Spaces is misbehaving somewhat.
So I'm trying to get some
personal profile set up to coast
should take just a second.
Yeah, I can hear you, Jack.
Okay. I think this is fine. We can get started from here. Can everyone hear me? Can you hear
Yeah, I can hear you. You're good.
Sorry, spaces is just being problematic today. Well, welcome, everyone. I'm Bradley. I'm part of the
Syscoin Foundation. And we're joined by Jag, who is lead core developer of Syscoin and also leads Syslabs.
We've got really some interesting things to talk about today. We'll talk about this concept of Bitcoin L0 or
layer zero, which is some exciting research and development that's underway by Syslabs and Syscoin
Foundation for the Rolex project. Before we get into a lot of details on L0, I guess which I could kind
of best describe as an eigenlayer of sorts for Bitcoin. I think that gives everyone sort of a very
high level understanding of what we're talking about. But before we get into that, it's probably
good to lay some groundwork to help make sense of Bitcoin L2. It's got a lot of facets to it. And I
think it can be a little bit confusing for new people who are starting to look into it. This space
is probably ideal for, well, I mean, pretty much anyone who wants to learn about Bitcoin L2 and what
we're doing at Syscoin and Rolex, what Syslabs has been building. But really, it's kind of tailored
to investors and blockchain enthusiasts who are currently researching or maybe are confused by
Bitcoin L2. Also, it's great for engineers who are working to help scale Bitcoin. So any of you
guys that are working on those projects, undoubtedly, you'll have questions. So we'll be
happy to pass the mic at some point a little later into this. So, you know, when people bring up the
topic of scaling Bitcoin, or they refer to Bitcoin L2 specifically, they could be talking about a lot
of different things, right, because there are different facets to Bitcoin that are involved in
scaling. So sometimes people are referring to something as simple as a BTC bridge, going to some
EVM somewhere that's using, you know, or maybe it's a roll up that's using data availability that
isn't enshrined, you know, maybe it's using celestial or something like that. So the waters have
gotten a little muddy, I think, on what really constitutes Bitcoin L2. So we can maybe help shed
some light on that. There's a lot of different projects working to help solve different facets.
There's projects like BPM. There's also RGB protocol. And these do completely different
things. You know, some people who think about Bitcoin scaling think about new use cases for
BTC, right? They're thinking about scaling use cases. Other people are thinking about
increasing transaction throughput. So there's a lot of different angles to discuss. So Jag,
maybe you can kind of go into the Bitcoin L2 scene, as you see it today, sort of the current
status. And then we can start discussing what we see sort of as an ideal modular holistic design
for Bitcoin L2. And we'll get into some detail of necessity. Without some technical details, you
know, like, let's try to keep it high level. But without a little bit of technical detail, it's
nothing but a bunch of buzzwords. So we need to talk about that stuff without getting over too many
people's heads. And I think you're pretty good at that. So I'll let you take it away.
Yeah, thanks. No, I would start with, with sort of a hypothesis or a thesis around this whole
thing. It's, you know, when, when you hear Sam Altman talk about technology, leading to AGI,
he's been, you know, ever since the creation of, ever since the creation of the wheel, you know,
the first form of technology say, we've, we've been always on a path towards AGI. It's just a slow
progression and a hockey stick curve that we're on now. But we, you know, we've always been on
that path. And within that subset, and what we're doing, when we saw Bitcoin, you know, the
power of Bitcoin, and the tool that was created for, we've always been on this path towards
trying to scale Bitcoin and to build, you know, layers on Bitcoin in the same way. So this is
for us, this is nothing new. This is something we've been working towards. Just recently,
there's been a lot of buzz around the layer two and roll up narrative. And this has always been
sort of an internal agenda for us to be able to be this layer extending Bitcoin and even going to
our, when we release the NEVM, we've always said that we're kind of the combination between Bitcoin
and or bringing both worlds together, bringing the Bitcoin world and the Ethereum world together
in ways where the EVM itself is being attached to Bitcoin through the proxy of Syscoin as an
extension. So yeah, the in the article I came up with just a couple days ago, there, there are
sort of a highlighting the misconception around what a roll up is and what a l two is, because a lot
of them are, you know, completely separate, but they're getting funding at crazy evaluations
and people in retail are not sure what if they're the same thing or not. And these terms have been
created because of the push on roll ups for Ethereum, but it's very different on Ethereum
than it is on Bitcoin. So the terms got carried away. Because on Ethereum, l two and roll ups are
the same thing. There's no differentiation. There's different types of roll ups, there's
sovereign roll ups, and, you know, fully decentralized roll ups was Validium's where
the data is kept off chain. But this is not brought into Bitcoin, it was just roll ups and l two.
And Ethereum, everything's just a roll up. And no one mentioned l two, because it was inherently
just a roll up. On Bitcoin, these mean different things. And that's where the confusion starts.
Like the roll up concept on Bitcoin is if everything is happening on Bitcoin, you know,
the data and the state and everything, it's super expensive. But some people die on that
hill saying you can't do any better, because the finality and everything in Bitcoin,
it's tying to the consensus itself. And then the l two is the concept of moving,
moving something off of Bitcoin, maybe you're sharing some part of Bitcoin, but you're,
you're moving off and you're doing something else and creating some sort of new network
off of Bitcoin to secure sort of Lego blocks to tie in Bitcoin in some way. And some a lot of the
maxis or the proponents of Bitcoin say that's not real. That's not really scaling Bitcoin that's
creating some parasitic side chain or something that's going to detract the thesis of Bitcoin
and hard money or sound money, and make it into soft for the people that opt into that.
And likely they'll be duped or pumped and dumped on or something like that long term.
That's, you know, that's, you know, from the Bitcoin perspective, we've spent 10 plus years
in this space, we know both sides really well. And so this, from the Bitcoin perspective,
put those glasses on, that's what you'd think. But on the other hand, if you do,
if you do the roll up, then the biggest problem is, it doesn't scale like the Bitcoin block space
is one megabyte max two with segwit. And you just can't put enough data in there. And if you do the
math, it's like 50 to 70 transactions a second, if you have a roll up running off of Bitcoin,
but you, you know, even consume all of the block space and don't let anyone else in,
you're maxed out at like 50 to 70 transactions a second. Now, assuming optimistic roll up,
which is around 60 to 70 bytes per transaction, right? So that for that, for us, that's like a
showstopper, like, and the thing that made all is possible is Mr. Linus's invention of bitvm.
