This is Epicenter episode 524 with guest Renee Reinsberg and
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Welcome to Epicentre, the show which talks about the
technologies, projects, and people driving decentralization
and the blockchain revolution. I'm Frederica ANZ and I am here
with Rainey and Marek who are the Co founders of Cello, a
mobile first blockchain with a strong emphasis on serving
underserved communities. It's.
Great to be here. Yeah.
Thanks for having us back. We had you on previously, but
maybe we can do a quick round of introductions and giving a bit
of background on who you guys are, how you met and what makes
you get up in the morning. Sure.
Yeah. No, it's it's lots.
A lot has happened since we were not from the show.
But yeah, I was just doing the math the other day.
Merrick, we've been working together for 12 years at this
point. So American has started a
company. Previously we met at MIT, there
was an AI company, though back then we didn't think about it in
that way, but it was, you know, they're kind of the common
threat there was. It was actually helping small
businesses. So again sort of you know, sort
of you know trying to support the little guy by better
competing online and we sold the company.
To to GoDaddy and worked there for a few years, helped take
Good Daddy, Good Daddy go public.
And after that we went back to the drawing board.
And yeah, a lot of the ideas that we were getting kind of
excited about were things that, you know, we felt the technology
to solve this was was Web 3. And so that was, you know,
getting us into the the the rabbit hole.
So yeah. Going on 7 years of working on
what has become seller which is which is super interesting.
Yeah, you definitely make a sound old in crypto when you say
that, it's kind of hard to believe seven years the past
already. Yeah, maybe just to add to that,
you know, I have a technical background at MIT where where
Renny and I met, I was working on a PhD in in parallel
computing and. Working on something called
deterministic multi threading, which is very coincidentally has
a lot of relevance for scaling blockchain platforms today.
And yeah, coming back to the origin story, you know, we
initially started by building a wallet on top of Ethereum.
That wallet has now evolved and become Valora, which you can
play around with, but back then. You know, we wanted to make
something that was just really easy for everyone to use that
was stable, Quinn focused that could be like a kind of a global
Venmo like product and we tried for a while making it be
sufficiently easy for for normies, although back then we
didn't call them normies and ultimately we realized that that
to do that we needed to to launch.
Or to work with a community to launch a new chain that had some
of the features that would allow you to build a really easy to
use experience. Fast forward to today the the
network is live and it's been humming along really well for
for the last couple of years. Velora is out and used in in
countless countries. Yeah, the community and
ecosystem keeps growing. And so it's just, it's just been
really exciting. Yeah, super interesting.
You just alluded to the fact that kind of Sello had to be
built in a specific way in order to kind of work for nomies and
on mobile phones. So what does that mean
concretely in terms of technology?
Yeah. So I think first and foremost,
you know scalability. You need a a chain that can keep
gas fees cheap. Just last week's seller
processed 20 million transactions in one day without
raising gas fees, processing I think on average 270 or so
transactions per second for again for 24 hours.
So I think that's a good example of just how scalable we've been
able to make and really it's the validator ecosystems being able
to make the seller platform. Secondly, we really wanted it to
have a mobile focus and so we worked really hard to create AZK
Snack based like client that that can sync on mobile devices.
But I think even more importantly, we worked really
hard to create something that we now call Social Connect, which
is a protocol that lets you effectively connect your phone
number to your wallet address in a privacy preserving way.
This is an optional feature that some wallets implement, and the
wallets that do implement it allow you to effectively send
value to to people in your contact list, which is just a
real delight for for anybody who's not crypto savvy.
And then finally we, we learned early on through various tests
in in Argentina that. Paying for gas with volatile
assets was just too too confusing for a lot of users and
so we we actually built native support for paying for gas with
tokens that doesn't require account abstractions.
This is supported by EO as and that allows users to send, you
know, stable coins to other users who can then forward those
stable coins onwards without ever having to think about it.
You know what a gas currency is and how to get one.
There is a whole lot to unpack here.
Maybe let's go through them one by one because kind of I want to
understand them in detail. So how do you make it scale?
So kind of how do you get more transactions per second?
Because kind of, there's always kind of this scalability dilemma
with the security. How how do you get it to scale
to such lengths? Yeah.
So I think first and foremost by having an efficient proof of
state consensus protocol I think and then secondly working hard
to to ensure that EVM execution is happening quickly.
I think both of these generally are challenges for EVM chains
and you know we've been chipping away at kind of both of these
the. Reality is on the consensus
side, you know there there is you know obviously this dilemma
and it's difficult to achieve Ethereum level levels of kind of
decentralization while achieving you know one block finality,
short block times with a really high throughput.
And and that's why we're also really, really excited about
kind of this coming home to Ethereum, so to speak.
Through this L2 plan that Stello announced or I guess it's C Labs
proposed and then the community voted on and agreed upon earlier
in the year. And so I think by transitioning
Cello to an L2, we can inherit Ethereum's decentralization
while still offering these really great features, these
this high throughput, this, yeah, just this high throughput
that, that the chain provides. We'll get into that in just a
second. But maybe that's kind of go back
to kind of the way that kind of Sello started.
So basically, are you saying that kind of the way that you
could scale so efficiently was by having a fairly constricted
set of validators when compared to Ethereum?
So Ethereum has like 600,000 validators, right.
So basically, how much did you have have to constrict it in
order for you to kind of get these really amazing
throughputs? Sellos right now has 110
validators and it's actually constricted not by the consensus
protocol and scalability limits, but more by the the ZK snark
like client that we have. We built this like client,
started working on it I think four years ago, launched it two
years ago using I would say first generation ZK technology.
