Bankless - 53 - Building DeFi on Layer 2 | Synthetix, Loopring, Immutable

Episode Date: February 22, 2021

Guests: Justin Moses - CTO of Synthetix Robbie Ferguson - Co-Founder & President of Immutable Matt Finestone - Head of Business Development at Loopring We discuss how these three voices in the crypto space have been integral in building successful DeFi products on the Ethereum mainnet. Listen in for a deep-dive into the different methods these protocols have taken to implement their apps on an Ethereum Layer 2. ----- 🚀 SUBSCRIBE TO NEWSLETTER: http://bankless.substack.com/ ✊ STARTING GUIDE BANKLESS: https://bit.ly/37Q17uI 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ 👕 BUY BANKLESS TEE: https://merch.banklesshq.com/ ----- 💪BECOME A BANKLESS PREMIUM MEMBER: http://bankless.cc/membership ------ AFTER THE SHOW DEBRIEF: https://shows.banklesshq.com/p/exclusive-debrief-building-layer ----- GO BANKLESS WITH THESE SPONSOR TOOLS: ⭐️ AAVE - BORROW OR LEND YOUR ASSETS https://bankless.cc/aave 🚀 GEMINI - MOST TRUSTED EXCHANGE AND ONRAMP https://bankless.cc/go-gemini 💳 MONOLITH - GET THE HOLY GRAIL OF BANKLESS VISA CARDS https://bankless.cc/monolith 📱 DHARMA - MOBILE ONRAMP DIRECTLY INTO DEFI https://bankless.cc/dharma ------ Topics Covered: 0:00 Intro 5:14 Loopring & ZK-Rollups 13:17 Immutable NFTs & ZK-Rollups 17:31 Synthetix & Optimistic Rollups 21:03 Why Ethereum? Why Rollups? 39:24 Layer 2 Efficacy/Roadmaps 1:01:25 Composability 1:18:22 L2 On-Ramps 1:27:52 Does L2 Compete w/ ETH? 1:34:47 Closing & Disclaimer ------ Relevant Links: Synthetix https://synthetix.io/ Immutable https://www.immutable.com/ Loopring https://loopring.org/#/ An Incomplete Guide to Rollups (w/ Vitalik) https://youtu.be/wcCHlqgGSH4 ------ Don't stop at the video! Follow Bankless on Twitter https://twitter.com/BanklessHQ Follow Ryan on Twitter https://twitter.com/ryansadams Follow David on Twitter https://twitter.com/TrustlessState ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://newsletter.banklesshq.com/p/bankless-disclosures

Welcome to Bankless, where we explore the frontier of internet money and internet finance. This is how to get started, how to get better, and how to front front the opportunity. This is Ryan Sean Adams. I'm here with David Hoffman, and we're here to help you become more bankless. David, how you doing? Absolutely fantastic and much more knowledgeable after we just got done with this L2 implementers panel. We brought on three different individuals who are all working on three different projects, who are all implementing their application on a specific L2. So we brought on Matt Feinstone, who works for business development at loopering,

Justin Moses, the CTO of synthetics. And we also brought on Robbie Ferguson, who is the co-founder behind Immutable X, which is a ZK roll-based NFT exchange. And so the through line behind all three of these individuals is that they are working for a protocol that is building something on an L2. They are not an L2. they are building something on an L2. So there's an important differentiator there.

And so we talked to them about what it's been like going through the research phase, going through the building phase, and where they are now, and then also where the roadmap is ahead of them. And I found it extremely informative. And I'm sure the listeners will as well. Yeah, absolutely. So two things I want to say here. The reason that this is top of mind and relevant is because Ethereum gas fees are high.

And it needs to scale outside of what we call kind of Mainnet Manhattan into layer two, which are these other chains that represent kind of like the suburbs, as we've talked about before. So this is a very topical issue right now that's really facing Ethereum. And what we think is defy is going to have to completely re-architect itself into this layer two mode. The other thing I wanted to say is if you're kind of new to layer two, what we're talking about is layer two is basically a chain that is not on the Ethereum main net, but is secured by the Ethereum main net. This is different than a side chain, which might integrate with Ethereum, but it's not secured by Ethereum. That is the distinction between a layer two solution and something that might be a side chain or another non-ethereum chain that's not as well. secured by Ethereum. The thing about this panel is these are all application developers. And that's why David and I wanted to get folks that were in the trenches actually building on top of these layer two solutions to talk because they can give the most credible perspectives on what's working and what's not. Because they're actually like users of the product. They're consumers of the

layer two. They made a strategic choice, an investment choice, to build on top of layers. two. So if they're doing that, if they're investing in it, then we wanted to know why. And we figured that they would have the best perspective on what's real, what's not, and when all of this stuff is coming and happening. I think they gave us this. So if you are looking to try to understand what Ethereum scalability trajectory looks like, what layer two looks like on Ethereum, this is the perfect podcast, I think, to get up to speed. There were two parts in this conversation. that I really, really enjoyed. The first is where we asked about the research process. So, you know, each one of these guys has works for a team and there was a research process to go into

which L2 was the best choice. But before we asked that, we asked, well, why did you even stick with Ethereum? Like, what you, you could have gone elsewhere. Why didn't you? And I think that was one of my favorite parts in this conversation. And then the other favorite part of this conversation came at the very end where we asked about their thesis or theories about, does the value capture that's going on on L2 actually compete with Ethereum and ether the asset or are they value generative to Ethereum and ether the asset? I thought that was a really fantastic part of this conversation. So as you guys know, there is always a debrief at the end of every single episode that we reserve for the premium subscribers to the bankless program. But we want to give the free listeners

just a taste of what those debriefs are like. So if you are interested in hearing the debrief, If you can stay tuned to after the episode and you will be able to hear the 30, 35 minute conversation that Ryan and I have after the episode where we talk about our takeaways, our lessons, our thoughts that we had during the episode, just me and Ryan. So if you are interested in that content, again, it's at the end of the episode. It's free for everyone this time. And if you are interested in accessing the future deep briefs, you can subscribe to the bankless premium RSS feed. There's a link in the show notes to get that done. I thought this debrief was pretty cool, and so check it out. It's at the end. You guys are really going to enjoy this conversation, but before we get into it,

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Open a free account in less than three minutes at jemini.com slash go bankless. Get $15 in Bitcoin after you trade your first $100. That's Gemini.com slash go bankless. All right, Bankless Nation. We are here with Matt Finestone of Loopering, business development at Loopring. We're also here with Justin Moses, who's the CTO of Synthetics. And then also last but not least, Robbie Ferguson, who is the co-founder of Immutable, which is the studio behind God's Unchained.

So Matt, Justin, and Robbie, welcome to Bankless, and we're so excited to have you guys on the show today. Thanks, having. You've dated. L2 implementers, assemble. Gentlemen, you guys have all been invited here to, because you share something in common, you have all built and deployed functioning applications to the Ethereum main chain and has seen success and adoption in the usage of your apps, which is already a feat.

But there's something even more unique about the respective projects that all of you guys work on and that each of you guys have implemented or are in the process of implementing, which is your guys' app being deployed on an Ethereum L2. Synthetics is offloading much of its infrastructure onto optimistic roll-ups. Loopering is building a complete payments and exchange platform on ZK roll-ups, and Immutable is building an NFT asset exchange platform also on ZK roll-ups. So again, we brought Jesse, Robin, and Matt here to tell us the story of their app, their need to scale, and their process thus far.

So let's start with you, Matt, and looping. Tell us about the nature of your app. What does it do? And at what point did you realize that Ethereum's main chain capacity just wasn't going to be enough. Thank you, David. Yeah, really excited to be here with fellow L2 implementers. Yeah, so loopering is a bit different than I think my compatriots here in the fact that we had,

we were a protocol, and then we built products, and then we built a new protocol ourselves to the layer two protocol to augment the products. So the application did not force us to kind of look elsewhere for a layer two. We built it ourselves. So we're kind of a layer two protocol and layer two products. But yeah, we realized long ago that like, you know, we had no business doing what we were trying to do on Ethereum layer one. We were building order book exchanges.

The experience was really poor on Ethereum layer one. So we looked for scalability. This was early on. Roll-ups were just kind of being whispered around, and we built our ZK roll-up specifically to scale our order book exchange. So we built an application-specific ZK roll-up, and then we start learning, and we actually have users and iterating. So the product changes a bit,

and then we enhance the protocol to support AMMs on Layer 2 as well, and then payments as well. So what came from just like an order book deck protocol really turned into an order book and AMM exchange and payment ZK roll up protocol. Yeah, it's a bit of a going all over the place there. But as you see, we kind of did like full loop. No pun intended, honestly. And yeah, that's where we're at right now.

Maybe you can talk a little bit about how and why building an order book exchange. on the Ethereum L1 with such a pain? Like why did that not really work out so well? Very briefly, the biggest thing is to get liquidity on order books, you really need market makers or liquidity providers that are in control of their quotes, what they're quoting to buy and sell. And 15 second blocks and gas prices to submit to potentially cancel does not allow them to do their thing and kind of quote and as the market's moving,

be quick and cheap like low latency, low fee. So it's really like a non-starter. It's maybe one of the worst things you could do if you're trying to replicate that legacy-style order book on a blockchain. But layer two allows us to really replicate that performance. You feel like you're on Coinbase Pro or Crack-in, except you're on this layer completely coupled

to Ethereum-based layer security. Marketmakers, even with Ethereum before scale was really an issue. in the way that gas prices were today, those like 15 second block times and, you know, even pennies worth of a transaction, it was already, like, without the congestion that we have today, it was already a poor experience for, and, you know, people who are managing order books need to be able to basically have instantaneous control, not 15 second delays or pennies at a transaction. So even before Ethereum was congested, the L1 was never, ever going to be able to do what you guys wanted to do.

That's a great point, actually. I didn't think of that kind of theme here that like, you know, Justin and synthetics were forced after like large success on layer one already and potentially same with Robbie. We couldn't do what we wanted to do even a few years ago. That's very true. And I guess we'll jump to this, but the layer one not being suitable for this type of behavior is actually kind of what spawned AMMs where these market makers don't need to jump in and be quick. you're just kind of dumping your money and letting a function do the thing. So it kind of, AMMs came out of the environment that optimized for it. Yeah, Matt, they really came out of necessity, right? It was due to this constraint of basically, you know, low amounts of transactions

per second that the automated market maker model became so successful and so popular. Maybe, Robbie, for you, kind of, same question. Can you tell us a bit about the nature of your application and at what point you decided that you needed layer two? Yeah, of course. The point was actually really early. When we were first launching the original sale of God's Unchained, it was at the same time F-coin was doing their exchange listing. And I don't know if everyone watching this remembers, but the way they incentivized that was basically as poor as you get was they incentivized transactions in the ETH network with high gas fees. And so over the first time ever we were seeing gas fees of like 150, 180. We did some innovations then, which were fine, but fundamentally we did the math,

we were like, okay, if we even get to 30% the size of Heartstone, so a medium-sized game, we are taking up some absurd amount of the Ethereum blockchain via NFT transactions, particularly because NFT transactions are a ton more expensive than just EOC20 transfers. Like, you can transfer a million dollars worth of EOC20 value for a fixed cost. You're transferring in a million dollars worth of NFT value in God's Unchained, that looks like probably, you know, 500,000 cards. So there's a fundamental difference between fundable tokens and non-fundable tokens. And so in picking a solution, really there were no available solutions, I would say, three years ago. There were ideas being thrown around state channels, have yet to come to life, plasma chains, also,

really have not been implemented in a mainstream way. And this, I think, was what drove people to things like new layer ones or side chains. And then we had this magical thing called a zero knowledge proof come out, which I remember being obsessed with when I first heard about it, especially the different parables of ways of explaining it, like the parable of the cave or, you know, the numbers and how it's all kind of like probabilistically determined, which gave me some rough approximation of the maths, which is probably like 1% of what it actually is.

But this is, as Vitalik says, like the way it will scale. And so I think we determined that solution pretty quickly that this was the most obvious way to scale, in particular, NFT transfers, because they were so problematic on Ethereum. And then it was just a matter of choosing, well, okay, who do we think the best kind of roll-up provider is? ZK roll-up's a bit about NFTs,

just because the lack of withdrawal time. Right now, I think optimistic solutions work better if you want generalized programability, which I think why, you know, synthetics is going with optimism, which is also an excellent solution. So yeah, I think that was the genesis of when we knew and also when we knew there be a solution was when we first saw traction and deployment of wallups. So to be clear, Robbie, you are going with a Ziki rollup type solution in the same way that Matt's team is with loop ring. Is that correct? Yeah, that's right.

