Arbitrum Launches! Founders Steven Goldfeder & Harry Kalodner (SotN 9/7)

On August 31, 2021, Arbitrum went live on mainnet! This means it’s available to migrate funds and begin using the many DeFi apps that have already launched on the Layer 2 Rollup scaling solution. Harry Kalodner and Steven Goldfeder return to State of the Nation to discuss what this means for the crypto space. Gas Markets, onboarding directly to Layer 2, the user experience, and the march towards decentralization are all themes. Layer 2 Summer is still intact! ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/ 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ 🎖 CLAIM YOUR BADGE: https://newsletter.banklesshq.com/p/-guide-2-using-the-bankless-badge ------ BANKLESS SPONSOR TOOLS: 💰 GEMINI | FIAT & CRYPTO EXCHANGE https://bankless.cc/go-gemini 🔀 BALANCER | EXCHANGE & POOL ASSETS https://bankless.cc/balancer 👻 AAVE | LEND & BORROW ASSETS https://bankless.cc/aave 🦄 UNISWAP | DECENTRALIZED FUNDING http://bankless.cc/uniswap ------- 📣 SoRare | Collect and Play! https://bankless.cc/SoRare ------ Topics Covered: 0:00 Intro 8:00 Harry Kalodner & Steven Goldfeder 10:05 Arbitrum Shipped! 12:35 Prep… and then LAUNCH 18:35 The User Experience 25:05 Gas and Adoption 38:19 10x Data Capacity & Reddit 44:09 We Want Layer 2 to Win 49:42 How Arbitrum Attracts Liquidity 53:18 Decentralization and Values 1:01:00 Composability 1:04:30 Onboarding and NFTs 1:08:06 Mainnet and ETH 2 1:16:08 What’s Exciting 1:19:05 Closing & Disclaimers ----- 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 I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://newsletter.banklesshq.com/p/bankless-disclosures

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

• 0:07Ryan Sean Adams?

  Hey Bankless Nation, welcome to another episode of State of the Nation. We have Arbitrum back on. Why do we have Arbitrum on? Well, it's because they shipped. They shipped a Layer 2. It's here, it is available. Bunch of new exchanges on it. Uniswap, SushiSwap, Balancer.

• 0:21David Hoffman?

  I was told Layer 2 is never going to ship.

• 0:23Ryan Sean Adams?

  Hey, it's shipped, David. It's here. We just talked to them. So we've pre-recorded this episode, given holidays and given schedules in advance, and we are releasing it to you on YouTube now, also on the podcast. But David, why don't we talk about what we talked about? First of all, who do we have on?

• 0:40David Hoffman?

  We had Stephen Goldfeder and Harry Kalodner, the CEO and CTO of Arbitrum, the guys leading the Arbitrum team into actual mainnet, along with a whole host of brains behind them as well. And these guys really understand the deep core principles of rollups and Layer 2s. And that's why everyone's gets really excited about Arbitrum and why we were super excited to get them back on the show, to update us with Arbitrum now that they are live, now that they are actually live. So we asked a number of different questions, focused a lot on scalability and like the gas markets and how they are the same or different than Ethereum, and how they also adapt and evolve over time. Those were some of the biggest lessons I've had about learning about like L2 gas markets

• 1:24David Hoffman?

  and how it's going to look like in the future, as well as a number of other questions as well.

• 1:28Ryan Sean Adams?

  I think the reason this is also a really important question is because, you know, right now, there's this question in the market at least, whether another Layer 1 is going to supersede Ethereum, or whether Layer 1s are just competitive with Layer 2s, right? There's kind of this question. And we asked these questions of Arbitrum. Hey, like, how are you going to attract liquidity? And how are you going to solve composability problems? How are you competing with other Layer 1s that are competing maybe against the Ethereum ecosystem? That's some great answers. One thing that was cool, and we'll have to do sometime, David, is like, they have Reddit on board, dude. I still feel like this is such an under-reported story, like.

• 2:10Ryan Sean Adams?

  Reddit, 450 million users, right? What are the largest social media sites in the world? I'm a daily user of Reddit, maybe.

• 2:18David Hoffman?

  Someone should report on this. Someone should report on this.

• 2:21Ryan Sean Adams?

  Reddit should come on is what should happen. But apart from that, I mean, they picked Arbitrum is the bottom line. And the reason they picked it, we kind of got into it. Anyway, we talked about that. I think the bottom line here is they've cut the tape. You can, you can go through, you can access the theme park. You have many of the DeFi apps you know and love. Others are coming soon. So like AVE, Compound, these are coming in the future. You said DeFi in days. Another cool takeaway for me, David, is post-merge, right? There's still more exciting things to look forward to on Ethereum. The next big milestone will be data sharding. Guess what data sharding does? Massively decreases the cost of all rollups, right? That's something we got into too. So some neat discoveries in this conversation.

• 3:06Ryan Sean Adams?

  I think you as a listener, through watching this and through listening to this will be better positioned to make a decision on which of these solutions are going to win into the future. So we are going to get right to that conversation. But before we do, I got to ask the question I ask every single state of the nation, David, and that's what is the state of the nation today, sir?

• 3:26David Hoffman?

  Ryan, we are migrating. We are migrating on our way to the Arbitrum Layer 2. There is liquidity getting on boarded and then as soon as other applications that I'm a frequent user of like Compound and AVE come online to Arbitrum, I'm going over there, man. Like that's, yeah, I'm moving. I'm moving. Like I'm moving from Seattle, San Diego, and I'm moving from Ethereum to Arbitrum. We are migrating.

• 3:49Ryan Sean Adams?

  Yeah, absolutely, we are. Guys, also wanted to do a shout out to SoRare. SoRare is a fantastic fantasy sports NFT game that you can play. You can trade, you can collect, you can play fantasy sports with your friends. These guys are building on a rollup too, on top of Ethereum. This is the largest NFT Ethereum sports game that exists, absolutely massive in Europe as well. So in the US, we call it soccer, but of course our European listeners will be calling it football. And go check them out. Go get involved in what they're doing. Go collect, go trade. We'll include a link in the show notes. You can also go to sorare.com. That's S-O-R-A-R-E.com.

• 4:33David Hoffman?

  We all know exactly how just absolutely fanatic fantasy players are about their sports teams. And we also know that Ethereum is the new epicenter of culture. And now Ethereum is eating up all of the fantasy culture by making them tradable fun NFT games on Ethereum. So that just makes screams product of market fit to me.

• 4:51Ryan Sean Adams?

  Yep, absolutely, guys. A few other things going on in the Bankless community. So one is we just released our conversation with a former CFTC commissioner. So if you haven't caught that, this is Brian Quintez. He just resigned from his position as commissioner at the CFTC. So he gives us some candid thoughts, some of his personal thoughts. We just dropped that podcast yesterday, so on Monday. So go check that out. And in the future, David, we've got a big podcast coming out with Kathy Wood from Arc Investments. We're recording that this Friday. You'll get to hear it next Monday. I am super stoked about that conversation. Chris Berninski is going to be there, too. I don't think anyone's ever done a Chris Berninski plus Kathy Wood combo, but Bankless is about to do it.

• 5:36David Hoffman?

  Right. Yeah, no, that conversation, I just expect to blow people's brains and hopefully mine as well. So looking forward to recording that later in the week. Also, right on your podcast feed right now is the third episode of Layer Zero with none other than Justin Drake. And I'm just gonna leave that there because the conversation is so odd. Enough said. Like, Justin Drake's in your podcast feed. So like, go listen to it right after you're done listening to this. Don't work, don't play, don't talk to your partner, just listen to Bankless.

• 6:05Ryan Sean Adams?

  That's what we do, right? All right, guys, we are going to get to the guests in just a minute. But before we do, we want to thank the sponsors that made this episode possible.

• 6:15David Hoffman?

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• 6:59David Hoffman?

  Just look at the size of the Uniswap Treasury. It's almost $3 billion. This mountain of capital is looking for labor. Do you have something of value to contribute to the Uniswap DAO? No matter how big or small your idea is, you can apply for a UniGrant at unigrants.org and help steer Uniswap in the direction that you think it should go. That's exactly what we did to get Uniswap to be a sponsor for Bankless and you can do the same for your project. Thank you, Uniswap, for sponsoring Bankless. Balancer is a powerful platform for flexible automated market makers. Typical AMMs just have two tokens inside of one liquidity pool, which can lead to fractured liquidity across the many pairs in DeFi. With Balancer, you can access the full power of multiple tokens inside of one single AMM,

• 7:43David Hoffman?

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• 8:28David Hoffman?

  without sacrificing liquidity in the pool using Balancer's asset managers. Balancer's Vault architecture lets you trade between Balancer pools at a fraction of the cost versus trading on other platforms. Balancer's mission is to become the primary source of liquidity in DeFi by providing the most flexible and powerful platform for asset management and decentralized exchange. Dive into Balancer pools at app-balancer.fi.

• 8:54Ryan Sean Adams?

  Bankless Nation, we are super excited to have the Arbitrum team back on Bankless. Post-launch, they said they were going to launch in summer of 2021 and launched they did. It is still summer 2021. Guys, Stephen, Harry, congrats on the launch. Thanks so much for joining us.

• 9:13Speaker 02

  Thank you. Thank you so much for having us here. Yeah, we told you DeFi summer and you know, it's we got it. It's still summer. So we got in there.

• 9:19Ryan Sean Adams?

  It's still summer. So how are you guys feeling like post-launch? I mean, what's I it was launch week as we're recording this and launches don't always go well. How did this one go?

