Host: Blair Zhu, Mint Ventures
Special Guest: Sandy, Co-founder of Scroll
Podcast: WEB3 Founders Real Talk with Scroll
Blair: Hi everyone, welcome back to Web3 Founders Real Talk. We are here to bring you very engaging conversations with movers and shakers in Web3 industries. Today we have Sandy, the co-founder of Scroll. Welcome to the show, Sandy.
Sandy: Hi Blair, thanks for inviting me. It’s a pleasure to be here.
Contents
Introduction of Sandy & Background Intro of Scroll
Blair: Thank you so much for coming. Can you please briefly introduce yourself and your project?
Sandy: Yeah, sure. So I’m one of the co-founders of Scroll. We’re building a zkEVM L2 for Ethereum, using very cutting-edge ZK technology. The mission of Scroll is to help Ethereum scale. As a matter of fact, we’ve just set our recent mission statement, which is to codify trust, bring forth personal sovereignty, and scale Ethereum.
Blair: That’s really impressive. Would you mind telling us a little bit about yourself? How did you land in the crypto space? How’s the journey so far?
Sandy: Yeah, of course. I have somewhat of an unconventional background for someone who is a crypto founder. I studied political science and law in college, and then my first job was as a researcher at the SFC, which is the equivalent of the SEC in Hong Kong. As a part of that role, I covered market research like ETF research, and I started covering fintech and found Bitcoin as something that was kind of adjacent and vaguely in the regulatory purview back in 2013. I started going to local meetups and Bitcoin events and started meeting some like Ethereum people. And then later, the subsequent chains that emerged afterward and stayed very closely, like socially integrated with the space and got deeper and deeper in my personal journey. I started working full-time in crypto around 2017, and that’s when I launched a fund with some of my friends. Then as a part of the fund kind of continued doing research. From ’19 onwards, I became more and more focused on Ethereum protocol research and saw myself going deeper and deeper down the rabbit hole until one day, I met my co-founders, Ye and Haichen on the Ethereum research forums. Ye was a Ph.D. student at the time, and he had been doing ZK research for five years. He had a major breakthrough and had a paper that was pending publication on prover acceleration. That made us realize that perhaps this was a good entry point to try and use this for scaling Ethereum by outsourcing some of the on-chain proving overhead using off-chain hardware. Then Haichen was a very important piece of the puzzle. He leads our engineering team right now. Prior to joining Scroll, he led a large team of engineers in Amazon, also working on hardware acceleration and compilers. And Haichen was also predominantly an AI engineer and then pivoted very very quickly to crypto, and now leads our engineering efforts. I think Scroll started as a research project and very quickly snowboarded into an engineering project. Then we started scaling the team after receiving some early initial feedback from the Ethereum community and members of the Ethereum Foundation. That gave us a lot of confidence and validated the approach. So we very quickly started the slightly more stereotypical startup journey of raising capital and forming a team, building out the core product functions of making this a key part of the Ethereum scaling roadmap.
Blair: Wow. That sounds amazing. I love your story about how you just made a pivot from traditional to crypto, and also how you formed a team with the co-funding members. Here’s my next question. What motivates your team to focus on this specific niche at the outset? Is there any moment that clicked, which makes you feel like, okay, that’s something I want to go for?
Sandy: I think all of our team members now really resonate with Ethereum values, and we’re big believers in it. There are a lot of research-oriented types of talents within the team who are interested in ZK or ecosystem building. I think the aha moment for me was the first time we published our POC, and just to see how this piece of software could be used to scale Ethereum by an order of magnitude. That was really special. We also had a lot of people willing to test it and lots of people willing to contribute to it. All of these things compound every day and make the project more and more real.
Resistance During Mainnet Launching
Blair: Got it. So it sounds like your teams are a bunch of Ethereum early adopters, and also you guys are passionate about building up better Ethereum ecosystems. I noticed you guys achieved a significant milestone by successfully launching its mainnet last year, following thorough testing and security audits. I would say this accomplishment will definitely hold very substantial importance for the entire Ethereum ecosystem. Could you provide us a brief overview of its features? Additionally, how has the journey been so far, and were there any noteworthy challenges or resistance faced during the launch process?
