So Bitcoin issuance like you said is every four years it just
goes half and eventually it will converge to 0.
Roll ups are using the L1 as the DA layer.
So we post our data to Bitcoin in the form of ZK proofs and
state diffs, which is a bit more optimized form of just sending
pure transaction data and we compress them, send them to
Bitcoin. So we do two things at the same
time. We achieve the Bitcoin level
security because the data is there.
And we also pay miners to be incentivized to keep the hash
rate high and get more fees and just continue the chain without
reducing it's security. And right now, the data size of
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journey today at nosis dot IO. Hello and welcome to Epicenter.
I'm your host Felix Lutch and today I'm here with the Co
creator of Citria, Orkun Kilich. Hi Orkun, and welcome to
Epicenter. Hi.
Hi, Felix. Thank you for having me.
Yeah, great to have you as usual on on episode.
We kind of want to start with how you how you got into crypto.
Citria is L2 like AOZK roll up on on Bitcoin.
So today's topic will be probably a lot about like sort
of like Bitcoin programmability things around that.
And you know, I guess want to probably know how you how you
ended up in that space and how you started to work in in
crypto. So like.
Please. Yeah, sure.
So I'm Mark and I'm one of the four Co founders of Chainmail
Labs, the initial contributors of Citrea and the CEO.
Actually, I got into crypto and Bitcoin maybe like 5 or 6 years
from now. And when I was in college, I was
getting some scholarship to some crypto based application
basically. And then I started to learn how
to open a wallet, how to receive funds, then how to do off Rep to
spend in local markets. I'm from Turkey, Istanbul, so I
was studying there. And then I started wondering,
OK, these are working fine, but it doesn't hit to the bank or
like it doesn't use any conventional infrastructure.
So how do I receive these funds? How can I be sure that I'm
actually receiving the funds? And I started looking into it.
I obviously heard about Bitcoin a lot, but then I encountered
this is actually something technological like based on
computer science and distributed systems and cryptography and I
started digging deep. Back in those days I was doing
web development for regular web 2 stuff, but as time comes I I
thought more and more interesting.
Then I started basically building smart contracts.
I first tried to build something on Bitcoin, but I realized I
don't know anything about script and it is very hard to do
something on Bitcoin. Then I discovered Solidity and
started building programs on EVM compatible chains.
But after a couple years doing that I realized I want to build
products I don't want to work on like different stuff, building
smart contracts and move on to another thing.
I wanted to build some real products that people can
actually use. And that's how we actually
started our company maybe 2 1/2 years ago in Istanbul with my
friends from college. We initially worked a bit on
privacy, when I tell you, and then Ordinals thing came up to
Bitcoin. This was early last year, maybe
around two years ago actually. We saw that some Bitcoin
developer built something called Ordinals that enables people to
embed some arbitrary related to Bitcoin.
And we thought, OK, this is cool.
What's how this can be even useful.
Then we start, people are actually printing the images on
Bitcoin. Then they try to build exchange
to buy and sell this image with Bitcoin.
And then things got more and more interested and we realized,
OK, people can actually do decentralized exchange on
Bitcoin. And I previously thought this
was not possible when I first entered the space.
So we wanted to play around it, play around with it.
And in two months we decided to build a basic Ordinals
supporting Bitcoin wallet. In a month we built it released
to the public. And I think in three months we
had more than 10K users. So it was a bit success for us.
And meanwhile, we also learned a lot about bit script and
Ordinals. And building a wallet is
basically you built the foundation for a super app and
we realized, OK, let's just build an exchange in the wallets
and just build an inscription service in the wallets, maybe
even some account abstraction features that we can build.
And around that time, we were doing designs like some paper
skirts on white board. But eventually our design
converged more and more into building actually a roll up on
Bitcoin because we were trying to add programmability to
Bitcoin by doing client side validation as Ek proofs because
big B privacy, the ZK pros or privacy.
We knew that how to do how to do it.
And eventually we realized, OK, we are actually reinvent grow
UPS. And we focused on this direction
and realized, OK, we can actually build roll ups on
Bitcoin today with maybe some broken bridge mechanism, but we
could fix it in the long run, we believe.
And then we simply started building, building it.
