Polygon and Immutable zkEVM Partnership with Sandeep Nailwal & Robbie Ferguson

David interviews Polygon Co-Founder, Sandeep Nailwal & Immutable Co-Founder Robbie Ferguson on their new zkEVM Partnership. The three dive into the announcement, what it means for IMX and MATIC, how this partnership impacts the future of web3 gaming, and so much more. ------ 🚀 JOIN BANKLESS PREMIUM: https://www.bankless.com/join ------ BANKLESS SPONSOR TOOLS: ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://bankless.cc/kraken 🦄UNISWAP | ON-CHAIN MARKETPLACE https://bankless.cc/uniswap 👻 PHANTOM | FRIENDLY MULTICHAIN WALLET https://bankless.cc/phantom-waitlist 🦊METAMASK LEARN | HELPFUL WEB3 RESOURCE https://bankless.cc/MetaMask 🚁 EARNIFI | CLAIM YOUR UNCLAIMED AIRDROPS https://bankless.cc/earnifi ----- Timestamps: 0:00 Intro 5:15 Immutable x Polygon Announcement 10:47 Immutable zkEVM 13:00 Polygon’s Tokenomics 14:32 IMX & MATIC 16:50 Paradigm Shift of Gaming Deals 20:26 Topology of Immutable x Polygon 24:17 Immutable x Polygon Business Development 29:11 Web3 Gaming Competition 31:22 Current State of Web3 Gaming 34:00 What’s Next for Immutable x Polygon? 39:42 Resources to Learn More 40:25 Scaling with Ethereum 42:06 Closing & Disclaimers ----- Resources: Sandeep https://twitter.com/sandeepnailwal Robbie https://twitter.com/0xferg Polygon https://twitter.com/0xPolygon Immutable https://twitter.com/immutable ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research. Disclosure. From time-to-time I may add links in this newsletter to products I use. I may receive commission if you make a purchase through one of these links. Additionally, the Bankless writers hold crypto assets. See our investment disclosures here: https://www.bankless.com/disclosures

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:07David Hoffman?

  Welcome to Bankless, where we explore the frontier of internet money and internet finance. This is how to get started, how to get better, and how to front-run the opportunity. This is David Hoffman, doing an extra show this week without my AI co-host RSA. But regardless, we are here to help you become more bankless and also perhaps more gamer, because that is the subject of today's episode. There's an exciting new announcement out of two of the biggest powerhouses as it relates to crypto gaming and crypto gaming chains. This is a partnership between Immutable and Polygon, two massive chains who are coming together to align themselves rather than be competitive. And as it relates to this partnership, I don't know who is really left building out the world of Web3 gaming. These are the two

• 0:51David Hoffman?

  biggest Web3 gaming pioneers, and now they are joining forces. And so you're going to get all of these details here in this episode. In this episode, we are talking to Robbie Ferguson, who is the co-founder of Immutable, and Sandeep, who is the co-founder of Polygon, talking all about how these two brands, these two chains, are melding their technology and melding their effort to become the same vertical, the same stack. So I'll drop the punchline here. Using Polygon's ZK-EVM, Immutable is building their own ZK-EVM using Polygon technology. And so we're having this combined BD force to push Web3 gaming onto the Immutable ZK-EVM. So that is the announcement. You'll hear all about the nuances and the details and

• 1:33David Hoffman?

  the second-order effects and the topology of these networks, because of course, the Layer 3 conversation is related here. And all of these details are coming in this interview with Robbie Ferguson and Sandeep. Quick disclaimers here. Both Ryan and I are investors in Immutable. Ryan is an advisor to Polygon. I am not. So those are disclaimers there. And let's go ahead and get right into the interview. But first, a moment to talk about some of these fantastic sponsors that make the show possible. Kraken has been a leader in the crypto industry for the last 12 years. Dedicated to accelerating the global adoption of crypto, Kraken puts an emphasis on security, transparency, and client support, which is why over 9 million clients have come to love Kraken's products. Whether you're a beginner or a pro, the Kraken UX is simple, intuitive, and frictionless,

• 2:17David Hoffman?

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• 3:01David Hoffman?

  it's because you're on the free Bankless RSS feed. Did you know that there's an ad-free version of Bankless that comes with the Bankless Premium subscription? No ads, just straight to the content. But that's just one of many things that a premium subscription gets you. There's also the Token Report, a monthly bullish, bearish, neutral report on the hottest tokens of the month. And the regular updates from the Token Report go into the Token Bible, your first-stop shop for every token worth investigating in crypto. Bankless Premium also gets you a 30% discount to the Permissionless Conference, which means it basically just pays for itself. There's also the Airdrop Guide to make sure you don't miss a drop in 2023. But really, the best part about Bankless Premium is hanging out with me, Ryan, and the rest of the Bankless team in the Inner Circle Discord, only for Premium members.

