ZK, past, present and future ZK - Edi Sinovcic | Shard labs, SpaceShard, Nimbora

hey everyone first of all I want to welcome you for the second edition of eat [Music] Belgrade as an opening speaker we have a special fan of ours and a special guest Eddie sinovic one of the people who was part of the ethereum foundation a co-founder and or a founder of a space Shard and a founder of nimora so we have an amazing topic today regarding the ZK so for all of you here curious to hear the Eddie's Pat Ed his journey and Ed's Knowledge and Skills you are in right in the definitely right room so without further Ado I want to give the mic to Eddie so please give it up for Eddie you can be a host on those like American Roo things I think uh gmgm all uh so yeah just like for the temp to check who here Works in you know something related to ZK field okay yeah not that much people so how many of you have heard about ZK here okay this is this is a bit better so yeah how many of you have used the ZK in production oh that's the that's what I expected because usually you know everybody uses ZK but you know it doesn't mean what you what you think it means so let's let's start with so like it's going to be a lightweight presentation for the morning just to kick it off you know more for the non zk's audience and so on just to give you all the overview of the stuff that's kind of what was happening in the past what's kind of like current and what we kind of expect in the future so you know just to kick off the things in the morning just like a bit on me although like the intro was really interesting I was a c Dev in etherum Foundation back in the day work mostly on on you know Sol in solidated team on stuff that's kind of sourcify and so on the idea behind that was to do automatic verification of smart contracts and so on but I have a had a brief Venture in something that's called zorres it's a toolbox toolbox for ZK SAR on ethereum it was kind of a couple of months and so on actually that's how I got in the EF and so on so like I kind of dig into the ZK a long time ago but didn't Deep dive into it you know too deep because five six years ago everybody said like yeah it won't mature anytime soon like it's like 15 years in the future and so on but no maybe you know they were wrong so that was that and then you know I when the D5 summer kind of started after the EF I found something that's called Shard laabs that to the St does kind of a bunch of Def related stuff the biggest LSD on polygon for example and so on but kind of always that ZK thing was bringing me back it's now the time to jump in it's now the time to jump in and then 3 years ago we started working with Stark net with starkware basically back then on the tool buing and stuff we wanted to Deep dive into the building dabs building defi on Stark and stack obviously there was nothing back then you know like it was pre-met and so on there was no things happening and so on and that's how we started we started helping them with a bunch of death tools and so on and you know that's one of the first serious Ventures and that's when like space Shar was founded and so on and space Shar to this day does a bunch of things related to ZK tooling and Dev tools Bridges and those kind of things and you know this all sounds smart this all sounds like a lot of like work and so on but I'm just a curious guy I'm Just Your Average DJ just goes around tests new stuff tries to build and someone tries to move kind of the the the kind of limits of it so you know it's nothing nothing too too fancy so when we when we think about when we think about you know the blockchain trilemma usually so hey can somebody explain me here what blockchain trma is does this did anybody hear about blockchain trma okay we have two friends somebody wants to try to help me with this okay great have we solved it though maybe we have with ZK but just for those who don't know basically in traditional systems what we have is secure and scalable systems they are not decentralized we have like AWS that we use we have microservices and so on like basically most of the internet is built this way it's a scalable and secure though secure is a question mark and so on and then we had this idea that we can build a decentralized system that is secure we had Bitcoin we had ethereum so we have basically our you know inventors of Satoshi Nakamoto and vitalic buttering building this but you know when when couple of people use ethereum on bitcoin that's fine it's not expensive and so War but when we want to scale on the global level well we have a small issue you know the cost of using it the gas cost and so one goes exponential and we had to Sol this so we're like okay let's build side chains let's build scalable and the centralized Solutions and then we've seen a bunch of like the 51% attacks with the POV we've seen a bunch of other stuff and so on so you know did we solve anything where are we with this if I say you that ZK solves this who would be who would have an argument that it still didn't or it won't we can have scalability of chain improving of chain to unchain we have we can have like multiple sequences improvers that to decentralize and canate this and obviously can be secure because of the math and cryptography so is ZK the Holy Grail well maybe with some caveats so like the current overview of zero Lage landscape looks like this so we have a bunch of kind of things that we can kind of do like we heard about all these general purpose rollups they're like a drops and stuff from like the big ones like Stark net ZK sync scroll and so on to others but they're general purpose which means that you can do any computation on all these chains in the past we also had like some specific ones like starx which is focused on specific use cases the cor core