ETH Rio 24 - Interoperability Solutions In A Modular Stack | Leo Kahn, Pedro Mace, Carolina Nunes

Transcript

now I would like to invite um Leo Khan from crossy uh Pedro ma from dfb uh Aaron again for for um moderation and uh kolina from infr token please welcome them [Applause] question okay cool wait do we

need we need more seats Portugues no man I have no idea what you just said oh okay English then I guess okay okay I guess we're doing in English then okay speak you speak English yeah but my English is kind of broke so okay I try happen okay okay yeah uh so I'm actually filling in for Joan CI uh on this panel he couldn't make it today so

um hence the the yeah so I'm not quite as prepared as I would otherwise be but don't worry I'll be easy on you man okay appreciate that appreciate that well so to give a quick let's so we've got 30 minutes here um and we want to dive into um you know the modular stack right this is one of the the themes that's really prevalent across crypto right now is we have kind of this modular versus monolithic debate or rivalry if you will and uh on so on one hand you you know you have people kind of lining up on their various sides on the other hand you have people saying that this modular versus monolithic thing is not even real it's just like marketing it's just like what PR people come up with to try to sell narratives and things like that so we're going to kind of dive into like

what all of this um maybe looks like what all this means and but maybe the first maybe everyone just take uh maybe like 30 seconds and just give a quick introduction to yourself and uh what you do sure absolutely so I'm Leo con I'm the CMO at crossy we are probably the world's going to be the biggest defi network uh fingers crossed and we'll talk about that in a little bit and uh in terms of my past experiences uh I've been at PayPal launching PayPal crypto company called payan doing about 12 to 13 billion uh onchain transactions just for B2B uh not on the consumer side and uh was one of the first people at near protocol so we'll talk about the monolithic stuff and what my experiences were back in 2017 2018 at near um it was

just like kind of like uh you know one chain rules them all um we weren't talking about interoperability or any of that stuff so I'll expand on that a little bit but that's kind of like what my experience is uh I'm like a dinosaur in the crypto space I guess uh I go all over the world uh speak and stuff and uh yeah so hopefully you guys can uh gain from my perspective okay uh do you mind if I talk in Portuguese because it's really hard to say inter AAR in English uh you did you did yeah but it's really hard uh so [Music] [Music]

oh I'm I'm sorry do you you will oh I'm so sorry I I will I talking in English uh I I was explaining that I I feel that the word interop interoperability is way more complex than just the the regular interoperability between chains we have a bunch of other types for example uh the interoperability between the Legacy world and the web 3 world and I I don't see many people looking for this Gap and trying to do like apis and yeah so I I would like you

talk um Pedro here um say yeah H started mining back Bitcoin back in 2016 well actually counseling for a bunch of miners in north New York and then I came back to Brazil being the head of HBY uh that didn't go so well because HBY never managed to actually get a grip in the country then I left H to go to transfer which is the mentor and the controller of the BRZ call it the largest non-dollar stable coin in the world you could say although we do use it in the tunes of billions of dollars of volume uh to do Forex more than anything else but I became then responsible for everything that the company did in web 3 really so all the defi operations all the incentivized pools all the minting of the new blockchains the bridging of

the token itself um and as transfo started becoming a instit payments institution well regulated one I forked let's say out of transfo creating my own entity H which they are a partner of um called dfb uh don't tell the regulator it could be decentralized Finance Bank Bridge or broker really you choose and what she's saying is more or less what we do nowadays which is um let's say data or transaction in because everything is a transaction or everything is a data is data in blockchain ER and an abstraction of data out so so monitoring of positions mol uh uh Sentinels um flash BS batching of transactions staking of ethereum polygon well um a launch probably soon but

Solana before that just because of the demand that I have from U my clients H and still doing all the defi operations between the BRZ and a bunch of RW nowadays so uh I do agree with her interoperability and modularity of very very bre large breadth of definitions that could really mean anything I do see the the sense in modular Rarity in the sense of how the blockchain works and how it's validated between the different participants of the the the network really uh but I do believe that it would be interesting to talk about all of these different subjects in one go but although it's quite a few yeah maybe we can we can just try to just establish a basic definition of like how we want to talk about like when

