Latest / The Starting Block / Starknet considers L1 transition - live with Eli Ben-Sasson

Transcript

Starknet considers L1 transition - live with Eli Ben-Sasson · The Starting Block

0:10
Welcome back to The Starting Block,
0:12
wherever you are joining us around
0:13
the world. It's great to be back at
0:14
home after more than a month on
0:16
the road. We've been to Token 2049,
0:19
we've been to New York twice, we're
0:20
been to Lugano, we're finally back
0:22
in our home studios.
0:23
I'm here back in the Netherlands and
0:25
my producer Jordan back at
0:26
home where he belongs.
0:28
And today we're looking forward to a
0:30
great show. We're gonna be joined by
0:31
Ellie Ben Sasson from
0:33
Starkware for the
0:35
Hot Seat segment of the show.
0:36
But if you're just joining us for
0:37
the first time.
0:38
Welcome to the Starting Block.
0:39
This is the Block's daily live show.
0:41
I'm gonna give you a quick rundown
0:42
of how we do things when we're
0:43
normally broadcasting at home like
0:44
this. We start off the show with the
0:46
Block briefing, which is our rundown
0:48
of the top stories you need to
0:50
know in the last 24
0:52
hours. It is, of course, a Monday,
0:54
so I will be taking a look at some
0:55
of the stories that broke
0:57
over the weekend to just set the
0:59
scene for the week ahead.
1:00
Then, of, course, we'll be moving
1:01
into that interview with Ellie a
1:03
little bit later on the show.
1:05
Without further ado, let's jump
1:07
straight into our headlines for
1:08
today, starting off with our top
1:09
story. South Korea looks set
1:11
to kick off its crypto tax,
1:14
or rather to kick its crypto
1:16
tax down the road once again.
1:18
This would be the fourth delay for a
1:19
levy that just can't seem to take
1:21
effect.
1:22
According to local news reports, the
1:23
presidential office is weighing
1:25
pushing the start all the way out to
1:26
2029 to line up with the
1:28
U.S. Timeline for adopting the
1:30
OECD's global crypto tax
1:32
framework.
1:33
The 22% tax on crypto gains was
1:35
first floated back in 2020,
1:37
and it's currently on the books for
1:39
January, 2027.
1:40
If this goes through, Korean traders
1:42
get another two tax-free
1:45
years.
1:46
Then our next headline, India's coin
1:47
DCX has come clean, and
1:49
the timing's a bit awkward.
1:51
The exchange now admits it lost
1:52
nearly $16 million just days
1:54
after CEO Sumit Gupta
1:57
told users on X that
1:59
breach report sounded like a false
2:00
alarm. In a blog update early on
2:02
Sunday, CoinDCX said attackers hit
2:04
old deprecated deposit wallets
2:06
left over from its July 2025
2:08
attack. The problem here,
2:10
an automated sweeping service that
2:12
was supposed to move funds out of
2:13
those vulnerable addresses had
2:15
quietly stopped working, so fresh
2:17
user deposits piled up right where
2:19
the attackers were waiting.
2:21
And moving on, hardware wallet maker
2:23
Keystone is in hot water over
2:25
data it promised to delete.
2:27
The company says a third party broke
2:28
into a Shopify powered store.
2:30
And walked away with customer
2:32
shipping information.
2:33
That's names, contact details,
2:35
addresses, and order history showing
2:36
exactly which devices people bought.
2:39
That last detail matters quite a lot
2:40
because a list of confirmed hardware
2:42
wallet owners is a goldmine for
2:44
phishing and even physical
2:46
targeting.
2:47
Keystone had long claimed it wiped
2:49
shipping data after 180
2:51
days, but customers say information
2:53
from much older orders was
2:54
exposed anyway.
2:57
Moving on, the weekend brought pain
2:58
for bulls.
2:59
Bitcoin briefly slipped below
3:01
$80,000 on Saturday and
3:03
traders betting on higher prices
3:04
took the brunt of it.
3:06
Of some $36
3:09
million in positions liquidated
3:11
in just four hours.
