Welcome to L2 Unplugged. I'm your host Marik Kochevsky and today I am delighted to have two
very charismatic guests on the show. We have Ben Jones, director at the Optimism Foundation
and part-time comedic singer-songwriter and Kar Flourish, CEO at OP Labs and perhaps one of the
most positive and optimistic people I've ever met. We're going to have a really great chat about
optimism, the OP stack, public goods funding, and so much more. Now if you're new to the show,
L2 Unplugged is an ongoing series about key topics and trends on L2s, the modular stack,
and the Ethereum scaling roadmap. In every episode we invite the different guests from the Ethereum
community to have them talk about their thoughts and expertise on a wide range of topics in Ethereum
scaling. And as usual we are recording this live so if you have any questions please tweet at us
and hopefully we'll be able to include your question. Now in the last six episodes we've
had luminaries like Vitalik, Vankrad, and Justin Drake all from the Ethereum Foundation talking
about how Ethereum plans to continue to scale itself. We've also had Bartek from L2B to give
us a wonderful overview of what makes an L2 and L2 and how to think about its security.
And today I wanted to shift gears a little bit and jump into a specific Ethereum scaling solution
namely optimism and the OP stack and dig a little deeper into the technology
but also the really interesting ethos behind it. Now to do that we're incredibly fortunate to have
not one but two of the founders of optimism here with us to share more about their exciting
vision for Ethereum scaling and so much more. Welcome guys. Thank you. Thanks for having us.
Yeah I know it's a real pleasure really excited for this. Awesome so maybe you know just to set
the scene and you know I think most of our listeners are probably already familiar with optimism
but maybe there's a very few who aren't and again maybe just to set the scene
you know what is optimism and and how do they come about? Sure okay well I can take that.
Optimism of course, layer 2 scalability project, all of these things but if we go back I think
it really kind of speaks to what we're trying to achieve. So back in you know like 2018 or so
Jing who is another founder who is not here who's currently the who's the CEO of the Optimism
Foundation founded Plasma Group and me Ben Kelvin all started working on Ethereum layer 2 scaling
with you know trying to build out an open source protocol. We did a lot of you know plasma design
research and you know figured out a lot of the fundamentals for you know how do we scale
Ethereum because we we all came from the Ethereum scalability space. I was you know working on
ETH2 with Vitalik right before that and it was this whole you know journey of figuring out
you know how yeah how do we scale Ethereum. But we noticed that there was a serious fundamental
issue with the process entirely and that issue was that the people who were building out
that scalability tech were not the ones that were actually getting funded. They were not actually
being able to you know there was no real path to scaling up the effort of scaling Ethereum
because Ethereum did not have a public goods funding mechanism. And so what we did was we went from
being just a kind of research group building out Ethereum scalability tech in layer 2
actually forming optimism and with that it was not just a project to scale Ethereum
but also to fund public goods on Ethereum. And so that was the kind of big transition point
and that's when we you know started figuring out things like retro PGF and the kind of
whole flywheel of you know building out the super chain building out all of these ecosystems
and then also using the money that is transacted to then reinvest in the ecosystem and fund public
goods open source software in perpetuity. So that's kind of the crazy journey and it really
really has been a crazy journey. Amazing yeah I really need and you know I'm sure many of those
developers working on public goods are just really really thrilled that you guys
went through that journey and we're going to talk a lot more about retroactive public goods
funding later but before we transition to that topic you shared a little bit about optimism's
kind of journey. I think one thing along the way is was the launch of the OP stack. I'm kind of
curious again for those who are new to optimism what is the OP stack and how should people think
about it? Cool should I take this one Floss? How's my audio coming in loud and clear by the way?
Excellent excellent heck yeah yeah so what is the OP stack? Great question you know Carl mentioned
you know sort of the journey of being a non-profit doing research you know at some point in time we
realized that the roll-up design was one that really was the next evolution in Ethereum scaling
and it was time to go build it and ultimately what that has coalesced around is what we call
the OP stack right so you know most fundamentally or like at the most basic level the OP stack is
the code base that the optimism collective has built across an international community of core
developers that powers a bunch of layer two chains you know OP mainnet coin basis base
Zora network and so on and so forth you know so at a thousand you know level view the most
obvious thing to say about it is it's the code base powering these roll-ups.
