Making Blockchains Invisible via Chain Abstraction - Illia Poloshukin & Jaemin Jin

Captions as YouTube publishes them, usually machine-generated, so product and people names can be misheard.

1. 0:01

   all right gmgm thank you all for tuning in today this should be a magical session I am Marcus with near foundation and today's theme is making blockchains invisible uh this is essentially done via chain abstraction which is one of n's main focuses and strong points uh which is also demonstrated by some of the leading daps in web 3 that are also built on near uh such as sweat kaai Ching hot wallet and now dapdap climbing the ranks uh we're incredibly lucky to

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   be joined by two leaders around the narrative today uh we have Ilia co-founder of near protocol and CEO of near Foundation we also have Jamon co-founder and CPO of magic Labs again really really appreciate all of you tuning in and I'll go ahead and hand it over to our speakers today to introduce themselves and dive right into it hello hello thanks Marcus great to be here um I'm Ilia co-founder of near the locus of chain abstraction and yeah I'm

3. 0:54

   really excited to talk uh with magic I think we've been t walking and working in some way since 2019 so uh really awesome to have you here hey guys uh nice to meet you I'm Jamon I'll do a quick intro myself um I'm a co-founder and chief product officer at Magic um and I went to University of waterl where vitalic also went and that's Al that's what really got me interested um in jumping into web 3 since 20 2016 and then we started in

4. 1:26

   2018 so it's been about six years uh so time time really flies um and yeah we've really been on a mission to solve onboarding for the mainstream and especially like web to and uh we've been working with really uh renowned companies like Mattel like like Barbie dolls and Hot Wheels nfts and then um like Macy's Mattel Mattel uh poly Market um and immutable and so on and yeah like we've scaled our company to be really focusing a wallet as a service and then

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   um servicing that to be um reliable like SC ailable and all of that to be able to on board web two so here I am awesome so I think the kind of to start us off right um the idea to talk about chain abstraction and how we're really trying to make the blockchain invisible to the users and especially obviously done boarding part but also throughout the journey so kind of one of the key uh element of you know any user journey is how do we onboard users in

6. 2:39

   such a way that you know they don't need to like install something fund something you know figure out what ZX addresses mean Etc and we need this approach to really make sure like web 3 is more available than web 2 right it's easier to un board it's EAS to use it has this composability that anywhere you go you kind of bring your own account with you and your own data so how does magic been kind of thinking about this um and what

7. 3:11

   have you been kind of building as well as you know establishing or or or evangelizing in this area yeah so um in the beginning it was really about how to abstract abstract away seed phrases and then just not um uh relying on the user to manage and then secure the seed phrase right and um because seed phrase was pretty much like your U like whole treasure account and um on top of that uh what we really focused on was web2 ux is really great

8. 3:45

   already and people especially like the normies and like the mainstream users will not sacrifice ux to I mean they will need I think at some point they'll know the value web 3 and they'll probably graduate to a certain point that they want to manage security and all these other aspects of like web 3 on their end but in the beginning it's really important to onboard them through webt so how we uh tackled in the beginning was really going after the

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   existing web 2 um authentication uh mechanisms like email social login like SMS Etc and then um using that as a way to make it really easy for developers to um add that ux so that they can start onboarding web to users um the space has definitely evolved now and what we've been really focusing on lately on top of what what we've been doing with the developers is um tagging along with the

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    existing um identity providers so so I would say one example is Mattel so Mattel they're like the manufacturer of like Barbie um and then Hot Wheels and lots of ips and they pretty much had a a shop um built using Shopify and then azero and these existing web services and they wanted to introduce wallet exact like completely behind the scenes without um introducing any web through ux so we pretty much built this like we had this wallet as a service product

11. 5:05

    right and that's pretty much our defacto service that we provide today and we were able to um offer a solution where they could just literally embed wallet behind the scenes and we like to call it invisible wallets um so that the user can pretty much just go through a Barbie or like a hobal NFD purchase flow without having to with just similar to like a web two checkout flow on top of web2 authentication so that's what we really unlocked and how we view the

12. 5:31

    future is really um yeah like the web 3 should be completely abstract the way behind the scenes I really like really love how you guys are like looking at chain abstraction as well because as magic we've been working with many different blockchains um as demands come in right and then there's always this question of like how do we introduce um the chain when because like a user may have assets in one blockchain another blockchain so how do we abstract

