Tim Beiko & Justin Drake: The Sci-fi Roadmap to Ethereum

In today’s podcast, Justin Drake and Tim Beiko help us explore Ethereum's uncharted roadmap. You know about EIP-4844. You know about Proposer-Builder Separation. But the Ethereum roadmap does not stop there. It continues! Each component of the Ethereum roadmap has deeper frontiers than what you may be familiar with. 4844, PBS, these are just the first stops on a longer track of Ethereum’s Sci-Fi roadmap. Other areas Justin, Tim, and David explore statelessness, how VCs are subsidizing Ethereum L1 R&D efforts, enshrined rollups, how all of this stuff leads to Ethereum needing fewer and fewer honest actors to work trustlessly, what quantum computing has to do with the Ethereum roadmap, trustless mempools and so much more. ----- 🏹 Airdrop Hunter is HERE, join your first HUNT today https://bankless.cc/JoinYourFirstHUNT ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE ⁠https://k.xyz/bankless-pod-q2 https://feeds.flightcast.com/%E2%81%A0https:/k.xyz/bankless-pod-q2 ⁠ 🦊METAMASK PORTFOLIO | MANAGE YOUR WEB3 EVERYTHING ⁠https://bankless.cc/MetaMask ⚖️ ARBITRUM | SCALING ETHEREUM ⁠https://bankless.cc/Arbitrum ⁠ 🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle ⁠ 👾POLYGON | VALUE LAYER OF THE INTERNET https://polygon.technology/roadmap 🗣️TOKU | CRYPTO EMPLOYMENT SOLUTION https://bankless.cc/Toku ----- TIMESTAMPS 0:00 Intro 5:50 Ethereum Roadmap Completion 8:30 Immediate Dev Priorities 9:50 Danksharding & Rollups as 1st Class Citizens 11:50 Why Prioritize L2s 14:50 Snarkifying the EVM 17:39 Enshrined Rollup Use Cases 20:00 EVM to zkEVM 24:48 Summary So Far 27:15 EIP-4844 28:25 Proposer-Builder Separation 37:37 MEV Burn 40:38 Statelessness 43:33 Cryptography vs. Crypto Economics 45:00 Quantum Mechanics 50:25 Statelessness Ethereum Unlock 53:10 Cryptography & Sustainability 55:55 Closing & Disclaimers ----- RESOURCES Justin Drake https://twitter.com/drakefjustin Tim Beiko https://twitter.com/TimBeiko Ethereum Discord https://discord.gg/CetY6Y4 ----- Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures ⁠

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

• 0:00Speaker 00

  But there's also some really future-thinking stuff. So for example, upgrading to post-quantum cryptography. And even beyond that, there's something that only opened up in the last few weeks. Not only should we defend against quantum computers, but we can harness them to make consensus even more robust.

• 0:20David Hoffman?

  Welcome, Bankless Nation, to the Sci-Fi Roadmap to Ethereum. You know about EIP 4844, you know about proposer-builder separation. But you probably didn't know that the Ethereum roadmap does not stop at these things. It continues. Each component of the Ethereum roadmap has deeper frontiers than what you may be familiar with. 4844, PBS, these are just the first stops on a longer track of Ethereum's sci-fi roadmap. In this episode, we're going to explore these deeper frontiers to Ethereum with Justin Drake and Tim Beiko, the two individuals who can probably see the furthest along the Ethereum frontier out of anyone. We're going to learn about what is statelessness and how it's helping Ethereum make the furthest reaches of the internet even more trustless. How Ethereum is going to absorb ZK tech at the Layer 1 level.

• 1:05David Hoffman?

  How VCs are subsidizing Ethereum's Layer 1 research and development efforts. What is an enshrined rollup and how is it different from all the other rollups that we're familiar with? And why does Justin Drake want it so bad? How all of this stuff is leading to Ethereum needing fewer and fewer honest actors to work trustlessly. And what does quantum computing have to do with the Ethereum roadmap? And no, it's not just that it breaks ECDSA signatures. And what are trustless M pools? Who do they protect? All of these things that I just mentioned are just the tips of the iceberg. You're going to learn so much in this episode, so much that you're going to need to put your GigaBrain hat on, or else your brain might explode. But first, a message from our friends and sponsors over at Stater. Stater is a liquid staking service provider.

• 1:46David Hoffman?

  You know what these are, but the unique thing about Stater is that it only requires 4 Ether for you to run a Stater staking Ether node. So you deposit 4 Ether, 28 other people's Ether come in to your node, so they can stake with you. And then you charge them 15%. So you get extra yield for staking Ether because Stater, the Stater protocol, only requires 4 Eth. There's a link in the show notes if this has you peaked, so you can get Started staking with Stater. I hope you enjoyed this episode with Tim Baker and Justin Drake. This is the sci-fi roadmap to Ethereum. And we're going to get to it as soon as we talk to some of these fantastic sponsors that make this episode possible, especially Kraken, our preferred exchange for crypto in 2023. If the giga brain frontier scares you a little bit, don't worry, Kraken's got your back. You can DCA into your preferred crypto assets in the safety and security of Kraken. Let's go hear from them right now.

• 2:31David Hoffman?

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• 3:16David Hoffman?

  The internet allows anyone to create and exchange information. What's missing is a value layer that lets anyone exchange, store, and program value. That's where Polygon 2.0 comes in. Polygon Labs has unveiled a series of innovations that will radically alter the Polygon ecosystem and Web3 as a whole. By leveraging groundbreaking ZK innovations such as Polygon ZK EVM, the next iteration of the best-in-class Plonki2 proving system, and a first-of-its-kind ZK-powered interoperability layer, Polygon 2.0 will give users and devs unlimited scalability and unified liquidity. Right now, there is a Polygon improvement proposal regarding a potential ZK-powered upgrade of Polygon Proof of Stake. If approved, Polygon Proof of Stake would become a Layer 2 ZK EVM, Vilidium.

• 3:58David Hoffman?

  So make your voice heard on this proposal by joining the Polygon Discord today. You have a chance to help the Polygon community give the internet the value layer it deserves. Are you planning to launch a token? Is your token already live? And are you granting your employees and contractors vesting token awards? And are you trying to figure out how to take care of taxable events for your team? Toku makes implementing a global token incentive award simple. With Toku, you will get unmatched legal and tax support to grant and administer your global team's tokens. Toku will help you navigate across the lifecycle of your token, from easy-to-use pre-launch token grant award templates to managing post-cliff taxable events with payroll. For legal, finance, and HR teams, it's a huge, complex task to have to comply with labor laws, payroll and tax obligations, tax reporting, and crypto regulations in every country that you employ someone.

• 4:44David Hoffman?