I think we use slightly different providers. I think looping, do you guys use Matter Labs? We use ourselves. Loopering protocol was the first ZK roll-up as a 14 months ago. So that's our kind of provider. That's why I was kind of saying we're a bit of a different beast. We're a bit of a different beast like we operate across the stack. But yeah, no hard feelings.

No, no, no, very cool. Very cool. I'm sorry I didn't know that. I think, I mean, creating those proofs is bloody high. That's why we partnered there. And ultimately, I see there's a few layers of the stack here. There's proof providers. There's a protocol on top of that.

So I almost call that like an AWS infrastructure right down the bottom, which is clearly what you guys are providing. And then you have, okay, well, what networks are products are built on top of that? And then you have applications. Then you have OpenC, SuperRam, marketplaces, games, which stood on top of that protocol. So we went for this level. We said we don't need to make the magic maths. I don't think we wanted to do that.

And there's a real need. Exactly. Yeah, literally moon-out. And the implementation of it for NFTs is already tremendously difficult. So we took on that challenge instead. All right, so let's turn to Justin at synthetics. Justin, synthetics never really was destined to be an L2 in the same way, loopering or gauzeom changed slash immutable.

was, but you guys have turned into an L2 just simply out of necessity because if your email one is congested. So let's talk about a little bit of, again, the nature of your app, the nature of the economic activity that goes on in synthetics. And at what point did you guys realize that, you know, L2 was not just like an option for you guys, but something that you guys must do? So synthetics is a decentralized exchange, a little bit like Lubring, Matt was saying. I guess the big difference for us is we're a bit more like Uniswap and that we're peered a contract and we don't have an order book as such. What's actually happening is people stake a token, SNX token. And from that, they can issue a stable coin and then they can basically repress that stable coin into any other synthetic asset.

So basically what we have is this big shared debt pool that's comprised of all these different synthetic assets. The more people that go into synthetic E, the more the debt pool is denominated in E, which is kind of cool. because it means that you can get this idea of like input of liquidity. You can take any sin and 100% convert its value to any other synth that is important. But the problem with that is that that means that it's all shared, like it's all shared state. And as those of you've ever written any, I'll literally know that that tends to mean things like, you know, you're looping over every cent in the system to figure how much debt there is. This stuff is very gas-intensive. So I think for us that there's sort of,

it's somewhat too prompt. I actually think, you know, you're a little off, David, on that assertion that we would never death and fail to. Like, if you talk to Kane, he's always been very much that, that we, he wants the experience, like Matt was saying, he wants it fast and snappy, like a traditional, you know, decks. And so, you know, we obviously couldn't do that on L1. But on top of that, we have this very onerous gas fees that are just preventing, you know, regular people, people who, you know, might only be staking, you know, a few hundred SNX for actually doing anything.

because the code that we have is fairly complex. You know, with some people looking at $100, $200 worth at the time of trying to do simple things and minting, you know, spending, you know, a few hundred dollars worth of ETH in order to earn maybe $50 worth, that's the next. So for us, there was really those two factors required us to go over. And to answer your second question, he was actually in DevCon 5 in a sucker

when we saw the Unipig demo. we saw, for those of you who were there or wanted to see the video, basically, you know, the plasma team became the optimism team. They worked closely with Hayden and the Unisop team and they put together this Unipig and, you know, just seeing it,

you know, just seeing the tactile response. You know, my background's like, you know, full staff web engineering and I, you know, I was shocked. And when we did our demo on L2, it was funny because our front end engineers we were now dealing with like regular kind of, you know, concurrency problems

that we just never had. with Ethereum, but like we have multiple users using the app, we need to basically use web sockets or something to tell in real time what's happening to this shared state, which we never had to worry about, you know, with L1. So yeah, for us, the Unipig demo, which was about, was it October 2019, was the step in the moment we were, we started to take a lot of interest and optimistic and we started talking to them in earnest. Guys, let's, let's dive a little bit deeper into kind of the selection process of, of layer two. And I want to start here.

I know none of you are, let's call it, you know, chain maximalists of any sort. I'm pretty certain. I think that you guys are looking out for your user's best interest. That's what application developers do. They want to provide the best user experience and the best application possible for users. And of course, when you think about layer two, you could also go to another direction, which is a non-etherian blockchain. And there are a ton of what we'll call them,

ETH killers in quotes out there, that are promising low gas fees, no gas fees, infinite amounts of block space, kind of the all-you-can-eat buffet, please come to my blockchain, Justin, from six, because we won't want your app here. And yet all three of you have chosen to stay within the Ethereum ecosystem, and not only that,

but have chosen the security model of Ethereum as well. So it's not only kind of a side chain based on the Ethereum version machine. You're actually choosing to go down this even harder road where the security of your roll-up is actually based on Ethereum. So there's some really new technology that you're cutting your teeth on. I want to know why. And I think listeners want to know why. Why did you stick with Ethereum?

and what was the rationale behind the selection of the layer two that you've chosen? Let's start with Justin on this question. That's good question. I mean, I think, you know, for us, I don't know if any of you know this, but when we were Haven, which is what Sympathics was before it sort of rebranded, I was actually working on reporting our contracts to EOS. I did it for maybe six weeks. I was brushing up on C++ plus and running code.

and getting involved and really trying to get like write open source code, right continuous integration that pulled together docker containers and spun everything up and tested everything. And whenever I tried to ping the community on EOS, it was just crickets. Like it was just nothing. Like I was peeing different block producers and trying to get them to like help.

And it really just just real-illustrated how strong with Ethereum the developer community is. Like it's massive. You know, there's just so much infrastructure, there's so much tooling. And there's so much momentum there. And I, you know, obviously I'm an engineer, right? So I tend to, maybe I over index on that.

But my experience very strongly is that Ethereum's developer community is so rich that it would be, you know, very hard to move away from it. And I haven't seen any, you know, ETH killer that has showed me that there's any developer community can quite like it. So for us, it doesn't make any sort of sense to move over to another one. Can we talk as well? will have got you on this, Justin, about why the optimistic roll-up design specifically, what were the advantages of that versus the other roll-ups or other ETH layer two scaling

solutions out there? Well, I mean, I think, like, assuming we're on, stay sticking on Ethereum, I mean, for us, like, obviously, you know, the ZK, they're not having to worry the one week for draw period is obviously, obviously a better user experience. There's no doubt about that. But for us, a big part of the decision is how complex our smart contracts are. Still to this day, there's no easy way to port smart contract logic, you know, into anything into anything ZK at all, right, onto L2.

So the solution is to try to, you know, to try to take a little part of it, right? Whatever you need to sort of take onto L2 and create some sort of ZK, you know, compatible solution and create it. And a big part of the decision for us, particularly for me, is maintaining these two different code bases. So I'd like to talk more about this at some point, and this is a good piece. But there's a lot of complexity in now maintaining state on both, not just state, but also contracts code or both L1 and L2. Like I'd like to think of as a new dimension now. We have our contracts deployed on different networks, right, like, you know, co-vamb will have.

But now we also have this dimension of layer two. And the more, you know, the more cognitive load you put on your engineering team, the harder it is to get things done. So for me, a really big part of the appeal of optimism was being out of port, more or less exactly as is the contract code that we have on L1 and run it in L2 and then have two separate systems, which is one out as to the shards. And what I imagine is going to eventually happen is we are going to probably see different L2s. And there'll be, there'll be capital moving between these different layer 2s. And we need to handle how that's going to happen. I don't actually think it's necessarily going to be when it takes all. So for us to be able to take our logic and move it over, wholesale, it's a huge value out of optimism.

Robbie, let's talk about the process over at Immutable. When you guys were realizing that the Ethereum L1 wasn't going to be enough for all the data that you guys would need to be able to put on chain, did you guys ever look elsewhere other than Ethereum? And if you did, what was the rationale behind why you decided to stick with Ethereum? Yeah, of course we looked elsewhere. We even had offers, massive grants from different chains, you know how like these things go. This was actually a really simple question for me though. And ultimately, I am an eth maximalist. I think a bit contrary to the original thing. And the reason is not just inherently, hey, this is what I like. I think I'm a decentralized maximalist. And Ethereum is really one of the only public blockchains which fulfills that criterion for me. the alternative blockchains simply like either their consensus mechanisms are so centralized that if I hired a crackpot team of Hitman with two million bucks, I could go crack it, or if the government cracked down, they could go crack it, or if the CEO of the company of their centralized blockchain, I don't know who I could be referencing here, was to leave, that'd be a significant impact to the blockchain. So I think, just speaking pretty candidly, there's very few decentralized alternatives. So my question is, what does that? the point then? Why don't I run a marketplace on my database on my computer? Why don't I just do another steam? Like the whole point of this is to give users self-custody, sensitive resistance

and it's fundamentally decentralization and sovereignty over hard-capped assets and hard-cap money. So I don't think going halfway and just creating a nice experience for trading valuable things that is fundamentally vulnerable to the same things centralized markets are, is doing anything at all. The next thing I would say is, so that's why Ethereum, but the next thing I would say is it's not sufficient for me to have some sort of relationship

with the Ethereum ecosystem. And I think there's a lot of will being pulled over people's eyes here as well at the same time, which is, I think, I mean, and this is where I actually take my learnings from you guys, because I think you so clearly articulated, what are the value propositions of Ethereum,

which in my mind are four, ether is a consumable, ether is a capital asset, ether is a store of value and ether is a form of economic bandwidth, guaranteeing via its security the operations that exist on that protocol. To me, you have to therefore rely on Ethereum security. Currently, the only scalability solutions which rely on Ethereum security are roll-ups. So I think that that was partially why I chose that. Like at the end of the day, you want to have the cost to attack the stuff you're trading to be the same as the cost to attack your roll-ups. I think optimism has a slightly more

linear cost to it to attack the proofs, but it's still correlated to it, to Ethereum security. So it's still really good. And I think, you know, Justin was on the money with the fact that it's just way better for defy-apps right now, an optimistic solution. So that was why, Ethan, that was why roll-ups. And ultimately, at the end of the day, for customers, it's way better too. Like, if it's where all the network effects are, it's where all the developers are. That's a really hard thing, even with $250 million to buy your own ecosystem of developers. It's just that money will only go so far and that people will be motivated by cash

rather than the true kind of cultural genesis of a decentralized community, which we've seen on Ethereum today. And so what about the research phase for Immutable and an L2? How did you guys come to a decision as to what L2 was the right L2 for you? Yeah, so it's really just two decisions. It's one, what kind of, so in my mind, the only L2 is a roll-ups right now.

I mean, that's because the definition of an L-2 is something which inherits the security of the L-1, well, it's the only solution which do that currently. Other mechanisms like sidechains, useful, they have their own consensus mechanism, so you're not actually getting any security. They have bridges and it's great for the ecosystem, and this is partially why Polygon said, hey, we want to be this, you know, relationship, to future ZK roll-ups and things like that. I'll be excited when they release one,

and they can use us if they like for NFTs. So I think that the first choice was out of roll-ups, which one, zero-knowledge was very clearly the choice for us. NFTs have a reduced need for EVM compatibility over complex smart logic, and we're also getting there. So immutable X's implementation of a zero-knowledge roll-up with Starkware already has the prover on-chain, which is able to basically take any EVM logic,

we just don't have a language in tooling, which is going to get there this year. So that's future-proofed. And the main reason for NFTs is instant withdrawals. So the benefit with ERC-20s and a protocol like synthetics is you can do things with liquidity bridges to kind of get around this problem with the withdrawal time.

They're not perfect, but they're pretty good for fundable tokens. You can't do that for NFTs. If you have a one-of-a-kind crypto-key Axi-Godson chain card, I can't, you know, loan you or construct some liquidity bridge, which is going to give you early access to that capital. It's just impossible. So for us, those were the, you know, a zero knowledge roll-up was the only solution. Out of that, it was like, okay, well, provided it will be used.

And Starkware was the obvious choice for us, $30 million from Sequoia, a really world-class team and was future briefing that as well. All right. And last but not least, of course, Matt from loopering, was building on something else other than Ethereum, ever even something that you guys could have considered. Right. So first of all, such a pleasure to hear these guys speak, Robbie and Justin and like so like-minded or facing similar things. And I don't have much else valuable to say except for our own situation. But yeah, I really echo everything they said. Did we ever look

somewhere? Here's another little fun tidbit, actually. Even before scalability was like the big pressure on us or the big thing we were trying to tackle. We actually did look. elsewhere off Ethereum back three years ago. And I will opt Justin's EOS. We actually deployed smart contracts for looping version one on Neo. On Neo. Wait, Neo, the China's answer to Ethereum, that Neo? That's right. Okay. Can you take someone from a call? No, we'll just edit that out, Robbie. We have to. No, it's okay, Matt. You know, we all have those things that have happened in our past that we're trying to get over now.

