Building the Modular Future

Transcript

Hola. Hey. Yeah. Yeah, we have a really good cardio workout in the morning and like everyone try to just like hustling with a scooter, with bike, right? And this is not very modular and then also like this is what happened when like liquidity is like totally fragmented, right? Um yeah, so blockchain can fix this, I guess. Okay, um probably uh let us say guest start with like a quick introduction. So, my name is Dovey Wan, so I run my own shop and we are a VC, but not like technically a VC. We are LP-less fund, but we write VC checks.

Um and has been in the space for like too long, like 10 years now and yeah, and then probably move on to uh Zon. And I know Zon has a very interesting experience and surviving a lot of like uh trauma in this space, like Terra, Luna and also one of the survivor here and Nick like definitely also OG and I think Nick we first met when you were in Harmony, right? Yeah. So, yeah, probably let you say talk about your experience in this space and then how does it feel as this like multi-cyclers and then now we are in a new cycle and like blockchain used to be just like holy, like uh fully monolithic and then now it's kind of like spawning out and with like so many different components and

but like also comes with a lot of like friction and like especially mental friction, right? And so, like how we can make like modular, like just like modular package like more usable for developers and then also for users. Yeah. So, probably start with Zon. Hello, everyone. I'm Zon, chief BDSM officer at Initia. That stands for business development strategy and marketing. Um Initia is a network for interwoven rollups. We're holistically rebuilding how multi-chain networks should look, feel, and operate for both users and developers along three main verticals.

The architecture stacks that people use to spin up application-specific blockchains, the product stack that end users face when interacting with potentially thousands of different app chains, and the economic systems that kind of tie these networks together. Um, yeah, I do have a bit of a trauma in the history. Um, right out of college, I was a smart contract developer at Terra. Um, which was quite a wild ride. Um, helped build a few dapps within the ecosystem, and then I left to build my own options project. Unfortunately, I still got bopped because that options project was also on the Terra blockchain.

Um, but afterwards, spent a bit of time figuring out what I wanted to do next, went to Ethereum land, and then really saw the rise of the modular thesis, uh, led by you know, Nick White and some others. Um, and I think just modularity was an inevitable part that was going to come to blockchains. You saw this sort of separation happen within traditional web 2 architecture as we spun into things like microservices, and it kind of just made sense to rip apart the stacks of a blockchain, optimize each layer, and then figure out the ways to put these different pieces back together.

Nick. Hey guys, I'm Nick White. I'm the COO at Celestia Labs. And Celestia is the first modular blockchain network. And it specializes specifically in the layers of data availability, which you can think of as data publishing. It's sort of like producing block space and securing uh, chains built on top of Celestia, and and consensus, which is ordering. Um, but the sort of inspiration for Celestia is this idea that Zond uh, was alluding to, which is that um previously, kind of by default, all blockchains have been built uh with a monolithic design, meaning that there was one protocol that was responsible for every function in the stack. And it turns out when you build

blockchains that way, you inherit a bunch of uh constraints, essentially, that uh you know, prevent you from building uh truly compelling, scalable uh applications. And so uh modular blockchains are all about breaking that those functions into separate protocols that can be optimized and then mixed and matched to build a custom stack for whatever application you want to build, whatever kind of user experience you want to provide. And um Celestia has been trying to champion that way of building things, and we're but we're not not the only project, obviously, there's a lot of really talented teams building in the space, uh including Anisha,

uh as well as, you know, the other panelists who couldn't be here, like Anurag and uh Victor. Yeah, so like Nick just had a following question there is like we have seen many other modular like service provider like popping up like especially for the like since the last few years, I guess. And um how do you see like is it possible that in the future like all these uh modular service becoming like a commodity? And then so if like that's the case, then how can DA layer like capture value eventually? That's a good question. So, there's um people sort of have I think I think is a misconception, which is that data availability sounds like uh data storage or like that is some