• 9:32Speaker 03

  Shockingly well. The the the biggest barrier to launch, and this is like a funny insider story, is we were planning on actually opening to users a couple hours earlier. And then Amazon had a significant outage and there were a few of our things running like there were a few like our like Block Explorer was like running our indexer was running on there and that went down and we were like, oh my God, we need to solve this.

• 9:56Speaker 02

  And we're like, should we just launch anyway? And then we were like, oh, he didn't tell you on 3pm. So no, we'll just.

• 10:03Ryan Sean Adams?

  Do you know, do you know, I wasn't sure like, so at what point in time did you guys commit to launching in August? In early August, is that when you committed? There was some commitment I saw on the Arbitrum Twitter and I was like biting my nails. I was like, oh, okay, it's getting toward the end of August. Are they going to be able to do it? You know, it's August 30th, no launch. Are they going to be able to do it? But you guys pulled it in, pulled it out of the hat, man. You just launched right at the last day and got this thing out there.

• 10:30Speaker 02

  Yeah, it was early August that we committed to to doing that. And it was clear to us that that we would get there. And yeah, ultimately, you know, we we we chose on the last day of August. But we were, you know, we were somewhat clear about that. I think we said in the post late August and Ed gave a talk at SmartCon that day and said, you should assume August 31st unless you unless we say it earlier. So we tried to at least set the expectations right there. But then it's also on a Tuesday and you know, we previously done launches on a Friday. And then like, you know, you go into the weekends, right? All right, let's do it on a Tuesday this time in case, you know.

• 11:04Speaker 02

  In case there's some delays, we're not like stealing people's weekends. So, um, uh, yeah, so things went fabulously smoothly, uh, and so far so good. Um, you know, usage has been, uh, going up. Um, a lot of value has been, uh, coming into the system. And I think overall, uh, the user sentiment, uh, from what we can tell has been, been pretty good. So we're super excited. Uh, this is the beginning, not the end, right? So there's, there's a lot more goodies to come, but I, you know, this was definitely, uh, a very important, uh, milestone for us.

• 11:32David Hoffman?

  Just so we can just go ahead here.

• 11:35Speaker 03

  I was gonna say the user feedback has just been, it's been so much fun, like reading about people having like good experiences using it. Like, you know, just like, you know, it was so easy to use.

• 11:46Speaker 03

  People are definitely still at the stage of being shocked about that, which is funny, given that that's been like our like core focus, but to see that, you know, we actually pulled it off. It's, it's pretty great.

• 11:55Speaker 02

  And I should say, uh, sorry. Uh, we should say that we have a new bridge UI coming next week. That's the one completely got that our, our bridge kind of looks like it's from 1995. Um, I can confirm that it's not from 1995. Um, but.

• 12:08Ryan Sean Adams?

  Okay, though. I mean, people have used Curve. Have you guys seen the Curve?

• 12:11Speaker 03

  Oh, yeah.

• 12:11Ryan Sean Adams?

  Interface?

• 12:12Speaker 03

  Yes.

• 12:12Ryan Sean Adams?

  I don't know what decade that's from, maybe the 1980s, but, um, yeah, we're used to these things in, in DeFi and, uh, as long as it works.

• 12:20Speaker 02

  Yeah, I think people have been very, you know, we have only gotten positive feedback on, on things working. And ultimately that's what we're trying to do, give users, uh, fast, uh, fast transactions, uh, cost savings and, um, really try to port the ecosystem. So excited that people are using it and building on it.

• 12:35David Hoffman?

  So we, we have a ton of questions that we want to get through, kind of a, a grab bag of just a bunch of different topics. But before we get there, I want to just ground our listener with some context. Uh, so can we talk about the, you know, the, the leading weeks and months that have come up to the actual launch? What was the roll up, uh, rollout plan? Like what have you guys been doing in the last few months to really prepare for this launch date?

• 12:58Speaker 02

  Yeah, great question. So, um, part of it was like social community and part of it was a technical, of course, um, and diligence. So, um, you know, there was a lot going into getting ready to do our.

• 13:13Speaker 02

  There was a lot going into getting ready to see our mainnet developer, our mainnet developer launch in May and a lot of, you know, getting the tech ready and making sure it was at a point of stability that we were ready for that. Then there was a lot of community organization and just giving people time. You know, we committed to a fair launch in which different teams would have enough time to to launch. Because the thing about DeFi and, you know, smart contracts in general, but specifically DeFi is it's all about the composability and the interaction. And having a system where sort of one app goes live at a time is it's not that useful. It's problematic because so many apps have dependencies on others. We really wanted to give, you know, everyone the ability to to set up as much as they could beforehand. And of

• 13:56Speaker 02

  course, we can't wait for everyone, but we tried to do that. And then, you know, we did, you know, some internal auditing, some external auditing during during this time, really to get, you know, more diligence and confidence and did some additional feature requests. We tried to, you know, limit new features coming in, but there's always some future creep and like, oh, we got to just got to do that before before we go out the door. So a bunch of that for sure. But definitely, it's part technical, part social coordination, and just giving people the ability to to launch and really trying to be fair and putting everyone in the same footing.

• 14:28David Hoffman?

  So we all know these systems build themselves from the bottom up, right? And so we need, we need that initial like bootstrapping flywheel phase to get launched. And I think all the users are like biting at the chomp or trumping, excuse me, chomping at the bit to get into Arbitrum. But of course, the things actually had to be there. So you guys needed to have some sort of like, you know, quiet period to allow the developers to get this, you know, the Arbitrum native DeFi flywheel going. So when it comes to actually launching, on a technical level, what does that mean? When we are like cutting the tape for the Arbitrum theme park, what is actually like different in the code that allows this to be launched? What is the launch?

• 15:09Speaker 03

  Yeah, I mean, that it was basically, well, it was two buttons.

• 15:16Ryan Sean Adams?

  What colors were they? A big red, big red button, the big green one.

• 15:21Speaker 03

  Because, you know, essentially, the only, the only difference in our system kind of over the past two months basically has been, has been the whitelist and we put in place basically that kind of had developer teams coming in. And so kind of we had, we had had the, you know, the, the, you know, it was really removing a feature was all we needed was, was, was the launch process. Since it was, we started without a whitelist because we had our test that we, we put this in place for main net so that we could kind of move a little slowly. As, as kind of Steven was describing, get sort of, you know, get, get, get DApps on boarded and kind of like help teams understand what they were doing. And then we just had to cut that back out.

• 15:58Ryan Sean Adams?

  So I understand, guys, there's some, some training wheels right now on the system as well, like some governors. What sort of governors are on the system currently and, and why are they there?

• 16:10Speaker 02

  Yeah, so right now there is a, a limit on the max transaction capacity in the system. That's one, one, one main limitation, the main limitation that we have. And the reason for that is really to just make sure the system stabilizes and, and watch it before, and watch it stabilize before sort of, you know, we really, really up usage and give us also some time to continue to improve and, you know, reduce, reduce, you know, improve performance and, and as time goes on. But the, those constraints were designed such that based on our, our, our projections of, of usage, no one will hit.

• 16:50Speaker 02

  And indeed, we're nowhere, or we're maybe 50x away from there. So we have, in the capacity we're seeing today. So we, we have significant capacity until those, any of those constraints are hit. They're just sort of an upper bound to stop some bot from trying to do something that, you know, a bit too crazy right now. But average usage, I think, won't go anywhere near there. But you know, the, the thing that we've committed to is, and the other part of this is, We still do maintain upgradability controls in the system and indeed, I know there are two scenarios in which we use them, one in which we plan to, one in which we don't plan to. The first one is to increase performance over time and increase scaling over time.

• 17:32Speaker 02

  We'll have at least some alpha here, we'll have an update going, going live quite soon that will reduce fee costs.

• 17:40Speaker 02

  You know, we do a nice fee reduction, cost and fee reduction. So that, that's the type of upgrade we plan on doing. And then there's a type of upgrade which we don't plan on doing, which would be to respond to any security incident, but of course, we feel like we, we need to have that upgradability in place for the time being. Until the system fully gets more, more, you know, running under runway under its belt and. Yeah, basically, we try to be very, very open and honest about that. And so the two things is we call our, our, our between one now in mainnet beta phase and we're committed. To only, it will stay in beta until those, until the system is fully decentralized. So that's a commitment number one from us and you know, we, we, we want everyone to know exactly the state of the system. We think it's a really, really at a great place, but.

• 18:22Speaker 02

  Ultimately, the, the goal is full decentralization for sure. And we will commit that to, to calling it a beta until we're there and we're confident that we'll get there over the coming months.

• 18:35Ryan Sean Adams?

  So Stephen, I want to give people a sense for what it's like to kind of enter the, the Arbitrum theme park, right? And so they're, they're in the mainnet Ethereum theme park right now. And now there's this, this sub, sub theme park called Arbitrum. That has just, you know, cut the tape and so users can enter and they enter through this token bridge. And you basically enter by moving some of your assets from Ethereum mainnet. To Arbitrum and you do it primarily through this bridge. Now we talked about in our past conversation, there will be all sorts of other bridges. In the future, all sorts of other ways to get into the theme park, but this is the main bridge, maybe the most decentralized bridge to and from Ethereum. So you transfer your ETH or you transfer your ERC 20.

• 19:18Ryan Sean Adams?

