it's early days i expect layer twos to be the biggest thing in crypto going forward
on ethereum and i expect you know challenges to be made from different kind of ecosystems out
there definitely when tokens come into the freight so in terms of like my top
kind of like layer two protocols today it would be
hey welcome back everybody to altcoin daily anthony sasano the man the legend eath bull
an incredible educator in the cryptocurrency space he hosts the daily way a weekly show linked below
everybody should go subscribe anthony just did a great podcast with us about the merge this one's
all about layer two for ethereum we're talking immutable acts loop ring arbitrary optimism
meters all that stuff polygon anthony sasano how are you doing today hey guys thanks for having
me back on super excited to talk about layer twos yeah yeah of course man where should we
start with this where should we start like is it appropriate to ask like what do you think
is like the number one eat scaling solution well can i just maybe we start will eth need
l2s after the merge can you explain how that fits into the ecosystem yeah yeah i mean layer twos are
critical to ethereum scaling journey basically the good way to think about it is that ethereum
itself is being engineered to uh be as scalable as possible for layer twos so essentially you know
after the merge as i mentioned on the last video we did uh for end users nothing really changes
their uh because of the fact that we don't have things like sharding implemented but uh you know
the merge sets the groundwork for all of that so after the merge uh or you know shortly not shortly
i mean depending on your time frame here but like six to five months after the merge we hope to have
the first iteration of sharing introduced now what this iteration will do is that will give
more block space for layer twos to take advantage of which would make layer twos more scalable so
yeah i would say the tldr is that layer twos are absolutely critical to ethereum scaling journey
without them uh the ethereum scaling roadmap with ethereum roadmap would be a completely uh it would
be incomplete and users wouldn't have any value out of it because the fees would be
very high for them so what do you think are the are the top scaling protocols in the space today
so it's still very very early days for these scaling protocols if you go to l2beat.com which is
a great website that tracks all of the traction of these sorts of things in terms of tbl uh arbitram
is the leader right now with over four billion dollars in tbl uh and if you go you can visit like
rb scan and optiscan as well uh they kind of like show you different stats around unique addresses
on these things daily transaction throughput all that sort of stuff so in terms of kind of like
what has the most traction today arbitrary is definitely the kind of like leader there in in
that but uh there and albatroom is what's called an optimistic roll-up and then there are other
kind of ecosystems out there that are like zk roll ups such as kind of like stock net which is in its
very early stages but they're making progress uh zk sync as well which is making progress people
may have used that if they used bitcoin to donate there was an option to check out with zk sync on
there but yeah as i said it's very very early days still there is no clear winner i would say
in terms of like what has the most traction what will have the most traction going forward
but right now it seems arbitrary is the leader in that space but you know it's funny because
like albatro may be the leader today but it could be very easily kind of like uh uh you know bunny
hopped over especially if one of these l2s kind of like starts using their token or does a token
for incentivizing usage we've seen how quickly that can spin up an ecosystem so i would say
yeah too early to tell who's going to be like a long-term winner but i think in terms of like
who's going to be strong long-term you have uh you know the arbitrage of the world you know
your optimism zk sync stockwear uh and a lot of people like immutablex use starquest technology
i think loopering is really great they're their own ecosystem but they're very great and polygon
of course has a bunch of different layer two teams as as well out there and um and yeah so
i would say the front runners there are some forks of optimism like medicine bobber network
which seemed to be got gotten a bit of traction as well but i like bucketing kind of like um
them into the optimism family just because they are forks of optimism instead of their own kind
of like a construction there and as a guy who's in this every day talks about eath every day
what is your preference or what do you see doing the best the optimistic roll-ups like an
arbitrarium or the zk roll-ups like a loop ring or does that not matter i think it's a spectrum
depending on what you want to do so right now the optimistic rollups allow you to do anything
you can do on ethereum layer one they are what's called evm compatible so uh the applications that
exist on ethereum layer one can easily redeploy to ethereum layer two with arbitrary optimism
and have the same experience for end users just with cheaper fees and faster transactions so
you don't have to change anything you still use metamask you just change what's called your rpc
on metamask which is very very easy to do and then away you go on these networks like obviously you
have to bridge in assets as well people may be familiar with that uh but once you do that you're
ready to go whereas with some of these um zk roll ups as they exist today such as loop ring they are
much more limited today they're not going to be in the future but today they can only do things such
as kind of like swaps right simple swaps and stuff like that they can't do the broad spectrum of what
