The Pomp Podcast - #966 Dmitry Shklovsky and Dan van der Merwe On Building Infrastructure In Crypto

Episode Date: May 17, 2022

Dmitry Shklovsky is the Co-Founder of Quicknode and Dan van der Merwe is the Co-Founder of Icy.Tools In this conversation, I talk to Dmitry and Dan about Quicknode's acquisition of Icy.Tools, the connectivity needed to various blockchains, how Icy.Tools' product helps give people more insight to the NFT market, and how both companies hope to build a stronger infrastructure in the Crypto space. ======================= LMAX Digital - the market-leading solution for institutional crypto trading & custodial services - offers clients a regulated, transparent and secure trading environment, together with the deepest pool of crypto liquidity. LMAX Digital is also a primary price discovery venue, streaming real-time market data to the industry’s leading analytics platforms. LMAX Digital - secure, liquid, trusted. Learn more at LMAXdigital.com/pomp ======================= The Pod Pro Cover by Eight Sleep is the most advanced solution on the market for thermoregulation. It pairs dynamic cooling and heating with biometric tracking. Go to https://www.eightsleep.com/Pomp to check out the Pod Pro Cover and save $150 at checkout. Eight Sleep currently ships within the USA, Canada, and the UK. ======================= The world's 2nd largest crypto exchange, OKEx, has dropped the "E" to become OKX, reflecting its evolution from a traditional crypto exchange to a comprehensive, cross-platform crypto services provider. With OKX's decentralized platform and Web3 wallet, MetaX, you have full custody over your crypto. Explore DeFi, NFTs and play-to-earning gaming with the world's most powerful crypto exchange. Visit OKX.com to learn more. =======================

What's up, everyone? This is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Now let's kick this thing off. Dimitri from Quicknode and Dan from Icy Tools joined me in this episode, and we had a great time. We talked all about building infrastructure in the crypto industry, the connectivity needed to various blockchains, Icy Tools product, helping people better understand what's going on in the NFT market and the recent acquisition from Quicknode of Icy Tools. I really enjoyed this conversation with Dimitri and Dan, and I hope you guys enjoy it as well. Before we get in this episode, though, I first want to talk about our sponsors. First up is LMAX Digital,

the number one institutional crypto exchange. They offer clients the deepest pool of crypto liquidity on the planet, underscored by 100% uptime track record through volatility spikes. They leverage LMAX Group's liquidity relationships and ultra low latency technology. LMAX Digital is the market-leading solution for institutional crypto trading and custodial services. If you've never heard of LMAX Digital, it's probably because you're not an institution. They have no retail, only institutions. They feature a central limit order book streaming spot Bitcoin, Ether, Litecoin, and Bitcoin Cash, all paired with US dollars, euro, and yen. LMAX Digital, they're secure, they're liquid, and they're trusted. Learn more at lmaxdigital.com slash pomp. Again,

elmaxdigital.com slash Pomp. This episode is brought to you by Eight Sleep. Eight Sleep is the single best product that I have purchased over the last three years. It completely changed my life. I'm not joking. Pay attention. The Pod Pro Cover, which goes over your mattress by Eight Sleep, is the most advanced solution on the market for thermoregulation. It pairs dynamic cooling and heating with biometric tracking. You can go to eightsleep.com slash Pomp to check out the pod pro cover and you save $150 at checkout. They currently ship within the United States, Canada, and the UK. And I told you it changed my life. It helps me sleep deeper, helps me sleep longer. I feel much more refreshed and I have better energy. You want to know how I have

relentless energy every single day? Because I sleep on an eight sleep. Seriously, go check it out. Eight sleep.com slash pump today. This episode is brought to you by OKEx. OKEx has dropped the E to become OKEx. Founded in 2017 with a mission to deliver a cutting-edge crypto trading experience, OKEx, the world's second-largest crypto exchange by trading volume, has since expanded its scope alongside the wider industry, adding features from all corners of crypto. If EX is about exchange, X is about intersections. Cross-chain, cross-functional, cross-platform, an interoperable future that's not siloed into isolated platforms and blockchains. The name change and the new look and feel represent OKEx's ongoing move towards decentralized finance.