  And then once you're on the other side, basically, you, you in MetaMask or something, you just switch around your network. So rather than mainnet. Yeah, you switch your MetaMask wallet or your browser wallet. To read from the Arbitrum mainnet. And in this new theme park, we've got like many of the same rides. I was scrolling through this earlier. And I mean, these are all of our friends, our DeFi friends, right? We've got Uniswap, Sushi Swap, Balancer. They are all deployed there. I think many more are coming. Ave, I'm not sure if they're deployed there, but I'm looking forward to when they are. Except in this theme park with all of these similar friends. Everything's cheaper, right? So it used to cost $80 to use the Uniswap ride. And in Arbitrum, how much does it cost?

• 20:03Ryan Sean Adams?

  Maybe like $10 or something now, $5, something like that. Can you give us a sense for what the typical user experience is on the other side in terms of like fee savings and the rides that are available to them?

• 20:17Speaker 03

  Yeah, I mean, I think right now things are running at around, yeah, 10% of the cost of Ethereum, roughly speaking. I think that we're working on some optimizations in the pipeline that will get that down even more. But obviously, that's still a pretty nice improvement over using Ethereum, using the base layer today. So we wanted to sort of, you know, not, not hold things up just to make things more perfect. In terms of applications, it's, there's a lot live already. There's a lot more coming. No matter, and there's a lot of awesome teams working on this. No matter how, there's always like, you know, some last minute things that need to be done. So we were hoping that as many as possible people would be live, you know, when we went live.

• 20:59Speaker 03

  There are a lot of people who are going to be coming, you know, who are going to be coming live over the next week or two. As they kind of finish up their development process and fully ship. I'd say in terms of users, the most sort of, you know, the, the, the prices being cheaper are huge. But the other thing that's just so massive is, is the faster confirmation time. It is just that feeling of being able to click a button and getting the result of your transaction kind of within seconds as opposed to sort of what people are used to on mainnet, which is massively better with 1559. But it still takes some time.

• 21:35Speaker 03

  And so that's the other kind of big angle there.

• 21:38David Hoffman?

  One question I have is, I like to parse apart the differences between the Ethereum gas markets of which we're all used to. We generally all know things, utilities like GasNow, or going into EtherScan and seeing like that loading bar, which is an estimation. And, you know, we're all used to seeing GasBrite. We're all generally familiar with the gas markets on Ethereum and how that impacts gas price. Can you guys compare and contrast like gas markets on Arbitrum and how they might be the same or different with how people are used to transacting on Ethereum? And like, for example, like, how does the actual $10 for a Uniswap transfer, how does that number actually emerge? Like, how is that number decided?

• 22:17Speaker 03

  Yeah, absolutely. So, so most of the, you know, the, the costs are split up, kind of in using the system into a variety of different categories. But actually, right, most of the costs are actually the costs that are being paid in Ethereum fees. As a rollup, every transaction, every Arbitrum transaction gets posted to Ethereum. It's kind of only the data of the transaction, of course, not, not the execution. But we are paying, you know, and I don't, I don't, I'm not going to remember the exact number, but I think our sequencer has, has spent like 23 ETH already in gas fees on, on L1.

• 22:52David Hoffman?

  Does it make a transaction every single Ethereum block? Or how does that happen?

• 22:57Speaker 03

  Yeah. So, so it batches things up. So it will collect some number of Arbitrum transactions. And currently, kind of once every, once every six minutes-ish, it'll post onto, it'll post kind of a whole batch of transactions onto Ethereum. And, and, you know, there's kind of, there's an interesting kind of factor here, which is sort of the, the security model. And I like to be really clear on this. Until it's posted to Ethereum, you're still to some degree trusting the sequencer. But then six minutes later, or well, within six minutes, because it's posting, you know, whenever the next one is, now you're at basically full Ethereum security. And the upside of that is you get super fast confirmations and know exactly what the result of your transaction will be almost immediately.

• 23:44Ryan Sean Adams?

  Do you kind of see that in the user interface when you're making transactions? Like the like the you know, state of a confirmation and how secure it is and how it evolves?

• 23:54Speaker 03

  So we're still working on on kind of on figuring out a way that we can display that. There's a problem, which is basically right now, all of our effort has gone to sort of, how do we make Arbitrum fit into existing Ethereum tooling? We haven't had the like the the pull to, you know, let's say, have have MetaMask change its its UI to to reflect these things, which, you know, I think, you know, the the hope is definitely that, you know, we'll we will, you know, get there sooner rather than later. So for now, it's relatively hard and we try to communicate it and write about it. And for your average user who's transacting at small value, it doesn't really matter.

• 24:36Speaker 03

  For for kind of, you know, for for people like liquidity providers and and for people like, you know, especially for for a number of teams we're working on, who are going to be providing these fast bridges for moving liquidity back and forth. Those are the teams that we've kind of like talked through a lot, kind of these various sort of security model questions, since they're the ones especially who kind of would take, who will kind of be be most kind of deep into that and and, you know, take a lot of the the risk on and and make decisions about what they want to do there.

• 25:04Ryan Sean Adams?

  Do you know, big picture, so Harry, you said Arbitrum so far has maybe burnt like, you know, or 25 ETH or so. And I like, I I wonder how long it will be. I'm showing the ultrasound dot money leaderboard, the ETH burn leaderboard. I wonder how long it'll be until most of these leaderboard candidates are actually layer twos. Right? I mean, because this is what we're talking about. This is the the scalability roadmap for not just Arbitrum, but all of Ethereum. You might like start your entire life as a user on a layer two and live there the entire time. But, you know, settle ultimately on top of Ethereum mainnet. I'm curious what you guys think.

• 25:47Ryan Sean Adams?

  How long do you think that'll be before some layer two, maybe Arbitrum, starts to rise up the charts in this burn leaderboard?

• 25:56Speaker 03

  That's a great question. I would, I would say definitely before the end of the year.

• 26:01David Hoffman?

  Wow. Wow. In the, in the all time leaderboard?

• 26:06Speaker 03

  Well, I mean, this is, this is, um.

• 26:08Ryan Sean Adams?

  This is 24 hours.

• 26:09David Hoffman?

  Yeah, 24 hours. Okay.

• 26:10Ryan Sean Adams?

  They could do a 24 hour leaderboard.

• 26:12David Hoffman?

  Okay.

• 26:14Speaker 03

  Not the all time.

• 26:16Speaker 02

  Give us some time to catch up.

• 26:19David Hoffman?

  Catch up to the NFTs. They're going pretty fast.

• 26:22Speaker 03

  I think within a 24 hour period of time, there will be L2s who are by far the, the biggest gas guzzlers. Particularly as like a bunch of, you know, the NFT action migrates on to, onto layer twos as, as, you know, I think a lot of people are, are excited for.

• 26:37David Hoffman?

  Oh, yeah. Interesting. All of these apps that we see burning a lot of ether, they probably have the incentives to move on to layer twos the most, which would just like, you know, take all of their ETH burning, A, reduce it by putting it on an L2, but then also have it under the L2 umbrella of ETH burning. Oh, that, that's interesting.

• 26:53Speaker 03

  Absolutely. And like, you know, just, just like, you know, quick, quick glance, a number of those, you know, a number of those burners are already launched on, on Arbitrum.

• 27:02Speaker 02

  And then we'll have to have like the second level leaderboards like, okay, so Arbitrum is burning all this ETH, but who's actually responsible for burning all this ETH on Arbitrum? So then you might see a leaderboard that looks.

• 27:11Ryan Sean Adams?

  Yeah, we're definitely going to have nested leaderboards here.

• 27:14David Hoffman?

  I want to, I want to go back and, and finish the conversation about how gas fees are actually determined on, on Arbitrum. On Ethereum, it's just a function of like how much block space demand. How is, and you know, obviously more demand makes, you know, the gas fees go up. How, does that work one to one with Arbitrum? Or are there any other details that we need to talk about?

• 27:33Speaker 03

  Yeah, sorry. I guess we ended up getting a little off topic in the.

• 27:37David Hoffman?

  No worries. It was, it was all good. It was all good combo.

• 27:41Speaker 03

  Yeah. So basically kind of I started by saying kind of the, the mean component right now is L1 costs because basically the system is not congested. There's pretty, there's plenty of capacity in L2. We're nowhere near sort of the limit of how much the L2 can do. But there's always going to be this sort of base costs that isn't, you know, even if one person is using the system, you're, you're still, that, that person is going to have to pay for their costs in layer one. The thing that could happen and, and you know, will, will happen at some point, um, as it does on every chain, um, but certainly we're nowhere close to yet is, is congestion in layer two is the kind of the actual L2 capacity, um, hitting its limit. And at that point, basically, there will be sort of similar to Ethereum.

• 28:24Speaker 03

  And we took a lot of inspiration from 1559, a gas market that kind of where we're kind of, it will, you know, the people who are, you know, the people who value the block space most will be the ones who get it, which we'd love to have room for everybody. We hope we can stay ahead of the curve in terms of expanding our capacity. But if we don't, that's what will happen.

• 28:51David Hoffman?

  So when you guys deploy a transaction to the Ethereum main chain every six minutes, sometimes the Ethereum main chain is extremely congested. So that actually turns, could turn into a, an expensive operation to deploy those transactions every six minutes. How are those fees paid? And how are the size of Ethereum L1 fees related to the users who are paying gas fees on Arbitrum? Are those two things connected?

• 29:14Speaker 03

  Yeah, a little indirectly, but yes, I should, I should say there's a caveat to my every six minutes thing, which is if the sequencer, the sequencer is smart enough that if it sees a spike in gas prices, it will wait a little longer to post its next batch to see if the price goes down, which we added in after we ended up paying for some very expensive batches.

• 29:36David Hoffman?

  And EIP 1559 helps with that, right? Are you guys like actually tapping into EIP 1559 as a gas oracle?

