GRTiQ Podcast: 133 Anton Gaev

The following podcast is for informational purposes only. The contents of this podcast do not constitute tax, legal, or investment advice. Take responsibility for your own decisions. Consult with the proper professionals and do your own research.

Anton Gaev (00:00:51):

By seeing the desire in the chats that’s happening in Discord or Telegram, yes, it’s one of the healthiest community, let’s say, in the web3 space, so yes, I’m honored to be here.

Nick (00:01:32):

Welcome to the GRTiQ Podcast. Today, I’m speaking with Anton Gaev, product manager for L2′s and The Graph at P2P.org. In addition to being one of the biggest Indexers at The Graph, P2P.org is a well-known staking service provider and validator throughout all of web3. I interviewed members of the P2P team during episode 10, and since that time, P2P.org has continued to grow and add new service offerings to its platform. As you’re about to hear, Anton is smart and thoughtful about web3 and The Graph. He’s very active in the Indexer community and does an excellent job representing P2P.org and The Graph ecosystem. During this conversation, Anton talks about his background.

(00:02:12):

In fact, he’s one of the very few GRTiQ guests who had a lot of exposure to crypto during his time at university. He also talks about why he became interested in crypto, his move into web3 and going to work at P2P.org. He has some great insights into the future of L2s and he talks a lot about his experience working in The Graph ecosystem. As always, we started the discussion talking about his educational background.

Anton Gaev (00:02:36):

I wanted to start from saying many thanks to you, Nick, and the work you’re doing here is just wonderful that you bring so many people into this web3 world. We actually have included your podcast into our so-called intro stack for new employees within P2P.org. We especially cherish your podcast for the first part where your guests give their background and it turns out to be very diverse, but still all the people manage to find their place in crypto and even though they haven’t done it before, still they have the courage to do it and the passion and that’s why they succeed.

(00:03:14):

Yeah, thank you very much for the work you’re doing here. About my educational background, I have a master’s degree in economics, but in my university I also had majors and minors, and my minor was data science.

Nick (00:03:28):

Anton, first and foremost, thank you so much for the kind words about joining the podcast. I’ve obviously had other members of the P2P team on before and I’m thrilled to welcome you, and so I really appreciate that. Double clicking on your educational background, what was it about economics that drew your attention? Why did you decide as a young person to study economics?

Anton Gaev (00:03:45):

Well, I ended up in economics because I have some passion for math, physics, and other exact sciences, but unfortunately my parents sent me to the language school, thus I learned many foreign languages like English, French, and even Latin. I also had a semester of Norwegian language, which is quite unusual I think. But that’s always done with the sacrifice of exact sciences and I just could not enter the university with a computer science degree. I felt that economics was some kind of right balance between risk and passion, thus I went for it and as my minor I chose data science.

Nick (00:04:29):

What did you hope to do with a degree in economics? I know you got forced into somewhat studying this and probably had different vision, but what did you hope to do?

Anton Gaev (00:04:37):

Well, I thought to turn it somehow into the computer science related stuff, but I ended up to work at first as a logistician. That’s basically a person who finds the perfect transport to transport goods. But even on that work I’ve managed to turn it around and to create some machine learning models there to optimize daily operations. Eventually, after that I dedicated my life to some computer science stuff and later turned out to be a work in a startup company, digital makeup startup company. Yeah, even though the start was far from that, I still ended up where I wanted to.

Nick (00:05:24):

I want to ask you about learning multiple languages. That’s not an easy thing to do, and I’ve had a few guests on the podcast that, like you, have been able to pick up a couple different languages. What’s the trick there? What’s the best way for somebody who’s listening to this podcast who wants to learn as many languages you have, what’s the best way to get started and do that?

Anton Gaev (00:05:44):

I don’t actually think that I will be able to give you a good answer because especially when I was learning Norwegian, I recognized that this language doesn’t fit into my head because it’s just too much stuff inside. Unfortunately, the fact about language is that they require practice and a lot of that, and obviously, it’s easy to get some practice in English, but for example, for French, even though I studied for six or seven years, I keep forgetting it just because I do not use it. I tried to watch French movies or play video games on French language, but there is no incentive to do it just because all the information is there in English language.

(00:06:26):

Then, you really do not have that much, I guess, passion for it. Yeah, the third language that I learned was Latin. No one speaks it too. Basically, that was the moment that killed my love for language. I said, “Oh, I speak the language that no one understands, so what’s the reason?”

Nick (00:06:46):

That’s very funny. Well, I appreciate you sharing that, and that’s true. Some of these languages, you don’t know anybody that can speak it. They lack a little bit of utility, I guess, in the real world. In terms of economics, a lot of guests of this podcast have studied economics. Even though they’ve gone on, like you, to study computer science and other things, it started off this foundation of economics. What do you think it is about economics that’s such a great foundational knowledge or understanding of the world and how things work?

Anton Gaev (00:07:16):

Well, yeah, as just like you’ve said, physics tells you how the objects and stuff work in the universe. Economics tells you how, let’s say, human society works. Most of our relations are economic relations anyhow and everyone tries to get some benefits from any kind of relations like work employments or even friendships sometimes. Economics also recognizes the fact that not everything is in money, but there are other kinds of benefits that some people will see very useful, especially like the most recent works in economics where they apply some behavior analysis. In the classical basics economics, every person is rational, but now, the current economic says that everyone is irrational.

(00:08:10):

If something is pumping either cryptocurrency or NVidia stocks, everyone rushes and buy it. Yes, that’s how the things work. Yeah, by learning economics you just learn why some things are happening and why is it like that, even though it seems crazy. For example, like US debt in trillions, I don’t know how many dollars, but still somehow the whole system works. Yes, it’s fascinating because I think even physics are easier to explain.

