Hi everyone and welcome to another episode of Living on Blockchain. Today we are speaking to Nitesh. He is the founder at Chaidex as well as Bramble.
His expertise mostly lies in finding interoperability solutions in the Web3 ecosystem. He has worked for some time in the Web3 space. Chaidex is an interoperability multiples taking protocol which is alive currently but it’s in beta right now.
Users can only add their wallets and get like an overview of that but in a month’s time the staking and restaking protocol would also be live on the platform. This was an interesting conversation because we kind of touched and we touched a lot upon how interoperability is still a problem that nobody really has a proper solution for and that is what he’s building for and I would love for you guys to hear this. This is a pertinent problem that he’s trying to solve.
Let’s deep dive right in. Hi Nitesh, thanks so much for making the time to speak to me today. How are you doing? I’m doing great Tarusha.
Thanks a lot for inviting me on the show. It’s my pleasure to have you here. So for our listeners can you tell us a little about your background and how you got started in the Web3 space? Sure, so I’ll start with my name.
My name is Nitesh Mishra. I’m from Mumbai, India and I’m currently co-founder of Chaidex. It’s a multi-staking protocol that enables B2B and local stable currencies.
Given that introduction, my journey in Web3 began, I mean there’s no exact date when it exactly began but a bit since I was in college in 2011, in my engineering college, I kind of mined Bitcoin. I mean not exactly mined but I gave my computational power to basically a pool, a mining pool which was in Russia. So and I did it in my college with the help of one of my professors.
Only at that time he and I had this knowledge about you know how to do it. So that was my first and for the next five to six years last you know contact with blockchain or cryptocurrency in general. Okay now fast forward to 2016, I meet a guy who’s returning from the US, he’s a good friend of mine and he’s from Pune.
So I traveled to Pune to meet him and then he tells me a bit more about smart contracts and what Ethereum is, what Ethereum is doing and that you know kind of clicks something you know. So that is the point when I started to read more about it, to understand more about it. Kind of I started doing my own research but the best part or the worst part was that I had to do everything from scratch because unlike today like where you know you can just go on YouTube and start learning about Bitcoin from you know Bitcoin or blockchain in general or Web3 in general there was no such you know I would say freedom or no such you know materials out there you know paid or unpaid any in any case where I could you know learn everything from scratch.
So that was an uphill battle but that was actually a very fruitful battle as well because that made me fundamentally strong for what I wanted to do and you know what I wanted to I was very clear in my life. Post that then I you know after one one and a half year I started doing quite a lot of research you know part-time research job for many you know blockchain-based you know exchanges. You know I was mostly a ghostwriter, a research analyst, something like that.
That’s what I did for a pretty long period of time before I before I founded Bramble. So Bramble is still going on but it is a research-based company that is solving the problem of interoperability from virtual machine level. Okay.
So that is something that you know that is something that is going on but we have you know kept it aside and I’m completely focused on you know Chaidex but you know between Chaidex and you know my first stink with learning blockchain I’ve done many research roles. I’ve taught you know from IIT Madras I used to teach students a blockchain for one and a half to two years I’ve done that you know as a full-time job as well. Yeah but it was on all online courses that you get to do in UpGrad or you know great learning or things like that.
So I used to teach to postgraduate diploma students from you know scratch to scratch everything about you know a blockchain and cryptocurrency or you know permission blockchain non-permission blockchain. So yeah that’s a bit you know bit more about me than I should have spoken. No no I’m glad that you know you shared a very comprehensive introduction about yourself and your background.
So you know you kind of stumbled into the Web3 space vis-a-vis mining and that is kind of how I got into the space as well. Yes. That is like in 2011.
I wouldn’t say yeah I wouldn’t say you know I got into Web3 like back then there was nothing called Web3 to be frank. Yeah there was no term like Web3. Yeah there was no term and plus it was more of a curiosity project for me like right so there was a this friend of mine who just read something about Bitcoin and he told me okay now if you invest like back then it was how much you know a hundred dollar worth of a hundred dollars so by the end of this year you’ll have one thousand dollars.
So I was like what kind of stock this is. So this is what you know ignited the curiosity in me because then I couldn’t find it anywhere. So I stumbled upon you know it’s a you know it’s white paper I read you know 80 percent of the white paper I did not understand to be really frank.
But the only thing that then I did my own research I started going to you know different places on internet. I stumbled upon this you know a company that used to you know pull you know electricity or let’s say that used to pull you know your computational power from multiple areas so that they can you know be the validators of the of that particular block. So it’s for two two and a half months I did that but that was just about like I did I got two two and a half Bitcoin back then after six to seven months I sold it and I forgot about it completely until 2016 like for five years I was like blank did nothing I had no idea what was going around in the world you know at least in Web3 or you know blockchain world at all.
So that was just about it. Right yeah there must be so much regret now. I mean that I mean I’m at this point when I’m like done with all the kind of things.
Right yeah but you know that that is interesting because you know you use one of those cloud platforms and we had actually like initially in 2011 so we had a data center and that you know we had a lot of hardware so that is how we thought okay let me let’s like repurpose this hardware to turn this into machines that can mine. We weren’t mining Bitcoin, we’re mining stuff like Zcash. So that it was early days I think it was you know as you said it’s a lot of curiosity that kind of fuels this initially but then obviously you know you stayed back for the technology but now when it comes to staying back I’d love to know from you what were inspired you to create Bramble and then Jidex.
Can you tell us a little about both the projects and what was like that point inflection point where you thought okay let me build this. Yeah so I mean so that again that is a bit of a you know that is a bit of a journey I would say rather than you know coming to a very conclusive you know conclusive one. So the very first thing I was working as a research analyst you know that was my first and only job for one year that I would say you know between failed ventures and stuff like that.
So for one year I was you know a research analyst and a consultant to a macro finance company. So while I was doing that I had to go through quite a lot of researchers and stuff like that and you know as I was leaving the company I was focusing more on you know getting a full-time job with you know teaching blockchain. So all these things you know culminated into one thing.