I think if you go you know perhaps one step deeper or like if you want to get a little more
philosophical or down to the essence or the why right it's not just about building those
particular chains it's fundamentally about coming up with an architecture that can scale
decentralized block space without sacrificing security and ultimately the way that we do that
is this notion of sort of chain layering right that's where this term layer two comes from right
and the basic idea is that we can take a bunch of block space but secure it all in one shared
location right and that is the quote unquote layer one and so by doing this the goal is
ultimately to bring web2 level scale to web3 decentralized block space and the way that you
do that is you ensure that everyone is using one security model so the more chains you spin up
you don't you don't split the security that you have between them and so the goal is to make the
most secure the most decentralized most scalable block space I think that's like you know the
deeper origin important story of you know why we're building the OP stack in a fundamental level
and you know we already talked about this but I guess the last thing that you could say about
the OP stack that's worth noting is it is a proud public good it is MIT license anyone can don't do
crazy stuff with it even if it's beyond Ethereum you know whatever the case may be so that's the
last most you know most fundamental thing is it is probably a public good it is owned by the
community by the world by the globe and no one person are collective so yeah that's a bit on the
OP stack. Thanks Ben and and I think you guys were certainly among one of the earliest
LT stacks to to come out with this permissive license and I was kind of wondering if you could
share just a little bit more about about that kind of the decision behind it and then also
specifically what it means for how you want people to interact with it how you want people
to contribute to it. Yes so we have been building out MIT licensed stuff since really day one since
plasma group days right we were a non-profit building out open source software and this has
been absolutely core to our ethos why is that well if Ethereum if crypto cannot solve the public goods
funding problem cannot solve the like open source sustainability problem then we really have not
unlocked and like really realize the full potential of crypto why is that well because open source
is really a superpower it allows different contributors to you know not only use optimism
proper but to immediately at any time look into the code fork it off experiment with a new change
and then if you know ideally also upstream that back to the core software so that that kind of
contribution pipeline and permissionless innovation is incredibly important to actually achieving
the like superpower of decentralized protocols like you know taking over the world that that is
how these protocols will actually do this so how does you know to kind of give a bit of an
analogy to this process of you know constant change forking and then upstreaming you can kind of
think of it as a peloton so this is you know shout out to shout out to David Hoffman but
essentially what what is the peloton the peloton is like a real world thing where you know bikers
or or birds will kind of fly or or ride in a particular formation which blocks where the the
people in the front are you know cutting the air with their you know with their their bodies and
then the people who are behind those people are have less air resistance meaning that they can
kind of ride and not expend so much energy this kind of property is really nice because you end up
lowering the total friction of riding your bike and then if you need to you know you can of course
as a you know if you're in the peloton you can of course cut ahead and you know advance beyond
what the the where the peloton is going because it's not the fastest thing in the world but
you're now experiencing a lot of air resistance so this is kind of a nice analogy for what
it really means to have open source software to have open source standards and then what it means
to be able to kind of experiment and fork off because you can fork off but then you have to
maintain it you have to you know do a bunch of work we actually all benefit even if we're in
the middle of a race we're all benefiting from each other's contributions to the shared and open
standard that is you know the op stack and so this is uh you know the dream is essentially
we have tons of innovation that innovation gets gets upstream to the core code base that pushes
everyone forward and then i mean we'll again we'll talk about it later but then the the upstream
contributor gets retroactively rewarded for their incredible contributions so this like virtuous
cycle has been kind of i think this is the superpower of ethereum and the the superpower
of crypto more broadly um so it was it was very natural that we've been you know going that way
from day one well i love this i love this analogy uh this drafting off of um teammates
slash competitors i think really fits in nicely with kind of the coopetition mantra within crypto
i love it um and i think oh coopetition i haven't heard that is a good one i have not heard that
yeah it's uh it's a fun one um and it really does you know uh to anyone who's working in
crypto it really resonates um cool so okay so um we talked about the license and and i think
related to this um if you can if you look at the broader l2 landscape um you know there's many
different opinions about standardized standardizing to ethereum versus kind of experimenting with
additional bespoke features i'm kind of curious what what your take is on that
you want me to hit a flaw yeah you go you go okay yeah it's really it's really interesting right
um you know i think what you're getting at is like you know there's a balance and sort of
a balancing act that we especially in such a you know quote unquote wild west industry
are doing right and so obviously we just talked about how critical and you know of the utmost
importance it is to us and actually how it is ultimately i think a competitive advantage
however counterintuitive that may be to be giving away the code because it turns out
that when you give away the code people make it better and that helps you too right
of course there are trade-offs that come with making things uh better and you know especially
that's a hypothesis that you're trying to test right because not every hypothesis is going to
check out so there's ultimately a balance between the standardization uh and the security properties
that you get and the experimentation which is like the new features that you get right
and so ultimately that's like a very you know important tight rope for us to walk as a
community right it's very very clear i think if you look at the trends um of the industry
that the number of chains is just going to exponentially grow and grow and grow and grow
