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Ethereum's future, @0xPolygon, and AI with @sandeepnailwal #CHAINREACTION
Recorded: March 28, 2025 Duration: 0:50:39Space Recording
Short Summary
In a recent episode of Chain Reaction, Sandeep from Polygon discussed the evolving landscape of Ethereum, the impact of economic indicators on crypto markets, and the future of NFTs, emphasizing trends towards collaboration, growth, and the integration of AI in the blockchain space.
Full Transcription
Thank you. . Good afternoon, everyone.
Welcome to this Friday edition of the Chain Reaction right here on Cointelegraph.
My name is Gareth Jenkinson.
I'm joined, of
course, by my co-hosts, Robert Baggs and Zoltan Vardai. And we have just got Sandeep from Polygon
joining us on stage as well. He's got about half an hour to speak to us, so we're going to pretty
much jump straight into things today. Sandeep, thanks so much for joining us. Can you hear us?
Thanks so much for joining us.
Can you hear us?
Can you say hello? How's it going?
How's it going?
I think he's just still warming up and getting the invite to speaker,
but he will be with us shortly.
And we do still have the markets update and some TLDR news to bring you
after we have spoken to Sandeep.
But honestly, we have a lot of big questions to get through.
And I think this is going to be, I mean,
how long has Chain Reaction been running now?
This is the end of our third week, I think now.
And I mean, we have had some absolutely superb episodes,
superb guests, and I think this is going to be right up there,
if not the best, don't you think?
Rob, it's been such a good ride that you've actually, you lost a week this is week number four we're wrapping up a month of the
chain reaction it's been a really amazing first month of the show i just want to give a quick
shout out to everyone who's tuned in and listened every day and interacted with us thank you so much
of course i'm going to ask you to like and retweet the space because
we've got one of my favorite figures in the industry here with us today.
Sandeep, how are you?
Still got some issues.
Sandeep, we can't hear you right yet.
If I may suggest, maybe just drop off the space and join again.
Close X.
This always works for me when I have connection issues as well.
We'll come back to you i think what we're going to do quickly is actually just jump into the
markets update with uh zoltan while we we get uh sandeep back on um and then we can we can go from
there zoltan what have you got for us thanks gareth i'm really happy to to run through this as
as much as i've been looking forward to uh to sand's talk, but I guess we're just going to have to wait a bit longer.
So the good news is that we've seen one of this year's biggest options expiry events at 12 billion worth of Bitcoin with the max pain point of 85k.
And Bitcoin is currently just treading the water above 85k so that's already
a good sign however a lot of analysts are telling us that we will have to actually monitor the next
24 hours after this options expiry because options expiry is not just about the expire itself and
it's actually about the next 24 hours and how option markets will reposition.
So we could still expect a lot of volatility.
This 85k mark is really a crucial point right now for Bitcoin. And as long as we continue trading around it or at least not go below 84k, I think we're out of the rat here.
One more thing that's actually a note of optimism for this friday guys is that we did see um the pce report coming out
so um we did see that fall in line with expectations and we very well know that
investors and markets um love um inflation data, which was already expected and definitely not higher than expected.
So that could provide some relief to the inflation concerns.
And that could give us a bit of a more optimism to start our leg up in April,
because April is historically, I believe, the third best month for Bitcoin price.
So I'm really looking forward to see how this day plays out.
And then looking forward to the start of April and of course, more tariff related talks, which could ultimately provide greater relief and I guess the foundation for the real leg up for Bitcoin
price. Thanks Zoltan. As always, Zoltan gives us our markets updates on the show. If you don't
follow him already, please do.
One of our fantastic journalists working at the Cointelegraph team.
All right, let's go back to Sandeep.
Sandeep, how are you?
I'm good.
I'm good.
There was some problem with the connection, but I think now it looks good.
Well, no problem.
We can hear you loud and clear now.
It's fantastic to have you on the show.
Thanks so much for giving of your time to chat to us.
Obviously, you're a man who needs no introduction.
Our audience knows you well.
I've covered Polygon at length as a news writer for Cointelegraph for the past few years.
So it's always great to chat to you and pick your brain about different things in the industry.
My first question to you, obviously, Polygon has played
a crucial role in scaling Ethereum in recent years. How have you viewed the recent discussions
around the future of Ethereum, some leadership changes at the Ethereum Foundation, and the
general direction that the ecosystem is going in in 2025? It's a very broad question, but I'm curious to hear your thoughts.
Yeah, I mean, I think it's a very relevant question, especially in the last maybe one,
one and a half, two years with the resurgence of the alternative alt L1s, as we call them. There have been a big question. I mean, I have both like one negative
and one positive thing to say about it.
I'll start with the positive thing.
