Rebecca Liao: Saga – Bootstrapping Chainlets in the Multiverse #484

Transcript

welcome to epicenter the show which talks about the Technologies projects and people driving decentralization and the blockchain revolution I'm Sebastian cuccio and I'm here with Felix luch today we're speaking with Rebecca Lao she is the co-founder and CEO of saga it's a project that seeks to enable developers to seamlessly provision their own dedicated application specific blockchains so before we talk to Rebecca I'd like to tell you about our sponsors this week Omni is your new favorite multi-chain Mobile Wallet only supports more than 25 protocols so you can manage your assets in one place but what's really special about Omni is what you can do inside the wallet if you want to get yield Omni allows you to get the best apis with

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that supports ledger so give Omni a try at omni.app Rebecca thanks for joining us on the podcast today thanks so much for having me Sebastian Felix it's great to see you guys epicenter is is regular listening for the entire team at Saga so really appreciate you having me on nice well uh well I hope I hope uh you know you can you can return the favor by teaching us a few things today absolutely you know love to learn more about Saga and what you guys are building and I think it's you know for me it's an interesting uh also thought experiment to try to figure out where this sits in the broader app chain interchange security modular chain mesh Network thesis you know there are a lot of products right

now that are trying to uh Implement different security models and you know it's it's interesting to try to reason about where they fit uh in the broader landscape before we do that though please tell us a little bit about your background where you came from and how you came to be the CEO at Saga yeah absolutely I'm happy to dive into all those topics that's what we spend all of our time thinking about at Saga so no shortage of things to discuss there but in terms of my background how I found my way to Saga so this was uh late 2021 and so I'll tell you about my journey before then stock is actually my second to start up my first one was called ski chain a co-founder there was Zaki manian who's one of the original builders in Cosmos we've known each other a long

time and excusion was focused more on the defy space so it was providing short-term liquidity to a small medium-sized businesses and I was co-founder of CEO there for four years uh grew the platform to about 5 billion in annual volume and early 2021 I started to think to myself okay I've been here four years the project is on its way I would love to see if there's a new adventure and I've always been involved in politics so I was part of both the Clinton and Biden presidential campaigns both in 2016 and 2020 and in 2020 we actually won so I began to think to myself um maybe I should go into into service and join the administration for a little

bit so I actually went to DC for a few months in early 2021 and uh went through the interview process waiting for nomination but I quickly realized um through that process that I'm not really suited for federal bureaucracy no surprise after having done startups for a long time so I called up sake and said hey I think I'd like to stay in crypto so he introduced me to our co-founding team at Saga because we all believed that developers needed an easier time basically of building in web 3 that they didn't have the full tool set that obviously web 2 developers have which has been built up over several decades so no surprise there but we felt that there were much easier ways that we could

um make developers uh on-ramp onto web 3 in a much faster and convenient manner um so that's how we that's how we co-sounded Saga but my first start of ever was an AI actually so it's interesting to see it come back as a big Trend uh so it was a company called globality I was part of the early team they are headed up Business Development founded around the Asia operations um and we got that price off Bank within a year and a half so I got to unicorn status pretty quickly but then I fell in love with crypto and and as I said Ed um to do my own startup um I started my career as a corporate lawyer actually so that's the last piece of this I was aware for about five six years before jumping into into startups full time but yeah that's that's how I

found myself at Saga and it's been about a year now that we've been hacking away at this project cool what was this other project you did with Jackie skew chain it's like yeah um it's so it's SKU chain um and it's the name is the play out the fact that a lot of the business that we did actually involved supply chain um so it involved the movement of goods and oftentimes when these businesses are looking for a short-term liquidity um what they really want is to optimize their cash flow cycle um so if they are producing Parts they want to expend that cost after they've already taken money in and that's the Gap that needs to be financed so yeah that that was um the the primary use

case that we were going after okay interesting well um yeah let's let's talk about and let's move into Saga I mean how did this journey from from skew chain merge into you know building Saga what did you take away from that experience that allowed you to uh you know have have sort of better uh grasp of what the problem space was that Saga is is now addressing yeah absolutely so um Zaki and all right so we rescue chain together for um for a few years but then saki uh stopped out to start building Cosmos and so I've been aware of Cosmos

for a very long time and knew the thesis behind it um I tracked their major Milestones so when the SDK was launched also when IDC was released um so I I knew that this was a really amazing protocol really great developer mind share as well I could see how popular it is with Engineers um so uh definitely been a big fan of Cosmos for a long time um what we realized rescue chain was you know at ski chain as you can tell um from how I'm describing it was a defy application so we sat at the application Level um but what we discovered quickly is you know the infrastructure the underlying infrastructure for web3 really isn't there yet to support the full functionality and growth of a really great application so um with most of the

infrastructure prior to Cosmos trains really proliferating you're looking at monolithic chains so things like ethereum for instance classic example Solana Etc so um really these uh chain side mandated high in variable gas fees for their end users uh there was congestion because you're sharing the block space with all these applications that really don't have anything to do with you and ultimately the chain environment is controlled by somebody else it's controlled by the core team by Foundation if anything should go wrong with the chain there's nothing that you can personally do about it so um the way I'm describing all these different issues uh you it came to the conclusion at skew chain that Cosmos solves a lot of this but Cosmos opens up a whole host of

other problems which is well how do you get onto your own chain that is a big lift for most projects out there for most individual developers out there it's a non-starter so how do we get all the benefits of giving people their dedicated block space but um ease some of the lift and all the co-founders at Saga including Jin Quan former executive attenderment in our chief strategy officer Jake McDormand who is our co-founder CTO designed the entire system Bogdan who's our co-founder and VP of engineering we all felt the same way that it was time that development environments in web 3 were as easy to use as development environments in web 2 and that is what the Saga protocol reflects

right so I guess you already mentioned Cosmos and I guess uh Saga is sort of also part of the cosmos ecosystem maybe can you sort of explain to us a little bit more like how what Saga actually does and I guess also how it leverages Cosmos in in a way yeah absolutely so Saga the easiest way to think of saga is we are chained to launch chains so we are a layer one protocol in our own right so we are our own chain but the whole purpose of this chain is to launch other chains so how it works for a developer flow is usually the developer will deploy a smart contract or an application into a virtual machine environment and the reason why we require the VM is the

