It's good to have you on. That's great to be here.
Thanks for having me, quit. So, Danny Ryan is with us for
the theorem and Asian and we all talk about etherium to in a bit.
And we also have a special guest co-host today.
Martin compliment from gnosis. Yeah, good to be here.
I'm looking forward to learn more.
Quit before we Dive Right In, let me tell you about our
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Daddy. It's so good to have you on.
We've been meaning to do this episode for a super long time.
It's been way over you and just before the podcast we kind of
talked about the outline and it was definitely enough stuff to
actually fill at least two episodes then before we fall we
dive into the protocol. Can you tell us a little bit
about yourself? What brought you to the theorem
Foundation? What did you do before?
What piqued your interest in blockchain?
I honestly it's an honor to be here.
I early on in my blockchain journey.
I remember listening to epicenter and kind of gobbling
up all of the content. So it's cool to be on the other
side of that right. Now.
How did I get here? It's a similar story to most.
I think, honestly, I used to be a freelance software developer
for many years. I graduated college and was
like, I really didn't want to work a normal job.
I didn't want to work in an office.
I didn't want to live in San Francisco all that.
So I moved to New Orleans. And was just kind of like
helping small businesses with weird software, software
solutions. That was fun.
Did that for many years? And then I think I started
paying attention to etherium around the Dow pre Dow hack,
someone sent me an article. I think it was the New York
Times. It was like, all this money is
being raised for this weird thing and that, that piqued, my
interest. I had heard about a theorem
before and I hadn't realized that it actually launched, and I
started paying attention and the Dow in particular.
I know it was a The Fantastic disaster, but the fact that that
could exist and was happening. Really?
I think allow me to see and start to process what these Tech
this technology could do. So, I guess that was about 2016.
I became more and more obsessed at the beginning of 2017.
I realized that it's all I wanted to think about and all I
wanted to do. So I got rid of all of my
freelance clients and I said, I'm going to figure out and make
this my job. On the Journey of, how do I
actually make this my livelihood?
I heard this proof of stake thing and I thought to myself.
Okay. Well this doesn't make any
sense. This is ever gonna work a couple
weeks later, my okay. This makes sense.
This is interesting. But how can I, how can I make
this a business? And I do something with this to
make this my livelihood and like, okay, I could probably
make like a staking pool. So I started reading all about
steak and all about how it was going to work and all that kind
of stuff in 2017. Thinking that I could, I can
make a staking pool. Then I realized there was still
work to do. So I started helping out with
some of the work here and there like contributing to research
where I could and like, helping out with testing and various
things online. So come come and of 2017.
I had been collaborating on the internet, with various
contributors. I had been working on some like
testing infrastructure for Casper FFG different things.
And the EF was like, hey, do you want to join?
We have plenty of work to do. So I joined the EF at the
beginning of 2018 and at that point I thought we'd probably
launch Rufus take and about, like, six, seven months.
Little did. I know that?
I would still be working on that very problem today.
And as we will discuss, we proof of stake for theorem is live,
but it's certainly not completed.
And so, today I am still working on that very problem.
Super quick. Yeah, it's been a long time
coming. So what, what exactly do you do
at the theorem Foundation? So I work on the research team
and I do a mix of research specification writing and then a
lot of like communication and coordination around those two
things. So the E2 project is consists of
people, many teams at the EF, many external teams to clients,
whatever. That may mean eith one clients,
and the intersect is no ball bat.
So I spent a lot of time communicating with engineers and
helping People understand things and helping kind of coordinate
and make sure the project keeps moving forward.
Yeah, super quiet. How many people are are?
They're working on East, Who currently do you have any idea?
Definitely over a hundred but it there's there's five active E2
client, teams of varying size. There are probably 20 people at
the F that work on the stuff full-time.
There's people plenty of people that work on it, part-time
increasingly. So as we approach the merge,
we'll talk about later. What we call it with one clients
are increasingly working on. Merge, and working on E2.
And so it's quite quite a number of people.
It must be difficult to coordinate because I mean it's
kind of there's so much of research anger.
So to it and I think research is something that is not infinitely
parallelizable. Right?
Right. And you know, I'm one of
probably many people that coordinate various things and
it's it's a very organic open-source effort.
And so the amount of coordination isn't incredibly
High, although as a certain at the end of the day, we all need
to talk to each other and I need to like coalesce on on single
path and decisions. And so I try to help facilitate
that then maybe let's talk about the things that have been
decided and cannot visit our life and kind of.
Yeah, basically tell us about the state of your fascia or what
is life. And what is already working?
So first I'm going to answer what is what is easy to very
broadly and E2 is definitely a bit of a misnomer, but we can go
along with that term. It is a series of major
consensus upgrades for theorem aimed to make the protocol more
secure, more sustainable, and more scalable.
And at the core of that is the move from a proof-of-work
consensus to a proof of stake consensus.
So instead of securing the network with mining, We're
energy consumption securing the network with tokens itself The
Ether. And so at the core of that is
the bootstrapping in the creation of this new consensus
mechanism. And what as you mentioned is
live today is what we call phase zero and that went live in
December of 2020 and that was really the bootstrapping of this
new proof of stake consensus mechanism.
That is called the beacon chain. So in December tons of Theorem
community members and different institutions, put a bunch of
ether as capital and collateral. And to what we call the deposit
contract and kick-started this new consensus mechanism called
The Beacon shame. The beacon chain exists in
parallel to the current, a theorem Network.
So in parallel to the proof of work Network, which is still
securing, all of the assets and applications and contracts
accounts today. So we have on the one hand, the
proof of work Network chugging along.
And the other hand, this new consensus mechanism called The
Beacon chain existing in parallel to this building and
securing itself. I think today there's something
like 4.5 million ether locked and secured in this chain.
I don't know what that's worth today.
Depends on the the minute and the hour, but this thing exists,
this thing finalizes itself, this thing builds itself.
But ultimately what it does, is it just builds and secures it
Self and this is by Design. This is an iterative path to get
rid of the proof of work and to move, if they remain net to this
new consensus mechanism. Obviously if there are many net
is used by tons of people, secures tons of value and
there's a lot at stake in this, in this operation.
And so what we've done is built it in parallel, kind of vetted
it in production, tons, tons of tests live, and now, Working on
is actually the deprecation of the proof-of-work, consensus
mechanism in favor for this live proof of stake consensus
mechanism. So that's where we're at today.
There is a proof of stake in this is mechanism, bootstrapped
live, securing, tons of value, but really just kind of securing
itself in isolation. Then let's Deep dive into what
it exactly does. So right now it comes to
consensus on what? It comes to consensus on itself.
And it's by itself. What I mean is is the purpose
statement says is mechanism and all of the the little gadgets
and things in it. So it has a validator set each
validators worth approximately 32 eith.
