first with uh a general ZK roll-up we were the first with a evm compatible roll-up and polygon when it launches will be the first with an evm equivalent roll up and that's the way I would characterize the answer to the whole whose first Wars so multiple people can be first then Steve yeah if you add one more word I was gonna wear a shirt that says this is the first ZK roll-up t-shirt you know yeah they're all great projects um and I'm all I'm very glad that all of them exist because I think competition is very very

healthy where we are is when you go on to mainnet it's kind of different than we when you launch in web 2. so when you're launching web 2 your website's live you're live you have basically staging in production but in in our world there's three phases once you're on mainnet before you're actually fully in production so we actually stay away from the word live um I have a ban on the word live production launch anything like that in the company because of the confusion around our mainnet uh baby Alpha it's a weird baby outfit today and that means we're doing Security checks we have Bounty programs to find bugs all that sort of stuff once we pass all those Gates

then we let all the developers come in and Port their apps and build their apps that's called um fair onboarding and then once we test all that again finish a full security audit from a tier one security provider we then do a gated release and so gated release is when I would say we're actually live and in production and in full swing and um so right now we are in the we we called it baby Alpha and I can't believe it's stuck uh uh Alex and I were in a in a bistro in Paris when we were typing this up and we said let's just put baby Alpha in here we'll come up with a real name later and he did and it was

supposed to be staging and we never changed it and then our graphic artist just kept it as baby Alpha so I'm like I guess we're stuck with baby Alpha uh from now on okay so baby Alpha is not a term outside this is a new term this is not don't ghosts Google searching baby okay so but but okay now you baby now I want to Google search baby elephant I know we're gonna create a character a baby Alpha character um but um it's really staging so it should be named Fair staging fair onboarding and then Fair uh release by the way if you hear weird noises that's my dog's wrestling behind me and I deeply apologize but it's my day to take care of them

um so yeah we are here at baby Alpha which is the staging phase um and the response has been just just nuts uh to to everybody's excitement for the for our ZK roll up to to get everybody wants us to get through and get to the launch you know as fast as possible okay so just to really dive in on the details baby Alpha is it's like live on testnet but only for the Z casing team only only the team can touch it and just to make sure that it's polished and well-rounded is that is that the how it works yep we're getting we're getting all of our security tests and performance tests we're testing transactions per second various load tests for that okay we're testing the

the performance of the prover and various load tests for that and we'll talk about that in a minute how we're going to make that fully transparent okay and then so you go through all these load tests these are live production tests from the Z casing team about their own product to make sure it's all working next step becomes Fair onboarding uh which is uh once we determine that the zkevm that is good and running and nothing nothing's breaking then we start to open up the gates towards developers applications defy apps nft stuff uh is that is that what comes next yeah so all the companies that said hey want to be we want to be your launch projects when when you do the Gated release we want to be part of that we let all of those in simultaneously to begin porting and

developing and a lot of these folks are just taking their test net projects and just moving them onto mainnet um and uh then uh when we do Fair release we let consumers in we let the users of all those apps begin using those apps all at once um and that's the three phases that we're going through right now okay okay uh and then is there a timeline on the next two phases we're already at baby Alpha when the when does the next two faces once the baby grow up yeah never um uh so we try not to give dates unless we're 90 sure but so many people are saying we don't care please give us a date

anyway um I would say that that we expect maybe in the six weeks time frame will be ready for fair onboarding and expect that we will be sharing a lot of news at East Denver okay including we will we should have already been gated release and the launch should have already happened now something security wise could happen between now and then we we don't know there's so many things that could happen that could change those dates but if we generally and broadly go and plan um should be about six weeks to apps being able to come in and then it should be uh

it should be before East Denver that we um have a full gated release and we let all the projects go David I won't ask Steve this but when's East Denver youth members at the end of February end of February yes into February 2023. Steve um 100 how many launch Partners I I think I've read some like close to 150 and like when you say a launch Partners uh what is a launch partner and what types of uh people are we talking about yeah I mean to to characterize the we've always said there's like been this fire hose of projects coming in uh to to launch with us and you know I went back and looked at the data and like arbitrum optimism