Robin Linus came up with this concept of you should be able to do a general purpose computer
off of Bitcoin. If you consider the Bitcoin opcodes and create through NAND gates, you can
create a general VM in traditional discrete mathematics, you have NAND gates, and within
NAND gates, you can actually do any sort of computation. And because you could do any
sort of computation, if you can play with those gates, and you create a virtual machine,
Turing complete virtual machine, you can effectively write smart contracts on that.
Right? It just means you have to do a lot of calculations to get the same sort of smart
contracts that you would see on Ethereum, but you could do it. So that's what Mr. Linus figured out
on bitvm is you can use the existing opcodes on Bitcoin, there's two specific opcodes you could use
to create NAND gates. And then from the NAND gate, you can actually effectively create logic that
would act as a smart contract. So some, some of these companies like Citria, and some of these
other ones are working on bringing that to market. And the problem with that right now is those are
limited to just one person doing some sort of smart contract, and then the other person challenging
that state of something happens wrong, like if, if for some reason someone's trying to double spend,
then you should be able to say, look, I, I think there's something wrong, I'd like to challenge you,
I can go back to Bitcoin as sort of the core system. And this is a big breakthrough, because up to now,
we didn't have the ability to actually have a trust minimized bridge from Bitcoin to something
else. We always had some sort of trusted bridge with custody or institutional backing or something
like that with insurance. Lloyd's of London would back some sort of bridge and say it's $100 million.
And you know, there's always gotchas with that attack ever happened. So no one really trusted
that it's not decentralized. The ethos of Bitcoin philosophy doesn't apply to a bridge,
such as that. But when bit VM came, you know, it was, that was a breakthrough on the trust
minimization aspect. And when you get into the space of either a roll up or an L2, you realize
what you're effectively depending on is still just the bridge, you always start with the bridge.
And either then you work out data availability, and you work out all this other stuff,
and L2, or on a roll up, you would still, you know, use that same bridge technology to
settle the state. So what we're seeing when we spoke to the we spoke to the zero sync team,
you know, the feedback was, yeah, you could use this as a bridge, you know, it's not it's not
even ready yet. But I wouldn't use it for much more. It's just too many gates, too many of
those NAND gates, you have to worry about to be able to do like a whole roll up with everything.
It would be infeasible, right? You probably need some sort of zero knowledge proofs
to, to crunch the state, to be able to be approved to Bitcoin, if something happens,
if there's a challenge or something like that, it's just too much data that has to be at play
through through the scripting system, that it would be infeasible to do much more.
So some of these teams are working on trying to crunch that down.
But either way, there's a bridge, right? So let's start there saying there's a bridge.
And that bridge is trust minimized. And a bridge has some sort of edge cases, most likely has some
sort of, it's not fully, you know, trustless and decentralized off the bat, there's going to be
some sort of issues there. For example, on bit VM, there are cases where if you're going to bridge
Bitcoin to something like Ethereum with bit VM, then you're limited to just two parties, you know,
it's just you as a person that's making the bridge possible as a prover, making the proofs that
everything's okay. And then there's one challenger. And that the amount of people that can say, hey,
something's gone wrong is limited, you know, that that is not a dynamic thing, like you would have
in optimism or arbitrum or some of these other roll ups, where anyone can challenge and say,
look, I think something went wrong. The one of n assumption, which we're calling trust minimized.
That's not possible today with this technology. That's one edge case. The second is,
and this gets a little bit into the theory of bit VM is when you do these challenge systems,
when you're going to say that I think something happened wrong on something like bit VM,
it goes into a what's called a bisection game where you have to basically eliminate all the
variables to figure out what exact problem are you saying that your bit VM state is like which
exact opcode is off, or even which bit is off. And then from there, you can challenge the state
and win or lose, you know, for challenging, hopefully you win and roll back the state.
This is similar to how optimism and arbitrum are working with their challenge games.
So yeah, you get into that side of things, you realize that on Bitcoin, it's just much
more expensive, much slower, take up to 20 days, maybe 20 to four, at least 20 to 40 transaction,
they take multiple days to resolve that dispute. And again, it's not open to anybody. It's open to
only a select people and individuals in the white list of challengers, which is not good enough,
right? So you have these challenges and people are like, how can we resolve that? Well, you can
use some sort of zero proof to come to the rescue there to try to make the game much smaller. You
know, you can off off chain, you can create a fraud proof within zk and prove that you know
exactly which opcode is often here, I can show you the proof and you can verify it using bit VM.
But that requires you to trust that you can off chain communicate between these people,
you communicate between the prover and the challenger, what happens if the prover is not
communicating if he doesn't want you to, if he's defending his position, he doesn't want you to
challenge, he wants to double spend and take all the Bitcoin and the bridge, right? So you have
these problems when you try to not use Bitcoin as sort of the court system. And if you use Bitcoin
as a court system, it's too slow. And it's too expensive to do anything else. So you know,
that's these some of the answers we're looking to solve, right with with our solution.
