Ethereum's wei to L3 on StarkNet
How'd crypto get there and how high can it go?
All answers here in this summary of @ukolodny 's talk at Modular Summit last week.
#StarkNet thread🧵🧵⬇️⬇️
We wandered aimlessly. Some people started doing useful things after Satoshi showed up, but not many.
A few years later, Ethereum appeared, and it was the first to allow general computation on a public ledger.
Many people were excited by that.
In contrast to many other projects, this truly decentralized network delivered on two massive promises; security and decentralization. But it failed massively to deliver on scale.
So L2s were born. As such, Layer 2 introduces the concept of trying to solve scale. The base layer was renamed layer 1 retroactively.
In mid-2020, StarkWare emerged. StarkEx is a scaling service with a SaaS-based business that supports many use cases. It solves scale.
The newest mode is called volition which let's the user decide whether to store data on chain or off chain at the single transaction level, not the application.
This StarkEx deployment really scaled Ethereum. It settled over 500 billion USD in trading volume on Ethereum
In terms of scale, StarkEx has reduced the derivatives exchange dYdX gas per transaction from 330'000 to 480 gas. So that's a 700x reduction.
These are 10s of millions of live real transactions on Ethereum mainnet. Not a pamp engagement thread on CT.
For NFT platforms on StarkEx, Sorare and Immutable X, we reduced the cost of minting NFTs from about 200'000 gas per mint to less than 10 gas per mint. That's a 20'000 x reduction.
Scale was demonstrated in a very powerful way.
But a few things were sort of not achieved in the process. So first of all, StarkEx isn't general purpose.
StarkEx supports a bunch of use cases out of the box. Payments and transfers, spot trading, minting and trading of NFTs, perpetual contracts and defi pooling. But StarkEx isn't general purpose and not composable.
Think of these StarkEx instances as islands run by these businesses. No composability between dYdX, Sorare, and Immutable X.
This beautiful vision of composability was not realized.
And StarkEx is also not permissionless, you have to sign a contract with StarkWare
StarkWare developed a programming language called Cairo. StarkEx is powered by Cairo.
By narrative of sort of being battle-hardened, StarkWare said Cairo is becoming increasingly higher level and more secure.
The obvious idea was to say, well, let's externalize this to everyone everywhere. And so StarkNet was born.
StarkWare announced this, in January 2021, the Public Test net went live in June 2021 and the Alpha version of StarkNet went live on Ethereum mainnet in November. And it's getting a fair bit of, of attention in the ecosystem these days.
The first phase of the network is, in fact, permissioned, so it has the general purpose and composability, but StarkWare want to make sure it doesn't fall apart. In a few months, it will be permissionless.
Both transactions and contracts can be deployed on the public testnet without permission.
All these things were accomplished, but still there was a lot to do.
Okay, what was missing?
There is never enough scale. A good example is bandwidth.
Beyond that, it's control, and privacy is one of those. There's a reason private companies exist. And then there are economic factors. They're all here to stay. Control for companies is something they need, they need it because the regulator or their business partner require it
So that's where StarkNet L3 was born.
One thing we can do immediately is move the StarkEx instances up to L3 if they wish to do that.
StarkEx, like the public StarkNet, is the place where transactions are processed and proofs are created. Its possible to verify those proofs on the public StarkNet L2 instead of verifying those on Ethereum on L1. In terms of L2, you could say that this thing just moved a layer up
This will go into production soon. Private StarkNet will also be possible. Private StarkNet will be for single companies or consortia of all kinds.
StarkWare is going to experiment a lot there. Because you can move faster than public chain, you can move slower than public chain.
You can do all kinds of alternative stuff without building that kind of broad consensus that is necessary for things like EIP1559. This kind of experimentation is actually crucial to the success of this ecosystem.
You can do it multiple times. Whenever you want, you can apply this recursively, and if you want, you can go higher up. As you move up the layers, there are of course trade offs. The final settlement on the base layer is delayed.
Not everyone and everything needs Ethereum's L1 security. Rollups will eventually be adopted by other L1s too.
As with highways, the Solana approach of building more lanes typically ends in tears. Therefore, they need proper scaling solutions and other L1s as well.
You can read the unrolled version of this thread here: typefully.com/odin_free/wuS1F6h