Modular Media https://paragraph.com/@modularmedia-2 Modular blockchain news and education Sun, 17 May 2026 12:38:45 GMT https://validator.w3.org/feed/docs/rss2.html https://github.com/jpmonette/feed en Modular Media https://storage.googleapis.com/papyrus_images/fbeba8b03290b8901d478b313003d989ac44b489a5e002c4bb03f9a94309719f.png https://paragraph.com/@modularmedia-2 All rights reserved <![CDATA[Weekly Rollup #21]]> https://paragraph.com/@modularmedia-2/weekly-rollup-21 bjuHsCLKgPfnGNLhcVmB Tue, 04 Jul 2023 14:33:25 GMT 👋 Welcome to Modular Media! We cover news, updates, educational content, and more within the modular blockchain ecosystem.

Subscribe to get posts sent directly to your email every week, and follow us on Twitter for modular-related updates!

This week’s issue covers:

  • Introducing the ZK Stack

  • Polygon Unveils 2.0 Architecture

  • Froopyland: Dymension’s First Incentivized Testnet

  • More News & Announcements

  • Will rollups outsource ZK proving?

  • Do optimistic sovereign rollups make sense?

  • More Discourse & Education

Modular Cloud is reimagining developer tools and cloud services for the modular blockchain stack. Get in touch to learn more about Modular Cloud's product offering today, including the world's first block explorer for modular blockchains.

📣 News & Announcements

Introducing the ZK Stack

https://twitter.com/zksync/status/1673317167628967936

Last week, zkSync announced its ZK Stack, a modular framework that developers can use to build “custom ZK-powered L2s and L3s (referred to as Hyperchains), based on the code of zkSync Era”. In other words, the ZK Stack provides teams with the tools and infrastructure they need to build their own zkSync-like network, but for their own specific use case.

This year, we have seen the top Ethereum L2s announce their own modular framework to expand their own ecosystem’s network of rollups. There’s Arbitrum Orbit, Optimism’s OP Stack, Polygon 2.0, and now the ZK-Stack.

Customizable Components

Using the ZK Stack, developers will be able to customize several different components within their own rollup, including:

  • Data Availability (DA): whether you want to have a full-scale zk-rollup and have your data posted on Ethereum, or whether you prefer a validium solution that posts its data on a separate network, such as Celestia, Eigen DA, or zkSync’s own zkPorter.

  • Sequencer: teams will have the option to either have a centralized or decentralized sequencer solution for their specific rollup. Don’t want to share a sequencer with other apps? Use a centralized solution. Want to provide maximum decentralization? Use zkSync’s soon to launch (on public testnet) decentralized sequencer solution.

  • Tokenomics: use your own token for gas on your rollup, to stake for your centralized sequencer, etc.

& more.

Sovereignty, Seamless Composability & Account Abstraction

Aside from these customizable components, there are a couple of features each rollup will get to benefit from right out-of-the-box, including network sovereignty, seamless connection to the rest of the Hyperchain ecosystem, and native account abstraction to improve the end-user experience.

Put simply, being a fully sovereign Hyperchain means your network is not defined by whatever zkSync says - networks have independent control and can push network upgrades or respond to hacks without waiting on approval from anyone. Also, it means you can take your Hyperchain and leave to a different ecosystem if you ever disagree with zkSync’s direction.

zkSync envisions a large network of Hyperchains, and if this is going to be the case, then connectivity between each Hyperchain is essential. As a user, you shouldn’t have to go through several different steps in order to go from one appchain to another. Connectivity should resemble the internet; you just click a link and you’re wherever you want to go. Within the zkSync ecosystem, every Hyperchain will have seamless composability with one another. So as a user, you won't have to bridge to a different network, utilize extra capital, or make any additional trust assumptions in order to perform a cross-chain transaction. This is all done within a single transaction from a user’s perspective.

Aside from seamless composability, teams, and end users will be able to take advantage of zkSync’s native account abstraction. As a reminder, account abstraction allows developers to adjust their payment structure, thereby improving the user experience. For example, you could increase the end-user’s security by allowing him/her to sign for transactions using biometrics (faceID, etc.), remove gas fees altogether for end-users by subsidizing them using some of your earned revenue, and much more.

So who will Hyperchains be for?

While it doesn’t make sense for every single app to have its own dedicated rollup, it may be useful in certain scenarios, including:

  • when you need to add your own unique chain customizations

  • apps that don’t want to share a sequencer with others: fast & efficient sequencing

  • high-frequency defi apps like DYDX

  • enterprises that want chain privacy while still being connected to the broader ecosystem

What’s Next

The zkSync team will publish deep dives over the following weeks to give the community a further understanding of the ZK Stack. You can find several links down below to learn more about ZK Stack if you’re interested!

Polygon Unveils 2.0 Architecture

https://twitter.com/0xPolygonLabs/status/1674538238835343361

This past week, the Polygon team unveiled their proposed architecture for Polygon 2.0, which is “designed to provide unlimited scalability and unified liquidity, and realize the vision of Polygon as the Value Layer of the Internet”.

The Scaling Problem:

Polygon 2.0 intends to address the current challenges faced by web3, where the addition of new chains leads to liquidity fragmentation, as well as a subpar user experience. For example, it aims to resolve the trade-off dilemma faced by users who must currently choose between different liquidity pools on various platforms - “Do I want to LP on Polygon PoS, or on Polygon zkEVM?”. This architecture consists of four protocol layers, each serving a distinct purpose, enabling seamless coordination and facilitating future upgrades. This modular approach allows for continuous enhancement and optimization of individual layers to keep pace with emerging innovations.

These four protocol layers in Polygon 2.0 include the Staking Layer, Interop Layer, Execution Layer, and Proving Layer.

Staking Layer

The staking layer is a PoS based protocol, that “leverages Polygon’s native token to provide decentralization to participating Polygon chains”.

Polygon sees a future in which many networks will be running under the Polygon ecosystem (appchains everywhere), and this is where “restaking” comes in. Rather than having each of these networks take the time to grow a decentralized validator network, they will be able to leverage Polygon’s existing set. In return for the validator's services, they are rewarded with different Polygon tokens, as well as having the potential to earn extra revenue through transaction fees and token rewards from the chains they validate. According to a recent Twitter Space, users like you and I will be able to stake our MATIC to take part in some of the components mentioned below, including the aggregator and prover.

Interop Layer

If Polygon intends to have all these chains across its network, then they’re going to need a way to seamlessly communicate with one another, and that is where the interop layer comes in. According to the team, users will be able to access any Polygon app from whatever Polygon chain they are on. This interop layer will enable (1) a shared bridge with Ethereum, meaning no more tons of variations of a single token, and (2) seamless composability, which means “near-instant and atomic cross-chain transactions”. It will all “feel like a single chain”.

This interop layer will be enabled by the use of zk-proofs, which will be handled by Polygon’s newly proposed “aggregator” component. This aggregator will be responsible for accepting zk-proofs and messages, as well as aggregating all these zk-proofs into a single proof to be posted on Ethereum (reducing to 1 single proof lowers fees of course).

Execution Layer

“The Execution Layer enables any Polygon chain to produce sequenced batches of transactions, aka blocks”. This is where the Polygon validators and nodes interact with one another in order to exchange messages, reach a consensus on a single chain of blocks to follow, and more.

Proving Layer

Finally, we have the proving layer, which consists of a single, common prover that generates the proofs for all transactions on every Polygon chain. Whether a developer wants to use the zkEVM, MidenVM, or construct their own state machine, Polygon 2.0 intends to support all three.

What’s Next

Over the following weeks, the Polygon team will be sharing further details about each of these layers with the community. You can follow them along on Twitter if you’re interested.

Froopyland: Dymension’s First Incentivized Testnet

https://twitter.com/dymension/status/1673309737977364481

Last week, the Dymension team published their first details about “Froopyland”, their first incentivized public testnet which is intended to launch soon.

Frooopyland Details

$DYM, which is Dymension’s own native token, will have a total supply of 1 billion. Throughout this Froopyland testnet, 1% of that (10M DYM) will be distributed to rollup deployers, validators, users, and the top 10 performing Dymension rollups, as follows:

  • Rollup Deployers (4M DYM): deploy a rollup, and win rewards proportional to that rollup’s uptime. You must hold the “RollApp fam” role on their Discord server to be able to launch a rollup during this testnet.

  • Validators (4M DYM): Those of you who help keep the network running by managing a Dymension Hub validator, will earn rewards “proportional to the uptime of the validator and the RollApp your team deploys”. Yeah, you’ll have to deploy a rollup.

  • Users (1M DYM): End-users like you and I can visit the Dymension portal, take a look at the different rollups launched on the Dymension Hub, and start interacting with these to earn DYM rewards. That said, this is exclusive for those with the “Rollapes” Discord roll.

  • Best 10 Rollups (1M DYM): The 10 best performing rollups, in terms of uptime and user activity I would assume, will earn from this reward pool. Of these top 10, the more active your rollup is, the more DYM you get.

35-C

As a reminder, today Dymension is running a non-incentivized testnet, 35-C, which launched back in February. 35-C introduced the genesis launch of the Dymension Hub (the ecosystem’s own settlement layer), along with two rollups, RollApp X, and EVM RollApp. Although as users we were able to interact and stake with these two rollapps, developers were not able to launch their own (permissioned rollup deployment). So, we’re excited to see the different rollapps developers launch on Froopyland.

Here are some of the numbers 35-C was able to achieve across the two rollapps:

What’s Next

Make sure to follow Dymension on Twitter to find out when Froopyland launches. Also, incase you haven’t noticed, it looks like it pays to join the team's Discord.

More News & Announcements

📚 Discourse & Education

Will rollups outsource ZK proving?

Hasu from Flashbots asks validity rollup teams how they think about internal vs. external prover networks. To be clear, he is not referring to whether or not a rollup prover network is permissioned vs. permissionless. A permissionless prover network would fall into Hasu’s “internal” category. An example of an external prover network would be a third-party marketplace, where neither the rollup core team nor community has to run any provers.

It’s likely that established rollups with large user bases will operate their own internal prover networks, both to keep control of early-stage ZK technology and for greater token utility / value capture. It’s of course possible that this changes as ZK technology and external proof markets mature and specialized vendors emerge.

To gain more familiarity with the emerging ZK proving space, we highly recommend this new post by Trace from Figment Capital.

Do optimistic sovereign rollups make sense?

Eric Wall claims that optimistic sovereign rollups make no sense since light nodes have to wait 7 days to reach finality.

While it’s true that in practice optimistic rollups have 7-day challenge periods, they are not technically required to do so. It’s worth understanding why this decision is so often made - to learn more about the 7-day justification we recommend this post by Kelvin from OP Labs.

The next thing to note is that the sensibility of optimistic sovereign rollups does not depend on the usefulness of their light nodes. For all rollups - sovereign, settled, optimistic or ZK - finality is reached when the transaction data finalizes on L1. This is because anyone can run a rollup full node and compute state transitions using the finalized input data. The real bottleneck for optimistic sovereign rollup finality is the data throughput of the underlying L1, which could be optimized down to minutes or even seconds.

There are also other approaches being considered, such as signaling fault across the p2p layer. This will be very interesting if it works for L2s and L1s alike, but it could be hard.

More Discourse & Education

That's all for this week! Thanks for reading 🧱🎬

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https://twitter.com/modularmedia_/status/1676238508946788352?s=20

]]> modularmedia-2@newsletter.paragraph.com (Modular Media) <![CDATA[How Permissionless Innovation Works]]> https://paragraph.com/@modularmedia-2/how-permissionless-innovation-works 8QB75njCKEXF8v5UmX2P Fri, 30 Jun 2023 17:53:02 GMT

This is a guest post by Shiva. Give him a follow and check out his other work!

The invention of the Internet revolutionized the speed and scope of information exchange, connecting the world like never before.

Acquiring new skills or knowledge is no longer limited by the physical boundaries of schools and libraries. Anyone with an internet connection, anywhere in the world can tap into a vast ocean of knowledge at the click of a button. And this has some amazing downstream implications.

The accessibility feeds into the curiosity of human minds. We try to search for newer and better ways of doing things.

Technological innovation improves economic efficiency, expands the range of goods and services available to the public, and generally lowers prices and raises quality in the process. It also expands the range of potential social and cultural opportunities. This raises living standards over the long term by promoting greater health and happiness.

This ability for anyone to experiment and build better things is called Permissionless Innovation.

When humans are free to innovate without seeking permission, it leads to more efficient technologies, superior products, and services, all at an ever-reducing cost to the consumer.

Toll tax on the Superhighway

But, the picture is not all that rosy.

The invention of the internet has also led to the development of global surveillance systems that have eroded our basic liberties over the years. Building an economy on the information superhighway saw a rise of centralized authorities that charge tolls to maintain this highway.

Instead of money, the toll is charged in the form of trust. We trust these authorities to protect our data, provide equitable network services to all users, and even define credibly neutral laws of cyberspace.

In most cases, this dynamic works just fine. We tend to believe the juice is worth the squeeze as the convenience of life and the pace of information exchange driven by the internet far outweigh the price we pay in the form of trust. We willingly give away our privacy for the sake of this convenience.

In more extreme scenarios, however, these ‘permissioned’ systems can take the form of punitive actions aimed against certain individuals or groups. Governments freezing accounts, social media companies banning presidents from using their platforms, etc. are all examples of such extreme scenarios.

From Chris Dixon's "Why decentralization matters"
From Chris Dixon's "Why decentralization matters"

At a minimum, these permissioned surveillance systems slow down the pace of innovation by defining zero-sum rules of cyberspace. At their worst, they can limit individual & societal freedom.