But tell us more. No, I think it's a great learning moment. We, you know, loop ring is actually a primarily Shanghai-based team. Most of our engineers and I'm not there. I'm in Canada, but a big part of our team is there. And back then it wasn't so obvious to some, even to me, even though I'd also consider myself, you know, just a purely ETH person. now by a long shot. Back then, it wasn't clear that you didn't want to deploy your things on other chains, not for scalability reasons, just for, oh, this is maybe the Ethereum of China or

interoperability, different chains. Like, the reasons are fuzzy now, looking way back then, but we deployed it. But it was really kind of like a tangential effort. And as soon as we did it, it kind of didn't work for certain technical, quirky reasons. Like, the way that, you know, their gas, it's actually kind of funny to think about it. They had like two types of gas. And like, if you did the transaction that is below some type of like consumed gas, it's like free, if I remember correctly. But then it like spikes up. It's like a step function. If you do anything a bit more complex, it was really. So actually, the reason why we dropped it was because it was technically not feasible. That was before Ethereum just became the clear place where we wanted to focus our time.

as Justin was saying, like the cognitive overhead and just the simplicity. So we actually look elsewhere. So we have a bit of firsthand experience about dealing with crickets in a community or just facing all those things. But it really was a different world back then in 2017. What's worse, Matt, crickets or high gas fees? It's kind of the question, right? Yeah, right. Exactly.

That's the first thing I thought of when you posed the question. was like user experience is not like we all think like okay speed and cost that's like actually way down the list on user experience what's way higher is people both users and devs assets liquidity and like awareness right like that is those are prerequisites before anything else in user experience which we think of like speediness and costlyness like so those so those are indeed the things about why Ethereum Now, to get to the next point, when we tried to tackle scalability, it's funny. Someone mentioned DevCon 5.

For us, it was DevCon 4 in Prague, and just ZK roll-ups. I just remember it so clearly people were talking about ZK roll-ups for scalability, and I remember just writing my team. I was the only one there, like, hey, what is this stuff? It sounds like it's a magic bullet to all of our problems. And back then there were no live ZK roll-ups. There was no, like to mind, maybe there was the beginnings of thoughts about companies forming, but there was no Starkware in this current form or Matter Labs or really any live ZK

roll-up. So we became overnight a ZK roll-up team. And we're not a bunch of cryptographers. As Robbie was saying, these proof systems are hard, but like our team turned into practitioners of zero-knowledge cryptography. And really we had a few great engineers leading us building the first ZK roll-up from scratch, which was a huge, a huge effort. It took a year.

It stopped everything we were doing. But yeah, we built it ourselves. And that's that. I forget the next part of the question. Why ZK over optimism? I hadn't actually asked it yet, but that's exactly right. It seems like ZK. Roll-ups was the roll-up of choice for you guys.

It seemed really, really conducive to you guys from the get-go. It seemed like you guys never really had any doubt that ZK. Roll-Ups was the solution for you. What strengths did ZK. Roll-ups have that really just made it crystal clear that it was the right path forward? So I may be mistaken here. Maybe somebody could create, but I don't think optimistic roll-ups were a thing back then.

I think roll-ups, like the idea of like a roll-up, like, generalized was, I guess it was a thing because people thought, okay, validity proof or fraud-proofs. But, like, you didn't have debates, like, cool debates now, like ZK versus optimistic. It was like, okay, roll-ups and like, yeah, you use these validity proofs. As far as I know, we only discussed that. We never thought, I could be wrong, but then as we progressed and like we were mid-build and maybe the idea came out a bit, we were still very strongly in the ZK roll-up camp because it does offer us what we need. We're not, we don't have those complex kind of arbitrary logic that Justin was describing. We were building

order book exchanges, right? Which turned into order book exchanges plus payments plus AMM. So still just like specific functions we were tackling. So ZK was able to handle that. So that's kind of one one reason. The other is indeed the fast withdrawal times. We, that's a big thing, which is live on loopering now. It's really cool. You could exit. It used to be a big thing that people said, oh, you know, an hour, two hour wait is way too long. Now you could pay up to kind of inject from layer two. And the next Ethereum block, 15 seconds. It might cost you like 60 bucks or 70 bucks right now, but then you don't wait, something like that.

So those, that was it, but really it's, the cold heart fact is like it was just the one that we were aware of. But when we did kind of become aware of optimistic growths, we just also, we like the idea of validity proofs. Maybe we had like these naive debates, which have since been answered, but I remember talking to the team and okay, what about optimistic roll-ups? It's going to be more generalizable.

But we all said like the idea of just like validity proofs, like not waiting for fraud proofs after. I think we posed the question like, what happens if there's never any fraud on an optimistic roll-ups? Like the watchers never like win a bond or something like that. I don't know if that's even since been answered, but that was like a thing, like, okay, if everyone is too well-behaved, then does everybody let up their guard because nobody's actually like slashing people or winning like a challenged fraud proof?

So like we had those early probably now answered questions, but we just like the idea of validity proofs. So I want to, you know, frame this question to the implementers, the Avengers of implementing on Layer 2 right now this way. So a lot of people when they're seeing kind of Ethereum's congestion as David sort of framed. but basically it's high gas fees. They're getting flashbacks to 2017, where Ethereum had its crypto-kitties moment when basically, you know, everyone realized that the Cryptokitty's application was consuming too much of the Ethereum network, and oh, my God, Ethereum had to scale. And then we also remember that the Ethereum scaling solutions at that time were not quite ready for prime time. There was like a lot of promise about state channels, for instance.

projects like Raiden would come and solve things. Then there was a lot of promise about plasma. That plasma was the next solution to scale Ethereum. There was even promise about ETH too. Hey, maybe it's right around the corner, kind of, but we're not sure what the roadmap looks like. So this is a question, I think, only the implementers can answer. And this is the reason we brought people who are building apps to this conversation

is because you guys can drop the truth on us, right? like no one else can. I mean, we bring on some of the layer two providers. They're all going to sell us the vision, essentially, and try to sell us the platform. But you guys are actually in the trenches building this shit. So what we want to know to the panel is, is layer two really happening this time? Like, how far along are we? Is it here? I mean, because mainstream's coming, and they're coming right now. They're coming during this bull run. We've got to be ready for How ready are we? Let's start with Matt on that question. Absolutely. Maybe you gave me this one because it's a softball pitch for me because I could say it's not coming. It's here.

You know, exclamation point. It's it's here like that's all loopering does without layer two. We wouldn't exist. We wouldn't have a product. We didn't have a protocol. So to the extent that like we have stuff to do every day and our users do stuff and there's volumes, that's all layer two live main net. real value. So let's get that off right out of the way. It's here. Now it's time to learn and tweak and iterate and everybody else is coming. You know, we've kind of, we've been alone for the past year. Now, like, you know, mega popular apps are coming. Synthetics, apps and protocols. So, you know, they're live, they have a function of their platform live on Maynet. So it's here. It's not just us. And it's really amazing as all these builds. builders know when you actually have users and things are happening, you start improving, right?

Like that's like compared to RZK roll up last year, it was barely usable. Everything was like everything was gas intensive. You couldn't do that much stuff. Now it's like, you know, it's more efficient, it's more flexible. So we're going to see that kind of inflection kick in where people are learning from their L2 experiences and everything is just, I mean, it's here. I'm so bullish. If people don't know that Laywitu is here and it's only getting better, then I hope this episode really, or maybe I don't want them because that's a nice fud thing against Eath.

And I want it, you know, I don't want it to just be realized overnight and then priced in that, oh yeah, this could do everything that we needed to. So I don't mind actually some apprehension or some other conspiracy theories that it's not coming because that gives me more time. Yeah, Alpha is, of course,

always opportunity. But Matt, at loopering, you guys are still building stuff. You guys are still working on progressing loopering. So if you aren't actually working on building the actual L2 platform, what are you guys working on? Like, where are you guys and your guys's roadmap to actually capture and facilitate L2 scale? Right. So I think we still are definitely working on all fronts. That's what I was saying we're a bit of like a different beast. So we have that whole proving team and the relayer who's, you know, generating these ZK snark groups, they still have improvement to do. Then we have the actual protocol, what we could write in our ZK circuits. You know, now, as of a few months ago, AMMs are on our layer two.

So still improvements there. Maybe next will be a lending protocol or another type of functionality. So those are kind of the two pieces of the ZK roll-up front, like the relayer and then the protocol written on top of it. And now we have this new layer of products, which is kind of new to us. that's super important is presenting this in a package, the user, on like the loopring exchange on web, which is an AMM and order book decks and payment application where you can do everything gas free.

And so just improving the products, which is a huge, huge thing and quite different hat for us. And besides our loopering exchange, we have the loopering wallet, which is kind of another. thing with I know you guys are right on top of from Vitalik's recent episode on social recovery wallets, but Luprin kind of, you know, expanded its focus again. And we have a smart, a mobile smart contract wallet. So the social recovery wallets with our ZK rollout baked in, which is kind of a dual, like a really two-pronged approach at like mass, you know, mass market usability. So, you know, fast and cheap, but also a product that doesn't scare you with a seed phrase and is like socially scalable and like usable there. So, so we're still busy on all those

fronts, protocol, product, all that. Definitely, definitely, it's only getting busier. Now that we actually have real users and real volume, you know, $250 million worth of, worth of value on our ZK rollup, which is unbelievable for me to think about. I remember being discouraged, you know, mid last year saying, man, how hard is getting people on layer two going to be? And by no means are we, you know, hanging up our hat like we've achieved it all. We're just getting started. But it's just so nice to see real users, real volume. We're all grateful and really looking forward to continuing it. Guys, I just want to capture that because, Matt, you know, 250 million in locked value on a loop ring. Look, guys, like a year ago at this time, we barely had that much locked in defy in our

DeFi protocols, right? I mean, we just hit like the one billion mark in something like February of last year. So now that we've got like loop ring, $250 million, that's huge. And, you know, congrats to the team there and congrats for pushing this vision forward. I just, you know, this space moves so fast. It's unbelievable what you can accomplish in six months a year's time. Very cool. Thank you so much, by the way. Hey, guys, there's so much more left in this interview. We talk to these three Defi L2 implementers about the possibilities of Fiat cash on ramps directly onto their L2 rather than having to go directly through Ethereum themselves.

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Let's turn to Justin with Synthetics. Justin, where are you guys in the development of your L-2? What is that roadmap like? Where are you guys in that process? And where do you have left to go? So right now, the optimism is like has a pseudo-mainment. So it's pseudo-mainment that we're the only ones that can actually deploy right now. But, you know, plans are underway for a full real maintenance.

And as Matthew said before, you know, one of the great things about optimism is it's generalizable. And I think to answer Ryan's question before about like how real is this, I think a generalizable way to start deploying contracts. on L2 that's very, very similar to deploying on L1. You need your own compiler that's basically like a superset of the SOLC compiler, and you just switch your provider to optimism, and away you go. You need a bit of wrapped eth in there instead of ether, and it's pretty much, you know, bam-bang.

You know, you actually deploy on L2. And I think that knowing that that's coming, you know, around the corner this year is going to be pretty huge. It's going to pave the way for a little. Lots of developers who may not want to sort of get into the nitty-gritty of actually trying to get into ZK Snarks. I just want to be able to write contracts the way I always have and deploy them something a lot faster and cheaper. In terms of our roadmap, so we're right now at a situation where not quite as much as Matt. I just had a quick check now.

There's about 160 million right now of USB value of SNX. It's on our layer two, which is probably even more than perhaps we want, considering it's a phase zero. So right now what we have is some stake, is you can stake your SNX on layer two, but the SUSD that is what happens is when you stake in synthetics, you basically meet stable coin. The SUSD that's on layer two is basically, you know, useless.

The capital company, you can't do anything with a capital right now. There's no other protocols on there. Nothing else you can do. And yet there's still $160 million of value on there, which is pretty wild. The Synthetics is sending 25,000 S&X a week to distribute among people who are staking, but that's it. And yet there's still a lot of values.

So clearly, you know, people are really excited to get off paying gas on layer one. Our next phase is to basically enable basic exchanging. So probably have like having ether and Bitcoin and actually being out of slowly, hopefully if we get some other protocols on there, actually do something with these sense as opposed to just having them static sitting on layer two. But for us, you know, a big part of the excitement is as other teams and protocols do develop as Matt was saying, like as other teams do start developing different things and they're on layers too, well, then we can get those defy Legos, you know, plugged in. And that's something that we're also pretty

excited because, you know, you can probably infer once you sort of take away, you know, 15 second block times and a bunch of other requirements, all of a sudden new ideas of things you can do start to pop up. So Justin, I just want to be clear. Oh, sorry, just one thing. Justin, I just want to be clear on this because this would have felt like a miracle in 2017. What you're saying is your team, and what you've done with synthetics on optimistic roll-ups right now is living proof that generalized smart contracts work in a roll-up now.

