The Wolf Of All Streets - Can Crypto Actually Scale For Mass Adoption? | Sandeep Nailwal

Episode Date: July 17, 2022

Is Ethereum the cryptocurrency of the future? Sandeep Nailwal, Co-Founder of Polygon, says without a doubt that it is. Tune in to hear why he feels so strongly and why he continues to have a positive outlook for the future of crypto. In this episode we also cover the upcoming merge, the future of big businesses, and how Layer 3s, 4s, and 5s will play a role.   JOIN THE FREE WOLF DEN NEWSLETTER 📩 https://www.getrevue.co/profile/TheWolfDen EPISODE LINKS Sandeep Nailwal: https://twitter.com/sandeepnailwal Production & Marketing Team: https://penname.co/ FOLLOW SCOTT MELKER • Twitter: https://twitter.com/scottmelker • Facebook: https://www.facebook.com/wolfofallstreets • Web: https://www.thewolfofallstreets.io • Spotify: https://spoti.fi/30N5FDe • Apple Podcasts: https://apple.co/3FASB2c

Do we get to layer fours and layer fives? I mean, is that inevitably to get to enough scale? Who knows? Like, yeah, I mean, Internet, if you see, you know, somehow in some form, you can kind of try to derive an analogy to that. Like, you know, Internet has like these big transatlantic or transcontinental, like, you know, under the ocean, big optical fibers, right? But then each country then has their own broadband subnets and then you know the bigger cities will have multiple subnets

inside so that's kind of the fractal thing so you know it it seems natural that that might happen with blockchains also because at the end you you are doing computations and no one single ledger can you can do all the computations you will have to break it down into multiple ones Let's go. Layer ones, layer twos, layer threes, layer four, layer five, ZK rollups. These are all things that it may take to eventually take blockchains to full scale. But Sandeep Nailwal is solving these problems and Polygon is leading the charge, doing deals with companies like Instagram and Stripe. A few years ago, you would have never imagined names like that engaging in Web3. Listen to how we're going to reach billions and billions of people and mainstream adoption.

So every time I look up now, Polygon, Instagram, Stripe. It's unbelievable. How is this happening? Yeah, I mean, you know us that, you know, like our North Star has always been, how do we bring mass adoption for Web3? Like Elon Musk says that every decision he takes is,

how do we get to mass faster? It's the same thing for us. How do we get mass adoption into Web3 faster? So all of the things that we do, you see that adoption you know, adoption is a very deep focus for us. And, you know, initially people used to bash us for that.

You know, this is like a side chain, whether it's layer two, commit chain, all those kind of debates. Right, the definitions. Definitions and all that. But we were simply focused on how do we get, like, multiple, multiple dApps on it

where people are actually using them and today you see that you know like Alchemy said 19,000 plus D apps and you know like by I think daily active users we are even bigger than probably you know Ethereum main chain itself and sometime some days back I saw only BSC and but BSC because it's basically the Binance people, people moving a lot of money from Binance and all that. But by the active number of dApp users and dApp builders, like dApp builders, I think we would be probably the strongest chain or the biggest chain.

Definitely, we are Ethereum ecosystem. So all our adoption is, like today only I tweeted that, you know, somebody's asking me what is the biggest strength of Polygon. I was saying, it's only one word, that's Ethereum.

So, you know, Ethereum community is what is looking for scale and they, you know, find solutions, like they see solutions and then end up choosing, many of them end up

choosing Polygon. It's easy, it works. And, you know, it's been there and secure for quite some time. It's one thing to have tens of thousands of dApps. It's another thing to have Instagram. What are you doing with Instagram?

So, Instagram recently announced that they are integrating NFTs into it and they have already made Ethereum and Polygon chain live. But, you know, I mean, I can't discuss more. But, you know, whatever, like, you know, we have seen what they are doing. Their plans are pretty grand on the sense and, you know, in that sense.

And, you know, we were really, really impressed on how, you know, Facebook leadership is thinking about it and how deep they want to play the Web3 game. It's pretty impressive. And this is just the start so you know we're very excited that as they roll out more features for for creators and you know communities and everything I think it will be a big step forward for the whole industry yeah definitely playing a part in that makes a lot of sense. And when you see, when you go on Instagram and your friends send you screenshots and it says that this NFT is minted on Polygon Network, it's a great feeling.