So the very first part was you know the interoperability was always a challenge and it’s still a challenge you know it’s not being you know targeted the way it is it was being targeted let’s say three or four years back you know interoperability was such a big deal back then like four years back. Right now nobody is even talking about we are talking about you know rest of multiple things but not exactly that because the narrative is lost. But is the solution there? I would say there’s no exact solution to be frank.
So that is what inspired me to take up this both these projects yeah that is you know that is something that inspired me that is something you know that got me thinking that you know this is going to be a big problem five years down the line you know. So right now as you can see the problem has actually begun. There are multiple L2s and there’s no like threshold of who can become L2 or who can become L3 or who can become L1 as well you know.
There are multiple L1s L2s L3s they have to be consolidated in one way or the other because you know the way information travels from one blockchain to another is first of all very vulnerable in nature very very vulnerable. You depend on so many dependencies third parties and most of the hacks that happen they happen on these kind of bridges. So first of all that first of all there is no you know fundamentally you cannot transfer information from one chain to another chain or one layer to another layer or let’s call it you know you cannot exchange information between chains or between protocols that’s it okay.
But in case you want to do there are solutions available and all of them are pretty vulnerable. They’re so vulnerable that they’re not they’re not exactly fundamentally as good as they were supposed to be when the blockchain was invented like the blockchain or the web3 world was being invented or being you know researched or being worked upon. So that is still the biggest problem and this is what inspired me to actually bring in these solutions and you know there are multiple solutions that we are all working on but at the core of it lies the problem of interoperability where I personally think and you know I and the people who are working in my team you know at any given level you know we think that you know targeting the virtual machine or understanding the interactions of virtual machine can actually enable us to get to the one single source of truth.
So that is what we are doing and this is what our daily source of inspiration is apart from definitely earning money but you know that is one of the biggest and the most fundamental source of you know inspiration or the problem that we’re trying to trying to solve in the market. Right so this was initially your vision for Bramble right and what about Chaidex? Yeah so basically Bramble this is the vision of Bramble and Chaidex I love to call it is you know the brainchild of that particular vision. So both of them are basically working on interoperability and multiple protocols right.
Definitely definitely so you know why Chaidex is the question that you know people usually ask me. So while I was solving you know this problem at Bramble of you know making sure that you know that if there are multiple games that are being built on web3 or there are multiple games that are being built on web2 and they want to interact with web3. So they need to come in a single source you know they need to understand there’s only one source of truth.
Okay they don’t have to go from one chain or the other or keep you know changing their protocols or it’s a difficult job. Okay so that is what Bramble was supposedly doing while we were you know building it back then. So right now what Chaidex is doing it is becoming an exchange where you do not exactly have to depend on any third party for almost anything.
So let’s say you have bitcoin and you want to interact with ETH you can do that using Chaidex. So and you can do that without using any dependencies on Chaidex is what you know we are telling. So we are just a platform where you can come and interact with one wallet to the other wallet.
So there are going to be other wallets or there are going to be multi-sig wallets or things like that but you can interact it on in the real time and without any third party or without any bridging solution or without having to wrap your tokens or unwrap your tokens which actually eat in anywhere around 10 to 30 percent of your you know total asset value. So that is what you know Chaidex is looking to do. I would say Chaidex is built on multiple chains or multiple protocols.
So we are chain agnostic like we are not built for one particular blockchain. So that is one of the very first reasons and very first you know reason why we cannot you know we cannot be called, we cannot be bogged down by any one protocol or we cannot be limited by just one protocol which is the problem with other you know Dexys or exchanges or anything like that. But you know I am talking about decentralized one, I am not talking about centralized one because they are simply wallet to wallet exchanges.
So that is a different thing. Okay so if you had to explain perhaps what Chaidex does in one line how would you do that to you know a potential user? So I so let me tell you one thing you know my white paper is coming to be you know it’s still due because we have changed a bit of narrative. We have introduced restaking and staking you know protocol on the protocol level.
But if I had to tell it in one line what we do is we enable a completely decentralized a p2p exchange of multiple protocols without using any third parties or without using any bidding solution and this is like the very very basic of what Chaidex does. But at the very same time since this also enables us to take care of staking and restaking protocols we have introduced it. It also enables us to introduce local stable currencies in different markets.
So for example I am actually introducing local stable currencies of five different markets. One being India, Oman, Nigeria, Philippines and Vietnam. So we are introducing local stable.
In Vietnam there’s also already a local stable currency. I mean ours is going to be the second. But apart from that you know the rest of these countries our stable currency is going to be one.
You know the very first that you’re going to use and you know it depends and it completely depends on you know from let’s say regulation to regulation how these stable currencies will be regulated and stuff like that. You know that’s a different thing. But you know we are going to do that actually.
So that is our you know kind of go-to-market strategy not exactly but you know since there was demand since I was working closely with so many people. So I know there is demand and you know there are liquidity providers for this. So that’s why we enabled it.
All right okay so tell me a little about what is the differentiating factor from say other multi-chain staking protocols and B2B exchanges in the CDFI space. So I mean so from CDFI spaces I wouldn’t say there’s much of a difference from front end. You know the way you interact with one you know one protocol with another protocol not much.
You know when I’m talking about CDFI on the front end. But when I’m talking about DEXs in particular. So let’s take the example of Uniswap or you know Pancakeswap.
Okay so Uniswap is designed to be a protocols exchange. I mean protocols exchange you know it’s a protocols exchange which means that it only understands things that are on that particular protocol. If something that comes from different protocol this particular DEX cannot understand it.
So that is the very biggest differentiating factor. And let’s talk about CDFI. So in CDFI from front end as I said there won’t be much difference.
But from back end CDFI again holds the custody of your assets. And we do not hold custody of any of the assets at any given point of time. If you’re not staking with us we’re not holding any custody.
