zkSync Era live, More Euler funds returned and more - The Daily Gwei Refuel #556 - Ethereum Updates

Transcript

hello everyone welcome to another episode of The Daily way refuel where we cup the latest news in ethereum ecosystem I'm your host and this is honor and today's 27th of March 2023. all right everyone let's get into it so we have an update here around the bug Bounty for the chappella upgrade so as we all know the shapala Shanghai upgrade is going live on April 12th not very far away now and the ethereum foundation has bumped up its bug Bounty uh kind of reward uh uh with a two times multiplayer so it's up to 500 000 US dollars per bug until April 5th now of course there are different levels of of bugs here not every bug is going to be paid out the same but you can get the maximum which is 500 000 so the figure

Sierra doubled right now so you can see the maximum for a critical bug is usually twenty fifty thousand dollars but that's doubled uh up to five hundred thousand uh and the severity has to be high impact and higher likelihoods obviously a critical severity there but there are um bouncy rewards for lower severity medium and high severity so you can check this out for yourself of course I'll link in the YouTube description below and you will also uh earn points for discovering bugs too that put you on the leaderboard so you can see here that this is basically a a pretty cool way to show that you know you're you're finding bugs in the core protocol and getting on this leaderboard collecting points here I'm basically doing uh having a flex I'm not sure what the what the points are used for if it's just for the leaderboard or if it's for

something else um but yeah there's there's that to it as well but I'm sure earning up to half a million dollars is also uh pretty juicy for people so yeah you can go check that out if that's something that you're interested in uh as I said it goes to April 5th so about a week from today all right so uh Paul here from the uh Everlasting team so Everlasting uh they do uh I guess like a bit a bit of services in a bit of everything staking Services things like that uh that he put out a tweet where he basically tagged a bunch of accounts and uh hashtag run DVT so run distributed validated technology now this is a bit of a teaser here there's nothing uh kind of out about this yet but I was uh kind of given permission to uh tease this a little bit

so right now I'm running uh DVT so I'm running Opals at DVD technology on my solo sticking box and that's all I really gonna say about it but I'm running it uh and there's going to be more information about that so out about that soon but the whole process was pretty seamless to be honest getting set up with that and uh and and integrating it and as I said running it on the same box that I run my uh solo validators on which is a really fun experience so I worked with a few others to do this I worked with the opal team to do it I'll know there'll be more information coming out about this uh shortly hopefully but yeah I I truly do believe that dvto distributed validated technology is going to play an absolutely huge part in the ethereum staking ecosystem it's

going to make staking more secure robust and decentralized it's going to help uh a lot of these staking Services uh along and basically some of these staking Services can actually integrate DBT and not take custody of user assets at all so it could help them on the regulatory side where they basically just run the software and the custody of the asset remains with the users that they're serving that is kind of the end game to me for ethereum staking in that we don't have any providers that take custody of assets everything is just done in a non-custodial way and the providers really what they do is they just run the software for you and they can act as a pool of course as well obviously because uh the big draw of the the stadium providers and things like lsds is the fact that you can pull your assets in

there so even if you've just got one eighth you can stake that one Eve but I think being able to retain custody of that and being able to to control when you when you can kind of like withdraw and things like that rather than giving custody over to a centralized Service uh is is the end game now it's going to take a while to get there obviously it relies on the centralized Services uh integrating these this technology and they're probably not going to trust for quite a while but it's here it's I mean it hits here it's live on Main now like I'm I'm as I said I'm not going to say much about here yet but it's live on on Main Nets in an alpha kind of fashion but it's working uh and we know it works and we know that it works as advertised

so that's very very cool but anyway there'll be more information about this and I'll be able to give a deeper dive here uh but uh yeah I just wanted to put that out there for you guys all right so there was an Mev event over the weekend I believe called Mev economics which was organized by each Global and flushbots took place on Friday so it was six and a half hours worth of talks from the smartest researchers and builders in the space covering a wide range of topics in the Mev space uh and and this account to ruins intern here has put together uh some of their takeaways uh in order of I get or chronological order of the talks now this is a great little thread to recap uh exactly uh I guess like the most important talks and the most

important parts uh as tarun's intern has seen them and as I said there was 600 six and a half hours worth of talks that you can go see I believe they're all on YouTube I believe I believe to ruin this account uh actually linked it at the bottom maybe uh this is a long thread yeah I can't remember now but uh the talks I believe are available on each Global's uh channel so you can go check them out there but if you don't have time to sit through all the talks obviously it's a bit of a slog to get the the meat of it well then this account has done this thread for you the thread itself is over 28 tweets uh but yeah it's well worth the read if you're interested in getting a recap on that event that happened on a Friday and for all I think from what

