XMTP and owning your communication online

Transcript

GM GM welcome back to another episode of web3 Academy where together we're exploring Which web3 business models and Technologies are going to win we're here to keep you on the Forefront of web 3. I'm jay bird and as always joined by my co-host Kyle reedhead what's up Kai what's up guys today we have Matt from xmtp you know we have a lot of web 3 Giga brains on the show and I think Matt is just an internet Giga brain he's been in the internet world for a long time and he's trying to do something real big here which is disrupting or kind of changing how we communicate online how we message each other how we communicate with each other and doing this by enabling interoperability amongst everything that we do and this was a very very eye-opening conversation

really what he's trying to create here is a public good something that applications in web 3 and honestly Beyond web3 can build on top of and utilize and with that comes a lot of difficulties in how do you build a public good in a protocol how do you monetize that how do you make it sustainable and so much more and so we dive deep into all of these things and I just think there's just so much to take away and so much to learn from this episode the outcome of this if Matt achieves his goal and the team at xmtp achieved their goal is we will have full ownership of our DMS and we will be able to transport them across any platform so you won't get rugged by Instagram or Facebook as Kyle did years ago and you'll have full opportunity to control

your words that you're using which is just a huge part of what we're building in web3 so super excited for you guys to hear this episode with Matt Matt is the co-founder at xmtp Labs he's a Serial entrepreneur this is his fifth company let's just dive right into it Kai yeah I mean more than control I think what this really gives is the ability to communicate anywhere on the internet instead of it being segmented sometimes in Instagram sometimes on Twitter and sometimes on ubereats or wherever everything's all in one spot and it's just interoperable across every application and that to me is a little bit mind-blowing so let's dive into it but before we do let's take a quick second to hear from our sponsors the future of social media is here and that future lives in web 3 on top of lens

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with Chasm head to chasm.xyz using the link in the description and discover why top brands like a mutable Nifty labs and collab land are using Chasm Matt welcome to the show thank you for having me pleasure to be here we're really excited to have you today for so many reasons mainly because Kyle and I have been talking about the struggles within web3 and the lack of ability to do wallet to wallet messaging and that is I think a massive hurdle that will improve the space but before we jump into everything with World messaging and xmtp let's just start with your rabbit hole story you were telling us a little bit about

before we hit record how did you first get into web 3. so crypto being the term we used before web3 and blockchain and all that before that but I was introduced to bitcoin just through news stories early on and there was a few enthusiasts that I happened to know and got excited about it and one of which left his job in the White House to go work at MIT and teach about Bitcoin and that was the first okay I need to take this more seriously than I have been kind of moment but in 2017 in hearing through a bunch of other folks that were getting into it that I should pay a bit more attention went and read the ethereum white paper and was just thoroughly intrigued by this idea that you could have this trustless permissionless ninja value and that it

could be programmable that was kind of just mind-blowing and it was this idea that we were on the precipice of having New Primitives to build from in technology which doesn't feel like happens all that often almost if you think of like mobile the decade prior that that was its own new primitive or advancements in JavaScript which got us web apps that was an advancement but this one felt very transformative and I hate to say it but like then I saw cryptokitties and it was like it's the future of everything is I don't care how ridiculous it seems right now cryptokitties crypto punks but like the idea of a program being created that could Define scarcity and that I could

own these things and nobody else could claim to them and all this it just absolutely floored me and what could be possible for the future I wrote some I don't know 10 tweet tweet storm in 2017. you guys have to see this this is amazing and it can do all these incredible things but then obviously nothing happened in nfts for years really until 2021 and so got really excited really early on you know went and felt so compelled by it that I wanted to go and start a company around it just to be closer to it you know get closer to the metal you know learn from it which is what I did and then bear Market hit and that's a whole different kind of lesson so that company didn't continue on got acquired by Kraken but

we just learning so much like I've just been voraciously consuming this space since that first day so it's an exciting space to work in now you've been taking around with the internet for a long time have you not I think you said something about you were the 607th person on Twitter is that true and tell us that story a little bit well the idea is 607 I think the actual number of how many people were on there at the time was like less than 140 like this guy Sean Bonner who was in that early cohort I think went back and figured all that out yeah that was crazy I actually was like podcasting back in 2005 and the precursor to Twitter was actually like a podcast tool slash Marketplace called audio and the founders I know a glass

and at Williams and biz Stone they were all building this podcast tool so I was super into audio I would had my podcast published on there all this stuff and then I go to the first podcast convention and met some of these folks and was just kind of enamored by this but it's weird because a lot of the earliest folks on Twitter were people from the early podcast crew and that's just because we were you know hanging around on the internet with these characters that went and built Twitter and so one of my fellow podcasters this guy Derek is still a good friend of mine too today was like Hey I want to invite you to this thing it's called twttr and you text it to 40404 and I was like okay I don't even think I sent my first real

tweet till November but we're talking this was 2006. this was a long time ago but yeah I've been on Twitter for a long time it's still this love it or hate it beloved piece of my life that I can contribute so many things to before we jump into web 3 communication and messaging and xmtp and set some context there I've just got to ask more of a personal question is you mentioned that you came from a small town in America how does it a guy who comes from a small town in the middle of America with you know farming background in your family grew up to be so into Tech and take this path with your career of tech was it something that was in you from a young age like where did that come from yeah

that's a good question I mean tinkerer for sure always loved to build with my Legos so I guess there was like some you know building in there from an early age but I didn't really have say access to computers super early on we got our first computer that we owned like when I was in high school which was awesome and you know we set up an internet connection all that stuff but really it was like when we got cable internet which I think might have been my junior year or senior year or something like that of high school where it all started to unlock quite a bit more I was self-taught in you know Photoshop and web design and those kinds of things and but it was getting out there into these online communities and understanding

that the scope of the world is so much bigger I think when you grow up in a big city around a lot of people you can see possibility everywhere because there's just so many diverse and varied experiences that everybody has but you know when it's a small town thousand people in my case like Chicago was in close City by comparison like two and a half hours but I think I'd been there two or three times the entire time that I grew up and so you're just not exposed to those things so is the internet that really exposed me to the world of possibility and Entrepreneurship and meeting these people that all of a sudden I felt like I found my people they think like me and I hear all these wonderful things that you can do and Web 2.0 was just so creative and the sort of

