Exclusive Interview with Espresso Founder Ben Fisch: Innovative Breakthroughs in Cross-Chain Communication and Fast Finality Technology

In this interview, Espresso co-founder and CEO Ben Fisch elaborates on the project’s technological innovations aimed at solving the fragmentation issues in the Web3 blockchain ecosystem. Espresso provides high-speed finality and supports Layer 2 technologies to facilitate efficient communication between different blockchains. Ben details how the project leverages improvements in consensus mechanisms and innovative techniques such as erasure coding and zero-knowledge proofs to reduce cross-chain latency and enhance inter-chain interaction. He also discusses why Espresso attracts top developers and investors, as well as its future market positioning and tokenomics model.

This content reflects the guest’s personal opinions and does not represent Wu Shuo’s views. Audio transcription is performed by GPT and may contain errors. Please listen to the full podcast on platforms like Xiaoyuzhou, YT, etc.

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Origins and Initial Goals of Espresso

Colin: First, could you tell us how Espresso started, what key projects in the Web3 space you initially saw? Who are the main investors supporting you now?

Ben: When we started developing Espresso, our initial focus was actually on solving a different problem—privacy. We aimed to create a flexible privacy protocol, especially for compliant yet private stablecoin payments. During the development of this new protocol, we realized that building a system with both high performance and effective integration with other parts of the Web3 ecosystem was extremely challenging. For example, if we created a new payment chain as a Layer 2 to boost performance, it would be completely isolated from other activities in Web3. At that time, people were using stablecoins and DeFi protocols, and ensuring liquidity in our new ecosystem was nearly impossible. So, during this process, we understood that this was actually part of a larger problem. We decided to directly address the fundamental issues Web3 faces today—fragmentation makes innovation and building new chains difficult. We asked ourselves: how do we solve this? That was the initial motivation for developing Espresso. Of course, we can further discuss how Espresso addresses Web3 fragmentation. Web3’s original goal was to fix the fragmentation in the existing financial system, but it hasn’t fully achieved that, and this is the core problem we aim to solve with Espresso.

Supporters of this project come from multiple funding rounds. We received seed funding from Polychain, followed by Series A led by Sequoia, Electric Capital, and Greylock. Recently, in early 2024, we completed Series B funding, with a16z as the lead investor for this round.

Impact of Competition for Talent between AI and the Crypto Industry

Colin: In fact, over the past two years, the crypto and AI industries have been competing fiercely for funding, talent, and attention. I believe, especially in the US, most developers are trying to start AI-related projects. Does this put pressure on your team in terms of talent recruitment?

Ben: I don’t think so. I haven’t felt that pressure directly. We’ve been able to recruit talented people to join Espresso. I believe there are some impacts, but many other factors are also at play. Currently, there are still many people interested in and in demand for crypto companies. Of course, the combination of crypto and AI also holds great potential. So, while I haven’t felt direct pressure, there may be some underlying issues I haven’t yet realized.

Causes of Web3 Fragmentation

Colin: You mentioned fragmentation earlier. After more than ten years of Web3 development, why is digital finance still so fragmented? What is preventing liquidity from sharing across large unified platforms?

Ben: That’s an excellent question. In fact, this was also the original vision behind projects like Ethereum: to build a single global computer where all financial programs could run and interact seamlessly. If you look at today’s virtual machine ecosystems, such as Ethereum mainnet, liquidity isn’t too fragmented because smart contracts can interact with each other. So, liquidity between different smart contracts can be combined. If the performance of a single chain isn’t limited, you can even imagine a global order book that unifies trading of all digital assets—anyone can place sell orders and match with buyers. In that way, liquidity becomes unified—at least in the context of digital asset trading.

Of course, liquidity can have different meanings in different contexts, but when it comes to digital asset trading, you can indeed achieve unified liquidity within a single chain environment. Today, we see this to some extent.

However, the problem is that no single chain can scale to support the entire application world. To achieve scalability and customization, many different chains are necessary. It’s like today’s world—there are thousands of web and mobile applications, and any developer can customize their architecture to suit their needs. In the Web3 space, such flexibility is also required. Over the past five years, the Layer 2 paradigm has emerged to meet scalability and customization needs. In this model, anyone wanting to run a chain can build one tailored to their needs. This chain only needs to record transactions on a base blockchain, like Ethereum, using it as a database rather than a global computer.

While this approach offers scalability and customization, it also introduces more fragmentation. The problem is not only the existence of many Layer 2 solutions. Due to Ethereum’s scalability bottlenecks, other blockchains like Solana and Avalanche have been created. Now, all these blockchains exist as independent, isolated systems. To some extent, this returns us to the starting point of traditional finance—filled with isolated exchanges and payment systems that cannot interoperate well. That’s why, even after a decade of Web3 development, we still live in a highly fragmented world.

Reasons Why Digital Finance in Web3 Remains Fragmented

Colin: We know your project has top developers and a solid technical foundation. Can you describe in simple terms the technical aspects of Espresso? How does it differ from other blockchain or infrastructure projects?

