This is epicenter episode 447 where the guest Arjun book Tani.
Welcome to epicenter the show which talks about Technologies
projects and people driving decentralization and blockchain
Revolution. I'm afraid to take a chance.
And today, I'm speaking with our general plan e who is the
founder of connects connects is a bridge project and we will
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Dot IO / epicenter. Aizen, it's so good to have you
on. Thank you so much for having me.
Imagine and tell us about yourself.
How did you get your start in this industry?
Yeah, so I started being interested in.
I started building on top of the theorem in 2016.
I was always kind of like tangentially interested in
crypto, because I was involved with a lot of the like P2P
community in like the IRC days, but I ended up missing the boat
on bitcoin for some reason. I was just, I was personally,
just not very interested in it for some reason and then it
wasn't until it cerium came along.
And I kind of discovered it in 2016 that it clicked for me that
you could use. This technology to build public
goods, like truly public non-sovereign non-corporate
goods that are similar to the internet that can be like
globally accessible. And can we can be this like big
equalizing force in the in the world economy after that.
So I started playing around with the technology in 2016 built
some infrastructure and worked with a couple of projects that
the time I started the ethereum SF ethereum developers meet up,
which is pretty awesome because I was one of the First like
communities that was like actively building on top of on
top of ethereum. And then in 2017.
I ended up starting connects to because I sort of had a lot of
conviction on the technology like aetherium as a broader
technology and on this decentralization movement.
And my goal was just how can we bring this technology to a
billion people as fast as possible?
Quit. So, before we actually dive into
context and he was also one of the summoner's of the Monarch
Tower, right? Yes.
Yeah. So I helped to design them elect
out alongside Al. I mean soleimani, and then
helped build it with my current co-founders, laying Heyburn,
Rahul set, the ROM, and then one of the cofounders of Spain at
the time, James Young along with, I mean.
And, and then the, I guess the idea at the time was we were
really interested. In solving, this like
coordination problem that that we kind of felt that we had
around, you know, working collaborating this function on,
on building scalability infrastructure.
And also was just like a broader coordination problem that we saw
in the space and, and in the world more generally, and the
idea was that like, we wanted to create some sort of, like,
public resource for organizing, like, like, Community Action
around public goods without necessarily having like,
basically having that Yet public resource itself and the that
idea kind of became the moloch doubt.
The first really, really the first like down framework, that
actually ended up getting traction, which is pretty
awesome. We didn't, we didn't really like
ever expect that to be the case. We were just kind of playing
around with the ideas and the goal behind.
It was never like here is the solution to coordination.
It was like, here is a process by which a cure is an initial
step, and then a process and a mean by which we can eventually
hope to solve coordination more generally.
But the idea was always like, it won't necessarily happen.
It might not even necessarily happen as a marked out, but
hopefully, this can be the Catalyst to start people
thinking about this problem or more generally.
Yeah, I mean what it was definitely a right time.
Right place moment. And I mean basically the
narrative behind it was just compelling in in in the light of
the perceived weakness of the theorem foundation and basically
building things for the community.
So yeah, I think this was it was a great launch.
So tell us about connects the way she connects actually
started off as a state channels protocol. yes, so yeah, when we
when we started connects, like I mentioned earlier, like the the
key goal was always this technology ethereum specifically
and I guess like, decentralized systems has the capacity to
really improve to meaningfully rewrite, the way that human
beings coordinate at a global scale to move away from public
infrastructure that is owned by governments or, you know,
large-scale infrastructure is owned by like operated by
corporations and and towards making That infrastructure part
of the comments globally accessible in the same way that
the internet is globally accessible.
And, and it comes from this, like shared belief that the team
had released the founders had that like things like, you know,
Google search things, like money things like coordination
tooling, like voting things like that are should be accessible to
everyone in a fair and egalitarian way regardless of
where they live, which is not currently true for the majority
of the world. And so the goal was always like
let's take this this technology and let's find a way to scale it
to the world. And of course that pretty
quickly led us to scalability research because I was like one
of the biggest kind of blockers to being able to have many, many
potentially a billion peepers. People use this use of use
ethereum in 2018, when we started looking at this and it
started doing like scalability research, the there wasn't
really a lot out there. The this most of the research
had been at that point B focused on state channels.
And like Raven was kind of like the the leading project on that
at the time. And then there was new research
that was being done about plasma.
We, of course, ended up jumping into State channels because to
us, it seemed like the lowest hanging fruit.
Use case, was actually going to be payments.
And this is just a hypothesis that we came up with based on,
like, what we saw in the space of the time, which was projects
like spank chain, and others who were doing, you know, some form
of payments. And then, and then, of course,
like, you know, Plasma Research continued over the The next few
years, we kind of like expanded our understanding of say,
Charles and things like that. And we also moved towards like
building, you know, Roll-Ups as like a more generalized
scalability solution, which has less scalability, but is like
can be used for any kind of like arbitrary smart Contracting.
One thing that we found and this is the reason that we ended up
moving away from State channels, is just like a lot of our, you
know, we were a largely Rd org for a very long time.
We like had a very very small team.
That was very very leave and very hungry.
And like extremely careful about like the things that we built in
about making sure that we only Built the most minimal possible
solutions. One of the things that we
consistently found though. Was that while there was a lot
of interest in payments and around scaling payments as a
market. There are actually very few use
cases that scaled associated with payments more generally and
in and you can actually, if you look out a the space right now,
you can actually it's pretty easy to tell that like payments
actually hasn't taken off crypto payments.
Surprisingly the At the fact that many people have had a
thesis about it for, like, almost.
Okay. Now, for some reason payments
haven't actually achieved a lot of Market penetration in the
broader audience compared to things like defy and governance.
And so, we ended up realizing that like, the solution that we
were building. The technology that we were
building in researching, was not necessarily a technology, that
was mapping very well to the real needs of users.
And, and at the same time, what we realized this is actually
very fortuitous, but in 2020, we there was a Know if you remember
this, but there was that there was a Bake-Off that read it
created is it was like a scalability Bake-Off between
like the different LT Solutions? Yeah.
I told you I'm but that. Oh, yeah, so we actually, this
was actually the time when we were having this kind of, like,
question these questions around payments, it around like payment
related, use cases. And one thing that we saw was
like, in this Bake-Off. This was sort of like a
quintessential example of like a decentralised ecosystem that
wanted to build on top of scalability.
So sure and what we found was like all like looking out at all
of the other submissions that have been put in place all All
of them operated like chains and we did, we had like, we
basically have two would have to would have had to go and build a
very custom piece of infrastructure for Reddit,
specifically designed for their use case and even then they
would have been like gotchas and things like that, that we have
to worry about where as you know, which is nowhere near as
like nice is just deploying the exact same contracts that you
have on top of ism orbitrim. Right?
And and I think what that helped us realize was that maybe maybe
we were just on the wrong track, right?
Like if we're trying to compete, Eat with Roll-Ups as a state
shown at work, to try to scale something.
That is not payments. We're not going to succeed,
because we would have had to do a ton of custom work.
But at the same time, the secondary problem that we saw
and this is actually just really, really lucky.
