The Wolf Of All Streets - The 3 Key Factors That Will Bring 1 Billion People To Crypto | Mo Shaikh, Aptos Labs

Episode Date: October 1, 2023

It has been almost a year since my first convo with Mo Shaikh, the founder of Aptos. Many things have changed and it’s great to hear how his project is thriving. Listen to learn about Aptos, and about how crypto will get its first bullion users!  Mo Shaikh: https://twitter.com/moshaikhs ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEK DAY! 👉https://thewolfden.substack.com/   ►► OKX Sign up for an OKX Trading Account then deposit & trade to unlock mystery box rewards of up to $10,000!  👉 https://www.okx.com/join/SCOTTMELKER ►►THE DAILY CLOSE BRAND NEW NEWSLETTER! INSTITUTIONAL GRADE INDICATORS AND DATA DELIVERED DIRECTLY TO YOUR INBOX, EVERY DAY AT THE DAILY CLOSE. TRADE LIKE THE BIG BOYS. 👉 https://www.thedailyclose.io/   ►►NORD VPN  GET EXCLUSIVE NORDVPN DEAL - 40% DISCOUNT! IT’S RISK-FREE WITH NORD’S 30-DAY MONEY-BACK GUARANTEE. PROTECT YOUR PRIVACY! 👉 https://nordvpn.com/WolfOfAllStreets   ►►COINROUTES TRADE SPOT & DERIVATIVES ACROSS CEFI AND DEFI USING YOUR OWN ACCOUNTS WITH THIS ADVANCED ALGORITHMIC PLATFORM. SAVE TONS OF MONEY ON TRADING FEES LIKE THE PROS! 👉 http://bit.ly/3ZXeYKd  Follow Scott Melker: Twitter: https://twitter.com/scottmelker   Web: https://www.thewolfofallstreets.io   Spotify: https://spoti.fi/30N5FDe   Apple podcast: https://apple.co/3FASB2c   #Aptos #Crypto #Blockchain The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. This video was created for entertainment. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this video constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.

Building in Web3 is very difficult. It's frustrating. Can you do a million transactions per second? A million. I mean, 10 years from now, I hope both of us are sitting here with our luscious head of hair. I was going to be like, bean-fed grapes.

Yeah, no, yeah. Well, I do listen to your show a lot. Yeah, yeah, yeah. That would be a great feature for us. We can DJ together. I love it. I love it. One of the biggest questions of the last crypto cycle

was whether we were going to have enough block space, enough speed, enough security to scale for mainstream adoption. In this cycle, we have seemingly countless layer ones and layer twos to help those layer ones scale. Now we just need the mainstream to come and adopt this technology. I spoke to one of my favorite people, Mo Shaikh, about how that's going to happen, what factors are going to lead to mainstream adoption moving forward into the future, and of course, how his project, Aptos, is preparing for mainstream adoption. It's funny because I think last time we talked, we were like,

really upset at how low the token price is. I know we're not talking about that. We were talking about token price. And then it was like the next day, it went like bananas. I was like, damn, am I like the Rainmaker? What's up? Hey, I think you take full credit for that.

So listen, it's funny. I was just having a conversation about this, but it's like a year ago, there was this fear that we were going to not have enough blockchain, no block space for anything. And now it feels like in the last six months, there's like a hundred new layer twos and layer ones. And now all of a sudden we're in the depths of the bear market. There's no liquidity and there's no volume. There's no anything. So now do we have too much?

