Sandeep Nailwal: Matic – A Scalable Layer-2 Dapp Platform for Ethereum #369

Transcript

this is epicenter episode 369 with guest sandeep nail wall [Music] hi i'm sebastien quijo and you're listening to epicenter the podcast where we interview crypto founders builders and thought leaders on this show we dive deep to learn how things work at a technical level and we fly high to understand visionary concepts and long-term trends if you like epicenter the best way to support us is to leave a review on apple podcasts and if you're on a mac or ios device the easiest way to do that is to go to epicenter dot rocks slash apple

and if you're new to the show be sure to subscribe on itunes soundcloud youtube or wherever you get your podcast today our guest is sandeep nail wall he's the ceo of matic his company has recently launched the matic network which is a scalable dap platform built as a layer 2 on ethereum matic is one of the many ethereum scaling solutions we've explored on this show if you're looking for more content on scaling you can check out some of the recent episodes we did on this topic there's episode 352 with jack o'halleran of scale labs episode 336 with jin lang wang and karl florish of optimism and episode 340 with daniel wang of loopring matic provides secure and instant transactions using a side chain based on an adapted implementation of

plasma and decentralized proof-of-stake network based on tendermint so like many of the scaling approaches i mentioned earlier matic tackles a specific use case in this case it's allowing developers to deploy decentralized apps on a side chain and since it's using plasma users can come in and out of ethereum as they please since the tokens that exist on matic are interoperable with the main chain one of the things that the matic team takes very seriously is user and developer experience on the user side their goal is to allow for the types of experiences people are used to with web 2 but leveraging blockchains and on the developer side this means offering a really high quality developer experience and making it super easy and

accessible for anyone to build a dap on their platform so mayor and i did this interview together and in true mayor fashion he'd offered some new inspiring analogies for how we should think about the growing ecosystem of layer one and layer two systems i won't see any more here i'll just let you listen to the interview and appreciate this insight for yourself i'm not much of a dapp developer myself but i've built a lot of websites using wordpress and one of the things that's been immensely frustrating has always been devops like deployment maintenance backups and database management well the folks at cpanel have built the wordpress toolkit for cpanel and it makes it very easy for you to manage your wordpress infrastructure i'll tell you a little bit more about that later on but if you

want to learn more now you can go to epicenter dot rocks slash cpanel and our friends over at algrand are hosting after hours series where blockchain developers can meet their team and members of the community for informal conversations about al grand i'll also tell you a little bit more about that later on but if you'd like to learn more you can go to algorand.com epicenter we're here with sandeep nailwall he's the ceo and co-founder of matic matic is a company that has been in the ethereum space for some time and is building scaling solutions for ethereum of course we've talked about scaling on this show at nauseum it seems of course like we've

had several uh scaling projects on the show that all have different approaches and matic has a very unique approach uh within you know this broader scaling solution ecosystem and so we're very pleased to have him on with us today to talk about matic and scaling for ethereum thanks for joining us andy thanks for having me here and thank you so much and i've been hearing about epicenter for long as it's it's finally very nice to be here well we're really glad to have you i mean we've we've met before at dapcon and i know that like back then like i was really interested in matic and what the kind of unique scaling solution that you were working on it

seemed a little bit early i think to have you on then but now that the network is live and there's some traction on the platform there's no better time to talk about matic on the show so tell us a little bit about your background and how you became involved in crypto yeah so basically i got to know about bitcoin like early on like i think in 2013 even like i discussed with my like friend that you know we should think of mining bitcoin or whatever uh but you know at that point in time i think it it had already surpassed the point where you could actually mine you know bitcoin on your laptop so you know we kind of ditched the plan but i never really got into the

technology at that point in time 2015 is the time where i you know started uh my my startup in the e-commerce space it was more of a like services e-commerce services startup like for white collar services b2b services basically and i was trying to build something like uh you know a lot of you know non-indian companies actually go to india to hire talent and you know kind of hire the vendors and all that there's a lot of like different different kind of vendors out there and uh you know at times you don't know like which vendor is is the right vendor for you and all that so i kind of like thought that there is a like big gap in the market to get the right like high quality vendors uh you know b2b vendors not like

freelancers but proper vendors so i kind of you know started scope fever uh which was my previous like you know one of my previous startups so uh there we kind of did well for some time like one and a half years but it was not scaling that much like that that you know for which i came into the uh you know overall entrepreneurial space and then that was the time when i realized that you know why i like kind of did an internal analysis and realized that you know because of a lot of like people dependencies into it it would be very hard to even if i am able to break into the next level it will be very like it will be always a very slow grind towards the larger scale like like a billion dollar scale or whatever

so then i started you know then i then i realized that you know the next thing i want to do like i don't want to continue on this next thing i want to do is on the in the high tech space so maybe artificial intelligence was really hot at that time so i started studying a bit about it and all that and then uh you know from there i kind of like there was too much mathematics involved into it and i was like not like getting the the the you know very very very interested into it like you know that much interested so that you know i love it and kind of spend my life doing it then you know like because i was expert exploratory space i you know bitcoin was just getting that kind of hype from the market so at that point in time i

thought that yeah i mean this is the school like let's let me study about bitcoin and blockchains and all that and i started with the mastering bitcoin from andreas antonopoulos you know and then you know like fourth or fifth chapter into the into the book i was i like i had that aha moment like you know with which you fall into this into this rabbit hole and you know that was the time like when i said that this is big and i want to do something in this so initially i because i was like uh you know i'm a blockchain programmer itself so i uh you know got into the blockchain programming at that point and you know kind of initially did some uh you know kind of consulting assignments or development assignments for few you know clients and

all that and then you know i became more and more active in the blockchain community in india bitcoin community in india initially that's where like me and my other co-founder jd met where we used to answer the technical queries in the group uh you know for this and we knew that we knew each other that you know we like out of those like a lot of people over there uh you know there were only few people which were technical enough and i was j and jd were there so we you know kind of had that kind of friendship going and all that and that around like end of like 2017 jd had started you know exploring on uh plasma and he you know became a part of the plasma research group where you know vitalik and karl and all these people were there and

there you know he kind of conceptualized this idea that we want to have a plasma which actually supports a evm because you know right now on the like at that point in time plasma was only supposed to be a payment kind of layer to for payments and you know the he kind of conceptualized that you know if we have an evm on the on the plasma it can actually scale the smart contract transactions also and that's where the idea of matic was born and he kind of talked to me and and you know around that time only we were he was also developing some of the you know tools like dagger we were just mentioning like it was a simple ethereum tool for listening to the events so we we got into talking and all that and i realized that this is really big and

this can actually and and that was the around that was the time where the crypto kitties movement had also you know hit so you know it was like we realized that this is like this is a big problem in the space and you know let's do something to solve this and yeah i mean then we joined our hands and slowly like initially it was not a token project but then we realized that you know for the security of the network it will be required then you know we we like matic became what matic is today like early 2018 we kind of set up the company and everything so we'll talk about more about the about plasma and and all the technical aspects of the of matic a little bit later on first i'd like to talk a little bit

