Hey everyone GM GM we have two more speakers that we are
Awaiting to join as soon as we have them on we're gonna get started
So just enjoy the music. I honestly always wonder what am I gonna play for this space?
I just go to the safe option billboards chop songs 20
Cause every time that she gets close
Just picture everybody naked
She really doesn't like the way not really into hesitation
You take me places that ceremony
If you taste human, if you lay my decision,
baby, there's nothing more to me than...
There's nothing more to me than...
If we lost our minds and we took it way too far,
I know we'd be all right.
I know we would be all right if you were by my side,
and we stumbled in the dark.
I know we'd be all right.
I know we would be all right,
because if we lost our minds and we took it way too far,
I know we'd be all right.
I know we would be all right if you were by my side,
because if we stumbled in the dark,
I know we'd be all right.
I love it when you go crazy.
You sink all my inner bits,
because baby, there's nothing more to me than...
All right, let's hop into it.
And as soon as Henry and Peter Joyd will just jump,
I do want to start by welcoming our awesome guest.
This is Bob Bodily and Bones.
We got the two Bs up on the stage.
Welcome, guys. Very excited.
This is definitely a hot topic right now.
Layer 2s are on the rise,
and I think this is the first season
where I've actually seen them get the appreciation they deserve.
I'll pass it straight to Bob.
Bob, I'd love to hear about what you do,
what's going on in your world,
and then we'll pass it to Bones.
Hi, yeah. Can you hear me okay?
Awesome. Just wanted to make sure.
Super happy to be here. Thanks for having me.
I'm Bob Bodily, CEO of Bionic.
Bionic is a Bitcoin ordinals marketplace and launchpad,
so I've been building on Bitcoin for the last year.
January of 23, if someone had told you that they were,
I don't know, building on Bitcoin,
it would have been kind of a rare sight.
But over the last year, we've seen with the rise of ordinals,
with the rise of BRC20 and DeFi on Bitcoin,
with the rise of lending protocols, with the rise of L2s,
I mean, Bitcoin is the place to be again.
I know a lot of people used to build on Bitcoin
and have since moved to other chains
because it was just too hard.
All of that is changing now, especially on the L2 side.
We've already seen scammy L2s do hypermarketing
and not very much substance on the tech side,
trying to capture mindshare on the Bitcoin side.
And I've also, I'm in touch with probably like 10 teams
building rollups of some kind on Bitcoin right now,
whether it's sovereign rollup
or whether it's optimistic rollup on Ethereum
with supercharged with Bitcoin tech.
It's a really exciting space right now.
So yeah, that's what I've been doing for the last 12 months
is 100% of my time deep diving into everything Bitcoin,
which is crazy because who could have predicted
that we'd see such interest in Bitcoin
beyond a medium of exchange or store value.
Thanks again for having me here.
Of course, very, very cool.
I applaud Bitcoin builders.
You know, oftentimes you're like Bitcoin is a gold standard.
Bitcoin is, I don't know.
It's almost like it's the main thing in crypto to put it so simply.
And then oftentimes we hear people say,
well, there's nothing happening on Bitcoin.
You can't build on Bitcoin.
And I think that's where builders like you come in
who actually bring utility to Bitcoin.
But yeah, I'm really interested in getting deeper into that.
Bones, passing it to you.
Everybody calls me Bones or EVNFT.
Head of growth at Tsunami Finance.
We are a spot margin protocol in the mantle ecosystem,
which is another Ethereum layer two,
partnered heavily with Bybit, very, very close with them.
And that's like one of the big, big things about the layer two
that I think has really gotten its early traction.
We used to work in the Aptos ecosystem.
So Tsunami was actually the first margin protocol on Aptos or SUI.
So kind of like the first one out of that whole move wave.
But we since have sunsetted that protocol
and moved fully to layer two solutions on ETH.
The biggest reason behind that is mostly just user
and liquidity concerns, right?
There's actually not that many users
and a lot of these newer layer ones, you know,
not that much liquidity either.
Those are kind of like the biggest concerns,
I would say, for users kind of like finding PMF or sorry,
protocols kind of like finding PMF and then ultimately success.
So yeah, that's kind of like why we are back
Our teams worked on Arbitrum, Solana, Luna, you can name it.
So we built on many, many different DeFi ecosystems
And I think what we've came to the consensus now is that
just ETH is the main place for liquidity.
So Ethereum, everything EVM, the layer two solutions around that.
Yeah, we're definitely bulls and we think that
this cycle is going to be a very, very good one
for all layer two solutions.
Excited to also dive in deeper into what you're working on.
Here is Peter joining us from Mangata Finance.
How are you doing today, Peter?
Just please intro yourself to the audience
and what you're building currently in the space.
I'm one of the co-founders of Mangata Finance.
