Alchemy – A Powerful Developer Platform and API for Ethereum Apps #364

Transcript

this is epicenter episode 364 with nikhil viswanathan [Music] hi i'm sebastian and you're listening to epicenter the podcast where we interview crypto founders builders and thought leaders on this show we dive deep to learn how things work at a technical level and we fly high to understand visionary concepts and long-term trends if you like epicenter the best way to support us is to leave a review on apple podcasts if you're on a mac or ios device you can do that by going to epicenter dot rocks slash apple

today our guest is nikhil vishwanathan he's the co-founder and ceo of alchemy alchemy is a platform that provides a suite of developer apis and tools for ethereum so running and maintaining an ethereum node well it's not that easy especially if you're doing that in a production environment where you might have thousands of users depending on those nodes to use your app and over the years we've seen several services enter the space that provide apis like these infuria is probably the most notable example well alchemy came around about two years ago and they just came out of stealth mode so you can now go to their website create an account and start using the api right away and what they do is they obfuscate away node infrastructure and they offer a suite of tools that

make it super easy for developers to just start building so their api provides all of the endpoints that you would expect from a vanilla ethereum node but there's also all these other things that they offer that you just don't get out of the box with a vanilla node so for example you can make an api call that will pull up all of the tokens and balances available on an address that's something that would take you know lots of time to build if you were doing that on top of a vanilla note you'd have to build that infrastructure yourself they also provide access to the trace module in the open ethereum client or previously known as the parity client and they have monitoring tools with usage analytics which is really useful

for a developer and another cool feature that i really like which is a notification api for mobile apps so if you have say a wallet for example and that wallet has to send you know a notification to a user when a transaction completes or when they receive funds on an address for example well they have the api that allows you to build that into your app really easily so i really like alchemy because i mean generally i'm just a fan of developer tools that make it easy for people to onboard and build on a platform and if i was building in an ethereum app today i don't know if i'd have the patience or the skills to set up you know the node infrastructure and the apis for my app so i can definitely see myself using something like this to build the

prototype and even take an app into production so i think having more services like this is a really good sign for the ecosystem because it shows that there's a certain level of maturity in the space and it just allows developers to come in and start building apps on ethereum without having to learn all of the intricacies of running and maintaining infrastructure i do have some concerns however about services like these creating central points of failure in ethereum and this is a concern i have not only with alchemy but other apis validation services node providers in general so on one hand i think there's a natural tendency to move towards more services like these because it creates a

more robust infrastructure for the apps in the ecosystem and it just takes away a lot of overhead for developers but on the other hand i think it would be undesirable to end up in a situation where let's say 80 or more of the apps in the ecosystem rely on one or two services like these i think that in a situation such as this it would be reasonable to then ask the question what's the point if most of the apps and services in d5 were relying on a handful of services that could potentially shut down or censor transactions for example so i think this is something that should remain top of mind and you should be part of

the ongoing conversation in ethereum when it comes to the ecosystem that we want to build and i invite companies like alchemy to also take part in that conversation before we go to our interview with nikhil i'd like to tell you about a free webinar that will teach you how to get started and build sophisticated applications on the platform this is suitable for both enterprise developers or independent blockchain developers it's happening on november 17th and i'll tell you a little bit more about it later on during the interview but for now here's our conversation with nikhil vishwanathan [Music] we're here with nikhil vishwanathan thanks for joining us today thank you for having me we've been wanting to

have you on for a little while now alchemy has been in the space for somewhere around three years i want to say and recently the company kind of came out of stealth mode like for a while it was i remember it you know looking into alchemy like in 2018 and it seemed a bit stealthy and you know like you had this like i remember there was still like this you know contact us to use the platform kind of thing and now it's like a full-blown developer platform that you can create an account like i did that before um during this call and like play around with the with the tools and everything and so yeah tell us a little bit your background and how you became involved in the blockchain space yeah absolutely so quick background so i actually grew up in a small town in

texas that no one's ever heard of but you know there's no building over four stories tall and everyone drove a pickup truck it was super fun came to stanford did my undergrad and grad in computer science machine learning artificial intelligence and had a really great time absolutely loved it always knew i wanted to do small company startup stuff ironically over the summers i ended up doing the exact opposite which was product management at google facebook and microsoft and i had started a couple of companies in college post college you know i really thought about my life and i realized i was like what i want to do had one of those you know one tenth or one eighth life crises thing and thought about said you know what i want to do with my life and i think when i think about my life personally

the way i measure it is on two axis your x-axis is how many people's lives do you touch in your y-axis is how deeply do you impact their life every day and it's basically the number of people times the depth of impact and for me that that kind of x-axis was always obvious never before in human history could you press buttons on this magic metal box and build something that every person across the planet used right and that it's so crazy that we live in a day and age with computers with software with internet and blockchain we can build products that affect everyone around the world and this wasn't possible 20 years ago when you think about the major shifts that happened in the world you know before 20 years ago the major forces that govern our world where countries government religion like these kind of

things and today it's technology right technology companies the facebook the google the youtube instagram have a bigger impact than essentially any country in the world so for me that was you know from a young age i loved computers i knew this is what i wanted to do i had built a bunch of things you know at this point in my life probably built like 50 60 different products since i was in sixth grade so that was just something i love doing i love creating i love making things and the y-axis for me was really interesting and we had you know how do you really have daily impact on daily positive impact on people's lives and i'd gone through this kind of rough period post-college where i missed all my friends i was really lonely and broke my long-term girlfriend we had started

this company but it wasn't working out and i i really thought about it i said you know what is the number one thing that determines your happiness on a daily basis and for me that was the people i was around right imagine that time when you're surrounded by all these incredible amazing people and and you're just like truly happy and i said you know i really want to recreate that and if i can do that for every person on the planet that that would be amazing and everyone was like you know that's crazy it's so impossible to do but if you could do it that would be the best thing ever so we spent several years my co-founder actually my same co-founder with alchemy joe who we met at stanford ta in the database class it was funny because we take the database class and normally