Nick (00:08:47):

I want to ask you about computer science. Eventually, you start studying computer science or did you just pursue that on your own?

Anton Gaev (00:08:55):

That was not computer science exactly, it was data science, basically it’s data analysis, machine learning, neural networks, and this stuff. They do not teach you to program specifically, but still, in order to learn some model you have to get some data. If you want to make some cool model, you have to get some data yourself. Thus, you need to learn some web scrappers or something like that, data parsers. Because you have this desire to get this data, you have to study Python and how to do JavaScript even sometimes. Thus you are getting computer science degree just by the fact that you have to do it in order to do some really cool research.

Nick (00:09:42):

Anton, let’s talk a little bit more about that startup you went to work for. It sounds super interesting. You were doing some cutting edge stuff, it sounds like. What can you tell us about what you were working on?

Anton Gaev (00:09:51):

Just before the COVID, I joined a digital makeup startup. Yeah, COVID actually brought some good opportunities there because people couldn’t go to the cosmetics store, drug stores where they sell all those makeup, and still they have to test new things and apply it to their skin. It was an interesting subject and an interesting issue because of different shades, different lights and how are they applied to a specific person holding a camera and in different environments. Like when you have daylight or the light from your light bulb in your apartment or in your house. It was very hard to do it and unfortunately we haven’t succeeded because customers kept complaining about it.

(00:10:41):

They said that, “No, that doesn’t look real. When I bought this thing, it turned out to be very different and stuff.” But still, it was a very interesting experience. We ended up selling this startup to a well-known industry giant. Yeah, in general it was something fascinating.

Nick (00:11:01):

At what point in your background you become aware of crypto for the first time? Take us back to that time, what did you think of it? What were your first impressions?

Anton Gaev (00:11:10):

Well, actually, the first time I’ve heard about crypto was even back when I was in school. It was around 2012, 2013. Actually, it was on state television. They told about, “Hey, there’s just some strange thing called Bitcoin. You can pay with it to someone.” I looked at it and I thought, “Wow, that’s something interesting. I need to check it out one day.” But it was around my graduation year, so I postponed it and I came back to this crypto stuff when I was on the second year at my university. The key idea was that I wanted to get into the stocks market, but back in the day it was really hard to do it in my country.

(00:11:52):

You had to find a broker and to have a big sum invested there. Obviously, as a student I didn’t have any money and crypto was a way for me to get this stock-like trading experience. Eventually, I ended up there. I didn’t even get to the real stocks just because crypto got me over completely.

Nick (00:12:15):

Anton, you started your interest in crypto as a speculative asset. Eventually, I presume, you saw that it was an actual technology and something that was disrupting web2 and that type of thing. When did that happen and what was the aha moment for you when you understood that part of it?

Anton Gaev (00:12:33):

Actually, I understood it quite early, even back when I was in university, but the interesting thing is that I was not alone. My professors in university also recognized the fact and all the students. Actually, we’ve started to research crypto very thoroughly, especially its use cases in logistics, in economics in general. The Ethereum came out about this time, so we were all fascinated by this smart contract idea that you can really encrypt the money, encrypt the actions that might take place. For example, when you transport goods and the ownership of this real goods is changing throughout time. This smart contract that is controlled by a distributed system, and well, generally everyone, but basically it’s a trustless thing.

(00:13:25):

It does not depend on some entity and still it is able to verify different states of the transportation. The whole economics department was fascinated about this thing. Well, basically the whole university liked the crypto and just thought about its applications. I think it’s still being researched there and how to use it. Maybe we’ll see some better applications and some new research papers. Well, actually, there are a lot of research papers right now, but the more will be coming because more students go out of the universities and they want this thing because they were studying this thing. It’s definitely something new. It’s something that wasn’t present like five or seven years ago.

Nick (00:14:09):

Well, a huge shoutout to your professors and your university for doing that. That’s really cool to hear and I bet that was a fun experience for you looking back, knowing what you do now, that you had such an early introduction to the utility of crypto. In your first job in university, did you use any crypto at that point or any blockchain technology?

Anton Gaev (00:14:28):

No, unfortunately. Well, basically, all the logistics applications of crypto are still not realized at the moment, mainly because of the privacy aspect of the crypto related stuff. I know that there are some rollups that tried to solve it. Well, even Ernst and Young and PWC invested into this stuff, but as far as I know, those projects do not flourish at the moment. Still they aren’t being introduced to major logistics providers, but we’ll see how things will develop. I hope that they will. Well, at least I’m bullish on it.

Nick (00:15:09):

Anton, if you think about the industries that will be disrupted by blockchain and by crypto, obviously, finance is one. We already see a ton of use cases for DeFi. We’re talking right now a little bit about logistics. Are there other industries that you think about that’ll probably be disrupted as more adoption of crypto or blockchain throughout the world?

Anton Gaev (00:15:31):

Well, obviously, everywhere where we have those internet connections can be changed, but still we need to solve firstly the privacy issue. I’m really a believer that something might came up, something that we do not recognize at the moment. For example, no one thought about NFTs first that they might become some phenomenon in the market. But also, NFTs can be applied into internet of things and eventually every item can be represented as NFT and work in those smart contracts, every item from the real world. But we’ll see how the technologies will develop, at least I think right now we have to solve some fundamental issues and then we’ll see all those stuff came up.