But if you’re simply doing P2P we are not holding any kind of custody. But in CDFI they have to hold your custody because they have to in real time exchange those tokens between multiple wallets in order to get you the token that you want. And with decentralized exchange the actual decentralized exchange that are built on protocol they can only understand one set of token architecture and they cannot understand the different sets of token architecture.
If they have to jump out of that token architecture they will be forced to use bridges which as I already explained is very vulnerable. So that is the biggest differentiating factor that first of all we do not hold custody of your any assets and without doing that we’re able to make sure that your token from any protocol can be exchanged with any token of any other protocol. So that is what Chaidex biggest differentiating factor here is.
Okay so essentially you are providing a self-custody wallet like the users have their own private keys they own their private keys they can export it and you are enabling basically transfer of one token to the other. Yeah right. So I mean currently what I’m trying to do is I’m not trying to enforce or you know force any sort of you know my own wallet.
So you can come with any non-custodial wallet right now. Okay let’s say Metamask or you know Trust Wallet or any wallet like that. You can come with any non-custodial wallet and interact with other non-custodial wallet is what I am currently doing.
All right okay so if right now currently any user can go and sign up on Chaidex or is it is it in a beta phase currently? So I mean you can come and you can create your own user ID. I mean why we are asking people to create user ID is basically because you can come with multiple wallets. Okay let’s say you as a person are not going to have only you know let’s say Metamask wallet.
You can have Trust Wallet, you can have BTC wallet, you can have Phantom wallet, you can have any other non-custodial wallet as you wish. So that’s what we are encouraging people from now on that you can actually come in your username as per your wish and you know create your own account where you can at least the platform will understand okay this is the person who’s having so many sets of wallets so that you don’t have to keep signing up again and again with different wallets or you know that’s a very big hassle that we we have actually solved for because when we were in beta phase so that is one of the things that you know we were facing issue. Let’s say for example Tarusha you want to interact with Nitesh that is me.
Now you come with Metamask wallet once and then again you come with let’s say Trust Wallet which is your wallet only and you want me to realize that that is your wallet but I don’t know as user whether that is your wallet or not. So that is one thing that we have solved and people can come and you know you can sign in and create their username and attach their whatever wallet is there. Now if you want to exchange the exchange will be live from next month actually.
So currently there was a beta phase for very limited set of people there was quite a lot of research and development that went after that as well but now we are taking it live from next month. All right okay so right now currently user can sign up and they can add their wallets and then from next month they would be able to do the exchange as well. Perfect perfect yes.
Okay awesome so now talking a little about you know you have a token as well so can you talk a little about the role of the token within the ecosystem of Chaidex? Yeah so the whole purpose of having a token so the very first thing was that you know we were not very token centric from the very beginning of the project to be frank. You know the token came you know and when we were token came in later part of our development. Now why did token come into place is very interesting because as I said there is you know Chaidex when I say Chaidex it’s just not an exchange it’s also a restaking platform staking platform it’s also you know a platform that is enabling multiple local stable currencies so when I say all these things and also we are we have a quick swap we have a p2p exchange so when I say all these things then there has to be an ecosystem that you know binds all down to you know and give it back to the people.
For example let’s say you are a person who’s looking forward to you know interact with certain certain token on certain certain you know let’s say certain certain protocol okay so in order for you to have a voice in our ecosystem so that you can you know do as you wish you need to have token you need to participate and you know make your voice heard to the rest of the people so that you know they can come together and they can you know raise their voice or you know start simply accepting those different sets of tokens from different sets of protocols because at any given point of time me as a human being or my company as an institution do not really want to you know stifle or you know keep understanding what the market demands are let the market decide what its demands so that particular token can work as a very good you know DAO can work in a very good you know way where you can vote for a particular token to be in or to be out you know something like that so it’s ultimately going to be people’s choice to interact with certain protocols or to interact with certain tokens and in order to do that we need this token out there in the market so that is one of the reasons why you know we have come up with the token so that is the biggest utility you know in order to govern in order to see if what the market demands are what you know people want to understand so that is the biggest utility of the token now there could be multiple utilities which we haven’t really you know focused on we want people to come up with the utilities for now but that is the biggest utility that we thought because there is multiple offerings from the Chaidex ecosystem as well so there has to be one token.
one common you know what can I say a one common specific point to talk about it so that point is the Chai token so that is what we thought and the tokenomics is definitely not that difficult or you know not that out of the world but you know it is the tokenomics that you know every person will understand you know every person in web3 especially understand and you know can easily participate or you know purchase or you know hold or do whatever they want all right it’s basically a governance token is it uh what is the timeline for it getting listed or is it listed already uh it is going to be listed by the end of this month or the first week so right now we are in IDO phases,
so currently we had a very good IDO a hundred percent IDO a week back or something and now we are looking to do IDO of around 800,000 to a million dollar worth of IDO in this whole month which is being lined up and by after the end of all those things we are going to launch it on uh Kucoin and Mexie we have you know currently we have been with both of them uh but there are you know a couple of other exchanges also which are interested we are going to talk with them as well but you know for now I think Kucoin and Mexie are definitely confirmed and we’re taking it forward with them by the end of this month or you know by the first week of august whatever timing they give us so the date has to be confirmed yet.
For that you know you’ll have to keep in touch with Chaidex maybe on twitter uh so that you know you’ll understand that you’re updated on the uh you know yes yes we keep announcing and we keep yeah we keep announcing and we keep updating our you know users who want to purchase us excellent so can you tell us a little about the automatic restaking feature and what is the kind of advantage that it provides the users so the very i would say the inspiration where the where did i draw the inspiration so right now what happens is you know there are multiple pools on our exchange.
