Bankless - Introducing: The Optimism Collective & $OP Airdrop #1

Starting point is 00:00:07 Hey, Bankless Nation. Welcome to another state of the nation. David, you know what? I woke up this morning optimistic. And I'm optimistic. Yes, about this episode. Okay, because we are talking with optimism today. We originally titled this. We'd booked this a while ago. We had originally titled this optimism with a bunch of question marks because we had an inkling. We had an idea that optimism was going to launch something on the 26th of April, which is the date of which we're recording. and indeed, just an hour or two, prior to us recording, they have launched something. David, what is the thing or the things that optimism has launched? And what are we going to talk about today? Oh, my gosh.

Starting point is 00:00:48 It is a cannonball of an announcement, which has really, I think, filled the gaps in people's brains about what is the future of these L2s? How are these layer 2s going to decentralize over time? Because that is, of course, the whole entire point of this crypto revolution is to decentralize as much as we can, decentralize all of the infrastructure, and optimism's post. Introducing the Optimism Collective has given, more or less, the roadmap for decentralizing optimism and giving over responsibility, Ryan, to the community. And they have pioneered a two-house model, a brand-new system of governance,

Starting point is 00:01:23 one called the Citizen House, one called the Token House, and also a new model for retroactive public goods funding that's going to make the optimism layer two a pleasant place to live. And so we are going to talk about all of these things with the co-founders of the optimism layer two, Ben, Jing, and Carl, the most infectiously optimistic team, I think, that exists in crypto coming up soon.

Starting point is 00:01:47 After this show, right after this show, there is an AMA hosted by the optimism team. There is a link in the show notes to the tweet where you can get that information that is happening at 1 p.m. Pacific time. What is that? 4 p.m. Eastern Time. Link in the show notes.

Starting point is 00:02:02 So after we get all of the high level questions out of the way in this show right here, there is a AMA Twitter space as being hosted by the optimism team right after this. Guys, there's just so much going on in crypto right now. One other thing before we get in, we have to mention that is going on is Graph Day. This is a conference that is coming up June 2nd, half, actually three quarters hackathon, really, and one day of learning. So June 2nd to the 5th. And this is happening in San Francisco.

Starting point is 00:02:33 If you're not familiar with the graph, the graph is a protocol that is essentially indexing all of Web3. So, you know, when you're going to a Defi user interface, you're probably tapping into the graph at some level. So if you are looking to network with some people, if you're looking to build in the Web3 ecosystem, if you're looking to learn, launch your career, go ahead on over to this conference. Fantastic people. Founder of Connect. Arjun is going to be there. Camilla, Cammy Russo from the Defiant is going to be there. A whole bunch of other folks are going to be there as well.

Starting point is 00:03:06 Jake. Jake. Bruchman. Yeah. He's a guy that killed us on NFTs. And of course, it's also going to be Kevin O'Waqi, the public goods maxi, and a bunch of other people that I find particularly inspirational. Right in that bottom left corner is Reese Lindmark, one of my personal heroes in this

Starting point is 00:03:20 space. You know, I wish when Jake pilled us on NFTs, we had to bought more dude. I was like, I was in 2020. Anyway, that's gone. Now we have new opportunities in crypto, in defy. We're about to get into them. But David, got to start with the question I ask you before every state of the nation, which is this. What is the state of the nation today?

Starting point is 00:03:38 Oh, Ryan, what else could it be other than being optimistic? Because there's nothing, like I said, there's nothing that makes me more optimistic about the future of Ethereum than the combination of layer twos and public goods. And that is really the thing that optimism, the optimism team has always emphasized since genesis, is how do we scale Ethereum while also, scaling our values. And that is what I think is instantiated, one of my favorite words, in the optimism layer two, the connection between layer two and the value of layer two's and funding public goods and also community empowerment and an individual empowerment. As we scale

Starting point is 00:04:11 out our networks, we also scale out our human values, which could, you know, it was what a little bit of what we need in this world, Ryan, right now is a bunch of scaling of values in an optimistic fashion. Yeah, absolutely. And I also wonder, the narrative that we talked about the beginning of this year is it's going to be L2 2022, the year of layer two's. Actually, that was what we talked about last year. We talked about that. We talked about L2 summer. But now we've got a year later, I feel like the coming of tokens will usher in a

Starting point is 00:04:42 different sort of L2 summer and it's pretty exciting to see. And I sort of wonder if this is how Ethereum pushes back on some of the alternative layer one narratives that are out there. We'll have to see what the team thinks about that as well. and we are just about to get into it, guys. But before we do, we want to thank the sponsors that made this episode possible. The era of proof of stake is upon us. And Lido is bringing proof of stake to everyone.

Starting point is 00:05:05 Lido is a decentralized staking protocol that allows users to stake their proof of stake assets using Lido's distributed network of nodes. Don't choose between staking your assets or using them as collateral in DFI. With Lido, you can have both. Using Lido, you can stake any amount of your ETH to the Lido validating network and receive STEth in return. SCEEth can be traded. used as collateral for lending and borrowing or leverage on your favorite defy protocols,

Starting point is 00:05:27 all this without giving up your ETH to centralized staking services or exchanges. Lido now supports Terra, Solana, Kusama, and Polygon staking. Whatever your preferred proof of stake asset is, Lido is here to take away the complexities of staking while enabling you to get liquidity on your stake. If you want to stake your ETH, Terra, soul, or Matic, and get liquidity on your stake, go to lydo.fi to get started. That's LIDO.fI to get started. The layer two era is upon us.

Starting point is 00:05:54 Ethereum's layer two ecosystem is growing every day, and we need bridges to be fast and efficient in order to live a layer two life. Across is the fastest, cheapest, and most secure cross-chain bridge. With Across, you don't have to worry about the long wait times or high fees to get your assets to the chain of your choice.

Starting point is 00:06:09 Assets are bridged and available for use almost instantaneously. Across bridges are powered by Uma's optimistic Oracle to securely transfer tokens from layer two back to Ethereum. A token proposal is being deliberated as we speak in the Across Forum, where community members will decide on the token distribution. You can have your part of Across's story

Starting point is 00:06:26 by joining the Discord and becoming a co-founder and helping to design the fair, fair launch of Across. If you want to bridge your assets quickly and securely, go to across.tto-chroar to bridge your assets between Ethereum, Optimism, Arbitrum, or Boba networks. If you're trying to grow and preserve your crypto wealth, optimizing your taxes is just as lucrative is trying to find the next hidden gem.

Starting point is 00:06:48 Also, IRA can help you invest in crypto in tax advantage ways to help you preserve your hard-earned money. Also, crypto IRA lets you invest in more than 150 coins and tokens with all the same tax advantages of an IRA. They make it easy to fund your alternative IRA or crypto IRA via your 401k or by contributing directly from your bank account. There is no setup or account fees and it's all you need to do to invest in crypto tax-free.

Starting point is 00:07:12 Let me repeat that again. You can invest in crypto tax-free. Diversify like the pros and trade without tax headaches. open in Alto CryptoIRA to invest in crypto tax free. Just go to altoira.com slash bankless. That's A-L-T-O-I-R-A dot com slash bankless and start investing in crypto today. Welcome Bankless Nation to this very special edition, this optimistic edition of State of the Nation. We are joined by three co-founders of the Optimism Project, the Optimism Layer 2.

Starting point is 00:07:42 Sitting in the middle, we have Jing, the executive director of the Now Optimism Foundation. We'll have to talk about what that is. Sitting on the right, we have the chief musician of the Optimism Foundation, Ben. And on the far left, of course, the eternal optimist, the guy that got me into crypto in the first place, Carl Floresh, the CTO of O.P. Labs Public Benefits Corporation, again, going to talk about what that is, because that is also something new. Guys, thank you so much for coming on this episode of Bankless. I'm sure like you, we are all here feeling optimistic, but you guys just release a blog post. And in the very beginning of that blog post, you guys say, Ethereum sits at an unprecedented moment and we can't squander this opportunity.

