L2 Panel Discussion - Devconnect

All right. Thank you all so much for being here. This panel pulling this off smoothly I think will be high degree of difficulty but I think we can I think we can do it. Um it'll be fun. So I think we can just maybe jump right into things.

On stage today, we have chains representing over 35 billion in TVL, billions in RWAs, billions more in daily DEX volume, serving millions of users, while also onboarding large institutions so they can offer their own customizable and secure block space. Clearly, by many metrics, the rollup ccentric roadmap has been a success. I think we'd also agree the job's not finished and still much to accelerate on in the coming months in order to fully achieve the vision. The theme of today's panel, strengthening the L1 L2 foundation for the next decade of Ethereum and my first question for the group is a two-parter. First part, it's been almost exactly 5 years since the ROCcentric road map was first published by Vitalik.

What continues to give you the strongest conviction that the rollup ccentric roadmap is the correct path for the future of Ethereum? And the second part to the question, a lot has certainly changed over the past 5 years. What if anything needs to be updated around how we think about the rollup road map in 2026 and beyond? Maybe we start all the way down there with you Stephen.

Hey uh great to be here and uh really um fantastic question. If you look at the roll-up centric road map and I've looked back at it actually relatively often it's incredibly accurate like if you actually was a fantastic road map that just really dictated how we behaved as community for the you know past 5 years and many of the things that Vitalic predicted happened happened and happened perfectly. The problem is there are detractors out there that don't like the role of centric roadmap mostly outside of our community and they like to say oh you don't have a road map or they'll point to things and say oh L2s have tokens or L2s have me extraction so this is bad but actually if you go ahead and look at Vitalic's road map he says and I think for very good reason it's great that L2s each have their own he calls it little island so they can all be the king of their island rather than everyone fighting over the same thing it's great that they can have collect me and also have their own tokens so they can fund public goods in a way that Ethereum wouldn't be able to do. So Vitalik makes these points like remarkably so and if you look at the way it played out it's we're really really on point. I think the biggest risk to the road map today is that we look at those detractors and we actually forget that we're you know really really on the mark.

You can disagree with the road map but anyone who's actually intellectually honest reading the road map will see that not only have we followed it we followed it to a team. We've executed excellently. And to the second uh point of your question, the thing that I think changed, I don't think we fully understood at the time why people would want L2s. Right? Back then it was all about a scaling story.

It was really all about, you know, we have to add these generic L2s to add more capacity to Ethereum and it's great for the ecosystem. But if you fast forward to today, there are many players, you know, Robin Hood on Arbitum is a good example that actually want their own chains as a first priority and they say we want our own chains and that's a something I don't think we understood but it's actually extremely helpful and an extension of the road map because it says hey we can have all these people and keep them on Ethereum and we have to remember that we're not fighting L2 versus L1 here. These are, you know, if you look at where like Tempo and Circle are building, they're either going to build their own L1's or they're going to build L2s on Ethereum and we have to work together to get them to build L2s on Ethereum and that is the 2025 success of the roll of centric roadmap.

I didn't think that I will agree with Stephen so fast on on the panel. uh but uh the the the question was what gives me confidence that the road map was correct and the answer is uh we have demand for L2s from the banks we're talking to from the businesses from financial institutions fintex uh big enterprises the the there is a real product market fit that vital anticipated with this visionary post so many years ago uh that now fully materialized especially after the recent shift in in in in the regulatory stance in the US and and around the globe and uh this is happening very fast and the some of these entities who are building the L2s cannot really do anything on on public chains because they need privacy they need certain compliance uh certain rules certain ways to comply with regulations maybe putting data on their own servers maybe doing putting something in on in on the data centers in certain jurisdions And they can do this all now with uh L2s, specialized L2s, private L2s. And I think the the one thing indeed that um has changed since the inception of this road map, it was initially about general purpose chains. And today it's a lot more about specialization and doing things competing to be unique in this space like offering things that are uniquely um meeting the demands of uh of the all all of these various uh stakeholders that are building the chains. It's very clear that Ethereum is on the trajectory to absorb all of the values transactions in the world.

Like everything that touches value in one way or another will come on chain and Ethereum has materialized as the by far the best settlement layer for all of this transactions. But all all of them cannot happen on one chain like physically by by the computational logic and and by the logic of uh business and and regulation everything it's natural that will like if we are talking about millions of transactions per second there have to be thousands of chain at some point.

Okay. So sadly I also agree with what you said so I won't repeat all of it. I think uh what gives me the g biggest confidence is if you just look at the sheer uh number of chains, number of users using them, variety of uh use cases that are served by the different L2s on Ethereum right now that I think is evidence to to the uh correctness of this direction. Uh I think there's like there's a lot of place in the world both for public chains and for app chains and you're always going to have different needs uh for different use cases or for different user bases and for that you don't want everybody to to run just on a single chain. Uh so L2s do that.

