This is epicenter episode 448, where the guests Ed felten.
Welcome to epicenter, the show was shocked about Technologies
project and people driving decentralisation and the
blockchain revolution. I am greatly concerned.
I'm here with Brian Fabian creme and today, we're speaking with
Ed felten who is the co-founder of a Bertram which is a road up
Solution on top of aetherium and we will talk about this in great
detail in just a bit. But before we talk At about a
Bertram we would like to tell you about our sponsors this
week. So first of all, we have gnosis
safe. So if nurses safe is a security
standard for web, three, be Imagining the future of
ownership and value coordination.
It works as a multi signature, a smart contract account and is
compatible across popular ebm chains.
It's totally programmable to give the power to, you know,
customized permission and access that user limits and Ensure.
Your maximum security while doing so secures over 60 billion
dollars worth of assets and Cadence equally to individual
dollars institutions and Enterprises.
So try kenosis safe out today and to secure your assets
available on here. IAM optimism polygon BSE,
Avalanche Orbiter is it. Yes, very good.
And so to do that go to Geonosis.
Stash saved Ohio. We also brought to you by
Tallyho Tallyho is really finding the wallet as a public
good. You can think of it like a
community-owned alternative to Madam asked where said, 'who,
you can enter the metaverse with a web three wallet.
That's fully Community owned and operated and it's the first
wallet. That's also a dow Kelly, host
commitment to community ownership and public goods,
stretches beyond the wallet, in January the because they became
the first ones of ether JS and open source JavaScript library,
helping developers connect to a theorem.
And they recently, We announced the pledge to commit two and a
half percent of their total tokens applied to get coin
Aqueduct. Head over to Tallyho dark at to
try the Tallyho Community Edition and play around with its
features before its upcoming version, 1 launch, and the
launch of the Dow and our last one.
Sponsor, stay quiet, stay quiet. Is your new favorite
multi-chain, Mobile Wallet? That puts the power of of web 3
at your fingertips. In just a few tabs you can say
can't manage your assets on over. 22 built-in protocols
including oil, major EVMS. Nani VMS and there it was like a
Bertram. Stake wallet is adding new
features at light speed so you always have the best support
across all chains. Just in the last two weeks,
they've shipped 3''tab, BNB chains, taking and Harmony.
Once taking fake wallet, has also a pretty good nft support
on a mobile wallet and you can view all your and FTS in one
place and it's about to become the first mobile while it with a
Bertram and ft support as well. Watch out for an Osment, a 10
ft, a New York City on June 20th.
You can download say quality today on iOS or Android at
stake, what it .f? I spelled steak like The Meat
fantastic and it is such a pleasure to have you on.
Thanks for having me and you are You are an OG cypherpunk.
You have been doing this longer than all of us.
Tell us a little bit about yourself and tell us what crypto
free blockchain. Sure, yes.
I've been working in. I've been playing around with
software for a long time, actually since the 1970s,
believe it or not, And got involved in security and privacy
and cryptography. Research going back to the 90s.
I spent quite a few years at teaching at Princeton University
and computer science department and a lot of my research there
was around cryptography and security and getting into ideas
of digital money. Even before this sort of
explosion of cryptocurrency started with, you know what
satoshi's original Bitcoin paper.
But I got interested in cryptocurrencies and blockchain
really early and started doing research in the area.
And, yeah, that's kind of what led up to to Arbitron.
But, you know, over the years, I've been involved in a lot of
different security things as a researcher and also maybe
surprisingly to folks in this space, as working in the
government, as well. So, yeah.
And I think a Lot of that is really help me get a perspective
on what's Happening Now. And crypto space, you used to be
the deputy CTO of the USA. So, forgive me this question,
but I'm not American. And what what does what does the
CTO? And the deputy CTO get to do.
Sure. So basically as Deputy CTO I was
a member of the White House staff and Senior advisor to the
president, then President Obama and basically the job of the
CTO. And Deputy CTO is to advise the
president and the president's advisors about things having to
do with technology. So, we were not building stuff,
we weren't running systems. We weren't the ones whose pagers
would go off in the middle of the night.
There was some kind of an incident.
We were producing words and advice, but rooted in an
understanding of technology. So if, you know, there was some
kind of security breach somewhere, or if there was a
policy issue around technology, then we would work on it.
So as an example, I worked some on encryption policy.
Should the government regulate or ban an end to end encryption.
I worked on AI, and machine learning.
If I was one of the folks who drove the national National
policy initiative on AI and machine learning back in those
days and things like that. So basically advising senior
government people and including up to and including the
president kind of an amazing job to have.
And did you do any crypto related work as part of that as
well? Yeah.
Did some you know this was very early days in terms of
government figuring out thinking about crypto but one of the
things I was working on is trying to get people across the
different Departments of the US government to start talking
about crypto and what they should do help help make sure
that the different parts of government of the executive
branch understood what was going on.
And and we're starting down the road of thinking about what they
should do. Whether it's, you know, people
thinking about. Should we have He's Central
Bank, digital dollar, as well as, you know, people who did
things like consumer protection and various kinds of Regulation.
Make sure that they understood what was going on, and we're
going to take a thoughtful approach to it.
So I was involved in sort of early attempts to get that
conversation going with in the US government.
So I'm curious because you mentioned before that like, you
know, you had to sort of perspective on on crypto and
blockchain, you know that was like maybe different because of
you know the work you did before I'm curious if you can talk a
little bit more about that sort of you know when you discover
Bitcoin like what was your perspective and how has it
changed, as the industry has evolved.
Yeah, so yes, let me tell you a little bit about that.
Well, that particular that commented how my working
government has has affected my views on this, first of all, I
have been a regulator or I've worked in a regulatory agency.
I worked at the Federal Trade Commission for a while, which
was as their a chief technologist which is in the US,
government is the main agency that protects people against
fraud commercial fraud and scams. and so, you know, that
mindset of how do we make sure that companies are not just
stealing from people, you know, the The equivalent of something
like what in the crypto world would be a rug Pole or some kind
of other? You know, really fraudulent
activity, and sort of thinking about what do you need to do to
help protect people against that.
And what is the role of government in trying to shut
down the Bad actors and try to get the money back and give it
to the people who it was stolen from?
And so I got some perspective from dealing with some of the
types of Fraud and scams that were going on online in those
days, that was like, 2011 and 12.
So then I did that for a little while, then he went back to
being an academic and during that academic time, starting
around 2012 is when I 13 is when I discovered Bitcoin and got
really interested in this, this stuff as a research topic and I
questions of how people could protect themselves.
And how you could know that something that some software was
telling you what's going to happen, was actually going to
happen was part of that plus just like Standing basic
questions like is proof of work incentive compatible.
That is like does it actually in sent minors to behave in a
Cooperative way? This turns out to be much more
complicated question than you might think.
But anyway, then sometimes certain early on I learned about
smart contracts and this idea that you could do run software
on top of a blockchain and I thought this was the coolest
thing ever and got really excited about the tech
especially one, you know it as a vehicle for For building
software because I like been involved in and seeing the
development or sort of early development of internet and web
technology and saw sort of that stuff.
Go through. It's very early commercial birth
and, and some growth, and some Growing Pains.
So I'm like, okay, this is gonna happen with smart contracts.
This is going to be huge as a software platform that in turn,
led me to thinking about. Well, like what are the
technical? Barriers to that technology?
Knology actually getting used by a billion people.
And well, one of the big technical barriers, that seemed
obvious at the time was scalability, and that in turn is
what led to the work. Then sort of the birth of
arbitrary in early 2014, sort of, as an attempt to try to
solve the problem of how to scale this technology up so that
it could get the use that I figured at the I think a lot of
people did at the time that it was going to demand.
