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Crypto Innovation Series : Saito Network . Building Blocks for Defi
Recorded: April 26, 2023
Hey, Mr. Producer, can you send a co-host invite to the site to a network profile?
Am I coming in clearly? Testing, testing.
I'm hearing you clearly. This is Richard from SIDER. Perfect, perfect. Mr. Producer, can you send the SIDER network profile a co-host invite?
All right, send it.
Perfect. Um, no, but you can go ahead and accept the co is invite. I know you're not able to speak at the moment. Oh, uh, it's that it's not working.
to this not working on his end. I said you might have to join by mobile brother or just exit the space do just just exit the space and then close the app and come back. Oh
My bad. Oh, here we go. Here we go. Perfect.
Okay, okay, okay, okay, let me see one second hold on guys Alright, no, but
If you can share the... Yeah, if Richard's a speaker. No, if you can... My bad. Does it appear co-host on your guys's end? Because on my end, it's said that they're a speaker.
Yeah, I see sight to us speaker and then it's the usicles. Could you send the cohost? Oh, not now it says cohost perfect perfect. Okay, okay. Give me one second guys. Hold on. I'll be back in one minute. Hold up.
Very cool, cool, right? Avocado toast if you want to come up with speaker as well, bro. Would love to have your brother
Yeah, Mr. Prudence, just give it like another minute or two, we'll let the room filter in and all that stuff, and then we'll get started.
Okay, Mr. Producer, you can go ahead and play the YouTube clip once that's over. Just give me the thumbs up and then we're good to go.
All right, hey what's going on everyone welcome to another edition of crypto old radio My name is King Wabi and today's episode of crypto old radio is sponsored by Noah's Protocol There are non-castorial crypto lending app with sustainable tokenomics and unique feature for borrowers it offers loans that are under collateralized with financing up to hundreds
50% without the risk of liquidation through its least solution. I want to welcome you guys to today's episode. Here we have Sites on Network and also one of their founders here up on the space and also Dow chemists. So what we're going to be discussing here on the space
is what they're building with their blockchain technology, fundamentals and all things, tokenomics. And essentially what they're building is serving a multitude of economic problems that have caused incentive issues in the past, such as the tragedy of the Commons, free rider problems, and also economic attacks. And they have a pretty unique
and census mechanism that combines both proof of work and proof of stake. So we're going to dive into that. That's something that I've never really come across. So that's going to be pretty interesting. And they also have a built-in incentive system where developers can create apps that reward users for participating
in the network, encouraging the actual adoption and use case of said platform. So we're going to be doing a deep dive guys into their tech and discussing how they're going to be positioning themselves as a key player in the decentralized world of all things digital assets. And as always, you
guys can catch a replay of the space. You can catch a replay of our spaces up on our YouTube channel. So without further ado, I want to welcome you guys. Thank you all so much. And if you guys can, please retweet the space. Please
the live link so we can get more people involved. I always love having more community members and all that stuff. But before we get started, Dow, do you still see Saito Network as a co-host and do you see Grickle as a speaker? Because on my end, it's still showing that they're in the process of connecting.
I see Cytos the Coast and only see Richard as a fellow speaker. Okay, okay, okay. I think it might be a connection issue on my end.
So give me one second guys, I'm gonna leave the space real quick and then re-enter right back. So just a heads up, just a heads up Mr. Producer, just a heads up and also please bring Grick Holt as a speaker. I'll be back in a few seconds guys.
In the meantime, Satou, how's it going?
I'll hop in on that note as a little bit in-disposed. Really good. It's a kind of interesting windy morning. It's 9am right now. So a little bit chilly but glad to be here. You're dead.
I think King Wabie is back, hopefully, right any connection issues.
All right cool. All right. We're back. We're back just outside of the current moment. How's everyone doing?
really well thanks awesome awesome Dow how are you doing today brother doing great man at all I'm hosting a space earlier this morning but I really wanted to catch up on first Republic I don't know if you guys have the TLDR but a look like another
bank went by the dust so interesting times. Yeah, I definitely proves like the use case for all things as it'll ask that same thing happened in March and you know also a few years ago with the bank of Cypress if you guys remember that stuff.
Grickle, are you doing today brother? Thanks for coming up man. Yeah, I'm doing good. Been a long crazy day. But productive and busy which is good. It's good to be busy. Yeah, I'm excited to talk with you guys and just chocolate.
Alright awesome awesome alright so uh let's get started man let's uh let's get started well you know it's conference week uh really conference season one the heat of it we got things like consensus coming up and uh I know Nova it hit me up about
last week to talk about Saito. So that's where we're going to get into. So first off, Harry, I want to welcome you brother. And the first thing that I really like to know brother is where exactly does Saito come from. It's a pretty unique name.
And I'm sure there's a cool story.
A.Y.B. you broke up for like the last five, 10 seconds. Yeah, I think I can take that as like yeah. So yeah, basically, I mean, I think given the name of the, yeah, sort of a little space. You know, by saying I've been a bit
bitcoiner for a very long time and that's really where SIDO originates. So I was around the Beijing Bitcoin scene and like got really got involved in 2013, along with my co-founded David Lancashire who was also kind of working in tech in China.