whole system is permissionless so you can deploy anything you want um onto a dedicated chain however that poses a security risk to the rest of the system and so we asked developers to deploy in a VM because that is a controlled environment for them usually makes it easier for their development but then on our side it's a security layer between their application and the rest of the system so the developer will take this VM and through command line they're able to automatically deploy it onto that dedicated chain which we call a chain let um now how do we achieve that it's through interchange security so we are Cosmos chains so we use the cosmos SDK and within that interchange security is one of the newer features

um so interchange security and its current iteration what it does is it allows one chain to replicate its security model onto another chain and so we have the Saga main net secured by a set of validators whenever a developer requests a chain lit then that same set of validators is going to fire up that chainlet it has and it has the exact same security model as The Saga mainnet it is secured by the same set of validators and that's that's how we're able to proliferate these chainlets so um that is how the Saga protocol actually works um and we can go deeper into you know why we think gaming entertainment as the primary use case and how we've been working with other providers of appjane's side chains Roll-Ups Etc but

at a base level that's how the Saga system operates so can you describe this chain let concept so you you described it as a VM but uh I think most people are familiar interchange security the security actually secures a sovereign chain uh well Sovereign to the extent that you know there are some parameters that are still left to the the validators of the uh of the of the parent chain or the provider chain but in the context of a VM it's it's a bit uh it's yeah it's a bit of a New Concept to say that of validators would implicitly secure that VM and that yeah how is it different from just

running a cosmosm contract and also is that of cosmoplas and VM or is it a different VM yeah so many questions so what the validators are doing is they're they're taking that smart contractor application and then putting it onto its own dedicated chain so a chain link is um a chain in its own right the main difference between a chain lit and a fully Sovereign chain is that there is no staking token so because you are borrowing this well you're not borrowing you are replicating the security model from The Saga mainnet the token that secures the entire system is the Saga token and so there's no need for this project to have its own staking token you can have your own native token um

that's part of our token economics however um you don't need a staking token which means that in addition to not having um that uh that token you also don't automatically have governance so you can have governance if you elect it but it's not just a matter of running the chain so those are the main differences between a chain lit and a fully Sovereign chain but when a developer brings an application to our system so it may be contained within a virtual machine environment but what they're being deployed on is is a chain uh and so the validators are securing that chain the validators don't need to think about what the actual VM is or what the application is or they don't need to concern themselves with that it's a

fully automated process that is orchestrated by our Saga mainnet such that when a developer asks for a chain let provided that they have enough Saga tokens to pay for that chain that to be alive they get that chain let um so that's that's the flow the VM is is really just to ensure that there's a security layer between um whatever the developer is deploying and the rest of our system the first kind of VM that we support is the evm because we see how popular it is uh in in web 3 in general but um our goal is to be VM agnostic so Cosmos is the next kind of VM that will support because it's very popular within the cosmos ecosystem we have people building on Saga already who are working

on Solana VM that's compatible with tendermint a movie M as well that's becoming more popular in gaming and entertainment um I think agoric has a JavaScript VM that's ready to use so our goal is to give developers a choice you know whatever development environment you're most comfortable with go ahead and work within that and then we'll take care of the rest in terms of deploying you onto a chain yeah I think what was interesting like you just mentioned that uh the developers pay for the tradelets in Saga tokens I guess can you expand a bit how that works I guess yeah generally we have I guess to um like the the application specific chain has their total gifts taking rewards but I assume in this case you somewhat different so I

guess that's that would be interesting to hear how that works yeah yeah so we have a two-tier token structure um we think that one of the stranger parts of web3 is that when you have a layer one protocol the fees the transaction fees for operating on that protocol are given directly to the end user so the end users have to pay for the infrastructure costs and they are aware of what those infrastructure costs are um that is not a great user experience and certainly when you start to get into things like gaming and entertainment where honestly the the payment part is kind of a nuisance you just want to play the game and have fun it becomes uh something that you you have to do away with so how our system works is there's a saga token Saga token secures the

entire system and that is what all the inflation is taking in the entire economy is based off of The Saga token is only used to pay for the chain let's so think of it like an AWS instance in a way and so we treat uh the The Saga chain let's like those instances and in the same way for all of you who are developing on AWS you understand that you pay for those instances to stay alive every month or so you understand what that cost is as long as you pay that that cost then then Amazon will keep those boxes alive for you so same idea with us the developer has to have a certain amount of saga tokens in an escrow account basically it's our fee deposit and for every month

that they're keeping the chain light alive then we're going to be depleting Saga tokens from that fee deposit now that's settled directly between us and the developer on the front end we are invisible as long as the developer wants us to be so um for most developers they want to offer their applications for free actually and then figure out what the monetization model is going to be some of them will just charge for in-game assets some of them will have their own native token they want their own token which is totally fine um some of them will have users coming from other communities so they're coming from ethereum where they're used to being on Solana for instance and then they'll charge gas fees in that native token instead so they'll be charging gas and eth or Saul it doesn't matter to us

um everything that a developer earns from their application goes into a wallet that is controlled entirely by them so we don't see any of that we don't interfere with it all we care about is that the developer continues to pay the Saga tokens necessary to keep their chainlets alive this is really interesting because you know what this conjures up is with conversations with jayquan around atom 2.0 yeah and I don't know if you guys followed that and uh there was some conversation around having change that we're using interchange security aligned on protocol economics now they're here we were the what was proposed was a two token system where

