Rene Reinsberg I Celo's Move to Ethereum | Pragma India 2023

[Music] a lot of things that have happened in the Sal system this year uh starting with the the major announcement so for those of us who may not be familiar let's kind of summarize what happened in July yeah I was just a few days before the pragma event in Paris that uh cabs which one of the core development teams for the you know cell layer one blockchain put forward a proposal for to become an an ethereum layer to and you know this is something that had been discussed in the community you know in the past but until that point you know really with sort of the kind of Rise of a and a enabling a a world where you know the thing that makes you know one of the things that makes cell special today very very very low fees enabling microtransactions you know micro applic like applications for micro payments um was finally possible in you know as an L2 and so yeah we were in Paris at EC discussing it with the community and the broader community and there was just a lot of excitement um now a lot has happened since which I'm sure we'll we'll get into we'll definitely get into um but but it's it's been a it's been a fun half year it doesn't even feel like half year I thought it was like two months ago um let's going to zoom out a bit uh walk us through what Solo's original Vision was and before the L2 transition and this proposal what was cell why did you decide to do it that way and uh and how has the vision of the company changed yeah so Salo is an aspero word means purpose and you know the the mission and sort of the norstar that got us uh to start seller was really to take this beautiful technology and enable use cases that are um often times not feasible today um and that kind of are always in sort of a a broader kind of concept of a regenerative uh you know Financial system and what that means is that you have a um a system where you know for example the growth of the economy uh directly has positive externalities positive impact on things like you know the health of a community or climate right the health of our planet and you know that is something that's really been possible by a lot of Primitives being built over the last few years like tokenizing Reed assets and creating currencies that that wrap around those assets now uh when we started so cell was you know the beginnings of cell go back to 2017 uh we spend a bunch of time in the global Sal places like you know Nairobi Boos Iris understanding okay what are the shortcomings of the financial system uh that you know this technology can solve particularly with use cases like Universal basic income micro credit micro work things that we were passionate about and at the time we built a wallet on ethereum but we quickly realized there was just a bunch of hurdles that felt impossible to overcome at the time you know obviously proof of stake uh sorry proof of work was slow right the fees were high took a long time to settle for transactions to settle so really kind of useless for microtransactions uh what we wanted to see uh also we saw this complexity when people wanted to you know were first onboard it and then were trying to do something with their wallet you know they had to get the native token eth right so you send someone some stable coin but they still need to get a second token and even just the mental kind of model there the complexity for someone who's not you know uh spending 247 in crypto uh was just too high right and so we took a lot of those insights Fork ethereum um actually launched the first cell was the first uh proof of stake uh evbm but then also buil in some of those features so for for example on Cell since the very early days um you were able to pay for transactions in tokens like stable coins super useful right if I'm sending you you know $5 a stable coin this is the first thing you get in your wallet and now you can immediately use the wallet send the money onto a friend or put it up you know kind of in a lending protocol get yield or you know do whatever you want and that's that's really powerful and that actually you know finding those little things over over the years that kind of removed the hurdles for Mass adoption has been sort of a a red threat through S C's Journey um and yeah and then basically leading up to July where suddenly wow you know we can do all these we can bring all these things to ethereum benefit from ethereum security but not give up on the things that make cell special that's an amazing kind of summary of how we got there um was it maybe just uh just to kind of understand this was it a community proposal or was it something something you as a team and the engineering from the protocol side we been thinking about it and now it's just finally possible what sort of sparked the actual post to exist yeah I think there's you know in sort of communities there's always chatter right people are discussing things people throwing stuff on the Forum or you know at conferences there's talk and so this general idea had existed for a while but it took sort of you know until that moment in the summer when claps really laid out sort of what the architecture could look like and you know one piece I mentioned already was kind of I NDA for data availability but there were other pieces too right there was a very thoughtful um kind of you know proposal for uh leveraging the existing cell validators which range from big companies like Google Dutch Telecom actually this is the first uh evbm validator that Google ran um now they're doing others too um all the way down to like small kind of Grassroots validators right so there's actually it's actually funny there's a grassroot economics is