We just sort of said, okay. Well, you know, there's all of
these projects have this like big drawback, which is, you
know, once you're locked once you're on one of these
Solutions, it's really difficult to get in and out of it.
It's really hard to get between these different solutions.
Why don't we just It our exact say talent for structure and use
it to allow people to send Community points, right at
Community points, between these different options.
And that's what we did. We actually submitted an
alternative solution to the scalability back off.
We obviously didn't win because we didn't even use, we didn't
even technically participate, but we actually did get a lot of
attention, both from the community.
And also for Reddit, where people looked at.
And, and also from all this giblet e-solutions because
people realize, oh wait, you can use State channels to use other
kinds of technology to To allow for seamless, bridging seamless.
Communication between at the time, it was like optimism
arbitrary mxd, polygon scale and a bunch of other tests Nets.
So yeah, it was kind of cool that actually we sort of did it
as a like let's not play a game that we know that we won't win
thing. And you know, we kind of felt
like we had to submit something but we didn't really know what
so we did this instead and it turned into US stumbling upon
this really really big. really, really interesting Market that
at the time, no one else had really even thought about Yeah,
I mean, let's talk about the history of interoperability in
the history of bridges in just a little bit, just as an aside.
Why do you think payments has never really taken off because
it seems like it's such a low hanging fruit, right?
Yeah. Yeah, that's a really really
good question. I think that's there's a lot of
reasons. The first is the first and main
reason is that the payments Market itself is just incredibly
complex. And there's like these really,
really deep and trench Network effects associated with the
existing structure of like like like payment facilitating Banks,
payment processors, Visa Mastercard, and other like
payment systems, that makes it really, really difficult to Into
this market and and like a functional way outside of
outside of like places where that are just like completely on
backed. And I think, I think that made
it quite difficult at the time because like, you just had a
really hard time finding markets of users that actually cared
about crypto payments, you know, we ran a bunch of experiments in
like gaming. We ran a bunch of experiments of
content. We write a bunch of experiments
in like countries, where there were large percentage of people
unbanked, and, like, we kept running into these, like,
problems associated with, like, people being like, Okay.
Well, you know, you're having to go through all of this
additional friction to get crypto in the first place.
What is the benefit of doing this versus?
Like finding some other mechanism to pay?
And like why not just use mobile payments or why not just use
like in-game payments, things like that.
So I think I think the the real reason is really just that like
it's the same reason why we can't just like fully replace
all voting with crypto voting, right?
It's, there's some of these there's there's some of these,
like, really obvious use cases, that people always talk about
like, oh, well, someone should just build a voting system on
top of blockchains and then We can just use that everywhere as
an alternative to existing building and it gives
transparency and things like that and it would but it would
only work if like it's like not intrinsically a 10x Improvement
against what exists right now. And and because there are these
entrenched Network effects with what exists right now.
I don't think that we'll be able to get to the point where it's
like worthwhile to make that kind of upgrade for any user
unless they already are on-boarded into crypto.
So, you know, I think for that reason, things like defy, our A
much better like initial onboarding mechanism because
it's a 10x Improvement against what exists currently.
Because, as a user, your you have access to like, being able
to earn a lot more money online. Then you would have ever been
able to, in the past, right? Like defy has on-boarded large
parts of Southeast Asia, you know, after like sub-Saharan
Africa Latin America because in a lot of those places like
contributing to different ecosystems or participating in
airdrops, things like that, actually means life-changing
money, like that's that's And access that you would never have
had before whereas participating in like, getting on board into a
payment system or two voting system isn't necessarily going
to be as big of a change to you. Would you venture guess when we
will see the first large-scale crypto based payment system.
I mean, technically the it already exists technically,
there are some mechanics some instances of like large-scale
crypto based Payment Systems. The graph is a good example,
like we worked really closely with them when you were doing
stay Channel stuff because they're like, I think there are
the single largest operator of like a micro payment Network in
the world right now. I believe I mean, depends how
you classify micropayments. But at least at the scale that
they're doing it and and then similar to, you know, similarly
like Sia file coin and many others are also like working.
On building out their own Mystic.
Bespoke likes a child, the plantations if they haven't
already. I think I already has one.
And and so I think I think it exists.
It's just like it's just like been a much slower bird.
I would expect that. This would happen for
micropayments. It'll basically happen when the
like web 3 infrastructure. Boom of like different kinds of
web three, protocols, Computing networks and resource networks
scales. It hasn't scaled yet, but it's
starting to get there. And then I would think for like
consumer payments. It's not going to happen until
like everybody has a crypto wallet.
Yeah, I think that's a faggus. So let's talk about the history
of interoperability because basically that's been one of
those Arenas of web three that have actually gathered a lot
more traction than initially thought.
Right. So basically back in the day,
kind of the idea of different blockchains kind of talking to
each other and having like trust as Bridges and stuff.
This seemed like magic and I remember, even even hearing
about, you know, Jays I IBC Vision back in the day.
They seemed like I asked myself. This is actually feasible and we
obviously it is feasible and just clear to to us now, but it
kind of, let's talk about. Let's talk about the history.
So basically, I mean if we kind of look back, the very first
kind of bridges. So to say, we had where, you
know, the the wrapped, Acid specific Bridges, right?
So things like rap Bitcoin and so on.
Well, technically the earliest ones were actually the atomic
swaps. So like, you know, BTC, LTC
Atomic swaps, things like that. Yeah, Fair Point.
The acid specific ones. Do you remember them taking off?
Kinda, so like, technically shape-shift took off and
shape-shift is in theory, an atomic subsystem Atomic swap
like system. They do some other stuff.
But, you know, there, that was like, the idea behind it.
There were, of course, a lot of, like, proposals around using
lightning that extending lightning to things like stellar
and like Litecoin to do swaps there.
And then, and then, once the theorem came along the idea of
like, oh you can have like I think in theory when the theorem
came along, that was like Windows.
The transformation because people started thinking about
like instead of just okay, let's swap BTC for eith which has a
whole host of problems associated with things like, you
know, front-running and Free Riders or free option.
Sorry, the instead the conversation turned to okay, how
can we have a representation of BTC on ethereum that can then be
used and that's I think part of when things got a lot more
interesting as well. I think the earliest projects
there were things like BTC relay.
And a couple of others. And like, it's pretty
interesting because like, the things that are really taken off
her are like WBT, see, which is, of course, like a fully
custodial BTC Bridge representation by B.
Co, I think a part of the reason why a lot of these things didn't
take off is because the need for them wasn't actually as strong
at the time, you know, like the the idea was always like, okay.
Well you can swap BTC for something else like between
these like, you know account like In these like you T XO
style chains where there isn't any like broader functionality,
but the but that that functionality was always like
fully Encompass inside of a centralized exchange anyway, and
so if you were unless like there was like the novelty of like,
okay, I could do this in a trust minimize way, but the the fact
that you could always use an exchange for it was also like
just made it so that there wasn't like a huge Improvement
against that to begin with. I think what's changed in recent
times is that is the explosive growth of the ethereum ecosystem
and like how that has resulted in this, like, fragmentation
across multiple, ethereum, like chains.