3:13
More than 404 million were long
3:15
positions, according to data from
3:17
CoinGlass.
3:17
Most of the damage came in two sharp
3:19
15 minute bursts as Bitcoin
3:21
tumbled.
3:22
It followed a second straight day of
3:24
spot ETF outflows and
3:26
Bitmex co-founder Arthur Hayes
3:27
saying overnight that he'd sold
3:29
out of his funds directional book,
3:31
saying that he had dumped it
3:33
all.
3:34
Then a major legal win for
3:35
Argentina's president, a federal
3:37
judge on Friday, dismissed the
3:39
criminal case against Javier Millet
3:41
over his promotion of the Libra
3:42
token, ruling that the events under
3:44
investigation don't fit any legal
3:46
offense.
3:47
The 60 page decision clears Millet,
3:49
his sister and presidential
3:51
secretary, General Karina Millet
3:53
and nine others, including Hayden
3:55
Davis. The American who called
3:57
himself Libra's launch advisor.
3:59
The judge found no criminally
4:00
relevant deception.
4:02
It may not be over though, some
4:03
investors who lost money on the
4:04
token say they're looking for
4:07
a path to appeal on.
4:09
Something tells me we're not gonna
4:10
see the end of that story
4:12
just yet.
4:13
Our final story of the day, Tether's
4:14
facing fresh scrutiny in Washington.
4:17
Senator Richard Blumenthal says he
4:18
wants answers after reports that the
4:21
stable coin giant paid millions of
4:22
dollars to consulting firms started
4:24
by former White House.
4:25
Crypto advisor Bo Heinz and his
4:27
father, all whilst stable coin
4:29
legislation was being negotiated
4:31
into law.
4:32
The Connecticut Democrat says that
4:34
relationship raises legal and
4:35
ethical questions, and he's asked
4:37
Tether to hand over records of its
4:39
dealings with the firm called Nexum,
4:41
as well as with Heinz directly.
4:44
Tether has not been accused
4:45
of wrongdoing.
4:47
And that is it for the block
4:48
briefing this afternoon or this
4:50
morning, depending on where you're
4:51
joining us. We're gonna be moving
4:53
swiftly into the hot seat segment
4:55
of the show. It's a great pleasure
4:56
to welcome Eli Ben-Sasson,
4:58
co-founder of Starkware, a man
5:00
who's been involved in many
5:01
different projects over the years
5:02
and someone I look up to
5:04
as a real industry veteran
5:06
and OG.
5:08
Eli, it's great to have you on the
5:08
show
5:09
Great to be back, Gareth,
5:11
good to talk to you again.
5:13
Yeah, we've both been busy, we both
5:15
been on the road. So I think we're
5:16
both enjoying some home time, but
5:18
I'm going to be jumping straight
5:19
into the
5:22
juice this afternoon because there's
5:23
been a lot of chatter online and
5:25
obviously from your own ex account
5:27
talking about the potential
5:29
of stocknet becoming
5:31
its own L1.
5:32
Can you talk to us a little bit
5:33
about what got
5:35
you up to this point, the community
5:37
vote kind of indicating that
5:39
you should be researching what it
5:41
might take to move away from
5:42
Ethereum.
5:43
Yeah, so right now,
5:45
one of the parts of our security
5:48
relies on the security of Ethereum.
5:50
And with all of the
5:53
improvements in quantum computers
5:55
and in AI
5:57
speeding up the timelines,
6:00
the stark new ecosystem is worried
6:02
that this layer of security will not
6:04
be able to upgrade
6:06
to post-quantum safety fast
6:08
enough. And in order to secure.
6:10
Starknet the assets there the
6:12
protocol and also to offer a safe
6:14
haven for those in crypto who are
6:16
looking to move to higher ground
6:18
The community has voted strongly
6:20
in favor like 93% in favor
6:22
of doing further research in
6:24
order to create
6:26
Basically to make Starknet
6:28
a layer one that is fully post
6:30
quantum secure
6:31
What would that look like and how
6:33
long would that take?
6:33
I mean, obviously it needs to start
6:34
with research.
6:35
Can you talk to us a little bit
6:37
about the process?