It's a huge achievement. We're really, really proud of
it. But it does use a very, very big
circuit, two to the 27 constraints using a very big
curve PW 6. And that is a very big proof
that we have to generate daily on a very big machine and we
couldn't increase the validator set beyond the current limit
without making that even more. Onerous and so so that is the
current constraint but as it so happens you know it it we think
it's a really great level of decentralization especially for
a decentralized sequencer as again so it positions to anal to
OK so basically that means like users have azk like client on
their phone and that means kind of they don't have the full
state but kind of the full state is kind of like processed by 110
validator is kind of giving you that level of decentralization
is that is that kind of reframing it correctly.
So yes, wallets can can use, wallets and apps can can use.
We have some code that works in in using Wazem networks even in
a browser. While it's in, the apps can use
like client or they can use a decentralized RPC endpoint like
Lava, or they can use a trusted endpoint like Interior and
connect to chain that way. Absolutely.
OK, why don't we see more mobile first block chains?
Because in principle it seems almost like a no brainer, kind
of that there would be at least some.
Because kind of if you look at the word as a whole, almost
everyone is kind of primarily on their phones rather than on
laptops or more powerful devices.
Why don't we see more of those chains?
Yeah, maybe I can. I can jump in.
I do think there's. Certainly you know it's been
surprised to us for how long it's taken for more you know for
the broader ecosystem to kind of think more about mobile and
we're we're seeing this you know even if you look at sort of the
kind of average transactions on say UNISWAP or curve on Cello
right versus unlike Ethereum in it right amounts tend to be
smaller people are accessing these steps from their, from
their phones, right. And I think that's.
There's a fundamentally different use case and for a lot
of the early builders, right. I think it was just more
lucrative to focus on sort of more high value transactions,
right, that traditionally still you know, tend to happen on
desktops, right. So for us it was really it
started just with being you know, in a sense being very
determined to try to make this work for everyone, right.
And obviously like you said, most people have mobile devices
and. It kind of extends into the
ecosystem, right, where there's the, the technical architecture
of the chain is is one side, but then also you know the kind of
wallets that are being built, right.
And there's a rich ecosystem of wallets that includes Valora and
others that you know have enabled in a sense like this
kind of mobile first experience of of Web 3.
But then it extends all the way into the DABS, right?
Where people are have built sort of much simpler interfaces,
things that can actually be more easily accessed.
Through a wallet, right, Or you know, hooks into kind of wallets
that kind of allow you to kind of interact with these
protocols. And I think there's, there's a
whole, yeah, kind of space for innovation that I think is we're
just starting to kind of see happening.
And I'm quite excited about when I think about, you know, even
going into the next cycle where my hope is that a lot of the,
you know, usage and kind of activity is going to come from.
Real world users not speculating on asset prices, but you know
accessing these rails for you know getting access to credit
right or making payments commerce, all these things and
that's in a sense needs to have mobile at the core.
And so we hope that some of the stuff that we've built and we
haven't, we haven't gotten through the whole list.
So we we should come come back to some of these innovations
like Social Connect. That are you know or Fiat
connected are kind of starting to be more widely adopted.
Even you know with interest beyond the cell ecosystem right
now with the L2 move can pave the way for that to happen more
quickly. Yeah, absolutely.
Let's come back to to these usability improvements.
When most people think about blockchain, kind of, it's
difficult to kind of even explain to fairly tech forward
people, right? It's like, OK, download,
download this wallet or OK, this is your seat phrase.
You have to write it down. You can never show it to anyone.
Could also never lose it because otherwise everything is gone.
So how, how, how do you get from there to a place where kind of
you can't just give it like less technology forward, people.
You can give it like actual orders to God, no mis.
I can give I can give another example.
I'm sure you have a punch too, but.
I mean this is kind of a very recent example.
So Opera, very successful browser company, right.
I mean their market share in Africa is like 90% and Opera
Mini is a browser that's built for Android and it's extremely
popular because they also subsidized bandwidth for for
their African users. They built a seller wallet into
into Mini called Mini Pay. And the onboarding is quite
magical. I mean, people, I mean, they're
on Android, right? So people can very easily back
up their seed phrase on their on their Google account.
And you know, we've seen this since the launch of the product
in mid-september. You know, there no one has lost
their seed phrase, right? They've been like thousands.
I don't want to reveal like she had numbers that they're not
ready to reveal, but there's been a very high number of users
restoring their wallet successfully without kind of.
A glitch. And that's a massive success for
Webster, right. That's something that a few
years ago we would have all been just very worried about, right?
That that would just, you know, result in a bunch of, you know,
messages or support calls or people just, you know, being
frustrated and giving up maybe. And I would say that's a problem
that you know, today really. I mean we can sort of say it's
it's, it's solved, right. We have the tools to to really
on board people that you know maybe other than.
Sort of a browser or WhatsApp don't really even use, you know,
much, you know, on on their phone, right.
And so that's that's amazing, right, Because that opens up a
whole new population to participate in this digital
economy, which is I think why a lot of us are here.
Yeah, absolutely. I I had no idea that opera
penetration in Africa is that high.
That's that's crazy. Yeah, it's, it's over 100
million people. It's pretty impressive.
Yeah. And you said earlier that
basically you let people pay gas in any token.
How do you do that? Is it just kind of via relay
network or how? How is it implemented?