And, of course, now, moving to, like, non ethereum like chains,
like, Salona and like Stark where things like that as well,
but largely, it is all Evo compatible at the moment.
I think the, the like that has instigated this like question
of, okay. Well should Common protocols,
especially like Blue Chip. T5 protocols.
Should they just be deployed everywhere?
And I think most of them just said, yes, that should
absolutely happen. And once you do that now you
have this problem where it's like, okay, you have different
rates for these different particles of different chains.
Users now want to optimize the returns that they're getting
users, not want to use applications that run in many
ecosystems, all at once. And now you've created this,
like, huge problem around. Where do users go?
How to use, there's actually do that.
The other piece of it is also, which I think is actually a
little bit into unintuitive is that A lot of the conversation
at least like in the earliest days of this big bridging growth
that happened, which is really it's like in like January
February of 2020. What we saw was that the vast
majority of people that were bridging, were not like ethereum
L1 users. Surprisingly.
It was not people who are already using these chains.
It was new users coming into crypto.
Because, you know, there was just a massive growth of like
end users at the time. It was Users that were
onboarding finding that ethereum L1 was too expensive for them.
And so they were onboarding directly into like BSC through
finance and then going to polygon or onboarding directly
into polygons and going to X Dy or something like that.
And so what we found was like and this is still, the case
actually is like the polygon B, SC noses.
Chain combo is actually by far, the most used set of chains that
people bridge between and and, you know, even a lot of the No
Doubt. Operators in our Network
actually surprised by this because they're like, well we
would if we would have thought that tons of people would be
pitching in and have the ethereum but that actually
doesn't appear to be the case at all.
It seems like mostly people that have their funds on ethereum are
just like not touching them as much as they possibly can.
Do you think that's just because every time you touch them, you
incur horrendous gas fees or why do you think that is?
I think that's a big part of it. And I think the other part of it
is also that like one of the things that made a theory of so
interested in an interesting and exciting in the early days was
just that it was like, it was very experimental.
And like so there was a lot of room for people to go and just
build things and like, try new things and even if those things
were not gas optimized, or were really poorly builds or had like
problems. It didn't really matter that
much right. People were just like playing
around. There is like a fun.
There's just so much like it is so much fun for developers
Builders to be able to like play with things.
And I think that element was lost when when prices the price
of everything on ethereum, escalated significantly.
And what we found was that a lot of the new developers that were
coming, the ecosystem that wanted to do the same thing that
early developers did on E Theta, 1, which is just play, have a
good time, like, play with building things.
They all were doing this on polygon and BSE all of them.
And so, what we found was like, it was really just like a lot of
completely new people. Like we most of the, the support
request that we had, in our ecosystem, were actually
associated with. How do you speed up,
transactions in meta, masks? Not anything related to like
bridging itself. Yeah, super interesting.
When you think about like the different bridges that you can
have. Can we look at them kind of by
the thing that they Bridge, right?
I mean, it's basically there's, there's yes.
He 20 tokens. Yeah, 720 ones 1155.
There's message Bridges. So how do you think about that
just from, you know, zoology kind of point of view?
You. Yeah, yeah, that's a really good
question. So the most General primitive is
just like arbitrary message, passing, right?
It's like how do I get some data from one chain to another
change? Ideally, trust this lie, which
basically means ideally without introducing additional trust
assumptions against those that exist on the underlying chains.
And of course, that is an extremely difficult thing to do.
And like there are really very few.
If or perhaps no constructions that fully achieve this.
But because that is like the base layer you do sort of End up
in a situation. Unless and I want to carve out
an exception here, which is atomic swaps which are like a,
very special case scenario, but for anything else, the idea is
like, you sort of need to have this ability to like pass around
data to begin with before you can do anything else.
Now on top of that. So that's, that's kind of like
the message passing layer. Now on top of that, what you
will use usually have is like, you know, other layers for other
kinds of bridging. So, you know, you could allow
for some of wrapper around the arbitrary message passing that
allows you to Mint and burn and if Is it now that becomes an
entity Bridge? You can allow doing the same
thing with your see 20s, and now that becomes like a token bridge
and that specifically is a token bridge that allows you to like
minted burn wrapped representations of that token.
And then and then the last piece that kind of like potentially
sits on top of all of this is like the liquidity piece.
So and this is this is a big part of what connects does.
And, you know, we'll talk a little bit about like connect
stand and Nomad which is that like arbitrary message passing
Network that we sit on top of. But You know, liquidity,
specifically refers to, how do you ensure that the user gets
the correct asset on the like that they need on a given chain,
especially given that in many cases that correct asset may be
different than the minted representation that you create
through an arbitrary message, passing bridge and and that is
something that requires, you know, things like liquidity
pools in order to make sure that you bootstrap liquidity in the
asset that you need to lie. Transmitted to the user.
That's a lot to unpack your so maybe just rewind just to make
sure this is absolutely clear. So basically when I take an acid
say from from polygon to be a sea via specific bridge, that
that acid that is de facto minted.
At that point in time, on BSE is basically, is that acid the said
that acid underscore The bridge that it came over and it's not
fungible with that asset that lives on that chain natively or
came by means of another Bridge, right?
Exactly. So, the problem here is
basically like, when you have an acid representation on a given
chain, if it's the canonical asset, what makes a very first
of all, there's this bigger question of like, what makes
this asset, the canonical asset. Generally what we say is like,
okay, it's the most widely adopted as it may be.
It may be like in polygons case. It may be the acid that's coming
over the polygon POS bridge. In other cases.
It may just be the asset that happened to get the most
traction. So like on Avalanches like u.s.
Dce which is like the Of USD. See that everybody.
Everybody just started using and now it's the canonical one.
The second piece. There is a second question.
There is like, who actually owns the authority, the the
permissions to create more of this canonical representation.
So typically this will be like in polygons case will be like
the the like chain, sponsor Bridge, like the polygon POS
bridge and avalanches the Avalanche bridge in Roll-Ups.
It'll be the role of bridge. And so it Roll-Ups actually have
like an easier time with this because they already have a
trust minimize. Bridge.
That is the canonical one and nobody can ever dispute that.
But if you if you don't have one dedicated bridge, that is meant
it minting like a canonical token.
You don't have necessarily economical token, begin with
things, get a lot more confusing.
So what happens if, for example, you have another Bridge, like no
Medford since that, it's like minting and acid on polygon.
The minted acid on like that Nomad will likely not have the
permissions to increase the supply of the polygon POS.
Representation. And so instead what Nomad would
do is they would have to create their own representation, which
is a pointer to wherever this tokens were first locked on
whatever chain. And, and now you have an asset
that is Nomad wrapped polygon u.s.
DC and then you have another asset that is polygon.
POS USD. See the polygon POS you see, you
SDC is the canonical one because it is used widely across all of
the default applications on polygon.
And so as a user you now have this like user experience
problem. Of, I have this asset, how do I
get to the correct asset? Because I can't actually use
this asset anyway. Sounds like mess.
It's definitely a huge headache. How do you how do you go about
it? Yeah, so what we do is wherever
possible, we try to swap the user into their like the
canonical asset, the most widely used acid.