So let's talk about average room and just stupid that.
But basically, thinking back about the very early, P2P the
community or the pre blockchain P2P Community, there are large
reservations or you know holdouts that are very skeptical
of blockchain Technology as a whole.
Why do you think that is? Also, I think it's a bunch of
things and we saw some of this with the early like the early
web Technologies. I mean, we have to admit that
some of the things that go on in this space are basically just
scams there people who are who are dishonest or people who
think they're honest but are actually doing things that are
really dangerous. So this idea that it's kind of
a, you know, a wild west that people are doing all kinds of
Are risky and scammy, and dangerous things along with a
lot of legitimate and exciting, building.
That pretty much reminds me of the early internet days and
there was a bunch of skepticism there, but I think there's FX
respect skepticism in our space of our space and it's for a
bunch of reasons. I think like there's a natural
skepticism about new tech areas, especially ones that have a lot
of venture capital pouring into them.
There's a natural skepticism about any You know, about
finance and finance as a field and the kind of people who hang
out in that space and in the tech space, right?
Like right now check people are kind of out of fashion, the idea
that that like people who are building and running Tech,
things are like dangerous and antisocial and the tech industry
might not be good for the world. Like I don't buy that at all,
but it is kind of a fashionable View.
And I think we get some of that plus we get some of what happens
because we're new and people are trying a lot of a lot of things.
And some of them fail and then I think there's this other
dimension to it, which I can't quite explain that.
It's kind of become fashionable in some circles to say that,
like, everything happening in the blockchain space, is just a
giant Ponzi scheme, which I think to anyone who's into space
and paying attention is obviously wrong.
But, you know, I think it's become fashionable in some
circles to say, this is all bogus and nothing.
Nothing. Still going on but you know I
think could not be further from the truth.
There are there are some people in this space who are liars and
dangerous and so on. But there's also a ton of people
doing really interesting and solid work and you know and
that's what that's what will last just like in the early
internet. There are a lot of people trying
crazy things and nobody remembers them but you know,
people do. Were those who actually built
valuable stuff over time. Yeah, absolutely.
Well, let's let's talk to you mentioned 2014, right?
You had this kind of early scaling work, you did that, you
know, kind of later became arbitration.
Can you talk a little bit about, you know, what was that?
2014 project. Yeah, well, so it started just
with the idea, the idea of which I think today, we would call
layer to, which was that you could have something, that was
basically a chick that if you had a base chain, which had
smart contracts or something like it on the base chain that
you could build a chain above it or off on the side and then
anchor, the security of that second chain sort of, in the
first chain. So you I have this thing where
you could have a chain running off on the side that it would
use only a little bit of the capacity of the base chain, but
if you did it, right, you could sort of inherit the security of
the base chain. So that was kind of the key idea
to move almost all of the work off the main chain, but have
just enough functionality on the main chain to maintain security
and the key idea that enabled that was what's now called
interactive fraud proofs, which is basically a way of resolving
a dispute Butte between two parties about what is the
correct outcome of a computation and do that in a way that is
that involves very little work, sort of on the base layer, the
in early 2014 is when that idea is sort of came along and for
most of 2014, I had a diagram on my whiteboard in my office at
Princeton that had sort of a DOT was a diagram that sort of
showed the steps of an interactive fraud proof, and
then in the fall of 2014. Master.
There was one of my colleagues are pandering, Noreen on taught
a course on on blockchain technology on blockchain Tech
and all the students in the course had to do a course
project where they would design or build something.
So, a group of, I think six students got together and they
five or six, and they decided to build a version of this thing
that I had on my whiteboard. And one day sitting around a
table, we came up with the name arbitral forum.
It. And so they built a kind of her
very early prototype Arbitron which didn't quite work, and
didn't have the features of anything like today system.
Obviously, you know, it over eight years.
This system has evolved a lot, but basically, the first version
they built in Fall of 2014 and you can actually go on YouTube.
And if you search for something like Arbitron Princeton
students, or something like that, you'll see a video of
their course presentation. At the end of that semester that
they gave in January. 115 and they talk about, you know, basic
ideas that you might still recognized in arbitrament today.
So that was the very first version of arbitration.
What was the base layer that it was build on back then?
Well, that was the funny thing. There wasn't really a base
layer. We had to just assume that there
would be one. So the idea back then is you had
to build something that kind of simulated the base layer.
Yeah. So this was before Theory and
was you know, was at the point where you could use it.
So yeah there wasn't really a base layer at that point.
We knew there was going to be one and that you know we had a
design that what could be sort of agnostic as to what base
layer it was Much later when we decided to commercialize the
technology when we started our company, we said, okay,
aetherium is the place to go for a lot of, you know, for a lot of
reasons. We can talk about later.
Maybe. Yeah.
But initially it was agnostic and we just had a kind of
simulated base layer underneath. I'm curious.
What's this idea of like it kind of like a layer 2 was this like
the first time this came up I mean I know lightning Network
wasn't like that much later but I think it's maybe try to 2015
or something that lightning whether other ideas like this
around. I mean, I don't know of the idea
of a layer to being out there before I would hesitate to
claim. I was the first one to think of
it but but you know because good ideas pop up everywhere and
repeat his face. There was something not too
different from there was a much less efficient and probably less
practical thing that was related to the interactive fraud proofs.
That was in academic paper from 2011, from by Ron Kennedy and
some other people called referee delegation of computation.
So I would say, you know, this sort of emerged out of a cloud
of ideas that were out there and you know as a researcher I often
felt like there were ideas swimming around in my head
trying to find the right way to latch onto each other to make a,
you know, a like a design, or a solution.
And I feel like that's kind of what happened at least for me at
that time that there were ideas that people were talking and
thinking about, and like this particular combination of ideas
and the way that it could, you could use it to scale.
Smart Start of gelled around that time.
So anyway, so 2015, right? The students finished this
project. And so we have this thing which
is We're a sort of early pre prototype proof of Concepts
things, sort of existed. And this is where this this sort
of story. Evolution of Arbitron collides
with my story about working in government because my sort of my
life took a detour not long after that, which is I got
invited to go work at the White House.
And so I did you don't say no to that kind of offer and so
arbitrary, just kind of got put on the Shelf during the whole
I'm, you know, being like a somewhat senior member of the
White House staff is the most all-consuming job I've ever
seen. And so there's no time for
anything else afterwards in January of 2017, at the end of
that Administration, they pushed all of our staffers out the
door. And I went back to being an
academic and while I was there trying to sort of get my
bearings again and figure out what I was going to do for
research. Each these two, one day, these
two grad students, very km and Steven goldfeder walk into my
office and say, hey, remember that arbitrary thing from before
you went off to the government. I was like, oh yeah, that was, I
thought that was fun and so they were they said, let's do that
again. So like they came to me and said
they wanted to work on this project with me and like turn it
into a more sort of mature and complete system and A year and a
half later, we were the three co-founders of of off chain
labs. This is a company that's built,
the commercial version of our victims.
So that was sort of the Revival of arbitrary, which it was sort
of really came from the two of them coming back and sort of
reminding me of this and say we should do this.
And then one thing led to another, we had an academic
paper that we published in 2018, summer of 2018 and then like
almost immediately afterwards before we formed the company,
because it looked like something that had commercial potential
and we wanted to like actually get it out there into the hands
of users. Yes, if I interesting and
basically, I think the stress level of being a crypto founder
is put into perspective by having, you know, an even more
stressful, job beforehand. So I think you played this very
well. Yeah, just like there's frankly
no comparison because what we do today is important, it's
important to us, it's important to a lot of other people.
