[00:00:04] Elisha Owusu Akyaw: Did you have the light bulb moment in your head immediately, or did it take a while?
[00:00:10] Roy Hui: It was even on in A Big Bang Theory. Sheldon was just talking about it.
[00:00:14] Elisha Owusu Akyaw: And that really sent shock waves down the entire industry because that’s not effective, and that’s scary.
[00:00:23] Roy Hui: Our mission is to accelerate the world’s adoption of Web3.
[00:00:27] Elisha Owusu Akyaw: What’s up, crypto fam? Welcome to Cointelegraph’s Hashing It Out. I’m your host, Elisha, and you can find me on Twitter at @GhCryptoGuy. On this show, we will talk about crypto and everything Web3 with upcoming talent and leaders in the space. We will be taking you on a ride around the crypto block, answering questions and highlighting the next big innovations in the space. Before we dive in, remember to follow us on whatever platform you are tuning in from so you don’t miss another episode. And if you want more crypto news as it happens, check out cointelegraph.com. It’s time to hash it out.
Hello everyone! Welcome to another episode of hashing it out with your boy Elisha, @GHCryptoGuy. And on this episode, we are speaking to Roy Hui, CEO and co-founder of LightLink. We are going to be talking about layer-1 blockchains. And just like building new technology or new blockchains in the Web3 space in 2024, especially after multiple layer ones have come online and have already started capturing a very huge part of the market share. Hello Roy, and welcome.
[00:01:37] Roy Hui: Hi, Elisha. Thank you for having me. It’s a pleasure to be here today.
[00:01:41] Elisha Owusu Akyaw: So I’m really excited to talk about layer 1 and layer 2 networks. LightLink is a layer 2. And we’ve seen a lot of layer 1s and layer 2s come out this year. And multiple have come out the year before. There’s a new joke that every day, a new rollup is launched. Right from the bat, let’s discuss that. Are we running into a layer 2-layer 1 problem? Do we have too many blockchains?
[00:02:05] Roy Hui: I think when you consider the number of people in this world, the number of transactions that we do on a daily basis in terms of we riding a bus or playing a video game, there’s not enough capacity in all of the blockchain combined right now, but at the same time, the space is getting really crowded because there are only so many applications that’s utilizing on-chain transactions, right? Like you’re not doing a lot of the payments using the blockchain tech. We’re not playing games or riding buses using the technology, so we’re not really there yet. And therefore, the capacity that we have and the chains that’s currently servicing the market, I think there is a bit of saturation. I completely agree with you.
[00:02:46] Elisha Owusu Akyaw: Sounds interesting. We are going to dive deeper into this as the conversation goes on. But let’s start with the most boring question to ask everyone else. The question is, how did you get into Web3?
[00:02:57] Roy Hui: So, firstly, I am very curious about technology. I have a computer science degree, so very naturally inquisitive about new technology. And you know, Web3, blockchain is a technology that’s really hard to ignore if you like technology, you know, taking a look under the hood, seeing how this new fundamental shift of data, of record keeping, of persisting truth, this type of technology didn’t exist before and its impact would be tremendous. So, when I first read the Bitcoin white paper in 2012, it was very revolutionary. Personally, I’ve been in technology for the past 23 years. A lot of different things built companies in media, in e-commerce, in social media. And in 2017, in the first ICO boom, essentially triggered by all the excitement in the industry, we decided to build a capability in Web3. So, six years ago, we founded a company called Pella, and that built our Web3 solutions. We built fungible tech, nonfungible tech, everything from, you know, asset tokenization to NFT minting to payments to crypto exchanges. So we’ve done probably over 50 different projects in Web3 and seen a lot and had fought a lot of different battles and have the scars to show for it. But certainly, very experienced veterans in this space.
[00:04:29] Elisha Owusu Akyaw: Sounds interesting. We’re going to be discussing some of those battles that you fought in a bit. For someone who has been in the space since 2012, you read the Bitcoin paper back then. After reading the Bitcoin white paper, how long did it take from reading the Bitcoin white paper and then getting your hands dirty in the Web3 space? Did you have the light bulb moment in your head immediately, or did it take a while?
