Episode Transcript
[00:00:00] Speaker A: Hey Impact podcast listeners. I'm Jessica Galang, Georgian's content editor and your occasional host on the Impact podcast. Recently we launched a new podcast specifically focused on web three called Bridging Web three. The goal is to highlight the building blocks that will make web three more usable and how to scale web three tech. Each podcast dives deep into a specific web three technology to give you insight into how it works and examples of how it can impact businesses and people. In our interoperability podcast, you'll learn about how getting blockchains to communicate with each other will make it easier to build web three apps, how decentralized autonomous organizations are trying to give everyone a say in their work, and why making blockchain data easier to access and understand is a key part of Web three's future. We're sharing our first few episodes with you, our impact podcast listeners, because we wanted to make sure you're not missing out on this new series. If you like the show and want more, be sure to subscribe to the new podcast bridging web three. You can find us on Apple, Spotify and wherever you listen to your podcast, as well as our website Georgian IO. Since this is a brand new series, I want to share some thoughts in our first episode about why we're launching and why you should listen. I've been stewing on launching a web three podcast series, probably for the last six months, and if you're an avid listener, you've noticed we've recorded a few web three podcasts under the Georgian Impact podcast banner. As I've been working on and researching more about the space through the podcast. What's clear is that one, web three can be very intimidating to learn about, especially if you're not technical. And two, there are some really cool projects and perspectives coming out of web three that kind of force us to rethink how we built the Internet and how we interact with each other online. I want to create a standalone web three series with the goal of making what's happening in web three more accessible to anyone. Each podcast dives deep into a building block that can scale web three or concept that's integral to web three's philosophy. So you'll learn about things like interoperability between blockchains, which is important for building apps across blockchains faster and easier. Why? Self sovereign identity gives people more control over their data and the role of dows in coordinating decentralized communities, and so much more. Every podcast is tied together by the fact that making web three's infrastructure scalable and easier to use is key to its future and addressing the elephant in the room. Why launch the series at a time when there's a lot of negative press around crypto? The perspective I'm taking in this podcast is one that's really focused on the technology itself and the stories of the people who are building it. Whatever your stance on web three, almost everyone I've talked to is driven by ideals of equity and fairness in this space. Compared to what we've gotten in the status quo, where just a few major tech companies own people's data and the terms of participation, those ideals are something that a lot of people, whether you're working in web three or not, can get behind. This is a space in its infancy some smart people looking at as a long term game worth the investment. For those of us interested in emerging tech, it's a space worth exploring. There's a lot of work to be done to get most people interested in web three, and you'll hear from some of the people who are committed to doing it. So I hope you'll join us on this journey and I hope you enjoy. If you have any thoughts or you want to appear in a future podcast, send me a note. I'm at Jessica at Georgian IO or you can hit me up on Twitter. The material and information presented in this podcast is for discussion and general informational purposes only and is not intended to be, and should not be construed as legal, business tax, investment advice or other professional advice. The material information does not constitute a recommendation, offer, solicitation or invitation for the sale of any securities, financial instruments, investments or other services, including any securities of any investment fund or other entity managed or advised directly or indirectly by Georgian or any of its affiliates. The views and opinions expressed by any guest are their own views and does not reflect the opinions of Georgian. Now here's our first episode on interoperability.
Hi everyone, and welcome to Bridging Web three. I'm your host and Georgian's content editor, Jessica Gleng. In this series, we focus each conversation on just one technology or concept that's part of the infrastructure for building web three. Our goal is to understand the building blocks, to make web three more usable, and to understand the real world opportunities in the long term. Today we're focused on interoperability between blockchains. It's the ability for different blockchains to exchange data and communicate with each other. To break that down for us, we've got John Cole, cofounder at Hyperlane. Hyperlane allows developers to connect their apps across blockchains and they're dedicated to building what they call the interchange singularity. John is going to break down how they do that, the hyperlane story, and why interoperability is key for the longevity of web three.
So welcome, John, also, was that accurate?