So there's something like a hundred and forty thousand
validator entities in this consensus.
Each. One of them has like its own
little state. It has its balance.
It has duties. It has like a job at any given
time. It has randomness.
Action, it has information about finality.
So which portions of the chain are finalized and whenever be
reverted and it has a lot of just various accounting between
finality and kind of the head of the chain.
So there's a number of operations related to the
functionality of this chain and those operations are kind of
what we call validator level transactions.
So system-level transactions and really what it does is there's a
core operation called at two stations.
We're validators are constantly signaling what they see as the
head of the chain and what they see as their local state of the
world, and they use these messages to come to consensus
with each other. And ultimately drive this, this
core like system layer of the chain.
There's some other operations related to validate or activity,
like deposits onboarding, new validators exits leaving the
validator set and a couple of things.
So really, really it's like this.
This it's a proof of stake system and there's a lot.
Of different accounting, different little operations
going on and it builds and comes to consensus on itself.
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learn more in principle. I can become a validator, right?
So I need 32 eith and what, what do I need to do then to, to
become a Stager? Yes, anyone can become validator
if they have or accumulate 32 either, and what you do is
there's a number of different tools, the different tabs.
There's this nice real tool called launch pad, which has a
nice like user interface. You can do this in a number of
ways, but you can go to launch pad.
You do a key generation step, where you generate an active
key. So, the key that's going to sign
out to stations and build blocks and different things.
And then what we call withdraw, All credential which is can be a
cold key. It doesn't have to be on on the
machine that ultimately owns the funds when the validators done
with with validation. And so what that validator to
become a validator, what you do is you take that 32 eith
generate some keys sign a deposit message and send that
ether to the deposit contract, which is a special contract on
the current. If they remain etan eith one,
you send it with this data and then the beacon chain.
Which operates in parallel to that proof-of-work, network is
listening to the deposit contract.
Coming to consensus on the state of the deposit contract, and
inducting new deposits. So, right now, it's kind of like
a one-way Bridge from the proof-of-work, etherium into
this new Beacon Chang. Once you have your validated
deposit inducted into the beacon chain, there's a little bit of
like process overhead a little bit of time that it takes in
terms of come to consensus on this, then you get a new
validator record in the state of the beacon chain.
The beacon state is like This kind of system layer state of
this thing. And after a number of epochs
something like for epochs each Epoch see, 6.4 minutes you then
become activated and at that point your validator.
Now, each Epoch will have at least one.
If not a number of Duties, with respect to the the beacon chain
and they get little assignments and they listen to the network
and signed messages and talk to each other and come to consensus
on things. I went to directly ask about
the, the deposit contract because the premise of our was
that the two things are living in parallel, but that is already
obviously a connection. So, apparently you need, or the,
he's to chain needs to read from the East one chain, and kind of
needs to understand these one chain.
So does it mean that to run a each to validator?
You also need to run east one client or otherwise, how would
you know? That this deposit happened.
So yes, there is a one-way and very restricted Bridge from the
eighth one chain into the beacon chain.
And as a validator, you are running the beacon chain, which
is actually relatively lightweight and running the
etherium. One proof of work Network.
This is to be able to listen, primarily to that deposit
contract, and be able to build and connect that bridge to
bootstrap this consensus. Mechanism, which is a crypto
economic. This is mechanism based off of
ether, you do need Aether and so that link is critical for the
bootstrapping and functioning of the system as a validator.
You do have these two pieces of software that you're running in
parallel and communicate with each other.
And this actually is kind of Representative of what the
system would look like after the merge.
So once these systems are unified you, similarly would
have to run the beacon chain, which is kind of the system
lovable statement. As well as a piece of software
that will give you access into the execution layer into the
things that we know and love essentially like death -
proof-of-work plus Beacon chain. I assume it's incentivized to be
a validator. So what do I get?
If I get to build a block and how is it determine if and when
I get to build one? So there's two primary actions
that are rewarded for the validator and one is this action
called testing, which you are assigned to a test exactly once
per Epoch. So exactly once per six point,
four minutes and this accounts for actually 7/8 of your
validation reward. So it's the majority of the
issuance goes to this rarey regular intervals activity,
which is nice. There's a reason for this
because it helps with Kind of hardening the for choice and
keeping things. Very stable because many
validators get to even though only one validator at any, given
slot is producing a block, many validators, get to throw in
their weight and say what the head is.
So it makes it very difficult for these like this,
monopolistic activity of producing a block to be able to
reorganize and and do different attacks.
And it's also nice because it really Smooths out rewards where
is in, in proof-of-work. You're rolling the dice over and
over and over again and every once in awhile, you randomly
generated. A chance to produce a block and
get a big payout. Whereas in this proof of stake
system, the rewards and payouts are very much more regular eyes.
Even if you have just say one validator, so at the stations
are this like, very critical message type for securing the
head of the chain and finalizing things.
But then, as you said this other very critical role is actually
producing a block. And So based off your validator
assignments, which is based off of Randomness General.
Generation on chain which we can talk a little bit about every
single slot. There is exactly one validator
assigned to produce a block. A slot is every 12 seconds.
It's kind of like the heartbeat of the system.
So instead of this stochastic process of mining, which
randomly there's a target for Block time and randomly blocks,
get produced kind of around that Target.
Instead. There's this click of every 12
seconds blocks can be produced if the proposer shows up and
every single 12 Seconds, a producer, a validator is
assigned. And so, if it's your say it's
slot 10001, you had a little bit of look ahead, say you had 32
slots in advance. You knew that you were going to
produce a block. So you're listening to the chain
and you listen for valuable things to include in your block
and you build off of the parent and produce a block and
broadcast the network valuable things.
Today are primarily just these validator operations.
So at two stations Posits and things like that, but post-merge
you would also be including user land.
Application layer transactions and seeking to maximize
transaction Revenue, like, like, miners do today.
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epicenter. So what happens if for some
reason the the validators are designed to this block or slot
doesn't show up? A slag can be skipped.
So in the, in the normal case, this looks just kind of like a
longer block time. For example, sometimes we have
like just based on the stochastic process and proof of
work. Like, sometimes you have blocks
that happen in 10 seconds. Sometimes you have blocks that
happened in 30 seconds. So in the event that a slot was
skipped, you would have 24 seconds in between the slot
time. And that would look like a
slight reduction in capacity of the chain for that given time.
Interestingly with like 1559. The mechanics and variable block
sizes that can kind of like be self-balancing and the average.
But what we've seen in the live system is something like a 99.5
percent participation rate with respect to blocks and out to
stations. So in the normal operation of
the chain, so not crazy, Global Layton sees or not some attack
scenario or major failure in a client.
We expect to see almost all the time a block.