We're building an omni-chain ZK roll-up.
We're taking a bit different angle on the L2 space.
So we're building this application-specific roll-up
that is focused on cross-chain swaps specifically.
And it's an L2 that is simultaneously connected to multiple layer ones
or it can be even as a L3 connected to other L2s
like Arbitrum and Optimism.
And we help people transfer value in between blockchains.
We took a different angle from this space
because usually L2s or roll-ups are used as a performance enhancement,
But we took some things from roll-ups
like escape hatches and protected deposits
and used that for protection of the liquidity
where users have guaranteed withdrawals from the solution.
And we are basing our roll-up.
It's a ZK-type of roll-up based on star-course technology
that is tapping into the Eigenlayer security
for various slashing conditions
to ensure certain things like MEV prevention
and ensuring general liveness of the protocol.
And we are launching very soon.
I'm very excited for your launch and congratulations.
Oh, just some feedback coming from your mic.
Yeah, congratulations on getting to the point of approaching a launch.
I know that's where everyone's super bootstrapped and busy.
Next, we have Sarvesh on the stage from Veracity
Honestly, Sarvesh, I don't know where to start with you
because you are working on so many things
but please introduce to us your favorite things
that you're working on right now.
We are building a gaming ecosystem called 3XP.
Not exactly in L2, but the entire concept of side chains
So yeah, it's something I would say which is part of our broader product roadmap.
And once we have the users,
it's something that we definitely want to do
because we want to be a payment settlements layer
which kind of gets a lot of benefit of side chains.
So yeah, excited to see how this rolls out.
Thanks for joining us, Sarvesh.
For all of you that are joining the space, welcome.
Today, we're going to be talking about the rise of L2s.
But before we hop into it, go ahead in the bottom right of your screen,
share the space, get your friends to join.
With these mega brains from Web3,
also, if you have any questions regarding the protocols they're working on,
any questions regarding L2s, please drop them in the comments.
We do have SKL tokens to give away to a few listeners.
But getting into it, for those who are not familiar with L2s,
L2s essentially are networks that are a type of secondary infrastructure
built on top of existing blockchains like Ethereum and Bitcoin.
They're addressing the scalability and performance limitations of these
networks while still maintaining security and decentralization,
which is what attracts a lot of us to the space.
In simple terms, L2s make Ethereum more scalable.
In the case of scale, it's free.
In 2023, it was the year that L2 Solutions saw serious interest.
L2B is a blockchain analytics platform,
and the combined TBL of all L2s registered at an all-time high of 20 billion.
And that figure is growing rapidly.
As I said in the beginning of this space,
L2s are finally getting the recognition they deserve.
And something we like to say here at SKL is we don't build the products you use.
We build the products that make what you use better.
And so it's like a hidden technology that makes the games you play faster.
In addition to the TBL increasing,
the number of L2s is also on the rise.
I'm sure everyone on the stage has seen so many new ones that are popping up.
Some of them survive and some of them don't,
but that's just the nature of startups.
So today we have these distinguished guests that are going to be answering some
questions to give more insight to web for users
on what's happening in the L2 space and also to get your opinions.
Bob, what do you think were the factors that led to the rise of L2s in 2023?
Yeah, that's a good question.
I mean, we've been seeing a gradual rise over the last couple of years
as technology has matured.
L2 beat is essentially like the front page of my browser.
I refer frequently to L2 beat.
It's one of the best resources for layer twos on Ethereum.
If you haven't seen it, you should definitely go check it out.
And I think part of the reason why L2s are so appealing
is because whenever we get lots of transactions on a busy settlement layer
on a layer one like Ethereum or Bitcoin, whenever fees go through the roof,
people naturally want to find ways to scale their activities
and not have to pay $50 to $300 in network fees or gas fees.
And it's a natural extension to go to some other layer
that is built in a way to facilitate trustless bridging, trustless interactions.
It's a natural extension of the base layer.
I would say we're not there yet.
Not there yet, meaning if you go and look on L2 beat.
In the most pessimistic case, you could argue that all L2s
are still just multi-sig base sidechains.
But in the best case, you could argue that they're all progressively decentralizing.
And soon, I don't know whether that soon is months or years,
we'll have these trustless extensions of Ethereum or Bitcoin
that really scale the kind of things that we're trying to do.
And so, yeah, I mean, we've seen some interest, like you said, from 2023.
Well, in some cases, I guess it has been kind of crazy,
but I'm expecting it to just continue to accelerate.
There's some questions about value accrual.
Does value accrue to the L2 token?
Does it accrue to Ethereum itself or Bitcoin itself?
I think there's still a lot of unknowns,
but definitely a very exciting space to be in, for sure.
Definitely, Bones, passing that right on to you.