about about the crypto scene specifically in bangalore um so the thematic office uh at least before kovet was in in bangalore and you know bangalore is known you know worldwide but also like in southeast asia for its first startup ecosystem how significant is the crypto scene within that kind of broader startup ecosystem that consists of you know like consumer startups and like a lot of just general consumer companies and you know does most of the kind of crypto startup activity come from bangalore or there are other centers in india where uh you see activity yeah so uh in terms of crypto initially like what boomed in india was

the crypto trading side of things so initially the epicenter if you if you would like to call it uh like you know it was mumbai you know it started there and then you know of course delhi was also like begin the scene bangalore of course there would be like a lot of a lot of trading groups and all that but it was not that big initially but then you know slowly the developers uh you know got excited into the space so this this i'm talking about like end of 2017 very few developers uh from india were actually in the blockchain space and uh uh you know like it was mostly around crypto and crypto trading kind of stuff so bangalore was not that big at that point

in time mumbai would be like much bigger and then mumbai and delhi would be much bigger in that sense and then of course like uh you know once the like like not once but you know it took a lot of time for indian developers to wake up and even now i would not say the even though bangalore is like considered a silicon valley of india and it's like pretty big in the startup space but the like kind of entrepreneurial elite of india is still not very much into uh crypto space that much because of the you know of course the regulatory kind of gray area or kind of uncertainty that is there and frankly most don't understand you know blockchain not that well also like

whoever are there they are like kind of still uh you know on the surface so i'm when i'm saying you know entrepreneur elite i'm talking about like some of these top you know like engineering colleges like iits and you know ims and all that like they because they have a lot of like funding available in the traditional space also and you know what not so even now like 99.9 of those startups would be going into only few startups now i have started seeing uh have started coming out from these elite kind of colleges of india uh but like most of the other entrepreneurs are like you know mostly from the fintech center a fintech kind of space who you know kind of got to know about crypto and you know were

already there in some form of tech and then you know they you know want to do something in this and you know when we started at that point in time there was almost like no protocol team at all in the in the in the space so you know when we started in 2017 and like we realized that this is a big problem uh even though there were a lot of freelancer developers from india but there were no like people who were into the protocol and that's why our offices were also in mumbai once we kind of you know raised our funds and all that then we realized that you know in order to hire the talent we might have to like we even thought that we have to we might have to hire from outside of india because there might not be you know much

talent but we were very luckily surprised when we started interviewing a lot of people that a lot of indian developers the good developers who got interested and you know understand they were working for for like as freelancers for a lot of like us and germany and europe based countries and uh you know we were able to hire easily over there so now i think it's a very vibrant space in terms of like you can find a decent number of protocol developers in india and with us also like we have been like relentlessly doing so many hackathons like last year and this is a crazy number that you're going to do last year we did like 80 hackathons all over india and you know these are apart from the global hackathons that we do and most of

the ethereum community doesn't even know about it that you know what we are doing uh for for like you know spread of ethereum in india this year we would be like all of these are virtual now uh this year we'd be you know crossing more than like 100 120 is the estimate right now and these are apart from the global hackathons that we do with bitcoin heath online and all that and these hackathons happen in like all the technical technology schools of india so slowly now the developer community is waking up and that's what we've been trying to do they you know go to the grassroot level if on the if on the technology school level the developers are interfaced to blockchain that this is also a good career opportunity and all that so they

you know will be more excited about it and now like yeah so i mean we we kind of keep getting a lot of interest from the developers who are like as like college students fourth year student whatever you know to us for the recruitments and all and yeah like black you know this uh bangalore's blockchain scene is now slowly slowly spreading like especially the tech uh blockchains piece if if that was the you know that was your question crypto space is all over like you know mumbai delhi everywhere yeah i've been building wordpress websites for over 10 years and the most frustrating thing has always been devops i'm talking about deployment maintenance backups and database management i've lost so many hours of sleep doing

wordpress infrastructure management if you've been building websites for as long as i have you're definitely familiar with cpanel they've been providing web hosting management software for 25 years well they have a new product it's called the wordpress toolkit for cpanel and i've been given an opportunity to try it out it's really cool it makes managing your wordpress websites really easy you can manage multiple wordpress sites from one dashboard and you can manage users and databases too and because all your websites are managed from a single interface you'll be more efficient this is really useful if you're running multiple environments like staging and production the wordpress toolkit can also apply security settings and policies to all your sites at once so you can harden and protect your company's website

there's a free lite version and a deluxe paid version that has added features like website cloning and smart updates that's also great if you're running multiple environments anyway if you're doing anything with wordpress today i would really encourage you to check this out because it'll make your life so much easier to learn more about the wordpress toolkit for cpanel and be informed when it comes out go to epicenter dot rocks slash cpanel that's c-p-a-n-e-l we'd like to thank cpanel for their support of the podcast it's interesting you talk about the engineering schools and the the types of funding that sort of like alumni would receive when upon you know leaving those engineering schools and starting their own businesses

and i think like i think country india is a country that has gone through such a huge demographic shift in the last like 10 15 years and in many ways it's kind of now very rapidly catching up to europe and and america in terms of you know very mature uh infrastructure and sort of like online services that of course like an entrepreneur is gonna go build you know the next delivery for india or he's gonna go build the next um you know the next consumer startup because there's such a huge market and where crypto is kind of this fringe thing and so i wonder also to what extent this this regulatory stance on crypto in india has affected your

business i mean just as a as a bit of an anecdote here like we have and have had team members in india and at one point we paid them in crypto and that became harder and harder because they you know they couldn't um they couldn't sell that crypto for fiat so i wonder how that's affected your business either directly or indirectly yeah so we kind of like anticipated this uh you know pretty pretty pretty earlier because you know i'm like fairly active in the business space and uh you know kind of had the you know information that this is going to come sooner or later so you know we kind of like our indian entity which actually hosts our indian employees is absolutely

immune from the crypto space at all like it does not get anything in crypto so we have a you know you know kind of a company structure uh which has like uh like a token issuer company and uh you know kind of a singaporean company and you know any funds that indian indian firm actually acts as a vendor to the uh to the to the firms which are serving the foundation and it only gets the money in the inr so for us it has not affected uh us that much in that sense uh but yeah like the larger like as i was telling you the biggest casualty is that when we are growing the ecosystem in india like

still a lot of uh the projects or the early kind of startup requests or the the the the kind of early stage startups that come to us they are still like not of that quality which makes me feel that like i'm not saying all of them like you know there are there are like few select projects which have gone on to do really great uh you know have gone to you know list on the exchanges have launched their d5 tokens and things like that but i'm saying that still the percentage is low like percentages like would be hardly 10 20 would be like really cool projects so and you know backed by teams whom you can really like you know take the bet on or like at least like fully mature team like there are some

other teams but they are very early stage and all that so i think the regulatory uncertainty affects that part the most because you know due to that the like even like i can give you a very small anecdote like when i was getting getting married like my i had a hard time explaining it to my in-laws that what exactly i do right and they like the moment they realize that oh this is something related to cryptocurrency like you know immediately there was a doubt that you know is there something fishy here right so i had to kind of convince them and you know this is this is that i am more focused on the technology not the cryptocurrency side of things and all that so that's the extent uh even even my mom like you know who doesn't understand