Like, that works right now. That's what you're telling us, right? So what we basically, like, just forget a little technical, just because I find this useful. Instead of just sending tokens, right, from layer one to layer two, we're actually sending messages, bytes 32 encoded messages, we take users as escrow entries because when you stake with SNX every week you claim and you earn SNX

that's escrowed, we're taking this payload and actually sending it off to layer two and recreating the state that existed on L1 and now we're recreated on L2. So we can actually create this, you can these generalizable messages, you can actually send data and you can do it both ways, but as you obviously know that there's that one week withdrawal period, which is very onerous. Now for us, as Robbie mentioned, we're talking fundamental tokens so it's not a big deal. You can have a market maker come and basically solve the problem of liquidity by if it's SNX or it's SUSD or something else, they can basically, they can basically sit there on both sides and provide liquidity. But yes, we do have a

generalizing solution. It's just right now, it's right now not anyone can deploy to it yet, but there is a solution coming soon where anyone can actually deploy to it. And, you know, write their code and solidity, transpilot using the OVM compiler, and then deploy, as I said, using a regular provider. Because the thing that the optimism team are really big on, and I really commend them for, is not reinventing the wheel and just leaning on as much as much of standards and developer tooling that everyone's used to. So there's no, you know, magical list or magical data that.

It tries to be as much, you know, EVM compatible as possible. Now, of course, there's more complex because of fraud proofs and things like that. but they really try to make it as compatible as possible. Justin, do you happen to have any sort of like napkin math as to how much gas you've been able to save your users or perhaps like what percentage of synthetic economic activity you've been able to offload? Any numbers like that you could give us? I don't have it on my head at the top of my head, but I think it's something in the order of like two orders of magnitude difference. So a 500K gas transaction ends up being about 5K gas.

And you think of it, like what the roll up is really what is persisted onto layer one is effectively the two things. For every transaction, there's the call data. So the things that, you know, the inputs of the function call and then the Merkel hash, right, of the state. And they're the only two things that are actually persisted on layer one. So every time someone transacts, they basically, those two things have to be eventually get pushed onto layer one. So there's about two, what does a magnitude difference in terms of? in terms of gas. Now, it's a little hard to compare what's happening on layer two right now, to one, just because right now the gas is being basically paid for. The users aren't paying

for it right now just during this pseudomagnet. So it's hard to really say what's, you know, how many people are actually, you know, how much of this is real activity is. We all know people are a bit different when it comes to their own money versus when something's free. Just to go a little bit deeper into that, you know, synthetics has one of the most vibrant communities and all of Ethereum, it's kind of the thing that you guys are known for us, the synthetics communities, what I would say brought synthetics through the bear market and into the mainstream knowledge, as we know today. I would imagine that the demand for scale must be absolutely massive inside of your community. What can you tell us about community interest

in accessing this L2? Like when you guys open up the door, is there just going to be a flood of people that move on to this L2, or have you guys done any sort of like consumer research in this domain? Sorry, you're talking about our users? We're talking about other developers, like another protocol. Your guys as users who want to move on to the Synthetics L2 to stay. Yeah, I mean, 100%. I mean, a lot of them really want to see, you know, a real trading app. You know, like Matt was saying before, they want to see, you know, ticking prices.

They want, you know, to get their orders spilled immediately. They want amatomicity. They want all the things that we don't, we can't provide right now on L1. So, yeah, 100%. I see people going over there. Now, of course, the question of how useful is the capital that you mint or the things that you have at L2 is going to be a big, it's going to be an issue. So we will have to see, you know, what else appears on optimism?

And then if not, like how, like what other solutions to, as I said before, to get your S&X or your sense back to layer one and play with them if you need to. I think that's still a bit of an open question right now. We need to see where that sort of comes to fruition. but it seems like based on what I said before, the amount of rewards that are being sent onto layer two are pretty ministerial, and yet we still have,

you know, something in the order of it said like 160 million, like 6.6 million S&X, right? Which is, what is that? I don't know. 6.6 times roughly $25, yeah. Yeah, no, I meant the total supply. Like I don't have the total supply out of my head.

What number that is, but, you know, like 3% or something, yeah, which is pretty significant. to drink. Yeah, that's fantastic, fantastic work. And really exciting because you just released kind of a layer two optimism, like what, two weeks ago, three weeks ago, something like that. I don't know, time, time moves in a different way. Yeah, it feels like about three months. I think it might have been a month ago, actually, now. Month ago, okay, month ago now. Thanks for the time adjustment. Time is weird for me right now these days in crypto. Okay, Robbie, same question to you, right? So you represent the, the, the,

NFT side of these applications. And NFTs are having an absolutely massive moment so far in 2021. This is going to be an absolute breakout year. Like it seems so obvious. But same questions to you. How real is layer two for NFTs right now? Like hit us with the truth. Yeah.

Building a layer two for NFTs is really hard, especially compared to ERC20s. NFTs are fundamentally antithetical to liquidity. If you have eight and a half million gods unchained NFTs, you have eight and a half million order books. Each of those could have their own uny swap market. It's nuts. Like they literally have their own bids, asks and spreads. And Rob, just so people can understand this,

this is almost like, you know, like obviously fungible tokens or things we see in the real world like coins and dollars and these things are fungible. NFTs, they're more like collectibles. They're individual items like things you might find in a pawn shop in the real world, right? So of course, each NFT is completely unique. You can't trade one FT with another. And that's why you're saying they each represent a separate order book, almost. And each NFT needs to find the right buyer, right?

Like there's not a global buyer for NFTs in the same way that there's a global buyer for dollars or gold or coins. Because they're fungible. Each of these, you know, goods is unique. what I think, and I steal this from Jesse Walden, who's a great thinker on the NFT space, is defy as to financial services as NFTs are to literal assets in the real world, like cars, options, contracts, physical goods, term deposits. Heaps the stuff in the real world are unique, and that's what financial services exist to serve. So I think fundamentally we're seeing the innovation of tokenization of everything.

everything, the final stage. And that's why this space has gone nuts. We have Mark Cuban making NFTs of him tweeting cameos. We have, you know, major IP pouring into different partnerships, the amount of people who have reached out to our company over the last, you know, three months is 20-fold over the previous year. So the space has been insane. It's really difficult to provide scalability, which is why Flow went off and said, hey, we can do a good competing business to Ethereum by carving an e-shed of NFTs. And this is why we're going to. And this is why we're going to I'm quite excited to say that within six weeks from now, the first ZKL2 transfer of an NFT will occur on Immutable X, and people will be able to do that. So it's definitely here. I've done

demos where we're doing test net integrations with basically partner applications, because the goal of a Mutable X is like, honestly, it's two things. One, I want to make NFTs huge, and I want the future home of those NFTs to be on a blockchain, which is good, infrastructure, which is open. Frankly, that's Ethereum right now. You need to use its security fundamentally. And so the way I want to do that, people should just trade, but they want to trade. They want to trade on OpenC.

I want to make OpenC the most amazing place to trade ever and have those guys be hugely successful. People want to trade in Fortnite and have an API and just trade in that marketplace. They should be able to do that and have all the benefit of Ethereum level security. So, yeah, we've been working on on this for nearly a year and a half now. where we're stoked to go to release it at this time. So Robbie, because we've heard a little bit of this from the other two panelists about sort of the before and after, right?

They described like kind of the current state on the main net. If they had their app, you know, their app exists on the main net versus now and it's world with faster UI, better experience. Can you kind of describe the before and after for somebody who is, you know, using NFTs today or trading NFTs today on mainnet versus when immutable X goes live? What's the difference? How's a user going to feel this? Yeah, it's a great question. I mean, the main difference is they pay zero gas ever. If you're a game developer, you pay zero gas to create an NFT to mint one. If you're a user, you pay zero gas to trade an NFT. It's on a validity proof. So you have the same level of security

as Ethereum always, which is fundamentally the point. It's the reason why we're good for Ethereum down the track. If NFTs become huge, if L2 has become huge, we're not taking value away from the fundamental chain. That's really important to me. Otherwise, you can't get Ethereum supporters on side. Otherwise, you're essentially just competing at the end of the day. So that's the user experience. The other thing is we're working with StarQuare to make it so. If you have layer 1E, you don't even have to deposit that. So really, I want the worst, the minimum experience, to be identical to current thing. You pay ordinary gas fee, use your layer 1E. The best experience to be, hey, I've literally just signed a transaction. I see this NFT in my account instantly.

It feels like magic. Like it legitimately feels like magic after three years of spending, oh, will this come in two minutes? Will it come in 10 minutes? Am I paying $45 to trade a $1, God's Unchained card? Which is just crazy. So I think the demand is, you know, it's gone from being a vitamin to a painkiller for NFTs is the way I describe it. And right now, it's gone to being general anesthetic, the state of NFTs. So, Robbie, I want to pin you down here because I have a gauze and chain deck that I enjoy playing with, but I'm far from a professional. And so I would like to use the marketplace to bolster my deck. But I remember that it would cost, like you said, it would cost me $5 or $10 to get this card that was worth to $3.

So when do I get to use the NFTX marketplace to purchase all the GOS and chain cards that I want? Yeah, our goal would be, for God's Unchained, we'll roll out first in quarter one. So within six weeks, you can create a prediction market on that. I'll for it. Awesome, fantastic. All right, so I think that unless Ryan, you have any other questions you want to follow up here with this section. I want to turn to the conversation of composability because this is a frequent topic of concern that many people have when it comes to L2, which is, well, if,

if loopering gets all the liquidity on the loop ring L2 and synthetics has the liquidity on the synthetics L2, well, then, A, we're fragmenting liquidity. And now that we're all on separate L2s, we're all multiple hops further away from each other than we once were, right? So let's start with Matt. Like, how are you guys addressing this concern of fragmented liquidity and broken composability? What are you guys doing to help mitigate this issue? And or do you even consider this an issue?

For sure. This is a, it's a huge thing. We haven't had to deal with it practically because we're the only ones. So we've, you know, people kind of jab at this, this potential weakness in layer two and, oh, you're all going to be in silos. And again, especially loopering, because looping ZK. Roll-up is quite application specific. We have the decks. We have the AMM. We have the payments.

But like, we're not trying to get, like, like, we wouldn't have. been a solution for gods unchained. Like we couldn't have told Robbie, hey, build on loop ring, because we're not trying to, you know, like Starkware power their other applications. So there might, we're not, you know, inviting other teams necessarily to come build and we're gonna, hey, like, you know, tweak our back end to optimize for you and stuff like this.

So we're kind of doing our thing, you know, which is kind of a, it's an interesting statement to say because, you know, everything as Ethereum's, all of us we do, is so open. But yeah, the loop ring. And this kind of goes back to your other question. Did you ever look at alternative L1s? To some extent, layer twos do become a bit of a silo. You're there and you have to kind of make a transaction to go into there,

make a transaction out. And it could be as instant or not instant, depending on ZK roll-ups or optimistic roll-ups. But at the best case scenario, then you're in a. roll up with other people. So synthetics, you're in a roll up where there's other stuff going on. And then it becomes kind of similar to layer one. Synthetics might have plenty of company, probably will have plenty of company on optimism. I'll let Justin speak to that. And then you kind of have those same composability, you know, those great properties. To go cross roll up, there's a new, now this is the next frontier cross roll ups, right?

We all know roll ups are here. So how will we go across? Could we, will it be easier for, maybe validity proof to validity proof roll-up. So like, will I be able to speak more easily to Robbie or to another Starkware application because it's loopering ZK roll-up to another ZK roll-up? Can we also go equally as easy to optimistic roll-ups? So this is the next frontier. There's a few projects working on that. There's Connects.

