Kyber Network’s Loi Luu In The Studio
There’s a special one loaded up for today. I recently spoke with Loi Luu, Co-Founder and CEO of Kyber Network. We blocked out time for a video chat and the wonders of the internet handled the rest. The meatier parts of our convo are shared below. If you want to check out the rest, it’ll be on our blog later today.
Stocking a rucksack with rations and documenting my trip down a select rabbit hole are a hoot, but so is interviewing founders. Picking their brains lets us pull gems that aren’t available anywhere on the World Wide Web. If done right, I think interviews are invaluable and hope that they are received well.
And there are several waiting in our queue. As handy as our analyst Nick is, he’s not an octopus. If you have a couple free hours between Football Sundays this Fall and would like to lend a hand give us a shout at [email protected]. Or, slide into my DMs on Twitter – let’s get a conversation going.
Can you tell us about your personal background and how you got involved with Kyber?
Before Kyber, I was doing research on Ethereum and cryptocurrency in general. So I wrote and created the first smart contract analyzer called Oyente, which is now being used by several blockchain projects including Quantstamp, Augur, and Melonport. After that we started working on the first sharding protocol for public blockchains, which inspired the current Zilliqa blockchain. If you haven’t heard of Zilliqa, it is one of the most promising scalable blockchain projects and is based in Singapore.
We then started working on Kyber. At Kyber we are creating a decentralized liquidity network that connects different tokens and applications. The whole idea here is that we want to allow different tokens to be easily and seamlessly usable in other applications, including exchanges, landing protocols, crypto payments, and many more. And any token available on Kyber can be utilized and useable on other applications that have integrated with Kyber.
The first stream of text on Kyber’s website reads “Connecting The Tokenized World.” Can you explain how projects will interact in the tokenized world being built by Kyber?
So Kyber is working towards a future in which any token can be used anytime, anywhere. So for example, if you hold gold tokens, instead of storing them or trading them on exchanges, we want to enable users to use gold tokens to, for example, buy a t-shirt, play video games, or even contribute to some research or index funds. How we make this happen is by building a decentralized liquidity network that allows any token holders to contribute liquidity to the network, such as token team or market makers. At the same time we can allow other applications to use it. That’s why we have the surrounding network with Kyber in the middle.
For example, if you wanted to buy a t-shirt and your favorite t-shirt store integrates with Kyber, you can buy one with any token that is available on Kyber. That t-shirt store will receive payment in Ether, Dai, or any other stable coin available on Kyber, because Kyber performs that conversion in the background.
In terms of mainstream adoption for decentralized exchanges, if you could pick one item of many issues, what would that be to make sure we can have more mainstream consumer adoption?
I think, not only decentralized exchanges, but also other decentralized platforms and applications share the same issues with poor user experience and low liquidity. So at Kyber we believe that liquidity really boils down to usability and how the tokens can be utilized or used in many other different applications and use cases in an instant and seamless manner and with low cost and low friction as well.
Many decentralized applications require their own token from the users, so if you want to use applications like Gnosis and Augur, you have to buy the token from some other place before you can actually use them, so you may have to hold hundreds of different tokens just to use some popular applications. Just thinking about it, on your iPhone app you may have like 50 different applications… are you willing to hold 50 different tokens? I’m not sure, I’m not sure.
So with Kyber we really want to build a future where you don’t need to buy 50 different tokens in order to use 50 different apps. If the dApp integrates with Kyber, it easily accepts different tokens that are available on Kyber and in the process of doing that, they can dramatically expand their user base, by integrating with Kyber and accepting different tokens. Users may hold OmiseGO tokens, or Augur tokens, or Kyber tokens, and the dApp can reach out to all of these users who may not have their tokens.
There is another item on Kyber’s roadmap that isn’t released yet – Gormos – is that still a secret project/update? Is there any information out there that has been released to the public?
We have been giving a couple of talks here and there about Gormos. The idea with Gormos is to improve the user experience and scalability of the underlying blockchain that we want to run Kyber on top of. The problem that we are seeing is currently there is still long latency in Ethereum. Anytime you send something, you have to wait like 10 to 15 seconds for the transaction to be included in any block, and you have to pay high fees as well, from $1 to $5 or $10 if the blockchain is congested, due to FCoin or CryptoKitties or what not.
Our goal with Gormos is to have a high performance, scalable public blockchain that is still secure and decentralized, so we want to improve the performance without losing all of the existing good properties that the public blockchain offers. With Gormos we use sharding and plasma as an underlying technology so that we can achieve the best of both technologies. But the cost of Gormos is a little bit application specific, meaning that if you want to run your game on Gormos, it will different than running a decentralized chain on Gormos.
So it’s not like the “world computer” like Ethereum or the “internet computer” like DFINITY. Gormos is more like an application specific blockchain, something similar to like ASIC miners. The high level idea is if you want to optimize for any applications, there are certain tricks that you can do through the underlying architecture to fully improve the performance of the blockchain for that particular application.
As for recent news about a Bitcoin ETF, that conversation was hot a few days ago, and there was a lot of optimism about the SEC approving the ETF. However, that decision could be pushed to as late as February 2019. It seems like that conversation influenced the market’s direction in recent weeks.
I’m less interested in ETF and SEC approval. There are still several problems that we need to address in this space, and of course custodian solutions are one. I think many people are trying to address it, but there is no standard and people are not talking to each other to create one. Everyone is working on their own solution in their own space, so it’s very hard to come up with some standard for everyone to follow and implement.
In Switzerland, 3 or 4 companies that I talked to at the Crypto Valley Conference are working on their own custodial solution, and surprisingly they don’t even talk to each other. Like, they are working on the same thing – why don’t you guys just talk to each other and create some standard? It’s the same thing in Singapore – everyone is trying to work on custodial solutions and trying to get ahead of hedge funds. And a lot of hedge funds are trying to jump into this space, but they still need this infrastructure in place to participate.