Sandeep Nailwal - Founder of Polygon: The Ethereum Merge and Future of Web3

Full transcript: Sandeep Nailwal on London Real

2:45 This is London Real, I am Brian Rose. My guest today is Sandeep Nailwal, the entrepreneur, software developer, and cryptocurrency pioneer. You are the co-founder and COO of Polygon, the scaling solution known as Ethereum’s internet of blockchains, one of the most successful crypto projects with the 12th largest market capitalization. Polygon has now addressed major scalability issues while maintaining incredibly low fees, and earlier this year successfully raised $450 million in an effort to pursue your goal of bringing the mass adoption of Web3.

3:17 You’ve also launched the Polygon ZK EVM, the first zero-knowledge scaling solution that’s fully compatible with Ethereum that will reduce transaction costs and massively increase throughput without jeopardizing security. You have said that the Ethereum merge is welcome news and will only amplify the need for Polygon as the go-to transaction layer for users and builders. And you passionately believe that a multi-chain future built on top of Ethereum is the path to decentralization, security and scalability.

3:45 Sandeep, welcome back to London Real. Thanks Brian for having me here. Really excited for this. Me too, I’m always excited to talk to you. It’s been almost a year since we sat down last time and you’ve been busy.

3:59 And a lot has been going on. So we got so much to catch up on. I wanna hear about all the success you’re having with Polygon and talk about a bunch of these issues like the merge and the ZK stuff. But maybe before we get started, I’d love to get your thoughts on the market itself because obviously we’ve come off significantly. We’ve had this crypto winter and I know you have some pretty interesting thoughts about market cycles.

4:24 You’ve been in crypto for a long time but like you must have the younger generation sometimes at Polygon coming to you, people panicking. Like, how do you put everything in perspective? How do you even think about market cycles in crypto and even outside of crypto? Yeah, so I think crypto market cycles traditionally have been governed by the Bitcoin hardening, right? So every four years, Bitcoin hardens, and at that time, like Bitcoin rallies, so a lot of other projects also, like their tokens and things like that rally.

4:58 Generally crypto has been that like and up till I think 2016-17 also there was the same thing even in 2020 it was governed by that but I think now in the last 2-3 years crypto has also achieved a great amount of I would say product market fit VC DeFi which you know the whole world The whole financial world has reckoned that this is something to be aware of and this could be something of future. There’s NFTs, gaming, brands now using NFTs, doing a lot of things, DAOs, so many protocols taking these community decisions to govern these consumer owned or user owned applications. So I think there’s a lot of product market fit.

5:49 So now crypto has started slowly correlating, crypto cycles at least have started more correlating with the macro world, like the larger kind of financial world. And I think currently what we are experiencing is the same. I think crypto remains pretty strong and steady as of now. I think the, you know, downturn you see in crypto is more to do with the macro markets and the liquidity tightening that is happening, you know, quantitative tightening by US Fed.

6:24 But I don’t think that there is any inherent or any special kind of bear news in the in the crypto market. So, you know, we are just following the macro markets in that sense. And you know, the markets will revive or kind of go back to normal only when we have full clarity. Right now, I think there is uncertainty that what is Fed is going to do, are they going to increase now 75 basis point one more time, it’s going to be 50 basis and all that. So we are just following right now the macro market cycles as of now.

6:57 And everybody believes even the macro market believe that this could be like, you know, maybe six months, one year, whatever it is. But I think even if it goes to 2023, when in 2024, there is Bitcoin, how winning is there. And now you have Ethereum merge, which is the second largest asset. And suddenly with Ethereum merge, the supply of Ethereum also is cut down very heavily. So I think this could be a perfect storm once the macro market uncertainty reduces.

7:27 And in 2023, you have like one year from Bitcoin happening and Ethereum merge has already happened. So a lot of things will be positive at around that time, alongside all of this product market fit. I’m fairly optimistic with that. Okay, so next year we’re going to the moon. I can quote you.

7:44 Unless, unless like macro markets, like there are fears of 1929, like, you know, depression. If we don’t have that, I feel, and we have like, you know, six months, 12 months, 18 months kind of recession, I think, you know, things should be very, very positive on the crypto side. But if we have like, 1979, like kind of great depression, then nothing will survive with that. Well, it’s taught me through like the last six months because in February, you raised 450 million.

8:12 And then in June, everything’s just hitting the bottoms, including Matic, you guys got down to like 35 cents. What were you thinking as all these things happened? Was the raise, I mean, that’s not easy to raise that chunk of money in those markets, but you did it. And then you kind of weather through that storm in June. What are the kinds of things that’s going on in your mind when this is happening?

8:31 Yeah, I think when I went out for that raise, This calculation was in our mind, like we did the raise in like last year actually up to a number when the market was still booming and you know the kind of things we were building like you know this thought actually we still had decent treasury right but the kind of things we were building it was very clear in my mind that you know one of the largest I so we have our co-founders meeting regularly right so where you know I list out all the risks that we have right. So this was one of the risks that we had like, okay, you know, we are doing great work. We have, you know, now we are pioneering building pioneering technology, cutting edge technology on the zero knowledge side and things like that.

9:14 And what can be the worst that can happen? Of course, there are other risks like hacks and you know, traditional crypto and any startup related risk. But this was also one risk that what if like, you know, world goes into a massive kind of recession and we end up not having the enough bandwidth to hire the talent to build it. And that was a thought process. And that’s why we thought that, okay, the markets right now are good. Let’s go ahead and reserve at least three to four years of runway. Like I assumed a one and a half to two years recession in between. So I thought that, okay, we need to have a runway of four years and not only runway, but an aggressive runway, which actually, you know, with which we not only like build, but we build and dominate, like as a community, as a polygon platform, we are able to not only build, but we really go hard in terms of getting the adoption, which is our ultimate goal.

10:10 So I think that was a thought process. And I think that in the hindsight, it played out well, but you never, like as they say, hindsight is 20-20. So it was kind of a stroke of fortune also, or luck that we raised just before that. And after that, it would have been very difficult to raise this kind of runway after, you know, let’s say that the markets turned bad. So, yeah, you’re lucky that way.

10:37 Yeah, that’s not luck. I mean, that’s the experience of your team because it’s very, you know, it’s very easy as a human to not raise capital in the bull markets, right? It’s just the good times are gonna roll. You got plenty of cash coming in. No need to worry about that right now.

10:52 It takes discipline to raise capital in a market like that, right? Yeah, yeah, I agree, but I think that I am actually not that good at the end discipline in timing the markets, to be honest. But the kind of things that we were doing, like, you know, it was very clear to me, like these things like the products we are building, they were screaming to me, I feel like I am not that, you know, I would not say that I was like that forward looking and all that, but those products were like, you know, we need to be done justice with this, like we need like this kind of another way.

11:25 So I think that I also thought about it, Like, you know, to be honest, my mind was like, you know, why do we need this money? We have decent treasury. Polygon is like, you know, is now a very good valuation. Whenever we need money, we can use this metric to raise money in the market side. But then again, like, you know, I could not have or we could not have, you know, risked our products, like, because, you know, we are very, very, very bullish on the things that we are building right now.

11:49 And we definitely feel now in the history of like four years of our, you know, this organization, the group which started Polygon, that today we have the maximum amount of opportunity. Like previously, we were doing a lot of things, but now we can see this, like, okay, this is there, we just have to walk this path and not screw up in between, right? So that actually helped me in that. Yeah, I mean, probably maybe one of the first times ever, you can literally clearly see exactly where you’re going and where you need to go, and it’s just about execution.

12:23 Whereas a year or two ago, maybe it wasn’t as clear, like you knew where you were going, but now you can really see it, it’s happening, right? Exactly, and it was true for the entire crypto industry, to be honest, like at that point in time, like nobody knew exactly where the world is coming, how much adoption is going to happen. I also used to debate with myself that, you know, are we going to have like a AI kind of cycle? Because you remember like, you know, I think you used to have a television show, I always quoted the, you know, the, the small wonder, right.

12:54 So with the ways the younger sister, like as a kid we used to watch and we was a, the younger sister is Wiki, who’s a AI. So, and you know, since then people are saying AI is coming, AI is coming, AI is coming. And then it’s been like 20, 30, 40 years. And even now you’re saying AI is coming, right? So I thought, because blockchains and web3 is also a fundamental technology.

13:15 Like, you know, blockchain, I even say that, You know, at times blockchain, I don’t even think of it as a as a separate technology. It’s basically kind of a revolution or a kind of a way to do things we figured out in this digital world. And you know, you don’t really know like when it will fully blossom in terms of its that like two years, three years back, we did not know till DeFi broke out, NFT broke out, gaming broke out and all that. All these were just ideas before that.

13:43 So that nervousness was there, but today, in terms of what markets need and the demand, as well as what is the demand, and as well as what markets need, what do we need to get these next, like 100 million, 200, or maybe a billion users in web3. Like we see the demand, the demand is there. Right now, infrastructurally, we are not ready. That is what Polygon is working on. We are looking to build that infrastructure, which can take these 100 million, 200 million users.

