Ep: 477 - Grinding out Web3 Innovations in a Bear Market, With Jane Ma of zkLend - Transcripts

October 20, 2022

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In this episode of Crypto 101, we talk to Jane Ma…


all right everybody it is time for another episode of the crypto wanna one podcast but before we dive in to our awesome awesome guest in conversation today I wanna remind you guys of two things in the first one is if you go to crypto one oh one insider dot com you can join our private community here is where we have our model portfolio in all of our topics we also have a trip to wanna one university we have hours and hours and hours of written and video content that explains blockchain explains cryptocurrency in a very bite sized and easy to understand way in we have a weekly newsletter that goes out and quarterly state of crypto addresses that go out there's just a ton of value packed into this every which way so once you guys first I did go to crypto one oh one insider dot com today if you haven't already I also want to remind you guys that peace of mind and I recently just finished a book I took eleven months of our lives to write and we're calling it crypto revolution your guide to the future of money we walk you through this fascinating world of crypto currencies and blockchain in its part history book it's part instructional guide and it's going to really show you guys why crypto currencies are globally disruptive and how they're going to actually change in real life in real terms the way that we buy and sell and even live we include a bunch of how to's on getting started with your first exchanges we give you tips on how to safely buy and sell and store crypto currencies as well as how do we evaluate potentially good crypto currencies the best part of the books that were giving it away for free all you have to do is pay for shipping and handling so go to crypto revolution dot com and pick up your copy today all right everybody welcome back to another episode of the crypto one oh one podcast I hope everybody's having a fantastic morning noon or night wherever you guys are in the world you're in the right place because I'm joined today by not only my trusty compadre Mr Aaron pizza mine alone special guest Jane mom who's the co founder of seed a land so before even bring her on to discuss the future of US zero knowledge proofs centralized exchanges all sorts of crazy defy stuff let's check in with peace of mind over in Texas how are you doing Sir well we found ourselves in the wrong place earlier this week when it was discovered that PayPal apparently thinks it's god and has the right to find its users depending on what they write on the internet or potentially even purchase are they slipped a clause into their new acceptable use agreement that wasn't just a couple words but it was a whole paragraph outlining all the things that they consider themselves having the right to find a minimum of twenty five hundred dollars


walked it back I heard I heard they came out yes back they did after boycott PayPal started trending on Twitter and thousands of the hundreds of thousands of people have deleted their accounts myself one of them but it just goes to show well we've been talking about for years now that privacy is important it was I say like you know privacy is important but why is it important if you're not doing anything wrong they didn't doesn't matter but doing things wrong is your shades of gray at this point now because that's right you can just decide you could just take your call it certainly apparently paid off the final arbiter of truth with what's right and what's wrong being able to objectively say you know what you purchased is wrong or what you said on line is wrong so we're gonna freeze your money now they walked back so obviously they realize that the power of the people in the and you know the power of just a little bit of protest goes a long way but anyhow that was that was something really interesting that happened in in somebody obviously who we we kind of mentioned prior but somebody's gonna join us today to talk about privacy to talk about you know why I think she thinks that this is an important concept beyond just you know you know human rights but maybe even as a as a technical kind of advancement in cryptography we have Jane masa Jane welcome to the podcast thank you for bringing Z. K. land and your expertise to the show

thanks for having me Bryce and Aaron very excited to be here today yeah and chat all things I guess C. Carol ups defiant and really anything

do you have a hot take on everything that was going on with PayPal I do you kind of hear what we're saying you're like oh my god these guys are crazy what kind of show did I just get on or or do you kind of see eye to eye with what's going on here

you guys are crazy but I can

let you know

what's going on and I think what we often forget as like it isn't just about pay pal it's also about the different companies that they own so like I used to be


a huge user van mall right back in the day and and and it's it's it's yeah you don't think about on a day to day basis but actually like sprawls its legs across different multiple businesses

that's a good point that I didn't even consider I mean I have some some money from friend to friend over van moe with a little private remark that was probably not going to be something I would not seen in public but if they saw that and they find me twenty five hundred dollars I would be quite livid and quite poor I've got **** coins to buy PayPal you

