Revelo Roundtable #17 - L2s Landscape w/ Movement, Fuel, and Eclipse

In this episode of Revelo Intel’s Twitter Spaces on June 20, 2024, Kirk hosted Rushi from Movement, David from Fuel, and Terry from Eclipse to discuss the latest innovations in L2 solutions, the integration of advanced programming languages, scalability without centralization trade-offs, leveraging existing blockchain strengths and more! Read our notes below to learn more.

Background

Kirk (Host) – Head of Business Development at Revelo Intel

Rushi (Guest) – Contributor at Movement

David (Guest) – Contributor at Fuel

Terry (Guest) – Head of Strategy at Eclipse

Movement – a integrated blockchain network, powering the fastest and most secure layer-2 on Ethereum

Fuel – a Rollup OS for Ethereum

Eclipse – Solana on Ethereum – Ethereum’s first SVM L2

Innovations and Future Developments in L2 Solutions

Rushi from Movement Labs talks about their focus on security and performance. Movement Labs is bringing the Move programming language, originally developed by Facebook for the Diem project, to Ethereum and the broader Web3 ecosystem. He highlights the importance of preventing smart contract hacks and improving the overall security of the ecosystem while also achieving high throughput through parallelization.
David from Fuel explains that Fuel aims to push the boundaries of what is possible on Ethereum without making centralization trade-offs. Fuel’s technology focuses on providing scalable solutions that don’t compromise on the decentralization and security principles that underlie Ethereum. David’s background as an application developer has given him firsthand experience with the scalability constraints of current blockchain systems, which Fuel is working to address.
Terry from Eclipse shares that Eclipse is focused on performance and scalability, leveraging the Solana Virtual Machine (SVM) for its capabilities. He highlights the need for scalable solutions that provide trustless access to Ethereum’s liquidity. Eclipse is designed to enhance performance for a wide range of applications, from DeFi to gaming and beyond, by building on the strengths of the SVM.
Rushi mentions that Movement Labs is focused on integrating the Move language fully into the Ethereum ecosystem and ensuring it is EVM-compatible. They are also working on enhancing UI and UX to make their platform more user-friendly and secure.
David discusses Fuel’s upcoming milestones, including further development of their scalability solutions and expanding their ecosystem of applications. Fuel is also focusing on improving developer tools and infrastructure to make it easier for builders to create scalable and efficient applications on their platform.
Terry highlights Eclipse’s plans to further enhance performance and scalability by leveraging the SVM. They are also working on expanding their integration with various DeFi protocols and gaming applications to demonstrate the capabilities of their technology in real-world use cases.

Building on Ethereum’s L2: Leveraging Liquidity, Security, and Optimizations for the Future

Kirk asks the panel why they chose to build an L2 on Ethereum versus an alt L1. Rushi explains that they chose an L2 on Ethereum to leverage existing liquidity and security. He highlights the challenges of attracting liquidity to new VMs and the advantages of deploying capital in familiar assets like $ETH. He believes that both L1s and L2s have their use cases, but L2s offer better customizations and optimizations for the long term.
David compares building on Ethereum’s L2s to being part of a larger interconnected economy, similar to the United States with its competitive states. He highlights that this interconnectedness benefits everyone, as assets and liquidity can flow more freely. He views the challenge not as competing against other chains but against traditional finance systems, and believes that L2s offer a more integrated and collaborative approach.
Terry explains that their focus was on optimizing the execution layer rather than innovating on the DA or consensus layer. They aimed to create a high-throughput L2 that leverages the trust assumptions of an L2 to enhance performance. He mentions that this approach allows them to build what they find interesting and play to their strengths in optimizing execution layers.

The Future of EVM: Balancing Legacy and Innovation in Web3 Development

Kirk asks the panel about the future of the EVM. Rushi compares the EVM to PHP in web development, noting that while EVM will remain essential for established protocols like Uniswap and Curve, future consumer and social applications will likely require more advanced EVMs. He believes EVM is legacy code suitable for certain applications, but next-generation EVMs will drive future Web3 growth.
David agrees, noting that while EVM might remain dominant for some time, new execution environments will attract applications that can’t be built on EVM. He envisions a shift where new developers may opt to learn newer frameworks rather than Solidity, similar to how PHP was eventually overshadowed by Node.js and React in web development.
Terry believes the EVM is here to stay due to its significant network effects, especially with $ETH. He acknowledges Solana as a strong contender but highlights that ongoing innovations and optimizations in the EVM ecosystem will sustain its relevance. He sees a future where roll-up VM innovations and other enhancements continue to improve the EVM, maintaining its position alongside emerging technologies.