Positively, like, you know,
Ethereum ecosystem is like democracy, right?
And democracies have a way to self-correct them.
They are extremely slow to move.
And they many times, in order to bring changes into a democracy,
you need heavy, many times, polarizations or heavy downswings
in whatever activity or whatever parameters you measure the democracy in,
and so that there is a revolutionary force emerges
or a new leader emerges and something different happens.
I've seen that, like, you know,
I've been part of Ethereum ecosystem
for the last seven, eight years, nine years now.
And, you know, I've seen these things come and go, right?
Like, I mean, Ethereum has had really bad times in 18, 19,
where everybody questioned that whether this is a viable product or not, or there's too much decentralization, nobody builds anything, this, that.
And then Ethereum eventually delivered its, you know, proof of stake merge and things like that.
And I think the same situation is happening now.
One difference this time is that, you know, you have a competitor or, you know, a few competitors at the, you know, knocking at the door and, you know, Ethereum does not have its, you know, sweet time to make changes and all that.
And the liquidity is, you know, flowing out, even though I would say it's still not like crazy amounts, but slowly it's flowing out.
And Ethereum needs to solve the you know kind of
this execution and a narrative problem it's more of a narrative problem than an execution problem
because on the layer twos the execution is as good as any other layer ones uh it's just the
liquidity fragmentation is there which can be which already interoperability is being worked on
so uh the that's the positive part is that you know there's a democracy and
it moves slow and you know we should have some leaders emerge and and things like that
on the and we can already see like you know now we have like danny back in the foundation and then
you know you have uh tomash leading it these are very able leaders and they are focused on building and they will,
they're always building stuff. And you can see some changes, even though they are still slow,
but they are like, you know, some changes are happening. Plus the layer two ecosystem in
Ethereum is also getting more and more united because everybody understands that if Ethereum
doesn't survive, the layer twos also don't survive. So that also is a massive force.
But of course, those layer 2s have also, you know,
a lot of conflict of interest also there. But the negative part, I would say, is like, you know,
there is a lot of pressure in the community because of the price movements.
Like, obviously, community always puts pressure when the prices are not great, right?
Like most of the, many of the people fortunately, I mean, unfortunately in the crypto space
and many of the people who are in the community, they put a lot of value to the price.
I mean, that's the nature of the markets.
But due to that price, you know, only in this cycle, I have seen the foundation getting
pressured enough to start taking some aggressive decisions or start thinking of decisions which might break the entire social fabric of Ethereum.
For example, there are talks of enshrining so many things which actually reduces the design space for L2s to exist and accrue value and so many other things are there.
People like the old this thing saying in crypto that decentralization doesn't mean anything
and this and that.
So compromise for UX and all that, which I don't think is the DNA of Ethereum.
And Ethereum should not break that social fabric.
The Ethereum community pressure should not pressure the devs enough, should not be able
to press the devs enough for that for price movements and all that.
They end up taking a decision which completely breaks the social fabric of Ethereum, which essentially is where a lot of these ecosystem projects also contribute in building the core infra and the ancillary infra, especially when we believe in the layer two roadmap of Ethereum.
So I think that's the negative part I've started seeing slowly,
that pressure from the price and the markets community
is being taken more.
I mean, of course, it should be taken seriously,
but it's being taken more seriously in the places,
for example, technical architecture design design where it shouldn't be.
It's fine to take that pressure in the narratives, doing more events, being more present and all that.
But taking that pressure and changing the things in the technical architecture.
Sandeep, I want to chat to you a little bit about Vitalik's direct involvement and a move to a very layer two centric sort of focus that Ethereum has adopted in the last over the years. And I think at first it was very successful, but obviously one of the biggest criticisms
has been this fragmented liquidity
and fragmented nature of the Ethereum ecosystem,
given that the base layer is now very reliant
on many layer twos to bundle transactions
or bundle DAP activity
and then use the base layer as the execution layer.
In your mind, is it a good thing that Vitalik has gotten involved and said that the Ethereum
Foundation really needs to be a lot more hands-on about the direction within which
Ethereum is going? And as one of the biggest L2s, have you had direct conversations with Vitalik about the way forward and what the best way is to steer the ship while maintaining some sense of decentralization?
Definitely. These discussions we keep having with many people. And I think Vitalik is probably the biggest force which keeps the Ethereum ecosystem intact.
You know, I myself, for example, whatever dedication I have for Ethereum,
I have introspected about it.
It shouldn't be that way.
But I think like a lot of my, you know, dedication in the past,
like devotion has been because like people like Vitalik are at the, you know, kind of.
More center stage and more ownership
and asking EF to also take a little
bit more ownership.