We take the responsibility of building this technology, really
seriously. But you know, the mistakes when
you're an advisor to the president of the United States
are higher that, like many of the decisions that he made or
issues, he worked on were literally life and death for
other people and being involved in responding to issues like,
you know, terrorism, and or even, you know, even discussions
around Economic Policy where you're talking about, do you
know, Where the decisions that are getting made can affect
whether tens or hundreds of thousands of people have jobs,
whether people lose their homes and have health care and all the
sorts of things, right being around, people who deal with
those issues. Every day, it makes the the
problems of the startup founder seen see mild by comparison.
I often tell people that that job completely recalibrated my
sense of of stress. So, you know, this seems like a
breeze By comparison. I'm happy to hear that.
I will try that in my next life. So let's talk about how you guys
set it on using etherium as a base layer.
Yeah, yeah. So, you know, we knew we wanted
to use. We wanted to pick a base layer
and aetherium seemed like so. And of course, this is one of
the steps from being an academic prototype where you say, hey
look, this is a super General thing.
It can run on top of any base layer.
It as, you know, basic smart contract functionality, but it's
going to be a product. It's got to run into on an
actual thing. And so the theory and seemed
like the obvious choice for a bunch of reasons.
First of all, you know it was it had had and still has the most
developers and the most users and so on.
I'm smart contract based technology.
We really like the etherium community and sort of the way
that it's governed and the sort of the opening openness of it
and we really liked it as a community and we felt like it
was a place where we could be comfortable, where the sort of
thing, this sort of experience we were trying to build would be
consistent with what you Therian Community was going to do.
And we've always from the beginning scene, what we're
doing as not a sort of as a complement to etherium to try to
make a theory and better. So it seemed really obvious from
the beginning. The theorem was where we wanted
to be, that we had to focus on something and and pretty much
every criteria. And if they're in look like the
best place to be. We also thought you know, just
from a pure sort of in terms of like the the need for what we
were doing that. If barium was going to be the
system that hit congestion and an increasing in transaction
fees, first part, you know. Partly because of technical
attributes of a theory but also because just there were so many
people there and the community was growing in such a nice way.
Jana makes a lot of sense. But let's let's talk a little
bit about roll ups because I think Roll-Ups is something
that, you know, most listeners will, like, have some kind of
awareness of, you know, they've heard of it, but at the same
time, probably don't quite understand it.
So can you explain what are roll-ups?
Sure. Yeah.
So Roll Up is a, is a chain that operates as an independent chain
but that has its security anchored in of an existing Big
Chain in our case aetherium. And so the key idea is that we
keep the data, this sort of input data of the transactions.
What are the transactions that users submit and those get
recorded on the etherium chain? It, but we moved the computation
and the storage. Basically, the heavy lifting of
operating the chain off onto a separate Place onto the separate
arbitration that has its own nodes, and its own its own
systems participating in it. But the key thing that makes
Roll-Ups I think really nice is that they're at least ones, like
ours is that they can. Great trust lessly meaning that
all the data that you need in order to be a first-class actor
in the system. In order to know exactly what
the chain has done and participate fully in the
protocol, that's all recorded on the etherium chain and then the
settlement of transactions that happen on the roll up.
Those are also somehow settled back to the L1 chain so that the
etherium chain nose. What is the State route of our
layer to chain. So, what that means is, you get
better performance and lower cost because we move a lot of
the stuff off the etherium chain where gas and transactions are
are pretty expensive, because there's a lot of demand, but we
still can anchor the security of the roll-up chain in aetherium.
So, if you trust a theory, mm, and you believe at least one
member of our community is honest.
Then you can trust our chain as well.
So that's sort of the value proposition.
Not only of arbitrary, but of Roll-Ups generally, you can
inherit the security of the layer 13, mm chain.
But at the same time, you can move most of the work off of it,
and so transactions are a lot cheaper.
And you can have more capacity So just a kind of clarify days,
so let's say today I'm sending a transaction on you hear em, you
know, I just sent you on here we can check on each of scan.
Okay that's just my transaction but in this case I would send
the transaction you know to a bunch of arbitrary.
Mm nodes 1, 2 1. Yeah 21.
Arbitrary node. Yeah.
So let me talk about the user experience of this, right?
So if you're using a theory am, right?
Like you said your, maybe use your using a wallet and your
wallet has the address of some know.
Foods that URL of some node in it so that when when you approve
a transaction your wallet puts your puts your signature or your
address is signature on it, your wallet will send that to two and
a three node right? And then the etherium magic
happens on some time later you get back over, you see see the
result of your transaction, right?
If you're using arbitrary, mmm, it's basically the same user
experience. In a sense, you can use the same
wallet and you instead of putting the address of an
aetherium node instead of your wallet having addressed him in a
theorem known and sending the transaction to the etherium
node. Your wallet is the address of an
arbitrary node and it sends the transaction to the arbitrary
node. So, we've done the work to make
arbitrary mm compatible with the theory, mm.
So that the same transactions will run on it, you send
literally the same bits that your wallet would have sent to
the theory of node, it can send to the orbitrim node and Is
developing a smart contract to run on Arbitron, they'll send
literally the same bits that they would send to an ethereum
node in order to deploy the contract.
So you achieve a level of compatibility in the user
experience? What happens after your
transaction gets to that node is a bit different and I can walk
through kind of what are the steps if you like.
But in terms of user experience or developer experience It
should it's designed to feel just like using aetherium accept
that transaction. Fees are lower and response,
time is shorter. So yeah so if you so let me walk
through what actually happens with your transaction.
There's kind of a front end and a back end of a system.
Like Arbitron, there's sort of two phases.
The first one is sequencing and that's all about the system.
Receiving your transaction, putting all the transactions
into order. You know, one in front of the
other and then recording those ordered transactions and then
there's the second phase which is the execution and settlement
phase, which is the, which is the phase that figures out.
What is the result of executing? Those transactions in the
sequence that came out of the first base, right?
So let's talk about like a typical transaction.
So user makes a transaction using a, some user interface on
their wallet, eventually, they click that button on their
wallet that It says to use to send the transaction, right?
So that puts their digital signature on the transaction,
the transaction gets sent to an arbitrary node.
The arbitrary node will forward that transaction automatically
to the arbitrary sequencer which is a component that's receiving
transactions from all over the place and the sequencer emits an
ordered sequence of transactions so it publishes a feed of a
real-time feed of transactions and so the know.
That you sent your transaction to might be subscribed to that
feed. So the node will see your
transaction in the feed. See what the result is, and send
that back to you immediately. It's usually around one second.
So and users love this, this part of the system, right?
So then the sequence of the arbitrament sequencer will later
take your transaction and a bunch of transactions that came
in around the same time and put them all in.
Into a batch which is just like a bunch of the data of all the
different transactions packed one.
After the other, it will compress that batch using a
using a, you know, a common compression algorithm and it
will take that compressed batch and post it on the etherium
Chain as a theorem called data. And the reason that's important,
is that that data is that What the transactions were and what
order the sequencer put them into is like fully recorded and
notarized on the etherium Chain, so everyone has access to it and
there's no dispute about possible about what what the
transactions were or in what order tell us about the
sequencer. Sure.
So yeah. So the sequencer right now is a
centralized component that are the we the arbitral team run and
the sequencer follows a first come first.
Served policy for putting the transactions in order that is
first transaction to arrive, Java transaction, arrives
earlier gets to be earlier in the ordering and So currently
it's the sequencer is trusted to establish an order on the
transactions but it's not trusted for any other purpose.