Nick (00:16:27):

It’s clear that you’re a very smart guy and you understand the industry quite well. We’re going to talk more and more about what you’re doing for P2P.org and what you’re doing at The Graph, but there’s a lot of non-technical listeners of this podcast. You’ve said a couple times that we still need to solve some fundamental issues, things like privacy. For the non-technical person, it seems like cryptography and a lot of the things associated with blockchain and crypto provides privacy. What’s the stuff that we need to solve for? What is still outstanding on this topic of privacy?

Anton Gaev (00:17:00):

Well, unfortunately, crypto does not provide that much privacy, but basically, all of your transactions are visible to everyone if they know that this is your address. For example, when we talk about big companies and industry giants or logistics separators. Basically, companies do not want other people to know how many assets they have, how many goods are transported, all that stuff they want to share only with the trusted providers. But now, on Ethereum for example, everything is open. If you have some address, for example, all the hacks that are being made right now, everyone is fascinated, “Wow, everything is on chain. We can see everything that is happening there online and it’s totally transparent.”

(00:17:48):

This total transparency is exactly what companies want to avoid. Thus, crypto and web3 doesn’t have that much real world application right now, but as soon as it’ll be solved, then we might see something like that pop up. I hope that it’ll be solved by rollups because we will still have the assets like stablecoins especially that will be initially locked on Ethereum. Then, locked again when smart contract solves those rollups and all the transactions there will be private. Then, they can withdraw it back to Layer 1 and trade them there openly. Hopefully we’ll see this future someday and hopefully the laws will be okay with that.

Nick (00:18:34):

Well, I appreciate you explaining that, and I know exactly what you’re talking about. When you were talking, I remember now on Twitter, different famous people have been associated with a certain walled address and anytime they transact or do something, everybody on Twitter says, “Hey, so-and-so has just done some transaction.” I appreciate you double clicking on that. If we go back to your personal story then, what’s the story behind you going to work full-time in web3?

Anton Gaev (00:19:01):

It was back when I worked in this digital makeup startup. I ended up in this situation where I got back home and living alone. All weekends long I spent studying crypto projects, making trading bots, creating some machine learning models in order to arbitrage better. Still I couldn’t keep up with the pace that this industry was developing. It was DeFi summer back then and projects were growing like mushrooms. At this moment I realized I had to get a job in crypto. It turned out approximately at this very moment that we’ve decided to sell our startup. I started to look for a new job and yes, ended up working in P2P.org.org.

Nick (00:19:50):

When you made that move, did it feel risky? Did it feel like you were making a high risk career bet or did it just feel like the smartest thing you could do, to go join this cutting edge emerging industry? How were you thinking about that?

Anton Gaev (00:20:03):

Yeah, it felt like the smartest thing to do because yeah, obviously, I’ve had a lot of passion for it. It was really my hobby and turning my hobby into my daily job is I guess something everyone desires and thus I was especially happy to do it. I saw the rise that crypto have and the rise of adoption and I saw that it can be applicable in many ways. As I said in university, we discussed it almost on a daily basis. I see that we are in the very beginning of this web3 adoption, so obviously, it is better to be earlier, so I’m here.

Nick (00:21:15):

Anton, I have to say after 130 interviews on the GRTiQ Podcast, you’re the first guest who had as much exposure to this topic of web3 crypto blockchain in university than any other guest.

(00:22:03):

Again, shoutout to you and to your professors in the university you attended. I want to ask you this question, and I think you’ve listened to podcast before. This is a fairly common question. It’s about web3. You just mentioned there, you left traditional industry, went to work with the P2P.org.org team on web3. How do you see web3? Do you see it as a revolution against web2? Do you see it as like a natural evolutionary step in the way we develop and use technology? What’s your frame of reference on that particular point?

Anton Gaev (00:22:39):

I see it as a complimentary thing. Well, obviously, self-custody is something new, self-custody of assets and a trustless nature of those assets. When Bitcoin was introduced, it was a revolution, but at the same time I’m not a believer that web3 should completely delete web2. I’m more a believer of intersection of those two fields. I also do not believe that web3 can be applied in every field. I think that some of the stuff is better to be still web2, but we’ll see how everything will be developed in the nearest future, I hope.

Nick (00:23:23):

Do you see web3 as inevitable or is it still an experiment? Meaning that the use cases where it does add value or it does help people, that’s still experimental, or is this inevitable? Eventually, in some way web3 will be adopted in different parts of the world or in different industry.

Anton Gaev (00:23:41):

Well, when you say eventually, eventually it will, but at this moment and the nearest future and even I think during your and my lifetime, it will not be applied everywhere. I think we saw a huge growth and now the growth will be a bit slower because it’s no longer a new thing. It’s already a quite developed one. Thus, we will just shape it and create a better condition for the introduction of web3 to different industries. But I do not see that exact pace of revolution as it was for the past 10 years. The changes won’t be as extreme as they used to be for the previous 10 years.

Nick (00:24:28):

Anton, as I said, you’re joining me today as a member of the P2P.org.org team. Any of my listeners that are active within The Graph ecosystem will recognize that P2P.org name. It’s a well-known and very large Indexer working within The Graph. Longtime listeners of the podcast will know that P2P.org actually operates a bunch of validators on different networks. Throughout all of web3, P2P.org.org is a very well-recognized name. What can you tell listeners who are familiar with all that history about P2P.org.org and the team?

Anton Gaev (00:24:59):

P2P.org.org is among the top three biggest validators by TVL, and we’ve been operating since 2018. We have more than 200 employees from more than 30 countries. We have an office in Cyprus, but people can work remotely and they are scattered around the globe. We recognize the benefits of not simply validating chains, but we still provide many other services, like we provide Indexers for other networks, especially for the ones that Graph does not support right now or can’t support due to some technical issues. We support RPC nodes. We are creating our own platform for non-custodial staking.

