Welcome to epicenter the show which talks about the Technologies project and people are driving decentralization and the blockchain revolution, I'm Felix your host for this episode's today. We're speaking with fig co-founder of squid, router squid is a cross-shaped swap and liquidity routing protocol. Welcome fake to epicenter likes. Bill x-rays opinion. We generally start by like sort of going into what God's our guests into crypto. So would be interested to hear your background.
How you wound up in the space? Sure. So I studied medicine in University which very sounds very far from crypto is really interesting. It's a combination of like really complex systems and you get to work with people but it wasn't creative enough. I thought you don't want to be on the operating table and your surgeon comes in. And he says, and this great idea
last night. I'm going to try out on you and you really want your your doctor to be doing something evidence-based, following, the protocol link word for word. And so I wanted to try the things, I left Madison and I went to New York and slept on captures to make it work. And also started to learn to code and worked as a ux designer as well. So I worked as a developer and designer for different startups for a while. And I was musician as well during that time.
And one of the couches that I slept on was of this like Giga genius, friend of mine, who works as an algorithmic Trader. And he Told me about markets and how he have all these Bots, like fighting each other in the market and buy the microsecond. I was just really fascinated by how similar that was the
medicine. It's this constantly changing system that you can't really solve this a like it's always moving and it's also you get these symptoms that are the result of the like wider wider world. In the case of markets been in the body. It's what have you been exposed to in your in your environment, your diet, whatever? So I got really interested in finance and got a job in traditional Finance, but while I got while I started that job, I also was getting to crypto.
So I just started seeing these inefficiencies in my day job which could be automated by Krypton. I just thought I had to be the future or at least part of the future and crypto is also Super Creative. It was really complex system so it's just perfect and quit my job and traditional Finance to go. Crypto full-time, and my first year out, I spent a lot of time traveling and got really interested in interoperability.
I spent a lot of the traveling was particularly to go visit leaders in the space people who had designed some form of interoperability protocol consensus protocol and trying to build up an understanding of these things. And after all of that traveling, I really found my axle has vision and their Founders to be the most impressive and the most compelling for me. So I decided at that point as well, the squid we had met my co-founders and squid team has
started building. So we all decided to commit to axler and start building on the protocol and here we are. That's awesome. Yeah, that's a cool history. I think glad that you didn't become the next Elizabeth Holmes and made a Terran house, like Yeah, it's a quite interesting. How the yeah, did I still like large systems? I guess, generally the this coordination problems and how you can end up in crypto from different angles. This is quite interesting. So yeah, I guess you're
mentioned already. Axl are, and then a bunch of things that we definitely want to talk about. But maybe I initially we can just focus on squid itself and like maybe trying to approach it from the angle of, you know what's what sort of the problem that you saw that that squid is in the end solving? Yes. Sure. So like squid came out of The experience. We were all having Indie Fest summer so Indie Fest. Summer back in 2020. You had ethereum was starting to get product.
Would defy was getting product Market fit. And the theory was getting a lot of use gas prices were spiking. So and also these new L ones like Avalanche and polygons. we're popping up, roll up, started popping up and every time you needed to go and try a new application on one of these ecosystems, you had to Do all these things to get there, so we needed to bridge your funs over. Maybe need to get U STC across. You need to get gas because you couldn't use this new a new
application. If you didn't have gas in the blockchain, And to do that, you had to visit a bunch of new websites. You haven't had to click up to 20 30 times and in crypto every time you try something new, it's really scary because you don't know if it's a scam website for one, but you don't have the protocols safe and just the user experience in general was, it was atrocious.
We thought, and also we're interested in, we're aware of axler and just getting more and more bullish on interoperability generally because just seemed like, there was no other option that these. He's Roll-Ups of blockchains would have to form some kind of internet. And then Senator blockchains the same vision that because Mars
has had. And so we decided to build something in interoperability and we started with the most basic primitive you can have in in really any crypto application, which is sending money somewhere and in order to do that you actually need to swap and so squid is Primarily like the, the core feature is a swap which you can say go from native USD, see, on one chain to Native viewers to see on another, or you can swap to the gas token, insult to anything.