So I’m going a bit deep uh but not that deep uh i want everybody to understand like people who are new to web3 and also not new to web3 so uh the very first thing is we have multiple pools we have treasury pools we have liquidity pools and things like that so uh while we were you know while our beta phase was working while our beta phase was on for those two months i saw one thing and i saw that you know our treasury pool was essentially lying there just like that you know people were interacting with it people were staking in a liquidity pool and everything but at one point we thought that treasury pool can be used and there are multiple treasury pools on multiple you know protocols that hold so many other tokens but we hold mostly native tokens and stable coins for now in our treasury pool.
So we wanted to use that pool in order to give benefit to the people so for example let’s say you have come with bitcoin and you have exchanged bitcoin with us and we have that bitcoin with me okay i have that bitcoin and i’ve given you some other token and now uh at the end of the let’s say a month or so you again want that bitcoin back so for that month at least what i can do is i can make bitcoin to a good use that may earn some apy okay and then give the benefit back to you rather than just making it sit idle over there which will be definitely on chain which even you as a user can you know uh see whether you’re where your bitcoin is how is it working how much yield it is generating.
And stuff like that so that is what we thought that automatic automated restaking is something that we should be concerned about but you know there’s one more thing that we are going to make sure that it is as safe as possible now when i say safe which means i’m taking things on chain you know i’m taking making sure that those things have a proper record on proper blockchains so that you know it can be seen it can be you know uh interacted with the users whose asset is it in the first place so that is one thing that we are doing,
let’s say you come with btc or btc can be used for greater work and that btc can be divided again the apy can be divided in such a way you know one one section of your btc can be used by our platform itself to generate some you know earnings on daily basis one can be used for a long-term staking and some protocol that gives btc in return or some can be used in some other exchanges as a liquidity so that you know a daily liquidity apy is also maintained so that so it is going to be divided in multiple areas so your asset is going to be safer always i mean that is going to be divided in multiple parameters okay so that is something that you know automated restaking is something.
okay so my next question was about how are you uh keeping the ensuring the safety and robustness of the platform uh can you tell us a little about that.
yeah so as i said you know there are multiple ways we are insuring so insurance is something that we are actually looking forward to have on our platform as well so insurance and that is one of the reasons why we have so many uh why we are you know going the stable currency route as i said i’m going to introduce multiple stable currencies on in multiple countries and multiple regulations so the reason is you know when there is a market volatility as for example just day before yesterday we saw how badly you know the bitcoin performed okay but i mean it’s a temporary thing every all of us understands but there’s always a certain let’s say fear in the market of these things going on so ultimately what we do is we initially convert all your tokens into stable currencies you know then uh then and there itself because we have to make sure that whatever asset value that let’s say you’re coming with a hundred thousand dollars worth of any token you want to make sure that your hundred thousand dollars of the you know asset value is maintained in fact it is being earning something or the other on that so that is something that we are ensuring and we’re keeping everything on chain which means you can also have a look you know where it is earning how much it is and you can be you know secure about it because everything that is happening where all the informations are being on chain and they are being logged or they are being you know worked in some way or the other by some protocols so that is where we meet so if i have to talk about a very basic security,
As you said how are we ensuring or how are we security so if i only have to talk about security not about the insurance the security is maintained in the very fundamental way that we are making sure that we are going to the best particular protocols like ethereum itself or the solana itself or the btc itself to maintain the security we are taking everything on chain so that everything is secure in nature now about insurance you know there are multiple ways your staking is one of the ways converting them into stables and you know rotating in the market is another way it is also acting as a hedge against inflations when the markets are down or very volatile or anything like that so these things are very much in place you know if i have to explain it will take kind of you know almost half of our both of our day and time but you know the white paper is going to be announced very soon within a week.
So i would recommend you guys to read a bit more about it there all right okay i will be sure to keep on a lookout for the white paper yes you’ve mentioned many times introducing stable currencies for five nations can you tell us a little about how you’re going about doing it what is the regulatory compliance that you’re looking at is there any that you know you’re looking at currently or is it in a gray area well you know we do not love to work in a very gray area to be frank we we love to work on everything on a very transparent basis.
So I wouldn’t name any country as such, you know, the countries that I’ve already named, I’m not going to, you know, name the working, I just have, I’ll explain you the basics behind, you know, areas where you know, the cryptocurrency is not regulated, and areas where the currencies are regulated, the cryptocurrencies are regulated. So in, so in, let’s say in, in country A, the cryptocurrency is regulated, what we are going to do is we’re going to back these stable currencies by the fiat currency of that particular country itself, okay, and maintain one is to one ratio.
Again, how are we maintaining it, it’s a bit detailed view. But you know, I’m just giving you the surface level knowledge of what we are going to do in countries where you know, cryptocurrencies are regulated. In countries where the cryptocurrencies aren’t regulated, they’re basically going to stay, you know, backed by the other very regulated stable currencies.
Okay, so in that case, the things are going to be crypto to crypto, but the ratio is always going to be one is to one, like for example, in country B, where the fiat, whatever fiat is, the fiat is some sort of dollar, okay. So $1 of that fiat is always going to be equivalent to $1 of the stable currency of that company of that sorry, of that country that we are going to introduce. So one is to one ratio is going to be maintained in both the cases, but the way we are backing them is going to be different in countries where it is regulated countries where it isn’t regulated.
So there’s going to be no gray area about anything. The only thing is, you know, people will have to do their due diligence before, you know, very much investing into it. But at the very same time, one is to one ratio will always be maintained.
They are also automated, you know, and also they will be audited in case of, you know, regulated areas. And in case of non regulated areas, an audit will be sent every quarter to the users for us for them to understand how much backing is there and how much is in the market, how much is supposed to be burned and how much is supposed to be minted extra. So that is we have taken care of, because that was that is what maintains the one is to one ratio in both the cases.
Right. So do you guys have like a because this is tokenizing of real world asset in a way? Yes, yes, kind of. Yeah.
Yeah. So do you have you’re saying that, you know, insurance is something that you’re looking at, but you also have like a custodian for these. How are you ensuring the security of the making sure that it’s, you know, always one that is one is to one backing? Yes.
