The Multi-Chain Avalanche - Emin Gün Sirer. Ep. 600

Transcript

to scale you have to have this many chains working as one notion and that's been proven and there is none other than Avalanche that has really pushed that vision forward and now what we need to work on is single chain performance that's what uh I'm spending a lot of my technical effort on these days we we need to to uh get a single chain to work super super fast without compromising any crypto principles without cutting corners without doing unound things and uh the hyper SDK effort is a construction production kit so you can build a specific bespoke VM for your use case. And as a result, we've been talking to a lot of Wall Street firms and uh there's a lot of demand for walled gardens, right? These people have

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DAO drives Nosis governance where every voice matters. Join the Nosis community in the Nosis DAO forum today. Deploy on the EVM compatible Nosis chain or secure the network with just one GNO and affordable hardware. Start your decentralization journey today at nosis.io. Cool. Well, it's so great to see so many people here and what a beautiful space this is. And um yeah, so my name is Brian Crane. I've been in crypto for a long time. Actually in 2013 I started a podcast called Epenter which um we are still running and at this point it's the oldest crypto podcast and one of our

most frequent guest pretty much almost at the top of the ranking is uh I mean Gonzer who we've had on so many times actually from way before Avalanche even when way before it goes back a long ways all the way back to selfish mining days selfish mining bitcoin NG. Oh yeah. Um so he was at the time he was a professor at Cornell and he was doing some of their most interesting papers really on an academic research on Bitcoin and cryptocurrencies. Yeah. When we were getting attacked by the Bitcoin maxis for all the scientific work. The the Epicenter podcast was the one that actually, you know, gave us a platform to get the story out and uh and they were the most scientifically driven

podcast out there. So it was always a welcome thing to go there. It's wonderful to have him here with us at the summit. So, you know, there's a there's a lot of uh bromance going on between the two of us. Always has been. So, also the Avalanche paper now came out 7 years ago. Uh I think Eva Labs you started seven years ago as well. It's six. Yeah. Six years ago. Of course. Now, you know, big conference here, so many people like a whole ecosystem has emerged. like when you look at the Avalanche ecosystem today, what are you most proud of? So yeah, that's a great question. Um, I'm really really proud of the the community. That's I think what

we managed to build of all the things we did. You know, we did a bunch of technical decisions, a bunch of new technical developments. We brought a lot of a lot of new science into the space and we ended up delivering that which other people promised, right? You know, uh, when we started, Ethereum was proof of work. They didn't know how to do the transition. We showed them how that it was doable and that you could build really fast finality systems. You know, by the time they pick it up, you know, they get two and a half minute finality and we have sub-second finality. But but you know, we showed we paved the way. Um I'm really proud of all of that. Sure.

But really, it's the community that we that we managed to to assemble uh that that brought us all of these new Avalanche L1s, that brought us all of these DeFi protocols, all of these games, all of these exciting developments that are happening on top of us. I think that's really uh that's really the thing that I'm most proud of and that's really the thing that I spend most of my time uh worrying about, right? um you can have the best technology uh but it has to be coupled with the people that really push it and in getting the word out building that community has been I think both the greatest challenge and and probably my proudest accomplishment.

Cool. And now looking into the further future if you think like five 10 years ahead what do you want the avalanche ecosystem to look like? So I think uh I think it's pretty clear where we're headed, right? We showed the world that that to scale you have to have this many chains working as one notion and that's been proven and there is none other than Avalanche that has really pushed that vision forward. So uh so we showed everyone how to do it. Interoperability should be built in from from day one and uh and you can't fracture, you know, you got to have an architecture that doesn't fracture you at the social level. and and I think it's been interesting watching other chains make those mistakes. So where are we going with

this in 5 to 10 years? Well, um so we showed everyone how to do the multi multi-chain thing and now what we need to work on is single chain performance. That's what uh I'm spending a lot of my technical effort on these days. We we need to to uh get a single chain to work super super fast without compromising any crypto principles without cutting corners without doing unound things like loading your state from Google cloud can't be done like uh like cutting out verifiability of the chain you can't do that uh there are a whole bunch of things that uh that other people have done to get speed and I believe that we can build things that are faster than what they've done without actually doing those compromises. So that's I think

where we're headed and um and at the sort of the scale above us, at the level above us, at the political level, there are a lot of exciting uh changes happening. Boomers have now picked up on coins, right? So we're seeing like, you know, this this resurgence of interest in Bitcoin. Fantastic to see. Uh we're seeing politicians, you know, get excited about memecoins. Wonderful. But then the next level up from that is going to be programmable money. And they haven't picked up on it, right? DeFi like Trump doesn't know what DeFi is, right? It's that's that's he hasn't gotten there yet. And it takes people like what, six months to a year, maybe two years if they're savvy. So, so it's we're going to get there. Um, and when those uh those those changes happen at

