Crypto Veteran. Tokenization, DeFi and Security Tokens - Blockchain.
Ishan Pandey: Hi Justin, welcome to our series “Behind the Startup”. Please tell us about yourself and the story behind Telos?
Justin: I’m Justin Giudici, the CPO of the Telos Foundation and Co-founder of the Telos Blockchain Network.
I was one of over 150 participants who founded and launched the network in 2018. The participants of that launch came together around a shared vision for a scalable, high-performance network that was well-governed. We utilized a software called EOSIO by block.one and built a robust governance framework off it that delivered decentralized and fair governance tuned for innovation and network effects. To this day, Telos (Network) outperforms newer and unreleased platforms like Cardano (ADA), Polkadot (DOT), and Ethereum 2.0 (ETH).
There is no single company behind Telos. It is a genuinely decentralized chain run by over 50 validator candidates that the TLOS holders elect to operate the network. So it is entirely community governed.
The network has a massive capacity (10,000+ TPS) and is currently the highest-ranked chain on Blocktivity both in terms of the most daily transactions and in the Blocktivity value index, which rates the most undervalued L1 tokens in terms of usage vs market cap.
Network has no gas fees (except for occasionally needing to buy some RAM) and has 0.5 second block times.
Ishan Pandey: According to you, what is Web 3. How will it disrupt the tech industry?
Justin Giudici: I’m going to give a bit of a long-winded answer here and break down the evolution of the web and how it relates to the transfer of data/information/value.
Web 1- Focused mainly on the transfer of information from servers to users, with email and IM and forums being the major exception to this. Emerging of one-way commerce.
Web 2 - Two-way information transfer - between corporations and users, and users to users via corporations. Platforms take the majority of profits and share some revenue with users who have popular content. I.e. YouTube.
Web 3 - Three-dimensional value transfer and creation, information and authority distribution are utilizing blockchains to make decisions and distribute wealth via enforceable contracts collectively.
I’m focusing only on evolution in terms of how distribution and wealth is created and dispersed. Web 3 is in the process of disrupting the tech industry and even the future of work completely. I have absolutely no doubt in my mind that projects which open up more opportunities for end-users to turn into collaborators/partners will attract more viral platforms than we have ever seen before. Just as we have seen an explosion of e-commerce through the internet, we will gradually but surely see an explosion of the Web 3 economy.
To provide a contextual example of how and why I think Web 3 alternatives will beat out Web 2.0, I think that over time platforms such as YouTube, which only reward top performers, will be outperformed by upstart Web 3.0 alternatives that reward users from their first video, referrals, curation and other tasks from day one.
Another major friction point of these Web 2.0 platforms is the requirement of connecting a traditional bank account to monetize content. History has shown us that you get significant adoption when you drop the barriers to entry and increase incentives or savings. Look at Uber, Robinhood and other platforms that empower users as an example.
Ishan Pandey: Can you explain how the dAPP governance engine works and its advantages in the ecosystem?
Justin Giudici: A dapp governance engine is a set of smart contracts that any project can use to enable enforceable voting decisions between collaborators.
In practice, it works by allowing a project to spin up a new treasury of tokens which can then be given or sold to members and allowing selection of voting census (1 token 1 vote, 1 token many votes, 1 account 1 vote etc.).
Such examples we have already seen include elections, board budget approvals and decision making, Council elections and community-wide DAO decision making or work fund allocations within projects. The technology works for small groups of say 5 and groups of millions or more and anywhere in between. Its incredibly powerful, verifiable, transparent and secure, unlike current technology used for elections or decision making.
Ishan Pandey: Please elaborate on Telos’s smart contract ecosystem and how it is different from other blockchains?
Justin Giudici: The blockchain network already supports EOSIO C++ based contracts with 0.5s blocktimes and 10,000+ transactions per second. These are highly performant smart contracts due to C++ being an incredibly efficient language. This efficiency is why the language is used for purposes such as Operating Systems and handling 3D rendering for gaming and movies, amongst a number of applications requiring high performance.