fun that everybody was having with it was absolutely electrifying and so it made sense to get into podcasting early to just try some things out and do some design and you know getting my first company off the ground was all because of that it was just hey maybe there's something that I could go do in this space gotta attribute it to just the fact that the internet was a magical place back then to connect with people in any kind of Walk of Life or Community it was so cool I'm currently reading the book how the internet happened just kind of like doing some fun research on just like the stories of the internet from the early days and the one theme that I continue to see is that the main reason that people onboard into masses onto the internet was one to consume they wanted

to consume more content which we're already doing through TV and radio but now they can consume in a different way but two the main driver was to communicate they could communicate with others around the world for the first time yeah and so there was so many communication and forms and different platforms where you could just talk to someone and it was like communities came and just everyone was talking to other people from around the world it's very interesting and communication still today is one of the biggest you know features of the internet we have tons of ways to communicate and obviously that's the reason we Happy on the podcast today is talk about xmtp which is a new form or a new technology to communicate on the internet and before we get into that I just want to set some context and maybe try to understand your thinking

through this but when I think about the way we communicate on the internet right now there's a couple different layers there's the mobile layer of communication right so if you have a phone you can SMS and you can do iMessage if you have iPhones and you communicate that way and that's kind of for like your maybe closer friends slash family you have their phone number and you communicate that way then we have sort of like the app layer of communication which is like Instagram DMS is I don't know for me anyways a very common area that I communicate with other people around the world and it's kind of a social form of communication where the things you're doing every day your stories your posts it sort of like ignites conversation and so now I communicate with people you know that are less close to me right I don't even

have their number but I'm still communicating with them in the DMS there and then you have things like WhatsApp and stuff where maybe it's more for group chats or for businesses Etc why do we need another form of communication what was your thought process on that the existing ones that we have what do they have wrong what are their limitations and just curious if you could set some context in the way that you think of communicating online well exactly the reason that you listed off however many options were there to pick from to communicate on is one of the core motivations for building xmtp it's the idea that when we are communicating online we are entering a specific space like we're going into iMessage and the people that I can communicate there is just that specific

set of users and let's just say my neighbor that moved into the neighborhood who only uses WhatsApp primarily now I have to go off and pick an entirely different communication medium to communicate with them and then as you describe like I'm communicating with these online communities and I'm using Telegram and Discord and signal and all of these other Solutions it's that my online communication is just an absolute spider web of all of these different things and going further I don't own any of it I am not ultimately in control of those accounts in say the way that we are in control of our ethereum accounts it's the idea that you

know what I want to move from one app to another I don't have that ability to do so and then and you know taking it a step further as a builder there are all these things looking back to Web 2.0 that we can just take for granted you could totally take for granted that you would have some social login that would come with it maybe a social graph maybe some ability to re-engage with the person that is logging into your website and none of those things are affordances that we have in web3 like when you click connect my wallet all that exists in that connection is just my history of transactions and the ability to do another one you know maybe there's some additional data that's out there but if you're building something that I could

be benefited by having attention brought back to you it doesn't really exist in a meaningful capacity right now and so all these things boil down it's like hey we just believed that people should be able to own and control their Communications they should be able to pick you know which app they want to use for their communication and messaging but that doesn't mean that you're then pigeon holding into a specific set of communications but that the opportunity is there to kind of build on one big substrate for those Communications to be you know encrypted and and private and all done in a way where no one company controls say enough of that experience

where you know they can make some sort of unilateral decisions and change the way it all happens so those properties you know you might find individual parts of those properties in different apps and protocols and stuff that exist on the internet today but as a comprehensive one it didn't exist and so that's been our mission since day one unchanged and we continue to build it out with that premise I paint a picture there for those that currently use a phone or the internet we communicate on many many different channels and I think that this can get confusing I mean there's so many times where I'm talking to someone on like let's say Instagram and then I'm like but I'm also talking them over an iMessage and like maybe also on WhatsApp and I'm just like what

are we doing here let's let's just consolidate and move our conversations to one spot you know and like you said for the last four years I've been living overseas a lot in Latin America and they use WhatsApp predominantly when I came back to Canada I was fed up I was like why are we all using iMessage I'm like so annoyed what's happened so much better I had this like weird transition of trying to go back to iMessage now I'm back there because I've been in Canada for a while so you're saying a big problem here is like one we just have so many means of communication when we could just do it all in one spot there just would be different user interfaces for them right and you can kind of pick and choose your own but regardless they all work interoperability something we always talk about in web three and then

I guess the other big part of it when you say like own your Communications is if a platform goes away which I mean has happened you still can chat with the people right that you have on that platform if Twitter just leaves one day you can still talk to all the people that you have on Twitter just not through that interface you'd have to do it through another interface but at least your conversation are still there the connection with those people are still there and so those are kind of the two big things that I think you're trying to fix with xmtp is that correct yeah yeah that's really it and if they decide to do something with that experience that is just different than what you showed up for you know you think about how we're not exactly talking about communication specifically but like Instagram how it started what

it was in those first few years was just photo sharing right and what it has turned into is something totally different and so my choice is then to either say abide by those changes and continue using it in a totally different way or just I've got to go find something else but I can't bring anything that I've done with me so communication messaging is such a basic thing that we do that to feel like we have to be beholden to how a specific app wants to do something feels kind of antiquated in this day and age the other form you communication I didn't mention on the internet that is also very popular that we all use is email and

what you're talking about sounds very similar to email and I guess we'll get into what exactly xmtp is in a second but yeah in terms of features or limitations or whatever like to solve all the problems you're saying why don't we just use email email is amazing it is amazing as a protocol SMTP and all that has really stood the test of time and it has persisted as a primary way for a lot of communication to happen but there's a couple of challenges and they're all commingled one is that it is absolute controlled by spam so you have spam that probably accounts for I don't have the exact figures but it's north of 90 percent of all emails sent is Spam as a consumer if I'm using an inbox the amount of tooling and work that I have

