Caleb Sheridan Show Notes

Caleb Sheridan Show Notes

  • I came for a job with PokerStars in Isle of Man, which has this great community feel about it and ended up staying in the UK and starting a family. London is big on fin-tech and startup scene.  I really liked it and stayed.  I was working in Poker management – I put myself through school playing PokerStars. I started as a marketing manager. I work my way up to a product manager for new users in PokerStars to optimise their experience and this is what got me into data. This is why I am so passionate about Data and Blockytics to optimise the user experience.
  • When you see an organisation from the outside using data looks perfect, in practice effectively using data is really difficult. Collecting data is extremely difficult. There was definitely a big shift at one point when I was there, and I pushed for it. To become a data-driven organisation and look at what is actually happening to users and how we can use that data to help make decisions.
  • It seems that most of the data scientists we talk to about AI and stuff; the hardest part about data is the standardisation and labelling process. That is what takes up the majority of time, to be able to get to the point you can actually interact with the data.
  • Manipulating it and forming it into the way you need is definitely the hard part. I think there is another challenge in terms of verifying and validating that the data is correct; if how you are capturing it makes sense; those are definitely the hard parts and the time-consuming parts. There is a danger in terms of when you are manipulating data that you don’t accidentally make any changes to it; that it is going to be meaningful in the end results for whatever you are using it for.
  • The 30-second pitch for Blocklytics: Ultimately, we are trying to make blockchain data simple and useful for people. Right now, it is pretty painful to extract blockchain data and we are a picks and shovel kind of business. We are helping teams extract and convert blockchain data into something a bit more manageable. We have clients work for or we participate in grants and we extract on-chain data into reports and dashboards and even other applications for these team and their communities. Technically it is work anybody can do. We are specialising in data manipulation.
  • How did you come into this? I was looking for a very specific answer to a question on the Ethereum blockchain. I did a little bit of research and started digging through Etherscan and at that moment was my ah-ha moment for crypto and Ethereum. We had this amazing rich data set on all this activity and usage activity of money that was sitting there and available for anyone who is curious to look, but getting that data out with the existing architecture was pretty painful process. I wanted to know how much a certain smart contract was generating in revenue and that first extraction and analysis on that took a full week of time.  I wanted to know how much a gambling app was generating.  They had generated a little over $1million dollars gross revenue, but they were spending a lot of money on bring oracle data onto the blockchain. They actually spent over half of their revenue on this oracle cost and not to their oracle provider but in gas to the system for the oracle transactions to go and fetch some random data off-chain and bring it on-chain.
  • There are not any poker apps on Ethereum yet. Scaling work is coming I have seen these. In order to have a good user experience, you need to make a lot of transactions on blockchains.  Each hand could take minutes to settle on the blockchain.  You would need a sidechain or layer 2 off-chain to run the game and just settle on-chain.
  • Poker is this amazing challenge to try to solve it; to build a base for more complex products and projects. It is a really solid starting point for trying to solve the scaling problem.
  • Blocklytics have some cool internal projects; we actually fund these public efforts with clients funds and grants we have received. I think that for me that is the fun part; taking a really complex blockchain topics and data making it so that normal people can benefit from and really understand the data.
  • We have 3 co-founders and a network of contractors working for us. We are a small team, and that is where we are right now. Are you self-funded? So far, we are bootstrapped. We have spent a lot of money on R&D, on how to index blockchain data and you know it is a really tough problem to solve and index everything to make it easily searchable and easy to manipulative by people who need to use it. We are constantly exploring ways of how to index chain data.
  • Some of the products you have built are a bit more open and easily digestible. Where does your revenue generation come from? We have been really lucky to work with some big names in the space and some great teams so far. Our paid work has been to analyse on-chain data and put that into reports and dashboards for our clients in web 3.0 applications. We are looking at and working with a lot of DeFi data. One of the projects we are working with and excited about is the application we built with Foam, Chainlink and Google. We built a web 3.0 application that incentivises people to contribute to a web 3.0 network in a positive way. In this case, it is to add points of interest onto a Foam map. But in order to find out what does it mean to add value to the network, we take a look at up to date network information and combine it with off-chain data in complex geospatial analysis using Googles latest tools. Then we bring the result of that decision as to whether or not it bring value to the network and should be incentivise. We bring that back onto Chainlink to reward and pay users. We did a testnet version of this recently and we are looking at the feasibility of launching a mainnet for this. It is a challenge of data analysis, working with oracle data and network data. Foam is a token creation registry data network.  They have a beautiful front end, but the availability of data is their challenge.  Foam is a consensus-driven token map as an on-chain oracle. In order to make changes, you have to be able to know what an area looked liked the day before.  How can we use data to help network participants do their job in the network? We generated an email list that sent TCR (Token Creation Registry) to the users.  It helps them find new challenges that need to be voted on. The idea is how do we help their community take the actions they are supposed to take.  We have made FOAM tools.  This is basically you working with the company.
