ZKPodcast: On the Frontiers of Validation with Bison Trails

Transcript

[Music] welcome to zero knowledge a podcast where we explore the latest in blockchain technology and the decentralized web the show is hosted by me Anna and me Fredrik [Music] in this week's episode anna sits down with joe and aaron from bison trails they're a validator infrastructure company they talk about the latest proof of stake systems and what it means to be a validator in these systems this week's episode is sponsored by event horizon

event horizon is going to be hosting an exciting specialized event in one of the coolest venues in berlin on june 19th and 20th i was there last year and it was a blast this event is packed with everything you need to learn about how blockchain tech can impact the energy sector it features the people making this happen both from the engineers building the etherium based energy web chain and the energy sector innovators looking to bring this tech into their industry the goal is to explore how blockchain can change the way we generate trade track and store energy for the better if this is the focus of your work or a field of interest that you want to jump into or if you're just looking for a really good blockchain event to go to in Berlin you can use our special zero knowledge

discount at event horizon Summit comm slash zero knowledge I'll add the link in her show notes we are also giving away two free tickets so just ping us on Twitter or in our telegram channel with the hashtag event horizon 2019 for your chance to win these cool so now here's our interview with bison trails hey guys hey hi how you doing doing pretty good same here quite nice alright so I'm sitting here with the guys from bison trails today we're gonna talk a little bit about like validators and POS systems but why don't we start with quick intro to who you guys are and yeah

how you got into the space I'm Aaron Henshaw and I'm the CTO and co-founder of bison trails and I'm Joe la Luz I'm the CEO and co-founder of bison trails and bison trails is an infrastructure as a service company focused on block production validation infrastructure for participatory networks so networks like you know proof of stake networks like Cosmo and tezo's polka dot and deke red and well egrets kind of hybrid but a sort of all all networks like that they work really closely with protocol teams and help them in the early days of spinning up and running their test nets and helping them transition to main nets and

we work really closely with custodians exchanges digital asset holders so token holders enthusiasts entrepreneurs that want to run their own validators or block production nodes on these networks are you providing software that is for proof-of-work systems are you only providing software for proof of stake systems we currently do not and have no plans to provide mining software for proof of work we do offer some infrastructure for a proof-of-work networks like etherium right now for example but we don't offer the mining side of it we just offer the read write notes for things like layer twos and depths that need reliable infrastructure and you do that on purpose

you actually have purposefully avoided that part yeah I mean the the the hash rates and the economics around proof of work do not allow for cloud infrastructure or software to really help you in any way shape or form so you would just lose money and it it's like a very it would be a bad business proof-of-work miners are very specialized they come from bit Maine mostly in China and they're high efficiency and they do just one thing and it's there's no way to compete and it sounds like philosophically it doesn't fit with what you want to do anyway yeah it doesn't I mean when we started working on this that we kind of asked ourselves like where our backgrounds can align with the industry and where we can help the most and we have a lot of

distributed software experience an infrastructure experience and so building software for proof of stake and other consensus algorithms that are non proof of work make a lot more sense how did you get interested in blockchain I think like like a lot of the folks that we know in the Washington space were just nerds like that's the the best answer I could give um there's a bit of like a little bit more interesting backstory there so Aaron and I went to engineering school together we both studied economics together alongside engineering a lot of our focus was in behavioral economics and so when we started looking as nerds starting looking at the blockchain space we got really excited

because one it's extremely technical it's nuanced you know it's very very interesting from a technology perspective but also actually aligned with some of our interests around like game theory and behavioral economics and be real finance and psychology and so as we started digging deeper and deeper into the space we kind of fell in love with it and if folks do use like the term I fell down the rabbit hole which I actually kind of I don't really love it but the truth is we kind of fell down the rabbit hole that's so funny so yeah I definitely I definitely experienced a very similar thing kind of at the start of this podcast I think around the time that we started doing this was around the time I was falling into it um so we actually have a funny little backstory it turns

out what we just realized this past week we went to high school together indeed we did indeed we did and I we weren't in the same grade no we weren't but we weren't that far apart and and we went to a tiny tiny high school a really tiny high school in Montreal Canada yeah it was pretty wild actually I think you're the first person that I've met in in honestly in my life that I didn't know prior that like in the wild that I've met that went to my high school the same and I think it's pretty funny that we ran into each other here yes it's unbelievable yeah the best part about it was kind of like how you asked you know

