Bringing Web3 Tech to Web2 Enterprises | KBW2023

[Music] all right well firstly thank you to everyone for making time this morning after a very long night of karaoke I know it was very difficult for sandep in particular but yeah I'm thrilled to be joined today by sandep who's one of the founders of polygon and can speak really effectively to the tech and the go to market especially as well as Mike blank who is a very storied veteran of the gaming industry is helping lead the gaming charge and has a very long career from EA so I think to kind of start things off it would be really interesting to talk about how you're thinking about Partnerships at polygon you've had some really really high-profile ones Starbucks comes to mind Reddit comes to mind Doritos in fact comes to mind how are you thinking about Partnerships within Korea yeah so uh as youve you must have like anybody who's following following polygon might have seen that uh you know we have been very uh particular and very you know Relentless about our mission uh to take web3 mainstream and even though like the you know Niche web3 use cases like Defi and nfts and you know let's say some part of gaming they you know polygon keeps to uh keeps performing at the top three top two levels on that also but we have always thought that you know the real mainstream uh like web3 real adoption in web3 is going to come from mainstream and obviously we have uh you know Korea is one of the biggest gaming um you know ecosystems and uh overall also Enterprises uh are very open to uh you know adopting web3 technology here so you know some of the biggest names in Korea like you would see like 60 70% of some of the biggest builders that you keep hearing about they're building in web3 they are building on polygon uh you have like uh you know SK Telecom and Nexon which is one of the biggest gaming companies in the world neoz uh you know probably the the first company who started like 20 years back they started gaming in Korea uh and and so many others like latte group this that like all of the uh you know most of the like large level adoption that you see in uh uh in web3 space uh you know a lot of people are using polyon so we definitely are very interested and uh you know working very closely with this ecosystem U you know Mike uh is has played a very big role in that and Mike you want to elaborate more on that probably thanks CIP I I think the prime one of the main words that comes to mind when I think about Korea is innovation and the The Innovation that occurs in this uh country is remarkable um from a technology standpoint um from a partnership stand point and our aspiration in working with Korean companies is because of that shared love of how we can innovate together uh you know even to build on there's there we've worked with so many different Enterprises here uh as Su mentioned next on Neo is SK Telecom latte group kaca uh you you name it uh we've had an opportunity and we feel grateful to have that opportunity to work with Korean companies and I think we're both the aspiration is to help bring as sandep said main mainstreaming what web 3 can offer and the use cases that are being deployed uh here cover the gamut of how we can evolve gaming to a world that web3 is additive where we think about infrastructure um how how we think about uh I mean I I guess I could go on but literally Korean companies are covering virtually every facet of web3 experience and uh as an infrastructure R provider that we are we are deeply embedded with companies here and globally uh in order to further the aspiration of what web three can offer well let's explore the mechanics of one of these Partnerships a little bit more you know how's it started are they coming to you saying there's this specific problem we want to solve you know help us understand why it's polygon versus everyone else are they saying you know we we want to do something Innovative in in web 3 help us figure out what that is how's it kind of start off uh Mike said that I think that Innovation is in the DNA and they see that this web3 is the next big thing uh you know in the in the in the internet story uh you know after the mobile devices and you know in between like VR has been very big and they see that the web3 is pretty big so many of the uh Brands and uh large institutions they uh you know want to uh have these web3 use cases like uh you know having nfts there loyalty points and all those things like that's one part and then on the other side like Korea is is is you know one of the largest geographies for games and for gaming the the use case is very very you know straightforward very very clear that you know you can have these gaming assets on uh on blockchain and and and you know all that all that stuff so games are very very clear and in fact like we keep seeing such uh you know in Innovative uh kind of work that games are doing here in terms of of like having nfts multiple nfts you can create your avatars with locking multiple nfts you create a new nft and all those things so for gaming it's like already very clear like lot of Korean companies and uh you know they are already far ahead and Enterprises also are very bold in uh using some of these nft things like you know erc20 tokens for you know some of the some of the credit like K-pop like you know we we have like huge number of K-pop uh Brands using uh you know nfts and other forms of erc20 like Mike we were discussing yesterday that you can actually like uh maybe Mike will elaborate more that particular use case so they have these Innovative use cases they come to us they are looking to choose blockchain they already know what they want to do and then you know they see that you know where most of the other people are building and obviously you know polygon and actually I'm curious before we get into that when you're having these discussions who are you talking to right is is it marketing is it an innovation team is is it a product