Epicenter Podcast Live at DappCon in Berlin

Transcript

hi everyone thanks for coming welcome to the second edition of epicenter live here from Def Con thank you for being here and such large numbers so you know we did this the first time at the cosmos interchange foundation conference in June was it and thought it was a good idea to you know keep doing this when we come to events as it allows us to you know put some faces on our audience likewise for you guys and and also get some questions from the audience and put that out on the podcast so first I'd like to address this conference oh by

the way I'm sitting with you oh I'm the host of epicenter and I'm joined today by i'm sonia agarwal and almost the co-host of epicenter work on a bunch of different things including cosmos and bunch of other stuff i am free to be kannst i'm also co-host epicenter surprisingly and i'm also the CEO of gnosis right so before we start off it's like to talk about this conference and Berlin blockchain week specifically so if I can you worked on organizing this conference tell us a little bit about that journey and how things have changed since last year when you first did the conference sure so we actually put this together because we thought it would be

super nice to have a conference dedicated to the apps and this is what Def Con has always meant to be last year we had around four or five hundred attendees this year it's way more I think we're at 1,300 or something and I think I think it we want to create a venue that lets people network and learn about the exciting projects in the space yeah that's really impressive it you went from 600 attendees to 1,300 attendees do you think that reflects growth in the space generally or like what do you

attribute to that growth and it um I attributed to growth in villages so I think this is very much a conference that is centered around building I mean there's other business centered conferences and conferences that are [Music] centered around what I would somewhat deep depreciated Lee calls speculation and this is very much not one of these conferences this is very much a conference it was meant to be for people who build and for people who are interested in apps that are being build and in driving user adoption and yeah I

think I think despite the market being what it is I mean it's recovered somewhat but I think this has had a surprisingly little impact on people who actually brought the apps yeah what I like about it is that it it kind of the talks and the topics that are discussed here are on all different levels of the stack right so there are talks about about - themselves and the applications that people billing but there also some technical talks and so there's sort of something for everyone I'm not respective any what do you think yeah so I mean when you say DAP it's a conference really focused on gaps where do you what are you define as a DAP

what's the bout like you know what core protocol stuff be considered DAP sore is like defy considered a DAB what's the boundary of what a DAP is that's that's actually a very good question so I think we this has shifted somewhat so basically before when we actually organized the first conference we said it's it's going to be centered around taps only and then it expanded somewhat into infrastructure because basically we're still in the infrastructure phase we still need to build a lot of the building blocks that we're actually building on so you can't really exclude that from the conversation and this is why it it's kind of it's it's crept back in and I think the conference is better for it we also expand the other way so basically we also look at governance and

legal questions just because that's that's the other constraint right so um yeah so would it it's the scope has been enlarged somewhat but we think it makes sense the way that it is right now yeah I want to talk about the infrastructure building phase a little bit because I'm a little my position another somewhat new ones but let's talk about this state of the ecosystem a little bit and you know how things evolve have evolved since last year and I think a lot of things have changed in here if we just take like this conference as sort of a milestone what in your in your minds are the most apparent evolutions that we've seen in a

year I think every conference I've been to this year has had some sort of burner wallet that they've been giving out and like trying to encourage people to use like usually die or something like that so I think I know really a focus on that has really been like what I noticed that every single conference I've been to this year that wasn't really there last year yeah I realize this morning that I had 20 cents of ether in my in my condo gift bag no survey a proof of attendance protocol right yes at Ft there and then yeah I so I guess you know another one is definitely much more focused on I think NF T's and D Phi and those a lot of like people are quitting like Cola collectibles and stuff so yeah and if Kizer

just seems to be everywhere at this conference what are the interesting use case is that I mean it's kind of cool to have these enough teas right like proof of attendance and and and it's a neat experiment but like branching off into actual use cases where do you guys feel the that that could be used outside of the sort of crypto space oh I think there's really no limit as to what they can be used for right i mean so basically if you think of your daily life the minority of things are actually fungible so almost everything is non-functional so basically saying what can may be useful to me is a little bit moot because they can be used for

