Traveling across the multichain world with Keer Lau from Orbiter Finance

[00:00:04] Keer Lau: We cannot make everybody happy because we are not here for that. Otherwise, we would be selling ice cream. So, use Orbiter if you want to cross-chain, use Orbiter without pain. Basically, that’s our slogan. Withdraw all of my money, which would be worth, you know, pretty much a big chunk of money. So, if we solve the coordination problem, the liquidity aggregation or the fragmentation problem will be solved naturally.

[00:00:27] Elisha Owusu Akyaw: What’s up crypto fam? Welcome to Cointelegraph’s Hashing It Out. I’m your host, Elisha, and you can find me on Twitter at @GhCryptoGuy. On this show, we will talk about crypto and everything Web3 with upcoming talent and leaders in the space. We will be taking you on a ride around the crypto block, answering questions and highlighting the next big innovations in the space. Before we dive in, remember to follow us on whatever platform you are tuning in from so you don’t miss another episode. And if you want more crypto news as it happens, check out Cointelegraph.com. It’s time to hash it out.

Hello everyone! Welcome to this episode of Hashing It Out with your boy, Elisha, @GhCryptoGuy. One of the overarching narratives that we have actively discussed on this podcast is a conversation of the multichain world, or the multichain universe, that there are multiple blockchains in the Web3 space. We have multiple layer 1s, layer 2s. We’ve even recently seen layer 3s, and how these multiple blockchains actively need to communicate, need to find a way to work together, and what that means for the end-user.

One of the most important infrastructures that makes these blockchains, or these networks, communicate, or makes the communication between these networks possible, is cross-chain bridges and cross-chain protocols. And they have always been in the news for good and bad reasons. And so we are going to be talking about what cross-chain protocols have been in the past and what they can be in the future, and also address some of the issues that they have struggled with recently. Joining me to have this discussion is Keer Lau, ecosystem growth lead at Orbiter Finance, one of the top cross-chain platforms in the Web3 space. Hi, and welcome.

[00:02:24] Keer Lau: Hello, Elisha. Thanks for having me.

[00:02:26] Elisha Owusu Akyaw: Amazing. So, let’s start with you. How did you get into Web3, and how did you end up at Orbiter?

[00:02:32] Keer Lau: I joined Orbiter quite recently as ecosystem growth. I saw the potential of Orbiter being a very popular protocol but lack of like this branding and also the potential of growing from a cross-chain protocol to an omnichain ecosystem. So, it wasn’t a tough decision for me to join and take the challenges. Before joining Orbiter, I was in Crypto.com [inaudible]. Also, I joined a startup in Cosmos Ecosystem as CMO as well. I actually bought my first Ethereum back in 2018, and people always laugh at me because pretty much it was in Canada, and I bought it with the QCEX. So, if you know the QCEX, pretty much the second month that I bought my first, I think, 2,000 Ethereum, when the price was like less than 300 per ETH, the second month I bought them, the founder of QCEX reported that, and I can’t withdraw all of my money, which would be worth pretty much a big chunk of money. And I never trust a central exchange ever since. I get back to the field as employee and also like a co-founder, and like I keep all of my crypto in the cold storage. And yeah, I do save some Ethereum onchain to interact with some protocols. So, that was my journey.

[00:03:44] Elisha Owusu Akyaw: Okay. So right now, you’re at Orbiter. What are you doing there? How did you end up there?

[00:03:49] Keer Lau: Okay. So, basically, Orbiter is a ZK bridge. It’s actually one of the first. It’s actually the first third-party ZK bridge. And this has been announced to the market basically like a ZK-tech-based cross-chain bridge. So it’s supposed to be boosting the L2 performance and decrease gas consumption. So, use Orbiter if you want to cross-chain, use Orbiter without pain. Basically, that’s our slogan. We have this cross-chain interoperability infrastructure supporting over 60 major chains. And we are boasting 24 million of transactions and transaction amount exceeding 20 billion and cumulative users of over 4 million. So, if you rank the bridge protocol from the transaction number or the cumulative users, we’re the number one. And what Orbiter is nowadays, it’s more than a bridge, it’s more than a bridging protocol. What it’s trying to do, and we can talk about it later, is an omnichain chain infrastructure. And to ensure that in the future, the Ethereum builder can coordinate with each other. So basically, what Orbiter right now is basically like a cross-chain bridge that has been very popular, and also trying to build this omnichain infrastructure. And my job is to grow the ecosystem of this omnichain ecosystem.