First of all, the l twos that are coming out, they're effectively new networks, and they're
effectively creating new tokens. And then they're trying to secure all these services. And then they're
saying, hey, by the way, we'll use bit VM to bridge in the Bitcoin. Now we've created this crazy new
layer of Bitcoin adoption. But really, it's just a new network that you've bridged tokens as a
sidechain to that the secondary layer should ideally really share security with Bitcoin. And
Stacks tried to do that, right? So Stacks is embedding all of the stuff within Stacks,
all the transactions within Stacks into Bitcoin, and then replaying it as sort of a sidechain. And
it's sort of a colored coin implementation where if you replay Bitcoin, you could replay Stacks
and recreate the state of Stacks. So Stacks could be a bunch of smart contracts or something like
that, that run, but the data has been put into Bitcoin, right, immutable forever type of thing,
inscribing it into Bitcoin. And yeah, so that's tying into Bitcoin is critical to say that you
are, you know, as secured through Bitcoin in some way, right. And our take there is,
yeah, if you do that sort of thing, we started tying, if you don't tie into Bitcoin, first of
all, it's not good, right, you're creating a new distribution investor base and a new token that's
not as hard as Bitcoin, and that token itself, probably is proof of stake, and it has other
issues that could break down. And if that happens, what happens to your Bitcoin, or what happens to
anything else you're doing in that DeFi environment that could crash. Because it still just depends
on the bridge, right. And for us, we're thinking, okay, if bridge is the first Lego block,
and that's something that VM guys are doing, how can we improve upon that as a state of the art of
bridge? And then how can we attach some sort of secure environment that lets you do more than just
store the Bitcoin and spend it, you want to do DeFi, or you want to do other stuff with it.
And so that's where Rolex starts to come into play, like with Cisco, we merged mine Bitcoin,
so we don't attach all of the data that we're doing as this coin into Bitcoin itself. Because
with first of all, again, that's too slow, it's too expensive. And we can't we don't have the
flexibility of doing stuff like data availability, if you're going to throw it into Bitcoin, you want
to decouple some of those things, we're going to decouple those into your own network to solve
that. So our take is you start with merge mining. And many of the researchers on this
Bitcoin L2 space and roll up space, the Ethereum, mostly they come from Ethereum, they've gone
back to Bitcoin, they've discarded the concept of merge mining in a funny way, if you if you
listen to them, they don't even looked at it, they believe it's just the wrong direction. So
that's the funny thing. But for us, it's a showstopper if you don't use merge mining or
something like merge mining. Because we get to share the security of Bitcoin miners directly.
So Bitcoin miners are putting their work into effectively, the Syscoin is a side chain is being
secured, but it's decoupled from Bitcoin consensus. And you you actually want that decoupling. But the
the actual consensus of Syscoin is shared with the Bitcoin miners at the same level of hardness of
Bitcoin right now, 70% of it, you start there, right, and then Rolex is the layer two on top of
Sys, which uses the data availability built on Sys. And that lets us scale. But remember,
most of these people are doing the same thing, they're they're creating a new Syscoin,
but then they're creating their own network of proof of stake, and then they're using bitv.
You'll, you know, ideal Bitcoin layer, we use merge mining. So we don't have any,
there's no proof of stake in there. It's sharing mining with Bitcoin, the same Bitcoin miners are,
are on board securing that system. And then you could create the extended layers to scale
that system up because you have data availability. So you solve the scalability aspect, you solve the
problem of, you know, having to do proof of stake, you merge mine, you're sharing security
with Bitcoin. So we got that part. So but we still want to be able to bring extend Bitcoin
and bring Bitcoin into the picture. And this is where the trust minimize bridge stuff really
starts to shine and come come into play. So you move, you move the Bitcoin into Rolex,
you know, using something like bitvm. So we are still depending on that bridge,
just like everybody else. And if someone else is saying they're not depending on the trust
minimize bridge, then they're doing it totally different way. They're not either L2 or Rollup,
there's something else. So everyone's depending on something like bitvm
to come online to build a bridge. And we depend on that too. But we are going to enhance it,
we'll show you why. So you bring that Bitcoin over to something like Rolex,
it's the base is merged mine with Bitcoin. So there's no other new assumptions. You know,
it's merged mine. So you don't have to worry about proof of stake, or nothing at stake issues or
anything like that. And then you start to offer services on that Bitcoin layer. The first thing
we were thinking was Ethereum has staking and restaking, we like to do something like that with
Bitcoin. Because we are merged mind, we have some information about Bitcoin, namely the
difficulty curve, we should be able to plug in sort of a staked ETH comparative to Bitcoin. So let's
call that STBTC, right stake, stake Bitcoin. But the difference when STE and STBTC is staked ETH
has slashing, it pays out in ETH, but it's slashing. There's slashing concerns on that,
because when you take ETH, and then you put it into the staked ETH contracts, actually,
you're running validators on Lido or something rocket pool or something else. You can be slashed
because the consensus of Ethereum is proof of stake. And due to the risk of proof of stake,
they actually have slashing if you don't run that node properly. And in the Bitcoin world,
there's none of that. So you would be yielding something without having the slash concerns.
And that token itself that's yielded is a decentralized token with no pre-mine or
anything. It comes from the smart contract and generated based up the hardness of Bitcoin,
you know, based on the difficulty curve. So we'll talk a little bit more about what that
yield would do and why that's important. So this this BTC becomes STBTC. And then
the thought process, this is a lot of this is research, but we think there's some merit here
is you would then move it into something like the eigenlayers, an option, if you want to increase
your profit, the eigenlayer would be serving the same bridge that we would we were talking
about with bit VM, the bit VM bridge. Remember, I was saying there's still some gotchas in bit
VM, there's edge cases, there are problems with the existing bit VM, namely, not being able to
do the zk challenges, not being able to have dynamic participation, and this sort of thing,
to be able to do a lot more than just bridge, but maybe do smart contracts and Bitcoin.
Well, that same service, we could probably eliminate those edge cases, if you do an eigen
type service, but you use the actual STBTC is collateral with slash conditions. Because when you
run Eigen, you're effectively putting your collateral at risk saying if you run this honestly,
you're earning fees, you're earning ROI. If you run it dishonestly, you will be slashed,
you know, it will take your STBTC, you know, slowly, if you're being dishonest until you become
honest again. And that's the innovation of eigenlayer, right? The eigenlayer runs on Ethereum,
we're saying we run it with Bitcoin instead, you'd be earning Bitcoin from the services and
you're staking with Bitcoin. So it's fully compliant with like, extending the concept of Bitcoin.
