Dialogue Omni Network: Heavily invested by institutions like Pantera, analyzing Omni's Ethereum cross-chain interoperability innovation

Interview: bayemon.eth, ChainCatcher

Guest: Omni Network Team

With the rise and fall of new Layer 1s like Solana, Near, and Aptos, the story of the "Ethereum killer" is no longer fresh, and it even seems somewhat clichéd, yet it is indeed a real pain point in the industry.

As the number of users continues to grow, the transaction speed of "transparent ledgers" like Ethereum has long failed to meet the demand for "instant transactions"—Ethereum tirelessly supports a massive volume of transactions from around the globe day and night. The infinite expansion of the ecosystem and the limited space of blocks sometimes cause Ethereum to become congested like the elevated highways during rush hour. Therefore, to solve the "scalability" issue in the impossible triangle, more and more teams are beginning to build Layer 2 scaling solutions for the Ethereum ecosystem to enhance the transaction experience.

According to L2Beat data, the current total TVL of Layer 2 networks has reached $13.48 billion. It is worth noting that at the beginning of the year, the total TVL of Layer 2 was only $4.536 billion, which means that in the nearly concluded year of 2023, the total locked amount in Layer 2 has almost doubled. Additionally, the upcoming Ethereum Cancun upgrade is undoubtedly an "official intervention" to promote Layer 2 as a grand narrative throughout the era of Ethereum congestion.

However, the increase in speed and bandwidth expansion has led to the fragmentation of the Ethereum ecosystem—users' funds are often confined within a single scaling solution, and there is currently no inherent interoperability among Layer 2s. Moreover, the frequent security incidents involving cross-chain bridges in the first half of the year have closed a window for cross-Layer 2 operations. At the same time, switching between Layer 2s requires developers to make extensive modifications to the deployed code, making it impossible to smoothly deploy applications across different Layer 2s. Therefore, from both user and developer perspectives, how to achieve safe and stable cross-Layer 2 interoperability without significantly increasing costs has become a pressing issue to consider before the Cambrian explosion of Layer 2.

On April 26 of this year, a $18 million funding round drew the community's attention to a cross-chain interoperability protocol called Omni Network. Since 2017, the Omni Network team has been continuously focused on the many controversies arising from the isolated nature of Ethereum Layer 2 Rollups. To address this, the Omni team is dedicated to providing an infrastructure layer for different Layer 2 Rollup solutions, integrating Ethereum's restaking protocol EigenLayer with Cosmos SDK into a single platform, achieving the integration of Ethereum's modular ecosystem and interoperability of Layer 2 Rollups, while ensuring that the underlying security remains built on the Ethereum mainnet. Thus, Omni Network can be said to possess the security and programmability of Ethereum, significantly bringing more substantial user traffic to developers and providing users with a more convenient application access channel.

What initial opportunity led Omni Network to discover the pain points of Rollup interoperability? What significance will the team's six years of continuous efforts bring to the upcoming Cancun upgrade and the Layer 2 explosion? In this interview, ChainCatcher invites the Omni Network team to share their story of being the "final piece of the puzzle" in the grand narrative of Ethereum scaling from the perspectives of Restaking, cross-chain operation technology, and long-term vision.

Project & Team Introduction

1. ChainCatcher: Please introduce the structure of the Omni Network project and the problems it aims to solve.

Omni Network: Omni Network is the infrastructure needed for Ethereum to achieve future modular scaling, requiring three foundational functions in a modular protocol:

1. Rollups
2. Data Availability
3. Aggregation

Rollups solve the scalability issue, data availability solutions reduce costs, and Omni aggregates all these modular components to address fragmentation.

Users and their funds are currently dispersed across various L2 networks, which particularly affects developers as they can only access a small portion of the market when deploying on a Rollup. Omni Network enables developers to extend their applications to all Rollups to solve the current liquidity fragmentation problem in Ethereum.

We believe these three segmented protocols will create and capture most of the value in the upcoming market adoption cycle.

2. ChainCatcher: How did Omni Network get started? What initially drove the entire team to begin building such a cross-Rollup interoperability infrastructure?

Omni Network: In 2020, the team behind Omni built a DeFi protocol called Rift, which rapidly scaled. In the first few days after launch, its total locked value (TVL) reached the protocol cap of $50 million. We began to expand Rift to other smart contract platforms and encountered all the issues that Omni aims to solve:

• Liquidity fragmentation
• Poor developer experience
• Unsafe cross-chain operations

Since 2017, the Omni team has been building in this space, consistently focusing on community research. We saw the potential to transform Rift into a universally important platform for Ethereum. As Rollup adoption rates continued to rise, after actively exploring cutting-edge research at the time, we realized that opportunities at the Ethereum protocol stack layer would create several orders of magnitude more value than any DeFi protocol. Therefore, we fully committed to building Omni to ensure we had the right scaling solution as Ethereum transitions to a modular future.

