Building the next generation of DeFi on Gnosis Chain | Stefan Piech, Gnosis Chain | ETHTaipei 2023

and uh this is our first is Taipei like first year so I want to thank you guys for coming okay and uh I am the NC for the D5 track this morning and I want to share some updates about East Taipei so we created a YouTube channel last night so you can already watch re-watch vitalik's talk on YouTube so can you guys open your YouTube channel right we have the QR code here actually you can just scan it nice right and please subscribe to our YouTube channel we're gonna upload all of the talks into this channel so you can check out later and also I want to thank the sponsors for helping us hosting this event because this is the first year and it's it wasn't easy to make this come true so the sponsors include nurses chain and token Auto pass tenderly and more and speaking of sponsors here we are welcoming our first talk the speaker of the first talk which is from our title sponsor nurses chain so that's welcome uh Stephen [Applause] nothing more that I wish good morning everyone I'm happy to see a few people actually made it out at 10 A.M so I assume all of you did not go to karaoke but it's great that you're all here and I want to take maybe the next 20 to 30 minutes talking about gnosis and how we're building the future of of defy and what we're actually doing so a few things I'll touch on is why we have gnosis and why it's so important that we are wound and I want to touch on things like decentralization us building the ethereum voice and then Deep dive into a few projects building on his own noses and that includes Hashi that includes cow Swap and also seeing how a lot of projects come together and helping to bring real world assets onto crypto and onboarding new users this way so let's Jump Right In why why noses and it's three things but if we start off the first thing that really stands out we're not just another evm chain we're actually compatible on the consensus layer but with a lot cheaper gas than ethereum or layer choose which really gives us an edge when we think about adoption we are building what we call the ethereum verse so think about the IBC approach that Cosmos is having but bringing it to ethereum which so far has been quite difficult to do but um we're working on that and make it possible to have other Beacon chains um connected in this in this interconnected reality and the third point of why gnosis is important and why we around this we're highly decentralized and I think most of you will have some centralized touch points in life and know about like centralized fails and we talk about it a bit later on this presentation but decentralization is actually extremely important and we are the third mostly centralized chain if we consider Bitcoin the second most decentralized if we just look at ethereum and other smart contract chains which really helps us to to set us apart and have an edge so let's take a step back and dive into a few of these points um most chains are mainly equivalent on the execution layer level with ethereum if we talk about evm compatibility um we are actually also compatible on the consensus layer which is giving us a long-term Edge due to like the network architecture we're deploying and that means if we like put that into context we are compatible with future ethereum upgrades erp844 um so proto-dength charting and other evm changes where layer tools will struggle and have to like change the way they're operating for us it's quite easy to just keep upgrading and stay close to to the ethereum roadmap and we also open peer-to-peer Network so we have a lot of node operators that talk about decentralization and a point but they help to run um our gnosis client softwares so on the composite layer architecture we are utilizing if we even dive into just the consensus layer we can see that we have the same architecture and tooling that ethereum is using and we are very close to like the core ethereum team helping support initiatives there and kickstarting to be fair a lot of initiatives on gnosis chain but there's one thing that is also setting us apart and that is our dual token model we have X die a few of you have maybe already like used the faucet and got some free free bubble tea earlier or yesterday but we have XI as a stable token which helps you to to pay for your gas and we have GNR which is our proof of State protection token so use for the for the validators and why this matters is if you would want to just open like a Bitcoin plus lightning State Channel at your birth and then close it again 80 years later when when you're old and retire Bitcoin would actually not have the bandwidth to do so and we have congestion and other problems at other changes as well so think about a very simple example you wanna bring Real World Adoption to crypto you want to not just have a few developers building very cool products but have like your parents use it as well and see adoption so if we want to have a credit card interaction and and pay for coffee I think if we have high congestions you guys would not want to pay a hundred dollar gas to to pay for your coffee and we can see the same problem with other layer tools where they already improved a lot in in terms of scalability but even they are in a high congestion so now your arbitrum might still require a one US dollar gas because basically they have the same model as ethereum and and the problem there if we look at gnosis Shane thanks to our unique approach with having X die as a stable token for gas it's a lot cheaper for us to operate so it would be probably less than a cent even to to pay for for your coffee which makes it a lot more feasible and also makes it a lot