Adam was Secure the cosmos main net and then there would be this second token this Photon token that would be the payment token by which uh sub you know Chains would uh would uh pay for security and there was this kind of burn mechanism that allowed consumer chains to uh to to to swap atom for this token uh it seems very similar there is a there's only one token here instead of two uh I wonder if any of this research or sorry if if tokenomics come from sort of similar discussions and research that had been uh you know I actually Sonny wrote a paper about this whole token

model uh if you go back and look at like the cosmos GitHub you'll find this paper that he wrote uh in 2017 or something about this yeah you're curious where that were those where those ideas came from if if they have similar seats yeah so I think for all of us came to similar conclusions but from very different starting places so I think for atom 2.0 um well the whole idea of the project is a how do we allow well they also wanted more people to be building in Cosmos um but they also wanted to find use cases for the Hub and they definitely wanted to ensure the health of the atom token so that's the angle that they came from and then for sunny I actually have not read that paper um but I I'd be very curious to hear you

know what the motivation was for thinking about a two-tier token structure I think for us it was all about usability at the end of the day we just we don't think that most people um when they are consuming an application that they want to deal with more than one to meet a handful of tokens at the most um a lot of people who are coming into this space and um really taking advantage of and liking web 3 applications for the first time you know they're not going to have a wallet that holds like lots and lots of assets and they probably will never want to get there uh and so our thinking was okay how do we make it easier for them but nevertheless value um to to our system and make sure that all of saga remains secure so we came at it from more of a usability perspective

um but I I will say this so our token economics approach in general is keep it simple because the more bells and whistles that you put in there for Market making or you know levers for ensuring the health of the price of the token um the the more um honestly the the more um traps that there can be for things to go wrong and so we were thinking okay we need a solid business model which is you know how how does the token get supported well in our system the more chainlets there are the more buying pressure there will be for Saga uh and therefore the the price will continue to be supported that way doing a two-tier token where where we have two tokens um so like an atom and a photon that's

where you start um a you start to dilute some of the value and um once you implement that burn mechanism I mean that's the sort of thing where I I think that yeah people will start to play tricks with that if you need human intervention in that process well then I mean that opens up a whole other can of worms so we we did not yeah we didn't want to go down that road we came at it thinking okay this is what the user is expecting from what three applications going forward and and this is how we can make it easier for them to onboard I think the two token system and I might be wrong here was in order to prevent hostile takeover of the ad because the consumer chain Stakes uh Stakes tokens

essentially and this this may be a little bit different with here with with Saga but they essentially stake tokens uh with the provider chain validators the risk of having uh Adam accrual at the consumer chain level was a a massive unstaking event that would jeopardize the security of the chain where a chance a provider chain would essentially take over governance or take over have too much power on the cons on the provider chain and um and so I think this is where the two token model came into effect where essentially when when you start securing a an a a consumer chain uh you you lot

you you lock into this other token that token uh and then there would be mechanisms to swap back into atom originally I think also the idea was that you couldn't swap back into atom once you've went into the photon you couldn't go back but then those ideas through discussion around 2.0 and the you know the conversations that were being had with Jay was that um there could be a mechanism to go back into atom but with time locks and such that you know atom holders would be able to unstake if if they if they saw that such an attack was coming um but in this case chainlets are not staking any tokens they are they are needing to acquire uh your your Saga token by some means which

puts that puts by pressure on the Saga token and then they pay validators for that security so there's this constant economic cycle there's like a a velocity of money happening in the in the system at all times that's exactly right that's exactly right so it should not be the case that any particular developer that has a chain lit is holding on to those chainlets for a very long period of time if not indefinitely because they got to keep the chain lit alive so those tokens are going to find their way to the validators um every month when we do deplete that account of the chain lip fees for for the particular attainments that they have running the The Saga tokens are

going from the developer to the validators now in terms of you know staking for for the validators or developers want to stake their Saga and then just use the rewards from staking to pay for their chainless that's also possible but I think the way that we've designed the system deliberately avoids that particular scenario where someone's just gonna you know hang on to this concentration of economic power and then it's kind of like an atom bomb that they can well no pun intended but an atom bomb that they can set off at any point right so yeah um it's it is meant to um to really encourage that velocity of money like you mentioned Seb right I think one one interesting thing I I it sort of reminds me I guess also in AWS you have like different instances

right like different sizes different like specs to trade lens work like that too or is any Chain LED like the same they're the same they are the same so every chain light is the same they are priced the same but um we do believe in elastic scaling which means that our anticipation is that um you know most developers are not just going to have one chain lit so um when we started off and I think in some ways the Hub is still conceiving of it this way we thought it would be one application per chainlet um so in the true sense of the app chain application specific chain but what we've come to realize with our system is it is so much more powerful if we allow it to scale elastically if we allow it to scale horizontally so

what do we mean by that a developer will probably need at at least three environments so Dev staging and then their production environment for the actual application on top of that once the application starts to get appreciable traffic through it one chain load is probably not going to be enough you're going to need multiple so in order to ensure the same level of performance um you're gonna need to quote spill over into additional chain lights and that's how we encourage the the developers to to scale and that's why we're not doing you know customized chainlets where some are bigger sizes than others um you're you're getting chainless and if you need more chainlets then you you can purchase more if you are scaling down your application or you've put up too many development environments and

you need to close down a p chain let's that's that's definitely possible as well the goal is to commoditize the system um so that we make it as easy and and thoughtless frankly as possible for developers that they need an environment to build they can pull one up very quickly maybe I guess yeah now if we think of an application that maybe runs on multiple chain links can you talk a little bit about how composability would work in in such a system or do you need to like split apart your application in in a certain way that this this model can work or how The Saga sort of allow you to do that so um Saga runs only because IDC is available and so you keep in mind that everything in Saga is independent of one

another so there's a saga main net and then all the Saga chain let's again are chains in their own right so everything is independent of each other in order for this whole system to work at all we need IDC so the way that the Sagan mainnet will orchestrate these chain LEDs is through IBC so um in order to make sure that people are um keeping the the chainless alive according to the SLA contract that um they are paying for the chain let's as they need to um that the chain lifts are actually being spun up automatically all of that's coordinated via IBC um through messaging back and forth between the chainless and The Saga mainnet now the chain let's also have IVC because they're all cause they're all Cosmos chains in their own right so they

also communicate with one another um and right now IVC is mostly used for the the transfer of assets back and forth but I think with entertain accounts we can relax and expand um the set of messages that can go back and forth between chains so for composability it's it's really IBC that we're reliant on and your website talks about this IBC Plus uh can you explain what that is because I'm not familiar with this particular premium IBC that uh you guys are spinning up yeah yeah yeah uh no so it's it's not um uh it's it's not really a premium version per se but it's it is a unique trait of our system I would put it that