There's Hop, which came out recently. So to be honest, we largely leave that to these new solutions to come. We speak with them, we ask them questions, they ask us questions, but we're not trying to solve composability ourselves. We are trying to build the best kind of environment

and products that we can on loop bringing ZK roll up. And we kind of take it for granted that really smart people, our peers, are going to figure out to build bridges. You know, and everything, again, rooted, the most crucial thing rooted in Ethereum security. So if liquidity providers have to bridge an exit from loop ring and entrance onto synthetics

or onto optimism, then that liquidity provider at least has the assurance that this is all Ethereum level security guarantees. They don't have to have a mental space for the side chain that has seven validators. Right. So like all these rollups, at least they're speaking the same language and they know like the fallback is Ethereum layer security. And then it's just like talking about what is the market rate on their liquidity to front you a thousand die exiting loop ring and then putting and crediting you that on optimism. What do I need for that? Do I need 50 basis points for the hour? Like it becomes a financial

consideration, which clearly Ethereum has excelled at figuring out these these amazing new models and things like that. So it's going to be solved, I guess, with a mix of technology. and financial innovation and just like the market rate for for liquidity which sounds maybe like not such a huge thing but that that's how composability is going to work maybe like the equivalent of flash loans right from one to the other and I guess we still are thinking about it in the sense that like we have in our we have conditional transfers so I could make a message on that that is contingent on a layer two and the layer one act act So like, again, fronting this liquidity and being in two places at once.

So if I do something on layer two, then I take that message and then it allows me to do something on layer one. We do support these conditional transfers. Those are a big thing. That's what our fast withdrawals are based on. But yeah, at the end of the day, it's, I think a lot is to be seen. Like I really have a big chunk of this. I just don't know how it's going to play out. There's still technical pieces to fit in place.

There's behavioral pieces to fit in place. Like, how often will people be leaving their roll-ups? Right? And then again, it's the ZK versus optimistic exit timing. It's just there's a lot of unknowns here, but it's clear that the work is being done. And it's a mix of technical and financial and composability will remain. But it's, if I have to say kind of one thing, like, you know, that's okay, let's assess a risk here. Composability is not as beautiful as everything being on layer one.

That's for sure. But we're going to get over that at home. Justin, I'd like to pull you into this conversation. One of my long-term optimistic cases for loopering is that loopering is a place that will be able to take a fiat on ramp, right? And so let's say I transfer my $100,000 whatever dollars into loop ring. And then I start trading SNX, right?

buy sell S and X to use the loop ring L2 and then say I've got my S and X and X bag filled. And now I want to take that S&X bag and maybe I also have SUSD on loop ring as well. Maybe there's both S&X and SUSD on loop ring. But now I want to go into the synthetics ecosystem. I want to reprice my SUSD debt. And if in the current form of things, without the theoretical financialization market makers that Matt was just talking about, I would have to exit out of loop ring, which would be one transaction. It would take some time.

It would be a little bit more gas intensive than a basic L1 transaction. Then I would have to go into the synthetic optimism, L2, in order to do some of the activity going on there. And that would also take another transaction. And it also takes some time. How do you see some of these frictions being smoothed out and down the road? Look, I think Matt's right. It's like the next frontier.

I mean, just to take a slight step back, like sharding, you know, horizontal scaling is where we're going. Like this is Ethereum. Like it doesn't matter what we want to say, label this L2. Like this is inevitable.

Like we have to do something. And I don't think there's going one solution as I said before. And when this is, we're all coming to a lot of heads of trying to figure out how the hell are we going to do this stuff. You know,

I mean, you're, I mean, you mentioned there, David, the cost of gas and stuff. And, you know, of course that will be,

that's going to be unpleasant. I'm not, maybe as Matt said, there'll be a way. to connect the dots between, you know, one roll-up to another roll-up. And I can see that being possible. I don't see how that's going to come out generalizably, but maybe I don't really have a great answer for you.

But I mean, I guess for us, like our attitude and our kind of ethos has always been, let's just iterate, let's throw things out, let's see what sticks, let's get MVP's out there, let's see what people want and use and go with it. So I wish I had a better answer, but we're looking towards, as I said, the four market makers who could help get the assets back out quickly, but to talk to another L2, it feels too early to really have a good answer to that right now. I'd be curious to, anyone else has thoughts. I want to ask you kind of two follow-up questions, but the first is this, you know, in putting kind of the technical hat on that you wear all the time, I've heard some

critics say, well, if you break composability, you're not really solving Ethereum's scalability problem, right? And what they mean is that layer two is not actually solving scalability because the beautiful thing about Ethereum layer one is that all of the applications are composable. So now you're just like fragmenting it. So I've heard critics say that. What's your response to that? Do you think that this is true scalability? Or do you think because it doesn't preserve some of the nice atomic transactions between all of the DeFi money Legos on Ethereum that we're losing something and we're not truly scaling Ethereum. What's your response to that?

I mean, I think we are losing something. And Matt said the same thing. Like, it would be great to stay at NL1, but I think we've just hit the limits of what we can really do. Potentially, there's some innovation in the future that can fix this, but we've had a lot of smart minds on this problem. And it seems like we're back to this idea again, as far as we're scaling.

So I think the best thing we can do as protocols is to, create such a system where potentially, if need be, we might even need to be able to deploy ourselves on different layer twos and find ways that we can bridge. So maybe the solution to that problem before that David mentioned is we find a way to deploy synthetics, version synthetics on loop ring that can interact very nicely with loop ring and then we have a way to bridge that gap from their layer two to our layer two. But at the end of the day, like if we can't find a nice way to do it, like to go from one layer to another layer to, then yeah, yeah, we do break. To some degree, we do great composability. And I guess I don't really have much else to say on that long.

Well, so here's my other follow-up to this, Justin's, because, you know, synthetics interacts with a ton of the other D5 protocols in Ethereum today. So I remember when Dave and I were talking to Kane about this on a community, ask me anything, and he said, hey, you know what synthetics is doing? We're moving out of Manhattan and we're going to Brooklyn. and we asked the question, okay, Kane, like, you know, how are you going to get the other DFI protocols to come to Brooklyn with you, right? And he was like, well, we're going to make Brooklyn freaking awesome and everyone's going to want to be there. So my question to you, Justin, is like as part of solving this composability, you've got with optimistic roll-ups, you've got this,

this essentially almost like a defy chain, right? It can, it can host the other DFI money protocols. But my question is one of coordination. How do you get everyone else to come to Brooklyn with you? What are you seeing along those lines? I mean, I think what else who's really offering, optimism is really offering is the ability to tinker to play. You know, L1 has become prohibited. Now, yes, of course, you could tinker on Kovan or a girlie on the other test net,

but L2 provides the ability to tinker. And I think that's exceptionally powerful. I think perhaps people who aren't engineers don't underestimate the importance of that, having a playground where you can actually start putting things out there and actually working. So, you know, I think that I expect to see lots of interesting innovation happen on later two. Now, the big protocols, some of them are probably sitting there thinking, you know, what do I do, do I wait for a better generalizable ZK? Do I join optimism? And my response to them is like, you should be thinking about this regardless.

And I don't see why it's why you should have been considering ways to potentially fragment, right? Potentially fragment. I don't see why they, you know, I don't see why they wouldn't try and do this. Like now, yes, there's cognitive overhead, but again, I think that the writing's on the wall that we need to do something. Now, Cain's probably more, well, I wouldn't say fashionable. I'm the one who used to live in Brooklyn. It was in Sydney, hardly the most fashionable city in the world. Sorry, Robbie.

The Robbie isn't the best part of Sydney, I think, sorry, I'll, but one of the best. But, yeah, I mean, we definitely have been talking to lots. Another protocols have been, you know, I've been asking us and talking to us and like, we want to get on there. I mean, but they all have their own concerns. Like, you know, you know, let's say a money market goes over there,

like, you know, compound or are they going to be like, okay, well, we're splitting up, you know, maybe they're splitting up our, you know, liquidity. We have liquidity over here and we're over there and how do it. You know, these are particular problems of that. These guys have to do, but we've seen lots of demand.

Lots of people have been asking us and reaching it through us and trying to get out and get on there. And right now, as I said, unfortunately, only synthetics are able to deploy. So I see it coming. I mean, I see it being a pretty cool place, but I, again, don't think it's the bill and all end all. You know, man, I still exist.

And you know what? I'm not in New York anymore, but, you know, I hear Manhattan's starting to come back, you know, to coming the new place because everyone's moved out. So the artists are coming back in. So, you know. Do you have anything to add to the composability discussion before we move to the next topic for the panel?

Yeah, just quickly, I think I have two things. The first one is that I think that, you know, Justin is totally right. It's about making Brooklyn a playground and a really exciting playground. You know, we're going to have Cairo, you can build recreations of this functionality in mutable X. The second thing to say is I think this is why NFTs is an interesting use case for L2. it's less about building that interoperability and more about how can you trade real assets on a blockchain with high security. And so I think that there's less of a critical need there. The third one though is I guess like what does a scaling Ethereum mean?

Is it you are allowing the network effects of the community to be preserved interoperably? That's one definition. Is it you are allowing people to use the layer one settlement based security as the security under which their logic is transacted. I think that's a really compelling definition is I think that's fundamentally what differentiates Ethereum from every other chain out there because either way, they achieve either their security through a less secure mean via consensus mechanism that's completely centralized, although chain is just less valuable and therefore easy to attack. So I think that's my kind of, my real question is what does scaling Ethereum mean?

And I think that it has to be on real layer twos. I don't mind if there's a bunch of fragmented layer twos. I think that's a great future for Ethereum. Because at the end of the day, value is being consumed in the form of eth proofs being paid on chain. And two, economic ban with this being increased because these assets are being transferred at the same level of security as Ethereum. So I would say it absolutely is more so than any other solution.

There's a reason that Vitalik said, eth is on roll-ups as the future. You know, centralized side chains are a betrayal of eth. values literally acquired from him. So I mean, if I'm if I'm taking any cue, I'm taking a cue from the guy who made it. Yeah. And you know, you said the magic words, at least for me, economic bandwidth. I have been, David and I have both been such a proponent of this term because I do think that scalability is so narrowly defined if you just think about it in terms of transactions per second on the main chain, right? Ignore so many aspects of it, nor is the scalability of the community,

ignores the scalability of user experience, ignores the scalability of economic security, and it ignores the scalability of trustless economic bandwidth. And when you have an asset like ETH, of course, that acts as a store of value, doesn't have any other centralized intermediary, and you're able to preserve that on a layer two. Well, aren't you scaling? You are scaling, trustless economic bandwidth, are you not? So I totally agree with that last point, Robbie, that we have to also broaden and expand the definition of scalability for, these money systems. I think David is going to take the next question for the panel. Yeah. Speaking of money systems, the current form of getting value into Ethereum is you sign up

with Coinbase, you sign up with Gemini, you buy your ether and then you get it deposited to your own Ethereum address, whether it's your metamask, your ledger. But that's like you getting injected with like your, you know, your first little amount of ether, you're getting injected into the heart of Manhattan, where you don't really, like, things are scary. The L2 world is what really gets me bullish about the possibility of L2s is that each individual L2 offers a unique on-ramp possibility into Ethereum, where if people are playing with like games on the immutable X platform, what about the possibility of purchasing your NFTs with your credit card on the immutable X?

And all of a sudden, there's some value flow from, you know, the legacy world, that, you know, the banked world into the, uh, the immutable XL2, which is the next step into a bankless life. So, Robbie, let's start with you. What kind of things could happen or do you have in the works with value flows directly onto the L2 that's not actually coming straight from Ethereum? Yeah, that's the whole point. And I think that's why we almost have a separate idea to find more financial or defy L2s.

Is that what I specialize in is NFTs. that's obviously what we're trying to scale. And I think NFTs have the potential to capture an enormous amount of value in the real world. That's video game assets for one. There was 90 billion US dollars worth of in-game items, not box copies. Literally the items sold last year to gamers. And they received zero dollars of real value. They could sell none of that.

So I think that's a right market. gamers are already digital natives. And we're already seeing, you know, major companies starting to dip their toes to space, whether it's the initiatives from Ubisoft, who by the way, the main thing they care about, because the Ubisoft, you know, blockchain team, ultimately the thing that scares them is, what if they put the Ubisoft brand name on something that ends up breaking, that asset is taken? And so they fundamentally care about security. That's why Ethereum is going to be the winner, because if you put World of Warcraft on a blockchain,

you can't put it on a flow. You can't put it on a, you know, a centralized side chain which can't support that level of value. The 200 billion plus worth of economic bandwidth of Ethereum can. That's why I'm bullish. And 100%, the future is it's not people interacting with apps and things. Maybe that's kind of a developer mindset, and that's where a lot of this value originates. It's, hey, this is a new standard for digital assets. If you interact with a game, what you expect from your ownership quality is that you can sell it.

And you don't even know, you don't even need to know how the security works under the hood. You just know that, hey, these are the rights I get as a user. I pay with a credit card. I get these tradable properties. And yes, it's being minted into an L2 on Ethereum for free via an API called by that games publisher. And then I see it going way beyond gaming items as well. I mean, NFTs have the potential to encapsulate the entire world's financial system

outside of fundable tokens. Options contracts are unique financial contracts. Insurance contracts are based on the unique underlying circumstances at the home. We've seen digital art sell $100 million worth this year. We've seen sports moments being tokenized. It's this like fundamentally brand new world. And I think that that world belongs in the infrastructure of Ethereum. You'll love to hear it.