[00:05:08] Elisha Owusu Akyaw: Great. So, we are going to dive into what Orbiter is becoming. But Orbiter was simply a cross-chain protocol at the start. What led to the pivot? Because there’s a lot to unpack concerning the pivot, and we are going to discuss security, etc., but on a higher level, what led to the pivot?

[00:05:28] Keer Lau: What led to the pivot? Because we are the liquidity provider and we are also like one of the liquidity provider of the bridge. And we do see that, first of all, there is a liquidity fragmentation between the Ethereum rollups, which everybody else was really seeing it and want to solve it. But because now, once we have kind of like solved the problem with the Vizing chain that we have built, we also see like a bigger problem that’s not just the liquidity, it’s also the interoperability of the rollups. So, if you consider rollup as short, referred from Vitalik, we’re still going back to the 2019 and 18, where we still we haven’t really solved the problem with cross-chain or, in this period of time, it’s cross rollup communications and also coordinates. So as a popular protocol as like a main protocol in the bridging sector, we just felt like we have the responsibility to move our duty forward by making the onchain interacting experience more smooth and more, you know, pretty close to the central exchange that you would interact with nowadays.

[00:06:41] Elisha Owusu Akyaw: So one of the biggest issues that we’ve experienced with cross-chain platforms has been the conversation on security. And we’ve seen some platforms in the past have lots of major security breaches. In fact, there was a time when every time we hear any news about a bridge, it’s one breach or the other. What has that looked like for Orbiter building in a very volatile space? And what are the measures that have been put in place, and what are some of the lessons that the industry can learn?

[00:07:16] Keer Lau: Yeah, that’s a very good question. Thanks for bringing it up. So, basically, I think it was not the problem with the cross-chain bridge. It’s the problem with human. If you look at the cases of cross-chain hacking, I’m talking about Ronin Bridge; I’m talking about Multichain, right? So basically, it’s the human problem. You cannot trust human. You cannot trust, like, a small party of people because, like, the bridge solution in the past somehow relates to multichain, like a multisig wallets. So, if it’s a multisig wallet included or integrated with the cross-chain solution, it’s a matter of time that you will see like a hacking, like social engineering or just like government pretty much take over the founding team. It happens before, and it will continue to happen if we still enable this trust assumptions included in the cross-chain but not only cross-chain also the central exchange, right? Also, like the rollups, that as long as something that include a trust assumption that you would need to trust somebody that would not misuse your fund, the hacking will pretty much stay with us. So, what Orbiter did is that as the first ZK bridge, it include the zk-SPV as somehow to eliminate the multisig wallet to integrate with this cross-chain transaction. So, when you do a cross transaction in Orbiter, there are two transactions included. One is that you send a transaction to the smart contract. That’s that’s created by Orbiter. And then there is a proof that you have sent a certain amount of transaction with side destination chains, like information like that. And the ZK-proof used to be, or the proof of someone sending what amount of money to what chain used to be controlled by a multisig wallet, or the liquidity was controlled by it. Now, it’s now like a zk-SPV, so you would only need to trust the automation of the smart contract, which you can reveal yourself, and also the automation of the SPV that you will receive the exact amount that you want to send from the source chain, if that makes sense.

[00:09:33] Elisha Owusu Akyaw: Yeah, that makes sense. Let’s talk about the other interesting issue, which is fragmentation of liquidity. We’ve seen instances where sometimes some routes are not available. Just so you know, I’m an avid user of bridges because I’m actively jumping from one platform, one layer 1 or layer 2 to the other. And the reason why this is the case is I’d say we’ve seen like a short user retention span across multiple layer 2s, where people are moving from one layer 2 to the other, moving from one to the other to farm airdrops. And so sometimes, you’re trying to swap, let’s say, USDT to — USDT from one layer 2 to another layer 2, or USDT to Ethereum on another layer 2. And you are told the route does not exist because, and I’ve seen this on some other platforms, and that’s because there’s no liquidity. How do we deal with the issue of liquidity, in an environment where users are not being retained for a long period, and there are multiple platforms coming in, which means that liquidity keeps moving around in the Web3 space?

