[REDACTED] 2024 | How Chain Abstraction Will Power This Cycle s Defi Blue Chiips

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1. 0:06

   hello everyone can you guys all hear me yes all right cool mik's working welcome well we have a uh very exciting day time today right talking about how chain extraction will power this Cycle's blue uh D5 Blue Chips and want to welcome you know three great um speakers here from very worldly kind of VC funds and maybe we'll start off with some intros first uh we'll have connley hi everybody my name is Colton I'm a principal at Arrington Capital we're a web 3 Venture fund and hedge

2. 0:38

   funds uh been around since 2018 we are investors in near um from the early days and uh really excited about everything they're working on with chain abstraction and uh moving D5 forward awesome thank you Richard hi folks uh Richard M from uh fabric Ventures um I'm co-founder managing partner there um we've been uh operating in the what we call the open web space so specialized compute um Sovereign

3. 1:08

   self- sovereignty and AI since about 2012 actually and uh I've been also on the the near Foundation Council for more than five years now so I'm kind of bag holder and you know got responsibilities uh uh to boot excited to be here apparently there's uh 31 um, people online watching which fantastic um I hope that's not measured in the same way in which tvl is is measured all right James hello one uh James W founder and the CEO of DFG so we

4. 1:41

   are a a billion dollar investment firm uh in the industry for the last 10 years uh we've been only investing into a few protocols like Bitcoin ether and near as well so we'll be excited about the future of near and keep supporting the EOS system awesome thank you for that hello everyone my name is Mark me I'm the head of part Dev velopment VC and investment relations here at near Foundation um and really today I really

5. 2:05

   want to talk about chain of Attraction and Defi and if you guys were live watching yesterday kind of the uh I think demo described them as the near ecosystems Avengers uh highlighting kind of what went live with the intents and chain abstraction I think it's really exciting kind of interesting of what it could bring about so first question for the panel is really to see what's your guys' view on the current state age of chain abstraction and what would you

6. 2:31

   guys be most interested in you know whether it's from a fund perspective or maybe from a personal perspective um and excited about that so why don't we start off with uh James yeah I think this is still very stage for for CH obstruction so the point is like we have a lot of new users coming to space right so non crypto people coming to their crypto space But first you know they just download the wallet now you using the

7. 2:57

   you know using the token using probably one channel one app so in that case we probably don't need CH abstraction course you can do that you know you probably use You Know download met mask and uh kind of just un need unit swap for trading that's easy but once you know you have more users kind of diging into further into the crypto ecosystem you will see that it's extremely hard for you to use kind of multiple chain

8. 3:22

   and use multiple app it doesn't make a lot of sense for for for user to download like 10 different you know uh wallet or 10 different kind of app you know using that through each wallet that's makes things extremely hard so I think that's how uh change obstruction come into place so I mean we are still uh at relatively early stage for for kind of solving the problem and I think

9. 3:45

   this is extremely important because you know there are there are two ways basically to um to improve our industry the first is you know as I said is bring the users kind of outside uh crypto space into the crypto space which you know Bitcoin ETF is ETF is doing great job about unboarding more people but more importantly is letting the people in the industry use using kind of more than uh uh um one protocol or one app so

10. 4:11

    it's more about like a you know turning a like a single Chan users to a multi Chan user single app user to a mul Chan uh users then you know that's how why you know chain abstraction become much more important I think we still have lot of uh you know room for the CH projection to to make Improvement make you know everyone is extremely easy to actually using multiple dep on on multiple chain okay so so I mean highlighting the point is more first getting more users on and two is really

11. 4:41

    improving the user experience so they can actually do stuff across all the ecosystems things like that right Richard yeah so in some senses chain abstraction uh is one of those capabilities that is um just uh extremely necessary and kind of obvious that we we need and so and I think we'll look back to some degree and wonder what we were all doing for 10 years uh without it um um but that being said I don't think it will be a a damp squib at all I think that um we've seen several

12. 5:12

    examples um whether it be sweat or Cosmos I was looking at a ticking example just now of the potential to onboard folks who existing customer bases um and to segue them into the web3 world once we have a user experience that is acceptable to folks who really do not care um uh whether they're using web 3 at all let alone which chain they're using um uh but what they do care about um whatever if is a service

13. 5:44

    where they can um you know operate within a say secondary ticket Market where scalping is not taking place and they're kind of uh like to take a UK example where they don't have to pay over the odds for their Oasis ticket which just got launched recently and caused a lot of kind of controversy they care about that value and so the usability has uh has got to be there to support that um I think and maybe we'll come back to it in kind of more in a

14. 6:10

    detail um uh afterwards because I you know I agree with you know James has covered comprehensively a lot of the kind of the core advantages but I do think that there will be some applications we can imagine now that would just not possible before you had CH abstraction uh for example a core one might be if I have assets across multiple chains uh maybe that I'm even staking the different sort of sort of slashing um conditions uh applying to them that I might be able to kind of