So in case of, you know, regulated countries, you know, countries where the cryptocurrency is regulated, definitely the insurance is fiat itself. You know, the fiat itself, the amount of fiat we have, as I said, there’s going to be audit every quarterly. There’s going to be a quarterly audit of how much we are holding and how much is being circulated in the market.
So that, you know, we will understand, you know, are you like involving anybody as a third party for the auditing and the custodianship? Yes, yes, that that has to be done. You know, those third parties have to be both from on-chain and off-chain parties, you know, off-chain when I say off-chain auditors are, you know, your government auditors or, you know, auditors certified by the government itself, because if you’re coming under their regulation, we’ll have to do that. And also by on-chain regulators as on-chain auditors as well.
You know, the companies that are behind, you know, auditing the tokens, the tokenomics and things like that. So both the audits will be sent simultaneously to the public and will be made public every quarterly for not only for them, but also for us to understand how much, you know, stable currencies has been minted, how much needs to be bought back and burnt, or how much has to be minted if there’s, you know, let’s say a surplus, you know, backing, but, you know, very limited things that are going on, you know, very less circulation. So in both the cases, audit on-chain and off-chain are going to be then published, which will give us idea and also the general public the idea of how much burning or minting is, you know, supposed to be done on a very regular basis.
So that, you know, a regular burning and minting allows us to maintain the one is to one ratio. And, you know, both the audit plus the backing itself is the insurance and security of this whole ecosystem, stable currency ecosystem. All right.
So auditors, can you name your auditors? Right now, I cannot, like, I’ll have to publish it, like, publicly. I will be publishing it publicly. Yes.
Right. It’ll be a part of your white paper. Yes.
Not just white paper. I mean, part of my announcement, part of my, you know, whenever we take it, we’ll have to take it on all social medias so that, you know, you know, things have to be public in nature because that what’s creates, you know, transparency in the ecosystem. We’ll have to do it in a later part of our journey.
So that makes sense. That makes sense. So interoperability is something is like a major focus for you, right? That is how your began as well.
And what are the kind of challenges that you see on a macro level in Web3 vis-a-vis interoperability? Because like you rightly pointed that, you know, right now, even now, it is still a challenge. And there is no particular product or platform that has found a very good product market fit where, you know, you are, basically, that problem doesn’t exist, like, you know, beyond the things of think of the past, that has not happened. And with new chains coming up left, right, center, even in this particular phase of the market, it remains a challenge.
So what is your view, kind of challenges that are there vis-a-vis interoperability in Web3 currently? So, I mean, let me start with a very small trivia, if I have to be honest. Okay. And if you take, you know, the research, like, I cannot go that deep again, sorry.
But in case, you know, someday or the other, I’ll post it on my Twitter, on my LinkedIn as well, you know, so with the name of those protocols that have failed in the past. So let’s take the year 2022 itself, you know, just after, you know, just before the bear market began. And, you know, just before, you know, the bull market ended.
So all the hacks that we talked about, you know, all the hacks in the year 2022 itself, 95% of those hacks took place on all the bridging solution. Okay, now, what exactly is a bridging solution? Now, a bridging solution is essentially a bridge that is supposed to talk or act as a bridge between two different protocols. And you know, the very shocking fact is, it’s not just about two different protocols built on two different virtual machines altogether.
It’s also about, you know, two different sets of protocols built on same virtual machine. Let’s take L1 and L2, any famous L1 and it’s L2. For them to interact as well, you know, sometimes they end up using bridging to, you know, to swap or to transfer the tokens amongst themselves as well.
So I mean, when I say this, why this is a big problem, because this is when a person when you as a user want to, you know, convert your tokens from one protocol to another protocol, you either have to depend on centralized exchanges, you go to centralized exchange, or you have to depend on this bridging solution. But when you use the bridging solution, you know how hard how difficult it is to use a bridging solution. Point number one.
Point number two, let’s say you come up with $100 worth of token A, and you want to convert it into token B. By the time you go to that bridging solution, wrap your tokens, then you know, pass through that bridge that unwrap and burn that token in that particular protocol. By that time, 10 to 30% in many cases of the tokens, overall asset value has been reduced. So on an average, you’re going to receive anything between $90 to $80 of the $100 that you essentially had.
So first of all, there is no security and even after security or asset values are declining. So this is thing that I personally believe has forced the whole ecosystem to go on a very, you know, central exchange or hybrid exchanges or C DeFi, you know, solutions where we do not exactly worry about the custody, we mostly worry about, you know, how much gas fees or how much, you know, asset value is going to be retained after the use of it. That is one of the biggest problem that is happening right now, like as we speak, and has been and has been happening since some years, like two, three years down the line, it has been happening.
Now let’s talk about a bit about the present and the future. So presently, as you can see, there are like at least at least on top of my mind, 30 layer tools, if not less. There are minimum 30 layer tools that are very popular, that have their own set of people that are solving their own set of problems.
And their interaction with L1 is very limited. Okay, and there are also fights amongst various L2s. And I’m talking about L2s only built on Ethereum virtual machine.
I’m not at all talking about L2s that are built on any other virtual machine because I haven’t seen any L2 built on any other virtual machine as of now. If there is, then I think I may have to study it. But I can see right now in EVM itself.
So the consolidation cannot happen unless and until you have a common source of truth. Okay, so that is also the biggest problem. The source of truth is now, you know, kind of divided or you know, is different for different layer.
And it’s different for some different layer, whether it is L1 or L2 or something like that should never have happened in the Web3 ecosystem at all. The source of truth. Now, let me give you a very, you know, layman’s example when I’m talking about why interoperability is important, like very, very important.
Let’s say tomorrow your government gives out, let’s say your rental agreement or the home ownership agreement in NFT, RWA NFT, let’s call it. Okay. So as for that NFT, you become the owner of that house.
