#108 NEAR Protocol – Building a High Speed, Climate Neutral, Low Fee Blockchain with Illia Polosukhin, Co-Founder

In Episode #108, we explore building NEAR, a layer-one blockchain that’s incredibly fast, has very low transaction fees, and is climate neutral. We’re joined by Illia Polosukhin, NEAR’s Co-Founder, who discusses why proof of stake beats proof of work, how NEAR approached scaling, and the process of moving from a centralized team to a decentralized community.
Last updated
August 13, 2023
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Illia Polosukhin raised more than $10M to help fund aid in war-torn Ukraine through his Unchain Fund.
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#108 NEAR Protocol – Building a High Speed, Climate Neutral, Low Fee Blockchain with Illia Polosukhin, Co-Founder


About NEAR Protocol

“For me, web3 is not about decentralization. I think decentralization is just a tool. What it is about is low switching costs.” – Illia Polosukhin

Illia Polosukhin is Co-Founder of NEAR Protocol. NEAR is a layer-one blockchain that’s incredibly fast, has very low transaction fees, and is climate neutral—in part because of its Proof of Stake model. It’s traded on crypto exchanges under the ticker symbol NEAR and has a market cap of just under $5B today. From 2020 through 2021, the developers working in NEAR’s ecosystem—building applications on top of their blockchain—quadrupled, making NEAR the second-fastest growing chain behind Solana. 

This episode is a fascinating deep dive into NEAR, the NEAR ecosystem, the origin story, and what it takes to build a leading blockchain capable of competing with Ethereum and Solana. In this episode, we discuss:

  • Why Proof of Stake beats Proof of Work, including why Illia is always looking to build technology that’s more efficient and co do more with less.
  • How NEAR approached scaling and why they went through 3 separate designs (all of which failed) before arriving at the sharding method they use today.
  • How NEAR is building a global, decentralized community that includes regional hubs located around the world from Europe to Africa, all of which include accelerators, developer grants, and community education and events.
  • What it’s like to found a project and take it from a centralized team of a handful of people to a decentralized community of hundreds of thousands of people.
  • How Illia raised more than $10M to help fund aid in war-torn Ukraine through his Unchain Fund.

Illia is an incredibly impressive founder, but more importantly, he’s an incredibly thoughtful engineer, leader, and community builder who has built something incredible slowly and methodically, one step at a time.


This episode is our definitive guide to building a high speed, climate neutral, low fee blockchain. In it we cover:

  • 00:00:00 – Introduction
  • 00:02:35 – How NEAR Protocol is imagining your world
  • 00:04:46 – Why decentralization is just a tool
  • 00:09:14 – Dethroning monopolies and leveling the playing field
  • 00:14:02 – NEAR Protocol’s origin with scaling crowdsourcing
  • 00:20:18 – Lack of intellectual honesty in crypto
  • 00:24:19 – NEAR’s approach to sharding
  • 00:31:03 – The importance of bringing the community into decision making
  • 00:37:47 – How the co-founder’s role can evolve from centralized to decentralized
  • 00:43:17 – Illia’s Web3 mindmap and staying decentralized while preserving privacy
  • 00:46:36 – NEAR’s approach to sustainability in blockchain
  • 00:49:46 – Founders: Build credibility and ship fast
  • 00:54:19 – Handling fear and anxiety when building in crypto: Keep calm and build on
  • 00:58:52 – The Unchained Fund and helping Ukraine

Listen to the episode on Apple Podcasts, Spotify, Overcast, Google Podcasts, Amazon Music, Castbox, Pocket Casts, Player FM, Podcast Addict, iHeartRadio, or on your favorite podcast platform. You can watch the interview on YouTube here.

Our Favorite Quotes

  • "For me, the natural state is optimization... always trying to either do more with same energy or do same with less energy."
  • "We see this really as this explosion of experimentation on top because everybody can combine with everything. And so we want everyone to be able to do this. We want every single developer to be able to write smart code."
  • "What NEAR can be is this platform that allows everyone to build sustainable applications. Not just applications that are self-sustainable, but also applications that help other industries to be sustainable."