I think of about modularity or you I use kind of the modular versus monolithic distinction as a way to think about this where with the modular stack you're basically it's it's almost like it's like uh you know your it's like the Lego building blocks right okay we're going to take we have the ethereum based layer we have various l2s we have different like data data availability layers like Celestia that that kind of work in the middle of all that and then the interoperability is like one level on top because you have to get all this stuff to like actually talk to each other right and the way we actually uh um I I interviewed uh Raphael Castaneda about this recently and he had a really good way of explaining it where um he's having knee surgery today so he couldn't come but um the way he explained it was

look like if you take say you take you have a laptop computer and you you run out of memory you run out of processing power so you upgrade all the pieces in the computer and all then you get to the point where like you can't upgrade it anymore uh but you still need more more computing power so what you do is like okay we just add another computer right and then that one runs out of memory and then you had another computer and that's kind of like what like the L2 model is almost where you just kind of keep adding block chains and then you get the you get the the capacity but then you have to get these things to actually like talk to each other like how do you get one computer to talk to the other computer so that's where kind of the

interoperability like angle comes in Le that's how I've kind of been thinking about it um but maybe U you know Leo if you want to just kind of give like a quick definition of like how are you like how would you kind of explain that uh that distinction for the late person here so I think that was a great uh example of like you keep on adding computers and you know it's just modular and you're keep on adding more blockchains but it's just not about just adding more more and more more compute power graphics what may have you it's uh also about articles like where are you getting that information from and is that information even accurate I think that's that's also important that's why you see the Advent of Articles and articles are everywhere so which blockchain is talking to which one and where are you getting this information

from so I think that's very important to us especially for us CU cuz we we parse information from everywhere and articles are like super super important to us uh but yeah I mean I look listen so um cross is is a layer 1 D5 project uh that's built on Cosmos and we also utilize evm right and that's what we make we make it much more easier uh for our modular approach uh today we might not be zero knowledge but that's kind of like what the intention is that you know you you started with uh low code no code and now we're in the you know zero knowledge space so it's that's why I love Tech and this is what basically Tech is all about like we're always evolving so going back to the same example when we were building near back in 2017 2018

uh just Five Guys in a room with no windows like literally I kid you not um and the whole thing was we need to build a sharded Network that's it we only had one mission in mind one one single Focus Mission which was build a sharded Network beat ethereum to eth2.0 and uh they said oh you you you can't you can't really do it right and then we went and we did it uh you know raise a bunch of money from andreon and so forth but that era was different we weren't even this was not even a conversation that at one point there will be oracles there will be interop ability these words did not exist like we we this this Tech did not exist I'm I'm talking about 2018 uh and here we are where we're saying oh the era of one chain is over right and then

you got to have EVMS you got to have like much more interoperability and then now the block space is running out you're adding more blockchains and all all that good stuff so I think that this this is basically a testament of this entire Community people in this rooms because CU user base is growing bandwidth is growing um and you talk about scalability but when you when you're trying to do scale and you're trying to hit scalability these are the issues and these are the problems that create with it these are good problems to have and that's where you know uh modular stacks and these things they come they come into play and that's why we're here and we're having these conversations uh so I think those are my two sents like what the evolution of the spaces and how we uh how we get here but

then again I mean does everyone have the answer today that you know I have a One-Stop shop solution uh that basically fixes all your problem no uh you know it's there's no win or take all situation right now um that's what great about our space is we're not we're not in the cloud Wars where um you know you're like oh are you on AWS or gcp or you know Azure and what may have you but even even in that in the web two space uh I was in the web two space for about a decade uh they're also talking about inability they're also talking about meshing the clouds right they don't believe in like one wender uh you know because they don't want to give too much control they don't understand it that's the problem they don't understand that why I don't want to give too much

control to AWS versus uh Google cloud or you know any other vendor but they love working with centralized institutions the answer is duh it's decentralization that's why you're doing this because you don't want to have too much control over one vendor and that's been the case but I think our space is evolving it might take a decade this is a long time by the way you're in it for the long haul you're not in it for you know uh a short haul when I started in the space in in the web 2 sorry I'm taking too long to answer this but when I started in the web two space um there was only one vendor it was called Salesforce that's it and nobody wanted to take a chance on Salesforce and they're like what is this like you know I love Perpetual licenses I want to own and operate my own

