Epicenter - Learn about Crypto, Blockchain, Ethereum, Bitcoin and Distributed Technologies - Sandeep Nailwal: Matic – A Scalable Layer-2 Dapp Platform for Ethereum

Episode Date: December 8, 2020

Matic Network is a Layer-2 scaling solution that provides instant, low cost, and secure transactions on Ethereum. Built on an adapted implementation of Plasma and a decentralized network of Proof-of-Stake (PoS) validators, its goal is to solve the scalability and usability issues for developers building Dapps, whilst not compromising on decentralization and user experience.Sandeep Nailwal, COO & Co-founder of Matic, joins us to chat about how Matic works and the problems it's solving, and we also get a fascinating look into the crypto and startup community in India.Topics covered in this episode:Sandeep’s background and how he got involved in cryptoWhat the crypto scene looks like within Bangalore’s startup ecosystemHow have the Indian regulations on crypto affected Matic's businessWhat Matic is and the main problem it’s solvingA deep dive into Matic’s technical infrastructure and building on TendermintWhy choose Matic over other off-chain scaling solutions for EthereumMatic's leveraging of hackathons in their go-to-market strategySome of the trade offs one needs to make when using MaticHow Matic will fit into the Ethereum 2.0 ecosystem as it developsDagger, and other tools they are planning to buildLearning more about MaticEpisode links:Matic websiteWhat is Matic Network?Episode 352 with Jack O'Holleran of SKALE LabsEpisode 336 with Jinglan Wang & Karl Floersch of OptimismEpisode 340 with Daniel Wang of LoopringMatic on TwitterSandeep on TwitterSponsors:cPanel: cPanel's WordPress Toolkit is the all in one solution that makes hosting your website easier than it's ever been - https://epicenter.rocks/cpanelAlgorand: Learn more about Algorand and how it’s unique design makes it easy for developers to build sophisticated applications - https://algorand.com/epicenterThis episode is hosted by Sebastien Couture & Meher Roy. Show notes and listening options: epicenter.tv/369

This is Epicenter, Episode 369 with guest, Sandeep Nailwall. Hi, I'm Sebassin Kujillo, and you're listening to Epicenter, the podcast where you 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 your 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.orgs 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 Nailwall. He's the CEO of Madik. His company has recently

launched the Maddoch network, which is a scalable debt platform built as a layer two on Ethereum. Maddoch 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'Hollarin of Scale Labs, episode 336 with Jin Lang Wang and Carl Floresh of optimism, and episode 340 with Daniel Wang of loop ring. Maddoch 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, Maddoch tackles a specific use case. In this case, it's a lot of, 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 Madik

are interoperable with the main chain. One of the things that the Madic 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 ADAP 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 DAP 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 C-Penel have built the WordPress toolkit for C-Panel, 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.orgs slash C-Panel. And our friends over at Algarand are hosting after-hour series

where blockchain developers can meet their team and members of the community for informal conversations about Al-Garand. 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 Al-Garand.com slash epicenter. We're here with Sandeep Nailwall. He's the CEO and co-founder of Maddo. Maddick 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 nauseam, it seems, of course, like we've had several scaling projects on the show that all have different approaches. And Maddoch has a very unique approach within this brother scaling solution ecosystem.

And so we're very pleased to have him on with us today to talk about Madik 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 and it's finally very nice to be here. Well, we're really glad to have you.

We've met before at DapCon, and I know that back then, I was really interested in Maddick and what the kind of unique scaling solution that you were working on. It seemed just 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 Maddoch 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. But you know at that point in time I think it had already surpassed the point where you could actually mine you know Bitcoin on your laptop.

So you know we kind of ditch the plan. but I never really got into the technology at that point in time. 2015 is the time where I, you know, started 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, you know, a lot of 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, you know, at times you don't know like which vendor 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. You know, B2B vendors not like freelancers but proper vendors. So I kind of, you know, started scope.

