So, here's what we've been doing today for Cardano. There's really four major items: Hydra, Mithril++, we get sidechains one of these days, we should probably use a bigger, better term for that, so Hydra, Mithril, sidechains, and optimizations.
This actually is also connected to the sidechains agenda. So sidechains, what this does is gives fast finality. This gives roll-ups so there's a connection point there and this also gives different models of transactions and resources.
Also, a lot of traffic gets driven to the sidechain which means there's less load on the mainchain. So, there's some things that you do to get stuff off the chain. So, Hydra for example gets stuff off the chain, roll-ups get stuff off the chain, side chains get stuff off the chain.
So, people get the same outcome, but they use less of the on-chain resources. It turns out that just with Roll-Ups and these types of state and payment channels along with sidechains to take the very high load things it I believe very firmly that you know for about a two to five-year window as long as you're doing some optimizations, you probably could meet a very high rate of growth and still have a fairly comfortable Network.
Now you need to do some things for example we need Babel fees here so that sidechains have first-class citizenship with ADA. You also need TX prioritization, so you need to have something like a fee Market or tiered pricing to be able to help Bob get some predictability and consistency and his transaction structure as he goes through.
These are not hypotheticals; this is a deployed technology. This is a deployed technology, heavy heavy work on sidechains is underway and come November a lot to discuss and tell you guys about at the Cardano summit but I think people would be very happy and there is a beautiful LeapFrog and you already saw with diffusion pipelining and a collection of other things have been done last year and this year that a lot of great optimizations have happened inside the system.
So these are continuous processes and while they require in some cases hard Forks like adding new versions of Plutus in to support proof structures and also the fast finality is something called Praos that's the next version of Ouroboros after Genesis that basically gives you a finality gadgets at the system so you can have fast settlement on both sides the main chain the sidechain and sidechain the main chain.
You look at more sophisticated proof systems, a lot of work has to be done but now is the time to invest that and there's a multi-million dollar collection of teams, Galway on us that are working on that and then on the sidechain side it allows very high volume apps that need very specific logic like the World Mobiles or the Midnights or these other things to actually run which takes load off of the main chain but actually continues to use Ada as the underlying asset and continues to create network value for Cardano.
That is a parallel work stream to this work stream for Basho. This one right here is already underway, and you guys are seeing it. Hydra is on mainnet, Mithril just got on mainnet, sidechains are very mature, and lots to say in just a little bit about it.
Now, at least they provided a quote, but if you actually look at the commentary here, it's like you got to wait three to five years, the roadmap with layer twos and sidechains to properly scale. That's what people say, and then of course, they go to deep personal attacks.
Mithril didn't exist until two years ago as a paper. Now it's on mainnet and it's working its way into wallets throughout the year. The sidechain set of things is in the code side and it's going to be on mainnet sooner than people think. It's going to add a lot of dimensions of complexity to the system.
It's easier to draw it, it slows me down a little bit, and also it allows us to have no ambiguity, which is very important. Right now, we have the IO repos, and they're going to move over to the Intersect repos. At Input Output, we have this concept of tribes, and each tribe is connected to a different concept like smart contracts, for example, core technology. Smart Contracts covers things like Plutus, Marlowe, extended UTXO, core technology covers core node, network, consensus, we have tribes like identities, sidechains and so forth.
One of those events, or all of those events, there's going to be midnight people there. And lots to say about midnight. And actually, be a lot of fun to make a whiteboard video about some of the things there, but I definitely will talk about the sidechains frame. There's an enormous amount of goodness that's occurred. We can't wait to tell you.
What's nice about that is this enables sidechains, light clients and all kinds of optimizations, and they are specific for proof of work. So, we wrote the paper with Dennis's Syndros and Echos thiasos. The diagnosis was still a graduate student at the time. He ended up getting his PhD and now he's a postdoc at Stanford and it always made me sad that nobody had picked up NIPoPoWs because it basically solves sidechains and efficient like clients for Bitcoin.
So that's the model and when sidechains come in, you have completely different execution models. You can merge accounts and extend UTXO together, you have the EVM over there, but they're bulk headed. So if they fuck up the world and everything blows up, it's that thing over there. It doesn't cascade and destroy the main network. It doesn't bring the main network down. And so, they get better, faster, cheaper. And then rollups come.
Ouroboros Leios are still under construction. There's a paper coming out. Now there's some priorities. Got to get Ouroboros Praos out, Genesis out. You need to bootstrap from Genesis and we need to get that into the network. And you need Praos because you need instant finality, fast finality, so that your sidechain transactions are fast on both directions. BFT on this side it's Ouroboros on this side you need some form of finality gadgets.
