How Crypto Has Already Won with Bryan Pellegrino (LayerZero Labs) - Wagmi Ventures Podcast 

I (Interviewer): all right hey everybody I'm here today with Brian Pelegrino - co-founder and CEO at layer zero Labs. Brian what's up how are you doing today

BP: (Bryan Pelegrino):Tanner thank you so much for having me excited to be here

I: yeah it's gonna be great I'm excited to chat to start you know in doing some research about you fascinating story right I would love to kind of start really just by learning a little bit more about your path and what brought you to web 3 because you actually started in a very different field of Poker is that right

BP: yeah so interestingly enough like I touched my first Bitcoin in 2010 right so all of the poker Community actually had very early exposure into crypto in April 15 2011 Black Friday as it was known in poker all of the online poker sites were banned in the US so online poker was banned most of us were like out of a job all of our you know all of our money was frozen in these accounts and in that happening all of the payment processes went down so PayPal net teller money Booker scrill all gone all the things that people regularly used to move money between the different poker sites at the time and so from that day forward basically immediately after all of the kind of shady poker sites that were left started to adopt Bitcoin to move money between them so they took deposits in Bitcoin they allowed it as like a payments medium kind of their earliest product Market fit for Bitcoin was a lot of this gambling related stuff and then from there 2013 uh was when I really heavily got involved you know running racks and racks of miners in my garage and you know everything CEO all of that stuff and then you know fast forward here we are now almost 11 years later so it's been uh kind of a long journey have been full-time since kind of end of 2016 but have definitely been involved in adjacent of the space for a very long time yeah

I: I think that's fascinating you really don't come across people that have that early of exposure to I guess Bitcoin to start but I think that's a really interesting kind of introduction so can you unpack what LayerZero does and you know what kind of offerings are available

BP: yeah layer zero at its core is an end to end messaging right that's really what it's supposed to be it's supposed to enable communication between blockchains the way that I've always thought about it and we think about it internally is you go back pre kind of Internet stack right you have all of these execution environments and if you wanted to run like take your data and run it on a program you would literally need to like take a floppy disc and you know go from DARPA to Stanford and like run it physically and then we invented this cool stack of the internet and all of a sudden you were able to sort of connect all of these disperate execution environments and start to do like some really interesting things and kind of the base primitive of that internet is a packet right so you really you really have just kind of if you think about a packet on the Internet it's just two computers you have compute in Array of bytes and then compute on the other side so like generate these bites move the bites and then like ingest them figure out what to do and that's you know that's how we're talk talking today it's how we watch Netflix How We Do all of the cool things that we do on the internet and that should sound really familiar because right now what we have with blockchains and I've had for a very long time is like disperate execution environments that have no way to communicate so uh layers are at its core really is arbitrary contract invocation with a bites array uh you invoke a contract on one chain to generate these bytes move the bytes and invoke a contract on the other chain to do something and what people do with that has been really awesome to see in creative it's everything from bridging you know lock up a token here unlock a token there burn and mint to crazy things that people are doing with NFTs and games and all of these different D5 Primitives and moving State data around and so really it is meant to be kind of that communication layer between contracts on chains and it really allows you to send any arbitrary array of bites that you can generate from one chain to another so you can do anything that you can do in a smart contract you can do over layer Zero across chains

I: perfect okay so there's a couple things I want to jump in on everything you just said but I think I think first i' I'd love to go back a little bit to the beginning and really just ask like what was it like setting out to tackle that problem with the infrastructure and kind of environment that existed back at the start and maybe as part of that like what were one or two challenges your teams had to really solve along the way that has made the biggest difference