  It's difficult, time-consuming, manual, and costly, and it's drawing more attention from global regulators and governments. Toku makes it simple for leading companies in the space: Protocol Labs, Hedera, Gitcoin, and many more. So if you want some help navigating the complex world of token compliance, go to toku.com/bankless or click the link in the description below. Bienvenue à Bankless Nation! That's the only French that I know. Here we've got Tim Baker and Justin Drake, and we are at ETHCC. And this is one of the very rare opportunities where I can get everyone here on a couch together. We're going to talk about the future of Ethereum. To me, ETHCC is, even though it's in the middle of July, it's in the middle of the year, it still kind of feels like one revolution around the conference circuit, at the very least.

• 5:25David Hoffman?

  It was the first conference post-COVID, and this is the third ECC post-COVID, so two years. And Ethereum has grown up a lot since then. We've had proof of stake now actually shipped, so that is in the rearview mirror. Layer 2s are no longer hypothetical, they are here. I remember last year, ECC, it was the year of the ZK EVM, and this year seems to be the year of the ZK EVM mainnet.

• 5:51David Hoffman?

  A lot of things have actually come to pass, but there's still a lot of things to look forward to. And so I'm hoping this conversation can guide me and the Bankless listeners, all the Bankless Nation. What is the future of Ethereum? What is there left to do? And so, Justin, maybe I'll start with you. At the highest level, how would you place Ethereum in time and its development roadmap? Maybe a percent completion or left to be done? How would you describe where Ethereum is and what it wants to become?

• 6:24Speaker 00

  Right, so I think the initial vision of Vitalik of having this base layer, which is secure and scalable, so we have the proof of stake and the sharding, is actually coming to fruition. But one of the things that surprised me as a researcher is that we seem to discover something new every two or three years. And so the design space expands, but that's exciting because there's more potential. So on the one hand, I want to say that we're, I don't know, 75%, 80% of the way there in terms of completion of the initial vision, but the vision has grown in scope. And so maybe we're only 50% of the way there.

• 7:05David Hoffman?

  Would you resonate with that, Tim?

• 7:07Speaker 02

  Yeah, and I think one thing to maybe add to this is a lot of the new things that are coming tend to be related to like protocol adjacent phenomenon. So like MEV is obviously a huge one, Layer 2s are a huge one. So like if you think strictly from Ethereum L1 as like a system, yeah, I think we're getting there.

• 7:30Speaker 00

  Right, there's some quality of life things. So for example, account abstraction, encrypted mempools.

• 7:38Speaker 00

  Like these are things that we didn't necessarily realize that we needed at the very beginning. And but there's also some like really future thinking stuff. So for example, upgrading to post quantum cryptography. And even beyond that, there's something that kind of only opened up in the last few weeks. Not only should we defend against quantum computers, but we can harness them to make consensus even more robust.

• 8:02David Hoffman?

  I think hopefully in this conversation, if I guide this conversation correctly, we'll start with some of the short term concrete stuff. There are short term things that are being worked on right now. Probably the bankless nation is pretty familiar with things like 4844, PBS, the short term things that are going to be included into the Ethereum protocol, you know, short in Ethereum timeframes, about a year, a soon TM. And then there's some like stuff that's also being worked on that are middle term stuff. And then there's some very long term stuff. Maybe I'll put quantum computing in there. I don't know if Z-King the entire theory. Ethereum is still a topic of conversation, but I want to open up that box. And so like short term, midterm, long term, like and long term is like the sci fi stuff. So I think that's how this conversation is going to go.

• 8:43David Hoffman?

  And maybe towards the end of this, we'll just summarize everything and talk about in that fullness of time Ethereum, the version of Ethereum that will eventually, the trajectory is strong, we'll get there. What does that look like? But let's start with the short term stuff. Like, what would you say is the immediate priority that the devs are focused on the most in the short term?

• 9:00Speaker 02

  Ford 44. And I think beyond that, so the next upgrade is called Denkoon. There's Ford 44, it's the main feature that's part of it. There's also a couple of other things that we're adding. So on the execution layer, one thing that's notable is deactivating self destruct. So this is something we've talked about doing for years. And it might be the first time we actually deactivate the feature on Ethereum. Trying to think, I don't think there's another case where we've done it. I mean, we deactivated proof of work, that was a big one, but like something that like smart contracts and whatnot depend on. So basically preparing this entire upgrade.

• 9:38Speaker 02

  Another cool thing that's being delivered with this upgrade is exposing the beacon state root in the EVM. So this means that the execution layer will be able to make like proofs and commitments about what happens on the beacon chain. And it'll help things like make staking pools more trustless. So generally, yeah, this upgrade is what devs are working on right now.

• 10:01David Hoffman?

  And so this is Ford 44 is the big one, of course. And this is what we call dank sharding. This is proto dank sharding.

• 10:07Speaker 02

  Proto dank sharding.

• 10:08David Hoffman?

  Yeah, so the middle step between full dank sharding. And we already have layer twos on Ethereum, they're totally operational. But this is what I would put under the roll up centric roadmap for Ethereum. As in, we are making Ethereum, the protocol is making rollups a first class citizen. Can we unpack that nuance a little bit? What does it mean for rollups to be a first class citizen? And how does that change what Ethereum is for with with proto dank sharding?

• 10:33Speaker 02

  Maybe I can start with proto dank sharding and you can talk about longer term like making rollups the first class citizen. But yeah, just to unpack dank sharding. So when you make a transaction on layer two today, the layer two bundles your transaction than a bunch of other people's transactions and posts the data for that back on layer one. And this is why layer twos are kind of cheaper. So computation on Ethereum is expensive, but storage is cheaper. So layer twos basically say, we're going to do all the computation off chain, put the data, the raw data from that computation back on Ethereum L1. And if you know, there's a fraud, or if you want to reconstruct the state on a ZK rollup, then you can take that raw data and like run through all the computation, but only if you if you have to. And this is kind

• 11:16Speaker 02

  of the trick that that makes layer twos keep a lot of the security assumption because the data is on Ethereum, but also be cheaper because you're not running every transaction. So today, when you make an L2 transaction, something like 90 to 99% of the cost is actually posting that data back on Ethereum L1. And the reason why that cost is expensive is L1 stores that data forever. But that said, layer twos don't actually need that data to be stored forever on Ethereum layer one, because you know, with optimistic rollups, we have this seven day exit window. So this means that, you know, after seven days, no matter what the data is, somebody could have like done something, exited all their funds. So what we're doing with proto dank sharding is we're adding, can think of it as temporary

• 11:58Speaker 02

  data storage on Ethereum layer one. So that this way, because the data is only stored for a couple of weeks, we can charge much less for it. And this will reduce the cost of their two transactions, because now instead of paying for storage forever, they're just paying for storage for a couple of weeks.

• 12:14David Hoffman?

  And then Justin, if you want to finish this conversation, like what does that mean for Ethereum the protocol? So we have layer twos that have cheap data, very cheap data that that, you know, lowers the gas fees, makes them faster. But again, the rollup centric roadmap of Ethereum, why are we prioritizing layer two so much? And how does that, what does that mean for the protocol?

