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Redefining Blockchain: The Rise of Rollups and Multi-Chain Ecosystems with Rahul Sethuram, Co-Founder and CTO of Connext

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In this episode of DAO Talks, Tim is joined by Rahul Sethuram, the Co-Founder and CTO of Connext. Connext is an interoperability protocol that enables fast, fully-trustless communication between blockchains that’s aimed at developers looking to build secure bridges and other natively cross-chain applications. As for Rahul, he describes himself as an Ethereum developer, game theory enthusiast, physics nerd, and occasional sleeper.


Together, Tim and Rahul dive into the future of Web3 and the rise of multi-chain systems. Rahul explains that the multi-chain world is still in its early stages and predicts a future with thousands of chains. He also emphasizes the importance of user experience and the need for seamless integration between different chains. Later, Rahul highlights the role of roll-ups in scaling Ethereum and enabling application-specific chains. Rahul further shares his excitement for zero-knowledge technology, DeFi, and the potential of Miner Extractable Value (MEV) in the blockchain space.




[00:00:02] Intro: This is Tim Delhaes, and you're listening to the DAOTalks podcast. In each episode, you'll hear me talk to builders and makers of Web3. Together we'll be exploring our multi chain future, share personal stories and discuss how we're investing, experimenting and failing with the startups that define the future. So join me on this journey of discovery as a chat with these leaders, change makers and misfits about tech life, the universe and everything. 

[00:00:32] Tim: Today I'm talking to Rahul. Rahul is one of the co-founders in a team of three, and they've been hacking away at the interoperability challenges of Web three since 2017. We're gonna be talking about the multi chain future layer ones, layer twos, layer threes, roll ups, zero knowledge proofs and all sorts of other exciting stuff. Hey, Raul, how are you? 

[00:01:02] Rahul: I'm doing quite well. How about yourself?

[00:01:04] Tim: Very good. Just went for a quick surf session and dried up. My hair is still slightly wet. My shorts are still wet, but all good, Ready to go changing topics. I think your LinkedIn said you're in the Bay Area. You grew up there, but you're not currently there. Are you

[00:01:19] Rahul: Uh, yeah, OK, first of all, hello from a fellow surfer. That's cool to see. I love surfing. I love Bali as well. That's really cool that you're out there. As for me, So that's correct. I grew up. I was born and raised in the Bay Area, you know, grew up around the tech world. Big tech, Web two so very familiar with that world star in general. Through that journey, it actually brought me to Dubai, where I'm located right now. So it's it's cool. How crypto is is, you know, such a decentralised world, and you can really work from anywhere. You can find cool things going on all over the world. So it's been a really cool journey to explore different parts of the world and see how things are going out

[00:01:57] Tim: here. And not much. Surf in Dubai, though, is there.

[00:02:01] Rahul: There's a couple of beaches out here that get waves, especially during the winter season. I actually just went out a couple of weeks ago, so I

[00:02:09] Tim: I gotta go keep trying the next stop over. I'm coming, you know, between Europe and Asia, I will do that. We had to stop over in Qatar. I know you could do like, uh, wind foiling there, you know, went up to the kite beaches there, so that was cool, but actually waves there, so gotta check that out. Very cool. Listen, you know, in the or I'm digging into what the future of Web three is gonna look like. And obviously, part of thinking about Web three is thinking about, you know, multi chain. And, you know, you would have been in this multi chain space for a few years Now, you know, it must be, like five years or something, which clearly makes you a veteran in that space, right? Like, five years is like a lifetime and that, you know, maybe it's like an entire technology cycle or two. So I really want to talk with you about this and get your perspective individually and so on on it when I personally think about multi chain and no matter what multi chain is gonna look like, the big thing that comes into my mind is really end user nightmare. You know, if I think about how it was for me initially and likely for everyone to just do, you know, get a it get me a mask install, you know, make a transaction, signing stuff, understanding what you're signing, you know, worrying about your money. Now, it seems like this is gonna go. You know, in this multi chain universe, no matter if it's gonna be like three chains or 3000 chains, this seems to be like that's where it has the biggest impact. And I know you guys are working with your technology on this, but what are you seeing these days and what are you thinking about?