I was like where are you from Montreal Oh school I've got narrow narrow didn't realize we're two greats apart yeah okay so I hear a little bit about like how you guys got into the space usually there's something else about what you just said that really resonates this idea of like falling down the rabbit hole but then also trying to remember like what are the what's the skillset that I have like there's all these protocol level things being built this cryptographers and those are not necessarily like feels a study that I had ever looked into before but what did I have what could I bring to the space in my case like I'd worked in sort of a more media informational background with my old company video path which was like

interactive video for content and now I make content yeah about this really exciting thing with you guys what it sounds like as you were you're so you're you've you've made startups you've done have you made startups we have yeah and you made startups together we have made startups together I love the way I'm saying made startups I actually really like it I think we're rolling with it I may continue to use that going forward to Aaron and I have made startups together we've made a few startups together we've been making startups together for like 16 years actually Wow this is depends how you count a startup but this might be the tenth startup we're building together or the third ends at what point it's an idea and what point is actually a start-up oh yeah

and so given that like you have all of this experience of building pieces of software what had you been working a lot in the open source space not really your more closed source we worked in ecommerce we worked in social media we worked in in online gaming like we did quite a bit of stuff and the thing that was always the same is that we always built all the infrastructure and all the software that we stood up and so we were heavily involved in the whole process we're both software engineers were both very technical and you know like what you said when we came into the space we were like we probably shouldn't be designing new consensus algorithms like

that is not where our skillset lies and we actually if we like reflect back and we're honest like we were really intimidated to get into the space at first and we like kept asking ourselves like what can we do here everyone so smart they left PhD is like what use could we be and a lot of the if you're trying to build apps or something like the underlying tech isn't really there to do it super effectively and so you could play with it yeah but and that those are the conversations we had were like it's not ready for consumer stuff like we can't build new ones like what can we do and no matter we tried actually I'd like to fight it we tried we thought about building an AI company or building something in the consumer space and we just like it was this like

rolling ball that we couldn't stop yeah and yet you stayed interested cuz that's funny cuz like I'm surprised at myself too like early on I had very similar feelings of just like not knowing where my place was and actually DEFCON 3 in Mexico I had such a head like this rollercoaster of emotion of like oh my god this is fascinating oh my god it's kind of disgusting and scary like it was full Lambo time right and it was like so part of it was terrifying part of it was awesome sometimes I was like I'm never gonna understand this stuff and even if I do like I'm not an engineer what what am I gonna do here yeah but I think that I think what you guys have kind of landed on is that there is there's like there's

things that are missing and in this case tools that are missing yeah for the entire thing to like really go forward and that's where you guys can actually use your skills because you don't necessarily and I'm curious to hear a little bit about this but like you don't necessarily have to be building like everything on chain Oh completely completely I also think like you know this idea you know and you touched upon it all sterile and air and touched on this like I think that blockchain folks that are in the blockchain space and in the crypto space there's a ton of folks that like feel this sense of like imposter syndrome in the space right cuz like you know there isn't that many amazing cryptographers there are there are some but because it's a job you know

a bleeding edge technology ecosystem it can be very intimidating to jump in and so that was very real I'm like that was a conversation we had and I think we were pretty nervous about it at first um but the one thread that has kind of gone through almost every company that or every project even that we've worked on it was we've always taken on pretty serious technical challenges and tried to make it easier to engage with a specific challenge and so I don't really want to get into like the backgrounds of like previous companies or previous projects we've built but that that's actually a thread that has been pretty common as a theme amongst like the companies that we've built and the

projects we've worked on it so I was like whoa this is super hard we need to make it way easier for people to do this and those people could be developers they could be consumers um that's that's taken form in different ways as you know different companies but that has been kind of a theme that we've seen and so blockchain was kind of ripe for that and you kind of talked about it you're like you know you could play with it it's not really ready for primetime but there is so much missing in between the protocols and the block chains that were being built and the folks that really wanted to use them so you know these folks were excited like we were excited to build on block chains and then we were like wow it's a real pain in the ass to build on the blockchain so

we've talked before about like tooling but I think usually we talk about tooling in the sense of like tooling for protocol level development or building depths but what you guys are building is it is it interacting directly with a lot of blockchain block chains or are you actually like building something that sits just outside it we are building something that sits outside of the block chains that create stuff that interacts directly with the block chains so like would you have to like did you have to become proficient in smart contracts we I would say smart contracts are something that like we have not had to become particular proficient and but

understanding consensus economic rewards like participatory schemes network topologies peer-to-peer protocols like everything on the infrastructure side everything that makes them tick we have had to become subject matter experts in yeah the the smart contracts side there are interesting product features that we can build with smart contracts we think as we go down the line but it's not something that we've actually had to spend too much time on yeah I want to kind of set the scene for what you're working on and so we kind of defined it a little bit before but you're focused mainly on at this point as far as I understand like providing tools for

validators well let's take a quick step back for our listeners like what is a validator and maybe also explain proof istake cool so what is a validator so I guess if we back up all the way we can start with like proof of where which is the way that Bitcoin incentivizes infrastructure and basically people create blocks and then they push them to the BOK chain and they get paid if they're the ones who create that block and so everybody is racing to try to get a block and that's why everybody tries to do it because it make a lot of money but there's inherent problems with that around alignment around speed there's a lot of trade-offs

and so proof of stake has emerged yeah so proof of stake really helps with speed and they're straight offs around security but it the hope is that it brings the adoption that people are looking for because like for example we saw it with crypto kitties and etherium like the whole thing just fell over because it couldn't handle it and so when is there going to be that mass adoption moment if the block chains can't handle the adoption and so proof of stake has emerged and what proof of stake is is it's a new way to incentivize infrastructure for block chains and instead of a proof-of-work where you have all these miners simultaneously trying to solve a hash function you have people that are