right and we've seen that many times before right we saw that in 2017 the number of tokens was
growing and growing and growing and growing right and then we saw it in um the previous bull run
where the number of DeFi projects and NFTs is growing and growing and growing and growing
right and not all of those things were successes right sometimes things failed we had a lot of
broken things there was a lot of money lost to hacks and that sort of thing and so ultimately
there's a needle to be threaded where we need to make sure that we don't like completely lose track
of the security of these systems because fundamentally building this scaling code and
making it very very very secure is very very very difficult and you have to model every change
that you make as an extremely uh high cost and like an you because every line of code you know
you should think of as securing potentially millions or even more you know amounts of money
right so ultimately there's kind of a trade-off we it seems like the case that we need to have
both we need to have some core secure standard and that needs to be the place where you can
go to have the true security and like the scalable properties that you're looking for along with it
at the same time at the periphery there should be a wild west of innovation right but it's a
important you know tight rope to walk there where we don't want to have too much experimentation with
all the money at risk at the same time we don't want to stagnate we want to be able to pull in
additional contributions so the goal of the okey stack is you know to kind of you know thread that
needle and provide the best of both worlds where we have a really strong standard and we have the
ability of anyone to take that standard and make it better and you know take on the risk that
comes with it you know so yeah that's kind of the trade-off and you've got to balance it
yeah and and i'll also have been a little bit here which is that it just because it we have
a standard doesn't mean that you cannot have customizations within that standard so let me
give a concrete example right now there is not a uh uh right now you can choose a you know the
standard op stack but we're trying to we're we're you know one of the things that you'll be able to
customize in the future is for or you may want to customize in the future is how your sequencer is
uh you know operates and so designing into the standard a standard api for customizations
is a process which essentially we expect to look along something along the lines of
first people begin experimenting with custom you know sequencer software let's say like you
know some kind of decentralized sequencing thing then after that experiment has run
now we have learned a huge amount of information about what api's make sense what are you know
what what what things do people want to customize what don't they need to customize how will this
affect security how can we maintain the security model and then within the standard we can build
in that api build in that plug ability and allow people to you know choose between different
standard i mean different sequencing uh you know customizations so it's this interesting thing where
forking you can customize anything whatsoever but you might break compatibility because your change
might affect the security model as ben was saying but as we build the op stack part of that
experience is going to be changing the op stack so customizations don't affect the security model
and therefore we can have this diverse ecosystem of different chains using different you know
sequencing software data availability layers execution environments even all these kinds of things
and we can really start to get the kind of benefits of both worlds the you know diversity
uh of customization but then the security and interoperability of standardization
yeah super important point and you know there's a buzzword that has kind of you know the almost
become a little cursed in subsets which is the buzzword modularity but it really is true right
like one of the key things um when when the collective basically rewrote the op stack from
the bottom up and sort of introduced it to the community one of the key goals was modularization
which basically is the notion that if you have good logical separation of the different components
of the code base then making these customizations and adding these new features that carl was talking
about become as like small of a change as possible and like carl said the ultimate goal
of modularity really is to minimize what the op stack is and maximize the amount of things that
can plug into that the amount of modules right and so that's like the long-term philosophy
for walking that tightrope is exactly what carl said you have to make a very small as
minimal as possible standard that everyone can share and everyone can have security around
and you build layers and layers of abstractions and features on top of that
yeah that's really elegant and and i think related to that you know as you guys when you
guys did rewrite op stack with the bedrock upgrade you moved towards a model where your
changes you ended up implementing just a very small amount of changes on top of gath
and and by doing that you've made it so much easier for the op stack to be both compatible
with ethereum but also remain compatible in the future as as gath updates just become so
much easier to pull those changes in and so i think that's certainly another really neat thing
that you guys have done that carl carl say the domain name oh oh oh my gosh i i don't know it
off the top of my head get dip op-gath.optimism.io tracks every single change in the op stack made
to gath it's going to be as small as freaking possible baby yeah okay i'm sorry i'm getting
nerd sniped i have to add another point here which is just that i think that this it goes back
to that whole like open source ethos that whole like contribution pipeline etc where ultimately
we don't exist as as ethereum developers right we don't exist in a vacuum we exist inside of a
community of tools and you know infrastructure and all of these different things that people have built
around for example the evm and this standard that ethereum has created and so it has been
incredibly important and we realized how important it was honestly by doing the wrong thing we went
from having a massive amount of changes and you know we were evm compatible just kind of breaking
things willy-milly to realizing that the second order impact of making all those changes
is in is basically alienating the entire community and increasing the workload of supporting the
software that we're building for all of these open source you know or all of these tools and
whatnot massively and so it turns out that really we can't think of ourselves in as even
if we're building out a kind of new standard for layer 2 scaling we can't think of ourselves as
alone in this process we have to think of ourselves instead as essentially stewards of a
standard that is far larger than just one community one ecosystem and instead think of