way and what IBC plus refers to is the fact that um so IBC is needed to to run our system period um the communication that happens between the chains requires IVC but um what we realized was okay how do we sort of maybe streamline this process here for for IBC because usually IVC assumes that you have two chains that have nothing to do with one another the validator sets are completely different uh and so you need to like clients on either side and um then you achieve IVC compatibility and the messages go back and forth for us on the other hand um the validator sets are exactly the same for all of the participating parties uh and so we're we are putting

forth some Innovations in IBC just to make it run faster and hopefully make it run a little more cheaply for the validators as well because we will require them to run relayers uh and so um in order to just make this system much more efficient we we are going to tweak the current iteration of IBC but whether this can be used for other systems I I'm not so sure I mean the the main assumption here that makes it all work is the fact that we have a common validator set across all of our chains right because with IBC and you are assuming different security models between chains this is why you need the like clients to verify the other chain

here since all the chain let's are using the same security model that uh that overhead isn't necessarily required I guess this would also be the case for ICS consumer chains that are leveraging the entire Cosmos Hub active set and are not leveraging their own validators I guess that's IBC ICS one or whichever version at the first version but that starts to break apart once you have different security different security uh over for for different chains that's right that's right

how do you maintain that IBC compatibility with other uh IVC chains is this this IBC here because I mean it sounds like you don't really need IBC you might need parts of it but like the IBC protocol as a whole you don't really need but I guess you need IBC when any of the chainless wants to talk with it's osmosis or some other external chain yeah that's exactly right I think we want to preserve IBC in um its current iteration as much as possible but just making optimization sort of the fact that we're the same validators set across all chains because um we do anticipate that that will happen very quickly and that um our chain let's are going to talk to other

chains um within the cosmos ecosystem and then we see also and this is also a bet on IVC itself um as a messaging standard that will be applied across more blockchain ecosystems um so we hope that other ecosystems like an avalanche for instance will take up IBC and then at that point if we have sort of optimized ourselves out of compatibility there that's that's not great um so we we want to make sure that we're still working with those future iterations and then for some of the larger Partnerships that we have actually for people um outside of of the cosmos chain environment it is reliant on IBC specifically uh so yeah any anything that we do has to remain compatible with

how others are using IBC at the moment maybe just one one other question here on this because I I realize it's not super clear to me but like this chain lit in in the in the in a blockchain stack you have execution settlement data availability consensus and data availability what parts of that are com are are the chain let me is it just is it just settlement and execution also no they're they're all the same consensus okay so with consensus that's happening on on the Saga chain this is where yeah consensus happening on on each of the individual chain lights yeah the Saga main net exists to orchestrate so to stand up make sure that the

validators are behaving because in an entertained security system how it all stays together is if a validator is not um not behaving on on any particular chain let then according to the mechanisms of the protocol they get slashed and that slashing really happens on the Saga main net so sagamina is really there as an administrator um it is not there for consensus or settlement all four parts of the blockchain stack live with each individual chain life okay and so in the same way that with interchange security Cosmos Hub validators are going to have to run clients of the consumer chains they are validating Saga validators are going to have to run

clients for each of the chain lets that they're validating and so this is where okay uh then then my question is okay then this this stack let's I want to talk about the the tech stack right the the client that they're running is that a cosmos SDK based client and then and then VM are you guys do is it is it is it ether mint like what's the because it's evm right so yeah can you describe the tech stack yes yeah no that's exactly right um so every chain is running Cosmos SDK um that is not because any of the developers deploying on Saga have touched Cosmos SDK necessarily it's just a stack that we automatically spin up for the the VMS they do have to be

compatible with tender mint consensus um so it's it's not like you know people who have already worked on a salon a VM in the Solana ecosystem we can just take their work and then plug it into our system it's not going to work that way so um our evm implementation is ether mint yes um they've done the work which we really appreciate form make the evm compatible with Cosmos and when we move to the next kind of em Cosmos and that's going to be a little easier as this Cosmos native but honestly for the other kinds of virtual machine environments like a Solana VM I mean that's something that Eclipse which is one of our innovators is doing uh and um because it is a bigger lift our team could undertake making all those VMS

compatible with with tendermint but I think it's much better to rely on other community members who have spotted the opportunity there and provided these VMS themselves but yes in terms of the stack whatever VM we make available or that a developer uses to deploy on on us um it's it's got to be compatible with tenderbent right and are you are you familiar with any of the work that's being done on the cosmoasm SDK um and I wonder if yeah because evmos is effectively I think going in the same Direction with their Atmos SDK and by that I mean re-implementing the cosmos SDK modules as smart contracts in cosmoasm uh and

and and and and solidity I guess uh or rust and solidity but but compatible with a cosmosum and the msdk uh is that something that you see as a viable path for the future for streamlining you know since applicants since the applications themselves are not using I mean they're not going to be using these Cosmos SDK modules they're just like interacting and building an application using the VM component yeah so it's it's I think at the end of the day not to sort of oversimplify this it's a bit of a philosophical question as to what is the most valuable kind of business model um for a protocol moving forward so is it more in providing that really um uh easy to use developer environment in in which to deploy on so essentially

what these efforts are trying to replicate is you know it's so easy for a developer to deploy solidity smart contract on ethereum and get going right away can we replicate the same experience in Cosmos and I think that there's definitely a place for that kind of development effort here but the question becomes is that the core competency of Cosmos is that really the value add that our particular ecosystem provides to web3 in general and I would say that it's it's part of the the big puzzle but railing people come to Cosmos because they want their own space to build in uh and so I I don't know if these sort of smart contract Innovations alone can accomplish that you need to be able to spin up space um in as easy a way as possible we're

