Building a great onchain consumer app with Privy

Transcript

GM GM welcome to web3 Academy your one trusted source to capitalize on the next big phase of the internet don't get caught in the hype cycle I'm jird joined by my co-host Kyle rehead and we believe that embedded wallets are going to change the world that's why we're carving a path for doers to confidently build and invest in web 3 I don't know if the rest of the listeners from the podcast try to guess what you're going to say in every episode but I do it's always fun when it's the interviews because we do the whole podcast first and then I'm like okay from what we just recorded what's he going to say I didn't guess that one I thought you were going to say onchain consumer apps but that was cool anyway it's my favorite thing I think from our podc now okay guys let me

tell you this was one of my favorite episodes ever pry is single-handedly fixing crypto and web 3 without them we'd all be screwed I'm kind of kidding but not really Jay and I have been like hammering this industry about ux and for literally since we got into this space where like none of this makes sense right why don't people understand this why are we not paying more attention to this and finally we have someone and a team I don't know how big the team is but that is figuring this out and handling this and helping all these new apps on board into web3 and build some really really cool experiences and look there's still plenty of challenges you know none of the apps that they work with which Jay will get into in just

second are perfect but they are light years ahead of what we used to have and they are just thinking every day about how can we keep improving this and that excites me so much Jay I'm gonna head over to you because I've been talking a lot but I'm pumped up right now yeah so today on the show we have Henry Stern who's the CEO and co-founder of privy and he's an anomaly to me I don't think we've ever had somebody in the show before that crosses over in terms of a business mind and an ability to understand what it takes to build a great business that considers the end user and making a great experience for the end user usually that's a marketing mind like you and I Kai but then also

Henry is a background in cryptography and computer science from Stanford in Colombia like way smarter than I am that's for sure so he's got this like incredible unique mind that allows him to both understand the Deep technical sides of blockchain and interacting on chain but then also work with some of the leading consumer apps friend Tech Courtyard which is blowing up for buying Pokemon packs right now Blackbird which we spoke about on the show recently raised $24 million and is trying to change restaurant loyalty programs and he's able to work with them not just on okay how do you make a great w embedded

wallet is their main product right now and how do you make that a great process for a user to basically sign up and start to use blockchain without necessarily needing to have a wallet first but then also the way he talks about user journey and friction and where you place the friction I mean yeah I just I agree with what Kai said one of our greatest episodes for sure when I first got into the space like was it now four years ago or something I saw where it was going and I was like okay this is super cool I can see how every app is going to use this stuff but I was like it seems so far away for good ux and like for mainstream to be able to use this stuff even during the bull round of 2020 2021 I was like okay there's all

this hype there's a lot of money coming to space but I was like this still is not usable for anyone people are going through the most ridiculous amounts of friction to use these things and to spend this much money and blah blah blah and I was like this is not sustainable it makes zero sense I would never use any of this if there wasn't a chance that I could 100x my money in like seven days you know what I mean and so like it felt very far off that we were going to have mainstream use cases for Crypton web 3 and then just speaking with Henry here today it's like we're there you know we're there and like I think it's coming very fast and we actually talked about the sort of inflection point for onchain Consumer apps in this episode and he gave a really really good take on

that and so it feels like the tech is finally there and we've always talked about it on like the infrastructure side of like l2s Etc but I mean on the app side as well now with what privy is building with embedded wallets and other things like that like it feels like we're finally at that point where what Harry said was like we can start to innovate now we can experiment previous that we just couldn't even do that and now we're there which when that starts happening that's when things go really fast so it's exciting to see that we're finally going to get these onchain consumer apps of many different kinds it's not just like social file like we've seen recently but of everything whether that's rewards and things like Blackbird or onchain or sorry real world assets like Courtyard and others and games and so on and so forth like I

think we're GNA have Innovation experimentation from all over this is an episode that I think Peaks into the future we're just a few months into this and really onchain summer and Bas sort of kicked it off and put it into high gear and yeah if you listen to this episode you're going to feel very much like you're ahead of the curve before we jump in let's just take a minute to hear from our sponsor modern newsletters are built on paragraph that's right paragraph is a brand new newsletter platform that combines the best parts of web 2 and web 3 to supercharged newsletters for both writers and readers build a community not just an audience paragraph uses blockchain Tech to allow readers to collect and own the words that matter to them this takes reading a

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time to check out paragraph and capitalize on the opportunity of being early GM Henry welcome to web3 Academy hi thanks for super excited to have you on the show very timely conversation with the rise of consumer crypto onchain onchain crypto onchain consumer apps gez uh is a mouthful I'm going to mess that one up a few times during the show and you have a very unique perspective at privy and we're going to dive into everything that privy is but before we do what is consumer crypto and in your mind and from your view and when should a product an app be onchain yeah that's a it's a great question I'm going to try

and slice the space into three and I'm going to focus on on the third slice that I see is consumer crypto obviously this is a open to interpretation but I would argue you know there's very simple powerful examples of you know BW use cases I might call this crypto infrastructure and I think of companies like bridge. XYZ and others who are doing really really great work for example of stable coins providing rails that businesses can Leverage crypto to sort of facilitate existing processes that they already have and then I think on the other side you've got I think two sides of what I would consider consumer crypto I might say on the one hand there's the prosumer crypto piece and that is hyper native crypto flows I'm