Starting point is 00:08:26 Jing, what does this mean? What unprecedented moment are we at? And what could we squander? The unprecedented moment is this migration to L2s. And Ethereum enables these new human coordination systems to be designed. It fundamentally changes game theoretic constraints of, what people were able to build before. So we have an opportunity here while creating an L2, creating value, generating revenue to design a new way for all participants of the optimism

Starting point is 00:08:59 network to coordinate. And so you also talk about not wanting to recreate Web2 incentives. Can you just elaborate on what that means and why that's important? Yeah, I mean, I think everyone has seen how the Web 2 incentive structures have played out, where you have revenue power influence continuously accruing to this single centralized source. And Web3 is supposed to reimagine that, yet we still can fall prey to the same pressures of centralization, desires to maximize profit. Is that something you see in the crypto space today? Yeah, 100%.

Starting point is 00:09:39 Just because you can build new incentive systems doesn't mean everyone is building new incentive systems. Carl, Ben, I want you guys to give you guys an opportunity to answer similar questions. Any thoughts about this unprecedented moment on Ethereum's history? Where are we on Ethereum's history when it comes to the network? Oh, when it comes to the network, I mean, we are the modular blockchain revolution, the kind of state of the art of the technology is scaling up so fast. And why is it scaling up so fast? It's because there are so many people building on Ethereum, building the core infrastructure,

Starting point is 00:10:15 these incentive systems like this is a movement like we have never seen before but that is also the case for the the entire space at this point and so we really don't know how things are going to shake up right we definitely could live in a world where we do end up recreating Web 2 incentives bang go for you can I hear with my favorite story on this please do it have you guys ever read the Declaration of Independence of Cyberspace of yes but I think you might need a refresh my and the listeners man memory. So this was a post written in the 90s by John Perry Barlow that basically was the,

Starting point is 00:10:51 I think, you know, is very analogous to like the down the crypto rabbit hole aha moment that we all have where John Perryley Barlow said this new cyberspace that we're creating these networks of information passing are a new realm. And he basically says that, beware ye weary giants of flesh and steel, you have no place here, right? And it's this, it's a super well written, super moving sort of call to action. But ultimately what we have to keep in mind when we read this is that just because the internet had the ability to do this doesn't mean that it was going to produce this. And in fact, if you reflect on where the internet has been taken, right, there's a huge amount of negativity about Web 2, which is exactly the thing that Perry Barlow there is talking about

Starting point is 00:11:33 being very important. So it's important for us not to do that again. We can make something new or we can repeat the mistakes of the past. And I think to add on to the Web 2 and element. We are seeing the what seems to be just like the nationalizing of the internet. Now we have like this Facebook country that we're a part of. We have this Twitter country that we're a part of. And all of a sudden, the values of Web 1 where power was really pushed to the margin margins has been concentrated back into Web 2. And I think we're also seeing that in our crypto networks as well. And so I think this is what you guys are really getting into with making sure that we can redefine the internet with Web 3 based in.

Starting point is 00:12:14 Any comments on that before we go on? Too many, but I know Carl has good ones. Cool. I was just going to say that humanity is important. We need to capture and fight for our rights as people and individuals to make sure our networks reflect our values. And we'll talk more. Yeah, we're going to illustrate how we are going to get all of that done in the rest of this show. But first, guys, is there a token that's a part of this story?

Starting point is 00:12:39 Is a token relevant here? Are we talking about a token today? Yeah, I mean, cars. run on gas, but what you want to do is get from point A to point B. So we have a token, but we're trying to get to point B, and it's one small part of the story, but I know that people are really excited about it. Of course. If you look at all the communications we've done this, we've tried our damnedest because we know no matter what the D-Jeds will get out there, but the token is missing the point of this thing. This is about building a new system of governance and

Starting point is 00:13:10 funding mechanisms for public goods. It's not about when token, you know, short-term land grab, money grab, you know, pump. Of course, yeah. And in the words of the ENS Dow, you are air-dropped responsibility, and I think that rings true here as well. And part of the way that that responsibility manifests is through this new governance structure that you guys have introduced in your blog post

Starting point is 00:13:33 called the Optimism Collective, the Op. Can you guys walk us through the OP Collective, and how that has been structured and what its whole purpose is? That's got Carl written all over it. What's up? All right, so we have been doing governance research. This is public goods specifically, public goods research for a long time.

Starting point is 00:13:56 And yes, you brought it up. So the optimism collective is a bicameral governance system. We have two co-equal houses, A, the citizens' house, B, the token house. Okay, what is the major difference between these two houses? Well, it actually comes down to the transferability or sellability. of the governance rights for each house. So the token house, you of course have these tokens. They're out there in the world.

Starting point is 00:14:23 They're liquid. They're transferable. Then you have the citizens house where these citizenship are identities. They are soul-bound tokens. As in, you cannot transfer them, you cannot sell them. Instead, you can earn them, receive them, give them, et cetera. And the importance here is that we balance these two houses.

Starting point is 00:14:43 If we just had tokens, then, and governance rights would be viable on the open market for, you know, for a cost. But that, when we're talking about a system, which is supposed to protect human values, right? Human values are not reflected necessarily in our markets. Our markets are extremely unequal. There's a very, you know, I can have one vote in terms of $1, and you can have a bajillion votes in terms of a billion dollars. And that would just, that would reflect very negatively in how our Internet plays. out. So we introduced this

Starting point is 00:15:17 citizen's house. And the citizens house is roughly, right, one person, one, you know, voting power, right? You're not going to have this thing where you can have, you know, a million X more voting power than someone else. Maybe there's some gradient, but it's roughly,

Starting point is 00:15:33 you know, equal. And that is really critical to kind of check the balance, right? Because it's important. Token holders are important, right? They represent the interests of the network insofar, as their wallets, right? Everyone wants to not lose money.

Starting point is 00:15:49 So there is a valuable incentive system there, but it needs to be balanced by the soulbound tokens, by these identities, by these citizens. And so what we are creating is a really decentralized, decentralized governed network for the people, you know, by the people, right? This is, we're not ready to just say, okay, token governance, that's it.

Starting point is 00:16:13 We're actually going to push this thing forward. Now, I will say, I'll keep going, I will say that it is going to take a long time for us to get to the end state. In fact, in our Constitution, which you can take a look at and our vision doc, which you also can take a look at, but in our Constitution, we have four years to get to a point where this thing is kind of ready to take the training wheels off. Right now, distributing identities and citizenship is an unsolved problem, right? proof of humanity, like various other things, Soulbound tokens, transferability. If you read Vitalik's blog post on Soulbound,

Starting point is 00:16:49 he outlines a lot of the problems that exist in the identity, you know, space. But if we were to fully get to, you know, try to get to the end state today, we would have, we'd be left with just the token house. So what we're doing is we created this whole system where we have the foundation, and the optimism foundation will actually steward the governance protocol to its final form as a balanced,

Starting point is 00:17:13 centralized, bottom-up governance system for the people by the people. Okay, so I just want to unpack this for a minute. So, yeah, that's really cool. And there's so many interesting ideas with this particular project and what you guys are doing here. So there's this thing called the Optimism Collective. And previously, David and I have talked about on bank lists about layer two being almost like many countries, city states, states within a federal government, right? So think like California or like Virginia or something like a state within the federal government.

Starting point is 00:17:47 And so you at the beginning of your post in the tweet thread have this picture of optimism as this like community, as this sprawling, wonderful city space where people make their homes and live. And that's indeed what we're doing. You guys were talking about the great migration from L1 to L2s. We're making our new homes on these layer twos. And so the optimism collective is this, I guess, state, right? This place where people live. And now what you're doing is you started to introduce words like constitution and governance.