If you could go ahead and just repeat the question one more time,
just so I can give probably the best possible response.
What do you think are the factors that led to the rise of L2s in 2023?
Yeah, yeah, thank you so much.
Yeah, I think we've been building up to this for a while now.
I think it's pretty evident, just from a user's standpoint, right,
that scaling solutions will probably be the first thing users kind of go to
when Ethereum kind of sees a bull market this cycle.
It's going to be pretty hard to imagine you see base end users
participating on mainnet for their daily DeFi, NFT,
and any sort of tasks, right?
So I think it really is paving a way for this kind of layer 2 bull market.
If you notice as well, all the new layer 2s that are sprouting up
and the resources behind them, a lot of large exchanges, a lot of large funds,
it really just does make sense from a liquidity and user perspective to kind of see that.
I think it is interesting to see Bob's perspective too, right,
kind of talking about it with Bitcoin.
I'm a good friend of BitGod, so he's always telling me about everything
they're building over there.
A lot of the solutions that may be arising with layer 2s on Bitcoin
may be more nuanced in the sense that they need things like
different smart contract alternatives and stuff that they can't achieve
on Bitcoin natively itself.
So I think that there might be a lot of reasons, some more technical,
some more user PMS-based, right,
so then we can have successful long-term scalable protocols
and just ecosystems, right?
But yeah, I think there's a lot of reasons contributing to the rise,
but I think most definitely and most certainly we will see
kind of like this layer 2 bull market rise really, really quick
as soon as Ethereum and everything EVM kind of becomes the hot topic again in crypto.
I'm curious Bob, what is the Bitcoin equivalent to EVM?
Yeah, so currently on Bitcoin you have Bitcoin script
and Bitcoin script is somewhat limited, very limited actually.
There is a recent development on Bitcoin called BitVM.
BitVM sounds like EVM, it's actually nothing like EVM.
It's very limited, you have, it's a way to do arbitrary compute on Bitcoin.
You could compute anything theoretically if you had enough memory
and enough time and enough money, but very, very limited.
So there is no EVM on Bitcoin.
I mean you have very limited Bitcoin script,
you have people trying to push the envelope with BitVM
and you have people trying to essentially get the ability
to have some kind of opcode or Bitcoin upgrade to do a ZK verify.
You could imagine if we had like an op ZK verify opcode on Bitcoin
you could now start to do trustless L2s on Bitcoin itself.
So some people are arguing for different upgrades to Bitcoin.
Some are arguing for op cat.
If you've seen what the Tepper Wizards are doing with their quantum cats,
some people are arguing for CTV, which is covenants,
just more programmability essentially on Bitcoin.
But yeah, that's the two minute version.
And would you agree with, I think Bones your argument was that
we're going to see a big layer two bull run
as more people realize the necessity for EVMs?
Yeah, I think just scaling solutions in general, right?
It's very, very evident that like Ethereum mainnet
isn't the most optimal thing for end users participation, right?
And I think it's very, very clear that kind of like this growing layer two meta
will be a lot better for user experience.
So with the Bitcoin perspective, it is very, very interesting
because it's more of like a necessity for Bitcoin enthusiasts
and people that want to build on the chain to build out
maybe a competent DeFi ecosystem or like stuff for evolving NFTs, right?
They're going to need solutions that have smart contract alternatives
and whatnot built upon them.
So yeah, I think that the differences for why layer twos may be needed
for the two different chains, right?
May be different, but at the end of the day, I think it all arises
because people want to participate in crypto and crypto ecosystems
more than just buying and selling the token.
So it is very, very interesting.
I think overall what we can agree is that we will see
DeFi continue to grow on all chains.
We will see NFTs hopefully continue to flourish on all chains
and yeah, it's honestly pretty exciting to see what could probably come
out of the whole Bitcoin thing.
So Bones, and I think you gave an awesome perspective
of why L2s have been attractive to users.
I want to loop in Sawyer here, who is an awesome dev over at scale.
Sawyer, from a developer's perspective, from a technical perspective,
what is the appeal about L2s?
I think, you know, the change in landscape as a developer
is you're always looking for the way to build your platform successfully
and grow and, you know, as the landscape of Web 3 and blockchain changes
and things get, you know, expensive and they get cheaper, et cetera,
from both a contract appointment perspective
and a user engagement perspective, right, when they're actually calling contracts.
It just becomes very difficult to have that sustainability
and know that you can succeed in the long term.
And so I think the rise of, you know, this alternative narrative of L2s
or these alternative scaling solutions has just been all about,
well, let's find a way to give ourselves a platform
to build in a sustainable manner without having to sacrifice
and make all these trade-offs that ultimately harm our end users.
Interesting. Sarvesh, if you want to hop in and add to Sawyer's point.