[00:04:52] Roy Hui: It took a while. That gap was five years by going in full, falling in building a blockchain solutions company, right? But back then, I just thought it’s a internet technology. You know, it’s magic internet money. I actually bought some Bitcoin on Mt. Gox back in 2013 and were just distributing it to our forum moderators who were running a social media business were distributing it to our admins as a form of reward because it was just a recognized form of value. Right. And there were a lot of people talking about technology. It was even on, you know, Big Bang Theory. Sheldon was just talking about it. So it was premiered into popular culture, and there were a lot of experimentation, but I didn’t really go full in until there were more people experimenting, until essentially when Ethereum came around, right, when you had that programmatic capability. And that was really interesting because it not only unlocked, hey, here’s a new form of how data can be stored, i.e., Bitcoin, but on this set of data set of this capability, let’s add ability to program, ability to compute. And that was the light bulb moment to go. Oh, actually, there is a world-changing capability here. It could be how our humanity record data going forward. And fast forward to today. Some of that aspirations came true. Right. Like we, everybody’s heard of blockchain. Heard of crypto, heard of the merits of the technology in a way it hasn’t really presented as how I thought it would. And that’s also really interesting to unpack.
[00:06:32] Elisha Owusu Akyaw: Yeah, so the next question then would be from the perspective of someone who has been here for a long time: how far has the industry come, and what stage are we at right now?
[00:06:45] Roy Hui: Interesting. I think the industry has many different participants, right? There are air quotes investors who would speculate almost treat this network that we have built as a casino. I put $100 into a random coin, and maybe sometime over the next two months, you will turn into $1,000. There’s lots of value being exchanged, and that’s one type of participants in the industry. And I think there are because it’s global, it’s decentralized, it’s permissionless. Anybody can participate in that global casino. And there has been a huge wave of participation purely because of the value layer that we have created. But there are also people who are building financial capabilities in terms of the ability to borrow permissionlessly, the ability to transfer funds without an intermediary, the ability to swap between different assets, whether if it’s, you know, BTC to USDT permissionlessly, and it’s just really interesting building a new financial capability using this technology. But there are also people who would see past all of that and go, actually, this is the future of our humanity. What can we do? What’s the most value we can create in this new technology revolution, essentially, right?
And can we create a new financial world? Can we create a new form of record-keeping? And yeah, I think there are many different shades of participation in the industry, but certainly, we have matured a lot. There are more and more regulations, and that regulatory clarity is really important because it allows all of us to innovate with the right boundaries. There are global organizations who oversee and guide how the industry evolves, and from a largely decentralized, loosely coupled group perspective, it’s really healthy to have, you know, oversight and treating it as a legitimate industry to innovate from. So, yeah, I think we’ve grown a lot. But at the same time, like I said initially, we’re not using it in all the games that we’re playing, hardly any game that we play, right? We hardly using it in the day-to-day lives that we live, whether if it’s paying for transportation or paying for groceries or sending funds to, you know, people abroad. I mean, we use that from time to time, but it’s still very early days, in my opinion.
[00:09:11] Elisha Owusu Akyaw: Really in-depth answer. I tend to agree with parts of what you just said. So, let’s get into what you are building: LightLink. How did the idea of LightLink come about first? And secondly, what is LightLink, and what are you building?
[00:09:26] Roy Hui: Like I was saying at Pellar, we’ve been building for the past six years, and we’ve done numerous projects in this space. Right. And the solutions we had for our customers for ourselves, were essentially two schools of capabilities. One is using an enterprise blockchain, and that’s essentially a very disconnected economy. You know, we had a lot of control. We were writing transactions into a privately ran blockchain, but it was really difficult to connect to the traditionless, you know, open world. Every time we wanted to use a DEX or a stablecoin, we have to build all kinds of different infrastructure to connect to that world. So, it was very disconnected. And when we were building layer-1 projects, take Australia Open, for example. It just didn’t have the capacity, the cost capability in making thousands of transactions at the same time. So we were running into a lot of latency and cost-base issues. So, layer 2s, as an architecture, is somewhere in the middle. And with all these projects that we were building, we were constantly looking for that solution. And when this school of engineering, this type of architecture was surfaced and, I thought, actually, we can add a lot of value by solving the problems that we saw in the industry and working with our partners and build a layer 2 ourselves. It just didn’t. There were no solutions out there in the wild which really suited our needs.
