Unleashing Web3: Empowering Users through Decentralized Networks - TOKEN2049 Singapore 2023

thank you for joining us bright and early I know it can be hard to wake up sometimes after fun crypto events so it's great to see you my name is Tech and salimi I'm the founder and general partner of a fund called Dao five and today we're going to have a really interesting discussion about users I think users are arguably the most important sector or subsection within crypto and realizing this future of a crypto native future that we all are working towards at some level and as we dive into this I'd like to turn over the the mic to our esteem panelists to introduce themselves and maybe tell us a little bit about their projects hello everyone my name is I'm the founder of Neo Neo is the first public blockchain to start from from China and now we know that doing crypto business in China is probably not completely legal so I moved to Singapore last year and during the Journey of the whole crypto um of the whole crypto sphere uh I have I have experienced a different terminologies to describe our industry from from Bitcoin industry to the cryptocurrency because the coin industry and then cryptocurrency and then blockchain and nowadays we call ourselves web3 entrepreneurs let's talk about map Street today yeah oh I'm good hey everyone I'm Eunice I'm co-founder and CEO of monad labs monad is a new evm compatible L1 we are focused on performance and accelerating ethereum through uh pipeline sorry introducing superscaler pipelining to the entire Tech stack um a little bit about myself I met my two co-founders keoni and James throughout uh well CUNY from my undergrad years at MIT I studied computer science moved to New York to work on Wall Street met James through several friends including keoni who worked at Jump trading I took a little bit of a detour away from Tech the tech industry to work in restaurants for a little bit so if you guys are from New York I know of Jean George I was you know in the the back of house working in the kitchen for a little bit just before the pandemic hit and then the pandemic hit so I was forced to kind of rethink a couple of professional career choices and found my way into crypto in early 2021 and when I had the opportunity to join CUNY and James to build monad it seemed like a no-brainer so monad is uh we started in March of 2022 and I'm really excited to be here hello everyone my name is Matt Harmon I'm the co-founder with Dr Lehman Baird of hedera hedera hashgraph I'm also now the co-ceo of swirls Labs swirls Labs is responsible for developing the software that hedera uses hedera is one of the leading layer one protocols out there I think what's notable about it is not just the technology which is hashgraph that maximizes performance and security simultaneously objectively it achieves the theoretical limit of what can be achieved in terms of security something called asynchronous Byzantine fault tolerance while simultaneously maximizing the performance which has profound impacts a profound impact on this on the scope and scale of use cases that can be used on the platform that's half the story the other half is the governance model so hedera governance model it's governed operated by a collection of the world's largest organizations these are uh Brands like Google and Boeing and IBM and uh you know nomura in Japan and LG and and some universities you know they're cross category so it's not a bunch of banks or Tech Giants it's across industry and they're geo-distributed they are hedera they are the governing body of hedera they run the network for hedera and it's focused on use cases that would be relevant to that caliber of organization okay amazing yeah one of the very interesting observations about this panel is we have three very different projects all from kind of different points in time in the history of crypto but all working towards this common goal of growing the user base and user acquisition bringing more people into decentralized networks so I think the first thing we'll talk about is just the total like a bird's eye view of the user Universe within crypto today there was a report that came out I believe last week from Henley and partners that basically said that the total user base of crypto today in the world is something like 425 million people so for those in crypto a long time there's been significant growth here but at the same time I think we can recognize there's a long way to go for this industry to rival a company like Facebook for instance that has over 3 billion users today I'd like to hear from each panelists about what do you guys think is the biggest barrier to Growing the total number of users in crypto today say another 10x um I think 425 million is already a lot my personal perspective of of the mass adoption of webstery probably is probably a different different from others I think at this stage at this moment web3 is not prob it's probably not for everyone we probably shouldn't be focusing devoting all our efforts to try to uh to fulfill the the dream the goal of mass adoption today or next year or the the year after next year um I think there's a simple equation action equals motivation minus resistance um to to drive Mass adoption we need to we need to have a scenario that users have a very strong motivation to use web3 I haven't yet to see it in in a large scale in some in some minor scenarios Webster applications are definitely better than web2 for example internet global payment it's difficult for some website to to work to