WE 12 seconds. So you said 99.5% for both the
stations and the Box? Yeah.
Alright. Okay, and do I get slashed, if I
don't show up, or if I don't detest.
So we reserve the word slashing for very explicitly malicious
activities and what can be more, severe penalties.
So, in normal operation, we have rewards and we have penalties
penalties. And so you have this dirty to
eat steak and if you do Job, well, you can be rewarded and if
you don't do your job or you like our fail, you're trying to
do your job and you can't quite find the head of the chain, you
might, instead lose a small amount of either.
And so in normal operation, if you and this is variable
depending on the validators, the size of a later set, but in
normal operation, in a year, you might make anywhere from like
six to twelve percent return on that third to eighth deposit.
Whereas, if you were off, Line the entire time you your
penalties would equal approximately what you could
have made. So you actually instead of
making six percent that year you would have lost six percent that
year and it's not just opportunity cost.
You would actually being penalized a little bit and seen
a linear decrease in your state. And so that's rewards and
penalties for all the basic activities.
You can either receive Rewards or you can be slightly penalized
if you aren't able to perform your job, there's individual
ones and there's also group. So like if the amount of You're
at the station reward would actually scale with this like
group mechanic. So if like a hundred percent of
the validators online, you can receive maximal validate a
reward but if only 80% of validators were online, you
would actually only get point eight of your total a sensation
reward. And this is so that there's this
like incentive one to not like - your neighbors and take them
down so you can get their reward instead.
And also in the event of Crisis, there's this group this group.
XO that you want to figure out what the hell is going on and
try to fix the network? So those are rewards and
penalties. You did bring up slashing.
Slashing is actually, it is a penalty, but it's a much more
severe penalty and it's in relation to these explicitly,
cryptographically provable, nefarious activities.
So for example, you're assigned to a test.
Every Epoch. This is very important for the
operation of the chain. This helps finalize things.
This helps secure. Head of the chain in the fork
choice and you're only supposed to do it.
Once for Epoch. If instead, you do it twice for
Epoch. You can be slashed because this
is an activity that could lead to lead to a network fault.
Essentially. The idea is in proof-of-work.
You have a physical real-world piece of Hardware that you can
only point to one chain or another.
So one fork or another and or you could split it, you can do
50% on that for of in Energy on that for fifty percent on the on
the other Fork, but you cannot put a hundred percent on to 4K
and a hundred percent on a fork be whereas in, in proof of
stake, that economic asset is actually just related to you
signing messages. Signing messages is really
cheap. And so the idea here is that
messages that can lead to you attempting to apply your stake
in multiple places and could lead to network faults and
confusion. As to what the head of the chain
is where to make those messages expensive.
Similarly, to how allocating your physical.
Sources, the mining Hardware was expensive.
And so thus, if you do some of these activities where you're
essentially signaling two different versions of a history,
you can be penalized severely because they're provably
nefarious messages and that's what is called slashing by
severe. I mean that if enough validators
were doing that type of like double signaling Within A recent
window of time to create a network fault and that minimum
threshold is 1/3 of the validators.
Then you'll be punished maximally.
So if one third of the validator said is doing / Abel, things
within a recent time window, then those Alders actually lose
a hundred percent of their state.
And that's because we want to have, like provable security
bounds based off of, you know, if and when attacks happen,
whereas if you're, if this is just like an isolated event say
I'm just running a The validator I do something ill-advised with
my staking setup and I'm signing double messages by accident then
and but no one else has really been doing in recent time.
When do I get a slap on the wrist?
I get kicked out of valid your set.
But since the fraction of alligators that have been
slashed recently is very low, my penalties like still relatively.
Well, I might lose like 1/8 and get kicked out of valladares up.
So that's so we have rewards, we have penalties for normal
operation and we have slashing which is for these like very
explicit. At nefarious activities like
double signing out to stations or producing two blocks in the
same slot, that kind of stuff. You're talking about slashing.
Is there a chance to do to do something?
That's so fundamental to the level that you get slashed by
accident? So concretely, well, we have
multiple client implementations. So.
Well, there might be the situation that one client says,
well, that is a valid block and another client says that's not a
valid block. And therefore is kind of
ignoring that and proposing. Another one.
We have seen some number of slashings on may not since
December and almost all of these have been due to individuals and
institutions creating sophisticated and attempted to
be sophisticated redundancy setups.
So essentially it's very if you have your keys in one place and
you're tracking the messages that you've signed.
It's very simple. It's very the logic is, can be,
you know, in six lines of code. It's very simple to like Not
double sign, essentially, a couple of conditionals and a
very, very small database and I can prevent myself from doing
this. But if I have my keys in two
locations, say, I'm trying to run client a and client B, and
I'm trying to run them on two machines to make sure that I
don't have any downtime. Then I'm going to be signing,
double messages, almost every Epoch, and I'm going to almost
certainly be slashed. And so this is actually what
we've seen is. We've seen some hobbyists that
That didn't didn't get the memo and are trying to make sure they
don't have any down time. They've been a couple of them
have been slashed but actually what we've seen more so is these
institutions who want to advertise, you know, the best up
time ever and what they do is they have like way too
sophisticated of deploys and and don't manage the keys properly
and have the keys in two different locations.
That's the key is you have your keys in two different locations
and they both think they're in charge and there, you know,
there's no communication there. You're going to be / because
you're going to Like eventually have a slightly different
worldview. Like one block, one client might
see the block the other client, might not say the block, and
they both will sign something different.
So, basically, your advice is not, don't do it too,
complicated setup. Will give a simple example,
because if you're offline, even for a day, like you're gonna
lose very, very little money. Because again, we have rewards
and penalties for normal operation.
You if you're offline for a whole year you might lose like
eight percent. Whereas if you if you like due
to complex of a setup, you're going to You will lose much, you
can lose much more than that. So there's many client teams and
a number of them have implemented.
This new feature called doppelganger detection.
Super Fizz came up with it and super foods from the East, a
community. And he the idea is right when
you turn on your client and it knows that there's some
balladeer keys associated with it.
It actually won't start its job immediately.
It'll wait like an Epoch or two and just listen to the network
and it Those that it's not signing anything in stop
broadcasting anything. So, if it sees any messages come
in from itself, it's detected a doppelganger.
And it says, Oh No, abort, abort don't sign any messages.
And this is actually a new feature that's rolled out a
number of clients. And I think it's protecting
especially especially the hobbyist with the simple setups.
Obviously, then you have like an Epoch or two of extra downtime.
But like I said, downtimes not the issue.
It's really like double signing is like the severely worse
activity. And so I think You can like
manually override you can do like a flag.
That's like - - capital letters. Unsafe disabled, doppelganger
detection. But for most users this, you
just run with the round with the default and and have those
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Periscope dot IO / epicenter. If you prefer to epochs
repeatedly now, so maybe let's talk about that because that's
something we don't have on each one.