3. ChainCatcher: Please briefly introduce the current situation of the Omni Network team, as well as the division of work and focus within the team.

Omni Network: The Omni team is primarily composed of experienced engineers. The team prefers to work with senior engineers who have experience building large-scale production systems, which allows us to combine many cutting-edge innovations into a single platform.

Currently, we have a seven-year funding reserve and plan to expand the team size by 2-3 times over the next year. While most companies in the cryptocurrency space are downsizing, we are scaling up. We believe that the opportunity to create the missing infrastructure for Ethereum's modular future will materialize in the next five years, and Omni Network is confident in achieving a leading position in this area.

If you are an experienced engineer with a background in building distributed networks and are interested in joining our team, we are globally distributed, and you can apply here.

4. ChainCatcher: The LinkedIn profiles show that the founding team of Omni (including CEO Austin King, CTO Tyler Tarsi, and COO Matt Poreda) all graduated from Harvard University and the entire team has a very strong technical background. What advantages do you think such a team background brings to the project's development?

Omni Network: The only reason we were able to start building Omni so early is that we have an extremely technically intensive team that has been involved in the cryptocurrency space since 2017.

Omni Labs' CEO Austin founded his first cryptocurrency company during his time at Harvard, raising funds and selling it to Ripple within two years. The company developed a similar large-scale distributed network (Interledger) that processed over 10 billion payments, sometimes achieving transaction speeds comparable to Visa's transactions per second.

Our CTO Tyler met Austin while studying computer science at Harvard, and after graduating, he entered the field of developing trading algorithms for institutions, managing over a billion dollars in assets. Our COO Matt studied at Harvard Business School and had experiences at Amazon, Spotify, and BCG before joining Omni.

Their expertise in cryptography, large-scale distributed systems, and company building has driven Omni's rapid growth to date.

Cross-Rollup: Breaking the Stalemate in Layer 2 Development?

5. ChainCatcher: For a long time, the cryptocurrency market has been in a "winter," yet the development of Layer 2 Rollups seems to have not slowed down, including the recent mainnet launches of Linea and Scroll. In this seemingly "contradictory" market environment, has it affected Omni Network? What measures has Omni taken in development and operations to respond to the potential differences in this macro environment and segmented market?

Omni Network: Ethereum was not originally designed to scale through the adoption of L2. However, as Ethereum itself could not achieve scalability, various teams invented external scaling solutions like Rollups. This brought more promising scalability to the Ethereum ecosystem, but the cost of scaling is fragmentation. Whenever users want to use these Rollups, they must migrate their assets to the "isolated domain" of that Rollup.

Currently, there is no effective and secure communication method between these Rollups, which means users can only use temporary solutions or even have to return to Layer 1 and then migrate to another Rollup to access all the latest applications.

This is clearly a huge problem, causing a very poor user experience and isolating developers within a single Rollup, limiting their access to a small portion of the addressable user market.

Omni solves this problem. It enables developers to build applications available across all Rollups by creating a high-performance distributed network that aggregates all L2 networks.

6. ChainCatcher: The Omni official documentation mentions two important features: "Cross-Rollup Programmability" and "Permissionless Expansion." What significance do you think these have for Layer 2 networks, the Ethereum ecosystem, and the entire Web3 world?

Omni Network:

Cross-Rollup Programmability

For developers, Ethereum's EVM looks like a single computer. Although Ethereum is supported by hundreds of thousands of computers distributed globally, this is a very important design decision because it simplifies development and reduces the chances of introducing programming errors in smart contracts.

For Omni, our goal is to unify Ethereum's L2 ecosystem and provide a similar developer experience, allowing smart contracts to be used across the entire ecosystem without modification. Omni enables developers to build applications and make them available across all L2s, but for developers, it feels as simple as building in a single EVM environment.

Because both of our co-founders are engineers, a lot of effort has been put into optimizing the developer experience in product design. This is a significant competitive advantage for Omni, as no other protocol can offer developers a development experience similar to Omni while expanding the user audience by more than ten times.