[00:10:56] Elisha Owusu Akyaw: Interesting story about how we got here. So what is LightLink, then?
[00:11:00] Roy Hui: Yeah, LightLink is an attempt to solve all the problems that we saw in the industry. LightLink is a layer-2 EVM equivalent enterprise-ready blockchain. It’s open, it’s permissionless, it’s very familiar for those that are programming the EVM ecosystem. And LightLink has this key characteristic, which is the ability to offer predictable, high velocity, low cost, low latency transactions. So it’s an infrastructure. It’s a blockchain designed to onboard millions of users from Web2 into Web3.
[00:11:39] Elisha Owusu Akyaw: Considering how we started the conversation and the fact that we spoke about the increase in layer 1s and layer 2s, how is LightLink building in a way that sets you apart from other projects?
[00:11:51] Roy Hui: Yeah, sure. Uh, there are no other public blockchains out there with the same economic model as LightLink. When you look at how transactions are conducted on a public network, you essentially need to pay per transaction. When you send USDT on Polygon, you know, Binance Smart Chain, Ethereum, you need to pay, you know, a native token as a transaction fee, right? So, that capability, that restriction that, you know, transaction fee model doesn’t really map to the real world. You know, when you go to a coffee shop to buy a cup of coffee, you don’t really need to spend Mastercard coins for your, you know, dollar or euro to go through. Right? So it’s really difficult to port that idea in terms of transaction fee to the real world. And that’s why the innovation that we have unlocked here is the ability for users to transact gaslessly without a transaction fee. And that transaction fee is essentially paid by the enterprise customer on the other side in a more predictable manner, in fiat, in a, in a certain, in a very determined capacity. So yeah, that’s our key characteristic, key difference. And the reason why we have done that is when you look at layer 1s, you know, having the highest decentralization, the highest level of security, transaction fees are really high. It’s really difficult for you to add scalability to that equation. So layer 2s came around and go, hey, let’s add scalability and relying on the decentralization security of layer 1. But because adding scalability also proportionally talk about lowering gas fees. So maybe gas fees now changed from a dollar to, you know, $0.10 or $0.05 or even $0.02. But that still adds up if you’re doing millions of transactions every day. Right. And if it’s trending toward zero, our big question is, why not make a zero? So that’s essentially what we’re trying to do by removing gas fee for the user, so it’s much easier for people to come and use the system, and making a bit more predictable for all the different Web2 or enterprise customers that’s paying gas.
[00:14:02] Elisha Owusu Akyaw: One of the most interesting conversations about the alliance and Latas is the blockchain trilemma and where layer 2’s compromise. So it’s security, scalability and decentralization. And one of the biggest pushback against layer 2’s is the conversation of decentralization and how these layer-2 platforms are less decentralized than their layer 1 counterparts. Is there a way LightLink is looking to fix this, or is this something that you think a lot of users or consumers are willing to compromise on?
[00:14:40] Roy Hui: Yeah, great question. It’s something that we think about constantly. We of course, to build fast, to iterate, to get things out the door, we had to focus on initial centralization as a concept. We trusted layer 1 being very secure, very decentralized. So when we roll transactions into layer 1, we can trust that that essentially becomes the final, final say. And between the delta of where we place our proofs of layer 1 to the last proof, there is a degree of uncertainty, right? So that’s the compromise we are making. But at the same time, we are constantly challenging our engineering capability and our engineers to look at how can we add further decentralization and further security. So it’s something that we have worked on for quite a long time, and we have deployed a new capability into our testnet. And that project codename is called Hummingbird, and it utilizes substantial architectural changes to ensure we deploy a system with additional level of decentralization, additional level of sensor proof, as well as additional level of security challenges and the ability to roll back the chain if the public wants to challenge us. So we are working with great partners as Celestia, which I think you are fairly familiar of being prescribed to the modular blockchain thesis, to even borrow some of their security decentralization to make our network better, more higher score in the trilemma, essentially, because I think we’ve got, you know, scalability sorted and it’s important to address the other two.