• 3:46David Hoffman?

  Want the alpha? Check out Ben the Analyst's DGEN pit, where you can ask him questions about the Token Report. Got a question? I've got my own Q&A room for any questions that you might have. At Bankless, we have huge things planned for 2023, including a new website with login with your Ethereum address capabilities, and we're super excited to ship what we are calling Bankless 2.0 soon TM. So, if you want extra help... Exploring the frontier, subscribe to Bankless Premium. It's under 50 cents a day and provides a wealth of knowledge and support on your journey west. I'll see you in the Discord. The Phantom Wallet is coming to Ethereum. The number one wallet on Solana is bringing its millions of users and beloved UX to Ethereum and Polygon. If you haven't used Phantom before, you've been missing out. Phantom was one of the first wallets to pioneer Solana staking inside the wallet

• 4:30David Hoffman?

  and will be offering similar staking features for Ethereum and Polygon. But that's just staking. Phantom is also the best home for your NFTs. Phantom has a complete set of features to optimize your NFT experience. Pin your favorites, hide your uglies, burn the spam, and also manage your NFT sale listings from inside the wallet. Phantom is of course a multi-chain wallet, but it makes chain management easy, displaying your transactions in a human readable format with automatic warnings for malicious transactions or phishing websites. Phantom has already saved over 20,000 users from getting scammed or hacked. So get on the Phantom waitlist and be one of the first to access the multi-chain beta. There's a link in the show notes, or you can go to phantom.app waitlist to get access in late February. Bankless Nation, welcome to the special show.

• 5:14David Hoffman?

  We're covering some pretty cool announcements out of both Immutable and Polygon. So we're going to talk about exactly what is going on in this neck of the woods. And with me, I've got Sandeep, the co-founder of Polygon, who we've had on the show before. Sandeep, welcome back.

• 5:27Speaker 01

  Thank you, sir. Thanks for having me.

• 5:29David Hoffman?

  And also, we got Robbie, the co-founder of Immutable, who we've also had on before. Robbie, welcome back.

• 5:35Speaker 02

  Glad to be back, David.

• 5:36David Hoffman?

  So I got this email from you guys saying that you guys have this special announcement about a collaboration between Immutable and Polygon. And my first reaction was like, well, I thought they were competitors. So who wants to walk us through what this actual announcement is and how this turned from competition to collaboration? Robbie, can I throw this to you first?

• 5:53Speaker 02

  Sure. So maybe some context, which is, you know, we've been building for a very long time now in the blockchain and specifically on Ethereum. We started in 2017, building the first decentralized game on the blockchain, and it was an absolute nightmare. And we realized we had to start working pretty aggressively to make this easy for developers to build on, but also to have this scalable for billions of users one day. At first, we looked at solutions like Plasma. We looked at solutions like state channels. Neither of these really worked. Some of these teams rolled into some of the scaling solutions available now. We looked at side chains, and we were never really happy with the security trade-offs that they had. And then we saw ZK rollups. And for us, this is really the endgame. And we've been on an app-specific ZK rollup up until now, which basically means we have only been able to have

• 6:38Speaker 02

  very limited logic, no smart contract compatibility. And for us, this partnership is the endgame, which is, we get to build on, you know, essentially what we think is probably the best ZK tech in market right now, the ZK EVM powered by Polygon. But we also go to market force that is really going to be a very considerable sort of mechanism. How can we actually take all of Ethereum gaming mainstream? I think there's been a lot of infighting between competition and not a lot of focusing on who the true competition is, which is ultimately the hundreds of billions of dollars spent by players on in-game items they don't own. So I think this will be one of the biggest partnerships in the space to date. We're extremely excited to be working with the Polygon team and Sunday. But Sunday, feel free to add any color on this.

• 7:20Speaker 01

  Yeah, I mean, for me, like, I've been a big fan of Immutable for, you know, since their early days, right? Like, you know, I mean, they have been true pioneers of ZK tech, you know, like, they took this plunge on building this ZK and taking the hard route. I remember speaking to James and Robbie both trying to convince them to, you know, come to the, you know, Polygon or Matic Chain, Matic Network that time. And they were very clear that, you know, they want a, like, a full-blown Layer 2 and everything. You know, in my mind, they are one of the biggest Ethereum maxis, you know, out there. Like, they are like so all-in on Ethereum. And, you know, when we kind of started approaching our mainnet on ZK, it automatically, you know,

• 8:01Speaker 01

  made a lot of sense for me to, you know, reach out to IMAX because in gaming, like IMAX and Polygon are kind of like the biggest of the names, right? Like, you know, by far and orders of magnitude bigger than anybody else in the third place, right? So basically, I thought that, you know, let me, you know, take this shot and, you know, speak with them also, like, you know, where they are up to. And obviously, they are, as Robbie was saying, that they are currently on an app-specific rollup where, you know, there are only few functions they can support. Whereas on ZK EVM, it's like full-blown EVM programmability available to them. And, you know, we speak to the games, we have a lot of games which have some part of them built on Polygon,