hardware and then look what seral force is and where the Web Two web 2 and especially the cloud era is so our space might take another decade uh 10 years but but but then uh by far it will be cheaper faster uh obviously decentralized and much more scalable so it's interesting point you make that these aren't necessarily like new problems right these are like the web TW space has dealt with some of these same issues and it's really just the same problem just manifesting itself in a different you know kind of technological context essentially so it's it's use like we're not necessarily like this isn't like you know totally plowing new ground that's never been done before like there are you know these solutions that have existed people have figured out solutions to these problems um I guess um I mean Caroline or or Pedro if

either you want to react to that I'll let you do that and have a couple other questions to uh go ahead yeah uh so in infr toen we are dealing with uh another kind of interoperability that is this this gap between the web two and web 3 and for example for the regulator you need to make it clear that the the old model you can translate it into web 3 as well so for example we are getting the the instiution of uh bsing J that's uh something that the Judiciary Judiciary System uses to to block

values uh and we are translating it into web 3 so okay you can call also Bing JY you can use it to to freeze tokens as well so we are trying to translate the things between web 3 and web two because there that I see that we have a a really a real change for the regulator because the regulator we can force the regulator to really understand all this decentralized system uh we know that the the interoperability between chains is a

thing in the decentralized uh ecosystem but first of all we need to make it clear that the the the old institutions will not disappear because of the the blockchain uh the regulator needs uh someone to kind of Chu Chuck the neck um so it's not easy to just okay uh the intermedi the intermediaries they do doesn't they don't exist anymore because of the blockchain it's not like this I wouldn't say the intermediaries don't exist anymore I say that anyone can be an intermediary now now they all compete in the free market world so H although I do

agree with you you're basically talking about governance in the contract for example because if you look at any regulatable or regulated or serious stable coin nowadays they are black listable they are blockable they are forc transferable you have these governance features so that you can actually manage as if you were a regulator back to your no winner takes all argument I love that I have fully agree especially consider that that now the difference between before is that you asked please please can I please regulator make a bank you don't have to deploy the code make the nodes make it run but the interesting thing about interoperability in the no winner takes all world is the fact that it becomes a let's say a path of leaste resistance because in the end of the world the day in the end of the day the ideal

blockchain let's say operations won't necess necessitate you to actually know you're using a blockchain right so let's just say that you have uh in five years probably thousands of different paths to get from point A to point B whatever point point A to point B is is is it an asset to another asset is it a uh voting power to a decision whatever point a and point B is you'll just find a path of lease resistance and some system between you and multiple blockchains at the same time will facilitate this and make it extremely let's say efficient for well do regular people know how email works no they don't they press send and it sends right so uh when it comes to interoperability in a in a c of

different blockchain and I believe that is the final goal everyone has to strive for it's a good thing you guys do facilitate having an evm because well the infrastructure is already built so um it's it's very hard to and I know this we build infrastructure to abstract data out of the blockchain to adapt everything so that one language can speak to each other because in the end of the day all the nodes are listening to is machine code right uh you're basically doing a three-part translation from machine code to code to translation to another code to machine code again isn't it way easier if it's just machine code to code back to machine code plus no a lower threshold for errors and a lot more

processing efficiency so considering ethereum invented the economic incentive to program I don't believe there was much before ethereum right now you can make AAP and become rich program good great incentive people learned evm people learned solidity people learned well now Viper you can say other abstractions on top of solidity or whatever but it has become so such big a monster that ignoring it and not being able to Via oracles hopefully although the Oracle problem is impossible to solve perfectly uh it's uh it becomes way easier and Wass less uh friction to get from point A to point B which is the final objective soe I just have you want to if

you want to react to that I'm going to change the topic slightly but if you wanted to react to that no no I agree I I think he's spot on I mean both these guys are spot on so so coming from the the Builder perspective uh something I've been thinking about I guess as somebody who's not a builder but just trying to think of how i' approach this if I were a builder um does does like the modular stack and like kind of all these like layers that have been kind of piled on does this just does this over complicate things for the Builder right does this make it because you got to think of like okay I want to build a Dap like I want to get rich and build a Dap somehow like Pedro saying like Okay like okay let's go program something okay