[00:04:21] Speaker B: That was very accurate. It was a great way to describe what we're doing. I'd say. We like to say at Hyperlane that we're building the modular interoperability platform. And today I'll tell you more about what we mean by modular in this context. And what we're trying to build is kind of like the safest, most accessible, and fastest path to navigate between these blockchains, which right now, as you know, they can't really communicate with each other very easily. It's almost as if they're in different parts of space. So we think about creating this thing that'll help them navigate between this vast space. And that's where we got the name Hyperlane. We're trying to create this thing that navigates between space. It's supposed to be an accessible and fast route. And so we decided to call it the interchain highway. And today we can talk all about that and what we're doing here.
[00:05:12] Speaker A: Yeah, I'm really excited to dive in because there's a lot of aspects, even in you explaining that, that I think we can pick apart. So first you want to talk about how hyperlane works and some of the building blocks that make up your solution. And then I'd like to dive into the fast and safe aspect of that, which I think is really interesting.
[00:05:28] Speaker B: The way hyperlane works is we wanted, again, to create this very accessible system. And so the best way to do that is to have people are familiar with this concept of APIs. Well, smart contracts really can act as these open and permissionless APIs. Once you have a very easy contract to interface with, it functions, for all intents and purposes, as an on chain API. Hyperlane is no different. So with Hyperlane, we have what we call the mailboxes. They do exactly what they sound like. They send information from one and they receive it on the other. And so there's an outbox and an inbox in future versions. We're about to ship an update right before Christmas that will turn this outbox and inbox into a singular contract. But for the purposes of this conversation, it's actually easier to talk about them as separate. And so we put these mailboxes on every chain that we want to support. And you as either end user or you as a developer, have your contracts interact with these mailboxes, again, in a way that makes it feel like an onchain API. You just call a dispatch function. And once you do that, that message gets sent into the outbox. And a message basically has kind of like a piece of mail or an email, it has a destination. So in this case, the specific chain or chains, because you can send the message to a number of them and it has the message body like, what are you communicating? So in our case, this is just a set of arbitrary bytes. They can contain the information about how to, like, I'm going to execute this function on that blockchain that we're sending this to. I want you to move these assets around. Maybe I want you to do both, both execute some functions and move some assets around. Or you could do something kind of know, I would say frivolous, but send a string of text around that could be like, hey, John, how are you doing? You probably don't want to pay the gas fees to do that, but you could, you could definitely use hyperlaint for that. And that's kind of the basics of the system. Obviously, we can go into much more depth. But once you've done that, we have these permissionless agents, let's call them, it's just a piece of software. We call it the relayer. Anyone can download the binary for it from the hyperlane GitHub and anyone can run the relayer. But what the relayer does, it looks at the mailbox and it says, okay, it looks like here are some messages that someone's sending. John is sending some messages from Ethereum to Polygon. Oh, and John was nice enough to include a little bit of a tip for me, a fee. I want to take these messages. I'm taking them, and now I am processing them on Polygon because that's where he wants them sent. And once that happens, the relayer takes that message, puts it on polygon, transfers it in an unmetalable way, and at that point, that's where some of the security aspects of the system kick in. Once again, there's security aspects at the outbox and there's additional security at the inbox. The security that happens at the outbox is kind of like a network wide thing. Everybody gets it. You don't have to do anything special for it. And in that case, we have these validators, which are chain specific. They look at the message and they see that everything's valid. If it does, they sign it. And then once it's been taken over to the inbox, those signatures are first verified against. Okay, so that's the first step. We're like, okay, we got these signatures. They look good. These are obviously digital signatures and different signature schemes can be utilized. In our case, we are always like augmenting the signature schemes that we use. But once you pass the signature, not done yet. This is where we introduce, and we could really go deeper into this one if you'd like. But we introduced this thing that we call sovereign consensus, which in our view, this is the main innovation that hyperlane brings to the table. It is that one of one feature that separates hyperlane from the field of players and interoperability. And what sovereign consensus lets you do is you as the app developer, as the thing that receives the message, you now get control over how you want to accept these messages, and it basically lets you kind of configure your security model. So imagine you want to withdraw some money from your bank. You want to take out $10 and they'll barely ask for your PIN number, and that's okay. But if you're trying to withdraw the full amount out of your account, they're really going to interrogate you. They're going to want a lot of information. They're going to hold you up there for maybe a couple of hours. And most people are okay with this form of context based security practices. We have a small transaction that's okay. You can just enter your pin and you're good. You want to do a really big thing. Oh, we're going to need some more information. For some reason, that type of kind of context based certification hasn't been introduced to crypto until sovereign consensus. And so we present to developers like a catalog of options they can choose from. We call these isms interchange security modules. This is where the modular and modular interoperabilities comes in. And these modules can look as simple as the app developer designating a specific signer. That signer can be themselves. It could be someone they trust. It could be just like other reputable entities. It could be a mix of both combining for one signature. And if that signature isn't included, it doesn't matter what all the other validators say, they just don't care.
