We deployed the first smart contract to Etherium back in the
day. It was a prediction market on
our then competitor Augers token sale, whether it would sell out
or not. We were so early that we started
building lots of foundational infrastructure for the wide
Etherium ecosystem. So we've built things like the
Nosesafe Power Swab, Zodiac, Doubtwuling, Noses chain.
All products and projects built with a NOSES should accrue value
to the NOSES token. When you have an open platform,
anyone can kind of make the user experience better.
In 10 years all the infrastructure will be
blockchain based. Welcome to Epicenter, the show,
which talks about the technologies, projects and
people driving decentralization and the global blockchain
revolution. I'm Sebastian Quichio and today
we have a bit of a treat because one of the hosts is becoming a
guest. That's right, we have Fredeika
Ernst, who is Co founder at Gnosis and she's in the in the
guest seat today because we're going to be talking about Gnosis
and specifically Gnosis 3 point O and their updated vision and
thesis for the platform. Before you do that though,
here's a few words from our sponsors.
This episode is proudly brought to you by Nosis, a visionary
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Nosis is at the forefront of innovation with Nosis Pay
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creating a superior form of money.
With Hashi and Nosis VPN, they're building a more
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Are you seeking a robust L1 to launch your project?
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project's future. Join the Gnosis community today.
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Farika, how's it feel to be a a guest on Epicenter for the first
time? I am weirdly nervous about this.
I mean I've I've been on probably like 200 Epicenter
episodes and this is the first time as a guest it feels weird.
It's nice. It's nice though.
Yeah, it's I, I think Brian was a guest once, like way, way back
in the day. He I had, I had interviewed him
about his whole Bitcoin kamikaze attack thesis.
Sonny's been on for sure. But I don't, I don't think
Mihair's been a guest anyway. But yeah, happy to do this and
really cool to, you know, see Gnosis continue to grow as an
ecosystem, like very organically, but always like up
and to the right. So let's let's get started.
So like for folks who are coming at this with a fresh set of
eyes, what is Gnosis and what's the background here?
I think like most people of course are familiar with Nosys
as like a long time builder in the space, one of the very first
companies to be to build on Ethereum and has gone through
several of iterations of products and visions.
But yeah, what's the Nosys vision today and how did you
guys get here? So we've been around for in
blockchain in terms of very long time we were, we deployed the
first smart contract to Ethereum back in the day.
It was a prediction market on our then competitor Argus token
sale, whether it would sell out or not.
Yeah. So basically we've been around
for a super long time. We started as a prediction
market platform. We were so early that we started
building lots of foundational infrastructure for the wider
Etherium ecosystem. So we've built things like the
Nosis Safe Cow swabs, Zodiac, Dow tooling, Nosis chain
obviously and a couple of other infrastructure projects that are
still around and alive today. Many of course are not, but I
think this is this is the natural course of building
stuff. And we have recently pivoted a
little bit to what we call Nosis 3 point O, basically from
building foundation infrastructure for the for the
wider ecosystem to building adapts that are meant to be
usable eventually by actual real human people who want to use it
because it works better than what they currently have.
Mass adoption, we're going to get there.
Yeah. I mean, we've been saying this
every bull market and not me personally, but kind of the
space has been saying this every bull market since 2015 probably.
I feel like this time it's true though, because we have built so
much technology that actually allows us to abstract things
away from the user. So for instance, one example is
the seed phrase, right? The seed phrase, it's a terrible
user experience. It's these are your 24 words.
Don't ever lose them, but also never show them to anyone or or
everything else. Go on.
I mean, this doesn't work. This doesn't work for us.
It doesn't work for the wider public.
So but having that, that self custodial element and that
permissionlessness that kind of comes with it, but having a
much, much better user experience, this is something
that kind of we can create now. And consequentially, I think
that this is actually the bull market in which we will see
consumer adoption. One of the things I, I like
about Gnosis and I, I find like quite commendable is that it, it
appears as though like the organization is very value
driven and staying very true to like the original ethos of
crypto of like have custody of your assets, running your own
nodes and up, you know, getting to financial sovereignty.
And I, I think that in a lot of, you know, in a lot of cases, you
know, teams that sort of start with that original vision or,
or, or start with those original values over time, maybe get
corrupted in order to achieve better efficiency, in order to
build better products. Like how have you guys been able
to maintain like such a high, high level of focus on like the,
the vision and the, the, the values of crypto while at the
same time building tech that enables users to, you know, to
abstract away, as you said, like all this kind of complex
technology. I think I would disagree with
the premise of the question a little bit.
I think in the past we've not done this successfully.
So in the past, I think we've built very much for people in
the space who already knew how it worked and who were already
accustomed to the user experience drawbacks of crypto.
So I think things like the NOSA safe, for instance, under the
hood, it's it's fantastic tech. It's very much not a retail,
it's not a retail product. Same for for a car.
So actually for most taxes, it's they're not retail products as
such. So kind of so far we've kind of
optimised for building things that kind of stay true to the
ethos and thereby sometimes neglecting user experience in
terms of, I mean, maybe it's not even fair to call it neglecting.
So kind of we've prioritized building truly decentralized
tech over usability. And I think that's kind of been
that's kind of come to our detriment many times over the
years where kind of we saw competitors kind of pull ahead
because kind of they were, they, they were taking shortcuts.
And I mean, it's completely fine.
But I think now we're actually in a place where we can build
everything on a completely decentralized stack.
And I think kind of it's, it's kind of it's, it's time to kind
of think about why we actually wanted to do this in the 1st
place, right? So if you think about why would
you build anything on a completely decentralized stack
from an engineering standpoint, it's a complete pain.
