Weekly Rollup #26
Interchain DAOs & The Khalani Network | Benefits of OP Stack | RaaS vs. Rollup SDKs | Week ending August 4th
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This week’s issue covers:
Interchain DAOs & The Khalani Network
More News & Announcements
Benefits of OP Stack
RaaS vs. Rollup SDKs
More Education & Discourse
📣 News & Announcements
Interchain DAOs & The Khalani Network
Introducing Interchain DAOs
Hyperlane’s series of announcements started with “Interchain DAOs”. a new cross-chain governance initiative done in collaboration with Tally, the web3 governance platform.
As you may already know, most DAOs today live on Ethereum (high security). It’s where most DAO treasuries live, and where most of the on-chain DAO voting takes place. The problem, however, is that voting on Ethereum is expensive. Paying high gas for a defi transaction is one thing, but paying a high gas fee to vote for whether or not your DAO should spend $100 of its treasury for a pizza party is another (just an example - most DAO voting is for important stuff, like upgrade proposals, token updates, grants, etc.). These high voting fees lead to (1) fewer people participating in voting proposals - in other words, concentrated voting among those with enough personal funds to justify spending a high amount of ETH on gas to actually vote, and (2) fewer proposals being published altogether.
To help solve this issue, the Hyperlane team (interoperability protocol) has integrated its solution within the Tally governance platform. This integration enables users to vote for proposals on Tally, “on and between any chain”. So, if your DAO lives on Ethereum, you can now leverage Tally to allow your community to vote from another chain your app is launched on, like Polygon or Optimism for example. The way this works is the user locks his/her original voting tokens on Ethereum, then a corresponding token is minted on a different chain, like an L2. Then, the user’s vote is communicated back to the original chain using Hyperlane. You can dive into more of the technical details here. Another cool aspect that comes with this new initiative is, if I as a user have voting tokens dispersed across multiple chains, I’d be able to use them all to vote without having to bridge them to the same chain.
Interchain DAOs was built by community member @aurobindo_arman, after the Hyperlane team posted the original bounty. Interchain DAOs was built with Scopelift’s “Flexible Voting” extension, which enables features like private voting, among others, which you can find listed here.
Introducing Khalani Network
A couple of days later, we were introduced to another Hyperlane-enabled solution, the Khalani Network, which aims to become the “liquidity foundation for the next 10K modular chains”. It’s designed with the goals of: (1) permissionless integration, (2) universal liquidity, and (3) being secure by construction.
Khalani was founded by @knwang, the same person that co-founded the Nervos Network, which is an L1 protocol. He has the same view towards the future of the space, in that many teams will be launching their own rollup in the future, especially as RaaS and Rollup Framework solutions make the launch process much more seamless. If this becomes the case, as many of us believe, then we’ll need solutions that connect all these different ecosystems with one another to get us from Rollup A to Rollup B.
Any rollup/dapp will be able to connect to Khalani, and any user will be able to interact with these solutions, without having to know what chain they’re on. “An application may accept user's deposit on one blockchain, send the funds to make market and farm on the second blockchain, and hedge against volatility in a derivative protocol on the third blockchain, all while utilizing Khalani's liquidity across the involved blockchains.”
While there are a couple of similar solutions in development today, according to @knwang during a recent Twitter Space, Khalani aims to separate itself from the rest by not tying its solution to the underlying message protocol (Hyperlane). In other words, similar solutions are coupled with the underlying message protocol (for example, LayerZero is tied to Stargate), meaning that message infra has to be used to move liquidity around (tied to their security guarantees). Khalani on the other hand, while it’s built on Hyperlane today, is able to be swapped with a different messaging protocol.
The reason Khalani chose Hyperlane however, is because of the Interchain Security Modules (ISMs), which help enable permissionless deployment on Khalani.
How Khalani Works
Khalani consists of a couple of different components:
Interchain Dapp: Khalani “as an interchain native dapp is deployed on multiple chains”. In the image above we can see it deployed on Ethereum, Arbitrum, and Nervos for example. Essentially, users will be able to deposit (lock) their tokens into the “Reserves” pool among each of these connected chains. If a user deposits USDC on any one of these chains, they receive a corresponding amount of klnUSDC in return, if you deposit USDT, you receive klnUSDT, etc. “User-provided, chain-specific liquidity is isolated in individual liquidity pools within the Interchain Liquidity Hub”. In other words, if a pool of a certain chain goes down, it doesn’t take the whole system down.
Khalani Chain: The liquidity provided on all these chains is then made available for liquidity consumers everywhere. This is made possible due to the Khalani Chain, which aggregates all the liquidity, acting like a digital ledger for all connected chains - it keeps “a unified, global accounting of all assets and liabilities.”