literally everything so yeah I mean I I think that like the collectibles use case as far as a nice use case actually I think that's probably one of the more useful ones and I think it's what it's doing is it's helping getting the UX figured out for when we actually have real more useful stuff coming onto the system and I I think that's what a lot of this stuff like you know a lot of the I know a lot a lot of like the things people are talking about it I know there's a lot of talk about get blocks in gaming and stuff I think it'll make me maybe a bit more last year but and I I originally I was always very like that's a very like lame use of block chains like that's

like why are we even focusing if that's what this is used for like why are we even doing this but then you know I think I came around a little bit where I'm like okay maybe we can just I can take this in a positive spin which is like oh all this effort being put into gaming is more just helping get the UX right and that way when we have actually more useful stuff coming on we've actually practiced the UX with this gaming stuff hmm yeah that's a good point like so they the gaming is is a bit of a playground sandbox if you will and we're getting to experiment with this stuff until until which point the UX and and we feared it all became stew be able to implement it in sort of a

real-world scenario for like more serious quote-unquote things I think one thing that I saw yesterday I saw Jared's talk about embark and although I I've sort of followed embark a little bit from from a distance I was really impressed by the quality of like that tool kit and I think that's what one thing probably if you compare it to last year developers coming into the space probably like I had a lot of onboarding and the the the learning curve must have been much higher I mean I'm not a developer but I can just imagine now after coming on as a slowly developer

and wanting to build an application you just like npm install embark and you of your tools they're sort of in one place is that something that resonates with you guys to like on the toolkit side I mean I know like probably more relevant ignosi yeah I think I think that's one of that's one of the area's that's improved a lot I think what to me is the major difference to last year's that they are actually now apps that people are using for real-world use cases so things like compound or you know unis we are like fully decentralized apps like unit swap and dydx and i mean it's it's being used and and i I think that the uptake is going

to be much greater next year and I mean this is I to me there's a super promising so last year I mean there was makeup and people were opening CDP's last yeah but that was more or less or the extend of DFS being used and this has changed completely I mean now you can interact with many protocols and it doesn't really take a developer to it and to me that's that's a major of difference hmm so it'd be you know I haven't done a it's a large scale a theory flex leti project since like maybe early 2018 the last like large thing I did was a the peg zone for

cosmos a theory on bridge and that you know that and there back then I you know even then I think that tooling was already getting better than what I was working on like a year but prior back in 2017 when I was that consensus and so I'm sure the tooling has gone better even since then but then I think the other thing is as well where I think there's a lot more frameworks that are being built right now and so I think I you know it's really cool to see a lot more applications being built using things like the cosmos SDK and parody substrate and stuff and so I like that that that the range of tooling for building applications is increasing beyond just one framework which is what we've traditionally had so far it I'm

looking forward for like more smart car oh and you know I know Viper adoption has gone up as well like you know Eunice WAP is actually written vipir rather than in solidity and so I like to see that the range of options in developer tooling also be increased mm-hmm but so let's talk about defy a little bit more and and how that plays into adoption because you said like a lot of people are using these tools now and I have a someone who wants to you about that but I mean we can get into it but essentially might my my my whole thing since we've been here is that the metric that we should be looking at

collectively as a space is month monthly active non non crypto savvy users or like monthly active non crypto nerds and although there are like a lot of tools at compound and maker and and and and even like the wallets that allow you to interact with those things like argent and all these tools are becoming more and more mature and the user the user experience is great and onboarding is great and all that stuff and you can actually use them and gain interest the number of people that are entering the space that are I guess like your quote unquote normal user like they're not like my parents or the friends of mine that I have nothing to do in the crypto

space I don't think that those types of people are I don't think that we're seeing growth there generally do you agree with this and do you think this is a good metric to evaluate the success of the space so question though is that a fair question when you say how many non crypto nerds are using this stuff because I feel like as soon as someone starts using it we start calling them equipped or nerd I mean I would love to be in a place where people are entering the space and they don't really care about coming to say like cryptic conferences and understanding the technology but just are using compound to like make interest instead of having