• 8:38Speaker 01

  IMAX and then you know things like that and we have always heard very positive reviews about them about their relentlessness to provide the best developer experience and all that. So for us, it made like total sense. And you know, I'm really glad that you know, I reached out to them instead of not thinking because you know, that's where our web three ethos. Come in, right? So I thought that, you know, what is like as Robbie was saying, there is no competition here, like we are all in this. Small bowl which is web three and the world is like a big ocean, right? So I just reached out to them and then you know this and here we are today. And you know, probably arguably the largest, you know, kind of inter or intra web three. Partnership, you know, which is going to happen and hopefully we are able to do some good work for the.

• 9:21Speaker 01

  You know, game developers who want to come into web three and build nice games web three will give us.

• 9:26Speaker 02

  And and David, I might just add one thing on, which is. I think we actually launched on a bankless, which is our cross roll up liquidity infrastructure. Because ultimately what immutable wants to do is. Create a one stop shop for gamers that they can build with APIs if they want to. Stripe like ridiculously easy, all they can build with custom smart contracts. I view as this will probably be the the sort of five percent of advanced long tail devs, building infrastructure for everyone else to use. But the second most important thing is that even with ZK EVM, even with five, 10,000 TPS, which we're hitting sort of the upper limits. Fortnite alone will take up all of that on a single roll up. And if we have hundreds of different, say, ZK EVMs. Then what we're doing is we're fracturing liquidity across hundreds of different of roll ups. And so.

• 10:10Speaker 02

  Really, I think that the second part of this is we get to bring a lot of that value to Polygon's ecosystem. We can have hundreds of ZKs. Which can be specified for a game or for financial infrastructure or for running housing in the future. But you can but buy assets with any currency from any wallet. On any individual roll up, completely atomically and with zero loss of security. And this is kind of our cross roll up, cross marketplace liquidity infrastructure, which is really at the heart of what we're trying to build out because I think that's probably the. The least paid attention to layer of the stack today.

• 10:43David Hoffman?

  So guys, as a moderator, I really appreciate all the context and all the backstory here, but I think we've accidentally kind of buried the actual real announcement. Robbie, you kind of said it and stuck it in there, but I wanted to like kind of zoom out and just drop the punchline. What is happening? Whoa, what's the announcement? Robbie, what's going on here?

• 11:00Speaker 02

  So we are expanding from our current rollup on StarkX to be building across Polygon's version of ZK EVM, using this technology to create the immutable ZK EVM. This will be available as a standalone.

• 11:12David Hoffman?

  The immutable ZK EVM, brand new spiffy ZK EVM chain.

• 11:17Speaker 02

  Correct.

• 11:18David Hoffman?

  And so in addition to, beyond the app-specific chain that you guys have been talking about, there is a new chain, which is Polygon's technology operated by immutable. And we're calling this the immutable ZK EVM. This new chain that we're talking about, just really wanted to drive that point home.

• 11:34Speaker 02

  Precisely. Maybe we should put this chunk first. And in addition, we're going to be able to offer hundreds of custom ZK EVMs to say, an Activision Blizzard or Ubisoft or a, you know, major enterprise company who might want to have, you know, their own version of this rollup. And our goal is we'll be able to unify all of this liquidity with our infrastructure, have them build on incredibly easy to build APIs, and we're bringing this ease of use to Polygon's and Ethereum's ecosystem and continue to run all of our services to make sort of games incredibly successful. Everything from economics assistance, tokenomics, passport, which is self-custodial, email onboarding for end users. We'll also be joining forces with a lot of the go-to-market arms, so working on helping to onboard more games onto Ethereum and really take, I think, like, honestly, this

• 12:19Speaker 02

  is for us the end game. I think people have been iterating scaling solutions and iterating approaches to what will be the final tech architecture that goes mainstream. This is it. This is ZK EVM. You have full custom smart contract compatibility. You have full scalability. And we have now user onboarding technology, which can take a user playing a game and they can earn assets. They can sign up for a self custodial Ethereum wallet without ever even knowing what an NFT or a blockchain is. And that's really what I think is needed to take this to the next billion users. Yep.

• 12:49David Hoffman?

  Beautiful. And if I remember correctly, Robbie, the way the immutable interface with Starkware, your previous and still the legacy chain.

• 12:57Speaker 02

  And current. That will continue to run, absolutely.

• 12:59David Hoffman?

  And it was like immutable licensing Starkware technology. Is that how we should think about this with Polygon, the Polygon ZK EVM? Or like, how does this relationship work out?