a company in Kenya that's doing um you know uh Community currencies and you know there's impact Market which is doing learn and earn and microc credit and Ubi um in in the global sou so it's it's really I mean I always think of our validators as an asset uh of the platform of the community and you know in The Proposal basically it was like okay well these guys uh you know these groups around the world can be the basis for decentralized sequencer and I think especially that piece got the broader e the Community quite excited because one of the major criticisms apart from sort of maybe the fees right um with uh kind of current l2s is uh sort of the centralization of of the sequencer I actually totally forgot about that part and and that's kind of the the part because you actually get to see that live and learn from as any other L2 service because you already have that infrastructure and and that Community built up um one other kind of thing uh to the extent we can kind of go into some details here is actually you know what I had just I just realized I didn't even answer your question so then what happened CBS put forward the proposal uh it was discussed sort of in in Paris you know made a bunch of events and Community came together and then it was put to an uh to a temperature check to an onchain vote and that was overwhelmingly I think everybody voted yes on it um and so this was this happened shortly shortly after EC and U you know sort of since then the CB team has kind of actually started the development on on the stack but we've also um have seen other um you know players sort of in the broader L2 stack uh you know kind of industry come forward and put forward proposals and so it's actually turned into um just an amazing yeah I want to call collaboration um and sort of ideas exchange of understanding okay well first off what's sort of the state-of-the-art in terms of ethereum scalability and al2 Tech but also and this is I think kind of maybe more specific to cell what is the right framework for for the c community to ultimately make the final decision and maybe that the framework and the way we weigh kind of things right May differ for someone else making that uh that choice uh in the future and you know we've actually had a few other uh bigger chains uh come forward and as well say this is a past that they think is interesting um since we put the proposal forward but you know ultimately it has to be something that works best for C right in terms of the ultimate decision but it doesn't mean that whatever stack you know the cell Community picks is the best L2 stack it just means it's the best stack for cell now that's a very important distinction too um for for for kind of the people here uh that temperature check got 600 votes saying no you shouldn't do this and 56 million saying this is a good idea so you have the num good so so that kind of feels good um well the most interesting piece about the thread was that that whole conversation was public and and that's kind of very unique to our space because you can't just go make a back door decision saying we're going to change everything whether it's our economics or how the infrastructure works that was a very long public threat with very thoughtful responses IAL commented sandep commented got streon from migan who commented um to the stuff that you're willing to kind of kind of go into details around could you share some of their comments on what they express positive and negative sort of sentiment around and what were kind of the things that they were concerned about or or happy about yeah I think there's there's a few themes I think that's that come up right and I think there's um and this is probably also you know as I personally wrap my head around it there's um you know the world today looks very different than the world a year ago in terms of where we think sort of alter scalability is going or can go and in the short term what you'll see is you'll have a few uh you know ecosystems ultimately forming around the sort of predominant stacks and given the architecture you'll have uh you know benefits within that ecosystem for example around you know bridging assets seamlessly right and you know sharing cost in terms of the actual um you know kind of uh yeah settling on kind of ethereum and and so there's kind of like a there's a short-term component right in terms of what are theed mediate benefits of these different Stacks but then there's also kind of a long-term question which you know is really okay what does this look like in the long term and I think in the long term I mean I think there's some general consensus or increasing consensus right that ultimately it should be possible to seamlessly move assets and messages between any layer to no matter what St there on right and there's some technical requirements for that to happen but it's certainly there's a feasible path towards that now that past though will take some time right and I we've all been there for the merch we've all seen sort of you know things these things take you're operating on like live operating decentralized systems which is a lot harder than you know whatever changing the uh yeah strategy within a a single company right and and so in many ways uh I expect that to take you know several years and so the trade-offs between what is right in the short term or what can be the right longer term kind of solution right are there and and those are very hard to evaluate but um I think when you see people weighing in right there's there's some thoughtfulness around like what are the short-term trade-offs right in terms of decentralization around the sequencer and there's lot of lot of excitement for that