This is why we need blockchains.

The promise of blockchains is to provide a platform for ‘toll-free’ permissionless innovation. It is to allow for trustless cooperation on a global scale: to remove singular points of failure from socio-economic systems and instead distribute the trust amongst a diverse (geographically and otherwise) group of people while using crypto-economics to make it tough for them to collude.

“Just like the internet is the information super highway, I think of Blockchains as the cooperation super highway” - Sreeram Kannan

A credibly neutral network for permissionless innovation would be limitless in the scope of how people with diverse experiences & backgrounds can contribute to it. It would allow anyone to permissionlessly express their ideas in any manner they deem right, without being herded into socially acceptable norms.

“Blockchains don’t do many things well - they’re expensive, they’re inefficient.

But the one thing they do do well is they can return power and agency to individuals who have otherwise become wholly dependent on corporations for their dealings online.”

- Peter VanValkenburgh

Moving up the Permissionlessness Scale

So, how far have we come in developing completely permissionless blockchains?

Well, we are still laying the foundations! Rome wasn’t built in a day and permissionless-ness can’t be achieved overnight.

Instead, it’s an evolutionary process.

While biological evolution follows the ‘Survival of the Fittest’, Permissionless-ness follows ‘Modularity’. Breaking down the blockchain stack into individual components allows for an explosion of innovation at every layer of the stack.

Instead of requiring network participants to build a complete blockchain stack from scratch every time they want to build a “newer and better” use case, Modularity allows participants to focus on building the components that they have expertise in while outsourcing the development of the rest of the components.

And if you trace the development of blockchains from Bitcoin's genesis to the present day, one recurring theme stands out: Modularizing blockchains moves them up the permissionless scale - allowing for more innovation, more participants, and hence, more decentralization.

"Modularize and Decentralize"

Modularize and Decentralize, that's all it is
Modularize and Decentralize, that's all it is

Bitcoin: Permissionless Users

Bitcoin was invented in the aftermath of the 2008 financial crisis. Fed up by the incompetence of the traditional financial markets, Satoshi wanted to create a peer-to-peer version of electronic cash that would eradicate the need to trust a central party.

“What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.” - Bitcoin Whitepaper

Traditional Capital markets consist of 2 main layers:

  • The transacting parties: Sender and Receiver

  • A trusted third party (bank) to oversee the transaction

Users rely on this trusted third party to open their books and add a ledger entry that debits the send and credits the receiver.

Satoshi’s brilliance was to separate these 2 layers - and decentralize the trust layer. The concept is simple & genius - Instead of trusting one single party to facilitate the transaction, now anyone in the world can validate all the transactions taking place on this public ledger called Bitcoin.

Anyone can add an entry to the ledger transferring their bitcoin to someone else. And anyone - regardless of their nationality, race, religion, gender, sex, credit worthiness - can for absolutely no cost, create a Bitcoin address in order to receive payments digitally.

And this idea is revolutionary! Bitcoin is the world’s first practical implementation of globally accessible money. A public, permissionless digital payments system - available to all, and owned by no one.

source: 0 to 1 in Crypto: Grasping Blockchains, their Applications & future Impact
source: 0 to 1 in Crypto: Grasping Blockchains, their Applications & future Impact

In the years since the invention of Bitcoin, however, two challenges have become apparent:

1. Bitcoin is one app: permissionless money

Global cooperation can take many forms of expression: financial transactions, support for a football team, religion, memes, etc.

Bitcoin’s model limits users to express themselves through financial transactions. Don’t get me wrong - In absolutely no way does this imply what Bitcoin has brought to the world is anything less than a revolution. But it only allows one form of expression. Humans are so much more!

2. Bitcoin’s execution & consensus have to follow strict ‘permissioned’ rules

In fact, over the years, as the size of the network has grown, high hardware requirements to produce blocks and validate transactions have meant that Bitcoin has grown to be more and more centralized. There are 5 mining companies that handle ~80% of the Bitcoin block production.

Source: btc.com
Source: btc.com

Ethereum: Permissionless Users & dApps

If Bitcoin is decentralized money, Ethereum is the decentralized computer.

Ethereum continued to build on the Modularity theme and separated Bitcoin into two further layers - Trust and Innovation. It delivered a universal smart contract platform, on top of a layer of decentralized trust.

Why is this powerful?

This smart contract platform invites anyone and everyone to innovate on the Ethereum blockchain using smart contracts. From a DEX to a game to a university - any anonymous entity could build anything on top of Ethereum, and yet it would work because everything would be secured by an entire decentralized network of validators!

source: 0 to 1 in Crypto: Grasping Blockchains, their Applications & future Impact
source: 0 to 1 in Crypto: Grasping Blockchains, their Applications & future Impact

THIS is a paradigm shift! As Sreeram Kannan mentions, it’s a shift analogous to the inception of the Venture Capital industry:

  • With VCs, innovators could build on their ideas without needing to worry about bootstrapping capital.

  • With Ethereum, innovators can build on their ideas without needing to worry about developing trust.

Instead, Ethereum’s trust layer will take care of making sure that the rules are legit, the code makes sense, and the transactions are valid.

By separating innovation from Bitcoin’s trust layer, Ethereum moved up the permissionless scale, allowing anyone to innovate on its ‘trustless’ platform. And it didn’t stop there.

The Ethereum community ruthlessly follows the vision of permissionless innovation. Most recent upgrades and the upcoming features in the Ethereum Roadmap have been guided by the Northstar of pushing this vision forward. And they all follow the same theme -

‘Modularity Enables Permissionless Innovation’

1. PBS: Separating block production from block proposing

(a) The Merge

In the beginning, Ethereum used the same Proof-of-Work consensus mechanism as Bitcoin which required setting up mining infrastructure. However, it always planned to make a switch to Proof-of-Stake once the infra was ready and there were enough users who would be willing to stake their ETH to secure the network. The vision for PoS is to allow users to validate transactions using a simple phone/laptop with an internet connection.

But it’s not as simple as it might sound. Even in PoS, block building requires expertise and a higher level of infrastructure that we cannot expect every granny and dentist to have. That is why, a major (upcoming) aspect of the PoS implementation is enshrined Proposer-Builder Separation or PBS.

(b) Proposer-Builder Separation

PBS follows the theme of Modularity by separating the roles of block proposers and block builders. And it’s a fascinating concept - Block building is tough to decentralize, so instead, we decentralize the block-proposing part of it. Vitalik emphasizes this in Endgame.

Centralized builders will be able to create blocks as they wish, but they would only be included in the blockchain if the proposer attests to them. And what would it take for the proposer to attest to a block? A laptop and an internet connection.

Currently, most of the Ethereum validators use external PBS (operated by Flashbots) to produce blocks.Flashbots is a highly respected entity in the crypto sphere, but it is a third party. With enshrined PBS, the idea is to allow for this separation within the Ethereum protocol.

2. Rollup-Centric Roadmap: Permissionless Users, dApps, and Execution Environments

Aligned with the theme of modularity, Ethereum has also dedicated itself to a rollup-centric future. Let’s see what this means:

There are several components to a “transaction” on blockchains - Execution, Data Availability, Consensus, and Settlement. With the rollup-centric vision, Ethereum separates and offloads the execution layer to rollups to lower the congestion on the Ethereum network.

At a high level, this means that rollups execute transactions off-chain (away from Ethereum), and then post the transaction data and the proof of its correctness on Ethereum. In exchange, rollups get the same security guarantees as any other transaction on Ethereum.

This trade results in a win-win situation. Users get higher speeds and lower fees, and Ethereum gets to reduce congestion on the network.

The modularization of the execution layer has reduced the cost of innovation significantly. Developers don’t need to bootstrap an expensive trust network and stakeholders, and can simply build a rollup and tap into Ethereum’s security guarantees.

However, Ethereum base layer itself has remained a monolithic blockchain as it maintains the Consensus/Settlement Layer, the DA layer, and the Execution Layer inside its stack. If developers want to innovate using a different consensus mechanism than Ethereum’s PoS, or if they want to build a gaming dApp and want faster transactions than Ethereum’s 12-second block time, there is no way to do that!

Ethereum’s monolithic stack reaches its limitations here.

3. EigenLayer: Permissionless Users, dApps, Execution Environments, and Consensus

By default design, blockchains operate in their own siloes. If a dApp wants to access data from the outside world (say prices of assets, stocks, news, etc.), they need to rely on an entity called the ‘Oracle’. Or if they want to transfer assets to/from a separate blockchain, they need to rely on ‘Bridges’. Or if a dApp uses a high amount of data that requires faster processing speeds, it needs to be stored on off-chain data layers.

These services like oracles, bridges, and DA layers are often run by trusted third parties. These trusted parties can choose to decentralize the network (e.g., Chainlink) but they have to bootstrap a validator network from scratch, thus putting shackles on the innovation in this ‘Middleware’ layer.

Eigenlayer is a “restaking collective” that separates the consensus layer from the trust network and takes Ethereum further up the Permissionless Innovation scale. Anyone who is a validator for Ethereum, can ‘restake’ their ETH and opt into securing other “Actively Validated Services (AVS)”, which include these middleware solutions like bridges and oracles.

This allows the operators of these AVS to tap into Ethereum’s security network and removes the need for them to bootstrap a network from scratch. In turn, this reduces the cost of innovation and lowers the barrier to entry.

Want to build a Solana L1 fork? Simply launch your network on Eigenlayer and leverage security services of validators who are already running a node for Ethereum.

Modularism also shows up in other parts of the Ethereum stack:

1. Rollup Sequencers

Most rollups today have enshrined, centralized sequencers. Decentralized Sequencing is a design space being explored by teams like Espresso Systems and Astria. Centralized sequencer nodes are responsible for ordering rollup transactions in batches AND executing them.

Shared sequencers like Espresso abstract away the sequencing layer from rollups and allow anyone to participate in the transaction sequencing process. Since ordering transactions is a stateless process, it can be done quickly and efficiently without the need for any hardcore hardware.

2. Rollups-as-a-Service

Rollup SDKs and no-code RaaS services (like Eclipse, Sovereign Labs, etc.) take the modularism game to a whole another level by allowing anyone to build a rollup easily while choosing a different environment for each layer of the stack.

Celestia: The World’s First Modular Blockchain

No article on Modularism can be complete without the mention of Celestia, the network that popularized the idea of modular blockchains. Celestia aims to build a scalable DA layer that can be utilized by other modular blockchains to achieve high data processing speeds. A DA layer is only responsible for ordering transactions and guaranteeing their data availability.

Celestia’s Data Availability Sampling (DAS) primitive provides an efficient solution to the data availability problem by only requiring resource-limited light nodes to sample a small number of random chunks from each block to verify data availability.

Higher the number of light nodes that participate in sampling, higher the amount of data that the network can safely handle, enabling the block size to increase without equally increasing the cost to verify the chain.

Conclusion

Hopefully, it’s apparent how modularizing has almost been a pre-requisite to making blockchains permissionless. As we continue to modularize, we unlock new opportunities for cooperation and innovation that will shape the future of human interaction. And hopefully, this would empower individuals to participate in the global economy on their OWN terms.

]]> modularmedia-2@newsletter.paragraph.com (Modular Media) <![CDATA[Weekly Rollup #20]]> https://paragraph.com/@modularmedia-2/weekly-rollup-20 qs4OwmWnDhevOvUuQqrv Mon, 26 Jun 2023 23:08:00 GMT 👋 Welcome to Modular Media! We cover news, updates, educational content, and more within the modular blockchain ecosystem.

Subscribe to get posts sent directly to your email every week, and follow us on Twitter for modular-related updates!

This week’s issue covers:

  • Polygon proposes zkEVM validium

  • Introducing the Zora Network

  • BNB Smart Chain Launches opBNB

  • More News & Announcements

  • What are validiums?

  • Are validiums L2s?

  • Avail x Sovereign: The Future of Rollups

  • More Discourse & Education

Modular Cloud is reimagining developer tools and cloud services for the modular blockchain stack. Get in touch to learn more about Modular Cloud's product offering today, including the world's first block explorer for modular blockchains.

📣 News & Announcements

Polygon Proposes Transition from PoS to zkEVM-Validium

As we mentioned in last week’s newsletter, the Polygon Labs team recently announced the start of a new roadmap, Polygon 2.0, which is focused on creating the “value layer of the internet”. Over the course of four weeks, Polygon would be announcing further details as to what 2.0 is all about:

Well, right on schedule, this past week Polygon announced its plan for its PoS chain, the Polygon side chain where most of the network’s activity lives. Polygon will be transitioning its PoS network, into a zkEVM validium (assuming the proposal goes through).

As a reminder, a validium is similar to a rollup in that they’re both off-chain scaling soutions. However, rollups publish their transaction data on its underlying base layer (Ethereum in most cases), whereas a validium posts its transaction data on an external network, rather than the one it’s deployed on.

PoS side chain vs zkEVM validium

The upside of this PoS chain is the increased throughput it provides, however, this comes at the cost of security, considering it does not post state changes or transaction data on the L1 (Ethereum).

If the proposal passes and the PoS chain becomes a zkEVM validium, then the network will begin producing validity proofs and posting these proofs on Ethereum to be verified by the network’s validators. Rather than having the transaction data also be posted on Ethereum (which would make this a rollup), the data will live elsewhere. I have not heard a mention of where this data will live, but I would imagine either continuing with the Polygon validators, on Avail, or some sort of committee (similar to Starknet’s approach).

zkEVM validium vs zkEVM rollup

As you may already know, Polygon just launched its first zkEVM rollup a couple of months ago. The two networks are expected to live alongside one another, and it’ll be up to the developers to choose their preferred network to deploy on.