to do to stay sane with an inbox and all that is crazy so then that actually generated the second problem which is that in the beginning of email you had a whole lot more mail servers you could run your own mail server you could you know send mail explicitly from that one you know you might have a buddy who's got a mail server and you're going to Route messages all through it it was kind of really interesting how decentralized it was but over time as this spam problem became worse certain parties you know Google Yahoo Microsoft via Hotmail and a handful of these others got really good at managing spam and adding all of these new features like calendar invites and

all this stuff and so inevitably what happens is you create these power Brokers who have a bit more power in the system because their experience is a bit better and we start to coalesce around those handful of providers well by now they've created a situation where if you want to send mail you have to make sure that it can get through Gmail's spam filter and Microsoft's filters and all those things and the best way to do that is to use those servers and so we've found ourselves back at this place where a wonderfully decentralized protocol and communication medium has centralized around a handful of providers and that's it and coming into things with eyes wide

open and saying that is not a future that feels like one that I want to be a part of got to find a different path right I guess to add to that too technically if you have a Gmail or a Hotmail account out you don't own that account and you don't own your messages because Gmail owns that now you can upgrade and get a pro I don't know what they call it but whatever the like higher tier versions of your Gmail account and you can like actually own your domain but for the most part most people are just using a gmail.com handle and yeah I don't actually own that so you actually do still go back to the same problems before myself included yeah yeah that's so funny okay well talk us through the idea of xmtp and feel free to go as technical as you feel you

need our audiences some of them are technical some of them are developers but I think a lot of them are more entrepreneurs and those building businesses and creators so using web 3 for different reasons so feel free to go as deep as you need to help us understand kind of what you're building here I gotta start this with using SMTP as our segue here what's the story of the name the name in coming up with the solution the thing that felt like it should do branding is something I love I love branding exercises and the one thing that I wanted to you know sort of convey with xmtp was familiarity if you knew the word SMTP but then you put web3 against it or crypto or whatever that maybe you could vaguely figure out what this thing

should be doing or might do you've never seen this before you don't know what it is but like do I think that it could be something about messaging or mail or whatnot probably you know so just however you could have that Nostalgia play in was the goal and I would say that it was some massive exercise and branding that took months to get to this point and all that but all that would be BS I literally looked at what are The Primitives here well it's okay male and decentralization but also there was another protocol years prior that was branded jabber but the protocol's name was xmpp and I was like What if I just put them together and I took my bags from this one and I stuck it on the MTP

on this one and then came up with the extensible message transport protocol and it all made sense right it all came together and so that's it can you also show what SMTP stands for for those who don't know simple mail transfer protocol yes okay and the other one was the extensible message and presence protocol which was a little bit different but these protocols were incredible inspiration like I can look at them and say there is so much good work you know standing on the shoulders of giants kind of thing so being able to take that just long history and try to understand it what things worked well what things could be improved upon that was a critical part of the path of building this thing out so what is xmtp essentially it is a protocol where

encrypted Communications can happen between say different accounts those accounts right now are web 3 accounts so I join and I sign in with my ethereum account for example that has that address that we see the 0x all of that and it's the idea that I could put in another address say my colleague like the his ens name even Shane mac.eth and send them a message and expect that that message would be encrypted so that no external party Beyond he or I would be able to read that communication and that it would get to its destination that somehow Shane would be able to read that

message in that Simplicity there's a lot that kind of expands from there which is well where does this happen you know how do you actually send this message or things like that and we decided early on that for this space to thrive communication has to be woven into all aspects of how it works if you think about your phone today and how much we take for granted push notifications and then we can remember that there was a time before push notifications on our phone it's crazy right but that is like when you think about when I go to use some dap for the first time let's say it's some like Ave

or whatnot let's say there's some critical information that Ave needs to get to me I don't care if it's a claim of an airdrop I don't care if it's a hey you're about to get liquidated there's information that needs to come to me and it's not native to this experience and so what we wanted to do was provide the rails that developers whether they're building some dap online or a mobile application or whatnot could add communication to their experience email text messaging push notifications anything that you could kind of value of words between parties that that be able to happen just as easily as adding any other package to your app or whatnot and

so if I go to let's say nft Marketplace and sign in that I might be able to send messages through that interface but the sort of key thing is that unlike the web 2 experiences and apps of the past where those Communications are siled to only that experience you're now sending and receiving messages as a part of this like sort of universal inbox that now gets to travel with you from app to app so if I then send a message to Shane and I'm sitting on you know an nft Marketplace but he happens to be say just using a wallet or some other app that he still gets the message that it doesn't matter what interface we're

coming in to or out of that these messages just flow and so it has to be so simple like we do one thing it's just there to send a message there's nothing else that's crazy about this thing but we wanted to make it so dang simple for a user to get on board with use that it just makes sense and for developers to integrate because that's how this works like this whole spacious coordination all the way down right and so how do we help users by just making it so easy to get messaging into any product possible and then how do we help developers by making sure that those users re-engage and all that kind of stuff so that's a very simplistic way of looking at all this but that's the gist if you were

using I don't know ubereats yet you were on YouTube or on Instagram and you were also trying to rent at your place on Airbnb and you know you were doing all these different things and you get messages on all these different apps instead of me having to open up an app go see if I have any messages there or maybe I have notifications on and I can see it I just remember to go look I can access all of these communications in any of those single apps right because they are all built on top I mean not these ones of course but web3 ones or eventually maybe these because they're all built on top of the same protocol and so regardless of what app you're in what you're doing on the internet you can communicate with anyone and everyone and they can communicate with you even

if they're not in the same app as you that's the idea here that's right and in each one of these experiences they can be filtered down if you start from a base level protocol of very open very extensible any kind of message payload can come into this thing front ends can make choices that would be best for their experience and best for their users and say maybe we only show messages from this one experience and maybe that particular experience is siled for that interface but what's neat about that is even though it's siled for that interface and focused on only that use case if the messages are sent over xmtp if I use another Mobile app all of those messages that would be siled I