It's time. I got super excited when I saw Bitcoin. I came from an open source software and tech background. My take on Bitcoin was like, "Wow, man, there's this network." I think the way I saw it is the way people talk about sound money. Now, I saw it as the potential for sound
started before the money part. I was like, "Well, you've got this network where you've got no middlemen, no intermediaries, no income mess with you shit. This is really interesting. It's different." And I think particularly living in China where you see the risks of not having access to that kind of network made it even more exciting for me.
In 2014, 2015, 2016, we started to see block size wars and a lot of fighting in the Bitcoin community. I saw a lot of friends who really cared, followed different paths in the Bitcoin space into SV and what became SV and BCH and then SV. These were people who really cared about the kind of Bitcoin mission but had
different ideas about how to execute it. And I think looking at that, one of the things that became clear really to my co-founder and to me was that those problems are intractable. If you're trying to do certain things with Bitcoin, you get stuck. And it's around scaling and around incentivizing your
high capacity network. And we set out to build something that, you know, it owes a huge amount to Bitcoin, the basic blockchain structure is very, very Bitcoin. It's just a consensus that's different. The consensus is designed to solve these. This stresses you get in the network when a lot of people want to use it.
or when they want to put a lot of data into the network. That's kind of the origin story and we can get into a little bit how we do that and why it changes things and makes it why it's important a bit later maybe. But the name, the name is from Saito, the character and in section of the movie, which is a favorite
by co-founders in a mine. It was kind of like a code name. It was just what we were calling things and then we never changed it. It kind of stuck. So there's a lot of inception memes and references actually in the white paper and other places. That's kind of the postage stamp where SIDA comes from.
Sick man, so I know currently right now there's the blockchain trillemotors I'm assuming that you are touching upon right we have scalability security and also the centralization right and If something it's something that's deemed as a problem right if you can mute brother I think there's some like back
on noise coming from your own brother. But yeah, currently right now the blockchain trillema is an issue really with most experts that dive into things that I have no experience in like coding and developing fun ends and all that stuff. So I wanted to know
how you guys are solving that issue. Also, it's pretty fascinating to know what you guys are building as far as combining both POW and POS. And if you can tell us a little bit more about that mechanism and the advantages of it compared to other blockchain networks,
Would love to hear it, man. Would love to know that, man. Always excited to interact with people that are holding out new ecosystems in the digital arts of space. Cool. So let's keep going with the movie thing. A bit like the kid in the Matrix. There is no trilemma.
It's one of those things that exists if you're trying to change things in POW or POS systems. And the problem there is, you've got this thing to balance where the consensus mechanism pays for security. So mining or staking
pays purely for securing the network. And then you've got this issue of, given that's where all the money's going, how do you ensure decentralization and security? So decentralization and open. So you've got this problem where
If you could change that, the whole problem goes away. And I think the people locked into this mindset because POW and POS do what they do, that you have to give all the money to security mechanism. And the problem there is, you just don't get enough cash into the system to pay
and nodes, etc., to actually run and operate. If you're going to put any stress on them. The Bitcoin solution, the BTC solution is really simple. And it makes sense within a space, which is to say, well, we'll constrain the network. We'll say we won't scale beyond a certain size. And we'll ensure the decentralized
part, the open spot by having a volunteer group of people who are dedicated to the cause provide all the notes. So you're running a note at home, there's a kind of, you know, it was a huge thing. Can you run it on a Raspberry Pi? It was a huge thing with the BTC, the core crowd at Bitcoin when they were starting to kind of split apart about how to scale.
And that's, if that's the way to do it, just so we'll look, we'll realize that there's a limit here, but we'll just have to put rely on volunteers. And actually Ethereum does basically the same thing. It says, well, we want to be a larger scale network, more going on with lots of smart contract processing, et cetera.
So the volunteer they bring in is consensus, right? Who are in fear of providing most people's actual access to the Ethereum network. So most people don't connect directly to the Ethereum network, run a node, and actually, you know, send transactions onto the network, they use an API.
So for most of the time when you're using a DAP or something theoretically decentralized on Ethereum, you're still going through the single provider, right? So in fear, it looks a bit like Google or Facebook, whoever who provides you an API, easy to write apps for that, and then they handle putting that data on an off chain. That's something
We kind of don't want to do, we want to avoid. But we also want to scale beyond what Bitcoin has agreed to limit itself to, where they're trying to scale just the cash aspect with something like Lightning. The way we do that is say, well, you have to rethink consensus. You can't give all the money.
security and only security. But the question is how do you do that and make secure blockchain? That's the heart of SIDAM. And the way we do that is instead of using mining or staking or something where you're using an external cost, we make our work function, what makes it hard to make a block?
transaction fees themselves. And that small change completely changes the structure of your blockchain. It means there's no 51% attack. It means there's no trial limit, it just doesn't exist.