So what is an Epoch and how does it relate to finality?
So an Epoch is a collection of 32 slots.
Like I said, slots are every 12 seconds.
So an Epoch is every six point, four minutes, slots are this
unit of time at which blocks and very granular.
Actions can happen. Whereas epochs is like a
collection of slots and there's like a, an aggregate of Duty.
He's and different accounting that happen at each Epoch.
And so every pocket search you slots.
Every validator is assigned to a test to exactly one slot per
Epoch. And so an Epoch in advance.
My validator client gets notified that, okay.
At the six slot into the next Epoch, you're going to have to
attest to the head. So at that point, you'll brought
you'll sign a message and broadcasts and out to station
and similarly like with an Epoch, you'll be, you can
potentially be assigned to a Blog.
And All the valid, the entire validator set, has this one out
to station / Epoch and thus, at the end of an Epoch is kind of
the when accounting is done. So, in the previous Epoch, we
go. And look.
Okay. How many at the stations were
there? Was their agreement was their
disagreement. What are the rewards and
penalties based off of, like the individual and the aggregate
activity? And is there enough consensus on
the state of things to update? The finality calculations and
Epoch can first be justified. And then be finalized
justification is kind of like this first round of signaling
for validators to the say. I think that this block will
remain in the chain forever. And then once something is
Justified, they can signal a deeper thought which is.
Okay. Let's now say this, this block
will remain in the chain forever.
And so what we have is this like to Epoch finality cycle where
the end of epoch at the end of Puck and you might justify it.
And at the end of epoch n, plus 1, you might finalized
optimally, finalizing POC. And, and, and in Maine, that I
think we see like pretty much every single Epoch just kind of
goes through that cycle of justification, that Valley
justification of finality. And that's also at these Epoch
boundaries is where a lot of like rewards accounting happens
and various other things. Like you might also at that
point update what the view of the the eith one chain is so
that you can induct do deposits and different things.
So it's really Really like it's these accounting boundaries.
It's really these larger than block groupings of logical
activity and and from from a finality standpoint.
You can really think about you have all these little blocks.
You can think about easy, foxes more of like larger packages.
It's kind of like the meta chain on top of the little, the little
mini chain. Does it mean the maximum kind of
reorganize that could happen is like one Epoch, or to epochs or
is that the one way to think about it?
So there's like, increasing depth and probability of re Orcs
in the East to begin chain, and at every slot, a validator,
first creates a block. And then 1/32 of the validator
set is during that slot, because they're assigned to that slot,
will then send it out to station, bad station
immediately. Gives weight to people's for
choice and recursively gives weight to the the chain prior.
And so actually, because of the way that the validator set much
of the validator set, participates each slot, you end
up with probabilistic guarantees at the depth of slots that the
chain will be reordered. So, it's something if feels a
little bit like proof of work at the chain tip, where there's,
you can make probabilistic claims, that there won't be a
reorg and less XYZ happens. And Under normal operation.
Those probabilistic claims are actually very, very strong
because most of the validator says participating and sending
signal at each slot. Then at the depth of one, Epoch
you can have Justified. So something 32 slots ago can be
justified. And this is really this is like
the cassette of the first step in finality justification.
You can make a much stronger claim that something just fiber.
Never be reworked because it would require a very large
amount of validators. Call it Least one-third likely
more in the 1/2. Even two-thirds realm to not run
the protocol. So it essentially to run an
altered version of the protocol where they stop listening to
justifications. Because once something is
Justified locally, you say, that's what I want to build on
and something won't be elsewise justified.
Unless people like change their local protocol, granted that
wouldn't necessarily do a slashing but it's the becomes
very, very unlikely then. The depth of to epochs.
So there are 64 slots or twelve point eight minutes, then you
can finalize. And this is, this means that
locally in my software, you ever seen that show, that, that is
finalized would never revert, and you can make claims that no
one will see a different version of finality and less a minimum
threshold, validators for / that minimum thresholds. 1/3 1/3 is
actually Theoretical attack could happen at one-third.
It's extremely improbable that you could even conducted at one
third and probably be much much higher.
And so you can make crypto economic claims that this is
finalized. This will remain finalized and
nobody else will see a different version of finality unless a
large amount of capital is Bern. And so we have, again, we have
like the head of the chain we get to make probabilistic claims
based off of all these applications, that things won't
be reordered. Then 32 slots to get
justification, which You know, for almost any operation is much
is enough depth and enough confirmation.
And then at 64 slots, we get that that finality, which is
like that ultimate claim of crypto economic, like it's not
going to revert. Yeah, thatthat sounds to me like
just very high level on proof-of-work.
It's kind of totally normal and totally expected that happens
multiple times a day that the single block or even two blocks,
get to get reverted here. It sounds like even a single
block or slot revert. Would be highly unlikely in
normal operations. Yeah, in normal operation.
Absolutely. So if I saw like 99% of the slot
at the station's, come in, I can make like I can be pretty well
assured that this is not going to revert, unless there's
actually something malicious going on.
If instead, I saw ten percent of those that slots at decisions.
Come in, then I wouldn't, I wouldn't start locally making
decisions necessarily because the I don't have like a high
probability guarantee, but in normal operation, we do see
almost all validators assign to each thought a testing each
slot. And thus, we do get that like,
probabilistic increase in probabilistic guarantee that
things won't be reverted. Yeah, so, it's In normal
operation as good as proof of work, confirmations, and then
increasing depth. Increasing kind of crypto
economic guarantees of non reversion.
But on a very fundamental level, this is still very different
from Earth one, right? Because on each one, one of the
general design decisions is of availability over consistency.
So, basically, the the chain can never hard, but this comes at
the cost that there might be re aux, right?
So and then you have like the the converse with a with B.
Ft side consensus algorithms that we try a bit.
Basically, they have finality, but in principle, The Chain can
heart. Very much like on tender moment.
It seems like he's to does something weird hybrid.
Yeah, this has this weird hybrid or this this middle ground that
I didn't even know existed before.
And so what are the trade-offs of having like this, this hybrid
model? Right, so like proof-of-work,
consensus. The E2 protocol is fundamentally
aliveness favoring, meaning that the chain can be built.
Even if you don't have these like, B of T thresholds of
validators and this is to provide kind of the uptime and
availability of the network that blockchain users and what I
think Global decentralized Network expects at that point.
It's ultimately up to local node.
Raiders to make decisions about what is accepted.
Like if if I'm an exchange. I might always only operate
under finality. But if I'm like sending an ft's
to my buddy and like we don't have finality, I know that this
this operation will clear and it's not a big deal.
So what we get here is really like we get a live chain and we
get a bft consensus kind of like following.