it's an easy class to ta because we have like 100 students it's really fun it's really easy that quarter we just they decided to say hey what if we turn it to open it up to anybody in the world can you do the class turns out 120 000 students signed up for the class and i remember staying up the night before writing code to integrate pdf certificates and all these things so the the story is the next quarter that became coursera so we're joe and i were kind of like the first unpaid employees of course there so we met there um we've been working on products to make you feel like you live with your friends we built a bunch of different products it's really hard it took a long time and nothing was working we built this one app we thought no one would use it

and suddenly like it becomes a number one app in the app store on social millions people around the world from page numeric times it's kind of this crazy story which i'm happy to go into but during that time we had seen so this was around 2015 to 2017 and we had seen crypto for a really long time and we actually really believed in it and it was interesting because a couple of the guys who lived in our apartment complex a couple units below us were michael and yani and they started this company called wire and we used to all hang out and we played beer pong and party together and we'd have these like 3 a.m conversations how like bitcoin was the future of the world and you know joe and i like totally believed in it and really excited about it but i think there was a fundamental

shift for us where you know we had this heart to heart in 2017 and we were like wow like we've seen this happen for a long time but there's a massive new shift happening with ethereum and ethereum was really the game changer for us and the reason it was the game changer for us was it was no longer digital currency which which we totally believed in but we had said hey we're gonna dedicate our lives to this other thing but suddenly we realized it was a new paradigm in terms of programming it was a new fundamental building block like when you think about the big shifts in technology over the last you know 50 years you have the computer the internet and blockchain and the computer they fundamentally give you a new building block each one of these so computer says hey we're going to let you create programs

the internet says we're going to give you a new building block of instant connectivity you can connect with anyone anytime anywhere right and what can you create with that right and what blockchain does is it gives you a new building block so you can have or what ethereum does it says you can have programmable money and that was amazing to us we said wow like this is going to change everything and you know when you think about a lot of our investors had founded a lot of these you know seminal companies in in for the internet age or the computer age you know whether it's yahoo or linkedin or google like we've we've seen we had seen them kind of be in the right place at the right time we said look this is another massive shift if blockchain plays out like we think it

will be this will be an internet scale technology and we can't miss this so that that's kind of the genesis of how we got really excited about it and the rest is history so talk about your y-axis so basically alchemy it gives us blockchain developer infrastructure how do you figure blockchain developer infrastructure touches people this deeply absolutely that's a great question so i think when i think about this there when you're going back to the three big shifts i really this is really like my mental framework uh computer internet blockchain and they actually all formed in a similar way we're at the fund let's just look at the computer it's a little hard to kind of visualize without a diagram which i usually use but just use your imagination for now so at

the bottom layer the computer was a bunch of hardware right it was a set of protocols so it was your ram your hard drive your cpu all the fundamental components that made the computer but a computer was just a fancy typewriter until you had user applications right at the very top layer is word excel chrome like these kind of things that enable computers for everyone around the world to be accessible besides the people who like know how to write code so when you think about that bottom layer hardware in protocol layer and then the top layer of applications the middle layer is the platform layer and what the platform layer does so in for the computer that was microsoft windows and apple mac os what it does is it abstracts away the hardware

and it makes it easy for developers to build applications so now what happens is developers can build things so normal users can use those and then once it has this virtuous cycle because now users come and they say oh wow there's a lot of applications let me come use this cool thing called the computer so then more developers come because now there's more applications and more users and then they create more applications and so on and so forth so when you look at the internet you see exactly the same thing it's just three layer stack the bottom is http ftp smtp like the protocols that run the internet and we actually there was an internet before the world wide web right but what is what is the internet today to us it's facebook it's youtube it's google

and that that top layer is application layer and the abstraction layer in the middle that was needed the developer platform layer is actually the web browser right and that is what abstracts away the underlying protocols and makes it easy for developers to build so similarly in blockchain what we see is you have ethereum you have bitcoin you have all these other chains right and that's the bottom layer and people are trying to build applications you know anything from a coin base to you know walmart doing stuff on the blockchain to a cryptokitties to games whatever it is these applications applications can be anything right and the challenge is we're kind of in the early days of a computer in the sense of in the early days what happened you know ibm built their own operating system and deck built their own

operating system and altair built their own operating system everyone had their own operating system so and but then my windows came along and said hey we're going to make it easy for developers we're going to standardize this so the way we see ourselves and you know obviously each technology is slightly different the internet's slightly different from a computer we're slightly different from blockchain but fundamentally what we see ourselves as and what our mission here is to enable the builders to create applications and provide value to users if you think about that chain of how blockchain adoption happens it's developers build applications and users use those applications and get real value from it and what we're seeing right now is it's kind of like the 1991 of the internet

where it's so difficult to build it's so hard to build and our goal as a company is to enable builders by letting them have the tools they need to build great applications and so why focus on the developer infrastructure and more specifically why ethereum why why this focus on ethereum when there's so many other blockchains out there absolutely that that's a great question so let me answer the first question first so why developer infrastructure so going back to the at the end of the day what do we want out of blockchain what is the purpose of blockchain the purpose of any new technology well i guess scientists think it's interesting just for the hell of it but the reason that new technology exists is

to provide value to people around the world and enable them to do new things that were never possible before and this is a little bit of sidetrack but one of my main thoughts around adoption of blockchain is we will know that blockchain is successfully adopted once the word blockchain and crypto is no longer used right and let me explain that so when you go to dinner you don't say oh you know i use this internet app to call a car to get me here and i'm using a computer app to swipe my credit card and pay right you just say like no i called uber and then i you know just paid apple pay or swipe my card and once there's utility that is provided that is the technology is irrelevant we have to get the point where if we are mentioning

blockchain in the product name then it's not valuable because it's not a new technology so we need to get to a point where the technology and the the product value from that is the value that the user gets and it's not i'm using this because it's watching so the second question is how do we actually get there how do we get to a state where there's tremendous value provided by blockchain to people around the world which all of us obviously believe in because that's why we're here and the answer to that is going back to that chain developers build applications and those users use applications and the challenge is that first link in that chain is a critical piece because it's almost today imagine trying to