Because as you get more people using the network, fee flow goes up and it pays for more capacity, for more scale and it pays for more nodes to operate, for more decentralization. If you do it right and that's where these aspects of proof of work and proof of state come in, making
sure people can't cheat and we borrow ideas from both, um, preferable, if it was to help build the mechanism. Um, but the primary difference inside of it is instead of mining, you're burning electricity to hash or instead of locking people's money up under threat.
staking, the lifeblood of the site of network, what pays people in the network, not block producers, but the entire network, is rewards paid in fees that came from users. And specifically, money gets paid to people
people who helped, who can, you know, who can demonstrably help bring user transactions into blocks. There's a lot of kind of stuff I could talk about there, but that's the big difference because then if anyone wants to attack the network, they have to use real fees. They have to pay insider
that they have to get from somewhere. So even if they're trying to cheat you, what they have to do is pay you and fees to do it. And that makes it incredibly secure. I think I've been rambling for a bit. So I'm not sure if you want to do a restate question or if I should just go straight into kind of what we're building, what we're doing.
throw it over the doubt chemist because I understand that most of his expertise comes from the Ethereum side of things specifically layered to and then we'll move on over to grit. I think I rambled on long enough during all that stuff but yeah man feel free to go is technical or non-technical
If you if you'd like man, so down man over to you if there's something that you want to throw into Richards Wayman feel free to do so brother Yeah, thanks Richard for the green introduction. I think that's always great to hear from the engineers and to understand their The model that they have for what a blockchain should be
right and I think it's interesting the point that you made that you don't want all the fees of value to go towards simply security and it sounds like you want a better aligned activity on the chain and the growth of the chain and directly reward those who participate in the growth of the chain right so that's right so I
I'd like to know from your point of view, as what I'll be saying, I'm more of an e-sci think. What type of applications or services do you think will or already happening on site though, that don't make sense on ether or not necessarily better suited for ether?
And it just make way more sense of a say to a Zilex specific use cases that you think decide to change is just better made for. Yeah, absolutely. And that's not to like, you can't, can people in what they're working on. I think we just introduce a whole other new things that become
radically possible where you wouldn't even really want to think of doing them either on Bitcoin or Ethereum. So, we've got a lot of things where the obvious case is, if smart contracts generally are really good for DeFi, right? But, ETH is a very expensive way of actually sending just
messages to each other. Why would you want to say messages on chain? Well, two reasons. One is to have cryptographic evidence of what's going on and to be able to secure the channel. There's lots of ways you can do that, but what the blockchain gives you at the same time is the universal broadcast. That's that feature of Bitcoin where we
you first use it, you know, I don't know whoever else had this feeling on the podcast but on the on the space. But you know that first time you made a payment and you realize there's nobody in between right like I sent money and I sent it to the recipient. I sent it to my friend. There was no intermediary. Not enough
I didn't have to use an password, I just sent my money to my friend and it's that feeling and that's because any Bitcoin address can send money to any other Bitcoin address. It's universal broadcast. If you've got an address, you can message it. That's really cool.
But that means, you know, if you're doing sharding, since that gets really complicated because not every address is on every shard, how do you find each other? You get these extra problems. So the stuff like DeFi, where you want things, simple things calculated on every node, you know, it's really
I think there are issues with how people connect to that network, but if there's a good job, smart contracts would have a place in layer 2's on-site or 2. But there's a different kind of application design where you just send normal regular application messages over the chain, which allow you to do all sorts of
So we've got, we started with games because there are great no risk space, you know, if your game blows up, it's not the end of the world. To start building up this really complicated, genuinely peer-to-peer applications. There's two people on the network interacting with each other, no intermediaries. There's not even a house managing a
and it could take as cards or whatever, that's all being done between the people on the network. You can do that for games, but that then expands our tool sorts of things. So right now, I've been spending a bit of time polishing up like a video call, like Zoom, application on Saturday. You can come and use it for free, it's encrypted, it's anonymous, peer-to-peer.
because you can use the blockchain to manage the connections between two people. So if you've got an address and I've got an address, we can talk to each other, nothing anyone can do about it. You don't have those central points where you're using someone's relapse hover that could get shut down, etc., etc. At the very least you can fall back to the blockchain
communicate where you are on the internet and establish the call that way. So those are the kinds of things where no one wants to do that on a theory. It's going to be very expensive because $12 is something to start a call. If you have to send multiple transactions, it's going to take a while. You want a different kind of blockchain to do those things.
That's really what we're trying to do is provide Web3 with a different application model that's not smart contracts. It's peer-to-peer applications using the PKI network that is the blockchain to establish connections to share important data that needs to be encrypted and to find each other, this is like working at each other on other networks.
works to establish connections there. So I think that the counter answers the question. Yeah it does. It's really cool to especially the video example that you mentioned. Another thing that I like to some clarification right so you mentioned that on site so you don't necessarily have the notion of smart contract.