How crazy is that for you? I mean, listen, you obviously always had a grand vision. I'm sure that you always anticipated that this could happen, but it has to be very different when it really does. I mean, it almost feels like you are in a matrix like you guys had some time and you guys had some tough times yeah of course like we had all we always had tough times it's only like you know maybe six eight months one year where it's like slightly easier but we always had tough times but we also kind of impose it on us like you know i'm always telling my team that guys we're just getting started like I and I genuinely feel like every morning when I wake up like that now the team that we have and the innovation that is coming we have

adoption we'll keep focusing on adoption but now we have innovation we have a ZK roll-up coming in I think we'll be the first to market with a full-blown ZK VM and you know that makes me feel that the real battle is just going to start now for us. And if we do it well, then maybe the real victories, you know, beyond this, like, who knows, like this beer market, whatever beer cycle is going to be.

But, you know, that kind of super cycle is just beyond these, you know, that kind of super cycle is just beyond this, beyond these, you know, gates of this. Right. You talk about massive mainstream adoption. I think we all have that dream of billion, 2 billion, 3 billion people interacting with Web3, but right now it feels like we,

everything's breaking before we even attempt to go to scale. It seems like every day there's an exploit or some sort of hack, or literally just a chain is completely down. Yeah. How do ZK roll-ups, you're going to be the first to market with that.

How does that change it? Yeah, I think ZK roll-ups, roll-ups overall inherently, I think, you know, they are, I think more adaptable. Like, for example, this, the whole optimism thing

that is going on, I think that, that you know it's like not very like some people are like oh why are they hard forking and all that but i think like for layer two it's okay to hard fork like you know for layer one of course it's a big problem but for layer two i think you know people should not uh you know criticize them too much if they end up going for a hard fork uh in that sense and you know try to protect those community tokens and things like that and pressure dump pressure from the community and whatnot so so i mean for layer two i am much more confident because layer two is more like business like

layer one is kind of this global settlement layer you are trying to bring trying to build and if something goes wrong, there is no recourse, something is lost, it's lost forever and all that. But on layer 2s, we are talking about layer 3s, these will be more business-like things. You can't, if you are building a startup, let's say you are building a Web2 app and on day zero, you have to write the absolute final code, which you can never change, it doesn't work like that, right? So you need those iterative design patterns

for your DApps also. And I think with many design patterns in terms of the programming on Solidity, like you have upgradable smart contracts, you have design patterns for that. Plus, maybe if you are using a dedicated chain for yourself, you would have initially at least you know at least some optionalities or some ways to you know kind of course correct if something goes wrong for you so yeah i mean i think for layer 2 and zk rollups and all that i

think it should be it should be more suitable for uh you know iterative uh development of products which is very important for building real startups, real applications, which can actually drive economic value. So, yeah. And will they be able to accommodate the next, I'm not going to say billion people, but the next 100 million, the next 200 million? As I said, our vision is mass adoption.

And what we see is that today, with all the blockchains combined, I think the net daily active users would be hardly 2-3 million. So the next goal is how do we reach from, you know, let's 2-3 million users or maybe like, let

me talk about Polygon. Like today we are like 500k daily active users. Like next goal is that how do we reach to 3-5 million daily active users across all the DApps on the Polygon ecosystem. Then from there, you know, and this is like this year's goal. how do we reach to 3 to 5 million daily active users across all the DApps on the Polygon ecosystem? Then from there, you know, and this is like this year's goal. Like, can we reach to this year, maybe mid next year? And then from there, like maybe 2024, 2025, can we reach to, you know, 10 million, 10 to 50 million users?

And then, you know, how do we reach 100 million users? That's how, and I think these things work exponentially. When it starts happening, then when we had first 100 applications on this thing, that seemed like a big victory. And then from there, how it became 300, 500, 1,000, 3,000, 7,000, we can't even imagine. We can't even fathom that part.

If you ask me how come there are like, I can't even imagine that there are like 19 or even 10,000 apps, D apps on Poly imagine. We can't even fathom that part. If you ask me how come there are like, I can't even imagine that there are like 19 or even 10,000 apps, D apps on Polygon. I can't imagine. But there are like, you know, we keep looking on the blockchain data. There are. Yeah.

So. Obviously, we know all about layer twos. You just casually threw out layer threes. We're already layer three. I think Starkware has been, you know, talking about layer threes. And I think Starquare has been talking about layer 3's and I think it's a simple concept like kind of that

fractal context like you know you have layer 2's when they become strong enough then you can have layer 3's which is a dedicated you know application specific thing so much smaller and much more specific maybe much more specific.