elected and didn't there's like many many different schemes but basically based on the amount of money that they put up they are promising that they will behave rationally and as long as they behave within the parameters of the network and are good actors they will get paid for being a good actor for proposing blocks for signing blocks for voting on them and that is how the network is secured so every block still pays a reward just like in proof of work and the actor you talk about is a validator yes and that actor is a validator yeah so that was back to the original question the actor is the validator and so networks are built on proof of stake networks are built on the backbone of validators and there are in some schemes twenty-one and in some

schemes there's hundreds and some schemes there's hopes to be thousands or tens of thousands cosmos is one of the ones that has recently launched and they have a hundred validators on their main cosmos hub chain and that actually has the opportunity to have like hundreds or thousands of chains that all have different sets of validators they could have anything from single validator to a few hundred and then you have stuff like polka dot they have a different scheme where they want to have 10,000 validators and then there's elections within each round to choose like subsets of those within different chains how grand is one that has a similar scheme to that so before we go too deep into exacts the exact

protocols say I want to be a validator what do I have to have to start I kind of have to have tokens that I could have stake in the very literal sense as like you are staking your you know value your value in the network and so most it's hard to generalize around proof of stake because there are very different schemes and sort of economic models and consensus mechanisms within proof of stake networks but for the most part the idea is like you put up money in some way shape or form some some form of value and you will be either rewarded or punished for being a good actor or a bad actor in that Network and the idea to be a validator is you are one of those

actors so you are the person or entity that is producing a block and adding a block to the blockchain or in some cases signing a block or endorsing a block or you know the sort of the other activities that involve securing the blockchain network but you you have to essentially put up value to be able to do that so that so there's kind of two pieces there it's like one you have to have some kind of value in the network you're working on and two you have to have a good understanding of what that actually means to produce a block and you have to have a good understanding of what it means to be a good actor and you do that well you need good infrastructure you have to be able to

spin up and run validation infrastructure and so that means running versions of the block chains that you're supporting in different roles doing it effectively doing it in a way that doesn't go down doing it securely where you're protecting the keys and the tokens that you own as well as other people that you're working with and representing so what we've defined right now is just like validators that there's three parts or three you kind of have said there's three things that you need I'm very validating those who things were entirely made up on the spot we do not have a list of three things you need to be a validator on like the wall anywhere or what I got from that was something

like you need to have some token you need to have some sense of what's going on and you need to be able to like maintain some sort of infrastructure and I do know this that like most systems have something called rewards they don't I don't know if they call them block rewards or some sort of reward violator reward and then they have something called slashing so let's define what those two things are as well yeah for sure so I would say the vast vast majority of networks especially public networks have block rewards and block rewards are the thing that a validator receives for being involved in the creation of a block and that can mean that they get paid more for creating a

block as opposed to like verifying a block sometimes it's all the same sometimes they just get money to show up and be part of the experience whether or not they have anything to do with it slashing is sort of the reverse of that which is what are the penalties for failing to perform your duties as though as a validator so if you do something that's like adversarial or the the biggest most common one right now is double signing so it can actually be done just as a mistake which is why you have to be pretty competent to be able to set these things up if you sign two blocks and submit them but so the same

block twice and you submit it to the blockchain like you will get slash significantly in certain block chains and there's some people that are trying to work on things that will like reduce those and not to go too far down the hole but yeah that's that's the definition slashing is the punishment swatching is the punishment and it is the disincentive for behaving poorly and for and it's the way that you insure people that you try to ensure people spend a lot of time building strong structure that protects against that yeah and I think a lot of the sort of the the reasoning behind Weiss you know slashing or disincentives exist is because of the negative effects they can have on future block production and can slow down a network to a halt pretty

pretty pretty badly if blocks are double signed and so that's why a lot of times I mean slashing is a pretty hot topic in the in the ecosystem as a whole some networks do is I'm at works down so is block rewards yeah and so but but I think like to to your point here those are the two things that you know that make up like the reasons why you would need you know to set up really robust infrastructure on a network as a validator and why being a validator is actually hard right one is the incentives and two is the disincentives okay and then I know that there's one other part to the sort of validation scheme that is like the delegation so say I own some tokens but

I don't have the time or capacity to set up one of these sort of like true validator nodes you know the the infrastructure I have bad internet connection or something like that I can delegate yeah so serve delegation is the idea of basically choosing someone else to represent you as a block signer on a network and so if I you know if I believe Erin is really good at his job and being a validator and I have some value in a network and I want to participate in the network I could say Erin I would like to you to take my tokens and essentially produce blocks on my behalf and not all networks have that set up but it is it is a good way to

enable participation for folks that don't have the technical ability to do it themselves okay and so this is where so that's that's sort of where I'm curious about what you guys are doing so you as I understand it are set you've created tools to help validators validate have you also helped create tools to help delegate delegates delegate I don't think they're called delegates Tonkin halters delegate are the delegate errs maybe they're delat maybe they're delegate errs that's that's actually a really good question tools to help validators validate often encompass some tools to help delegate errs delegate but I would say like we