I would also, you know,
request Vitalik to take also part
in taking decision making because he's the,
you know, kind of for for lack of.
You know, kind of a better phrasing for it.
Like, you know, I mean, he's still the core DNA.
I'm not saying he controls everything,
but the DNA that he brought to Ethereum
attracted a lot of builders like me,
like, you know, Arbitrum folks, Optimism,
so many, you know, amazing builders
into the Ethereum ecosystem.
And then let's, yeah, and they all like dedicated their lives.
Of course, all of many of them have become
like really successful businesses and all that.
So the reward part is aside,
but many of them are dedicating their,
you know, important parts of their lives
and premium parts of their life in scaling Ethereum.
And I think most of them came
because of Vitalik being there.
And I really like, I would love to have like not only Ethereum foundation being hands-on,
but Vitalik being also more hands-on on how EF acts and what kind of decisions are taken.
So that the core fabric of Ethereum, which invited a lot of these, you know, kind of,
the core fabric of Ethereum, which invited a lot of these, you know, kind of, I would say,
you know, smartest of the smartest people in the world to scale Ethereum. I think they are not,
you know, kind of shooed away from that, which right now, to be honest, like in the last one
or two years, I don't really mind the price going up and down. The price will take care of itself.
I think the narrative also is like, you know, the ETH should have less value because, you know, the data is not going on Ethereum and the gas fees is a little
bit lower because previously all the data of the L2s used to go in the main EVM. Now it goes into
the data blobs, which are less congested. So the fees is much less, right? So, you know, initially
this was the request from the community. Now the fees is low.
They are saying oh, the revenue is low.
So the narrative like of course,
like the alt L1s will play their narratives,
but the narrative should should be that
in terms of the activity,
Ethereum is like probably 5,
10, 20 times bigger than what it used to be.
And if the layer tools were not there to scale it,
that activity would have
all moved into some other blockchains. So I think like when we say that, you know,
there is criticism of Ethereum roadmap and all that, that then people are only talking about
Ethereum as a single chain. Whereas if you see from the Ethereum ecosystem perspective as a whole,
which includes these hundreds of chains, there you see there has been phenomenal growth.
And, you know, eventually this will get priced in
into the markets also.
But what the anti, like, you know,
the alt L1s and other, you know,
kind of critics of Ethereum keep doing is
they pinpoint on the price of Ethereum
due to some activity, which Ethereum compromised
to, you know, a little bit on its price
and larger fees to make sure that the L2s were more supported for the long term growth.
People are like, you know, kind of people using that like, oh, because of this, Ethereum should not have like the value.
And because these markets are very, very driven by the prices, like, you know, then people are like, oh, Ethereum price is going down.
That means there is some problem with ethereum but actually if you see the ethereum ecosystem technically fundamentally
everything is probably five times better than what it was in 2020 2021 and you know eventually
that value is going to flow back into you know ethereum also because as these blobs uh data grows
and the congestion on the blob data also starts happening, then the fees will grow there and Ethereum will probably go back to his previous fees times and all that, including the blob fees.
So, yeah, I mean, that's the part.
So basically, like Vitalik being more involved and not allowing these price pressures to do this, I consider this generally a good thing for Ethereum.
Yeah, look, I mean, you're one of the people
that really intrinsically understands Ethereum at a base layer
and how important layer twos are going forward.
Last year, I had a long conversation with Joe Lubin from ConsenSys.
And one of the questions that I asked him was,
you know, a lot of people will sit back and say, hey, listen, you know, it takes 32 ETH to run a validator.
It's expensive.
Why should I deploy my capital there at the base layer if I can get a better return on investment, locking, you know, staking some value or staking some tokens in an L2.
And obviously, this has led to this sort of fragmented liquidity and a very fragmented nature.
As the Ethereum community continues to ask for guidance and a clear vision of the future,
as someone who runs one of the biggest L2s, can you give people a sense of how
everything's going to come together? Obviously, you've got things like AgLayer and a load of other
initiatives to really bring things together, chain abstraction, intense-based architecture,
which should take away a lot of the complexity from how the Ethereum network works and how
different chains interact with each other.
What does the future look like for you?
And are you still very optimistic that in a year's time,
the conversations that we're having about
what is Ethereum's future will be gone?
Yeah, absolutely.
That's why we saw this coming before many of the other projects.
That's why AgLair is the oldest, in the why like ag layer is the is the oldest in the
sense like you know l2 is getting into the interop and getting into the settlement like
it should not be confused with layer zeros and wormholes of the world who are more on the bridging
side and the app interface side for this interoperability whereas like i'm talking about
the settlement side like in inherent security security side of the interop.
I think like, you know, we started this Aglier product, like I think back in 2023 or mid 2023.