• 13:09Speaker 01

  No. So let me take that. So this is basically, so Polygon's technology is fully open source, right? So there's no licensing agreement. Instead, like when immutable base chain, right? So immutable chain, this immutable ZK EVM, when it decentralizes, it will have Matic staking on it. And that's the only, you know, a kind of the token economics or model for Polygon, where the staking, you know, Polygon wants to be, or Polygon validators want to be the infrastructure engine, which provides infrastructure to run these chains, and they get the gas fees in return. And we are guessing that with the way mutable today is like 150 tier one, double A, triple A games, you know, we expect like hundreds of millions or, you know, in fact,

• 13:53Speaker 01

  billions of transactions during a year, and all that gas fees will go to the Matic validators. So that has been like, you know, that's the main thing. That's the main end game for us.

• 14:02Speaker 02

  Fun fact, we had 20 billion API requests last quarter. So we are posting insane scale.

• 14:08David Hoffman?

  Sure. Okay. Well, Robbie, that begs the question, if this is a Matic chain, what does the IMX token fold into in this new world?

• 14:15Speaker 02

  Yeah. So if you go to immutable.com/IMX-token right now, you will see four boxes. And for us, the really exciting thing is because this is now a smart contract compatible chain, rather than just an app-specific rollup, we can basically add on a whole ton of utility that was previously impossible for us to add. So Matic will be the core staking token, but the gas token, which is effectively used to sequence and prioritize transactions on immutable ZK EVM will be IMX. So for us, that's extremely exciting. You know, that's effectively like taking the utility of a Solana or some chunk of utility of Ethereum or an Abdo and adding that on to the existing utility of IMX. Each month, we then have two more sort of forms of utility we'll be announcing. I can't share more details on those right now, but we will be sharing those very soon.

• 14:59David Hoffman?

  Okay. So the idea is that Matic is the staking token. It operates the validators. It receives the gas fees of the network. The gas fees are paid in IMX. Is that correct?

• 15:10Speaker 01

  Correct.

• 15:11David Hoffman?

  Okay.

• 15:11Speaker 01

  Absolutely. And it's like, you know, David, for me, like, not only for IMX, like, the general idea that is emerging is that, you know, for the, you know, like middleware platform like IMX or app layer platform, it's like basically asking what is the utility of, let's say, Uniswap token, right? So Uniswap is on the app layer. You know, IMX utility is much, much bigger. They are a middleware. They are plugged into various, you know, hundreds of games. Plus, now they have the gas fees also in their token and all that. So this is basically, if you see on a higher level, the idea of like, you know, where Polygon is evolving into is that Polygon, you know, simply only wants to play on the infrastructure layer, right? Which where you stake Matic, you provide the security to run the network, right? But on top of that, on the

• 15:56Speaker 01

  app layer, all the utility goes to our, you know, partners like, you know, IMX or like, you know, whoever, like, you know, I mean, they're going to be many like that, right? So, so that's the base model here. Like, you know, we, Polygon remains on the infrastructure layer. Everything else above it is fully IMX to, you know, capture in terms of the utility.

• 16:15David Hoffman?

  Beautiful. And Robbie, you mentioned things like if Activision Blizzard or EA wants to come in and build their own ZK EVM, they have that optionality through immutable. Can you unpack that relationship and how that relates to the whole economics of the whole system?

• 16:29Speaker 02

  Of course. So I think the only reason we really would sort of lose a gaming deal to date would be lack of smart and rat compatibility. And I think for the biggest enterprise companies in the world, they typically want either one of three things. They either want their hands held and the entire thing to be white glove, or they want basically a playground for them to build and experiment with. And a lot of these larger companies also want to control their destiny in terms of being able to have influence over their own checking. And the exciting thing I think we can now do is we can essentially build them their own custom ZK EVM and they can have their own 10,000 transactions per second. They can have, you know, their own nodes, they can have their own process of sequencing transactions. But importantly, they're not on an island. All of their players can still be interoperable

• 17:11Speaker 02

  with assets and wallets and funds with every single other roll up built on immutable. And also, it means that we'll be able to basically take this scale, customize that specific game, and then let them have a huge amount of destiny over it, you know, use their own tokens involved in the chains as well. And so for us, this is sort of, if you look at a broad spectrum, you can either have sort of complete white glove, you can have complete control of your own destiny, or you can have very, very simple infrastructure to build on. And appealing to this entire realm, it is really important to actually take this mainstream.