more feasible for defy because in the end like it really makes a difference on on the operating cost that that you have the other point I want to touch on is the ethereum verse and ZK bridges are our true Game Changer um it's it's great to see what we've been able to do agnosis Shane we can now have very secure breaches and this way we can want a full like client of ethereum on gnosis chain and vice versa and with that we can proving consensus and proving that like this was a Blog that was signed by a majority of validators this brings us to the ethereum versus approach to scaling where you have the classic Cosmos Hub model with IBC and US basically doing the same because now we have the secure Bridge Approach so this idea combines the idea of like Cosmos with the idea of ethereum so one in a like client has been the idea of IBC in essence and it has been hard to implement this for ethereum for a long time but we can now have the same operability which we call ethereum Voice um and change that use evm B constraints and the other point is decentralization and I I used to um think a lot about you know where to put my my money um and if it's a safe place and I think just the question into the room you don't have to answer but just think about if you would trust any of these companies with your savings like really lifetime savings not just like a 50 deposit and I think most of you would probably not most of you might not trust um Silicon Valley Bank a very centralized Bank in the U.S and there's a reason for that and the reason is because they're very centralized we don't know really what's going on behind closed closed doors Frankly Speaking a lot of layer twos are still very centralized in just multi-six in the back end but it's important that we enable security and especially for financial products for for life savings for D5 we need security and the security can be foundational with providing decentralization so if we actually look at agnosis we have more than 100 000 validators the second most number of validators actually won't after ethereum and if you go to a website called D14 and you can actually also dot info you can actually also compare the Nakamoto scores for ethereum versus gnosis and see how we are also decentralized on a lot of different levels which which is important that it's not just a lot of validators but broad range of of decentralization um so maybe tonight if you go to the after party um you'll be well informed because you're here for the talk now and you can tell everyone that gnosis is building the most incredibly neutral Network so that might be you um later tonight but let's jump into a few other things I want to touch on one knows the chain building a huge ecosystem of projects deploying on it of projects being incubated through it and starting on it especially on the D5 site as well one of them is cow swap so I'll touch on that a bit and give you an idea of what Cal swap is um to to give you a broad sense it's a fully permissionless metadex aggregator leveraging Coincidence of ones but what does that actually mean so if we think about the classic Model of automatic market makers like sushi or uni swap we can see that if you as a user would want to sell 50 each and another user would want to buy 50 they both interact with the amm they both pay a spread on that and there's less efficiency like the the state of uni stop in the end did not change it would still have the same capital in the lp cool but actually two people being worth of interacting and paying for the spread um the reason why we have this model is and the reason why we have Mev to be fair is because we took a lot of approaches from traditional Finance So In traditional Finance we want to achieve efficient market so incentivize trade us to input information as fast as possible and the way to do that is by rewarding like being fast and we we do that by having like Mev extraction however with crypto it doesn't really apply because within crypto we only get new information when we get a new block so we we get ordering within the block and people pay for that but it doesn't really make sense having a price time priority um which is well frankly why Mev exists so the cow swap approach is a bit different instead of having the initial amm model we actually have two things and that is batch auctions and uniform clearing prices the bets auctions come in when you think about The Coincidence of ones and The Coincidence of ones basically just means you have person a wanting to sell x amount of token a and person B wanting to buy that and the other coincidence that they want to exchange these two these two tokens for maybe like a limit price but so what we can do then if we know there's people wanting to interact that we can batch it up so what calsop is doing they initially batch transactions and because it doesn't really matter having the the time ranking for Mev and we only get new information if there's a new block we can then have uniform clearing prices to to prevent Mev extraction here so the goal is that within each single block traders that trade the same token pair should regardless of their ordering all receive the same uniform clearing price and then basically what happens is we have the protocol initially matching traders that that want to like trade and like matching the trades and only then we used to include someone called a solver so a solver would basically help you to find that it's a professional and all of you can actually become solvers the same way you can become validated prognosis it would help you then find the best execution price that you can not easily find if you just like want to swap on like metamask or or uni stop so they're like