(00:25:45):

Also, we tend to support the projects from the very beginning. We were among the first validators of Lido. We supported Threshold back when it was NuCypher and Threshold is a bridge from Bitcoin, trustless and decentralized breach from Bitcoin to Ethereum, and actually to other networks as well. We were among the first realtors in connects, bridge. Those are just the things that were done within my department. Overall, within P2P.org.org, each department is highly autonomous and we treat it like separate entities. For example, people from The Graph are familiar with Constantine Zaitcev, former product manager of The Graph within P2P.org.org. Now, he’s the general manager of DRPC, Decentralized RPC protocol.

(00:26:37):

Basically, we at P2P.org.org, if we see some issue within the web3, we either tend to support some projects that are already there to help them to develop and to solve those issues. Either we solve those issues ourselves. We saw that RPCs are highly centralized and we recognize that, especially Constantine has recognized that we need to decentralize this stuff. Now, P2P.org.org supports his projects and his team to develop this decentralized RPC infrastructure.

Nick (00:27:08):

Well, as I referenced earlier, I had the opportunity to interview Constantine very early on. Anybody that wants to go back and listen to that podcast, I encourage you to do so. He was joined by a colleague, Casper Rasmussen as well, who I think at the time was doing marketing for P2P.org.org. I encourage listeners that want to learn more to go back and listen to that incredible growth. For you, making a move out of a startup web2 type environment and joining web3, you joined an industry leader that’s doing a lot of interesting things. Tell us about your role presently at P2P.org.org, the things you’re working on and specifically at The Graph.

Anton Gaev (00:27:41):

Currently, I’m a product manager of Layer 2s and The Graph. When I was hired, I was a data analyst. When Constantine went to work for DRPC project, I became the product manager of The Graph. Here, especially as a data analyst, I worked on the strategies optimization and the overall economics and tokenomics of our activities and projects. Then, other EVM stuff was added, as I said, bridges like Connext, Threshold. Then, the Ethereum itself and everywhere. I’ve tried to look for the ways to optimize and increase our revenue and sometimes to reduce our costs. Or, if it was a good bet, then to increase our costs in order to increase the value of the network itself.

(00:28:32):

It’s necessary also to recognize here that we at P2P.org.org see that we benefit much more, not from increasing our share of revenue within the protocol, but from the developing the protocol itself, because it helps to develop to grow the value of the token and mostly our revenue is in tokens. Thus part of my work is also to look for ways to contribute to different projects to help them grow, develop, find product market feeds, and thus it increase the value for each participant within the network and for us.

Nick (00:29:10):

I appreciate that introduction and I want to double click on all the things that you just said there. I want to start with this idea of being a product manager working on L2s and The Graph. A lot has happened at The Graph since you went to work at P2P.org and took over that role. Before we talk about those big things that have happened, just generally speaking, what’s the experience been like for you running the product management for a very large Indexer within The Graph ecosystem, meeting all the other Indexers and getting involved in the community? At a high level, what’s that experience been like?

Anton Gaev (00:29:42):

Well, it was fascinating to say the least. Obviously, it was very exciting to get this, let’s call, industry giant and to work in The Graph with their very high valued portfolio. It’s a bit hard to see that P2P.org is being criticized for threatening the decentralization within The Graph. But at the same time, we really try to reduce our share, at least we try not to be active in terms of sales, and still we try to contribute into other things. It is a very good feeling when the people, the community recognizes all the good things that we’re trying to do. In general, I think that the Indexer’s community especially is quite friendly.

(00:30:40):

Especially from my experience with other projects, and very professional. I really see people that feel passion for the work they are doing and that really want to make The Graph better. It’s an honor to be among those people, and you just get the same feeling from them and you want to contribute just by participating in all those calls and by seeing the desire in the chats that’s happening in Discords or Telegram. Yes, it’s one of the healthiest community, let’s say, in the web3 space. So yes, I’m honored to be here.

Nick (00:31:20):

Well, as you mentioned there, keeping stake decentralized is an important topic all through web3. I understand that there is a challenge there for P2P.org because it is very large and it’s working within different protocols. I bet it does get a little bit of criticism. I certainly explored this issue with Constantine during that interview, but just to give you a chance now to address that, how do you strike that balance and how do you grow and flourish as a professional working for a very large entity? How do you balance that with this additional vision or commitment to keeping stake decentralized? That seems very difficult.

Anton Gaev (00:32:00):

Yeah, and that’s the thing I love about the web3, is that fusion of competition and cooperation. You can’t take all the stake and all the revenue because if you do so, the whole decentralization idea and the whole web3 will disappear. You have to keep everything decentralized and support the projects even though not gaining all the opportunities. We at P2P.org, we’re fascinated by The Graph from the very beginning. I guess it was easy to sell our excitement about The Graph to the funds to investors, and we had a very good start. But soon, yeah, we realized that the start was too good and we had to stop all sales.

(00:32:52):

Basically, we’re still in this mode up to this point, and we saw our market share dropping to the current levels. I think that current level is quite good just because we are as big as Figment. It’s not that obvious because Figment splits their stake between two Indexers approximately in equals ways, but we are of the same size, so decentralization is no longer under threats. We shrink to the appropriate size. As you’ve said, how is it to develop in this environment as a professional? It’s good that the CEO of our company and the founder, they also recognize that decentralization is the key point and that we need to shrink our share within The Graph.

