When you look at the theorem, it's a bit more like the network effects connectivity at the base layer for computation, which starts to remind like that's a bit like you would say what would be deficient for the Internet. That's why you also have to talk about this one one tier vision and just say it. So clearly protocol maintenance is the material foundation role and it should be scalar one by scale blobs. Now we improve the interop and UX just to show that network effect on the journey.
Builders that they want to build something, they should choose experience because it is the most securely, most robust. Should be the default for them. Want to improve the UX in order to don't even need to be a way of blockchain exist in the app. So I think it takes some time to improve our wireless systems and it takes some time to provide a very good pipeline for the app layer to improve the UX. But I think this world won't be too far away. We increase the L1 block space
and still the the fees are lost. So why would you do that? Clearly this is a commitment to the future, so everyone can be very confident that L1 will scale. So we can build on L1, we can build more L twos, that we are very safe building an L2 that we plan to scale 8 * 16 times per times over the years. And an L1 will always be there and will be the best platform to launch L2. Welcome to Epicentre, the show which talks about the technologies, projects and people driving decentralisation
and the blockchain revolution. I'm Federica Anst and today I'm speaking with Thomas Stanchak and Xiao Wei Wang, who are both the new Co executive directors at the Ethereum Foundation. So Thomas previously founded a company named Nethermind that builds infrastructure in the Etherium space, including a very well respected client. And Xiao Wei has been a researcher with the Ethereum Foundation for, for ages
actually. And you both have come in kind of after a period of unrest from the Ethereum community earlier this year. So kind of I'm super interested to kind of hear your visions for, for how the Ethereum Foundation will evolve over the next coming years. But before we dive into that, let me tell you about our sponsors this week. If you're looking to stake your crypto with confidence, look no further than course one.
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Deploy on the EVM compatible Gnosis Chain or secure the network with just one GNO and affordable hardware. Start your decentralization journey today at gnosis dot IO. So weigh in too much. Thank you so much for coming on. Thank you for having us. Thank you so much for the invitation pleasure. The honour is mine. So maybe before we kind of dive into Ethereum foundation stuff, tell us about kind of like how you guys got here respectively.
So kind of like what, what, what brought you kind of like to the chair you're sitting on on this present day? Yeah, sure. So for for me, it was almost eight years journey 2017 when when Nethermind when I started Nethermind before that, actually I I joined like the atrium space of like reading and learning in 2015 sixteen. So I was observing some of the big events at that time. And the first three years at at Nethermind, it was me mostly building with with a small group of people.
Let's Nethermind implementation of Ethereum client. Fast forward few years, I went through, you know, Defy summer of the various events after the long crypto winter.
I collaborated with Flashbots and MEV Solutions Research since around 2021, like more or less the beginning of Flashbots and also worked with Start Net Foundation, built a twin stack Institutional Stake, Inc, worked on the Euler Defy project and and collaborated with Fortas. So various projects always more or less related to, to our work at Nethermind. And for Nethermind, I got the start conversation with Ethereum Foundation. I started this year in in March,
I joined, shall we? And yeah, now, now we're here. Cool. What about you? Shall we? Yeah, I joined the Sun Foundation in 2017. Before that, I mean, my background is computer science. And then I joined the the EFI was working on the sharding POC, the sharding purpose concept that was very, very aged design. And yeah. So the, the time I joined the the research team that was the small team and we started, we were working on the consensus
protocol mostly. And then during the time like the the EF, the researching has changed a lot. I mean by years, our focus keep expanding to multiple different domains and you have also changed a lot during the past seven years. And then I was a consensus R&D colleague with Danny Ryan for multiple years. And then last year I was, I shoot my Rd. from researcher to leadership at Eastern Foundation.
And then yeah, this year, I mean, recently, one month ago, I honoured to be the constitutive director with Tamash. How did this kind of shape up kind of like where you approached by Vitilik or kind of Aya to kind of see whether you'd be up for this or kind of like, I mean, there was no open application, right? So kind of like how, how, how did you guys become Co executive directors?
Yeah, I guess for share away it was maybe a simpler story which was already in. So on my side, I, I took to IA for the first time I think last last year in September in Singapore around token 2049. But then we discussed in general the challenges ahead of EF, the the leadership situation after, after Denny's departure and we discussed talent management very
various topics. So it's a longer conversation, but we didn't discuss at all like me joining EF and I, I didn't think of it. I was, I was obviously super busy with and the MITE and various other projects. And then as I was observing the situations online around the, the leadership challenges, still I, I didn't think of me joining EF, but I was just thinking of like, who'll be there, how it will affect the future of, of various ecosystem players.
Never mind how, never mind will position itself in all of this. But I had already at the time, like various discussions running with, with Aya Vitalik. Some of them are on search, some of them are on some enterprise solutions. And I reach out asking some questions.
And then when I asked if if we could have a conversation about the leadership topic again and the few meetings, interviews, discussions, meeting with the management team, meeting with Xiao Wei, when when we spend a few days together to to understand how we can collaborate, meeting with the rest of the management team. Bastian, Josh, Julian. So all of that and then gradually we agreed that.
So there was lots of discussions about how to deal with the situation with like nevermind conflicts of interest, how I will collaborate with foundation, lots of discussions.