someplace where you just dump data. And if that were the case, it would be commoditized, but the actual real way to think about what data availability is is it's block space. And block space has a lot of network effects and uh is is definitely not a commodity. So, like even if you look in the market today, there are lots of different EVM chains, but the market uh prices that block space very differently uh depending on which which chain uh you're talking about, whether it's Ethereum or let's say Tron or Arbitrum. And so, I think um Yeah, the the the it's sort of like there's a misconception that data availability is a commodity when uh it's it's not just like any other

block space. Mhm. And yeah, so probably the the next question going to be for Okay, now we have like the You guys made it. Welcome, guys. Thanks for making it. How was like the cardio? Like so, you guys are rounding right now? Yeah, so This is insane, you know, for these 2 days, but uh finally we make it. Okay, yeah. We were uh so, we were talking about a very interesting topic, and then so I think that all the founders in the space in like modular space has been thinking a lot as well, like how we cannot So, like are we going to be a commodity service in the future like on

DA on like everything? And then so, like how like DA can like capture value? And so, like um like Anurag, like probably you can also give your own opinion as well, because I know that Avail has been working on this I think that like the Polygon um era. And then so, how do you see like this uh like this uh DA layer evolve like going forward? And then just that to stay relevant in the space, right? Yeah, um so, see, data availability is a very critical component of uh how blockchains work, right? Like I mean, data availability essentially if you kind of look at it how blockchains are constructed, so there's a data availability component and execution and settlement component. And data availability is actually very misunderstood. It's a It's

not It's not data storage. It's not uh number of other things, right? Like, it it kind of is this ordering guarantees that you get from uh, committing to a particular set of transactions in a particular order at some point in time. And so, it's all about how do you design these mechanisms, uh, and data availability when we are kind of segregating it as layers, what we are off essentially offering is an ordering as a service. Uh, and the ordering is actually very important. A lot of people maybe don't understand this part, uh, in the sense that who defines the order of transactions in a in a setting that no one really controls. So, there

is no centralized uh, entity that is determining the order. And so, there's a whole lot of things that get into it. And so, the idea is that, of course, you know, like, we are building solutions that bring higher data availability throughput, easier data uh, availability verification, but it's it's not only a throughput thing. It's also when you are kind of getting into this architectural, um, paradigm where we are moving away from, let's all put apps into one big chain into an era where there's uh, a base layer and there's like a bunch of roll-ups on top or services on top. What you really want to optimize

for is that once we have these many roll-ups or many microservices on top, how do we kind of talk enable them to talk to each other, right? Like, these are also important questions. And you need to have succinct ordering guarantees uh, coming from this, for example, and so on. So, it's So, I think the question there is not to focus just solely on uh, the throughput perspective. Throughput is going to be massive because, see, right now, we don't even have um you know, like a minor fraction of the apps that are going to be there on these blockchains. Uh if you kind of look at like apps on the internet, uh the kind of activities that is there,

we that's not come to blockchain yet. And so, once we if once we get to go there, like throughput is of course important, which we are solving for, but the important thing that something like um blockchains like Avail, Celestia bring to the picture is data availability sampling, uh which is this method of easy verification that allows all of these to talk to each other. Uh and so, I think we need to kind of redefine how we kind of evaluate uh you know, like a data availability. It's not a data storage solution. Like I mean, there are better data storage solutions like Filecoin, Arweave for example. And so, the idea is to look at the overall value proposition that uh these layers bring.

Cool. Yeah, so like Victor and you guys are one of the biggest L2 out there, and then you guys are also um I guess like important clients for all the other like modular service provider like Celestia, Avail, and Injective, right? And so, when you guys like look at all these uh technical partnership or just like um technical solution decision, um like do you have like any like specific like criteria when like thinking about okay, I so I want to work on this DA versus like the other DA or like this like developer stack versus like the other developer stack? Because uh you guys were working on Polkadot before, right? And then so, now switching from Polkadot to Ethereum and and yeah, just like any just like