owner is it engineering what's the mechanics of that look like all all of them I mean just to step just to go back to your original question you know how do these companies H how do we discover and or engage with projects that we see that are happening in the ecosystem and I think it comes from all angles there are the there's a distinctness that's happening in Korea though which is there is a very deliberate approach here and in uh the vast majority of companies that we interact with um in this region they they know where they're going either they uh understand that the future of the internet is going to be based in part or in whole on something related to blockchain Tech and therefore they need to build the underlying infrastructure in order to capture audiences in the future as they adopt that's a long play that's a long game play and some of them have been engaging have been building for five six seven years uh before there was anything and so that's the long game and there are an array of other companies that recognize that engaging their audiences um comes in many forms and so when they come to us they say we want to build the next generation of a loyalty service we want to build the next kind of gaming experience we want to have the next uh you name it they know where they're going uh part of what we do at polygon is to help them shape that to engage with them in the in the in the activity of defining what a great user experience would be and we see the the array of of experiences happening globally across Ross virtually every industry across virtually ENT every Enterprise and so the value that we can offer is helping them shape those ideas but ultimately many are coming to us with a a formed concept um and our job is to help them bring that to life and sorry your second your your your followup was what I I think you you pulled it an even more interesting thread so we can we can discard that for for now but I'm actually curious you know when you think about how one of these units sells to their larger conglomerate what do you think is the top level reason that they want to build on crypto right I think for a very long time people got really hung up and hamstring by you know the sort of transactions per second that certain layers of infrastructure had as throughput now I think with a lot of what you guys have built that discussion's gone out the window but you know for for gaming for instance is it about say disintermediating an app store right because in today's day and age mobile games generally monetize through say a premium model in app purchases you have an app store whether it's Google Apple Samsung Etc taking 30% if you're building payment rails on polygon you can disintermediate that so is it sort of an economic reason is it just about building a net new application that wasn't possible before uh you know I know that's for gaming Cindy I'm curious for your take on that Innovation more broadly in other sectors yeah yeah I mean I I would actually say that I mean and that's my feeling maybe Mike is in in in like you know more deeper discussions but what I see in the top management like you asked this very relevant question that what do they really sell to their conglomerate like what are they selling to the top leadership and I think this like the answer that I could come up with uh for myself is basically this whole Innovation DNA like the top leadership even if they don't understand depth of web3 they just know that okay this is the next big thing and we need to experiment that like yesterday uh uh we were uh in a dinner with the you know one of the ogs of gaming industry not only in Korea but like worldwide OG and you know they and he's very clear like that this is the next big thing in gaming and uh you know we need to crack that so they have like I think 300 people team only dedicated on web3 you know gaming and finding these use cases they and this is the interesting part what I'm trying to say here that like the leadership is okay to not know that what exactly or where exactly we are uh you know going into not having a very high or very long-term like this is what we are going to do and all that like thesis based thing but more like okay this is this technology looks like you know this is going to be the next Innovation uh you know center point of the of the of the technology uh you know region and this might push like you know revenues and all that like also things are driven by revenues and uh you know this might push you know Revenue in some of the areas new areas of revenues and all that and that's why they are trying to crack so why I like this model is that in many let's say Western geographies like leadership will spend like 2 three years to you know kind of analyze and think that okay we want to know where exactly it will go how will it make money everything and then they will take some step and then still they have to go through this iterative process whereas here you know leadership is like this makes sense this is picking up a lot of traction let's start doing it let's play iteratively you know do something small then keep it ating on top of that which is the like which is the Innovation DNA I feel that that is there in the Korean companies and that's why you see the electronics we are so many things like you know they are so far ahead of everybody else and this is going to be the same uh situation in web3 also I I'll share one just one by analogy one uh one thought when I was back at Electronic Arts uh I helped create our subscription business and uh externally I think many people felt as though that was a play for EA to try to generate more Revenue because that's why people build subscription businesses um underneath it though however and I think we've told that story when I was back at EA better uh since was it was really about helping people play more games helping people engage more with their friends helping people it was really about community and um