And then once we have that swap, we also build the architecture so it's fully generalizable then you can do payments across chain so you can do. So you have you SEC on Avalanche and you want to buy an fto on ethereum? You're able to swap your USD, see on our be launched into route. Teeth and ethereum and then purchase then ft and send it to your account in the same transaction. So we want one, click for
everything. You should be able to do any action, the cross chain that you would have been able to do single chain. And also, we've just brought in everything is an under 20 seconds, as well. Something with, maybe we talk about that later, but time is a, is something in Christian, which really hinders you acts. It's a often 20 minutes to do a swap. And we we've done some amazing things to bring it down. Really exciting about that. Yeah, awesome. Yeah, that's definitely get into dead.
So I guess generally you is it fair to say that you are sort of focusing on the layer of like the user experience more like actually and maybe the developer experience to versus like you know starting to build like an entire interoperability protocol which I guess or like a bridge system which It feels like a lot of the other like systems that do bridging try to do and then maybe that ends up being like too much work and you're sort of
ability to rely on XLR. For that part is is what enables you to like, improve mostly on the ux. Is that is that fair? Yeah, I think that that's really fast. That's One of the luckiest things that's happened to us. So the best decisions is to be, we've been able to focus completely on the developer experience and user experience layer and axilla can focus purely on the infrastructure, security and openness at their
protocol. So we have this really symbiotic relationship with them where we both have the same incentives. Real out, we're both moving the same direction but have much more focused. Product strategies than maybe some of our competitors have and that allows us to, to reduce the scope. And really, the whole thing in question is about reducing complexity, when I feel a lot of cross chain models actually increasing complexity. We're really lucky to be partnered with Axl are so that
we can. We can just focus on very simple as little things as possible and make Mike really reliably and quickly something. And is it like that Axl are that in themselves? Like, I guess. How is the difference between like, trying to like use Excel are yourself? First is like using squid is, is that just that extra, maybe doesn't have that focus on ux or, or you just like, sort of you are more expert, you have
more expertise. They're essentially, is that what it is or quickly axle are as blockchain. It's Cosmos chain, which connects other blockchains. So, Every message that you want to send between the Avalanche and polygon or aetherium, and I will trim or the cosmos and etherium. Now, Is validated and verified by the validator set that is on the axle blockchain. So it's a similar method to proof of steak. You have 66 percent of the validated, his vote that
something is valid. And once they've done that, then you can send a message across chains and what Axl, our ships with is the ability to send any message across chain. So you can call any contract. And you can also send Value across chain. You can Bridge tokens. But if you want to do something as a user, that's quite limited you, you need to take a lot of steps. So you might need to, I'll go into how Squid Works. This is what we're doing behind the scenes.
So you have your CC on, polygon anyone, to get you SC, see an avalanche in order to do it without squid, you'd need to swap eur/usd, see on polygon into axilla u.s. DC which is Abridged form of usec on ethereum.
Then you'd go to acts as website and Bridge, the axle, you FCC to I think it was Avalanche were going to and then you'd go to a swap protocol and you swap actually your CC for Native you SC. See an avalanche and What squid does is it has rapper contracts around the axilla Gateway. It's called acts like a Gateway contracts, which allow you to
automate the whole process. So you can do the swap the bridge in the Swap. All in one click and you can also add on more functions that we certainly banging of teas and getting into staking position, you might not. So I think axilla that's a killer is focused on the core security and the ability to maintain this fully generalizable messaging and That connecting two more chains. They're building really amazing in relay infrastructure. But squid is more the application layer and the
developer experience layout. Where if you want to add cross chains, your does a lot of things you need to do like paying gas across chain. You need to coordinate contracts on multiple chains, that once you need to be able to tell the user, if this transaction is complete or not. Because that's not actually quite not that simple. In crust chain. You you have to realize that it's click complete on the source chain complete on our slide and then on the destination chain and report
that and user-friendly way. And so squid solving all of those issues around the developer experience and the communication of of crust chain which axler isn't focusing on its much. That's right, that's what we call. So you are essentially building a bunch of these rapper contracts around Different like dex's on the different chains. For example, how do you I guess, you know, choose Which which taxes to support or yeah. What, what it, what to build in general?
I guess, because I guess there's a lot, right? You also said like, nft buying do you already like ask you users, do you see like I guess generally where the tibialis or something like that? How do you how do you go about that? Yeah. It's been it's been really simple actually. The deck says We have connected to Every Chain, which actually supports, which is most of the evm chains, most of the major ones. And then we've partnered with really, as many taxes, we can on each chain.
