Squid with Fig | ETHDenver 2023 Interview #5

Sometimes, the frontier is at a crypto conference. One of the most prestige being, ETHDenver! We’re back with a handful of exclusive interviews with some of the most fascinating minds in crypto. Wish you could make it to all the crypto conferences, but don't have the time? Don't worry, Bankless brings the frontier to you. In this episode, we’re talking to Fig from Squid, a crosschain swap protocol built on top of Axelar. Is Squid finally the interoperability solution we’ve all been waiting for? Tune in to find out! ------ 📣 RhinoFi | Makes DeFi Frictionless https://bankless.cc/rhino ------ 🚀 JOIN BANKLESS PREMIUM: https://newsletter.banklesshq.com/subscribe ------ 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 | #1 SOLANA 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 3:09 What is Squid? 4:26 Squid vs. Previous Interoperability Solutions 7:52 Fig’s Chain Fatigue Response 9:04 Squid’s Use Cases 11:15 Closing & Action Items ----- Resources: Fig https://twitter.com/ecdsafu Squid https://twitter.com/squidrouter ----- 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.

• 0:12David Hoffman?

  We are at the Axilar Interoperability Series. I'm talking to Fid from Squid. Fid from Squid. I had no idea what Squid was, but when I came to the Axilar event, I talked to the co-founders of Axilar and other people in this space. Who should I talk to? And so they said, "You should talk to Fid from Squid." So here we are, about to go talk to Fid from Squid, right after we talk to some of these fantastic sponsors that make the show possible. Kraken is our strategic sponsor for 2023. Why? Because Kraken has been around for over 12 years and has proven itself to be deeply aligned with the crypto industry. Trusted centralized crypto platforms are hard to come by these days, which makes the few remaining ones even more valuable. With over 9 million users and not a cent lost, choosing Kraken as our strategic sponsor for 2023 was a no-brainer.

• 0:55David Hoffman?

  We need exchanges like Kraken to provide the on-ramps to get people to go bankless. And Kraken's emphasis on security and transparency makes us feel good about having them as a sponsor. If you're unsure about your centralized exchange or on-ramp, perhaps open an account with Kraken today. And if you're unsure about the rest of Web3, well, then maybe you should get your learn on with MetaMask Learn. Learning about crypto is hard. There's no one out there to hold your hand to get into this industry, until now. MetaMask Learn is the best place I've ever seen to send someone to learn everything there is to know about Web3. If you're a company trying to onboard employees or you're a son or daughter trying to onboard your boomer parents, MetaMask Learn is the place to send them. Interactive and engaging lessons making learning about Web3 fun and easy.

• 1:40David Hoffman?

  Now, once you're through Kraken's gates and you've taken the MetaMask course on what's a DEX, you're safe to make your first stop into the world of DeFi. Where better to start other than Uniswap? Uniswap is, of course, a decentralized exchange for crypto asset trades and swaps, but it's now also an NFT aggregator as well, making Uniswap some of the best decentralizing trading tech that's out there. Uniswap's big announcement at ETH Denver is their Uniswap Wallet, which is waiting to get released to the public as soon as Apple stops being a big ol' bully about crypto apps in the App Store. Uniswap is basically on every chain that's relevant in the crypto ecosystem. So if you want to use Uniswap, but with the cheapest possible fees, then use Uniswap on Arbitrum. The Arbitrum Layer 2 is the host of Ethereum's most vibrant DeFi and NFT communities.

• 2:23David Hoffman?

  Arbitrum is already surpassing the ETH Layer 1 in transaction volume, and it's not even close to full capacity. With so many vibrant communities on Arbitrum, Arbitrum is a good place to call home for the era of Layer 2s. Speaking of settling into new homes, the Phantom Wallet is now available on both Ethereum and Polygon. That's right, the number one wallet on Solana is expanding into the Ethereum ecosystem. Phantom is the one wallet for everything. Displaying NFTs, making NFT trades, swapping tokens, staking tokens. So if you're a multi-chain surfer or an NFT power user, then the Phantom Wallet is for you. It also comes in mobile. Check it out at phantom.app. Now, let's get into the interview. All right, Bankless Nation, I'm here with Fig, the co-founder of Squid. Just kidding, I'm not that short, but he's unequivocally a member of Tal Dal. Fig, how's it going, my man?

• 3:07Speaker 01

  Yeah, good, man. Nice to be here.

• 3:08David Hoffman?

  So I came into this Axler Interop Summit, learning about this interoperability world. And I asked one of the guys, who should I talk to? And they said Squid. And I asked somebody else, they also said Squid. So here we are, talking to the guys at Squid. So Fig, what is Squid?

