hello Devcon sea vitalic is is a very
rough act to follow so thank you for
everyone who stayed to talk about
decentralization today um so today we
are going to talk about deconstructing
the nation state which is how the last
kind of panel ended so that ends up
being perfect and in this talk we're
going to cover kind of a bunch of
different concepts at a at a pretty
rapid fire paace so we're going to start
with how does eth die how does eth go to
zero why are we actually on the road for
some possible Futures in which this
blockchain and this system which we all
love just like doesn't do as well
anymore how can we save it what is the
formula for that what does this have to
do with E3 which I think is a meme
you're going to be hearing a lot about
in the next few months few years Etc
what are the Technologies we can use we
just heard about program uh programming
privacy and other things like that what
else can we do what can you the attendee
here at Devcon and in the space uh do to
help this and then what am I doing about
all of this and where do Technologies
like tees come in so let's get right
into it I'm going to start a little bit
funerary today so I'm going to talk
about what I consider to be the two most
disturbing pictures in the ethereum news
cycle the ethereum space today at least
to me and to my dream of building a
decentralized system together with you
all um so the first one is from this
paper called regulating decentralized
systems evidence from sanctions on
tornado cache paper published by the New
York Federal Reserve authors listed
below and in this paper they go Fairly
deep into analyzing tornado cache and
sanctions enforcement on decentralized
blockchains um kind of enumerating
various power dynamics choke points and
other levers in the system uh and then
studying how effectively they can kind
of manipulate these levers of power to
do things like stop Technologies they
don't like um Technologies which for
example many people here uh may have
different feelings about so um actually
let me go back to that if I can figure
out the clicker um yeah so an
interesting thing about this picture is
it shows the approach that as the nation
state game escalates as we really go
deep into this mission of
decentralization that various kind of
centralized parties take on these things
we build and it's very simple it's about
control it's about the boxes of control
and it's about how to leverage them and
make sure we put as many X into these
boxes that we see here um as possible so
that's the first disturbing picture the
second one uh so this is a graphic that
you can go browse yourself online the uh
URL is up there uh I can't read it from
this distance but uh benj dd.com AWS
there we go and here you can go through
the various different AWS data centers
worldwide and kind of view different uh
AWS to AWS latency pictures um in a very
real world this is the topology of the
internet of the networks on which we're
building our Technologies today uh so
you can see on the left there you have
us east1 which is the most popular AWS
data center for crypto deployments uh
and the lighter the color uh or sorry uh
I guess they change the color scheme but
I think the blue lines are things that
are like approximately on the order of
under 400 milliseconds uh the light blue
line is is kind of or maybe it's under
200 and the light blue line is over 200
Etc um but you can see there there these
very clear corridors of latency and
power that we've built why is that well
because that is where the data centers
are that is where the economic activity
is that is where in many cases the users
are that is where companies want to have
their servers and want to build their
infrastructure um that is where the
capital is and the investors and all of
these pieces of the puzzle and so we've
built a power overlay using the latency
structure of the internet on top of that
and this is what it looks like um so we
exist in a world where there are two
fundamental realities the first one is
that much of the world's power is
already centralized that includes
military power economic power
geopolitical power Social Power and more
um and on top of that the disturbing
trend is that centralization begets more
centralization so centralization is an
accelerationist Loop onto itself uh this
is present in markets through phenomena
like economies of scale or Winner Takes
all it's present in Zero Sum games such
as trading it's present in auctions Etc
so when you have one sort of
centralizing vector that tends to bring
all sorts of centralization into various
aspects of your system something we
really want to avoid if as we said
before deconstructing the nation state
is it all on the radar for this project
so what I would say that given that we
are in these situations we have to stop
yoloing uh protocol proposals and
upgrades uh in terms of this power
Dynamic and this topology on which we
exist and instead we have to start
treating distribution of power globally
as a first class goal for the next
chapter of eth how can we be intentional
about where we're pushing power in the
system this is much much more important
than the performance of the system fast
block times throughput latency anything
like that because if you have those
