Chain Reaction

Aptos wants to shake up the layer-1 space (w/ Mo Shaikh)

Episode Summary

For this week’s episode, Jacquelyn talked with Mo Shaikh, co-founder and CEO of the layer-1 blockchain Aptos. Shaikh is a three-time founder with over a decade of experience in financial services as well as blockchain technology and crypto. He also worked on blockchain strategic partnerships for Novi, Facebook’s wallet and was the strategy director at Consensys. Last year was huge for Aptos – as the blockchain launched publicly and raised about $400 million in funding, amid a bear market. The new layer-1 got backing from major investors like Andreessen Horowitz, Circle Ventures and the now-defunct FTX Ventures, to name a few. Looking forward, Aptos plans to focus on making 2023 its year of “intention,” Shaikh said.

Episode Notes

Welcome to Chain Reaction

A show that unpacks and dives deep into the latest trends, drama and news with some of the biggest names in crypto breaking things down block by block for the crypto curious. 

For this week’s episode, Jacquelyn talked with Mo Shaikh, co-founder and CEO of the layer-1 blockchain Aptos. Shaikh is a three-times founder with over a decade of experience in financial services as well as blockchain technology and crypto. He also worked on blockchain strategic partnerships for Novi, Facebook’s wallet and was the strategy director at Consensys. 

Last year was huge for Aptos – as the blockchain launched publicly and raised about $400 million in funding, amid a bear market. The new layer-1 got backing from major investors like Andreessen Horowitz, Circle Ventures and the now-defunct FTX Ventures, to name a few. Looking forward, Aptos plans to focus on making 2023 its year of “intention,” Shaikh said. 

We also discussed: 

Chain Reaction comes out every other Thursday at 12:00 p.m. PT, so be sure to subscribe to us on Apple Podcasts, Spotify or your favorite pod platform to keep up with the action. 

Episode Transcription

Jacquelyn Melinek  0:01  

Hey everyone, its Jacqueline melanic Welcome to chain reaction, a show that unpacks and dives deep into the latest trends, drama and news with some of the biggest names in crypto breaking things down block by block for the crypto curious.


Today's episode is the interview with Moshe, the co founder and CEO of app toss for background beyond app toss. Mo is a three times founder with over a decade of experience in financial services and blockchain and crypto. He also previously led blockchain strategic partnerships for Novi, Facebook's wallet and was the Director of Strategy at consensus, Moe, thanks for joining us.


Mo Shaikh  0:38  

Thank you for having me, Jack and appreciate it. Yeah, so


Jacquelyn Melinek  0:40  

I heard you say in another interview, which I was looking at for prep for this is that app toss is a Native American word for the people. And when I Googled it, it said the app toss means where the water comes together, which is, you know, a similar analogy. So I'll take both. But to start, can you tell our listeners about this blockchain of the people so to speak, what it is? Why did you and your team create it?


Mo Shaikh  1:02  

Yeah. But thank you for that it is a one new word that means for the people, and it also has that beautiful, meaning that you just highlighted on water coming together. But it does do a good job of personifying what we're trying to do. If you've looked at the space over the last 10 years. And I kind of go back to my Ethereum days very early, when I was at consensus, there was a lot of potential for web three and blockchain at the time, and for what three became even a term to be able to disrupt platforms and bring value back to people that are creating it, and value to those who are actually using the creations. However, that mission was largely unfilled because of the shortcoming of the infrastructure. You know, we're very fortunate. And he talked about my experience at Novi to see how you build platforms for billions of people. And what I learned from my early days of Ethereum, is how do you bring this technology to billions of people and the promise and so when we started thinking about what app toss should do, it should be able to reach billions of people without disruption, no downtime, performance, that gives us 1000s of transactions per second, and latency that sub second. And all these things put together can rival not only other previous generation of blockchains and scaling solutions that we're seeing in market, but they now start to challenge the internet and the way economic value and information moves across the world itself. And so when we're thinking about Aptos, we certainly thought that the people need a new form of sharing information digitally, and being able to share that information and economic value digitally in more efficient, more fairways. And so, that's the mission that we're on and excited to continue to push forward.


Jacquelyn Melinek  2:38  

Yeah. And your mission was supported by you know, a lot of investors Aptos raised a total of $350 million from two funding rounds last year, with major investors like Andreessen Horowitz, circle ventures, junk, crypto, and so on. And the last round was led by FTX ventures, which, of course, you're aware, and we know no longer really exists. How has FTX is investment if at all affected the blockchain? And I mean, hopefully the capital wasn't given an FTT? Or was it?