And so this kind of gets into a little bit of the technical
details of like how Nomad works and things like that and how
connects fits into it which you can definitely get into in more
depth, but at a high level with how connects Works currently, we
just basically swap into liquidity pools of whatever
asset is like the most widely used and in the future, what
we'll be doing is we would use so rather, Then swapping
directly between chains just as a mechanism to improve the
usability of connects to end the the experience of running a note
in Connect. We will mint a nomad
representative asset that goes across chains.
This will be like the sort of default asset that is used in
our system. But then at at the the exit
point when the user is about to receive their liquidity, that
will be swapped for some local asset if needed using a stable
swap. So the construction Here is a
little bit similar to something like hop where you know, hop,
basically utilizes the arbitrary messaging bridges on Roll-Ups to
create H tokens, which are their own representation.
And then they swap them at the end into like the the the
Roll-Ups token if needed. How do you make sure you have
sufficient liquidity? When people try to move across
large sums of money or even tokens that you have.
I mean you need to unboard tokens, right?
So you can't offer this for just any token.
You kind of need to know which tokens are coming in advance.
Yes. Yeah, that's definitely a
challenge. I think this is something that
we're still trying to understand the best sort of user experience
around its and developer. Experience around because it's
complicated and it seems to really change based on use case.
What we have right now is the ability to set like slipper
tolerance in these transactions. So, you can, you can at least
like be sure. That as a user, you're not going
to get completely wrecked by so veg, because there wasn't enough
liquidity. And then in Failure modes, what
we do is we just like, allow the developer basically like exit
the users fobs onto, is it funds onto like a given chain and then
have the developer actually be responsible for figuring out how
to handle. Our case themselves and over the
long term. The idea is like, we're going to
try to build a better, taxonomy of use cases.
And, and the way that those are handled from a narrow
perspective or from a like failure mode perspective, and
then find like, default mechanisms to handle those
failure modes, but at this stage, it's like early enough.
It's too early for us to really be able to say definitively
that, like every kind of use case of X-Type needs to be
handled in this way because we just, we just don't know yet.
Yeah, I mean the complexity behind kind of having all these
different flavors of more or less the same acid.
This is actually really mind-boggling.
So in a way you kind of need someone who behind behind the
scenes. I mean, it's kind of like having
this this massive ball of yarn, right.
And someone behind the scenes kind of needs to, you know,
continue. No perpetually kind of order it
and unwind it and make sure that kind of it doesn't tangle too
badly and it actually gets Our stew.
So like on chains or you know, there's there's been like
several waves of chain launches in a lot of the earlier chains.
Like polygon B, SC Avalanche, there were already like chain
built canonical Bridges, right? And like the chains themselves
were like, you know, had lead time to have those canonical
Bridges. Be kind of publicly used before
other Bridges came and started like building hot, creating
their own like representative assets, but a lot of the newer
chains that have launched in this like second wave of L1.
On like L1 releases have things like Moonbeam and at most things
are a lot more messy. So like for example, on would be
monogamous, connects to no matter, technically the default
Bridge. We're technically the official
officially supported bridge, but that, that hasn't really meant
anything because like, there's these are personal assistants.
It's possible for a lot of other projects to come a deployed
obvious systems, and it's actually a good thing if they
do. But what that means is like now
on Moonbeam, for instance. There are also, like, multi
chain. Like representative tokens.
So, any tokens there are seller represented folk ins.
There are sit-ups representative tokens Wormhole represent of
tokens. And, and now it's an extremely
confusing problem for the user. And there's, no, there's no, you
know, even if the Moonbeam team says, okay, XYZ tokens are the
canonical representation. It ultimately isn't even really
up to them. Like, they, it really is up to
the network effects of the applications that are running on
top of this in this ecosystem. So, We have yet to figure out a
good way to solve this mess. There are definitely a lot of
proposals out there to do things like, allow multiple Bridges to
meant the same token, but then that just increases risk
massively across the entire space.
So, we're generally pushing back against things like that.
But yeah, it's a very big, very hairy problem that at the moment
doesn't really have a solution. I want to talk about security
little bit later, but kind of, let's let's talk about this for
a little while longer. So I mean, basically we've seen
this in a similar version of this problem across Texas,
right? So basically, the Arbitrage
opportunities that you have between different dex's that
mean, and the way that the market has solved that is by
kind of having market makers, who kind of, I mean, it in a
negative reading their Jazz. But in positive reading kind of,
they make the market more efficient, because you can kind
of trade across because the prize of different assets.
Kind of normalizes across different textures, right?
Did you think I'm having such radically decentralized approach
to the bridge problem would be a good solution?
Or do you think it has drawbacks?
Yeah, so basically the question is like is it a good idea to
just offload The Bouncing between these different kind of
bridge options and moving basically moving between these
different assets to just the credit providers in market
makers. Who can ensure that users will
get the right asset. And like as a result of that we
we can still maintain like a good user experience while
having multiple charges. I think so.
I mean, I think that's The whether or not it's a good
solution, which I think it is. I mean, I think it is in the
sense that like, it's there really is no other option.
So I do think that like we are headed in that direction
regardless, which is that like there were likely be a lot of
stable swaps and all these on all of these changes that will
allow you to move between these efforts representative assets
and I think, eventually long-term all of these projects
will eventually just like plug directly into the stable stock
so that the user is just getting the right asset on a given
chain. But I think I think that core
problem of like, how do you and determine what the right asset
is is just at the moment just a huge mess.
It's just like an open field right now.
We're like, you know, we and other Bridges or actively like,
you know, chains like Moonbeam are actively Battlegrounds where
we another bridges are fighting for market, share and try to
work towards, having our version be like the canonical
representation. And of course like on our And
it's not the worst situation the world.
If that doesn't happen because we can, we can just fly for
swapping into the right one. But at the same time, you know,
if our whole model is we want to make sure that users are like,
I'm a big part of what we care about is like a globally, trust
minimized option, you know, we really feel strongly that like
the inherent risks associated with bridging.
And with, like cross chain, interoperability are much higher
than even just like change themselves.
There are systemic problems associated with that.
And a lot of the systemic problems are also arise from.
Um, like potential economic failures, right?
Not just, you know, the bridge gets hacked or there's an
implementation baggage or like a like a security vulnerability,
but instead there is economic risk where markets or like the
the economics of bridges could be manipulated to attack them.
And this is simply this is basically what happened, you
know with Terror for instance where you know markets Tara
markets were manipulated to exploit a vulnerability economic
vulnerability in the way in Tara's the entire.
The UST system. And and the idea.
Is that like, Long term. If we want this ecosystem to be
sustainable. We have to build systems.
That remain V invulnerable to those kinds of attacks, you
know, because those kinds of attacks will happen either from,
you know, theoretically Shady while Street organizations or
perhaps governments or perhaps large scale, corporations or
billionaires that want to find ways to extract value.
