Listen to SKALE CEO and Co-Founder Jack O'Holleran discuss with Solana CEO Anatoly Yakovenko how we can grow crypto communities. Recorded in Solana's San Francisco office live during SFBW.
Anatoly Yakovenko: Hey folks. I'm Anatoly Yakovenko from Solano and this is our "No Sharding" podcast. And today we are with Jack O’Holleran from SKALE. He's working in a layered two scaling solution called SKALE.
Jack O’Holleran: Hello. Happy to be here. For those that can't see us, I will let you know that Toli has me completely beat in attire. And I'm sitting next to a unicorn. It's Halloween. And I, unfortunately left my outfit at home. So, I'm envious. You look great.
Anatoly Yakovenko: Yeah. Not so long ago, I would say like 80 percent of the people in San Francisco would dress up for Halloween, but something has changed culturally, So I'm trying to bring it back. You know, I went to school in Illinois end of 2003 and moved to San Diego, would come out to Mesa probably every year. Mostly for Halloween. So it's kind of a fun time.
Anatoly Yakovenko: So, can you tell us what does SKALE do, what is layered two, why do we need it?
Jack O’Holleran: Yeah, I'd be happy to. So, I think everyone's pretty aware of scaling limitations that we've seen and faced and throughput issues with botchings. I think, you know, when we were designing SKALE, we were thinking about the problem. We were not thinking about how we solve the problem in twelve months.
Jack O’Holleran: I think [inaudible 00:01:34] and many other solutions are going to really solve the throughput issue. We were thinking about this in a timeframe of two, four, six, ten years of how we can support and augment layer ones like Solano with decentralized architecture.
Jack O’Holleran: So we think about this as scaling architecture, scaling back end for developers, and really scaling computations. So when you need to process complex logic, when you need sophisticated smart contract execution, and when you think about these new democratized business models that are disrupting these centralized incumbents, you have to have good performance, great security, low cost, and it's not just about throughput.
Jack O’Holleran: And another piece of this is configuration. So in SKALE, not everyone's sharing one block chain. There's perhaps the same number or more validators, and the developer then can deploy a blockchain.
Anatoly Yakovenko: Shane.
Jack O’Holleran: The developer can deploy the blockchain to their size and liking, as far as their cost requirements and storage requirements, et cetera. So it's almost like, you know, Amazon EC2, where you determine what you want and as you need more, you grow it. And so that's the high level. We want to bring the back end and the right size configuration, et cetera, to developers and be able to seamlessly connect back to layer one solutions.
Anatoly Yakovenko: So what is the difference between that and sharding?
Jack O’Holleran: You know what? You can almost think of SKALE as many, many shards. And so, one thousand notes could run eight thousand independent launch chains, which you could call shards. And so there's a premise of randomness and rotation, and then incentive structures that maintain security. So you can have pooled security across all the validators, even at each sublevel, or shard. We don't call it sharding, because, probably a good thing, considering the podcast I'm on.
Anatoly Yakovenko: All right, so I think the point that I was driving to is that, you're not solving the consensus of the layer one shade. You're still relying on that.
Jack O’Holleran: Yeah, exactly. So you are, if there's a double spend in the skill chain, that's a, yeah, you are, it's not just a front proof or validation proof that is then relying on, you know, the timeout period and a challenge period, where you're passing security back to the end user. You literally have another blockchain and it better have good security. It better have the right functionality to make sure there's not collusion and incentive design, mechanism design, et cetera.
Anatoly Yakovenko: How do you guys compare to like the cosmos IBC model, where you have many chains that connect to a hub?
Jack O’Holleran: Yeah, so the chains in SKALE are not limited. So the more each node can actually be running a hundred and twenty sub nodes. And then right now, these are increments of sixteen. Eventually you'll be able to configure them to be less or more, based off security requirements, storage requirements, and the network just grows linearly. So instead of relying on just the top one hundred validators to run a subsegment and a finite number of chains, these are designed to SKALE linearly with the needs of the network and have also economic structure so that it becomes less profitable to keep running nodes if there's not enough in that. So that's one component.
Anatoly Yakovenko: I guess, what is backing like the security of any of these chains, right?
Jack O’Holleran: Yeah, really good question. So let's talk about side chains and their security issues. So sorry if this is repetitive and redundant for many of you, but I'll just start from the beginning. So botchings obviously, the more validators you have validating, the more secure it is, because they're all processing the same state, right?