[00:03:40] Rahul: You know, as you said, I've been involved in the multi chain world basically since its inception. So, you know, I saw the very start of, like, the chain explosion, if you will. So you know, right when, like, binance chain came on the scene polygon things like that. Those were, like, the very first little facets of the multi chain world starting to grow. And I think we're very much still at the beginning. We are yet to see, like, a giant explosion of chains. And I think this is something that is, like, really coming in the, you know, near future over the next couple of years, because I think people are starting to realise that you know, there are ways to build application specific chains, application specific roll ups, kind of like these little like, micro like set of block space, where you really only use it for a certain application. And then you can do really cool things like you can internalise MEV. You can keep your set of block space secure from like, let's say, you know you don't want your application to go down because there's some like NFT mint. Happening on another part of the chain like that should not affect your user experience at all. So I think people are gonna start to want these levels of isolation. We've already seen that where, like, DYDX, is like moving to their own chain because they want to do things like they want to internalise this. This will only start to grow. You know, I think unis maybe in the future will plan to, like, roll out their own chain. So, like we're starting to see the benefits of this. We're starting to see toolkits. We're starting to see layer threes, and this is kind of one of the reasons why I refer to it as just block space and not a chain, because when you're talking about, like, isolated block space, you can have it where it's a roll up where it's not technically a chain. It still relies on the ethereum consensus. However, for user purposes, it looks like another chain. You have to bridge funds over there. You have to get your own funds. You have your own kind of like gas. You have to pay. You have to sign transactions. You have to send transactions to this. So each of these roll ups is developing their own platform to build, like, infinite numbers of chains on top. This is what we refer to right now as like layer three. So and then we have these other tool kits like Stacker, for example, is one company that I've been kind of working and involved with. They're trying to create this framework for, like, micro roll ups that are like truly app specific roll ups that can be written in different programming languages, which is, and you have this like, very customizable roll up. That is only for your use case that I think people are really gonna take advantage of this. They're gonna go all in like there's gonna be, like, governance specific roll ups. There's gonna be like, You know, Dex, there's gonna be like, NFT roll ups. There's gonna be gaming is gonna be one. Basically, every game is gonna have its own roll up because that just makes sense for a game. They don't want to deal with any of the other stuff. They just want their game. So I think, you know, we're just at the start of this explosion. So, you know, maybe we have, like, a couple 100 chains right now. Maybe a dozen of them are actually, like, useful and highly used. We're gonna see this number grow to the thousands very quickly.

[00:06:35] Tim: That's very interesting. Like between positions from maybe even just two years ago, three years ago, you know, strong voices about, you know, from, like, Bitcoin maximalist, right? Like you're looking at everything besides Bitcoin going like it's not going to exist. And I personally feel that I have kind of, like, somewhat drowned in the noise. It's gonna be impossible to prove anybody wrong who believes that today, but at least not as present on it as heard. And I would say there have been a a certain degree of like, Ethereum, maximal as well. And there's not a lot out there and, like, you know, between talking to different people, there's clearly I would say, there's a good consensus around that there is going to be a multi chain future. It is a multi chain meaning, you know, there's gonna be Bitcoin. There's gonna be Ethereum and there's likely going to be a bunch of other chains, right? But this is then where you know, the opinion split. Like, you know, I've talked to people that go like, Hey, we're gonna end up with half a dozen to a dozen chains and everything else is not gonna make any sense. And you know we now have. I think if you go and look it up, it must be 200 or something Could be more, could be less. And you just said, Hey, it could be 1000 could be multiple 1000. I think that's very exciting and interesting. And you combined that with talking about, you know, you repeated this several times. Now that you know this is roll ups and you said block spaces and you know so it's not necessarily its own chain. However, from the user experience what we said explain to everyone that's listening, you know? What are you really thinking there? So what's the place for these roll ups and why are they important? So maybe start with, you know, a simplified logic of what they do and how that would apply to a game. And you know how this idea of roll ups come, you know, somehow connects to, you know, block spaces as you labelled them. Or is it the same or is it different?

[00:08:26] Rahul: Yeah, totally. So in a nutshell, a roll up is a way to batch transactions on, like a single layer one. So instead of sending all your transactions on layer one like everyone is familiar at this point with, like, ethereum gas fees like how expensive it is to do anything on Ethereum. So what roll ups do is they've kind of pioneered this construction where instead of sending a single transaction, they will batch all the transactions into something called a sequencer. They will keep track of essentially all the transactions that happen on, like a virtual chain, if you will, and then they will batch that and put the proof of this new set of transactions onto the chain. So essentially what you get is you get extremely efficient and optimised fees and like isolation from the main chain while still inheriting all the security of the main chain. So it's a really cool construction, you know. It's been around. It's clearly got product market fit. We have maybe like a dozen roll ups right now that are all trying to do their own thing. But then now this layer three thing is another construction where it allows you to build roll ups on top of roll ups. So when you build a roll up on top of a roll up, then you get even more benefits where you get even cheaper transactions and then you get some of these other things like you can have control over the actual, like ordering of the transactions is really important for MEV, which is, you know, a topic that might constantly come up and is sort of a very important topic these days. But yeah, so essentially, each of these roll ups is now innovating to create this stack where you can create even more roll ups on top And that's why you know, I really think like, you know, leaning into this vision is how we're gonna get to this point of, like, thousands of chains. And, you know, like you brought up even if you're like an entire eth maximalist and you think like E is only gonna be, uh you know, there's a lot of people that are saying, like, why do you need anything else except E? You are still gonna end up in this roll up world where you have all these roll up competing with each other that are essentially, like, big being these like factions, and then they have roll ups on top of them. So still, you have this, like, giant like mess of like chains that are, like, somewhat interconnected. Another cool thing is like between these, like, layer threes. So, like, say, you have optimism and you have all these roll ups built on top of optimism. They will all be like, inherently interoperable with each other, but they're not gonna be interoperable with, like, the arbitral side of it. So then that's when you get into this whole like interoperability mess that you have to navigate

