Rhythm NEXT | dialogue Celer lianchuang dong foam: not the etheric fang Layer2 2.0 is empty

With Ethereum Layer 2 expansion in full swing, Layer 2 Project & NBSP; Celer Network was also welcomed by the community and became the guest speaker of the 11th session of NEXT series of activities jointly organized by Legally Blockbeats X. The topic of this issue is "Talking Layer2 again, Celer's new opportunities". In this event, Dr. Dong explained the status of Layer2 and Ethereum in detail and vividly, and predicted that the future DEFI market is expected to reach trillions of dollars.

If you're not familiar with Layer2, this conversation is worth listening to.  

Host: Welcome to the 11th NEXT event. I'm very glad to welcome Dr. Dong to our new NEXT studio. The theme of this episode is "Talking to Layer2, New Opportunities for Celer Network".

Dong foam:First of all, I'm very pleased to be here to talk to you about the latest progress of our project. In fact, Celer was born in 18 years. Before that, most of our co-founders were living in Silicon Valley. I was an undergraduate in China Jiao Tong University before, and later I started a network security company during my doctoral study in the United States. Veriflow acquisition.

After that, I organized blockchain education with several co-founders, including our CTO and other students in Silicon Valley. We discussed the core issues in blockchain, the technical problems to be solved and how to make the blockchain technology be applied in a large scale.

In this process, at the beginning of the year and at the end of the year, there came the idea of Layer 2. At the time, Layer2 was a relatively new idea or the only direction of expansion on Ethereum. Because at that time the only direction and you see more Layer2 direction, or the lightning network payment is very simple network architecture.

CELER was also the first network to propose and implement generalized state channels. We felt that to solve the scaling problem, since Layer1 was ultimately capped, we needed to make a faster execution layer or computation layer. So that's why we're doing Layer 2.

Host: I think Celer is a little different from other Layer 2 protocols. Celer is doing more circling actions, such as working with enterprises and game companies.

Dong foam:Yes. We believe very strongly in technology, and the whole blockchain technology we think is really capable of bringing the whole so-called financial activity, and then the value transmission network, to a level playing field.

We want to develop the blockchain use case, and in the process of developing and taking blockchain out of the loop, we have done a lot of different things based on our own technology. I tried to work in the game industry.

Why choose a game industry like Fair eSports to experiment with technology? Because of the technology of state channel, it is very suitable for high-frequency interaction and frequent payment between people. In such a scenario, the advantages of state channels are the greatest, which is why we are going in such a direction as eSports.

Our total user base is now in the millions, and that's just in the U.S. The number of active users is also very high. This is the kind of work that we've tried to do "outside the circle" before, but our core goal is still to get more people using blockchain.

Host: Next, let's talk about the theme. Recently Celer launched its latest product, Layer2.Finance, which aims to "scale in situ" the application protocol. What is "scale in situ"?

Dong foam:To answer this question, we have to explain what is not in situ expansion.

Now there are two directions for expanding the capacity of Ethereum or Layer1: then the first direction is that we make different public chains, which are already blossoming. The other direction is to build Layer 2 chains on top of Ethereum. Regardless of the type of scaling solution, applications need to be migrated from one chain to another.

However, this migration actually brings a huge cost, one is the cost of user migration. You need to have assets on each chain, and then your assets have to move from one chain to the other, and that's a cost drain. The second problem is the so-called readability and composability issues that arise when protocols are not transferred to a Layer2 at the same time.

So let's say we're assuming we move one protocol over another, will anyone use it?

For example, we moved Maker from Layer2 to Layer2, which nobody would actually use. Because once you generate DAI, it can't be used in a Money Market, then this is a major problem. It's impossible to say Layer2 is here today, the whole DeFi ecology is here tomorrow, it's going to be a long process.

Second, even if the migration is complete, there is still a problem. It's the flow splitting, you have to do bridging and so on. Celer previously extended the existing state channel to enable fast bridging between Layer 2 and Layer1, between Layer 2 and Layer 2, and even between Layer1 and Layer1. But I do not want to see more liquidity fragmentation and fragmentation.

In this case, we would like to address the DEFI expansion. The most practical use of DEFI for everyone is to provide liquidity in a variety of ways to generate revenue, which seems to be high. The problem with Defi right now is that it's not really a good way to get the majority of users to use one or get the benefit of one, because the transaction fees are too expensive.

This is from the technical and asset efficiency aspect, we think the biggest problem that such DEFI ecology faces now. If we think of this place as a city, and we want to get to different agreements, the only way now is to take a taxi, and it's a very expensive taxi.

What does Layer2. Finance do? It is to establish a public transport system in the city of Defi. Do the DeFi bus company, do not let every user to hit their own private bus, we are all the user mobility from Layer1 to Layer2 to migrate to a similar bus system. Users of different Layer2 systems want to interact with the Compound protocol. Assuming the bus to the Compound leaves every four hours, all users who want to use the Compound protocol can wait for the bus to depart within four hours and be pulled away together.