In particular, the sequence are can't create transactions out of
nothing. This transactions have to be
signed by the user right in the sequencer can't forge those
digital signatures. The sequencer could try to throw
some transactions away but there's a there's an anti
censorship mechanism that people can use to force their
transactions into the sequence. Even if the sequencer isn't
cooperating, the sequence are currently is a centralized
component and we've you know it's in our roadmap to To
decentralize the sequencer so that you have a committee of
sequencers and as long as a majority of those are honest
than you get a fear of your sequence.
Yes, is one question I have in this is so the transacted a
transaction information right? It gets put into I guess each
etherium block away. It gets put into the theorem
chain you know on some regularity but as an arbitrary
user does that mean I also have to sort of you know, Like the
confirmation or like the finality of my transaction is
like when it gets recorded on ethereum, or can I rely on it
before that? Yeah, so that you get definite
finality when your transaction is recorded on aetherium.
And so the and the main time Factor there is just the
etherium finality time, right? So if you're going to wait for,
it's a 20 etherium blocks for finality, you know, that's about
five minutes. So all the sequencer also
publishes this real-time feed of transactions and that's the
sequencers. Promise that Will record the
transactions in that order. And so, if you trust that
promise, then you can use the result.
Then you can use those sequencers real-time feed to to
know what the result of your transaction, what the ordering
of transactions will be and your transaction will show up in that
feed in a bout a second. So most in practice most
applications choose to have their, you choose to have their
you. I rely on that sequencer fee but
you are testing the sequencers promise of order.
But again it's only ordering it's not what the transactions
are that you have to that that you'd be trusting their so
that's your choice. Basically you can get one second
soft finality which means finality a unless the sequencer
is lying to you sequencers making you a promise to record
the data in that order in the sequencer.
Always has the power to keep that promise. but fundamentally
you're relying on it to keep the promise, if you're relying on
that feed or you can wait until the transaction sequence is
recorded on the etherium chain and that is going to take as
long as it there in finality does So the sequence then sends
the compressed data to the theorem main chain.
So I mean, it has to pay gas for that and basically, there's no
there's no way of forcing validators or - to include a
transaction, right? So how do you guys make sure
that you can? You can definitely have that
call data on every etherium dock Yeah, so the first so this gets
to what happens in the second sort of the back end phase or
the execution phase of the protocol and there's kind of two
ways of thinking about this. But the key idea in the, in this
sort of the execution phase is that you have this sequence of
transactions and everybody knows and agrees on what the sequence
is. Because it's recorded on a
theory right now. Given that sequence Of
transactions. There's there's something called
the state transition function. The state transition function is
a deterministic function, which takes the next transaction and
the current state of the chain and produces some changes to the
state of the chain possibly. And then also, possibly emits a
block on the arbitrary chain, so that's a fully deterministic
function. And what that means is the
result of. It depends only on the current
state and the This transaction. And of course, the current state
only depends on the Genesis State and all of the
transactions in between. Right, so the current state and
any time is fully determinable from the sequence of
transactions that have been recorded and that's actually
really important. One of the things that makes
this a rollup is it? Anybody can start with the
Genesis state of the arbitral chain and replay all of the
transactions just on by themselves without needing to
sync to anything and then know what the Current state is but
also if you're in real time, if you're a node and you're just
watching to see which transactions arrive in the
sequence, you can execute that state transition function
yourself without needing to synchronize or get to consensus
with anybody and you can know what the correct result of
executing that sequence of transactions is right?
And there is a single correct result because the state
transition function is fully deterministic.
So most of the time, What nodes do is they watch the sequence
and then they execute the state transition function themselves
privately and any honest party can do that by executing the
protocol and you could do that using a you know software that
will give to you for free and you can like click the source
code for and so on. So that's how all honest parties
can know what the result of executing the chain is, and
that's sort of the common case of what happens.
But at this point, every honest party in the universe and
principal knows what the correct outcome of the chain is except
the etherium chain, doesn't know.
And the reason the etherium chain doesn't know is it doesn't
have enough gas to execute all of the arbitrament transactions,
right? The whole point of something
like arbitrament Able to do more work than aetherium can do.
And sort of you know by definition follows from that
that etherium. Can't emulate the folks the full
execution of the arbitral chain. So we have this other piece we
call the roll up protocol which is how participants in the
protocol can can cooperatively convince or prove to the
etherium chain, what the result of executing these transaction
is, in other words like what is the block?
Ha, ha. Of the of of, you know, the next
block of the arbitrament chain. So there's a so we have the
settlement protocol which does that.
So does that sort of make sense there's like, to two aspects of
this. If you're an honest party, you
can just watch the sequence and execute everything for yourself.
And you know what the unique correct answer is.
But also on the side, there's this protocol going on to
convince the etherium chain, what the result is.
And that's necessary for things like bridging or if some party
wants to be able to wants to The result without needing to
emulate everything themselves, right?
You can go to the ethereum chain and say, look, the etherium
chain has confirmed or not sort of notarized a particular block
header hash for the Arboretum chain and so, you know, that
that's good. And how do you make sure that
the block had a hash is included in each etherium block?
So, I mean, basically you have no control over the miners right
or the validator. So, in principle, they could
exclude you. Right.
So it's not included in every etherium block.
It's just included, periodically in practice.
It's every few hours. There's a checkpoint of the
arbitral chain will get recorded onto the ethereum chain, and so,
you don't need to get it into every block.
You just need to sort of get a checkpoint in periodically.
Okay, so basically the hot finality is is then not a minute
like the soft finality, but a couple of hours until it's
included on the main chain. So but no actually so finality
if by finality you mean that every honest party knows and
agrees on what the result is, then you have that back in the
beginning, once your transaction is sequenced, right?
Because once your transaction has been sequenced, then the
result of your transaction is is deterministically.
Knowable to everyone that is every honest party knows what
their can figure out for themselves.
What the result of your transaction is, and this sort of
Of final recording of the checkpoint on aetherium.
This is just a theory. Mm, finding out what the correct
result is which everyone else already knew.
The thing is basically, if you say you inherit security from a
theorem, then then basically you, you need to you need to
wait until it's been included in the main chain.
Ah, so there's one, there's one more piece that I haven't said
yet, which I hope will close this Loop.
And that, is that this the piece of the protocol that records
these checkpoints back onto aetherium.
This piece is fully trustless. What that Means is anyone honest
party can force the correct result to be recorded and so
that means that you don't need to rely on anyone else to ensure
that your transaction will be recorded back onto the etherium
chain. You yourself can force that to
happen. In fact, any any party can force
the correct recording. The recording of the correct
result. So if you believe that
aetherium, it will operate securely.
And if you believe that at least one participant, To the Arbitron
protocol is honest, then you have a guarantee that only the
correct that the correct result and only the correct result will
be recorded on aetherium and so you need there to be just one
honest party and that can be you.
That's assuming the sequencer has given the honest has sort of
broadcast honest ordering of transactions.
Well, so the sequencer in effect.
The sequencers, the sequencers ordering is well, the sequencers
ordering is By definition, the truth of the order of
transactions. In other words, the sequencer
decides the order and then this execution layer determines, what
is the correct result of executing?
The transactions in that order sequencer doesn't doesn't make
any claims about the results of executing those transactions.
It just says Here's a set of transactions you can think of it
like a like an ordered mempool if you're thinking in analogy to
aetherium right? Aetherium has the mempool which
is all the transactions that have been submitted but not yet
executed, right? So the arbitral sequencer
produces something that's like an ordered mempool.
