Saga: 'Ethereum and Solana CAN NOT Scale. Our Chainlets Fix This!' - Rebecca Liao

This episode focuses on the scalability issues of blockchains like Ethereum and Solana, and how Saga’s unique "chainlets" architecture aims to address these challenges.

1. Scalability Issue: Traditional blockchains like Ethereum and Solana struggle with scalability, affecting application performance as user traffic increases.
2. Saga's Solution: Saga introduces chainlets, which provide a scalable architecture by allowing automatic and seamless deployment of new chains.
3. Automated Deployment: Chain deployment is fully automated, helping developers focus on application development without worrying about underlying infrastructure.
4. Focus on Gaming: Saga targets gaming applications, aiming to support complex game designs without the limitations of conventional blockchain infrastructure.
5. Tokenomics and Business Model: Saga’s tokenomics is designed to ensure cost-effective scalability, with a unique validator bidding system to keep operational costs transparent and competitive.

1: Introduction

Rebecca Liao discusses the scalability challenges faced by conventional blockchains and introduces Saga's chainlets as a solution. Rebecca Liao: "A singular chain like Ethereum or Solana will not scale by itself."

2: Technical Discussion

Details on how Saga's chainlets work, including their security features and automation process. Rebecca Liao: "Every time a developer requests a chainlet, our validators automatically spin up a new chain."

3: Business Model and Tokenomics

Exploration of Saga's business approach, focusing on its innovative tokenomics and validator system. Rebecca Liao: "We run a reverse auction among our validators to determine the cost of security for each chainlet."

4: Focus on Gaming

Discussion on why Saga is particularly suited for gaming applications, highlighting the benefits of scalability in game development. Rebecca Liao: "Our main focus is gaming, where we can bring developers as close to their creative vision as possible."

5: Conclusion and Future Outlook

Rebecca wraps up by discussing the future potential of Saga, especially in terms of main net launch and further adoption. Rebecca Liao: "With main net launch, we're looking to revolutionize how applications scale on blockchain."

1. Explore Horizontal Scalability: For developers, exploring horizontal scalability through technologies like Saga's chainlets can significantly enhance application performance.
2. Automate Chain Deployment: Automating chain deployment can reduce operational overhead and focus on core development.
3. Engage with New Technologies: Early engagement with emerging technologies in blockchain can provide a competitive advantage.
4. Consider Blockchain for Gaming: Developers should consider blockchain technologies for gaming to leverage benefits like improved scalability and user engagement.
5. Stay Informed on Tokenomics: Understanding tokenomics is crucial for leveraging blockchain cost-effectively.

One of the most important hurdles to mass adoption is represented by blockchain scalability, which also hinders the real-life utility of its numerous applications. While there are different solutions being experimented with, one should not overlook the importance of security and decentralisation. Saga introduces the concept of chainlets, interoperable Cosmos-based sovereign blockchains that share the security of Saga’s mainnet validator set. The majority of their parameters are fully customisable, allowing developers to tweak them towards their own needs. Saga’s main focus is building their very own Web3 gaming ecosystem, providing game devs the scaling needed to unlock their full potential and creativity.

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Rebecca Liao

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Content Warnings:

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Rebecca Liao

A singular chain like an ethereum or even a solana, etcetera, that by itself will not scale. So our belief is that as applications start to grow and we get more user traffic, scale becomes a very significant issue for these applications, and the only way in which they're able to accommodate that traffic is to be able to scale horizontally. We would need to automate chain deployment for you, which we have done. The way that we stand up our chainlets is every time a developer requests a chainlet, then our validators are obligated to automatically spin up a chain for them that has the same security model and the same validator set as our main net. So first of all, we wanted to completely abstract away the chain creation and chain deployment process.

Now it's so easy to spin up one, why not spin up multiple.

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Start staking today at chorus one. Hi Rebecca, and welcome back on Epicenter. Great to have you again great to be here, Felix. Thanks so much for having me on. You guys lucked out.

Rebecca Liao

This is the very last podcast that we'll do before mainet launch, and we're obviously not releasing until after mainet launch, so. Yeah, yeah. Quite a bit of rich information I can tell you today. Yeah. Thank you so much for taking the time in this probably super busy days, or one of the busiest days in saga history.

Felix Lutsch

I'm sure we can dive into, like, you know, what you learned over the last year since you last came on. So for every listeners, Rebecca was on, I think, I guess, April last year or maybe almost a year ago. Exactly. Wow. Yeah.

Rebecca Liao

Yeah, that's right. And so we talked a lot about kind of Saga's architecture and, like, sort of the core value proposition there. It was much earlier days than today, I'm sure, so. But, yeah, anyway, so maybe you can. We can kind of start by talking a little bit about, you know, the high level of saga, what it is for the people that didn't listen to the first episode and who you are.

Felix Lutsch

Maybe we can start there. Yeah, absolutely. Well, Felix, great to see you again. It's always great to spend time with you guys. Epicenter is definitely one of our favorite podcasts, so I did one.

Rebecca Liao

Missed us, for sure. Yeah. So Saga is a layer one, but we are a layer one to launch other layer ones. So everything that is built on saga is, by definition, on their own chain or set of chains, which we call chainlets. And why do we architect it this way?

