I believe you're muted, Sam, if you're trying to talk
Oh, looks like he's having some connection issues. Oh, yeah seems like that they are having some technical issues and
Yeah, I just invited Sam. Oh, he just left
All right. Um, well, but yeah, how's your Friday going through?
There's a lot of stuff going on behind the scenes with
EIP 4844 on the off-chain lab side. So
Oh, Sam, you're back. How's it going? Good. Good. Sorry the audio cut out. Um, so are you drawing? No, it's all right. Yeah
No, we really appreciate. Um, you guys setting this up and we're excited to chat about hourglass and what we've been doing with arbitrary
Cool cool. Yeah, um, not sure if you heard me
But yeah, um, yeah, I wanted to ask like do you want to give yourself an introduction?
About like how do you guys hey, sorry, I cannot hear churro
But if you can hear it and the and there be not here, can you let me know please?
Oh, can you hear me? Can you hear churro?
All right, wait, hold on, um, let me come back let me rejoin
Okay, good maybe I I think churro is having some technical issues
But yeah, very excited to have this AMA with you. Sam. Thank you so much for for joining us. I'm sorry
Here's my my dog with me. Sorry for the nicest
But yeah, very very very good to see what you're building and getting to know more about
And yeah, seems like churro is back
Yeah, wait, can you guys hear me? Yeah. Yes. Okay cool
Awesome, um sam. Do you want to kick us off with some introductions about like what is hourglass?
It's an order book based. So
From a product level. Let's say cross chain stable swaps protocol
Under the hood. It's a order book based, uh decks
We're using layer zero to synchronize, uh order books between chains to allow you to
trade stable coins between
chains or on chain with minimal slippage
Nice and I know you guys are in beta mode
Right now. I mean, how's that going so far for you guys?
Generally, everything's kind of everything's running. Um
We haven't been we expected to have more technical issues with the launch than we had
Uh, so everything everything's running very smoothly. Um
We've been slowly raising the limits in terms of trade size so people can place ten thousand dollar trades now. Um
And it's been exciting to see how enthusiastic people are about the protocol
Yeah, um, yeah, and like have you guys received any feedback from the community?
Positive or maybe some like other additional feedback that community members have given you guys
Um, is there any feedback that like stands out to you guys?
There's I mean there's there's definitely been some gooey things that we're improving just based on people's feedback. Generally people are tired of paying
Um, people are tired of paying. Um
Like percentage points to move stables green chains. This is very easy
And it shouldn't be something that costs as much as it does or takes as long as or takes as long as it does
The burgiscope and the bigger picture, right?
Um, what what makes hourglass unique?
Other projects that are that might be focused on
Yeah, um, what makes us unique in that category like versus things like curve, um is
That we're that we're using an order book instead of um, rather than pools, um
And this makes it much much more capital efficient when you compare it to bridges going away from pools
the reason so much money has been lost in bridge x is because bridges, um
To date have mostly used pools. This is also why people are very enthusiastic about intents
Um when you're using a pool from an architecture standpoint
If anything breaks all the money in the pool can be wiped out
30 about 30 percent of all the money lost in cryptos today tax
Has been lost um because of bridge hacks and we believe this is mostly because of the pool based architecture
Right, yeah and like in terms of like security wise
Um, what are you guys are doing to ensure?
The funds of users are secured
Um, because like you mentioned right there's there's been a lot of incidents
Um where these cross chain bridges have
Been hacked and exploited so in terms of security
What are you guys are doing to ensure that user funds are safe?