I was never get rid of bear markets

how's the how's you Caitlyn kind of been navigating this bear market as as a co founder you know you guys have kind of traversed a few different market light what landscapes what's your take right now

yeah I mean it's definitely been a very interesting experience I would say probably different for every founder across the spectrum within web three I would say is a skill that is still relatively new the team was formed late last year and we really went out to fundraise and we're we're we're in the process of or intestine and looking to launch a product in the next couple of months so I would say for me it's it's a little bit different than I would say some other founders who have projects live already because obviously they need to take users and hide the changing landscape into account before us were really just hunkering down and making sure we deliver our product on time as promised and and really sticking the timeline whether it's agreed to prepare a post there

yeah you guys are just builders in and focus pretty much on just making the the best product and and that kind of leads us to the next logical question in everybody's mind what is Z. K. land high level hit us with the big idea

sure so in a nutshell we are a defy lending protocol with both retail and institutional approach built on a new layer two network called stark that and for those of you who may be our only hear about starting up for the first time stark neck is easy K. roll up layer two network that I guess I guess out bill is built in some ways on top of Ethereum so you get scalability so if you think about I'll choose it's all about compressing transactions and making sure their scale while preserving the security of their what

yeah I always I always kind of view this whole evolution because we there's a lot of technical concepts there it and at the end of the day you know a lot of the users just that they're just like okay well I want to hear about that and using you know and facing consumer facing products and the technical mumbo jumbo doesn't matter but if people kind of remember back in you know the early nineteen nineties like you have


internet right and the internet it has no bandwidth has no scalability and you could push you know simple files through text messages I'm you could have very simple applications basically built on top of the internet but there were some people who are like oh my gosh one day we're gonna be able to stream live video through the internet the same internet that we're using to send you know a a file packet that takes you know ten minutes to download one gigabyte or something

I'll be

able to stream that four K. all across the world and it's going to bring video to the homes of everybody and and that's just the tip of the iceberg and then other people are like no you're crazy but here we are and so I'm kind of trying to draw a parallel to where we're at with him currently where we have a theory in which there's amazing applications we can have on it we're gonna have decentralized lending markets and decentralized money markets to every citizen of the globe and it doesn't matter where you're at you can access credit you can do transactions and swaps and all that stuff but then we have a technical barrier Assyrian can only do you know fifteen transactions a second or whatever it is and we we we kind of the rubber meets the road but I think Z. K. lend

it you know in

particular maybe I'll say I think stark where in stark net could be that scaling moment where we actually start to open up the band with a few rooms so that applications like Z. K. land can now service hundreds of thousands of people simultaneously anywhere around the world that wasn't possible really prior to a lot of these layer two

yeah absolutely couldn't agree more and I think one statistic to really point out is you can basically fill up you can basically felt like a proof with up to I think five hundred or so called me on it but you can you can you can basically fill a proof with hundreds of thousands of transactions whereas Ethereum through part right now is about twenty two transactions per second so this is like scaling in the hundreds of thousands and and opening up possibilities that I guess people aren't really even thinking about right now and the one that I'm really excited about besides defies actually gaming and and that's actually an ecosystem that is currently driving on stark that

really interesting we really haven't talked at all about stark net over here of about all the different layer to user out there that's the one that we're probably least familiar with so that's interesting that that's the gaming one to start it have its own validators dizzy Kaelin have its own validators and if so is it still even necessary to do a final settlement on Ethereum which is also no proof of stake