what I think what I see from and I maybe this is a build on on S Deep's Point what we see from the vast majority of companies that are inter ING with us who are legitimately engaging in blockchain web three experiences is that their aspiration is the same it's really about driving new forms of Engagement about creating networks of of and community and yes there is a commercial aspect just like a subscription drives Revenue uh blockchain businesses web3 businesses also Drive Revenue um but the goal isn't purely to drive drive economic value it's economic Value Plus this idea of community and engagement and that's when you get the best that's when you get the best out of what we're trying to create here together yeah and I think you're you're bringing up some really interesting points in terms of what it takes to build a network with this varying set of stakeholders I think we've mostly talked about kind of the call it executive layer and the Builder layer but let's think about users for a second too when you look at the needs and desires of an Enterprise they may be really happy and excited by the fact that you can censor certain types of content right take out bad transactions bad images bad text Etc on the flip side there's a set of users who have a really really Crypton native ethos and hate that centralization and that censorship potential how do you think about these trade-offs are there sort of any particular ones that have caused a lot of friction in the wild and you know how do you carry that forward in in building a network yeah so for the users like okay your question is like more from the polygon side of things or uh basically yeah so I mean at polygon like we always uh you know think like this has to this is not like a zero or one thing like users are right now in web 2 and you know you give them a step change and they go to like I'm talking about mainstream users like you give them a step change and they go to the web three part like it's not going to happen for large amount of users they need this gradual process or gradual flow of uh you know user experiences from web 2 to web 3 and that's why like for example on meta transactions like you know you know we we adopted meta transactions like uh you know one of the first ones in adopting that and Sandy for those unfamiliar in the audience can you share what meta transactions meta transaction is basically as a user you simply do uh you simply provide your signature you know using the wallet whatever wallet you are using and uh you know the you don't add the gas fees on that like there is a gas relayer which adds the gas fees similarly now with polygon cdk which is our stack to launch like ZK uh you know blockchains or app chains we are going to enable features and already many partners are working on working on them uh you know with these zero gas fees transactions like we you don't even need to add because these are single sequencer let's say uh ZK rollups and there you can actually just do your web3 dos attack protection and you know you take the transactions which are coming from The Trusted sources and things like that so that will also enable like large number of transactions on these uh on these networks and similarly like uh you know your uh web3 o kind of uh you know use cases where you sign up with your email you sign up with your phone all these kind of you know uh tooling is very heavily available on polygon that is also one of the reasons so many uh Builders keep building on polygon like you see because they find everything you know in one place and then they from there they can start launching their user experiences uh which feel similar to web3 and I am a big proponent of you know in these user experiences you always have like advanced settings like if you uh have gone through reddits experience for example which is like very uh you know super easy experience for the users and it's it's a non-custodial wallet but you can actually go into the advanced settings move it out into your own self- custody wallet and all those features are there so that's that's how I see it like provide users the similar kind of web2 experience but for the more Savvy users give them an advanced setting kind of op where they can do full cust yeah and maybe I can help kind of refine on on the question because I I think that in the case of say Reddit where it's it's digital Collectibles there's less of kind of a Content moderation issue I think right the the content in in question would have been on Reddit itself which is centralized they have you know sort of community standards and and controls in place but if we're talking about say a game built on polygon ugc user generated content is typically a huge part of Gaming if certain pieces of that content are actually stored on chain it could be very difficult to censor and remove them and you may reach a tension where you have a studio that wants to have you know rightfully so some level of control over the content that shows in the game but then you may have users say well if you can take content out and you can remove data from the chain it's not truly decentralized how do you think about that tension Mike I'll off I'll offer a thought here yep sure I mean I think our foundational values at polygon are those of web 3 which are openness privacy transparency I mean those are the things those that's the way in which we live and we build technology to to support those values But ultimately the end user of that not the end user consumer user but the end user being the project building on technology um ultimately they make decisions as to how they want to utilize this Tech and I think as Su deep said there's an there's an evolution that occurs here when you're talking about a a a monster con cerate uh who's entering into this space uh move away from an enti from their current business model and way of working uh is uh is is um creates anxiety and I think that there's this Evolution towards this