I've seen and what I've heard it was a really really great event everyone had a lot of fun everyone enjoyed it there was a lot of great uh talks done at the event a lot of great insights given so yeah I highly recommend either watching some of the talks or just reading this thread from tarun's intern uh I'll link it in the YouTube description below for you to do so all right so uh I did tease last week on on Friday's episode that ZK sync was teasing something that they were going to release and it came out shortly after I put the episode live actually I think just before I put the episode live I'd already recorded it obviously the news came out so the news as you all probably well know by now is that ZK sync error or uh zk6 ZK evm is

now live on mainnet for everyone to use so you can Bridge funds in and use the various apps now there's this thread here uh from the ZK sync account that explains exactly what it is uh what what what stage they're at you know that the fact that it's still Alpha software it is definitely not anything that you should be storing massive amounts of funds on or anything like that but they did go the extra mile in terms of audits like I noticed they spent 3.8 million dollars to secure uh the ZK sync error including seven independent security audit audits three internal Audits and two public security contests so that's a lot of auditing uh and Security checks there so that's pretty cool and then they continued and they said they had an open-ended bug Bounty program and an

open are they open source DK sync errors code now given how many audits they did both external internally along with open having a bug Bounty program having security contests you'd be very surprised if there was a a critical severity bug found right maybe there's other bugs found in the code but you'd be very surprised in saying that as I said it's still Alpha software there are still kind of centralization vectors there's still a bunch of um things here as well that you can see on the list here such as uh the security Council stuff like that so as I said don't store massive amounts of funds on here bridge over some play money play around with it see what it's all about uh and you know and get get your head around it and use

the apps but yeah I I me personally I'm never I'm definitely not going to be storing a significant amount of money I just yet on this on this um zkvm on sorry ZK sync error but uh but yeah it's up to you how much money you want to put on there how much you want to risk not to say that there is like a giant risk and you can get run at any moment but it's always good to to play it safe right especially given the long history of uh of unfortunate bugs within crypto and then they continue on and they explain you know what this is you how you can learn more Bridge fun the the bridges at bridges.zksync.io and explore the ecosystem as well uh and there was a Twitter spaces that they did too but this is very cool uh I guess like ZK

sync can now say they brought the first DK evm to mainnet I guess not that I think that really counts for much uh uh I I think that the users don't really care about that sort of stuff honestly uh in the long term it's really going to come down to really as I've said before I think it's going to come down to business development and marketing and I guess being the first EK VM on mainnet is I get a marketing point but it's a short-term kind of thing but that's not the takeaway from the fact that this is a huge achievement this is something that people thought was a very long long way away uh obviously it's not obviously it's here in the arm it's live even though it's in Alpha fashion and even though there are I guess like guardrails and security concerns around it in terms

of sorry centralization concerns around it uh it doesn't really matter I think what matters is that it's here people can use it and it's evm compatible which I I guess is what uh we'll um will appeal to a lot of people because they don't have to change the way they use things and learn new Concepts and stuff like that so anyway you can go check this out for yourself I'll link this thread in the YouTube description below all right so speaking of ZK VMS uh polygons EK VM launches today so there is a mainnet beta launch event happening at 10 A.M eastern daylight time which is after I mean you may be watching the refuel after this event already happened uh but I believe the refill goes live two to three hours before the event so just a reminder there for anyone who

hasn't watched it yet and it's hosted by eight Global you can go sign up to attend and I'm sure you'll be able to watch everything but there's a bunch of speakers uh obviously people from polygon vitalik is going to be there um Hudson Jameson who now works at polygon actually and a bunch of other really great people from all the polygon ZK teams uh uh from Maiden xero uh and of obviously Hermes which is now just known as the polygon ZK evm and here's the schedule down here uh so basically there's going to be um obviously uh welcome uh technical updates uh a fireside chat with vitalik and uh talking about security and Audits and yeah I mean you can go check out the schedule I'm not gonna I'm not going to read through the whole thing there but exciting day for polygon with launch of