yes start does have its own I guess validators validating the proofs are generated on on start that so the way it really works is that in very simple terms basically let's just say Erin you make transaction your transaction is basically patched together alongside multiple different transactions across different applications and basically there will be a proof that gets generated with these transactions basically saying Hey the computations that I'm making are correct and and please check them and so basically the prufer will generate such proof and basically there will be a validator on if you're in there one saying okay the state changes are correct and this is indeed something that is cryptographic they prove it like I don't actually need to know exactly what the transactions are but the cryptographic proof basically says these transactions are valid so things are proven by math and not by any kind of arbitrary judgment

that's awesome and and you know through this whole process there's a key component it's the Xander token can you kind of talk about where that Xander token fits into the the application

yeah so I guess separating a little bit for the K. line you know we are building an application on top of stark net so this I'm talking is really and and it's not a token that's launched yet but it's really core to our own protocol because the token is in some ways the purpose or our way to really incentivize different types of activities so with our protocol we have different lending and borrowing pools and how do we make sure that you know lenders and borrowers are always of the tools that we need them the most so for example maybe everyone wants to deposit you STC but no one wants to bar USTC because there just isn't demand for it right now and everyone wants to borrow each right how do I ensure the equal actually has enough supplies that people can actually go around barring part of it is obviously in terms of the interest rate mechanism so making sure that your interest rates are priced attractively enough certainly incentivized activities on both sides but the other lever that we can actually pull is there are is an token which will incentivize different types of activities through I guess through our own it the ownership of center begins it's also our way of getting users to participate in the governance of the protocol so I I know sometimes governance is not on top of mind for a lot of people but it is on top of mind for me and the future of the protocol for me right now I'm building kind of the architect of what I think the protocol should look like but in the future in terms of whether to protocol should go what type of asset should be listed and and yet I doubt they should all be determined by the users themselves which is why this I'm talking to so pardon

what made you want to be a builder and web three with your educational background you could literally done anything in life but what was it about this market in this sector and this time the jury with

yeah absolutely so I love operations so I I started out my career in banking I studied econ so I I really actually love the macro environment I love reading the news and I just love understanding what happens right like when the fed moves like how does this affect markets so inherently after college I just joined I joined a bank and I worked in sales and trading but after a while I decided you know a little bit too corporate for my personality and I wanted to do something like one eighty and so I actually went to a start up called Deliveroo and I worked in operations and what operations literally meant was like driver operations so like making sure there enough riders at different times of day when people actually want to order the most and making sure that you price incentives in a way that gets drivers to come out and and and work and and deliver and and really service the customer so putting two and two together I ended up loving my job at Deliveroo I thought it was one of the best job I could ever have I was on the ground actually like talking to drivers at times I was talking to restaurants I realize this is the type of environment I love like I love boots on the ground like figuring stuff out but you know after a while the company IPOs and I was thinking about my next up and kind of put into two and two together I was like okay I actually really like markets and I I love learning about it but I like I like being on the ground select what works right potentially D. five potentially right three I wasn't entirely sure yet but actually have been a user of web three for some time I I really liked it but I wasn't sure if I wanted to move into that full time so when I got a chance to meet some really really talented people including Jonathan our CTO and Brian I really felt that we could put a team together where our skill sets would complement one another so for me I love office for Brian he's like a finance guy through and through you know that's where he spent the past I think fifteen years of his career and Jonathan is a really really really good all blockchain developer to really thought that this this could be the Dream Team

how did you meet them I was just gonna say the same thing beats

yes so I met them actually through a couple of mutual friends and and they were all actually in the space of one three you know what happens when people joined like web three companies are they start their own business this is all they can talk about at dinner tables so a couple of my friends we got together and we started talking and they were like oh you know I'm I'm in this space I really love it and I'm like oh I really want to learn more like I've only started trading on like I don't know like I said I saw using compound let's just say I'm like I don't understand this and as I was asking a bunch of stupid questions they're like well you should talk to this guy because he's also like looking into the transitioning full time the space but not sure what opportunities there are out there so it was really like luck of the draw but obviously we came together