We were, which was my previous like, you know, one of my previous startups. So 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 a 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 be very like it will be always a very slow grind towards the larger scale like a billion dollar scale or whatever. So then I realized that, you know, then I, then I realize 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, 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, 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 in the expropriety 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 this cool. Like, let me study about Bitcoin and blockchains and all that. And I started with mastering Bitcoin from Andrea Zanopoulos, you know. And then, you know, like fourth or fifth chapter into the, into the book. I was, 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 you know I'm a blockchain programmer itself so I you know got into the blockchain programming at that point and you know kind of initially

did some you know kind of consulting assignments or development assignments for a 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, 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, you know, there were only few people which were technical enough and I 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 plasma and he became a part of the plasma research group where you know Vitalik and Carl and all these people were there and there 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 around that time only, he was also developing some of the tools like Dagger. You were just mentioning like it was a simple Ethereum tool for listening to the events. So we got into talking and all that and I realized that this is really big and this can actually. And that was the around, that was the time where the Crypto Kitty's moment 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, 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, 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 plasma and all the technical aspects of the of Madik a little bit later on. First, I'd like to talk a little bit about about the crypto scene specifically in Bangalore. So the Maddo office, at least before COVID, was in Bangalore. And Bangalore is known, you know, worldwide, but also like in Southeast Asia for its 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 kind of centers in India where you see activity? Yeah. So 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, like, you know, it was Mumbai. You know, it started there. And then, you know, of course, Delhi was also like big in 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, you know, got

excited into the space. So this, this I'm talking about like end of 2017. Very few developers from India were actually in the blockchain space. And, 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, 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 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, blockchings that well also. Like whoever are there, they are like kind of still, you know, on the surface. So when I'm saying, you know, entrepreneurial 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 have started seeing, have started coming out from these elite kind of colleges of India. 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 don't 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 space so you know when we started in 2017 and like we realized that this is a big problem 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, raise

our funds and all that, then we realize 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 for, like, you know, spread of Ethereum in India. This year, we would be like, all of these are virtual now. 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, ETH online and all that. And these hackathons happen in, like, all the technology schools of India. So slowly now the developer community is waking up and that's what we've been trying to do. Like, you know, go to the grassroots level. If on the technology school level, the developers are interface 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 kind of keep getting a lot of interest from the developers who are like as like college students, fourth year students, whatever, you know, to us for the recruitment. and all. And yeah, like Blackchow, you know, this Bangalore's blockchain scene

is now slowly, slowly spreading. Like, especially the tech blockchain space, 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

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That's C-P-A-N-E-L. We'd like to thank C-Panel for their support of the podcast. It's interesting you talk about the engineering schools and the types of funding that alumni would receive upon leaving those engineering schools and starting their own businesses. And I think like India is a country that has gone through. through such a huge demographic shift in the last 10, 15 years. And in many ways, it's kind of now very rapidly catching up to Europe and America in terms of, you know, very mature infrastructure and sort of like online services that, of course,

like an entrepreneur is going to go build, you know, the next deliveroo for India or is going to go build the next, 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 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, 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, you know, pretty, pretty, pretty earlier because, you know, I'm like fairly active in the business space and, 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 which has like a token issuer company and a, you know, kind of a Singaporean company. And, you know, any funds that, Indian firm actually acts as a vendor 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 us that much in that sense. but yeah 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 the projects or the early kind of start up requests or the the kind of early state start-ups 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 you know have have gone to, you know, list on the exchanges, have launched their DFI 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 of the 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 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, this is that.

I am more focused on the technology, not the cryptocurrency side of things and all that. So that's the extent. even my mom who doesn't understand this one like every time you know a 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 her mothers yeah and and i might add also i mean not my indian in-laws but my my soon-to-be Indian in-laws i've also had that conversation with So that's the story with entrepreneurs, Indian entrepreneurs. And definitely when you have that kind of branding, so 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'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 government, like, current Indian government is, especially on the, you know, economic reforms is fairly progressive. 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, on terms of. of the digital payments and all that. But you have to understand the background that India is coming from that, you know, in the past like 50 years, even like not even 50 years. Like if you go back 10, 15 years, you know, you would hear that whatever Indian GDP, right, you know, you see at least 50% or like 30, 40% of that will be unaccounted for it. Like 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, you know, all your filings to be online and things like that. So they have been trying to push that and, you know, your social security number tied with your all that stuff. 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, it's hardly been 10 years and we are still struggling to, you know, get to the optimum levels.