This was I think May last year just before ECC and in ECC I
also talked with some roll up builders get some validation and
then fully focused on this idea. Basically, this was our whole
history and then a lot of stuff happened in Bitcoin.
New mine equals came or no's infrastructure changed a lot and
then bit VM paper came out. I think one of the biggest
breakthroughs in like last maybe four or five years in Bitcoin
history, maybe even longer. And then yeah, every simply
become CITREA to live our Rd. maps and make everything open
source in our GitHub repulsory assistant via the building bus
stop and today's history is live on Bitcoin test at it.
Awesome. Yeah, thanks for for the call
there. So basically you'd say like, I
guess ordinals kind of pave the way to show something is
possible after all, to to bring programmability to to Bitcoin.
And then like bit VM is a is another big breakthrough there.
It sounds like that enables enables also Citria from from my
understand. Can you explain a little bit
what what bit VM does and and how you how you leverage that
for the roll up? Yeah, basically for like to
enable the current form of Citria, you need two things.
One, you need to be able to put your Zetia proofs on Bitcoin,
which is being a must to be a Zika and this is enabled with
not ordinance but inscriptions as the term that enables putting
arbitrary data on Bitcoin. They are not images.
What we put it is just pure byte data, which is the serialized
form of the Zika proof. And this is the one thing that
enables CITREA. And I think even most
importantly is we need to be able to verify those proofs on
Bitcoin so that we can have a trust minimize breach to move
our Bitcoin from mainstream to CITREA.
And this is enabled with Bit VM basically.
So Bit VM is introduced I think October last year, just exactly,
maybe a year ago by Robin Linus, Bitcoin researcher.
And then it changed a lot since now maybe like 2-3 version came
and is still work in progress. But the most basic idea is we
can divide the huge ZK verification algorithm into
chunks and then we can optimistically verify the ZK
proof using these chunks. But we will still get the same
level of security. Because if there's something
wrong, someone can challenge the ZK proof and verify a single
part of it so that Bitcoin can know ZK proof is correct or not.
So that we can even move the state forwards and continue the
roll up or just slash the adversary operator.
Right, OK. And so basically these operators
like are part of the Citria network or how what are like
sort of the roles in in that security network?
Yeah, I think in like regular team secure all OPS, it's very
clear you have like sequencers and then you have the prover.
The sequencer just orders the transaction approver generates
the proof and verifies on Etherium by just sending to a
smart contract. But in bit VM things are a bit
different that we don't do verification for every single
proof. Instead we just wait and
aggregate them together to save some costs to do a transaction
of Bitcoin. So the idea is we still have a
sequence run prover which is run by us and they do the the same
thing with Eteru but they send the proof into Bitcoin but not
immediately verify, they just inscribe full nodes get
confirmation. This is still like an etherium
ZK roll up but then after we have a set set of operators and
verifiers. This is a terminology coming
from BTVM, and these operators are responsible to pay that
people are withdrawing from Citrea.
If you want to withdraw, let's say Bitcoin from Citrea, you
just burn your BTC and request your Bitcoin to some Bitcoin
address. And one of these operators pay
you the Bitcoin. And then after a couple of
weeks, this is currently 14 days, they go to the main chain
and say that look, this is the latest finalized Citrea proof.
And you can see that this user requested this Bitcoin to be
sent. And I actually sent that
Bitcoin. Now I want my Bitcoin back.
And this is simply a proposal that's put into Bitcoin.
And in a week, let's say everyone agreed that this guy is
honest, he actually paid the the user and the proof is correct.
Then they simply sign a transaction and operator gets
reimbursed. But if there's something wrong,
let's say operator is trying to steal money by showing some
invalid CK proof that any of these verifiers can go on chain
and challenge the operator and eventually the operator will get
slashed and it won't be able to get any money from the bridge.
So this is one of Entrust assumption, similar to arbitrary
to date let's say. But on the other side, this is
not an optimistic roll up, it's a ZK roll up.
But the bridging mechanism is optimistic and similar to
Arbitrary's breach. Right.
OK, very interesting. And so these time frames like
14-7 days you mentioned they, they're just like the optimistic
window or are they related to the finality or the chunking of
these proofs or? Yeah.