Mo Shaikh  3:06  

Yeah, it's. So we've raised a total of 400 million, just to kind of make that point, clear. And last round didn't include FTX. It also included many other folks, like jump in some of our previous investors also participated. And it was a moment for us to think about, you know, where the space was, and we had an opportunity to think about how we do take our investment, and it was in cash. So we've had, you know, fortunately, no impact or very little impact from the FTX perspective, it's good. But we've also learned lessons in terms of how this entire industry should be formed. And so, you know, all our investment was received in cash, we had no exposure to FTT. And we also had no assets custody with with FTX, either, so our entire communities is protected. But that protection actually comes from a perspective of how we operate. One of the things that we've seen in this space is a lack of thinking with an operating with a certain perspective. And, you know, we took a very serious approach to how we work with all of our investors, whether that's a16z, Katie, Han, and on ventures, multicoin. And Pay Pal and coin Base Ventures to someone like FTX. And we're very fortunate to have taken a very disciplined approach.


Jacquelyn Melinek  4:15  

And there were conversations when Aptos launched about 50% of the blockchains native token went to founders, core contributors, investors and the app toss foundation. Can you tell me a little bit more about the decision behind those tokenomics? And whether or not you view that is fair, because I know there was some backlash when that first came out? And going from that, like, what's your market strategy to get others on board and into this?


Mo Shaikh  4:36  

Yeah. And I appreciate you actually bringing this up that Yeah, I think folks take a look deeply and look at all the tokenomics that have been out there. And that's even including things like Ethereum, we wanted to really push the boundaries of what we thought fair is and that's a great word to call out. And if you look at our token omics, we have among the lowest if not the lowest token allocation for investors, and one can make that case against even protocols like Aetherium, where a lot of investors that actually own Aetherium. In fact, it's largely owned by institutional investors today. So we think we've created one of the most fair tokenomics out there in the market. And we welcome dialogue around that point, when it comes to, you know, our community, we actually had a very thoughtful perspective there as well. And we acted with a deep amount of intention. We've worked together with the Aptus Foundation, which is an independent entity, to create an opportunity for the community through things like ecosystem grants, and an ecosystem fund, our 51% of tokens as you as you call that are available for the community. And that's not us, that are, you know, that could be someone like Jacqueline that wants to go out and build a product and get it out in the market and doesn't have to go out and compete for venture capital funds. Instead, you can get a grant to get your project off the ground in a much faster way, instead of going out and working on a different skill, venture funding raises. And so we thought about all these really important things, going back to just thinking about the people, even putting myself in my old shoes of being a founder, where we think tokens are very valuable component and token omics should be taking incredibly seriously. And so we're going to be sharing more information on that soon in detail. And so I'll definitely share that with you and your audiences while Jacqueline. Okay, well, we


Jacquelyn Melinek  6:16  

are looking forward to that one. And it took Aptos and the team about four years to develop. And of course, you can't time market cycles. Right now, the market isn't very hot. But what is it kind of like for you guys to be launching in a bear market? And how was the team adjusted to operating in those current conditions?


Mo Shaikh  6:34  

I would took my hat off to anyone that can time markets. In fact, you're absolutely right, it's very difficult to do that. And you have to be very clear, we did think about what the market would look like when we were launching. But we didn't really think about it in a way as an input to our decision making. And when we launch our goal, as you mentioned, we've been building this technology for four and a half years at this point now, and we wanted to get it out in the hands of others. Our team has dedicated countless hours and years to making sure this technology is hardened for billions of people. So you know whether it was a rosy market, or one that was a little bit more difficult. There's not much we can control there, we wanted our technology in the hands of people. And we thought, in fact, a bear market is a perfect opportunity to showcase. This is what real technology should look like. Instead of having to operate in an environment where there tends to be too much froth or noise, it's actually worked quite well for us people have been paying attention, builders have been looking for new places to build because of the challenges that they've seen on existing protocols and ecosystems. And we welcome everyone you know, we don't think about oh, you're coming from ecosystem X or Y, we understand that you've learned very valuable lessons along your journey. I myself, I've learned a lot from the Ethereum ecosystem in early days. And so we encourage folks to think about in this bear market to go back to first principles. And we're very proud that Aptos is one of those platforms and and places that you can revisit those first principles.