Suddenly you introduce crypto and boom, everything goes out of the window. Like, you know, whatever you did, whatever you build in terms of your 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've 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, you're, you. have to get affiliated with the Federal Bank of India, which is the RBI. And RBI, what they said is that they issued a circular to all the banks affiliated to it, 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 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. 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, like, you know, the exchanges, although it took a lot of time and then government actually did that smartly, they wanted to play that, 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, you know, kind of applied against that circular or, you know, kind of fine litigation in the the courts and courts kind of subverted the rule because, you know, the banks could not logically justify that why 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 heightened, 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 wazir ex 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 and a half years. Yeah, that's such a fascinating story, you know, like what's, what's going on, what's going on in India. We want to Matic like, yeah, in this Indian ecosystem, what is Matic and what is the main problem you're looking to solve?

So, you know, as I said that, you know, we, like, we, we got, like, you know, the Matic got born. when the crypto, you know, Kitties moment hit the Ethereum space, right? And that's when we started working on the scalability on layer two. 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 code gets executed as per the, you know, the, you know, the, you know, 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 interact, how our systems interact, how our organizations interact, 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 such a platform.

And that was the core, that is the core idea about Matic. And, you know, as I was like, like. Like going into more into technical details, what we do is that we support an EVM on the layer two, 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 a off, like, Matic is essentially an off chain, like, you know, execution platform than Ethereum, right? So you are instead of executing things, instead of executing smart contracts on Ethereum, you are executing. them on a 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 feability into Ethereum, like everything is, you know, is very feeable 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 decks transfers and all that, those would be fully plasma enabled on the side chain. But if you want to do some complex, 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,

Auger team is doing. Like recently they, you know, announced in public that they are integrating and all that. So, like, you have to write custom predicates. But otherwise, like, how Matick, 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 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 what differentiates 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 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 and 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 once I've explained it, to summarize on the, like what Matick is, it's a layer to basically layer two means like an off-chain execution platform. And on that execution platform, we, we offer a, 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 differentiates us is that, in future we are going to offer more security scenarios on the Matic network for you, 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 decentralized, 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, withdrawability and everything on, on Ethereum, you can use plasma or maybe the future approaches like optimistic roll-ups, ZK 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-euxel plasma layer. but think of Matick as like a, you know, multi-layer-to approach in a very vague sense aggregator also. 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 what, but you know. And that's what is currently contributing to the, you know, you were mentioning about detraction of the network. How these like, you know, applications like Polymarket 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 really fascinating. Our friends over at Algarand are starting an Office Hour series. So every week or two, Algarand will bring together their team, partners and community together for a live discussion and tend 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 resources. 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 and 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 experiments at all and just looking to take the first step into learning something new, Algaran could be the right solution for you. To learn more, visit Algarand.com slash epicenter for developer resources and information about their next office hours.

We'd like to thank Algarand for those support of the podcast. When you look at the ecosystem broadly, like the way I tend to think of it is, Ethereum is 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 Matick is one of these suburbs. and in general there have been two kinds of approaches. One is something, for example, what Solana 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 ZK 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 in the roll-up, they can always come back to Ethereum and like an Ethereum will secure their assets. and ensure that they don't get cheated 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 space is, they're trying to build it in a way that they can rely on the police of the

of the city. I mean, 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 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. some like, you know, like us with Matick, some, like consider these, you know, side chains or all of these as different, different states. Okay. So, you know, you have, you know, the core city as Ethereum main chain. You know, maybe Washington, D.C. is the Ethereum main chain, which kind of like, you know, is the center of the universe for it. And then, you know, from there, you have these different, different states. And, you know, some of them, you know, can be more like, you know, like, you know,

tied to the federal structure of Washington, D.C. Some of them might want to remain independent and all that. And they have their own pros and cons, right? They're 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 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 realized that instead of bad-mouthing Ethereum, like rather try to be. And this is like more of a, you know, like their, you know, strategy to kind of capture the adoption.