still have access to so it's giving that ownership and control out to the user it's pushing those messages out so that I get to kind of take them where I want to right and so in order for this to work you need applications to build on top of your protocol to build those front ends to build the ability to actually go and send a message and read them kind of thing right you're building the underlying infrastructure of that whole thing maybe you can explain a little bit about how this works and again try not to go too technical here is this using the blockchain is this some other type of protocol you've made like how does this actually work and then I guess the other question I want to get to in terms of understanding how it works is if this was made in a centralized manner

so not as a protocol and you had people build on top of it you could just rug them and you could turn the protocol off you can do whatever you want right and so when you're trying to create a protocol where you need applications to build on top of especially in the web 3 space we want to make sure we're building on top of things where it's basically not possible to rug us this is why we love ethereum right versus like BNB or something like that and so just curious as you talk about this sort of protocol how is it not ruggable I guess so that others will want to actually build on it long term wow there's a lot to unpack here so not ruggable is the new term for decentralized yeah yeah you know so you get censorship resistance like rug resistant protocol is rug

resistant so that's a super good question and in that case let's kind of break down you know what matters most could I rug you and read everything that you've sent so far no not possible right so we everything is and then encrypted you are the one that has the access to the keys at the end of the day unless you hand those keys over to somebody else plain text for them to read as a third-party Observer within the protocol I can't see what messages you're sending that's definitely valuable the second is maybe there's a way to have a rug that isn't even about the underlying content but the content and metadata that could be implied by the things that are going on and so you know as you're communicating with other people let's be

real about so many of these other communication mediums they have monetized on metadata and who is talk talking to who and all kinds of other things and the goal that we have is to have as little metadata as possible about anything that's going on in the network we launched V2 of the protocol not a few months ago where the explicit goal was to have less metadata built into the system and so we as a third party Observer can't tell who's talking to who anymore you can tell things are happening and that's about it but you can't know hey Alice is talking to Bob in all of these places and so not being able to sort of rug you financially or exploit you in those ways that's another big important principle the other is

that the protocol itself be permissionless let's say an app rugs you they're like ah you know we're going to totally change the way that messaging works or whatever or maybe even take that feature out of the app they can rub you the app can rub you the interface can take that away from you but the protocol didn't and so you could literally write your own client and tap back in and get back to all your Communications and that's what matters right so that's already true today like the amount of xmtb clients is in the hundreds and not in the dozens or even one where you really have you know real diversity in that respect and the last is in say how the messages are transported and right now we're in this big sprint to get other providers up and

online so that xmtp Labs the company is not the one that has to be running the resources this is kind of the ultimate in centralization is when you have say one party that's running all the servers it's an explicit goal that we move away from that we don't want that to be the case we haven't wanted that to be the case but there are certain challenges that come with building this particular kind of network and one of which is if you wanted to be permissionless then somebody somewhere is going to come in with malicious intent and so you know just open sourcing everything and saying okay free for all everybody we care so much about this we say that what we're trying to contribute is a public good for the world and one of the things that

is a core tenet of being a public good is that it is non-rival risk meaning that my the in the network doesn't matter if I'm a good guy bad guy whatever doesn't somehow impede or impact somebody else's experience somewhere else well if you have a malicious actor that jumps into the network and just starts spamming everybody then they all have a bad experience and so we know that there is a path to this point where it's no longer dependent on any one company but that we're also not immediately opening up the experience to just you know truly terrible user experiences and things like that so there's this definitely

like a path like a delicate dance and a balance that we've got to work our way through but we have an entire group dedicated to that within the company we have wonderful advisors around all this stuff and it is a thing that keeps us up at night to make sure that we are you know constantly marching down that path because we don't want that responsibility and by the way I don't think that the developers building on this whom we are talking to all day every day would it all be interested in putting all those eggs back in one basket so to have that Progressive decentralization be a core part of our ethos has been very important great

explanation by the way but so you said right now the protocol I guess runs on specifically on your servers the goal is to make more companies or people or whatever run it on their servers as well so it becomes like more decentralized that's right what is the like incentive model for others to come in and want to run a server or whatever it is that they need to do to help you decentralize this protocol is it like the clients themselves who are like well if I'm going to build on this thing let's make sure this thing is decentralized as possible and so I'm also going to run a server or is there like a incentive model maybe there's a token I don't know but I'm just curious like what that model is to get to decentralization and why people would actually do it well I

appreciate the lead-in because you set up two core categories that we think about and I didn't even give you that the two core categories for that incentivization is intrinsic and extrinsic it's like am I intrinsically motivated meaning that there's just a reason that I want this network to exist and therefore whatever it's going to cost I'm gonna you know bear the cost of to ensure that it exists you know we definitely believe that that's a type of motivation that will exist in this network meaning that let's say I am a nft Marketplace and part of that core experience is messaging and enabling people to you know negotiate trades so because of that hey I want to make sure

that those users have a high quality of service and would be willing to say run some of the infrastructure to make sure that happens run the servers run the nodes and maybe that doesn't even say have like a break-even point well that's okay okay because all of the rest of the ways that as a business I'm able to sustain kind of all you know play a part in that equation as well and so you know having that intrinsic motivation is important because it sets up a sort of different needs and wants in the ecosystem that aren't purely economically driven which can have its own issues hey if all of a sudden you

know bitcoin's hash rate drops below a certain point that there's just wholesale servers that are getting shut down and that's true free market you know through and through but when you're doing something like relying on you know Communications it's kind of important that you have maybe other motivations at play so that's definitely something that is important to us now the extrinsic motivations the sort of token driven motivations all those things that's something we are also constantly working on too and something that at the very least ensuring nodes that are providing services to the network moving messages storing messages things like that that they are rewarded for doing so not unlike how ethereum has their block reward where you're

performing validation services and you're going to get rewarded for doing so the same kind of principle applies and also you know if you are doing things that are negative to the network let's just say that you are claiming that you're storing messages but it turns out you're not like knowing that you would have some penalty some real you know skin in the game to ensure that at the end of the day users that are participating in this network are going to get what they think exists which is the ability to communicate and so so there's all kinds of ways that we could head down a conversation about that all the levers that you could pull and things like that but at the end of the day it's about okay so long as there is a means by which the network is paying out to those validators those nodes