Jacquelyn Melinek  7:58  

Yeah. Well, I'm glad you brought up people building on App Das, because my next question for you is, Who are these people? And what can they do on other layer ones that brought them to your blockchain? And what's the differentiating factors here?


Mo Shaikh  8:11  

So I guess I can start with maybe some of the differentiating factors. What app toss brings to the market is something really powerful with things like move, which is a new smart contract programming language, it's very similar to something like rust. So if you're familiar with rust, you'll fit right into using move. But what move does is it gives you a assurances, as an engineer, as a developer, that your smart contracts are going to be much safer than they would be if they were in solidity or in you know, rust, potentially. And we have something called a move prover a formal verification engine that if you know, Jacqueline, and Moe worked on a smart contract together, before it goes out into the environment, it's tested. And you know, we have an opportunity to fix things and therefore making the smart contract, just a safer, smart contract for many folks to engage with and the appetites ecosystem. So that's a completely new technology that's now live and people have been loving move. We've heard folks say it's like chewing time candy, which we love, love to hear app tosses performance, we've been running some internal tests. And we've seen some amazing numbers, step order change in in terms of looking at the previous generation of blockchains, folks have now seen over 1000s of transactions processing on our network per second. And if you look at where we are with that performance, and near one second or sub second latency, depending on on volume of the network, but what that basically means is, if you are Visa or MasterCard processing around 1700 transactions per second, like Visa does, we're now starting to rival those networks. And that's very interesting. It's going to change the way we think about money and economic value just being transferred across the globe. I'm a Pakistani immigrant and you know, I'm very fortunate to be able to send money back home at times. And you know, if you think about money and how long it takes for it to make its way over and the middle parties that are involved, we can now send money faster than And someone like Western Union someone like Visa, and bring more money back to the people that are actually using that money that need that money, we can do the same thing with things like gaming. And so if you wanted to, you know, have an avatar or a really cool, maybe pair of glasses, within a video game skin, you can share those assets within a game. So this transitions to the next question in terms of who are building, we're seeing people build a new generation of applications and web three, that rival web two applications now. So you can now build new financial components that you were never able to build a for. And we're starting to see that in some of the defy stuff that's come out in the market gaming, in our partnership and relationship with someone like and pixel is an interesting one to also think about. They were sitting on the sidelines studying all the different blockchains for a very long time, they looked at layer one and layer twos. And when they saw app toss, they knew instantly, that was the only place where they can bring 10 million users safely. And that's a lot, right. And we don't even see 10 million users if you combine all the blockchains out there in the world today. So with someone like meta pixel, who we're working with, which is a very large triple A gaming studio, based in Korea, they're building their first triple A game in web three on top of Aptos. And that's really cool to see. But at the same time, you know, not only are we working with some large companies like megapixel, we're also working with folks like Google, and I can talk a little bit about that. But we're also working with some of the new startups in the space and some of the web three companies that have been building for a long time. And that momentum is starting to pick up across gaming across payments across finance, and even across social as well. And today, you know, although we've only been live for three months, we've already seen 3 million cumulative addresses on our network, which is just exponential growth relative to many of the other networks out there in the market today. Yeah. And


Jacquelyn Melinek  11:47  

then going off of that, what are your plans for growing business development this year? Whether it be through that partnership with Google or new partnerships, projects, or something else to expand app tosses ecosystem? Can you tell me a little bit about that?


Mo Shaikh  11:58  

Yeah, the way we think about 2023, it's really a year of intention for us. I think it's a year of intention for the entire industry. We certainly apply that to the way we think about partners. And you know, when you think about partners in the web, through community, we have an amazing amount of interest projects like life period that have been building on Ethereum for a long time are now starting to pay attention to Atlassian, we have a relationship with them, where they're going to be building decentralized streaming services on top of App toss and can do it in a much more efficient way. So that we're going to see a new evolution in the web, three existing products have been out in market, and that's going to really push web three forward. At the same time, you know, someone like Google who was sitting on the sidelines, potentially, is really diving in in a big way. And we're excited to have a partnership with them, where things like BigQuery, that, you know, support the internet today and helps index what's going on in the world. And organize that information is now going to be organized and available for developers and users that are building on top of blockchain that's new, that stuff that we have not seen in web three before. And that's going to help support large enterprises coming in, in a big way, as well. And you know, we're very fortunate to have, again, relationships with the pay pals of the world where we're excited to see what they're building. And they're coming in and making some pretty interesting product announcements as well. And so when we think about our relationships with those folks, it's really great to see that they feel comfortable bringing their millions of users to our network, something that they could not do on other solutions or other networks out there in the world today. And that's been evidenced to, right like you've seen Starbucks come out with their announcement, and I'm looking forward to seeing what they build. But I'm also excited to see what someone like Starbucks could build on top of bag toss, things that they couldn't do on existing protocols out there today.


