The Rollup - Permissionless Interop For Modular Future with Hyperlane

In this episode of Rollup, which took place on December 19th, 2023, Robbie, Andy, and Jkol discuss Hyperlane’s security premise, interoperability, restaking, integration of Hyperlane, and more. Read our notes below to learn more.

Background

Robbie (Host) – Merkle Tree Maxi, Co-Founder of The Rollup
Andy (Host) – zkProof Maxi, Co-Founder of The Rollup
Jkol (Guest) – Contributor at Hyperlane
Hyperlane – a permissionless interoperability layer

Security Perspective of $TIA Token and Two-Way Bridge

Jkol says that $TIA is secured through the Hyperlane network. The security model decouples the product from securing the connection between chains. Outbound communication from Arbitrum to other chains is secured. Once a message is secured, anyone with a Hyperlane mailbox can receive it.
He adds that currently, users can go from Celestia to Arbitrum in one click. To go back to Celestia, users need to go from Arbitrum to Neutron first and then use IBC transfer over back to Celestia. The app interface abstracts away the need for going from Celestia to Neutron separately. The plan is to make the two-way bridge more seamless in the future.

Security Premise of Hyperlane

Jkol says that, unlike other interoperability providers, Hyperlane has a distinct security setup. Security is not tightly coupled with message delivery mechanisms. Hyperlane has a modular security architecture that separates connecting chains from securing those connections.
He adds that Hyperlane focuses on securing outbound communication messages sent from one chain to another. Messages are broadcasted with added security measures around them. Any chain with a Hyperlane mailbox can receive these secured messages.
Jkol says that Hyperlane can leverage different forms of security depending on the supported chain’s validator set. Chains with their own validator set provide additional trust assumptions for users when using Hyperlane. Validator subsets and staking are also being activated to enhance security. Incorporating tokens into the security of messages allows for additional customization and trust assumptions.

State at the Station or State Proof

Jkol says that Hyperlane’s security architecture allows for incorporating any mode of state at the station or state-proof. Different chains can leverage their own assets and validators to secure messages through Hyperlane.
He adds that the flexibility in security architecture enables various possibilities for interoperability between chains.

Dynamic Messaging with Hyperlane

Jkol says that messages can be dynamically routed based on their contents. Users have the option to choose between a slower but safer ZK option or a faster validator option. The choice depends on the size and importance of the transaction.
He adds that aggregating trust through multiple bridges may lead to problems if one bridge acts against user interests. Users have a choice in selecting bridges. Protocols are incentivized through staking assets to avoid negative outcomes.

Permissionless Interoperability with Hyperlane

Jkol says that Hyperlane aims to be a permissionless option for interoperability. He says that it is used by other projects like Nexus and Neutron. Integration with Hyperlane helps achieve specific goals in these projects.
He adds that Neutron-related project aggregates Hyperlane validator set along with Axelar and Wormhole. Messages require information from all three sources for processing.

Hyperlane as a Framework for Interoperability

Jkol says that Hyperlane can be used by smaller teams or chains that are not yet well-known or widely adopted. It allows chains to leverage their own validator set and choose the level of security they want. Chains can run their own relay and connect to any other chain that has Hyperlane, ensuring self-sovereignty.
He adds that when building a modular rollup, it is important to consider an interoperability solution alongside the VM and settlement layers. Hyperlane can serve as the framework for interop in a modular stack, offering seamless integration with other protocols and services. By choosing Hyperlane, developers have more options and flexibility in creating their desired narrative for their projects.
Jkol says that in discussions about modular chains, permissionless interoperability plays a vital role. It is essential to talk about permissionless interop when considering modular chains’ potential. Without permissionless interop, discussions about modular chains would reach a dead end.