Uh app chains do that. I agree with Alex. There are lots of specialization use cases. There are also some other types of cases. But all in all it's pretty much a success.

Yeah.

Yeah. The one thing I'd add I think you know where it's clear where L2s are completely a success is if you look at the economic balance and profit and loss of all the all ones right most of them are making no more than $100 in fees in 24 hours in revenue and their expenditures their economic security budget is enormous it's in the millions so if you just play that over time right today they're subsidizing themselves on tokens right this perpetual subsidy that is going to run out whereas if you look at all the L2s everyone here on this panel right now has a much more better profit and loss statement than those L1s And so just naturally over time you're going to see these economic you know forces kind of play out and I think that's where the rollup sort of centric road map is really benefited because of course you know as an L2 you don't pay the same in terms of economic security and there are other revenue streams that you can generate as well as an L2 because of the connections you can have with your little economic zone. So I think that from an economic sense as well is really clear why L2 is a kind of success.

Yeah, I'd say strategically it feel Can you hear me? Yeah. uh strategically it feels like uh we are doing the right thing the strategy is right I think the opportunity probably for us is around execution and I think that we have turned the ship pretty majorly over the last six months on that um and I think the clarity that the the Ethereum foundation other leaders have driven around scale the L1 scale the L2 simplify the user experience has been um really important there but I think we all also need to kind of like look ourselves in the eyes that like this is day one and if we want Ethereum to be at the center of the global economy that's being built like we need to continue to raise the bar for our execution. I think one of the places where where that probably needs to happen the most is around simplifying the user experience. I feel pretty confident in our track right now uh for L1 scaling and for L2 scaling.

I'm really excited about Fusaka and all the blob capacity that we're doing. But then when it comes to simplifying the user experience, we now have this problem of there's all of these different chains. Um we are kind of in the middle of this EOA to smart wallet transition which I think we we can say hey it was great we shipped 7702 and pectra but then you look at adoption and we basically have migrated no wallets and so I think if we want this kind of rollup ccentric roadmap to actually work what we all need to do is we need to lock in and really make it so that we deliver on the execution over the next few years. Um and I'm excited about the stuff like you know 5792 simplifying the wallet experience. Um, we're about to, I think, migrate a few million wallets from EOAs to smart wallets, uh, which will be, I think, at the first large atscale experience doing that, which I'm sure we'll learn a lot.

And we're already seeing just from these kind of applications that, um, there's work we need to do at, you know, fixing how AA is actually working, enshrining it, um, making it much more cost-effective for users. Uh, and so I just want to make sure, uh, we don't get too lost in the strategy and that we stay focused on the relentless execution. I think it's going to be required in order to win.

Um, just to add very little, I think the thing that gave me confidence is that we stood by our values. Like we didn't compromise the thing that Ethereum actually provides, which is like really robust secure like cryptoconomic security to settle transactions. Um, and we were able to sort of work on scaling without compromising any of that. Um, the things that I I like that I've seen over the last couple months as was said is that we we're keeping to constantly like evaluating we're constantly evaluating our core assumptions and like first principles around like what needs to be done and like reevaluating where we're at and where we want to go. Um, and whether it's scaling, you know, like whether it's um account abstraction, uh, simplifying the UX stuff, L1 stuff.

So yeah, I'm just really excited about all those things and I think like a lot of the things were said so I have more much more to add.

Anything to add?

Hey, so I'm Mark from optimism and so the question is why do we have conviction in the rollup centric road map? So one way to think about it very simple it's just impossible to fit all of the world's users on a single machine. We can look to you know history for example Google they run lots of machines in the cloud to provide their services for users. So I just think it's fundamentally not possible to fit all the world's transactions in a single blockchain. So that's why the role the rollup ccentric road map is good.

We can spin up L2s on top of that and we can send users to all these different L2s that um you know have apps built on them that solve problems for those users.

Do you want to take a stab at the second part? What have we learned over the past five years that we should maybe update?

Oh,

are we all good to go and just keep keep you know?

No, we've learned so much. It has been a very long journey over these last five years. Um yeah, I think one one good thing that we could learn from the from the past five years is um basically the the users have changed a lot. Um originally years ago um it was just this hardcore group of users that would jump through hoops to use apps, but now we're at the point we're starting to bring institutions on chain. We're bringing everyday people on chain.