• 29:44Speaker 03

  Yeah, we were absolutely using it. We're going to be using it more for kind of to improve the L2 gas oracle. We're already using it for the sequencer itself. But it's helped. And if you look at the graph, it helps a lot, but we still had a day where the, where the base fee was at like 2,000 Gua for a little bit there. So it's massively smoothed it out, but it's still kind of bumpy.

• 30:08David Hoffman?

  Okay, there are so many things to talk about and like, we're going down all these little micro rabbit holes all at once. But, but let's go back to the question of how does a gas fee for an L1 deployment connect to a user paid fee for just a normal unit swap transaction on Arbitrum?

• 30:22Speaker 03

  Absolutely. So, so kind of the general, the general idea is there's kind of these various components and kind of there's a view that the Arbitrum chain. Has of the Ethereum gas price that it sort of, you know, tries to regularly update. And then it uses that when evaluating the costs. So it's not sort of exactly one to one. Um, we see come in essentially, for example, how much call data was your transaction? From that, we can infer how much did the sequencer have to pay to post your transaction in terms of the call data? Um, and from that, um, we can then kind of figure out how much we, we should charge you. There's, there's a kind of an interesting little, and I'll go down, you know, this is, this is a bit of a nerdy technical digression, but it's kind of interesting.

• 31:05Speaker 03

  Um, we can't actually use the price, the gas price on the chain when the sequencer batch is posted in order to charge you. Um, that doesn't work. And there's a very simple reason for that, actually, which is that you're getting your finality very quickly. We have to be able to tell you exactly how much your transaction costs within seconds, but it's not going to actually be posted for, for minutes. And so we have to essentially make our kind of best approximation guess as, as to how much it'll cost you. Um, and then sort of apply it, um, when you actually make the transaction. And the way we kind of deal with that is we basically cost average a little bit. And so we have it set up so that on average, kind of the cost will be fully paid.

• 31:47Speaker 03

  You might pay a little more or a little less than the sequencer did when it posted your transaction. But on average, you'll, you'll be kind of better off because it'll sort of regulate how much you might need to pay.

• 31:58David Hoffman?

  And this is all made relatively much easier in the fact that you guys use Ether to pay for gas on Arbitrum. And then also Ether is needed to pay for gas on Ethereum, so that efficiency is there.

• 32:08Speaker 03

  Oh, absolutely. Yeah. I mean, essentially, so you're, you're, and we're collecting fees in L2. We're not collecting fees in L1. Um, so the fee, the portion of the, the, the fees you pay when you make an Arbitrum transaction are kind of split up. And only a portion of them goes to the sequencer. That, that's kind of to pay for the sequencer's costs. Those kind of accumulate to the sequencer in layer two. Uh, you know, as kind of, you know, and will show up as, you know, liquidity in the system essentially. Um, and then this, and then kind of our plan there, although we haven't actually done it for the first time yet, but our plan there is then basically to automate the sequencer basically withdrawing periodically. So once a day it withdraws all the fees that it's collected in L2 back to L1. And then a week later, it will be able to sort of roll that into the funds it uses to, uh, to pay for posting users' transactions.

• 32:53David Hoffman?

  Okay, just a few more questions on this thread. When so when the Arbitrum L2 makes a transaction to Ethereum, it costs money. When there are more users on Arbitrum and there are more people to spread that L1 transaction cost across, does that actually reduce the cost on a per user basis? If there are more users?

• 33:16Speaker 03

  Yeah, so there's kind of there's there's there's there's fixed costs and there's variable costs, right? So the call data of your transaction is is a fixed cost. So that, you know, there's some number of bytes of data that are kind of that describe your transaction, that's fixed. There's also kind of, sorry, that's that's that's kind of very, that's based on your transaction. There are also other costs which are kind of flat per batch and fairly significant costs. And so we have kind of this extra and basically the way we're handling that is that that's divided over kind of all of the users who have transactions in their batch. And that's just overhead. So the more users we have, the more we can just sort of divide that over the users until it becomes completely negligible. So there'll be some savings.

• 34:00Speaker 03

  There is sort of this whole component which kind of won't be reduced because it is just you specifically, but it will definitely go down.

• 34:07David Hoffman?

  So keeping going, keeping on in this whole gas markets conversation, where can you guys, I like to think of things visually. So I'm thinking of a loading bar with like optimum or excuse me, Arbitrum somewhere on this, the, you know, full saturation of the maximum capacity that it could ever have. Where is it on that spectrum from on a zero to 100 level? Like, where is it when in terms of like its actual ceiling of a throughput? Is that like 20% maximum capacity, 40% maximum capacity? I know you guys have it throttled at the very genesis. Like, is that is that even the right frame of mind? And where is it?

• 34:42Speaker 03

  Yeah, wait, so just to sorry, just to clarify, there's like, there's, there's three numbers here. There's like, how much we're how much we're actually getting right now, what the limit is right now, or and what like the theoretical max limit is? Which of those were you?

• 34:55David Hoffman?

  All of them. I want all of them. Yeah.

• 34:57Ryan Sean Adams?

  I also want all of them.

• 35:01Speaker 03

  Yeah, yeah. So I think, you know, so in terms of, you know, the, the, you know, to start with, you know, the, the actual theoretical limit, we don't even know, we know what like are, we know where our current version of our software maxes out and it maxes out around, I think. I think we could theoretically, if we wanted to, if we were not really too concerned about state float, run probably with about 10x the capacity with the software today. And that's without sort of a whole bunch of pipelines of optimizations that we have planned over the next kind of months that will that will significantly improve there.

• 35:38Ryan Sean Adams?

  10x the capacity, what's that in reference to?

• 35:40Speaker 03

  Yeah, so that's like, Arbitrum doesn't use, has kind of its own type of gas that we call arb gas, just to distinguish it between from regular Ethereum gas.

• 35:53Ryan Sean Adams?

  And it's never metric.

• 35:54Speaker 03

  Yeah, similar idea, but yeah. And so that's kind of the main thing that we think about in terms of kind of scaling. And that kind of encompasses the computation and the state costs. And kind of the way we have it configured right now, because we wanted to be relatively conservative, is to target handling about an Ethereum's worth of traffic.

• 36:16Ryan Sean Adams?

  So right now, Harry, it's about an Ethereum's worth of traffic. And you're saying maybe the maximum is about 10x that. So it'd be 10x current day Ethereum's traffic.

• 36:28Speaker 03

  And that's in terms of, you know, so there's a lot of, you know, that 10x would be kind of, there's a lot of considerations here. There's like, how expensive and hard do we want to make it to run a node? The more we increase that limit, the harder it is to run a node. And there's sort of, you know, an open discussion here and a set of trade offs as to, you know, on one extreme side, you have Ethereum where it's like, you know, we should be able to run on Raspberry Pis. On the other side, and I wish I had a better example than this, but I'll just use this example. On the other side, we have EOS with the, you know, 21 master nodes and data centers. We're targeting, you know, somewhere in between those two. I think more on the Ethereum side than the EOS side. But there's, but that's kind of, you know, where one chunk of wiggle room

• 37:09Speaker 03

  is. And the other chunk is just, I think there's a massive amount of sort of optimizing we have planned. And that chunk, by the way, is the is sort of the 10x. That's the 10x. Like, if we wanted to become EOS, we could do 10x today. We don't want that. The other side is basically optimizations. This is our initial, this is our, there's so many different things.

• 37:29Speaker 02

  What we have on our list of to do's that will decrease, that will increase capacity and decrease costs. And we've had to aggressively slash the to do list in order to ship something. Which I think is an important lesson for anybody trying to ship. You can't have everything. And I think, you know, one of the, you know, one of the kind of ways we're going to be able to take advantage of the fact that we're kind of in the short term retaining this upgradability. Is in being able to kind of provide these improvements. Oh, and I should just say on the, just to finish out the, the rest of that question. In terms of actual capacity, I think right now, I think we peaked at around 5%. And that was kind of at the peak when it was kind of everybody jumping in.

• 38:09Speaker 02

  So, you know, even with, with kind of the targeted one Ethereum worth of capacity right now, I think that we have kind of a pretty good amount of headroom. Before kind of users need to think about congestion.

• 38:19Ryan Sean Adams?

  One last question on capacity, right? This is all for Arbitrum one.

• 38:23Speaker 02

  Yes.

• 38:24Ryan Sean Adams?

  Which is one of possibly many different Arbitrums. We talked about this in our, in our June conversation. That in the future, there might not just be Arbitrum, like there'll, there'll be Arbitrum two and Arbitrum three and all of these different Arbitrum universes. Is that for every universe, another potentially 10x if you decided to, to grow like EOS?

• 38:47Ryan Sean Adams?

  Or are we talking, or am I not speaking, like, am I not phrasing that correctly?

• 38:52Speaker 02

  No, you, so you, I think you're, you're phrasing exactly right. And the thing is, so there, there are two different things at play here. There's the question of, there's one way to think about this is imagine that like the entire Ethereum, all it was doing was like supporting Arbitrum traffic. Right? That everything was on L2 and all, like Ethereum's entire capacity was, was like Arbitrum traffic. So then what could we get? And well, then, then there are two. So the constraints that Harry gave you is what we're comfortable running in a single, in a single rollup. What we know performance wise, sync wise, because even if you could do like 10s of thousands of transactions per second. You wouldn't want those in one rollup because then the, you know, the, the cost of running the infrastructure that in the, the state growth would be unmanageable.