One of the main advantages of a validium over a rollup is lower fees. As you may already know, these off-chain scaling solutions (validiums & rollups), must publish their data on chain somewhere. Your traditional zkEVM rollup posts this data on Ethereum, and as you may know, posting this data accounts for most of the gas fees you pay when using the Ethereum network (this includes your favorite L2s like Arbitrum, Era, etc.). So, not having to post this data on Ethereum lowers fees for everyone.

However, as crypto has already taught us, nothing comes without a cost. The tradeoff a validium makes for these lower fees is lower security. Yes, technically proofs will be posted on Ethereum, but we’ll still be trusting a separate party to store our data, rather than trusting Ethereum validators.

I would imagine high-value defi applications launching on the zkEVM rollup because of the stronger security guarantees, however, I can see gaming or social apps launch on zkEVM validium for the increased scalability.

What’s next

Polygon pulling this off would be an incredible feat, as it’ll finally make Polygon’s most active chain, an actual L2.

According to the Polygon team, this transition can be comparable to Ethereum’s recent “merge”, meaning end-users will not even notice the change - it’ll all be done on the backend without even realizing it. This means that the network’s current users, liquidity, and dapps will have a seamless migration to a more secure chain.

We’re excited to hear about the rest of the Polygon 2.0 plan throughout the following weeks. To learn more about Polygon’s zk-validium, you can check out the original post, here.

Introducing the Zora Network: An OP Stack Rollup Dedicated to the Platform’s NFT Ecosystem

https://twitter.com/ourZORA/status/1671602234994622464

Last week, the Zora team announced the launch of the Zora network, the ecosystem’s own L2 rollup that was built using the OP Stack. Specifically, this rollup was built using Conduit, a rollup as a service solution that developers can leverage to launch their own custom dedicated OP Stack rollup “in one click” (we spoke about Conduit in one of our previous issues).

Zora is an NFT marketplace that was originally deployed on Ethereum, however, according to Zora founder, Ethereum’s low throughput, and high network fees have caused the team to expand Zora to its own execution environment. That being said, Zora will continue running on Ethereum, alongside the Zora network and any other chain Zora expands to in the near future, such as Optimism mainnet (which was already announced as happening).

“Zora offers a toolkit to have your artwork, songs, videos, podcasts, animations, or memes turned into NFT collections”. As a creator, you’ll be able to leverage these tools on your preferred network, whether on the Ethereum L1 or the Zora L2 network to take advantage of the lower gas fees.

To celebrate the launch of Zora network, the team launched a commemorative NFT that anyone can mint over the next 11 days. Sounds like Zora will have its own token in the future, so minting this NFT may or may not help with getting on that airdrop list. To do so, simply:

Congrats to the Zora team for their launch!

Introducing opBNB

https://twitter.com/BNBCHAIN/status/1670783527485419521

Last Monday, the Build n’ Build (BNB) team introduced opBNB, an L2 rollup built with the OP Stack.

This new L2 will serve as a new execution environment for the BNB Smart Chain.

As you may already know, rollups are off-chain scaling solutions. Similar to how OP mainnet and Arbitrum are rollups deployed on top of Ethereum, opBNB will live on top of BSC. So, end-users will interact with the opBNB network, and the corresponding transaction data will be sent to the underlying mainnet (the BNB L1). Fraud proofs, which will be used to secure opBNB, will also settle on the L1.

Considering opBNB is EVM compatible, developers will be able to port their existing applications from the BNB L1 chain, or from any other EVM network, to this new L2 with relative ease.

opBNB vs OP mainnet & BNB

According to the team, the upside of launching on opBNB as opposed to launching on OP mainet is the increased performance features. “The optimisation of data accessibility, the caching layer and adjusting the submission process algorithm to allow simultaneous operations“ help enable opBNB to “support over 4000 transfer transactions per second and an average transaction cost lower than 0.005 USD”.

What’s Next

Personally, I was never too involved with the Binance ecosystem, however, we are definitely looking forward to seeing the growth of this BNB ecosystem across its new L2. Its especially exciting to see the second biggest smart contract network (after Ethereum) also follow in the rollup vision.

opBNB officially launched its testnet on the 19th. You can read the official post to learn more about this launch, and if you’re a developer, feel free to start deploying your contracts on the new L2.

More News & Announcements

  • Catalyst launches testnet: Now, anyone is able to try out the cross-chain liquidity network for themselves, and get a first hand look at the slick UI the platform has to offer.

  • L2Beat [introduces Stages, “a maturity ranking for L2 projects”. This is based on Vitalik’s previous rollup “training wheels” post and is meant to allow users to see where in the decentralization stage (Stage 0,1, or 2) each L2 is.

  • “ArgusLabs and Celestia proudly present the Modular Hacker House in Paris for ambitious individuals interested in hacking on pressing challenges within the modular ecosystem”.

  • Radius raises $1.7M in a pre-seed round led by Hashed. The capital will be used to continue the development of its shared sequencing network, as they approach its Q1 2024 mainnet launch.

  • Omni Network (Ethereum interoperability protocol) launches its “Origin” testnet. Check out the linked thread to learn how can earn free testnet funds and start interacting with the Origins testnet.

  • Secret Network is now supported on the Babylon testnet: “This integration enhances Secret Network's security, utilizing Bitcoin's timestamping to safeguard transactions on the platform”. Babylon also integrates Persistence, a Cosmos-based liquid staking hub, into its tesnet.

  • Eclipse helps enable the first Solana <> EVM Hyperlane message on testnet. Soon, any Hyperlane-connected chain will be able to communicate with Solana.

  • zkHoldem will be launching its fully on-chain zk-enabled poker game as its own Caldera chain (app-specific rollup).

  • There is a new proposal to bring Rocket Pool to Polygon zkEVM

  • Continuing on Aztec Network’s decentralization roadmap, the team is now looking for community members to give their thoughts on how the network should approach future protocol upgrades.

  • Introducing Syndr chain, an app-specific Arbitrum L3 built to host its options & futures DEX. Syndr was built using Caldera’s RaaS solution. You can check out the linked thread to learn more about what Syndr is, what it offers, and how you can become an early beta tester.

  • New proposal is up for the Duality exchange to adopt Cosmos Hub interchain security (ICS) thereby becoming the third consumer chain.

  • “Starting on Jun 22, 2023, Bybit will support Mantle in facilitating the conversion of BIT to MNT tokens”.

  • There was a couple of Fuel (L2 rollup) updates this past week, including:

    1. The Fuel team announces Sway Summer, an online hackathon with $100K in prizes

    2. Fuel announces the next round of its grants program: “The next cohort of 10 projects will receive up to $50K each in funding for a 3-month opportunity to bring their ideas to life”

    3. Thunder launches the open beta of its Fuel NFT platform.

    4. The Fuel Wallet beta is now available for download on the chrome store

  • Arbitrum network updates from this past week include:

    1. Offchain Labs (Arbitrum) just published a quickstart guide and tools to help devs launch their own Arbitrum Orbit devnet chain (an L3 that settles on Arbitrum Goerli). Testnet & mainnet guides are next - will we see a lot more Arbitrum L3s this year?

    2. Stella deploys on Arbitrum, bringing its “pay as you earn” model to the network

    3. Venly, a web3 wallet provider, integrates the Arbitrum network

    4. Aura is live on Arbitrum, bringing its defi yield & governance boosting protocol to the network. It looks like a handful of recognizable defi protocols will be integrated within the Aura platform, including Balancer, Timeswap, Beefy Finance, and more.

  • Take a look at the new features Morphine Finance will be adding in the near future, including placing SL and TP orders on our defi positions, and the ability to leverage our defi positions. While v1 provided us access to info, v2 is about building the set of tools to work with this gathered data.

  • Two new dapps coming to Starknet:

    1. “Rules”, a new trading card game, is coming to Starknet on the 23rd.

    2. Pyramid, a new NFT marketplace

  • Introducing Bonsaiswap, a DEX that is exclusively native to Polygon zkEVM

  • zkSync becomes the 14th chain integrated within the KyberSwap

  • zkSync shares a first draft of a ZK-Credo, ****************“a declaration of the foundational principles for the emerging ZK-powered Internet of Value”. The Credo addresses principles (such as security, privacy, and more), as well as community ethos, or, “the understanding of a shared moral duty for collective action against oppression.” This is not intended to be exclusive to zkSync, so whether you’re a team or individual user, feel free to share your thoughts.

  • The Scroll team held an ETHPrague “hackathon recap call” about an hour-long video of the winning teams presenting their project to the community.

  • Optimism-related news from this past week includes:

    1. “The chain formerly known as Optimism is now OP Mainnet”

    2. The Optimism team announced Round 3 of its Public Goods Funding initiative, which includes 30M OP in funding across ecosystem builders and creators. This week’s OP Radio session featured a discussion about this Retro PGF Round 3.

    3. Velodrome releases v2 of its liquidity hub

    4. AirGap, a smartphone cold wallet solution, integrates OP mainnet

  • Avail (DA solution) gets a new brand look

📚 Discourse & Education

What are validiums?

As mentioned above, Polygon Labs is transitioning PoS chain into a validium. If you are familiar with rollups, you can consider validiums their close cousins. Ethereum.org has a good description of validiums, but the TLDR is: basically rollups, except transaction data is not posted on L1.

What are the implications of not posting transaction data on L1?

Ethereum.org explains this well:

“However, validium users can have their funds frozen and withdrawals restricted. This can happen if data availability managers on the validium chain withhold off-chain state data from users. Without access to transaction data, users cannot compute the Merkle proof required to prove ownership of funds and execute withdrawals.”

It is probably obvious why the above scenarios are bad. While validiums maintain the guaranteed correctness property of their cousin rollups (L1 and participants reading L1 cannot be fooled!), they do not maintain the same data availability assurances. Put another way, they offer the same safety guarantees as rollups, but not the same liveness guarantees. If there’s one entity responsible for data availability and they misbehave, the system is effectively stalled.

How can validium risks be mitigated?

Again, the main challenge for validiums is data availability. The good thing is there are many DA options, and projects can pick whatever best fits their needs. We used the example of “one entity responsible for DA”, but realistically most projects will pick a more decentralized solution.

Here are examples of slightly more decentralized DA options:

  • StarkWare DA committee. “StarkEx’s default Data Availability Committee members are ConsenSys, Infura, Nethermind, Cephalopod, Iqlusion, and StarkWare. Committee members can be easily removed or added, depending on the dApp’s choice.”

  • Arbitrum AnyTrust DA committee. “The Committee has N members, of which AnyTrust assumes at least two are honest. This means that if N-1 Committee members promise to provide access to some data, at least one of the promising parties must be honest, ensuring that the data will be available so that the rollup protocol can function correctly.”

Here are examples of (once live) much more decentralized DA options:

  • EigenDA

  • Celestia

  • Avail

Validiums will remain an interesting option, since historically developers have always pushed the boundaries of what’s possible (in this case, with throughput), but we expect them to be especially compelling for the near-medium term while Ethereum DA remains expensive. This is precisely the case with the Polygon’s validium - it would ideally be a rollup.

Ok, finally tying this back to the Polygon announcement. Here are a few of our favorite threads about validiums and how Polygon is using them:

Are validiums L2s?

Not again
Not again

Surprise! More on rollup definitions.

Eric Wall states that “validiums are not L2s”, clearly reacting to Polygon’s announcement. This sparked a bunch of discussion, so let’s speedrun through key takes:

You’ve probably noticed the above is more aligned with Ethereum-land perspectives. There are certainly other interesting angles to consider though! This dialogue between Toghrul from Scroll and Jon from DBA does a good job illustrates an opposing view. This branch is also worth reading.

What do you think? Dare to enter the battlefield, anon? Kidding we have fun on CT.

Avail x Sovereign: The Future of Rollups

We hosted our first Twitter Spaces last week 😆

Preston from Sovereign and Prabal from Avail joined us for a discussion about rollups. We covered topics including:

  • Avail / Sovereign collaboration

  • Data availability design space

  • Based sequencing and ideal use cases

  • Future user experience for sovereign rollups

We had fun and plan to do more of these. If you have ideas for projects or topics to cover, please shoot us a note!

More News & Education

That's all for this week! Thanks for reading 🧱🎬

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]]> modularmedia-2@newsletter.paragraph.com (Modular Media) <![CDATA[Weekly Rollup #19]]> https://paragraph.com/@modularmedia-2/weekly-rollup-19 54jJJzXyhaxn7r3McVPN Tue, 20 Jun 2023 16:49:41 GMT 👋 Welcome to Modular Media! We cover news, updates, educational content, and more within the modular blockchain ecosystem.

Subscribe to get posts sent directly to your email every week, and follow us on Twitter for modular-related updates!

This week’s issue covers:

  • Uniswap Announces V4

  • EigenLayer Initiates Testnet

  • Polygon 2.0

  • The Cosmos Rundown

  • More News & Announcements

  • More on Polygon 2.0

  • Cosmos vs. Ethereum social alignment

  • More Discourse & Education

Modular Cloud is reimagining developer tools and cloud services for the modular blockchain stack. Get in touch to learn more about Modular Cloud's product offering today, including the world's first block explorer for modular blockchains.

📣 News & Announcements

Uniswap Announces V4

https://twitter.com/Uniswap/status/1668603580184502276

On June 12th, the Uniswap Labs team announced the upcoming launch of Uniswap v4, introducing a new, modular approach to the Uniswap application.