15. 6:41

    pull all of those uh into one aggregated um asset base and then borrow against it you you know hypothecate it um an app that allowed you to do that on a continuous basis and you know maybe advised you the best way to do that as well from you know which you know uh lending protocol to use to optimize yield for example that would be really fascinating and and if you could do that in a way that was web to digestable uh I

16. 7:06

    think you'd uh start moving us towards the mainstream billions that we're all targeting so I kind of love that point you know you sounds like Richard has been within the near ecosystem for a while because he highlighted multiple points where I think we have really driven home in terms of I guess easy on boarding and really focus on identifying users that don't really know they're even in web 3 right and so

17. 7:30

    I I think that's the core you know learning per se of of you know going through let's say doing BD and web 3 for the last two three years and and and highlighting those factors right and so we'll go to Colton and see I guess what's your take do you have anything you know different you want to present or kind of what yeah what do you got yeah I I think my opinion on this is that it's all about the user experience

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    and ux and that's what chain abstraction is really going to revolutionize if you think about where crypto was just a couple years ago we were still trying to build cheaper more efficient block space and that's why near originally was so popular especially among investors because of the innovation of sharding and uh being able to have a blockchain that scales so efficiently um now we have basically

19. 8:17

    commoditized that block space so you're not going to differentiate yourself as much by just offering cheap fast block space to people instead you're going to differentiate Yourself by offering access access to interesting applications that people want to use and if you're an application I think that chain abstraction is the best thing that's going to happen for the application layer specifically because

20. 8:40

    you're going to have users who previously they wouldn't have wanted to jump through a bunch of Hoops and have to do like 10 clicks and a whole research project in order to figure out how to actually onboard onto your app let alone use it instead you can have all of this in a unified experience somewhere and a wallet that somebody makes it really easy to onboard with where maybe you don't even need to be managing your private keys and you could be signing with you know an a an

21. 9:05

    application that's built on some different signning like signature curve so I think that there's a lot of really cool applications that are going to come out of this and it'll be the best thing ever for actually getting users into those applications um and so I that's why I'm really excited about what n's working on with their chain abstraction solution is because they could basically be you know that funnel that then gives access to all of this other block space

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    elsewhere um so regardless of where the liquidity is at I don't think it really matters that um you you know get unified liquidity once you have chain abstraction uh it makes the user experience very easy and then you eventually get to the point where you don't even realize that you're using web 3 and you can put it in an iPhone app and it looks the same and feels the same as if you were using Robin Hood or

23. 9:53

    something like that so so I think user experience is always something that's been really brought up and that's why you see so much infra that's been invested in by VCS like yourself to really see how we can onboard more users to this point right and I think that's something that you know we have concluded that you know we definitely need to improve on and and really add more value too can right can I try like

24. 10:15

    a a different take take on that like we can all agree vigorously about the importance of the user experience and how this is just necessary to get to the next level but actually there's another argument that do we really care about the user so I I think there's one argument that in particular and this is relevant to redacted and to you know n's mission to deliver on you know a chain that's eminently suitable for AI and and

25. 10:39

    to deliver on you know user owned AI is that the user part of the web human web is going to be microscopic in comparison to the machine web you know the agentic sort of you know part of part of the web and um and I kind of lend on a few people to ask them of of things that might be uh you know new things that are possible in this sort of new chain signatures environment or chain abstraction environment and one would be um ensuring that you have um sensor

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    resistant you know verifiable um agents within you know this environment on chain um using CH uh chain abstraction chain signatures in particular um and if you think about it if we're going to um and it's just sort of kind of a side point I stumbled into thing I've I don't think I've actually used it on stage before but I've mentioned a couple of people people talk at different rates but the average human communicates at 40 bits per second um you know the you know

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    obviously the machine web is going to be you know many thousands of orders of magnitude faster than that so just to give an idea of how how different it's going to be to to people trying to envisage what this is going to look like and I think that's what we're building towards and I think in particular the intersection of AI and web 3 is about that machine web so having an environment that is trustless or rather you can trust the agents to be doing

28. 12:06

    what you think they're May to be doing is going to be absolutely crucial so I think that's an interesting one as well so I wanted to highlight yeah so I mean that's kind of crucial in this topic as well because we're highlighting kind of the defi aspect and how maybe those agents how Chan of extraction all kind of runs into that and I'm sure we're all familiar with the current landscape of the defi applications and kind of where that goes so I would love to talk a little bit more on that point too on

29. 12:29

    James what's your take on the current defi side what do you see you know would be more interesting next because I think the Playbook that we've seen currently has been just you know rinse and repeat and not as exciting right so yeah I I think defa have a very very good future I mean if you take just take a look at data right now we have about like 100 billion in TV uh but at a peak of 20