Okay. And that NFT is built using one particular, you know, token architecture of one particular protocol. Now, what if somebody else builds, you know, same NFT or RWA on some different protocol? Then there are two different sources of truth.
Now, you again have to depend on the government because that NFT was issued by government. That’s why you’re considering it like to be the honest NFT. And the NFT that is being considered by some random person on some, you know, random chain, you’re not considering it.
Okay. This means, again, you’re depending on the government, whereas the source would have been the government and you both should have, you know, verified it from one single source of truth. So again, there could be multiple sources of truth and there’s no way that they’re interacting with each other or you’ll have to keep, you know, implementing the same, you know, NFT, RWA and all the protocols that are ever built and are ever going to be built.
You know, that’s a very tiresome process and that’s a very, you know, not a very good product process, I would say. So that is one of the reasons why interoperability is important. You need to have one single source of truth.
That is true. Like interoperability becomes very important, especially in this multi-chain bus that we are in currently and for ease of use as well for the user, right? Because the user cannot be expected to- Yes, 100%. It’s only for the wealth of user.
Yeah, exactly. So again- 100%. I mean, come on.
My dad is not going to understand it. He still does not understand. Exactly.
Yeah. No, like if you’re going to be onboarding like the next, you know, million users on Web3, then you can’t expect to, you can’t expect the user to be educated enough about this particular matter to know the ins and outs. You know, you have to create a product that actually, you know, is solving a problem for them and they’re going to stick to it.
This is something that has been pretty much a repeated narrative in all of these podcast episodes that I’ve done so far. Everybody seems to think the same thing, that it is very important to talk about, you know, the technology, but expecting the potential user to be completely educated about it and to learn about it is, you know, perhaps a wrong expectation to have. You need to build a product that is easy and that is convenient, that is solving a problem, which without really requiring definitely- 100%.
Need for, you know, the user to understand the ins and outs. So I think I concur with you there. And obviously interoperability is a very pertinent challenge.
Now, I again want to touch upon this stablecoin proposition that you have. If you could like tell us a little about how it benefits users in these particular geographies, you mentioned Oman, Philippines, Nigeria, India and Vietnam. What is the advantage that it gives the users? So, let me put it this way.
Okay, I’ll give you three different narratives of three different countries already. Okay, now let’s talk about India, Oman and Nigeria. Okay, three different countries, three different geographies and three completely different economies.
Okay, whereas, you know, Oman is a very developed country, a very developed economy has no challenges like India or Nigeria. India is a developing country as a very different set of people has a very price or let’s say value-centric people and they have a different set of thinking when it comes to economics. Now, let’s talk about Nigeria.
They are growing, very strong, I would say, but still not at par with multiple economies of many countries. Okay, now all three of them actually view this, you know, stable currency from their own set of perspective. If I have to give you one example, let’s talk about Oman.
So, Oman, what they think that the stable currency becomes a base layer for their all DeFi or fintech moment that they will have in the future in their country. So, again, that works as an SEO model where, you know, they can have the stable currency and, you know, they can be used by multiple fintech companies, payment gateways, you know, multiple institutions in order to put this conversation, you know, interaction, because let’s be very frank, every country has UPI set of model, even if they, you know, if even if they, you know, let’s say, implement what UPI has done in India, there’s still going to be challenges. Let’s say, for example, let’s say Germany, if India implements UPI in Germany, Germany is a very cash centric company country, they seldom use even debit or credit cards, to be frank, they use it very, very less on a very developed economy.
So, this is where, you know, stable currencies come into play. Onboarding, offboarding can only be done once, you know, you just have to worry about onboarding and onboarding any user institution of the country itself, just once, once you are onboarded, you can actually seamlessly throughout your ecosystem, wherever your token is accepted, you can go there, you know, with that particular protocol, DeFi, fintech, if they accept it, you can go anywhere, at the end of the day, when you want to realize it in your bank account, you can realize by one simple offboarding, that’s it. So, actually, the common point is, it becomes very easy to interact with multiple, you know, other sets of protocols, you know, DeFi, fintech, or things that are going to be used in the future.
So, it becomes very easy for a person to seamlessly travel from product to product, protocol to protocol, or user to user in that case. Okay. So, onboarding and offboarding depends, you know, it depends on the kind of regulation you have, it depends on the kind of, you know, software or hardware you use.
But at the very same time, it’s just a one time job. Once you’re inside the system, you’re very free to roam around. But, you know, I was talking about Oman.
So, Oman sees it as a base layer for whatever DeFi or fintech development that they’re going to do in future can be done on this particular stable currency. And they realize that it’s very different from, you know, CBDC. Because CBDC is, you know, definitely, again, kind of cryptocurrency that is being given out by the government for a certain set of responsibilities.
That’s it. It’s not as free as, you know, stable currencies. And let me talk about stable currencies and country like Nigeria.
So for them, stable currencies acts as a hedge against volatility in the crypto market. Now, why did I say hedge against volatility or inflation? Because let me tell you one thing that the Nigerian Naira is also falling as compared when compared to dollars. At the very same time, Nigeria is not a very crypto friendly country.
But without being a crypto friendly country, they’re growing at the rate of 1700 to 2000 percent per annum. This means that people in that country are struggling to have a second source of income. And cryptocurrency becomes their second source of income.
Trading cryptocurrencies becomes a very good second source of their income. So for that country, you know, stable coins becomes a hedge against inflation, or maybe a hedge against their own, you know, volatility of their tools. So for them, it is different.
Again, for India, it is different. It becomes a place where they can park and use it. They can park, you know, their assets and then use it for future considerations.
So that is, I mean, every country has a different take on what they use their stable currencies for. I mean, there’s no common point. But the common point being, I mean, it’s a seamless interaction between, you know, multiple products as a user.
So I mean, that is the base that I’m actually keeping. Okay, so this basically becomes like, as you said, a baseline for users to, you know, start and continue with in their journey for multistaking. Right, right.