Yeah, so it's actually implemented natively in the
platform. So no relay is required, no
paymaster is required. And and the way it works is the
Seller Blocks client basically supports a new envelope style
transaction. Envelope transactions were
introduced with the IP 1559 in this area, and this new type of
transaction basically takes an extra field that is a address
for a token that you'd like to pay for gas with.
And then we we technically don't allow paying for gas with any
token. It's only through a limited set
of allow listed tokens that are governed through on chain
governance. Solo has a kind of a Dow that
has a lot of different functionality in, one of which
is I guess retaining this this allow list and then basically
the the client right before. Executing your transaction will
check that the token is that the gas currency, desired gas
currency is in the allow list and if so it will debit your
balance in that token by doing an EVM call into the token
contract to to deduct how much you're bidding for gas and then
at the end of of your transaction it will do the same
to credit you any any balance that.
Over to you for as a refund, and that's it.
And you know, naturally to help validators order these
transactions relative to each other, we we do currently have
each of these tokens have an Oracle that reports on the price
relative to Sello. It's technically not needed
because validators can choose to order these things however they
want using whatever price that they they they want, but we just
wanted to make their lives easier.
And just have something that they can look at to make it
easier for them to order the mem pool.
And you know, the end result is really easy UX for end users,
for wallets, for gaps. You don't have to have all of
these extra complexity around, you know, real layers or new
types of ways of signing transactions and additional
folks playing a role in the platform.
Everything just works. Natively really, really easily
and and honestly it's been a really big success.
People really like being able to cash in into CUSD and then be
able to you know buy ETH on a decks without having to go to a
centralized exchange, right. If you think about kind of the
the dream of enabling fully decentralized, you know, capital
D DAP experiences then. Allowing people to to cash into
stable coins, ideally to a stable coin that's pegged to
their local currency and then to be able to start transacting
straight away, that's really a nice experience, a nice self
custodial experience that that's possible on sella and with sella
wallets that you know helps and support gaps and and more
decentralization. Yeah, absolutely.
How do you think about confirmation time?
So how long is acceptable kind of for mobile user who actually
uses it for like a real world thing?
Yeah, it's a great question. So we did some testing early on
and we found that 5 seconds is still feel snappy enough and so
Solo has 5 second block times with one block finality.
That gives us more time to achieve consensus.
Which? Is is good for processing large
amounts of transactions per second.
But you know, I think realistically given that there
are chains with lower block times, I think as part of the L2
transition, we're talking about moving that down to something
closer to two seconds. But the end result for users is
going to be pretty similar. I think if you transact on the
seller platform, everything feels, you know, very, very
snappy. So you guys cater heavily to the
to the global S Are there challenges that you wouldn't
have in the global N? For instance, I heard that that
kind of device memory is often a problem.
So that basically for instance, people can't install new apps
because kind of they're out of out of memory and like problems
we don't usually think about because kind of most people in
our bubble have like the latest iPhone or you know, top of the
line Android device. What has experience taught you?
Yeah. Maybe just expanding on the kind
of mini pay mentioned, I mean that was a big factor also I
think. When we started chatting with
them about sort of this product and they told us sort of how
they launched products into the market, right.
I think this kind of it met with a lot of things that we had
heard and learned in, in pilots or projects, right.
We have been a part of as as part of the seller journey and
there were some really nice benefits, right.
So I mentioned that Mini Opera Mini kind of subsidizes user's
bandwidth. Which means that if you have a
wallet that's in the browser, right, you also basically get
subsidized you know for for your wallet use.
So that's that's really cool. They built the actual wallets to
be only kind of 2 megabytes package compared to I think like
meta mask is like 68 megabytes and quite this wallet like a lot
more even than right So and so that's where you're starting to
get into challenges when you have users that are.
Living from you know, sort of 50 megabytes, 100 megabytes at a
time, right, To get through the week and do all the things they
need to do online on that, The cost of sort of updating or even
just installing a new app to try it, it's kind of prohibitive for
for a lot of users. So being really mindful around
that and you know, orienting the experience around that has been.
Yeah, definitely kind of a key factor and again this extends to
to the ecosystem right and thinking through sort of every
touch point, every bit of interaction, right.
Is there stuff that you can sort of streamline and make work
better you know on sort of those constrained environments and and
sort of low end devices. I will say though, you know, I
mean. As someone in the global N some
of these improvements also you know, feel quite nice when
you're, you know, kind of accessing things on the latest
iPhone, right? So I think it's just like some
of it is, you know things don't need to be as convoluted
sometimes as they need to be right.
And sometimes simplicity, even when you are not constrained on
bandwidth can be kind of a nice can be a nice forcing function
for a better experience. So.
Yeah, I think that's, you know, it's nice to have the start with
sort of the kind of, you know, the users that will have most
trouble accessing the experiences that you're building
as an ecosystem. And then I think that has nice
sort of downstream effects in terms of all users, right?
And obviously we have a lot of users in the global S but you
know, there's also a lot of people in Europe and you know
all over sort of the global N kind of using using seller
products. Yeah, I think Luke Rubelski
wrote a book called Mobile First back in the day when web two
companies were were thinking about their mobile first
transitions and journeys. And one of the things he talked
about in that book is about when you build in a mobile first
manner, you've, you know, you focus on bandwidth, you focus on
you know band bundle size, all of these things that Ronnie just
mentioned. But then the end result is
everyone benefits, even people using your desktop applications.
And certainly we've seen that in this early ecosystem as well.
One thing that I think people all over the place will benefit
from is this user identity linking, linking to the to the
phone numbers. What cryptographic methods do
you use to ensure privacy and security in this verification
process? Yeah, it's a great question.
