EVM Equivalence | David Reads

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

• 0:00David Hoffman?

  If you write code once, but it works seamlessly on 1,000 compatible chains, then the value of what you have just produced is far greater. EVM equivalence takes the EVM network effects to a whole new level.

• 0:14David Hoffman?

  Bankless Nation, today, on the newsletter, and now also on the YouTube and podcast, we are going to explore the concept of EVM equivalence. And in my opinion, the paradigm of EVM equivalence will unlock the next phase of Ethereum's growth. DeFi Summer 2020 hit Ethereum's limits to scale. Since then, the network effects of the EVM has fractured into different directions. New Layer Ones and even many Layer Twos have broken from the EVM standard in order to produce scale. But the era of EVM equivalence is upon us, and it will allow Ethereum to pick up where DeFi Summer left off. A new Cambrian explosion of innovation is on the horizon. We just need EVM equivalence to unlock it.

• 0:58David Hoffman?

  This is an article that I wrote on the Bankless newsletter, and I'm reading it aloud for those that prefer audio or video content. A big shout out to Ben Jones from the optimism team and also David Mihal for their invaluable help in helping me go through this very challenging topic. This concept of understanding EVM equivalence and the network effects around the EVM has been extremely challenging. I'm not technical, and so this is a very technical concept that I've worked really hard to get into what Bankless is really good at, which is abstraction and metaphor and meaning and significance without having to go into nitty gritty details. So thank you to those guys for helping me get through this.

• 1:36David Hoffman?

  I hope that this is an extremely digestible, albeit a little bit long, piece that teaches us a very critical lesson about how this industry works. All right, let's go ahead and get right into it. First, I'm going to read out the table of contents, but it's also a TLDR. So this should actually help map out the future of this article. So inject a little bit into your brain now and then unpack the whole thing later. Part one is going to be understanding EVM equivalence. There is a difference between scaling on Ethereum and scaling Ethereum itself. The EVM is this emergent structure produced from thousands and thousands of developer contributions.

• 2:17David Hoffman?

  Forking the EVM limits the ability to access these contributions. If you change the EVM, the developers that keep on contributing to it, you aren't getting all of those contributions because you've changed the standard. There's this line, "If you want to go fast, go alone, but if you want to go far, stay together." And so I'll rephrase that in saying, "If you want to go fast, fork the EVM into something else, but if you want to go far, stay EVM equivalent." Replication and emergence are necessary properties for a self-propagating system that blankets the globe. EVM equivalence allows us for replication at the two layers of Ethereum, the app layer and the protocol layer.

• 3:00David Hoffman?

  EVM equivalence with layer twos allows for the copying and pasting of DeFi code across all EVM equivalent rollups. Anything new of value discovered on one optimistic rollup that's EVM equivalent is immediately reproducible on other rollups. It also allows for individual rollups to implement an EIP upgrade before the main Ethereum layer one, which allows for a live production testbed for Ethereum improvement protocols before they are safely and securely implemented on the layer one. Next, there's this term called "Horror Vacui." Basically means "Nature abhors a vacuum. Nature hates a vacuum. It fills all voids." If there's a void, nature fills it.

• 3:44David Hoffman?

  If there's some dirt there, a plant is going to figure out how to grow there. And crypto is like nature. It slowly comes to fill every void that it discovers. There's also something called "The Last Mile Distribution Problem" and how EVM equivalence can solve this. Under an EVM equivalent paradigm, EIPs turn into genes. EVM equivalence enables layer twos to merge EIPs asynchronously and independently from the choices of other layer twos, and that allows each layer two to adopt the EIP that its community desires the most. This produces an Ethereum that can adapt to the signals and desires of its Layer 2 users. Each Layer 2 represents an antenna for data for user preferences.

• 4:25David Hoffman?

