Antoni Martin of Hermez on scaling Ethereum with zero knowledge rollups

0:21explaining what is the hermes network what exactly does your platform do and how does it benefit the ethereum and blockchain ecosystem yes in the last times i mean we have seen that if we want to escalate especially on ethereum well two years ago maybe there were some some side chains there have been a lot of tentatives to try to escalate but at the

0:44end especially in the last year we have realized that one of the ways is with the with the relapse that is the creation of a layer two on top of layer one that it says okay regarding this i mean there have been different developments and number one in hermes is based on zero knowledge proof this is what is allowing us to increase the scalability our data is kept on chain and

1:12and this is what it makes us a little bit different from the others and also which is what is the calculation it's on chain it's off chain although the data is safety on the chain of that's that's the main difference and we are part of this wave of relapse that now are popping up almost in a lot of different places that's great so hermes has developed a

1:38solution to solve the ethereum scalability and especially throughout 2020 as this decentralized finance movement had at one point caused ethereum transaction fees to be 40 or 50 dollars per transaction you know you really need to have that in the sense or in the micro sense so that's a huge problem to solve but your platform doesn't solve ethereum on the protocol

2:01layer obviously you can't mess with the ethereum network it's it's a layer two solution how can you at some way pinpoint what is the exact problem and how where does the transactions on ethereum move over to hermes to solve the scalability yes i mean what we have seen is that i mean when we started i mean our company has been

2:27live for two years and it was mainly focused on identity i mean but what we have seen is that at a certain point scalability was required and with this in mind we started to develop a solution for scalability based on zero knowledge proof that we were already using for privacy for the centralization i mean it's it's like a continuum then at a certain

2:51point we realized that we had a solution for plain vanilla transactions in order to escalate why because we were able to perform 2000 transactions per second okay and okay we as as nobody yet but i mean or it's it's still in development but nobody can perform smart contracts on this layer too but at least we were able to perform plain vanilla transactions

3:16as a transfer of die or data ether whatever then these are almost 60 70 percent of the transactions that nowadays are creating this congestion in the network then what we pretend is to upload this simple vanilla transactions on the layer 2 and then this is what will help to reduce the price of the gas and that layer 1 is skipped or it's only used for

3:43smart contracts transactions you can say great and you mentioned that part of the technology that solves this is the zk roll ups and zero knowledge proofs and you know there are a lot of people who have heard of zero knowledge proofs but don't really understand what that means and you know from a basic understanding having no you can have you can prove something without having

4:07to provide your identity for one example in zero knowledge proofs but you mentioned zero knowledge roll ups can you talk a little bit about what that means to somebody who's just an ethereum user sending a transaction yes exactly i mean at the end what these zero knowledge rollovers allow us is to create like a merkle tree with this what we can do is we can

4:30gather a lot of transactions as i said maybe 2000 then to keep only the very essential data or the hash that is that is that is gathering these 2000 transactions and then this can be us this can be stored this can be recorded in the l1 network which is attenuated then mainly it's it's helping to create this compression and it's helping to gather different residual transactions around

4:59great so for example if i was a ethereum user and i was using metamask and i was using a decentralized exchange and having to pay those transaction fees from a transaction and a business perspective is there more intensive labor and extra steps involved in integrating hermes to make it faster or do i see something on the front end that takes extra steps or how does that

5:25actually work yeah no here the idea obviously i mean and this is one of the problems of that we have on a theory one on blockchain is the user interface no i mean this is one of the main problems to not become mainstream then in order to avoid that i mean we are creating an interface and a wallet where you will connect with your metamask it's true that a to jump from layer one

5:51that it's metamask to layer two that is that is hermes network then you will need like another address but what we have thought is that i mean you don't need to remember the second address i mean it will be linked to your first meta mask and we are trying to avoid all these points of friction then for you it will be you will open your metamask or we will want to integrate

6:16also with my either wallet also you can use the hermes wallet and then you are not going to see any difference or it shouldn't create a bigger friction than the current one then answering your question no this is not going to create an extra work for you okay and one of the more prominent layer two networks in blockchain is you know the lightning network

6:39and i've heard a lot about it but it doesn't i ha i've seen that there isn't really a lot of adoption you know a lot of people are still seeming to use bitcoin and ethereum on the main network and not enough people are really moving over to these layer two networks to solve the scalability is there a way that your team has worked it out so that you know more people will

7:02start using it or make it so easy to use that it almost forces people to use it well yeah i think that you are pointing a very valid point and is that i mean that there is no that option and this is true then here in our case we are trying like two different approaches okay once is that i don't know for example in our case we are using a harman's network token

7:29because that will be the way how this network will be run i mean this is what it's like the bluetooth of hermes and then you will be able to perform some some auctions to beat in order to be able to forge a block and then at the end you will earn more or less money if you can extract more fees from the transactions

7:56and the difference with the with the with the auction that you are paying okay but what happened with these fees that are paid in the auction is that in our concept what we tried is to help the community and we will give 40 to a community project which is the proof of donation okay then maybe we can come back to that later but with this what we are trying

8:18to do is to engage the community that the community see that we are not only here to earn money i mean at the end yes we are there but we are we're hoping that hermes network at the end is decentralized that is self-maintained we always say that 50 percent of the rewards will go to the hermes network will be used to reward the assets that are inside

