ETH 2.0 AMA with Danny Ryan

🚀 SUBSCRIBE TO NEWSLETTER: http://bankless.substack.com/ ✊ STARTING GUIDE BANKLESS: https://bit.ly/37Q17uI ❤️ JOIN PRIVATE DISCORD: https://bit.ly/2UVI10O 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ 👕 BUY BANKLESS TEE: https://merch.banklesshq.com/ ----- GO BANKLESS WITH THESE SPONSOR TOOLS: 🌐 UNSTOPPABLE DOMAINS - HUMAN READABLE ETHEREUM & CRYPTO ADDRESSES https://bankless.cc/unstoppable 🌈 ZAPPER - ULTIMATE HUB FOR DEFI - ZAP INTO DEFI http://bankless.cc/zapper 💳 MONOLITH - GET THE HOLY GRAIL OF BANKLESS VISA CARDS https://bankless.cc/monolith 🤖YEARN - YIELD-SEEKING MONEY ROBOT THAT FARMS DEFI FOR YOU http://bankless.cc/yearn ------ ETH 2.0 AMA with Danny Ryan Danny Ryan is a researcher at the EF and is one of the lead coordinators behind the ETH 2. movement! Listen to Danny's talk at ETH Online! https://www.youtube.com/watch?v=wEh4u5a-43o&t=1539s https://www.youtube.com/watch?v=wEh4u5a-43o&t=1539s Check out ETH Online! https://ethglobal.online/#schedule ------ Don't stop at the video! Subscribe to the Bankless newsletter program http://bankless.substack.com/ Visit the official Bankless website for resources http://banklesshq.com/ Follow Bankless on Twitter https://twitter.com/BanklessHQ Follow Ryan on Twitter https://twitter.com/ryansadams Follow David on Twitter https://twitter.com/TrustlessState Follow DeFi Dad on Twitter https://twitter.com/DeFi_Dad ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time we may add links in this channel to products we use. We may receive commission if you make a purchase through one of these links. We'll always disclose when this is the case.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00David Hoffman?

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• 18:34David Hoffman?

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• 19:18David Hoffman?

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• 20:04David Hoffman?

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• 20:46David Hoffman?

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• 20:57Ryan Sean Adams?

  All right. Welcome Bankless Nation to another AMA. This is an Ask Me Anything. We've got Danny Ryan here, whom we're going to introduce in a second. Quick logistics. Here's how this works. You can view live on YouTube. It's broadcasting now. You can ask your questions on YouTube. If you're a Bankless member, you get prioritized questions in the Bankless Discord. So make sure you start pumping your questions for Danny. We're going to be talking about ETH 2. We're going to try to wrap this up in about an hour and I will interrupt at various points and let you know how much time remaining we have. This is a super important Ask Me Anything because of the timing. ETH 2 is coming. It really is, despite what these.

• 21:40Ryan Sean Adams?

  On Twitter, we just had Vitalik on the podcast to talk about the why of Ethereum. Now we want to do this Ask Me Anything with Danny Ryan to talk about the what, the how, maybe even the when, we'll see. Without further ado, I want to introduce you to Danny Ryan, who is an ETH2 researcher, a coordinator of clients, a herder of cats. He is the guy to ask about ETH2 progress. Danny, how you doing, man?

• 22:05Speaker 02

  Great. Thanks for having me. Excited to be here.

• 22:08Ryan Sean Adams?

  Okay, let's, let's start here. You know, we get dipped on the first question. On a scale of one to 10, how excited are you about ETH2 right now? One to 10?

• 22:18Speaker 02

  I mean, definitely so. I've been working on this for years. I can't believe that is true, but even before ETH2 kind of took its current form, which it's been in that form for over a couple of years, I was working on proof of stake stuff in a different form. And so I am anxious and excited to get this thing out. I actually want to, I want to tell you a little, a little story. So in Japan, they have these things called Darumas and these little dolls and you draw in one eye and you essentially you make a wish or you make like a goal. And then when you're completed, you, you color in the other eye. And it's like a, it's a blind Buddha that like achieves enlightenment or something. And so I have this little white one, little white Daruma,

• 23:04Speaker 02

  and I colored in one eye in the beginning of 2018 because I was like, I'm going to ship Casper, like we're going to ship it this year. It's a white Daruma. It's like a little ghost. And this thing, it usually sits right there, but it's not there right now. It, it haunts me, right? It sits there and it looks to me as one eye. And I had to shift it when we shifted to ETH2 and Sharding and everything combined. And so I'm, I'm very excited to take this little Daruma and give it its final little eye. And then you burn it. So that's going to be fun, too.

• 23:35Ryan Sean Adams?

  Fully formed. And that will achieve enlightenment is what you're saying? Is that for yourself or is that for all Ethereum's?

• 23:40Speaker 02

  Yeah, anyone can share in the enlightenment.

• 23:43Ryan Sean Adams?

  I will gladly share.

• 23:46David Hoffman?

  Danny, you had a really fantastic talk at the ETH Online Summit not too long ago, where you talked about how the whole ETH1 into ETH2 transition migration is a misnomer. And I thought that was a really fantastic perspective that I wished more people had. So I kind of want to give you the opportunity to kind of pitch to us, why is it not a transition? Why is it not a migration? And what is it really? And how should we really think about this thing?

• 24:13Speaker 02

  Right. So check out this talk. It gets a little, it's like not incredibly technical, but like gets into more of the structures of these things. But we talk about this thing called ETH1. We talk about this thing called ETH2 all the time. And what we think of as ETH1 is like Ethereum as is today. And what we think of as ETH2 is like this thing that we're trying to build, which has proof of stake and charting and scalability, all this fun stuff. And I claim that we made a mistake in the naming and that it's a misnomer. And it implies this like sequentiality of the systems, meaning like, you know, we're going from Windows 98 to Windows 2000. It's like this whole new thing. Or we're going from like a car or a bike to a car or a car to an airplane.

• 24:55Speaker 02

  Whereas it really, it's a more, it's more, we're talking about layers of the system. So what, when we think about ETH1, all of the like complexity, like you have this little, this tiny little proof of work thing. It's like from a software perspective, relatively simple. All the complexity of ETH1, all of the hard work that's gone in for the past five years to iterate and upgrade and make this thing like what it is, is in this like, what I call the user layer. It's in execution, it's in transaction management, it's in state, it's in state sync. And all these things that like make the user layer of Ethereum awesome. And, and also a lot of things that make Ethereum hard. Where this proof of work module is just kind of stayed stable. What ETH2 is, is really taking this like tiny little proof of work thing

• 25:39Speaker 02

  that's like the brain of the system and saying, can we reimagine? Can we redesign the brain of the system to be more secure, more decentralized and more scalable? And that's what, you know, when we're talking about the ETH2 project, it's really, we want to replace the brains of the system with something More sophisticated rather than replacing like the guts of the system like it's still the same system. And so what we consider ETH1, that state, that that user layer is to exist kind of with this new brain, what we call E2. And so there's probably some better terms to use there. Maybe we'll just call it Serenity, the upgrade of Ethereum's core consensus. As it probably should have been called the entire time, but so that's this little bit of that. Check out the talk.