and so like you got you all three got together and then you guys raised five million dollars at what point like was that you guys had three been kind of working on this and you already had people working under you work kind of that money helped you now to scale a team and and and how big did you guys get

yeah I mean we definitely floated around the it wasn't like we got together and it was like okay let's go fundraise let's quit our jobs it was really more like okay we got there we liked each other not too sure like let's let's like try it out and so you know we we got together a couple weekends tried to put together I guess a white paper and proof of concept and and really floated the idea around our friends first to see what works you know originally we knew Z. K. what's what's the future of Ethereum but the timeline was still a little bit more key than like I remember I tell like saying like zero up still have a couple years ago so it really wasn't like okay let's fight okay jobs tomorrow and do this but after a while we also spoke with stark where we really felt that you know this is a viable business so let's let's go out there and see what investors might actually be interested and we actually went out we are target was actually to raise a lower amount because we weren't sure what how the market will reactor product but you know it was it was really quite strong going there which is why we decided okay we we could we were actually able to raise five million dollars

what were some of the challenges that you feel like you personally kind of faced when you left this comfy cushy job I'm not gonna say like banking easy by any stretch of the imagination but it's not being a start up founder and and then you kind of go in to founding the start up did your parents kind of like a laugh and say like Hey look what do you do and J. like this is a great job like you could have a great retirement this is easy just chalk it up your colleagues are like crypto you gotta be kidding me like your your with what was there like this tension or was it just smooth as butter

no no there was definitely a lot of tension I think the and I would say it specifically to web three per se I think it's just a difference of working at a company and being a founder of a company is really you're the person that's pushing the pace of the project like no one's going to be here to be like Hey once it's done right like I do a day between me John and Brian we really have to push each other to make sure that we met meet the deadlines because especially in a bear market especially because things move at the speed of light right there are so many things pulling you in different directions right maybe the flavor of the month isn't borrowing and lending it really makes you doubt okay well like if everyone's like flocking deliciously perks like is this the future or should I be focused on building my product so I would say making sure that we or not or or like laser focused on what we set out to build rather than thinking about all these different variations of things that we could build it is most important and and it is also a delicate balance right because you also want to stay relevant to the market the same time you don't want to be blind sided by like everything that's coming and just get lost in the in the crowd

yeah I feel like everybody and their brother right now is launching an ad to centralize perpetual futures exchange on our bedroom is is that just me I mean I know you just kind of made a job at it but it's true like there's like a hundred of these things have cropped up in the last like ten minutes ten weeks

yeah I mean

that's true

yeah I mean I think I think purpose aren't awesome product but it is the flavor of the month right now and and it's hard not to talk about in any conversation

how did you decide on going in it is a stark where instead of arbitrage or instead of optimism or instead of matic

yeah I love that question actually so our CEO John he really really geeked out on C. Carol ups he he did a ton of research on it start looking up to me and this is like middle of last year one like Selanne was still kind of like the flavor of the month I would say


Z. K. an optimistic roll ups were just coming into the picture by John really believed okay you can also take longer than optimistic roll ups are he really sees given that like they're backed by proofs and not I guess yeah background executive it said not not so much by like trust I guess and and just assuming everyone's a good actor he he really felt that this was the future for me right it took a little bit more convincing and and what we focused on was more so the ecosystem so we really explored like C. K. saying stark where squall and and at some point even my colleague on Hermes which I believe is coming to the market right but after meeting with the stark or team what I loved the most as beyond kicking out on the tack I really felt like they were a team that delivered so Ellie was he's the chairman of start where he's the guy who started Z. cash and with zero up there actually to like major uses one S. privacy which is something you guys have mentioned and and and something I'd love to talk a little bit more about and the other is actually in terms of blockchain scalability and was struck not they really focused on blockchain scalability so you know solid track record of Z. cash and stock X. which towers D. Y. DX as well as immutable we're like okay well these guys are legitimate like let let let's start with them and and obviously they have not disappointed I look back on kind of the products that start where has delivered it isn't just about C. K.

