Sovereign Interoperability: How to Solve the Sovereign Trilemma | Karel Kubat - Union.fi

so yeah let's give a warm welcome to Carl all right good morning everyone uh today I'm going to be talking about Union a sovereign interoperability layer for the modular stack first a little bit about me I'm uh Carell zerox Kaiser Carol give me a follow uh developer by background mainly systems engineering and founder of Union Labs uh our vision really is towards a unified rooll Centric future uh we see a stage machine for every single product out there fully asynchronously composed that means interoperability bridging asset transfers and general message passing going around but with the same user experience as monolithic Stacks uh right now what we're seeing in the ecosystem is that products that move to the mod stack can do tremendously well uh dydx moving away from its uh L1 and instead capturing the full value acrel led to far better ux while still enabling users to uh trade like they used to to be honest even more performant and obviously with the hype and Rise of Celestia only more is happening in the space um before we start talking about uh kind of the modular stack we first need to go back to uh what we're doing in web 3 really and what we're trying to build uh web 3 is the world computer after all the original vision of ethereum uh one Global State machine one Global computer where code is absolute law less verifiable without intermediaries a calls are smart contract calls that cannot be intercepted where nothing can go wrong and so when you interact with a product one can basically simply read the code and know in full what is going on why was ethereum so successful not only because of the fact that it's trustless and secure but to be honest truly because of the composability that you have this is what allowed for the Cambrian explosion of products one can build very simple small smart contracts that do erc2 taes and aggregate them into further products while still maintaining those same guarantees as if you're just interacting with a single product uh composition over uh duplication uh that's what defragments liquidity across the stack in the end we don't want to be reproducing products over and over that require the same liquidity to be functional for the end users we want to reuse existing liquidity over and over to build new products because products get more uh performance once we increase the liquidity in them that's the case for Dex says that's the case for vaults in the end most defi protocols need a minimum amount of liquidity to function kind of as an example this is what I think kind of most magic defi looks like in the evm we all start with ERC 20s we might put them in different dexes pools with different guarantees aggregate them in lsds probably have an aggregator in front of those dexes that's another Dex and finally we do some magic defy on top of that with incentives Etc but the real power of the evm is that all of these protocols can basically be banged out in a couple of weeks weeks and that new teams can come in and build on top of them without necessarily needing to have a contract with the company that they're building on top or an agreement you can just start composing everything and build new products now in the MRA stch uh we have to ask ourselves can we achieve the same does horizontal scalability prevent composition I think we're all familiar with 2018 when we had the old evm Rush where there were new chains being launched but these chains were just copy clones of ethereum really we didn't see any new products and we also didn't see interactions between these products what we see is individual monolithic chains where users bridge in temporarily maybe they stick around for a couple of weeks and then hop into the next one where we don't really see products tied into each other across these different chains so what we need to wonder how can the modular stack out compete monolithic Stacks right if we don't really have this composability yet how are we going to bring it and finally how do we prevent isolationism how do we make sure that that all of these decentralized sequencing networks Das don't end up with a th000 l2s that all have exactly the same all have 100 products on top of them and all need to build their own tribal worlds so before I'm getting too bearish on the mod stxs there are some great advantages to moving to it obviously shared security brings massive Economic Security for any application so we can actually move out of l2s no longer pay high gas fees but still benefit from the same security of the l2s now with execution proofs and ZK proofs we get even higher uh security guarantees and finally with data availability and sequencing we kind of remove the risk of censorship attacks so moving to the modor stack with your application is actually great and modular obviously On The Rise uh trusts interrupt within the modular St is on the rise uh it's grown tremendously over the last couple of years this is mainly from the cosmos ecosystem but also a bit from the celester ecosystem and I truly think this is going to boom and in a few years my my next graph is going to show a thousand more l2s and a thousand more app chains now to kind of TI to the topic of my talk The Sovereign trma as it stands right now in the modular stack we really cannot build a product that benefits from kind of the modular horizontally scaled characteristics that's still fully decentralized and interoperable right now we kind of have to give one of those away and most of the time what we do away with is the decentralization we accept drop ability through multi6 or trusted bridging providers and we do achieve decentralization on our consensus Tech through da Celestia and proofs um but we lose control over our assets we lose control over the bridge because in the end uh if you're in L2 obviously you have a settlement contract but outside of your settlement contract there exists some type of bridge contract and that bridge contract is what truly is in control of the assets on your chain now this is obviously what we're looking to solve with Union um as it stands right now modular truly cannot succeed um what we've gained in security so far um on the uh consensus layer da a layer we lose in