The blockchain infrastructure space is constantly evolving and we’ve seen many innovations and solutions by communities to build a better infrastructure layer.
A recent proposal by Ben Zhou, CEO of Bybit, on BitDAO’s Discourse has sparked a lot of interest and discussions throughout the community.
To further the conversation, Moledao invited Ben and key BitDAO community members to a Twitter Space sharing on the case for a Bit Chain.
https://twitter.com/moledao_io/status/1548144262813888514
Speakers:
- Co-host: @defipaca, community member at Moledao
- Co-host: @dao_lbrian, community manager of BitDAO AEmbassy
- @benbybit, CEO of Bybit
- @jimcurrywang, at BitDAO AEmbassy
- @jacobc_eth, head of product at BitDAO and G7
Recap
During the community call, we exchanged questions about blockchain infrastructure layer and a Bit Chain with Bybit CEO Ben, BitDAO’s community managers LBrian and RJ, and BitDAO’s head of product Jacobc:
- What’s the motivation to build a Bit Chain, given that almost no existing blockchain is profitable yet?
- Would there be considerations for options like an L2 or something that resembles a modular blockchain？
- Given that BitDAO is generally chain agnostic, how will a Bit Chain affect BitDAO’s ability to interact with other ecosystem partners like zkSync and other developer communities?
- Should decentralization be prioritized over scalability? What is Bit Chain’s priority?
- Would Bit Chain be a POS or POW chain? If we go with POS, how would Bit Chain address the Blockchain Trilemma tradeoffs between Scalability, Security, and Decentralization?
- Do we have a team of experienced developers who could be funded to do this job? If not, is there a strategy in place to begin attracting developers?
- Is there a more elaborate plan for Bit Chain? Do we have a rough prototype yet, or is it still in the suggestion step?
- What will be the priority of Bybit and other key contributors, the development of Bit Chain or BitDAO?
- How could Bit Chain support all sub DAOs, since different DAOs have different requirements?
- …
Here’s a summarized transcript of the discussion:
Ben’s vision and proposal
[Kravi from Twitter] “What’s your motivation to build a Bit Chain, given that almost no existing blockchain is profitable yet?”
Ben:
Bybit is a centralized crypto exchange for any crypto user on board — essentialy a centralized entity, which has triggered us to think about the future of Web3.0. We deeply believe that the world is going to become more and more decentralized.
Previously, there was no choice but to rely on the government currency, but during covid, the relentless printing of money has accelerated the adoption of blockchain and crypto in general, which makes us wonder how Bybit can get involved in such a future and show our commitment?
To be frank, before the BitDAO initiative, it was hard for Bybit or even for me as someone who comes from a centralised exchange to sit at the table and talk about the whole decentralization and Web3.0 initiatives. So when BitDAO came, it triggered us in that direction, where Web3.0 and DAO are going to have a promising future with support from BitDAO. And what BitDAO essentially does is to deploy funds in an efficient way to support all the new infrastructure, technology applications, and sub-DAOs evolving around decentralization. It is the center of the whole Web3.0 initiative as some people would describe DAO as the future company form, which Bybit might eventually turn into. Anyway, it was an excellent direction for us to commit to our whole BitDAO initiative.
And as BitDAO is developing now, we see lots of amazing proposals have been achieved. Game7 is one of them, focusing on the gamification and Gamefi ecosystem. However, if we take a look at the GameFi perspective, you will start to realize the whole infrastructure is still at its early stage and amateur form.
So if BitDAO is going to be the centerpiece, we need to work with other projects, and all the applications around it. How can we really take this chance to help the builders and accelerate the whole process?
When I talked to Game7 about technological advances and the BitDAO team about DAO tooling, subDAO deployment and participation, these projects are limited by the infrastructure and fees around the changes we are sitting on now.
So I think our proposal was to steer up these projects and to explore all possible ways to contribute more or to fix these problems. Incubating these sub-DAOs will result in tons of applications, and each one of them will have a specific and high demand for infrastructure. And this is why I started the whole proposal, and I think this is going to be another centerpiece that BitDAO could initiate and deploy its development power. On top of that, low fees will encourage DAO participation, which will help the use case of bit tokens as well.
We will support those projects to reach their goals, whether they are L1, L2, or L3 solutions. I think for the future, forward-compatible technology solutions are much more preferred.
Motivation of Bit Chain
[LBrian asks] The proposal is titled “BitDAO L1 Infrastructure” and many community members are asking if there are considerations for options like an L2 or something that resembles a modular blockchain. Additionally, given that BitDAO is generally chain agnostic, how will a Bit Chain affect our ability to interact with other ecosystem partners like zkSync and other developer communities?