• 39:32Speaker 02

  But when you, so you could use, you know, the, so the Ethereum traffic, you wouldn't use it all for one rollup, but you could have. Multiple deployments of rollups, each which get the security of Ethereum because they know they're rollups and they put posted data on Ethereum. And each one of them has this level of capacity independently. So there is some fixed band, fixed limit based on, you know, the amount of data you could post to Ethereum. But like even this 10x number is nowhere near that. So we have like, uh, you know, way, way, way, you know, a ton of room to run, uh, multiple rollups. And indeed, we're seeing like the first instance of this right now. It's on test net, but Reddit's running an arbitrary rollup on test net. And that's going to be a completely separate, um, completely separate rollup, right? And these two things, they'll each have the same capacity.

• 40:14Speaker 02

  And they'll just be completely separate and both and you could do a third and a fourth and a fifth too, if you wanted to. They won't compose with each other, but they'll both, they'll all be rollups and compose with everything in their, in their, in their ecosystem.

• 40:24Ryan Sean Adams?

  Steven, since you brought it up, I, I gotta ask right now, uh, any spoilers you can give us with what Reddit's up to? Because they, they, they posted that they were selecting Arbitrum, which is absolutely huge news. They did so. Because, um, they, they, they said they wanted a decentralized and open solution, which is like Bravo Reddit for actually like figuring this out. A, any hints you can give us on what those guys are up to?

• 40:48Speaker 02

  So, uh, you know, I think we've been working with them for a long time and they have a really, really fantastic team, like an incredible team. And, um, I think they have a lot, a, a, you know, a lot of really good things to come. And I know they're just starting on test net and they're, uh, and they have, I think some really good plans coming, but I don't want to, uh, I don't want to, um, uh, the truth is, you know, we, uh, on the one hand, like we coordinated them on the tech, on tech, technically. Um, and I don't definitely don't know all their plans and what they're planning on doing on their rollup chain. And, um, I know, I think, um, um, I don't want to speak for them, uh, unfortunately on that, but I, I would say that, you know, we're very excited to work with them. And, you know, we were coordinating closely with them and they're really a fantastic team. And I think we'll see excellent things, uh, come out of that team because number one, they have

• 41:30Speaker 02

  like a world-class team and number two, like they get it, right? They, yeah, this is Reddit, but they get that they want to be an Ethereum. They want to use a rollup and, you know, they understand the trade-offs and, and they, they, uh, um, they, they're really just, uh, a really, really, uh, incredibly impressive team.

• 41:46Ryan Sean Adams?

  Well, I think the entire community is excited. You gotta tell them to stop by Bankless, uh, and tell us more about it sometime.

• 41:52Speaker 02

  I'll let them know.

• 41:53David Hoffman?

  One last question on the dynamics of the scalability side of Arbitrum, and then we can go on to other subjects. Say in a maximally successful version of an Arbitrum rollup, you guys are hitting the max capacity on the block space, the fee market emerges, fees start to get collected on the layer two, and there's a lot of economic energy. Could, in theory, you increase the frequency that you deploy a transaction to Ethereum? Maybe you go from six minutes down to three minutes? Is this a parameter that can be adjusted? And what are the properties that would make that a rational choice to tinker with that number?

• 42:30Speaker 03

  Absolutely. I mean, and again, to get like, to throw this slightly technical, the sequencer has a target for how much gas it'll spend per batch. And currently, if it doesn't hit that target after six minutes, or it might be seven minutes, it posts the batch, because it doesn't want to keep it in this sort of less-than-fully-secure state for very long. If it hits that target sooner, it'll just post its batch immediately. So we could easily get into the point where, I think, as usage picks up, it'll start to be, it'll be every three minutes, then every two minutes. At some point, we're going to get down to every block or every other block, potentially.

• 43:09Speaker 02

  And we could do every block now, but then you'd have the opposite part of this problem, because there's not that much usage right now. It's the few transactions in that block would pay the entire overhead. And that's the needle you want to thread here. That's why we're doing this six-minute thing now, because it gets enough transactions at current volume to make the overhead relatively low, and you don't pay most of that in your transaction. Because remember, we're posting data to Ethereum, and there's a minimal, we have significant overhead on the batch side. But even if you just think about, like, 21,000 gas, the minimal Ethereum base, the Ethereum minimum, like, if there was only one transaction, we were posting every block, then your transaction would now have an overhead of that price.

• 43:54Speaker 02

  So obviously, users don't want that. So we think six minutes, it still gives you a pretty quick finality, but that will only go down over time as the transaction volumes increase, and there's more users available immediately to advertise the batch cost.

• 44:10David Hoffman?

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• 45:40David Hoffman?

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• 46:24David Hoffman?

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• 46:35Ryan Sean Adams?

  So guys, you have shipped something really cool. Folks can use it. More apps will be deployed on it over time. There's about 25 million in liquidity. We're recording this a little bit early, folks. You guys will see this Tuesday.

• 46:47Speaker 02

  We're getting a little over 50 now.

• 46:49Ryan Sean Adams?

  Okay, so over 50 now, which is super awesome and impressive. It's growing very fast. Let's have this conversation because I want to be real with you guys for a minute, right? So Bankless has a dog in this fight.

• 47:05David Hoffman?

  Here we go.

• 47:06Ryan Sean Adams?

  Here's what I mean, okay? We want Layer 2 to win, right? Because we want the most bankless, most decentralized financial system to win, right? It's, we do not want Binance Chain to take all the quote-unquote "DeFi" from the ecosystem. I know you guys don't want to disparage Binance Chain or anybody else, that those aren't your words. There are words, like legitimately. We want Layer 2 to win. We want the Ethereum ecosystem to thrive. We think decentralization matters. The ability to run your own node in Ethereum is important. But here's the problem. Ethereum is kind of a victim of

• 47:48Ryan Sean Adams?

  its own success, right? So particularly in bull markets. No one complains about this during bear markets, but in bull markets, we're in an NFT mania. You know, gas fees, you know, 200 Gwei, 300 Gwei. It's expensive to do things on Ethereum because everyone wants to do it at the exact same time, okay? So now we have Layer 2 that has been long, long-promised, and now it's actually here. You guys have built it, you guys have shipped it, we've got real apps. That's awesome. Now I want to have a conversation about how Layer 2 wins, how specifically Arbitrum wins against the more high-throughput centralized...

• 48:30David Hoffman?

  Values compromised.

• 48:32Ryan Sean Adams?

  Values compromised, we would say, ETH killers that are out there, right? And so like, nothing against them. This is not a... This is not a fixed pie. I think their success will also breed Ethereum's success will also breed Layer 2's success. So I don't want to couch this as like a, you know, fixed pie kind of zero sum game because it's not. Everybody does end up winning, but what we hope wins is decentralized values. And I think Layer 2 represents that. You guys have taken the time. It's freaking hard. I mean, how long you guys been working on this? Six years? Something like that? It's hard to get to where you you've gotten today, but now we're here. Now I want to have a conversation about how Arbitrum wins, how Layer 2 wins.

• 49:15Ryan Sean Adams?

  And here's what you guys need. So let's talk about liquidity first. All right. So all of these other Layer 1 chains right now, they have these massive liquidity programs going on. Okay, so they are paying users to come to their theme park, right? It's very easy, right? Like, here's our theme park. We've got these rides. And everyone who enters gets 20 bucks, right? That's going to attract crowds. All right. So we've got maybe that problem first. How does Arbitrum attract the liquidity that it needs? It doesn't have a liquidity incentivization program now. I don't know if it will in the future. I don't know if you can comment on that, but let's let's dice apart this liquidity question first. Steven, what do you think?

• 49:58Speaker 02

  So I remember when I came on last time, I told you, well, I don't want to be saying any specifics, but I know that there are some application layer teams that are planning on doing liquidity mining. And a bunch of those have actually gone live already. I know Sushi Swaps doing liquidity mining on Arbitrum. I know Dodo is doing a big liquidity mining program. I think Swapper is doing one, and there are probably more of those are the ones at least that I that I'm aware of over the past few days, and there are more to come that I'm aware of as well. So I think the application level liquidity programs are important. And that's what we have on Ethereum as well, you know, different projects on liquidity mining on Ethereum, of course. And so I do think we can kind of compete there for sure. We've seen liquidity, you know, pour into the system, and we know that there's a lot, lot more of these programs to come.

• 50:43Speaker 02

  And, you know, we, I think we're actually very, very happy with the trajectory of liquidity coming to the system. It's been super fast and, but like, you know,

• 50:54Speaker 02

  You know, we want it to happen gradually. So I am is gradually, you know, I guess, you know, fifty million dollars in in three days is is is fast enough for us right now. And I think it will ramp up over time, particularly with these programs. And and in terms of like the more general, though, the values, I think, are what are important. And that's why we're doing this, you know, we could have just not done this and cloned Ethereum and just change a few parameters and boom, you have, you know, hey, we can call AWS a blockchain if you wanted to, and you have a really big. But that's not what we believe in. And I think ultimately, the values, the values will win, but I think it also has to do with the fault leadership a lot, right?

• 51:33Speaker 02

  Because a user coming coming in that doesn't have a background, like this is day one for them in crypto, they don't really understand the difference. And they what they do understand those fees, right? So they see I'm paying a low fee here, a high fee here, and they don't understand the fees. But the people that like are actually building this vision and or admitting crypto a little longer. So the the, you know, the project leaders and and the builders, most of them do understand this. And, you know, the thing we know about Ethereum is that the community is stronger than any we've we've been a part of ever in any, but it's it's it's a super, super strong Ethereum community. And yeah, definitely, the, you know, the strongest community in crypto, I'm probably going to upset a lot of people by saying that Bitcoin Maxies that watch, I guess they're.

