Mar 28, 2024

Kendall Cole, Director at Proximity Labs, joins "First Mover" to discuss NEAR protocol's new chain signatures network that offers users multichain access from their NEAR account.

Video transcript

Are you following the meme coins at all? I mean, I am, I think they're super interesting and Doge is following a very similar pattern to what it was doing in 2020. And people think that we might see a Dogecoin rally soon. Are you excited about that at all? Yeah, I mean, I'm always excited to see what the main cards are doing. It's kind of an indicator of maybe where, where, where the industry is or where the cycle is going. Uh I'm particularly excited about Doge because I think we would chain signatures are able to unlock a lot of new applications on Doge. And that's kind of been one of the creative centers of the industry for a long time, I think. And so it's always fun when you can enable the the very passionate Dogecoin users and developers to uh get involved in new ways. I invited Kendall to the show because the new foundation recently launched chain signatures. This feature lets accounts and smart contracts on near sign transactions on different chains. Now, if you've been listening to first mover for a while, every now and then we do a deep dive on the tech to understand how developers are navigating the infrastructure and understand what that means for the end users of Blockchain applications. At launch. This feature is going to include Bitcoin, Ethereum and Cosmos Chains and Dogecoin and Xrp Ledger. The team says Solana to network and polka dot are coming up next. So what does this mean for people who play in defy land? Well, Kendall says that chain signatures can unlock new use cases. He gives this example with chain signatures, users can transact on any network from one account. That means that users can use assets from other chains without having to bridge those assets. This could potentially eliminate the security risks associated with bridging and potentially make it easier for people who want to interact with different ecosystems like Bitcoin, Ethereum or Doge. All from one account, Kendall is the director at Proximity Labs. Proximity Labs is a company that supports projects on near. So I thought that he was the perfect person to answer some of our questions. Let's take a listen. The protocol is presented by the Stellar Community Fund Accelerate your web three project with cellar funding. Yeah, welcome to first mover. Excited to be here. Thank you for having me. All right, let's dive deep into this story here. What are chain signatures lay a foundation for us? Very simply chain signatures enable near accounts and smart contracts to sign transactions for any Blockchain. The way this works is there's a separate service. That's a decentralized N PC network of signers that listens to basically requests from every single mirror account and then signs on their behalf. What what we're super excited about with this is that it unlocks I think three major use cases. One is the ability for smart con developers on near to build D five products on non smart contract chains or chains that have very limited smart contract functionality includes things like Bitcoin, Xrp Ledger Dogecoin. Um And then you can even build cross chain applications. So allowing those assets to also interact with assets on other chains or protocols on other chains. And this can basically extend to any Blockchain. And then finally, it also enables um near or near accounts to basically uh serve as multi chain accounts that can manage assets on any chain. And they can even use near assets to pay for the gas costs on any chain, which is going to simplify the user experience quite dramatically unpack that a little bit more for me, maybe give me an example of the challenges that developers were facing before the solution existed and how this is gonna uh make the developer experience, I'm assuming easier. That is very much the goal. So we certainly hope so. Yes. So developers, I think there's a couple of challenges depending on what they're trying to accomplish. One of the major challenges for developers. They actually usually need to choose an ecosystem to embed themselves very deeply in and that means that they have to commit very strongly to a specific tech stack uh on these different blockchains. And that, that creates a lot of risk for, for these developers, a lot developers mainly have user experience or kind of uh quality of life goals in mind. Um And they, they're not necessarily want to be sort of married for, for about lack of a better term to a specific ecosystem. So what chain enables is the developers to kind of sit on top of these chains and think more about what they're trying to accomplish for the user rather than, you know, which ecosystem they have to tie themselves very deeply in. Um I think even more excitingly though what it enables is actually get new types of uh experiences and opportunities for developers. So one is that that D I or or different type of applications on these non smart contract chains. And then uh historically, if developers wanted to build cross chain applications, they either had to build on top of a bridge. And while there are some great bridging solutions out there, none of them actually cover every single chain or even close to it. And what chain just allows them to do is actually interact with every single chain. Um And then I think most importantly for their users, uh because these different bridges have different user experiences that can kill, it's going to create at least some minimum level of user friction or even a lot of user friction. If you build on top of chain signatures, that experience will actually be very consistent across the different chains because you're really just dealing with the near Blockchain and then managing assets on these on these target blockchains. Uh So we always really expect that it's gonna, it's gonna basically let them choose one tech stack