their ZK VM we're going to have 2z cave ZK VMS live and then a few days of each other obviously there are more coming like starkways building one you have scroll you have Taiko uh there are probably others that I am I'm missing right now because there's just so many of these days which is which is kind of fun right um but yeah I mean I I think that people tend to focus sometimes from what I've seen on the fact that uh they're like okay well ZK vm's Alive Now what right these are just gonna be the same applications that we're used to is it going to be the same uh experience that we're used to just with cheaper fees it's like yes and that's kind of the point for for one half of it so I believe like one half of it is the

scalability right the other half is opening up a new design space for Builders because as I've said plenty of times before uh layer 2 technology will allow us to do a lot more things and be a lot more expressive than layer one does and it goes far beyond just being a scaling solution but the primary I guess use case for the foreseeable future will be as a scaling solution but and the scaling will lead to those other things happening you know leading to new novel things being built but what users are going to feel first is the scaling gains with apps that they're familiar with using such as all the amms that they use on ethereum layer one the money markets that they use right the yield uh apps that they use like those sorts of things are going to be redeployed on these EK

VMS and it's going to feel very similar to ethereum layer 1 in terms of interacting with them but it's going to be cheaper and faster just like you do it on arbitrary and optimism today uh but you'll be doing it on a ZK VM instead now as I said I think the the long-term winners are definitely going to be determined by by um a business development and marketing because the business development and marketing is going to be what gets developers to build on these platforms and what gets the Innovation going which then brings the users so you always have to go to the sauce basically the top of funnel when looking at these things and the top of funnel is pretty much always marketing and Business Development because how else are you going to get people make people aware of your thing and then get them to build on it and use

it that's how you do it and that's why the biggest companies in the world invest a lot of money in marketing right and and still like sometimes people will say why does McDonald's and apple need to need to do marketing if everyone already knows who they are well everyone already knows who they are because they do marketing right it's kind of like a if they stop doing things they stop doing marketing if they stop uh being front and center in people's minds well then people will forget about them and not think of them right maybe not forget about them completely but it's more of staying top of mind for people so that's the same thing in any industry really uh obviously and especially in crypto given that we have tokens attached to these things uh the attention you know as long as you can get attention on your thing

you're winning the game and that's been a lot of my investment thesis actually for a lot of these things uh and and you can actually look at like the top 20 and you can and look at what's what's in there and you can think well a lot of these things aren't actually fundamentally fundamentally valuable it's like yes they aren't fundamentally valuable but they have the attention right and attention is is the aim of the game in uh in in pretty much all Industries and especially in crypto so as I said I think long term Business Development and marketing will be the deciding factor but for the foreseeable future um given the users that we have right now the developers that we have right now uh I think that a lot of these ZK VMS are going to go live people are going to experiment with them and it's

going to take quite a while quite a few years before we see which ones end up being the uh I guess like big Winners right uh and and which ones end up being maybe the small winners and which ones end up being useless or people just don't care about them right unfortunately that's going to happen to uh some of these Solutions because not everyone can win uh but I'm here for I'm I'm here for free market competition free market Innovation and I'm super excited about it so anyway you can check out a polygon ZK VMS uh um event here if you are what watching the radio before the event uh because I think it's going to be a good one all right so speaking of layer two's uh dogen here has introduced something called op clay which is an OP stack

chain that uh that enables or that turns an iPhone into a hardware wallet with full account abstraction support this is very very cool so you can get a breakdown of exactly what this is and how this works in this Twitter thread that Dogan has put together here um but why this is really cool is because the iPhone already has a secure or something called a secure enclave and that's where the name op Enclave comes from that allows you to basically have a really secure wallet on your iPhone and the way this if your enclave works for my understanding is that uh it stores basically a private key in there and nothing can access the private key nothing can can decrypt it or anything like that there is literally I don't

even think you could access it if you were able to get uh root access to the iPhone I'm able to get into the kernel I'm not sure if that that is true but it is it's extremely secure right not to get technical here but from my reading and from my knowledge it is extremely secure so we can leverage that within crypto to make really cool account abstraction wallets and that's exactly what op clave has done here and they've done a lot of work on this actually so you can see a pretty detailed description of what's Happening Here screenshot at the top obviously it's not the most beautiful thing in the world but it was done at a hackathon so you never expect a hackathon project to look nice right as long as it's functional that's what it should be doing um and this is something that uh that

