A Chain for Every App | Britt Madruga - Espresso Systems

Hello. Okay, just a quick reminder that this is your infrastructure summit on this stage. So if ever anyone is looking for the infrastructure summit, it's right here on Prosperia stage. Please um join me in welcoming Britt, head of partnerships at Espresso Systems to take us through our next talk on a chain for every app. entire screen.

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Okay. Okay, mic check. Good. Okay, awesome. Uh, thank you all for coming today.

Sorry for the technical delay here. Uh, I'm with a company called Espresso and today I'll be talking to you guys about why we need a chain for every app. Uh for those of you who have been building an Ethereum for quite a while and are familiar with the infrastructure, you may hear this talk as a defense of the L2 thesis or some of the reasons why I think the rollup centric roadmap is not dead but is actually inevitable. Uh for those of you who are newer to the space, I hope that you uh walk away from this talk rethinking what it means to come onchain. The lines between L1's and L2s are getting pretty blurry.

And I think it's time that we expand on what we conceive as possible today. I don't know why it's not going. There you go.

Okay. Sorry, folks. Um, it's gone on my screen. There we go. Okay.

Um, all right. So, the financial system is getting an upgrade. You can scarcely turn on um crypto Twitter or CNBC or Bloomberg without reading a headline from Robin Hood or Revolute or the DTCC or the Treasury themselves talking about how crypto is revolutionizing things. Um the new system is on the rise and that's powered by cryptography, decentralized architectures, and open source development. Together, these things three things are what we typically refer to as a blockchain.

Um, but the question still remains, how does this new system get built? Uh, what are the right architectures, paradigms, and technologies to support a future financial system that achieves everything that we've set out here? Specifically, one that is more open, resilient, and composable. People love to talk about how much money has gone into blockchain infrastructure. I would estimate between 25 and 50 billion has been um input into the system in the past 10 years just in venture capital alone.

And we've run a lot of experiments in that time across L1's, L2s, interop protocols, oracles. But have we cracked the right architectures, foundational technologies, and repeatable processes that make going onchain feasible and scalable for all manner of financial apps? I would say that we have or at least we're getting close. And the solution, in my opinion, is going to be an app for every chain. This answer isn't new or revolutionary.

Uh it'll sound familiar to many of you but perhaps not for others. So going back about 10 years ago with the first ideas around this coming from Cosmos and Polka Dot, we as an industry started exploring the idea of an app chain. Um today we also have Ethereum, Celestia, US um and some others working on this same thesis. And so going back 2016 2017 era, Cosmos had this idea for Cosmos zones uh that would all leverage the single hub or Cosmos chain and use IBC or interblockchain communications to connect them. These zones are effectively app chains.

Polka dot had the same idea around the same time pioneering the idea of a parach chain that would connect to a single relay chain. Uh a few years later Ethereum announced the rollup ccentric roadmap. This borrowed from the same previous ideas where Ethereum was the hub chain that supports an ecosystem of purpose-built L2s. Um, Celestia, who you may be familiar with, there's further built this out with their modularity thesis that represents much the same thing. There are many different execution layers often L2 rollups leveraging other layers for settlement, DA or data availability, data availability, and consensus.

Um, Espresso, my company, has worked in a similar way, supporting chains like Cello, Apech Chain, and RARI with really fast confirmations and optional data availability as well. And we're seeing this architecture even now reflected in newer blockchains like zero, which was announced last week by the layer zero team. So, what are we talking about here? What is an app chain and what do these approaches all have in common? Let's define it.

An app chain is going to be a customized execution environment that defines several things including block time, ordering rules, fee market dynamics, a privacy posture, compliance framework, and many more. And this different differentiates from the way that we're used to thinking about deploying apps as smart contracts on a general purpose uh chain like Ethereum where all of the apps on that chain have to adhere to the same set of rules whether that's about privacy or block times or ordering and anything else that you might think of. And so the big unlock here is this shift. When we stop thinking about roll-ups as scaling solutions and start thinking about them as individual execution environments, we unlock a major uh playground essentially of space to work with and what we can accomplish. Um so why do we keep seeing this architecture over and over again in the blockchain space?

We found time and time again that this concept of generic blockchain space as you might find in the EVM or on Ethereum L1 is not sufficiently flexible to support all of the cases that the world wants to see in the world of finance and beyond. Uh and this isn't unique to blockchains um to blockchain dynamics. We see the same type of evolution in technology on bundling as things mature across different areas. Whether that's going from mainframe setups to clouds, uh monolithic services to microervices, a single instance to sharded databases. Um and again, L1's becoming many chains.

Uh as as technologies mature and customers demand greater customizability and flexibility, these things devolve. Um, and so when you look at all of the component components involved in in the decision to come on chain, app chains are the obvious winning choice. Um, as you can see here, building an L1 comes with really high lead time for development and building a consensus protocol comes with a lot of long-term overhead. Um, apologies. Okay.

Uh, comes with a lot of long-term overhead. Uh likewise, choosing to deploy uh your app on multiple different instances across different EVMs uh comes with its own set of headaches. You would then have to adopt your code to play by the rules of all these individual chains. Um that's not easy in the short term and it's not easy in the long term. And so the middle ground here is to launch your own app chain where you can have your own customizability within your code and carry the brand name associated with being ABC chain instead of ABC app on Salana chain for example.

So after 10 years um do we have a chain for every app? Well not quite but we're getting there. Um today you can see there is a migration happening. some big examples that you're all familiar with um from unis swap deploying uni chain as a rollup on ethereum um you also have rumors of poly market doing this other notable examples in the crypto space are uh rarable creating rari chain um the board ape yacht clubs creating uh apech chain um and perhaps dydx is the original uh app chain here um and then in the financial world you've got Robin Hood is the notable new one uh creating Robin Hood chain um also you have coin base associated with base, Kraken associated with inc. Um, and several L2s are starting to consider or sorry, several L1s are starting to consider migration to becoming an L2.