With OKEx's decentralized platform and Web3 wallet, MetaX, you have full custody over your crypto. Connect MetaX in your browser or within the OKEx app to explore DeFi, NFTs, and play to earning gaming, the world's most powerful crypto exchange. Whether you're just learning about crypto, you're a seasoned DeFi degen, an NFT enthusiast, or a pro trader, you're all invited to a better future. Go check it out today and let me know what you think. Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression

of his personal opinion. This podcast is for informational purposes only. To get started, we've got Dimitri and Dan from Quicknode and Icy Tools. How are both of you guys doing? Doing fantastic, Anthony. How are you? I'm doing great. I'm super excited to talk to you guys. I want to start out first, maybe Dimitri, with you in terms of Quicknode, which I'm an investor in, so I'm cheating here because I do know the answer to my first question. You guys provide a lot of infrastructure and connectivity to various blockchains or different products in the space. Walk us through just like what are you seeing right now in the industry, given that prices are coming down? Does that mean developers are leaving?

Does that mean that activity on these products are going down? Or are you still seeing kind of persistent acceleration across the ecosystem? Persistent acceleration. And given that we went through these cycles before in 2017, 2018, this is when the build happens. This is when people stop focusing so much on the price and really get down and start building with all these great tools that have been developed over the past several months, several years. We've seen that transition from 17 and 18 and 19, and now you have much more user-friendly apps, richer apps with much more functionality uh it just it's a it creates a leap in maturity in the

space and we're we're seeing still record high numbers there's more users than ever uh there's more users than ever using our platform and especially in these volatile moments you have the the wallets and the dexes um and all the professional traders and the pro users they're using the services more than ever like this is their opportunity so um it's still really really exciting and continues to be exciting to be a part of this scene and to see it accelerate and to help build the future of the internet. So when you think about QuickNote itself, obviously there's a whole bunch of various kind of end users that you have. Who are the people who are kind of the power users, right? People who want that connectivity. And I always describe

QuickNote as kind of exactly what Amazon's AWS does for traditional computing. You guys provide a lot of that same connectivity infrastructure, uh, for, uh, kind of the Bitcoin crypto ecosystems, uh, walk me through like, who are the power users? Yeah, absolutely. So you have, you know, on one side of the spectrum, you have the developers, which are, you know, your one to three person teams, uh, you know, maybe they have some traction, uh, somewhere in the middle, you have the, uh, the funded, uh, the funder projects, which have maybe raised the seed round, maybe an A round. And then on the other spectrum,

you have your enterprise customers, which are sometimes these legacy businesses that are exploring Web3 and things like NFTs. And then in between, you have these pro users like professional traders, people who are running scripts, arbitrage scripts, and most recently, NFT professionals, like NFT purchasing, NFT sniping.

So we're seeing kind of what was happening with DeFi like a year, a year and a half ago was happening in the NFT space where it's actually quite lucrative to spot an NFT buy in the mempool and use QuickNode's advanced mempool service for that and then try to execute a trade on the NFT market. So when you start to look at this, walk us through maybe where are you seeing most of the activity? Are there one or two platforms that are getting kind of outsized activity in this market downturn? So, NFTs are definitely front and center. And that plays into our partnership with IC Tools is that there's just so much potential with NFTs. First, it was tokens and tokenization, and there are tools for that. But right now, you have companies like Adobe, like Twitter, like G2 Esports, like the biggest names in the space are looking to do stuff in the NFT world. Uh, so that's, that's where we're, we're seeing, uh, most traffic. Got it.