aren't we haven't been explicitly focused on the experience for people to delegate um and there actually are some tools that some teams are building in the ecosystem that are like hey here's a way to easily delegate - you know this this cosmos validator and then there's there's a couple companies in the ecosystem that are doing a really great job of that and they're building some sort of like user facing tool non-technical user facing tools I think what seems to be happening is it's ending up in wallets or something like that like somewhere where your token holder it's on your phone you can see it your non-technical and you could just like press a button the places that control assets whether it's a wallet or a custodian or in exchange they are building as delegation interfaces and yeah like what I was saying is we really are primarily

focused on the infrastructure side and running the things behind the validators and not really doing anything with the consumer side say there was somebody who wanted to be a validator they owned tokens how do they approach how do they approach the process usually like do the protocols not release tools that would allow them to validate isn't that like sort of part of the protocols job so it varies widely and it's not even like a competency thing I think that their intent varies widely like some protocols believe that it should be hard and some protocols believe that it should be easy to be a validator and so based on the

opinions of the teams you can see significantly different tooling to help validate or spin up infrastructure and so the normal process for becoming a validator it's like I'm technically proficient I'm interested in this blockchain or block chains in general and I have a little bit of the token I'm gonna go join their public channels and people talk on discord or they talk on riot or whatever thing and you just go in and say like where's the documentation and then you follow you spin up a note but but who decided that it's like the protocols job to make sure that validators can validate I think one of the things we've seen we're seeing is like a variance in opinions on how easy it should be how hard it should be how technical it should be and I think our approach at least the way

we've we've seen it and and we come from a place of like having trying to build on a bunch of different networks like that's how the genesis of this company started like our company started because we're just trying to build and we're like damn this is hard and we've been engineers for 15 years you know for longer whatever professional engineers for 15 years this is tough and so like I kind of always asked like it's not surprising that protocol teams aren't putting a ton of emphasis on the tooling around like making it easier to validate and sometimes that's opinion right sometimes it's a protocol team is like you know what we want it to be hard we want folks that are technically proficient to be able to do this so like it should be there should be barriers to entry and then sometimes you just don't have the

time or the team and like they have so many things going on and they're working on really really hard problems that it you know it really becomes this question of like how far up the stack should a protocol team be building and like where does that sacrifice their promise to decentralization if a protocol team controls the protocol software and the stack all the way up to the infrastructure then you have to ask like is it centralized or decentralized yeah another question there is like if a protocol makes the validator software so difficult and they themselves know it super well do they not just put themselves and everyone who works very closely to them in a very strong

advantage and that's what that's what is has happened um if you look at like a lot of the top Kosmos validators and like not to say this in a negative way like they are a great team they've done a great thing but a lot of them are current or ex Kosmos or tend to remain employees and those people had a tremendous leg up on understanding the software how to build it and that's why they're at the top of the stake leaderboards I would just add to that and like to be entirely fair to the ecosystem that holds true for almost every single primitive state protocol that we work with and then we've seen there's very rarely the case at least like there are some validator teams that in somehow shape or form were connected to the protocol team early on like that it's I can't think of

one that doesn't have that and I guess I kind of hasn't sort of make sense it's like when you found a like when there were small companies social media companies a lot of the employees were the first users of them like the people who have three digit Twitter handles for mostly employees I don't know if that's really true but like you know it's you do get some benefits from being close to these early on and that's especially in like the protocol world especially in the fact that like these aren't vc-backed they're not gonna have equity that you're gonna earn your tokens will have value potentially but the other benefit for like working on these projects for baby crappy pay early on depending on how good the ICO and I guess is that you have access early yeah and you know I would also like to just

say one thing which is like it's very easy to look at the things that are happening now and be like oh this is why this isn't as good as it could be but if you like look backwards and look at proof of work and how far we've come even like having five people from cosmos become separate validators and having another ten non cosmos people run ten other validators that are pretty big is way more decentralized than having one or two companies make every single ASIC minor and having five mining pools make up 95% of the hash power but I mean it didn't start that way right like that was a process that got to that point and I think that's actually something I'm

curious about what you guys think like what is the validator community like right now do you think that they could become consolidated I mean so so well well we have opinions on these things I mean given the position that we're in we definitely have opinions on these things I I think there's two things that are super important in that question one it is so early in in any of these networks lives right if you're thinking about like you know any kind of protocol that we currently use on like Internet old internet you know web to whatever they're there those protocols are old they've been around for a long time so like I can't even imagine what like you

know HTTP was in year one you know and I might have been around though sorry yeah so it's really really early so I think like the ecosystems are mostly enthusiasts I think the validator communities right now are very good intended very good willed folks that are either you know like we said close to a protocol team and really excited and really excited about what's going on um but I also think that there is kind of like behind-the-scenes movement for some of these larger digital asset holders to

enter into the validator game and I think we're seeing we're seeing that now I don't think that's like something we'll see in six in six years you know I think it's something we'll see in like six to twelve months and we're seeing more and more of that and this what you're talking about here are like some of the big maybe institutional or someone institutional investors the whales who got in early owned a ton of token and now just set up like some personalized validator set up so they can take that money and make more with it yeah and I think you know poly chain is doing it on cosmos they're like the top validator if you include all of their validators and yeah I the I think the bigger thing is really not with the