things without having distributed power
you've essentially just reinvented the
systems that we were trying to escape
this whole time those performance
systems already exist um otherwise we
come back to the reality where much of
the world is centralized and
centralization beget centralization so
instead in of that let's stop yoloing
protocol proposals and treat
distribution of power globally as a
first class goal in E3 okay I'm going to
exit the infinite Loop and instead go to
the infinite Garden so this is an actual
picture of my grandmother growing her
own infinite Garden um and I think the
solution the exit to this this Loop is
planting our own Gardens building our
own systems so let us all together kind
of brainstorm this infinite Garden of
power distribution and think about very
intentionally carefully and together
about where we want power to go uh I'm
going to give you one troll idea and I'm
sure you're going to hear many more over
the next few weeks but this is going to
be E3 done my way uh this is the best
hatching GIF I could find that was free
Shout Out Wikipedia Foundation but it is
very cute um all right so in my opinion
these are the four pillars of e3 as I
see it and I say pillars because these
are actually non-negotiable properties
if either of these four things any of
these four things are compromised on we
will fail to achieve the goals of
cryptocurrency we will fail to achieve
the goals of ethereum and as I said in
the beginning of the talk the price will
obviously be zero regardless how much
institutional interests or ETFs or Etc
we're able to create um so these four
pillars as far as I see them uh number
one pillar is permissionless and I'm
going to explain each of these in
Greater depth uh number two is
distributed from a technical perspective
and a computational perspective number
three and this is the most important
property by far is geoeconomic
decentralized and we're going to Define
that very carefully shortly and number
four is neutral Builder efficient um so
what are these pillars let's get into it
well the first one is permissionless
this is something we should all have at
least a little bit of context on in this
space but specifically um I slice it
with thinking about me and how me is
expressed in the protocol because that's
what I work on so for me what permission
lessness means is that any actor is able
to express their value or preference
into a block at any point in the block
construction process um and that value
is able to percolate to be expressed
through the process and into the system
uh you might note that this is actually
the same as many definitions of
censorship resistance essentially if you
pay a fee you get in is one slicing
although there's a lot of kind of
details there um okay other than
permission lists we must also make E3
distributed so this one is pretty
obvious to this means taking
computations that right now require one
big computer or one big server and
breaking them down into small pieces
that we can then distribute kind of all
over the network and all over the world
um without doing this it's hard to
imagine how to decentralize if you
require a huge computer to do everything
in one central place that's inherently
not
decentralized um all right this property
as I said is the most important
geoeconomic decentralization I'll spend
a little longer on it um so this
specifically is a is a very specific
notion of geoeconomic decentralization
saying that collocation in the protocol
must yield minimal additional profit so
this is not saying hey we have a note in
France and a note in the US it's not
saying hey we're on three of these AWS
topologies of power we're on three of
these links or five that is not
geoeconomic decentralization geoeconomic
decentralization is saying that there's
a Level Playing Field in your system for
people who are participating outside of
those existing corridors of power
outside of those existing latency links
outside of that game theory we've
created with AWS and those people must
be able to participate as profitably and
as meaningfully as the people who are
sitting in New York as the people who
are sitting in Japan collocated with
binance and Etc if you reduce the
participation of those systems in the
network in the iterated game as time
passes your network collapses to these
Central points of geography and power
and then you lose any hope censorship
resistance or any of the other
properties you want all right so those
properties sound great can we actually
build that well this is my troll road
map to uh get there uh it's a little bit
oversimplified but hopefully it
communicates the point so I believe
right now standing from today there are
two things or or or kind of two broad
pushes I want to work on the first is to
teifi everything why teifi well we're
going to get more into that in a second
but basically tees allow us to
distribute the computation so remember
when we said before the one big computer
becomes many small computers tees give
you the trust apis to make that possible
with untrusted parties operating these
small computers and once you have this
distribution you don't have
decentralization yet but at least you're
able to start pushing pushing this