[00:10:47] Keer Lau: I would say, let’s take this question or answer to a bigger picture. The fact that we are we are going to having an increasing number of cross-chain transactions. So, in the future, even though the aggregation of liquidity is solved, we will be seeing more transactions to close transactions between Ethereum rollups. But we are facing a bigger problem other than liquidity fragmentation. The real challenge facing the Ethereum right now is that we are seeing an increasing number of rollups, but the scalability and performance of Ethereum remains almost unchanged. So, for example, if you want to send, if you are Alice and if you want to send a Bob, or like 1 Ethereum on Arbitrum, the cross-chain solution that first of all require liquidity from the two rollups, but also it also need to call data to see, hey, does Alice have the exact amount that she want to send? So, what the cross [inaudible] transaction now still need to somehow interact with the layer 1 as a Beacon Chain. If even though we have solved the liquidity aggregation problem, we are still thresholding by the bottleneck of the performance of L1. But more importantly... So basically, what it means is that in the current rollup ecosystem, we’re lacking the ability to make the rollup coordinate with each other without or minimize the interaction with L1 to boost the performance. So, would be a good metaphor would be consider rollup as highways, right? Highway lanes. The current situation is that if the Arbitrum lane is congested, the [inaudible] shard concept, you cannot just change lanes. Essentially, more the rollup are meaningless to scaling Ethereum to so… But like to achieve such future that we need to redesign like an infrastructure that can parallelly process cross-rollup transactions. So what do we need to achieve this future is that, of course, we need kind of like for infra to make that happens.

First of all, we need to have like a nominee chain, wallet address or identity system which can minimize the requirement of core array data from L1. The second is Orbiter. For example, like [inaudible] will be playing a relayer role between rollups, similar to cross-shard communication protocol that’s responsible for the eventual atomicity of cross-chain, across-rollups transactions. The third, as you mentioned, is the liquidity aggregation layer by enabling move of asset and value between chains more easily. The fourth is parallel execution at smart contract level. So in the future, if you are very fond of, say, Pump.fun protocol on Base and you want to interact with the Arbitrum because you only have fund on Arbitrum, you wouldn’t be required to do a cross-chain and to play on Base. You would… Like the transaction of buying a meme on Pump.fun is likely to be handled and by both chains, basically. So we will need something like an infrared that support the omnichain smart contract like within the app. So basically, they will automatically deploy on all major rollup. So what does this roadmap will do is that in the future, more rollup means more scalability. Now is the vice versa. It’s not, it’s like in contrast. So, in the future, scalability can be achieved without the requirement of sacrificing decentralization, while Ethereum layer 1 can provide security. So, more data won’t be competing with each others and getting this like TVL war. I think one of the reasons that we have this liquidity fragmentation is the TVL war and the lack of coordination. So, if we solve the coordination problem, the liquidity aggregation or the fragmentation problem will be solved naturally.

[00:14:26] Elisha Owusu Akyaw: You said something interesting in that answer. Every time I have developers come in, I ask them, or people building anything related to the multichain world, I ask them why there are so many rollups and so many layer 2s. And you are saying that more rollups, more layer 2s would mean more scalability in the future. Why is that the case, and what’s the issue that is making that, should I say, impact something that is not being felt now? Because currently, the more tools we have seems like the more fragmentation and the reduction of the user bases of other platforms. Like basically, we have so many layers 2s, some of them are even ghost towns. I’m not going to mention names, but we saw like some layer 2s have less than a thousand users at a certain point. So, what would change? What should change to make that scalability a utility that does not take away from the Web3 space?

[00:15:30] Keer Lau: Okay. Basically, now, because lack of coordination of, like, between Ethereum rollup, you can, users can only interact with one rollups at once, right? But in the future we won’t be interacting directly with Ethereum layer 2. We will be interacting with likely to be something like a consumer app like that’s automatically deployed on all rollups. So what you need to do is basically say, for example, is a gaming, right? So it can sort of like aggregate all of the money you have to like kind of pay for gas fee of the omnichain so that you don’t have to worry about cross-chain. It’s not just like, hey, I have signed a signature that you can use my money, that kind of like deposit withdrawal thing. It naturally happens onchain. So it will have the user experience when you do transactions or when you play games, right? It’s pretty similar. It will pretty close to what you have experienced in central exchange, but at the same time minimizes trust assumptions. So, you don’t have to worry about like the things that I’ve been through is that like central exchange and then they misuse your money or, you know, they just died and you just can’t get your money.