This is equivalent to sending a single transfer request on Layer1, aggregating all requests that want to allocate funds to the Compound, so that everyone can share the cost of the transfer, thus reducing the overall transfer fee.

Why to say it is in situ expand capacity? That is, we can see that in this process, we pull the user to Layer 2, then aggregate the requirements at Layer 2, and then move the requirements back to Layer 1. During the whole process, the DeFi ecology and protocol were not moved and did not migrate to another chain. So it's called in-situ expansion.

Host: So basically the user is still on the Ethereum mainchain and doesn't need to switch to the Layer2 network, right?

Dong foam:Right, in their experience, they don't have to cut the network from Layer1 to other networks, but in the process they do have to sign some messages, and that signature actually initiates a transfer on Layer 2.

Host: If we use the example of the bus system, how long does the user need to "wait for the bus"?

Dong foam:That's a good question. In theory, if we go downtown, more cars will come because there are more people going, but if you go to a remote place, fewer people will come and there will be fewer cars. So it really depends on the protocol that you want to transfer.

Host: Why does Layer2 have so few users? What problems does Layer2. Finance solve in the Layer2 space today?

Dong foam:I think there are several aspects to this thing.

I don't know if you've seen this data, but we've seen the whole Defi ecosystem before and it's around 40,000 users a day, what is that? It's already the 500th most popular APP in the App Store in the US, in the category of games -- casual games, something like that. The overall DEFI ecology is relatively small.

Now what do I have in Layer 2? The first is the state channel, from our point of view, from the game and other ecological use is quite a lot. With the exception of state channels, the whole technology is still in its infancy.

The Layer2 technology has been in development for a long time, but it's only recently that it's really matured and moved closer to large-scale migration of Layer1 applications. The major Rollup chains haven't been launched yet, but they will be launched in the middle of this year or in the mucosa. But from my point of view, I'm optimistic that this kind of application will bring a lot of users in the future.

Finance will first choose Optimistic Rollup to simplify and accelerate the iteration speed, and then plan to move to ZK Rollup. Is it because ZK Rollup is better than Optimistic Rollup?

Dong foam:The Rollup we use for layer2.finance is a specialized Rollup. It doesn't have to be this full time, all-around Rollup that supports all of these arbitrary virtual machines. Optimistic Rollup is obviously very fast. The advantage of ZK Rollup is that the wait time is shorter.

The ZK Rollup also has problems. The problem is that the ZK Rollup is expensive and relatively slow when there are few users. Therefore, ZK Rollup is uneconomical when the number of users is small, while Optimistic Rollup can help accumulate users when the number of users is small.

Host: At present, the head application starts to fight Layer2, and concentrates on several Layer2 technologies. Will this lead to congestion of Layer2? Can Layer2. Finance solve this problem?

Dong foam:If we were to put all of our apps in one Rollup, we would have scaling problems. How much volume can a Rollup expand? Like Optimistic Rollup 100 times is the limit. The ZK Rollup may be higher, but limited.

In this case, a single Rollup architecture to host all applications is simply not feasible. Rollup is a preview or a step in the future where there will be multiple rollups running on the same technology and on the same project.

In this process, we will inevitably encounter the so-called ecological fragmentation, liquidity fragmentation and user fragmentation. And then there's a way to bring these separate states together. And this is where the state channel is going to play a little bit more light and heat.

The technology of state channel itself is capable of high-speed, inter-chain interaction and cross-chain operations. That's what we're doing right now at CBridge.

Host: Security is the top priority for financial applications. How to ensure security after the expansion of Layer2.

Dong foam:Security is something we take very seriously and we are aware of the risks involved. When we look for the audit company, the audit company may not even know what you need to do. We have both the security of Layer 1 itself or the traditional smart contract, and some special security issues on Layer 2, such as node disconnection, online and so on.

Because the Layer2 system is relatively new. Everyone in this industry is not done in practice to test the safety and situation of the entire system. We can do our best in all aspects, such as the entire internal Code Review, and at the same time, we will try our best to find our security audit partners to help us to ensure that there is no problem in the whole security audit.

But in charge, the protocols on Layer 2 are highly experimental. But it must be gradually polished and mature, and then gradually to build this confidence, in fact, everyone will be such a process.

Host: Gas rates have been reduced a lot recently. With the help of Layer2 and Flashbots, is the POS+ sharding route of Ethereum 2.0 still necessary?

Dong foam:It is necessary. Of course, Flashbots, whose MEV area we think is very interesting, can be used at Layer 2 in a very large way. We're also doing some MEV stuff, and there's a very important point in MEV to do block auctions. It's who should put out the block, and then how much should the person pay him.

Is there any need for Ethereum 2.0? We went back 10 years to 2010, we were 3G phones, and there was a saying that 3G was fast enough, we could chat with pictures on FeMessenger. Why are we using LTE and 4G, and then things like Douyin came along in the 4G era. So I think there is no end to these human needs, as long as there is a spare space, it must be able to fill with new needs.