the societal level, that's going to unleash another another uh spurt of growth for the entire ecosystem. Companies ought to be building their business uh flow on chain. um DeFi and financial rails should be powering everything of value. So that's that hasn't happened yet and that's coming. That's what I'm super excited about. So you talked about the scaling of the L1's. I know there's a lot of work that has gone into hyper SDK right so having you know a special SDK for building your purpose special purpose chain of course today most activity on avalanche and then I think in many ecosystems happens on EVM.

What do you think is the role of these two in the future? Do you think mostly it will be hyper SDK or will it be EVM or EVM on HyperSDK or like how do you see that play out? So uh so for those of you who don't know what Hyper SDK is, it's uh it's really a construction kit for building your own virtual machine. So um uh so those of you who've done how many people here have done solidity programming? That's a fair number. So if you did solidity, how many people have done solidity on EVM? It's about probably the same number. It's uh and how many people have done solidity not on an EVM? Nobody almost I think very few. So uh so as you can see the the default path that gets people programming

writing smart contracts is is one based on solidity for the EVM. That's why when we started we decided okay we're going to we're going to adopt this. One of the hardest paths to change is the social path by which people get into the space and that path directs them to the EVM. So we will inherit the EVM with all its flaws. It's not how I would have designed a fast virtual machine. They made a lot of mistakes there. But we'll take it and we'll show the world how to build it faster and that's exactly what we're doing. And um but for those people who have highly demanding needs, we wanted to provide a way for them to build their own virtual machines. And uh the hyper SDK effort is a construction kit. So you can build a specific bespoke

VM for your use case. So if you have a very demanding dex uh if you have a very demanding game for example, you can build your own virtual machine with its own op codes etc. This is it's hard work, right? This is beyond the scope of most normal programmers and and it should be it's it's a it's a big undertaking. So uh what's what's going to happen moving forward? Well, I think exactly what has been happening. We're going to continue to support the Hyper SDK and the construction kit. Uh but we don't expect most of you to use it and and as you can see like most people are not using that. You don't need it. And uh uh the learnings that we pick up from the Hyper SDK effort from the

construction kit we want to take and apply to building a fast EVM. So the EVM has for all its flaws has a lot of popularity and uh and it's possible to make it go a lot faster than what's been built so far and uh and we want to use the techniques that we have built into the hyper SDK effort and adopt it for for the EVM. You mentioned um the the issue of interoperability right? So it has been one of the big challenges right of application specific chains is that you know you have some fragmentation of liquidity of the user base can be user experience issues and and so today still right we have this

big contrast of visions where on the one hand you have the vision of like you know many L1s that you know probably have some kind of interoperability standard versus you know single high performance maximum throughput chain you know you see Salana, Monad, others uh pursue. Do you like how do you see this play out in the future? And do you think we'll we'll have both or do you think we will have uh also applications where you don't even notice it's on different chains and the the user experience is so extracted? Um so let's see. So this is a great question, right? What's what's going to be the multi-chain future of the world? And um so uh let's see in the in the short term we're going to

continue to see what we've been seeing which is uh c these uh new chains are going to come up. They will have specialized use cases. Solana has attracted the memecoin crowd for example and that's a fine place for them to be. It's okay if you want to go to the memecoin casino then then everybody pools themselves at some location that's chosen um you know it doesn't matter how it's chosen but you you want to be with other like-minded people you go there that's fine. Um but in the long term the network effects are so strong that uh that we we will see let's say okay let me actually go back in the 70s and 80s when networking uh equipment was being pushed there were all sorts of contenders there was data kit there was you know all sorts of uh proprietary

protocols for connecting computers and then came the Ethernet and now everyone at home has Ethernet cables right you never hear of anything other than ethern Ethernet. It's just over time it's going to be a one one system takes all. And how did Ethernet succeed? It was cheap, easy, fast, universal, and it was interoperable. So that's what we're building. It should be very, very, very easy to build your own chain on on on Avalanche L1, and it is. It should be very easy to have it interoperate, and it is. And it should be seamless to connect, and of course it is. So in the long term, if the network effects just create a funnel towards you, uh you're going to be the dominant winning player,

and that's the big game that we're playing for. So in the short term, yeah, of course, stuff will come up. Monad will come up. I don't know, all sorts of uh new new things will come up with a fancy thing, and then they'll fizzle out. A lot of them fizzle out. Uh but the big winners here are going to be those that do the Ethernet play properly, and that's exactly what we're going after. for Avalanche L1s. I'm curious. So today a lot of them launch in a fairly centralized way, right? And then I think there's the idea that with time uh they decentralize more like what do you think is the right degree of decentralization and what time horizon for the L1's?