So building anything, building everything on kind of AWS would
be much, much easier and faster. So kind of thinking back to what
exactly the the decentralization value proposition was, I think
kind of it comes in three, it comes as as a triptych, right?
So basically the first thing is actually decentralized
ownership. So kind of if you do anything on
the Internet today, kind of it accrues value to the same five
companies and people behind the companies.
And with with decentralized technologies, we can kind of
decentralized ownership in, in, in that sense.
The second thing is individualized agency.
So kind of on, on the on web three, we can lower the barrier
to entry for people very significantly so they can have
access to things they previously didn't have.
And this this also includes kind of coordination in very large
scales and dowers and so on. And the third thing is actually
user experience ironically, because kind of when you have an
open platform, anyone can kind of make the user experience
better. So if I kind of have a killer
feature idea for a centralized product like Google Maps,
there's no way I can kind of integrate it.
But kind of in the at that point where you kind of have a
decentralized Google Maps, I could for instance, say, I know
exactly how I'll give you, I'll give give you a fictitious
example here. I know exactly how traffic
light, the traffic lights are set in Berlin.
So I can give you better estimates of how long it'll
it'll take to get places based on kind of which phase there and
so on. And I could kind of just add
that on to the existing decentralized Google Maps
product. And you can't do that kind of if
you're building on centralized technology.
So kind of when, when we think about kind of what can we
actually build now that has additional value to retail
users. I think these are kind of the
three prongs that kind of we we need to look at.
So can we make things? Can we, can we benefit users
from making ownership more decentralized?
Can we make things accessible to users that previously weren't
accessible to them? And can we kind of build a
platform on which anyone can innovate?
OK, so where does the Gnosis 3 point O vision fit into all of
this? And you know what?
What is the Gnosis 3 point O vision and how did you arrive to
this this state of Gnosis? Yeah.
So basically you Gnosis 3 point O vision is, is twofold.
One is just very organizational. So kind of I think in the past
because we have built so many things, people were always
confused about kind of how it relates to the Gnosis token and
kind of it clarifies that. So it kind of very clearly
specifies that all, all products and projects built within NOSES
should accrue value to the NOSES token either directly or
indirectly. And the way that that can happen
is either they use G&O as, as it's own token or they kind of
have a different token that then is value coupled against the
NOSES token. So for instance, Safe, they have
their own token and it it gets put into an automated market
maker against GNO. So kind of if Safe appreciates,
GNO will appreciate and vice versa.
So kind of without using the same token and kind of while
having in kind of independence kind of act the way that's in
the interest of each project individually, you can still
economically couple them together.
And we do that both with with projects that we have spun out
and with projects we have invested in.
So Gnosis has, has actually we have invested in over 80
projects over the last six years or so, so kind of like a mini VC
and we hold very significant positions in many other tokens
consequently and kind of we can couple them the same way.
So for instance, one example for instance would be autonomous.
So we hold $50 million worth in autonomous tokens.
So kind of we couple it to the GNO token this way.
Does Gnosis that provide what Cosmos we call like protocol
owned liquidity where Nosis the chain can provide liquidity
saying like no token to a protocol in exchange for that
protocols token. And like this, this is used
particularly in the case of the Cosmos Hub, where the hub
provides Adam liquidity, say to like a DEX and then that DEX in
return. It's sort of like a cross chain
swap essentially. And then it aligns, you know,
incentives both ways. Do you guys engage in that sort
of? This is exactly what we do.
So yeah, protocol owned liquidity is also what we call
it in our books and it works amazingly well for us.
And then obviously we have NOSES chain so that, you know, tokens,
the staking token for NOSES chain.
NOSES chain is very decentralized, so there's
230,000 validators, which is 20% of what Ethereum has.
And you can we, we have intentionally lowered the
barrier to entry for staking so that interested lay people can
kind of become a part of this network.
So you need 1G and O costs around $350.00 these days and
you can run it on most hardwares you need.
And yeah, we, we try to make it easy for people.
You get between 10 and 15% APY. It's it's lots of people do it
just for the fun of kind of be being part of a decentralized
network. I think it's, it's in terms of
technology, it is a similar degree of technical expertise
required to running an Ethereum node, but only a fraction of the
capital requirements. So kind of the the validator set
is very large for us. How big is the Gnosis validator
set now? It's like 230,000 validators.
Right. There's a lot of validators.
Right. But, but, but just like, just
like an Ethereum validator, this is essentially like every
validator is a chunk of you know, like 32 no or, or
something like that, right. So it's not.
So do you have an idea of like how many individual stakers that
is? Yeah.
So it's difficult to kind of pinpoint exactly and also that's
deliberate to a certain point, but it must be around 2000
individuals who kind of who, who, who are validators on the
network. This might sound like a kind of
silly question because I don't know this, but are are is there
liquid staking in? Yes, we also have liquid
staking. I mean anyone can kind of run a
liquid staker on top of no. So, so kind of it's it's
permissionless that way. We don't encourage it
particularly just because as soon as you have liquid staking,
you have you have economies of scale again.
And then you end up in a kind of Lido like situation where a
significant portion of the staked ACID actually rests with
one set of contracts. And that's, that's, yeah, I
think this is difficult from a network perspective.
If you kind of if, if you want to make your network as
resilient as possible, this is not a great situation to be in.
But what we also have, and this was this we actually had the
first instance start up this week is oh boy, which is.
Decentralized validator. Exactly.
Yeah. And that's also Diva which also
decentralized validation and so on.
So and we've, we've also those are also among the projects that
we as noses have invested into just to make sure that kind of
the ecosystem remains robust. Right.
So how are you leveraging Obel? Obel runs on Noses chain just
like like it does on Mina. OK, got it.
