The Road to Rome: layer 2 solutions and DEX dominance
After Julius Caesar successfully crossed the Rubicon he did not declare victory over Rome for another 12 months in December 49 B.C. The path to Rome for the revolutionaries was both long and fraught with difficulty yet ultimately worthwhile. Much like the famous conqueror, Rubicon has grand plans to march on the antiquated modalities of traditional finance and build a decentralized global equity market — our proverbial Rome.
In the spirit of incrementalism, our team has already taken our first step on the path to Rome with the soft launch of our mainnet application and smart contract. This first step across the proverbial Rubicon towards Rome has helped us to begin testing our UI at scale and provide users a first look into our product. With the foundation set by our soft launch, our team will continue to run product demos and iterate our application/approach to ensure that we are providing users a best-in-class experience and implementation that works for them.
Despite this first step forward on the path to Rome, the campaign is far from over. During our soft launch, a bittersweet irony was placed on full display: due to the rapid price appreciation of Ethereum (sweet) and network congestion, L1 Rubicon is too costly and nonsensical to use (bitter)! This is primarily because Rubicon is a central limit open order book — a modality that is non-competitive for retail traders to use today (on Layer 1 — native ETH) but dominant tomorrow (on Layer 2 — Optimistic Rollups). We have the massive conviction that the open order book will assume DeFi dominance (and have done much writing on the matter) as the network starts to transition capacity to Layer 2 solutions in 2021. As soon as throughput and transaction costs are dramatically reduced in a Layer 2 context, markets on Ethereum and Rubicon will be able to start looking like the efficient markets of high-finance today. This is why we have continued focusing our efforts on marching and iterating towards this future.
Layer 2 — an Optimistic Future
The next major milestone for Rubicon will be a successful Layer 2 launch. This is comprised of: [1] modifying our application and UX to support L2 functionality, [2] porting our existing smart contract(s) to the Layer 2 context, and [3] building liquidity on the Rubicon Protocol Layer 2 order book. All of these pieces are necessary for us to achieve our goals here with app modifications and liquidity being the primary challenges.
While on the topic of Layer 2, now is a great time to announce that Rubicon plans to integrate with the Optimism implementation of Optimistic Rollups! The public benefit corporation Optimism is hard at work building out their layer 2 architecture for a public testnet in March and a full launch ASAP. Here is an abbreviated list of reasons why we chose Optimism and the OVM for Rubicon’s future Layer 2 technology: it allows for 1:1 interaction with native Solidity and the EVM, it is primed for DeFi composability and adoption, allows our application to remain permissionless, and it is supported by some of the top minds and teams in the space.
Once live in a Layer 2 context, Rubicon app users today who face scary transaction fees (due to ETH pushing $1,600+ at the time of writing) and the option of better L1 (native Ethereum) token liquidity options will enjoy a >100x reduction in fees and a 98% reduction in transaction times — neat! This helps take Rubicon into a context where it is not only “competitive” but also the optimal modality for an efficient two-sided, decentralized asset marketplace. In short, things like AMMs win today by offering a gas-efficient liquidity hack in a layer 1 context — we are excited to build the optimal decentralized exchange for the coming next-generation of infrastructure. By the time Rubicon launches on Layer 2, it will have successfully marched to the surrounding areas of Rome. Scaling the walls and liberating (decentralizing) the city of Rome will be the next steps thereafter — until then, onwards and upwards!
Other Moving Parts
In addition to working on getting our application and smart contracts onto the next-generation of blockchain infrastructure (Layer 2), we are still hard at work on a few other fronts.
Firstly, we have not forgotten about the gradual decentralization of the Rubicon protocol. This is fundamental to our mission and values. This will be achieved through the ultimate release of our governance token. We are working hard with our team to finalize the parameters and approach for this crucial piece of the Rubicon puzzle.
Secondly, another key focus for our team in addition to launching our token and porting our technology stack to Layer 2 is to fundraise. We hope to partner with forward-thinking investors this Spring to scale the Rubicon team, mission, and product. If you consider yourself a forward-thinking investor please reach out to us!