but then not have to commit to a specific ecosystem. And that if they're building crossing applications, it will allow them to create really consistent user experiences for the users and also unlock every single asset rather than just specific ones that these bridges have integrated with. Give me a real world example here. What is this unlock for users who are interacting with defi applications? Yeah. So I I think there's a couple of use cases we're particularly excited about. One is just a true multi change spot decks. One of the real challenges of building sort of a a spot decentralized exchange is that you need access to either a native asset or a wrapped or some type of version of this asset for every single asset that users want to trade. And the challenge is that especially in today's world where people really want to trade a lot of assets on Ethereum, a bunch of layer twos solana a bunch of cosmos chains and even some more esoteric chains like bit tensor. Uh that's really not possible before something like chain signatures So with chain signatures because this allows these smart contracts to basically sign transactions for any chain and even chains that don't exist yet. Like as a new chain comes out because we're just implementing a low level signing technology, you'll be able to support that chain from day one with the second, it's live, you'll be able to support it. And so this actually enables a deck that can list every single asset that's out there that you just want to trade. And uh it starts to look a lot more like a centralized chain where you can, you really can be exhausted to the chains that are available and that's just limited to these single ecosystems. You know, in my line of work, every time we talk about interoperability, uh security challenges gets introduced to the conversation. We're talking about interoperability here. Of course, we're not talking about bridges, but are there security challenges that come along with chain signatures? Yeah. So security is very much the first and top priority uh and always will be because we are talking about a system that will be managing assets, right? And time you talking about that security is, is definitely going to be a major consideration. Fortunately, the cryptography that backs the system is very well proven and has been used in production for a very long time. Um I think what's what's different and, and what is going to be the largest challenge is making sure that we do have this independent network of signers that need to behave honestly. Uh So what were you using in order to secure this network? So, first of all, we have cryptographic uh security. And the idea here is that a single honest node will be able to report essentially on chain, prove that behavior from any other nodes. And then we also have crypto economic security. So uh we're going to be utilizing a combination of Eigen layer which is a, you know, building a very robust network of crypto economic incentives. In addition to me economic security, in order to basically require that these M PC node operators first state a large amount of assets. And then we will have basically different types of challenges if these, if these uh node operators for instance, do not sign something that it was not originally requested by a user and the proof of that request will be on, on the near Blockchain. So it's very provable. Uh And then like these, these, these uh operators will basically be slashed if they, if they do something the user did not instruct them to do basically. Uh So the intention here is to is to make sure that we have a robust, robust as possible network that users can feel very comfortable with uh utilizing and having a large amount of assets stored with you mentioned Eigen layer. And Eigen layer has become very popular in recent months for a variety of different reasons. Talk to me about the decision in choosing Eigen Layer as a security partner here. Yeah, I mean, first and foremost, the team is fantastic um and very high quality and I'm very confident they're going to deliver a very robust solution and they're taking very seriously. Uh but they think very impressively, they've been able to unlock a large amount of capital in the ethereum ecosystem in, in particular. Um And what they've really been able to do is drive down the cost of economic security with their retaking model and being able to secure these different systems using uh using similar assets. Uh So we definitely want to, you know, combine that with some of the economic security, we've been able to bootstrap on the on the new ecosystem. And I think the two together will create a really will allow us to amass a very large amount of assets that will more than dwarf the amount of assets the system is utilizing, which will give us a really robust uh security set of security principles. I know the near foundation says that this is the first time something like this has been available for developers. Do you anticipate other ecosystems launching similar products? Um And is that necessary for this to scale and bring more developers, more users into, in, into using this type of technology? Yeah, I I think that uh you know, we've seen um the industry very much like waking up to this idea of, uh, using sort of programmable N PC in a lot of interesting ways. Uh, and I mean, there's been teams who have been doing this for, for some time now. Um, you know, I think this system is definitely on the more and the more flexible ones that, uh, that's been launched and, you know, from day one, you're gonna be able to really program at the account level and, and utilize these assets on any chain, which is very new and, and interesting. Um I do expect that, yeah, there's going to be uh similar types of use cases that we'll see. And I think we're really excited about collaborating with these teams too. Um because, you know, this is, it also helps, like on the security side, if you have a lot of eyes on this system and making