OK, interesting. So this, this pivot from
building foundational infrastructure to Daps, what
does that mean sort of organizationally?
Does it mean that NOSIS is taking a step back in terms of
maintaining the the the foundational infrastructure and
we'll have more sort of product people building Daps internally
or are you investing or financing DAP developers to
build on the infrastructure? Well, so yeah, how does that
kind of? Yeah, that's that's the other
part of the nose is 3 point O vision.
So that's kind of the idea that now we kind of have to build
applications that kind of serve real people with real problems.
We will not stop maintaining the infrastructure for sure.
So kind of like part of the infrastructure projects are spun
out so safe and cow and Zodiac and so on their their their own
things, just as Kapadki is, which we retain, you know, a
large stake in, but they are their own projects and they kind
of we we have no hand in kind of running them operationally in
any way. So and noses chain, yes, we will
absolutely continue maintaining it.
It is more of a coordinative role kind of just like you
wouldn't say the theorem foundation kind of runs Ethereum
kind of we have a codef coordinator and we have all the
different clients that most of the different kinds that.
Ethereum mainnet also has, so they have dedicated noses chain
teams and kind of we have someone in house who coordinates
those teams. But in principle that is pretty
coordinate, that is pretty decentralized and we don't have
to do a lot of thing things. There are other things where
kind of we do have a hand in kind of making sure that
foundation infrastructure is there for the NOSES ecosystem.
So things like making sure there are block explorers, making sure
the RPC endpoints work and so on.
Usually that that just that is run via the NOSA star.
So kind of the RPC endpoint providers and and the block
explorer providers and so on, they just make a proposal to the
noses down. Obviously we've reviewed this,
but so do all others, other GNO holders.
So kind of this kind of it is we, we still feel responsible
for it to a certain degree, but it actually runs pretty well on
its own. And this idea that kind of we
will pivot to to applications and specifically payments and
financial rails applications. This is the other of the other
half of the noses 3 point O vision.
Yeah, I want to talk about the the the payments and financial
rails in in a second because I think that's actually one of the
most interesting things here. So how did we get that?
So we we just literally sat down with a blank sheet of paper and
kind of brainstormed where we think we can add the most value
with the technology stack that we currently sit on.
And there were a couple of contenders.
Another one was social media, because obviously clearly it
would benefit a lot from kind of being on a credibly neutral
platform. But the easiest lift in terms of
technology seemed payments while at the same time the business
model that kind of payments comes with, it's very clear.
So kind of this, this is tried and tested a million times.
So we kind of eliminated as many unknowns as possible and said,
OK, this is where we can provide something that is actually
useful to a very significant number of people and we think we
can build it with what we currently have.
That that that's that was basically the rationale behind
it. Yeah.
So I'd like to talk about Nosis DAO a little bit and its role in
governing the Nosis infrastructure.
What what aspects of the infrastructure does it govern?
Is it is it just Nosis chain or does it have also a role to play
in other of the foundational infrastructure like the safe or
like what are the interactions I guess between Nosis DAO and the
safe DAO and you know some of the other infrastructure that
you. Have that's a fantastic
question. So first of all, it doesn't
really govern noses chain. So there's very few parameters
that the DAO actually sets in principle kind of noses chain
is, is governed by the validator set because they kind of they
decide on whether to upgrade their nodes to which software.
If, if you, if the validators are not on board, there'll be a
hard fork and so on. So, and then there's, there's
actually a lot of other stakeholders that also kind of
influence NOSES chain often not as directly as the validator
said. So things like the core
developers, the, the stable coin providers, the RPC endpoint
providers, the Oracle providers, centralized exchanges and so on,
all basically that entire set of actors, they somehow govern
noses chain together. Just like the same is true for
Ethereum, right? We wouldn't say Ethereum.
The Ethereum Foundation governs Ethereum and it's the same for
Gnosis. What the Gnosis Dao actually
mainly does is allocate treasury.
So the Gnosis Tao sits on a very large slavery around 500 million
in GNO and another 500 million in Ether and stable coins and
other other tokens. And the the NOSES token kind of
is a voting token in the Dow. So the allocation of funds
happens via the Dow. This is kind of the main, the
main thing that the Dow does. And then kind of it tries to
align all of these portfolio tokens of portfolio companies
with NOSES interests. So for instance, NOSES DAO holds
20% of the safe token supply. So obviously kind of there are
talks between NOSES DAO and Safe DAO about kind of like how to
align each each other strategically and then kind of
just because kind of there's very large aligned economic
interest between the two Daos. And yeah, in principle, that
should be much more out in the open.
So I think a lot of this actually happens like for old
hours at the moment, kind of behind closed doors and
different Telegram groups and then kind of proposals get
posted and kind of there's protocol politicians and so on.
I think coming to a point where a lot of that is transparent and
open to anyone who kind of wants to join that discussion.
I think this is somewhere we need to get to. 1 initiative
that we're spearheading is kind of having having a dedicated
forum page for each large holding and tokens that Nosistow
has where kind of people can talk about the strategic
alignment, say between noses and safe and what safe should do for
us and what we should do for safe.
And kind of what what happens if this doesn't happen because
always kind of when you hold tokens, obviously divestment is
always an option, right. So, yeah, basically having
having these alliances out in the open that are currently, and
I mean, I'm not even a part of most of these alliances.
They kind of they happen between different, you know, token
holders and safe token holders and they kind of result in
proposals in the forums. But yeah, so in principle, this
is how this is how Gnosis and the portfolio companies or
projects kind of align themselves.