So you're running that bridge service, and you're securing the same bridge, that's bringing the
Bitcoin over that you're securing it with sort of like in a circular economy. So you bootstrap it
and then you run it as the same bridge service. The other component would probably run is something
like Eigen DA, which serves a lot more bandwidth than the DA that we have on Syscoin. The DA we
have on Syscoin is considered super premium, you know, 450 kilobytes a second or about 7000
transactions a second, if everyone was to use it with optimistic rollups. And then the Eigen DA is
using the same technology that just came live on Ethereum today, using EIP 4844. And based on
what they're calling blobs, that same technology is used within Eigen and they're pumping out 10
megabytes a second, right? I think they're doing that right now if you if you try to use Eigen DA.
But that service would be slashable with the same Bitcoin. So the idea there is if this is
becoming sort of a layer zero or a base, it's a super secure way to bring in Bitcoin and extend
Bitcoin for the bridge service. And then any other roll up launching on top will be able to leverage
that bridge or that DA service to extend its scale. So if you're doing 10 megabytes a second,
we're talking about a lot more throughput. And it's an optional choice, because it's not going to
be as secure as the base, you know, the base Bitcoin DA that we have, but the base Bitcoin DA we
have only serves 450 kilobytes a second. If you want to do more than that, you either have to pay
a higher fee to settle in the Syscoin one, or you would use the Eigen DA version. And you would
overflow into that where you could choose like take your security based on your security preferences.
It's still pretty secure because it's, it's easy to detect if someone's doing something wrong in that
system. And it's also secured with Bitcoin, instead of any other token, it's a lot more secure to use
that Bitcoin. So that pretty much completes the circle and makes it into like a layer zero for
other Bitcoin L2s and roll ups not roll ups Bitcoin L2s to adopt and build on top. There's
two other components that tie into this. First, we'll go back to the the STBTC yield I was talking
about you get some sort of decentralized yield at the hardness of Bitcoin. You know, we because the
Bitcoin itself is still a bridged Bitcoin, it's not going to be ever classified as actual Bitcoin,
it can't it cannot be the only other real decentralized token on a blockchain is the gas.
Otherwise, you're creating some new token out of thin air. This one is actually unique, because it
would be at the hardness of Bitcoin, you're using the difficulty curve of Bitcoin to generate a new
coin. But the yield is actually decentralized, right? It's not issued by a company, it's not
pre mined, it's not owned by anybody. It's not bridged. So it doesn't have any bridge risk,
it's fully decentralized. If something happens to the chain, the chain reorganizes or anything,
that token would roll back and everything using that token to roll backs. That's the only other
form of decentralized token other than Syscoin on the chain, running with the hardness of Bitcoin.
So that yield, you know, you could definitely have uses of that in the DeFi economy,
for example, in CDPs or algo stables, that require hard money or hard input to create money
to create money that people use to buy things that shopping markets, for example,
the stability of that ecosystem depends on the hardness of the money going in, it cannot be a
bridge token, it cannot be, you know, some thing that goes up and down a lot or something that's
not hard. It's got to be pretty much sound money coming in might be a commodity like Bitcoin,
which is ideal. And then you create the you create the stable money out of that.
And then my thesis has always been the money is going to be generated on the blockchain,
it's not something that it's not Bitcoin, it's not Ethereum, it's not Syscoin, this isn't money,
these are tools to create money. And we create the money using algorithms in the smart contract
world. But you use a hard hardness or something like that yield, right? So that's just one
example of where you would tap into that, that yield and create some something interesting out of
that. And then the second part was, you know, once you have this layer zero, definitely you
can build the layers on top to do Bitcoin defi or Bitcoin rollups, Bitcoin L2s to settle on and
leverage the DA leverage the bridge service that would be like really secure, because it would
not only have slashable security through Eigen, it also have the optimistic trust minimization
security a bit VM, the concepts there. But if people are really dead set in using this technology
across other chains, like Ethereum, settling it on Ethereum, or settling on a bias chain,
or something like that, you know, we were developing a zk light client. And that's what we announced
as zk da was the ability for another chain, sort of like the celestial story, another chain can
tap into what we're doing on Syscoin by checking messages on Syscoin across another chain. And how
that works is you run a light client, which is basically just rolling the block headers of
Syscoin on another chain. And then you can check a message exists in the Syscoin blockchain by
seeing if it commits to the block header. If it does, then the message exists, you can just
simply check, okay, does the DA exists of this hash on Syscoin by checking that it called a smart
contract and the smart contract was a success. And if it was a success, that means, yes, the DA exists,
or the bridge transaction exists. So this is how we we thought about unlocking the value kind of
like the celestial story of bridging Bitcoin across other chains, but also data availability
for roll ups or L2s are there either Bitcoin focused or even other focused roll ups that
want to tap into the security of Bitcoin. Yeah, Jack, that's quite a bit. I would like to
tell attendees if you're not quite familiar with Syscoin, if you're sort of new to the project,
you can go to docs.syscoin.org. And the landing page is Syscoin in a nutshell. So basically a
one pager should give you a good overview. So something that you mentioned, Jack was
sort of the lack of awareness around merge mining, or sort of a knee jerk response towards merge
mining, maybe based on past bad implementations of it by other projects. I think that's mainly
what kind of stymies more awareness around it. You know, merge mining is a primitive. So whether
it's used, you know, it's broadly useful, but its usefulness and its security really depends on
how it's implemented. So you want to speak to that a little bit is I think that's
fairly important because it's toward the bottom of our stack.
Yeah, so merge mining prevents the prevents the need for another crypto economic incentive to run
to secure the sidechain. I always said that is Bitcoin and then there's sidechains, right?
You start with Bitcoin as sort of the standard of security. It's your host layer. And then the
operating system layer or the layer where you can do more was always Syscoin, right?
Emerge mining prevents the need for you to run some sort of, I don't know, governance or MPC
algorithm or some proof of stake that you're running or some other operative that secures
that new token merge mining prevents that. So that's the first idiom is this is a mechanism that
prevents the need for you to run a new consensus. You're running a blockchain, but the consensus is
derived from the security of Bitcoin directly. And you're giving incentives to those miners
because they would get it for free. They're using the same work to be able to mine. Now,
the problem is almost nothing at stake proof of stake issue, right? Like, I don't pay anything
for Syscoin yet. I'm getting Syscoin. Do I care about Syscoin? Maybe I should try to attack it
for fun because I don't have any, I don't have any stake in it. Really, I just mined Bitcoin
and ran a full notice Syscoin. I submitted the work. It was accepted. I got some of these coins.