So the finality is actually still the same with all the roll
ups because Vasvi sent the proof into Bitcoin that all the full
nodes see that proof because they rely on Bitcoin security.
Once that proof is mined the Bitcoin blockchain, then you can
make sure that this is actually final so there cannot be double
spends. The only finality that you need
to wait is while you are withdrawing from the chain and
this also the operator taking their risk because they simply
prepare you and they reimburse later.
So this is all becoming the operators risk and they are
economically incentivized to be honest because if they do
something malicious they will get slashed eventually.
And and their incentive to actually pay you before I guess
it's like sort of almost like intent or something where you
then. Get it like, yeah, it's actually
like an intent. And even our software's intent
as the user simply starts reducing the desired amount 1 by
1 and releasing some signature to the operators just like an
intent saying that I burned 10 Bitcoin and I can get, can I get
like 9.9 BTC And if there's no answer reduced to 9.8 and then
9.7. And eventually one of the
operators become profitable because they, let's say already
have Bitcoin treasury, then they will pay me 9.7 Bitcoin and in
two weeks they will get 10 Bitcoin back.
So they will have 0.3 BTC in profit.
So it's just like an intent. I'm doing fast withdrawal from
the bridge. But the difference from the
Etherium intent is this is the only way of doing withdrawal on
Etherium. Let's say on arbitrary, if you
don't do intent, then you can go to the native bridge, wait seven
days and get your money back. But on Bitcoin, we don't have
the coherence, which is a special form of transaction
type, let's say. Then that's why we need those
operators to actually pay us. But they're incentivized to pay
us because we are paying some fee to them in exchange for fast
withdrawal from the chain. Right.
So we meaning that the user of the Citrio roll up or is Citrio
itself also sort of incentivizing these scroll up
potentially the story these operators?
Yeah, the operators are getting some fees and eventually the Rob
can decide at some point, maybe share some transaction fees with
them as well. But right now in our
architecture, their main revenue mechanism is the fees from
withdrawals. And also if there's no
withdrawals, they don't have any cost.
They're just running a hardware that may cost $100 per month.
So it's basically virtual nothing for an operator.
And unless there's a withdrawal, they're happy.
If there's a withdrawal, they're getting fees.
So they're still happy, so nothing to worry about the
economics of operators actually. You're right, right, Right.
OK, cool. Yeah, very interesting.
And so the rest of the constructs, like you said, it's
kind of like normal CK roll up. You have some sequencer, It's
initially centralized maybe at some point.
Yeah. Yeah, it's initially single run
by us together with the Pro. In our road map, we have this
first peer-to-peer network for sequencers so that we can enable
maybe like fast 6 for the notes and then eventually decentralize
the sequencers and maybe also decouple the sequencer with
prover or maybe keep the same so that every, let's say, sequencer
that proposed block should also prove their block.
But it's still in specs. But initially our main Nets will
be single prover and single operator single sequence.
Cool. Yeah, very interesting.
And so this construction relies on bit VMI think there's there's
also like other roll ups in Bitcoin or other ways to bring
programmability. I guess there's also like OP cat
or you know, what are, what's the differences there like on a
high level, I guess and and what are like kind of the trade-offs,
Yeah. Yeah.
So in the high, in the high level, we know Bitcoin also like
we know lightning like all of us like lightning and it's
eventually proposed payment solution for Bitcoin where we
can open channel between parties and send and receive BTC through
that channels. But lighting has been around
maybe look for the last like six years, but still it's way behind
like the scalable to solutions on other chains.
I would say the channels itself is like very interactive and it
requires you to manage the liquidity, which is very hard to
do self custodially. That's why I think today
majority of lightning volts are custodial because no user can
run a lightning not very easily if they're not higher technical.
So that's the one thing that's obviously the biggest, the well
known a bit by scale solution. Other than that, there were side
chains has been around since 2014, similar to Polygon to
Ethereum. There are many side chains to
Bitcoin, let's say liquid root stalk stacks.
But the side chains, I think now everyone knows this, but back in
those days it was very popular and it was think away to like
scale the Bitcoin. But eventually there are
different chains with their own economics, with their own
validator sets. They need to incentivize their
validator with fees. So they're simply stealing the
fees from Bitcoin main chain and pay to their own operators.
