Sandeep Nailwal I Future of the AggLayer I Polygon Labs I Pragma Singapore 2024

[Music] and uh I want to jump right into our next talk and for this I'd like to bring on snep who is the co-founder of polygon we're going to try to spice things up a bit and talk about what's on his minds and uh for this one if somebody has any questions you can uh go on that side and tell it to one of our team members and we'll communicate those questions to me so we can make sure that we still get to answer some of these questions but without further Ado let's welcome some deep thank you yeah I was telling karik that let's make it spicy like otherwise these panels and these will that become boring for you guys also if you have any spicy any controversial question to ask feel free to shoot and interrupt us anytime like anytime during the event just interrupt us and we'll come to you probably maybe k this this may not work out well for me we we'll see all right well we we'll try our best um the part about Braga that I like is that it's itally bet to be small so we actually can have these types of experiences uh just just before you came on or the very first talk we had stany and we was throwing socks at people as swag that's the first thing and uh we get to do that so uh the distance helps and the small group helps so uh we'll make this interactive to the best best we can but uh let's uh let's start with uh a mild question we're not going to get spicy immediately you just finished the PO transition looks like it went well no issues maybe some confusion that people will have either no issues or nobody cares and I hope it's the first one right um if you had to do this transition all again would you do something differently what was the hardest part of doing this multimon long actually multi-year long transition cuz the polygon change was two years ago it's hard to say like I mean we tried to the the main uh you know kind of blocker Factor blocker was uh the exchanges only like the centralized parties and many of them uh had to like you know schedule it uh they also don't have this all this visibility and their Engineers like when they can CH it and all that so probably like we could have given like maybe oh yeah so basically six to8 eight months back we have been trying for the exchanges that okay we want to do this and when do we want to pick it up and all that nobody was giving us time slots like what they are comfortable with eventually I said like okay screw it we are going to announce a date after that whichever exchange follows follows if they don't follow they don't follow we announced a date uh you know and then few exchanges already started coming in other exchanges are you should have given her more time G more time like you know two years is not enough we need more G you time and uh and then we said like guys this is the date fourth September we are going and all that and like as late as like two weeks before you know one of one or two of the exchanges actually um you know kind of finally decided that okay we want to do it and uh yeah like I'm I'm not really even sure that why they took so much time for say what is the hard part about this thing they just had to change the database from madic to PO and that's it yeah so on the POS chain it's very straightforward right it was the base token of Matic was the base token so you just do a hard fork and then the base token is now uh pole token on ethereum it's it's where like people hold this Matic and they have to like you know uh manually uh you know go through the migration contract on exchanges also it it it should have been even more simpler cuz they would have done it for everybody yeah they would have done for everyone but I think Matic is one of the highest volume coins uh for them so they were also very scared to lose this volume so what they all did is like okay we have Matic and for some time we'll have pole also eventually we'll phase out Matic as the volume moves but they can do that on the same chain how would that work exchange they have these these both of these tokens listed I see so they just created a second Market but it was not actually settling because they don't want to lose the like all of them are like as the volume moves more and more towards pole then we will remove the Matic and and that like you know for our users is super confusing right but like you know it's hard to convince them to lose like that $230 million volume daily so that's the problem so so the lesson here is uh don't change the name in the future yes yes yes yes yes yes especially with the to and other thing is like on in ethereum community and this is one like you know one part like I am these these days I'm little bit uh unhappy with the the you know how we are going in the ethereum community is that uh you know we had this token Matic token which had upgradable rights initially but then you remember that you know when we launched this polygon P this is not an L2 this this this that like so everybody came on to us and then somebody at one point in time also posted oh this token has minting and upgradation rights and all that they're going to do this and we said okay like you know and that fud was getting bigger and bigger so we uh you know burned the the ownership rights over there if we had that we wouldn't have to go through all of this we would have upgraded that token right I did not know that that's actually yeah it's it's it's pretty painful and now you see one of the things like we are all in the ethereum community is doing and I think you are one of the voices which should uh you know I mean if you agree with this is like you know everywhere like I'm coming like this is my maybe 10 15th panel here right and out of them five or six of them have this direct question are l2s taking value away from ethereum and why ethereum BTC price is going like down what do you think by the sentiment and I think the whole ethereum Community is focused on that value on the token ethereum e is going down and what can we do and due to that what is happening