Too much block space? Yeah. Man, it's a great question. So I mean, from a block space perspective, based on the existing Web3 activity, one might be able to draw that conclusion. But I think the more interesting thing to look at is where are we headed for the future, right? And so the future, what we're seeing signals from is Web2 companies entering the space, and they're entering in a massive way paypal just launched their stablecoin a few months ago microsoft chose to partner with aptos they're doing some ai stuff together and the numbers that these you know large companies need

in the world are millions of people with millions of transactions on a daily basis now if you look at l1 infrastructure today it doesn't quite support it the way we need it to. There are reliability issues, we saw protocols that are trying to upgrade, they turn off in the middle of the day to upgrade. Imagine cloud saying, hey guys, we're upgrading, we're going to be off for an hour, come back. That's not the world that a Web2 company is going to be willing to operate in. So I think although there may be block space, you have to look at the quality of the block space that's out there today. And Web 2.0 companies don't feel comfortable

that that quality is there. So we're obviously excited from Aptos' perspective, not only providing block space, but the highest quality block space possible. And so we're looking at not only next year, but the years after, and we think there's going to be much more demand out there. I'll give a little preview.

Today, we support 30,000 transactions per second with sub-second finality. A transaction costs a fraction of a penny. Our network's been live for 11 months and we've had no downtime. None. How many protocols can say that? Right. And so from a performance perspective, a cost perspective, and a reliability perspective, we're unmatched. That's awesome. We're happy about that, but we can't settle on the existing block space

that we have. We've had large Web 2.0 companies come to us and say, can you do a million transactions per second? A million, right? And so, you know, at first we kind of chuckle, we're like, what are you guys talking about? And then when you dig in as to why, you start to understand it does make a lot of of sense you have money that needs to move concurrently with a

digital asset like an nft that needs to move you might have metadata that needs to be on chain and so all of a sudden you have all these uh transactions that actually need to be supported on the we're thinking about transactions we're not talking about a million people that are paying sending or receiving money to one another you're talking about all of the actually back end. And exactly, exactly. And so there's two things that we're doing to get there. One, we're actually upgrading our fault tolerant consensus mechanism called hot stuff.

We also researched bull shark. However, we just recently released a white paper called show. Shoal is a consensus mechanism that takes the best of both of those worlds and allows you to have a faster round trip. And what that all essentially means is faster consensus, faster time to finality. That is already actually being implemented. This isn't theoretical in 2027. We've actually had the first implementation of it with something called Quorum Store.

So now we've been able to get to 30K transactions per second. By the end of this year, we might be at around 100 able to get to 30k transactions per second by the end of this year we might be at around a hundred to a hundred fifty thousand transactions per second it's a big difference big difference still far from a million that's still far from a million but how do we get there we're working on something called sharding obviously and we're looking at sharding in ways that no one has really researched it where you don't compromise safety and security and stake still powers those shards in a way that you can't compromise the challenges that I mentioned. And so together with consensus

and with sharding, by the end of 2024, we might be close to a million transactions per second. When you talk about the quality of block space, I get wires is high quality, you just broke it down, but what makes poor quality block space? I mean, that's a great question. I think poor quality block space is, you know, block space that may not be, that might suffer downtime. It may be very expensive when a lot of people are trying to use the network. And so if you're a large payment network, like, you know, one of the payment networks

out there in the world, imagine you're trying to push transactions through and now all of a sudden gas fees went up you went from charging two and a half percent to your merchants you're now having to add on another seven cents that's not gonna work for a payment network company right and so you know that's low quality block space you know you know l2s l1s going down for whatever reasons that you're not going to see large Web2 companies actually embrace that low quality block space. You guys haven't gone down in 11 months, like as you said, but has there been a stress test moment

where you really got to test what was possible? Have you had it pushed to where you were at your maximum transactions per second and saw what would happen? Yeah, I mean, you know, knock on some wood, but yes, we haven't gone down to date. But yeah, we test our network very rigorously. We have a private testnet that's actually stood up that we deploy any upgrade. We've done 47 AIPs to date, improvement protocol processes, and some of them have been submitted by the community. And we don't know what those, you know, whatment Protocol Processes. And some of them have been submitted by the community.

And we don't know what those upgrades might hold. So before we bring them directly into implementation, we put them through the testnet and actually see how they can get the bugs of the kinks sort of ironed out. So as those AIPs are being implemented, we're actually getting some kinks ironed out. And some of them we see like, okay, there's a little wrinkle here that we want to iron out. There's an issue with move potentially here

that we want to make sure is smoothed out. And so a lot of that testing is done on the backend and obviously makes its way where, you know, we don't take the main net down when we're doing any upgrades. And you know, some of the challenges and the issues that we might catch in a test net environment don't make their way over to mainnet.