thinking of folks in defi to some extent even though I would argue that like searching in meev is getting much much closer to being almost a B2B use case but like I would consider that to be a thing but like this is crypto for experts I would argue that a lot of these flows are today ones that require a certain amount of expertise to engage with and then I would argue the third category is that sort of main consumer crypto at least in my mind which is what are apps that are built for mainstream users but that could not be built without onchain Dynamics and at least for us at privy that's a core focus of ours really which is who who are our customers whom if you took the crypto out of the ways in which they build the app would be fundamentally altered but

the core person their building for is not somebody who's coming to the app because it is a crypto app it's somebody who's coming to the app because it is a good app period they may know it's a crypto app it may be obviously a crypto app but they may not know even that crypto is involved but it leverages sort of onchain Dynamics in a way to provide a new experience that's what we're excited about when it comes to Consumer crypto I love your three categories but I mainly the way love the way you describe the consumer app category which is that people are not coming for the blockchain they're not there for the the crypto aspect they're there because there's a great app and a great experience and then there is blockchain in the back and they may not even know that I mean right now I think most

people at the space do know that but that is the future and a key part okay so in your mind when should a app be on chain when should it use blockchain yeah it's a great question my My Views here by the way have evolved a lot since I got into the space I think it's been interesting to sort of see that to me the answer to that question question is kind of a good RAR Shack test for what are the parts of like crypto that I'm most excited about at any given time you know high level I would argue there are sort of really two things that decentralized rails gets you and and I guess maybe just as a bit of background I did a lot of work in um consensus algorithms and distributed consensus before um working at privy and I think that's colored my view of really

the cost of crypto quote on quote like the computational cost of having uh a decentralized consensus mechanism what does it mean to have a trustless foundation for state I'm you know painfully aware of the amount of compute cost bandwidth cost coordination costs involved in all this I think these will come down but I come at it with a view which is this doesn't come for free so it better be worth it and to that extent so flipping the question when is it worth it I really think there are sort of two core features the first is self- custody so how do you enable users to really own the assets that they have not just have them be accessible whilst operating on someone else's land you know where I go into mea.com or facebook.com and you know my friends

photos even my own photos I've fair use of them while I'm on someone else's platform but they actually don't belong to me and then the flip side of that coin and I think the two are highly sort of related is interoperability how do you make these assets composable across various apps and I see these as really sort of a a negative and a positive to some extent self- custody as a defense mechanism I can build up value here because I know I'm never going to get rugged and here I don't mean rugged as in scammed I mean rugged as in the rules of the game that I'm participating change and I have no recourse I can't leave the platform I can't take the status I've engaged with and bring it elsewhere and then I think on the clip side is obviously this interoperability front and that is to me the sort of

positive sum which is in creating these things I'm open to the sort of extra app value that may be created in the future so like an experiment that I loved so much early on was Loot and early on meaning like two years ago but I thought loot was sort of groundbreaking in some of the nft stuff and the reason why I love loot so much is because it was kind of like you know homework left to the reader you had this list of 10 words I forget how many it actually was but then the amount of like you know maps that were built on top of it generative images that were built on top of it all of that was an expectation of we will sort of set the game but the expectation as an ecosystem will be built on top of this and I think the power of

composability is still a thing where we have a few Sparks of the ways in which it's so magical but I think this is where consumer crypto products can really be powerful I think from a go Toom market and business perspective so sorry that's my ideological view of when should a product when can I look at a product and say man that really deserves to be on chain I think from a business and sort of go to market view the answer maybe is a little bit more pragmatic and direct which is are there Network effects in what you're building does it require sort of Engagement that builds on itself if so probably onchain may help um are there tokenomics involved or General gamification where adding an aspect of speculation may drive certain Dynamics in the the game or the app that you're building that are going to

contribute to making it popular um and then finally is there sort of a tail risk where a user if they didn't have some guarantees that they could always leave would maybe not want to engage with you in the first place uh those are maybe the three more pragmatic considerations I'd look at so you mentioned before the cost of operating on chain and and that cost is as you said coming down and it's particularly high right now but that's really a result of the fact that we're just we're so new I mean you said two years ago as if two years ago was an eternity go and it feels when you talk about loot be a few years ago it feels like it was a long time ago but it really it really wasn't and obviously you know Tech Innovation is exponential and it's going

faster but that cost is still there so why are we seeing now this rise of consumer crypto apps all of a sudden it feels like we have fch and many Forks of that we have a courtyard and we're seeing Forks of that now we have draftking rain makers we have all of these consumer facing apps that really all of a sudden seem to be taking a limelight why is that what's different now is it the infrastructure that's changed is there innovations that have led to this inflection point what do you think it's never one thing and I think it's you know there's a great temptation to sort of have very simplis models of

the world where there's a single reason for everything I think there's some amount of emerging Behavior here and this is where you know I'm I've been so impressed with the teams that we work with uh you know for instance frch and how they've been able to spark the imagination of Builders and get folks to try experiments that maybe they wouldn't have tried before um so I certainly think that's a part of it when I look I think you know first the infrastructures come along way I look at systems like privious but there are many others and we're not the first here I look at what f are doing building l2s and you know polygon has done a great job it's not an L2 but in the past I think you know bass and many others have just done this and there's just a lot more Innovation here

