Dialogue with Boba Network Founder Alan Chiu: Main Features, Ecosystem Development, and Vision

Source: crypto @ stanford

Interviewee: Alan Chiu, Founder and CEO of Boba Network

Compiled by: Linqi, Chain Catcher

L2 rollups

C@S: What is your perspective on the crypto space?

Alan: There are still many undiscovered uses for crypto. It is increasingly becoming an accepted asset class in investment portfolios, but crypto can also serve as an economic driver that makes DAOs possible. A DAO is essentially a digital form of a cooperative. By digitizing cooperatives and combining them with cryptocurrencies, participants can be rewarded in a permissionless and transparent manner. What other revolutions could crypto technology bring? What decentralized organizational structures might find their way online and become more scalable because of crypto? I find that very interesting.

For NFTs, there may be many non-obvious use cases beyond just collectibles or membership. For example, how NFTs could be used as some kind of financial instrument to represent ownership or equity. We are still exploring the early stages of the crypto world, but at the same time, as an industry in a public environment, we are innovating rapidly in all aspects. It’s a sleepless and fast-moving world, and that’s why I love it.

C@S: Can you briefly introduce Boba Network?

Alan: Boba Network is an Ethereum Layer 2 network that makes Ethereum faster and cheaper to use; we do much more than that. Boba enables developers to have smart contracts that involve more complex algorithms executed off-chain on scalable platforms like AWS, returning the results to the smart contracts. They can build more interesting and feature-rich dApps, such as those that can call off-chain machine learning models or use advanced data analytics running off-chain; fundamentally, these are algorithms that are too expensive and slow to run on-chain. With Boba, both can be combined.

We also pay great attention to the accessibility and fairness of the Boba network. That’s why we launched the DAO alongside the Boba network, allowing BOBA token holders to participate in the governance of the network. Anyone who believes in the future of the Boba network can purchase BOBA tokens and stake them or vote on governance proposals. We want everyone to benefit and rise together. Even our incentive program is called WAGMI (We All Gonna Make It). This reflects our belief that we will rise as a whole and win together.

C@S: Can you describe what a rollup is? What are the different types?

Alan: One reason Ethereum is slow and costly is that every transaction executed on Ethereum needs to be repeated across the entire network. Rollups move transactions to L2, not on Ethereum L1, and execute transactions in a single-instance process called a sequencer. To prove that the sequencer processed the transactions as expected, it writes the proof back to L1, allowing third parties to check the cryptographic proof and verify that the transactions were completed correctly. This is essentially how a rollup works. Because of this, computation (transactions) does not need to be repeated over and over. It is completed once on L2, and then the proof of its correctness is written to Ethereum. This is what leads to cost savings and performance improvements. The sequencer also batches the cryptographic proofs of multiple transactions together before writing them to L1, saving on gas fees.

The two main types of rollups are optimistic rollups and ZK-rollups. The difference lies in how they prove the correctness of the rollup itself. Optimistic rollups assume that transactions are completed correctly, with third-party validators checking the transactions afterward. There can be multiple such validators operating, and if any of them find an issue, a red flag is raised, stopping the rollup operation and entering a dispute resolution process to determine if there really is a problem. In ZK-rollups, each transaction generates a validity proof that is created and verified in real-time. Because there is no post-check, there is no waiting period for transactions to be verified when withdrawing funds from a ZK rollup. The downside is that ZK rollups use computationally intensive processes to generate valid proofs, requiring more time to reach the point of being a general-purpose, Ethereum-compatible L2 platform.

C@S: How do you shorten the time? What role do cross-chain bridges and liquidity pools play in this process?