build a skyscraper with a hammer and a shovel that's the state of the ecosystem today where it's so difficult to build applications and our goal is saying hey you know instead of hammer shovel if you want to build the empire state building and we give you a crane we give you a bulldozer we give you um i love construction equipment so i know a lot of these names but we will give you the power tools and the construction equipment needed to create the applications and and the reason that we chose this is we said this is the single most important value add we can do to the ecosystem and help push the ecosystem forward and then the second question is why ethereum and the answer is that's where the majority of developers are and alchemy will support and is in the process of supporting any chain that has a lot of

developer adoption because our goal is to push for the entire ecosystem we're not we don't take alliances on certain chains our goal is saying people want to create things with blockchain how do we make that happen and how do we help the ecosystem and the builders algorithms running a free webinar to teach developers how they can use the platform to build sophisticated applications for use cases like crowdfunding asset tokenization supply chain management and even gaming applications you'll learn how to get started with the command line tools and use the sdk and rest apis you'll also learn about the algorand foundation's grant program and additional funding opportunities that the algorand ecosystem has to offer so if you're building on a blockchain

protocol that has unfeasibly high transaction fees and doesn't provide the speed you need or if you work for a large enterprise or financial institution and are interested in learning how to build applications that could integrate in your current technology stack or if you have no blockchain experience at all and just are looking to take that first step into something new well this webinar could be for you visit alagran.com epicenter to sign up once again it's free and it's happening on november 17th but if you're listening to this after that date no worries you can still go to that page and watch the replay we'd like to thank algorand for the support of the podcast [Music] so let's talk about what alchemy actually offers to devs it's an ethereum api what does that mean

as someone who's never built an app before what does that mean to me absolutely that's a great question so alchemy has a suite of products that we offer let me let me talk about each one really quickly so so fundamentally kind of backing up again fundamentally anything that's difficult for developers we want to make that easy like that is our guiding vision and that is we want to enable developers to build new applications they couldn't build before because it was too difficult period full stop and we will do whatever it takes to make that happen the actual product line so the first challenge we had so we were builders so joe and i you know have coded every single day for last call like 17 years of our life uh all of our team kind of very similar

very very senior engineers who just built a lot of products and built worked at a bunch of different companies so we had seen firsthand what tools are in other industries and when we started building blockchain we were building other products and it was just so difficult and we had built this like hedge fund machine learning data science platform that uh powered powered assets for you know four billion dollars in assets for our customers and we were like wow it is so difficult to build in the space and so what we did is we actually ended up talking to about i think at the time about 80 different customers and we said hey we want what are your challenges because we have this whole list of challenges and we had built this crazy infrastructure in-house that no one else in the world had that

enabled us to find out data and machine learning that basically was was proprietary to us and we said look we can just open this up to everyone but rather than just opening it up how do we actually find out what's most valued people so the first challenge that people had that unanimously that every single i think out of the 80 people we emailed and asked i think about probably 77 of them said this was the number one problem so it was very clear to us and that number one problem was it's very difficult to run node infrastructure for blockchains right and and i think i think also the community people don't actually realize like the the geth and parity teams have contributed so much to ethereum and the community actually owes them a huge debt of

gratitude because these people are single-handedly building the tools that power all the things behind the scenes right so i think i think that was the first thing we were very impressed and they're small teams these are not big teams of these are not if you think of like the number of people who work on apache or the number of people work on my sequel these are like order of magnitudes larger than the teams that work on get them perry so i think first off they've done like an incredible job of the resources they have the second thing is it's it's very difficult to run blockchain infrastructure so let me you let me give you like a quick example and stop me if this is getting a little bit too technical but let me give just one example so in traditional web let's say your facebook and you have

one web server that is sending traffic that is serving traffic for let's say you have 100 users on facebook suddenly now facebook you know let's say facebook takes off and you have a million users what do you do so you actually just spin up more web servers more computers to hand to handle that traffic and then you split traffic across all of those right and the problem is you can't do that in blockchain so let's go through the blockchain the same example let's say you're building cryptokitties and you know cryptokitties has one web server one node that's running and node is the equivalent of blockchain server so now suddenly imagine you get a bunch of traffic and a bunch of people joining so now you say okay let's just spin up 10 more nodes the problem is you can't actually just

split traffic across those and let me explain why so as a user what will happen i'll say okay i'm going to buy this crypto kitty and now that that transaction gets routed to node a right but now you hit refresh and say oh i'm going to go view this other cap this time and you want to get the you want to see all the cats you own this time your request gets routed to node b and fundamentally blockchains are a decentralized network and they all don't have the same information at the same time eventually everyone will agree on the same blocks that happen but at any given point in time the most recent information is actually not agreed upon by everyone in the network so what happens is the user to the user they hit refresh and they go look at their cat list

and it looks them like their cat's not there and their money's gone so then they freak out and say whoa what just happened which is not actually the case the thing is just the transaction hasn't propagated to the other node in the network so the kind of high level of what that means is you can't horizontally scale infrastructure and blockchain and that that is how it's done in every other industry so we what we did is we sat down and we said look nodes are great if you're serving kind of like a very light app and for us we said look we want to be able to scale to enterprise infrastructure and provide the scalability and then there's a whole suite of other challenges that that people have with node so we said look we want to make this easy so we actually sat down and built a new type

of decentralized infrastructure from scratch it took years of work for us to build this and it was the product of us having to build this internally for ourselves first and so we call it supernode it is it is a completely new type of decentralized architecture that we have built that enables extreme reliability um infinite scalability so it's almost like an aws style thing now where before if you had more traffic you know you need to spend weeks spinning up a new node depending on the type of node so if you have suddenly a surge of traffic you're just hosed you can't just spin up a new node on demand so now you have eight of developers have an aws like capacity where they can just infinitely scale it um it will handles all the data correctness um and it handles a bunch of other things around that can you become

