In this fireside chat with Vitalik, we will explore coordination by examining the multi-layer coordination challenges and potential solutions in the Ethereum ecosystem, in the hope of Inspires thinking about how to manage coordination problems in decentralized ecosystems and provides insights for overcoming these challenges. The following is the text content?

01 Fireside Chat

Bruce: Hello everyone, I am Bruce, a core contributor of LXDAO and ETHPanda, today we focus on the theme of "Coordination" to explore multi-level coordination conflicts and possible solutions in the Ethereum ecosystem. I hope that through this dialogue, everyone will be inspired to think about how to deal with coordination issues in a decentralized ecosystem, and gain inspiration for dealing with coordination challenges, so that the entire ecosystem can run more smoothly and efficiently.

Vitalik As an important participant and observer of the Ethereum ecosystem, we are very happy to invite him. First, let Vitalik give a brief introduction.

Vitalik: Hello everyone, I am Vitalik Buterin, Bitcoin Magazine (Bitcoin Magazine) Co-founder of. I have been involved with Ethereum for the past 10 years. I started out in research, but have also been involved in many different aspects of the ecosystem.

Bruce: Today we are here to discuss coordination-related topics. From your perspective, how do you define coordination in Ethereum? Are there some good examples of coordination in the Ethereum ecosystem?

Vitalik: I think alignment can mean a lot of different things. In an abstract and general sense, coordination basically means that multiple people act together toward some common goal, rather than acting in a way that ignores each other's needs or acts against each other. This can mean many different things. For example, this might mean that people contribute to certain public goods, such as projects that are valuable to the entire ecosystem.

It may also mean that people work together on some common standard, like people switching from speaking one language to another.language because another language is better in some ways. This is basically what happens every time the Ethereum protocol is upgraded. It might even be a highly chaotic effort of people doing different things completely independently, but still ultimately contributing to some common goal. Wikipedia editors are one example. No one is trying to dictate to others, and no one is forcing everyone to do things the same way at the same time. But the result is that you still have many contributors contributing to something that benefits everyone. So I think all these different types of coordination are happening within the Ethereum ecosystem, and this ecosystem relies heavily on that.

Bruce: Speaking of the Ethereum ecosystem, the Ethereum community encourages diversity due to the concept of the "infinite garden". However, this diversity may lead to competition for resources and reputation or similar problems. So, what conflicts and coordination challenges do you observe in terms of competition and cooperation between communities? What solutions do you think can lead to better collaboration and development between communities?

Vitalik: Of the challenges we've seen so far, one of the challenges I think What we have solved very well is different Ethereum clients working together to upgrade the Ethereum network and update their code at the same time, many different parts of the ecosystem are doing this, which is actually a pretty impressive achievement . Ethereum is a unique ecosystem, with the largest Ethereum client, Geth, estimated to only account for around 52% of the network. This is not seen elsewhere. In most ecosystems, basically one actor controls almost everything. We see this in browsers, we see this in Bitcoin clients, and we even see this in many implementations of social protocols that are trying to decentralize.

The challenge with this approach is that we still have to agree on the next upgrade each year. There are a lot of structures within Ethereum that try to do this, that try to help achieve this goal. For example, in-person gatherings are held every year, several times in fact. We had one in Kenya and a smaller gathering yesterday. Then there are AllCoreDevs meetings, online discussions, incentives, and more. Initially, the Ethereum Foundation provided some very significant funding to these client teams. Even today it does some funding, but the majority of their revenue still comes from the clients themselves, and here's an example.

Another example is funding public projects across the Ethereum ecosystem. From historyHistorically, the Ethereum Foundation has been doing this, but now we're seeing the emergence of Gitcoin Grants, the Protocol Guild, and other foundations. We released our transparency report about two days ago. One of the interesting statistics is that in terms of the amount of public funds allocated in the ecosystem in 2022 and 2023, foundations only account for 49%, just under half. 51% were from other organizations. Now I think there are other challenges. One of the big challenges is standards cooperation between Layer 2 and between wallets. This is an area that is currently starting to be discussed. And all these discussions about supporting public projects continue. Now more people are trying different experiments, as Gitcoin, Optimism, and the Protocol Guild have begun to lead the way.