this one like every time uh you know few months she will come to me like if she sees something on the news she'll come to me and you know be like you know what you are doing is fine right and like we've all had those conversations with our mothers [Laughter] yeah and and i might add also uh i mean my not my indian in-laws but my soon-to-be indian in-laws i've also had that conversation with so so that's the that's the story with entrepreneurs indian entrepreneurs and definitely when you have that kind of branding so the the elite who can easily get like you know who can easily conceptualize an idea and build something in the traditional space they would find it you know they won't find anything exciting

to you know come and why do do all of this if you can do like much better into the traditional space so that that's one casualty and the biggest casualty of that and indian government also i don't really blame them that way because you know the kind of background like if you want to understand indian like current indian government is especially on the techno you know economic reforms is fairly progressive uh and then you know they have been pushing for digitalization and digitization and whatnot and you know like the digital payments have exploded in india like i think we would be like maybe one of the biggest in in on the global scale scale on terms of the trip digital payments

and all that but you know you have to understand the background that india is coming from that uh you know in the past like 50 years even if like not even 50 years like if you go back 10 15 years uh you know you would you would hear that whatever indian gdp right you know you see at least 50 or like 30 40 percent of that will be unaccounted for like the we call that black market like you know which was done in cash and all that and the current government and the government before that like for the last 10 15 years especially this government they have strived hard to you know bring the information technology and all that stuff like gst and and you know all your filings to be online and things like that so they've been trying

to push that and you know your social security number tied with your all that stuff so so that you cannot kind of evade the regulatory purview and the moment you bring like crypto into the fold like you know india is coming from that dark period of 50 years of a socialist kind of country to becoming a capitalist country now and then suddenly like like it's it's hardly been 10 years and we are still struggling to you know get to the optimum levels and suddenly you introduce crypto and boom everything goes out goes out of the window right like you know whatever you did whatever you built in terms of your regulate regulatory you know framework or bringing people to the in the frame of like legal stuff goes out of the window so definitely they are going to be

scared and they will go very slow on this and what they have been doing is that is fairly smart so they are actually they didn't they never banned like bitcoin is not banned in india bitcoin like payment in cryptocurrency is banned that means you can't consider uh like i can't work and you know raise an invoice to you in bitcoin that you can't do but i can have bitcoin as a digital asset with me and they never banned it all they did was they played very smartly so they have a so our federal bank is actually affiliated like if you want to open a bank you have to get affiliated with the federal bank of india and which is the rbi and rbi what they what they said is that they issued a circular to all the uh banks affiliated to a techn like

which means 100 of the banks in india that you should not support cryptocurrency exchanges the moment you stopped supporting exchanges you know the immediately you can't convert like you you basically stop the on-ramp off-ramp right and then you know the problems that you were just mentioning that you know your team was facing that's exactly the same problem that the on-ramp off-ramp is now no more available but still you could do otc you could do like peer-to-peer transactions and i think indian uh like you know the exchanges although it took a lot of time and then government actually did that smartly they wanted to play that i have that one one and a half two years of period to understand more about it and then india being a you know democratic country and

free country like people up you know kind of applied against that circular or you know kind of fine litigation in the courts and courts kind of subverted the rule because you know that the banks could not logically justify that why they they they banned the exchanges right and either they have to come and say that hey cryptocurrency blockchain everything is banned and it's illegal then you can't do it or they can't simply go and say that hey you know you should not deal into this because that's against the personal liberty of an individual so that circular got quashed and now that's why you see the height and uh you know kind of activity because that circular is no longer applicable now and then now the banks and everybody else is supporting the cryptocurrency exchanges

and all that and in all this while the indian exchanges like wazirex bit bns they kind of circumvented it by creating very smart peer-to-peer like because india has a digital system of payments called upi universal payment interface something like that so they kind of came up with these peer-to-peer you know transfer so instead of you depositing money into an exchange account right now that you would do with coinbase instead of that you deposit into some intermediary accounts which then exchange gets to know that okay you deposited they give you the credit and when you are exiting you also get the money from you know multiple accounts so somebody was telling me they kind of got out like 100 000 rupees and they got the money

from 30 different bank accounts right so how do you kind of now ban the exchange account so you know like different kind of innovations people tried to do and you know did it very well i think in that last one half years yeah that's that's such a fascinating story you know like what's what's going on what's going on in india moving on to matic like yeah in this indian ecosystem what is matic and what is the main problem you're looking to solve so uh you know as i said that uh you know we like we we got like uh you know the matic got born uh when the crypto you know kitty's movement hit the ethereum space right and that's when we

we started working on the scalability on layer 2 and you know the idea is very simple that whatever like and we are like big ethereum community members right so whatever you can do on ethereum it's like such a beautiful thing like you know you have you can have during complete smart contracts where you can write complex financial business logic and you know the the code gets executed as per the you know the the coded you know rules of the smart contract and it's like such a great thing and then you know which can actually change the course of humankind like how we how our systems interact how our organizations interact uh and how we organize with each other right as human beings so you know the idea was to give

it a scale wherein you know more and more applications can be built on on on such a platform and that was the core that is the core idea about matic and you know as i was like going into more into technical details what we do is that we support an evm on the layer 2 like you know ethereum virtual machine and you know where you can not only do your payments but you can do smart contracts and you know the technology that you use to you use to kind of do it on you know you can take the transactions on off like matic is essentially an off chain like you know execution platform then ethereum right so you are instead of executing things instead of executing smart contracts on ethereum you are executing them on a you know side chain

which is evm enabled and all that and the technology where you can have this like using which you can have this very free ability into ethereum like everything is you know is very fearable on ethereum is what you know is plasma so plasma is basically a framework where if you are doing the transactions on the side chain you can kind of verify that and you know do a lot of stuff and of course like plasma has its fallacies so you know right now like for example if you wanted to do like simple use cases simple logics like you know payments and dex transfers and all that those would be fully plasma enabled on the on the side chain but if you uh but if you want to do some complex uh you know custom logic then you have to

write like custom predicates for it like predicates is nothing but a fraud proof think of it as a fraud proof that you are doing something on the side chain and you should be able to verify it on the main chain so it's easy to do for simple transactions like payments and you know dexes and all that but if you are doing a complex writing as complex smart contract then you have to write the custom predicates like what let's say for example augur team is doing like recently they uh you know announced in public that they are integrating and all that so like you have to write custom predicates but otherwise like how matic like is differentiated from others is that you know instead of offering a single operator plasma which kind of you know puts all the like you have to trust a single operator like plasma was

designed to have to have like even a single operator is there but he can't really like mess around with your funds you can withdraw them to ethereum and all that so instead of having a single operator plasma which had its fallacies we kind of you know built a multi-operator plasma on top of a you know bft tendermint chain where like these hundreds of these uh validators can run the plasma you know plasma machines like you know where they can execute the logic and you know all of these validators like periodically do a consensus amongst them and they post a checkpoint to the ethereum so the what differentiates this is that this you know multi-operator plasma layer is backed by

a pos layer right so if you don't want to use let's say you don't want to get com you know into the complicated predicate writing and all that what you do is you simply you know because the pos system that we have built like with 100 plus validators and all that is fairly robust so most of the games and other kind of use cases nfts are all that they simply end up relying on the pos layer they don't you know have the like the full-blown plasma functionality into it compare that to something like auger which will have a full blown plasma functionality so now like what once i've explained it to summarize on the like what matic is it's a layer 2 basically layer 2 means like an off chain execution platform

