Polkadot Deep Dive: The Blockspace Ecosystem for Boundless Innovation | KBW2023

all right how's it going everyone enjoying the party yeah okay so today is a historical panel you know first my first time being a moderator on stage but as someone who's been a Discord and Reddit mod for years probably I'm qualified and it's also historical because the first time ever in crypto history probably a CTO moderating for a CEO and today I'm honored to have my guest Bjorn Wagner CEO of par how's it going man it's my honor thanks you you're ready I'm ready let's go all right all right then so first question it's a softball um you know tell us more about yourself and in your opinion what's the problem in the internet that the pokedon that you're trying to solve oh very easy one I know um okay a little bit about myself um beond ragner that's my name I was born and raised in Germany um I've been um in the crypto space like I'm actually spending fulltime my time since around like 2015 145 um back then I was doing academic research for a large uh industrial Enterprise in in in Germany um around multi-agent system so Industrial Automation across company bound boundaries often called industry 4.0 or so forth and I was um um I was encountering uh certain trust problems right like let's say you have like in BMW um machine that's meant to um adjust its production um operations to some information or signal that's coming from another company right like they wouldn't just easily do that and they couldn't agree on like who would operate this infrastructure to make these decision what happens next and so um that triggered you know triggered me oh oh I've come across um that problem in a different scenario which was Bitcoin right around the transfer of money um but it's somewhat different right and so um I started looking into if there's you know something in that world that could help me solve that problem that's how I counted in very very early days ethereum and that led me down that rabbit hole the consensus issue and you know we got the programmable you know blockchain going on exactly that's that's the thing how you got into blockchain basically and then yeah exactly and then I was like much more fascinated by the implications of if uh of such an infrastructure actually working and um I went down the rabbit hole um came across Gavin woodbeck then which was obviously one of the key people behind ethereum and uh at the time when the ethereum network launched I partnered up with him to start a private company called parity Technologies we worked on ethereum with kind of like the core development team behind the ethereum network back then and then fast forward uh um essentially I became a co-founder in the company and uh took over as CEO um a bit more recently a year one and a half years ago and uh um yeah since 2017 we've been focusing full-time on uh a technology stack called poka do can tell tell us more about like so what's the problem that polka do is trying to address the grand scheme of things or the philosophy behind it uh why people should care about it okay so um I'm going to go a little bit broader than blockchain here right we we came in the the the reason we cared so much and we've been doing this for such a long time right and kind of like all so some of the core pillars that um ethereum's Inception is built up on is this idea of web three right so why web what is that what do we even mean by that well we look at the internet at something that is so fundamentally important for um not for both Society Democratic societies to work as well as our daily lives nowadays right um essentially I think it's a main means for us a main tool that allows us to um find information share information with the world communicate with each other and really do a lot of our daily things right ordering coffee or like getting a bank account and so forth right but what and the internet was back then meant to be a very um equal playing Ground right a truly Global public good in a sense right but um due to I would say particularly economies of scale and like Network effects it's become increasingly monopolized by a few corporations that are largely us-based um I you look America you know yeah amazing country so you look at Cloud for example AWS right Google Microsoft is the main Cloud providers right um which um I I think control large parts of the internet due to that right on one hand um and that leads to certain I think uh problematic situations for us right be it if you're an app developer right like or you build a public um digital product or service right you may be de platformed at any time if you don't fit in the business model of that conglomeration I think it's stifled Innovation right because there's so much rent extracted and that's being used to essentially snack up anyone that could be Innovative and bring something better to the F to to the world right um so that's on one hand and then obviously you have the Facebooks of the world right which are very much under one regulatory regime which make it not quite Global in my opinion yeah absolutely and so yeah the the monopolization of the internet the information that's just uh it's it's not it's ciples Innovation and I would say in the blockchain space it also happening too right where we at first we had a couple of great blockchains and blockchain Technology was introduced to solv it and now blockchains are starting to monopolize there are some monopolizing blockchains so polka dot is here to enable consensus interoperability between these powerhouses right so yeah yeah there's there's there's a lot of um from an ethos perspective a lot of truth to it right when we set out to build po cutart right like one of the core IDE was from all our learnings around building ethereum back then was that one size doesn't fit at all like this monolithic smart contract approach isn't just going to make it in the long term yeah yeah so we have to accept diversity in order to really you know push Innovation and you know