6:38
Yeah, so StarCore moves and Starknet
6:40
moves extremely fast in
6:43
our development.
6:44
So I think the research is going to
6:46
take just a very small number of
6:48
weeks. Well, before the end of the
6:49
year, I don't know, a month
6:51
or so, let's say tentatively.
6:55
And I think development is also
6:56
going to be at a very, very rapid
6:58
pace because there's a lot of
7:00
urgency coming from
7:02
the market about this particular
7:04
thing. People are aware.
7:07
Of the danger out there.
7:09
We don't know when we'll hear about
7:11
the next breakthroughs in quantum
7:13
computing.
7:15
And there's this realization that
7:16
pretty much none of the blue chip
7:18
tokens today are post-quantum
7:20
secure. And this is a very big
7:22
concern. I hear this from
7:24
asset allocators, hedge
7:26
funds, sovereign wealth funds,
7:29
large leaders of protocols.
7:32
Everyone is concerned.
7:33
Yeah, while we were in
7:35
token 2040 2049 in
7:37
Singapore I think Justin Drake put
7:39
out a tweet that kind of sounded the
7:40
alarm once again on the quantum
7:42
threat and perhaps the unreadiness
7:44
of the industry do you share those
7:45
thoughts and can you give our
7:48
Viewers out there maybe just a quick
7:50
kind of explainer of the quantum
7:52
thread to most of the blockchains
7:54
that exist today you know Bitcoin
7:55
Ethereum, etc, and
7:57
If it's as as real and
7:59
present as some claims
8:02
Yeah, one thing that was very
8:03
interesting in what Justin said was
8:05
that among the
8:08
700 plus breakthroughs in
8:09
mathematics that were released by
8:11
OpenAI about two
8:13
weeks ago, there is not even a
8:15
single one that directly talks about
8:16
any of the cryptographic
8:17
constructions used in public key
8:19
encryption.
8:20
And this is very, very
8:22
strange because we saw breakthroughs
8:24
on things as old and
8:26
basic as integer
8:28
multiplication and matrix
8:29
multiplication.
8:31
In my assessment, and I have
8:33
no private information,
8:35
I don't have any information
8:37
from the AI labs, but as
8:39
an outsider, my speculation
8:41
is that there's only two cases here.
8:43
Either there are breaks
8:45
that have been found by the labs and
8:47
they don't want to release them
8:48
because they want to prepare
8:52
whoever they're talking to to be
8:53
ready for this.
8:54
Or they haven't found quite
8:56
the breaks, but they found things
8:58
that could lead to breaks and then
8:59
they're worried that if they release
9:01
this information,
9:03
others may use it and
9:05
a break will be created.
9:07
So, like, the concern is that,
9:09
you know, we say your
9:11
keys, your coins, this holds
9:13
only if the cryptography is sound.
9:15
And the concern that quantum
9:17
computers and maybe other breaks
9:19
from the superintelligence of
9:21
AI will lead to
9:24
being you know just these keys being
9:26
leaked out and and then
9:28
you know the value of tokens will
9:30
just drop to very
9:32
low numbers so that that
9:34
is the concern and it is just out
9:36
there and we need to do something
9:38
about it.
9:39
Elliot, this isn't the first time
9:40
that a
9:42
chain or a protocol has moved away
9:44
from the Ethereum ecosystem.
9:47
Would this mean that
9:50
StarkNet itself would still remain
9:51
sort of EVM compatible?
9:52
I mean, is that key to keeping
9:55
things open and interoperable?
9:58
And yeah, what are your general
9:59
thoughts on some of the other
10:00
tokens? Because I believe CZ
10:02
Online was also talking about BNB
10:05
chain kind of.
10:06
Breaking away and turning into
10:08
more of an L1, remaining
10:10
EVM compatible, but also again
10:12
probably following a similar
10:13
direction that stocknet
10:15
might be.
10:17
First of all, Starknet right now
10:18
doesn't have an EVM,
10:20
but the interesting thing is there's
10:24
this meme circling around, which
10:25
is that where Starknet
10:28
is today is where Ethereum is
10:30
heading towards tomorrow.