• 26:22Speaker 02

  It's something that's important to me because it makes it hard to communicate about these things if we can't talk about them. And so check it out. Maybe we can all begin to talk about the separation of layers in a more organized way.

• 26:38David Hoffman?

  So just to kind of summarize that and make sure I'm on the same page. With Ethereum, there is the stuff that we do, right? The DeFi, yield farming, Uniswap, anything that's a contract, right? Tokens, transfers, that's the stuff that we do. And then there's the infrastructure that supports that, right? And so the stuff that we do isn't changing. That's going, that's coming along with almost no changes. It's the how, how the machine of Ethereum comes to consensus around the stuff that we do. That is being like swapped out. And so the way I've explained this to a friend of mine is kind of like the Indiana Jones. The like taking the idol and the sandbag and swapping the sandbag on for the golden idol.

• 27:22David Hoffman?

  And then at the same time, is that an accurate like illustration or maybe is that, did that lose some nuance?

• 27:28Speaker 02

  That's probably reasonable. I'll give you, I'll give you two others that like I think are kind of reasonable as well. Joe Lubin actually said this in a talk. I don't, there's been like this, this whole COVID online thing is like all blur. So I have no idea what it was or when it was, but Joe Lubin was in some sort of like online thing. Said it's, it's like, and I actually, I think mistakenly used this analogy earlier, but.

• 27:54Speaker 02

  It's like a modern operating system. You upgrade your modern operating system. What happens? Usually, if you choose to, like, it feels very similar. Like, you brought your files, you brought your programs, you brought everything, and it like, it generally works. But maybe you have like some upgraded hardware, maybe you have some better security features, and maybe you can like, if you're a developer, you can like, get in and do some like, new cool things. And maybe you have a bigger hard drive, but you're still working on what seems like the same computer. Your keyboard might click louder because you're into that. But, you know, so that's, that's one way you can think about it is like, the user layer, your user experience can be very similar, but if you choose to, it can be enhanced over time.

• 28:33Speaker 02

  And then another one is, and I don't love this, but it's because it's like weird like war analogy, but imagine like Ethereum is like some fighter pilot plane thing, jet, a jet. Flying around, it's doing awesome stuff. And then like what we're doing is like essentially preparing the aircraft carrier and it lands and like now we have like a bunch of other jets that are like all managed under the same system. Both of those kind of suck, but you know, different ways to think about it. I'm still, I'm still working on the memes and the analogies, but maybe.

• 29:06Ryan Sean Adams?

  Yeah, well, fantastic. Yeah. And we'll add the Indiana Jones one to the roster there, David. Nice one there. All right. So can we talk for a minute? Because I think this is a huge question in the Ethereum and in the bankless community about the state of the test nets. So for people who have not caught up, right? I guess maybe zooming out, what we're talking about, then the next thing that's coming is Eve two or Serenity. Phase zero, right? And then we've had this series of test nets to get to a main net phase zero. Can you talk about, I guess, phase zero and the, the feature set of it?

• 29:47Ryan Sean Adams?

  And then the state of the most recent test nets that have happened and kind of where we are now.

• 29:52Speaker 02

  Right. So what we're doing right now is we're bootstrapping the new consensus for Ethereum. We're bootstrapping this for stake consensus and that that's called phase zero. To be honest, like I think these the terms, these phases are like nice for technical discussions, but I don't think they're incredibly meaningful for the community. So I'm even just trying to talk about them differently. So what we're doing at the end of this year is we are bootstrapping the new consensus mechanism. Ethereum I don't is like a $50 billion blockchain. I don't know, depends on the day, depends on the hour, depends on the minute. But high value, a lot of activity, a lot going on. And it has, it has this like this proof of work brain.

• 30:36Speaker 02

  It's relatively simple and it works. So the, to do this in a sane and conservative fashion, the consensus, the new consensus mechanism, which will ultimately drive Ethereum in the future, is to be bootstrapped in parallel. So essentially, we're not going to disrupt this thing that we call ETH1, the current Ethereum chain. Instead, we're going to allow people to stake and move real economic value into this parallel system, which is that proof of stake mechanism, which is called the beacon chain, which is to be the brains of Ethereum in the future and to bootstrap it in production, unaffecteding the initial system to kind of get everything right, to get stability,

• 31:21Speaker 02

  to get the software in in production, to test the economics in in real world conditions, et cetera, et cetera. And so that's what we're doing at the end of the year is a bootstrapping phase for the new consensus mechanism. If you're doing like the operating system analysis, we're like, you know, putting the operating system in in beta and letting people test it. And like they're getting early rewards for, I don't know, that's not, that's not a good idea, but.

• 31:46Speaker 02

  So bootstrapping phase, that's like, we're doing this in production, we're putting proof of stake in production to bootstrap it to then take control of Ethereum in the future. We throughout this year, and to a certain extent, last year on single clients have been iterating on test nets.

• 32:05Speaker 02

  I don't know how many there have been, there have probably been like three or four public multi-client test nets. I might say multi-client because there are many implementations of this protocol, which y'all are probably all aware of.

• 32:17Speaker 02

  So we have Medasha, Medaya, Medala, whatever you want to call it, it is a test net. It has about 100,000 validators, each validator is a 32th instance, and there's more than 1,000 nodes, this kind of abstraction between validators and nodes, we can get into that later if you're interested. But about 1,000 nodes on this network, it is community-driven and community-controlled, meaning like the EF and client teams control probably less than 5% of the stake on this thing. And so it's broadly run by the community. It is not an incentivized test net, meaning that the incentive to be on it is, there's no additional

• 32:59Speaker 02

  monetary incentive, the incentive to be on it is to test out your software and kind of like, show that this thing works and get your system hardened and security and just kind of understand things before you move to mainnet.

• 33:14Speaker 02

  There's been some awesome things that have happened in Medasha, you know, some initial stability, some craziness in terms of instabilities and some bugs and hardening that happened. And then a long stretch of stability. Recently, we've seen about 50% of stake leave. I think a lot of people are at the point where like, I'm ready for mainnet. I don't really, you know, if I'm running on a cloud box, like I don't really feel like paying for it. If I have it at home, like, you know, screw it, I unplugged it from the wall, I don't, I don't know all the motives there, but plenty of people have turned their nodes off. So Medasha is actually in this, this time of no finality, you need two-thirds on the network to finalize. And so It's in this like somewhat stressful state where the chain's being still being built,

• 33:59Speaker 02

  but things aren't being finalized. And so you can't like aggressively as prune and things like that. So what we're experiencing with Madasha is like actually what I would love to see, which is like one of the more stressful environments, you know, 100,000 validator test net in a pretty stressful environment. And we're seeing some awesome PRs and releases. If you follow the client development, you know, on better pruning strategies in this this time of finality, it's highlighted, you know, a couple of, I think, I noticed on on Lighthouse, Proto and I were looking at something and noticed that like the attestation pool was like, you know, had 400,000 attestations in it, which doesn't make any sense. But, you know, which is could lead to memory spikes and stuff.