Then joining the the Eternal Foundation offsite to, to get that soft introduction to the entire team and see what is the reception, whether people feel comfortable with that and in the context of all the challenges of this joint leadership and, and my position and I think that we were pretty comfortable with announcing it. So that's the story. And for you, Xia Wei, it was more, it was more of a natural
transition, right? More natural about this was also not that long term planned like I can openly to say it is like but IA did have so IA is now the president of the foundation boat. Yeah, she has this idea of like to have some transition more than one year ago. So but during just the EF internal we have so many things to do. So she didn't ever she couldn't make it took it happened earlier. But last year we have several conversation around like what EF
could be like. And then this conversation help us to think more about like, OK, so in 2025 we want to some internal change and then what's the how it can impact the ecosystem better. And then so such discussion triggered the to form a new leadership system in decent foundation. So, yeah, I think the story is like described and then our combination is like there were before this, there were some choices at the leadership has
been thinking about. But after all, I also participate in some discussion, but it's not my decision there. But after all, I do believe that this combination is the best for everyone and at the end also like for the ecosystem. Cool. You guys are coming, coming in at a somewhat difficult moment, right. So kind of, I think it's kind of it's well known that the theorem that Ethereum has got an amazing, an amazing technical
community, right. So I think there's no other network that is as resilient in terms of client development and kind of priority and kind of network decentralisation and and so on. So kind of like, I mean too much you, you know, this kind of like as a client developer, kind of there's no kind of like any kind of piece of code that goes in a client is kind of like is scrutinised by probably 20 very capable people and kind of this, this cannot be set for our
networks, right? So kind of like this is kind of like this level of scrutiny for kind of like open source software is, is really rare. So Ethereum really has that going for it. But kind of if you look at how the general blockchain ecosystem has evolved over the past years, kind of other chains have outpaced Ethereum in terms of throughput and usage and kind of they can do things at a lower
cost per transaction. And so I think kind of a lot of the unrest that was kind of like in the community was from this perceived lack of vision. I think there were kind of like some very, I mean, there's always kind of like this very loud kind of ethiomous money kind of crew that I don't, I don't think kind of kind of who are who are clamouring for more marketing and so on. I don't think that's actually
the thing. So kind of, I think kind of like, but but a clear vision as to how to how to shape up Etherium over the coming years. This is something that was clearly lacking. And in, in part, this is also owed to kind of like how the Etherium Foundation kind of saw itself, right? It's kind of sees itself as a steward, kind of as an enabler, but not as a commander. So kind of like other ecosystem foundations don't see themselves
that way. They kind of say this is the, I don't know, Solana road map now implemented. So while in a very broad sense kind of Etherium remains technically unmatched usage kind of tells a somewhat mixed more mixed story. So I would kind of like to use this hour to kind of talk with you guys about kind of like how we kind of reconcile that and kind of like how you guys are are seeing that in terms of, you know, future for the Ethereum Foundation and Ethereum as a large kind of yeah.
So maybe let's start off with kind of the role of the Ethereum Foundation. So kind of the Ethereum Foundation kind of it sees itself serve as an enabler, not a commander, but it is also the main funder for research, right. So kind of like how how do you see the Theorem Foundation's role evolving? You say that we are the main funding source for research and even within the Ethereum ecosystem, I think that's much more complex situation like
positively much more complex. They, there are fantastic researchers at the Etera Foundation and it's definitely, there's lots of, lots of funding delegated to, to that research that is within the EF and through various academic grants and collaborations with other players in the ecosystem. But then you look around and there are fantastic researchers
at multiple teams all around. So there are researchers at the L2 teams, fantastic level of ZK research that is interim ecosystem MEV research that leaves all the other ecosystems behind. If you think about the quality of of execution, the quality of market mechanisms that we have on Etherium, then you have the researchers on engineering scaling everywhere in all the different client teams and the funding sources for those are really diverse.
So you have fantastic VC capital coming to Ethereum and still favouring Ethereum as as the best of the chains and the best of the ecosystems. This is this also grants from various foundations that are independent of Ethereum
foundation. I think that we we see some Taos places like Nosy's that have a lot of lot of support for much of the interim values that are like the same aligned within between all those different organizations because we believe in Indus values of privacy, security, open source censorship resistance chain to bring it to to users around the world.
So now if we think that we that we deliver that message of the direction of a strategy of scaling A1, scaling blobs, improving QX and interop, it's it's still not something that is that is imposed on the ecosystem by foundation that we've just invented it internally and said to people, this is what we're doing now as a result of the hundreds of conversation with the ecosystem of this thing for the social media channels, through forums, through Telegram channels, groups, conversations
at the events, listening to to everyone and understanding those voices in depth. Why? Why this request? Why this challenges? Why the crisis? If there is crisis, what are the opportunities? And then just extracting the essence of all of these and communicating it clearly. So, so becoming this coordinator, communicator, the voice that many people are looking, looking at to, to
listen where we go together. So, so it's still the steward role and an enabler role, but it's still the ecosystem that is very decentralized and still very aligned, unified in the vision and values. That's that's connect us. I think the E FS role is resilient to the conditions in the ecosystem and it's dynamic changes over time. So like we are, we do have research, a strong research team. We do have some focus team features in the the EF like technical team.
This is the this thing should be talking on the the most important topic that no one else is working on right now. And I think that you have that would never stop like to empower other people to do more, but just for efficiency and then for what make the best impact in kind and the EF would focus on
multiple things. And also I feel like the EFS our, I mean, I mean Tomas and I in our turn, like we will like the EF to be more opinionated to some basic topics like EF's is, is neutral credible to as a coordinator to help steward ecosystem. But like the, the things we wanted to value the OR like the the technical strategy, the strategies like we want to, we want to target sooner and that seems we're we're not getting slowed by optics too much in
this in the next few years. Yeah, I mean you, you both make extremely valid points. And that kind of like the theorem of community is so strong also in part because they're they're the theorem foundation never played this kind of dictator like role in saying, look, this is the road map now follow it. But I think kind of like having some sort of North Star vision to kind of focus the efforts
from the community. This is really important because otherwise kind of like it's, it's too scattered and it doesn't, it doesn't really come together. So I, I, I totally understand that it's, it's a difficult line to tow kind of how to, how to focus these. Smart and independent teams into kind of a coherent vision, but without kind of like letting them run off kind of like completely in, in everyone's direction, right? Kind of like so yeah, I, I, I'm, I'm 100% with you on that.
