Ivan Kan: What is web three, it’s the new internet. And it’s already here before we talk about what’s new let’s first talk about what web one was, what web two is and what web three is going to be. Web one is the AOL Netscape, original internet Explorer, where you would log into things, using a username and password, Web two is Facebook, Google, Amazon. If you’ve ever signed into a website using a Gmail or Facebook account, you’re using web two technology. Web three is Ethereum NFTs board, a yacht club where identity and ownership is held by you and verifiable through smart contracts. So what can you actually do with those NFTs? Is there a real world use case around NFTs and decentralized identity? To answer these questions, we have David Snyder, the co-founder at lit protocol. He’s going to blow your mind on the possibilities of NFTs web three and smart contracts, which can be applied to almost everything we’re doing today from ownership of property, with NFTs, to tickets, for live events, and even logging into your workspace. David is building the infrastructure for these projects.
Today. We have really awesome guests, David Snyder from lit protocol. So we’re excited to unpack some of the topics around know web three NFTs decentralization. There are a lot of things that our community has been asking for. So we’re excited to have you and in full disclosure, crowd create is an investor in Le protocol, just for disclosure purposes. I want to say that first, before we dive in, but David, welcome to the show
David Sneider: Ivan thank you so much for having me really looking forward to getting into this discussion.
Ivan Kan: Yeah. So it’s been a wild ride. I mean, these past few months have been pretty turbulent, but one thing we’ve been hearing from the community is like, you know, a lot of non crypto projects are starting to get interested into NFTs, particularly what NFTs could do. You know, this is, this is a project you’ve been working on you and your co. So tell me a little bit about you David. Like how did you come across this idea and why, why NFTs?
David Sneider: Yeah, I can all give a kind of a, a high level on what we make it lip protocol, which is a decentralized access control protocol. And what that does is functionally turn things like NFTs or other on chain, data or credentials, essentially into access passes to other resources in kind of a fully decentralized way where also encryption is available. And how we got into this specifically, we had built an NFT marketplace and this was about a year and a half ago. And Chris, my co-founder said, Hey, David, look at this. And it was an HTML five NFT. It was an NFT that contained a bunch of audio samples. And just to kind of add a little bit of context, you know, NFT is functionally pointer on the blockchain, at least in, in most cases that is pointing to some file. And that was kind of the light bulb moment we had where it was like, oh, wow, these aren’t just video screens or picture frames that are platform lists and embedded inside of a browser window.
They themselves can be browser windows. And we basically built the first version of the decentralized access control to make that statement true. And then there’s this classic kind of quote that says innovation often happens during work rather than before. And as we were kind of pulling on that thread basically, and, and paying attention to a lot of the other problems in the space, realize that like in generalized decentralized access control network provides a lot of implications beyond just unlockable NFTs. And we can get into some of that today. And then for a bit more historical context, Chris, my co-founder Chris Cassano, it was one of the, or was the inventor of the first Bitcoin hardware wallet. So he’s been around the space for a long time. I first, I first kind of like a deeply proxy Ethereum white paper in 2015. And it was aligned with a lot of the other things that I was thinking about. And so was, was, was quite moved once being able to understand that
Ivan Kan: It’s a lot, that’s a lot to unpack here, but I want to bring it back to that point. I, you said the point of pointers, and if anybody’s familiar with like programming, it’s a really simple concept, but the fact that it’s sitting in a decentralized place, I think is kind of one of the core core things that you brought up there. Why is that so key? Because I mean, there’s, there’s, Bitlys, there’s are a lot of ways to redirect and point to a specific asset, but why is it so important to make it decentralized pointer?
David Sneider: Yeah, so, I mean, this is functionally, the innovation of Bitcoin and blockchain is being able to create a decentralized ledger. So functionally what we get out of a decentralized ledger, whether we’re talking about a crypto asset like Bitcoin or an NFT, is the capacity to add historical context on the internet prior to these decentralized ledgers. There wasn’t a trusted way to say this thing happened at this moment in time, whether it was the minting of an NFT, the selling of a token doing some kind of smart contract function. there was never the time dimension on the internet prior to this and adding that new dimension to the way that we can interact digitally. And this was only added through kind of solving the Byzantine generals problem, basically designing an incentive-based network in an adversarial context where you can’t necessarily rely on the parties to trust each other, but you get them to collaborate by aligning their incentives.
This is the kind of key innovation of Bitcoin. And what that means for, for everybody is that assets that couldn’t have a price and we’re really liquid before now have that capacity, because we can have basically the authenticity that a certain piece of art or token or NFT was created by a specific individual, because they control the private key to the wallet, address that minted it or created it. And then that asset can be traded around using this decentralized ledger system. And we, we, we can go into some details about how blockchains work if you like.