our you know think about the downstream impacts on all the different tooling and so this is
this is where it kind of evm equivalence and minimal diff how where that all came from we
realized that we really needed to make the standards so easy to build on so easy to incorporate etc
and this is and we've seen this happen with like a huge number of tools that we get
incredible support for from you know foundry etc and then also all of these different
alternative clients anyway um so yes the the minimal diff stuff i think is like
underappreciated in how it relates and how it's deeply impacted by that you know open source ethos
from from the beginning i love it and and it really resonates with me as well i think in the
early days of cello we we also um we're excited to innovate and try new things and and we did
introduce a lot of changes and then slowly we've been pairing back some of those and just keeping
the ones that truly are you know very important and differentiated for for us and so uh that yeah
resonates that whole journey that you talked about um just resonates 100 um and ben you know
you mentioned uh in this next cycle we might have thousands of chains um which is an exciting uh
an exciting prospect an exciting thing to look forward to and i think that's a perfect segue
for uh talking about the super chain um what is the super chain
oh it's a chain that super baby didn't you hear
you know i talked about the um you know this sort of like second level uh click into the op
stack earlier of creating a bunch of um you know a bunch of instances of ethereum block space
that you don't sacrifice um by distributing the security between those instead you unite them and
have them share security in one location right and so that's obviously very related to this notion
of having many many many many chains right the super chain is ultimately a few things
fundamentally the end goal that it's working towards is really about bringing about an
interconnected set of these chains right so one of the massive challenges that uh the you know
crypto community as a whole faces even before you know even in the world of like
hundreds of chains or maybe tens of big chains like we see today even in this world right
it's clear that we have a problem as an industry which is interconnecting these chains together
right this is normally referred to as bridging and you know as as i'm sure many of the community
members know bridging is one of the uh most challenging security uh systems in the space
and literally billions of dollars have been lost to this industry due to bridge hacks right
fundamentally one of the key goals of the super chain is to take all of these op chains all of
these chains running the standard op stack and connect them and enable them to bridge in a way
that is fundamentally secured by the same manner that those l2s are secured themselves right part of
the issue with the proliferation of like the bridges and the bridge hacks that we see today
is that most of those bridges are built on top of these protocols they're like applications that
are connecting these different chains and fundamentally a lot of the security vulnerabilities
that we see come from that property it's the fact that the bridge security as an application
is lower than the chain security itself so the fundamental goal of the super chain
is to introduce the notion of a bunch of chains communicating not just at the application layer
but at a protocol layer and basically to leverage all of the systems that we've built
to share security um in one place for chains to also share security as those chains communicate
to each other um so that's kind of what the super chain is like the ultimate goal
is that we provide web to scale to a web3 uh block space and we don't have you know one week
waiting times to you know move from one app to another all of that should disappear it should
just be kind of like one substrate that runs the internet in a decentralized manner
um and it does so without making giant sacrifices on security or bridge latency or things like that
you know i think the um the other thing that the super chain is is that it is a solution to the
public funding problem oh i smell another segue i mean maybe we should pause on here
and talk about super chain a bit more right but the other thing that the super chain is
is the super chain is a set of chains which are all contributing back to fund the underlying
public goods standard that powers them all right so the chains like op main net and base give a
percentage of their transaction fees back to the optimism collective and the optimism collective
redistributes that to the public goods creators that made all of it possible so it's kind of
twofold one of them is like creating a highly secure interconnected network of chains that allows
us to replace the internet that we know today with the block space that we believe in tomorrow
and the other part of it is making that a sustainable process by funding the public
goods that are powering all those chains that's awesome uh and yeah i think we probably should
spend just one more minute on super chain or at least a few more minutes i think the hardest
part about today is not talking about retro pgf um because it's such an exciting and meaty topic
but um before we get there um yeah just on the super chain so um i think that's a that's a
beautiful vision and i think uh a lot of folks are really excited about it uh it might just be worth
double clicking a little bit and talking about how how it works um from when when i think about
a super chain i think about um the cost of transacting between these chains right um if
if we have to go through ethereum every time you send the message between one chain and the other
one l2 and the other um that's going to be expensive and so um typically these types
of constructions have a shared bridge where kind of all the liquidity that lives in in all of
these different chains uh is held in the same smart contract in ethereum so that's one piece
and then the second piece is um kind of validating uh quickly that these messages actually originated
correctly from each of these chains before taking action on other chains and so am i missing anything
of those is that also how you're thinking about it kind of these two really big
problems that need to be solved and you know how how are you guys working on on solving them
what's the latest cool yeah i'm happy i'm happy to hop in um so yes that is that is exactly right
there is a shared bridge which enforces the a kind of uh homogeneous security across all of these
chains that homogeneous security allows the chains to trust each other when they send messages from
chain a to chain b even from a to chain a to chain b to chain c and then withdraw those tokens
directly to ethereum so you don't we don't need to be doing all of these kinds of either rebalancing
or re-wrapping tokens over and over again to you know uh send value between these different chains