Sandy: Yeah, Thank you for that. Mainnet is definitely a milestone and we’ve been working towards the better part of it for the last two years. So it’s definitely a very exciting moment. For me specifically, as the more ecosystem and external facing co-founder, the work starts at the point of mainnet. This is the beginning of the ecosystem-building process. Prior to mainnet, the main focus was to build the most technically secure and rigorous product that mimics the developer behavior of Ethereum exactly. The goal in the first iteration of the product is to just be exactly the same as Ethereum. We took a very complicated engineering route of building ZK wrappers around every single bytecode or bytecode level equivalent. The goal was to make the whole ecosystem-building process easier so that developers don’t need to re-audit or re-tool and everything that works on Ethereum works as is. So they’re asked when we go to an ecosystem project, “Do you wanna use something that is 10 times faster but still secured by Ethereum?” So the same level of security and you don’t need to do anything, you just need to point to a new RPC router. That makes the ecosystem-building process a lot easier. Before the mainnet, we probably had the longest-running testnet in history. I don’t know if that’s a good or bad thing, but I think it speaks to Haichen like sense of responsibility to the community. We wanna make sure that the funds are bridged into Scroll are absolutely safe as we can manage. Obviously there are still training wheels and we’re working as fast as we can to remove them so that the chain can increase security by various factors of verticals to be holistically more and more secure as we mature as an L2. During the testnet, we had 19 million transactions and almost 20 million unique wallets. But I think there are a lot of expectations of future airdrop built in there. We’re very motivated to make sure that our early community members are rewarded. The second part is post mainnet. we ran the first community campaign to try onboard developers, and to get people’s hands touching the Scroll L2 and to gather early feedback, we ran the Scroll origin NFT program. Through that, we’ve managed to get 1.3 million smart contracts deployed on chain. That’s an astounding number for a smart contract deployment. If you think about even a very simple ERC20 or NFT contract deployment, not many people know how to do it. I wouldn’t say it’s impossible to figure out for your average user, but it’s just a lot of effort. Hopefully, this led to a lot of people interacting more with the chain, thinking more about the stack from a hands-on way, and experiencing what it’s like to build on Ethereum.
Co-develop With the Community
Blair: Yeah, it sounds like you guys were aimed to lower the barrier for developers very much, gaining all that feedback from those developers directly and making iterations on top of it. I noticed that you guys actually made the decision to co-develop with the community from the very beginning and have been constantly following through on this commitment. I would say Scroll is very community-driven to me. Can you share the factors that influence your team to adopt this co-develop mission with the community? Is that something that you will consider as a must-have for a L2 project?
Sandy: It’s definitely not a must-have. This is more of an organizational thing. I think the origin of this community focus started from the founding story of Scroll, the core members met as a part of a wider community and we found our initial supporters and initial engineering team as a part of the community. So we were just kind of essentially built that way. We believe a strong community begets more community, and one after another, that’s just how the Scroll story started to unfold. We wanna remain true to that initial sense of energy, and everyone’s a part of a community and we’re here to share our code, our resources, and share what we know, and also to grow together. I think that’s a really nice way for people to get onboarded into whatever the journey that we’re on. It’s also how I initially got my start into crypto while I was making the transition.
Challenges Faced in ZK Rollup
Blair: I think that’s exactly aligned with blockchain and the whole Web3 spirits. I love that. Let’s talk about the competitions that we have with OP because there are a lot of controversies around optimistic rollups, and ZK rollups. Undoubtedly ZK rollups present higher development difficulty but offer a lot of benefits like instantaneous validations, consistent fees, and also stronger securities. So Vitalik has also expressed a strong preference for ZK solutions as well. Can you elaborate on the specific challenges faced in ZK rollup development compared to other solutions?
Sandy: I maybe want to take a step back a little bit first and just say, we have a huge respect for the optimistic rollups. They were early, and as a set, it’s more mature. Some of them have achieved a higher level of security and they’re great. We’ve learned a lot by observing their growth while we’re putting the team and product together. I think the network effects of being early is a huge advantage and I can see why it’s still a very competitive product. It’ll be interesting to see how things play out. It’s definitely way too early to say just because ZK is superior technology, this will win in the user adoption or go-to-market race. The way we see it, the minute you launch mainnet, everything resets. At least from our perspective, there’s a new type of growth phase that comes in from engaging more with users and figuring out what they need, and what users or developers tell us repeatedly is that they need still yet cheaper fees. That’s something that the optimism stack tends to provide. I think for us as a newcomer, the key is to figure out what are the use cases that absolutely need ZK. I think there are always gonna be projects that can work on both. From our perspective, we were in the process of discovering a few use cases that are sticky and can only work on ZK rollups such as Scroll. I think that’s gonna be the key to discovering more value and also to creating more value and new information, as opposed to going after the same customer set.