Jacquelyn Melinek  13:41  

Right? Going back to what we were talking about with the builders, on App toss, what do you think is going to be built this year compared to last year, even? You know, the three months since launching? I think it's been roughly both for app toss and by developers on your platform? What are you observing there? And like which areas do you think will take off for 2023?


Mo Shaikh  14:00  

Yeah, I talked about gaming for very quickly. And I think this is a very big year for gaming for app toss. And for web three, I talked about in pixel, so I won't go deep there. But according to an analysis from Bain Consulting Group, gamers of the near future are going to expect ability to move seamlessly between gameplay, social and commerce, in both physical and virtual worlds. It sounds like a bunch of jargon put together but if you kind of start to break those things down, they're basically making a claim that, you know, when you're in a fortnight environment, like I don't know, if I'm playing a game, or if I'm hanging out with Jacqueline and socializing, and I'm buying assets at the same time, all those things are happening together. And by the way, you know, pull ahead and announcement for just this where, you know, if I bought an asset in fortnight, I could also buy that same asset in the real world. And so it's gonna get really funky in 2023. So, you know, when I think about all those things being tied together in that example, I'm really excited about not only continuing to move gaming forward, but I think social is going to change the way we communicate. As a human society is evolving as we know it, I mean, think about where COVID lead us right now we become professionals and having conversations over zoom. And that's demonstrated immense amount of neuroplasticity in the in the human mind. And we're gonna see a lot of that now play together across all these different dynamics and web three and blockchains play a really critical role in that. Let's talk a little bit about what that looks like for social social is going through a very interesting time, I was just kind of having conversation with a colleague yesterday, where, you know, if you think about Facebook, it's been around for two decades. So we've gotten used to communicating on these types of platforms like Facebook, blue, and Instagram, and, you know, even tick tock and that's been interesting, but they don't work perfectly, you know, the creators, although some of them may be benefiting. It's really only the major influencers that stand to benefit. And that's done by design platforms tend to create these walled gardens. However, in order for that world to come together, where social and gaming and commerce all work seamlessly across different platforms, we need open social graphs to exist. We need, you know, to challenge the way we thought about social platforms as they have operated in the in the last two decades. And so I think, you know, in the future products that will be successful are going to be the ones that evolved and create that open connectivity, versus ones that don't do a good job and don't evolve and take a more open approach.


Jacquelyn Melinek  16:18  

When you're thinking about the billions of people not in the crypto space, what can be done to bring them in? Is their incentive right now to get into mainstream audiences, whether that be through gaming or something else? Or is that a ladder plan later plan, not ladder later plan for Aptos?


Mo Shaikh  16:36  

It's a plan. That's actually right now, in fact, gaming is a great point that you just call it out, right? Like, ideally, you know, we don't have to go through a Chrome extension to buy an asset, and then a complicated way of getting that asset, and then moving it over to a game. Ideally, you can do it directly in a game, and close to 1/3 of the world's population plays games already. And so that if you can figure out a way to solve that, you probably get billions of people buying digital assets, or NF T's without even knowing that they're buying NF Ts. I mean, how many people think about they're using TCPIP. Today, when they're sending an iMessage, or using an app on their mobile phone? Not many. And that's a good thing. If people are worried about what blockchain they're using, that's not the world that we want to live in. People don't actually think about, you know, what's the last time you've logged on to a commerce website, bought a pair of Nikes? And said, oh, you know, that was an amazing cloud experience. Number. I mean, you just use products seamlessly, and you enjoy that experience. And we want blockchain to be able to do just that. And that's the view that we have to bring billions on into web three in a way that they don't even realize they're using it.


Jacquelyn Melinek  17:42  

Yeah. And thinking I'm more crypto focus world, how is AptDeco is planning to interact with other blockchains as the space is operating in a pretty multi chain world right now? How does the chain plan to do that and ensure that it's, you know, safe and secure on your side for your users?