• 34:41Speaker 02

  So point being is Madasha still exists. Madasha is in this like very stressful state and gives us a chance to harden clients and things before we go to mainnet. Additionally, we've had these like test net dress rehearsals recently, which is one of the one of the more difficult parts of this process is really like that initial bootstrapping. It's the making the genesis deposits and kind of coordinating all the clients at the same time to kick off genesis. And so we've had a couple of these like test net dress rehearsals. The last one went really well. And so we're kind of in the final preparations for mainnet because of these positive signals from test nets and at the same time tying up various loose ends, which we can get into.

• 35:26Speaker 02

  That's the status that I don't know. Is that that cover the test nets?

• 35:31David Hoffman?

  No, that's fantastic. And one of the things you mentioned is how these test nets are not incentivized. When we call like Bitcoin and Ethereum, we call these things like crypto economic systems, or at least that's what Vitalik calls them. That's really the only name that I can really think of that really. Gets on to what these things are crypto economic systems. But right now, what these test nets are, are just crypto systems because they don't have the economics built into it. So with to the best of your ability, Danny, can you kind of tell us what how? How have things gone differently because of the lack of incentivization? And maybe how do you expect things to change when phase zero rolls out, which is like quote unquote, an incentivized test net? That is fully crypto economic.

• 36:13Speaker 02

  There's a few things going on here. So one, like first and foremost, you bootstrap it off of Gorley instead of Mayan at ETH. If you ask a Gorley whale, they'll give you, you know, 10,000 ETH, no problem. And so the ability to kind of come in and largely affect these systems to like be a large player in the in the test net is pretty easy. And because of that, people that don't necessarily like, I don't have much care other than like my personal want to understand and participate in the system. So like, keep the value that I participated in running smoothly. So that's, that's definitely one of the differences. Another differences that we've seen and why we did a couple of these testnet dress rehearsals is that.

• 36:59Speaker 02

  Like in Madasha, we had initial instability during the first like 40 epochs or something and epochs like six and a half minutes. And primarily, the reason was that some people that chose to be whales in this test net didn't turn their nodes on, right?

• 37:17Speaker 02

  I won't say, I won't, I won't name names, but you know, somebody that was like 10% stake was like, oh shit, I thought Genesis was an hour later. And like, that can happen to mainnet, but like, I think you're probably going to check, double check, triple check.

• 37:30David Hoffman?

  It costs you money.

• 37:31Speaker 02

  Time. Also, like.

• 37:34Speaker 02

  You can turn your node on two days before Genesis. I don't know why your node wasn't on, you know? So anyway, so that kind of stuff happens. And that's why we did a couple of the dress rehearsals to really like get, get a good genesis going. And then otherwise, like.

• 37:51Speaker 02

  If I'm running on a mainnet node, I have real money at stake. And not only can I make money, but I can lose money. And so if I don't have my validator and have my node running optimally, connected to the internet, you know, if a bug arises in my client, I'm going to like dig in and like figure out, is there a new release? Should I switch clients? Like, I'm going to be making, I'm going to be pressured due to the, the loss of capital and my lack of ability to gain capital to, to fix things. And so what we've seen is, I mean, sometimes there are client errors. There are fewer and fewer, but you know, if 10% of the network goes off because of client error, people are like slow to fix it.

• 38:32Speaker 02

  And when people don't want to participate anymore, a lot of people are just like turning their machines off, which if I were a mainnet, I wouldn't do, I would exit. Right? Like if I'm like sick of this, like this is not for me, I'm going to exit. And I'm going to take myself out of participation. And so we see a lot of not quite rational activity, if this stuff actually had value. And that's one of the reasons to go to mainnet and to bootstrap this thing with real production value is to like, see how the economics work in production.

• 39:04Ryan Sean Adams?

  So do you think when this is deployed to mainnet, Danny, some, some people have called this like an incentivized testnet almost because, you know, there still could be some issues post-mainnet. Do you, do you agree with that lens?

• 39:16Speaker 02

  So I understand that framing, that's not really my framing. I think the major difference is between an incentivized testnet and what we're doing is that the intent of going to mainnet here is that it is continuously, although it will be upgraded and change in form, that chain does become mainnet, that chain does become the history. Whereas an incentivized testnet, I would say, has no intention to ultimately morph into what mainnet is. And so it is, it is early, there's a little bit less, there's real capital at stake. There's less at stake as in there's probably less surface area to attack at the beginning and maybe be less incentive for an attacker to come in.

• 40:00Speaker 02

  And so it does allow us to have training wheels on to a certain extent. Transfers aren't enabled at the beginning, which like in the event of catastrophe would allow us, would allow the community to make maybe hard decisions on, on reverts and things like that. But So they're, you know, training, it's like training wheels main net rather than incentivized testnet. In my opinion, I know that others call it incentivized testnet. I think there's validity to that claim, but I think there's definitely a difference between a main net, you know, an early main net that's going to evolve into the full thing versus like a testnet that like is incentivized and ultimately won't turn into the the main net.

• 40:38Ryan Sean Adams?

  Yeah, I got it. All right. So we so we went through all the testnets. I think the big question on everyone's mind is what's next? What's left to do here?

• 40:47Speaker 02

  Correct. I mean, plain and simple, the the main thing to do is to release the version one with specs. The community to choose a deposit contract, main net canonical address and a genesis date. There are a couple of reasons that myself and client teams have not done that final release of specs that would include what we would call a canonical address and date. And the primary being, and I haven't talked about this yet, I've been meaning to put it down in paper in a blog post. I've also just kind of been monitoring the situation, but the primary being there's this crypto library. It's called BLST, Blast.

• 41:32Speaker 02

  It's built by Supernatural. It was created actually this year and it is a highly optimized BLS crypto library. And it's awesome, you know, like 2X gains on the fastest thing and it's actually easier to read and reason about. And there's like ongoing formal verification of it. This library is critical to creating keys, signing messages, and critical in early phases in that if you use this library to generate your keys, they need to be secure. If they use it to generate your wallets, they need to have like tightened, good randomness and stuff. And if you're actually signing your deposits, which has a signature associated with it, it needs to be correct. And so this library is currently under audit.

• 42:18Speaker 02

  It is also under ongoing formal verification, which has some initial results. That's that's probably not going to be ready until Q1. But it is under security audit with NCC. It's about two weeks in and we have another about two weeks of this audit to go. Given that how critical this library is and given that if there is a fundamental error in this library, we could really fuck some shit up in terms of Genesis deposits. That is the blocker. There are a number of other things going on. Clearly, clients are clients are hardening, clients are tying up loose ends. There's been a lot of like active engagement on Madasha with some of the things that users are seeing in terms

• 43:00Speaker 02

  of resource consumption and stuff. So that's ongoing. There are some ongoing client audits and things. And there are some loose ends being tied up around like user experience on the launchpad and other various tooling around deposits. But those things are all going to happen and are happening kind of in parallel. But the the big blocker on kind of finalizing the last little bits is this audit.