• 17:41Speaker 01

  David, a simple mental model for that also is basically these chains will simply be L3s, right? Like, you know, which might be Matic State, like, you know, if they want to decentralize, they might be Matic State, or they settle back into the IMX base chain, which is the immutable ZK EVM chain. And, you know, they're also like, again, they contribute back to the liquidity, they contribute back to the gas fees and things like that, right? So this is basically like the layer three, like, a lot of people have, you know, kind of talked about layer threes and things like that. Like, we are not talking about that, but, you know, Polygon, like, I mean, we have like higher double-digit layer threes, which are getting ready across the year. And you will see so many of them launching with them. And then, you know, with this kind of

• 18:26Speaker 01

  strategic partnership with IMX, like, imagine IMX alone itself will be able to launch like tens of them, right? Because all of them are then, you know, utilizing IMX middleware platform and things like that, right? So that's where like, you know, it becomes very strategic for us because as an infrastructure provider, as a, you know, fully decentralized protocol and things like that, you know, we cannot provide a lot of hands-on service, whereas IMX is built in a way where they have a, you know, kind of a studio and a, you know, equity company plus the decentralized middleware protocol, right? So they can actually scale with hundreds and hundreds of such large-scale, you know, Games which build with their technology and can also provide because it's revenue making for them. They can provide close handed wide glove services to them, right?

• 19:11Speaker 01

  So you know, that is where the biggest advantage comes to Polygon. So for us, like Immutable becomes that partner which you know, can then, you know, not only like this one single partner, but they can actually, you know, help people run like tons of Polygon chain. So that's why, you know, it's very exciting for us.

• 19:27David Hoffman?

  So let me show you what's in my imagination of like the topology of this whole network and make sure that I get this right. And so, okay, so this ZK EVM, the Immutable ZK EVM settles to the layer one Ethereum. Does not settle to the Polygon proof of stake. It settles directly to Ethereum. It's the ZK EVM, which is Polygon technology staked by Matic, but it's the immutable domain, the immutable ZK EVM. And Immutable and all of its on-chain gaming can exist on top of that layer two, the ZK EVM layer two. Again, Matic staking, IMX is the gas token. And then also, if you people have been paying attention, Immutable's BD skills are strong. And so the idea here is that independent game studios, whether they're like as big as Activision Blizzard

• 20:11David Hoffman?

  or as small as your, you know, local mom and pop indie game studio, if that's the right word to use it. They also have their ability to make another ZK EVM, also Polygon technology, that settles onto the ZK EVM, the Immutable ZK EVM, and they can become their independent ZK EVMs per game studio for whatever they desire for that to be. And the rules of how that becomes validated or staked or whatever is probably up to the individual studio itself. But that is the service that Immutable is offering towards the greater world of gaming. And so Immutable is offering its like, perhaps like top of funnel BD skillset to the underlying Polygon technology, the Polygon ZK EVM chain. So that's what's in it for Polygon.

• 20:56David Hoffman?

  And then Immutable gets the whole technology to really scale out and onboard all of these game studios on to a ZK EVM with Polygon. Is all of that correct? Cause that's my interpretation.

• 21:06Speaker 02

  I think bang on David. And maybe I can kind of share a bit of insights into why I think this is such an easy kind of strategic choice and an easy partnership, which is, you know, essentially. The layer of the stack which we're building out is, I would say, you can break the layer of the stack into three today. You have NFT marketplaces, which is where people actually trade. You know, these are OpenSea, these are the Rarables of the world, and these are the GameStop marketplaces. And ultimately, I think with games, we're going to see a whole ton of sell-side liquidity that is in-game marketplace or contextual marketplaces, and a lot of buying on sort of big aggregators. But this is where our global order book comes in, which means we can take all these marketplaces, provide them the same source of exchange liquidity, and every single participant can take their own piece.

• 21:49Speaker 02

  So our goal is really actually like, it's sort of the existing way NFT marketplace is built is quite limited. And they'll actually struggle to have volume over the long run because they won't be able to tap into people, say, a 13-year-old earning a skin in Fortnite and wanting to sell it then and there in the context of the app. And what we've built actually allows these people to monetize far better and maximize liquidity. And then at the bottom, you have sort of like actual scaling protocols, people working on consensus mechanisms on ZK Tech itself. You know, this has never been our business. I think it's pretty clear that with Polygon and their two previous acquisitions, they're going to be a front-runner in this race. And so for us, it's completely complementary for us to expand and build cross-well off liquidity. But the major benefit we get is Polygon and Immutable have really been sort of fighting quite hard and competing quite doggedly.

• 22:33Speaker 02

  You know, Sandeep and I have laughed over this for the last couple of years, and I think that's been fantastic. I think it's been, we've really had to hone our skills and learn what is most appealing to web three game developers. But now I think it's time for the industry to mature and realize that the real competition are the giant hundred-billion-dollar industries in gaming, built off exploiting players and giving them zero rights. And with the final end-game technology stack we now have, and with the final end-game sort of go-to-market movements, this will be the year that we see games with tens to hundreds of millions of players, and we start to see web three truly go mainstream.

• 23:07David Hoffman?

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• 23:48David Hoffman?

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• 25:58David Hoffman?

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• 26:40David Hoffman?