Yeah, um, so we said we've done all the
So this is like there's a two-part answer for this right one is basically what steps you've taken operationally
Um to ensure that user funds are safe
The other is more the architecture level like what we've done to design it to minimize risk
We worked with zealic on the audit
uh, they were heavily recommended by layer zero mostly because of um
They've built a lot of in-house infrastructure for
Doing fuzz testing against layers like against the layer zero contracts
Um testing generally for smart contracts requires that you often basically have to build a lot of infrastructure
Which we can get into in a second if it's interesting because you have to basically
Build mock versions of everything you plan on using in production
Um, we're also running that immunify bounty program
Um, just because we want uh to involve we want to get as many eyes
On as far contracts as possible
Uh, because we're not using pools
There's just like less there's less money at risk
It's kind of like barns and nobles versus amazon where the only money at risk in our system is the money that's at transit
in terms of like cross chain messaging
Um have been focused on not only just security but also speed
So I wonder like what are your thoughts on that?
People love speed like especially for users like they want to transfer things across different chains like super quick
I think this year I mean like
Last year and i'm sure for this year a big focus is also ensuring that um, there's
Security as well. So, um, I wanted to get your thoughts on that like do you do you think?
More in terms of cross chain messaging. Do you guys think there should be more focused on like speed should people just care about speed or
is there other considerations to
Um for projects that you know are focused in that area
Um, should they also focus on like security as well?
That's that's a great question. Um
There's gonna there will always be risk if you are trying to settle transactions
So there's always a risk of rewards with chains
Where it takes some time. It takes some amount of blocks before you it's it's probabilistic. Um, let me take a step back
Settlement in crypto is somewhat probabilistic
Because there's a risk of reorg
so that there is some amount of time before you can be confident that the version of the chain that you're
Um is the one that will keep moving forward?
Um, so getting there's there will always be a degree of risk with very fast. Um settlement
For cross chain transactions
We are likely not going to be the core at the core level our protocol is not going to be the fastest
Uh, just because we we don't believe um at the protocol level
That the risk justifies the rewards
We will we will be settling about every five minutes or so which we think is a reasonable time frame for the most
Secure most cost effective solution
We there will likely be stuff built on top of us that will allow you to get assets sooner
uh, but that will also just cost more because whoever's providing those assets is
Right, yeah, no it makes sense and it's such an interesting topic, um, especially like hearing
What other teams have to say about that in terms of like what should be the focus of cross chain messaging?
Um, so yeah, it's an interesting thought right there
Um, and i'm sure for the community i'm i'm sure they're curious to learn more
Uh, what made you guys choose arbitrum?
Yeah, um where arbitrums been at the forefront of just basically driving
Um innovation, uh in terms of speed and security
Uh for like just evian like for an evm space
Um, and that's something that like we've been falling for some time and are very enthusiastic to be a part of
Eat today like uh eat today does not work. Well for defi mostly just because of like block time
Right, yeah, yeah, there was a there was a graph that I saw
that someone posted on twitter, um, and I actually didn't realize this but
Um in terms of like blocks, I think
Our arbitrum has a very efficient
Um, i'm probably saying this wrong, but like block space if i'm correct
Um, but yeah, it's interesting. I didn't I didn't know that but yeah, I found that really cool compared to other
No, it's one of the things that makes uh arbitrum so effective, um, and
Hopefully, I mean, hopefully eath gets better over time, but in the meantime like um in the meantime
Solutions like arbitrum are going to keep taking market share
from eath just because um
Because of because basically eath isn't making the moves that are necessary to allow for um
To allow for mass adoption
Right, yeah, and I think one thing i'm really excited to see for arbitrum
Open up a new data market for transactions to
Go into like in terms of posting data, right? Because right now
ethereum's call data market
Data market called blob data
So it's going to be really cool to see
option in terms of posting data for l2s
um, so um, yeah super excited about like blob transactions
And how that's going to help the arbitrum ecosystem
So yeah, eip 4844 like really excited for that
And I think that should I feel like the upgrade should take place
in march because I think now
Um, yeah, it should be interesting interesting like this month and especially march
We've been following that from a distance. Um, and we're excited to play around with it
We I think I think you're I think that timeline is that you shared is correct
What do you think the what do you think the impact of that will be?