polygon when they launched they had two to ten Partners when when they launched and we have 150 now and actually just checked this morning right before we started recording it we're at 165. like it's big and it's accelerating and these are the projects that have committed to launching on zksync 2. most of these will launch at the Gated launch and then there will be a bunch launching in the following I would say three to six months depending on what their project is doing and then with all of our VC partners that we have and all the tie-in that we have into the startup Community we have another 150 partners that are stealth that are startups that are launching and they'll be launching with us but we

can't they're in stealth so we can't really name them um and we have a public ecosystem uh page where now people can publicly just go look at those um uh projects and it's just you just go to ecosystem.zksync.io and you can actually see the projects that have signed up but this includes you know if you think of like the who's who in defy The Who's Who uh within the ecosystem this includes chain link Sushi swap uniswap maker Ave Argent one inch gnosis curve winter mute and I just can keep going it's all and everybody that is that is working with us

and it's been I would say our response to this is just truly feeling the weight of responsibility coming onto our shoulders to to ship product and ship our mission and and to really be who we said we were going to be as we roll this product out the door this protocol out the door and our mission out the door um and it it is truly just us trying to make sure that we are providing really really good service to everybody so you said some of the other layer twos when they launched they only launched was like 10 15 12 uh projects ZK scenes launching with 150. where did that number come from is this just because the ethereum ecosystem has grown and there's just more projects these days

like how are the discrepancies between those numbers so big I think it's probably both um I I do think that there was excitement and demand for all of those projects when they launched it's it's the coming of age of crypto um we are growing up I think uh as a community and as an ecosystem there's more folks here now there's more projects here now um and this is this is sort of this uh virtuous cycle of of projects helping each other out to create these Network effects and I think we're going to have escape velocity from day one uh within our ecosystem as all these projects launch and interact with one another

it's it's it's really gonna I think be a special moment so there's two sides of this there's like the projects that already exist out there like you name some of them trailing Sushi swap unit swap maker like all the The Darlings that we know and love but then you also said there's another cohort of stealth projects that I'm guessing if they're stealth projects then they're like that's DK sync native as in they don't exist on other projects other ecosystems that's something that they have chosen ZK scene to launch primarily with is that is that true um I I I don't think that we would ever uh press anyone to be exclusive to us so these would be some sort of combo maybe they're launching with us first um and maybe they go into other systems

as well but we never Force anyone to say like hey you can only be us that would not be within our ethos so all these projects like obviously things like sushi swap you know swap they already exist so obviously they're going to deploy on ZK sync uh we got the stealth ones which can't get too many details but we're overall like the net of all these 165 different launch Partners like where are they coming from where they start yeah yeah so um generally the the places that they're coming from number one ethereum they're looking for lower gas fees higher transaction uh speeds uh second we're seeing a lot of the projects that were on optimistic Roll-Ups they want to get on the ZK bus and they want to they want to go to

something that they think is the end game for scaling then we're seeing folks that are on uh like a side chain are coming over and saying I want to come over to ZK because that has better security and then we're seeing people coming from starkware because they don't prefer Cairo um I think and I've said before Star Wars technology is amazing but I'm not sure people responded incredibly well to Cairo so we're seeing people want to build their projects in solidity and those are the four areas that we're seeing people come over in droves so um it's been an amazingly wide variety of projects coming from different places for different reasons so one thing I'm curious about Steve is like the the zkevm is like the New

Frontier it's like the New Frontier that like a lot of the layer two ecosystems are focused on uh Frontiers are dangerous uh how do we uh how do we make sure that like uh when these applications get deployed that everything is not going to have bugs yeah as as as you guys know like patience is their strategy and a lot of people want us to move fast they want us to launch now um and we just aren't going to do that um I I think I've said many many times before we don't let marketing determine when we launch we let security determine it and we have voted internally that we are going to do a full tier one security audit uh through every component within our system before we do a gated release

and then after again tier one security audit is that is that a technical term so uh yeah I should probably explain a little bit like you could you could I guess hire a 16 year old to give you a security audit and say that you had a security audit right um or you could hire someone like open Zeppelin and uh we're we're announcing our full partnership with opens up when to try to create a standard on what should be done as a security audit before you allow a full gated release so we don't have any standards in the layer 2 space of what type of security measures should be taken prior to letting consumers come in and and and basically use systems and put their money at risk and put things at risk