funds and the large funds it's the longer-term when you think about custody and fidelity and Vanguard and the people that you know even like you know coinbase custody maybe like when they accrue 50% of an asset because they're the safest best way to hold it what happens when they run the validators are they're the ones voting and that's like a question that I don't have an answer for but uh so there's like a you know I'm an ethos question here of like are we actually changing the wave folks you know financial freedom are we changing the way folks custody is self custody a real thing like is that actually going to happen is our

blockchains and cryptocurrency is going to enable people to keep actually keep control of their finances and I think that that is still the TBD right it's clearly like a goal of the ecosystem there's a lots of folks that are trying to make that happen but we are seeing trends to kind of move away from that like big custody providers do exist and so when we you know the way we think about this is one of the most important things to make sure that you know it isn't just like one large custody provider that's making 50% of the decisions on any network is to make it way easier for there to be lots of people to make decisions on the network and that was again like not to you know push too hard I'm like why we started

this company but that was a lot of the mindset behind it was like if we make this easier more people will do it we can actually try and realize a true you know decentralized and self sovereign financial system so when you're building you're building the tools you're building some tools that may be a less slightly less sophisticated user could actually use to validate are you are you gonna maintain them like where the question I have here is like what are you exactly providing are you providing the validator node are you providing like a secure connection yeah so you know like the really like high high

level like marketing you sort of thing here is we provide a one-click deployment platform for validation notes and so what that actually means is you literally can click one button and quite frankly it's like click a button and fill out a couple pieces of information and you can run a geographically distributed cloud provider independent node cluster on any protocol that we support and so we support a few and we're making it a lot easier to add new protocols so as far as what that actually means that we provide we provide all the things you just mentioned which is like the node itself all of the security that goes around running a node all of the optimized

connect that round that revolves around running a node and then all of the sort of safety and redundancy and all the things you would want to make sure that you're hitting and you know the sort of hitting the two things we talked about earlier which is like you're getting rewards you're signing blocks efficiently securely and you're not having any downtime or doing any double signing or any other bad act or work in the network so that that's what we do and it's it ends up being you know leveling the playing field essentially saying to someone like you want to do this but you can't do it because you don't have a team of like six infrastructure engineers and a dev ops person and three

security people feels not it felt not right to us it felt like this should be possible to do for anybody who believes in cosmos or polkadot or you know etherium beacon chain you know why shouldn't I be able to take the forty eath that I have and sign blocks so that in you know in a funny way like proof of work and the big proof of work mining companies I've actually made it pretty accessible to like mine blocks like you can go on bit mains website click a button get a mining machine and plug it in somewhere let's just like ignore profitability right now like all the other elements that go into like writing proof work mine mines but they've made it easier and so people can actually

participate in the network's they believe in and so I can run a Bitcoin my mining machine if I want or you know some aetherium mining machine if I want because I believe in it and so you know we kind of saw I guess like some some similar sort of similarities there but we I mean did you want to be bit may well there's like three questions baked into that question do we did we want to be bit main definitely not we did not want to be bit man we're we're like for sure a mission driven company and I know that sounds like baloney but the truth is like we are we as individuals were mission driven like we got into this we didn't look at this as like a money-making opportunity we looked at it

as like how can we have impact on something we truly believe in it I mean it was an accident that we're here like we we were doing some proof work stuff and in our spare time we were playing around with these networks before we understood the implications of their inflation schemes and validation infrastructure we just like showed up in the chat rooms and like spun stuff up it was purely like out of curiosity and like nerdness so what you basically said those like if I want to be a validator using some of your tools I can do it and I don't necessarily have to delegate I could actually potentially validate on my own and I could get other people to

delegate to me I don't know if that's as easy but like it is do you think like is there is there any downside to having lots of validators well I think there's like some nuance and some of the consensus protocols don't really allow for more than a few hundred yet and I guess the I think like having less and having more deliberate ones and having more individual like sovereign groups working on it is to promote decentralization and so the more individuals that are separate that control decision-making for that individual validator and its delegation the more that you have out like spread governance and that you don't have these

big pockets of single decision and then also the geographic spread and that that increases the reliability of the network and the security of it as well because you won't have if you had every validator in one data center and then the power went out for that data center your entire network goes down and so that's like an extreme example or if that data center is assaulted by people with machine guns that go pull out the hardware keys to take the keys away and steal all your tokens you wouldn't want that so you want more what you just described is like the pros of having lots and ease of use but what are the cons like what what could be what is the argument against it and actually I I can

maybe hinted an argument against and that would be like because the validators are also sometimes like the governing bodies or they have votes they have some decision-making in like how the protocol is developed how certain decisions are made what's allowed was not allowed and then could there be a fear that like you'll have a lot of very untechnical people who are validators and voters looking at issues on Twitter not fully understanding them and making votes I mean what you're saying is totally possible right it's true I think that if I were to like take a step back and say like philosophically am I aligned with that I mean the way I think about this is that

the technology barrier or at least the operational technology barrier shouldn't be enough to stop someone from being able to make protocol or or decisions about you know something as important as you know transfer value or a store value Network um and so I think you actually have to disconnect or separate out like technical operational ability and understanding and I think those are there's tons of people that would have no idea how to operationally run a validator but understand the economic and you know societal impact of making a two percent inflation change on like the US dollar or some stable coin or some