[00:10:50] Tim: Very cool picture. So would it be then? You know, this is just what's coming to my mind, maybe a way of thinking about this, that you can look at this multi chain future, this multi chain ecosystem, really from two sides to say, Well, you know, there's gonna be I'm just painting this out, right? You could say, Hey, there's Ethereum, Like looking at it from a technical from a Blockchain site. You'd say, Hey, there's Ethereum! And then on top of Ethereum, there's this layer twos right, which are technically not chains, and the layer three are also not necessarily changed when you look at it from a classic collect Blockchain definition. However, if you look at the same picture from the end user or the developer side, it really is a multi chain universe. So this definition is maybe also somewhat unclear in that, like when people talk about it, because there's likely gonna be a lot of people that say, Hey, you know, I don't think most of the chains are gonna survive. There's never gonna be more than half a dozen, but they might actually agree with you and say, Hey, you know. But there could be you know, a dozen layer twos and then there could be 500 layer threes or layer X on top of that. Is that how you would think about this?

[00:12:05] Rahul: Yes, I think that's exactly correct. I do think, you know, I think it's not gonna be just one layer one because like you said, you know, there are these camps. There's like the Bitcoin camp. There's like, you know, Bitcoin has enough like Lindy Effect at this point to stick around like people know it's gonna stick around. Then you have things like Solana, which is like trying to improve on top of what Ethereum did and build from the ground up and do things a different way. You're gonna have, like, other things like Atos and which are also like, you know, trying to be like a better version of Solana. So people will constantly try to innovate at this base layer. And then there's another whole ecosystem which we haven't even talked about, which is Cosmos, which has like, a totally different idea where they want to also do like multi chains, mini like, kind of like very application specific chains, but they don't want them to be roll ups. They want them to be like full sovereign chains with their own sets, but have built in interoperability. So if you look at that world, you know Cosmos alone is gonna give you, like, hundreds or thousands of chains. If that ecosystem starts to catch on, which it seems like, you know, it does have the network effect right now to stick around and catch on. People are building there, you know, DYDX is building there, so it's kind of a huge thing. And then from that standpoint, you know, there are still gonna be, like, discrete chains so that within those chains, if those chains adopt this roll up model, then, yeah, you are gonna scale up. And like you said, it's really important to consider the user perspective because the user is not gonna know whether it's a roll up or a chain. They're just gonna be like, OK, well, I have to deal with this the way I deal with the chain. So I have to connect my wallet to it. I have to deploy contracts. If you're a developer, I have to get gas on this thing that I'm trying to use. Whether it's a chain or a roll up or whatever

[00:13:47] Tim: in your mind. If I'm reading this correctly, you would look at this as a bunch of different kind of ecosystems with, like, base layer technology like this Ethereum with its layer twos and layer threes and layer X. And there's Cosmas with its own kind of approach. And you're gonna end up with this kind of like, you know, as you put it. And I You know what? I just took a note while you said that I've had this before, but this kind of like this camber explosion, right? In terms of evolutionary, you know, diversity of Blockchains, but kind of springing up on top of, like, certain base level kind of technologies or chains that you're gonna have, you know, several 100 years and several 100. But ultimately there's likely going to be, you know, whatever half a dozen or a dozen, maybe who knows? Like ground playing technologies and every other chain or network is kind of like plucked on top of that, and you're gonna have a big variety of, like, families, chains. Is that what's in your mind? I'm trying to capture visually.

[00:14:51] Rahul: Yeah, I think that's a good way to put it. And that's mostly correct. I think you know, underlying technology will converge on certain primitives around like, you know, this is how you do consensus. This is how the VM should work. This is maybe the built in bases interoperability layer, like Cosmo style and then, like, it will just kind of build on top of that. So I think you know, these things will converge into, like, a few different ways to do things at the base layer. And then, like you said, it will just like Camry and explode from there.

