Building the First Solana Virtual Machine L2 on Ethereum: Podcast Ep. 123

Episode 123 of the Public Key podcast is here !! Imagine if you could combine the speed of a cheetah with the size of an elephant. Well in this episode, that’s exactly what Eclipse Labs and the CEO, Vijay Chetty are trying to do. They are taking the speed of Solana and combining it with the liquidity of Ethereum. Getting the best of both worlds to remove the transaction per second ceiling that limits crypto. 

You can listen or subscribe now on Spotify, Apple, or Audible. Keep reading for a full preview of episode 123.

Public Key Episode 123: Unlocking the Future of Ethereum with Speed and Performance

Imagine if you could combine the speed of a cheetah with the size of an elephant. Well in this episode, that’s exactly what Eclipse Labs and their CEO, Vijay Chetty are trying to do.

In this episode,  Ian Andrews (CMO, Chainalysis) speaks to Vijay about where his team got the idea to build Ethereum’s first Solana Virtual Machine (SVM) Layer 2.

Vijay discusses his long standing journey through crypto building and growing projects like Uniswap, dYdX and Ripple, prior to becoming the CEO of Eclipse Labs.

He breaks down Eclipse’s strategy of transitioning from app-specific rollup solutions to general-purpose high-performance L2 and the growing demand for 99% of apps on the blockchain demanding higher performance and throughput.

He provides active use cases for the highly demanded  faster transaction per second (TPS) and how developers on both Ethereum and Solana could transition to Eclipse as they get set for their upcoming mainnet launch. 

Quote of the episode

“Really the core advantage of [Eclipse] is being able to support a much higher transactions per second count and throughput for app developers’ and users’ benefit as well.”  – Vijay Chetty (CEO, Eclipse Labs)

Minute-by-minute episode breakdown

2 | Vijay’s journey from Wall Street to Crypto CEO of Eclipse Labs

6 | What it’s like working with key industry players like Ripple, dYdXand Uniswap

12 | Introduction to Eclipse Labs and higher throughput and TPS on Solana Virtual Machine L2

17 | What are the use cases that need lighting Transaction Per Second (TPS) speeds

23 | How do developers transition from Solana to Eclipse’s Layer 2 on Ethereum

27 | If Eclipse is successful, where does that leave Solana?
30 | Balancing decentralization and regulation in the blockchain ecosystem 

33 | Strategies and tips for fundraising as “crypto winter” starts to thaw out 

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Transcript

Ian:

Hey, everyone. Welcome to another episode of Public Key. This is your host, Ian Andrews. Today, I am joined by Vijay Chetty, who is CEO of Eclipse Labs. Vijay, welcome to the program.

Vijay:

Thanks for having me, Ian. It’s great to be here.

Ian:

I had not heard of Eclipse until we started chatting in preparation for this episode. Maybe we can start there. Tell the audience what are you guys building?

Vijay:

Yeah. Eclipse is building the first SVM Layer2 for Ethereum. It’s a Layer2 for Ethereum users that leverages the Solana VM for execution. Really the core advantage of that is being able to support a much higher transactions per second count and throughput for app developers’ and users’ benefit as well. So, really leaning into the differentiator of speed, which is due to the parallelization of the Solana VM compared to the EVM.

Ian:

This is making my head explode a little bit. I’ve actually spent some time this afternoon reading the documentation and you pull in not only the Solana VM, but also the Celestia layer for data availability and another component for zero knowledge proof. All of that gets packaged together in a completely new architecture. We’re going to dive deep into this, but before we do that, how did you find yourself to be CEO of Eclipse?

Vijay:

Yeah, so I’ve been with the Eclipse team for the last year or so and have been CEO for the last two months. So, I took over from Neil who was the founder of Eclipse, and for the previous 10 months, I was serving as Chief Growth Officer of Eclipse. So, responsible for everything on the growth and go-to market side, including BD, marketing, community, operations. So, really I think the transition came about in large part to facilitate the next wave of growth for Eclipse. So, very often the founder is great to help take things from zero to one, but when it comes to these infrastructure ecosystems, the demands and what needs to happen is more about scaling and execution and stewardship.

