GRTiQ Podcast: 127 Alec Shaw

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Alec Shaw (00:19):

Our system, as mentioned, it’s 100% permissionless and we’re trying to make this thing an unstoppable piece of infrastructure. So with that being said, everything on our front end is powered by The Graph.

Nick (00:32):

Welcome to the GRTiQ Podcast. Today, I am speaking with Alec Shaw, the new CEO at Tenderize, a leading liquid staking solution for web3 middleware. For a long time, listeners of the podcast, you might recall that I previously interviewed Nico Vergauwen, the founder of Tenderize in episode 87. In the coming days, Tenderize plans to release V2 of their solution. So I invited the team back on to talk about what we can expect and to provide some insight into what they’ve been working on.

(01:31):

During this episode, Alec shares his journey, starting from his college days when he began working on blockchain products and developed an interest in web3. We then talk about his transition to Tenderize and explore the upcoming release of V2, which I expect will get some attention and discussion throughout The Graph ecosystem. During the interview we also talk about the features of V2, and I ask Alec to address some criticism surrounding liquid staking and its implications for protocols and protocol economics. As always, we started the discussion talking about Alec’s educational background.

Alec Shaw (02:09):

I grew up in Chicago, Illinois, in the suburbs because that’s often the follow up question. So I grew up in Glen Ellyn, Illinois. I went to Marquette University, where I studied finance and economics. Marquette is in Milwaukee, Wisconsin, and to be candid, I wasn’t a star student, but I did do some extracurriculars when it came to this new Bitcoin, crypto and blockchain space. Started some stuff up on campus.

Nick (02:40):

What did you plan to do with your degrees after college?

Alec Shaw (02:43):

Yeah, I wanted to be a financial advisor actually. So growing up money was a little bit of a source subject in my household as it is in many households. And all I wanted to do was just better understand money, how it was made, how it flows, with the objective of helping my loved ones with finances.

Nick (03:05):

Alec, that’s interesting. I’ve never had the opportunity to speak with somebody on the podcast that planned to become a financial advisor. And in the US this is something that interests me personally because I feel like at some point that’s a domino that needs to fall. I mean, we talk about institutional interest in the industry, but at some point, retail, Joe public and Sioux public are going to want access to these types of assets and the most likely path is through a financial advisor. When you think about that, given your background and interest in the field, how do you think the future looks? I mean, will it one day happen that financial advisors will be advising clients on digital assets?

Alec Shaw (03:41):

Yeah, I think it’s 100% inevitable. So something I think about a lot, I have younger siblings who grew up playing video games and the idea of a digital asset is not foreign to them. So they’re absolutely used to having value in a digital realm because they’ve grown up playing video games like that. So what seems very foreign to us and foreign to the financial advisors of today, I don’t think is foreign for the financial advisors of tomorrow, nor this up and coming generation, the Gen Z, they are very familiar with digital assets. So I think they’re going to be demanding a financial advisor that understands these assets.

Nick (04:26):

Well, that’s a great take. And so what I hear you saying is not only at some point this will likely occur, but it’ll be a point of differentiation or a competitive advantage for advisors who are open to these types of things and can position to younger generation of investors.

Alec Shaw (04:42):

Yeah, absolutely. And if you think about the introductory sales pitch, when a lot of people learn about Bitcoin, they hear that the United States dollar is being inflated away and there is a hard currency alternative called Bitcoin. This is the exact same narrative that we’ve heard over hundreds of years selling gold. But for the younger generation, a Gen Z character understands that narrative but doesn’t understand the value of holding a piece of metal in their backyard. They do understand that narrative and they figure the best way to protect myself against that inflation risk is to buy a hard asset, but that hard asset is in gold in their mind.

Nick (05:26):

Incredible perspective there. So let’s go back to your college. You were mentioning while you were at Marquette University, you helped co-found a blockchain lab, which was for students. What can you tell us about that? That must have been pretty innovative at the time.

