👉 The news. StarkWare has announced the launch of its token.
👉 The background. The Israeli start-up is on everyone's lips and experts are raving about the capabilities of this Ethereum Layer 2.
👉 Why it matters. With the move to Proof-of-Stake, Ethereum is set to become more energy-efficient. With the development of Layers 2, this could explode its use.
THE BIG WHALE: This is your third time in Paris for EthCC. What do you think of the French ecosystem and how has it evolved?
ELI BEN-SASSON: Honestly, I think it's really impressive. It's clearly one of the most dynamic on the planet and it's no coincidence that there are so many people in Paris for this event. We came with more than 20 people from StarkWare to find out about other projects, particularly French ones, and also to see what's new in the Ethereum ecosystem.
Actually, Ethereum is preparing to move away from Proof-of-Work to Proof-of-Stake, which is more energy-efficient. What do you think of this change?
Energy sobriety has become an essential subject, one that no one can dodge any longer. Just look at the weather outside! We need blockchains that consume less energy, and Proof-of-Stake (PoS) should help us achieve this. I know there's a debate about the security of PoS, but you know, if Proof-of-Work (used by Bitcoin and Ethereum until now, editor's note) had been presented several years ago to academic leaders, they would all have been unanimous in saying that it's not a sufficiently 'secure' system, so I'd be wary of being peremptory about the security of Proof-of-Stake. We've done a lot of research into how PoS works, and identified some potential weaknesses. But the real question is how it will work after implementation. And no one can really predict that...
Didn't the successive postponements of the update affect confidence?
The switch to PoS is a huge undertaking, so that's to be expected. It's very difficult to update a system like Ethereum because the protocol hosts so much value and so many users. It's not as if we're starting from scratch. I'm sure that the Ethereum developers, who are among the best in the world, know what they're doing.
What are the main services developed by StarkWare?
We have two main ones. On the one hand, StarkEx, which is a solution that can be adapted for each of our customers and enables projects such as Immutable or Sorare to increase the number of transactions managed without driving up their user fees. On the other hand, we're currently developing StarkNet, which is similar to Ethereum in the way it works: it's a permission-free network on which anyone can develop and build decentralised applications. StarkNet is currently in alpha phase, which means that only a small handful of developers have access to it.
You recently confirmed the launch of your token, but why do you need a native token when your function is to improve Ethereum's scalability? Couldn't you just use ETH?
An ecosystem needs a token to federate its community, and it needs to be independent of third parties to function properly. I'll take a very simple example: let's imagine we want to update our system. Who should have the power to express their opinion on this change? Our community or another ecosystem? The answer is obvious: the StarkNet community. This community is defined by the token holders. And using a token that we don't directly control would make us too dependent on the choices made by other projects. Finally, having a native token means we can reward community members who improve the ecosystem. For these three reasons, we believe that the creation of a token is justified and that the community appreciates this choice.
StarkWare has raised a lot of money in recent months, with the company now valued at $8 billion. Are you planning an IPO any time soon?
That's not on the cards yet (laughs). We have other priorities before going public. So far, Starkware has had no problem raising finance. When we did, the market was doing very well, but the macro-economic environment has recently deteriorated. So it's not ideal for raising new funds, but that's not a problem because we don't need them at least immediately.
Do you think 2022 will see Ethereum's Layer 2 protocols take off?
Yes, I hope so. But if it takes a little longer and adoption happens in 2023, it's not a big deal. In any case, it's imminent. We'll see it before 2024.