and it is to the point where I think the landscape for Building Products has become quite a bit simpler for developers where they can think about what are the features and facets of my product that I want to enable and pick the info that they were using from there as opposed to I think what is historically been the way you build in web 3 which is what infra do I like best or best fits my mental model of the world and then then you kind of pick your product from there I think the evolution of the infra has enabled a reversal of like the mental model that I'm seeing Builders engage with which is instead of picking uh their Primitives and then designing a product around those Primitives they are picking a product experience and then tailoring it to the specific strengths of Primitives they have access to and again I think

with a space as early as crypto you still need the interplay between the two if you went and you said I am just going to build this product experience like come hell or high water you didn't look at what are the specific things that this tool gets me that I wouldn't get otherwise um I suspect you wouldn't leverage the things that are sort of idiosyncratic and and particular to crypto that make these apps special but basically I'm just seeing a whole lot of experiences that are being built that you couldn't imagine having been built a year and a half ago and in parallel with that I'm seeing a willingness from developers to engage with ideas that probably were not part of the crypto side guys prior and so I suspect that some amount of inspiration and frankly some amount of the fact that building in

a bar market sucks and so you know getting a cold shower often enough of no usage makes you kind of reconsider some of the assumptions that you had coming into and frankly I think it's really exciting time for crypto apps it's also a dangerous time for crypto apps because there might be a temptation to go too far and to give up some of the things that make the Space special in the first place yeah it's well said you've teased the work you've done with PR Tech I want to for our listeners let's take a step back here and just give a little bit of a background on privy the company that you founded what you guys doing so just before we dive in any further what is privy so privy is basically a set of onboarding tools for developers it's one Library so you can onboard all of your

users whether they are native to crypto and have 15 wallets across a number of consumer wallets or whether they are new to crypto don't know what a wallet is and are just looking to get started using an app and so we build one software package that you can integrate into your product that allows you to serve both these customers the folks who are coming in and know exactly what they want what they're doing want full granular controls over you know the gas costs that they're going to be leveraging to have their transactions go faster and folks who don't know what gas is don't know what a network is frankly don't care and I think our take is that apps who seek to serve both are going to build this type of exciting experiences and so one of the ways in which we've sought to build is to basically make it

that for privy a user is a user no matter how they're coming in the object that you get at the end of the day is the same and we basically want to give you a toolkit for doing that user management really easily first thank you because we need this Jay and I have been saying this for I mean we're marketers and all we care about is you no all we care about but a lot of what we care about is ux and this space has been slow to pick up the pace on improving ux specifically for new users right which I think Privia has done a great job can you give us some specific examples of I mean feel free to use FR Tech or others that you're using of what someone would notice is different when an app uses privy u i I've definitely listed off

some what I've seen of why I think friend Tech has done a great job in terms of ux but more specifically one of the things that I guess privy is enabling for new users or your typical user to on board let's say to frch or any other app that just makes it much easier or seem different than what we're used to in web 3 yeah and I guess you know one thank you for the kind words two I I'll just be very upfront like one we're building on the shoulders of giants and so there's a lot of work that's gone into this and it's taken an entire industry a long time to to get to a place where we can have these considerations with enough of a a backing in some of these systems two I think we're going to make a lot of mistakes along the way and we're going

to continue to because we're walking this fine line between keeping again the sort of Primitives that have made this Space special and also trying to question those Primitives and push them forward in terms of making products simpler and easier to use and so you know it's an ongoing process and there's ongoing work the the last thing maybe I'll say is I also want to be very careful not to speak for any of our customers at the end of the day they are the sort of Builders who are shaping these experiences who are thinking about their users um we're building infrastructure structure to help them do it so with all these caveats up front I I'll tell you some of the stuff that I'm really impressed with and excited by and I really think this is the beginning I look at certain things like account abstraction I look at the evolution of

uh threshold signature schemes and some of the ways in which MPC is going to mature over time um I look at you know the really rapid adoption of Pas keys in the Apple and Google ecosystems and basically I just think a lot of planets are aligning in really really exciting ways and so the sort of catalyzation is going to keep increasing in speed in the short term what might you notice in an app today that's in my opinion using really great ux versus not in the past first I think abstracting away sort of gas and networks being a little bit more forceful with users in terms of saying you know what we're gonna basically have you and and sorry this is an idea that we we work a lot on called embedded wallets and the idea is have the wallet sort of sit more flush with the app

itself so that instead of obviously there are great advantages to the user bringing their own software to every single app but it means that that piece of software has to be highly configurable to account for the wide range of what apps could be and by having the wallet embed you're basically making a choice to say we're going to sort of cut some of the optionality in exchange for providing sort of a more straightforward experience so our job as a builder in this case privy is to build you know a lot of options but to basically allow developers to then sort of cut branches so they can have a streamlined experience for users so concretely what does that mean it means not really having to select uh chain or to do uh Network switching it means having sort of pre-selected defaults in

terms of gas fees and again it's up to the developer to decide how much they want to sort of lift the veil and show the underpinnings or not but I'm finding that I'm having a lot of fun in experiences that don't require me to do a lot of thinking before I can take an action I think delaying where does friction come in we've talked a lot as a company about Progressive onboarding how do you let your user get to something interesting in the experience as fast as possible and then trigger an action and so for us early on it was maybe you don't have to connect the wallet up front the first version of privy just let you say connect an email and then attach a wallet to that email that was before and better wallets existed for us I think this question of how do you