(00:33:42):

Yes, we had it planned so they were not simply okay with it, they wanted it to happen. We saw gradual growth of other Indexers and we were happy with that fact. Now, we feel like we are in a comfortable situation, but still we try not to be, let’s call it, an elephant in the room. For example, we understand that when we move our allocations we do not want to disrupt anyone else’s allocations and leave some space for other Indexers. We see that other Indexers are very active in the protocol development and The Graph foundation is also very active in the protocol development. We still try to contribute, but not in the direct ways. But we try to spread the use of The Graph within other projects.

(00:34:32):

Especially within the projects that we work on. We want to contribute in the ways other than direct code developing. For example, we have started this movement of the philanthropist Indexers with our pillar Indexer, but with this pillar Indexer also we have an issue because that protocol is developing so fast that we cannot keep up with this speed and we have to upgrade our lists constantly. Also, we have expressed multiple times that we support any endeavor within The Graph, for example, to provide free query fees for newcomers to make this protocol applicable for new users.

Nick (00:35:15):

Well, I appreciate you going through all of that, and as I said, I want to ask you a couple questions about the changes you’ve seen and some of the projects you’ve seen within The Graph over the last year or so. Starting with the MIPs program, and this is where really I became aware of you. I would attend Indexer Office Hours, and I always noticed you had really great questions, very thoughtful questions. I thought, “Boy, we need to get Anton on the podcast.” But for listeners that don’t know, the MIPs program was the Migration Infrastructure Providers program.

(00:35:44):

It was an incentivized program whereby Indexers bootstrapped the addition of new chains to The Graph Network like Celo, Gnosis, Polygon, and so on were added by virtue of the work of MIPs participants. What was it like working in the MIPs program and how important do you think that program was to the future of The Graph?

Anton Gaev (00:36:05):

Well, I wanted to start with the issues with MIPs program and to address them from the very beginning. We saw the controversy that arose I guess in the middle of this program. I guess it happened due to the fact that some participants thought more about it, but we recognize that this program will barely cover the costs of participating. Thus, we didn’t rush to participate in every network and we have applied only those where there enough sub-growths to surf on in order to make a good tokenomics at the end. Anyhow, we were ready to support all our networks if the participation wasn’t good enough, but it was good enough.

(00:36:57):

I really want to applaud and to appreciate other Indexers that really were serious about this MIPs initiative and contributes to it very well. All the networks were covered. In general, I think it was a good endeavor from the foundation to support the launch of the new networks in this way. Basically, as I’ve said, to cover the costs of launching those networks and that’s what they did. But yes, it was necessary also to I guess lower expectations because I guess too much drama was surrounding the MIPs program, and yeah, from the very beginning, all the participants had to know that the foundation gives you an opportunity to start.

(00:37:47):

But then, you have to be on your own and you should be ready to be on your own. That’s what we saw. Yes, I would love it to continue because we have many more networks to support, but I guess right now we as a community have to add those networks by ourselves. Let’s see what will come out out of this stuff.

Nick (00:38:11):

The other thing, Anton, I want to ask you about was this move to L2. I’m really interested to get your perspective on this because as you said, you’re a product manager at P2P.org working on L2s and The Graph. Recently, it was announced that The Graph is going to move Arbitrum and L2. In fact, recently the L2 transfer tools were deployed, so it should be easier now than ever for Indexers and Delegators to make the move to L2. What are your thoughts about that? Is that exciting news? Is that something that motivates you about the future of The Graph?

Anton Gaev (00:38:41):

Yeah, it’s definitely exciting. On the Ethereum, The Graph was too static. Just creators rarely moved their signals. Indexers tried not to reallocate up until the dead end of 28 epochs and the query fees remained unclaimed. That’s the key thing, because I guess most of the people measure the usage of the protocol by looking at the amount of the query fees that are claimed. On Ethereum it was more expensive to claim than their initial value, but now, on the Arbitrum, it’s going to be much cheaper. I guess people around The Graph who are not participating but just commenting about it, they will see that the tokenomics will become more sustainable.

(00:39:28):

The usage of the protocol will rise and this will definitely be a good thing that will get some more appreciation and more users. Also, probably Indexer rewards will be reduced as it was initially planned to switch from Indexer rewards to query free rewards. I guess finally we’ll be able to do it in Arbitrum.

Nick (00:39:49):

Take us aside your mind and the mind of the team there, how are you guys approaching the move to L2? Because clearly there is some incentives here that will determine when and who moves and at what time, but how are you guys thinking about that moving to L2?

Anton Gaev (00:40:07):

Initially, we think to transfer enough self stake to feed the biggest Delegator that haven’t moved yet, so that no one from our Delegators lose any potential rewards that they might. Because it should be one to 16 from self-stake to the delegation. Then, we’ll see how the process is happening. If Delegators will be reluctant to do it, we obviously will use every source available to scream wherever we can that the rewards on Arbitrum are better, there’s better APR, it almost cost you nothing to move. Please move. We’ll definitely shout about it on Twitter and Telegram and wherever we can write articles about it. But I think that Delegators will see the incentives and they will also move.

Nick (00:41:03):

When you think about how long this transition will take, where eventually everything is on L2, how do you think about it? Are we talking months and months? Are we talking years and years? How have you thought through that?

Anton Gaev (00:41:16):

Yes, we at P2P.org, being the biggest Indexer at the moment, we are especially frightened about those, let’s call them, sleepy Delegators that basically delegated and forgot about their stakes. I highly doubt that we’ll be able to move completely. I think that we’ll be able to move the sufficient share of all the stake so that the foundation can say everything is good, so we’ll switch off to the Ethereum, but also we have to take a look whether the final users of The Graph, those people that make depths around it, maybe they will still use subgraphs on Ethereum. If query fee’s volume there will be high enough, I guess we will have to support it as a good protocol because the users keep using it.

