Bankless - Arbitrum Nitro Launch with Steven Goldfeder & Harry Kalodner

Episode Date: September 1, 2022

On today's episode, we welcome back Steven Goldfeder and Harry Kalodner for their second appearance on Bankless. Both times for huge Arbitrum launches! Today, Abritrum is launching Arbitrum Nitro, a 7x improvement to Ethereum's capacity. Hear all about it, Abritrum's potential forthcoming token(?!), Abritrum Oddessey, and of course, so much more. ------ Chainlink | Register for SmartCon 2022 with promo code “BANKLESS” https://bankless.cc/smartcon  ------ SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/  ️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/  ------ BANKLESS SPONSOR TOOLS: LENS | ACCESS CODE: MINTME https://bankless.cc/Lens  ROCKET POOL | ETH STAKING https://bankless.cc/RocketPool  ️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum  BRAVE | THE BROWSER NATIVE WALLET https://bankless.cc/Brave  JUNO | BRIDGE FIAT TO LAYER 2 https://bankless.cc/Juno  ️ ZKSYNC | THE LAYER 2 SCALING ENDGAME https://bankless.cc/zkSync  ----- Timestamps: 0:00 Intro 6:55 Abritrum Nitro Launch Day 10:40 Reflecting on Arbitrum's Last Year 14:57 Abritrum's Rollup 16:57 The Arbitrum Odyssey 26:55 The Secret Sauce Behind Nitro 30:39 Any Trade-Offs Made? 32:18 Scale Restraints 37:38 What's Next? 47:28 Arbitrum Nova 52:53 Fractals 54:55 What Reddit is Building on Arbitrum Nova 1:01:23 zkRollups 1:04:17 The Abritrum App Layer 1:07:11 Abritrum's Hypothetical Ticker 1:09:38 Other Tech Checkboxes 1:11:34 Closing & Disclaimers ----- Resources: Harry Koladner https://twitter.com/hkalodner  Steven Goldfeder https://twitter.com/sgoldfed  Steven & Harry's First Appearance on Bankless https://youtu.be/W33LtejihY8  ----- 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 

Hey, Bankless Nation, welcome to another episode of State of the Nation. Super exciting topic to discuss today. That is the release. It just happened just a few minutes prior to us getting on the live stream, hitting record. Arbitrum Nitro launched. Arbitrum, of course, you guys remember, that is an Ethereum roll-up, the largest to date in terms of total locked value. And they just released a major upgrade. We're going to talk about that.

We're going to talk about what's so special about it. We're going to talk about how it's a scaling Ethereum. And there's a lot more. David, what else we're going to cover this episode with Harry and Stephen from Arbitrum? Ryan, I opened up the YouTube just now just to, you know, do what I'd normally do and monitor the live stream. And out of like the 12 or 13 comments, I mean, eight of them were when token, when Arby token. And so I am of course going to ask the Arbitram team win token at the very end. As is a very, very end.

So all the people are going to have to stick around to the very end of the show in order to hear these questions. But there are also some other developments, not just in the Arbitrum 1 ecosystem, because Arbitrum 1 is no longer the one-and-only Arbitrum chain. There is a new Arbitrum chain, Arbitrum Nova. Arbitrum 2? Nope. No, nope. But there's plenty of details to unpack with Arbitrum Nova. And so much going on in the Arbitrum ecosystem, and we're going to unpack it all here today on the state of the nation.

It's going to be exciting to talk about also a message. from our sponsor and our friends at SmartCon. This is a conference put on by the folks at ChainLink. We love this conference. I've attended it virtually because it's only been virtual. But this year, it's the first year. It's actually in person. It is happening September 28th to 29th in David's new hometown of New York City.

Look at the speaker list, David. Read some these names out for people. Eric Schmidt, the former CEO of Google, Sergei Nazaroff of ChainLink, Bologi, from Bankless podcast. Just kidding. CTO or Coinbase. Sam Bankman-Fried from FTX. We got Kane from Stony from Synthetics and Ave.

And of course, Ed Felton, co-founder of Arbitrum, not on the show today, but on the Arbitrum team, of course, as well. All showing up for SmartCon in New York in person. There's a link in the show notes if you want to get your ticket. And if you want your ticket to be costing less money, you can use the code Bankless to have a discount. I want that. Yeah. The goal bankless discount. We're hooking you guys up.

That's bankless.c.c.com. That'll get you that discount if you type in bankless where they ask for the code. David, got to start with the question. I always ask in each one of these episodes, what is the state of the nation today? Ryan, the state of the nation is upgrading. Upgraded. And this is also a slight disclaimer. The bankless live stream ecosystem has gotten a facelift. And so there are now many more buttons for me to DJ this live stream. and there's many more like things and it's overall better and more complicated. Oh, wait. Are you saying it's been upgraded? It's been upgraded.

It's been upgraded. And so if the stream gets weird, I'm sorry about that, but we were also recording locally. So no matter what this podcast episode will happen. But not only is Arbitram Nitro getting a huge upgrade, which is the main focus of this show. But this is also a disclaimer that the bankless live stream infrastructure has also gotten upgraded and it's a little bit overwhelming because it's the first time. So that's also a disclaimer. There you go. Two upgrades at the same time. So far, Arbitrums has been really successful, not a hitch.

Hopefully we have the same luck with the bankless live stream today, David. And you know, it strikes me, it's not only Arbitrum and bankless that's getting an upgrade. It's also Ethereum that's getting an upgrade. Whenever roll-ups improve their technology to compress transactions, they get faster, they get cheaper, that's an upgrade to Ethereum. That's an upgrade for going bankless. It makes Ethereum more scalable. So, of course, we've got to start there and talk about that right when we get back with Stephen and Harry from Arbitra. But before we do, we want to thank the sponsors that made this episode possible. Lens Protocol is an open-source tech stack for building decentralized social media applications. It is the new era for social media.

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It's yield farming, but with Ethereum notes. You can get started at rocket pool.net, and you can also join the rocket pool community in their Discord. You can find me hanging out there sometimes in the chat, so I'll see you there. Arbitrum is an Ethereum layer 2 scaling solution that is going to completely change how we use defy and NFTs. Some of the coolest new NFT collections have chosen Arbitrum as their home, while Defi protocols continue to see increased liquidity and usage. You can now bridge straight into Arbitrum for more than 10 different exchanges including finance, FTX, Whoobi, and Crypto.com.

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at discord.gg.g slash Arbitrum. You can also bridge your assets to Arbitrum at bridge.arbitrum.io and access all of Arbitrum's apps at portal.arbitrum.org. In order to experience Defi and NFTs, the way it was always meant to be, fast, cheap, secure, and fiction-free. Hey, guys, we are back with some of the co-founders

behind Arbitrum, the leading roll-up right now in terms of total locked value, big upgrade today. I want to introduce you again because it's been a year to Stephen, who is the CEO and co-founder of Off Chain Labs, and also Harry, who's the CTO and co-founder of Off Chain Labs. Gentlemen, how are you doing? Launch day again. How are things, are you hanging in there? You sweating at all? Is everything going okay? Doing well. Yeah, thanks for having us. Really, really great to be back. I think the launch went fantastically well, and we're excited to be here and talk about it. it. I'm still not like familiar with this concept of of having a launch day and then having

it be afternoon in the launch day and not being in like a total panic. But it just goes to show we spend a lot of time preparing and have an awesome team. Usually that's incredible. Whenever we have people that come on on lunch day, they're like running a mile a minute, like they can't breathe and then they come onto their podcast and then they're super like distracted because there's also a bunch of like stuff happening at the same time. Yeah. So like, lights are flashing. What are you guys like what's behind the scenes?