BP: yeah so I mean it's kind of interesting people see kind of where we're at now and they then I think there's this lens of like oh these guys are you know whatever it is all this VC alignment all like we didn't even plan to start a company right we're three technologists my two co-founders I we were roommates in college we've been building together for like 16 years we built multiple companies together we did academic research together I've done a million things that failed like we were just playing around in the space and so we were we had just been asked when the first on-chain DEXes game idex ether Delta those things we were asked to create some trading strategies for this hedge fund and so we started writing some on-chain strategies for them and realized that nobody had any clue what they were doing and so we realized you know this was kind of an interesting emerging space before you know me really was meev at the time and so really was you know ARB triangle ARB all of these different things but it was just like pure speed it was the ability to just propagate messages into the men pool faster than anybody get preferred execution all of that and so we were you know we were stripping apart gu rewriting it for custom node Discovery we're doing all of this stuff in then one day we just started to see transactions pop up in blocks that were zero gas paid and perfect block position we were like oh the miners are colluding against us like I guess it's a rigged game now like can't do this anymore and so uh you know this was before flash Bots came in and kind of commoditized this entire process but at the time it was just like you know if the miners are colluding there's literally nothing you can do and so Binance smart chain was really taking off at the time and you were hearing every day you were kind of being inundated with like more messages than Ethereum more volume than Ethereum all of this stuff and so that was very interesting like for having been around a very long time like other chains existed but nobody really used them nobody did anything on them and so we started to think like okay what could you do if you had this execution environment that's like you know you have Ethereum that's expensive secure but now you have this other environment that's like extremely cheap like you probably want to treat everything there as like entirely ephemeral but like what could you do with that so we actually started to build a toy game just for ourselves for fun to see what we could do and so it was a game I mean it was a really stupid game right it's like you open up packs of Gladiators on BSC they fight and die and you like win 10 matches in a row then you're like freed from the arena and then you would mint a permanent NFT on Ethereum and that would be the thing that had like lasting stat and so everything on BSC was entirely ephemeral fast cheap gameplay all of that stuff and then you mint this permanent NFT so this was like again this was just us doing this for ourselves and then we realized very quickly that like oh you can't actually do this without a central coordinator like triggering events on both chains we're like well that sucks like that's entirely centralized it entirely defeats the purpose and so we were like okay but like Bridges exist so surely somebody solved this problem and so we set out kind of looking into existing Bridges and frankly were like horrified the bridges at the time like truly horrified and so they were like okay like this is insane and so then we set out to build actually a better Bridge was a precursor to Stargate really focus on Native assets over wrapped assets and this concept of instant guaranteed finality which we thought that the end applications would need to have and that all of the volume would be driven kind of at the application layer and quickly realized in building that like oh we we're still needing to reinvent like the transport layer and that very clearly is like the generalizable problem and that's that kind of became layer zero right so it was just kind of long and long and Winding Road of problem and just kind of chasing what we you we've always done and just following problems that are like very interesting to us and then once we got to the transport layer it was like okay like how do you build a thing that isn't just this you know it doesn't just look like it does the job but is a centralized thing like the things we indexed on were entirely immutable censorship resistant and permissionless like those were the only things that we cared about in terms of building the stack and then you had to make it actually useful for applications now and all of that but like you had to be able to hit those three things to make a protocol that's gonna kind of stand the test of time and that brought us where we are today

I: love it fascinating Journey okay so you know earlier you were talking about some of the use cases that you've seen and I think I'm curious I guess the question would be if things continue to progress as well as they are you know what's different in web 3 or really like what are some second order effects that you guys have noticed or at least paying attention to of you know what becomes different for everyone if you guys continue to succeed right