uh but also seeing community members chime in people that are running applications on C you know big companies like Opera with mini pays small projects like good dollar we saying hey what does it mean for us are the fees going to change right what is it going to cost do I have to do anything do I have to kind of migrate to some new environment and I think it's been you know I think really great to have this out in the open because you answer once you say no actually this is like there's a hard workk you I've done a bunch of these like you're going to be okay and it kind of not just answers one person's question but it kind of collective satisfies everybody it's Collective learning with also they can bring up things that you may have missed which is even better because then you're now actually working towards solving a problem instead of just shouting at somebody yeah exactly no and one one thing that's come out of it so we got a bunch of inbounds you know and people like we want to know even more about this journey you're on and like this is relevant for us or we're building a part of the stack and and so one thing that the team has done which I give him a lot of credit for because incredibly busy with the technical work but uh there's a um there's a started as a Twitter spaces L2 unplugged and balic has been on and danr and um I think Shan was on recently as well and others and it's it's you know basically a kind of technical Deep dive on sort of the different um you know aspects of of this process of of the stack and you know um I expect it to get even more interesting in the coming weeks right as there's some of these more concrete trade-offs that will have to be made are being battled out uh in in the community so yeah if you haven't seen it highly recommend checking out L2 unplug um but uh but yeah so that's been to our I mean I didn't expect this to become such a you know public in a way exercise beyond our media Community like I thought okay of course projects will want to be involved and that's why we moved it to the Forum but it's been great to see the broader ethereum Community participate that's incredible um it kind of just shows you that everybody here wants everybody to win and uh it's like like always amazing to see that people who maybe even right now or future competitors still want everybody just succeed yeah this is this is interesting um I I've been thinking about this a while and like the big competitor is the traditional Financial system right it's Regulators that don't understand this technology that are trying to protect incumbents right that don't understand the the freedom the economical power that this technology can bring and what been like really nice as part of this process is that even though you know in some sometimes you're kind of talking to people that you could from the outside perceive as competitors it's like you're not competing with other L2 NE competing with everybody else who doesn't want any L2 to exist right no I think there's there's a great sense of uh you know collectivism and cooperation among you know really everyone that's that's part of that bigger kind of E scaling picture and that gives me hope right because I mean the the last thing we should do right now is you know Civil Wars start these little fights with each other where we're in this tiny AC chamber over here where this the real thing the real war happens over here absolutely um so I guess what's happened since July tell us about the last five months uh so let's see well first I think most important thing C steam has been uh doing a bunch of technical work including most recently uh when Ian da went on testet I think it took them less than 48 hours to implement it so that was that was really awesome wow um but but yeah polygon came forward with a proposal I think a deepest up after right so next he's gonna get equally grilled on this don't worry uh zik sing the metalabs folks uh put a very thoughtful proposal um you know there's a few other conversations were happening that sort of in the in the broad ecosystem but yeah it's it's definitely you know when the first first proposal you know had op stack I and you know sort of a had made a you know a bunch of assumptions based on some initial conversations and what was available publicly at the time but um as as you all know building in the space you know the space moves at like an insane speed right so um for a lot of the stuff that we're considering there isn't even like proper documentation written yet right and it's changing on a weekly basis and so it's been it's been really great to be now kind of very closely connected to uh a bunch of these different groups and and really um kind of drink from the fire hose in terms of uh their road maps and what they think they can deliver in six months nine months right in align uh ourselves with that so that's that's probably been the biggest um yeah sort of also unexpected uh you know part of the process in these last few months I mean that that's um well I guess the question I really want to ask you is the July announcement was about being on op stack and now kind of a new player has joined the game you have now other choices or at least other proposals coming in does that shift your Calculus Are you seriously considering them how do you think about not choices now and uh and kind of what is that mean in terms of making a new decision or keeping the same decision yeah so uh actually cabs put out just a few days ago um a you know there were some initial kind of uh questions or criteria in the initial post and uh I think there was good set of you know things to kind of think about but they've since gone back and uh also with