[00:15:22] Tim: All right, so you guys started Connex in 2017. I think, if I remember, right, tried to rewind a little bit and try to get into a mindset of What did you see in 2017? Like a lot of the stuff that we now talked about, like layer twos, layer threes, LA You know, roll up was around in, like, either early prototypes or white papers. But the ecosystem as it is, obviously didn't exist in that way. How did you look at the ecosystem? And what problem did you see in 2017? or earlier that you said, Hey, this is worth solving and we're gonna start a project around this. What? The origins of K. Yeah,

[00:16:03] Rahul: totally. So, as you may imagine, K looked very different In 2017, the whole Blockchain world looked very different. But it's really interesting because connect was founded to solve basically the same problem we're solving right now, which is like, how do you increase adoption? How do you bring Ethereum to the masses? How do you bring not just ethereum, but like Blockchain technology to the masses and very much we did start and we still are, like quite ethereum centric. But we do understand the multi chain world as it is right now, and we kind of leaned into that. So when we started connect in 2017, the whole space looked very different. This was like when IC OS were starting. This is an IC O boom, right, So like, there were all these projects launching different kinds of like projects with different tokens doing these token sales. So we started connect initially as a way to easily onboard people into IC OS. So like we were almost like a Fiat on ramp we were like, How do we make it? So like my grandma can use a product. But that did an IC O like, for example, maybe there was, like, status or something that had, like, this token called a status token. Like, how do I easily get this token? So we're like, OK, why don't we, like, try to be like a credit card processor? So you can like into these tokens? That's actually the initial way that we started connects, However, as we started to, like, get more and more into that. Of course, not even considering all the crazy stuff deal with banks, regulations, payment processing, which was, you know, a big reason why we didn't pursue that anymore. But after like talking to a lot of people in the space and potential customers, they all said that, like, the chain isn't scaling like there's no way we can onboard massive amounts of users. If Ethereum itself is not even gonna scale past like, I don't know, five transactions a second or something like that. So what we said, and instead of like, we've always been the type who is like customer focused user focused, we want to solve the problem, the real hair on fire problems that our users and customers are seeing. So we said, OK, we need to change to scalability. That needs to be the ultimate problem that we solve. And this was like pre roll up days. This is in, like 2018 when we first made this shift. So what we did is we attacked the scalability problem. We said, OK, where can we make Ethereum scale? Since roll ups didn't exist, the only construction to do scaling on Ethereum was through state channels. So state Channel is a technology like it's a pre roll up technology that allows you to kind of move transactions off chain and then put them back on chain in like, a trust way. So you deposit things in a smart contract, you kind of send sign messages back and forth with you and and a peer, and then you put that back on chain at the end, and there's like a built in dispute mechanism. So we built that we kind of launched products. We built the first production Main Net State Channel hub. We kind of like collaborated with a few teams on building that and then all of a sudden, once we had the product fun, like spun out and built, we kind of realised that something weird. This is like when BS, C and polygon So this was like the multi chain So BS C polygon. I were kind of like coming up as, like, EVM chains that were advertised. They were side chains, right? So they were like, OK, you can get all your EBM stuff. You can deploy the same contracts. You can use the same kind of apps, except it's not gonna be cost the same as Ethereum. And it's gonna scale because they were, like, very centralised, right? So what we realised is our state channel technology can actually bridge like funds and assets between these different technologies. So we kind of like that was kind of like a light bulb. And we're like, OK, why don't we throw together like a quick demo of like, a bridge? So we put up a demo it, like, basically caught on like fire, like we were like, you know, inundated with, like usage and it, like, broke all our infrastructure and everything like that. We were like constantly on fire, which is. You know, like looking back, it was like a really good thing, because it's like, Wow, this is how you know, like, kind of how product market fit is when you're like, you can't deliver the product as fast as your users like. The users are kind of taking it from you, like however you can give it to them. Then we were like, OK, we gotta make a full pivot in interoperability. This is like the thing like the multi chain is here to stay. Then we kind of rebuilt our product from the ground up, like, two or three times since then, And we've rebuilt it like two times since then. And finally, we're on the third iteration of our product right now, which is our full interoperability suite Talking

[00:20:27] Tim: about this, you know, obviously in this different iterations and, you know, talking about the interoperability suite, you know, would you be able to summarise this in the simplest words possible? Like, how does it work today and what are the kind of core assumptions that are under it without going technically too deep? But if you know, somebody listens to that and goes like, Oh, I understand how this suite works and what makes it different from other approaches.