Matt, when can I get my bank account injected into the Fiat or into the loop ring L2? Yeah, I'm glad to know this is part of your bulk case for loop ring now. As you said before, so I'll have to work harder on it. Yeah, I mean, this is, I guess, like a pretty boring topic. It's like how much effort and how hard could we work on like regulatory things, right? Like we've been squarely in Ethereum land for three and a half years. It's nice that like we don't worry too much about regulation. It's, you know, it's, I kind of hate having to muddy up the waters with thinking about fiat and different jurisdictions and everything is just so much more simple on Ethereum.

the global jurisdiction and stuff like that. But so, Matt, can I ask a question that gets at the heart of this? Like, so haven't the crypto banks like Coinbase and Gemini and, you know, even Binance at some extent already figured that out? Like so why couldn't they just rather than withdraw to Ethereum mainnet for my ETH, have a button that says withdraw to loop ring, right? And after I make my purchases, they're kind of the Fiat bridge, the Fiat on ramp. Anyway, I just want an on-ramp directly from these crypto banks directly to loop ring.

And they could solve the regulatory stuff for you. They already have that out of the box. How close are we to something like that? Or is there some challenge with that that we're not seeing? Right. Great point. And this is, I guess, a business. So, first of all, that can be done right now.

They could have done that six months ago. Although now, I guess, gas fees sustainably high would be like a greater impetus on them because either they're swallowing the high gas cost to give their user assets in a reasonable time or they're passing it on to users for a $10-15 withdrawal. So we have those conversations. I guess a kind of maybe unexpected business answer for loop ring specifically is

so they could just use our API and forget looping the exchange, the AMM. It's just this layer two where somebody could, you know, they can just throw some dye across. And it goes to an Ethereum address, right? There's no special, you use your own Ethereum address on loop ring. There's no, nothing funky that needs to happen, just an API call. And it ends up in this address's kind of loopering layer two shelf, which all they need is

their Ethereum address to access. But what I was going to say is it's a bit of a business case. Maybe they, maybe some exchanges are reluctant to have some, some assets kind of pipe in to the loopering system because then we might eat their cake or eat their lunch of it. Like, right? It's like, why am I just zapping it into you where you are a finance that cannot act evil? Like, why would Binance like pipe a billion dollars of fiat through loopering in a day when those users kind of could like, oh, maybe I want to get off here and, you know, and continue

using loop ring. So I'm kind of, if this wasn't already in people's head, I kind of don't like saying it because maybe now I've given them a reason to push back against us. But yeah, the truth is like, yeah, sorry. I see your point, Matt. And like, so maybe a Bynance because they have their, their Eith killer, you know, the Bynance chain, maybe they might be more reluctant to do something with loop ring. But it's like, let me bring Justin to this conversation here too and get his thoughts on this. You know, the Winklevoss twins are regular bankless listeners, and they are very involved in Gemini, the exchange, of course. Like Justin, how do you get Gemini to do a direct Fiat on ramp into the synthetics-optimistic roll-up that you're building? Do you think that is the

way forward to get Fiat into the space, or do you have an alternative idea on that? What would you say to the Winklevoss twins if they're listening now? Yeah, I mean, basically we just need a way for these, like, centralizing exchanges, for example, to get access to the tokens, right? Like, it's no reason why they couldn't, once they know the addresses the contracts and they've got, you know, they've got balances set up on layer two for their, you know, various, you know, wallets. It's easy enough for them just to send off.

They could go, okay, there's just SNX. Right now we have SNX living on L2. Right now transfers are disabled because we're in the studio on main net thing, but once real that comes along. There's no reason why they couldn't acquire S&X, have it set up on a certain wallet on an L2, and then plug in a Fiat omram. And off they go. Bob's your uncle. They can be like his Fiat and then S&X. So there's no technical reason that they couldn't just do that. And I'm just curious, Justin, your thoughts on maybe all there has to be is kind of an economic reason to do this, right? So in the very early stages of Ethereum, no exchange supported

Ethereum. But as it grew, it became impossible to ignore. And is that, sort of what happens with layer two. I mean, Matt's here on loop ring with 250 million in total octal value. You guys have 160 million. If this is a billion or more, does this just not become impossible for exchanges to ignore? And they build those ramps naturally because that's where the economic value is. Justin, do you see it playing out like that? Yeah, I mean, it's the same way, like why they're listing all the, why is buying out, it's listing every token under the sun. Yeah, exactly. To see people are trading it. Like, you've got to do it because that's The market decides to dictate it, you know?

Yeah. You know, it's really, we're just talking about developer cycles, right? So they've got to decide whether or not they want to invest the time and, you know, what it's like to try to invest developer cycles that there's enough, you know, suits saying we need to do this for money. Then though, the developers usually have to get their total long market, we do it. So, guys, we have a lot of folks that are into crypto investing, obviously. They're bullish on various defy tokens.

They're bullish on ETH. But there's a question, I think, of how layer two constructs might impact the underlying ETH value capture thesis. And I'm wondering, Robbie, if you have any thoughts on this, are these layer two solutions value accretive to something like ETH, or are they value competitive? Do they take away from ETH's value proposition as a whole? Maybe we'll start with you, Robbie. Short answer, L2's other savior of Ethereum's price.

They're the only thing holding back other scalability solutions who can offer UX that gives people the critical revenue they need right now, but fundamentally don't use Ethereum as a security or settlement layer from destroying us. And I mean, you know, Flo raised a quarter billion dollars the other day. Rowan was on Twitter saying, you know, Ethereum's all great in that, but Flow is ready for mainstream NFTs. I don't think he's just trying to say that to mainstream NFTs. I think it's trying to say that he wants Ethereum to be zero,

and he wants Flow to be the dominant chain for all transactions. And he thinks NFTs are a good entry point to that. Now, that's fine. If you want to use Flow, go ahead. You can also use my old laptop with a database, and I'll run it for you for $2 million a year. But fundamentally, if you'll use the definition that, you know, you guys popularize, which is capital asset,

which is a form of economic bandwidth, store of value, the only thing, that means two things. One, you need to at some point consuming. If you're not consuming ETH, you are not providing consumable demand for Ethereum. Two, you need to rely on Ethereum as your layer one form of security. That is the definition of a layer two. By doing that, you increase Ethereum's value proposition via economic bandwidth. So quite frankly, I think any solution that is not a roll-up on Ethereum right now is an ETH killer, is an ETH competitor.

Even PokerDot, the way, and the reason that everyone's positioning themselves as not ETH killers is because it's a dumb thing to do. Like I don't swear. It's like you're going to be hated by $200 billion worth of capital. It's not a smart move. So that positioning is, hey, we're synergistic. Hey, we're poker it up. We're a para chain. We're doing this, this and this. We're synergizing.

It's crap. Just look at the fundamentals. Either you use a theory and fewer security and you consume it, you're good for its value or you don't and you're not. Oh my God. I really want to see the podcast where it's a mutable X versus flow. I want to see kind of that debate sound off now that I've heard Robbie.

I'll have to be more polite. Guys, Matt, Justin, any other thoughts on that? Value Accretive? Matt, any comments? Robbie is a great spokesperson for that. No, he's 100% right. Like, we kind of lose sight about what the label layer two means. Like people say, like anything scaling is layer two.

But yeah, it has to be strict. You have to inherit Ethereum security guarantees, which means you're paying, as I like how he says that, you know, it still remains a consumable. You're broadening the economic bandwidth because you're a little vertical. Or once David, I was on here and he described the theorem as like a pier and then you go on to like your loop ring ride at the end, you know, like so these things, like the end of that pier is like its own little economy where, you know, toes are going in. So the bandwidth is it's 100% creative.

and I do think it is just massively bullish. Roll-ups, yeah, like, you know, we're talking East maximalism before. I'm a roll-up maximalist. And I didn't even go so far, you know, maybe just to chat, to more friendly jab here, but like, I'm a ZK roll-up person. Like, I think those, I think ZK rolls are kind of like here now for the application-specific stuff.

Optimistic roll-ups are like right here, and they're going to do a lot of generalizable stuff. And then, you know, ZK. Rolp's kind of re-leapfrog when you have like the ZK snark and the their feet advance and then you do everything back in a validity proof way. But yeah, all this is, it's just massively creative. And I do, you know, it's funny to Robbie say about like the way they're positioning themselves. I like to think that maybe I tried to coin something. I'm not sure, but like Ethereum killers are rebranding themselves as Ethanhancers.

Well, they don't use that word, but I use that word. Everything must be an e-enhancer now. Otherwise, it's just really, really stupid on you. I mean, we saw maybe a sound bite these past few days talking, putting that in jeopardy, but from different chains saying that there are no network effects that somebody may laugh when he hears about Ethereum network effects. But you have to respect the network effect. You have to respect the network.

It's just, it's massively creative. I don't know if there's even a bearish interpretation. I haven't heard one of layer two for Ethereum. Besides the potential, the composability breaking, I don't see any kind of value. There's no leaky bucket where this kind of bypasses Ethereum accruing the value, in my opinion. Justin, do you want to add anything to this conversation?

Any thoughts here? Yeah, I mean, I totally agree with both Matt and Robbie and Robbie quite very eloquently. I put forth his thesis that, you know, the layer two needs to be something that relies on ether security, which I think is a really nice way I put it. I guess my main thought, and it's a bit more meta, is that one thing I really like about Ethereum is I feel like it,

you know, it's decentralized, of course, as Robbie said, but the way that it, like, they put this money where its mouth is in terms of the way the EF supports, you know, various implementations of the protocol, like, you know, the EBM, like here's, here's a spec, go on, go at it, right? There's your JavaScript, you're Rust, yeah, go, and then the same thing with, with, uh, it's good a dot, right? Let's go with my house, prismatic. You know, and I feel like this is where it's the same thing with, with roll-ups, right? Like, here are different implementations of roll-ups and have out of it. I think there is no one solution there,

just the specifications based on, you know, security and usability and, you know, people, We are all expected to try to put things out to iterate and things will bubble up. The right things will bubble up. And I love that about the theorem. Like, I feel like there isn't this, there isn't this, you know, dictator down on high saying this is the way it needs to be. And, you know, credits of the talent because he does a pretty good job of trying to stand back and let things, let things evolve around him rather than, you know, trying to maneuver

than stewardship. You guys, this has been such a fantastic conversation. So thank you guys all for so much of your time and your insights. It's really valuable to me and, of course, also to the listeners. And I want to finish up with this last final lightning question. So in just two, three, four, just a few sentences, can you guys give us the maximally successful scenario of the long-term version of your app? So like when L2 is completely rolled out and also under the conditions of maximal global

adoption, what does your app do when you have as much scale as you want and all of the things that you guys are trying to get done, you do get done? Justin, let's start with you. Users can basically get a synthetic version of any kind of asset they want. Anyone around the world can take it and no one can stop them. Right. They get access to whatever they need, whatever they need it. And it's quickly as they can.