whatnot and there's a way to disincentivize them from Bad activity that's important the only other thing that I'll add in here is that having economic components be a core part of a communication protocol has its benefits in controlling for those spam scenarios too because you know this is definitely going to be a big and challenging part of what our path is and I'm excited about that I'm excited to kind of bring in the community and have lots of discourse around this particular subject because at its core I care that as an individual that I might have free access to some a level of of use you know and if you think about it like email well Gmail is using my ads to monetize

against me but at the end of the day I still get some free use out of that I don't have that same kind of interest in this case it's like could it be possible that the protocol could allow for some amount of personal use well then at some point you clear business use cases or or you could even Lop in you know spam into that you just have people that are sending lots of messages and maybe there's a reason to send those messages from one identity in web 3 and in crypto you have this particular concern an attack Vector called a civil attack which is like to fraudulently generate lots of identities to try and game some sort of system it could be for token

rewards it could be anything but you can imagine hey if I could just spin up a new identity for every message I want to send then maybe I never run into certain limits and things like that but if built into the protocol is some means of I don't know if it's reputation I don't know if it's just having a long live lived a relationship with an individual user there's probably a reason you might want to maintain a particular identity over time and that might mean that if that identity then wants to go and send a million messages that's fine but there has to be some sort of payment that comes along with it and in all of that case it just means that business users may have a certain amount of cost

associated with doing business on here maybe there's a payment for long-term storage or my archives or some sort of priority but at the end of the day all of these are little dials that can be tweaked we know that hey if we can dial up the cost that it might reduce on spam but it might also harm the user experience so we don't claim to know any of how these things are going to work out at the far far end of the day neither did vitalik when they got ethereum started but we're going to give it our best shot and we're going to listen to the community and we're going to bring in a lot of different perspectives we're going to figure out how to make it work so so it sounds like I mean one there's this sort of intrinsic value to do this which of

course especially in web3 we need a communication layer and we don't have it so I think you definitely have that intrinsic layer you're talking about and then the extrinsic side is to be determined sounds like you will use some sort of web3 substrate at some point and that will facilitate you know revenues and potentially fees Etc and you'll figure that out once this thing actually has the traction where it actually needs to be figured out from what I'm seeing there's over 180 apps that are already building on top of xmtp which is pretty incredible and I'm just curious how did that happen and like like what's your strategy there web3 just needs communication so is this all out of necessity what's your sort of play on that web3 does need communication so I

think there's just this general interest that has people looking for Solutions and when they come to xmtp.org and they see you know just how documentation is a product for us it's like we need to have the best documentation available we need to have great examples available so the developer can just jump in and get started when we hear stories of developers getting in there and in 15 minutes sending their first messages with their applications that's incredible and that's everything that we want to be able to support and so having that experience be just as dialed in as possible is critical to our growth and so part of that would be like hey we go to Every hackathon that we think would

be valuable to participate in because it's a wonderful opportunity to interact in real time with lots of developers having those boots on the ground going in there and seeing these are the challenges that people are experiencing these are the features they're gravitating towards these are the ones where once you tell them then they get excited about it but oh that means we probably need to do a better job at educating around that there's so much to be learned from there and then it's this amazing long tail of developers where maybe that's not their full-time job maybe they're coming into back on this fun project because it's a bit of a vacation for them but then they're going to go back home to you know their job where they're working at a big web 3 project and might take that to the rest

of the organization and say hey I hacked with this thing it was super cool let's maybe try it out for these other use cases so making sure that we are there and you know working with developers on a regular basis is important then you have these examples where we have this wonderful investor base that we brought on extremely intentionally because you could have the best technology in the world you could have the best protocol in the world but if you do not have the network to back it up then what is it worth right so realizing that communication is just as much if not more about Network effects as it is technology meant that having all of the right people on board that would be leaders in their respective communities

leaders in their protocols or be able to help bring this protocol and this message out to those communities is incredibly important and so when Through the Grapevine we hear that lens is interested in bringing DMS into their web3 experience that's a very easy conversation to facilitate because we can go to the folks that are building on and with lens and say hey we might have this capability for you and here are our principles and here are the things that we care about and you know as an example that one did work out exactly like that and so then lens protocol last year implemented xmtp as its secure DM layer and this is kind of where that last part

of it kicks in which is so much of what we talk about in web 2 was this like metcalf's law it's like the idea that in a network the use of it is or the value of it is proportional to the number of connected users well that's true and in the case of ethereum obviously it's longevity and some of these other networks is based largely off of just general usage but in communication it's a little bit different because what you're trying to avoid is what's called interaction failure it's that if I try to send someone a message and there's no one else on the other end then not only does that you know suck that I didn't get my message out there but it also means that I might be less interested in

sending more messages through that Vector through that path in the future and it can be uncompounding negative effect as opposed to just oh I didn't get my message out so lens is a great example of this effect that is called Reed's law which is okay proportional total number of connected whatever all that's great but within that broader Network there are sub networks that exist that if you were to kind of dial in on certain sub networks then maybe the users of those sub networks would have influence in other places and you can kind of build from there and so we have seen where lens protocol is its kind of own little ecosystem that has then started to draw in and create this gravity for usage of xmtp and where lens DMS initially launched as just