What's going on right now? Like what are you guys monitoring? What do you guys like? What would you otherwise be looking at if you weren't on this podcast with us? So one thing is, you know, we went back online. Our core infrastructure. It will take others. Some went back online already.

You know, ether scan, for example, when we got up right away, a lot of the node providers did. Some other infrastructure will probably continue to come on over time, although I think most of it's already on. So we're just basically monitoring partner questions and conversations, but really, honestly, not that much. Fundamentally, kind of our own tech is the thing that it's easy to be kind of highly confident in and that we've done, we did the test net a month ago. We've kind of tested to death in all sorts of interesting ways. That kind of the biggest effort this last month has been sort of ecosystem coordination just because it's like, I don't need to tell you guys.

there's a lot of stuff going on on top of Arbitrum. And even with the Nitro upgrade being sort of quite seamless for most people, there's still enough kind of nitty-gritty details that affect various specific applications and infrastructure providers, that there's sort of a lot of coordination. And that's where we've been really focused. And that's where I think the sort of next day or two will continue to be sort of very focused on kind of hearing feedback from there and solving any issues that might come up. Yeah, I guess that's true.

you are upgrading a platform for an entire set of applications, ecosystems, all of this infrastructure as well. And I'm sure there are so many moving parts there. I want to zoom out for a minute, too, because this is actually a special day, not just because the bankless live stream has been upgraded, although David's really excited about this. And Nitro has launched,

but also because it is the one-year birthday of Arbitrum 1, the original chain. So like you guys launched this thing a year ago, which is like, first of all, happy birthday to Arbitrum. And secondly, I was kind of thinking about this. This is sort of at the end of last year, I think it was the last time we had you guys for live stream on bankless was like September or something of last year. And I remember how excited we are about. And we had this analogy of kind of like roll-ups or like a theme park and like all of these rides, but it's not. yet open for the public and now Arbitrum is about to open it for the public. And the cool thing

about getting to the theme park is once the gates are open, you can not only ride all the rides, but you can go make your own rides like roller coaster tycoon style if you're a developer, right? And so just zoom out for us for a minute. How do you guys feel one year after launch? Has this gone how you thought it would? Is it as expected or there's some unexpected things? Harry, why don't we start with you. Yeah, no, it's a, it's a really interesting question. And I think it's just, I instantly am thrown back to thinking about the insanity, which was kind of after our initial launch, when we were expecting to kind of like gradually pick up steam. And instead, if you remember Arbynion that launched about, I think in the first week and very rapidly accumulated

over a billion dollars in the system, which was not, something we were expecting. And I think it was sort of, for a long time, I think essentially sort of, it was, it was downhill from there in a way and that like, kind of like that was like, you know, that was yield farming. That was sort of relatively, I don't want to say inorganic, we didn't cause it, but it was not sort of sustainable growth as those things tend to be. And so I think kind of the really interesting journey that we've been on has been sort of rebuilding and and exceeding that sort of initial burst of growth with sort of really sustainable, unincentivized kind of growth that's been continuing going strong, which has been pretty damn cool.

Barry, am I looking at this on the chart? So this is L2B, which is a great place to track kind of total locked value of Arbitur 1. And you said just like, you know, suddenly you kind of opened the gates to the park and then, bam, there's a billion dollars. Is that what we're seeing on the chart? Yep, exactly. And the other interesting place that shows up is in this kind of transactions where you see this sort of huge initial spike and then kind of significantly lower for a while up into the point where now it's kind of rebuilding to rebuild it, rebuilt to be there. It kind of at a similar level consistently.

So what's interesting is I guess this is like what Arbitram looks like in the quote unquote like great crypto bear market of 2022. And you guys are still above $2 billion in, uh, in, uh, in, market cap and I guess looks like I'm still leading the charts here as the number one roll up with optimism in second place kind of close but 2.15 billion versus 1.58 billion. I don't want to dwell too much on total locked value because I think that is somewhat it can be like a vanity metric or can be inflated in weird ways as you've just described, but it seems like there's been a pretty quick growth of the ecosystem. Stephen, as you reflect on the last year, What do you think about?

Yeah, I mean, I would agree with Harry that it's definitely not how it cannot have predicted how the year would have gone how it went, but fantastically happy with the way that it did. One interesting piece of perspective that I'll give you. So you mentioned we were on, I think we were on September 7th of last year. And so if you look at the Nitro repository, right, so where the code lives in GitHub, you'll see the first commit to the Nitro repository was September 8th. So here we are on Bankless a year ago, September 7, talking about this brand new thing we launched. And we're already thinking about, like, today's launch, right?

Actually, like, we're back to work thinking about how do you make this thing better. And that's basically like there's, you know, we're super happy with the way that launch is going and the way that land. And we're really, really working to get adoption. But we're also constantly thinking about how do you make this better. And I can tell you, we already have, you know, the initiatives I'll probably go live next year already, you know, working on it and constantly thinking about how do we scale. But the scaling is like a cat and mouse game. We scale and then more users come. The demand keeps growing.

Ethereum demand is not going down long term at all. It's going to keep going up and up and up. We have to keep the tech ahead of that curve. Stephen, as you said, Ethereum demand is not going down. It's going up and up and up. And a lot of that demand is transferring to roll-ups. And indeed, kind of the bankless message over the past year since Arbitra many other roll-ups launched is like go make your home. Go migrate to a roll-up.

See what you like. Go test at a few. just like kind of start to build your business there, start to go bankless on these roll-ups. I'm curious, though, it's like maybe for people who aren't familiar, I know if they're listening to bank lists, they know what a roll-up is. You've got to know what a roll-up is, right, guys? But like, what's special about Arbitrum-specific take on roll-ups? Could you give us just the highest level? I know we've covered it in detail in other places. It is an optimistic roll-up. What else about Arbitrum would you want to tell us?

what's different about it. Stephen, back to you. Yeah, I would focus on like three things going a little deeper. Number one, like you said, it's an optimistic roll-up. It's a particular type of optimistic roll-up that we put forth back on our academic paper that uses something called interactive fraud proofs. And basically, that's a technical way, but what it allows you to achieve is a really, really compatible optimistic role. It's easy for people to build, particularly easy for people who know how to build an Ethereum to build an arbitram. And that's something which is really, really important to us, which is continuing to be Etherline,

not just because we're building on EF, also because we're community aligned with EF, and it's really easy to build. We're also very tech-focused first. We have a fully complete built-out system, and we're really, really excited about that. And the system is in beta today, but all the code is there and complete.

And the last thing that I'll say is, you know, the way we think about it, The Nitro launch is actually a really big milestone for us, but it also shows how we think about our roll-up in which we're not married to a particular tool and say, hey, I need to use this tool. We're married to a solution, and we're constantly thinking about how do we solve this, how do this even better. And that's something which, you know, I don't know, people sometimes say to me, hey, will you guys use this DK? So maybe, maybe one day we will. We're definitely not against it.