Jack O’Holleran: And so if you have only sixteen validators, or miners, or nodes that are verifying the state, then it's way easier to get collusion. And in SKALE, it's a BFT system, so if two thirds of those nodes collude, they can steal the money. So that's the issue with side chains, is that typically they take a subset and you have a smaller group and oftentimes it's an authority model, and then hey, you're trusting that the reputation of the people, individuals, companies, entities, whatever, who are running those chains. And there's not many. And so to get, you know, two thirds of sixteen is way more difficult than, you know, getting a million to collude.
Jack O’Holleran: So SKALE is designed, there's three principles. So one is just randomness. So you have to have very effective randomness to pull, for the entropy to determine which nodes are going to operate in that side chain. And if you can do that well, then it makes it more difficult to collude amongst the bigger group. The second piece is you have to actually rotate these nodes intermittently. If they just stay there forever, even though we randomly pulled from the large pool, collusion's easier.
Jack O’Holleran: And the last piece is incentives. And if there's not a reason or a loss for colluding and stealing, then, because you know, you're not losing reputation, even though the reality is most people know who the validators are. Validators have reputations. But it's not, it's an open, decentralized network. So reputation is not a component. But incentives are, so there's a stake, and if every node has a hundred thousand in collateral staked into the system, if USD pay, and over time the value grows and the token, that just continues to grow on each chain, and then so if I'm bad, I lose my money. So that's the other piece. That's the high level.
Anatoly Yakovenko: Okay. And you guys are EVM compatible?
Jack O’Holleran: Yeah, so you can think of each SKALE chain as being just a souped up version of Ethereum. So full EVM running on each chain will eventually be lots of support. But the design principle is hey, you've built something for Ethereum, you're running EVM, just two lines of code, you can run it in SKALE.
Jack O’Holleran: When it's a little more complicated, when you need to have inter chain messaging and have assets frozen and cloned and burned and moving back and forth, but we also have, I think, pretty good code samples to get people up and running pretty quickly there, too.
Anatoly Yakovenko: Cool. So like I guess, what is like your vision? Where do you think this is going to go in ten years?
Jack O’Holleran: Yeah, okay. Now we're getting to the fun stuff. So, I mean, I've been in tech for fifteen years. And I was in mobile as mobile was getting started. And it was a similar feeling when... I was at good technology. We launched this app store, and we had all the Fortune 500s, you know, hundreds of thousands of users of that a month. And we thought, "Oh, everybody's going to want to launch a mobile app here." This is where literally enterprises were living on [inaudible 00:08:53].
Jack O’Holleran: And you know what? Only like three or four did. And I was running that program from a product perspective and working to make this happen. And what happened was, it was just the devices were slow. It was a confluence of factors that made usability horrible, so this was, we were on 2G, not 4G. We had very limited battery life. We had not much memory on the devices.
Anatoly Yakovenko: Did you guys build the brew app? Or was this post brew, like iOS, Android?
Jack O’Holleran: This is, so this was like pog OS and HTC and Nokia had... So yeah-
Anatoly Yakovenko: Not brew? Brew is the OS that I built.
Jack O’Holleran: So SKALE, or sorry, Good's business model was Rem had their OS, and you know actually another funny thing, something seemed easy and trivial, like, "Oh, I'll just support all these operating systems", and it ends up being way harder than I imagined.
Anatoly Yakovenko: Yeah, yeah. Totally.
Jack O’Holleran: But yeah. So the point of that story was, it felt very much like this and then, I think it was like 2008, 2009, the iPhone launches, we get to 3G. And it was hockey stick growth. And all of a sudden like, like literal hockey stick. It was the knee of the curve, changed dramatically. I was in machine learning later, it was like a very similar thing. And so I feel like we're there. And so over the course of ten years, you know, I really believe in not just money and assets being digitized and living in a secure pictographic world, but I really think it's going to be this is all of the structure.
Jack O’Holleran: I think we're going to, we're really early in the, you know, taking a big look at, you know, like the first VCs really started in the early '80s. And it's not that old, right? There's a lot of room for growth and transformation. I think we're going to change structures of how businesses are formed.
Anatoly Yakovenko: Yeah, my feeling is like very similar. So I was working in an operating feature, operating feature, operating system. And we literally had 80 percent of the market in the US. It was, you know, at Verizon, every CDMA phone in the world ran brew. And within about a span of a year, when the iPhone came out and then Android, the number of phones shipped dropped from 80 percent to 20. It was crazy. Like how quickly that changed. It was literally one year.
Anatoly Yakovenko: But, you know, I think... When that switch happens, I think it's kind of unpredictable. Like it's hard to say, right? Like maybe it's [inaudible 00:11:38], maybe it's not, right? Because at that time, there was still a lot of people, like before there was iPhone and Android, there was like Microsoft phone was a total flop. There was like two or three Palm phones and Rem phones that, you know, had some market share but never really took off and made this space happen.