Permissionless Expansion

Understanding permissionless expansion is crucial to grasping Omni's ultimate vision. Similar to TCP/IP, Omni makes no assumptions about the underlying platform other than that it settles to Ethereum. Therefore, Rollups do not need to make any requirements or adjustments when joining the Omni network.

Omni is building a global aggregation layer for Ethereum, so it is necessary to have a design that encompasses all scaling platforms launched on top of Ethereum.

7. ChainCatcher: In addition to the aforementioned features, Omni Network also insists on EVM compatibility, while the current Web3 ecosystem has seen many non-EVM compatible protocols. The "EVM vs. Non-EVM" debate has sparked a lot of discussion in the community. For Omni, what advantages does EVM compatibility have over non-EVM?

Omni Network: This is actually a great question, as both EVM and non-EVM platforms have their advantages.

EVM: We believe that EVM is to the cryptocurrency space what JavaScript is to the internet. As a language, JavaScript is far from perfect. However, due to its widespread adoption, it has become the de facto language used across the global web. Therefore, from a scaling perspective, we believe that Solidity and EVM play a similar role in the cryptocurrency space.

Non-EVM: At the same time, we do see significant opportunities for improvement in the cryptocurrency execution layer. Considering the advantages of the Solana Virtual Machine in terms of speed and throughput, non-EVM platforms also have their strengths, and there are other great opportunities to implement other virtual machines and languages at the execution layer for further optimization of these platforms. However, one of the things we are most excited about is using non-EVM platforms as a mechanism to bring more developer talent into the entire cryptocurrency ecosystem. If we enable people to build smart contracts in languages they are already familiar with, we can significantly reduce the friction in scaling developer adoption across the cryptocurrency space, accelerating innovation and global adoption.

Returning to the concept of permissionless expansion—Omni can also integrate non-EVM Rollups. There are no requirements in the Omni protocol for Rollups to use a specific language or virtual machine. This has already been demonstrated through our current development and collaboration with Starkware and its ecosystem.

8. ChainCatcher: The Omni official documentation mentions that developers can use mainstream development tools like Solidity very "smoothly," and we also noticed that StarkWare is among the ideal partners for Omni, while StarkWare has its own official language, Cairo. What benefits will the collaboration between Omni Network and StarkWare bring to projects using relatively "niche" development languages?

Omni Network: Specifically, Cairo is a non-EVM language built from the ground up, making it easier to work with StarkWare's zero-knowledge proof-based Rollup technology. This showcases the powerful capabilities of building custom execution environments within Rollups, as integrating Omni with StarkWare suddenly presents a huge opportunity for developers in its ecosystem. Developers can build their core applications in Cairo and run them in the StarkWare Rollup VM, but through Omni, they can make them accessible across the entire Rollup ecosystem. Thus, applications can be globalized without compromising addressable users and liquidity, leveraging Omni to gain super-optimized execution capabilities from StarkWare.

Restaking: Security, Consensus, and Applications

9. ChainCatcher: In addition to making Rollup interoperability easier, Omni Network has also introduced the concept of "ETH Restaking." Please explain the role of Restaking in Omni Network's consensus mechanism and security, as well as the current reasons for using EigenLayer as the Restaking infrastructure.

Omni Network: One core insight we used when inventing Omni was to introduce a communication network for modular systems like Rollups, ultimately protected by Layer 1 itself. Our CEO has been building communication networks in the cryptocurrency space since 2017, and his previous company built the Interledger network, which processed over 10 billion payments. However, through Omni, because it can leverage Layer 1 as the source of truth, we are able to build a network that is fundamentally more secure and higher performing.

We intentionally designed Omni to be as close to the core Ethereum protocol as possible—it is the infrastructure necessary for Ethereum scaling, as if we were building directly into the core Ethereum protocol. Therefore, from the perspective of token economics, an important design decision is to use ETH as the asset to provide cryptoeconomic security. In addition to achieving unprecedented levels of security, from a growth perspective, Omni can scale to hundreds of billions by leveraging ETH to provide cryptoeconomic security.

Currently, we are using EigenLayer on Layer 1 for contract slashing due to the high-quality work of that team in this field.

10. ChainCatcher: In May of this year, during an AMA hosted by Omni, Starknet, and Kakarot, discussions were held regarding plans to enhance Layer 2 liquidity. Will Omni Network increase application scenarios in the future regarding liquidity enhancement? If so, please briefly introduce them.