Alec Shaw (05:40):

Yeah, it was definitely new. So it was late 2016, we had been tasked with researching an emerging market and a lot of people chose developing countries, their stock market. But a kid in my class was like, “Hey, do you want to team up and study some crypto?” And I was like, what the hell is that crypto? I refer to this thing called blockchain a little bit, and it was pretty popular in Wisconsin where I was going to school because individuals in Wisconsin are very into individual freedoms, into agency, into self sovereignty, and a lot of those core principles are very relevant and very prevalent in the crypto space.

(06:30):

So as we started asking around on campus like, Hey, do you know anything about this crypto thing? Do you know anything about this blockchain thing? We actually had quite a bit of interest. So what we did was we approached our university, we asked for a little grant, and what we did was we started the Marquette blockchain lab, which was an educational hub as well as a full service consulting business for anyone in the community, whether they were a student or even a manufacturing client in the area, they could engage with the market blockchain lab, learn what this technology means for them as an individual, what it may do to provide value to their business, and ultimately it was a community for people to share ideas and hopefully ultimately kickstart a crypto community in the Midwest.

Nick (07:23):

I’m always curious about what’s going on on university campuses, and so the fact that you are a student in 2016, you launch this blockchain lab is interesting to me. I’m curious about what the university thought. Was there pushback? Were they skeptical of what you were doing or did they actually get behind it and kind of see the technology and the innovative nature of it?

Alec Shaw (07:47):

Yeah, great question. So the ironic thing is when I first pitched this idea of a crypto or a blockchain lab, they said, “Hey, we love the idea as long as you focus on the actual technology here, not that weird currency, which is Bitcoin. You know that thing’s only good for illicit activity.” The university associated Bitcoin with illicit activity and they associated blockchain with enterprise value. So they said, “Hey, you could have your grant as long as you focus all of the conversation on blockchain and not crypto.”

(08:29):

But to be honest, myself and a couple others, we really saw the value of crypto and a lot of our conversation was focused around assets, but we did also have to satisfy the university’s desire just to focus on blockchain technology. So that’s something I cheer a lot. Most universities are very excited about blockchain and often are a little bit more skeptical about crypto.

Nick (08:57):

So was this the first time in your life then that you became aware of crypto and started exploring these types of topics?

Alec Shaw (09:03):

Well, to be candid, the first time I ever came across Bitcoin was when it was 2014, I was wrapping up my high school career and I was moving on to my university. And I had some friends that were already in university and I needed to get a fake ID so I could go drink with them at the bar. To be candid, the only payment that was accepted on this website was a Bitcoin. So what I did was I Googled how do I get a Bitcoin? It was only like 200 something bucks at the time. So I walked down to the bank, I put my 200 bucks in and I prayed, and sure enough, 24 hours later a Bitcoin showed up in my wallet. I used it to pay for the ID. The ID showed up at my house.

(09:51):

Though it’s a very unfortunate first exposure to the technology, I saw firsthand that it did work exactly as designed. And when I was reading about how I acquire that Bitcoin, I came across a community called the cypherpunk, and those individuals cared deeply about digital privacy and they cared deeply about operational security on the internet, and they really cared a lot about ensuring individuals had agency and sovereignty went on the internet. Them like, I believe that digital sovereignty and privacy is a human right and blockchain and crypto, I learned from this first experience with Bitcoin that could actually be the vessel or the technology to deliver the digital privacy that has been talked about in these cypherpunk communities for so long.

Nick (10:55):

So let’s double click on that a little bit and break that down. So when you think about the relationship then between the currency in this case, the example you shared Bitcoin and you think about blockchain, which is this technology that your university didn’t quite comprehend, but they seem to have interest in the innovative nature of it. And then this third thing, which is web3, which we haven’t quite discussed yet, but when you throw all of those in a bucket, how do you understand or explain the differences between the three?

Alec Shaw (11:24):

Oh, that’s a tricky question. Let me first get this out of the way. I think that those three terms are currently used interchangeably and it will take some time to parse them apart. The market, I think they’ll come around eventually, but today it’s all being used interchangeably, but that shouldn’t be how they’re used. How I see these three working together is this way, so first off, I see web3 as the general revolution or the general social movement, which is taking back the internet from big business and putting it back in the hands of the users. How we do that is still up for debate in a lot of regards, but there’s one thing that is also agreed upon, so say web3 is the overall movement, blockchain is the infrastructure or the tech stack in which this new internet is web3 could live.