Jacobc.eth:
When working at Metamask, I saw a lot about the growth, success, and decline of different chains.
There are a lot of existing approaches towards compromising security or decentralization for faster transaction time in various side chains, which makes the ecosystem more accessible for people who couldn’t afford higher transaction fees at certain levels of scalability. But ultimately, they will face the risk of hacks, for example, the Axie Infinity game chain hack or other various bridge hacks.
I think there’s a strong need for a new approach to this, and what is powerful about those side chains is they provide an on-ramp into the ecosystem. Because many are associated with a centralized exchange, they have a smoother on-ramp than directly onboarding those existing layer 2. For example, it is much harder to get on BSC than Optimism. So, I personally advocate building a chain that can be maximally decentralized and taking advantage of the latest technologies, and having a strong on-ramp from Bybit to accelerate the adoption of L2, L3 or modular chains.
I’m a huge believer in zkSync and other modular chains like Celestia. I think there is a strong need for chains to have their own gas tokens either from a gas experience perspective or for game players, who don’t want to purchase secondary assets. Expensive gas fees are the hindrance that most builders are facing. Therefore, we want to build a low-fee chain that could attract diverse builders and fully enable them to develop their projects. And of course, this chain would be maximally decentralized and could derive its security from layer 1 like Ethereum.
So it’s a path to creating a new maximally decentralized chain that started from centralized exchange with growth on-ramp to accelerate the adoption of the whole multi-chain ecosystem.
[Defipaca] Should decentralization be prioritized over scalability? What is Bit Chain’s priority?
Jacob:
I can give two examples regarding it.
So there has been a huge move in the GameFi space for games to start having their own chains. Axie Infinity was the one to do it and their chain has low transaction fees and lots of interactions with their own validators. However, they are not experienced in making chains, so it has lots of security issues, which resulted in the largest hack in history. I think it’s super hard for GameFi teams to be experts in every aspect of the stack. And over time, the risk of hacking into these chains increases, especially for game chains using their own assets for both gas and security. As the price of the gas asset decreases in a bear cycle, the risk of protocol level hacking increases, and then the higher that risk goes the lower the gas token goes, so it creates a death spiral like Terra Luna.
So we need a solution to it. A couple of really powerful solutions that I’ve seen are dApp chains inside of the zkync ecosystem and Starkware, but these are basically layer 3 roll-ups that are deriving their security from layer 2, using Ethereum meta transactions to allow the end user to complete a transaction, using other assets rather than ETH. In this model, the validators running this L3 can accept generic game tokens as gas still deriving security from Ethereum and decentralization from Ethereum. Essentially, it’s a way of outsourcing decentralization to the Ethereum base layer, while having a super fast and performant game chain that players and developers feel confident to build on.
And this path is being expanded more on the modular chain ecosystem. In products like Eigen layer, a modular chain is created where an asset is used for gas and staked ETH or collateralised ETH is used for data availability.
Technical details
[RJ asks] “Will Bit Chain be a POS or POW chain? If we go with POS, how would Bit Chain address limitations due to the Blockchain Trilemma tradeoffs between Scalability, Security, and Decentralization? Especially, the Decentralization Phenomenon in BIT, as the majority of tokens are helped by a handful of wallets. With this in mind, how can we ensure that Bit Chain is as safe as possible.”
Jacob:
So historically one of the main value propositions of side chains was the usage of a custom asset for gas, and that’s a huge user experience advantage for side chains.
In the case of modular chains in L3, they all accomplish this in different ways. The L3 uses meta transactions to do it, so ETH is still the gas token behind the scenes, but the meta transaction allows the user’s wallet to spend different tokens so they can on-board into the ecosystem. However, swap is happening behind the scenes through the validators.
But it’s a little bit different with modular chains, they allow us to use a totally different asset as the gas token.
For example, BIT could be the gas token on a modular chain but in a modular chain ecosystem like Eigen layer or Celestia, they will derive its security from Ethereum by using a data availability layer and run on EVM. This allows custom assets to be used as gas and have their own execution layer. In a typical L2 or L3 proposal like Optimistic, they have to push proofs back to the main net in the modular chain model. That’s not necessary. Instead, the collateralized ETH 2 is how the modular chain derives its security from Ethereum.
Ben:
First, I think we need more utility functions for it to spread and for holders of the BIT token to hold on.
Previously the BitDAO community has voted on some long-term vision sub DAOs or application initiatives. Game7, eduDAO, or zkSync are long-term projects for 1 to 2 years. With the help of Bit Chain, the use case will increase whether it’s L1, L2, or L3.
Secondly, building these product lines will help new users from Web2.0 to onboard Web3.0. We should find the most scalable and forward-compatible solution to this.