(00:42:10):

We’ll take a look. We had some jokes about it on Indexer Office Hours about The Graph Classic and this stuff, so we’ll see.

Nick (00:42:49):

Anton, I recently had Marek Olszewski on, he’s the co-founder over at Celo and working on a lot of cool projects in that ecosystem. As you know, Celo recently announced the move from an EVM L1 to L2, and it really got me thinking about the future of L1s and L2s. You’re somebody who’s working in P2P.org, an industry leader in what it’s doing and you’re working on L2s. What’s the story here about the future of L2s? Is it eventually the case that there’s just a few L1s and then a bunch and a bunch of L2s or what will we see? How do you think through what the future looks like on that topic?

Anton Gaev (00:43:28):

Well, definitely a current trend is Layer 2s and not Layer 1s. Everyone hates alternative Layer 1s. I think this is just the thing of the moment. Maybe this trend will pass, we’ll see. Right now, definitely some more projects will become Layer 2s, but later we’ll see maybe yet another cycle. Again, alternative Layer 1s will appear or maybe different Layer 2 projects will compete for their share, and then, Layer 3s and all those layers will come.

Nick (00:44:06):

That’s an interesting overview and I’m curious to see what happens in the future if we balance some of the optimism or excitement about the future of L2s with some potential cons, some ways in which maybe a future where there’s a bunch of L2s is not good. What would be some of the arguments someone could make that says, “Hey, we need to be cautious about this future where there’s a proliferation of L2s.”

Anton Gaev (00:44:31):

Well, we obviously should remember that each Layer 2 project can go pump and dump like Terra LUNA stuff and all other things, so it’s typical crypto project. Don’t think that everything is that safe just due to the fact that it’s on some layer on top of Ethereum. All these things that Layer 2s inherit decentralization of the Ethereum are much more nuance than people think. For example, every Layer 2s right now are centralized, and it’s funny to see in our web3 community where we cherish decentralization that much, but we see the current trends is total centralization and all Layer 2s are in this state right now.

(00:45:23):

Obviously, they talk about training wheels and this stuff, but they already have $10 billion locked inside them. It’s like giving a five-year-old boy or a girl Ferrari, put the training wheels on this Ferrari and say, “Yeah, everything is good to go.” No, it’s already too big to fail. We should remember about it. Just think about all these fraud proof games. It has never happened before. For example, Optimism doesn’t even have fraud proof games at the moment. What will happen when there will be real fraud proof games on chain, how the market will react, will there be any panic? Everyone is rushing out of Layer 2s back to Layer 1s.

(00:46:07):

It’s going to happen for seven days, and then there’s going to be another fraud proof game, another. It might be a very scary situation. I think the market should be prepared for this. Maybe some, let’s call it fire drills should be applied. Some fraud proof games just for the sake of making them just to prepare the market that it’s an okay thing. The truth will eventually be proved and there’s nothing to worry about. Another thing which is very important here is the lack of decentralization within the sequencers. Basically, all the sequencers are centralized. You can even take a look at the documentation of the major Layer 2 projects.

(00:46:51):

They say, “Please, trust us that we do not do anything with your transactions. We do not sandwich them and stuff.” But for the trustless nature of the blockchains, it’s a big thing to ask for to trust them. It’s a key thing to remember that neither of these projects have any incentive for decentralization. Basically, they will lose money. It’s really hard to decentralize. That’s why they do not do it at the moment. The only thing is that we as a society have to push them for decentralization. That’s the only way they will decentralize eventually.

(00:47:30):

The same thing about zero knowledge rollups. Rollers are centralized at the moment, so if the roller stops working for some rollup, basically nothing will be approved within it. We really need to push those projects for decentralization.

Nick (00:47:47):

Anton, I think a lot of listeners will be surprised to hear that all of L2s are centralized, but in addition to that, that it’s complicated or difficult for an L2 to decentralize. Can you walk us through why that’s the case? Why is it difficult to decentralize an L2?

Anton Gaev (00:48:03):

Well, Layer 2s depends on the Layer 1 that they built on top of. Basically, Layer 2s are smart contracts on top of Ethereum. Well, if we talk about Layer 2s on top of Ethereum, if you have a Layer 1 chain, for example, Bitcoin or Ethereum, you can easily fork it, and we’ve seen it in history. We saw Bitcoin cash, Bitcoin gold and other flavors. The same thing with Ethereum, and we had Ethereum Classic and POE, but Layer 2 is a smart contract. For example, we know that OP stack can be forked. For example, Base is a fork of Optimism. Maybe there are some modifications, but still it’s a new fork and it’s a new smart contract on top of Ethereum.

(00:48:52):

When all those forks of Bitcoin have happened, basically you’ve had Bitcoin on both chains, on Bitcoin cash and Bitcoin original and Bitcoin gold. But if you fork smart contracts, your tokens do not migrate to another rollup. When Base was formed, none of your tokens from Optimism migrated there. You did not have 100 USDC on Optimism and suddenly 100 USDC appeared on Base. It hasn’t happened before. The whole consensus process of Layer 1s is about reaching an agreement about the state of the next block. If someone disagrees with your vision of the next block, you can basically fork a chain, this is how Bitcoin cashflow is created or Ethereum Classic, because of disagreement.

(00:49:45):

But you cannot disagree this way on the rollup. You cannot fork it in traditional sense, the funds wouldn’t migrate there. Thus, the consensus should be 100% clear and it cannot be changed anyhow. That is why protocols do not want to rush their decentralization. They work hard on how to do it properly so that the consensus will always be reached no matter what has happened. But still, all the products are now decentralized, but to different extent. For example, Arbitrum has a permission set of validators, and for example, P2P.org’s among those permission set of validators, but still sequencer is centralized and only Arbitrum Foundation decides how to put transactions into it.