BP: yeah I think the end goal for us and people always think I'm joking but I'm dead serious right they're like where do you see ler in like five to 10 years literally I hope that nobody knows about us or talks about us ever in the way that you know modern web DEVs don't need to think about like TCPIP or like the the OSI model right like these just don't they're not part of a of a developer Journey these days for most things you just want to come and build an application and most people don't need to think about that layer like the goal for us is to abstract execution environment and to abstract a lot of this stuff from the end user and enable the developer to create that experience so you know one of the first when we launched I kind of released this video which got us a lot of traction which was like here is the current experience of like trying to Simply like swap asset a on chain X to asset B on chain Y and like the median time for all of the solutions at the time was probably like 25 minutes and it was like s like 40 or 50 clicks it was insanity and with layer zero is like a single click that abstracted all the gas so the user clicked once they signed one transaction paid gas in a bundle on source and the whole flow got executed all the way across and so that was like the earliest iteration of this goal for us which is like the end user shouldn't care like the application should care what chains are on in the environment the end user is just like they just want to pay a fixed cost and have the experience and that the underlying chains themselves need to like add enough value to that it makes sense and you see this today with everything like DEFI has found very solid product Market fit stable coins have found very solid product Market fit you look now on the on the banking side of things right like the banks don't care they don't share ethos like every bank right now every single one at most monetary authorities in the world all of these they're all working on their own permission chains they're all doing this like they don't care at all about the ethos of the space they don't care about you know any of that what they care about is it actually useful to them in their end customer will it save them money will it be a more efficient way to issue digital assets and then the knock on of everything all the work that's done in Bitcoin and Ethereum and everywhere else is that like a lot of these structures will start to merge and you'll have you know you will have some of these things in permissionless environments and so I think the end goal is like how like how do you build something that has real long-term viability to the ultimately the end developer who carrying that on to the consumer so I hope what the world looks like is that you know the users really just focus on the action that you're taking that you can take you know create experience for customers where the customer doesn't care the underlying is a fabric that adds inherent value to the developer and the customer but it is not something they think about in their day today and so our goal is our goal really is that is like abstracted that away for the developer

I: love it okay so let's turn and talk a little bit about kind of web 3 RIT large here where you know my first question was really going to be like what do you view as the biggest obstacles to kind of mass web three adoption and sort of linking it to that thought of really like the invisibility or the hoped for invisibility of layer zero we're like you know it's it won't be something that it will be so ubiquitous or so usefully ubiquitous that it's it's not part of the usual it won't be seen as something as something radical right I'm curious if that if you have any broader thoughts about kind of what else is standing in the way to ubiquity for web three adoption

BP: yeah it's a question it's a question that I get a lot and I probably have like a different answer than most having been here for a very long time at this point like if you went back even three to four years ago go back four years and ask me you know if we'll be where we are today like I would have put it at a decade plus out so like people always want adoption to be faster and consumer adoption to come like I actually think it has been insane how quickly like things like S&P 500 companies holding uh crypto on their balance sheets to you know JP Morgan running a 500 person team and building their own blockchain like all this stuff just seemed insane not that long ago a hundred plus billion dollars of stable coins living on chain /Uniswap/ hitting like two trillion dollars in overall volume you have D5 Primitives now we have we have options on chains we have per on chain we have uh again trillions of dollars of spot volume trading on chain uh lending Protocols are something that are immensely useful in so many different use cases you're seeing Emerging Markets whether it's turkey Argentina all these places starting to starting to pick up adoption of a bunch of whether it's stable coins or whatever it is to like offset the fluctuations involve in like their local currencies like all of this stuff is stuff that was fiction to us not that long ago and so like what would I like to see it go faster and do I want end consumer adoption like yes but I actually think like the pace that things are moving at is incredible and generally I'm like I'm pretty happy with the way things are moving so like what's going to need to happen it's we're going to need to have more scale we're going to need to be able to have developers like obviously need to find a way to limit the amount of hacks in the space that are happening like security surfaces are just still massive um I think there's a ton of smaller things but everything is really iterative for the most part and you talk like I like crypto because there's a really like really interesting balance and I'll give a I'll give a couple of examples you have like the ultra-opportunists who are like here now the question is like how do I make money right now what do I do right now today and then you have like I love Ellie from /starkware/ because I'm always talking he's telling me about like the new research they're doing and I'm like oh it sounds amazing like when is that coming and he's like eight years I'm like just like what like eight years like it's like so F he's taking like such a long-term view to things but then you have people uh who are even like more extreme I spent I spent a dinner talking to Justin Drake about one shot signatures and just like what that could do I was like this is one of the most interesting ideas I've spoken about and spent time thinking about for like a very long time as like you know when do you think this will be useful in application in like Ethereum he's like yeah like maybe like 30 years from now so there are just levels there's levels to that side of the long-term Horizon lens what I love about this space is that we do have those people are so like passionately pursuing things on a on a really long term like you know something that they might like solve in their lifetime but it's gonna be like on the on the mid to tail end of that and that's crazy to me but it's amazing and so no I think we're doing all of the right things I think we have the mixes of the right people who are working on like commercial applications now versus working on like how do you make this really like something that's forever and I just think that's incredibly rare and super important so I'm happy with where we're at in adoption and I think we're just continuously moving in the right direction