Arbitrum itself. I mean it's hard to estimate in in terms of
The gas cost savings, right? Because I mean blobs is is going to help with that but I know like other
Optimism right other l2s like optimism
and a few others have been
Numbers in terms of how much it's going to help reduce like gas costs, but I think in reality
um, I think that's going to be something really interesting to see
Eip 444 is upgraded to arbitrum, you know, if the arbitrum doubt proves because
um, the arbitrum doubt governs both
Also, arbitrum nova, which is the gaming chain for arbitrum that uses antitrust technology. So
I don't have any like thoughts in terms of like how much gas it could save for arbitrum. It's hard to estimate
Because we don't have the correct. We don't have the right data yet
So I feel like once that is once the upgrade takes place like after a few months then we'll be able to
see like the effectiveness of
Um in terms of like gas savings, but yeah, I don't really have any I can't really say much on that
Makes sense. Yeah, we've been we've been
Looking at it from a distance. It's what we haven't we haven't actually put a ton of time into reading all the docs around it yet
Or like looking at what integration wouldn't do
Yeah, yeah, no for sure. Um, and yeah, it's pretty cool too because
Um off-chain labs, right the the ones that build arbitrum the technology
The prism team is under off-chain labs and they're contributing a lot to
Eip 444 so um, it's cool, you know seeing that just like being a part of that
Um, it shows that you know off-chain labs not only contributing to layer two
Um, but also contributing to the growth of the layer one ecosystem on ethereum. So
Um, yeah, it's cool to you know
See see how how often labs is contributing to both aspects of ethereum scaling
So you have layer one and layer two
So yeah, it's exciting to be a part of that
Makes sense. So something I was meaning to ask, um
What is arbitrum during the stablecoin space and in many ways stablecoins have been the killer like the killer dap so far in crypto
Um, like the most the most heavily traded crypto in africa is like teder on tron. I was curious basically, uh around
What arbitrums like perspective is on stablecoins and um
How like what if anything they were doing in that space
Yeah, I mean that's a great question
Um, I mean one thing I could say is that
In terms of stablecoins like we have I know that we have native usdc on arbitrum
So I think that's a huge milestone itself in terms of like the stablecoin development of within the arbitrum ecosystem
But also you've seen like a tick of increase of inflows of native usdc on arbitrum
Um compared to the other l2s. Um, so
Milestones and achievements, I think that's pretty huge to see right? There's there's a lot of interest in stablecoins
Um within the arbitrum ecosystem, so that that's one thing I could mention
Um, but in terms of like other stuff, uh, yeah
Those those are the things i've noticed on my end
Yeah, I can I can also add that there is a new grant program
That is it was just announced like last week
for to increase increase native usdc across the arbitrum ecosystem and
Incentives for the community like i'm going to share more information here
But the grantees for example are ave uniswap er dnt capital and camelot
And yeah, we in in this post you're going to see
Some suggestions or on how the arbitrum foundation is suggesting these
Uh pro calls to use these incentives, but but yeah at the end we are we are waiting for
Um more information from them
But yeah, you can find out everything here
Makes sense. I believe you I believe arbitrum also supports native dies. Is that is that correct?
That's a good question, um to be honest with you, I don't
I'm not exactly. I'm not exactly sure
I wouldn't I can check out later
I'm also not 100 sure right like it might be wrapped
But and that's like super neat to us because generally uh dye is actually only on a handful
Dies well dye was one of the I mean it's the most centralized one out there today
Um, and it's only on a handful of chains actually which has been interesting
Oh, yeah for sure. Um, yeah, i'm checking
I'm taking orbeez scan right now. Um
Well, there's 75 million of it it's a question of if it's native or not, right like there's 75 million of it on our
On arbor scan it's a question that's actually issued natively or if it's wrapped or something
Yeah, that's a great question, um, not 100 I'm not 100 sure but definitely could investigate later
Um, yeah, that's an interesting question. But yeah in terms of uh
Like stablecoin developments on arbitrum
There's been a lot in terms like of what aunty Anna mentioned. There's a usdc grant program that began
I mean, there's tons of developments on that front
Yeah, super. Yeah, I think it's gonna be exciting to see that this year
Um, but yeah, no, I wanted to I guess like on the topic of stable coins
Um, what are your thoughts in terms of like the future outlook for it?