• 12:34Speaker 00

  Right, so I'd say that Ethereum is prioritizing the friendliness to build rollups on Ethereum, because posting this data is the main bottleneck. But, and I guess one of the consequences here is that we're going to be able to scale the number of users on Ethereum, maybe from 10 million to 100 million, or maybe even hundreds of millions.

• 12:59Speaker 00

  And one of the things that I expect in the short term is we're introducing this whole new resource, which won't be like fully consumed at the very beginning. And so we might see dynamics similar to what Argen did a few years ago, where basically the fees were so low that they subsidized the fees. So it's possible that for a period of time, maybe six to 12 months, we're going to be able to use rollups completely for free. And there's going to be this kind of this temporary subsidy almost that could act as a bootstrapping mechanism.

• 13:29Speaker 00

  I guess one of the things that I've been thinking of in the long term is how can we really have Ethereum native rollups? And we call those enshrined rollups. And what we're going to do in the long term is actually get an enshrined rollup, one instance, by snarkifying the EVM. So if you take the EVM today as it is, every validator has to verify every single transaction. But once we've snarkified it, all the validators need to do is just verify this one snark per block. And so it's automatically becomes a rollup. So the main net becomes a rollup.

• 14:08David Hoffman?

  Ah, okay. What does that mean for the other rollups that also already exist?

• 14:17Speaker 00

  So what I expect will happen is that there will be kind of a nice complementarity, because the enshrined rollups will have best-in-class security.

• 14:27Speaker 00

  But on the other hand, and one of the things that they enjoy is access to social consensus. So if for whatever reason, there's a bug in the EVM, then you know, we're gonna go and fix it. Whereas if there's a bug in one of the rollups, I don't know, Arbitrum, then kind of their problem. And so the way that the non-enshrined rollups fix issues is with governance. And so really, we don't need this governance token. And so this in a way makes it more secure because governance, it's a way for flexibility, but it's also an attack mechanism.

• 15:06David Hoffman?

  So if we're snarkifying the EVM and we're getting similar properties to what you would get from a rollup, you can bundle up many, many transactions and have them go through much cheaper gas costs and much easier computation. Is that competitive with the current Layer 2 landscape?

• 15:24Speaker 00

  So the Layer 2 landscape, I don't think will compete with an Enshrine rollup for a few reasons. One is on cost. So you can do certain things with, you know, application layer rollups that you can't really do with an Enshrine rollup. One of the things, for example, is batching. So if you are willing to settle, let's say, once every 10 minutes, you can take these bigger batches of data and then you have more efficient compression. Think of it as when you're zipping a file, you have better compression if you have more data to work with.

• 15:57Speaker 00

  Another thing that you can do with the non-enshrined rollups is you can be very opinionated in terms of where the cash flows go. For example, optimism, they can decide to fund public goods. But we, you know, with the Enshrine rollups, the only real public good that we can fund is economic security and economic bandwidth.

• 16:17Speaker 00

  And then another thing that you can do with the application layer rollups is that you can have whatever virtual machine you want. You don't have to stick with the EVM. And so there's gonna be a lot of advantages there. And then maybe some other benefits could include services like preconfirmations. It's relatively difficult to do preconfirmations with an Enshrine rollup, but that's something that the application of rollups can do.

• 16:43David Hoffman?

  Where is this on the theoretical idea to EIP on the roadmap spectrum?

• 16:50Speaker 00

  So getting to one base rollup is actually only the beginning, but it's like 90% of the work. And the reason is that we have to do the really heavy engineering to have these snark proofs for every single block. But then there's this really cool thing that we can do, which is maybe only 10% of the work, where we can expose as an op code, the verification of a snark proof for the EVM. And so that means that anyone can deploy an enshrined rollup at the application layer. So it basically opens up the possibility to have as many copies of the Ethereum Layer 1 EVM as we want, all with the exact same properties as Ethereum Layer 1. When will that happen?

• 17:35Speaker 00

  My guess is that we're talking five to 10 years.

• 17:38David Hoffman?

  Okay, so did we accidentally skip into the mid to long term roadmap of Ethereum?

• 17:42Speaker 00

  Yes.

• 17:43David Hoffman?

  Okay.

• 17:44Speaker 00

  But our caveat is that the development of snarks has always surprised me in a positive way.

• 17:52David Hoffman?

  Sure.

• 17:52Speaker 00

  And so it could only be, you know, three, four years potentially.

• 17:55David Hoffman?

  Okay. And so like, I think what a little bit with what you're saying is between the difference between an enshrined rollup and the rollup landscape that we know today, the Optimism, Arbitrum, you know, ZK Sing, all of these players, it's actually different use cases.

• 18:09Speaker 00

  Different use cases.

• 18:10David Hoffman?

  They're similar in engineering, but will be expressed differently by how and why they will be used. And so perhaps they're unlocking new use cases. So not necessarily competitive, more just like a new landscape.

• 18:22Speaker 02

  They have way more flexibility, right? You can think of them as like, well, they are effectively smart contracts from Ethereum's perspective, right? Like, so they can do anything even more than what a smart contract on L1 can do, but they're not bounded by like the capabilities of L1 and also the rate of change of L1. So it takes way more time, you know, to add a new op code to Ethereum L1 versus if, say, Optimism wanted to add an op code that's not on L1, they can do it like much quicker than we can.

• 18:50David Hoffman?

  Is the idea of an enshrined rollup, like Optimism, Arbitrum, ZK Sing, Polygon, everyone takes an opinion by default. Like, everyone is an opinionated application of technology. Maybe the enshrined rollup is the least opinionated type of rollup that we can get. And because it's inherent ties to the Ethereum Layer 1, it also expresses itself differently.

• 19:11Speaker 00

  Right, there's basically only one way of building an enshrined rollup, which is to take the EVM as it is and just snarkify it. End of story. You can't be opinionated like doing an airdrop, for example. You also, one of the also big disadvantages of the Enshrine rollups is that they won't have the first mover advantage by a long shot, by five to 10 years. And so, you know, a lot of the network effects might already be established so that the Enshrine rollups maybe won't add that much value when they do come.

• 19:41David Hoffman?

  Okay. And then, again, who is, between the spectrum of theoretical idea to actually getting implemented into Ethereum, like, who is working on this? Where is this in development? How early are we on this, on this particular subject?

• 19:55Speaker 00

  Right. So ironically, it's, to a very large extent, the application layer rollups that are doing the development for the Enshrine rollups. Because the whole snark, you know, tech stack is basically moving, is being subsidized almost like by VC money, billions of it, accelerating it, and we'll just be able to reap the fruits.

• 20:19David Hoffman?

  Okay. Beautiful. Okay, so, waiting for, is it specifically the ZK rollups that are doing this engineering? Or is there optimism and arbitrage too?