new model which will happen and and and our job is to try to enable it so the reddits of the world uh the Nexon of the world the Starbucks of the world um they're all at a different place and and then you go all the way through the native web three Builders they're all at a different place in that Evolution and I think if we stay true as an as an industry as a company to the to the values we can help them understand why this idea of openness and privacy and transparency are good for end users and ultimately end users will decide where they want to spend their time and that's I mean that's also part of the ethos of web 3 so um we're all we're all in this evolutionary phase and at different points in that cycle yeah I mean that's that's a really healthy view to have as an infrastructure provider right is it's ultimately about what value can be delivered to end users and these Partnerships are partnering with you because they believe that they see that through line so to to oh go ahead Sandy yeah yeah I mean also I wanted to add that you know as as infrastructure Builders like as Mike said that we have like when while building infrastructure we want you know we follow like full web3 ethos and you know uh values but the infrastructure is built in a way where as a app builder you can take your own calls like you know we don't we don't enforce that oh if you are doing this only then you should build on polygon and things like that like it's very open and developers build their own uh you know Destiny as per their own constraints environmental constraints what stage they are and all that and uh you know in such scenarios one other part I feel is that that that as of now it feels like the the major use case of crypto still like uh you know you can foresee that this is on the financial side of things like where you are storing value we are creating this new internet we call it like internet or web 3.0 uh this is basically primarily about value and all of the other things that you said that you know user generated content and all that like which even if it's moderated is fine but as far as it is you know it is approved content on a platform and that value is codified on this like you know sensorship resistant platform and users own their assets because these become valuable assets very fast and users own them fully I think that's that's you know stage one game one for for web 3 and that's what uh you know we we we we value more well speaking of stage one I think you guys have some pretty exciting developments coming up with the new polygon 2.0 uh obviously one thing that's been really prominent in the news is the renaming of the token to poll I think that there have been some really interesting criticisms out there that one major reason to change a token's name is to sort of rejigger and and eliminate the prior price history I think we've we've seen some other projects and in Defi and crypto broadly do this I'm sure there's a lot more to it than that what are Skeptics missing when they think about it that way see like when we rebranded from Matic Network to polygon like in 2021 and and and that time only we had said that this guys this will be you know put in effect and uh this basically is a long process even now like we have been planning this process for one year and it's going to take one year this is a massive exercise because you know Matic is a very distributed uh you know token which is used by so many applications used in D and and so many other places so uh you know like all these things like you know this this history and all that this is all crypto Trader uh world and you know they can they can keep doing that stuff uh but like you know we as a technology platform we are building for next you know decades to come and we cannot have these like you know trading related uh uh you know Shenanigans affect our Technical and long-term decisions so you know like this is nothing related to that and this is more related to where we want to go with because the pole token as you said polygon 2.0 like Matic Matic network was a single Network plasma chain you know when it started as now like polygon has already you can see that polygon is a multi-chain environment now multiple app chains plus we have two main chains like which is polygon POS which is you know right now is a side chain but in you know converting into a validium fully ethereum secured then you have zkm which is the world's like you know first and most mature and advanced uh you know ZK uh rollup which secures like which is fully secured by ethereum and then multiple other chains app chains as I'm saying so this is a multi-chain environment and now pole token has to you know secure not only a lot of these app chains but also this interoperability layer you know between these chains so this mechanics and this upgrade is basically focused on that that how do we how does the pole token which is like the upgraded version of Matic is not a new token uh can service this multi-chain interoperable environment and that's pretty much is polygon 2.0 uh where you know we talk about this multi-chain environment it should have like the way we have built like we recently launched polygon cdk where anybody can launch their own ZK chains ZK like ethereum secured ZK rollups or validium but then uh and then effectively providing infinite scalability like you know if you need 100 chains you know apps 100 apps can can build their own chains you can have thousand chains even a million chains this architecture still scales and that's why it has got a lot of critical EA a claim also that you know many people like good high level researchers which I respect have said that you know this looks like kind of the end gamish kind of architecture whether it's polygon or somebody else but whatever protocol you will see will end up becoming this uh you know transaction layer or app layer of web 3 you will see something similar what what we have proposed in polygon 2.