10:31
Because if you look at the plans for
10:33
Ethereum, they talk about using ZK
10:35
Stark proofs, allowing
10:37
much more scale, adding privacy,
10:39
using a new VM that is
10:40
Stark-friendly.
10:41
All of this is exactly what Starknet
10:43
does today.
10:45
In terms of the technology, we're
10:46
already ahead of Ethereum.
10:48
Ethereum is heading towards this
10:50
direction, which I think is a very
10:51
wise move.
10:52
So in that sense, we won't be losing
10:54
anything.
10:56
Interoperability can still be
10:57
maintained, just like you have
10:58
interoperability between different
11:00
chains, right? You can move between
11:02
Solana and Ethereum, it's not a
11:03
problem. The one thing we will
11:05
try to maximize is the quantum
11:07
safety of this
11:09
thing that is starknet, right,
11:11
so we'll need to have some sort
11:12
floodgates.
11:13
That can shut automatically or
11:15
manually if a quantum
11:18
threat or an AI threat
11:20
ever materializes.
11:21
But other than that, I expect a very
11:23
good UX, a lot of interoperability
11:25
and smooth transition
11:27
into and out of Stark.
11:30
Just a little bit further afield,
11:31
Eli, I'm very curious to pick your
11:33
brain a little bit on the
11:35
speed at which AI is progressing.
11:37
I know most people are just using it
11:39
in their general days. Some people
11:40
are power users, some people are
11:42
using it like Google.
11:44
How much have you integrated AI
11:46
tools? Can you give us a bit of a
11:47
glimpse into what you like to use
11:48
and perhaps some of the power
11:50
or unlocks that you've been able to
11:52
achieve in recent months using
11:54
this tech?
11:55
So, you know, before I co-founded
11:56
Starkware, I co founded Zcash, and
11:58
before both of these things, I was
12:00
actually a mathematician.
12:02
I used to do research.
12:04
And as of half a year ago,
12:06
I am utterly shocked that
12:08
my previous occupation has
12:10
ceased to exist in the way it used
12:12
to be.
12:13
Like, you now, even the luminaries
12:15
of mathematics
12:17
today realize that they no
12:19
longer can give a fight to
12:21
AI when it comes to proving
12:23
breakthrough results.
12:24
And these past 722
12:26
results that were released by OpenAI
12:28
like completely just
12:31
basically buried any
12:33
hope of mathematicians being
12:35
at the vanguard of
12:37
advancing math.
12:38
Okay, so I am still under
12:40
the shock of this realization.
12:42
I never expected this in my lifetime
12:44
that AI would be so smart.
12:46
And obviously we haven't seen the
12:48
end of it, right?
12:49
We don't know how much smarter AI
12:51
could become. So, okay.
12:53
At Starkware, like many other
12:54
places, but we are very quick
12:56
to adopt AI
12:58
tools. Like all of our coding today
13:00
is obviously involves
13:02
a lot of usage of AI.
13:04
You know, my own personal, the way I
13:05
do research, the way communicate
13:07
involves a lot AI.
13:09
But in this sense, you know,
13:12
okay.
13:13
Starkware is like a very advanced
13:14
company. We move very fast and we
13:16
moved very fast in adapting AI,
13:18
but I would say we're not outliers
13:20
in this since, right?
13:21
Everyone's doing that.
13:22
And really, there is no other
13:24
option.
13:25
Yeah, I mean, I'm curious to hear
13:26
your thoughts sort of on AI
13:27
doomerism because there's a lot of
13:28
people on one side of the fence say
13:30
that like this, this could be the
13:31
end of us.
13:32
I'm more of a glass half full type
13:34
person and I think it's going to be
13:36
very positive.
13:37
But it is, it's clear to
13:38
see that the industry has suffered
13:40
at the hands of, you know, AI
13:41
assisted attacks and
13:43
hacks in recent weeks.
13:44
And I mean we just look at the
13:45
Bitcoin ecosystem, you
13:47
know, some of the exploits that have
13:48
been found, the cold card hack, you
13:51
now, the ledger incident, there's
13:53
clearly a lot of this that comes
13:54
down to.