other cryptocurrency and I think that separating those two out are very important it's they're not the same right so someone who's like validating is participating the network but you could actually understand these systems really well without knowing how to run geographically distributed it's super secure or redundant notes I see your point there so the idea here is like it might actually be really good to have a lot more participants who understand but wouldn't have the technical like actually like DevOps skills to run the thing you can tell me this actually like not every system has staking and voting as the same thing right yeah that's right so like there are there's different schemes for that as well what are you

seeing like maybe give me some examples where governance and like voting rights are tied to staking I mean like where you can't vote yourself nowhere like your steak is your vote yes I mean like cosmos works that way there's a lot of other networks that are coming out that work that way and what that means is you might be running the infrastructure on validator you might be running the infrastructure for me and so I'm benefiting from that by getting rewarded but when decision comes up in the network I can actually make a different decision than what my validator makes like I can override their vote so if I really disagree and I'm a major stakeholder I can promote that I also think like governance you know someone

said this on a panel I think it was Zaki from cosmos like the whole thing is an experiment and so like we have no idea what's going to happen and it's like very exciting and it's very hard I personally don't love to try to predict the future like it's part of actually why we're probably doing what we're doing is we're like agnostic to a lot of the things that are going to win because we just don't know and there's like a lot of smart people building a lot of really great technology out there I'm curious though like so with your system where you help people spin up validator nodes you call them validator nodes participation infrastructure just because they have different names like

on teos it's a baker on cosmos it's validator on life here it's a transcoder or an Orchestrator the participation it's like a blanket term okay yeah so you help them spin these these things up but like what happens to the voting so like say you're dealing with cosmos and you have you've like you've created the ability for me to participate but do you get the vote then or do I get the vote like what is there any sort of I'm just curious if you guys also do you enable tools to help vote so our participatory infrastructure passes voting rights on to the people that are running it we as a company have

no like control over that and we don't want to like some people view their participation infrastructure and their tokens as like their board seat on the network and so they take it very seriously and like an explicit ask of them is to be able to vote with full delegation we can actually make it so they can vote separately like using their cold wallet or their hardware wallet and they don't have to do it through us if that makes sense yeah okay do you I mean do you hold any of that I I understand that you provide the software but I'm just curious like where does the state gain do you own any of it you do you yourselves do get to be

stagers validators us individually or us as a company you as a company so as a company we work really closely with protocol teams like we're a very technical company we're heavily indexed on engineering in particular like infrastructure and blockchain engineering those who worked really closely with protocol teams I'm an our vision for aligning with protocol teams is actually running bison trails validators or participation nodes in each of the networks that we support and for us what that means is that we as a company are helping support the networks through participating and voting and all the things we also use our own platform to do that it's like a way of dogfooding

your product and I don't know if that's a dated term now I feel like my friend Jenna from melon port called it drinking your own champagne which was a lot prettier that is drinking your own champagne well I wish I could call what we have champagne I don't think we're there yet I'll just keep calling it dog food although I do like that expression a lot better you know it you know in all seriousness like we use our own technology to run our own validation and for us it's a way of like showcasing what we do to the ecosystem to the community we do a lot of work with protocol teams to help them in like very what we call non scalable ways so we like help them with like decision-making

around a token distribution or even like how should they be thinking about like transfer keys and participation keys like you know we've actually helped a lot of teams do those kinds of things some teams we actually run community notes for them so they'll use our infrastructure to run community nodes and we do stuff like give all of the participation rewards back to those open source communities in the form of like github bounties or you know issue bounties those kinds of things so some you are going to act as validators yes but you also like if I validates using your technology yes does that go into your validator pool no said separate yeah so you could run the zero

knowledge validator on cosmos and you wouldn't have to be hyper technical to be able to do that and you can zero knowledge could have decision-making on a protocol like cosmos or polka dot that you believe in without having to have a 10-person engineering team that's pretty cool would you do it Bala dater right here on this podcast episode but even if I wanted to do that what I need to have tokens yes in some cases you need as little as one token in order to set up a validator you need to usually like write some transaction saying I am NOT a

validator and that costs a little bit of token to pay for a transaction and it cost a little bit of token just like stake to yourself but in like fully delegated schemes then you can just get only other people to delegate to you you don't actually have to have any skin in the game as people refer to it wouldn't it be really cool if you could run a zero knowledge validator on a bunch of networks you cared about and your listeners because they believe in what you do and in your opinions could then delegate to your validators that is what I'm wondering to validators then become like branding plays I'm like how cool you are that's who you decide to

delegate to it could be how cool you are it could also be how good you are at making decisions for the long-term success of the ecosystem like that that helps do I mean like you know that matters right now there's so I know we just talked about this idea of like right now it's really friendly right now it's but it does seem like the validator scene and like being a validator it's very it's very unclear what those entities will be a lot of people are saying like oh it'll be like the mining pools but I think a lot of people don't that to happen do you think that does this do you think that like actually by