a little bit more technical here what exactly is this decentralized service that you've built so basically do you just run your own gas and open ethereum nodes in the background and kind of serve that to the person who calls the api um what exactly does your system entail yeah absolutely uh great question so we have a little bit of a diagram on our website you can check it out but the short answer is no so kind of conceptually what we do is we have to build custom decentralized data stores for every specific type of data that is stored in a node so for example so for transactions you can query transactions in a certain way on the node um and we take that data and

design a custom data store for that data that allows you to say right now maybe on a node you can say hey get me transactions in this block but one thing in terms of supernode what it lets you do is now you can say get me all the transactions for this address which is not possible on an actual node right and b and by designing custom data structures for each specific type of data that's on a node we we basically we interact with nodes to pull data off but then we did our own decentralized infrastructure serves and and provides that data to people and provides extended it provides an additional query layer on top of ethereum that's extended beyond what is known okay so you built a generalized indexer a set up no it's not an indexer in the

sense that you know we're just storing this in a database and then we provide information we provide access to it in different ways it's truly that let me give a good example so basically think about this right when you're running if you want to run a database on your own computer let's say you're building a website you want to run mysql on your own computer that's a database right and then google uses a database to store the entire web into index the whole web right so like technically that's still a database but the technology is like fundamentally very different and kind of similar here you can run a node yourself but the technology that we built is completely different it's a new type of indexing and storing and serving method that's kind of akin to how a google or facebook would store and

serve their data can you be a little bit more explicit about how it's different when you say it's completely different yeah let me let me give let me give like one one concrete example right so when i say it's completely different the reason it's completely different is the type of data structures that we use to store each type of data is completely different so for example so on a node you can query ethereum logs so you can get a certain range of logs if you ask for more than that range it'll crash and you can only query in kind of like certain type of patterns so what we did is we said look um we're going to use so for this for our logs in particular we use a time series database and then we also use another indexing method to store the actual information

so what that lets us do and we so we basically like store it and serve it in a different way and what that lets us do is now you know we can so we built a whole system so kind of like there's a node right we built a whole system just around storing and serving logs and so now on logs you can cert you can query about i'm not sure the exact numbers here but roughly about 10 times the range of what you could query on an ethereum node you can query on alchemy so what it does is it gives developers extended functionality so that now because we build this custom data source for logs they can query things that they weren't possible before kind of back to the original question supernode is just one piece of the developer

platform so this this was the core technology that we worked on for many many years to kind of really perfect this and make it really really good and then on top of that we have uh four other products so one is alchemy build so alchemy build is a suite of developer tools that enable debugging crash reporting um all the tasks that you would do in traditional web development all the tools that you need you those don't exist in blockchain and we built a suite of tools to enable developers to debug problems faster so for example one one of our users who's in hawaii he had a rogue server that was just spinning and sending a bunch of transactions that he didn't even realize so using these tools these visualization tools he was able to

to find that and shut down whereas it had been running for weeks and he just didn't even realize or another example was there are certain kind of bugs that take days to debug and with the correct insights you can you can debug it in under 15 minutes so that's the second piece then there's alchemy monitor and what alchemy monitor does is provide detailed insights and analytics for the blockchain and it captures things that are not possible through a traditional google analytics or you know those kind of tools because these are kind of blockchain specific and then the last piece is alchemy notify actually two more alchemy notify right now when you think about um a normal app if you use instagram or use facebook you get notifications when things happen

when someone likes your photo when someone comments on your wall and blockchain the challenge is these events are not exposed by nodes so for example when an address receives currency like let's say and you send me ethereum that is not an event that the node sends and says hey you know this wallet received five dollars or five of each so what we do is we built a notification system that watches the blockchain for all these types of events and stores them and and it provides an api and the end outcome is the user now you can when you use apps you can get notifications on important events and that wasn't possible before the last thing we do is we we actually think of our support as a product so we

do real-time global support for all of our customers 24 7 around the world and it's not like you're talking to a support person you actually talk to the core engineers that built the product so that that for us is a really key part of the alchemy experience so just to sum up the the product lines you have the super node which is the ethereum api and we'll get a little bit more into that in a minute there's the developer tools that allows a developer to like prototype and debug and this sort of thing there's the monitoring tools that allows you to understand sort of like your users data et cetera and then there's this notification thing which i think is kind of cool where like let's say you have you know you're you're building a wallet for example you'd like for your your users to

receive notifications on like blockchain events right so like on transaction received or on transaction like complete or like some smart contract action or something like that then the user can receive a notification i'd like to spend a little more time on the supernode thing you know let's suppose we have a someone who's building uh ethereum smart contracts and they've spun up their own node and they're using you know this one endpoint to build and deploy their their dap like what specifically are the kinds of things that they're going to be able to do with the super node and what kinds of data are they going to be able to pull from that api that they're not that they're currently not able to get with

you know the the rpc calls that they make to the gethnode absolutely that's a great question um and that breaks down into kind of four key benefits that people the reason that people use supernode so the first one is on average it depends on the size your project and the size of your team but on average people spend about a quarter of an engineer's time to two engineers time maintaining and um and basically caring for nodes and typically to build out a reliable node infrastructure system that even if it doesn't have data correctness and these other properties that we talked about you need three to six months to really make it hard and that is what we've seen from larger customers so the number one reason that people use us is they don't have to think about it and it just works

like it's ultra reliable and it's just it's just always up it's kind of like why you'd use aws instead of running your own server it just it just works right you don't have to upgrade the hard drive you don't have to wait for crashes it doesn't go down so that's you know if your internet shuts down you don't go down like that's that's the first thing the second thing is the scalability that we talked about the scalability says suddenly you know let's say our traffic doubles what happens if you're running your own node you need to sync a new node from scratch and you need to split traffic over and we already talked about the problems with load balancing but syncing that new node at minimum minimum takes many many many many hours and a lot of times it takes weeks right depending on the type of note you have

so that scalability is super important the other thing is the the query apis so right now so we kind of have two options number one is you can you can just use the standard ethereum apis we give a little bit extended functionality on that so you can query a broader range of logs you can query trade things in certain ways like kind of an extended capacity that you couldn't before and then the second piece of that is we actually provide a suite of higher level apis on top of ethereum that are an extra query layer on top so for example let me talk you through a couple of these so one is let's say you want to you have an address and you want to get all the tokens in that address that all that token that that address holds that's actually not an ethereum query