Sawyer pretty much had it, I would say, hit it on the head.
So when we kind of build things, I would say, as developers
or entrepreneurs or even companies out there, right,
we want our tools to have something called this ease of doing business.
While I would say even adapting to all the consumer processes that we have internally.
L2s kind of make having a lot of these custom processes much easier.
And I believe even from a developer narrative, right,
people have exhausted the means to kind of, you know,
just keep having those broken bridges every time you want to do something out of the box.
So I believe a lot of these, I would say, area-specific L2s
that are popping up, like you have a lot of these around RWAs
and a lot of, I would say, NFTs as well.
So it just makes the consumer journey, I would say, more seamless.
So I definitely see a future wherein, like, you know,
you would have a purpose-specific L2 for almost everything.
Definitely. Also, by the way, I want to keep this conversation very open.
Raise your hand or even just unmute yourself and chime in wherever you feel necessary.
Peter, I wanted to pass it to you.
I wanted to get your perspective on what you think is the reason for the rise of L2s in the past year.
I think it's a continuation of Long Story, you know.
I'm in the space for quite some time for, like, since 2013.
And you could see a rise of alternative layer ones in, like, 2015, 2016.
And it was always because of some performance bottlenecks on the existing layer ones.
But now we have came up with a way how a new blockchain that is a roll-up,
which is L2, can somewhat inherit security of its original L1 blockchain
and can provide much better user experience
or can provide much more alternative economic systems to the end user.
So I believe that layer ones will end up sort of a, let's call it B2B
or kind of settlement type of platforms.
And the layer twos will be more user-centric,
where you can, as other guests have mentioned, that they will be more domain-specific.
So you can have a DeFi-specific layer too.
You can have NFT-specific.
You can have something like subscription models for trading,
where people do not need to pay for gas,
but they are just paying some subscription for a week
and they get some guaranteed throughput.
So there are so many various verticals that can be explored just thanks to layer twos.
So I think it's a logical development of the space,
and it's a way how you can scale the layer one architecture.
The thing is that the layer twos on Ethereum and on Bitcoin,
they are pretty competitive to all the alternative layer ones,
because why do you need an alternative layer one
if you can do everything within Ethereum space, right?
You get the network effects.
You are much closer to where is the liquidity
and you are within the existing technology stack.
You're using Metamask, for instance.
So it's much better to stay on L2s than to go for alternative layer one.
And actually the biggest confirmation of this paradigm
is that Bitcoin is going into that direction as well,
which I love it because Bitcoin was so very conservative over so many years.
But now we can see this paradigm shift that even Bitcoin is going towards
and it's accepting this paradigm.
So I think this year will be huge for layer twos,
and we will see much more.
And I'm not concerned that much that there will be 1,000 layer twos.
There could be 1 million layer twos.
And I don't think it will be a problem.
It will be just a net benefit for the end user at the end of the day.
Yeah, I guess kind of a question thought that I would love for everybody to explore
because I think we're starting to see this.
You know, layer twos, as everyone kind of chimed in and agreed with,
are this kind of like natural next step because it improves the general,
I guess we'll call it scalability, right, of this blockchain infrastructure
and it opens up these more stable operating set ups for businesses,
makes it better for the end user, et cetera, et cetera.
But what about when a layer two falls into the same trap that a layer one did,
which is it's not fast enough.
It still has super high gas fees or it's very variable.
What is the solution that we can explore as developers
to avoid being in situations where we choose an L2
or we choose the scalability solution,
then all of a sudden it's getting rolled back
or finality is taking hours and things like that?
I don't think it's going to retract that much back.
I hear your concerns and, of course, layer twos can make a full circle
back to layer one type of problems,
but because you can employ so many new approaches like different virtual machines,
you can employ different gas models, different economic environments,
different MEV preventions,
and even if you employ some consensus type of mechanisms for roll-ups,
it's not going to be such huge bottleneck on the performance
as it is on the layer one.
You can even use some alternative data availability layers.
It is true and I actually expect that a lot of the problems
that we've seen on the layer ones will be there on layer twos as well
and you can see them here or there,
but it's not going to be so problematic as it is on layer ones.
I still think it's a natural scaling of the ecosystem
and it's the right direction for the industry.
I think from my perspective, one of the potential problems with L2s,
and this goes back to the modularity thesis for scaling blockchains
versus the monolithic blockchain thesis for scaling.
The modularity thesis is, sure, let's use Ethereum as our settlement layer.
Let's use Celestia as a data availability layer
and then let's have an L2 that does all of the sequencing for us.
The modularity thesis for scaling blockchains is very hot right now.
It's kind of all the rage.
This is why Celestia has been doing quite well.
I think it's definitely an interesting approach,
but it's not just all sunshine and rainbows.