And then Dan, walk us through IC tools in terms of what you guys have actually built here. Yeah, sure. So with IC tools, we have basically two parts of the business. The first and foremost, we have our NFT data analytics platform. So essentially as, uh, Dimitri kind of alluded to a lot of traders, uh, we'll use our platform to kind of see what are the trending collections, where's the volume,

what are the accurate price floors of certain things. And so lots of NFT day traders, just NFT hodlers as well use our platform. And on the second kind of side of it, and this is where we're going to tie in really well with Quicknode is we've also been building on a developer API with our data, basically trying to surface our data

to help people build more in the NFT space, whether it's trading or any other app. That's where we are now. Got it. And one of the things that I find so fascinating, both about infrastructure and also kind of data tools, is that it's for the bulls and the bears, right? One of the things that I've always said to folks is like,

there's plenty of people in one community and they're like, oh, those other tools or that other infrastructure is not good or it isn't sustainable. And then they'll use those tools or those data providers to try to make that case. And they'll say, hey, I need to understand whether prices are up or if they're down, if I want to trade or I want to even go short, et cetera.

And so it feels like a lot of what you're doing is saying, hey, look, we have the technology to hook into these communities, pull in this data, help to kind of organize it, visualize it, and then allow people to do whatever they want with the data, regardless of kind of their market position, if you will. Yeah, exactly.

And, you know, we're seeing that a lot right now, Obviously, with market downturns, people react differently. NFT space with the trading is different from the building space. As Dimitri said, people are going to keep building right now. And our API tools and things like that are going to be super useful. In the trading space, we're seeing lots of different behaviors. There's still lots of volume being traded. It's definitely gone down.

But people are certainly using the tools to, you know, to figure out what to do. And obviously, when there's a bear, there's also plenty of new opportunities that people are finding. For sure. And Dan, what's like maybe one or two of the most surprising things that you've seen over the last, you know, call it four months or so? Is there like one or two data points that stick out in your mind of like, you know, most people think the narrative is A, but actually the data says B? It's a good question. I think in general, the NFT trading market is still trying to solidify. You see lots of ups and downs, like December was really good. January was really good. Then it dips back down.

The start of May was really good. And then it's just dipped back down. So I think it's starting, it's still maturing to find the actual proper patterns. I think one interesting thing is we've seen a lot of the NFT market perform really well when the general crypto market performs poorly. And that's like an interesting insight. It's gone a little bit, not so much in this current market. I think a lot of, in the beginning, actually, as things were happening last week, the NFT

market was actually holding quite well. But I think as people started to get pretty scared, the NFT market also took a hit. So that's an interesting one that's played through, not so much through the worst of this current market, though. Got it. And then, Demetri, talk to me a little bit about, in terms of buying and partnering with IC Tools as part of this acquisition, how exactly do these two products fit together, and how do you see this improving the user experience for your customers? Yeah, awesome. So, we did a Twitter Spaces last week where we talked with Dan and Blake and Jose.

And so, the story started out where IC Tools was a customer of QuickNode, and we did a case study on them. And we kept in touch closely as we do with all of our customers because we have a build with us mentality. You know, we're always looking at, you know, what are the use cases? How are you using our platform and what can we build for you? And so we started this conversation and we realized our roadmaps were very, very similar. And so, you know, we some of our team members knew each other from before, like years before. And so we started exploring this world where, you know, IC and Quikno joined forces into building a, you know, the most powerful NFT API and developer tools platform in the world. And so this is where it's going right now, where we basically get nine Web3 super sharp, hyper-focused developers and marketers and the IC team who can help build these next generation tools, bringing their NFT experience, bringing their expertise in the NFT space.

and also being like super, super talented developers and just helping accelerate NFT tool building. And our stories are quite similar where we first build our products to solve a problem for ourselves that we made a customer facing so that other people were loving the product, started building.

And then kind of now it's just like iterating on top of one thing and another. But it's just about combining forces and building the best possible products to help grow the Web3 ecosystem and the blockchain ecosystem. Got it. And so when you see this, how much of kind of the quick node product roadmap, if you will, is to continue to either build or partner with various products to build kind of an all-in-one solution for many of these developers where it's infrastructure and data all in one place? Or is this just kind of more of a one-off thing in the NFT space,

but it's not necessarily a strategy that you're pursuing other parts of the industry. Oh, we definitely, we definitely see it going more, more in this direction. Whereas, you know, once you have super, super powerful base layer, which is this infrastructure and you can, you can extract the data and then you can manipulate that data like with GraphQL and write your own queries. There's an unlimited, unlimited possibilities there. Like what, what if, what if you can build like build your own wallet and have provide API tools on