and on that execution platform we we offer uh you know multiple ways to you know kind of secure your stuff on ethereum so one way is you can choose plasma or you can choose pos and in future and what if what it differentiates us is that in future we are going to offer more security scenarios on the matic network for you for for a developer to choose so if you are developing a game you don't need that much level of like ethereum level of security like or decent like like security guarantees i would say like you know you don't want like to have full-blown ethereum withdrawability and all that although you all you know get a large part of it already because of that

robust pos layer but even then then you can simply rely on pos security if you want absolute you know uh withdrawability and everything on on ethereum you can use plasma or maybe the the future approaches like optimistic roll up ck roll ups and things like that so think of matic when you think when you're thinking of matic like right now it has a hybrid pos plasma layer but think of matic as like a you know multi layer two approach in a very weak sense aggregator also right right now it's it offers you a pos side chain or a plasma but in future it will offer you more and as a developer you choose uh what but you're and that's what is currently contributing to the you know you were mentioning about the traction of the

network how these like you know applications like poly market and these are like you know now choosing matic because it's first it's production ready highly scalable and then as a developer you get the freedom to choose the you know the kind of security level you wanted to choose for your application so that's that's really fascinating our friends over at al goran are starting an office hour series so every week or two algorithm will bring together their team partners and community together for a live discussion intended to provide you with all the answers and resources you need towards building useful meaningful blockchain applications by joining office hours you'll learn how to get started with command line tools and use the sdk and rest apis to help

you build applications for use cases like crowdfunding asset tokenization supply chain management and gaming applications each office hour will start with a theme for example smart contracts or writing contracts in python followed by an open q a in chat so if you're building on a blockchain protocol that has unfeasibly high or unpredictable transaction fees and doesn't provide you the speed you need or if you work at a large enterprise or financial institution and are interested in learning how to build applications that can integrate with your current technology stack or whether you have no blockchain experience at all and just looking to take the first step into learning something new algorand could be the right solution for you to learn more visit algorand.com epicenter for developer resources and information

about their next office hours we'd like to thank al goran for the support of the podcast when you look at the ecosystem broadly like the way i tend to think of it is ethereum is this this this city there's like lots of activity in the city but it's kind of expensive to deploy anything in the city just like it's probably expensive to have an apartment in manhattan and a lot of suburbs are being built to the city where the hope is some of the applications could then be on the suburbs instead and it will be cheaper to deploy and execute your application on the suburb and sort of matic is one of these attic is one of these suburbs

and in general there have been two kinds of approaches one is something something for example what solana might be might be doing which is a completely independent blockchain having a bridge to ethereum so that people could come from ethereum into solana and partake in some application there but the security of these two systems is independent of each other so when you actually as a ethereum user you take your asset to solana you are completely trusting the security model of solana and on the other side is the optimistic roll-up and zika roll-up space where it's another suburb to ethereum but they're trying to give the guarantees to the user

that when they move their assets from the city onto the suburb in some senses their assets are still being secured by ethereum the city and they can always if something goes wrong on in the in the rollup they can always come back to ethereum and seek like and ethereum will secure their assets and ensure that they don't get cheated in the in the roll-up they're still relying on the city police as opposed to the solana suburb has its own private security yeah exactly exactly so it's like you're building a suburb and then are you relying on the city police or are you building a police force of your own and the solana is building a police force of its own whereas the optimistic roll-up and zika roll-up

spaces they are they're trying to build it in a way that they can rely on the police of the of the city i mean i i think this is a very brilliant way of putting it but even like you know going that way like think of ethereum as a country like you know like let's go on a larger scale like think of ethereum as a country and then you know it has a city center which is like you know city center which can be let's say new york right which is the ethereum main chain and it it is like now many people don't realize that ethereum already has like 60 odd side chains like some built by some private parties some like you know like like us with matic some like consider these you know side chains or all of these as

different different states okay so you know you have uh you know the core city as uh ethereum main chain uh you know maybe washington dc is the ethereum main chain which kind of like you know is the center of the the universe for it and then uh you know from there you have these different different states and you know some of them uh you know can be more uh like you know tied to the federal structure of you know washington dc some of them might want to remain independent and all that and they have their own like pros and cons right there like the state level security and you know policing and all that can be like slightly different on that while solana would be like a completely separate country which now

like you know all this bridge and all that like if you see all of these like solana near and all that what they have realized over the past like last two two years back like people like eos and all that they used to call themselves as like ethereum killers right now they realize that you know you can't kill ethereum right it's a phenomenon itself and what they have started doing is that they realize that instead of bad mouthing ethereum like rather try to be and this is like more of a you know like their uh you know strategy to kind of capture the adoption that you know try to be closer to the ethereum space because all the developers 99 of developers are in ethereum so what these guys like near and solana and all these guys are doing is create a bridge with the

ethereum and say that hey you know you can you can have things here you can be on ethereum but then transfer it over to us so this is like a electron hold strategy from uh many of these different layer one uh you know this thing and this is fine like that's a business strategy from their side and as ethereum community like it's very open you know you can do whatever you want to do if you can have a different country which you can build and you know like in this analogy which which would be good and you know would be good for the larger uh good of the overall like the planet why not right so so that's the that's the difference and what but in the layer two like in the ethereum country itself also like there are different different kind of layer

twos like consider them as different different states and some of those states would be like more stronger have stronger policing and you know kind of what not like various different kind of you know benefits and versus some of the other states would be like you know maybe some laggards in some some spaces but at the end they all are tied up to the ethereum community like yeah so like just amplification of your analogy and yeah it's a brilliant strategy to explain to like you know non-technical people mayor told me about this analogy last week and once again it it's one of those things that mayor comes up with that blows my mind so i love that we were able to unpack it here on on the podcast and to some extent it's like if you think of it

in the country analogy you know you think of those countries you know if you if you come back to kind of you know imperialistic times right where you have like a country that you know is producing some sort of resource for like the main empire or or you could think of it also in terms of like having free trade agreements with other countries right like there's all kinds of ways you can bring onto this analogy maybe maybe one curiosity i have is my impression is that you know asthmatic you want to have your own independent security your own pos layer but you also want to enable dapps to you know borrow security from ethereum and you've built building toolsets for both but my impression is that most of

the dabs that are actually successful in matic are just using the native matic pos layer so it's the case that independent security is proving a better product than being able to borrow security from ethereum is that is that correct yeah so i i know that's that's not really the the the exact reason behind it the the reason is like first is that you know even if you s even if you think about the individual security like first of all that matrix pos layer like proof of stake and all the staking and everything staking rewards and all that everything happens on ethereum only so all the validators of matic actually

have to register on ethereum on a smart contract where they register and then once they are registered then only they become a part of this like the the sidechain validator layer and if they are doing anything if let's say they are participating in the consensus and then let's say they submit a like we call it a checkpoint proof they submit it onto ethereum if the ethereum smart contract does not like recognize them it will reject that so all these validators the security of the network everything is on ethereum now on the plasma uh like you know what you are saying is that most of the applications end up using pos the reason is that it's simpler it's easy to use because they don't have to get into