a savings account for example yeah I guess I you know one question I've been thinking about is most of the defi stuff on ethereum hevelius you the only reason you'd participate right now is your assuming that the price of ether is gonna go up the reason you you know you're the reason you take out and make our CDP is because you want to still be exposed to ether while you know having some liquidity to die or the reason you you take you use compound is because you know you're you still want to be exposed to ether while you're you know and so that's no I am kind of curious as to like how much defy adoption is coming from people who are not just approaching

it from a speculation aspect okay I I just I do get where you're coming from and I think there are things that we could do collectively as a space and to make it more welcoming to other people and also more useable to ourselves so I mean there are things that where I'm not quite clear why they're not why they're not more widely used and so I mean obviously we can always say they're scaling and things aren't fast enough and transactions are too expensive and so on but that's that's where we're at that's what we have to deal with but you know setting that aside and saying this

is what we'll work on there are still things that we can improve ourselves for instance and it strikes me that smart wallets are actually currently underutilized so basically things like argent and the nose are safe and what they in principle what they allow you is you know when you use meta masks and it asks you to set a permission and then do you need to chance to a second transaction to actually do the transactions I mean that's really bad user experience and intensive principle with smart wallets you don't have to do that you can wrap them but basically the app developers have to be aware of that and have to build that into their the

apps and I think this for instance is one thing that make it much much easier for people and much I mean I think eazy-e's maybe not the right word but it is it'll be more seamless and it is feel better and it feel it it'll feel like a more a more consistent user flow and it'll make people less worried about what they're doing it will make them less suspicious and it'll feel more natural in in using it and I think this is going to be despite the fact that that from a technical point of view it's not difficult it's not something that's it's not something that's not there now

it's something that you can build with very minimal additional effort and but I think it'll make the user experience for everyone much better do you think part of the user experience issue is that people need to have either in order to participate I think for the people who are currently participating it's not that big of an issue but I think in the long run yes I think it's going to be an issue and I think this is also something that we as noses had anticipated would be an issue and I mean basically what the noses save allows you to do is to pay gas in other tokens by a relay service so you don't actually need to a

hold either in order to to transact even like any token like yeah the common person doesn't have not they don't either but they also don't have like any RC 20 don't have any crypto in general and like you know for example the cards that we got at the registration they have like the proof or attendance protocol token on it but you know he had to load it with 20 cents of ether so that people could actually you know withdraw that move that token from that card on to their own account and that's like it that's like an additional 20 cents like per user acquisition cost and that's like it seems almost like a sunk like silly cost acquisition cost that's being act like an additional acquisition

cost that crypto companies have to deal with I I agree um I think this is not something that is currently limiting crypto companies and I think basically having meta transactions and having people's subsidize these costs in order to to gain adoption is something that we are seeing more and more and we're seeing it now so I mean basically this is one of the one of you know first and foremost you use cases of meta transactions that what they're actually being useful right now yeah I mean so this morning I was like going through my my argent wallet and looking at it with like a fresh pair of eyes almost as though I was in the crypto user so it's like looking so as someone opening this wallet for the first time a lot of the crypto stuff is

kind of abstract it behind the user the user experience and even there's a function in there where one can I think you can buy with your credit card at least like with with my account I think you could so it seems like anyone who's reasonably savvy about investments maybe not like Joe everybody but someone who's like reasonably savvy about finance and investments and like is mindful and considerate about where they want to place their money mm-hmm medium to long term whatever could open this app and say hey like I can get 10% returns on whatever this thing is okay like I'm gonna buy with my credit card and try it out so the gap there between being just like a revolute account is and like a

crypto account is actually narrowing what's what what does it take to get maybe you know ten thousand a hundred thousand million users to onboard this thing and like to benefit this yeah so I rate interest rate I totally see that but I think there's there's two conflicting things here right so basically as far as I know Arjun still is invite-only right so basically because they're actually paying for the deployment of your smart contract so they can't open that up up to everyone and I think the people who need these things to be abstracted away from them these are not the people who are currently using them or who want to use them so I feel like there's somewhat of a disconnect between so for instance and things like would

