Building the Future: Insights from Crypto Pioneers - TOKEN2049 Singapore 2024

usually I think this is a little bit of an sort of overdone question but in this case because each of you are working on things that are pretty new to the space I'd actually ask for 6090 second introduction to what it is that you are building and perhaps why it's important to you starting with Nick yeah we're building Celestia which is um a modular blockchain Network that focuses specifically on consensus and data availability so you can think of it as a layer one that's designed specifically for uh modular blockchains and rollups so providing a scalable secure secure base layer to launch l2s which you can customize and have dedicated throughput um and we think that's the future of blockchain architecture hey guys I'm Vos um I'm with Iger and we're building a reaking protocol built on ethereum um so the idea is how do we uh expand the scope of the ethereum community by being able to um enable ethereum operators to run validation for additional Services throughout the ecosystem and yeah um push the limits on all the abss actively validated services that are building infrastructure to you know perform different almost decentralized SAS modules across the crypto ecosystem hello everyone my name is Keon Han I'm co-founder of monad monad is is a new high performance parallel evm layer 1 that is building improvements at all layers of the stack both at the execution layer at the database layer and at the consensus layer to deliver really high performance while preserving a high degree of decentralization from reasonable node requirements and um a performing consensus mechanism that can keep hundreds of nodes um in sync participating in consensus um currently um in pre-test net phase and launching main net sometime next year so one thing I'll add as well if there are things that you hear from one of the other panelists that you want to chime in on or rebut feel free to do so as well the the follow-up question to that initial one is why do you think what you're building is important in the sense that what are the problems that you identified in the space right now that drove you to start working on this starting with ke yeah monad is a project that's delivering really high evm performance the reason why I think this is important is because evm is really the dominant standard for smart contract development um over 95% of all capital on chain all tvl um is in evm apps there's a significant Network effect from um so many libraries and apps all built for the evm but at the same time right now um the evm is is just very slow for a number of reasons um which range from the need for a more performant database that offers much more performant State access as well as the fact that the evm right now is single-threaded and there's a huge need for parallel execution and utilization of all the resources in the system um so monad is a project that is really building um rebuilding the shape of ethereum from the ground up and um doing so while preserving a high degree of decentralization and I think this is important because if we're to have crypto spread to um billions of users then we need much higher performance within the layer one um and that's really the core of what monads value prop is yeah um some of the you know inspiration behind why we wanted to build ien L is we observed uh over the course of you know the last few years where projects had their entire security determined in their own token and you ended up with um a lot of examples where you know when you needed security the security the most is when it would potentially fail you because um having your entire Security in a proof of stake system in your own token in moments of vulnerability um token price Falls Community sentiment goes down and as a result you ended up in debt Spirals and so we wanted to create a mechanism by which um these ethereum applications could use ethereum validators and ethereum stake to be able to essentially have back stops for Economic Security and kind of build a more robust uh system that you know encouraged value AC cruel back to the ethereum community rather than you know value being extracted away and fragmenting itself into all these you know sub [Music] communities so the why s is important is that um it all started with this Insight that you could build blockchains in a fundamentally new way where instead of trying to do everything within one single protocol like a monolithic chain you can actually decouple different layers of the stack and most importantly you can decouple execution from consensus and data availability when you do that you solve a bunch of really important problems like uh Big Blocks you can scale your block size um without increasing the node requirements um you can customize you can enable developers to deploy their own blockchains like they would a smart contract giving them ownership of the economics giving them the ability to customize um their execution model and then uh last but not least is like decentralization so using data availability sampling people can run something called a light node meaning that you know similar to the the dream of ethereum with home stakers um with Celestia you can actually run a node and verify the chain directly from your smartphone or whatever kind of device that you have and we think that that's the the level of decentralization that we need if we want to really put the entire world on chain um so those three problems are why I think Celestia is important okay so starting with Vias vs why or why not can these three different things exist coexist in the current crypto state do you think that there is space for these different types of solution the monolithic the data availability later the a AVS layer or is it going to be a win or take all and if that's not your stance what do you think it needs to happen to crypto so that there is room for all of these solutions to succeed um I I absolutely believe that this isn't a zero some game I think there are going to be multiple winners um I think you know there's multiple ways of looking at that and the reality is if we want you know the overall um you know total addressable