It was for infinite horizontal scalability. So our belief is that as applications start to grow and we get more user traffic, scale becomes a very significant issue for these applications. And the only way in which they're able to accommodate that traffic is to be able to scale horizontally. And so at a high level, that is what saga is. We are costless on the front end.

So we're very careful to specify that we're costless as opposed to gasless. So it's blockchain. Anytime that you're dealing with a chain, there's no such thing as no gas. I mean, you can set gas to zero, but we don't advise it. And I think any, any sort of, like, blockchain engineer, architect out there will advise you against that, even though it's very tempting.

So instead, we have a system by which your transactions on the front end remain costless. It's true that saga does not show up on the front end. We do not charge a gas fee to the end user. Saga token is used by developers to pay the validators to keep our chains alive. So, given all of that, it is a system that is optimized for consumer adoption.

In terms of what I've been working on, I mean, running this project has been quite insane. I would say it's probably one of the most insane things that I've ever worked on. I mean, before this, I did another crypto startup with Saki that was more in the defi space. And then before that, I did an AI startup. And things have definitely changed in that field.

I mean, back then, natural language processing was impossible, and I mean, now it's table stakes, right? People don't really think about it anymore. So it's been incredible to see the journey over time of just what technology sees as the next frontier. But this is the most exciting thing to be working on at the moment, for sure. And yeah, I'm thrilled.

Going into mainnet launch. Yeah, that's awesome. There's a lot to dive in there, maybe even a little bit. The AI use case. We can see if saga returns to its origins, but maybe we can start.

Felix Lutsch

You mentioned infinite horizontal scalability. I guess we have had a lot of infrastructure projects on here. I think that's kind of like one of every center's focuses in some ways, and maybe also blockchain overall focus, since we didn't have that many consumer apps yet. How do you, I guess, compare to other infrastructure projects? I don't know, new stuff like shared security, restaking, modularity.

How do you feel saga fits in there? What differentiates from maybe other infrastructure products? Yeah, so I would put it this way. It's always interesting how these tech narratives pop up in crypto, because the fact of the matter is, you can discuss endlessly until you actually have to deliver a product. And so at Saga, we look at all these different things, whether it's restaking shared security.

Rebecca Liao

I mean, they're kind of the same thing. So every protocol has different ways of doing it, but they're all getting at the same idea, which is that a singular chain, like an ethereum, or even a solana, etcetera, that by itself will not scale. And so the way that you are able to scale out something that's existing, or how you're able to build a system for scalability from the beginning, is you're able to accommodate for additional block space. So you need to be able to provision with new block space. And the way that some protocols do it is by restaking from another chain that's completely foreign to them, to their own set of chains.

At Saga, everything is native. So there is a saga mainnet. It has a set of validators. It is a fully decentralized proof of state cosmos chain. The way that we stand up our chainlets is every time a developer requests a chainlet, then our validators are obligated to automatically spin up a chain for them that has the same security model and the same validator set as our main net.

So it is definitely shared security. Can you call it restaking? Sure, you can call it restaking because we're taking the validator stake from the main net and then applying it to a chainlet. You can call it modular as well, because we're definitely not doing a singular l one. We are an l one specifically to proliferate l one s.

But at Saga, I think that our experience is app developers can get quite confused by all of these options, especially because, a, they have to understand what the technology does, and then b, they have to understand what the significance is for them. And we tend to want to cut to the chase here. And so we tell the app developers, you want scale. At the end of the day, if you are a game, for instance, which is our main focus, you are looking for scale, because the fact of the matter is, you know, game designers are creatives. Felix, I don't know if you're a gamer, but I'm sure you've played lots of games throughout the years.

They are creatives, and so they have a creative vision in their head. And most of the time, the technology is nowhere near capable of meeting that creative vision. And so what we're trying to do at Saga is to get you as close to that creative vision as possible. So if you wanted to create an MMORpg, for instance, with lore, thousands of characters, all of whom are NFTs interoperable assets, you should be able to do that. We don't want the base infrastructure to constrain your game design, in other words.

So that's how we think of it is. Yes, there are these tech narratives, and honestly, some of the best researchers and brightest minds in this space are working on those narratives. And so, of course, we pay attention. But at the end of the day, our focus is the end user. It is the app developer, the game developer in particular.

And when we build our product, it is really with them in mind. Right? Yeah, super interesting. And yes, I am like so many, like even Vitalik, old school World of Warcraft gamer, that. Oh, brilliant.

There you go. You understand? You understand. Like, where the hell did my skins go? Yeah, you understand?

Felix Lutsch

Yeah, exactly. Exactly. I think one of the first articles I wrote about, like why blockchain and gaming works back in the day was actually about like sort of these portability of the assets or the power of the game over your assets and stuff. So interesting to see. We're probably hopefully soon actually getting there, that the scale is possible to really build a blockchain game.

So yeah, super curious to hear more about that. Like you're saying you're focusing specifically on the gaming use case, or I guess also app developer perspective. Can you describe a bit how you do that in practice and how you abstract stuff from them that the blockchain does or things like that? Yeah. So first and foremost, I think, and this is not a small thing, I mean, it's one of those things where I think in the roll up discussion, it's become sort of a more muted part of the conversation.