Starting point is 00:18:21 Now we have to collectively decide how this state is actually governed. Like how do we how do the people who live in the state actually make decisions? And what you're proposing, I want to make sure bankless listeners get this because this is super unique is two. bodies right so in the in the US you have like the Senate and the house right those are two different bodies in this system we have two bodies one that votes with capital that's where the token comes in that is the the token house as you've called it and the other is a almost like a one-person one-vote sort of thing the people's house if you will the citizens house so we have tokens as a primitive

Starting point is 00:19:02 which we've had for a while and now you're introducing people individuals as a primitive. And together, these two bodies are going to essentially make governance decisions for this state, for this beautiful city that we're trying to create on layer two. Is that right, Carl? Yes, that is absolutely right. And I just want to say that it is on layer two that we're trying to create this, but it is also on the internet more broadly that we are trying to create this because right now we sit at an inflection point. Right. We have Elon Musk, Twitter. We have like, you know, Dolly 2, you know, painting amazing artwork, right, without a human involved, right? There is, this is a moment where the internet is most sorely in need of human

Starting point is 00:19:51 representation, identity, and fixing these problems that we, that we have. So like, we need to solve this for crypto because crypto is kind of the old, like the governance testbed and the fertile soil for all of these experiments. But it is going to be something. that affects the entire web, right? This is the revolution. This is super cool. And so this is something you want to export. I want to just camp on the Elon Musk thing for a minute because that is the news today, right? So Elon Musk is buying Twitter, apparently. That is the thing that's going to happen. And people should realize that Twitter governance is essentially it's just the token house. It's just capital. It's just capital vote. And so who essentially gets to dictate what the rules on Twitter is, the majority of Twitter

Starting point is 00:20:36 token holders, shareholders, of which Elon Musk is apparently going to be the majority owner, and he's going to be the guy, right? Our governance for Twitter rests on Elon Musk. What you're proposing is something different. So you'd still have some of that token vote responsibility. But also, this is as if in the future, not right now, but also individual Twitter users. Every individual human who had an account also got to vote on the governance process. And I think what you're saying is there's a lot of steps to get there. But that is what you're talking about and making this thing by camera. Well, it's not just token vote. It's not just shareholder vote where someone like Elon Musk can go like by the freaking like the state of optimism. We actually also have the

Starting point is 00:21:21 individual users of optimism who have a vote in the system. And you think you think optimism and crypto can export this to the world, like export this governance style to Web 2. Am I hearing that correctly? If it works, we're about to see if it works, I guess. I think a lot of the issues that people take issue with in Web 2 or just the world more broadly are issues with plutocracy. You have direct plutocracy like Twitter shareholder voting, and then you have indirect plutocracy where Twitter is governed by its shareholders, and then some country's democracy maybe is secretly influenced by the stockholders of various companies,

Starting point is 00:22:01 lobbying for whatever. So we have a place for plutocracy. The economy of this digital city is still important. But our hypothesis is if we make explicit a place for plutocracy and a place for democracy, can we draw a cleaner line between the two where you don't end up having this sneaky plutocracy? Maybe it'll work. Maybe it won't. We'll see.

Starting point is 00:22:27 We're going to try, though. That's what Ethereum is for. We got this. And I think you guys can tell Carl's infectious optimism is why me and so many others have been brought into the fold of Ethereum back in 2017. And guys, there's just one more dynamic I want to drive home about this whole system just to really, really illustrate this for the listeners. On one side, on the token side, we have this fungible token that is freely tradable and has a market price. On the other side of the spectrum, we have a non-fungible token that is soul-bound. as in fixed to the address.

Starting point is 00:23:04 These couldn't be more opposite sides of the spectrum. One side, token, probably going to be on all the dexes. It's going to be freely tradable. It's going to have a market price. On the other side of the things, we have ERC 721 tokens, maybe it's 721, that is frozen inside of the specific Ethereum address of specifically known people. And this clear barbell just like pushing out things to the periphery

Starting point is 00:23:26 of the possibilities of token designs, I think is really interesting. And something in your guys' blog post that has stuck with me is balancing the short-term and long-term incentives of the system. Can you guys talk about how these two token models, optimizing for two completely different things, balance the short-term and long-term incentives of the system? Sure. Yeah, this is kind of what we were trying to examine when looking at how plutocratic systems have shaped out. You have Facebook, for example, making all of these decisions,

Starting point is 00:24:01 that are great for profit in the short term, but have damaged its reputation, its user base, its just general ability to succeed sustainably. And if we assume that the token holders of optimism can be modeled similarly to Facebook shareholders, then we want a separate house of people who are more aligned with the long-term interests of the protocol. And so instead of investing capital in the protocol, we want to give these non-fungible tokens to people who have invested time, energy, reputation, things beyond capital.

Starting point is 00:24:42 And there are fundamental differences between these different kinds of assets that we're talking about and all of the systems that we're discussing. but like this, you know, we can look in the real world to see where identity is sorely needed. And so that is, you know, we had to add in the citizens' house. Of course, and you guys are experimenting with his brand new system of governments, which makes sense to me. It seems to pull from history from to model out governance structures, but also use the advantages of a liquid democracy structure that one would find with crypto networks and with smart contracts and with tokens. that are permissionlessly and uncensurably available across the internet. And if this goes well, this governance structure can be exported to the rest of Ethereum, all of the layer 2s, and hopefully the rest of crypto, because the rest of crypto kind of needs it.

Starting point is 00:25:38 And this is hopefully the value add that this governance model can export to the rest of the ecosystem. And that is something that has always drawn me to optimism, is its commitment to exporting its innovations towards the rest of the ecosystem. and that is also relevant when we discuss public goods and retroactive public goods funding later in the show. First, though, I want to talk about this very funnily titled section of the announcement titled, Check Out My Only F. Excuse me, I messed that up. Check out my O.F, as in the Optimism Foundation. What is the Optimism Foundation? And what should we be checking out? Honestly, we did make an OnlyFans account about a year ago.

Starting point is 00:26:18 We were going to expose our test net endpoints on the OnlyFans count, but... Is that a true story? It is a true story. Yeah. Maybe we'll put Node set up information on... Anyways. The Optimism Foundation is a steward of the community. It's organizing governance experiments, building up the collective, bootstrapping the

Starting point is 00:26:48 ecosystem. So if you think of what was previously Optimism PBC, which is now OP Labs, as like the technical right hand executing on creating the best fucking protocol ever. And then the foundation is building out the ecosystem. It's the go-to-market. It's funding teams external to the PBC to build out other pillars of infrastructure. That's cool. And so this, the Optimism Foundation, as Carl, you were talking about earlier, that's kind of the bridge type organization to get us to this fully decentralized system. Okay, so I have some questions about this.

Starting point is 00:27:29 So I think people, like, want to know what it's going to take to be a citizen. So that sounds awesome. I want to become a citizen in the citizen house of optimism. I want my soul-bound NFT. And by the way, again, just for people, if that's a new term, we talked about it twice. I feel like David kind of defined it.

Starting point is 00:27:47 But that's an NFT. that gets distributed to, say, an optimism address, a public key of some sort, and it can't be moved. So it can't be transferred, can't be sold to the highest bidder. It is stuck there in place. So it's sort of matching one eth address, one individual. How do you distribute something like this? How does someone become a citizen in the citizen house? That is a great question.

Starting point is 00:28:12 So this is the subject of a large portion of our governance experience. So I'm going to be relatively high level, but it's going to be iterated on and kind of fleshed out over time. However, the rough intuition for how to become a citizen is to get involved with the optimism community. Right. If you move to a city, you are a citizen of that city, right? You live in there. You're, you know, you're in a neighborhood and you're going about your daily life. Similarly, if you come to optimism, oftentimes you're going to be a part of a various, you know, different optimism community.

Starting point is 00:28:48 right there are these you know different pockets of optimism users with different interests and different friend groups so you move into a neighborhood within optimism and we call these different neighborhoods quote like opcos so they're like optimism communities or you know companies or you know whatever and so we are going to be at least for our next experiment allowing these different communities to distribute citizens to all of the people who are within their community and those citizens will now have these solebound NFTs and maybe we can even make it so that citizens give to other citizens. So at a high level, if you know something called a web of trust, what we're going to be doing is we're seeding the web of trust on chain with the most active, you know, optimism, communities,

Starting point is 00:29:34 opcos, and then they will distribute their citizens and we can in the long term have some kind of dispute mechanism to make sure that one citizen is one identity as opposed to one identity having five citizens citizens citizens ships so there are some difficult like problems to solve here right which is like the big problem facing all of cryptos how do we actually recognize uh individuals how do we solve the decentralized identity problem that's not something that we're going to be able to solve overnight is it so what are the first steps of this is it mostly manual web of trust style and then hopefully over time as we develop better protocols for decentralized identity um optimism would begin implementing that across its city? Yes, absolutely. So it is going to start out with a kind of

Starting point is 00:30:21 seed trust. Because in reality, right, if you need to start somewhere when it comes to identity systems in these webs of trust. So you start out with that little seed and then you grow it over time. And so we're just going to be naturally growing this community. Yeah, it may start out as, you know, a few hundred, maybe a few thousand. But, you know, we can, I could absolutely imagine this thing getting to 100,000 citizens, a million citizens, 300 million citizens, whatever. Like this is, we're talking internet scale identity systems that we're going to all be, you know, existing in. And of course, very importantly, not only is the identity system important, but privacy preserving. It needs to be privacy preserving.