is in the ethereum community the in the amongst the thinkers also like everybody's like kind of now being pushed to add more and more value to ethereum and what how do you do that you do it by like okay let's enshrine this thing let's do this let's do that like based all so many things where people are trying to you know extract as much value into ethereum base layer and what happens is that I think that Destro like obviously I'm like building a layer too so is like detrimental to us so I might be biased but what I'm saying is is like that also starts destroying little bit of like this uh protocol Builder uh confidence in the base layer right like you you start thinking okay whatever I'm building and I spent six or 10 years on building something and then that might be just simply absorbed into the base layer versus like you know you see how that looks threatening yeah yeah yeah yeah and then what you do is when you do so many things with the L1 then you are risking the stability decentralization censorship resistance of the L1 which I think BTC Community has done one thing that very well that you know they have kept the base layer very very very simple they add features you know slowly uh of course we are not saying like make it completely slow but you know uh ethereum should be the the leadership in ethereum community I'm saying should be focused on making it a better and better settlement layer right that's the based nature of uh ethereum and I think right now we have a lot of these undue pressures of value and all that like let's keep ethereum the infinite Garden that it is like which attracted a lot of people like me and many others in the arbitrum like op and everyone who came to you know build on top of ethereum so I mean for my next question do you think l2s are taking away value from well so okay so this is also a good question like this no no no no it's it's not a good question because it's giving precedence to money being the only outcome that you measure something by and that's a very shortsighted view um and I do have a question that actually is the the right question I want to ask but I want to dig into something that you just said which is okay let's think about making this a better settlement layer what in your opinion makes this can make something a better settlement layer like what is it they you're missing here and uh and kind of where do you think the attention is not going sure so for the settlement layer like there there are few things that e uh like any settlement needs that settlement layer needs and essentially there are only two Bitcoin ethereum can compete nobody else can compete on that uh that right but what are the two things first is decentralization like the decentralization is the first measure and ethereum is doing well on that and you're measuring that by the number of people who are able to run notes or people who are able to run nodes and and things like that there are other parameters I'll come to that which where ethereum might not be doing that great but at least on the note I'm saying at least the Strategic focus is at least good on that right okay we want to have we want to do the techn technology in a way that people can run home uh notes right so that's one censorship resistance is the second biggest thing right and we had like this care one year back where uh suddenly after the merge that you know ofac compliant uh you know blocks went like really really high right and I think like we did community did some work to you know mitigate it to some level but it's still little bit there so as much sensorship resistance can come into the base protocol that's uh very important uh then I would would say another important thing is reog resistance right like you know because that leads to settlement delays right like the more riog prone the base layer is uh you know the settlement for the layer twos and other things becomes like you know uh slower so improve on the settlement layer this another thing is this proposal Builder uh setup that we have like you know I mean there are like five seven proposers and all that that is also not good longterm but I'm guessing that uh you know I mean in terms of having concent amongst few uh proposers right so we should be like as ethereum Community we should be working more on figuring them out and then only the last thing would be to do like have like pre- compiles will help who help in which help in better like easier settlement cheaper settlement oh interesting so so you're saying well I hadn't thought about that last one I agree with the others um and now this is like me having a conversation with him and you're listening um but pre compiles helps with effectively giving an argument that I can actually delegate a transaction to L1 instead of L2 because I'm actually able to sort of now get that offchain benefit directly in L1 so is that helping your argument for getting a better sment layer or is that saying we would like to have more reasons to not even use l2s because you should have the L1 do most of the work or support most of the the volume or or through it u i I'm talking about pre- compiles which are like let's say ZK settlement based like ZK based uh pre- compiles like some of the hash functions and all that which can be cheaper and better but that leads to basically having a scenario where it becomes equally easy to make the transaction be an L1 instead of the L2 right which kind of I'm talking about user transactions like this is a CH settlement trans saying is like let's say let's say you have a pre-compile to verify a ZK proof and you kind of get to do recursion or just simple verification faster um is that not kind of increasing the number of transactions you can do now on the L1 instead of kind of relying on L2 like a Rik specific roll up and then having that roll up several mons I see what you I see what you mean like I'm like I'm not against like layer one being able to do more transactions because layer two layer one ethereum as a settlement layer needs also like when imagine we