Gnosis Chain Ecosystem & The Second Merge?

Transcript

[Music] i'm here at dabcon 22 in berlin it is the end of the conference people are getting drinks there's an energy in the air here that is quite unique because the merge is happening in just a few hours uh but i'm here with stefan george hey how you doing great thanks for having me uh cto of gnosis yeah and organizer of this conference i mean gnosis has been organizing uh this conference for a couple of years now yeah there's lots to say about that con and the thing that

i think is really cool about dapcon this year because there was a two year or three year hiatus since the last one yes i think 2019 with two years now 2022. so yeah so you skipped four years like yes but like this is it's like dabcon is like a new dapcon because it's gnosischain.com and it's like no ecosystem.com and that all happened in the last two years right so what's the significance of this and like what are the plans for for dapcon moving forward yeah so for us devcon is really like a conference to bring all like the dev developers together it was kind of the origin of the story of devcon wars there was a lot of like conferences to uh discuss like core infrastructure clients like progress on

core protocol but there was not really a conference to really focus on on dapps on use cases it actually like no user comes to a blockchain to use a blockchain every user comes to actually do something useful and we felt like we need to put more emphasis on this and that's that's how like depthcon came about and yeah of course now recently we merged with xdy and xstar became noises chain and now notice chain is also applying the merge a little bit later than ethereum actually yeah but of course this also means there's even more focus on ecosystem development on on devs and yeah we we see norses being or like

always has been uh very aligned with like what the theorem does now we use even the same technology for the network so we are working together with the same teams contributing to the same teams and so yeah we we hope defcon allows us to yeah to especially now after two years of pandemic to finally meet again i think things move much faster when you meet people face to face yeah and i think that's a big opportunity here so i spent hours just talking to people and it was great to catch up and see what they're up to now and how we can work together and i think has been extremely fruitful for us yeah i mean it's great to be back in berlin and like see all the berlin people like yeah i mean it's funny a lot of people think i live here

somehow but no no it's good to see you very well yeah yeah like yeah but um yeah with regards to the conference so this is going to be like a it's a yearly thing now uh you know one of the things i think that is really uh salient about you know two years ago when i was at last.com and now is like the you know you're talking about dapps right like there's just so many more depths and actual people building businesses and doing things on blockchains that just like were sort of dreams two years ago and i think uh martin mentioned this a little bit in his opening statement at the beginning of the conference and you know one of the really interesting things that i saw here is just the use

of poe apps right like i got my pop-up card uh you trade posted people and pots are being used by uh music labels and you know the film industry and like it's growing into this this thing that goes far beyond just us crypto nerds and there's lots of other examples of this yeah what are the things that you've seen grow in the last two years that are now kind of like it's happening it's very encouraging to see like finally we bridge the gap to the real world like it's not only crypto for crypto nerds but now as you said like uh props are issued by many events and i think for me one of the things that i never considered taking off as much as they did is nfts related to pro-ops

i think this allowed us to get a lot new users into the space and uh enable a lot of new use cases i still think we just scratched the surface right now it's mostly about collectibles and artworks but it's a lot more you can do with nfds yeah and i feel that was really it has been really encouraging to have this like um yeah connection to a lot new users and not new people industries coming in um that has really shaped over the last couple of years and i think contributed also to the yeah to the enormous growth that we had and that's why now like that corn was very quickly sold out like there's a lot of attention on our space which is great allows us to move

much much faster and uh yeah i feel like we have to also double down on this like we have to get more real world use cases uh right now we are experimenting on the payment protocol so i think all these use cases we were kind of thinking of over the last couple of years now the tech is much more mature we can finally do this and we can actually finally finally feel like tech is not the blocker anymore for many things yeah and now you just have to do it you just have to build these bridges and then get the next wave of users yeah yeah and gnosis has been a great incubator for lots of i mean like noses have been working on stuff i mean like just for context the the i think the the core product that gnosis was trying to build

very early on was a prediction market right i don't know how much of that you guys are doing now but it seems like gnosis the ecosystem has you know surpassed these these use cases that you know what were interesting at the time but like the things that we can now build on gnosis chain like things like poet things like this payment uh system that you're talking about which i'd like to spend a couple of minutes on you know there are real real world applications that can touch potentially millions of people not to say the prediction markets are interesting or like that these kind of early primitives weren't um uh important to leading gnosis to where it is now but i feel like the the the the ecosystem and the vision that you guys are are pushing forward now it's