I know from the documentation that you guys enabled before that you know coding different languages What does that look like for a developer who wants to build web3 on top of a state or like how what was the one of the steps to add a an app on site though So it's very it's very different. We're actually making
here a lot simpler in some ways and we're just released, wasm library of like the core, Theta engine. So one of the things with writing an app on Theta is essentially running a mini node or a light node inside your browser, your phone, wherever the app resides, right? And it's connecting to the chain. It's not connecting to
A service provider like in Fira that then gives you access. So you're actually on chain. And that sounds more complicated, but actually it's just removing a layer. So the way applications work on SIDOS, you have a message field in the transaction and you can put what you like in there.
So you and I could write an app where we just create our own version of signal, completely secret messenger, right? Where you're in my end, no, our encryption style. We don't tell anybody. We just start sending each other messages encrypted across the network.
No one can tell what's going on because they don't even know what we're encrypting how encrypting it they just see, you know, stuff going past That's actually really easy to do on-site it because all you need to do is be able to put, you know, right near you
Grab an encryption library, push the message into it and send it to the other person. There's some interesting things with those examples, challenges, examples in the codebase now that I have to do that, like doing a key exchange. When we set up cryptography, I need to say
He's my public key you respond send your message back and then we can set up encryption without a third party You're vouching for us or controlling us Once you've done that it's really really simple and that means you don't need the whole East type of Ganesh and truffle and all of those
things, you're basically just developing to a simple API that says send this message, send it to this address, send it to multiple addresses, and then obviously there's a few little things like, because transactions need fees, you need to add those and manage those, but again that's quite a simple API.
So Richard, I want to know if it's something in your direction, but I understand that you guys are building on SubStrate, which is the polka dot programming language. What are some of the key pros of building on SubStrate versus something like some really.
Actually, we're not. We're compatible with that. We have interfaces to dot because we're going to collaborate with them with a Web3 grant to build a generic Web3 gaming engine, peer to peer gaming engine. But no, we're not using substrate, actually.
I might just be understanding. Yeah. Yeah. I, uh, that, that, that, that was my understanding of, um, good to know that man. There's not, there's not many, uh, there aren't really many virtual machines that like connect to both dot and e at the, at the moment, am I correct on that?
So that is correct, we're not a VM, so we don't have a VM on the network. That's one of the advantages for SIDON in that when you write any kind of applications that we're doing, it's not a replacement for smart contracts and where you'd want that. But there's a huge number of things that people are trying to do with SIDON.
smart contracts that are just really hard to do and not really appropriate, right? Because smart contracts are great for creating a token. Brilliant way to create a token. There's a great way to do something like a DAX, but if you wanted to say run poker, no one's going to build poker into smart
contracts and think it's going to be viable. What you want is users to have software and to cryptographically agree things like the state of a deck in messages, not to execute everything on time. You do want to say perhaps use a smart contract to settle what's
escrow, something like that. So the way we see things is, you know, like, it's possible to grab so the, the ECVM, etc. and put that in the layer too. On-site, if you want to do that. But for us, Sutter should be really lean, really life, because it's designed to handle a lot of data.
moving very, very quick. So we're not doing execution on the node in the way that the smart contract blockchain does. It's peer-to-peer messaging and that's something that takes Dev's a little bit to adapt to because it's kind of something that most people throw in their hands up so that's just too hard. You can't really do
it. And we've really taken that on a lot of what we've built and what's kind of been involved in the process of building outside of it, it's been working out these techniques. Like, I use the example of cards, right? There's ways of you and me doing a card
without there being a deck of cards or a central authority who's verifying that that work where we can shuffle in the own play again. But that takes some engineering to actually get the cryptography executed to allow us to do that. That's where the equivalent of the smart contract
thinking is insider. It's in how do I use cryptography to share information, for instance, like that a deck of cards is provably in a certain order, but without revealing what the cards are until we share keys to reveal each card. And so it's a bit of a different style of programming when you're doing things like that.
I'm going to pass it over to Greg now. I'm going to pass it over to Greg. Are you everybody hear me brother? Yeah, I can hear you loud and clear. I am having a plethora of connections issues today. It keeps showing most people up on the panel.
as connecting connecting connecting and there's really nothing bad on on my end so I'm gonna I'm gonna go ahead and drop off but great if you can hear me I'll pass it on over to you brother. Alright thank you. Yeah so I mean you're super interesting hearing about the genesis of CITER I think you know the history of blockchain development
It's a super interesting art member when the whole kind of fulking thing happened with a big hash and then Stosh's vision. So, and I have people in those fields as well. I have divided their world at the time. So, my question is really like, where do you kind of foresee the future of the world?
of different blockchains and you can see them going to application specific blockchains or you can see everything will be a theory and then we will interact with that where do you see it going? - It's a really interesting question because one thing I've learned
in the spack is like don't make predictions too broadly because the level of innovation change just makes you wrong half the time. But I think what we'll see is some consolidation and I think for instance just going back to Bitcoin that's the kind of
original case and an interesting case study I do worry that Bitcoin has unresolved issues that will compound over time. I still love Bitcoin to death and I still hold Bitcoin but there is a there is a very real question for how long when halvings are
reducing the amount of security in fees are not creeping up at a rate that could do anything like secure the network. And that's, you know, that to me is a real concern. Am I predicting the Bitcoin will go to zero tomorrow because of this problem? No. So, you know, it's something I'm not sure.