And so we have this this protocol it's, it's called
Social Connect, which under the hood uses another protocol
called Otis, which is a threshold cryptography system.
So we use threshold signatures on BLS 12377 that effectively
allow a quorum of Otis nodes. To respond to any request to
look up a a particular phone number or the address for a
particular phone number and and by doing this no note on its own
can recover the phone number for or the address for a particular
phone number. Without a threshold, I think
it's 50%. Of these nodes responding.
And I think that's really, really nice because you know,
certainly it offers privacy guarantees.
It allows these nodes in a distributed way.
It's not quite decentralized because it's a permission set of
other signers, but it's a big set.
There's I think 10s of these nodes and they're all doing
their own. Kind of attack detection to make
it hard for anyone attacker to try to identify all of these
phone numbers. OK.
So basically in essence it's distributed set with a
threshold, but where basically I can ask them for the private key
that is somehow connected with your phone number.
Basically they they they give me that, but basically I can't go
the other way around. Is that is that correct or how
do I think about it? That's close.
I think with the one changes they give you the not the
private key, but they give you a salt that you can use to derive
the wallet address. And so the wallet addresses are
stored on chain, but are hashed with a unique salt per phone
number. And that's salt is what this
Otis server Otis servers. Are are giving you for any UN
phone number and and you need to to request it from a threshold
of these servers. OK, and if I want to update my
address, I can. I can do that by contacting them
too, right? Yes, you don't even need to
contact them. You just update on in the
mapping because you you know your own salt and so you're able
to. To to update the mapping
yourself and can you do that counterfactually?
So so someone who's not been registered with their phone
number, can I send them, is it deterministic?
Can I send them a kind of funds and the threshold set can kind
of know which which address the the, the what it's going to be
deployed to kind of like create to?
Yeah, it's a good question. So the salt is deterministic per
deployment of Otis. We're on our second deployment
now. And so that was the EKG that was
done. So that's deterministic.
But the and that's deterministic regardless of what portion of
these nodes respond. What 50% portion of these
servers respond, but. The second piece is registering
your wallet address on chain and that part is non deterministic.
You can register any wallet address.
If I send it to someone who's not yet kind of signed up, it
just goes into Nirvana. So right, the solution for that
flow is we have an escrow smart contract and so wallets can
detect that the user hasn't yet signed up at that phone number.
And so they send the money instead to an escrow smart
contract. And then the escrow smart
contract will only release the funds to someone who signs up
with that phone number, and then while it's can automatically
fetch the funds as part of onboarding.
And so I think you're asking about what's the experience like
for new for someone who's sending money to someone who
isn't yet. Doesn't yet have a wallet and
and the answer is that the experience is exactly like you
would hope it to be. Which is that you know the user
can send them money anyway and then gets prompted to to invite
the the recipient you know to the platform, usually using like
a WhatsApp or text message. And then those users can then
sign up and and have the the funds claim the funds
automatically. You said earlier that that Sello
announced over the summer that kind of it would or there was
vote over the summer that kind of it would become an L2 on
Ethereum rather than remaining its own L1.
So specifically kind of if I require correctly, you're going
the Villidium route on the OP stack with like data
availability with Eigen DA. How did you arrive at this
decision? I mean first of all kind of like
the general move kind of like of coming home to Ethereum rather
than remaining your own L1 because obviously it also comes
with drawbacks, right? I mean you you you do inherit a
security from Ethereum to a second certain extent, but you
also pay for it. I mean you avoid most of that
that cost by by by not doing data availability on Ethereum
natively, but it still comes with considerable cost which
kind of when you when you look at serving the global S with the
kind of like low value transactions and so on, it it
must have been a difficult decision, no?
Merrick, let me jump in first, then you can go into a bit more
of the detail. But and I think you had
mentioned this in the earlier part of the conversation, right?
That's. When we first started settle, we
actually build on Ethereum, right.
And in in many ways this has been a constant.
I think we've been obviously closely following everything
that was happening in the Ethereum world and the sort of
idea had come up before, but this was the first time where
you know also to what you pointed out, right there was a
potential design where the end user experience particularly
around fees. Site would be workable in terms
of not sort of creating kind of obstacles that would be too high
to you know for the current sort of use cases on Sello, but also
for the stuff that we want to continue to see on Sello.
So when that became clear, I think there was very quickly
kind of excitement building within the community and before
we kind of went what public was it in the sort of broader
community? Yeah, I think we we kind of.
It's sort of our initial research on it and we can go
into the details. But I will just say and you know
a lot of this work is driven out of Sea Labs and so Merrick can
can can comment more in the sort of play by play.
But it's been just phenomenal to also see how for us it's kind
of, it feels like a coming home moment, but also we've been
receiving such a lot of support from the Broadway theme
community and a lot of people that.
I think had followed our work over the years, but now I think
felt sort of maybe also more more urgency or just seeing that
there may be kind of more opportunities to kind of partner
and collaborate, which has been really amazing to see.
But, but yeah, Mary, I'll hand it to you for some of the
technical choices in that initial design and maybe kind of
where where some of that is, is now.
Yeah. And you know I think this has
definitely been kind of a journey for the whole ecosystem
and and community. I think as Randy mentioned you
know we we started off building Ethereum and ultimately to
accomplish what we wanted to to accomplish, we we felt that we
had to work with the community to create an A new chain, an EVM
compatible chain because we believed in Ethereum and we
believed in the EVM but nonetheless to a new chain and.
You know, over the years obviously the roll up base
scalability road map kind of continued to get refined, more
roll ups launched. It became very, very clear that
that if the theorem was succeeding with this strategy.