Anatoly Yakovenko: So it's kind of like, it's hard to tell, right?
Jack O’Holleran: And you know, now it's kind of passe to say, "Oh I believe in utility tokens and decentralized governance and these systems." Google will be disrupted, Uber, Lyft, and the funny thing is, nothing really changed other than token prices dropped. But the growth curve from a [inaudible 00:12:23] perspective is on an amazing, it's on the right slope to get there. We haven't hit the knee of the curve, but I haven't seen anything that tells me these things aren't going to happen, they're not viable. It's just very clear that it's going to take longer than most people expected.
Anatoly Yakovenko: Yeah, yeah. I think like we need, you know, I think people are good at innovating in the tech, because we're good engineers, right? I think a lot of people that are early in this space are engineering background, and we see the problems and we're solving them. But I think what we're actually lacking is like clear business models where you can like explain this is how I make money using crypto, right?
Jack O’Holleran: And why decentralization, right? There has to be one, a real strong need for it within the business model design, and two, if the friction is greater than the value, the decentralization are not going to get usage.
Anatoly Yakovenko: Yeah, yeah. Totally. Yep. So what do you guys think of Libra? Like you guys in SKALE, you saw the big announcement, now kind of this weird pushback?
Jack O’Holleran: I have to say, one, we were actually very excited, even though it's very antithetical to the ethos of decentralization to have, like oftentimes Facebook is one of the top companies cited for abusing data rights. And they're a big piece of the problem, right? But I was excited, because it just brings more people into the space, it normalizes it for other people who have these misconceptions about digital currencies.
Jack O’Holleran: And then I have to say I'm not at all surprised about the issues that they're dealing with, and that's one of the reasons why every project in the space that's decentralized has a foundation somewhere else and needs to have proper decentralization in order to be able to even like implement and launch a token, which we've talked about before, right?
Jack O’Holleran: So trying to do it from this big company perspective, even though they have some decentralization with their twenty some groups that are participating, it's just a very different model, and one that, I think, they didn't think they were going to go through this, they were overly optimistic.
Anatoly Yakovenko: Yeah. What's crazy to me is that, like, how for granted I'm taking it that all their code is open source. Like, you know, there's no way Microsoft would have launched an internet money that was open source in the late '90s, right? Like no way, right?
Anatoly Yakovenko: But now, it's impossible, I think, to build complex systems that are closed source, which is really cool, right? All this...
Jack O’Holleran: And I look back at my last [inaudible 00:15:08], and this was AI, machine learning, and there's this ethos around like, hide the assets, sell the black box, and what I learned over time, now, is it's being really immersed in open source the last few years, is it's a far better business model, and you give up some brick walls and a moat, but what you get is serious growth and trust.
Jack O’Holleran: Because the biggest issue for anyone trying to sell that type of software is, like, no one wants to trust a black box, but look at Tenser Flow, look how Tenser Flow has just crushed all of these, like, you know, closed wall garden efforts, because you've got a community behind it.
Anatoly Yakovenko: Yeah, totally. So do you guys see the, like we had a panel last night with Zach and he asked a question that we didn't actually get to answer. Do you see the challenge of building a community as harder, or the engineering challenge of launching this complex system?
Jack O’Holleran: Okay. I think the hardest things are all of them. And let's throw compliance into the mix. Let's throw in the fact that you have to be a startup and manage a public entity, an asset. And even though it's community run, it's being traded, and you have to manage communications. It's a very different ball game, it's almost four to five startups in one.
Jack O’Holleran: But I think the cool thing about community, from what I'm seeing, is that community is also not a wall garden. There's combined communities, and we're really all part of a community. I see a lot of the people in this room everywhere, all over the world. And the communities are, there used to be, actually there are still some like hard lines. There's a bitcoin community that doesn't like to leave. But a lot of the people in this broader, you know, with Ethereum-
Anatoly Yakovenko: They're all competing to the death, right?
Jack O’Holleran: Yeah, really competing but we're all friends. We all hang out together in every city. But we do events together, I think, because everyone also realizes that rising tide lifts all boats. And if this industry is successful, the amount of people working here are still small enough that everybody is going to really benefit. So I think everyone benefits from partnering.
Anatoly Yakovenko: Yeah. And I think the rising tide, again, goes back to this, where we're pre growth curve. Because we really need to get the world hooked off these technologies and get to that saturation point.