because they're on a shared standard so here i'll go into a few different properties that i think are
really really important for for for this so the first the first property is i just want to briefly
touch on decentralization this is something that we we kind of don't talk about quite enough
but um like as an industry but stage two if you know decentralization for for rollups is critically
important so what is what does this mean so why or why am i talking about it well it's because
if you're all on a shared bridge a shared standard if all of these chains there's huge amounts of
network effect benefits that you get from having that intra the interoperable and fungible tokens
between chains that those network effects are gained because everyone is using that same
contract that same standard but it's also critically important that well two things one
that that standard evolves and kind of upgrades and two that in that process users and developers
and all this stuff they are in control of their assets the definition of stage two roll-ups
is that there is always the right to exit for users or developers to move to wrap your tokens
from being on you know bridge a to using bridge b this requires you know delayed upgrades and lots
of infrastructure actually multiple proofs which we are you know in the process building right now
but key to that shared security is actually essentially shared decentralization
and shared control provisions that protects the rights of the users and of the chains
so that's the first that's the first really really key thing even when using a shared bridge
the second thing is that today these bridges are incredibly slow bridges they take you know around
like 10 minutes you know there's some that you know will actually send you your tokens even faster
etc but the really cool thing about having the bridge as ben said be built into the protocol
is that you are able to lower that latency and actually it you know increase the security that
that's the whole other thing but you're able to lower the latency to at the you know in the
extreme we we obviously it's going to be a bit of a a ride to get there but at first it's
you know maybe 10 minutes then it goes down to three minutes then it goes down to you know
seconds and then we there are it is very uh getting to that kind of holy grail of even
you know intra-block communication between chains is totally a thing that that is possible
at the protocol layer so all of these kinds of things come together where we have high security
and low latency for the cross chain messages and that those primitives give application developers
the ability to for example deploy truly cross chain native applications that uh you know
coordinate assets across the entire super chain and uh you know it's so so it'll be
it'll be a fun ride and i think that hopefully that's some good technical uh detail for you
i you know i i'm just quite candidly stealing this prediction from carl but uh but carl sorry
i'm going to spoil it what carl said about writing multi-chain apps cannot be understated
right now if you are an application developer even if you're building on something that is
as standardized as the edm the reality is that there are a bunch of chains that you might want
to go and deploy to and the reality is that for every one of those chains pretty much you
have to go in and like look through the idiosyncrasies and the changes that have
been made on that particular chain to make sure that your application is safe to deploy there
and you know and moreover those applications may not be able to talk to each other because you can
have this like contagion risk if one chain security breaks and it's talking to an application on a more
secure chain so i think the the like extremely slept on vision that carl has that because
extremely stated you know earlier is basically eventually that model is going to look very very
different eventually application developers will write one smart contract and that smart contract
will be like at least counterfactually basically you can think of it as being deployed across all
of the chains in the super chain at once and it should immediately function on all those
and it should immediately be able to communicate and do all of these things so like this can't
be understated like the failure mode that we have now where developers are like reasoning
about all these chains even though they're just the edm and it's supposed to just work
is totally backwards we need to get to a state where application developers write their application
once and that application can be used by anybody on any chain under the same conditions and with the
same security super super important exciting and carl you mentioned intra-block bridge i guess
latencies and so when i hear that you know to me that that sounds like you're talking about shared
sequencing you know we had justin drake and ben fish on the show earlier you know talking about
shared sequencing and i know that you guys are also working with espresso and ben on a decentralized
sequencer does that mean you're also looking into shared sequencing and you know is that is that how
you're looking to accomplish kind of those intra-block latencies yeah i think i think that you
it is it is fair definitely fair to say yes but the i think that the the keynote is the
the goal of quote unquote shared sequencing is i think the most critical and the most important
ultimately when we are building out these chains which have dependencies on other chains
and we don't wait for the data to be committed to ethereum to realize those dependencies in other
words we say i send a transaction using sequencer a that emits a you know a message that's going to
sequencer b's chain and then i play that uh the message on sequencer b's chain if that process
is happening before it is committed to ethereum there exists a need for the sequencers to coordinate
in some way to ensure that all transactions that are being uh committed to before they hit ethereum
are going to land on ethereum the same way they were committed as in there will not be any
equivocations so that is fundamentally the kind of that is the meat behind shared sequencing
but i think that the and but the way that we achieve that is i think going to be you know
maybe it may be very um uh hopefully as minimal as possible again it's all about the minimal diff
it's about the you know simplest solution is the best solution so that we can push forward
the industry one kind of inch at a time and that is that's i think that we we can do that
by isolating the exact problem which is late low latency sequencer coordination and then coming
up with the simplest solution to that um so it's not like shared sequencing is a particular
you know very well-defined thing yeah i think this is a very interesting like maybe counterintuitive
um completion that often occurs or it's intuitive to conflate these things but you know i think
what carl's getting as the difference between them you can have shared sequencing that is