And it doesn't cost them a nominal way. Matt, what's the maximally successful version of loop ring? Loop ring out competing legacy fintech applications. You know, we don't compete with each other on this. I mean, some of us are not in the same verticals, but just any user can trade any Ethereum-based asset. So not synthetics, not a synthetic asset, but just if it's on Ethereum, or actually we can trade synthetics, but, you know, just trade anything instant finality, super cheap, and payments

as well, just complete freedom. You know, we've started using the little slogan for our app, freedom at your fingertips. that is what Ethereum allows us. We can never misbehave. Nobody could take it from you. Nobody could stop you. That's what we hope loopering becomes. Matt, you must be bearish because I was hoping in your answer,

you would have said the words Venmo, Robin Hood, and Central Bank digital currencies. But I guess you're just focused on a little bit more meta level right there. True. I wanted to keep it. You know, somebody actually brought it to my attention that on our site it says feeling, you probably read it, like Venmo and Robin Hood and user experience, but then they said, do you still want to say Robin Hood on there? Should you remove that? So, but we haven't

removed it. Yeah, give it all this stuff. But yeah, I'll leave it there. Robbie, what's the maximally successful version of Immutable and Immutable X? Yeah, I think it's the marketplace for all unique assets. worldwide or the exchange protocol. That's it. Full stop. All right, you guys, this has been such a fantastic episode. Again, we have Robbie Ferguson, who is at the Immutable Project, building out the marketplace for L2s for NFTs. We have Matt Feinstone business development at Loopring, the ZK Roll-Ups Exchange and Payments Protocol. And of course, we have Justin Moses, CTO of Synthetics, leading the charge to

deploy synthetics on optimistic roll-ups. You guys, is it. I think the listeners are really going to enjoy this one. So thank you so much for giving us your time and being here. Thanks much, Estableness. Thanks, right. Thank you, guys. All right, bankless listeners, action items. If you want a primer on roll-ups,

we just had Vitalik on the show who gives a great overview of roll-ups in sort of layman's language. We will include a link to that in the show notes. We will also include links to loop ring, immutable X, and synthetics new, new optimism L2, because here's the great thing. You can start using layer two now today. It's here, as our panel said. So start using it. You don't have to keep with on the main net and the gas fee

transactions. We could start using loopering immutable and synthetics now on layer two. Also, David, last and final request, we want those bull market stars on iTunes. How are we doing on our five star ratings on iTunes, my friend. We are always trying to do better than where we currently are at. As you guys listen to during this podcast, L2 is here, but yet people somehow don't realize it yet. And you know why? It's because we don't have enough five-star reviews on iTunes. That's why. That's exactly why. If you could, please go to wherever you listen to your podcast and give us those five-star reviews. We're trying to get bankless to the top of the iTunes, business and investing charts so that everyone can hear the great gospel of Ethereum. So if you could, please

go ahead and do that. We would really appreciate it. All right. If you care about L2, give us those five-star reviews. That's what David said. All right. Risk and disclaimers, everyone. Nope. We're moving the risks and disclaimers to the end of the debrief, which, like I said, we are going to add in right here. So just as a recap, Ryan and I do these debriefs every single episode. Right after we record with our guests, we hop into another call and record our thoughts, our lessons learned, our post-episode debriefs. And this is something that we do. for the bankless premium subscribers.

We are giving it out on the free RSS feed so that people can get a taste of what it's like to listen to a debrief in case that is something that you are interested in. If you like the debriefs, there is a link in the show notes so you can go and subscribe to the bankless premium RSS feed where you will get these every time the podcast gets released. I hope you guys enjoy it.

I always have a ton of fun with these with Ryan at the end of every single episode. And it's honestly where I kind of get some of my best learning done. The podcasts are always super informative, but also the debrief with Ryan is where I really synthesize and integrate a lot of information. And I know Heath thinks similarly as well. So I hope you guys enjoy it. Here we go. David.

All right. What you think of that, man? Is L2 here? Is layer two here? So I got my loopring wallet up and running last week, and I made just some quick east to USDT transfers. It's actually the first and only time I've owned USDT is on loopering. It was a breeze, dude. It was fantastic.

It's exactly the experience that I would enjoy. And like I actually kind of feel good about paying these like penny fees on loop ring because it's not free. It's not free. There are fees. But coming out of that conversation that we had in the rant that we did about Robin Hood and then the conversations that we had with the Winkle Voss, the fee, the free model of Robin Hood is actually toxic. And so the pennies that you pay on the loop ring L2 along with the instant transatlantic. which are, of course, just an absolute treat. It makes me feel good.

It's like, yes, I should be paying pennies for this. That feels like the right price. And so loop ring or loopering, the L2 is absolutely here. And I think when the Immutable X platform launches with NFTs, I'll finally dive back into my Gosson chain cards and start playing some games there. Yeah, synthetics is the only one I haven't really tried. Of course, Immutable X because it hasn't launched yet.

But loopring does seem fantastic. And David, it just seems like the missing piece here. is getting some Fiat on ramps directly into loop ring. Matt had an interesting comment. He said that maybe some of the exchanges might see it as competitive, but I don't think they will. You know, like I think that the exchanges have their secret sauce,

which is, you know, they are a bridge between the legacy financial world and this new financial system, right? And like they've got that locked. You know, they've have all the regulatory boxes checked. They've got a foot in the old world, in the foot in the new world, they're just going to go where the economic activity is.

And if that economic activity lives in Ethereum layer two, whether it's loop ring or whether it's an optimistic roll-up, that's where they're going to drop users off. Ultimately, it's going to be up to their users' demand, their customers' demand. So we have to demand and advocate for getting exchanges to support layer two directly. Once we have that, David, this space is going to absolutely like blow up in terms of use. I was amazed that loop ring already has 250 million total locked value. And that's without a Fiat on ramp. That's how hungry people are for cheap layer two solutions right now.

Yeah. And I think the, you know, the Fiat on ramp into L2, it's destined to happen. And I think I think I can confidently say that because there's a little bit of a Moloch trap going on, right, where it's in the best interest of, exchanges, centralized exchanges, to not support loopering because it is their native competitor, right? So why would they want to benefit loopering because it's their loss? But if every single centralized exchange is operating under that paradigm, then it only takes one centralized exchange to defect and be that one centralized exchange that charges that $15 fee to get your fiat

deposited into loopering. It only takes one, right? And so, and I don't even think that's why that's happening. I don't think centralized exchanges are like, no, loopering, loop ring is going to eat, eat my lunch. I don't think they seem as a threat. I don't, I don't think they think that way. I think it's just simply a matter of there's just not enough demand there. And that's why I've been trying to like on Twitter and on the podcast be like loopering, looping, looping, looping, because it is our version of both Venmo and Robin Hood that is the providing the user experience that people like. And so is, and the other, the thing that they still have to fight for, the thing that they still haven't solved, which is not really something that is solvable by them is liquidity.

Loopering liquidity is really strong for ETHUSDT. It's really strong for ETH DPI, actually, because I think the index co-op actually subsidizes with index rewards for ETH DPI liquidity providers on loop ring. But after that, I think the liquidity starts to really drop off. So that's actually something that I've been positioning myself for. As soon as the market continues a little bit, I think I might be. be transferring some eth and some some of my defy tokens over to loopering just to provide

liquidity there. Yeah, that's a public good, but you also get, you also get paid for it as well. Yeah. So I I mean, the best kind of public good is the one that pays me. Yeah, I mean, I'm definitely bullish on what those guys

are saying. I mean, this time it does feel different. I mean, I, we made this comment during the podcast, but the children of 2017, I think felt like scalability was just around the corner. And it never turned out to be the case. Like, state channels kind of evaporated into, like, not really being practical for the types of defy applications. We needed plasma really never panned out in a way, but like, this feels different this time. And I think you don't have to believe the panelists and the people we talk to. You don't

even have to believe us, just go out and start using the applications. The thing about loop ring you could feel good about too is it's not fake defy. There's a lot of like David like fake defy out there right now. Like I mean, to be honest, man, Binance. Justin's learned this two years ago when at consensus he branded himself and put himself everywhere with the tagline Dare to Defi in 2018. Like people have been writing on a defy brand forever. Yeah. And now that's, that it's popular, the more they're obviously going to run on it. Like CZ from Binance, you know, talked about CDFI. That's what the finance chain is, essentially. But I mean, 21 validators, none of it's really open source, all controlled by Binance elected entities.

Oh my God, dude, that's the same, that's the same banking cartel system we just came from. That's not why I'm going bankless. That's not why you're going bankless. It's not even an improvement to the existing system we have, when insiders can kind of like front run you or reverse transactions or censor things. I guess you don't have to worry about hacks in those scenarios because, you know, somebody could just reverse the transaction. But the thing about these layer two solutions, particularly like the ones that are secured by Ethereum, is they are bankless. So when you're using loop ring, you know you are using a trustless system that is secured by Ethereum. And man, that feels good too, Yeah, and I think one thing that all of these, all these implementers, these defy implementers,

we need to get, we need to sponsor some like NFT where somebody like draws like the defy implementers like in some sort of event itself. Anyways, the one thing that they all seem to understand pretty well and all talk about is that it's, it's, it's L2, real L2s are an extension of Ethereum native security. But I think they all started to hint at this as well is when you, when you have that box checked and you are an extension of Ethereum native security, you are also an native extension of the Ethereum community, right? When you don't sacrifice values, you don't sacrifice the community. And there's that extension of values is really, really important. It's not just about the security. It's that what comes with the security. It's the whole package. It's everything.

And that's what C.D.5 or side chains. That's what they don't bring along. That's what they don't understand. Did you hear David the passion in which, uh, in particular, all of them, but in particular Robbie addressed this with, Robbie from a mutable X, right? So I mean, he was just like, look, uh, competing projects, competing Ethereum killer projects have literally bribed us to leave Ethereum and come to their chain. Like literally, we will give you millions of dollars to go do this, right? Um, but his point was like, it's not worth it for us. These projects don't have a soul. They don't have a long-term future. It's a deal with the devil.

We are thinking about building immutable X for the long term, right? And so we're not going to take these shortcuts, right? It's like $250 million war chest can't buy your project a soul is the bottom line here. And so we saw some of that loyalty come through. And some people might think, oh, my God, like these are just actualist talker, right? Like what's loyalty? People talking about faith? Who are these people?

Look, man. Look, man, it's not so, be, if you're maximalist, be maximalist to a set of ideals, right, to a set of values. Like, I would consider myself not an Ethereum maximalist, but like a decentralization maximalist, a bankless maximalist. Like, I care deeply about these things because if we just recreate the system that we just left, we haven't done anything in crypto. Like, we haven't given anything back to the world. That's not why I'm here. And I don't think that's why any of these projects. are here. So it wasn't so much that they're like loyal to Ethereum, but they are loyal to you, the set of values that are baked into the Ethereum protocol and the Ethereum social contract.

And I just saw that, you know, come through. The other thing I saw was something that Justin kept going back to. And wait, before you turn to Justin, pause on that thought, because I want to riff on that. Think about how meaningful it is when the C, C, C, you know, you. or I think, I think president, co-president that Robbie is, turns down, I think what he said was $250,000 or maybe even more, when he turns that down. And he's not doing that because he has like this like political alignment to Ethereum. I mean, he's making a rational choice. He's saying that the choice to stay on Ethereum is worth more than the bribe from other chains.

Yeah. And not only is Ethereum not bribing him. Ethereum is expensive for him. Like immutable has spent a ton of money on gas. And so not only is Ethereum not bribing him, but they're actually costing him money. And he still thinks that the benefit of staying on Ethereum is worth it. Right.

And when he said that I was reminded of our conversation with Vitalik on his 2020 Reflections podcast with us, where he said that there are some incentives that aren't money, right? There are incentives such as meaning and purpose and having a soul. right? And that's what you find on Ethereum. Ethereum has culture. Ethereum has soul. And if you leave Ethereum for Binance chain or Eos or whatever, you're giving up the culture and the soul and the memes and the community. And that's the whole point of this whole revolution is all of those things. Yeah, it goes back to Naval's statement, you know, play long-term games with long-term

people. And this is like these projects are playing a long-term game with a long-term network, right? They are valuing that higher than any short-term profits or any sort of bribes competing chains might offer. The other point I was going to get to about Justin is he kept referencing sort of the development style that we've seen so much in Ethereum and the development of its protocol, but also the development of defy and layer twos, which is kind of this difference between like the cathedral and the bazaar. So this guy wrote a book in 1999 called The Cathedral and the Bazaar. And it was really comparing kind of the open source movement versus like the top down traditional software development that used to happen. So that would be the cathedral. Like here are the specifications. Right.

Now the overlords will pass these specifications to you, the developers. And you will implement it per the requirements. Well, the bazaar is not like that at all. It's chaos. It's an open market. Anyone can come. It's permissionless. But what ends up happening with like a Linux versus Windows is open source Linux wins.

It wins like from a game theoretic perspective. And it wins because in the bizarre, like the best vendors kind of rise to the top. And all of the experiments are tried. And this is really the Ethereum community's development ethos when it comes to anything. But when it comes to layer twos, like all of the things. things are being tried. I go back to like Bitcoin. How is Bitcoin going to scale aside from like side chains like Binance and Coinbase and crypto banks, right? It's got that. But lightning. Like one, we have one solution. It's like this cathedral based approach like which is which is so

strange to me. But Ethereum, what's it doing? Well, it's trying like everything that's possible and through that is going to converge on the best solution. So it's this bizarre-like experimentation that Justin kept coming back to that, I think, is so important in like the organic material of a developer ecosystem like this. Yeah, the cathedral versus bizarre metaphor is the way I interpret that is order versus chaos. And you said order when you call it the bizarre. And like the cathedral is the hierarchy, the rules, the constructs, these structures that when they are good because they provide order to our lives.

