Huobi ETH Watch | Layer 2 and Eth 2.0

    2021/02/02 18:29 Maggie Li huang Created with Sketch.
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Guest: Xin—Huobi Investment

Guest: Alex Gluchowski—Founder of Matter Labs

Host: Flying Jack—Huobi Community Manager

Huobi Global Telegram group: https://t.me/huobiglobalofficial

Flying Jack:

Hello everyone! Welcome to the Huobi Global Telegram AMA. We will be discussing about Layer 2 and Eth 2.0. I am sure everyone would be eager to learn more about Layer 2 tech and Eth 2.0.

It’s a great honour and privilege to welcome Xin from Huobi Investment and Alex Gluchowski, Founder of Matter Labs.

Before beginning the session, could you please introduce yourself to our community?

Xin:

Its Xin from Huobi investment team, building infrastructure around Ethereum and bitcoin, currently looking at MEV, Rollups, interop problems.

Alex Gluchowski:

It's an honour to be here. I'm Alex, co-founder and CEO of Matter Labs — humble creators of zkSync. Our mission is to accelerate the mass adoption of crypto.

Flying Jack:

Thank you for the introduction Xin and Alex.

Can you tell us in brief about Layer 2 technology and give some glimpse about Eth 2.0.

Alex Gluchowski:

Sure. L2 denotes any protocol with an offchain state that is rooted in L1 (i.e. L1 contains a cryptographic fingerprint of the L2’s offchain state). It's a natural idea to use L2 for scaling, while keeping the assets and finality of the underlying Ethereum network.

Xin:

ETH2.0 is a big topic in 2021-2022, I think there will be a shift from pow to pos, evm to ewasm, using sharding to scale the network

Alex Gluchowski:

Agree. I think the Ethereum Foundation realized that the project was way to ambitious, and it would be wiser to approach it step by steps.

So the focus is now on PoS.

On the scalability part, the official plan is now to embrace L2 and make ETH 2.0 a rollup-centric platform.

This is great news for everyone.

Projects will not need to wait for ETH 2.0 to arrive to start scaling today.

And it will be much easier to migrate when ETH 2.0 is finally live.

Flying Jack:

That's really wonderful.

Xin:

plus sharding didnt bring too much scale power.

Alex Gluchowski:

Not only that.

Sharding has a fundamental problem of making the smart contract calls between different shards asynchronous, which would break seamless composability.

Atomic composability is the Holy Grail of DeFi.

Xin:

agreed, bringing in a lots complex problems

Flying Jack:

Can you tell us about the different types of Layer 2 present right now?

Alex Gluchowski:

The family includes: Payment/State channels, Plasma, Rollups (optimistic and ZK flavours), Validium.

Flying Jack:

I think Rollup is currently the most discussed solution, what's so special about it?

Alex Gluchowski:

Rollups have two very important properties:

1) they enable generalized scaling of arbitrary smart contracts among many participants,

2) they are designed to operate in a completely trustless manner, meaning that users should, at least in theory, be able to recover their funds without having to trust operators of the rollup in any way.

In other words, this technology provides the experience closest to what users are familiar with on Ethereum.

Flying Jack:

Can you tell us something about zksync, what‘s the difference between zksync and other zkRollup?

Alex Gluchowski:

zkSync is a ZK rollup — the rollup with the ultimate security properties. ZK rollup doesn’t have any game-theoretic assumptions, and (unlike optimistic rollup) it’s security is not capped.

There are very few ZK rollups on the market right now.

I'd say that zkSync is the one with the most emphasis on UX and decentralization.

Flying Jack:

Do you think there will be any problem left out in the ethereum ecosystem after all kinds of Layer2 solutions come online?

Alex Gluchowski:

The main problem in my opinion could become the fragmentation of the ecosystem.

Seamless composabilty is only possible within a single L2 solution, not between different L2s.

I think that it will just lead to most protocols consolidating around very few L2 protocols.

Flying Jack:

How will Layer2 projects be affected after the PoS chain of Ether 2.0 comes online?

Alex Gluchowski:

A great thing is that all dapps that have migrated to rollups will continue their operation as usual, without any need to do migration work. The only thing which will change is that they will enjoy higher throughput and lower transaction costs.

Flying Jack:

What are the potential cooperation chances between exchanges and layer2 projects?

Alex Gluchowski:

L1 cannot accommodate millions of new users, they will all have to go directly into L2 networks. Of course those users will need on/off-ramps and will want to trade directly from their L2 accounts, which is a great opportunity for exchanges to extend their user base.

Xin:

I think this is what we trying to figure out. Integrate Layer2 will help users save a lot of gas fee.

And in the exchange side, I think we spend a lot of money on collecting eth or other erc20s from user’s address.

that could be a huge cost

Alex Gluchowski:

Absolutely

Xin:

same happens in the latency

Flying Jack:

Yes, that will help a lot for our users and we can also expect to cut down the delivery time also.

Xin:

in general, i think the UX will improve to another level.

Alex Gluchowski:

Especially when most wallets natively integrate L2.

Xin:

will be a network effect

Flying Jack:

Xin, This question is specially for you, what's the investment strategy in layer2 and ethereum ecosystem?

Xin:

I think we’re pretty sure that the Ethereum ecosystem will scale out to the a new layer, end-user applications will migrate to layer2

different apps chose different layer2 networks, assets, bots, cross-chain bridges, large amount txs remain on layer1.

But I think there will not too much same layer2 network will survive if they uses the same solution, such as rollups, plasmas. Same thing happen in public chains.

So I think we will try to find out which is the best, and invest in it.

Flying Jack:

Can you tell us how ZKsync would revolutionise Layer 2 Technology?

Alex Gluchowski:

Well, we will build a network without compromises. Developers should not have to choose between security, throughput, decentralization and usability.

In particular: we will marry Solidity and ZK rollup.

It is very important to migrate existing smart contracts easily.

Flying Jack:

Can Layer 2 solutions improve security aspects as well?

Alex Gluchowski:

I don't think you can improve security compared to L1: a house cannot be stronger than its fundament.

But you can very well destroy it if you pick a wrong L2 approach.

Xin:

i think zkrollups has the same security level to layer2

others will less secure than layer1

Flying Jack:

I guess privacy is another issue which is highly debated nowadays, can Layer 2 solve it for Eth?

Alex Gluchowski:

I agree with that

Yes, privacy is a huge topic

Xin:

i think layer2 can serve as a private sidechain

Alex Gluchowski:

It is very expensive computationally, which leads to a problem: you really need a lot of users of private transactions for them to be effective at all.

But if transactions are expensive, you will have a situation like in Zcash, where only ~5% of all transactions are shielded.

Xin:

but swap eth to zcash is not easy——Alex:Of course, because they are on different chains.

Alex Gluchowski:

ZK rollups are a break-through technology to achieve privacy, because they can bring the costs of shielded transactions down to the level of oridinary ones.——host:That will be huge achievement

Flying Jack:

Hmm true, but with the multifold increase in onchain transactions we can also expect private transactions to increase.

Alex Gluchowski:

But a ZK rollup is on the same chain as Ethereum, so you can use any assets available on ETH.

Xin:

yea, i think what users want is a general solution for all eth assets. but its another topic

Flying Jack:

Thank you so much Xin, Alex and all Huobians for taking part in this very engaging AMA.

Due to time constraints, many questions couldn't be answered. If anyone has more questions or feel that their previously asked questions need to be answered, please tag Xin or Alex they would definitely be more than willing to answer all the questions.

    Adapted from: Executive editor: 李萍萍
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