8:40this network i mean we need this use we need adoption as you were saying and i think that you are right and the second point that what we are facing or we are focusing our efforts is how we can create these transactions okay and what we have seen is that nowadays the transactions are coming from the exchanges mainly that's what it is honestly i mean

9:03they maybe they because they are more more safe users they are more used to that and then we are also approaching the exchanges and we are offering them one incentive plan or we are exploring this option in order they on board themselves in hermes network and we can create this ecosystem where we will have the community and we will have the exchanges

9:29and we hope that afterwards they just start the connections between them that's that's our approach yeah i agree approaching the exchanges is one of the best ways to get adoption because they're processing so many transactions and i did see that some of the major exchanges were starting to change their fee structure and pass on the fees on ethereum when it did go up

9:50to 50 because they were actually losing money because they initially had low fees set and you know one of the top altcoin exchanges for volume right now is finance and finance is also working on some scalability solutions for ethereum with this binance smart chain now hermes has the zk roll ups which sounds like some unique a proprietary solution that maybe

10:14binance doesn't have but at the same time they may have connections and you did mention that it is getting competitive to with all of these other platforms because it is a huge problem right now that needs to be solved do you see that what the technology stack that you have is unique enough and has a competitive advantage that it will gain adoption

10:34and be able to compete with things like binance smart chain well of course i mean i think that my solution is the best one by definition or i see a lot of advantages as i told you at the beginning because there is the snares the zika roulade the privacy the decentralization nevertheless our approach we accept that we will we should be able to live with another

11:00chains roll ups whatever i mean also for example in our case we have integrated or one of one of our aims is to integrate the massive migrations because at the ends without interconnectivity each one of us will be will be dead i mean i don't expect that we will be the winners and we'll have a monopoly maybe also honestly this is not what i'm looking

11:22for but what we are doing here is to push the cutting-edge technology i think as i said at the beginning which for me it's really good is that we are we are able to store that on chain we are totally decentralized i mean there are there is not another or at least there are not another decentralized roll-ups in this sense i mean we are pushing

11:45really hard on that i mean the other projects that are moving forward i have a huge respect for them i mean technically they are all really good and for me our aim is to create this network effect as i told you then if binance they have their their chain which is good but i am able to attract them and to offer them a good solution in order they also board their ms network i have no

12:10problem that they are using their own i mean that's that's clear but what i need is as much of course and actors and stakeholders involved as possible because especially for example finance and decentralized exchange they have their own lecture no then there it's not my space but when when binance a transfer to kraken i came to bitfenix whatever then is when our network

12:34makes sense and it can save a lot of us and it can create a very smoothly process for the user definitely and you mentioned the decentralization part and you also mentioned previously that the hermes token the network token is launched can you talk and that helps with the decentralization to get the community involved and get rewards for helping to contribute

12:56now now you also mentioned that it's not actually live in terms of the product running with exchanges can you talk about where you're at right now and where you're planning to be in the next six months of course first of all i mean we have i mean this project was was we although we explored roll up for a lot of months but when we decided to load this network was end of june

13:20i mean we are really running this is this is a race and what we have seen what we are trying to do during this month is to explain in a blog we are explaining the concept we are explaining this problemation and then in order now that we are approaching the exchanges and also some retail customers they were asking okay well for hermes or anthony whatever

13:44where we can find these tokens then we have created two liquidity pools one imbalancer and another one in unison this is really helpful also because now when we go to the exchanges then it's not okay what who what is what are you talking about i mean it's not token that you created no i can say okay no this is one token that it's listed here

14:07there is this demand at least i have an anchor price i have a reference price okay then our idea is that we will launch the end of november mid of december i mean as i said we are we are running a lot but also we have already finished the product but what we are doing now is we are running audits we are running tests i mean this is one smart contract that as you can imagine

14:34can have millions of assets in inside and one thing is that we were able to run and we were able to deliver a good product because we have the previous knowledge but also the truth is we don't want to fail because and we don't want to fail because there is a hole or there is a back that we are not able to detect and now we are taking the time to analyze we are

14:56taking the country we are we are here as i say to create this network in the long term and we prefer to spend one more month analyzing and doing and performing all the tests that are required and if you are asking me yes the idea is to launch end of november mid of december and then also the idea is that before maybe two three weeks before we

15:20start to onboard people with wallets then people who want to already start to import or to upload their assets we are creating some kind of farming in order to incentivize this translation and this movement to just this move to the new level to the new layer and this is the current status i mean and i think you are right that right now for me our objective is to

15:48deliver a product this is where we have the pressure because now okay i cannot say that we are nothing because we are a lot of things but yes we need to face the real world but also the tempo is quite good because then we can approach stakeholders from the community from the exchanges and we are creating these these synergies that are that we were waiting

16:08definitely and we're running out of time anthony but yeah you mentioned that you're looking for more community members and strategic partners what's the best way for them to reach out and to join well we have the harvest network channel in telegram we have hello dot hermes boom network i mean we have we can be approached by different channels we are answering all the approaches that

16:34we have and we are happy to try to create this community exactly in this network great well i will leave those links in the description box below for the viewers as well thanks so much for the time and all the best moving forward with hermes network and let's follow up in the near future perfect thanks thanks for your time