[00:20:51] Rahul: Yeah, totally. So, you know, to begin with the first few iterations of our product or focused around like asset bridging. So it's like, I want to get funds from this chain to this chain. How do I just move my funds? And that's a very basic primitive of interoperability. Like I want funds here to here. What our thesis is at connect is that these kind of bridge you eyes where you have to bridge from one tin, another chain, you just get your funds and like, you have to take these like, extra steps to do that, it's kind of gonna disappear. And apps themselves are gonna become multi chain at the core. They're gonna be cross chain compatible at the core. So they're gonna have all these different interactions with different chains built in under the hood. And there's gonna be no need to actually like bridge. As a user like you will just interact with the app you want to interact with, and the app will take care of everything else. So these are kind of the layers of abstraction that we believe are gonna show up and we want to help build. So with that said, our newest iteration of the product right now is focused around that is like building applications. So what does that involve? Like, how do you send data Not just assets, but actually actual data across chains. You need a message passing mechanism you need, like a execution mechanism. You need a way to, like, send liquidity. So we think funds and data should be kind of sent together as, like, one packet and able to be consumed by application. So now the latest iteration of Connect is it's no longer just a bridge like a user facing product. It's a developer platform.

[00:22:22] Tim: You know, one of the things that whenever good level of ignorance and technical understanding. But every time I hear this, I think that happens to people that listen to this as well is when you first hear Yeah, you know, there's a difference between passing data and between, you know, bridging tokens when you're kind of far away from this world. That somewhat makes sense. But the closer you you look into it, you go well. The token doesn't actually exist. It's also just a data package, right? Like so what is the difference between passing data and passing tokens, by definition? Because you see this quite a lot. You just use it. But what is the difference between, you know, moving a data package and moving a token from a to B?

[00:23:07] Rahul: Yeah, that's an interesting question. Well, it's kind of interesting, because if you really look at it like you're saying you're not really sending anything from one chain to another chain, you're just kind of like replicating it and kind of you have a mechanism to basically validate that This replication of data from one chain to another chain is correct. And when you're doing it with assets, you can do it different ways like you can Basically like how our old bridge worked is you send to a link liquidity provider on one chain and they send you assets on the other chain. So really, there's nothing. There's no like interaction between the chains. In that case, there's just a liquidity provider who's looking at something happening on one chain and then executing it on another chain. So and then the assets themselves are just kind of like completely discrete. You're just like trading one asset for another asset. So in that sense, yeah, it's quite different than like passing data around because, you know, you just have this, like, liquidity provider as liquidity on one chain is trading it for liquidity on another chain. When you get into data, then it's a bit more complicated, because then, yeah, you have this, like, issue of, like, data replication. But then you have this whole thing about, like, how do you validate that? That data is correct and there's different ways to go about doing this. There's, uh you know, of course, there's a lot of other bridges at this point, and most of the bridges use this mechanism of like, external validation, which is, you know, you have this like, fairly I don't know different levels of decentralised set of validators that can be like, more or less trusted. You can have like, a proof of stake system. So you have some kind of like external consensus mechanism between a few different parties that will say OK, now that I've received this data on this side, I see that So like all these people are gonna agree that this data could be passed to this side as well. Connects approach is slightly different. So what we wanna do is we want to minimise the trust assumptions that any user needs to make when they're bridging data or messages across chains. So we say that you should basically use the most trust system. So without getting too much into details, we use underlying mechanisms like a roll up bridges themselves to pass data between. And we kind of just like wrap all that up in a very nice interface. And we use optimistic verification mechanisms. So we use a fraud based window or mechanism to validate the data rather than an externally verified mechanism.

[00:25:35] Tim: Run me through this optimistic process and, you know, explain for a second what you know to people listening to what does optimistic actually mean? Like optimistic means, like you hope for the best or

[00:25:48] Rahul: what is it? It actually does in a way, mean that you hope for the best, so like it works kind of like an optimistic roll up. So what optimistic means is you send something, and if nobody disputes it during a certain period of time, then it's considered to be valid. So you're saying OK, I'm gonna send this data and I'm going to give anybody the chance to dispute that this is the correct data by providing a proof that it is incorrect data. So you're assuming that a person sending it is an honest person, and if they're not, then you have an option to basically, like, come in and say that they're invalid. So this is how we verify our messages when they're going cross chain. So we say, OK, we're gonna pass this data, but the data is not gonna be valid for, like, a certain period of time until anybody who wants to is able to come in and submit proof that this is an invalid proof, invalid claim or message. So instead of like, an external validator set is like an M of N. So that means like, say, you have 10 validators, you need six of them to say that it's correct so that basically you're relying on six honest people or six people to agree together and not be dishonest. So only six people have to be dishonest for your basically for malicious data to enter the system. But in an optimistic model. Only one honest person needs to exist, so only one person needs to be there to say that this packet is fraudulent. Otherwise everything is good. Anybody can just watch the system and say that it's all fine.