doing it in an automated way but but when we think of Cosmos I mean again um it's I'm full of funds today unfortunately sorry guys but when you think of Cosmos you think of space right you think of your own space and I I think that's what we've decided to really focus on is other people are are making all these smart contract innovations that we hope to help bring to Market through our ecosystem and our implementations and our adoption but at the end of the day what why do people come to Cosmos what is cosmos known for it is that sovereignty um so we're looking to to provide that space this is where yeah we're attacking the developer problem from from multiple different angles I think they're all necessary at the end of the day but this is why we've chosen our path right I think I guess maybe taking it

back to the sovereignty now we sort of discussed that all chainlets are sort of the same at least in terms of like the size and spec what exactly can you still like sort of customize I guess the VM which right now is just evm but uh what else like can you tweak the block times to you like what else can you sort of do on your chainlet yes you can set your own block times that's totally fine and uh what we're starting to do is we're we're we're making the system um into a modular stack in its own right so you have the Saga chain let's sort of the plain vanilla version you can tweak blocktimes for any soccer chain let and then on top of that we have a bunch of services so you know we've been talking

about AWS this entire time but really AWS and and just you know cloud service in general I don't think they would have really gone anywhere without something like a Heroku or Heroku like Services supplementing that um so that's something that our CTO frankly is spending most of his time on right now is figuring out what are those services that will help a developer basically you know get as close as possible to that one click um so when they want to spin up a chain link what are all what are all the services that we need to bundle as a part of that um in order to to make that experience as seamless as possible for them now some of that um is uh is going to be common across most implementations uh I mean one example of that is the Explorer everyone

needs an Explorer but if you are a gaming application for instance then you're probably going to need the multi-chain wallet right away um because I mean you're you're probably multi-chain to to begin with and you want to be within the entire Saga ecosystem you probably need a game launcher in the SDK that comes with that and so that's you know a group of services will be bundled into that sort of implementation if it's an nft project where you don't have the same requirements um then it's probably a more streamlined set of services when we start to really focus on things like D5 for instance or other use cases there will be another set of services so our goal is to really make this into a platform where we think that in order to successfully launch a

chain lit for this particular use case these are all the services that you need but other than the base chain lit you can take things out you can add things in as you like um so above that protocol base protocol level there is actually quite a a lot that you can customize and then with some of the newer Partnerships that we have it's not just adding services on top of chainless anymore I mean when you work with somebody like a celestian certainly somebody like a polygon they have their own stack and so that becomes a separate offering on Saga altogether where we're using some very key parts of the Saga stack but at the same time um you know it's going to be polygon Edge code for instance it's going to be Celestial romance and data availability so those are far more

specialized Stacks that developers can also choose and if they want to customize in that direction then that option is there for them but the whole point is to build a platform right so you already took away like some some of our next topic obviously the the the Partnerships I mean like first of all congrats on like uh scoring so many like uh names there I guess uh like you mentioned polygon and Celestia I think it would be cool to sort of go into how that works these these Partnerships you sort of mentioned right they they're using uh Saga for certain elements in in their stack um so I think with with Celestia there's this concept of like sequences as a

service uh and in polygon you're working with the supernet so maybe can you like sort of explain a little bit uh both of these Partnerships and how Saga sort of helps the developers in these ecosystems um yeah yeah absolutely and so towards the end of last year as we um started to you know mature these conversations with Celestia and polygon I think what our CTR recognized was wait a minute when you look at the Saga system you know so far we've just been talking about Cosmos app chains so every chain lit is a cosmashap chain what if we were able to generalize that such that we think about it not so much as an app chain necessarily but just as dedicated block space because I think as

blockchains have just started to think about scaling more seriously and there are so many names for the same kind of concept you know there's the app chain there's a side chain there's a roll up um et cetera Etc but um is there a way that we can generalize right exactly um but is there a way that we can generalize across all of this because we do have a very unique offering and that is the automation piece and the ability to to share security so is there a way that we can offer that across all these different dedicated block space offerings and the answer was yes so both with Celestia and polygon I'll go into the specifics um of each

um shortly but uh but what they have in common is we realized you know the Saga system um if you don't think about the validator set for a second so you don't think about the Saga validators um you focus only on the fact that we have this interchange security that has been optimized in a certain way to make the whole system permissionless and um has also had all these Services built on top of it for that heroku-like deployment that in and of itself is quite valuable to all these different dedicated block space services and then um there is the possibility of communicating between somebody else's ecosystem and our ecosystem to access

those Services through IBC so that um that general idea that as long as you have some sort of you know controller chain if you will if you have some sort of um chain that can act as communication between our services and that other ecosystem and there is IBC then you get access to that automation um so that's that's the common theme that both Celestia and polygon have so how does that manifest itself in Celestia so with Celestia they obviously have very strong data availability um in terms of the roll-up piece I think they were trying to figure out how do we um make this easier because right now what you have to do for Roll Up is you got to get your own sequencers most of these Roll-Ups as a service

um projects are uh putting out centralized um sequencer sets or single sequencer sets uh and so how how do we get to a decentralized sequencer said how do we automate that how do we sort of negate the need to recruit and to have your own token so that's where we come in so we have um in the Celeste case we're using our own validator set and um the sequencer selector or scheduler on the Celestia side they're the ones who are going to be selecting the sequencers for particular Roll-Ups and then if there should be any fraud or male activity on any of the validators working on the Saga side that will get communicated back to the Celestia system via data availability and that's how

we're able to orchestrate rollups as a service um in a decentralized way so that's how it works with Celestia with polygon polygon is a different stack so they are not only you know polygon ethereum based but they are polygon Edge specifics so polygon has an app chain solution it's called supernets and the team that developed it is polygon Edge if you go on their GitHub you'll see that the the entire stack has been customized according to polygon Edge um so what they were doing was they were um you know similar Concepts they were taking Matic validators and saying to their their customers their clients hey we can stand up a chain for you you can pick among our validator set and um once the the validators have been gathered

then we'll we'll construct the chain for you this is a very long manual process and that's why to date there are no supernets that are actually live uh so how did how do we actually boost the adoption of this and that's when automation really became a serious conversation so there that was a trickier one because um Matic validators don't want to be you know um sidelined in this deal obviously they want a piece of all the supernet action so Saga validators were no longer going to be used to automate these chain LEDs um instead what we're going to do is um the super Nets are still going to be secured by the Matic validators and in