• 3:22Speaker 01

  So Squid is a cross-chain swap protocol, which allows you to swap any token from one chain to another. But it's built on Axelr's general message passing. So what it means is you can call a contract on any chain, but you can also swap into a currency on any chain. So you can think about it, we allow you to swap from any token to any token, but you can also buy an NFT with any token, you can stake with any token. You can really do anything across chain. And it's all done via Axelr, which is a really secure decentralized cross-chain protocol. And yeah.

• 3:51David Hoffman?

  So Squid is an application on top of Axelr?

• 3:54Speaker 01

  Exactly, yeah. So you can think of Axelr as the execution layer, and Squid builds the payloads.

• 4:00David Hoffman?

  Okay.

• 4:00Speaker 01

  So we have a set of smart contracts which are on every chain. And we have a backend which calls every chain, calls all the dectors on every chain, generates a route. And then we send it back to the user. We have an SDK, so devs can add it to the application or to a front end. Where the route is translated into a single payload, which you signed with Metamask once, and then it gets executed across chain by Axel.

• 4:26David Hoffman?

  So I've heard similar pitches like this before, especially back in like 2017, the big whole interoperability was a big meme. Not to say it is a meme fundamentally, but I've heard the pitch of just like, any chain, any asset, what's the, what's the big difference about squid that's different from all the other previous interoperability solutions that's out there?

• 4:44Speaker 01

  Yeah, for sure. So atomic swaps have been a narrative for a long time. The real difference is that squid is modular. So really what we're doing is we're composing existing liquidity across chains. We don't have any of our own liquidity. We just, we plug into Uniswap, we plug into QuickSwap on Polygon. Whatever the best swap is anywhere, we can route liquidity through it. So there's the, there's that sort of modularity. And what it also allows users to do or devs to do is you can plug it into your application. So atomic swap, you can swap from USDC on Polygon to USDC on Avalanche, but you might not be able to buy the NFT also in the same click. So I think there's been this switch

• 5:27Speaker 01

  where we're not just swapping anymore. We're starting to, what we had on Ethereum in the early days of like, you know, this DeFi Lego idea, any, any app can be plugged into any other app permissionlessly. Now we have this cross-chain. So the ecosystem can scale, whether it's cross-rollup, cross-chain, between L1 and rollup. You can compose an application with another application, no matter where it is.

• 5:51David Hoffman?

  Okay, so the mental model I've had is there's a couple of applications in the Ethereum ecosystem. One is Bungie, bungie exchange, if you're familiar with it, that's powered by socket. The other one is Lifi. And these are really cross-chain aggregator, dex aggregators, right? And so it aggregates the liquidity on cross, the layer two, across all the chains. But I'm getting the sense that squid is that for the broader ecosystem, but also more logic than just simple ERC20 tokens. You also get to do application logic, passing through application logic. Am I on the right track here?

• 6:24Speaker 01

  Yeah, I think you're in the right track.

• 6:27Speaker 01

  Lifepan socket are also bridge aggregators. So they use different infrastructure providers under the hood. We only use Axolar and the ability, so the benefit that gives us is because CrossChain is already so complex. We can compress all of the hard stuff into one package and give you a really reliable execution. And then we can also buy NFTs across chain. So I just did a workshop where I showed users how to buy an NFT across chain. It's basically the same experience as building on a single chain. And because we're always using Axolar, we get very reliable execution. The user always experience this is the same thing. And also, we can add Axolar specific features.

• 7:07Speaker 01

  So Axolar has deposit addresses, which is this idea where you're withdrawing from a centralized exchange and you can't sign a transaction. All you can do is withdraw to an address. So in order to do something more complicated, like do a cross-chain swap or buy an NFT on another chain, which the exchange might not support. Say you're on Binance and you want to buy an NFT on Cosmos and Binance can't withdraw to that Cosmos chain. We can create an address by Axolar, which you can withdraw onto ETH, on L1, or whatever the cheapest chain is, like Avalanche. And then it automatically triggers a cross-chain swap, goes across, buys the NFT, sends it to the user's wallet. And these are very Axolar specific features, which we get because we're only built on Axolar.

• 7:52David Hoffman?