And I think that um we should kind of go back to the basics and make sure that the roadmap that we set out is actually solving problems for those users. So I would love to see L2B work more with the users in defining the stages uh you know relative to um all of the potential chain operators, the people that want to run chains because if the Ethereum community is basically telling the rollups that they need to go in one direction and the all the possible um you know institutions that want to run chain s are asking for something else. It's creating this like weird sort of energy where we don't really know where to go. So I think that it's really important that we come together and we really align on what the road map should be and execute on it.

Awesome. Second question. One of the most important things for us to improve in my opinion is to better define the roles and responsibilities of L1 versus L2s on Ethereum so we can better lean into the unique capabilities of each. We also need to better define the value exchange between L1 and L2. Many of us here have had conversations around this over the past months.

Maybe we can start off with any general thoughts if anyone wants to jump in. And how do you define the value exchange? Yeah, maybe I can jump in. So, I think for us like we really think it's about kind of putting your money where your mouth is. And that's why when we designed our transaction fee mechanism, we said explicitly we're going to take each transaction on linear and use it to buy back and burn ETH, right?

And this is just a practical reality where like linear would not be a success without Ethereum and without the value of ETH. So we really felt that you know in terms of that value exchange it makes sense that as linear grows we're providing that value directly back. So in terms of this whole like you know alignment or whatever it's less about the I guess the values and more about the practical reality that Linear needs Ethereum and it needs ether to be a highly valuable asset. Um and we're going to help support that in tandem whilst growing Linear mainet. So that's that's kind of how we sit.

I I think we use the word ecosystem to describe what Ethereum is. Uh so I if it's a comparison to a living ecosystem like what's the relationship what's the value exchange between the roots the uh uh the branches of the tree and you know all the other parts it it's hard to to quantify it does not need to be quantified exactly so the way we look at it um is Ethereum provides the incorruptible foundation for this new internet of value that that we're building and the L2s have their specialized um niches kind of offer those are houses that that people build on this foundation and what Ethereum provides tools is I think quite obvious it's the it's the global settlement layer it's the synchronicity and it's the security and sendership resistance that we derive from it like to be an L2 you have to derive your security properties from Ethereum and you have to derive your censorship resistance from Ethereum maybe we're not at stage H2 yet, but we have to arrive there. And um what L2s provide to Ethereum, I think um people can look at it in different ways, but the mere fact that we're going to build an ecosystem that the entire world of value is going to use is already a massive contribution because in that ecosystem, Ether as the asset will play the central role for the store of value. it like ether is the best store of value in this ecosystem. We're better than some bridge Bitcoin and like what else can be you know the the the value of ETH is going to be driven by demand of store of value here more than anything else more than any other economic reality burning fees or whatever.

So we should not even bother about that. And if the price of E goes up, then we'll have enough uh funds to to maintain the public goods and and do all the cool things Ethereum um community is doing. So I'm actually not sure I agree that like defining the roles and responsibilities of layer 1's versus layer 2s is that important. I think it might be interesting to us here, but it seems to me like the much greater challenge is is like we're all building this technology that's trying to revolutionize a lot of things in the world. We're trying to get a lot of usage.

Just you said like this is day one. We're trying to get actual people to use it. We're far from being there right now. I think that's a lot more important than okay, what what delineates exactly the layer one and layer two and what's the exact exchange of value. Now with Starket in the last I think year or so we've spent a lot of time thinking of actually how we bring this wonderful thing which is the world computer to Bitcoin.

So that brings something else into the equation but I I'm I'm a lot more uh uh I I want to spend a lot more try time trying to think how to get more people to use it, how to get Bitcoiners to use this thing, how to get Bitcoin uh involved than than mapping the exchange of value between the different entities there. Sure.

It seems like we might want to do both. How do we build towards a sustainable future? I agree that we don't want to overoptimize for the value exchange and we are still clearly in growth mode, but how do we make sure that we're building towards a sustainable future without having some idea of sort of the role of each L1 versus L2 and

without what? Sorry. How do we build towards sustainable future without understanding what the role is for example of the L1 and for like maybe to be more specific what sorts of financial activity do we want directly on L1?

I'm not sure I have a good answer to that like uh reality will tell. I mean people will eventually use uh different things where it's comfortable for them. Uh I see it's already happening right? So, some of it will move between layer 2s and layer 1. Some of it will move the other way around.

Uh,

I like to use the metaphor of like adding lanes on a highway. And we're at the point where we've added like, I don't know, 100 lanes. I don't know how many we have up here, eight lanes. And I don't think we need to be prescriptive at this point about who goes in what lane. because ultimately we're going to process the entirety of the world's transactions through this highway and we're going to fill up every single lane.