Integration of Hyperlane into a Chain

Jkol says that three main components are needed for integrating Hyperlane into a chain: the mailbox and associated contracts, security modules, and the relayer. The mailbox facilitates sending and receiving messages between chains and can be implemented on various VMs. Security modules ensure the integrity of messages by validating them using signatures from designated validators. The relayer is responsible for reading mailboxes and processing messages based on their validity. It also handles additional logic if required.
He adds that to integrate Hyperlane, mailbox contracts need to be deployed on the target chain. Security modules (ISMs) can be set up easily using authority-based configurations that validate messages from designated validators. Relayers need to be able to read mailboxes between chains and process messages based on their validity. A company called Kurtosis offers a hosted environment for running Hyperlane infrastructure.

Canonical Bridges in Rollups

Jkol says that canonical bridges connect main chains with rollups. Examples include Arbitrum’s Optimistic rollup bridge. These bridges have minimal trust assumptions.
He adds that implementing Hyperlane into modular rollups follows a similar mental model.
He adds that integrating Hyperlane into rollups provides an interrupt layer. This layer offers a similar level of security as canonical bridges. The interrupt layer is embedded natively into the rollup stack. No need to rely on third-party bridge partners.
Jkol says that some users prefer using canonical bridges for gas tokens. Stablecoins and other assets can benefit from Hyperlane’s connectivity between rollups. Increasingly, people are using Hyperlane for various assets but still relying on canonical bridges for specific use cases.

Connectivity with Other Chains

Jkol says that once Hyperlane is integrated, connecting with other chains becomes easy. There is no need to create bidirectional channels for each chain.
He adds that the relayer needs to be aware of the Hyperlane deployments on the desired chains. Permissionless connectivity is crucial in a rapidly expanding ecosystem of rollups.
Jkol says that Hyperlane is designed to be extensible for future rollups. It plays a crucial role in connecting various rollups. Avoiding fragmentation is essential as more rollups emerge. Hyperlane facilitates seamless connections between different rollup networks.
He adds that Hyperlane is similar to IBC, drawing inspiration from it. Some individuals involved in building Hyperlane also contributed to IBC’s development. Both protocols provide good guarantees but have some differences in design and flexibility. Hyperlane aims to be more extensible than IBC.

Cardano’s Growing Popularity in DeFi

Jkol says that Cardano is gaining popularity and has the potential to become a major player in the DeFi industry.
He adds that there is a team building Hyperlane, a project running on Cardano specifically for DeFi purposes.

Challenges and Opportunities in DeFi

Jkol emphasizes the importance of stable infrastructure for successful DeFi operations. Unstable Remote Procedure Calls (RPCs) are identified as one of the main issues affecting many chains’ performance. Rollup service providers need to address these infrastructure challenges to gain an edge in the market.
He highlights that addressing infrastructure challenges requires both manpower and engineering efforts. Distributed systems and better software solutions are needed to solve these challenges at scale. As more providers enter the market, establishing standards becomes crucial for efficient operations.
Jkol says that collaboration among service providers is essential for efficient operations and addressing infrastructure challenges. While some engineering work is required, it is not considered an unknown territory. It just needs dedicated effort from someone to implement it.
He adds that establishing a standard base builder is necessary to streamline operations across different rollup service providers. A lack of standards can lead to fragmentation and inefficiencies, as seen in the Ethereum ecosystem.
Jkol identifies interoperability as an underexposed area within the DeFi stack. Most people do not consider interoperability as a core component of the stack, but it has significant potential for disruption.

Hyperlane as Interoperability Stack

Jkol says that he considers Hyperlane as an interoperability stack that enables permissionless interoperability between different components such as data availability, execution, settlement, etc. There are levels or layers within Hyperlane’s role in interoperability.
He adds that as the industry evolves, more layers will be added to Hyperlane’s stack. This evolution allows for the specialization of different components within Hyperlane.
Jkol says that the goal is to make using a rollup in the modular deck seamless and comparable to using other long chains like Solana. He emphasizes the importance of a seamless experience without the need for managing multiple RPCs or dealing with incompatible tokens.