Mo Shaikh  17:57  

I mean, I love that you said it's a multi chain world, because a lot of folks I think often say it's going to be a multi chain future. It is a multi chain president, you're absolutely right. Again, our view is we're excited about everyone that has been building in this space for a very long time. And we want them to continue to building despite whatever market headwinds we're facing. And in fact, we want to work very closely together with different communities, I had opportunity to connect with the youth community the other day. And I love the inspiration that some of those folks have. And our builders have amazing energy on App toss. And they're building things that I didn't even imagine could exist in web three. And you can do that because of what app toss brings through things like parallel processing and move that are unique to our blockchain. But as we think about what the future could potentially look like, and those products, they're going to be shaping a very different environment for us to engage together in this year. And so I'm really looking forward to seeing some of those products now start to come to life.


Jacquelyn Melinek  18:51  

Right. And Aptos is based in California in the US, right? That's right. And so rolling off the theme of security is a similarly talked about one of regulation, how are you ensuring that the blockchain is operating within the regulatory frameworks that exists today? And will it be able to make it over that so to speak pump when new regulations eventually come in the US?


Mo Shaikh  19:13  

Yeah, it's interesting point. And I think everyone, including ourselves, are paying attention to what's happening in the market. You've seen regulators across the globe, pay attention. And, yeah, we actually see that as a positive sign, if there are things that you can clarify. People will know how to act and behave. And unfortunately, that correction has come through a very different set of events. And we're obviously very happy to see some bad actors. The displace, one thing I think that's really important is, you know, public sector often it moves at a different pace and moves with a very different set of incentives and very important ones paying attention to what's valuable, and what's valuable for the people that those public entities serve. So it's very important to protect those people but at the same time, it's income. terribly important to not thort innovation, innovation is hard to do, you're pushing the boundaries in ways that people may not necessarily understand. We owe it to ourselves as a as a space as a community, as an industry to help educate as much as we can. And I think you have folks like a16z, that are doing a good job of that you have builders in this space that are doing a good job of that. And you know, from our side, we welcome that dialogue and are more than happy to do our fair share of, of education that's required to make sure when regulation does come out, or if it comes out that it's done properly. And it does not impact innovation, because we are trying to push things forward. As a society across the globe, we do hope that all those things are taken into account, when we are also considering to protect the people that use this technology.


Jacquelyn Melinek  20:45  

To wrap things up. Something I like to ask founders, especially new ones is where do you see this all going in the long term? And what do you want app to us to be known for both now and say, in the next five to 10 years,


Mo Shaikh  20:57  

five years or 10 years, I, you know,


Jacquelyn Melinek  21:01  

I'm giving you a broad range.


Mo Shaikh  21:03  

I appreciate that. I mean, in kind of five to 10 years time, going back to just how we see the world today at what might seem like such a distant past, for many of us, by the way is you know, think about satellites, being put up into space to to be able to communicate with loved ones across the globe, just pick up the phone and have a conversation with them. That's something that didn't work seamlessly many years ago. Now it works amazing, right? I could be in another part of this world having this conversation with you with real time video, and I can pick up on it and pick up on amazing cues and have such a dynamic discussion. And in real time, you know, fax machines may have seemed like an amazing breakthrough innovation at some point as well. And so in 10 years from now, you know, it's hard to understand and imagine what communication may look like what engagement may look like how sharing value across the world may look like. But what I would love to see as a builder in this space for such a long time is us being a very important part no different than the satellites are no different than the telephone lines are in making an iPhone work or a zoom call work and sending you know economic value across the world, whether that's through things like NF T's or global currencies. And so that would be a just a very aspirational and inspirational thing for us to strive for as an industry. And we're very proud of laptops to be able to do that.


Jacquelyn Melinek  22:25  

Well, we'll see what happens then. Right? Yeah, well, great. Again, that was mo che co founder and CEO of app toss. Mo, thanks so much for coming on chain reaction. And thanks to everyone for listening in. Thank you so much. We'll be back every other week with interviews with top players in the crypto ecosystem. Catch us on Thursdays for interviews with experts in the web 3d space. You could keep up with us on Spotify, Apple Music or your favorite pod platform and subscribe to our companion newsletter also called chain reaction. Links to the newsletter and the stories we talked about can be found in our show notes and be sure to follow us at Chang underscore at reaction on Twitter. Chain Reaction is hosted by myself and produced by Yashad Kulkarni and Maggie Stamets with editing by Cal Bryce Durbin is our Illustrator Alyssa stringer leads audience development and Henry pic of it manages TechCrunch his audio products. Thanks for listening. See you next time.