  All Layer 2s adopting a single EIP, a shared EIP, signals to the Ethereum main chain that is desired by the community and it's safe to adopt. And lastly, scaling public goods. Optimism's retroactive public goods funding is this novel incentive mechanism to inject Silicon Valley-type financial incentives into projects that build public goods for the Layer 2. Layer 2 public goods are funded by collecting block space fees, collecting the economic energy of the Layer 2s, and directing them into public goods. Public goods research and development, which is what Optimism is pioneering with retroactive public goods, is allowed to replicate and propagate throughout the ecosystem due to EVM equivalence. And so, all of these pieces, cheap fees on the Layer 2, EVM equivalence, and retroactive

• 5:10David Hoffman?

  public good funding are the ingredients to produce a network that has motivated outworth growth into the frontier of what crypto-economic networks can do. All right, that was the Table of Contents/TLDR, but it's a robust table of contents. The rest of this is going to take about maybe 15 to 20 minutes to read. But first, before we get there, a moment to actually help map out the future of this article. The era of proof-of-stake is upon us, and Lido is bringing proof-of-stake to everyone. Lido is a decentralized staking protocol that allows users to stake their proof-of-stake assets using Lido's distributed network of nodes. Don't choose between staking your assets or using them as collateral in DeFi. With Lido, you can have both. Using Lido, you can stake any amount of your ETH to the Lido validating network and receive ST ETH in return.

• 5:56David Hoffman?

  ST ETH can be traded, used as collateral for lending and borrowing, or leveraged on your favorite DeFi protocols. All this without giving up your ETH to centralized staking services or exchanges. Lido now supports Terra, Solana, Kusama, and Polygon staking. Whatever your preferred proof-of-stake asset is, Lido is here to take away the complexities of staking while enabling you to get liquidity on your stake. If you want to stake your ETH, Terra, Sol, or Matic and get liquidity on your stake, go to Lido.FI to get started. That's L-I-D-O dot F-I to get started. The Layer 2 era is upon us. Ethereum's Layer 2 ecosystem is growing every day, and we need bridges to be fast and efficient in order to live a Layer 2 life. ACROSS is the fastest, cheapest, and most secure cross-chain bridge. With ACROSS, you don't have to worry about the long wait times or high fees

• 6:40David Hoffman?

  to get your assets to the chain of your choice. Assets are bridged and available for use almost instantaneously. ACROSS bridges are powered by UMA's Optimistic Oracle to securely transfer tokens from Layer 2 back to Ethereum. A token proposal is being deliberated as we speak in the ACROSS forum, where community members will decide on the token distribution. You can have your part of ACROSS's story by joining the Discord and becoming a co-founder and helping to design the fair, fair launch of ACROSS. If you want to bridge your assets quickly and securely, go to across.to to bridge your assets between Ethereum, Optimism, Arbitrum, or Boba networks. If you're trying to grow and preserve your crypto wealth, optimizing your taxes is just as lucrative as trying to find the next hidden gem. Alto IRA can help you invest in crypto in tax-advantaged ways

• 7:24David Hoffman?

  to help you preserve your hard-earned money. Also, Crypto IRA lets you invest in more than 150 coins and tokens with all the same tax advantages of an IRA. They make it easy to fund your alternative IRA or crypto IRA via your 401(k) or by contributing directly from your bank account. There is no setup or account fees, and it's all you need to do to invest in crypto tax-free. Let me repeat that again. You can invest in crypto tax-free. Diversify like the pros and trade without tax headaches. Open an Alto Crypto IRA to invest in crypto tax-free. Just go to altoira.com/banklist. That's A-L-T-O-I-R-A dot com slash banklist and start investing in crypto today. Let's go and get right into it. Starting from the top.

• 8:09David Hoffman?

  EVM equivalence. Understanding EVM equivalence. Defined. EVM equivalence means complete alignment with the Ethereum virtual machine specification. The EVM equivalence design philosophy is to produce an optimistic rollup with minimal diff, that's minimal differentiation, to Ethereum. EVM equivalence extends the properties of Ethereum into the Layer 2s. It blurs the lines between when the Ethereum Layer 1 stops and when the Layer 2 rollup begins. This is the difference between scaling on Ethereum and scaling Ethereum itself. Optimistic rollups that are perfect clones of the Ethereum EVM don't just share in Ethereum's security. They share every aspect of its network effects.

• 8:51David Hoffman?