And we could see that this happening, you know, from there at that time only that this fragmentation will grow and the number of chains is going to explode.
And that's what we have seen over time that Ethereum ecosystem, if you consider all big
and small chains, considering total, I think there will be like 500 chains easily in the
ecosystem.
And my estimate is like in next, like as the markets pick up and whenever markets pick
up and there is funding back into the system, this will go to probably in two to three years,
probably 10,000 chains.
And if you also see even like,
let's take the biggest Alt L1 right now,
for example, Solana.
You see the biggest app on Solana,
like for example, Jupiter announced
that they're going to have their own chain.
Before that, I think Phoenix was a product
which announced that they are going to have their own chain.
Now there are rumors of like, I mean, I have not substantiated these claims, but there's rumors of Pump.fund probably looking to have their own chain and
all that. Like maybe these are like Pump.fund maybe might be completely gossip, but this is what I,
you know, heard from the people. And this I had seen, you know, on Polygon Peers also,
any app which becomes big enough, either they want
like gas subsidies and things like that, because even the low, low enough gas is not good enough,
when you have 100,000 200,000 daily active users, and you are paying gas for them. So my thesis is
that everybody will move into their own chains, eventually, if you have fast and good interoperability,
why would anybody would be
on some shared chain, right?
Like these public chains, for example,
any public chain like Ethereum, Solana,
Polygon, POS, Arbitrum One,
these are all shared chains
where anybody can come and deploy
their smart contracts
and run their systems.
Our thesis is that,
you know,
eventually everybody
will have their own
chain,
especially with the
layer 2 technology,
ZK and all that.
You don't even need
decentralization
except for the
immediate censorship
resistance.
Like,
you have censorship
resistance also
with forced transactions.
But for immediate
censorship resistance,
only you need
decentralization.
Otherwise,
you can have
centralized sequencers who can run the trustless code and you provide almost all the benefits of blockchains.
Except, as I said, that the immediate censorship resistance, which is actually not even available on Bitcoin and Ethereum also, where you can be also sanctioned if you are OFAC and many other things.
if you are OFAC and many other things.
But anyways, coming back to this,
the thesis is that literally all crypto
and non-crypto use cases,
eventually everybody is going to run their own chains.
And if their own chains are going to be important,
then what, and the gas fee then becomes like,
you know, is a race to bottom.
Everybody, if everybody is running their own chains,
they could technically run it on zero gas fees
and have other mechanisms to filter out the DOS attacks and all that.
So the gas fees on all of these individual chains will be a race to bottom.
It will be almost zero if not zero.
And in that scenario, what actually remains?
What remains is the settlement layer.
These are execution layers.
And all the big chains which promise high T layer. These are execution layers. And all the big
chains which promise high TPS, they are execution layers. What remains is the settlement layer.
Like, how do you settle? Like, if CoinTelegraph launches their own chain,
they are running their own sequencer. They don't need to pay gas fees to any validator and all
that. For the users, gas fees will be zero. But they will be submitting their settlement
proofs somewhere. And wherever they be submitting their settlement proofs somewhere.
And wherever they are submitting their settlement proofs,
those settlement layers will accrue probably some value.
And, you know, ag layer that we are building
is that cross-chain settlement layer,
which allows thousands and thousands of these chains
to submit their some sort of proving mechanism
and asset, you know, kind of ledger,
so that it combines them into one single global ledger and then gives you a final finality on Ethereum.
But you can think of it almost as a cross-chain settlement layer.
This is a settlement layer and execution happens on these chains.
In future, even Solana and all these other chains can also connect. So you have to ask like if let's say you were Uniswap, right? And you wanted to offer zero gas fees transactions to your users,
two milliseconds fast transactions,
like almost like a centralized exchange.
You can offer to your users by providing them zero gas fees and you can charge them on the trades, right?
Like the actual fees on the trades, which exchanges do.
And all you need is fast interoperability.
If I have assets on Uniswap,
I want to go and deposit into a lending borrowing contract like Morpho, I can simply move my funds
and then from other chain, it will just get staked in Morpho some other place. So the question is
that if you have fast and seamless interop available, why would anybody have, why would
anybody, why would anybody why would any app
or any dApp
will exist on a shared chain
everybody would want to have
their dedicated capacity
if they want to grow
beyond a certain
like 100, 200, 500 million
500k users
because those users
you can serve in a much more
kind of like
you know
quality assured
guarantees
not like your gas fees went up
or your transaction congestion happened
because Trump coin launched on your chain, right?
This kind of like, if you are running a serious business,
you can't allow and afford these kinds of user experiences.
So that's why the solution, something like AgLayer
and similar solutions like that
that are being built in the market,
we believe those are the future.