Rebecca Liao

But I think it's important to remember, which is that building a chain is not easy. So what are the components of a fully decentralized proof of stake chain? First of all, you need a validator set, and that means that you need to be a project that can be profitable for validators. And that already cuts out most of the applications out there, especially when they're first starting out. And so having your own chain prior to saga was an enormous lift.

So that's the first thing that we wanted to solve for developers, is if you want your own dedicated block space, which is your ticket to actually scalable infrastructure, then we would need to automate chain deployment for you, which we have done. So right now in our web app, honestly, you fill out five parameters for your chain, and then our validators will take about a minute to sync and then all the services around the chain will have to be spun up. So the indexers, the RBC endpoints for sure, the block explorers, once that is done, the whole process is maybe about a minute and a half. You have your own chain and you can have as many of these as you like. So first of all, we wanted to completely abstract away the chain creation and chain deployment process.

Now, it's so easy to spin up one, why not spin up multiple? Because at the end of the day, one change should be enough for most applications to start off with. But if you are a large game, for instance, that is built on another system and you are looking for a scalable solution now, then you have a lot of users and a lot of assets that are already built in. You're already starting to think about multiple chains. So if you're a wow player, then you know all about game instances, game shards, different realms, and this is how game developers like to organize their game.

So it starts to expand onto multiple chains, but it'll still feel like the same application. So it's actually quite similar to cloud in that sense, because you probably start off with one AWS instance or a couple, and as the compute resources you require increase, then you would expand to as many instances or servers as you can. So it's the same idea on Saget, just expand to multiple chains if you need that additional performance. Um, because we're all familiar with cosmos, I can start a little differently on this point, uh, which is that IVC allows all these chainlets to speak to one another. Um, so there is complete interoperability within the saga ecosystem.

Now, bridging out to other ecosystems is also where it gets interesting. I would say that with most solutions out there, whether it's, um, roll ups, for sure, even other app chain or side chain solutions, bridging is an issue, um, because the way that bridging usually works is you have a rich provider, and even for the ones that are completely decentralized, there is still some way in which they will whitelist a chain, and it's usually a bd effort. So you have to talk to the core team and get them to agree to open up the bridge for the assets that are coming from your particular chain. Now, for most layer ones, or for any layer one prior to saga, that was, I mean, it was manageable effort because the number of layer ones was pretty finite. Um, but here we're going for infinite horizontal scalability.

And honestly, any application developer should be able to just spin up chains whenever they want. And therefore, talking to the team every single time you're going to spin up a chainlet is not scalable. So we needed a way in which you can permissionlessly add, um, our chainlets to the bridges and then open up bridging for the assets that are contained on those chains. So the fact that we are a fully decentralized proof of stake system with fast finality, that gets us to that fast bridging, and that's something that a lot of application developers are looking for as well. They just want to go where the liquidity is.

We at Saga think that there is far more value that we can create in terms of being the hub for these application developers that are making sure that all the liquidity is locked on here. As we know in technology, oftentimes, if you are the easiest platform to use, and liquidity just happens to find you, because that's where the user traffic and the developer traffic will go. Yeah. So those are some ways in which we're helping out developers. And then the costless transactions that I mentioned earlier, that is absolutely key.

I think especially for game developers, many of them have aspirations to have their own token, or they are looking to maybe use the token of another ecosystem, even if they're coming to us from an Ethereum community or polygon community, et cetera. And we allow for that kind of flexibility on the front end so we don't interfere with the monetization, in other words, of these application developers with their end users. Yeah, the entire system has been really architected to maximize experience for the app dev. And I think given the traction that we've seen so far, it's resonating. Yeah, thanks.

Felix Lutsch

That was a lot. Super interesting. And understanding correctly that it's not like the assets you bridge have to go kind of through the Saga hub l one, but they can actually go straight from the chain land to, to somewhere else. That's exactly right. So every chainlet is a chain.

Rebecca Liao

It is a fully decentralized proof of stake chain in its own right. And so it's able to do everything that a layer one can do. The only difference really, is that we don't require you to have your own token for staking, because again, everything is, I guess you could say, it's restaked from the saga main chain. And so there's no need for you to have a staking token. A lot of people will ask about staking regardless.

I think that's because maybe some validators have become important community members for these applications for, you know, for various reasons, and they want to be able to reward the validators or people who have been longstanding community members through the mechanism of staking. And it's true, staking is an incredibly powerful incentive mechanism is why many people attempt to stand up layer ones. But what we always tell people is, okay, I think it's. It's time to change the mental model a little bit, in that you don't have to have actual staking, you know, you don't need to secure the network per se, but you can have staking, um, you can have people stake their assets in liquidity pools or with certain assets based on certain activity in your application. It's just you no longer have to worry about a staking token for purposes of security.

Felix Lutsch

Yeah, that makes perfect sense, I think. I guess that's it's getting back a bit too, because in the end, obviously the app chain developer needs to kind of pay for saga. So maybe that's also something we can talk about a bit. How does this pricing work? I know we probably talked about it last time, but we can probably go back into that.