  • We provide APIs for almost everything we do. We provide APIs also if developers want to build on Foam or use blockchain data with no hassle.
  • How does your indexing work? We use all google products; we have run a series of nodes.  We index all data into Google big query. We also pull out project-specific data – we cache these subsets of data so we can filter and serve this data.  What you discovered from your bottom-up analysis was that in conjunction with the FOAM team or through your work with the data? It is a bit of both.
  • This topic of having all data public, there is also a complexity around that.  I believe that privacy is extremely important.  I think that there is a huge dystopian risk with having all data be public.
  • Is there anyway you can mask or keep things private via a layer 2 solution, taking things off the Layer 1 chain?  Is there any way we can mask user-specific data?  The public record of assets is very important to Ethereum.  We need a way to detach the history of an account from its future activity.  When you make a DeFi transaction, you do not need to see every other account transaction you have ever made.
  • A full chain analysis after one transaction, you could trace your entire net worth and transaction history on-chain. It is easy to daydream towards a dystopian nightmare.  It is just that some people believe that all data extracted should be used to optimise handle sales/marketing and this is only on the commercial side.  The privacy elements are very important.  The other thing is putting funds from a centralised exchange and sending them to a fresh wallet for their transactions. This camouflages previous account transactions.
  • I don’t want to rely on exchanges to start with a fresh account. How far do you want to go?  Options to share or not share historical information of transactions would be really good. Aztec is really far along with their solution.  We will get them on the podcast.  Like Z-cash, it is a joint split transaction.  From the tracking standpoint, the assets and the amount of assets are not on a per-account basis.
  • Will you be focused on decentralised products only going forward?  We are not really picky – the projects do not have to be DeFi.  We are happy to work with teams that are pushing the boundaries on decentralisation. We are using a lot of web 2.0 technologies to address a lot of the data solutions.
  • With Foam, we were involved in their community.  We were really testing out if there was something to be done if there was a business model in this.  The feedback was very valuable for us.  We analysed Uniswap in great detail. What do we do with data and what types of projects we can work on? DeFi to gaming. We have been able to jump into and run projects across the Ethereum network.
  • Other favourite projects: UniSwap, a centrepiece of DeFi.  No matter what happens, it is truly decentralised regardless of what happens.  It takes a very complex problem and simplifies it.  So when you trade on UniSwap, you are trading against the smart contract without any counterparties. You are always getting a fair price. This automated market-making tool creates a efficient order book and it can be integrated into other projects.  This creates trading liquidity in these pools. It is super interesting.  It gets more interesting with these integration.
  • I would like to use UniSwap combined with Maker combined with Synthetics to create some strange tokens that trade using these derivatives.  The narrative of ETH is really switching to DeFi.  This will be the year of DeFi.  DeFi does not require large transaction volumes, and it is the most interesting use case on Ethereum this year.  Ethereum has absorbed most of the activity in the community.
  • Will they be able to capture all this value? Will there be competing chains in the future?  Right now, ETH is leading the way.  I doubt it will be the last use case of Ethereum. I think Gaming has a really strong chance as well as some Daos. There is a difference between last years ICOs and the DeFi push this year.   There was no value behind those tokens. 99% of tokens have lost all their value.
  • Holding tokens is basically a price game for both Ethereum and Bitcoin.  The rules of the price game changes when you have DeFi products.  Price appreciation is the goal, but with DeFi, it also is about price stabilisation.  You do not have to give up the possibility of appreciation but you can create price stabilisation.  How do you account for your money, in ETH or Dollars? Ethereum as a buy and hold game and as a payment game cannot be played together. I think we are just scratching the surface of DeFi.
  • Bitcoin/Ethereum mixture before you pull into other tokens. There is no trustless bitcoin yet.  Is this something RSK will be able to solve with their Bitcoin products?  There are projects that are trying to enable transactions and exchange of products between chains, ETH/Bitcoin, ETH/NEO etc.
  • There is no trust needed in Maker. With other solutions, you need an element of trust.  How much money will people want to lock up in a system where trust is needed?
  • We have done work on the RSK network, which is based on the Ethereum network. What is your option of RSK? I like their products.  How do you bring people into a new network and use your contract? I think that is their challenge – getting users to use their network or contracts via DeFi products.  They have a different mentality than Ethereum users.  When smart contracts are available to bitcoin, I am sure they will use it in future.
  • That learning curve for bitcoin users is going to be very steep when smart contracts get to the Bitcoin network.  InstaDapp and Augur… people build their own layers on top of RSK’s network and smart contracts. The application layer is being built on the existing smart contract networks which have already been released. The London blockchain space is reasonably sized and a mix of cyberpunk and professional individuals. It has a good balance, and it is refreshing. It is the right approach for the network right now and to bring new people into the network.  It feels like it is really thriving here.
  • Pools.fyi: Manage anyone’s DeFi investments in pools… we’d love your feedback on this product so we can make it better.
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