just like so much broader and so much more tangible and like valuable in a much more broader sense yeah yeah it's very flattering like we've been trying to build all things and many things failed to be honest yeah so prediction marks one of the things that we kind of stopped doing we still support teams that build it but our personal time we spent now on other things but i guess like one lesson that we learned is like um if you are building tools that make our own lives easier most likely they help others so that's kind of also how i think no safe came into existence we needed ourselves you know our own customer and this helped a lot of like making it better and making many other people using it yeah and then also for many

different use cases i mean not to mention like all the dow tooling and all the interesting dows that are on those right yeah so we we turned notices into northern style so we needed our tooling so how you built it yeah and i feel like this is usually like how you build the best products like if you're your own customer um and fortunately now we have again like a lot more people coming to the space there are a lot more customers a lot more feedback and just allows us to build much better products i remember times when we had like a long lasting bear market without any users it was extremely difficult to build something useful because you don't get the feedback like it's incredibly helpful to have actually users uh to build great products it's kind of

obvious but for a long time it was just not possible in crypto nowadays and now i think the opportunities are much more real and yeah i think the payment protocol is very good example yeah so fedeca was telling me about this this morning we did an epicenter episode uh this morning kind of recapping the event and and um and we talked you know we talked about this thing so how does this work like i'm really interested in like the technical aspects of how so just to contextualize so um there's a there's a visa card that you guys are going to be issuing through an issuing service provider partner that visa card will allow someone to pay um you know as they would but contrary to a lot of the other visa crypto visa or cryptocraft cards that

exist it is the the card itself is a hardware wallet so you know typically if you were using something like uh monolith or one of these other cards you sell the crypto it gets sort of moved into a fiat wallet and then you use that and there's always this uh this transaction that you have to do in order to sell your crypto at any moment at a time and fund the credit card so you've got to also think about like when's the right time etc but with this the crypto is actually on the card it gets sold at point of purchase and then here's the thing and this is where i think it's super interesting because it's argumentative application of payment systems if the if the merchant also accepts x die it it just cuts through visa it just

like goes to x die directly without even going through the visa network and um i think it's brilliant but like how does it how does it work yes yeah yeah so as you said like we issue a new card or like we issue we are not an issuer but our partner does issues the card and the special thing about this card it looks on the surface it looks like a regular visa card but in fact it's also a hardware wallet and what allows you to do is it allows you to do regular visa transactions it also allows you to do transactions where you actually pay with non-custodial crypto so you have crypto or noses chain that say x die and you go to the coffee shop and you pay wherever visa is

accepted globally and what's happening under the hood is like uh you actually have to sign a notice chain transaction uh or notice chain message and this is actually embedded into uh like the reader transaction itself okay either has actually like a field where you can defend data okay and then uh this transaction is actually processed still over visa at this point where uh then the part of the crypto transaction is going to the fx through to the exchange which then is done by us or like this collaboration to uh convert if the merchant doesn't accept crypto too feared and uh sends the acknowledgement over the either network to the merchant

okay actually he received the money so the great thing is like there's no disruption for the merchant the merchant can still do whatever they want the user can also pay wherever visa is accepted but in fact he's using crypto yeah and of course like the long-term vision is not to um yeah to to yeah to play everything over the visa network the long-term vision is that the merchants actually can accept crypto and uh well that's where like also the partner comes into play which uh which actually has like relationship with merchants many many merchants lots of merchants yeah and so it's like a payment terminal exactly so they can so they can upgrade the software on the

terminals to allow the merchant to accept crypto and that's of course the most exciting part like the long-term vision where you can actually build like a parallel system which actually fully is non-custodial fully on blockchain and uh yeah that's of course the future and i feel we need more of those initiatives where we are building bridges to old infrastructure so we don't disrupt the user experience yeah but we already make them users of our own system and then eventually if we prove that our system actually works better then we can convert them step by step so i like to compare to like skype you know like uh i was a very early skype user and they used to like to do calls online