we'll definitely put the interoperability aspect and come back to that again so next question I want to raise is so after reading uh Rob's block Rob is one of the founders of fa and you know one of the key players of polka dot uh hey mentioned block space block space and uh now thinking blockchains instead of being a cloud storage a a cloud function or even a ledger or state machine thinking it in terms of block space really op my eyes and can you elaborate more on this and how po how is it relevant to polka do not only polka but the entire web three space uh to the audience okay um so the way I would explain block space so block space is in my in my view essentially the core product offering that any blockchain provides to the world right but this block space right and block space you could probably a definition might be um um a block space allows you to um execute commit and finalize operations in a block right that's block space now um but it's it's I think it's important to um acknowledge that not block space is created equal right uh block space may vary greatly in terms of quality and quantity so when I look at quality it's a little bit like um I look at security how secure um um how secure is that block space how with what how much Economic Security is the Integrity of those operations um um maintained um and second flexibility right what can I do with that block space what kind of operations and how efficiently can I conduct these operations and then you have the quantity side which is really how much of it is available at any given time right of that quality and so um I would say that's kind of what I would say block space is and now if we look at maybe that allows me to explain poad do a little bit more right beyond the interoperability aspect right poka do in a sense the raw product it provides right is uh um a Marketplace for highly secure flexible composable efficient and cost effective block space right so what this is this is but this is still a relatively raw product now what happens you have like all these projects that um utilize certain sdks that you can use with poka dot to refine that raw block space into fit for purpose block space right so they they take that block space and essentially build a chain that converts that block space into something that's highly specialized for whatever it's meant to do be it a def operation um or a gaming chain and so forth right and then um but that's not word stops that's already I think quite interesting in advanc because it it solves essentially the uh how much the the um the availability problem like how much of that block space is available the scalability problem securely but beyond that um because polka do features this um very state-ofthe-art um interoperability stack right that uses the shared security umbrella of uh of padot and therefore make sure that any communication between these different refined block space environments can communicate with each other and thereby is composable that makes it really interesting because suddenly you get an environment where you can have app developers you using features by these highly specialized chains and compose them in a in a very um compelling experience and I think when I look at polka do for me poka do is all of that all of that together makes it I think a a a the most viable integrated block space ecosystem absolutely and this really puts into perspective because if you look at all the blockchains uh that we that everyone uses ethereum or even defi Pro protocols essentially they're just change uh after understanding block space essentially they're just switching numbers like transferring numbers from one account to another uh and we're calling that and people are like raising billions of dollars maybe not now but they're raising billions of dollars just with that it's now block space allows us think okay we can do not just transactions in terms of numbers but so much more games so many so many use cases and and interoperability is really the core of this uh operation right so let's uh you know bring go back to that topic uh can you tell us if we talk about interoperability polka do as a as a layer zero a blockchain of blockchains a lot of people think of you you know Cosmos or maybe other uh layer zero protocols how does polka dot Stand Out compared to those right um first of all I obviously have a huge amount of respect and appreciation for all the other projects out there right like we amazing projects with the many of them Cosmos including right we share a lot of the you know same goals and values right um trying to move web three forward now um Me Maybe maybe talk specifically about Cosmos a little bit like um um how I think POA differentiates itself greatly from from Cosmos so um similarities right both um Cosmos features an SDK that allows you to build blockchains the cosmos SDK poodot also has an SDK right the substrate cumulus now termed more po. SDK that allows you to build blockchains um both have um somewhat of an inter probability step right I think in cosmod it's icmp um um whereas in in interchain message protocol and whereas in poka world that's called XM right it's a language that these different chains can communicate with now that's kind of word answer right in my opinion right um so I think what sets po so apart is that from day one we always thought you eventually want a b highly integrated system throughout all the layers which means for example that in order for getting these great composability guarantees so that if you have one blockchain that you know relies on functionality of another blockchain you do need a shared security umbrella right absolutely because otherwise what's the issue right like um let's say you have chain a uh and chain B and chain a uses functionality of chain B and vice versa or an application Builds on top of both of these chains well the security of the overarching uh interaction is defined by its weakest link and if each of these chains have to provide their own