• 52:15Speaker 02

  But, you know, we we think it's an incredibly strong, strong community, and the values really, really shine through. And it's a philosophical movement. And ultimately, though, there have to be the thought leaders that that not like are dictators on these values, but but kind of are in the sense that they they won't compromise and won't go to other places. And and and number two is a really education, explaining what these values are, what we're doing here and what the risks are. And hey, if we if we, you know, call AWS a blockchain, we're back to where we started, and we haven't really accomplished anything. So I I think that that's going and and and the the good thing is that there are so many people that have these values. And it's such a strong community, and and we see those playing out, and and that's what we're playing into. But but ultimately, I think, you know,

• 52:56Speaker 02

  the thought leaders have a very, very important educational mission here. And but the liquidity, I think, you know, the incentives on our return, I think, will have already, we've already seen some, and they'll continue to compete with with, I think, other other chains. And again, we've just been impressed by the by the adoption we've seen just in, you know, we're only three days old, and it's it's been pretty.

• 53:18Ryan Sean Adams?

  You know what people tell me, sort of the skeptics tell us is like, users don't care about decentralization, right? And like, I wanted your take on that. And that may, that may be true for a subset of users, or even for, for many users, right? And they do definitely care about gas fees. And I understand that. But I also think there are different classes of users. When people say users, who are they talking about? Right? So Reddit is a user, for example. And that's why it was so fantastic to see Reddit make the choice that it did, but also state the reasons it did. If, if people haven't seen that Reddit post, we'll, we'll include a link in the show notes. So you can look at why they selected Arbitrum.

• 53:59Ryan Sean Adams?

  And it was decentralization. It was decentralized values. So I'm, I'm curious, your take on this. The noise of liquidity, right? Anyone can incent, I guess, liquidity by like pushing a token out there and giving people free money and then, you know, traffic will, will come. But are you seeing that builders, that class of users are preferring decentralization? Is that a thesis that's going to, to hold true? Or do you think Reddit is kind of a one-off? Yeah. What do you think, Stephen?

• 54:30Speaker 02

  I, I think it holds true. I think, not to name other chains, but you mentioned one. A lot of the projects that we see are on other chains are more derivative of what happens on Ethereum. A lot of the, the users that are builders are really, the innova-, most of the innovation that we see happens, happens on Ethereum. And, and that's important because you really want that. You want the, the innovator's product because often, you know, we've seen this in so, so many times. Someone copies something and, oh, they didn't get that critical fix and it's buggy and dangerous to use because they missed something kind of important. So I do think, yeah, tho- that, that class of users is absolutely on Ethereum and basically almost exclusively on Ethereum. And the other way I like to frame this whole thing, and this is something I've been saying for a long

• 55:15Speaker 02

  time, the way I view Arbitrum is basically a common denominator. So there are those users that care about security and, you know, we're among those and decentralization. And there are those users that care about costs. And you can You know Arbitrum is a place, you know, in my opinion, where all those users can come together and say, we're not, you know, we don't have the cost of BSC, right? We're not, we're not, or, or whatever. We don't have, you know, the cost of a sidechain. But it's much, much lower than Ethereum and it's affordable and the cost will go down over time. That's number one. But we do maintain the, you know, the security derived from Ethereum. So it's a common denominator. And why is the common denominator important? Why do I care where you go? Why do I care to be in the same place? And that's because

• 56:00Speaker 02

  the magic in this ecosystem, the magic in DeFi is really about composability. And we're much, much, much better off if there's, you know, concentrated liquidity and the DeFi apps are in one location. So, hey, I might say, you know, I don't really care. I can just run my own chain. I'll, I'll, I'll call that secure and that's good enough for me and the fees will be super cheap. But I actually want to be with you also on the same chain. So, and you have users with different values and that's where the common denominator comes in for. And we think, you know, we've hit a sweet spot where we can make those who are fee sensitive happy and make those who are security sensitive happy and also of course,

• 56:35Speaker 02

  you know, invite and be a part of the Ethereum community as we do this.

• 56:39David Hoffman?

  One thing that I really enjoy about the Ethereum community and Stephen, you touched on this is that the values of like technologies will attract a certain set of users, right? And these are the users that do care to run their own nodes and do care about decentralization. Yet the scaling that those values of the whole entire world is probably not going to happen. People want to not experience Ethereum and have Ethereum and all of us L2s be in the background. And so for those people, in my mind, they are going to respond to incentives. And you talked about the liquidity mining incentives of all of the apps on Arbitrum and that's, that's going to work out decently well. But we are going up against Avalanche, which has $180 million war chest for liquidity mining incentives.

• 57:21David Hoffman?

  And then Phantom just rolled out a $300 million war chest for the same sort of incentives, right? And, you know, we all know people respond to incentives.

• 57:29Ryan Sean Adams?

  This is, this is David naming names, not you guys, by the way.

• 57:33David Hoffman?

  David's naming names here. These are just facts. These are war chests that they have to incentivize users, right? And they have these war chests because they have their own native token, which establishes their own treasury. So my question to you guys is like, are you guys going to have like a native token to establish some sort of treasury to do some yield farming? Like is this, or what about all these yield farming opportunities that we have on L2s? Is this something that you guys have in your roadmap?

• 57:58Speaker 02

  So right now, what we've launched is we've launched with fees, but what I can say is the fee revenue is such that, you know, paid and even course, but it's such that it's designed not only to, you know, reimburse us and keep the company going, but also also enough to, you know, share with validators that we've discussed very openly. And we have some good validators coming on board that will be getting that fee revenue. And I personally think that if, you know, if, if, if the fee revenue grows to a point

• 58:30Speaker 02

  where I think it's going to grow, that, that we'll have

• 58:35Speaker 02

  significant war chest as well to, to, you know, share with people in the ecosystem. So I don't know exactly, you know, obviously, you know, we, we, we focus very, very much on the tech. And that's where we started right now. We put out a product and we're happy with the adoption of, but, and, and, you know, we have to watch, watch, watch, watch how these fees collect over time. But one thing which I can tell you what we don't plan to do is we don't plan to just say, all right, you know, this is our fee revenue. We plan on, on reinvesting that in the ecosystem and, and our projections are that, you know, over time, this will be significant and it will, it will give, it will give us an edge. So I don't know, you know, we haven't committed to any exact mechanism or exact process of how that's going to work.

• 59:18Speaker 02

  But I think we're, we're very, very sensitive to it for sure. And, but ultimately Arbitrum is a community project. And when we say it's fully decentralized, we mean that, you know, that, you know, that's not to say that we obviously don't benefit from it. And we won't be, we won't be taking a fee revenue from it, but it won't be exclusively asked by any chance, by any point. And we will, I think, have significant resources to reinvest in the ecosystem. I think resources, you know, as significant as some of those numbers that you, that you mentioned or more. So right now, we're not really feeling the pressure to do that only because liquidity is flowing in. There's a lot of excitement. People are sort of, you know, checking out the theme park, walking around, looking at the rides going on them.

• 59:59Speaker 02

  But, but, you know, there may come a point where, where, where, like you said, incentives talk to people. And I think we will have a good way, you know, we're thinking a lot about that right now. And, and I don't think that we'll be left in the cold.

• 1:00:14Ryan Sean Adams?

  I think it's already impressive, like just a few days in, you're already over, you know, 50 million in liquidity. So I mean, liquidity may flow without incentives, you know? I guess if you have the right product, then you shouldn't need to pay people to, to use your theme park. Though it does help sometimes.

• 1:00:32Speaker 02

  We're also getting like an ecosystem fund. These are other things that were, that were, that were, you know, so there are many mechanics of how you can distribute. Some of them goes the, obviously there's a difference whether it goes to developers, the end users. There are a lot of internal things which we're, which we're considering. And basically, you know, the bottom line is one thing, which is how do we reinvest in our, in our community? You know, given the, the way the system is set up, how do we reinvest resources in Arbitrum and in our origin community, in our origin community? Because ultimately that's our goal.

• 1:01:00Ryan Sean Adams?

  Let me ask another related question, just still on the topic of, you know, how does Layer 2 win? And this is a question with respect to composability. Okay, so I think if you're a high throughput chain that makes some decentralization sacrifices, namely, you don't provide the ability for a regular user to run a, a node that's not validating, or that's not like validating blocks, then you can have higher throughput in your, you know, like your, your single chain instance. And maybe there's less a need for, of, for composability, right?

• 1:01:42Ryan Sean Adams?

  So if you could do a, you know, 10x or 100x inside of your main chain without, you know, by sacrificing decentralization and you can provide composability, right? That, that's what's competing against Ethereum and all of these Layer 2s, which kind of fracture some of the liquidity. So if I go bridge from mainnet to Ethereum right now, I have access to Uniswap in the Arbitrum theme park, and I have access to Sushi Swap. But I don't have all the trading pairs that I would on mainnet. I have, you know, less liquidity, so my slippage costs are going to be higher for, for that sort of trade. Can you talk to us about that? Is that going to be a chink in the armor, do you think, for Layer 2s?

• 1:02:26Ryan Sean Adams?

  And how does Arbitrum and the other Layer 2s solve for this composability splintered liquidity type issue?

• 1:02:36Speaker 03

  Yeah, it's a great question. There's a lot of really awesome projects right now that are working on composability. There's so many, you know, there's like, I keep learning about new ones. Like, there's a few, like, you know, the few that, like, I've seen for the longest are Connect's top and seller, who've been working on kind of these sorts of problems for a long time. And there's kind of more and more. It, there's this weird thing where the blockchain space is really weird because everybody got super used to composability, to sort of synchronous composability, and started thinking that, like, that's like the only way to do things well. But the entire rest of the web is asynchronous.