Maybe I should, for fun, try to attack this thing because I could, right? Now,
the game theory there doesn't apply long-term. It's only for disruptive events for someone,
you know, these pools that might decide one day just to turn for a while. They would obviously
run out of wanting to do that because obviously they're getting something for it. So you might
as well promote the use of that and keep that going. And that's what we've seen over the long
term. Like most miners have been holding the Syscoins since day one. They've never sold them.
Like if you look at the addresses of the pools mining from 2014, I don't think the,
if there may be a few million Sys has been sold, but most of them have been held. They don't even
want to distribute to users because they're waiting, they're waiting to see the adoption
of that chain and they'll promote that. So merge mining is a way to stop that. But there are
issues with merge mining. Like anything, nothing is going to be a full stopgap solution that
covers all the angles. And early on there was, there was attacks by Bitcoin core developers
that didn't like that concept because they don't want other coins to exist. It was just Bitcoin.
Like you could do everything on Bitcoin. You don't need any other, obviously they didn't
understand that there were smart contracts coming with Ethereum and the world was
going to push in that direction over the next 10 years. But the concept of merge mining existed
for a long time from, from even Satoshi early on. And there was attacks, right? Like let me run a
pool and just censor this blockchain to kill it as long as needed before the investor base
just loses trust in it. And I will just push the difficulty down myself and then start mining
with a CPU. And, and then I could just totally disrupt this, this blockchain and not use it.
That's, you know, that's a valid concern. And that's probably why a lot of these
researchers shied away. But the risk team, and then a little bit of the stacks team,
I think Paul Storich of BIP 300 took a look at merge mining, I thought there's might,
there might be something more there. And risk took a little bit of a deeper dive and try to
change merge mining. And Paul Storich introduced the concept of blind merge mining
to avoid some of these risks. We took another approach, we thought, it's funny how we evolved
from this direction, we, we thought about finality. And it was sort of an evolution
of realization, not something that we put a white paper out there saying we can solve merge mining
because of this, we instead evolved naturally to include finality through what we call
century nodes, which effectively run and witness the state of the blockchain run a full node,
and they provide that knock a model coefficient and increase the decentral decentralization
because there's more full nodes running. They're almost paid to be full nodes.
But there's one service that they also run that helps the network as well. And that's called
chain locking, right? That essentially is what Ethereum is doing with final finalization,
checkpointing, right? So what they do is they an Ethereum, a whole bunch of them run and they
witness their network and they agree to a state. And then after about 12 and a half minutes,
that state gets hardened and becomes a checkpoint, it cannot roll back prior to that. Usually it
works well proof of stake networks, doesn't really work too well with proof of work networks,
because most of the time, if you're adding checkpoints or you're controlling, you know,
you're running ahead of the proof of work or the miners, you effectively become the network or the
decision makers, right? And we carefully analyze that we wanted to avoid that with our design,
right? So the researchers stopped at merge mining, and then they didn't look beyond,
but because of those problems, and we looked beyond and we said, we naturally arrived to
this conclusion, we saw, okay, finality can actually do a lot more. And so it solves a
specific problem, and two specific problems, actually, if you think about it, how it works is
the validators or century nodes are effectively running, they have multiple quorums,
there's four quorums, each quorum has 400 nodes, and they're randomly deterministically chosen,
they're deterministic, but randomly chosen, and which nodes and every, every four hours,
one quorum is removed, another quorum is formed. So there's four rotating quorums at any given time,
each quorum, 60% of the nodes have to agree on what the state of the blockchain looks like.
And it's usually a state that's like at least five blocks back. So it avoids merge miners,
it avoids the Bitcoin miners from colluding with the century nodes to try to game the system to
try to create, you know, try to select a fork that has less difficulty, and then they're just
going to keep driving the difficulty down to zero by working with the century nodes. But if you
look back five blocks, and say I'm going to lock the fifth block back, then it prevents even that
collusion from happening, right? You'd have to be really, really lucky to get even one,
regardless of trying to get every single transition of the difficulty to push it down
and then make the thing useless. So we, you know, we allow the quorum to choose, okay,
the fifth block back should look like this, it's this hash, let me lock that. And then
all quorums have to agree. So three out of four quorums, they run the same thing. And they're
all different nodes and effectively creates like a real good security mechanism makes like a super
majority of the century nodes, of which there's 2700 of them right now. But 20, a super majority of
them have to really just agree on the state of that chain five blocks back is pretty stable.
Usually there's not reorganizations of Bitcoin typically last one to two blocks, because most
of the pools are talking to each other anyways. Since they only last one or two blocks, it's
really unheard of to see five blocks back, there is some sort of issue. But even if there is,
it resolves first, and then the quorums will end up, they don't have to form finality. So if if the
fifth block back doesn't match, nothing happens, it just falls back to the Bitcoin consensus.
But if they do agree, then they sign this BLS message, and they all they all sign together,
and it aggregates one super BLS aggregate message, and that gets distributed to the network, and
it's verified. And that locks every node to that chain, that fifth block back. And it's a it's sort
of like a non enforced finality event. If it doesn't happen, it's fine. If it happens,
it's also fine. Yeah, um, you know, another thing our finality does is it enables safe pruning,
which is what enables us to have a scalable DA protocol. You know, our DA protocol is called
Bitcoin DA. We call it that because it actually intersects with Bitcoin. In contrast to, you know,
something like Celestia, that has essentially no relation to Bitcoin. You know, one of the
reasons that you one of the reasons that you can't really find viable data data availability
on the Bitcoin chain itself is due to finality still being, you know, highly probabilistic.
There's no real guarantee there. Of course, the probability increases with each block.
But to scale DA, you know, that's one of the things that you need is finality for efficient
pruning that's safe. You know, in addition to an appropriate, you know, block space fee market,
right? Yeah, so, you know, our design has made a lot of things possible. And it's kind of interesting
because a lot of these pieces were in place, have been in place for a while for years.