  Like I said earlier, the two biggest BD forces I think that exist in all of crypto are Polygon and Immutable. Like Immutable, you've guys got TikTok, I think like Warner Brothers, a few other game studios, and everyone knows Polygon's ability to land some very big, non-crypto, importantly, non-crypto teams. Now, these BD efforts, they're not combining into the same BD team. Y'all are still two different companies, but now the idea is like the BD teams are pointed towards the same goal. I don't really have a question on that, but I feel either of you would like to reflect on like, what happens when these two gargantuanly successful BD teams are aligned towards the same vision, like what happens next?

• 27:17Speaker 01

  You know, so I always used to say like, you know, with especially in gaming, like, you know, Polygon has a much expensive portfolio, but on the gaming, like, you know, obviously because IMAX like with such bright people and like, you know, they have a massive like, you know, two hundred fifty people team only focused on gaming. And we have at Polygon, we have like ten people. So it's like, you can imagine like, you know, they have given us very, you know, kind of tough nights in that. And I used to sometimes joke that, you know, it's basically whenever there is a, you know, a competition for a particular, let's say, client building on this one. I always used to say that this is to the, to my team, that this is basically unstoppable force meeting a immovable object, right?

• 27:58Speaker 01

  Which is unstoppable force, which is IMAX and if you will, object that is Polygon. And, you know, obviously now suddenly when these two things join hands, like, you know, Polygon ecosystem and the immutable steam and all that. I'm not sure, like, you know, it becomes very difficult to compete with that combination. But yeah, like, I mean, for us, basically Polygon, as I said, that is a much larger, you know, kind of this thing, DeFi and this and that. Like so many things are going on on multiple fronts. So we are very happy to have a partner like IMAX on the gaming side. So, you know, we can be rest assured that, you know, Polygon technology on the infrastructure level keeps winning with them.

• 28:38David Hoffman?

  And so, um, who's left in the world of web three games? When immutable and Polygon are now on the same team. Like, there's gaming on Solana, but Solana, the ecosystem is not super healthy right now. I remember once upon a time Avalanche was going after gaming, but I haven't heard of anything in Avalanche. So like, who's your guys' biggest competition that's left in the crypto arena?

• 28:58Speaker 02

  I think the real competition are the massive, you know, billion dollar games companies who are ripping players off. And I think this is the whole point, which is there's a lot of sort of introspection and infighting in an industry that is ultimately should be collaborating and working to just make this stuff mainstream. Like, we have, you know, thirty million Mao in crypto at max. It's terrible. And like, this technology is incredible, but really the only thing that has mainstream traction today is payments. The first actual mainstream application outside of payments are going to be gaming. And we have a single mainstream game, which is, you know, a hundred billion players is not even crazy. That's like the hundredth biggest game in the world. As soon as we have one of those, we triple crypto as now overnight. And we make sure that its value proposition can be heard without requiring people to know what a private key is,

• 29:43Speaker 02

  what self custody even is, we onboard them through the actual value they experience rather than shouting at them, hey, the future is decentralized, which might work for people who love talking about it every day and VCs and tech people. But really, the sort of 3.1 billion gamers out there, all they care about is, hey, do I now have the ability to sell some stuff that I used to spend money on and completely have as a sunk cost. And what we've heard is as soon as those gamers switch and they try a game like God's Unchained or Luvium, they feel sick going back to old versions of those games because they realize what essentially a scammy, one sided economy it is. It's very similar to the fiat to real money conversion that I've seen. I think, was it Balaji or was it someone else who said this recent crisis showed there's only two banks in the world today?

• 30:28Speaker 02

  There's the Fed and there's Bitcoin. And I think it's getting pretty clear that there's only going to be two forms of real economic ownership. And there's one that's scammy and people have been using for the last 30 years. And there's one that will actually empower players.

• 30:39David Hoffman?

  Beautiful, beautiful. Well, something I've personally come to the realization of recently is like, I've heard the narrative of like, oh, gaming is going to onboard the next billion people. It's going to be gaming, gaming, gaming, gaming. And for a long time throughout 2022 is like, okay, fun narrative. We'll see how that rolls into this. A few things lately have shown me that this is more than just a narrative at this point. And that was one, seeing how far along some very beautiful games are at East Denver with game native people who have now discovered the utility of assets. And then also just all the maturity of the underlying infrastructure that has allowed for kind of what you're talking about, Robbie, which is just like abstracting away the complexities that non crypto nerds don't care about.

• 31:22David Hoffman?

  So like, for me, it's gone from like, okay, this is a fun narrative. We'll see how this plays out to like, oh no, this is way further than I thought that I was. So Robbie, I'm hoping you can kind of just like, give us a snapshot lay of the lands of like, what is the current state of gaming? And as it relates to people who are gamers, but perhaps they're more crypto people than they're gamers. What's going to be the first thing that they do? Like, what's going to be the first exposure that they have to this world of crypto web three gaming?