I think so far from the community proposals, L2 seems to be a pretty good choice on the scalability part. However, you can’t sacrifice security, as Jacob mentioned those potential problems. I believe this is where Bybit could contribute. We could serve as a super app or super bridge. Actually, we are already doing so by connecting to ZK rollup as the first one, I think, and also Optimism to save users’ waiting time in deposit and withdrawal. So we’re actually facilitating the whole process to make the experience seamless.
Our goal is to make BitDAO more decentralized and bootstrap the whole initiative. Eventually, we will step back and gradually lower our wallet accounts on Bybit, making it a truly decentralized DAO in the Web3.0 world.
[Raph from Discourse] “Do we have a team of experienced developers who could be funded to do this job? If not, is there a strategy in place to begin attracting developers? ”
Jacob:
We’ve had some really great conversations with people from different projects in the ecosystem, which have inspired every participant to build the future of BitDAO together. We’ve seen lots of passionate people come in and propose ways to contribute to this community and build the most maximally decentralised solution or the most scalable solution with higher transaction throughput and lower gas fees. I think BitDAO can make something far more innovative compared to the existing projects today, because we have a diverse set of builders across the ecosystem.
Next steps for this proposal
[RJ asks] So, is there any more elaborate plan for Bit Chain? Do we have a rough prototype yet, or is it still in the suggestion step?
Ben:
I think the BitDAO Foundation, Windranger Labs, has been receiving quite a few proposals from the existing L1 chains like Avalanche, L2, and L3. I think right now the Windranger team is putting up a few solid choices for the community to vote for.
Jacob:
We have a range of different people writing proposals for specific approaches. And some engineering experiments are taking place at the same time to explore the approach and tack of specific models.
We are focusing on a fully decentralized future in 1 or 2 years, and our job is to ensure that all projects are going to be forward compatible, not just like the side chains of today.
We will see more cooperation with Avalanche as Ben mentioned before, and lots of great stuff from zkSync and Eigen layer, which is probably one of the most inspiring and interesting projects to emerge recently in terms of modular chains and growing the decentralization of Ethereum.
[Donnie from Twitter] What will be the priority of Bybit and other key contributors, the development of Bit Chain or BitDAO?
Ben:
Bybit will not be going to build the chain itself, but will fully support whoever brings up those proposals that worked on the chain and were voted on by the community. Also, Bybit will keep supporting the future projects and applications built onto the chain in terms of the spot listings, and rules of listings. So from the exchange’s perspective, we are going to fully support this Bit Chain.
Community questions
[Defipaca] How can Bit Chain support all sub DAOs, since different DAO have different requirements?
Jacob:
I don’t believe there is a single chain that can rule them all. Instead, we’re heading to a multi-chain future. I think that the chains people are going to use will have a spectrum of different security levels and different levels of decentralization for their use cases. For example, in trading use cases, it not only needs to have low gas fees but also have a high level of security because of the amount of capital that’s at stake.
I personally believe we will increasingly see more and more side chain ecosystems becoming modular chains or L3 that have their own gas model and don’t have to share their block space with every other dApps and still be able to derive their security from the Ethereum mainnet.
And as to why it is so important, I will give an example from the gaming space. We saw Sunflower Farmer, a game on Polygon, overwhelmingly consume the entire block space of Polygon.
To me, it’s a high indicator that we’re moving to a space where we’re going to have numbers of chains and these DAPP chains are going to have different focuses on different use cases. Their different parameters can meet the needs of different projects built on them, but they also need to have a high level of security derived from a base layer, whether that can be Ethereum or Celestia, or others.
The idea that everything could just side chains has been pretty thoroughly disproven in the last year by the number of hacks happening and they were really catastrophic hacks like the Axie Infinity hack.
I think it’s important that these chains start deriving more security from a base layer but still have their own user experience and approaches. One of the things that I hope we can do in the future from Game7 side is to get to a place where we can create tools to make it easier for game developers to start launching their own chains based on the previous criteria we’ve talked about. The tools that we use to create a Bit Chain could be used to make it easier for people to launch many types of chains by using the same type of stack we use.
We need to create low gas costs and custom assets and solve those user experience problems to maximally increase security and decentralization.
[LBrian] Do you think adding a Bit Chain will make it more meaningful and easier to engage in the DAO’s governance process?
Jacob:
There are a lot of things that we need to do to increase governance participation, and we do have a lot of other projects that are being explored. For example, Game7 is exploring a solution for GameFi DAO participation, but the most helpful thing would be a chain with a low transaction fee.
If a DAO has its own chain, it makes creating small value proposals much more affordable and DAO governance more sticky, so that people would participate on a daily basis, rather than once a month or two.