Those are really the things that I’ve spent a lot of my time on over the last 10 years building the crypto space. So, that’s where I’ve come in and really helped to build a lot of that up for Eclipse and help to scale that over the next few years as Eclipse goes beyond 0 to 1 and more from 1 to 100 in terms of its product and ecosystem.

Ian:

Well, I feel like you got your timing right in terms of market cycle where we’re on an upswing here and I think there’s a lot of enthusiasm building for new projects in the space. So, good luck there. But looking at your background, you’ve actually been in crypto for some time at some pretty big names. You spent time at Uniswap. You spent time in the very early days at dYdX. Take us back to the beginning. How did you first encounter crypto and decide that this was a space you wanted to spend your time in?

Vijay:

Yes. This goes back almost a decade now, which feels crazy to say. I feel like years in crypto are dog years. So, definitely each cycle is its whole separate paradigm, and it’s been interesting to see over the last three cycles, have been a part of how those paradigms develop and what is valued or prioritized across each of these. It’s definitely evolved a lot, but I think for me, coming into crypto in early 2015, what really stood out was you were combining three coordination type considerations, right? One was the financial and markets piece. Second was the technical and engineering piece, and the third was the legal and standards and social coordination piece. You had all three of these happening in the same substrate and crypto and blockchain technologies as…

I think the word blockchain was just almost enterprise. Blockchain was much more popular back then as well, but you had all three of these considerations coming into this one unified layer. So, that was a really interesting concept to me. I was on Wall Street at the time. So, I was especially familiar with the markets and the financial trading piece and found the other two parts of it fascinating as well, but that’s how I first got drawn in and it seemed clear to me from the outset that crypto really would need all this market structure, like exchanges and market makers, custodians, wallets, a lot of these things that you saw in traditional finance. It seemed clear that crypto would need a lot of that for its own capital markets.

But I think back then in 2015 actually was merchant services and merchant payments was really the thrust of what people were talking about. That’s what Coinbase was focused on at the time. There was none of this trading aspect or very little of it besides Mt. Gox and Poloniex and a few others. So, it’s been interesting seeing how center stage that trading and capital markets piece has become as well.

Ian:

Yeah. Your first professional entrance into the space was with Ripple, if I’m reading LinkedIn correctly. Is that right?

Vijay:

Yeah.

Ian:

What was Ripple back in 2015? Because that was well before I got into the space, and I imagine quite a few of our listeners as well. There’s now notorious for this battle with the SEC, but back then, take us back to the moment where you joined. What was the idea behind the company? Was it payments focus as you were just touching on?

Vijay:

Yeah, so it was still focused on cross-border payments, but actually the core of the idea was a much more retail or P2P cross-border payments at the time. So, where you’re allowing Mary to send a cross-border payment to Bob and potentially using crypto liquidity to do that, so US dollars to crypto and crypto to Mexican pesos for example. But doing that in a peer-to-peer fashion, nowadays, I think Ripple is much more squarely focused on the enterprise payments use case or at least B2B2C. I think that’s been the main evolution, but Ripple also has this trading aspect because they have their own token. I think that piece is what’s been the thrust of the ongoing litigation with the SEC as with other products as well.

So, you have this trading aspect and then as a result of the development of that trading aspect, there’s been a ton of liquidity that can be leveraged for purposes of cross-border payments. So, that was still the vision back then, but I think it’s much more of this peer-to-peer model that now you see on a lot of other chains. Whereas Ripple has gone more of the enterprise route. But I think Ripple to its credit understood the capital market story a lot earlier than others, including probably Coinbase at the time. You had this decentralized exchange that existed on the Ripple ledger and many people didn’t even know about it or weren’t able to quite grok it because of the different construct of the way the Ripple ledger worked compared to the UTXO model of Bitcoin, for example.

So, you had these different schools of thought, but I think now, it’s a lot of other token products and foundations have been able to learn from the missteps of early players like Ripple and be able to structure things in more sustainable ways or more regulatory compliant ways. But back then there was really no playbooks. I think it was almost just feeling around in the dark for what made the most sense. It wasn’t, I think, the intention of Ripple to steward what is sometimes perceived as a more centralized system. So, I think now there’s very much a playbook of how do you launch a decentralized system and do it in a regulatory compliant way. It’s also interesting how much more unified I think the industry is in terms of engaging with the SEC, right?