• 43:26David Hoffman?

  So Danny, there's a few questions with regards to the canonical deposit address. How how do you foresee people figuring out which one is the canonical address? And why why don't we just have a clear and cut answer as this is the address?

• 43:41Speaker 02

  Um, I mean, for one, who can dictate such a thing? This is likely going to be signaled from many different angles from from the community kind of all at once. I think that client teams EF, large community entities that have stakeholders in the community are planning on kind of coalescing on a single deposit contract and signaling that all at once to one, kind of solidify like the community has chosen this, but two, to also publish this information simultaneously, kind of

• 44:24Speaker 02

  all over the web and it can't simultaneously a campaign that says trip check, double check, triple check this before you send any any any money to it. Because at the end of the day, the bootstrapping of the Serenity, the ETH2 consensus beacon chain, it happens with no changes to ETH1. And so this bootstrapping mechanism, like the gateway to enter into this consensus mechanism is a contract on ETH1. And so

• 44:53Speaker 02

  I can deploy the bytecode, you can deploy the bytecode, anyone can deploy the bytecode. We can verify that all of these are like the bytecode that we all intended to use. But if we don't all choose the same one, you know, there could be issues with loss of funds and other things. And I think maybe even more concerningly, I can take that bytecode and modify it and maybe put some sort of secret withdrawals in there. Obviously, if you're verifying the bytecode, you couldn't create like a phishing contract, but you could create like a contract people are just wasting money. But I'm definitely like, we're all kind of concerned about phishing. And, and so we, we do want to make sure that there's like a, a good community push to kind of like coalesce very clearly on this. You know, I, I think this information will end up in that EIP that I wrote up, wrote up.

• 45:38Speaker 02

  It'll end up in the V1.0 specs on the spec repo. It'll end up in many blog posts. Hopefully like block explorers and different things will also all be kind of publishing and, and giving names and, and access to this information.

• 45:52David Hoffman?

  I think that's, that's pretty interesting that for just a brief moment Ethereum really is emphasized by the social layer rather than the code layer when it comes to like determining which is the quote unquote real deposit contract. I think that's a pretty, pretty interesting feature.

• 46:10Speaker 02

  And we, you know, anytime there's a hard fork, it, it's not, there's maybe not a lot of risk in those. But like that, that's a point in which the social layer Ethereum goes, yes, we're doing this, right? And like, if it's adding like a BLS precompile and it's adding, you know, it's fixing gas pricing. That's not like, the social layer doesn't have to like signal super strong. But this because it's, it's, it's not a hard fork, right? It's a deployment of a code and, and, and pointing to a, a code in this layer. So there's a little bit more opportunity for confusion and, and other strange issues that might arise there.

• 46:47Ryan Sean Adams?

  So the BLS blocker may be news to some folks who are listening to this and watching to this, watching this. And but let's take kind of the happy path. So audits done in like two weeks. Bison Trails, who's a staking company in the space, they're, you know, like doing stuff with ETH 2. They wrote a post that said, "We expect the deposit smart contract and more exact dates to be released sometime in the next two weeks." They they put this post out this week. "We still expect for mainnet to launch in mid to late November."

• 47:20Ryan Sean Adams?

  I guess, you know, the question to you, Danny, is when deposit contract? Let's take the happy path where BLS goes well, the audits come back, everything's clean. What dates are we looking at?

• 47:32Speaker 02

  Happy path is a couple of weeks and a minimum genesis date in 2020.

• 47:40Ryan Sean Adams?

  Very cool. All right. And we've got, we've got, we've got some holidays to navigate too. Is that on folks' minds?

• 47:49Speaker 02

  Um, to a certain extent, like, yes, but like, so we have, we have some, some ability to select with this parameter called min, min genesis date, right? And that is like a Unix timestamp that is the earliest genesis can happen if a minimum number of deposits are hit.

• 48:13Speaker 02

  And so there's a little bit like if we assume optimistically that like deposits come in and we hit, we hit it no problem. Then like we do kind of get to select a date and that would probably try to avoid any major holidays. But if we don't hit those numbers, then genesis date, genesis time is like totally up, up in the wind. And, you know, hopefully.

• 48:39Speaker 02

  Hopefully, that's not what I have to tell my wife that we're doing on Christmas morning or something like that.

• 48:43Ryan Sean Adams?

  Yeah.

• 48:46Speaker 02

  You know, I I I take that back. I think she would accept it as like a pretty reasonable gift.

• 48:51Ryan Sean Adams?

  Yeah, absolutely. Well, okay, so, um, you know, the interesting thing about that, I think, is like, this is going to be probably a light holiday year for a lot of people, too, anyway, right? So, um, at least with respect to travel. So maybe not all bad news if that happens. Here's a question from somebody in the community is asking to to something you just sort of addressed, Danny. How fast you guys think the deposit contract will hit 500,000 ETH? And maybe just give some background on to why that, uh, why that 500K ETH is an important number.

• 49:24Speaker 02

  Right. Uh, so I'll do the background first. Um, so essentially, it is the minimum amount that can, uh, kick off the chain. If more deposits happen before that minimum genesis time, uh, it can be kicked off with a higher amount. Initially, this number was put at 2 million.

• 49:43Speaker 02

  To find the balance between being able to bootstrap the chain, but not have like a whale control the entire thing.

• 49:52Speaker 02

  Obviously, there are people with 500,000 ETH. There aren't incredible amount of people with 500,000 ETH. Uh, but there are players that could potentially game that. And so

• 50:05Speaker 02

  the other, the other balance between having enough ETH to kick it off and be in a kind of in a secure zone is to, in these early phase of ETH2, um, there are, there are risks that wouldn't necessarily exist in, say, two years' time. Um, there is kind of this unknown, uh, lockup, which as ETH1 gets integrated into ETH2, um, you are then able to liquidate, uh, your validating ETH. Uh, but until then, you're kind of like, you're in it to win it. You're, you're, you're a validator and you can exit, but then your ETH is, is sitting, um, kind of in limbo.

• 50:40Ryan Sean Adams?

  And we don't have a date on when that happens. So it's kind of an unknown variable, right?

• 50:44Speaker 02

  Right, right. So we do expect like lower, much lower participation early on and much higher reward than, say, in two years where, um, I don't know, say, in some amount of time where the system is hardened, uh, the system is hardened, so there's less technical risk and, uh, there's, uh, easier paths for liquidity.