Anatoly Yakovenko: So in the '90s, you know, I was a teenager, and I was programming and I remember, you know, there were like forty million people on the Internet in 1996. So forty million, like, Internet estimated people, right? So I think the estimates for number of wallets in the space right now are around that forty million mark.
Anatoly Yakovenko: But if you look at like the actual transaction flow and all the public chains, there's maybe a million monthly active accounts. So that's our addressable, decentralized market space.
Anatoly Yakovenko: At the same time, when we hit those two, three hundred million numbers in the late '90s, like this thing came out of nowhere called Friendster, and like everybody needed to be on that network. And no one could have predicted that like the most important thing out of a global Internet is the social network that glues the people on top.
Anatoly Yakovenko: There's zero, like literally, no one could have saw that coming, right? So I'm, like I'm excited to get to see us get to that point, where we have like three hundred million self custody wallets with humans behind them. Like, right?
Jack O’Holleran: Yeah. And I mean, I've, it's coming. But it feels, it takes patience. But the attraction points are all pointing in the right direction. Like you said, the curve with even just the Internet was very similar.
Anatoly Yakovenko: Yeah. So like again, I think just thinking about that experience, I have no idea how to predict what that application is going to be, right? Like what is the Friendster of crypto?
Jack O’Holleran: So what excites me is when, it's these places where you see this middle men rent takers who are really not adding value, and it just seems so clear, and before this, by the way, before Sam and I started SKALE, I spent about a year, nine months, just kind of, almost being an EIR, looking at business models, and I was going to the [inaudible 00:19:34] office everyday. I had an office there. And looking at SAS business models, and looking at the marketing tech and sales tech landscape. I think there were ten thousand funded startups in the Bay Area. And they've already solved all the big problems, and it's just these little problems that are now being solved.
Jack O’Holleran: But, yeah, they're looking for incremental value, and if you look at, you compare the value that a new SAS company can provide incrementally over one before, it is like one one millionth of what the value you could provide by disrupting some rent seeking middle man.
Jack O’Holleran: So the issue is it's just been impossibly hard for normal people to use these things yet. And once that happens, I think it's just going to get, and just be a vacuum, we're all going to get sucked into growth.
Jack O’Holleran: We're getting closer.
Anatoly Yakovenko: Yeah. I'm really excited about Defy, and the idea of trust minimizing finance, because like looking at like McKenzie's reports, like 17 percent of the world is spent on financial services. Literally, if we replaced that with like a computer, I could work four days a week instead of five, right?
Anatoly Yakovenko: I think I would have the exact same standard of living, right?
Jack O’Holleran: Yeah, yeah. Definitely. Defy is booming right now, and I think that's one of the hot buttons. I also, there's so many examples, and we get to see so many of them, because they're building on a theorem, and very quickly being [inaudible 00:21:06] SKALE. One interesting one that's really getting traction is Audious. And I think they had two hundred and fifty thousand transactions in the first week, which is pretty big in this space. And it blows away everything you see on dap radar.
Jack O’Holleran: But the thing is, is music is very restricted if you're an artist to be able to publish a set amount of pieces, through validated channels and this is a decentralized network. And artists like Skrillex and top EDM artists around the world right now have a ton of content they want to get out there. And guess what? They just, they can't put it on SoundCloud, but they can put it on Audious and people listen and play and pay.
Jack O’Holleran: And the cool thing about it is the end user doesn't know they're interacting with a blockchain. They're just getting access to different music at low costs. And the artists know that they get paid directly, and there's not a middle man in between them and the listener.
Jack O’Holleran: And you know, they can't put their content that has already been licensed in other ways on the platform. But there's, that's a cool market, where I'm seeing, you know, real value around the disruption.
Anatoly Yakovenko: Yeah, that's cool. I mean mp3.com, right? If you remember that, that was awesome.
Jack O’Holleran: Yeah. We grew up with Napster and those ideas.
Anatoly Yakovenko: I mean, look. Honestly, Napster, that was the foundation of like half of the architectures that you see people are building right now. Like people think about distributed systems, like a mesh network for downloading music, that the distributed systems problem in the late '90s.
Jack O’Holleran: It was, and I have to... When I was, you know, anyone who's new in this space goes through this process where your brain explodes. You're like, "What?" There's so many things happening and one of the connecting points to me was like, oh, because I used to run my, and I was like running a node, I wasn't, I felt like I had to share a back, I didn't want to just download. I also didn't want to leave my computer on when I'd go to school or-
Anatoly Yakovenko: Yeah, you're just admitting to some things that you shouldn't be. We might have to cut that.
Jack O’Holleran: A friend did this. A friend of mine would get [inaudible 00:23:13]. I think that, that lawsuit passed already. What's the statute of limitations on that?