Whereas Ripple for a while was this outcast or pariah because of what was going on, but now it’s like as the SEC has cracked down on lots of other projects and Coinbase as well, there’s been much more of a unified front among a lot of these blue chips that have been working through regulatory enforcement or conversations with the SEC.

Ian:

Yeah, certainly the industry has, I think, become more unified on that front. You went from Ripple to eventually to dYdX and I think did that pretty early in 2020. So, you’ve been on the bleeding edge of crypto use cases. Talk about the decision that led you into the DeFi space and then from dYdX and onto Uniswap.

Vijay:

Yeah, so I took a little bit of a detour from 2018 to 2020. I was helping to build out this platform called SharesPost, which was acquired by this company called Forge Global now, which is publicly listed. SharesPost was building a digital securities or security token marketplace at the time because it was the leader in the trading of private shares or pre-IPO securities. So, that was a natural segue into this electronified digital security market or tokenized asset market. But I think back then, it was just so early for that we’re seeing a Renaissance come back in that now, especially with the involvement of BlackRock and other players. But back then it was just probably one cycle too early. So, after that detour, I really wanted to get back to permissionless crypto.

That’s always the part of the space that was most interesting and fascinating to me. You’re even seeing a lot of that infrastructure get adopted by the RWA or tokenized asset world in more focused ways. So, I think it really speaks to just the capability of permissionlessness or customizable permissionless technology as well. So, I wanted to get back into that side of crypto, and this was DeFi summer in 2020. It was just so interesting seeing this Cambrian explosion of all these at scale financial use cases like borrow, lend, spot trading, margin trading, perpetuals, and options trading, and pretty much every part of the traditional financial system you were seeing apps with product market fit and pretty good user interfaces and UX as well come out.

Then you had the whole yield farming opportunity on top of that. So, that was just, I think, an incredible time for crypto where it was really, really product focused and substance focused, and it was may the best man win in terms of that execution path. So, for me, it was clear I just had to be in that space. So, I started talking with a number of founders and early stage teams at the time to come in and really help them scale out their markets, exchanges, or ecosystems. dYdX has always been such a product focused team, and the product is so strong that there’s a lot to work with and a really interesting design space in terms of growing out the ecosystem.

For me, as a capital markets person, it was the perfect opportunity to really come in as the first non-technical hire and help to build out the entire business side and market-facing side of the team. This was before the launch of the V3 perpetuals product, now V4, which is the focal point. So, we really just spent a lot of time looking at what was the biggest opportunity in crypto, and FTX was just coming up. You had Binance and it was clearly in perpetuals, which offer this extremely efficient USD denominated way to trade crypto exposure, which is basically a thrust of what most users in crypto Twitter wants to do. So, it was clearly that was the biggest opportunity to go after. So, we started building that out and launched that in 2021.

I think just the product and growth skyrocketed from there. It was a really interesting time because dYdX on many days had more volume and sometimes more liquidity than even FTX or Binance had. I think that was just a testament to if you could build really good product with a good UX and offer something compelling for users and grow it intelligently and thoughtfully with the right incentives, you can really have a product that competes with the biggest centralized exchanges out there. That’s always been, I think, the long-term vision for DeFi is can it support financial services and financial activities at the scale that traditional centralized systems can so that you get these benefits of permissionless [inaudible 00:13:25]?

Ian:

I actually didn’t know that statistic about higher volume and liquidity than FTX on certain trading days. That’s actually pretty amazing.

Vijay:

Yeah, it blew our mind at the time, but yeah, it was something we definitely leaned into and that just helped to grow the firewall even more.

Ian:

And then you transitioned from dYdX over to Uniswap, the long-standing number one player in DeFi. Was that just continuation of your view of the market opportunity available in DeFi or was there other motivation to join that team?

Vijay:

Yeah, it was really a continuation of that thesis. I think when you look at crypto projects, they tend to move at hyper speed. You do what might take a traditional Web2 company five years, you’re doing that in one to two years, and then it’s more about maintenance mode or sustaining things and community stewardship. So, for me, I’ve always really enjoyed helping teams go from that 1 to 100 phase. So, it felt like Uniswap had some interesting design space around the core V3 and V2 protocols to really build out interesting products. So, I took that opportunity to go and help them do that for their world, which is of course, spot token trading, first and foremost. Uniswap was a little bit of the inverse of dYdX where dYdX was progressively decentralizing the entire time.