13:55
The advances in AI tools.
13:57
Do you still, or perhaps do
14:00
you have some concerns that the
14:01
crypto industry might still be in
14:03
the crosshairs and when is it gonna
14:05
be sort of Tradfire's turn to
14:07
be the main target?
14:08
Oh, they're both.
14:09
So TradFi is in the crosshairs as
14:11
well. You know, it's less reported
14:12
and, you know, TradFi has other
14:14
mitigations. But these attacks are
14:16
just, you know, basically what's
14:17
happening is AI is discovering more
14:20
weaknesses in all systems
14:22
out there. And then these are
14:24
exploited time and again.
14:26
So this is happening in the TradFi
14:28
world. It's happening in
14:30
in the DeFi and crypto world.
14:32
I side with you.
14:33
I'm an optimist in general.
14:35
I think that OK, so right now you
14:36
have like a
14:38
smarter set of auditors
14:40
and coders and so on.
14:42
And I think overall these
14:44
sort of broken windows will be fixed
14:45
and we will end up having
14:47
a safer system.
14:49
Of course, this doesn't do
14:51
much for those who are currently
14:53
affected, right?
14:54
If your window is broken and
14:56
your stuff was stolen, this is
14:58
very unfortunate.
15:00
I don't know what to say about that
15:01
other than we're trying all of us
15:03
within the crypto industry to do our
15:05
best. With AI, without AI,
15:07
to audit, to improve things, to make
15:09
sure that we can try and basically
15:11
fix the broken windows or
15:13
the leaks using AI before
15:15
the bad guys do that.
15:17
But I think that overall this will
15:18
end in a much better system, both
15:20
for the TradFi world, the DeFi
15:22
world crypto world, but
15:24
there will be more breaks and
15:26
hacks along the way, unfortunately.
15:29
Yeah, no, it kind
15:31
of just seems like par for the
15:32
course, and fortunately as that
15:34
is.
15:35
My parting question to you, just to
15:37
keep it as brief as possible and be
15:38
respectful of your time.
15:40
Obviously, you're a Zcash protocol
15:42
co-founder.
15:44
There'll be a lot of our viewers out
15:45
there that would be interested
15:47
to hear your sort of take on where
15:48
Zcache is at at the moment,
15:50
both from a protocol point of view
15:52
and recent updates that have
15:53
happened.
15:54
And yeah, perhaps your forecast
15:57
for the next year or two and
15:58
privacy-focused protocols in
16:00
general.
16:01
Yeah, so I co-founded Zcash.
16:04
I built, you know, I co invented,
16:06
co authored some of the math
16:07
underlying it, but I'm not
16:09
involved for many years.
16:10
I mean, I'm a friend of many of the
16:11
people in the ecosystem and I very
16:14
much support it, but I am not
16:15
involved. I don't have any deep
16:17
insight into what's going on there.
16:18
I think it's a very sound protocol
16:22
and I hope it keeps
16:24
on performing well and people like
16:26
it and understand that privacy is
16:28
a basic human right.
16:30
Where my focus
16:32
is on these days is on having
16:34
things like post-quantum secure and
16:36
programmable versions of privacy,
16:38
which is what we're doing on
16:40
StarkNet. It is integrated with
16:43
Zcash as well via things like near
16:45
intents. You can
16:47
actually do DeFi
16:50
with ZCash on Starknet
16:52
in a privacy-preserving manner and
16:54
with good UX. So that is where my
16:56
focus is at.
16:59
Privacy is important for basic
17:01
transfers, which is what Zcash
17:02
allows for, but
17:04
my passion as a technologist is
17:06
to have privacy that is programmable
17:09
and usable with good UX, a little
17:10
bit like when you use Robinhood
17:13
or Revolut, like you have this
17:14
privacy that allows you under it to
17:16
do a lot of things that no one sees.