you can look at the source code for I don't think you can play around with it yet but you can look at the source code for it you can read this thread obviously on Twitter about it um but this is the kind of stuff that I love seeing come out of these hackathons obviously the ones hosted by eth global are the biggest but these projects are uh not all of them and not even most of them but some of them go on to become the next big you know billion dollar zero to one idea that happens uh that that gets um built out within the ethereum ecosystem and the you know if you're an investor or if you're someone who wants to give up to date and be really early things these is probably ground zero right this is basically where you need to be this is the start

of the journey is looking at these hackathon projects and being okay which ones do I think are actually uh have you know potentially have product Market fit which ones do I think have a succeeding and how can I help them basically and you can help them in many different ways as I said if you're an investor you can possibly invest in them uh if you are someone looking for a job and one and want to actually work for an early stage startup that's that's perfect if you're an educator you can educate your audience about it just like I am right so there's multiple different things you can be doing to add value based on the fact that you're essentially as I said at Ground Zero you're the earliest you can be to a lot of these projects and as I said it's not just op Club you can go to the Showcase

here on Earth Global's website and go and comb through it all and see see what's happening and say everything that's been submitted but the reason I wanted to highlight op cloud is because I just thought it was really really cool and it got a lot of attention it popped up on my feed uh and it's it's using kind of like novel technology and it's using technology like optimism optimism to create this and account extraction which is obviously very topical lately to uh to create this so anyway you can go check this out for yourself I'll link it in the YouTube description below uh for you to do so all right so just a quick tweet here from Zach Williamson who is the CEO of Aztec Network correcting uh someone on someone who doesn't understand the difference between a trusted setup and a multi-sig so it's a very simple

difference a trusted setup is a one-time generation of an encrypted secret if anybody knows the secret the ZK roll-up isn't secure so there I mean you'll probably use the trusted setups you may have heard of tornado crashes set up that was done a while ago I actually participated in that quite a while ago now uh the kzg ceremony uh is a similar kind of thing where you've got like a setup where only one person need and it needs to be honest and then the whole thing is secure that's a trusted setup right whereas a multi-sig is completely different it is a small group of privileged individuals who can control or change a smart contract so for example pretty much like all the l2s today have a multi-sik on them right and uh the bridge where the funds get

bridged into is controlled by that multi-sig and if they wanted to then they could steal the funds from there not saying that they would but they could steal the funds from there right that's that's the difference there so a multi-sig is definitely way less secure than a trusted setup uh and I would even I would even say it's not even worth comparing the two because there's such a huge difference between them uh but I just figured that was worth pointing out because there may be some confusion being pushed by uh certain people in the industry that I wanted to uh to correct there so anyway just a quick note on that one moving on uh so the ethereum attestation service has just shipped a new feature which is private data as testations using Miracle trees so you can now leverage private data

attestations for secure verification selective disclosure and enhanced privacy without revealing the entire data set now I've talked about the ethereum access Station Service before about how it's a public good and it's trying to uh create kind of like a attestation uh station I guess you could call it uh where you can build up these attestations over time and be able to do things like just centralized identity and proof who you are and do it in a privacy preserving way and in a way where no one party is actually getting a benefit from this as I said because it's a public good so yeah this is the new feature that they announced and integrated today and now the full details obviously are available in the blog post which I'll link in the YouTube description below and it requires uh a little bit of

knowledge about Merkle trees and they explain that in the blog post so I I'm not going to try and explain like like I'm five on on the refuel but you can go give this a read for a two to kind of see what it's all about and then they explain how they're concealing and revealing the attestations and how it all works under the hood and everything everything like that and they also give a bunch of example use cases which is something that I wish more apps did when they actually announced new features because it I think it's quite hard sometimes for users to immediately recognize a use case for something uh so having that in the blog post where you announce the new feature is actually a huge a huge benefit for users and these are some of the example use cases that uh they've listed here so something like

identity verification Access Control employment history and references academic records you know all this sorts of stuff is made better and more efficient and more private and secure by using something like an ethereum the ethereum gestation service to to handle all this so anyway you can go check out the blog post as I said I'll link it in the YouTube description below uh but I do as I said I do wish that more apps did this when they announced new features so anyone who does marketing or anything for uh for apps or products out there yeah take that on board and and maybe I'll see one of those in in your future announcements there all right so we have a really positive update on the Euler Finance exploit so 51 000 each I think it ended up being