um we want to take um and be the gold standard for being the most secure the most conservative the most careful in our approach to full launch so while we have a goal of getting full launch by East Denver that will be gated by our security department that is who tells us when we are allowed to launch so we're very proud to be in partnership with open Zeppelin and we'll be announcing a second partnership with a second top-tier uh security audit firm uh later on and we will be doing two full tier one and by tier one what that means is when you're working with someone like it opens up when this is in the many millions of dollars to do a security audit this is an

incredibly serious and detailed things these things can take six to nine months each to do these things we've started a long time ago and uh it is an incredibly detailed and thorough process with these third-party security audit companies so anytime you hear anyone in the ZK space launching um what you want to hear is that they've done at least one full tier one security audit prior to going into full release and allowing consumers to use uh the product and we hope this becomes a standard in our industry so that we don't have any security breakages as these ZK Roll-Ups light up okay so this doesn't really matter for the onboarding of teams so all of these

like D5 teams nft teams can come to zksync prior to the completion of a tier one audit it's really when users can gain access to the network that's when we need to have the tier one audit done uh if if only one out of these two tier one audits are done will you still go live post around East Denver or do you are you guys looking for two out of two what we're doing prior to the Gated release is an internal security audit one full tier one external security audit and multiple bug Bounty programs prior to launching on our first gated release then we're bringing in the second tier one security audit firm to audit the first one okay um so that's our plan right now and and

and we have seen much much less than this happen in in the past for layer twos and we we hope this becomes the gold standard that everybody copies so that we benefit each other uh and we help each other create this like everybody knows this is what you should do before you launch and so people can gain and have this 10x trust moment happening in crypto are ZK EVMS inherently like more uh have higher surface area for bugs than something like an optimistic roll-up or like uh where's this like I mean it's it's super good that we're focusing on security should we be as users more more wary of zke EVMS just because of how new they are um I think both are complex and they're

just different animals um an optimistic Roll Up is a probabilistic game theory engine and we are mathematical deterministic uh very very complex math engine they're just different they're both complex they should both have the same security requirements before going live okay um one thing that uh has gotten into my head lately it's like this concept of code reuse is a way to minimize bugs as in if everyone's using the same code or other eyes on the same code and that same code is deployed over and over and over again like we can all uh if everyone's using the same code base there we can like there's the Lindy just grows uh so like I want to turn this conversation to like the open source angle of ZK sync because that's really

just where we if we get more eyeballs on the code we can make sure that these things are more bug free can you talk about ckc's open source strategy yeah um last time I was on Bank list you know I I described like all the layer two projects have a wide variety of Open Source strategies and policies every you know starkware has a mixture of some open source some totally not the end result is they're not forkable polygon has chosen to be Source visible but put a copyright on their code so you cannot Fork it and and then I announced what our thinking was on it while while simultaneously saying I'm not sure we're done this journey to decide what we'll ultimately do

and we had had it had an attempt to solve the problem of if you fully open source your code then Bad actors could Fork you um and they in fact did when we opened Source ZK sync 1.0 and all of these Pretenders went out and said hey we are you know the ZK roll up go with us but there was bugs in their system and they didn't know how to fix the bugs because they weren't us and I had presented our latest thinking that we were going to open source but only after security audits only after uh the code was quote unquote in the hands of the intended users and when we when we you know watched through the video

um we asked ourselves are are we still on this journey to deciding what to do with open source or was that the final decision and and as we are getting the I think the weight of responsibility coming onto our shoulders and we're saying look we need to be on Mission when we make our big decisions and we're seeing that as as our ecosystem grows up and comes of age that there are moments when when projects make big decisions that say who they are because you can say who who you are all you want but it's your actions that really say Who You Are and you guys have known we've seen these moments recently where the ecosystem had like a cringe reaction to some things that projects were doing we saw