And, you know, we focus over there.
And I think like as those inter-op solutions
become more and more seamless,
then you will see that, you know,
that you will see that these problems
of fragmentation will go away.
The whole point of Aglier
is to have unified liquidity.
And even if your underlying assets
are on 100 different chains, you still feel like you're interacting on one single chain.
Sandeep, I've had some really interesting conversations with the likes of Eli Ben Sasson from Stockware.
And they recently introduced plans to settle ZK proofs to Bitcoin natively.
Why not do that?
Is this something that you've thought about much?
I mean, I know, obviously, you've been keenly involved in the Ethereum ecosystem for a long
time, but it's interesting to see a place like Stockware go and say, hey, listen, we
see the value of Bitcoin and we want to settle there as well.
of Bitcoin and we want to settle there as well.
What are your thoughts?
What are your thoughts?
Yeah, see, like, as I said that, you know,
I don't think in the form of L1s and L2s.
I think in the form of settlement layers
and execution layers.
And, you know, for Ethereum, for hard settlement,
like, you know, where your settlement is guaranteed,
you know, almost to some extent,
like a sovereign level guarantee guaranteed, you know, almost to some extent, like a sovereign level guarantee is, you know, only available on a smart contracting platform
is only available on Ethereum.
And only thing that can compete with Ethereum or even surpass Ethereum in that,
in providing that hard settlement, which cannot be changed by even the sovereign countries,
nation states, is Bitcoin.
So, and Bitcoin lacks some sort of, you know, scripting techniques underneath.
But if Bitcoin is able to solve those settlement techniques underneath,
then, you know, it can give a serious competition to Ethereum on that.
Otherwise, I don't consider on the settlement layer,
which in my mind is an L2 is a settlement layer,
or L1 is a settlement layer, everything else.
Even you would have read a comment from Vanatoli, from Solana.
He says that, you know, I would rather be execution layer.
And multiple times he has said that I would love to be even an L2.
And I just post all my data of the blockchain into Ethereum
if Ethereum provides that kind of throughput, right?
So the on the settlement layer, there are only two players right now, which is Ethereum and Bitcoin.
And if Bitcoin adds like, you know, more settlement scripting mechanisms and all that, you know, then I would say that Ethereum's like future is like, okay, this is like really really problematic because Bitcoin is obviously much more decentralized than those are there.
But we don't believe like right now, I mean, Starquare is obviously a pioneering team.
They are, you know, probably at the bleeding edge.
And, you know, they are trying to find some, you know, kind of techniques to, you know, provide the settlement.
you know kind of techniques to you know provide the settlement but then you know opcat like is one
is one opcode if it's available on ethereum and on bitcoin i think that will make
bitcoin like a pretty strong contender for settlement layer so so yeah i mean i don't
discount that that fact and for me i've been been like a big Ethereum fan and community member and all that.
I think that is actually the biggest threat to Ethereum.
I don't consider any of the other like L1s right now as much of a threat.
These are all like, you know, crypto coming and going waves.
Right now, I don't think that, you know, there is any competitor to Ethereum
on the settlement side.
On execution side, for sure.
But Ethereum is never competing,
has never competed on execution side.
For execution side, it's L2s
competing with other execution side
like Solana, Aptos, Sui and all that.
And their L2s are also doing like,
you know, good.
You can see like already MegaEath,
Ryze Labs, many of them are, you know, good. You can see like already MegaEath, Rise Labs,
many of them are, you know,
will have probably the same amount of TPS,
10,000 TPS on that.
Polygon POS, for example,
we are right now focused on single slot finality.
But beyond that, we will probably also,
like from 200 TPS,
we will also probably easily 10x the capacity
of throughput of Polygon POS to 2000 TPS,
then the throughput will be as good as, let's say,
like any other L1 chain.
And if you are a centralized sequencer,
you can have even higher throughput.
So the execution side,
I don't think Ethereum is even competing.
It's L2 versus, like current L2s that you call,
like Arbitrum, Polygon, Optimism versus Aptos,ptos, Solana, that will play out in the longer term.
But for settlement, yes, Bitcoin, if Bitcoin ends up adding those things, it would be a decent challenge for Ethereum.
I'm going to hand it over to Robby Narsan.
DP's got a couple of questions as we we shift the conversation a little bit away
from ethereum and uh into some of your other ventures of late yeah it's hard not to get more
into into that conversation but um we do want to talk about ai particularly is that something you've
been very involved in lately i like most people i'm interested in AI. But for me, I think what's most interesting is the intersection between decentralization and AI.
Now, yesterday we had the VC David Pakman of CoinFund on and we discussed decentralized AI projects.