And so, my concern is like, I don't, you know, on the one
hand. It would be it doesn't really
matter that much if we end up in a world where like, you know,
you're utilizing Nomad to go across Nomad and connects to go
across chains. And then at the, at the, at the
exit, we're swapping into like any us DC or something like
that. The, but at the same time that
of course means that users are now holding any us DC in their
wallets. And so now they are still
subject, always permanently subject to the risk of of any
swap or multi chain. Yeah, I have so many questions
about security and basically how security guarantees kind of
transfer from, but I kind of, I want to save them because first,
I want to hear about Nomad and connects in basically, who does
what and how they interplay and how this partnership came about.
S start with how the partnership came about.
So we you know, we've been researchers in the space for a
really long time working with a lot of like key research teams
that are out there. So, you know, we work super
closely with like and we have word super closely with like,
you know, the optimism. Father is the Arbiter Founders
you can say about etcetera, etc, etc.
And and that I think a lot of people don't realize that that
Community is actually a really small.
So like even though it seems like a lot of these projects are
competitive with one another, we all like share notes.
We all talk to each other constantly.
We all present at the same conferences, research
conferences because ultimately, you know, there is like, of
course, there is competition, but at the same time like we
sort of all recognize that the market for this is so massive
that at this stage. It's like pretty positive some
in, for us, you know, early on, one of our key advisors around
this interoperability piece, was always James press, which
because he is just like one of the foremost people who has been
thinking about bridging for many, many years longer than
anyone else that has a In the space.
Yeah, we had him on for some probably like four years ago or
so. And basically he had just
launched the the Bitcoin etherium auction.
James is awesome. And he's been thinking about
this like very very deeply for quite a long time for a good
reason and he has like pretty nuanced opinions on this stuff.
It's not you know, he understands that there are like
a very big trade-offs and understands that there are such
like a there is room for multiple different kinds of
Solutions out there. And so, I think a lot of, a lot
of the reason that we ended up working with Nomad was just
because of our very deep relationship with James.
And and and as a result of that, also like the the very strong
cultural similarities between the connects team and the
normative which is that like, we're all just very kind of.
We are all people that have been very, very focused on like
producing value in the Space Center around research and
around like building the sustainable public goods that
are actually charged. Mize is actually trying to do
something good. And we are also all both like
teams that care about the same kinds of things that like have
the same kinds of attitudes towards like building
communities and and like, being sustainable organizations, but
then beyond that, I think I think there's also just there
was just like a natural fit as well.
So like we what we found was that over time, you know,
connects historically have been focused on a topic swaps because
we were really interested in just solving the Like Liquor DPS
first before it's I need other things.
Now, of course, our are we really think?
Do you think that the Holy Grail is to be able to do any kind of
arbitrary messaging and also have liquidy built-in?
And and that was something that we were struggling for a while
because struggling with for a while because what we found was
that there was just no really good way to do that out there.
And this is this kind of gets into like the interoperability
trilemma piece which which which I wrote which which which
basically breaks down the trade-off space around Bridges
and it shows that it's actually really difficult to have Any
system that simultaneously is Deployable too many different
chains is supports arbitrary message passing through, is
generalized and, and then also is trust minimized.
And as we were looking at, in this space, what we found was
like, we wanted to find create some sort of either create or
work with some sort of mechanism to do this and the only
mechanism that we found that actually had acceptable trade
offs was Nova. So we we became involved pretty
early, you know, we were been were collaborating closely with
the team for quite a long time. And at this stage, the way that
the relationship works is that like we sort of think of
ourselves, as as the shared stack.
We actually call it. The module interoperability
stuck, which is the species that like it is impossible similar to
like the scalability. Trilemma and modular block
chains is a solution to the scalability trauma there is
because there is this interoperability trade-off
space. It is not possible for us to
just have a single solution that solves, everything associated
with bridging and interrupt. Instead, we need to Find ways to
split out the responsibilities and build a stack of protocols.
That can work with each other, in a limited way, with with kind
of like fixed interfaces and delete fixed delineation of
responsibilities. That could then provide a
solution that actually is as close to Ideal as possible.
So the way that the the delineation of responsibilities
works, is that Nomad provides this, like base layer of
message? Passing Nomad allows you to do,
generalized, communication between blockchains.
Ends with very reasonable Fair, very trust minimized assumptions
like security assumptions and and then but with the trade-off
of needing 30 minutes to do to pass messages between trains and
that 30 minutes is the amount of time needed to like, instigate a
dispute, if, if something if fraud occurs within Nomad, so
that's because it's it's it's inherently optimistic.
That's why you need the okay. So basically exactly so, like,
Nomad in Nomads model, the assumption is Not like in
something like I see where you know, an IBC you have, what is
called a validity proof where you have one chain, like the
validators of one chain are like verifying the consensus of
another chain, and they're doing this for every single message
that goes between chains. But of course, the downside of
validity proofs and this is this is mirrored on to like, CK
rollers. For instance.
Is that your for every single transaction or batch of
transactions, you're having to do this proof.
And so the cost overhead of it is quite High.
The complexity of is quite High. The the like cryptographic.
And like, you know, consensus dependencies of this are quite
High because you have to kind of figure this out for every single
chain, whereas on, no mat in nomadic the other, the other end
of the spectrum, similar optimistic Roll-Ups, where you
actually say, okay. Well, we're not actually gonna
validate anything unless something actually goes wrong.
And so you don't validate like you don't submit proofs that any
given State transition or any given update is valid.
Instead. You just say, let's just assume
it's valid and then wait 30 minutes or wait a certain amount
of time for someone to say. Oh they have a problem with us.
But, but this kind of, this is predicated on the assumption
that there's enough. People are kind of watching this
stuff. Right?
So basically, and this is something that, I mean, if you
look at the past six months, or so with what has gone wrong with
ridges. I mean, I mean the Ronin Bridge.
Heck no one even noticed for like five days and I mean, it's
like I mean, do we have enough analytics to be alerted to
things how many how many? How many You call them watches,
right? How many watches do you have on
these kind of bridges? So right now The Watcher set
Nomad is permissioned. The reason for this is just that
it's like a stepping stone, a progressive.
Decentralization process is the same reason.
Why I like optimistic, Roll-Ups, for instance, don't actually
Implement fraud proofs. So technically they're sort of
custodial but like obviously people recognize that the model
itself makes sense and Nice. That it's a process to get
there. What Nomad is actually working
on right now is expanding that Watcher set.
So to move away, from just like them running, a bunch of
vultures 22, like allowing other people to run Watchers.
It'll still be permission at the moment, but it will be much
larger. And one of the key goals there
is to move towards like unlike with many other systems in
Nomads case. There are already a bunch of
actors that are watching the chain and looking for fraud.
A good example of this is connects notes.
So like I guess like 11 kind of piece that's missing here.
Perhaps this context is like, if Nomad is providing this, like
messaging layer connects is providing liquidity, there
that's just on top of it. And what we do is, we Short
Circuit, the 30-minute Nomad latency in certain cases, where
it's safe to do. So.
And those cases are cases where our nodes are willing to front
capital for transactions. They have the permission to
execute the transaction on the receiving chain.
So basically like it's a it's a nun permission called.
So like something like a, you know, swap swap rather than
something like a token MIT. And then The and most
importantly they do so only when they recognize that their fraud
hasn't actually occurred because they are the ones that are
taking on the risk. And what's interesting there is
that they are actually already performing the function of a
larger. All we have to do is add a
little bit more code for them to like, start a dispute on chain.