learnings there. Uh yeah, at the beginning so, like uh we are start from as a Polkadot project and uh back in 2020 and we've been building this for 4 years. And what we are building right now is totally different with the beginning, but you know, we have to pivot to survive in the in the space. Uh like the reason we we start to choose like L2, basically we find, you know, there's more use cases, there's more like, you know, uh like ecosystem. We actually can build some applications. We actually can collaborate with different parties uh to

achieve growth together. And we we take the modular approach because we don't want to build everything start from beginning. And uh and especially like when you do when we start to do the ZK applications, we like it's actually consume a lot of gas fee. So, we have to find we have to like uh choose the like, you know, other DA besides Ethereum DA start from day one. And that's why like, you know, we we basically start to research on the like modular space. And we find Celestia is the, you know, like leading like partner in this space. And we start to work with Celestia I think since early last year. And at beginning, you know,

we are the first I think L2 like um integrate Celestia DA in the testnet and then on the mainnet like uh and right now we take, you know, like pretty big percentage of the block space of Celestia like uh uh on Manta. So, the the reason we chose like, you know, different partners cuz we we want to actually grow with them together. So, you know, like I think there's there's opportunities, you know, we like they we can help them and they can help us.

And we actually like uh build a whole ecosystem. Like all of them they really committing to like uh Celestia DA. That's how we are working and all of them are like pretty good applications and they get into the modular space through Manta and we we we are more like a gateway for developers build like whatever through Manta and eventually Celestia underneath. And you know like and at the same time Celestia definitely like make us save like I think right now like 2 million gas fees compared to like you know other L2 like using Ethereum DA. And that that's how it work and at the at the same time you know we also

work with other partners like you know yield bearing stable coin and also like native yield like E LST like LRT and we still like working on with different partners on the AI side just keep building this modular narrative together with different use cases. Yep. Um so when we think about layer two right like the measurement going to be TVL like TVL is like the GDP in our space right and so I think this is also question for like the other panelists here is like do you have your like TVL equivalent like success metrics out there for your own projects and then for so for like

Injective and for like DA and then what do you consider your like North Star or just like the common denominator level of like business metrics like to measure your success and we can start from Zone. Sure so at Injective we're both a layer one as well as a system of layer twos. So I think TVL is a metric that we look at both within the TVL that exists on the layer one but also across all the layer twos on top of Injective and summing those up. I think what's more important is mostly engagement and some of the community building that's being done. I think like TVL is is fine measure but it's very easy to game with incentives, and that often ebbs and flows. What is more long-standing is if you can find a

few critical applications, and you can see that there is a community being formed around them, and then there's constant usage within those products. I think within this roll-up landscape, people often think like, "Oh, 1,000 roll-ups is like the North Star. We want more and more roll-ups." But, I don't think that more is better. I think that quality is always better than quantity. And if you look at existing successful ecosystems, things like Arbitrum or Optimism, they all kind of follow the power law. Like on Arbitrum, it was GMX and like maybe Magic DAO that kind of led the entire trajectory. On Optimism, it was Synthetix and Velodrome. And that's kind of a a similar thing that we want to replicate with Anyswap. And that's why we're starting off with around four to

six layer-two teams that we've been working with on closed testnet for the past four months. Just really shipping them a lot of our development resources and ensuring that they succeed rather than being focused on 1,000 different roll-ups on top of us. Yep. So, for Nick? That's a really good question. We think of sort of three key metrics that we're currently optimizing for. One is gigabyte blocks, which essentially boils down to what the core value proposition of Celestia is is is like this secure, decentralized, trust-minimized block space. And scaling the amount of block space we can produce, and hopefully having lots of teams actually also consuming

the block space. I think that's probably the most important thing. Another metric that we care about is actually the number of roll-ups. I think it's it's the best thing. I agree with with Zond's take that you know, not all roll-ups or like applications are created equally, and there will be a power law distribution, but we want to optimize to have or hope we hope to uh like a million roll-ups in the future because we think that through experimentation, that's how we're going to unlock more use cases. And by virtue of having a million rollups deployed on Celestia, that would mean that the stack has been extremely thoroughly tested and there's a lot of uh sort of like integrations and uh there's like lots of things that people can build and the

