The Present and Future of Blockchain Interoperability - TOKEN2049 Singapore 2022

good evening guys I'll just jump straight into the presentation but because I'm guessing a lot of you just figuring out which party to get to and which you know private event to get to so I'm just going to be very quick uh I'm Ram I'm the co-founder and CEO of router protocol uh and I'm going to talk about the present and future of blockchain interoperability or in other words how do cross chain Bridges work so in my very short presentation I'm going to talk about how blockchains are an interconnected ecosystem and how the current iterations are all very rudimentary and then we'll talk about the architecture of the current Bridges some shortcomings and we'll talk about how the whole bridging landscape is going to change in a few years right and uh to understand I'm going to sell router of course talk about router where we came from where we're going to Etc all right sorry not working ah all right so you know I think uh just to set the context uh you know blockchains are fundamentally like cities right you have New York and London and you have all these beautiful cities and ethereum was the this is a primary city it's a very exciting City very attractive City but a lot of people go there so it's congested right so now if you have a situation where other folks try to build other cities other elements and then you have other l2s coming up like arbitrum and optimism and uh polygon which are sort of complementary to ethereum right so what you have now is a fragmented ecosystem right and uh when you have all these series you have all their distinct communities distinct Vibes and you want to have the ability to sort of go between these cities right so that's where you know interoperability is important that's why Christian bridges are important right sorry this clicker is a bit yeah there you go so um given the uh need for communication between these various cities there is a big need for cross blockchain infrastructure right and that's how bridges came in as a solution and that's why they've been all the rage for the last couple of years right so quick show of hands how many of you have actually used a bridge very quickly one two three four not bad five people have used a bridge okay now the issue with the current titration of bridges right I mean there's a bunch of I mean I don't you don't need me to tell you there is a bridge hack every week uh close to a billion dollars have been lost in cross blockchain exploits right and and uh there is a lot of that is because there's been a lot of focus and aggregating and vanity metric called tvl right a lot of bridging protocols aggregate tvl on their bridges for no rhyme and reason and I'll come to why there's no reason the other key feature with current Bridges uh they are not completely decentralized they are a spectrum between centralization and decentralization but they're not completely decentralized right and uh there have been a few design trade-offs in the current I traditional Bridges right I mean the first one is of course capital inefficiency I mean you look at uh no Stargate or any of these guys they'll have two billion in tvl 3 billion in tvl right and and you look at the volume of transactions each day it's going to be 20 mil 30 mil I mean show of hands and early on the five people who you've actually used a bridge in a room of uh no I don't know 50 guys 20 guys right so the there's also an Institutional use case but from a retail perspective it's still a growing field right so capital inefficiency is a key feature currently um the way these chains are designed right I mean there's a lot of code redundancy uh there is no scope for application specific bridging logic so there's no middleware at all every bridge is its own way of solving these things um sick and the security throughput trade-offs right I mean you have optimistic bridges that take a week to clear you have POA bridges that have a very limited validator set because you can't scale the number of validators because that increases time that increases cost right and then you could have an oracle based bridge but then that introduces a third party dependency which could get corrupted right so you have those trade-offs and then I guess the most important thing is is you know we're still living in The Hangover of the early days of defy right I mean it's still very easy for a bridge to launch and launch a token start a Degen mining program and build a lot of TBL and what happens you know after a while the Degen starts selling those tokens and then the protocol uh value just goes down all the tvl vanishes right so these are some of the structural constraints or realities of bridges as they are today right I mean there's an interesting statistic right we compared utility across Texas versus utility across Bridges right and as you can see the big bar there is uni swap right I mean it's got an efficiency of close to 200 percent meaning for every dollar locked up as tvl and uni swap uh there is two dollars of Trades happening now you compare that to the bridges on the left side you have less than five percent efficiency right that means that for every hundred dollars of TBL you have less than five dollars of bridging volume right so you know clearly the first version of uh bridging of Texas were very similar to this right so you have sorry uh so the sense that uh you're going to have at some level these bridges are going to get more efficient but as of today this very very inefficient right so that that was the context of the overall Bridge space and I'll tell you a little bit more about router so we've been around for close to two years now right we've been probably after third chain the earliest team working with a bridging space we actually cracked the cross chain asset transfer and asset swap problem in q1 2021 a while ago but we foresaw a lot of the security issues that has led to a lot of these hacks right I mean you name any bridge out there Wormhole layer zero synapse I mean they've all been hacked right and then for various amounts no matter the most recent one and that's you know it pains me to say this but we actually said so internally at least right and then again it sort of goes back to my earlier Point around design country constraints that we've made around and not just us but the whole overall Dev Community has made around the security architecture right so they've been at this for a while we've been we've missed a small round last year we've been funded by coinbase qcp Alameda Shima some of the big names out there um as of today we have two broad product buckets one is Voyager and the other is the crosstalk library right what's Voyager why there is our uh think of why there is a cross chain one inch you can go to Voyager and take your assets across chains you could swap across chains right you could swap token a from ethereum to token B and polygon so there are almost 11 chains right now non-avm chains coming on tap we're probably the fastest in terms of cross chain swaps we have our own proprietary Pathfinder meaning it finds the best path across chains uh on top of the warrants algorithm it's completely permissionless and it's been audited by The Usual Suspects it's live since we launched in June three months ago we went live we got 21k plus unique users 80 85k plus cross chain transactions more than half a billion in trading volume and more than 60k collected in fees now another question for you for for the half a billion in trading volume anybody who wants to take a guess what are tvl is on a current basis anybody okay let me let me give you the answer I mean we've got less than 500k in tvl for half a billion in trading volume right so it goes to show you don't need tvl for a bridge to be successful right the other product we have is the crosstalk library it's an extensible cross-chain framework we enable seamless transactions across multiple chains uh the idea is you know you already have a Dap or you are building a dab and you want to sort of expand the power of the dab beyond the chain that you know right and and that's where you can use router to instantly go multi-chain that's the attractiveness of crosstalk uh what do we what are what are our plans for the next few months and years uh router V2 launch is going to be critical uh because as I mentioned earlier uh the security assumptions are still very preliminary for all chains so we go to significant significantly re-architect the security framework of the router chain of the router uh architecture uh we're going to be spending a lot of time connecting non-evm chains you know the algorans the solanas the cosmos uh most importantly we're going to develop an overarching open source developer tooling kit right because Community is everything right so quick summary of what we've covered in the last few minutes you know fragmented blockchain ecosystems hamper efficiency therefore that has led to a number of bridges coming through right um the current version of bridges are very rudimentary it's a bit like the Wright brothers in the first plane all the names that you see today are going to be like the first version of the Wright brothers planes in a couple of years you will see the next batch of bridges that we like the hinden books the zeppelins right and then you'll see in a few years the mature steady state Bridges which will be like the current cross Atlantic uh you know across ocean uh aircraft uh aircrafts right so it'll be far safer far more uh a robust ecosystem and I think we still have some ways to get there and lastly tvl is a completely irrelevant metric so if somebody tells you you know come build on my bridge because I have a billion dollars in tvl they're fooling you um and lastly this is uh some shots from our router offsides we have uh we have a team of 40 plus people spread across Dubai Singapore uh India us and we are hiring we're growing fast these are my ah there you go these are my socials if you are interested hit us up love to talk to you thank you very much