I think we all had our Aptos moment um we we had um some spine tingling moments I think when arbitrim acquired uh the company that they recently did I think when starkware said 50 of their tokens will be Insider owned arbitrum said the same thing too and we are as we are launching towards mainnet we have faced a bunch of these fork in the road decisions that really say Who We Are um and we have a bunch of those we'll talk about today and open source is front and center what you decide to do with your open source says a lot about who you are and we were troubled uh we were we were we knew that we weren't at the end of

the road and that we needed to think through this and we needed to make the the decision on this that was mission driven and there's there's this thing that happened where I was interviewing a candidate and they're like hey what's your business model is it B2B or b2c and I was like just just my my gut reaction to that was was huh like that's not how we think about business models in um uh in in in our world in this new paradigm and I said I think we're an embassy where m is Mission and C is not consumer it's the citizens of our of our new network state and and it just right then the circuit connected for me and I was like I think and I immediately

like stopped the interview and the the candidate was like am I seeing something here and I'm like yeah you are you're seeing I think you're seeing some circuits connecting on our open source policy and next you know the whole interview just went towards me and him talking about the open source stuff and it was like a magical moment like and he knows who he is I guarantee you he's watching and I guarantee you he's cheering on the other side of this because I was like I was like man I think I think I think it's happening in my head and I was like I need to call Alex um and I went to Alex and I said Alex isn't anything other than fully open sourcing your code under MIT functionally centralized censorship of code isn't it censorship of ideas isn't it censorship of innovation

why are we so consequent concentrating on the unintended consequences of Bad actors why don't we focus more on the unintended consequences of good actors what are all the magical things that happen when you are open source and if Bad actors come let them come we'll find other ways of dealing with them and so Alex it is rare but Alex Smiles ear to ear and he's like he's like this is correct this is the right this is the right thinking for us and he's like let's make the change um so I'm I am so happy that today we're able to announce we have a nice clean and clear open source policy that we're sharing and uh it's very new this is new

this is an announcement It's the final stop in our road to understanding what we're doing with open source it's the action that says who we are that we're walking the walk um and and so today we are announcing that at Fair onboarding which is Milestone five we will be releasing every line of code under MIT full open source licensing fully protecting the right to view the code change the code and Fork the code and it is it it is such a good feeling to say that that's where we ended up it was a struggle it was something where we found out who we were at the end of the day and we always pride ourselves in really being the most mission-driven project that we can be and focusing on our

values and this is this is this is just right on the money for us we're very proud that this is where we ended up it was a tough struggle to get there and uh couldn't be happier that that's that's where we're ending up okay so the current state of things is that code not yet open source because we are in baby Alpha where the Z casing team is stress testing their own zke evm shortly and I feel I feel like soon TM Fair onboarding once that stress test phase is done like weeks not months I think is my gut take uh is when we go to fair onboarding and that is when the ZK sync zkevm code is like a fully open source of the MIT like license which I I don't really know the details of that

but it's like from my gut take it's like the gold standard of Open Source that you don't get any more open source than that yeah everything uh nothing hiding no secret sauce holding back we want to we want the possibility for our approver our technology to become a public good if it can and we all know that if if everybody adopts our approver we get something magical we all get to Share technology that could potentially do away with Bridges right and that goes back to the code reuse thing that's like been living in my head it's like if everyone's using the same prover yeah there's there's uh composability benefits there and there's

Security benefits there right and and the whole notion in web 2 where you don't give away your secret sauce to your competitors because it might be the demise of your company in crypto land we have we have different Quantum math the math Works differently if you give your most Impressions into the ecosystem it is what gives you uh and I think maybe you coined this phrase Mission armor um I I think it proves who you are when you do that and and that's we want to be as we are making and having these very very big events happen to ZK sync we want to let our actions show who we are and this is an action that says we want to we want people to understand that we really are a mission we really are not a company trying to make us win

we want ethereum to win and this maps on to some content that I've been making lately about just the modularity of layer twos um and so like uh I kind of consider the future of Layer Two should like break apart into modules and like for example Z casings prover might be a module that is open and available to everyone and if everyone like all these layer twos adopt that little module then like the ZK sync infrastructure becomes like a core component of many many Layer Two so that's like the bull the bull case for ZK the Z casing prover for example um very complex to do that but it can only be done if you open source it to begin with and that's what we're starting with cool love it love it um if we're ready to move on to the

layer three conversation I think that's where I I want to go to next because that is that I think I think there's like the the new table Stakes for layer twos are their own like layer three ecosystem uh and so if you're if you're not doing layer threes like you're kind of no longer at the table uh Steve can you talk about the zk6 layer 3 ecosystem and where that conversation starts so we're launching a proof of concept called opportunity in Q one of next year and um layer three I'll just describe it incredibly briefly but that is where um instead of a 10x scaling moment which is what layer 2 is about and one size fits all blockchain Layer Three is a star field of 10x