It's a set of transactions that have been submitted and they're
in some order. And then what the execution
phase of the protocol does is it takes those transactions And
runs them or tries to run them in order, right?
So the sequencer has established an order.
And then the job of the execution and settlement phase
is to figure out what is the one.
Correct result of executing, those transactions in that
order. Yeah, so that makes sense.
But of course you know you said before the sequencer does, you
know, sort of At first in, you know, orders it by the order
received and of course that's something they could lie about
no. Yes, that's right.
The sequencer can lie about ordering.
We believe that a sequencer that does that regularly would get
caught but over time, you know, as we move to a distributed
sequencer, the idea is you have a set of sequencers and you
brought you multicast your transaction to all of them and
then each of the sequencers, publishes, its order, which it
claims was the order of arrival at it.
And then there's a kind of, so Then you have like the published
sequence of each of the sequencer instances and then
there's a sort of fair merging algorithm which merges those
sequences. And it it produces a the fair
merge algorithm has this property which is which is
roughly that if transaction a is ahead of transaction be in a
super majority of those sequencers outputs, then it will
be a hit will be ahead of be in the merge.
So if you believe that you know a magician that a super majority
of the sequence or instances are honestly doing first come first
serve then the sort of hold distributed sequencer.
Part of the protocol will produce first come first, serve.
And this will actually in effect solve the Mev issue, right?
Basically, we currently the in the centralized in the
centralized sequencer in principle, the sequencer could
extract everything that would on maintain be known as Mev
includes but that's not good in principle.
Yes. And I mean, I'll take your word
for it that it currently doesn't.
But basically, if you have that sequence, the sequence are
competition. Where basically the relative
ordering is kind of is Kind of compared between lots of
different sequences that entire can of worms is closed, right?
That's right, that's it. That's exactly right.
Both parts of that and dishonest sequencer could extract a lot of
value presumably by by reordering or by selling
auctioning off position and so on it could that we currently
run the sequencer and we do not do that but long run.
The solution is to move to distributed sequencer and that
way you don't have to trust any one party.
It is the case now that the sequence we produce is visible
to everyone. And so if we cheated blatantly
it would be evident also you know we the arbitral team have a
real incentive to not make our system terrible in that way by
cheating our users but nonetheless right obviously
distributed sequencer is is better and that is where we are
headed. And I'm curious since you
brought up the topic of Mev which, you know, I think
definitely become like a huge topic right there.
Like, lots of people think about this does sound like pretty
elegant actually but I'm curious.
Does that actually, you know, it for the week is said, does that
fully remove Mev or is there still some degree of Meb?
Yeah. Oh, that's a super.
That's a super deep question because it partly depends what
you mean by Meb. Right?
Certainly timing matters. And there are circumstances
where if Alice can see that the thing happens and get a
transaction in in reaction to it faster than Bob, can that Alice
would be benefited, right? And so, The ability to react
quickly to events more quickly than other people and get a
transaction in faster than someone else.
Actually does benefit people and the thing about it first arrival
policy is that, you know, someone can get an advantage by
being closed in network distance to to the sequencer course, when
you distribute the sequencer, if the instances are all over the
world, you know, that becomes a more complicated game.
So, there are issues around ordering the other thing to say
about Mev is that Or the idea that of sort of exploiting order
for in order to get to make money, there are circumstances
where people wear like a regular user can benefit from either
reordering or from selling the position in the order.
So here's here's a good example suppose that you want to do a
trade in an amm like say you know swap or or or an equivalent
and your trade is big enough that it would actually move.
Move the price in that, you know, in that automated market.
So if the price was sort of at the sort of global market
equilibrium price and your trade would move the price a little
way away from that. There's an Arbitrage opportunity
that is available to whoever can get a transaction in immediately
behind yours, right. So if you're the person who's
going to do this first trade, it sure would be nice.
So you might say, well, Great. I'll do the first trade and then
I'll exploit that Arbitrage opportunity, myself and make
some profit. The thing is to exploit the
Arbitrage opportunity, you have to do the opposite of your
initial trait. So you know, if you wanted to do
the initial trade, you're not going to do that but there is a
profitable opportunity to be right behind you in the
sequence. And if you could sell that, then
you would actually you could actually benefit from it, right?
You the end user and in fact the economics of this, get a little
complicated but If you do a trade, that is big enough to
move the market, you've suffered a little bit of loss due to Stew
slippage. In determine out in the in the
jargon and you can actually regain that by selling the
position right behind you in the ordering.
So, there are cases where, like clever ordering or bundling of
transactions can be beneficial to users and not just a way to
sort of a drain value away from from users.
And so personally, I'm a Believer in opt-in.
Transaction bundling and I think that's the direction this is
going to go and systems. That emphasize fairness that is
you as a user can submit your transaction directly to the
sequencer and get You know, first in first out ordering or
if you think that there's a, if you think that you might benefit
from having your transaction bundled with other people's by
some party, you you trust, you could submit your transaction
through them, send it to them and they, you know, produce a
bundle in and submit it. So this gets kind of
complicated, but the bottom line is that there are circumstances
where it's beneficial to users to be able to do bundling of
transactions. and, If that is purely voluntary, a thing that
happens for you because you opt into it, I think that's a good
thing. But the idea that someone is
sitting there watching your transactions would like
reordering it so that they can steal some, you know, some
fractional eat from you every time you do a thing that's
really harmful. So yeah.
So I mean we've been thinking a lot about how can we minimize
Mev and how could we make it so that people who want to opt
into? Transaction ordering can do it.
And we've been trying to build a kind of ecosystem that allows
that to happen. But a big part of that is this
sort of first in first out or first-come, first-served
approach to sequencing which we think is really important and
important part of our model and makes it not completely
resistant to Mev but much more resistant than alternatives.
I think that's really commendable.
So, I think, I mean, in this space, there's this prevalent
narrative that Mev is actually good because it, secures the
network. And I think this is a false
narrative and I don't, I don't understand why more people don't
call it out. Because obviously, it's the
user, who pays for it. If you actually do the analysis
of how much is spent on Mev, it's around one percent of total
transaction volume, so it's huge.
It's actually it's humongous. So basically if you guys where
to To tweak your sequencer. You could be enormously rich
with this. But yeah, so it's I mean it's a
huge. It's a huge market.
And I think basically finding finding ways that are provably
fan that kind of picked with that super important.
I need I feel like I need to do a mini rant here because I think
you're exactly right. That this like Mev extraction is
it's a tax on users but it's a text that's hidden.
You don't know how much Which was extracted from you or when,
and I think that's not how fees that's not how Network should
fund themselves. If you're going to fund your
network, you should do it from fees that are visible to users.
So you users know what they're paying so that it's in that
wallet pop up that when you do this transaction, this is what
you pay for the transaction that it's visible.
And, you know, I'm a big believer in that the cost of
transactions should be visible, they should There and they
should be related to the cost of operating the network.
And I think Mev is none of those things.
I mean the extraction is not visible, it's not designed with
fairness in mind and there's no reason to believe that it
collects the right amount to fund the network, right?
The right amount is enough to actually pay for operating the
network but not more. I just think Mev is really poor
way of funding anything. Yeah.
Sorry, and with apologies for, no, I'm cold.
Are you on the same page yet? This is this is exactly my son.
So yeah, let's back up a little bit and talk about the
above-average from notes though. So basically, so basically, when
I have a have a transaction I will send it to a node.
Who is that note, what does it do?
And how is it incentivised? Sure the node could be.