You lose some composability, you lose some interoperability.
If you think about the reasons why Ethereum was successful in the first place,
it's because of the composability and interoperability.
You have standards, NFT standards, fundable token standards.
You can easily interact within the ecosystem
and you have those kinds of network effects.
Then if you branch off into millions of different L2s,
I think you're fragmenting liquidity,
you're running into interoperability problems.
You might not be able to easily communicate across these L2s.
I know there are people working on these problems,
but there is a chance that it ends up...
Maybe we should just upgrade Ethereum L1 further
and get the kinds of scale that we're looking for natively on Ethereum.
I think this distinction between the monolithic versus modularity thesis
for scaling blockchains is still very much an interesting dichotomy or debate
that I think we will continue to have over the next couple of years
as we see how things work out with L2s.
Sawyer, did you want to close that thought before we move on?
Yeah, sure. I think they're all great points
and I think it's definitely going to be interesting to see where it goes.
I think, as with all technology, there's always trade-offs, right?
It'll be very interesting to see right now many L2s are relying on more centralized sequencers.
They've taken consensus out of play
and they just rely purely on that final finality or security layer from Ethereum
I do think it'll be just very interesting to see how things continue to evolve.
But I think it's also important for developers to actually voice their opinions
because I think, Bob, you bring up a great point about this whole modularity thing
and yes, that does potentially solve some problems in terms of our limitations at the L1 or even the L2 level
but it also brings within its own set of challenges, right?
Because now all of a sudden, as a developer,
you have to start making choices to where you deploy things,
what your threshold is for finality, security and things like that.
And so there's not really a silver bullet that solves everything
and so I think it'll be great to see developers getting more involved.
The developers building dApps getting involved to say,
here's how we want our experience to be
and hopefully the amazing infrastructure developers building these networks
can kind of lean on that and say, yeah, let's build things that make sense for developers too,
not just infinite scalability.
Definitely. Monolithic versus modular.
Maybe I'll put Sarvesh on the spot in simplest terms for the non-technical audience.
What does that even mean?
I'm not really, I would say, sure, I would be the best person to explain this,
so yeah, I'd like to pass, but I do have an interesting question for everyone, so later.
Okay, awesome. Sorry for putting you on the spot, Sawyer.
If you wanted to really simply put the monolithic versus modular, what does that mean?
I think the way that I would position it is that monolithic is going to be everything in one place,
meaning your state, your consensus, your security, your data availability.
Everything is all together. You go to one place to get it.
That's what you get, for example, if you deployed a smart contract to Ethereum.
You get everything in one place, but then you also have those trade-offs
of potentially congested network things being slower or more costly, et cetera.
Modularity is something that we're starting to see this rise of that term being used specifically,
and it just means this separation of components, meaning we can take data availability,
we can take consensus, we can take state, we can take all of these different things
and split them out into different technical products or locations,
and then you pick up on potentially more of the benefits from each piece
and ideally less of the negatives or the cons.
But obviously, again, everything comes with trade-offs.
In that case, as a developer, you may have to be building on three or four different tools
or technologies as opposed to one, but you pick up on maybe faster finality,
faster speeds, cheaper fees, things like that.
Awesome. Thanks for that. Peter, I saw you had unmuted your mic for a bit.
Was there something you wanted to add to that before we move on?
Just a quick one that a lot of the criticisms of layer twos right now, they are just temporary.
Of course, there is a problem of fragmentation of liquidity.
Of course, there is a problem of so many various new L1s that are not interoperable,
but it's just a matter of time when some interoperability standard will arise
and will unite the liquidity or will unite the layer twos.
Maybe something like IBC from Cosmos will be used for the layer twos.
No one knows, but I expect many contenders in this space.
In terms of the modularity or modular versus monolithic,
when you look at the real world, how it works,
it consists of many specialized businesses or specialized areas of life that works together in unison.
I feel that it's a natural development for the blockchain industry at the same time.
You never go to a restaurant that is serving all the foods in the world.
You are always going to a restaurant that is serving a specialized category of foods.
This is what is blockchain industry developing into, and I feel that it's just a natural progression.
I'm sorry, I should have raised my hand.
I was just going to offer a counter to that.
If you look at the development of the internet and internet protocols,
you don't have application-specific internet protocols that you interact with.
We have TCPIP, we have HTTP,
we have all of these standard protocols that everyone uses across the entire world.
The counter argument is the monolithic thesis for scaling blockchains is appealing
in that there are core standards that everyone across the world can use, regardless of where you are.
That's the counter. I'm not saying monolithic is the way to go.
I'm not saying modular is the way to go.
But there are pros and cons on both sides,
and we don't really know what the best way is to scale blockchains.