And so given our excitement for for Ethereum, you know, I think
the community's actually been long talking about ways, you
know, going for as far back as 1.51 and a half years ago.
You know, talking about what could seller look like as as a
potential L2. And so coming back to this year,
you know, Sealabs, I think with the announcement of Eigen DA,
realize that oh, actually there's a, there's a way for us
to become an L2 while keeping gas fees cheap while also doing
it in a very Ethereum aligned way with Eigen DA, you know,
effectively being run by Ethereum validators, you know,
we felt that. We could create an L2 design
that preserves all of the features of Sello, all of the
benefits of Sello while still plugging into the Ethereum
scalability road map and being part of, you know, Ethereum's
scalability plans. And so I think that that was
this aha moment for us and and ultimately why, you know, Sealab
has put forward this proposal, we wanted the proposal to be.
Very concrete. And so we actually did the
legwork to come up with an architecture that as you said
you know leveraged OP stack, leveraged Eigen DA.
We also thought long and hard a lot about one block finality
which is a feature that sell offers and we wanted to preserve
not and one that's not trivial for L twos to offer.
And so we spent a bunch of time on that.
We we put forward a very detailed architecture proposal
that the community voted on. I will say that, you know, since
then we've got a lot of inbound from a lot of L2 stacks that
have been pitching the community on, you know, other Lt.
technologies. And so even though even though C
Labs has been building an OP stack since July since that
proposal passed, there continues to be conversations at the
community level about, you know, maybe there's others CKEBM
stacks that. Might be a good fit for for
Sello. And so that's been exciting to
see. It's just been, you know, really
great to see not just the whole Sello ecosystem get really
excited about this, but you know, the broader Ethereum
ecosystem. That reception has been just
absolutely amazing. So it's been really, really
great. How does single single block
finality kind of mesh with fraud proofs and kind of maybe it's a
false dichotomy but in my head either you can kind of you get
shared security from Ethereum and then kind of you need to to
let people to to leave them a pass to actually access Ethereum
security layer by kind of escalating the conflict on on
the L2 or you get single slot finality.
How do you toe that toe that line?
Yeah, It's a great question and I think.
The the answer relies on this kind of fundamental observation
that for finality the the fraud proof window is actually not
important and and neither is you know, CK proofs necessarily.
Ultimately, finality for most L twos is accomplished by posting
transactions to the L1, and as soon as they're on the L1
they're deemed and a final. Write any full node following
the chain, deriving blocks on the chain will will will deem
those blocks as final. The fraud proof window is
actually irrelevant. That's mostly for the bridge
itself. For the native bridge, yeah, but
not so much for finality. And so there's two sources of
potential reorgs that can happen in L21 is from the L2 itself, so
if you have a sequencer, that. Tells you that the next block
will look like this, but then submits a different block to the
L1. Then L2 clients will have to
reorg when they, you know, first we'll get the the first block,
and we'll assume that that's kind of an unsafe but likely
block to to get promoted to a finalized block.
But then when they see what actually got posted to Ethereum,
they're going to have to reorg and.
And roll back and so that's one source of non determine of
reorgs and then the other source of reorgs is just the L1 itself,
right? If theorem reorgs then the L2
naturally has to reorg. And so to address this we came
up with a design that one has a decentralized sequencer and two
relies on slashing for equivocation by that
decentralized sequencer. So if the.
In order for a transaction batch to be to be kind of sequenced,
you need 2/3 of these sequencers to sign off on it.
And if they ever sign off on another transaction batch and
post that to Ethereum, then that's easy to prove and a
slashable condition. And by having a more than one
sequencer, you can actually. Have more stake that is at stake
when when these folks misbehave. And so that allows you to
effectively have what we call cancello security to offer a
finality guarantee that can exist in a shorter window than
whatever period by which you know batches are are submitting
transactions to the L1. And then secondly you know for
the L1 reorg, the solution there is to effectively wait for
transactions to be finalized on the L1 before they are imported
into the L2. So that means that any forced
transactions, any deposit transaction that happens on the
L1, we have to wait 12 minutes effectively before those
transactions appear on the L2. And in that way even if the L1
reorgs, those transactions you know won't have appeared yet on
the L2 and so the L2 doesn't have to reorg.
So those are the two changes. And I was talking about this in
the context of A roll up posting transactions to to the L1, but
everything is very similar even in the case of the L2 using an
LTA like I can DA. I think that that makes a lot of
sense. Do you use the the validator set
that you had kind of as an L1 and kind of for the
decentralized sequencer or how do you construct it because kind
of that's been a really hard problem for all L twos kind of
sequencer decentralization and by in a way you already had like
I mean if if you think about it in those terms kind of the the
the sequencer in in. Is is kind of your validator set
right? So basically the sequences that
entity that's allowed to kind of actually build the blocks.
And you already had 110 distinct entities.
So how do you enmesh these two things?
Yeah, it's a really great question and the answer is 100%.
We will transition the validator set to the decentralized
sequencer set. There's a lot of benefits in in
doing that and it just ends up being a much more elegant
migration for for the ecosystem and things like slashing for
equivocation. We actually get for free if we
do that because we already have slashing for equivocation on
Sello. And so all of the finality
guarantees that we offer today, basically the L2 inherits and
then adds to that Ethereum security and finality just with
a longer time period. So if you're doing a small
transaction, then maybe you're happy to wait for and sell those
sequencers to agree on a transaction batch.
But if you're doing a big transaction, maybe you wait a
little bit longer until that transaction, the existence of
that transaction gets logged on Ethereum.