And so from the perspective of the designers to be to, that's
It's kind of, at least for the expectations of guarantees of
blockchain systems, a really nice compromise and the idea
ultimately is a safety favoring chain cannot simulate aliveness.
Favoring chain, whereas aliveness from favoring chain
can simulate a safety favoring chain, and thus, the latter is
ultimately like a more powerful construction because it gives
more optionality to users on how to interpret the world view at
any In time there's much debate on this point and as to like
what the quality of service can or should be and whether it's
really worth having these like live chains without finality.
But again that point ultimately is like the the clicking point
for me is really like sure, if there's not finality.
I don't have to finalize anything but I do provide
optionality. So users and systems based off
of like probabilistic guarantees and different things and
aliveness favoring. System.
Super interesting. So maybe let's talk about the
merge for a little bit. There would be the merge and the
merge with merge with one into the beacon chain.
So how exactly does that happen. When is it going to happen?
I imagine he's won and East to have separate states.
How is that handled? How do you, how do you kind of
make them congruent? So let's think about what each
one is. Each one is, and this is a
construction for each one's a lot of things.
And there's a lot of Is think about it, but for the purposes
of marriage, we can think about it in two layers.
We have this application layer or this execution layer, where
all of the users hang out. It's where all the applications
are. It's where the user layer state
is its where transactions are being processed and all that.
It's really like what eyes and end-user care about.
I care about you know, my you know swap trades and that kind
of stuff. And then you have this thin
purple work consensus module. That's driving it.
It's really like providing the Services.
Providing the quality of the writing, the service of this
execution layer. It's the Cradle four blocks.
It's providing. Guarantees about re orgs and
different things like that. And what we have is really these
two layers. We have the proof or consensus
layer, providing the application layer to services and to users.
And then what we've bootstrapped in production today is the
speaking chain, which is a proof of State can Us.
And the idea really here is for at one point in time, the
proof-of-work module, to be driving that application layer
and at the next point in time post-merge that proof of stake
module, that Beacon chain to be driving the same execution layer
the same application layer. And so the the transactions that
essentially the Cradle of ethereum right now is these like
proof-of-work blocks and that proof-of-work consensus and
post-merge the Cradle of ethereum.
Um, the thing holding it all together.
So ultimately, the beacon chain and the proof State consensus,
and you can imagine the essentially that payload for the
execution layer is essentially, moving locations, upon some
condition. And so, people are running
software that knows prior to this time or prior to this block
height. I'm listening to the miners.
And after this time I'm listening to the proof State
validators. And there's there's like a
number of little details to work through on the actual point of
Merge and how you may be handle attacks in this boundary and
reorg Zone this boundary, but the simple case is essentially
of a chain being built by proof of work at one point in time.
And that same chain that same like payload of execution layer
that validated that end users care about is then being built
by these by these validators. And the nice thing is
conceptually these layers are important from like a mechanism
design standpoint, but they actually translate into Really
nice like software reuse and so, we have what we call E2 clients,
which are these Beacon chain clients.
They've built a highly sophisticated proof of stake
consensus mechanism. And then we have like, what is a
nice one client? And he's one client, really is a
highly sophisticated execution layer.
It's highly, sophisticated evm, transaction processing mempool
management, and all that kind of stuff.
Plus, this thin, proof-of-work module that like, literally
hasn't been touched since day 0. It's a relatively simple
mechanism from a software perspective and it hasn't been,
it hasn't been touched. And so, what the software after
the merge looks like, it's really taking a nice one client,
which is primarily a highly sophisticated XU Xin layer
cutting out that proof-of-work module, which is was the driver
of that execution layer and instead of listening to that
proof-of-work, module listening to Annie to client.
And so the the the software post-merge actually looks like
you take these two clients which are highly Lisa skated proof of
stake consensus mechanisms, you take an eighth one client, which
is a highly sophisticated execution layer and you smash
them together and you have the perfect steak client driving
that execution layer asking questions about the extinction
layer. So for example, instead of the
proof-of-work module saying hey, give me a.
Give me a valuable transaction bundle to include this block.
The beacon chain client is instead saying, hey, guess.
Hey, never mind. Hey opened a theory.
Mm. My local adjunct execution
engine. Give me the give me the valuable
pale. Hey process.
This payload in that kind of stuff.
You mentioned. So there's a state before in the
state after really that state. There's there's a beacon state
which is like the system layer state of this proof, estate
consensus mechanism. And then there's the application
layer state that exists in these in these like proof-of-work
blocks today. And really this consensus
mechanism is really good at doing that.
It's really good at company consensus on things.
And so it's really just like slotting in its state transition
and in its in, It stayed. It's embedding the execution
layer state of ethereum into that.
And so, if you think about it, as like a tree of all the things
embedded in, the The Beacon chain, outer, layer, state that
is built and finalized, you're essentially having, like, the
application layer of a theorem is embedded into it as like a
subcomponent of its state. And so, that application layer
state right now, exist in like, the proof of work land, and it's
really just taking that application layer say and
subsuming it into the beacon state, which Which when you
finalize the outer state route of the beacon State, you
finalize everything within it. And so you, then just, if within
it is the application layer State that's been consensus on,
then you get, you know, these finality properties and those
are properties that proof of stake is giving to itself.
So you're kind of spooning over the state, but I mean in
principle, the miners can continue with the original
chain, right? So, basically, this is kind of a
natural break point for fork. Yeah, I mean it's if anybody
wants to run proof-of-work, theorem, I think blockchain
governments governance ultimately works, is that anyone
can continue to run it. There's a couple of things that
I think might make it not super viable.
The theorem Community has consistently since Genesis put
this thing in called the difficulty bomb.
The difficulty bomb was intended to ultimately at the beginning
to, to allow for The inner shift to proof of stake, ultimately
like the mining difficulty at these points of the difficulty
bomb increases exponentially so that it becomes non-viable to
mind that prefer work chain, unless you actually hard for.
So that might dissuade a proof-of-work fork here, but
another, another interesting point is that when in the last
contentious, theorem hard Fork, so which created a theorem
classic? There wasn't a lot going on in
the application layer. There really was this dowel
thing and then a bunch of like little experiments.
And so the application layers could kind of for can exist in
parallel and it wouldn't, it didn't really.
There wasn't really any of these like, big dependencies and
stuff. Whereas I would posit that if
theorem forked today and you had a majority Community stake in
one and then a minority communities taking the other
that the application layer on the minority one is likely going
to. Implode, there's a lot of
Interdependencies and a lot of value and stuff here.
For example, oracle's may or may not be run on the minority fork.
And even if they are you have systems like maker.
Which if they're, if the value of the eith on one side of the
other drops significantly, you have like Masa quotations, then
dies integrated all into D Phi and you have Rippling all the
all the effect assets that you see tether and so on.
