Gas to Zero — ​Filip Pajic | Status Network

Thank you. So, hi everyone. So, um just I notice so if this falls out if it's black just tell if you don't notice. So, um yeah. So, today uh I'm going to talk about uh how rollups are able to actually be gasless meaning you can use a blockchain network without paying any gas.

Uh specifically, uh I'm going to be talking about status network. That's where I work as a software engineer. not anything for the introduction. Um, so I'm not going to stay on this slide any longer and I'm going to go straight into the topic. So what do I want to talk about?

So uh, first of all, I want to cover basics. I'm not sure how many people here are even familiar with the notion of gas or even notice it for that matter. It's not as expensive as it used to be. Uh, is it even possible to remove it completely? on and to introduce you to something that we call karma.

So um can I just see someone raise their hands if you know uh what gas is on ethereum specifically. Oh, cool. Very cool. Very cool. Amazing.

So, uh this might be uh a bit boring section. So, uh I know you guys I I didn't mean to talk about central heating. So, I'm going to talk about gas the unit uh punching. Uh you already know this. It's this unit that measures how much uh a transaction is going to use and how much we should pay the validator for executing our transaction.

So let's see if it's something that we truly need or is it some some inconvenience that we overengineered to in order to get it. So uh I want to introduce you to someone. So this is our little friend uh Pompy. Uh uh Pompy is trying to make a transaction to uh Ethereum network here. So he selects how much gas he wants to use.

Um He sends a transaction. He pays some money in order to be uh executed. We wait right kind of slow compared to other chains. Um and then our network validates we have confirmations and pump is happy right? Uh so I just want to u ask a question here.

What would happen if Pompy decided to not pay for it and if we had millions of Pompies trying to uh trying to run their own transactions without anybody paying for them. Uh very soon we have our network overwhelmed not being able to take any new transactions and not even being able to execute the already sent ones. So that's something we call a dosa. Uh so we now have a clear notion that it's not true just an inconvenience that we have to buckle up with. It's something that truly needs to be there at the moment.

Um before we move um I want just to uh shortly introduce you to rollups. uh we all probably already know about rollups uh but I just want to ensure if there's any key difference from user perspective uh when sending gas so all all the rollups that are trying to keep their Ethereum equivalency they pretty much operate the same way you base on gas your transaction runs there yeah after it's going to get committed to the L1 but that's not something that you're concerned with as a user it's fast, much faster than on the L1. And P is happy, but he still paid for gas, right? Um, let's see if he tried to send a gas transaction. Um, because a rollup is a most rollups currently are centralized networks.

Uh, they would be even uh more prone to toss attacks. Uh, they would be uh able to be uh uh attacked. much greatly. Um, so how do we go from this to this, right? How how can we make a sequencer that's able to accept transactions for free without getting um killed?

One more thing about rollups before we move. Um I want you to uh remember that um as we said previously two clients much almost is pretty much similar to L1 client and uh all eight is going to sit on this validating bridge. Um so for those who don't know every rollup uh has something we call an 80 bridge to which you have to enter to uh to get your funds on the on the network. You might use some alternatives like jumper bridge uh layer zero or whatever but behind the scenes they're all using this validating bridge bridge which is holding all of the funds of the network different. So, um, are is it able to be removed?

Does anybody here think that dentals are cool? I do, you know. Uh, hopefully you too. Um, but just to give you context to step back and give you context about uh who we are, we are Institute of Free Technology. Uh we are a company that started way back in 2017 with uh the largest ICO at that time and throughout the years we we started as a status messaging app and throughout the years we expanded our products to involve a fully end to end decentralized text having Baku which is our P2P communication protocols our P2P storage protocol name which is the third largest uh two point key card or hardware wallet.

Um but the thing I want to talk about here quickly is status. So status the messenger um is one and only truly decentralized and privacy preserving uh chat. Now um in um in such an application uh where there's no central server to relay the chats where every device is talking with each other you need a way to prevent uh spam inside the network. Um and that's what we uh that's for what we built RLM or something we call rate limiting unifies. So uh RLN is our Z technology uh that uses user shir's uh secret sharing um to uh incentivize people to not spam the network and if they do uh they get punished for it.

um and it's currently the only way to have a proper messaging in a decentralized network.