sign up with Visa or Master MasterCard um and in many cases the barrier is still very high I think we need to have a a really easy and simple to use wallet to onboard Webster users today the friction is really high if you want to buy crypto for using your credit card it will cost you four to somewhere between four to twelve percent of all the money and it's also very uh prone to to hack so it's difficult for non-tech Savvy users to to maintain their wallet safely um so my advice or of my myself what I'm myself is doing is to uh service for those people who are really concerned about privacy really concerned about censorship resistance really concerned about the composability the openness of the network uh that's the audience that I'm working for yeah I would definitely agree with hongfei like we need a actual applications that touch upon the the frustrations that users have today and I think we're just at the start of seeing some of those applications come to life and to in to direct back to the questions that you brought up Tekken um I also think about 425 million users in crypto is um probably largely only within the centralized exchange space like I have some doubts that all 425 are transacting on chain and so that's probably one of the first hurdles like getting people who are just transactions transacting strictly off chain in centralized exchanges to on-chain behaviors so from that I think there's like two primary frictions the first of which is the UI ux component like it's no surprise that the barriers to entry from getting from you know the credit card phase to like having crypto in your own wallet there's just a lot of steps that are in place there and then secondly is the technology so if we were to um I think I also saw a metric with Facebook that there's around four million likes per minute so if we break it down to Second since we love a per second metric that's like 67 000 likes per second if we translate that to transactions 67 000 transactions per second is beyond what you know a lot of blockchains can support on an average basis um so that's another area that you know I think we as industry leaders need to tackle the infra attack itself well I think it's a combination of factors some of which have already been touched on user experience has to improve user experience is one of the largest uh hindrances to mass adoption in my opinion that's just one factor among many another one is that the risk profile of using a wallet has to improve as well I mean most people expect there to be a safety net for for everything and when it comes to self-custody of crypto there rarely is a good safety net if you lose your keys you're kind of out of luck and so we're focusing a lot in hedera and in swords Labs on something that we're calling decentralized recovery d-rec for short and it's a way in which we can ensure that if a user loses their phone they can recover those keys without having the risks that are typically associated with having a custodian of of those keys and and do it in a decentralized way so if there's interest in there just go to the website and you'll you'll see information there so we think that we have to make it more we have to make it more secure from the end user's perspective as it relates to being a self-custodian self-custody of keys we have to improve the user experience dramatically and then we have to ultimately get regulatory clarity now what's that got to do with the users themselves once there's regulatory Clarity in place then it makes it possible for really large organizations that bring huge numbers of users to the platforms to feel comfortable in going to Market with their Solutions and you know our platform is focused on those very large Enterprise or very large consumer focused use cases where there can be many many millions of people onboarded with a single application but the you know the regulatory environment plays a huge role in in the drag of the adoption of those types of solutions at the Enterprise level and so it's a whole combination of factor but they're all being worked and I'm optimistic that in the relative near term I mean well we've been doing this for a lot of years now right and I don't think we're going to go another 10 years without seeing that kind of uh adoption terrific very good points from all the panelists I I feel like there's no shortage of problems that we have to solve before onboarding the next 10x users or the next few billion um definitely idiot idiot proofing crypto there has to be good social recovery it has to be something that like your grandma could use without understanding how it works underneath the hood but also expanding the use cases that people would want to use crypto for so yeah thank you for those observations I think maybe now to double click on each of your projects could you tell us a little bit about what your target user base or what your addressable Market is in terms of users so that could mean things like is there an average user in terms of demographics that you go after is there a specific use case you're trying to enable and when and maybe let's uh answer this one in opposite order this time starting with myths sure so there's not a specific use case that we're focused on we are truly a general purpose public network we we're not necessarily known for a given vertical use case what we are known for is Enterprise in very large consumer focused use cases across the board so our I mentioned the governing Council the governing Council today I think we're 29 or 30 strong of those types