Leinster one of the clients that is built with lens having DM capability you know just last week we saw orb launch with their you know DM layer and we've seen DM's launch on other lens apps and we know there are more coming and that's incredible because now it means that within that Network there is a sort of Mass Effect there's a gravity to the use of the network in there and then we just find the next one right that's where the human element of this comes in it's like that's where we have to do a lot of ground work and try to learn where the patterns are coming from and my patterns I mean just like what people are talking about and what interesting use cases are emerging so that we can make sure that

xmtp can satisfy those use cases and we can build inside of those communities as well so it's a lot of work uh but it's worth doing and what this leads to is this exponential growth that we're all experiencing within web3 right now and why I think we believe that we're going to be at a billion wallets within the next decade or for example what you mentioned I think it was just last week launched DMS using xmtp and the next app that's on lens that wants to use xmtp and bring in DMS probably easier each time they don't need to hire developers to go build their own internal DM

capabilities which could take months even years they can spin it up real quick no it's just hey here it is yeah and having that credibility is pretty huge that hey this has been working for this community and it could work with others I mean how far we've come with it so far has been awesome but what you describe is this other sort of interesting Network effect that emerges from this it's just like positive sum game among the apps within this ecosystem hey if I'm off using WhatsApp to communicate that's a loss for every other platform we talk about like sort of monetary liquidity in the web 3 and

crypto sense this is conversational liquidity it's like when I have a conversation in this context that's being taken away by these other places and so the beauty of something like xmtp is that you could be a developer in some other far reaching Corner wanting to send messages to somebody and you may not necessarily have access to a lot of those people in your interface yet well that's okay because they're there somewhere there's a touch Point somewhere where they're seeing those messages and every new participant of the ecosystem a user adapt a wallet adds to this positive sum effect and makes sure that users can communicate with each other dapps can communicate with

users it's a really special thing that we can start to see emerge from it already I don't know if you started with lens but lens seems to be the biggest that is most well known that's using xmtp anyway which makes complete sense it's a social platform or the clients on top of lens or social platforms so in normal internet right in web 2 they all have DMS Instagram everything you can always DM in there so it's the ideal fit I'm curious like when you think of where communication goes in web 3 is it mainly in social apps do we start you mention a bunch of times like openc potentially and like marketplaces things like that do we start now having conversations in our marketplaces does everything almost become like a social platform or just a means of communication is it in the wallets like where do you think that we

start to communicate the most now as the internet sort of changes as we adopt web3 it's an awesome question and I could bore you to tears with a number of use cases that we could probably work our way through all kind of I'll hone in on just a couple and and the reason I'll do that is because there's a few examples where okay yeah we communicate on the internet today maybe we can even put a little link to our ethereum addresses on some of these apps like a Discord or something like that but what does it mean for those Communications to be explicitly tied to and say provided by your ethereum count not just a link or something like that and so one example would be like support where

today a support in web 3 is just downright scary where if you try to say anything on Twitter you're going to get replies from all these Bots with all these phishing links the moment that you log into a Discord the first thing is is the bot of the server reaches out to you and says we're never going to DM you it's like we're just setting people up for failure left and right and the reality is like some people need help sometimes I mean I've certainly been confused about certain things and you know God forbid then they go to Google where there's been AdWords that have been bought against you know some common things to then try and rug you so everywhere you turn it's just these landmines to walk around and it's not something that I think is going to bring that next billion users in and so

something as boring as a support address you know like when you write in at support worldofwarcraft.com or whatever it is that you might reach somebody on the other end that's gonna be really helpful and in this space what's neat about it is you know like last week we just launched our grants program and how to to submit to it is through grants.xmtp.eth and you send a message through any way that you can get to us over xmtp what's beautiful about that is as an end user I can go inspect that I can go over to ens I mean it's all composable but I can go over to ens I can look at the Block Explorer I can see okay when was that subdomain created what wallet is the controller of that if

I can trust the root domain of xmtp.eve then I can trust you know any of the subsequent domains that are created from there all the subdomains and things and we can Envision this world where you know support dot whatever.eath becomes a more common convention and that we're turning on our DMS as opposed to turning them off in some of these tools that's going to be an important valuable one and not just support but like a collector wanting to stay in touch with the creators that they're supporting either for whatever the next big drop is is going to be or maybe there's something special that a Creator wants to do with you know long time supporters all the on-chained data makes this so

interesting because you don't even have to have it based on who owns what assets today you could be like hey I want to get in touch with all the people that owned crypto punks at this block from two years ago and you could do that because the blockchain itself is kind of like the phone book and it's just that we've now kind of brought the phone to the table and rounding it out it's like you describe the the marketplace example well I can't tell you how many times I bought something on eBay and didn't message the seller weird questions random questions hey does it have this one thing or is it this one model year that had this old weird chip in it I actually did that once for a guitar pedal it's like super weird thing but no I needed to know did it have that one

piece in it and imagine that happening today where the level of ridiculousness that we have to do today to make that work like literally minting a new ens name that uses all of the characters to say does it have the Panasonic's 40 you know 96 chip in it dot eth and then minting that to whoever is selling that thing so that hopefully they're getting some alert that says you've got a new nft and look at that come on it's frustrating but everywhere we turn all we have to consider is that communication is such a core primitive to the way that we have done things on the internet since the beginning of the internet web3 doesn't have that in any sort of meaningful way today and so

we're trying to solve for that problem what does that mean in 10 years after this technology exists well it means that web 3 is more accessible to more people it's more friendly to more people it can be more trustworthy because you can know verifiably who you're talking to and it can mean that any one app can't rug us of that experience because we can just kind of pick up our toys and move over to the next playground so it sounds like xmtp is combining let's say all of your DMs your SMS your intercom which is like your support for any application all means of communication all goes into one protocol and can work with every application on the internet that's the future of this whole thing which is amazing number one so super cool number two what this makes me think

of is how the heck are we going to manage all of this all of these messages and notifications in one spot like I'm just trying to think of like even just trying to manage your own Twitter DMS you know once you have a few thousand followers on Twitter that's even hard to do and now you're combining that with all my support tickets and my Uber and my email and my whatever else is this this is a client-side thing this isn't a xmtp thing to figure out I think it's probably on the client side or how do you think through that yeah there's a lot that would be client-side and client-side assisted through all of these other kind of signals and client-side partially because one of the reasons that spam control works the way that it does say at a Google is because the messages are sent in to clear like

by the time Google actually receives that message they can read it and make a judgment call based on that well in this protocol you can't and so before it gets delivered the protocol is not making any determination about oh this said something about a prince in some far off land that's going to give you 100 no instead that will largely come into the clients but what's interesting about that is maybe we mentioned composability sometime prior now imagine that there's an application layer on top of the protocol that might do some things on your behalf might even have some AI in there to know hey you know if it looks like this then maybe send it over here but like as a user you could authorize some of the these additional tools and

