Mar 27, 2024

Francisco Agosti, co-founder of Tanssi and CEO of Moondance Labs, joins "First Mover" to discuss the challenges developers face when building blockchain applications.

Video transcript

Well, are you trading meme coins? Are you interested in meme coins? Not really, I'm more interested in the fact that like it seems like we're visibly out of this bear market that has lasted for like 2.5 years, which is, which is good for everyone, right? Uh Regardless of whether it's manifesting in the shape of meme coins or not. Um But I think it's the beginning of the next cycle, right? For sure. I'm really excited. Life is always so much better during a bull cycle. Yeah, I mean, there's trade offs, right? Because now like in the bull cycle, you'll start to see so much noise like everybody thinks they're like the next, I don't know what like everybody can raise money. So like the one thing I did appreciate about the bear is that like it's legit people, right? Francisco, Agusti. Welcome to first mover. Thanks a lot for having me. It's a pleasure to be here. Then I invited Francisco to first mover because we often talk about the challenges facing users and getting mainstream adoption in this space. But we don't really talk about the challenges facing developers. It's not easy to build Blockchain applications and maybe that's why they're not easy to use. We're still in the very early days of this technology, smart contract development, scalability fees and interoperability are all challenges being worked on by today's developers. So that when and if a mainstream audience is ready to use these products, it feels as easy to use them as it does to send an email or open up Instagram app chains are becoming more and more popular. These are application specific blockchains that are specialized. So unlike public blockchains, like let's say Ethereum that supports many use cases. App chains are for a singular use case developers using app chains can customize the environment to meet their needs, eliminating common challenges faced on multi app platforms. Besides customization features, app chains offer greater speeds and lower transaction costs. But there are solutions out there like roll ups that are similar in an environment where smart people are creating more and more solutions to the challenges faced by web three developers every day. I wanted to know what makes app chains stand out, do they present new challenges for developers along with their features? And at the end of the day, how will they make the user experience better? Francisco is the Ceo of Moondance Labs and co-founder of TC. Moondance Labs created TC. It's an app chain infrastructure protocol and they just raised $6 million in a funding round. He says that app chains address common layer one challenges improves the user experience and will eventually enable a cloud like model for blockchains. Let's take a listen. The protocol is presented by the Stellar Community Fund. Accelerate your web three project with cellar funding. Let's talk all about money because during the bear market, it was very hard to raise money, but you did so successfully with Moondance Labs. This is the team developing the TSI APP chain. You recently raised $6 million to expand the protocol. Talk to me about what your priorities are for this capital. Yeah, so we we just recently closed around which was great. Um The capital will be mainly used to to scale the team, right? And to accelerate the development of the protocol. Um we're looking to launch Main net in in summer. So we're looking at like August slash Q three of this year. And um yeah, I mean this, this, this funding is going to be crucial for us to, to reach main net and to just accelerate what we're building. Um Yeah, before we started this interview, we were talking about raising capital, raising money and it always feels like it's a little bit easier during the bull market. We get these headlines of start ups raising a lot of money, but we didn't see that during the last bully I sorry, during the last bear cycle. How hard was it for you to remain afloat and continue to raise funds during the bear market? Yeah. It, it definitely wasn't easy. I mean, the first round, we raised it approximately almost 12 months ago. So like we closed the round in like May of 2023. Um, that was like in the heart of the Bear. So it, it was definitely more challenging. And even the second round, we started it towards like the end of last year, which was, it was still the Bear market, right? If, if anything, we kind of closed round now that things are starting to pick up. So like when I was closing the round, people were starting to reach out to me like, hey, is there still space can, yeah, can I invest, please? But it was already towards the end. So like we did have to go to the the bulk of like that, that those raises in the bear market. It's definitely not easy. I think investors are just way more kind of um they, they put a lot more due diligence, right? Especially into the teams. Um They, they put a lot more emphasis into like the fundamentals of the project, the token economic model who's building it? Are these founders capable of building something that's gonna last the test of time? Um So yeah, it's definitely not easy, but I think it's also more rewarding right? Where you're, when you're able to, to raise capital in difficult times and you get like a head start, right? Because you, you're able to get a head start and other people that are gonna then raise like 1215 months later where, where you already have uh several months building going through what you went