DeversiFi's Layer 2 solutions for Ethereum in 2022

0:01i'm ashton addison from block west capital for investmentpitch media in the Crypto Coin Show and today on blockchain interviews once again we have will harbour co-founder of diversify will welcome to the show and thank you so much for taking the time today absolutely looking forward to it let's dive straight into it a lot has happened in the crypto world and with

0:22diversify since diversify came on the show in late 2021 let's just start by getting the viewers back up to speed and for those who didn't see the first interview on what is diversify what are the solutions that you're bringing with d5 layer twos into the blockchain world and then we can dive into the more recent news absolutely so diversify is a platform for d5 it helps

0:48anyone access d5 including trading investing adding yield on your assets and transferring to others but one of the most unique thing is that we're built on something called ethereum layer 2 and which means that you get all the security and benefits of using a public blockchain but without the cost and without the friction so and similarly to

1:12Some of the other newer blockchains out there it means that it's really cheap and easy to use and we're focusing on trying to grow the number of people who can come and access and use decentralized finance to gain financial freedom to start invest investing and accessing all the all of the opportunities that are coming in d5 and without having to have a huge amount of

1:31funds to do it yeah definitely and i've noticed that a lot of newer people coming into the space especially with you know world events people are starting to wake up to the fact that bitcoin and ethereum does exist but there's also all these other chains as well of different consensus algorithms different costs different transaction finalities and they're a lot

1:53cheaper than ethereum most most of them are but they're as you said there are like a lot of solutions that instead of using different blockchains people can use ethereum they're just using more of a layer two solution to make it cheaper can you explain that a little bit more on how they actually are utilizing ethereum but making it cheaper and faster

2:16yeah absolutely and ethereum really is a global computer that's the kind of way it was designed in that anyone can come and use this computer but you pay for the usage that you make so if you make a transaction you have to pay some gas and the problem is that the capacity was pretty it is pretty limited so if you want to make transactions

2:37directly onto ethereum even sending tokens making a trade on unisop for example you pay for that and the cost is really high and the more people who want to use it the more expensive it gets and layer 2 helps to basically remove a lot of that transactions a lot of those transactions from ethereum so that more people can use it for this for lower cost and in the case of

3:00diversify we're doing that using something called starks we have partnered and we're actually the first partner of a company called starkware based in israel who have developed this technology and brought it to kind of market for rollups helping more transactions basically get bundled together and then putting a smaller amount of data onto

3:21the main chain ethereum we actually were one of the first to do this in around june 2020 and since then diversify has been working on taking it from like a technology that was still kind of hard to use to read now something that's i think like we think really accessible you can even directly get funds in and from your bank account and then start using various

3:42aspects of defy all from your own wallet with the full security of ethereum and all the benefits that come with d5 including all the openness permissionlessness and lots more opportunities than you might get on a kind of centralized platform but really like the cost the cost is not is it isn't there unlike what most people are used to using

4:05Other d5 apps where you have to pay like sometimes tens or twenty dollars for transactions definitely thanks for the explanation will and i know you're deep into the world of layer twos i you know we talked a little bit about it last year but i'd love to hear your perspective on the growth of layer two ecosystems throughout 2021 and your projection you

4:30know throw 2022 here is this a fringe thing or are there a lot of people that are actually using the layer two solutions on ethereum and with diversify so we can look at it in the kind of perspective of layer two and alternative layer ones to ethereum and a year ago or maybe even yeah maybe if you look at the beginning of 2021 ethereum was still dominant most d5

4:53activity was happening there it still had the most users and that changed pretty quickly throughout the year initially it wasn't layer twos that took a lot of that strain off of ethereum but it was alternative layer one blockchains including polygon finance smart chain later on like things like avalanche and solana and the number of users on those now is

5:16cumulatively much higher than on ethereum the transaction volumes and sort of size of defectivity in terms of monetary value is still higher on ethereum but in terms of where the users are going it's now a lot of these other alternatives and layer two is kind of part of that story so like there was definitely a big take up during 2021 diversify was one of the big