  Other Layer 2 design constructions do not have the same privilege of accessing all of Ethereum's network effects and will always be more specialized than their EVM equivalent counterparts. So there's a barbell here to think about where on one side of the spectrum you have EVM equivalent optimistic rollups or EVM equivalent rollups where it's a perfect one-to-one clone of the EVM standard and then something completely different, like a completely rebuilt, the EVM is baggage. Honestly, if we rebuilt the EVM from scratch today, we'd do it totally differently, but we can't because there's already network effects. But anyways, the other alternative to EVM equivalence is just completely redo the whole thing. This is a very specialized execution environment that's built for your specific rollup that's optimized for you.

• 9:36David Hoffman?

  You don't get the network effects of the EVM, but you can recreate something that's just perfect for what you need to get done. But it's not EVM equivalent, it's something completely special. Okay, my claim is that EVM compatibility is dead. EVM compatibility is the middle of those two things. Like you still have the baggage of the EVM, but you also recreated a bunch of new things, but you've really gotten whatever is the opposite of the best of both worlds. Either optimize for generalizability by adhering to the EVM standard and therefore picking the same standard as everyone else, or build something completely different that's highly optimized for your use case. In order to fully extend the full might of Ethereum to the Layer 2s,

• 10:19David Hoffman?

  we're going to need more than just mere EVM compatibility, we need EVM equivalence. Next section, compatibility versus equivalence. When the optimism team introduced EVM equivalence last year, they uncovered the technical difficulties between equivalence and compatibility. Rollups were hailed as our scaling savior. Finally, a layer two, which we can run Uniswap in. The earliest rollups accomplished this by completely recreating Uniswap with custom code on top of a custom-built optimistic rollup. And that just wasn't enough. The network effects of the EVM extend far further than just solidity. A massive supporting cast of tools give Ethereum devs their superpowers. Because these tools are meant to run on the EVM standard,

• 11:04David Hoffman?

  they broke for custom-built rollups, not to mention the massive effort required by protocol devs to create something solidity-compatible. With EVM equivalence, the EVM itself is copied and pasted into the layer two. Everything under the hood is the same. The EVM is a city. David Meehow, who helped me understand all of this, gave me this metaphor. Open source code is like a city. It's emergently created bottom-up from the contributions of many developers who see problems and build solutions. Over time, the city becomes optimized, robust, and efficient. EVM-ish chains are that, like the Vegas version of Paris.

• 11:45David Hoffman?

  They're trying to artificially replicate something that came organically. Open source software is a public good, maintained and upgraded by its respective communities. Developers that use open source software run into all sorts of problems while using it, some trivial, some critical, and everything in between. Some developers spend time fixing these problems and then lobby the community to accept their inputs. If the community sees value, then the contribution is merged. A new standard is created, and the piece of software grows in utility and robustness. Like an emergent city, builders come and produce things that the surrounding community needs and values. Shared resources and utilities are produced, and since it's code, it never decays. It's a one-way street of increasing value so long as everyone is working on the same foundation.

• 12:30David Hoffman?

  Each developer builds in their own direction and discovers their specific contributions to add to the collective. Over time, a highly robust public good is produced by the shared contributions of thousands of developers. This is the story of Geth, or GoEthereum. Geth has slowly absorbed the meaningful contributions of ETH devs over the years, and produced a piece of software that has some of the strongest network effects, both inside Ethereum and beyond. For the listeners out there, there is a picture of Kirby wearing the Geth helmet, absorbing EIP 1559, EIP 4488, EIP 2718, EIP 4844, and the other bajillion EIPs have all slowly got integrated into Geth by the community over time.

• 13:15David Hoffman?

  This is why Geth has become a reference point for the foundation for such a large part of this industry. Chains that have forked Geth and produced a non-Ethereum blockchain are still contributing to the foundation that Ethereum stands on. Geth forks that deviate from the reference version are deviating from the largest network effects in Web3. The further that one-off copies move in a different direction, the more labor and resources are required to keep up and progress, and keep up and progress with the core network. The Evian Peloton. A peloton is a group or pack of road bicyclists. Riding in a group saves energy by drafting behind other riders. The reduction in drag is dramatic. Riding in the middle of a well-developed peloton, drag can be reduced to as little

• 13:57David Hoffman?