Anyone can run a node, you can run a node, you know, you could
just download the software and run it.
We have some. So I mean the answer who is the
node Is, it could be anybody. A lot of people will use a
service provider, I think it's a lot like etherium.
You can run into it yourself, or you could use a big service
provider. And if your Alchemy or any of
the companies in that space, it's kind of up to you.
In terms of how they get paid, there's different answers to
that. If you run the node yourself,
you know, you're running it for your own reasons and you don't
have to pay yourself if you're using a Herschel service that
runs nodes. Then you know they're going to
have some kind of business model.
Maybe they have a free tier and you pay.
If you use it a lot, maybe you use a node that's run by an
application provider. And their business model is they
want you to use their application.
They have some way of making money from their application and
they're going to run a node to make that easier for you.
So I mean, it's essentially the same answer is on aetherium.
It, there needs to be some reason for a person to run a
node and it might just be Self-interest.
It might be part of either. It might be a part of a business
model where they're, you know, they want people, they want to
see this activity and happened more and so they want to
facilitate it. I know we run, we the arbitral
team we run. We run some some nodes node
Services ourselves but if I run any theory of node I make money
off of it, right? If yeah, if you're mining you
do. Although it's not a great
business to be in if you're just have a regular computer, right?
You can buy mining rig and then maybe the economic setup work
out, it totally. But if I mistake of, for
instance, on East to, yeah, you do make some money and we we
don't have an incentive program for nodes.
We found that we don't really need it as of yet.
So the other thing to say is there are different.
Just like in aetherium their different roles that node can
play can be A regular node which is mostly servicing user
requests, keeping track of the state.
It could be what's called a validator, which means that it
participates in the protocol, the settlement protocol to
settle the results of transactions to to etherium, or
could play a special role like the sequencer.
There's only one of those someday.
There will be there will be a limited Committee of them
someday But most nodes are just are like non are like nonce
taking notes in a theory, okay? And thus taking notes.
What about those? Just taking notes currently
right again. Anyone can let's see.
So The protocol allows anyone to run it, we currently have a
limited list of parties who are doing it but the the direction
we're going is toward a model where anyone can run a validator
and there are some parties who are invited to run a validator
and they are compensated for that with you know some funds
that come from from from the user fees from the transaction
fees because it's trustless and anyone kept sorry.
Anyone can run a validator. We actually don't know who in
general, you, you don't know and can't know who's running
validator. So that's actually a feature
that you know, if you put yourself in the shoes of a
person who's thinking of cheating and they're going to
ask, they're asking, is there a validator who's going to call me
out and, and take my steak the fact that you can't know who
might be running. A validator is actually pretty
valuable the sir. Out of Submarine, validators are
an important aspect of the security model.
So what happens to the transaction fees that users pay
because basically sending transactions on a Bertram mean,
it's substantially cheaper, they are not then on May net, but
it's not free. It's like on the order of like,
a dollar per transaction or so. Yeah.
So that the, the short answer is it goes to pay the costs of
operating the chain. But let me give you the long
answer which explains what those are the Biggest cost of
operating, the chain is recording that sequence of
transactions on the etherium change.
Its aetherium gas, right? And so the sequencer pays the
biggest, the biggest source of cost is the L1 gas that the
sequencer has to pay to record the track.
The biggest part of the fees that you pay actually go to the
sequencer to reimburse it for those costs.
Other fees go to to to to cover other parties costs and so
basically that money all goes to pay for the sequencers cost.
It goes to validators and it goes to sort of a core set of
nodes and over time, this will over time, we're moving toward
more transparency in where those fees go the algorithm for
determining the feasibility. Is is, you know, we're fully
transparent about what that is and we've talked about why the
fees are set the way they are. But basically that the short the
short and the short version of that is the fees part of the
fees, go to reimbursing, the sequencer for L1 gas costs and
the rest is L2, gas, which goes which is paying for the sort of
the core nodes and and and some validators so if you think like
a transaction fees that uses pay, an orbitrim will these kind
of be proportional to you know roughly the same transaction
fees that you know likes you know, some kind of percentage
Well, roughly speaking. Yes, that the component of
transaction fees that is covering L1 gasps.
You know how much you have to pay for the L1 cost of your
transaction? That is going to depend on.
What is the L1? That's basically, right.
The old one base fee goes up then the sequencer has to pay
more to record your transaction. And you're going to end up or
you or other Trends ll2. Transactions are going to end up
paying for that, right? So because that's the biggest It
in practice when the etherium gas price.
Base fee goes up, the cost of arbitrary, transactions goes up
as well. It lags a little bit for some
technical reasons, it takes a little while for the arbitral
mechanism to adjust but fundamentally the Arbitron costs
follow the etherium gas costs and essentially it's the cost of
recording data. Now, the theorem is moving
towards Changing its data model in ways that reduce the cost of
the kind of data that Roll-Ups me.
And so this so-called this is the dunk sharding or Proto dunk
sharding stuff that people talk about in aetherium research
circles. And once that gets deployed on
aetherium, then the cost of recording roll up data on
aetherium will get much lower. We think and therefore the cost
of arbitrary transactions and transactions on The Roll-Ups to
will go down a lot but that's basically right.
The first approximation most of your transaction fee goes to
paying to record your transactions data on the old
launching. You said earlier that basically,
I can force a settlement on L1 as and as a participant in are
to there. Any way I can actually grief
with the synthesizer by forcing it to settle much more often
than it usually would and thus driving.
Bring up the fees. So if you greet, you can post
more checkpoints as a validator but that's only going to cost
you. That's only going to cost you
money because as a validator if you're getting paid as a
validated you getting paid per time, not paid per per post so
that's only going to raise your own costs and If, if the
checkpoints that you publish our honest, then it doesn't require
anyone else to respond on chain. This is the optimistic part of
arbitrariness, and optimistic roll-up.
And the optimistic part is the idea that if somebody posts a
correct checkpoint that everyone else just does nothing and the
system. After then there's a then
there's a challenge window a window of time in which after
someone posts a claim about At the checkpoint should be,
there's a window of time in which anyone else can object.
Right. The person who posted the
initial claim is staked on that claim and they they will lose
that stake, if they're lying, but basically there's a window
of time in which anyone else can object to it, and if no one
objects. After that window of time
challenge window has passed, then the system will accept it.
And that's obviously the common case because as a validator,
your incentive is to not post a false checkpoint.
If you do, you're going to lose lose, lose your steak.
And so your incentive is opposed to correct, checkpoint.
And then everyone else is in. Enter visited.
Look at that. Checkpoint say.
Yeah, it's correct. I'm going to just wait until for
the system to accept it and then the system will accept it.
That's sort of the common case, but if someone posts a false
checkpoint, then you can come in and say, no, that's wrong.
Here's the right result and you can stake on that and then
there's going to be a challenge protocol that happens between
the false Staker and you the honest acre.
You will win that challenge, because honest party can always
win the challenge protocol. That's the sort of a guarantee
of the protocol, and then you'll take half the stake of the loser
and the other half gets burned. So, you as an honest party, can
post a correct checkpoint. You can do that whether or not
anyone else posts, an incorrect one.
And if anyone disagrees with you assuming you're behaving,
honestly, you will defeat them and take their steak.
Okay, fair enough. But how, as an honest, validator
a, my incentivize to post a checkpoint.
Do I get extra credit for that word because I incur the gas
phase, right? That's right.