Rebecca Liao

Yeah. So pricing is. No, thank you, Felix. It's a very important point. Pricing is a very important vector for us.

And the reason for that is, I think from the perspective of an application developer, gas is annoying. Not just because it's potentially high, it's unpredictable. And so when you are trying to actually stand up a project, get some traction for it, you want to be able to know what the costs are pretty basic. And I think for us, when we designed our tokenomics, that's one thing that we really aimed for, um, was some sort of understanding of what the cost is going to be for running one of these chains. Um, and we did not want it to be reliant on gas.

So. So here's a mechanism. We call it musical chairs. Every epoch, which is about a day, we run a reverse auction among our validators. And, um, the number of validator slots that we're starting off with is around 20, so 2021.

And in order to get one of those slots, the validators will bid their price for providing security for a chain ledge for that particular day. And the lowest set of prices wins. So if you were in that lowest set of prices, that's great. You're part of the validating set. The highest price in that winning set of prices is the price for that particular day.

So if you're the validator who bid that, then congrats, you got exactly what you asked for. But if you are a validator, that bit actually a little cheaper than that, so your pricing was even lower, then you actually get a nice margin over and above what you had originally anticipated, which is great if you price too high. So you are out of the validating set for that particular day. Um, then not only are you not validating, you're actually not getting the rewards for being a validator for that particular day that you're out of the set. And so this is an incredibly powerful mechanism to encourage validators to bid their true cost, or as close to their true cost as possible for providing security for chains.

So what's the definition of that? It's commodity pricing. So we aim to get to commodity pricing for our application developers. Now, what we're currently clocking in at is about $500 per chainlet per month. And given that there are no other fees in the system, that is probably the most affordable way in which an application can develop, whether it's on a monolithic layer one or whether it's on other sidechain dedicated block space solutions.

We aim to be the most cost effective. Awesome. Yeah, that's really cool. And how did you actually arrive at this cost? Because I guess that's you running it on testnet and validators already priced in dollars there sort of cost or how does it actually work in practice?

Yeah, yeah, no, that's exactly right. So for the test sets that we've run so far, they are free of charge. They are free of charge and therefore we are. So we haven't actually put this mechanism into practice yet that'll come in the phases of main net. But what we did do with every testnet was we had the full set of validators, so we had ourselves, so we were a validator, but we also invited in anywhere from like 20 to 22 other validators to be a part of the testnet.

And so this entire time we are monitoring the collective cost, basically, of each chainlet that is stood up. And for our Pegasus incentivize testnet, which is our next to last testnet before main net, we actually, we have a testnet b two that is running right now, but that's really for final verification purposes. No one's really meant to build or do anything on there. The one that we had immediately before was Pegasus. And for that one, we, I think, maxed out at around 210 chainlets or so.

So we had a lot of data to work with. In other words. So it's based on cost. At the moment, it's based on cost. And the assumption here is that because of how we have architected this reverse auction, it should be the case that when validators do actually come online and participate, that the final pricing will be very, very close to the actual costs that they're paying.

Felix Lutsch

Yeah, super interesting. Like curious to see how it will look on Mainnet and if it will turn out like that. I guess that will be the big question. So, like I saw actually, I mean, yeah, you mentioned 210 chainlets there on the Pegasus testnet. Like, when you go to Mainnet, how many do you expect to go live at the first few weeks?

Do you have an idea of how much it might be? Yeah, so our day one mainnet launch partners, there are over 100 of them. So I mean, we have a saga innovator program. That's our ecosystem program. We've been building that for the last year and a half, two years, and that has 350 projects in it.

Rebecca Liao

And so not everyone is going to come online day one, but we definitely wanted to encourage as many people to get started as soon as possible, so it should be over 100. All right. Yeah, that's super exciting. Congrats. That sounds like a lot.

Felix Lutsch

I think I'm assuming a lot of them, given the core focus, is games still, as I understand, are games. Can you talk a bit about. Yeah, is that like the main one? And then maybe. How do you.

Rebecca Liao

Yeah. What did you learn from these games or what sort of games are there? Like, what excite you? Which games excite you? How are you approaching these game developers?

Felix Lutsch

Everything in that sense? Yes. The vast majority are games. Some of them are going to be more pure NFT collections. So I would say 80% of our ecosystem is gaming, and then about 10% is more pure NFT and entertainment, and then the remaining 10% is defi.

Rebecca Liao

So we are in l one at the end of the day. And so there are always interesting things that you can do with respect to defi on an l one, especially here, where pretty much every single chainlet is going to have at least one token. So that ecosystem is actually, it's starting to gear up, which is very exciting to see. But in terms of the games, I would say that the kind of game that is really suited to web three is the kind of game that really relies on UGC. So UGC is user generated content, and the reason for that is a decentralized system, very frankly, is never going to beat what kind of computing power AWS and Nvidia combined can give you.

So if you're looking for a game that is meant to be, you know, a fast moving, high performance, completely optimized visual experience, blockchain is not really meant for that. Blockchain, I hope, can support that kind of game, but it's not the base infrastructure for it. There are many other game infrastructure for that particular kind of purpose. So what is it that web three and blockchain uniquely bring to a game? It really is that decentralized generation and control of intellectual property.