So we have Partnerships with the main decks on every chain now except aetherium. We got pancakes while, but I think is going public today so I can talk about it polygon. We've got quick swap still as well from Moonbeam who baseball conselho we've got so we just made Partnerships with the these decks Has and the partnership. There is Will integrate your contracts so that our Christian swept volume routes through your protocol and you get volume from it.
And in return, you integrate our front front end widget so that you can upgrade your swap interface to have Christian swaps as well. So, we just gone on a Integrations Bree getting training integrate as many taxes as possible. And then in terms of The Wider use cases, I kind of tease and stacking widgets. I think for now it makes more sense for the partners to use our SDK to build a specific application with squid.
And we've got a lot of cool developer tools for that but because every, I think it's less feasible for us to build fully generic tools for every single application out there. Like at some point, we have to make Decision to have a a tool which the partner can go and customize themselves. So yeah, that's why we're currently shipping.
We've got tools for buying and I've teased tools are staking tools for depositing across chain and the plan with those is to have more of a Shopify experience, where you go to the squid website, and you've got this application on product, you want to sell 1/2 people to be able to buy with crypto, and you take a developer tools and plug in a little bit of your code, to make a custom. And then you'll be able to buy by across change, using any token in your mother, Right at
the super cool. So you re mentioned right, there's this widget, there is a bunch of these customization ability. There's SDK API is so these, These are sort of the products you you have, can you let go a bit into them and maybe? Yeah. Who are you, sir? I guess these are essentially the exes or the apps on the other chains, Right? Said, correct. The main products we have the API which is running, a is we've got a back-end behind it and this The API is able to generate call data for.
So generate a transaction which the user can sign to do a Christian swap to do a purchase. And it also allows you to track the status of these transactions across chain. So, that's the core core feature. And then around that, we have an SDK, which makes it really easy to build front-end apps and and then, these front-end widgets, which are react components or iframes and Those are for front-end Integrations if you want to just customize and put into website as fast as possible.
That's your option and the users of phase, the API is mostly used by wallets. So we have integrated into XD files coming live soon and a few of the names. I can't save it. Some really big wallets, we will be powering crust chain transfers and swaps inside the wallet. So you never have to leave. You can This is a huge ux issue, right? You you go into your wallet and someone who's not used to
crypto. They says, they have a vax B&B and mattock and then want to swap them, but they can't because they're all on different block chains and to someone who doesn't know about crypto that would make any sense. So which it doesn't shouldn't doesn't have to make sense. So now that they've integrated squid, so you be able to swap between any token on in your wallet without even knowing that That they're on different blockchains. That's something we're really excited about.
Is it constructing this obstructing? The chainsaw. Yeah, that's that's great. And congrats on the Partnerships we said already right? The district or contract is different Texas. Now, I guess like squid is also sort of a decks aggregator in that sense, where you're trying to find, basically the optimal price between these routes. Can you talk a little bit about how how you approach that sort of problem is this? Something you're like, also like, how much are you focusing
on that? Like I guess optimizing the price that you Surskit. So we have a routing back end, which is for every request, comparing all the taxes that were supported that we support across chains and finding the best route to route through them. And we're also doing that across chain as well and we'll be building out their capability. Especially as we support the cosmos with dex's like osmosis into ality and present. You'll be able to route your liquidity through a cross chain.
The Decks that has the best price. So it's not just the best X is within a chain, but the best chain to go to do your swap in this is like a big frame shift. They think we're the application, specific blockchain thesis. I guess, like, takes finally starts to take effect where you have chains. Like as most of us who have optimized entirely for swapping, and they should be able to out-compete a lot of other
decks. And and so if they can, if they have tools like squid to effectively compare compare them to other dex's, then we can, you know, they can compete in the in the way that you could system for for swap volume. And we'll be doing that as well were close to matching costumes. Now that's awesome. Yeah, that's also equal to 0.
Basically, what you're saying is because like if you swap who probably also paying gas fees and, you know, like these other costs that essentially, maybe an AB chain can optimize more and then in the end, your prize might be better than even if there's like, let's say less liquidity on osmosis, for a certain period and only theorem, it might still be cheaper for you to go through that and then squared is able to optimize from that Dimension as well. Yeah, exactly.
You got gas phase, definitely been consideration like in Christian generally. Yeah, but you've also got Mev. So these are chains, like osmosis in Duality are able to optimize their consensus layer specifically so that you can do an Arbitrage. After each swap. For example, as Moses has the predator of module and truly have some really amazing things that building you're able to do things that wouldn't be possible.