moments in scale in cost reduction customization privacy token tokenomics that are available up in layer three that are not in Layer Two and it's really sort of thing Enterprise ready um mainstream ready is is another way of looking at layer three and um amongst the evm sort of uh brethren in ZK world so your polygons scroll us we are very very far ahead of everybody um stockware has a layer three but it's sort of in a different ecosystem than us and uh we opened up the possibility to mainstream Brands and said hey you know

would you guys like to partner with us to be launch partners and help help and maybe become part of uh your own version of opportunity um and all I can say there is the demand that we are seeing from what I would call kind of crypto native projects in Layer Two is going to be dwarfed by the demand for mainstream Brands who are going to be coming into the ecosystem in layer three so just as you know we are having relationships and Partnerships and launch discussions with pretty much every crypto native project now imagine every uh consumer brand

every mainstream brand out there that is beginning to think about what their interactions with crypto will be we are now absorbing that weight on our shoulders for layer three and you know we are looking at just how many of these layer three partnership projects can we handle as a company and there will be a limit to it but we are now uh having active discussions with all of the world's very well-known Brands about saying like how can they be part of layer three and we're really the only ones uh that are evm in the evm Brethren that have a layer 3 offering and so that excitement over our layer 3 it's hard to even imagine but it dwarfs

the excitement over Layer Two even though our Layer Two stuff is just hard for us to sort of like handle already um so once again like we are thinking like we have such an immense responsibility to speed up everything that makes us more decentralized more secure and more of an ecosystem project rather than an individual company um so that's something that we are looking to sort of like figure out how we take on as a as a company sorry there's my dogs again when you're having these conversations with these Brands right so it's like in these large companies I'm curious like how you even have a conversation about layer three like first of all like how

do you explain it but like I mean I'm going back to like um what are these these companies barely understand blockchain and the difference between like um ethereum and Bitcoin versus like Tron and finance smart chain like or at least that's my impression like maybe there are a few within the company that that uh can hang there and start to think about it but then but then you're introducing the concept of not only Layer Two you're like but but also player one layer two and now layer three how do these conversations go and maybe you could start by just like when you're having a conversation with a with a major brand who wants to have a crypto strategy uh how do you define layer three to them and begin that

conversation yeah it's it's uh and it's almost like we don't use the word layer three um we just say Enterprise ready blockchain okay um the way they look better the way they look at it is they can now customize a blockchain to their own needs they can have privacy and they can run their own tokenomics whereas in they have sovereignty over the change so it's about the features and you're talking about the features you're not talking about the tech you're not saying layer one layer two layer three unless they start asking those questions yeah that when you talk to a crypto native company you're having a technology discussion when you're talking to a brand you are having a product discussion and saying what can this

thing do for me how does it benefit me what are its features and you're having very traditional product discussions and they understand this is like oh okay this is turned in they they view Layer Two as like proof of concept science project they view layer three as now we have an Enterprise ready system and they're saying how does this hook into this how does this hook into that you know am I buying this on is is my stuff going on AWS or Google cloud or is this going into the ether and things like that and only in layer three can you make you know actively wise discussions around that uh everything that's happening in Layer Two with the big bigger named Brands functionally is a proof of concept

they're just they're just trying something out but you can only really be Enterprise ready and Enterprise grade in layer three I guess what part of what I'm wondering too is Steve is like you're talking about like um the features they care about scalability um sovereignty ability to launch your own token set your own monetary policy all of these things I I imagine that um the business development team say from Tron uh for example or or pick your your non-etherium side chain is having that same type of discussion or like even like a cosmos chain for example it's the same sort of launch your app chain same sort of uh discussion um and my impression of the sophistication of some of these companies and Brands maybe you can

correct me it's like they don't really know the difference from a security perspective between something that is rooted in the security of ethereum and something that's not say an independent Sovereign app chain and I'm curious if maybe that intuition is wrong maybe they're they're starting trying to understand that but like I'm even wondering like back there so you have the feature discussion but here's 20 other app chains having the same sort of features discussion except you're you're saying no on layer three you have uh the economic security of ethereum and like does that resonate or how do you even explain the difference between that and uh you know typical app chain or sidechain I'd say uh