How often do you settle to Ethereum?
Because, I mean, so basically if you look at the costs of L2's.
I mean it it, it depends how often you'd kind of check into
Etherium, but typically like 95% of the transaction costs kind of
go to date availability and then like 5% go to like checking in.
Obviously you can kind of lower that by kind of checking in less
frequently, but then kind of you have security later.
So how do you navigate that and did you decide kind of on a
ceiling price, say for 100,000 gas or something that kind of
you think would be acceptable to your average user?
Yeah, it's a really great question.
So we haven't decided on on the period or or the price right
now. I think we're still doing that
work. And one nuance I guess for us is
that we're storing the transactions in Eigen DA and
then Eigen DA reference kind of pointer back to us and we have
to store that on Ethereum and that is much smaller than
obviously the set of all transactions.
And so the gas costs of of storing that is is much, much,
much less. And so that's how we can keep
our low gas fees is basically by replacing that 95% cost that you
just referenced with a much smaller cost that is is likely
going to cost you know something like 5%.
So we might double the transaction fee on Cello, but we
want you know 20 exit as part of this transition.
The exact period by which we'll be posting that I think also
depends a little bit on Eigen DA.
Eigen DA just went to test net two weeks ago.
And so we're still waiting to see what the production specs
will look like, which will definitely impact kind of the
design choice here. So the danger with being an L2
on Ethereum is obviously that kind of your transaction fees
are directly coupled to Ethereum transaction fees, right, because
you kind of have to, you have to pay Prorator the kind of check
in costs of Sello on Ethereum. And currently gas fees are
pretty low, but we've seen them spike in the past.
And if you if you kind of expect Ethereum to kind of eventually
become the global settlement layer and if you look at kind of
the the, the scaling road map of Ethereum.
There's not actually. I mean, beyond Deng sharding,
which doesn't help you all that much because you're already
using Eigen DA anyways. There's not all that much to
seriously speed up scalability on Ethereum in the next couple
of years. How, how do you think about that
kind of in terms of the applications that kind of rely
on fairly low fees? Yeah, I I think this design
caters to them. So I think by only having to
sort of the the Eigen DA ref you can, you can dramatically
dramatically lower the fees and certainly you can also change
the period by which you're storing this.
So that might also potentially give some wiggle room for for
the chain. But yeah, I think given this
design I'm not not too concerned even as if you're in prices go
back and and go beyond where they were in in the last bull
market I. Think it goes, it goes back to
the earlier question as well, right.
I think you know you can offer seller security, right, for
something like for a lot of transactions, right, that kind
of are below a certain threshold, but that have
Ethereum security for sort of the more valuable transactions,
right. And sort of, you know, I think
in many ways this is a concept that we're.
Pretty familiar with even kind of pre web street, right, in
terms of like you know the stuff that's in my physical wallet,
right, kind of the security of that versus you know what's in
my bank account and and so on. So I think it's kind of you know
and I I think this is just a very simplified view of this,
but I imagine as some of the L2 infrastructure kind of hardens,
right and the improvements that you know all the teams that are
focused on this are making even. You know, since July, since we
kind of well openly started kind of that exploration has been
pretty encouraging that there's a path towards continuing to
lower that cost. But even if you completely
discount kind of like all of the data availability costs that you
incur kind of just by settling on Ethereum periodically, you
kind of you have to pay that fee kind of as an L2 and you kind of
have to kind of put this on the. Single transactions that kind of
happened on Sello, which does actually put a a flaw on how
little a transaction can cost, right?
And kind of if if costs on Ethereum go up, kind of the
costs on Sello have to go up by the same amount just by virtue
of kind of ultimately settling on Ethereum.
So I think so you're right, there is a floor, but
interestingly this floor is not tied to the number of
transactions in the L2, right? It is for roll ups, right,
because you have to store transactions on chain.
But if you're using Eigen DA for data availability, then the
number of transactions that you put in any given block can be
arbitrary. The size of this Eigen DA
reference is fixed. Likewise, when you update the
state route for the L2 bridge, the amount of transactions that
executed between state route updates can be arbitrary.
So, so if it came to that you you would just kind of prolong
the period you'd wait until kind of updating the state route on
Ethereum. Yeah, I would be surprised if we
would have to do that because I think even at high gas fees the
just based on the amount of economic activity happening on
solar today like I I don't think that that would be necessarily
required. But yeah, absolutely.
I think that I think more than that I think we would look to
scale Cello so that it, it keeps up with Ethereum gas prices I
think is the answer. In principle, it also seems like
a good route for kind of other chains to kind of decentralize
their sequences, right? Because kind of, yeah, it is a
major problem, but maybe let's just move on.
So we already talked about Mini Pay, the application of Opera
Mini. That kind of gives users
natively a wallet without them kind of having to think of it as
a wallet. You also recently had something
launched on Sello called Credit Collective, which I found very
enticing. Can you talk about that?
Yeah, I mean one one of the use cases I've personally been and I
think many of the ecosystems since the very early days is
giving people access to credit. And so this actually was.
Really an entirely LED kind of community LED effort where a
bunch of people that were working on credit protocols got
together and started meeting and organizing.
And you know some of the activity was centered on Sello,
but it wasn't like you know, that wasn't sort of like or you
know, you can't, you know, can't be here if you're not on Sello.
So actually a lot of the early members were kind of building in
different ecosystems and. One thing that was kind of
interesting was was Credit Collective.
It started really just as a bunch of people that shared that
kind of interest in bringing these solutions to market,
meeting up and exchanging ideas without sort of it starting.