are able to build uh in next 5 to 10 years we are the industry is able to bring the the whole world to web 3 you are going to need more on the so so I am absolutely not against like L1 increasing the capacity but increasing the capacity for settlement right is is is more important and and like while it's important to focus on the value of e but right now maybe it's like because of like the a lot of like uh you know uh challenge that is coming from other lay ones like especially like let's say Solana and all that and due to that like there's a like I feel that this is an uneasiness in the community that oh e value is also going down like the E should pump and everything else is like you know if if e was still doing well in terms of the price maybe people will not feel that better but l2s are great right yeah yeah yeah then l2s are great and I think these are like cyclical right like I mean um another like uh somebody is asking me that you know Solana is doing great in community and there are like uh like all these Solana communities popping up all across the world and all that and I said do you know e Global by the way like you know I mean we we have lived that life right 2016 17 18 like e Global was everywhere like everywhere e e events were popping up and we had that community and all that and it's it's not that hard like I can tell you it's not that hard like polygon had 150 guilds in 150 cities in the world like it's it's not that hard to do but it's what is hard is can you have highly motivated community and people join you know uh staying in that community and new people coming in old people going out and and still maintain that fabric of community over time so I would like for example Solan Community like I have all the best wishes for them but I I would want to see I would want to have this conversation in 2020 uh maybe at least 2026 right and see like in 2 years if if the same sentiment remains after one cycle has been crossed because this we know that how much dependent it is on the cycle we've seen that a few times to know how how the story ends and uh the challenging part is Will these people basically go to somewhere else cuz they're not seeing um anywhere from an attraction to the sentiment changes like amongst their peers and in this what happens in the next one like you know monad comes in and you know they all they have like now this parallel compute with the evm and all that all the thing like what happens with can that Community stay they have better ux also there can this community still say so that's the challenge every project has to uh you know uh uh go through and one fun thing about like the crypto Community crypto crowd is that you know every has a peak in terms of price I'm saying like the price is going and there's the peak so the same argument that you have on this side of the peak like oh this is great like there's a community they have so much fun and like you know this for example this ver like so amazing parties are there right and then once the peak is crossed this side same argument these guys are only partying like they head to party like there's so like you know this these sentiments are we should not read too much into it especially as Founders like you know focus on the fundamental stuff yeah it's uh it sounds like a stupid thing to say it's like things take time and and you have to put in the work and and the time and uh if things are going well you kind of see a massive buildup and then immediately it sort of starts working and uh you've seen that through polygon and we've kind of seen the first five years together of each of our sides of this and uh but once you kind of really hit that Mark you know exactly what worked and what didn't um I do want to kind of spend some time on on the agler thesis um is any of the stuff that you're doing with the aggregation layer um helping address the settlement arguments that you just built in and can of tell us like what made you come up with that yeah yeah so uh one of the like bigger issues like which is like a legit issue on in the ethereum ecosystem is that uh with so many of these chains and liquidity fragmented user there is certain level of user and developer uh you know um confusion and I think like if you want to build that uh you know this trustless inter that we all uh have envisioned we need to have two important things like like the way in web 2 uh there is like seamless data uh you know connectivity like you know you land here you just pick up your grab and you know use your credit card to book the cab and all that right like everything in the back end is abstracted you don't have to you know subscribe to Singapore's internet when you come here but that's not the situation in in in crypto and in blockchains I think everybody knows that and uh uh but like what I was saying is that in in web 2 there are two important things like the like the data and the information is uh you know seamlessly can move across the across the networks and second thing is that it's infinitely scalable like practically I mean I don't want to the big ass tricks in there it's a big ass tricks but it's practically infinitely scalable as many apps want to launch like you won't find uh somebody who say like I want to launch an app but internet doesn't have the bandwidth for me right so they can launch their own servers and launch their apps and all that like if web3 needs to go to that level in 5 to 10 years we need to also have these two things infinite scalability but while still having that interoperability of value like this is a internet of value this internet of information Web Two web 3 internet of value so value should be seamlessly uh movable and you should have infinite scalability so with L2 stacks and all that I think infinite scalability is there like fair amount of safe ically we're saying what at least 10 to 20,000 transactions per second and more yeah for for now yeah easily easily like comb combining all these L2 chains like you have literally infinite and you can launch more and more L2 chains