you can make you have to check every smart contract that you let's say let's say um there's a thou roughly a thousand popular tokens that people might hold right you have to go to every single smart contract for each token and say hey does you know sebastian's address have 0x uh no okay does sebastian's address have auger uh no okay does sebastian's address have kyber oh yeah it has some kyber okay cool so you have to make a thousand queries just to get the token balance for a single address right and what we did is we said okay obviously this is not feasible for any kind of real-time wallet or anything like that so we need to build a system where we can they can give us an address and we'll give them all the tokens based on that address right so that's an example

of one of the higher level apis and like that you know the transaction history thing i was talking about um and there's several other apis that we power but the goal here is take a thing that shouldn't be complicated and we will make that really easy for developers so nikki how does acme kind of set itself apart from developer products that were out there when you guys started so i'm thinking of infuria truffle aletheo all of these products how is acme better yeah it's a good question i think like all of these are like fantastic products and and i really like one of our core philosophies is we don't really think about other people's competition because we're here to expand the space the market as a whole is very small for

crypto right there's no 10 billion revenue or 100 billion dollar revenue companies in in like i guess there's not many hundred billion companies regardless but uh you know our goal really is to help expand the space and we will do whatever we can to help push developers forward and we love it when other people you know build great tools for the space so that to us is this is very collaborative and we are here to we're all here to expand the ecosystem and i think all of the companies that you mentioned have served really great purposes for different parts of the developer experience our core focus at alchemy is we want to help people and you know before we were mostly focused on enterprises and large companies and now recently

as you guys mentioned we just opened up to self-serve so anybody now can sign up and use alchemy and our our goal is when you are building a product we want to really provide the tools you need to get started and then also the tools you need to really scale and have a stable service so for example most of the tools we provide we build things when they are not available in other places and when they are available in other places like a truffle i think it's a great example we don't build we don't build what truffle does and when people ask us we say go to truffle we think they're great so our tool set is complementary in that way and we focus on the areas that we think are are not served right now so let's talk about the sort of node

infrastructure business because this is this is a business that i've uh some industry that i find kind of fascinating here because i think there's a lot of implications for the broader ecosystem but also maybe some i think some risks as well uh if we look at sort of like the uh you know the ethos of crypto you talked earlier about aws and you know how aws scales the web i think that in a lot of people's minds that work in the space the way that we should scale crypto maybe shouldn't resemble that you know like one for one but we'll get into a little bit of that in a second as the ecosystem matures like there there's there's already different layers in in this in this infrastructure stack so

you know you have companies like uh alchemy that are providing apis for ethereum you have um other companies in the space are doing more you know it as a service where you you spin up your own node and they provide you perhaps with some apis on top as well then there's some other layers in that stack that are more geared towards validation services so i'm talking about companies like bison trails skills here in france that offer validator as a service or node as a service as the ecosystem matures you see these types of companies further differentiating themselves or being more and more consolidated i guess my question there is you do see alchemy providing also validation as

a service in the future with all the infrastructure that you've built i'm sure it would be fairly easy you know set that up for for for customers is that a future towards which you're you're attending that's a great question so i think all of these different types of services provide really distinct pieces of value and i think at a glance it can look like they're pretty similar but when you say running a node as a service running a validator running develop a developer platform they're actually very different businesses at their core and they're very they serve very different markets so like all the companies you named we have zero overlap in terms of customer base with any of those companies like we've never had a company say

oh we're deciding between you and this other company right so one of the really interesting things like our and actually many of those companies that you named actually do compete with each other we're just a little bit separate and for us like our guiding north star is how do we provide a great developer experience and how do we make it easier for people to build blockchain products and that is what we live what we eat what we sleep what we breathe every single day you know we right now we prioritizing our public stats we power about 70 of the top ethereum applications we powered the majority defy 7.5 billion a year of unchanged transactions in 99 countries in the world and the only way we've been able to do that is by having laser focus as of this point in time developers

don't need validation like that's not you know validation staking that's not something that developers want in the future who knows like at least as far as i can see that doesn't seem to be something our focus is on the developer tooling um how do we build better better analytics how do we build better debuggers how do we build better kind of the fundamental construction equipment that developers need and that's our laser focus will we never do it i don't think i can say that because i can't predict the future and if i could um i would definitely know which chain is going to win but my focus our focus at alchemy is just laser focus on the developer and say anything we can do to make that experience better that's what we care about and that's what we want and as of right now it

seems as far as we can see forward it's very much on the same path that we've been um and continue heads down working on that i mean do you think it's possible though if i mean like perhaps you know it's not on your roadmap but do you think that you know if you look at the way other industries have consolidated you know if you look at say a company like aws or or azure and all the types of services that these companies offer within the web space right you know as alchemy grows and becomes hopefully like a massive player in the space and a very successful one do you think that it's possible for alchemy to start providing also those other building blocks that make up the infrastructure that

powers defy not just the nodes themselves but you know validating services you know perhaps uh other types of services as well yeah okay so that is a really good question you know as we grow do we expand into those areas i think fundamentally it boils down to who's your target on who's your target market and who's your customer and right now the customers for all the companies that you described are kind of like funds and people who are staking and people who have assets that they want to earn interest on right and and right now our customer is the developer the engineer the people who are building things as far as i can see and and you're right a lot of those companies that you mentioned like are in direct competition are going after the same market and it's it's very lucrative market so happy

for them for us you know our our core focus is developer as of the current present moment we don't see developers we don't see like a developer a core action of the developers is not necessarily that they need a stake maybe for their own personal assets but that's not like a core thing that they need right now if that is the case let's say crypto evolves in a way that developers need mechanisms to be able to stake assets in order to build things sure maybe we'll support it then but i think the thing i can very confidently say right now is we are not trying to go and build tools for a hedge fund to stake their assets that's not like our core business our core business is whatever developers need so in the sense of developers in the