It's interesting because in the first question, I asked, you know, do we have too much block space? Obviously. And you hinted at the fact that it's all of Web2 coming. The answer I usually get is like, well, institutions are coming and it's always financial. But that's not where you're clearly focused at all. And nobody's talking about the fact that all of these Web2 companies are likely coming into the space. I literally never hear anyone talk about it right now.

Yeah, I mean, I'm happy to share a couple, right? Like we announced our partnership with Microsoft about a month and a half ago. And Microsoft was interested in obviously taking AI to the next level. And we have an interesting value proposition as a blockchain that could solve some of their challenges. You know a high quality data could potentially be you know it might exist on a blockchain. That information can train these models in you know in a more efficient way perhaps and so when we started chatting with Microsoft they realized well if you can use natural language querying using the

Aptos blockchain you might be able to say, well, how much money moved around on the Aptos blockchain today? Verified result. If you have tokenized assets on the Aptos blockchain, you might be able to say how much money market funds, what was the money market fund volume today without having to rely on a centralized entity. And that we think is incredibly powerful because now you can start to do all sorts of interesting things, build a real time risk management portfolio with tokenized assets powered by AI. That's something that we're excited about

from a future perspective. It seems like AI took some of the shine off crypto for a while, right? Like you have all the VCs who are like, they're all crypto VCs. Pivoted to AI now. But are there more places do you think where the two worlds converge naturally other than what you're saying? A lot of the ideas I've heard sound very forced, like people are just trying to come up with stuff because they want to convince somebody that it matters. But I think there are some real areas where the two might work together. Yeah.

I mean, the first one is something we call the Aptos Assistant. So Microsoft and Aptos together, we're building this assistant so that you can use natural language querying to understand what's going on in a Web3 ecosystem and you have verified results essentially, right? And so that's, are you going to trust results from random scrapings of the World Wide Web or

something coming from a verified database? That's one. The second is a GitHub co-pilot. So right now, what we've learned and what we hear is building in Web 3 is very difficult, it's frustrating. So together with Microsoft and Aptos, we're building a GitHub co-pilot where if you wanted to write a Web 3 application and align a move smart contract, you don't even need to know move. So we think that's going to really lower

the barrier of entry and make it incredibly easy, not only for existing web3 developers, but web2 developers might even have an amazing and seamless development experience. And then the third thing that we're working on is building future applications. Finance is something that's really important to Microsoft, and something that I think we dream

about from an AI perspective as well. Imagine saying, hey, to your AI assistant, build out a real-time risk management portfolio. Something I think your audience might love. Maybe. And if that's the case, you need verified information. Now, Microsoft has amazing Web2 partners, exchanges, asset managers, other financial institutions. And today, together, we're going to be exploring building products with Microsoft for financial markets use cases specifically.

So that's something that we're working on together. Talking about all the verified information, does that somewhat replace oracles and the... That's a really good point. I mean, oracles have an amazing, have served an amazing purpose, but who do we rely on? Maybe Morgan Stanley, maybe Bloomberg. These oracles can now evolve to on-chain oracles. And so as more and more assets come on-chain, pricing information comes on-chain, all this information can be fed and create a much more real-time verified oracle that can feed into

AI models. Yeah. That could be cool and so we're put even you know and what might say like okay that's nice but you know that's all like web to world coming in it's again it's gonna take some time and that's that's true it will but two days ago we announced a partnership with sushi swap excuse me I'm choking over here all the air in Singapore getting to my throat. The SushiSwap, a darling of DeFi, creating open financial systems in the world, building the EVM ecosystem for such a long time, had a chance to look into some of the challenges that they're facing.