what chain do I build on okay I want to build on ethereum okay there's like 50 l2s I can build on and like they're all I don't really like I don't really understand the difference between any of these things nominally like they all kind of look the same and then okay now I need like a data availability data availability layer and I need an oracle I need like all these different like how do you know it almost seems easier just to plug into something like like a salana or near or something that's a little more okay just plug and play and ready to go um anyway would just love your like thoughts on that I think that's uh where salana near uh you know these guys they they're good guys in terms of they make it simple for you to do it they're like hey here's all the

you know Dev tools that you need you just come here and build your dep and you're on your way right and we'll take care of the rest like we'll we'll take care of the gas fees we'll take care of the uh you know any interoperability problems that you might have in the future we'll take care of it right we've got the evm we've got all of this stuff and whatnot uh and then they have a ecosystem Solana might you know they have a closed ecosystem so so they're more kind of like an apple approach like what Apple takes right so it's all proprietary and all that stuff even though they they might say that it's it's it's all open and stuff like that but uh good thing that they have is they they do have the numbers they have the community I mean they have a lot of

developers they're what give or take about 15,000 developers uh in in in in our industry I mean there there's millions of developers out there but but the ones who are actually building uh like solidity developers and so forth they're very hard to find like where where do you go and find these guys they're about only 15,000 and then now there's Rat Race there's a competition I want the same people right out of those 15,000 so my job becomes much more hotter to convince you guys if you're developers here please come build on my chain and do this and you know and then it makes it so so I think the uh going back to there's no winner take all mentality but I think the winner would be whoever makes it much more easier for the dev tools like simple right you come here that's why we get into the the the

ZK space the zero knowledge space right you don't need to do anything you just come here simply plug it in create create a simple dab and you're on your way and then just leave leave the rest to us so I think we are the incumbent when it comes to uh having that responsibility where we're making it much more faster scalable and I have to be up at night and figure this this problem out right my CTO and you know my my technical team has to figure this out how do we make it much more simple and scalable for the developer uh so so they don't have to worry about oh which which L2 I need to pick which you know text tack I need to there used to be uh I think there was text. or something I don't know if I'm missing the name uh

like this is the web two era like literally you would go onto these different websites and you would pick like text stacks and figure out okay this matches with this one this is a match with this one and that's what you're doing you're just playing this puzzle game all day long I used to do that you know kind of like back in the day and then you're like oh I'm am the expert when to figure out like what these Tex Stacks are you know that's why you want to give me a job because I know what the tech Stacks look like like the back of my hand uh this is stupid like uh you know exactly why why are you doing this it should just be simple like you know I have limited time I want to put simple lines of code and basically make that

work same goes in our space um so I think that's what it comes down to when you're when you're tackling that problem so uh we are the ones who should take responsibility and make it much more simpler for for the dev I think a great example that comes to mind is again it's a payment company called stripe they make it very easy for the developers Tulio is another one that comes to mind these are web two companies uh that are looking into coming into the web 3 space especially stripe now uh they're launching like they were the early ones to launch a crypto uh you know payment platform and they backed out because of D investigation and what may have you and now they're back back in it um so they do a great job for the developers just give them basically the Holy Grail

of like the developer tool sets and they're like just build and it will just automatically work um so I think we're the word is automagic so we're not really there uh in in blockchain so I think we need to do a good job of doing it again uh uh it it comes down to resources money and so forth these companies they have billions of dollars Solana short they they do have those billions uh but not every layer one or Layer Two has like billions of dollars like I'm sitting here representing Crossfire we don't have billions I wish we do so so we can go and build those tools and make it easier for you guys to kind of like do it so I think those are my two sents on that other thoughts on making this stuff accessible for Builders yeah so my biggest concern U