terms of making sure that those Matic validators are behaving um in the right way and um that they are still undergoing that auction mechanism sorry I don't think we've talked about the oxygen mechanisms yet but um the way that we price our chainlets is through an auction mechanism um we'll go into more detail about that later but it is a pretty big innovation in validator pricing so making sure that thematic validators are are adhering to that option um and all the other sort of services in orchestration that come with the Saga stack that again is going to be communicated back and forth between their system and ours via IBC but it's still going to be Matic validators so if you want to think of it a certain way

it's that thematic validators that are participating in supernet security they are adopting parts of the Saga stack so that's how those two Partnerships work um it's all I provided a lot of detail but if you want to think of it in a very sort of simple way it is that a Celestial roll-up is now a saga chain let a polygon supernet is now a saga chain lit um how we make that all work is primarily to you to IBC um but the the point of these Partnerships is to generalize the automated deployment of dedicated block space okay interesting so using a select a Celestia roll-up is now a saga chainlet mm-hmm

that that kind of blows my mind because I mean you're not talking about like Celestia's data availability layer you're talking about the execution environment yeah right so you're so it would be like a fuel roll-up or something like that exactly so it's it's just specific to the roll-up piece and also to be clear that this is now an offering that both Celestia and Saga will make available but um if for whatever reason you um you went to Celestine said I love their data availability but yeah I have my own validators I want to do a roll-up of my own that's totally still an option um it's the same for polygon supernets if any developer said you know I I want to go through the process of selecting my own Matic validators and customizing

this chain completely for my own purposes and I want to make it permissioned Etc you can still do that um but we are probably going to to be the easier option for developers to go with right I think I guess you sort of touched on it maybe we can go back a bit to the the innovation of like sort of how you price uh validator seats so this auction I think uh it's it's called musical chairs I I remember reading the the white paper a while ago so yeah uh I I think yeah interesting Concept in terms of yeah going a bit away from like the model that's currently is get some steak and then you get the rewards but rather more engaged I guess in terms

of on the on the validator side so uh curious why you came up with that and I guess how it works obviously so yeah maybe you can expand on that of it yeah absolutely um so I I think that um we had two goals really um with respect to this um mechanism that we came up with which is the musical chairs auction thanks to be likes um yeah that's that is our name for it I'll explain why in a second but on the developer side we wanted to um give them as predictable and commoditized or pricing as possible for chainlets um because I mean that would greatly help with uh the development effort on the validator side we

understood the burden of having to instantaneously validate as many chainlets as the developers are requesting as long as they can pay for them so even if a validator says yes you know please give me all your chain lets it is obviously a huge undertaking in terms of the hardware um and the the maintenance and the all of that so um this was a way to um help out the developers and make sure that they were getting what they expected out of the system but in terms of metering for the validators and this was also going to be very helpful so this is how we designed the system um to make sure that we were taking care of both parties uh so for validators every epic which is about a day they enter into this musical chairs auction

so musical chairs you all know how it works it's a party game um you all have a set of chairs and uh you stand up you walk around the circle of chairs music is playing this whole time when the Music Stops you gotta sit down and find a chair if you don't have a chair you're out of the game so it's the same idea here um every epic validators enter into this musical chairs auction and they post their price for what they will accept to secure a chain lit um now um the lowest set of prices is going to win that auction so all the validators who posted those lowest set of prices they are in the octave set um now which of those is the actual

chain lift price that gets quoted to the developer it is the highest price in that set so if you are that validator that um bid the highest price you get exactly what you asked for If you bid lower than that then you get additional margin on top of what you would have already probably baked into your bid and so it's a nice additional profit for you um so that's the winning set of validators now if you bid higher than the winning set then you are out of that access set of validators for that particular epic and um that is one way in which we're trying to encourage the validators to to Really bid their true value in terms of what they would accept um for securing a chain lit and yes the the whole point of this mechanism is to

get that price down as much as possible and that's how it benefits the developer aside for the developer um they need to know exactly what they're going to be paying um for each particular epic for keeping a Chain LED alive um but they also I mean obviously everyone wants a lower price in that case and this auction mechanism is our way of of trying to get to that as much as possible I mean further down the line we fully anticipate that it's just it is going to get cheaper and cheaper as Hardware improves for validator services as our validator set expands and as we start to do some sort of optimization in the system um then um I I think that's that's how we'll we'll get the cost down for all these validators even further and then

hopefully that'll drive the price down for chainless overall that's that's how the mechanism works right that that's cool I I think actually I think sui actually has some sort of auction too where you actually set the gas price for Epoch I guess in your case it's more what the validators get paid but in this in their case it's the gas price so it seems like validators will have to become a bit more involved in in this sort of like economic setting which which is interesting if that will work I'm I'm I mean we've been running like the graph for a while which also has like sort of the system of like oh you have to allocate your stake to certain subgraphs to optimally uh get the right rewards I think it's interesting to see

like that this sort of becomes a differentiator or like thing that validators need to do um but yeah okay so that's interesting but there's still sort of Delegation and commission rates for validators but essentially you're you're deciding like what all these chain Nets would pay and then that pool of the money from the chain lines will sort of be redirected to the validators as a sort of part of their earnings yes that's exactly right so um so all the usual ways in which validators get compensated in a proof of stake system those will still hold um so there will be delegation to the validators um there is the commission that the validators will charge um in terms of staking rewards inflation in particular um those that those

rewards will also go to validators so the chain lift fee is actually on top of all that so we have anticipated scenarios where say you are a larger validator and you just you want to guarantee you're a place in that set and you have the economic means to do that then you just bid zero you offer that security for free and you just rely on all the rewards that you're getting from The Saga protocol for being a validator I mean we we have contemplated that scenario now of course I mean we do have the whole slashing mechanism so if anything should go wrong and validate our operations then obviously you know there there are consequences there um but yeah that's um those are yeah some of some of the corner cases that we started to contemplate with respect to validator behavior

