Podcast notes – Vitalik Buterin talking post-merge on Epicenter: “Core devs want role to be as technical as possible”

Podcast notes – Vitalik Buterin (After the ETH Merge) – Epicenter

Host: Friederike
Guest: Vitalik

50% of blocks are OFAC compliant – “it’s a concern…but important not to overstate it”
Means non compliant transactions have to wait 2 blocks instead of one (on average)
Near-term solution – MEV boost will have transaction inclusion lists added – similar to what MEV-Geth (?) did before
Social slashing is a meme that’s gone too far – shouldn’t hard fork to delete censoring validators
“Optimistic that things will improve quite a bit”

Should validators have agency?
General idea is to make validators as dumb as possible – just run code – maximally dumb pipe-y – more predictable and easier to run a validator
Argument for making validators smarter / opinionated – could serve as second line of defense

Doesn’t trust threshold encryption – requires 50% honesty assumption
Suspicious of honesty majority assumptions – should have paths to recovery if dishonest majorities occur

MEV smoothing – Justin Drake’s fave idea – treat non optimal bid acceptance as invalid / non availability condition

How much of a problem is MEV?
Many kinds of MEV – some is a problem, some isn’t
One class of problem – outright exploitation (eg, Uniswap ETH-USDC, sandwich attack)
Some MEV is unavoidable / benign – eg, arbitrage if prices change during block confirmation, keeps prices synchronized
Don’t want proposers to need to update software to keep pace with MEV algorithms
Can’t count on dapps to mitigate MEV – “always gonna be dumb devs somewhere”
There are MEV minimizing architectures – eg, off chain order matching before sending to Uniswap / onchain DEX

Some (eg, Paradigm) argue MEV inevitable – and thus building solutions to capture MEV in somewhat decentralized way is necessary (eg, Flashbots)
Flashbots has prevented centralization of layer under them (the stakers) – but has turned into centralization vector itself

The Surge – danksharding requires trusted setup, should we worry about it?
Low probability (1 of 1000s?), but important to move away from trusted setup over time
Other approaches have too many tradeoffs
KZG now, roadmap for removing it as better snark tech catches up

Phase 1 – Proto danksharding – could be early to mid next year
Phase 2 – go to 16mb, split up data load – will be gradual nodes transition

Core development bandwidth limited, prefer solutions that are more distributed / third party
Examples: Account abstraction strategy – 4337; Rollups
Danksharding – benefit is split off development effort, core devs have simpler problem / less work, rest of work is on community, can get something out much faster

Concept of in-protocol fees going to specific dev teams – has been discussed before and rejected – trying to minimize governance
Core devs want role to be as technical as possible, avoid social value judgments
If can go back 8 years, pre-mine 3M ETH for long-term fund for soul-bound governance, maybe — but need to live with ecosystem as it is today

Centralized chokepoints in L2? Sequencers are centralized
Decentralizing sequencer is very important – multiple approaches and tools, balance complicated constraints (security, legal)
-In-protocol auction to buy up sequencer rights for future slots
-In-protocol proposer mechanism

$3B in hacks in 2022 alone – how do we protect normies?
Defi hacks have been in applications he doesn’t use and would never endorse using
Some in community have more aggressive ideas of what they wanna do onchain and will overshoot
“Best we can do is slowly expand frontier of what can be done safely over time”
Uniswap safe for long time, MakerDao, better DAO governance contracts – this safe space will grow
“Do better job of communicating difference between safe zone and crazy zone”

What must we get right in 2023?
“I’d still say scalability…there’s a limited time window”
If we don’t solve by next bull market, overwhelming chance that forms of scaling that sacrifice trustlessness will dominate, will be hard to come back from it

Podcast notes – Worldcoin CEO Alex Blania – Epicenter (Sebastien and Friederike)

Guest: Alex Blania
Host: Sebastien Couture and Friederike Ernst
https://epicenter.tv/episodes/435

Background
-Vertical farming
-Caltech physics

Sam (Altman) was already working with Max on it
Alex became friends with them, became a cofounder
Brought on friends from German uni, Caltech
Lots of physicists as a result

He’s CEO, there’s 100 people, runs daily business
Sam is cofounder & chairman, involved in every big decision
Max is great zero to one guy

Started Worldcoin 2 years ago
How to accelerate societal transition into crypto & blockchain, should be net positive for society

Initially planned to launch a token, accessible to everyone
How to solve sybil resistance so everyone gets a fair share?
Built hardware device, “the orb” to verify this
It’s a platform for other projects, as well as for their own token (Worldcoin)

Onboarded 450K users already, now ready to scale

Initially thought about sybil resistance for months
Lots of existing solutions with problems – KYC, network topology
Only truly scalable solution is biometrics (it’s unique to each person, only need to do it once)
You can use ZKP in crypto to make it privacy preserving while maintaining scale
Didn’t want to make a hardware device, it’s a brutal endeavor