because plasma the bigger problem is plasma is the one weak withdrawal times so if you are exiting something from ethereum to uh matic uh a ligmatic to ethereum like we're drawing back to you know ethereum you have to wait for seven days and there are people are doing like building like exit like kind of what do you call like toll bridges basically you can think of like toll bridges so you can pay some money and then you can get a faster exit the toll guy will give you a faster exit all that so once people build those like easier interfaces where you can exit within like you know you can pay a small fees and you can exit with instantly then a lot of these people might start using plasma also but right now it's all about ease of use and the user experience

and that's where like right now and this is going to be the same thing for all the like optimistic roll-ups and and you know what not like even with optimistic roll-ups uh where you you have fraud proofs you will have at least like 24 hours to four day period of withdrawal like you know challenges because at the end what you are doing is that you are have to you have to kind of uh you know when if somebody is trying to do a fraudulent withdrawal you should be able to challenge it but then there are there's other category of you know layer one exits like for example zika roll-ups which use validity proofs so with validity proofs the the delay period is not that big like you know then it comes down to maybe 10 20 30 minutes so right now but the problem is that

when you are building on something like this you know your building experience goes for a toss like you have to do a lot of complicated stuff so at the end of the day the idea the long term goal for everyone like everyone who is working on layer 2 like us or anybody else the long-term goal is that at the end there should be more like the the city policing or kind of the the policing of washington dc or the federal structure where ethereum is the kind of the federal kind of capital that is the most uh you know beneficial way of doing it or better way of doing it because then you can have high value you know activities happening in these other states because they know that at the end if something happens the federal you know fbi is going to protect us like

oh like let's get into deep into that technology like you have federal agencies who can protect you that means you can withdraw it back to ethereum so the end goal for all the layer twos is that only whoever calls them layer two right if somebody is calling them layer two but then at the end they have a completely separate security where their validation everything happens on the site you know their own this one they are simply calling a bridge uh a layer two which is which is not the not the right thing like for example example of that would be let's say that like uh you know but although lana and near are not branding it but technically you know in some form they are trying to be that uh some for example x die for example like they have uh they

have a bridge but they're you know all that validation everything happens on a side chain so they are they are a separate chain with a bridge they are no different from like let's say something like solana or near or anything like that so but in our scenario like if like if you separate out ethereum the network does not exist so but then again that's that's not the ideal approach the ideal approach again would be like as we are researching on optimistic roll role absolutely the our approach is more of an aggregator approach if you think like that way is why you know you can have you you can choose your level of security that you know but at the end we believe that everything will tie it down to ethereum because that's where the value exists and you know you would want

to have like stronger bridges to that federal structure so yeah and then you can choose among the spectrum that how closely you want to be governed with the uh you know with the federal structure like you know do you want to be i don't know the states in us which are more close to federal you know this one but maybe it depends on politics like if you are republican then uh you know and the republican uh con is there in the parties in the office so then they become closer to federal structure i don't know but yeah i mean i've heard stories that some of the states want to you know maintain their sovereignty so we what we want to do is that we want to give the people the choice that if you want to live in texas live in texas if you want to live in

something like uh you know more closely governed by federal structure you do it that should that should be your choice but the country is ethereal something like that yeah this this is so fascinating i love this uh i love this conversation i'd like to maybe just get a sense of where you position matic you know we talked about all these other you know layer two or bridge solutions like solana optimistic roll-ups you know we mentioned poa network where do you position matic in within you know this space and why would someone choose to build on matic over another solution is there a use case that's particularly well suited for matic

like right now the biggest kind of advantage uh the kind of adoption we are getting is from the uh nft and gaming side the best thing is that because we support an evm so for any developer who's building uh you know like like on ethereum and they want to have like faster transactions and low cost like you know gas fees which technically everyone wants but not the people like something like for example somebody who is doing a very large value transactions like hundreds of thousand dollars they might they probably don't need matic like but then if you have a system where like average transaction cost like if you're buying nfts which is which runs into like single digit dollars also those uh you know use cases are the biggest ones so gaming nft

uh like you know some micro lending use cases d5 some of them those are like you know using matic the biggest benefit is you know it's a production ready solution so uh that you know you have a evm if you have you're already building for ethereum you can very easily integrate uh your same code base and everything on uh on matic and you know have those bridges like you know which comes uh built in into the into the network simply use uh an sdk or whatever to build that so the develop the ease of development is the biggest thing and we have worked like you know last one year very extensively on that so ease of development makes it very easy for the like for developers to adopt that

and yeah i mean like gaming nft you know early d5 use cases a lot of like you know crowdfunded crowdfunding social network kind of use cases all of these make uh you know much more sense the high value d5 use cases like you know borrowing lending and all that right like you know they might be well better suited on ethereum itself uh you know as far as the gas fees like the something like liquidity mining doesn't strike back again and you know we start seeing 300 gas fees as far as that that doesn't happen like i think the d5 the larger kind of value use cases are better secured on ethereum itself so you mentioned early on that

you were doing a lot of these hackathons across india so i'm curious if that's your go to market strategy um doing a lot of hackathons and spotting these teams that are building the apps and then getting them to be on the matic network is that the centerpiece of your business development approach uh yeah i mean that that's definitely a big part of the community building uh where the developer like you know generally in one hackathon it's like you know you won't find the like one guy one developer you know in the one hackathon itself you know finding something big and all that and building a system business out of it you

know it takes them multiple uh hackathons and we have seen this like you know some person joining one particular hackathon and then he participating in the next three in some different colleges because you can apply for different colleges also and you know all the global hackathons we keep doing stuff we keep doing with the you know git coin and all that so they get get to know more and more they get more and more comfortable and then once they realize that this is much more scalable easier to build they start kind of using it for their actual product eventually so hackathons definitely one big strategy uh and and yeah i mean individual reach-outs also like we try to be aware of the markets as much as possible how much like who all is building what and all that like so we have a very solid

business development team you can call them or several you know is the better word like developer relations team so which keeps on like you know having a keen eye that you know which projects are building what kind of technology especially like you know like we have teams like you know one team focuses on nfts other team would focus on d5 projects other team will focus on like miscellaneous use cases and things like that and uh yeah there we there they spot the good kind of developers and then we kind of help them initially like from our side like even if they are not building automatic we kind of keep helping them on various various fronts and eventually when they realize that okay this is like much better platform i still stay on ethereum like most of the

developers want to stay with closer to the ethereum community and that's why it's very hard for it's going to be hard for any other kind of layer one to you know out compete ethereum because you know like it's kind of that that network effect that ethereum has like all the developers want their applications on ethereum and also everyone who gets introduced into the blockchain space he like their first blockchain is always ethereum right because it's what is most easy to explore and experiment and it's what which has the maximum documentation and you know organic like developer queries like when you as a developer when you're developing something you simply query that okay this this error is coming and you will see somebody

would have written something about it and that's something which is which is very organic you there is no shortcut to that any other blockchain you know kind of platforms who are trying to build a separate kind of completely separate structure it's very hard for them to kind of achieve those kind of network effects so again coming back to the the strategy yes like anybody who's building on ethereum we talk to those teams and you know try to tell them the benefits help them and eventually they see the value if they see value in that they you know come across so i i want to come back to uh a little bit of the the technical aspects of matic and so we we talked about the the proof-of-stake system that you built