So, you had the company and then slowly it handed over control entirely to the DAO. As it exists now, it’s entirely decentralized with V4. Whereas Uniswap started off decentralized from day one and the product was fully on chain. So, then you had Uniswap Labs, which came about as an entity to facilitate and build products and services around the protocol, but not all of which might be fully on chain. So, it was this interesting inverse, and to me, that was the cool opportunity to come in and see, “Okay, what things can we build that help to grow the size of the pie for the protocol, but also allow Uniswap Labs to build a company and team around it to continue supporting it far into the future as well?”

Ian:

Yeah, amazing. That brings us up to the present to Eclipse Lab. So, maybe we can shift topics a little bit here. My number one question is what motivated the team to want to take the Solana EVM as a starting point to build a new Layer2?

Vijay:

Yeah. So, this was about a year ago at this point when we really started to go down this path. For the first nine months of the company’s history, Eclipse was doing a lot of work around app-specific rollup. This was helping individual apps and products launch their own rollup. It was this customization space where one player might come in and want an SVM that settles to ETH and uses Celestia or Eigenlayer for DA or another may want an EVM that settles to a whole different chain and maybe uses an internal DA solution. So, you had all these customized rollups that people were demanding. But what we saw again and again was there was a lot of interest in the SVM, even in the depths of the bear market, due to its performance in TPS and ability to support TPS.

People were going to make a big change from where they were. It was because they wanted an order of magnitude improvement in that TPS and throughput. The execution layer and then of course using Celestia for DA, you can get a much lower cost of posting data. I think in the modular space now, there’s more players coming in, but that competition will just be good I think for the rollup space in general. Celestia is proven in production and the first out of the gate, which was super important. So, we saw them being battle tested and felt like they’d be a great foundation on the DA side.

So, we started seeing these patterns, so SVM for execution, Celestia for DA, and then of course, Ethereum is still the largest chain in terms of users and TBL by an order of magnitude. Solana has really seen a renaissance as well this cycle, which is awesome to see. But just seeing this pattern, we felt, “Okay, wait a second. The SVM truly is capable of supporting far higher TPS than any EVM L2s.” MegaETH is trying to improve on that from an EVM perspective, but if you can really support the need of 99% of dApps out there, then there’s no need for every app to have their own rollup, right? That’s really a position that we hold strongly, which is that you only need one rollup if that rollup is very optimized for execution and effectively selling blob space efficiently.

So, what that means is if we can make Eclipse and the Eclipse SVM the most performant SVM by a wide margin, even more performant than Solana’s SVM, and we can do that because of what Eclipse uniquely is, which is an L2 where it’s okay for us to lean into more centralized sequencer set as an L2 because we don’t have to worry about that shared security. We inherit that piece from Ethereum. So, because of this design choice, Eclipse can reach a scale and we’re building towards a scale that will support 99% of developers out there. Maybe one or two of the biggest apps decide they want to shift their own app-specific rollup because they can solve for the user base and distribution and liquidity.

But you can really only do that if you are a base like a Coinbase with Base or a dYdX or a Uniswap, for example. They’ve reached massive scale, but for most apps out there, they really benefit from being able to share liquidity, usability with other apps, not have to worry about the infra piece. So, that’s what we’re singularly focused on. I think despite coming out from the world in which there were a lot of app-specific rollups, we really narrowed our focus to purely just this shared general purpose L2 because we think that’s sufficient to support 99% of the apps out there. It’s this idea that you only really need one if it’s as performant as Eclipse is.

So, that’s the evolution in how we got here, but I’d say we really came out of the modular ecosystem as well as the parallelization ecosystem. So, those are two trends that converge in terms of what Eclipse is building.

Ian:

We had a guest on a number of episodes ago where we got deep into the Celestia ecosystem and this idea of modularity being the future. I’ll be honest, I was a little bit sold on this idea of app-specific infrastructure because I looked at the performance side of it, but I think as I’ve thought more about the topic since that episode aired, usability seems to be the real challenge when you start slicing the world into app-specific rollups, because now you’re almost implying, I think, app-specific wallets and app-specific liquidity pools or there’s a bunch of backend wiring that I think has to get built. Maybe that was your experience building a number of these app-specific rollups was in the end that fractured universe is actually pretty unappealing for the end-user applications.