So it adds a layer of convenience there. Yep, yep, definitely does. So you had mentioned that, you know, the token is like a governance token and the holders can participate in the decision making process.
So is this live or is this something that is going to become live in the coming months? It is, it is going to become live after our TG, it will become live. All right. Okay.
So right now, right now they can accumulate. Yeah, right now they can accumulate right now we are doing our IDEO on multiple platforms. And if you can participate on those IDEO platforms, I don’t know, there are certain maybe rules, restrictions, or sometimes they’re open.
And if not, then you participate while we are going TG. So definitely, I mean, you can definitely participate once you have those tokens and the announcements will be made, you know, consecutive. Every month, there’s going to be a new announcement.
And the epoch cycle will be decided where, you know, you will understand whether you have to participate, not participate or just take and reap your rewards or whatever it is and multiple things. Right. So can you tell us a little about the next big milestone for you guys? Next big milestone is TGE, we are very focused right now.
The whole team is looking forward for the date of TGE, looking forward for all the IDEOs that are lined up to happen, which are going to happen on multiple dates, you know, even before two days before IDEO, TGE, we are going to have one more IDEO. So I mean, the whole team is currently working on it. I personally think that is going to be our biggest milestone for now.
That is what I can think of. Right. Okay, wonderful.
And what are the kind of, okay, so now just like sort of going a little macro and, you know, zooming out from the product itself. There are, you know, you are somebody who critiques new age economists quite a bit. You know, I would love to know, A, your how would their perspective influence your decision making in, you know, creating your vision? And what, which ones are, you know, some, perhaps the ones that you can recommend to even our listeners so that they can learn something new as well? What I used to do before, if you would recommend, but at the very same time, the problem is, you know, I cannot be very, I cannot be very choosy while picking up a person like, okay, so this is the person you should be listening to, or this is not the person you should not be listening to, because you see, I have a different perspective, concerning my own company, concerning my own outlook of how Web3 ecosystem works, or concerning a very different outlook of how, you know, the economics of a country particularly works.
So for me, like, if I have to say, like, if I, you know, blatantly put out, you know, any, any person or any such comments, then it would be wrong on my part as well. So, I mean, it’s completely up to you who you follow, who you do not follow. But for me, as you asked, you know, the very first, the very first question that you asked, like, how does it influence my decision making? Like, how do these people’s, you know, discussions or things influence my decision making? So let me tell you one thing, it does not influence much, you know, because I, you know, I have a very different, I have a very different outlook, and I work on a trickle down.
So if you understand trickle down effect in a very layman’s language, it’s more like, what people perceive one thing, and what is the end goal of that particular thing? And how does the end goal is, you know, you know, kind of manipulated or reached due to the perception of a particular person or particular market. So I work on that trickle down effect. So if you have to ask me how has that affected me, then let me tell you one thing, on the very basis level, on the very basic level, or the product level, or the tech level, it hasn’t, because I’m still working for interoperability.
And that is still the biggest source of, you know, inspiration, problem solving, whatever you call it, something that I very much look up to and look forward to solving it, that is still there. But when you talk about, you know, how to bring in the people to understand this thing, yes, that has to be done from product level. So in that way, yes, I’m being affected.
So as I said, I introduced multi chain restaking, multi chain staking, I’ve introduced, you know, stable currencies. So these are going to be the point where, you know, these markets can touch me, or these markets can come inside the ecosystem, then to understand what I’m exactly solving. So definitely, they do have an impact, but not that great of an impact, because at the basic level, I’m definitely going to solve, I’m looking forward to solve this problem.
And it’s just not me, it could be people like you, you know, I can work with you, or people, you know, so many people out there, which I personally believe can solve this problem, you know, with me or without me, you know, that, that’s a different thing. So the problem still persists, I want to solve it. But on the surface level, yes.
From the product level, I would definitely like to lure in people by using the languages that they understand. So right now, the narrative in the market is I, as I’m saying, restaking is the narrative in the market. RWAs are the narrative in the market, there are many, there are multiple layer twos, layer three coming, they are the new narrative in the market.
So that is there. So I may use such narratives to lure in the people. But at the end of the day, I’m going to solve a very fundamental problem.
So that’s what I’m looking for. Wonderful. Yeah, I think that’s a wonderful perspective to have here.
Can you also now perhaps touch upon the kind of challenges that you’ve faced so far? And I think because we are running short on time, I think this will be our ultimate question before we wrap it up. But I would love to touch upon the kind of challenges because I think that can be, you know, your story might resonate with somebody else who’s building. Yeah, sure.
I mean, as an early stage builder, you know, the very first challenge is always, you know, the capital, like how to gain capital. And the very next challenge is how to gain the trust. Because, you know, why I said the capital is the first challenge, not the trust is the first challenge, because, you know, the access to capital is now, you know, being consolidated again back to where we began 10 years back.
So 10 years back, you know, the access to capital was with very few people. Okay. And, you know, in between these, from 2014 to 2024, the blockchain came into place, everything became mainstream, quite a lot of retail people started coming in, they became angel investors, or they became the very first retail investors of your particular product.
But again, all those things have been consolidated and being given back to these institutional people only, where they’re deciding on a new technology with a very old concept. So the access to capital is, again, a new challenge for people who are building now. And it will be a challenge.
If you’re unable to, you know, sell a very good story in the market, I think that is that that thing has, again, you know, become a main thing in the market. The second thing is how do you gain trust? Like, how do you gain trust that you’re the right person to solve the problems that you have mentioned? Like, for example, if I’m talking way too much about interoperability, why am I the only person or why I am one of those person who can actually solve it? It’s a trust that you have to build in the market. So these are the two very basic.