And we've gotten to this point now, you know, in the industry where scaling Bitcoin
in different ways, you know, and giving BTC, you know, computation options that don't
introduce too many new security assumptions like these, these topics are beginning to
get a lot more attention. And viable solutions are beginning to emerge. And, you know, we're
very well positioned to help facilitate that with our infrastructure, you know, and, you know,
something about Syscoin to, to people who are somewhat new to it, is we're an entire modular
tech stack. So we have a settlement layer. We have roll ups on top, we have enshrined
data availability. So it's quite a bit to wrap your head around. It's, it's almost like somebody
who's new to Ethereum, just kind of jumping into Ethereum and trying to figure it all out.
I guess I could liken it to that. But, Jag, how does how does Rolex play a part in Bitcoin L0?
Yeah, like, if you think about it, we've always been on this direction to try to,
we've always been a proponent of how we take Bitcoin and extend that beyond just
the echo chamber of the Bitcoin consensus protocol, right? And yeah, it's nice to tap into the
script and tap root and confidence, maybe Opcat comes and we could do a lot more. But you will
always, always, always have a data availability problem. You will always have a need for
something like Syscoin. And if you keep researching and you keep trial and errors on the designs,
you always will end up in a solution like what we created, we think, because of the fact that
we've solved the two big problems, which was merge mining with selfish mining, we've solved that.
So the miners won't have incentive to go and attack your, your child chain. And so now you're,
you're coupling, you're making merge mining a reality and a real solution. And then the
finality allows you to, like you said, prune the data so you can, the data availability problem
means you would store the data only short term. And that lets your blockchain scale up,
because you're only showing storing short term. And you're deleting after a few hours or, you
know, six, seven hours in our case, then the cost of that component of the blockchain is
hundreds of times less than a normal transaction. Yeah, because I think it's important to
sorry, sorry to jump in. I just think it's important for people to understand too,
that when you said when we talk about pruning the data, or getting rid of it,
the purpose of the DA protocol is to store a succinct proof, or a really a hash of
the data on chain, to prove that to prove two things. One, that the data in its entirety,
the data blob, was made available to the world for archiving purposes. You know, and in our case,
it's made available in, in the blob cache for six hours, for any archivers to archive the entirety
of that data. And the hash also serves to prove validity, right? So the point is to solve the
fisherman's dilemma. So when we talk about pruning data, we're talking about clearing the blob cache.
Once a sufficient amount of time has been given to the world, and the fisherman's dilemma has been
solved. Yeah, the big realization there, that maybe some of the Bitcoin guys can't get around
or wrap their head around is in the research side on Ethereum, we realized that in an optimistic
assumption, or trust minimization assumption, actually one of n assumptions, you just need to
witness the data, and you have to have guarantee that the data exists. So any honest, with no barrier
of entry, any honest person in the whole world, that is witnessing the network, is required to keep the
whole thing secure. So that's the trade off, and nothing's free, right? This is the trade off,
the trade off with anything Ethereum is doing with the DA, Celestia, Avail, and near DA, all these,
they're all making the same trade off different, with different security assumptions, but this whole
system isn't the same trade off, that one honest person is going to be always around to be able to
witness the data. If you're running a roll up, maybe it's you, if it's a government, maybe it's
them, maybe it's some institution, maybe it's agency, any honest person. That's the same assumption you
make when you run Bitcoin, right? Like when you run Bitcoin, you assume that you're going to
connect to one honest node to serve you the actual chain. If every node, if all eight peers
connecting to you in Bitcoin are all going to serve you an invalid chain together, and they all
collude to say, let's get this guy on a different chain for some reason. They can't really steal
your coins, but for some reason they want to do that. They could do that. The assumption is
that one honest person is going to push you the chain with more work, and you're going to tell
everyone else to screw off because that one honest person is giving you the one with more
work, and you know that one's right. Everyone else is not the longest chain. The longest chain
will prosper, and I get the right one. The same way one honest person says, no, I have the data,
and so if you want the data, here it is. You can either challenge any system, like if it's
bit VM, you can challenge the state, or you can challenge the roll up, or in the case of ZK
roll ups, you could effectively be able to exit that system trustlessly. If you're on a roll up,
like Rolex, you'd have the ability for a guarantee that one honest person in the world exists,
therefore, if anything happens to Rolex, or if anything happens to that roll up,
I will be able to take my money off and go back to the base, and then go to some other Rolex
part two or something like that. Yeah, yeah, and that's the reason why it's so important for
the data availability to introduce the least amount of new security assumptions as possible. It needs
to be as close to the layer that people exit to with their value. It needs to be as close to that
security model as possible, if not identical. Right, right. And if you use another layer,
sorry, if you use something like, you know, these are good, these are good projects,
but if you're using something like Celestia, you're actually not trusting your blockchain
anymore. The whole roll ups trust assumption now is relying on the validators of Celestia.
So if your validators of Celestia are not as hard as Bitcoin, or the consensus of the validators
are not just as strong as the security of Bitcoin, in that situation, for any given time period,
then your system is now downgraded and trust and security. That's the problem. And if you
use the base layer, we kept saying enshrined DA, then you're as secure as that base layer. And
if that base layer is sharing security with Bitcoin, that's how we say we are actually
serving DA and extending it to Bitcoin, we know Bitcoin is not going to do DA, we know that like,
it's too much of a change, they would require finality, that they would require if Bitcoin was
to go down the road of doing that, they would end up doing something like what we did, they'd have
to run the century nodes, it'd have to have staked nodes, they would want to make sure
it's not proof of stake, they'd want to make sure there's finality, and then they'd have to
remove the data on the finality. So it's a slippery slope, because they would end up at Cisco and
design as soon as they do that. And they're not going to do that. So the DA has to be done on
another layer, and you have to have DA to scale up anything beyond 50 to 70 transactions a second,
you'll have to use DA. And if you use something like Celestia, or some other layers, you're
actually trusting just the validators of those systems, instead of putting that trust back into
the Bitcoin mining side. Yeah, I'm personally a fan of Bitcoin, for the most part remaining
as is. And I know a lot of engineers would, on the Bitcoin side, would disagree with that
naturally. But I feel that Bitcoin serves a very important purpose today. You know, it's the most
proven form of decentralized, secure settlement for digital ownership and value in the world.