We're just constantly thinking about how do we scale Ethereum the best? So, you know, when I think about the futures of Arbitrum, I don't want to dwell too much, even as excited I am about the current technology. It's really the role that we're aligned on and the tools will definitely change over time, as they did today. I want to zoom back into some recent history in the Arbitrum universe. And I think going back to the beginning of the Arbitrum Odyssey, I think will actually be really helpful for listeners understand the significance of Nitro. because we did this thing called the Arbitrum Odyssey, but the Odyssey had to be put on pause because we didn't have Nitro yet. So I'm wondering, can we go back a few weeks or months back to the beginning of the Arbitrum Odyssey?

Can you explain what was the Arbitrum Odyssey, what is the Arbitrum Odyssey, what was its intended goals, and then what did we learn as a result of the very beginning phases of the Odyssey? Harry, I'll throw it to you on that one. I can kind of take the take a high level and then I'll probably toss it back over to Steven since he could probably say even more than me. I mean, broadly speaking, kind of the goal of the Odyssey is to bring users into the ecosystem that sort of, I think one of our favorite things about the Arborcham ecosystem that we wanted to highlight is just sort of how much depth there is, how many different things there

are to do. I think kind of towards sort of your earlier point, like our goal, has always been sort of have people be able to come and stay, not have people just sort of slide into the system to interact with kind of a couple daps, but then kind of run out of things to do, but to actually have kind of a full complete ecosystem. And I think the Odyssey kind of at a high level is very much sort of the effort to highlight that.

I don't know, Stephen, if you want to jump in or I'm happy to keep. Yeah, no, I think that's what I would say to do. It's really about education. And I saw someone tweeted the other day and said, I got introduced to GMX via the Odyssey and I haven't stopped using it. And that's like a great example of like learning about what there is to do an arbitram. And that that was our main goal. I know there was a lot of speculation.

We had other goals with the Odyssey, but really our main goal was about education and introducing users to the platform. And yeah, that's what I think, which we've begun to accomplish. We did put it on pause. but we will continue to accomplish when we restart it. I think a nice metaphor to explain the Odyssey. The one that landed in my head was it kind of felt like a tour of a college campus. Like you get everyone heard them all together, walk them through the campus.

Like, and here is our library where you can go leverage longer short on GMX. And here is our NFT museum with magic and the treasure ecosystem. And so it was like a little bit like a phase where like each week you do, do an individual thing. And week one was bridge week, right? Because, you know, if you're going to start an Odyssey, you need to get everyone onto the arbitram chain. And so week one was bridge week.

And then week two was going to be the next phase of the Odyssey. But that's when we learned some things. Who wants to, who wants between the two of you, wants to walk us through what happened there? I'm happy to take it. Cool. How are you? Yeah, sure.

I'll go. I mean, essentially sort of the thing we found was that And sort of the way that that kind of arbitram was pre-nitro, we were running at a approximately. And now we can, with nitro, we'll get into later, we can say this much more exactly. But we were running with approximately Ethereum's worth of capacity. One Ethereum's capacity? Yes. Cool.

I like the scale of measurement. It's easy to understand. Like one Ethereum. No, same. I think kind of the thing we found is basically that that was really, really easy to fill that up. We've been in an interesting dynamic where because roll-ups have been sort of relatively early in the stage of adoption, I think for a while people were sort of treating them as though

kind of gas optimization didn't matter. Things could be sort of arbitrarily complex and that wouldn't sort of, and I think that was sort of a wake-up call all around that, well, it's still a blockchain. it still has limited capacity. From our perspective, essentially kind of in that state, we sort of were obviously well on our way to working on Nitro and planning Nitro and have this vision in mind where it will certainly be significantly more. Although there's always sort of this question, which is there's no kind of how much demand

is there. And it's very hard to predict and it's very hard to see. I don't think we quite imagined how much. much demand would rush in for the Odyssey, that if you look at sort of the massive spike of usage associated, it was quite large. I think sort of when, you know, it will be, it will be very interesting to see when it begins again. Because sort of to be, to be quite upfront about this, we're, we're going to massively increase our capacity. We, you know, that will allow for many, many, many, many more users to make use of the system. There is, there will still be a number of

users that could hit limits if enough demand comes in since it's not unlimited. But we can certainly serve hugely more people, which I think is pretty critical. So high level, Harry, Arbitrum 1 launched another Ethereum's worth of capacity, basically. And by the time the Odyssey kicked off, everything was like full. You know how you're measuring capacities, like all blocks full, something like this. Yeah. And you didn't have enough space to continue the Odyssey. So you guys said, Okay, too early for the growth phase. The bus was full. Odyssey.

Yeah, like, sorry, guys, bus is full, tour bus is full. You know, we don't have any room for more students to take the campus tour. And you put Odyssey on pause for a period of time until you could deploy nitro. Is that the case? Exactly. Yeah. Effectively, sort of, in a way, it was almost kind of too successful in terms of sort of the amount of demand it created. And I think sort of, you know, the, when, when things like that

occur, and I mean, it's the exact same thing we see on Ethereum all the time, well, not all the time, but relatively often, where some of it happens, the chain becomes massively congested, prices goes up, and go up and sort of, you know, the rest of the ecosystem says, what's going on, everything's more expensive, this is affecting us negatively, and sort of the thing we wanted to avoid was, was that impact. and sort of the way to avoid that impact is to have more capacity so that the system doesn't get overwhelmed. And Harry, you said something that I think was worth parsing out. At the very beginning of Arbitrum 1, it was like there was so much block space.

It was like, oh, so all of these dafts could be like, oh, I'll just use all of this block space. Look at all this empty blocks space. I'll just use it all. And this is kind of just an inevitable truth of every single blockchain in its beginning phases, is that since there's such an abundance of block space, DAP developers, don't write space optimized contracts. And so, like, all of the, from what I've gathered, like, the early days of the Arbitrum DAPs, they never had to be constrained in this respect.

And so then once we actually do, like, an actually, like, marketed and productize Odyssey type thing, where, like, okay, come and use all of these DAPs and all of the Arbituram DAP developers, like, oh, wait, like, we forgot to consider, like, optimizations. And so not only, I'm guessing since then, a lot of Arbitrum DAPs have, in addition to like Arbitrum itself growing in capacity, I'm about to ask you guys by how much capacity, but I'm assuming also the Arbitrum DAPs have started to be more resourceful with their design of their contracts. Would you guys say that's true? It's a good question.