of organizations that I mentioned earlier and they were intentionally chosen to be cross-industry they like I said it's not a bunch of banks we're not just focused on Financial Services although we have a number of banks on the on the net on the platform that are governors of the network and they care about stable coins and defy and cross-border payments etc etc what what we are focused on is enabling developers to scale to really high numbers of transactions in their Solutions at ultra low cost the average cost per transaction is a penny of a penny so a tenth of a cent USD and it's denominated in Fiat so there is no variation in the cost per transaction based on the value of the underlying crypto asset that being hbar in our case hbar so we have built a system a network and an ecosystem that is focused on Enterprise grade capability and solution and solving the fundamental problems that developers and entrepreneurs of all flavors care about how do they predict what their cost of goods is going to be for the use of the network for example um but you know the the range of use cases is is really quite Broad and uh we're we have the Good Fortune of being in a position where many of those large-scale use cases are already in the market on the platform today we're processing on average about a thousand transactions per second I don't know where we are today but I think we're we've crossed 19 billion transactions in total there's no other layer one out there that even comes close and so it's meant to be a solution that can handle the biggest and most important use cases and for Mona monank are primary users are developers as well as the community and we're hopeful to um have an ecosystem of excited developers who are enabled by some of the existing infrastructure that's already in place from the ethereum community since we are evm compatible to build applications that can be deployed on a high performance chain like monad for the betterment of the community like you know developers build applications that are exciting the community members benefit from it um I think I lost my train of thought uh one second can you prime me about that question again I'm so sorry that's okay just um what is the kind of the target demographics the target use cases of right right yes yes so I think day one um High Fidelity DDI is really where we're is seeing a lot of opportunity Defy is a really big vertical within the space and there's a lot of areas in which we can start reducing the gaps between the experience that you see within some traditional markets sorry some traditional systems such as like Central limit order books versus on-chain Central limit order books right now there's an insane amount of slippage that on-chain users see strictly because of the cost and timing of publishing on chain data so some approaches have been to have like a hybrid on chain off chain model and solutions are struggling to find on-chain only Central limit order book models and that's something that we believe monad is going to be able to support and then beyond that just like Manson hbar monad is also built to be a general purpose blockchain so we're hopeful to see an ecosystem that touches and captures applications across all verticals and maybe one day verticals that still that don't even exist yet today okay my turn um I'm currently doing two things the first is definitely Neo Neo used to use a completely different um Tech stack comparing to ethereum we have our own programming language we have our own VM we have everything the address format is different the two chain is different so we're trying to prove that we have a better system but definitely it turns out that ethereum has the evm based smart contract system now is a most prevailing smart object system so this year we finally decided we should build a evm compatible layer 2 for Neo so the evm developers can join our ecosystem and the main focus for us to differentiate ourselves is we we are focusing on solving the Mev problem or most specifically a bad Mev problem like front running because we have a unique consensus mechanism called delegated bft we have the technical foundation for transactions to be encrypted in the first place in the first block and then to be reviewed in the second block that's basically the the principle the idea how we solve the Mev problem we've already come up with a I'll say a decent solution and we are now engineering on top of it so that's uh what I do with Neo and the second uh thing I'm doing uh starting this year is I'm building a venture Studio to build more startups in in the crypto space or also maybe a little bit in the AI space so we'll be focusing on uh 2DS one is the digital the other is disruptive as long as a business is digital and disruptive we are very interested for example there is one of my colleagues sitting in the audience He is building a MC MPC based wallet I think MPC wallet has a huge potential to simplify the the user experience the security but today the the the Webster users are facing today we're also thinking about how to build a layer 2 system for for the Bitcoin my ecosystem which is a Hot Topic recently and other things like I'm also very interested in our ramp off-ramp I yet to see a a good solution for users to to do OTC or Fiat to crypto crypto to Fiat [Music] transaction very smoothly a low cost I haven't seen that so we I'm also working on a project to to doing that okay terrific three very different answers different use cases are going after it always leads to a good discussion um one thing