0 and so infinite scalability but you can have hundreds of these chains but the liquidity gets fragmented and as I said that we are building this web 3.0 is essentially internet of value and that value starts getting fragmented what you need is seamless movement of value and interoperability of value across these chains and for that like you know there's this interop platform uh or or or the ZK based interop uh system that we have proposed which allows These Chains to be almost like feel like one single in infinitely growing block space right you could have like this whole network could have million or infinitely growing TPS and uh you know you can add more and more capacity as in men needed which is very similar to how it works in internet today like web 2 yeah and I think that string of thought brings up a really interesting question I think a lot about as a venture capitalists which is when a lot of your Innovation is highly Technical and very thoughtful and really really interesting in terms of the Innovation how do you effective message that to a web2 institution right if you think about kind of the old world non- crypto if you're a security company or a SAS company doing something complicated there's there's often a concept of sort of category creation where you're coining new terminology that helps explain and helps people build a mental model for what you're doing how have you been thinking about that so far with respect to polygon and are there even terms that you've sort of coined and and begun to do that category creation process with yeah I don't I don't I yeah I mean I think what Su deep just described as polygon 2.0 is that foundational story and that is I think that's um understandable uh to the vast majority of projects that we work with this idea of of networks and network effects and any company building an application that desires to attract users and the more users the better and that those users need to interact with other users inside of a multitude of different Networks that uh that that definition that description is what I think is how we talk about this uh and that's not entirely dissimilar from how maybe web 2 companies might think about building networks around the whatever they provide as value to their end user so we we polygon 2.0 is that strategy we talk about it in the terms of networks and network effects uh and the vast majority of of Enterprises that work with us understand the value of connecting to to their users users that live in the wider ecosystem and how to make those users interact with other users um at the very core that's what we're trying to help accomplish in a much more open transparent private all those web through ethos bits that um that create a new a new form of Engagement a new form of value that is additive to their existing businesses yeah yeah I mean first of all like I want to say that uh your question is how do we do this for Enterprises the first answer is like for Enterprises it's much easier because they are much more thoughtful and not driven by narratives they see what is working and you know they do their deep analysis whereas like the problem with this narrative is in the web three you know developers and web three audiences because they are all driven by narratives like this is so painful to me like when uh like you know many of the the you know like I don't want to name but many of the uh uh you know protocols and all that they will see like very minimal activity happening over there one or two things happen here and there and they are able to meme it well they are able to make the narrative around it and then everybody's like oh this is but and whereas like polygon like we do we like announce those kind of things like 100 in a month right not like one 100 so you know this this narrative and all that stuff like with web two and Enterprises and large companies is much better where there are thoughtful you know strategic uh thought process uh compared to uh let's say web 3 audiences and Builders so that is one part uh and and that's why like you know it's more painful because again like Enterprises like I I see this this whole you know web3 adoption space as four main categories like one is defi then you have nfts like you know Niche nfts pfp and art and stuff and you have uh then gaming and then these Brands right and of course like there are other sections like app chains and all that but if you see like on Def five we still continue to be the top three player and uh nfts like we recently became ranked two after ethereum only and Brands there is absolutely nobody who can compare like you know what kind of adoption polygon has seen and gaming like it's it's like not even a question it's like orders of magnitude bigger than that so the other two sections like you know gaming and Enterprises we don't face that much of problem with narrative but on the web to like you know on this uh uh uh you know Def and n FTS where the builders are also driven by narratives instead of the real facts that's where like you know it's slightly more more harder and I I'm not sure like we have done till now a very good job off late recently to have that narrative around and we should be doing more work on that well cool that that was a really fun you know look under the hood in terms of polygon goto Market you guys have had incredible success so let's close out on one final question because I think we're running out of time here there's obviously lots of discussion about crypto gaming what genre of crypto gaming do you think will be the first to have a game that gets to a 100 million monthly active users a game that is fun to play and I think when it comes down to it all what users are looking for are things that add value to their life and that they want to spend time in and spend time with others and have social connections uh that's what will lead and so it's not a question of is it a crypto game or is it a mainstream web 2 game or is it kind of hybridized web 2.5 game or whatever word we want to put on it I think it's a game that a game company builds because they think about the end user and the value that it offers to them that's what will end up driving it and I think we're going to start I think Korea actually might be the place where we see some of the first examples of multi hundred million you know registered user massive ma da games because they're thinking about it in that way cool right now I'm thinking of some apps with 1 million daily active users not 100 million daily active users if that happens like you know web3 has made it like you know we will think up about web3 being making it all right well thank you s deep thanks Mike thanks everyone thanks everyone thanks [Applause] [Music] everybody