30. 12:53

    21st we have 180 so if we going to hit hit a new alltime high it probably going to grow their TV to another 80% which is a lot so I I I believe we will uh see the alltime high in uh for the TV uh in this cycle um the other good things it's it's probably more like it's it's a little bit non- crypto things I think Trump get elected as the President of United States and she fully supporting uh self custody I think this is actually

31. 13:23

    very very important for the uh infrastructure for for for for defi because as some stage in the past few years we discussed about maybe the potential kycs for people to using like decentralist apps which I believe will be a bad things for for this kind of you know because you basically limited people's rights to using that but right now I think with all you know policy being very friendly and you know the president of US supporting self custy I

32. 13:53

    think defi do have very very you know uh Futures you know and have a solid foundation from outside because they give you a very good environment to grow and on the other things we will have you know still new application in the defi space to come for example in Sienna you know in this circle doing pretty good good you know so it's not like we are all relying on the you know the previous

33. 14:17

    like a uh you know app like Dax Landing protocols but we are seeing new new kind of application coming to space on the D5 space so I think this is also a good things that we will see both innovation and on the on on the Poli policy side so I I personally I think def5 will probably see a very very good good uh very important grow in the future uh we have probably three only application exceed like a 10 billion TV right now uh including Lio uh alv and the other one I

34. 14:49

    forgot but you know I I think we should have probably at least probably unit Swap and a few others here like 1010 billion doll tvl to to in in the next few months so this is is actually my uh my my take on the def5 space right now I'm very very poish on it okay Colton yeah what's your take in terms of I guess how maybe chain oftion can change it or innovate it or you know come up with the new applications that you know

35. 15:13

    James kind of highlighted did you have any view on what might be exciting for you yeah I I think that ultimately the my opinion is still that chain abstraction is more of an access point to these apps rather than it's going to create a ton of like novel Primitives I think that maybe you could end up creating an application if it doesn't require on having if it doesn't rely on having a bunch of liquidity in

36. 15:36

    one spot you could take Primitives and make the multi-chain much more easily uh but ultimately you're not going to invent like a new way to trade because of chain abstraction you're going to invent a new way of getting people to access that trading experience through chain abstraction and wrapping it in something nice that people can actually understand and I think that user experience point is a massive point of friction like I try and get my dad to

37. 16:02

    use dii and he was actually the one who originally got me interested in Bitcoin back when I was in high school uh but he'd only ever used a centralized exchange before and um it like it he's a a really smart guy but it took him a long time to of like walking through with me like how to set up like your wallet what to sign like all the safety things you have to look out for what not

38. 16:25

    to be signing and if you had an application that just said here's a set of intents that are going to basically Define the boundaries of what your account can do and or it's going to set up a set of objectives you just have to review that and then you click and then all of a sudden that's deployed into this custombuilt strategy that you chose that's a much easier way I think to interact with these defy applications than all right I need to swap token a

39. 16:51

    for token B so I can deploy that into this protocol and then I borrow and then I Loop like 10 times and I spend 30 minutes like clicking through uh and then I have to move that to another chain where there's another app that I want to use like chain abstraction gets rid of all of that workflow it's a um so it's a real life game clicking buttons right guys I mean that that that's how you make money in this world apparently um so Mar I'm going to have to

40. 17:14

    respectfully disagree and push back again I think we keep on sort of focusing our attention on just the user experience and talking about it for humans and even saying that we don't think um there are going to be new ways of trading um I think and we had we touched upon it a little bit of this in kind of preparation I think we're underestimating you know the kind of Core Power of the kind of should we say

41. 17:37

    the web three movement is to is to be able to create marketplaces for different assets including you know possibly data assets and nonf fundable assets um and at the moment you know we've struggled even for example on Native nonf fundable assets to to create the liquidity that we need I think we're underestimating the the the power that that you know reaching a certain threshold of liquidity has in terms of things like price Discovery and people's comfort with using those you

42. 18:03

    know trading within those markets and therefore in that given Market coming up with new trading strategies because there's be something esoteric about that there'll be data relating to that market that is going to be different that means there are new trading strategies because they're different assets um and so I think again getting pre we're looking at our feet and not and missing the kind of the broader opportunity the you know the

43. 18:26

    couple of hundred billion kind of ass we've currently native digital assets currently got on chain is microscopic like maybe it's what less than a thousandth percent of all of the assets around the world commonly called in our amusingly in our space called real world assets you know that just the Assets in the world and and so I think the opportunity to tap into those where they're often nonf funable um and therefore liquidity I would argue I getting to better

44. 18:59

    liquidity because you can aggregate it and pull it using chain abstraction is going to be a really powerful Catalyst I'm not dismissing the fact that better UI for that and better ways of kind of onboarding the assets and tokenizing is important and better regulation but it's going to be I think a really important Catalyst yeah Ian can I can I respond to that yeah yeah yeah so I think you know you made this point that right now there's you know 200 billion or