services to help you with whatever your experience is or whatever your optimal experience is going to be but beyond that naturally this kind of thing will already happen you know if you think about just communication being woven in then you land on a site and maybe that has xmtp built into it but maybe those Communications are more dialed to that experience and that's okay because then when you pop back over to some Universal app now we have loads of wonderful on-chain data like tons of public data to call from to know how we might better categorize or certain kinds of information so it seems realistic to assume that we'll be able to sift through these inboxes a lot more

effectively than before I can tell you that if that's not the case then it will be with every single ounce of my energy to find a way otherwise because we were there before I don't like that state as it is and I don't want to sort of you know bring that back onto the world in a worse way way so I will certainly make it my effort to make sure that we have a very usable experience coming out of this as well you mentioned earlier that this is a public good that you're building and one of the things I find very interesting about public goods is the monetary side of it we're actually talking with Git coin right now about having them on the show to talk about this as well you mentioned that you have

investors you mentioned that you have your own grants program so you're obviously you've got your own ecosystem that is supporting you with monetary side but two questions here one how have you guys approached having the capital to have the resources in order to build xmtp and the funding for that and then what's the incentive for you your team these investors to participate in that totally well so a couple things about public goods a public is defined as something that is like we said earlier non-rival risks or non-exclusive so it's are not excludable your participation in it isn't somehow making it harder for

another person or that some Authority can't just say no you can't have that air is a public good this is kind of how it goes but so is a park there are extremes right where you imagine a park is a public good but if the entire city descended on that park for one period of time then yeah it's a little bit harder to use and that's where you start to enact certain things like yeah free and accessible and easy to use most the time but a couple of days a year we're going to host a concert there where we'll put up a fence and people that are coming in will pay money to be a part of that but at the end of that we're going to tear the fence right back down and the public can use that that space all over again and so National Security Law Enforcement

roads over-the-air broadcast television another great example where it's if I want to go buy an antenna for my TV I can and I can tune in to the local NBC broadcast it's coming off of a radio tower somewhere else and when I do that it doesn't make it harder for anybody else to get that same signal but somewhere someone is paying for that and it's happening because there's been advertisers that have put money into that particular station that are now then broadcasting that signal that I can then consume freely and paying for it in my attention and so I think there's a misconception that public good just means that it's just this thing that's going to be free for

everybody but that inevitably leads this problem of tragedy of the commons where it's just like you know imagine that same concert use case where it's okay great it's free for everybody everybody can come but then what kind of experience do you come into when you get there and it's probably a crappy one and so you know there will unquestionably be need to put in certain kinds of controls into the system to make sure that by and large everybody has a great experience and we want to make sure that that can be done in a way where it's not say expensive for personal use hopefully we get as close to free as possible but it's the use by some of those business use cases that help to maybe offset costs or whatnot so a token would inevitably be involved and the beauty of

a token in this case is it works a little bit more like a public utility where it's like hey there's a power plant somewhere out there and we're going to pay the power plant and maybe some people are paying for greater usage but largely you know we're getting service through that public futility and in our case the existence of the token will enable incentivization disincentivization and all of that how the company and say investors fair is on one hand there'll be some early portion of the token Supply that would be set aside and I know this is a big debate but I will also say that this is the kind of project that requires an intense amount of coordination that could happen organically but would take a really long

bit of time right and to get that Network effect to reduce that chance of interaction failure requires an insane amount of inserted effort to make it happen and so to have some reward at the end of the day for having put in considerable time effort money and all those things I think is a fine exchange at the end of the day we still have to make the dang thing valuable all the participants the investors is the project every app that comes into this ecosystem and so for us this is not some you know turn the thing on and all of a sudden everybody's doing great kind of thing it's going to be a whole lot of work all the way through it's a great explanation and I'm by the way on the

camp and I hate that so many people get so upset about business models and people charging for a technology and it's like yeah if not charging then we're selling your data for ads your choice you know what I mean but that's right since the beginning of the internet we've always sold our data for ads and it's you hate that yet then you also hate paying for a membership or a tier for a product these things will not exist if you don't pay for them or even if they do exist maybe like you said the like perfect combination of everyone coming together happens and it all of a sudden poof we have xmtp well xmtp is going to have to probably improve over time and how do you do that it doesn't happen if there's no incentive and so I hate that whenever we ask this question

the entrepreneurs or those that are running these companies they almost get nervous that they have to explain the way that they're going to monetize and it's like we need to like change that mindset of most internet users because it's like you're either getting ads or we've got to find a way to monetize this and so it's up to you which one do you want right so I appreciate the answer I think it's really great and so I guess just to take that a little bit further and just a question on that let's say you turn on you know some paid levels or something for whatever that is but there's going to be from what I'm imagining anyway there's going to be a bunch of people who are working on xmtp and are running servers who will be involved in this token so does the revenue model then go to a treasury or

something and then maybe all the token holders then now get a share of that revenue or they now vote on where that Revenue should be placed to improve xmtp like the protocol itself or and I know maybe you're too far out for that to happen I'm just curious as that turn into a Dao of some sort we're a little ways out from some of those having definitive answers there's a couple of things that I can at least draw us into though which is there's a couple of models that we can look out to one of which is ens where there's actual Revenue coming in from the protocol and heading straight into it foundation and then the treasury is managed by the Dow and then the Dow decides through governance voting where that treasury is being dispersed out to that is one model in the case of something like xmtp that

may be possible for certain activities in the network and things like that imagine if there's maybe some direct Revenue that can exist but if you're talking about just sort of Base use of the experience look at the complete farther end of the spectrum and you get to something like ethereum where the day-to-day work being performed by the validators comes with a a block reward and that is based proportionally to the say stake that you have put up in the system and so you are doing work and you're getting rewarded for that work and so in this case you know I see it as that could be the other end of that same coin that other end of the spectrum and in that world you know there is no sort