So yeah, I am. Also think like the the the
support for proof of stake in the your theorem Community is so
overwhelming. That I really don't think there
will be any debate or any question kind of what direction
are. Definitely from a community
perspective. I'm like 99.99% are just like
let's do this. We've been wanting to do this
for years. Can we just do this?
Come on, whereas you could theoretically run a
proof-of-work fork, but I think that it will quickly become a
wasteland. You said earlier that proof of
stake has two main reasons behind it.
So one is the Environmental sustainability and I think
that's pretty straightforward why?
That is the case and the other one is the security.
So let's talk about the security aspect.
Why is proof of stake good for security purposes.
So perf working for the sacred, fundamentally crypto, economic
consensus mechanisms, meaning that they have certain
properties if no entity has certain.
The value, securing the network. And so they're pretty similar in
that sense and have some similar properties because of it, but I
think the the Crux of the proof of stake having higher security
is really because that asset securing, the network is
actually in the protocol and so you can not only reward that
asset, you can penalize that asset and this especially in the
failure modes, leads. Too much more secure system.
So let's think about what happens.
If a proof-of-work chain is 51% attacked if proof work chain is
set to 1 percent attacked. That's kind of it.
Like you have a you have a party that has 51 percent of the
assets and they can reorg and do whatever they want.
They're the only recourse here is forking the protocol so that
you have a new mining algorithm at which point you bricked, all
the good guys Hardware as well. You can think about it as
there's a budget for the attack. The budget for the attack was
securing, 51 percent of the assets, but then they're
ultimately really wasn't a cost. And so once I secured the
budget, I'm now just God whereas in proof of stake because those
assets are in the protocol. There's a budget, so secure 51
percent of its assets, but then there's also only a cost as well
because if if you do connect a network fault, then those assets
are slashed. So I can do the attack once and
I lost all my money and I have to accumulate all his assets
again and do they attack again, you know, where is in
proof-of-work? I just entered god mode and
could reorg over and over again. And in the extreme where your
some say, maybe hit like two-thirds threshold and you're
some sort of like censoring majority or cartel.
This can also be detected socially, so I can, I can
identify this cartel. This censoring majority and the
extreme there. I can be social recovery.
So these assets could be forked out of the protocol and burned,
whereas, in proof of work. You don't have this nuance and
you the only, the only recourse was ultimately forking.
The good guys, and the bad guys out.
That's definitely like something a failure mode.
You don't want to run into but the fact that that recovery does
exist. I think ultimately would
dissuade even those extremes the types of attacks.
Yeah, I mean, this is a question about what is more secure.
I think the debate. Well, was going on for years and
I think I really think it's settled now.
I really think through steak is, it's absolutely clear.
One thing where it's way less clear to me, how it will play
out, is the question of centralization because
originally I used to bring up the argument that proves take
would lead to less centralization than proof of
work because improve Work. You have the economy of scale.
So you have if you spend, I don't know, 10 million on
mining. You will get at the end better
return for your last dollar, then someone who just spends,
$1,000 and Mining. While was proof of stake
arguably or well, maybe that that is less case and kind of
each validator. Even if you just have like, one
validator you kind of probably will have the same rewards that
being said there are Second arguments, I would say, also for
centralization in proof of stake and that is likely the idea of
taking derivatives and I mean it to some extent that's already
what we are seeing is that, of course.
Yeah, there are specifically now where you cannot get your
easier. Well, immediately out.
So it's quite quite a commitment to do it.
Manually or do-it-yourself kind of steak.
You're 32. Sir, you could just go to an
exchange and they will offer you a nice service.
They will say, okay. Well if you want to go out while
we find a seller for you, we we create a taking derivative or
whatever. We call our Market.
Yeah. Yeah, and we have a market for
that and of course to someone to to an individual.
I mean that's that's a big big plus.
But that comes at the cost of. Yeah, well or threatens the
decentralization and I maybe, you know better than me.
The current statistics. But exchanges play already a big
role. Right?
Right. I mean, between exchanges and
staking pools. It's probably something like 50.
55 percent of staked assets that we can tell today.
There is a definitely a strong hobbyist community, and, but
you're right like this, there's this like, before the merge,
those, this, this unknown lockup and so liquidity is certainly a
question and certainly a driving factor for people to move to
these these other types. Institutions it there.
Anything we can do about it, huh?
So there are some things that are done today.
So one thing I mentioned earlier, this is, this is kind
of a minor point, but the fact that you can participate with a
very small percentage of the network and still have regular
rewards and payouts, that's like a nice little thing and that
helps the hobbyist community. One thing that is designed into
proof of stake systems, which is not in proof of work systems is
there's these like dis correlation incentives and so If
you are with a majority, if you're with a very large staking
institution and they go offline, the amount that you lose is much
higher than if you were going offline and isolation or in even
a smaller pool. Even worse is if you're with one
of these large institutions and they have some sort of security
breach or some sort of bug or issue.
Then that causes them to be slashed.
Then again, the amount that with the truth / scales with the
percentage of the network that was recently / and If you're
with like a 30% stake and pool or 30%, staking provider
exchange that has major slashing event.
Say somebody internal just wants to watch the world burn or
somebody hacks the system or they're running just buggy
software or someone trying to be clever with their redundancy,
you know, you would lose quite a bit of capital and so there are
these disincentives to being with the large institutions.
This might drive you to be a hobbyist and steak at home.
But this also, I might drive you to be, you know, with a smaller
pool. And so I think, even if we end
up with a highly pulled landscape, which we certainly
are beginning to see, at least in the 50% range.
There's still these incentives to not be with with the mega
players. And so whereas in mining, I
think we have like two or three pools that you have them
together in Europe. 51%, The only thing that keeps those
pools from being larger than that is is because it's not
socially tenable ultimately like it wouldn't, you know, people
don't want to. The pool, that's too big.
Whereas there's actually a disincentive of joining pools
that are that, are that large and staking landscape.
It is unfortunate that those disincentives are in the tail
risk scenarios, which I think that humans are pretty bad at.
Really, assessing tail risk. And so I think we might we might
see waves of centralization and decentralization as some of
these events happen. So if something major happened
to a major exchange, all of a sudden, we might see everyone
like scatter their steak and and and read.
Distribute, but we shall see. Second derivatives are
certainly. Another interesting thing.
I think we've seen, there's a, there's an entity that has
something like seven percent of State assets right now.
And I think that number has increased quite a bit in the
past few months. And that's primarily, because
they offer, I won't use the word decentralized.
They offer, they offer an on chains, taking derivative.