14:13 Today, all the blockchains combined, whatever it is, like Bitcoin, Ethereum, Polygon, Solana, everything you combine, they can hardly take five to 10 million users, daily active users. If you go beyond that, then most of these chains will start having experiencing issues in terms of gas fees, smacking up in some of the chains we see that the chains keep going down all the time and all that. So because the scalability is not there, with the things that now ZK unlocks for us, can clearly see that we can scale it up to in next two years to probably to be able to serve let’s say 50 to 100 million users right if we do it right executed properly in next two years we should be able to easily reach a place where we can say that okay apps go and build as an ecosystem I’m saying you can go and build good apps and then users will come and if the users come the scalability will be there not like before where let’s say crypto kitties breaks out or board ips, break out, breaks out, and then you have to pay $500 for doing that transaction, right, on Ethereum, for example.

15:17 So we’ll have that kind of scalability, and that’s why I’m saying that the path is clear. Reach that infrastructure scalability and let the ecosystem blossom. You know, after that, the ecosystem, I mean the app ecosystem. And in your mind, you guys are the only ones that are gonna do it. You’re the clear winner that can provide that scalability.

15:35 There’s no, there’s not a second place right now. I would say that we, there are other good teams also, but I think that, you know, our experience says that every one of them has some of the other strategic misstep that they have taken. Because also like, you know, one of the biggest strengths of us at Prolegon is that for example, I Gen-T, we are my other co-founder Gen-T, right? Like we are app builders. And then we, you know, did some acquisitions, this, that, and then we also brought in protocol people. So our team has a very good visibility, I feel like slightly better visibility of what developers want in the short run, in the middle and the long run. Many of the crypto protocols, infrastructure protocols are built by, you know, very deep, I would say even like nerds and geeks, right? So they want to, they are focused on building the best blockchain tech, not that much like they understand now, this is very important to actually get adoption. But I don’t think that that’s in their DNA. We have that in our DNA. So not only we build the tech, but we then go out and try to get developers to use that tech, right. So I think that’s a defining factor. That’s why I feel that we are like, you know, definitely ahead in the lead, because, for example, ZK Rollup also, we are the only team which has an open source, zero knowledge rollups already, you know, shipped out in the public, you know, there is a public test net coming in

17:03 And it will be a matter of weeks when we’ll be on the mainnet. So that’s why definitely we are, I will not be as strong as there is no second. There are some people of very, very good teams like, and we have huge respect for teams who are also doing this, but they have strategic miscalculations here and there, which we feel that the moment we are out and the kind of momentum that we have in terms of the adoption, we are arguably the most adopted blockchain today.

17:31 And the way we are going, like as a polygon ecosystem, again, I’m saying that the way polygon ecosystem is growing, if we have this cutting edge tech also live, it’s kind of the perfect storm for this to go to a next stage. And it becomes like, or it starts acquiring huge network effects beyond that, which becomes very difficult. For example, Ethereum as a layer one has those network effects, like even no matter what you build, what kind of beautiful technology you build, but the network effects that Ethereum has, it’s really, really hard to compete with them.

18:07 Like it’s like in the blockchain, in the programming languages, you have JavaScript, right? Nobody, like some people, a lot of people would be there that JavaScript was not a good programming language and all that. But today you see the whole world runs on JavaScript, like 90% of all the things that you are interacting the bigger things, they have JavaScript running on them, like your web browsers, everything is JavaScript, and the backend also JavaScript to cover.

18:29 So it’s about those network effects also. And that’s what like, I think we have a good window, I feel, once our tech is live with all this adoption, we have a very good window and comfortable window of building all those network effects and we don’t go really big. Yeah, well, let’s talk about Ethereum. I mean, we’ve called it the Microsoft office of the blockchain before just, you know, so people would understand that maybe, maybe it’s not the best technology, but when everyone’s using it, it’s the technology everyone uses.

18:58 And so you’ve always said that no other L1 is gonna compete with it. And I guess you’re talking about the Cardano’s and the Solano’s and the Avax’s and we’ve had most of those founders on here. But for you, you’re saying because of the network effect and the history and the developers out there, for you, it’s the winner, 99% chance the winner. Yeah, yeah, I mean, the other, the names that you just took for the layer months, in our mind that they are, they might have had some small opportunity like for a few months where they were actually able to create that kind of attention, all that.

19:32 But with all the, again, like few strategic missteps, mishaps, whatever, I think most of them lost that window. Like all the existing months, like in our mind, they’re already done. You know, there’s no chance for them to come back. Maybe some new ones also coming, let’s see what they come up with. But I feel like it’s extremely, extremely difficult.

19:52 I would even put it a 99.999, like, you know, 0.001% chance for anyone. It’s not only about the technology, actually, because that’s easy to build. The network effects is also okay. But the way Ethereum technology, Ethereum community has been built, the way it is decentralized, the way it has been decentralized, the decision making, the building, like in between, like, you know, people, some of the people became kind of negative towards Ethereum, because let’s say in the year 2016, 17, 18, 19, Ethereum, development was not going so strongly, so smoothly, because Ethereum became like a very true democratic system. And in these democratic systems, these are self-correcting systems.

20:37 So it became like too decentralized, too many people came in, and everybody had voice, there was no particular vision, but the community eventually came together, some of the same voices came together you know brought in the motivation and all that and if you see the last two three years ethereum community and this is so like amazing for me to you know even think that no single party is building it but ethereum somehow has been able to roll out such big updates like eip 1559 now we are talking about this much which is like humongous i don’t think that you know humanity has ever seen this this complex of software spread in this kind of complex environment and getting updated. This is again a phenomenon itself then you have EIP 4844 and all those things where community is now delivering. I argue that Ethereum went through its chaos and all those cycles but it was an evolution cycle for Ethereum and now Ethereum community is truly become really strong where they are able to deliver feature after feature and the improvement after it improve on the protocol.

21:42 So that kind of removes that advantage of these teams, which were like, okay, we’ll come fast as a unit and deploy and something. The second thing is that, as I said, I’m saying that, why Ethereum is so big is that people like me, in our team, people like the tech builders on our side, we are dedicated towards Ethereum. Why? Because we feel that it is our network. Ethereum, we are also Ethereum, right?

22:07 I don’t think there is any other network which has that kind of community. And we are just one of the small players, right? There are like layer two players, other layer two players, also some really, really amazing layer two teams. They’re all working towards Ethereum, not only Ethereum, everybody’s working towards Ethereum. So that’s again, like very, very hard to achieve.

22:25 Even the developers, like for example, all this documentation, millions of developers have tested built on Ethereum, right? So, you know, when developers build, they will encounter problems, they will post in the online forum, somebody will respond and things like that. And when you are building 90% of the time, you will encounter all these issues. You will simply Google that, okay, this, I’m getting this error. How do you solve this?

22:45 Somebody would have solved it. These are the things, this documentation gets built organically. There is no shortcut to that. Even if you put $1 billion to it, there’s no shortcut to that, right? You can’t do it.

22:57 So you have to go through that pain. Then all these hacks that you see on Ethereum, like billions of dollars of hacks, right? Though every hack, when it happens, it strengthens the security systems. It strengthens the auditors. Everyone has to go through that.

23:10 Solana recently had a very massive scale hack. I mean, kind of weird also, but very, very massive scale hack. Those kind of things, although have never happened on Ethereum, but other more sophisticated acts have happened, which has turned them. So that kind of organic growth also comes. And lastly, I feel it’s about not only us as product, who are product building, or builders who are contributing to Ethereum, But the true kind of libertarians who are, Ethereum community has been able to attract or who actually are there not to make money or anything, but to change the world.

23:47 So if you talk about any other layer ones, they can count on their fingers that what such kind of people in their entire ecosystem, like on single hand, I can say that they would not have people who actually want to change the world. On Ethereum, you have hundreds and hundreds, if not thousands of such people who are there to change the world, which like combining all these things, you know, subjectively and objectively, I don’t think anybody else is. All right, we’re gonna pause the broadcast.

24:15 I’m gonna go buy some more Ethereum right now and some Matic while I’m at it. So, no, you make a great case. You make great case, Sandeep, you really do. And, you know, I run an academy, a crypto and DeFi academy and I get my students, some of them have never owned crypto before, some of them have it. They go through hot wallets, cold wallets.

24:33 They set up centralized exchanges. I get them on a DEX and I get them doing DeFi trades and even options trades, because I want them to learn in four weeks by doing. The biggest complaint I get, of course, is the gas fees on ETH. And I always tell them, look, we’re gonna use this because everyone’s using this. Pay the gas for now because the learning experience is so important.

24:53 And once they see DeFi and they see this, they’re like, oh, wow. And I said, trust me, it’s gonna get better. You got the best people in the world working on this. You’ve got billions of dollars being dedicated. It’s got my man Sandeep out there in Dubai working on this.

25:06 And when it gets there, it’s all gonna be worth learning this system. And- And they can, if they have issues with gas fees, like now they can use polygon, they can use optimism, they can use arbitrum. These things, these Ethereum scaling solutions are already there. They don’t even need to interact with the main net. Right, right.

25:24 And so let’s talk about the merge because again, we’re kind of touching on it now and it’s important. And a lot of people don’t understand exactly what the merge is. So maybe we can briefly talk about what’s happening. Again, like you said, it’s a massive undertaking. It’s a huge piece of software that’s woven its way in all over the world.