• 20:26Speaker 00

  It's mostly the ZK rollups.

• 20:29David Hoffman?

  Mostly the ZK rollups. Okay, so that technology, we're going to be able to, we're just letting the ZK rollups build and deploy, test the actual computation, test the technology, and then when it's time, when it's ready, be like, hey, we can unbundle that technology, apply it to Ethereum at the layer one, snarkify the ZK, the EVM. Does this make, wait, does this make, the EVM a ZK EVM? Is that what this is?

• 20:51Speaker 00

  Yeah, exactly.

• 20:52David Hoffman?

  Oh.

• 20:53Speaker 00

  And one of the consequences is that, you know, the meme will be, you don't need to be a validator on your Raspberry Pi, you can be a validator on your smartwatch.

• 21:01David Hoffman?

  Ah, can you elaborate on that? What does that mean?

• 21:05Speaker 00

  Right, so, one of the, you know, the big computational expenses of being a validator right now is you need to run a GEF node, and you need to verify every single transaction and whatnot, and that's very expensive. When you have a ZK VM, just verify a snark, takes a millisecond, your smartwatch can do that.

• 21:23David Hoffman?

  So it doesn't need, my smartwatch doesn't need that much computational power?

• 21:27Speaker 00

  You won't need much computational power to be an Ethereum validator.

• 21:32Speaker 02

  Can you talk maybe about today, how like the proving and verification time works on L2 and why having high-powered sequencers, you know, makes this more viable there than eventually have, like, what do we need to go from like a couple of high-powered sequencers on L2 producing and verifying these proofs to like every validator and every node and my client on L1 being able to do it, you know, within 12 seconds?

• 22:00Speaker 00

  Ah, right. Okay. So like one of the the big difficulties right now is basically the the latency of producing the proof. So what happens is that there's only settlement, let's say, every 10 minutes or every hour, and the proving process is done on these huge like machines that are rented on AWS. And the proving is not very decentralized and it's very high latency. What's going to happen is that we have this technology called called folding. And so we're going to be able to take this big computation, break it down into small pieces and kind of maybe potentially give these small tasks to different low-powered provers and they can all

• 22:41Speaker 00

  collaborate trustlessly to make the proof. And one of the reasons why we're going to be able to reduce the latency dramatically is because because we won't be working on these big chunks. So we'll, we may be able to prove like one transaction at a time. And so the the ultimate latency will just be of one transaction, but actually maybe it will only be the latency of one op code. So you break everything down into op codes and then you kind of stream the op codes through.

• 23:09Speaker 02

  So you're taking the computation and making it into byte-sized chunks that can fit for more.

• 23:14Speaker 00

  Into a stream, yeah.

• 23:15Speaker 02

  Yeah. And this is, this sounds a lot like the the Nova technology that you and I were talking at Zuzzalo. Is that what this is?

• 23:21Speaker 00

  Yes, exactly.

• 23:22Speaker 02

  Okay. There's a bankless episode for that. It's on YouTube.

• 23:24Speaker 00

  And then another aspect of this will be hardware acceleration.

• 23:27Speaker 02

  Okay. You want to unpack that a little bit?

• 23:30Speaker 00

  Yeah. Okay. So we we got it down to just proving one op code and that might take, I don't know, half a second. But once you have hardware acceleration, it might only take five milliseconds.

• 23:41Speaker 02

  What does that unlock? If we're if we're cutting off basically half of a second, how, what does that unlock?

• 23:48Speaker 00

  Um.

• 23:49Speaker 02

  Or is it just cool?

• 23:53Speaker 00

  Yeah, I mean, one of the complications, I guess, is, so one of the things that unlocks is decentralization. In the sense that we might go from, you know, just one prover, which is distributed to a thousand redundant provers. And they potentially, these provers can be at home. So, you know, you at home, you'll have this little box, which is the size of a shoebox. And you'll be able to single-handedly prove that Ethereum transactions are all valid and produce a snark. And if we have a thousand people doing that at home, and 999 of them go offline, and you're the only one that's online, Ethereum can keep on running.

• 24:36Speaker 00

  And so this is this property, which is called strong liveness, where you only need one single person to be online and honest for the Ethereum to keep on running. And, you know, it's a bit like the ceremony, the trusted setup.

• 24:51David Hoffman?

  Right, yeah.

• 24:52Speaker 00

  So we just need one person to be honest. And, you know, at the minimum, we want 100 people. But, you know, we feel much more comfortable if there's a thousand people. And we feel even more comfortable if we have 100,000 people, which is what we have right now. And I think having a thousand or maybe a few thousand people around the world, just like we have thousands of people running Ethereum nodes around the world, is going to be more than enough redundancy.

• 25:15David Hoffman?

  Okay. I'm going to do something, I'm going to do something a little ambitious, which is connect the dots from everything we started to where we just finished, and see how much I just retained. I think I can do this. So here we go. So we have this rollup-centric roadmap of Ethereum. The optimistic rollups are well on their way. The ZK rollups are the kind of the newest frontier. The optimistic rollups are kind of competing on governance. The ZK rollups are the technology that we've been focusing on so far in this conversation. As the ZK rollups have matured, and again, we have 4844, which is going to like take off the brakes for a lot of these things, which is how we entered this conversation. The ZK rollups, like ZK Sync and Polygon ZK Tech as well, is contributing to the ZK technology

• 25:58David Hoffman?

  that if the Ethereum Layer 1 will be able to extract the kernels of that technology and apply it to the Layer 1. And we are going to take the EVM, which is how Ethereum goes from block to block to block with executing transactions. And we're going to turn that into a ZK EVM. And with further adaptations in cryptography, this Nova thing, again, there's another Bankless episode for that. You combine that with the ZK EVM and you kind of like shard computation. And so the ZK EVM, going from the Ethereum Layer One EVM to a Ethereum Layer One ZK EVM, makes proving blocks very, very simple and easy for the individual. And then we can take that a step further and we can take all of that proving and shard

• 26:42David Hoffman?

  that out to many, many thousands of people. And so more people can participate in the proving of Ethereum. And the significance of this is that what we are doing is we are requiring fewer and fewer honest actors to make the Ethereum protocol work. And actors also can be devices too. And so which devices can actually participate in making Ethereum function honestly? That barrier becomes so low. And so like right now, there's always a conversation like, how could Ethereum be stopped? And at this point in time, too many devices have enough computational power to make Ethereum so decentralized that the answer of like, how do you stop Ethereum is a similar question

• 27:26David Hoffman?

  to like, how do you stop water from flowing downstream? That was my summary of this. How was that?

• 27:32Speaker 00

  Perfect.

• 27:33David Hoffman?

  Nice. Okay. Okay, so that was 4844. Where did 4844 fit into that conversation? Because we started there, but does that really pertain to the ZK EVMing of the Layer One? Or is that more kind of adjacent downstream of similar technologies?