[00:16:20] Elisha Owusu Akyaw: Another interesting thing about layer 2’s is we’ve seen a couple of layer 2’s become dead towns, for lack of a better description, after things like airdrops and initial liquidity attraction events. What maybe there isn’t a right way to build a layer 2. So I was initially going to say what’s the right way to build a layer 2 that is sustainable, but what is the best way to build a layer 2 that is sustainable in the sense that it has amazing DApps that users want to use, and it has a good number of users who are actively using the platform. Recently, some research came out about some layer-2 platforms, and one of the layer-2 platforms had eight active daily users. And that really sent shock waves down the entire industry because that’s not effective. And that’s scary considering the number of layers that keep popping up.
[00:17:17] Roy Hui: Yeah, great question. Fantastic observation, right. And I think a lot of the metaverses have a similar struggle. I don’t think it’s a all boats in the in the river rises at the same time type of equation. Getting the fundamentals, getting the economy, getting the community right are probably the most challenging things, right? The technology is out there. It’s open source. And if you have the technical means, you can spin up layer 2, fairly easily, even though with rollup as a service capability these days. So our mission at LightLink is to accelerate the world’s adoption of Web3. And our strategy in terms of how we do that is work with our Web2 partners to onboard Web2 projects, enterprise projects into Web3. And our hypothesis is the existing crypto community is fairly small. But when you look at all those examples that I’ve made previously in terms of gaming companies or media companies or public transportation companies, there are millions and hundreds of millions of users that can benefit from this technology. There might not be interacting with cryptography, private keys or seed phrases.
There might be logging into their account, their app using an account abstraction capability, and being able to transfer one token from their wallet to the next, or buying a digital asset or, you know, borrowing some money or being able to earn some interest, you know what happens behind the scenes in terms of which smart contract to interact with might be very transparent to the user. So that’s our vision. We’re working with great partners to make this happen. And in fact, one of our largest investors in LightLink is one of the largest, part of one of the largest conglomerates in Asia. So they span from real estate to retail to media to gaming. So yeah, there are a lot of great partners we have built over the years, and we have done many different projects with our great partners, and we’ll continue to do so. So, I think there is a path here, there’s a technology here, and we have been establishing meaningful relationships in our network for a very long time, which we now have the technology to help them to scale.
[00:19:31] Elisha Owusu Akyaw: I think another interesting piece of this puzzle is also attracting developers who would come on to these layer-2 platforms or networks and build for their users. How is LightLink navigating that?
[00:19:45] Roy Hui: Yeah, we treat the whole gasless capability as an innovation to challenge developers to have a different mindset when they’re building their DApps. Take a DEX, for example. When you look at AMM as a protocol, as an algorithm, it’s the most efficient algorithm and, therefore, incurs the lowest gas, and therefore, it gets used more. Right. And that’s why AMMs are utilizing DEXs only once. But later theories don’t really have the same challenge. And still, arms are the most popular algorithm because of that familiarity. But what happens if we’re able to remove that restriction? Can you build technology a little bit differently? Can you do different types of trading that users might see better economic return on, or participants in this ecosystem or this financial system might see better return on? So, we try to unlock different levels of innovation using the core premise of our technology. But at the same time, we’ve done three hackathons so far, and we’ll be doing quite a few more hackathons in the future. The last hackathon we did was with Encode, and hundreds of different projects participated. And we’ve seen some really interesting projects utilizing the whole gasless nature of this network. And I think building a vibrant developer ecosystem is really important, and I’m fairly glad we have chosen the route in terms of how our technology is architected. You know, it’s solidity, it’s EVM, it’s Ether as the native token or the existing tool sets will work. And therefore there’s a lot of interoperability. So, reducing barrier to entry for developers to enter for them to experiment and for them to port over existing code I think is very beneficial.
[00:21:26] Elisha Owusu Akyaw: You mentioned, while explaining what LightLink is, that you are enterprise-ready and you’re looking to work with enterprises. What sector of life do you see enterprises adopting Web3?