alongside plasma and i was kind of surprised to to find out that matic leverages tendermint consensus can you talk about some of the technical choices that you made here why you chose to build on on tendermint and how it interacts with the other components in matic uh basically if you see the technical architecture of matic there's a three layer approach like so first like the base layer is the ethereum layer where the staking and all that happens and the checkpointing happens right then the second layer is basically this tendermint layer why we chose tendermint because you know uh at that point in time even now i think it's the best choice to build uh

like this best sdk to build a you know like a different like pos chain so and it's customizable and all that so we did some heavy customization into it and added like the third layer into it which is a evm layer which is the geth or kind of the bohr like we call it the bohr node it's actually a modified form of get only so again why get because you know for evm it's kind of the the best client that way so you know so so you can see already see that you know three layer approach you have ethereum then you have this tendermint layer and then on top of that you have a get node integrated into it so it you know as a single validator so design choices if you ask me that why we

chose to you know do this pos so uh layer over there is that because you know with plasma the biggest problem is the data availability issue like you know if you are running one single operator plasma and the operator simply runs away doesn't share the data then you can't even exit on the main chain so what we did is that we kind of you know solved we tried to solve the data you know availability problem by decentralizing it like now you have 10 different uh people who are running the chain or like 100 different people running the chain it's hard for them to collude and you know kind of uh you know do this running away thing together right and then on top of it that you have the evm layer so what we needed to be able to do is if it's layer two and

then it you know it still kind of produces blocks every six seven eight seconds ten seconds uh then because you are building a separate pos layer that will be subject to its own scalability constraints it doesn't make much much more sense right so what we had to do is we had to separate in order to achieve high amount of scalability that we today have like 7200 tps and you know uh like two second block times and all that so how to do that is that we basically kind of separated the validation and the execution layer so the second and third layer if you imagine second layer is purely a validation layer if you see the blocks of the tendermint layer it's only about the validation parts like where

these validators constantly kind of validate all the blocks that are being provided you know generated by the third layer and then you know every 30 minutes they kind of you know have a consensus between them and then send it to the ethereum now coming to the third layer if if let's say we wanted we had to kind of create a third layer and which only produces the blocks and all that then it becomes like a depos mechanism which has been highly you know kind of not appreciated right like with eos and all that so we didn't want to do a deep boss system where few people or out of these hundred validators few people only have the capability to produce the blocks so what we did is that we had we and you know one of our earlier goals and i

should have mentioned like this one like more earlier that you know for the layer two one of our main design goals is we want it to be decentralized and censorship resistant so although the optimistic roll ups and you know kind of the you know zk roll ups and all that are very good solutions but then they are subject to uh you know centralization and you know censorship attacks also because you know there is there are one or two operators which are running the chain so that was also a design goal but we still had to achieve the scalability so what we did is that the third layer which is the validation layer which is sub you know separated from the execution layer what happens is that this chain randomly selects a kind of a committee like all hundred people are

validators as well as block producers but then there is a random committee selection which happens let's say every six minutes where this committee gets selected and those six people like those seven eight people are now responsible for producing blocks for next six minutes then next committee comes then next committee comes and all all of this also happens uh like takes into account the amount of stake they have right so the more stake you have the more chances you have to be a part of the like you know the person who is going to be or the validator who is going to put the checkpoint on to ethereum and that's when you get your staking rewards so no matter what you are doing on the on the side chain at the end you have to submit the proof of everything on ethereum and then you get only then only you get your

you know rewards so basically the validation layer is only meant like the tendermint layer only is focused on doing the validations of all the blocks that are being produced and then the like execution layer is a sub committee you can now think of it as subcommittee which gets created out of these validators and it randomly keeps on fluctuating keeps on you know kind of randomly rotating these other validators and nobody gets to know upfront that you know who is going to be the valedictor and uh you know in the next cycle i mean only the next few cycles you can understand but not like on a larger scale you can't run a censorship attack or something like that so so yeah that was the reason to kind of separate the validator layer from the execution

layer so that we can keep the system center like you know fairly decentralized but then even even then if you want to achieve the scalability you can't have hundred validators and you know running the chain at two second three second block times right so you because the block propagation takes time so what you do is that you select random committee every few we call call it spans and sprints every few spin you know span you create a new committee which kind of generates the blocks hope that makes sense like there's a lot of detail in that but yeah i hope it makes some sense so just to recap the the validator set is validating the pos chain and then there is a random subset of these

validators that are executing the smart contract logic right we're actually creating the blocks of the evm chain so there are two types of blocks are being created one is the evm chain blocks which is being created by the committee and then you have this tendermint layer blocks which is which only has the data related to the validation of the latest blocks that were created and every 30 minutes they do a consensus amongst them two by three consensus amongst them create a checkpoint of all the transactions that have happened like all the blocks that have been produced and put it on ethereum and then only they get staking rewards so what are the security tradeoffs of this approach what like what what trust assumptions

does one have to have in the system when operating in in this in this configuration yeah so the trust assumptions like if you are using pos then you are definitely trusting the the the pos layer if you are using pos only if you are using plasma then because of this like the the main thing is main assumption that you are you are taking here is that that because the the number of validators is like really high and uh you know out of them randomly some of the validators are being selected and if you think of it now like those that committee that gets selected for a span or sprint whatever like every six minutes that committee is actually a committee of plasma operators right so

they are running the the plasma kind of for that particular time they are the operators and they get keep getting shuffled right so the trust assumption is that you know these like having a large set of decentralized kind of operators you will have the data availability and as far as you have the data availability you will be able to if something goes wrong and if you're using plasma you will be able to exit it to ethereum that's the main thing and having that chain has more decentralized and you know tendermint consensus bft concerns and all that like that solves a lot of like you know liveliness and you know like that those kind of network requirements so east 2 is on the way and the beacon chain is

launching next week does e3 change the development plans for matic in in any way and yeah how how does matic fit into the broader eth2 ecosystem as it as it develops yeah so uh there are multiple uh you know like multiple facets of this like first and the foremost facet is that you know the what is launching is more or is like the phase 0 of e 2.0 and the real like time where you will be able to execute your transactions or run your smart contracts on a shard would be is like fairly away like you know two to three years minimum you know like where you will have a

reusable chain like this is like the first phase of this entire process right so it's fairly away and one has to see like you know ethereum uh you must have seen that vitalik's like roll up centric or layer 2 centric ethereum roadmap also right so eat like you know you have to keep in mind that ethereum is now a very decentralized community and you know there is no one road map for that like you know there is a layer to specific road map there is a uh you know east 2.0 sharding a specific road map now even within that what i believe is like you know let's do simple calculations for example right now like you know ethereum one has let's say 13 transactions per second

and you have like you're going to have 64 shards you know with the 2.0 so and each shard will be like will closely resemble let's say eat 1.0 currently even if you have pos maybe the tps of these chains will go from let's say 13 to 15 tps to maybe let's say 30 tps whatever right and intershot communication is even like further away like it may be like five years away i don't know so each chain is basically ethereum like for the next three four years like if even if eat 2.0 comes in it will be like a group of independent chains you know having the same like acting like bridge and if you think it that way it's you