17:18
That's something that we're enabling
17:20
on Starknet, and I'm very passionate
17:22
about that. I hope we have further
17:23
integrations with Zcache so
17:25
that it is even more seamless to use
17:27
it from Zcach, But In
17:29
any case, I think
17:31
privacy will continue evolving
17:33
and being adapted and
17:35
improving on the UX side and the
17:37
usability, and we'll have
17:39
full
17:41
post-quantum security very soon
17:43
on StartNet, which is what I'm
17:45
working on and very enthusiastic
17:46
about.
17:47
Beautiful, just to put a
17:49
ribbon on the interview, just to go
17:51
back to the initial sort of
17:52
conversation starter,
17:55
StarkNet considering putting in
17:57
the research to move away from
17:58
Ethereum and become its own L1.
18:01
Just the thoughts on Ethereum, is it
18:03
just a case of perhaps not being
18:04
able to move as quickly as you would
18:06
like to give you these assurances
18:08
that you need for
18:11
a post-quantum world?
18:16
It's that in particular.
18:18
I mean, there are other issues with
18:19
Ethereum, but that's a topic
18:21
for a different conversation.
18:23
Fantastic, I'll leave it at that.
18:25
I'll respect it.
18:26
Ellie, thanks so much for your time.
18:28
We'll be chatting to you fairly soon
18:29
and we'll keep an eye out for
18:31
updates from the Starkware and
18:33
StarkNet team.
18:34
If you are interested, you can
18:35
follow Starkware on X and Starknet
18:37
if you're interested in keeping
18:39
tabs on what's happening there
18:40
because they're gonna be starting to
18:41
do this research.
18:42
Ellie, thank you so much.
18:44
You are free to drop off.
18:46
We'll just do some housekeeping
18:46
here. If you haven't been watching
18:48
the show for the last couple of
18:49
weeks, we have been on the road for
18:51
quite a while.
18:52
We were in Lugano last
18:54
week broadcasting at the Future
18:55
of Capital Markets Summit.
18:56
We had some fantastic interviews,
18:58
including Matt Cole, who's the CEO
19:00
of Strive, talking to us about how
19:01
they came up with these daily
19:03
dividends that Michael Saylor and
19:04
Strategy has now emulated.
19:06
We also spoke to Raf Zaguri, who
19:08
is the new CEO of 21.
19:10
Of course, he took over after Jack
19:12
Mallers announced that he would be
19:13
leaving 21.
19:14
After some time at the helm of
19:17
21 as CEO, he moved on earlier
19:19
this year.
19:19
Really, really interesting conversations
19:21
there. And then a little bit further
19:22
back in time, we were at Token 2049
19:24
broadcasting there.
19:26
We spent some time at the NASDAQ two
19:27
weeks ago
19:29
for Evernote's listing on the
19:31
NASDAC.
19:32
We were also in New York
19:34
a few weeks before that for the
19:35
Avalon Summit. So if you want to
19:36
catch up on any of the interviews or
19:38
any of content that we've been
19:39
putting out, go and check out the
19:40
Block's YouTube channel.
19:41
You can find most of those videos
19:43
there. Otherwise, just take
19:45
a leisurely scroll down
19:47
our X timeline and you can find some
19:48
of our videos.
19:49
The videos tab of our X account.
19:51
If you don't already please
19:52
subscribe to our YouTube channel and
19:54
if you're watching us here on X this
19:55
afternoon, please like and retweet
19:58
this post so we can get more people
20:00
catching up on that interview with
20:02
Eli Ben Sasson.
20:03
That is it for the show today.
20:04
I will tease tomorrow's show very
20:06
quickly. We have Anthony Scaramucci
20:08
joining us on the show.
20:09
He's just launched a new book.
20:10
We're going to be chatting to him
20:12
about that and a lot more related
20:14
to crypto. So set a reminder on your
20:15
clocks. We're broadcasting normal
20:16
time tomorrow.
20:17
That's 2.30 p.m.
20:19
Central European time if you're in
20:20
Europe, or 9.30
20:22
Eastern time if your in the United
20:24
States because the clocks have
20:25
changed.
20:25
So things are gonna be a bit weird
20:27
for the next couple of weeks until
20:28
we get back to parity on
20:30
timing. That's it for today's show,
20:32
we'll catch you tomorrow.