So I wouldn't say like side chains are scalable solutions.
And I think there's also a well known fact in a dreamland too.
That's why most people try to build roll UPS because they're
more aligned with Tel one than side chains.
And other than that, there are still a lot of experimental
stuff like you mentioned OP OP cat, which is a proposed OP code
to be implemented in Bitcoin. And if it get implemented
potentially, theoretically we can build a stark verifier
natively without doing this optimistic challenge response
thing with bit VM so that we can just have a regular like smart
contracts so we can move the state forward.
We can verify the ZK proofs, but Bitcoin social consensus is
hard. Like we we get last software
three years ago it was step route and now it's still a big
mess. Like no one knows which software
should get activated in the future.
There's all PCAT, there's all PCTV, there's great script
restoration, there are all different of holds like software
proposals, but no one like the Bitcoin community hasn't still
agreed on CAT. I think personally I'm in favour
of it because it makes everything much easier.
But like I said, there are also potential risks of adding drop
codes because they're open any way to do things which should be
well analysed. But yeah, it's it's complicated
but and very experimental. But today with VM and combined
with rollouts is the best you can get in terms of the security
and the decentralisation. Right, so bit VM doesn't
introduce any new of con any changes it's already.
It just works today. That's that's the video of
Citri, Yeah. Yeah.
But it's also like still developing separately like sort
of the bit VM proposer or is that a team working on that?
Are you contributing to that also or?
Yeah, sorted. Good question.
Yeah, the Bit VM started with Robin's paper and Robin has a
non profit called Zerosync funded by start where a couple
more open source bit by development companies to
actually build ZJ proofs for Bitcoin chain.
But now their focus is Bit VM and it was an open source code
base and it's still open source. Everyone can contribute, but
also five teams including our team and Zerosync for something
called Bit VM Alliance. This was actually two weeks ago.
That the alliance is trying to complete the BTM implementation
in the next 100 days to actually put them proof on main that and
verify it. Because open source development
is great, but it's without coordination.
We are all working on the same issues without knowing what we
are doing. So this allies is mainly
coordination mechanism between the major contributors of the
BIT VM. But other than that there are
still many teams opening PRS to BIT VM contributing to it.
The allies is just a coordination mechanism.
Like I said, they're not owning the BIT VM repository or the
idea. It is still fully open source.
Awesome. Yeah, that's really cool.
Sounds sounds great. And so the that will like the
next 100 days like 2 weeks ago. So I guess like.
Yeah, yeah, around 2-3. Months some point next quarter.
Yeah. Actually like end of this year
is their target because they become a bit like started a bit
early. We have a internal BT MSDK team
that's fully contributing and they're actually much more
optimistic than end of the year to do a proof of concept.
But obviously something needs to be run on main net and it should
require like a lot of audits, maybe even some like head
reports to put on maintenance. But eventually the proof of
concept hopefully will become much more short.
Right. Cool, awesome.
Yeah, I think that was great overview of how you're building
and why, how, what's possible in Bitcoin.
I I guess the, the other element that I definitely wanted to talk
about today is sort of the Citria application and and
developer ecosystem you mentioned, right.
You started from building a wallet and actually trying to
build applications. Now it seems like you're, you're
building the infra first, but there's there's also the
developer and application side. Can you explain a bit?
You know what was there? How, how does it work?
You mentioned EVM compatibility in the beginning too.
So in the initial phase we like you said, we were exploring our
own ideas to build to direct to this board.
And once we discovered we are actually building the roll up,
our initial idea was this, I don't know, maybe app specific
roll up to do some dates for ordinals or to do landing
borrowing of Bitcoin. But eventually we we said this
infrastructure is extremely hard to build like the bit VM taking
a year to even a proof of concept implementation.
So if you do multiple apps specific roll ups, then we need
different briefs for all of them and we need more developments.
So we say we already have like a lot of modular piece that's been
developed. And I tell you, and we also like
group builders for Bitcoin and I tell you for for years and let's
just combine them, improve them and make them for compatible so
that we can enable all the developers to just come and
deploy their applications here without going through all the
infrastructure challenges. And that's why we choose to be
fully VM compatible. Right now our test set is type 2
ZKEVM, which means it's fully compatible.