• 51:06Speaker 02

  So we do expect like there to be some amount of barrier to everyone participating with all their ETH, right? And so, given that, um, the low 500,000 is kind of like, in the event that it is not incredibly enticing to be one of the bootstrap validators, um, it's definitely an achievable number. Um, and so it's, it's, it would be in a much lower security environment. Um, obviously ETH is worth much more than it was, uh, maybe when some of these decisions were made and ETH was worth like $90. Um, and so 500,000 isn't like a crazy low security environment, but,

• 51:47Speaker 02

  it's really kind of finding the balance between what is the minimum that we can really expect in this, uh, high risk phase, balanced with what's the minimum we can get away with in terms of security to, to kick this thing off. Like, obviously, 20,000 ETH is not, not a sufficient number.

• 52:05Ryan Sean Adams?

  Yeah.

• 52:05Speaker 02

  But it's, it's a little bit of guesswork, um, because of a lot of the unknowns and in terms of the incentives and who's going to show up on day one.

• 52:13Ryan Sean Adams?

  I guess, you know, to throw some numbers out here. So I, I don't have the calculator in front of me, but if, if you've got 500, if there's 500,000 ETH in there, like rewards are going to be a lot higher. So we're talking definitely double digits, right? Maybe upwards, close to like 20% ish range.

• 52:27Speaker 02

  Yeah, I just put this in that EIP 2982. So let's check it out. Yeah, it's like 23.5%.

• 52:34Ryan Sean Adams?

  Okay.

• 52:35Speaker 02

  Is the maximum annual.

• 52:35Ryan Sean Adams?

  23.5% ETH denominated, which is important, not dollar denominated.

• 52:40Speaker 02

  Yes. Sure. Yeah. Yeah. I mean, uh, who like,

• 52:44Ryan Sean Adams?

  Oh, finish that sentence, Danny. I know where you're going. Yeah, do it, do it. Who denominated in ETH?

• 52:49Speaker 02

  No, no, no, no, no. I didn't mean, I just, like, in terms of dollar amount, like, what is that even, like?

• 52:55Ryan Sean Adams?

  Oh, yeah, yeah.

• 52:55Speaker 02

  It changes every fucking second.

• 52:57Ryan Sean Adams?

  Well, like, okay, but here's, so, so here's what's interesting. So 23% on the, if it's close to 500K, right? So, and that would be sort of threshold to booting this up. We have, uh, so, you know, uh, 500K Ether right now prices, what, 410 ish ETH price? So that'd be like $200 million. parked in the staking contract, basically. We have eight point nine million ETH locked in DeFi. That's like close to, um, how much is that?

• 53:27David Hoffman?

  It's like eight, eight percent.

• 53:29Ryan Sean Adams?

  Eight and a half percent. Eight percent, and that is billions of dollars. Um, yeah, it's, I mean, we've got billions of dollars locked in DeFi. And the Ethan DeFi is making like, I don't know, two, three percent.

• 53:42David Hoffman?

  Yeah, not even.

• 53:43Speaker 02

  I don't know, just. Well, I thought, I thought you could make like 10,000 percent.

• 53:48Ryan Sean Adams?

  Well, that, that was the summer and that, you know, that didn't last.

• 53:50David Hoffman?

  And that's on your stable coins, not on your ether. Oh, I'm not on your assets.

• 53:54Ryan Sean Adams?

  You don't get ETH denominated returns are the thing. So, um, I don't know. If we look at DeFi history, uh, at least for me, it feels pretty confident that are we going to have people stake ETH in ETH two for 23% ETH denominated gains? There's definitely going to be a subsection. I feel like we're going to easily cross that threshold, but it is guesswork.

• 54:14Speaker 02

  Because the, the risks of the risks, like smart contract risk is high, right? And especially when you're participating in your system and there are risks, uh, in ETH two, right? Like, so that's not just a free, you know, you don't just get a free 23%. Uh, you have to run your node. There are like technical attack risks. There are all, all sorts of stuff. Um, and so the, and, and early on, there's just more unknowns about like how stable this thing is, which clients are the best to use and that kind of stuff. So like that number accounts for, uh, additional risks. Um, but in the long term, you know, when say eight, 10 million ETH is in this thing, um, as we expect

• 54:58Speaker 02

  in the long term, uh, there's, there's going to be a lot fewer risks, uh, because this system will have existed in production. Um, and because a lot of these, like the clients, I think will be much more hardened by then, uh, and liquidity, uh, much more easier access liquidity exists, uh, you expect a much lower return. Uh, so it might look eventually like those meager DeFi returns, but, uh,

• 55:24Ryan Sean Adams?

  But then it'll be much more of a risk free type of, or a low risk relative to those DeFi. Um, yeah, it's a really nice property that I'm not sure if folks are aware of. It feels, uh, it feels very scalable on that.

• 55:37David Hoffman?

  So Danny, as this deposit contract gets up and running, I'm seeing kind of a different parties that are relevant here. There seems to be like, you know, people that are going to stake on day one, no matter what. And perhaps these people are long time like Ethereum people that probably like had, you know, like perhaps even not participated in the Genesis sale. I would imagine Vitalik would be part of this group. And then there's the group of people that I think are just going to throw a few ETH in, just a small percentage of their total value into the deposit contract. And then there's going to be people that do nothing. Is that kind of how you see this stratification? And also, if somebody just doesn't want really to do anything, do they have to do anything at all, ever?

• 56:21Speaker 02

  Right. So I think that's a reasonable way to think of stratification. I mean, there's people that, it just, it depends on your stack, obviously. You know, I don't expect most people to go all in on their stack regardless of the quantity. You know, if you have 128 ETH, you might run a validator. If you have 128,000 ETH, you might run, you know, 1,000 validators. But I don't, it's just someone's going all in. Obviously, someone's like been waiting for this for five years, is like gonna drop their entire stack in it and like is, has no intention of selling any of their ETH for the next 10 years. And it's like, I'm all in. But I think you're going to see much more of the people in that middle ground

• 57:06Speaker 02

  where like, you begin to experiment, you throw in a couple of validators and get your toes wet and kind of see how the system evolves, see how rates evolve, see how participation evolves, and then potentially go and more. And that's, that's kind of on the, on the individual basis. But there's also, there's a lot of other like complicating factors to, to this engagement of. You, you mentioned Bison Trails, there's a number of these like staking providers and institutional players, which is good. I mean, there's, there's a demand for this stuff. So I'd rather there be a ton of them. And it seems like there's going to be a ton of them rather than just like one or two. But some people might choose

• 57:46Speaker 02

  rather than to participate at home, might participate in one of these like larger pools. Or, you know, if you don't have the right ETH, you might choose to participate in one of these pools with a smaller denomination. And then

• 58:04Speaker 02

  Yeah, so I mean, that's that's the range of that. And then the what your second question was.

• 58:10Ryan Sean Adams?

  What if people, people, they don't really care to stake and just want to get on to ETH2?

• 58:15Speaker 02

  And that goes back to like one of the early questions we talked about and like this.

• 58:20Speaker 02

  What ETH1 is, is the existing Ethereum chain, the state and the transactions and kind of like the continuation of that. And the plan is that this this chain is governed, that state is governed by proof of work. And at some point in the future, it will be a hot swap of the consensus from proof of work to this beacon chain. Proof of stake and things will just be uninterrupted. Your your your applications, your contracts and your ETH will just exist in this new environment. And so, yes, if you don't want to do anything, don't do anything. Honestly, like phase zero, honestly, this like bootstrapping consensus is for stakers. It's for people that want to get involved.

