May 3


Anduro Keynote at Bitcoin Layer Two Conference

Jullian Duran speaks on the vision behind Anduro

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Video transcript

00:00:00:00 - 00:00:51:11

Our next distinguished speaker is Jullian Duran from Marathon Digital Holdings. Jullian is the product lead of Marathon Holidays and he's flying from New York. Just arrived here.

00:00:51:12 - 00:01:17:23

I'm here to talk to you guys a little bit about what Anduro is all about.

00:01:18:00 - 00:01:40:17

So I'm the product lead at Marathon Digital for all of our layer two and sidechain efforts. Contributor of Anduro and yeah, pretty exciting public company launching a layer two network. Here I am to explain exactly what that means. So Anduro, what I'm going to focus on in this talk is why Anduro is not the layer two, but rather the concept behind the layer two vision.

00:01:40:17 - 00:02:01:18

We have. And in particular Anduro is this vision for a multi sidechain ecosystem secured by the best in top hashrate that secures Bitcoin. So just to kind of contextualize this, I think one way to approach layer two is in Sidechains is to say we have the best stack for builders to build on. Marathon isn't necessarily making that claim.

00:02:01:20 - 00:02:22:06

The claim that we're making is the top layey networks are going to be those that benefit from similar levels of decentralization and similar levels of security that you see on Bitcoin. And who better to start such a network than one of the largest Bitcoin miners, and rather one that's also publicly traded. And so why Multi-Chain. Just explaining that for a little bit.

00:02:22:06 - 00:02:38:18

We have a lot of obviously you guys know there's a ton of developer standards, a number of different ways that developers can go. But each new standard has a learning curve. And so when we first started thinking about a layer two network, we said, all right, we're a public miner and we might know how to secure bitcoin.

00:02:38:21 - 00:02:57:14

But when it comes to layer two, we're not experts on exactly what type of programing standard we should be offering to developers. And there are so many great ones. I mean you have go you have a Bitcoin script, the OG. you know, there's obviously other new ones that are coming out every single day. We want to be agnostic to these different standards.

00:02:57:15 - 00:03:19:12

We think all of them are valuable. But if you try to just go with one, obviously you'll have developers are a little bit confused. Now a lot of people say, oh well, new development standard beyond Bitcoin. You should just do EVM. Well, actually, you know, only about 45% of developers, Web3 contributors to open source protocols. 45% of them don't contribute to EVM protocols.

00:03:19:13 - 00:03:41:21

So actually quite a significant share of developers are not necessarily just building on Ethereum. So we knew that just building an EVM chain was not going to be enough. And so how we thought about this Multichain question was, number one, we wanted to tailor obviously our message to different types of developer community. You have your EVM ones, you have your non EVM ones.

00:03:42:02 - 00:04:06:22

And of course these are very very heterogeneous. We also wanted to empower builders. I mean we're a publicly traded company and we're going to invest a lot into this effort. But and have already. But of course the task of building a layer two is quite an expensive one. And so as much as possible, we want to recruit the next stage of developers, be they in Hong Kong, be they otherwise to come and actually build on the stack and maybe even create other development standards that we don't yet know.

00:04:07:00 - 00:04:28:22

And then the last bit is we're ready to invest big, because we know that what we're doing here really isn't building a technology, it's building an ecosystem. And I think for a lot of the layer two audiences out there, you know, that the task of building a layer to it really isn't just one technical standard. You're really trying to you're basically creating a city online, and you have to recruit people who want to live in that city.

00:04:29:00 - 00:04:52:07

And so our strategy for doing so, our approach to layer two, is very different, I think, from what's currently out there. And number one, it's hinged on this multi side chain approach where one of the side chains is kind of like a playground for Bitcoin Core devs. that's Coordinate. Another side chain is an EVM compatible chain that we're tailoring toward institutions, RWA adoption, these sort of themes.

00:04:52:09 - 00:05:06:05

And of course there are more side chains to come. There are some developments. Maybe there are other layer twos that want to come build on what we're doing. All of this is possible. The second big component of this strategy is there's a lot of strong backing. So a lot of people ask me, is there a token coming out of this?

00:05:06:10 - 00:05:24:08

No, there is no token coming out of this. The SEC won't let us launch a token, but it's also in part methodical. What we're trying to create is a layer two network where Bitcoin is that transaction fee token. Bitcoin is the gas fee token. And that reduces a lot of developer learning groups, also produces a lot of user learning curves.

00:05:24:08 - 00:05:40:10

If you're going to pitch an institution to adopt some sort of DeFi solution, and you're telling them to pay you know, gas fees and another token, it's difficult. And why do I know that? Because we get pitched to do that all the time. And it's very difficult for us to hold tokens that are not Bitcoin assets that are not Bitcoin.