Crux of it is that you can do some computation generate a mathematical kind of representation of that code into into something like mat and then prove that mat on chain it's kind of like zipping the data zipping the computation on chain so you don't have to put all the state all the stuff on chain you can just P part of it it's kind of like when you zip with Ren RAR so on you put less data to it and that way you can scale you can scale the like layer one with this layer two strees and so on as you see there is a lot of kind of different approaches to this you know on the VM level on the kind of side of things so you know it's a it's a complex space from privacy to gaming and so on and what we kind of seen is we started with General computation layers and now we are moving slowly to more optimized you know use cases for a specific gaming privacy defy and so on any questions so [Music] far okay sounds good so when we Compare the numbers from the last year to this year we can kind of see here that still optimistic rollups kind of lead way do you see the screen by the way is it clear enough is it too too white I can read some numbers so basically like here what we can see is that the both arbitrum and optimism well kind of the majority of the elit like market share last year we talked about like 85% of the micr share and then we have some others basically change and so on and then this year we can see that kind of their market share is similar bit less maybe but you know it's still majority of the thing so what what this kind of means you know is EK here or is it the future are we kind of what on what level are we what do you think guys is ZK kind of the reality or just the thing of the future why are we still having just the optimistic cups in production with majority of stake that's that's a good one but why do you think like there is majority of the you know still the activity still of tvl and so on on the optimistic rollup instead of ZK which kind of is better Tech that is agreed by everybody in my opinion one of the main reasons is when you want to build something like a production R app or something into the rollup which is kind of infrastructure underneath you want something El St stable that worked in production for some time for years and you know that's alifi that doesn't move too much and so on it we ZK it's still moving a lot so I personally believe we need still at least two three years of mature it just a ification on the ZK stack for the big players for the deps for the users to actually use it and so on just when you compare the user experience of the optimism or arbitrum to I don't know Stark net Z sync and so on there is more delay usually uix like you know stuff breaks and so on so users don't use it and it's harder to build apps so if in my opinion ZK is still not the main thing it will be coming next years but we need stuff to aify we need stuff to kind of be mature to be stable to work into production for some time anyone who disagrees with this Sam Solan boys here obviously on that front there is this notion that we can build huge machines huge basically composable chain we can fit everybody into it unfortunately we didn't have anybody here who is opposed so I wanted to had a fire chat but yeah unfortunately nothing like that so this is on terms of theal we can basically see that in terms of tvl like optimistic rollups are still kind of the lead and kind of the main thing although we are slowly migrating towards the ZK and you know there is a lot of a lot of them on the transactions though we can see that in general L2 stack has been increasing a lot so here we can see like the ethereum and arbit room for example from the last year had run through 2 million to 26 million transactions in a week and then currently we have basically basically like the base is doing the 62 million and then arbit from 61 we just like we can see more than double the amount of transactions which converts to number of wallets being used you know and so on which means like the adoption is growing like really fast in that terms like the L2 stack is maturing in that terms basically the more activity and the scalability of eum is going through L2 so you know we can see a trend also in that direction obviously one of the things is also as somebody mentioned this is all centralized there is so many guard rails there is so many basically things that is still keeping this not a production ready more basically like alphas and so on it's not fully ready for production so yeah here we can see all the potential issues we have you know with the with rollups in the ZK particular so like when we think about you know what what happens in the future what basically are the biggest bottlenecks what kind of need to kind of do in the future basically to make the ZK the main thing make the ZK the main kind of engine of powering scalability of the blockchains or at least ethereum we definitely need the centralized sequencers so for those who who here knows about how like rollups in general works just a go step back okay sounds good can somebody explain me a bit what is kind of the difference between side chain like you know a blockchain and then you know a rollup [Music] for and so I call it trust me bro implementation because you know it it's optimistic it works until it doesn't and somebody challenges and so on but the kind of the key difference is you have this all the state all the activity happening on L2 and they just basically put the you know the the state is it a state diff on some Z rollups or is it like the full state they put it on L1 and so on and then somebody who wants to challenge it can come and so on but what are the incentives for that you know I think it happened once on optimism or R so you know you need to have this trusted not really