professionals working on this um so in essence we we start aggregating multiple trades intense together so when using Cal swap you don't initially trade you sign a trade intent and with these trade intents then we can allow for more efficiency and a solver can then apply certain rules that that help the trade to be happen at a very efficient execution price so how does this actually look I just wrote down a few steps but think about it like this you have to like order um initially being set or your trade intent so these orders are completed and split into different batches and each batch is sent to multiple solvers a solver will try to find and they're incentivized actually to to find the best solution for you and solver will try to find the best solution and you have a joey um we call it a driver that will help you to to find the best solution and only the best solution is then settled on chain thinking about it I think it already makes sense in in a lot of aspects of what calstrap is doing but um it's great to have this polynomial as aggregator for for dexas and also the batching tool and front end and all of you can actually trade there but also build on top of it um the fair uniform clearing price makes it a fair place to interact and prevent Mev so that is something to to keep in mind and with the solver and the decentralized element you get the best execution possible that you would not get in other places there's other things we're doing so we also bring Real World Adoption to crypto and we're doing that in a few ways um well one save is a product of ours where you can see it as like yourself Sovereign Bank and have a multi-stick that that secures your your crypto but let's think about how the different things can like be interconnected so we have another product called monarium building on agnosis Shane and monarium is issuing euro-denominated stable coins but what they're doing they have a SCPA a separ license in Europe so actually as a crypto project you can have your your bank account yourself server and bank account unsafe and pay your employees either in crypto or for your expenses and employees that uh um want to be paid on their bank account you actually can interact with European bank accounts while now using monarium the Eur stablecoin all of this is possible because we have projects like kapodky providing liquidity so kapati is providing liquidity wide now and um the Yule 3x curve pool and with that making sure that there's plenty of liquidity and this is important because it enables you to to onboard to crypto to your bank account very easy with without any headaches and all of that being built on north of chain in a decent like the second most decentralized chain um the only one that's taking the really really serious so making sure it's all in a safe place but we can do more than that and one thing we're doing right now is even onboarding more users and with the exercise structure we're having it's quite easy and makes it quite easy for people to actually then use this credit card for Real World Adoption and buying coffee and we have credit card integration we're working on and also bringing on real world assets so think about the credit card having a dual application function it's your Visa applet so you can have normal like Visa payments for it but it links to your wallet and maybe some transactions similar to like like my revolu card you can just tap and if it's under thirty dollars it all goes through and it's fine and if it's a big payment you have to like use the authenticator authenticated in your in your wallet to make sure you actually want this transaction to happen there's a lot of stuff happening in the back end from the processing but all of that again is being built on agnosis chain making sure we bring decentralization to these elements that that help users to to stay safe and if you take it one step further and think about Real World Adoption and real world assets frankly with projects like back.fi that are building on on gnosis and helping integrate real world assets so with all of this being interconnected with safe monarium and also Shane or credit card gnosis pay coming soon and and back think about having your credit card that's your hard wallet you can pay for it you know it's safe because it's a multi-stick in the end um if you wanted to be and you can make sure all your transactions or your payments can be done in in uo you can pay like your employers with it in the end but you can also dollar cost average into ethereum every month or into uh index funds so you never actually have to to leave the system and this is something my parents can do like they they understand the concept of dollars of averaging I think that's where it slightly ends but it's really easy for them to just know they have a credit card it's saved by by having a blockchain being an underlying layer and you don't have to like rely on a centralized Bank like Silicon Valley bank and make sure you can dollar cost average into into your savings there's other projects we're building um the last one I want to touch on is Hashi a lot of you might have heard about it before if you've went to the hackathon because there has been a bounty for it but it's a pretty cool project and starting off with the problem we're facing is two billion in bridges 2 billion US dollars with stolen bridges in 2022 which is a huge amount and if you look at the the work leadership board like four out of the five biggest tags I have been within Bridges so it's quite important to think about security but the problem we have is like no bridge is 100 secure you cannot really trust just one single Bridge which is where Hashi is coming in um so knowing that all these Bridge