But any all of the like resource overhead of them watching for
fraud has already occurred. And we have, I think 131 routers
on our test net for the next upgrade that includes no, man.
So that's already 131 Watchers, that could go live, pretty much
immediately which already, you know, if you assume I think, if
you assume like a tent like a eighty percent uptime for
Watchers, I think the odds of all of the Watchers being
offline at the same time, then becomes like, in the 10, to
minus 20 range or something like that, which is pretty awesome.
That's low. Yeah, as a final Point here,
this actually, there is a live system where this works and has
been shown to work. So like the Ronin Bridge, huh?
Is a great counter example of like why multisig Bridges don't
work and why you need to make sure that you have like, this is
like, it was like the first example of like a roost root of,
trust compromise for a bridge and shows like the, the risk of
having, like, you know, this like permission-based bridging
mechanism where you have keys that have the ability to
arbitrarily meant funds on other chains versus a re vocation
based bridging mechanism like Nomad where you can dispute if
anyone can dispute. If something occurred and but
you're totally right that like it wasn't noticed and I think
that that was definitely like a huge pit failure in.
Like the that ecosystems part that like, there weren't better
analytics around this but a counterexample is like the
Rainbow Bridge fact that happened recently.
So for context, the Rainbow Bridge is a bridge that exists
between near and ethereum. It is a fully trust minimize
bridge and the way that it works is that in One Direction.
It is a fully native Bridge, sir.
Tat Tai DC where I think the near ecosystem is running a like
line of theorem. And then in the other direction,
it is an optimistic bridge and the optimistic Direction was
attacked and the Watchers of the Rainbow Bridge axis actually
successfully detected that an attack had had occurred.
The attack wasn't even like fraud from like the the bridge
updater but was instead in a hack of the contracts
themselves, the Watchers successfully detected the hack.
And pause the bridge. So, basically, stopped any sort
of fall out as a result of, of, like the hacker unlike, with
Ronan or Wormhole or others. So, how how do you incentivize
the watches, right? Because basically, if you don't
incentivize them, basically they can just hire the chain and
grief everyone without any cost to themselves.
Right? So, in that way, you kind of you
would, you would actually end up trading security for liveness?
That is actually the main research question and optimizing
that process is the main research question that remains
to be able to make Watchers permissionless.
The general idea is that you can use a combination of things like
token incentives, and then also like bonds and slashing of those
bonds to be able to ensure that, you know, updaters are penalized
for fraud and then Watchers are penalized for false reports of
Fraud. And The the like there's no real
like material like Financial upside, for a watcher to do this
other than like the griefing Vector of dowsing.
And so, as long as the, the downside risk for a watcher of,
hey, I'm going to lose x y, z amount of funds.
If I've like fraudulently, you know, stopped this bridge is as
long as that's the case. You can be reasonably certain
that. It doesn't really make a lot of
sense for what for like Watchers to do that.
Now, there's there's there's definitely a lot of like
research that is currently in progress around this to figure
out. Out, what are the bounds around
that? Like, how can we be sure that,
like the penalties for this are high enough for Watchers to be
to be disincentivized from like, you know, tossing and then.
Similarly. How do you ensure that the the
rewards are high enough for Watchers to be incentivized to
actually like attempt transactions?
And how do you make sure? For instance, that like, if
there are rewards, it is not possible to front run those for
like, you know, and maybe Bots to front run of those rewards in
the temple, which is which happen.
In the near Rainbow Bridge case subscribed.
Interesting. So these are the kinds of
questions that I think like Nomads researchers are dealing
with at the moment that are the main blockers to being able to
completely open the system up. Quite yeah, super exciting.
For what it's worth. By the way.
These are also the same same research questions that exist in
optimistic Roll-Ups around instead of Isaac Watchers.
So basically seeing that connects basically offers
liquidity or liquidity underwriting on top of on top of
the bridge. How do you deal with?
How do you think about re Orcs And probabilistic finality,
right? Because basically if if
something happens on the chain that you send something from
NPC, three orbs then and you have already paid out the money
on the other check and chain. I mean it said kind of priced in
or do you have It, can you somehow mitigate that Danger?
This is a part of the risk of running routers and text and
this is the this is the risk that we try to mitigate is like
the the risk as a router. Basically, what you're doing is
you're saying I see that there is a slope slow, 30-minute
transaction that's coming over to Med.
I see that it is possible for me to complete this transaction
faster and I see that I have enough liquidity to do so and I
can earn a small amount of feast by doing that.
And so we sort of like, mitigate the, the latency trade-off of
nomad. We also ensure that the User
gets the right asset that they need.
And we make sure that and like the only kind of the the, I
guess the trade-off for not necessarily the trade-off but at
least like the the decision Matrix around doing that is then
based on what is the risk to the router that is actually making
this happen. And that, that risk profile is
based on, You Know, How likely is it?
That fraud has occurred at Nomad?
What is the risk of some sort of like chain event like a reorder,
51% attack and And what is the risk of like some sort of
failure, like some sort of failure mode on the receiving
chain that results in like me as a router, not being paid out in
the rear case at the moment. What we just do is, wait, you
just wait for enough blocks. We've done a lot of like
statistical analysis over the course of the last year and a
half to just like just because we've been live for that long to
be able to understand how many blocks we need to wait on each
chain, and and generally, what we found is like the reorg risk
is really only biggest. And like Fast chains that are
have like very very low fees like BSC and polygons where you
can see like deeper yards and on most other chains that isn't as
much of a concern. So usually waiting about two
minutes everywhere. It appears to work quite well.
Well, we'd like to do is move towards a model where we
actually don't need to wait for a reorg risk, but that's quite
difficult. So, some things that have been
talked about in our community. For instance, are the
possibility of building some sort of reorganize words where
You actually just like have users underwrite the risk of the
reorg risk of a router and like because you can detect like re
ords in on chain within a contract.
You could actually deterministically, payout that
insurance bound to a router, if, for every or occurs, but the
again like the, this is something that's been like
talked about in theoretical terms.
But like the economics of it are something that we'd need to
figure out like, basically, what is the likelihood of reorge?
What is that scale of risk versus?
Reward look like and what kind of fees would you need to charge
as an insurance provider in order to mitigate the massive
additional risk that you might have on some other chains?
Yeah, I mean as soon as as soon as a theorem and possibly a lot
of other evm based chains move to proof of stake, I mean, the
real risk, I mean, it doesn't fully go away but it reduces
greatly right. So reduces.
Yeah, and we've been working with like we've been working
closely with the polygon team for instance on on on this
problem to try to talk them about like what are ways to
think about this. I know that this is like a huge
party for them as well. But like they are trying to
work. Improving their own consensus
mechanisms and the way that like nodes operate in their Network
to be able to reduce the rate and depth over yards as much as
possible. But yeah, it's definitely it is
definitely a problem right now with problematic finality and
the solution of the problem is just for us to wait longer for
routers to wait longer long enough that they are
comfortable. Quick.