infrastructure and pushing the power to
the edges of your network and outside of
those lines of AWS those lines of power
that we have today so after we teifi
everything we have to start in a cycle
doing two things the first is pushing
this power to the edge as we deconstruct
the computation as we modularize it we
push and then the second thing is also
to reduce the power of actually tees in
our system so tees are not a silver
bullet they're not you know a magical
solution to everything they give a lot
of power in the system to Intel they
take it away from that graph that I
showed you earlier with AWS and move the
needle a little bit more right now
towards Intel and Nvidia and AMD and
other Hardware manufacturers
so while I would argue that's better
than only having kind of trafi latency
corridors determine the evolution of our
Network it's still not perfect right and
there's a lot we can do using other
cryptography including what we've heard
on the panel before uh using using other
alternative te approaches open tees uh
things like that to sort of remove power
from the te itself as well so I think
it's a two trck approach once we have
the platform to distribute and push
things to the edges we then have to
actually start pushing things to those
edges and I'm going to cover how you all
can help with that shortly um but also
start kind of eroding that Core Power
that we've now built up in moving this
needle to this other party which is
Intel um so I'm going to ask for your
help please uh so please give me your
arms or if you don't have arms just your
body give me your soul sounded kind of
dystopian so I'm not going to ask for
your soul uh but please give me your
help in this and how can you all help
with this well if you're a Dap developer
if you're an infrastructure developer if
you're a user ask yourself how can we
for our our uses what we're doing what
we're using the protocol for how can we
get power off of these corridors of
power that we see here can we use
endpoints that are in different
locations do they meet our needs can we
deploy our server somewhere that
geographically makes sense for the
change we're trying to create in the
world rather than defaulting to us east1
on AWS because it's the first thing that
happens when you click launch are we
able to make that change as a space I
think everyone needs to spend some time
thinking about what am I doing and is it
actually helping centralize power onto
these power corridors or is it actually
helping push power out to the edges uh
which is what actually underlies the
long-term value of decentralization and
cooperation and even the price yes um
okay so going back to this graph uh um
well one obvious thing you might just
say is oh we have many boxes why not
just have many of them just sign or have
some sort of list where the proposer is
forced to sign well the reason is very
simple because it doesn't actually solve
the power distribution problem it's not
a meaningful solution to censorship in
any way right um if in your metag game
you collapse to a state where the system
itself is very centralized no form of
technical papier-mâché technical
decentralization Etc even though it
feels really good to us as technologists
it feels great to just say like hey we
can just do this and it solves the
problem does it I mean let's let's let's
think about it for a second um so
certainly on binance Smart chain it
would not and in general what I would
say is censorship and power dynamics and
the way our money works these are
political problems we're not going to
Tech Tree our way out of these problems
we need to have deeper conversations
about where the power is in our Network
where we're building power in our
Network and how we iterate that towards
a place that works better for us um that
being said that doesn't mean that as
technologist we can do nothing our job
is not to make it worse so please also
help me in that if you're participating
in this space do not centralize power
back to those corridors
um and remember today we already live in
a world where much of the world's power
is centralized and centralization begets
centralization so I think this is really
existential to eth we're at the point
where we have a choice as a community of
do we start pushing the power we've
built out outside of AWS or do we
concentrate it seeking ETF inflows
seeking Stock Exchange listings seeking
trafi participation and concentrate the
system to the very corridors of power
that we thought we were
disrupting um so to get actual
decentralization well the definition is
very simple it's how much have you
pushed this to the edges um and I wish
it was something that could be easily
Quantified but unfortunately it's not
and that's just something we have to
live with a few more things I have to
say so the first is um this is a little
bit spicy and a little trolly I think we
should reject the ethereum endgame so
the ethereum endgame for those who know
it specifically is a slightly older
probably like somewhat out ofd post so
I'm kind of attacking a strawman here
basically saying that like hey is it
really that bad if we have these big
centralized machines doing things
specifically for meev but then we kind
of keep them honest with the rest of the