Starting point is 00:31:03 In the article that I put out on bank list, yesterday I talked about how Ethereum seems to be developing in all directions at once. And so, as you guys are pioneering the world of layer two's and layer two governance. Other people are pioneering in the ways of decentralized identity. And as soon as they figure that out, you guys can plug that right into the identity system, but they got to figure that out first. And of course, that is an area of active development of Ethereum. Jane, do you want to say something before I ask my next question?

Starting point is 00:31:32 Yeah, I was just going to say that we're a generalized scaling solution, and there's many kinds of projects that have different kinds of users. So when thinking about how to distribute citizenship or what kinds of behaviors to value or even how to distribute tokens. We decided that it was really best left up to the projects themselves. If we prioritize something like TVL, then projects like AVE may have far greater preference over projects like perpetual. If we prioritize transactions and the other way around. And so each project itself knows what they themselves need to do to garner usage on their own applications. And same with the citizenship.

Starting point is 00:32:12 Each project knows which of their community members would best represent the community's interests in the greater optimism governance. And the way that I've modeled this out of my head, I understand this in my head, is Uniswap had this fantastic opportunity of pioneering the retroactive airdrop. But as an ecosystem, we only have one bullet in the chamber for the good, untainted, retroactive airdrop. So continuing to do retroactive air drops, you know, people, have been doing activity on all the layer 2s for a while now farming the retroactive

Starting point is 00:32:45 airdrop. And so we know that instead of doing retroactive airdrops, we need to have proactive, community-oriented, community-led decisions where the legitimacy and the neutrality of these token distributions is up to the community. And so this will be a little teaser for what's going on in the second half of the show, but there's just not one air drop. There are multiple air drops. So if the people who are checking their account balances right now are not satisfied with the number that they see, there are things that you can do. They better be fucking satisfied. There are things that you can do. It's a fantastic point. But there are going to be things that people can do to work for the protocol if the community deems it legitimate. Guys, I want to keep on going

Starting point is 00:33:29 on this topic of unpacking the optimism foundation, right? And so I think a lot of long-term listeners will remember the Maker Foundation, which was this semi-centralized entity centralized for a while that eventually dissolved into what is currently the Maker Dow. And this is probably the right framing, but there is an extra step here where we have the Optimism Public Benefits Corporation, the newly spawned Optimism Foundation, and also the newly spawned Optimism Citizen's House of the Optimism Collective. Can you guys talk about how these things relate to each other and how responsibility is being oriented from one organization to the next and how this goes, how this goes into the future?

Starting point is 00:34:12 Yeah, I mean, we're, oh, sorry. Oh, okay. I mean, we're still figuring everything out. We have some incredible board members who've done this before. Among the board members is Eva Baylon, who's the executive director of the Graff Foundation, Abby Tickome, who's on the board of the Radical Foundation, and Brian Avello, who is a general counsel to the MakerDAO Foundation. So he's seen those governance experiments through their highs and lows

Starting point is 00:34:41 and all the way eventually till dissolution. I think for now we're just focused on doing the best we can to grow the ecosystem and grow it sustainably. I think it would be really awesome one day if we had a structure similar to MakerDAO where they really are operating in decentralization nirvana. But it took them a decade to get there. And I imagine it'll take us a similar amount of time.

Starting point is 00:35:10 Okay, so what is happening to the current optimism public benefits corporation, the corporation that up until recently, Jing and Ben were a part of, but no longer? What's the long-term fate of that? Same. I think that we're all, I mean, what is the company? It's just like a temporary vessel to organize people, payroll, equity, compensation, to organize towards a singular mission. Right now, we're envisioning the split of responsibilities as the OP Labs, PBC, is focused on the engineering roadmap, the direction of the protocol.

Starting point is 00:35:46 So Carl's still the CTO there. And Liam Horn, fucking Chad, is now the new CEO of OPE Labs. He was formerly the CEO of L4, which was a... the sort of like premier state channels development company in Ethereum, if you guys remember his prior work. He's also a co-founder of ETH Global, which completely changed the game of how new founders enter crypto. Ben and I at the foundation were going to be focused on more high-level direction setting, governance, grant making, things like that. Imagine like an aggressive an aggressive EF.

Starting point is 00:36:27 An aggressive EF is music to my ears, Jing. Okay, so just here's how I understand this. The Optimism PBC, renamed to the Optimism Labs, is the protocol side of optimism development. The citizens and the token holders, they're great, but the protocol specialists are the protocol specialists, and you can't replace those.

Starting point is 00:36:52 So those are going to Optimism Labs. You guys, Jing and Ben, are going to Optimism Foundation, along with some other key members in the community that were not previously a part of the optimism team, members like Ava and Abby and Brian. And so you guys are joining other people and kind of also diluting the previous membership of Optimism PBC with the creation of Optimism Foundation,

Starting point is 00:37:17 with other members, other leaders of the community who have done this sort of thing before. And then we also have the optimism token house. The on-chain version of this whole thing, as in eventually the optimism foundation will slowly morph as we solve identity into the optimism collective, the citizen house of the optimism collective. And is that the whole roadmap for this whole thing? That's the decentralization path of optimism.

Starting point is 00:37:46 Pretty good summary. Two small things I would add. One, OP Labs, not Optimism Labs. Another one that I would add is one thing that you mentioned is that the protocol experts are the protocol experts. So that is something I very much agree with and I would push back on. So it's definitely the case that the group of almost 40 incredible protocol experts and executives that we've put together at the PBC are definitely an incredible, intact, cohesive group. And it's amazing to see them run as a unit. It is also the case, though, that we need to decentralize the development of protocols as we go forward to.

Starting point is 00:38:25 And especially for an approach like us, which is all centered around EVM equivalents, which says that anybody who's participating in the Ethereum stack at large should be able to participate in the optimism stack, it is important to have protocol development that moves beyond just one single organization. So part of, you know, a key responsibility of the citizens is going to be distributing public goods funding, retroactively to the people that are building these important Ethereum protocols. And that need not just be, you know, OP labs. That's like a big community, right? There's so many, so many important people in that ecosystem that should be rewarded. Awesome. I think that this makes a ton of sense as a path towards decentralization of optimism, of course. All right, guys and bankless listeners, that was all

Starting point is 00:39:11 the vegetables, I'd say. But coming up in a second, we got to get to the candy. We got to get to the dessert. So we've got to talk about the token. Who got the token? How was the token distributed? What is the token even called? And also the future for the future airdrops of the optimism token because this was airdrop number one going out today. But air drops two, three, four plus are also on the menu.

Starting point is 00:39:35 And that menu is the candy, the dessert, which is coming next right after we get to some of these fantastic sponsors that make the show possible. Avey is the leading decentralized liquidity protocol. And now AVE V3 is here. AVEV3 has powerful new features to enable you to get the most out of D5, including isolation mode, which allows for many more markets to be launched with more exotic collateral types, and also efficiency mode, which allows for a higher loan-to-value ratios, and of course, portals, allowing users to port their AVE position across all of the networks that Avey

Starting point is 00:40:05 operates on, like Polygon, Phantom, Avalanche, Arbitrum, optimism, and harmony. The beautiful thing about Avey is that it's completely open-source, decentralized, and governed by its community, enabling a truly bankless future for us all. To get your first crypto-collateralized loan, get started at AVE.com, that's A-A-B-E-E.com, and also check out the AVE protocol governance forums to see what more than 100,000 Dow members are all robbing about at governance.awe.com. Arbitram is an Ethereum layer two scaling solution that's going to completely change how we use defy and NFTs.