You don't have to change anything or any test.
You just deploy the same contracts from a main chain to
here and they just work. The only changing thing is the
block structure, like the guest limit, which doesn't affect the
applications. So that's why we choose to be
type 2 ZKVM, because we want the finance world to be run on
Bitcoin. Bitcoin is the most
decentralized blockchain and it's most secure blockchain
that's been running more than 15 years and it's the most
censorship president chain today.
So what we want is actually, and also it has a pretty precious
asset called BTC, which is the sound money and probably the
best performing asset so far that I I encountered that.
But the main problem with Bitcoin was if you want to use
that precious assets in finance, you have to trust someone right
on main chain. You can only do payments and
it's also a bit conscious sometimes, so you cannot even do
payments. So most people did was just
deposit there, basically see to some custodian and then land
USDT there and use some decks to do not decks but use some
exchange to do some swaps. But this is against the whole
point of Bitcoin. The Satoshi in the white paper
said that the payments without going through a financial
institution, but the Bitcoin eventually evolves to something
that people are using BTC the assets, but not the Bitcoin
blockchain or not any blockchain that will have Mac custodial
properties. So it's I think a bit diverged
from the main vision of Bitcoin and what we try to do is enable
developers to build actually non custodial and trust, minimize
applications so that none of these people has to go financial
and custodial infrastructure providers to use their Bitcoin.
They should be able to just move their BTC here, hold their own
keys and do anything they want. And even we can make the UX
better. We have now a contact structure
support we have now, let's say we can just use the secret
enclave on the mobile phone to sign transactions.
We don't have to carry any more hardware volts.
We don't have to worry about the let's say inheritance because
because we can't just design A world smart contract.
But it is not possible to do a Bitcoin L1 today.
So that's why we just want to like build the infrastructure to
make UX better, make non custodial apps work on Bitcoin
and then we leave rest of the developers to actually build the
final applications to the end users so that we can actually
achieve the final with Commission.
Right, right. And I guess it also relies a lot
on what is already there, like you said, the EVM space and what
was built there just sort of settling on because how do you
see Citriate then interacting kind of with other EVM or like
this, this ecosystem sort of outside of Bitcoin, both from
the side of as a roller, but also in terms of the developer
ecosystem and attracting these developers?
From a technical perspective, one can also get the Citra
proofs inscribed from Bitcoin and then verify them on Etherium
or some other chain to actually build a trust, minimize bridge
between Citra and Etherium. So it's it's also very easy to
do and our infrastructure allows that.
But there are more practical, interpretable solutions that can
be used today. Hyperlane recently deployed on
our test. That's where you can configure
your security model and run just the message passing so that you
can build token breeds. You can build other things, but
eventually we believe people will want to move CBTC from
Citriate to other chains too. But in the long run, we expect
all of them to come here fast. We solve everything about
infrastructure, like making it fully scalable, making it cheap
and reliable. But until then, we also expect
some other ecosystems would want to have that bitcoint with their
ecosystem so they can build any interpretable solution they
want. For the for the developers, we
recently launched Citrio Origins, which is our like
one-of-a-kind incubator program that we support developers from
the product ideation, the road map, the actual engineering and
the branding growth go to market, fundraising, everything
a crypto startup which my startup needs.
We just provide everything to them.
This is a part of our latest funding grounds.
That's like one of the main purposes that we do that's
funding ground is to actually have enough human poverty side
to support multiple Bitcoin applications to go to market.
And those applications will just be EVM based.
And this means you can also build like applications on
Citrea, but you can also deploy your own roll ups on Citrea.
Just like L2S on Italy, we can actually deploy L3S on Citrea.
And then you can customize your infrastructure.
You can choose different VM, you can choose different DA layers.
If your application requires, let's say, millisecond
confirmations, you can also build that on Citrea by
deploying another chain on top of Citrea.
So it's just like the endless possibilities, but using PTC as
a native token and getting the full Bitcoin security to those
applications. And this is just a tool for us
to get those developers and help them to build their vision, just
supporting them from zero to 100 and then just gifting a Bitcoin
app to the Bitcoiners space, right?