The Unique Advantage of Scroll
Blair: Yes, I’m actually siding with you on this. We’re definitely not trying to pick the winning solutions here. It’s good to see many players come in and figure out what kind of solutions could help us to solve the pain points along the way. Considering there are some challenges on OP and challenges on ZK like increased development complexity, and also decentralization issues, particularly on sequencers and provers, how does Scroll assess the current landscape of the ZK technology? We just wanna know what kind of strategy Scroll has in place to mitigate all those ZK challenges in particular. Moreover, there are a lot more players coming in like ZK Fair and Manta, what kind of distinctive features set Scroll apart as a unique differentiator when compared to other kinds of ZK solutions?
Sandy: I think we don’t really focus a lot on competition. We’re very focused on the developers, and at least our current ecosystem developers are constantly challenging us to add more features and be more compatible. These specific requirements we’re trying to respond to on a regular basis. That informs us of our technical roadmap going forward. I think a lot of the Polygon CDK stack projects will have the leeway to do a lot of interesting go-to-market experimentation. We’re keenly observing and learning from these exercises too. Hopefully, these lessons will be helpful for us when we see the need to put the gas pedal and accelerate our ecosystem growth. I think our core mission is to continue building out the tech stack in a way that our developers set demands. That’s a slightly different mission. I think some of the stack customer L2s are more focused on go-to-market alone, so there’s a slightly different dimension of competitive viewpoint. Our North Star is predominantly the type of project and developers, and the type of use case they’re working on, that’s net new to the space entirely. I think basically, the whole space is still so new and so nascent. It’s great that so many people are excited to experiment on the various competitive verticals and I think all of these things are helpful from our perspective in terms of seeing how the market responds. I think there are a lot of great lessons there.
Next Step for Scroll in 2024
Blair: Agreed. Including L2 scaling and ZKs, everything is super nascent. That’s the beauty of Web3 entrepreneurship because we get to experiment with different kinds of innovations and see different solutions, validating their theory and putting everything into production and we get to see the whole journey of it. My next question is what are the next steps for Scroll in 2024? Since you guys just released the 2024 roadmap, can you walk us through it? And also, are there any plans for token generation event? I think that’s something that the community would love to know.
Sandy: I think for 2024, our true North Star is the number of projects and developers that we support. A sub-goal of that is how many native projects and novel use cases we can create on the Scroll ecosystem. Anything that helps accelerate those metrics, we will consider. Other than that, probably can’t comment too much about these things.
Blair: Okay. From your Twitter, you mentioned a lot of things on your technical roadmap, like making things cheaper, more compatible, more secure, and more decentralized. Is there anything that you wanna add on top of what you just shared with us?
Sandy: Yeah. I think with each major technical direction, there are a lot of sub-things, like small things, incremental things we’re building that contribute to these goals. But on a high level, we can aggregate these goals and directions to being cheaper, faster, more decentralized, and then more secure. I think these are the four verticals that really matter and we wanna continuously improve on all four metrics. As a part of it, we’re also gonna be starting to experiment a little bit with adding features to the EVM. So I think as a part of Ethereum scaling vision, L2 should be the place to experiment with new things. If such things start to pick up adoption, then there’s a chance that this might get enshrined back into Ethereum, so that Ethereum doesn’t take these risky technical moves, and this innovation is the responsibility of L2s. I think that is the beauty of having so many great L2 teams who are able to take these technical bets in the direction of EVM growth. So we’ve seen the Arbitrum team take a big strategic bet in Stylus, which is incorporating Rust language smart contract development into part of their core stack. And Polygon similarly has taken a few major bets. I think you’re gonna see us making a few bets in various directions. These directions will most likely sit under the four main directions that we go into. So it’s either about the chain being faster, cheaper, more decentralized, or more secure. I think there are a lot of innovations that are very, very far along already internally. And we have a habit that anything that we talk about externally is probably very close to being implemented already.
Insights on Rollup Summer
Blair: Yeah, definitely looking forward to seeing more innovations and experiments on Scroll. We would love to know how you actually perceive the current whole L2 sectors. Because there are definitely multiple solutions and also a lot of players, experiments, and innovations happening in these sectors. People are making speculations on the whole rollup sector, saying that we might be seeing rollup summer in this market cycle. So what’s your take on this? Any insights that you want to share with everyone?