I would say, so I wouldn't say that people didn't kind of think about optimizing. I think I would say that sort of what people were focused on optimizing. was different. So for example, a lot of thought went into optimizing down the amount of call data involved because that's the cost of posting matches to Ethereum. That's the L1 resources. That's expensive. So a lot of thought went to optimization, but essentially at that point, it was a very good tradeoff to make, to use more gas on arbitram, to use more execution gas to save money on Ethereum. And so I think, yeah, as kind of, as things have moved, I think people have sort of seen, seen those tides moving and are working on adjusting. So I definitely think that sort of

people are reacting, but it's not that they hadn't thought about it. It's that they were kind had different focuses. And the cool thing about that event is that all that happened was that the gas fees on Arbitrum went up, right? Just like in the same way that Ethereum gas fees go up when there was congestion, the Arbitrum gas fees went up because there was congestion. There's alternative scaling models out there where the thing just shuts down. for perhaps that's actually not an intended feature of some other layer 1 blockchains, but that is the inevitable conclusion. And so the fact that like Arbitrum just mimics Ethereum in its design, I think illustrates

like the way that Arbitrum, when we talk about Arbitrum is like one Ethereum, another Ethereum's worth of scale. Like no, it's literally another Ethereum in a layer two and it operates and looks the same way. And so with that in mind, Steven, do you want to say something? Yeah, no, I would agree with that exactly. And, you know, the thing to say is arbitram, it worked exactly as intended, as you basically said. And to use their bus analogy, the bus tickets got expensive. And there were those people that just wanted to take it on the bus. And so for us, the decision was easy because it was like, hey, we know that we're, you know,

right around the corner from Nitro and we're going to increase the capacity. So why not wait so we can, you know, allow many more people on this bus? And but the system worked exactly as intended. Right. So the decision was made to put the Odyssey on pause. Bus is going to hang out while we upgrade the engine. And so getting into the Nitro conversation, what about Nitro is like, what's the secret sauce behind Nitro? And if Arbitrum 1 previously was one Ethereum's, how many Ethereums is Nitro? It's a good question.

Yeah, so I mean, I'll start with the second one just because that's relatively easy. We're currently kind of live with seven, approximately seven Ethereum's worth of capacity. Wow. Seven Ethereum's worth of capacity. So you've just seven X this. I definitely want to know how you did that. But that's incredible. Yeah, no, and that's like, you know, I think a perfect transition into sort of what's the secret sauce.

And I'll say sort of fundamentally kind of the secret sauce. Well, first of all, I think in a lot of ways, kind of Arbitrum Nitro is a very classic startup story in that kind of Arbitrum 1 was effectively sort of our MVP in a significant way. It was the first thing we figured out how to build that we knew had legs and had it could work. But we also sort of knew early on there were limitations. There were things that we wish were not the case. We didn't stick around and wait to launch until we had fixed them, because if so, we would never have, you know, getting off the ground is almost impossible. But we had these ideas in mind. And kind of fundamentally, there was a lot of various overhead.

We were figuring out how to do fraud proofs on chain for the first time, which at that point was, I think, very early. and sort of people didn't really have a good figure on. And I think you see this all over the place in terms of as research develops. I know Stephen likes to talk about his PhD being a course of finding out over and over and over again that like his previous work was like kind of crappy and that there was a way better way of doing it. I don't usually use those words, but it's accurate. The latest one is great, though. Thank you.

But effectively sort of what we figured out with next, Nitro and kind of the core to me is that we cook a lot of kind of the custom work that we had to do in order to figure out how to solve this problem originally. And we were able to swap out almost all of that work with standard EVM. Before we had this, this complicated, this relatively complicated new system we built from this ground up called the AVM, which was our own virtual machine because it was so complicated to figure out how to prove to Ethereum that a given L2 chain was correct that we needed to invent an entire virtual machine for it. With Nitro, We using Geth, using Wazim, using a bunch of sort of standard powerful tools, we were able to basically not need to do much less custom, need to do much less with kind of lower performance tooling, and be able to effectively do what Nitro is today, which is running as a kind of full standard EVM capacity. So there's a lot of different sort of EVM chains out there if you call sort of anything that is forked off of Geph. There are some fundamental kind of scaling constraints in the EVM world, which maybe we can talk about those a little later. But Arbitrum Nitro is essentially competitive with any other EVM chain. And the 7X is basically sort of our line for how to have sort of sustainable growth so that people can continue to run nodes over time and validate the chain while having as much capacity as possible. I want people to hear that.

So we just 7Xed Ethereum, which is essentially what we're doing because we're preserving the trustless. and the decentralization. I know there is still some kind of like, you know, governors on that, management pieces on that on arbitram one, but like that is what we're doing long term. We've just seven X Ethereum. Were there any like tradeoffs made in the process? Did we lose anything? Are there any added trust assumptions? Or is this all pure engineering, compression, like magic that allowed us to do this? Pretty, pretty pure win. Pretty pure. a win, I would say effectively. The trust model doesn't change at all with Arbitrum 1. We'll talk about Nova later. There's some more kind of interesting tradeoffs made. But this and kind of the,

I said it, I'll say again, sort of the amount of capacity is kind of fundamentally how only basically limited around this idea of state growth. How much, how beefy of a machine do you need to sync the chain. This is where we decided was reasonable, and kind of I think we have some good reasons for that. But sort of, that's the only limit there is. Ethereum is very conservative. Ethereum wants everyone in the world to be able to validate the chain. Because of the roll-up security model, you don't need to make anywhere near that aggressive an assumption because you don't need two-thirds honest. You need one honest. And that lets us sort of exceed Ethereum in that way, which is sort of where we get that 7x from.

And I want to go into that bottleneck a little bit more. You said it was the state growth. Why can't we have 70 Ethereums, Harry? Why haven't you brought in 70 Ethereums to the table? What breaks? Hey, just stop being so greedy. I'm working. It's horrible.

I get to sleep sometimes. What breaks if you turn that 7 into a 70 number? Like, why can't we have that? Yeah. So it's sort of, and this is kind of the same constraint that people on Ethereum, that the kind of Ethereum Core devs worry about. I mean, in terms of kind of the main reason that the Ethereum gas limit is not higher, is the main reason that the arbitram gas limit is not higher,

which has to do with effectively how much memory your computer needs to be able to actually hold the entire current state. Since effectively, in order to execute the blockchain quickly, you need to be able to quickly read any storage cell, any contract code, anything that kind of could be immediately relevant. You need to be able to hold that. memory or you need to take a long time reading the disc and you can never process this quickly. And that's kind of the fundamental limitation there.

So the state of arbitram, which is different than the most recent block, the state of arbitram is needs to be held in a computer's RAM. Do you know what is the current state size of arbitram? Like how much, how much RAM do you need to be able to read this thing? I think currently we're somewhere, it's definitely under. 10 gigabytes. I'm pretty certain. Yeah.

It will increase over time. And effectively, sort of the reason for the gas limit is we could crank up the gas limit to 70X probably. And it would be fine running nodes for the next year. But a year and a half from now, it would start to get really, really hard. Right.

We would start to need like 100 gigs of RAM to be able to manage this thing at that point. And at that point, we're like, oh, we've gone beyond the capacity of what can be expected. Exactly. It's about controlling the rate of growth over time so that sort of the rate of hardware getting better keeps up with the rate of the chain getting harder to run. And how just again, some basic bare-bone scaling stuff. Why is that different than Ethereum? Why are you guys able to scale faster than Ethereum when Ethereum has that same constraint? It is identical to Ethereum. So all of this comes down to basically Ethereum makes some very aggressive of choices about making it very easy to run a note at home. It's very important to Ethereum that

kind of at-home validation is easy to do, that you can validate on a Raspberry Pi. And these are like important values. And they're very important for Ethereum because you have proof of stake or even with proof of work either way, where you need to assume that you have a lot of honest people there who are able to participate in the system. It needs to have a low barrier to entry. roll-ups can sustain a significantly higher barrier to entry because you only need one honest person. So Ethereum needs like two-thirds of the nodes to be able to have sufficient RAM. An arbitram or an optimistic roll-up just needs like, well, we kind of just need one honest person with sufficient RAM. And that's where we get that scale from.