• 27:50Speaker 00

  I think 4844 is kind of the initial motivation that got so many entrepreneurs and so much VC money to flow in to really push this technology development forward. But yeah, we're going to reap the benefits as a community by having scaling in the short term. Like initially, we were thinking of having these Enshrine rollups, so-called Phase Two in the roadmap, much earlier on. And it would be done by ragtag teams of developers that are not very well funded. There's not that many of them. And we would have never made it. So this was the correct strategic move to kind of open up kind of slightly more of a commercial space, I guess. But you know, we're gonna go back full circle and eventually

• 28:35Speaker 00

  we will have these like maximally credibly neutral and shrine rollups that have the exact same security properties as Ethereum 1.

• 28:43David Hoffman?

  Okay, so with this conversation, I was trying to go short, middle, long term with Ethereum roadmap. And it sounds like we did that specifically with rollup technology. So we covered that vertical. So let's do that again with the next thing that I think is also in the short term roadmap, which is PBS, proposer builder separation. So if you're a long time bank list listener, you know what PBS is, but maybe we can start from the beginning. And what is in the short term for PBS? And then how does it extend into the future?

• 29:10Speaker 00

  Right. So one of the things that I expect in the short term is this concept of MEV rebates and optimal execution. So right now, when you make a transaction on Ethereum, it goes to this public mempool. And basically, you have like sharks eating at whatever flesh is available around that transaction. And it means that you don't have optimal execution. So for example, if you want to buy a token on Uniswap, you just don't get the optimal price. You lose a few percent.

• 29:39David Hoffman?

  You get bitten along the way.

• 29:41Speaker 00

  Right. And so there's this concept of an encrypted mempool, which gives you a rebate. So instead of publishing your transaction publicly, you publish it to this encrypted mempool. And the way that the rebate mechanism works is that you have so-called searchers, these sharks, that actually turn from bad guys to good guys. So they try and identify all the flesh. And then they tell you, okay, here's all the flesh. And they'll basically pay you to put them to get the flesh. So you...

• 30:15David Hoffman?

  They say, hey, here are your vulnerabilities. Here is where you are being an inefficient actor in your transaction. Here's where you're going to get arbitrage.

• 30:24Speaker 00

  Yes.

• 30:25David Hoffman?

  Here's all your fleshy belly that you have exposed. I will pay you money to eat your belly.

• 30:31Speaker 00

  Yeah, I'll give you back all your flesh, except for a little bit.

• 30:34David Hoffman?

  Except for I'm taking a little bit. So the shark turns into a piranha. And you're like, you have one little nibble, and that's all you get.

• 30:41Speaker 00

  Right, exactly. And the reason why they only take a little bit is because it's a competitive market. The searchers are competing against each other to return as much flesh as possible to the user.

• 30:49David Hoffman?

  Piranhas are known to be cannibals.

• 30:52David Hoffman?

  I actually don't know if that's known, but I think it's a good metaphor.

• 30:55Speaker 00

  So yeah, that's kind of in the short term. I mean, in a way, it's it's almost before PBS. It's like user facing and it's going to happen in the wallets. One of the downsides today of this approach is that we don't really have the technology to make it trustless. And so what's happening is we have 10 different companies that are each offering their centralized trusted encrypted mempool.

• 31:19David Hoffman?

  And this Who are these companies?

• 31:21Speaker 00

  So there's Flashbots, there's BlockNative, there's BlocksRoute, there's, you know, many, many others. And so this actually makes it difficult for the wallets. So for example, Coinbase Wallet and MetaMask, like they don't know which one to connect to. And so really the users are not reaping the benefits. Only the very advanced users who know that they need to point their RPC endpoints to some other encrypted mempool get the benefits. And really, most users are unsophisticated. They're not going to change the RPC endpoint. And so what we need right now in the short term is a standardization effort in order to to get everyone on the same page. And then there's also going to be a technology phase where we'll be able to have a trustless,

• 32:06Speaker 00

  or at least a trust minimized encrypted mempool. And the way that I see it is as a progression of technology. We have centralized encrypted mempools. The next step is SGX, Trusted Hardware. And this is what Flashbots is working on with Suave. The step after that is threshold encrypted mempools, where you're trusting a committee of, you know, semi trusted

• 32:30Speaker 00

  entities to kind of decrypt the transactions after they've been confirmed. And then there's kind of the the end game, which is delay encryption, where you're not trusting anyone, you're only using pure cryptography and physics. And the way it works is that you encrypt your transaction and then through time, the the the transaction automatically decrypts itself after a few seconds. And you can't accelerate the the the decryption, you know, because of the laws of physics.

• 33:01David Hoffman?

  Okay, going back to the same question of where are we on this between theoretical cool sci fi idea and EIP that gets put into Ethereum? Where are we on this landscape?

• 33:14Speaker 00

  Right.

• 33:17Speaker 00

  I've so like, I think tomorrow after tomorrow, there's going to be this, this, this event and this dinner around the standardization.

• 33:25David Hoffman?

  Tomorrow is July 18th for the day of the day of recording.

• 33:30Speaker 00

  So I think what's going to what's going to happen is some of the big wallet operators are going to come together with the searcher community and say, okay, here, we need, we need to come to standards because the users are not making use of that.

• 33:44Speaker 00

  And instead of an EIP, it's probably going to be an ERC.

• 33:48David Hoffman?

  Okay.

• 33:48Speaker 00

  There's going to be some sort of community standard that's outside of consensus. That's going, that's going to emerge.

• 33:55David Hoffman?

  Okay. So how, remind me again, how this fits into the PBS conversation?

• 34:01Speaker 00

  I guess it's, it's related to, to MEV. It's, it's before the builders, actually. It's actually at the searcher and user level. But the, the reason why I mentioned it is that it's, it's the main thing that's coming in the short term.

• 34:12David Hoffman?

  Okay. Define short term for me.

• 34:16Speaker 00

  Next, within the next 12 months.

• 34:18David Hoffman?

  Next 12 months. Okay.

• 34:19Speaker 00

  Yeah.

• 34:19David Hoffman?

  And but PBS, is PBS coming inside of 12 months?

• 34:23Speaker 00

  So we already have a form of PBS called MethBoost.

• 34:28David Hoffman?

  Right. Which is like off chain PBS.

• 34:30Speaker 00

  Off chain PBS.

• 34:31David Hoffman?

  Right.

• 34:33Speaker 00

  And PBS, if you had asked me a few weeks ago, I was very, very scared because it was kind of this monster update, very similar to the merge. Let's just keep growing and growing in, in, in scope. But actually, in the last few days, we realized that most of that can just go away. And there's this kind of this core EPBS that we can incrementally upgrade over time. So that would be kind of a medium term thing, let's say, two to three years, where we deploy core PBS and then all the adjacent things like inclusion list, for example.