Sandy: I think if I were to put my investor hat back on, knowing what I know now about the L2 as a builder, I would say I can definitely see a rollup summer coming mainly because there’s a lot of rollups that have built through the bear, So there’s a lot of announcements, news, tools and POCs that probably will start to see user adoption and fruition come the summer. I think right now the investors set as a whole, this might be anecdotal, the macro view is that there’s a lot more attention on Bitcoin right now because of the ETF. There’s also a lot of attention on Solana as a whole because they’ve come out of the bear market with a very strong community and projects, and people are rallying around that ecosystem. I think come slightly later on in the year, more attention will come back to Ethereum. When I speak to investors, they are generally sleeping on the fact that Bitcoin still has a huge amount of emission, even with the halving coming, it’s still billions of dollars of new Bitcoin emissions per year. I think Ethereum has been in negative emission for almost 500 days now cumulatively. Do you want a cumulative asset with a new influx of capital allocation coming? I think these could be huge catalysts that kind of build on each other. And then the second thing is, I think it’s kind of spreading FUD saying L2 is fragmenting Ethereum liquidity and driving developers and users on different interfaces. I would probably disagree with that. I think that’s a view that thinks our current market size is already saturated. So that’s kind of a zero-sum thinking mindset. If you take the mindset, like zoom out a little bit, the entire crypto population compared to the internet population is absolutely negligible. Ethereum has essentially through the bear market, found itself in a position with multiple strong teams with different DNA, different setups, and different approaches to scaling the Ethereum stack and expanding the decentralized computer vision. All of these L2s are paying huge amounts of Ethereum gas fees because we want to pay for the premium decentralization and security standards that Ethereum offers. There is no other competitor in that vertical. And with the 4844 kind of upgrades coming up, hopefully in the summer, that’s gonna make all of the L2s even more competitive. We’re at the moment kind of like in my childhood where we’re playing games on the phone, like the snake games, in terms of how efficient the block space transactions are and how price competitive it is to most people. There’s still a long way to go. There are a whole lot of new use cases to be discovered. I think at some point, the L2 space will consolidate a little bit, but we’re very far from that stage yet. I think we can see more consolidation probably towards the end of the bull market. But at the beginning, I think all the L2s are very well prepared and will be going guns blazing because we’ve just done a lot of preparation for this.
Advice for Web3 builders
Blair: Thank you for sharing all those insights. Here’s my last question for today’s podcast. Scroll has secured a pretty substantial amount of investment. Some Web3 entrepreneurs are struggling with their product-market fit and investment, there are a lot of things that they may find challenging to overcome along the way. Are there any insights that you can share with other Web3 builders based on your own experience since you have a pretty unconventional background? Do you have any advice for projects looking to make a significant impact in blockchain space? What would be your secret recipe for keeping building up in crypto space with the whole fast-paced environment that things can go off easily anytime?
Sandy: I think my advice might be at risk of sounding very corny, but I think what I’ve learned in the last two or three years building Scroll is that we need to, A, find an area that is very interesting, at least you feel like you can resonate with the mission because it’s a long journey that requires consistent efforts. You need to really believe in the future that you want to build. It sounds corny, but I think it does help a lot when you’re trying to pick a direction or a product to build. The second part is you need to find yourself with the right kind of teammates, and people with the right kind of values. Whether bull or bear, there’s always going to be different incentives and different choices facing the team. You need that core group of people who given a similar situation will make similar kinds of decisions. And that comes down to core values and the why of the organization. I think we were very lucky to get that right in the early stages of Scroll. I think if I were to be an investor again, having spent some time being a builder, I would think about the infrastructure space as a very, very fast-evolving one. There’s never been so much competition at the infrastructure layer in Web2. So the social dynamics and then the long-term positioning are various verticals of competitiveness that need to be considered. But again, just thinking from the first principle, is this tech direction going to work? Is it going to have an attraction? Is this effort going to drive value to the core people who are contributing? So these are all things that I would think more deeply about if I were an investor again.
Blair: well, thank you so much for sharing all those insights and expertise. Those are really authentic and I’m pretty sure we’ve learned a lot today. Thank you so much for coming today, Sandy.
Sandy: Thanks for having me, Blair. It’s been great chatting with you and good luck with everything this year. Stay in touch.