That's a great question, Brian. So um so let's see we can ask the audience, right? So uh what should be the right level of decentralization? like think about that for a second and if we sort of you know kind of like look into you know I don't know like look at like whatever application you might have in mind um the level of decentralization you demand will vary there is no way that there can be a single answer to this question right I don't even know the units of decentralization let's call it like you know one one Nakamoto or whatever right so you want to achieve some some amount of decentralization you certainly don't want anybody meddling in a system uh in a manner you don't understand or expect and and you need

that. But what does that mean? It's different from a game. Uh it's very different for a DeFi application, very different for uh for a governmental application. It's it's just it's a continuum. So, so once you realize that then it should be obvious that a single solution cannot possibly satisfy everybody. like we have I don't know how many people in this room but undoubtedly the amount of decentralization you demand cannot all be the same. So if that's the case then how can you expect a single chain to possibly emerge as the ultimate solution? How can Solana for example which is a single chain solution? How can Ethereum which is a

single chain solution possibly meet all of these co um conflicting demands at the same time? It can't be possible. The only winning solution here can the the only way to win this game to to satisfy all the different needs is to have a multi-chain solution where different chains have a different level of decentralization depending on the use case. A game for example starting out might be very very centralized and then it opens up and becomes more decentralized. Um you know governmental applications can be totally centralized and and provide only auditability. Um and then there's a whole slew of solutions in between. So um so that's how I feel about this. We have to be

able to provide to the users the ability to select the level of decentralization that they need for their application. And that's one of the key tenets u that helped us when we were designing Avalanche 5 years ago that that we need to be able to meet these deferring needs for different applications. So let's talk a little bit about the the use cases at the moment. Institutional adoption is a big thing that's happening. I think Avalanche has always been like very early and like very deep on the institutional focus. You know, I think Avalabs is certainly one of the teams in the industry with the best you know BD institutional focus. what are the use cases that you feel are the most

promising and where is going to see the most traction in next one to maybe 3 years. So, um, yeah, that's exactly right. We ended up, uh, I think I mentioned this yesterday. We ended up moving to the most contested, the most regulated real estate in the world, right? We moved to Manhattan, well, Manhattan/ Brooklyn. We moved to New York City. Um, and that's because we wanted to be close to institutions that uh that that manage large, you know, asset bases. And um, and as a result, we've been talking to a lot of Wall Street firms and uh, there's a lot of demand for walled gardens, right? These people have assets that are highly regulated and and they have to have certain requirements met and enforced and they need bespoke solutions that

that meet those requirements and um and one of the very common things is are certain specialized markets for for groups of uh groups of companies that are cooperating towards some end. So we're building a couple of these uh for for Wall Street. I think we uh have announced some of them uh with JP Morgan with the price etc. they those are all been made public but there's a lot more in the pipeline that I'm really really excited about and expect now that there's more regulatory clarity expect all of these uh these consortia to to gain speed again everything came to a a standstill at some point I would say maybe around two years ago so um there was a lot of interest and then after FTX everybody took a step back and after

operation chokepoint they really slowed down and uh but now interest is back up again And uh and I think there's going to be a lot of exciting institutional solutions. And um how how many people here have actually looked at the software? How many people here have worked in Tradfi? That's quite a lot. And so you've looked at the software stack uh that people are shaking their heads and yeah, you know how messy it is, right? the the amount of effort that goes into reconciliation, the amount of effort that goes into making sure that my database and your database are coherent with respect to each other, that the trade that I think happened at this time, you also think happened at that time at the same price. That effort is

so immense and those layers and layers of software so complicated and the error cases so so bizarre that the moment you see the blockchain solution, you said this is the next next level. like this this has to be the new rail. So those are coming and so those bite temporal databases like these databases that have multiple sense of time like the time I think it happened and the time you think it happened and all of that complexity needs to go out the door. Everybody realizes this and those crazy layers of software just to maintain some illusion uh of of of coherence between two different parties it has to go away.