Why v4?

According to Hayden Adams, Uniswap founder, a lot of teams were launching new Uniswap forks with updated parameters, such as a new fee model. So, v4 introduces a way for developers to continue launching new innovations in the AMM space (as “hooks”) within Uniswap itself, rather than deploying a completely new AMM with minimal changes.

What’s new with v4?

V4’s flagship feature is “hooks”.

Hooks are modules, or customizations, that any user can build or implement when deploying a new pool on Uniswap. Specifically, hooks are code that runs at certain points of the lifecycle of a transaction. These hooks can be added before a swap, after a swap, at the moment you create a new pool, remove liquidity, etc. For example, “run this code (hook) that checks for an oracle price feed before executing a swap”.

So, similarly to how existing solutions such as Eclipse or Caldera allow developers to deploy custom rollups by allowing them to mix & match different modules (choose your settlement, your DA, gas token, etc.), Uniswap v4 will enable anyone to create custom pools by allowing them to select whatever modules (hooks) they’d like to use. In other words, you can use hooks to modify parameters within a pool.

  • Dynamic fee hook

  • Limit Order hook

  • Time-weighted average market maker (TWAM)

  • use out-of-range LP deposits to accrue extra yield through lending protocols

Another added feature to Uni v4 was the addition of the Singleton contract. With previous versions of Uniswap, every time someone deployed a new pool, a separate contract would also deploy. So if I wanted to create a new USDC<>ETH pool, I would have to spin out a new contract, even though this contract was basically the same as any other Uniswap pool contract (just different tokens involved mostly). In other words, the same code gets duplicated across all pool smart contracts. Now, rather than each newly created pool being its own smart contract, pools now live within the singleton contract. This reduces the cost of deploying a new pool by about 99%.

Overall, for end-users the main advantage with v4 will be an even greater decrease in gas fees, while developers benefit from an increased developer experience that allows for an increased rate of AMM innovation.

What’s Next

According to Hayden Adams, Uniswap founder, users can (probably) expect to start using v4 sometime after the next Ethereum upgrade, Cancun. However, developers can start experimenting with v4 today - of course, keep in mind that the new contracts have not been audited yet, so use with caution!

You can read the team's official blog post to dive deeper into this latest Uniswap version launch.

EigenLayer Initiates Testnet

https://twitter.com/eigenlayer/status/1669065156427681792

This past week, EigenLayer launched “Stage 1” of its mainnet rollout.

Altogether, the protocol’s mainnet rollout is expected to happen in three stages:

  • Stage 1: onboarding restakers

  • Stage 2: onboard operators who perform validation tasks for AVSs built on Eigen

  • Stage 3: several AVSs will launch on Eigen

During this stage 1 phase, three liquid-staked ETH tokens were able to be deposited into the EigenLayer’s restaking protocol:

  • Lido’s stETH: this pool’s max cap was reached within the first hour!

  • Rocket Pool’s rETH

  • Coinbase wrapped staked ETH (cbETH)

That being said, the 3.2K max cap per asset was reached within just the first day, meaning the protocol is closed off for now, until the cap increases.

This just goes to show how excited the Ethereum community is for EigenLayer. As a developer, you get to leverage $ETH security for your own application/chain, while ETH restakers will get to benefit from increased token rewards from the different applications their ETH will be securing.

For anyone interested in keeping up with EigenLayer stats, both the Parsec Finance, and Nethermind teams have each built a dashboard that keeps track of metrics like total deposited staked ETH per each asset, token withdrawals, and more. Of course, there is not much to keep up with as of now, considering the 3.2K cap.

Polygon 2.0

https://twitter.com/0xPolygonLabs/status/1668312616459030528

This past week, Polygon Labs introduced Polygon 2.0, which lays the blueprint for how Polygon aims to become the “value layer of the internet”.

TLDR: this was an announcement about the upcoming announcement of what Polygon 2.0 will entail.

What is Polygon 2.0

According to the team, “Polygon 2.0 is the blueprint to building the value layer of the internet (something Ethereum set to accomplish) - it is a set of proposed upgrades that radically reimagine every aspect of Polygon, from protocol architecture, to tokenomics & governance”.

Specifically, 2.0 is “a network of zk-rollups unified via a novel cross-chain coordination protocol“. The vision is for Polygon to be able to host an unlimited number of chains, without sacrificing liquidity, efficiency, and the overall user experience (feel as though you’re using a single chain).

Wen Details?

Over the following weeks, the Polygon Labs team will be publishing blog posts, AMAs, and more in order to explain the details behind 2.0. Changes we can expect to see include:

  • Polygon PoS

  • Utility and evolution of MATIC

  • Transition to community governance of the protocol and treasury

In fact, here is a rough schedule as to when we can expect more information:

What’s Next

About two years ago now, Polygon announced their $1B investment into zk-technology. This has culminated into the addition of four different zk-rollups across the Polygon ecosystem (expanding beyond the single PoS chain it started as), including Polygon zkEVM (prev. Hermez), Polygon Zero, Polygon Miden, and Polygon Nightfall.

That being said, this has led to some questions and concerns for the Polygon community, such as, how will MATIC be used across all Polygon solutions, and wouldn’t having five distinct networks under a single ecosystem hurt liquidity, efficiency, and the overall user experience? It seems like 2.0 will look to address these concerns and lay the blueprint for how Polygon is looking to unify all of these networks.

You can read Polygon’s official blog post here. For anyone interested, the team held its first community AMA (“Why Polygon 2.0”) regarding 2.0 a couple of days ago - you can check that out here. We look forward to learning more about the 2.0 specifics over the coming weeks. & don’t worry, we’ll make sure to highlight everything for you through our newsletter ;)

The Cosmos Rundown

There were quite a few governance proposal updates for the Cosmos Hub community this past week.

  • **Prop #797 passed,** which voted to increase the Cosmos Hub validator set from 175 to 180.

  • Of course, the big one was proposal #799, which votes for the transition of the Stride network to adopt interchain security (ICS), thereby becoming the second chain to join the Cosmos Hub Economic Zone.

  • There is also a second proposal related to Stride’s adoption of ICS, prop #800, which votes to “provide 450K ATOM to the stATOM/ATOM liquidity pool on Neutron (also achieved social consensus).

  • & lastly, **the voting period is now open for proposal #801:** “Gravity Dex Liquidity Module Removal”. “This is a signaling proposal to remove the unused Gravity Dex Liquidity Module from the Cosmos Hub and to return the funds contained therein to the rightful owners”.

Let’s quickly look at some of the details for Stride’s adoption of interchain security (ICS).

Stride to adopt ICS

As a reminder, Cosmos is an ecosystem of appchains, or sovereign L1 networks, the first of which to launch was the Cosmos Hub. One of the ways in which the Cosmos community is looking to grow the Hub is through replicated security. In other words, allowing other blockchains to start leveraging the Cosmos Hub validator set, along with the staked $ATOM, in order to secure their own network.

Replicated security involves two parties:

  • the provider chain (Cosmos Hub): the hub provides its 175 (will be 180 now following prop 797) Cosmos Hub validators, along with the (roughly) 190M $ATOM staked on the hub, to other appchains

  • the consumer chain (Stride in this case): the appchain adopting replicated security from the provider chain

With ICS, appchain deployment can be done far more quickly, as you wouldn’t have to worry about bootstrapping your own security at all. Rather, you’ll borrow the validators set and all that staked ATOM from the Hub for your own network. You can check out one of our previous issues, here, to learn more about how ICS works.

What makes this ICS adoption more special, is the fact that it will be the first time we see an existing chain transition to a new validator set. Neutron, on the other hand, was a new chain altogether, meaning it adopted ICS from day 1, whereas Stride had already been live and running for quite some time now with its own existing set. Once the transition happens on the 19th, the existing Stride validator set will transition to solely the role of governance.

To pay for this Hub security, Stride will share 15% of its staking reward with Cosmos Hub.

As mentioned earlier, if the proposal passes (which is expected to happen), then the transition will occur on July 19th. We’re excited to see the biggest liquid staking solution on Cosmos transition to Hub security.

More News & Announcements

📚 Discourse & Education

More on Polygon 2.0

In their Polygon 2.0 announcement, Polygon Labs uses terms like “value layer” and “unlimited scalability”. What do they actually mean? The Polygon team hasn’t shared much about their concrete plans, but some common questions have been answered.

What is meant by “value layer”? Is Polygon competing with Ethereum now?

In this Twitter Space, Brendan Farmer offers clarity (~minute 13:50). He emphasizes that Polygon is the “execution layer for Ethereum”, which he equates to the value layer of the internet.

What is meant by “unlimited scalability”? What is the claim based in?

Brendan also explains this (~minute 43:40). Polygon Labs believes ZK uniquely enables unlimited scalability when compared to other multi-chain approaches seen in Cosmos, Polkadot, Optimism, etc. They see clear limitations with other trust models (committees of validators, fraud proofs) when scaled to many chains. This is in contrast to ZK-based systems, where “no matter how much we scale blockspace, it’s cryptographically impossible to introduce an invalid transaction”.

That’s all for now, but stay tuned 👀

In the meantime here are a couple of third party takes:

https://twitter.com/0xanimated/status/1668728738761121793?s=20

https://twitter.com/100y_eth/status/1668417294400376832?s=20

Cosmos vs. Ethereum social alignment

https://twitter.com/larry0x/status/1668041292985647106?s=20

Larry from Delphi Digital poses a social question. Why does the Cosmos ecosystem have so much drama? Is this rooted in architectural decisions or something else?

Jon Charb contrasts Cosmos and Ethereum + rollup ecosystems. Rollups are chains, just like Cosmos chains, but have much less drama. Why? This is most likely due to the central point of focus and rallying cry - Ethereum as a base layer.@

In crypto we focus a lot on technology, but it’s important to always remember that blockchains are social coordination tools. Layer 0 is social consensus, and what’s interesting is that modular architectures have so far created more unified social consensus across technical layers of the stack - vertically but even horizontally among competitors.

More Discourse & Education

That's all for this week! Thanks for reading 🧱🎬

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]]> modularmedia-2@newsletter.paragraph.com (Modular Media) <![CDATA[Weekly Rollup #18]]> https://paragraph.com/@modularmedia-2/weekly-rollup-18 rCr3MUcLGDjq4Fqyza3S Tue, 13 Jun 2023 17:07:01 GMT 👋 Welcome to Modular Media! We cover news, updates, educational content, and more within the modular blockchain ecosystem.

Subscribe to get posts sent directly to your email every week, and follow us on Twitter for modular-related updates!

This week’s issue covers:

  • Optimism Upgrades to Bedrock

  • Caldera Launches Taro, an OP Stack Rollup Utilizing Celestia DA

  • Avail Launches Kate Testnet

  • More News & Announcements

  • Best design for 1 billion TPS?

  • More Discourse & Education

📣 News & Announcements

Optimism Upgrades to Bedrock

After months of development, Bedrock officially went live on OP mainnet on June 8th, in what was the first protocol upgrade voted on by the Collective’s governance process. This Bedrock upgrade introduced new features to the Optimism ecosystem, and also sets the foundation for the Superchain (a mesh of aligned L2s).

What is Bedrock

“Bedrock is the name of the first ever official release of the OP Stack, which is a set of free and open-source modular components that work together to power Optimism”. In other words, Bedrock represents Optimsim’s push toward a modular future.

To help elaborate, the OP Stack can be thought of as the actual code that is used to build these blockchain networks. This OP Stack was initially separated into three different layers: execution, settlement, and consensus, however, as mentioned last week, Celestia just added a “Data Availability (DA) interface for the OP Stack, adding an extra layer of customizability.

Because the OP Stack is separated into different layers, developers can mix & match different modules within each of these layers to ultimately build their own dedicated rollup, customized to the needs of your own specific solution. Also, developers are able to switch out their modules as new innovations arise. For example, Optimism will be able to switch from using fraud proofs to zk-proofs in the future when they’re ready.

Bedrock represents a complete rewrite of Optimism’s architecture into this new modular approach. In other words, Bedrock is a standalone implementation of the OP Stack, meaning that Optimism’s architecture is now separated into these different layers that make up the OP Stack.

Bedrock sets the foundation for the Optimism Superchain, which will be a mesh network of L2s. Developers will be able to leverage the OP Stack for a seamless deployment along this Superchain.

How will Optimism accrue value if each team operates its own independent network?

The Optimism sequencer.

Teams will be able to opt-in to using Optimism own in-house sequencer, which will allow the Optimism Foundation to earn extra MEV revenue. This revenue will go towards the Optimism Grant Rounds, which will then fund the development of more rollups, thus potentially increasing revenue even more and continuing this cycle.

What did Bedrock introduce

Some improvements that Bedrock introduced include:

  • a reduction in fees thanks to new “batching & compression” techniques: Optimism transactions get bundled into “sequencer batches”, sequencer batches get grouped into “channels”, which are then submitted to Ethereum as “channel frames” (independent chunks of this channel data). Since the order of these frames has already been established, they can be submitted to Ethereum in parallel, ultimately increasing the efficiency.

  • Bedrock will implement EIP-1559: “A transaction pricing mechanism that includes fixed-per-block network fee that is burned and dynamically expands/contracts block sizes to deal with transient congestion”. This is how $ETH issuance has gone negative during times of increased user activity.

  • Lowered deposit time: It now takes about 2.5 minutes to deposit funds into Optimism, rather than the 10 minutes it would take before.