Starting point is 00:40:37 Over 300 projects have already deployed to Arbitram, and the defy and NFT ecosystems are growing rapidly. Some of the coolest and newest NFT collections have chosen Arbitrum as their home, all the while Defyreux protocols continue to see increased usage and liquidity. Using Arbitrum has never been easier, especially with the ability to deposit directly into Arbitrum through all the exchanges

Starting point is 00:40:56 including Binance, FTX, Hube, and Crypto. Once inside, you'll notice Arbitrum increases Ethereum speed by orders of magnitude for a fraction of the cost of the average gas fee. If you're a developer who wants low gas fees and instant transactions for your users, visit Arbitrum. dot i.o slash developer to start building your dapp on arbitrum. If you're a Dgen, many of your DAPs on Ethereum are already on Arbitrum, with many moving over every day. Go to bridge.orghum.

Starting point is 00:41:19 Now to start bridging over your ETH and other tokens in order to experience defy and empties in the way it was always meant to be. Fast, cheap, secure, and friction-free. Living a bankless life requires taking control over your own private keys. And that's why so many in the bankless nation already have their ledger hardware wallet. And brand new to the ledger lineup of hardware wallets is the Ledger NanoS Plus, a huge upgrade to the world's most popular hardware wallet. With more memory and a larger screen, the NanoSplus makes it easy to navigate and verify your transactions. And the paired Ledger Live desktop app gets you increased transparency as to what is about to happen with your NFT. What you see is what you sign. The NanoS Plus gives you the

Starting point is 00:41:57 smoothest possible user experience while you're doing all of your crypto things. So go to the Ledger website to check out the features of the new Ledger NanoS Plus and join the waitlist to get yours. And don't forget about the Crypto Life card, also powered by Ledger. The CL card is a crypto debit card that hooks right into the Ledger Live app, right next to all the Defy Apps and Services that you're already used to doing, like swapping tokens and staking. So if you don't have a Ledger hardware wallet, go to Ledger.com, grab a ledger and take control over your crypto.

Starting point is 00:42:25 Hey, guys, welcome back. We're here with the Optimism team, having some fun during the break. You know, what's also going to be fun is Token Talk. So in this post, you guys, also announced, of course, we're talking about both houses. One of these houses is the citizens house. The other is the token house. So with the token house, of course, there must be a token associated with it. And so I believe there has been the announcement of the release of the token. Can you talk about the token itself? Also an airdrop. Okay, air drop number one. What are some of the

Starting point is 00:43:01 high-level details that people should know about here, Carl? all righty so um air drop number one we took it we took a we thought really hard how are we going to make this air drop super fair like actually fair like give it to the people you know that kind of fair give it to as many people as possible we wanted to make it a wide distribution so the way that we did this is we came up with oh thank you now i don't have to read it for my phone no just kidding. Anyway, the way that we did this was we said, okay, let's take five categories, I believe, six categories, five, six categories where each category representing a different like Ethereum behavior that we wanted to see and that would identify people that, you know, definitely,

Starting point is 00:43:52 either they're in the optimism community or we know that they should be in the optimising community. So how did this work out? Well, of course we were going to. to give two optimism users. That's users that used optimism, like one time. They may have gone in, check something out and left. But then we also decided, okay, let's actually give more to repeat optimism users. Now, notably, if you are an optimism user, you're also a repeat optimism user. So you get both of those air drops.

Starting point is 00:44:20 That's the sum of those two. Or, oh, whoops, yes, the other way around, LOL. Great. So those are the optimism side of things. But then we said, okay, let's get the Ethereum users as well. So we said, okay, Dow voters, that's, you know, people who use different DAWS, multi-sig signers. We know them.

Starting point is 00:44:39 They are, you know, the power users of Ethereum. And Gitcoin donors, that's the kind of, you know, public goods, ecosystem-focused, people that we know build a strong community that is long-term sustainable. As well as people. Wait, Git-coin donators who donated to optimism or Git-coin donators across the board? Get coin donators across the board on L1. Now notably, that does not include folks on ZK Sync, which, you know, we'll see. Anyway, the priced out of ETH is another one where we said, okay, if people are on Ethereum

Starting point is 00:45:14 and they use bridges, that means that they're kind of like exploring the layer two ecosystem. They're exploring various alternatives. Maybe they need lower fees. And those are the kinds of people that can come to optimism because we got low fees for you. So the fun thing, this gets a little bit more fun. So if you get two of these categories, then you get, you know, category A, the payout there, plus the category B, the payout there. But if you get four, five, or even six of these categories, then you start getting bonuses, major bonuses. And they are pretty significant.

Starting point is 00:45:47 Now, just if you are like, oh, man, I'm an optimism user, I really want to, you know, get, I should get tons of bonuses. Well, you do because you're automatically qualified, right? You're a repeat optimism user. You got two of those bonuses already. It makes it a lot easier for you to get the rest of the four. So anyway, yeah, give to the optimism users, give to the Ethereum community, give to everybody. Everyone's happy. Well, the initialirdrop is also what seeds who can vote in governance.

Starting point is 00:46:15 So we thought, what kind of person do we want to have making decisions on behalf of the protocol? And so it was people who care about scalability, but still. care about Ethereum, so those who have been priced out. People who give a fuck about our values, so people who donate to public goods like Gitcoin, people who are entrusted with community treasuries, like multi-sig signers, or people who voted in other governance projects before. And then finally, people who give a fuck about us, people who've used us, the OGs, as well as the newer people who've entered the system. So one of my favorite categories here, Jing, is that actually that last one priced out of Eath, because it's kind of an answer to the, like,

Starting point is 00:47:01 a lot of the debate, maybe the fud, maybe the angst, the anger coming from users who like felt priced out that the ETH is only a whale chain sort of people. And to the extent that's true. And here's optimism, also rewarding that group. If you bridge to Polygon, Nosis chain, Arbitrum, Solana, you're priced out of Eith. Here's some governance. Here's some response. for you. Welcome to the city. Yeah, I've got to give a shout out to Framework, one of our investors, for helping us with that one. We were thinking about maybe people who've used a lot of, like, big gas guzzlers. But you're right that that prioritizes whales.

Starting point is 00:47:43 Guys, I want to also talk about the holistic distribution. So that was the tokens for the particular users who have engaged in particular activities. But there's also just the greater distribution of the token at large. And so I'm going to ask Ryan to pull up this graphic that I just sent him in Zoom, which talks about the token allocation across retroactive public goods funders, the ecosystem fund, the Airdrops, the Sugar Zaddies, aka investors, and also the core contributors. And so can we talk about the total supply of tokens that were given out to users right now?

Starting point is 00:48:20 As in Airdrop, number one, the one that everyone is clamoring about, the one that everyone is checking their addresses to see how much they got. How much of the total token supply was given out in AirDrop number one? 5%. And is that going to be the way it is for future AirDrops, or how is that determined? I think a lot of it is, so we have a pretty big chunk allocated to projects for them to distribute to their users. We have a whole thing we're going to announce with a fancy shit. And then for user AirDrops, I think we just want to see what happens after the first

Starting point is 00:48:56 airdrop, see if these are the kinds of people that are making good decisions in governance. Are they creating more activity? Do they care? Should we adjust the parameters anyhow? We'll see. But that entire chunk of the pie chart is for the users. Okay, it looks like a 19 total percent of the token supply of optimism is going to be airdrop to users, including the 5%. So there's 14% left. 5% got airdroped today, not yet claimable. 14% is left for future air drops. Some going to the apps on optimism, perhaps apps like synthetics and Lyra that have been

Starting point is 00:49:34 there for a long time. Perhaps future apps, perhaps future users. I think it might be up to governance. Is that right? Who determines the allocation of future air drops? A lot of it will be up to governance. The foundation will do analytics, write up proposals, but it's up to the governance to decide.

Starting point is 00:49:55 We, I mean, the token is a governance token. This is ownership in the protocol. It's not an instrument for speculation. It's literal ownership. And so we want to be careful about, or at least intentional, about how these future air drops are distributed. So we don't know today what that will look like. Yeah, I think, and the name of the game here is like iteration, right?