roll ups it's also about things like recursion so trying to make sure that like you can scale even more transactions in a single proof or proving that the proof was how do I say like basically proving that like proving a different proof so basically you're like recursive adding like different transactions more more transactions into one single proof and and you already have and and things like account obstruction these are all kind of and later three's a privacy layer these are all like new products that were really never quite discussed when we decided to go into start at but given the team has really just been focused on delivering I just keep seeing your new products come out there not only just about zero ups

let's continue that train of thought into privacy and C. K. prices are big fans of zero knowledge technology and all the different things unlocks as well as the flexibility of what it won't unlock what are your thought processes and building that into see Kay let

yeah so this is this is a really interesting topic and and and I I think I want to clarify that unfortunately with well I don't know but unfortunately I would say it would start not the focus is really having a public blockchain so everything is transparent like it is on Ethereum and the idea is just to use the Carol ups to scale the network so that you can fit a compressed any transactions as you can into a single proof but that being said obviously given stark wears track record you know the idea of using Z. K. roll ups for privacy is extremely extremely interesting that being said we we really put some thought into it and it's unfortunately not as simple as saying Hey we're just going to go on to our privacy layer and like people won't be able to see kind of what's been deposited or what's been borrowed by different players because obviously there are certain needs and certain people that might want to keep their transactions private but the technology itself is a little bit more conducive to things like Texas so things with trading volume of the same size so for example if Erin your trading hundred east then just kind of like the cash and tornado cash right the size of your transactions need to be the same so that could be passed with borrowing and lending it's a little bit different given the quantity and amounts are always slightly different and so I think in theory the idea of private transactions sounds really good and and I I would argue there's definitely use case for especially for institutions I just don't think we're quite there yet

so you guys are kind of attacking or from from what I from what I see you guys are attacking the angle with a two pronged approach I tak an industry with a two pronged approach and and that's like V. D. five kind of a retail product that you guys have with Artemis and then the institutional side of the of the business that you guys have with the Apollo product and so can you kind of tell us about your your two pronged approach here

yeah of course so what are the best it's really a permission this product so anyone would be able to use a protocol to borrow in mind and we are looking at over collateralized station here given we don't necessarily know the identity or the credit worthiness of of the different participants arm with ed I guess just to add on that the goal is really to be calm kind of an ecosystem lead in this space so it's not only about borrowing and lending things like either USTC but we actually want to enable things like isolated markets to support the different native stark nat tokens it came via defy or whatever there is out there

the big ideas so it's it's kind of like this kind of like maker down a sentence at the centralized lending facility it's over collateralized and on the other side instead of getting die you get U. S. D. C. or you get tether or potentially down the line one of these other ecosystem tokens is that right

yes in some ways I think I think it's just more so enabling the the borrowing so if you want to deposit USD seat you're able to borrow any of the ecosystem tokens but obviously given that there are longer tailed assets in existence especially for the ecosystem tokens we do plan to launch things like isolated markets so really isolating the rest of core markets from some of the tokens that might be a little bit more Paula tile so people are actually engaging in isolated markets might be able to earn a higher yield if they deposit their USTC and isolated market knowing that the people who are you putting up collateral might be putting up collateral that is slightly more risky than the likes of something that is in the core market so in terms of Apollo the the purchased lightly different it is I guess a permissioned service so the way you think about it is instead of both borrowers and lenders being anyone with a wallet the idea is each lender will be a K. Y. C. R. K. Y. beat institution and in order to borrow they would need to go through both off chain and on chain analysis around things like AML CFTC and and and kind of their credit history and the idea is ultimately these guys beat market makers are V. sees would be able to borrow create their own pools borrow and potentially borrow from either retail users or other institutional users depending on what their compliance requirements are