And this, you know, they have interesting mechanism where
they're kind of Distributing their kind of like this
tokenized, middleware. Then like distributes to various
pools. And so, all the represents 7% of
the steak. It's actually distribute to like
10 pools underneath the hood. And then you have these taking
derivatives that represent like kind of the the shared risk
across these these pools. This is I see as a competitor to
exchanges rather than a competitor to hobbyist.
Like if I'm a hobbyist. I'll probably be a hobbyist.
Whereas if you know, I was going to go to coinbase.
I might instead go with this, like decentralised option.
I hope that we see a number of these, so we see a lot of Titian
and I hope that we see a number of likes taking institutions, so
see a lot of competition. I am more optimistic probably
than you led in terms of the although we might see like a
highly pulled and highly institutionalized space.
I think we're going to see much better properties than we've
seen with mining pools. I mean, one one, is that every
exchange wants to get in on the action.
So, every exchange is probably going to create a product,
whereas, mining pools. We saw.
So very few entities that ultimately are these like Large
pools. Yeah, one when I commend you
brought the disease, definitely very strong is just this
continuous payout. I mean, that was definitely a
driving factor for mining pools in well, in proof of work.
How is that affected after the merge?
Because then well, I guess we are talking about transaction
fees. Do they go then to the block to
the block producer or at least probably Mev will go to the
block producer. So so, you know, that will
affect the value of the payload of the application, their
payload, so, Transactions. That we know and love goes to
the lock producer. They're the sole entity
responsible for bundling and finding that value.
And so they're the ones that are paid out.
This actually is definitely like a especially in the like ever
evolving landscape of Mev. This is definitely a huge point
of research and huge point of discussion.
And ultimately, I think it comes down to the democratization of
Mev meaning who has access to To it.
How much of an edge do institutional players have over
hobbyists? And I ultimately, I think it's
very important for one for application layer contracts to
design their systems. They don't have highly
exploitable Mev, and to, for Tool, open tools and open access
to Mu V to be created. So that hobbyists have don't
have like a huge discount on institutions and 3 even
investigation of layer 1. Call techniques to, for Meb
minimization. For example, 1559 ultimately
does put a bound or does reduce the amount of Mev available
essentially, like the because of that in protocol burn.
So, there's potentially is very like, exciting area of research,
but potentially, there are other types of techniques that may
make its way into the protocol over time.
There's also there's, there's a security component here the
classic bit. Coin issuance model is not
sustainable hinges. Upon the fact that as the
issuance goes towards zero and transaction fees become the
dominant component of the block that it becomes the mine on the
head, it component of the protocol becomes game,
theoretically on stable, whereas I might, you know, 520 person
the network. And I see these like huge
transaction fees. It might actually behoove me to
reorg. Try to re attempt to reorg the
Head even though I only have a small probability of doing To
try to get those fees. And what we're seeing with with
the rise of it, my TV and that ratio of like block value to
block issuance go up. We definitely see some of those
like similar weird incentives. Pop up on the layer 1 security.
And so that's like definitely a huge component of research and I
wouldn't say quite a huge worry, but there's a lot of people
think about this. Yeah, you interesting Insight at
least for me that reducing Mev might be a factor for
decentralization. Yeah, absolutely.
And so it is certainly a concern, I think in a world in
which you had, you know, hobbyist couldn't access Mev.
And you had major institutions with pouring hundreds of
millions of dollars into optimizing.
Mev. That's definitely like not a
good outcome for decentralization.
And so there's a kind of a huge parallel track of research right
now on democratization and and maybe minimization.
I think is going to be critical to the security of the system in
the future. Yeah, I mean even if it's
completely democratized and everyone would get the same, you
would still have the variance issue.
So you would still them. So you would have you would have
certain you do have those consistent payouts, which maybe
keep your machines, keep your lights on.
But you would see these like larger payouts.
But so it's definitely a definitely like the the optimal
of like having these like very clean consistent.
Revenue streams changes, it changes.
The the calculation certainly. So the other thing that if
you're into is going to bring I'll be it not immediately is
scalability with with sharding. So for some reason this is
lumped together with the proof of stake transition, but it
won't come live until next year. I'm guessing at the very
earliest. Is that correct?
Later, for sure. So, yeah, the the East to I
think I often say is to increase, security,
sustainability, and scalability while retaining decentralization
and this is so that we can theorem can can provide a secure
and sustainable environment for the world's decentralized
applications at the Crux of sharding, at the Crux of this
consensus mechanism. Being able to provide more scale
is really like sophisticated. There's some design and it turns
out that it's much simpler to design these mechanisms when you
have a valid, when you have a participant set when you have a
validator set when you have like the consensus entities at hand,
to essentially, like orchestrate and dictate through mechanism
design with proof of work. There's this notion of there's
no notion of validator set at any given time.
There's no notion of consensus set.
And so a sharding, which relies heavily on randomly sampling and
validators and Since entities validating subsections of the
system at any given time, really needs to know this the set, you
can imagine. There are like, some proof of
work charting designs, but they ultimately end up trying to
mimic a proof of stake, sharding design and that there might be
some sort of, like, election into a set.
Like, you have to mind or certain amount of time and do
certain out of blocks and all of a sudden you're in the set and
you can be sampled and it's much cleaner and much simpler to just
have a validator set know. And with proof of stake, we get
that out of a box and so really the foundation is get a proof of
stake in. This is mechanism out there and
then to come to consensus on valuable things valuable.
Things are the execution layer of a theorem today, the
application layer and also more things.
So so sharding Russo, take this consensus mechanism and utilize
it for the value of there. And there's really the
prioritization here between these two major upgrades, the
merge. And sharding.
The question was which to come first and the really nice thing
is that there are tons of scaling efforts layer to scaling
efforts going on in parallel to all this layer.
One development, and so coming online today and increasingly.
So are these these Roll-Ups which scale with the amount of
layer, 1 data and and aim to provide like ten to a hundred X
scaling for theorem without changing, which I'm moving to
the sharding designs. And so what we get to do is do
the merge which gets rid of proof of work which makes the
system more secure and more sustainable simultaneously.
We get all these layer to scaling Solutions, which makes
the system more scalable. And then further down the line,
bring on sharding which would complement these layer to
scaling solutions by providing more more layer 1 data to, to
get even more scale. So essentially all these all
these Roll-Ups are there buying it's time.
We get to work on the other two components through the merge and
then Then and then prioritize sharding.
So essentially if we did we did starting today instead of the
merge we might get, you know, we get all these layer layer twos
and then we get all this all the scale from sharding and but we
didn't get the, the increasing centralization, increase the
stability. So instead we get to tackle them
all at once at these different layers and then enhance it
further down the line. From your perspective, is it is
an option on the table that it will stay proof of stake that
basically saying kind of, well, we do the transition to proof of
stake. But after that L tools will do
just drop and that's it. I don't think so.