You've co-founded Sentient, which is a decentralized alternative to some of these closed LLMs.
Could you just explain to us what are the benefits of decentralizing AI,
or perhaps what are the risks of the likes of open AI keeping their models centralized?
Yeah, I mean, on a higher level, see, on a higher level, it has always been very clear,
like you can see AI as a technology is generally a centralizing force, right?
Like here you are talking about
instead of like a million doctors,
millions of doctors all over the world,
now you probably need like one doctor
to treat them all, right?
Or like, you know,
as instead of like millions of drivers,
there is one AI which is driving
all the cars you know locally
on those machines and all that so it's
essentially a centralizing force
and there is only one technology
which has this expertise you know
in the world to decentralize stuff so it makes
automatically on a higher
level it makes obvious sense
that
you know it should that it should be important and it should be useful to have crypto fixing some of the problems of AI.
So on a higher level, that's true.
On an operational, because the devil lies in the detail, the fact of the matter is that AI is still pretty needs huge amount of compute like
ginormous amount of compute and it's really hard to decentralize that you know computation
as of now but you know obviously there are so many attempts at at least the training
side like you know the decentralization also is required on probably multiple sides.
The training side is one side.
Inference side is another side.
So, you know, obviously on a higher level, it makes total sense.
But on technically right now, it's a little bit harder.
But there are like crypto industry, crypto communities already putting in.
So many good builders are building on the data side, on the compute and infra side.
Like, for example, Sentient is approaching it from the model side.
Like, how can we have these models open source?
Because these models are the real power right underneath.
And, you know, our thesis is basically that, you know, in order for the world to bring or to get saved from the nuclear wars. It was not like nuclear warheads were dismantled
and that's why the world got saved.
The world got saved because multiple parties had nuclear bombs
and then there was mutual deterrence on the nuclear bombs.
Similarly, if we want this AI to penetrate that deep
into our daily lives and all that, it's actually better that you can already, everybody companies, and, you know, why only
companies, even individuals should have their own AI models running on their local machines,
which can guard them against if some rogue AI, you know, comes after them. So that's the thesis
behind, for example, Sentient, and, you know, decentralizing on all fronts, like, you know,
decentralizing on training, decentralizing on inference,
and open sourcing these models.
Like, you know, these three key areas are there.
And obviously, there's one more part is like
decentralizing the data gathering from the users
where the users can get paid.
These are like, for me,
these are like the four important categories in crypto AI,
and there are multiple attempts going on on these four categories.
You mentioned overlords, which, I mean, Google has to be considered one, and they've certainly
monopolized search engines and searching. Now, I'll be honest, the likes of ChatGPT and Claude
have completely replaced Google when it comes to searching, at least for me and at least for most things.
If I need an address or something, fine, I'll use Google.
But I found I've gone like full circle and I start posing full questions for most searches like I did to Ask Jeeves in 1999.
1999 um and for that uh llms are just markedly better how do you think blockchain can influence
And for that, LLMs are just markedly better.
the the search dimension of ai see blockchains don't directly influence the search part of the
search dimension of ai what they can actually influence is that as i said that you know they
can influence is like you know in in democratizing and decentralizing the uh said that, you know, they can influences like, you know, in in democratizing
and decentralizing the the data,
like, you know how they are
capturing the data like I mean,
you would you would be surprised to know that.
I mean, I don't know about chat GPT itself,
but all these search engines that you use,
they actually use, you know,
these search kind of adapters in the background,
which are eventually searching onto Google, Bing and DuckDuckGo only.
So when you are thinking that you are like, apart from like you asking AI to write an
essay or asking AI for something to check with your medical, let's say you've got some symptoms and all that.
But if you're asking something which is currently relevant
or currently the data needs to be updated for that,
these AI models are underneath searching the normal search models also
because the amount of data, the crawled and indexed,
and which is searchable that Google and these,
like very few others have,
like Bing and maybe DuckDuckGo,
two, three more like, you know, would be there.
But there, that is not easy.
And many of these AI companies will have to probably, you know,
and cash all that data, which is again like a billions of dollars of investment and all that.
So, but your question was like coming back to your question that how does blockchain help on that?
but your question was like coming back to your question
that how does blockchain help on that?
I think like, you know,
if somebody really wants to be the search engine,
like eventually they will have to go into this,
you know, because Google can very easily block.
And I don't know why Google is not doing right now
because probably they don't want to go too aggressive on that.
But once they have Gemini to a decent extent,
I think they will start blocking these search for other.
They should start, you know, as a business side, like they will start blocking the search APIs for other of these AIs.
Because these AI models are doing nothing but running a Google search in the background and then reading through all of that, like, you know, first 20, 30 pages, and then giving you a summary of what they found out.