  • increased security: “the Bedrock release introduces a 2-phase withdrawal process, doubling down on bridge security, which proved to be a primary risk factor for chains in 2022”.

What’s Next

Congrats to the entire Optimism Collective for this amazing achievement. We look forward to watching the growth of the Superchain over the coming year. To learn more about Bedrock you can check out the official docs.

Caldera Launches Taro, an OP Stack Rollup Utilizing Celestia DA

In last week’s newsletter, we mentioned Celestia’s launch of a new interface for the OP Stack that’ll allow developers to start building their own OP Stack rollups that utilize a separate DA solution instead of posting to Ethereum. This past week, Caldera officially launched Taro, “the first live blockchain to make use of Celestia's newly released modular DA interface for the OP Stack”.

Specifically, the components of Taro can be broken down as follows:

  • Execution: Taro (OP Stack rollup). This is where us end-users interact.

  • DA: Celestia (Arabica testnet). This is where the data behind our rollup transactions are posted.

  • Settlement: Ethereum (Goerli testnet). This is where disputes are settled. If there is a faulty block, you use the data on Celestia to submit a proof.

Why would a rollup want to use Celestia over Ethereum?

As some of you may already know, rollups are an off-chain scaling solution that takes a bunch of user transactions, bundle them together into a single block, and posts the end state on the L1. For anyone (you, me, or anyone else) to check that the transactions are being processed correctly, rollups are required to post data on-chain and make that data available for anyone to gather. This data verifies a given block.

Before Celestia built this DA interface, OP Stack rollups could only post this data on Ethereum. There were two issues with this:

  • high gas cost: The gas fees we pay on the Ethereum L2s mainly consists of data costs (the cost to post the data on the L1 - Ethereum). In fact, Optimism has paid over $20M in fees for posting data to Ethereum so far.

  • low throughput: “Even if used completely for data availability, Ethereum calldata can only support a few hundred transactions per second”. Every 13 seconds, one block is posted on Ethereum. Each block consumes around 15M in gas, with a typical transaction consuming around 3200 gas. If we deduce this to the second, then we get to around 360 transactions per second.

So as we can see, the advantage of posting data to Celestia as opposed to Ethereum is lower operational costs for teams, while the end-users get to benefit from even lower fees. Also, we don’t have to worry about random gas spikes during times of increased congestion on Ethereum (a lot of apps & rollups bid to post on Ethereum).

How to get started on Taro (include a short guide)

(1) Head to the Taro Hub page

(2) Click on the “add chain to Metamask” button (you can also add the chain manually if you prefer)

(3) Next, click on “request faucet funds on Taro rollup” (simply enter your wallet address after clicking, and you should receive $GETH within a couple of seconds)

(4) Once you receive the testnet funds, there are two options for you to choose from. You can either create a post on the GM portal, or mint a generative NFT.

(5) Once you submit a transaction, you can view it for yourself on the Taro Block Explorer. So far, the testnet has seen close to 88K transactions, from across nearly 28K wallet addresses:

What’s Next

Caldera is a rollup-as-a-service (RaaS) solution that developers can use to build and deploy their own custom OP Stack rollup “in one click”. Following Celestia’s launch of the DA interface for the OP Stack, Caldera added Celestia DA as a feature of Caldera chains, now allowing developers to use Caldera to deploy their own custom OP Stack x Celestia rollup in a single click. You can reach out to the team if you’re interested.

For developers interested in experimenting, you can start deploying your own smart contracts on top of Taro today.

Avail Launches Kate Testnet

On June 7th, Avail announced the launch of their “Kate” testnet (Phase 2), bringing the data availability (DA) solution one step closer to mainnet launch. According to the team, “our objectives for Phase 2 include exhaustive testing, iterative system enhancements, and the continued expansion of our validator network”.

Phase 1, which was first deployed in June 2022, marked the initial testnet launch of the Avail network. This initial testnet was deployed with a select group of internal validators (had to make sure everything was running smoothly before opening up the network to external actors), whereas phase 2 (Kate) will expand the validator set to include external members.

Specifically, phase 2 plans to onboard 200 more external validators. For anyone interested, you can indicate your interest in becoming a validator by filling out the “validator interest form”.

Here are some of the new enhancements in Kate:

  • Complete migration from Polygon (Avail is now officially its own independent solution)

  • increased performance boost for light clients

  • seamless upgrades for validators moving forward

  • a discord faucet for testnet tokens (for participating validators to use for onboarding)

  • revamped docs (help with onboarding for validators)

You can learn all about the technical details through Avail’s official blog post.

What is Avail

Avail is a data availability solution (similar to Celestia or Eigen DA). Avail was initially another branch of the Polygon team, however, just a couple of months ago spun out to become its own independent entity.

Data availability solutions take in transaction data from other chains, store that data, and make it available for anyone to retrieve. Teams can trust that their data is being held by Avail thanks to the use of light clients.

As you may already know, most blockchain networks have their own validators that run full nodes in order to keep the network running 24/7. That said, not everyone is able to afford the luxury of running their own full-node. For one, it costs money to buy the hardware, and second, it’s tough to keep your node running 24/7 so that you don't risk losing your validator stake. This is where light clients come in.

Light clients are able to check that the data is being appropriately held, without having to run a full node and download the entire block. Instead, light clients simply download a single chunk, or a portion, of the block and together create the entire block. Best of all, you can run a light node on almost any device, from your tablet to your smartphone. The more people running light nodes, the more people there are to download these chunks of data, meaning the more blocks can scale.

You can follow Avail on Twitter to keep track of the team’s journey to mainnet.

More News & Announcements

  • Electron Labs launches its permissionless zk-bridge in closed beta on Near & Ethereum. As of now, the bridge is only accessible for “Tinkerers NFT” holders. The birdge is expected to go live for the public on June 12th.

  • Argus, a web3 game developer and publishing platform, announced a $10M seed round, which included investors such as Haun Ventures, Alchemy Platform, Balaji, and more. Argus will sue the funds to continue development of “World Engine”, a sharded rollup SDK built for on-chain games. Teams are able to start applying to become private beta testers for World Engine.

  • Base, Coinbase’s L2 rollup launched on Optimism’s Superchain, recently made some scalability improvements after witnessing increased gas fees due to data costs (most gas is spent paying for data publication on the L1, Ethereum). You can learn about the two new changes they made here.

  • On June 7th, Arbitrum experienced some issues on its sequencer that caused batches not to be posted on the L1 (Ethereum). In short, “When the Sequencer tried to post a batch on-chain, the bug hit, and the transaction reverted”. Arbitrum’s sequencer wallet only receives funds (to use for gas when posting batches to the L1) only if it posts bacthes successfully. Because the bug caused an issue, the sequencer wallet was not able to be replenished, adding more delay to L1 batch posting. You can learn more about what happened here.

  • @anuragarjun, Avail founder, shared the latest product updates for Avail’s DA solution during a Twitter Space.

  • Native USDC is now officially available on the Arbitrum network. You can read last week’s newsletter to learn all about this integration.

  • Check out the latest look at Celestia’s growing ecosystem, involving Rollup framework solutions, RaaS, gaming, defi, & more.

  • Catalyst publishes its “Unit of Liquidity” whitepaper. “In this, we describe how Catalyst further generalises both the Uniswap and Balancer AMM equation”. Here’s a summary of the paper a community member made using ChatGPT.

  • zkSynth announces that it will be bringing its synthetic asset solution to Scroll (L2 network), now expanding beyond just zkSync. Today, zkSynth has 100+ synthetic assets, including stocks, commodities, and forex on its platform, allowing users to leverage these for a number of products, including perps, atomic lending, synthetic vaults, and more.

  • Here’s the latest bi-weekly update for Polygon zkEVM. TVL is up over 200%, and the team is now focused on bringing different defi ecosystems to the network.

📚 Discourse & Education

Best design for 1 billion TPS?

Viktor Bunin from Coinbase Cloud and Credibly Neutral presents an interesting framing for scaleable blockchain systems. If you assume crypto reaches 1 billion TPS over time, how would you design the system? Viktor argues that in this future it does not make sense to optimize for L1 throughput.

Many members of the Solana community had opinions, as Solana is of course a blockchain that heavily optimizes for L1 throughput. Here are some of their responses:

Let’s address them:

More Discourse & Education

That's all for this week! Thanks for reading 🧱🎬

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]]> modularmedia-2@newsletter.paragraph.com (Modular Media) <![CDATA[Weekly Rollup #17]]> https://paragraph.com/@modularmedia-2/weekly-rollup-17 Dw68f9ozN6ZoXxUHpCU1 Tue, 06 Jun 2023 18:34:30 GMT 👋 Welcome to Modular Media! We cover news, updates, educational content, and more within the modular blockchain ecosystem.

Subscribe to get posts sent directly to your email every week, and follow us on Twitter for modular-related updates!

This week’s issue covers:

  • Native USDC Expands to Arbitrum

  • Celestia Releases DA Interface for the OP Stack

  • Introducing Kinto

  • More News & Announcements

  • Will OP Superchain have network effects?

  • More Discourse & Education

📣 News & Announcements

Native USDC expands to Arbitrum

https://arbitrumfoundation.medium.com/usdc-to-come-natively-to-arbitrum-f751a30e3d83

This past week, Arbitrum announced that native USDC will be coming to the L2 network on June 8th.

Why the need for native USDC?

As many of you already know, stablecoins are one of the most widely adopted assets in web3. If we look at Circle (USDC) alone, we can see that the token can be found across several chains.

Having a few stablecoins deploy across multiple chains is better than having each chain launch its own stablecoin. We’ve seen plenty of stablecoins fail already (shoutout Terra), so it’s important we have a few stables we can rely on to always be liquid, secure, and redeemable for $1 worth (in this case) of value.

That said, one of the issues with having a single token launch across multiple chains is the token fragmentation. In other words, the USDC that is minted natively on Ethereum, is different than the USDC that is bridged to Polygon, Solana, etc.

This leads to some UX issues:

Having multiple types of the same token can lead to some confusion for users, especially for new web3 entrants. “Which USDC should I swap for, aUSDC, fUSDC, or which one?”. Just take a look for yourself:

Another problem is that each one of these different USDC tokens will have its own volume and liquidity, separate from that of native USDC. This is why sometimes we see these bridged USDC tokens deviate in price from time to time.

As such, Circle is making it their mission to have all bridged USDC tokens eventually become the native version of the asset. This mission started after their expansion of native USDC to the Avalanche ecosystem, following the launch of the CCTP protocol just a couple of months ago. This year we should be expecting native USDC to flow across more and more chains, starting with Arbitrum on June 8th.

What exactly is going to happen?

Following June 8th, there will be two different versions of USDC on the L2 chain.

From a user perspective, the apps will take care of helping us transition from bridged to native USDC.

Future plans for CCTP support

According to the Arbitrum team, “Circle expects to bring Cross-Chain Transfer Protocol (#CCTP) to Arbitrum after the launch of native USDC”.

“Cross-Chain Transfer Protocol (CCTP) is a permissionless on-chain utility that facilitates USDC transfers between blockchains via native burning and minting”. In other words, the protocol will take care of performing our cross-chain swaps on the backend, so that we end up with just a single native token across ecosystems. So if I wanted to go from Ethereum to Arbitrum, CCTP will take care of burning my native USDC on Ethereum (after I sign for approval of course), and minting the corresponding amount of native USDC on the Arbitrum side. This is different than using cross-chain liquidity pools, as you wouldn’t have to worry about making sure there is sufficient liquidity deposited inside the pool in order to facilitate the trade.

The main benefit for Arbitrum users (for integrating CCTP) is that we wouldn’t have to wait for the 7-day withdrawal delay that is prevalent across your typical optimistic rollup.

You can learn all about CCTP here if you’re interested. Make sure to follow the Circle team on Twitter to stay up to date with all their upcoming CCTP integrations later this year.

Celestia Releases DA Interface for the OP Stack

https://twitter.com/CelestiaOrg/status/1664305585523949569

On June 1st, Celestia announced “the beta release of a modular DA interface for the OP Stack”.

What is the OP Stack

In short, the OP Stack is the code that powers Optimism. “It’s a series of modules that work together to form coherent, reliable blockchains. Each of these components implements a specific layer of the stack”.

There are different layers in the OP Stack, whereby different modules can be replaced for one another within each layer, like so:

Developers are able to pick and choose from these different modules in order to build a chain that is most appropriate for their own given solution. If you can't find a certain module you’re looking for, then you can build your own - for example, a module that enables the use of zk-proofs for privacy.

If you’re on crypto Twitter, then you’ve probably heard of the “Bedrock” upgrade (which in fact, is expected to take place next week). “Bedrock is the name of the first ever official release of the OP Stack”.

So where does Celestia fit in?

Looking at the image above, we can see three different layers under the “chain” box, the consensus layer, execution layer, and settlement layer.

Celestia added a data availability (DA) interface to the OP Stack, allowing developers to define their own DA layer, whether that’s Celestia, Ethereum, Bitcoin, etc.

So, if you decide to use the OP Stack to build your own rollup, you can now choose to add Celestia as the DA option for your rollup. “This means that all the data that is required to derive the L2 chain can be made available on Celestia as native blob data instead of posting to Ethereum”, while still retaining Ethereum settlement. In other words, OP Stack validiums.

You can check out Celestia’s official blog post to earn all about the technical details behind this initiative.

