Hack the Rainbow Session 1: Justin Drake and Illia Polosukhin - Grilling the Rainbow
The first session of the NEAR Hack the Rainbow Hackathon featured a high level discussion between Justin Drake - a leading researcher working on ETH 2.0, and Co-Founder of NEAR Protocol, Illia Polosukhin.
This session was special for a number of reasons:
For one, it marked one of the first public dialogues between two Layer 1 protocols that will play a seminal role in defining the future development of cryptocurrency. Second, there were a number of interesting details pertaining to NEAR’s sharding design, the larger goal of the Rainbow Bridge, and long-term NEAR-ETH opportunities.
The general topics discussed ranged from the nature of blockchain protocols, to the future of crypto, the need for interoperability of assets in a decentralized manner, and the importance of state security as blockchain-ecosystems expand!
Note: Full Transcript of the session can be found here.
Point 1: The Point of NEAR is to Free Developers To Build and Users to Engage - Blockchain Technicalities Aside!
Dynamic sharding on NEAR ultimately means that developers and users can leverage the full benefits of blockchain without having to worry about how their transaction is validated among all of the others. Illia’s answer indicates that the sharding design of NEAR ensures that the development of shards on the network in relation to the main-chain lifeline is a parallel feature to what users and developers can build and deploy: Validators and chunk producers need not worry about Apps or Users, while such stakeholders can grow their own solutions without worrying about the stability of the blockchain they build upon.
Illia’s Take: “The whole point of NEAR is that as a developer and a user, you don’t need to know about shards at all. Like literally 1 shard, 4 shards, 100 shards, it is fully transparent to the user, and there are multiple reasons why this is done. What this allows us to do, is it verifies the main chain lifeline - all of the shard information get’s aggregated in the main chain. As the chunks are produced, their head is included in the block and then the block has in that header all of the aggregated merkle of all the transactions across all the shards. So now you can prove any event, anywhere in NEAR on any shard, from like one lifeline.”
Point 2: Applications From The Bridge Are Coming
Justin asked Illia the following question: What are the main applications that you are interested in? What are the main motivations for you to build this Rainbow bridge so early, even before you have activated deposits even? Illia’s response is telling: The Bridge is meant to help facilitate the transfer of assets from Ethereum that can be used to bolster development on NEAR. Whether that is in terms of liquidity, access to DeFi, NFTs or other forms of arbitrary communication. Notably, there is also an opportunity for Ethereum teams to use the bridge to bolster the usability and effectiveness of their own applications on NEAR, while still keeping the project itself on Ethereum.
Illia’s Take: “So a bridge is a way to bring these assets that are originating right now on Ethereum - and bring them to NEAR and unlock all of these abilities. Obviously as this progressed, there are a lot of applications that might have originated on Ethereum but don’t fit right now in the current paradigm of financial craziness. They need a home that still connects to Ethereum because there is still more liquidity there even for non financial assets like NFT’s or some other things. So this bridge can also host arbitrary communication - sending other types of data information - which NFT’s are, and this was also in its purview. So in reality, as it progressed, we kind of realized this can become a platform to really connect with Ethereum and provide all of the functionality that people want early on especially coming from Ethereum, kind of on NEAR - while we still can develop in the Ecosystem.”
Point 3: The ETH-NEAR Bridge is a Win-Win Initiative For All of Crypto
Perhaps one of the most important points to remember from the entire discussion, is that even though Ethereum and NEAR are considered Layer 1 Protocols that offer similar services, they are not necessarily competitors! Rather, as both Illia and Justin confirmed, the ecosystems can mutually benefit from the development of one another: They can learn from the successes of one another, while collaboratively offering decentralized services that will change the fundamental structure of finance, data privacy, and ownership!
Justin’s Take on This: In general, I am most excited about these win, win opportunities. It’s about the whole ecosystem of blockchains, and which hopefully being complementary and adding to the whole network effect. And the real competitor being the legacy system. I am excited by the idea that people who want to hold ETH and participate in apps where the gas price is too high but they still want to engage in games - that seems like one of the great reasons. Another thing I am excited about is the possibility of Ethereum solidifying itself outside of this DeFi hub. Write now you have these things like Uniswap and it is all Ethereum centric. The idea that you can trade in NEAR tokens on Ethereum is great and it is one step further towards removing centralized exchanges which in my opinion are one of the best onboarding platforms - but now they are preventing innovation because there is all of this capital locked that is non-programmable, siloed, and custodial. The more we move away from centralized exchanges the better.
Illia’s Take on This: This space is about figuring out what works and then everybody adopting it. It naturally is this collaborative competition. As soon as we figure something out, then everybody will have it. You cannot have too much competition without collaboration. I think in general, what we are all working towards is working - We really were excited from the beginning was about making more working stuff for developers to build easier, and getting users to be able to onboard their applications easier to making sure the gas fees and all of these things will be addressed, so I am excited to see how we can learn from each other and get to more working applications and get to more users using this, and to be part of the Ethereum community. I feel like we have been part of the Ethereum community and always were, and now we are trying to innovate a little outside of the mainstream, but making sure that we work with the community together.
Point 4: NEAR Can Help Bring Back Certain Dapps on ETH That Are Too Expensive Right Now
A lot of people assumed that the NEAR - Ethereum Bridge would largely be to the benefit of NEAR. But what Justin reminded everyone in this session was that there were a number of applications built on ETH that can make a strong comeback through utilizing the NEAR Bridge!
Justin’s Take: I want to see the return of these applications that require a low gas - things like Games, CryptoKitties, things like micropayments, even things like ENS - just decentralized domain names. If it costs, 10 - 20 - 30 who knows where gas prices will go to just renew your domain on an annual basis. I am also excited by enlarging the area of innovation. The NEAR team has made quite a few innovations and I think this opportunity is for everyone to learn from each other, and often times this space is very good at copying, so we have seen farming and now everyone is doing farming, etc. I am looking forward to some of these great copyable ideas that the wider space can provide as well.
Point 5: NEAR is Not Planning on Having More Than 100 Block Producers Anytime Soon, In Order To Keep a High Finality
In a discussion on the nature of block validation and finality, both Illia and Justin discuss the spectrum available to different blockchain ecosystems, and the tradeoffs involved therein. Essentially it boils down to this: Fast Finality requires a lower number of block producers, whereas more block producers will increase the amount of time required for finality. NEAR currently can offer 1 second blocks and 2 - 3 second finality. In the long term, there will be many more chunk validators - validating shards - than block producers - validating entire blocks of all chunk headers.
Illia’s Take: So with the doomslug, the way it works is there are some kinds of thresholds that allow and right now it is configured for faster finality which means tighter communication, which puts a bound on how many total block producers you can have with that finality.
So for context the conversation is basically that you can have fast finality, but then you need a low number of block producers, or you can have a lot of block producers, but then the finality will be kind of spanning longer and longer. Right now we have 1 second blocks, roughly, and 2 to 3 second finality right. Which in comparison to the ETH 2 approach you guys have like 12 second slots and 13 minute finality or something like that in the best cases. So that is a spectrum, and finding how to create tiers of security - that is what we did with our shards. There will be a lot more validators on the shards then block production.
For more information on the structure of the bridge, the importance of security on the blockchain, and the value of Layer 1 Protocols in the development of Crypto check out the Full Transcript of the Session Here!