ISMs: One of the unique aspects of Hyperlane’s messaging protocol is its “Interchain Security Modules” (ISMs). These can be thought of as specific rules set by each chain, as to how they want their own chain to interact with. So, choose who you connect to, who can connect to you, assets allowed, etc. Khalani follows the specific ISMs set by each individual chain within this system.
What’s Next
Khalani hops to build a whole suite of solutions on top of this liquidity layer, from swaps, to lending & borrowing, and more. The end goal for them is to have users access these different solutions using whatever wallet they have, regardless of which chain they’re on.
Khalani is live on testnet today. While the platform only supports a couple of stablecoin swaps today, the team plans to integrate other tokens (tlkETH, tlkBTC, etc.) and services (lending & borrowing, etc.) over time.
More News & Announcements
Router protocol integrates Linea (zkEVM by Consensys). “One of the key advantages of this collaboration is that projects within Linea can now access multiple chains through Router Protocol”.
OP Labs (Optimism development team) launches the Superchain Faucet. Traditionally, crypto faucets provide very small amounts of a certain token. This is good enough for end-users like you and me who just want enough to pay gas for a small transaction, however, for a developer building an actual product on chain, they may need more than just 0.01 ETH. The Superchain Faucet is intended to give up to 1 ETH, enabled by on-chain identity authentication. Today, Optimist NFT holders, and “active builders”, can access the faucet, while Worldcoin ID integration will be added in the near future as well. I think this is such a cool idea and can imagine other teams doing something similar in the future with their own faucets.
L2Beat will be hosting L2Warsaw on August 30th, in partnership with ETHWarsaw. It will be a “highly technical L2 conference”. Tickets on sale now.
Omni Network’s (interop protocol) “Origin” testnet saw large growth over the past weeks, including facilitating +1.5M transactions from +150K across users. They also provided some detail on upcoming v2 updates.
Offchain Labs (Arbitrum development team) announced Bounded Liquidity Delay (BOLD), bringing permissionless validation o Arbitrum chains.
Polyhydra announces its partnership with Eigen Layer. This means Polyhydra’s zkBridge will now be secured by EIgen Layer’s restaking protocol (staked ETH).
The Wenmerge “mainnet MEV-Boost relay is now live for validators to add”.
Caldera chains now have access to Account Abstraction thanks to the recent Biconomy SDK integration. AKA Smart Wallets.
Eclipse launches the Solar Eclipse Accelerator Program. “This accelerator will fund 5 projects over a 3 month period, hosting them in the Eclipse office, or remotely. Projects accepted to this program will be awarded $20,000 - $25,000 USD to build their project“.
For anyone that wants to learn about all the milestones Eclipse has achieved over the month of July, they just published this recap here.
Galaxia Studios (on-chain gaming platform with multiple titles) announced that they will be leveraging rollups to scale their platform, using AltLayer’s RaaS solution.
Manta Network hosted an interesting discussion about the future of zk-enabled apps
Manta Network just launched the fourth round of its “MantaPay Incentive Program”. Get rewarded for your on-chain transactions over the rest of the month. “Earn up to 30000% APY”.
Celer Network just published a recap of their milestones over the month of July, which included the Brevis alpha demo, EthCC talks, & more.
Mars Protocol (Cosmos lending & borrowing app) now uses Bitcoin timestamping thanks to this Babylon integration.
Espresso’s Doppio testnet (shared sequencing network) is now open for anyone to use. Submit your own transaction to the Polygon EVM fork the Espresso team recently deployed. You can learn more about Doppio here, in our previous newsletter issue.
Radius (shared sequencing network) just published a proposal to Madara (Starknet sequencer) “regarding the implementation of an encrypted mempool”.
Clearpool Finance, the institution lending protocol, is now live on Polygon zkEVM. Idle Finance will build yield trenches on top of these Clearpool pools.
The Polygon team built a proof of concept of an order book exchange using the Polygon Miden VM.
Argent announces Web Wallet. Teams can integrate Web Wallet into their dapps to enable users to generate a smart wallet on the app using their email.
Introducing Tsubasa, an on-chain game running as a Starknet appchain. The game will be built in the open, similar to other Starknet projects like Madara and Kakarot.
ArchLoot, a mobile RPG game, launches on zkSync Era.
New Arbitrum deployments this past week include Owito Finance (cross-rollup bridge), Cradles (prehistoric ARPG game), Phemex (crypto derivatives exchange), and others.
Fuel’s beta-3 testnet has seen +3.2M transactions, +291K active addresses, and 10K contracts deployed since the network launched just a couple of months ago.