comfortable with the amount of effort in that community going towards solving. But you know, it's not causing, causing fires today. I think where we see more issues are things like, you know, inferior, etc. And I think we'll see some black swan kind of
events where things just fail. If you imagine if your shell at Storzen turned the servers off tomorrow, the industry would be far worse off than if we lost three more banks. Just because the mid
The majority of what we think of as a decentralized web 3 space is transacting across those servers. Those servers are the gateway to the Ethereum chain for 90% of users. So USDC, USDT, all those things would essentially become unusable on ease.
and BSC are not going to take up the slack in a hurry because there aren't bridges and stuff working so it's a really big issue. So I think those are sort of the pitfalls I see in front of us. In terms of future shape, I think really
Really? It's so hard to say because I get up in the morning, I work on cider, I do a few other things, maybe during the day, work on cider some more, I go to bed. So I am really focused on what we're doing. And I think in terms of innovations in the space,
I think these like use of zk's etc zero knowledge proofs will be Chatted like will change things in ways similar to smart contracts as they become You know really affordable to do on most chains, but I think something like cider comes along and can really change that game because it's got the space Scott that if you want to use
use it, you know, deploy zero knowledge proof of something you can put 120 K a data in a transaction if it's worth it to you. And so those are the places I'm excited about and I'm sort of seeing the future. And I think with proper high capacity routing work blockchains like SIDLE on the
Ground will see capacity that will move people away from single use chains because they're just naturally constrained they're not that useful any more than for doing something like running a massive multiplayer game decentralized or something like that.
That was an interesting point if you saw where to go down. It would actually be a lot worse than if a couple of banks were to go down. If you can meet by the way, there's some feedback coming your way. Yeah, that's a lot better man.
Yeah, I agree with that statement. If you get things like Uniswap were to go down I think like the implosion in the market would just be So it will be it will be broader than that because if you're went down you trust what most of the networks that other we go down see also lose one inch sushi everything
right? Pancake would start because that's on BFC. But you know, you wouldn't just lose Uniswap, you'd use all these dApps that we think of as independent and you know, not relying on anyone at the infrastructure level are. And I think that's a real danger
point for the industry that people haven't seen. The Uniswap service don't have a failure that for somebody else's APIs as far as I know, I'm pretty sure they don't actually inspected the code. But yeah, what happens when Infira goes down? So it kind of keeps me awake at night sometimes.
And and a part of if this sounds like like a question that has nothing to do with what we're talking about but Do you believe things like layer zero technologies right like with what layers zero labs is doing do you think that can mitigate any sort of
of potential risk of that occurring? I kind of applaud the effort, but I see the problem is interactable in a different place. And again, obviously coming from a side of perspective here, but the problem there is
to do with the economic incentives and improve and work and improve the stake. And in the end, because everything's going to security, what you have is consensus paid for, but everything else is still web to it, hasn't moved on, because it's not going to move on just
because to move to a different model, we need different economics because it's economics that built Web 2. It's economics that means that there's one Facebook and one Google. That's the natural way of things when you have the centralizing pressures because of market forces.
So it's very hard to create new competitors to ensure to service East.
Just on the basis that they should exist right you need to be economically competitive. Yeah, and fear isn't it's still subsidized Yes, so would you say something like like block stream which pretty much in control the majority of the lightning network would you say that's that's a good comparison right because I consider
Bitcoin and everything like outside of east to be completely different asset classes right yeah Bitcoin then you have crypto right I'm a fan of both huge fan of both right but there are some similarities right with Bitcoin and the whole lightning network and all that stuff and some omnichate some omnichate
some omni layered stuff that's probably going to be known as Bitcoin D5 and their whole NFT stuff with ordinals right you know eventually you know Bitcoin could eventually have a layer that's sort of a knockoff on Ethereum I don't think the talent pool that that that that section of the big
the coin ecosystem. I don't think it's ever going to be as good as what we have on Ethereum. But I think a good comparison would be, you know, whatever in fear is to Ethereum, you can kind of make that same case with block stream and Bitcoin.
far as the other layers to Bitcoin is concerned outside of just like you know regular transactions. What are your thoughts on that brother? Totally agree and I think it comes down to the same reason I was just saying before right? The another way to think about it maybe is
we're in a decentralized space. And we're in a space of trustlessness and nobody having power over anybody else. So the only force left that directs behavior is economic. People might have believed
So they might run a node because they believe in the network, like they believe that it should exist. But they're not going to run that if it costs two grand a day or 15 grand a day to run it, right? People just going to give up at some point. So economics really becomes the last place there. And if you look at lightning,
some really clever tech solutions to problems, but they're kind of artificial problems because it's not solving the question of what's my incentive to run a node, right? And is that aligned? And it isn't overall because if you have a box and if you have a big provider, they become they become more efficient
to use other people prefer to use them because they're more efficient. And so you end up with a solo provider running all of what's supposed to be a decentralized network. And I think that's the issue universally. So if you look at space like Polkadot and you know I've worked with a lot of
groups who were, you know, parachained slot, you know, winners and they started to build. So during the first problem, they all hit, right? Because they're all mostly ex Ethereum space devs. Like you point out, that's where that big pool of experienced developers is.