Security on the interoperability but more than that we lose it in uh composability uh as it stands right now asynchronous composability which is the ability for us to bridge in and out of different chains send general messages and basically make calls to other chains it just isn't as good as synchronous it doesn't have the same security guaranteed it doesn't have the same speed it fails all the time it's one of the most horrible uxs out there um right now what we see is bridges that are run with a single signature relayer maybe multi- signatures and some better than that multi-art computation but in the end we're still offloading our security to some type of intermediary and the real future towards decentralization is consensus verification and state verification and we're kind of at the cusp right now of getting this in production to go back a bit because everyone always waves the flag like be aware of the security risk Etc we're all obviously familiar with Bridge hacks Bridge being emptied completely um some hacker gaining access to the contracts and all of us losing hundreds of millions something that we've forgotten in our mission in crypto is actually that we're also at risk of the SEC of nation state attackers in the end crypto is about laying down a Level Playing Field where no single country no single companies no single party has an advantage as it stands right now when we want to do a sing composability or bridging between EP chains we do need to move out of this pure CODIS law space and enter this kind of dirty uh offchain thirdparty intermediary space where we can be stopped by the SEC by lazerus or perhaps by the team that runs the multi one has to wonder do we want to live in a world where privacy Protocols are completely unavailable where certain products built by perhaps developers from certain countries on sanctioned list are literally unavailable in this M Stack Al together together or do we need to basically enable anything to be used and have the users decide to take on the risk I at least went into crypto because I want to take on the risk myself so we cannot ditch interrupt security itself that's probably the first basic block that we need to make this Vision true in the synchronous Tech code is law you read the smart contracts it just works in the asynchronous world we use intermediaries multix oracles they're all the same there's offchain parties running a server they get to decide what happens and most of the time these are run in the US in the synchronous world we have Atomic execution we make a call it's either going to succeed or fail but there's no intermediate state where your funds are in limbo not on one chain not on the other chain and now you need to DM the team what the hell is going on in the a synchronous world we have broken States uh it's just to be honest a horrible experience and so the synchronous world to me still is truly we three and with the asynchronous Mod Tech we've gone back to web 2 and so this is what we're obsessed with at Union how do we make this asynchronous world as good as the synchronous world how do we get that composability to the same level how do we prevent crypto from being attacked by nation states and how do we make that modular future true really the first key is to invert control interop ability is a right not a privilege right now interoperability is as if the ethereum foundation were to WID list every single smart contract we would never had the Cambrian explosion of products if fck had to prove read every single contract out there before it was deployed uh and this is what happening with bridging providers right now you contact them you wait 16 months they vet you if you have enough traction you might get support if you lose traction you're going to lose support and then you're kicked out of the ecosystem um we need Unstoppable systems systems that cannot be taken down by anyone not even the team right because sometimes teams abandon their chain or project but the chain itself remains alive with liquidity we saw with uh the multi-chain bridging system that literally the CEO got arrested and somehow that was sufficient for for the entire project to go down and literally the smart contracts to become inoperable and finally we need to hypers scale because what we're working towards is a future of 10,000 l2s a th000 app chains if we're going to go to that future we cannot be allocating 50% of our block space to interoperability right we need to actually make these system level calls that just function as a core part of a protocol as cheap as possible because we all want to make sure that we reserve as much block space for our user transactions I don't want my decks to serve 50% up I want my deck to do 100% in trades um and so these are the qualities that we need to look for and obviously at the Forefront permissionless and trustless allow any team to integrate in the system don't have the bridging provider go to teams do the integration have teams be able to spin up an L2 or an app chain make a smart contract call connect to the interoperability protocol and be part of the full stack because that allows you to go to this like 10,000 or 100,000 app chain future otherwise no company could support this we see some other protocols attempting to do this they might have pick and choose security models pay a bit more for higher Oracle security to me that also doesn't work um SSL everywhere TLS everywhere um so with that interoperability should have the same security everywhere we saw with tornado cach that their protocol was fundamentally sound uh but the real Avenue of attack was through the da by basically kind of boring lowlevel messages to take gain control of the entire protocol in a world where we have different Security in the introp stack itself we're of course all going to put the higher Security on asset transfers because we're all aware of heck's going to happen but definitely teams will cheapen out on their General message passing which leads us an Avenue of attack to take control of the protocols as it is right now just go with the higher security level that also composes the nicest can you imagine a world where if you made a smart contract call to one contract it had a different security guarantee than to another one where