you can do with ethereum layer one today but there are initiatives such as the zkvm initiatives from
various different teams out there that hope to basically make it so that the zk roll ups are
then evm compatible as well now what people bring up as kind of like an issue or main difference is
that with optimistic bulbs there is this kind of like seven day withdrawal delay so if you were to
bridge out your assets directly from the optimistic roll-up it would take seven days to
do so because that's just how how it works and i could dive deeper into that but i want to explain
that that seven day withdrawal delay has actually been completely alleviated by these bridge
protocols such as hot protocol and connects that allow you to instantly or near instantly going to
kind of bridge out of these things so you don't have to wait for that seven day withdrawal period
you can basically just swap using uh the liquidity of of hot protocol for example connects and they
take on that seven day withdrawal period and they take a small fee for doing so so that that i don't
foresee being an issue uh and then with kind of like zk roll ups you also have uh
they they kind of like have um have a faster withdrawal period i think immutable x is 12 hours
but but that can actually like loop ring has it like much shorter than that i think loop ring has
it i can't remember the last time i looked at this but you know maybe a couple minutes or something
like that something something very short they were actually aiming for within one ethereum blocks
for 14 seconds so there are there is a spectrum here uh but as i said like there are trade-offs
to each solution there are there are things optimistic develops can do today very very well
versus what zika rollups can do and in terms of cost zika while ups uh depending on what
they do can be cheaper today but once these other upgrades come in such as sharding and
um you know for these other upgrades they're called ethereum improvement proposals or eips
optimistic roll-ups will actually be as cheap if not cheaper than zk roll up so i think
at the end of the day it just comes down to how well these teams can build it out to make the
end user experience seamless as possible like can the fees be pennies on the dollar how fast can the
transactions be and i think withdrawal times aren't actually going to be an issue because
of the fact that i don't expect long term any users to want to go back to ethereum layer 1
because it'll be expensive to go there there actually won't be much to do there everything will
just be on layer two uh because layer two will be where a lot of new protocols get deployed there
are actually layer two native protocols that don't exist on layer one at all lyra finance for example
that's built on built on the synthetics ecosystem on optimism that doesn't exist on layer one at
all that was deployed straight to layer two you do everything you want to do on there and there's no
need to go to layer one uh at all in that case and there's a there's something on arbitrary called
uh magic which is part of the um the treasure kind of nft marketplace that doesn't exist on
layer one ethereum so you know an immutable x for example isn't a layer one thing it's just a
layer two marker place and and loop ring you know they used to be on layer one but they don't have
anything on layer one anymore i don't think it's just all layer two so i think uh you know users
won't even need to withdraw unless there's some security issue with with one of these layer twos
uh which is which is always an option but in the in the kind of like steady case everyone
will just be living on these layer twos there won't be any need to withdraw back to layer one
and when do you think that will happen like when does the the regular user reap
the benefits of all of these layer twos like i go on open c and the fees are high obviously
fees high underneath are mean how when is this going to be uh solved for the average person
so so openc would need to deploy their marketplace onto you know arbitrary optimism
uh uh themselves which they haven't done yet they seem to be very slow in this department as i said
there is another marketplace on arbitrary called uh treasurer uh which is which is magic they have
their own token and stuff like that and there's also you know looks rare which i'm sure he's
looking to deploy to these things as well um but that's what it would require i know i know um uh
opencv exists on the polygon pos chain which isn't technically a layer two as
is typically known but yeah it exists there uh but yeah that's what kind of like what
would be required there but in terms of what users can do today i mean arbitrary optimism
they seem to have all of the major protocols that already exist on ethereum layer one they have the
uni swaps they have the arves of the world and you can go on there and basically do everything that
you can do on ethereum layer one uh already and in terms of kind of getting on there it's you can
bridge from like binance to arbitram right now there's a few other exchanges that support this
um i think quality supports optimism as well so the support's coming for that or you can bridge
from layer one ethereum which is more expensive because you have to pay the layer one fees but
yeah today i mean there's no waiting you can go and play with these things today and they have
a lot of things to do on them as well what are your thoughts on the polka dots the cardanos of
the world do you consider those just glorified l2s i would say that polkadot specifically looks
a lot like uh you know the original ethereum the design which was uh basically having different
shards that people would use and go to and they'd be like different chains essentially which is not