00:05:40:12 - 00:05:54:20

Second big thing is it's supported by one of the largest miners. What did I say before? One of the biggest tasks of a layer two is how is it secure. Well insofar as we're backed by that, one of the largest hash rates. And on top of that, we have a lot of inbound from other miners to come and support.

00:05:55:00 - 00:06:16:10

The goal here is to make this layer two network. It's not Bitcoin, but it is almost as decentralized and secure as Bitcoin. That's the goal. At least that's the vision. And the last bit is of course the number one KPI we have is organic adoption. So you're not going to see this layer to make a bunch of headlines in terms of oh, well, you know, we have this massive TVL commitment or that that's not the focus here for chains that are doing that.

00:06:16:10 - 00:06:34:05

Awesome. I applaud you, but in our case, since we don't have a token, that cannot be the central value prop ofhat we're offering, we're offering transaction velocity. We want to focus on that organic utility. That's the only way we make money out of this. Marathon doesn't make money off a token we make money off of transaction fees. The same incentives behind bitcoin actually.

00:06:34:06 - 00:07:02:07

And so now I'm going to talk to you guys and walk you through what are these different sidechains that we're building and Coordinate, by the way, is the one that has the least branding behind it. So apologies for the black and white, but really that's actually indicative of what we're trying to do with it. So just to give you a little bit of context where we started this whole layer two effort, we basically had a team of Bitcoin Core devs, contributors, and a bunch of guys who were really excited to build stuff on Bitcoin but couldn't right be that because of, you know, a number of different challenges and a number of different restrictions.

00:07:02:09 - 00:07:18:12

So one of the first design principles we had with this entire effort was how do we empower these guys who know Bitcoin extremely well to build on a layer two network? which is not actually something that a lot of people do, because a lot of people just kind of rushing to a new development standard, or maybe they try to poach from EVM.

00:07:18:12 - 00:07:44:21

We thought there are millions and millions, of Bitcoin experts that want to build on something like Bitcoin, but can't. And so that's where Coordinate comes into play. It's a UTXO stack, it looks and feels almost exactly like Bitcoin. It's actually Bitcoin backwards compatible. And I want to focus your guys's attention on the use cases. One of the biggest use cases is porting over a lot of that main chain activity onto a side chain with minimal code rewriting, right?

00:07:44:21 - 00:08:03:10

So let's say you have a P2P lending market on, you know, maintain via ordinals. You can port that over to coordinate benefit from lower transaction fees, benefit from lower latency. Now the key here that I'm trying to cut across is the goal isn't to reinvent some stack. The goal is just to make the ordinals and the lightning experience smoother, right?

00:08:03:10 - 00:08:24:15

Solve some important pain points and make it so that people who know Bitcoin very well don't have to learn a new development standard to scale their applications. The ecosystem, again focusing on the core devs, focusing on Bitcoin experts. The goal here isn't to be prescriptive about where this is going or what the use cases are. It's just to release cool technology and kind of see what the community does.

00:08:24:17 - 00:08:44:04

And actually, that's exactly how ordinals got started, right? There is no organization behind ordinals. That's, you know, telling people exactly what to do and funding exact efforts. It was a community led initiative, and that's what we want to do with Coordinate. Now, ALYS personally, I think, really exciting for a different reason. Whereas coordinate is technology driven solving for future problems.

00:08:44:08 - 00:09:03:12

ALYS is solving from the problems of today, and it's specifically the problems of institutions. And so why would a publicly traded miner be trying to solve institutional problems? Well, it turns out that mining, we actually developed quite a Rolodex of different institutions that want to adopt blockchain but don't know how to. So we already have the contact with a lot of these institutions.

00:09:03:12 - 00:09:25:14

A lot of these pilots are incoming. And the focus of ALYS was, how can we make a stack that is easiest to plug into institutional infrastructure, right. Because when you're building for institutions, it's not just a question of having EVM. You have to have infrastructure partners, you need to have oracles, you need to have custodians, etc., etc.. And when we started talking with these different guys, if you had an even non EVM stack, they charged millions and millions.

00:09:25:19 - 00:09:41:01

You have any EVM stack they charge of the six figures, which is an amount that is still high. But you know we're comfortable going through with that right. So the goal with ALYS is if Ethereum incompatible smart contract capabilities, the exact ERC standards you have in Ethereum you can build a Bitcoin. The second bid is a Bitcoin-pegged native asset.

00:09:41:01 - 00:09:59:17

We still want to maintain no token no no fundraise. None of that. It's still Bitcoin in that regard. And then lastly hybrid consensus. Obviously if you build directly on Bitcoin and you just have vanilla merge mining, you run into, you know high latency issues. And so we wanted to solve for that, MEV, and the number of other things. The use cases here I think are really exciting.