Yes. Simplistically, reductively. The reason to not do the 70X is because you need more than one because you need all the infrastructure. You need blocking explorers to work. You need sort of all sorts of tooling, indexers, automation tools, all of that. That's sort of where we get the limitation from. Okay. We need to make sure that ether scan can keep up with Arbitrum and Inferra can keep up with Arbitrum.

But the idea is that the number of entities that need to keep up with Arbitrum is significantly reduced. And we are able to reduce that number without breaking our basic trust assumptions of the Ethereum layer one. Yeah, exactly. Every time I had talked to roll up teams, I'm like, okay, I have to go and like remind myself about the basic like theory behind every single layer one because like it's hard to keep in my brain from from month to month the month. When one last question on this train of thought, when we say that Arbitrum Nitro is now seven Ethereums, what nuance is lost when we explain it that way? Like what engineers did we just

trigger by explaining Arbitrum in that particular mechanism? No, that's a good question. So there's, I guess there's two things I could say for that. One is interestingly, we don't measure our gas in blocks because of sort of how Arbitram block production works where sort of blocks are produced quickly. We instead measure it in gas per second. So that equivalency is based on sort of what the Ethereum block time is and sort of doing some division there in order to calculate that. That's a relatively minor one. The other sort of probably more interesting one is that there's two independent resources that Arbitrum consumes. 7X is the amount of addition of amount of L2 resources we have.

But also when you're using Arbitrum, you're using Ethereum resources because of how transactions get posted on chain. That we actually are also improving with Nitro because we're introducing additional compression. But that's sort of not in that same category of 7X and is measured totally separately. Okay. Okay, beautiful. Okay, so we've got Arbitram Nitro.

Ryan, you have a question before. Yeah, go for it. I do. I just, before you get to kind of like, you know, the resuming odyssey and such, I just want to spend a minute to zoom out, right? So we just got a 7x. And like David, I'm real happy about that. But I'm also kind of like David, I'm real greedy too.

And like, the question in my mind is, what's the next step from here? Just curious. So can you get another, you know, 7 to 10x out of like better engineering in the next version compressing it some more. Are we like, we had an episode with a plenia recently where we talked a lot about EIP 4844 and proto-dank sharding and what that provides to roll-ups, which is really inexpensive called data, which is a key to scaling roll-ups as I understand. But if you just like, you know, tell us what this will look like.

next year on Arbitrum on second birthday, what kind of scalability increase could we see there? And then like on Arbitrum's third birthday, when it's just like, you know, just a toddler and it's just learned to walk and it's, you know, flailing around. What does that look like? Because that's probably a post EIP 4844 world. Any thoughts on this, Harry? Yeah, this is, I mean, this is like the tough question. I'll say, you know, to start with, the easy one, which is that sort of 4844 is like usually valuable and important, but it only, but what it solves is essentially further decreasing those L1 costs. So between the new compression in Nitro and 4844, those costs, I think we can expect will get very, very small. And then you

basically are left with sort of the main cost of using arbitram being paying for this L2 capacity in this chain with kind of 7x Ethereum capacity. That's the relatively straightforward one. The complicated one is then, well, what about that chain's capacity? And I think there's sort of two things I can say there. One is sort of, I think you've seen today, and we'll talk more later, or probably about NOVA. And you can see this idea of sort of multiple parallel roll-ups. Nova has 7x Ethereum capacity, arbitrope.

One has 7X Ethereum capacity. They don't take capacity from each other. They're totally independent. So between the two of them, we have 14X-Etherium. and capacity. That is sort of relatively simple to do from a technical perspective. From an ecosystem perspective, it's much more complicated because these are separate chains with separate DAPs and separate code deployed on them. But that's the one that kind of like, you know, you can clearly picture today. I think beyond that, you get into these sort of fundamental

considerations of how do you scale the EVM better? How do you sort of actually do that? I think all of those go down the line of, well, the EVM itself has to change to some degree. And these are questions that kind of core Ethereum researchers have been struggling with, one would A or another for a while. And I think very much kind of we see ourselves among them that fundamentally kind of how to scale Arbitrum and how to scale Ethereum are basically sort of, Ethereum's computational capacity will be sort of the same question because they're operating under the same constraints. And I think that there's kind of going to be a lot of interesting stuff evolving on that front as sort of the research community really kind of aligns

around that question. But every like arbitram birthday, can we count on you guys to give us another like seven to 10 X or something like this? Stephen, what do you have to add to this? I think we have some promises, my friend. I think we have a few more seven to 10 X is with us. I can tell you this. We have just like Nitro started a year ago, you know, in that production repo. We have several other really, really promising efforts. To Harry's point, some of it's going to be fundamental, some of it, but I do think there's still, I don't think we're at the optimal point yet, and I would expect that we'll deliver once again in the next year. I can't tell you which of our various efforts will be the one, just like, you know, when Nitro started, it wasn't the only thing. Nitro

started as a one person project and slowly became the company priority. So one of these various efforts that we're running will probably over time dwarf the others, but I'm pretty confident that we have We have a bunch more scale to squeeze out of the system and then do more fundamental things as well. But long term, I'm pretty bullish. And yeah, I'll put a reminder for one year, but I'm pretty confident that we'll... I need the calendar in. There you go. I fully agreed.

So I think I fully agree. And I think my main point there was sort of like, it's ways that you start to drift a little bit from the EVM while maintaining the user experience essentially. That, like, sort of that you start to look at like around the edges. is how can we like poke at this thing, prod at this thing, just sort of keep the user experience as similar as possible, but do things in ways that are more scalable. So guys, what happens next? Are we, when does the Odyssey resume?

Do we get back on track with the Odyssey? When does that happen? So we haven't announced an exact date yet. We don't have an exact date yet, but it will resume in short order. We'll want to see the system, like we said, today went on without a hitch, but we want to give it, you know,

a little time to stabilize before we, really, really bring in even, you know, a larger mass of users, although we have seen some pretty high, you know, transaction volumes today. And we actually just, at the start of this, it's called hit our 25 millionth transaction. So that's, that's exciting. But yeah, so the honesty will definitely restart in short order. And we're excited for that. 25 millionth transaction. Do you know, off the top of your head, do you know how many transactions the Ethereum layer one has had? A whole lot more than that. I don't know. off the top of my head.

But more than that. When will you pass Ethereum? Well, remember, we were only running at one Ethereum's capacity. Ah, right, right. So actually, but now is the actual point where you can actually chase Ethereum and actually catch up. Exactly. Because now we feel capacity.

You know, if we're at capacity in a year, we'll seven years, do seven years of Ethereum. So now is the time where that rate actually happens, that becomes feasible. Okay. Over under one year from today, will you have a, total transaction count higher or lower than Ethereum? And what's it going to be? Because Ethereum's been, it's seven years old.

And so, you know, can you guys squeeze in seven years of transaction history inside of one year with seven Ethereums? Like, I think the math checks out. We're putting a lot of pressure on this birthday. Thank you. I'll see what we deliver. I'm looking now. Ethereum's done 1.6 billion transactions.