5 Ways to Dive Deeper

Want to dive deeper? Here the best content we've curated on this subject:

  • What is "proof of work" or "proof of stake"?: Illia describes why proof of stake is superior to proof of work. This article from Coinbase helps define the two. (7 Min)
  • NEAR's Developer Docs: Check out this resource from NEAR to learn more about how NEAR is built and how to build applications with it. (2 Min)
  • NEAR's Platform Page: This resource provides an easy way to learn what NEAR is, why you should build on it, and how to get started. (2 Min)
  • NEAR Foundation Grants: Head here to apply for grants and funding to build on NEAR. (5 Min)
  • Unchain Fund: Illia’s fund benefitting Ukraine is a great example of how and why crypto can be a powerful force for good in terms of raising funds for important causes from people all around the world. (5 Min)

Selected Links

We covered a lot of ground in this interview. Here are links to the stories, articles, and ideas discussed:


Daniel Scrivner (00:00:06):

Hello and welcome to another episode of our incredible Founder series, where we dig into the ideas, frameworks and strategies of the world's best startup founders. I'm Daniel Scrivner and on the show today, I'm thrilled to be joined by Illia Polosukhin, co-founder of NEAR Protocol. NEAR is a layer one blockchain that's incredibly fast, has very low transaction fees and is climate neutral, in part because of its proof of stake model. It's traded on crypto exchanges under the ticker symbol NEAR, and has a market cap of just under $5 billion today. From 2020 through 2021, the developers working in NEAR's ecosystem, that's everyone building applications on top of their blockchain, quadrupled, making NEAR the second fastest growing chain behind only Solana.

Daniel Scrivner (00:00:50):

This episode is a fascinating deep dive into NEAR and the NEAR ecosystem, the origin story and what it takes to build a leading blockchain capable of competing with Ethereum and Solana. In this episode, Illia and I go deep on why proof of stake beats proof of work, including why Illia is always looking to build technology that's more efficient and can do more with less. How NEAR approach scaling and why they went through three separate designs, all of which failed before arriving at the sharding method they use today.

Daniel Scrivner (00:01:19):

How NEAR is building a global decentralized community that includes regional hubs located around the world, from Europe to Africa, all of which include accelerators, developer grants, community education and events. What it's like to found a project and take it from a centralized team of a handful of people to a decentralized community of hundreds of thousands of people located around the world. And how Illia raised more than $10 million to help fund aid in war torn Ukraine through his Unchained fund. As you'll hear, Illia is an incredibly impressive founder, but more importantly, he's an incredibly thoughtful engineer, leader and community builder, that's built something incredible slowly and methodically, one step at a time.

Daniel Scrivner (00:02:02):

You can find the show notes and transcript for this episode at outlieracademy.com/108, that's 108. And you can learn more about NEAR at NEAR.org and explore their developer docs at docs.NEAR.org. With that, here's my conversation with NEAR's co-founder, Illia Polosukhin. Illia, thank you so much for joining me on Outlier Academy. I'm thrilled to have you on for a really deep dive into what you're building at NEAR with NEAR Protocol. Thank you so much for the time.

Illia Polosukhin (00:02:32):

Thanks, Daniel. Yeah, thanks for inviting me.

Daniel Scrivner (00:02:35):

I'd love to start, because I want to frame up what NEAR is for everyone listening, who maybe isn't familiar with it, just by talking about, at a really high level, what you're building. And one of the things I thought was interesting there is the tagline that you guys use sometimes is, "Re-imagining your world." What does that mean and what are some of the really high level goals that you had with NEAR from day one?

Illia Polosukhin (00:03:01):

The highest level vision is to build a world where people control their assets, data and power of governance. And so what this really means is changing from the current state where there is a third party, either government or corporation that is defining what you own. Let's say if you own some piece of land, there's a land aid organization that actually has a registry that says that you own it, or if it's Facebook and all your friends and everything, presumably it's your friends, but actually, Facebook has all this data and you have no good way to export it and use it in somewhere else. And beyond that, power of governance, we kind of as a society, been moving in this direction of democracy, but even now there's very much not clear, transparent ways to self-organized, there's very hard ways to actually make change in the society.

Illia Polosukhin (00:04:00):

And I mean, we can talk about some of the specific cases that's happening in the world right now, but putting it all together, what these technologies in web three are allowing us to do is reimagine this, is to actually change these ownership control governance parts, and actually give them back to the person who has, who initiated, who created, who is transacting. And that's really what we're after, how do achieve that? And so to achieve that, we need something that actually works for everyone, that is so simple to use, so scalable and so secure as well, if we're talking about ownership and assets of people, that it's a no brainer to switch. And so that's what we've been trying to build in the new ecosystem as a whole.