with one you had to kind of hop outside side of this world and have a potential failure or someone change the data that you're sending but with the other one it's pure it would be an absolute pain to write any smart contract on ethereum we would have to read through all of them one by one see what the guarantees are we couldn't just arbitrarily register new Unis swap dexes in our aggregator because the guarantees would be different and so it has to be all at the same level now with kind of all of the guarantees and properties that want laid out you really end up on one thing and that's consensus verification with consensus verification we track individual chains and we rely on the security of the validator set instead of relying on these third party intermediaries we generate proofs and if you want to scale out these proofs we generate zkps zero knowledge proofs which enable us to no longer allocate 50% of block space but instead only 0. one with consensus verification we inherit the full security set of the underlying chains you inherit the full security of ethereum without actually needing to pay IG layer at all you literally just get it for free by tracking that and so it's kind of the best we can do with the least gas cost with the least value necessary to be put into the system which means that protocols that do consensus verification have the highest value extraction for the own protocol for the end user it means lower fees for your users or higher Revenue back into your protocol and finally of course I've said already permissionless leads to hyperscaling and if an interop protocol has to decide on uh which protocols to support it will fail uh it's not not going to scale out we at junion have decided to bet on IBC IBC is a protocol originating from Cosmos designed to exactly allow this hyperscaling and kind of the app chain future itself uh everyone knows the meme there's 14 competing protocols let's build a 15th one instead Union decided to go with the fastest growing protocol and be compatible with that so what are we doing first um we're connecting all IBC chains we're connecting Celestia rollups we're integrating with ethereum settlement proofs and integrating scroll um we're targeting different evm chains all with proper consensus with proper finality and basically building out kind of this first layer of a zkp based powered standardized intro protocol across everything uh at the moment our proof generation is about 6 seconds uh doable on M2 Macbook so we have actually achieved the technological future where it is possible to build such a system now this is not a long-term future because the moment you start generating hundreds of zkps across the stack there's only one logical thing to do next and that's obviously proof aggregation a singular proof of proof that tracks every single state machine out there every single L2 every single EP chain um this is basically where a now we have a direct connection from every single chain to every single other chain where we can do storage proofs State proofs asset transfers General message passing with the same cost as if you connected to just one other chain it literally 10,000 chains has the same overhead as a single chain the only downside is computation goes up a bit but actually I think that this year we're entering the era where proof aggregation starts becoming feasible as well across the stack and I think in 3 years time we're going to do proof aggregation across thousands of chains this is also the opportunity where we can actually see intents become a reality right now intents are a bit wishy-washy right like describe what you want to do it's done but there's no protocol actually doing it but when you have this singular point of interoperability you can do coincident of once matching order flow against each other you can do just in time liquidity you basically get a single point where you have a complete overview of all chains all order flows and everything that goes on there and that's the future of making all blockchains homogenized where it no longer matters where your product actually lives because now blockchains are just basically rental security and orderflow providers and this layer on top is actually where you want access to all of this order flow that's actually where you want to build your products so how do we actually solve the interoperability problem how do we ensure that all all chains remain Sovereign but connected decentralized and hypers scaled the first one is simple ensure that we get those same guarantees as we have in monolitic stxs make sure that in the end we stay in this code is law space the next one standardize across the skyera within the modular stack right now we see different consensus systems different execution models different Das all of that leads of course to an explosion of new products and Technologies but in the end the one thing that needs to be the same everywhere is the interrup cuz otherwise we can't connect these products and then we can't homogenize them finally of course make interoperability extremely fast and decentralized and ideally allow users to generate their own proofs in a world where we can generate our own proofs there is no company that can disappear there is no offchain centralized compute that can be attacked by nation state attackers make proving and interoperability the same as miners allow anyone to just spin up their laptop and start participating because then you have a system that truly is software not a service and that cannot be taken down for me horizontal scalability is the future it's the only thing that makes sense to make crypto useful for The Wider community and to support any project out there uh the monolithic stack is dystopian and it leads to censorship in the end already it's hard to get tornado cast transactions into ethereum it's already being limited on the protocols that can develop on there um light clients and zkps enable this horizontal scalable future and the future is modular um if you guys are interested in uh the work we do check us out on unbuild at unu and give me a follow and this is type of stuff we talk about that we're interested in and uh feel free to reach out to me afterwards if you have any questions or Q&A thanks Carell super interesting