The Orb
“Proof of personhood” – how to prove you’re unique and alive, not a bot or attacker
First liveness check, checks you’re a real human
Calculates unique ID from picture of eye – from eye muscle – only eye biometric data really works, fingerprint and face don’t
Iris hash stored in L2
User can then prove they’re among a set of people
But doesn’t reveal public or private key – only proves you belong to a group of people
DB of iris hashes is stored on an L2

Team is very extreme on privacy
Biometrics aren’t your identity, just your passport
Orb users receive 2 key pairs – one is eg ETH wallet private & public key, second is biometric data keys (semaphore key?)
Only thing you can prove from the hash is that you belong to a group of users (eg, you use a specific app) – which is more secure than eg, your Google username
Expect to eventually open source hardware designs

SC: Concern that hardware becomes hacked or corrupted, open sourcing hardware would be helpful. Is there a nightmare scenario?

Real concern is malicious people who build own orbs and pretend it’s the official Orb
Need to be very transparent and educational about this

SC: Got a DNA kit for Xmas, but decided to send it back – it’s the unknown unknowns he can’t square

Worldcoin is truly privacy preserving by its design and usage of ZKPs
Token is L2 on Ethereum, optimistic rollup
Will allow minting token on other blockchains like Solana or Near

Right now if you lose your semaphore key (the Orb specific key), then you lose your identity – still need to solve for this

They’re building own app to help with onboarding

New users sign up, receive Worldcoin tokens, with governance rights
Experimenting with incentive mechanisms
10B tokens, capped supply, 8B to users
Early users receive more tokens – a gradual unlock over time (eg, 2 years) – more like UBI
Other projects will also airdrop to Worldcoin network – should start happening soon

They’re very excited about UBI, especially when AGI gets closer

If reach supply cap (eg, if literally everyone in world adopts it), let’s see what governance / community decides to do

Started as small team in SF apartment

Plan to make 50K of these orbs every year
Already onboarded 450K with just 30 devices – think about the eventual scale
Each device can onboard 800-2K people/week – the numbers are much better than they initially thought
Operational load is insane – how to educate, properly onboard

30 devices – spread widely, very experimental, across globe (Europe, Africa, Indonesia, etc)
Want to find operators who would otherwise run companies
Strong Pareto distribution – the best ones onboard a lot more people
Eg, operator ran a crypto club in Kenya, onboards a lot of young people there

Worldcoin not tradable today – you receive IOUs today – wait until main net goes live
Young people find it cool and exciting
Becomes platform for other protocols and tokens
Orb operators receive stablecoin payments, not Worldcoin

How do you align operators?
Eg, operator could trick people, go to elderly home and scan everyone’s irises
Tough problem, still experimenting, seeing these problems already with just 30 orbs

Corporate structure
US entity, German entity, Swiss foundation
Small team in SF, most of team in Europe – in small town in middle of Germany, did this during covid so they could work together
Swiss foundation for token issuance
Figuring out how to properly setup DAO, with governance rights, etc

Raised $25M from top VCs @ $1B valuation – a16z, SBF, CoinFund, etc
Plan 10% to foundation, 10% to external investors (including above VCs)
// I’m not sure if he’s referring to token allocation or equity ownership in company

FE: How does this align with fair launch mission? If want to do global UBI coin but insiders own 20%

20% is less than other projects, those investors like cdixon are great partners to have, but early advisors / investors thought it was too low and wouldn’t work
Even now they think it’s a struggle since hardware + global scale requires a lot of capital

Incentives should all be aligned around the token, not the company itself

SC: seems like it should be a public good

“It will become a public good”

“I love our investors”

FE: What’s the meme for Worldcoin?

Bitcoin is 0.9 Gini coefficient, Worldcoin will be 0.4 (much better)
Everyone gets ownership in this thing, new playing field

FE: You’re creating value first and foremost for the investors…is it gonna rub people the wrong way? Will it get forked?

We can adapt and change – issue other tokens – etc – have talked to Balaji about this too

SC: Ukraine conflict will accelerate crypto regulation
In 20 years, how will WC make world better?

Solve Sybil resistance
Biggest onboarding to web3
See path to 1B users in <3 years – “was very surprising to us”
UBI deployment

Expect 10M+ users by end of 2022

Open SDK soon – under 3 months

Orbs will lead to different user distribution than other crypto networks – because orb operators spread geographically, and then onboard high penetration locally
This network will give other builders access to lots of new users

Will launch Discord and Telegram relatively soon

FE: wouldn’t personally use biometrics, prefers “web of trust” to scale in truly decentralized manner – “you don’t want to have a conductor for this”