So they're building away on substrate, they build their contracts and everything like that. And then we want to throw up an app onto the actual internet for users to use. And they kind of reach like a experience mechanic, you reach into your toolkit, you get your hand on the right wrench without looking, they reach for inferiority.
And then they reach around in the tubus and it's just not there. And then they're stumped. How do we do this? We have to run our own nodes at cost. And all of a sudden that that ain't looking so profitable. And this is the, I think, a universal problem in space. And it's one way trying to address.
is how do you build it so that instead of plowing money into these purely security focused things where essentially leaks out of the network, how do we build something that provides the infrastructure and that pays people for providing user facing infrastructure?
structure in a way that also produces the security. So yeah, I think there's a kind of universal problem in the space and there are lots of different attempts to get around it. But the right and interesting way to think about it is play the find the find of
volunteer because usually there's someone in the space who's volunteering or subsidizing costs and if you can find that you can get to the heart of where the problem is because if they go away that network breaks and there's no incentive financial incentive necessary to replace them.
-Dowth, you want to chime in, bro? Go on ahead, brother. -Yeah, I'm listening. I'm taking a role in because I think that in phases on decentralization is well taken, right? The general issue, if you end user, it becomes a decentralization. You don't see the benefits of it until something stops
working. No one really cares about how Metamask is being built or there's some centralization point until Metamask prevents you from using it. Since I think it's one of those things, the developers are the ones that have to make those considerations
because maybe sophisticated end users will understand the trade-offs and will pick the chains or where to do the financial activity on based on that. But the average user probably can't get to a place where they can compare all the different factors around the, you know,
Socialization and be able to make a difference between or distinction between all the different blockchains that exists right Do you think is that is I like a likely thing to happen for adoption is that as change that have points to centralize point of failure Faced those failures the developers
start to learn the best practices and start to move towards the chain that actually do follow best practices and from the get go more decentralized than others. I think to fall up on your point, I think a great thing is we talk about openness rather than decentralization being
defining factor. Most people want that decentralization because they want openness. They want non-excludability. No one can keep you out. If you want to transact on Bitcoin, you can. No one can lock you off, same with Ethereum. That's the point that people want from that decentralization.
And the problem with openness is you don't know it's failed until you're locked out. So for a lot of users, unless you're looking at the fundamentals, yeah, I'm using Uniswap today. I'm using Uniswap tomorrow. Yes, today it seems to be working, but they're not actually realizing there's about five
is that can get shut down and it's not open, right? It's suddenly locked off to you and you don't have the ability to access no matter what. So I think it will become, it'll be a big factor in moving forwards is these glitches are issues, but I think actually more than that
the bigger factor will be cost because that's something that people will react to. And a good example is, if people are doing stuff in a smart contract that could be done with a regular application, it's just sending in encrypted messages, then it's much
expensive to run via the smart contract. And if you get, we're talking mass adoption, not the likes of us are going to use and try stuff and be motivated to, you know, to stay decentralized, etc. People just go, so well, this is
is costing 60 bucks in a session, I'm not going to do it. And so that's I think going to be the bigger force. And people will, I think over time, migrate to the space that is the most logical
And it's the same with what goes on chain and what goes off chain. As cost comes into it, people will, you know, an application developers will make a delicious choices about how do they send you the data. Like once you're not connected with swap keys, I can send you data off chain.
Right. Very cheaply. Totally encrypted. No one else can read it. It's secure. So, you know, where do I want it on chain for like guaranteeing deliverability, et cetera? And where am I happy to just, if it's a stream, send it to direct.
And I think in the end, developers don't have a super amount of choices right now, but that's changing. And it'll be developers seeing opportunities both to profit from better development environments and to provide better products.
better code, better in the end experiences via different options. So I think it will be a combination. I think we'll see some of these issues biting and people taking notice, but I think much more we'll just see people going with the cool shit is.
Yeah, that makes sense. I appreciate that. It's always interesting to hear it from the Asian years, right? Like, to you guys is so clear that the consequences of the trade-offs are right around the corner. And the idea that for users is a lot cheaper, you know, makes a lot of sense for adoption. So I guess the way I would look at
is that for developers to understand the difference between a closed system or points of failure versus a very open system over a long period of time, they'll tend to pick the second one. So that's their benefit and the benefits for end users
that the network you guys are providing will be cheaper because it's peer-to-peer. And I guess another thing is also if you're a developer you don't have to wrap your mind around the concept of smart contract. You can just deploy your app and just make sure
So you deploy your app on your local validator and then you become a validator part of network. Is that how it works as a app developer? Nope. So there's no validators. It's just nodes and you deploy an app. How have you like it? You put it in an app store. People download the app.