trusted but you have to have third parties we check these things and so on for for that which is in this centralized kind of environment is kind of like far reaching because you like the the foundations of the companies that are running this rollups have this thing I'm not sure if you follow but L for example had outage two days ago and you know they have like1 billion dvl there so we're kind of like playing with fire in this kind of things because we have a production kind of ready tvl there like 1 billion plus and we don't really have a tech which is stable and so on imagine having a service in web 2 that dies from time to time and to the users like oh you know it doesn't work it reminds me of banks though you know it feels like that you know we don't want to work on weekends and so but I believe that definitely we can do better so thanks for the help like that that explained a lot so you know decentralization of sequencers and improvers is going to be one of the main kind of things here so we need to kind of like work on that and improve that for sure paration of proving is one of the things so when we when we generate kind of like proofs in in in the terms of the ZK the heavy computation happens on proving so we have something that's called uh optimistic parallelization I will go bit deeper now but you know it let me know if you can follow so like the the usual way how do you do it with transactions you have transaction transaction transaction in a rollup and then you let's say we had 100 transactions we can prove every 10 transactions one after the other and then we can do like these blocks of of 10 transactions so what happens I prove the first one and it works I prove the second one and it works I prove the third one oh I can do that because the execution is not valid and if I do that like 10 kind of proving in a par 10 blocks it all happens in parallel well you know the whole kind of proving fails because I can prove that third part in the middle that's why it's called optimistic realization but you know that's one of the first kind of things in the future we'll do better but that kind of speeds up the proving a lot comparing to everything else so yeah so that's one of the biggest kind of things how we can kind of improve the the proing side of things and so on and then the famous compossibility one because the issue with compossibility with these kind of things is it reminds me of sharding uh the road map back in the day so in the Shing gr up of ethereum back in the day what we had is we had Shard State and execution which means basically that we had multiple like we had one kind of the like Beacon chain and so on and we have multiple shards 64 back in the day when I was like you know DDF and so on and people gave up you know doing that why because it's hard you know you where where is the user where is the app happening where are all the things happening how does the cross Shard communication work and then we were like yeah let's do let's switch to you know rollup Centric road map we have you know dun sharding and all these fancy things and I'm like wait wait wait but this reminds me of something you know so what's the difference between like rollup Centric road map and you know like cross Shard communication and so on back in the day well it's better now we had like rollups are much better in this kind of things but still we have issues with communicating with this multiple rollups multiple shards and so on and this is the biggest Sero exploration so if Sun wants to jump into solving this problem you can probably earn a lot of money here so you know this is one of the potential things that you can definitely to jump in obviously ZK bridging or bridging in general kind of is a subset of this as current bridges are like more less on the optimistic level it's I'm on I let's say Stark net and want to bridge on ZK sync how it usually happens let's let's say with layer zero Wormhole whatever is the layer zero Rel layers received the message on Stark net with some deposited there then they like re relay is a backend basically they relay that message to the other chain as an Oracle and just give you the assets there which is also trust me bro approach because it's like you know it's like we have all these ZK chains zland and then we have a duct tape in the meantime so one of the things to solve this is potentially with storage proes or stuff like that but it's like too far from this topic so I won't go into that and then you know one of the most interesting stuff to me is in my opinion like with account obstruction and so on we kind of solve the management of keys with the pass keys on Bas who here use Bas wallet the new one you don't have to answer it's fine you know it's quite interesting like but the the way it works is a pass key so you go to the website you just log in there you basically create it with with your key and so on it just works and that's the experience basically we need to mass adoption you n neonics private keys and so on I see some couple of security faces here which will be like no but you know it can be a degrees of that but if you want simple adoption and soone we can do that with account obstruction so let's say that solved the management of private Keys M monics and so on what's the next Point here in my opinion guess when you think about it when you go to a normal website let's let's say some like you know I don't know what is what is here like used like a lot you know like some some basically website some you know news services or whatever you go there do you wait five minutes do you sign something of course not how does it work then do they have everything on that in my computer inside of it is it already ready absolutely not what they basically do is they load the first website and then they do a