more than that I think it ended up being about 58 000 eth was returned to oil of Finance which represents oh and a bunch of dye as well which represents just over 50 of the total funds stolen this is very very cool I love this uh and I I remember I said last week or just after the exploit happened that I thought that uh oh I initially said that I thought that there was a low chance of the funds being returned because the hacker was watching them through tornado cash but then a couple of days later the hacker started doing really really weird things like sending some funds back sending some funds to the Ronin uh Bridge hacker for some reason sending funds randomly to people and then uh since then they've just been doing more and more of those weird and random things and now they've

returned a huge chunk of the funds to the uh to the um oil of Finance team here so yeah it seems like most of the funds should get returned it seems highly likely that most the funds will get returned here which makes me extremely happy because as I've said plenty of times before oil Finance is one of my favorite um kind of D5 apps in the ecosystem one of my favorite teams obviously you guys know I'm an investor in them uh but yeah I I kind of saw this happen I was like you know this sucks it sucks for the team it sucks for the users and then I I kind of was really sad because I'm like it feels like there's a low chance that the funds are going to get returned but now it seems like there's a much higher chance so really great to see this

hopefully the rest of the funds get returned well not all of the funds can get returned given that some were sent through tornado cash and some were sent to random users and the Ronin Bridge hacker which is North Korea as you guys know but almost all of that could be returned and then the the shortfall could potentially be be covered by all of themselves or maybe some Insurance Fund that they spin up you know who knows but yeah I'm very glad that users are going to get at least right now at least half of their funds back hopefully almost all of their funds back once everything hopefully gets returned in the near future but I'll keep you guys updated on that one all right so Hayden Adams from uni swap shared a chart that is on the blocks data section here so the Dex versus sex

volume ratio is at an all-time high so it's up 25 since the FTX collapse to 20 this is really insane and really really cool so basically what this shows is that dex's account for 20 of the spot trading volume and centralized exchanges account for 80 and this is up from I mean basically zero percent at the beginning of 2020 so in three years we've gotten to twenty percent now obviously um liquidity Network effects are really hard to break uh and also uh D5 has a lot of its own issues obviously with scalability and fees and stuff like that which made it harder to compete with centralized exchanges but those issues are slowly getting ironed out slowly getting um worked away and that means that more more people are using

these products more and more liquidity uh is flowing into them and uh the the percentage of Dexter sex spot trade volume is going up now I can't wait until the day that it's at least 50 and we basically flip in the the volume because that to me signals that we've basically you know won in in the eyes of um I guess the more mainstream audience for me decentralized Finance or D5 generally has already won it's just a matter of getting it adopted and and scaling it out and things like that and developing it out um but I just think it's such a huge step above uh centralized uh exchanges and services that to me had already won I mean it won back in 2019 when I was fully convinced on on D5 right we came fully convinced on D5 it won back then in my mind and I knew it would take a

while to get to a point where it took over C5 but I think eventually it will and as I've said before I think C5 will eventually just become a Fiat on-ramp for for crypto I really do think that we can live in a world in sometime in the future where a lot of C5 Services actually don't custody funds at all they do a kind of NPC scheme where they are a signer on a wallet but uh they don't custody your funds directly and uh and and they and coinbase already does this with with um their coinbase wallet but uh essentially giving users a way to still have recovery options uh and still have like someone that's centralized to to help them get get their assets back if they lose their password or something

like that or they lose their access to them for whatever reason right um but uh but you know not having custody of the funds which I think is is a is a pretty big deal obviously not your keys not your crypto he's the Mantra but uh but yeah very very cool to see that the centralized exchanges continue to not only grow but eat into centralized exchange volumes which is exactly what we want to see all right last up here was a tweet that I put out earlier today that yeah I I wouldn't say it caused too much controversy but I got a bit of replies about it and people asking me to expand on it more so I figured it was worth expanding on the refuel here so I read out the Tweet first they said layer twos are not currently decentralized in fact many of them are currently more