obviously and at some point skype upgraded to like skype out skype in yeah so you could actually start replacing your phone like like you don't need a landline anymore like uh you can just use only your skype account and today like pretty much any call that you do no matter if it's landline or not like everything is going over the internet yeah so i think similar with blockchain um we have to build bridges to the old world ideally using the infrastructure as well so we can actually meet somewhere in the middle of the bridge and then eventually like yeah eventually everything will be done over blockchain yeah it's a it's a really cool sort of augmentative approach i think to to

using the technology in a way that people already are familiar with using like this this experience of using a card but in the in the back end it can potentially be like a crypto crypto transaction without the person actually knowing it and it's interesting this kind of visa payload thing i have to go and like look at how payment networks work uh no that's cool and um yeah so it's kind of weird because you know this video probably will get released after the merge but you know without making it too um i guess time sensitive what do you feel about like what's about to happen here today and like yeah everyone's super excited of course like i personally waited very long for this moment to happen um and yeah there are

several like parties that are being organized to celebrate we will actually open our office here in berlin overnight so people can stay and await the merch together even like a piano concert accompanying the merch itself so it's going to be very exciting i hope everything will go well it's very very complex so we came to realize how complex this is especially when we tried to actually do the merge on those chain as well so again those chains following the ethereum roadmap so we actually tried to front run ethereum doing the merge earlier than ethereum turns out it's actually very complex to do this and to do it successfully and

so we have a bit of a different setup but well in short like it definitely made us appreciate even more so how much work and effort it is by all the developers and parts involved to make sure that this is a smooth transition so those chain will do it only in like two to three weeks okay um once you once we've sort of seen what happened with the main net merge and yeah yeah it's like also like we come from slightly different setups it requires bit different preparation and we have only one execution client so the great thing about ethereum is it's super resilient because there's many different clients so many different execution signs and consensus clients so if one client doesn't work it doesn't

have like a big market share it doesn't matter in case of north chain there's only one execution client and this client has to work and which is the never mind actually never mind okay so open ethereum still also works but it's not prepared for the merge the open museum is going to be deprecated yeah there's only one which you really can count on that's never mind and so yeah we have to we have to so then never mind no it's just changing as expected no system will become uh a data availability layer and potentially where other uh execution layers could also deploy to it is that so contribution you can think of it's similar to ethereum so we like similar to ethereum there is not

the ultimate scalability solution on those chain so the approach to scalability is also layer twos and so yes uh north chain will become a data availability layer for uh many layer two so for data to operate even today there's already optimism operational on yeah on those chains but there will be probably many others i still think data availability is only one use case right i also don't expect that for ethereum will mainly turn into a data availability layer still be a lot of transactions going on uh they do other things but for sure also data availability and then you know for for the for the average developer building an application you know

what then becomes the advantage of building on mainnet versus noses chain how would you articulate that as kind of like yeah a differentiating point is it just the ecosystem are there other specific like either technical or you know features that nurse's chain will enable that uh maybe mainnet has not incorporated in their roadmap yeah so i think the number one case is still like transaction fees are much lower on on auto chain compared to ethereum and of course you can argue now how does it compare to other like so-called ethereum killers which also offer very cheap fees uh the main differentiation will be decentralization so notice chain like we we are following the ethereum roadmap

for a reason like the ethereum proof of stake system is probably the system that can be the most decentralized yeah it's like hundred thousands of validators uh that's something that you cannot accomplish with tendermint or other consents i agree with them so it's like different tradeoffs exactly it's like super resilient super decent plus we actually try to also make sure that the validators are very diversified you have now the issue or like maybe it's not really an issue but it's discussed as being an issue i see like centralization of depositors on on ethereum where you have like lido yeah having like a big big part of the department five five of the top valid arizona like something like sixty percent right yes so it's like

basically it's lido coinbase tracking finance so those guys together yeah they effective if if they would all be compromised ethereum would be compromised and well for for gnosis chain we want to make sure that we have really a super diversified set of validators so we we work with teams that try to do liquid staking but distributed so many people can join small permission list to join uh this is being facilitated by like work that say oboe is doing for example oboe is doing a very important part to this um and so yeah we will double down on on technologies that allow us to create the most decentralized network the most resilient network and that's a very important differentiator to other