What’s Next

According to the team, “developers can start experimenting today with a version of the OP Stack that uses Celestia for DA and "settles" on Ethereum. And Caldera will soon release the Taro testnet, which allows developers and users to try out the first public testnet of OP Stack using Modular DA”. The Celestia team also mentioned their plan to leverage the Quantum Gravity Bridge to “explore an upgrade of our OP Stack x Celestia integration to work with fraud proofs on top of Ethereum Mainnet”.

Introducing Kinto

Last week, @ramonrecuero announced the launch of Kinto, “the first KYC-compliant L2 on Ethereum”. This is Ramon’s next endeavor, following the unfortunate ending of his previous project, Babylon Finance, which was one of the victims during the Rari collapse.

What Is Kinto:

Kinto is an optimistic rollup on Ethereum with KYC built in at the protocol level. In other words, in order to launch your own application on top of this rollup, or in order to use any of the applications as a user, you’ll have to be KYC’d.

So, it’s similar to Arbitrum or Optimism in the fact that they’re all optimisitc rollups that settle on Ethereum, however, the difference with Kinto from a user’s perspective is “the difference between owning your identity (Kinto) and having no identity (Arbitrum, Optimism, etc.).”

Features:

Here are some of the features described by the team:

  • User Privacy: Kinto doesn't store user data.

  • Non custodial

  • Seamless UI/UX: native account abstraction

  • Multi-chain: Ethereum, Optimism, and Arbitrum

  • Built in insurance

Why Kinto

“No entity with stringent regulatory and compliance requirements can freely create products, transact, or deploy capital on Ethereum Mainnet”.

The team's argument as to why we need a solution like Kinto is that defi has not been able to fully reach its potential due to trad-fi not being able to jump in the space because of regulatory risks. They argue there needs to be a way for developers to permissionlessly launch financial products on top of Ethereum in a regulated manner.

I tend to agree with the need for a solution like this. We’ve explored privacy-enabled solutions in the past that also focus on solving this regulatory issue, but this is the first time we talk about a solution that is 100% KYC enabled. I think it’s foolish to think that trad-fi companies don’t want to tap into the existing value (& infrastructure even) within our web3 ecosystem. Aside from regulatory issues, it’s difficult for these billion-dollar companies to feel secure leaving their funds inside a wallet where they may face the risk of getting hacked and losing everything. Knowing that each founder is KYC’d as well as give them more confidence.

Use Cases

The Kinto team has mentioned a couple of use cases already, including:

  • “Tokenized traditional ETFs can be provided as liquidity in an AMM”

  • “Your bank could be linked to your wallet and automatically approves and issues a mortgage using funds from an on-chain money market and the tokenized deed to your house as collateral”

  • “Corporate treasuries could be held in on-chain assets, and corporate debt issuance could happen through a dapp”

What’s Next

Kinto’s testnet is already up and running for developers to start experimenting with. To learn more about the KYC-enabled rollup, you can check out their docs.

More News & Announcements

  • Injective leverages Wormhole bridge to start connecting to the Polygon network, allowing Injective users to start using the $MATIC token on the Injective dapps, while also allowing Polygon users to use IBC assets across Polygon native dapps.

  • MantisSwap, Polygon’s native stableswap AMM, is now live on zkEVM

  • XYFinance integrates the Polygon network into its DEX & Bridge solution. This is the 14th EVM chain XYFinance has added support for already.

  • Giza, who are building an open AI economy, just announced the launch of Orion, “a verifiable, extensible framework to superpower AI & web3”. “Orion leverages the capabilities of Open Neural Network Exchange (ONNX) and Cairo to guarantee the reliability of inference, providing developers with a user-friendly framework to build complex, verifiable machine learning models.”

  • The Realms team (on-chain games on StarkNet) recently dropped a new Loot Survivor mini-game. Here’s how you can experience the game for yourself.

  • Rango, a DEX/bridge aggregator solution, just added support for StarkNet.

  • Storj integrates Era, “to bring faster more secure payment systems to decentralized storage”. This “will allow Storj (who claim to be the only EVM-compatible cloud storage solution) to perform faster and more secure transactions, reducing gas fees and making the payment process swifter and more efficient”

  • Taho, a web3 wallet, announces custom network support. “You can now connect to all your favorite EVM networks, such as zkSync, Fantom, Gnosis, Canto, Celo, and many more”. To celebrate the release of custom networks, they’re doing 3 weeks of mints & giveaways on zkSync.

  • New Arbitrum launches this past week include:

  • Offchain Labs, the development team behind Arbitrum, announced the launch of a working fraud prover for Stylus (Arbitrum’s “EVM+” system).

  • Circle to launch native USDC on Arbitrum on June 8th. Moving from “bridged” USDC (USDC.e) to “native” USDC. Check out the thread to learn what this means.

  • Coordinape, a DAO coordination platform, launches on Optimism

  • OP Labs (Optimism) announced the launch of OP Stack Mods, community-driven modifications to the OP Stack. Celestia just built their own OP Stack mod that allows OP Stack chains to leverage other DA solutions, while still retaining Ethereum’s consensus.

  • The Scroll team held a Twitter Space to discuss their latest developments.

  • Here’s a sneak peek at what the UI will look like for Acumen, an RWA platform on the Fuel network.

  • Introducing Fluid: The Fuel team held a Twitter space with Fluid, to “gain firsthand insights into how Fluid aims to maximize efficiency and create an unstoppable decentralized stablecoin, USDF”.

  • BIT holders can now vote on MIP-22,  which proposed a new conversion rate (1:1) that was suggested by the community. Voting ends on June 7th, but it looks like the proposal should pass with 100% approval.

  • @ramonrecuero announces Kinto, “the first KYC compliant L2 on Ethereum”.

  • An IBC channel between Dymension & Celestia is now up

  • The Eclipse team wrote this thread covering all of their highlights over the month of May.

  • Introducing the alpha release of the Sovereign SDK. As a reminder, Sovereign is building a rollup framework that allows developers to easily spin up their own dedicated, sovereign execution network (rollup).

  • Babylon integrates Stride, bringing BTC security to the Cosmos liquid staking solution

  • Nibiru chain also leverages Babylon to bring BTC security to Cosmos’ defi hub.

  • Polymer, who is expanding IBC beyond the Cosmos, just held its second Community Call.

  • Connext launches its chain abstraction toolkit. original thread

  • Omni Network, the Ethereum interoperability solution that leverages ETH restaking, just integrated the Scroll network.

  • Keplr2.0 is here

  • New osmosis testnet is out

  • Urbit makes it possible to host the osmosis front-end

  • Stride's next stToken will be stCMDX

  • Proposal to deploy Mars on Neutron

  • “The Agamotto network is live, which will be a chain to start pushing price feeds onto mainnets like Juno Network and Secret Network.”

  • Presenting the DCA+ whitepaper.

  • Anoma announces its 3rd fundraise, in a round co-led by CMCC Global, and including others like Delphi, Spartan Group, and more. Anoma is a privacy-preserving protocol with support for multi-chain atomic settlement.

📚 Discourse & Education

Will OP Superchain have network effects?

https://twitter.com/AlanaDLevin/status/1663934219607764993?s=20

Alana Levin from Variant Fund poses a question about Optimism’s Superchain and whether it’ll “play out as Cosmos 2.0”. To be clear, she is not pointing to Cosmos 2.0 as something to be desired. It’s widely acknowledged that Cosmos (SDK, Tendermint, IBC) failed to build network effects and alignment across chains.

So what’s different about the Superchain?

Here are some bull case takes:

  • Better shared security. Superchain chains all leverage Ethereum as a base layer. This is different from Cosmos, where every chain has (historically) handled security independently from one another, leaving the system vulnerable to the weakest link.

  • Better social alignment. This is hard to quantify, but there does appear to be a shared sense of mission and values. Positive sum mindsets can make Superchain participants more likely to opt into standards (e.g. bridging, shared sequencing, upgrades). If this all sounds too kumbaya, you can think about part of the social alignment as economic alignment. If everyone builds on Ethereum and the Superchain succeeds, the value of their ETH goes up.

Here are some bear case takes:

It seems like the OP team assumptions are similar to the above, with a strong emphasis on social alignment.

More Discourse & Education

That's all for this week! Thanks for reading 🧱🎬

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]]> modularmedia-2@newsletter.paragraph.com (Modular Media) <![CDATA[Weekly Rollup #16]]> https://paragraph.com/@modularmedia-2/weekly-rollup-16 IPojVKXyw4jo09fhlr6i Fri, 02 Jun 2023 16:37:14 GMT 👋 Welcome to Modular Media! We cover news, updates, educational content, and more within the modular blockchain ecosystem.

Subscribe to get posts sent directly to your email every week, and follow us on Twitter for modular-related updates!

This week’s issue covers:

  • DeGate Launches on Mainnet

  • More News & Updates

  • Overloading Ethereum consensus

  • Rollups are L1s and L2s(?)

  • More Discourse & Education

📣 News & Announcements

DeGate Launches on Mainnet

https://twitter.com/DeGateDex/status/1658817416493711360

A bit late with this announcement, but on May 17th, DeGate launched an application-specific zk-rollup, in what was the first fully non-custodial zk-rollup launch on Ethereum.

What is Degate

DeGate forked the architecture and smart contracts from Loopring v3, an existing Ethereum L2 network, in order to launch their own zk-rollup entirely dedicated to an order book DEX. 

DeGate Products

  • Spot order book trading: “The ZK technology powers a “match node” matching orders between traders, periodically recording the transactions on a mainnet. This ensures a faster, cheaper trading experience that is still secured by Ethereum”.

  • ‘Grid trading: “This replicates the grid trading on a CEX, which enables users to implement a trading strategy based on the ups and downs in a trading pair”.


Design Principles

  • Decentralized: “In the long term, the goal of DeGate protocol is to implement a standalone open-source client functionality, meaning no single entity will have control over the protocol, and by simply downloading the open-source code on GitHub, anyone will be able to access the protocol directly.” 

  • Trustless: non-custodial storing of assets 

  • Permissonless: Like Uniswap, DeGate is an open protocol where anyone can list whatever token they want while allowing anyone to access the app (except if you’re in the US).


3 properties ensure decentralization 

  • Zk-rollup DA: A bunch of transactions get bundled together off-chain, and then verified by an immutable open source smart contract. So, a SNARK proof is generated for every batch of transactions, and then gets posted on Ethereum. Also, because transactions are bundled together, fees are split between multiple individuals, ultimately lowering the fees for everyone. 

  • No admin keys: Most of the time, you’ll hear people say Ethereum-based rollups like Arbitrum, Optimism, etc. all share Ethereum’s security. And while this is somewhat true (proofs are posted on Ethereum for finality), there still lie some security concerns. The main one being the use of admin keys. Essentially, admin keys are a way for the rollup deployers to make changes or upgrades to the rollup at some point in the future. Usually, you’ll see rollups secured by a 3/5 multisig or some other variation. This means that there are five sets of keys that can be used for rollup upgrades, and of those five, only three would be needed to make changes. So a 5/7 multisig means you need five of the seven keyholders present or in accordance in order to make a change. In short, you’re relying on these multisig operators to act accordingly and not run away with our funds. DeGate on the other hand doesn’t use any multisigs. Why? DeGate removed all upgradability from the protocol, meaning once a contract is deployed, there is no changing it. It just acts as it was intended for. 

  • Exodus Mode: DeGate is just a protocol, however, there still needs to be an interface us users interact with in order to use the protocol. If for some reason, the operator running DeGate goes offline or decides to withhold our transactions for more than 15 days, then anyone can submit a transaction to enable Exodus Mode. This is an irreversible mechanism that shuts down the oeprators deployment instance for good. Because DeGate is a zk-rollup, users can access historical data on Ethereum. This data can be used to generate a proof of your owned assets in order for asset retrieval.


DAO-Centric Model

As mentioned, Degate is intended to be completely decentralized and permissionless. As such, the development and future of the protocol will be entirely in the hands of the DeGate DAO, which is comprised of the DG token holders. 

This means the DAO will decide what they do with the protocol revenue, whether they want to introduce some sort of burn mechanism or use the revenue to fund new growth initiatives, it’s entirely up to the token holders. 

While the DeGate protocol itself does not operate with multisigs, the DAO does. That said, it “can be upgraded to an open-sourced DAO management tool through governance”. You can take a look at the DAO treasury here. 

DG Token

DG, Degate’s native token, will have a total supply of 1B, and will be distributed as follows:

You can learn more about the distribution here. 

TVL & Trading Volume

As of today, there is $2.22M in TVL on DeGate (15.62% consisting of its own token, DG). That said, TVL is capped at $3M, and everything will be insured during this beta launch (in the case of any hacks or loss of funds).

In terms of trading volume, the protocol has so far achieved $36M+:

What’s Next 

DeGate DEX officially launched its mainnet beta on May 3rd. While the protocol may be restricted in some regions (thanks for protecting us Gary), for most of the world, the DEX is now open for any and all to test out.

More News & Announcements

📚 Discourse & Education

Overloading Ethereum Consensus

https://twitter.com/VitalikButerin/status/1660356821779988480?s=20

Vitalik writes an article illustrating why the community should not “overload Ethereum consensus”. But what does this mean exactly?

The first thing to understand is that blockchain systems have different types of consensus: technical consensus and social consensus.

  • Technical consensus is likely what you think about when you hear the word consensus. Proof-of-Work, Nakamoto, Proof-of-Stake, heaviest chain, all that stuff.

  • Social consensus sits underneath technical consensus. If the Bitcoin community decided they were cool with 22mm BTC, the software can be upgraded.

The second thing to understand is that the post mostly refers to overloading social consensus. He illustrates the point using clear examples (definitely worth a read) but the bottom line is that we should not expect Ethereum to fork or take special action if something goes wrong at the middleware or application layers.