Starting point is 00:50:21 There is no way in which you can do the perfect, thing once and it all go right, especially for something as ambitious and bold as is deemed necessary by this mass migration to L2 that's going on. Like, we have huge lofty goals and to fulfill them, we need to be able to iterate and improve on things. And so, yeah, maybe it's a little untantilizing because people want to know when AirDrop 2, when AirDrop 3, when AirDrop 4, but that's not how we do things here. We iterate.

Starting point is 00:50:49 I think the question to, like, who will be included in AirDrop 2? three, four, my teammates might get mad at me for saying this. But we're trying to create, again, this body of citizens that give many fucks about the protocol. So if you think about equity as

Starting point is 00:51:09 at a company, who do you give equity to? You give equity to new entrance into the system, so that's AirDrop number one. You give performance bonus increases to people who've been performing really well. People who are aligned with the values of the collective that are doing things that contribute

Starting point is 00:51:25 to the goodness of the whole. So don't spin up your bots or weeding actively bot behavior out. Focus on finding your niche, your pocket of projects or communities within optimism that you want to contribute to and make some legitimate organic contributions. Yeah, and the part of this is about

Starting point is 00:51:48 having many different governance mechanisms, which are all distributing tokens and making sure that every kind of corner is caught, right? As you said before, the original kind of OG Uniswab AirDrop took the crypto by storm, crypto by storm, and really changed the game for how, you know, how people interact with AirDrops and made people started farming and it's kind of crazy.

Starting point is 00:52:15 You go on Discord and there's like 50 million people in your Discord office space or something and really it's five people with a bigillion bots, right? It's, it is gnarly out there. But you know what? You know what that says? That says that there is latent, productive energy that people want to get involved and be in the community and contribute. They want to give by creating tons of bots.

Starting point is 00:52:40 But soon they will be able to give, not by creating tons of bots, but by creating tons of goods. Right. This entire mechanism is based around a new form of internet ownership, governance. etc. That is wide scale. That is wide. Everyone can participate. Everyone can get involved and incentivizes productive, pro-social. Happy for everybody, behavior. Love it, guys. Okay, so that was the 19% of the airdrop supply of the total pie chart. But we got a lot of that pie chart left to cover. What is that math? 71%. I'm bad at math. 81%. 19% in addition to the 19% going to the users, there's 19 more percent going to the core contributors. Who are they?

Starting point is 00:53:29 That's us. That's optimism equity holders. Love it. Okay, people on the optimism team, people that founded optimism, employees of optimism. Okay. Also, retroactive public goods funding, a whopping 20 percent, the second largest supply, of the token supply going to retroactive public goods funding. What's that? Okay, so retroactive public goods funding is a whole other podcast that I don't know if we've done yet, but we should do, right? But there's so much to go over here. It's something that we've worked on with Vitalik and with others, and it put a lot of iteration into figuring out what this thing is. In a nutshell, I think very core to our story over the past, you know,

Starting point is 00:54:09 several years now, has been trying to figure out basically how to avoid these incentives of Web 2 all over again, right? So one of the things that is pretty unique to optimism that we've fought really hard for it every step of the way is that everything that we do, do be open sourced, right? We do not sit here and write a bunch of code behind closed doors and license it up. Everything we do is MIT license. It's EVM equivalent. It's free to use and free to contribute to. The reality is that we're in a fortunate position to have been able to do that, but it does not come without its challenges. And so a core mission for us is to make creating public goods profitable, right? And the model that we have for this is called

Starting point is 00:54:52 retroactive public goods funding. So you can read a lot about this. Maybe I'll give a summary. Does that make sense? Sure. Yeah. Okay. Well, actually, no, we're going to save that retroactive public goods funding for the very end, because I'm also super hyped about it. And we're also going to quickly talk about EVM equivalents. So that was retroactive public goods funding. Again, 19% for the user air drop, 19% for the core contributor, the optimism founders and equity holders and employees, It's 20% for retroactive public goods funding to pioneer the Star Trek future that's coming. That's what that means to me. And then, okay, ecosystem fund, 25%.

Starting point is 00:55:27 That is the biggest chunk of this whole entire pie chart. Ecosystem Fund, what is that? You don't talk about it? I want me to hit it. So, ecosystem fund is partially about growth, right? So there's a few different things that are going on here. And truthfully, there was so much information to get out that we have a whole blog post on a lot of this planned for next week. that we'll talk more about this.

Starting point is 00:55:50 But I think the important things to understand is that, of course, you do want to incentivize the growth on a network, and there's different components here that will help us do that. Some of that is for the Optimism Foundation and for us to do as basically business development. A big chunk of it is for the governance systems to be doing. And some of it is also to start seeding new things on optimism. So not just growing things that already exist, but bringing new things on the platform. because the reality is when you open up a system like L2 that really, really, really scales, you're going to have new things that you just couldn't do on L1.

Starting point is 00:56:26 And so it doesn't make sense to just liquidity mine a bunch of forks that go on to optimism because fundamentally L2 unlocks new things to be done. And so we have to incentivize that a little differently. So, yeah, there's a lot to be said here. We're going to have a whole post on this next week that talks a little bit about it more, but it's all very exciting stuff. And I think this is a good time to remind the listeners, the viewers who are watching the live stream

Starting point is 00:56:46 that there is an AMA happening right after this to pick the brains of the panelists that you guys see here. All right, guys, very last section, Sugar Zaddies, the investors, 17%. Pretty sure that's just Chris Dixon at A16Z, maybe Van Spencer from Framework and a few other VCs. Anything else that we talked about there? Paradigm's child laborers.

Starting point is 00:57:06 No, I'm just kidding. Paradigm as well. Okay, all right, that is the complete 100% distribution of the OP token as it stands today. Thank you guys for letting us, for walking us through that. And of course, now I do want to get to retroactive public goods funding in EVM equivalence, the thing that really is the cherry on the cake that excites me the most. The way that I've explained retroactive public goods funding, the model I have it for my head in my head,

Starting point is 00:57:31 is if we have some sort of capital, if we got money on our hands, we can wad up that money into a ball and chuck it into the future and you make people go and build for it. And of course, in the same way that we are using governance to iteratively determine the future airdrops, we can also use governance to iteratively determine who gets that money of cash. And the idea of chucking it into the future is a model for illustrating how you are giving assurances to people who are interested in public goods, interested in building public goods, but haven't been given the assurances that they will actually get money from doing this. And this is the novel mechanism that what you guys said, I pioneered with Vitalik and the optimism team. And what is really is unique to the optimism ethos that I really get excited about.

Starting point is 00:58:21 How do you guys like that metaphor of chucking money into the future to give assurances that people can actually build something? How does that land with you guys? And what would you add to that? It is a great analogy. It's a hilarious one that we haven't. It's interesting. The retroactive does not make me think of throwing into the future, but I get it. And so it makes sense.

Starting point is 00:58:38 In the future, it will be retroactive. Right, exactly, right. And it's true. And that basically speaks to something that we talk about a lot with our PGF, which is that you need assurances as to what is going to be funded in the future, right? You're not going to do it super blindly. You don't want to do it without some sort of guidance. I think the addition that I would make here is that if you throw a bunch of money into the future, it won't just be people that are going to build public goods that will follow it. There are also investors that want to follow it. And so if you look at it, look at what current public funding models are. They're basically grants, right, which is basically chucking money at someone now and telling them to work into the future to do it, right? But the problem is that grants are not a great way of allocating resources. There's lots of problems with them. It's hard for a centralized grant given the entity to figure it out. And prediction is just in general an incredibly, incredibly challenging problem. So part of the long-term vision for how retroactive public goods funding goes is that you allow there to be a market, right? So you

Starting point is 00:59:40 basically say, okay, it's too hard for us to figure out how public goods should, you know, get grants up front. We can figure it out after. That's a much easier problem. But also the people probably want to be paid now, right? Some of these people, you know, need a salary. And so the idea is that you defer that part of the problem to a much more efficient mechanism, the marketplace. And so we imagine a world in which you can literally invest in a public goods project that you believe will have an impact. That will get the money now to create that public good. and you will all get money retroactively in the future. Maybe.

