nishil
@_nishil_
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on a journey from magic internet money to real money @biconomy @Safaryclub @bitspblockchain
Joined August 2015
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Pinned Tweet
One of the major shortcomings of
@ethereum
is the complicated UX.
Let's learn how EIP 4337, proposed by
@nethermindeth
&
@opengsn
in sep'21, tries to solve it with Account Abstraction.
A thread 🧵...
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120
579
Generating decentralized trust is quite hard.
Let's learn how
@eigenlayer
is leveraging this very fact to fuel innovation on
@ethereum
.
A thread🧵...
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Account abstraction is the solution to the FTX problem.
Instead of funds being handled by a CEX, we need self-custodial wallet solutions on top of DEXes.
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5/ You'll be surprised to know that only ~8% of these failed txs are by actual users, rest of them are failed arb txs by onchain bots.
The arbitrageurs spam the chain because the cost to spam is minimal compared to the resultant rewards of a successful arbitrage.
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3/
3. Dropped Transactions: The tx doesn't appear anywhere, in this case the the tx hasn't reached the block leader. This is what most of the users are seeing currently. This is a networking layer problem and not a problem with consensus/execution.
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18/ So that's the gist of the main issue folks.
Teams like
@jump_firedancer
,
@Anza_xyz
,
@solana
etc are working to ship fixes to the networking layer. These patches are being rolled out as we speak and some major ones are said to come out in the duration of coming weeks.
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Woah it’s blowing up.
Can someone from Solana please gift me a cool pfp for my contribution? 🥹
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2/
2. Executed but Failed - gas is paid, but the execution returns error. This happens when the conditions may not have been met, like a mint they're trying to buy is sold out or the slippage exceeds as the price moved quite fast, etc.
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15/ To understand better, lets imagine a situation where each block leader has X connections it can talk to.
Now during times of high activity - the block leaders start receiving requests for 10-100X number of connections...
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11/ Solana recently upgraded to QUIC as its networking layer, it helps setup a connection between a user and the block leader.
And as Solana has continuous block production and does not have a mempool, loosing a connection would mean that tx would not land on the block.
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1/ Lets start from the very basics.
From the point of view of a user, when they make a trade, there are three things that can essentially happen:
1. Tx gets executed successfully without any error.
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6/ For example: they can spam the chain multiple times a day which would cost them a few hundred dollars (because of low fees on Solana), and they just need to land that one transaction to earn upwards of $100k denomination profit.
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17/ Essentially, to win, you must spam more than the others
And because there are multiple bots who would spam the network with connection requests, it becomes harder and harder for regular users to establish a connection and land their transactions.
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Hey BITSians on my TL,
We
@bitspblockchain
are planning on hosting a BITSian gathering in Bangalore for all the students and alumni in the web3 space.
If interested then drop a '🤩' below.
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Why tf does BITS not have a straightforward way for students to bring their own internship companies for PS.
So many people have good off campus internship offers.
Makes no sense for us to pay 80k, and on top of it hustle a way to reg the company we already have an offer from.
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4/ Now you might ask what is a fucking networking layer, but we'll talk about these dropped txs, and why they are the main reason of congestion on Solana rn, a bit later.
First lets address the failed txs that land. Bc its imp to understand why failed txs aren't the main issue.
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22/ At last I'd want to end with the note that I believe Solana is fighting for the right tradeoffs that are indeed hard to defend.
Just like Ethereum emerged from its fair share of issues, Solana shall too. Here is a thread that summarises it well:
David, maybe you weren't in crypto in 2017 or you just don't remember, but CryptoKitties made eth unusable for weeks. It resulted to a rethink of some design decisions, helping to lead to the robust eth L1 we know today. This also happened in 2016 with the Shanghai attacks.…
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7/ Thus its imp to note that these failed tx do not point towards liveness failure, the blockchain is running as expected and these are just few bot txs that ended up getting failed because the tx conditions weren’t meant.
This is not the reason for the bad UX on Solana rn.
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13/ This new architecture prevents Solana from getting HALTED during increased network activity.
It might be unusably congested, but atleast it won't stop this time eh?
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21/ I have briefly talked about current issues with Solana's transaction mechanism in the thread below. Feel free to give that a read to understand better.
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8/ Infact Solana has had a consistent rate of ~50% failed transactions since Nov last year. If you go back in time in the failed vs successful chart I put above, you’ll find that it was similar before as well.
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16/ This is when block leaders can choose to drop certain connections.
However, instead of connections getting dropped on a set criteria (like drop all with fees lower than x), currently these connections would get dropped randomly...
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14/ So you might ask, if everything about QUIC is so well designed, why is Solana so fucked rn?
So the problem is that even though block leaders can now throttle certain connections, the logic on which connections to throttle has been poorly implemented and is buggy.
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12/ QUIC gives block leaders the ability to cut some user connections or rate limit them based on specific criteria. Thus block leaders can now drop certain connections during high demands.