so it's sort of also like I guess a bit of a civil resistance thing that you you charge a fee for for the chain lead right or I guess there's some sort of is there a limit how many childhoods there can be are you setting this at Saga like main chain level sort of okay we can only have a thousand trailers or is it sort of let's go wild yeah yeah um you can stand up as many chainless as you like as long as you pay for them um that's that's the criteria you got to pay for them um so for somebody um who is looking to stand up a chainless so we don't allow for that unless you actually have Saga tokens in an escrow account on our system um so we as soon as you you instantiate that chain let and that chain letter is

running it's being kept alive then we will withdraw those Saga tokens from your account so you can't just you know come to our system and say you know give me 10 000 chain let's um their payment is due um pretty immediately so that's the way that we prevent the the system from getting attacked but in terms of Sybil I think the way that we spent probably about six months on this auction mechanism like designing all the ins and outs of it our current paper goes through the whole mechanism but in terms of the actual numbers that we assign um to to all the various levers in the mechanism that that has taken a long time to come up with and we'll we'll reveal that soon but the idea is we we are very cognizant that if we make it too easy for somebody to you know win

these auctions consistently then um then we open ourselves up to civil but yeah that's it's definitely something that we thought a lot about when designing this yeah I think super cool I guess we could like talk about this for another uh half an hour probably but I guess we want to also sort of talk a bit about again some more ecosystem things maybe and uh sort of the two to slowly wrap up like more yeah about about this sort of stuff instead of the architecture so I guess first of all we already sort of talked about it that the focus is kind of the gaming and entertainment uh that's probably like I mean I I guess historically you know D5 is sort of dominating in in crypto like as

a prime use case but obviously many people think gaming was is supposed to be the one that break out like can you explain sort of why you're focusing on on that um kind of area and like how hosaga is like uniquely placed there to to service those use cases I guess yeah absolutely um so gaming and entertainment um you know we we noticed uh at the time that Saga was founded this is early 2022. um we noticed that gaming entertainment was already on the on the uptick that there was a lot of growth in this area but um as a startup we definitely have to ask ourselves the hard question of okay you know you're building a really cool product this product could benefit

um pretty much everybody in so many ways but the way you actually get to adoption is you recognize that some people really urgently need it as opposed to you know it's a nice to have so I think for um G5 dedicated block space on demand like this is a nice to have it's not existential because I mean defy has flourished without it and DFI transactions they tend to be slightly lower in volume but very high in value and so when you have that combination you don't mind congestion quite as much you also are more tolerant of those Gatsby's because the value of your transaction is already pretty good to begin with now you flip that over to gaming and entertainment and this is all

about the user experience um as someone who gains myself if I have to pay for something I just I really gotta love that game otherwise it's not the money necessarily it's the interruption of the fun it's the interruption of the experience uh and so I think that's something that web3 realized okay we we have to solve for that um or else people are never going to really migrate from a web to kind of gaming environment to a web3 one uh and so when we sat back and said okay who desperately needs this kind of infrastructure it really is gaming and entertainment there you know I mentioned with D5 transactions volume is relatively low transaction value is very high in gaming entertainment the

transaction volume is very high transaction value is usually low to nothing so that's the kind of environment in which you you need your own chain essentially you you need your own block space I think for um everyone who's building in our ecosystem they have come up against the the issues with building on monolithic chains even if so on as Solana can be fast but the chain you know occasionally goes down um and you're still affected by other applications and should anything happen to your particular implementation and it's on the Chain level you got no one to talk to um I mean you could talk to the core team but you have no control your own engineering team feels a little helpless in terms of being able to to do

something to service the users so that's why we felt the gaming and entertainment piece was a really great fit for our infrastructure and that's why we're starting there very cool yeah gaming is a is it's it's like a sector in crypto that I I haven't really been convinced yet I I don't know why the the because there seems to be an entire part of the industry that's just so hyper focused on this use case and and for me I just don't see it yet um I yeah yeah so I I would say this I would say that um the play to earn model is probably going to

um not die out because there'll always be people sort of looking for those returns but it just it'll be a lot less prevalent I think with the success of something you like an axi for instance everyone tried to replicate that model you know how can we generate a token for the game and then when people play the game they earn the token that model definitely did not withstand the test of a bear Market um so now we're getting back to fundamentals which is how do you just build a fun experience and that's where web3 actually has something very significant to offer I wouldn't say it's necessarily in the economic piece again most of us who gain we gain for for the fun for the dopamine hit for the community of um being part of a guild uh of players and so

um the same Dynamics are not just um going to apply to web3 they are already in web3 I think the fact that we are so Community focused in web3 is actually why the crossover with gaming and entertainment has happened um so what we're really excited by at Saga is not so much um play to earn although we we do have some you know really cool games in that space it's really in the decentralized generation of content so if you really love a game for instance you get into it and then you want to develop your own story lines your own characters maybe your own assets and rather than you know go to write or Microsoft and you know just scream and plea that you want this included in the game you can just do it because you're a member of the community uh and then people yeah will then

gravitate to that you build your own following et cetera et cetera so how do we take a piece of Ip in other words that brings a lot of people joy and then democratize that across the community that's where the action is at it's not in you know please give me more Etsy tokens okay that's really interesting yeah well I guess maybe I need to uh I need to look at this a little bit more more deeply yeah before I wrap up you know and uh I wanted to ask you we talked a little bit about this earlier is you know there is there are so many narratives around block space security and so we have the modular modular narrative we have the app chain narrative we have The Interchange security narrative we have

the monolithic chain you know every every smart contract is on the same chain narrative although that one probably is sort of on its way out and and then there are many variations in between that you know there are different ways that one can Implement Celestia with Sovereign Roll-Ups and settlement roll-ons Etc what does this all look like what's the end game here and where is this all like how do you how do you reason about all of these different uh security trade-offs and configurations and yeah how are users and development more importantly how a developer is going to want to reason about these things as the next wave of