Addressing Composability and Liquidity Concerns in L2s

Kirk asks the panel about the concern that L2s might break composability and fragment liquidity.
Rushi believes shared sequencers are crucial to solving this problem, as they can connect various rollups securely and efficiently. He suggests that shared sequencers allow for better state reading and more secure bridge deployment times, reducing the need for individual light clients on each rollup.
David compares the situation to cities: high-demand areas like Ethereum L1 are similar to Manhattan, where everyone wants to be despite high costs. He thinks rollups will vary in their composability and liquidity, and developers will choose based on their specific needs. Some applications might benefit from being close to other popular dApps, while others might prefer lower-cost environments on different rollups.
Terry believes that the challenge with shared sequencing is more social than technical. He highlights that rollups should strive to retain dApps by providing the best environment for their needs. Ideally, a single general-purpose rollup would house multiple applications and liquidity, offering the best user experience. However, he acknowledges the noisy neighbor problem and suggests mechanisms like those in Solana, which can support multiple concurrent hotspots, as potential solutions.
David pushes back slightly, questioning if some applications might be priced out of a single execution layer. Terry agrees but notes that mechanisms to support multiple hotspots can help mitigate this issue. David highlights the importance of modularity and interoperability, ensuring applications can adapt as needed without being locked into a single execution layer.
Terry says that while preparing for future scalability is essential, the focus should be on incremental innovations that address current and near-future needs. He believes a hyper-optimized rollup can support most use cases today and in the foreseeable future.

The Future of Blockchain: Custom Chains and Flexible Architectures for Scaling Applications

Kirk asks the panel about the potential for applications to grow so large that they build their own chains, referencing recent moves like Lens going to zkEVM and the possibility of an Aave chain.
Rushi responds by comparing this trend to web2, where small developers start on platforms like Shopify and move to their own websites once they scale. He sees a similar progression in crypto, where apps start on general-purpose chains to gain traction and then move to their own chains for custom environments. He believes this trend will continue unless infrastructure improvements make such moves unnecessary in the future.
David agrees, highlighting the need for flexible architectures that allow applications to switch their underlying blockchain without major changes. He uses the example of dYdX, which had to rewrite its codebase multiple times as it transitioned from Ethereum to StarkEx to a sovereign Cosmos chain. David argues that a modular approach can make such transitions smoother and less disruptive.
Terry identifies two main reasons for apps leaving base layers: the noisy neighbor problem and the desire for value accrual. He explains that high transaction fees can drive users away, especially in price-sensitive applications. Sovereign block space can address this issue. Additionally, apps want to capture more value, such as MEV fees, which are typically harvested by validators and sequencer operators.
Terry suggests solutions like Canto’s Contract Secured Revenue (CSR), and MEV rebates to address these issues and retain large applications on existing infrastructure. He mentions the example of Pixels, a game on Ronin with 1.3 million daily active users, showing that valuable execution layers can retain even large applications.

Exploring ZK Innovations: Perspectives on zkEVMs, Rollups, and Future Applications

Rushi says he thinks all zkEVMs lack user differentiation and have failed over the past three years. He finds ZK interesting for its lower withdrawal times and broader use cases beyond zkEVMs, like ZK marketplaces, ZK fraud proofs, and ZK for privacy.
Rushi highlights the high computational expense of validity proofs and sees ZK fraud proofs as a cost-effective application. He discusses ongoing work on integrating ZK into privacy mechanisms for layer-2 and decentralizing proving, though he believes practical zkEVMs are still a few years away.
David agrees, calling themselves ZK pragmatists. He acknowledges the potential of validity proofs but notes current zkEVMs are slow and expensive. He explains that optimistic rollups can have lower finality windows than ZK rollups. David highlights the need for high performance, low cost, and fast finality, which ZK cannot currently provide. He mentions their use of ZK for fraud proving and a component of their sequencer, but not for proving entire state changes.
Terry agrees from a practical perspective, mentioning their use of ZK fraud proofs and noting that zkSync has the lowest fees among rollups due to the horizontal scalability of state diff ZK rollups. He explains that ZK rollups become cheaper with more users, unlike optimistic rollups. He believes ZK will become more performant, faster, and cheaper, leading to a necessary shift towards ZK state diff architecture for its scalability benefits.

Focus on Community and Innovation

Rushi says they heavily prioritize ecosystems and community building, learning from Berachain‘s playbook. He highlights the importance of user experience and community involvement for success. He notes that simply raising funds and launching tokens is not sufficient anymore and stresses the need to prioritize community.
David says they focus on applications best suited for their architecture and values. They support these applications in various ways, including raising and community engagement. He highlights that their community is currently driven by technology enthusiasts and that engaging them with the technology itself is crucial in the early stages. He believes this approach will evolve as they scale up.
Terry agrees with the previous statements and commends Rushi for their execution. He mentions their goal to build a large developer ecosystem and generate significant interest.
Rushi mentions their upcoming testnet and Olympus hackathon with over 200 applications. He highlights new and interesting user-focused apps and their goal to incorporate technical advantages. He expresses excitement about BRKT‘s on-chain prediction markets and sports betting book, which is unique and not possible on EVM Ethereum.
David shares excitement about nearing their mainnet launch, describing it as the start line. He notes the uniqueness of Fuel, as they are kick-starting a new ecosystem with no existing mainnet Fuel chain. He looks forward to building real-value Fuel apps and mentions exciting plans from their research side once the mainnet is launched.
Terry is excited about their upcoming mainnet launch within the next month, being the first SVM chain not on Solana. He mentions leveraging their L2 status to hyperscale throughput and promises a variety of day-one apps, including popular ones from Solana and new interesting primitives. He advises to watch their socials for updates.

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Show Information

Medium: Twitter (Audio)
Show: Revelo Intel Twitter Space
Show Title: Revelo Roundtable #17 – L2s Landscape
Show Date: June 20, 2024