And that's why if you go to Sentient or Perplexity
or some of these, like even ChatGPT,
they give you that, okay, here, here, here,
I found this data.
Many of the times they're just simply searching
in the background.
So blockchain doesn't help in this search part,
but blockchain can help in,
is that, you know, incentivizing millions and millions of these
websites globally to also allow um you know to also allow these decentralized let's say search
engines let's say something like sentient evolves in future to allow them to crawl this and you know
have their own indexes built and all that and then provide that search if google ends up closing the search on
that um so that's one part and otherwise like blockchain directly do not provide too much
benefit on the on the search side what blockchain provides benefit is like you know getting
communities coming together building these models who are better at search better at routing like
when you ask the query somebody that you know of that, the frontier model has to decide that, okay, this data doesn't feel like, you know, I can respond it from my existing knowledge.
And I can probably respond to it using a search.
And then that search happens. like other part of the model infra the the data the getting the websites to sign up because you
can get get them some give them some incentives in order for their data to be crawled and all that
i think there you the blockchain and crypto can use but not directly on the search that is like
a completely separate technology yeah it's funny the this sort of idea of like we're in this age
of aggregation really at the moment i guess extends
to llms because they're they're just aggregating search search data in the same way sort of ag layer
is is aggregating um i do i know you are pressed for time and you've already given us more than uh
we were probably entitled to i have one more question for you on an area that's particularly interesting to me which is um nfts now crypto
slam shows that nft sales are down 63 year over year for quarter one 2025 but I noticed that
polygon is still third on the 30-day charts uh of nft sales by blockchain and first by miles by
collection courtesy of the card collector platform courtyard um what do you i've asked this
in a few episodes of chain reaction lately but what do you see the future of nfts looking like
are they still evolving are they not going to return how they once were are they going to bounce i think like if you see nfts as a technology is used pretty pretty uh you know deeply in the in
many of the products that you use crypto today but in terms of these speculative nfts where people
are buying and selling for some prices and all that that has that you have seen that has gone down in the past few months probably.
That is because the overall speculation, speculative activity going down.
And a lot of this speculative activity going to the meme coins ecosystem.
And I think in these crypto markets, there is generally,
I mean, obviously on a higher level, there is less liquidity because of the high Fed rates and generally markets being risk off because of the, you
know, the crazy market scenarios and, you know, the volatility and people don't really
know what's going on and what can happen is can there be recession and all that. So there
is generally smaller amount of less,
the smaller amount of liquidity than before. And then also these crypto markets have,
and crypto and other markets also have this tendency of the money rotating into various,
you know, kind of categories. So if you end up seeing like a prolonged, you know, bull market, like since 2023, I think we have seen like one
September 2023 to March 2024. And then there was like this November, December 2025, 2024 to this
early January 2025 after that. So we have seen only these seven, eight months, nine months of
like, you know, kind of a bull market in the last, you can say, March of 2023,
when the Luna crash happened and 3AC thing happened. So it's been like three years. And
out of those 36 months, the markets have been in kind of a bull stage for maybe eight, nine months
only. So in that, it didn't get the NFTs didn't get enough time because obviously, they are low
liquidity assets. Also, they did not get enough time for the money to get rotated into it uh i think if you if hopefully
all of this like hopefully some of these if recession has to come comes this year and then
we are like you know through the bottom and then you know start moving and this some of this
volatility goes away as president trump settles in and he has less, you know, things to,
because right now a lot of things can be pointed to the previous governments, right?
And then they have to stabilize, probably get the rates a little bit down if possible.
And I think some of these activities are, you know, acting in that direction.
So there's blood on the street and then Fed has to, you know, pivot a little bit.
blood on the street and then fed has to you know pivot a little bit um but otherwise like uh you
know once if the rates come down and you see a longer prolonged market prolonged bull market or
at least like an uptrending market you will see capital rotating from like you know maybe initially
i mean altcoins bitcoins to altcoins to meme coins to NFTs to gaming.
Like, you know, these trends keep on coming and going,
but you need a long enough market for these trends to come to NFT.
So I don't think that NFTs are dead by any means.
They will come back, but they need a, you know, proper,
like more disposable income and more, you know,
kind of risk capital in the market for the capital
trickle down into that asset class.
Sandeep, you just, you gave Rob the answer you needed to hear.
I was just going to jump in with one last follow up to the end of that, which you're
saying we need a longer market, which I think you're completely right. Do you think we've seen,
if not the end of the sort of cyclical nature of crypto,
a complete change in how it cycles now?
I, you know, I do agree with that.
To be honest, like now crypto is not like a fringe asset class
which just moves with Bitcoin, you know, halvening cycles.