future crypto pivoting and enabling developers do that we would definitely support that if that's not the case we're going to stick to helping developers okay just for the listener so currently you are um a subscription service so basically i pay a flat fee and then i get to make i mean it's a tiered subscription service but i get to make a number of api calls what do you currently do with the data that the data trade that the user leaves if i connect um to your service and they make an api call you can make the connection between my ip address and my contract keys i hold and the kind of interactions i engage in which is potentially extremely valuable information

so do you data mine that do you save that what's your what's your commitment to user data so one of the really nice things about our business which i'm very glad about because we had you know like the legal diligence done on us is we so fundamentally we don't store any private keys we've actually people have asked us a lot like can you optimize my transactions and can you store our private keys we're like nope we're not going to touch that because that's a whole another issue when we start controlling users funds so in terms of funds we have no access i think i think that actually let me give you a quick model of like a mental model of how you can think about this is we are a pipe to the blockchain so there's a blockchain here and there's the user here and the user

needs to take a packaged piece of data and put it on the blockchain and we're kind of like a pipe very good fast reliable pipe but ultimately we're a pipe to the blockchain right exactly but your your pipe that kind of knows what traffic goes through it i never thought that you guys kept private keys or or whatever i i'm totally aware of that but basically you being able to make the connection between my ip address and the information that i query and the transactions i send that is potentially super valuable no yep that so that's a great question the question is like we have ip address and and uh this package of data so um two parts that answer so that so the first part is when the transactions are all public so

there's no kind of secret information there we don't know in terms of broadcasting a transaction in terms of the ip address that is the only piece of data that we do have that's like okay your ip address ip address can be spoofed it can be faked we don't even know if it's like a real ip address we take user data very seriously we even though like no one's complained or no one's asked about this we don't sell the data our business is not we've had a lot of people ask like can you sell data to us and it's like that's just not our business our business is providing customers with a great developer experience so we we our answers we do nothing with the data we have systems so we can't even look at the data ourselves and to be clear we don't actually have

any data the only thing we have is an ip address of the user that's all we have we don't have their name we don't have their email we don't have you know anything else about that user right but you might have you might have like transaction data so you if you have the ip address and i suppose with with the monitoring tools that you do have i mean there must be some data about transactions that you know that it's available for the developers to use like for example what are the you know what transaction or what data are my clients their users of my of my of my client basically what api calls are being made and what transaction requests are being made into which smart contracts et cetera like this this kind of metadata not necessarily just direct user data like names and email addresses but

this kind of metadata must exist somewhere on your on your systems does it not yeah so you're right so we i mean we know which api calls are made but again like there's no like user identifiable information we don't store it i mean we to the needs we need of like you know we let the user debug their their product but we don't look at it we don't dive into it we definitely don't sell it not that you know i know there are companies that do that and nothing against that we just chose for our core business to be providing the service and it's it's really interesting because there are certain types of data that people are very sensitive about you know whether it's private keys or ident if we could identify

which users had which addresses or which users were sending transactions or which users were doing this that would be a whole other story but nickel in effect you can so basically if you look at how easy it is to actually identify addresses on the blockchain if you now also have the um ip data that goes with it it becomes even easier and i totally agree that ip data can be spoofed and so on but being diligent about this 100 of the time is nigh impossible so basically i mean that's that's the reason why you know whistleblowers have such a hard life and so on because basically staying truly anonymous on the internet is really hard yeah that's true i think so two points of that one is

again literally the only piece of data we have is ip and that is like even for our own internal metrics when we think about how many users you should platform it's actually really hard to tell because ips are not correlated to actual users very clearly right your phone if you if you drive another mile on your phone your phone picks up a new ip address so it's it's very kind of it's very unmappable to people the second thing is most of our traffic actually the majority of our traffic is back-end services so mostly ips we have are just from amazon so like people's own aws cluster is hitting us i i don't know the exact stat off top of my head but i know it's above like 70 of that is actually back-end traffic from customers so we don't we don't see any ips in that

case okay understood as a user of dapps as someone who's privacy content forgive me i'm german so as someone who's privacy consent i kind of want to know if adap used a service like yours what are your thoughts as to this because basically if i connect to adapt and in in reality actually connect to you that's something that the user should probably know right so when you connect to adapt you're connecting either to that company if they run their own nodes or you're connecting to alchemy right and kind of diving into a little bit of the technical architecture of adapt here so basically there's two ways adapt can be constructed either the the company can say we're going to route

all the transactions through kind of our own back-end system in our own our own proprietary systems and then that back-end system queries alchemy for data and returns it so in that case we get zero information about we don't even get the ip address right um and then you know they can use the web3 on the front end which means the the queries are made from that user's uh from that user's computer so that in that case the user the only information that's passed is the ip address so in either case in one thing that's interesting and this goes to the there's question about centralization decentralization one thing that's interesting is when you're using adapt if there are um if the company runs the actual software

and the node stuff and the nodes then all of the in all it's essentially like you're using a centralized service that's hitting that individual company but with alchemy you know the front end is served by that the product and then the back end is served by alchemy so it's almost like in a way you're you're only depending partially on that individual company so i'd like to turn it back to sort of like ecosystem and the business of blockchain apis do you have an idea today of how many nodes you know if you look at the entire ethereum node landscape do you have any idea today like any approximation of how many i guess nodes is not the way the good way to look at it because you're not like

really you're providing an api you're not really increasing the number of nodes in the network but i guess one way to put it would be do you have any idea of how many dapps in the broader adapt ecosystem use alchemy and perhaps also like i suppose one of your main competitors infuria as you know their back end that's a great question i mean obviously i don't know infiro's numbers but i know i know our numbers uh see what can i say publicly we have thousands of developers using us so we have a lot so we have it it got to the point it's actually pretty cool over the last couple years you know in the beginning we would get so excited whenever we got

a customer i mean we still get very excited we get a customer ultimately that's what we we're here for is to help people build great applications and now it's got to the point where um the majority of time i use crypto stuff i would say a huge percentage of time i find out i can like look into our look and say like oh we have customer support chats with all of our customers and telegram and i'll just search that company's name and we have a customer support chat with them so i'm like oh cool they're using alchemy so i think in terms one of the really cool things is as we've seen in in terms of the growth of the ecosystem we've seen as d5 has been blowing up we've seen uh a ton of really really cool things i was explaining this to a friend and i