Hyperlane’s Role in Interoperability

Jkol says that Hyperlane is a key player in permissionless interoperability within the modular ecosystem. He says that Hyperlane has roles in data availability, execution, settlement, and permissionless interoperability.
He says that he avoids using the term “stack” to prevent people from thinking that there are separate stacks for Hyperlane and modular components. Instead, they view Hyperlane as having sub-layers within each layer of functionality.
Jkol says that more layers will be added to Hyperlane over time, reflecting the evolution and specialization of the industry. This evolution allows for a clearer understanding and differentiation of each component within Hyperlane.

Seamless Modular Experience

Jkol says that to attract users, it is crucial for the modular experience to be competitive with other long chains like Solana. A seamless user experience without complications or token compatibility issues is essential.
He adds that investing in technologies or processes that make the modular experience seamless is seen as a multi-billion dollar opportunity. Achieving this level of seamlessness would make the modular ecosystem more competitive overall.

Understanding Light Clients and Messaging

Jkol says that a client or node allows access to the state on a given chain. Light clients are lighter versions of full nodes that provide a sneak peek into the state without running the entire consensus process. Using full nodes for interoperability would be difficult due to operational challenges. When sending messages from one chain to another, it is crucial to ensure comfort with the transferred state. Light clients help achieve this by providing a level of trust in the state being transferred.
He adds that validators play a role in validating messages and ensuring consensus. In an ideal scenario, if both light clients and validators are using the same set of validators, similar results can be achieved. However, it is rare for all chains to have the same validator set, making light clients more useful for messaging.
He adds that if light clients were available everywhere, technologies like Axelar, Hyperlane, or Wormhole might not exist as they leverage light clients’ capabilities. The lack of availability of light clients drives innovation in projects like Hyperlane to bridge this gap.
Jkol says that the modular stack approach aims to improve implementation without sacrificing security or accepting trade-offs. Analyzing cryptographic proofs allows for lower cost or higher speed without compromising security. This modular approach leads to better results by improving verification processes.

Restaking and Securing Ethereum

Jkol says that the goal is to use “restaking” to secure everything that goes out from Ethereum. Hyperlane can be used to connect new rollups with Ethereum, ensuring the security provided by “restakers.” The challenge is to extend this security so that rollups can also use it for interactions back to Ethereum.
He adds that extending the use of “restaking” for bidirectional communication requires overcoming engineering challenges. This challenge involves not only technical aspects but also considerations of implementation and integration.

Staking as a Replacement or Supplement to Other Validator Networks

Jkol says that restaking can be used as a replacement or supplement to other validator networks. Using restaking provides additional consensus mechanisms for different actively validated services. The cost difference between using restaking and regular validators is yet to be determined.
He adds that restaking taps into the largest pool of economic security, which is currently Ethereum staking. Different chains and projects also utilize staking to put something at stake, enhancing security and yield.
Jkol says that the primary reason for utilizing restaking is the economic security it provides. Stakeholders feel confident in staking their assets due to the incentivization design of proof-of-stake models. It allows tapping into a large pool of economic security, offering both security and yield.
He adds that as more people use restaking, its usefulness decreases due to an inverse network effect. Slashing events can impact the available security budget, affecting all users relying on that collateral pool.

Permissionless vs. Permissioned Restaking

Jkol expresses doubt about whether restaking can ever truly be permissionless. He suggests that some form of permission is necessary, even if it is done programmatically rather than through human intervention. While it may not require visiting a physical office or talking to an officer, there still needs to be a decision-making process in place.
He anticipates that as restaking evolves, there will likely be AI-based policing mechanisms in place for permissioned restaking. He mentions that not everyone gets through the pitch process for AVSs, indicating a rigorous selection process.
Jkol says that there needs to be a scalable way of making decisions regarding permissions in restaking. While using machines or AI might be an efficient and scalable solution, there still needs to be a mechanism for decision-making.
He adds that permission is crucial in restaking to ensure the integrity and quality of the restaking pool. It may not necessarily involve traditional human-based permission processes but can be achieved through programmatic means.

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Show Information

Medium: Youtube
Show: The Rollup
Show Title: DeFi By Design EP115: Permissionless Interop For The Modular Future with Hyperlane
Show Date: December 19, 2023