[00:27:26] Tim: And as soon as one person says, there's something that is not right, it enters a dispute. That would be the way to think about this in the easiest way.

[00:27:34] Rahul: Yes, that's correct. Uh, one person finds that there's fraud. Then it enters dispute. It stops the bad data from going through the system. Then everything could be unwound. And then we can find the correct data and go through the system again. And, you know, all the dishonest people get slashed, and you know there's mechanisms, economic incentives around that to make sure that things work out right. But this

[00:27:56] Tim: ultimately means that once you enter dispute, you again need some kind of validation mechanism, right? So I guess it's like think about it upside down, like in one case you validate everything. In the other case, you just validate when somebody lifts their hand. Would that be a a way of thinking about

[00:28:15] Rahul: it? Not quite, because you have the proof in it that they can do it so you can see that it was wrong. Otherwise, in the other case you're talking about, it's not really validating anything. There's just a bunch of people agreeing that something is correct.

[00:28:32] Tim: So how did you get into this? I mean, you've been deep diving on interoperability and you know, these procedures and validations and consensus and so on and now for several years. But I think you're a programmer from, you know, background. That's what you learned. I think you worked at Tesla doing stuff for some time. You've participated in other startups. What drew you into Web three?

[00:28:57] Rahul: Yeah. I mean, like I said, I was born and raised in the San Francisco Bay area. So grew up around Tech, grew up around startups. My dad was an entrepreneur as well in the like Silicon Valley days. So, you know, I've always had that inspiration where I'll be an entrepreneur, start my own thing, kind of like run my own companies, things like that. So that's always been like in the back of my mind, my vision. I was, of course, very into cars and electric cars, and I was kind of like growing up I. I really wanted to kind of like work in that space. This was like pre Tesla days as well. So when I went to school, I did electrical engineering with the idea that I'm gonna work on, like, cool electrical systems, batteries, cars, things like that. Then eventually got kind of my dream job at Tesla, which, you know, I was very grateful for at the time. Yeah, and then worked there for a few years. I learned how to code Basically during that job, kind of got randomly into finance around that time. I think partly because of the fact that I was getting stock and learning about that whole process. So eventually I left to start my own like Fintech company. This is like pre crypto days. When was that? That was around 2014 is when I left Tesla. That's when I kind of started to experiment and start my own thing and started the fintech thing. So dabbled in that for a couple years we got acquired into, like, another bigger company. It was, uh, doing things more on the cloud security side, so it still was kind of programming writing code, experimenting with tech There I ended up not liking it. So then I left in 2017 itself, and I was kind of like figuring out what I'm gonna do next. And this is right. When, like, Ethereum was starting to become on the scene, the Dow hack happened. I was kind of like free at that time. So I was like, let me kind of explore this and see what it looks like from a developer point of view because that people were already talking about, like, kind of speculation and this kind of stuff. But I was like, OK, let me dive a level deeper and see what the like developer platform looks like. The interface, the API smart contracts, things like that. So then I started doing hackathons started going to, like, meet ups in San Francisco, things like that. And then, you know, just meeting people in the space. And that's how I eventually met. Ain, who was my co-founder lane. And we kind of started, connect together and hit it off. And yeah, that's where it so

[00:31:11] Tim: it connects. You have three co-founders?

[00:31:13] Rahul: Yes, three co-founders and you are all three still active. Yeah, All three still active. Been active very close.

[00:31:20] Tim: How do you divide the

[00:31:21] Rahul: roles? So, ain is effectively the project lead. So he kind of, like, leads everything on the nontechnical side BD side, even strategy side. I mean, he is very technically understands everything very deeply. I'm like the engineering lead CTO. So I kind of manage all the tech side and, uh, you know, everything that happens on the engineering team and then Lane is focused on, like, protocol and security. So we have, like, a really good, like split of roles between the three of us that has worked out very well.

[00:31:51] Tim: How big is the team at this stage? How many people you're in, like, full time? Not employees or not. But how big is the team?