one of the things we always hear talked about is the big barrier to entry in web three is the user experience especially the Ethereum ecosystem if you know how to use synthetics that doesn't mean you know how to use compound others like no unification really but we've seen a lot of kind of copy cats of your swap as he from a user experience perspective just so people have an easier entry part of the problem was user experience how what's your perspective on continuing to copy what everyone else is doing so there's familiarity versus redesigned from the ground up something that you feel is better and more simple

yeah I mean that's a that's a really tough question I I think my


my my initial answer would be definitely like the one we designed when we went about designing C. K. line we definitely reference protocols that worked right so thinking about the user experience what we're used to what we liked but probably because Brian I actually come from I tried fire web two background it was a lot of stuff that actually didn't make sense for us so for example one of the things that I'm I'm I'm very interested in exploring is when I look at interest rates right now for how interest rates are priced right now and lending protocols you're really focused on things like utilization rate initial cool I really determining interest rates based on that and that's how users see that but for me coming from a try fi background like what I think about when I think of interest rates is like I think about what other banks offer like how is my interest rate that I'm being offered competitive compared to what another bank is offering to meet and sorry going back to your question about like user experience right yes I think like user experience is important you why it's important how they interact with the protocol is important but beyond that what we're really thinking about is some of the designs and web three like do they make sense and how do we actually make sure that some of the things that work in what three we keep as other things that don't necessarily make sense or so actually makes sense and trap are right now we also bring over

love it can you tell us a little bit about some of the milestones that you guys have hit maybe in terms of and it will anything that you guys are particularly proud of in that one highlight but maybe even in terms of like how big the market cap of the network is be calmer how much total value lock you guys agreed

yeah I guess a little bit more about it it might be a little bit premature in terms of products that's because we haven't launched on the not yet but in terms of milestones we so if I made back in March and we launched our test not three months ago sell out late July and so far it's been it's been pretty good we've definitely gotten some feedback especially around are you alright from some of our investors some even from ecosystem guys as well as community members and we actually decided to do a complete re scan so not everything is always been sailing right sometimes things don't work and and we need to turn the ship around and so we are looking to launch our art and this may not in the next I would say two months depending on kind of well it's dependent on stock next time line at the same time we think it's going to align very nicely so I'm hoping to really launch in Q. four on main that and and and hopefully go out with go out with a bang but obviously this is only one half of the product the other half of our product as Apollo which is our institutional product and with Apollo we are hoping to take a more white glove approach so not just build the protocol and see who picks it up a rather aligned with the institutions actually want to come on board and build the product around what they want so our goal is to identify the institutions that would come on board sometime in Q. one to Q. two of next year and then it built the product and ship it sometime in Q. three so hopefully by Q. three we can fully transition into doubt set up

I think that's really really smart just simply Taylor directly to what your customer wants you're going to have them for life in way to approach things Jane this is been so much fun talking to for the last thirty five minutes or so just one more question before we let you go and get back to building the future for those who are listening to the podcast for the very first time in their learning about what PayPal did Z. K. roll ups and all this stuff can you also give them one more word of advice just for getting into this space

yeah honestly I think my my one line is due to be is your best friend and I'm sure a lot of people might might think that or maybe they won't dare to say it but I probably learned like ninety five percent of what I learned on YouTube just watching a ton of like thankless but I'm not X. and and really watching the videos and asking are getting the answers can you do for the dumb question I didn't necessarily dare to ask someone who's very experienced like I would go to back to basics right like how do I get a wallet right

how do I train I mean these are things that might sound super super simple but not it took me it took me days if not weeks to learn some of these things I would say like don't be put off just because someone starts talking about what three and like how they trade on you swap and like slippage A. M. men's like these are things that don't necessarily come naturally and you actually need to

time and effort to learn before it becomes

there are

yeah well said a great note to end things on Jane thank you so much for for coming on the show and for everybody who's at home listening hope you enjoyed come back around later this week we'll have some more amazing yes thank you so much and

thank you