And they started to look at Aptos and Move. And what Aptos and Move can do for moving some of the you know the features that Sushi wants to build into the future and so we're you know very excited about the partnership that we now have with them where Sushi selected Aptos as their first non EVM chain to build on top of that's amazing yeah that's really amazing do you think that I don't know how to ask this question, but we have all these different sort of categories of what, you know, chains are being used for NFT, Metaverse,

gaming, blah, blah. Do you think that one chain should do all of those things or do you think that chains should be more like fit for purpose to a specific purpose and that the communities and developers on those chains should focus on that one thing. Can AppDOS become the chain for everything? I guess that's the question. Man, I always love the hard questions. If you look at protocols today, there's so many that do different things, whether it's payment networks like ACH and Swift or other protocols that might be sharing data, exchanging data, and they have to figure out how to work together. It's quite clunky and inefficient.

And so a lot of people have realized that and are trying to figure out what is a much more efficient unified protocol to help alleviate a lot of this overhead that's managed by gluing these protocols in the back end with some Band-Aaid and bubble gum. We think one protocol, two, three maybe, might solve this problem. We think network effects might accumulate to one of these protocols. How do you get there? You have to be able to provide high quality block space, as you mentioned, but I think you also need to be able to work with partners and meet them where they are. spend a lot of time with you know financial

institutions anyone like you know microsoft or even mastercard and helping them understand here's the bridge to web3 and a unified standard that might make sense to work on and so if you bring that level of collaboration and again make it as easy as possible to build with high quality block space We think one or two networks might take the lion's share of network effects And we certainly hope Aptos could be one of those networks. It's interesting because I think in the last cycle the narrative was interoperability Everybody was gonna win and we just had to make them all work together Also because like it seems every bridge and wormhole got hacked and so people just kind of gave up on making them work together. But I don't hear people talking about interoperability in the way that they used to. Yeah bridges are interesting. I think they

give you some features but they come at certainly at a cost. And so you know whether that's security, safety, latency, other complexities of management, the overhead of management. And so it will be an interesting environment for engineers, developers, companies to have to navigate. Do you want to manage another instance of a protocol integration? What do you get for that? So I think Web3 companies, Web2 companies are all going to ask themselves, what do I get by implementing this and what risks am I really taking on,

and is it worth it for me? And so, this is where we think it's so early in the Web3 world, and we don't have one application that has a billion users today. And so, we're coming to a point where we have seen some promise in some applications. Reliability has become a challenge for some of those applications to scale. So, we think Aptos offers something quite unique, where we might see a billion user application very soon,

and that can lead to a lot of these network effects, again, accumulating where you're projecting. What do you think that billion user application could be? I think a lot of people sit around, they go, we've had this stuff for, and it's nothing, but 10 years, 12 years years where's the killer app where is it like why don't we have it how did how did chat gpt appear one day which by the way it took decades people if we're being honest with ai but i appeared million users 10 million users whatever those numbers are where's the what's the killer app for us what's the thing you think has

the best chance to sort of take us over the hump? I'll give you three examples two of them might be a little boring so Boring is fine. You know what one of the most important things I think is that unified component and so a killer app might actually be credentialing identity yeah no one likes to talk about it but I mean if I had the same identity that I can take with me everywhere that would be amazing and it gives me access to my assets in some custodial manner, self-custodial, non-custodial, you know, a full custodial. I'd be happy with that, right?

And so that is, I think, something that we're all pretty excited about. We're seeing that in work that we're doing with someone like MasterCard. The second thing is actually money. We've seen stablecoins reach massive opportunities across global reach. And it's been the demand for the US dollar actually where we've seen that adoption. One would have thought it might have been things like Bitcoin or other protocols, but the demand for the US dollar has been a phenomenal growth lever for some of the largest stablecoin issuers that are very popular today.

So much so that you see someone like PayPal entering the space. Jose and his team have been working on it for such a long time. And it's been just an amazing ray of light for the Web3 world to see, here's one of the largest money movement networks take on and embrace and bring money movement to the world. And so that's a great use case for us. The third one, and I think an exciting one probably, is where money credentialing extends itself. And that is open finance. You know, DeFi has done a great job of showing us what it could be for someone like Mo and Scott who's in Singapore, get access to yields that would never be available because we had credentials, we had access to dollars or stablecoins, and now we can put them in these interesting pools.