• 1:03:21Speaker 03

  It's like a very foreign thing. And there's all sorts of ways people have figured out to kind of build in these environments where you can't just, you know, in one go, interact with every single application with a sort of global lock so that nobody else can touch it while you are. This is really sort of an area where there's sort of all sorts of kind of techniques. And so a lot of sort of what's being built on the blockchain space in order to be able to handle these kind of multiple parallel chains is taking advantage of computer science concepts that have been around for a long time, kind of just generally dealing with asynchronous. So I'm pretty confident that kind of where it matters, there are going to be sort of nice, you know, nice products in place

• 1:04:04Speaker 03

  that basically sort of are able to hide the annoyances, which are currently very visible to the degree that if a user doesn't want to sort of deeply care about what application and chain that they adapt that they're using is running on, they won't really need to care. There'll be some like, you know, some increase in fees, maybe, you know, as they, you know, a slight, which will be relatively small just for the cost of liquidity, but it will be sort of relatively in the background.

• 1:04:31David Hoffman?

  You guys happen to be in talks with any major exchanges about just getting assets off of exchanges straight on to the L2. Can you update on that front?

• 1:04:40Speaker 02

  Yes, so since we spoke last, I think we've announced OKX is doing that and also Huobi will be doing that directly and we are in contact with a bunch of others as well, but those are the only two that have publicly committed to do that already and they haven't gone live just yet, but I expect those to go live relatively soon.

• 1:05:02David Hoffman?

  And what about, okay, so everyone is participating in this NFT mania going on right now. So we all know OpenSea. Is there, are you guys talking with any NFT platforms, maybe OpenSea themselves, about putting their platform on to Arbitrum?

• 1:05:16Speaker 02

  Yes, we are in contact with different NFT platforms and the thing about NFTs, at least, you know, I'm curious, your thoughts, at least the way I see it is if DeFi, it's a lot about bridging the existing projects and part of that is because, you know, they use fungible assets, so you can take assets and just bridge them en masse. With NFTs, it's more about like, you know, no one's taking CryptoPunks and say, oh, that's movies all over. That's not the way these work. And you know, it's, I can move my pump to Arbitrum if I want to, but the project doesn't move in mass. But I do think that, so it's really about new creators, right? And we see this every day and really NFT now, like every day there's another amazing project. So it's about getting new

• 1:05:58Speaker 02

  creators onto Arbitrum, you know, new artists and issuing NFTs on Arbitrum. We're seeing some of that now. We'll have

• 1:06:05David Hoffman?

  Hang on, I really just want to emphasize that point, just to just to parse it out. So we, listeners, don't skip over that. What you're talking about is like, great, like people in theory can move their CryptoPunks over to Arbitrum. But if you own a CryptoPunk, like, you might be okay with just paying the gas fees on the L1, right? There's a decent chance that that's true. There's cheaper NFTs that are just maybe priced at an ETH or lower, but you're saying that like, it actually just makes more sense for some of these newer NFT products to just issue and deploy natively on Arbitrum first, so that you don't actually have to move each individual unit over there.

• 1:06:36Speaker 02

  Exactly. I think that's, you know, for the platforms to come, that's when it makes sense. It's not to support the straggling punk or penguin or something, whatever someone moved over. It's really to support the native assets that live there. And hey, you know, people might go over the bridge the other way too. So there might be an asset that's native to Arbitrum and someone moves it over to Ethereum mainnet. But I think really we'll see the communities there. So whereas in DeFi, it's more about existing projects, you know, existing well-known projects moving over. I think in NFTs, it's more about watching the creativity and the art that happens on Arbitrum. And then the NFT platforms I expect to come once there's a community of NFTs there.

• 1:07:19Ryan Sean Adams?

  Just to double check on this, when you, you said issue NFTs native to Arbitrum. When you issue an NFT on Arbitrum, it is also native to Ethereum, correct? As in, there is no like formal, like ongoing link between the NFT and Arbitrum, right? Like you can take it and deploy it and send it over to Ethereum and then as sovereign as any other NFT that was initially deployed to Ethereum, correct?

• 1:07:41Speaker 02

  Yes, we have a bridge. The bridging in Arbitrum is, is, is, the bridging in Arbitrum is get inheritance. This is what we were talking earlier about, there could be many bridges. But the bridge that we talk about is a protocol layer bridge that has the, the roll up security property. So you can go back and forth in the bridge and it derives security on Ethereum because, because the bridge is secure.

• 1:08:06Ryan Sean Adams?

  This is kind of back to that, you know, suburbs and city sort of metaphor, right? It's like if you're starting out with your NFT project, you know, might start in the suburbs where things are cheaper, right? But when you really make it, then maybe you move to Manhattan, maybe you move to mainnet, right? So does this paint the picture of a world where the highest value sort of assets and transactions might be on mainnet, right? But then we have like maybe lower value transactions on Arbitrum and other layer twos. And then maybe in kind of side chain world, you, we have transactions that just don't really require much economic security at all. Is that kind of how you see this evolve with any asset, whether it's an NFT?

• 1:08:52Ryan Sean Adams?

  Or whether it's, you know, DeFi token CRC 20 type assets?

• 1:08:56Speaker 03

  Interesting question. I don't know. I would really expect over time that kind of mainnet will be mostly settling L2s, that there won't really be sort of like a whole large economic ecosystem on mainnet, sort of independently from kind of bridging from, you know, interchain bridging protocols and L2s. I would expect, the more likely scenario to me is that like, let's say, and we have no plans for this right now, but thinking long term, that there is an Arbitrum chain that is just NFT projects, that like if you're going to do an NFT project, chances are you deploy on the Arbitrum chain. There's another one, which is kind of mostly DeFi. Most NFTs are, you know, not high enough value that you're going to want to pull them into the DeFi ecosystem. But the ones that are sort

• 1:09:40Speaker 03

  of relatively high value, where maybe you want to like collateralize alone using your NFT, you might actually do the sort of transfer over to, not to move it back to mainnet, but move it, well, first to mainnet and then back, and then down to deposit into the DeFi chain.

• 1:09:57Ryan Sean Adams?

  Yeah, interesting. It's going to be very interesting to see how that evolves. I guess the, like, one challenge is there are so many NFTs right now on mainnet, right? And so some of them won't be high value enough to even do anything with, to move. Or would you ever move a CryptoPunk from one chain to another? Is it kind of a question?

• 1:10:17Speaker 03

  And I'm talking quite long term here. I'm not talking like, you know, next, you know, you know, this is more of essentially, as, as L2s increase, fees on, on mainnet are likely to increase, essentially because what you could do on mainnet for your given transaction fee, I can do 10 times as much if I'm on an L2. So I'm going to be willing to pay 10 times more than you are in order to get the same utility, which will kind of eventually sort of, you know, you know, be a, be a heavy incentive to migrate onto, onto L2s as sort of the amount of, you know, usage of the entire ecosystem increases.

• 1:10:54Ryan Sean Adams?

  Another, I guess, longer term question, a little bit short to, to medium term maybe is, when layer two, excuse me, when ETH2 fully arrives, does that give Arbitrum any additional wins?

• 1:11:07Speaker 03

  Yeah, absolutely. We're really excited. I'd say we're not yet holding our breaths because I think it's still going to take a little while to really get sort of fully there. But when it does, it's going to be a huge benefit.

• 1:11:20David Hoffman?

  What are the benefits?

• 1:11:22Speaker 03

  Yeah, so kind of, and it's funny, there's ETH 2 is in these phases, there's phase zero, which we already did. I guess there's sort of an extra half phase now with the merge, which is exciting for a whole host of reasons, although maybe probably not directly useful to Arbitrum. And then there's phase one, which is data sharding, where we have kind of this sharded blockchain. And you can't yet do anything with those shards, they just hold data, except what do rollups need? They need to be able to post data.

• 1:11:52Speaker 03

  And so these things are like almost, you know, are basically made for rollups. Since they're not useful for 99% of what happens on Ethereum, other than for kind of use, other than for rollups. And so when, once that occurs, the L1 costs, which is, which are kind of by far the biggest component of Arbitrum today, will most likely go way down. And at that point, basically, the only cost, the cost in the system will be basically just sort of the standard blockchain costs of how much, you know, what's our gas limit? You know, how much congestion is there as opposed to worrying kind of about this other cost component being a major factor?

• 1:12:31David Hoffman?

  Can you estimate, is Zach going to cut like theoretical Arbitrum fees in like in half? Or maybe like cut it like maybe it's one tenth? Like what's the ballpark range that we're looking at?

• 1:12:42Speaker 03

  So for the layer one part, yeah, I mean, probably somewhere between one one hundredth and one tenth, I would guess. They're going to be, you know, 64, I think last I checked, although they've moved this around a bit. But I think last I checked, it was going to be either 16 or 64 shards, been iterating on the design a bit there. Each one with sort of a huge amount of data throughput compared to Ethereum today. And no one else other than rollups are going to be able to make use of this until phase two, when execution is added. And so it'll be sort of, you know.

• 1:13:19David Hoffman?

  It's going to be a rollup world, basically.

• 1:13:21Speaker 03

  Basically, yeah.

• 1:13:23David Hoffman?

  And then all of the gas savings that you guys have just are passed on to the user, right? So a lot of the users have to pay less fees.

• 1:13:30Speaker 03

  Exactly. And the really cool part is users will just get that with that, you know, Arbitrum will, you know, and this is another kind of, you know, another short term reason that maintaining upgradability is really important. Because when ETH 2 comes out, we're going to want to be able to make sort of, you know, an alteration to the layer one system that will actually let us use this massively cheaper path. And then all the entire Arbitrum ecosystem will just one day see all of their fees go way down.