Vijay:

Yeah. Something that users might be willing to gravitate towards for the absolute biggest and best apps. So, dYdX went with its own app chain as null one. I think that’s something that the Uniswap team is broadly considering as well. Then I think in this cycle, you’ve seen a lot of interest in everybody having their own L2, and it’s appealing from a team perspective because you can capture value and control your destiny a bit. But ultimately, again, you don’t have to worry about the noisy neighbor and hotspot problem with the SVM in the same way that you do on other chains. If Eclipse can really optimize the SVM to an ordering magnitude more even than Solana has, then that is sufficient to support the needs of the vast majority of apps out there far into the future.

So, it’s from a purely solution-oriented and design perspective, if you’re a developer coming out on day one tomorrow, say, and you want the best system from a first principles perspective, we want to make sure that Eclipse serves that need. But historically or in terms of legacy apps, there may be kind other motivations in terms of driving more value capture, for example, because if that app runs its own L2, then they can capture sequence or fees or things like that.

So, I think there’s sometimes socioeconomic motivations that may still push people in that direction, but we’re really taking a stance that we think really optimizing the SVM for execution, leaning into hardware acceleration, which the SVM can uniquely do, and doing those two things can really allow the Eclipse SVM to power the need of any at-scale app out there, whether it’s settlement, order book trading, deep-in, or consumer. In some ways, that’s maybe counter-positioning against the prevailing sentiment of this cycle.

Ian:

Will Eclipse run all the sequencer nodes themselves or is there a plan to decentralize that and have many operators? What’s the strategy there?

Vijay:

Yeah, so I’d say ultimately the Eclipse sequencer set is going to be a lot more centralized than other sequencers sets. It’s this idea of a thick or beefy sequencer. So, having that more concentrated sequencer allows the Eclipse L2 to really lean into hardware acceleration. So, you can keep really just growing that TPS into the hundreds of thousands and support all apps with a single L2. So, that’s something that we definitely see as a key part of our long-term roadmap is not growing that sequencer set too big. Ultimately, the Eclipse Foundation will be responsible for managing the selection and stewardship of the sequencer set overall. There will be independent parties, but that’s something that we think still makes a lot of sense to keep concentrated.

Ian:

Interesting. We’ve been talking a lot about the primary advantage here being both throughput and transaction volume, but we’ve done that absent the use case that demands those specs. Being a tech nerd, I often assume faster is better by default in all cases, but I’m really curious, what are you seeing in terms of the applications that are seeking out that performance, particularly anything that has maybe previously said, “Oh, we can’t run this on a blockchain,” or “We can’t incorporate blockchain into our architecture because of the known performance ceiling that exists on some of the predominant chains today”?

Vijay:

I’d say in terms of use cases, right now, I think infra is really leading where use cases are. I think that’s okay for right now because if you can really demonstrate TPS in the tens, hundreds of thousands of transactions per second in production, which is something that we’re heading towards, then you really allow developers to think of a whole new design space. I think the most basic way of putting it is offering Web2 scale to Web3 apps. So, rather than just porting over Web2 products to Web3 for the sake of it, what new things can truly be uniquely enabled that lean into on-chain dynamics?

I think some of that may be gamification or leaning a bit more into the attention economy that exists on-chain, right? Because everything is so attention driven. So, we have yet to see, I think, these new category creators, if you will. But I think right now, the things that excite me the most in terms of what could be taking advantage of Eclipse’s throughput and performance in the next couple of years is a few things. So, I think the most basic and obvious and well-established is central limit workbooks, which have been the holy grail historically of demonstrating the capabilities of throughput performance.

Solana had this from day one where with Serum and the other early CLOBs like Mango and others, you saw the ability to support at scale central, mid, or book trading fully on chain or to whatever degree on chain made sense as well. So, I think that’s something that’s a very clear opportunity and we’re excited to enable and support just given how huge, huge of a market it is as we were talking about earlier, but extending beyond that core DeFi design space of CLOBs and Intense or RFQ systems. I think the things that really excite me, so one is consumer. We’re seeing a ton of activity around the cycle with the likes of Farcaster, Frantech, Fantasy Top. There’s this financialized consumer aspect as well as just interesting new consumer use cases.