Market of crypto to go to 50 100 trillion then we're going to need different solutions to be focused on different things um and you know there is this conversation about monolithic versus modular but you know I think we're all building within the modular ecosystem the ABS uh you know the ABS stack itself is like quite modular like I said we're trying to build decentralized SAS modules and um create a platform by which people can you know expand so with manad uh focused on you know parallelized evm which is you know expanding throughput at the execution layer Celestia focused on data availability we have I da we have multiple da Solutions like that are building focused on that um it's really about the next uh generation of applications that are going to be built on chain which are going to require much higher technical capabilities if we want to actually onboard General users to crypto and I think the most important thing um is I love Gary Tan's quote about this which is like the only thing that matters is building stuff that people want and we need to make a dent in building the you know infrastructure and rails that people can then go about onboarding these users and eventually increasing that total addressable Market which Rising Tides lift all boats and there is going to be multiple winners and you know we believe in like positive some games k yeah I I agree I think that for each team there needs to be significant focus and specialization to deliver something great um within the monad team we are laser focused on improving State access which is the single biggest bottleneck for execution um through this new database which we call Mon DB um more recently with some of the newer project announcements I've been hearing you know XYZ DB or ABC DB so I think there's a lot of new interest in databases now um and that's due to a greater realization of the fact that blockchains inherently are distributed databases with a layer of logic on top of them and we need to actually address that fundamental database issue um but our team has been doing a lot of work there um just more generally I think that I can see that we have the road map of of you know within the cryptospace in general of horizontal scaling um with you know separate uh let's say layer one envir or blockchain environments that are all um adjacent to each other and then we have the the rollup or fractal scaling approach where there's some element of um of commitment of of state from one blockchain to another and it's clear that we have you know some of that connectivity and the the map out there now we need the pieces to individually be as perform as possible and as secure as possible which um I think the projects that you two guys are representing um really contribute to as well uh before we go to Nick would you define state access for the audience real quick sure um so take for example uh a typical transaction like a Unis swap V2 swap um it's a pretty simple amount of computation uh it's a little bit of addition a little bit of um multiplication and division but the more costly part is actually looking up um all of the state variables for that contract before that transaction happens and those State variables live generally on SSD um and the cool thing about ssds is that um they're quite high bandwidth um you can think of it as a bottle with a wide bottleneck but they're high latency relative to memory um so in order to utilize the SSD all of its capabilities like a typical SSD has um over a million um IO operations per second so in order to utilize all that capability you need software that can um efficiently access all of the state variables that all of the transactions that are in that block depend upon in the most efficient way possible thank you Nick um I think that reaking is sort of like its own category compared to let's say like modularity or even like scaling a monolithic chain um I think reaking is sort of like a a tool set for potentially launching new protocols with without having the overhead of needing to issue your own new token which I think is a a a big um you know is an innovation that is going to be helpful for people but I think that ultimately in terms of like actually scaling the throughput of chains which is a separate topic I'm obviously pretty uh convinced that modular going the modular route is the right approach because um you fundamentally can scale uh the L1 more efficiently when you do less so when you don't have to do execution um on the L1 you can increase the throughput um using like just very simple bandwidth optimizations optimizing the me poool and things like that that Celestia's we just released our road map a couple weeks ago and like all the scaling problems are fortunately we don't have to deal with any of the execution layer scaling stuff so our scaling road map is a lot more straightforward and and simple um and then then even if you could scale a monolithic chain uh significantly there's always going to be limits where you're not going to be able to run the entire world's um web 3 needs on a single execution layer because it just um you're going to run into just the limits of um how many transactions a single machine can can process and so when you split things up into you kind of Shard things into separate execution layers you get to benefit from paralyzation and um increases the overall throughput um that way and the only sacrifice is um you don't have Atomic synchronous composability um but that's not really that big of a tradeoff I think for many applications so in practice what does that look like let's say I've built a blazingly fast blockchain but I don't want to have to deal with the data layer how does that connect with you yeah so for example we have a project called Eclipse which is uh they basically took the salon virtual machine which is fast has parallel execution all these things and they turned it into an execution layer so they took out all the consensus part they run a sequencer and users send transactions there they all get processed and eventually all the blocks get batched and posted to Celestia where they get like actual consensus with strong um Economic Security and they get um data availability over those