So how do you guys think about Capital efficiency?
So basically, if you if you move, if you're kind of
liquidity, underwriter this kind of entails having Capital at
hand, to kind of pay people out. So, how do you think about not
having too much on anyone stockpile?
Camera person sees a really interesting question and
problem. Like the ideal sort of scenario,
which is what we had originally tried to optimize for was like,
you have a certain amount of liquidity available in each
chain, and then you're just like, utilizing that pool of
liquidity to do transactions. And there's no additional
liquidity that's required in. There's no lockups of liquidity.
That's required and so our existing system, you know, the
kind of V one of our interoperability Network.
Does this thing where like you, you know, you send transactions
to a router and through an atomic swap.
It, the router receives funds on one chain, and then they give
you funds on another chain. And in theory, this is the most
like Capital efficient option, but what's interesting is that,
there's a capital efficiency and then there's Capital
utilization. What's interesting is that like
the utilization is actually not that great even though, even if
the efficiency is great. And the reason for this is that
while the liquidity, you know, say you're transacting like
currently there's a lot of people that are, you know,
transacting getting out of FTM and go.
The chance to say you're going from FTM to polygons while the
the liquidity that a user sends, an FTM is immediately usable by
the router to send a transaction the opposite direction.
What we found is that in many, in most cases, the the movement
of funds between chains and the, the patterns by which people
tend to rotate between chains are unidirectional week to week.
So, you know, the chain may change.
But like everybody will flood to it given chain, or float away
from it. Even China in a given week and
and the difficulty with this is that now you end up at least
with what exists, currently you end up with, like liquidy
actually, just piling up in a, given on a given in a given
place. So like, for instance, you know,
tons of the QWERTY piles up on FTM because everybody's trying
to exit that chain and in order to fix that, in order to make
sure that that Capital, you know, wild that capital is
usable by someone who's going into FTM because the demand for
going into fdm is low. We want to we net then need to
have the secondary problem of. How do we get liquidity off of
FTM and to somewhere else? It's more likely to be used.
It's a utilization of that capital on zippy quite low.
What we ultimately came to the conclusion of was like, it's
actually better for instead of you know, it's better for us to
actually take a hit with capital efficiency if we can increase
utilization and and what we decided was to move towards this
model where routers and our Network send and receive capital
on the same network. So the sender receive Capital
the same chain so that they don't have to deal with this
process of rebalancing. And, and the process of running
a router becomes like, As possible as fast as possible,
they could, they can just, like, sort of turn it on, put it, put
liquidity in and then just like, let it happen.
And this results in the best utilization, because routers
don't have to think about, you don't have liquidity piling up
on chains that are not being used.
And the trade-off here is that now there is a couple efficiency
problem so or not really a problem, but you have a slightly
reduced Capital efficiency. So now what happens in our
network is like you have this the base layer of this whole
process is Is the transaction that happens across chains with
Nomad, where you burn a nomad representative acid on one chain
and then mint. Another node representing office
acid another chain, but in order to make that process happen
faster, the router needs to, you know, basically like avoid the
30 minutes of waiting for the user.
The router now needs to take on that 30-minute lockup.
So, the router now has their Capital efficiency reduced
because they are there. Their capital is, is locked up
for 30 minutes, every time they use it.
And then second then, in addition to that.
You now also need user-provided kind of passively provided
liquidity on each chain in the stable swap that that where if
needed you are swapping from The Nomad representative asset to
the canonical asset on that chain that said, I think because
of the new mechanism we actually will end up with much better,
Capital availability and utilization and also probably
much better pricing than the reason for this is just that the
price curve. Like, basically the incentive to
rebalance the system. In this case, what rebalancing
means is basically swapping assets back into Nomad a
flavored acids and sending them in the opposite direction to
another chain, to basically generate more Nomad.
The critic, their, the incentive to do that is now concentrated
in the stable swaps on each chain.
So the pricing is concentrated, which means that you have the
best possible pricing, that least amount of slippage versus
having, you know, each router have their own pricing curve at
things. Oh, that and then, in addition
to that, while there is a lock-up of funds not lock up is
actually relatively small compared to the amount of the
possible utilization of those funds and the frequency with
which you could rebound sit in the past.
So, for example, say, you know, pessimistically say like The
Nomad lock up, takes a full hour in case we decide to do
batching. I think so that we're not at the
moment, but say we do that in the future, even if you do, even
if it takes a full hour, if the network has Say the network has
a hundred million dollars of the corridor.
Currently. We have about, you know, forty
million dollars of the QWERTY. So say the network has 40
million dollars liquidity. That is that is locked up for a
maximum of one hour. Every time it is used utilize
that means with 40 million dollars of the QWERTY you could
do over a billion dollars of daily volume.
So that's far more Capital should than many other things in
the space anyway, so at that point where like, okay this this
is this makes sense from from a efficiency and utilization
perspective. What's the fee you take in terms
of basis points? Yeah, there's a there's several
different kinds of pieces that work.
There is a fee that routers take for the lock-up of the clarity
and that is five basis points over time that may reduce or
increase depending on like the network Dynamics and things of
that. We haven't quite figured out
yet. But we have found that five
basis points is like usually about 10x cheaper than most
other options out there and and in even if it isn't it is
definitely significantly cheaper.
It is definitely the cheapest option by far out there at the
moment. And then, in addition to that,
there are two other kinds of fees.
So there is there are the lp fees for the stable swaps and we
don't quite know exactly what those will be yet, but that will
be like a small fee that is paid that out to the the passive LPS
of the stable Swap. And then, in addition to that,
of course, like the slippage in that stable swap.
Generally, we expect these to be fairly tight because these are
all using, you know, stable swap AMS.
There are highly optimized for this.
And and generally speaking, this is Passive liquidity.
So we expect that users. It's like much easier easier for
us to bootstrap the per day. When users are able to passively
LP. The last kind of fee is gas
phase. So users need to pay the gas of
the transactions that they do on both the sending and receiving
trades. They pay this all of this.
In the ascending chain asset, sending chain, like native acid.
And the, the idea behind this is that like we realized in the
past we have users, pay gas fees from You know, the transacted
asset. So like you SC.
See, for instance, if it's going across chains, when we realized
is that like if we end up having long tail assets, it may not be
the case that, you know, re layers and other other like
service providers of are willing to accept fees in XYZ long.
Tail asset trick coin that doesn't even have like a market
price. And so, what we decided was that
the the most acceptable form of asset that we can be sure that
users will have and that re layers and other service
providers will be willing to accept.
Will always be the sending chain native asset and the user
experience of this is kind of nice as well, because the
developer experience is kind of nice as well, because all users
are doing is that they're just paying some additional gas fees
on top of the gas phase, if they would already paying to do a
transactional that chain and similarity, similarly, as a
developer, you are just, you know, making sure that the user
pays this additional fee and then monitoring and bumping that
fee. If needed, you know, if you need
the transaction to go through faster or something that on the
receiving chain. But I mean that sounds like
really good business model though.
So, I mean, basically if you I mean I'm talking about the five
basis points for the liquidity provision for the half hour.