when I build a product is to don't let it be too expensive because this is a huge problem when you try to sell it for example for a financial institutions they will they they will not really care about all the infrastructure that you're building on they will care about if it's 10 cents um more expensive than the the infrastructure they are using uh it will be if it's a blockchain it will always be that's yeah that's the problem they don't see it like because the the infrastructure will just

be cheaper if you fire for example uh the the people there that are um building the Excel uh sheets and make it manually but they don't see it like it's it's yeah so it's not it's not clear for them so so to be pricier so if you're price conscious and you're actually looking for the cheapest product out there do not build on web 3 web 3 will always be more expensive because there will be gas fees it will be expensive and when we were out there and building like near protocol we knew it from day one that we will be expensive but that is the price that you pay for decentralization so it's up to you you

can decide you can you can go to AWS you can go to any other Cloud vendor and say hey I can build much more you know maybe cheaper and faster and there's why I say faster because there's so many developers would I say more than a million developers available they already know that stack and they know how to build on it so it's easier for them to do it so you will get to Market Faster by building on web 2 and getting there but um if you don't want to give your data to somebody else and have that centralized institution control everything that you do like overnight they can switch you off because you just violated one terms of condition in the million pages that they have and you're done you're toasted that's it it's it's sayonara game over for you right if you don't want to give your data to someone

else give it to everyone ex exactly and uh you know and then they have a bad gr Channel and the government is watching and you know what they're doing so they can shut you off uh look what's happening to Tik Tok right that's a that that's an ex perfect example like they can just shut you off now imagine if Tik Tok was built on a decentralized network what what are you going to do how are you going to go shut it off you you can't do it so I think there's all so there will always be a price to pay for decentralization so be prepared if you are developers here and you're thinking about how can I make this a much more cost effective thing go build on web too you're in the wrong room you're in the wrong room you you you have to build if

you're building on 3 you will pay a much more higher price maybe 10 years from now we will get much more cheaper you know and 10 15 years it will be so much there will be so much scale and so forth and we will be a little cheaper I don't know what the future holds but as of today right now we are more expensive because you have to pay the cost for well it's hard to argue that we would be ever more efficient than a centralized server simply because multiple people have to verify everything that happens but that that simple fact just makes it processing more expensive um I believe blockchains really are only for two main things which is well let's be honest power and value so things that you don't trust other people with that's what blockchains are for so to be perfectly

Frank with you and I don't want to make any Regulators mad at me at any point in my life please there no Regulators here trust me nobody's watching you is um the fact that well now I don't have to have an intermediary to trust anyone anywhere that's a new thing for Humanity so if you extrapolate whatever this blockchain thing is which is a generalized term because modular blockchains don't even look like a a blockchain anymore it's not a chain of blocks well it is it's multiple at the same time um you really start to understand that this is going to be a method by which we're going to reprogram let's say the Human Society because previously to trust someone that wanted to well it's just for argument say kill me or steal from me I would have to put a regulated intermediary that was trusted by someone that give it

a certificate now I don't now I don't now I verify now I don't trust I verify so that that really changes the whole dynamic of human Society in the next 50 years if you ask me um uh it's bigger than we think it's bigger than money so so you're saying trust but where ify well you do have to trust your node or whatever it is it is there's some complications to that idealism but H technically speaking is way more trusted so yeah can we I like this conversation but we only have four minutes left so I want I have one more question I want to throw to the the panel here and so we recently had the Dev upgrade uh back in March so two months ago and the

point of this upgrade was B on going back to the question of Price Right the point of the Devon Ed was to make ethereum l2s much cheaper to use right lowering the gas fees on these significant and uh my question is um has this like has this maybe worked how is this going has this worked as planned has this made it more easier for Builders to access and then maybe you know how does this maybe play into this interoperability conversation uh that we were having earlier um I mean whoever wants to take that one and then well um I honestly think that the expensive and heavy actually decentralized blockchains in the end of the day are going to become let's um although there is a beacon chain around Beacon chains for other things to plug into and to

automate out of and then we settle on that chain but that's only the main settlement whenever we feel like someone's lying to us or whenever we feel like there should be a well a time frame that which in which we all agree on this state of the truth really but um well I guess that's my two SS uh yes so ethereum is going to become a beacon chain for many multiple layer twos because it's way too expensive for people to operate in terms of the dev developing on Layer Two I love this phrase from andon polos which basically says if you have a a tube right a a a wire internet connection that's 10 kilobytes you will find an engineer to tap those 10 kiloby and use 100% of those 10 kiloby if you give him a 1