Right, right. So like one of the main things
is also that PTC is the a gas token on the L2 Citrio, right.
And yeah, OK. And you mentioned CBTCI, guess
that's all your changes BTC? Just the naming of BTC, yeah.
We just wanted to make it easier for people to understand because
especially like in exchange, it's just a mess.
Like you want to withdraw BTC to some other chain and you get
some random Rev BTC that you don't know the name of.
That's why we just keep CBTC citri BTC.
But it is one to one PEC to BTC. So there is no further change
and there's no Rep and given, Yeah.
Yeah, Yeah, yeah. OK, OK.
I guess I get it. OK.
I I guess it's interesting because also on Ethereum or like
the BTCS that go around right now, like, yeah, a lot of them
are custodial like like you mentioned earlier.
So custodial every like. Yeah.
So if people want to use that in, let's say, I don't know,
mistaking or landing borrowing, right or in define general,
right now there's not like super great, no custodial solutions.
So I guess CBTC could be one of those.
Exactly like obvious trustless for like lenders and borrowers,
right. Instead of like excluding the
Oracle risk. And if you use WTC on our way,
it is the same as using finance lending application or whatever
because we still have fully trusting Bitco to not drug your
collateral. So it's fundamentally different
than what we are building. We want to achieve both.
We want to have my custodial BTC as assets and we want to have
Bitcoin secure applications as we can be fully trusted and
decentralized. Right.
Yeah, Yeah. Awesome.
Cool, I guess. Yeah, that's basically like
maybe two days like sort of final, let's say part of the
interview or like podcast where we like sort of maybe can talk
about guess Bitcoin defy in general or also like, you know,
what I'm sort of interested is, is there anything you see that's
like kind of unique to Bitcoin coming in that world?
Or is it more just that Bitcoin is just a better form of
collateral given like it's history and, and, and all these
elements of it? So Bitcoin is definitely better
form of cultural and the better form of money as a policy, I
would say. And let's start with the Bitcoin
blockchain. It's a very special blockchain
still running proof of work with the biggest hash rates, has a
really big market. And like I said, it's the most
censorship of blockchain today. It's not great.
We still have minor centralization, but it's still
better than a lot of other chains who produce blocks with
like off a compliance blocks, the set.
So fully compliant blocks are very popular with some other
blockchains, but not on Bitcoin. So in here patrol ups actually
what what speed level is the rollups end game is to also
enable forced inclusion of transactions from the base
there, right? So the rollups are, let's say
simply makes the safety fully inherited, but they sometimes
lack the lightness so that they're single sequence or even
though there's multiple sequence or it's not the same as the
Bitcoin network, but that we can enable forced inclusion so that
people can't send their transaction to Bitcoin and those
transactions will be run on Citrea.
It has to be run on Citrea basically.
So that's the whole point of forced transactions or roll ups
as the Bitcoin is the most sensitive present layer.
Yeah, for the important financial activities on CITREA,
Bitcoin is the best base there because you can just send your
transaction and it will get mines maybe 90% sure.
And that those transactions has to be executed on CITREA.
That's why I think it's important to build a proof of
work and censorship like Bitcoin.
Now the second aspect is obviously BTCS assets compared
to the other currencies, but Bitcoin has the best product
market fit for payments, right? It's still like it's still not
great. I think most people prefer to
get like USDC or USDT because ATG is more stable.
But but compared to let's say EAT, BTC is widely used in
payments, but it is not. And there are still a lot of
good improvements done on the Ethereum scalability side, which
enables very cheap payments. But no one is using them because
they don't want to use ETA's payment tool.
But what we can do is simply just get all this infrastructure
run on Citrea and use Bitcoin as payment token inside that
payment scalability solutions basically.
So the payments are one of the my main like things that I want
to see that should it should be better than lightning and with
EVM port like just Citri, you can build everything without
channels like the ZK pro verification if you want if you
want to do client side verification, you can do that.
So it should be better than lightning.
And the second thing is obviously privacy, but there's
no today privacy on better Bisco and L1.