Um, I guess next two to five years from now
That's a great question. Um
I mean, we don't think there's going to be consolidation, right?
Like we think that different people want different stable coins for different things and they all have like given risk profiles. So
Obviously usdc is issued by circle. Um
And it's done domestically and they have treasury bills behind every
Uh, so it's like us government debt behind every um
Um, and so americans in like usdc
Tether is offshore. So tether. Uh, they also have they also have like a corporate
Every instance of tether rather than government paper
So that's like viewed as a little bit more of a credit risk
but the fact that it's offshore actually probably appeals to some of the people who hold tether, uh, because
It's beyond the reach of the us government
What's going to be very interesting so basically different depending on which jurisdiction you are in and which governments, um
You like which governments like you understand uh, your preference on which table coin you would hold
Like probably would be different if you are in a kind of you are in like the bahamas or something
Um, you probably trust the bahamian government more than the us government. And so you'd probably want to hold, um, tether
What's going to be very interesting in this space? Um
Is the yield um the yield bearing stables?
Which just launched recently, um are offering yield to the people who hold
Further fragment the stable point market because now if now you can get paid 5 for holding certain stable points
Right, yeah, that's an interesting topic
Um, and you know switching topics a little bit. Um, I want to talk about liquidity pools
Um, so for you I want to ask like what are those good for?
um, what are the positive and negatives
And yeah, I'm wondering if you could
Talk more about liquidity pools in general. I know you talked about a little bit about that in the beginning but
um, it'd be cool if you could
Talk more about the positive and negatives
Sure. So liquidity pools are I mean crypto default today wouldn't exist without liquidity pools like
Um amms were super important for just getting deep odd to like the point where it's at today. Um
they allow for so what they're really good at is uh acting as price oracles, um, and essentially liquidity of last resort, um
And solving kind of the coordination problems involved with standing a market up because you can set them up in a way where anyone can become an LP
Generally what they're fairly bad at um is
Um, and basically the price impact of those trades
Um, they're not very capital efficient. Um
And they also don't work. Well, um as the logic around them becomes more complex because the price of any mistake goes
Up because all the money in the pool is at risk
We think though we think it'll persist. I mean we think they're basically the best oracle like, um
So we think liquidity pools will stay around forever
Uh in a in a capacity of being like how pricing works for assets
Because what's cool liquidity pools is anyone anywhere can basically express an opinion on the price of the underlying assets
Which you really don't get with things like chain link
Right and like I think one thing to know as well, I think you mentioned it a little bit but
Um, I guess like when you're making a swap on uniswap, for example that you have to also consider the slippage
There there may not be as much liquidity. So slippage will be higher because of it
And then you will end up spending more
Because of the slippage, right?
Totally. Yeah, that's that's uh, that's uh, let's not end up out of it. Um, so
With how like the most basic liquidity pool works you have two assets and the ratio of the assets determines the price
The pool will adjust the price to try to keep as much money
Like this is this is this is like a wrong but useful explanation
Because the actually like we can go into like we can go into the actual math here if people are interested in like another space
But this is like a pretty useful mental model for how this works
So you have like you have like the ratio of the assets determining the price
And the pool's goal is to basically not lose money if the pool loses money. Um
Then the pool will eventually be empty and it would be a very bad
And so basically how the pools get around this is they basically have to adjust the price the bigger the trade
And the pool is going to kind of always be out of sync with a broader market
So at any point in time because the markets are like so
Block time, uh on arbitrary things about zero point two six
Faster than each which is awesome
But it's still like much slower than binance. Um, and
much slower than anything. Um
generally speaking you're never going to have something that's both decentralized and as fast as
um and as fast as basically
Because basically it's going to be slower
Generally, the price will be moving, uh before trades can
The price will move outside of the pool before it moves inside of the pool and because of this
There will be arbitrage. There will always be arbitrage opportunities with pools
And so the way pools get around this is they actually adjust the price the bigger your trade
Um, the more aggressively they adjust the price
And this this basically has the effect. So let's say we have like a pool that has
A hundred of one asset and a hundred of another asset
The pool will adjust the price much more aggressively if I was making a trade of let's say
And if I was making a trade of five
And the pool does this because the pool knows basically that the price inside the pool and the price outside the pool are out of sync
Um, and so it's basically capping my profits as an arbitrager
Um, which is protecting the amount of money in the pool. Sorry. I know that was a very long-winded
Does that make sense though
Yeah, and you know on the topic of like 2024, right?