and any I think any anybody who's launching a meaningful application uh and they have confidence in their building abilities they all are I can see that they all they all want to have their own chain they don't want to be like in fact uh I mean uh one of the like very prominent team in Solana I think uh what's that name called Phoenix uh they're very Pro like very Pro Solana people and all that and they wrote like this nice thesis and all that that why they are creating their their own chain on top of Solana right now and uh and doesn't have l2s yeah yeah exactly so basically the whole thing is like Solana has 3,000 TPS but that is also not enough the moment you launch your dab and you have 100,000 users and you know if you are building a good ux app most likely you are paying the gas fees for the user suddenly your gas fees bill is like through the roof So eventually you have to go and launch your own chain if you building any meaningful user consumer application probably you'll need your own chain and that is what is happening you will you're going to see it more and more and you're going to have like probably tens of thousands of chains so coming back to the aay thesis aay thesis is this that you can launch even million chains on top of agay and connected and you have like practically infinite scalability but then you have this liquidity fragmentation so Ager is is the Pur of Ager is that it provides you like this safe interoperability guarantees between the chains and uh you know which also gives you the way it is built it also gives you uh you know unified liquidity so for example you have 100 usdc here it is one single token across the whole Ager so when you do a transaction you just say that okay I'm I'm I'm I'm I'm I'm selling my usdt and get buying an nft with that right and you do your you can be on chain number one and and then you are doing this activity on chain number 20 and then you click one transaction everything happens uh in the background you have the same address across the chain that nft is bought comes back to you on your own chain because of this AG's uh you know connectivity and there must be a lot of developers here also how it works is that all these tokens have one single canonical mapping right so whether you have usdc on chain one or chain thousand uh it's one single uh token so it can move you don't have to have like liquidity Pockets that okay in order to move usdc from one chain to another you have to have liquidity on the other chain it's one single token right so it moves extremely fast you can burn uh and mint on the other chain like infinitely and all that is abstracted away and and and like so so finally what like what agir when you when you zoom out after you know listening and hearing all of it what you realize is agir is something like Solana but each address is a chain instead instead of user address or Solana or whatever chain like say Bitcoin chain each address is a is a chain itself that's a actually that's a really interesting way to think about it because it stays unified and then transactions are portable yeah huh yeah and then don't those addresses those chains can interact with each other that meaning that user interactions on each of those chains can interact with each other and the design space is just too big and we are seeing a lot of like middleware Builders building intent protocols on top of it building so many other things like you know chain abstraction and all that uh and and and and I think like you know I mean you you can discuss with uh with a lot of researchers in the ethereum space or outside and once you discuss about this architecture I don't know whether it's going to be polygon's architecture or somebody else's architecture but for web3 to go mainstream and really scale on the internet and the endgame architecture people will tell you that this is something that it will resemble to whether it's polygons or somebody else builds it hopefully like the next one people who do they have a late M Advantage they build even better designs but it will look something like this like I um so I guess from my last question I when I actually you honor the original thing we talked about which is getting something from the audience so one question I do already have him here is um I'll ask this one and unfortunately we we don't have enough time um how do you think we can get more l2s to collaborate with each other instead of being competitive by coming to these conferences and having meetings I've been having those meetings with all those no basically having some sort of interop ility standards uh if if there are and uh also the business models uh you know also being complimentary like for example a lot of l2s have these uh sequencer fee share uh models right whereas Ager doesn't have that business model right so we can actually integrate with any kind of Stack like op stack orbit stack whatever Stacks are there they can connect with ag because we have nothing we don't do anything with the sequencer fees we want we like AG believes in the sovereignty of those chains so you know I think like it can only be possible otherwise we can have this like you know like wishful dream that l2s will collaborate but there is a competition right there's a zero some game it's a business the only way to do it is that uh there is like uh there is narrative compatibility and uh the uh Revenue compatibility right narrative compatibility is harder but at least like the for the projects who are focusing on long-term fundamental value to be generated like who have seen uh the narrative Cycles once you can see like we focused on uh you know the fundamentals for us if there is a compatibility on the business model on how the their uh Network makes value and generates value versus how aay generates value I think we are finding it much easier to uh collaborate with Layer Two Chains awesome that's all the time we have unfortunately but I want to thank Cindy for an amazing conversation and uh let we're going to make the next one even spicier [Music]