And in a general evm, Decks and we can hopefully we're hoping to get some kind of revenue from sharing the the Mev from the swaps that we're out through those taxes. And it also means we can get better prices because the Mev, which is captured goes back to the user at the end of the day as well. Riser. So you're thinking that like squid itself, would capture some, some of the movie essentially.
And then you would receive Distributors that correct or, yeah, I think that's an option for sure. Also, got other other providers medium world. We have back running Solutions, so you're able to be able to do a background in Arbitrage behind a nice walk on the evm, almost Ups and the user still gets as good execution as they can. But the Arbitrage which is created Mev, which is created, after that transaction can be returned back to them.
So it's one of the ways that we're looking at getting revenue for squid, but also even just improving processes for the for the users. Right there. That's quite interesting. So I guess you had. I was also something that I definitely wanted to get into. Maybe we're given your like sort of this cross chain infrastructure and like Crossing enemy V. I guess also like a big topic, where a lot of people expect. Yeah. They are to be a big Market
since I guess. You know, what many on the main chains you have like a sort of flash boards and I guess somewhat solved maybe a bit the, some of the issues that I'm ABS, but it gets very complex in the Christian world. So yeah, I guess I was wondering also is squid-like. Something wear. Yeah, people like Searchers maybe go to like actually, you know, realize cross chain Mev, but or also, I guess. Yeah. You know your approach. So so yeah.
What is this state? I guess right now or like, how do you expect it to be too user is quit more? Just for, I don't know. The Traders. Are the people that like, by the totals, like, literally the users and versus like, you know, like some sophisticated market makers or something and, and they would I think so that me being an evening with the crushing space is super early.
I think we're just working out how to transfer tokens across chain effectively and reliably, let alone making that complex like risky trades and across different Chains. It's still super early, I think and not the front of mind right now. I think, you know, I really enjoy reading about Mev and understanding it and there was a lot of really Concerning things, that could happen to the crypto
gifts from generally. If you start getting cross chain, Mev, you start getting centralization of validator sets, and you get potentially a lot of the Cross chain systems could start breaking down, but I think that's a long way away. Realistically something interesting. I've been thinking recently with quick squid and Mev is around intense. And so there's no who's been who
of your listeners of, right? This but an intent is essential to the idea that you can express what you want and you don't express how it happens and then essentially the market just gets it done for you. It's almost like taskrabbit for for General compute on blockchains and that's essentially what squid is doing already.
We have an API which lets you do anything across chain you, tell us that then we have this big backhand with massive routing infrastructure which just works out the best route and combines everything into one tiny package and you can get it done. So I think what we're building is actually really suited for that future with ym, Evie's starts to become how things
happen across chain. We've said, we're essentially building a solver for intense and currently it's exposed by an API and you go to the front end and use the API to communicate what you want. But maybe in the future, they'll be an intent Market where you communicate what you want there and then squid can be one of these. So Overs, that is fulfilling orders that requiring question transactions. Yeah, that's quite interesting.
And I guess you were so right now, the way it works, like you are essentially paying the axle are feasts for the passing like, essentially to the XLR validators. And and then that is sort of taking into account for the swaps and what not? And then on top you're thinking, I guess, yeah, maybe going a bit into this business model idea. What how the squid-like generate money?
Is it like I guess You know what sort of the options is it like you know, Madam asked you add like some sort of fee on top and or this Mev ideas are is there anything else that you can think of or is there also like some sort of additional thing you have to pay taxes hours? It is essentially just these these fees that XLR is charging or is there like some more symbiotic thing between Excellence, quit the died.
So the squid doesn't actually pay any fees to accelerates the always the user and Currently, everything is just gas phase. So there's no no phase that actually taken out by either of us, but I think we're really fortunate as a crypto project in that. Our job is to route a lot of volume and people trade virus will be trading a lot virus. So there's a very simple business model.