I: love it. Okay so next question would be you've mentioned you like the pace you've mentioned I mean you kind of you actually answered a few of what I was a few questions of what I was going to ask in that one thought but beyond Pace like from your Vantage Point as a Founder what do you view as some of the more exciting trajectories for /web 3/

BP: yeah so I think there's two sides there's trajectories in terms of application there's trajectories in terms of like what is actually interesting technology wise so technology wise like I think there's no question that /zero knowledge/ stuff at the moment is probably the most exciting thing happening within the space I think there you know I think we've gone through Cycles where there was always something really interesting and go back kind of a year or two ago and I was like listen outside the problem that you know we're working on their nothing has gotten me like very excited and I was a huge skeptic of /ZK/ stuff when it comes to interoperability to messaging in general I spent a lot of time sort of arguing with /Dan Bonet/ and just in general about a lot of this but I think the broad applications to what ZK can provide in terms of just compression in general makes a huge and yes like privacy component is interesting a lot of this stuff is interesting but purely from the compression side I think is one of the most interesting and impactful things that is happening at the moment I mean I State blow is a is a problem in a lot of different structures so I think the /ZK/ stuff is very interesting from the application side like listen again I think iteratively we're doing all of the things that need to be done I think the largest applications are still continuing to churn just an unbelievable amount of volume it is very clear that there is real market for what they're providing and that you know again you can just see it in all of the metrics whether it's whether it's Unis swaps growth whether it's stable coin growth all of this I think the most interesting or surprising thing to me again is more on the institutional side the banking segment I thought there would be so far out before that was really considered but there's a there's a world where like bonds Leap Frog infrastructure there's a world where a bunch of asset issuance does there's in more than that again I thought okay there's a world but like they're going to stay entirely permission to permission chains and they're just going to have this you know their own database that is a little bit more resilient I guess but no a lot of them are talking about like how do they open up to permissionless structures how do you do this on global scale and like those conversations are interesting I'm not sure what will actually come of that and what the endgame impact will be and again I still see it as kind of probably years away before you see that really rolling out in production but I think it's interesting to think that what we started you know thinking about so literally so long ago like I remember and in you know again the very earliest days for me like just posting on bitcoin talk and everybody you know like everybody who got into the time was very hard libertarian skew for the most part like the ethos was what brought most of us into the space either ethos or application and it really was like about disrupting the financial system and now I'm sitting here and I'm like there's a chance that we might actually you know there's a chance we might actually do it this thing might happen might not be in the way that like all of us thought in the beginning it might not be the way that all of us sort of love the most but there is a world where this truly disrupts the future of like the financial rails in a in a way that I you know I think we all hoped for but maybe nobody really believed was going to happen at least not in the time frame that it has which is amazing

I: yeah, fascinating, okay so Brian couple last questions here for you if you could kind of Time Machine back to the beginning of maybe just layer zero Journey I'm curious you know what would your advice be to your earlier self-kind of knowing what you know now about I mean you had experience before but I think I'm trying to get it here like you know what crypto specific founder advice would you have that maybe would have been useful had someone imparted it to you at the beginning of the /layer zero/ Journey