• 58:59Speaker 02

  It's, you know, obviously, like, there are stakers, there are DAP developers, there are community members and like the people kind of span the gamut. But like, if you're not interested in being a staker, then like, just let it let it bootstrap, let it go and enjoy the fruits of it in due time.

• 59:15Ryan Sean Adams?

  This is going to be pretty historic, though. I mean, this is the first time a like kind of a live network is attempting to switch over from proof of work to proof of stake. I've called this like economically, if like if we think ETH is money is a monetary asset, monetary type asset. This is almost like a initial bond offering for the Ethereum, you know, nation. Because you're able to put that monetary asset in a bond, stake it and receive some sort of reward. And all of this is happening before our eyes live. It's going to be, I think, one of the most fascinating economic experiments. You know, maybe in history.

• 59:52Ryan Sean Adams?

  So here's a reader question, though. So I think, you know, back in 2017, we faced kind of a couple of years of what felt like surrendering delays, ETH2 delays. The reader asked, or the watcher is asking, what's the most likely reason why ETH2 effort continues to feel like it gets stalled or delayed? Like, why has that been happening? And like, how do we know it's not going to happen again, either at this phase zero, or maybe even like phase one? Because like, we get phase zero, but still phase one and phase 1.5 can we, until we can start doing things with it? Why the delays?

• 1:00:31Speaker 02

  Right.

• 1:00:33Speaker 02

  So

• 1:00:35Speaker 02

  this problem, the set of problems, has moved from the abstract to the concrete over the course of many years. This research effort, the abstract, has been ongoing since before the launch of Ethereum mainnet, and continued for many years. It had many false starts, it had meandering paths, and it took a long time to bring the fundamental research into a concrete reality.

• 1:01:07Speaker 02

  That, even at the end of 2017, was still happening. Some of the fundamental research driving the core of the proof of stake and the core of the charting was still really getting out the door. At that point, we were also beginning development, and there was optimism that all the hard problems were solved. But it wasn't really until this mid-2018 shift, where the abstract firmly began moving into the concrete. But moving into the concrete first had to move into specifications. And specifications took us a long time, because these things are complicated. And so there was optimism that the early specifications were kind of where we needed to be,

• 1:01:52Speaker 02

  and that implementation could quickly follow. The specification time took more firmly into the 2019 range. And thus,

• 1:02:06Speaker 02

  Really, the implementations were getting started and expertise, engineering expertise in this domain was being built. But we weren't at the point in which this stuff could be shipped. Really, once the specifications solidified and implementations could really bite in and dig in in mid 2019, did the stuff concretely begin to move out the door?

• 1:02:31Speaker 02

  And what we've seen is

• 1:02:34Speaker 02

  client engineering teams, first and foremost, understand this stuff and figure out how to build and manage it. It's one thing to write it down theoretically, it's another to actually create sophisticated systems to do so. What we do have now are sophisticated systems that can handle proof of state and handle sharding. And these, that's what's being kind of finally battle tested and moving into production into this year.

• 1:02:59Speaker 02

  So there's a couple of things there. There's the the abstract of like actually just abstractly, can we solve these research problems? There's writing specs down and then there's like the actual building of production systems. I would claim that on the abstract side, on the research side, there are not a lot of unknowns. We do have very firm grasp on the reality of the system that we're trying to build. And on the specification side, we do have clear paths to production grade specifications on phase one, phase 1.5. This stuff is still a bit influx, but is in a place where we're kind of hardening and refining rather than coming up with the basics.

• 1:03:43Speaker 02

  We've also gotten better at writing specifications. We have like a framework with how we write specifications. We have like standard ways to write these things and standard ways to test and and and validate what we're writing. So those two, the research that stuff is not a big blocker. Specifications is ongoing, but we're in a pretty good place. And on the on the actual engineering side, engineering phase one and engineering phase 1.5 is hard. Like plain and simple, this stuff is hard. Any any amount of work and any amount of iteration is hard. But the foundation, the foundation of these systems and the foundation of these engineers and these teams is laid. And so. When you're talking about expanding, say, the role of what a validator does,

• 1:04:26Speaker 02

  which happens in phase one, they have additional duties, not just the beacon chain, but to the shard chains. This is an extension of what is already robust software. There's already like generally frameworks for how to deal with validators, how to kind of shuffle them around, how to have different duties and store what they're doing and manage caches and shuffling all sorts of stuff. So a lot of the fundamental problems are solved. It's really extending the ability of these systems. And so I will say this time and time again, this stuff is hard. And like fundamentally, like that's, that's the answer. That's why this, that's why there are delays. This stuff is hard. It's never been done before. But we, the researchers, the developers, the testers, that everyone kind of involved in the system

• 1:05:11Speaker 02

  are much better positioned to move professionally and to move quickly on subsequent phases. And so, yes, there is complexity. Yes, I will not give you a timeline. But the ability to extend these systems and the ability of the engineers and the teams, you know, is up there.

• 1:05:34David Hoffman?

  Awesome. Thanks for that, Danny. Well, one question that we have coming in from the YouTube is, what would you like to see from the client teams? You mentioned loose ends are being tied up. One thing personally I'd like to see is the new client switching schema. I actually don't know what that is. Maybe you could help elaborate on that.

• 1:05:54Speaker 02

  Great. So one thing, I'm going to beat the drum on client diversity all day, every day. I think that we have a little bit unhealthy distribution. The prison team has been around for, for longer than any other team. And they've had public test nets for much longer than the other team. And so I think a lot of the community is kind of anchored on this client because they're just familiar with it. It's a good client, but there are other very excellent clients. And so what we saw in Madasha was we saw early in Madasha, we saw a critical error with how Prism was handling time, which caused like some madness.

• 1:06:31Speaker 02

  Also eliminated us the fact that like Prism was probably 70 plus percent of the network. And during that, we could have seen a much quicker resolution of this error if validators were able to cleanly, simply and securely swap clients. But there actually was not like a standard in place for me to cleanly do that. And actually, if I naively just swap my client,

• 1:06:59Speaker 02

  due to the nature of the timing error on the Prism client, I might actually have been liable to be slashed. If I didn't like port the information of my previous messages to this new client. And so one of the great things, there's a lot that came out of that Madasha incident. All, I think all clients are like 10 times better since that incident because they got to deal with like a crazy stressful forking scenario with like 10% of the network that remain in life. So that's good, good in and of itself. But another thing that came out of it was there's this validator database like interchange format. Essentially, if I'm running Prism, I can go, you know, export validator DB. And then I have like this file. And then if I want to run Lighthouse or Nimbus or Taku,

• 1:07:44Speaker 02

  I can just go import validator DB, import keys or like import, import my keys and I'll say, do you have an existing DB or something? And you give them the file. I don't know what the UX around it is, but the standard exists so that I can safely and easily kind of port between, between clients. And so that's, that's what they're mentioning there. And this, there is a standard, there is a standard that is implemented, I know by Lighthouse and I believe by Taku and maybe by Prism. And the standard is being prepped to be, you know, an EIP RC. And so that's, that's one of the kind of things, like when I say loose ends that are being tied up, so that.

