Ethereum's High Gas Fees is Limiting On-chain Activities

Ishan Pandey: Hi Abhimanyu Kashyap, welcome to our series “Behind the Startup.” Please tell us about yourself and the story behind Safle?

Abhimanyu Kashyap: A self-taught technologist, I spent my early years studying and learning Blockchain. While pursuing Msc in Nottingham, I got introduced to Bitcoin, became an early RAM miner in October 2011 and supported SlushPool until late 2012. After getting a Masters in Communications from Nottingham, I went on to build and market the fastest loan engine (Moneyloji) in India, and am now focusing my energies on building infra - tools for the decentralized modern web. The tech stack was built with just one dream, to streamline the crypto sphere. I believe people should get back what’s rightfully theirs - Data, Wealth, Privacy and Security. I have been building communities for nurturing the adoption of blockchain technology in and around the Indian subcontinent since 2016. Since the inception of bitcoin and crypto exchanges, there have been many cases where the exchange has been compromised and users have lost their funds. In order to move ahead with the decentralized finance space, Ethereum and other smart contract supportive blockchains have created such diverse solutions for automated market making and other money market protocols to reduce the threat to users’ funds with custodians. Safle started with the vision to give the right of funds, identity and developer tools to the ones wanting to move to the blockchain without any further compromises.

Ishan Pandey: Safle recently raised $900k seed to launch next-gen multichain identity wallet and Web 3.0 infrastructure. What advice would you give to young entrepreneurs on how to raise money from investors?

Abhimanyu Kashyap: To all the budding entrepreneurs reading this while the internet is full of stories of startups where money simply landed on the founder’s lap. But this isn’t the norm, nor should it be expected. Fundraising is hard and taxing, no matter what anyone tells you. But I would like to share some honest lessons I learnt through my journey -

1. Find people that understand your vision. Approach those angels and investors who understand your foresight and are happy to be part of the journey as a whole and not just looking for profitability and ROI.

2. Always approach investors ready with a solid plan to build, execute and market the project. Always find your target market and the needs/ inefficiencies that you would like to solve for the addressed market before you step out to raise funds.

3. Always be open to taking advice from your mentors and angel investors, who will support your entrepreneurial journey and select the right set of partners that can provide value addition apart from just financial support. Seek who can bring market access, help you with marketing opportunities (PR, new user acquisition), legal and regulatory support, research and development and so on.

No matter what happens, the journey is a teacher in itself, don’t be afraid to make mistakes as long as you learn from them. Have faith in what you believe in and others will follow.

Ishan Pandey: What are your views on the recent FATF recommendation that says that DeFi protocols may fall under the definition of VASP?

Abhimanyu Kashyap: There are two possible positive outcomes; the regulators will spend more time digging deep into Defi protocols and understand how decentralized the protocols really are. Secondly, the entrepreneurs and developers will be forced to build truly decentralized projects in spirit and letter. The distinction between VASPs and DeFi protocols will then become obvious and separate regulatory frameworks will apply.

If countries are too hasty in applying the FATF recommendation, then innovation in the Defi space will continue slower.

Ishan Pandey: Tell us about your views on Web 3 and how is it different from Web 2?

Abhimanyu Kashyap: The shift from Web 2 to Web 3 has resulted in a focus on decentralization and censorship-resistant web. Web3.0 is all about open internet without data censorship

Currently, even if user data is not monetized and sold to third parties, it is possible that the servers and databases can be breached. Rather than storing data in centralized databases, in web 3.0, all user data is stored in secure and decentralized data storage protocols. A thing that makes me love web 3.0 is that the individuals once again become customers and not products which was the case with web 2. Web 3 is about working together and sharing value across an open network.

We are contributing to building this next-generation internet through an open, transparent and democratic way of governance with token holders able to decide the project’s future and specifically how the protocol and tech stack operates. We are working on bringing innovation to the adoption of this technology by providing highly secure, transparent and easy to use developer SDKs that can make the user onboarding, running blockchain nodes and querying blockchain data via APIs straightforward.