These designated signatures are included or no dice, the thing will never get processed. So it could be as simple as that, or it could be something more complex. Like in crypto we have what we call optimistic models. And in the case of optimistic security, basically we put up a long window, what's known as a challenge period, and we say, hey, this message is not going to get processed for this many hours, let's say 12 hours, and this is the optimistic window. And during that, anyone can examine the transaction and see like what's going on here? Does this look kosher? And if it does, no one vetoes it. No one submits what's known as a fraud proof and it gets processed. And so very similar to that idea of trying to withdraw your whole account. A developer could say, what's the context of these messages?
Oh, you're moving around $100. Okay, no problem. Just go through the fast path. Oh, you're trying to move $25 million. Well, maybe something's afoot here. So messages that go above this threshold or messages that look like this type of thing, we force them through a different mechanism, and at that point the message goes through. And that's kind of like the lifecycle of a message through hyperlain. Or think of that as the basics of how hyperlain interoperability works.
[00:12:22] Speaker A: Okay, so there's a lot to unpack there. But first, I just wanted to clarify. When you say message, is that the information that allows devs to build applications between the blockchains, or do you literally mean the exchange of information like a message to you or something like that?
[00:12:35] Speaker B: So really what we mean is, yeah, it's just any information packet. So you could think of within a piece of software you might have different sort of modules or different parts, and those communicate between each other. So think of that communication as like a message.
[00:12:49] Speaker A: What do you think about the success of contextual security, where you sort of come in situations where it's appropriate and almost leave it to the discretion of the user versus just having a blanket solution. We're going to make this super, super secure type of approach. Why take that approach and why do you think that's effective?
[00:13:05] Speaker B: So the main reason we think that's effective is because generally speaking, we know that people like convenience wherever you can give it to them. But if you think of that speed and security dichotomy that we just talked about, really what it is, it's convenience and security that are kind of at ods, the most convenient thing you can do oftentimes is not the most secure. And again, we think the context matters. And there's going to be cases where, you know, what if I just need to pull out a certain amount, it's quite small. It's totally fine to sacrifice security for convenience and application developers should have the control over those decisions. When should I opt for Fort Knox level of security?
When should I opt for Malcop level of security? And when should I opt for even for somewhere in between or for something different? That's really the main reason why we think it'll be successful, is because that freedom of choice is useful, because actions can be so varied. Right? When we look at, let's take an app like Uniswap, a very, very successful automatic market making app, or think of it as like a form of decentralized exchange. In the world of crypto, the types of trades that it processes are super varied, from trades that are in the hundreds of dollars to multimillion dollar trades. And so that same app deals with such a varied context that we think that if given the choice, they would probably want to have context based security. If there was no trade off, everyone would want the most secure all the time. Give it to me always. But because we aren't there yet, that context is important. And as we get to a point that they converge five, six years from now, once that's viable, then we do think like, context won't matter anymore. Everyone will just want to go through the best, safest path.
[00:14:55] Speaker A: Okay, that's interesting. And I think later in the podcast I do want to talk a little bit about where you see that convergence happening. I want to take a step back and talk about Hyperlane as a team and your story. Can you give a little bit of background on how your team came together and how you saw this challenge?
[00:15:10] Speaker B: I've been in crypto for about five years now, funny enough, was a bond trader before at Morgan Stanley. It was a fun existence.
[00:15:19] Speaker A: That's not an uncommon story.