network we keep that lightweight and
everything I think that's defeatism
personally I think we can decentralize
all the things and I think as long as
you have a central Corridor of power a
central source of concentrated power any
sort of system on top is not going to be
able to meaningfully police or control
it uh so we need to actually
decentralize all the things that require
the big machines as
well um doing a deeper dive into how
this relates to censorship resistance um
so censorship resistance is a very
interesting topic traditionally in the
academic space it says that if you
create a transaction that assume you pay
the fees you'll be included within some
number of blocks that number is called
Delta it's called the censorship
resistance or synchrony parameter um so
one question I have for us as a protocol
is what Delta do we actually need and
how do we VA value various Deltas in the
protocol against other properties we
care about like power distribution kind
of uh Geographic decentralization Etc uh
because as you push Delta to zero you
actually get Fair ordering out of the
the censorship resistance definition
right if you need to be included
immediately as soon as your transaction
is sent well what does that mean for the
person that's on the other side of the
world how does that stack up with them
what if your Delta is below the network
limit how does that then get resolved
into the protocol how do we weigh
collapsing these tradeoffs against other
centralizing effects we can create in
the meev space that maybe help us build
this robust geopolitical base and
actually allow us to push power back
into the edges so I think the most
dangerous thing the space can do right
now is essentially fetishize and Chase
one block censorship resistance at the
expense of all of the core properties
that will actually provide geopolitical
robustness and censorship resistance in
the long term I think we haven't had a
conversation in the community about how
to weigh those two things together uh so
let's do that please before we start
yoloing protocol updates uh and let's do
that in a way that addresses this
approach to to censoring our
networks um so what we need for
decentralization is real Global
meaningful distribution of power that
sounds great Phil but we all know
there's certain things standing in the
way of that um so the first one is what
I call ux fenel this is a web 2
mentality that you need to make things
faster and more addictive for your users
if your users aren't addicted if they're
not running on your treadmill if they're
not generating returns you failed you're
a bad person you're a bad founder no
that's not the way we build web 3
applications I'm sorry uh right if you
chase ux fenel you chase the dragon over
and over and over again to the end State
well now you need 50 millisecs now you
need 10 milliseconds now the mind can
perceive 5 milliseconds we've gone down
that path in web 2 and we We've Ended up
with users that can't meaningfully
interact with the technology these
zombies that just are kind of fed these
inputs right how many people like that
here nobody likes it right so let's stop
that in web 3 please enough um yeah
seriously another one I want to talk
about and this is a little bit mean to
the EF so I feel a little bit bad
whenever I talk about this but napkin
research um and I tried to choose a
slightly fancier napkin this time
instead of like a like a dirty napkin or
something but I think do a lot of our
research discussions very informally and
without even having deep conversations
about what are principles what does
censorship resistance mean to us what
does this protocol change mean how do
you define it I think we can do a lot
more I've written a blog post about a
few ideas I have but I'd love to talk to
people because I think the problem with
napkin research is when you have a room
this big the napkins become a flood and
it becomes too easy to Lobby too easy to
capture the process too easy to get kind
of YOLO protocol upgrades and bad ideas
shipped into the L1 we all care about so
let's kind of upgrade our napkin uh the
problem is if you combine napkin
research with ux fenel that's pretty bad
situation so uh that that I think is how
eth goes to zero it's the combination of
n napkin research uh and ux fenel
eroding the decentralization we've built
so carefully um and leaving US Open to
capture to co-opting and to rebuilding
the systems we sought to evade so in all
of that the exit must be globally
distributed power there is no
alternative the alternative is0 eth say
it again and again and again please in
the mirror let's move beyond the napkin
um this is a table that I have from a
talk I gave at eth Denver I encourage
you to look it up it talks about all the
technologies that we have including as
we talked about kind of programmable
encryption and there various trade-offs
for deploying in these contexts that we
have in distributed protocols including
who would break them including rent VES
including Geographic decentralization
which I think is the most important row
here uh we need to jam more about this
and fill this table out more
unfortunately I don't have time to go
deep today but please check it out and
let's discuss more uh okay I'm going to