13. 5:55

    that away and then um really make it easy for developers to be able to manage that but at the same time not introduce any uh chain concept to to the user and U I think this like the next step that uh the space really needs to focus on on top of what we're doing right now for sure for sure so I think like around around this areas um I mean on our side we kind of been following this philosophy from the start uh as well trying to really simply def boarding make sure that users can start

14. 6:33

    interacting with applications without um even having uh their tokens for gas fees let's just dream for a second and imagine we're you know we're having this spaces one year from now um and we really have you know rolled out this chain abstraction Vision uh across the board and uh how do you think the changes will be happening around like not just web 3 applications but how will this propagate into you know some of those bigger Brands but

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    also uh the experiences that people have right now uh kind of what what what are your thoughts here and like what what what is the interesting experiences that we can bring that are really unique to kind of VB three way of doing things yeah so I think there are two main things one is like you said gas right I think abstracting away gas completely um where pretty much in web to everyone Builds on these uh infr services like AWS like gcp Etc and um these businesses

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    pay uh for the service cost right so I think in a hopefully a year from now um the gas fees with a cration which has been talked about a lot and it's been um yeah it's been a great development that we've been seeing seeing from the last from the last two years hopefully with that and uh we can extract with the gas fees and make it really easy for the developers and these like businesses that um I've mentioned uh to be able to

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    pay on behalf behalf of the users so that's one the other one is um I think um when it comes to these tokens or or nfts Etc like they should be um kind of disguised as like for example nfts um like metal they disguise as more like a digital collectible right and um and then these businesses could launch their nfts not just in one chain but many different chains um and then they shouldn't need to show uh which chains uh these nfts are from and um maybe one

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    real life example is like I like to use like hotels like a Marriott and like high at points um and then um it's easy for you to let's say if you own like an AMX card and then you AC points there it's easy for you to transfer that over to Marion and start using it and I think that's the type of ux that we should probably uh not we should definitely uh U aim to achieve where if you're going from like etherum to near um and let's

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    say you have certain loyalty points that you've built up on on on on the app and then the same business has like another app which can be complimentary to the uh to the first St like that should be where the yeah the token should be like easily transferable and then um disguise like loyalty points or some form of like um web two points that users should be like really uh easily understand um but yeah behind the scenes like I think that should all be abstracted way and then the most important thing is that developers

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    should make uh should uh yeah for developers it should be very easy to adopt that so yeah that's how I see it yeah I agree I think maybe to just paint a picture um you can imagine applications which now in inside them aggregate kind of experiences and you know smart contracts uh from different chains you know be that tokens or uh actual you know D5 Vols or uh some kind of you know games uh that use things from multiple

21. 10:15

    chains but as a user you don't need to think about the kind of underlying infrastructure I mean the the the example I like to use is when you go to Netflix and you know you're choosing a movie it's not like you're first choosing a data center CER from which you're going to watch uh then you like topping up uh you know money on that data center uh and then you know the data center actually is like too busy right now so you need to like top up

22. 10:39

    more um no you just choose a movie and like actually it it underneath routes you to the data center that's closest to you that has this movie and streams it for you so I think like we really need to get to that level of experience and then yeah you can have like a subscription on top of it or some form of um you know whoever provides you this experience can take a uh you know a fee

23. 11:03

    when you're like transacting value and then and kind of pay for the infrastructure under the hood uh and you still because like all of this pieces like underneath are still permissionless you can interact with them without this but this kind this gives you this really easy experience on top I think um dab dab is really good example of this where they aggregate over 14 different layer twos 150 smart contracts all-in-one experience and really provide kind of a

24. 11:34

    single single place to you know see your assets your interactions across all the chains um and so I'm really excited to see kind of what can we do that really transformed that I think a really kind of interesting examples of of of this approach is how does this push when we start talking about for example social right uh we have you know near social forecaster which are doing this like this thing where you can like embed applications directly into your feed right imagine you like you on

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    Instagram right you have your account kind of web3 account and you can actually like transact directly and interact directly with some of the posts there so those experiences and you know the posts may be coming from different chain they're like nfts or maybe they're like um applications themselves that uh do something when you interact with them but of that is kind of hidden from the user and really just allows you to um

26. 12:34

    kind of easily experience uh and engage with it so that that's kind of where I'm like thinking okay how do how do we push this kind of experiences to to the end user get in in front of them and really enhance the kind of uh the experience that we want and and then go for all of the users yeah yeah yeah so I think maybe worse talking about developers here right because I think there's a there's a spectrum of um like technologies that really form this you know as as we called it last week