What's the philosophy in terms of capital allocation
management? Like is the Gnosis philosophy to
have all of the capital, the treasury managed by the Dow or
do you guys have like sort of organizations that are allocated
pools of capital with like a board that that itself allocates
capital? So like, for instance, in
Cosmos, like the hub allocated quite a bit of capital to this
organization called a, a Dow. They have a team that reviews
grant, grant proposals and, you know, issues those proposals.
So it's, you know, it's sort of outsourcing that work because
what, what it, I mean, I think what we found here, at least in
Cosmos governance was that the hub was not really like the
token holders were not always the better, the best equipped to
make decisions about what to allocate capital to.
And, and so This is why like part of the Cosmos Treasury was
allocated to a, a Dow. Does something like this exist
in Gnosis? Yes.
So historically this has grown. So kind of back in the day the
company actually conducted the token sale and that company
still holds a small part of the treasury and kind of from that
company we do actually do product in product development
mostly. Anyone else could in principle
ask for a grant from NOSA Style to do the same.
But so far this has happened once.
So kind of we had once a proposal was a very large
proposal of a group of people who credibly claimed to what to
do business development into ecosystem building on our behalf
because business development and marketing and so on.
They, they, whenever our strong suits and they said, look, you
allocate us this capital, we, we, we can do it for you.
And in the end, kind of the, the funds were reached, were
returned because it didn't go so well.
But in principle, Nosis DAO is very much open to that.
So kind of having having different contributors in charge
of different things and 11 relationship where that's
actually worked incredibly well for Nosis in the past is the
relationship with Kapatke, which is also a DAO that has spun out
of Nosis. It's a treasury management Dow.
So they manage our treasury, but also the safe and health
treasuries as well as Lido and oven balance and a number of ENS
and a number of other Dow's. And for us this has worked super
well because we don't want our capital to lie fallow.
But obviously this is not something that that the Dow can
vote on kind of on, you know on a in the cadence that makes
sense. You can't say we want to vote on
whether to withdraw funds from this pool and so on.
So this is also what drove the development of the Zodiac Dow
tooling. So, so that kind of we can, we
as no star could hand this over to Kapatki without them having
custody of the funds. So they can now do things to,
they can do certain operations to the funds and that they're
being that, that they're managing.
But they, for instance, they can't withdraw them and or sell
them and so on. They kind of, they have a, they
have a permission list of of things they can do to the funds,
kind of like like a fund manager.
OK, no, interesting. Yeah.
I mean, I guess it works for as long as it works, right?
If the Dow and the token holders are effective in allocating that
capital and the community at at large is satisfied with how
capital is is managed and and allocated, then then it makes
sense to sort of continue in in in this configuration.
Yeah, no, but I I'm 100% with you.
So kind of Taos and noses Tao included me to become much, much
more efficient. So I think kind of the one thing
that kind of we need to understand is that the, the very
constrained thing in Daos is attention and kind of paying for
the attention of the of the participants and kind of only
escalating certain decisions, kind of delegating some
decisions to others. I think this is, this is
infrastructure that kind of we as an ecosystem very much still
have to build up because kind of saying, for instance, I, I trust
XY's judgement in terms of treasury allocation, but I don't
want them in charge of say the marketing, the marketing tactics
and so on. And I want someone else in
charge of that and kind of saying, telling people basically
having a way of kind of delegating your vote depending
on what topic you're voting. I think this is this will be a
great tool for the ecosystem. Yeah.
What one of the things that we've seen sort of experimented
with in in the Cosmos ecosystem is that it is the use of sub
Dows. So Cosmos Dow infrastructure, at
least like the Dow, Dow infrastructure that's used
primarily allows for for sub dows.
And so some, some ecosystems are some, some chains have created
sub dows, right. So you have like the treasury
and then the treasury will allocate some capital to another
Dow. And then that Dow would have
members that manage like a smaller pool of members that
manage that capital, say for like marketing or business
development or project funding. And the, the, the, the parent
Dow, you know, has some amount of also power over revoking, you
know, some of those members, if they, if the community feels
that like members are not acting in, in a way that's desirable,
like they can revoke access, they can veto certain types of
proposals. So it creates like, I think a
really kind of streamlined architecture for Dows to
reallocate pools of capitals to, to other Dows instead of like
sending that money to just some organization off chain.
Right. That that has a pool like those
members that that aren't accountable directly accountable
on chain to the to the parent Dow.
Yeah, I, I think that makes a lot of sense.
And I think this is also by and large how traditional companies
are structured, right? Kind of like you have a
marketing department that has certain budget and if they go
totally out the rails, you kind of you have you have heads
rolling and then kind of you. And I think this is exactly how
kind of it needs to work in Dallas down the line as well.
But obviously kind of putting all of these things that all of
these mechanisms on chain is always a bit of a challenge.
Yeah. So let's talk about the payments
focus here. So, so Gnosis Pay is I think one
of the the main products that you launched in in last year
that is actually like quite interesting.
We talked about this on on when you were on the Interop podcast
a couple of months ago and all the cool tech behind noses pay
that allows people to have money like basically like on an on
chain address and and the credit card signing the transaction.
And it's it's actually like quite, quite cool, I think
technically, but there's other there's two other products here
that I'm not very familiar with, which is circles.
I know that's your universal basic income protocol and then
metry that I'm not very familiar with.
So, yeah, what, what's the, what's the overlying thesis
here? Like, why did you, you know,
when you sat down and like, thought about what this
infrastructure could be used for?
Why did payments stand out as the the the the the vertical
where you could provide the most value?
That's a fantastic question. So if you kind of look at
payments in hour bubble, kind of like, and I don't mean the web
three bubble, but kind of like the global N bubble, payments
are not a lot of are not a big pain point for us.