And that's I think the beauty of what we're doing. And there will be differentiation, right? There will be core DeFi activity that makes sense to keep on Ethereum. There will be, like Alex said, there will be specialization that only happens on L2s. You know, I think I guess one controversial take, we don't need more general purpose L2s at this point.

We have a few of them. They're good. We have arbitrum. We have base like really really um good general purpose altos. I don't think uh and others.

Um I don't think

maybe we don't even need those. Maybe we just come back to to layer 1 and put more activity on layer 1 and specialize everything.

I don't think so. I think you need lower cost block space and we've seen for example pers take off on layer twos. Right. There were no pers on ethereum layer 1. That took off on layer 2.

some of the things that you know Jesse's doing in the social space really only took off. It never would have doesn't make sense to tokenize that many things without costs on layer one. So I think there are even in general purpose they have a focus right arbitum is a defi chain and that has a very very specialized focus but to your point this is a fair fair debate but my point is I think if you look towards the world's uh enterprises coming on chain they don't need vanilla general purpose EVM they need something that's very very specialized and that's like sort of the two ends of the spectrum we need good general purpose credibly neutral block space and we need hyper hyper specialized block space and the important thing is if you want to build a specialized blockchain today, you have two choices. You can rebuild the entire stack from the ground up and have to get your own validators and pay them all this money, right? You have 7% in like you take 100% of the transaction fees that come in plus like 7% token inflation.

This is what L1's do just to pay for the security of the chain. Whereas L2 security and maybe this is a bad thing we can talk about this is about 96% of your transaction cost you retain and 4% 4% so like 4 cents of a dollar you pay to Ethereum. Now I think that's probably a little bit too low. I think we should probably be paying Ethereum a little bit more than that. But the idea is if you're looking to build a specialized purpose chain it just makes sense to build a layer 2 and that's that's I think what we should focus on.

How do we uh get the world's specialized chains on Ethereum and give them the security of Ethereum and the convenience even of Ethereum security? Okay. So, I think um one thing that L1 could do is have a product team that talks to the L2s. And this product team could be responsible for understanding the sorts of problems that L2s face when building their platforms. Right?

We had a bunch of chains um you know Circle and Stripe they're the big ones that they ended up launching in all L1 and you know I would definitely prefer for them to launch in the Ethereum ecosystem directly and so how do we learn from this and do some product research to understand what sort of features that L1 could offer to L2s to make L2s the most compelling place to launch a chain because the reality is is that chains are still launching as all L1's. So we can't say that uh you know we've won and L2 is guaranteed to be the best place to launch your chain. But if we you know uh put some work in and really understand what sort of features L2s need, then we can make L2 the best place to launch your chain. And this is something we do by the way in house. We have prism we I work at offchain labs.

We have the prism team building literally you know L1 consensus software for Ethereum and we have um the arbitum team building there too. We try to think about each other's needs. But I totally agree in a broader sense we need to think about you know this interaction and even more so we need to have this clarity. So when someone's when when someone comes to anyone working at say the EF and says hey I want to build a chain it's like okay it's you should build a layer two and you should be on Ethereum rather than there being some like internal battle you should build a layer one this consu customer sees confusion they just say okay I'm going to go build my own chain so I think we I actually think we do need to clarify these roles because we all need to be on the exact same page and we might not agree but we need to come around and realize that if we don't agree we're all going to lose.

Should we move to the next question? I think we are maybe a little short on time. How are we doing? 16 minutes left. Um, what is your take on the current status of interrupt?

How much further do we still need to go? And what are the most important steps we need to take over the coming months to get there? So, anything on interrupt? Feel free to take the question in whatever direction you want to go. I'd be curious, Jesse, what your take is.

Um, I think we have a lot of I think we have a lot of work to do. My mic is not Hello. Test test test. Um I I think we have a lot of work to do on interop. I think it's uh like from a simplify the user experience perspective, it's the place where we probably have the most opportunity.

Um I think that kind of uh upstream of interop I feel like we have to get people into smart accounts or make our existing EOAs smart. That feels to me like a pretty big blocker before we can solve some of the hardest interop challenges and really make the user experience seamless. I also think we need to figure out how we can continue to lower the finality times for rollups. You know, I think Mark's been pushing awesome thinking there around lowering the optimistic timeline from 7 days to one day. Does that make sense?

I think that that's a conversation that's worth having. I think there's a lot of great research being done right now on and just like not research, you know, productionizing of ZK and and TE provers to make it so you can have a faster while still safe stage one um construction. Um, and so yeah, I think like smart accounts, uh, lowering finality and then continuing to push forward some of the open intent stuff that I know folks have been swarming on this week. Um, I I think what we're seeing firsthand from building the base app is that um, there's a huge superpower of having all of these L2s be uh, sufficiently common that you can have the same smart account deployed across all of them. You can have the same transaction submission infrastructure and it all mostly just works.