00:09:59:18 - 00:10:20:21

And you're going to hear a lot of more news actually this week about some of the interesting, use cases that we've developed, pilots that we're we're furthering. The top that I have my mind is RWAs. And I think this narrative is an interesting one. It's something I talked a little bit about in ETH Denver, but the focus here is you have these real world assets that everybody wants to move on chain, and everyone's perplexed as to why don't these real world assets.

00:10:20:21 - 00:10:40:06

Why don't people just tokenize them over the blockchain? You know, you benefit from better overhead. You have a higher investment base. You lower the frictions to to getting in on some, you know, investable assets. But the biggest problem with a lot of institutions adopting blockchain solutions often isn't the technology. It's the pitch, it's the approach and its underlying team.

00:10:40:08 - 00:11:06:10

And so one of the biggest focuses we have with ALYS is let's leverage the fact that we're backed by one of the, you know, via Nasdaq listed company. Let's leverage the fact that we have that Rolodex and let's move these real world assets onto a blockchain that is fitting of their needs. The both takes into account the infrastructure that they're already plugged into, but on top of that allows them to, you know, do something more and, you know, benefit from that credibility, that security, etc., etc. of Bitcoin.

00:11:06:12 - 00:11:22:01

And we've had a lot of great traction on that front. But there are three other use cases that I've been following through and, you know, funding different teams to try to build more news on that shortly. But stablecoins obviously, you know, having a natively issued top stablecoin on a Bitcoin chain is something that some chains have done. Most have not.

00:11:22:03 - 00:11:39:03

We think with our brand, with our, with our backing, we are going to be able to do that. So having said that shortly, DEPIN I think is something that funny enough, I hear a lot when I'm in Asia, but in the US you just don't hear about it as much. I mean, people I have still within my colleagues themselves, I say we gotta fund some different projects and they're like Jullian what's DEPIN?

00:11:39:03 - 00:11:57:23

Well, I think that's another important use case for Bitcoin because you're talking about setting up a totally new economy. It's economies that need to last in perpetuity. Setting up this very priceless like physical infrastructure. And most of that is getting built on things like Solana which no dig to Solana. I mean, it's a great, you know, the virtual machine is compelling, but the thing goes down all the time.

00:11:57:23 - 00:12:13:06

How do you expect to have an ecosystem tied to the real world that isn't live, that doesn't have that resilience of Bitcoin? And so I think this is an important narrative. Loyalty, I think, is another one. A lot of people have tried Bitcoin loyalty. A lot of these ventures where maybe like 5 or 6 years ago where the infrastructure wasn't quite as great.

00:12:13:08 - 00:12:31:12

I think that's something we can do now. And if you see a lot of new layer ones that come out, NEAR being one example, most of these guys drive a lot of early organic utility from loyalty programs. Now, loyalty programs could be retail. I think they can also be institutional. You know, crypto can be a marketing ploy. Anyway, more more news on these use cases later.

00:12:31:12 - 00:12:49:00

But with ALYS, the whole focus is we want to create an ecosystem that is thesis driven. We want to invest with a purpose, and we want to invest toward these institutional use cases. Really focus on what you know, what sort of problems Bitcoin can solve today beyond just hodling and beyond just, you know, holding it in an ETF.

00:12:49:00 - 00:13:04:10

Right? That's that's the goal. The last thing I'll end with is just our vision for meta bitcoin broadly speaking, and where I think that we can collaborate with other layer teams because that's the goal right. Not fractionalized liquidity. And in the case of Marathon we're very we know what we're good at. We know what we're not good at.

00:13:04:12 - 00:13:27:04

All right? We know we're good at network security. We're new to this game of building into layer two. And I think the big thing that we want to try to focus on is how can we engage more Bitcoin builders and more layer two experts in Bitcoin to come together and benefit from this network security. Now to be very clear, remember the task of building a layer two is not just that of technology, that of network security.

00:13:27:04 - 00:13:43:13

It's that of credibility instead of use cases. And one thing that I'm very sure of that we're doing, and we announced a partnership with actually another Bitcoin Layer two team recently, BOB, about this. One of the best things we can bring are these use cases, this credibility, this backing. It's just a matter of finding the technology experts that want to work with us on that journey.

00:13:43:19 - 00:14:01:01

So you're going to be hearing a lot more about Anduro a lot more about Alys a lot more about Coordinate very soon. But I just want to encourage you guys to know that the focus for Anduro is Multi-Chain. These are two chains. There could be three, there could be four, there could be five. So if you have good ideas about other chains to build or you have use cases, you want to build a Bitcoin, please feel free to reach out.

00:14:01:04 - 00:14:11:20

We'd love to chat more. And who knows, maybe we work together on it. So thanks everybody!

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