developer experience will be good. And then the last one is um we want to eventually scale to a billion light nodes cuz light nodes are essentially what powers the um security uh and trust minimization and also scalability of the network. So, um like having more and more users running light nodes on their phones, uh embedded in wallets and in browsers is a really key thing that we also want to optimize for and we're working with uh different teams to help make that possible. Got it. Victor? Uh yeah, I mean like we just focus on the like TVL start from beginning, you know, like uh that's kind of super important. And you know, like like lot

of like other layer two also cares about, you know, smart number of smart contracts deployed on the chain, but we think, you know, this is something, you know, really easy to like, you know, uh just farm by some random devs or, you know, studios. Uh but uh uh as uh re- recently, like besides TVL because everyone is doing TVL game right now and the money is so expensive, I don't think, you know, after token launch we can actually, you know, keep like support this kind of money in the like, you know, in Amenta. But basically, we are more care about the quality of TVL. It means like how many like uh how what is the TVL on the DeFi

protocols divided what is the total like asset bridged into the L2. That is actually like uh it shows the adoption of the money and the capital efficiency of the money in the on the layer two. So, that's why I think it's really valuable. And also another matrix is, you know, how is the like crypto asset you will attract on the TVL can able to use in the like RWA protocols. So, it means actually putting the real world. So, it's it's another matrix to show the adoption like, you know, we work with mountain protocols, we work with, you know, other RWA project. I find, you know, that can actually bring lot of

mass adoption beyond the crypto space. Um and recently, you know, Hong Kong also approved the like ETF and both Bitcoin and Ethereum is actually really positive signs, you know, a lot of DeFi money probably can goes through in go into the trade file as well. So, I think, you know, more and more this kind of matrix can like make Mantle more differentiating. But at the beginning, you have to have a pretty big TVL to attract like dApps build on top of you, otherwise, you know, how can the applications attract crypto asset for the chain is is not possible, I think

the short answer is yes uh and no. The TVL is important, right? Like I mean historically, that's how we have kind of measured value on blockchains. Um mostly like if you see Bitcoin, Ethereum, like all of these are measured by how much TVL they have, how much crypto economic security they have and so a lot of and it's easy to evaluate blockchains by the sort of TVL they uh manage to get. So, of course I will not say that we don't have a focus on TVL. Certainly, there is a focus on TVL in the sense that um rollups on top of a veil should be able to attract the highest amount of TVN.

Uh it's also important for us to make it easy for roll ups on a veil to attract liquidity from other roll ups. So that's why we spent a lot of time building infrastructure that makes it easy for people to move liquidity from roll up A to roll up B, for example, right? Like so if you when you create a roll up you today have to contend with do you have to bridge funds from Ethereum to your roll up from or other roll ups, how is that made possible? And so I think we focus a lot on that to maximize build infrastructure and maximizes enabling of TVL on other roll ups.

So to that extent, yes, we are also very very much track the kind of cryptoeconomic security that the base layer brings. Um so that should that is important because this is like going to be a fundamental layer on which a lot of other blockchains will rely. And so we have to maximize cryptoeconomic security. So that's why at Avail we've kind of, you know, like just been working on an upgrade that not only allows you to stake the native Avail token, but also allows you to bootstrap cryptoeconomic security through staking BTC and ETH, for example. So that is also some metrics that we are focusing on.

But on the larger picture, right? Like what what do we really want to get out of building all this? Is that I mean, I'm in the space since 2017. I've been building off-chain scaling solutions. Like I started with building plasma back in 2017. That was, you know, like the one of the first off-chain solutions. And when Ethereum really changed its roadmap from an execution sharding roadmap to a roll up centric roadmap, right? Like it it became apparent that the shift was going to be in an architecture where there going to be these not all apps on this big supercomputer.