Note that he is not saying we shouldn’t have high TVL rollups or validators restaking with EigenLayer. Ethereum might very well be doing a lot of work and supporting high value use cases, but we shouldn’t expect the base layer protocol to bail out other projects. In this Chopping Block episode, Sreeram from EigenLayer talks to a useful and timely analogy of banks taking greater risks knowing that the government will bail them out. It can be somewhat of a self fulfilling prophecy, and Vitalik is trying to avoid this turnout.

The timing of this piece is likely not random. Rollup usage and excitement around EigenLayer is accelerating. It’s good that this conversation is being had now.

One other thing worth pointing out is how EigenLayer has handled the discourse. It’s very clear that Sreeram and team have not only thought through these questions in depth but have already set guardrails to account for the mentioned risks. Pretty impressive!

Of course, different perspectives are healthy too, so here are two posts that shine different lights on the situation.

Rollups are L1s and L2s(?)

https://twitter.com/jon_charb/status/1662212301016150016?s=46&t=Sa-kQ8xUY_X1giqluqQhAA

Jon from DBA breaks CT with yet another controversial rollup post 🌶️

The core argument he makes is that we need better rollup mental models. Subjectively he does a good job poking holes in the “layered” model - and objectively people are confused by the status quo.

Here are a few reactions / threads from both sides of the debate that obviously followed:

Jon also followed up with a summary thread where he unpacked his main objective for the post.

From our view, Jon is less focused on the proposed solution and more emphasizing a “problem to solve”. If we as an industry agree with the problem yet don’t want to mess with the L1 / L2 framework, maybe we can brainstorm together. Let us know what you think! We’d love to feature different perspectives building on Jon’s foundation.

More Discourse & Education

That's all for this week! Thanks for reading 🧱🎬

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https://twitter.com/modularmedia_/status/1663658240100675584?s=20

]]> modularmedia-2@newsletter.paragraph.com (Modular Media) <![CDATA[Weekly Rollup #15]]> https://paragraph.com/@modularmedia-2/weekly-rollup-15 Ao7uM4IQHgZuHbHQuuQr Wed, 24 May 2023 16:07:02 GMT Mantle Passes BIP-21 | IBCX Launches | MEV burn good or bad? | Can ZKPs keep up with chains? | Week ending May 12th

👋 Welcome to Modular Media! We cover news, updates, educational content, and more within the modular blockchain ecosystem.

Subscribe to get posts sent directly to your email every week, and follow us on Twitter for modular-related updates!

This week’s issue covers:

📣 News & Announcements

Mantle Votes to Optimize Brand and Strategy

https://twitter.com/0xMantle/status/1659522883083993089

After receiving almost 100% approval, BIP-21 has officially passed, meaning BitDAO and the $BIT token will be rebranded to Mantle.

What is the Proposal

On May 5th, a proposal was made on the BitDAO community forum (BIP-21) to optimize the “brand, token, and tokenomics” for Mantle.

Specifically, the proposal looked to merge BitDAO (governance) and Mantle (the product) under a single brand in hopes of achieving long-term success for token holders.

What is BitDAO

BitDAO was launched in July 2021, and has since grown to have the largest DAO treasury.

While most of the treasury consists of its own token (BIT), you can see that the amount of ETH held is also extremely high, reaching close to 270K ETH held in the treasury.

Thanks to this giant war chest, the team has been able to kickstart several initiatives, including building Mantle Network, as well as funding Game7, EduDAO, and a Mantle eco-fund.

Initially, launching new initiatives through the treasury was up to the $BIT token holders, but following this proposal (BIP-21), this will now change to Mantle token holders (ticker symbol still not announced).

What is Mantle

Mantle is an Ethereum L2. Specifically, Mantle is its own execution environment (a rollup), that settles on Ethereum, while posting its data to Eigen Layer’s DA solution (a data availability solution secured by $ETH).

What does the proposal mean now that it passed

As mentioned, BitDAO served as the governance piece for Mantle network, allowing BIT token holders to essentially control the direction of the network.

To make things more simple, the team switched to “one brand one token”, whereby Mantle, rather than BitDAO, will serve as the unified ecosystem brand, while still preserving all existing governance processes.

“The existing BitDAO Treasury holdings and exposure shall remain under the governance of token holders. The treasury will be referred to as the Mantle Treasury”.

In terms of the new token design, and conversion details, the team will share more about this following the network’s audit. That said, existing BIT token holders will not have to take “any preparatory actions and new buyers may buy $BIT in preparation for the conversion”. Over time, multiple distribution channels will be open for users to choose from. And again, all existing proportions of governance rights will remain intact.

The team also announced that the vesting schedule for the remaining n BIT will be accelerated, in order to make the transition to the new token much smoother.

What’s Next

BIP-21 passed with almost 100% approval in preparation for Mantle’s mainnet launch. I think the merging of BitDAO and Mantle into one unified brand was a great move for the team, as it simplifies things a lot more, reducing confusion and having to distinguish between how BIT relates to the Mantle network. Now, things are much clearer - the Mantle token will serve the mantle ecosystem.

The team has not mentioned specifics as to how the conversion will exactly take place, so make sure to follow the team on Twitter to stay up to date with the ecosystem. You can check out the complete proposal here.

IBCX Launches

https://twitter.com/IBCindex/status/1658889317404786690

After months of development, IonDAO has officially launched IBCX, the index fund for the Cosmos ecosystem.

What is IBCX

The Interchain Index Token (IBCX) is essentially an index fund for the Cosmos ecosystem that aims to consist of the biggest projects within the ecosystem.

IBCX is the first product to come out of IonDAO, and as such, is governed by the ION token holders.

What is IonDAO

IonDAO has had quite a history.

When Osmosis first launched, they needed a pair token to test their AMM solution (needed something to pair with OSMO), and this is where $ION came in.

Rather than getting rid of the token following the Osmosis mainnet launch, the team decided to keep the token live, and thus, ION was airdropped to $ATOM wallets. Altogether, there were 21,294 tokens minted.

ION was first treated as a Cosmos memecoin, and in fact, has had quite a ride:

Eventually, the Ion community formed a DAO around the token and thus, the question became which type of products the DAO would develop.

Some initial ideas included bringing synthetic tokens (commodities, stocks, etc.) to Osmosis, however, this idea was later abandoned following the Terra collapse. Eventually, the DAO decided that they would develop an index fund (IBCX) for the Cosmos ecosystem, removing the hassle of figuring out which tokens to invest in for new entrants.

Next Step: what is stIBCx

Following the launch of IBCX, the DAO developers posted a proposal on the community forum to launch stIBCX, which will be powered by Stride, the biggest liquid staking solution across the Cosmos.

The main reason to launch stIBCX is to solve the issue of the underlying tokens in the IBCX basket losing out on staking rewards.

Plus, stIBCX will open the door for more defi opportunities, as token holders will be able to use their stIBCX as collateral to earn additional yield - on top of the accumulating staking rewards.

The voting period is set to close on the 29th, and so far, it looks like it’ll 100% pass. You can learn all about stIBCX here.

More News & Announcements

  • Lagrange Labs raised $4M in a pre-seed funding round led by 1kx, for the development of their zk-proof based interoperability solution.

  • @smsunarto introduced World Engine during a recent presentation. World Engine is “a sharded rollup SDK built to horizontally scale onchain games” that is being developed by Argus Labs. We should be expecting more details to come once the presentation is posted online for the public to view.

  • Helika Analytics will be deploying on Base, the rollup powered by Coinbase. “Helika will provide Base & its gaming projects leading analytics” including user segmentation, retention tracking, and predective models.

  • Here are the winning projects from the recent ZKHack, which was hosted by the RISCZero team. Take a look to see the different ways in which zk-proofs are being used.

  • Radius, a shared sequencer solution, announces “Scaling 2023”, an event filled with keynote speeches and presentations from several teams across the modular space, that will take place on June 4th in Seoul Korea.

  • AltLayer announces RaaS (rollup-as-a-service) day, which is set tot ake place on June 22nd. Details expected to be announced soon.

  • The Taiko (zkEVM) team just published a recap of everything they achieved over Q1.

  • The Aztec (privacy-enabled L2) team recently asked the community to share their input as to how the network should approach sequencing. Here is a thread that highlights some of the proposed mechanisms, including a PBS method, “whisk”, and other existing shared sequencers.

  • @0xGoldzn published the latest monthly update for the Fuel (modular execution environment) ecosystem.

  • Here are the Fuel-based hackathon winners from ETHGlobal Lisbon: Fuelet Pay, and Fuel Predicate.

  • Here are the Scroll-based hackathon winners from ETHGlobal Lisbon

  • Particle Network, a fullstack middleware platform, and Questn, a web3 marketing and analysis platform, both deployed on the Scroll (zkEVM) network.

  • Scroll announces ZK Symposium, “a series where we invite experts and founders in ZK to discuss their protocols and technological breakthroughs”. So far, this includes an intro to the Noir programming language, a discussion about ZKML, HyperPlonk, the Axium project (zk coprocessors), and more.

  • Optimism announces the official date (June 6th) for the OP mainnet upgrade to Bedrock.

  • Wormhole announces a $50M cross-chain ecosystem fund.

  • Chainlink Automation is now live on Optimism: “Chainlink Automation is a highly performant and decentralized automation service. Developers can use Chainlink Automation to monitor automation logic securely and cost-efficiently off-chain, and then initiate an on-chain transaction to execute the smart contract function when predefined conditions are met”.

  • Thales Markets (on-chain derivatives) just released their new simplified UI: “You can now access all positional markets on crypto asset prices (w/ @chainlink Price Feeds) in just a few easy steps”.

  • Businesses can now integrate and leverage NOWPayments to start accepting DAI payments through the Arbitrum network.

  • Altitude, a LayerZero powered bridge integrates the Arbitrum network, giving users a new way to enter the L2 network.

  • LionDEX v2 testnet is now live on Arbitrum. LionDEX is a P2P AMM perpetual futures protocol.

  • Users can now bridge from Coinbase exchange to zkSync Era directly, thanks to Layerswap.

  • Tiny Worlds, a platform for idle-style games that runs through its $TINC token, is now live on Era.

  • Madara (StarkNet sequencer) + Kakarot (zkEVM on StarkNet) = zkEVM Type-1

  • Kasar Labs finally opens up “pre-orders for the plug'n'play Starknode.

  • Four more projects have deployed (or are in the process of deploying) on Polygon zkEVM:

    1. VirtuSwap: a native Polygon DEX that aims to improve the user experience with AI.

    2. Sentio: “Sentio is a real-time, fully-hosted platform that helps dApps fully host on-chain data indexing, visualization, monitoring and log search.”

    3. Gamma: a protocol for managing active liquidity across DEXs like Uniswap v3 and Quickswap v3.

    4. Idle: a defi yield automation protocol that will also be deploying on zkEVM after 100% voting approval from the community.

📚 Discourse & Education

MEV burn good or bad?

https://twitter.com/drakefjustin/status/1658101866469679104?s=20

Justin Drake from the Ethereum Foundation proposes “MEV burn”, an add-on feature to enshined PBS. If you aren’t familiar with PBS, it’s called proposer-builder separation and there’s a useful recap in Justin’s ETH research post. You can also venture down the PBS rabbit hole here.

The basic idea for MEV burn is similar to EIP-1559 - burn ETH tokens to evenly distribute value across all ETH token holders. How? It makes ETH more deflationary - think “ultrasound money” meme. ETH burned —> less total ETH —> your ETH is a higher percentage of total ETH —> you are wealthier.

Do community members like the MEV burn idea?

Some yes, some no.

Many clear security and economic benefits are outlined in the post, so we won’t go into them. Instead we’ll highlight the controversy - some people see downsides for a super deflationary ETH, as short-term insider benefits (today’s ETH holders get richer) could negatively impact long-term adoption.

One reasonable way to think about MEV burn, which seems to align community members, is that “it’s not perfect but less bad than the other options”.

  • Would we rather distribute value to validators? We have the mechanisms to do so, but it’s probably more centralizing and less fair.

  • Would we rather distribute value to public goods? We might RATHER this, but in practice we don’t have an automated or truly neutral way of doing it. Who gets to decide where funds go?

Can ZKPs keep up with chains?

https://twitter.com/aeyakovenko/status/1658559191408328706?s=20

Anatoly from Solana suggests that zero-knowledge proofs (ZKPs) are simply slower than normal computation and that users will not tolerate this UX. This is similar to a previous post by Anatoly with a similar message - ZKPs just can’t keep up.

Is he right? What’s the deal?

Anatoly is right in that, by definition, ZKPs are slower than normal computation. However, we’d argue this isn’t the right way to think about the problem being solved. As Fede’s Intern puts it, “The thing he is missing is that ZKPs can be composed, folded and recursed. In addition to this the ZKP can be generated by a centralized cluster of nodes.” Put another way, ZKPs are extremely parallelizable. The proving problem can be split into many pieces, where pieces are distributed among many powerful computers that collaborate on solving the problem. If you are following the generative AI revolution, this is largely how models like GPT (ChatGPT) get trained.

The other thing he does not address is the proving function can be decoupled from the sequencing function. This makes it so transactions are finalized at the DA layer speed and ZK proofs are generated asynchronously.

Great - but what do parallelizable, asynchronous ZK proving systems actually mean for your user experience?

A conservative experience would give you a quick confirmation in your wallet, followed a few seconds later by a checkmark indicating the ZK proof was verified. Not bad!