centralized right what carl the fundamental thing as carl was saying is about the coordination
of the chain's sequences and therefore of the chain's sequencers but that and that can happen
through a decentralized network but it actually is that the decentralization is actually not
the property that gives you the shared sequencing you could have for example two centralized
sequencers on two chains and and those those sequences could be different and if you give
them a coordination protocol to be able to communicate and to be able to trust each other
and not equivocate like carl said that is actually the thing that will get you the low
the lowest possible latency um coordinate coordination of sequences so it's interesting
decentralized sequencing is obviously super super super important for the resilience and the uptime
and the fairness and so on and so forth but interestingly there's a different dimension which
is the shared sequencing and you can have shared centralized sequencers or a shared decentralized
sequencer and both of those things just by being shared accomplish the latency properties
that we're talking about yeah 100 and actually ben fish and i spent a good amount of time in
in his podcast um talking exactly about this difference um cool so i think um
i think that was i think a really great kind of overview of the super chain and i think um
related to the super chain is you know something that you guys put out called the law of chains
um i think last july you you guys posted a kind of v 0.1 of the law of chains uh which was kind
of rather long um and so just for the benefit of this audience um you know um what's maybe the
teal vr from that post and and also you know how how is it enforced yeah totally so you know this
is um this is you know i think the connection to what we've been talking about earlier is
exactly what carl said about the balance between having a shared homogeneous security model being so
important to keep bridging secure and not to have a bunch of bridge hacks and to give it the good
properties that we want and at the same time like we need the ability for these chains to evolve
over time right make no mistake the scalability landscape will continue to evolve for you know
easily a decade to come right like improvements are going to keep happening you know just like
they've been happening on happening on ethereum for the past decade they're going to keep happening
um you know for the next so what that means is that we have to strike a balance right we have
to have a way to be able to incorporate those improvements into the super chain and we also
need a way for the super chain to retain its homogeneous security properties that keeps the
bridge secure and so ultimately what that means is that you need some model of a shared governance
that allows the homogeneity to be preserved and for the improvements to be incorporated
everywhere at once right if an improvement is incorporated in only one spot you've broken
homogeneity now you've introduced bridge risk again we talked about the importance of because
of that minimizing the part that needs to be standardized modularizing and making pluggable
as much as possible etc etc but even at that core kernel there's going to continue to be
improvements for a decade to come ultimately what the law of chains is is the you can kind
of think of it as like the constitution or the framework for the the like the the rulebook
for how we should go about making those improvements right and another way to think about it is almost
like a bill of rights um for the people in the super chain and when i say people i really should
say the stakeholders right one of the things that the law of chains does is it enumerates
the different stakeholders you have users you have developers you have the people running the
various chains within the super chain and each of those should have their different
rights right of the right to exit what that call talked about is super super super critical right
the the right to economic sovereignty right it should never be the case that
there's an economic engagement between a sequencer and a chain that suddenly one of
these upgrades comes in and removes their ability to have that economic engagement
or violates their expectations and so on and so forth so that's kind of what the
law of chains is the law of chains is a set of rules and the playbook for how the collective
should evolve the super chain in a way that is fair and neutral and open to all of the participants
it's like a neutrality framework a bill of rights it's been it's been called a lot of things
then in terms of enforcement the the primary way that that is enforced and the primary goal that
we introduced with the law of chains is for optimism governance to be the steward of those
changes and you know you asked for TLDR so i won't go too deep into the two house system where token
voting is a nightmare and so we have a citizen's house which is one person one vote to counter
balance that and and also fund the public goods and so on and so forth but ultimately the law of
chains is about being able to evolve the super chain in a way that has ground rules and
expectations for the very valid and sovereign economic participants within the system
really neat and you know i think one of the things you mentioned earlier that's also part
of the law of chains is this commitment to public goods funding and and so i think this is probably
a great time to to finally get to i think the topic that many of us are excited to chat about
which is public good funding retro public goods funding you know i think you've made a commitment
and have started to spend already a portion of OP mainnet sequencer fees on retroactive public
goods funding all of this is under kind of this really beautiful vision for kind of this future
that you're calling ether's phoenix you've just done your your last round round three where you
spent you know put out over a hundred million dollars worth of OP on public goods yeah really
really excited to dig into this maybe just to start you know what carl you mentioned a little
bit about kind of the origin for kind of this need and and kind of the the journey that you guys
um um took to get here i'm kind of curious um you know looking back now um did you accomplish
what you you guys were hoping to accomplish you know how's it going wow well i will say
i mean unfortunately accomplishing what we hope to accomplish i think is going to mean
scaling you know blockchains to the point where a vast majority of internet applications are
provable decentralized protocols and um there is a the most impactful economic flywheel in the
you know um in the globe but at least on the internet is is uh you know is the the kind of
flow of value through these protocols that reinforces human values and and uh public goods
so we're not there yet unfortunately i'm very excited for us to get there day by day but you
know i'm glad that the story continues so that we can keep having impact um but anyway