allowing more people to become validators you're preventing that or I mean if we have anything to say about it it won't become like the mining pools like our we are as a company trying to build against that we're trying to make it easier for lots of people to be able to do it and proof of stake as I mean I'm generalizing but a lot of prove mistake networks allow for that if you can actually if you have the know-how to deploy a validator in to be a validator so we're trying to bridge that gap you know obviously some you have to have enough stake to be a validator or so you know not all this isn't work for every network but but really we are trying to make it way more accessible that's

that's our our vision here it's like make it super easy for folks to run validation and run participation on these different networks so one of the things that I think has been brought up as its lately I don't know if it's controversial but like something that's not clear about like the validators behavior is even though I think we see a lot of altruism or like teams validators who are super positive they have delegate they have people who've delegated stake to them in order to stake it and really they're looking for return the incentives are make me money and if the validators can take up more share they are incentivized to do that and so it almost sounds like

there's forces working against each other there's like yes there's a health health of the entire network but like the day-to-day motivations are more like take as much stake as possible and also like eventually maybe not eat now but eventually could be also like screw over my competitors so it's almost like how could a validator actually be incentivized to act ethically in that scenario I think if their long-term players they are inherently incentivized to act ethically in proof of stake there's these like jump points where if you control 33% of the network and you would then be able to halt the network and if you control 67

you can like do all sorts of terrible things but 33% being the first barrier if any validator started to approach that in a significant fashion it wouldn't just be bad for the other people on that network it would be bad for them and all of the assets that they hold it risks like putting that entire network and all the value that it's created at risk so while staking does bring 5% or 7% rewards that's significantly less than a hundred percent of all of the value that you currently hold in that asset and so I think the network would self correct in a way where you would see people move off of and I you know I think that

there's like research and discussion going on in a few different validate a validation forums around this where disincentivizing like stake being accumulated too much behind one validator or in one region buy more penalties for a ton of stake going offline at the same time so alright you also with the 33% is that cosmo specific is that all be its its byzantine intolerant it's more general than that yeah but i think like i think you know they're they're you know there's that

game game theory again and like there's that behavioral economics again like coming into play right like we're very passionate about this but these are all experiments like quite frankly like a lot of these networks are still experiments and so what we at least will have fine have found and i think we'll continue to see this is that no matter there is no perfect system and no matter what unchained governance rules you make or changes we make to the protocol people will in humans will find ways to game the system and so there is like what i'm saying there is this a greater value right so it's like you can have folks start to approach like the dangerous levels of control over a

network but as they get too close to that they are less incentivize actually increased their AUM or increase their their voting power in the network and I'll say it again I think it's still a question of usage like if there's no usage then there'll be no value and the the biggest thing that proof of stake does is it uses economic value to protect the network and provide security and so if the barrier to someone buying 33 percent of the network and spinning up a validator and halting a chain is really really high like hundreds of billions of dollars that is a very secure network but if it's like it would take me ten million dollars in one click on some platform to like spend a validator and attack this network you

could have people from one network attack another network using like selling some tokens and then spinning a balladeer and halting it and then so if like that that would be one of the interesting like disincentives to make it easy to be a validator is that like it actually creates another barrier to be adversarial or be malicious in the network is that it actually takes time and effort to set up validation so like let's just say a large investor really was a was a huge you know investor in aetherium and really hated I don't know cosmos I'm not picking on anyone specifically I'm these are random examples they couldn't they then go and

use like a one-click platform and put a ton of money behind a validator and act maliciously yes but if the network was used a ton and there's demand for the tokens and there's ton of value behind it they wouldn't be able to because it's too expensive and I think that's what proof of stake really is and then and you know there's also on bonding periods and there's other like things that are built in to prevent like very quick switching of stake and movement do you think is that why there's often like validator limits early on or like at least as I understand it's not always like those are gonna be limits forever but they're like starting with limits I guess I don't know the answer to that from being honest I think that part of the answer is definitely around consensus and effectiveness like you

know I think the tender man stuff isn't necessarily proven past a few hundred validators and so starting 100 is super safe because they know that the latency will work like the the group of validators can come to a decision very linked within six seconds and post a new block so I think some of those numbers are really around the consensus I do also wonder like early on in networks I mean also when I was proof of work like the attack surface on an early network is super big right it's like so it's so much easier to ruin a young Network than something that's been established and has a lot of users and and with the validator I mean this is why proof of stake and releasing proof

of stake protocols has been sort of fascinating to me like the test nets and like what they the way that you have to imagine like rolling them out at first oh yeah and like we've we work really closely with a bunch of teams that are going through that process and it's cool it's actually been fun because we because we're sort of like protocol agnostic we've seen it happen on a bunch like so many protocol teams are really heads down building their protocol been building their blockchain and they should be we've given like across ecosystem advice and like thoughts and but but that's it has to be it has to be that way right like it's normal that those early networks are have very large attack surfaces and again I'm like getting getting that not to let Aaron you know beat a dead horse here because