progressively onboard where do you want to put friction is a huge one and I think bridging remains one of the complicated parts of these novel experiences and so do you want to have that bridging Paine come up front where user really has to engage but then being able to work within the app becomes a lot easier or do you want to delay it until the last moment these are the sorts of parts of the experience that we find interesting but to sum up because I'm all over the place I think the three things that feel really really special one is sort of mirror Choice patterns so that you don't get decision paralysis from the user and you actually have a pretty straightforward path the user is able to orient easily and has a clear call to action for what to do next they don't have to think about the meta of

the product they can just engage the product the second is I think this is mobile and really you know pwas are one really good example here but a lot of the pain I think of using wallets in Mobile historically has been having to shuffle back and forth between apps which is super costly interrupt and so you end up at least I end up usually dropping the app after enough shuffling back and forth if a connection breaks and these are hard technical problems but I think being able to stay within the app just means you can actually focus and have a longer lived experience which is huge and then I think the the the third piece for me is a lot more focus on smaller UI pieces being able to sort of manage some of the ways in which self- custody feels inside your product

means that the user doesn't feel like they're engaging two different products they're actually engaging a single product so L lots of work ahead but those are for me the sort of three big unlocks that we've seen recently yeah I love that thanks for explaining that the way that I've sort of been explaining it in our podcast recently is it feels like now and I and I actually think it's probably just with apps that are using privy but I'm not 100% % certain of that but it feels that way that when you sign up for an account in like the web 2 world there sort of just the account and the wallet is just sort of merging into one and now when you sign up for an account you're also basically signing up for a wallet that's now like they're sort of just jointed together it's a big

benefit for apps to do that right because you can bring funds in there at any time you can bring other assets in there at any time and like you said it's sort of different than what we all thought it was going to be which is you always connect your own wallet into Apps but most people don't have wallet so it actually makes more sense that when you create an account all of a sudden you just have a wallet within there right away and that's kind of how it functions and that removes a lot of friction like so much friction because especially trying to get someone to use a new app when they don't already have a wallet for some reason web3 doesn't do a great job of saying oh you don't have a wallet click here to get a wallet right and the most people are just like I don't even

know what that is so this whole idea of embedding the wallet inside of an account I think it's just been a massive massive ux upgrade and a big reason why I think a lot of these onchain consumer apps are beginning to flourish and beginning to work because it make sense to people now right it was such a different user experience to have to get a wallet and connect it in whereas now that they're embedded it just like it's so natural and I think that's really key I I I completely agree I think you know obviously it comes with trade-offs and that's part of why we build on both ends of the spectrum we build on the one hand these embedded wallets but on the other side we've built a lot of wallet connectors we've done a lot of work to make sure that if you already have a

wallet and you want to connected to the app you're able to do so and I think our sense is we shouldn't be prescriptive with how users want to engage in either direction and you know for some people this embedded wallet is really going to be a starter wallet the first way with which they engage with an app and then they'll sort of you know graduate into having their own app they'll be like man this is really good I want to take this and I actually want to move it into metamask and like start moving around these things and we're doing a lot of work to enable this at an embedded wallet level but I also think you know there are things that consumer wallets are really good at that embeda walls are not and then I think conversely for some people most of their experience is going

to be within an app and I think again how do we keep the benefits of self- custody here without giving up on the benefits of interoperability is a huge question and it's a question that I think covers a lot of the things like I'll just give an example I have like five or six metamask accounts or metamask accounts ethereum accounts that happen to run on metamask but I run them on on a few different wallets as well that I use for nft trading and I don't want them to be the same account there's a very specific reason why I use five or six of them and so again I think these are super nuanced questions of how much do you enable a user to make these choices on their own behalf and how prescriptive you try to be and I think that's a lot of the work that we're

trying to do right now is is figure out the right balance so a user in is an easy time getting started and that has enough optionality that they can grow into the experience that's right for them so I'm curious to dive into this question of tradeoffs a little bit and maybe I'm wondering if you have a unique perspective because of the different apps that you're working with and what comes to mind for me is friend Tech which is very much a crypto native app right now I don't think new non- crypto users are using France I mean I'm sure some are maybe only fans and those types are jumping on board versus a blackbird which is a restaurant loyalty app that is really targeting the average user who

just visits a restaurant and not a crypto native so are you finding that this tradeoff are people more interested are the founders and the team that you're working with are they leaning more towards self- custody or are they leaning more towards just great app experience don't worry about the blockchain the benefits of blockchain yet it's a great question I'm going to Nuance it a little bit by saying you know I I think that the question of how do you define self- custody is is one where you can ask 18 people and you'll get you know 17 different answers for us it means only the user has access to their private keys and that's a huge part of our work is ensuring that that's true the question of how quickly you expose users to the rest of like the

blockchain interactions that they have is is a very important one but I guess the premise for us is for example we have sometimes customers who come to us and say I would like to be able to sign things on behalf of users when the user's not around and we can't help them with that and so we you know say you might consider working with some of the folks that we work with to build a smart account and have basically some version of session keys that allows you to sign these things on behalf of users but privy itself will basically not enable you to take any actions unless the user is sort of signed in and present in the app um so to that extent there is kind of a premise which is all of our customers are interested in self- custody as a like a priori rule because