And so I feel like we're like 80 to 90% of the way there. But as is with any product, the final 10% is the hardest. But I do think that that kind of filling the gap on that final 10% is the opportunity and is a big differentiator for Ethereum and the ecosystem of chains built around Ethereum um versus pretty much every other part of the ecosystem. I I see a mixed picture from from my observations over the last couple of months or or like over like actually a year since we first started conversations about interop there's been significant progress made especially around the standards for addresses crosschain transactions and all of that but it remained a relatively high level and honestly my my impression is like everyone has their own priorities and and kind of like it's hard to really everyone around this idea and and push for this common goal because we're so different. Uh and so for for us at ZK sync interrupts is like our our whole bet is there's going to be thousands hundreds of thousands of chains some of them private some of them public like private we're building we call it previdiums with institutions they really need interop like for us that's the number one priority and we did not see this from the other um part of part parts of the ecosystem so we just uh went ahead and and we prioritized this And what we also realized is interrop heavily depends and is heavily interconnected with the properties of your stack.

So different stacks will require very very different approaches to interop like we could not do a in instant translless inter between optimistic and zk rollups. We cannot do instant interop between different types of ZK rollups today because they use different proof systems and they have different latencies. So what we ended up with we optimized our own stack the zk stack with an loss upgrade to produce blocks within 1 second. So like we have 1 second zk finality. We can generate the proof for a block from the moment you submit a transaction to the moment the the whole block is closed and proven with their bender in one in under one second.

So this enables us to do to build interop which is completely relying on ZK proofs and has no optimistic assumptions, no optimistic finality or economic finality other than the the shared settlement layer where we can be committing the blocks every second. And so we can build it in a very very different way than if we were to think like oh how do we interoperate with optimistic rollups? we have to build all of this additional mechanisms, all of this optimistic ways to to make transactions faster and so on. So we will definitely see this happening probably in Q1 next year. Our interoper will go live and we'll see how this plays out and hopefully there will be more interest and we'll be cooperating more on this front with everyone else.

So uh we will be really happy. So like if you guys want to to talk ZK interop uh reach out we're um

I I think I agree with everything you said that like every protocol is sort of building their own interop but actually if you pop the stack that means we don't have interop right because if arbitum interop looks different than zkync interop then we have a thousand different interop protocols if you ask me modern interop what we need in one word is wallets in two word is smart wallets the idea is you're right there are these like all these different paths you can use intense you can use zk ZK you can use any trust we have we are and trust me I'm a researcher by trade we have all these protocols but you're not going to solve interop on a whiteboard you're not going to solve interrop by building a protocol what you're going to do is you're going to solve interop by having a wallet that understands these 100 different paths and says okay if you want to go from zk sync to zk sync chain I'll do this for you if you want to go to zc and arbit I'll do that for you and by the way we can iterate over time so today we have intentbased solutions I know there's the eils hopefully and the going to be a lot of different upgrades that we can swap out the standard and say okay this is more trustless than before and the user will get the benefit but you can't expect the user to understand all these dependencies because the reality is the users want to use every single one of our chains and they need to just have a wallet that says I will give you the best path between them so I think interop is wallets and that's why we're building zero dev smart wallets to try to and and not on arbitum only for you know all of Ethereum to try to say okay how do we route interop in the best way possible so the details that Alex and I have to understand average user that can't understand that or just doesn't want to won't have to.

Right.

I agree with that. I I think it's um I I a year ago I took over working on Coinbase wallet which is now the base app and in the last year the the single biggest takeaway I have is I don't know how we could have kind of like uh learned as many it would have been impossible to learn all the things that we've learned in the last year without also being responsible for wallet. Like there are so many problems that we are now facing around account abstraction and smart wallets and interop and crosschain execution that we are only able to identify and then only able to think about solving because we're responsible for a fully fully like kind of vertically integrated wallet and chain. I think world has been experiencing the same thing. It sounds like arbitrum seeing something there.

But I do think it it does go back to like customer centricity where it's like you almost need to be in the fire to solve interop. Um, and it's been it's been surprising to me. Um, because at first I was nervous about it, but I think it's turned out to be a real blessing.

DC, do you want to jump in at all?