So uh what does that exactly mean? Uh in RLM uh each user has their own uh key that's running that's on chain in the contract and they have some state tied to it. In a case uh where you start spamming the network, your key gets revealed and people are able to claim your funds off of the contract. Um, and also you're going to incure uh uh you're going to incure social uh punishment because you're going to be on deny lists. Uh you're going to have high future costs and uh so what's happening here?

Let's put in the context of a blockchain network. Uh you instead of sending money, you're sending a cryptographic proof to uh validate your transaction. Right? So this is the first ever appliance of of RLM on a blockchain scale uh and its replacement of protection via economic incentives to cryptographic ones. And for our devs here just quickly um your account when it's making a request to RPC our RPC is al also making a request to our R group which generates this proof which going to uh give you access to send your transaction u and later sequencer is going to do bunch of checks and if the text spam your application gets slashed But if everything is fine, uh, congratulations.

You just made a free transaction on a blockchain, right? Um, but yeah, all the time I'm yapping about DOS protection, right? Um, but gas isn't only for DOSs protection. We know like probably most of the people here, they've entered the industry through mining and mining exists because of gas. So there's also operational fees to actually run the network and that's even more important in in a rollup where most of them are run by uh by companies and nobody has infinite fun.

Um I have something to break to roll off fees are raised to zero. So currently uh currently most chains are not profitable. So um if you look at statistics um and these are not uh net uh net profits. These are like costs of all of these chains. Uh they spend a lot of money to host your uh data to run the provers to run the network and not much is left for you.

Um also lots of blocks u you'll see on this graph here are actually filled with spam. Um just check let me check for example uh where I think like almost 70% of the of the gas is actually used by bots trying to to gain the system um and and also gain the low gases. Um to go into more detail as I mentioned earlier um you see the u uh you'll see so that's the total cost and if you subtract all data logs compute uh network you don't have too much stuff. Um so how what do rollups do? how how are they able to actually pay uh their wages to uh pay for the operations and everything.

So behind the scenes or all of has to pay for these three things they have to pay for data mobility uh meaning uh where they post their data on Ethereum they have to pay settlement fees. So every time they post a probe, they post a blob, uh they run an transaction on the L1, uh they run, they have to pay the execution for the sequencer, the actual computer to run the roll up and in case of ZK rollups, you also have the hard fee which is currently subsidized, which you you won't see, but there's a prover cost and lots of provers are actually very expensive um thing to run. And when you have those when you have those rolloffs also uh charge these additional fees which are not really uh mandatory but that's how they keep afloat. U they charge you fees to um protect themselves from spam protection. So even even if it goes uh to if if gas cost is low to pay some overhead so that you don't actually spam the network um they also actually charge you profit fees uh which is basically money that goes into like net profit for them completely.

Um and in the end you as a user are actually paying overhead gas which you in reality wouldn't have to pay for especially now since uh protoine charting was introduced last year in May and this year in May we had petra and you'll see gas is actually going you know very low so now most of the fees that you're paying are actually overhead the companies need to be able to run themselves. Um, and yeah, you know, like um there's lots of rollups popping up. Um, they mostly optimized for keeping funds in the the company. Uh, and there's most of the time there's not a way for them to silo profit the actual ecosystem. I want to show you this status network.

Um, if you send a transaction, which you can do right now, we have our test running. You can actually set your gas price to be zero. You can send a fully gas free transaction. Um, yeah. Um but yeah u the point of state is also that we're able to keep the network running while keeping us free and also silo these funds into the ecosystem.

But if it's zero what profit are we getting like um there's new there there's other ways for a rollup to to actually be uh getting funds for running it. One is native yield bearing bridge which is a topic you'll actually you can expect to see much more in in the industry in general in the upcoming years. Native app revenue sharing um rollups are also going to be going in the direction of uh forming their own uh ecosystems with unique apps for which you're actually going there and those apps will also be the ones responsible for funding the network. And if somebody wants to um show their the uh the dog in the party like of course they can cash out and they can pay more and get their uh transaction uh validated faster than anybody else. So uh we solve two problems.

So Y RL we solve DOS protection and with in the eBay bridge with a proper app ecosystem. Uh we now we found a way out how to fund it, right? But we still need to manage it somehow. So I want to introduce you to something that we call karma. Uh karma is our native enshrined uh reputation system.