of place that ethereum is sending all of its tokens to whenever or somebody sends a transaction it's burnt now after EIP 1559 like that's just straight up burnt but even in that you're paying for it because when you Mint new tokens that increases the supply that's inflation when you remove tokens through burning that's deflation of the system and so if you think about sustaining something long term if those things can net out then that's interesting because essentially what's happening then is the entire network is getting subsidized through the entire Network's use all of the

transactions coming in you know they're not all paying into some sort of pool to keep ethereum going they're just doing that intrinsically through their activity in the network and then it's just the activity of the network that's the balancing effect of it all it's a homeostasis or a network that's right it's an economic homeostasis I think that's interesting too and so somewhere in between those two ends of the spectrum is going to net out a model that's going to look appropriate for our particular use case and hopefully it's a responsibility that xmtp Labs can very quickly abscond from to put that responsibility onto a community at large or delegates or whatnot feels like the right thing to do so as quickly as we

can get to that state I think we'll be in a better place right like how to sustain public goods is such a big unlock of web3 right I think like you said with ethereum like tokens allow us to create these sort of economic engines that can sustain themselves and you don't actually need a revenue going to certain people and so I think we still don't know the perfect way of that yet ethereum obviously being the leader and experimenting with that but anyway thank you for answering all those questions and sort of like diving into what's possible because I think there's many out there who are listening who may want to build a public good and a lot of people I think don't because they're like well how do I make any money from it right how am I what's my incentive model and so right it's nice to hear

like other options and ways that you can actually build this and be sustainable for you your business and and the protocol itself so really cool yeah happy to chime in on it I don't claim to know all the answers was like I'm a student of this space by anything it's like I think the most important thing that we can do you know being participants in this space is to remain curious way too many of us think that the answers are all there or that they have all the answers and whatnot and that's how you get into trouble right I'm gonna let you finish up with any additional things you want to mention about xmtp if whether it's like where developers can go to build maybe there's new things you guys are launching or just anything you want to update before I do that I'm going to do a quick show

for myself those that are listening if you're interested in trying to understand how tokens can sort of drive this sort of economic engine of networks I recently did a report in web3 Academy Pro and it talks all about the Dynamics of Ethan its tokenomics and explains all of this and kind of gives some insight into how other protocols can do it just something I'm super interested in but anyway if you guys are interested check out web3 Academy Pro and go to that report because it'll kind of get you up to speed on all this stuff but let's hear what's going on with xmtp if there anything that we haven't covered that you want to make sure that our listeners here yeah so xmtp.org is a great place to check out where to get started as a developer and things like that if you want to play around with it today then

if you have a lens profile jumping into Leinster or orb or any of those that's a great place to jump into xmtp.chat is a place that you can go to just fire up your account and get started by sending messages I highly encourage anybody that wants to send a message to I say galligan.eath which is my address if you do so rip my inbox and then from there like on the socials you know on Twitter or xmtp underscore a little annoying but that's what we are there you go there's so much that's happening we really want to be champions of the developers that are building on top of the platform and so on GitHub we have that's repo called awesome xmtp highly recommend checking that out we're just

github.comtp yeah just get involved will you guys be at East Denver we will have a handful of folks at East Denver yeah and a lot of the youth Global hackathons and will be generally around a lot of the major events through the rest of the year I love it okay let's wrap up with a quick speed round first question Matt what's an nft you'll never sell oh man well at this point I feel like I am definitely Diamond handing this guy back here this board a 3073 he's got heart glasses and a Hawaiian shirt and a orange beanie and I've grown fond of it since minting it way back when so so far I haven't sold it which I feel like is saying something so hopefully we can

dime in hand him for a while longer that's cool you've held that thing through it's been a tough one let me tell you you can tell he's lucky that the keys have been out of my hands or something like right you know a cold wall like it was like in the scary days favorite AI or web3 tool to increase productivity or tool that's had an impact on you really just chat GPT has been awesome you know using it to pair program or even learn how to program has been awesome because so much about learning how to program is being able to relate to the thing that you're doing I've had a really big challenge in learning how to program my entire life I could never quite get over that hump and just reading books or watching tutorials rails it was when I could come to chat

TPT and say hey this is a thing that I want it to do here's the logic that I know it needs to happen in and then it spits out the code and I can work my way back through it like reading another language or reading a book and saying oh I get it I see the workflow and it's been awesome to use as like a pair programming buddy I've loved that I love that concept I was talking to a friend who is using it as a pair journaling buddy with his therapy and he was telling me same concept right of pairing chat GPD to maybe your sounding board and I think that concept has so much application to so many different things that we're trying to learn totally we should try and do an episode where chat gbt throws out all of the questions the whole time we were

interviewing podcasting yeah okay last question if you had a billboard that one billion people were going to see what would you write on it it's okay to not have all the answers nice I like that like we have to be totally okay with asking questions and we have to be totally okay with leading from a place of vulnerability and being like listen I don't know but I'm committed to it I want to learn from it I want to learn from other people and other people's experiences because I think where we get into trouble and certainly where I have gotten in trouble in my experience in my life has been being the know it all are acting like I have all the answers and there's no wisdom gained from that so it's okay to

not have all the answers I don't know maybe sometime in a past life if I saw that billboard it might have jogged me a little bit it's incredibly courageous to have that view I love that I hope more people whether it be building a web 3 or whether any part of life that view can really lead to unlimited possibilities all right well Matt thanks so much for joining us today this episode's been longer than I think any of us expected but there was just so much to dive into and I think we all three of us got pretty excited throughout so really appreciate the time appreciate what you guys are doing over at xmtp we shout out to the whole team hopefully I will catch you in person at youth Denver one of the hackathons coming up thanks so much it was really fun thank you for listening

to web3 Academy we hope this helps you along your web 3 journey and if it does please share this episode And subscribe so you don't miss the next one nothing in this podcast was Financial advice crypto and web 3 can be risky you can literally lose it all in fact if you invest on account of what we say you probably will lose it all so don't do that in all honesty the point of this podcast is to remove the noise of markets and price and focus on utility and implementation anyway so you should not take any of this as Financial advice thank you friends and see you in the next one