And I think it's, it's, it's very also important to kind of be extremely mindful of the ecosystem we have, right? So with kind of like 2 executive directors in place, how will you guys kind of divvy it up? Will you just talk everything, everything out? Or kind of will you kind of say this is, this is your domain and this is my domain? Or how? How will this work going forward? Yeah, I think it's very regular.
But at the same time it's it's regular in the sense that we we have conversations all the time, but without some predetermined time. So I think it's casual conversation, collaboration on multiple topics, very natural splitting of responsibilities because I think both of us are just willing to pick up whatever is needed to be addressed. So I think it's like we are able to rely on each other. Just been conversations and collaboration that was very,
very fruitful so far. My father, any problems? And yeah, sometimes it's just two or three hours conversations on on various topics, internal or external and strategy and vision. Sometimes I'm a bit chaotic with talking about the vision internally and the show. I just like converse into some super distilled and clear communication sometimes to split some some of the policies and procedures. Joey has fantastic understanding of the of the internal organization of the foundation.
It's we're both super aligned to like things related to to badges to, to structure of the organization. I take advantage of the fact that I'm travelling all the time and talking to a lot of people. So big aspect of communicating through the meetings, reaching out to to community ecosystem partners, traditional finance institutions. This is definitely very often my role, but I think in Asia she is much more active. She probably you'll have much to
add here. Yeah, I think there's too much described that I and this mutual transparent communication is important. I think we, we're happy to involve each other to the different couple of sessions to with other people's and then at the same time like we usually would say, OK, this topic, OK, we're both involved.
But when there's some timing decision needs to be made, maybe one of us, you do it or I do it. And that's the, it's usually very simply, then we will divide the duty and then, yeah, the whole process, the whole collaboration is like a divide and conquer. Like I recently working on some like treasuries management stuff and then too much working on some like hiring, like the hiring team establishment,
things like that. So they will have different domains, but it's like also for the yeah, for the most important topics, we will make decisions together. I think this divide, this division would happen naturally. Yeah. I, I, it sounds like it's, it's a very symbiotic kind of relationship where kind of you, you talk a lot of things out and then kind of assign responsibilities kind of ad hoc or kind of like in a more structured way. Fantastic.
So kind of we've talked about kind of like how you guys kind of work together. Maybe let's talk about kind of this notion of narrative leadership. So kind of like there have been kind of a number of a number of different ideas of what Ethereum is and what Ethereum should be kind of like ranging from kind of like the word computer to kind of money essentially. How have you guys aligned on kind of like which of these visions to support and to kind
of build towards? Yeah, I think the Etherium has this aspect of plurality of vision. So we like when you when you look at the ISM Vitalics documented, it really draws the vision for Etherium and the values. It really reminds the values of Etherium. And we keep reminding them that's all about privacy, security, open source access, censorship resistance on the chain and the protocol. So they within the plurality of visions.
I, I think that many people proposed over many years like directions, which were either specific of what they were building or specific of the times of various challenges in the eternal space, right. So we were talking about word computer and I think this was computer with with AI is still something that very much resonates with with what we're
building. There were discussions about ultrasound that the global settlement and I think for when we talk about defy and L twos and enterprise, that's global settlement layer really has the great meaning and and remains very important for friterium. And then you had also the visions of really like pure ultra decentralization and many people who fight for for privacy decentralization for like maximal censorship resistance are are very important for the
vision of etherium. All of that matters. And I think some other aspects of it are very often realized by many L twos. And I feel that for a particular North stars that are slightly, slightly more narrow scope this for L twos define their North stars and compete for many of the many of the misery, many of the L ones.
So you can look at many alternative L ones to Ethereum really for us are competing with with the leading top L twos that are now as scaling, distributing Ethereum values and and reusing what L1 provides as a as a platform as a as a base for them. No for for ATM. I myself see this like both computer with AI, but general like open autonomous solution for the entire world economy.
This is very broad and I think that it's really showing like how how grandiose, how big scale of the intern vision is. And but when we when we talk about the vision, that's that Broads, it's a bit harder to tell people like how do you act within? It's like they have to find their own path. And maybe for very customizable special L twos, this is a bit easier. So they can they can go there and see, OK, this is the aspect of that world economy, world autonomous computer that I want
to build. When you look at Ethereum, it's a bit more like the network effects connectivity and the base layer for computation for for access to, to data and computation and coordination and the Ledger, everything together, which which starts to remind like that's a bit like you would say, what would be the vision for the Internet? Yes, it was connecting people, but it, but then it would say, oh, is it just about connecting people or connecting systems or
connecting machines? Or is it about the network is about the financial system? And I think with Ethereum, it's also very much visible. It's, it's a coordination, it's finance and and then particular challenges appear. But that's why we also have to talk about this one, one to your vision and state. So clearly now we think about protocol, protocol maintenance is the ETL foundation role.