It's the first and the best. And I just think that messing with it too much, you know,
you're running risk. I mean, we already saw some of that with the first the introduction of SegWit,
which was fine. But then, you know, there was some competent issues with the introduction of
Taproot Schnoor, with some unforeseen implications. And it seems like the more changes that are made
to Bitcoin core, you know, the more risks that we run of unexpected outcomes.
Right. So I would broadly, my brushstrokes would look like this. Bitcoin is,
Bitcoin is in itself, that in its own chain is the store value of the world, the new gold.
The trust minimized version of Bitcoin using the bridge will be the collateralization of finance
in the world, and the Web 3 and Web 2 turning to Web 3. It would be the collateralization of
Bitcoin services and finance in the world. And then the yield coming from that would be the
backing of the decentralized finance world, like the algorithmic stables or formation of money
or formation of speculation on the blockchain or create IoT or any any sort of thing you're
thinking about DeFi. So the collateralization is different than being the basis of sort of
like a treasury to form new sorts of investments like money, like doing money on the blockchain.
So the collateralization is the story of Bitcoin, right? It's going to be backing everything we're
going to do as society. And because it's got the hard money aspect of it, it's deflationary. And
if you look a little deeper with AGI coming, I personally think that the story of Bitcoin is
a governance story. It's a power over decision making as as a society. If you own enough of it,
you have almost wealth decision making power to decide where we're going to spend our time,
because you're not going to need to work anymore. You're going to be able to just yesterday,
there was an interesting AI agent released and it's a software engineer. It's getting pretty good.
Some people are saying that's a spark, the first sparks of AGI because it can create any software.
We're getting to a point where you're going to be able to just say something and it will happen
and working with other people in social context, you'll be able to work with others to say,
let's work on this together. And it'll just it'll just be made. So you won't actually have to
most jobs probably be gone and you'll be using your creativity or your knowledge expertise in
some other domain to be able to do cool stuff. So if you're if you don't really have to work
because everything's done for you, then what how will we spend our time and what is going
to be our motivation to live on a day to day basis. And something like Bitcoin is the hardness of
Bitcoin represents governance of political vetoing or deciding where humans should spend their time.
And when AI does come, when we hit Singularity, it's not going to be using fiat dollars. It'll
be using digital money, right? It's going to be trying to get itself in the wealth game
that humans understand. It's not going to obviously it can create a new blockchain and
be like 1000 times better than Bitcoin because its IQ will be 1000 times more. But we won't
understand that system. So we won't use it. In order for us to use something, we have to understand
it. We understand Bitcoin, we created it. So effectively has to play that game to acquire it
in my mind. And so that's for me, the why Bitcoin is important. And it's not
it's not the story of Syscoin, I think, because this coin is it doesn't have the same deflationary
tokenomics. The Syscoin plays just as important role, because it wants we need to extend the
utility of just the store value aspect, the governance aspect, there's more that you can
do with that. And that's what why we think Sys is important. Yeah, that makes sense. In
regards to AI, I think, similar to how a hunter, more or less needs to act like the animal
being hunted, to a degree go to the same places and observe the same things in nature. AI will use
what humans use. So, you know, maybe that has some dark implications. But
just so that everyone knows, I don't see questions or requests for the mic coming up. I think
it's related to this space session being pretty buggy to begin with. If you have questions,
just feel free to comment on the space post. We do have one question from Fernando. He says,
hello, everyone. Will projects like Babylon be able to use ZKDA? Jack?
Yeah, I think Babylon tried to do a trust minimize layer on Bitcoin. The researchers
behind Eigen were the ones behind Babylon. And they came up with a different concept, not
trust minimization, but slashable security. So what they did was create a slashable
Bitcoin secured layer, where you could move Bitcoin over to that sidechain, and then also
use it to do smart contracts or anything like that. And the idea was anyone can tap into Babylon
and create their layer tools from there, right? And then bit VM kind of came after that, which
stepped up the game and said, no, we're creating trust minimize bridges and trust minimize
execution on Bitcoin. The concept of Babylon effectively has transitioned, well, Suriram took
it and did it in Ethereum. So the same concept of slashable security to do more stuff was applied to
Eigen layer, which is what what that one became. And we are employing the concept of Eigen layer
inside of Rolex to secure those Bitcoin services. So you get both optimistic and slashable security
to cover the edge cases. So a mixture of like Babylon and bit VM style put together. But the
same Yeah, the same solution that they're using on Bitcoin, you could definitely apply that concept
on Cisco. And we obviously the design space for these things are huge. And we don't have so many
hours in the day. But you know, we put our thoughts into I'm sure there's different ways we
can probably plug in and make new things out of that. Yeah, I think the idea with zkda is with zk
light client integration on the sender and receiver side of chains, they would be able to essentially
relay the validity proofs sort of in a mesh tying into our data availability protocol, which creates
sort of an interoperable data availability. Is that right, Jack? Yeah, I think we are with the light
clients, you're, you're trusting, you're trusting the light client, right? So it's not 100% the same
security as being on the blockchain itself. So so that's the takeaway. It's it's pretty good
security, but it's not the equivalent security. And if if Babylon is there with slashable conditions,
and they you can tap into that from a light client, then then yeah, you could make the next
step up on creating, like you're saying the mesh network, where you'd have interoperability
across the industry across all settlement layers, sharing the security of what we did on Rolex with
with the Eigen layer with the bridge service and the DA and you can share that across industry.
Actually, the DA is, if the DA is common, then you can actually share state and jump across from
one chain to the other, regardless of where it's being settled. Because the DA is the critical
aspect there to solve. If the if the data is common, then you should be able to jump across.
And if you if the security of the ZK light client is good enough, then you effectively can be doing
defy across many chains at once. And it's all kind of secured by Bitcoin slash ability slashable
security. So that's that's how we see that. And yeah, I think the light client thing, we're
definitely working on that with finality checks. Celestia took that a step further from a default
light client and they added the ability for you to slash right within the light client.