(12:33):

Many people are open to alternatives, but today a decentralized blockchain is the only tech stack that could actually deliver that digital privacy that’s promised from web3. And then finally the third category, which is crypto. That is a very literal term, so it’s often forgotten that crypto is short for cryptography. So I just view crypto as a more technical description of blockchain because you can have a blockchain that is centralized and then effectively you just have a shared database. But when you start including cryptography into the mix, you can force this blockchain through various crypto economic incentives. You can force the blockchain to be decentralized, which allows for these amazing cutting edge applications to be built on top of it. And those cutting edge applications are what’s going to deliver the digital sovereignty and the privacy that we’re promised in this web3 revolution.

Nick (15:42):

If we go back then to your story and we pick up where we were on the blockchain lab, what came of it? You’ve clearly graduated and moved on. Does the lab still exist and do you have any sense of if it does, how it’s doing?

Alec Shaw (15:54):

Yeah, the lab does still exist. It’s mainly like a club at this point at the university. So like many small, nimble teams, it takes a lot of very passionate individuals to keep them running. So the market blockchain lab does exist today, and you can go there and find great resources, they have meetups, but if you are looking for a product to be built, they probably can’t service you that intimately today.

Nick (16:24):

So what did you do after college and how did you get started professionally?

Alec Shaw (16:28):

Yeah, so while I was still in school, a lot of people were calling the market blockchain lab, asking for products to be built, proof of concepts. They had this crazy idea and they’d like to get it built out on the tech side of things. So we spun up a consulting firm that would service those clients, and we called that consulting firm Euphrates, and that was my kind of propellant into the actual decentralized finance and crypto space. So while I was working on Euphrates, I actually learned how to build real products that solved pain points. I learned how to iterate on products, and I really just got my first experience of like, instead of being in a classroom working on theoretical work, I was finally working hands-on solving real problems with real clients. And that was an amazing, amazing experience for me to learn how to work in teams and to learn how to actually solve real problems with digital products.

(17:31):

So right after I graduated, I continued to run that, and then I also worked for the university still actually. So I ran something called the Blue and Gold Ventures, and it was a program underneath the entrepreneurship department at Marquette University, and it was a vehicle for any student to pitch a startup idea, and then we would give them the initial funding and help them get from zero to one. So that was a extremely eye-opening experience because it taught me how to work in very small agile teams.

Nick (18:09):

At this point in your life then you’ve basically pivoted on your career plans. You went from wanting to be a financial advisor, now you’re working in some startup consulting type environments and you’re building digital products with what I can gather and intent to build in the blockchain web3 industry. How are you explaining this change to family and friends, or how are you describing this conviction for changing your career trajectory?

Alec Shaw (18:35):

So for most people, I got the same feedback, like that exact question. They go, “Well, what the heck happened, man? You said you were going to be a financial advisor. What are you doing playing around with this internet money?” And to be candid, a lot of people were more rude than that. They said, “What are you doing playing around with that illegal internet money?” And a lot of times, I didn’t really try and convert anyone to see the value of this technology, simply because when I told younger people that I was going to be a financial advisor, but for things like Bitcoin, it made perfect sense. The only time that people didn’t understand the relationship between crypto and financial advisory were people that were older than me and didn’t necessarily see these cryptocurrencies as proper digital assets.

(19:31):

So for me, it never seemed like I was straying far from my ultimate objective, which was to help my friends and family as well as myself better understand finances, advise loved ones on what to do with their capital. And I truly believe that the digital asset is going to be the most in demand asset over the next 50 years as well as the best performing. And that’s simply because the younger generation, these digital assets really resonate with them. So I haven’t even strayed away from ultimately being a financial advisor. That’s still in the direction which I want to go, but there’s a lot of work that needs to be done to get us from where we are today into a state of the market where these digital assets are investible in a safe and reliable way.

(20:24):

So part of the reason that I work in this space today is to get the industry to where I know it needs to be in order to onboard the next generation of users and investors into the digital assets ecosystem. So I don’t want to stray away from financial advisory. This is just the most compelling asset to be involved with.