Um, so what that means is if you are a mod for a game, not, not a social mod as in a moderator, but if you modify games, for instance, then you are much more easily able to monetize that without ever having to consult the big studio or the original creator of the game. If you are a gamer and you're looking to customize your avatars or your skins, then this is a great way, um, in which you can go ahead and do that and actually retain control and monetization of those assets. And so it's really those core things around ownership, creative freedom that is really suited to web three gaming. So the kinds of games that we seek out, they do tend to be pretty vast in vision. So open worlds, mmorpgs, things that have lore.

But we also are starting to see some pretty fascinating genres come on board. So survival, horror games as well. Some of the games that will come online immediately are things like Rogue Nation by Moonlight games. There is a game called another World, which is a classic rpg game. There's a game called Star Heroes.

It's first person shooter, but it's set in space. Super fun game eternity, which is kind of Fortnite, but on jetpacks there's significant AI component to it. So those are some of the ones I can come up with off the top of my head right now. But we also recently announced a game publishing arm at GDC called Saga Origins. And anyone can build on Saga, anyone can build on Saga.

But in terms of the games that we financially back and that really get the benefit of full publisher services, including go to market, user acquisition, creating game awareness, community building, et cetera, all the things that a publisher generally does for games, it is a very specific kind of game. So we have a pretty clear creative point of view at Saga when it comes to origins. So we're looking for games that are provocative, expansive and uncompromising. So these are the hardcore games. We're looking for that intensity of content.

And why is that? Because again, we're lucky for what is it that we have three can uniquely bring, right? And I think e for everyone games are terrific. I mean, you know, who wouldn't want a game that anyone and everyone from your like two year old cousin to your like, you know, 50 year old dad could play. That's awesome.

But we think that web three is meant to push the envelope. We should be a home for that content that will not get accepted by big studios. And there's quite a lot of that right now. Games that are really great quality, but the content is just not acceptable for mainstream consumption. But as we know, if you build something that is of great quality, it's a great product and it resonates with people, it will find the mainstream.

And so the games that we're starting off with for the publishing arm, they do tend to be a little bit more intense. They are def, they're not e for everyone. They're definitely m games. And we just, we think that we're going to carve out that pretty unique niche within web three. And I mean, we're already seeing an early playtesting that people are really responding to maybe a little too much, but it's.

It's fun. It's a fun process of discovery. Right? Yeah, that sounds. That sounds interesting.

Felix Lutsch

So, I mean, maybe a weird question here. Like, I guess if these games are so intense, do you have any concern that validators might not want to run the infrastructure for it or something? Or is that. Or could you. Are you addressing that somehow?

Or is that even. Let me put it this way. So, first and foremost, validators, the beauty of the socket system is that so much is automated. So validators don't even have to know which chains are being run by them. If you are within the validator set of slugga, then your SLA is that you will automatically stand up and run whatever chainlet comes your way for as long as you are a validator.

Rebecca Liao

So we've taken the quote unquote choice aspect out of it, which just simplifies the whole thing for validators. Now, if you are, as a validator, are so offended by the content of certain gains on saga such that you don't want to be a validator anymore, well, then you are welcome to go on to Solana and validate some of these meme coins. And you know what I'm talking about. So, yeah, if censorship is your thing, then go with God, right? Right.

Felix Lutsch

Yeah, makes sense. Sounds fair. Super interesting. And so I think one thing I also wanted to talk about. I mean, first of all, like, super interesting with the publishing house, how did you actually like.

So it's funded by saga in a sense, and it's like its own, like, sort of business, and people like. Or working on that. Okay, that's super, super exciting. Yeah, yeah, yeah. So it's.

Rebecca Liao

It's not a separate entity right now, so it's still a part of the slog of 14. Um, but we are starting to think about how do we, like, make it its own thing? Because, I mean, we are focused on gaming entertainment as a chain to. To begin with. Um, most of the people on the business side at Saga, um, have been sort of oriented towards games this entire time.

Anyway, um, so we're starting off the publishing house with just the core team working on it. But, yes, as we grow, as we get more titles, um, as the demands for those titles become greater and greater, then I do think that we're going to hire out a specific team for that. Yeah, very interesting. Um, maybe also going to, like this sort of testnet learnings and kind of how it is for the validator. Side.

Felix Lutsch

I mean, I guess I have like a bit of a background there, so maybe that's why I'm interested in it. But, yeah, how has that been for the validator? Have they, how much infrastructure are we actually talking if you're 210 chainlets, how beefy are the machines? Or is it all one machine? Or are they provisioning separate infrastructure for this?

Or what other alertings were there in the testnet? Maybe aside from the price discovery there? Yeah, I would say in terms of validator load, so far it's been manageable. In terms of having machines a validator has to run or to support one of these nodes, I think it has been quite manageable, and we've seen that for our own validator as well. But the thing that we did learn this was interesting is oftentimes when people talk about scalability, they focus on things like TPS, for instance.