Right? So basically if you kind of if
you had like perfect Capital utilization and you that meant
you could kind of have a billion dollars of volume day and
basically you You got your your risk management right to that
basically wouldn't be to paying a lot for that that that's like
five basis points on the billion dollars is like a half a million
a day, right? yeah, there's a It is a really
lucrative model and it is extremely low risk.
So this is a way for people to run infrastructure and get an
extremely low risk, like potentially.
I mean, of course, it's demand-driven.
And I think like the demand of the network ultimately is going
to be what the results in returns, for the router
operators. And basically, the ratio of the
demand in the network to like the amount of liquidity provided
by router operators, but at the same time, like in a divot
demand-driven scenario, like, you can easily get like 50 plus
percent on any asset that you're providing liquidity.
A pra PR, if you are. So, that's crazy.
Actually would be a PR. So, it's actually even more apy.
Wow. So let's talk about, we're kind
of over time already, but there's one thing I really want
to cover. So let's talk about the user
experience. So I mean, item ately, what you
want, is the user shouldn't have to know which chain there on.
So, I mean, so basically, if I Want, I should go to adapt and
it should just work and I mean, especially with the defy
Primitives. We've kind of seen in the past.
How is composed ability of those defy Primitives other Primitives
to be honest? And bridges.
How's that gonna come together? Because it seems like too
difficult problems. Is this a tractable problem?
Yeah, that's a good question. I think what we're experiencing
right now is like the like basically what we need to go
through this transition from Application like, decentralized
application development going from being like a something that
you do in like the synchronous model where everything runs on a
single chain and I'm like, you can be sure that like you have
results within the same block for anything that you build
versus moving to an asynchronous model, that is more similar to
how web applications are built more broadly.
And and I think the difficult part will be figuring out how to
make that transition happen with whilst making sure that the
developer experience and user experience remains as similar to
what exists is. I definitely think that like, I
definitely like our thesis is always been that most users and
users, especially are not going to really care at all about what
chain, they're on their, they don't want to.
And like really, they're just gonna want to use an
application. And so if you, if you're
operating under those assumptions, then it should just
be possible it. You should move towards a world
where if you're building an application that application to
be able to, like, accept transactions from any chain, and
should be able to potentially even have like, liquidity
Bullseye, multiple chains that are connected to each other.
I think that's possible but it will involve like a transition
that we are trying to make happen right now, which is that
developers are going to have to move to a mental model where
they are not necessarily receiving the results from a
given transaction immediately there.
Instead having to do what you currently do when like building
an application with JavaScript. For instance, where you make an
asynchronous transaction or asynchronous call to another
function. That's just another process of
living somewhere else on the internet.
And you don't know when you're going to get response.
You don't know if you're going to get a response to.
So now, To have handlers for this, you need to have an error
Handler. That handles.
What happens. If you don't get a response, you
get an error. And then you also need to have a
callback that, or at least a callback Handler, that that
basically is executed when the return data comes back from
another chain, which maybe at some point may, you know, given
Nomad latency be like 30 minutes or so, in the future.
But yeah, it's a good question. I think like, it's going to be
quite interesting to see how this stuff plays out generally
from our - what we've seen is that, like most, if not, all
user-facing, interactions can be short-circuited by connects.
And so those can happen in under two minutes.
And so what that means is, like, if you are a user that's like,
trying to use you to swap another chain, or you're trying
to just like, get the best say, for example, you are using Paris
off, and you want to get the best rate across all chains.
Paris walk can actually, it's like create transactions that go
through connects that aggregate all of their liquidity on
multiple chains all together and that can happen in two minutes.
Because the the, you know, the the decks calls on each chain
are on permission and given that that's the case.
Like we expect generally that that's going to be an acceptable
user experience food. For for most users who are used
to like using web applications and dealing with that kind of
agency. And and we think there are ways
to kind of like, how is that latency?
Like at least a latency increase from being like 0 seconds to 2
minutes in a way that makes sense.
For users. You can show them like
transparency. You can show them like connects
can reach our Network, explore to show like track the
transaction life cycle. And if something goes wrong, you
could surface, that really accurately.
Whoo-hoo. So I didn't tell us what's
what's next for connect. So what, what do you plan to get
done within the next year, or so?
Yeah, the two biggest things. The team are is focusing on
right now are the the launch of the a mark upgrade which is the
upgrade that incorporates Nomad and moves towards this like,
generalized messaging pattern. We already have that upgrade on
Testament, or I guess there's three big things over from since
we already Have this upgrade on test that there are a lot of
people already building against it.
I think we announced the tested publicly last week.
And since then, we've already had 131 router setup on the test
net. And then about 15 thousand
transactions, which is incredible.
It's mind-blowing that so many people have been interested in
building on it and it experimenting with it.
So, we're super excited about getting that live as fast as
possible. And we, we have audit scheduled
to begin starting in about think about a week now, so, it should
be. You like first like its second
week of of June and then running until like the start of July and
we should go live shortly after the other two main pieces.
So that's that's a big part of the focus of like the
engineering team and protocol team at the moment.
And then the other two big pieces.
Are we have a contributor program?
That is ongoing. This is a way for people to
start getting involved with working with the Canucks
ecosystem and a big part of his that of this is that we want to
take existing processes around, you know, running the router
ecosystem in the growing it. Running the community and
growing it, and things like that and and spend them out to the
community entirely. You know, like we want it to be
the case that like our community is self-operating.
We want it to be the case that like, you know, routers or
self-organizing to apply for Grants.
They are working internally to improve the experience of
operating in a router and like onboarding new routers and
versus the core team doing everything.
And so that has already kicked off.
There are there's absolutely room for people to participate.
So If you are a person outside of the US and you are interested
in working with connects, or at least just interested in
participating and being involved.
You can sign up at contribute connects to the network and and
or tokens to do to basically work on helping us build this
ecosystem. And then lastly, the last bin
main focus is of course, our token lunch.
So we announced about a month ago that we are.
We are heading towards a releasing, the next token, which
is going to be a governance and stinking token in our Network
there. Also other kind of token back.
That we've been experimenting with and thinking about but we
want to be like very conservative with the way that
we Implement them because it's really hard to take back a token
model once you've implemented it if that took him out as
Incorrect and and we really want to make sure that there's a lot
of like Community input. Once the Dow goes live on it,
but we're currently expecting that to go live within the next
like month or so. We're currently working on like
finalizing things like airdrop allocations finalizing.
Things like, you know, the fight like the Latin remaining legal
pieces and things like that and like the rollout of the token
itself and how it will be distributed.
And of course, given market conditions and things, I noticed
we're thinking really carefully about how like making sure that
we that, you know, community members are like treated fairly
and that that, you know, people are getting materially rewarded
for their work or materially like compensated for, for the
things that they do in the ecosystem both now, and after
the Dow goes live as much as possible.
And that, you know, the, the market, you know, may end up.
We may end up heading towards a market or things like that in
the future. Whoo engine sounds like exciting
times. Yeah, looking forward to see.
None of us are sleeping. What comes out of connects over
the next couple of months. Yeah, and it's been a pleasure
to have you on. Thank you so much.
I really appreciate it. Thank you for joining us on this
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