all right six months ago you'd be exactly right but today when these large Brands call us they are saying uh we have chosen ethereum it's the only one we trust we've made a decision and uh we now think that layer three is the place that is where we want to talk so when we are talking to these large Brands the vast majority of them without us saying anything to them have said look we think we think it's going to be ethereum we think that's the most trustworthy one to work with and we don't do any selling at all of ethereum

and and then Layer Three is vastly very quickly there's consensus that very I don't think any of the large brands are interested in talking about Layer Two they are all only interested in talking about layer three with us um I am I am shocked at how the sophistication has vastly changed in these companies in the last six months they have hired up crypto teams they have hired people from crypto that know what they're talking about um I was on a call with a very large brand earlier this week and I haven't met a brand yet that hasn't

watched the bankless episode where you had me on last time not a single brand is not aware of that video um they all refer to it um and they are hiring up teams like uh I'm not kidding that like I talked to a brand where I was expecting to really have to change my language and not use very crypto specific language but what happened was the the the person I was talking to in the other side which was the head of head of crypto for a very very very large brand he was going Toe to Toe with me on layer three he had done his own research without me and I was like holy mackerel this guy's on it um I'd say there's about

20 brands in the world right now that have crypto teams that are that are going to be the people that are showing the other brands how to do it and um there's there's a change in the wind they're all just saying it's ethereum that's what we're doing we want to do ZK and we want to do layer three and those three things are becoming things that are just common in every single meeting that we are in and they want us to get to layer three so much faster than frankly we're capable but they are all wanting to like fund and be part of uh their own version of opportunity and do their own proof of concepts with their own brand and me as as Chief product officer I'm like interested in making sure that we

gather the product requirements and what I'm finding is we're having some Brands push us into areas like privacy they're like can we have human specific privacy rather than blockchain specific privacy can each human decide whether they want to be private and we bifurcate the data on the fly in real time or can they choose per transaction which data is private and so that's where like a ZK Porter gets really sophisticated as we get Enterprise ready so so David I think six months ago you're right that's exactly where things were but we've got a gaggle of 10 or 20 big brands that absolutely know what they're doing

yeah and CK Porter by the way that's uh your data availability layer for uh the ZK sync ecosystem so I mean I that it blows my mind honestly that brands are this educated in listening to bank lists so uh hello Jeff Bezos we appreciate you listening to Vegas um you guys this is going to take a lot to to pull off still there's a road map ahead security audits ain't cheap you've done a raise recently a 400 million dollar raise I believe and that's in a in a bear market so I guess um the private Equity is uh is still humming okay or uh they believe very deeply in the mission or some combination of both what can you tell us about this recent raise uh Steve that people should hear

yeah um you know going back to those Forks in the road where you take actions to show who you are um when Alex brought the team together and we said we're going to go raise money you know we're we're characterizing we're like look um we're in a bear Market um we want to show who we are how about we raise an incredibly crazy amount of money but do it on Mission do it in a way that's us and do it with partners that believe in back then you know we kind of gave it the name Fair raise like how do we do this almost in a way like when Andreessen and white combinator came up with the concept of a safe and made doing Bridge loans much more standardized for

Founders and much more safe for Founders to do we're like how can we create like a fair raise model that um shows other projects how you can raise a ton of money but do it in a mission-driven way and can we get some top tier VCS to stand behind this and be with us on it and I so I couldn't be more prouder to say we've now raised a total of 458 million dollars of mission-driven money um and then what how that breaks down is um we just raised 200 million uh with the leadership and partnership uh that we're so proud of with blockchain capital and dragonfly Capital led the way

um and working with blockchain capital they are 100 behind the concept of fair raise I think they're going to be the leaders in this I think for folks that want to be Mission driven and want to be raising capital from VCS because they need capital in order to build their project I think I think blockchain Capital might come out to be one of the preeminent leaders in this space as a result of the way we raised money with them but we also had um Anderson Horowitz is another big player in this as well they were our series B lead they also came into this round with the maximum that they were allowed to re-up and then we have a brand new tier one Venture partner that I'm super proud to announce and that is lightspeed Venture partners