through when you hear about a company or a protocol that raises funds during a bear market, do you consider them maybe more legit, knowing the due diligence that would have happened, especially in the last bear market? Given what happened with FTX? I mean, it's always difficult to generalize and I don't wanna like, I don't wanna take away credit from teams that do raising the ball because it's not, it's not like raising is easy regardless if it's a bull or bear. It's, it's raising is definitely like not, not an easy thing to do. But yeah, of course, there's respect for, for teams that are capable of pulling it off in a bear. And um it's like what I said before, right? You, you tend to appreciate these people that are there with you in the trenches, regardless of whether they're competition or not. You, you have to appreciate the guys or, or, or girls that are there like building where, where, where nobody's really believing you. So, so yeah, there's definitely respect. All right, let's talk about the 10 C protocol. Now, talk to me about your mission. How's it can help developers deploy app chains? Yeah, so 10, you can kind of think of it as an app chain infrastructure protocol, right? So uh we're building something that will make it dramatically easier for developers to build their own layer ones. Um You can kind of think of TASY as a layer one itself since, since it is a layer one, but it's kind of a layer one to help deploy other layer ones. And the whole context of this project is that me and my co-founders, we were previously on the founding and core team of Moonbeam prior to starting TASY. Uh so moonbeam kind of became the EVM environment on polka dots. And it was actually through the process of building moonbeam that we that the idea for Tasy happens. And as a team, we just experienced firsthand, just how difficult it is to build a layer one, right? You have to take care of so many things ranging from having to bootstrap a validator site, finding out how to incentivize them, then you launch the chain and you realize how much maintenance and infrastructure management goes into it. You need things like wallets, block explorers, indexers, oracles, bridges, um R PC end points. So there were just so many variables involved throughout the deployment process that ultimately resulted in a time to market of like 12 plus months, right? So in general, we just thought, OK, the developer experience is not good, there's a problem to solve, right? And we started speaking to teams on polka dot teams, building layer ones at polka dot cosmos avalanche subnets and pretty much every single team we spoke to, told us they ran into the same issues we did. So after having dozens of conversations, we were like, ok, there's a problem to solve and that's really when we went all in on, on town. Yeah, tell me a little bit more about those conversations you were having, what's, let's say, the major challenge for developers who are attempting to build out layer ones right now. Yeah, I would say one is definitely security, right? I mean, as as a layer one team, one of the biggest responsibilities that you take on as a development team is bootstrapping the security of your own chain, right? And that's really not like a trivial problem to solve. Um polka dot like polka dots uh kind of value proposition is in part shared security but the developer experience of subs trading polka dot was was not very good anyway, so like beyond that, it was still very difficult to get started. So I think taking that first step is is not easy, right? Versus just deploying smart contracts on something like Ethereum where you're being essentially secured by the theory of network without having to bootstrap a validator set yourself. So that already in and of itself is a huge barrier of entry. Um And then after that, you know, if you manage to like get past that uh maintenance, right, you have to like maintain the chain and then you realize, OK, now I need a bridge, how I how do I connect to Ethereum or these other chains? Uh I need to index my data of the on chain, right? I need an oracle, I need R PC end point. So there's there's all these like infrastructural components that are just inherent with, with running a chain, right? So all these things, it just kind of they're all deterrent for developers, right? It's much easier to just deploy a smart contract where all these tools are already readily available, right? You have chain links, you have ether scan, you have all these great tools for for available for the developers. So I think these are the the barriers of entry that that we're trying to solve within taxi and there's other competitors, right? There's roll ups, there's layer ones and there's obviously tradeoffs between them. But um yeah, that's, that's another topic. Well, talk to me a little bit more about security. How are you thinking about security at uh TC? How how are you interacting with developers? Is there maybe um is there a security solution that can address that major challenge that you're thinking about? Yeah, I mean this is one of the reasons why we're starting off leveraging the the relay chain of polka dot First of all, our team had a lot of experience using substrate, given our experience in moonbeam substrate is a very very powerful tech stack. Many, many teams within like the the wetter landscape are using it even outside of polka dot um But for us, it was really about, you know, how can we try to abstract the way consensus and shared security from teams so that they don't have to take on the responsibility of bootstrapping that themselves in a cost efficient