know you will start seeing matic uh you know architecture also similar like you know the one side chain that i i told you that the one part i missed that you know the validator layer separation of valid data and execution layer actually enables you to have multiple execution layers so on the same you know validator layer we can have tens and tens of chains running on top of it and then it will start resembling more closer to it 2.0 kind of system where you have multiple shards multiple chains uh which are and ethereum one is kind of the beacon chain over there right so they are talking to them so but yeah coming back to the e 2.0 architecture so inter chart communication is going to be like even further away so like three four years or whatever so

what's going to happen is that you have you'll have 64 shards and let's assume that even inter chart communication is also there in three years and you can assume all of this tps as one single dps and you know like smart contracts can interact with each other across different charts let's assume all of that even then the the networks like full capacity would be 64 into let's say 20 30 transactions per second hardly like 2 000 transactions per second and if you see it that way like a 64 times extension of ethereum 1.0 or even 100 times one extension of ethereum 1.0 simply d5 will be able to eat up all of that bandwidth like the right now the like the the demand and supply of this

like you know is is like you have x amount of supply of the transactions per second let's think of it as a commodity the transactions per second or gas basically per block let's say and you already have 10x that demand right and and that too is like unsustainable demand speculative demand because you know you have 10 dollar 20 transaction paying people because they are speculating but if it goes to the wider you know public and you know the the real like traditional public starts coming into it you already are looking at like thousand folds demand then what it like you know what what is there currently not even thousand like even more than that but i'm saying that even with eat 2.0 the moment it comes in the bandwidth will will get consumed very fast and

then again you will be in a situation that where do these like large transaction scenarios like you know gaming and all that uh nfts and you know again a lot of like social networks where do they go because only the e 2.0 the entire bandwidth can be very easily eaten up by d5 we are not even like at the starting of the d5 like the real big guns have not even traditional world have not even jumped into the field yet so the the long term thesis for us is that layer two for any chain like even if like you had a chain like solana or whatever like you know the chain was there and eventually they will also get exhausted and the ideal way is to have like one settlement layer like ethereum or ethereum 2.0 and the

business activity has like non-opinionated you know execution environment so talking to a huge number of like you know people who want to build or are building applications on blockchains you know one thing is very clear that there is no one one size fits all solution right so every you know every enterprise every client every business has their own needs own requirements so you know having thinking of this internet 3.0 or web 3.0 as one opinionated platform and you know everything running on that does not make sense so that's why we we strongly believe our thesis that you know there will be one settlement layer and then there will be one like you know layer

two or kind of non-opinionated layer two kind of environment which kind of connects back to this central settlement layer which is ethereum in our opinion and you know the business activity can happen on layer 2. so even when heat 2.0 comes in nothing changes on our side what we are doing we keep doing that keep adding more and more layer two approaches and you know like which suit multiple different businesses yeah i think that makes a lot of sense and i think this the way to look at this as a a multi-blockchain ecosystem is what makes the most sense to me i mean i've always been kind of confronted with this with this very idea that you know people people put out there there's going to be one blockchain

to rule them all and sure that might be appealing but i mean just look at the way software development has has evolved into this ecosystem of languages and and stacks right so not not just you know a single development language but you know a series of tools that are combined together in a stack and you know these these languages and technologies kind of like overlap between the stacks et cetera and so that you have you end up having these monoliths and some are of course you know uh much more present in than others like in web development you might say that's node for example but there's like they're at some point in the past you know php mysql was the the predominant stack and in some circles it might have been like

asp you know the microsoft approach and so i think that it makes total sense to assume that in in a future where blockchain systems are uh driving a lot of economic activity and you know beyond that we have different stacks that serve you know specific uh use cases and needs and perhaps even serve certain applications in certain geographies et cetera and that it will end up being a very diverse set of tools and of course lots lots will probably disappear right lots of the of the approaches that we're using today might not exist in 10 years but it'll be an ongoing evolution of systems that that make up the ecosystem

absolutely that makes sense as we're ending uh arriving here to the uh to the end of our conversation uh you you did mention dagger a little bit and we were talking about this before the show that you know matic and the team have been contributing to quite a few different tools in the ecosystem and i was surprised to find out that wallet connect was one of them um talk about this this philosophy or this this kind of strategy of also uh building other tools then you know just the product you're that you're working on what is your contribution to say other uh other tools in the ecosystem so i mean i think that the biggest in terms of the tooling uh support like you know back in the day we used to like

as i told you that you know we contributed to the same community with dagger and we even uh like uh like wallet connect so our team was actively involved in you know building the first ever like production ready version of uh this one like you know jd himself was uh like he himself released that part so you know in terms of like we also contribute to the like tendermint uh you know like like we built something called side channels uh in tournament which we believe is the right approach for uh you know intel like ibc also inter blockchain communication uh protocol also so uh like a lot of this stuff in terms of open source part but i think in the last

like you know six to eight months uh you know we have been more on the you know kind of consuming end uh you know where we are providing this production ready you know platform so we are getting a lot of like help from the open source community in terms of using let's say blocks block scout which has been built by poa network for example using that as a block explorer and you know like we used get uh as the you know this one so like it's it's a combination of like the technology built from this one so but on the tooling side like the idea is to you know keep contributing to the to to to all the tools that we are currently using so you know like as i told that tendermint

consensus we contributed something and uh now like our team is very actively you know actively researching into these zero knowledge side of things and we expect more kind of contribution from our teams team into the the roll-up space also so yeah so overall this the strategy is right now our focus is actually on the developer tooling side of things is to get or make everything that is available on ethereum uh available on uh matic also so you know the oracles like chain link launch their main net on on automatic like you know then all the uh other like top oracle platforms are also launching their uh like you know teller network

yesterday announced uh similarly all the like the the bigger bigger name that you will hear in the oracle space they are launching similarly something like gnosis safe and all that so right now we are more on that receiving in terms of having all the tooling that is available on ethereum uh make it available on on matic uh but once everything stabilizes then definitely like that contributing back to whatever feedback we keep getting from the users contribution of that back into the ecosystem will will be like the way to go from there what do you think is the solution here i see this as a pretty complex problem where you know if you want people to come to matic you need to also have the tooling you know you mentioned like

gnosis safe or you know any other uh applications that people are used to using on ethereum main chain as the ecosystem grows and there are many you know city cities right uh they they also need access to these kind of essential services it it seems difficult to scale where uh you know you know coming back to exhaust is safe you know they have to deploy also on matic and also on like you know some other some other side chain or another blockchain what what's the solution here is interoperability the only are like mature interoperability tools the only way forward or are we gonna be stuck you know having multiple deployments of the same the same core technology on all these side chains

yeah i mean i think that the biggest problem actually is not the deployment across the the things like you know the the problem bigger problem is that you know is is that there are not enough paying customers as yet like you know for example gnosis safe they would be very happy to deploy on multiple chains as far as like people were willing to pay for it right but right now they have to do this pro bono right similarly for infuria they have to do all of this stuff like pro bono uh to kind of fuel the early adoption but eventually i think that uh you know if this when this when the system grows big enough then they will be like you know more and more paying customers for these these guys and then you know scaling is not