Omni Network: One of the most exciting aspects of Omni is that it introduces a whole new class of applications that people can build to serve the entire Ethereum user market. Our team has considered many application scenarios, and some have already built novel applications on Omni, but just to name a few:

• Global margin accounts for all cryptocurrencies: Today, centralized exchanges still dominate cryptocurrency spot trading, especially cryptocurrency derivatives trading. This is primarily due to the lack of a unified global margin account that can provide collateral across multiple financial instruments, leading to capital inefficiencies. Omni can enable this type of product, which will be one of the key innovations to unlock on-chain financial activities at scale.
• Pure abstraction yield optimization: Today, the only users who can access top yield opportunities are complex network participants who write software to constantly migrate and rebalance their positions. With Omni, a protocol can be built that has the highest yield capabilities in every domain, meaning that Omni-based application scenarios are the first to create a product that can generate yield from every opportunity in the market. This is crucial for opening up DeFi to more users, as it will allow all users to access the best services offered by DeFi through simple deposits, no matter when or where.
• Global autonomous robots: By leveraging Omni's interoperability with all Rollups, developers can build software that dynamically responds to all state updates in the Ethereum L2 ecosystem. This can serve as a platform for various protocols, having a significant impact on the design of crypto applications.

These are just a few examples of new innovations uniquely realized by Omni, but we also see our developer ecosystem growing significantly through simpler, more intuitive use cases:

• NFT minting: NFT artists clearly want all cryptocurrency users to be able to purchase their work, not just users on a single Rollup.
• Token launch platforms: The same logic applies, allowing people globally to participate rather than limiting themselves to a small portion of the market.
• Gaming: Game developers only care about expanding their user base; why not provide everything through Omni across the entire cryptocurrency system?

So far, Omni has completed two network tests, with over 30 projects building on it—processing over 6 million transactions and attracting over 370,000 users. This makes it more attractive for developers to build projects on Omni.

Long-Term Vision: Layer 3, OP Stack…

11. ChainCatcher: In the long run, will the prosperity of Layer 2 Rollups continue? And with the emergence of Layer 3 in the current ecosystem, how do you view the development prospects of Layer 3, and how will Omni Network handle the relationship between Layer 2 and Layer 3?

Omni Network: First, Omni can seamlessly connect all Layer 3 platforms beyond Layer 2. We believe the Layer 2 space will continue to expand, with new platforms and solutions emerging, as there are good reasons for diversity among Rollup platforms. Developers can offer products with different languages, virtual machines, security guarantees, levels of decentralization, KYC compliance, and other dimensions. Over the past year, we have seen more and more participants entering the Layer 2 space, and this trend will continue.

This is necessary for scaling cryptocurrency to mainstream users. We need more blocks to attract the next hundred million users without causing gas prices to spike sharply, making it difficult for new users to adopt.

As all of this unfolds, Omni will become the missing component of Ethereum infrastructure, connecting all these platforms and abstracting all this infrastructure for end users to provide a simpler user experience.

12. ChainCatcher: Although Layer 2 is currently still in a "hundred schools of thought" state, we can also see that RaaS tools led by OP Stack have attracted a lot of attention from developers and users. Optimism has also stated its intention to create a "Super-Chain Kingdom." Will the rise of RaaS have an impact on Omni Network? If so, how will Omni respond to similar shocks in the future?

Omni Network: Certainly, in fact, this presents a huge opportunity for Omni rather than a challenge. We are already collaborating with leading RaaS solutions like Caldera. The more Rollups there are, the greater the demand for Omni. As RaaS providers continue to launch more and more Rollups, Omni will become an important part of the infrastructure, abstracting away the complexities that arise when they exist as independent platforms, making it easier for these new Rollups to attract new users and liquidity.

Next Milestone

13. ChainCatcher: The roadmap for Omni indicates that it will integrate major Rollup networks such as Arbitrum, Polygon zkEVM, Scroll, Linea, and StarkWare in 2024 and launch the mainnet. Can you share the current development progress?

Omni Network: Yes, we currently have leading Rollups, including Arbitrum, Linea, Optimism, and Scroll, all interconnected using Omni. We have close collaborations with Polygon and Starkware, and we will complete the integration work as the mainnet develops in the future.

14. ChainCatcher: In the future, will Omni Network continue to focus primarily on the Ethereum ecosystem, or will it consider providing similar solutions for other blockchains, such as Aptos, Solana, Sui, etc.?

Omni Network: This is a great question, as Omni is a general architecture that other ecosystems can use to create the first restaking use cases. However, since Ethereum is still where the vast majority of users, capital, and activity are concentrated, our team is currently focused on building protocols within the Ethereum ecosystem.