Related note: ZKPs also offer dramatic cost efficiencies, which Polynya explains very well in their recent post.

Ok what are intents?

You’ve probably seen the word “intents” flying around CT lately. We know, it’s been pretty inten… kidding won’t do it. Here are a few resources to kickstart your journey down the intents rabbit hole:

https://twitter.com/VelvetMilkman/status/1660073402265214979?s=20

More Discourse & Education

📊 Chart of the Week

Earlier this year we saw two zkEVM’s go live, zkSync Era, and Polygon zkEVM. While zkSync has been running away with most of the TVL (some argue it’s token farming, but only time will tell) initially, Polygon just last week experienced a huge uptick in TVL, as well as achieving a single-day record for transaction volume (+13K):

During this period, Polygon zkEVM experienced a drop in transaction fees. This is because zkEVM is a rollup, and as you may already know, rollups bundle a bunch of transactions together off-chain into a single block, then submit a proof that verifies the validity of that block. The more transactions within a block, the more the fees are split.

The top Polygon defi dapps experienced the biggest rise in TVL, including: Quickswap, (the native Polygon DEX), DoveSwap (token swaps), and 0vix (native Polygon lending platform).

For perspective, as of Tuesday, May 23rd, Polygon zkEVM TVL is sitting at $10.7M:

While zkSync Era TVL is sitting at $121.9M:

So while Polygon zkEVM is experiencing some rapid growth in TVL over the past week, zkSync is still about 10x higher. Although many expected Era to sit above Polygon due to token farming, I don’t think many saw the gap to be this wide. It’ll be interesting to see how these numbers shape up over the course of the year.

That's all for this week! Thanks for reading 🧱🎬

If you found this issue useful, please share this tweet so more people can see it 🙏

]]> modularmedia-2@newsletter.paragraph.com (Modular Media) <![CDATA[Weekly Rollup #14]]> https://paragraph.com/@modularmedia-2/weekly-rollup-14 EP9Csz0fk6lyUP7vUmtW Tue, 16 May 2023 18:29:11 GMT Neutron is First to Adopt ICS | How bad are rollup multi-sigs? | How decentralized should sequencers be? | Chart of the Week | Week ending May 12th

👋 Welcome to Modular Media! We cover news, updates, educational content, and more within the modular blockchain ecosystem.

Subscribe to get posts sent directly to your email every week, and follow us on Twitter for modular-related updates!

This week’s issue covers:

  • Neutron is First to Adopt ICS

  • More News & Announcements

  • How bad are rollup multi-sigs?

  • How decentralized should sequencers be?

  • More Discourse & Education

  • Chart of the Week

📣 News & Announcements

Neutron is First to Adopt ICS

https://twitter.com/cosmoshub/status/1656569008710189057?s=20

This past week, Neutron became the first chain to adopt interchain security, becoming the first Cosmos Hub consumer chain.

What is Replicated Security

As many of you may already know, Cosmos is an ecosystem of appchains (sovereign L1 chains). The first appchain to launch in this ecosystem was the Cosmos Hub.

Although lately the Cosmos Hub has been met with tons of skepticism due to its lack of growth and development, the recently published ATOM v2 paper, which focused on the growth of the Hub specifically, now introduced a new roadmap for the hub, listing different ways in which the Hub will grow the interchain ecosystem. One new mechanism outlined in this paper was “replicated security”, whereby the hub would essentially loan its security (The Hub’s ATOM stake & validator set) to other appchains.

As you may already know, the Cosmos Hub is secured by ATOM tokens that are staked onto the Hub by validators and delegators. Validators are those who are actually running the software nodes on their computer in order to help keep the chain running. Validators are chosen based on the amount of stake, meaning that in order to become a validator, your stake must be among the top 175 highest (today, there are 175 Hub validators). Those who may not have enough ATOM, or those of us who just don’t want to keep a node running 24/7 can simply delegate our tokens to a chosen validator. This way, we are still able to benefit from ATOM block rewards, without having to run a node ourselves.

Ultimately, the more ATOM that is staked on the network, the higher the security. This is because the Hub operates under a Tendermint consensus model, whereby a malicious actor would need to control 2/3 of the Hub’s stake in order to take control of the network. The higher the stake, the more money you would need.

Replicated security distributes involves two parties:

  • the provider chain (Cosmos Hub): the hub provides its 175 Cosmos Hub validators, along with the 190M $ATOM staked on the hub, to other appchains

  • the consumer chain (Neutron in this case): the appchain adopting replicated security from the provider chain

Before ICS

Typically, an appchain would need to bootstrap its own security by spinning up its validator set, which is very hard to do.

One reason why it’s so hard to do is because it requires a lot of incentivizing. Running a validator can become quite costly, which is why chains typically pay their validators with block rewards, fees, and other mechanisms. Essentially, you need to make sure you’re making more from rewards than you’re paying to keep your validator running 24/7. At the same time, you want to make sure the network is decentralized enough to be considered secure. In other words, you want to spread the validator set across as many people as possible, from as many different geolocations as possible. So, you can see how bootstrapping your own security is quite difficult, not only to reach, but to maintain as well.

With ICS, appchain deployment can be done far more quickly, as you wouldn’t have to worry about security at all. Rather, you’ll borrow the validators set and all that staked ATOM from the Hub for your own network.

Why would a validator want to opt into ICS?

So why would a Cosmos Hub validator want to contribute to the security of Neutron’s chain (or any other future consumer chain that adopts ICS)?

Because of the basket of rewards.

Originally, validators were only earning ATOM block rewards, but now, validators can be rewarded by not only ATOM, but with Neutron and any other future consumer chain token.

Also, here in Neutron’s case, the bottom 5% of Hub validators would not be required to run extra infrastructure, however, they’ll still be able to earn NTRN rewards. As mentioned earlier, running an extra node for a new consumer chain can become expensive, so this is a way to help those bottom 5% of validators who may not be earning enough through block rewards.

How do you join ICS

In order to adopt replicated security from the hub, your chain must go through Cosmos Hub governance.

Essentially, the consumer chain has to come up with a proposal that outlines what the project is, how it would benefit the Hub (don’t want to waste the Hub’s resources on just any chain), and how you would pay for the Hub security (how will you incentivize the validators?).

In Neutron’s case, they decided that 25% of their network’s transaction fees, along with 25% of MEV captured revenue, will flow back to the Hub. Aside from this, 7% (70M NTRN) of their total token supply will be airdropped to ATOM stakers (this of course includes validators).

What is Neutron

Neutron is a permissionless CosmWasm-based, smart contract platform that was developed by the same team (P2P Validator team) that developed Lido, the biggest liquid staking protocol in the space. Just as Lido branched out into its own independent company, so too will Neutron. This means that the growth of Neutron will depend on the NTRN token holders.

I think this is a great first addition to the Hub, as it will provide an environment for teams to permissionlessly deploy their smart contracts on top of, ultimately. This means that we may finally see the Hub ecosystem start to grow, which is something many have been waiting a long time for.

Although Neutron will mainly focus on expanding the defi landscape for the Hub, there will be several types of projects that will launch on the network, including defi, NFTs, DAO tooling, and other infrastructure solutions. Some of the projects that have already been confirmed to launch on neutron include:

  • DEXs: Astroport (will be the flagship DEX for Neutron), and Cosmoswap Osmosis outpost - (Osmosis with a different front-end): users can tap into Osmosis liquidity without leaving Neutron

  • Lending: Umee, Mars

  • Skip protocol: MEV

  • Nolus: defi money market

  • Kado Money: onramp

  • Stargaze outpost: NFT marketplace

  • Gitcoin is also rumored to deploy on Neutron

  • & of course, I would expect Lido to deploy here as well

So if Neutron won’t be using its own token for security, then what use case will the token have?

All 1B NTRN tokens have already been minted and distributed. That said, over 50% went to the Neutron DAO, where they will decide on how to use the tokens (grants, partnerships, incentives, etc.).

According to the team, the main use case for NTRN is governance. Users must bond tokens within a 1 of 2 vaults in order to obtain voting power.

  • NTRN only vault: 1 NTRN = 1 vote

  • LP Token Vault: NTRN-ATOM and NTRN-USDC pairs

NTRN will also have a deflationary aspect, as NTRN tokens used for gas will get burned (after the 25% is paid out to validators). We should note that users will be able to use either NTRN, ATOM, or USDC for gas.

Recent Neutron developments

Just yesterday, Neutron announced that Catalyst will be integrated into the smart contract platform. This means that protocols that deploy on top of Neutron, will have immediate access to other Catalyst-connected networks. We spoke about Catalyst in greater detail last week in case you’re interested.

What’s Next

Now that Neutron is live and producing blocks, we should be expecting the Hub’s defi (and just general) app ecosystem to start growing, which means added utility to the ATOM token.

In terms of other consumer chains, we should be expecting Stride to be the second chain to adopt ICS. The difference here is that while Neutron was a new chain entirely, Stride will be the first time we see an already live project switch to adopt ICS.

It’s exciting times now for the Cosmos Hub, and we look forward to watching the ecosystem grow over time.

More News & Announcements

📚 Discourse & Education

How bad are rollup multi-sigs?

https://twitter.com/aeyakovenko/status/1653819895489130497?s=20

Anatoly from Solana claims it is likely “impossible and irresponsible” to get rid of of rollup multi-sigs. Is this true and what are the implications?

“Rollup multi-sigs” refer to multi-signature wallets that are able to upgrade rollups. Here’s a made up (but unfortunately realistic) example to make this clear:

  • Rollup A has smart contracts on Ethereum L1 (clearly we are referring to smart contract rollups, not sovereign rollups)

  • Three members of the rollup team can upgrade the smart contracts via multi-sig wallet, thus upgrading the rollup

  • There is $1bn of TVL in the rollup

  • Even if it’s a mature ZK rollup with a decentralized sequencer set, the three rollup team members can steal your funds

It is probably clear why this is bad. It’s like buying a fancy home security system and then leaving the backdoor wide open.

The question is - can we solve this problem?

Yes and no. It’s better to think about a design space, where different rollups will pick different tradeoffs based on their needs. It is quite possible that simple rollup protocols do become immutable given enough time to mature (similar to mature smart contracts like Uniswap, but let’s assume multi-sigs are here to stay. There are still many aspects of the design space to consider:

  • Decentralize signers. Multi-sigs are improving (e.g. account abstraction. MPC) and it’s possible to find creative ways to diversify the signer base. You can imagine different types of upgrades requiring different signing criteria - some changes require smaller groups of signers (e.g. team) and other changes require larger groups of signers (e.g. DAO).

  • Time delays. Rollup smart contracts can be upgraded with some latency to give users a chance to exit and withdraw funds to the L1. You can imagine typical (e.g. time delay is three weeks after rollup team signs upgrade) and atypical flavors of this.

  • L2 native assets are safe. If you are using smart contracts and assets native to the rollup, and are not relying on the L1 for bridging to other chains, your assets are not at risk when the L1 smart contracts are corrupted. L2 rollup nodes are the maintain the ledger where those assets live, so they can’t be fooled.

Time will tell which designs catch on.

How decentralized should sequencers be?

https://twitter.com/0xDinoEggs/status/1656088108381663232?s=20

DinoEggs here 👋 I pose a question around sequencer decentralization to see how people are thinking about it. My question was about the number of sequencer nodes needed for different use cases, but to be clear, the number of nodes is not a sufficient measure by itself. You don’t have a decentralized sequencer set if your rollup team is running 1000 nodes - but whatever - wanted a proxy and easy conversation starter.

Here are some of the responses:

The responses clearly varied, but not as much as I expected. Sentiment hovered around dozens to hundreds of independent nodes / entities. Less for permissioned cases and more for cases that need greater censorship resistance. What’s interesting is that this node range maps to basically all Cosmos L1 chains, so we could very well see Tendermint being used as the leader selection / consensus mechanism for rollups.

More Discourse & Education

Chart of the Week

We want to introduce a new weekly addition to the newsletter - the chart(s) of the week!

What better way to start this new series than with these great charts provided by James Ho, which look into the annualized revenue of Arbitrum and Optimism (Ethereum L2 networks), while also comparing margins before and after EIP-4844:

Before looking at the charts, it may be important to quickly recap what EIP-4844 is. For anyone unaware, EIP-4844 involves the reduction in data costs (proto-danksharding).

How does this impact rollups?

Smart contract rollups like Arbitrum and Optimism are off-chain scaling solutions that provide faster computation and lower fees for users, while still preserving Ethereum’s security.

In order to help ensure this security, these rollups have to publish transaction data back to the L1 (Ethereum). Posting this data is the major contributor to gas costs.

EIP-4844 reduces this data cost.

So the argument is that before EIP-4844, Arbitrum, and Optimism are only taking in about 30-40% in margins (after paying Ethereum).

After EIP-4844, margins are expected to go to about 90-95% - that’s how big of an impact EIP-4844 will have on rollups.

Initially, one of the criticisms people had about rollups was about whether or not they would be able to accrue revenue. Why? Because many thought that because smart contract rollups like Arbitrum and Optimism would have to ultimately settle on Ethereum, Ethereum would be the network generating all the revenue.

However, James points out that now, the question becomes when that value would be directed toward the L2 token (ARB & OP):

& with L2 economic activity continuing to rise - wen $1B in fees:

That's all for this week! Thanks for reading 🧱🎬

If you found this issue useful, please share this tweet so more people can see it 🙏

https://twitter.com/modularmedia_/status/1658540371104927746?s=20

]]> modularmedia-2@newsletter.paragraph.com (Modular Media)