Daniel Scrivner (00:04:46):

Yeah. And it's a really big vision. Clearly part of that to me, feels like a pushback on the way things are today in our centralized society. And you hinted at it there with, even if you happen to be lucky enough to be in a democratic society, it doesn't necessarily mean that there's transparency and there could still be a lot of not so awesome things that are maybe happening. Talk a little bit about maybe what this is a pushback on or what you're trying, where the motivation to build NEAR really comes from and what that's grounded in.

Illia Polosukhin (00:05:15):

I would say there are two sides. There's a pragmatic side, which, some of our background is in AI, my background is AI and we're actually trying to build something else first with my co-founder and we built a crowdsourcing system which needed to pay people. We wanted to pay people and they were around the world, like actually very global community we had there. And we just had trouble sending money from our US bank account to China, to Russia, to Ukraine, to Cuba, where we had some people working from. And so a lot of it spanned from that, is there's always these bottlenecks and limitations that are actually hurting normal people more than actually, I mean, sometimes even the people that are supposed to, like who they are supposed to hurt, the people who are financing something or money laundering. On the other side, there's a systematic problem which is kind of, if you're a for profit big company, you are trying to become monopoly, this is just the inevitable state of what you're trying to do.

Illia Polosukhin (00:06:21):

And you see that, I worked at Google and I saw that happening. I mean, I was somewhat late already, but you can see Google's progression from just don't be evil, really trying to be on the right side, being very conscious about decisions they're making. And then over time, starting to make more and more for profit decisions because they see Facebook is doing something, like, "Oh, we should do that too, right? Oh, they're tracking user in this way. Well, we should do it, too." And so they're actually almost giving up on some of the principles they themselves established originally. There was a huge desegregation between different departments, so to make sure the data is not getting leaked between the stuff like this.

Illia Polosukhin (00:07:02):

And so all that was going away because there's this motivation of generating more profit, of generating more revenue. And so for me, it's not even about specific people who are running these companies, I think it's a systematic corporation approach that it requires. And so if we don't want to live in that world where it's few companies are monopolies, because compared to before tech where there's multiple companies that could coexist and be reasonably large, like railways and others are still monopolies, in tech you can be monopoly globally, there's no way to take over that. And so what, again, web 3.0 is offering us is changing the model, giving it back to the user, giving back the ownership to the user as well, and also motivating users to come in the first place through this.

Illia Polosukhin (00:07:52):

And so we have, for the first time, an ability both to break these monopolies and also create something that is actually non-monopolizable, in a way. And this is why for me, web 3.0 is not about decentralization. I think decentralization is just a tool. What it is about is low switching costs. If we are actually achieving low switching costs at every single level, I as a user, as a company, as a project, as anything can switch reasonably with low switching costs. We are at perfect competition in a way then, because everybody needs to compete all the time to be able to actually be the best place where people are running. And so, you can see this when we talk about validators on a protocol level, the switching cost is low, new validators can come in, old can come out. Whereas wallets with RPCs, with all of the stuff you can always enter your seat phrase in another wallet, switch RPC endpoint.

Illia Polosukhin (00:08:46):

It doesn't matter that this specific wallet is centralized, it's the fact that you can switch to something else and it's really cheap for you. And so this wallet needs to be really good so you don't switch to else. That's really how I see this vision coming and going against some existing thing that is trying to really make switching costs as expansive as possible or ideally possible, because they just buy everybody out who you would switch to. And so, you don't have alternative in the first place.

Daniel Scrivner (00:09:14):

I think that's fascinating. I've never heard anyone talk about what web 3.0 is really about is lowering the barrier for switching costs, but it makes so much sense. And I love the comparison there between, in the current model, if you're running a company you have what's often called a profit motive, which obviously, you led to. Especially with companies now competing on a global scale, yeah, clearly, the goal is to monopolize your entire industry and to do that, not just in one market, but to do that around the world. And yeah, companies can try to do that in a positive way, but I think to your point, it comes with a lot of negative consequences. And so I love that idea, it's really compelling, to almost build a new system, a new structure, that one, makes monopolies impossible, but also, I think creates a level playing field for competition, which honestly for entrepreneurs, I think is incredibly positive. Talk about what that unlocks for builders and why that is such an important thing in web 3.0.

Illia Polosukhin (00:10:13):

I think what's happened in web 3.0, I'll just show you the examples because I think it's more powerful. The examples are Uniswap, which is a decentralized exchange software, which was built by one guy and then a small team of others, was valued or is valued as close to Coinbase price, to a centralized, huge, thousands of people company. And the reason is it's not because of the exchange itself, but because both of the mass the adoption, but also a lot of other applications are using it. And they can use Uniswap the way they cannot use Coinbase, they cannot use NASDAQ. They cannot build on top of it really easily, extend it in ways that the original developers were not thinking is possible.