That, you know, try to be closer to the Ethereum space because all the developer, 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 electrogen-hot strategy from many of these different layer one, 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 would be good and, you know, would be good for the larger good of the overall like the planet, why not? Right? So, so 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 and some sort of. or some spaces. But at the end, they all are tied up to the Ethereum committee. 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'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 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 come back to kind of, you know, imperialistic times, right, where you have like a country that 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? There's all kinds of ways that you can bring out to this analogy. Maybe one curiosity I have is my impression is that, you know, as Matic, you want to have your own

independent security, your own POS layer, but you also want to enable DAPs to you know, borrow security from Ethereum and you've built, you're building toolsets for both. But my impression is that most of the DAFs that are actually successful in Matick are just using the native Matick 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 correct?

Yeah. So I know that's, that's not really the, the exact really. reason behind it, the reason is like, first is that, you know, even if you think about the individual security, like, first of all, the Mattox 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 Matick 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 side chain 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 of 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 like you know what you are saying is that most of the applications end up using POS the reason is that it's simple

it's easy to use because they don't have to get into because plasma, the bigger problem is plasma is the one week withdrawal times so if you are exiting something from Ethereum to Matick like Matick to Ethereum

like withdrawing back to you know Ethereum you have to wait for seven days and there are people are doing like building 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 that toll guy will give you a faster exit

The toll guy will give you a faster exit and 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 rollups and you know what not. Like even with optimistic rollups where you have fraud proofs, you will have at least

like 24 hours to 4 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 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 a other category of you know layer one exits like for example zK rollups 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 two

like us or anybody else, the long term goal is that at the end there should be more like the city policing or kind of the policing of Washington, D.C. or the federal structure where Ethereum is the kind of the federal capital. That is the most, you know, beneficial way of doing it or better way of doing it because then you can have high value 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 analogy like you have federal agencies who can protect you that means you can withdraw it back to the 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 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, you know, but although Salana and Neer are not branding it, but technically, you know, in some form they are trying to be that. For example, X-Dai for example, like 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 not the ideal approach. The ideal approach again would be like as we are researching on optimistic roelabs, the R 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. But at the end, we believe that everything will tie it down to Ethereum because that's where the value exists and 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

you know, with the federal structure. Like you 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 a Republican, then, you know, and the Republican 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 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, you know, more closely governed by federal structure, you do it. That should be your choice. But the country is ethereal, something like that, yeah. This is so fascinating. I love this, I love this conversation. I'd like to maybe just get a sense of where you position Madic. We talked about all these other layer two or bridge solutions like Solana, optimistic roll-ups. We mentioned POA network. Where do you position Maddo in within, you know, this space? And why would someone choose to build on Maddo or another solution? Is there a use case that? particularly well suited for Madik.

Like right now, the biggest kind of adoption we are getting is from the NFT and gaming side. The best thing is that because we support an EVM, so for any developer who's building, you know, 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 magic like but then if you have a system where like average transaction costs like if you are buying nfts which is which runs into like single digit dollars also those you know use cases are the biggest one so gaming NFT are like you know some micro lending use cases

defy some of them those are like you know using magic the biggest benefit is you know it's a production ready solution so that you know you have an EVM, if you're already building for Ethereum, you can very easily integrate your same code base and everything on, on MATIC and you know, have those bridges

like, you know, which comes built in into the network, simply use an SDK or whatever to build that. So 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 DFI use cases, a lot of like, you know, crowdfunded, crowdfunding, social network kind of use cases, all of these make, you know, much more sense. The high value DFI use cases, like, you know, borrowing lending and all that, right? Like, you know, they might be well, better suited on Ethereum itself. You know, as far as the gas fees, like the, something like liquidity mining doesn't strike back

again and we start seeing $300 gas fees as far as that. That doesn't happen. I think the defy, 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, doing a lot of hackathons. and spotting these teams that are building daps and then getting them to be on the Matic network. Is that the centerpiece of your business development approach? Yeah.

I mean, that's definitely a big part of the community building 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 business out of it. it takes them multiple 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,

Gitcoin and all that. So they 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. And yeah, I mean, individual reachouts 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, 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 DFI projects, other team will focus on, like, miscellaneous use cases and things like that. And, yeah, there we, they spot the good kind of developers. And then we kind of help them initially, like from our side.

