Visions of Ethereum and the Path Ahead | Ben Jones - Optimism

[Music] what's going on y'all oh yeah now we're online let me get some hands shout out to all the massive crowd let's go yes appreciate it y'all what's going on um my name is Ben I work on a project called optimism uh but really I think for the purposes of today I work on a project called ethereum um so really I'm zooming way out here I'm not going to spend any time Shilling or talking really about what Optimus is building I want to talk about where I think we are at as a community uh as a network uh as ethereum and I think you know especially if you go to the uh you know vast Echo chamber that is crypto Twitter and the rest of social media you know I think there's a case being made that ethereum is going through an identity crisis at the moment it's kind of like a bunch of fragmentation in other chains and competitors and l2s and l3s are popping off and we're having a kind of moment of re-evaluation of what ethereum is and what it needs to be doing and I think there's some truth to this uh on the other hand I think it's important to say that ethereum has not been one static thing over the course of its life and what I think of today that you might call if you're trying to FUD it a identity crisis of ethereum is is really more like the next progression of ethereum understanding at a deeper level what it really is and so I think it's worth taking a second to look at what the history of ethereum's identity has been uh because again it has not been static obviously where we started was the launch and I think if you can say one thing about the identity of ethereum at its launch I think you would say it was the launch of the world computer like I don't know how many of you guys have gone and watched the original like metallic presenting ethereum to the world for the first time but it was like a true mic drop moment I mean think like look back on it and imagine vitalic getting a standing ovation at Bitcoin Miami from a bunch of bitcoiners saying look it's not just money that we're decentralizing it's the whole internet um and it was a big deal at the end of the day it was definitely underspecified you know scalability is something we think about a lot in ethereum and actually if you go back to the original ethereum white paper you will see actually an entire page dedicated to scaling which is very interesting um the problem with such a large blockchain size is centralization risk and actually if you look a little further and you keep going you'll see the start of designs for ethereum that are very similar to the scaling that we see today um you know this is the quote I can read it but effectively what it means is we knew quickly the same basic strategies that actually we using today vitalic was I think surprisingly preent surprisingly able to look ahead and see that scalability was going to be a problem and gesture at the solutions that we were going to solve and a lot of what it says looks a lot like the Roll-Ups that we have today at the same time it was a big of bit of like we figure it out energy and I don't mean that as a dig I mean that as a positive it's an example of how ethereum created an identity as the world computer and understood that it identity its identity would evolve as we continued to scale and I think the next era of ethereum was the act of figuring it out there were uh I mean I think of this as like the Golden Age of scaling R&D you know e search at this time e.ch like the internet form was absolutely popping it felt like every day every week uh you know there was huge new exciting developments in the world of scaling and ultimately that time period like led to the rest of the scaling uh you know um Milestones that we see today and you know what was really cool about it was that L1 and L2 scaling was all happening in the same place this reers was all coalescing um I think if you look back at uh you know early ethereum road maps it's easy to forget that originally ethereum was going to do everything like L1 scaling had these phases what is it oh I guess it's yeah that's how left and right Works yes L1 scaling had three phases which included effectively in the last phase phase two doing what the rollups do today it was going to be fullon execution sharding at the same time there was just like an amalgamation of incredible incredible development in the L2 scaling side as well and we started with these State channels where we could really scale up the transactions between a few parties then we started building these plasma designs which were very chaotic and messy and we had like a billion of them but we ended up starting to think about how do we have chains that scale in a lay or two context not just these State channels and eventually we came on the design of rollups and what we realized was that rollups were extremely similar can you see my pointer oh yeah I bet you can rollups were extremely similar to the execution sharting and actually before you know it's a very fam famous post by vitalic the rollup Centric ethereum road map I I think it's worth noting that even before we saw that what we saw was something called phase one and done which was just the general idea that if we scale up the data rollups maybe can take care of the rest so this was another era of scaling like I think that in this time period we were laying down the fundamentals of what it would mean to scale ethereum and how we were going to go about doing it and it was absolutely incredible and then we figured out monetary policy was going to become important the eth is money era the ultrasound Revolution this was a big deal um and remains a big deal but it was really birthed during this era as we started to think about the monetary supply of ethereum and obviously a huge motiv ating Factor behind that was EIP 1559 which is the idea that oh hang on a second we can take all these transaction fees that users are paying and actually a lot of that can be burnt as eth instead of paid out to validators this gave birth to well we're going to become a deflationary asset ultrasound money you know um Bank list had their uh triple point asset meme I think unsurprisingly this addition to the ethereum identity came at the same time as ethereum found some of the biggest product Market fit that it we had seen in all of crypto at the time it was the birth of Defi and like I you know just went on Google uh news and filtered out to this time era and found a bunch of articles there was an understanding that ethereum was finding something new in defi it was the kind of uh you know movement