bunch of request in the background to get the data basically lazy loaded why are we not doing that in web tree I don't know also like do we pay more if you use the website in the time where there is congestion or more users and so on not really why do we do that with blockchains one of the one of the key points and key things we need to solve in the future is gas oscillations and and gas spikes in ZK now like in the rollers basically are happening we have subcenter transaction fees which means that we can potentially even abstract the gas fees from the user and acquire it to as a gas cost for using our da so let's say we wanted to use this like you know world-based kind of system that is kind of fully fully basically gasless and onni chain earn program but you have like a verb two experience did you ever use revolute did you ever use the robin hoods whoever did invest into this what you use to for savings do you save or just spend money yeah I mean sure that's called earn that's called earn yeah but do you use like some savings account and so on what do you usein Bitcoin okay that's good somebody else everybody just tapes nobody saves okay wrong audience for for this pitch obviously but the whole idea kind of is if you have a simless experience let's say you have some like card debit card you have some assets on it why are those assets not earning you yield why those assets are not earning you money and so on passively where basically you are doing nothing well that's what we trying to do with nbor basically fully gasless experience like it's we to like you have a kind of a debit card you have something basically that you already want to use let's say holyhead or something and then you can just integrate into into this without having to click anything it's like one thing you op in into D program like you have on binance or like you have like in some centralized kind of exchange but it's fully self custodial cross chain and how it works actually is we use l2s to aggregate user deposits and so on and then we shuttle them to the destination where the yield is which means that the more users we get the less cost of gas we have per user and we can account that as a as a kind of metric of the as a gas cost basically so you don't you know position basically cost for the user and then in the future we can take part of the profit or something so you don't see this friction so we are working on this basically it's Alpha he just launched basically onru a week ago so we'll see but if you're interested you know feel free to to give us some kind of update and give us some feedback on this how do you think it's good so this is kind of like the way it works and so on but won't get into deep into that and you know obviously architecture is a bit more complex so yeah I think that's all if you have any questions I'm here so this was a small intro to the just the landscape of ZK you will have a lot of interesting presentations after this into deep math so yeah thanks a lot for [Applause] that so do we have any questions for Eddie don't be shy morning it's in the morning yes please just a second yeah maybe kind of an obvious question but what are the risks of my funds being invested somewhere you said where the yield is but the higher the yield generally the higher the risk so what happens if the thing that you put my money into has crashed suddenly and like then then what so usually what we show on the website is medium low and high risk so low medium and high risk it depends basically what strategy do you want do you want to invest into spark for example with which you then have a risk of the SD Vault plus basically the bridging and so on or do you want to I don't know invest into Pendle strategy which you know does a bunch of shenanigans there is a different risk and different kind of like yield or what kind of APR you get for it so basically it's all like dependent on how much risk you want to take the the higher the APR is and basically the strategies work separately on L1 let's say this is the L1 strategy it works separately for the user the there is active management so you can think about it as a yearn but just like the vaults and the user kind of activities on L2 but still in the case that some happens we have a monitoring on L1 directly we can pause the contracts and why in the position and so on so it's kind of independent from the user action it's kind of a management POS managed position and so on did that answer it and we have one more question upstairs he I think you talked enough in the last answer to actually answer my question so great job on that uh however I just wanted to confirm right so there is no passive strategy it's literally all active managed op active managed strategies passive from the user perspective but active on your side absolutely okay thank you and we have time for one more question quick question yes [Music] uh do you have some mechanism when I have to prove where the money is coming from in my [Music] taxes currently it's still not live but you know that's one of the main features we're going to unroll soon because like all the accounting everything is kind of happening on chain so we can easily export that and so on so for you for example you'll be able to just report at the end of the year okay I invested this much I earned this much and you know you have a breakdown on that because like you have a share of a pool it's kind of like L into Dex as a cross chain because as soon as you deposit assent on L2 you starting turn so that way we can calculate how much basically you got from the L1 position that's getting rebalanced every 24 hours so every 24 hours we have this kind of report that we can use a your share of the report so we can automatically kind of send to your tax person or whatever wherever you need