• 1:14:03Ryan Sean Adams?

  That's amazing. I don't, I don't think people know that, by the way, not many people. And how far, I, I know you guys aren't on the ETH 2 team, so it's almost like unfair to ask, but just ballpark, what do you think? Is this like a year away? Is it more? Is it less?

• 1:14:19Speaker 03

  I don't know. I think I will try to guess.

• 1:14:22Ryan Sean Adams?

  I know it's good.

• 1:14:23Speaker 02

  All I can say is, yeah, you know, just echoing what Harry says, from our, from our, from our perspective, it can't come soon enough. And people, people miss that because like even like, you know, talking like investors, they, some people like have this thought like that where that rollups are just a Band-Aid until ETH 2 comes and like, it couldn't be anything like different, like more, more different. And you look at Vitalik, he has this post about a rollup-centric Ethereum. That's not like a rollup-centric ETH 1, that's a rollup-centric Ethereum like ETH 2.

• 1:14:47Ryan Sean Adams?

  For sure.

• 1:14:48Speaker 02

  So, uh, yeah, we, we can't wait for it to come soon enough, but I think our guess is as good as anyone else's.

• 1:14:53Speaker 03

  Before, before we get to that, I mean, I think the thing that, that personally I'm really excited about is the merge and, and the move away from proof of stake because one of, one of the questions I sometimes get in, in, when I'm interviewing people who are not sort of too deeply in the space, they're like, oh, so Arbitrum doesn't have to use, is, you know, is, is really green then? Because it doesn't have to use proof of work.

• 1:15:13Ryan Sean Adams?

  And it's like, not yet. Not exactly. And then how do you, how do you even have that conversation? Have you ever had, tried to have that conversation? You get into explaining?

• 1:15:22Speaker 03

  Yeah. I mean, the, the great thing to say and the thing, you know, the thing that like, you know, as, you know, as, as sort of, you know, the Ethereum community can, can and does say is like, we're, we're not there yet, but it's the plan. It's always been the plan. It's, it's not easy. So a huge amount of work has gone. Into it, but you know, proof of work has always been a stopgap measure until proof of stake was figured out. And I think that, you know, is very satisfying because the thing people are really worried about is not like, okay, is it going to still take, you know, some number of, you know, years or whatever? I mean, I don't think it is, but like, you know, it's like, is this like, you know, just like permanently like this? Or, or is there a kind of, you know, a, a, you know, a better system in the future, which so clearly is.

• 1:16:08David Hoffman?

  So question to both of you as we come down to the close of this show. What are you personally excited about to see get deployed on optimism or excuse me, Arbitrum?

• 1:16:19Speaker 03

  Um, Stephen, you want to take that first?

• 1:16:21Speaker 02

  Yeah, um, I, I'm just personally excited about really, um, it really, the entire, you know, it's, it's not one, it's really, it's really everything. But I mean, my dad specifically is that there was a time, if you have asked me a year ago, I would have said, you know, the thing that I'm, that terrifies me most about rollups getting adoption is that you can't do this one app at a time. It just doesn't work because then that app's in a desert and, you know, its users lose out and they can't do all these cool things that every other app on Ethereum can do. And so it was like a very hard coordination problem. So for me, it's really about having a full functional DeFi ecosystem. And we're, we're so close right now and will be, probably be there within a week or so, based on, you know, projection I have brought in. That's means you have lending, DEXs, DEXs, options, derivatives, all on Arbitrum.

• 1:17:05Speaker 02

  And, and that's the point where any, any product, product, uh, project can say, I, I can deploy an Arbitrum today. I don't need to wait. I don't need to say, well, I, I just need A, B, and C, and D to move. So I'm really excited about just the full ecosystem. And, you know, we're, we're almost there. We, we, we did a lot of waiting to sort of, for a lot of people to get ready. Not everyone went live on day one. Uh, I know today's, uh, what is it? Day, uh, four, I guess. So, but I think by day 15, we'll have, um, pretty much, um, you know, I'm not going to say we'll have every single project or multiple in each category, but I think we'll have the entire DeFi ecosystem covered, um, within days. And that to me is, is incredibly exciting. And that's not, you know, that's, that's, that's step one. I'm also excited about NFTs, um, having a lot of good conversations with gaming.

• 1:17:49Speaker 02

  But like, what I'm personally most excited about is just the full DeFi ecosystem. Cause that's where composability is so magical. And a year ago, I think nobody had any idea that you could basically do this coordination, just get everyone to move like, you know, or to redeploy en masse. And that's, um, Incredible, incredible to see play out because it's against everything we thought was possible a year ago.

• 1:18:13Speaker 03

  I would say for me, it's kind of seeing, seeing applications that wouldn't have been possible on Ethereum. And I know, I think we already have sort of our, I'm not sure if there are a lot, I think some, at least some lot. You know, for instance, perpetual protocols, which just, you know, are more expensive. Retail DeFi that's, that's, you know, just hasn't had access. And, and, you know, and then, you know, those, those are even sort of the, the least exciting of like the new things to come. Because those are the ones I could think of.

• 1:18:48Ryan Sean Adams?

  That's such a good answer.

• 1:18:52Speaker 02

  I'm gonna be honest, Harry killed it on that one.

• 1:18:54Speaker 03

  The day when I, when I, when I see something new launch and I'm like, oh my God, that's possible.

• 1:19:01Ryan Sean Adams?

  Yeah. What have we done? Yeah.

• 1:19:05Ryan Sean Adams?

  Absolutely. Well, thank you so much for a conversation today, guys. I guess maybe the last question. You recently had a pretty monster raise, so congrats on that $120 million. Also, it sounds like you guys are hiring. So what are you gonna do with that $120 million? Are you, are you hiring some folks? Any shout outs you want to give?

• 1:19:25Speaker 02

  Yeah, that is what we're doing with the $120 million. It's basically full hiring. So we're full of remote, so we don't have, we have very, very minimal overhead. And that's going to basically go to investing in, in people and investing in, in research and development. Because basically, you know, this gets to, you know, we've covered a few things around this, which, what our scalability is now, what we'll get to eventually. And the answer is, you know, we think arbitrage is a good answer to, to a lot of the scalability problems today. But we think there's still a long way to go because adoption is not going down. We're going up and to the right, and that's going to continue going that way. And so we had to think about, hey, Not only how do we scale for the next six months and how do we scale for the next year, but how do we move past that and have fundamental increases and capacity increases over five years

• 1:20:09Speaker 02

  and 10 years as well, because we believe, and we believed this for a while, if you look back 10 years ago, I was already talking about blockchains back then. So we think that's where the adoption is going and therefore it really will give us the ability to invest in people and build cross-functional teams that are improving Arbitrum today, but also have like big bet visions and that's about core scalability. It's also about like tooling and compatibility, because we're fully Ethereum compatible and it's great. And that's allowing us to really be the best solution for those that are in the Ethereum community today. But then we also ask ourselves, what about the user that comes to Arbitrum tomorrow? Can we make their experience even smoother?

• 1:20:53Speaker 02

  Can we get them extra tooling and do things maybe that, you know, add affordances that would be harder to do on layer one? And this is something which we're thinking about a lot, because as we grow and grow and grow, the community of developers, you know, we need to tap into, you know, much broader communities and to give people the ability to acclimate onto Ethereum more smoothly and easier, I think is really, really exciting. So, but in one word, it's hiring. That's what we'll be doing with that. And I don't think, you know, we're not looking, it's a lot of money. We're not looking to build, you know, an army. We're looking to build a nice sized team of, you know, some of the best minds in the world.

• 1:21:36Speaker 02

  So we'll be paying, you know, we'll be, you know, compensating very competitively for really, really strong engineers and researchers.

• 1:21:48Speaker 03

  And you get to work with us.

• 1:21:50Ryan Sean Adams?

  Hey guys, have it. Arbitrum team, Harry, Stephen, thank you so much for joining us. I like the sound of DeFi in days. Really looking forward to doing more with Arbitrum in the future.

• 1:22:01Speaker 02

  Thank you so much for having us.

• 1:22:02David Hoffman?

  Thank you.

• 1:22:03Ryan Sean Adams?

  Absolutely, guys. Well, looks like Layer 2 summer is here. It's bleeding into fall a little bit.

• 1:22:09David Hoffman?

  This is a Layer 2 year. This is a year from now.

• 1:22:13Ryan Sean Adams?

  From now on, I mean, this is kind of the roadmap for Ethereum. So we'll be having a lot more conversations about Layer 2. Of course, guys, go check it out. Go try it out for yourself. We'll include some links in the show notes. I think we're actually releasing a guide on Bankless pretty soon to Arbitrum. I'm not sure if that's next week or the week after, but we'll have that as a resource for you on the Bankless newsletter. If you're not subscribed to the Bankless newsletter, newsletter.banklesshq.com. Also, if you're not subscribed to this YouTube channel, what are you doing? Hit subscribe. Yeah, we're publishing content like this every day.

• 1:22:47David Hoffman?

  Why aren't you subscribed?

• 1:22:48Ryan Sean Adams?

  Why are you subscribed yet? Risks and disclaimers, guys. Of course, none of this was financial advice. DeFi is risky. Eth is risky. You could lose what you put in, but we are headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the Bankless journey. Thanks a lot.

• 1:23:05David Hoffman?

  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, podcast 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, Ask Me Anythings and weekly rollups,

• 1:23:48David Hoffman?

  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.