Sandeep Nailwal told us how L2 Scaling works on Matic and why Matic Network is an ideal platform for DeFi DApps.
Hello! What’s your background, and what are you working on?
Thank you for having me, it’s a pleasure to speak with you! As COO of Matic Network, I am based out of India with our tech teams. Personally, I have been involved with many tech businesses since my very early days. I joke that scalability is my only passion, be it in scaling businesses or blockchains, but I am an all-round software and business buff.
My previous startup, Scopeweaver (a B2B services marketplace — think Alibaba for services) was doing well, but given the focus on services, it was not scaling as it needed to. I began to look into emerging tech on the side, particularly AI, machine learning, and blockchain. Needless to say, blockchain — especially Bitcoin — caught my attention, and I’ve been fully down the rabbit hole ever since. I’ve noticed the “oh wow, this is big” moment I had is pretty common across people who study Bitcoin, and it has been exciting to be among those building in the space!
I found my calling in the blockchain space in the scalability arena, and I co-founded Matic Network alongside Jaynti and Anurag and that’s what I’m working on to this day! The whole Matic team is passionate about decentralization and better blockchain-based products using better UI/UX and usability. The current decentralized ecosystem lacks usability and convenience - decentralized transactions are slow, expensive and complex. The blockchain environment as it stands today is therefore unable to facilitate mainstream-level Dapps. Solving this problem is our mission.
Essentially, Matic is a Layer 2 scaling solution that achieves scale by utilizing sidechains for off-chain computation while ensuring asset security using the Plasma framework and a decentralized network of Proof-of-Stake (PoS) validators. Matic aims to be the de-facto platform on which developers will deploy and run decentralized applications.
Where did the idea for Matic Network originate? Can you tell us about your journey so far?
Great question! It’s been a busy journey so far to say the least! The Matic team has actually been active in the blockchain space long before our public surfacing as Matic Network – we’ve been making valuable contributions to the Ethereum ecosystem alongside Ethereum’s best developers for a long time. This includes working on implementations of Plasma MVP, the WalletConnect protocol (which allows users to access Dapps in a secure and user friendly way), and the widely-used Dagger event notification engine.
We could see the inherent challenges of scaling in the current blockchain environment and envisioned a method of Layer 2 scaling, using an adapted version of the Plasma framework, that could effectively overcome blockchain’s scalability limitations and provide the infrastructure to facilitate widespread mainstream adoption of decentralized applications. That vision was Matic Network, and we’ve been on our journey to scale the Ethereum ecosystem and beyond ever since. We were honoured to receive Seed Round funding from Coinbase Ventures, and to have held our IEO on Binance as part of the Binance Launchpad program.
We’ve already made huge progress on our journey so far. In terms of development, we previously launched our Testnet which demonstrated impressive performance capabilities of 6-10K TPS - with a single sidechain theoretically capable of achieving 65K TPS - and we are thrilled to have previously launched our Alpha-Mainnet and recently launched our Beta-Mainnet! Our flagship product, the Matic Wallet, has been migrated onto our Beta-Mainnet and is gaining traction daily due to the lightning-fast transactional capabilities and superb UX/UI – which has been a main focus of ours. You can see the Wallet in action at the ETHIndia DevLounge here: https://youtu.be/01WnOCSqTmU
We are consistently onboarding Dapps to our network due to our ability to provide high throughput, low transaction fees and tools to make blockchain development as seamless as possible. Many projects are already building on top of Matic, including Decentraland, Somnium Space, Tracy, Marble.cards, Incento, Chainbreakers, Springrole, CryptoControl, and Bet Protocol. These encompass all Dapp types including gaming, DeFi, gambling and beyond. More Dapps are onboarding every week.
Scaling is quite a competitive arena. What are your technical advantages over other solutions?
As the most pertinent problem facing blockchain today, it’s no surprise that a plethora of scaling solutions tackle the scalability conundrum each in their own way. Prominent scaling solutions which gathered some attention in 2017 were OmiseGO, Loom Network, Proof of Authority Network, Liquid Network, and Rootstock but only few of them actually were able to come out with Production ready systems. There are also a host of projects working on developing state channels to speed up the process of transacting on the blockchain- examples of which include Celer Network and Raiden.
We also view alternative blockchains such as EOS as ‘competitors’ in the sense that they are attempting to provide an answer to Ethereum’s scalability problem.
Current scaling endeavours offer only a partial solution due to limited functionality, poor user experience or their sacrificing of decentralization for the sake of performance. As a similar sidechain approach, let’s take Loom Network’s anticipated Plasma Chain as an example. Since Loom used Plasma Cash, there is no fungibility for the assets supported on the sidechains. Everything there is represented as an NFT/ERC721, meaning payments aren’t natively supported. Further, when utilizing an implementation of Plasma Cash block times will always be longer than those of Ethereum, since every block of the sidechain needs to be pushed to the main chain, while Matic uses checkpoints for 1-second block times. Due to these issues Loom has now moved away from Layer-2 play and are supporting a simple DPOS which hosts bridges to other chains.