And it's because you you don't have enough upholds to build,
let's say, pools or whatever, but you can build a very good
privacy tools on Citrea. We we know like trail down from
Ethereum. We've worked with them maybe in
the past or so, but it's it's a great tool to be held on
Bitcoin. And the third thing is the
lending borrowing, because Bitcoin is actually like should
be widely used as a cultural and we just need to enable it to do
my custody land trustlessly by basically having a landing porn
or citrius. So this will be make my maybe
prioritize for Bitco and applications.
Right, right, right. Yeah, makes sense.
OK, very interesting. And so, yeah, I guess the, the
core of it comes down to like sort of the, the proof of work
and, and the history of, of Bitcoin, which which I guess
that's always the core argument is there?
Or like, how do you see it then evolving?
I guess, you know, we all know like block reward is going down,
but basically like the roll ups would counteract because they
create like this, this proof transactions.
How much is that? Or like, could you see that
becoming like sort of the main source of fees for for Bitcoin
itself at some point? Yeah.
So Bitcoin issuance like you said is every four years it just
goes half and eventually it will converge to 0.
And at that point Bitcoin miners incentive is transaction fees.
And if no one is actually using Bitcoin blockchain, but if
everyone uses BTC as set in let's say custodial
applications, then Bitcoin miners won't get any fees and
Bitcoin blockchain will become much less secure than today.
So with roll ups, roll ups are using the L1 as the DA layer.
So we post our data to Bitcoin in the form of ZK proofs and
state diffs, which is a bit more optimized form of just sending
pure transaction data and we compress them, send them to
Bitcoin. So we do two things at the same
time. We achieve the Bitcoin level
security because the data is there and we also pay minors to
be incentivized to keep the hash rate high and get more fees and
just continue the chain without reducing its security.
So we do these two things, which is extremely helpful to Bitcoin.
And at the same time, we do transaction cooperation with CK
proofs. So it's not as expensive as
doing a transaction on the other one.
It is much more cheaper, but collectively it helps Bitcoin to
be sustainable and also to be scalable.
So yeah, that's the main problem with all the proof of change.
And I don't think bit other than like something other than
Bitcoin will survive in the long run.
And if Bitcoin needs to survive, people need to use Bitcoin and
maybe just in a form of single transactions or roll ups,
basically send all the data to Bitcoin.
Right. Have you done like some sort of
simulation for how much Sidrea would pay on like Bitcoin main
net for like some operation? Does it depend on like the load
on Sidrea also? Exactly because it's state tips,
it depends on like how much. Like if we are all using the
same Unix web pool, the state will be extremely small.
But if we are using all different Unix web pools, the
size will be huge. But we did some statistical
analysis using like some paths that are blocks on user behavior
and creates an analytic. And today I think in our test
Nets, this is the like real numbers on test Nets, but the
feed rate is exactly mirrored to our roll up.
And right now the data size of doing a Bitcoin transfer on
Citra is 15 times smaller than doing it on Bitcoin main Nets.
So even though feed rates change, you can expect that we
reduce just the sent transaction 15 times than the mainnet.
This is maybe like somewhat same for other things, but we cannot
understand because there is no tax on Bitcoin.
We don't know the cost of tax on Bitcoin, but it should be maybe
like somewhere around between a terrium and a terrium roll UPS.
Not as cheap as a terrium roll UPS for sure, but not as
expensive as a terrium also. So maybe somewhere in between we
can estimate the transaction cost, but there's no strict
numbers for it. Interesting.
So right now it would be I guess like an order of magnitude lower
maybe And like what, What does that mean?
Like what? What would like a normal cent on
Citriar cost in this 15X lower I guess as we record here 31st
October. Yeah.
I think like today's on the like the main net fees are somewhere
around like $0.10 or something like that.
So, so a Bitcoin transfer should definitely below $1.00 to the
CITREA, maybe even up like below $0.10.
But no matter the feed rate, it will be 15 times cheaper if you
do that transaction today because we just reflect the same
feed rate of Bitcoin to CITREA because we just sent all the
transactions there. We need to keep the rates as the
same, but we just compress the transaction.