you actually want to be able to set how much gas you're paying for a transaction so I think the people who are currently using these wallets yes absolutely they were totally said this and they would be comfortable setting this um but we're still extracting it away from them in anticipation of who we who would actually want to use this wallet and these are the people were currently not on I yeah so this is kind of the disconnect that I'm seeing I'm not sure how to tackle it yeah so you think there's a the cost to onboarding users is is quite high and might be a hinderance for for corporate companies to the guan bore like tens of thousands of people at once yeah I I do think that basically onboarding people onto a smart contract

while it's is currently costly if you scale it up yes hmm I mean I'm just thinking of this but would it be I don't know if it's technically feasible to do this but where if you onboard maybe your your smart contract while it gets created the first time you you put money into a compound account and then the the interest that you get on the compound account like the first whatever 20 cents or 50 cents would go to pay the smart contract to you but I mean then then you actually have the then you actually have ether right so then you are actually also okay with paying it up front yeah and I think it's more about people who don't so basically currently the way that it works is if you if you're not in the space yet you need to go to a centralized exchange where you can do a

fiat on Ram so basically you need to you can pay with your credit card to actually get ether and then you need to move it to a to a self custodial may be smart contract wallet and in order to pay for the do for setting that roll it up so it's just yeah I feel like someone's gonna figure this out will build like another smart contract layer on top where like it it allows you to do that kind of thing so once we have the users on what are they gonna do now what do we expect what we have them on a wallet they have somebody think it yeah they're smart wallet what are they gonna do on a theory of no yeah so I think basically if you look at the apps that have taken off in the defy space I mean it what comes to mind to me is is make a

yuna swap and compound these are the three things that actually have meaning for a volume on them and with if you if you take away make a governance all of them are extremely simple so basically the offering is super simple and I mean we had Robert on the podcast a couple of weeks ago and he's he made a deliberately sample and he knows that the model is wrong it but he thinks you know if it doesn't matter you know you want people using it and you can get it right next time it's fine just you know make something that people will will be comfortable using and I think with with compound he's actually achieved that so it's like

people are using that for you know it as a money market and yes absolutely the the the way that he calculates how much interest you you make on whatever you actually put into it into the contract yes it's them you can you can easily find fault with it because it's extremely simplistic but I think basically not over designing and not not going crazy on the mechanism design this is something that that this space really can take from the success of compound and maker and you know swaps so I think we have about ten minutes left here and

I'd like to open it up for questions but one last thing I'd like to touch on is this idea that we're currently in the infrastructure phase and people I think people sort of hide behind that notion that adoption isn't coming because we're need for structure phase at the moment I would argue that blockchain and cryptocurrency in general has been in the infrastructure phase basically since the beginning because like this metric of like non non monthly active non crypto nerds is not growing to the extent that like five years ago I thought we would be at that you know five years later so my analogy is you know if it feels like we're building a massive airport and people are coming to the airport and people are working at

the airport and there are businesses and hotels around the airport that are hosting the people living at the airport that nobody's going to the city and there's actually nothing at the city where the airport is located right so it's like all this infrastructure but but no use cases I see I see that but I would actually object to that so I I think what we're currently doing is we're scoping out the potential so we're kind of we're met bring out that put the the the possibility space of things that could be built in this space and I think that's roping in more and more people and if you look at how many people kind of have you know an inkling of what's going on this in this face I think that

this has increased dramatically from last year might only obviously they were the transaction volumes last year were crazy because of speculation but if you look if you if you take away the speculators and if you look at people who are actually interested in who care what's going on in the space and who care what could be built I think that is increasing what do you think Sonny yeah I mean III think the yeah I think it's actually interesting to like you can actually like see this within different communities I feel like the Bitcoin community definitely sees it as oh the infrastructures done what we have right now is perfect actually no you know what Satoshi had in 2009 that I was perfect