Uh, with the notable example in the space of Cello, uh, who is now an L2 on Ethereum. Um, and what are you doing today if you're not if you're not doing this? Well, the alternative is to deploy your own L1. Um, all of the flagship apps of the last few years that have chosen not to launch an app chain have gone with the L1 route. Uh, and that carries some of that great customizability benefit that we talked about, but it comes with a lot of overhead.

Um, building and maintaining a consensus layer, which is a required for an L1, is really hard work. Um and so it makes it infeasible for many teams unless you are a team like uh Arc or Tempo for example who have either a lot of resources or a long pedigree in the in the space um plasma as well or another example would be Hyperlid here who has a pretty lightweight need for a decentralized consensus. Um so for them it may make sense to have an L1 infrastructure. Um, and the era of the app chain is upon us for everyone else outside of those major brands. Uh, we're at an inflection point here where after a decade of experimentation, we're finally seeing meaningful traction.

And I think we're on the cusp of seeing an explosion of new chains. The big game changer in this era is going to be performance. So to to define this performance-driven era of tech, let's start by looking back on what the past generations have looked like. We can split this into three things. We started with generation one or the monolithic L1 in which you had smart contracts deployed directly on a generalpurpose VM like Ethereum L1 uh and that was under all of those smart contracts were underpinned by that monolithic L1.

This era was really about creating new digital assets and apps. Uh generation 2 is the rollup era which has lasted us really for the last 5 years here. In this era, execution environments moved away from the L1, becoming more customizable. And this era was really all about exploring different ways to bring existing assets and financial services onchain by combining different components of underlying infrastructure in a modular way. I think what's to come is this next generation, Gen 3, which we're calling the app chain era.

And what's really going to define the next five years is not just the ease with which all of these financial applications can come on chain through this kind of app chain infrastructure but I think for the first time we're really going to be able to solve one of the real problems that we've seen with this rollup model which is real-time communication between chains. If you look back at the problem with finance as a whole, with blockchains um and certainly with rollups is that our assets have remained trapped in inefficient silos. While the internet has allowed for information to flow freely across the world, uh our assets are still stuck in these silos. And moving assets between those silos is expensive, frustrating, and sometimes risky. So the promise of blockchain technology has always been to upgrade the financial system to solve this problem.

But no monolithic blockchain is flexible enough to support this resulting in a fragmented world now of many chains that still don't communicate well in real time. And this has arguably been the downfall of projects like Cosmos, the challenge that Polka Dot has seen and the biggest roadblocks for the rollup centric Ethereum road map. But the vision that I want to leave you with today is a world in which liquidity is unified across all of these apps, specifically all of these app chains that can communicate in real time. And the goal is to make it easy to build any financial application as its own chain with customized execution, ordering, privacy, compliance, and anything else that you want. And critically, it you requirement is that you have to enable all these environments to communicate securely in real time.

And so what's going to catalyze this era of app chains? I think the answer here is interoperability. This has been a major roadblock that every attempt at app chains has faced. Remember the era era of roll-ups enabled customizability but didn't tackle the problem of interoperability. But we are tackling this by underpinning app chains with a base layer that can offer fast finality.

Fast finality enables real-time communication which enables composability and interop which enables aggregated liquidity which brings to life the vision that we just outlined above. At Espresso my company we've been building over the last few years exactly what I think we need to power this solution. This diagram shows at a high level an example with Cello and Katana um two chains that will be going live with Espresso in the upcoming weeks. Once they're live, they'll benefit from fast finality, giving them an edge up on other chains that will still remain more siloed. Um, you'll recall, let's talk about performance that I mentioned the big unlock here.

Uh, let's take a closer look at what that means in real numbers. We've recently brought our latency as a chain down to 2 seconds and our throughput supports 5 megabytes per second. In contrast, Ethereum, which is the great World War III resistant decentralized machine, uh has a much poorer performance of 15minute latency and throughput of 0.9 uh megabytes per second. Um this is great for making sure that Ethereum is never down, but it doesn't work for real-time communications and it isn't suitable to support a layer of app chains.

What we've seen is major innovation performance breakthroughs in the past that we can expect to be mirrored today. What the internet did for global data transmission, we believe blockchains will do for global asset transmission as well. Prior to the subscriptionbased era of the internet, broadband pricing was timebased or per message which created a scarcity mindset set which created a lack of innovation. In the world of blockchain, unlocking better latency and throughput will lead to the same explosion of innovation in the space that allows every app to come on chchain. This is slide is actually not quite up to date.

Um there are a couple of new additions that I need to add here, but I just wanted to give a shout out and show some love. You can see a rapidly growing list of chains here that are integrating with the Espresso network. Some of them you know, some of others you might not. Um but that's kind of the point. You don't know every financial application.

You shouldn't know every chain. Um, but all of them are coming on chain in this app chain way through espresso to achieve their fast finality. And so, um, I'll leave you with this last note here, um, which is a little bit of a coming soon alpha reveal here. Uh, Espresso has always been a modular base layer that provides roll-ups with fast finality, but the era of the app chain still requires more. Um, it's my pleasure today to leave you with the introduction to the Espresso stack.

This is an offering that's suitable for app chains, whether they're being developed by large enterprises or hackathon participants. The Espresso stack makes it easy to turn any application, any web 2 application into a chain. Um, all you have to do is write your application logic. We take care of the rest. Um, and this is exactly how developing a chain should be.

Lost my slides again. All right. And with that, uh, thanks for joining me today. Uh, please feel free to get in touch if you're interested in building with us. My contact info is here.

Um, thank you all again.