Ivan Kan: Yeah. I do want to, the reason why I brought that up is because we get a lot of questions around, like, what is it NFT? Like, why is it, why is it that this picture is the authentic? Why is it that this one particular one is authentic when I can copy and paste? And then you kind of answered it there because you can see a timestamp of every transaction were originated for that particular piece. So that kind of goes into why, you know, why you can, you can trade it while you can sell it, why there’s a secondary market. So that’s, that’s pretty fundamental to this. I also want to dive into, so a lot of people have been kind of, kind of talking about your project. Like it’s a middleware, like it sits in between, and it gives added functionality to, I know you said not just NFTs, but let’s just focus on NFTs right now because a lot of companies are asking about this. So what is, what is the position and what is the value that the protocol brings to these, like, you know, adding value to an NFT, adding more experiential things to an NFT.
David Sneider: Yeah, absolutely. Just to respond to what you said earlier. I think there’s one kind of key word that I left out before, which is, is the notion of ownership and owning the asset through encryption is really what it boils down to, but in terms of the kind of extra capacity and what it means to be middleware, I can tell you a bit more about the protocol in detail, and then we can explore some examples in NFTs, as it relates to a couple of different categories, specifically around community membership, what this means for retailers, what this means for Dows, or kind of internet corporations, art and creator experiences, as well as gaming. And I think there’s implication across all of these categories and we can absolutely dive into them, but in their general sense, essentially, the way that lip protocol works is that it is a distributed network of nodes that can validate some information that’s on chain, such as Alice owns this NFT.
And it’s not just one party that’s doing that validation. It’s an, it’s a network that’s doing that. And then using, using a cryption methodology called BLS threshold encryption, each of those nodes that do the validation can basically create what, what is called a decryption share or a signature share and send the, those shares down to the user. And this is kind of the interesting thing about it is when that user on their computer, what we would say is like in the client, when they aggregate those shares above the network threshold, they can reproduce that initial secret. So it’s a way to say, you have this credential on chain, you own this NFT, and therefore you get access to a given resource. And as mentioned earlier, we can talk about some of the examples that given resource could be a chat group, or it could be on discord. It could be elsewhere using decentralized web tech. This is, there’s a whole kind of notion of, of, of membership here. And all of these pieces are interconnected, but I can kind of go through them quickly.
Ivan Kan: Yeah. I want to stay on that particular one first, because a lot in a lot of what we do here is we build communities and I’m like, you know, a famous one is like friends with benefits. There are a lot of these, you can call them gated communities, but what does that add to the community itself? I like to hear from you.
David Sneider: Yeah. I mean, so if you look at any kind of community that existed before a blockchain, there is the notion of, of credentialing of roles and responsibilities. Like anything beyond just a few friends trying to meet up in a group thread requires some level of coordination and, and yeah, essentially it comes down to coordination. So to be able to do that coordination, you have to know who has authority over what who’s in charge of what, and, and like, as we’ve seen, you know, if you think about the rise of, of SAS products, I’m not sure what the exact status, but year over year, over year, companies are using more and more and more SAS products. The way that digital organizations and communities are built is by using just a wide variety of tools. And if we think about blockchain as the master credentialing system and say, okay, you know, Bob is our, our archivist, and therefore he has the right to write data and do updates on our kind of library app. You imagine there’s, you know, as with any kind of organization or community there’s dozens, or potentially hundreds of different applications that any community is using to manage the work that they’re doing and the jump between the community, deciding who should be responsible for what, in a distributed way, that information can go on the blockchain as a credential, as an NFT. And then that information can be used to basically let that specific individual have authority or responsibility in some other third party application.
Ivan Kan: So I can see applications here really strong. And like, let’s say the workplace where, you know, you come in, you’re, you’re, you know, I don’t know, consultant a level a, and you want to get access. So by provisioning through an NFT, they can get access to specific things. I can see that a very big application. What about on the community side? Like, let’s say like a discord group or like a, I know a lot of companies, even, even, let’s say for example, you have a token and you want to say that only are token holders or NMT holders of my past get access to my exclusive community. How does that work?
David Sneider: Absolutely. So I can tell you about one integration that we have that that’s live right now. That’s with a platform called gathered town. What gathered town is, is it is a spatial social platform. Essentially. You walk around as a little 2d character, and when you get close to somebody else, you’re in a video account with them. It’s kind of like being at a virtual virtual conference. And the integration that we’ve done with them is to basically enable token gated or NFT gated doors or, or portals. So there’s a few examples that are already live with people who have basically set up whole worlds, where there’s certain areas that people who are own a certain NFP are credentialed in a certain way can go into and have a discussion about a given topic. Just like you would see at any kind of community events or conferences with different, different areas, for access, different content, being discussed in different things, depending on how integrated somebody is into the process.