Rebecca Liao

What's your block time? What's your time to finality settlement? These are things that people focus on. But what we learned is, so midway through Pegasus incentivized tested, that's when we ran a developer challenge and we told developers who are part of the saga, innovators as well as outside developers, actually, we invited in the community, please pound the system. Just pound the system with transactions and just because we want to see how it responds under great duress.

And what we found is that the chain holds up. So the chain holds up. Nothing wrong with validator operations. The chain holds up very well. It's actually the services around it that have a problem.

So, for example, the block explorers, even some of the RPC endpoints, indexers or whatever for now. But definitely the block explorer, it was just not able to catch up. And what I mean by that was when you spin up a new chainlet and you're starting to paddle with transactions, I mean, the block explorer sort of has to come online at the same time and then keep up with the block production. And the explorer that we had been using at the time just was not able to do that. And any sort of failure of transactions as a result of the stress test, it was actually more due to the services surrounding the chain.

And so that's when our engineers were like, this is quite interesting to learn, because in the journey to main net, they had been thinking, okay, we're just going to focus on making sure that the chain is entirely stable and secure. And that turned out to not be the issue. So ever since that particular stress test and then leading into Mainnet, now the engineers have really been focused more on the services. So making sure that the services can be optimized and catch up with the production of blocks, that was the main learning. That was the main learning.

And we're doing the best that we can right now, given the services that are available. And we don't produce any of these things ourselves. So we don't like have our own native block explorer, for instance. We have not built our own indexing service, but we are doing our own service provider stack for RBC endpoints, just for node orchestration, because it's more complicated in our system than others, where every single chain has their own RBC endpoint. So if you are integrating with Saga, there's really no such thing.

You're really integrating with individual chains. So yeah, I think it's optimizing for all of that. That's a learning that came out of it. It's pretty fascinating. And it also gave us a good idea of what kinds of projects we want to back going forward, not necessarily in terms of games, but for growing the saga protocol.

So if you are a developer in the community and you want to contribute to this protocol, you're not a part of the core team. What are some of the services that we'll finance, in other words, that we'll give grants to in order for you to just make this a lot stronger? But yeah, it was fascinating. Yeah, that's super interesting. It's kind of like once you have real usage, you start to realize this base layer is actually maybe comet BFT is performing well, but some other things are not.

Felix Lutsch

I guess even in Ethereum, maybe in Defi, you added a bit with like mev and stuff there where that was probably also a similar realization. And so these services are run not by the validators or I guess the RPC nodes who kind of provides them in the end, or how are they part of the saga system at large? Is there also some sort of economics around them or how do they, how can I imagine that? Yeah, at the moment. At the moment it's a package.

Rebecca Liao

At the moment it's a package. I mean, oftentimes the services are, you know, they're open source tools. They don't really have sort of an economic model to them as of yet. But having said that, I do think in the future what can happen, we've sort of started to plan for this already in the roadmap is that there's kind of a marketplace of tooling. So here is a saga chain led out of the box.

It has our validator set and security model. It has these set of services. And I do think that there is actually a packaging for the services, which we call the saga OS. So this is what every chain needs in order to run. Now, if any component of that saga OS is something that you want to switch out, then that's entirely possible.

But it's not possible right now. But we would like for it to be possible in the future. So if you wanted to bring your own block explorer, for instance, if you had your own preferred indexing service, then you can switch it out. If you wanted to switch out any particular component of the chain itself. So if you don't like the execution layer, you don't want to use EVM, you'd rather use SVM or some other kind of virtual machine.

If you wanted to switch out our DA or somebody else's DA, that's also totally fine. So it really starts to be this like marketplace of developer tooling. You can see, by the way that I've been describing the system that we've taken quite a bit of inspiration from the cloud, because right now, if you are developing on AWS or Azure or whatever cloud service, then there is a very robust marketplace in which you can switch out particular tooling for your application, your website, whatever it is that you're hosting. So we want it to be the same idea here. Now, what it does mean is that life gets more complicated for you as you start to switch out from the main chainlet package.

Then if any of these individual services that you prefer are charging, then you have to bake that into the cost. I mean, it may be the case that saga does some sort of revenue share, some sort of package deal with these service providers. Those are individual details that need to be negotiated out. But as of right now, it's, I think, for a mental model, the app developers just have to keep in mind that if you start to customize to that extent, then it's likely that your costs may, they'll start to vary, they'll just get more complicated. Right?

Felix Lutsch

Yeah, it makes perfect sense, I think. Yeah. Interesting how to see that develop, maybe in the long run, how much of that marketplace can be done through saga, or how it may be integrated, the protocol in the long run. I guess there's a lot of things to think about there. Saga itself, like you said, has a mainnet or ISL.

One has a chain. And I read a bit of an article where you kind of describe the rollout of the saga mainnet. Probably a lot of people here are familiar with how Cosmos chains generally are launched. Maybe can you explain a bit how you're approaching this, I guess you have all these different chainlets and there's a bunch more complexity of how this rollout needs to happen. So I found that pretty interesting how you're doing that.