• 35:08David Hoffman?

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• 35:52David Hoffman?

  I already know that you have MetaMask wallet, so go check out your MetaMask portfolio. Learn more at metaMask.io/pot portfolio. Mantle, formerly known as BitDow, is the first DAO-led Web3 ecosystem, all built on top of Mantle's first core product, the Mantle network. A brand-new, high-performance Ethereum Layer 2 built using the OP stack, but uses Eigenlayer's data availability solution instead of the expensive Ethereum Layer 1. Not only does this reduce Mantle network's gas fees by 80%, but it also reduces gas fee volatility, providing a more stable foundation for Mantle's applications. The Mantle Treasury is one of the biggest DAO-owned treasuries, which is seeding an ecosystem of projects from all around the Web3 space for Mantle. Mantle already has sub-communities from around Web3 onboarded, like Game7 for Web3

• 36:36David Hoffman?

  gaming and Bybit for TVL and liquidity and on-ramps. So if you want to build on the Mantle network, Mantle is offering a grants program that provides milestone-based funding to promising projects that help expand, secure, and decentralize Mantle. If you want to get started working with the first DAO-led Layer 2 ecosystem, check out Mantle at mantle.xyz and follow them on Twitter at @zeroxmantle. Arbitrum is accelerating the Web3 landscape with a suite of secure Ethereum scaling solutions. Hundreds of projects have already deployed on Arbitrum 1 with flourishing DeFi and NFT ecosystems. Arbitrum Nova is quickly becoming a Web3 gaming hub, and social dApps like Reddit are also calling Arbitrum home. And now, Arbitrum Orbit allows you to use Arbitrum's secure scaling technology to

• 37:18David Hoffman?

  Build your own Layer 3, giving you access to interoperable, customizable permissions with dedicated throughput. Whether you are a developer, enterprise, or a user, Arbitrum Orbit lets you take your project to new heights. All of these technologies leverage the security and decentralization of Ethereum and provide a builder experience that's intuitive, familiar, and fully EVM-compatible. Faster transaction speeds and significantly lower gas fees. So visit arbitrum.io, where you can join the community, dive into the developer docs, bridge your assets, and start building your first app with Arbitrum. Experience Web3 development the way it was always meant to be: secure, fast, cheap, and friction-free. Alright, so that's the PBS. Now, Justin keeps on talking about encryption, so I'll throw him an underhand.

• 38:01David Hoffman?

  And he's like, "Okay, but I can talk about ZK snarking that, or I can talk about encrypting that." So that's PBS and 4844. I feel like we've covered those pretty well.

• 38:11Speaker 00

  Well, one big thing around PBS is kind of the end game, which is MEV burn.

• 38:16David Hoffman?

  Ah, okay. Okay, let's go there. Let's go there, because, Justin, you had a talk yesterday about MEV burn. And of course, we had that fantastic Bankless episode. Yeah, place us in history around MEV burn. Like, where is that coming? And when is that coming?

• 38:29Speaker 00

  Right, so one of the dependencies of MEV burn is Entry and PBS. And inclusion list is actually a requirement. And the reason is that MEV burn is very opinionated. It says that "we will only include on Ethereum the most valuable blocks and nothing else." And so...

• 38:47David Hoffman?

  The most valuable blocks as defined by the free market? Because the free market is the thing that comes to Ethereum and says, "I will pay this much money for this block."

• 38:56Speaker 00

  Exactly. So the free market determines what is the most valuable block. But that has a downside... Well, it has actually upsides with censorship resistance, but it also has a downside, which is now that there's a very clear price that you can pay to actually censor transactions. And if you just keep on paying this price, which is very, very high, but nonetheless, it's a possibility, you can just keep on censoring this transaction. So if you're willing to pay, let's say, you know, 1 if per block or 10 if per block, you can just censor transactions indefinitely.

• 39:23David Hoffman?

  And we're burning that Ether.

• 39:25Speaker 00

  We're burning that Ether.

• 39:26David Hoffman?

  So for a very, very high price of burning a lot of Ether, you are allowed to censor transactions.

• 39:31Speaker 00

  Exactly, yes. And but we don't like that.

• 39:33David Hoffman?

  And so we I know, I know, I know. We like Ether burn, but we don't like censorship. We'll take censorship resistance over Ether burn. Okay.

• 39:42Speaker 00

  So there's some individuals out there, some stakeholders, for example, Vitalik, who just doesn't run MEV Boost. He says, okay, I'm just going to build like dumb blocks that are not optimal, but at least we have censorship resistance. And so every once in a while, you know, Vitalik will be building the block. And then if it so happens that the sensor transactions, Vitalik will include them. But we don't want to be relying on altruism. We want, you know, it to be incentive compatible. And inclusion list makes it incentive compatible. It's basically a way to get sensor transactions on chain, to force them on chain without having to pay any financial penalty. So you get both the optimal block that the market gives you and you get censorship resistance.

• 40:26David Hoffman?

  And again, where is this in the roadmap?

• 40:30Speaker 00

  So I would say, you know, four or five years, because first we need EPPS and then we also need inclusion list. And then finally, MEV burn.

• 40:40David Hoffman?

  Tim, I just want to throw to you like thoughts and reflections around like the whole list of conversation that we've been having.

• 40:46Speaker 02

  I mean, I don't think I have anything to add on MEV burn and ZK, ZK-ing at EVM and L2s. I think the other big part is the whole stateless bucket.

• 40:59Speaker 02

  Yeah, I don't know if you want to go there now, but yeah. So that's probably the other big incentive incompatibility in Ethereum now. So we have, so just for background for the listeners, the Ethereum state is all the addresses, all the contracts, all the data and the contracts.

• 41:16David Hoffman?

  And it's the size of Ethereum.

• 41:19Speaker 02

  Right, but just the current balances. So it's your balance at this block, not your balance, you know, a year ago. And so everyone's balance, everyone's NFTs, all the Uniswap pools, all that stuff.

• 41:30David Hoffman?

  The working memory of Ethereum?

• 41:32Speaker 02

  Yeah, yeah, basically, you can think of it as like the RAM of Ethereum. And the problem is that writing to the state is like a one-time cost. You know, you pay to do this, but then like nodes need to literally store this forever. Histories, there's things you can do, you can just literally not store it and just verify that, you know, at this point, the history was correct and really delete it. But the states, you need to know it because it's like, I need to know that your balance in this account is like this many. Ideally, we would like to bound this in a way so that as Ethereum grows, as there's more users, it doesn't become like unmanageable to keep everyone's balances. And so the idea with stateless is to move to a world where the average node does not store the entire state.