(00:50:35):

Basically, they say they do it in the order that they appear within their mantle, but again, it should be trusted that they really do it. Yes, it is very hard to decentralize, but if those projects are not decentralized, how can we demand decentralization for Twitter or for Facebook or for basically any web2 projects because we cannot even make our own web3 stack decentralized enough.

Nick (00:51:06):

I’ll be watching, I’m certainly very interested in seeing how that story turns out, but I’m very excited about seeing what The Graph protocol does on L2. As you said earlier, all the different activity we’ll see from Delegators and from Indexers. When you think about the future of The Graph, how important do you think The Graph is to the future of web3? Greater adoption, greater use, maybe greater development of depths in the web3 ecosystem.

Anton Gaev (00:51:33):

Well, The Graph has already become this cornerstone of decentralized applications at the moment. I think that it would be good if a label like Maid using The Graph would appear on major sites. In the internal circles, basically everyone considers it as a quality mark. If your decentralized application uses The Graph, then you are really decentralized. If you’re not using it, then you should, but it’s in the internal circles, we should flex it, let’s put it this way, so that everyone knows. What is The Graph and why applications use it and why they have to use it? I think we are on this trajectory, so we’ll see. For how it should be evolved and what the milestones should be in this development.

(00:52:28):

Well, I see The Graph is a mystery part of this, let’s say, web3 tool kit. Obviously, The Graph is being used like Google BigQuery or Amazon Redshift within those ecosystems. I think that we really need to embed this Graph into a really good developer kit. For example, by using Google Cloud services or Amazon Cloud services, you have under 1 billion accounts, everything that is interconnected to your database, some machine learning tools, some computational tools, they’re all interconnected, but we do not have anything like that within our web3 industry. Obviously, we need something just because it is right now easier for developers to start by using web2 technologies, but it’s very hard to start by using web3 tech.

(00:53:27):

Also, within The Graph, we do not have free queries for newcomers, for example, like the first month for free. The Graph really needs something like that, and hopefully, the foundation will reach a consensus on how to do it better, and P2P.org will help in these regards very heavily.

Nick (00:53:46):

As you said earlier, when you joined P2P.org you were a hobbyist with a lot of passion and interest in web3. Then, you went full-time at work at P2P.org and worked on something you’re really loving and you think is the future. Are you still optimistic about the future of web3? If you are, why?

Anton Gaev (00:54:03):

Let’s say I was more optimistic before than I am right now. I was among those people that said that web3 should be everywhere, and everything can be changed into web3. Now, I am less optimistic. I think that web2 has some potential still. I don’t think that, ever think, it’s better to decentralize. It is also necessary to remember that in order to change the people’s habits you have to provide seven times more value than for the stuff they already are doing. For example, I’m not a believer in decentralized Twitter or decentralized Diablo and something like stuff. The world already has two Twitters and four Diablos, and these threads experiment prove that it does not need yet another one.

(00:54:54):

But still, I think that it is possible to create a good decentralized social media application, but not by just copying the original web2 stuff, but by introducing new values. For example, like we did with the financial segment and with DeFi, so basically actually DeFi is something new introduced. The term yield farming, it was never present in the traditional finance and you could not provide liquidity and earn governance. It is something new, something unique that haven’t been anywhere before. Those NFTs, it’s not simple pictures. They have some value unique, like accessing to a small community of apes that can party on the coolest places in New York City or whatever they do with their NFTs.

(00:55:53):

Or, just being among a few hundred owners with Justin Bieber and other celebrities. It’s a really new unique value that was brought in. It was brought not because it’s on web3 or because it is decentralized, it’s just a new value, and all those web3 stuff helped to create this value. I’m still a believer that new values can be introduced, but it should be definitely new where it’s not copies of the old ones. Yes, my mind changes it a bit throughout the years working at here.

Nick (00:56:29):

Anton, 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 that economics background. We talked about this earlier, but I want to come back to it. Do you use that education a lot as it comes to incentives and understanding something like The Graph? Has that been helpful to you in your work at P2P.org?

Anton Gaev (00:56:49):

Oh, The Graph and its tokenomics. I love it. Really, if the creation will disappear, I will be crying. Obviously, I understand why they want to get rid of creation. Yes, it’s very hard, and if it’s hard then it’s not the best thing. I think a lot of people should understand how it works, but The Graph is very complicated. It’s the hardest tokenomics ever created. That’s why I love it. Actually, the whole creation market is, I think that’s something that web3 needed. It is not the tech, it’s not the direct prices. For example, Uniswap governance assets, but you can bet on what protocol is being used more and thus generating more queries.

(00:57:38):

Yes, it’s totally unique economics and it is just a creation. Also, we have a delegation and the index and rewards. By being an Indexer, you can allocate on different subgraphs and they have basically different amounts of signals. Also, they change a lot. A lot of economic stuff can be introduced here, but they want to simplify all of it. Economists within me is crying, but I see why they do it, so probably it’s for the best.

Nick (00:58:10):

What’s your advice to community members who have the technological background to be an Indexer in The Graph? You’ve been doing it for a while, you’re very successful at this type of work. What would be your advice to that individual who says, “Hey, I want to be an Indexer. I want to go to work on L2 and see if I can help contribute to The Graph.”