• 1:08:29Speaker 02

  These, you know, people not only can run their clients, but in exceptional scenarios can can run and manage their clients. Another thing that I it's kind of funny. It's like, I think Taku like recently merged a PR that actually lets you submit exits. Right? Like, that's, that's like the tail end of the validation process and like not something we're like consider like that you tat like when you're when you're imagining a test that you're usually like Genesis and like run stably. But because of that, you know, they had this like feature just kind of like hanging in an issue of actually being able to submit an exit. You know, and so that's, that's something that like, when I say loose ends, that's not a complex feature.

• 1:09:09Speaker 02

  It's just sign a message and broadcast it, but it didn't exist. And so that's, that's the kind of stuff. In addition to the final hardening and kind of security preparations that are happening.

• 1:09:21David Hoffman?

  One thing I want to go back to the the switching, the the client switching schema, a scheme, I guess. The historically, we've had instances in Ethereum 1.0 where one client got DDoS, right? And so it was, this was the Shanghai attacks way back when. And if, and you know, there was me basically, if I'm remembering correctly, there's basically just two clients at the time. And one client went down. And the reason why Ethereum didn't go down was because the other side of Ethereum, which was the what was the other client that?

• 1:09:55Speaker 02

  There's parity and geth, and I think they actually both independently got attacked, but at different times.

• 1:09:59David Hoffman?

  At different times, right? And so like they said, one was the backstop for the other. And what you're talking about with these switching schema, switching validators in Ethereum 2.0 is that we're making, we're trying to find a way to like just switch at the press of a button, right? And so for people that's trying to attack Ethereum, it's like playing whack a mole because what these clients are trying to do is they're trying to make such an easy way to switch on to a new client that may not be succumbing to whatever tack you're trying to have. So it's just about producing anti fragility. This is all correct, right?

• 1:10:30Speaker 02

  Right, right. And and Some of this we get just by being in a multi-client paradigm without active switching. Right? So if a client that is 1/3 of the network, or say, say a client's like 25% of the network, and it gets attacked and everyone gets taken down, taken down.

• 1:10:47Speaker 02

  The chain can still be built and it actually can still be finalized. Now, take a client that's 50% of the network. The chain can still be built if that client is taken off, but it can't, it can't finalize. So it can still provide liveliness and some quality of service, but it can't provide, provide that cryptoeconomic finality that we would desire. And so that's, that's another component. Like, so if there's a 50% client taken off and there's not a good way to switch, then we're kind of in this like limbo state where we're not finalizing. And so this adds additional ability to rectify scenarios. And personally, you know, if you're, if you're a validator and you just want, you want good uptime, like if you have issues with a client, you want to be able to switch regardless of whether there's, there's an attack.

• 1:11:28Speaker 02

  And so this just kind of provides that baseline ability to, to be able to manage and kind of control your own destiny. And that, that's, that's, I kind of alluded to the fact that I think that Prism has too high of a community share right now. Because we have, we have four clients. Four very viable clients that are, that are going to mainnet. We have an additional client, LoadStar, with a JavaScript client. They're awesome. They bring incredible JavaScript tooling, but they're not quite ready for mainnet. And these four clients, if we had, say, like every client had 20, 30% of the network, then we'd have like this kind of built-in redundancy where if a client goes down, the liveliness remains, the, the finality remains live.

• 1:12:14Speaker 02

  Whereas if we have a client that has like a huge percentage of the network, there's, they just, it embodies like a huge amount of much more risk for both the users, the, the validators and kind of their profits, as well as this finality mechanism of, of the protocol. So again, like being able to switch easier helps in the event that a majority client has issues. But I'd also love to see a better distribution in general. Very cool. And we have, we have four viable clients, so like.

• 1:12:45Speaker 02

  Use them.

• 1:12:46Ryan Sean Adams?

  Maybe, maybe, maybe we'll see some of that, particularly when we get to, you know, production maintenance and real money is at stake and people want some redundancy. I get one client outage, so let's hope for that. Here's another viewer question. So after phase zero, how long until phase one and two? And maybe, let me just slip phase like 1.5 in there conceptually, realizing this is all part of serenity, of course, but what about these other phases? So give us happy path, maybe.

• 1:13:17Speaker 02

  Yeah, I mean, I'm.

• 1:13:21Speaker 02

  These client teams, they have, they're, they're much larger than they were a year ago. They've been encouraged to kind of like hire and build up the expertise, but they generally have like some like very expert resources that the leads that are driving a lot. The goal and the intention is to get phaser out the door and shift a lot of these expert resources to sprint on phase one. It's been very difficult to prioritize the development of phase one by these client teams while they have the impending launch of phase zero. But phase zero will go in more into an iterative maintenance mode for these clients and the extra resources will spend day and night working on shipping phase one.

• 1:14:08Speaker 02

  I think that it's realistic to see that next year, but I need these engineers to dig in come, you know, January 3rd and begin to flush it out. Again, a lot of the core of the system and a lot of the complexity of the system is the managing of the beacon chain of, you know, 100,000, hundreds of thousands of validators and consensus entities and caching and databases and all sorts of stuff. And a lot of that is in place. And a lot of what phase one is kind of an extension of a lot of those basic building blocks. So I'm pretty confident that, you know, we'll get significant kind of basis in place early next year and test that's going, but. There's a lot of unknowns.

• 1:14:53Ryan Sean Adams?

  And so, so looking at that, so Phase Zero builds the brain, right? So we've got this whole body that is Ethereum. It's got its own separate brain. Now we're building another brain over here, but it doesn't have a body yet, right? So it's in kind of this lab. And then Phase Zero launches with, you know, and we're building the brain, which is kind of the consensus engine, right? What additional benefits do we get with Phase One? We had Vitalik on the podcast and he was talking about, hey, it's kind of like a sharded data availability layer.

• 1:15:23Speaker 02

  Yeah.

• 1:15:23Ryan Sean Adams?

  For us, so are there any wins there? And then Phase One dot five, it's, it's kind of my impression that that's the point at which we can, we can delete the other brain and we can merge the body and like the, the bodies together into one thing. But what are the wins for Phase One?

• 1:15:40Speaker 02

  Yeah, so.

• 1:15:43Speaker 02

  So the goal, one of the primary goals is to migrate the existing Ethereum chain for proof of stake. In the meantime, while this proof of stake mechanism is being bootstrapped and built and embedded in production and kind of iterated on, we will also extend that proof of state mechanism to come to consensus on a lot of data. It's sharded data and provide a whole host of extended data, layer one data availability capabilities. Essentially.