what the sharding design is today um i don't know like i don't want to single out any one project
i feel like a lot of these other layer ones are taking their own scalability approach um you know
some people may have heard of the term monolithic versus modular scaling approach approach where the
monolithic is basically trying to do everything at layer one which is what something like a solana is
trying to do i don't actually think that that's a long-term sustainable model and we've already
seen the problems of that where the network becomes congested and it kind of falls over or
transactions get dropped where you know you can't actually get your transaction in it's it i mean
and then people would argue that ethereum is the same except it's just high fees instead where if
you know if the activity network activity is really high the fees become hundreds of dollars
that actually bars a lot of users from from using it and i would i would agree with that and that's
why we we're scaling via layer 2. um and then you know you have other ecosystems out there
as well like i mean avalanche right now you know the funny thing about avalanche right now is that
they're just they just forked ethereum essentially uh and basically have an evm compatible network
uh just with their own kind of like validators and their own consensus mechanism and things like that
but they're trying to do something called subnets and these subnets just look like side chains to
me they don't actually share in the avalanche security they're their own kind of like separate
thing that can kind of bridge into avalanche so there is a broad spectrum of things happening but
i think in terms of like what is the best way forward it's like the modular approach where
you have a theorem layer one is kind of like a security settlement layer as i like to call it and
and then you have like ethereum layer two as an execution layer where all the heavy work gets done
all the transaction processing gets done there and then we just basically you know compress or roll
up these transactions and put them on on layer one ethereum for security but we get the benefits uh
of the kind of like cheaper transactions at layer two so yeah i mean i've looked at these other
chains i've studied them i think i don't know i i don't think a lot of them actually have a
bright future ahead of them because a lot of them advertise cheaper fees well what happens when that
becomes a commodity what happens when ethereum you know offers just as cheaper fees as these other l1
with ethereum level security which is going to happen in in the short to medium term
i don't see the value prop there and other people will argue you know maybe some people want their
own sovereign chain where they have their own kind of like security their own validators you
can do that on ethereum as well like arbitrary introduce something called any trust change which
is their version of a side chain you can already do that using like ethereum native infrastructure
so yeah i i don't know i i feel like a lot of these other chains are gonna have to rely on
how much money can be thrown at it to attract developers and users to it which is what i see
solana doing you know as much as i disagree with solana's architectural design i think
they actually have a very big backing in terms of like the money behind it especially something like
avalanche uh and they probably keep them going for for a while but undeniably in the long term
i i think ethereum is kind of like scaling roadmap in terms of kind of the modular design having let
layer twos be expressive and things like that is gonna win out um these other layer ones will
the thing about crypto networks is that they're like cockroaches as long as they have like a small
community behind them they they can live right as long as no one forgets about them they can live
and you know the funny thing is even the old kind of quote-unquote ethereum killers from 2017 such
as neo and eos they still have relatively large market caps and they still have a small community
that seem to care about them but there's nothing happening on them so i think you know these other
layer ones the way i like to look at them is like what what kind of mindshare do they have like how
many developers are building on top of them over the long term like short to medium term it can
look like they're doing well because maybe the token's gone up you know in a speculative mania
or maybe there's a bunch of developers just trying them out and saying you know is this
actually something that we want to play with but if you look at like the long-term arc of things
ethereum has been around for a very long time it has the most developers still at both layer
one and layer two and it just keeps growing from there so yeah i i'm kind of like bearish on most
of the other layer ones to be honest if you're bullish on cardano or solana guys comment below
anthony's anthony's down to hear you out okay yeah yeah i'm always down to hear all the other kind
of takes on this like people like to call me if you're a maximalist sometimes and it's like well
look guys if you're going to call me that at least give me your ball case for these other change at
least prove to me that these other chains have merit uh and then you know i'll you know i'll
kind of like take that on board and we can have a debate about it like i'm always active in the
daily grade discord channel people want to join there and and call me out on it there's actually a
channel there called other change you can discuss other changes with and i just every time someone
tries to discuss it with me i just say to them like okay well you know your chain has cheap
fees but like ethereum has cheap fees right now on layer two and it's gonna get cheaper over time uh
what happens when everything has cheap fees like what is the value prop of your chain over ethereum