  as 5% to 10% of the total drag that otherwise would have been experienced by the rider. The exploitation of this potential energy savings leads to very complex cooperative and competitive interactions between riders and teams in race tactics. That last line hits real different when you think about the alt-layer-one wars, and even the layer-two wars, for that matter. If you want to go fast, go alone. If you want to go far, go together. The peloton grows in efficiency and speed the larger it gets. Air resistance is distributed across a wider group of people, and as the group scales, the efficiency of the group increases. Being in the middle of the peloton is basically effortless, because you're able to draft in the wake of the entire group. The leaders of the peloton frequently

• 14:42David Hoffman?

  cycle out, as the leader takes the full force of the headwind resistance, and must expend extra energy to set the pace of the peloton. But when the leader is tired and the pace slows, there are plenty of fresh contributors who have been drafting inside the peloton to take their place.

• 14:58David Hoffman?

  For the podcast listeners, I am pausing for the video, or excuse me, pausing for the image. There's also an image of caterpillars all crawling over each other, but the caterpillars that are crawling on top of the other caterpillars are going twice as fast. Because like, you know, network effects, re-network effects, speed breeds speed.

• 15:18David Hoffman?

  Open source communities will always outpace the development of centralized teams. The reason why this industry moves so fast is that it's a collaborative flywheel. We build off of each other's successes, and when one of us progresses forward into the frontier, they bring us all with them, kind of like the caterpillars. EVM equivalence is a bottom-up, emergent, city-like public good. EVM compatibility, on the other hand, is a one-off copy from that. There are infinity different ways to deviate from the EVM, but there is only one way to adhere to it. All right, getting into replication, replication at the application layer. Producing an EVM equivalent Layer 2 ecosystem is critical to retaining the network effects of composability and interoperability. EVM equivalent rollups allow for instant copying and pasting of codebases across chain.

• 16:03David Hoffman?

  Development and innovation on a single EVM rollup is seamlessly transferable to any other EVM equivalent optimistic rollup, and also Ethereum itself. Since everything is being developed on the EVM standard, the network effects of the Layer 1 are extended to the Layer 2s, and innovations on a Layer 2 reverberate back throughout the holistic ecosystem. A single line of code means more when it's deployed on an EVM equivalent rollup. If you're an open source developer and you want your code to be used far and wide, you would naturally want to use an EVM equivalent rollup as your code is instantly compatible with all the other EVM equivalent rollups. If you write code once, but it works seamlessly on 1,000 compatible chains, then the value of what you have just produced is far greater.

• 16:47David Hoffman?

  EVM equivalence takes the EVM network effects to a whole new level. Non-EVM equivalent rollups will not benefit from these shared network effects. The lack of a minimal diff design philosophy in non-EVM equivalent rollups breaks the relationship between the network of Ethereum and those that are not equivalent. The gigantic wave of Ethereum's network effects is compounded by every new addition of an EVM equivalent rollup. And if you're not surfing on this wave, you're going to have to swim hard to catch up.

• 17:18David Hoffman?

  Replication at the protocol layer. These EVM network effects don't just apply to the app layer of Ethereum. It also applies to the protocol layer itself, where things get really interesting. Because EVM equivalent rollups are minimally differentiated from Ethereum, they offer Ethereum a testbed for new IPs to be tested in a live production environment. Right now, EIPs are tested with Ethereum testnets. They are tested many times on many testnets to ensure nothing breaks, and then it gets finally integrated into the Ethereum L1. There's always risk with this, because testnets are not minimally differentiated. Implementing an EIP into Gorley or Koven is not the same thing as implementing an EIP into Ethereum. The difference being the size, significance, and nature of the economic activity on Ethereum

• 18:02David Hoffman?

  that the testnets just cannot emulate. There's always some unknown when implementing an EIP into Ethereum. EVM equivalence offers a solution. When an EVM, when an EIP gets successfully implemented into an EVM equivalent rollup, it gives strong assurances to the base chain that the same EIP could be successfully integrated without bugs. Rollups give a live production environment with real economic activity and real capital at stake for EIPs to be tested. EIPs can be tested at the rollup layer without the risk of something breaking and impacting the rest of the entire ecosystem. When the L2s ubiquitously adopt the same EIP, it signals to the Ethereum Layer 1 that