Anatoly Yakovenko: Running a Napster in the quiet? Yeah.
Jack O’Holleran: Sure, that.
Anatoly Yakovenko: Cool. Anything else you want to cover?
Anatoly Yakovenko: How did you get into this? Like what was your, like your genesis, your origin story?
Jack O’Holleran: So my genesis story, I moved to Silicon Valley in 2005. I was working in technology. We were dealing with cartography. We had fips 140-2 certification. And I sold this first mobile defense product to NASA. It was a really cool deal with security and mobile.
Jack O’Holleran: Actually, Stan did, my co founder did our fip certification, he was running a crypto lab.
Anatoly Yakovenko: Oh, cool.
Jack O’Holleran: Back then. But I kind of got interested in cryptography, it was just intellectual, stimulating area. Then I started in digital currency platform in 2008, where we had these, like NASA, you could buy wind tunnel time with these NASA bucks or super compute time. You have all these shared resources where everyone fights for the resource. And we're like, well if you have a currency, and the price fluctuates based on supply and demand.
Jack O’Holleran: This was in 2008. And people thought we were crazy. And I think we were, a little, but we thought it was cool. And then the market crashed, and we ended up saying like, "All right, well, we have a team. We raised a little money. Let's give this a go." We ended up building the largest machine learning AI advanced analytics platforms for the life science industry.
Jack O’Holleran: And so I was doing that, and that company's called [inaudible 00:25:01]. Almost every pharma rep and biotech rep and marketer in the world in that space is interacting with this platform.
Jack O’Holleran: For that business, I was in China, in 2013. And a friend of mine is one of the founders of Coin Desk. And he was saying, he's a British guy, he's like, "You have to get yourself some bitcoin. Need to buy bitcoin." And I was living in Palo Alto before that, and in 2011, the [inaudible 00:25:31] everywhere all over the valley. And everyone was looking at it like, "People are using silk road." Everyone was looking at it for other reasons, but then in 2013, it's like, "Okay, I can get behind this." And I like kind of went down the rabbit hole and started buying and huddling, but really didn't understand the power of these systems until Ethereum launched, and then I was just, you know, day job working in SAS machine learning company.
Jack O’Holleran: And all of the other time, just reading, reading, reading, learning about crypto. And then, when I started at my next company, it was, I just dove in.
Anatoly Yakovenko: Cool, that's awesome.
Anatoly Yakovenko: I mean, from 2008, you were already thinking like a crypto columnist, right?
Jack O’Holleran: That was the hard thing, like, "Okay, we've got this asset. We need to make sure supply and demand and pricing," so it was a very similar problem. And it was really difficult. We actually ended up hiring a lot of bio and [inaudible 00:26:32] Ph.Ds from Stanford.
Jack O’Holleran: And so we had this huge team of Ph.Ds and we're like, "Well, we need to be able to predict what's going to happen, too." And that's actually now how every pharma rep in the world is guided to deliver healthcare information, because we were trying to solve, you know, economics issues around currencies.
Anatoly Yakovenko: That's awesome. That's a really cool story. Like mine, mine was, you know, I had too much coffee. And I was up until four a.m. and I had this like realize that you can generate a source of time, right, and since I worked at [inaudible 00:27:07] for like twelve years, and time was such a fundamental piece of wireless network scaling, that that was my light bulb moment.
Anatoly Yakovenko: Now that, I was like, you know, felt like I was manic for two weeks, because I had this, like, "Oh my god, this is going to work" moment. And yeah. It took me about a month to get my wife to listen to me. She has an engineering background and she's like, "Okay, this might work." And that was kind of it.
Jack O’Holleran: So then you were [crosstalk 00:27:37]
Jack O’Holleran: How many transactions per second were you to see once live?
Anatoly Yakovenko: So we're trying to hit fifty thousand on an open network. And there's a lot of challenges there. On a Google cloud service, if we don't do lead rotation, I think we can saturate like 800 megabit swish, that's about two, three thousand. With rotation at full tolerance, it's about I think eighty right now. Sixty probably is more likely.
Jack O’Holleran: Awesome. It's so cool seeing all the talk, I mean all the space and hearing about somebody who's a top performer in traditional technology and then you drank too much caffeine and we've reinvented the way time interacts with other letters.
Jack O’Holleran: So it's like-
Anatoly Yakovenko: I mean like the stuff we're doing is based on, you know, on the work of others, right? Like [inaudible 00:28:32] a lot of folks have done research on BDS and distributed systems have been worked on by a million people. Our version of Vay is called Lamports because of Leslie Nellport, right?