I feel that, you know,
because Bitcoin is now on the ETF side
and a lot of Bitcoin gains flow back
into crypto and these things.
I, you know,
this might be wishful thinking also,
but I do feel like, you know,
that those four-year cycles
should not be, you know, that relevant that much.
They will still be relevant.
See, obviously, Bitcoin supply is getting hard every four years.
They will have a very, like, you know,
kind of positive, you know, kind of movements in those years.
But generally, on the other years also,
it won't be like, you know, like we have seen like generally like 90% drawdowns are like very normal in crypto.
I just feel that those drawdowns will be less pronounced and they'll feel a little bit more like more professional, more mature, especially for the blue chip crypto assets that, you know, okay, in the non-halvening years, in the odd year, like, you know, let's say 25, 26,
you will have, or 26, 27, you have, you know,
maybe 30, 40% drawdowns, but not like 90% drawdowns.
And they will keep getting smaller and smaller
as crypto becomes more and more mainstream.
But there's more institutional capital,
which has more staying power many times.
So I do agree with that, that these cycles should not be as they are currently.
Sandeep, I know you've given us so much of your time already.
I think we're going to wrap things up, but I just wanted to ask you, how are you balancing all of this?
You sound like Elon Musk with all these different things going on and all these different endeavors.
How busy are you at the moment i'm extremely busy like you know i mean elon musk actually on
the joe rogan side that there's too much on my plate and uh that happens to me also many times
but obviously like you know for me polygon you know is my highest priority uh but like i do give
like you know um time to sentient also but I am mostly focused on these two endeavors,
Polygon, and then I give some time to Sentient.
Generally, yeah, that's the thing.
But there is still too much work.
Too much work.
In crypto, like I was telling yesterday only to somebody
that in crypto, that's one good thing.
And I don't want to be hypocritical by saying,
oh, this is not a great thing and all that.
Like crypto gives early liquidity to founders and team members.
And that's the most kind of positive part of crypto.
But apart from that early liquidity,
some of that early liquidity to founders,
everything is five times harder, five times.
Like the building business, building apps, like, you know, product market fit,
getting something, like doing actual fundamental startup things are super, super hard in crypto.
So, no, I feel you, Sandeep.
I mean, managing everything multimedia-wise at Cointelegraph is crazy.
And I mean, we cover everything in the industry.
So you can imagine how difficult it is to cover everything properly in Bitcoin, Ethereum, and then all these other ones that have propped
up. So look, I just want to say thank you so much for being so giving with your time,
chatting to myself, Robert and Zoltan, Cointelegraph, obviously, is always up to date
with what's happening in the Polygon ecosystem. We thank you for your thoughts, your time,
and good luck for the rest of the year.
We hope to catch up with you soon.
Thank you, Gareth, Robert, and Jolton.
This was really good.
The questions and the framing of the questions were really good.
And thanks for allowing me to speak my mind also in detail.
Of course.
I hope more people give you a platform.
Sandeep, feel free to drop off.
If you are listening to us for the first time, welcome to The Chain Reaction.
This is Cointelegraph's daily show. We are here Monday to Friday,
three o'clock Central European time. Can I say nine o'clock Eastern time now, Robert?
It's daylight savings this weekend, isn't it? Going back to normal?
it's daylight savings this weekend isn't it going back to normal uh yes i think i think you can i
i'm sick i have to have that um web app open that you type in two time zones and you drag the little
slider around to arrange things i have to have that at all times me too me too so yeah if you've
joined us this is this is us officially wrapping up the first month of the chain reaction if we
had sound effects i'd be playing that clappy emoji, celebrating sounds. It's been a great, a really, really great month. And what a pleasure it was
to wrap it all up chatting to Sandeep for 45 minutes. I can guarantee you stealing 45 minutes
of his day was probably the hardest thing that we've done this month. So I'm really grateful
that he took the time. Please, if you enjoyed this conversation, like and retweet.
I think Sandeep gave us some really, really great insights about the future of the Ethereum
chain.
I think he had some really, really interesting points to make about Vitalik's involvement
in the future of Ethereum and how important he still remains to the overall vision and
direction of what's going on in the ecosystem.
So once again, thank you so much for listening.
We'll catch you on Monday.
Like, retweet, please give Robert a follow, Zoltan a follow, Polygon a follow.
I mean, they've got way more followers than I do, but hey, give them a follow as well.
We've got Vince Quill here, our journalist from the U.S. news team in Cointelegraph.
Look him up as well.
He's in the audience here, So please go ahead and follow him.
He's been writing some fantastic news and features for us over the past few months as well. Once
again, thank you so much for joining us. Have a fantastic weekend, and we'll catch you again on
Monday. Bye-bye. Thank you.