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19/ So this will solve the problem? Solana to moon again? Well, not quite.
3 reasons why there is a long road ahead:
1. There’s no guarantee as to how efficient the current fixes will be in preventing next congestion problem on Solana. We can only know when we see it in action.
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10/ Networking layer is the communication layer of the internet, it is used to send packets of data from one connection to another. For example - TCP, UDP, QUIC (designed by google), etc.
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Penning down our experiences from conducting India's first student-run 'Web3 Week'
@BITSpBlockchain
.
A thread🧵...
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9/ Now lets discuss the main cause of congestion on Solana in the last few days - 'the transactions that never made it'.
As mentioned earlier in the thread, these are transactions that failed to reach the block leader, and got dropped bc of issues in the networking layer.
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24/ All of this is very exciting Nishil, but why should we care? well, there are multiple reasons.
1. The proposal allows us to use custom signature schemes. Users can now use the inbuilt schemes of iOS and Android devices and turn every phone into a hardware wallet.
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@king26_sk
they've also sent multiple copies of same pictures. If I lose one I'll still have 3 more remaining, so thoughtful
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Really excited for this 🚀
8/
@_nishil_
University: BITS Pilani
Favorite web3 writer:
@Thyborg_
Favorite web3 project:
@CelestiaOrg
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2/ With AA, we have a chance to move away from the scary world of seed phrases.
We can enable different signing options, gas fees can be sponsored by Dapps or paid through fiat and much more.
Now that we know what AA is, let's understand how we can bring it to Ethereum.
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Why is suddenly everyone talking about Eigenlayer, saw 3 back to back threads.
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4/ Externally owned account (EOA):
These accounts are controlled by the user’s key pair (public key and private key). This is what most users use to interact with Ethereum.
Services like Metamask (wallet) act as an interface to interact with these accounts.
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3/ There are currently two types of accounts on Ethereum:
1. Externally owned account (EOA)
2. Smart contract accounts
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We definitely place a lot of trust in middle berth train seat strength.
Abhi yeh aunty gir gyi toh mai toh gya.
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12/ This is where
@eigenlayer
comes in.
It is a mechanism to leverage the existing trust network to do the things it was not intended to do.
Simply put, Eigenlayer transfers Ethereum's economic security and trust to a middleware that needs it.
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12/ Hence folks at
@nethermindeth
and
@opengsn
with help from
@VitalikButerin
proposed EIP 4337.
The proposal presents a workaround without any consensus-layer protocol changes.
It brings 'Account Abstraction' to Ethereum.
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27/ Well that's all folks, thanks for sticking with me.
This proposal introduces multiple avenues of innovation and I hope I did justice to it. It'll be exciting to see the usecases that teams build upon to enable an overall better UX for the users.
We shall cover that later.
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1/ Well let's start with what account abstraction (AA) means.
Account abstraction provides users the ability to use accounts at a higher level with less knowledge of the processes going on underneath.
Like using a gmail account without knowing how it functions.
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It's so irritating when twitter suddenly removes a tweet from the feed, bhai padhne toh de!
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13/ Eigenlayer is a series of smart contracts on Ethereum that allow users to re-stake.
By re-staking, stakers can expose their staked ETH to additional slashing conditions in exchange for securing middleware.
Same capital, additional risk.
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5/ Smart contract accounts:
These accounts are not controlled by any private key, rather they are controlled by their code. For example, all the DeFi protocols are controlled by SC accounts.
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17/ There are three different ways to re-stake on Eigenlayer:
1. re-staking $ETH directly
2. re-staking LP tokens
3. re-staking (staked ETH) LP token
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Wallets should provide features like fiat gas payments.
What's cool is that EIP4337 enables that along with countless other UX improvements like:
- Social recovery
- Multisig
- ERC20 gas payments
- Batched transactions, etc.
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30/ Overall I am very excited for
@eigenlayer
as it leverages the core value of a blockchain which is trust and allows for open innovation across all layers of blockchain.
Their team is excellent and you might never find anyone with better presentation skills than
@sreeramkannan
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7/ This is a problem because EOA functionalities are hardcoded into Ethereum protocol and there is no room for customization.
For example: Gmail provides you the option to enable 2FA on your account. Similar customizability can't be done on Ethereum today.
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6/ The issue with Ethereum is that EOAs get special privileges that smart contract accounts do not.
The most notable example is the ability to initiate transactions. Currently, only EOAs can do that.
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We also need fiat on/off ramp solutions for wallets, not sure if there is any so far, but hoping to see that too become a thing with this EIP.
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remember when our parents used to come to get us from school?
the peon would enter the classroom with a slip and everyone would look at the teacher hopefully, wishing that the slip has their name on it.
finally the joy when the teacher called out your name was infinite.
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18/ Eigenlayer allows innovation at every layer of the tech stack.