So kind of you can send funds to your friends, you know, in a
couple of minutes at more or less 0 cost, you can get you
have access to loans, you have credit cards, kind of everything
kind of works for you. This can't be set for a lot of
the rest of the world. So I mean, even for us, there
are some edge cases where we kind of feel the limitations of
the financial system. So recently for instance, I had
to send a a fairly significant amount of money to the United
States for an investment and it cost me I think €100 with Wise
to kind of send it. And I mean obviously had I had I
just sent USCC would have cost me almost nothing.
But I mean those are edge cases by and large kind of payments
work well for us. If you look at, for instance,
Latin America or even countries like Turkey in Europe, we see
that inflation runs rampant and even access to a dollarized
account is a status symbol to us.
That's not even a product anymore, right?
Being able to hold USDC on chain, we don't think of that as
a product, but really it is for a large part of the global
population, this very much is a product.
So for our rationale was if we can kind of build something like
a way for people to access this technology even without building
any more financial protocols ourselves, just providing them
with axis will actually unlock a lot of economic value for them.
So the idea behind Metri, which is the project you're unfamiliar
with, but not really because it used to be called Gnosis one, it
just got a proper name. So Metri's based on the safe.
It's kind of an it's a nice mobile interface build on a safe
back end. And what it allows you to do is
it allows you to onboard your friends really easily.
Kind of they they can kind of set up a new account with the
push of a fingerprint. They can secure it later kind of
when they have significant funds in it.
They can always add more signers, but they can it gives
them the opportunity to kind of hold stable coins they otherwise
wouldn't be able to hold kind of wouldn't be able to hold that
currency. And that that is, is a very
simple use case for us, but something that is of a very real
value to actual people. And then the way that we think
about is kind of OK, now you kind of have to connect it with
the the legacy financial rails that we already have that people
already use. So you want things like you want
an IBAN integration. So kind of you want your wallet
to be addressable by an IBAN. So you send funds to that IBAN
show up in your wallet, you can do a separate transfer right out
of your wallet. That's all tech that exists.
It's all tech that kind of we can, we just have to put
together in one place Nosus Pay as well.
So kind of Nosus Pay is kind of built on the same premise.
So Nosus Pay allows you to connect a self custodial wallet
such as the safe under the hood of the metric wallet to a credit
card, allowing you to kind of off ramp your crypto anywhere
that Visa is accepted. And kind of building those
bridges between the old and the new is how we think we can make
adoption happen. And kind of an example that kind
of I like to use is the telecom revolution, right?
Kind of when we were kids, we had we had we had landline
phones and then kind of when we were like teenagers, Skype came
along, we kind of had Skype, Skype out.
You could kind of call any landline phone for the local
tariff and the way that that worked.
And this is for the younger listeners.
So basically phoning other countries used to be really,
really expensive. So when I was a kid I had an
aunt in America calling her was like the entire family kind of
collecting round the the telephone, kind of saying oh hi,
hi Auntie Margaret, how's everything going and so on.
And then kind of we hang up like 3 minutes later and was 10/10
German marks at the time or something.
And kind of having that step up to Skype out where kind of you
pay the local tariff regardless of where you phoned that was
that was fantastic in terms of user experience.
The way they did it is they kind of they used new rails for the
1st 95% of the call, namely it was routed over the Internet and
then the last 5% were over the old copper cable.
And then kind of as, as this voice over IP protocol kind of
gain traction and other people had Skype too.
You could just do everything over the Internet and kind of
became completely free. And now even when you kind of
phone landline phone to landline phone it, it would still be
routed over the Internet. It'll be still be voice over IP
don't actually do this on copper cables anymore.
And I think it'll be the same for financial rail.
So in 10 years, all the infrastructure will be
blockchain based. It's just that we kind of have
to have to take out bids and replace them by the equivalent
blockchain infrastructure that is hardier and simpler and and
by and large without people noticing in the process.
So I think the user experience will stay largely the same as it
did with kind of calling someone on the phone.
Yeah, that's a great analogy. I really like that.
And I'm reminded of just how much regulatory push back there
was also on Skype and, and all these voice over IP providers
because they were, I think, I think telecom companies saw that
they were going to either have to adapt or you lose a large
part of their revenues for, for voice calling, which, you know,
they have, they've made-up with really expensive Internet plans
and, and then this sort of thing.
But yeah, I, I, I, I, I think that one of the one, so one of
the use cases I, I absolutely love about this whole like Nosis
pay infrastructure is the IBAN to blockchain.
So I, I use Manarium fairly regularly for, you know,
personal use, but also for my, my company and that being able
to send money to send money to an IBAN and it appears on chain
and vice versa, send money from a chain to a bank account and
it, it's instant, it happens in seconds.
I mean, it uses the, the instant SEPA infrastructure rails, which
allows you to get SEPA transfers in, in, you know, less than 10
seconds. It's, it's magic.
It just feels great to be able to move in and out of of a chain
without having to go through like, you know, your cracking
account or some other exchange that on, on ramp, off ramp.
It's so seamless. And you know, there's so many
improvements that that could be made there.
I think just from that particular use case, namely, you
know, with Manarium, the ability just to, to, to swap directly
into that euro coin, etcetera. I mean, I, I think maybe they've
added that by now, but but noses pay is kind of similar where and
and I don't even have a Nosus pay card yet.
I'm just talking from what others have told me.
I need to get one. I need to apply for it.
But but yeah, with Nosus pay, you have, you have funds on, on
chain. And if you've used one of these,
you know, crypto to credit card services before, typically what
you have to do is you have to on board, you have to, you have to
top up your card, right. So you have to send money to an
address, then it shows up on the card and and then you can make
your payments. But but here the the card is
actually signing a transaction on chain on your account.