security resources right it's never going to be as secure if they pull oil that security you never know when one chain could be compromised and imagine everyone God forbid have to provide their own validator sets you know just to have that operation exactly and so um that was one of the core um ideas and talents behind poka do from day one and so we architectured everything around that essentially now um I say us all with slight caveat because like now a few years in I think more recently Cosmo has come around and I think recognized that as being very important right like too right getting to a place where you have somewhat of a um shared security lay I think they call it something like replicated security or so forth but you know that's my opinion right but I think trying to Chan that H after building after designing the system is incredibly hard if not impossible right um this is something this is so core you have to consider that from the minute one when you start designing these systems so that's one thing that sets it really apart I think the other two that come to my mind is um poka Do's really Advanced governance system right POA takes governance extremely serious and takes a very explicit onchain governance approach that comes for example with a POA treasury which again helps all these constituents of Po all these chains and applications that to use this treasury to uh circumvent some tragedy of the commons problems right let's say we all need certain infrastructure or um functionality but nobody kind of wants to pay for building it right um they that's what the treasury really is for they come group up go to the treasury the pocket of Treasury uh pull up a vote right like should we build that should we use the treasury's resource to do that and that happens at an incredible Pace like that's something I'm I'm I've been it was an experiment like most things we do in the space right Green Field development but we've seen what like so yeah so many different updates I think recently uh runtime upgrades in general just runtime upgrades where you have that web assembly binary as part of the block and once the blocks uh polka dot syncs to that block that logic becomes the chain logic you to Simply put uh and that's that's so amazing because this is a true da right it's a true da where you don't need that and you don't need a uh Central organizing government or a coordinating body to really have this happen it's all onchain and another thing is uh just to summarize polka dot as po core product would be that you know interoperability share security so security as a service and block block space as a service for any projects who wants to build on top of it and yeah I think uh this is something that everyone really should take home when it comes to understanding polka dot and uh yeah so you know since we have some time uh constraints here I'll just move on to something that's a little bit more more relevant uh when it comes to inoperability and something that everyone might know and love and hate at some points defi so can you tell us a little bit more about uh how defi how the defi ecosystem looks like in polka dot space and how is it different from other other ecosystems yeah a great great question um I think this also allows me to explain a little bit better or more what I mean by flexibility that that PO offers right yeah please so um first of all like you um PO is still in the grand schema skin relatively nent right um I think the ability to um deploy and launch on Pock is only like what two two years old two and a half Max roughly um um but we see some extremely interesting projects uh innovating on pocket right like a couple that come to my mind right are um centrifug right like probably the most most interesting largest most Forward Thinking wield word asset project uh in the blockchain space right um there's a lot of origination asset origination for loans and so forth credit and um um they they buil centry fut chain on pocket out which is I think going to launch relatively soon um and which utilizes some of these uh interop the interoperability stack we are they call it centrifuge connector and thereby tapping through XM the shared language into the liquidity and the user base of any other chain and app building within the Poco do ecosystem so uh just as one example now um another one would be Hydrox right which is the the liquidity cren as they call it um so Hydro GX is like you know maybe in I hope a fair introduction would be um for the uninitiated it's like Unis swap on steroids like hardcore steroids right like it's it takes this idea of um automated market makers right um to an an extent where you end up having something that they call the Omni pool instead of all having all these separate pools right where you have a token pair and you have liquidity lock here or liquidity locked there and this is all compartmentalized and can't really uh benefit from each other the Omni pool puts that all into one pool and that means liquidity providers can provide one-sided liquidity now why is that I mean that super charges liquidity for everyone engaging in that pool for once but second one thing that's super interesting that we've seen pocket out how other project make use of that so you have all these um par chain or app projects right that have their own onchain governance their own treasury token Treasury and um they want to utilize that token treasury so what they do is they have a governance vote fully decentralized that says like let's take some of our token Treasury and provide liquidity into the omnip pool on this different chain via XM fully trusted fully decentralized fully secure right and what does that do two things number one it helps a project bootstrap liquidity around their token and second it allows this treasury to actually generate fees from the trading in Hydrox and so this is another thing that's like I I don't think it's it's a no them right I haven't seen it's absolutely amazing and only on poke. if you