• 31:45Speaker 02

  And Sunday, if you'll put an add on, but really to me, web three gaming is need before the flood stage, right? Over the last two and a half years, there's been 15 billion US dollars invested into web three gaming. It is the most invested in category of crypto. And this is basically more investment in any nascent tech category than we've seen over the last couple of decades. And all of this money is building games and infrastructure that typically has a lead to production time of between two to four years. So this year is where forty to fifty percent of them actually start to go live. And I think the most interesting thing has been despite the bear market. And you know, hear this language all the time. This is the bear market where we've seen people still go into conferences, still building, developer activity and traction is up.

• 32:27Speaker 02

  No more is that true than in gaming, where even the enterprise companies we are talking to are still more interested than ever in learning how they can actually utilize this technology. All the bear market has done is give them breathing room to not have to show face to public markets about expertise, but instead build products that genuinely consumers love. And so for me, I think this is the year where we have two hundred to three hundred games each with at least ten million dollars in funding start to go live. And one of these are going to be a hit, right? Gaming is massively powered or driven. A lot of these games lot are being successes, but that's fine. Because the five percent that do will redefine user traction and mass appeal for Web three for the rest of it.

• 33:05David Hoffman?

  Yep. Cindy, Robbie, what's next for this partnership? How does this partnership roll out? Is there like phases or like what are the actual like near term next steps here?

• 33:13Speaker 01

  I think like the, obviously the most important step is that, you know, when Amex fully launches their immutable middleware solution on this one. Plus, we have a lot of like eco ecosystem relationships that's being built in a way because, you know, for gaming, you don't only need one particular part of the stack. There are multiple other stacks, so people are looking to integrate into this. There are community like, you know, YGG, IndieGG and multiple different like, you know, who are like looking to partner into this kind of consortium or something. You know, so I see a lot of collaboration already happening. And once first step one is the platform going live. And then I think some of the, I think I am extreme and also Polygon live like, you know, for Polygon games also.

• 33:57Speaker 01

  Because this is, you know, for us on an infrastructure level, this is Polygon chain only. So there's like, you know, many of them would also choose to, you know, work. On the IMAX middleware, which allows them to have this cross-chain liquidity and all that, right? So, uh, we expect, you know, obviously the launch of the platform, then some top games launching over there from IMAX side. I'm pretty sure from Polygon side also, some of the games looking at the overall proposition of the platform might end up choosing to build a, and that's where like the main, like, you know, I would say end game begins where after that, now we have the scalability. Now we bring as many games as possible, as many experimentation that happens as possible.

• 34:38Speaker 01

  You know, we also have an infographic like Robbie was saying that, you know, how much billion our Robbie has been put in in the gaming side? And I think if you see that, that graph itself looks so interesting, like the top three is Ethereum, Polygon and IMAX. Like I think that includes the roughly eighty percent of the funding that has gone into these games. And you know, like many of those like are double A, triple A games. And many of them are, and you know, some of them are going to figure out the real models. Like, you know, in gaming, it's like once somebody figures out a particular model, let's say free near model or all the previous models, everybody then jumps in. And I think this is as Robbie was saying, this is just that stage where the floodgates get open.

• 35:21Speaker 01

  And that's why also it's very exciting and we hope that, you know, some of the games building with us are able to crack that and are become the pioneers in that, in cracking that model. And then from there on, it's just, you know, kind of a game or bringing as many.

• 35:34Speaker 02

  And can I say, I've mentioned this now to immutable's, like the majority of games put in the build today. That we have this CKEVM with Polygon coming out and the level of uptake and excitement has been insane. I think people are extremely excited to have, say, swaps which they can use in their games now or DeFi to be incorporated under the hood. And for us, our timeline is launch immutable CKEVM, launch custom CKEVMs for sort of, you know, major partners. Because I think David, as you said. This is just one part of the ecosystem, but together Immutable and Polygon are actually quite a deep layer of the platform stack where we have sort of easy APIs to build on. We have this cross-roll up liquidity infrastructure and obviously we have all these services. But ultimately, there's going to be a whole heap of people building on top of this.

• 36:18Speaker 02

  They might be platforms which are helping games to launch. They might be community gaming guilds. They might be people who are building on ramps or compliance solutions. And I think the goal is to help really to onboard each of these. And the third piece, hopefully by the end of the year, is to have cross-roll up liquidity expanded for the Immutable ZK EVM and all other versions of ZK EVM which we're custom spinning up. And for us, that is pretty much essential. You can already see through our global order book, so the unifying sort of marketplace solution, more than half of all trades are created on one marketplace and filled in another. That's with like 10 games life. Imagine with thousands, a huge amount of sell-side liquidity is going to be in-game and a huge amount of buy-side is going to be on these major aggregators and giving them the volume that ultimately they're creating the user experience for.