And I guess in the that's with the current architecture could
like further compress more if there's like more improvements
with VMZK. Exactly, the ZK improvements are
the main thing. And the second thing is we are
now also changing the architecture to embed stateful
status, which means that let's say if you do a transaction,
your compressed address is written into Bitcoin.
And if you do a second transaction, we we no longer use
your address, we just use your index to put.
So we reduce the data size a lot.
That's still work in progress, not live on test net.
But yeah, in the long run, the idea is CK proof systems will be
much worse faster so that we can do more, let's say proofs per
time and we can compress more. And with state will state this,
we will achieve optimal compression as well.
Awesome. OK, very cool.
Yeah, maybe one, one final like sort of question before we
slowly like RIP up is I guess you're you're all the team you
mentioned you were from Istanbul in Turkey.
You want to share a bit like how I guess that's, that's a big
community that's emerging there. How how and also it has like
interest in. Bitcoin from sort of like
inflationary perspective. So yeah, maybe you can share a
bit how that's going, how you're growing that or like your
thoughts there. Yeah.
So like I said, all my Co founders on our base and is
stumbled actually like I'd say majority of our team is also in
Istanbul. We have an office start, but
yeah, that's how we grew up. Like my maybe like since high
school, all I saw was inflation, Turkish lira going to zero
against dollar and other currencies, especially against
Bitcoin to just Bitcoin does all time high maybe every day in
Turkey, no matter the ESD price because either ESD goes up or
Bitcoin goes up or Turkish lira. But yeah, that's also like how I
got into crypto, that I was getting scholarship through
crypto because it's a much more freer form of doing money
transfers. And it's also raises something
against the inflation. This was 2018 or 19, I think.
And yeah, that's that's how we got into.
But in the Turkey, there are like just some developer groups
that's still like getting bigger and bigger.
We definitely like help them with their products.
If they have ideas, we want to support them.
We do for a couple. I think we will announce more in
the coming days. But let's like I said, we are
just supporting all the local builders.
And at the same time, there is this retail user base which
mainly holds, I would say, USDT, not Bitcoin, because it's still
more volatile compared to the USDT for Turkish persons.
But the main thing is also they don't know how to use the self
custodial tools. So they use the most basic thing
which is Binance. And they just use the USDT on
Binance or USDC, whatever, so that they can just cheaply send
it around or just convert to the cash.
But I think market on Turkey is really big, especially if we can
onboard them to Bitcoin because it's better than USD for
monetary policy. And if we can make also like
something to receiving Bitcoin and holding Bitcoin easier, then
I don't see any reason to like just dump start on USDT.
Right, right. Yeah, that's, that's just super
interesting how big the adoption in that sense is.
And maybe the step towards going full non custodial is actually
much shorter than what it is in like the Western world.
Yep. For sure.
Cool. I think yeah, it covered a lot
of ground and yeah, Congrats on the fundraise.
I guess you'll this might go out shortly after.
Is there any any final things you want to share with our
audience or where to learn more about how to build?
Exactly, thanks for having me. I think we covered a lot of like
technical and non-technical stuff.
For technical stuff, they can always furnace our GitHub, which
is open source, our repositories and our documentation, our web
pages, CITREA dot XYZ and the territory CITREA under score XYZ
so that you can see all the resources there.
But the other than that, if you're a builder and developer,
I want to be a part of this Citrio urgency incubation
program. And just hit us up, there's form
on the web page as well. We just do one-on-one meetings
with all the builders that's applying.
Yeah. In general, what we want to
achieve is the end goal of Bitcoin, what I imagine is the
hyper bitcoinization where all the other currencies getting
hyperinflated and the Bitcoin at the same time getting adopted.
The hyperinflation is happening on other countries like
Argentina, like Turkey, like Zimbabwe, but the hyper Bitcoin
resolution is also slowly coming.
We just need the enough infrastructure to actually
achieve scalable and trust minimize and like custodial
applications. And then once we see the
creative applications, the adoption will be much more
higher, potentially bigger than that, probably bigger than all
the crypto and potentially bigger than the webtube as well
in the long run. So if you are a builder, just
like I said, just hit me up or apply from before.
I think that's all. Awesome.
Sounds great. Thanks everyone.
Thanks for coming on and you are great to see you.
Thank you, Felix. Thanks for having me.