that is how um we've built our product and because there are limitations to what we can do because of that but we think it's really really important um I think beyond that we're very lucky in that a lot of the the customers we work with so the folks you mentioned and and you know a lot of the others are super thoughtful around the tradeoffs involved in having sort of onchain Dynamics and where to layer in that complexity and we're not to and so you know I think of the bonding curve mechanics of frch I think of some of the interoperability that I suspect Blackbird is thinking about I look at how Courtyard is leveraging in this case Reservoir so that when you list an asset it's listed across all of the nft marketplaces available and these are all like various

features of I think onchain dynamics that they were choosing to leverage to make their specific experience better so sorry it's not a super clear answer but I think basically we haven't really been serving customers who are like web 3 seems like really cool marketing and I kind of want to have an nft drop to see what happens we really focused on customers who are kind of interested in saying we have these pretty deep interactions that are going to occur on chain that maybe require Integrations with thirdparty systems and we kind of want a self- custodial base for how we engage the user with those and that's where we're trying to provide value if that makes sense yeah it makes complete sense let's dive in a little bit deeper into each of these apps that we spoken about frch Courtyard and

Blackbird from your perspective and you can pick all three or any or just one of them what has each of these apps done well that has allowed them to achieve their success I think for all of them it's that these are Builders who are really thinking about who their users are uh and so they're very very carefully considering why are people excited about these Dynamics and how do we build the best possible experience for them so this is where you know I remember early conversations we had with Courtyard where they were spending I think a week or so at a conference for Pokemon card traders and they were interfacing with these folks and trying to get them to install that a mask and coming back with these thoughts and so

in a sense they were optimizing for the user and the constraint was the tech rather than optimizing for the tech and the constraint was the user and so you know it's a bit of a platitude but at a highest level I think that's what all of these apps have done really really well I think there after all of them are really focused on building compelling experiences so I think they're doing a lot of user testing they are themselves dog fooding their apps like crazy and then they kind of understand the core mechanics that like make the app feel special I have tried unsuccessfully to uh buy F packs from Courtyard on Wednesdays they have a drop every Wednesday where you just not because you can't buy because they sell out too fast they sell out too fast yeah so I haven't been able to do it yet but they have the

Pack spinning and they've had people basically streaming the pack on wrap and you know this is absolutely UI I candy it has nothing to do with blockchain but um the way in which the pack reveal happens is like so satisfying it's a thing that I've done you know as a kid playing Magic or whatever else it was for such a long time that really appeals to me and then the fact of course that these are assets that I can find on openc after I lift them list them on Courtyard is really exciting to me you know obviously the the the I believe that the use of PW that frch has done is a really good way to re-engage users having the app not just be PLL where the user has to come to you but being able to push notifications to them is a giant

unlock likewise I I think Blackbird is bridging in a way that card also is the physical with the digital worlds which I find to be such a fascinating like part and I guess this is like social real world assets but it's like such a cool part of what's being explored right now and you've got other cool companies doing this sort of stuff and so I look at these folks I even look at apps like unlonely this is a a streaming uh service and they're thinking a lot about what are they like unique experiences we can get our users in this way so I think all of them have really started by mapping out the user journey and saying these are the ways in which a user comes in and this is how they get to Value in the app and then they've walked backwards to find the tech from there so

these are all like very thoughtful Builders who all believe in in in in web 3 and in why they have chosen to build on this stack but they're also all very user obsessed which has been uh really fun to work with frankly for us as infrastructure Builders because they they make us a lot better by pushing us here so it sounds like it's the experience right we've created an experience and like you said with cyard it wasn't even blockchain stuff it's just the experience they created in terms of like the spinning and the design of it all was just like so good that that really likes to onboard people and keeps people around I have a question in terms of speed of developers in terms of like their ability to create onchain apps because you know two years ago you couldn't create an onchain consumer app right because we only had

ethereum we didn't have l2s yet so just you talking about like choosing your gas prices and all that like that would be very very difficult and not really probably not even possible on ethereum because the difference in cost is so much on an L2 it's like front Tech can choose what those gas CS are going to be or what the speed's going to be because it's a matter of pennies not dollars or tens of dollars right so until twos it wasn't really possible then you have like if I want to create an onchain consumer app I got to build the app itself non-blockchain side of it but then I got to go and build my own edable wallet if I even have that and I got to build all these different functionalities in with blockchain now we have privy which can do that for us

essentially right it's kind of like I don't know how plug and play it is but a lot more than if I had to build it from scratch so it sounds like the speed of which developers and companies can build these apps is much faster in your experience and of course this varies depending on what you're building I understand that but like how much faster how much better is it getting for developers to build a onchain consumer app with things like privy and all the other kind of inventions that are happening over the last like let's say a year or two yeah I'm trying to quantify it I think if you take back two years I'd say somewhere between 10 and 50x if you take back one year I'd say somewhere between five and 10x and again I I think there's a lot of things coming together

here that are really really exciting al2s are gigantic part of that AA is only going to make this faster and I guess just to give you a sense of how we're building we really want to stay sort of at the The Cutting Edge but we want to make sure that everything we build we're building for a specific customer so one of our sort of like core building principles is everything we pilot we have to have a customer piloting it with us and so for example when we started building with spart account systems in the AA world like zero Dev or bony or Alchemy it was because customers were coming to us and saying I really want to build with this and I want privy to be a signer here and so then we jump into sort of a three-way room with the this part account Builders