[00:31:58] Rahul: Yeah, we've grown to about 17 now, which is crazy because, you know, for probably five of the years of connect, it was 3 to 4 of us. So we've always been very small and and only, you know, within the past couple of years now it's grown. So it's been really cool to kind of see growth and actually be in a position to be able to grow and scale up

[00:32:19] Tim: what's been your biggest learning experience as a co-founder over the last 23 years with this thing scaling, you know, from 45 people to almost 20. What have you learned over the last two years that you would pass on if anyone asked,

[00:32:34] Rahul: I would say, like, you know, focus on end user experience that's been like my thing more and more like, you know, I'm a tech guy. So I've always been a tech guy. I've always been like, deeply interested in using the best tag getting the best tech, uh, building the best tech, but really like, you know, in a lot of ways, that doesn't matter as much. I think what you need to do is you need to focus on the user experience and, like Polygon is a great example of this. Like they kind of had like, you know, if I'm, I can say it like a shitty product in terms of like, the tech was not good, but they focused really hard on, like selling it and like they were able to gain like large scale adoption. And now they're doing the cool stuff, like with ZKEBM and things like that. So, like they can always do that. But like we always started tech, we're always going to innovate on the tech side first. And you know, it's really important to maintain your values because we never want to be at a point where we're like OK, well, we're just gonna do everything centralised and like, you know, figure it out later, and I think that's not the right approach. But I also think the approach is to, like, really like look at it from the user point of view. Another thing I would say is like, Don't like, rebuild your product from the ground up if you can help it We've done that like literally three times now. And I think we ended up like losing market share like giving space for a lot of other people to come in. And when we had a clear like lead, we kind of lost out on some of that by taking so long to, like rebuild things from the ground up when we could have just kind of baked it on top of our current offering, you know,

[00:34:03] Tim: so to say congrats on that because you know, I agree and hearing this for 20 years and doing startups as well. There's an entire graveyard of startups that try to rebuild their product, right? So kudos. And you guys said you have actually done it because of the others. Have literally failed on that. And we're like, Oh, we got just rebuild everything and then, you know, it doesn't It's what you don't see, right? It's what happens, you know, in the future, when rebuilding and how the market shifts and, you know, you are distracted on building while others are busy marketing and winning users. Right, Suddenly you look to the site and you're like, Oh, what's going on here?

[00:34:37] Rahul: And it sounds so cool because you're like, Oh, yeah, like, you know, now we have all these new ideas we learned so much from, like building this like we can build it from the ground up. It's gonna be 1000 better. But, you know, like you said, you're just gonna kind of like dive in on the weeds and you don't understand how long that process takes. Like we thought our rebuild was gonna take three months. It took almost a year, so we really had to, like, claw ourselves back into the scene after that. But luckily, you know it's still early and there's a lot of opportunities still, but it easily could have killed

[00:35:09] Tim: us. It's somewhat exhausting and risky. I hear you two more questions. What are you most excited about that you see happening? You know, in the web Three world, in terms of like technologies and standards and projects like when you look around from your vantage point, what do you see That you know, gets you excited and you go like, Oh, if this, you know, really moves forward or that really moves forward or, you know, this has moved forward, this is gonna change everything. What are the big things on your radar?

[00:35:38] Rahul: Yeah, there's a couple of things I think like zero knowledge stuff is really exciting to me. I think, like, I feel like, you know, it's really like tech kind of stuff. But I think it really unlocks a lot of like real world use cases that people are not really seeing yet. Like, you know, things like identity. You could do like actually like civil resistant identity proofs using like, zero knowledge. And that's gonna like unlock a whole set of new use cases. Privacy. Of course, I think privacy is a big part of the whole zero knowledge movement, and I think that's incredibly essential part of Blockchains that is, You know, I think people talk about like, oh, privacy rights, blah, blah, blah. But you know, another thing I think is like institutions need privacy. They don't want all their like everything they do to be like visible on Blockchains. So I think that's a big part of what's holding them back from actually being part of this world. Also, I, you know, just in general DFI is something that really excites me. I just you know, I think I'm kind of like a DJ and at heart. So I love to just, like, experiment with D Five Platforms. I like to see what's going on. I think you know, lending protocols are really cool. I think like, you know, and I think lending protocols, I think in their current state are just like completely like it's almost like they're just like a tool for leverage and speculation. But I just really think the idea of like, you know, collateralized lending of like other things, just like just Besides, lending crypto to get more crypto is like one very basic use case. But once you can like collateralize other things like you know your property your like real world assets. You know you could even like collateralize your own self to have, like, a credit score or something like that and do like under collateralized lending. So I just think that space has so far to go and it's just at the very beginnings of it. One more thing. It's, uh, I mentioned this before a little bit, but MEV is just like an extremely interesting problem to me that I kind of like, almost research it as a hobby, and I'm constantly trying to, like, read up on it and stay on top of it. But I think there's just, like so much interesting stuff around, like the transaction ordering the order flow and the whole like kind of discussions that are going around proposer builder separation, payment for order flow, things like that, a