• 1:16:15Speaker 02

  We expect this consensus mechanism to be able to come to consensus on anywhere from like one to four megabytes of data per second. And that's what Phase One is, is taking that consensus and

• 1:16:30Speaker 02

  and getting it to come to consensus on a lot of data. And I, data is kind of this weird thing where like,

• 1:16:36Speaker 02

  I'm aware of how important layer one data can be to applications and things. But I think maybe the broader community is just beginning to kind of bite into what layer one data even means and what it, what it, what it can do for us. And I, I distinguish data from data and computation. So like layer one data in Phase One doesn't really have like a layer one meaning. It's just the ability for the consensus system to like make strong crypto economic claims that this data exists and is available.

• 1:17:07Speaker 02

  So what does data do for us if we don't have computation? Well, I think first, first and foremost, what we expect it to be used for is rollups, which is like one of the main scalability avenues that Ethereum wants to take in the short term, but also probably the medium and long term, where the amount of Layer 1 data dictates how much these systems can scale. I think you can get a couple of order of magnitude with just the data of the single Ethereum blockchain today. But with, you know, 100x that in a sharded solution, we can take those two orders of magnitude and multiply by another couple and get some pretty incredible scaling. But another interesting thing is like, what is, what is Layer 1 data? What can we do with it?

• 1:17:53Speaker 02

  You know, if we don't put computation on it? I don't know. Like, there might be all sorts of crazy stuff, like just having this extended capability. One, I think is going to provide us like quite a bit of scaling through rollups. But there's all probably all sorts of decentralized applications and things that we haven't even thought of that all of the innovators out there and all the people that like always want to play with the new gadgets are going to take an extent. And so Layer 1 data, we expect to just be an asset in and of itself. And so Phase 1, even though the existing proof of work chain, what we call ETH1, isn't integrated back into the system, it can learn about this system through a light client on ETH1 and have access to make proofs about this data availability layer.

• 1:18:37Speaker 02

  And so all of these rollup mechanisms that are in production today and kind of on the verge of being in production in the next quarter or so can not only leverage the Layer 1 data of the existing Ethereum chain, but this highly scalable data layer of kind of the beacon chain system. And so we do expect there to be some pretty major gains. Expect this to be a big, pretty big asset to the community at that phase. And then subsequently, we'll have the integration of the existing Ethereum chain into this proof of state consensus for a little bit more native access to that data layer.

• 1:19:16Ryan Sean Adams?

  All right, so we've gone through all the phases, right? So again, Happy Path, maybe it looks like Happy Path says that the the contract will ship and staking will ship this quarter. And then Happy Path would maybe say Phase 1 ships next year. I think that maybe the last question, the one to wrap on, Danny, is when will the old brain die? When will we finally be rid of proof of work for good? Give us another Happy Path on that, because that would make me very happy.

• 1:19:51Speaker 02

  When it's ready.

• 1:19:54Speaker 02

  There is, so there's been a lot of work done on this. Mikhail from TXRX at Consensus and Guillaume from the Geth team at the Ethereum Foundation have worked on a prototype of the basic the merge, the beacon chain controlling the consensus of existing Ethereum. It's great because it reuses most of the software. It's just to get a software with one Geth, etc. And it reuses the same public interfaces. And so you can take existing wallets and stuff and just interact with Ethereum, but in this new environment. So we like used MetaMask to send transactions to, you know, an Ethereum chain controlled by the beacon chain. Very cool. In addition to that, there's now, there are probably three or four of us built, working on this merge.

• 1:20:40Speaker 02

  And now there's upwards of like 10 people. There's a lot of different things to think through, like shard data fee markets. Actually, how you handle security at the point of merge, you know, when the proof of work dies and the proof of stake takes control, you know, at this inflection point. Like, what are the things to think through? We're currently prototyping that inflection point.

• 1:21:03Speaker 02

  And a number of other things, like at that point, you have the ability for native validator withdrawals and more native deposits. And so figuring out the mechanisms of withdrawing and withdrawing contracts and all that kind of stuff. That stuff is all in the works and that stuff is all very independent of this Phase 1 development. And is happening in parallel and kind of picking up steam. So I think that By mid next year, we will have like pretty robust prototypes and beginning to have pretty robust specifications of the different dimensions of this problem. And although I think client teams

• 1:21:41Speaker 02

  will be digging very deeply into phase one at that point, we'll be ready to really plan and begin for a serious planning of the merge. So, you know, take it, take it, take it for what it is. I like, I have like, we all have like an optimal path and like I probably have a better understanding of some of the problems at hand than others. But these are deep and complex problems. And there's a lot of different moving parts. And I don't want to, I don't want to put engineering teams in the position of having an arbitrary deadline that I happen to say on a podcast, I'm not going to say it.

• 1:22:26Ryan Sean Adams?

  That is completely fair. Thanks. Thanks a lot, Danny.

• 1:22:30David Hoffman?

  Yeah, Danny, we want to give a big tip of the hat to spearheading this entire entire effort. So, you know, thank you for for everything that you have done and, and, you know, pushing the boulder up the hill so far. And so.

• 1:22:43Speaker 02

  Thank you. I get the chance to talk about it and I get the chance to work with kind of in the middle of a lot of it. But like tipping my hat to all of the incredible researchers at Ethereum, at the Ethereum Foundation and elsewhere. And like, the like, the engineering talent on this project is unbelievable. And they're really like the unsung heroes of this process. So shout out to them.

• 1:23:07David Hoffman?

  Yeah, should definitely shout out to them. Danny, if there's one thing that the Bankless Nation could help with this effort, what would it be? What could listeners and viewers do to make sure that, you know, Ethereum 2.0 comes alive in the way that we want it to?

• 1:23:22Speaker 02

  I mean, phase zero is for stakers. If you are planning on getting involved, get involved today. Check out the ETH staker community, dig deep, run some software, run some non-majority client software, help yourself and help the network by using a diversity of software. So I mean, that's, that's, that's the big shout out. If you're planning on staking and otherwise, if you're just in the Ethereum community or you're building DApps, like keep doing what you're doing. We're trying to make a better future for you, but like, there's a lot of incredible shit going on today. So like, if that's your thing, just stay heads down and keep making Ethereum awesome.

• 1:23:57David Hoffman?

  Absolutely. Yeah. Okay. And if you guys are interested in doing that, I would actually super recommend the ETH Online Global Event. That's tomorrow. There's going to be a talk about staking for beginners at 17 E D T, 1700 hours E D T, whenever that time zone is. You can check it out at ethglobal.online. There's a schedule there. A bunch of other stuff too, as well, such as E I P one, five, five, nine. And if you're interested in a lot of the content that Danny was talking about just now, you're probably going to be interested with all that content going on there. So learning more, that would be a great resource. Danny, thanks so much for, for this AMA. Really appreciate your time.

• 1:24:38Speaker 02

  Thank you. It's my pleasure. Talk to you all soon.

• 1:24:40Ryan Sean Adams?

  Take care, Danny. Thanks a lot.