difficult right now problem is that for all this tooling you have to do it in public interest like as public good right free public goods right that's the challenge i don't think that uh you know if there are enough paying customers like anybody minds uh you know scaling their tooling two different ways like for example dagger if you see from if you ask from us like we have been like i think i think we spend like a couple of hundred dollars every month to just keep the system because there are a lot of applications which are currently using dagger and we keep it up uh you know just for the sake of these these applications and but then you know nobody's paying us for that and uh the moment we bring in a payment plan on to that and although that's

that's not our core this thing but even if we bring it that i bring that people will start using some other free service right so like i think the the the problem here is not the scaling of these tooling because that's easy you know that has been done in the web to space very well is more of like uh you know the business models that are available uh you know or the users that are available paying users that are available or not so while going through the matic architecture one of the main main concerns i had was that the design choices that matic made make sense from a 2018 perspective i'm somewhat curious and skeptical that

they make sense from a 2020 perspective so here's here's what i i'll qualify that statement more so when you look at like 2020 and 2021 for any like l2 and blockchain network ultimately like you need consensus you need like a way to like execute these smart contracts enough and and certainly like very large key inventions are are coming along the way i i and i think like the two two biggest ones are you know avalanche consensus which is actually better than tendermint consensus on most dimensions so avalanche consensus is most faster it can support a lot more validators than

tendermint consensus the second the second key shift i see coming in the ecosystem is in the evm you have like this single threaded execution so uh evm like every transaction comes it needs to be processed state needs to be updated then the next transaction process date updated etc whereas like solana execution is different in solana execution you can have 100 transactions come in and if they impact different parts of the state they can all be processed in parallel on a gpu so the main advantage solana execution smart contract execution creates is parallel process processing on a gpu

which is why solana is able to be like 10 times maybe even like even in the future 100 times more scalable than any other smart contract system out there because they are able to exploit this parallelism of a gpu in the blockchain context so do you think this is a concern that like there are going to be better smart contract execution environments as well as consensus algorithms and the combination of these two things is going to and then you're going to compete on a business level with these platforms that have just these better inventions and you'll be stuck with tendermint and evm and in the long run this will end up have being a sub optimal choice do you have a worry like that

yeah so uh i i'll answer them you know one by one for example so so so for example this one like uh the tender mint and using let's say the evm like system like one thing one important word i i like you know keep i keep using is the production readiness of these things right so you know that comes from the proven record of a particular technology so so so so for example tendermint they they might like tendermint might have easily have like 100 plus chains built on top of it and you know it's it's fairly stable avalanche even though like they i think few one or two months back they have

launched their main net that is also restricted i don't think it's a full-blown full functionality mainnet if we would if you would have waited for something like that you know we would we would again will become like those uh ghost research paper projects which talk a lot of you know you know that like you know talk a lot of futuristic things but they don't have anything you know running on in the production so that was the choice that we we kind of you know actively have activity taken we want to have a production ready network where you can have next level of secur you know scalability on top of ethereum so if we are able to do live from 13 transactions per second we are

able to do 7200 transactions per second that's already a fairly big you know leave from there and to counter the like you know let's say the scalability requirement if let's say that requirement is not enough as i already told you that we separated the validation layer with the execution layer so we can actually add multiple such side chains into the into the system at a much rapid rapid pace now so that is also one more uh you know one one more important part over there that you know the like in terms of from our perspective we see this platform like this network like we do we don't we don't expect this to go from today where like if you combine all the dapps in the ethereum

ecosystem or the overall ecosystem you will hardly have 10 000 dau like ten thousand two hundred thousand dau if you include hundred thousand if you include all the like token transfers like these uh like bitcoin transfers and all that like in the whole space that's a very very small dau and that says i don't have an exact you know fact sheet on that that you know somebody would have done the analysis but roughly that's what people you know say and if you come to dabs it's hardly you know hardly with all the dabs combined 10 000 dau right so you know right now we need to go from 10 000 to the next million or you know 10 million users and i think with the current scalability choices available on

top of ethereum you would be able to easily go to that level uh with solana like as you said that you know like there are multiple like there is it's it's a very interesting concept that you can have multiple parallel uh you know executions and all that but then there are other like people have shown concerns also uh in terms of the centralization of such a system because of the state bloat right if the state becomes bloated too big right you know like if you're doing 50 000 transactions per second your state can be can get bloated very very fast and then only a few people will be able to run it because you know if you want to run it fast then you need to load the entire state onto the ram right and then it's very hard to you know kind of have a

32 gb dam or 50 gb ram whatever like if you if your state starts growing too fast so there are multiple concerns and you know why we took the design choices with which we took is that you know first of all they are proven and plus we have a plan on our side like you know we can add multiple side chains plus we are now working on different layer two approaches so you know we have our backup plans that when if let's say this chain starts getting you know bloated and we start seeing 32 3200 transactions per second uh you know then we can easily create more chains secondly in terms of scalability like a lot of people would be talking about the scalability but like matic right now like you combine all the layer ones like near solana combine all of them that like combine

number of transactions that they have there on mainnet we will have 10 times that on our you know layer 2 platform on ethereum and i recently tweeted about also that you know combined adoption of all these platforms we have much bigger at a simple like ethereum layer 2 project we are we have much adoption that much more adoption than that so uh you know like and we see like 7200 transactions per second is far far away from here like even with this all these huge number of applications we hardly see like four five ten transactions per second because you know the number of users is so less and so i mean we have a good path to go to reach to the current and you know occupy the current level of scalability that is available plus we

have the backup design choices that you know which it can take to the to the next level so and yeah like the probability like you know provenness of the system is is also very important because we want to have a production grade ready system uh you know instead of more of an experimental system which many of these systems i'm not saying that you know these systems will not evolve this can actually they can be very sturdy a system and then that's why i told you that you know our approach is we are not stuck on one particular approach that okay this is the approach as i told you that we want to offer multiple layers to approaches who knows in in one year from now we'll be offering an avalanche consensus on top of ethereum as layer 2 like nobody stop stopping us to do you know from

doing that and very interesting part but you know there are a lot of you know internal things that going on but maybe you know three months from now you know we can we can maybe revisit this particular thing man and you will see what i was i was referring to so i hope that makes sense yeah and it would certainly be cool to see different consensus mechanisms being supported on matic before we wrap up here where can people find you and how can people learn how to build scalable apps on matic uh so the best place to find us is on twitter and telegram at the redmatic network are our handles and my personal handle is my full name at

the rate sandeep as well and i'm like if you are developing anything uh on in the blockchain space and you know you want to scale your applications you know do reach out to us we you know are very supportive for the good dapps we help them on multiple fronts like scalability you know go to market you know your we refer you you guys to you know invest investors and whatnot so you know kind of the entire end-to-end incubation we do and we have a very you know if there are early stage developers we have a very interesting build and earn program on bitcoin where we kind of sort of give grants 50 000 worth of grant every month and if you are building something you can you know register your application there and if

the community votes for you you get to you know get a you know good part of that grant and you can you know kind of bootstrap your application great sandeep thanks for joining us today yeah thank you so much for having me here thank you for joining us on this week's episode we release new episodes every week you can find and subscribe to the show on itunes spotify youtube soundcloud or wherever you listen to podcasts and if you have a google home or alexa device you can tell it to listen to the latest episode of the episode podcast go to epicenter.tv subscribe for a full list of places where you can watch and listen and while you're there be sure to sign up for the newsletter so you get new episodes in your inbox as they're released

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