I mean, on on the intense stuff, not not necessarily, but like on the general account abstraction stuff, I do definitely agree like the the smart smart account. So for all world app um wallets are safe smart accounts powered by account abstraction uh for 337 most of them and it's like 80 of the it's like 90 plus% of the transactions on world chain are smart account transactions. Um so yeah it's definitely like a lot of the things that we have noticed when it comes to like scaling world chain are definitely driven like the decisions we make are driven from the experience of building a wallet. So I definitely agree that that's like something that has been really really important. And for Ethereum, I guess the the best one is like if you issue an asset on Ethereum, it's like much easier for us to work with that than if like someone issues for interop specific things, right?

Like we had a really hard time in the beginning uh getting any liquidity on world chain because the only token that was liquid was pretty much WLD and there's been like a million one ways that we've tried on like how to bridge assets. Um and yeah, it's been great to see like all the different developments around and all these other things. So we have like a standard common interface that we as developers can abstract over to provide the customer experience that users actually want. Yeah.

But you know in a way account abstraction also shows some of the limitations I think of of interrupt and I'm speaking from our perspective like starknet has been like all accounts were account abstraction from day one and like startet's live yesterday was our fourth birthday. So it's like four years we were only with account abstraction. When we started there was no account abstraction anywhere else. So we we went down that route because we thought it was a lot better. But that came at the expense of interop now because now we're different than than EVM and Ethereum and then like the other L2s.

So there's a trade-off there between uh standardizing and uh evangelizing. Mhm. All right. So, looks like we got

I think um one one thing I just want to say is um you know I think interop is a scary word and when we when we all talk about interop what does it actually mean? So maybe one way to frame interop is use any app from any chain. You shouldn't need to go to an extra website to bridge. Like the idea of bridging should just go away. And I think this definitely plays really well into you know, other people on the panel are talking about wallets.

I do think that is a really um key part of solving the interop problem. And I do think that it is possible to get to this point where you can use any app from any chain.

Just looking to see if we have any wallets in the audience. I think we have MetaMask somewhere and a few other wallets are definitely here. So maybe afterwards we can catch up with some wallets and put some pressure on.

Yeah.

Um

we have six minutes left. Let's try to get to two more questions.

How do you define the boundaries of the Ethereum ecosystem? For example, how to think about rollups versus chains that use alta? Uh clearly there's real value in minimizing additional trust assumptions. Why or why not I guess draw a meaningful distinction between rollups and chains that do not use Ethereum DA and how should we get you know L2B obviously plays a key role here but as an ecosystem how should we be thinking about this and and are there things that we've learned over the past 5 years or more recently that should update going forward

we have to be careful um as an ecosystem not to confuse chains that use Ethereum for their data availability which have the most security uh you know that we can get and also chains that use alta. But that doesn't mean there's not a place for both of them. I think a good analogy is, you know, iPhone versus Android, right? iPhone ships one product. You won't find an the Apple, you know, iOS and any other hardware.

Android, uh, you know, you can find it all over the place, but users know the difference between a $1,300 Galaxy, you know, S25 Ultra and a $40 Moto G. And I think it's something very, very similar here. Ethereum is in the Android camp. We're allowed to lend our brand to things that aren't just the most. And by the way, layer 2s are that as well.

There's no question that layer 2 is as secure they are are not exactly the same as Ethereum. They add additional assumptions and Ethereum is lending its brand to a much wider uh set of things and that's going to accomplish something very special and it will have you know the Android influence if you will and actually have give benefits to all of those but we have to make sure that users don't confuse those because then you'll get to a point where users just say oh I'll just use the cheapest chain they don't understand that actually some things should be on a a very secure chain. So I think we don't don't need we we need to support it all and we can support it all but we need to make sure that we don't lose that distinction.

Yeah, I kind of agree. I think you know you we're talking to some of the biggest institutions in the world about coming to Ethereum and they literally can't use the DA today. So in that game like they have two options right either they you know come as an L2 and they use an alternative DA or they're going to have to do something completely different outside of Ethereum. So I think when we're talking about making sure Ethereum is successful then if they're using an DA it's totally fine with the sort of uh the mission to make sure that it's landing on Ethereum like in terms of the settlement. So them having a a validating bridge to L1 but posting their DA whether it's on you know IGEN layer or some other sort of you know Postgress I think is like less important right now.

It's about making sure that they land somewhere in the Ethereum ecosystem rather than some of our competitive L1's.

So what is the Ethereum ecosystem? I think that any project or product that drives value to ETH is considered part of the Ethereum ecosystem. And the reason why I use this definition is that there is an objective measure that we can all look at and agree. Otherwise, we'll just all argue past each other and it'll be impossible to agree on what Ethereum is. Right.