  Okay, beautiful. I'm starting to see it. And really, I think the theme, the meta that I've started to identify here at this Interop Summit is that there's definitely going to be more chains. And this is a content theme that we've had recently on Bankless when we talked to Jesse and the Optimism Team about the superchain. A lot of chains are happening, even though people are definitely getting chain fatigue. And so it sounds like Axolar and also Squid are doing a lot of abstraction work, not obfuscation work. So the idea really isn't that Axolar is this brand-new chain and we're all going to migrate to Axolar. That's not its purpose and that's not what Squid's trying to do either. It's really actually trying to reduce complexity more than add complexity. Is that about right?

• 8:27Speaker 01

  Yeah, exactly. Yeah, Axolar's done really well at... Just being a messaging layer and making security layer messaging layer to start with, keeping, getting the basics down. And now they've just launched this V2, which you might have already talked about. So you can, you can, uh, you can connect any bridge protocol, whether it's a ZK bridge or light client, fully trustless protocols into Axla. So what it means is that, you know, a new chain pops up. It has its own bridge protocol, which is fully trustless and built into the consensus. Axla can adopt that as well. So yeah, we're, we're really happy to be building on them because we feel like we'll get the most exposure and probably the best security. So yeah.

• 9:04David Hoffman?

  Well, what's the exemplar use case that you like to use an example to get people's minds wrapped around? Is there one that you have in your pocket to share?

• 9:11Speaker 01

  Yeah, sure. I mean, Cosmos is a great example. That's where, you know, a lot of people might have used Cosmos or Axla already to get to the Cosmos. Osmosis is a massive techs in, in the Cosmos that we're working with as well. So you send a message to, uh, on the Ethereum chain. And then Axla has a set of 70 permissionless validators. They all, um, check that the message is actually being submitted on the source chain. So it's Polygon. And then because Axla, so they, because Axla is connected to IBC, it's a Cosmos chain natively as well. You get IBC out of the box and we send, uh, a transfer to Osmosis via IBC. So you've got actually two interoperability protocols being used. You've got Axla's native validators, uh, checking the chain. And then you have IBC on the other end. And that's just going to extend. So you have ZK connecting to IBC.

• 9:56Speaker 01

  You have different formats of light client proofs other than IBC. You have, yeah, anything, um, under the hood. But from the user's perspective, if you're using Squid or even Axla with the Axla's SDK, it will automatically use the right one. Um, so you never have to think about it. Yeah. The idea is that the user never has to think about the infrastructure, the chain they're on. They're just, they want to use an application and they have money in their wallet. They want to use it, like, make it simple. Yeah.

• 10:21David Hoffman?

  I think as crypto people, we do have to admit that, uh, the chaininess that we love and touching the chains is really just for us nerds. And most people don't really want to be faced with any of that.

• 10:31Speaker 01

  Yeah. I mean, I love it. I, I do get frustrated though. Even deploying our contracts on every chain, it was impossible to get gas. I had to, I actually had to use Binance to like, to get gas to deploy our contracts.

• 10:41David Hoffman?

  Yeah. You have to go be banked, huh?

• 10:42Speaker 01

  Yeah, exactly. And so, yeah, I mean, that's one amazing feature, I feel like of what we do. We've added this, so when you onboard into a new chain, say you buy an NFT on a new chain, you've never been there before. You can do that in one click, but you'll have an NFT and then you won't have any gas there. So you can't use it.

• 10:58David Hoffman?

  Sure.

• 10:58Speaker 01

  And so we have gasless transactions coming, we have account abstraction. But Squid currently supports the ability to also send a small amount of your bridge tokens and swap them into gas with it. So you can do any cross-chain transaction onto a new chain and get some gas. So you can keep using it. It's just like more of these things that you don't want the users to ever have to think about. Yeah.

• 11:16David Hoffman?

  Well, Fig, I think the use cases and need for this is obvious. So thank you for helping build out this world of all this cross-chain infrastructure that we're definitely going to need.

• 11:23Speaker 01

  Yeah, thanks so much for having me.

• 11:24David Hoffman?

  Cheers. If listeners are piqued and interested, where should they go to follow down this rabbit hole?

• 11:28Speaker 01

  Yeah, well, follow us on Twitter. We're @squidrouter, that's our handle. Squidrouter.com is our website. Check out our docs. Yeah, reach out to me. I'm @ecdsafu on Twitter and happy to help you out.

• 11:40David Hoffman?

  The mascot of Squid definitely makes sense, like tentacles going everywhere, right? That's kind of the vibe?

• 11:45Speaker 01

  Yeah, yeah, everything around and we've got one thing controlling everything.

• 11:47David Hoffman?

  Yeah, well, awesome. Thank you so much, Fig. Cheers.

• 11:49Speaker 01

  Cheers, thanks for having me.