45. 19:22

    something of liquidity on chain which is microscopic compared to to what's out there but if you're arguing that you need chain abstraction so you can aggregate that 200 billion that's already microscopic I don't think that really gets you anywhere the real issue is you need all of the other trillions of assets that are out there to be brought on chain and so if you're arguing that chain abstraction is going to aggregate liquidity from other chains

46. 19:46

    but it's aggregating this microscopic puddle then that's actually not solving the problem I've not I've not communicated what I'm saying properly then what I'm saying is that we don't know H how which networks and which chains are going to bring the assets on chain but most likely it's not going to be one chain that does it it's going to be lot you know this we're going to still exist in a multi-chain world because there's reason for that specialization and there'll be a particular capability and out built you know whether it's be real estate or

47. 20:12

    Forex or whatever we already see that obviously and so therefore they will be brought on board but then we can aggregate them between different chains and different players because we' got chain abstractions the argument is basically that you're future proofing all of these chains so no matter where the growth happens we're ready for it correct you're kind of putting it together we're we're we're catalyzing the growth because we're ready for it across many different chains exactly I

48. 20:37

    think that makes more sense yeah yeah yeah I mean it was my fault I mean I I didn't see that you guys were you know on opposite sides I think you guys were more talking about two different points right and and at the end of the day you know I think all of us clearly agree that we do need more assets on chain and from there how do we ensure that there in in order for there to be more assets on chain we need to find a way to make it easier for everyone to access everyone to use and even transferring it across different

49. 21:03

    boards right and so we're kind of running up on time with our last three minutes here would love to see or ask I guess what would you guys like to see within chain abstraction maybe being live or that users could use and that could really bring on the large volumes that you guys speak of here um we'll start with James yeah I think the uh the super app you know when near there is

50. 21:26

    extremely gr I think there's lot of uh things has to be improved you know uh on different wallet I mean uh when I use the near wallet I feel like you know what as M base and others I think that's have very good user experience so for people extremely new to the industry I I feel like giving them the best user experience is I think do the most important thing for them to using multiple app you know for you know

51. 21:55

    people are just I'm I'm not criticized but just people getting too lazy about doing things you know if I ask me to download another app You Know download another you know wallet maybe I'm refuse do that just because I'm lazy they are not using that but giving them the best user experience to solve the problem as in year is extremely good on this and I feel like next year will be a very very

52. 22:19

    important years for near trans abstraction become probably you know the I mean could be the highlight of the of the market uh don't get me wrong I'm the pretty big fan of AI I'm kind of a maxi I know what Nea does in as space is impressive about the ecosystem but I really do think CH projection on near next year is going to be a super important things and that could be a more realistic or more feasible things

53. 22:50

    to to achieve next year for the year and this could be the highlight for the near year and for the ecosystem I mean that's a great point I I just want to add cuz I know we about 40 seconds left for everyone but chain abstraction is e the kind of the step Zone to kind of what Richard highlighted earlier in terms of having millions of Ali agents to really transact and it's not just swapping and transa you know but it's more transacting whether it might be real world Goods helping you buy e-commerce

54. 23:14

    helping you pay for things like that's the whole you know stepping stone of how chain of Attraction will lead to that and it's not separate it's not two different verticals not two different things it actually is all aligned with a long-term Vision so uh 40 seconds Richard yeah so I'm going to stick to my guns and pick in particular real estate as you know real world asset um you know very big differences between different

55. 23:37

    markets you know hurricane risk in London not the same as you know Florida um and I from personal experience it's like such a a broken market in terms of information you you know at the moment because it's not on chain because you can't trust it the rest of it and it's all siloed in a horrible horrible way if we could catalyze getting that you know on chain I think that would be good um and and I think you know as I said that Taps into one of the the the real superpowers of of the space to bring

56. 24:03

    more radically perfect markets to bear on the world and I was trying to take an opposite position here I would I was just taking a leaf out of Michael Aron's book from history all right uh well I think in that example where we're bringing all these real world assets on chain which I do think will accelerate a ton now that we're going to see an Administration that's much more friendly from a regulatory perspective like we

57. 24:26

    could actually have this happen would love to see those real estate assets be brought into the defi ecosystem and I think that'd be really value additive to crypto as a whole because that's where like this big liquidity influx is coming from that you're talking about and uh once we're able to unlock that people are able to start borrowing against it trading it more freely uh I think we're really going to see an explosion of activity without having to talk to the

58. 24:51

    bank without having to talk to the bank or have any sort of the point we need more activity guys we need more things to do so thank you everyone for your time I think we're out of time here but I hope you guys enjoyed our discussion and thank you everyone here on the panel yeah thank you everyone