Jack O’Holleran: We're standing on the shoulders of giants. And that's part of it, is like timing. And I have to tell you, I got into machine learning, and we didn't even call it that back then. This is like 2009, you know, after the transition from the prior business.
Jack O’Holleran: And you know, we ate dirt for like three years. Nobody wanted to talk to us. Nobody wanted to buy anything. But we saw it, and so... I think we're all getting there. And thankfully, now where we are right now, other people before us laid the groundwork, figured out a lot of the issues, and you know, we wouldn't be where we are, have the advantages, if they hadn't done these things.
Anatoly Yakovenko: Yeah, especially for us. I mean, we've been following in the footsteps of so many other projects, like cosmos especially. That was the first chain that I felt like launched while I was building this one. I was like, "Okay, these guys figured it out."
Jack O’Holleran: And the community and the validator community, they've grown is phenomenal. One thing that's really cool is, so many of the top validators now that run networks like SKALE and Solana are actually people that worked at cosmos that saw this growth market and it really, people will write about this later, I think like after we have a million validators and there'll be this lineage of cosmos validators and core team that are running networks around the world.
Anatoly Yakovenko: So I don't know. What should end on?
Jack O’Holleran: I've got a question for you.
Anatoly Yakovenko: Okay, go ahead.
Jack O’Holleran: So let's talk about, I think a lot of people in crypto have families and have other things other than working all the time. We both have two kids the exact same age. How do you manage being a CEO and having family?
Anatoly Yakovenko: So I cut out TV and majority of alcohol, although like I'll have a beer socially. But really, like that's basically it. Honestly, if you cut television out and drinking, you have a lot of time on your hands. [inaudible 00:30:48] startup and family. And that's fine, right?
Jack O’Holleran: Yeah, like social life.
Anatoly Yakovenko: Yeah, startup position, social, and so is the family. But yeah, I mean, let's see, like you know, I often end up programming somewhere from like nine p.m. until sometimes like eleven or midnight.
Jack O’Holleran: Yeah. That's the other half, it's the late night shift.
Anatoly Yakovenko: Yeah.
Jack O’Holleran: It's the same thing, like nine to midnight, jamming, not being distracted by anyone. Yeah, and it's good that it's inspiring, because a lot of people are like, "Oh, I want to work at a startup. I want to, but I don't think I can because I have my family." It's like actually you can do both. You just have to cut other things out.
Anatoly Yakovenko: Yeah.
Jack O’Holleran: Like television and booze, as two examples.
Anatoly Yakovenko: And you know, bike to work for a work out.
Jack O’Holleran: And triathlons.
Anatoly Yakovenko: Yeah, yeah, yeah. One more thing in common with Jack O’Holleran and I is we're both Iron Men. I was like the laziest Iron Man, so my hours were like thirteen plus.
Jack O’Holleran: I was worse. I was fifteen plus.
Anatoly Yakovenko: Okay.
Jack O’Holleran: After my first triathlon, I did a full Iron Man. But I took my time, I like sat down, had a lunch break. You just need to finish before the clock hits seventeen hours, so that's all I care about.
Anatoly Yakovenko: That's all it takes, is being able to do it for seventeen hours, right?
Jack O’Holleran: But your hot wheel time has gone down since the lottery.
Anatoly Yakovenko: Yep, yep, yep. Yeah, getting slower. But cool.
Speaker 3: I guess one thing that would be interesting, since you all both have experience before blockchain and these startups. Like what's been the difference in growing a web three versus a web two, and different challenges you've experienced?
Anatoly Yakovenko: I'd say like it's harder to get, like, traction where you have users that are like general public users, right? Like outside of the crypto space. Like traditional companies like [inaudible 00:32:57] is just so established that you're really targeting like end consumers that have something that they want from you, right?
Anatoly Yakovenko: With this, we're still majority targeting the crypto industry, and that's the hard part, like you know, adoption within the small community doesn't mean adoption in the wider world, right? The other eight billion people.
Jack O’Holleran: Yeah, so two part answer here. One, the challenges are like three or four, fivefold, because yeah, a huge tan with like clear users doesn't exist, but there... Yet, we see it coming. That's why we're all here.
Jack O’Holleran: You need to build amazing technology fast. You also have to manage a public asset and a public presence, or support a foundation that does that. And you don't just pay Amazon to run the service. You need to create a community that runs a service at a good ROI that makes sense based off of the economics of the system. And guess what? Economics are another big piece.
Jack O’Holleran: There's like a lot of issues, but the flip side is that this industry is attracting, I think, the best talent and the best people in any industry, and it's fun, it's exciting, and it's just a natural like, you know, like light that pulls in phenomenal humans.