[00:37:48] Tim: N user or, you know, a developer, an entrepreneur that's just getting into the space. Why would you say, Hey, you should know about MEV? What's so important about it from

[00:37:58] Rahul: the end user perspective. It's interesting because it's like MEV Will will only hurt you essentially like, uh, you know, if you set your slippage tolerance too high and you know, swap and you do a swap, then all of a sudden you get, like, sandwich attacked and you end up like, getting way less money than you thought you would. And, you know, if you if you kind of, like, understand those mechanisms, you can be a much smarter user. I think, of course, all this stuff needs to be abstracted away. But right now, we're still in, like, the power user stage where, like, people do unfortunately need to, like, understand that kind of stuff. And, you know, as a developer, founder person like that, I think, you know, figuring out ways, like if you're building a protocol like, how can you use MEB to your advantage? Like, how can you like internalise? Some of this MEB whether it's like like, you know, building an app chain, maybe, or, like, you know, figuring out ways to, like work with these bots who are gonna come in and just, like, find any way to extract as much money as they can like. Maybe in some ways, that works to people's advantage. Like with liquidations on a lending protocol, for example, like you want that MEV. That's like, good MEB. So what's the good MEV bad MEV. How can you kind of harness that into your application? Very cool.

[00:39:08] Tim: Last question. So what are you excited about? That is happening kind of behind the curtains at con What are you working on? What's coming next that you go like, I can't wait to get this on the market on one side. So exciting part on your tech and connected to that, you know? Who is it for? And what kind of like, uh, projects stops developers? Are you looking for where you go? Like, Hey, we are building this. And if you're planning to build this, then you know you should really engage with us and come to us.

[00:39:36] Rahul: Yeah, totally. That's a great question. I think. You know, like I alluded to We have developer platform now, so we are trying to onboard developers, and we basically identified three different use cases for developers that should be building on connect. So, like one is X token. So it's like a cross chain native token. So if anybody is doing like a token issuer that wants to issue a token that is natively cross chain, we are building tooling to help deal with that one is cross chain governance. So we want the ability to govern protocols from any chain. Uh, I think this is just, like a really important part. As these protocols become more multi chain, they should not have, like, you know, isolated sets of governance or governance only possible from one like main chain, which we think it should just be like interoperable by default. And then another thing, which is kind of like the closest thing to production or production live right now is this concept we're calling chain abstraction. So this kind of you know, gets into a lot of the stuff I've been talking about earlier, around like, UX abstraction, stuff like that. So this is the ability to interact with the DAP from any chain. So say this dap is on. I don't know. Let's say polygon, for example, and you know, all your funds are on Arbi and you want to use this dap like you should just be able to use it. It shouldn't matter what chain you're coming from. So we're building basically a tool kit. You know, full SDK smart contracts, frameworks, everything U I components to allow Das to easily integrate this functionality into their product. Very

[00:41:04] Tim: good. Any last words? So on the time, it's 3 p.m. here, you know? Wanna run over it? I know you got stuff to do, you know, product to ship, you know, developers to support bucks to fix any final thoughts here.

[00:41:18] Rahul: Yeah. No, definitely. This is a great conversation, you know, happy to come here and chat. And if any of the stuff was interesting, please, you know, reach out contact on Twitter discord, anything like that. So would love to, you know, connect with users, get feedback, connect with developers. So

[00:41:36] Tim: this was great. Very insightful. Learned a lot. I appreciate your time. Thank you very

[00:41:42] Rahul: much. Thank you. You as well.

[00:41:44] Outro: Dial talks is brought to you by grindery. If you enjoyed this podcast, consider subscribing to dial talks on apple podcast, Spotify, Google or any other platform. You fancy to find out more about grindery? Visit Thanks for joining me. Tim. Out 

About the Show

Decentralized autonomous organizations, or DAOs, are all the rage. We’re seeing explosive growth in this sector as people experiment with building companies on top of tokens and smart contracts. If you want to get a better understanding of why this is happening, listen to the people that work, build and invest in them: the members.

Join me on my personal journey of discovery, a series of talks with the Web3 builders about DAOs, Life and everything else.

Graham Spencer

How people share their availability and generate stronger commitments via token staking

Spencer is a product manager for DAOhaus, and a RaidGuild contributor. During his Web3 travels, he's noticed that there are usually 2 kinds of people in DAOs - those that dip their finger in multiple projects, and those who focus on one project only. Now, he's championing incentive based mechanisms that make people share their availability and generate stronger commitments via token staking. That, and he thinks that DAOs can be an answer to climate change.