And it's we scale A1, we scale blobs and we improve the interop and 2X just to show that network effect on the journey. So, but kind of like if if I kind of distill this into kind of like one kind of punchy byline kind of it it, it would be kind of utility over number go up. Is is that fair? Is the impact and winning for
sure. I mean, like when we talk about the values, we know that the values would would not have that impact without really winning and showing that you can get adoption, you can onboard users, you can connect systems, you can get network effects. Is it utility and a sense of like benefits for, for the users globally impacting everyone's lives in a positive way and in a way that they themselves define for themselves what positive means, right?
Like so not, not someone defining top down of of what's really is good or bad for other people. So so when you start talking too much about utility, then maybe you lose that neutrality of the protocol And by by just essentially we have to think about Ethereum as being everywhere and contacting everything, connecting
everything. So it can be neutral because if you, if you exclude some aspects of the economy, some aspects of automation, aspects of that work computer, then you're no longer neutral because like what, how did you end up with that decision of what is excluded? Like why did you, why didn't you
connect everything? And, and yeah, in this in this sense, that utility arrives with everyone who builds on top of Etherium and scaling Etherium, make sure that that utility can be immediately accessible, available, and that people want to build more on Etherium. Yeah, I, I hear that kind of, you're already alluding to kind of the different attitudes that kind of live on, on top of Ethereum.
Maybe maybe let's talk about this for a while because I think this is one of the it's one of the really difficult problems for Ethereum right now. So kind of there's this number of ecosystems that kind of live on top of Ethereum that are often usually pretty insular, that are not well connected to each other or to Ethereum in fact.
And in some sense they could even be kind of described as somewhat parasitic because kind of like they, they kind of take transaction volume away from Ethereum. And often they don't actually kind of, they kind of proclaim the theorem values, but often they don't really see them through, right. So kind of if you're, if you're, if you're in a situation where essentially you have a centralized sequencer, you have exactly one party building
blocks, right? This is very, this is very much against the spirit of kind of like openness and, and, and resilience and permissionlessness and, and so on. So how? How do you navigate that? I I think that's when you, when you say there are situations when you have the roll ups claiming to be to be roll ups at. And then the question is, who agrees that this is a roll up? Like anyone can claim it, right. So well, on one side, you want to have that permission less aspect.
If anyone can launch A roll up. On the other hand, you have to provide some guidance of of what it means and which roll ups are
safe. And because you care about the security aspect of of Ethereum and the branding of security is important because the user experience means that you feel comfortable in the ecosystem and you feel that there are some guarantees of security and guarantees that you understand it without understanding all the technical details and without verifying every line of code on every system.
Sure, it's the verification maybe is aspect of of blockchains in general and the blockchain values, but you also want to have onboarding your users and make it a good UX. So, so you have L2 PE as the review of the of the stages of roll ups, right? So the, the stage zero, stage 1, stage 2 that define different like progression of not the security of user that moves assets to this roll ups.
And even if you have centralized sequencer on on L2, then the questions are if that sequencer fails, if there is a liveness failure, will the users be able to withdraw assets back to L1? Like are their assets safe? So that's why we very often will encourage to to to mint all the assets on L1 and then bridge them to L2. Exactly. But that's not how it happens today, right?
So kind of like if you look at, say, for instance, the base ecosystem, almost all the assets are kind of like are traded on base, are actually minted on base. And kind of like this idea of kind of like withdrawing to L1 this only this only works if kind of like all assets are natively minted on L1, right? You can't. You can't withdraw it a native L2 asset back to L1. Yeah. So I think there'll be much more
guidance on on those aspects. So for for many high value assets, when when you see the real world assets, the the stable coins and so on, there, there are multiple approaches. Actually you can have situation when you really rely on insurer and say that there are the guarantees of the of like of your security of assets. What will happen if if there is
some failure? At the same time, I'm absolutely convinced that any, any large institution that is issuing on blockchain want to avoid any failures. Even if they can later have some kind of social consensus or the corporate or legal, legal way of resolving the situation, they will not want to to ever observe it with their customers. Like their customers would be really disappointed if there's any failure that you cannot resolve entirely on chain with this like transparent on chain way.
So that's why we see a lot of those assets being actually minted on the one. And this is like the the high value funds that's that go for Ethereum. And then they preach the L twos with a with a lot of restrictions and verification for many of the of the tokens, meme coins, coins. That's like like fun exploration. There.
You have situations when I'm meeting obviously happen on, on L2, but even then, like when you, when you have larger L2 protocols with, with larger liquidity, I think that's the, the situation in the future will be very clear that you may have this risk seeking capital that will keep reaching to L twos, but we'll be coming back to, to L1 for the time of safety. And for every single like operator, like the, the, the capital provider, they'll have some percentage of assets being
in that safe zone settlement. So on of L1, which means that when you look at globally at the, at the entirety of the economy, 1 will be the space of the settlements of the largest like liquidity source that you'll be borrowing to, to more risky escapades. And L2's also, L2's very often don't have this like a global or or neutral vision. So they, they take some, some shortcuts, right?
Like so you suggest that this one like centralization shortcut like maybe might be alignment with some particular jurisdictions, right? Some some altars might feel more American, some of them may feel more Chinese, some of them may feel more European. Some of them may be targeting particular particular set of solutions. Maybe some of them will be customized for gaming. Maybe some of them will be targeting some demographic in the way how they how they market their solution.
While Ethereum for all of them provides that layer of of settlement security and providing a global brand. So once again, when we look at the L2's, we'll be opinionated in a way. We'll start talking more about what we expect on the sense of security, what we expect on branding when you can claim it's Etherium roll up, what we expect of like contribution to the network effects collaboration on interoperability, on tooling innovation back to to the
Etherium ecosystem. The way we communicate all about interpretability between the L twos and L ones, but also how, how open those L twos are to collaborate with other L twos like so this very, very interpretable friendly ecosystem that has some very healthy competition and innovation on, on user acquisition all together. We'll be on boarding to the ecosystem, users and capital.