really think about it there's another right there's another one one thing I'm getting excited here uh one a couple more things that may be even easier to understand right number one if you think of smart contract platforms right the ones that you're familiar with right be ethereum or any of the other smart contract platforms they use inherently um reactive transaction models what does it mean any the state machine like any operation on the within that blockchain is only kicked off of if a user submits a transaction and pays the fee for it right and that inherently limits what you can do with it I'll give you one example the the the bad bad example of what happened right um back then you may remember I think it was black Thursday or Black Friday around maker maker Dow yeah maker that issue with the the die token exactly were a lot of people had um um um um you know minted Dy by providing certain assets right um and um you you as a liquidity provider there you got to really make sure that um the asset is always worth enough so that your assets are not being liquidated right and um how the protocol finds that out is by getting information fed from a price Oracle now the problem is all transaction within the smart contract environments are seen as equal right it's just the market who pays the most fee what user submits and so you can get to a state where a chain is congested right and what happened around this incident is like a system critical update to the system which is the price Oracle what's the latest price of s ABC couldn't get through because the chain was congested leading to cascading liquidations of all their users right um and this is one example which you can easily build something on pooc and it has been built right where this would never happen because system critical transactions can be prioritized over or the other exactly that's so that's so amazing because a lot of people forget that uh the the layer one blockchains that we're using are Tech technically speaking they're all just single single threaded transactions but in polka dot the way how it works every pair chains the blockchains within polka dot are acting as their own course it's like parallel transactions happening and it's now for the first time ever we're seeing multi-core computation within within the blockchain space right and this is so exciting and uh for yeah so we talked about Hydrox we talked about centrifuge amazing guys it's like uh dydx and osmosis of polka dot and it just to put like a perspective for those who don't know the polka dot D5 space um now we have those projects but what what interests me a lot about the polka dot ecosystem is the corporate adoption as well corporate Partnerships if you look like Central fuge they're enabling real life assets into the blockchain world and we're not really seeing that to this degree and not only that but we also have Kilt uh with their partnership with deit uh of course we have dear Asar as are here with Partnerships in Japan with the Toyota uh you know Japanese Japanese government Japanese cities as well amazing stuff uh and Sonia cannot yeah of course Sonia amazing guys um so can you tell me more like uh why corporations know should really adopt and jump into this bandwagon uh what are some like notable corporate partners that are really using polka that are part of the polot ecosystem without them really knowing that they're even part of the Polk ecosystem yeah [Music] um so a couple of thoughts right like I'm obviously uh you know I'm CEO of par technology which is a leading contributor to poodot right but we aren't all of poodot right like poodot is all these ecosystem agents we have including AA Adventist killed all these others and so we obviously parity does they have fair share to work with with Enterprises right um done it largely I can give you a couple of examples where we've done more recently being um mythical games which is actually based on uh activity on chain activity it's the number one gaming chain in the world that probably it's ridiculous nobody knows of but like they have the largest volume of monthly U um sales of nfts um they just published uh their major NFL Rivals game millions of users right um and they have been so far uh in the past been on a essentially on ethereum on a ethereum network and um they are now migrating over to their own par chain poot native chain where they want to use a lot of these Advanced abilities such as uh no fees for users right like you can build a feess chain which is [ __ ] great from a user experience perspective um um so Mythic against some examples we work with T-Mobile we work with energy web Foundation which is the um essentially largest conglomerate of members from the energy space right nothing to do really with defi right they work with black rock to uh create all these CO2 certificates around Bitcoin and so forth and that all is built on polka do but you may often not know it's polka do because all these projects obviously have their own brand and that's good right such as ASA right ASA Builds on polka do works with Sony and all these others we have aventus right um um with with vone we have like BCG having partner with the larges just recently right like that was announced in June I think um they uh partnered with with the largest steel manufacturer like a huge conglomerate in Germany um um again to do um um um authenticity proofs and CO2 certification around the steel manufacturing process absolutely it's amazing really and polka dot a lot of the brand partnersh that we're looking at there's a lot of Western companies too right a lot of European companies and American companies coming in it's I really do think like polka dot is kind of like the the Louis Vuitton of blockchains where so premium I just I just love it uh how how that looks and of course Asar we're the one who's really act active on the Eastern Market and hopefully I would love to see polka dots you know being more active here and seeing you know maybe maybe some gaming