Yeah. So, I think to give you like the metaphor that I mentioned, it was the highway. Now, basically, there are, only one smart contract is deployed on one layer 2, right? But if that rollup is pretty busy, like the inscription thing on Arbitrum the early this year, it’s going to be like the whole network is going to be shut down. So, like the rest of the rollup, which, as you mentioned, like the rollup with less than 1,000 users, will help the Arbitrum or any hot shard or popular rollup to handle the transactions, if that makes sense, and the transaction will not be required to submit or minimize the bias of submitting the changing of the state route or call data from the Ethereum L1. So, you don’t have to be limited by the bottleneck of the L1. L1 basically will be a type of security. Now that's also crucial for solving the blockchain trilemma, if that makes sense.

[00:17:42] Elisha Owusu Akyaw: The other thing that I personally have struggled with is like user interfaces. Sometimes people have to switch between one layer 2 to another layer 2 to make transactions. And I mean, it’s not a big issue for me. It’s just annoying sometimes. But for new people coming in, that could be pretty confusing. Do you think that there’s a need for us to have a user experience overhaul moving forward in order to create a more integrated multichain system?

[00:18:14] Keer Lau: Definitely. I absolutely agree with it. We are going to solve that, but at the same time, we are not compromising decentralization. So we cannot say, hey, because I want to somehow improve the user experience on wallet, I can create an MPV wallet that half of your private key are stored in Google Cloud. I don’t think that’s the right way to do it. I still think that private property is assigned and cannot be touched. And that’s why we are in crypto, right?

[00:18:48] Elisha Owusu Akyaw: Yeah. Yeah, absolutely. I think making sure that decentralization is still being protected is an important thing to look at. So, let’s talk about the current market landscape. Not getting to when Bitcoin is going to hit 80K. Not any of that. But from a builder’s perspective, what has the year been like? Because we started the year on something like a high note, everybody was excited, and then now we don’t know what’s going on. So, what has that meant for builders in terms of interactions? Are we seeing growth? Because we say the B in the bear stands for build, and bear is for building. Are people acknowledging the people building, and during the bear, what has the reception been so far?

[00:19:34] Keer Lau: For me personally, I would still believe that we are early bull market, so it’s not investment advice. So, I am still holding Ethereum and Bitcoin, as I mentioned in the cold storage. But as for Orbiter Finance, it doesn’t make huge difference for us like. We are here for over four years, and we are, we have been through two bear market, one bull market, one and a half bull market, let’s call it. We, for full disclosure, the growth of Orbiter, before it had been pretty much zero on marketing and public relationship. We didn’t really spend much time on it, but we still remains the number one cross-chain protocol. Basically, the user growth of Orbiter were pretty organic, I would say. So, we were the only bridge when Starknet launches mainnet for almost a year and the third-party bridge without the need to wait for seven days on the ZKsync Lite and also later Arbitrum OP, so we don’t become what we are today by worrying about how market will go. Because majority of the protocol, including the like ZP-proof and ZK SPV, like this hard engineering thing, we build it in, not the bull market. Okay, it’s pretty much a downtime of the crypto back in 2021. And I do agree that when it’s bull market, you will somehow need to, you know, get listing, you know, sell things that sell those and things like that. But essentially, we don’t really pay much attention to the bull, like how market goes as a protocol or as a builder in the ecosystem.

[00:21:16] Elisha Owusu Akyaw: Some of my friends would be pissed if I didn’t ask the next question I’m about to ask. Let’s talk about airdrops for a second, reason being that everybody is expecting an airdrop from Orbiter, and I can understand that usually projects can’t confirm or deny airdrops until they happen. But I think the general question I want to ask is, is it difficult doing an airdrop in 2024? No one seems to be happening, and you, as a project, already has the point system going on. I have some points myself. What is the methodology of doing a good airdrop, in your opinion? Or even if you are not allowed to say that, is making people happy through airdrops difficult? And is the airdrop meta seeing a decline?

[00:22:02] Keer Lau: That’s a very tough question to answer. We do have received some comments of when we Orbiter airdrop to its users, and I can only say it will be no later than the [inaudible] of bull market. We don’t want to get this thing done in the period of time that’s not bull market. Let’s call it this way because we are waiting for a coincidence, or we are waiting for a something that can get us TGE, as well as listing without the need of giving up the project to major central exchange. Let’s call it this way. We still want to maintain the control, as well as the authority to say where Orbiter should go. And in terms of measuring a good airdrop mechanism, where I think we cannot make everybody happy because we are not here for that, otherwise we would be selling ice cream. What we can promise is that you, like the top users, that the loyal users of Orbiter Finance will be happy about the result. I cannot tell more, but that’s all I can say.