So I think definitely success of L twos brings developers, users and capital to L1 and increases significantly the demand for the block space on L1. At the same time, we also have to run a bit ahead, deliver that block space that it's seemingly like because now you have questions. So we increase the L1 block space and still the the fees are law. So why would you do that? Clearly, this is a commitment to the to the future. So everyone can be very confident that L1 will scale.
So we can build on L1, we can build more L twos that we, that we are very safe building an L2 that we plan to scale eight, 8 * 16 times per times over the years and an L1 will always be there and it'll be the best platform to launch L2 so. There's a lot to unpack there. So kind of like I, I kind of, I want to talk about kind of like the interplay of different L2's
in just a bit. But kind of before we kind of dive into that, let's talk about kind of this idea of Ethereum as kind of a global settlement layer, kind of like how, which is kind of like what you're alluding to, right? So kind of like if you look at Ethereum today, Ethereum processes around a million and a half transactions per day at the
moment, right? So if you look at financial transactions between between, for instance, banks and large players and so on, which by kind of like your argument should definitely settle on L1 transactions between different L twos, emission of of stocks and so on. So I think there's there's on the order of 50,000 listed
stocks worldwide. So kind of like if you want to do a settlement at least once per stock per day kind of on L1, if you want to kind of register all new stocks on L1, then kind of there's, there's other things like for instance, PNS domains, kind of that kind of like, I mean, there's going to be name chain and so on. But in principle, kind of like you should be able to kind of kind of have them on L1 if you wanted to. So kind of like, so I'm just
kind of like, I'm not making myself very clear here, but kind of like if you look at kind of like the global volume of things that kind of like should be settled on L1, a million and a half transactions per day probably won't cut it. So let's talk about kind of like how to how to scale that up and what the plans are for scaling L1 block space. Yeah, sure. So we have plan for 3X of the L1 block space this year. So you could target something around 100 million Gasper block this year.
So this is mostly done for. Coordination between the execution clients, verification of like where the some additional optimizations are needed because many of the clients show clearly that they're ready to go there. We see L twos actually using the same technology for, for scaling
their layer. And now the question is, are there some, some additional bottlenecks around the consensus coordination, the networking decentralization of L1 that actually show you differences between how L1 operates and L2 operates? So, so far, we feel very confident about that growth this year. Then we ask questions about how we go to the next three acts next year. And that you see like Dunkard proposed those numbers and but they are, they're not just out
of blue. They are designed based on the conversations with all the clients and understanding well what is in the pipeline on the EI PS. So some of the IPS that will help us that will ship in Glamsterdam will help the clients to support this further 3X scaling. So you have already like 3-3 hundred, 360 million Gasper block next year and continuation, continuation of that. And you, you mentioned there's one 1.5 million transactions per
day. So this is very often there's like a a bit more complex transactions because when you when you look at the payments like the most basic payments, this will be like 10 or 20 million transactions and the current throughput and assume we have 60 million. I expect that maybe like in in May, you have 60 million gas as a block size, the the Max box size, the coming back to once again to this 1.5 million transactions and all the equity
and what you have to have there. So we want to support I call the most valuable identity, most valuable identity for for people, for agents, for yeah, real world assets like so you have real estate, you have the obviously like like equities trading the high value, like adapt equities, FX trading where you have maybe transactions of hundreds of thousands of dollars or millions of dollars. So I clearly remember my work as the abstract technology for the FX desk at at Citibank.
And we would look at the time when the non farm payroll was announced and you would have this like hundreds of thousands of transactions. And they, you know, the minimum notional there would be 1,000,000. Nobody would trade anything below 1,000,000 because this was the ticket size that you would just accuse. So whenever you would say 1, you meant 1,000,000 and and those transactions were flying in within milliseconds.
And you want that to, to have always the easy path to L1 and just transactions nowadays, I think they cost like this data good to to verify it. But I think like it's between 5:00 and $25 per million of notional that you have. Depending on the markets, it can be less, it can be more, but those are the cost in the traditional finance. And nowadays when you look at the price of transactions on on interior Mon LA twos, this is like between 1 cent and $1.00.
But it also means that easily those transactions in the future, they can first of all, because of all the volumes when they move to two O 1, they can they can feel like any scaling for 10100 or 1000 X for the next years. And they will always choose A1 first for security and then for scaling and for the cost reduction, they'll move all the remaining transactions to L2 for scaling, but they'll be settling and and keeping the most safe liquidity on on the one.
And now the question is how much of this equity you can move to the global economy? How secure, how safe they feel. The more L1 scales, the more also L twos can take off the oldest transactions that are secondary market of of the daily
trading, right. So some of this movements will will take advantage of O1 and O1 will be able to really price those highest, highest value transaction significantly because they'll be always willingness to pay for, for the security and safety on the on the O1. It's just for now, we are in the in the scaling time, in the growth time in the user on boarding time showing support for L twos. And the scale is nowhere there to to support the entire global economy.