You don't have to get into crazy token omics, just you just charge some basis points and we don't have media plans to do that but I think it's a pretty tried-and-true business model that we might take out something, which we've had a lot of demand for is a lot of our partners are in this crypto black hole, where you don't know how to charge fees and they
integrate squid. And they're like, oh, this is a way we can, finally charge fees because people are trading a lot in going in and out of our platform by a squid. So we have referral, we have not referral fees but essentially the partner will be able to charge a fee and then we'll take a portion of that that is going to happen. That's being built right now. Mev, I think there's room for that. That's how some of the Architects. Aggregators business models work
with back running. And I think the last one is Imagine gasps earlier and we don't charge anything on gas, but there could be fees on being able to provide really
efficient, gas prices. So being able to predict what the gas price will be in the future or at least taking some risk for that and being able to just guarantee a price for the use and take a cut because of that it's currently it's the gas experience and different blockchains is really variable and Not know very good user experience. Right, right. Another extension day, a dad? That's quite interesting. And I do agree like the business model. Probably relatively simple.
If you have the volume then I guess you don't need to like overcomplicated. Yeah. I think that's that's quite cool and I guess maybe going back a little bit to the XLR choice so as you mentioned like is there is there some chance of you guys like adopting multiple message passing like protocol. All's I guess one could think that maybe you know, some is cheaper or like it helps you to like even get a better price or yeah. How are you thinking about that? I guess currently.
It seems like quite, you know, you do it. Axel are mostly. Yeah. Maybe you can expand a little bit on your thinking there that
would be interesting. I mentioned the benefits earlier why I've having one vertical really gives us a lot of advantages, we get to focus entirely on what we're doing and it reduces the complexity in that system so we can ship faster but we had always committed to integrating CCT P which is circles transfer protocol and the axilla team have also been working with circle and we'll be integrating CTP so that whenever It's possible to do a do a cross
chain swap fire. See, CTP will use that if it's cheaper, is the or potentially, if it's if it's fast enough as well, because with access to everything we can, we can do everything in under 20 seconds and CCP them may not be the
case. So we'll be integrating that whereas we're integrating ABC which is you know, we don't necessarily see it as a competitor to our Cloud, but it's part of Acts tires and is a cosmos chain and it's Connected to the entire Cosmos via ABC so will be web be shipping this very soon but you'll be able to swap any token between any chains within the cosmos and also between the cosmos and evm and so that has been technically a similar process.
We have to integrate it a different messaging protocol to be able to implement these swaps and transfers, but I think with interoperability protocols that there's less of of a reason to have multiple supported between the same two chains. Like, it's not really like the decks aggregation one old, where you, every new Chain could just having a couple of dads could for CUNY swapping to play at there and suddenly you've got
the 20 different dex's. So you have to have to aggregate them to be able to provide any tangible experience like any competitive experience but with messaging protocols, the core thing is actually just getting it done and getting it done really securely so we yeah we didn't want to compromise on that. I'm not I wouldn't be comfortable integrating the other urgent generalized messaging protocols When we named them just because of the security and centralization that they introduced.
And yeah we don't want to have the ground risk of potentially getting it being kind of a hack or even just yeah exposing how users to that. Ride ride ride. It makes a lot of sense. Cool. And maybe we can ya get a bit into like how this yeah we mentioned a bit of time Riders, quite important.
And in swabs, obviously you guys are very focused on the user experience and that's probably like I mean after the prize or maybe even on top of the prize, like the most important thing to like, you know, don't take so much time. How do you like optimize it how you were able to like do it in less than 20 seconds and I guess in general? How You improve that even further. Is that something that you working on with Axl are itself, or are you doing something there?
Or is it? Yeah. What is like the approach there now to just introduce the problem a little bit. So the cross chain experience a bridging and, and swapping is can be really slow.
So that you go to the website. You'll say I want to swap from say oh Bertram Heath to two, polygons mattock and you click Swap and then an animation appears we've On our website, we go this beautiful animate cute animations which we made but you'll sit there and you'll watch the animation of the 22 minutes and then the swap will go through and if you're a new user you don't you really don't know if it's worked or not or if you've got your money until that 22 minutes is over the user
experiences like is awful. And the reason for that is the is because of finality. So different blockchains of different finality times in the cosmos, everything is running on tender men. And so that it has Finality but in the theorem world theory mm main that has finality in about 16 minutes. I'll betray him has Works its adds up to about 22 minutes overall in polygon six minutes.
So all of these times that they're just far too long to have any Competitive Edge over by a web to if we want to have a system which is going to be used a lot like normal people. And the reason finality is important in crust chain is that if the bridge is going to give you money on the destination chain, the bridge needs to be sure that it's received money on
this was chain. So it's only ones that the payment that's received on the source chain is finalized that it can credit you money on the on the destination chain. And so that's why we have these 20-minute legs with swaps and squared. And we worked on this with axilla. They've built a lot of the tech but we the the The architecture is, you have another rapper contract between squid and axilla, which essentially allows a service provider to witness your Source chain transaction.