people understand the value of of blockchains and auditability of course as well. So um so it's coming um and institutions are excited again uh regulatory clarity will clear the path. The Genius uh act is is making its way uh through Congress. So uh I'm thrilled about what's to come. It's the next four years is going to be one of regulatory clarity and opening up on the social side and um and I think the era of constantly waiting for some uh some shiny crypto object, you know, cryptography object um is is over. Like remember how VDFs, verifiable delay functions were supposed to save the day?

remember how verifiable random functions were going to allow Ethereum to scale and then uh accumulators were going to come in and that didn't work and there was VK ZK EVMs were supposed to save the day those are gone the days of selfies with Vital like much as I love him and we're very close friends those are gone and I think he's relieved as well right so um so we never played that game but a lot of other people did and and you know and I have to admit what have they have those has been replacement. Now it's time for selfies with Trump, right? So boomers are getting into the game and they're slowly figuring their way out.

But in about a year or so, it's going to be the time of actual use cases and I cannot wait because that's where we're strongest and our our ties our decision to go into where the assets are in New York has been an amazing decision and and I cannot wait the results of uh of of those efforts. So for these efforts right where you bring traditional assets on chain I think everyone probably who has you know used crypto for a while can feel the the advantages of it but one of the big challenges I imagine is around privacy right because today still right you can there's actually a lot of privacy in the traditional financial system or decent amount onchain is a lot harder what do you think the privacy

requirements are be are going to be to bring finance fully on chain. So, so far until like until recently, uh it was very binary, right? Either you you worked on a public chain and everything was visible to everyone or you used something like Zcash solutions where everything was completely opaque and and often there were bugs and so forth and you couldn't even audit how many Zcash were outstanding etc. So, there was no middle ground and that's not a good situation. But we recently uh we released something called encrypted ERC's. So um uh this came out of our work with uh various different uh institutions again uh where people wanted to build consorcia but within the

consorcia they they want to cooperate but they don't want to reveal how often company A does business with company B but they want it to be auditable to a certain set of parties. or in Wyoming, for example, again, they want to be able to use stable coins for a lot of payments. They want the regulator to have full transparency into what's happening, but they don't want the participants to see exactly how much money everybody else has, exactly how much money they're sending to each other. Insanely reasonable requirements, and they there was no way to meet them.

So, to to respond to that need, we developed something called encrypted ERC's. And there uh the uh there's a level of privacy that's granted to all of the players. There's an auditable chain uh and and there's a very uh there's an ordered timeline, a way to to uh go back to the beginning of time and verify all of the the results. And yet there's a way to mask uh amounts and senders and recipients uh from each other if necessary and a way to expose everything to regulators where necessary. It's all adjustable. So that solution is coming and it's one of the big differentiators and it's one of the the main reasons why we've been uh fairly successful meeting the needs of

these highly demanding you know financial use cases where privacy is paramount. So that will be on the Cchain and and available for any um you know EVML1. Yeah, exactly. I think I'm not sure if it's on the Cchain today, but uh all of the ER ERC code has been made public. It's under the Avalanche uh ecosystem license. So you could just take it and and launch it on any chain you like. Could be on your Avalanche L1. It could be on on the Cchain and then get take advantage of all of those privacy features that I just talked about.

One one thing I'm also curious about. So there's Ava Cloud. What's the vision for AA cloud and the role Ava Cloud's going to play in the future? Yeah. So Ava Cloud is a so it's important to understand the difference between Avalanche and Ava Labs, right? Ava Labs is the the company that provides the technology for Avalanche. We we wrote a bunch of the code as well as of course there are there are a bunch of faces here that I know have contributed code to uh to to to Avalanche. So Avalanche is a community project where Ava Labs plays a role. But Ava Labs has a separate arm inside that helps people with demanding use cases build their own L1s and and launch their own chains. And uh so that's AVA cloud effort and AVA

cloud allows for us for example uh it's a revenue generating for-profit effort and it's a set of people that go and talk with someone who wants to launch a chain and uh and they understand whatever they have a process by which they figure out what the needs are and then very very quickly they can build a custom solution that meets those needs and if you have something in mind where you know you want to digitize some asset but you have unique requirements uh you know Alva cloud can can typically very very in very short order give you a chain, give you a wallet, give you an explorer, give you everything you might need to have your own L1 uh according to your own rules. So it's uh it's been fascinating so far. I think they have

launched 50 plus chains on a of a cloud and uh they have a backlog of 150 if I'm not mistaken. So there's a lot of effort uh that's uh gone into helping other people launch those chain solutions and uh for example like the game OTG off the grid that's uh that's taking advantage of ava cloud and there are many others that are maple story is another one that's powered by ava cloud these highly demanding applications where somebody says hey I know how to do my job help me with the blockchain side uh that's what the ava cloud effort has been doing and it's part of the revenue generation for for avo all apps.