27. 13:14

    cake uh chain abstraction key elements and so for on your side right you obviously offering kind of n SDK for developers to leverage um how do you think like going forward um how do you think developers will be engaging with this uh and like what what what would make it even easier right um to ensure that we can on board a lot more developers building on this yeah I think for developers um like these days I'm seeing three different uh like VM demands right so there's

28. 13:56

    obviously evm which is the most popular and then I think svm is starting to get popular as well and there's move VM led by like flow aptus and thenu um and then they'll be more right like Cosmos and um and I think for developers that are coming into the space not the core web 3 developers they already know which changed the build on top they're very familiar with it um but also for them

29. 14:20

    how we're looking at looking at is like maybe we can improve the developer experience for them at least on the SDK integration side uh but for the new ones that are coming into the space um I think it's important uh to have them really focus on what kind of t or app they're trying to build um some may require like high scalability uh requirements right some may be more interested in certain protocols that

30. 14:43

    they're that they're uh yeah certain protocols that they know of in certain chains and how they can use that um so ideally how we're thinking about is like maybe in the future developer comes in there like these preferences um and then certain requirements that they they they check check the boxes and then we we recommend um just the SDK right away without even needing to like expose like um like like all the chains the other

31. 15:07

    way to think about is like how developers they want to use like JavaScript and made different sdks U maybe U like um we can I'm not sure if it requires the abstraction of the chain like I know there's like chain sdks we already present today but maybe like that can be abstracted away in as like in a form of like um yeah going back to requirements and then I don't how we would call that but like slightly abstracted SDK where they can just focus

32. 15:33

    on focus on the building right away right and hopefully in the in the future like the gas cost and like the bridging all that can be uh abstracted uh as well um so that developer can really just focus on building the dab and focus on the use case because I think even right now um the most popular use cases in web 3 are more like uh D focused I would say um we're starting to see I would say since 2022 after the NFD schol market

33. 15:59

    and uh after it brought like mainstream awareness um around nfts uh we've seen a lot of businesses like even Fortune 500 companies that came in and then uh wanted to implement nft whether as a loyalty or like as a as a data play um or as like a just a simple digital collectible um and it's great to see them coming in but at the same time I think um it's very important for all of

34. 16:24

    us to promote um Innovation around the use case um I think even to this day um there's a lot of infra Innovation going on which is still very important like a couple years ago like gas costs were being talked about the gas cost as in like the high gas cost I think that really um prevented us from being able to think about the new use cases use cases like the potential the use cases

35. 16:48

    but I think right now with the l2s and l3s like gas costs are starting to come down I think it's still high uh but eventually I think it should be a lot lower and I think it will get there uh at the same time I I do see like chains more like verticalized and um I think that would be like a site of tool that um like strengths that uh developers can distinguish and use so yeah that's that's how that's how we see it for sure

36. 17:12

    yeah I mean you mentioned CH abstracting the chains that's exactly what n is doing with uh kind of our suite um offering a way to pretty much with one account to transact and interact with applications across like any chain with smart contracts and any chain yeah um as well as you know own assets and and engage with them uh and that that a very powerful primitive because yeah it pairs up well with uh kind of the model uh you

37. 17:42

    guys are pushing forward but then offers a whole spectrum of kind of like experience enhancement right and and and a lot of new developer uh kind of application that people can build everything from multi-chain interactions to you know being able to pay for transaction fees with assets on different chain to actually having kind of a you know one account to and you can navigate anywhere in the whole web 3 uh to transact with it so yeah like just to add on like um like we as I said like

38. 18:20

    there's 4un 500 companies that we've been working with and they're on different chains and one question that they always ask is like I think everyone is everyone knows that for web 3 to flourish like it has to be like interoperability has to be tied into it and that's a strong value prop of web 3 um and right now since these businesses are built on different chains even if they want to work together there's a lot of Plumbing to be done and um beforehand

39. 18:45

    to be able to achieve so so I hope that like with chain abstraction um when these businesses want to upgrade but also the new business that are coming in like that hopefully that's not a problem at all um and I think that's going to be a strong that we can use on the magic side to to be able to enable them and then um actually see interoperable use case happening within Fortune 500 companies I think that's going to be like really strong for web and really

40. 19:10

    great for web 3 because we've seen that in in the djen market in web 3 and and how grateful that was um in terms like defy and nft so yeah I'm really excited for that yeah for sure I think the ability to pretty much with one account you know to own an nft on polygon that gives you some loyalty points that then you can use on you know optimism that then potentially something happens on near when you do that like that that

