With the steady landing of applications on Ethereum and competing chains, and the outbreak of Layer 2 is imminent, how will CelerNetwork stand out? Dong Mo, the co-founder of Celer Network, visited the Odaily Chaohua community to explain Celer's latest expansion technology solution in detail.

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1. Please make a brief self-introduction first, and introduce Celer's positioning, which problems in the market it mainly solves.

Hello everyone, I am Dong Mo, the co-founder of Celer Network, and I am very happy to participate in the AMA hosted today.

Dong Mo: I received a Ph.D. from UIUC Computer Department in 2017, focusing on high-performance distributed systems and network protocol research. Blockchain is part of my previous research, so I entered this industry naturally.

In 2018, several of our co-founders (graduated from MIT, Princeton University, University of California, Berkeley, and UIUC with Ph. Together they founded Celer Network.

We believe that the layer2 expansion of the entire Ethereum is a comprehensive problem, not a purely technical solution that can perfectly solve all layer2 expansion problems. At the beginning of its establishment, we focused on the "state channel" solution. Celer is also the first state channel project on Ethereum.

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2. The expansion of the public chain has been a topic in the industry for many years, and with the steady implementation of applications on Ethereum and competing chains, the expansion plan has also attracted much attention. Currently, there are many Layer 2 expansion solutions, such as ZK Rollup, Op Rollup, xDAI (sidechain), Matic (Plasma), etc. Which path did Celer choose for its expansion solution? Why?

Dong Mo: Our initial technology is mainly state channels. We released the world's first generalized state channel network mainnet, and CelerX, an ecological project based on this state channel technology, has also achieved large-scale application.

We have also been paying attention to and participating in promoting the development of the entire expansion ecology. Last year, we proposed the concept of hybrid rollup. Recently, the expansion solution used by Layer2.finance we launched is an innovative optimistic rollup architecture, which does not require any DeFi protocols to be migrated to Other chains can expand the existing entire DeFi protocol. We are currently working with some partners to develop the ZKRollup version of layer2.finance. For the future multi-chain architecture, we have also released cBridge, a fast cross-chain and multi-layer2 chain liquidity transfer solution that continues the state channel.

In fact, it is not difficult to see that we have adopted many different technical models in the direction of layer2. We believe that all the L2 technologies mentioned above (except some that cannot be called L2) do not necessarily, or even should not exist independently, but should be taken as a complementary whole.

The best example of this is cBridge. Although cBridge is established based on the state channel network, at the same time it helps the various rollup chains connected to exist as a fluid highway network.

In fact, you may not be very familiar with many technologies, so I would like to share with you my views on these expansion solutions.

Let me talk about the side chain first. I don't think the side chain is a Layer 2 solution.

Strictly defined Layer 2, its security only depends on the main chain and does not depend on any third party. As long as Layer 1 is safe, then Layer 2 should be safe, including when Vitalik strictly defines Layer 2, and the safety of the side chain depends on its pledged nodes.

Previously, the advantage of sidechains was that they were compatible with EVM. It was competitive because there was no solution that was both EVM compatible and cheap. But when Rollup appears, it is compatible with EVM and cheap, how can the side chain survive? With the continuous iteration of various Layer 2 solutions, I think many side chains are about to be eliminated. Although it seems that there are still many applications, we need to look at historical trends.

Among these expansion plans, the one that is about to withdraw from the stage of history or has already withdrawn from the stage of history must be Plasma. Matic does not actually use Plasma, they are actually a PoS sidechain architecture, which is no different from a separate blockchain plus an Ethereum bridge. It’s just that in order to make layer2 easier to promote and easier to get the politically correct acceptance of the ETH project, this is very understandable, and their strategy is also very successful.

We all know that Plasma cannot solve the problem of state availability, so in this case, Rollup is derived. The Optimism team itself is doing Plasma, and later switched to Rollup. So I think Rollup is a natural derivative and extension of Plasma.

However, ZK Rollup and Optimistic Rollup were basically proposed at the same time, because Plasma could not continue and encountered the problem of state availability.

Rollup is essentially a derivative of Plasma, using Layer 1 to solve the problem of state availability. We know that Plasma does not record all transactions on the chain, and Rollup records more transactions on the chain than Plasma. At the same time, it also records StateRoot, but it still does not record the full state of all transactions on the chain. By not recording the full state and not doing calculations on Layer 1, the transaction cost on the entire Layer 2 is reduced without sacrificing any security for Layer 1.

Whether it is ZK Rollup or Optimistic Rollup, their core point is this. The main difference between them is how to prove whether a Layer 2 block is a valid block.