like ethereum competitors yeah again like two ethereum itself i mean ethereum is great and uh yeah i think the main differentiator to ethereum will be cheaper transaction fees actually otherwise theorem is doing itself i mean one of the things i think that in the cosmos ecosystem people have discussed is this is an issue in cosmos where also where okay you may have 150 validators on a chain because tendermint uh is deterministic finality you know you you can't build that out to like a fully permissionless validator set although there's like heterogeneous paxos and new algorithms that might allow that to be a little bit better but the problem remains that

you know coinbase and binance and very large validators often are controlling a significant amount of the security of the chain one of the ways that i think people have discussed in the ecosystem as potential ways to mitigate this would be to have economic incentives for validators to remain small so some sort of slashing or you know if the validity becomes too big is this something that could also help because you know yeah things are going to aggregate right and like unless there's any unless there are like people actively doing work to keep the valdra set decentralized or implementing some sort of technical solution to do so i feel like things tend to want to centralize um especially if there's adoption and

like yeah how would you deal with that in the future yes this that's actually open research question or that i agree with you like you ideally you have to you have to solve it with incentives they have to be and of course like we're following ethereum two so we have the same incentive model as theorem two which doesn't actually solve this problem yeah so what we're doing now is we're thinking about creating additional incentives on top of what the base layer intended anyways are to especially incentivize individual stakers to participate and of course like at some point you have to think about sustainability uh but for the time being i think we can just set incentives which will just make it a lot more attractive

for yeah for like individual uh validators to join yeah i feel like liquid staking is obviously taking off because of user experience it's just easiest also is the most capital efficient right now and people love it at the same time i think we can offer the same without having the issue of having one party controlling like how this is actually distributed among staking services yeah so having this permissionless um yeah liquid staking i think can be like a very key component to keeping it decentralized and of course there's a market forces or economy of scale which might lead against the centralization so

i think it will be probably like a constant fight but we'll try uh you'll see how far you can get yeah uh yeah i think i think you guys are on a good path to uh you know to getting there and just yeah and i mean the the those know this ecosystem i think is very mindful of these sorts of these sorts of problems and like there's lots of smart really smart people on your team but also i think in your broader community that um will steward like for example yeah like one project that we have been supporting for very long time is called depthnode yeah and so that note makes it really easy for everyone to run their own node this is kind of the prerequisite to actually have a decentralized network and so we have been supporting them for

very long time and we are subsidizing actually uh to buy hardware that can run at home so you can actually have your own validator running on your desk to validate those chain uh and you give you some genomes for this that you can actually use to stake on the network yeah so this was very nice this way we got like a few hundred users uh just running their own machines and helping incentivize network which is great and i think these kind of initiatives we would like to double down on and um again like we will what you will see from us over the next couple of months is like um defining metrics of how we define decentralization it's not only about validate account right like i can spin up like a hundred thousand

validators but they're all my machine or all my under my control that doesn't solve anything it's important that they are geographically different locations it's important that they are distributed between different isps so if everything is in aws doesn't really help us so i think there are many different metrics that we will try to evaluate and then also compare to other networks to just kind of put the finger on it and try to with incentives to to get to a better decentralization yeah i mean it's certainly like i think in the ethos and of gnosis and the gnosis chain ecosystem to be as decentralized as possible and

certainly like you know you you've pushed this vision a lot i know like talking to federica also you know she's very uh you know she's a you know strong proponent of decentralization also privacy and yeah and people also and like sometimes i feel like i still have to educate people again even our own industry about decentralization matters why why we're here sometimes like i just need a token yeah no it's like uh of course decentralization matters especially if you want to do large scale things let's say the payment network for instance um if you would run this on a network where very few vcs are controlling uh basically the network and it's very unlikely that you will ever get to a scale where you get like different banks into this

system to issue those cards like it has to be credibly neutral yeah otherwise it's not going to work and i think this credible neutrality is something that we want to have to allow really like permission this innovation you know like if notice shuts down the validators network is not going to disappear yeah yeah and so i think that's super important uh it's it's not only about being like a reliable but also just actually being fully permissionless and that only works if the network is actually decentralized yeah well stefan thank you so much uh thank you yes i look forward to yeah next year's yeah uh dabcon and coming to berlin it's gonna be at the same place again thank

you yeah so it's gonna be good it's pretty good venue all right enjoy the very stressful merch thank you [Music]