[00:15:21] Speaker B: I don't think I liked it well enough. I needed a place to support my family. My parents, namely don't come from a very wealthy family and all of us were working. At one point, my father got quite ill and couldn't work anymore, and I needed to really step up my support. And Wall street was a great place to do just that. And so found myself on the trading floor, and one day, spring of 2016, a good friend during a birthday party was like, john, I'm going to put all my money into ethereum. What do you think? And I was like, we're a couple of years out of graduation.
I know he's got substantial summercraft for someone in his early twenty? S, but this might not be a good idea. It might be a great idea, though. I don't know enough and one thing leads to another and we spend like a couple of days on it. I come back to the trading desk that Monday morning, totally crypto pilled, and I'm just like you guys have to read about this thing. We are all, like, ten years out from not having a job. And that was like the first day of the rest of my life, sort of. I spend the next year just going further and further, further into it, becoming totally obsessed. And by late 2017, actually through Morgan Stanley, was able to meet what became my first job in crypto, where I joined San Francisco based hedge fund as, like, their first hire to work on crypto and just grew from there. Spent about two years into it. Left that firm to join Galaxy, or I say Galaxy Digital, Mike Novogratz's firm, where I spent a few years leading the investment team alongside my partner there, an amazing guy called Michael Jordan, that's his real name. He's every bit as good as the more famous MJ. And from there, ended up meeting a group of people who now are my co founders here at Hyperlane. And how do we start working on this problem of interoperability I find about crypto over the course of the weekend at a birthday party. I'm one of the least technical people on our team, not an engineer by trade. And so once I was exposed to this idea of crypto and basically, like, these really cool Internet computers, they can do all these cool things and reading about them and thinking about how they could replace banks and build a new financial system. As a person who was screwed by banks many, many times over, I grew up in Israel, where the banks have personally screwed me many times. I was one of the Wells Fargo clients who was caught up in the LA account scandal and later on had more terrible run ins with banks. Found crypto so attractive for this prospect. Then you realize these computers can't talk to each other. This one, and that can't. They just can't. And thinking like these smart guys, they're going to figure this out. This is like a year out from being solved, and that was in 2016 and then in 2017. And so it feels like it's been a year away for five years. And so it's always been on my mind, and even during my time working with other companies as an investor, sometimes pitching in, like as an operator on the side, that problem of interoperability is always very, very top of mind. It was clear that it had to get solved. I've likened it many times before and still do to our team, as this is the crypto equivalent of going to the moon. From the size of the engineering problem, the early attempts, they are very dangerous. Right. It wasn't Apollo one that reached the moon.
It took 13 tries to get there. And so similarly, we don't have our Apollo 13 yet for this problem of interoperability.
And late last year, a good friend of mine had called and said, there's this thing coming together.
Me, Zakimanyan, who was a big, big part of Cosmos and IBC, and really probably one of the foremost thinkers on this topic of interoperability, and most experienced, we're all coming together to think about how to leverage this existing interoperability protocol. And one thing led to another. I was like, I don't know if I can do it, but started spending some time on it. And before you know it, me and this group are becoming the founders of what is now known as Hyperlain.
So right now, there's three of us co founders. Asaoinus, who previously was the first engineer at cello, Nam Chuhoy, he was also one of the first engineers at cello and myself. And we have built a team since then, a team that I'm very proud of, still a small team, just under ten. We definitely believe in keeping up a very, very high talent density. And so while we've grown the team, we're not trying to rapidly ascend just because we can.
It's been quite a journey this past year of going through this and crypto changing, and the interest in our category of interoperability really growing and starting to see demand really healthily pop up for it. So it's been an incredible ride.
[00:20:35] Speaker A: I find it really interesting that you describe interoperability and the challenges, like going to the moon, because I hadn't even thought about it that way. So maybe we can dial it back even further. I feel like we're almost working backwards in this podcast, but can you talk about interoperability and why it's such an essential part of Scaling web three and bringing more people on?