blocks so um Cel you can think of Celestia as just an interface where rollups post publish data and retrieve data um and that data gets uh ordered meaning there's consensus that's enforced and then there's strong data availability guarantees so one thing you touched on there which is a topic I want to speak with each of you on is about tokens uh the tokens are these coordination mechanisms across these protocols and networks you guys are building I'd like to think how each of you or I'd like to know how each of you think about tokens in regards to what you're building and what the meaning that they will have for what you're building is starting with uh keone um yeah I think that the fundamentally a blockchain is um you know like a public good like a um like a park in the middle of the city in some senses where um you know there's limited you know even with all the improvements that monat or other projects are delivering there's still a finite amount of block space and that block space needs to be priced appropriately so um the role of a token in a blockchain is Spam prevention as well as resource um uh management and resource pricing um quite important from the overall perspective of um keeping the the swim Lanes clear so that um important economic activity can is he running a light node right now curious about that sorry what was the last what was the most uh interesting Gadget that you ran a light note on recently um I haven't been doing too much recently but the most interesting things I've run on are Kindle and um Nintendo switch or like play or whatever uh sorry didn't mean interrup no no you're good you're good that was good I don't think anyone's ran one on a watch yet yeah iOS is actually well now there's a browser on a watch so you probably could but anyway Sor to distract the panel no no no by the way he's running a light node which is what he was showing the audience there with the photo yeah do you want wrap up no no I think I'm I'm good yeah for sure um I would say in terms of like what is the value prop of tokens and like what we're thinking about um totally agree with Keon there in terms of the public goods um of blockchains we see it as a way to make credible commitments in a immutable manner so you know platforms that behave in um sort of you know a very structured manner of saying we're going to only take certain percentage from the community based on um some sort of credible commitment that we're going to make uh blockchains are really good for that and tokens are a way of representing that we also um you know the igen token has this inter subjective component to it so we see three types of you know attributable um you know faults in crypto there's objective there's uh subjective and Inter subjective right so there's objective truths which we can all agree upon something like um you know mathematical operations where there's only one definite answer there's subjective which is you know something that often requires like some form of social consensus and like might not even be useful to come to some consensus on and then there's this like Middle Ground of inter subjective consensus which is where you know we through a process of social agreement um say that we're going to accept something and we might need to modify that later so the igen token is uh kind of designed to be uh you know a system by which any of the services or any rollups or projects can essentially use um the igen token to resolve any of the social consensus problems that exist and rather than escalating them to the base layer of ethereum where things get more expensive more complicated um we've created a system by which we can handle those essentially in a uh subset of ethereum security in a lot more efficient manner and uh you can still move at the pace that you need to while um you know resolving some of these issues an example would be like something that we both look at uh in terms of the data withholding problem and we have like different approaches to that right sampling is one of the approaches and we look at it from the social consensus problem which is the same thing like the root cause and um yeah just a different way of looking at it which we've implemented into Igan da that's also similar to a data availability service with slightly different um you know paradigms that underpin and how we've designed them so Celestia has the Tia token which is um you could think of it similar to um you know the token for any other L1 like ethereum or salana for example you use it to stake to secure the network um so if the validators um you know break consensus or they try to withhold data they will be slashed so it provides Economic Security um it's also the gas token so when you want to post data to Celestia or otherwise use the network you have to pay in the Tia token and um we're also seeing the ecosystem using the Tia token um for uh pricing nfts or for uh as a gas token for the rollups built on top of it so it's sort of like this um ecosystem wide uh uh sort of like money um and and utility security token so historically we've seen that the strongest communities in crypto have come from places where there were strong wealth effects generated in the participants of those networks or protocols so Bitcoin is a perfect example or ethereum or there was the Ico but over time there's been a large shift due to the amount of capital required to get these things off the ground due to regulatory nature of the world and all of these different things which are essentially your your tokens already live Nick but these two are not yet fully out in the wild but they will all have very high ftvs like these fully diluted valuations and I'm curious how you guys think about the growth of the community or the ecosystem where the wealth effects of the community members may be dampened from that perspective of not being able to necessarily participate at an earlier point in time vs if you'd like to start yeah absolutely um you know we have this reaking component which is where ethereum stakers deposit their um ethereum in igen layer and they can essentially earn extra yield for participate participating in additional validation for these services and um you know