Like, even if they're not building onmatic, 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, outcompete Ethereum because, you know, like it's kind of 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, like their first blockchain is always Ethereum. Right. Because it's what is most easy to explore. an 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 strategy, yes. Like anybody who's building on Ethereum, we talk to those teams and 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 want to come back to a little bit of the technical aspects of Maddick. And so we talked about the proof of stake system that you build alongside plasma. And

I was kind of surprised to to find out that Maddo leverages tendermint consensus. Can you talk about some of the technical choices that you made here, why you chose to build on tendermint and how it interacts with the other components in Maddoch?

Basically, if you see the technical architecture of Matick, there's a three-layer approach. So first, like the base layer is the Ethereum layer where the staking and all that happens and the checkpointing happens. Then the second layer is, basically this tenderment layer, why we chose tendermint?

Because, you know, at that point in time, even now, I think it's the best choice to build a, like, 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 get or kind of the bore, like we call it the bore node. It's actually a modified form of geth only. So again, why get? Because for EVM, it's kind of the best client that way. So, you know, so you can see, already see that, you know, three layer approach. You have Ethereum, then you have this tenderment layer.

And then on top of that, you have a get node integrated into it. So, you know, as a single validator, so design choices, if you ask me that why we chose to, you know, do this POSO 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, solve, we tried to solve the data, you know, availability problem by decentralizing it. Like now you have 10 different 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, you know, do this running away thing together, right? And then on top of it, you have the EVM layer. So what we needed to be able to do is if it's layer to and then it, you know,

it still kind of produces blocks every six, seven, eight seconds, ten seconds. 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 70200 TPS and you know 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 tenderment 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 every 30 minutes they kind of have a consensus between them and then send it to the Ethereum. Now, coming to the third layer, 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 depose 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 depose system where few people or out of these 100 validators, few people only have the capability. ability to produce the blocks. So what we did is that we had, and we know, one of our earlier goals and I should have mentioned like this one like more earlier that, you know, for the layer to 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, you know, centralization and, and, you know, censorship attacks also. because 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 separated from the execution layer, what happens is that this chain randomly selects a kind of a committee. Like all 100 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 of this also happens, 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 onto 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 subcommittee. You can now think of it as subcommittee which gets created out of these validators and it randomly keeps on fluctuate, 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 validator.

and, 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, yeah, that was the reason to kind of separate the validator layer from the execution layer so that we can keep the system centralized, you know, fairly decentralized. But then even then if you want to achieve the scalability,

you can't have 100 validators and, you know, running the chain at two second, three second block times, right? because the block propagation takes time. So what you do is that you select random committee. Every few we call it spans and sprints. Every few span, 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 validator set is validating the POS chain. And then there is a random set set of these validators that are executing. the smart contract logic, right? Who are 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 tenderment layer blocks,

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. use and put it on Ethereum and then only they get staking rewards. So what are the security tradeoffs of this approach?

What like what trust assumptions does one have to have in the system when operating in this configuration? Yeah. So the trust assumptions, like if you are using POS, then you are definitely trusting the POS layer. If you are using POS only, if you are using plasma, then because of this, like the main thing is, main assumption that you are you are taking here is that

that because the number of validators is like really high and 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 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 as more decentralized and, you know, tendermint consensus, BFT consens and all that, like, that solves a lot of, like, you know, livelihoodness 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 East 2 change the development plans for Matick in any way? And yeah, how does Matick fit into the broader ETH2 ecosystem as it develops? Yeah.

So there are multiple, you know, like multiple facet of this. Like first and the foremost facet is that, you know, the what is launching is more, is like the phase 0 of E2.0 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 usable chain like this is like the first phase of this that entire process right so it's fairly away and one has to see like you know Ethereum you must have seen that Vitalix like roll up centric or. layer two centric Ethereum roadmap also. So, you know, you have to keep in mind that Ethereum is now a very decentralized community. And, you know, there is no one roadmap for that. Like, you know, there is a layer two specific roadmap.