some of the community input right put together a much more comprehensive framework and again this is a framework that I think is probably broadly applicable uh with the one difference that different you know projects will likely have different weights on the different kind of criteria uh but it touches on things like obviously you know technical uh features you know what kind of a migration would look like uh alignment with ethereum because even there there's kind of spectrum of of differences um and uh you know kind of what does the ecosystem look like what's sort of the mission right is their alignment in terms of the kind of projects uh but I think also increasingly right I mean especially as it comes to thinking about these different Stacks as almost like economic zones in the short term um I think there's a good question around economic alignment right what does the stack gain from C being part of the stack right I mean we know what we can bring to the table you know in terms of um on and off RS like real world access right where now um I think six biggest uh project chain I think it's across all uh projects on token terminal in terms of daily active users right yeah I was to say like pretty good Mutual benefit here is that now the Amigo system gets to benefit off of that infr structure and just applications and uh you kind already mentioned you're the six biggest kind of chain out there um I guess I'm just curious like what are some of the bigger applications that you think are super cool or that you like or just are even big yeah that now The Ether system can also enjoy exactly and I think the way I can I sort of think about Sal is we are in a way we've because of the work we've done particularly in uh the global sty and markets across Africa right where the hard work is not necess it's basically creating or enabling a user experience right where people can seamlessly onboard right from Fiat mobile money to an onchain wallet and then use that wallet easily ideally on a mobile device right to participate in this digital economy and that that journey is key and I think uh as an ecosystem we've done an incredible job and you know I don't give myself much credit for that but there's a lot of really dedicated projects often operating directly in Market with communities right that have created sort of that really Des centralized I mean in this this time we can really use that word infrastructure right where if you're on ramping in Kenya or Ghana today you're likely losing using a provider that's that's based there right that can facilitate that uh with mobile money now when you have that and you imagine c as sort of your kind of onr for real world users to ethereum right or in in the first step to that kind of Stack right that's very powerful because you know there's a lot of applications on cello but if you look at any kind of you know collection of uh of of L2 chains right using a certain stack then there's potentially a much broader range of applications and so there's Network effects that uh that come from that and so for us it's really exciting to see okay you know what are others building what are the applications what's the utility we can bring to users that today are on Cell right uh without them having to worry about kind of having a more difficult difficult user experience yeah I didn't I don't think answer your questions about what applications we should you you did you did don't worry like I would have I would have called you out if that hadn't happened um no I guess yeah what I was kind of curious about was like um maybe getting a couple of names of what these popular applications are um in addition to these effects yeah we can run through a couple of these I mean it's so coming back to this notion of regenerative Finance I don't know how many people here have heard the term refi so I don't have to give yeah okay a good number oh that's great actually a year ago I think it was like one would have got up did you misspell defi yes uh so it's uh it's really interesting because in a way it's you know in order to uh you know create financial application that have sort of this positive externality on a community or from from a clab perspective right you need building blocks that can uh either enable that to be added to an application that already exists right or you actually invent uh you know sort of refi native applications that don't exist today so an example for the first category would be like okay you have some Dex amm and you're just taking a portion of your fees um and you uh programmatically buy carbon offset plastic offsets biodiversity credits whatever you know and so as your am as your as your volumes grow um you're you're having this sort of positive externality I mean that's a that's kind of a pretty simple you know thing to do but it's great if you can do it right and maybe people will start using your deck versus another decks because they care about that right and it allows them to take action um with something that they're already doing now the kind of refi native application would be someone you know for example you know creating a community currency or a system of community currencies that leverage these um you know kind of tokenized natural Capital assets like you know tokenized rainforest or or carbon credit or plastic credit or biodiversity credit whatever it is and leverage those assets as collateral for for example a you know flat coin stable coin that's used to with in that Community um and thereby ensuring that the community assets are actually used maybe for the first time in some cases um and also that the wealth created stays within that community and that those are pretty powerful