you touched on there is a lot more capital in the space today but the reality is there's a lot of um it's about rewarding the right user groups it's not necessarily about like um you know the ability to enter into these um Rising markets very early on but rather how do you reward valuable contributing members of your community and avoid you know civil civil attacks where you essentially have mercenary Capital with unreasonable expectation which kind of goes from uh project to project with like a high level of liquidity rotation trying to identify where they can you know maximize their earning potential and you know respect to that approach but the reality is like most of the time if you're getting these unreasonable yield expectations that's not a sustainable emission for any of these projects and so um as we kind of go about you know uh launching our token releasing it to the public it's really how do we make sure that the honest minority and the actual valuable contributors of a community that are builders that are um you know your community members that are evangelizing your products for you these are the people that are being rewarded effectively and they are able to you know essentially acrew an amount of wealth that grows based on their valuable contributions Nick um yeah I think a lot of people you know there's like the chart that misari has put out in the past about like the amount of public distribution or uh sort of like public sales has like dropped over time and it's specifically basically after the 2017 18 like Ico boom that's where everything dropped and the reason is because of Regulation like you just there's actually no feasible way to do a compliant like public sale of of a token these days and so what that mean but then if you're launching an L1 like you pointed out you have to raise a lot of money it's a lot of uh takes the high Capital expense to launch a new network um and so you end up having to like raise from uh venture capital F funds and things like that and so it's just kind of like a unfortunate reality of the regulatory structure um and hopefully maybe that will like change at some point maybe we'll get more clarity or something because I do think that frankly icos are just like having the like early public participation is actually so much healthier for the network on so many levels um so I do have a bit of like Ico Envy um now the cool thing is that we also have sort of developed in response to that um different public distribution mechanisms like airdrops and I think that airdrops are if if used correctly can be uh you know extremely beneficial as like a community sort of um um acquisition tool and so that's something that we think about a lot is like what are what are the other avenues to like get um you know get get the distribution out there yeah I think that um at the end of the day the thing that is really special about crypto is the strength of the community overall um that's the single biggest reason why I believe that crypto will prevail is that we just have so many people that are so passionate about the values of crypto decentralization self- sovereignty um censorship resistance and having fun and those can all coexist and um people can um you know embrace all of them and you know pretty much every day like log into crypto Twitter and think about crypto for um you know several hours a day it's just so immersive and I think that the power of community will ultimately carry crypto forward and um help decentralize Tech spread to the rest of the world so I you know I think with respect to um new token launches just in general um I think it's important that any project really value their Community very highly and um prioritize finding ways to um uh to ultimately reflect the power of the community and the transformative nature of community and crypto if you don't mind me just like hopping on top of that um I love the manad community I think like you guys do one of the best jobs at like engaging with you know the people that are actually contributing um but you touched on like crypto Twitter you touched on like the crypto community and there's a lot of values that like do matter but to some extent like the percentage of us today is like very small in fraction to what it could be in the future yeah where do you think or like what sort of strategies are you guys thinking about in terms of how we take this to you know we're all talking about how do we onboard the next generation of onchain users where do you like how do you think about how do we take some of these values and expand them and you know evangelize them to the general population and start bringing some of them on board yeah I think it's it's kind of a two-pronged approach in my mind maybe even more than that but um you know one prong is it's all about ultimately the applications and um the user acquisition flywheels that the best applications can develop the ways that they um gain mind share in the the broader space I think poly Market is a great example where literally like you know as we go into this election every single news Outlet is constantly quoting like oh the odd you know Trump's odds or Harris's odds improved on poly Market that's just incredible incredible marketing and incredible user acquisition for that specific project but then just more generally for crypto um so I think that's one prong and then I think the other one is just related to um you know like the kind of like common sense of uh Grassroots like people telling their friends um within the monad community we've had a ton of um seen a ton of success from uh individual Regional communities growing from people just like inviting their friends to come hang out and meet their friends that they met online through Regional communities within the moned community cool the were you do a follow up okay the next the next one is perhaps more for the audience I know there's probably a lot of Builders here Founders folks that are working crypto or Desiring to work in crypto each of you work with many different teams because at the end of the day the value of your networks and protocol depend on how many people come and build interesting things I'd love for you each to share