[00:20:54] Speaker B: So the main reason why I feel like it is so critical is because whenever you are, and again, for me, for several years in the industry, I've been through many iterations of what these applications look and feel like. One thing that hasn't changed, you're still using infrastructure so often. In fact, in crypto, it feels like you go through multiple phases of infrastructure interactions just to get to an application at the end of it. And when you kind of look at the landscape, no other, even semi mature technology looks this way. Like apps are surfaced to users. We use them, and everything else is in the back. Both of us are using some video conferencing thing, right? I don't know how it works. It just works. We didn't have to figure that part out. There's like an app that allows us to do this, and this is what we're interfacing with. And so when it comes to crypto, right, your first interaction is with the blockchain itself. It's moving the assets around and then finding an application and depositing it to an end. When it comes to interoperability, now, that application might be on a different chain, so it's kind of like I need to find a way to transfer my information, my assets over to this other server so that I can do that thing I want to have. But that app couldn't come to me. And so I feel like my mom is not figuring this stuff out. I'm a wonderful woman, really sharp, but this is like, she's just not going to take the time. And so every other app on her iPhone, it's just surfaced. It just works. And to get there, we're going to need applications that can be surfaced directly to the user and put the infrastructure kind of in the back. It's not going to happen by virtue of magic. There has to be something that makes it easy for those apps to kind of abstract that infrastructure away, that if there needs to be communication between blockchains, they can do it on your behalf instead of that burden of interoperability being on you as the user. And so in that sense, I feel like interoperability is critical for people. Talk about the next billion users, and they often say, like, well, it'll happen when people don't know they're using crypto. Okay, well, so to do that, again, not magic, someone's going to have to build it. And in this case, we're one of those someone's.
[00:23:11] Speaker A: Yeah. So when we're talking about interoperability, it's both the ability for devs to be able to easily create applications and also the experience that users have interacting with those applications that are built on the blockchain. Is it accurate to think of it that way?
[00:23:24] Speaker B: Totally. Now, I think to date, really up until the last six, seven months, interoperability is really only focused on the latter, on just letting users move assets around between blockchains and going to the app that they wanted to. I think part of it just comes from people in crypto kind of being used to this state where like, okay, yeah, it's fine for us to just as users navigate all this complexity, well, it's not fine. And only in recent months has the former of those two things he described, like this idea of giving developers the tools to do this on behalf of their users. This is only now becoming more accepted as like, oh, maybe, yeah, maybe this is a good idea. Maybe we should do this.
[00:24:15] Speaker A: Yeah. So earlier you talked a little bit about a convergence, but can you talk about your prediction, if I can call it that things will converge and what that means for interoperability.
[00:24:26] Speaker B: Why doesn't just every blockchain talk to every other blockchain? The reason for it is because blockchain is like, we talk about these things that are trustless, or like, you can just trust the information on them. Well, you only trust the information on them if a few things are true. So first is that information created by the chain itself.
So let's say we both use the same chain and I have a balance of five units, and I give you five of them. So now you can trust that five went from John to just that you could trust, so long as whatever is the agreement mechanism, the consensus mechanism for that chain is trustworthy.
But now you start bringing up new chains and, like, what if John creates his own chain? What if this John's not a reputable fellow and you can't trust his consensus, right? Maybe he just says that he has more coins than Jess does and maybe that's not okay, maybe that's incorrect. And so you don't just want to communicate with every chain that pops up. Once you do that, how do you actually do it? Since blockchains don't have a native mechanism to do that. And so this is another area, like another problem area that happens. And between those two things, the relaying of information, transferring information between blockchain, becomes very fraught. First, because should you even trust it in the first place? And second, can you trust the delivery? Right? Can you trust the messenger? Is the messenger legitimate? And so we need ways to add security to this process. And in our case, how do we make sure that the messenger is as secure as possible? Because we're building a lot of its centers on that messenger and securing that process. Right now, you can kind of take, there's a trade off between doing it quickly, which obviously fast, is always good, all things equal. You'd rather have something happen faster than slower, I think, for most people. But the faster it happens, the less time you have to inspect it to make sure that everything's happening and that everything, again, is kosher for life. Right. There's no exploit, nothing malicious happening. And so we can either do something really fast, but it means we don't have enough time to ensure its validity, ensure that there is nothing malicious, or we can do things very slowly and take our time. But again, we are sacrificing this trait that we really care about. Now, with the advancement of technologies in this space, I feel like we will see a convergence between these two axes, because right now you can either be speed and security are on separate axes, and you kind of have to pick and choose what you'll take. You can get like, pretty decent security while being really fast, but being slower, at least for now, is still safer because it gives more time to just verify that there is nothing malicious going on. And so there, I think we'll see a convergence kind of due to the advancement of technology.