But when we go to this like 100 X 1000 X multiplied by all the L twos successful in tools on Etherium, then you can start talking about this quadrillion dollars of global economy and assets to be very safely transferable to to blockchain. And that's why we work on security as well. That's a really interesting kind of vision for Ethereum kind of as this almost kind of like how we kind of talked about rolled
UPS back in the day, right? Kind of like before they kind of became their own stand alone ecosystems. Kind of like we thought of them kind of as these liminal spaces where kind of like transactions would be processed and rolled up and then kind of ultimately kind of everything would come back to Ethereum. So if if that's kind of the vision, kind of where kind of the three, three time scaling and then three time scaling again, where those kind of
suffice, right? Kind of like there's 8 billion people in the world. So even if you kind of expect everyone to at least kind of like have an identity somewhere, I mean, you should probably tell people like for your most valuable things like do them on L1. So at least everyone kind of should have an L1 account, right? So that's 8 billion L 1 accounts
right there. So kind of like and kind of This is why I kind of like way back in the day and maybe shall wait kind of maybe this is kind of like a question directed at you. So kind of where where this kind of idea of sharding initially
came in, right? Kind of like and kind of when we talked about charts back in the day, we kind of we thought about kind of like we thought, we thought about asynchronously linked charts with their own execution environments and so on. So just so kind of 1024 chart shards of kind of like kind of and and scaling A theorem by a factor of 1000. Obviously that would help a lot more than kind of scaling by a factor of 3 and then scaling by a factor of 3 again. So kind of like and and I mean
obviously this also generalizes. So kind of like you could yeah. So any ideas to kind of bring that old concept of sharding with kind of like stand alone execution environments back? Short time plan we don't is no more stay alone execution engine to be added for now. But I think you can see the the recent the ZKEVI or like this five discussion like we don't you never stop to think about what is the better exclusion
engine. And then this is will be a long term plan to for the researchers and developer to investigate more before we have them enough covenant to switch the exclusion engine this time. OK. But it's it's kind of like it's just something that kind of the Ethereum Foundation kind of thinks about. Yeah, we have many people is working on this topic and there's also many external, you know Rix 5 the KV and teams are actually prototyping this and the product this.
But I this is, I would say this is part of our focused in the next 5 year plan, maybe not what we will deliver in two years, but yeah, it is in our research role map. Fantastic cool that's that's super good to hear Then maybe let's move on to kind of like the current L2 landscape. So kind of like too much you already talked about how L2 is and kind of like what caused itself and L2 is very divergent.
So kind of I, I also love L2 beat, but I also think it's somewhat sad that we actually need it, right? So kind of if you, so if you look at some, I mean, I mean clearly kind of like what level of security you want and need heavily depends on your use case, right? So kind of like as you said, kind of like if you're settling, if you're settling debt with kind of like an A minimum order size of a million, then kind of like paying 5 or $10 in gas fees
is is not an issue at all. So kind of and you should be willing to do that, right? If you're trading in game assets, that same level of security is probably not need. I mean, not a gamer, so I I won't judge here, but kind of like, yeah, so and kind of being very transparent about kind of like what level of security URL 2 offers. Probably not so much to users, but kind of to developers who kind of develop on these platforms is really important.
And I feel like there's a a very wide spectrum of solutions. So kind of like there's kind of like sovereign roll ups kind of on one hand, and then there's kind of like Tycho on the other end, which kind of like more or less settles everything to Ethereum. And then kind of like there's things in between with kind of centralized sequences and kind of like then the federation of sequences.
And kind of like that that that, that there's a question of kind of like whether you can actually escape to L1, whether you can actually have fault proofs and and so on. MSN escalation mechanism as a mental. So I mean, so how, how, and if you look at how the ecosystem currently chooses an L2 kind of as an engineer really frustrates me that kind of apparently DAP developers don't pay this a lot
of attention. There's very high value ecosystems on some L2's that are actually extremely centralised. So so how, how do you explain that? And how do you, how, how do you do you think there's, there's the need of kind of vocalizing about this more? Yeah, I mean it. It started by saying that it's it's beauty that we need L2B, but it feels very natural.
I mean, someone takes decision even at the beginning, whether they choose Ethereum or other L1 ecosystem and they, they look somewhere for that information like it's, it's there it's available through through blog post, through through Twitter or other social media. They can they can start hearing from friends like, yeah, this, this is where it's very valuable. That's where the values are.
This is where it's safe where it's safe, but they and this is a big plague of the of the blockchain ecosystems like the entire industry that's it's really hard to get that information. So every venue like LTP helps a lot and if you make the system permission less than anyone can launch anything without any reputation. And now you seek the information at the beginning of building over time, the the resilience and and trust in the thing and
the trustless thing, right? Trust in the trustless thing that you build over time. So maybe you still have some long range attacks, but you say, OK, this this gold base was verified many times. Even when we talk about like Bitcoin or Etherium, we say, look, the system exist. The systems existed for many years, so are verified and we
feel safer. But if the user comes for the first time to, to the industry, they need something that will show the maybe the list of the ecosystem, say how many years they are in was the was the perception of of their safety, what your values are. And it's the same for L2. So it's the same for the Defy applications. Like if someone deploys A defy application on AMM on Ethereum, you'd like to compare them like what is the liquidity there? How they're designed? Do they have imitability or
proxies? Do they have, do they have like support from the major a major auditors verifying and confirming that a code base is correct? So I think on every single layer of blockchain, we're looking for this until we have some like really advanced high high quality AI models that can give us give us that assessment independently of any external providers.