And so you don't need to do this, this kind of top up thing
that introduces some interesting privacy issues that I'd love to
get your opinion on as someone who I know is like very
particular and it's sort of careful about, you know, your on
chain privacy. What like what are the risks
that people get into here when using this card where
essentially every not now, not just on chain transactions, but
also their their real world transactions, like every time
they buy a baguette, you know, which is for me every day.
Yeah, that shows up on chain. What's the, I mean, what's the
risk here? And and how do we resolve this
this issue? Yeah, this is the main issue at
the moment. So kind of we decided to kind of
launch this knowing that the privacy was non existent just
because there were other other heavy lifts kind of engineering
of of, of, you know, in, in the engineering of this, that kind
of we just need to get out of the door and kind of we couldn't
work on this web. So yeah, privacy shit.
So I mean, currently when you go to your local Baker and you pay
22 EUR 90 for a baguette €2.90, the €2.90 payment.
I don't know where you're buying baguettes, but.
How much is the baguette in Paris these days?
I get some Paris so like $1.25. OK, this is I need to go back to
Paris sometime. That sounds wonderful.
Yeah. So you, you pay, you pay €1.25
for your baguette and that payment shows up on chain.
You you can't see that it goes to the Baker because it actually
goes to the monarium off ramp account.
So odd payments kind of go to the same address and then the
the the settlement of them is actually batched.
We try to obfuscate a bit by kind of rolling different
transactions together, but it's not very good obfuscation.
So you are 100% right that kind of the privacy aspect of this
currently is the Achilles heel. Why do I still use it?
Because basically I think it's important that kind of we iron
out as much of the user experience aspects as we can
when we can. We're we're working on the
privacy aspect. So there will be a privacy
respecting version. I don't want to say soonish
because letter jinx it also privacy on chain is pretty hard.
But yeah, we're working on it. I know it's a problem and we we
will address it. Yeah.
The other aspect here is the regulatory, the regulatory
issue, which is that, I mean, well, I, I know that, that, that
policy makers, at least here in France and, and some at EU level
are pushing for all crypto transactions, whether they're
happening on an exchange or some kind of payment service
provider, for that data to be automatically sent to local tax,
like the local tax authorities. I think this is, you know, I, I
obviously a massive infringements on people's rights
to privacy where, you know, we're not talking here about a
government being able to sort of subpoena or request one's
transactions information because there is a suspicion of a crime
or evading taxes or etcetera. We're talking here about
wholesale all transactions being available to the state at any at
any point in time. What types of technological
improvements can can be made to products like Nosis pay to curb
at least to some extent, this infringement that I, it's just
not in place, right. But I, I know that there are
policy makers that are, that are proponents of this sort of
blanket, blanket, you know, Gestapo style data collection.
Yeah, So I mean, this is also why many lawmakers push for
CBDC's because basically everything is transparent and on
chain. I think we need to push back
here on a cultural level and say privacy is normal privacy.
Basically, I I morally object to having this sort of transparency
for the state. I think how it can be mitigated
and how it should be mitigated because I also, I also see the
legitimate interest of states to collect taxes.
So I don't think all taxation is staffed and so on.
I think by and large states deserve to collect taxes and pay
for public goods that way. Obviously the way that they
collect them is should be improved in a technological way.
So for instance, we could have something like zero knowledge
proof attached to transactions saying OK, this transaction of a
private matter. For instance, I am gifting my
sister €10,000 so she can kind of put a down payment on a house
sort of thing that is not taxed. It shouldn't be taxable.
I kind of attach a proof that this is nothing to be taxed.
The state shouldn't have to know whom I'm sending it to or why
I'm sending it and so on. Just it should just know that in
principle, this is not a taxable event.
Same for other things. If I sell something to someone,
obviously this is a taxable event.
And this could also be kind of conveyed with A0 knowledge
proof. So I think keeping people honest
and kind of enforcing honesty while at the same time
protecting privacy, this is kind of the Goldilocks zone for me,
and I think we can get there. The one thing that really
worries me is how much privacy has already been undercut by and
regulatorily captured. And I worry that while
regulators usually say this is to protect and to make sure that
taxes are paid and so on. And I worry that this is not the
only motive and that they will be.
Yeah. And that you don't.
Have to worry about it. It's it's actually not the only
motive. Yeah, that they will be
resistant to kind of changing this to a way that is
demonstrably fair and affected, effective at enforcing taxes
while at the same time still being privacy preserving.
And I think this is a battle we will have to fight generally as,
as, as a people. And we're we're here to fight
it. Right.
I, I, I think like the good faith argument that that ZK is
the technology that enables states to have oversight over
the types of transactions. I mean, not, not just in this
case. I mean, there's all sorts of use
cases where ZK could allow people to have privacy while
ensuring some form of attestation about we could do
whatever. It could be a transaction, it
could be someone's where someone's living, it could be
someone's income. Like there's, this is like all
sorts of really interesting use cases that allow us to have sort
of like this best of both worlds type of scenario.
The, the fact that I, I think that these technologies will
never be adopted in full deployment because they don't
allow states, nation States and you know, the sort of EU
governance machine to have full visibility into people's
dealings. Like I, I, I think that
fundamentally this is out opposition with the modus
operandi of the European governance system that, you
know, increasingly wants to have more and more data and
information and access to that data information on its
citizens. And I know this not only in
Europe, I know like in other places, like in the states, you
know, like, although the states I think have much better
constitutional protections, but, but many, most European
countries I think don't have those the same constitutional
protections that and, and puts us at risk of, of being becoming
part of this police state. I mean, you can use these
technologies for terrible things, right?