As for the expansion route, will Layer 2 do very well if it goes on forever, or will it satisfy our demand for capacity expansion forever? That's not true.

When you first learn about Layer2, you have a very straightforward idea: can you add a Layer2 to a Layer2, add another Layer2, and keep adding it forever and then you can expand it forever? Not really. In computer systems design and computer research, you're talking about trade-offs.

Layer2 gains speed by building multiple layers. But the evil of computers is that you have to give them something in order for them to give you something in return. You're in Layer 2 architecture, you're giving the devil the complexity of quorum, you're increasing the complexity of the whole quorum, and then Layer by Layer, you're giving more and more. At some point, the extra speed you get back just isn't worth it anymore.

So a Layer 2 structure cannot stack on top of each other indefinitely. So Ethereum 2.0 is going to come up with a way to solve this problem. I'm going to do a Layer 1 data shard on top of Layer 1, not that I'm going to run a program on the shard, but that each shard is core data that can store more Layer 2 data.

In fact, a pure group scaling is implemented by sharding, that is, we target the whole scaling to the storage scaling, so that the storage scaling can make the Layer 2 run better on the Rollup or on these shards. The two are indeed complementary.

Host: The idea that Layer2 is a reprieved solution and will eventually become useless after Ethereum 2.0 is migrated is not true, right?

Dong foam:That's not true.Ethereum 2.0 is an empty city without Layer2. 2.0 is actually the foundation for a better city,More wasteland was opened up. So whatever you grow in this empty space, it really depends on Layer2.

Host: Layer2. Finance test network has been online, next week can online main network?

Dong Mo: At present, it should be launched sometime next week, but we need to confirm the overall audit situation with our audit partner, and then we will gradually Rollup the way of Rollup. As the number of users increases, we will gradually open more content.

Host: Can the BSC's Etherium-like chains really pose a threat to Ethereum's status as the strongest ecosystem?

Dong foam:We go to Layer 2 wherever we need it. We have seen the greatest need for Layer2 on Ethereum, and we will take care of the needs of other public chains if they really need to be used on a large scale in the future.

Host: Since the rise of Ethereum's Gas fee, many community users have complained about Ethereum. What do you think of the new Ethereum?

Dong foam:I think this is the way to look at this problem, what is the core competitiveness of a public chain, is it EVM? Evidently not. Anyone can do EVM. So is it completely distributed? No. Having enough distribution for end users might be enough.

I think there's one thing that we can all agree on: innovation.

Where's the innovation? Where are the people, the community, the developers and the motivation to innovate? I think that's a very central point. For so long in the past Ethereum, or the entire ecology of Ethernet, whether it's in terms of the entire surrounding ecology, developer ecology, developer education, etc.,Ethereum has developed a very strong core of innovators.

Innovators are at the heart of what really drives and fulfills demand. From our perspective, of course, we would like to see more and more Layer1 innovators, innovating across different chains.

As far as we can see, the innovation on Ethereum is relatively strong.

Host: What is your estimate of the magnitude of users and the impact on ecology after the Layer2. Finance is launched?

Dong foam:We hope not only to bring Layer1 users to Layer2. Finance, but also to bring more users outside of the circle and even medium and long tail users (10,000 to 100,000 yuan) into the Layer2 ecosystem. We think that means that in the process of constantly developing protocol access, we feel we can dramatically increase the number of daily active users across the Ethereum ecosystem.

Host: So ina sense, Layer2. Finance is for users that you just talked about 10,000 to 100,000 dollars, but it's not really for power users?

Dong foam:If Layer2. Finance is a public transportation system, we have a large number of passengers and a large volume in the public transportation system. But there are people who fly on private jets, and there are people who don't think it's expensive. But our real hope is that DEFI is an open financial system that can really help people in need.

There's a joke in the industry that says,DEFI is about making the banking experience available to people who don't have banks. But in fact now DEFI is making people who are already in the bank richer. So we think this is contrary to the spirit of blockchain at the beginning, we hope to have some historical mission and historical significance.

Compere: When the ecology of DEFI is more mature, the scale of the whole ecology is about what scale, the number of people, the amount of capital and the market value.

Dong Mo: I think the whole DEFI ecosystem, compared with the current capital market, can reach the order of trillion.

Host: Does Celer have any new plans in the near future?

Dong Mo: Our plan has always been open, mainly in preparation for the launch of Layer2. Finance. This is the first release, and we hope you have the right expectations for this first release. We will also support some new protocols in the future, including some architecture migration as I mentioned earlier.

Host: OK, thank you Dr. Dong Mo. That brings us to the end of our NEXT question and answer session.

Dong Mo: Thanks also for Rhythm Blockbeats and everyone's attention. I hope you can give it a try once Layer2. Finance is online and there will be a time to help you pay the gas cost of moving from Layer1 to Layer2. Finance.

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