25:42 And now it’s moving from a proof of work to a proof of stake, which is a huge change. But it’s also not going to increase the transactions per second that significantly, which means we’re still gonna need polygon in a big way. How do you walk people through what the merge is, what it isn’t? some of the risks involved, then when will we know if everything’s gonna be okay? Yeah.

26:05 So see, like one thing is very clear in the blockchain space, like after all this research testing and you know, products going live, battle testing and all that, is that there can be no single chain which can have all the transactions of the world. That’s not going to happen. This just not possible. And how we see, you know, the world, you know, there’s this web3 technology growing on at an internet level scale where like billions of users are there is that you will have this, this strong settlement layer, like where the value because we are building this internet of value.

26:43 We have this strong settlement layer, which is Ethereum, which provides you strong guarantees of your ownership strong guarantees of censorship resistance strong guarantees of decentralization. And once you have that plus strong, now it is adding strong guarantees of computation with Layer 2. What I mean to say is that when you use Layer 2 at the end of the day, you are doing some business logic computation on Layer 2. But the guarantee is coming from Ethereum.

27:11 So it is providing you everything. So how we see the world is evolving. You will have this Ethereum layer and on top of this, you have this hundreds and hundreds of and thousands of these chains where you can transact at a very, very low cost, but in high volumes. And all of those security guarantees are provided by Ethereum. That is how the world is going to grow.

27:33 So the merge, expecting that the merge will make Ethereum so scalable that everything can exist here, that this is already discarded by the larger community as well as the research community and everything. So what we need to do with Ethereum, so we need to understand that we are not, when we are doing anything at Ethereum level. We are not doing or we are not doing that to provide more scale for Ethereum as of now at least. We are doing this to make sure that the settlement layer becomes more stronger, becomes more greener, like it’s not like proof of work only and it can achieve larger levels of decentralization. We are optimizing for that at Ethereum community, right? More decentralization, more, you know, robust technology, more greener. That’s the main gain. And this, this one, the scalability is not even a design goal in this, the scalability, even Ethereum’s roadmap is moving in a way where we don’t do scalability at this layer, but we provide ways so that the other layer, the layer two can scale and still have all the guarantees from Ethereum. So that’s what I’m trying to, you know, bring home this point that Ethereum’s purpose or all the Ethereum core developers, the purpose is not to provide all the scale at this layer itself. The purpose is to make this settlement layer in a way that it is able to provide these decentralization, censorship resistance and security guarantees to other layers where the transactions can happen, users can interact.

29:07 So this merge essentially we are moving from a proof of work mechanism to a proof of stake mechanism. So the computation power requirements will go down by 99 percent, 99.9 percent, there are various estimates. And the way the Ethereum POS has been built is that it will be more kind of fair and will promote more equality because in proof of work also what tends to happen is like, for example, currently Bitcoin in proof of work, there are five or six large large mining pools which control all the mining power in Bitcoin.

29:44 Similarly, in Ethereum also with proof of work, this kind of centralization kind of slowly keeps on happening. Although there are economic mechanisms where in Ethereum also and Bitcoin, so both are fairly safe that those miners have enough amount of skin in the game to do anything wrong against the ledger. So that’s fine. I’m not arguing is that. But I’m saying that with this kind of POS, Ethereum has built the kind of functionality Although there is a lot of misinformation from some drivers that this will lead to more centralization from POW but it’s very clear to people who understand this proof-of-stake technology that at best it can be equivalent to what kind of centralization is there in the proof-of-work.

30:24 At best it will start approaching that. But in an average case scenario it will be much more decentralized than the way Ethereum has been built. The core goal is to bring this move from proof-of-work to proof-of-stake which is more greener Arguably can have more decentralization where even full nodes are first first great citizens not only the miners but full nodes are also first great citizens and there are lot of design theories. That is what Ethereum is trying to achieve. Not scalability, more decentralization possibilities, more sensitization possibilities and more computational readiness to provide security to other layer 1. Scalability is very clear will come from these layer 2s of the world polygons and you know other layer 2s of the world. Okay what are the risks and this is all gonna happen in the next week or two is are you worried do you lose sleep at night what are the risks and when will we know it’s gonna be okay and then what will happen to ETH on the back of it? Absolutely not like you know because Because this has been tested very rigorously, multiple testnets have been tested.

31:35 And for example, Polygon’s testnet is also on Gorli testnet. So when Gorli testnet migrated and our testnet worked perfectly fine. So it is also important to understand that the way this merge or this upgrade is happening on Ethereum, it does not affect any of the developers which are building on top of Ethereum. So no apps get impacted, no users get impacted. protocols like us built on top of get impacted. It’s like, for us, you know, we are above the surface, something is changing below the surface, we don’t even, we will not even notice that something changed. No change in gas fees, no change in maybe interact, no change in wallets, nothing.

32:12 So, so that’s why like, you know, the risks are, there can be like some very like, you know, kind of corner case scenarios that when it actually goes on the mainnet in let’s say one week or 10 days from now we realize that okay there are some opcodes which are not working or even like when it goes live on the mainnet the chain like that’s the biggest risk I would say is that chain gets halted so then the Bitcoin maxi group is like and that’s not really a very terrible thing to be honest like the community will quickly come back they will hard fork and then you know again the chain will start and they will have to do the merge process again so that’s a risk and that will lead to a lot of you know loss of value also for Ethereum in the technical in the shorter but that’s kind of the biggest risk and that has already been addressed by this rigorous testing already or not unless that happens I think everything else is is manageable like if the chain goes well it remains live it remains alive and uptime you know Maintains uptime and people are using it and later on we realized that there was some you know Kind of scenarios those I think will be that people will be able to solve them with the engineering solution So I am like 99.9 percent, you know confident that it will happen Perfectly fine. There’s no nothing to be worried about okay even with all the Bitcoin maxis around the world hoping and praying that it fails and so what what

33:40 So what will this mean to a Bitcoin maxi if this goes through OK and why would they want it to fail? Yeah. And I’ve had a lot of maxis on the show. I’ve had a lot of maxis on the show. So yeah.

33:51 Yeah. Yeah. And I think like, you know, I mean, I have huge respect for Bitcoin. Bitcoin only started this this whole thing. But I think somewhere in the middle, the leadership that that took over and all that, Like, you know, I think there are some strategic missteps we feel or I feel maybe, and I can be completely wrong.

34:14 I am nobody, like, you know, just humbly saying, just citing my opinion. But I think Bitcoin today, if you see is like that, they completely change the narrative to that it is Bitcoin, it is digital gold, right? So then when it is gold on Bitcoin network, you can’t really do transactions or you can’t do much transactions over there. And the only thing that Bitcoin has in its favor, or two things actually, is that, you know, one point that, okay, the supply is fixed, like we have 21 million dollar supplies that will be scarce and this and that. The second thing is that there is the Bitcoin as a brand. These two things are the core big things with Bitcoin.

34:57 Everything else, if you see with all this happening, how, because there are not many transactions in the network. So what is the incentive for the miners to keep supporting Bitcoin when the hard winning keeps on happening and the mining rewards become lower. Then the supply, okay, supply is also supply is fixed. That’s good. But in terms of the base layer innovation, there’s not much that is happening. Like, you know, recently taproot went live, which is also not that much of a big thing. And after like two, three, four years. So there’s not Not much, but they argue that the stability of this layer is actually the most important thing.

35:36 But if you compare that with Ethereum, provided this much also goes smoothly and all that, Ethereum has been able to successfully upgrade multiple good features into it. In terms of the supply, Ethereum supply is not only actually fixed, but it is actually deflationary now. Eventually Ethereum supply is going to be deflationary. think that people have raised a lot of questions like even Warren Buffet has said that Bitcoin has no intrinsic value. Whereas Ethereum if you see it has intrinsic value because it is the currency to use this massive world computer or the settlement layer of this internet of value. So it has an intrinsic value. The third thing is the Warren Buffet and these finance Vizzards have said that Bitcoin doesn’t even provide any yield, intrinsic yield.

36:27 If you see that with Ethereum, today, if you hold Ethereum, you can actually stake it in the network and earn the yield from the transaction fees. So it’s a yield-bearing asset. It’s a deflationary asset. It has actual intrinsic value. So that’s why it’s, and it has a good brand also.

36:43 Of course, Bitcoin is like way ahead of Ethereum’s brand globally, but Ethereum also has good brand. People know, whoever knows Bitcoin deep enough, they know there is something with Ethereum also. Whoever uses Bitcoin or invested in Bitcoin, whatever it is, they know Ethereum. People who are just like watching crypto from a distance, only they are the people who know only Bitcoin, right? But that don’t count. They don’t count the actual users who are there in crypto. Ninety percent of them who know Bitcoin or bought Bitcoin, they know Ethereum also.

37:11 So I think eventually the larger world is also going to realize, brand will keep growing and all that, that, you know, people are going to realize that whatever, for whatever thing, I think, you know, you are thinking Bitcoin is, has value or has utility, Ethereum also has that and some more, and much more, I would say, right? And it’s a matter of time. So that’s why I feel, and I have like no, you know, kind of hate towards Bitcoin. I’m not, I don’t want to be Ethereum maxi or anything.