Alan: We shorten the withdrawal time to a few minutes by setting up liquidity pools on L1. The typical withdrawal method requires users to wait seven days to retrieve their funds. The L1 liquidity pool acts as a lender, providing funds for the seven-day withdrawal. For example, if you want to withdraw $1,000, your funds are locked for seven days, and then this liquidity pool steps in to immediately give you $1,000, charging a fee. The liquidity pool will wait for your $1,000 to unlock after seven days, and then the money goes back to the pool. This is how fast bridging works. Of course, the LPs of the pool take on the risk before the withdrawal. That’s why there’s a fee to be paid to the pool, which is shared among all LPs.

C@S: What happens if LPs withdraw funds in a short period, possibly for better yields?

Alan: That could lead to the fast bridge being unable to provide its function. The fees charged by the pool are actually dynamic. They change based on the balance in the pool and the demand for tokens. The higher the demand for a certain token, the lower the balance in the pool, and the higher the fees to attract more liquidity into the pool.

C@S: Since optimistic rollups like Boba Network execute smart contracts off-chain, how is that different from centralized platforms like AWS? How does Boba maintain the security of shared Ethereum when heavy computational work is done off-chain?

Alan: We don’t move everything off-chain; it depends on what developers want to execute and implement in their smart contracts and what they want to do off-chain. By the way, off-chain functionality is completely optional; you can deploy a set of standard EVM-compatible smart contracts without using any hybrid computing features at all. If you choose to leverage these features, you can control which endpoints to call, and the returned results are written back into the call data stored in L1. This way, there’s an immutable record of results returned from off-chain processes, and if needed, the results of the smart contracts can be recomputed.

Boba Network

C@S: What are Enya and OMG, and how are they related to Boba?

Alan: OMG was a project that started about five years ago; it was one of the first L2 scaling solutions for Ethereum. It launched the Plasma mainnet sometime in 2020 but didn’t take off because the DeFi summer had already begun. DeFi applications needed EVM-compatible smart contracts, while Plasma did not support that.

The original team of OMG was looking for someone to take over the project. Eventually, we partnered with the crypto venture capital firm GBV to take over the OMG project. As we developed, team members became part of Enya, a tech startup co-founded by Jan and me. Since then, OMG has become a foundation. It issued the BOBA token and contracted with Enya to build the next generation L2 (Boba Network) to fulfill the mission of scaling Ethereum.

C@S: How are Boba's gas fees calculated? What are they typically?

Alan: It’s a fairly complex formula, but it’s usually at least 10 times cheaper than doing the same transaction on Ethereum. On the website L2fees.info, you can see a real-time snapshot of the costs required for token transfers or trades on Boba. Compared to other L2s, our fees rank will vary over time as it also depends on the load of each L2 at that moment.

C@S: What are the uses of the BOBA token, and what influences its price?

Alan: The BOBA token is used for: 1) Governance: If you hold BOBA tokens, you can vote on governance proposals that affect the future of this network. 2) Staking: You can stake BOBA tokens on the Boba network to earn rewards. In this case, users can still vote on governance proposals; the two utilities are not mutually exclusive. Looking ahead, there will be more uses. For example, you will use it to pay for access to hybrid computing for off-chain computations. As we begin to decentralize the operations of the sequencer and other components of the L2 network, there will be staking components related to operating these nodes. Staking requirements will also be based on BOBA tokens.

C@S: What is your approach and philosophy behind the economics and governance structure of the BOBA token?

Alan: This goes back to the time when we believed in the idea of a community project. We want to ensure that the community of Boba supporters can participate, be rewarded, and have a say in how the network operates. From day one, we said we would create a DAO, and the token would be used as a governance token. This is also why we want to share the profits generated by the network. Of course, some profits will go into the treasury to fund ongoing operations. Through the current staking mechanism, if you own BOBA tokens and stake them, you will receive a certain proportion of reward every two weeks. That’s where the rewards come from. It’s all about driving community participation and maintaining the original belief: we will win together, and we will rise together.

C@S: How do you guide Boba and incentivize users to join this ecosystem?