leave you with one sound bite yte well
they give us the theoretical maximal
performance for taking all of these
monolithic things we have and
distributing them so we can push to the
edges and at least for what I care about
which is the meev context we can iterate
the security there
and for your dap if you want to do this
the recipe is simple build demand
distribute the infra to where your
demand exists natively to it and then
scale your network from there as for
what flash Bots is doing we're doing so
many different things in terms of teying
everything pushing it to the edges
creating platforms for you all to push
things to the edges more there's a lot
that's going to be coming out in the
next few weeks so the only thing I can
ask is for you to stay tuned or find me
later and please don't forget that that
I need your arms so that we can get out
of this power dystopia all right thank
you very much everyone all right
philli well well
well napkin fentel and arms that's quite
a fascinating presentation but
nevertheless let's go right through our
Q&A we got about 4 minutes left is there
any value to centralization at all or do
you believe everything in life should be
decentralized what do you think philli
yeah I mean I think for example uh
government is fundamentally centralized
right and many people find that valuable
in many contexts I think you know like
uh for example my laptop is like a
centralized Computing hub for myself I
don't necessarily want to decentralize
that I think it really depends on the
application I think decentralization is
useful where you want cooperation across
differences and that's actually where
the power and censorship resistance
comes from the more different people
that are cooperating under the same ENT
and the more each one walks away feeling
like yes that was fair that was a just
outcome the more robustness the more
censorship resistance you get for free
uh and so I think in those cases it's
it's it's not centralization is is
harmful but in other cases it totally
does make sense excellent thank you very
much all right I see people voting and
up voting the up voting the questions
right at the top with five votes tees
are Peak centralization three us
companies a local device zk's viable
alternative take it a away yeah so we
can have a deeper conversation about ZK
zks don't allow for the kind of like
Interactive Group computation that you
need to do in a lot of consensus
protocols or for example me or
transaction processing so maybe like
kind of at the edges of like okay if I
show you a proof maybe you can run this
more limited algorithm yes but at the
core it's not really the same Tech or
the same abstraction I think all of the
entries in that table ZK MPC fhe tees
Etc cryptoeconomics
they can all chisel away at the
centralization so it's all about using
which one is appropriate for your app
maybe your app is already centralized
maybe it doesn't need go
decentralization then why would you use
a te right um Etc so like I think it's
about putting as much as possible off
tees and making tees also able to be
kind of more trusted by having open tees
and things like that in the future but
yeah it is it is a centralization risk
for sure all right excellent question
excellent answer sir how do you think
centralization risk of staking compares
to the rest of your
pillars uh I'm not sure what
centralization risk of staking means uh
if it means like basically the stake set
becoming more centralized or the fact
that staking exists centralizing the
coin Supply I think there's many like
slices of staking and
centralization um I think I think yes it
is kind of implied by the rest of my
pillars in my worldview like if we have
permissionless and distribution and
specifically geod decentralization where
it's fair for you to participate no
matter where you stake I think you get
less stake centralization so I would say
for me it's like Downstream of the
pillars if you want to slice it there I
think it is a totally valid thing to
have on the table say like we don't want
centralization into the stake set all
right we got one minute more let's try
one last question with six up votes te
solve every problem that was previously
described in the programmable
cryptography session why aren't more
people promoting them not only do they
solve all the problems but you can use
them together to give you defense in
depth to give you various optimizations
and things like that we're building like
a lot of stacks to help people do that
so I think a lot of people are promoting
them I think people are afraid I think
people in crypto and in life and in
general they love binaries either tees
are broken and they're useless they're
garbage we need to burn them down or
they're the best thing ever and like
they cast every opinion on te into one
of these two buckets the reality is much
more wants they make sense for a lot of
applications they don't for many others
um I think people are promoting and
using them and seeing success using them
actually basically everywhere they make
sense um so I do think you will see more
people promoting and using them over
time definitely in time to come ladies
and Gentlemen let's give our speaker
another big big round of applause thank
you very much Phillip