Nick (20:45):

So you graduate, you start Euphrates, you’re working on the Blue and Gold Ventures with the university. What do you do next?

Alec Shaw (20:52):

Yeah, so as I was working at Euphrates and Blue and Gold, I was extremely involved in the crypto space. And at the time, I was running something called the Blockchain Education Network where we would help students find jobs in the industry. And one of these companies reached out and said, “Look, we’re we’re looking for another core team member to help us design a new DAO. That company was called Sperax, and we searched hard to try to find some students that were capable of working on this project. And after a little bit of searching, we just couldn’t find the right profile.

(21:32):

So myself and some others decided to engage with this company by ourselves, and it ended up being a very nice relationship, so nice that I ended up leaving the university and joining their founding team. And that team was called Sperax DAO, and it is a auto yield stablecoin product, so you can think of it like a decentralized savings account. And my job at Sperax DAO was to design much of the tokenomics, how to distribute our governance token, and specifically how do we incentivize certain on-chain behaviors, how do we use our tokens to accomplish that? So yeah, in early 2020, I joined the Sperax founding team and we launched the Sperax DAO.

Nick (22:24):

Did you enjoy that experience? Tokenomics can get quite complicated. All these incentive programs and governance tokens that you were talking about there. Is that work you enjoyed?

Alec Shaw (22:33):

Oh yeah. It was extremely, extremely interesting work. And what’s cool is there’s no blueprint of guaranteed success. Everyone is still experimenting with the appropriate incentive structures, and frankly, there’s still a lot of experimentation happening. So I was really attracted to that. And when it comes to tokenomics itself, I was just very much intrigued because it took a couple of these aspects of my areas of interest, which I was extremely excited about. So I knew that crypto and blockchain had the power to deliver privacy in the digital realm.

(23:17):

But then I had this finance degree, I’m like, how the heck does that cross over? And how did those work together? But when I learned about token economics, I go, holy crap, this is the exact crossroad of my two areas of interest. I want to work on digital privacy and I want to help the cypherpunks deliver that vision of the future. And I get to leverage my finance and economic skillset to create structures and incentives that can actually get us to where we want to go.

Nick (23:50):

So Alec, you and I are speaking today because your next move is to Tenderize. And for a long time, listeners of the podcast, they know that I’ve had Nico Vergauwen on the podcast and a great interview with a great overview, not only of his background, but the origins of Tenderize and how all of that got started. How did you then end up joining the Tenderize team and going to work as CEO?

Alec Shaw (24:12):

So as I mentioned, I had been very active in the crypto space, being a co-founder of the Spherex DAO. A lot of my job was just knowing all of the major players and the ecosystem and building relationships with those people. And one of the individuals that I built a relationship with happened to be a mutual friend of Nico and I. And I didn’t even know, but Nico had expressed to this individual that they were looking for a business lead. And sure enough, this individual introduced Nico and I, he needed a business lead, I needed an extremely talented technology team. And sure enough, we hit it off and my experience made sense, Nico’s brilliance, and the rest is history.

Nick (25:01):

I agree. Nico is brilliant, and that’s one of the reasons I so enjoyed that interview is it shines forth kind of subtly in the way he answers and thinks about some of the questions I asked to him. For listeners that haven’t heard that podcast and potentially aren’t aware of what Tenderize is and how it works, can you provide just a quick overview?

Alec Shaw (25:20):

From the user perspective, Tenderize will let you stake your GRT or MATIC or LPT, let’s just stick with GRT for now. You can stake your GRT and what happens is that GRT is then delegated to the Indexer of your choice. And once you do this delegation, Tenderize will return to you a new token right into your wallet. And this new token is called a liquid staking token, and this LST, liquid states token, it represents your GRT that is delegated, plus any rewards specific to the Indexer in which you’ve delegated to. And what’s cool is once you have this new token in your wallet, you can do a couple things with it.