As soon as it's been included on the Chain before it's reached finality and then they can provide the bridged funds out of their own wallet and the destination chain and they can execute the exact payload which you've requested so, and they can prove that they've done exactly what the bridge would have done. In 15 minutes time and they register that against the contract.
So you get you get your Bridge funds, you get them executed however you want, maybe it's a swap and then 15 minutes later when the bridge funds come through, they get diverted over to the service providers to pay them back. So it's it's a bit like a loan which has been collateralized by a cross chain transaction. And if you can prove that you've loaned for this specific transaction then when that transaction comes through, get paid back and you can take a
premium over that. Right, that's that's quite cool. And that these service providers as a. This is like, you know, I don't know market makers. Or like, who are these users, like utilizing that. Is that like something like that. Yeah, right now, we're running late now. It's Laura. And it design has a lot of similarities to do this in 10 system that I told you.
Yeah, exactly. Yeah. So it's, it's very much like the user to It's on a chain somewhere that they want something that and then it just happens immediately. And then assert the service provider takes this. Yeah. So it is currently in about takes about 10 seconds on average up to 20 seconds down to like four seconds, which is totally insane, but we can get it down to basically
instantaneous. Because if you, if you sign the transaction and send it off to a Different to the relay Earth and the Relay can send both transactions on the source and destination of the same time. There's Definitely technicalities that come in when you start to do things like that, that's like really aggressive but I think we can in the future. Get the the transactions out times down to essentially, instantly across chain. There's no reason why you can't provide that service June.
Super excited about it's like we can acknowledge that that's quite big, right? I think that's You know, essentially also if you think of across the enemy V, I guess often the idea is that okay? How do I guarantee I guess the execution on both sides in like an atomic way. So I guess this infrastructure could sort of help you do that as well which might be quite a big use case. Cool yeah that's very cool that you guys are focusing.
And-and-and that I guess these are the risks they're taking is essentially just okay you get a pass. Paid a bit later when it actually arrives on your destination chain. But and you take like a small like I guess premium on that, right? That's what you said. Okay. Yeah. There's no there's no change in the security. So you never at risk of losing funds, but there's they can be that the service provider can decide not to fulfill that. So, maybe you have to wait the
full 20 minutes. If, if they break something up to Cat can service providers compete. Amongst each other with three in Decorah. Do we have to, like, choose one that like, will like execute this? Yeah, you can. Yeah, third, I think that's how we built this in minimum viable product of whom is this intense system, right? You, it's you declare an advanced, you pay one provider. You say, yeah. You pay them in advance.
So we've got, we've got the designs for opening it up and making it. So that any service provider can fulfill these transactions, but right now we're just, you know, it's it works really well. So, I'm doing that for now. Ride ride ride, a very pragmatic here and you're already working on a lot. So like, that's that's awesome. That's quite cool deck. Thanks that's, that's very interesting. Okay, and then, yeah, I think we probably got her a lot about like the basics.
I think, you know, maybe some anecdotes, you know? I the read your tweets or like I guess there were some issues with like some of the assets of like other of the bridges protocols and you know, squid was sort of like excellent squid were the ones still active? Can you sort of expand what what the issues were with this other rigid, protocols and why sort of the axle? Our design wasn't affected by that. Maybe yeah.
Yeah, it was. So what happened was multi chain, which is a name of a another bridging protocol. Had some issues where users wind able to transfer across chains? Now, I go into why that happened? And I don't know if anyone knows yet, maybe they do, but any, essentially, the assets on a bunch of chains were frozen. You couldn't move them around, you can exit as it were like.
And so what happened was uses, the the multi chain price, fell and usable trying to get up and get to safety to a theorem or something like and some really interesting thing that happened was a lot of our competitors people who run other routing protocols but using different systems other than Axl I had to stop and the reason for it was that they run point-to-point systems which so the the underlying network not squid, not the squid level but the Exile level is running in a
point-to-point system rather than a hub-and-spoke system and If you have a point-to-point system, then every, every connection is unaware of the all the other connections. So say you're on Phantom, which all the u.s. DC on Phantom was collateralized by multi chain. So it was like usually risk and same multi chain has like the hack essentially makes multi-chain USD, see really
cheap. So, it's as if you can get infinite multi-chain, you Assisi, this is the attack vector, and in a point point system you could tell all Points that you have the full supply of usec on fats.