Uh it's going to be where like so this is analogy about apps on the internet where all apps don't really live on one super big computer. We want apps to be on their own servers, scale independently, for example. And so of course we focus on things like TVL and submissions and the number of rollups, but what we really want to optimize for is enabling as you know like uh millions of rollups. And these rollups are not like for most uh people, the mental model for rollups is EVM rollup or maybe a StarkWare rollup for example. But the reality is that these rollups are going to be much like how today's uh web two developers build, you know, like apps, right? Like it can

be in any language, in any uh sort of using any sort of database. It's going to be like within a 6 to 12 months picture. App-specific rollup stacks are going to be so mature that you can write an app in TypeScript or Rust or or something like that, and you can get an app's uh chain running. And so we want to enable that future. And so that's what we are optimizing for, like scaling rollups and then enabling these rollups to talk to each other. Cool. Yeah, so we have about 10 minutes left and I really want to zoom in to some of the personal experience and for like all the panelists here as veteran founders.

Um so we can start with um like um Anurag and because like you were in the space since 2017 and most of my founders from that cohort completely just like checked out because it's so like so like the mental aging is insane, right? So in like crypto. Um so we all feels like boomer already. And then so like what keeps you in the space and from Polygon to Avail and then still just like grind like first day. Yeah, I I mean curiously I just tweeted about this probably a few days ago. Is To be very frank I don't know what else to do.

Yeah, just like so you're just very easy to get bored and um Yeah, yeah. I I like it's basically um like once we went through the journey of building Polygon I just got used to you know I just I just got used to building like I'm just love I'm in love with building these uh you know like these foundational sort of projects uh solving hard problems. That's a window like I used to be in web two before 2017 and you used to work on I would say in the context of crypto relatively boring things. And so like crypto has given me this purpose in

life. I just want to solve these hard problems and I can't see that I'm in a vantage position that I can kind of uh get a hold of these problems, build solutions to it and get them to market. So to be very frank I don't know what else I'll be doing. I've tried spending time away at the beach lounging away for a month but you know I just get bored. I just get really seriously bored. And also to me like Avail is uh one of those foundational ideas that you know like comes once in a while and I don't really feel like uh you know like uh hand handling that to someone else. So I just

I just love building doing what I do and so I just want to continue doing this till I drop down dead. Yeah, that's fascinating. And so for Victor I remember our first time we met and you still have a shining black hair, and now it's a half grayish. Yeah, so yeah, so you were grinding in the Polkadot ecosystem. The Polkadot thing is kind of a disappointing for all of us, and I So, I believe um yeah, so like for any young founders out there, and then so like do you have any advice for them? Because like the alignment like the base chain alignment or the ecosystem alignment is quite a critical decision for them, right? And then so can you just share some of your advice for them just to help them stay from

this hair graying experience? Yeah, I mean like uh it's really hard, you know, like I I think first like we keep our promise, deliver the Polkadot parachain. And that's it, you know, like I I don't want to stay in the ecosystem too much because it's it's really toxic. You know, no one really care about the on-chain activity. Everyone just talking about the like, you know, "Oh, we partner with some like big company like Deloitte." But, you know, they are using like five on-chain addresses every day, but like it don't make sense. But, you know, like uh people just the the the team actually the Polkadot team really support these kind of things. But, when I start to do

ecosystem, I find, you know, there's a lot of builders I should responsible for them. I should, you know, spend time with them and even support more like those projects can really like I have active on-chain activities. That's something I really learn from, you know, how is the like Polkadot's ecosystem treat to us, and we we shouldn't do that to our ecosystem and to our partners. Uh but, you know, like I I feel like, you know, if you choose the like some ecosystem not working at beginning, I mean it's it's fine. You know, there's a lot a lot of opportunities. You can still work in the space, but keep building. Uh like, you know, I learn a