that's interesting about crypto is at some level representing different blockchain ecosystems representing different layer ones you are in competition with one another in terms of uh this like zero-sum idea of you want tvl that another platform doesn't have or you're trying to acquire users from another ecosystem but at the same time fundamentally we're all very much on the same team and what we're competing with is both the Legacy Financial system and I suppose like centralized Network infrastructure that it forms the internet today that obviously leads to problems like Central censorship resistance amongst other things so asking each user to be an idealist again like remembering that first time you got into crypto what do you think are the most important value propositions to users both in terms of Builders and everyday people that like your pitch or your call to action for them to use decentralized infrastructure instead of the Legacy system so a little bit of a broad idealist question but it's always fun to go back to First principles and maybe Eunice will start with you if you're up for it all right yeah um yeah I think when it comes down to it again like we need to be user-centric and user focused um so what we need is a platform what we need is infrastructure in general to support like um applications that do require performance and so kind of going back to what I uh mentioned before monad is introducing super scalar pipelining across different areas of our Tech stack and so I'll just go through that briefly because I think this is important in understanding how monad specifically is going about providing additional like execution capacity on our blockchain and so the first layer is within Brock block proposal itself we're pipelining the consensus mechanism the second piece is staging block consensus from execution the third being pipelining transaction execution via optimistic parallel parallel execution and also pipelining State access with a new custom State backend that is um really specifically performant in retrieval and storage of Merkle tree data all of that in place allows us to to drive closer to an efficient Frontier with where software keep sorry where Hardware capabilities are and just pushing the balance of the software pushing the bounds of um you know the oh gosh I'm I'm missing the words here but expanding the bounds of what is possible on chain um the hopefully do you want to go approach um I I think payment is probably the Gateway the gateway drug the the the red pill for the ordinary users to to experience the power of beb3 once you um you used like usdc or usdt to pay someone in the uh in in another place in the world in seconds the experience you you will never forget um and also I think payment is uh is a meaningful action that uh that occurs every every day in your everyday life so I'm thinking that we need to have a really good wallet to onboard users to to lower their friction or the cost for for them to buy their first crypto and they encourage them to use a stablecoin or cryptos to pay others or to transfer money to others these days I do not pay my employee or my colleagues with any Fiat Everything is Everything is crypto based and I it's a it's a nightmare before I shifted to pay them in in cryptos and now life is much much easier for me I think payment is uh it's definitely the the gray heel a great uh the thing we need to pursue so I have several thoughts um one I I do think that the most important largest use cases are going to be multi-platformed right so I in some sense yes the layer ones are competing with each other it's also the case that when it comes to deployment of the largest Solutions it's not going to be on a single layer one it's going to be cross-platform just because the whomever it is that's going to Market with that solution can't take the risk of being bound to a single layer one platform so we're going to be cooperating for a long time to come and at maturity they're going to be half a dozen or so layer ones they're all working together for those Solutions then outside of that I think that the the migration from sort of web 20 to web 3-0 is going to happen when the end users don't even know that it's happening uh the the as long as we can provide a good value prop to the the companies that are Building Solutions in some way that it improves their top line or their bottom line one or the other then they're going to go to market with Solutions and success means that they're end users don't even know that there's a layer one under the hood right it's just transparent to the user we're we're Plumbing we provide Plumbing in an infrastructure we shouldn't be thought of if you have to think about us it's going badly it's not it's not working right it's a pothole in the road you don't want to think about it and so I I think that uh when it comes to retail uh use cases then the user of course is Paramount and you've got to think deeply about the user experience and what the value prop is but I expect that the real adoption doesn't happen there it happens behind the scenes in the large-scale solutions that are going to Market by the existing large-scale web2o players and uh and you know whether that be in ad Tech or or in Rewards or it could be you know preventing double spins enabling new categories of solutions like preventing the double spins of carbon credits and offsets it's a natural application of the tech uh so it's it's that where I I think that we move from web2o to web 3-0 okay very insightful thank you for that um to