Jack O’Holleran: So that part is way better and way easier. And guess what? You could do a podcast, if we were in SAS, I wouldn't be listening.
Anatoly Yakovenko: Yeah, yeah. The SAS podcast. That's going to be the next season, we're going to call it the SAS podcast.
Jack O’Holleran: No, don't. More people listen, obviously, in that space, but it's...
Speaker 3: I think one more thing that we might have some questions from. What's the biggest thing you're looking forward to in the next six months to a year in the crypto space or your individual platforms?
Jack O’Holleran: So I am, I think one cool thing is when you're in this same zone that Solana and SKALE are in, we are both like pushing test nets out right now, working with all the same validators. We're both very thankful and fortunate to have such phenomenal validators running and operating these networks.
Jack O’Holleran: We're both at stages where we're pushing out test nets and getting up to main nets, so I'm excited to see Solana to launch main net. I'm excited to see SKALE and some others, and really see these things take off. That's what gets me excited.
Anatoly Yakovenko: Yeah, same. Just getting over that hump, right? Pulling the bandaid off, getting that work out there, launched, and then getting to the real work, right?
Speaker 3: Anyone have any questions? Yeah?
Anatoly Yakovenko: Somebody had a question.
Speaker 4: Sure. Outside of [inaudible 00:36:02] are you most excited for?
Jack O’Holleran: Yeah, so great question. So when we think of scaling, we think of it as a few things. One, just like cryptographic techniques. And the other one, architecture, networking, and you know, I think there's like, SKALE will be launching a BLS roll up at some point. And we're excited about that.
Jack O’Holleran: But a lot of these things are still in deep research. And it'll be interesting to see how they come together in a lab environment. In the interim, we're very focused on scaling core value with the approach we're building, and really just making it incredibly easy. If you build something for Ethereum, boom, it works over here on SKALE. But it's cool to see all the progress and action on our roll ups. I think that's like the hottest thing lately.
Jack O’Holleran: Still the same legacy issues, right? But you can just get a lot more in per round.
Anatoly Yakovenko: I mean, like, I find the, like with kind of the ZK approach, like trust minimizing like actual fraud proves a computation was run correctly. I think the, if we succeed there, like a lot of the problems around watching can be solved, beyond just... Our approach, I feel like we're building like a ridiculously fast dinosaur. It works, it's based on hardware, hardware's going to continue getting faster.
Anatoly Yakovenko: But if you have the cryptographic guarantees of computation, that might be like, you know, science fiction, right? But that's like kind of beyond what people see right now. So we'll see. Like I would love to see like a compiler back end for generating, you know, ZK snarks.
Jack O’Holleran: Yeah, and one other comment there. I think as an industry, we all need to get better at like differentiating things that are going to be ready in six months and three months and a year, and research that's going to propel the industry forward in five years. And a lot of us are, "Yes, this is the greatest thing." But if we really think about when it's going to be viable and tested and proven, it's a ways down the road.
Jack O’Holleran: So I think, I'm excited to see these, you know, what's actually going to launch in January and February and the end of this year, through a lot of different scaling efforts. That gets me excited. A lot of this stuff, usually cryptographic research takes decades, right?
Speaker 3: There's time for like one or two more questions. Any other questions? Cool. Cool. Want to plug anything? Is there anything you want people to check out?
Jack O’Holleran: Halloween, San Francisco. 2019. I'm just kidding. With a hundred thousand people on the street? No I'm kidding. Yeah, we don't... How about you, Anatoly? Anything?
Anatoly Yakovenko: What do we need to plug?
Speaker 3: Plug something else.
Anatoly Yakovenko: If you go to Solana.com/beta, there's a program for developers that can start playing around with the tools, deployments and modifications.
Anatoly Yakovenko: Do you guys have a similar program?
Jack O’Holleran: Yeah, thank you, so I'll plug that. We have a SKALE innovator program, so if you're interested in hacking, if you're building something on Ethereum, please talk to us. Christine Perry runs that program at SKALE. And we, you know, hand hold your way through the process and let you run a SKALE chan. We've got them ready there, ready for deployment, so excited about that.
Jack O’Holleran: Also excited about Eth Waterloo next week, so there's going to be a massive hackathon in Canada. It'll be fun.
Speaker 5: When is the mega launch for both products?
Anatoly Yakovenko: Jesus, I don't know. [crosstalk 00:40:01]
Anatoly Yakovenko: Oh man, so we're trying to launch this stuff as fast as we can, and we're like on this tail end of go to market. And this is like the hardest thing. So we just had a dry run yesterday, and prior to that dry run, we did two internal tests. The network seemed fine, and then we booted up and it stalls in about three hours.