think one of the most interesting things about the deep i guess what i think fueled the growth of the defy ecosystem is every company in in crypto effectively every d5 project effectively has an open read write api for anybody to use right and imagine if like facebook google amazon they all had read write apis that anybody could build on it would be more difficult for facebook right but the innovation that would happen on top of that would be mind-blowing i think that's one of the really cool things that you you've seen in terms of speeding up d5 and for us in terms of the growth of our user base it's been really cool to see that because we kind of like directly correlate to the number of number of projects in the space like we have a certain percentage and

and with that it grows and that was the main reason for us spending months and months and months building out self-serve where anybody can sign up and use it which is actually very tricky infrastructure and developer challenge to solve so it took us probably about five months to build this and our whole focus there was before we kind of only served the largest companies and now we said we want to make blockchain accessible to everybody and that was always the goal but it's very difficult technically to do and now you know we start seeing people on on our free tier who are very tiny companies and then suddenly they'll blow up and they'll be one of the largest people in the space and they kind of started out

from that from that small free tier i want to come back to this topic of aws which i was mentioning earlier and that is you know i think to a lot of people in the space scaling ethereum and scaling blockchain systems in general translates to increasing decentralization essentially right like so having more nodes having a diverse validator set or mining power you know what what do you say to developers or people in the ecosystem who fear that services like alchemy and and other sort of like node aggregation services or apis where essentially there's there's aggregation

of or centralization of access what do you say to those people who think that this is detrimental or somehow goes against this goal of bringing further decentralization and i mean i want to give you like a concrete example like if if in five or ten years from now 80 or more of dapps on ethereum or are using one or two apis do you think that that's a success for ethereum yeah do you see that as a successful ethereum or do you see that as a risk potentially for powerful entities like governments for example to step in and like break d5 yeah absolutely i think that's a great question and something we thought about

a lot right in the very beginning before we built anything we were convinced that we needed to build a pure decentralized solution for this and that's what we actually started building so we actually built all the tech it's actually very complicated technology problem to do a decentralized network to support this and the reason is when you think that like let's say you take something like auger we have betty market something happens and you need to settle you need to settle the results of an a real world event and you need to settle it within you know it's a couple days or whatever it's on august right for an api service there's a real world event someone sending someone a piece of data and we need to settle that in like 20 milliseconds to know if that's correct or not and there's this thing where you know just

having someone stake and then slashing them they get wrong isn't actually going to work because the damage has been done like that incorrect data has been sent and that that could have massive consequences so it's this very complicated structure that we spent months thinking about we had some of the kind of like like math olympiad type minds working on it to kind of figure out a really cool um solution for it and we had we actually ended up coming with a really good solution and then we ended up talking to you know i go back to that about 80 customers and we just asked them like you know how much do you care about this how much do you want decentralized decentralized product how much do you want whatever and you know honestly we were blown away this is one thing about user feedback where you do something and you

think it's so obvious and everyone knows and then users are like oh actually you're an idiot and the people who design like we just did we just didn't realize so what we found was number one people didn't care they said we want something that works because when you think about this um there's there's two partitions there when you think about it the first stage is getting a product that works and and then it's like having like a completely truly decentralized product right and right now when you think and then the second the second and everyone's just focused on that first piece now making something that works and the second thing that's super important to understand and this was the crux of the of the reason that people said we want this solution first we actually have the decentralized version our back pocket and

when the time is ready and when when we feel like we need it people will we'll build it out but the thing is there's a very big difference between us and aws right in terms of like you know the centralization aspect and the answer goes back to that thing where we're a pipe to the blockchain we don't store any blockchain data the data we give you can get from anywhere else right which is why the supernode is actually a small part of our business the developer tools are a huge chunk of our business and the reason for that is people can switch off at any time essentially one of the things we provide is we provide a commodity service of course we do it better more reliable there will always be the alternative and this is not so much a criticism on i'm not directing this as as a sort of

criticism on alchemy just in terms of you know the vision that i think a lot of us have envisioned right for for what blockchain systems should look like right do you think that it would be a success if you know eighty percent or more or less in ninety percent or like some some huge number of dapps were pointing at two api urls basically like like two api endpoints or one api endpoint would you see that as potentially a risk for d5 to get shut down or even like if your servers go down or if like your competitor servers go down and all of a sudden like there's 50 of the ecosystem that goes down with it and d5 by this time powers trillions of dollars in in market cap and like

the entire economy goes down well the defy economy what does that catastrophic scenario look like in your view and is that desirable given where we know like blockchain comes from it comes from the desire to have things that are decentralized that are resilient etc absolutely i think first to be clear a success in blockchain means that we're providing new value a new product that we couldn't do before and and that it cannot be shut down like it the not being shut down is a really important piece and i would say like if alchemy was more like an amazon service that you know amazon has amazon has all these companies data and if amazon goes down like they're not getting their data back right so i think a success case for us in

alchemy would be actually that you know nodes just get a lot better and they you know everybody can run their own node and that works and we're just focusing on building the tooling around it like our goal is not to be we don't want to be a node infrastructure company we want it's actually not a great business to be in the developer tools is actually a much better business from the business side because nodes are very expensive to run so for for when we think about the d5 case let's say there's there's two you know two apis providing or one api providing you know the majority so right now we do about 70 of the top apps but let's say that i think there's two cases here there's a case where you know if god forbid you know something happened and the government comes and says hey we gotta

shut this down if the case was that these companies would be hosed that would not be good that would be a very bad thing but if the case was the company could just you know just run their note point like literally one of the nice things about alchemy which is a great thing for the customer not so great for us but you can switch on and off alchemy in one line of code like literally all you do is you take your line of code and you point at your own server it takes less than three minutes to switch on less than three minutes to switch off which is tough because what that means is we have to continually win user's business our customers business because it could be anybody can switch off any time so i think i think the way that it's going right