Even if you take an example, like a concert, even all the way to having like a green room for the artists to kind of prepare and do what they need to do the other side of it to talk about in a community context, I’ll tell you about another application that’s live is the integration that we’ve built out with Shopify. And so in the context of, of that Shopify app, that basically less merchants say anybody who owns holds a given NFT can either get a discount on or exclusively purchase this item. So if you start to think about a community and people want to express themselves by wearing the brand associated with their community, which is really exciting, and they’re excited about the capacity to kind of gait that and create some level of cohesion in the community through the gating will be possible in the context of, of merge with the Shopify app specifically. And so there, there’s no apps that this camp touch, basically,
Ivan Kan: That’s fascinating. I mean, regularly I get calls from e-commerce brands that want to build, you know, NFT to give their community, their, their users more access. So what, what I know you mentioned, you know, access to discounts, access to exclusive drops, I’m digging like Adidas with their NFT, but what, like, what’s the possibilities here? Not just those two examples.
David Sneider: I mean, so like, I think we can talk, talk about some of the other categories. So retail is definitely really interesting. I think it’s been fascinating to see retailers doing basically like art based auctions for collectibles, for their brands, which is cool. But I think that there’s kind of like, and this applies to both retailers, as well as to creators, basically being able to think about the NFT, something that is more like a giveaway, the, the group at polo app, which is the proof of attendance protocol. Basically you’ve attended an event and they’ve made it really easy to issue an NFT for, for free for the host of those events. I imagine that’s the kind of the way that we’ll see retail and create experiences going where the NFT isn’t necessarily this like singular thing of combine this collectible associated with this creator or this brand, but really more as an integrated experience, that includes digital elements, virtual reality, meta-verse elements and real-world elements, whether it’s at a store or a concert. And the NFT in, in this lens basically becomes a bag to say, I was here at this certain time, or I perform this action at a certain time and have that. I I’ve been rewarded some benefits again, whether it’s in the real world or digital context.
Ivan Kan: Fascinating. No, I, I, I like that transition to even like real-world because a lot of projects are seeing that as well, like let’s say festivals or events, and they want to transition that from, you know, just an online event to an in-person. I do want to touch upon, because this is a really commonly asked question and a lot of publications are covering, but the concept of web 3.0, so web three, I know it’s a broad topic, but I would like to hear from you, like, how does, how does lit protocol fit into this whole web three revolution?
David Sneider: Yeah, I think the first thing we can do is define that a little bit. So to my mind, like the, the, there’s a lot of layers to get into this, we could talk about this in the context of decentralization. We could talk about this in the context of, of user on networks. We could talk about this in the context of cryptocurrency, but as we kind of mentioned before, the key word, the output for web three for kind of the most amount of people is the notion of ownership. And so currently in web three ownership essentially means owning some digital assets the way that we’ve kind of seen some applications building on the decentralized web tech stack. And we can talk about this a little bit. It, we seem to be trending not just towards web three, being defined as ownership over public digital assets, but also including one’s private and, and self-sovereign data.
And so that’s, that’s, to me, one of the really exciting parts about web three in terms of how lip protocol fits into that stack, certainly on like the public asset and credentialing side of this, everything that we talked around around access to experiences, events, drops, live streams, collaborations, tasks, et cetera. And then on the kind of the data sovereignty and D web stack side basic, I’ll give you an example. There’s a project called orbis.club, and they’ve built a Twitter discord like piece of software, but what makes it different is that it is it’s stack rather than running on AWS or Google cloud consists of three layers. It’s got our weave, which is a decentralized storage provider. Then it’s got ceramic, which basically they would say enables dynamic data streams. I kind of think about it like a database protocol with the centralized identities. And then on top of that, they’ve also got lit protocol, which is what we’re working on, which manages the consent and encrypting and decryption.
So if you think about when you, if you think about Google, when you go and log into an application with Google, that third party app says, Hey, we’re this third-party app. And we would like access to your email address and your calendar and your contacts. And you’re basically saying, Hey, Google, that’s great. You can go ahead and consent. I’m consenting for you to send that information to this third party. But what we’re kind of talking about in the web three self-sovereign data context is that data basically being mine, I’m, I’m, I’m owning it through encryption and you’re owning it through encryption and we’re consenting from our own data, rather from data that, that Google’s custody.
Ivan Kan: I actually want to pause here for a second, because I want to, I want to bring up this point and I, I come across this in a lot of conversations, but when you sign up for an app, they always say, do you want to, do you want to give a permission? And it’s like, if you have Android phone, you have an apple phone. Yes. I gave it permission. And then you look in the five print and they tell you what they’re giving out, but how many people really look at it? And at the point you give it, it’s given away. So this is like, this is the opportunity to almost take back control. Instead of you giving permission to apple, you give, instead of giving apple permission to give it away, you, you give it away. So fundamentally this is like a core component of web three. And a lot of people ask me what rev three is like, this is probably the most basic component of web three. And let protocol is, is a core component of that.