way, right? Without compromising on decentralization. Because I think this is probably one of the biggest differences between us and maybe a roll up as a service provider is that, you know, when you deploy a roll up on a theory and you're kind of inheriting the security of a theory and main net, but it's still, it's still centralized, right? You have a single sequencer that's responsible for relaying all these transactions. There's a lot of issues kind of associated with that. I know that there's a lot of teams trying to solve this if you want the right now. Um So on time, yeah, we we're leveraging the relay chain of polka dots that currently provides close to like $10 billion worth of state value of security, right? With over like 400 validators securing the network. So it's an extremely high grade security environment that's extremely difficult to replicate, right? Not only bootstrapping hundreds of validators already in and of itself is difficult, but then attracting billions of dollars in state value to secure that network is arguably even more difficult. So we're leveraging this very high grade security environment and I think we're going to be able to offer that at a fraction of the cost or a lot of these roll up as a service provider, right? Like ZK roll ups, the ZK computation is quite expensive as it sounds optimistic roll ups. You know, they're going to be affected by gas prices increase, gas price increases on Ethereum as hundreds and thousands of roll ups potentially start selling on Ethereum. I think Ethereum is just gonna be an expensive ecosystem to use. I know there's protocols like Celia and the recent like den um upgrade that improves this, but we'll see how it affects it long term. Um So I think for us, it was like, OK, soft trade and polka dot has like very distinct properties that enables us to offer developers l ones that are extremely secure, extremely decentralized. And I I think very little other ecosystems are gonna be able to provide that app like in, in a cost efficient way, but we are exploring other, I think E thee and we, we want to expand to that, right? So we have our eyes on like things like Eigen player, Eigen layer is very interesting to proposing this kind of shared security model as well. So um we're, we're definitely, we definitely had that on our road map to see what other ecosystems we can expand to moving forward. Besides cost. If you were to look at just app chains more generally versus more generally roll ups, what are some of the benefits for developers to choose the app chain route. Yeah. Yeah. And by app chain there, there's a lot of like terminology, some roll up in the service providers say app chain when they mean like a roll up app roll up or something like this. Um I think one of the most relevant ones that comes up when we speak to developers as well as finality. Um So optimistic roll ups in general have pretty core finality properties, right? Hard finality can take up to like 30 minutes. Um This is something that with layer ones on substrate, you can get as as low as like six second finality, right? And when developers, this is just from us speaking to developers, right, where we have like over 300 options dep played in our test that today. And like many of the developers like look, we don't want to compromise on centralization and the low finality uh we want to have class and we want to have a decentralized environment. And you know, right now developers are having to choose like OK, I'm going to deploy an instance of my protocol on many different chains. I need to pick a hub to settle these kind of cross chain transactions. If you have like a hub with poor finality properties, it's it's a bad combination with cross chain, right? Because when you, when you introduce cross chain to the equation, you tend to increase latency because you're taking into account different consensus mechanisms of many different chains. So a lot of developers that come to us, they're like, OK, I want to build my L one times because it can, it can act as a very like efficient hub to settle transactions in a, in a, in a low latency environment, right? So that's something that's relevant centralization as well, right? A lot of developers don't feel comfortable with like having just one sequencer on, on a roll up, you know, the stack, for example, doesn't even have fault groups. Um So if something bad happens on the chain, you're kind of relying on the underlying infrastructure team to to roll past the the chain for you. There's nothing inherently wrong with that, right? It's just about tradeoffs. It depends on what's important to the developer. If high super high throughput is important to them, it might be just be better to go for a roll up since it's uh with a single sequence where things tend to be faster, right? But if they don't want to compromise on, on centralization or decentralization, that it makes more sense to go for A for an L one, this is usually my feedback, right? Whether when I speak to developers that it it really just comes down to tradeoffs. I know there's a lot of protocols out there that say that they're like the best at everything. I'm, I'm generally a little bit skeptical when, when people are claiming they're just like optimized for everything since I I don't think that's the case. At least the way that the web free landscape is currently structured. If we zoom out a little bit, we've talked about how um app chains can solve uh a few different challenges facing developers right now. But if we zoom out and we look at the customers or the users of the applications these developers