um and we set out to say like how can we have the who's who of Silicon Valley in New York City but do it in a way that's on Mission and um we we did raise this money in a very specific pattern that we hope can be the gold standard of how to raise money uh and and still keep your soul and how to do it with VCS that want you to keep your soul and are also on the mission same mission that we are on so the 458 million breaks down like this um it is 200 million in equity coming from dragonfly and and blockchain it is 200 million that we have in an ecosystem fund that's solely dedicated ecosystem projects we cannot use it for ourselves that comes from bit Dao

we have 50 million that came from our series B financing which Andreessen LED and we had 8 million that came prior in a series a and seed to that so that's that's how you get to the full 458 million of that it's 200 million which is the newest Equity raise that we just raised um and and couldn't be more proud of that we you guys all remember we had our Aptos moment and so we're like we want to be the exact opposite of that um and so I said this on the last um show as well so creating a little bit of separation from the equity raise that we did the manner in which we did it we set it up such that if we ever did release a

token we wanted to be able to make our decision about our mission about any sort of token if we ever offered one we wanted to be able to do that whereas under our control and we could do it in a way that again our actions led and showed who we were so um I think the last time I was on on your your guy's show I said we are committed to a one-third two-third distribution where one third goes to the shareholders of of matter labs and two-thirds would go towards uh supporting the ecosystem we talk about tokens now this is the tokenomic that we had committed to um so we said how can we keep that

commitment but raise a ton of money is basically what we went after um and we've done it um so we are not announcing a token what we're announcing is the way we raise the money says if and when we do have a token we have locked in no matter what it's a one-third two-thirds wow so so that was a commitment that all investors signed up for say hey uh if you invest in US two-thirds of the token you don't get yes wow if yeah if we have a token the way the structure works is the shareholders of

matter which is the founding team and the investors get one-third two-thirds will be distributed to the ecosystem and we'll Define that later how you know if we have a token we would Define that later but that is locked in stone and that is one of the foundational cornerstones of what we mean when we say fair raise additionally additionally and equally as important we have negotiated any of the the right to purchase tokens by investors is such that we will be able to transparently show everyone that the lockup Provisions avoid all possibility of any massive sell-offs

that is another component of fair raise so we we all know that the greatest fear when when someone does have tokenomics is that there's it's a pump and dump or something like that foreign if we have a token it would be incredibly obvious that that is not what we're doing that everybody here is for the Long Haul and so in a bear Market raising having 458 million dollars and having it in such a way that it can be like in code guaranteed mission-driven is something that we couldn't be uh more proud of as a company and again like we just want to show that we're walking the walk as we go here and and I gotta say like a partnership with blockchain

capital with dragonfly with a16z with light speed it's it's amazing and I think it's a moment for all founders looking to potentially figure out how they can how can I have money for my project but do it in a way where I don't sell my soul we now have some investors that are on board with a way to do it that we could maybe make the gold standard out of maybe it can become maybe Fair raise can become a thing like safe is a thing um and if we can do that for the community then then that's something that we'd be super proud uh to do I do think that two-thirds for the community will be very well received and Steve as we uh draw this to a closure I gotta ask you a kind of a spicy question so David

and I of course we love all of our children we love ethereum but we also love all of our layer two children because they are moving the dial forward on this whole bankless Vision that um we've had when we started which is to make the world more bankless uh more self-sovereign people with control over their own decisions and their own money um we haven't uh we haven't been able to help but notice that there's some increasing spiciness between layer twos it's a layer two on Layer Two kind of attack or spice or a little bit of back and forth and uh kids are all going through people we hate to see the kids fight but you know uh it's it's it's part of it like do you have any comments on this like is is more spice flowing

these days is this a healthy thing how do you think layer twos can kind of be competitive wow and and drawing out their own advantages uh without kind of uh you know we've seen certain tribes within crypto get toxic let's just say and get overly tribal how do we how do we avoid the worst outcomes of this while still fighting for the best and fighting uh and being competitive that you know from our perspective and how how we see it is I get excited when I see other projects succeed like when when arbitrum got Nitro launched and they got a 7x boom I sent a note to each of the founders congratulating them and

I was like guys killer like this is awesome when I see like starkware like building its Tech and I see them like getting into layer three and doing amazing things there like I get excited personally the spiciness is on Twitter um and and I kind of view it around it's kind of enjoyable to watch because I personally you know anyone can read my Twitter account I I don't participate in the spiciness at all I'm very focused on getting our product and our mission out the door and you know we have events like Steven uh you know over over at Arboretum Mr spicy pants um you know see that right there Steve that's spicy though you didn't do it on