Starting point is 01:00:15 If you pay off. If you are deemed to have provided utility to the ecosystem by the community. Oh, Carl, Carl, can you say the equation? Oh, of course, of course. So, I mean, impact equals profit, right? We want to make positive impact to the collective result in profit to the individual, right? That means that if I do something good, that it comes back to me. And it's really as simple as like a kind of fundamental principle of reciprocity being something that is good for everyone.

Starting point is 01:00:47 You don't want to live in a world where everyone's cutthroat, you know, backstabbing each other. Guess what? We're not going to get anywhere in that world. We want to live in a world where we are working together and we know that we will be recognized for our positive impact. Why is that good? Because when I make a positive impact to the world, everyone benefits. It raises all boats, right? We are in this together fundamentally.

Starting point is 01:01:09 we're social creatures. And so we have to raise ourselves up. And we can do this in a bottom up, like decentralized way. It doesn't have to be this top down. Like, ah, you get, you know, this. No, this is an allocation that comes from us to back to ourselves. It's an investment in ourselves as a decentralized ecosystem. So we started off this whole show talking about losing, just dropping the incentives of Web 2

Starting point is 01:01:35 and recreating human incentives in Web 3. Is this really the key unlocked to getting that done? Retroactive public goods funding? First, I wanted to mention that this is not a novel mechanism that we pioneered. It's been talked about by many people for a long time. We're just experimenting with it. It's one of many mechanisms that we're thinking through. And I think the path for experimentation on retroactive public goods funding, retro PGF, is the most clear.

Starting point is 01:02:07 the hypothesis is people invest in venture capital because of the possibility of an exit. And so if we provide the exit for a not-for-profit project, then the whole ecosystem that's been built around startups generally would also exist for nonprofit startups. I think that this is important to the Web3 ethos. Everything that we use has been built by open source teams. to be a nonprofit, it was really difficult to operate because you might get a big grant check this year. You don't know if you're going to get it next year. Sometimes with researching on like net new technologies, you don't know when the research is going to be done. You don't know

Starting point is 01:02:53 when the deadline is. And it's also really difficult to recruit talent. Even people who don't give fucks about getting rich do give fucks about fairness. And they want at least some share in the upside that they are creating for this massive ecosystem. So if we want those, the brilliant people, like the people in the guest team, the people who built hard hat, Ether's JS, to also do the same for the optimism ecosystem, then we would want them to be rewarded appropriately. And the idea here is the sheer innovation power of Silicon Valley. What if we could redirect that into building out public goods. And I'm pretty sure I just heard Kevin O'Waki somewhere say the words public goods are good.

Starting point is 01:03:44 I'm pretty sure that's what he just said. True, that's true. I got it. And the idea here is we can take the upside opportunity that everyone is so often chasing in this world of crypto and redirecting that into, again, what Kevin Milwaukee calls re-gen finance. So instead of being D-Gens, we can naturally turn them into. regenerative finance, allowing our degeneracy to fund public goods for a more sustainable future. But there's one element left to talk about. And there's a graphic that is, I really, really love

Starting point is 01:04:18 that you guys put in your tweet thread talking about the cycle of positive feedback loop of retroactive public goods funding, but also what is something we have not yet talked about, which is the demand for optimism block space. And so it's something I wrote forever ago was an article titled, transaction ordering can save humanity. It was just when I was just beginning to wrap my head around what the hell you guys are up to. And the idea is that we can use demand for block space. As we all know, okay, here's the meme about that I actually came up with this morning, because as I was preparing for the show. Ether is a great currency. I think it's hope potentially the next currency for the world. Currency and money is a great public good. And when demand

Starting point is 01:05:02 for Ethereum block space gets turned into burning ether and making it more scarce, making it a better money, the whole world benefits. Optimism, when demand for optimism block space occurs, that turns into funding for retroactive public goods funding. So we can have more wads of cash throwing more cash into the future to incentivize public goods funding, and that makes optimism, the layer two, a more fun place to be. Nation states that have good roads, good bridges, good airports, good plumbing, good telecommunications, they are just pleasant countries to live in.

Starting point is 01:05:40 They have good public goods, they have good resources, and that makes it easier to innovate and develop on in these countries. In the same way with layer twos, as we talked about earlier, the layer two's are states. And if we can fund our infrastructure to be better and more pleasant, that makes that place a more pleasant place to live, increasing the block space for optimism layer two. And when there's more fees generated by the optimism layer two, that can go into more funding for public goods on optimism, generated by what you guys called MEVA, MEV auctions. MEV is a kind of a very dense subject. We don't have time to go into the MEV today in this show,

Starting point is 01:06:20 but there's plenty of previous bankless shows that we've done about that to understand MEV. Guys, did I summarize it all right? Is that kind of the virtuous cycle here? Very, very, very well summarized, both by yourself and this diagram. I think the only thing we'd add just because the MEPV word can be a little, acronym can be a little scary for folks sometimes. This is not equivalent to you're going to get sandwiched to fund public goods. It's not the same thing as that.

Starting point is 01:06:47 And in fact, one very important part of decentralizing the basically rights to control block space is that you want a, and this is related to the long-term incentive alignment, is you want that block space to be good. So there are ways that you can structure an L2 that can basically afford different parties like the sequencer, an ability to be extremely extractive. But don't believe the FUD, if you hear that's going to happen on optimism, because long-term alignment means that you want something

Starting point is 01:07:19 that isn't so extractive that it drives users away. Because in the long term, you don't just want a maximally extractive L2, you want a sustainable L2. So anyway, that's just a little bit more on the sustainability. part of that to dispel any like you know latent latent MEVFUD that you might hear and it's all great stuff and just to tie this section off something that I've been teasing a lot in my writing on bankless on Monday and some of my Twitter activities my mind has been invaded by this concept called EVM equivalents and the idea here is that optimism has been working towards making not an EVM compatible layer to which is what people are used to but an EVM equivalent layer two, the nuance behind that is that it's just, it's the values and the actual

Starting point is 01:08:06 Ethereum layer one starts to bleed into the layer two itself. The difference between the layer one and the layer two starts to blur. There's going to be a post I'm writing on Wednesday about this on the bankless newsletter to go into more detail. It's a very complex topic. It's been very challenging for me to understand. But the difference is, is that the point is, is that the optimism layer two, because it's EVM equivalent, whenever it produces something good, whenever some public goods funding thing works, because of the equivalence, it is so easily transferable to the rest of Ethereum.

Starting point is 01:08:38 It can go back to the layer one. It can go up to other layer twos. And so these public goods, the optimism, are generating via retroactive public goods funding and the things that these new Silicon Valley of the Web 3 world build on optimism, they get immediately and freely transfer. transferable to the rest of the ecosystem. And guys, that is something I think is just so beautiful.

Starting point is 01:09:00 And again, how I think that we go from where we are now, where we're going to be dominated by climate change and war, to a Star Trek future. Any further comments? I guess I'm taking the show from you guys. Any further comments on that? Where you are? Save some for me, man. What the heck? No, I mean, you hit the nail on the head.

Starting point is 01:09:16 I think, you know, the only thing that I could add onto it is sort of how it relates to, you know, our journey at optimism. And I think basically, when we look, It was not obvious at the time, but it's basically been a progressive journey towards the EVM equivalence. So we started out building plasma, which was a layer two of Ethereum, so it was an extension, but it was a completely different code base. It couldn't run a smart contract, so it didn't even make sense for it to be EVM equivalent. Then we moved to a roll-up and we said, okay, we can finally run contracts, and we sort of partially

Starting point is 01:09:47 use the Ethereum codebase, but we were not EVM equivalent. Time and time again, what we learned is that the public good of the Ethereum scaling the Ethereum technology stack itself, things like the Ethereum virtual machine and smart contracts and the wallet tooling and how developers write code. All of these things are being built up on top of Ethereum.

Starting point is 01:10:08 And so staying EVM equivalent for us has been a revelation in basically contributing back to the public good that we're already building on top of in the first place. So yeah, you said it all. Maybe there's one last thing we can add. Shout out to EIP 4844. So one big way that we're contributing.