So we can launch on your own device like edge device AI that will tell you this is safe to use, This is the blockchain to use, this is D52S, this is L2 to use. It's really hard to do it the other way. Users, developers will choose some ecosystems when they feel they have the best parameters. So like the maybe the best users, best users for their particular applications, the
best liquidity. What is very important for us is they, they always feel that they, they will always check like how, how much of that connection of like how much of that security and censorship resistance aspect from the L1 they, they have in the ecosystem. And they either can verify it by analysing the, the contracts governing the, the L2 or the design architecture of the L2, or they can check it via L2 beat or other sources. They're comparable. And this is the aspect of
branding of material. Like if you claim that you're ATM roll up, at some point, we have to maybe start saying that no, this is not a roll up or not. They, they are insecure. No, they don't. Don't interrupt with everything else. And if the interoperability improves and this is a big challenge for us for sure like this is this will be a a huge effort of the inter ecosystem to bring that good feel of the same tooling, network effects, interoperability.
So, so that's those choices maybe are much clearer. It means that it doesn't mean that you'll be always choosing the same L2, but it will be very clear based on your your type of application that you're deploying where you go and it will be very clear that you always want that connection with with L1. So, so I think that I, I was exploring recently a lot of conversations with enterprises like institutions, traditional finance. And very often they push exactly for the, for the values that
we're talking about. They're asking about the privacy for the customers. They're asking about the censorship resistance, like for access to the market and no censoring of the financial transactions. They're asking for asking for variability and an open source aspect of it. And while they're asking for the customizations for that, they want to have control over some aspects of their internal business processes, internal matching their their, their customers interactions for their
own L twos. They do ask about L1 that they can allow their customers to venture to, to have this global neutral market. You don't go now to the institutions that ask for their own L1. Rarely, rarely I hear that they see that there is a huge value in participating in the global economy for Etherium L1.
They have some needs for the L2 for scaling, but they always want to provide a lot of like the transactional processes supported by privacy on L1. So where when they support all of this, then we also have even more funding for privacy for users, for retail users. So I see a lot of and then you ask about Tycho, like there's the spectrum, right? So and so Tycho being a base roll up and Justin's direction towards saying native roll up and base roll up.
It's really important. There is lots of optimism from from Justin, from others that look some of the progress on the CKVMS, what you see on the EF proves websites, you can go there and you can see how old the CKVMS compete for the performance of proving all of that shows like a lot of promise that you can accelerate. This time when I show, it says
five years. And this is very reasonable that we push constantly that there's technology changing, there is AI, it accelerates our research and it means that we see much more of a progress on Zika than we expected already. So maybe this is the same for the future.
So maybe in two years we'll have like super operational base native for all of us with ZKVM, which is very close to what you were talking about when you mentioned sharding of the past with the composability of multiple L twos within this MAT for all up containers. I wanna believe all of this kind of because kind of like technically it makes sense, right? But kind of we've seen time and time again that the technically best system doesn't always win,
right? Kind of like there's other kind of considerations that kind of play into that. And I think the, the one that people always talk about is better Max versus VHS. And that's, that was 40 years ago. But I mean, we have more recent ones to kind of as, to kind of like 4G standards and so on. So kind of why Max was superior to LTE and LTE still won out.
So kind of it's, it's kind of like there's this happens all the time that kind of like there's some sort of that there's a a solution that is understood to be the better solution. But the other yeah, the the alternative still wins out, right.
So kind of like if you are in this position where US presidents kind of launch them shit coins on kind of alternative protocols, does it, does it confer enough gravitas and kind of seriousness to kind of take away from that technically valid claim from Ethereum that kind of it's the best solution? Kind of like how? Yeah. So yeah. I think this is exactly where Ethereum wins.
So, I mean, so Ethereum very often will be maybe people ask about it's yeah, it's as the most secure solution, but it's maybe rough around the ages sound like taking advantage of all the latest developments in the in like accelerating the blockchain design. Because there are there'll be always some, some fresh and burdened unburdened systems that will say, oh, wait, we do the more transactions per second.
So, so and then you would say, does it mean that this like best current technology wins or we are very confident that this is what what we all bring to Ethereum with the respect for all the values, because this is how we attract the the customers, the users capital and so on. So almost you can say this is exactly why Ethereum is winning because it has the technology that is really caring about the delivery of everything that matters. And at the speed that we are exerting.
And we definitely, this is just our task to improve that efficiency of delivery of the, of the improvements. That if, if there is a lag between the innovation and adoption to Ethereum of some solutions, that's not a two years lag, It's not a one year lag, but it's maybe like a few months before we see, oh, this is really functioning and it can go in the next 4 correct 2 fours from now.
But we know that the developer ecosystem, the tooling, the adoption from, from the, from the financial industry, the adoption of users. So, so look at recent recent announcements from the acceleration of World Coin users on boarding based on boarding class of users. Starknet recently showing that game, that focus tree that's got like 200,000 users and it's growing in the App Store, massive success. So all of this just shows us
like this technology is winning. Like we see the numbers and it's winning and see and we have all twos that actually strengthen that and show us that. On top of it, we have capacity to compete with any alternative O1 through those O twos.
They can adopt even faster any scaling capacity solutions that can go to the massively scaled blocks, novel P2P systems and we bring it also to Oman. So I would say that's the draftness of technology, but not in the sense of like security or caring about the values and delivering that promise. This is not draft. This is what we always care about, but this sometimes delay the the innovation because you need a bit of verification. Is it is that mouse verified?