With
@eigenlayer
, Ethereum can focus on governance for long-term growth and anyone can permissionlessly add features for fast innovation.
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19/ Let's consider two projects where
@eigenlayer
can be of good use:
1. EigenDA: It is a data availability network developed by the Eigenlayer team for optimistic and ZK rollups. It allows Ethereum to offload its DA within the ecosystem security instead of off-chain options.
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Thanks to
@yb_effect
for helping with the magical final touches and
@chapterone
for providing me with this opportunity.
Make sure to check out the link below for some more stuff from Chapter One Research:
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Twitter ad revenue share is insane, big fan 🫡.
This is the motivation I needed to start writing threads again. If I get 2+ likes, I'll release a thread on zk co-processors this weekend. Lessgooo🚀
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13/ Instead of modifying the logic of the consensus layer itself, it replicates the functionality of the current transaction mempool in a higher-level system.
The flow has a lot of moving parts, which include -
1. User operations
2. Bundler
3. Paymaster (optional)
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8/ EOAs on Ethereum have the following limitations:
1. Users can't use a custom signing scheme. ECDSA is a typical signing scheme that Ethereum uses to generate public-private key pairs.
2. Gas fees have to be paid in native cryptocurrency ($ETH).
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11/ Hence middlewares introduce a trust layer.
Users now have to trust them to use different Dapps, for example:
- Trusting oracles for price feed
- Trusting bridges for cross-chain transfer
- Trusting relayers for MEV Boost
- Trusting DA for validiums
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@pythonhulk
and
@PareenL
form an amazing cofounder pair, just love how they perfectly complement each other.
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21/ Since EigenDA does not handle consensus, it also has a much higher throughput than Celestia (1.4MB/s, source: Messari).
EigenDA will achieve up to 15MB/s, which is 176 times more than the DA rate of Ethereum without danksharding.
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16/ This is what a general flow might look like for a transaction that gets initiated through an SC wallet:
1 - Alice (user) initiates a 'user operation' and includes the transaction(s) it wants to execute.
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Best vibes in the city rn
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100 people earned their first NFT in the form of a POAP, and with the help of
@haardik
and
@learnweb3dao
, we helped 220+ students in their transition from web2 dev to web3 dev.
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I think the Audi sound fuckup is intentional to get funds from alumni
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2/Blockchains are revolutionary because they have eliminated the need for trust between people & institutions.
Instead of trusting a human for our daily interactions, we now trust a decentralized set of nodes.
But developing such a network is often the most challenging part.
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@titanplayer42
1. Take Polaroid of the Polaroid
2. Keep doing that endlessly - hence making a chain of Polaroids
3. Then put all of the Polaroids in a block - making a 'block-chain'
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Thanks for reading.
Thanks to
@yb_effect
for helping at every step and
@chapterone
for providing me with this opportunity.
Make sure to check out below for some more stuff from Chapter One Research:
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Google doc text recommendations have evolved from suggesting what you were thinking to suggesting what you couldn't even think yourself.
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19/ For anyone interested in reading more about the transaction mechanics of Solana, I have collated some excellent podcasts (by
@0xShitTrader
@0xMert_
@jito_sol
@buffalu__
), articles (by
@EclipseFND
@UmbraResearch
) and tweets in this Notion:
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10/ All these problems can be easily solved by smart contract wallets as they allow the use of custom logic.
But as mentioned earlier, transactions on Ethereum can only be initiated through an ECDSA-secured externally-owned account (EOA) and not through smart contract wallets.
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27/ After having discussed what Eigenlayer is capable of, let's take a look at a few concerns around it:
1. Eigenlayer can become a weak link, middleware code can be exploited & honest stakers can be slashed.
This might put protocols at risk by reducing their economic security.
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1/ This thread is long, stick with me!
There's a lot that is new in the protocol, and I want to make sure I do justice to its novelty.
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AI might become the trustless third party required for blockchains to tokenize and valuate RWAs, by helping in bringing raw data like estimated value of any RWA, proof of its existence etc.
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11/ Now you might ask - why don't we change that?
Well, EIP 2938 is one path toward fixing this. It introduces Ethereum protocol changes that allow transactions to start from a smart contract instead of an EOA.
But as mentioned, it requires significant protocol changes.
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25/
2. It allows native support on Ethereum for multiple signatories. Two or more users can now approve a single transaction, thus improving security.
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1/ In this thread we'll try to explore how Solana's transaction fee mechanics work and why it still needs a lot of rework, in simpler words, we'll try to answer:
1. How txs fee works on Solana.
2. How txs are scheduled.
3. How it compares with Ethereum's mechanics.
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9/
3. Because your private key is your account, losing your key means losing your account.
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Simple UX powered by
@biconomy
🚀
A game-changer for Web3 developers is coming.
Watch this space, fam *sound on 📣*
A thread👇
#BiconomySDK
#developers
#infrastructure
#toolkit
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