to collaborate on this and I think this helps really ground the technology in like a very specific use case um but for us I think kind of the the interesting thing is having access to both the more tried and true super rapid experimentation okay this person has done X and I want to build an app like it and I want to be able to like move very quickly and prototype something and I think speed of prototype basically is just going to be essential to having good consumer crypto apps because some stuff will work some stuff won't but being able to try things quickly without basically you know getting 50 hours into a project and then kind of understand that actually the thing's never going to come together because there's this like Giant gaping hole in the middle of the experience that you thought you were

going to be able to build um I think that used to be the case and today actually a lot of that risk has been moved off so there's still like early technical decisions that you have to make I think you know early 2000s we had the lamp stack in traditional web development which was like just a really easy way to pick off the shelf Frameworks and put them together to build a website easily and like backend database and so on I think we're starting to see the emergence of these sort of more well-worn paths through the forest that developers can use to like build stuff so that's part of I think the balance that at least we're trying to bridge which is on the one hand embracing rapid prototyping and making sure we do that really well but on the other hand working with folks who kind

of have a hey what if we did this and it's like well it's unclear that we can do this let's try and figure it out together right it seems to me and I would love to hear if you agree or not but have we reached an inflection point then three months ago no one had heard of aning consum waps crypto consum waps was not a term I mean I'm sure it was a term internally for people like privy who's trying to build those but but like none of them were really live until just recently and none of them had any traction until just recently and so like you know we say frch postte or whatever it's called there's Blackbird and Courtyard and these are all new names for everyone but I imagine there's a bunch more that are ready to launch or are about to launch that again we've

never heard of it feels like we've just these just came on the map and now it seems like we're at a point where they're going to be a new one every month or maybe multiple every month like do you feel we've reached that inflection point and I guess business-wise like internally for you guys and feel free to say whatever you can like is that what you guys are seeing yeah I mean I think we've been super super lucky obviously to work with these great partners and that has meant for us that we are working super super hard to build to to help Builders like shape things and so we're seeing an interest and influx of builders in this space interested in building Crypton native experiences for mainstream users that I at least I've never seen since being in in web 3 um so that absolutely

feels like an inflection points I think things take time and so I'm going to be a wet blanket here because I've been in the space for too long to kind of like believe that you know it's up and to the right at all times you know I think technology gets developed in waves and I think there'll be ups and downs to be a downer but I also think there's something that has fundamentally changed which is this ability to experiment and frankly it's going to be a little bit of a hot take but the the mix of new tooling and funding conditions in the environment I think is a very potent mix because it means that developers have to act like they've got three months to live and that means building very very differently than if you've got a war

chest that gives you four years to kind of mess around with really cool Tech and I think both are really important I think it's it's fantastic to see folks like you know protocol ABS where I used to work or Celestia or a number of others doing work to make sure that the sort of infrastructure protocol strata is is is is continuing to evolve and morph into something that we can build on with better and better trade-offs but I think there's an attention now to user experiences and applications themselves that feels really true and so I think we had a meme internally that I love that was put out by this this fellow called Ben be and it's I don't know if you've seen it it's like this anime where this guy like has a a cart with some hay in it and like the cart drives up and he's

kind of trying to dig through the cart and he sees a face and the caption that this guy Ben bash put was web3 infer Builders trying to find the apps out there and only finding other web3 infer Builders and it's felt like that for a long time and it doesn't feel like that anymore so yeah I think we are at an inflection point I think it's going to take time yeah absolutely well it's good to hear I mean it's funny that you know if you go on Twitter you talk to other people everyone thinks once again crypto web 3 is dead right there's no one here anymore no one cares no one's building and yet behind the scenes this is when more of people are building than ever before and specifically building apps that may uh have a potential to go mainstream which is really interesting

and I just want to highlight building in the bear like bare markets I don't think people realize how important these are for this industry or just in general right like when you have to bootstrap a business it's so much better than if you have so much money it's kind of like humans when we are starving and the more hunger we get and we're out there hunting the more hunger we get the longer we have without food the more uh optimal our brain functions right we like we dial in even better we can run faster we can think more clear uh and that's how we have survived right and it's like the same thing with business is like when you're on that last few weeks or months of you know Capital left it's like that's when you really dial it in and you put everything into it and

you figure out the thing that works and it and this is what continues to happen in these Cycles with crypto which is is very interesting the the thing maybe I'm most frankly upbeat about is that you know obviously the risk again is people just start throwing throwing away the web three altogether the things that make it special and again we're painfully aware of the trade-offs involved in any move obviously the status quo is really comfortable and so trying to push how the tech is used means find finding new new parts of the tradeoff landscape new benefits and new drawbacks I think what keeps me super optimistic is one the thoughtfulness of that I'm seeing from folks building and the scrutiny under which they're putting the toolings that they use and very specifically I think for me a lot of builders that we talk to are thinking in

terms of capabilities rather than Technologies so for us you know for example that meant when we were starting to to work on AA things we were like what should we use for AA and someone on the team said listen that is a terrible question the question should be what does AA get us that we need and then we went down the list and I was like okay being able to sponsor gas is really really important being able to do that cross chain is a huge unlock being able to batch transactions is Big being able to get session Keys is huge like how do we think our customers can leverage these capabilities and then let's actually build tooling based on not AA but the capability itself and so I think that's the cool thing is you know obviously the worry is with fewer resources you start throwing away things