The very next thing after that is input endorsers. Is it necessary when you got Hydra and Mithril and you got rollups on the way, and you got sidechains. It will be and it will be in a horizon about three years to five years. That's when it's necessary.
The new PI system that runs quarterly is moving over to intersect the members-based organizations. So we have tribes within our development teams like the sidechain's tribe, the core Ledger team. Voltaire tribes, smart contracts tribes.
The reality is that we're all working together and we're getting a lot of progress. You know, Cardano is really maturing. Cardano node 8.11 is incredible. Plutus is really shaping up, especially with BLS support on Plutus. Lot of wonderful things happening on the sidechain side, lot of really wonderful things happening with HYDRA.
If you zoom out, you focus on the signal, Cardano’s TV's up 148% this year, and it's growing. And you focus on the signal we got, DJED, we got Coti, we got World Mobile, we got amazing stuff happening with sidechains. You got ton of protocol upgrades occurring. You know you got a whole fucking government with millions of people who will not only be engaged, but very much activist. Having debates every single day about how do we make Cardano better.
Come on. Let's be good. Let's be positive. Let's look to the bright side of things and the industry as a whole, our best days are ahead of us. We got Hydra, we got rollups, we got great sidechains. We, you know, we got amazing things coming in Africa. We didn't give up on anything.
They can actually be used together and where they would be most useful is when we talk about the sidechain model of Cardano, so the whole sidechain ecosystem and also about reducing the size of Mithril certificates so that they have more ubiquity.
The last thing I'll mention, the sidechain side of things, the sidechains of the house, we're making very great progress. Midnight is forcing this because it's a sidechain. We have a great relationship partnership with World Mobile and they're doing a lot of really cool and interesting things.
Originally, the intention was to try to be a little bit more of a polyglot. For sidechains. Meaning that there would be basic primitives that would plug into known frameworks like cosmos, parity, substrate, scorex, Milkomeda and other things that are floating around in in the space.
But I think what's probably going to be happening is more of an opinionated approach that has batteries included and it's a lot easier to do turnkey sidechains and includes a lot of cool technology that we've invented throughout the years.
So, I won't spoil the announcement on that, but we have a pretty good idea and sometime this summer will have a dedicated sidechains converse.
It'll be tethered to a lot of discussion about midnight, but the team is doing an excellent job and there's a lot of new tech that can be brought to market that would make Cardano, I think, the best platform in the industry for sidechains because it's that perfect connection of a lot of great ideas that that we've had.
I think it's very pragmatic in that we did new things and borrowed some great technologies that the industry has proven out. But then at the same time, there's some brand new research that super benefits the sidechains ecosystem and bringing that in is going to be a great thing for everybody.
That's great, but on the other hand, on the peripheries of it we have a very vibrant, diverse set of opinions, like for example, the programming language side with projects like Aiken. Radically different from Plutus and people are trying to bring TypeScript into Cardano. There are sidechains that will come like flowers, thousands of them blooming over the next 24-36 months.
And the road maps can be voted on and the CIPs can be voted on and legitimized through the governance process, 1694, which will include thousands of representatives and basically a liquid democracy, which was the intention from the beginning and because of the SL CL model sidechains will enable Cardano to adopt radically different philosophies.
So, for the users of our testnet if you've used Mallet to deploy smart contracts to the K-EVM and into Yella, a lot of those concepts and ideas that we have there will be taken and put into Cardano wallet for Plutus as well as the eventually the sidechain connections that we have for Yella and for the K-EVM.
Will you have a sidechain for security token? That's a really good question so a security token is an ERC20 token, namely because there is this notion of regulation that's attached to the token and some of that regulation lives off chain. In the legacy world and some of that regulation can be automated...
So, the question is, will security tokens be a sidechain or will they be incumbent within the system. The nature of Plutus and Marlowe makes our system uniquely well suited for people to build an asset that will conform to many of the characteristics that just mentioned.
For example, this immutability and the timestamp and the audibility, and this idea that things don't roll back. t's entirely reasonable to say that that might need to live within its own Ledger. And if that's the case, it be a sidechain.
How easy would that be to to set up in our system - not hard at all. So once CL comes out, we'll have an EVM sidechain, a Yella sidechain. But it would be really nice to get a third-party partner to connect a security token sidechain and then you can actually have this situation where tokens can be issued there and flow between Cardano and back and so forth.
We already have a principled cryptocurrency, it's called Bitcoin. It's very principled and within the next 3 to 5 years. It will have smart contract capability and sidechain capability and be quite performant. There are literally hundreds of millions of dollars R&D and engineering money with multiple companies, all around the world working very hard to get Bitcoin to a very solid-state...