Alan: This is an ongoing work; I think we can still do a lot to engage with the community. Right now, we have a Telegram group, Discord, and community members have created a website called Bobabridges.com. This site helps other Boba users figure out which bridge to use to transfer tokens to Boba. This application is very practical. Some community members are maintaining a Boba Instagram account, which is purely community-driven work.

We recently launched an incentive program called WAGMI, where users can earn WAGMI option tokens by using partner projects on the Boba Network. The value of WAGMI options is tied to the network's TVL. This encourages our users to inform others about the scale of Boba and incentivizes them to transfer their tokens to the Boba Network for yield farming. It’s a win-win situation because the higher the TVL, the more Boba rewards for all WAGMI option farmers.

C@S: How can users and builders participate?

Alan: Users: Go to the website, gateway.boba.network, transfer tokens, and start yield farming, especially WAGMI options. Builders: Please contact us! Join our Discord or Telegram; at Boba.network, we have a complete introduction prepared for developers.

Additionally, we will soon launch an accelerator and developer grant program to support developers building on Boba. I will also be speaking at the ETHDenver conference about the impact of hybrid computing. This feature has already gone live on our testnet. We hope developers can build on this foundation and see what new capabilities they can gain from executing more interesting off-chain algorithms.

C@S: What exciting projects are currently on Boba, and why?

Alan: There are really a lot: Oolong Swap started as a pure AMM, but they have been innovating and launching new features. Their philosophy aligns with our values. They have also collaborated with many other projects on Boba, such as multi-token farms. This is beneficial for the development of both Oolong and its partner projects. There are also many lending protocols launching, like the recently launched Bodh Finance.

Additionally, I am very excited about the upcoming NFTs on Boba Network. The first series is called Boba Punks, which minted in 52 minutes; super successful, and of course, there’s more to come. There’s also a project called Thetanuts, which simplifies the meaning of earning premiums through selling covered calls. For those unfamiliar with options contracts, this may seem a bit esoteric and complex. They have simplified it to feel like you are just liquidity mining over two weeks and earning high yields. Behind the scenes, they are trading with market makers, hiding the complexity of operations from the end users, which I think is very creative.

Experience Reflection

C@S: Can you describe the "aha moment" when you thought of Boba?

Alan: I saw those who succeeded on Ethereum, jumping into DeFi early when gas fees were low, making a fortune. They enjoyed that freedom, while others were shut out due to high gas fees. The latter didn’t buy enough ETH early on, and now they feel they missed the opportunity.

Seeing this inequality made me uneasy, and I was angry. It’s unfair, right? Just because of pure timing, some people gained enormous benefits from DeFi, and while I’m happy for them, what about others? If Ethereum ultimately becomes an elite club only for crypto-rich individuals, then they will fail in this decentralized movement.

That’s when I realized I had to do something about it. There are some technologies available now to scale Ethereum, but we won’t stop there. The benefit of rollups is that we don’t have to wait for Ethereum to solve many of these issues. We can take action today, start alleviating these "pains," and extend these benefits to more people today.

C@S: What are Boba's short-term goals, for example, in the next two months?

Alan: In the next two months: launch hybrid computing, provide educational resources to developers to understand how it works and what they can do with it. We have demo use cases and sample applications to show developers, and we will launch a series of hackathons globally to give developers the opportunity to build on hybrid computing and earn rewards. I can’t wait to see the applications that come out.

We will also invest heavily in marketing. When it comes to marketing, I don’t believe in just shouting and selling; I believe we should provide education to attract people to join us, letting them know what benefits what we create can bring them.

C@S: What is the ultimate goal and vision for Boba Network?

Alan: To scale Boba and serve billions of people globally, we need to continuously reinvent ourselves at all levels. This guides how we operate, how we talk about ourselves and our technology, and how we communicate and understand different users from various cultures and generations who will join the Boba Network. We need to not only develop our technology but also evolve how we culturally engage and understand the new users who will join Boba Network.