• 18:43David Hoffman?

  it's desired by the community and it's safe to integrate into the Layer 1. EVM equivalent rollups enable Ethereum to sense the desires of the participants on its Layer 2s, making each Layer 2 an antenna attuned to the wants and desires of its users. The command and control governance of TradFi and Web2 gets translated into the sense and respond paradigm of Web3. Because each rollup is its own sovereign economy, it will implement various EIPs independently and asynchronously from the rest of the ecosystem according to the wants and the desires of its users. Over time, the best EIPs will come to dominate the Layer 2 rollup landscape as more and more independent rollups see the value of the same IP. And when an EIP comes to dominate across the entire landscape of rollups,

• 19:27David Hoffman?

  it will signal to the Ethereum Layer 1 that it's a good IP and that EIP, and it's safe to implement it at the Layer 1 level. So here's a graphic I made with three phases. One, you have Ethereum at the center, and you have all these optimistic rollups on the periphery. And two of them have adopted the same IP, EIP 6789. In the second phase, you see Ethereum at the center, but instead now five of them have adopted EIP 6789. And then lastly, you see seven out of the eight rollups having all adopted EIP 6789. And so because so many have adopted it, it's been adopted at the Layer 1. But also, there's this eighth optimistic rollup that doesn't have to integrate EIP 6789 because that's the choice that that particular EIP made.

• 20:11David Hoffman?

  It can do whatever it wants. EVM equivalence summarized. All right, here's the significance of EVM equivalence. It allows Ethereum to break free from being bound by its Layer 1 shackles. What is Ethereum? It becomes capable of extending outwards into the Layer 2s. The dividing line between the L1 and the EVM equivalent Layer 2s becomes extremely blurred. There isn't any point in which the Ethereum Layer 1 stops and its EVM equivalent Layer 2s begin. It's all just Ethereum. All right, guys, coming up in the second half of this piece, we're going to talk about the way that EVM equivalence creates biomimicry. And the claim that I very much believe that the crypto-economic network that exhibits biomimicry the most

• 20:56David Hoffman?

  will come to fill the voids because that is what nature is good at. Nature is good at filling voids. And you know what's got a lot of voids? The crypto industry, the whole thing. And so Ethereum is going to use biomimicry, it's going to use EVM equivalence to replicate and propagate all of its Layer 2s to fill every single void that can be filled. And so that is what's coming up next in the show, right after we get to some of these fantastic sponsors that make the show possible. Aave is the leading decentralized liquidity protocol. And now, Aave V3 is here. Aave V3 has powerful new features to enable you to get the most out of DeFi, including isolation mode, which allows for many more markets to be launched with more exotic collateral types. And also, efficiency mode, which allows for a higher loan-to-value ratios.

• 21:38David Hoffman?

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• 22:21David Hoffman?

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• 23:05David Hoffman?

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• 23:48David Hoffman?

  The CL Card is a crypto debit card that hooks right into the Ledger Live app, right next to all the DeFi apps and services that you're already used to doing, like swapping tokens and staking. So if you don't have a Ledger hardware wallet, go to ledger.com, grab a Ledger and take control over your crypto. "Horror Vacui: Nature Abhors a Vacuum," from Aristotle. Nature is really good at filling voids. The more evolutionarily fit an organism is, the more space it fills. Animals consume food and reproduce to the maximum extent the environment allows. All plants are expressions of fractals because fractals are algorithms that maximize surface area. Increased plant surface area adds to its ability to capture sunlight on its leaves and nutrients from its roots.

• 24:32David Hoffman?

  One of the most biodiverse areas in the world is the Amazon rainforest, where 2% of the light reaches the ground because the trees are so efficient at capturing sunlight. Here is the last mile problem defined. "The last mile problem is the last leg of a journey comprising the movement of people and goods from a transportation hub to a final destination. The last mile describes the difficult last part in the transportation of people and packages from hubs to final destinations. Some challenges of last mile delivery include minimizing costs, ensuring transparency, increasing efficiency, and improving infrastructure." Nature is really good at solving the last mile problem. This is a natural consequence of the survival of the fittest.