But as they grow older and older and older, they grow more and more rigid and calcified and fragile. Brittle, yeah, brittle and oppressive, right? Because when these gargantuan structures grow too large, you can't climb them anymore, right? You can't climb up the social ladder of social orders and social structures. And so therefore,

we turn to the bazaar, which is chaos, which is creative destruction, which is order out of just this cesspool of ideas where just atoms and atoms and atoms of ideas are colliding against each other and they create these new structures that are no longer oppressive,

that are no longer. And it looks like it shouldn't work. It looks like it shouldn't work from the outside. You're like, oh my God, this is pure chaos. How is any of this stuff? There's no grand unified plan. How is any of this stuff going to work out? And it turns out to work out better

because all of the things are tried. Yeah, organically. All of the things are tried. and only the good thing stick. And that's what gets me so bullish about Ethereum is that it's what we call chaotic organization. It's organization through chaos. It's not top-down organization.

It's bottom-up organization. And only the best things are chosen to survive via chaotic organization. Yeah, yeah, exactly. So, okay, so when you sort of zoom out and look at layer two, it feels like it's here partially, but it also feels like it's not complete.

yet, right? Like, I am waiting for a optimistic roll-up for Defi to come to fruition, right? Like, it's good that synthetics is there and trying it, but just synthetics in its own optimistic roll-up is not enough. I am really looking forward to seeing what's going to happen with Uniswap. They're kind of the next big mover that's sort of on my radar. And last I understood, they were going in a optimistic roll-up type direction in the same sort of direction that the synthetics is. But Uniswap has been a little quiet recently. I think they're keeping things underwrapped

and they're just going to do a big reveal at some point. But that to me is the next major phase of this. Can we get multiple D5 protocols on the same optimistic roll-up? And then after that, probably the next frontier is how can we get integration and interoperability across the roll-ups themselves. How do we build those bridges, which seems like it's a whole other topic of conversation and research is going to come down later. But like what were your takeaways?

How close does this stuff feel to you? Yeah, it feels like everyone is kind of in this sort of like standoff where everyone, everyone is in a circle. Uniswap is looking at compound. Compound is looking at synthetics. Synthetics is looking to make her down. They're like, which, what's, what are you going to do? Like, what roll up are you going on to? Because if you go on to that one,

that might change my decision making, right? And so everyone's kind of waiting for everyone else to make moves. And like in that scenario, it's like when one person makes a move, everyone starts to make moves, right? And so like I kind of think we're in this holding pattern for we're all kind of waiting for uniswap. Like what's uniswap going to do? Like, what the hell is this compound cash chain? What, what's that doing? What are we going to do there? And I think we're all kind of like in this calm before. or just the mass, mass, just like Exodus onto L2s, right? We all, where we all kind of figured it out.

And, you know, while I kind of illustrate that that's going to just happen at the flick of a switch, it's actually not going to be like that at all. It won't be like that. It'll still be confusing. It'll still be chaos. It's still going to take some time for that really, for that dust to settle. And in the meantime, it's actually, it's going to be painful. Like, there's still going to be gas fees.

They're going to be gas fees for the next six months. We're going to hear about it. on Twitter, on crypto Twitter. But I think going along with the bankless narrative of like, you can venture out onto the frontier and gain access to new knowledge, some people still think that L2 isn't here, yet you can try the liquidity on ETH to Tether on loopering is insane. You can,

if you are just trading ETH to Tether or ETH dollars and you want to do that in a defy way, we already have that. That's on loopering. And so some people have already figured that out. And if you keep on, and the way I've been illustrating this is that, that scale and L2 is happening at the margins,

and it's marching inwards, right? It's marching into the core of Ethereum where the rest of us are. And it really hasn't, that slow march inwards hasn't really met the average user yet. Because if you really want to find L2, you have to go outwards, you have to go to the frontier,

you have to go to the margins. But the margins are expanding, right? Liquidity on loopering is expanding. Synthetics is building out, it's staking, it's expanding. The real estate of L2 is expanding. It just hasn't reached the fold yet. It hasn't reached the core of Ethereum yet. Yeah, you mentioned two things there. One is

this is going to be painful in the short run, right? And the second thing you mentioned, you talked about the, like, the term narrative. And I'm wondering your thoughts on this because I, you know, I recently tweeted out, if you take like just two of the quote unquote Eve killers, alternative layer ones to Ethereum, atoms, so the Cosmos Network, and Pocodot, those two projects are are 35 billion in terms of market cap, right? And compare those to the only two projects that are, you know, there are more than two, but two projects that are kind of large enough to surface

on the top 100 coin market cap are loop ring and Madik, now called Polygon. And those collectively are about like one billion, okay, or like 1.5 billion. So. I think less than one billion. I think loop ring is 500 million and billion, or 500 million.

I was going fully diluted valuation. Okay, fair enough. Like somewhere around there. That is the smarter way to view things, by the way, for the listeners. So, okay, so basically a 30x. These Heath killers are kind of a 30x. And so the question is narrative, because we know that the market in the short run,

short to medium run, trades completely on narrative, not on fundamentals. Fundamentals are almost like a bare market. thing, right? So like the best time to invest in fundamentals, like 2018, 2019. Right. Now, it's been there on out. So we're beyond fundamentals, my friend. We're way past. It's just narrative. It's just narrative. We just care about narratives because it's a bull run. Now, if you're a long-term thinker and you're not interested in like trading on narratives, which you have to do if you're playing the narrative game, then you can do things like we talked about

invest in need, invests in Bitcoin, invests the DPI and have a good night's sleep, right? But But anyway, the market's going to get completely insane with narratives, especially as ETH gas fees, you said short-term pain. They're going to be painful for a while. Like, the migration to layer two isn't going to be like, we snap our fingers. And suddenly, I keep getting these tweets and people saying like, when are the gas fees going down? Right.

And I'm like, they're never going to go down on later. They're never going down. They're never going down. They're never going down. So in this world where it's painful. the short run, layer two is getting built out, gas fees aren't going down. It feels to me like these alternative layer ones have maybe not a lot of fundamental runway, but they have a lot of narrative runway. And that's why they are like pumping to the level they are. And that might continue,

David, if this continues to be painful in the short run. What are your thoughts on that? Yeah, it's an unfortunate reality. And like at the end of the day, this is just kind of I feel like this is just economics, right? Like there's so much demand for Ethereum, and it has not yet built out its own L2 ecosystem to capture its own demand. Therefore, the demand is overflowing. And so for a short while, perhaps there will be demand

of Pocodot, right? Perhaps there will be demand of finance smart chain. There's this thing on finance smart chain that's like a uniswap fork that is called pancake swap or something, like whatever, weird name, but so is uniswap, I guess. And they actually, it's actually doing pretty,

comparable volume. I think like, I think it's doing like roughly one-sixth the volume of uniswap, which is pretty good because uniswap is doing insane volume. So like there's this app like uniswap-like application on Binaned Smart Chain that's doing one-sixth of volume. So like there is overflow and there is now volume there and likely because of Ethereum gas fees. And so the fundamentals of buying smart chain are improving. But at the end of the day, it's because it's overflow from Ethereum. Like congratulations, Pancake Swap. You have Uniswap sloppy, sloppy second. Like all the value that Uniswap wasn't able to capture because it hasn't built out its own L2, which is working on, it's making its way to, you know, centralized exchanges, right? That makes sense.

As soon as Ethereum offers the wells and the new real estate to capture its own value, it's staying on Ethereum. Because like we've been saying, there's soul on Ethereum, there's community on Ethereum, there's purpose on Ethereum. And you don't find that on Binance Smart Chain. So people are going to prioritize native Ethereum over Binance Smart Chain. You know what else is on Ethereum, David, is economic bandwidth, particularly trustless economic bandwidth. And I could tell that Robbie is a bankless consumer because he brought that very term up, which was awesome. That's something you can't get on the Binance chain. You can't get a completely crypto economically settled store of value asset like ETH on the Binance chain.

There's all sorts of trusted parties, whether it's, you know, the 21 validators that finance elects involved and there's no actual like crypto-native store of value on the finance chain. So all the transactions that you were talking about and all the volume, none of that is trustless economic values, things like USDT and stable coins that also have tethers and settlement in the real world too. So I do think the way Robbie was talking about it and seeing that there are, it's scalability is more than just transactions per second, right? It's like market cap of the base layer asset. It is the community, the ecosystem of applications, like the social contract,

all of these things are part of the scalability story of a chain and need to be looked at too. Anything else? Any other takeaways from that up? Yeah, there's one remaining part. that that was my big takeaway. And we saw this metaphor come out, I think from Ashley Schap, I think is the tweetier behind this, but it was like a, in the early days of the cell phone, it was like 12 inches long and cost like $4,000, right?

This is just how technology works. It's really, really expensive and it's shitty, but you don't really have any comparative because it's the first time that technology has ever came around. And that's where we are with Ethereum, right? It's really expensive. It's still pretty slow. We still don't have Ethereum 2.0. But that's just how technology works.

And when Robbie was talking about NFTs, I was thinking about like the NFT hype, the NFT mania that's going on right now is awesome. But it's actually not the NFTs that Immutable X, the L2 for Gaz and Chain, and Immutable is really building. Because Immutable X is building NFTs that are small in value. Yet the NFTs that are being all the, making all the hype and all the splash today are thousands and thousands and thousands of dollars, which makes sense because you have to pay the gas fees. Like why are people aren't trading these like 25 cent you know two dollar gaza chain cards because it doesn't make any sense. They are they are doing the you know, $10,000 plus NFTs, the BEPL NFTs, the NBA top shot NFTs that are worth you know, people made like some some like point seven

million dollars like those are the NFTs that are hot right now. And the reason why they're hot is because those are the only feasible NFTs. And so there's going to be when, when it means. mutable X opens up and there's going to be like there's going to be room for you know microtransactions like one of the great promises of this cryptocurrency industry is microtransactions when until last time you've heard the phrase micro transactions like it's been a while i remember when bitcoiners used to talk about uh right money in micro transactions before that came like totally unfeasible in the bitcoin network and it just returned it to store value

store value, story of value, story of value. And one part that we didn't get in the value accretive versus value competitive model conversation was that like, say there's all this economic activity with like small units on immutable X, like tons of small units, like tons of volume because they're all, like, cards are flying all over the place. And then we can also say the same thing with like the loop ring L2 and the synthetics L2. And there's all this economic activity going on on the L2s that's not. going on on Ethereum. Well, the L2 is like this reservoir. And we talked about this conversation with Nick Carter when we talked about the block space fee cycle where on the L1 the fees go up and that

halted economic activity. Yeah. And then the gas fees go down and people start to transact again. The reason why it halted was that because there was no alternative place to escape to. And so these L2s are actually like these batteries of economic activity. And that And that's, I think, a really strong argument for why all these L2s are going to be value accreative to ether the asset is because when people are pushed off of the main Ethereum L1 because of high gas fees, they're going to go on to L2 because they have that option. And they're going to have this immense amount of economic activity and it's only going to increase on the L2. Yet when the transaction fees on the L1 lower back down, it becomes more feasible for people to come back to the L1 and increase the economic activity back on the L1. So there's always this reservoir. Every single L2 is a reservoir of energy, of reservoir of economic activity for the L1 to tap into if it ever needs to, if the demand for L1 ever goes down.

Because the demand for L1 going down is bad because that's the security for Ethereum. So all these L2s are like security batteries. They're like these security reservoirs for economic activity on Ethereum. I think that's just so often. Yeah, that's a good point. And that's again, the reason that gas fees on Ethereum are never going down. Right. It's because they'll move. So some of the smaller transactions that you said, they'll move to layer two.

But anytime gas fees start to go low in Manhattan, it's like price of real estate. Price of real estate in Manhattan, like never drops because people snap it up. They'll move from Brooklyn back to Manhattan. So, yeah, I agree. I think that's kind of how it's working up. And also to your point that layer two, unleashes a whole new set of use cases that were never going to be possible on layer one.

Micro transactions are not happening on layer one. And they're not feasible. They're not possible. It's just, yeah, exactly. It's never going to happen. And that was interesting to hear Matt say, we were never going to deploy loopering on layer one because the type of app we needed was never conducive to the transaction throughput of

layer one. So we started immediately with layer two. Like you can build different types of applications in, in layer two. And I think that's definitely going to be a source of demand and innovation. Like it'll probably be a whole new cycle of cool, interesting things that happen on layer two that could never happen on layer one. We're going to go through those innovation waves as well. Yep.

Wrap it up there. It's all good. Let's wrap it up, man. It's been the deep. We're going to do more on layer two, right? Absolutely. And more on layer two and more on NFTs. I'm pretty sure that's all that we have in the podcast content.

There's a lot to learn here. So I'm glad we're doing this, David. All right, man. That was a debrief. Thanks everyone for listening. Risk and disclaimers, everyone. ETH is risky. So is crypto, of course.

As is DFI. You could lose what you put in. But we are headed west. This is the frontier. It's not for everyone. But we're glad you're with us on the bankless journey. Thanks a lot.