it the the kind of uh where we are in that story though is absolutely just i mean honestly beyond
my beyond my uh expectations at least um where we are actually seeing the beginnings of this
flywheel start to happen so we were as you said we're on our third retroactive public goods
funding round what is that actually what is this concept just to give a tldr most grant programs
that fund public goods are proactive meaning that you have a centralized body that is giving
out grants to individual grant recipients based on some decision making algorithm the problem with
this is that we can't predict the future it's really hard to know what projects are going to
you know actually build you know impactful public goods and what projects won't and additionally
it also is a lot more permissioned i personally will say that i hate the ux of asking for grant
money i'd rather go out and build my idea show that it works get the adoption and then
after that point through retroactive public goods funding where the retroactive is that
it is it's a retroactive grant meaning that i've already i'm a developer i built my my thing and
now the retroactive public goods funding mechanism will fund me for my impact and it will not fund
me with the expectation of future work i could take that money and i could go live on an island
it is totally fine why is it totally fine because we are talking about the second order effects
we're talking about the iterated game it is not quite as simple as you know a tit for tat kind
of uh you know you know gifting of money no instead this is all about rewiring the expectation
of profit to come from building out impactful public goods a lot of the public goods in our
space are doing actually are generating far more value than some of the most profitable projects
which is definitely a failure mode it's not a failure mode for all things you know profit today
does not mean that you're not having an impact as well but it's incredibly important that we do fund
those projects that really are not able to profit directly but still are being wildly impactful
and so this is kind of this this is the beginning we're starting to see more and more developers
see that they can sustain themselves on retroactive public goods funding and they're starting to
bet on the fact that next round they're going to continue to get funded they're going they're
going to be okay and that is an incredible thing because the more people we convert and and we
have to show this in practice right it can't just be you know hopium it has to be genuine real money
that is coming to fund public goods but the more we can make the credible commitment to retroactively
funding public goods the more public goods we will see in our industry and that is going to
i believe be the like being massive unlocked for scaling up the innovation and scaling up
the genuine positive impact of crypto broadly so this is this you mentioned ether's phoenix
this is this kind of you know this idea of an attractor you know a a superstition or not
superstition hyperstition which brings us towards a world where impact equals profit where essentially
because everyone is expecting that in the future we will fund public goods more effectively that
the sooner that you build the more impact you can have and therefore in that future you will get
rewarded so this is kind of the rationalist god and and i do hope that you know someday the
the kind of vision that i laid out in the beginning and that is basically ether's phoenix
um that we can actually realize that but it is an incredible thing to see us you know starting
to actually you know in a small way within a small ecosystem um build that build that flywheel
really cool um definitely resonate resonates resonates uh hugely with me um you know i think
in cello we have a portion of our transaction fees go towards programmatically buying and retiring
carbon offset credits on chain and so if you're interested in you know finding climate change
and if you have a new um voluntary um carbon market asset that you want to bring on chain
then you can retroactively um you know have the the chain programmatically buy that asset
uh and retire it you know we call this ultra green money and so yeah the topic is just
really near and dear to my heart um you mentioned impact and profit briefly you know you guys have
this i think really interesting impact equals profit framework that you're using is it worth
just spending a little bit more time digging into this yeah so and i can also tie it in a little bit
even the the carbon credits thing which is really really awesome so i think really what we're trying
to do and this is what you know carbon credits is trying to do with uh uh you know uh to fight
climate change and reduce the carbon footprint carbon footprint it's to create a market a market
you know market demand for a quantifiable you know positive impact so that is impact equals
profit is really a dream like a vision like a long-term goal where we are in a world where
if you have a positive impact the amount of money that you will that you will receive
is proportional to that impact so there's this is this this that that that process if if that were
to be the case through some retroactive you know mechanism where you don't have to ask permission you
just receive the money because your contributions are are are valued then it creates market demand
decentralized market demand for impact just like there is market demand for reducing you know for
for you know reducing your carbon footprints and there that in that process we you know ideally
get to a point where this is just the norm and we have you know essentially solve the public
goods funding problem because so to kind of like bring it back a little bit public goods funding
we talk about this a lot and it's really hard to quantify and the problem is that if you are
going to give out funding to groups and to people you have no choice but to quantify it because
money is quantified you the moment that you give out money you have you have immediately quantified
your your your you know your values uh even if you don't want to you know say that you can
quantify your values because we just don't have we have scarce money and so by creating this
kind of framework of impact equals profit which you know of course is to stimulate that market
demand by creating that framework we are now able to kind of cut scope increase the specificity of
what it means to fund public goods and we can start to define impact what is actually an impact how
do we actually you know measure it you know how how who who gets to define impact ultimately
you know human beings should be able to define impact and then similarly you know how do we
define profit well i mean what if this you know this this team is profiting uh not you know they
yes they've had a they've built an open source repo but really they use that repo to you know
boost all their stats and they're actually being really bad actors and extracting all over the place
like you know that that's a kind of measure of their their current profit first we start with