5:38beneficiaries of that but so other layer two roll-ups and ethereum like dydx arbitram optimism but so far the kind of growth was still relatively limited and that's because at the end of the day these are more complex technologies than some of these alternative layer one solutions so if you look at polygon or binary smart chain actually really

6:01it's mainly that you've changed the consensus mechanism but everything else is very similar to ethereum it's very easy for developers to adapt and start building you don't necessarily get the full security of ethereum but it's good enough for a lot of use cases and so we saw that just kind of be there at the right time in the right place and take a lot of the

6:17demand that was there from users but i think this year we're gonna really see a kind of growth of layer twos really in like all sorts of use cases mainly because now it's catching up in terms of being able to offer in some cases better experiences than you can get from alternative layer ones but with also higher security so it's kind of

6:41best of both worlds and there's a lot of new layer twos coming at the moment like ck synced and arbitrary optimism all which are likely to launch tokens which i think will really spare on a lot of adoption and kind of get the ball rolling and the great thing is that all of these including diversified then very much connected and within the same

7:01ecosystem which reduces kind of some of the risk we've seen of cross chain from bridge all sorts of bridges and other things where they've been issues in the past great info and yeah you're right about the complexity you know it's an extra small extra step over just using ethereum but of course there's all these advantages that you're talking about and

7:24from what i understand the complexity is getting less and less and it's opening doors to more people and the huge news that i saw from diversify recently here which i think is going to be a huge lowering of a barrier to entry for the complexity is the opera browser integration with layer 2 wallet that i've used opera browser for years and years and i know millions of people

7:48that do use that can you talk about what is this integration how is diversified working in the browser and how is that going to help people use diversify and cryptocurrency easier yeah absolutely so i mean we developed diversify initially kind of as a underlying protocol to make decentralized finance cheap and easy to use and then we've got our own website

8:11on top of that people can come and start using connecting their wallets to whether there's a metamask ledger or various other wallet types and essentially what's happened here is that we've is that we've helped and worked with opera to connect directly to the protocol without using our own website as an alternative way of using it opera as we know is one of the leading browser

8:34web browsers in the world and they've got they've actually had a crypto wallet in it for a while that just supported initially ethereum layer one and they've now kind of made a step forward which is that they're gonna really start to kind of grow and work on that wallet and really directly embed it into mobile and so what this will mean is that anyone who

8:58has the browser will be able to connect to web3 applications and we'll be able to make transfers all at super low cost with much lower sort of friction than than they would have experienced before which i think will make it really competitive in the crypto space and as diversified we really want to encourage these sorts of applications

9:19we're also going to be working in the future with other wallet types to help directly support layer two and that's gonna really i think be a flipping point for ethereum there too and that at the moment most people still have to on board by ethereum and then kind of move their funds onto an ethereum layer two and choose between them and in the future it'll be the

9:41other way around where i think people will get a wallet and we'll directly already be using layer two and never go via layer one and that's kind of the i think the flip over that we'll see this year interesting and with the rise of the other blockchains you mentioned you know other layer ones it seems that the narrative for 2022 and going forward is that this is going to

10:06be a multi-chain world right and no longer will there be isolated blockchains where it's tough to switch between bitcoin to ethereum to solana in a decentralized way without having to go through some centralized parties that have your keys all the blockchains hopefully can be able to talk to each other and you know with ethereum's ecosystem there's those setbacks of the cost and

10:29that's why we have layer twos but that's not supposed to be forever it's supposed to be solved eventually with ethereum 2.0 and more upgrades to the blockchains as they keep reiterating to make it faster and cheaper for everyone in the world to use where do you see the layer twos and diversify fitting in to this multi-chain world where we're looking at other

10:49blockchains and as perhaps the solutions on ethereum come to fruition and they're able to use you know everyone in the world is able to use that layer one as well how does that fit into the multi-chain world i think it's pretty clear now that multi-chain is here to stay a year ago many people might have tested that where we are now is that there's so much