There is a, you know, ETH 2.0 sharding specific roadmap. Now, even within that, what I believe is like, you know, let's do simple calculations, for example. Right now, like, you know, Ethereum 1 has, let's say, 13 transatlantic. sections per second and you have like you're going to have 64 shards you know with e2.0 so and each shard will be like will closely resemble let's say eth each 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 to whatever right and intershard communication is even like further away like it's 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, even if E2.0 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, you know, you will start seeing Matic, you know, architecture also similar. Like, you know, the one side chain that I told you that the one part I miss that, you know, the validator layer, separation of validator and execution layer actually enables you to have multiple execution layers. So on the same validator layer, we can have tens and tens of chains running on top of it. And then it will start resembling more closer to 8.2.0 kind of system where you have multiple shards, multiple chains, which are, and Ethereum 1 is kind of the beacon chain over there.

So they are talking to Ethereum. So, but yeah, coming back to the E2.0 architecture. So intershard 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 will have 16. 64 shards and let's assume that even intershard 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 network's 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 100.2. times extension of 0.0. Simply D5 will be able to eat up all of that bandwidth. Like the right now the, like the demand and supply of this like, you know, 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 that too is like unsustainable demand, speculative demand because, you know, you have $10, $20 transaction paying people. because they are speculating. But if it goes to the wider, you know, public and, you know,

the real, like, traditional public starts coming into it. You already are looking at, like, thousand folds demand than what, like, you know, 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.

NFTEs and you know again a lot of like social networks where do they go because only the 8 2.0 the entire bandwidths can be very easily eaten up by defy we are not even like at the starting of the defy 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 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-opinated 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 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-opininated 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 two. So even when E2.0 comes in, nothing changes on our side. What we are doing, we keep doing that, keep adding more and more layer to approaches, and which suit multiple different businesses. Yeah, I think that makes a lot of sense.

And I think the way to look at this as a multi-block chain ecosystem is what makes the most sense to me. I mean, I've always been kind of confronted with this very idea that 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 evolved into this ecosystem of languages and stacks, right? So 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 technology is 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, much more present than others, like in web development, you might say that's node, for example. But there's like there at some point in the past, you know, PhP MySQL was 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 driving a lot of economic activity and, you know, beyond, that we have different stacks that serve specific 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 will probably disappear, right? Lots of the approaches

that we're using today might not exist in 10 years, but it'll be an ongoing evolution of systems that make up the ecosystem. Absolutely. That makes sense. As we're ending, arriving here to the end of our conversation, you did mention Dagger a little bit. And we were talking about this before the show that, you know, Maddo and the team have been contributing to, you know, quite a few different tools in the ecosystem. And I was surprised to find out that Wallet Connect was one of them. Talk about this, this philosophy or this kind of strategy of also building other tools than, you know, just the product that you're working on.

What is your contribution to, say, other tools in the ecosystem? So, I mean, I think that the biggest, in terms of the tooling, 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, like, like, wallet connect. So our team was actively involved in, you know, building the first ever like production ready version of this one. Like, you know, JD himself was like he himself relieved that part. So, you know, in terms of like we also contribute to the like tendermint, you know, like we built something called side channels in tournament, which we believe is the right approach for, you know, like IBC also inter blockchain communication protocol also. So, 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, you know, we have been more on the, you know, kind of consuming end, you know, where we are providing this production ready, you know, platforms. So we are getting a lot of like help from the open source community in terms of using, let's say, blocks, lock scout, which has been built by POA network, for example, using that as a block explorer. and you know like we used get as the you know this one so like 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 all the tools that we are currently using so you know like as I told that tendermint consensus we contributed something and 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 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, available on Matic also. So, you know, the Oracle's like chain link launched their main net on, on, on Matic. Like, you know, then all the other like top Oracle platforms are also launched. launching their like, you know, teller network yesterday announced. Similarly, all the, like the bigger name that you'll hear in the Oracle space they're launching. Similarly, something like Gnosis safe and all that.