David Sneider: Yeah, it’s a, it’s a stack for sure. We’re, hyper-focused on hardening a layer. That is, it is a necessary, but not sufficient layer. It takes kind of the whole, whole ecosystem of tools, which is just a really exciting thing about building in this space with largely people who are, are ideologically aligned around the capacity to kind of use innovation and invention and harness it in a way that is decidedly useful.
Ivan Kan: I love the way you described it, like a stack and a layer because like developers, they’re familiar with like lamp, you know, use the lamp stack or whatever it is, you know, you have different different protocols for different layers, but I can see how lit protocol is just going to be sitting on one of those. And if you do it really well, you know, all the other stacks will include. So I want to bring this back and, you know, we’ve kind of learned a lot about like NFTs, what it can do the middleware component, but I don’t want to talk about the success that you’ve had your team lately. So tell me about like the recent rays and also tell me about like, how did you get, because your, your product is really unique in that it’s like a, almost like a B2B play. You have to accord other protocols, other platforms, how did you build that buzz around your project? So it goes, cover, you know, at a high level, your raise and how did you create that buzz?
David Sneider: I think so. We raised about six months ago, a seed round, and we’re really just looking to raise for people who are kind of aligned with the notion of decentralization and tokenization, and we’re really clear thinkers. And obviously that, that’s how we got in touch. And then in terms of how we’ve gotten the word out, we’ve participated in some hackathons for super active in discord. It’s kind of paying attention and, and, and reaching out where appropriate. There’s so much happening in this space. And, and also at the same time, if you have a good proposal or you have a thoughtful thing to say, people are extremely receptive to conversations. I’ve found whether it’s like through Twitter, DMS, or emails or telegram, whatever it might be. I would say that there’s, there’s absolutely kind of like a mood of collaboration and coordination. And ultimately, like people want to have ideas in their mind of the things that they want to build. And if we can come in and provide a, you know, a very useful layer in the stack for that and doing it in a, in a decentralized way, it makes the conversation around collaboration and getting to the specifics easier.
Ivan Kan: Yeah. That cross chain is still important, especially when there’s so many pieces of the ecosystem combining, but Carolyn, thank you so much for your time. It was very insightful. And thank you for sharing.
David Sneider: Yeah. I mean, I feel like we’re just getting started, frankly. Like things are, things are picking up certainly, but there’s, there’s, there’s more ahead in terms of, in terms of kind of getting the information out there and obviously like there’s, you know, a lot of things say the word decentralized on that, but like the real communication is talking to somebody who needs to use access control and basically kind of running through, you know, what does it mean to what does it mean to grant access to a centralized resource? What does it mean to grant access to a decentralized resource? What does it mean to grant access to like an existing web to app and then what are the various mechanisms for that? And then, and then how much trust do you have to put in any given party? Cause it is a, it is a quite important part. And so, yeah, I think we’ve been fortunate there with those kinds of decentralized networks take on access control to, eh, that we’ve designed it from the onset for it to exist in this kind of like adversarial environment in the same way that Bitcoin was designed in the same way that you see a lot of token networks designed. And, and to that end, that helps facilitate conversations.
Ivan Kan: Oh, I love, I love your story. And we’ve been following you for quite some time and that’s why we, you know, we invest it because we believe in there’s this layer, like you’re solving the problem of this layer. I also know that you’re going to be you and your team are going to be at ease Denver coming up set. Right.
David Sneider: We will be, yeah. We’re going to have a bunch of exciting bounties and doing workshop and talking to panel. We after they’re definitely come find us.
Ivan Kan: Yeah. So there’s, as far as the protocol, we’re on Twitter and discord and have a website, other websites, lip protocol.com, Twitter’s outlet protocol, all the links are there. I’m at David L. Snyder on Twitter and, and always happy to jam there. And you know, everything that we’re doing, all, all of these tools, all these tools and connectors, that’s all open source. There’s a bunch of developer documentation to get into. And, and for people who want to like discuss project ideas and, and, and think about specifications, like we’re super contactable. If there’s a contact form right on the website
David Sneider: Yeah. So there’s, as far as the protocol, we’re on Twitter and discord and have a website, other websites, lip protocol.com, Twitter’s outlet protocol, all the links are there. I’m at David L. Snyder on Twitter and, and always happy to jam there. And you know, everything that we’re doing, all, all of these tools, all these tools and connectors, that’s all open source. There’s a bunch of developer documentation to get into. And, and for people who want to like discuss project ideas and, and, and think about specifications, like we’re super contactable. If there’s a contact form right on the website
Ivan Kan: Taking David, it was so good to have you. We hope to have you back soon