So, these probably have yet to reach a point of mainstream breakout adoption, but I think the conditions are definitely coming into place for that to happen. The mindshare around crypto continues to grow around this upwards trending oscillating line every cycle. I think just given how much engagement there is on social media, Twitter, and TikTok, and all these things, that’ll probably just continue to grow. So, really finding a breakout consumer application is an area that I think would be a huge win for the space in general and is the type of thing that Eclipse is looking to support as well on the consumer side, because you would have tens, hundreds of thousands of transactions per second depending on how the app is designed.

Next is DePIN, right? So decentralized sensor networks, decentralized compute networks, data networks, there’s a lot of interesting work happening, this Cambrian explosion on the DeFi side now and a lot of that very recently on the AI side. So, that’s an area that I think continues to be very interesting long-term. A lot of those teams tend to start off very product focused and then reverse into the on-chain dynamics, which I think makes a ton of sense and leads to the best projects and products rising to the top, but it may take some time for that to happen. Then the last I think is gaming, which of course has continued to be there every cycle.

Probably the issue with it historically has been a lot of it is DeFi with kind a UX on top. So, really getting to a point where there’s interesting gameplay for native gamers, and then they almost fall into the on-chain economics pieces of it. So, that might take a bit of time as well, but those are really, I think, four of the things that can most take advantage of the type of throughput and performance and cost benefits that Eclipse offers.

Ian:

All of those make a ton of sense. I’m excited to see, as you all get to mainnet, what actually gets built on the platform. I am curious as a developer, so someone maybe thinking about deploying an app, they’ve heard us talking so far and they’re excited. Hey, I’ve got a high throughput demand, or I need really cheap block space. What’s the complexity to port over? Maybe take it from the perspective of somebody that’s on Ethereum L1 today, building smart contracts, and then maybe second perspective from somebody coming over from Solana. What does it take from my perspective to now get that what I built already running on top of Eclipse?

Vijay:

So taking that from reverse maybe. I think it’s most easy and straightforward for existing Solana devs, right, who’ve shipped an app on Solana because they can effectively take the same code base, the same product and just change the RPC or contract address and deploy and then immediately tap into Ethereum users and assets. That’s really the vector that a lot of these Solana blue chip apps are coming from, which is that they want to take their existing products, which are tried and proven and grow into the Ethereum audiences. So, because Eclipse settles to Ethereum, you can really take advantage of that benefit. That is probably the most straightforward. So, it’s a market growth story and they don’t need to deploy in a new language.

When you’re talking about the EVM devs or devs who know Solidity, there’s definitely a jump to code on Rust, and I think we’re starting to see more early crossover there where Solidity devs are learning Rust and Rust devs are learning Solidity vice versa, but that’s going to take some time. I think these are also fairly tribal ecosystems, and Rust in particular has a high barrier to entry. So, I think in some ways that’s an interesting silver lining because Rust devs who built products are of a certain quality or threshold where they can really ship interesting things. So, in some ways that acts as a filtration mechanism for quality developers in the ecosystem. But at the same time, there’s a lot of creativity that’s been happening over in the Ethereum and EVM world.

So, we want to help allow those developers to migrate over as well. So, beyond just broader Rust education, the way we see that happening near term through enabling EVM to SVM translation. So, this can be done through the likes of Neon who we partnered with to make it easy for devs to deploy in Solidity, but have that translation happening. There’s some trade-offs in doing that, but ultimately that’s an easy way to help bring and migrate over developers from the Ethereum world initially. That’s something that we do see as a really important piece of what Eclipse can help enable. But longer term, if we look out five years, the pace of new developers coming into crypto continues to skyrocket.

So, I think for us, beyond these near term bets of engaging existing Solana blue chip developer audiences and then Solidity audiences, it’s really about establishing Eclipse as the best choice from a first principles perspective. So, if you’re a developer that’s say graduating college or dropped out or is coming from an accelerator and wants to build in Web3, we want you to choose Eclipse because it’s the best stack from a first principles perspective, highest TPS, cheapest cost of posting data, access to the best shared security, and largest user base in crypto via Ethereum. We expect those devs to naturally want to learn Rust at that point and that’s something that will continue to help facilitate, but that’s how we see the world in terms of those three buckets longer term.