(26:12):

So first off, you collect your rewards automatically, that’s the given, but now you can actually do things like instantly swap back to your GRT, without having to wait the unbonding period. And you can also use it in defi. So you get to do really cool things like double stake your GRT for even more yields. You can do things like post GRT as collateral, so your GRT can be earning yield from the Indexer and you can take a loan against it. So these are a couple use cases that we see in the Ethereum ecosystem. And now what we’re doing is delivering that to The Graph ecosystem as well as some others, including MATIC and Livepeer .

Nick (27:29):

One thing that’s interesting to me about Tenderize and these liquid staking solutions is how they actually help grow or expand the web3 industry. Have you thought about that? I mean, are these liquid staking solutions like Tenderize, are they a necessary component for scaling the industry?

Alec Shaw (27:49):

Yeah, good question. And this is going to sound a little bit weird, but liquid staking isn’t required to grow a network, but it is extremely in demand for certain types of users, specifically users that are looking to increase yield on their assets and have more of a trading mentality. So what I mean by that is it’s not like your network won’t grow if you don’t have liquid staking, but there are many users that will demand liquid staking. And it’s very important for us to build liquid staking in such a way that when these users get their liquid staking product, it’s not one that is going to tarnish or affect your underlying network by any means.

(28:41):

So it’s important to note that some solutions today are structured in a way that centralize the underlying validator set and Tenderize is here to ensure that liquid staking can be delivered to multiple different ecosystems in such a way that doesn’t centralize the underlying validator set.

Nick (29:06):

Well, I want to double click on that because I think that’s an important point there, and I appreciate the way that you described how Tenderize is trying to navigate this because it does get a little tricky. There are criticisms potentially of these types of solutions where one might say exactly what you said, it introduces the potential for centralization. There’s also a potential criticism associated with, well now we’re bypassing some of the protocol tokenomics, where it is beneficial, for example, at The Graph that a Delegator must wait that 28 day thaw period. And so how do you answer critics who maybe just fundamentally think, no matter how well Tenderize is trying to navigate this, in general, this type of solution is a negative for protocol?

Alec Shaw (29:55):

Yeah, great question, and it’s kind of a cynical take, but due to the inherent principles of the technology that we’re working with, which is that it’s radically transparent, it’s radically interoperable, the implication of that means people can build custom solutions and there’s nothing you can do about it. So with that in mind, people will build a liquid staking whether or not you want them to do it or not. So a great example today is people are trying to run a campaign encouraging Lido DAO on the Ethereum network to self-regulate and basically provide an upper bound as to how much ETH they’re allowed to manage. This sounds a lot like central control and this sounds a lot like something that’s not long-term sustainable.

(30:49):

So the Tenderized team as well as myself believes, the answer is not to ask Lido to self-regulate. Rather we need to build a better solution, deliver it to the market and gain adoption on that better solution. There’s no way that we can ask Lido to self-regulate. So what Tenderize is doing instead is building a liquid staking infrastructure that is laser focused on delivering both liquid staking and decentralization.

Nick (31:23):

That’s fair. And I also want to make another point super transparent for listeners who this is a new topic or they’re trying to understand how this works. For The Graph in particular, if you are a Delegator, you can go direct, meaning you use the network, you stake your tokens and you have the 28 day thaw period, you have a group of Indexers you can choose from. So it’s the standard direct way. But then there’s this method where you can go to Tenderize and you can get all the advantages, some of the benefits you’ve listed here today, and you basically stake through Tenderize, you avoid the 28 day thaw, but a bunch of things happen, right? And that’s what I want to make more clear. So can you explain what changes in this indirect way, so to speak, in terms of fees? How does Tenderize make money and the introduction of this new token?

Alec Shaw (32:12):

So as mentioned, your assets will be delegated through Tenderize to the Indexer of your choice. So what you do is you go to the Tenderize front end with your GRT in your wallet, you select whichever Indexer you wish. So let’s just say the GRTiQ Indexer, we’ll select that Indexer, I’ll click stake GRT. Under the hood, the GRT T will go from my wallet into the tenderized smart contracts. These smart contracts are 100% on-chain and permissionless, meaning that there’s no ability for the tenderized team to access your GRT when it is in these contracts. And once you delegate through tenderized V2, tenderized V2 will keep your GRT and give you a new token. That new token represents your principle and all of your rewards as you earn them. But what’s really cool is you can take that token and then you can go use it in defi.