37:39 But I feel that the way Bitcoin has grown in the last four, five years, the narratives or the things they picked up or the prioritization, Bitcoin community has picked up. I think they are going to be in the longer run, you know, they are going to realize that oh, there was some missteps, like, you know, I mean, and now recently I was having a debate with someone and then somebody said that what if we realize three years or five years from now that Bitcoin SV, BSV actually, or Bitcoin Cash were the better version because they were actually focusing on payments also, like, you know, they were trying to make Bitcoin Some sort of settlement layer where the intercontinental payments are being settled and Bitcoin could have been used for that but now because of the locked block size of Bitcoin they kind of put Bitcoin in a corner where it can’t even support the settlement like transactions over there.

38:43 That’s why I have my doubts on that and I feel sad for Ethereum, Bitcoin community, because they are also very vocal. The problem is that nobody listens to sane voices, like, you know, no, no, no, no, number go up, you know, that that community has become bigger. But again, like people like us who have huge respect for Bitcoin and all that, but Bitcoin did. Many of them actually migrated to Ethereum because of the community, the inclusiveness, the growth mindset and things like that.

39:13 Yeah, all right. I’m gonna pause again and buy some more aetherium if that’s all right. I’m gonna sell some Bitcoin and Bismatic you make a great case Speaking of Bitcoin versus aetherium. It’s a it’s a spread that I look at constantly because I teach defy and you know It’s it’s coming up to you know recent highs now. I think it’s about 0.085 right now And again Bitcoin recently hit almost its recent lows and of course the ethereum is up 50% from its lows what do you think happens post successful merge to that spread of ETH Bitcoin or some are saying ETH might completely decouple from this market and just you know go on its own what do you think that’s gonna happen not that I’m asking you to predict the price of an asset Sandeep but what do you think is gonna happen yeah I mean I feel that you know that the decoupling you you said I think there should be a market like sooner or later they will be not should There will be a rally in the crypto market which will be led by Ethereum.

40:12 Right now, all the rallies are led by Bitcoin. But sooner or later, there will be a rally. And this could have happened now just because the macro markets again became very bad. But after March, it could have happened with Ethereum, where Ethereum would have led the crypto rally. And, you know, the way for all the reasons I just told in my mind, And maybe like, again, I’m saying humbly that I don’t know enough, right. But in my opinion, whatever I know, I feel that it is highly, highly likely that Ethereum is going to flip and flippening that you say like flip Bitcoin as the as the rank one candidate. And that doesn’t mean that Bitcoin can’t remain as a, you know, digital gold or something. But all I’m saying is that larger value lies in Ethereum and Ethereum ecosystem. So, so that’s one thing.

41:07 When does the flippening happen? Your core question was, your core question is what happens when this, this number, so that’s why I’m basically, yeah, so I’m saying that in the short run, I can’t say that, you know, this like all time highs get, get broken and then Bitcoin or Ethereum rallies against Bitcoin and all that. I’m not even looking at those, you know, kind of of the trading pairs, I am more looking at the fundamentals and looking at fundamentals, it makes it amply clear to me that sooner or later that’s going to happen.

41:37 Okay, so if you had to, if I put a gun to your head and said, New Year’s Eve of what year does it flip? That’s market cap goes bigger than Bitcoin. What is that? New Year’s Eve of 23, 24, 25? So I would give one aggressive estimate than one conservative estimate, right?

41:57 So aggressive estimate would be merged. Aggressive estimate would be maybe Christmas Eve of 2024 by 2024. Okay, two years. To be able to like roughly two years plus something from here. Okay.

42:15 That’s aggressive estimate. Conservative estimate is anything beyond 10 years, like seven to 10 years, in my mind at least. and I’m happy to be proven wrong. If some people audience also they have stronger points against this like feel free to tag me on Twitter and you know send it to me and would love to hear more opinions and I’m a very kind of malleable person in that sense. I don’t hold I hold strong opinions but weekly if you give me a fact I can change my opinion but I feel in the longer run seven to ten years the way we are progressing this absolutely no doubt in my mind. So 100% I can I can say that 100% is going to happen by let’s say 2022 or 2032 and conservative it should happen between this you know by 2034 itself. Okay what’s your twitter handle by the way?

43:07 At the rate Sandeep Nailwal, my full name. All right so go tweet him now and tell Sandeep if you think he’s right or wrong about the flippity and all the maxis just make sure you jump in there. A couple questions for you before we get into the ZK stuff because that’s super exciting But um, I had Justin son of Tron on here six months ago and First of all, he said a bunch of things but he said I own more etherium than Vitalik That was one of the things he said and he said they should stay proof of work Because that’s working right and leave the proof of stake to us other layer ones recently He’s talked about the hard fork Justin will be back here. I think in two weeks What do you say to Justin or this concept of hard forking it or keeping it proof of work?

43:49 Yeah, so I mean To Justin Abudo always say this thing that you know, it’s about the vision of the community the vision of community ethereum community is actually to go to mass adoption like we don’t want to be In this, you know niche or this corner of this market where we are some weirdos And you know as a whole web 3 or crypto people we are some weirdos and you know doing some doing our thing in the corner I think ethereum wants to be globally recognized, globally utilized, and I can tell you one thing I can tell you very humbly that there would not be any person probably on this planet in Web3 who would have spoken to more developers, more enterprises, more application builders than me and my team combined. There’s absolutely no doubt, somebody could have done that. And we would be I’m not saying that, you know, nobody, I’m saying orders of magnitude, like probably 10 times any other team would have spoken to a number of developers, combine their number and multiply by 10. Like that would be the number that we have spoken. And with with large enterprises with Facebooks of the world, Instagram, you see that all of them are now, you know, building on, you know, Polygon and things like that. They all, like enterprises, we actually even worked with a fortune 50 company and then they built something using polygons open source technology.

45:21 But at the time of going live, they had this kind of revolt within their, you know, organization that, you know, NFTs are evil because they are proof of work. And then that is environmentally unsustainable now that we don’t even realize on a larger scale. And, you know, Justin can also like you know actually research more on this is that how much opportunities of adoption in the main screen have been squandered because of this narrative of proof of stake being proof of work being environmentally unsustainable so it’s extremely important if Bitcoin if Ethereum wants to go mainstream which Ethereum community wants to go and and you know be available in the mainstream and it’s not about like you know having this coordination you know having some you know number go up tokens and you know assets over there it’s about whether we can you know really bring the or the the kind of vision of the the forefathers of this industry like where you know everybody has more equal opportunity their voices are heard like you know individual rights and when i say i’m not seeing them as a rhetorical this thing like no everybody should have right like a political statement or something right i’m i really mean that like you know with Today, we spend 60-70% of our lives in this digital world where you and me are right now interacting through an application, and we own nothing of this application. How the way Zoom is doing it, they are recording it on your behalf,

46:50 Or they’re going to utilize it for something we don’t even know. Do we even know that when we are having a public conversation, but if there’s a private conversation, do we even know that Zoom is recording it or not, where we are sharing important secrets with us? So there is no, as users, we don’t have rights on the internet, and Vectri enables that. And these rights on internet matters a lot because we spend 70% of our lives on internet. And that is what Ethereum community is looking to achieve.

47:22 That’s why it’s very important to take this step. It’s a hard pill to swallow. Like what Justin is saying, what works, keep it today like this. But it’s not the right way if your vision is much bigger than this. So you have to take those risks, Swallow those hard pills and keep going at your to your to your mission.

47:38 OK, and the green issue is is a real issue because we hear about it sometimes and people say, oh, when people criticize Bitcoin, you know, they say, oh, it’s you know, people just turn their air conditioning off and it’s the same power. I mean, people dismiss it. But you’ve been dealing with top companies, Fortune 50 companies, and you’re saying it’s a deal breaker. It’s a deal breaker. It’s an absolute deal breaker.

48:00 And I’m not talking about theory that, you know, you do this remove your reduce your air conditioning so that you can power but because that is not practical. That’s not how human beings behave. So that’s not practical in the short run also, maybe in the longer imagine like, you know, 20 years from now, Bitcoin like nuclear fusion has been perfected. And then you can, you know, technically there is infinite energy in the world, right? Like, you know, then maybe proof of work might keep working or keep happening this way.

48:30 But as of today, I’m saying practically, it’s kind of in crypto, we say, Angie, am I not going to make it? OK, that’s really important to know. All right. Noted. I’ll bring this up with Justin when I talk to him in a couple of weeks.

48:42 If he’s not busy buying modern art somewhere or, you know, move into some island or something, but I’ll talk to him about that. You mentioned the partnerships you’re doing. So you’re enabling NFTs on Instagram, you’re working with Disney, you’re working with Adidas, you’re working with Prada. I mean Polygon just keeps coming up when you’re dealing with major corporations. This is big and you just said that you’re having 10x more conversations than any other blockchain when it comes to these things.