[00:23:13] Elisha Owusu Akyaw: Interesting answer. I’m sure all the airdrop hunters would be waiting patiently and would be reading in between the lines based on the answer you just gave. So, moving forward, what is Orbiter, beyond like some of the things that we’ve already discussed, doing to separate itself from other platforms that are also offering the same ability for people to move funds across multiple chains?

[00:23:39] Keer Lau: Basically, I would say I can conclude this question to be somehow the next step as ecosystem growth. One of the main criticism that we are facing now, other than this airdrop thing, is that the centralization of Orbiter making system, so Maker System is whoever got to get the right to provide liquidity for people, for users like you to move around and share the dividend from the users, from the Maker System, right? And to, you know, receive dividend from the protocol. So, the first step is that we are going to ensuring a more decentralized, thriving ecosystem. Similar logic to this optimistic rollup decentralizing is sequencer. We are going to somehow decentralize the ecosystem starting from pretty much this month. So, the first step, we will gradually opening up the components of Maker System. So, the first is to make the validator nodes available to the public to own and run as a key component of the macro system, the Maker System workflow. It will receive a dividend from the Maker System. We are likely to see a 20-ish percent of dividend from all Orbiters were making, so that’s the first step. It’s very likely to be conducted in the form of a sale, and partly, the sales of the verification nodes will be only eligible for Orbiters’ loyal users, as I mentioned.

The second is as for the Vizing rollup. So we didn’t really talk about it, but you can consider Vizing rollup is a rollup that does two things. Essentially, it’s not only liquidity aggregation layer, it also aggregates the key proof from a variety of heterogeneous layer to submit the proof for them as a batch. And also, the account abstraction model is only compatible on Vizing. I’m talking about ERC 4337. So basically, the account abstraction required an offchain signature verification for a smart contract that’s supported by the proof. So it only decreases the gas price for users. And it says that they were barely noticed, but also, at the same time, eliminate any trust assumptions. So and, especially and now, the ecosystem has some progress. We haven’t really announced it yet, but we have created some demos that are very interesting. I suggest especially developers take a look at it. So, we have worked with several outside developers to build DApps like launchpads and gaming. That advertise very clear what omnichain can bring a difference to the user’s experience onchain. I’ll give you an example. So Liquid, for example, is an omnichain meme launchpad. You can buy sell a memecoin with exact price despite L2 that you are using. So, for example, Orc Guys is one of the meme on Liquid will remain the same price on Optimistic, Arbitrum or Base, thanks to the aggregated liquidity.

Also, gaming DApps like Bullish that doesn’t require a signature to initiate a transaction. You can pretty much play the game without noticing that you’re playing a fully onchain game, thanks to the omnichain account abstraction. Also, the AA bank also lies a pretty important role in it, so such seamless transactions are especially crucial to the mass adoption of Web3 through, you know, like gaming social. So, you know, essentially, even though you want to play onchain gaming, you don’t want to play a, say onchain PUBG, that requires a signature every time you pick up a gun or a key. So basically, that’s what Orbiter has already built. So, it’s basically like a demo for you. So, we don’t really just ask developer to come and say, hey, this is documentation. Good luck. Adios. We provide demos that clearly illustrate what this omnichain feature can be done. So you can start there and then use your creativity to be something that’s really different from what’s in the market right now. So, I’m really excited to see more DApps on Vizing as well as supported by this Orbiter Finance come out.

[00:27:45] Elisha Owusu Akyaw: That’s a very thorough answer. Thank you very much for jumping on this podcast with me. Looking forward to the next steps that you just discussed. And yeah, talk to you in the future, hopefully.

[00:27:56] Keer Lau: Great talking with you, Elisha.

[00:27:58] Elisha Owusu Akyaw: Amazing. All good things must come to an end, and so does our show. You’ve been listening to Hashing it Out by Cointelegraph, where we talk about crypto and everything Web3. I’m your host, Elisha, @GhCryptoGuy on Twitter, and if you liked this episode, please make sure to subscribe and leave a review. Please do this; it will really help us out. I need to get out of my mom’s basement. Don’t get me fired. Subscribe wherever you’re listening to us. Leave a review, and have a great day! Thank you.

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