lot actually from all of the builder on the stage. Actually, like, you know, I start to read, like, you know, articles from Dowi since 2017. Like, I got inspired a lot like about the, you know, what you talk about about Zcash, like, uh Ontology. That's how, you know, I start to work at Ontology back in like 2019 like because of, you know, like what is the vision, what they're doing, and uh it's actually like make me keep building like ZK and uh keep, you know, uh try to get adoption like, you know, for our ecosystem like uh builders and uh yeah, that's how how we

keep learning from each other. It's really important. And Anurag is as well like uh and uh I really believe the like what he described like the vision about like light client in the future like replay RPC and all of these vision are really push us keep building in the space. Cool. Yeah, and like Nick has a very unique experience as well, but you didn't change much. And then so we have to ask you, what's your like anti-aging tricks? Like off the stage. Um yeah, so you start as an angel investor, I remember, in last last year, right? And then later on and so it's not very common from like investor and to join the project that you invested as like a

full-time operator. Um so like what makes the decision? So like just uh what trigger you to make the decision there? Yeah, so actually well I I started out as an advisor. Oh, advisor, okay. But well, I, you know, first started I co-founded a project called Harmony, which was building trying to solve the same core problem, which is like solve the base layer infrastructure, make it scalable. Um and when I while I was still at Harmony, I read the Ledger white paper. Uh this is in like August 2020 and it just completely blew my mind and I realized that to me it was the most important uh innovation in blockchain since Ethereum essentially. And um the more I learned, the more it made sense. And so I started

to just falling down the rabbit hole and my mind was just like on fire and I was like consumed by this idea and I couldn't like put it away. And so uh even though I was quite burnt out from like 2 and 1/2 years at Harmony um and I took some time off, I just like I kept coming back to it and I was like I need to I just I want to work on this. I like I don't even That's a calling, right? Like that's a calling. much a calling and I was like I don't even really I don't really care about anything. I I was actually one of my messages to Mustafa, I just said I I just want to like make history because I think this is a historic idea and project and I want to build it with you.

Cool. Yeah, so for Zong and you have like good experience and it's a very intense experience in our space. Um yeah, and so the Terra experience while and and then so like after Terra and uh what makes you still stay in this uh Cosmos uh product Cosmos ecosystem? Because the Cosmos is like quite like the So I've known many like Cosmos developer and they're completely traumatized by Terra and then so they just like rage quit like Cosmos and to like alternative ecosystem. Yeah, so so like like what is like the mental um like the mental pathway for you to stay there?

Right. I think um just the Cosmos SDK has always been the most flexible stack to build unique blockchains and we're seeing this right now. Like Celestia is a Cosmos SDK blockchain, Berachain is a Cosmos chain, Hyperliquid, uh Osmosis, dYdX V4. Everything that's unique and new within the execution space or the application space is built on Cosmos SDK these days. Um, I think some of the fundamental problems with Cosmos were that it's just too difficult to actually build a Cosmos chain foremostly because you have to run an entire layer one, which means you have to have a validator set, you have to inflate your token supply, and these things are just a pain to deal with. Um, and so at Initia, we're kind of

uh, building a better version of Cosmos in a sense without so many cooks in the kitchen. So, one of the big problems with Cosmos was that there's just way too many teams developing on the same piece, and it leads to fractionalization and fragmentation of not only liquidity, but also products within it. And so at Initia, we're rebuilding this entire stack ourselves, um, and so that we can shape the vision how we think it should work. Um, and I think that's why I've stuck around with Cosmos, and now teams can build application-specific Cosmos SDK chains on Initia without having to deal with validators, and through our layer one, they're provided with literally everything they need. Instant bridging, native USDC and CCTP access, oracles,

um, interoperability between all the other layer twos, um, the ability to use EVM, Move VM, and Wasm VM, literally everything that you might want, but in the most lightweight way possible. Cool. Okay, I think we are perfectly on time, and that's pretty much it for today. And I want to do like a quick selfie for all of us, and yeah, so like if we can see each other again in like 2049, like the actual year like 2049, and then we will see who has had the best anti-aging tricks. Um, let's do it. Let's do it. Okay.

One, two.