are developing, how does the user experience uh become better through app chains? Yeah. No, that's a great question. I think a lot of developers, there's several areas why we're seeing like demand for options, right? One which when we started off this journey was a little bit like surprising to me is kind of economics behind it, right? Like a lot of developers are attracted by giving more utility to the underlying native token of what they're whatever they're built, right? You can use your own token as like the underlying gas token of the chain, which kind of drives more economics to the project. Um A lot of teams are like able to like whitelist smart contracts on their given chain, right? For on boarding new users, you can whitelist a specific contract to be gasless. Um Yeah, I I think those are kind of some of the the bigger area. Sovereignty is another big one, right? Like this is one of the use cases that we're seeing a lot with gaming specifically, right? I've seen a lot of use cases where I don't know let's say you're building a game in a shared L one environment and there's a governance decision taken that it couldn't directly affect your game, right? It could make, it could make like uh there was a boating on, on Kusama, for example, that made a certain game like prohibited the expenses to play because of a governance decision. So a lot of people are attracted by this idea of sovereignty, right? That you control kind of the evolution of your own application and you give more empowerment to the token holders to decide. OK. This is how we want the protocol to evolve without being affected by governance decisions that are affecting everybody on that chain, right? Um You have dedic dedicated block space, right? For gaming. Again, this makes a lot of sense because particularly for on chain games, right? If you're sharing block space with like hundreds of other projects and gas prices start to increase, that can make it like prohibitively expensive to to play a certain game, right? So a lot of the games that were uh kind of that are building on 10, they, they love this idea of having just so sovereign dedicated block space to have like a predictable the market for the game. And what we're even starting to see is kind of hybrid models, right? Where I think we have this like misconception now where it's a binary decision, right? OK. I either build a bi I either build an app chain or I use smart contracts, what we're starting to see in our test or use cases that are hybrid, right? Where it's like, OK, I'm gonna offload the game the on chain game logic to a dedicated app chain to Tay, but I'll leverage moonbeam or Ethereum to like for D fight, right? Building liquidity from scratch in an app chain. That's kind of a trade up. It's extremely difficult so I can leverage an existing EFI ecosystem list. My token there access like NFT marketplaces that already have volume and you can use message passing to connect like the best of both worlds, right? So I think web three in general is gonna head into the space where maybe chains don't have to like the entire application doesn't have to live on an app chain, right? You can maybe offload specific logic of a given application to to dedicated log space through TC while still leveraging Ethereum or these other shared EBM environments for for other types of logic and Francisco. If you were to look into your crystal ball, uh talk to me about what the future of app chains looks like if we look at what's happening right now with layer one layer two, layer three, how do app chains seamlessly integrate into the infrastructures that are being built right now? Yeah, I I think if I look into my crystal ball, I tend to look at like the web two, the evolution of web two as analogous to what will happen on web three. I think like Blockchain in general will move into these more like cloud like models. So I don't think that like full applications will live on like a given option, right? I think it relates to what I just said before. I think developers will be able to tap into like sovereign dedicated block space on demand, right? Whenever they need to, instead of having to like bootstrap their own validator set, having to like produce blocks every six, every X amount of seconds, no matter what. Since that's another problem we're seeing is that you bootstrap your entire app chain, you have to pay a bunch of validators and then you realize many blocks are empty, right? So there's also this like capital inefficiency problem with without chains where it's like you're overpay for the economics of it. Um I think things are gonna move into a more on demand model similar to AWS when you're paying for like compute power on demand. Um I think it's going to move into that direction in web three as well where and this is where shared security is afforded, right? Because you can just tap into like a shared security ecosystem pay for maybe a given block. That's yours. You have dedicated on like sovereign blocks based on demand uh for maybe some specific logic or components of your application. Uh I think things are gonna generally move in that direction and maybe you can have smart contracts on Ethereum, you can have smart contracts in other environments and, and have these type of hybrid models. Um So I in general, I think that's kind of more or less to where it's heading. It's difficult to say like who are going to be the, the winners, how, what specific shape it's gonna take. But I kind of see that direction uh in general Francisco. Thanks so much for joining the show.

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