• 25:14David Hoffman?

  The organisms that can replicate and propagate the best come to fill the voids in which it lives. Even inside an individual organism, fractals are fundamental patterns for increasing scale and efficiency of the organism itself. Lungs are responsible for capturing oxygen and distributing it to the bloodstream, and the circulatory system is responsible for distributing this oxygen and other nutrients to the furthest reaches of the organism. For the podcast listeners, I have these images of hearts and lungs and they just look like trees and so does the entire circulatory system of the body and so do the neurons in your brain. Everything that needs to have bio... everything biological

• 25:53David Hoffman?

  has this fractal pattern because fractals are just efficient and the replication of DeFi app layers and EIPs across Layer 2s is what I'm getting at here. This easy replication, along with the low fees of the Layer 2, allow for this organic biomimicry. And if something has got biomimicry, you know it's going to work.

• 26:16David Hoffman?

  Fractals are structures in which each substrate has the same properties as the holistic structure. Fractals can be thought of never-ending patterns and the replicatability and reproducibility is what makes a fractal a fractal. Only structures that are replicatable and reproducible can efficiently fill the voids found in nature and crypto is one massive void. There is so much left to build. But in order to fill all this empty space with new structures, we need systems that can replicate and reproduce. EVM equivalence produces the foundation needed to produce these properties. With an EVM-equivalent roll-up ecosystem, EVM can replicate and reproduce at breakneck speeds, zeroing in on the desires of its users and updating its code to reflect those desires.

• 26:59David Hoffman?

  Every Layer 2 can progress in its own unique direction specializing on whatever it wants to specialize in. Successful Layer 2s that onboard many users and lots of value will signal to the other Layer 2s that it's discovered something of value. We all know that the crypto industry is really good at copying and replicating something once it's been proven to be useful. See the 2013 to 2015 proof-of-workfare-launch era, the YieldFarm copycatting of DeFi Summer in 2020, the L1 Geth forks of 2021, and if you are interested in the subject matter, please read my article "Coordination and Defection," it's another good one. As soon as a Layer 2 finds a new source of value, that source of value can be replicated and shared across the entire ecosystem and eventually brought back to the center of

• 27:42David Hoffman?

  the ecosystem. I have here a little ant who's got a bit of an apple and I have a funny little caption titled "David Attenborough Voice." This app developer has found some food. Watch as the EVM equivalence brings it back to the Layer 1 to be shared. This young developer is sure to receive infinite funding and a bunch of Twitter followers.

• 28:06David Hoffman?

  EIPs are the new genes. Richard Dawkins' book, The Selfish Gene, discovers how each gene of an organism is the smallest unit of life, and its inherent self-interest in its own preservation and replication offers the foundational pattern for which all life stands on. Good genes survive, and bad genes die. As organisms adapt and evolve, genes that enable the well-being of the organism are propagated via replication-reproduction across the entire species over time. Beneficial random mutations in an individual organism can help it survive and thrive better than the rest, and as a result, this gene goes from existing in not just one instance, but in existing in all possible instances because it was a good gene. In the world of modular Ethereum, EIPs are the new genes.

• 28:51David Hoffman?

  Good EIPs propagate, bad EIPs die. Ethereum is a responsive, adaptive system, and the EVM-equivalent rollups allow for genes to be implemented into the organism first at the margins, and then after the EIP proves its viability, it propagates outwards to the rest of the rollups. And if the EIP is good enough, it will make it back all the way to the beating heart of Ethereum, the Layer 1. Ethereum becomes an organism that can respond and adapt to its environment, even as the environment changes over time. Where biological organisms have their set of genes fixed from Genesis, Ethereum has the ability to invent and integrate new genes as needed in order to stay up to speed with the changing demands of the world.

• 29:33David Hoffman?

  Discovering the value in an EVM-equivalent paradigm turns that value into a public good that can be shared across the entirety of the Ethereum ecosystem, not just for that one specific Layer 2. Retroactive Public Goods: Building Infrastructure for the Entire Ecosystem Retroactive Public Goods funding will take Ethereum from a system that responds to its users to a system that can take proactive action. Optimism is pioneering a new model for funding public goods, one that injects Silicon Valley-type financial incentives into projects building public goods. They integrate the upside potential of a tech startup, but with public goods as the product.