That's why we have all L1s and L1s and why we have layer 2s
and people are thinking about layer 3s.
It's because we're all trying to scale secure blockchains in a safe way for users.
Henry, welcome to the stage.
I'll go ahead and give a quick intro for you.
He's the executive director at Picasso Network and Composable Fin.
Thank you so much for joining us and making time up here.
I know one of the speakers mentioned IBC,
and I see that is what you're building on as well.
So go ahead and share your thoughts if you want to hop in.
Thank you. Thank you for the invite.
I'm sorry for the background noise here and excited to join everyone here.
Thanks for the layup or the perfect segue into IBC conversation.
We're very excited about the future of IBC
and how that could potentially serve as a TCPIP-like protocol for the blockchain world
to allow protocols to interact with each other.
In terms of the modularity and the narrative around monolithic or modular world,
we're pretty aligned with the idea that there will be many ecosystems that coexist.
We don't think that it's just going to be one Solana, one Ethereum.
And the world is also consistent with our vision as well.
And a lot of these narratives are actually talking about the same thing from my perspective.
The app chain from Cosmos is basically saying, hey, there will be many, many ecosystems.
Like layer two, layer one on Ethereum is basically saying that, hey,
there's going to be a one strong layer one,
whoever it may be, that has the strongest security, in this case, with Ethereum,
that's going to be the backbone of blockchain.
So we're seeing that play out with data availability, with Celestia,
Agunlayer, and us doing re-staking on Solana, as well as IBC with Solana and Ethereum.
And we're also seeing the monolithic narrative playing out
where a lot of things want to be executed and settle on Solana.
So in the world, in the next couple of months, what you will see from us
is that we will connect Ethereum through IBC into Cosmos,
and we will connect Solana, IBC, to Ethereum through Cosmos,
and Polkadot is already connected, and Polkadot and Kusama.
So all these things will be connected.
And if you look at the architecture specifically on layer one to layer two bridging
on the roll-ups on Ethereum, there's really two.
You have the optimistic roll-up and you have the zero-knowledge roll-up.
The IBC architecture is actually a lot, from my perspective,
a lot more similar to the ZK roll-up bridging from L1 to L2,
and it's better than the optimistic roll-up
in a way that you don't have to wait for seven days to go from L2 to L1.
So what does that world look like?
The world looks like, when we connect all these equations with IBC,
the world will look like Ethereum methods can flow easily to Solana
to execute and settle and come back to Ethereum
to be secured by the Ethereum blockchain to become ERC20.
And then you can go to L2 if you want, but you can also go to Solana,
you can go to Cosmos, you can go to anywhere else,
and there's always going to be an option for you to come back to Ethereum.
So you get the best of all the worlds of having the stronger security of Ethereum alone,
having the fastest execution and settlement of Solana,
and then you get the interoperability of Cosmos.
So we believe that IBC is the answer to these narratives
and how they all converge, and that's the future that we're building.
Clearly I'm biased, but yeah, I just want to say thank you for your time
and I'm excited to share more in the coming weeks.
Definitely. Thanks for your input there, Henry.
Deejuns are deejunning everywhere, music in the background,
talking about interoperability.
Moving on, I know Sarvesh, you had a question.
Was there anything that you wanted to put in before we have our closing discussion?
Sure. Thanks for the chance.
Henry, I love your spirit.
I've cleared around the IBC side of things for a while,
and I love how you bring the IBC Maxi culture.
It's always fun to talk with people who are building on Cosmos.
So I had a question for Bob, Sawyer, Peter, here.
So this is from a non-technical perspective, guys.
So while I was reading about these edge tools,
a lot of protocols are making notorious news with,
I'd say, huge volumes of TV and log.
Most of them have a framework.
But even from what you guys have been seeing,
so do us as users or consumer-level application builders,
do we need to prepare ourselves for a future which is more of cluster chains,
maybe wherein you have multiple plasma chains interacting with each other
through IBC or through some interchange messaging,
or how does this L2 kind of future look for us?
Because from what I have been trying to absorb,
it looks more of a cluster chain setup.
Yeah, I think it's a good question.
I think it's a loaded question.
I think everybody that you ask is going to give you a slightly different answer,
because I think it's a little bit opinionated.
The way that I like to kind of explore these questions is,
at the end of the day, the rise of kind of cloud computing
and mobile applications and all that, users just used it.
Users didn't have to necessarily decide on what technical stack they wanted
or where they would go to on-ramp or onboard or do these things.
They chose, okay, I want to use this in a web browser
or I want to use this in my mobile phone or things like that.
Same with the Twitter-Facebook example.
Are you a Twitter person? Are you a Facebook person? Are you both?
They obviously offer similar feature sets,
but they also target different audiences and do different things.