he's gonna talk about usage again but that's the truth that's that's really what it is if people don't use the network's the value of the network isn't that high and then if inherently if the security of a network is tied to its economic value then it's it's not secure unless people use it like right now people it probably wouldn't be that hard to attack cosmos maliciously but just the real question is like why would you it would be hard because there's no liquidity of the token and there's a very long and bonding period and so they've taken a lot of steps to protect themselves like it would be really hard to attack Tasos because it's like almost 100 percent bonded like that's crazy but but how hard would would it be to attack cosmos versus attacking Bitcoin well

yeah way easier yeah I mean like you could ITC like buy if you had I don't know a few billion dollars you could OTC buy like the top five validators shut down the chain I don't know why you would do that yeah yeah it's you can't do that with Bitcoin okay so you have let's go back to the project let's go back to bison trails spinning up these validators validator nodes or participation nodes and giving a lot more people a chance to validate what about security on that front like where do you got do you must have you have the infrastructure set up somewhere how do you guarantee that security like what's what are you doing so it's a very

good question it's something that we think about every day I would say that we are like a security company first and were an infrastructure company second we spend a great deal of time taking care of the keys that we use on networks what we are very careful to do is not be custodial we are a non custodial solution so we don't take custody of tokens we do not hold them for people we do not like secure the tokens what we do secure is we secure the signing operations and the verification operations that occur through a validation infrastructure so we there's a lot of different schemes that exist on the so in in every part of these

conversations it's like every network is different so every network is different but generally speaking you want to use best practices that actually exists in industry right like for people who generate SSL keys like those certificate authority keys are like heavily guarded and heavily protected so we use stuff like Hardware HSN is called HSN so we use Hoshi corpse vault we've built wrappers around those things we have very strict protocols around what keys move in and out who has read access who has write access like how we partition things and so I guess that's like a lot to say that we just think about it and we take it very seriously because leaking key is especially keys that can create slashing conditions is another

attack vector and so if we are running a cosmos validator for someone and someone else gets their key they can constantly double sign willy-nilly and literally just destroyed yeah they would be slashed we do take like a modern approach to security which is that like no security is absolute and that you essentially have to build in as many layers as possible and as many and reduce attack vectors and certain you know an attack surface area as much as possible we work really closely with some incredible people in the security world that we've worked with in the past I won't call them up by name because they're security people so they don't like that but but you know the truth is like it's like Aaron said that's

something that we take extremely seriously and even though we actually don't have access to transferring anybody's assets ever from a security perspective we act as if we could and and which I was saying is like the philosophy is all about how much more expensive can we make it for someone to attack us and so we want people to pass us up to go to the cheaper option and that's always what we're focused on because there is if anybody ever tells you something is a hundred percent secure like they're definitely not in touch with reality but like it can't be because there's always something that someone could spend some amount of money to attack you in a certain way suffers your knowledge hello okay there's cryptographic things that are really

awesome but I mean from like a the way that we function in the normal world got it I actually was wondering now like do you open source a lot of what you're working on and where are you at actually in the project yeah so so we have been so we've been running infrastructure production infrastructure for a number of these different protocols I should say our production infrastructure but some of these protocols are in test net still and then for a bunch of the ones that are in main net as well live for many months with a bunch of alpha customers and then we're in the process right now of sort of expanding that out to a closed beta so folks that we've have known for some time were gotten to

know over the last few months that have you know a lot of interest in what we're doing and so we're kind of ramping up you know quickly but cautiously I guess is what I would go the way I would call it is like you know we want to make sure that we're being really really thoughtful about how we deploy in these different networks and are you gonna open-source what you're working on yeah so we're we're definitely going to open-source portions of what we what we what we're doing and this this comes back to like it's just a fundamentals like ethos aligned vision and mission for the company we do think that like anything that is I don't make me say it we have we have this we have this like really corny saying in the company where it's like if it runs on the node we

should open the code it's like so so so corny but the idea is that you know quite frankly that if you if we're if we're essentially running something on your behalf in any way shape or form it should be auditable you should be able to see it you should know what is actually running and so we think we you know we've built some really interesting intellectual property as a company because you know we're not a foundation or a nonprofit where I've you know a for-profit company but we also think that we should open-source a whole bunch of what we're doing and so we haven't open sourced anything we're still working on the strategy they were getting there we we've open source a couple of like small libraries and some scripts we've written we're getting there cool are you are you also doing like

would you need to do audits as well like is that part of yours like you are you getting checked are you yeah we have to undergo security audits for especially for certain customers we do regular pen testing with some companies in Europe and yeah we have to hold ourselves to a pretty like high standard of security and so that requires auditing and regular penetration testing cool what's the next steps for you guys I mean the next steps for us are just to like humbly support the ecosystem a guy I don't there isn't like a real true like next step like vision for us it's like we're continuously adding new protocols to the platform so we're working like

adding new teams that we work with really closely we're adding new customers as well so folks that want to run validation and so those two things take a tremendous amount of work we still truly believe that it's very early in this in this ecosystem and so we're trying to like stay humble stay focused build an incredible technology platform and build a really great product and honestly like build a cool team and have fun doing it to like that's those are things like we actually care about alright well thanks so much for being on the podcast thank you so much for having us really serendipitous to find out that we went to the same high school yeah yeah same here thank you very much this has been great very cool and to our listeners thanks for listening [Music]