Rebecca Liao

Yeah. So I think in the opinion of Jake McDormand, who is our brilliant co founder CTO, and Bogdan Alexandreska, who is our cofounder VP of engineering, I mean, it's a massive system that we're building something that is infinitely scalable on a horizontal vector. I mean, this is a system that can break down in so many ways. And so when we wanted to design the rollout for Mainnet, we could just have it all exploded out there without a ton of user testing along the way. Or we can do a phased rollout because what's going to come out, or maybe by the time that this airs, what has come out?

Azure saw the main net. It is a gated launch, and so it is a chain to launch chains. It's in layer one to launch other layer ones, but we are still keeping the security chain decentralized and then the platform chain itself, it has a very simple task of just standing up these chainlets. Now, what happens through phases two through six of mainnet launch is that we start to add in some critical services like IBC, that is probably the most important one, so that the chainlets can speak to one another. We'll also further decentralize the validator set as well.

And then by the time we get to full feature main net version one, which will be in a few months from now, that's when we know that the system can scale in a really sustainable way, that all the chainlets can speak to one another. And we will have established some of those early bridges that go directly from each of the individual chainlets as they are stood up out to other ecosystems and then out to their, say, NFT marketplaces or their dexs as well. I think the reason why we wanted to roll it out like this is we know the kind of user traffic that we're going to deal with and rather than risk everyone coming on at the same time and this whole thing just kind of exploding and the chain dying, let's go ahead and phase it out in a way such that it's very useful at every point, but it's still relatively safe. That was the thinking behind it. Yeah.

So that's the technical launch plan. I think what's going to end up happening actually is even though we divided everything after phase one into five additional phases, we might start merging some of these, I think along the way, the engineers have learned, okay, there are some things that we can optimize for here. Yeah. It should be good over the next few months. Yeah.

Felix Lutsch

I think it's very thoughtful already to have thought this far and build this plan. I think in many ways, we have seen many launches that kind of did it while it happened, while the plane was flying. So I think this seems to be a very thought through approach. If you can optimize it more. That's great.

Yeah. Pretty keen to see how it will go down, I guess. Yeah. Like you said, hopefully once this airs, or it might already be live. So, yeah, best of luck at this moment.

Yeah, I think, I guess to another point, which is also a big part of the launch, and especially nowadays in this market, I think that people care about a lot, I guess, is the saga token itself and the token launch. You did have some interesting campaigns and, like airdrops. I mean, I guess you were building or focused on games. So gamification is also core to your business in some sense. But, yeah, maybe can you explain a bit the thinking behind the allocations or how you conducted the airdrop and how it all worked?

Rebecca Liao

First of all, the airdrop criteria that you saw for the community is a result of several months of work on the part of our token team, which is led by Jin Kwan, our co founder, chief strategy officer. And the goal was to really encourage loyal, long term community members. And within a cosmos system, that's evidenced by staking. So we wanted to target the most loyal stakers, and in terms of sort of narrowing in on the subset of stakers and how the budget will be allocated between them. So we wanted to target roughly 200,000 wallets.

That was our goal. That was the ceiling for this particular campaign. Overall, for airdrops, we have allocated 20% of our total token supply, but that is going to be airdropped out over the entire life of the project, not necessarily just for Genesis. For our genesis drop, we wanted 6%. And among that 6%, we wanted to reserve about 4% for those stakers.

So knowing that and knowing that, we wanted to target roughly 200,000 wallets overall, that's when we started to look at the ecosystems that are of interest to us. So obviously, Cosmos is a big one. That is the ecosystem that we came from. Um, it underlies our core technology. So we wanted to reward Cosmos stakers, for sure.

Um, we wanted to reward Celestia stakers. Celestia is our first major partner. Our partnership was formed, God, like, maybe 14 months ago or so, uh, long time ago. And, um, ever since then, I mean, we've been working together incredibly well, and the team has pulled off amazing technical feats. So we definitely wanted to reward their stakers.

Polygon and Avalanche were the two other major tech partners for us. So for Polygon, we automate CDK chains for them, and for avalanche, we automate avalanche subnets. So CDK chain subnets, these are both also ideas of dedicated block space. But the reason why they are just, they're harder to stand up is that it's still a very manual process. And one thing that saga really excels at is that automation.

So those two ecosystems have also been very supportive of us. The leadership teams, for sure, have been incredible to saga. So we wanted to reward them, and we wanted roughly the same number of wallets per ecosystem. So, given that we started to look at snapshots. And the thing about polygon avalanche is neither of these ecosystems hugely emphasized staking, certainly not to the extent that cosmos does.

And so when we came up with the airdrop criteria, we worked very closely with our foundations to figure out, okay, what does loyalty mean to you guys? It could be that people are staking, but it could also be, in the case of polygon, that people are using their ZkevM bridge quite frequently. That is a sign of loyalty for them. Um, so we worked very closely to come up with criteria for that. And then for Celestia, it was.

This was, uh, definitely one where we. We had to, you know, think a little bit about how to form this criteria, because it's a very young chain. And so how do you define loyalty for a chain that is that young? So the snapshot that we generated, it was a balance of, okay, like, this airdrop is happening now, and so we have to cut off the snapshot at some point, but at the same time, we want to make sure that people had some amount of time to stake before they get included in the snapshot. And so we worked with the core team there as well, to define, okay, like, who gets into this eligibility group.