centralized than the most centralized alt-l ones in saying that many of the layer 2s have credible paths to decentralizing every part of their stack and will have an easier job of doing this than a layer 1 would this is the goal of layer twos not today's current state but a future state where they actually inherit ethereum security and decentralization properties the ultimate dreams that the layer twos can become decentralized while offering cheap transactions to users and an infinite Garden for developers to build within this is the Guang so there's a lot to unpack here and I'm going to try and keep it rather relatively brief so I don't go over time too much uh and also you guys know I just speak Off the Cuffs I haven't prepared notes for this or anything so I'll probably be jumping back and forth a little bit but I want

to kind of break down why layer 2's have an easier path or a much easier path in my mind to decentralization than layer once so really the Crux of it is that because layer twos are essentially Outsourcing their decentralization or and their security uh to layer one so when they're in their end state two layer ones they don't have to worry about everything that the layer one is have to worry about so for example layer 1 ethereum why do we consider layer 1 ethereum to be decentralized like how did we get to the point where ethereum layer 1 is a decentralized ecosystem that has no Central actor has no obviously multi-cigs or anything like that there is no uh there's not even a central group of people that can control

the chain how do we get to that point well it took a long time right and there's and there's a lot of different properties of ethereum that makes it decentralized the distribution of eth right the distribution of eth has to be uh widely distributed especially on a proof of stake uh scheme in order for it to be decentralized we had to come up with the previous from Stakes game and develop it and research develop it over many many years and integrate it in order to upgrade ethereum's decentralization to get to get it to a point that we were happy with right and there's still lots of work to be done there we have client diversity we have 10 different clients on the CL and El side of things that took a very long time to get up and running and that and sustaining that in of itself is very

expensive it's not a cheap Endeavor right we have uh thousands and thousands of of nodes running and hundreds of thousands of validators running all around the world we have an extremely strong social layout and I could go on about all the properties but as I said I want to try and keep it brief but those are just some of the things that have developed over many many years to make ethereum decentralized so does a layer 2 have to worry about that no it doesn't and this is the beauty of a layer too it doesn't actually have to worry about all of that for decentralization because in the end State when a layer 2 is not secured by a multi-sig it has its fraud proof silver liberty proofs in um and and can't be arbitrarily upgraded by a small group of people essentially

the layer 2 becomes a one of n trust assumption whereas where essentially you only need the secret one sequencer to process your transactions to get the benefit of Layer Two and even then even if the sequencer went down you can fall back to layer one because ultimately a layer 2 system is just a set of smart contracts that lives on the layer one and because the layer 1 is decentralized it is secure it is robust resilient it doesn't matter if the layer 2 was to go offline completely you can still fall back to layer one and you still have access to your funds so that is and that's why I'm talking about layers in their end State now obviously obviously as I said all pretty much all the layer twos today are nowhere near that they're

all very centralized seal but they have a much much easier path of getting to the decentralized state because for them getting to the decentralized state really is just removing the multi-sig honestly and just and and basically um a I'm talking about like decentralizing it so that there is no Central party that can I guess like still use the funds from the bridge contract for example right or rug user funds from the bridge contract really ultimately all they would need to do is get rid of the the centralized controls the multi-seek or any kind of like upgrade keys and making that those contracts uh immutable um or immutable to a point like there are some contracts that maybe you know they don't want it mutable and that's controlled by a governance uh or a dow or something like that but getting it to

that point is much easier than the layer to itself having to go through all of the things that I just talked about for ethereum layer one to achieve decentralization and that brings me to my point about other layer ones they have to do that to get to the decentralization point that ethereum is at so their battle is is uphill right they've got an extremely tough battle ahead of them they have to basically develop everything that ethereum has developed over the years since since Genesis right and and do that to basically uh uh get to the point where they're actually considered decent like ethereum is whereas the layer twos they just piggyback off ethereum they just pay for the security of ethereum right they pay the gas fees and as I said once they're in their end State and they

don't have the essentialized controls or any more any more vitalik has approached about this of getting to the point where their training wheels are off the centralized controls are off they inherit that decentralization and and security there now there are other points of of contention with layer twos as well such as as I said the sequencer even though it's a one of n trust assumption where you only have to trust that one sequencer will process your transactions and you'll be fine that's not great for censorship resistance obviously because what ends up happening is that if there's only one sequencer and that sequencer is censoring you there's nowhere else you can go except layer one so you can't so it's still you know it's still fine because you can go to layer one and um and you know a lot of the layer one censorship that we've