New deployments on the Mantle network over this past week include KTX Finance, Swapsicle DEX, LogX Trade, Polyhydra (zkBridge), and Orbiter Finance.
Here are some stats from Eldfell L3, Taiko’s latest testnet deployment which just launched: 144 total unique provers, +800K total transactions, +103K total wallets+36K daily transactions, and more.
📚 Discourse & Education
Benefits of OP Stack
DCBuilder from Worldcoin shares benefits of using OP Labs’ rollup framework, OP Stack:
EVM equivalence
Developer community
Tooling reuse
Rollup-as-a-Service providers
Easy integrations
Node-as-a-Service providers
Governance modules
What’s interesting is that some things directly concern OP Stack functionality, but most are external to the OP software.
EVM equivalence is (at a high-level) straightforward and clearly technical. OP Stack lets you deploy a node with an identical experience to Ethereum L1. OP Labs works hard to make sure their node maintains equivalence while functioning in a rollup context. The team has also built in modules to facilitate onchain governance, which is pretty cool.
However, the remaining bullets are less about the OP software itself and more about the ecosystem. This is where EVM network effects become clear.
Libraries, tooling, integration partners (e.g. exchanges), infrastructure partners (e.g. RaaS, RPC vendors) - OP Labs did not have to bootstrap any of these things. Community is a hybrid case because it spans EVM and Optimism communities. They clearly had to build the latter which they’ve done a kickass job with, but they’ve basically inherited everything else from the Ethereum Virtual Machine.
Note that this is NOT a dig against the OP Labs team. Leveraging network effects is a fantastic strategic move, so all power to them. If anything, this section is meant to highlight the power of EVM network effects. People have debated EVM network effects for years, but now we’re seeing it play out.
RaaS vs. Rollup SDKs
We hosted a discussion with founders from both categories! Matt from Caldera, a rollup-as-a-service (RaaS) platform, and Kautuk from Stackr, a rollup SDK / framework.
It was a fun and informative chat that touched on the following topics:
What are rollup SDKs? What’s RaaS?
Key differences and tradeoffs
Optimal use cases
Business models
Analogies and mental models
Will RaaS vendors release frameworks?
Maintaining security properties
Just in case you don’t get around to listening, here are a few takeaways:
Rollup frameworks and RaaS are very complementary
RaaS is more flexible than you might think - it’s not all no-code
There are many avenues for differentiation in both categories
RaaS vendors probably won’t build their own rollup frameworks
We’ll be doing more Spaces going forward, so let us know if you have educational topics you’d like covered or want to jam on modular stuff 🤙
More Discourse & Education
@kay_phillips_ frames the Rollup SDK space, broken out by each modular layer of the stack 🖼️🔥
@bastian_wetzel breaks down intent-based architectures and projects experimenting with them ✍️🔥
@barnabemonnot breaks down PEPC architecture, philosophy and how it compares to EigenLayer ✍️🧠
@sanjaypshah explains why shared sequencers might be more powerful than we thought, walking through a flash loan example 💬💎
Frontier Research releases the talks from MEVday in Paris 🎥🧠
@mikeneuder explores relay evolution and ePBS, making the bull case for enshrinement ✍️🧠
@jon_charb and Bruno França discuss the semantics of rollups and bridges ✍️💎
@jiayaoqi explains how PEPC allows proposers to make credible commitments ✍️
Espresso Systems discusses their new collaboration with Injective 🎙️
@jiayaoqi deep dives into account abstraction and how it links web3 with web2
@TheDeFISaint summarizes Paradigm research into intent-centric infrastructure 💬
@eshita curates an updated list of modular ecosystem projects 📋
Linea explains the basics of zkEVMs in simple terms ✍️
@terencechain summarizes an EIP-4844 analysis from his fellow Arbitrum researcher 💬
Fuel explains their unique approach to native account abstraction, using predicates ✍️
Bell Curve discusses the LST endgame business model with adcv_ from SteakFi 🎙️
@0x1cc explores optimistic machine learning onchain in the Ethereum research forum ✍️
Linea walks through ways offchain data can be used for custom transactions with Gelato and Redstone 🎥
The Restakening discusses recent events from the EigenLayer ecosystem ✍️
@LauriPelto walks through the experience of learning ZK ✍️
Empire discusses “why the next-gen L1 thesis is wrong”, issues with most crypto VCs and more with Nick from 1confirmation 🎙️
@mottylen explains why crypto UX is so bad and how account abstraction improves it 💬
@Swagtimus discusses crypto gaming with OmniKingdoms 🎙️
Saga walks through how to launch a game using their platform ✍️
@0xCygaar explains how EVM opcodes work in simple terms 💬
That's all for this week! Thanks for reading 🧱🎬
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