Anton Gaev (00:58:30):

You should really think about all the validation that you are doing like a normal business. I also have some businessman friends that try to do their regular, let’s say, startups or try to sell some stuff on Amazon by becoming a vendor or something like that. They do not calculate their costs properly. They do not include the risks and all this stuff. The same here within The Graph by being an Indexer. A lot of people complaining about relatively high threshold of 100,000 GRT to become an Indexer, but actually it is very hard. It’s almost impossible to cover the costs of maintaining an Indexer by those 100K GRT plus, even if it will be fooled by delegation, still it’s almost impossible.

(00:59:30):

You really need to calculate the costs properly and calculate the risks because everyone is imagining that, “Hey, I’ll just start and the clients will be there, the Delegators will be there, it costs me nothing.” Actually, sales is as expensive as maintaining nodes. It’s very important to understand that you really need to spend a lot on marketing, a lot on your sales department, on people traveling to different conferences, talking to investors, and this is all very expensive. I do not discourage anyone from becoming an Indexer. Obviously, if you see that you can do it, do it, please. We need decentralization. We need more Indexers. It’s a good thing.

(01:00:11):

We will definitely force you on. Just go to the Discords. We’re very welcoming. Basically, everyone is answering the questions, but please calculate everything, include risks, include costs. Everything will go under the worst scenario, and you should be prepared for it. The token might drop, the token might rise high, but it still might drop. Don’t forget about it. Yeah, take it seriously, very serious.

Nick (01:00:38):

The last question is, when you started your web3 journey, you didn’t know everything that you know now. If you could go back in time and give yourself advice, tell yourself something that you wish you would’ve known before you started, what would that be?

Anton Gaev (01:00:58):

I think that answers like, don’t worry after the 2017 cycle, there’s going to be another cycle, those kind of suggestions are… Well, still, I think that I wouldn’t change anything because the mistakes I’ve made basically made me who I am. I think some experience should be earned by making those mistakes, so I do not have any particular advice for younger me or some newcomers to the industry. Just take a cautious approach. Just do not invest fully or all your savings into something you do not fully understand because you really need to understand that properly. Just remember that the whole economics, the whole stock market is about big whales, just taking the money from people that are less experienced than they are.

(01:01:57):

Yeah, really be careful about your every step and you’ll get experience by making those tiny steps and eventually you’ll end up winning and end up succeeding. Just do not rush. Success will come.

Nick (01:02:12):

Well, Anton, now we’ve reached the point where I’m going to ask you the GRTiQ 10. These are the standard 10 questions I ask each guest of the podcast every week. As listeners know, I do this to help them get to better understand you a little bit, but also to encourage them to try something new, to try something different, or to potentially achieve more in their own life. Anton, are you ready for the GRTiQ 10?

Anton Gaev (01:02:34):

Yeah, bring it on.

Nick (01:02:45):

What book or article has had the most impact on your life?

Anton Gaev (01:02:49):

Well, the most impact, it was Erich Maria Remarque’s Three Comrades. It broke my heart and I could not bring back together scenes. But in this section, I also want to recommend Brave New World by Huxley. Everyone knows about the totalitarian dystopia of Nineteen Eighty-Four by George Orwell, but Brave New World gives a reflection on where our free capitalist society goes.

Nick (01:03:14):

Is there a movie or a TV show that you would recommend everybody should watch?

Anton Gaev (01:03:18):

I’m a fan of documentaries and I want to recommend Cosmos: A Spacetime Odyssey with Neil deGrasse Tyson. Don’t worry, it’s not a boring scientific documentary. I guarantee that some episodes will give you goosebumps at the end and they will blow your mind, break your heart, touch your soul. After this documentary, you will look at the world around you and you respect.

Nick (01:03:43):

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

Anton Gaev (01:03:47):

I love music, but I listen to different genres according to my mood. But I found the music of Jeremy Soule very relaxing, both soundtrack from Elder Scrolls Skyrim and Oblivion.

Nick (01:03:59):

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

Anton Gaev (01:04:02):

It was from my father, move away from the dead end town. Go to the big cities where the dreams come true.

Nick (01:04:10):

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

Anton Gaev (01:04:17):

Some people underestimate how much other people like to talk about themselves, and it is very useful to win them over.

Nick (01:04:25):

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

Anton Gaev (01:04:27):

Getting inspiration from dissatisfaction.

Nick (01:04:31):

Based on your own life experiences and observations, what do you think is the one habit or characteristic that best explains how or why people find success in their own life?

Anton Gaev (01:04:41):

An ability to look at things from someone else’s perspective.

Nick (01:04:45):

Then, Anton, the final three questions are complete the sentence type questions. The first one is, the thing that most excites me about web3 is…

Anton Gaev (01:04:53):

The fusion of competition and cooperation.

Nick (01:04:56):

How about this? If you’re on X, formerly Twitter, you should be following…

Anton Gaev (01:05:01):

I’m not a fan of X or Twitter, so let’s change it to medium.com and follow Paradigm there.

Nick (01:05:08):

The final one, I’m happiest when…

Anton Gaev (01:05:10):

When I travel a thousand miles to get a chance to visit my loved ones.

Nick (01:05:22):

Anton Gaev, this was an incredible interview. I really appreciate all the perspective you shared in reintroducing listeners to the team at P2P.org and talking about your experiences building on The Graph. If listeners want to learn more about you and follow things you’re working on, what’s the best way for them to stay in touch?

Anton Gaev (01:05:40):

Well, the very best way is to join our P2P.org Telegram chat and ask for me there, I will answer. My tag in Telegram and Twitter is T-O-X-F-1, so Toxf1. Also, inhabit my new Discord channels regarding Layer 2s and The Graph. You can tag me there by entering my name, Anton Gaev. I will pop up.