I think if we compare that to our blockchain kind of world right now,
ideally, I'm hoping that we end up in a world where end users,
consumers, and individuals like that don't have to necessarily worry
about where they are, the platforms that they choose to use,
and the applications they choose to use will handle the technical complexity,
the location, the tokens, the consensus, the security for them,
and you just get to utilize the application.
Whether we wind up with thousands of chains,
we wind up with a couple of core L1s and some scattered L2s
and some app chain networks and things like that,
who knows what it's going to be, but if we, in my opinion,
if we do it the right way, the end user doesn't have to concern themselves
with where they're located.
They just concern themselves with the experience they get
by using the applications.
Understood. So just to kind of even summarize it for me,
so right now, when we talk about scale,
scale is more or less a sidechain.
It has its own, I would say.
Pros and cons, but it's just that right now it's seamless.
So when we kind of look at the other L2 solutions in the market,
most of them are either roll-ups or more, I would say,
on the modular side of things.
So do you think, while with the L2 narrative kind of matures,
would we see any kind of plasma or state channel-oriented only framework,
which is like clustered or maybe just kind of using a bit of IBC
to get things moved around?
Yeah, I mean, it's definitely possible.
One quick clarification just for everyone here that's not familiar with scale.
Scale is a modular L1, L2 hybrid,
and the reason it has such a kind of confusing verbiage
is because it is a multi-chain network that derives security from Ethereum,
Every individual scale chain has its own consensus in its own state,
but the network itself derives security from Ethereum.
But that is a confusing topic, so no worries at all there, Sarvesh.
I think my answer to kind of your clarification is still kind of the same,
which is if you look across the kind of blockchain world right now,
we have all these L2s, we have L3s,
we have app chain networks like scale and others following,
we have non-EVMs that are doing kind of similar things,
the Cosmos IBC world, and it just keeps growing.
But the one thing that we're starting to see, I think, distinction in
is when you design or create a new network
or new location for people to deploy applications,
what you actually choose to use for your security,
for your cross-chain connections and things like that is so variable.
There are so many options, there are so many great developers
building and innovating and pushing kind of limits of what can happen.
But again, if we kind of pull back on that,
we have to remember why we're doing this.
We're doing this because we as developers see blockchain
as a solution to a number of different problems.
And so if we think of it again in those kind of terms,
maybe the answer to your question is people can build with plasma,
roll-ups of various kinds, they can build with ZK,
they can build with Taproot on Bitcoin,
there's so many different options, but at the end of the day,
the end user, if they have to know about that,
we're always going to be kind of struggling for adoption,
because we can't, end users want to log into an application and use it.
And so that's where the scale model has really paid dividends for growth,
is there's zero gas fees, it's very fast,
it is compatible with all of your existing tooling with Ethereum
And so as a developer, you get the benefits of composability across EVM,
but you also get to design applications that are less about your core technology
and more about what you're trying to sell or let people do.
I was going to have you explain scale to the audience,
but glad that you already went into it.
Thank you for your question, Sarvesh.
For our closing question, I'd love to ask you guys,
we heard that there were some statements made in this space,
not everyone thinks that L2s are going to continue surviving and thriving.
Maybe they're not a necessity, while others believe that L2s are the only way
that we'll see mass adoption with the blockchain
as they make the blockchain faster, cheaper and more secure.
For the panel, just starting off with Peter,
I'd love to hear what you think the upcoming trends are for L2s.
And also, if you want to go a little bit deeper
into what is the necessary thing for L2s to have in order
for them to continue to thrive and survive?
I would merge those two questions into one because one necessitates the other.
And I think the upcoming challenges that will need to be solved
is first and foremost the interoperability across the layer 2s.
Second is decentralizing the sequencing,
which is already happening from various angles.
You either are employing some of your own consensus within the roll-up
or you're tapping into some shared security or shared sequencing scheme.
So that's where, for instance, Eigenlayer might come handy.
I like the notion of restaked roll-ups,
where you are reusing the same security of Ethereum,
but you're using that for your roll-up purposes.
So I think these two verticals are going to be interesting
and any project developing something in that direction
is going to grow, in my opinion.
Thank you. Thank you for sharing that.
Henry, agree, disagree? Anything to add?
Henry, if you're speaking, you are on mute,
but I'll go ahead and pass that to Sarvesh.
Here, so I would say my takeaway from this space
is more or less like future is clustered.
But yeah, I agree to a consumer level point where your consumer
doesn't really care what the tech is.
It's more or less on how you drive that option.
We're excited to kind of, you know, see the space,
but yeah, I'm pretty now strong on my clustered chain narratives.
I see one chain driving around and all the chains spinning around it.
Visually seems appealing. Let's see how it figures out.
Wagme sounds like a whole lot of tech Wagme.