Ian:

It makes me wonder about the future of the Solana ecosystem. If you’ve got an audience who’s saying, “I want the liquidity and the user base and all the good things that come with the Ethereum ecosystem, but I don’t want to give up the Rust language and the high performance virtual machine execution environment,” and they’re seeing Eclipse as a solution, it makes me wonder what’s left on Solana down the road if you all are able to be successful with your strategy.

Vijay:

I think that was a line of reasoning that we had worked through early on and had talked a lot with the Solana team about and had mentioned to us. I think maybe in that state of the world when we launched a year ago, that may have been more concerned, but I think now Solana has really retrenched itself in terms of being here to stay. It’s really been advancing this idea of the monolithic L1 that can truly support the full scope of needs of developers. But at the same time, the Solana Foundation, Anza, Firedancer, and others have really been helping to propagate the best parts of Solana’s tech and more of an open source way.

So, that’s something that we’re definitely bullish on in terms of Solana’s L1 is here to stay, but we’re going to see it parts of Solana reconstitute in other very interesting ways. So, Solana is a DA solution or the SVM as an L2 solution, or even what Maker had been exploring a while back of Solana as an L1 alternative. So, this is all, I think, good for Solana in the same way that the propagation of various parts of the Ethereum stack has happened as well. That’s been net-net good for Ethereum. So, I think in this current state of the world and going forward, these things are all positives for Solana. Then really tactically, for example, if you’re a developer who’s deploying to Eclipse, you could easily port that app over to Solana and tap into that captive user base as well.

Of course, the vice versa, if you’re on Solana, you could deploy Eclipse to tap into Ethereum. So, I think that’s something that just given the magnitude of these ecosystems and where they are now, these are almost two distinct ecosystems that both make sense to tap into, right, Ethereum users and Solana users, and they’re both here to stay in my view.

Ian:

Yeah. Do you guys anticipate down the road having a similar style of roll-up strategy with the different data availability layer in the Solana L1 ecosystem? Would you take what you’ve built here and move it over there as well, or does the advantage set not hold quite as much depending on the Solana L1 roadmap?

Vijay:

Yeah, the DA piece is definitely interchangeable. I think that being said, we have a lot of conviction in Celestia and what they’ve built, and it’s very proven and in production enables us to have a very low cost of posting data with the Celestia, the bridge component that we built. So, it’s something that we have a lot of conviction on, but of course, long-term, there will continue to be more DA providers. So, I think with the whole modular space in general, you’ll continue to see plug and play replacements of different parts of the stack, whether it’s the VM, the settlement layer, or the DA layer. So, that’s something that’s just good for everybody in aggregate. But I think in the near term and foreseeable future, we’re definitely committed to Celestia.

I think they have a lot to offer, but over time, I think Solana will continue to see itself used in a DA purpose. I think you’ll continue to see the other VM players start to innovate and have their VMs fork away from the core, which is definitely something that could and will happen with Eclipse as we continue to tune the Eclipse SVM for performance or what we’re calling the Turbo VM. So, that’s something that I think is net-net good for the space just to continue to have this growth in the options at the VM layer, the settlement layer, and the DA layer. So, yeah, we’ll see where things go, but it’s great to see Solana being a part of that conversation as well.

Ian:

Yeah. I’m really curious about, earlier we touched on Ripple’s regulatory challenges that have now spread to some of the other big players in the industry and connecting that to what we were talking about earlier, the more closely held sequencers that operate the Eclipse network. How do you think about the challenges of operating a company in the US given current regulatory climate towards the overall blockchain crypto ecosystem and then the specific amount of decentralization that’s necessary to both win hearts and minds, but also appease the regulatory authorities that are involved here? It seems like a really hard balance to strike as an outsider to your organization to find the right spot to position.

Vijay:

Having been building crypto for 10 years, striking the balance with regulatory considerations is definitely I think one of the trickiest balancing acts, but one that for me, I take extremely seriously just having also spent all that time in the space. So, Eclipse’s approach is very much to work with the regulatory framework. So, we’re a US-based team, building this technology that will be open source, and we’ll have the Eclipse Foundation as a separate entity to support the overall growth and stewardship of that open source Eclipse ecosystem. Eclipse Labs will evolve to become one of the primary development shops around the Eclipse protocol.