actually and like and they're kind of really focused I guess more on the adoption they kind of changed what they mean by adoption in my opinion over time but you know it seems that they tend to be more on the adopt like focus 100% on just like going out and like shilling Bitcoin and making sure Congress knows about Bitcoin and everyone and their mothers know about Bitcoin while the etherium community kind of seems to be a little bit more in the infrastructure phase and more like heads down building and I think you need a little bit of both I think like both are kind of valuable mhm yeah I mean to come back to the analogy to me I agree that you know that some extent we're scoping things

out but there is there's such a gap in between the amount of infrastructure that's being built and like people building layers and layers and layers and layers of infrastructure and an actual use case and you know one could expect that to grow kind of something seriously side-by-side but I mean at my feeling is that at the moment maybe that will come maybe the fact that we now have compound and these sorts of things will bring a lot of these new types of users in like my friends from high school who are into crypto or you know my parents friends or this sorta stuff like maybe that will happen but I feel like at the moment anyway there's still a large gap between like the amount of work that's being done infrastructure

and the actual returns in terms of adoption and yeah so basically III wouldn't really see it as work being done for infrastructure yes infrastructure is being built but most of what's being done is actually knowledge work it's actually us understanding how to best fit these systems and understanding how to set up the IT infrastructure and how to build services around it and what to do for scaling basically just I mean basically this is something that you can't figure out on a table a blank sheet of paper with a pencil it's something that you know you need to build and you need to see how does this actually pan out and how do these things fit together and which which which way can we actually combine these things to make it work

well I I hope that next year when at the 2020 DEFCON won't have lots of non non crypto people and you know Venezuelans single moms and you know all these people that were hoping to on board and start using this technology like for the better of their lives so I'd like they open up to questions if there's anybody out there who's got questions on anything we discussed or questions to us I don't think we have any questions all right and there's nothing on the slide

oh so I guess what are you most excited for going forward like what did the space is exciting you the most right now there's so many things so basically at this conference I spoke to someone yesterday who had spent their lives building settlement systems for banks and he was ready so basically he had gotten into a crypto in a full-time capacity recently and he was super excited about the things that can be bad and to me it's those kinds of conversations that make me really hopeful for this space so basically people who still see the potential i mean basically all of us

we've been in this space a long time and for us it's kind of worn off a little bit but you know this excitement of when you hear these things for the first time and how you can do peer-to-peer transactions how you do can do peer-to-peer contracts and transfers our values and smart contracts and all of these things and seeing more people you know I'm not going to say get suckered into that but you know more people get drawn into that and I think to me that that's the most exciting thing and to me I'm super looking forward to next year to see what these people are building and the people who come after them and basically the people who haven't always been in the space but who've had careers before others and who've seen the

potential of there's enough moving into the space now are there any specific projects or use cases applications that you're really excited for coming forward so I mean I I may be slightly biased here I'm I'm super interested basically prediction market so people in the crypto space have talked for them talked about them for a super long time and aquas been life for why now and veil has been live and shut down but I think that the what what experience has shown is that maybe you actually need to do this

in a regulated fashion because it is seen as a financial product or a financial tool and I mean not being I mean as decentralized as technology may be people typically are not and being shut down is not not a great thing so I'm very much looking forward so basically two or three years ago there was a survey on coined Telegraph what's the thing that you're most looking forward to in this space in friction market actually came in at number one at like thirty three percent or something it's like it's crazy so people in the space are really excited about this and I'm looking forward to having friction markets with good market mechanisms that won't get shut down after a couple of

months cool yes/no questions on the audience all right well thank you for coming for for being with us for the second edition of a person alive so a few announcements of one we're doing a meet-up this evening if you've signed up for the meetup the venue has changed and so I sent an email to all of you who signed up already and if you're interested in coming to the Meetup go to our telegram epicenter podcast and the address there that's at 6:30 we'll be having drinks a beer garden next door and yeah if you don't subscribe for a percenter good appcenter TV slash subscribe for a full list of places

where you can listen to the podcast we release new episodes every week and cover the blockchain ecosystem at a high level all aspects of the hwachun ecosystem we'd be happy to have you as a listener thank you [Applause]