gigaby connection he'll find a way to tap a gigabyte connection so the price of operations of a blockchain is more to do with the economic incentive for you to operate at such a high throughput within that blockchain more than anything else it's not ethereum's throughput fault that it's expensive is the fact that the economic incentive for people to tap fully that throughput is mostly there if you look at layer twos and you start having the amount of money or multiples the amount of money that you have in ethereum for example you you'll start getting very very high gas fees as well it's a it's a very interesting game between the well once we were deploying a pool in a Avalanche and it really surprised me because I p i

deployed the pool at the wrong price on purpose on the same block I deployed the pool there were people arbitraging my pool back to full price which was shocking to me but that just proves if there's economic incentive to do an operation that operation will be done either if you want to chime in on the uh the L2 question um I I would just leave a a message to you guys if you have developers um that are building on web 3 keep an eye on those developers and try to direct the product because they they will probably build a masterpiece in the web three scenario but you need to know

where are you playing the game if you are playing the game the traditional sector you need to keep an eye on them and but you if you are building on the the decentralized full decentralized sector it's okay they can build a m Masterpiece that's on the developer thing except for the meme developers developers developers developers which keeps being true uh oh God I believe I forgot I was going to say damn it I had to make the joke I had to make the joke Leo want to give a final thought then if if F remembers a joke then we could go back I I I I think these guys are right and and yes it is a rat race for developers developers developers but but

I'm indifferent to the cost of the l2s and stuff like that like uh at the end of the day um I don't think so that's kind of like uh affecting my business like I'm really laser focused on like what what we're trying to do uh so our mission is basically like we we have we like we have a crypto card so where you can connect your metamask wallet uh basically to our app and then just you know use the Visa card to pay for um any any Goods like you know coffee and what may have you so I'm more concerned about uh transaction volume and how you stretch the network and just use it more and more uh versus like worrying about the the layer two cost and so forth that's just kind of like an afterthought so I I think I'm I'm the the wrong

profile to be asking that question it's a great question for CTO and stuff so those guys they worry about those cost I remember I was going to say I was just going to mention I love every single developer in the room and out here in the the crypto world you guys are way too idealistic on the way too idealistic seriously it's very easy to get lost in your own little world and think that that world is perfect but that's not the real thing H and I really wanted to ask you now about that car do you use permits on erc's for example to do it so how exact what function do exactly do you call and how does it operate exactly in terms of when do I sign your permission to move my money through the metamask uh I mean uh you don't need it's permissionless right so Bas

basically what what you do is simply just connect your wallet right to to the app and and that's it uh I have to sign your I have to give your permission to move my money or I have to transfer the money at some point well you use our token so you use yeah use so use xfi to basically Force move yes yes Force move so I mean for today right but in the future um uh we are already in testet right now and we're basically using the card it's it's actually working like we have the terminal here and whatnot if you want a demo come come see me um and our teammates here as well it's it's it's it's fabulous we've been paying for Uber we've basically been using this card and doing everything that you you would do with an uh you know regular

card so rewards comes next and all those things and what may have you right so we it's a great idea I'm going to cop you that's that's why we're here why do you think like ideas matter right so uh that's why I keep saying it it's never been done before where you can simply connect your metamask or trust wallet or any other wallet right and uh just you know use Fiat or flawlessly simless right and um there's no banks by the way you don't have to connect a bank so it we we cut out the middleman so it's straight up your metamask wallet to crossy pay through the Visa Network which is global I'm going to check if the BRZ has a force move function and I'm going to do that it's pretty nifty I like what you did this this this is the cool all right well be sure to

check out uh be sure to check out this card like you've peaked our interest in this so we'll uh be sure to learn more about this afterward uh but hey uh Pedro Caroline and Leo really appreciate your time today thanks everyone for being here and uh I'll turn it back to Antonio or whomever for the next panel hey Jack dorsy where's Jack dorsy thank you guys thank