Bruce: You just mentioned issues such as coordination conflicts between clients, and basically, with the development of the Ethereum ecosystem, EIP, The ERC standard setting process also involves more stakeholders, which makes the process more compact and slower. So what are the main conflicts you have observed during the standard setting process? How do you think you can balance openness and efficiency to more effectively reach consensus and drive the development of standards?

Vitalik: I think there are three types of conflicts, and it’s easy to think about them separately. important. The first is that different groups try to push different standards because the standards they push are beneficial to them. This doesn't just happen in Ethereum, it happens everywhere in the world. The second type of conflict is when people push for different standards simply because they either have what is called "non-native invention syndrome" or because they want the pride and social status of creating something that is used by everyone. The third type is actually not a conflict at all, but people have some minor differences of opinion, and you just need to work hard to get everyone to sit together and put aside their differences, and you can reach a solution that everyone is satisfied with.

For the first case, I think one thing we can do in a decentralized world is to establish standards about what types of standards might be adopted basic specifications. For example, if you publish an account abstraction standard and it requires that sending account abstraction transactions go through my server, no one will accept it. People only accept what seems truly neutral.

And the other thing we're trying is because at Devcon and ETHcc, a lot of people are concerned that there are so many competing weeks.Feeling dissatisfied with side activities. So we did an experiment where we would discourage people from hosting any kind of side event during Devcon. Side events can take place before or after Devcon, and during Devcon we encourage people to set up a Community Hub within Devcon. If your community center does not simply advertise its own site but can promote substantive cooperation between different partners in the same industry, then the foundation will be more inclined to support it.

So basically, we will not hold Optimism events, Arbitrum events or Starknet events separately, but will hold a multi-Layer 2 (Multi-L2) event. He works as part of Devcon. This way, collaboration is encouraged to happen, at least on a social level, rather than one person driving everything and then passing the proposal off as their own. This is also what we are starting to try with more standards, trying to establish this norm. I think this helps with other issues as well. One side is that sense of pride that people want to have something that stands behind them. On the other hand, there is a very human aspect, which is the unwillingness to succumb to the "strong dominance" of others, or to resist what others impose.

The solution to both problems is to try to encourage more collaboration, even from the very beginning of a process. As for the third problem, it's that people aren't talking to each other enough, we just need more people and organizations to create those forums that can have that conversation.

Bruce: Thank you. The next question is about Layer 2. Because we all know that Layer 2 solutions play a key role in Ethereum scaling. So, what do you think about the coordination challenges between Layer 2 and Ethereum? What challenges or strategies exist in aligning the development and governance of Layer 2 solutions with the rest of the ecosystem?

Vitalik: Layer 2 initially started out in a very independent way, a lot People started to build their own technology stacks, just trying to make something usable, something that could expand Ethereum relatively quickly. And now the real concern of the ecosystem this year is basically that Layer 2 already exists, they can function normally, and they can achieve their expected goals. So everything is moving to Layer 2. But how do we ensure that Layer 2 is actuallyActually feel like and operate as one ecosystem instead of feeling like 40 different blockchains? Here are specific examples. For example, if you have tokens on Optimism but some apps on Arbitrum, the deposit process, i.e. moving the tokens from one place to another becomes very difficult. There are still many non-standard aspects in similar situations, and there are too many things that do not have unified standards.

So we have started discussing how to standardize these cross-Layer 2 content, which includes the participation of the Layer 2 team and the wallet team, which is making great progress field.

Bruce: Thanks, due to time constraints, Vitalik, do you have any other thoughts on coordination to share?

Vitalik: When it comes to the topic of coordination, I think there are two important aspects, One is the social level, which is communication between people, and the other is the economic level. Funny thing is, people like me tend to put too much emphasis on the economic aspect. But I think in this conversation, we focused more on the social aspect, which is actually good.

But the economic aspect is also important, and you cannot try to force people to behave in ways that seriously violate their incentives. Because as you can see, if you rely too much on moral pressure, eventually, people will get frustrated and angry, and then rebel against you, and sometimes even tell other people some completely different crazy ideas. So I think in that regard, what we've managed to do as an ecosystem is we're good at funding small projects. For example, if you have an important public good that needs funding, and you only need 100,000 or 300,000 US dollars to make a demo, then many people will fund it, including the Ethereum Foundation, individual funders, DAO organizations, and individuals. Layer 2 projects, ETH big players, a lot of people will give you $300,000 if they see the demand.