• 30:15David Hoffman?

  Revenue generated from the Layer 2 block space feeds gets directed towards innovators and founders who build something useful for the optimism Layer 2. Retroactive Public Goods funding commits money towards the future, giving public goods builders the ability to build with assurances that there is money waiting for them if they build useful public goods. Here's a tweet from Optimism that talks about the purpose of the Optimism Collective that was announced yesterday. "If you produce strong public goods infrastructure for optimism, you increase the utility of the Layer 2, and this creates a useful economy to build on. As public demand for optimism block space goes up, this increases the amount of funding available for public goods, which creates further investment into more public goods,

• 30:58David Hoffman?

  which makes the optimism Layer 2 a nice place to live because of how much, how strong the public goods are." And there's a feedback loop here, this cycle continues. "Retroactive public goods funding takes Web 2 incentives but has Web 3 profits, and impact becomes profit. The combination of retroactive public goods funding and EVM equivalence means that when the optimism Layer 2 builds something useful, it becomes immediately available for the entire rest of the EVM equivalent ecosystem to use. Block space sales on optimism turns into infrastructure not just for the optimism Layer 2, but for all Layer 2s, and eventually Ethereum itself. Blockchain ecosystems are famous for under-investment into infrastructure and public goods."

• 31:42David Hoffman?

  This is a reference to one of Italic's articles, "The most scarce resource is legitimacy." The graph that is shown here illustrates how much money that these blockchains are spending on security versus how much they are spending on research and development. It's basically, or many, many, many orders of magnitude, you can barely see the research and development spending versus how much is spent on security. These are block rewards and fees, etc. "The 1-2 punch of retroactive public goods funding and EVM equivalence gives us the first promising path towards solving the tragedy of the commons, not just for optimism, not just for the Layer 2s, not just for Ethereum, but for the entire planet." And here's how this works. Step 1: Fund public goods on optimism.

• 32:23David Hoffman?

  Step 2: Expand these public goods for free to all other Layer 2s. Step 3: Integrate those public goods into Ethereum. And Step 4: Begin to expand the scope of the public goods that are built beyond Ethereum and into the world. Step 5: Solve global coordination failures and unlock a Star Trek future. There's an article I wrote on this called "How Transaction Ordering Can Save Humanity." I finished this up with a tweet. The coming Layer 2 tokens truly marks a new chapter for Ethereum. Optimism's livestream viewer count on Bankless was our second highest ever after Mark Cuban. The release of Layer 2 tokens will put attention back on the Layer 2s.

• 33:03David Hoffman?

  The combination of that and retroactive public goods funding will lead Ethereum into legitimacy, as Ethereum for the innovation of public goods funding is something that I think will be extremely appreciated by society. And meanwhile, Layer 222, L222, Layer 2 2022 will lead us right into the Ethereum merge. And so, it is time for Ethereum to shine. Thank you for listening. I really hope you enjoyed this piece. I really think it's going to be a foundational component of the rest of this year and moving forward as we expand this cryptoeconomic frontier. As always, Bankless Nation, ETH is risky, crypto is risky, DeFi is risky, and you can lose what you put in. But we are headed west. We're on the frontier.

• 33:47David Hoffman?

  It's not for everyone, but we are glad you are with us on the frontier. Hey, we hope you enjoyed the video. If you did, head over to Bankless HQ right now to develop your crypto investing skills and learn how to free yourself from banks and gain your financial independence. We recommend joining our daily newsletter, podcasts, and community as a Bankless Premium subscriber to get the most out of your Bankless experience. You'll get access to our market analysis, our alpha leaks, and exclusive content, and even the Bankless token for airdrops, raffles, and unlocks. If you're interested in crypto, the Bankless community is where you want to be. Click the link in the description to become a Bankless Premium subscriber today. Also, don't forget to subscribe to the channel for in-depth interviews with industry leaders,

• 34:32David Hoffman?

  Ask Me Anythings, and weekly rollups where we summarize the week in crypto and other fantastic content. Thanks everyone for watching and being on the journey as we build out the Bankless Nation.