49:10 Talk about what you’ve been doing behind the scenes and what you’re hearing from these companies and why have they chosen you. Yeah, because it’s very clear that they are now very interested in this NFTs and this This metaverse meme has been the biggest kind of breakthroughs for crypto to go into mainstream and everybody is very interested in them. I can tell you very easily in five years from now, the way you have chief marketing officer or under then you have social media, VP of social media, VP of this thing, you will have VP of metaverse and VP of NFTs probably, CNO, you achieve NFT officer because this This is becoming a very important avenue of engagement with your end customers like, you know, there was a stat that Nike actually made 183 million dollars from their NFT sales and NFT purchases and giving these authentic digital ownership of these items to their end users.

50:10 Nike has also done a few drops at Polygon, then the second bigger is Dolce and Gabbana. They also have done, I think, $40 to $50 million this year, and purely based on an FTS. That’s purely, fully based on Polygon, right? And there are multiple others. So definitely, there’s a lot of demand from them, and only these things, because they exist in the real world.

50:36 That’s why, like I keep saying, sometimes our thought leaders in Web3, they kind of think that their eco-chamber, where they live, is the world, right? that’s a very small part of the larger world and I think as I was saying that you know because our DNA is app builders and our mission is mass adoption like when we were a fringe project coming out of nowhere like no silicon valley in the cell that even then I think that’s what we did always well we punched our above our weight and at that time also our mission was mass adoption like all of this like tech and all that these are these become commodities eventually but at At the end, adoption is our main mission. And that’s also like, as you said, that Polygon keeps coming on because that’s in our DNA.

51:18 Like everybody, when they join Polygon, they are thinking all day round that, how can we put, or how can we get Web3 in more hands of more people? Of course, that is dependent on what kind of tech our tech teams are building. But whatever scalability we are, and whatever we can do in terms of bringing more users to Web3 everybody of us strives very hard for that so as again like I keep saying it’s about the mission and we have very clear mission that we want mass adoption and that’s where we are not only talking in the crypto bubble we are also we are very big polygon community is really one of not one of the biggest probably the biggest in terms of adoption and developers with Ethereum but outside this bubble also we keep speaking to most of these enterprises whoever are interested and, you know, see how we can bring them on, on GoToCrypto, because you, you know, the people like you also, like who are in crypto deeply and all that, you would also, and who know that how the real world operates, you would know that the super cycle of crypto will not come without these enterprises also adopting into because they have billions of users interacting with them. If they are not a part of this, then this will never be mainstream. So that’s a very important part of the 3G mainstream. Yeah you don’t want it just to be a bunch of nerds in the corner with a trillion dollar market cap you want it to be global hundred trillion five hundred trillion

52:46 Market cap and you’ve always been about that that’s been the vision of polygon so to do that you need the tech the scaling solution the zk which we’ll get to and the big brand adoption and whatever it takes to get there scaling environmentally compatible whatever by any means necessary. That’s where you’re going. Yep. And you know, like we are all also not only working on scaling, we have polygon ID, for example, which we know that after the scalability is solved, identity is also a very big problem to be solved in blockchains. And after that privacy, right, these three are the key pillars. Once we have all of this, then we will be able to onboard because enterprises will not come without privacy. Like no enterprise, Walmart doesn’t want to show you that you know in a particular store how much how much eggs they sold right for example a particular month they don’t want to give you a better data but you want those transactions still to be in public domain and and that’s why you need privacy so these three things are there and we are working on all of them like for example polygon nightfall is specifically built for enterprises as a layer 2 public chain but privacy enabled right even though right now it supports only like, sorry, swaps and ERC-20 transfers and all that, but eventually we are moving towards a place where you’ll have a generic EVM, like Ethereum virtual machine where you can write your general generic business logic,

54:11 But it’s private. Okay, yeah, I think last time we even talked a little bit about identity. You guys have been working on that for quite a bit. What’s it like dealing with the Facebook people? It’s interesting because Facebook now, Meta, I guess most of my guests on this show have a, not a love-hate, a hate relationship because they see it as the closed metaverse.

54:30 So, you know, Yatsu’s, you know, circling the gates at Menlo Park and, you know, not happy with it. But also, I think that at least they’re ahead of the game when it comes to this. Also, I found out that Mark Zuckerberg now trains MMA and rolls Brazilian jiu-jitsu, and now I find myself liking him much more than I used to. What’s it like dealing with the people at Instagram when it came to the NFTs, and do they know what they’re doing over there? So, yeah, I mean, this has become a crypto rhetoric, like every crypto guy is like, you know, Facebook meta is evil and all that, like they keep beating that drum to score their engagement points.

55:06 But, you know, in my interaction with meta, they are hands down one of the best teams, not hands down, one of the probably in my mind, they are probably the best team. They have the best rep three and crypto team. Like when we spoke with them in their analysis all that, the kind of things that they are thinking, they are thinking 10 steps ahead. Like right now you are thinking, they are thinking that only like, okay, you know, they have these NFTs and users can use this NFTs and all that.

55:35 They are 10 steps ahead of that. They are thinking of so many, this thing and their web3 nativeness was very, very impressive when we interacted with them. They knew the fundamentals of the community, they’re fairly ingrained in the community. running joke and then this one was that you know I have used to say one of the Facebook you know employees that you are probably that 6 5 9 2 like big NFT collector like you know board abs collector so because you know we used to have those kind of jokes so they know what they are doing and hopefully this division gets enough support constantly keeps getting this enough support within their teams to keep doing the work or fulfilling the vision and you know not not let’s say get cold feet somewhere because it is like what they are doing is completely antithetical or you know to the kind of centralized web to worlds that they build.

56:30 They are embracing this in the two ways sense at least that’s the vision and the you know I was going to say that the vision wise they are extremely strong and yeah and if you see like now the kind of teams the quality of the teams you can already analyze that the the new L1s that are coming like this Solana killer, this killer, that killer, right? And I knew it was previous one I was saying that all are dead, like now you have new wave of this, like the two ones, both of them are ex-Facebook people and they have raised like gazillions of dollars like on day zero, like we raised like 450 after doing so much of work, so many things like many, you know, two, three of these projects at least 300, 400 million dollars just at the idea and development stage. So, and they are all Facebook people.

57:19 So you can imagine the kind of talent they were able, like I was so, we were so flabbergasted with that. The kind of talent they were able to attract in 2018, 19, 20, from the web free space is phenomenal, phenomenal. Even we have like many people joining in from Facebook and Meta. And I have nothing but positive things to say about that. Okay, wow, all right, super, super helpful.

57:44 I wanna jump into ZK because it’s a big thing you’re doing it’s it’s all part of this vision you’re talking about and scale into this 50 hundred million users sooner than later. So let’s talk about the ZK EVM. I had a conversation with Professor Silvio Micali of Algorand, I don’t know if it’s a competitor or not, one of the L1s who I think I think he came up with the concept of zero knowledge. He was explaining to me a little bit of the logic behind it but for people that don’t understand what is ZK and why is it such an important component of Polygon’s future? Why is it a gain changer? Why is it going to scale massively? Yeah, so for ZK, the the technology wise, like it’s a very, in a way, it’s a very simple concept, right? So right now, like cryptographically, first I’ll explain cryptographically, and then I’ll explain why it is so important for blockchain scaling, right? So cryptographically, you know, when you, what ZK does is that, let’s say you had few secrets, right?

58:47 I mean, you have one secret that you wanted to share with me and that secret is not only, I’m not even going into the privacy way. Let’s say you and me wanted to trust each other that you executed something, that means you executed a business contract as per the contract details, like what we both agreed. And then instead you gave me that inputs and the output. And you said that Sandeep, I have executed it exactly the way we discussed originally. And you will give me the inputs and output and also give me a proof that see, this is the proof I executed.

59:24 And imagine you had to do a large computation with that. Like, you know, you had to do 10 days of work to do arrive at the output. For me, if you are using ZK, I can simply take your inputs and output and take the proof that you are providing me and put it in my system and my system will say, no, this was executed perfectly by Brian. I don’t even have to execute it fully. I don’t even have to know actually that how you computed it, but I know that you agreed upon this particular, this is how you’re going to agree in a verifier contract and you execute it according to that, right?

59:59 So like, let’s say how, like, let’s say Facebook example, let’s say example of Facebook only that, you know, where we, and it’s a big example, but let’s say you have your news or newsfeed on Facebook. And this was like alleged that around Cambridge Analytica and all that, they were changing the newsfeed as per a particular political opinion or whatever. But in this kind of scenario, Facebook can commit that, this is how I compute your newsfeed, okay? And this is your newsfeed.

1:00:31 And these are the comments, our public comments you know that they are the the feed that has come post that have come to me and this is your news feed right and and but Facebook being Facebook they don’t want to show you the proprietary logic that how do they do it but they can still prove that okay considering these posts and this is your news feed that you are seeing you can this is the proof check it you can be 100 percent sure that I did it the way I committed at the time of launching my product right now why it is so important especially for the layer 2 scaling see what you are saying and Ethereum is that okay you build this layer 2 machine which can compute some code like layer 2 what is layer 2 at the end of the day what we are doing is we are saying that okay instead of we doing our transaction we computing our business logic on Ethereum you will compute it on layer 2 somewhere else layer 2 whatever name is doesn’t matter you will compute it off-chain apart from Ethereum but you will do it in a way that you should be able to it is It is called Layer 2 and you can say that this is deriving properties or security from Ethereum when you can still be able to prove to Ethereum that you executed the way you committed.