So we still have a ways to go to catch up to that. And our goal, honestly, isn't even to catch up. up that. Our goal is to meet the demand and continue to increase the demand that we have. And we're confident that we will meet the demand for the next year. And when we come back in the year, we will scale our tech to meet even further demand. So, guys, I told the chat that if they could get 50 likes in the next 10 minutes, then I'd ask about the token. And they've got about four minutes left to get 20 more likes. So we'll see if they can make it. But there's plenty of other things in the Arbitrum ecosystem that we want to talk about. We already talk about Arbitrum Nova,

and we want to dive into that a little bit more. Also, just what's hot in the Arbitrum app layer? I want to get your perspective on your guys' favorite dafts and ecosystems there. And maybe if this chat can get these likes underway, we might ask about the Arbitrum AirDrop as well. So we're going to do all of these things and more right after we get to some of these fantastic sponsors

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We're talking all about scaling Ethereum. They just brought us seven Ethereum's worth of scale with the launch of Arbitram Nitro. They brought us seven Ethereum. Which is awesome. And we should be grateful for that. I'll remind my co-host, David, we should be grateful for that, even though we want more. But actually, there is more in a way. want to start talking about another chain that you launched called Arbitrum Nova.

And I remember when we first talked to you guys a year ago, September of last year, it was kind of news to me that if there was an Arbitrum 1, there could also be an Arbitrum 2, or an Arbitrum 3, or an Arbitrum 4. That Arbitrum 1 wasn't just necessarily one chain. Arbitrum is a technology that can be used across multiple chains. And so now we have Arbitrum 1, which is getting... some NFT usage, also getting a lot of defy usage. Now we have this other chain that you've launched using Arbitrum TechStack called Arbitrum Nova. This is the brand new layer 2 chain. What is the big

deal about Arbitrum Nova? Like what is it exactly? There are some trade-off differences, I think, from a trust perspective. Maybe you could describe that and what kind of use case and set of users Are you going for on Nova, Stephen Othroatio? Yeah, Arbitrum Nova is built on the Arbitram Any Trust technology, and it uses what's called the data availability committee. So most of the tech actually looks like a roll-up. Actually, Arbitrum Nova is already running the Nitro stack. So we did that launch with Nitro right off the bat.

They're both running the Nitro stack now. The difference is, whereas on the roll-up, Arbitrum 1, we put all the data on Ethereum. In Arbitrum Nova, we don't put all the data on Ethereum. Instead, we send the data to a data availability committee. But the rest of it, the fraud proofs all happen, does happen on Ethereum. That's the core difference. But remember, at least for the current time, until we have like EIP 4844 or similar initiatives, the vast majority of our cost is that data posting on Ethereum.

And so when you are able to send the data to a committee instead, the cost is significantly, significantly reduced. So what is Nova? Who's it for? Like, why are we doing this? Before you go there, Stephen, I just want to jump in and just do a little like a bankless professor kind of like a thing to try to describe that and link that. So we did an episode called the modular blockchain where David and I attempted to explain all of

this. What you just talked about is there are really three parts of a modular blockchain, right? So we've got the consensus layer, innermost layer, and then we've got the data layer, and then we've got the execution layer. The way I think about this is the execution layer is on the outside, and that's what's happening now. it's kind of current state execution. The data layer is what's already happened,

and the consensus layer is what's true. Ethereum in a layer two in a roll-up like Arbitrum, Ethereum remains the consensus layer. It determines what's true. It comes to consensus on that. That's why we say roll-ups are secured by Ethereum. And then Arbitrum is doing the execution layer. That's all the EVM stuff where you run your apps,

but it's also posting its data on Ethereum. and using that data layer. So it's using Ethereum for the what's happened and what's true. And that's what Arbitrum 1 is using today. Now Arbitrum Nova is different. It's still using Ethereum for the consensus layer, that innermost layer, but it's using a different data availability committee, as you called it, Stephen,

rather than posting on Ethereum for that data layer, the what's happened layer. And it's still using, of course, Arbitrum technology for the execution layer. Is that about right? Did I do that okay? Yeah, that's exactly right. And yeah, it uses that committee, though, in a, you know, just like you said, in a pretty

limited way, uses it just for the data, but the rest looks just like the roll-up. And actually, it has an affordance built in, that if the committee stops doing what it's doing and stops posting data, it just turns into a roll-up. It literally reverts back to a roll-up and starts posting data on Ethereum. So the committee, basically, the committee's role is if it functions right, it keeps the transaction fees low. But if the committee stops functioning, the chain becomes a roll-up. And actually, you know, here's an interesting nugget, which we don't really talk much about, but it's definitely possible. Like if EIP 4844 delivers and further data sharding delivers and like data on Ethereum

becomes really, really cheap, maybe someday Nova just becomes a roll-up. And we stop using the committee because it's just cheap enough to use Ethereum, even for the Nova applications. So if the data availability committee goes away, just reverts to a roll-up, and that just makes it more expensive, right, because it starts using Ethereum for data availability as well. Is that correct? Exactly. So the committee is important in keeping the fees low, but fundamentally the chain's liveness, even if the committee disappear, the chain will continue to operate just like a roll-up with test. Dude, I didn't know that part. That's pretty fascinating. So, and this would be called a validity, I guess, if some people are using that terminology, would you call it that? I don't want to get

two in the weeds, but. Yeah, so the ZK solutions, ZK roll-ups and optimist to pull-up. ZK. ZK. solutions with data availability committees are called validity. So this is the optimistic analog of a validity. Yes. You got it. Very good. I really like this model where if it breaks, it just reverts back to its normal form. Because that's how we've described roll-ups in Ethereum, where like if the roll-up itself breaks,

then it just reverts back to you'd make an Ethereum layer one transaction. And so it kind of feels like there's like nesting doll of scale or like this inception of scale. Fractals. fractals of scale, right, where like if the most performant but centralized layer breaks, then it goes back to a little bit more decentralized with a little bit more cost. And if that layer breaks, then it reverts just back to the Ethereum layer one with a little bit more cost. And I think that is really emblematic of not compromising on Ethereum security. And that's really what this means is that if you don't sacrifice that,

then you just ultimately revert back to the thing, the layer below it that is still working. So just a really elegant solution here. Yeah, and it does add a little bit of trust because it has the committee in that case where it works. But we think, so we think, you know, it's well worth it. And also it's any trust, which means you don't need to trust the entirety of the committee. You need to trust one or two members of the committee. So when we came out of the door, the committee is actually quite strong. It includes us, Reddit, FTX, Consensus, P2P, QuickNode, and Google Cloud, actually.

So you have like Web2 giants and Web3 giants participating in this committee. And a user just needs to say, I trust that one. And I don't care. Maybe I don't trust that anyone else, but I trust that this one or two committee members are doing their job. And that's how the end trust technology works, that you really have to have pretty trust, minimize the committee, plus trusting Ethereum and everything works, you know, quite well. Is it exactly a roll-up? Does it have the full security of a roll-up? No, there is value of putting this data on Ethereum.

But I think that Nova, you know, occupies a very special place where it gives you a high security chain, but also ultra-low fees. And again, the ultra-low fees come from the fact that you're not. not putting all that data on Ethereum, and that's a significant cost reduction. All right, so the ultra-low fees piece of it. And when you said the data availability committee, like two names popped up in my head that, oh, these people aren't crypto. One is Google Cloud, which is interesting, but it makes sense that they'd be there for infrastructure purposes. The other is Reddit. Reddit, the social media website,

social media giant, 450 million daily active users. That Reddit is what we're talking about here. Okay, so, and they're also doing stuff with Arbitrum. And I think Arbitrum Nova specifically, what are they building on Arbitrum Nova? Yeah, so they are, as you said, both part of the infrastructure and helping run the data committee and also building on the chain. What they're building is called community points and it's really, really cool. And actually, going back and I've been into this blockchain space for a bunch of years, I remember, like, this was one of the early things people talk about.