Ishan Pandey: Cybersecurity is critical for custodial wallets. According to you, what are the best practices that should be kept in mind while building multi-chain and custodian wallets?

Abhimanyu Kashyap: Yes, cybersecurity is critical for custodial and non-custodial wallets. For example, Safle is a non-custodial wallet, so the key security majorly is with the user’s device. Although, safle has built a secure key management mechanism called safle vault, which has 6 layers of encryption to contain the keys no matter which platform the user is on. The vault uses a native keyring based mechanism which generates keys using the same HD path and is encrypted using a PIN that is not stored anywhere. It just stores the hash to match checksum at the time of decryption.

The PIN encrypted vault is then securitized using the user’s password, which encrypts the PIN encrypted vault on the client.

Further, on the mobile app, this PIN is also stored via biometric authentication, making it easier for users to use the signing mechanism.

Further, there are proper internal audits in place for the entire system. Infrastructure is deployed on VLANs to maintain security. We are undergoing external audits and will publish reports as they are out. We believe in building in public, and we abide by the ethos of open source development.

Ishan Pandey: What are your views on the rising gas fees on Ethereum? Further, what problems are projects facing due to it?

Abhimanyu Kashyap: General projects such as social networks, gaming etc., apart from money market protocols (DeFi) mostly don’t make sense on L1 due to high fees as all transactions would require high gas limits for non-financial transactions, hence not sustainable for recurring and low-value data transactions.

For example, if a social network like Medium was built on Ethereum, the user would have needed Ethereum to pay onchain gas fees, i.e. around $25- $125 per post at current prices. But for all practical purposes, the world needs blockchain-based social networks like Medium that could be free from censorship and hence Layer 2 blockchains are the solution.

Ishan Pandey: According to you, which programming language is the best for writing the most robust and secure smart contracts?

Abhimanyu Kashyap: Statically-typed curly-braces programming language designed for developing smart contracts that run on Ethereum, Solidity is the best when it comes to writing the most robust and secure smart contracts. Ethereum’s large ecosystem and mass community adoption make it all the better. Community Support, tech resources, and existing packages and libraries to support EVM-based frameworks for writing smart contracts are the best and most available, thus encouraging massive adoption.

Ishan Pandey: What are your views on Metaverse and how will it change human society?

Abhimanyu Kashyap: I personally am a very big fan of the concept of parallel reality or alternative universes. The metaverse is not guaranteed to be utopian, but we’re here to back the good folks who are pushing the probability in that vector. The concept of Metaverse envisions deploying the physical realm on the virtual spectrum, including but not limited to gaming assets, digital artwork, virtual worlds, geographical maps, digital avatars and many more. This would further enable proof of ownership, proof of history and help the world operate transparently without the cost of privacy. The adoption of metaverses will be more of a philosophical leap for society than a technological one.

Ishan Pandey: According to you, what trends are we going to see in the blockchain industry next?

Abhimanyu Kashyap: From 2011 till 2015, I still remember my first few years in crypto, the general use case and utility was poised towards cross border payments and giving economic freedom. After the inception of Ethereum and other smart contract enabled blockchain platforms, we saw the trend for crowdsourcing capital or in other words, the age of ICOs that still exists to date and is one of the most pragmatic ways of fundraising for blockchain projects.

With the technology improvements pursued via improvement proposals on Ethereum, the community prepared a robust infrastructure for fundraising and a plethora of money market and financial protocols. This was the age of DeFi that set ground rules for operating in the decentralized finance world. The last couple of years also saw the NFT trend wherein digital art and other media such as music, literature and paintings were pushed on blockchain and the ones with real community utility still exist and prosper. In my view, the next trend in-game finance and interoperability protocols can help the current ecosystem grow exponentially. Gaming companies are being drawn towards blockchain, not for a speculative interest but rather to foster the creator economy.