So right now we are more on the receiving in terms of having all the tooling that is available on Ethereum, make it available on, on Matic. 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 be like the way to go from there itself. 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 amatic, you need to also have the tooling. You know, you mentioned like Noses safe or, you know, any other applications that people are used to using on Ethereum main chain. As the ecosystem grows and there are many, you know, cities, right, they also need to be.

need access to these kind of essential services, it seems difficult to scale where, you know, coming back to Godotis Safe, you know, they have to deploy also on Maddoch and also on like, you know, some other side chain or another blockchain. What, what's the solution here? Is interoperability the only, like, mature interoperability tools, the only way forward? Or are we going to 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 things like you know the the problem bigger problem is that you know is that

they 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 infura they have to do all of this stuff like pro bono to kind of fuel the early adoption but eventually I think that, you know, if 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,

you know, if there are enough paying customers, like anybody minds, 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, like, 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, you know, just for the sake of these, these applications. And but then, you know, nobody's paying us for that. And the moment we bring in a payment plan onto that, and although that's not our core this thing, but even if we bring it that, bring that, people will

start using some other free service. So, like, I think the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, the, 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 two space very well. It's more of like, 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, the design. choices that Matick made makes sense from a 2018 perspective. I'm somewhat curious and skeptical that they make sense from a 2020 perspective. So here's what I, I'll qualify that statement more.

So when you look at like 2020 and 2021, for any like L2N blockchain network, ultimately like you need consensus, you need like a way to like execute these smart contracts. And of and certain like very, large key inventions are coming along the way and I think like the two

biggest ones are you know avalanche consensus which is actually better than tendament consensus on most dimensions so avalanche consensus is most faster it can support a lot more validators than tendament 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 EVM like every transaction comes, it needs to be processed, state needs to be updated, then the next transaction process, state 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 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 tender mint and EVM and in the long run this will end up having a suboptimal

choice do you have a worry like that yeah so I'll answer them you know one by one for example so so for example this one like the tender mint and using let's say that the EVM like system. Like one thing, one important word 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, so for example, tendermint, they, they, they might, like, tenderment 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. I think one or two months back they have launched their main net. That is also a restricted. I don't think it's a full-blown, full functionality main net. If we would, if we would have waited for something like that, you know, we would, we would again, we'll become like those ghost research paper projects which talk a lot of, you know, 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 kind of. you know, actively have actively taken.

We want to have a production ready network where you can have next level of scalability on top of Ethereum. So if we are able to do like from 13 transactions per second, we are able to do 70,200 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 pace. Now, so that is also one more, you know, one more important part over there that, you know, like in terms of from our perspective, we see this platform like this network. Like we don't, we don't expect this to go from today where like if you combine all the depths in the Ethereum ecosystem or the overall ecosystem. you will hardly have 10,000 DAU, like 10,000 to 100,000 DAU. If you include 100,000, if you include all the like token transfers, like these like Bitcoin transfers and all that, like in the whole space.

That's a very, very small DAU. And that sense, 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 DAPS, 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. With Solana, like, as you said, that, you know, like, there are multiple, like, it's a very interesting concept that you can have multiple parallel, you know, executions and all that. But then there are other like people have shown concerns also in terms of the centralization of such an system because of the state bloat.

If the state becomes bloated too big, right? You know, like if you are 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 GBM or. or 50 GBM, whatever, like, 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 3,300 transactions per second, 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 main net. We'll have 10 times that on our, you know, layer two 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 two project. We are we have much adoption that, much more adoption than that. So, you know, like, and we see like 7,200 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 uses is so less. And so, I mean, we have a good part to go 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 provability, like, you know, proveness of the system is also very important because we want to have a production grade ready system, 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 studier system. And then that's why I told you that, you know, our approaches, we are not stuck on one particular approach that, okay, this is the approach. As I told you that we want to offer multiple layer to approaches. who knows in one year from now we'll be offering an avalanche consensus on top of Ethereum as layer two. Nobody is 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 are going on. But maybe, you know, three months from now, you know, we can maybe revisit this particular thing, man. And you will see what I was referring to. So I hope that makes sense. Yeah.

And it would certainly be cool to see, you know, different consensus mechanisms being supported on Madik. Before we wrap up here, where can people find you and how can people learn how to build scalable apps on Madik? So the best place to find us is on Twitter and Telegram, at the rate, Matik network, are our handles. And my personal handle is my full name at the rate Sandeep and well. And I'm like, if you are developing anything 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 daps. We help them on multiple fronts like scalability, you know, go to market, you know, you're, we refer you guys to, you know, investors and whatnot. So, you know, kind of the entire end to 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 Gitcoin 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 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,

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