Wouldn't it be cool if Reddit like, you know, did their point system on the blockchain? And what community points is, it's live in, you know, particular subreddits today is a point system where you participate in the community, you comment, you upload, et cetera, and you get these points, which are actually blockchain tokens delivered on arbitram. And the reason why that's, you know, so cool is because now users have self-sovereignty over these points.

So no longer can Reddit say, hey, I'm shutting down your account and now you lose your points. And users actually keep those points and they control those points. And they're not controlled in a centralized database. It's actually pretty, pretty forward thinking of Reddit to offer this to users and to somewhat give up this control over these points. But it's also very, very, very powerful. And the reason why it's powerful is because it's an open ecosystem.

It's on Arbishop Nova. And anyone else can launch an app here as well. I can launch a game. And the currency in my game are these Reddit community points, right? That's something which I can totally do. So you're not only having the, you know, Reddit's. foundational community points here, you actually can have an ecosystem

that builds around community points, which is powerful. And Reddit is very forward thinking. One thing that I think is a bit different from, in 2017, there was a lot of, hey, let's put this industry on the blockchain. Let's take all your health records and put it on the blockchain. Terrible idea if you ask me, by the way.

Now it's like, no, we're not putting Reddit on the blockchain because it makes a lot of sense for Reddit to be a Web 2 company, but is there a way that the blockchain can help Reddit. Is there a piece that it makes sense? And even though it's minimalistic compared, hey, let's put Reddit on the blockchain, it's a lot more thoughtful, and it actually makes sense. And that's why I think it's so cool. It's a sign of maturity of this tech. Yeah, it's also a sign of maturity that I don't think, you know, to its users, Reddit is saying, this is now our points are on the blockchain, right? It's kind of like happening behind the scenes. And it's sort of the infrastructure

behind this point system too, which is really neat. And like, yeah, I guess when you have an open economy like this, you can imagine all sorts of different use cases like, you know, taking shape. Like the, you know, keyboard warrior, Reddit moderator who's like spending a lot of time moderating, earning those points, getting those up votes, right? Now they can use defy with those points. Take out a collateralized loan on your Reddit community points. Like, how crazy is that?

How cool is that? And that's what we're talking about unleashing because nitro, of course, can be bridged back to Ethereum or you can bridge assets from, or excuse me, Nova, back to Nitro, for example. So we've just unlocked the entire Ethereum economy for something like Reddit points. I imagine they're probably planning a slow role on this. They haven't done this across all of their subreddits. But can Nova actually handle the scale of something like, like? like Reddit?

Yeah. So they have done this. It's in two communities now, but definitely Nova can handle a lot, a lot more than that. And yeah, I do think NOVA is well positioned to handle the capacity of Reddit here and others building it in Reddit's ecosystem. And actually, this is to me, it's the vision. People, you've probably heard people say like, oh, let's get the next billion users on the blockchain.

And how do we do that? It's not by me going on Twitter and like finding a billion users to, you know, instead I saw MetaMask and try something out. It's by tapping into these existing communities. And so, yes, I think we're actually with Arbitram Nitro and Arbitrum Nova built on the Nitro stack, I do think we're at that point of maturity where we can actually handle the scale. We can say, hey, Reddit or, hey, to the Reddust of the world, we're ready for your user base. You can onboard your users onto the blockchain.

Many of these users for the first time. But once they come, they'll probably stay and do something else, or at least many of them will. And absolutely, you know, I do think we're ready for that. and we'll continue to expand a capacity on our next birthday. Yes, next birthday, a lot of pressure for that. I know David's got something to say, but I just want to underscore for the audience, because you mentioned 2017,

like, this is such a sea change from what we saw in 2017, right? So we have Reddit now using underlying blockchain technology, right? We also had Facebook, meta, adding blockchain NFT tech to Instagram and, like Facebook. Like, it's happening. It's finally happening. And in 2017, if we could, like, if you had told me in 2017 that meta, like, Facebook,

Instagram and Reddit would be using the blockchain today, using Ethereum today, I would have been like blown away and over the moon bullish and like probably would have bought a lot more ETH at that time, Dave. But you got to say something. Well, Ryan, you said earlier something about like moderators collateralizing their community points and doing stuff in defy with it. And maybe the listener heard that. I was like, that's crazy.

Why would they ever do that? I would like to let some listeners know who perhaps haven't heard this story, but this has actually already happened with Reddit, our ETH trader donuts. And so there's already been a token enabled subreddit that put donuts into uniswap and had a very liquid, relatively liquid donut pair. And it's really up to the community to figure out the financialization of their own token. So, like, well, that might have like, like, oh, that's a crazy concept that's just out there.

It's actually already been done before. And so I think that this was really just one of the early use cases that that was actually shown to Reddit that some communities are ready and able and willing to lean into some of this weird crypto stuff. And so it's probably where Reddit got some of these ideas. But Stephen Herat, I want to ask you about, like, does the super cheap and super low gas data costs of Arbitron Nova,

is this at all competitive with like a ZK roll-up? If we are adding like another order of magnitude of cheapness of the data for for Arbitram Nova, why would a ZK roll-up, like how is a ZK roll-up relevant to this? Or would a Z-K. Rola be able to do this? And is something like a data availability committee that Arbitrm Nova has competitive in that same sort of landscape as a ZK roll-up? Yeah.

So I'd say similar to what we touched on before. that if I was, you know, apples to apples, I would say an optimistic rollup is competitive to a ZK rollup, at least in terms of technology. I'll talk about like cost in a second. And, Nova or any trust technology is probably analogous to the ZK rollups called Validium. So that's probably how I would, I would say that. And basically what Validium is is ZK proofs plus data off-chain. So that's, in terms of cost, I, you know, I think that they're actually going to be, you know, relatively cost-compatible as well. I think my personal take is,

and at least from everything I've seen to date, is optimistic roll-ups will be cheaper, at least for a long time, than ZK roll-ups. And if you take all that data and put it off-chain, then I think the same thing will hold for NOVA to Vyliums as well. So there's a tendency some people have is to say compare arbitrum today to some future ZK roll-up in the future, but in terms of systems that are live today,

and you know we have a lot of birthdays in store, And that's what, you know, it's important to remember, which is the same way, you know, our future will not look like today either. So I think today, Arbitrae Nitro is the cheapest and most compatible general purpose role-up that exists across ZK and optimistic. And I think Nova will hold that spot for data availability chains. And are there any... Sorry, go ahead, Harry.