BP: yeah I mean obviously listen our journey has been as far right tail as humanly possible for the most case and you know what would I impart okay I think the biggest thing I would do differently if I was doing it you know I have a ton I can talk about on fundraising and all that especially like for us for us literally when we raised round at six you know we raised 6.4 million kind of early on and we were like that is the last money we will ever raise like we had zero intention to ever do another raise to ever do anything else and here we are you know you know much later having done multiples more but I think the biggest thing is when we launched like the space is so fickle in terms of sort of narrative and Alignment like so fickle I remember Kobe gave me this amazing piece of advice early on which was like when you're launching like you should write a reputation article right Lio did this early I think they did an amazing job of it and it's like listen here are here is like the state of the world and implementation and it's imperfect now but here's like the end State here is what we're shooting for and for us we thought you know we looked at every other messaging protocol that existed and said like there's no way this will work either won't work in /EVM/ or it is basically entirely Central Iz right in the form of contracts are fully upgradable they can rug the end application at any time you have some middle chain where like every application on every pair chain is just inherently like trusting Authority delegation from this like all of these issues that were sort of pervasive in every structure we said listen again the things that we cared about were permissionless immutable censorship resistant and so it's like we build this thing that has entirely mutable endpoints cannot ever change every application has the ability to have complete control over their insecurity completely permissionless such that anybody can come in and provide anybody can run infrastructure anybody can play that role it is like literally you can build on /layer zero/ and never touch or interact with /layer zero/ at all right we don't matter in terms of /layer Zero Lab/s we're not a part it is a protocol that will exist until the end of time or until Ethereum makes breaking changes with or without us and entirely censorship resistant in a way that like others just aren't like complete non sort enforcement really adhering to like the E ethos of the things that we cared about in the space but we just launched it we're like okay we're going to launch this thing we think it meets all the criteria for what a protocol should look like and what it allowed by not making that reputation article by not spending the time to like go through and sort of pre-debate all of these things it allowed people to just take the current implementation like imagine the launch no launch Ethereum and look at the validator set in the earliest days compared to like the validator set now and just be like oh well this thing this thing sucks right like right it wasn't like it wasn't our goal at the time ever to like own the validation layer we want to build the transport layer where the validation methodology can evolve we've seen that happen we s like it started with a simple /TSS/ and then chain link came on and then /Google/ came on and then /polyhedral/ came on which is like an entirely entire /ZK/ light client doing like full eth consensus so like this has started to evolve we'll see more and more groups go into that and like that was the point that's what a permissionless structure should be but we what people saw are hey this thing you know is starting with the you know this TSS and like that sucks and it's not decentralized enough and we're like we agree like you know come and build the thing that will do that right we'll building the structure so that you can do that and I think it really just alignment wise like made it very difficult from our end of just like you know we were fighting this battle that wasn't even the battle that we chose to F we're fighting something that to us didn't matter at all and so yeah I think I think that is the biggest thing that I would change is I think a lot of people early on saw that sort of got jaded and overlooked like the underlying of the protocol and again now fast forward adoption wise everything elsewise like we're incredibly happy with where things are but I think it just made life way harder than it needs to be and like there were just so many conversations so messaging wise I think it just matters to really be as transparent is humanly possible and get across like what you trying to do in the tradeoffs and why you built things the way that you built like I think people care about that stuff and I don't think we did it enough

I: fascinating yeah, I think that's I think that's terrific advice so Brian last question here what's your team working on right now and what's the best way for people to follow along on the journey

BP: yeah I mean what we're working on right now is I can't say like too much about what we're doing but like we really have been heads down for a long time it's been 18 months since we've launched we have learned a lot a lot in 18 months and the next like six months we're going to be shipping a lot so I mean we have put a huge amount of time and effort into some of the things that we're going to be releasing we're super excited about them internally we'll all be sort of coming out soon so we're very excited internally like very big couple of months ahead which is which is awesome I think when you spend a lot of time on technology and our sort of an internal culture of shipping quickly it becomes hard as things take long than you want them to I think everybody is excited to see some of these things in the world but we're really I don't know couldn't be happier with kind of where things are there yeah and then how people can follow along /layer zero/ the Twitter layers /layer zero Labs/ is the primary Twitter obviously you can follow me on /Primordial AI/ but I'm maybe less of an interesting follow uh post too much and you know post technical commentary a decent amount but it'll definitely be a mixed bag but yeah I mean find us find us on /Telegram Discord Twitter/ is definitely where uh we live the most

I: perfect Brian thank you so much super excited to see everything coming out in the next six months and yeah really appreciate your time so have a great rest of your week here and take care amazing thank you so much for having me all right see you/