So it's used for gas steing network uh wide cate protection and something we call public funding for allocation. So um just to get back so um we have all these things right. Um you have um you have a way to get your transaction in the network but there still needs to be a way for uh the network to decide if the transaction is not spam is spam and is able to get it. Um, and that's exact exactly through your reputation system. So, uh, the more you use the network, the more you uh do things, the higher your account gets and you're that means that you're actually the user of the network and you're entitled to uh to send more transactions on, right?

like in anything in life on just join you're able to uh just do a few things and as you progress you become more uh committed into the ecosystem you're able to do more you're actually rewarded for it so to give you an example uh we have uh pump here again uh but now sending money he's sending his cryptographic proof uh it that's zero and he has lots of level three. Um, cool. The metric says awesome. Your tier level says you're able to do this transaction. Amazing.

But if he just joined the network and if his uh material was zero, yeah, he just wouldn't be able to do anything. The network would be like, who are you? I don't know you. Uh, you might be a bot. Uh, you're not your transaction is not going to be included.

So, you have now like the prevented bots. You've prevented fake addresses. You pro you have kind of a civil protection. Now, uh I need a help with an experiment. So, please just follow my lead, right?

Thank you. Thank you. So, uh what did we just do? We just uh did some coordination here, right? uh someone took the lead u and everybody else uh followed uh we were able to coordinate properly without too much explanation details uh and such.

So in any system there needs to be a way to coordinate things. Uh here we have something called public uh because a network is not only uh the gas you also need uh ecosystem on top of it which is also able to run sustainably. Public funding pool uh is a place uh which gets percentage of all the uh profits from uh that I mentioned before and uh karma holders or in other words users of the network all of them are able to actually vote where uh where the network should be focusing on so which exact apps uh which liquidity pools and etc. So how how do we acquire karma? Um as I mentioned quickly uh so by just using the network right the more you're using the network that means you're the productive user of the network that means you should be have even more access to it um by providing liquidity.

Why? Uh because your liquidity is the one uh that's also driving new So it makes sense for you also to be able to gain more power in the network. Uh for staking S&T that's that's the token I mentioned earlier. Uh you know like patience gives you powers because uh in this case it also gives you more use to the network. Um yeah thank you.

Um that's pretty much Any questions?

Yeah, I have one from which sources.

Okay. So, we'll be actually the first users of light of E3. uh current in the first stage we'll be uh putting on ET funds to staking

and that's going to be fun in the public funding pool and into

only only I didn't get sorry

okay one source one one revenue source Um or

oh yeah in the first stage yeah for talking about the yield bearing range that yeah on the first stage we're going to be using only light up later will be expanded to other sources rocket pool etc. Um and we'll also we have a plan to also actually put our stable points deal as well.

Yep.

Could you tell more about00 will send one message?

Sure. But you need to get your first karma right on each of those bots. On each of those bots and there's um

and who who can give who can you.

So, um we have multiple ways to get involved, right? So, uh one one way is to simply be a little bit like you put your money that's making uh profit for the network. It's also paying for your gas, right? That's fine. But there's also other ways.

So, this is the first network which you can start using without having any money, right? Uh through app providers, through uh our own. You can connect your uh social ids. You can connect your uh uh proof that we can verify to get you started to give you your first car which get started,

right?

Yeah. and and that's on that's like on part of state center also the uh apps in the ecosystem uh they'll also be able they'll also be getting their part of karma they'll be able to decide who of their which their users can also be part of it right

yasific yourself on the general purpose.

Yeah. So, um we started out as an execution layer for all of these products that we have in our company, right? Um and state is being a messing app. Uh initially our focus was on social and gaming and that's still a strong focus, right? Um but yeah, we are we're also in parallel uh making a strong ecosystem uh in partnership with uh with our funding and you'll see more to come.

So, social gaming and plus that's the use case

one more

y can the apps themselves like sponsor transactions for the users

exactly so so uh that's what what I was mentioning here earlier so uh apps in the ecosystem uh they they're also able to get their allocation account which they're able to uh to give out to to their owners of And the thing with karma I I just sorry to just want to make this comparison. So just to compare it with their account abstraction sponsoring. So here uh you have a uh you have a natively enshrined um uh reputation system. So you as an application don't have to worry about that at all and don't have to think about it. It's on network level, right?

Okay, thank you.

Thank you.