We think that's going to evolve in the next permutation of DeFi. Someone like Sushi might be a driver for that. Other EVM-based DeFi protocols might be able to benefit immensely by opening up the world through new reach and infrastructure like Aptos. So we're excited about some of that stuff to come. But I think access to global economies through open protocols or DeFi protocols could

really be empowering to the next generation of wealth creation in the world. You're one of the few people other than myself who said the quiet part out loud about stablecoins, because I always say that stablecoins are the killer app. That's my answer. I just Bitcoiners hate that. Well, I do listen to your show a lot. I mean, the fact is that, like, as you said, you made the most important point. As much as we

want people all over the world to say my currency is hyper-inflating, I should go buy Bitcoin. No, they really want dollars. You go to a place like Argentina, they're in the black market, literally trying to find cash. And now crypto solves that everywhere.

It really does. And it's an excellent point. And I think it's important to just, you know, highlight that it's not Bitcoin or stable coins. I think, you know, we should all be very happy that Bitcoin serves a very important purpose and it's very special to us. Right. It protects us from all sorts of interesting dynamics happening in the world and different countries. And, you know, I think we're all very happy if that use case has not changed at all.

In fact, it's strengthened over the last decade. Stablecoins give us a different kind of exposure, whether it gives you access to DeFi pools or just serves as a hedge to hyperinflationary currency. But now it's for the first time it's made available in a more efficient way. You had to get dollars going to like a, you know, some, if you're living in an emerging market, you're risking your life to go to a kiosk to get USD. You're, you know, paying a lot of fees on top of that.

At a ridiculous premium. Yeah. And so, you know, I think stablecoins have helped solve that problem. And I think we should all be happy that Bitcoin and stablecoins live side by side and really open up the world for Web3 in new ways. And I'm excited about the future for both of these assets together. I think you've presented a lot of it. But if you had to look, I don't ask people about a year or three years or five years,

but if you had to look 10 years into the future, what's the grandest vision for Aptos, I get, but if it doesn't reach the grandest vision, what would you be happy with? Where would you say I'm successful? This is doing exactly what I wanted it to do. Yeah. I mean, 10 years from now, I hope both of us are sitting here with our luscious heads of hair. That would be a great feature for us.

But I think what I would love to see, I mean, we're here at Token 2049 in Singapore, and I mean, this floor is packed. Yeah, it's insane. It's unbelievable. I mean, you barely have standing room, right? And so it's amazing to see the number of companies grow year over year.

And I think Asia has benefited immensely. And so I think 10 years from now, I mean, it would be amazing to see the number of companies grow year over year and I think Asia has benefited immensely and so I think ten years from now I mean it would be well it would be amazing to see not only this part of the world innovate but be one of those breakthrough applications where the next billion users you know it call it your Facebook your Twitter or whatever it may be comes from this part of the world and is enabled and powered by web3 and everyone is dying to get to that booth that would be something I think that's really empowering the second parts of world and is enabled and powered by Web3 and everyone is dying to get to that booth. That would be something I think that's really empowering.

The second part to that I think would be every Web2 company is in here with their booths as well. That's right. And I think that we're already seeing that. I see Google, Microsoft, all these large companies kind of hovering around with their logos plastered everywhere and I would love to see them competing for booth space. I think that'd be cool. Yeah, and I would love for it when you visit their booth that they're not just here

talking about their Web3 wing or whatever. It's just how their business is run. Google's just here. I love that. And it's part of it, right? Or that they're not even crypto conventions anymore. They're just like technology shows or whatever, man. The hottest new tech crunch is a crypto event.

Yeah, I love the vision, man. Always a pleasure to talk. Appreciate you, man. Thank you so much. We're going to DJ together. I love it. I love it. I love the vision, man. Always a pleasure to talk. Appreciate you, man. Thank you so much. We're going to DJ together. I love it. I love it.

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