seen in the past has been beaten back and that's another thing that I've talked about before and that's another thing that uh that makes something decentralized is being able to be censorship resistant but you can fall back to layer one still right but obviously you know a lot of users won't want to do that because layer one is expensive and maybe they can't even afford to do that because of it because layer one is expensive so how do we make the layer 2 censorship resistant as well well we basically encourage decentralization or at least um distribution of the sequencer so let's have 10 sequences instead of one right so now you have 10 sequences that are hopefully individuals or entities that are separate from each other all around the world that will process your transactions right and from there even if nine of them are censoring you there

is still one there this is what I mean by one of N and in this case is ten one of n trust assumption even if that one is still uh processing your transaction uh and not censoring you the other nine can censor you all day every day it doesn't matter so that that is the beauty there now obviously there are other things like validators as well but the validators only need to be um uh decentralized out or distributed out for liveness and as I said before you can still go back to layer one even if the validator goes off line on layer 2 for life for liveness because you can process the transaction on layer one but it's the same thing as the sequencer where essentially you don't you you want to have a maximum liveness you don't want to have to go back to layer one so

we want more than one person running a validator more than one entity running a validator and that's why these layers who's introducing tokens to incentivize that right uh and you know you might be able to stake um and become a validator sequencer and earn free revenue from the network for staking your uh your tokens whether they be op or up tokens for doing so uh but still at the ultimately the layer 2 is still just a set of smart contracts that lives on layer one you can always fall back to layer one and once they're centralized controls are removed which are much easier to to remove than the centralization points of a layer one um you instantly get all of that decentralization and security so and I think another analogy here that I quickly want to use before I finish up

is imagine a D5 project on ethereum imagine there is a unisp up right and imagine uni swap had a multi-sig on it and it was a 305 multi-sig or something and it was a unisoft Labs team that obviously controlled the signers and at any moment they could do whatever they wanted to UNI swap now imagine that's all that that was in place for the centralization vector but unisop is living on ethereum layer one so how hard is it to decentralize unisop in this case well get rid of the multi-sig unusopsy centralized that's it that's what it's like for for layer twos um with a bit of extra stuff on top because there's a bit of extra complexity there but that's the analogy I like to use because that's just one thing whereas and then immediately uni

swapper becomes as decentralized and secure as ethereum layer one because it's it's immutable it doesn't have any centralized controls um and ethereum layer one is its ultimate source of Truth whereas these other layer ones because they are their own source of truth right they have their own validator set get and their own kind of decentralization or centralization properties they have to get to that point where they have kind client diversity they have a good distribution of um of of their native token they have a good distribution of validators around the world and they don't have too much centralization in that uh they have uh the ability for people to run nodes and they have thousands of nodes they have a strong social all that sorts of stuff right they have to build all that from scratch because they don't get it from ethereum and that's why I've always believed that

layer 2's are the better path forward for scalability of both uh the technical scalability but also social and decentralization or scalability because in their end States layer 2 is only meant to be an extension at the very base level an extension of ethereum's block space and to be an extension ethereum's block space you are considered to be decentralized and secure like ethereum with some other properties like obviously as I said this decentralizing out the sequence from the validator and stuff like that but that's how I view these things and that's why I believe that it is much easier for layer 2's to decentralize than a layer one uh but yeah anyway I'm gonna in that there are actually one last thing I wanted to say as well as is that on l2b just a

reminder you can actually see a risk analysis of every L2 that's live today and see what centralization vectors they have in place and what training wheels they have on right now I haven't seen an equivalent dashboard for layer ones so not only do we have do we you know not only do we know that layer twos right now you know pretty much all of them are still quite centralized and uh they uh they kind of can become more decentralized and inherent ethereum's decentralization and security later on we know exactly where their centralization points are and what they actually have to do to get to the point where they're considered decentralized we don't have that for layer ones uh really and maybe maybe we do and I don't know of it I haven't seen it if you know

of a dashboard that shows a risk analysis for different layer ones that is well you know as unbiased as possible please link it to me uh but yeah I'll link this in the YouTube description below for you to check out as well uh but I think on that note I'm going to end it there for today so thank you everyone for listening and watching be sure to subscribe to the channel I don't know if you haven't yet give it a thumbs up subscribe to newsletter join the Disco Channel and I'll catch you all tomorrow thanks everyone