And I think since 2022, or 23, the money is again going back to institutions, institutions have started purchasing cryptocurrencies, holding them, and then, you know, consolidating the market price, the time is not far when, you know, the market prices of the cryptocurrencies are going to be decided by the way institutions are working, or the way institutions are interacting, or if they’re proving to be good or bad holders of these currencies. So that time is not that far. I think by 2025, this will be a very open public debate that we’ll be having.
So capital access, one of the problems that is going to happen and is happening right now, as we are speaking, second is, you know, how you build trust in the market. So these are the two challenges that I think any newcomer will face, and again, can be faced by people who are still building or have built in the past as well. So yeah, that’s it.
Right. And how would you recommend perhaps overcoming these? The very first way is, you know, sticking to the fundamentals, and, you know, making sure that, you know, you do have some proof, like, for example, nowadays, you know, the very widely accepted proof of whether your product is working or not is whether you have, you know, so and so many people on your, you know, on your socials, or not people talking about your token or not, that is going to be there. But that is just I would say 20%.
The 80% is definitely going to be whether whatever you’re claiming, are you able to solve it via some MVP or via some sort of, you know, some some way or the other, whether you’re able to prove it or so that is the I feel that is by far the only way to overcome it. Second comes the access to capital, the access to capital, you know, since the narrative has changed in one and a half years, and still changing, like, right now as we speak. So that is still I mean, whatever I tell now, maybe six months down the line, that’s not going to be that problem may not be there, there could be some different problem altogether.
So I exactly don’t know how to tackle that. Or, you know, you know, advise you or advise anyone on that. But, you know, when I talk about, you know, gaining people’s trust, at least your MVP will definitely go a long way.
And I’ve seen MVP going a long way since so many times, since past decade, no matter how many times they’ve been done. So I mean, you have to do that. You got to do what you got to do.
That’s it. Yeah, just keep building and making sure that you’re staying true to your part. Yes.
I mean, there’s no other way. Yeah, yeah. It’s just, there’s no shortcut, basically.
And there’s no way that you know, you can do like an overnight success. It is, it takes years of consistent building to actually get to a place where you’re comfortable. Yes, yes.
At least in my case, that is true. I don’t know that multiple people who are lucky in this environment can have very good stories to tell. I don’t think there’s anybody who does like an overnight sort of a success.
I think it is always like a consistent effort. Oh, there is no overnight success. Yeah, you know, those moonshots.
I so much agree with you. Yeah, there are moonshots at times, but I really think that everybody, even the people who have like a moonshot, they, you know, fail at some point or the other and they build up to the point where they reach. So that is like a complete misnomer.
People can really just hit, you know, they can get lucky and luck plays a part, certainly. But you know, there are other factors as well. And we should try to control the ones that we can, right? Luck is not something that you can perhaps potentially control.
But if you’re working hard enough, you know, you would be lucky. So I would love to, you know, I would love this conversation to keep going on because we’ve touched upon such important factors and, you know, interoperability and, you know, just very relevant topics. But Nitesh, sadly out of time, but I would be remiss if I didn’t ask you this one question that I ask everybody who comes on this particular show.
You know, you’ve mentioned about the challenges and how to overcome them, but because you were also somebody who got into Web3 because of curiosity. And if there is somebody who is perhaps curious like you at this moment in time about Web3, about blockchain, decentralized technologies, what would be your advice to them for them to start living on blockchain?
I mean follow your curiosity. I mean, first of all, you have to, I personally think, you know, curiosity is a very wide, you know, a very absurd, not absurd, I would say, it’s a very ambiguous, it’s a very ambiguous word because you can be curious about certain things that I know there are people who are very curious about how the marketing in Web3 works. I’m very certain there are many people curious about how community building works, how, you know, the product itself works or how the economics behind the whole ecosystem works.
So, I mean, I would just say to follow your curiosity and, you know, apply whatever you have learned in different sectors of your life. For example, it doesn’t matter whether you’re from sports background, you’re from science background, economics background, arts background, you know, whatever you have learned and whatever you’re curious about, just, you know, try to build or try to interact with that curiosity plus the talent you have been generating or you have been, you know, owning since the past so many years of your life. So that’s the only way, like the central, you know, if you draw a Venn diagram, the common point where your talent and your curiosity meets is a very sweet spot that you should start developing on that.
Definitely, as Tarusha, you yourself mentioned that it’s definitely nothing is not overnight success. So, I mean, please keep that in mind, you know, first stroke isn’t always going to work and do not give up on that. Please keep working on that very sweet spot and I’m pretty sure something good will definitely come out of it because I’m a very good believer of nature and if there are problems in nature, the nature itself provides the solution.
We just have to, you know, be open for that, that’s it. Yeah, I think that is like wonderful advice and, you know, because if you are open to sort of solving, there are many things that can happen. You know, you have to be open to learning and unlearning and building and it’s going to be a little hard, but following your curiosity will get you to places because, you know, you’re solving problems that you are facing and if you can really validate that particular idea and see if there are others facing that problem, then, you know, you have like a good idea on your hands.
So, that’s really good advice, Nitesh. Thank you so much once again for talking to us. Any parting thoughts before we wrap this up? Thanks a lot, Tarusha.
I mean, the only parting thoughts would be, you know, please, I mean, focus more on the fundamentals of the problem rather than just the narratives because the narrative is always, you know, the greed of the economics behind everything that is happening. So, without following the narrative, I mean, please keep following the narrative, whichever, whatever is happening in the market, but stick to the fundamentals because that is what got us to, you know, being accepted worldwide. You know, it got blockchain to be accepted worldwide.
Let’s, you know, stick to our fundamentals and yes, definitely keep an eye on the narrative, but not work only because there’s a narrative in the market. And very, very good words to end this with. Do follow the trends and, you know, do not just follow the trend for the heck of it.
So, that is what is important, yeah. So, thank you so much once again, Nitesh, for speaking to us. This has been a wonderful conversation.
Thanks a lot, Tarusha. Thanks a lot for inviting me and that was a very beautiful conversation.