Um, I want I was wondering too like what are you guys excited about? Uh for hourglass?
Yeah, no, I think with hourglass, I mean what we want to be is is we want to basically build the
um a dedicated liquidity layer, right like a
We want to make liquidity modular. Um, we've had we now have a handful of different competing messaging solutions
Uh, we we we chose layer zero because like layer zero is awesome
Um, but this this allows for there to be protocols that focus only on liquidity because we no longer like
Two years ago if you wanted to build something to do anything cross chain
You would have had to have build your own
Cross chain messaging solution in house
That's no longer the case and it opens up this the possibility of building like dedicated liquidity infrastructure
And that's what we're trying to be
We're super excited about like stablecoins and their impact like, um, especially in emerging markets, right?
Like stablecoin adoption in venezuela argentina turkey is massive and growing
Um, and what we're very excited
What we're very excited about is basically
Powering, uh making it powering basically the next wave of this
By making it easier for people, um and ecosystems
Um to be part of this, um to be part of this
Like yeah for sure yeah, especially like in developing countries, um
Yeah, you know what the the cool thing about like crypto and web3 is that
Um, the system is completely open for anybody to be a part of so
um, it's cool that you guys
uh, you guys have a sharp focus in terms of
Getting hourglass to be accessible to to those
Um across like developing countries and and so forth
So, um, it's such a cool initiative to see from you guys
Yeah, no, we're excited to see where it goes. Like what we wanted to do is make it easier for teams
We were expecting a lot of innovation in the stablecoin space in the next
Five years and we view our role here is basically providing picks and shuffles. So we want we want to make it much easier
developers on top of arbitrum to
Um, well developers and entrepreneurs on top of arbitrum
Help drive forward stablecoin adoption globally
By making it easier like to get into like by making it easier to convert assets and to uh, set stablecoins
um, and you know one of the things that
I think community members, uh are curious to learn about are like the benefits, right?
Like how how can the arbitrum community benefit from hourglass?
Yeah, well community is super important to us
And we're very we're very committed to involving. Um, everyone who um
Everyone who plays a role in helping make the hourglass vision happen
Um today the easier thing to do is just basically place a trade and it like give us feedback
But we'll be we'll be making more announcements here over time. Um, well, we may or may not be rolling out a point system very soon
Nice yeah, that should be really exciting for the community
And I know one thing you guys mentioned in your content
You guys write about modularity and unbundling the bridging stack
I'm wondering like what does that mean?