Generally speaking, Zk Rollup has some inherent advantages. It does not require a complicated challenge period and a layer of verification logic. The overall verification logic can be realized directly through a Proof, and the contract of the first layer is also simpler. Just verify This Proof is enough, which is the biggest benefit based on zero-knowledge proof. But zero-knowledge proof also has its own problems, and its ecology is relatively closed. For example, StarkWare, their current technology is not open source, and you may need to pay the company to use this closed source technology.

In the short term, I think Optimistic Rollup is more suitable to undertake some demand overflow. Optimistic rollup may land faster, because EVM (Ethereum Virtual Machine) transplantation can be implemented relatively easily on Optimistic rollup. Both the Arbitrum and Optimism teams have implemented generally available EVM transplantation.

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3. Compared with similar solutions, what are the unique advantages and innovations of Celer? For example, we recently heard that Arbitrum has high delivery capabilities and service enthusiasm. Is there any competition between Celer and Abritrum?

Dong Mo: It is not a competitive relationship at all. We have a good relationship with Arbitrum both at the project level and personal relationship. At that time, when the founders of our two projects were both PhD students, they met every day to read papers and complain. Arbitrum has done a very good job. From our current experience, we think Arbitrum is the leading team in the direction of supporting EVM Optimistic Rollup.

Our solutions are very complementary. Our cBridge is a very good layer2 liquidity solution. Users no longer need to wait for a long time to quickly transfer assets between Arbitrum and layer1, which solves the big problem of liquidity.

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4. Celer’s official website indicates that it can be applied to every public chain, and it also shows that it has technical cooperation with Polkadot, DFINITY, aelf and other public chains. Where is the applicability boundary of Celer? When connecting to public chains with different consensus algorithms/network architectures, do we need to adjust our general SDK? Technically, how to bridge different public chains, have you encountered any difficulties in the process?

Dong Mo: The applicability of Celer does not have a clear boundary. We can provide expansion for various public chains. In the face of different public chains, we must first check whether it is compatible with EVM. We can easily access public chains that are compatible with EVM, but for public chains that are not compatible with EVM, access will be relatively complicated. For example , is the same set of smart contracts. We wrote it in C before, but now we need to write it again in Java or Go. It is mainly a matter of workload.

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5. Layer2.finance, Celer's latest expansion technology solution, sounds great. Which DeFi projects currently use L2F? Is there any specific data that can be shared with you, such as the extent to which a certain type of operation or operation has achieved cost reduction and efficiency improvement after using L2F?

Dong Mo: Maybe everyone thinks differently. l2f (layer2.finance) does not need a project to "adopt". The user's money is aggregated, and a user's identity is used to play this defi, so it should be us to launch our various fi projects for l2f users. At present, our DeFi protocol does not need to cooperate, and we cannot refuse the access of l2f.

L2f has already launched Cmpound, AAVE and Curve. In the future, more high-yielding, multi-chain DeFi protocols will be connected, such as Cream, Liquity, yEarn, DODO, Mirror, Alpha Finance, SushiSwap, Uniswap, BarnBridge, and 1Inch.

L2f has mainly two huge benefits. First of all, save the gas fee, because we will form a group of users who are willing to play the same defi for a period of time to play together. How many users are playing at the same time is how many times the gas fee is reduced. It is similar to Pinduoduo or replacing a taxi (directly using layer1 to interact with DeFi) with a bus (using DeFi through layer2.finance).

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6. What is Celer's future direction and short-term plan in terms of technology development? (We saw that the roadmap on the official website stopped in the second half of 2020.)

Dong Mo: At present, there are two main technical development directions. One is to continue to improve L2F and add different Defi projects and functions. On the other hand, we will commercialize cBridge based on state channel technology to help everyone realize L1 quickly and efficiently. Liquidity transfer between L2, L2 and L2, and different L1.

Our cBridge will be launched between Q2/Q3. head

The launch of r2.finance v0.1 is just the beginning. Layer2.finance will adopt a community-driven agile iteration cycle to continuously develop and improve in the following two aspects.

New DeFi protocol integrations. Just like the new railway network in real life, layer2.finance will quickly integrate more DeFi protocols as the main network matures. In the near future, we plan to add support for Cream, Liquity, yEarn, DODO, Mirror, Alpha Finance, SushiSwap, Uniswap, BarnBridge, 1Inch, and we will be open to community suggestions to adjust the corresponding support priority.

Rollup core upgrade. Improvements to existing core functionality and the release of other new features often involve layer2 rollup protocol upgrades and, in some cases, user migrations. Therefore, these will be split into several iterative releases. The Layer2.finance function iteration will widely accept community opinions and be actively contributed by community developers.

According to the current plan, we have the following development and function blueprints (the version numbers are sorted from the earliest cities in the world to build subway lines).