So whoever does that incurs a
gas fee and we don't currently have a mechanism to reimburse
that gas fee. Currently we post, we are our
team post, correct checkpoints ourselves, and we just eat the
cost of doing that. But if we don't, then someone
else can do it and they can they would have to absorb the cost
themselves of posting. The checkpoint checkpoint gets
posted every few hours, so it's not a large cost, it's a it's a,
you know, medium-sized aetherium transaction, every few hours.
The biggest cost of L1 gas cost of the system by far is the data
recording that the sequencer does and it does get reimbursed
by fees. We will probably eventually move
to a scheme where the system reimburses the gas costs of
someone who posts a checkpoint as long as they don't post it
too. Often you started talking about
the optimistic part of the roll-up, so kind of putting this
into the larger context. So we've actually had several
other guests on before to talk about, roll up.
So basically, we've spoken with electric house key from CK sink
and Eli band, sun. And from the optimism, we've
also had the optimism team on. So, I understand the fundamental
difference between ZK roll up. So basically you've you post a
fundamental proof and basically that that proof is final.
You get instant finality to only doesn't work for all kinds of
transactions, but whatever. And then you have the optimistic
roll up. So how does Was a Bertram
designed differently from how optimism works.
So there's a bunch of differences.
One of the biggest differences with optimism in particular, is
that? Arbitron is a, our Bertram has a
fully working and integrated fraud proof system that is, and
we've had that since the beginning, right?
So we actually have the fraud proof system in existence and
turned on and it's integrated with the rest of the system.
So that's a pretty significant difference, you know?
It's not Something that we say we're going to integrate in the
future. In fact, we're proud of this.
We are the only Roll-Ups evm compatible roll-up system on
aetherium that actually has its security proof mechanism turned
on and working. This is one of the harder parts
of not only just building a fraud proof or correctness proof
mechanism, but actually getting a complete protocol that
includes it is pretty hard to do.
And that's a reason why. Why a lot of projects either
haven't done it or are just promising for the future but
we're you know we're proud of having every version of Arbitron
has had fully working in integrated products.
I think that's a significant difference.
You can talk about differences in design for a long time.
The biggest design difference between arbitrary and optimism
was that we used interactor fraud proofs and they used a
non-interactive fraud proof mechanism that is they had It
was an optimistic system, but if there was a dispute between
parties, we would resolve it in different ways.
But about six months ago, maybe a bit more optimism pivoted and
started using, or said they would use interactive fried
proofs, which is the arbitrarily approach.
I mean, I think there's some technical differences between
how the system works. We one of them is the first come
first served sequencing system which you know, we talked about
a bunch of before, that's a thing that arbitration does and
optimism has a different approach that involves
auctioning off the right to reorder transactions.
But probably the system that is closest in design to arbitral
among the ones that are out. There is his optimism.
And, of course, you know, other systems that the other systems,
that you mentioned, use, ZK technology, which is very Type
of thing which and they're the main difference is between
optimistic and CK is in my mind is cost.
Optimistic systems are much cheaper by orders of magnitude
to produce the proof. And the reason is that, the
whole part of the protocol, where you generate a very
complicated cryptographic proof and you know, the ZK folks
always talk about how cheap it is to verify the proof.
But thing is EK proof is extremely expensive and an
optimistic system, you don't have to do that.
The even in the worst case, the optimistic system, the cost of
proving is much much lower. You could you could do proving
on an ordinary machine for an optimistic system, in the case
of a dispute. But because of the optimistic
nature of it, if there's not a dispute, you don't have to
produce a proof at all. And that, of course, is the
common case and it's, it's vastly cheaper.
Well thanks that's very helpful. I I wanted to kind of come back
to top. You have you touched on a little
bit before which is sort of the topic of like economics of it.
So we you know, we talked about that, you know, this is he and
most of the fee goes towards paying the L1 gas.
But of course there's also, you know, L to, you know, some
additional fee, right? That's there.
And so I'd love to maybe speak a little bit about that.
And then, I'm also curious, I think so.
Optimism, right? A, they launched a optimism
token. I'm curious also, if you have
plans for I don't orbitrim token or like, how do you see sort of
the economic system evolved in the long run?
Sure. Yeah, I'll be talking about the
fees. You know, as I said before the
biggest component of these is L1 cost, there is L2 gas, there has
to be gas, right? Because you need the economic
need to align incentives for users because when a user
submits a transaction, they are imposing costs on other parties
and they're using a resource that's limited, namely the
throughput of the chain, right? So you need to have some kind of
gas or charging in order to align this in.
And in order to keep users from just spamming the chain with
jump transactions, right? And so arbitrary, does that in a
way, that's pretty similar to aetherium.
We count gas and we the Gatsby is normally low.
It will go up. If the chain is busy, it's
congested. That is if If people, if the
transactions that are arriving, are more than the change, the
change capacity, then just like etherium, we have this automatic
mechanism that raises the base fee, so that you get essentially
used, use that price mechanism to ration, The Limited limited
resource, but most of the time you're running at that sort of
the minimum base fee. So that's kind of how those fees
are Charged and you know, we believe in a scheme where the
fees should correspond to the cost of operating the system and
that and that that's where that that should go in terms of a
token, you know, we have not launched a token, we have not
felt the need to do it all the growth that we've gotten is has
been organic. We haven't paid anyone to use
the system. You know, we haven't done took
anomic stuff to try to get people to use this system.
We really focused on Building A system that meets the needs of
users and Developers. The one thing we've said for
sure is that we are is that if we do ever introduced a token
it's not going to be something that generates friction for
users. It's not going to be something
that every user of the system has to have or use our own.
We're not going to charge fees in an arbitral token.
We think that you know there's huge advantages both
incompatibility and just practically for user experience.
To have the native token of our chain be Youth and to have fees
charged, anyth. You know, we haven't, you know,
we haven't found that we haven't seen the need to introduce a
token, you know, we are thinking about decentralization and how
governance could work going forward and what are the options
there. But yet it's not it's not it's
not a decision. We've, you know, we've made to
do Because right now those exit, those fees basically go to like
off chain labs and then often lab space like the different
parties. Yeah.
Right. Well so the sequence or fees get
go directly to the sequencers account.
And then the rest, right? We distribute to those who are
involved in money in running the network.
Yeah, overtime. You know, we're moving toward
more transparency about that as we You know, as we line up, say
a suite of paid validators and and we're, and we're thinking
through how to what's the best way to have our community
participate in these sort of this sort of decision making but
it's definitely the you know, the endpoint that we're aiming
for is community participation in this and we need to have
there needs to be an economic model that's sustainable that
covers the costs and so on. But you know, we want the
community feel like they A role in in talking through these
issues and getting to, as in getting to an outcome that that
meets their needs. Okay, so let's talk about the
larger ecosystem and bridges. So obviously you didn't design
Arbitron as a standalone system, but it kind of works in
conjunction with etherium. And there are also Bridges
between arbitrary Amanda theorem to kind of bridge assets.
Also I mean basically there are no native at Native assets that
live on average from, right? So basically everything's
ridged, I assume There are some actually yeah.
So there are some there are some assets that were built natively
on Arbitron. There's some some applications
that are arbitral native that have chosen to Mint their their
projects tokens on Arbitron. So there are some of those but
most of the value on arbitrament has been bridged over from the
theorem. And how does a so basically you
guys build and, and operate Bridge, how does that bridge
work? And how, how do you envisage the
bridge landscape in the future? Yeah, so we have, we have a
basic bridge that can Bridge Heath and ERC 20s back and forth
and to bridge from L1 to L2. It's a, I think a pretty typical
kind of architecture. So you make a call to a contract
on L1. So if you're say your Positing,
'if I'll tell the story in terms of Youth, but it works pretty
similarly, if you're using a token.