I'm like you I not and you are going to reach it out to this real chain and and then swap it for real USD, see, on the other side, and then in a point-to-point system, you'll be able to get drain all of the liquidity on all of the points, but in the hub and spoke model like axilla since you limit the liquidity that you can drain to the particular spoke because you're swapping out in the squid model you Could only Swap all the multi chain you Assisi for axler USD, see on Phantom and
then Redbridge the axle usually see over so that axle are USD. See still like a pair gives still secure and so the only thing you could still was this the amount of X values DC, we have in the liquidity problem on curve of that so-and-so squid had a really good few days where most of the other protocols had to actually shut down every chain. Just so, just to stop this. Attack from happening happening and we got a lot of volume through.
Yeah, through Phantom, we actually just stayed running through the whole thing. Even though multi-chain u.s. DC was at really high risk. We had Traders and Arbitrage, people who were were keeping, keeping the polls fairly balanced. So, we got a lot of low volume that a, and it was called coldest. The axle has design, and like foresight actually play out in a real situation. Right? That they are a super interesting to see that. I guess they were also like other hacks where this sort of
drain system. Like I guess one whole egg was sort of like that too. If I remember correctly that you know, you basically couldn't infinite and then sort of drain the liquidity from other chains. So yeah, very, very, very interesting to see the practice, I guess, because the I Theory Many people can claim many things and maybe gets too confusing for many or like, people don't even look into it. So, if you see the it in practice, then obviously,
that's, that's great. And And yeah, that's a, that's a cool, cool episode. Cool, like proof of the, the XLR architecture. So yeah. I guess we recovered a lot about like the architecture infrastructure. I think maybe we were can slowly likes get to wrapping up. I think what would be really interesting is sort of, you know, the use cases?
You guys see. I think you're like already talking about the obviously the swapping but also you know, purchasing and if T is cross chain, is there anything else you want to highlight on sort of the the use case from that you guys are thinking about or that people in the squid ecosystem are working on Yeah, the other use cases, I mean, it's anything you can do single chain, you can now do cross chain, you can pay
with them into, okay. So we're trying to limit it to certain things just so that we can focus and I think's takings really interesting one. So the liquid staking providers lending, protocols, and whatever. All this staking product that is out there. You can. We've got a bunch of Partners doing this. But you can essentially With whatever token and you have in your wallet, you can get this taking product. So it shifts a little bit.
This mental model from the say you have Ethan, your wallet and you want to land it. You have money in your wallet and you want to buy this lending product, you want to get a loan which is denominated in Eve and you can get this apy on that. If those like I like this integral we Shifting the The focus on that onto the product instead of onto the token. So you have all these different use cases and you just have money in your wallet and you want to use the use case use the
product. This is taken as one derivatives exchanges or another so worked with valet exchange. And arbitrament, I can with bunch of other exchanges where in the derivatives exchange, you essentially need to stay qsd. See, as collateral to be able to trade derivatives and we're doing that across chain. So you can move between markets in a single click and Cosmos. Is something I'm really excited for because you have all these different app chains which I
really specific use cases. But the onboarding experience has been like if you thought it was bad in the evm world, like it's think again, like the cosmos, well is insane so hard to get assets into a chain to try, something and get gas.
So, I think every Cosmos chain but benefit from and probably with some speaking with all them, they'll be able to onboard users from the EDM world and single click and And then, hopefully the slab chain technology starts to get use your awesome mad sounds, super cool. I'm very excited for the future of squid and you know what you already achieved and in such a short time.
So yeah, really cool to see like this whole like idea of I guess the modular architecture is in a way where many people have talked about and sort of you guys. I feel like our Like one of the earlier adopters or something like that where you really like use utilize like the XLR species and you can sort of expand on a lot of other things. So that's I think a grade, a choice you made there and seems
to like pay off. So we are very excited for you guys and thanks for coming on and then diving deeper into into how it all works. And yeah, hope to hope to have you back on epicenter, maybe in a few Years, when when it's all like, even further cross-trained, everything and see, see where you guys are at. So yeah, thanks Vic for for being here. Yes, it's good like stuff. He likes is fun to chat. Thank you for joining us on this week's episode. We release new episodes every
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