So, that distinction is something that we take very seriously, and the Eclipse Foundation in terms of its stewardship of the governance of the Eclipse ecosystem and the overall growth, we see that forum as really being the way that say potential token holders could vote on changes to the Eclipse network or changes to the sequencer set and these other things long term.

So, of course, this idea of progressive decentralization takes a long time to execute and implement, but approaching that in the most thoughtful way is something that we take extremely seriously and are working with multiple law firms and regulatory advisors on. In terms of that more centralized sequencer set, yeah, I think the regulatory piece is a big consideration around that, but we see a path forward there in terms of being able to strike that right balance and ensure that the right pieces are outside of the US and that in terms of any access that Eclipse Labs facilitates to the protocol, that will be something that we rely on developers and others in the open ecosystem to manage, right? Eclipse Labs is the builder of this piece of open source code.

So, so far as there are sequencer considerations, that’s something that the Eclipse Foundation will help to manage and implement on behalf of the technology, but developers may also build their own front ends that have their own restrictions on the KYC and OFAC, for example. So, it is definitely a multifaceted many moving parts type consideration, as you say, but it’s definitely something I’ve done a handful of times before and there’s a path forward. It’s just I think it requires a lot of stakeholders to do in a right and thoughtful way.

Ian:

Yeah. There’s no simple easy answer there, unfortunately. Now, you all made some news a few months back with a pretty big fundraising round, which I took as a really positive sign because I think Venture Capital had stepped back from the space broadly from the end of 2022 for much of last year. I’m curious, what was your experience fundraising, and then maybe for other founders out there listening to the podcast, what tips would you share in terms of their own journey through trying to raise capital in this market at this point in time?

Vijay:

Yeah, the fundraising cycles are always interesting, and I think especially these days, there’s so much more quickly moving as the cycles themselves are. The booms and busts and waves come and go so quickly. I’d say in general for Eclipse, what worked for us was really articulating a compelling technical idea very early on that really had meat behind it and where we had some track record in terms of executing on it as well. So, I think there’s also something we said for the timing in which we did that, which was the start of this year. So, the combination of those two things and really getting in the weeds with investors in terms of what our roadmap was, why we were building that roadmap, who the target audience was for devs and users.

We had a really clear vision articulated, and Eclipse was the first to do this in terms of SVM Ethereum L2s. I think with the handful of others that have come out recently as well, you’ve seen a lot of validation and also others trying to run in that same direction as what we’re doing. So, competition’s always an interesting consideration, but in my mind, what we’ve seen in terms of Eclipse and competitors for Eclipse coming out has really been a validation of how early and right we are in terms of building out that idea of an SVM Ethereum L2. So, I’d say in terms of the fundraising environment, it definitely seems to have warmed up a bit in the last few months. I think particularly with the infra side, you’ve seen some other pretty large rounds announced.

So, we’ll see how things look in the second half of the year. Of course, the broader macro circumstances matter a lot here as well. But I’d say in general, just especially for the teams I’ve advised or worked with in the past as well, it’s always about articulating a clear idea, having a zero to one product and track record on being able to execute on that, and then a clear plan for how you build things out and scale. Of course, hiring a great team of people behind it is important as well.

Ian:

That’s excellent advice for anybody listening out there. This has been a fantastic conversation. I’d love to wrap with my customary closing question where I give you the opportunity to tell us what’s coming. What should we be excited about on the Eclipse roadmap over the next year?

Vijay:

Yeah, I’d say the biggest thing is that we have mainnet coming up soon this summer, so that’s something that we’re super excited about and heads down focused on shipping. So, more to come on that, but I’ll tease that. Yeah, excited to announce the waves of applications that we have building on Eclipse as well. I’d say in general, our approach has always been high quality and substantial announcements and doing those in a thoughtful way. So, we’ve been a little more heads down and quiet recently as we’ve been building and locking a lot of that in. But in the second half this year, it’ll be a pretty big launch for us. So, excited for that.

Ian:

Yeah, I am too. Can’t wait for mainnet. Vijay, this has been fantastic. Thanks for sharing all your insights and we’ll be keeping an eye on the project.

Vijay:

Thanks for having me, Ian. It was great chatting with you.