Twitter but you did it right now that's a good nature you know all right I'm like you know he he tweets like you know you guys don't have an end-to-end uh prover in test net and you guys are are being misleading to your audience and I I so I just texted and I'm like Stephen like we had coffee and talked about this I urge you to read our public road map and your Tweet is gonna be very unfortunately timed because you tweeted it the day before we're releasing our public end-to-end prover on testnet just as our roadmap said we would

and he he you know congratulated me you know because we have a relationship and we're friendly but then his tweet was like those guys are the Devils you know they're misleading you and blah blah blah I'm just like I'm like all right if if he wants to be a um shade thrower on Twitter that's his choice and he's welcome to do so um I will only say positive things ever about Arboretum I think that their engineering and their technical team I think Hunter on their Community team is amazing and if he wants to throw shade at me I'm going to do nothing but throw love back and the worst I'll ever get is calling Mr spicy pants um Ryan you uh you you don't go to the

crypto conferences so you don't have the luxury of uh hanging out with these people behind the stage because that Missouri mainnet it was Steve Mahalo from polygon Stephen from from arbitrum and these all these people like hang out behind the stage and like to chat and everyone's got a smirk everyone's got some work on their face but everyone's also super friendly behind the stage two but at the same time like here I've at the same time a hollow comes and I I was wearing one of these and he's like can I get this is Zeke our Dev cat because they're a little dude I didn't know that and he's like he's like can I get one of those for my daughter that's so cool you know like off stage and then this is this one I'm switching to this hat soon

I didn't know I didn't know zkc had a mascot we accidentally created one for smart con and it just took off so it's it's with us now it's part of a history Zeke the dev cat is there a difference between spice like when it's Layer Two to Layer Two versus like Layer Two to Alternative layer one or is there also some friendliness there I mean uh Luigi was on that panel too and he and I had he and I have caught up and now we're getting to know each other off offline too I I think that most of the spiciness is just when marketing teams inadvertently use the word like launch or live or in production and then Steven's like that's that is inaccurate it's a semantics fight it it is and we

now have training sessions like with our marketing team to be like hey when when we're talking about Milestone four and five please don't use the word production or live or launch or or ethereum because Mr spicy pants is gonna get up there um and so I I I I enjoy it it's like watching you know the comedy news of everybody going back and forth I don't personally participate in it I think it is valid to critique each of us and say hey you guys just made a claim it's not accurate I think it's I think it's like like to say like polygons marketing team says they're open source like if you look at their code they're

only source visible and they're copyright protected it's okay to say that I don't think it's okay to say polygon is evil because they messed that up in their marketing that's not appropriate and so I I'm happy to receive the criticism like when we did a hundred days to mainnet I personally wouldn't have done that again um I think it gave people the impression we were launching live we didn't think that when we created the program but afterwards we're like yeah I can absolutely 100 million percent think see how people thought that meant we were doing the Gated release you know on on October 28th and I think it's a valid criticism to say hey guys you should have done a hundred days to your gated release not

to Baby Alpha that would have been more informed but it's not okay to say there were evil people because you know we we said a hundred days to mean that so I I hope that he takes off his spicy pants and and stays friends with us I would certainly welcome him onto the ZK bus if he ever wanted to come on it I think he might be the last Bastion of optimistic Roll-Ups who knows but uh we would welcome him into the fold if he ever did want to come in and I I consider him a compatriot and a and a fellow inventor you know that is trying to make the world a better place and if he wants to get spicy on Twitter he's welcome and I I will never respond back with any spiciness from me well um

I I can't say stop doing it because it is uh somewhat entertaining but um I'm glad you guys are not uh descending into into toxicity because uh that would be unhealthy for the space at the end of the day we are all here to build a more free more self-solving world uh so Steve this has been a pleasure thank you for spending some time with us on this full disclosure episode I'm gonna close it out here risks and disclaimers of course everyone you know crypto is risky so's ethereum so is the frontier of layer twos as is D5 you could lose what you put in we are headed west this is the frontier it's not for everyone but we're glad you're with us on the bank of this journey thanks a lot [Music]