companies because Korea has a lot of game great gaming companies going into web 3 using polka do would be really fantastic so please tell us a little bit more about your thoughts on the Korean market yeah um a couple of things to what you mentioned right with a European aspect you think that we have such extremely strong standing in the particular European market is due to many of the founders and like team have been based in Europe right we we parity is a global company par is a truly Go Global ecosystem and network but again like our strong holds in the past have been um um Europe and China China right in the early um and now we we we we are actively moving more and more into the us as well as into other Asian markets at least parity is trying to do it it it's deer right um but I do think as you can see right like e other ecosystem agents or projects such as ASA are doing a fabulous job right like parody doesn't need to do anything in Japan because like ASA is already the leader there essentially almost thank you um in the sense and I think that's what really makes polka do so strong you have all these ecosystem agents that have a a common goal and work together and and focus on their their core competencies right parties is mostly building core infrastructure and working with uh Forward Thinking institutions for strategic reasons we don't have to do it for Revenue generating reasons right like we predominantly work with those parties where we believe um they uh may make best use of this technology and bring something real to the world right um on your thoughts with Korea right you ask for Korea um I think there are two perspectives that come to my mind number one is like um Korea has huge cultural influence on the world right you look at Street um K-pop um right technology right like telecommunications technology early doers through a lot of doters huge and that's a second point right like you have um a population that is hugely technology forward uh not just from a user based perspective but also from an um Enterprise perspective right probably some of the most Innovative technology Enterprises in the world are here and I think they have a fantastic opportunity to play a major role in this Emerging Markets right yeah absolutely and because every Enterprise has their own you know products and Brands uh that they that they manage having this customizing block customizable blockchain uh using block space for whatever they want instead of just being a being another def product another nft I think that's really a biggest sales point of polka dot right yeah good point to Enterprises right like why as an Enterprise why should I look at Pok well it's a best of both words and I explain you the both words right you may remember in the past every Enterprise looked at like their own um private permission blockchain and I understand why right they needed Safe Haven they need certain controls right be it for Regulatory Compliance reasons or other such but the problem with that where you don't benefit from the um um Network effects right that you really want in Block space blockchains right like they are meant to break you out of your isolated Garden right um and so how do you get both well becomes poka do right because you you if you build on poka do like a par chain a blockchain right you can introduce all these um details and uh controls that you need be it from a governance perspective or um um certain information flow perspective while playing within that larger ecosystem right while being connected to the user base and liquidity and functionality all the other constituents and last but not least it also allows you to um if you decide to build on it or become part of it to essentially have a say in the future direction of the overall pokka do Network because of explicit onchain governance so you never end up in the situation of like you build on Twitter and then you're being deplatformed you have a say govern yeah um the aing governance allows corporations to have control uh but not only just control in it but it's a de Democratic saying voice and I think it's a it really brings the world together and and for me polka dot is really the true through realization web 3 and it's so exciting to see yeah now we're out of time so just uh final final closing words um you know what's next in polka dot uh briefly too long too much far but like I I I'll give you couple of ideas right so um number one we are entering a stage where poka do whatever 1.0 has been delivered we're entering a stage where the future direction is much more Community decided right like we have now a flourishing ecosystem on all these parties um not just have atively contribute to the Future Direction but a couple of things that um has emerged already as consensus number one we are moving away from the blockchain Centric Paradigm to an abcentric Paradigm saying like well doesn't matter what what chain this functionality is provide it really matters what the end user experience and the app experience is that's one and then a couple of huge technological uh advancement right I I just named them here agile core time right means um elastic scaling imagine your chain can have like you know you only pay for what you need any given time right so like if you have only one transaction a day well you only need that one block a day and you only pay for that but if you have huge amount of Demand right like as in the peak times of what was it uh back then the games on ethereum that had um crypto kitties crypto kitties and so forth right well I sh you not right your chain can acquire essentially what's equivalent of a CPU core from poka dot five or six and thatby boost its scalability elastically so that's that's a huge one and there obviously a bunch more right there's so many as so many to say but it's amazing on demand decentralized Computing so that is the future of web 3 and it is so exciting to be part of it thank you everyone thanks Mo thank you guys are beautiful thank you good