You know, like usually a lot of these things start with like,
you know, funding or some other thing right here it was really
just, it was kind of like, you know, a group of people getting
together and exchanging ideas and then at some point Credit
Collective sort of formalized that and.
Actually applied to the the sell on chain funds for for funding
for effectively funding to help bootstrap adoption of these
protocols. So they requested I think it was
a total of 2,000,000 seller EUR kind of sell back to stable coin
or kind of linked stable coin, pecked stable coin to be used as
kind of seed seed capital on these protocols to extend.
In many cases what is you know direct to consumer or kind of
you know small enterprises in the global S you know kind of
credit and and just to be clear these are you know for the most
part under codalized or non codalized loans.
So not sort of the the ones you would get on Avi or or compound
and and really sort of extending I think the utility of of Web
Street right to kind of the real world which is which is
something that's really exciting.
Yeah, I don't know if you had specific questions about it.
We should also you know I have to connect you to some of the
people working on that but I've I've been pretty excited by
seeing something like that kind of take form and you know sort
of that self organizing and you know creating sort of funding
umbrella. To it, you know was was really
cool to to see to see that happening.
Yeah and it's been cool to see some of these projects take off
right. So Impact market which is a Ubi
project on Sello recently launched a micro lending
campaign. I think they have hundreds of
thousands of of dollars now that they've been lending out in the
form of micro loans. You can think of this as being
an analogous to Kiva in the web two world.
I think Kiba has had a lot of success in in having this kind
of donate to lend kind of strategy and and I think it's
it's had a lot of impact globally and and impact market
is now replicating that but by using crypto rails allowing them
to operate at you know a fraction of of the overhead of
of something like Kiba. And so yeah it's been it's been
really great to see I think this these are the types of use cases
that we have long talked about in web three and that have
gotten a lot of people you know myself included excited about
web 3 early on and it's just you know so nice to see them you
know finally working on a large scale.
Yeah, it's been great. Are these sort of local
initiatives? So kind of is this kind of like
say for instance, I don't know where.
Where impact markets or kind of the the the key equivalent are
based, but are these kind of by locals for locals or is this
kind of by well-intentioned global northerners for the
global South? It's a mix.
So they're definitely projects that are originating in, you
know, Nairobi, Manila and you know, sort of right where the
activity is. But it's but it's also yeah it's
people coming out of the Kibas right and wanting to bring that
experience to solutions that I think have the potential to
scale you know a lot better and and leverage sort of the the
infrastructure that webs we can provide.
So it's it's actually interesting because I think that
cross pollination is also something that's I think
benefits both right. It brings more.
Of that local expertise to you know maybe the teams that are
coming at this not with that first hand experience.
And also you know the other way kind of helps the teams that are
kind of local, right, kind of exchange IDs with you know in
terms of like yeah product development, other things that
are maybe you know harder to kind of find peers in sort of
local markets especially around some of these very specific use
cases. So yeah, that's that's been
that's been fun to see. How do you Foster and engage
with your local communities? I imagine that, I mean you are
both, you know, global northern Earth, so kind of how how do you
build communities in those places?
Look, a lot of it happens at events, community events, sort
of, you know, nothing is replacing some person.
I think in many ways American. I joke about this, But the
pandemic I think has probably, you know.
Put us, you know back, you know, kind of definitely quite a bit,
right. Because in in those years it was
impossible kind of to travel right and and and spend time
with with commutes on the ground.
But I mean, personally, I try to spend time, you know, going
going to meet with kind of local entrepreneurs and like even kind
of see how the products that they're building being used and
just try to stay as close to that as possible.
Because I think it does help, you know, when you talk to
enough entrepreneurs and they tell you kind of their honest
opinion of what needs to improve for them to be successful,
right. That kind of gets you the
clarity on sort of the more infrastructure level, right?
What are some of the things that are not, you know, that that
maybe you can help sort of move, move on, right.
And so that's kind of how things like Social Connect or Fiat
Connect, which is you know protocol for helping people on
and off ramp more easily in in these different markets.
Have come about and and that's I think something that you're only
I think do get a sense for if you do spend a lot of times with
the the builders in in local markets.
And I assume you kind of you have community people that are
employed by the foundation or one of your companies kind of
like in in in those local communities, right?
We do, yeah. I mean a lot of the team members
also that are working you know at Sea Labs or Valora or
Foundation or Mentor, you know some of the kind of early
ecosystem projects are also based you know kind of all over
the world. So there's there's also a lot of
that kind of expertise. But I'll personally say I, you
know I try to spend as much time as possible with with with
founders and ecosystem and you know I think that's been, that's
been really I think for me the best way to stay up to date on
what's happening. You just mentioned Mento and
reminded me that last week you guys announced that there's
going to be a mental Dao spin out.
Tell us about that. Let's.
Get into it. Yes, I mean for people that have
followed Salo for you know since the early days, they may
remember that through on chain governance a series of stable
coins were were launched still a dollar so euro so real.
And you know that's become definitely one of the
differentiating factors for the ecosystem.
And I think we've been very fortunate that there that
there's been a team that's basically said hey, you know we
want to go and and grow this much more quickly than you know.
I think it's otherwise would be possible as just kind of a
public good under the sort of general ecosystem umbrella and
basically. Created a proposal or a kind of
a process for for taking this protocol and really making it
stand alone. And yeah, very kind of recently
just I think it was Scout last week or so the team has put
forward a proposal to kind of start talking about how they
envision governance to transition from from Sello to
kind of a sort of a mental token to to to do that.