And yeah curious to learn more about that
Sure, so two years ago all the bridges that were out there were running their own
Messaging in-house basically which was either done by an oracle or server
Or in some cases a multisig
And so all the teams had to kind of do everything right they had to go build their cross-chain messaging system
They had to go build like their liquidity and that's one of the reasons they use pools by the way because pools are super easy to deploy
Because these teams had to do everything in-house
Now we have things over the past year or so things like layer zero launched and basically
To prove that they worked pretty well
And ccip axler wormhole, they're all they're all basically rolling out. They all have either launched or rolling out
uh their own cross-chain messaging solutions
and so what this what this allows for is
focus on very specific parts of the stack
Rather than having to invest and building everything in-house
replicating replicating layer zero
It's doable, but it would take especially a team especially a team like us
A very very long time and if we did do that, we wouldn't be able to do like invest as heavily
Into the part of the stack that like we really think needs to be improved from a security standpoint
Which is the liquidity the liquidity infrastructure itself
Right, yeah shout out to layer zero on that front
um, yeah, I wonder if um, because like
Different chains being deployed on top of
L2 stacks, for example, arbitrum, right you have arbitrum orbit and then for optimism, right you have the super chain
so i'm wondering if there's a world in which layer zero could possibly build a product that
Essentially help with the interoperability within those chains
So for example, you have a super chain being able to communicate with another super chain
Um, and then you also have you know, arbitrum orbit chains communicating with other orbit chains
Um, that'd be that'd be something cool to see from layer zero. Um, although
Developers have been focused on
That type of research. Um, yeah, there's a research going on right now
That you could find in the arbitrum forum
That's called chain clusters. And so it would allow
Messaging, uh as well as transfer of assets between different
Orbit chains, right l2s or l3s that are built on top of the arbitrum tech stack. So
Yeah, that's just a thought from my end
Yeah, it's something we've poked around a bit with like, um
We haven't talked to the team about that at all
It's something there's definitely kind of a need there we expect shared sequencing actually to help with that quite a bit
But that's not something that we've seen
It's not something we've it's not a use case of shared sequencing that like we've seen teams really lean into in theory with shared sequencing
Have logic around this transaction only happens if this transaction on this other chain happens
And we think that will like unlock a lot of this like fast going back to your initial like your point about speed
Um, we think that will actually make it much
To offer very fast transactions
Yeah, no and on that note
Contributing on that front they partnered with espresso espresso systems
To build like shared sequencing across
Um now that you mentioned it I just remembered that
But yeah, it's really cool to see
Uh are like contributing on like the off-fronts not just like in terms of like developing arbitrum and making it better but also
Contributing to the bigger picture, which is the whole entire layer 2 ecosystem. So
Collaborating with espresso systems on that front in terms of shared sequencing for all l2s
We're huge fans of espresso actually, uh, shout out to tarls over there
But yeah, yeah, they're good people. They're good people to work with
Yeah, we've known them for quite some time and they're yeah, they have a lot of exciting stuff coming out of pipeline
Yeah, yeah, yeah super bullish on that front
Um, but yeah, I know we have a few minutes left
so I want to give you the chance to share anything else with the community like
Where can they go and learn more about hourglass? How can they get involved?
Yeah, yeah, so first step i'd say follow our twitter, um, which is in the
Which is like co-hosting this. Um
Go to so hourglass is live. Um, you can go to hourglass.money. Um, and yeah place a few trades. Um
Give us any feedback join the telegram
And yeah, we'll have a lot of announcements over the next few weeks. Um
Community is super important to us in a sense like crypto wouldn't exist without like, um without the communities
Um, we're also very interested in kind of understanding like if you're working on a stablecoin in arbitrum or you have thoughts about how um
The stablecoin landscape is going to keep evolving. We're very interested. We're very interested in chatting and just seeing how we can help
Hourglass, um, the main goal with hourglass is to basically provide better liquidity infrastructures for stablecoins
um, and we we really view it as more like a single chain thing than even the cross chain thing we added because
stablecoin developers need it
But we really basically view the longer term role of hourglass as basically being the de facto way of converting between any two stables
And so we're very we're very interested in being part of all
We're very interested in being part of basically all the innovation happening in that space
For sure, yeah, no, yeah, really excited for you guys to
Like do an amazing job like continue doing an amazing job with like contributing to the stablecoin
Infrastructure ecosystem. So
Yeah, it sounds like you guys have tons of developments going on for this year
So really excited for you guys to roll that out and see how the community reacts to it. So
Uh, yeah, thank you for joining us sam. And yeah, I wish you guys the best
For sure. And yeah, we really appreciate you having us. Um, and yeah
Looking forward to chatting more soon
Cool. Well everybody else. Um, thank you for joining and happy friday and have a good weekend