[00:21:42] Roy Hui: Um, a couple of years ago, when we built many different NFT projects, we saw a substantial amount of large brands experimenting in this space of can they use Web3, use NFTs to shape the future of their loyalty? Can they create a different type of business model with enabling secondary trading for their memberships? You know, there are all kinds of really interesting conversations that happened in that period, and I hope we can see that again in the next bull market. Maybe we’re in one at the moment, right? As more attention comes back to this space, I’m sure some of those Web3 professions would return into the ecosystem. So, I think in our experience, we have seen easier conversation with gaming companies than the financial institutions. So we have quite a few different games on the ecosystem like the Red Village, Teleop, Grapes, and we have a fantastic partner, Animoca Brands, who are building heavily investing in the Web3 ecosystem. And I think gamers can benefit a lot from technology and suddenly revolutionizing the industry. But then, I think many different industries from, you know, registrars, whether it’s land titles or marriage titles to supply chain to, you know, financial systems, can benefit from Web3.
[00:23:00] Elisha Owusu Akyaw: I think another interesting perspective would be what is currently stopping the enterprises from adopting Web3. We’ve seen a big chunk of institutional investment come in, especially with the Bitcoin ETFs and a potential Ethereum ETF. We’ve seen more companies come into the space, but for the companies that aren’t in the space yet, what could the reason be?
[00:23:23] Roy Hui: Yeah, quite a few, actually. One, the reputation, the whole online casino type of environment is something that I spoke about earlier, but also the complexity, the high barrier to entry to having seed phrases, downloading a browser plugin, and if you sign the wrong click the run button and sign the wrong transaction, all your money would disappear. You know, that, uh, level of complexity and risk would really jeopardize enterprise adopting this technology, but also that uncertainty. And that’s something LightLink is solving in terms of when we were talking to good folks at Bank of Japan when they’re experimenting with this technology, their finance department needs to procure Ether for them to, you know, deploy a smart contract, but they don’t know where to hold this Ether. And when they run out of their native tokens, Ether, they don’t know how to, you know, it’s a couple of weeks before they can buy new cryptocurrency. So that interacting with the cryptocurrency as a form of infrastructure cost is really difficult. And one transaction might be $10 and next month it might be $30, right? So that lack of predictability is also something that they are struggling with. And that’s actually exactly why we built LightLink, because we over the past six years, we’ve been speaking to so many different CTOs and CEOs, and we’ve heard their reservations. And this is our solution to go, hey, let’s build the capacity, let’s add reduce the latency, and let’s look at a different pricing model, a different economic model for all the participants of the network.
[00:24:57] Elisha Owusu Akyaw: On your end, as the developers building for the enterprises and just as developers building the layer-2 network, what are some of the challenges you face?
[00:25:06] Roy Hui: Education, I think, is a big one, but I think more and more enterprises are experimenting and having a better understanding of this technology. And with larger companies, I think the ability to make decisions and moving something into production and taking that risk is really difficult for a organization to adopt, right? Because if you launch something and fail, it’s reputation of the larger industry. But at the same time, we’re seeing a great companies experimenting in this space, right, like Nike and Puma and, you know, many, many different brands looking at the technology and doing smaller bets in terms of where the future is and this being one of the emerging technologies in the world.
[00:25:55] Elisha Owusu Akyaw: So talking about brands and brands adopting Web3, is LightLink working with any brand currently?
[00:26:03] Roy Hui: Uh, yeah, we have quite a few brands that we have onboarded. Like for example, we’ve been building the Australian Open digital collectible project for the past three years. Right? And this year, we did a commemorative, uh, capability to all the Australian Open holders, unlike link itself, uh, we’re also working with TMB Media, which is one of the largest conglomerates media companies in Asia. So, there are quite a few really interesting movie titles that are being tokenized on LightLink at the moment.
[00:26:33] Elisha Owusu Akyaw: Yeah. I think another interesting thing, and correct me if I’m wrong, is I saw LightLink doing an airdrop recently. Is that correct?
[00:26:41] Roy Hui: Yeah, yeah, exactly. So, to bootstrap a new community, I think we need to offer incentives. Airdrop is a very typical incentive model to do that. So yeah, we are in our second stage of airdrop. We’re using Galaxy as our testing platform. And I think hundreds and thousands of people have participated in the quests.
[00:27:01] Elisha Owusu Akyaw: My follow-up question is, is it difficult doing an airdrop in 2024? Is it hard to do an airdrop that makes most people in the community satisfied?