• 37:03Speaker 02

  Our second thesis is cross-roll up liquidity will basically multiply liquidity by however many roll-ups you're aggregating. Like, we have more than a trillion dollars in TVL in crypto today if you take every single chain. Providing cross-roll up liquidity, but actually gives us a level of exchange liquidity that can paint with the big boys in real financial markets or the gaming markets in the real world. And this is what is necessary for crypto to not be a sort of fragmented series of solutions where we have inferior prices ultimately for assets, but to be the default place that unique value is exchanged and gaming is the vanguard of that.

• 37:36David Hoffman?

  Well, guys, I can hear the excitement in your guys' voice and anytime, really just like successes always comes from alignment, right? And we can get our protocols to align. If you believe in crypto, everything else becomes easy after that. So I'm excited to see what happens in this future. And like I've been saying from the get-go, like I just want Diablo with assets, man. And so if this gets me closer to that, that gets me excited. Robbie Sandeep, thank you so much for walking us through this very exciting announcement.

• 38:00Speaker 01

  You named Diablo like I know Robbie and team, they are working on so many such kind of IPs. When you hear, you're like, oh shit, like this is coming in. Like, you know, yeah, these people are beasts and we are also beasts. So we are going to do some cool stuff in the gaming stuff. Like, yeah.

• 38:16David Hoffman?

  Very cool. I'm excited to get very distracted from my job here at Bankless to go play some video games when they inevitably do come. If people are curious and they want to learn more, what's the website that they should go to to dive down this rabbit hole?

• 38:27Speaker 02

  Um, well, to come and build, I guess on both solutions, it's immutable.com. I think there'll be a bunch of press going out. Obviously, Sunday, I think it's polygon.com and for you guys as well.

• 38:36Speaker 01

  Yeah, yeah, yeah. But then on this platform, this is called IMAX Immutable ZKAVM platform. And I think Immutable will host like extensive documentation and everything around it for the developers.

• 38:47David Hoffman?

  Cool.

• 38:47Speaker 01

  Uh, you know, both on the self-service or like kind of the enterprise side. So, yeah.

• 38:51David Hoffman?

  Beautiful.

• 38:52Speaker 01

  They are the place to go there.

• 38:53David Hoffman?

  Awesome.

• 38:53Speaker 02

  David, if I can make one final plug.

• 38:55David Hoffman?

  Sure.

• 38:55Speaker 02

  I think ultimately, the greatest affinity that I shared with the Polygon team and part of the reason we were so keen to make this partnership happen is since day one, our solution was always to scale and work with Ethereum rather than competing with it. And that was actually quite a, like now, I think it's a reasonably popular view. Back then, it was extremely contrary because VCs wanted L1 chain hypothesis, value accretion thesis, they wanted to make a competitor, they wanted the next son of Eve killer. I think it's pretty clear that Ethereum is going to be the default liquid smart contract platform of the future. Polygon is going to be a huge portion of that scaling and we want to make gaming the mainstream part of that. And I think that having aligned with Ethereum is part of the reason we've been able to have the community success today. A lot of games want to make sure they're building on the biggest platform. And our goal is really, how can we just make

• 39:38Speaker 02

  that easier than ever for game developers to build on and help make not only Ethereum, but the entire crypto ecosystem win?

• 39:44David Hoffman?

  Sure, yeah.

• 39:45Speaker 01

  That's what I say, like, you know, like David, like people say, like, you know, Polygon BD is great and all that. But I feel that, you know, we like, you know, that everybody is same. But where Polygon has an edge is that we really feel for our relationships. Like, you know, for IMAX, like as a part of this relationship, we'll put every bit of our effort to make sure they are successful. If they are successful, we are already successful, right? So that's where like, I think the biggest attraction because that, you know, for a lot of builders come to Polygon, because our core DNA, like it's not only me talking, like, you know, all my team feels like that. And once we have a partner in place, we are like kung ho and we want to make sure they win and they win and we win with them together. And that's why, like, you know, you see so many people building Polygon. We'll do that for IMAX also.

• 40:29David Hoffman?

  You love to hear the alignment and I know both these teams were building before this last bull market even got started. And here we are, the bull market's definitely over and y'all are still building. So you gotta be appreciative of people who building across markets.

• 40:43Speaker 02

  Well, not if the Fed keeps printing $2 trillion extra dollars, Dave. We'll see what happens.

• 40:49David Hoffman?

  All right, guys. Thank you for walking me through this very, very cool announcement. Risks and disclaimers, everyone, as you know, crypto is risky. Gaming, probably also risky. Not only can you lose what you put in in DeFi, but you can literally die in crypto gaming. But at least you might also respawn. This is the frontier. It's not for everyone, but we're glad you are with us on the bankless journey. Thanks a lot.