And it's said no, a node to connect to and then it's on the network. The app is a node. There's no separation of powers there because we don't want this closure. So basically a node is going to make money connecting to you. So I provide her out there any node wants
to connect to you so they'll advertise themselves. You can connect to two or three nodes and you're at a wallet, you can see who's providing the cheapest fee. Now if you go, there's no separation like that. You don't need to be deployed on a network via a validator or anything like that. Your app can just create a site of transaction, send it.
Full send man full send bro. This is a very very interesting conversation. I want to thank everyone that's participating within this conversation at the current moment some pretty quality stuff man some very quality stuff here and Yeah, I want to thank everyone for participating
and all that stuff. Great. If there's anything else that you want to add, brother, feel free to do so, Brent. Yeah, I just want to give a shout out to the site, site, uh, guys. Um, yeah. So one last question I probably asked is, you know, what are the benefits for, you know, builders wanting to build on site.
So I think the
Biggest thing is this guy makes an example of the video chat with put on there it gives you a whole lot of different things you could even think of building in new ways right so it gives you you know a simple way of having users use keys to access etc but you can also use you know
build applications that require a lot more data being sent to and for it. So it's a very different application space. The biggest is you can just write applications that send in format and send side of transactions. And it's really very simple. There's no smart contract learning, et cetera, et cetera. So for those set of things,
It's just going to be a much easier path. The other side of it is that nodes on site of network think of them as miners or whatever, but they don't make money just for existing. They need to attract user fee flow. So there's value in that to them. So there's also value to the
developer because if they are creating a lot of traffic, that's something that provides value to the network. So they can offer that out. They can offer that app to be provided to people in exchange for getting their fee flow. And that's something that you don't necessarily have, you need to add
a fee as such in a Ethereum space to get a revenue stream out of your Uniswap or whatever. Whereas in this case, you can still do that if you want to, but you could also essentially bend the fee flow that's coming because if you
can generate user transactions in the site and the network, that's the most valuable thing. That's like having hash. So it creates a competitive marketplace to build applications that people want to use because that's what the network needs. So infrastructure providers need to make money. Is that fee flow? So different
As people start seeing it in action, I think it'll pick up and start to feel like the way to do a whole suite of application styles that really don't exist that much at the moment. That are more akin to traditional apps that people don't think can be centralized like social.
Richard, I noticed that you mentioned hash and throughout this conversation it seems like your primary focus is on self-sufficiency and essentialization which I commend you for and I'd be really curious to know more about the hash power lottery system that you guys are implementing and how that ensures
that only honest nails are rewarded for the contributions to the network. If you can describe that in a non-scientific rule, fashion, I know it's a bit of a, it's the job man curveball. It's like sort of like a curveball there, but if you can describe it in a non-technical fashion. Yeah, thanks a lot.
that. Thanks for switching pictures in the middle of the night for me. The best way to understand this is, I'll just quickly explain the rest of the network what's going on, so we understand the problem. We're going to take, when someone makes a block,
We've signed each person who's handled that transaction between the users machine and the machine that made the block, anyone in the network. That leaves a trail. We cryptographically sign it. So when we finish making the block, we're going to look at Inspectorless transactions and see all the nodes that signed all the transactions.
inside that block. So we're going to say all of you guys helped make this block. So we're going to pay all of you guys for doing that because that's what Soda does. It pays the network for getting the transactions into the block.
problem is if we obviously split up the fees between everybody who touched the transaction, we're possibly going to create more transactions paying everyone than there were in the original block and the thing's going to go nuclear, right? Because you've got more payment transactions running around than
than in the original block. So I say, pay one person who helped but will pay them in proportion to the amount that they helped. So their chance of winning all the fees is their percentage that they contribute to making the
So if you did 90% of the work, I did 10% of the work, then we're going to run a lottery that gives you a 90% chance, a mere 10% chance of winning all the money in the block. And like Bitcoin money, if we just keep doing that, it's fair, right? We get a 90/10 split, and that's the work we're doing. Everybody's happy.
Slide note, advantage here, having more than 51% doesn't help you, right? You still get 9010, you get 991. It's a really nice system that way. But the lottery system comes in and how do we run this lottery? And we need a way that you can't cheat to pick a round
random number that you can't predict. And the way we do that is we say, well, we're going to run a competition to find a hash, a bit like Bitcoin, that's much smaller. And that is going to have to match up with the number in the block.
To create a new random number you kind of predicted to decide who gets paid out. So essentially create the number of tickets in the previous example you get nine tickets I get one. And then we need to create a random number and then we basically catalog that random number.
You know, one to three for five. It's a huge random number and the place where it stops if we get my ticket first and count your tickets and start with me again That's the person who wins. So it's just a little competition that means if you pay people just enough
that when they find an answer that pays someone in the network, right, they want to take that payment, right, instead of keeping money and trying to find a ticket that pays themselves and cheat, then you've got a fair system unpredictable
Lottery for choosing who gets paid out for this block. We need to be able to do that quite quickly. So we're going to borrow the idea of the hash competition. But it's not hashing, like you get hashing in browser. It's not hashing in the kind of size and scope that you see in Bitcoin.