Concepts right and something when you when you sort of fast forward you could imagine down the road right where you know a Central Bank of a research rich country has those tokenized you know resources in their reserve and not US dollars or Euros uh or Bitcoin U nothing against Bitcoin that's a that's a first good step um so yeah so I think that's that's been really interesting and so some examples for the first right is basically I mean even cell itself uh you know cell is ultra green money you know so ultrasound money but Ultra green in a sense that in addition to burning C we also kind of with every transactions you sort of have a small percentage of the uh you know fees go towards uh onchain uh offsets right so we've been doing that for for a long time um that concept extends to a bunch of applications on S um including you know some of the kind of staking Solutions like liquid staking Solutions um you have uh on the on the on the other end of the spectrum you do have those Community currencies that I just sort of mentioned as examples collectivo has done this successful in curau tokenizing food forests and coral reefs and actually launching a a Gilder for the island that's that's used there in Commerce um but sort of in between that Spectrum you do have sort of you know a lot of applications that are kind of really either creating building blocks like you know Plastics is you know creating sort of tokenized plastics uh kind of like recycling kind of in a way like credits similar to like a carbon credit but for plastic and FC Barcelona recently used it for an nft collection where every nft had sort of a plastic kind of offset guarantee in a way that's a to it so that was really cool right but that's these things are enabled because The Primitives exist and in some cases they exist uniquely on c um so yeah I mean now everybody benefit we covered and yeah so that's it's cool I think there's one one other thing I'll mention because I think that's really powerful and you know cop is happening right now in in Dubai and you know there's obviously uh a lot of conversation around okay you know Collective climate action what are the right tools and you know we need better you know Carbon credit markets and whatnot but uh what I love is some of the experimentation that I've seen in the cell ecosystem there's a concept called conservation basic income and the idea is that you're putting money directly into communities and so if you're a community that's basically protecting sorry I'm too much talking um you know say like in the Congo the the Petland right that are massive carbon uh store right carbon sink then there's now a payment going directly to that Community or micro payments to the members of a community directly to their wallets right that they can use in a local context use it with mobile money right use it to kind of start Building Wealth um and in a way that's beautiful right because the ultimate goal and this is even if you look at climate finance a lot has been happening in moving away from sort of things like carbon credit markets two more kind of bilateral agreements between countries right to I think in the long run uh basically these kind of community call reparations uh that uh really in order to pull that off at a global scale you need web stre infrastructure right you need the ability for people to receive microtransactions stream kind of uh micro payments on a on an ongoing basis and have good tooling around kind of uh you know creating transparen and sort of um proofs around a certain action being taken so two examples in that category would be gain Forest which also um is competing right now with a bunch of other projects and people from the sou ecosystem in the biodiversity X price which is pretty exciting and uh and and Sylvie who is uh paying people uh stable coin to plant trees and help the trees kind of you know grow and again become uh you know so really really beautiful no that's a that's a great region uh ecosystem Community got there um so again maybe to wrap things up what are the next steps of this transition what does the next six to 12 months look like and um what can we expect yeah I mean look the team is working super hard I mean that we want to make this uh as quickly as possible right and we were excited about this transition to happen one hard Fork actually I didn't mention this earlier one hard Fork already happened there's another hard work required to complete uh this transition and uh yeah the timeline right now is you know I mean there's been more proposals coming in so it's shifted a little bit but by by early next year um there's going to be another proposal another vote right on kind of the pass forward and then the transition can happen and I mean in the meantime you're not uh I think this is the nice thing you're not really Nothing is Stopping yeah yeah not sacrificing anything right I mean it's anything you build build will kind of work and so yeah I mean for anyone building this weekend definitely consider sort of sell as your uh you know as your chain to kind of build on and like hopefully some of the examples I gave meet you interested in using some of the building blocks that exist uh a lot of our team is here I think see some of them in the audience even uh so definitely come ask us for help we're friendly but you know I'd love to see more people build you know even if it's a a game or you're building an amm think about is there is there kind of uh you know things you can buildt into your product right to kind of create sort of that regenerative effect amazing well Renee thank you so much for joining and uh sharing your thoughts and can't wait to see cell on nl2 thank you carik