sure that it's as rough as possible. And I think it's also really gonna help, you know, as we go, like, really, we, it's a new design space and it takes time to establish best practices and also like, really inspire people as to what they can actually unlock with the system and to just generate all these new ideas. So I'm excited to see how, you know, as a, as an industry, we can, we can really start to do that and uh and, and really, you know, showcase what's possible here and work with everybody who's seeing the same vision. OK. And Kendall, I want you to paint a picture for me using an example that a lot of different people can relate to. I know we spoke about dxs before and centralized exchanges, but not a lot of people uh interact with those on a day to day basis. So I want you to think broad and think into the future and give me an example of what chain signatures could potentially unlock for the masses. Yeah, it's a great question. Well, I think from AAA lower level perspective but one that probably people can, can relate to and if you've heard about some kind of new Blockchain or some kind of new asset or a meme coin somewhere, uh step one or you realize there's actually a lot of steps in order for you to get there, your friend got you all excited. You're like, this is really cool. I can go get this and you know, buy it, whatever, whatever it is that's inspired you. And so you really like, ok, cool. I wanna do it. Step one. I have to get a wallet. Well, one of the frustrating things is that there's basically different wallets for every single chain. And so there's not just one wallet that you can go on and get. You might need to, if you get excited about two coins, you have to get two wallets and about four, you have to get four wallets. Uh or you know, you have to find a wallet that somehow covers every single chain, which is just unlikely. And that's a pretty frustrating experience. So you've done that, let's say you, you've done that, you've gotten that, then you need to go and actually get this asset and you're like, cool. All right, I'll go buy it from a change, whatever it is, you go try to do that, you have to figure out which exchange it's on already for a process and you go do it. So then let's say you do it, you would draw that asset to your wallet, right? You're like, ok, cool. Then later along, you maybe want to transfer that asset to someone. You wanna, you would inspire one of your other friends and you want to go and be able to give them that asset. Well, then you realize that you have actually never acquired a second asset that you need on that chain because every single chain has their own uh token that the transaction fees are paid in which was news to you because you're gonna be new to this ecosystem. So then you have to go and figure out how to get that asset, get, just figure out how much of that asset to get, get that asset and then be able to finally send that's open to your friend. He's gonna have to repeat the entire process and, and you basically as a user have to repeat that process for every single new chain that you go to. That's not really what we want as an industry, what we want as an industry is for you to hear about something, be able to acquire it ideally pay for it with, you know, some type of payment method that you already have on your phone, not have to deal with any. So they see phrase or name this madness, get the asset. And then if you hear if the same process occurs and it happens to be a different chain, you don't actually have to repeat any new steps. It's the same set of steps. It's a consistent experience. It's very understandable for you. And then you go pay your friend, you're able to use whatever assets you already have to use to cover the transaction fees. You may not even know that the transaction fee exists. That's sort of the experience they're aiming for. So what we're, what chain signatures enables is for this, the, the the building block of this consistent experience to actually happen. Uh One of the things, one of the really cool products that's already being built on, this is a uh basically a gas relayer. And what that means is that you can use whatever asset is already in your wallet to pay for the gas uh costs on any chain. Uh So not just limited to say the, the unique system or the cosmos ecosystem, but Bitcoin solana whatever new chains come out, it'll be very extendable. Uh And so this is gonna allow these users to have that kind of consistent experience. They can get a single wallet, uh or ideally not even have to get a wallet. Like we have some kind of headless wallets that, you know, they use their email or they even better, they use their iphone and they use the sort of um, secure enclave on their iphone to just, you know, you use Face ID, something very, very simple. Uh And then they can just get this, this asset and they can use it very simply send it a lot of the complexity is just subtracted away. It sounds like as you explained that, that this could be a solution for folks who are developing web three games. I, I hear a lot in that industry, there's a big problem for users who want to play games on different chains and wanna take their assets and in the wallet that they have two different games. And it sounds like when you're explaining this, that this could be um a solution for folks who are building out those games. I think that's a great point. Yes, absolutely. I think the gaming uh part of the space is the one that's particularly closest to people who are new to crypto, which is exciting and that's exactly what we want. Right? And yes, we, we've heard the same from, from many of those folks that uh they, they definitely have a lot, a challenge in sort of abstracting away a lot of this complexity and that's exactly the, the, you know, the pain point that we're trying to alleviate Kendall. Thanks so much for joining the show. Thank you so much for having me.

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