I mean, kind of you can, you can do an incredibly effective kind
of social school kind of like China has using these these
immutable ledges. I think it's it's a battle we
will have to fight. And I think kind of imbuing
people with the certainty that privacy is normal.
Privacy should be the norm. This is something that is, this
is something that we have to do, absolutely.
I want to talk a little bit about the EVM here.
And you know, Gnosis, of course, like you've talked about before,
is one of the, the, the, the most OG teams building on the
EVM. And the EVM has really dominated
the, the developer ecosystem for block chains.
You know, Solidity is by by a large margin, the most used
smart contract language to build on block chains across the not
only Etherium, but the entire EVM ecosystem.
But Solidity and, and the EVM are next year going to be 10
years old. And, you know, if we're thinking
now that, you know, we're arriving at a place where we can
now start to have applications built on block chains and that
essentially we're sort of in the, you know, I sort of, I sort
of see us as somewhere like I see, I see this moment akin to
the kind of like when when the iPhone came out, you know, we
had the Internet before that, but things really took off when
we had mobile. And that's also when we saw a
shift from PHP in the LAMP stack to a very modular and modern
development stack in the form of mostly like Node and, and
modularizing the, the, the, the, the, the development stack.
So like AWS, for instance, and the, the cloud stack have very
modular components that allow developers to kind of pick and
choose and scale their applications.
So from the perspective of the EVM, you know, I kind of see the
EVM and Solidity a little bit like PHP, where they're very
important and and crucial to crypto as like a foundational
piece of software infrastructure for crypto.
But I think are going to live in the way of becoming legacy
software. So in 10 years from now when the
EDM is 20 years old, you know, do we think that most college
kids you'll be learning to learn learning code Solidity or some
other language that is modern, built for the modular
infrastructure, interoperable, doesn't have the performance and
security issues of the EDM performance, etcetera.
And so that that's kind of like my perspective on the EDM.
And then Solidity, I think probably you don't share that
that perspective exactly. But you know, looking long term,
like 10 years from now, you Gnosis will most likely still be
an EVM chain, but there's going to be lots of other chains out
there that are leveraging modern performance safe, secure
programming languages. How do you see that playing out
long term and in terms of like the EDM's and Salutis market
share? And do you think that it can
continue to to compete and remain relevant in this fast
pace, you know, sort of like evolving infrastructure space in
crypto? Yeah.
So I think, I think the EVMI think we're not so far, far
apart in kind of what we believe here.
So I think the EVM will remain relevant kind of as the
underlying. I think people in 10 years will
not learn to program Solidity. But I also believe people in 10
years will not learn to program any other programming language
because large language models and other transformer like
software systems will be so good at kind of understanding what we
want software to do that they will build this for us.
So I think this will be abstracted away from us in a
much larger manner than most people currently believe.
And yes, I think kind of what what things kind of compiled to
down below that people won't know about and won't care.
Just like they don't know how how kind of your your Python
script today is transformed into byte code that can actually be
executed by by silicon sockets, right?
Yeah, No, that makes sense. I mean, I, I agree with that
more development work will be done by AI agents like
transformer types. But there remains, I think some
really important things to know about the EVM like performance
compared to some of the other, you know, paralyzed VMS in
crypto that allow for just like much faster and much higher
throughput. There are the security issues
that remain right in in the form of like re entrancy attacks,
etcetera. And then some features that
exist in other frameworks that that don't exist in the EVM like
for example, in the move VM, we have the ability to have keys
that are per application. So this enables some
containerization or of of like security risks,
interoperability, being embedded in other languages like for
example, cause and was and being able to leverage IBC, these
sorts of things. Like do do you think that the
EVM in its current form and Solidity in its current form as
being like a very low level blockchain language should
include or or do you think that like these features will get
built on top of the EVM as like supplements and other layers on
top or like this kind of framework approach?
Do you think it makes sense for that to become part of the
underlying framework like VM framework?
I so I think it goes without saying that if you were to kind
of construct the EVM from scratch again today, you would
make some choices differently than kind of we made them back
in the day. I think this is a completely
fairpoint to make. I think almost everything that
you mentioned can be implemented on top of the existing EVM
stack. It won't be quite as efficient
as if it were implemented kind of at the lowest possible level,
but I think in the in the grand scheme that won't matter so much
because the EVM has such a head start in terms of developer.
Attention and kind of resources that have been created around it
that competing with it won't just require being a little bit
better here and there, it would actually require being 10X
better. And I I don't see that
happening. So even with paralyzable
systems, to a certain extent, we can actually do that by having
different execution environments and then kind of trustlessly
connecting them together kind of like IBC style.
So I think there are work grounds for all of these things
and kind of having I think where Ethereum has actually heard
where we can kind of learn from the Cosmos style blockchain
ecosystems is having a native IBC type thing.
So kind of having native interoperability kind of built
into the system here. I think this was the largest
thing that kind of was neglected kind of for EBM type systems,
but also for that I think we're catching up.
So I think kind of at at this point, I would still bet on the
EVMI, don't think it's, it's, I wouldn't, I wouldn't put all my
money on it. I think it's still possible that
it'll be overtaken by other other systems, but it won't be
for small efficiency gains. Yeah, No, I think that makes
sense. I, I, I think that I, I, I do
think that that this sort of story of PHP and ASP as the
dominant development languages in the 2000s is a comparable
analogy where PHP still, I think power something like 60 to 70%
of websites on the Internet because it powers this like
legacy infrastructure or this like.
So I, I think like most of Facebook is built in PHP
WordPress, which is like, I don't know, 50% of the websites
on the Internet, you know, uses PHP.