So let's talk about the you know favorite topic of everyone at this point which is AI right? So of course AI has really sucked up a lot of the attention in the entire tech space for a while in crypto everyone is interested in how does this convergence happens between AI and crypto and you know how can different chains different applications play a role in that. So I'm curious how what do you think is going to be the impact you know of of of AI on crypto and and maybe the role crypto can play in the AI revolution. So the the very first way in which people took AI and connected it to a blockchain was through

these AI agents. And AI agents are big on Avalanche. We love them. It's wonderful to have an agent attached to an address on the blockchain and then you can interact with that agent. That's awesome. But it's very centralized. you're dependent on an external off-chain entity to run that AI agent. And uh so we're going to people are going to push that effort. It's exciting. It's interesting. I wonder what will come of it. And we're watching that with great interest. But about two years ago um I uh I had this uh this idea that I actually discussed at the at the at the summit in Barcelona two years ago uh which was coin operated agents.

So, um, my belief is it's so much better if you're not dependent on an off-chain entity. It's so much better if it's decentralized. So, you can you can count on some some AI intelligence up in the sky that will be maintained uh even if there isn't a a singular counterparty that's maintaining it. So the vision for coin operated agents is that we will build chains where every validator has its own LLM in it and we will be able to interact with those chains using natural language. So I think in the long term uh I would hope that we will ditch virtual machines. There shouldn't be an EVM. You shouldn't have to learn solidity. You should just write in your own language,

right? You write in English, I want to give five bucks to Brian or what have you. And maybe you express something far more complicated, right? I want to give so much money to Brian assuming he can do da da da da and if not I want my money back. Um so or or maybe something far more complicated. I want to define a lending service where Stani I'm not sure if Stani is here but imagine writing the requirements for a right. I want to define a lending service where there are two tokens and one is convertible to the other. It's a bit of a complicated description, right? It's a spec. uh but it implements the lending service and you should be able to do it in in in English, in German, in Tagalog, in Chinese, whatever your language might be and other people should be able to

interact with it using their natural native language and that's I think where a lot of exciting exciting things lie. So to that end, we've been building uh a lot of prototypes. Um many of you are probably looking at me thinking this is probably a bad idea. I agree with you. Okay, it's a bad idea. So much money can be lost if you say the wrong thing to the AI, right? And um and also are you like not empowering AI to have its own wallet now and it can do autonomous crazy things with it? That too, right? I mean there are a whole bunch of issues that that this uh this uncovers, but it's so exciting. The the end result is a world where you don't have to be a programmer. a world where anyone who can

speak a language and can inunciate what they have on their mind can get work done on a chain. That that that end world is so amazing because it opens up chains to billions of people who just speak a language that it's worth exploring and it's worth taking the hits and it's worth uh seeing what we can do with this potentially potentially interesting and potent technology with a bunch of potential downfalls. So, I'm really excited about uh about exploring this. We've done a bunch of prototypes at Alva Labs. I'm doing another project this summer. It is clearly not time yet.

The AI agents are not good enough to launch this stuff, but we're getting there. And I'm really really excited about about what what's going to happen as a result. Maybe let's do one final question. Um when you think of the next year for you, what's your biggest focus, priority, the problem that keeps you most uh obsessed? Getting sleep. Uh so uh no, I don't know what uh so there's so many right so single the main thing that I'm working on these days is single chain speed. So uh we're uh I think I talked about uh firewood the database effort that uh we built a new database specifically for cryp uh blockchain applications. Um and that that makes us quite different from everybody else is

using the same stock database. Uh we have these uh changes coming to reduce the the data footprint of chains uh so that we don't have to spend gigabytes and gigabytes just collecting data that nobody ever uses again. And uh and then there's a lot of effort to to build async execution of overlapping consensus with execution. That's going to give us another couple uh you know couple of orders of magnitude in terms of uh speed when you have multiple uh multiple parallel chains going on a on a machine. So that's it's very technical. It's at the very lowest level and I'm super excited about those. That's been my focus and uh and I expect uh to have a lot of exciting code releases in the next 6 to9 months uh to to translate all

of this into practice. Cool. Thank you so much, G. It was really a pleasure to once again speak and I'm sure there will be many more conversations in the future and I'm super excited about uh what's ahead for the Avalanche ecosystem. It feels like things are coming into place and the foundations there great community. So, I think there's a lot of exciting things ahead for Avalanche. Thank you so much, Brian. Always a pleasure to chat. Thank you.