what you look for when you find a team that you feel compelled to get behind and support them and think that there's something that's good to be built on your network or around your protocol starting with Nick that's a um a really good question I mean I think that um frankly like a a a single ecosystem can be made by just one single application that gets built on top of it like with salana I think really the breakout use case has been pump. fun you know um with ethereum it kind of came down to Unis swap maybe some of the other like big defi players like compound or a or something um so I think there's um it's hard to know in advance like wh which one of these teams or applications is going to be the thing that um is the breakout use case um but I think that it's it's pretty consistent that like um the they need to kind of be uh sort of like well-rounded like they need to be real Founders like the interesting thing is when you're building an L1 ecosystem like you need to attract other teams that need to take a risk on you so like they have to be willing to be a startup on top of a startup basically um but so you have to look for all the the the same qualities you would in um you know any founding team uh like as if you were a venture investor or something like that but like they need to be technical they need to have like an eye towards community and be sort of Crypt native and understand how to like communicate and Market themselves and brand themselves um and then there needs to be some like core idea that's really valuable um specifically within Celestia we're really excited about um Cipher Punk style applications too because we think that we're finally entering a stage where the infrastructure is mature enough to enable some of the original use cases that people uh wanted to do on on crypto rails like things like payments so um working with teams who have a really exciting vision for private stable coin payments or um just yesterday there was a team that announced they're building this truly end to-end encrypted messaging app on Celestia um and it's it's things like this that like get us excited like when there's a there's something net new because I think that's also like yeah we could C we could copy all the def5 protocols or nft stuff which you know there are are teams building those things but like what is the new thing that you can only do on Celestia for example and that's a harder harder thing to figure out and one little add-on before we go to the next how do these teams get your guys attention how can they get you to see what they're building that's a great question I think a lot of the time um you know through we end up like interacting with them on on Twitter or somehow getting in touch with them through um our like broader Network I would say um sometimes it's like obvious because they're already building a rollup or something that's very relevant to Celestia but um I don't I don't know we don't have like a Google form or like a uh I don't really have a good answer we're just like we're always like on on the lookout and always like having our ears uh open um and I think we're very approachable and accessible yeah so any Founders or potential Founders be very active on Twitter it matters a lot BS go next yeah I totally agree with uh what Nick said in terms of to some extent like thinking about it from a venture capital mindset of like you don't necessarily know if a team is going to have um what they see as product Market Fit versus like what I would describe is like proof of product Market fit right um you start out building something and the reality is sometimes your customers really need something else and so it's really this like multifaceted approach of like initially um you know igen layer were focused on like converting Cloud to crypto right so we're building this like Cloud type infrastructure but for web 3 and so a lot of the early teams were other infrastructure projects that were deploying on top of us and then step two was going Downstream to all of these infrastructure projects and now we're looking at the daps and you know the projects that are being built on top of them like Nick said you know startups on top startups right um so it's really about openness uh like DMS are always open accessibility and then you start thinking about like one thing Keon touched on is like this fun element like I think fun always sells people want to engage with things that are like exciting that are fun and like that's the reality of like most consumer applications today because there's some sort of like engaging component to it and so you start um you know going Downstream to the next layer and I think at the end of the day like if we can um have you know a few winners in an ecosystem that can make her break the entire ecosystem and so um there's this dominant narrative recently about like this overabundance of infrastructure and in my opinion most of the infrastructure will get abstracted away and like and consumers should not be interacting with it it should just be behind the scenes similar to how when you're using a web 2 application today you don't realize that it's running on AWS or you know you're sign in with Google is just done through ooth but like nobody thinks about ooth nobody thinks about um stripe as your payment processor it just works it just happens and it gets abstracted away for the user and so it's really about how do we take all this stuff abstracted away and like make it as easy and as engaging as possible for end users and then working backwards from that you know you build the infrastructure that can support those use cases yeah for for me I think it comes down to some of the kind of classic startup um advice um which are really around iterating fast um getting feedback failing fast um and and and really just trying to get the product in the hands of users and figure out what things users actually really want um the other thing that really comes to mind is just the you know the terrible about the man who traded from um or maybe it was a woman but the person who traded from a paperclip to a house just by making successive good trades um I think that startups are just about like leveraging