• 42:15Speaker 02

  Only like high-powered builders have to store them. And when they produce a block, they produce a proof of the state changes. That sort of only gives you, you know, the changes that happen in this block. And you can verify that like this is actually correct and, you know, no protocol rules were broken. The challenge of getting there is today we store all the Ethereum data in a tree called the Merkle Patricia tree. It sort of looks like a Christmas tree, so it's like very like long and narrow. And so making your proof, you sort of have to go from the top all the way down. And those are like big proofs to gossip over the network. So what we'd like to do is move Ethereum's tree from looking like a Christmas tree to looking more like a bush, which is like wide and short.

• 43:00Speaker 02

  And then the proofs become just again, from the top to the bottom, like much smaller. And so this is probably one of the next big things we'll be working on after this then COON upgrade is transitioning the tree, like the database structure of Ethereum from one to the other, so that we can eventually have the nodes not store all the state.

• 43:19Speaker 00

  So to put this in terms of computational resources, right now, you need a Raspberry Pi for the computation, but you also need this pretty large hard drive. You need about a terabyte or two. And so statelessness is a way to remove the hard drive. And you can think of it as being an intermediary step to full ZK VM. It's kind of halfway through where you remove the Raspberry Pi itself. And then now you just replace it with a smartwatch.

• 43:49David Hoffman?

  So the understanding some of the connections here, I think these things start to weave together. But we started with talking about with a rollup centric roadmap and how that turned into the ZK EVM on the layer one and then trying rollups. And that's with ZK technology, which is cryptography. Then the next thing that we talked about is encrypted memphis, right, which is also cryptography. And then now we're talking about stateless clients, which is like pruning a lot of data with cryptography. It seems to be like, and Justin, there's a line that that you said once upon a time that really stuck with me. I think it's on your very first podcast episode that we did, which is if you can't do something with cryptography, do it with crypto economics, but if you can do it with cryptography, do it with cryptography.

• 44:34Speaker 00

  Exactly.

• 44:35David Hoffman?

  And it seems like these, all of these three tracks of Ethereum's roadmap seems to be very, very heavily focused on cryptography. You have a comment on that?

• 44:44Speaker 00

  Exactly. I mean, in all three cases, we're starting with kind of the economic side of things. And then we can incrementally upgrade with cryptography. If you take the EVM, you know, we just went through the economic way of, I guess, everyone needs to pay the cost of doing the verification. And then we, we removed that, that kind of this, this trust assumption that, you know,

• 45:06Speaker 00

  an honest majority is all agreeing on the state and the same with the encrypted memphis. We're starting with totally centralized encrypted memphis and then we make them trustless.

• 45:17Speaker 00

  Yeah, that is, that is the theme. And one, one of the amazing things, I didn't even realize it was possible until a few weeks ago. We can completely solve safety of blockchains with cryptography. So there's two things that consensus traditionally solve is safety and liveness. And one of the aspects of safety is this thing where you can revert finality. So right now, today, we have this notion of economic finality. It's a very, very strong notion, which says that if you have two inconsistent finalized checkpoints, meaning you had a checkpoint that was finalized and then it got kind of reverted and you got another finalized checkpoint. One third of the validators will get slashed.

• 46:02David Hoffman?

  One third of all state ETH will be burned, which is, you know, billions of dollars.

• 46:07Speaker 00

  Yeah, something like, you know, 13 billion dollars. And so it probably won't happen. But it turns out that with pure cryptography, you can have perfect finality, which is impossible with the laws of physics and cryptography. And the key unlock was quantum mechanics, which was a big surprise to me because for the last five years, you know, we've been doing research on defending against quantum computers. But now we can actually leverage their power, their very unique properties to be constructive about it. And the key primitive that I'm looking at right now is called one-shot signatures, which was discovered in 2020. There was this amazing paper, which kind of pretty much went unnoticed for three years.

• 46:50Speaker 00

  But it solves finality. It gives us perfect finality. Another consequence is that we can reduce the threshold for finality from 66% to 51%. It solves trustless delegation, meaning that we can have protocols like Lido and Rocketpool that have no trust whatsoever in operators, that don't need any collateral. And it, you know, it potentially also solves restaking. It also gives us this notion of quantum money, which is a way to do the Lightning Network without routing. So one of the big complications of the Lightning Network is that you need to find this route of channels between the sender and the recipient.

• 47:35Speaker 00

  And more often than not, there's just going to not be enough liquidity in those channels. Whereas with quantum money, you can, you just need one hop and you don't need these channels with liquidity. And then kind of another kind of crazy application is proof of location, where because you have these keys that are unclonable, you can prove to the world that you're in a specific geographical location using latency and the speed of light. So the way that one-shot signatures, so what they are is basically a way to have a private key which can only sign a single message, and then it destroys itself. How does it work?

• 48:18David Hoffman?

  Sorry, and it must, it is a quantum innovation. This is quantum computing that we're talking about.

• 48:24Speaker 00

  Yes, it's a quantum innovation. And there's two key properties of quantum mechanics that we're leveraging here. The first one is no cloning. So your secret key is a unknown superposition of states. And you can prove that it's unclonable. So you can't have two copies of it. And then the second property of quantum mechanics is the destructivity of measurement. Once you measure the private key, which you need to do the signing, it collapses the state, effectively destroying it, meaning that you can't sign a second message.

• 48:56David Hoffman?

  So quantum, the word quantum, it starts to get, like, people will probably perceive that be like, it's so far out there that it's so abstract. But this is not a, this is not a research and development problem anymore. This is just like, we just have to build it, correct? Like, it's a known quantity?

• 49:12Speaker 00

  No, it's very much R and D.

• 49:15David Hoffman?

  But we know it's possible, right? It's not like theoretical.

• 49:17Speaker 00

  We have a possibility result. And now, you know, confidence shoots up to actually do the R and D.

• 49:23David Hoffman?

  Okay, right, right, right, right, right. Okay, that's what I mean. It's like, this is a sure thing. We know that it works. We know that it works this way. Now we just have to build it.

• 49:31Speaker 00

  Exactly. We know it's possible in theory. Now we can just go ahead and try and build it in practice. And, you know, in the very, very long term, maybe 30, 40 years, we can have one-shot signatures at the layer one. But the cool thing is that these things can provide a ton of value outside of consensus. And we don't need, you know, many quantum computers. We just need one. Because now we have this one entity that, you know, we can delegate to. And we know for sure that they're not going to rug us. And so they're kind of this trustless quantum entity.

• 50:02David Hoffman?

  And so, just again, a single-shot signature, like, there's that old Call of Duty game, One in the Chamber. You have one bullet in the chamber. As soon as you fire it, it's all you got. Like, you throw it away. And so they're like disposable addresses that only have one signature. And I think what you're saying is that the assurances that you get from one single address only being able to sign one transaction once, or one signature once, opens up a world of new use cases that provides a lot of trustlessness.

• 50:31Speaker 00

  Exactly. Now, traditionally, you could do these one-shot signatures with trusted hardware. But that kind of sucks. You want to do it with pure cryptography. And for a very long time, I didn't think it was possible. But it is.