in that case that's kind of like my broad question so always open to be challenged on that for sure
do you think it's inevitable that you know um protocols that don't have a token right now like
arbor trump optimism launch a token because like metis just forked optimism they have their token
and you know i'm sure optimism's looking at them kind of like killing it with total value locked
and everything yeah i i have the thesis that everything well almost everything in crypto is
going to have a token especially the layer twos like i i don't see a world where they don't have
a token to be honest um and i should disclose here that i'm an investor in a lot of these l2s as an
angel um but i don't get like any information on like what's going to have a token or when or
you know when it's going to come out and things like that um but my thesis always with every
project is that it's going to have a token every tokenless protocol will have a token um simply i
mean there's a there's a bunch of reasons for that i think a token can be used very very well if it
makes sense in in a protocol um but like a lot of the time you know protocols will do a token
because it's just an exit for their investors for the team it's a way for them to monetize stuff
like that but i think for layer two's tokens can make a lot of sense as something to uh to stake in
order to capture fees from look for layer two free revenue from the layer two and basically
make a profit like that uh and governance and stuff like that uh you know i can see that kind
of like happening but yeah my general thesis is that everything will have a token so if you want
to farm an airdrop and things like that that's probably a prudent thing to do use these networks
you know use the different protocols that don't have a token yet uh that might you know might pay
off later down the line because we've seen some of these drops are very very lucrative right uh
depending on kind of like what what the what the protocol does anthony my final question and just
sort of an insulation of this discussion is give me your top basket of six that you like right
now i know you said way too early anybody's game but what do you like right now i i like the ones
that are building their own technology instead of just forking another kind of project right there's
nothing wrong with forking but i feel like if you fork another project you inherit all of that
project and then you need to understand it as well as the original team does which you won't right
the original team will understand their protocol better than the forked team will so in terms of
like my top kind of like layer two protocols today it would be you know arbitrary optimism zk sync
stockwear polygon uh it's kind of like the top five they're the front runners in my mind and they
have a bunch of projects already building with them like polygon has you know three different
zk teams right now and it's not just the zk stuff that they have they have a bunch of other l2s as
well like nightfall which is like a hybrid um and they're always announcing new stuff out there and
then stock where you know immutable diversify use their technology right uh and but if i and and you
said six like i know i named five i would say loop ring is definitely up there in terms of like what
they're doing you know they have a partnership with gamestop to do an nft marketplace they have
their own ecosystem they have loop ring pay they have a bunch of different things happening there
and i think there is a segment of the community that talks about them a lot and there's a there's
something that doesn't they seem to be forgotten about these conversations i think
and i think that's because they're kind of like their own ecosystem people kind of you know see
okay well it already has a token you know these other things don't have a token yet i'm gonna
gonna show this just in case you know it does have a token and i can i can get more upside there but
i i think loopering is definitely you know in the top six there for sure um i i in terms of ranking
i don't really rank them as i said it's too early to say um but those are the strongest teams right
now on the latest ecosystem and there's going to be more don't get me wrong there's going
to be more that come out of stealth they just come out of nowhere and they say hey you know
we built this thing you know has all this awesome technology and people are going to go crazy for it
uh but you know it's it's early days i expect layer twos to be the biggest thing
in crypto going forward on ethereum and i expect you know challenges to be made from different kind
of ecosystems out there definitely when tokens come into the phrase way as well anything else
that our audience needs to know on layer two's anthony bridge into them use them don't just
listen to us talking about them right like get in there use them see what all the hype's about right
experience the cheaper transactions experience the faster transactions uh and if you you know just
want to bridge into one or two arbitrary optimism is probably the best right now just because of the
fact that they have uh the most to do on them and you won't be bored on them and you'll have like
all the apps you know and love on ethereum layer one so yeah just go and do it like that's that's
always what i say to people just stop listening to me ramble on about them go and use them
get the value out of them uh and you'll see what all the hype is about awesome thank you so much
for coming on the show today anthony big fan of your show the daily gray guys everybody go right
now subscribe to the daily grade down below and let him know that you found out about his
channel from altcoindaily but thank you anthony for being on awesome thanks for having me on guys