Is that are the Zika solutions really, really fine? Will they, will they cause like the, the massive bug in the that you have to keep patching and then you will not even be able to confirm that like everything was fine, right? We've seen it with Zika technology in the past. We have hundreds of researchers and and testers and engineers verifying all the claims about all the IPS that go into the
system. If you're kind of championing the AL twos in kind of this competition with alternative A ones, how do you see kind of the problem of cross A2 interoperability? So kind of like if currently kind of like I am, I want to exit from optimism and go to Arbitrim, it'll take me a week, right? Kind of I could probably send a postcard faster. So it it's kind of and kind of the varying message standards
and seek. I mean, so should that should kind of Ethereum kind of institute a a message passing standard or kind of like a kind of because kind of one of the core propositions of kind of having a twos is that having L twos on the same L1 is that in principle, you can kind of have this cross L2 communication without necessarily kind of going via the L1, right. But we don't see that yet.
So kind of we see kind of a number of siloed ecosystems on top of L2 on top of L1 that kind of don't don't act like a unified ecosystem. So is is there a way to kind of make this happen, and if so, make this happen faster? Yeah, sure. I mean, so there is, there is open intense initiative coordinated by Josh Rudolph. We see the the fantastic bridging solutions appearing in the theoremic system all the time.
The fact that we need all that many bridging solutions and that's we still don't have one that says like, yeah, this is like globally acceptable and best experience. This remains a challenge and this is what will be the major coordination and research effort from the foundation. I totally agree with you that this experience is not not best yet. I think that probably the existing bridging solutions you wouldn't wait a week. It's just that you would sacrifice some of the security
assumptions. You would have some, some third parties providing the temporary custody or some kind of insurance level. So, so user experience, definitely it's not on the weak level, but the user experience with the guarantees of Ethereum would be there. And, and this will be massive effort. And I think there's lots of challenges there.
But it also means that, look, those challenges will wait for, for any other ecosystem, because we expect the growth of the demands to always be beyond of anything that the L1 can
deliver. Combined with the customization requirements and, and some kind of control over the chain that, for example, enterprise on the like the, the international institutions when they, when they come and they say, we need something, we have more control and we need the global system where we actually have no control because it's neutral and
it's, it's censorship resistant. So this together means that any other ecosystem that will compete with Eteria will face those challenges sooner or later. And, and we are spending a lot of effort on this, but it also means that in, in many ways we are already ahead of others who
will face that as well. And I think this is challenge for other alternative ones like they, they look at Etherium and they think, all right, consistency, the, the customers that we are approaching, potential customers that we are approaching or, or the, OR any institution that we want to invite. They, they say to us not like we use Ethereum because they're on Ethereum, we feel less like a customer. It's just ours.
Like we just take it so and, and we can shape it the way we want and we can participate in global economy. So it's really hard to compete with that when you like want to treat someone as customer, but they say, no, we just want to use the network and get all those network effects. And then they get support from L twos that actually come and treat them as customers and they say, you have everything this
together. So massive challenge from us from all twos inviting all twos to help us with those interrupt standards. There are multiple proposals we see, we see the OP interrupt proposal, we see various like breaches that they come like list many. I wouldn't like to start listing because then I'll meet too many the, the open intense initiative, the various solutions in the maybe like MEV order flow space as you see like the the relative solutions and so on and so on.
And so D all of this has to feel unified and it comes also with, with tool link like wallets, the user experience. Maybe, maybe LLMS will come with help. The, the account abstraction that is coming to TJM came with Impactra and the first first solutions and they'll continue all of that together. A lot of work. And that's why we talk scaling everyone and scaling blobs, but also interrupt and UX. Maybe possibly the biggest
challenge of all of them. Who is so kind of if you look ahead, I mean, you, you guys just started. So kind of like if you look ahead one year and maybe five years, what, what does success look like for you guys? So for me, look, my term is 2 years with the foundation, which means that for me, success means that I really show that like within two years, we can achieve a lot of a lot of things that people are are saying that are to be solved.
Now that if we, if we mentioned those things like scaling go on scaling blobs and improving drop UX, that this within these two years, it should be a massive change and A and a feeling that, yeah, that's this really happened. And it means that even if we set the goals, then the success for me means got much beyond those goals, right? That it's it's really absolute win a huge impact, a really great vibes between LL twos and L ones and everyone in
ecosystem. The the funds that will that will deploy trillion dollar level funds on on Etherium, the L1 that everyone is excited about that it's just like it has such a huge capacity and such a high value set of transactions that it generates massive fees. So all of that together is a is a success And and beyond that there's other story For me, this is like 2 years focus. They're around everything that needed attention. Make sure that communication,
all of this feels feels great. And then and I'll be really happy like to to see others to continue. Yeah. What about you? Shall we? I think it's for short term. I want decision to be the default choice for all the use cases, including that L2. Choose what L1 is. And then it's from application layer, it's from the institution
layer. And then it's from the older builders that they want to build something, they should choose external because this is the most securely, the most robust, this is the best trend they can they should build on. When they choose blockchain technology. This is should be the default for them. And I also want to improve the UX in order to for the users that they don't even need to be aware of blockchain exist in the
app. So I think it takes some time to improve our wireless system and it takes some time to provide a very good pipeline for the DAP layer to improve the UX. So I think this world won't be too far away.
So if kind of like each of you kind of had to give one number one priority for your, for your term in kind of like just one, because kind of like we talked about a lot of things, kind of we talked about scaling block space and BLOB space and A2 into our probability and user experience and so on. So if it's just one priority, what what will you kind of optimize for? For people to come and see like thousands or millions of applications on Etherium ecosystem all feeling like 1 and.
What about you, Shaway? I would say to bring Ethereal alive again. Good parting words. Thank you both for coming on. We will share kind of like other places you can follow you guys personally and the Ethereum Foundation on Twitter and elsewhere. And thank you so much for stepping up. Thank you, very thank you so happiness. Thank you so much. Thank you, Federica. It was massive pleasure.