(33:17):

You can do the things like avoid the 28 day thaw period. And you might be thinking to yourself, well, okay, this is cool, but what’s the catch here? Right? Like, who’s making money? How is this going to work? So Tenderize does take a couple of very small service fees in exchange for providing you this liquidity benefit on your state position. And those fees are very simple. First, we take a 0.5% fee on all of the rewards. So say you earn around 10% a year during native staking, you would earn 9.5% a year through Tenderize.

(33:57):

And then there’s also a very small fee if you want to do any instant swaps. So say you want to avoid the 28 day unthaw period, fine, you could instantly swap it out for around a half a percentage point fee. And if that’s too much for you, no problem. You simply wait the 28 days like you otherwise would with made of staking and you can bypass that fee. So long story short, we take a small streaming fee and we take a small swapping fee, but it’s completely free to use the system outside of those.

Nick (34:30):

Alec, that’s a great overview and I appreciate you educating me and the listeners. If we were to go presently to this interface and start exploring Tenderize, would we have access to all Indexers at The Graph? Is there like a pool of Indexers that I can delegate, say 100 GRT, and it would get distributed among 5 Indexers? I mean, help us understand that element of it.

Alec Shaw (34:54):

So as we’ve been talking a little bit about some of the criticisms of liquid staking, the most prominent criticism is the reality that a lot of these liquid staking solutions today, these centralized underlying networks, and this is because a lot of those liquid staking tokens are effectively indexes. So what I mean by that is maybe one liquid staking token is supported by a very small subset of Indexers, and this is fundamentally different than the Tenderized V2 approach. So the Tenderized V2 approach is fully permissionless from the Indexer perspective.

(35:37):

And let me explain what I mean by that. Instead of having the one liquid staked token that all of the different validators support, instead each and every validator or each and every Indexer gets their own liquid staking token. And instead of using one liquid staking token and making that token liquid on uniswap, instead Tenderize uses a new liquidity approach. And this new liquidity approach is a shared liquidity pool that acts like a clearing house. So each and every one of these Indexers can get their own liquid stake token and they can get instant liquidity on that token, allowing them to swap and bypass that 28 day unthaw period. And they don’t have to get listed on our application, they don’t have to get onboarded, nothing. It’s completely 100% permissionless, meaning that even if, so say there was a GRTiQ Indexer and you weren’t onboarded into Tenderize, I could still delegate GRT to your Indexer, mint a GRTiQ liquid state to GRT and go about my day.

(36:57):

So this is very, very different than the old approach, which relied on one token, we now can do validator specific liquid state tokens and route them all through one shared liquidity pool, which is just extremely different than the current approach. And the implication of our new approach is it promotes decentralization instead of centralization.

Nick (37:23):

And that’s in large part why we’re speaking today, of course, Tenderize V2 and some of the components you described there. So congratulations to the Tenderize team for V2. Now, one big component of V2 that I was able to identify as I was doing a little bit of research is validator grants. And I think I’d like to know what validator grants is. How have you guys solved for validator incentives? Why would an Indexer want to participate with or partner with something like Tenderize?

Alec Shaw (37:56):

Yeah, great question. As we launch Tenderize version 2, we are working with partners to bootstrap the initial ecosystem. So as mentioned, we’re building a liquid staking environment. It’s very important for these assets to be very liquid on day one. So in order to ensure that there’s adequate liquidity in the system, we’re working on building out a cohort of launch partners. So these are large Delegators, Indexers or any really active participant in the market that is interested in working with us to kickstart this system. And high level, as mentioned, each and every Indexer is already onboarded into Tenderized V2, but for interested parties that want to partner with us, what you can do is, you can work with us, you can provide some self delegation on launch day.

(39:00):

So this would mean that an individual or a staking service provider or any Indexer, what they would do is they would unstake from their Indexer and then restake to the same hardware through Tenderize. And then what you do is you get a nice grant or allocation of our governance token called Wagyu. So what this means for you as an Indexer is that by participating and staking through Tenderize, your Delegators can then use the liquid staking token if they wish.