Very soon, we will have a blockchain EVM, which enables Ethereum based contracts, such as those using Solidity, to be deployed on network effectively at the same speed and performance. This opens blockchain up to the largest developer community and library of open source contracts available today. Between the two protocol technologies blockchain supports, the network is compatible with the majority of apps that dominate Dapp Radar.
Ishan Pandey: According to you, what are the best practices that should be kept in mind while writing code for smart contracts to ensure cybersecurity?
Justin Giudici: I’m not a developer myself but from a product manager perspective, it is absolutely critical to get an audit completed on the code from a reputable firm. As for writing the contracts, it’s generally advisable to utilize heavily audited and vetted code where possible.
Ishan Pandey: What are your views on NFTs and what can be NFTs most disrupting use cases applied to the real world?
Justin Giudici: It’s an incredibly exciting time for NFT’s right now, with some massive digital art sales on Ethereum and huge brands getting involved, such as the NBA with Topshot on Flow. However, most of the current popular applications of the technology will be a small niche and make up a very small part of the overall NFT landscape in future.
The most disruptive application to me (in terms of valuation) would be the ownership of the property being held in the form of an NFT. I just think there are too many middlemen and too much overhead required to verify ownership and transfer property based assets such as houses. I also think a tremendous amount of value can be unlocked if ownership can be fractionally transferred, verified and borrowed against instantly from anywhere in the world.
On the network, we have seen some very novel and exciting applications of NFT technology, including Zeptagram, where the NFT’s represent music rights for specific songs and fungible tokens are issued for the fractional ownership of those music rights NFT’s.
We also issued T-Bonds, which were NFT’s that lock up regular tokens for periods of time and can be transferable and redeemable at a given date. The use of an NFT instead of a normal lockup contract allows sale and transferability that does not affect liquid markets.
So, I see NFT’s working hand in hand with fungible tokens. I believe that the application of this tech with real, tangible, valuable assets will be huge in the future!
Ishan Pandey: Recently, Ethereum surpassed $4,000 for the first time, setting a new peak in a spectacular rally that has outperformed bitcoin. According to you, between Ethereum and Bitcoin, which cryptocurrency will hold the #1st position in the future?
Justin Giudici: That’s a tricky question. The short answer is whichever one builds the most significant adoption and community over time. The huge thing going for Ethereum is that it’s an incredibly popular asset to lock up in smart contracts for AMM pools. This is because smart contracts make it natively more useful than $BTC. On the other hand, BTC has a better and stronger narrative that everyone in the world now understands. Technically, even though its native network is very limited, Bitcoin could still be used in smart contracts, on any other network and with scaling, it could be used for payment for anything.
It’s not entirely impossible for both of these coins to be surpassed by a network like Telos, which drives real-world awareness, value and adoption better into its economic model. So, much of the focus and effort goes to securing the Bitcoin and Ethereum blockchains currently, which in itself doesn’t increase awareness or adoption of these currencies significantly.
Ishan Pandey: What new trends will we witness in the crypto market, especially in the post-covid-19 era?
Justin Giudici: Collective governance, working together from afar. New models of creating, working together and distributing value. Particularly, I feel we will see a rise of crypto native entities more and more. I should clarify what I mean by ‘crypto native’, a term Brian Armstrong from Coinbase coined. I mean projects that are born and operate entirely within the crypto universe.
Telos and even the Telos Foundation pretty much operates and pays out for wages, services, legal, marketing and everything in between solely using cryptocurrency and crypto-based processes (ie. multi-signatures and decide based elections). The amount of friction and costs this reduces, making it possible to bring in new contributors from all around the world, is rather significant.
The use of tokens instead of fiat is also groundbreaking. Had blockchains such as Telos operated in fiat currency instead of our own, there is no way that we could have operated for over 2 years, with 100s of contributors, unless we had incorporated the help of a fundraising initiative.
The ability for a group of collaborators to create, circulate and autonomously govern their own currencies and economies is a revolutionary idea. Currently, there are inefficiencies in the ways in which the world mobilizes around a common goal, and I think the Covid-19 pandemic revealed that. So, I believe that the trends we see towards Web 3.0 are only just the beginning of a massive societal shift.
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