11:15activity happening on so many different blockchains each has kind of a unique culture and that changes slightly the kind of applications that are built there slightly different technology stacks and so we want to adapt to that in the case of diversify that's really kind of a big part of what we're going to be doing this year in that we really see

11:33ethereum layer one as being the heart sorry layer one and there two is being kind of the hub of what we've built but we wanna make it much easier for our users to access d5 what our kind of mission is to make d5 as accessible as possible and that doesn't mean just ethereum v5 that's going to necessarily mean all d5 and one of the ways that we're going to be doing that is through

11:54trying to solve this issue of fragmentation that i think has really come from the multi-chain sort of way that d5 is evolving and that if you've ever tried kind of moving funds from one application to another especially if they're on different chains there's so many hoops you have to jump through you might have set up a new wallet you probably need to get some gas

12:12in that wallet you need to use some bridge that you might not have used before it's and wait a few minutes or maybe a few hours depending on the bridge and all of this is just such huge sort of like friction for users and so what we want to do is present kind of a unified way to access all of all of that from one place so for example a few weeks ago we've added a new

12:34opportunity on diversify which is to participate in anchor ust staking so usda is a stable coin on the loop on the lunar blockchain and you can now deposit into that directly from diversify on layer 2 and start earning 19 yield and fire that kind of bridges a bridge to luna and that's the direction that we want to go in so rather than have to create this new

12:56wallet do you know do a four-hour process you could just do it from one click from within layer two and that's you know we kind of tested this out with some of our team most of our team have worked in crypto for at least more than a year and sort of gave them this challenge of can you go and use this lunar anchor ust staking and starting with

13:18your funds on ethereum in less than an hour and like basically a very small number of them made it and there were so many issues they encountered on the way and that's really the issue that's going to need to be tackled with multichain and very much what diversify wants to solve incredible that's great to hear the luna ecosystem seems to be growing

13:36exponentially fast and especially with a stable coin yield of 19 i know that's unmatched in the cryptocurrency industry so to have diversify link directly to that i think that's incredible and i feel like there's a lot of people who have ether and they're on layer one and they're starting to experiment with these other layer one chains but they're

13:59just afraid of the complexity or the extra steps or even the security of their funds of making a wrong move moving to layer two and not being able to get their funds back or not knowing what to do are there any other issues or worries that you know is this validated worries that people are having or is it should they just go to diversify and you know there's no risk to just go onto the

14:23platform and start using it as a very new user i mean there's definitely risks and i think that's something which the whole industry is going to need to start to address most of the risks i think come from the interfaces between different chains the bridges and we've seen like the wormhole wormhole hack and various others in the last sort of few months

14:45but that's i think also another role that we sort of want to play here is building and sort of tailoring to really strong cross-chain infrastructure to help make it possible to know that when you're using for example diversify you can get this get get the safer opportunities nothing's going to be completely safe than we are on the frontier but then that's also why you

15:06can get today something like 19 yield which obviously compared to the rest of the world outside of culture and d5 is pretty insane definitely yeah well thank you for that will and you're right good good disclaimer there you know there's risks and everything even holding even doing nothing is a risk of opportunity costs as well so for the

15:28viewers that are looking to learn more get educated about layer twos start using diversify experiment with these other integrations and the opera browser as you mentioned what is the best way for them to learn more and to get involved so we have a we have a great blog with lots of educational content around layer 2 roll ups and also the opera release

15:51and i would actually recommend if you have opera browser trying it out and we're it literally launched last week so it's a great time to give give feedback if you're one of the first users of it awesome thank you will i will leave the links to the blog and the updates in the description box below all the best with these new integrations i'm excited to have more

16:13people moving into layer two and just into the cryptocurrency ecosystem overall making it easier for the everyday person to get involved and become financially free so thank you so much for your time coming on the show all the best moving forward and let's follow up in the near future thank you very much you