But I mean I don't get to decide you could imagine some movement
at the community being like this is enough, stop stop messing
with it. And and you know, I think
ultimately that would be it with with ten to a hundred X scaling
with Roll-Ups. Like that would give us
something. I think the theorem would be
very valuable and Powerful tool but I don't think that it would
give us the the scale that much of the community has imagined
throughout the years and so What we do have going on right now is
there are shouting specs up in the spec repo.
There are people working on our D and working on prototypes.
I think even within the next few weeks, we might see like a very
small, like sharding Dev net which builds upon the beacon
chain and the merge. And But ultimately like from an
engineering perspective like one had to be prioritize the other
or we just both with would take longer.
And so yes, there's a lot of unknowns.
There's always a lot of unknowns and and the roadmap and the
technical Specifications have often been been in flux and so
like you could imagine in 12 months, something radically has
changed but I do think that come the end of the year with the
hardening of the sharding specs and with increasingly some like
test nuts with some of the people that are spending on
prototyping that will have like a good idea as to how the slots
in in the next like 12 to 24 month roadmap.
Obviously, there's there's this thing we call E2 which is all
the stuff we talked about. Far.
But there's also like tons of other shit.
People always want to do and prioritize.
And so like it's a constant kind of debate and discussion, other
other things, you might have heard of, or like, State
Management and state sustainability through, like,
statelessness and other techniques, which help reducing
the load of running a full node. A child with, like clients, all
kind of stuff. So there's, there's a lot of
different parallel Rd efforts. I think I can say very
confidently. The next major thing to go to
Maine. Net will be merge the merge.
But then post that it's of a very active discussion debate.
Yeah, I'd love to do another episode sometime about charting
and the other efforts just because, you know, having them
like on the sides like this. It doesn't do them justice, but
I do actually have a couple more very tangible questions on proof
of stake. So who we got to determine the
block gas limit after the merge. So the execution layer is like,
at the beginning, the merge is untouched.
So the essentially everything dictating that realm is ported
and instead of the proof of work miners producing and sending
signals on that. It's the, the proof of stake
validators. And so, in the construction of a
block that has this execution layer payload.
Similarly, the got the block gas limit could be dictated by by a
validator than by proof-of-work minor.
So that knob still exists the block producer, can still turn
that knob? The block producer, just happens
to be a validator now instead of a minor.
Similarly, like the 1559 feet mechanics, which are expected to
go live in the next couple of months that mechanic at its core
is in relation to the block producer, right?
And the by producer post-merge happens to be a validator rather
than a minor. On this topic.
I really have a very high-level question on how we see where how
you see etherium and specifically with this.
Yeah. Question of what's the purpose
of etherium and is there potentially even a conflict of
interest? So what I'm talking about, one
way to look at the theorem, very critically currently is look at,
look at the high fees and see you.
Is and applications paying currently enormous fees.
So, one way to look at it, very negatively, would say well, they
got lurked into this chain. They kind of started their
assuming. Well, everything would be cheap
and it free and currently they are getting the maximum idli
rent extracted from from, from, from those fees.
And I mean, that the, The Narrative is getting stronger
around ultrasound money or kind of making a lot of money in a
way with it. Theorem so to what extent or
maybe what's your comment on that?
Or is there a chance to come to lower fees?
Or maybe even the question? What is one?
Yeah, I mean I'm I don't claim to be an ultrasound money asked.
I do think that these systems that the foundational asset is
systems must be valuable because these are crypto economic
systems and they rely on crude economic consensus models, which
generally are more. Secure when that foundational
asset, does have value and so I get the push their mean, there's
probably two pushes their some people trying to make a lot of
money, but ultimately a secure ether, highly valuable security.
Third does provide good properties to the system.
So but but that aside the Crux here is ultimately capacity,
which is Supply and there's a demand, you know, as outstripped
Supply. Quite a bit and people really
want to use the system because of the network effects because
all the shit is there. Like you said, they've been
roped into the system. That's where all the action is
happening. And there's also like a an
argument that and maybe against kind of the tail risk thing.
But this is seems much more secure than other systems by
virtue of everything happening there and buy the network
effects in the value of the foundational asset.
Ultimately. We need to figure out how to
leverage this secure network. For more capacity and and
there's a couple of techniques there and we talked about
earlier but Roll-Ups kind of go into this realm of can we can we
use this as like a settlement layer to like a parallel system
and leverage and get the same security out of it.
It turns out that you can and it has been quite a journey to the
to construct systems like that. I think plasma was like this
promising thing and we kept running into this issue of like,
ultimately like There's there's a date, availability problem.
And there's all these like, kind of Ransom attacks and different
issues, that arise, their Roll-Ups solve that, and are
extremely promising. To use ethereum more as like
settlement layer to leverage, its security to secure much more
insecure, much more activity, which is great.
And then ultimately sharding, these techniques of random.
Sampling of using consensus participants in a way that does
not. Degrade security, but can come
to consensus on more. Ultimately.
Like what is L1. I mean no one's L1 security
model on a certain amount of capacity and with other with
with a spectrum of decentralization.
I think it's Theory. Mm thinks the theorem Community,
the theorem ethos thinks that decentralization is like a very
critical component to the value of these systems, into the
value, to the world, and thus all of those design decisions,
that sharding, the how It more capacity ultimately like is
unwilling to really sacrifice on decentralization and thus it's
taking time and it's difficult. And I think one of the reasons
that a lot of applications and things are here is because of
that. Ethos, because of that
philosophy because of the value that we think decentralization
is going to bring the world. But we see a lot of other
competing systems that I think make different designs
decisions, especially on that decentralisation Spectrum,
provide much more capacity and the systems may or may not have
there. Place in the future, but I think
if there is attempting to build a certain type of future and
that's really The Guiding Light and I think really ultimately
the value proposition. Cool.
Thank you that that was super fascinating and I'm afraid we
kind of have to wrap because of because of time not because
we've run out of things to talk about Danny.
It's been an absolute pleasure. And where can we direct people
to learn more about eat or even join the effort?
So this is fantastic place called The eith R&D Discord.
It originally was the kind of an easy to effort and then the all
core devs, the theory one effort at all merged, and it's just
this, like fantastic. Fantastic place to get involved
in anything L1, etherium Rd. So check that out.
You can find links on, like, the spec repo you can, I think you
can probably find it pretty easily.
There's III search, which is a more asynchronous Forum to
discuss. Research ideas.
There's the E2 specs, repo or a lot of the magic happens on
getting the specifications for this major upgrade in place.
And then there's the, you know, the dumpster fire of crypto
Twitter, which you can at least like find access points into
into all these different things. With a link to all of these in
the show notes. So thank you so much Daddy.
Yeah. Absolutely.
I really appreciate you having me as a fun fascinating
conversation. Thank you for joining us on this
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