1:01:40 This is exactly what people are using zero-knowledge technology for scaling. So what we do is that you have Ethereum and you have a Verifier contract here and you have a Layer 2 chain which is connected to this Verifier contract And the layer 2 chain computes massive amount of logic, like people are selling hundreds of NFTs, buying, selling, you know, NFI protocols are happening, all that. And this layer 2 chain frequently is giving one simple proof. And that proof you can bring on submitting to Ethereum.

1:02:12 And that proof goes through this Ethereum verified contracts. And if it’s verified correctly, it’s called validity proof in technical terms. Because if it is verified correctly, Ethereum is 100% sure that whoever computed it, considering these were the transactions from the users and this is the output of the state, this is the state, everything is correct. So that way you have off-chain competition. Imagine how much massive competition you can have on the off-chain.

1:02:38 You can do big apps on blockchain while still be able to completely confirm them back on Ethereum without running them on Ethereum, everything. That is how people are using it scalability and that is why this is the biggest technology. You would ask that before ZK what was being used. Before ZK for the Ethereum scaling we had this optimistic roll-ups. In optimistic roll-ups what you do is there is no cryptography being used.

1:03:04 What they do in optimistic roll-ups is they submit all the transactions that are happening to this one and the transaction actual this thing and they will submit all the proofs that this is what we calculated. And then if somebody does wrong on the optimistic rule, the way to solve that is that somebody, they are assuming that in the public, in the community, somebody is watching all the transactions and actually running it somewhere. They are not solving it cryptographically, but somebody should be running it somewhere.

1:03:36 And if they find some mistake or some fraud that has happened, like this was the transaction, but $1,000 deducted from my account instead of $100, they will immediately run a fraud proof. That’s why they are called fraud proofs versus ZK Rollup being called validity proofs, but that’s why like you might have interacted with optimistic rollups. They have a seven day withdrawal period, right? Why? Because you have to give time to the community that in seven days, somebody will figure out that there’s something happened wrong and that’s why they are called optimistic because they are assuming everything is happening correctly, but putting everything back on Ethereum.

1:04:10 And then somebody, if somebody finds an error, they will challenge. And if the challenge is proven, those people will be slashed over running the chain. But in case of ZK, you don’t need all of this. That’s why in ZK, the exit times are 10 minutes. Whereas in optimistic roll, you have a seven day withdrawal period because of this problem only.

1:04:27 And since they have to prove everything back on Ethereum, they have to put all the data also back on Ethereum, which means that if you had 10 transactions on optimistic roll up, you will submit 10 transaction data. If you have 1,000 transactions, you have to submit 1,000 transactions back on Ethereum, of course in a minified way. but you do not achieve any economies of scale. As the transactions, your chain is growing, you have to put more and more transaction back on Ethereum, which is very costly, as you have to pay transaction with.

1:04:52 In case of ZK, because there’s a verifier contract, you don’t even need to save all the transaction data here. You can keep it somewhere else because the operator cannot do anything with that. So that is why it’s a very fundamental technology. And I was telling you that, originally that we see the way, like, okay, this is how it can be done. you build these PS chains and, you know, prove everything back on Ethereum that can provide, like that can easily take us from this today’s scalability that we have for five, 10 million daily active users.

1:05:20 We can easily take it to a hundred million users in coming two years. That’s what I was saying, that we clearly see that part. Right, and is the ZK AVM working? Is it being tested right now? What are some of the issues?

1:05:34 It is working and it has already been made open source. There are some performance optimizations that are being done on that, right? Anybody can go and test it, but once it’s fully performant and we feel that, okay, this is now ready for this one, like we will launch it on the testnet, which is like a matter of like, you know, one or two weeks from here, where we launch a testnet, maybe a restricted testnet initially, and then, you know, fully testnet, probably in two, three, four weeks, five weeks, something like that.

1:06:03 So very, very close. Like we have already built it out. It can be checked online. you can run the code on your machine and see it works. All right, is this gonna change the game when you release it?

1:06:13 Extremely, it’s going to change the game. Okay, wait a second, I guess I gotta buy some Matic now. Yeah, and actually if you see, when you see the change the game, like all these layer ones which are commanding billions of dollars of valuation, like imagine now you have same level of scalability, but with the security and decentralization of Ethereum and security of Ethereum, you know, it’s secured by Ethereum, then an obvious question for an app developer, like right now what we see, these people have launched the tokens many of these layer ones and they will use that money to incentivize for some people to build.

1:06:47 But if you remove this small time noise, like because till when they can spend this, the larger scale developers, with the traditional world, the real world developers, I call them real world because I feel we are not real, you know, we are up there in the cloud somewhere, but the real world developers are coming in, they will see that I have this scalability Ethereum, most traverse platform battle-tested, most documentation easier to develop, so many tutorials. Why don’t I build here? So I even say that any self-respecting team, I don’t see many of those self-respecting teams building on these Alt-L1s. I can actually count them on my hand that these are the five teams that I respect, but they’re still building on layer 1s. All other teams that you would respect and they have a vision, they’re still building on Ethereum ecosystem.

1:07:32 And now with the zero knowledge technology, you have that scalability on Ethereum, why do you need any other layer one? It kind of completely invalidates the layer one, all layer one pieces. And that’s why it can generate in terms of value also, it should be able to because all this 10, 20, maybe even more than $50 billion combined valuation of all these layer ones that can move into L2s because that’s where the solution is is there, it works, there’s community.

1:08:02 Why do you even need any other layer one? So the ZK EVM is an L1 killer. Yes, you said it right. So, so the polkadot- And actually- The polkadot- I mean, we don’t use my word killer and all that, but to be honest, polygon is the layer one killer. Ha ha ha ha ha ha.

1:08:23 And now polygon got stronger with the ZK, so you’re just gonna kill more. Yes, yes. So- I was telling my team also that, you know, in terms of the whole community, we were playing, we were always an underdog till now. This is the first time that we are playing as a dominant player in the, you know, in whatever competitive markets that are going to come. And, you know, this will be a very interesting thing.

1:08:46 Yeah, I can feel it in your swagger, Sandeep, that you got this dominant player vibe going on. Is this, have you felt that way, what? The last three months, the last four months, six months? Yeah, last three months, I would say, till the time when we got like, okay, ZK EVM is here. We knew that it is coming, but now when we have it in our hands, I can clearly see that, you know, this thing.

1:09:08 And then in terms of the community and, you know, in the last six months, like all these Facebook, Instagrams and all these, like, you know, eBay, Stripe, everybody is launching a polygon. So that gives that confidence. But obviously that should not be overconfident. Like we keep discussing internally with our team that I keep discussing that this This is the first time we are playing, so that’s why we have to be very careful. And we have to be also, you know, we have to show that this is not like, you know, some sort of a fluke.

1:09:34 Like, now we have much more resources, and now it’s actually more important for us to, you know, deliver results to our community. As this Polygon Studios core team, which works as the evangelist of Polygon Network, right? So, yeah. And how does it feel to be kind of leading or dominating? I think we are, because of our mission, again, I keep saying that we always think that somebody was saying, when did you realize that you made it?

1:10:08 And what was the point when you realized that you made it? And I see that from the, if you see the mission statement, we actually, all of us, not all of us, but all of us are just getting started. So I think that day zero feeling is there, like what Jeff Bezos also said in the world. I think that layer zero feeling is there, or that day zero feeling is there. And the other thing is that apart from that day zero feeling, the chip on the shoulder is also there.

1:10:37 Like, you know, because we did not, like Polygon did not get this respect for the longest of time. Like even now you would find detractors on Twitter that no, no, no, this is this, this They will always try to discredit Polygon on a lot of things. And when it comes so late and after so much of striving, I think you don’t even feel it. So we have that chip on the shoulder there and we are going to, as a whole community, as Polygon evangelist team at Polygon Studios, we are very pumped to keep doing it.

1:11:11 Why didn’t you get the respect? Because you came from India, because you didn’t get the Silicon Valley VC. This was all components, right? All, all, yeah, yeah, including all of this. Like, you know, we did not have fancy VCs backing us.

1:11:24 We did not have professors, like, you know, reputed professors and researchers building with us and things like that. So definitely that was, you know, we never got that respect, you know, theoretical respect, but we were very clear that we are not here to, you know, fight out on the theoretical aspects. we are here to build technology and bring people to web3 and we’ll keep doing that. So that’s why, again, like I said, that one of the biggest, strongest point for us has been always that we were very clear what we want to do.

1:11:57 Okay, so the L1 should be very concerned. Hoskinson and the Polkadots and the Avaxes and Justins and all these people should be concerned. I can say… They are concerned. Justin and Tron is a different situation, like they are in a different trajectory.