41. 19:36

    kind of experiences and making sure that's really simple to build um that that's will be a pretty big unlock um and really tieing all those pieces together so yeah really excited for this let's uh let's make it happen um what has uh kind of on your side been um questions and concerns around uh security right because I think one one of the challenges the space has is it it we promote security right we talk about

42. 20:09

    decentralization but then um at the end we need to like day-to-day secure users um so I'm curious kind of what have what have have concerns been and also like how you're addressing this and how you focusing on this yeah it's very interesting um when we started out as Port Matic um in the early days like that was more like a single sign on wallet um that um offered email logins like SMS login Etc and for that magic

43. 20:39

    owned the ux and UI so we had uh the ability to add more security controls um and then yeah be able to protect our users but as mainstream onboarding as we've been diving into more about mainstream onboarding and as we've been working with more uh like web 2.5 businesses and Fortune 500 businesses the requirement is more like they want the wallet to be fully hidden right the concept of all we three to be fully

44. 21:03

    hidden and that's a tough task when um it's a single wallet like Global wallet being offered because for certain people uh they want to complete Highway everything they don't they don't even want to show let's say like Wallet transaction signing uh modal right so in that case a bad developer can potentially trigger a like SDK method that can withdraw user funds um and um I will say even to 2022 I would say most people were storing Assets in eoa I know

45. 21:35

    there's like canos save Arin Etc where um um crypto Savvy and people that are aware of security would be using that or obviously Ledger as well but you know like the most mainstream they would be storing all their Assets in EA and then that made it very challenging for us to really think about how to um yeah how to how to serve this web 2.5 with their ux requirements and how we're tackling now

46. 21:58

    is um we have dedicated wallet which is really like the sil wallet that sits within the DB's scope so we give the dab the control over how they want to Define uiux and the attack surface area is not as big right and um the the dab that's servicing their users they are um yeah they're incentivized but also they're responsible for this the for defining the security of their users and really it's about onboarding it's not like we're onboarding them to you know transfer all the assets from the bank to

47. 22:30

    like web 3 that's not the main goal here it's the way we see is like uh beginner should be on boarded first and for beginner it's like a simple step it' be just like maybe buying one nft like through like a nft drop or like nft like secondary nft purchase or just even interacting with a dab that doesn't require any asset uh purchase like that's that's been the main um like General use case that we've seen so far

48. 22:54

    uh but going back to the security part like we have you know defi dabs and then we have uh companies that are from the fintech areas as well and for them we do have the security features that um are complimentary and additional um than like the the the main the main ux that we've been uh seeing with other businesses so far so how we've been treating it is really we provide Step Up security uh features for the da to turn

49. 23:19

    them on and I think that's a um that's yeah that's been a flow that's been working really well at least on The Silo wallet um space now when we talk about global wallet space this is where I think um there are a couple ways to go around it one is obviously like a like a global like a wallet um and I think uh in the future that will be something like PayPal or like um like um like VMO like Robin Hood or like WeChat like a super app that people will be familiar

50. 23:49

    with but for that I think the security will be um controlled with controlled by the business that uh built that service and hopefully in the future like maybe we can use AI plus like um um other like surveillance or like intelligence uh related um services to be able to smartly help these uh users um step up their security that does not require like a manual input it can just be automatically done and I think that can

51. 24:14

    be done either via VIA like a super app um and I think there's like a middle world where there'll be like a um good um Synergy between like Sil wallets and Global wallets so similar to let's say um when I talk about when I talked about like ax and like a marot like Marriot loyalty points I think that can be done with like a silad wallet but let's say like ax these like payment providers I think that could be more like a analogy that can be used to represent like

52. 24:40

    Global apps so users they know that they they use ax for their datto day and then they have Mar and all these other um like different use case focused apps and then and I think I think loyalty points would be just one form but tokens would be tied to both finance and these loyalty and I think that's going to be uh very great but yeah I think uh they should be able to easily move between Silo wallets and Global wallets and that's how I see the world going towards

53. 25:04

    um and then on the security end it'll just to just to take it all back and summarize for the silid wallets um how we're treating it is we have all the security features built uh developer can decide how to step it up for the end user for the global wallet um it would be the business that that would really need to own that responsibility of Define the uiux from the beginning on the security side so that's how that's the pos position that we're taking um as