Ben: Espresso is a Layer 1 blockchain—a decentralized protocol operating as a Layer 1. But what sets it apart is that it’s specifically designed to support Layer 2. Ethereum scales via Layer 2 solutions, but Ethereum was not originally designed for Layer 2.

The capabilities needed at Layer 1 to support Layer 2 are quite different from those required to support smart contracts and other functions. Espresso doesn’t have smart contracts; we have completely removed them. We focus on becoming the best, highest-performance, low-latency database that Layer 2 can write transactions onto. The key is that validators in the Espresso network do not need to receive all data; they only need to collectively ensure data availability and retrievability. At the same time, they must ensure that any user reading this database as Layer 1 can read the data in the same way.

This technical concept is called “fast finality.” As a Layer 1, Espresso achieves very rapid finality—much faster than Ethereum. Ethereum takes about 15 minutes to finalize transactions, whereas Espresso can finalize in a matter of seconds. Soon, we plan to reduce this to half a second.

Why is this important today? Returning to the fragmentation of different blockchains, the reason unified liquidity is difficult is that applications or smart contracts on different chains cannot interact as easily as those on the same chain. The key is communication speed. On a single chain like Ethereum, even if confirmation takes 15 minutes, smart contracts on that chain can communicate with each other in real-time, which allows their operations to be combined. You can have multiple AMMs or lending protocols with liquidity, and they can interact instantly.

Once you place them on different blockchains, unless those chains are extremely fast, they cannot interact in real-time. If all chains are highly fast, then they can communicate instantly. This enables new features, like a universal order book, where orders on one chain can match orders on another, or a lending protocol on one chain can fund operations on another.

You can observe this in decentralized exchanges that create custodial asset pools across different chains, enabling smooth trading of digital assets between chains. So, when trading ETH and BTC on a centralized exchange like Binance, the delay is nearly zero because Binance manages separate asset pools on two different chains, enabling “instantaneous” trades. If you want to do this without a centralized, trusted intermediary, the chains themselves need to be extremely fast. That’s the key difference Espresso provides as a Layer 1 supporting Layer 2 chains.

Espresso’s Consensus Mechanism and Cross-Chain Communication

Colin: I think your explanation is very clear and accessible even for community members with less technical knowledge. Next, your Layer 2 chains are indeed faster, but they also make everything more isolated. Vitalik has mentioned this point too. What specific problems does Espresso solve regarding fast finality and cross-chain communication?

Ben: Espresso significantly accelerates finality while supporting multiple chains. It addresses how to support multiple chains—multiple Layer 2s and parallel chains—and ensure they all reach finality very quickly. This is the key challenge for interoperability. Once chains are fast enough, applications on those chains can send messages to applications on other chains and effectively receive messages in real-time. This allows applications or smart contracts on different chains to interact and compose as if they were on the same chain.

This will enable us to build new cross-chain exchanges, cross-chain DeFi protocols, and other potential cross-chain applications that behave as if everything is on one chain, even though these chains are tailored and constructed differently.

Espresso’s Consensus Design and Fast Finality

Colin: I think the next two questions can be answered together. First: What are the main components of Espresso’s consensus system? How do you plan to achieve sub-second finality? Second: How does cross-chain communication work within Espresso? Do you use zero-knowledge proofs, trusted execution hardware, or other technologies? What roles do they play?

Ben: Let’s start with the core of Espresso’s consensus design. Because Espresso has no smart contracts, its design can be quite different from other Layer 1 protocols. Validators participating in Espresso do not receive a full copy of each transaction block. They don’t need every block because they don’t need to execute those transactions to determine the chain’s state. Espresso runs as a Layer 1 chain supporting a Layer 2 chain. Accordingly, they treat the data in blocks as raw data—validators don’t need to understand it. This allows us to use a technique called erasure coding, where each block is split into multiple parts dispersed across the network. Validators only receive a portion of the data. As long as enough validators remain honest and not compromised, they can collaboratively recover the full data. This greatly speeds up communication among validators, enabling consensus on data block ordering—i.e., finality.

There are other innovations in our consensus as well. Our consensus is based on the HotStuff protocol, with multiple versions. HotStuff 1 is the latest version used in Espresso. Our two lead researchers, Dahlia Malki and Kartik Nayak, are pioneers in consensus research. Dahlia authored the HotStuff paper, and Kartik recently wrote a paper called Hydrangea that removes one voting round from the consensus process. You might have heard of other consensus models like AlpenGlow, Minimmit, or MonadBFT. Espresso’s design is based on cutting-edge research and competes with these models. It can reach consensus rapidly because, unlike systems like Solana, it doesn’t need to wait for all validators to execute transactions. It doesn’t need to understand transaction data at all. This is how the consensus protocol operates—after two rounds of voting, finality is achieved. In optimistic cases, this can even be completed in a single round of voting.

Next, regarding cross-chain communication: it’s important to understand that even if each Layer 2 chain achieves fast finality with Espresso Layer 1, if you run a node on a Layer 2 chain, you can still read transactions and compute its state. This way, you can verify what’s happening on that chain. Different exchanges might do this, or services like Circle’s CCTP or Chainlink’s CCIP bridge services. If you run a node on the chain, that’s enough to confirm what’s happening there.