1:12:14 But many of the other protocols, if you ask them secretly or privately, which is the biggest protocol that gives them their headaches and all that. And many of them could have, I mean, the Ethereum community does give, and many people in Ethereum community have given us this credit and respect for almost saving Ethereum around that time, when Many of these layer ones came in and then there was like absolutely this thing. And then I always tell them that, you know, even though on Twitter, they would never say that they are competing because they don’t, they want to play the L1 game because that’s where, you know, till now in the last, you know, cycle, the L1, all L1 was, could give you the maximum market cap.

1:13:00 So they will never directly say that they are competing with Polygon, just, you know, keep doing some, this thing, but, but when, but all these layer ones, they know that And when they are on the trenches, they’re talking to the developers and developers are making the decision that whether they should build on this old L1 or this thing, 90% of the time or even 100% of the time, we are the other ones on the table, which the developers are choosing between. So I can imagine that many of them would have a decent amount of headache and heartache for Polygon. It reflects on Twitter, like, you know, if you see some of the founders talking about polygon, it reflects, but, you know, I mean, we also don’t have pleasure in that.

1:13:45 But the point is that, you know, again, mission is the bigger thing than all of these things. And we’ll keep doing what we believe, our belief is Ethereum has a settlement layer. And then these layer two chains where the transactions are happening, transaction layer is the right way for WebT to go and we are working towards that. Okay. Off camera, before we started, you said you basically see the world as Bitcoin, Ethereum, Polygon. In the future, could it ever be Polygon, Ethereum, Bitcoin, you know?

1:14:18 So I am saying, like when I said, I don’t, I did not say about as market cap. And I also did not say one, two, three, I said top three. So, you know, whoever is, you know, this thing in between them, I’m not saying what’s the ranking order I’m saying, but we, if Ethereum and Bitcoin are the platforms who have made this level of impact. I feel we already would be like, if let’s say there is somebody who should get added in that top three

1:14:46 Space, we would be definitely one of the top three contenders who deserve to be there. And the second thing I’m saying is that it’s not about market cap, it’s about the impact. And I think what we are doing, what we have done till now, what we are doing and what’s coming in for us, we have all the chance. We had one team off-site recently also in Dubai. And I think this was being discussed very clearly that it’s on us to lose.

1:15:16 I would go to an extent and say that it’s on us to lose. If we lose and you don’t see Polygon as the most adopted platform in two years, it is all on us. Yeah. you know, the universe could not have given us enough, you know, opportunity to do it. But you guys like that pressure.

1:15:36 You like that, it’s yours to lose. You feel just as good being in front as you did in the back. Absolutely, absolutely. And, you know, like for us also, especially for me, I am very, you know, from my part of the world, I come from India and all that, and I, you know, absolutely revert the culture history India has had and the role it played but then after that like you know it had thousand years of you know non-independent existence and all that so I want like you know Indian and I see Indian developers Indian entrepreneurs are also very smart like you know it’s just that they don’t have that right kind of environment the funding is not there ease of business is not that great but still you see some of these unicorns keep coming out of India and And those people, when they go out in the US and in other Western countries, we don’t need to name which all companies Indian people are CEOs of.

1:16:35 So I feel it as a personal responsibility for me also, that we have not seen many global brands emerging out of India, especially tech brands. And I feel that we came to a particular point, let’s say medium level success, you can say on a global scale, which is still very big. If, imagine we fail from here, the next time a company like somebody else comes up, and even if he comes to this point, which is long path, and he comes in and people still discredit them. You see Polygon last time they came and died, like don’t worry, these people will not be able to make it. So I personally feel that that pressure of that hope from these millions of developers, not only India, but the Indian subcontinent completely, right? And if Polygon does it, people will be there, okay, where Indian co-founders also played a role and this company became a really big global company and brand.

1:17:34 So I feel that has a very big responsibility. I mean, that’s what keeps me up. Damn. That’s heavy. We can’t fail. We can’t fail.

1:17:41 So you got a billion people, you’re representing an entire subcontinent, is on you as well. As a global brand, tech brand, yes. Because we have the biggest opportunity right now. like any other brand from India, none of them is as global as we are today. And if we squander this opportunity, I think like, you know, the other people who are going to come after us, they will always be discredited that no, no, they are not able, they will not be able to make it.

1:18:07 This probably might also come from like, for the first two, three years of existence, you know, I was also always subjected to, you know, maximum level of racial slurs, you can say, in another Twitter discourse and all that, anything we’ll post, you will see some people and on accounts, like, you know, they used to have this word for India is called pajit. They call it pajit. So, you know, I also have that chip on the shoulder that, you know, we will, okay.

1:18:34 That’s good. We’ll talk. I like that. You remind me of Michael Jordan in that Netflix series. Have you seen it?

1:18:42 It’s called The Last Dance, where he’s like, you know, I took it personal And then he crushes them in the game. That’s like you. You’re like, eh, I just took it personal. So you’re coming back with a vengeance for all the haters, for all the racist tweets, repping the billion on the subcontinent. This is the one chance to put India on the global map in tech.

1:19:02 And on top of all that, and the fact that you love blockchain and you see the Theorians thing, you got a bunch of things motivating you to win. Okay. I just wanna, I’m gonna buy some Matic right after this. Just wanna finish symbolic capital. You raised $50 million, I don’t know when you have the spare time to do this by the way, but you’re funding companies and you kind of acknowledge there’s this massive brain drain from India, the government regulation isn’t helping it, but I think you’ve said that with symbolic or with maybe some of the things you’re doing at Polygon, if you can create the next 100 unicorns in India, then you can kind of lead from the back, maybe get the government to adopt the right regulations because they’ll be literally sitting amongst unicorns in their country.

1:19:47 So you’re trying to kind of lead from a different perspective. Am I getting all of that right? And what can you tell me about symbolic? Absolutely, absolutely. That’s the exact thesis that, you know, and it’s not only about, you know, like specifically India is my personal mission also, but symbolic is like, you know, fairly still global also.

1:20:03 But I would say in India, you are absolutely right that, you know, that’s how, that’s how I thought that, you know, either you go through those, you know, channels or what do you call, They don’t call it lobby like there is some good word for that but basically Policy work. Policy work is the right term. You do either do 10s of years of policy work, try to educate everyone and all that and there are people who are doing it, much better people than me who can do it but I have this again opportunity and a unique vantage point is that I can help some big entrepreneurs, some big companies being created out of India and not only in India, maybe the entire Indian subcontinent and the emerging markets, South East Asia also, which puts an indirect pressure on governments because they become like a very important part of the economy and they can’t kind of play around with that.

1:20:59 So that’s your absolutely right, your observation is absolutely right on that. And that’s the goal that at least have triple digit unicorns in the next five years coming out of these emerging markets. Having said that, symbolic is open to global projects also. I think

1:21:21 There’s an accelerator program the team is working on. And as you said, how do I do it? Basically, the good part is that where today Polygon is, and again, it’s all Polygon’s contribution that the good people also come to me, they want to work together and all that. and I anyways have this huge stream of people coming to me especially from India let’s say anybody is building 90% of the time they will reach me somewhere or the other by some or the other channel so I have that stream I can simply pass on to the team, the team is there, they are doing pretty solid work they have an accelerator plus this investment and not only like when I was discussing with my the co-founder of a symbolic is that you know we don’t want to be a typical VC fund right we want to be kind of like what VC was able to do is this kind of having this community of these founders and not only help them in like one fundraise and just invest in them and just you know forget about them for and speak to them with them one comes per quarter instead like how can we become the you know partners in their journey and it’s very rhetorical this thing also it’s It’s very hard to do it at scale.

1:22:36 Like when you have 50 companies, how do you become invested companies? How do you become members of their journey? But that’s why bringing some of this internal, giving them kind of an internal social network where the founders can collaborate with each other, maybe do some of this more of this off-sites with founders off-site, right? So maybe do like once per month or once per two weeks founders call where all the founders come together, share their insights and all that.

1:23:04 And not only insights, but also help each other in terms of raising next rounds, guiding each other mentoring. That is the kind of more thesis about it. And then with Polygon, like anyways, we have so many projects coming in the ecosystem which get invested by various different kind of funds and funds reach out to me and all that. So it all makes sense in that particular region where a particular project is coming on Polygon and they have multiple VC funds ready to back them, right?

1:23:31 So the symbolic also becomes an important partner that we have three, four more such funds which are like, you know, very bullish on polygon ecosystem and have committed large amount of capital in polygon ecosystem. So I think that’s that’s what is the overall theory of and thesis of symbolic, right? So you’re looking at like parts of a kind of a Y Combinator model and a few other pieces. So it can not just be your traditional fund, you want to make the new version, the 2.0, the layer two version of the fund right yeah yeah yeah and it then and it aligns very nicely with what I’m anyways doing it it did for me it’s a catalyst on what I’m already doing it just added an additional kick to all of all of what I’m doing okay so it fits perfectly um Cindy blast time I want to finish with asking a couple personal questions I think last time I asked you you know what it was like to be a billionaire and I think he laughed and you said you know what I think you flew your parents I think first class from India to Dubai and that was like you know a small thing that you did to celebrate business class is still very costly good I like that you need a frugal founder you definitely need a frugal founder but um what’s it what’s your life like these days you know again now you guys are leading dominating and in the next three to six months it’ll be even more clear you’ve got a bigger team you got more or capital, how do you stay Sandeep every single day?