from the world computer to having an idea of how to scale it to starting to realize some of the things that it's for and defi was undoubtedly the first big product Market fit that we found so it makes sense that we started obsessing with monetary policy at the same time that decentralized Finance became a part of ethereum's identity and you know I think we're in the next era right now and it's easier for me to go and look back and explain what you know what what what it is now that it's already been written so we're writing that history right now but I think that I would claim is as we're sorting out these details ultimately what ethereum is doing is expanding its identity and getting a better grip on what its identity is not fundamentally rewriting it none of these moments in time were like crises of the ethereum identity they were evolutions and it's a good thing that we're evolving again it's like there's light at the end of the tunnel we've gone from an era where we're trying to figure out what the heck ethereum is for and how the heck we're going to scale it to like realizing oh snap we are actually scaling this thing and that brings new challenges but new challenges new problems are not bad it's a good thing to have these problems and it's a good thing for us to continue evolving our identity so that's a little bit on the history I think it's worth us as a community though looking at where we are at in the present so I think it's time to do some cold hard numbers because what do the haters say you'll hear that l2s are parasitic to ethereum you'll hear that all L ones are eating ethereum's lunch you'll hear that ethereum is fragmented and these are valid things that we need to talk about we shouldn't bury our heads in the sand we should talk about them so our so you know L2 person comes up and say it's not a parasite but rl2 is Parasite to ethereum I think this is kind of the most laughable one of all of the eth fund narratives right now it really is really funny it's like imagine that metallic had posted the parasite Centric road map for ethereum what could a parasite Centric etherum right it's like kind of laughable it's almost ridiculous um at the same time so obviously not and one thing that I would add to that is that every competitor to ethereum is incentivized to say that l2s are Paras iic because they are scared of a unified ethereum they don't want to see us win together you know whatever the meme may be at the same time I think we need to take a realistic view of what is actually going on in the world of l2s they're clearly not parasites that's just like a laughably ridiculous word to describe imagine if ethereum was still stuck with only one L1 and you know it's 2 to100 transaction fees depending on the day and the same amount of throughput it's ridiculous at the same time we should acknowledge l2s again are an evolution of ethereum like we have new business models going on in l2s we have new you know evm designs new functionalities we have new governance layers these things are changing it's just not in a parasitic way it's an it's an evolution I think it's worth also looking at some cold hard data of how ethereum is doing in the market place like is ethereum's lunch getting eaten we need to look at the numbers to be able to answer these kinds of questions and the numbers I think overall are mixed some numbers are really good if you look at tvl we've got 8X more tvl than the next closest L1 knocking it out of the park if you look at the growth of uh stablecoin tvl and grow of crypto app tvl we also are in the lead like we are dominating the backbone of onchain Finance by certain metrics at the same time we have work to do folks we really do we if you look at Dex trading volume ethereum is barely in the lead it's kind of of neck and neck you know what's 20% in an industry that is Extreme as volatile as ours um if you look at transaction count ethereum if you include all even if when you include all of the l2s has a third of the daily transactions than the next leading L1 if you look at application fees we have about half of the application fees being generated as the next leading L1 we need to acknowledge that these are real things numbers are hard and like you know you could argue back and forth a ton about how I came with these numbers and one of my calls to action on this presentation will be help with the numbers because they're really tough so putting that aside is ethereum's lunch getting eaten I don't think that's obvious could ethereum's lunch get eaten absolutely I don't think we should put our heads in the sand and deny that that's possible and that you know to address the last Narrative of the three that I uh started out with is ethereum fragmented I mean go and use ethereum and you tell me first you got to go and switch your networks to the L2 of the new app that you want to use then you've got to take your Bridge tokens and you've got to wrap them into a bridge token and send them over the bridge then maybe you have to unwrap them into the native token because oh and then wait I forgot I need to have gas money so I need to go get some eth oh or maybe it's a custom gas token chain so I need some other asset I mean it's a mess right from the developer side you have different smart contracts can behave differently on different chains you have different transaction types I mean the list goes on and on and on is ethereum fragmented absolutely absolutely it is and again this is something we need to address and I want to be I want to be clear I I hope you all appreciate this AI generated version of the tradeoff or mean I want to be clear this was a good trade for us to make I don't think we would be in a better spot as a community or ethereum would be in a better spot as a network if we didn't make this tradeoff what we said was we're going to let the l2s run with it they're going to give us huge throughput gains way turn down the cost of transactions and we're not going to have to sacrifice decentralization along the way but that doesn't mean that everything was free the the money Legos which were that product Market fit in the era of you know eth as money and the ultrasound Revolution those money Legos were key to that story and it is just harder to put together the money Legos when they're spread across the ethereum ecosystem today because the boundaries of chains are tougher to cross so that's a little bit on where I think ethereum is I think ethereum is doing really well I don't think we're having an identity crisis I think we're evolving our identity and peeling back the next layer of