I am looking forward to it.
Bob, any thoughts on that for your closing comments
The future of L2s is bright.
I think we're going to see lots of developments this year,
next year with L2s on Ethereum.
We're seeing new L2s come up. We're seeing TVL up.
We're seeing transactions per second up and costs go down.
We're seeing people start to use more modular stacks
for their data availability like Celestia.
We'll continue to see additional scale with rollups.
And I think this year we will also start to see rollups on Bitcoin.
I think it will start with sovereign rollups.
That's user verified rollups with trusted bridging setups.
But maybe we get a Bitcoin upgrade like OpCAD or CTV,
or maybe we can get a trust minimized bridge with BitVM.
Or there are some who are starting to push for an actual ZK Verifier on Bitcoin itself.
So I think we're going to start to see rollups in production on Bitcoin this year
that maybe haven't achieved the true vision of a trustless L2 yet.
But I think we're still working on that on the Ethereum side as well.
So I think it's going to be all the rage this year and probably next year
as people continue to experiment with this modularity thesis.
I love all the enthusiasm that we have across the speakers.
It certainly solidifies my thoughts on it as well.
Sawyer, anything you wanted to add in before we close off the space?
I think, well first, just thanks for having me on.
Always great to speak about where we're at and answer some fun questions.
But I think my big thing, and I definitely think that I look at this
maybe a little bit different than a lot of people,
but it's just due to the amount of projects I work with that are trying to figure this out.
And I think my answer to how L2s will kind of survive and what they need to do to get there
is I think they need to kind of narrow down on their identity a little bit more.
The identity is scalability.
But unfortunately, so many have struggled to do that.
And they already make so many trade-offs to do that, right?
We've seen a lot of the original L2s kind of have to spin out
app chain networks or L3s or just kind of do things that maybe they didn't anticipate
because just how the L2 is set up.
And you know, same thing.
You know, a lot of them are running centralized sequences
or just making these different trade-offs.
And it's not a bad thing, right?
Everyone has great technology and is pushing this level of innovation.
But I think because so many have struggled to kind of really be truly scalable,
it makes it difficult for a lot of the developers that I work with to say,
we want to go to this chain because there are concerns that it's not actually doing what it's promised.
And so I think that's the big thing for me is just seeing all of these different networks,
whether they're L2s or not, really find their identity.
That way, as a developer, it's similar to picking your tech stack in Web2.
You know when you go there, what you're getting,
and you know that it's going to satisfy those requirements so you can build a successful business.
That's awesome. Thank you for your comments.
Before we go, Bob, I just had a curiosity question arise.
Will we get to the point on Bitcoin where people can start building games on BTC?
Can there be high transaction depths there as well?
Yeah, that's a fantastic question.
I think what you would need to do,
and we're seeing this on Ethereum already with proto dank sharding,
AIP 4844 moving proof storage into a temporary blob space
rather than using call data because it's going to be cheaper.
Even pushing that further,
you could store your data off-chain in a data availability layer that's called a Validium.
I think in a Bitcoin Validium layer 2 roll-up,
you could start to see something like this.
The reason is you get really fast transactions
because you don't have to store all of your data on Bitcoin.
You can use an external data availability layer.
That gives you really cheap costs.
In terms of transaction speeds, it all comes down to the sequencer
and prover environment of the roll-up.
I've seen some interesting applications recently using recursive proofs
where you can horizontally scale
and you can get many transactions per second,
hundreds of thousands, millions of transactions per second.
Take a Validium roll-up leveraging some data availability layer
and I think you start to have the makings
for something that's fast enough to actually do a full game built
and inheriting the security of Bitcoin,
which as I'm saying it is really crazy but cool.
I never thought we'd see this day,
but the space is very fast moving and these developments are happening so quickly.
Just to close off the space, thank you so much everyone for attending.
The number of L2s is also on the rise.
We're also seeing a new breed of L2s joining the competition,
including base of Coinbase.
X1, the layer 2 network recently announced by OKX
and also rumors that Kraken is now building one.
Also following the boom, the inscriptions market of the inscriptions market,
Bitcoin layer 2s are quickly on the rise.
Shout out to Bob for giving us more insights on that.
Be sure to follow all of the speakers that joined us today.
Starvesh from Veracity and 3XP.
We have the CEO of Mangara Finance,
pronouncing it just as great as you did, Peter.
We have Henry from Picasso Network
and we have Bob working with Bionic Market and Ordinals and Sawyer from Scale.
Be sure to also give Scale a follow.
Scale is a limitlessly scalable fast and on-demand blockchain network
Zero gas fees to the end user.
We allow for quick deployment of interoperable EVM compatible chains
without compromising security or decentralization.
So, appreciate you all and I hope you have a lovely weekend.