So, we didn't get the Treasury system in. We had ideas about sidechains that were criticized. We had ideas about charming the consensus algorithm, creating more useful proof of work system. They were also criticized, so we still participated. We put a lot of money into Mantis. We created Mantis. In my view, it's the best of their client ever made, period. Ethereum - Etherum Classic. It's 15,000 lines of code. It's very concise. It's extremely well designed. It's. Performant. It's bug free, its security audited by a third party Kudelski, and that report is public. Honestly, you couldn't ask for more for a 1.0 product that was built from scratch for our ecosystem.
So, there's still a lot more to do. There's still a lot more testing to do, but the concepts like extended UTXO, how Plutus works, how to integrate Plutus, how to integrate sidechains. How to run a sidechain with the Mantis network and roll that over into production code...
Once It's there it. Make a lot of sense to go and try to push a DEX into the system because people are going to be able to issue their own assets. We'll have sidechain support and we'll have smart contract support via politics and Marlowe at the base layer.
We have a paper coming out soon called parallel chains that with the sidechains research, it will converge to Ouroboros Hydra.
Plutus fest is coming up in December, and we're going for the first time ever show off Plutus and Marlowe and let people write smart contracts and have a great chance to understand this new innovation that we brought to the space our sidechains research it's really just incredible.
And what that means is you now have an interface where you can send assets to those people by a sidechain transaction and back.
You can do that with a control layer and that's what the second layer of our system is and what we've already demonstrated in practice with K-EVM and the IELE testnets. So when our sidechains protocol comes out, if your system is compliant with that protocol, people will be able to move ADA back into your system and out of your system and you'll be able to move your token in your system, to our system and back.
There's not a master slave relationship. It's a firewall relationship, meaning that it's easy to move assets to and from. On the 1st generation of sidechains we launch, will be custom tailored for K-EVM and IELE, as this is for interoperability with those smart contract paradigms, but later versions will include more generalities, so we can wire our system together with things like ETC and Ethereum and future versions of other protocols or potentially even Bitcoin, depending upon where their upgrade path sits and your cryptocurrency as well, just follow an open standard.
So the sidechain validation is pretty interesting.
We think a lot about how we can use snark technology to allow us to have more anonymous transactions, but also things like sidechains. So the very same primitives that allow you to have private transactions and verified computation could potentially be used to verify properties of a blockchain where you don't have the underlying blockchain.
OK, so for example, let's say that you receive a sidechain transaction, so something from Bitcoin to Litecoin. So when it goes from Bitcoin to Litecoin, so if you're Litecoin, those nodes need to know two things, two characteristics about that particular transaction. One, they need to know that the tokens that you're sending over exist. So there's an existential question. Is this real Litecoin or Bitcoin that you're sending over to Litecoin, for example.
We're looking at pulling this technology into our sidechains protocol to make it more efficient, and we're also looking at this technology for private off-chain smart contracts. So, we have a collection of different people from ??????, Mark????? to Thomas Gilbert and others who are working on that, and at some point, we'll publish a paper.
So after the IELE testnet that's had some time to run, we'll take a look at where we're at, take a look at where our sidechains protocols are at and then we'll make some form of announcement of when we think we can start linking CL and SL together.
Simplicity is a great idea; mask, lightning, and sidechains are great ideas. We have our own protocols for that, which are awesome. So, these are great ideas, and these ideas really should be adopted, but for whatever reason, they're not adopted, and it's extremely painful.
And we're glad to see that there is still some innovation there. We still do learn from ideas that Blockstream has presented. Russell O'Connor's work on simplicity, for example, was very elegant and really helped us think through some ideas about Plutus. We would hope that the Bitcoin core developers take some of our work more seriously, in particular, work on sidechains, and in particular our work on UTXO wallet design.
But using our sidechains protocol, you just as easily can connect that to another overlay protocol.
So on an apples to apples basis, we're going to be cheaper, faster, more secure, better by nature of the way we've designed things. So, I think in those use cases, cardano's very compelling for these tokens to stay resident there as opposed to building their own blockchain and trying to construct their own network effect. So, I think in both environments, the enclaves that will be constructed for security tokens to facilitate the next generation of ICOs that better from a regulatory and tax perspective and from a place for these tokens that are issued to live until they're used to fuel and power their dapps that run as sidechains...
There's still a lot of work that would need to be done to link Cardano CL and SSL together. For example, we have to finish some of our specification work for our proof of proof of stake protocol. So, the sidechains connection point as well as some things about how we wish to handle merge staking and so forth.