(39:34):

They also will get a boosted yield if they delegate to your hardware. So what that means is, okay, say GRTiQ Indexer joins as a launch partner and you self delegate through Tenderize on launch date, depending on how much you self delegate, that will allow for your community and anyone delegating to your node to actually enjoy a boosted yield. So if you’re a validator or Indexer and you’d love to join this community and join our launch by self staking, you can retain your delegations, you can offer liquid staking to your clients and you can offer them a boosted yield by being our launch partner.

Nick (40:21):

And for listeners that want to learn more about V2 and explore some of the opportunities here, what’s the best way for them to connect?

Alec Shaw (40:29):

Yeah, well, you should check out our website, which is Tenderize.me. You should also check out our Twitter, which is Tenderize_me and a little bit of alpha here. So this episode is coming out on the 28th. That will be about three days before our version 2, White paper unveiling. So the first couple of days of August, we’re doing a completely new website revamp. We’re posting all of our documentation, we’re unveiling the White paper, we’re effectively doing a product launch. So just a couple days after this podcast, check out our website and it’ll be all Tenderize version 2.

Nick (41:13):

And I encourage listeners to visit the show notes. I’ll put links to everything you mentioned there, and I’m sure many listeners will be watching for the news and the updates that you just mentioned. I only have a few more questions for you before I ask you the GRTiQ 10. The first question I want to ask you is about the ethos driving the Tenderize team. And I think it’s not unreasonable to assume that critics of liquidity solutions will say that maybe there is a misalignment between the intentions or ethos of a team like Tenderize and there’s a bunch of others and the underlying ethos of web3. So how would you describe the team’s commitment to those things that are so important and being committed to things like decentralization?

Alec Shaw (41:58):

Yeah, so high level, we think that a decentralized validator set, which produces censorship resistance is the only value driver and the most important attribute of these systems that we’re building. So everything that we build, every single design decision that we have internally as well as in our community discussions are all evolving around how do we ensure that we’re protecting the integrity of our system? How can we make unstoppable software and how can we build systems that don’t break? And simultaneously as we do that, we have to think of all the key stakeholders.

(42:48):

Let’s just think about The Graph ecosystem for a moment. Assuming liquid staking demand is going to continue to rise, we have to build Tenderize V2 in such a way that it’s very harmonious between all of the important stakeholders in the ecosystem. So first off, let’s think about the Indexers. When using Tenderize V2, they get to launch liquid staking in such a way that they don’t have to sacrifice any of their delegation.

(43:16):

So if you’re a ETH validator today and you want to join Lido, you’re not going to get any liquid staking for your current delegations, it wouldn’t happen. All it will do is get you additional delegations. So Indexers can use liquid staking and they can deliver liquid staking to their Delegators and all of that stake remains on their hardware.

(43:41):

Two, you think about the general network and the decentralization of the infrastructure, the network wins tremendously because those people that want liquid staking to make more money, you have to deliver it in such a way that it doesn’t centralize the underlying network. So actually by using this solution, you can make your network healthy by decentralizing the Indexer set.

(44:04):

And then finally, the third group, which are the users, they’re happy because they get their increased yield opportunity and they get to do things like take loans against their stake, all while encouraging decentralization. So it’s not like you’re at the crossroads where you have this moral dilemma where you’re saying, I want yield, but I’m going to hurt my network. With a Tenderize V2 permissionless approach, you can really satisfy both Indexers, the network as a whole as well as users of the ecosystem.

Nick (44:35):

And I also want to ask you, Alec, and I’m sure you already know this, a lot of my listeners are enthusiastic about the future of The Graph. And so not only does Tenderize provide a liquid staking solution for members of the Delegator community at The Graph, but Tenderize actually uses The Graph as a piece of infrastructure. And I really want to drill on that point for a minute here. How does Tenderize use The Graph and how important it is it to what you’re actually building as a product?