Right. So like if you consume an Ethereum resource whether block space or execution space or or even storage like blob space and other things then you're part of the Ethereum ecosystem because you value

if you're you know pay if you're buying you know resources from Ethereum and burning that ETH that makes sense

or if you're you know having your users um hold ETH to be able to transact on your chain to use as gas definitely part of the Ethereum ecosystem. Where would you put an EVM chain that is contributing significant research and other contributions but is not necessarily directly driving value to ETH

not Ethereum?

Yeah, agree.

Yeah, like a fork of like a different flavor of Linux

be like technical contributions but not part of Ethereum ecosystem, right? like I can also use Linux and fork it and do whatever and not contribute to Linux. I don't do my own thing and but still contributing maybe like some security vulnerabilities. I feel like it's it's like sort of like tangential to it and all this but there's lots of ways to drive value to ETH the asset. So even if uh you don't use ETH as um the gas paying asset in your chain, there's other ways you can still drive value to it.

All right. Uh, last question then for the group. What do you see as the biggest challenge to Ethereum succeeding in providing real, unique, sustainable value to billions of people across the world over the coming years? It's a big question to end with infighting. If we can't agree on a on a on a mission and a road map and something that we could put out to the world ourselves, there's absolutely no way that anyone else in the world will be able to say, "Okay, this is the ecosystem we need to be in."

That's the one thing that our competitors have. And it's a factor of centralization, by the way. The fact that we have represented on the stage here seven different companies with seven different viewpoints. And trust me, a lot of us argue and disagree about a lot of things. That's the superpower of Ethereum.

But it also makes it very difficult for us often to put a unified front out to the world. If you go talk to Salana, there's one company that you can talk to and there's one person setting the vision. And that's extremely powerful when it comes to actually selling. So I think we have the the superpower, but we need to get over that and make sure that we can actually, you know, get over our differences when we get outside, realize we're all part of the same family and put on a unifi unified front in the world and celebrate each other's successes. So if someone builds on ZK sync, fantastic.

They're still in Ethereum. I'm still happy.

I I'll add one more word. Complacency.

Yeah.

Like we have not won yet. Ethereum is by far the best ecosystem in the world for the global digital economy, but we have a window of time to actually make it happen. And and it's it can close and and we might face more obstacles down the line. and we need to move really fast.

Yeah, the time is now.

I I don't think the enemy is Salana. I mean, I think the main problem which is both ours and theirs I think in a way is that to this date we have not found or built enough I don't know apps or use cases that provide a lot of value that billions of people want to use and and and are willing to pay for. Uh, and that's a problem with the entire uh uh industry of blockchain. I think it's not Ethereum specifically. Ethereum's probably done a better job than most, but it's still far I think we're very far from actually doing that.

So, I think that's the main challenge. Uh, and by the way, I think the fact that they have a single person deciding that's is both benefit and a disadvantage, right? I think the fact that we are here, we have more diversity and more v variety is is both bad and good. it it could actually end up in in in more things being built. But we're very far from there yet.

I

think long term it's good, but if you can actually harness it correctly, but certainly there's a hurdle to get over and before you get over that hurdle, having one unified vision is definitely easier. Yeah.

Yeah. I I kind of agree with Alex. I think you know right now there these corporations making decisions about where to put their businesses on chain and they're deciding between Ethereum L2 and other options, right? And ultimately the outcome of that decision is going to have a huge impact on the success of Ethereum and Ether because you know again if through complacency or through perhaps lack of like unified vision they do decide somewhere elsewhere. You know our industry right now is incredibly small right the whole entire crypto market cap is $4 trillion.

This is like insignificant compared to the total addressable market. And I think again if we don't realize that now and actually make sure they land in the place where it benefits everyone here in this room at least in terms of the vision that we all somewhat share maybe ambiguously then I think that's the real key key thing to get right.

Um I think the biggest challenge and opportunity is going to be moving up the stack and figuring out how we can build products that people actually want to use and figure out how we can get those hands those products in the hands of billions of people. There's other products that billions of people use and we don't have it yet. And if we don't build those products, then it's not going to happen on Ethereum. And so I think it we can we have done an incredible job building an infrastructural foundation. I think there's more urgency that we need to drive.

There's absolutely camaraderie and winning together that we need to drive and it has to manifest in products that everyday people love using otherwise we're not going to win.

Yeah, 100%. Like I definitely agree with with what Jesse says. I think we have like very similar frames from like the products that we're building. Um yeah, essentially like reverse engineer from like what what people want to see and like what people want to use. Um either we build them ourselves or we bring existing applications or institutions that already have the billions of users.

Um so for example like we're trying to partner with like Tinder, Razer, like gaming, dating, social applications which have like billion plus user verticals and bring those on chain. Uh I feel like those are sort of like ones of the ones that are cool. So yeah, it's just essentially essentially that right like actually onboarding people and then you have economic sustainability from that.

