Ryze Up E04 - Eclipse Founder Neel
Exploring New Possibilities in Layer2, Integrating Solana's High Performance and Ethereum's Security
1. Introduction
Welcome to the Ryze Up segment brought to you by Ryze Labs. Ryze Labs serves as a bridge between the East and the West, aiming to accelerate the development of Web3 in emerging markets and influence the global Web3 world. Local Insights, Global Impact – let's embark on this journey together. Time to Ryze Up.
Ryze Labs has successfully invested in high-growth potential projects like Polygon, Sui, Solana, LayerZero, and Wintermute.
Host: Joven, Head of Business Development at Ryze Labs, focuses on expanding the fund's outreach to global developer communities and helping portfolio companies with go-to-market strategies.
Special Guest: Neel, Founder of Eclipse. Eclipse is Ethereum’s Layer 2, powered by the SVM (Solana Virtual Machine), dedicated to becoming a widely used general-purpose Layer 2 on Ethereum.
2. Integrating Solana's High Performance and Ethereum's Security
Before founding Eclipse, Neel worked in traditional finance. He ventured into the Crypto space, developing within the Cosmos ecosystem initially and later became interested in Roll-Ups. Recognizing that Roll-Ups have lower operational costs compared to Layer 1 and experience less token inflation, Neel started building the Layer 2 project, launching Eclipse in September 2022.
Eclipse, an Ethereum Layer 2, differs from other common Layer 2 solutions since it uses the SVM (Solana Virtual Machine) as its execution environment. This approach provides high performance akin to Solana while maintaining Ethereum's security due to settlement on the Ethereum network.
From a user perspective, Eclipse resembles Solana with short block generation times, low latency, high throughput, and minimal on-chain congestion. Technically, as a Roll-Up, Eclipse uses proofs to guarantee that the execution of the chain is being done correctly, similar to other Layer 2 solutions, rather than employing committees or numerous validators to sign every state change, as seen in Layer 1.
Regarding proof types, Eclipse uses an Optimistic Rollup's Fraud proof. However, unlike Optimism and Arbitrum, it doesn't adopt interactive fraud proofs. Instead, it uses RISC Zero for ZK fraud proofs, generating ZK proofs when fraud occurs. For data availability (DA), Celestia is chosen due to the expensive transaction fees on Ethereum.
3. Challenges of RaaS (Rollup as a Service)
The Eclipse team initially explored building RaaS (Rollup as a Service) but found it unviable. Comparing RaaS to SaaS, it becomes apparent that for RaaS to achieve profitability similar to SaaS, generating a billion-dollar valuation, it would require approximately $100 million in ARR. This would necessitate running about 1000 Rollups yearly, charging $100,000 per customer, along with a massive Rollup cluster, leading to significant decentralization among these Rollups, adversely impacting user experience.
Therefore, the Eclipse team ultimately decided to focus on being a Layer 2 solution. Neel sees parallels with Solana's singular chain characteristic, which aligns with Eclipse's decision.
In summary, prioritizing the SaaS value model, the RaaS model faces challenges, and most RaaS solutions might require a shift due to liquidity fragmentation across numerous Layer 2s.
4. Eclipse's Appeal Over Solana for Ethereum Community Members
On Solana, apart from roughly 4,000 consensus-related voting transactions, there are about 500 real transactions per second. Currently, due to low transaction fees on Solana, it's subjected to a deluge of spam.
There are many bots active on the Solana chain, with some serving legitimate purposes in order book market-making, but many generate worthless spam transactions. Neel believes Ethereum has excelled in economics and theoretical computer science compared to Solana's engineering mindset. Thus, Eclipse aims to bring Ethereum's approach to tackle spam transactions caused by Solana's low fees.
Additionally, once Eclipse launches, many DeFi projects would find it suitable to migrate, such as Helium, React Network, etc., although the primary focus remains on DeFi and NFTs.
Eclipse's core advantage lies in its ease of migration. Rebuilding a Layer 1 with an SVM would pose difficulties for Ethereum's core community, whereas a Layer 2 on Ethereum involves lesser migration for users.
5. Eclipse's Business Model and Deployment Complexity
Other Layer 2 tokens usually serve governance functions, which Neel doesn't highly endorse as a utility. Even if used, it would be the Foundation behind Eclipse Labs that would issue the corresponding governance tokens.
Eclipse's chosen business model revolves around profit from sequencer fees. Drawing from Arbitrum's revenue, which has surpassed nine figures annually, it seems a reasonable avenue for generating cash flow.
Regarding project deployment on Eclipse, if smart contracts are already written for Solana, deployment on Eclipse is easy. However, if only EVM contracts are available, rewriting in Rust is necessary. The complexity and time cost of deployment depends on the project's intricacy. Furthermore, Eclipse has partnered with Neon to facilitate the conversion of EVM contracts to SVM contracts for deployment on Eclipse.
6. Interaction with Celestia and RISC Zero
Regarding Rollup execution, multiple transactions are typically bundled into a batch before being published to Layer 1, akin to Optimism and Arbitrum. Eclipse follows a similar process.
However, due to Ethereum's limited bandwidth supporting throughput (with a 0.75 MB per block limit), Eclipse chooses to publish to Celestia (with a 2MB per block limit). Eclipse utilizes Celestia's interfaces, running a Celestia client within Eclipse to publish to Celestia.
Concerning interaction with RISC Zero, RISC Zero is only invoked in case of fraud. RISC Zero generates zero-knowledge proofs for the erroneous part of transactions, indicating the correct execution. Once published to Ethereum, Ethereum interprets and verifies the proof of fraud occurrence.
7. Conclusion
Currently, 15 different dapps are deployed on Eclipse, many from the Solana ecosystem, including consumer or game incubation projects, NFT Marketplace, and LaunchPad projects.
The current Chief Business Officer of the project is Vijay, with a rich background in business, previously at dYdX and Uniswap.
Looking ahead, Eclipse plans to launch its mainnet for developers early next year, initially accessible for a few weeks. Subsequently, after deploying the front end and smart contracts for the initial cohort of apps, Eclipse will open to the public.
Finally, interested users are encouraged to follow their official Twitter for the latest updates and further information about Eclipse.