Alec Shaw (45:02):

So our system, as mentioned, it’s 100% permissionless and we’re trying to make this thing an unstoppable piece of infrastructure. So with that being said, everything on our front end is powered by The Graph. So all of our live data dashboards, if you want to track exactly where your stake is at any given time, say you want to validate whether or not the system is solvent, i.e., is there enough stake representing all of the liquid staking tokens that we have in the market? We use The Graph for all of that, simply so you as a user, you don’t have to trust me, you don’t have to trust Nico, you don’t have to trust anyone. You can trust the integrity of the code and how we built the system.

Nick (45:49):

And the final question I want to ask you is about what you wish you would’ve known about the industry that you’ve learned in your time in now. And you mentioned you became interested in 2014, then you went to college, you started this blockchain lab, and now here you are, you are a leader at Tenderize and you’re working full-time within the industry. If you could go back in time, what do you wish you would’ve known when you got started?

Alec Shaw (46:14):

I learned that blockchains are only good at keeping track of swapping and loaning tokens. And a lot of these use cases that require interaction between humans in the real world and applications that maybe require Oracle’s feeding offline data on-chain, things like that still have a long way to go because a lot of newer entrants in the space are very infatuated with very complex use cases, including supply chain tracking, cross organizational collaboration. And the funny thing is those are not tech problems. Those are social problems. Those are humans collaborating problems. So at the end of the day, the blockchain will not solve your human coordination problem. It will only solve keeping track of tokens.

Nick (47:11):

Well, Alec, now we’ve reached a point where I’m going to ask you the GRTiQ 10, and this is how I end every podcast. It’s the same 10 questions every week to each one of my guests. And I ask them in hopes of introducing listeners to new information or encouraging them to try something different or to potentially achieve more in their own life. So are you ready for the GRTiQ 10?

Alec Shaw (47:31):

I’m ready.

Nick (47:42):

What book or articles had the greatest impact on your life?

Alec Shaw (47:45):

Probably Principles for Dealing with the Changing World Orde by Ray Dalio.

Nick (47:51):

And how about this one? Is there a movie or a TV show that you would recommend everybody should watch?

Alec Shaw (47:57):

I like Memento.

Nick (47:59):

If you could only listen to one music album for the rest of your life, which one would you choose?

Alec Shaw (48:05):

1. Cole, The Warm Up.

Nick (48:07):

What’s the best advice someone’s ever given to you?

Alec Shaw (48:09):

A healthy body is a healthy mind.

Nick (48:12):

What’s one thing you’ve learned in your life, Alec, that you don’t think most other people have learned or know quite yet?

Alec Shaw (48:18):

Slow is smooth and smooth is fast.

Nick (48:20):

What’s the best life hack you’ve discovered for yourself?

Alec Shaw (48:24):

Lift heavy weights.

Nick (48:25):

And then based on your own life experiences and observations, what’s the one habit or characteristic that you think best explains how people find success in life?

Alec Shaw (48:35):

For me at least, it was finding balance. And I went through a long period of my life where I didn’t realize that being balanced and working toward multiple goals isn’t a bad thing. And oftentimes working toward multiple goals at the same time allows you to achieve what your primary goal might have been. So for me, it is balance.

Nick (49:07):

And then Alec, the final three questions are complete, the sentence type questions. So the first one is complete the sentence. The thing that most excites me about web3 is?

Alec Shaw (49:15):

Digital sovereignty.

Nick (49:17):

Then how about this? If you’re on Twitter, then you should be following?

Alec Shaw (49:20):

Degen Spartan if you’re a trader.

Nick (49:22):

And then lastly, I’m happiest when?

Alec Shaw (49:25):

I’m happiest when I’ve put in a hard day’s work. And that means some work on Tenderize, something physical, maybe lifted some weights. I’ve talked to my friends and I’ve talked to my family, and I’m just hanging out, resting with my girlfriend, just doing nothing.

Nick (49:51):

Alec Shaw, thank you so much for joining me here on the podcast, and I appreciate the time and all the information. For information listeners who want to stay in touch with you, follow the things that you are working on, what’s the best way to stay in touch?

Alec Shaw (50:03):

Yeah, you should shoot me a follow on Twitter. My handle is @chefalec, and that’s where I am posting, sometimes shit posting, sometimes research oriented stuff, but that’s where you’ll catch all the updates for Tenderize and myself.