application Innovation comes you know in maybe two to three years yeah so I think from a developer perspective I mean you you are looking to not think about this piece because um I think most developers particularly are focused on the application Level that's what they're really good at is the application logic um and that's that's where they want to spend their time building their project the traction on that application is is how they're going to see growth and so that's what they want to focus on if they have to think about the infrastructure piece I think that's where they start to get turned off um so the nice thing about a monolithic chain for instance is it does afford you the ability to just focus on the application it gives you a whole host of

other problems but at least you know your mind share is devoted to what your core competency is I think for Cosmos We Are Climbing um that ladder of of getting to a place where a developer doesn't have to think about the security piece so you don't have to think about the infra and again they can just focus on that application um and I mean that's that's a huge part of saga's mission but you mentioned Sebastian when you look at the whole landscape of scaling Solutions out there which one is exactly going to to win necessarily I think it's it's not so much the stock um that you should focus on when you're looking to answer that question I think it's in the communication piece so we just look at our own experience and we

know that without IBC um polygon Celestia would not have been possible there there just there would not have been a way for our um interchange security orchestration automation stack to be able to communicate with these other ecosystems and then automate the the dedicated block space for them so IVC was key in that um I think even for the projects that are building on us as part of our innovator program you know these are small to mid-sized gaming and entertainment projects a huge part of the value add for them is IDC and the fact that for instance a Solana game for the first time they are able to come onto Saga so they have an instance of the game on Saga and then there's a

polygon game that is staying on polygon but they also have an instance on Saga and it's through IBC that they're able to communicate with each other for the first time they're able to transfer those assets back and forth and that's a huge benefit for their Gamers so intense in terms of scaling out their particular game um they they have focused on that communication piece so I I think you know this is why I always say that for Cosmos you know Cosmos SDK the ability to stand up your own chain that was a really great Innovation but the signature achievement of this ecosystem is IBC um because what IBC allows you to do or what it has allowed Saga to do it it has allowed us to take the unique offerings of our stack with respect to scaling and um

plug it has allowed us to plug it into other stats that have nothing to do with Cosmos um and that's that really is the power of it uh so I think that I mean that that is a strategy that um will prove quite fruitful it has worked for us so far I think we're going to continue it into the future but it's the reason why we bet on this space um because it really is in that ability to communicate that you can actually have these stats work with one another yeah I mean I think that you know saying that IBC is the signature achievement of the cosmos Act is pretty pretty spot-on for as far as I'm concerned I think that it is probably the thing that out of the cosmos experiment uh will be

you know the most long lasting and we'll have we'll spread across the broader ecosystem um more than anything else um I I don't think about it in in this in this who which which uh will win perspective I think about it more from a developer perspective in terms of the trade-offs they have to make uh between security scalability of well it's yeah it's like security and sovereignty I think right so if you're building an application that and I look at I look at web 2 is and the web 2 stack as an analogy and and from the

stack I mean really like the infrastructure stack uh where you you can build a Squarespace website and have only control over the application and virtually no control over any of the infrastructure at the other end of that you have you know Amazon and Google building data centers undersea cables and Hardware vertically fully vertically integrated and all of the levels in between but you know from you know building on AWS or you know these very large hot platforms and having high levels of sovereignty but High dependency on those platforms and then and then there's there's offerings all the way down you know to to the the

least Sovereign and the easier to use I I see it I see this as more of a linear um more of on a linear scale than on a yeah that's that's kind of the way I I think that the ecosystem will start compartmentalizing these things is based on the application needs and finally you know some types of applications are going to stick very well to one flavor of of you know consensus and data availability and execution and and the sovereignty trade-offs there and the dependency on those on those platform trade-offs Etc so yeah I think I think these things will start to make more sense and we'll start to line up over the next over the

next few years yeah yeah no especially because I mean developers are they're not just um good in terms of the coding and and the software development I think most developers in this space are also entrepreneurs uh and so they think about does this make business sense in terms of what is costing me you know how many users am I actually getting onto my project Etc so they're they're making all these calculations and they'll vote with their feet in terms of which environment is best for them um I think there's a reason why Cosmos has so much developer mind share um because they recognize hey in in terms of ease of development yes there are some significant things that um Cosmos without further Innovation would ask me to do but at the same time

in terms of robustness of the technology sophistication of the stack it's yeah there's a reason why it's quite popular awesome yeah thanks so much Rebecca I think we're yeah ready to wrap up almost I think maybe so thanks for coming on but also I guess as a final question um we would love to hear a bit like you know now we talked a lot about the the architecture design the reasons I guess you can just tell us a little bit like where where are you at right now in terms of like the road map of saga and uh you know where can people find more uh find you and learn more about Saga yeah yeah absolutely I'm so feel like

Sebastian thanks so much for having me on this has been an amazing discussion um I think this particular podcast you go much deeper into the technical details um than most other podcasts out there um so it's been a lot of fun um in terms of our roadmaps um um we're gonna have an announcement at East Denver uh in terms of our next big release and that'll be a true change to launch chains um so the validator set will be smaller um but it's the first time that you're seeing that orchestration so what it allow developers to do is launch evm compatible chain let's but you know the the chainless are with a smaller validator set once we get closer to summertime that's when you're going to see the validator set be expanded it'll

be far more decentralized and a lot of the features side that we've talked about on this show so IBC for instance um the full implementation of shared security that'll be a part of that test net and then we're going to run multiple test Nets between then and mainnet launch which is slated for Q3 Q4 this year um so Saga is going live this year that's uh yeah this is a busy year for us um and in terms of um what we have to you know look forward to and where you can find more information about that um so all of the information is available on our website saga.xyz um it's also available on our Twitter Twitter is probably the place where we make the most up-to-date announcements

and so you can you can find us on um uh on Twitter at Saga XYZ double underscore uh and then for me personally um you can find me at um on Twitter at Becca Liao I so look forward to hearing from everyone we always look forward to hearing from our community across all of our social channels whether it's Twitter or telegram Discord uh but yeah this this will be a fun year great well Rebecca thanks so much for joining us for diving deep into Saga and look forward to seeing further developments and probably we'll see you in Denver as well because uh both Felix and I will be there absolutely no thanks so much Sebastian this is a great discussion thank you guys again for

having me on and um yeah look forward to seeing you all in person soon