@StoryFiDAO
We hope to collaborate with BitDAO in the future because we have the same mission, which is to onboard more Web2.0 users to Web3.0. We empower all types of creators and their listeners to decentralize the entertainment industry.
@CryptoCloud_k
What makes BitDAO unique from other DAOs?
LBrian:
I think one thing that differentiates us is certainly the open community that we have.
The ability to contribute through AEmbassy gives everybody a quick and easy pathway to contribute no matter your skill set or background, so that’s one thing that’s interesting to me. We’ve included higher touchpoint contributors like Windranger Labs, Davion, and partners like Jon Allen from Mirana. We are thinking about how can we include subject matter experts to add real value back into this proposal and the governance process to ensure that we’re making investments across the ecosystem to seed innovation as a DAO, and how we can allocate that capital in a really efficient and meaningful way.
Jacob:
I’d say one of the things that really attracted me and was really interesting and inspiring about BitDAO was the vision of a fractal DAO. A DAO that’s creating new autonomous entities and collaborating with other DAOs in the ecosystem. Like the way, we made zkDAO with the Matter Labs team and zkSync or Game 7 being made with Forte. And then many of these autonomous entities having the potential to create other DAOs in the fractal are a really powerful growth factor, a more community-oriented way of building, which results in better outcomes because there’s community incentive alignment as opposed to everybody building the same thing from their own competitive standpoint. So I think it’s a new way of structuring DAOs and of ecosystem enablement.
@EvolvableN:
Hi Ben and Jacob, happy to see you again.
Ben, if I were you, I might ask myself a question. Why does the Board of Facebook no longer make a public chain anymore?
Let’s say from the user’s perspective what they care about and what they don’t. The users don’t care about the expensive gas fees and the slow traffic because they are no longer issues, the users now have enough options, like Polygon, Solana, Avalanche, Cosmos, and Polkadot. You can name it. What do they really care about? There are two things. One is financial freedom. How to make a slumdog into a millionaire. The second one they care about is having fun.
So let’s see the large picture. There are two disruptive pools that bring us the two major opportunities. The first opportunity is blockchain technology. It gives everyone the possibility to issue currency, which is no longer the exclusive right of the government. The second one is virtual reality. It could emerge everyone into another world where you can regain control of your life and bring the possibility to make a slum dog into a millionaire and have fun. So I think the key to Web3.0 success is a user base or a killer application, which could be metaverse. I think Mark Zuckerberg is very smart, moving from social media to VR. I think he believes in the same idea.
So I think metaverse could help BitDAO or Bybit or BIT token better than Bit Chain. I don’t have the same idea that the execution of Bit Chain will support the price of BIT token, and I don’t think the L2 will help the users, especially the Bybit users onboard Web 3.
Please forgive me if I was too straightforward. Anyway, that’s the general idea I want to bring to you today. Thank you.
LBrian:
I don’t have super clear insights on how to make this whole thing execute, but in terms of metaverses, I think that’s still an open option if we do have a Bit Chain. For me, the definition of metaverse is still pretty wide open. Actually, it’s something composable across lots platforms, not just existing on a single chain or within a single ecosystem.
We appreciate those comments and it’s always good to see everybody’s perspective here.
Ben:
I think obviously metaverse is an open option and that’s the beauty of DAO, and that is why Bybit is supporting initially all possibilities to support whatever will bring that killer application. I think we are building applications for the future in general. So I think the idea of the discussion is to openly explore what the future might come and all these killer apps you mentioned. I agree with the idea that makes a slum dog into a millionaire. However, super apps need to be based on a layer right? And hopefully, BitDAO will be able to launch something that supports this type of layer. So I think we are trying to figure out what is the foundation of metaverse, and our proposal focuses on the infrastructure level among steps to achieve metaverse.
@safaal58:
I love this project and think this project will grow every year, but I think Bybit and BitDAO have transparency problems. I read all the documentation of BitDAO and I think we need more information about the projects.
LBrian:
I would encourage everybody to have a look at the documentation to get more clarity about tokenomics and how delegation works. Additionally BIT community members can join us in Discord, Telegram, or Community Calls on Twitter spaces to learn more and ask questions.
IN THE END
Although Ethereum has a first-mover advantage, the public chain structure is obviously not a certainty. What will Bit Chain develop in the future? Whether it can emerge in many public chains and form its own moat is worth looking forward to.
Written by: @Neil, Moledao Ambassador
Twitter: @0x46dc
Stay up to date with MoleGather:
Twitter: https://twitter.com/moledao_io
Discord: https://discord.com/invite/5m4w49uXJg
Learn more about the Bit Chain proposal:
Proposal: https://discourse.bitdao.io/t/discussion-bitdao-l1-infrastructure/2508
BitDAO Discord: https://discord.com/invite/bitdao