And then for Cosmos, there are a lot of stakers. There are a lot too many to have been included in this airdrop. And so the criteria that we came up with is pretty creative. It was also something that we came up in conjunction with Chris Berniske at placeholder, which is our lead investor. Um, it is to have stake increase over time.

So if you've built up your stake in Cosmos through the bear market, you are probably one of the most loyal members here. And so we wanted to definitely reward for that. So that's how we came up with the eligibility criteria for all the stakers. Now, for the remaining 2%, that is more community drop. So that was for our innovators first and foremost.

So the people who have been building on saga this entire time, they've been doing it without any grants. So other chains are throwing money at them, throwing tokens at them, but they chose to build on saga. And so we wanted to reward them, certainly for all the work that they've done here so far. We also wanted to help out the games. And honestly, this was when we started to really believe that we could do a publishing house.

Because a publishing house, at the end of the day, is a user acquisition engine, and we wanted to make sure that we could actually incentivize users to come play our games. So we invented play to Airdrop, which is a very popular mechanism now within gaming. It's a simple idea. You play the games. The leaderboards are eligible for airdrops, and in this case, airdrops of saga tokens.

So we ran like 50 plus tournaments probably throughout the months of December, January, February, a little bit into early March as well. And the user acquisition numbers were absolutely fantastic. So this was a successful campaign for all the games that participated, but also for the entire community. So that's how we were splicing all the individual airdrops. And then we thought, okay, we have to do something for the culture, because, I mean, we are coming into this having taken a lot of the work that early NFT projects have already done.

So we pay tribute to crypto punks, so we drop to pumps to board apes, as well as one of the most OG NFT collections. And then we also airdropped to bad kids just to pay tribute to cosmos. So, um, yeah, that's how we came up with the overall airdrop criteria. There will be additional airdrops through phases two through six of main at launch. Um, so people were not included in the original Genesis airdrop.

There's still a chance for main at launch to, to get an airdrop, and then there's an additional 10% of airdrops after that. So definitely huge emphasis on using this mechanism. Our airdrop claims page is going to live on basically forever. I think, um, given just how central airdrops are to a lot of our community building efforts, and it's not just going to be airdrops of saga tokens that are going to go through that page. I think for many of our chainlets, our game partners as well, they'll also be using it.

So. Yeah, that was a lot, Felix, but I think they're. Yeah, well, I've been curious about it, so I just want to lay it out there. No, yeah, again, I think it's like a good example of how much you've thought about this and the kind of targeted. So I think, yeah, actually interesting to hear.

Felix Lutsch

Right, like, I guess make sense games want to maybe use it. So it's kind of like part of the saga stack to also get these features almost delivered to you. So if you're a game developer, you know where to go. I think we covered everything I wanted to talk about. So, yeah, thanks so much for coming on in this short time before launch, Rebecca.

And maybe if you want to like, some final thing you want to share or where people can learn more or anything like that, please feel free to do so. Yeah, absolutely. No, Felix, thanks so much for having me. It was definitely a lot of fun. Always great to catch up with you and, yeah, I mean, we covered a lot of territory there.

Rebecca Liao

I think that this will be a very exciting period. I mean, heading into the post launch period, I think people will start to understand how it is that we made our choices for our underlying architecture and then how it is that we approach distribution. So the challenge of web three is that so much of what we do already has a basis in web two and traditional programming, traditional gaming. But what is unique to this particular space? I think that is the question that has obsessed saga for a very, very long time.

So I think that with the system that we've built for infinite horizontal scalability, that a lot of app developers are going to figure out, okay, you can do a decentralized system, but it is still eminently scalable. And so it can take on this consumer volume. And then in terms of the distribution channels, yes, I mean, all the usual ways in which you get user acquisition for a game or any sort of application, they still apply here. So marketing is marketing is marketing. But at the end of the day, web three, because of the community building aspects and because of the aspects of ownership and control of your own assets and your place within these communities and ecosystems, there are many more powerful tools that you can unlock if you're built on this technology.

And I think that people are going to very broadly recognize that through the campaigns that we run both here in crypto. So people who have been in this space for a long time, but also for, for people who've never touched it before, that's, that's part of our goal, is how do we bring in people this cycle who are, I'm sure they've heard of crypto, they're crypto curious, but they've never actually used any of the products before. That's a huge goal of ours. So, yeah, I mean, our, our journey really starts now for a lot of people, you know, main at launch is such a huge lift that there's a giant exhale afterwards and people just kind of like, you need a little bit of time to recover. I'm sure our team will take a little bit of that as well.

But this is really just the beginning. I mean, we're recording this before mainnet goes live, but already there's an extensive post launch plan. So, yeah, we're not slowing down. I mean, this is just too much exciting work to be done. Awesome.

Felix Lutsch

Yeah, thanks so much again. And yeah, best of luck with the launch and hope we're going to see some saga apps be like, among the top most used crypto apps in the next few weeks and months. So, yeah, exciting. Thanks so much and see you soon, maybe next year, one year after launch. Awesome.

Rebecca Liao

Thanks so much, Felix. Take care.

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