the onion um at the same time there is serious work for us to do as a community so what do we need to do as a community one thing that I've been harping on and I'll harp it on to you again is we need more robust economic models you know if you look at um uh the incredible work by John charbono and the DBA team they they've built out this tev rev framework where we start to look at what does it mean to have a proof of stake Network like ethereum what does it mean for it to have issuance what does it mean for it to be paying to things to validators what does it mean for it to be taking in fees and burning them there's some really cool work going on that's like a kind of a zero to one moment but at the end of the day like looking at eth the asset and how much eth is going in and coming out to the different stakeholders is a tiny sliver it's it's like uh you know a single measure like the Surplus or deficit of a country it's like we're looking at one part of what is ethereum when in reality ethereum is a Global Network of economic actors and with birth of l2s it's a Global Network of L2 networks themselves like the graph is immense and we're basically when we look at just something like TV or RV in ethereum we're effectively looking at just one measure when we could be looking at an entire GDP and you know for as a matter of fact it's like more than that there's like layers upon layers of these economic relationships from the users to the apps to the infrastructure to the wallets to the BL space itself these are incredibly complex economic flows the data is there so much lives on chain but we need to do a better job modeling and understanding what the data actually says because I got news for you there's probably 10 things that were wrong in the slides and the graphs that I showed and the only way to figure that out is for us to dive in and read the data another thing that we need to do critically is we need need to gain back the network effect we need to defragment ethereum is absolutely fragmented and the good news is on this front a lot of awesome work is happening I think that 2025 will be the year that we kill ethereum ecosystem fragmentation intents and the ability to send uh funds across chain in a much more easy way is going to be a huge piece of that account abstraction the idea of killing Network switching and making the wallets actually work because they were all built for one chain and then we introduced a thousand of them is going to be huge and then a variety of uh you know interoperability protocols on top of that need to happen and with these tools we will make ethereum feel like one chain again and we'll have all the advantages of having many without those downsides that we made in the original you know trade offer as you will at the same time we need to continue being the leader in decentralization the reality is if you go to L2 beat there are four out of hundreds there are four chains that are stage one decentralized even stage one in some ways is a glorified multisig but stage zero is a real just multisig security model effectively the reality is that's still better than any other community right we still have the four stage one chains but that number needs to go way up across the board at the end of the day part of the like you know if I go way back and you regret my life part of part of part of what we were doing was getting gains without sacrificing decentralization and we've done that to some extent but we need to lead there we need to lead and I'll also say that there's some really awesome new uh uh designs coming out in ethereum research these are eth research screenshots maybe we're returning to another a second Gilded Age of eth research building based and Native rollups and I think you know I don't have a lot of time to really get into these topics but I think if you know are The Plea that I would make to you is to understand that these are incredible superpowers that we will give to the l2s the reason to do that is to make the l2s better it is not to recoup a bunch of uh eth back to ethereum back to L1 so my plea would be don't let economics of these things kill the feasibility the reason that native and base Roll-Ups are going to be valuable is because they make l2s better and that makes them get more adoption not because it Returns the bag to eth in exclusivity last but not least we need to scale you are just not bullish enough on the future of the world computer if you think that what ethereum can handle today is acceptable even with all of its l2s and even if you look at the you know most you know specified well specified parts of the Dank charting road map where we increase the transaction throughputs still I don't think you're bullish enough on crypto and on the world computer if you think that the entire decentralized internet is going to run at the kind of scale that we're talking about here so we need to keep scaling um and we need to do it quickly too like one of the failure modes could be we figure out how to scale ethereum and then it takes years to actually get those upgrades released into prod we need to actually be able to act as we build out better and better and better features so B Forks being able to Fork um just to increase the number of blobs is one approach metalic says just let the stakers vote on it I'm down let's do it but we need to come up with something here so just to wrap it up I think what I would say is the most important thing that I want you to take away from this presentation is don't believe the futs everyone is incentivized to say that ethereum is fragmenting and falling apart and has came up with a parasite Centric road map and that's just not true what is happening is ethereum is peeling back the next layer of the onion it's coming to understand the next part of its identity and that's a really really good thing and I think it's undeniable that we have to accept that the role of layer tws are to Steward and carry that torch forward and to do that we need to do three things we need to unify we need to get stop infighting and make everything all of ethereum feel like one big chain we need to keep decentralizing and remain the leaders in that field and we need to ship the upgrades that will scale these things to the next billion users so that's all I got if you want to contribute to the data come check it out scan that QR code we're putting it all together it's going to be going be great thank you very much appreciate it y'all wo there we go I know I screwed up when you were supposed to applaud it's your it's my bad it's my bad thanks y appreciate it