designs have differentiatives in terms of cost security audibility all these kinds of things we want to make sure we create a product that's a lot safer and it's much more secure if you require messages to be validated by multiple independent mechanisms rather than just one so rather than just relying on one single Bridge you rely on multiple Bridges um one thing or maybe um before talking about design principles one thing we're doing is we have a setup called why host so that's a redundant Airway for independent hash our kills and that helps you to like go through this process and for all of you who are developers it's quite cool because you can actually build on on top of of Hashi so you can query it but you can also allow users to build or we allow users to build on Hashi and have custom all color doctor contracts um so really figuring out for yourself how you can like Leverage it so if you're a developer it's it's a cool place to to build on and really solving a huge issue on the design principles it's a few to consider um let me just show you all at the same time but we believe that the block header abstraction layer is probably the best for standardization aggregation of course there's some government elements to consider but that's where we want to like standardize so we really standardize on the on the lowest level in the in terms of design of Hashi and also long for diversification of change um on of bridges of course frankly that could be better diversification um if we think about like Bridges using similar mechanisms but what we are doing is we have later security over latency so it might not be the fastest bridge but I want to like I'm a paranoid person I rather be safe that my money is going through my bridge and comes out at the other side um and it's not being lost or drained and securities for my understanding a lot better than having latency but that's something if you guys have a cool idea figuring out how we can like combine those two and even solve it there's a lot of components that come into play and we'll share the slides afterwards I think so it's easier for you to like think about the design um on on how Hashi actually works but I think the key takeaway for for all of us is we want to bring Real World Adoption to crypto we want to be safe when we interact with crypto we want to do it in a decentralized way and not having a centralized failure point there could be a layer 2 multisig that um we don't know like we all have high hopes that like everyone is moving in the right direction but you have to like have trust in people um for us we we rely heavily on decentralization and want to build a very decentralized future so all of you can actually become home validators if you want to it's quite easy you just need one gno you can ask us for information later but there's a lot of documentation on the website you can join the the gnosis ecosystem and interact with a few of the protocols that we've built like house swap and to really make sure you get the best execution and build your projects on on gnosis chain if you're in any kind of like crypto space I think D5 is a cool space considering the design of X die um but yeah that's that's my talk for any of you who are sticking around a bit longer we have three boba tea later so you and we have a free nft that you get with it so you can scan the QR code get free Boba um get a very nice nft and collect that um yeah all right so it's time to take questions [Music] them quick recap of knows his chance advantages it's highly decentralized it's evm based and it's closely follows up ethereum roadmap so if you have any questions you can raise your hands now we have you can also yeah you can also come by our stand later and talk to us if you want to learn more about some of the projects and learn more about us all right can you try again the mic [Music] keep moving closers so you ask about security mechanisms for Hashi why um yeah so I'm actually not with the Hershey team so I cannot give you the best answer um if you give me a telegram later I can put you in contact with the right person if you think about the security element it is relying on basically abstracting the idea of not just relying on one bridge but relying on multiple breaches so on the design side it's then really having this redundant area of independent hash articles and combining them and having um them being validated by multiple mechanisms I'm not too sure on like exactly the detail of the mechanisms but I can tell you after after this um so you said that uh closest chain is both very decentralized like it's easy to run validator and also very cheap so it has very high throughput like how is this possible wouldn't this mean that you have a huge stap load and like how how is this trade-off solved so the question of how we want a lot of validators but still be able to have such a low guess um well on the validator side the validators are rewarded with gno right so gno and xdi are not linked in that sense um so X star is like independent and being used for gas and gno is being rewarded for validators and has utilities like government power and stacking rewards and and things like that but I mean if if you run a validator it means you run like a note with all the state of the blockchain right how how do you enable this to be like still easy and uh like for anyone on a normal computer to run this uh while still having this massive throughput I have to double check with you I'll grab you after this talk and let you know um but I don't want to like tell you anything that's wrong so let's take it off stage in that that guy okay okay question okay no he says the same question so it's okay all right last question anyone foreign