now is we are providing a suite of tools on top of node functionality which i think are very valuable but people are not dependent on us as much as for our business our investors would love it to have people depend on us but the only way that we're able to do this is by providing continually good service i get i get what you're saying and like i i get the argument that one can simply you know change the api url you know like that they just change the end point basically and and then they can point somewhere else and all their data is still there everything works out of course all the data is still there i think it might be a bit harder because because you offer also this additional features there's some lock in there and they might have to like rejigger their app

for it to work without those additional services and those additional api endpoints i'm just thinking more in terms of like ecosystem resiliency and what i would hope is that the ecosystem is spread out in such a way that you know there's 20 alchemies right there's like several companies like yours offering varying types of services and maybe even like niche services for certain types of dapps that provide them like specific types of api calls and so that we have a more resilient ecosystem that doesn't rely on like very large actors that can easily you know take down the entire the entire space in an instant absolutely i think that's again i think

that's super important and and realistically what would happen if a company switches off alchemy the transition would be easy but kind of continuing development on your product would just be slower and i think i think the trade-off here is we thought about this internally like do we build a decentralized system right and the question for us was let's say we can push the space two years ahead by building the centralized version first because it's easier to build and we're able to provide better tooling and better better developer experiences on top of it versus taking two years longer to build a decentralized version right so for us when we think about this because nothing in life is free right so when you think about building a decentralized version of product versus um kind of developer tooling that's that's more that is more of a

centralized pipe the trade-off there is the time to market and how fast you accelerate the ecosystem right so if we felt like it was a case where people would be stuck on us and you couldn't switch off and it'd be shut down then we wouldn't have done it right but in the case we said hey we can push the ecosystem two years ahead by providing developers the tools they need to build things you know in one-fifth the time then that and that and they can switch off at any time i think that's the trade-off you have to make and i think for us we we fully believe that there should not be any kind of like single point of failure or even a few points of failure in the ecosystem and right now we we don't think that's the case maybe let's switch gears and kind of get

to the to the last section so i'd like to talk about your investors so you actually have a very eclectic suite of investors and sebastian made me not start with this but how did you meet jc it's actually really funny that i get that question we get that question a lot so first off i i think let me preface this little story so the first time that joe and i my co-founder and i started working at it literally the very first day i remember we were walking up the stairs we were in this the stanford incubator and i asked you i was like what kind of music do you like his girlfriend sarah was there and sarah says he loves teenage girl pop and my answer was perfect that's exactly what i love we're going to get along super well so

i have actually like never really listened to jay-z's music like i've never really hit play on it i don't really listen to rap it's just not it's just not my thing so jay-z and a bunch of other investors have been kind of like inbounded us we were always like look we just want to build product we've been a very fortunate position where you know we ran our company super lean and we never needed cash it was always kind of inbound interest so one investor was like hey jay-z really wants to meet you guys and we were you know we were like we're sorry we're like heads down working and during this time the company is going really crazy and we're working really hard and there were days we hadn't left our apartment like six days in a row so you know you get this call jj

really wants me you're like uh you know we we really gotta focus we have we need to focus on our company and like no he really wants to talk to you and i was like all right like we had just wrapped up doing a fundraising round and he and there and i i just honestly just didn't want to do any more investor calls i want to get back to work so we said look okay yes the way relationship we have with our investors is we really want coaches and mentors we don't need we didn't need cash but we said look we want a personal leadership we want to text you and call you email you want to learn from you guys are like you know whether it's you know the reid hoffman or charles schwab or the chamberboard of google it's like we've been very lucky to learn from all

these like incredible people so what this investor said hey you know jay-z you don't have any media entertainment people and they're really smart you should meet them like all right cool let's jump on the phone tomorrow and then they said oh i can't because beyonce had just launched her her album that day and they were going on tour and i was like all right well i guess like you know just it's fine it's not gonna work out it's totally fine um so we get this call from jay-z the next day and he and he calls us he's like i had to eat my dinner really fast to talk to you guys and and so we ended up having this really great conversation we kind of interviewed him asked about his life and you know what what he was looking for and like why he wanted

to work with us and these things and was he excited to mentor and coach us and honestly i have to say i was blown away i again i listen to like one direction and joe and i listen to one direction and taylor swift like i i literally knew nothing about jay-z and he super smart guy very kind very charismatic yeah we really liked him like all right welcome to the family so what what are jay-z's thoughts on ethereum and you know ethereum deaf tutoring we talk more about the business side around how to run a company how to run a business how to think about your team and brand and stuff so there's other things that we like talk to about we don't we don't we don't necessarily need every uh investor to be deep into developer toning

we're also wondering about this earlier before we go on the show you list stanford as one of your investors we didn't know that stanford had like a vc arm or investment arm what is that all about there's a couple different uh venture arms out of stanford there's a stanford endowment there is uh the stanford startups fund there's the president's fund so um yeah we we stanford directly invested and we have a really close relationship with them and this was also when john hennessy the chairman of board of google was president at the time so he also personally invested so we've been like very very tight and in the cs department computer science department multiple of this computer science professors are investors and so just really really close i mean i spent six years there underground and grad joe did

the same so a lot of love for our school great so um where can people go to find you and start building uh on alchemy yeah absolutely so our website is alchemyapi.io um and you can follow me on twitter instagram nick hilster so it's at n-i-k-i-l s-t-e-r uh feel free to shoot me an email dm would happy to help and if there's anything you can do feel free to reach out cool thank you thanks for joining us today thanks for having me thank you for joining us on this week's episode we release new episodes every week you can find and subscribe to the show on itunes spotify youtube soundcloud or wherever you listen to podcasts and if you have a google home

or alexa device you can tell it to listen to the latest episode of the epicenter podcast go to epicenter.tv subscribe for a full list of places where you can watch and listen and while you're there be sure to sign up for the newsletter so you get new episodes in your inbox as they're released if you want to interact with us guests or other podcast listeners you can follow us on twitter and please leave us a review on itunes it helps people find the show and we're always happy to read them so thanks so much and we look forward to being back next week you