shift gears a little bit we're going to talk about everyone's favorite uh topic regulation and I think it's safe to say the past year there's been a lot of regulatory uncertainty and kind of regulatory enforcement taking place throughout the industry um I'm interested in I guess the risk we have as a space is if we don't take proactive measures to self-regulate or just ensure best compliance and best behavior within our reasonable means we open ourselves up to overreaching and potentially dangerous regulation that stifles growth and it limits our ability to operate in crypto so I'm curious from each panelist just philosophically what do you think is your responsibilities or or measures that you need to take in terms of ensuring good behavior within your ecosystems and projects yeah just uh what do you think are reasonable steps you need to take if any to ensure good behavior and then kind of prevent bad fraudulent actors within your ecosystem um I I think that's a that's a very complicated question with the Venture Studio I'm currently uh setting up I think the the first step we need to do is to uh talk a lot with our legal advisors so they ensure that from the the token design the whole token economics from bottom up is is compliant to current SEC rules uh Hong Kong SFA rules so that we were not we will not be regarded as a security in this in those jurisdictions one of the key element is the network or the token distribution need to be very decentralized which also Echoes the the ideology of uh of blockchain of cryptocurrencies so um I I think um to to meet those regulatory requirements and also the the spirit of uh of the blockchain projects I uh decentralization is or at least decentralization after a certain point is is the is the key yeah that's what I'm that's what I'm looking for sense so my night is built it will be built as a censorship resistant blockchain so you know based on that definition anyone can participate on the network and that includes any application being deployed on that Network so we can't necessarily stop Bad actors like there are Bad actors there will always be bad actors but we what we can do is educate users on how to best protect against that um and that maybe that's a combination of two things one is to introduce developers on how to write safe robust secure code not take any shortcuts and then secondly enabling and empowering users to understand how to actually iterate in sorry interact with web3 from you know identifying how to confirm transactions using some of the wallet uis that we have today or however that that may transition over time um yeah so I think the biggest thing is going to be education like we cannot on a foundational level um sorry the blockchain itself being censorship resistant can't not can't can't prevent Bad actors but we can do our best to equip people in the ecosystem so we make a clear distinction between the ordering of transactions and the services the the native services that do that directly and everything else above that text you know higher up in the tech stack and we view ourselves as uh the equivalent of the telephone system the networks and the cell phone networks right it's at that level of infrastructure that we're providing value and so the goal for us is to ensure that that level of infrastructure is secure and that means as as you've already uh noted you have to prevent civil attacks you know you have to be decentralized in the uh it's a proof of stake for us we're a proof of stake uh solution and therefore you have to have broad decentralization of the tokens now we've taken a step that is unusual in the industry in that we know who all the node operators are we do not today allow Anonymous uh node operators and the reason for that is because fundamentally in a proof of stake solution there are two ways to provide security you either know everyone that is running a node which fundamentally eliminates the opportunity for civil attacks or you make sure that the token the market cap of the token is high enough and the distribution of the token is Broad enough that becomes practically impossible for a bad actor to buy up a third or more of the tokens so we've taken the step of taking it slow the organizations that I mentioned the the Googles and and Nemours and and Deutsche telecoms of the world are trusted Brands it doesn't mean that we trust any single one of those organizations not to be evil just the opposite we trust that the group of organizations together provide the checks and balances on each other it is a decentralized governing body but we know who they are and so that that provides a level of security over Anonymous nodes where you really don't know who has control over the simplest of actions or activities that is just ordering the transactions in the network so um that that's where we focused terrific yeah to both uh Manson down phase point I think decentralization is such an important component of any analysis in in being regulatory compliant and um Eunice I strongly agree with the point that we have to mostly change the culture of participating in crypto more responsibility and autonomy on the user to do your own research um but also uh just like the availability of better code audits code auditing firms just steps we can take to make the code as secure as possible I think just changes kind of the culture of approaching the space so we're out of time today guys but thank you so much for joining us and thank you to all of our great panelists maybe a round of applause for them they did a great job