Oh, yeah, no, I just wanted to jump in and add there because actually I want to disagree with Stephen and say, Nova is way better. Because basically, sort of the big, the big thing that Nova has over Validiums is that there's sort of, Validiums have to do proofs. Volidiums have to generate these big expensive ZK proofs that take a lot of computing power. And that like in the roll up space, there's an argument that it like kind of there's some compression advantages. There's sort of some tradeoffs you can say, well, they can do more computation, but then they can avoid posting some data. For volidiums and any trust chains where data is cheap, that's just a really clear, clean win for any trust chains that sort of there isn't any, that there's this big expense

that Volidium's have that Nova just doesn't have. There you go. That's Harry thrown down. Bring it. Bring it. ZK. Roll. So guys, let's zoom back out into the app player of Arbitrum. We're still calling this thing Arbitrum 1, not Arbitram Nitro. It's just like the Nitro. upgrade to Arbitrum, right? Yeah, so I think before we have Arbitron Nitro is the software stack. It's actually powering both Arbitur 1 and Arbitranova. And admittedly very, I'm sure, confusing. So thank you for clarifying that.

Right, right, right. Okay. So on Arbitrum, the Arbitrum that people know and love and use, mostly the Arbitrum that they're familiar with, the app layer is pretty damn robust. We had the Treasure ecosystem founders on for a very high energy, interview that I did with thumb. There's also GMX, which is definitely taking crypto Twitter by storm. Overall, like, what else is going on in the Arbitrum app layer that really gets you guys excited?

I know you're not allowed to pick favorites amongst your children, but is there any apps that you guys particularly enjoy or are users of? Yeah. You know, I think you hit on some of the big ones, which is, of course, Treasure GMX, But there are some others that are really, really, and I'm for sure going to miss somebody, so I apologize in advance to all those people. But, like, you know, particular ones that I'm excited about are also mycelium, future swap. Also, you mentioned GMX, Umami, Vesta, you know, and the theme here is, you know, there,

and of course, all the layer one like defiapsy theory, you know, uniswap, sushi swap, incuraviary are there too. But the cool thing is that we're enabling something like the, the deep. DeFi 2.0 that they almost, it's interesting, they almost use the Defi 1.0 as infrastructure, right? Like they'll build and tap into Uniswap pools and or sushi swap pools. And that's, you know, something which we really enable that, to me, to me, there are really two exciting things about the apps that we enable in Arbordroom. One is doing uniswap, but cheaper. And that's really important because, you know, traders, retail traders who were priced out before can now use

Uniswap and they could do a $100 trade and the fee doesn't like dwarf the purpose of the trade. But then there's also like the GMXs are things that you couldn't do this on on layer one. The transactions are just too large and expensive, but really, really great product that you can do on layer two. So those are the things that I'm most excited about. And I fell into the trap of listing some names. I'm sure I will get in trouble for this later. But I'm excited about all of our children. Stephen, Harry, has the treasure community gotten you to do an E?

yet? E. What is this? Wait, what is this? What is an E? I don't know. It's an internal meme to this community. I don't know how it came about.

They had me do it on the live stream, too. I don't know how it came about either. I think I made a bad pun on Twitter the other day where they're talking about gaming. Instead of AAA, I said triple E. Okay, guys. So hypothetically, if there was a token to be associated with Arbitrum. What would its ticker name be? Just out of curiosity. What would what would you call the ticker name? Yeah. It's a great question. I don't know the anchor of that question. Maybe some users in the comments have some suggestions. I will read them.

So I thought of like Arb because Arb's like Arb for Arbitrage. Capturing the Arbitrage name as your ticker name would be pretty cool. But Arby also just sounds fun. No, no, no. How would you spell Arby? Would it be A-R-B-I or R-B? Yeah. That's a R-B-I. E? Or maybe just like R-R-B. right like that i know it's not like a r b y like r b's right so letters rb and if i was this hypothetical token when would we learn the name of this hypothetical token like when would we learn about this so let me tell you this actually because it actually relates a lot to to our launch today and what we're doing our team is tech first and that that is the most important thing for us and the reason for that is because you know as i think you share this belief we're not building tech for, you know, we're not trying to win in a week or a month. We're trying to build tech for decades and generations that we think it's going to be really

foundational for a very, very long time. So getting the tech right first, you know, even before we think about any of these questions, having mature tech is critically important to us and the most important to us. So we wouldn't really even honestly engage with this, you know, before, say, our tech is mature. And the good news is, Arbitero definitely goes a long way to, the maturity of our tech. And now, obviously, we do want to, you know, continue on the path of decentralization of our protocol. So, you know, we will be engaging with these and thinking about these questions very, very strongly. But to us, it is tech first. And the tech, you know, the good

news is that the tech is pretty mature now with the launch of Nitro. So I have nothing specific to share today on that. Unfortunately, only to say that, um, you know, now that the tech is out of the way, some of these questions of how do we decentralize, how do we involve the community more in the protocol become very, very important to us. And we will definitely consider various options there. And we will, you will absolutely be first to know when we have anything to announce. But we do have some really cool initiatives that are that are coming up in plans. Please, you know, what about the remaining?

Like, so we got Nitro out the door. So now like Arbitrum is. now seven Ethereum's. So like check that box of scale for Arbitrum. What are the other like checkboxes that are really on the list that you would consider on the path towards maturity for Arbitrum tech? Yeah. So Arbitrum has, you know, we call it in running in beta mode today.

And what that means is a few things. We have some checks and guardrails in place around things like who can validate and who can do that. It's actually not just just us anymore. more. There are some others involved. The Ethereum Foundation is validating. But opening that up and continuing to do that is you're going to see more on that in relatively short order. Exciting announcements coming there. So some alpha. Is that the same conversation as decentralizing the sequencer? That was my next point. Decentralizing the sequencer. So that's more

further. That's decentralized validation. Decentralize that sequencer is the idea of the sequencer is relatively limited in what it can do. Like if the sequencer, it can't, sensor because there's a force on layer one. You can just post a transaction to layer one. It can't like post a bad transaction. The only thing the sequencer can do is reorder transactions and extract MEV as the term is. We run the sequencer today and don't do that. We process transactions in the order they come in, but decentralized the sequencer is a way to say, hey, how can we have many people running the sequencer? So logically, there's one sequencer, but under the hood, it's a bunch of people running this and you have run this with a protocol

that is called fear ordering. And it's something that I worked on during my time at Cornell, a fair ordering BFT protocol or fair ordering consensus protocol that says, hey, we're running a sequencer in a way that it can't reorder transactions. So really try to minimize MEPV. So that's something which is also coming up on our roadmap in pretty short order and have some really, really good initiatives running internally there as well. Well, you guys have certainly been hard at work for a very long time.

and it's obvious from the energy in this chat here, that the community that you have corralled around your protocol is also just big fans. And with the robustness of both the DFI and the NFT ecosystem on Arbitrum, the future looks very bright. So onwards to birthday number two. Looking forward to it.

Thank you so much for having us. Stephen. Always such a blast. Yeah, it's been great to have you guys. So thank you so much. And David, what I heard from this is when token, when the tech is mature, and the tech is almost mature enough. That's what I heard. Got to finish puberty, and we're going through puberty as we speak.

There we go. And of course, guys, if you want to get started on Arbitrum, actually the bankless newsletter, which is a fantastic newsletter that you should subscribe to, recently posted an article about how to get started in Arbitrum includes the Arbitrum Starter Pack. So that will guide you there. And we do encourage, of course, you guys, as we're exploring the frontier together, go explore a roll-up. Layer 1 is not enough anymore. You need to think about migrating to a roll-up. And Arbitrum could be one of those that you consider.

As always, risks and disclaimers as we close. ETH is risky. So is crypto. So is defy. You could definitely lose what you put in, whether it's on layer 1 or layer 2. We're 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.