So pretty exciting to see. You know in a sense of taking
some of these things that you know initially maybe we're kind
of smaller features that may tell or unique that are becoming
protocols in their own right. And I think you know because of
that are able to have a much more ambitious you know kind of
agenda and potentially impact on the broader ecosystem as a
result. So that's that's been that's
been really exciting to see. Yeah, especially just thinking
about this in the form of just Dow governance, right.
I think having a a potential Dow spin out, I think it's just an
exciting, exciting thing to be happening.
And so, yeah, I'm just eagerly awaiting next steps on on that.
It's pretty cool. Yeah, super quick.
So you guys have been around with Sello for say, 6 or so
years. Where where do you hope to be in
six years from now? Wow.
Probably still working on Sello. I, I, I really I I do feel
there's was every sort of you know inflection point in terms
of the technology or you know quality ecosystem scoring.
I think there's, you know you kind of you it's like you're
climbing a mountain and then you kind of you get to the point and
you're like oh man, there's all these kind of new pathways to
explore and like different ways to grow and and so I I really, I
mean our. I think we talked about this in
the past, right. Sort of the cello as a as a name
comes from Esperanto means purpose.
And you know we early on, one of the first things we did even
before writing a line of code was to sit down and write down
you know kind of mission for what we wanted to build and a
set of values. And I think that is really
created a lot of space for within that what Sello can be,
right. And of course now it's no longer
just the two of us and separate our Co founder and some of the
early team but it's it's a whole community, right.
And so a lot of the stuff we kind of get for free on
whatsoever people are sending as much as hey I built this on
Sello and it's like wow. Yeah.
This is like so cool. I don't think we would have ever
gotten to this right. So that's nice to see.
But I think there's still a lot of white space, right, in terms
of if we if we take sort of prosperity for all that sort of
the guiding mantra, you know that that kind of mean a lot
more things than the things we're able to execute on today,
right. And I think that's that's really
exciting because I think the metric that is probably at least
talked about in these things is sort of the the brain trust you
can build around the project and an and sort of the ecosystem,
right. And I I think about like some
whatever, you know, recently we were kind of going deep down the
rabbit hole on on this side. And I just, you know, happened
to be in our community space here in Berlin.
And I was like there was a founder and I was like, hey,
have you talked, have you looked at this and you know, like, Oh
yeah, you know, here's some ideas and immediately pointed me
to some kind of other things. And it's kind of like it's
incredible to see how much more quickly one can move as an
ecosystem on some of these pretty hard, difficult kind of
concepts and ideas, right. And some of these things may
take years to get to full fruition, right.
But it's possible when you have kind of a mission aligned group
of people that are all sort of in a way like oriented around
the same kind of shared set of goals.
And so, yeah, six years from now probably you know like yeah
working on things that's hopefully expand sort of what
what Sello can can mean in terms of bringing more prosperity to
more people. But probably also some very, you
know like stupid things that we thought would be solved by that.
You know I mean I back six years and we're like OK on off ramping
seems. Pretty easy.
Ultralight Lines seems pretty hard, right.
And I guess what we're still we're still tackling on off
ramping, right. So I think that's sometimes also
hard to predict, but I think a lot of you know whatever it is,
it will be under sort of that kind of general umbrella of the
the Mission North Star. Maybe just to offer my take.
People are are frequently surprised to hear that Tron is
is the number one chain by daily active users and and they do
that primarily because there's a lot of payments happening with
Heather on Tron globally. And so my sincere hope for this
whole ecosystem and for the Ethereum ecosystem is that, you
know, we can reclaim that, the Ethereum ecosystem can reclaim
that top spot and you know that seller can be the L2.
That where you know that that type of payment activity is
happening. We're already seeing a lot of
that happening on Solo. I think we're frequently a top
ten chain by daily active users. But let's work together as an
Ethereum ecosystem and and take the the top spot.
And we don't need to wait five years for that.
We can do it sooner. That's a lovely closing remark.
Where can people go and find out more about Cello, how to build
on you how to kind of use products that I build on Cello
or kind of just get involved with the community.
I mean definitely celloorg.org. So our website for the
ecosystem, Twitter as well, I think it's sort of form where
the, you know we try to kind of capture things that are
happening in the ecosystem. There's regular community you
know kind of meetings some of them kind of organized by the
community usually at most of the major conferences there's you
know I TM conferences, there's going to be some event or meet
up as well. I would my recommendation would
be if you're someone who's interested in Sello or getting
involved in the ecosystem just yeah find out where the next
event is and show up or or ping someone you know in the
community of founder even. I think there's so many touch
points and I think I'm you know happy to vouch for you know
really you know the ecosystem founders that they're all a
friendly bunch and you know will be very happy to chat and and
and sort of give their perspective and and and help and
support new people coming into the space.
And yeah, I think those are probably the sort of more
general things. I do probably also want to plug
Unplugged which Merrick you you started with Kobe a while back
just to share updates on the progress around the L2 work and
you know where you're sort of bringing folks on to to give
sort of more detailed kind of tech deep dives on on some of
the you know the kind of the different areas kind of across
that that stack that is being considered.
And I think I mean I I even like every time I listen in one of
those I I learn, I learn something.
So highly recommend that even you know if you're not just
interested in seller, but just generally following L2 sort of
developments in the broader ecosystem.
Super cool. Thank you both for coming on
towards. Super interesting.
Thank you. Thank.
You. Yeah.
Thanks for having us. This was amazing.
I love the questions. Thank you for joining us on this
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