1:25:00 How do you get up and make sure that you stay humble, focus on the issues, keep the team motivated and make sure that you’re still that scrappy kid from India because you can’t rest on your laurels, you can’t get too comfortable or you’ll lose this tremendous opportunity. So how do you do it? Absolutely. I think like, you know, you summarize it very nicely and I think a lot of entrepreneurs, especially when they are in the upward swing, right? they tend to ignore these things.

1:25:27 I think few actionable things that I implemented, especially after this VC round also, there is this friend from, or like the investors in us Excel partners, like they have this person like Pratik Agarwal, shout out to him also, that he gave me a lot of tips about team building. And one of the, for me, like one of the most exciting achievements is the team that I’ve built in the last six, eight months, Because before that, I was involved in everything. And in the last six months, you still see Polygon cruising at that speed only, where I am not directly involved.

1:26:05 Indirectly, I’m still involved, but not directly involved in the operations side of things like BD call, this call, that call, those kind of things. So that’s like, and there is community now, Polygon Village, DAO and all that community is doing it. Then there is this evangelist form. Like I’m talking about Polygon Studios, which is the kind of the labs which promotes the platform. and ecosystem. So I got very good tips in how I can build this team by submitting myself to the team. Instead of thinking of it as something I am doing, I think of it as something they are doing and my job is to make them successful in their particular things what they are doing.

1:26:48 And secondly, like second actionable point for all the like me, if there are entrepreneurs listening to it is that basically always like make sure relentlessly focus on not building not building a yes man culture around it like you know once you grow like everybody like now we they would come at the level we are oh you are this you did this this like you know they will give you and you know kind of this thing uh unnecessary praise and all that but you need people who can tell you that this is where you are doing wrong and so i generally like some of the most kind of people who have grown the most and powerful people in, you know, like that’s a polygon studios team are the people who have various, you know, who are able to tell to me on my face that Sunday, this is wrong. This is right. Right. Like you are wrong. You’re being wrong again. And I try to cultivate that feedback culture so that I don’t, I don’t get into the bubble. Like many times we see some of these guys on Twitter and they go crazy. Like some of the things that they start tweeting about and I from a distance I can clearly see that this guy is now in a bubble and everybody’s going, Oh, you are this, sir.

1:27:54 You are this, sir. And he’s like, you know, doing crazy things. So I think having that, that’s a very actionable, clearly actionable point that don’t build a yes, man team. If you feel that, you know, it’s like that it’s time to change a few things or bring external mentors who can give you clear insights. And you know, as I said, that submitting yourself to the team and then as an entrepreneur, You know like you are always this is a very dear topic to me like I can talk on and on when I know we are on time already but I think something that has always you know kind of helped me is like as an entrepreneur when you are starting you have some level of self-esteem that I am this I can do this that you buck yourself you buck up yourself and you know that takes you to a certain stage where you it gives you to a particular place but But beyond that place, you have to transform yourself into more of a team player, motivator, cheerleader, this kind of things.

1:28:52 And that includes toileving your own pride and ego on a lot of things because previously you are always involved in things and you want to do it themselves but now you want people who are doing it themselves and you have to play a supporting role instead of being on the front line. So that’s where like, you know, this thing that came to mind, I tweeted about it also that, you know, the day, and it’s also important to understand your limitations, because now where we are, we have so much talented people which are much more talented than me, right? They’re coming in.

1:29:23 So you have to accept your limitations and let them do what they are best at. So you know, I say that the day I accepted my limitations, I became limitless. Because the moment I accepted that, you know, these are my limitations, I am good at these two things but these four things I’m not good at. So get the people who can do it for you and you become limitless because you can scale infinitely from there. So these are some of the things that you know helped me a lot. As deep man accept your limitations so you can become limitless. It’s deep man. But you’re right as an entrepreneur you want to always get it done, stay up late, you have to touch everything but if you work as hard as you can you can do the work of two or three people, and you can micromanage everything for a little while, and then it breaks down.

1:30:08 And if you can’t humble yourself, if you can’t lead a team, which actually, people think the leader is like the one that tells everybody what to do. No, the leader is the one that listens, right? And tries to help people do things. Until you do that, you’re never really gonna build anything significant. Yeah, you will never be able to scale.

1:30:26 You almost, because your mind has limitations. Or maybe, you know, for me it was a very humble relation. My mind had limitations. I used to think that I can do everything, you know, I can take it but then I you start going crazy like I had like I have very openly said that you know there was a good last one year before my baby got born and all that like I was almost unstressed pills because I was sleeping less constantly for last three four years working 14 15 hours a day my typical day had 25 to 26 calls a day how crazy is that 26 calls a day even today like now I’m much more much more scaled up even today like I would have probably yeah probably like 13 13 calls 12 12 13 calls yes so you go crazy if you don’t scale yourself the only way to scale yourself is except that you are not good at many of the things and get it you can do it right and again what you’re saying is easier said than done because like you said you see some of those people out there and they start building these protocols and they’re starting to be worth billions and billions and everyone tells them that the next thing and even if they know that they have to stay humble and make sure they surround themselves by not yes men, actually putting it into practice is very hard especially in a bullseye. Very very hard, very very hard. It’s very easier said than done. Like you know I’m telling you all of these things even I am guilt I might be guilty of many of those things doing that but it’s important to be

1:31:50 Aware as Naval says you know it’s important to be self-aware as far as you are spending five minutes with yourself every day, you can figure out that, okay, this is where I’m wrong. Swallow your pride, swallow your ego and be humble. I think things can become much better. Yeah, Sandeep, I always enjoy these conversations. The next one we’re gonna do in Dubai in person for sure.

1:32:12 Just wanna get your final thoughts. And also, what should people do if they’re developers, also if they venture cap people or just potentially a user or a customer that wants to learn more about Polygon or use it for the very first time. Like what should some of these people do if they wanna take the next step in their adventure with Polygon? Yeah, so I think like, first of all, if you are thinking to get into Web3, it’s always good to have hands-on. So if you are a user, you want to understand Web3 more, go to applications like Aave or Uniswap and things like that which are also available on Polygon and check out the user experience over there.

1:32:54 If you are a builder, I would say there is only one, only one way out for you is jump, jump head-on and start building yourself, you know, polygon.technology is the, is the site where you can be, there is this called where you, as a developer, you can ask any questions, people can ask, answer them. And then there is Telegram where you can, you know, see announcements and Twitter actually. So any, and, but there is a very vibrant community because Ethereum’s Polygons community, developer community is also very similar to Ethereum community.

1:33:26 These are all EVM builders. So you have a ton of support available. Just Google it, I would say. If you want to build an app, narrow down your idea or even a dummy app, toy app, narrow down the idea and then just Google it, you will find the necessary sources and tutorials and existing code to build it. It’s like fairly all pervasive right now.

1:33:50 Yeah, right. So just do it right you got to take action. That’s the best way to do it here Yeah, yeah, yeah, yeah, that’s I got my students to do like they they’ve watched 16 videos about DeFi But they never actually use the protocol and once they actually do it It’s hard. It’s stressful and then once they do it they get it and then they’re then they’re DeFi for life so And if people want to tweet you it’s send it now wall full name at Twitter And they can tell you what they think or if you think he’s right flipping ethereum or or Bitcoin or not Sandeep, I’m just so excited and happy for your success.

1:34:24 It’s incredible what happens in one year, although we had a fantastic conversation last year and you guys were doing amazing things now, but watching what you guys have been through this year has been incredible and watching the last three or four months when Polygon kept going up and up and up and now you’re looking at the market cap table and you guys are now leaders out there and it’s incredible to see. You’ve got a great story. Everybody loves an underdog.

1:34:47 Everybody loves someone coming from the bottom right to the top as Drake would say and it’s great to see what you guys are doing. So let’s continue to have these conversations going forward. Also you know on top of London Real and all the people that watch us around the world we also have London Real Ventures and we’re talking to some of the people at Polygon Ventures and looking at a bunch of really cool projects that you guys are working on. So I look forward to featuring a bunch of the projects you guys are working on in the future and have the founders here having conversations too because I’m a big fan of what you guys do.

1:35:15 And it sounds like you guys could be the ones that really take this whole thing to the rest of the world. And that’s what we need. We need it to be a hundred trillion market cap. And you could be the key, sir. You really could be the key that makes it happen.

1:35:30 So yeah, I just want to say thank you. And I’ll see you in Dubai next month. And yeah, just wishing you all the best. Not me, but Polygon can be the key. Like Polygon is much bigger than me.

1:35:40 Like, you know, I’m just like a contributor into Polygon. Yeah, you’re right. We could be the key, Polygon could be the key. And when I say you, I mean you and Polygon. And again, you have an incredible team of people.

1:35:51 And I spoke with your people in New York and Australia and in Dubai, and they’re impressive people. And everyone seems to really be on with the vision. So yeah, wishing you all the best. I’ll see you out there next month. And congratulations, man.

1:36:04 Good luck. Thank you. Thank you for having me here, sir. Thank you so much. Great stuff.

1:36:09 Thanks, everybody. Follow this man and get involved in Polygon. And we’ll see you next time on London Real. Take care.