on top of that, or build any variety of tools which are being built on top of QuickNode today, but often make that customer-facing with really, really powerful tools and APIs so they can build even better versions. Because we know we can't build absolutely everything, but if we offer the tools and put it out there, there are some very, very talented people

that will be able to build something really, really great. Got it. And then, Dan, when you start to think of kind of the product that you all have built, What are some of the features that you're thinking about that can really kind of help your customers or help build out kind of the ability for them to be informed about the market or various kind of nuances or turns in the market? Yeah, I think there's a lot of places that we want to go. One interesting one that Dimitri actually pointed out that the partnership with QuickNet can help with is like Mempool. Like they already do a lot of stuff with Mempool.

IC doesn't do anything with Mempool right now. once we integrate that that'll provide some excellent insight for our users in addition to that um we're trying to go like a lot deeper into portfolio stuff like looking into insights into what you have your portfolio over time um also alerting uh trying to get you know that ties into the mempool as well let people know exactly when things are happening down to the second and also our partnership with quick note helps with that as well in terms of having the absolute fastest nodes to get this information as quick as possible. Yeah. And really just trying to double down, also maybe get into some ML machine learning kind of stuff to really pick apart the

data even more. Talk to that a little bit more in terms of how would you use machine learning and maybe walk people through in the audience in terms of how machine learning can be either predictive or you can uncover maybe some of the insights that just the human eye would miss. And I see smirking, so that must mean that that's a good thing that you're working on. Yeah. Well, the smirk is why I'm not a machine learning expert. But yeah, I think we're trying to find basically, we have all this data that we've collected and it's like large amounts of data. And essentially we want to draw, pick data points and figure out conclusions based on those of like, you know, for example, is X collection going to pop off based on what it's doing?

And kind of that's what ML allows you to do is essentially find these correlations and connections in the data that the human eye ordinarily couldn't and basically help people have an edge with that over anyone else who's just looking at charts. Got it. And then Dimitri, how do you think about using some of that technology? Is it something where you can actually kind of port it over between the products or is it more of a uh kind of vertically contained uh use of machine learning um not an ml expert myself uh and any way that we can help developers and businesses make sense of data and make

actionable data available uh quickly that is that is uh kind of our our mission there um is is to provide provide the tools um and the base layer foundation uh to allow anyone really uh whether like i said uh bedroom developer or uh fortune 1000 business to build high quality web 3 applications got it and what i want to do is i also want to throw out a couple of topics and either one of you guys can take it and kind of walk us through how you're thinking about it so the first is uh infrastructure obviously we've seen the liquid prices of various assets across the industry drawdown significantly as we get kind of macro, you know, challenges. We also see risk assets, stocks, et cetera, all going down. What are you seeing when it comes to equity-based

companies in the private market and then also infrastructure-type companies? Are you feeling any of kind of that market change or is it still pretty strong and not as much of an impact? Yeah, I can take this one. You know, with Quicknode being more of a technology business, not so much like a crypto. So we're not strongly tied to the price action. As I mentioned earlier, the price action actually causes more activity on our network and being as our business model is request based. So we charge a subscription and we also count usage. So more people are using our platform during these volatile times than ever. And a lot of times these lower prices incentivizes people to get into the market so when they see these lower prices uh it actually creates a really

good buying opportunity for for those who may be uh who are priced out earlier and allows them to get into the market get um uh start playing around with with web3 technologies uh or perhaps uh you know what pattern we've been seeing is making the jump from quote-unquote like a web2 company into a Web3 company and apply all their knowledge and experience to build something new that hasn't been done before and hasn't really been possible before because blockchain technology has never progressed this far. Got it. And then when you guys think of the NFT market, where are we? Are we in like inning one? Are we OK? Now we've got some some ways that this stuff works and like there's a playbook that people can go and implement. Are we at the finish line? Like,