54. 25:30

    currently yeah that's an interesting position I think we've been taken a little bit uh maybe different approach although some some components of it are similar um so one of the things we've done on near from the start is we allow multiple access keys on an account so even I mean uh kind of any single account can have you know as much as much access key as it can pay for and that allows to do

55. 26:02

    few different things so the example that you described right where you know you want to have an app that potentially sends transactions um and uh you know they're they're hidden from the user like the user doesn't confirm them they don't go to like external wallet uh so this actually works really well with having kind of P like limited access Keys which specifically work for like sending a transaction to a SM smart contract so like we can actually limit it to only

56. 26:31

    send this to Smart contract pay up to this much gas and you know to this methods and so we have for example games and and kind of even an order book uh decks where you deposit assets first right and then you can actually trade within that with this limit access key without needing to go and sign every transaction so I think that approach has a lot of Merit and then the kind of what

57. 26:56

    we launch was chain abstraction is this idea that actually like we we have remote accounts right that kind of the network signs for and I think the cool cool kind of approach there will be indeed having kind of a single address per interaction and so if you have privacy for those linkage you can actually have now a way to detach accounts between different interactions which which I think is probably one of the most absurd state of the crypto that you know if I send you some money for coffee uh then you now know everything

58. 27:32

    I've done in my life every single thing I've invested or or or or AED into and so so like actually being able to like still control it through one account right have one wallet uh from a user perspective but then kind of detach all that interactions on chain I think is like really powerful um approach and I really hope we can we can get a lot of this uh kind of in production you know this year to to Really enable both privacy but also the kind of the the the

59. 28:06

    experiences you just mentioned right like you know you're using different you know cards or whatever on different places and just settles underneath right without without you as a user like oh I need to pay now my bill here or whatever so I think those are definitely like an important Direction Where We need to continuously refine The Experience because I think this is this is where my I think

60. 28:33

    personal view of web 3 maybe clashes a little bit with you know when we talk especially folks that you mentioned right that want to hide web three completely in their apps is like having a single account is so powerful because it enables this composability that you cannot do in web 2 and I like it's totally understandable that like when we on boarding you know especially Fortune

61. 28:58

    500 companies right they want to have their own account for their users they kind of have a way to uh potentially like uh reach out to them Etc but I do think figuring out how to make that transition into like a single shared account is really important uh because that's that's actually where the value starts to really flow and like as we as as we discussed before you know if that user also using another thing which potentially on another chain if those

62. 29:28

    are different accounts like now linking all of that back and being able to interact with uh different like nfts here loyalty points there it's just becoming super complicated um yeah for the user right like a user you need to go and like link your account somehow and kind of prove it and then like your potentially your interactions now require like signing or like going into multiple apps right to

63. 29:51

    do stuff so so I think like supporting a way to link accounts is is uh powerful one of the things I mean with remote accounts we can do actually is we can pass ownership of remote accounts if they are created properly or like created in a specific way so there is an option where you can actually unboard uh you know this this bigger existing like existing user based clients and then user kind of merge their account like

64. 30:25

    that account in with their you know main account like later um so maybe an experience like that would be interesting where you kind of start like fresh but then you merge it back into your uh existing system yeah I agree like I think uh like the single account um really unlocks the value props web 3 and also that's just going to help level up um just the industry overall um from where magic uh is currently at um how we

65. 30:56

    see it right now when we talk to the these businesses and forun 500 companies um they first want to build their own ecosystem so I think what you said applies um at a smaller ecosystem uh to begin with so like maybe like definitely we can work together and let's say like Mattel like they would have Mattel market place and then they would have L different Mattel like uh divisions and they want that interoperability to be first happening within their ecosystem

66. 31:22

    and that's what we see as the next step um um for for this year uh likely and then I think in the future we want that to be even a bigger ecosystem and it's just one like single wector ecosystem and I think at that point like the single account will be very powerful and we always like to say like the graduation path like beginner to intermediate to expert um and Magic how we can contribute to web 3 and how it

67. 31:45

    can be uh providing value for the web 2.5 companies is really focusing the focusing on the beginner level and so far yeah just to reiterate The Silo wallets and then the smaller ecosystem has been uh more of a demand for us um but yeah like the features that you've said I think will be very helpful um for us to unlock these uh experiences awesome uh so maybe we can kick it off to see if people have questions uh I think like I I've been talking a lot about chain

68. 32:18

    obstruction so uh especially uh last week in Denver so I'm I'm kind of interested to see what what are the questions people have and maybe we can answer them