[00:27:32] Speaker A: That's interesting. So let's say that interoperability is solved. The convergence has happened. We're living in the singularity. What does that mean for web three? Are we all just vibing on the blockchain? Have we reached a billion users? What do those opportunities look like for you?
[00:27:49] Speaker B: I think it means that getting to those billion is much easier, because in that world, one of the things we can do is we can route computation to much cheaper, more effective blockchains. And so we make crypto more cost effective, which removes the barrier to entry. And we can have that happen without the user needing to be very aware of it. And so now we're talking about serious augmentations to the user experience so we can have applications where, again, let's say my mom uses. She just interacts with the application directly.
She might have her main account exist on ethereum because it's the chain with the most assets, the most liquidity, most easily accessible for her. And then in the background, the transactions might get routed to something like polygon or say some other chain, which things can happen faster and cheaper. And now we've just made her experience much closer to what she's used to in the traditional technology world. Right?
Imagine going from a world where you just click on the Facebook app and it just loads and everything just kind of works, and you never have to pay for anything to. Now you have to create your wallet and find the application, and you are about to do your first action, and then you're greeted by like, wait, you have to pay $27 to sign your name somewhere. That feels really strange. So this perfect, fast, secure interoperability will mean that we're actually getting low cost of transactions. We're improving the user experience noticeably. We can again bring the application to the forefront and put all this useful, very necessary infrastructure in the background where it belongs.
[00:29:35] Speaker A: I'll say, okay, interesting. And I think that Facebook example is a really great segue to my next question, because the idea of working between blockchains, while necessary for helping things scale and to make things easier to use, does feel a little bit like what we see in centralization in my mind. So I'm curious, from your perspective, is there any way to have a truly usable, decentralized Internet? Are there things that we are sacrificing in the quest for decentralization? Do you think that there are aspects of centralization and those principles that we do need to accept in order to actually have a usable web? Three. I know that's a little bit of a spicy question, but I would love your perspective on that.
[00:30:14] Speaker B: I think that on some time horizon we do have to make those sacrifices, but I think they are temporary. You have Ethereum, it's super decentralized, it's amazing. But with that, we have to make some trade offs, right? It does mean that we should probably have a slower processing time. The reason for having not 1 second block times and having them longer is so that this decentralized network of nodes can actually communicate and things don't fall through the cracks as often by making it 12 seconds. There's now enough time for the information to propagate between all the nodes of this network, which obviously if you had, say, one node, there's no propagation, you could just do it as fast as that thing can compute. But now there's a trade off. So how do you manage this? Well, parallel processed with the advances in Ethereum, there are these advances like there's people who are fanatics about what's called the appchain thesis, or even the modular blockchain thesis. This idea that we can have other execution environments that are based on these very secure and decentralized hubs like Ethereum, but they're all tied together.
And so you can imagine a specific application creating their own environment that ties back to Ethereum and routing the computation to there and back. And so now you basically get, once you've able to reach something like that, you no longer have that centralization factor like that sacrifice, but it takes time. And so there's these interim periods in the middle, and I'd say the last year and a half feels like we've been in them and we're starting to get out of them. But I think we certainly will have these kind of like messy periods, but we do get out of them fairly quickly as people are still advancing the technology further. And so in the next year and a half, two years, it's actually really plausible that we would see lots of these new environments and what I've been calling app specific roll ups. So if you think, like we have Ethereum, this really amazing, decentralized Internet computer people have been building some, they call them layer twos. Think of these optimistic roll ups and sometimes zero knowledge roll up that look like one is called optimism. Another is arbitram. Well, now we are in the very, very early innings of people going one layer above that. And so why do you even go to that second layer? Because it's cheaper. It can be faster. Well, what happens when that gets clogged up? You probably want to go one layer above. And so applications could go into their own small environment that is a layer above the existing roll ups, into an app specific roll up. And with that, now we have less of that sacrifice. It's not as great as if we could do it on ethereum proper. But what you're benefiting now is much cheaper execution cost, much higher speed, while retaining almost exactly that same level of security as you had before. And here at hyperlane, we are very big believers in the modular blockchain thesis, in this idea of many app chains.