So you make a call to a bridging contract on L1, and you pay
those III to that L1 contract, it will hold those eat that will
lock them up and your call to do that transfer.
You said, what address on the L2 chain?
You wanted those. He's given to usually your own
address, right? So, So when that bridge contract
receives those eith it will lock them up.
And then it will send a trusted message up to L2 which causes
the same number of each to be minted up on the L2 Chain by the
Arbitron code. And then deposited into the
account that you asked it to go into.
And so and then in the reverse Direction, it's kind of a
similar thing there is, you make a call to a trusted pre-compile
contract on the L2. Orbitrim chain.
Saying that you want to transfer eith that you own on the
arbitral Chain down to some address on L1.
And that will cause a trusted message to get sent from the
orbitrim code on the orbitrim chained to a contract on L1,
which will cause those e that you deposited back at the
beginning of my story to get unlocked and paid out.
So basically, you lock the assets, I know one they get
passed up to L2 and get minted up there and then you can do the
reverse operation as well and we provide a bridge that does that
One of the things that's important for eith, the story is
relatively simple for are see 20s.
You need to be a little bit careful to make sure that people
don't that each yes. Each token address on l 1
corresponds to a single token address on the layer 2 Chain.
And so you know, we have some functionality that lets people
do that but basically we provide a basic bridge and then other
people can provide more advanced bridging services on top.
Back. And so we see, for example, one
of the issues with an optimistic roll-up is that withdrawing
assets from layer to back to layer one has a delay and that's
because of that challenge, period, that I talked about
before in the protocol Jin practices seven days.
And so, if you don't want to wait seven days for your assets
to get from the arbitral chain back on to etherium, then there
is a number of different fast, fast Bridge services that you
can use. It will basically you can give
them assets on the layer to chain and they will right away.
Omit those assets back to you on the layer 1 chain, right?
And so these third-party bridging Services, provide a
bunch of value that people like, but they're kind of built on top
of the basic bridge that we provide, which is the basic way
that assets can be moved back and forth.
Anyway the the service that they're providing the liquidity
Innovation service and not a bridging service, right?
Not so much bridging. Yeah.
But they're also people who build Bridges between arbitrary.
Mm, and other layer, 2 Chains, or between arbitrament other L
ones. Besides etherium, what we
provide in our basic bridge is just a bridge between aetherium
and and and the arbitral chain and then other people can build
other things around it. On top of that.
There's a lot of value for users in those, in those sort of
third-party, bridging, and liquidity Services.
Yeah, absolutely. So I have an hour worth of
questions about bridges at least.
Unfortunately, we don't have an hour.
So basically, I will kind of cut this down to one question.
So, in the future, how do you, how do you think about different
scaling Solutions coexisting? Do you think that I mean, will
there be roll up to roll? Ridges.
I mean how do you see that working?
Yeah I think there will be so know there's a huge demand for
scaling, and we expect a large number of people to come into
the space and some, you know web to companies and others to come
in and bring a lot of demand and as much as you could, you know,
as much as we and everyone and a lot of other teams are doing to
try to scale up what you can do on one chain, the demand is
going to be more than that. And so we're going to see I
think Chains that are coexisting.
And some of them will be from the same technology from the
same provider and some may be different Technologies from
different providers. But anyway, there's going to be
a need to Bridge. And so I think we're going to
see more sophisticated, bridging systems and more sophisticated,
thinking about bridging, I know that in our research team were
thinking a lot about the multi chain future, and how bridging
can work, and what is the optimal way to do it without
sacrificing security and so on? And I think we're going to see a
lot of innovation sort of at the protocol level in designing
better, bridging protocols and that's going to provide a ton of
value. Because I do think we're headed
for a multi chain of future of multiple chains, and not just
like a single chain that wins. Cool.
Well, I mean he's covered a lot about arbitrary, right?
A lot of different aspects. I'm curious maybe sort of as if,
as a final thing. Can you talk a little bit about?
You know, what are the biggest things that are left to do?
You know what, what does the word arbitrary?
I'm roadmap look like So we have a few things that are coming up
soon. The first one is our Nitro
upgrade. So this is kind of a rewrite of
our entire software stack which is which is going to lower costs
and increase scalability by a large factor and is better in a
bunch of ways and that's currently on test net but will
be migrating. Arbitron one are sort of main
chain over onto. It is a sort of seamless
migration and Coming up pretty soon.
We're not talking dates yet but but it won't be too long.
After that, we're we're going to roll out another technology
which we call arbitrary many trust, which is a way if, if
you're willing to make a mild trust assumption, in addition to
trusting aetherium in particular, if you're willing to
trust the to out of n, members of the data availability,
committee are honest, then We can provide you with
considerably lower cost by moving, the recording of
transaction data off of the etherium chain and onto a sort
of replicated Committee of data availability servers.
That's arbitrary, many trust and we're going to be rolling that
out as well. Those two things are on our
shorter-term roadmap after that it's really about driving
scalability. We've, we have a bunch of cool
things in the Pipeline, which are going to drive scalability
up further on a single chain, you know, we're thinking a lot
about cross chain bridging and we're thinking about, you know,
ways of supporting a multi-chain world, because we think the
demand is going to be there. And I think there's gonna be a
lot of innovation in that area. That's kind of where we're
headed. It's mostly about driving scale
up and driving costs down, you know, I'm fundamentally a tech.
I'm fundamentally a tech person. Not We won in our team is, you
know, we to be to be successful in the space.
You need a lot of different, a lot of different types of skill
and an activity, and but for me it's all about sort of driving
the fundamentals of our technology forward.
And that's really what I'm going to continue to be to be focused
on. We have some really, really
interesting things in the pipeline right now.
We're heads down, getting Nitro and and any trust to delivered
and after that I think it's an open field.
We're going to do a lot and I think we can drive cost.
On it a lot and scalability up Allah.
Perfect sounds exciting. It where can people go to find
out more about a Bertram? Well, you can go to Arbitron dot
IO and to get information. If you're a developer, it's
developer dot arbitral. Yo, if you want to, you could
look at the Block Explorer, our block explore if you want to see
what's happening on our main chain.
It's Arbus can.i. Oh it's that's like the marriage
of arbitrament ether scan. Its that youth are scans teams.
Big block Explorer. Bye.
Dieter scan team that that lets you follow arbitrary, you can
follow us on Twitter at arbitrary more off chain Labs or
if you're interested in the Nitro technology you can
probably just Google arbitral Nitro and get a bunch of
information about about that including information on how to
get on the test chain that, you know, that is our role up Tech
of the future and roll up check of the near future.
So, yeah, that's all available. If you're interested in
following me, I'm Ed felten Fel, Tean on Twitter or or, you know,
you can find me online. Fantastic.
Thank you, Ed. It's been an absolute pleasure
to have you on and I learned a lot.
Thanks a lot for having me. This has been fun.
Thank you so much. And thanks so much for our
listeners as well, and we look forward to being back next week.
Thank you for joining us on this week's episode.
We release new episodes every week.
You can find And subscribe to the show on iTunes Spotify,
YouTube SoundCloud or wherever you listen to podcast.
And if you have a Google home or Alexa device, you can tell it to
listen to the latest episode of the epicenter podcast, go to
epicenter, .t V /, subscribe for a full list of places where you
can watch and listen, while you're there, be sure to sign up
for the newsletter so you get new episodes in your inbox as
they're released if you want to interact with us guests or other
podcast listeners, you can Us on Twitter and please leave us a
review on iTunes helps people find the show and we're always
happy to read them with thanks so much and we look forward to
being back next week.