Much, maybe much more centralized, but you still have some level of, you know, community has some level of transparency on how the computation is being done. So, you know, imagine like if Facebook wanted to bring 1 billion users on blockchain, like no blockchain can handle that. So they would probably be in the longer run,

be running a layer three or like you know their own dedicated you know chain infrastructure whatever you want to call it and then still be able to prove everything back on a public chain like ethereum that okay everything has been computed correctly and that's the guarantees that you want of course it will not be censorship resistant and few other things but But, you know, users will choose those solutions with trade-offs, right? And eventually there will be more, like, even censorship resistant products like that. Do we get to layer fours and layer fives?

I mean, is that inevitably to get to enough scale? Who knows? Like, yeah, I mean, internet, if you see, you know, somehow in some form, you can kind of try to derive an analogy to that. Like, you know, internet has like these big transatlantic or transcontinental, like, you know, under the ocean, big optical fibers, right? But then each country then has their own broadband subnets.

And then, you know, the bigger cities will have multiple subnets inside. So that's kind of the practical thing. So, you know, it seems natural that that might happen with blockchains also, because at the end you are doing computations and no one single ledger can, you can do all the computations. You will have to break it down into multiple ones. Do you think that it all eventually comes back and settles on Ethereum? Yeah, yeah, yeah.

I definitely think so. Like I think as a settlement layer for this internet of value, I think Ethereum has by far won that thing. That's why we don't see any other layer one competing or doing anything. It's like all marketing stuff and all that, we don't think that that's going to happen.

Do you have any doubts about the merge, that there could be any sort of problem transitioning to proof of stake and going to Ethereum 2.0? As of now, it looks very positive because, you know, the Robson recently merged and I think one or two testnets more will merge. It looks like technically it's all good. But definitely when people start using those DApps

and all that, like then only we'll get to know that are there any hidden kind of, although it should not be EVM level issues, but who knows, like it's such a complex system. And, but I'm pretty confident that by the end of this year, we are going to the merge for sure. I mean, it feels like that could be either the most bullish or most bearish to the history of crypto yeah yeah i mean that it is scary because it's like a extremely complex uh software and which is running a decentralized setting and imagine like there is

something that we realize oh shit this is i mean this is this is uh wrong and we have to we have a downtime or downtime or yeah yeah roll back and whatnot but i think like you know the ethereum engineers are super smart i think these things would already be built in that in case we have to do it would be they would be able to do it in a matter of few hours roll out those update to everyone and then everyone can roll back and all those fail safe things theysafe things, they would have built. So I'm pretty confident, but still again, it's like such a big and complex software. But I think if they are able to do,

imagine like the positive side, if they are able to do, I think it would be one of the biggest feats of humanity, to be honest. I've had quite a few people say that. I don't think you understand how complex and important this is, but it's really absolutely massive. Okay, Instagram, Stripe. Do you think that we now see

all of the biggest companies in the world develop some sort of Web3 presence and have partnerships with, hopefully, all Polygon, obviously, in your eyes, but with Web3 companies and blockchain? Do you think everything, I'm not saying everything goes to a blockchain, but do you think that everyone will have

some sort of presence or fast? I agree with that. And I think, like, I'm not saying everything goes to a blockchain, but you think that everyone will have some sort of presence or fast. I agree with that. And I think like I was telling someone this morning also that if you go by first principles, like imagine you had same Facebook, same user interface, everything the same, but you have two apps, like with everything same, but one app is a centralized one. You don't own your data.

You are a big influencer. You don't own your, you know, followers and all that. On the other side, you have an app where you are the real owner, right? Which one you choose? Obviously the one we're on the other. Right. So if you go by first principles and you remove the noise, it's very clear that we are as humanity.

This is our next step of evolution in a way, right? Evolution of our intelligence and our collaboration, how we work, how we do business and all that. So I have no doubt that, you know, almost everyone is going to come to blockchain sooner or later. I'm glad you're building it, man. Thank you so much.

It's always a pleasure. It's great to finally sit with you in person after all those conversations through a screen. Same here, same here. I almost felt like, you know, we have met in person before also because we have been on so many calls. But that's the world now.

Now, yeah, that's what's been, what is so crazy is we can do all this stuff digitally. I think that's bullish for crypto. Thank you so much for listening to this episode. If you haven't already left a rating or a review on Apple Podcasts or Spotify, please do that now. Spotify just added ratings,

so please go ahead and click that five star. I'll see you guys next time.