Starting point is 01:10:25 contributing back right now is a new EIP that will cut call data costs way down. And what that means is it will cut roll-up costs way, way, way down. So shout out to EIP 4844. This is going to be a huge deal and we are making it happen. So this is one of the biggest projects that we've ever done that is actually writing in an EVM equivalent code base. It's writing on GETH, but it is not writing the Optimus of L2. It is writing the L1 software.

Starting point is 01:10:51 This is going to be a huge public good. It will help all roll-ups and we're excited about it. Anything you want to add, Carl? Oh, first thing. We have continuously been lowering fees over the past year, and it's still not enough for people. So why you should care about EAP 4844 is that it reduces fees by two orders of magnitude. So instead of fees on the order of magnitude of a dollar, it'll be cents.

Starting point is 01:11:20 So this also doesn't just benefit us, even though we're the ones. that are developing it, this benefits all roll-ups, optimistic and ZK alike. Yeah, and so, just to tie back to the thing that we talked about originally, which is like the whole houses and like the whole governance system, what is this future internet thing that we want to live in? One key thing in the future is we need to preserve the right to exit. That means the right to fork, the right to take the code and repurpose it, right? We are not building the optimism collective so that, you know, the optimism collective can be the number one thing, even though, you know, it would be lovely if that happens, of course.

Starting point is 01:12:02 But we are building it so that humanity can take the code, take the things, and use it to move forward in general, right? Like, everything that we do is it's about upgrading civilization, right? That's like at the end of the day. So writing open source software, making it forcible, making it privacy preserving, all these things are protecting individual rights for the collective good. And so that's, you know, that's why it's so important to be building EVM equivalent and working together to push forward the state of technology. Well said. Upgrading humanity, upgrading civilization. Guys, I just have a just a couple just tie off questions as you're talking about. So this EIP 4844, okay, this is the new 15591559 that we're,

Starting point is 01:12:49 excited about talking about for like years before it actually happened. Then it happened last August. How many years are we going to be talking about 4844? Do you guys have a tease on that? Is it going to be years or can this be measured in months? I'm not looking for like a hard fork date here, but I'm just trying to get a sense of when this EIP is coming in general because we haven't talked about it in bankless yet. We have to just respect the Ethereum governance process here. There's so many things that many, many people have been working on for a long time that need to happen. We are just trying to make or contribute what we can to the process, which is building on a prototype, proving that it works, getting it audited so that whenever governance is ready to

Starting point is 01:13:34 include 4844, there's no other obstacles. Okay. Amazing. Well, we are hopeful for that. We want to do a show all about that. You guys should come back for it. Carl, you want to add something. Sorry.

Starting point is 01:13:44 Oh, I was just going to say that Vitalik designed EIP 4844 to be. very, very, very minimal. So it's, it's easy, you know. Awesome. Good job. Easy. Easy. Easy. The other question that just sprung to mind for me. And in the first part of the show, it was super refreshing to hear you guys talk about the token house, the capital house, is like the plutocracy. Because I don't think that like, I don't think that any, like many other token ecosystems actually think of it. It's the quiet part that you don't say out loud. It is. And we've been saying out loud for a while. We see a little too much out loud.

Starting point is 01:14:22 I just, I think it's the right amount because you have to counteract the rest of the industry. When people start talking about decentralized governance and it's token vote, I'm like, what the hell is, what do you mean? Decentralized governance, right? This is like, you know, capital equals vote. It's not quite decentralized. So I think that's super refreshing. But one thing I was curious about is like if you're talking about a given governance proposal or something, and you've got the token house voting and then the citizen house voting, who has more weight? Or is it sort of 50-50, like plutocracy and citizens? How does that get divided for any single governance vote?

Starting point is 01:14:57 Yeah. So, of course, the goal is for these houses to be co-equal. So if you look at the diagram that we pulled up pretty early on in the collective, that contains like our current working model for where the basically distribution of responsibility falls. So there's some things that are governed jointly by both houses. There's some things that are just the citizen's house, other things that are just the token house. In general, this is something that is going to require iteration, right?

Starting point is 01:15:21 And that's why we have the foundation, and that's why we have a constitution that very explicitly lays out a practice of iteration and evolution, because we're going to have to be tweaking those parameters for sure. Amazing. Well, thank you guys so much for joining us today. I think we probably have one last question to wrap this show up. And this is a really exciting day, I think, for the city of optimism, let's say, the state of optimism.

Starting point is 01:15:47 It's what's next? So what's happening next with optimism? Obviously, today is a big day. AMA. AMA is definitely happening like sequentially next. But after that, when I'm talking about like long-term picture, it sounds like people can check there whether they received AirDrop 1 today. It sounds like the actual distribution of AirDrop 1.

Starting point is 01:16:09 If I'm reading the post correctly, is going to happen sometime this quarter in Q2. So sometime call it May. or June and then what happens after that you want to take it sure well we published a bunch of content today about what we said we're going to do so we have to go and do all of the things that we published today but generally I think this is a good reminder to everyone that everything is in flux it is still incredibly early the product that you see today is one that's constantly being iterated upon The experience today will be very different from the experience two years from now.

Starting point is 01:16:50 So while we build out the governance and the collective and the ecosystem, we'll be continuously making the protocol more secure, more decentralized, making it cheaper and easier to use. So that's what's next. We've got some full plates. Amazing. Well, that sounds like layer two separate. Can I add one more thing?

Starting point is 01:17:09 I'm kind of you off. Yeah, go ahead. Okay, actually two things. Okay, one, just three, four things, five things. Three things. Just get them all out. Okay. One on the technical front, obviously we have a path to decentralization on the, like, you know, technical architectural side that we put out about a month ago.

Starting point is 01:17:23 So I just wanted to take a second to show that. I just wanted to say one thing that Carl has really, like, absolutely pilled me on being like a very awesome thing that's going to be coming about in the next few years is basically the interactions between the optimism collective and, you know, and basically DAOs and communities within optimism, but also those beyond. So I think that this is something that really we are just starting to scratch the surface with the sort of re-emergence of DAOs in the forefront is the interaction between these DAOs. So what I'm like personally, maybe one of the things I'm most excited for

Starting point is 01:17:56 is to see the relationship between the optimism, collective's governance, and the governance systems both on it and within the broader Ethereum community. I think that's going to be really interesting to see some collective coordination, mutually beneficial things. All right, guys.

Starting point is 01:18:11 I think one last question. question for you guys one last thing are you feeling optimistic fuck yes I know chat told me not to swear but very optimistic awesome guys I thank you so much for coming on this show you guys again the infectious energy of your whole team has proliferated out and made me plenty optimistic and hopefully the viewers the chat the listeners are feeling a little bit more optimistic as well because while we are faced with some very large problems in this world, problems that seem to be outside of the scale of our current institutions to be able to handle. Maybe, just maybe, we have a bright

Starting point is 01:18:54 path forward that we can actually see. We actually see the steps. First, we get everyone onto layer two. We get the block rewards funding retroactive public goods. We make our networks better. And then those public goods, those retroactive public goods go from being about Ethereum to about the whole world. and that is something that I wake up every single day I'm like man I don't actually have to be so bearish about the future of this world so thank you everyone on this panel for doing what you guys do because it is a north star for me and I think a lot of us in the Ethereum community thanks guys I appreciate you guys action items of course for bankless listeners one is you can get involved in the city of optimism become an optimism citizen there's some clues

Starting point is 01:19:41 dropped in the episode today. How to do that. You can also check your eligibility for AirDrop 1. We'll include a link in the show notes. And finally, of course, the same team is doing a Twitter spaces right after this show. So go on Twitter. 30 minutes. It's going to happen in about 30 minutes or so.

Starting point is 01:19:58 We'll have some other bankless content on EVM equivalence this week. Of course, got to end with risks and disclaimers. So Dave and I have been so excited about this project. We are also advisors on the optimism project. full disclosure when they invited us in, we were happy to accept. Very excited about what optimism is doing in the space, very aligned with values we share. But of course, as always, got to end with eth is risky. Crypto is risky. Defi is you could definitely lose what you're put in. But we're headed west. Now the west is on the L2. It's the frontier. It's not for everyone. But we're glad

Starting point is 01:20:36 you're with us on the bankless journey. Thanks a lot.

Bankless - Introducing: The Optimism Collective & $OP Airdrop #1

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.