the strengths that you have and then leveraging that into a new Strength that you maybe don't did not have before um so I think in the context of early stage crypto startups that's that's just related to um you know buil shipping the product quickly and getting quick feedback and then utilizing that to get more momentum to then help grow the team help raise funds help create more momentum um and the whole time building toward this a singular Vision that um involves building an app that can cross the CM to mainstream adoption yeah two two things actually I want to add um one is that I think um you can really do yourself a disservice if you try to if you over index on attracting teams to build on your protocol via grants or something like if you if people are being paid to use your product then you're not actually getting real feedback and you're not actually uh being able to observe whether or not your product has product Market fit like it's it's all like fabricated and it kind of clouds your ability to to evaluate that the second thing is in terms of teams that like something that I look for is like are they actually passionate and like committed to crypto for the long term because I think there's a lot of people who like some of the teams we've been working with with have been working on their project for over two years we've been working side by side with them for two plus years and you need to have that level of commitment sometimes to ship a product in crypto and if you if you're not ready for that level of a journey then you know don't waste your time and also don't waste our time absolutely I would also add that like if you're a Founder if you're you know a builder in the early stages and even as you get more mature you should be on some of these um Outreach BD calls like very early on because I think David Fel had a really good tweet about this the other day where it's like these are product feedback sessions and so like the more time that you're spending with your customers your iteration cycle improves your feedback improves and now all of a sudden you are like improving at a much like the Innovation rate just dramatically increases whereas like if you start distancing yourself away from that which you know at some point scale Focus Theory you might have to you need to have really strong people that are engaging with again what is your like building Community right like your Builders are equally if not more important uh role in your community so two two sort of quick fire questions here before we close out the first one was given infinite time and resources what is the second most interesting problem you would be solving outside of what you're currently working on starting with Kon does it have to be in crypto or can it be anything it could be anything ideally crypto but if it's something else happy to hear it I think interesting um um yeah yeah for me it'd be climate change okay I think it's really important really um bit of a tragedy to the commons kind of situation yeah I would say um this is like an abstract answer but like I think we could I I would be focused still on some sort of coordination mechanism I think like the better we can coordinate as a society like the faster we're going to be able to tackle some of these like more larger issues at hand and so like if we can come up with with a more effective you know human coordination problem like coordination systems then some of the coordination problems that are required will just like be able to be resolved much faster I think one one thing that could be interesting to work on is just Health generally like um I think there's a lot of very simple quick fixes that could we could improve the our food system we could improve the way that sort of the healthcare system is designed that could lead to like significantly better health outcomes for everyone as as well as just like less money wasted down this like I don't know sort of the the wasted down like spending on all this like expensive Healthcare stuff so okay I think we actually have time for two more so the follow-up one is what is the project outside of obviously what you are building that you find most interesting or that you spend time thinking about starting with vs oo that's a good question um yeah we're we're very bullish on a lot of the teams right now in the AI space I think decentralized AI makes a lot of sense um especially as we go faster any specific team um we spent a lot of time with like sentient ritual um you know a few of those teams uh I I I love the bagel Network guys um yeah all of the above I would just say like more so from the problem of how do we start thinking about as we get closer and closer to AGI and um you know malicious actors start contributing negative data to these models coming up with the Rogue agents um how do you create systems that can essentially like identify verifiably who was contributing some of those negative behaviors and slash them or like come up with like negative repercussions for those behaviors so I think that's like something that's tough um I'd really like to see uh Global FX move on chain um because it's it's a massive massive Market with a lot of middlemen that um just capture significant spreads and um yeah so just any any team that's working in the global FX space moving stable coins all on chain Nick um I think I spend the most time thinking about um chain abstraction and within that maybe like intense so chain abstraction is about trying to um abstract away all the complexities of all these different blockchains whether modular or monolith to the user so that they have this unified very seamless experience when they're on boarding or using crypto um and there's just a lot of exciting um stuff going on in that space okay with 20 seconds what is one habit or practice that has significally improved each of your lives and that make you be better Founders making sure to just exercise every day um I'd say meditation like breathing like work on your breath work on breath work control your your mind ke uh proactive communication and sending really fast slack messages to teammates okay thank you everyone appreciate you for listening thank you to the speakers