I think a giant risk is that we are not paranoid enough. The competition is extremely intense and it's just getting more and more intense. And you know we're at this point where crypto is legal now. people are starting to use it and we cannot become complacent and just think that we won. Um, I think everybody needs to be trying apps and using them and using that to drive what they're building.

It's really difficult to build products that people love unless you are using the apps and knowing what's going on. So, I think as a whole, um, the Ethereum community needs to be more paranoid about losing.

All right, thank you guys so much.

Thank you for having us.

Cheers.

We have a small Q&A from the audience if you guys are willing to do it. Um, we have a slight Q&A with the audience. If you guys are willing to do it for like four or five minutes, we can do quick quick answers. Um, if you guys want to take a quick seat. Um, sorry about that.

Also, it was nice to hear the music playing. It's like while Mark was speaking. Um, awesome. So, we have a ton of questions. I think since we don't have much time, maybe like one or two sentences answers.

Uh, we can just go around table, I guess, starting with Stephen and going all the way to Mark. Um, Josh as well if you want to chime in. The first one, uh, what's your privacy roadmap? Um we are very much investing in building private chains. If you actually look at the initial arbitrum paper it was as much a privacy solution as a scaling solution.

Uh the world wasn't ready for that now but with enterprise coming on chain people want privacy and we're going to meet the moment.

Awesome. We have privacy chains in production such as the chain by Deutsche Bank and we have others coming uh probably by the end of the year we'll have a few launches of previdiums with institutional privacy. So the the core of what we do started with zero knowledge proofs. Uh that's how we got the ZK rollups and we focus mainly on scalability but it's a an excellent fit for privacy. Uh and we're definitely working on it.

I can't get disclosed what exactly but it's in the works.

Yeah. So before we built Linear, we actually built what I called a partially anonymous ZK rollup. This is back in 2022. So we're sort of ready to kind of pick that off the shelf and like put it back in production. I think for linear mainet specifically, it's about again I think someone mentioned earlier about user experience.

So having a great partnership with the wallet and showing privacy in that way is going to be real key for us.

Uh we acquired the ironfish team in the beginning of this year. We're going to add privacy natively to base.

Um for us we mostly use privacy on the identity side. So we're working a lot on client side proving essentially making proofs accessible on mobile devices because that's sort of like if you want privacy you need to give privacy at the level of the where the user is at which in our case is mobile phones and uh we're heavily investing into that as well as multi-party computation and we're really excited about sort of privacy solutions that also like have private state but also like have better livess assumptions that's just like purely one person keep state on their own. Yeah. The first step is to teach potential customers why privacy solves their problems and learn um what sort of problems they face and then help bring them on chain and integrate them into apps that solve their privacy problems.

Awesome. I mean it's such a large problem for the world and to hear all the leaders of the leading alt ecosystems talk about in this way it's incredible and I'm sure the community is very happy. We had a lot of updot um up votes on that one. Um okay, another one. It's slightly spicier.

So this I we don't have much time so this is the only one. Um why are people opting to go for L1's like hyperlquid tempo etc instead of launching L2s in your guys' opinion? Like what what do you think is missing? Is it a perception issue? Like is it a technical thing?

Where where do you where do you lie? We can go the other side perhaps from Mark um onwards.

Yeah. So, um, one thing that we're hearing is around finality. Um, potential chain customers, they want really fast finality. Um, they're also sometimes scared to hold ETH because it's so volatile. They want to use a different asset that they're more familiar with.

Um, yeah, those are two major things.

Yeah. Same literally same answer. Yeah. Yeah, I'd say like even on L2, a lot of the corporations I've spoken to, they don't even want exposure to ETH. Like I think all these L2s like getting ETH exported to them is like not correct.

Um I think there will be some that have the ETH, but I think it's more the finality point than the ETH from what I see.

So I don't think it's a single reason. I'll just add one more. I think some just want full control of of everything that they do. They don't want to rely on any other ecosystem. And I think the market incentives also play a role and once people uh so like the so-called L1 premium might be learned but once they actually start paying the validators um pay off payouts it it's going to show a different picture

fod concerted marketing campaigns against L2s and the decision makers literally don't understand uh the differences but they're told by someone else that has something to sell that L1's are better and if you just look at the core economics. They're not they're extremely expensive and they're a lot less performant, a lot less secure, but they just don't understand that.

Yeah.

Yep. Awesome. Phil, thank you all for your answers. Thank you all for this panel. Thank you all for stewarding Ethereum, uh, pushing it forward, testing it, making it harder, better, stronger, faster for us all.

Thanks. Thank you all.