- Multi-chain support. If the community proposal is passed, layer2.finance will simultaneously support and deploy in other popular blockchains such as Binance Smart Chain and other layer2 rollup chains, and access various on-chain DeFi protocols.

- Multi-chain support. If the community proposal is passed, layer2.finance will simultaneously support and deploy in other popular blockchains such as Binance Smart Chain and other layer2 rollup chains, and access various on-chain DeFi protocols.

- Support just-in-time (JIT) strategy position execution and flexible slippage buffer. This will allow layer2.finance to support a variety of risk preference strategies, such as stablecoin pledge agreements with high volatility and so on.

- Policy Risk Firewall. The strategic firewall will allow layer2.finance to quickly access newly launched DeFi and strategies, and completely isolate and control risks from other strategies.

- Asset and DeFi token transfer on Layer2. Allow users to freely exchange positions without performing on-chain operations, further reducing costs and increasing speed.

- Flexible charging interface. Allows for decentralized governance and flexible control over how fees are charged.

- Decentralized governance. Publish the community voting process on the proposal, any governance keys will be revoked and migrated to a governance model using multi-signature.

- Liquidity mining. Whether, when, and how to start liquidity mining will be determined based on community feedback and suggestions.

V1.1 version number "Chicago" (Q3 2021):

- The ZK Rollup version is online. Based on a huge user base, we will explore and develop a version based on zk rollup to further increase the scale of economic benefits, thereby further reducing the cost of using DeFi for users.

- Decentralized block generation through Celer SGN. Celer's state guardian network will be connected to the rollup and act as a distributed block producing node for the second layer of blocks to ensure the stability, availability and fairness of the system, while adding a layer of high-speed security guarantee.

V2.0 version number "Paris" (Q4 2021):

- One-stop cross-chain DeFi integration through cBridge. Through Celer's cross-chain cBridge, layer2.finance will be able to integrate the multi-chain DeFi ecosystem into a single entry in a non-custodial and trustless manner. This allows users to stay in one chain while accessing the DeFi protocols of all other chains without complex fund management across multiple chains.

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7. What stage do you think the Layer 2 field is at now? Some people say that Layer 2 is on the eve of the outbreak. Do you agree? What will the market size be in the future?

Dong Mo: To quote Churchill, "This is not the end, or even the beginning of the end, but it may be the end of the beginning."

You may think that this year, several layer 2 projects have been launched one after another, and there will be a big explosion of Ethereum applications in an instant. I think so too, but I feel like there are correct and rational expectations.

Layer 2 technology has gone a long way in the past period, and various solutions are iterating and evolving. Today, we can say that we have basically fully explored the overall design of the previously unknown layer 2 expansion from the technical solutions. In terms of space and all possible technical trade-offs, it can be said that the entire community is very confident that layer2 is a viable path, and the solution is either already online, or it is not far from being online. That's why it is said that this is the end of the beginning: we never knew if we could do it, we didn't know how to do it, we have come, we know we can do it, we know how to do it.

So what's next? Next, in addition to the core of layer2 expansion, it is also important to have supporting ecological support, from wallets, to software services, and even to centralized exchange support and so on. At the same time, the innovative application on layer2 does not mean that the application that was previously on layer1 is moved to layer2, which is considered innovative, this is not the case. Real innovative applications and models themselves also need a certain amount of time to brew and produce.

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8. Layer2.finance has been launched on the mainnet. As the most important product of Celer, can you share with you the launch of L2Fayer2.finance?

Dong Mo: We launched the version code-named "London" layer2.finance v0.1 on April 23, and the application link: app.l2.finance.

We have launched the layer2.finance v0.1 opening reward activity: 0 GAS Fee to play DeFi! In order to demonstrate our ability to really reduce the cost of using DeFi, in the next 60 days, users will be able to use the supported DeFi protocols through layer2.finance for 100% fee-free! In addition, for the first 500 eligible users, we will also reimburse the handling fee for transferring from the Ethereum mainnet to layer2.finance.

If you are interested, you can read this article for more information:https://mp.weixin.qq.com/s/L20JXVBpM2eeciGZgCjIsQ

Can be accessed from here:https://app.l2.finance/#/invest, experience our layer2.finance.

We have also prepared a detailed mainnet usage tutorial for users, link:https://docs.l2.finance/#/tutorial-cn

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Q1; What is the ecology of celer? What does it have to do with Polkadot?

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Q2: Excuse me, if there is a security problem (such as funds being stolen) in the protocol of layer1 connected to layer2.finance, will it affect the security of funds on layer2.finance?

Dong Mo: That’s a good question. We isolate each DeFi protocol through a policy interface. If one protocol is hacked, other protocols and funds connected to layer2.finance will not be affected.