• 50:42David Hoffman?

  Cool, okay. Again, on the theme of Ethereum has a lot of cryptography in its roadmap. There's one thing I want to touch on that that I want to go back to talking about statelessness. When we have stateless Ethereum, how does that change how Ethereum is expressed? Like from the end users, like what does it meaningfully do to Ethereum? Like, what can we unlock with that? I want to make sure I round out that conversation.

• 51:04Speaker 02

  So the biggest, I guess, if you think of the end user as a person sent into transaction, hopefully, nothing. So if you're using, you know, a wallet, sending a transaction, hopefully, nothing changes. And that's good in terms of just UX. If you're running a node, the idea is that the amount of disk space that you need doesn't grow to infinity. And if you think of it like, you know, through the economics angle, this is like the last broken thing on Ethereum in a way where you pay once and then you get to like be on everyone's hard drive forever. So this allows kind of the economics to match this where like we can decide that only the block builders need to keep the full state. You can keep a copy.

• 51:44Speaker 02

  So, you know, say that you have all these like balances and, you know, all these contracts that you're in. You could have your own like local copy of just like David's stuff or just Justin's stuff. But you don't impose that cost on everyone. And so that means of like, yeah, running a node, you know that you're never going to need like a terabyte of RAM or a terabyte of like, or an ever growing amount of storage just to keep up with not even the chain history, but what's on the network today.

• 52:10David Hoffman?

  I think a big theme of the Ethereum roadmap has always been about sustainability. Like, how do we make this thing sustainable? And that's been about like, hey, let's go from proof of work to proof of state because proof of state is more efficient. It makes the system more sustainable. And then the whole state growth side of Ethereum is this conversation. Like, I remember throughout 2017 through 2020, we were all bullied by the Bitcoiners because they said that we could never run Ethereum node and that our state growth or the Ethereum node would run to too many terabytes. Turns out that never happened. But also, we had the solution always in the back pocket, which was statelessness. And so what you're saying, Tim, is like, when you make a transaction, that is data that goes on to the Ethereum blockchain, that grows the size of the Ethereum blockchain. And I have to pay one gas fee and then every node across the world.

• 52:53David Hoffman?

  Has to download my data and store it forever. And so that is not sustainable because it's one cost for one person once. And then it's also a one cost for every node operator now until the end of time. Like it's just unbalanced.

• 53:06Speaker 02

  Exactly. Yeah.

• 53:06David Hoffman?

  And so this makes this more sustainable because of statelessness. You can prune the blockchain and still have complete trustlessness.

• 53:14Speaker 02

  And it's not even, when you say the blockchain, just to be clear, it's not like the past history, the past blocks. It's like you, David, can prune everyone except yourself.

• 53:23David Hoffman?

  Right.

• 53:23Speaker 02

  But then if you get a block, if I make a transaction in the block, there's just a little proof attached. It says, hey, Tim actually had, you know, the one that he spent or the one, you know, NFT that he sold.

• 53:32David Hoffman?

  Right.

• 53:33Speaker 02

  Yeah.

• 53:34David Hoffman?

  The, this is, I love how this is all cryptography based. One theme about cryptography that I think if listeners aren't familiar with, which we should 100% pull out, is that it shifts power to the individual. It fundamentally makes individuals have the same amount of capabilities as large scale institutions. And so while we're talking like, wow, it's cool that all of these themes that we're talking about on the Ethereum Rob app is like, here's what we can do with cryptography. I bet if we ran back this conversation, we could do it again through the lens of, and this is how it benefits the individual. This is how it protects the individual and elevates the individual to be a first class citizen, no matter what their resources are. That's my intuition here.

• 54:11Speaker 00

  Right. And one of the few things that doesn't use cryptography is the monetary policy. And the word sustainability here is just so important. And kind of, you mentioned Bitcoin as it is kind of ironic because that monetary policy is just not sustainable. Cause it doesn't provide this guaranteed security. And so the way that I see the, the kind of end game for the monetary policy of Ethereum is kind of this, this two phase components that are summarized as sustainability. On the one hand, we have minimal viable issuance, which means that we have.

• 54:45David Hoffman?

  Also perhaps maximally sustainable issuance.

• 54:48Speaker 00

  Sure, right, because it's not unnecessarily dilutive and it gives us the security that we need. And then, on the other hand, we kind of have the maximum viable burn. So whatever economic value that is being provided on Ethereum, we get to capture it as a community. And it started with EIP1559, where we basically, the network is able to capture congestion fees. The next step is MEV burn, where we can capture the value from contention, basically transactions contending to be at the very top of the block. And then, the final thing is restaking yield, which it turns out we can also burn. And

• 55:33Speaker 00

  so, in a way, the minimum viable issuance, we've reached the endgame with the proof of stake and the merge. But the burn, we're actually only in one of three phases.

• 55:46David Hoffman?

  Okay, so the economics of Ethereum is going to stay the same as a meme, like, we've gotten there. Like, we were at the minimally sustainable issuance.

• 56:00Speaker 02

  Maximally sustainable.

• 56:01David Hoffman?

  Maximally sustainable issuance, or yeah, but we get to improve upon it across many more vectors to make it even better.

• 56:08Speaker 00

  Right, exactly. Specifically, on the value capture part of it.

• 56:13David Hoffman?

  Justin, Tim, this has been a great exploration into this sci-fi future of Ethereum. So, thank you for helping me navigate. I think I learned a ton, and I'm sure the Bankless Nation has as well.

• 56:21Speaker 00

  Thanks for having us. Yeah, thanks. Merci.

• 56:24David Hoffman?

  Merci. If there's any information or people, like, where should people point to if they want to learn more?

• 56:31Speaker 02

  Twitter. It depends how much you want to learn. So, if you just want some updates, Twitter's probably a good place. If you actually want to work on this, the Ethereum R&D Discord is a great place, ETH3 searches as well. Just show up there in one of the threads, and yeah, you'll get to work with Justin.

• 56:49Speaker 00

  Yeah, you can reach me on Twitter. I have open DMs, and more often than not, I'll reply to questions. But...

• 56:55Speaker 02

  It's a bold commitment.

• 56:58Speaker 00

  One thing that I do enjoy as well is just random people telling me, oh hey, I've heard about this one-shot signatures. And actually, I just had lunch with someone who came to me. And so if you are interested in this cool technology, do reach me out.

• 57:12David Hoffman?

  All right. We will put all their Twitters in the show notes, Bankless Nation. You guys know the deal. Crypto is risky. Ethereum is risky. DeFi is risky. Probably cryptography might be the less risky thing that we do, but also perhaps not. I don't know. You can lose what you put in. We are headed west. This is the frontier. And it's not for everyone, but we're glad you're out with us on the Bankless journey. Thanks a lot.