And we very much want to be the layer connecting all of them together, because we feel like instead of there being a large number of these large, almost monolithic chains, that there will be. Think of it like a sea of these many little, small, nimble chains that all connect to very large, secure and decentralized hubs. And hyperlain can be the thing that helps you just communicate between all of it if you don't want to just go by the default mode, which might be much slower.
[00:34:10] Speaker A: Okay, so just a note for our listeners. I'll put some show notes on zero knowledge roll ups and optimistic roll ups so that we don't get too far in the weeds, because we could have a whole other 20 minutes conversation just on that. So, just an FYI for our listeners, with the news coming out about FTX, a lot of people outside the space are feeling pretty shaken about crypto, and I know those working within web three are feeling pretty dejected. I'm sure that's an understatement there, with your focus on trust and security. I'm curious about your perspective on building trust in blockchains and in the long term, what needs to be done in the space to earn people's trust.
[00:34:42] Speaker B: This has been an absolutely devastating week. A week, I think that has set us back a long time, maybe even years. And I've been in crypto for five years, and this is by far the most difficult week. Not just. It's definitely the most difficult on this question specifically. It just might be the most difficult week in general. And I think we have a lot of work to do when it comes to rebuilding trust. We always talk about trustlessness in our industry, and we forget that trust is such a big part of every human relationship. And despite dealing with smart contracts and blockchains, humans are at the core of it. And so our industry suffered a big and probably a well deserved black eye this week. Now, when we kind of take a step back, we'll realize that actually what happened this week, this isn't like the version of crypto that anyone is advocating for. In fact, it had very little to do with the technology. And what makes web three the technology and what makes these crypto systems so interesting. What this was was a genuine kind of, like, financial scandal, an issue of just a standard old finance problem that happened to this time, involve crypto assets. And unfortunately, it's going to reflect terribly on all of us. And how do we climb out of this? Right. I've spent a lot of time in the last six years, even before getting into crypto professionally, trying to increase trust and awareness and kind of be an evangelist for this industry because of how much belief I have in it. And so how are we going to rebuild it? I think we'll just come down to making it easier to actually access the real version of crypto. Right? Giving people access to decentralized finance, to these other decentralized technologies where they actually, for the first time in their digital lives, have ownership and control over their assets, over their information, things that they've never had since the advent of the Internet. Right. I very much think I have a young daughter. She's about 18 months. I think when she's going to be 1516 years old, she'll ask, like, wait a second. So in your Internet, when you were growing up, you guys didn't know anything.
It all just lived on places like Twitter and YouTube, and you guys were just observers, even though you were the ones who were creating all of it.
And so we have to make those systems accessible. We have to talk to people at eye level instead of trying to kind of talk down to them about what they're using and how they're using it.
Until we offer systems that are more usable and feel as smooth, because technology has never been better, the usability of everything a modern person can access on their smartphone, it has to get to that level. Right? Like, people are not going to suffer any material degradation in the usability of these systems, but we still have to get them to trust us. And really, it's just going to be a lot of work to earn that trust.
Trust takes a long time to build and only takes a few seconds to lose, and that's what a week like this is. Obviously. I do think it sets us back a while, but with hyperlain specifically, we've realized that trust is such an important part of these systems. Again, in crypto, we always talk about trustlessness, but in reality, everyone asks for trust. When you are with a specific blockchain, it kind of wants you to trust that it is secure enough that it was properly built by the people who built it, by the decentralized group of nodes who maintain it, right, that it'll be there, that it'll be stable. When you're using a decentralized application, you're trusting the developers did a good job, you're trusting that it does what it says it does. And with hyperlane, especially with sovereign consensus, by allowing the developers to configure their security, we're allowing to turn that ask of trust from what has historically been an implicit thing into an explicit thing, like in that functionality, with the app itself defining a signer. Now the app is telling its users, if something is awry, we were in on it. And so you can have that level of trust and knowing that we can just do something fly by night, we can't do something wrong by you. We have to be complicit in any failure. And I think we are actually going to have to have a shift away from just saying, oh, don't worry, you don't have to trust to saying, like, look, you have to trust some things. The system is far more transparent than anything you've ever dealt with before, but we still ask for your trust. And sometimes we're going to get it wrong, sometimes we're going to build insecure systems, but here's what we got. And we are no longer pretending that this is just completely trustless, because it's never been.