Unlike other scaling solutions, Matic Network is committed to achieving massive scale with decentralization and security by utilizing Plasma MoreVP framework. Unhindered by functionality limitations and problems of centralization, Matic will be able to house a wide array of DApps on our infrastructure.
Matic chains are based on an account based EVM (inspired by Plasma MoreVP) and support ERC721 in addition to ERC20 tokens, along with asset swaps right out of the box. This makes Matic the go-to Layer2 platform for deploying Decentralized Finance (DeFi) applications in particular. As a general purpose platform, however, our infrastructure is capable of housing a limitless array of Dapp types, and we are keenly focused on gaming as well as welcoming of all dApps which stand to further the decentralized movement.
What is your opinion on DeFi? How is Matic planning on advancing the DeFi movement?
DeFi is a huge focus for Matic Network and is one area of the decentralized movement which we’re particularly excited about. Through a decentralized framework, a broad range of financial services and censorship-resistant applications can be made available to a far greater number of people than those who currently participate in the existing financial ecosystem. The fast settlement times, elimination of intermediaries, increased options for collateralization, and interoperability will enable a slew of custom-tailored financial products to be developed for a countless number of financial use cases, many of which are yet to be invented.
Our infrastructure makes Matic Network an ideal platform for DeFi DApps and we are thrilled to already be witnessing DeFi adoption on Matic. Matic side chains are based on an account based EVM (inspired by Plasma MoreVP) and support ERC721 in addition to ERC20 tokens, along with asset swaps right out of the box. This makes Matic Network the go-to platform for deploying Decentralized Finance (DeFi) applications in particular, including payment DApps, DEX’s, marketplaces, lending protocols etc.
Earlier this year, we played a prominent role in ETHIndia 2019, Asia’s biggest Ethereum hackathon, which included providing a DevLounge where attendees could experience DeFi adoption first-hand through a Dapp building on top of Matic Network. Attendees were able to use the Incento app to purchase food with MakerDAO’s DAI stablecoin and redeem beers using a custom token called Matic Beer token. We were thrilled to witness DeFi adoption in action on Matic Network. Many people don’t know that the now globally famous Defi Brand Instadapp also appeared in public as a participant of EthIndia.
You can see a video of that here.
Beyond the Borrowing and Lending aspects of Defi, Matic Network is also trying to pioneer some untapped avenues of DeFi. For example, Matic pioneered the Layer2 fast exits using NFT collaterlizations. More can be read here. Similarly we are working on open and decentralized microfinancing use cases like Chit Funds which are especially important for the developing world.
DeFi movement carries far-reaching disruptive potential for positive change in the way of increased financial freedom and opportunities for individuals worldwide, and one of Matic’s core aims is working to propel decentralized finance forward to make impactful DeFi solutions a reality.
Where do you see Matic in terms of goals and achievements in the next three years?
Three years is a lifetime in the crypto space, and we expect to be well positioned at the forefront of the global decentralized movement by that time – with incredible progress in all of our focus areas. Moving forward, we will continue to build out our expanding ecosystem of Dapps, forge valuable collaborative partnerships to accelerate the wider decentralized movement, and will double down on our efforts to spread awareness and education not only about Matic Network but also regarding the importance of blockchain technology and decentralization as a whole.
Matic intends to play a key role in the spearheading of India’s decentralized movement which we are already making huge strides in doing with efforts such as launching our Developer Support Program and organizing & attending regular hackathons to spread the word of blockchain and assist hackers with hands-on practical development. We believe it’s imperative that we position developers in the best way possible for them to build innovative solutions for the blockchain movement to reach its full potential.
We also aim to prove our superior scaling capabilities by becoming the go-to scaling solution for Dapps of all kinds, in terms of both building on our side chains and wider collaboration. Beyond demonstrating our technical advantages over other scaling solutions - which will become increasingly clear as we continue on our journey of development and adoption - Matic aims to differentiate itself from others by taking an active role in assisting in the development of projects within the Matic ecosystem and that of the wider overall space. To this end, we have already laid out our plans to assist up-and-coming blockchain innovators with financial, technical and development support through our Matic Ecosystem Initiative. High-performance fundraising on Matic Network is one part of the initiative, which Marlin Protocol and Cere Network are the first to take advantage of. We expect this fundraising on Matic Network to become increasingly popular over the next few years, and we already have many promising projects in the pipeline to take advantage of this.
Thus, in a few years we expect to have cemented our position at the forefront of not only India’s blockchain space, but also become a key player in the wider global decentralized movement. Our goal is to serve as more than simply a scaling solution, but as an entire global collaborative ecosystem of Dapps running on Matic Network which will become stronger together as the ecosystem expands. In three years’ time we expect this will have come to fruition in an incredible way - and we couldn’t be more excited to see this already begin to happen.