how do you think about kind of where we are in the development of a vertical within this larger industry? Yeah, I can, I can take that one. I think I would say, yeah, inning one, inning two, like super early days. I think currently the biggest use case we see is the, the JPEG art market, right? That's where most of the volumes around, that's where most of the talk is around. But everyone in the industry knows that NFTs are a lot more useful in other

areas, like, you know, as ticketing systems for deeds, titles um all these kinds of things like authentication and i think you know what we're trying to do with ic and quick note as well uh together is build the infrastructure that allows these second third fourth fifth um innings to to come faster um and i think that's what's super exciting and you know as dimitri said i think we're going to see a lot of people building um especially people transitioning from web 2 to web 3 and we want to be there for them and allow these future use cases that everyone pretty much agrees are going to happen to happen a little bit faster. Got it. And then when you guys think about talent

in the industry, where are you seeing people join your companies? Are they coming from other crypto companies? Are they brand new graduates? Are they coming from Wall Street and finance? Are they coming from the large tech companies? Where is the talent coming from? Absolutely across the board. I mean, we've had engineers from AWS, from the top cloud companies. We even have a Golang engineer from Lockheed Martin. It's incredible how many people got inspired and want to be a part of this journey. You know, it's something, you know, it's one of those opportunities that comes around every decade or two, where you can build something brand brand new and something that has a massive upside and momentum

and so it's it's not any one particular spot it's really all all across uh all industries that are that are making the jump into web3 got it and then i guess uh i'll ask each of you what is your you know view or or vision for the next three to five years in the industry like what does this look like let's say five years from now so we've we've seen the cycle like if you look back at 2017, 2018, there was this massive call a bubble, but you know, things were, there were a token drops happening every single day and some of them weren't exactly legit. But it does take, you know, this maturity let's call it a

correction, but we do see maturity in the market. We're going to see applications become more with better user experiences, with more mainstream adoption, you know, as you have bigger players coming in and the mainstream companies of applying their methods and leveraging their resources and experience into building super, super high quality applications. And, and, you know, with, with the tools provided by companies like QuickNote and IC, you are really able to build stuff today that you weren't able to build three

or four years ago. So it's just this progression and it's, and it's a flywheel that, that you know, we're enabling um and and other people other tools and and other companies in space are enabling to really just drive the the entire industry forward and then dan what about you yeah i i pretty much agree with that i think every time that we have a market correction we're left with more than we had the previous time right and so you know the last two years or so we've had all these new things get built we've had d5 summary we've had the summer of nfts and a lot of great products have come out of that you know through all these corrections

some are going to fail but the ones that are strongly going to remain and i think as we get you know closer to three four five years from now sure there might be more corrections but i think every single time we're going to have more good stuff and more technology infrastructure that's being built that allows i think those corrections to get smaller and smaller as the industry matures where can we send people to find you guys on the internet if they want to find out more about quick node or ic tools where should we send them sure uh quicknode.com or twitter.com slash quick node um we have an excellent guide section so if you're just looking to get into uh web 3 or you just want to learn more it's quicknode.com slash guides uh which is an excellent resource uh for

for anyone looking to get into Web3. Dan? Yeah, likewise, ic.tools. And our Twitter is ic underscore tools. You can find us in both places or you can also hop in our Discord, which the link is on our website. Awesome.

I appreciate... Discord. I appreciate both of you guys coming on. And as you guys continue to build out various products for developers, both on the data side and the infrastructure side, I think that you will have a front row seat

to seeing, you know, what's working, what's not working and where value is accruing. So I appreciate you guys coming on and we'll definitely have to do it again in the future. Yeah. Always a pleasure. All right. Talk soon, guys. Thanks so much for listening to today's episode. I really hope you guys enjoyed this one. Make sure you're subscribed on Apple, Spotify, or your favorite podcast player. And if you're looking to try to transition to get a new job in the Bitcoin or crypto industry, we've got you covered. Head over to palmscryptocourse.com. We've developed a curriculum with the top teams across the industry. It's a three-week intensive training program with over 50 events packed into that three-week time period. Go to palmscryptocourse.com to learn more

and I'll meet you guys for the next episode.