So there are like a handful of really important pieces of
Internet software that continue to use PHP and that make up for
the majority of the deployments. But, but new applications, you
know, like new start-ups, etcetera, are mostly building
like using other languages. And that I, I think, I think
that this is a similar path that the EVM will take where very
important crypto infrastructure of a compound synthetics, you
know, unit swap, etcetera, like these very large and very
important pieces of financial rails will continue to use the
EVM and and and fund the EV miss development.
Also, perhaps while, you know, newer applications L twos app
chains will use other languages most likely.
So that's kind of where I where I see things heading.
I wonder if that makes sense to you.
Yeah, absolutely. And I mean, that's what we see
today, right? I mean, a large number of who
was actually decided against using the EDM, right.
So kind of, yeah. Cool.
Maybe just one, one final question here as we wrap up.
So currently Nosis chain is a sovereign chain.
I guess you could even call it a sovereign app chain because it,
it, it, it is an application that allows you to run financial
rails. It runs kind of like very
precise and very specific types of, of, of applications.
But will Nosis become an L2 at some point?
Like, is there a world in which Nosis rents its security from
another chain like Ethereum? That's a tough one.
I think as you ask a question, the answer's probably no.
I also wouldn't call Noses an app chain because it's very much
a general purpose chain and there's all kinds of
applications on it. But I think we will start
thinking about L2 is and L ones in a much more yawns way.
So we even see that already with kind of validiums where kind of
we see L twos that check into the L1 periodically and kind of
how often that is. Obviously this is, this is a
cadence that you can set, but, but kind of the data
availability is not on Ethereum for cost reasons.
It's elsewhere. And we, we also see these, these
sovereign roll ups, which some people say aren't actually roll
up roll ups at all. But basically kind of where,
where, where kind of the you can kind of play with how many
validators you have for that particular roll up.
Kind of what the rules are, how to become A to how to become a
validator, how validators are slashed if they misbehave, how
often these chains kind of check in with Ethereum, how much of
their their data they actually process call data or in the
blobs or where else to post them.
So I don't think this is kind of going to be a binary thing
you're an heir to or you're not an heir to.
It's kind of going to be a continuous spectrum.
And I think we can actually imagine a word where noses
regularly checks in with Ethereum and kind of posts its
state to Ethereum. You can also imagine a word
where Ethereum does the same with noses, right?
Kind of where theorem regularly posts the the hash of the
Ethereum state to nosis chain that that wouldn't automatically
make Ethereum and L2 to nosis, right?
It would kind of just make them Federated in some way.
And I think kind of having a better terminology of kind of
how how chains check in with each other and kind of what the
trust assumptions are for transacting, transacting between
chains. I think this will have to come
because at this point it's it's not granular enough.
Yeah, I know. That makes sense.
And I'm going to push back on the app chain thing.
I think Nosis is an app chain. The app is generalized smart
contracts and, but, but I think it's I, I call it an app chain
because it has a specific, like it has a vertical that is kind
of it's go to market and and that vertical is very much like
foundational financial infrastructure.
And so you know, it's not, it's not an app chain in the same way
that like Osmosis is an app chain that has an app, right.
And that app is a DEX. And then there's also other
applications built on top of Osmosis.
So you could also say that like Osmosis to some extent is a
generalized, although it's not fully permissionless, but yeah.
I think I, I, I see where you're coming from and I think this
makes sense in kind of defining the vertical because what kind
of different things in the same vertical often have in common,
common is kind of how much they're willing to pay for a
transaction, how much security they need, right?
Kind of. So if you were to have a if you
were, you had to have a chain that primarily caters to games,
the security assumptions that kind of you need as a game
developer are probably very different than the security
assumptions in you need of kind of you want to have the Land
Registry on chain, right. So, and I think kind of making
sure that the trust assumptions that come with the same chain in
terms of kind of how, how, how the validator is set is chosen,
what happens if they misbehave, what, what are the, the trust
assumptions you have for bridging and so on.
I think this has to be in keeping with what you're trying
to secure. And obviously kind of noses
chain is, is very credibly neutral in the sense that it's
decentralized and no one, one validator kind of you can sway
the, the, the thing just like on Ethereum, then it makes complete
sense to kind of say, OK, this primarily caters to financial
applications because obviously financial applications have in
common that there's usually money at stake.
Great. Faraika, this has been really
terrific. It's yeah.
Being, being in the, being in the guest spot.
Not so, not so, not so hard, right?
Like I think you did pretty well.
Thank you. Before we wrap up, I, I do want
to plug Nebular Summit. I haven't talked about here on
Epicenter so much. I've talked about it on my other
podcast. But yeah, Nebular Summit is the
interchange developer conference that we are hosting.
We Interop Ventures. It is happening in Brussels
after ACC on July 12th and 13th. So if you're interested in
learning about the Cosmos ecosystem, the modular app chain
ecosystem and so much more, it's not just a Cosmos conference.
In fact, this year, you know, we're trying to go beyond
Cosmos. We're getting more folks from
other ecosystems, Etherium, the EVM ecosystem, Solana movement,
etcetera. So come to Nebular Summit, it's
a developer event. So most of the talks and content
is very technical. We'll have developer workshops
there. There's also an investor speed
dating. So if you're interested in
meeting PCs to pitch your idea and hopefully get funding, you
can also do that. You can apply for that.
Everything is available at Nebular dot Builders.
So here you can apply for investor speed dating and also
get your tickets. So once again, that's July 12th
and 13th in Brussels. Really hope to see you there.
I'm I'm bummed out you won't be at ECC this year, but I'm sure
there's gonna be like lots of gnosis people there.
So looking forward to seeing those those people.
Great. Thanks so much, Falika.
Thank you for having me on.