That's really cool to be able to slash. But it's again, it's because Celestia was always
meant to be cross chain. That's their only game is to be able to serve da cross chains.
They had to innovate there to really make it into reality. It's still never going to be as safe
as using the chain itself. This it's a slashable security, but not using the base chain itself.
So we think, you know, combine the concepts like that, we can make a really good light client at
our finality check with potentially any sort of slashing if we if you have a Babylon layer on top
that slashing into that light client, and you would be able to innovate and create something
really, really good, like 99.5 or 69% comparable security. And maybe the industry would be good
enough. And that would, that would kind of complete the picture of why we're calling this layer zero,
because we do want to not only just serve layers on top of Rolex, but serve other settlement layers
too, if possible. Ion bullets has a question about the Eigen bridge and ST BTC. He says,
how does this work? And why is it better than for example, T BTC?
You mean Thor chain, Thor chain BTC, or Thor swap? Yeah, that one uses MPC. And so you're
trusting that the at any given time, the MPC validators don't collude and steal all the Bitcoin.
So if there's like a million Bitcoin on there, and I don't think they're slashing on Thor chain,
I think it's just a traditional MPC system, a whole bunch of people that have a small part of
the key, and they all get together and sign and a threshold of them have to sign. And if they sign
on it, then you move your Bitcoin back and forth. This is different the bridge concept of bitvm,
or the idea behind bitvm is anyone honest person can can put their hand up and say,
think you're doing it wrong. The honest minority or the trust minimization is a step up from honest
majority security wise, and there's less assumptions. So it's a stronger assumption to a stronger
assumption mean weaker security to require the majority of people to agree, right? If only
one person has to agree, it's just a lot more secure. So that's why it's better. And the STBTC
is a concept that we are thinking, even with one of n, even though it's a step up, there's still
going to be edge cases around that, which I highlighted. And the rest of the edge cases
we want to resolve in our Eigen layer, we're saying with slash security, you can start to
eliminate some of these variables with pretty good security to cover the rest of the edge cases.
So you have the double spend protection with you potentially have double spend protection
and watchdog with trust minimization or one of n through something like bitvm. And then you have
the efficiency or the off chain challenge game done through zk with slash security behind that,
because if the person doesn't communicate, you can slash them. And maybe that's good enough.
These are the analysis analysis we're doing around the game about how it potentially eliminates the
edge cases. This, you know, it's really, really, it requires probably the bitvm team to say yes,
exactly eliminates all our intuition is that it will reduce the risk or eliminate, eliminate it
and be good enough for the industry to be like the next version of the next step up from what
what the current one of n or trust minimize bridges are for Bitcoin.
And a question from me. How far do you estimate that we are away from this Bitcoin
player zero solution being mainnet? Well, we've already like launched Rolex. So there's
even besides the whole Bitcoin thing, we've got a campaign coming out that is for growth
of that we were waiting for sort of the bull market period coming and then Cisco started
trending up. We thought this is the time to do it. And as it grows, we become more and more
aggressive this time, because we actually have a place for users to be compared to other previous
bull runs. So we're you know, we're as infrastructure, we're more ready this time to push.
And the Rolex has been live for eight months. Just the whole bridging was never around for
Bitcoin to complete our story, to be able to say yes, this is actually extending the
capabilities into Bitcoin. So we're always playing with our own island and assets within
our own island, you know, moving USDT and doing defy and this sort of stuff. And the story
becomes more complete, obviously, what because we are merged mind with Bitcoin,
to start sharing extending Bitcoin, that aspect of it, we have a team that's working on that.
And you know, the Eigen stuff is kind of already been built by the Eigen there. And it's not much
work to do that. And the the only other thing is probably if you want to serve it to other
chains, you have to do it like client, which we can also don't have to do that from the beginning,
we could consider their Rolex is sort of a super chain where people will be building on top of it
to start at least. And then the the the trust minimize minimize bridge, again, people are using
custodial bridges to bring Bitcoin over, we can start there and move that into a decentralized
trust minimize bridge in the future. The STBTC concept or yield requires a change in Syscoin
to forward the difficulty of Bitcoin into the EBM, that change would require a network update.
That is a very simple one, but when we'd have to coordinate for to start, we'd like to
create a proxy contract that wouldn't give out yield, it would just wrap your Bitcoin to STBTC.
After the update, the yield would start coming on its own after we update the contract.
And the Eigen layer stuff has kind of been already built, we would start with Eigen DA
probably to start. So to get like the basis of it is, is, you know, not that hard, it's,
it's pretty quick. And we're, we've got the team sort of scoping it out right now. And working
with different zk teams on the analysis of bit VM plus zk on the analysis of zk like client,
you know, the zk teams are fairly confident within a month or two, they can get us
solutions because the zk tech stacks are becoming really mature. You know, you could write code and
rust or go some of these other languages, and it will just convert it to zk. So we actually
have a call with one of the teams right now and have in 15 minutes, I think. So, you know,
we're pushing this, pushing this fast. And you know, it's, it's, it doesn't, it's not just
Bitcoin, there's a whole rolox sort of narrative being pushed, regardless of whatever we're doing
with with Bitcoin. But we just think it ends up being more of a Bitcoin narrative, because that's
kind of what we were envisioning the whole time when we first started this coin, and we evolved
towards with merge mining, we evolved with EVM and stuff, it was always pushing that narrative,
but we didn't have the bridges in place that we see now. Okay, yeah, thanks for thanks for your
thorough answers. And I don't see any more questions having come in. So you guys are more than welcome
to join our discord. We're always around. Someone from the team is typically always available to
answer any questions that anyone has. We covered a lot of ground in this space went into quite a bit
of detail. Hopefully it was enlightening for you guys. And thank you for joining. Make sure to
follow sis coin and rolox. Rolex l two is Rolex's Twitter handle to stay updated on news. We're
always putting out weekly updates. And again, thanks for joining. Look forward to us conducting
another space very soon. Thank you.