their current profit and then you know we uh either will add more funding if they you know if
they're underfunded or maybe we don't add any funding because they're already uh you know really
profitable even if they've had a bit of an impact so this is this is kind of where we're trying to
right now we're in this early phase where we are we have the frameworks we have kind of the
vision but we are missing a an institution really around funding and evaluating impact and evaluating
you know profit and figuring out how we you know compare all of these different public goods and
who we give them to so we're really in the beginning stages but that is like a core
you know a cornerstone of the the the equation if i can hop in real quick there's one really
compelling part of the the vision that i think is worth highlighting carl i think you got this with the
market demand but i'll just like say it again a little more explicitly one of the one of the
goals of retro pgf is the kind of tongue in cheek way to say it is like to free uh venture capitalists
from the shackles of capitalism um so you know we talked about the notion of you know it's easier
to fund things retroactively than proactively and that's absolutely true at the same time what we
see in the marketplace is the venture capital industry which is basically a high-risk business
who is there to predict profit into the future and generally what we see if we compare the vc
industry uh to like the grants giving public goods industries because the vcs are competing
in a marketplace and um they're they're all trying to get to like be guessing the next thing
it's effectively a decentralized marketplace of venture capitalists that are predicting and it
turns out that that's overall a better prediction mechanism for profits than upfront grants from any
one organization or any one place of course the problem is that today venture capitalists can
only invest in things that are extractive right they can only invest because that's that
extraction is the return that gets the you know investors um you know like their investors
returns but if we're in a position now where there's a known like credible expectation that
public goods are profit from their impact not from their extraction then that opens the doors for
venture capitalists to invest in things that are not going to extract but instead are going to
provide impact and that also solves some of like the upfront you know problems that we're talking
about right one question you might have with retroactive funding is okay that's great but
what if the the people building the code need to put food on the table today if we have an
advanced marketplace for this like the end state is that you can you should be able to go and raise
around a venture capital buddy with no expectation of how you're going to make money other than
you're going to release something that is helpful to the world and that is going to get rewarded
fascinating so if i'm hearing you right you could raise money and then you would get
if you created impact you could get funded retroactively and then you could share some of
that profit with with your investors exactly and that's exactly what we see in the world of
extraction and if we move that into the world of impact i think the effects will be huge
it's really cool um yeah and you know it's it's really fascinating to see kind of this flywheel
start spinning um and and i'm kind of curious if if you guys have had any any anecdotal or even
anecdotal kind of data um again now that you've done this third round and the last round was um
you know i think by all accounts like um a huge success um you know are you seeing
uh any evidence that uh people are now being swayed into building public goods whereas
otherwise they might not they may not have been yes yes so this is i mean we we've done
various surveys to see if you know people feel more confident in building the open source software
that they're that they're contributing to now that they know they have this you know retroactive
public goods funding uh source of money and it's you know the answer is is for at least for some of
them is yes and so that is incredibly satisfying to see and it's another thing that another
thing that's incredibly satisfying to see is just to hear the stories about people who are
receiving this retroactive funding money that are now doubling down and reinvigorated and excited
to be contributing even more impact to their project they don't have to reinvest that money
into their project to make it better and more impactful but so many people don't take that
money and go live on an island necessary and they don't go to an island you should live on an
island you know it should happen right you need that that was something jodes said he was like i
want to normalize uh the geth team getting lambos or something like that from their public goods
funding because it is important right we need that carrot and that's just like that's how
things get done in in our in our world but at the same time it is really moving to see
people who are not just saying okay this is a one-time thing i'm gonna go buy my lambo
but instead are saying no i recognize that this is the beginning i got a little bit today
but wow i can if i keep contributing if i double down on this project my passion
that i believe is impactful and i'm gonna do it for the right reasons and i'm still gonna be
able to make profit from it wow that that is like that is literally the world that we wanted to live
in in 2018 when we were building out open source software for ethereum we wanted to believe that
that would happen we just knew that it wasn't going to and so you know now a few years later
being the being part of the system that is realizing those dreams for for basically us's
back a few years ago is just it's amazing it's an amazing uh place to end i think what a uh
what an inspiring um story um for folks who are interested in learning more um where where should
they go optimus.io optimism.io slash vision if you want to hear the impact equals profit in a
really aggressive way docs or community.optimism.io if you want to come get involved and read the docs
github.com slash ethereum dash optimism slash optimism if you want to start diving in and
making those contributions to the op stack yourself any anything i missed carl yeah well
we just got that at optimism true true follow us on twitter oh i mean x oh you're right i love i
love the uh the extra fast voice you just did there ben it's like uh one of those um disclaimer
sections in in a tv ad oh yeah i'm gonna become an auctioneer of public goods and it's amazing
wow okay that was an incredible uh conversation thank you guys so much for coming on the show
this was really exciting really inspiring um yeah once again you know this has been l2 unplugged
and if you like this episode come join us for the next one uh and we hope you have a really great day
thank you so much this has been awesome thanks y'all take care