Anatoly Yakovenko: So, like, it's just there's these unforeseen problems that are like so hard to catch, you know? You're trying to do everything right, and then you're like, "Okay, let's see it." And then it falls over.
Anatoly Yakovenko: So this is like the least predictable and the hardest thing to anticipate, but like I think, you know, it's just a matter of time. These are just engineering problems, they're not like computer science problems. They're after research, right?
Jack O’Holleran: That's well said. I think we're all at the point where we're hardening, it's engineering problems. We're not building the rocket ship anymore. We're just fixing the issues as we fly through space at a million miles an hour.
Anatoly Yakovenko: Right, well yeah. I mean, the first three SpaceX launches blew up, right?
Jack O’Holleran: Yeah, exactly. So you got to do that, you do it in a test environment and then you go to the real deal and you know, it works. And hey, these things will all still have some issues and we'll have some like late nights and sending [inaudible 00:41:18], but that's how software gets deployed.
Anatoly Yakovenko: Yep. You have any?
Speaker 3: I have one.
Anatoly Yakovenko: Good.
Speaker 6: So who is your biggest competitor right now? [inaudible 00:41:31]
Anatoly Yakovenko: On a scaling slide, so the way I look at competition is of like can they reduce prices for customers? Sharding can't, like the price of a transaction on a shard is limited by the capacity of a single shard. Because that's the minimum to prevent spam for the shard, right?
Anatoly Yakovenko: So we have an advantage there. And I think our biggest competitor outside of that is just, you know, us not shipping fast enough and getting down the market. But obviously, like any applications that are able to reduce load, like SKALE, like a lot of layer two solutions, we're definitely competing with them.
Jack O’Holleran: I think it's a really good question and it's also a philosophical thing about how you think about competition. And we are really trying to focus on the customer. Right now, we've got thirty two daps partners in the program, and we're trying to make them successful in a way that they make their customers successful. And I think everybody's had, that's the right way to approach things now. You have to read and know exactly what's happening with other efforts and other things across the industry, but you also have to, if you have a plan you believe in, you have to execute it.
Jack O’Holleran: And so, we're... And also some of it's rising water lifts all boats, rising tide lifts all boats. I think if the tam grows by a thousands x in the next year of active users, then there's going to be a lot more market then.
Jack O’Holleran: It'll be interesting. One of the things I'm wondering is traditional rules. There's these rules that like, you know, the VC and entrepreneur community in the Valley has built over time over power laws and who will win and you know what? A lot of things are different in crypto. I wonder if these things are going to hold true. It'll be really interesting to see how like dominance unfolds in different areas.
Anatoly Yakovenko: Yeah, agreed. Like people, I mean we're, you know, China's going to launch a cryptocurrency, right? Like that's crazy.
Jack O’Holleran: Yeah.
Anatoly Yakovenko: That's literally crazy.
Jack O’Holleran: That's awesome.
Anatoly Yakovenko: Yeah. So how are like, how is that going to impact the market, if now like we can run proofs of transactions of RMB of a Chinese crypto chain, right?
Jack O’Holleran: Yeah.
Anatoly Yakovenko: Right? Like that is effectively like, why would I use anything else besides that for financial transfers, right?
Jack O’Holleran: And these things will be cloned and running in other networks. It will be interesting to see how great the effort is to try to keep the, like what is, the money flight from leaving the firewall and if they even think that's possible. Or maybe it's a strategy not to, to just become a global currency.
Anatoly Yakovenko: Yeah, totally. There's some crazy things happening. I guess it's like a curse, right? "May you live in interesting times."
Jack O’Holleran: Yeah. This is the right industry to be in right now, though. I'll tell you that. Who knows exactly how it will unfold in the next year or two, but things are happening.
Speaker 6: I mean, is money flight the same as the currency?
Jack O’Holleran: Yeah, that is the weird thing, right? Like the more-
Speaker 6: [inaudible 00:44:46] So let's make it the defacto currency for the world.
Anatoly Yakovenko: Do you want to be on the podcast?
Speaker 6: Sorry.
Anatoly Yakovenko: No. [crosstalk 00:45:04]
Jack O’Holleran: You want to start using it over here, right?
Speaker 6: I mean it's a strategy for world domination.
Jack O’Holleran: Yeah.
Anatoly Yakovenko: Good point.
Jack O’Holleran: Cool. Let's get more coffee.
Anatoly Yakovenko: Yeah, let's do it. Round of applause for the podcast guest, everyone.