[00:39:50] Speaker A: So this kind of highlights for me as well, like the huge responsibility that players like yourself have in interoperability and enabling that communication because there's such a big trust aspect to it. So going back on the interoperability question, where are we now with interoperability, and are there any trends that we should be looking for or any exciting developments that you're tracking?
[00:40:11] Speaker B: The three biggest trends, interoperability, they all started at different times, or these errors that are all playing out simultaneously. The first one is we talked about a little bit when we spoke about these app chains of sorts, it's this idea of creating systems of interoperability within some defined rule set. This really started with things like Cosmos and Polkadot. In Cosmos, there's the IBC protocol that for any blockchain that fits this rule set has to do a few certain things. And if it does those things, it can have pretty good interoperability.
In the case of Polkadot, pretty similar. They call them parachains. They use the XCM protocol. I forget what XCM things like cross chain messaging or something of that sort, those parachains can communicate with each other. So that trend, despite know five, six years from its inception, where those ideas were, first product really coming into the making, really coming into its own. Over the past twelve months, where you've seen an explosion of Cosmos app chains, there's been a pretty big increase in the amount of pair of chains and the activity there.
So that's one big trend. Another big trend is this idea of like asset centric interoperability. People are very familiar with these bridges.
Bridges help you move assets around you as an end user can use a bridge to say, hey, I have ten stablecoins here on Ethereum, and I'd really like to have ten stablecoins on polygon. And so I have now a number of bridges that I can choose from.
And so that's really started happening, I'd say, in the last two years. And with both of these, most of the interoperability still comes on the back of the user. It's the user initiating a transfer, a communication.
And the most recent trend is what we're seeing with some people call it generalized message passing. We like to think about like app focused interoperability, but the idea is the same. It's letting developers communicate information. And again, that information can be like executing commands on different functions, but giving the developers the option to do it on behalf of users. And obviously I'm super biased, but I think this is the most exciting trend, because again, it'll allow us to really augment the experience. And so, if you've been paying attention to the space of interoperability, you started hearing rumblings about it like 2021. But 2022 is really the first year where now there's systems live in production, whether it's hyperlane or layer zero or axilar that are letting you perform these, connect your application between a bunch of blockchains, send in the information between your app, execute functions on other chains, and that's this last trend of like app focused interoperability. I'd say those are the three biggest ones, and there's some up and coming ones we can get into as well.
[00:43:16] Speaker A: Those are all the questions that I have. Are there any final things you want to share about your work or about interoperability?
[00:43:22] Speaker B: I haven't talked about too much, but it's the thing I'm most excited about with Hyperlane, and what I think will be the thing we do that really changes this game of interoperability. And internally we call it permissionless deployment. It's just about the idea of letting anyone put hyperlane anywhere and bring world class interoperability to that blockchain, to that roll up, to that app chain, whatever it may be. And there's very good reasons why other players either can't do this or not interested in doing this. But this is one thing that we are super, super focused on because from my perspective, the magic of crypto happens when it is truly permissionless, when you can kind of take your fate into your own hands and say, I'm going to do this thing, I'm going to use this tool and I'm going to put it somewhere. So look out next year for I'm very, very excited about know I'll share more details as they come up, but that's really the biggest thing happening with hyperlink.
[00:44:25] Speaker A: Awesome. There's a lot of exciting activity in this space. So thank you, John, again for coming on the podcast and breaking down interoperability and trust for us. So thank you so much again for joining us.
[00:44:35] Speaker B: It was great to be here.
Close.