The challenge we face is when a project changes from a demo requiring $300,000 to a mainstream project that requires $30 million and needs to serve the entire Ethereum user base. project, the incentives basically shift from full socialism to full capitalism, like at the $30 million level, there's really nothing that really motivates you to do socially beneficial behavior other than market incentives. Because everyone basically says, you already haveThat's enough money. And we want to fund projects that would otherwise not be funded.

When you are already a company, you have users, you have investors, then the next challenge is, when the incentive mechanism is fully marketized, continue Doing things that are good for society, like following standards, not trying to create vendor lock-in, continuing to be open source, etc., is like the incentive starts to disappear. So I think a fundamental challenge is, how do we really improve incentives at the $30 million level? This, to me, is an unresolved issue. I really welcome people to try different ways to solve it.

02 Audience Interaction

Q

I really wanted to ask a question about standards, but something you said really inspired me. That sudden shift from a small amount of money to $30 million that you just mentioned. While the two situations operate differently, isn't this sudden shift a problem in itself? Couldn't there be a more gradual approach? What experiments can we do? For example, in the case of small businesses in Web3, I think we don’t see enough of these types of businesses. It seems like everyone wants to hit the ground running or just hang out, use saunas and other fun things, how can we support more small businesses? I'm curious how you think about this, or what interesting attempts you've seen?

Vitalik: I think there are different types of support. One way to support it is to be more proactive. If there is a promising project, it is necessary to provide them with a user base to help the project be used in a coordinated environment so that it can have contact with reality and can be improved. For example, as an example at Devcon, we have practiced a lot of things, ZK authentication tools, such as Zupass and many different projects on the chain or open source. The goal is partly to help projects overcome the barrier of network effects, where no one has heard of them and no one is using them, which is a form of non-monetary support.

On the one hand, in terms of financial support, once the project develops to a high level, the problem is basically that we need to find a balance point, do you want a It is not entirely a charitable financing model. Because even at the $3 million level, if you rely solely on philanthropic funding, you're going to burn through that quickly. You need a financing model that is not pure charity, it expects to see returns but at the same time is not just driven by returns. The key question is to find who are the players who are financially willing to participate in this model?

I think people are willing. There are many people, even many ETH Whales (big Ethereum owners), who hold ETH because they believe in this vision, even Are willing to make some small sacrifices, but at the same time, they are in no rush to give away everything they have.

On the other hand, the question is what is the actual institution and what is the model, that is, what kind of funding model can really encourage projects to remain open source and remain standards-friendly , keep it decentralized, and ideally, if you end up being very successful, you can give back to the next wave of projects.

I know there are various projects in the ecosystem that are basically trying to bring together funding from different large ecosystem players, and the basic theory is that if You have those funds, then at least if they're confident that everyone is on board at the same time, they'll be willing to invest in projects on that basis, but as of now, it's certainly early days.

Q

Another question is about people starting their own projects rather than building on existing There seems to be little incentive to work on projects. If you're part of someone else's project, the financial rewards aren't there either. What we really need now is user experience and onboarding. But people, especially VCs, if we want to do a bigger project and they're only funding the infrastructure, what can we do to improve that?

Vitalik: That’s a good question. An interesting thing is that both our private goods funding and our public goods funding fail somewhat in this regard. Because if you look at projects like Optimism's retroactive funding or Gitcoin, one of their major weaknesses is that they basically become popularity contests, and in order to get a lot of funding you have to have a high public profile, you have to have Your own marketing department, like you're basically a political party. But there are a lot of people who are not interested in this model, who don't want to be full-time, self-promoting politicians. And it’s essentially a model that plays into existing social status trends that clearly favor creators over maintainers.

I think at least in terms of public funding, if we can be consciousEfforts to create mechanisms to identify and support those maintainers could be of great help. What I've seen in public goods funding, like the Retroactive Funding Community Project, is trying to do this is basically trying to identify the downstream dependencies of those big projects that everyone thinks are valuable, identify the dependencies, and then identify the dependencies of those dependencies. This way you can support the entire graph.

There are also people in Optimism who even explicitly try to dig and find such projects. For example, the people who invented Keccak, a hash function used by everyone, were academics who didn't know how to present themselves on Twitter. They received a $200,000 retroactive grant several years ago. So I think at least being intentional about creating a public information graph that shows who contributed to what and makes it easier to follow is an important dependency in itself. Because once you have this, you can more easily support any mechanism that tries to improve it.