However, for cross-chain communication involving smart contracts on one chain receiving messages from another, fast finality alone is not enough. Smart contracts on one chain don’t run nodes on the other chain, so they cannot verify messages by themselves. They need something like zero-knowledge proofs to demonstrate the results of executing a final confirmed transaction list. Or they can use Trusted Execution Environments (TEEs), which are more practical for real-time verification of computations. Using zero-knowledge proofs or TEEs, you can achieve real-time cross-chain communication between Espresso chains.

These technologies are crucial because they enable rapid cross-chain messaging. For example, zero-knowledge proofs and TEEs are insufficient for fast cross-chain communication between Ethereum rollups because Ethereum itself is too slow for quick finality. But Espresso can achieve fast finality, making these technologies effective for enabling fast cross-chain communication.

How Espresso Supports Multi-Chain Ecosystems and Bridges to Other Chains

Colin: We know more than 20 rollups are already integrated with Espresso. What common features do they share, and why choose Espresso? How does Espresso assist them? I believe you’ve mentioned some, but could you elaborate further?

Ben: All the rollups we work with focus on achieving fast finality. Many of them are payment or DeFi-focused, although we also have projects like Ape Chain, which is dedicated to NFTs. So, these different use cases all benefit from faster finality and better interoperability within a broader ecosystem.

It’s important to note that all the rollups we support today are Ethereum rollups. While they use Espresso to achieve fast finality, they still have bridge functions to Ethereum. What excites me is that we are beginning to collaborate with some rollups on multi-bridge explorations—they can not only bridge to Ethereum but also to Solana. For example, when a rollup runs on Espresso, it doesn’t just need to accept ETH deposits; it can also accept deposits from Solana or Avalanche. This is a key advantage of Espresso as a fast finality layer. Espresso ensures that all these bridges to other chains stay synchronized.

Another point is that, so far, we mainly work with rollups or Layer 2 chains, but Layer 1 chains can also work with us. We haven’t seen this happen yet, but we’re negotiating with some Layer 1 chains. Layer 1s could adopt Espresso as a modular part of their infrastructure to achieve better speed.

Demand and Use Cases for Rollups with Espresso

Colin: In your view, what do real project teams care most about—faster finality, lower data costs, better cross-chain communication?

Ben: I believe all three are important. Faster finality is of course the main concern and is also our unique competitive advantage. We also provide data availability, but that’s not as unique because other solutions like Avail, Eigenlayer, and Celestia also offer data availability. The benefit of using Espresso is that if you choose us, we also make your data available. So, if you’re using other data availability systems, you don’t need to switch; you can use both us and them simultaneously. This offers more options for data availability, but I wouldn’t say data availability is the primary reason people choose Espresso, because it’s not as uniquely differentiating.

The key differentiator is rapid finality. Improved cross-chain collaboration is a secondary effect of faster finality. But this will become more evident as more chains adopt Espresso and become faster, especially after they integrate new fast cross-chain communication standards. This will enable us to create applications that truly leverage this—if you just make chains faster without developing applications to utilize it, the major changes in cross-chain collaboration won’t happen immediately. Application development is necessary to fully realize this potential. That’s why we’re not only working with chains but also collaborating with cross-chain application developers. We’re working on applications like cross-chain order books, which will promote new ways of trading across multiple chains.

Reasons for Token Launch and Future Value Drivers

Colin: Why did your team decide to launch a native token? After the Token Generation Event (TGE), what makes the token valuable? Is it staking, MEV sharing, cross-chain opportunities, or other factors that make community members or traders see the token as valuable?

Ben: We launched a native token because, like all other Proof of Stake Layer 1 protocols, the network is operated by stakers or validators delegated by token holders. So, the token plays an important role in securing and operating the protocol itself.

I believe that, across all Layer 1 protocols, the fundamental value of tokens comes from cash flow. Specifically, the revenue generated by token holders participating in protocol operations using the token.

This is a common principle in all Layer 1 protocols. Some people think that tokens like Ethereum or Solana have intrinsic monetary properties, but I disagree. I believe that theory remains unproven, especially after the rise of stablecoins. You can always exchange tokens for stablecoins and use them as base trading pairs or for payments. So, the only intrinsic value of any Layer 1 token is cash flow.

Now, I’ll speak more generally about why the Espresso network as a whole will capture value. It’s important to note that if our vision succeeds, Espresso is poised to generate a huge network effect. Every platform hosting digital assets or payments will be incentivized to integrate with Espresso to connect as closely as possible with other parts of the Web3 ecosystem and access the deepest liquidity. If this happens, all major use cases—trading, payments, cryptocurrencies—will naturally flow through the network, since every chain connected to Espresso will eventually send its transactions to Espresso.

For example, projects like Monad need to build applications from scratch and onboard developers. But when we work with chains like Celo, which already has millions of wallets, or Arbitrum, where all transactions will immediately become Espresso transactions, we are ready for rapid growth. Certainly, individual chains will capture some revenue, but in the long run, Espresso will capture a portion of the revenue from cross-network transactions.