that felt like a luxury and I think I'm seeing the inverse happen which is some core like onchain Dynamics are no longer seen as a luxury they're actually seen as like part of the core what makes the product special sorry I I'm not very clear on my the way I can articulate that thought yet but it's uh it's something that I've just been super impressed with I thought it was well said yeah no I agree when Kyle asked or when Kyle was saying that he feels like we're at an inflection point and there's more apps coming Henry you were nodding your head with a big smile on and and for those listening on podcast you can't see Henry but he's he was definitely agreeing with that statement can you tell us at all about what you think is coming is there any particular categories that you're seeing can you

give us any insight into what's next yeah I mean if I understood Kuma well enough I'd be building a consumer app is the first thing I should say uh my track record here is as an INF Builder I can just say you know what demos have I played with that I find super super exciting there's a number of things but there are three things that I find generally super super exciting the first is is real world assets from an intellectual perspective from a power to draw everyday people who don't care about crypto into the space perspective I think apps that bridge uh the digital world and the physical world are immensely powerful and we're seeing a lot of these which I'm really really pumped about the second is gaming I spent a bit of time trying to understand is this gaming thing a meme put forth

because it sounds really exciting and it is really exciting but where are the games and obviously there are a number of exceptions but that's something that kind of mold over through a part of 2023 and actually I look at at Builders you know we have a developer that we work with called small brain or small brain games at least is is is the the studio and it's just really rapid experimentation on dynamics of game systems this is not yet the AAA gaming and we have really exciting versions of these that we've seen in the web 3 space but I'm excited for kind of understanding what about crypto makes it a special environment in which to build uh game Mechanics for users so so that is actually you know a meme that I guess I'll carry forward and saying I'm really excited about the stuff I see there and

then the the third piece is social I OB see a lot of stuff in Social that I find like genuinely really exciting so there's a lot more there but that's some of the stuff that's that's sort of on my radar that I find really compelling when do you typically you and your team get brought in to work with a project it's interesting because coming into this conversation I knew that you guys were do your approach right now and I think mainly because I think that's the approach of many in businesses in the space early on is you know work oneon-one with customers find a specific use case help them solve it and then build for scale later but you really have said many times throughout this conversation you really pointed out that focus of yours that is the way you guys

are building right now so when do you typically get brought on and where I'm going with this as I I'm guessing that you might be on some projects that might actually be quite far away from launching or you've been working on them for a while and they might finally be launching yeah I mean it depends and again I I want to be very clear here we're a s provider you know I I think obviously we are helping and we very focused on building consumer products and I also think self- custody and the role of uh asset ownership and asset management in web 3 means we do have this like strange positioning between the developer and the user and frankly that is a lot of the work that we do and that we think about which is in what ways must we empower the user in what

ways must we empower the developer the developer has to craft a compelling app but they can't do so add the cost of user safety or user ownership and that's an incredibly hard line to walk and one that we we spend a lot of time on and so I recognize that I think building infra in this part of the web three stack is a special thing but I also want to be super clear like you know I don't think cloud flare data dog all services we use in love are responsible for the great apps that are built on top of them they do enable them but nor are we so frankly we get brought in usually either through people reaching out to us through people that we know because we kind of have heard of what they're building and we reach out to them or through Partners

who are looking you know a smart account system that's looking for a signer that they want to work with and that's built stuff with us before and that wants us to be involved and typically it's really in one of two places it is or one of three places it is super early on I kind of know I want to build this and I'm still figuring out the mechanics but I'd love to have you around so you can answer questions around what you can or can't do it is pretty far along I'm I'm building this so far I've kind of been like you know punting on the user connectors and user uh embedded wallets part of it but now it's time to integrate them I have a pretty good sense of what I want like uh can you just point me to where we should go to

build and then some people are are basically switching to privy whilst in prod which is another set of questions altogether sorry I'm trying to find a py answer to tell you you know when when are we brought in how do we do it it really depends I think we have the the luck we're not a selfs serf tool yet you can't sign up for privy today you have to sort of go through a type form it's insanely annoying but it is part of what like allows us to actually then reach out to you developers and kind of try to understand what are you trying to build are we a good fit here can we really help and then with a few folks we really get to embed in the app and sort of help shape the road map because we're both sort of uncovering new territory

together and I think that's a lot of our work as you heard there're customers who we don't really ever speak with and they kind of just take the docs and run with them and do an amazing job and they are customers that we have like weekly standup calls with and we're really trying to embed within their team to understand how can we help better I don't think that's gonna last forever but like we don't have any plans to change that at this point nice Henry I'm curious we've touched on what are the things that have changed over the last couple years that have enabled onchain consumer apps we've talked you know that there's an inflection point in some areas of it and a bunch are now coming what are the things and you can talk about either what you guys are working on or just in general what are the

things that we're still missing or like are still the big problems for onchain Consumer apps that are holding back developers from building the perfect product that are holding back users from onboarding at scale one of the things I would say just from when I my point of view is still bridging I think is a big issue I think we get bridging people that are cryptonas that have been here forever we can figure that out moving from one network to another even friend Tech I mean you still had to move to base to then get it over there and I feel like until that is abstracted away that's still going to be a big barrier to entry for a lot of people because there's just so many apps and things happening on so many different chains so that's probably one I assume you're going to say but I would love to hear