It's just a way of finding a random number, getting a small reward for that in a way that it's just enough of a reward so that you won't hide your correct result and keep going until you find one that's better for you because you're in competition with other people.
who will find a result sooner and then they'll just get their payment for that and you'll get nothing. So is that explained? That's the real 30,000 view on it. Yeah, thanks man. That was a pretty cool description man. Thank you so much for that. Some of some pretty
cool stuff. So what do you guys have in line for the rest of the years as far as roadmap and all that stuff? I mean the biggest thing for us as always is getting these ideas out there. We were talking today about what makes people shift in the space and in
We're very much bit coiny in that sense. It's going to be a movement of people who care about these fundamentals will provide the backbone. We're not going to anything that's a hype machine or just like pumps is crazy is got to deflate and ruin what we're trying to build.
long haul building a movement that understand the value of these peer-to-peer applications and what they can be. And that's really our primary focus is getting these fundamental messages out, building a community that understands them and wants to be part of something. At the same time, right now,
russed into the browser, that's really key to making things performant. And that'll be a great boost for developers because that'll just be an include. Right, so they just include this payload and now they've got sidewalk capability in their app. And then over summer, we're hoping to have
better that and be looking at actually moving towards what we're calling token permanence, which is guaranteeing balances on the network rather than having a network that may be reset as can occur now. And that's really a key moment for when value starts occurring on the network.
So, you know, we'll be talking to people at the summer about how that's coming along and expected diets, etc. Awesome, man. Well, dude, I want to thank you so much for this amazing discussion. We touched on what you're building and also, you know, sort of your views in the website of things in the market. We talked also
security and decentralization and all that stuff. And you know, some pretty cool points that we touched upon, such as InFura and how that's the backbone of Ethereum and sort of the cons about that and same thing with BTC and all that sort of stuff. And I want to thank you guys so much for 20
Shout out to our sponsor again for Comfort World Radio, Knowledge Protocol. It means the world to me guys if you're new to these spaces if you can follow us here because Bitcoin every single follow counts and also want to give a shout out to Greg Colt for being the co-host of this space.
Twitter space has been very, very, very rugged to me, which is odd because I go on space sometimes behind the Because Big Coin account and I had no issues with that today, but it seems on my end on this specific profile. I was happy
issues. So, wasn't able to co-host as I needed to be, but shout out to Great Cult for that and also for Dow chemist for participating on this panel. Guys, you can catch us tomorrow for our first phase. It's going to be at 11 a.m. Eastern
time. We're going to be hosting Ted Talks macro. Pretty excited for that space and we're also going to be joined by Dimension XYZ in that conversation through more like the end of that. They're going to be joining us. So we're going to be having a mega space and once I'm
We're going to talk about blockchain modularity and all that stuff. So look forward to that. You can catch a replay of this space within a few, pretty much within the first minute that the space is concluded on our YouTube channel and also here on Twitter it is being recorded. So thank you guys so much. Feel free to follow us.
is why we do these spaces all the time. Keep up with us by turning on bone notifications and we'll see you on the next one. Shout out to everybody and thank you so much again to Cyton Network and Richard. Catch you later guys and we'll see you on the next one. God bless you and take care. Pleasure.
FAQ on Crypto Innovation Series : Saito Network . Building Blocks for Defi | Twitter Space Recording
Who is the sponsor of today's episode of Crypto Old Radio?
What economic problems does Saito Network aim to solve?
Tragedy of the commons, free rider problems, and economic attacks, among others.
What consensus mechanism does Saito Network use?
Saito Network combines both proof of work and proof of stake.
What built-in incentive system does Saito Network have?
Developers can create apps that reward users for participating in the network, encouraging platform adoption and use cases.
What caused incentive issues in the past, according to the podcast?
Multitude of economic problems such as the tragedy of the commons, free rider problems, and economic attacks.
From where does Saito Network come, according to the podcast?
Saito Network comes from the Bitcoin network, with the founders being longtime Bitcoiners.
What inspired the founders of Saito Network to build their blockchain technology?
The founders were inspired by the potential of sound networking and the ability to have a decentralized network with no middlemen or intermediaries, based on Bitcoin's network structure.
What was the issue that led the founders of Saito Network to realize the challenges within Bitcoin network?
Block size wars and a lot of fighting in the Bitcoin community that made the founders realize the intractable problems faced by Bitcoin, particularly regarding scaling and incentivizing a high-capacity network.
What is the origin of the name 'Saito'?
The name 'Saito' comes from the character and intersection of the movie 'Inception', which is a favorite of the co-founders.
What does the podcast suggest about the use case of all things digital assets, based on the recent bank failure?
It highlights the use case for all things digital assets, as another bank failure occurred, proving the importance of decentralized networks and digital assets.