[00:27:11] Roy Hui: Yeah, it’s such a good question, right? Because when you look at the best networks out there, like, I highly respect Optimism, Arbitrum, and, you know, all the different protocols and Uniswap and ENS and all the OGs in the space are bootstrapping the community using the airdrop and the sentiment around those economic activities. Right. It’s not enough. Oh my God, there is so much of it. I’m going to sell it and convert it directly into USDT. All of those economic actions convert into different types of attention. So you’re right, like it might attract different types of attention. Is it enough of an incentive for participants for people to come and stay within the economy? I think we will definitely experience a substantial, not 100% people will convert, that’s for certain. In terms of actively participating in contributing to the economy, a substantial percentage of them would definitely drop off. But yeah, you’re right; it’s a form of incentive. We really need to incentivize people not only from the airdrop but as a reason to stay, as a reason to interact and hold token and participate in our economy.
[00:28:19] Elisha Owusu Akyaw: As someone who farms airdrops myself, its also become a very interesting situation for we the airdrop farmers or, as someone from another project said, the eBay guys. I look forward to seeing how airdrops evolve, especially with more wallets online, with more people. Just like knowing and understanding what it means to farm an airdrop. Looks like we are in for an interesting couple of months. The next thing would be specific areas where people really need crypto adoption. I understand that LightLink is doing a lot in the APAC region, and what has LightLink been looking into in that region? What are the opportunities for Web3 adoption, and how are you looking to realize them?
[00:29:05] Roy Hui: Because we’ve been building for the past six years on the Pellar, not only under LightLink, we’ve been looking at a vast array of different industries and applications from tokenizing government bonds. So we’re with one of the largest investment banks in Thailand to divide larger government bonds into smaller, more accessible allocations for retail participation to fractionalizing real estate, to look at many different types of financial applications. And all of these use cases can be deployed right onto LightLink because it’s just more suited for enterprise applications. But outside of those things, payments is a big one. We have a lot of ambitions, so I tried to introduce the technology into a maybe a reserve bank or a public transportation company or a critical part of fabrication of our society, right? Because this technology is much better than the previous generation of the technology we are working with. So, yeah, I mean, things that we want to add value to the real world. We want to be an important part of the society fabrication, the digital networks of everyday lives. And we’ve been talking to many different businesses and industries about how we can add value, and hopefully, we can even migrate some of the projects that we have done in Pellar to LightLink because they are we have some very well-established projects in the space.
[00:30:30] Elisha Owusu Akyaw: My final question for you before we wrap up, the next couple of months in 2024, everyone is still bullish despite the bearish situation we find ourselves in. While we are recording this podcast, people are saying the bull run is still going to happen. The halving is going to kick in. What is LightLink up to in the rest of 2024? What does the future hold for LightLink?
[00:30:51] Roy Hui: Thanks for the question. From our perspective, keep on building. We’ve been building for the past two years in LightLink. We’ve been building past six under, you know, various Web3 projects I’ve been building in the past 20, right? So keep on building and believe this DeFi. And we have our North Star in terms of adding value, helping global brands to migrate to Web3. And we have lots of really interesting things in our pipeline, just like the couple of opportunities which I shared earlier. Also, our validator node being available. I look forward to Hummingbird being online, and I think from a testnet perspective, we’re one of the largest users of Celestia, so keen to see how all of that pan out in mainnet. And yeah, we have lots of really interesting things in the pipeline and keep on building and share all of that capabilities with our community.
[00:31:40] Elisha Owusu Akyaw: Sounds great. Thank you very much for joining me on this show. I look forward to talking to you in the future.
[00:31:46] Roy Hui: Great. Thank you for having me. It’s a pleasure.
[00:31:48] Elisha Owusu Akyaw: All good things must come to an end, and so does our show. You’ve been listening to Hashing it Out by Cointelegraph, where we talk about crypto and everything Web3. I’m your host, Elisha, at @GHCryptoGuy on Twitter, and if you liked this episode, please make sure to subscribe and leave a review. Please do this; it will really help us out. I need to get out of my mom’s basement. Don’t get me fired. Subscribe wherever you are listening to us, leave a review and have a great day! Thank you.
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