you know what else you're seeing and that are going to make a big difference that was absolutely the first one I was going to say I think bridging remains super painful I would put it sort of hand inand with Fiat on wraps I think the ability for folks to get into crypto in the first place like to some extent coinbase pay which is their sort of payments SDK that assumes you have a coinbase at this time at least assumes you have a coinbase account remains one of the really easy ways to do it because like you're coming in with an advantage already you already own some crypto even though it's right now sort of on the coinbase exchange or in your Vault or whatever it is but yeah I I think bridging is the first big one and frankly I think there ways to sort of

mitigate that I was playing earlier today with a product I felt was really really exciting and that was a product built by David Hurley called we duel and it is kind of a competitive Wordle that you can play with friends and he's built in a really good mode which is uh he uses um gelato in order to uh any gasless transactions where you can kind of play for free but then if you want to stake money on the games that you're playing you can and that requires bridging so thinking about ways to to sort of medicate that is you I think the next big thing for me is there's still a number of things that we have to do in order to enable sort of users to have full recoverability of all assets under any conditions I think obviously here

the devils in the details and the devil's really in the edge cases of what if you lose uh your device and your credentials and these things and they whatever solution you look at there are certain conditions under which threat models and assumptions break down and I think you know development of things like pass Keys having things be much more tied to the device is going to sort of unlock a lot of new things that I I think are going to be really exciting I think the next one for me is also just interoperability like privy launched and that was one of our core launch features was users need to be able to export keys on the one hand we kind of hate it because I don't think users should have to handle any cryptographic materials I think it is to some extent like just a

worst case scenario when a user has to do that but we also felt it was necessary because we were like there are going to be moments where just the ux of what's possible today breaks down and there needs to be an escape hatch for the user um and so I think better interoperability for embedded wallets is going to be a huge one and this is going to require some standards because there are you know many people building embedded wallets and that is a really good thing you need client diversity and so having standards that enable you to interoperate Across the different apps that use these systems is is key so that's I think the three like high level that are super top of mind I still think we've got a long way to go in terms of serving also mobile SDK so you know from

a regulatory standpoint the big two unlocks I think is going to be App Store permissioning and enabling crypto Builders to launch apps much more easily and then obviously all the regulation around being able to do Fiat on wraps very well said okay before we move to wrap up here Henry if you're taking a a meeting with a new Builder somebody who's early on in their vision and their planning uh what's your advice to them what is your guidance as they start to think about building their business plan and thinking how they're going to build a great consumer app I think the question that we always have and frankly it's usually where we end up uh in a lot of our conversations is can you run us

through the user experience end to end what happens when I land on your website on your pwa and you know give me a step by step where am I clicking what's happening where am I clicking what's happening and we should go through both like the uis of what's on screen to then the onchain interactions that may be happening in the background so it's it's it's pretty you know boring advice but I think that's the thing where usually people have this nugget of a catalyst of an onchain interaction of an event that feels really exciting and they're sort of laser focused on that and kind of ignore wait how did the user get there what do they have to do to get there and then what do I have to do next and so think really playing through the endtoend mechanic is kind of like my

core First Step that we end up talking a lot with Builders about I'm glad you do that because I don't know why but it feels like a lot of businesses don't think that through and then this is where Kyle and I you know we've been in business together for many years outside of not just web three Academy and we often come into business one of the first things we do we're like what's your user journey and they haven't even gotten there yet and it's just yeah I don't know how you can have a successful Business Without that and also I think it's interesting that you know you brought up at the beginning friction and deciding where the friction goes and that's such a key step and I I love that at privy right now you guys have intentionally put friction in because you do want to build at a pace where you

are able to work more one-on-one than to work in scale and that's also an interesting decision I mean that doesn't make for Builders of a consumer app that's not the case but for Builders of a SAS or a service based build business yes that is always the case that you do want to build slower and build directly one-on-one with your customers yeah and I think this is back to the question of like you know where do we build friction there's good kinds of friction and there's bad kinds of friction timing the friction you know I think this is an early Twitter thing but it was like early Twitter users were considered active if they had started following seven people and the kind of assumption is if we didn't get you through that early friction of following seven people then you just weren't going to engage in

the app because there wasn't going to be that much for you to do and obviously bridging is a huge part of that in a lot of apps today like you need to get through it this is where personally I thought the buying your own key is a first thing in frch is just a really really cool mechanic in my opinion I think you know this is where for us as infr Builders we have to be considering the full experience and and we have a lot of work to do here on sort of understanding um what are the threat models and how do we ensure that we're building the proper rails for all of our builders in thinking about where should we you know intentionally put friction where should we not even just in interacting with the privy consol this as part of the developer tooling that we

have what is the process for promoting a team member into being an admin or back into being a user these are like small questions that I think everybody has to ask but um I don't think that goes away is I guess my point yeah very interesting okay before we wrap Henry I want to give you a chance to just give a little bit of a shill for our listeners out there how can they get involved with privy if they're building an app and they want to use your embedded wallet uh what's the steps they can take and how can people follow you guys online and on the socials so we are privoro on Twitter and we are there we are on uh orbc we are generally uh around and excited to speak you can come to

privy.com Henry thanks so much for the time has been a really great conversation appreciate everything that you and your team are building in the space as uh Kyle said at the beginning the echo at he said deep bow to you and your team thank you we need this so desperately if we're going to get to the billions on chain that we all so desire thank you I mean yeah we are excited to keep going and excited by everything we're seeing happen awesome thanks for listening and everybody have a great day thank you for listening to web through Academy your one trusted source to capitalize on the next big phase of the internet if you

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