Illia Polosukhin (00:11:01):

But think of about it, it's a centralized exchange which run pretty much by initially a team, in my head, out of a garage. I mean, they were probably in some apartment in New York, which runs something that's worth billions of dollars in a financial system. Can you imagine ever, anybody being able to rely on a financial system that's run out of a garage by a few folks? No, but in crypto you can, because it's deterministic, it runs, it's open source. Even if this team goes away in any way, this system continues working. And that's the benefits that, let's say providers guarantees, that it'll be predictable in specific ways, it'll predictably work, it'll have specific ways to upgrade and change. It has community and ownership distributed to the ecosystem.

Illia Polosukhin (00:11:50):

And so both barrier to entry is very low, it can be built by one or two people really easily and you can have this really big impact on this. And at the same time somebody can fork it and build something else, it's not a zero sum. Social Swap has shown that they can, "Hey, we can just fork this existing thing and expand from that." And so this is where the switching costs come in, is like yeah, you built something, it's amazing. But then low switching costs means somebody will be competing with you always. And so for builders it means you can start really easily. You can build on top of all these existing pieces and rely that they'll be there.

Illia Polosukhin (00:12:28):

When I was doing web 2.0 startup and we were wanting to use some external service, we need to evaluate how likely this service will go out of business in next, whatever, six months, 12 months. Here, we don't need to, it's got to be running, it has all the things there. And so you have this foundation that you can build on, and then you have this constant competition as you build out. As you actually succeed, then you have a constant competition you need to work against, but the barrier of entry is very low.

Daniel Scrivner (00:13:01):

Yeah. The barriers to entry are low, so it democratizes people's ability to start something and build something for the market and be able to see what that is. But it's also kind of Darwinian, I think in a really positive sense, of over time, the best solutions are always going to be the ones that are winning. And I love that one way that I've thought of web 2.0 versus web 3.0, and it goes to the heart of that example you just shared is web 2.0, as humans I think a lot of times we're trying to rely on signaling from the companies to interpret who's good, who's bad, who's working well, how good is their technology? And with web 3.0, it's like there's certainly that, there's still people that are talking about a project or advocating for it. But at the end of the day, you can also just go and look at the code base, you can go and look at the actual nodes that are running. You can just look through to the core technology and build confidence in that, which seems very, very, very different than a web 2.0 world.

Illia Polosukhin (00:13:50):

And you can also see all the usage as well, you can actually see every single... Versus people telling you, "Hey, we're making this much or we have this much users." You can, "Hey, you actually have this much users or not."

Daniel Scrivner (00:14:02):

Yeah. No, I mean, a classic way that might show up is companies quoting logos of customers and in web 3.0, it's like, just look at the data because you can see it right there. I'd love to talk for a little bit about your journey to build NEAR and a little bit of your crypto origin story. Can you walk us back in time a little bit and talk about, one, how you first became aware of crypto and got interested into it, and then the journey from that to eventually building NEAR? And maybe those are really closely coupled, maybe those are further apart, but just walk us through your origin story and the origin story of NEAR.

Illia Polosukhin (00:14:35):

Yeah. I mean, those are pretty coupled. I mentioned my background in AI, I was in Google research, working across a lot of natural language problems. And left to start NEAR AI, which was teaching machines to code. We were trying to actually automate some of the parts of software engineering. And to do that, we needed a lot of data from actual developers. And so we built this network of students, software engineering students around the world, where they would do a lot of tasks for us to generate this data. And so as we were realizing, let's just say that at that point, both technology and the scale at which we were operating was not enough to solve that problem, one of my co-authors just started a new startup working on a very similar dimension. So it's getting there, we were just a little bit too early, four years early.

Illia Polosukhin (00:15:34):

And so we were thinking, "Hey, we built this crowdsourcing system." It actually worked and was high quality. We had really good community of developers, system of students working on it. And so we started looking at how can we scale that up? And so that was the problem, we were already, it was super manual process to send money because you need to do PayPal here, Pioneer there, wire transfer. Like on Cuba, you need to convince them for them to have a Spanish passport, to have a bank account in Spain or something. It was a super complicated process, and so we started looking at crypto. And obviously, I've heard of crypto before. For me, proof of work always been kind of, I call it not natural.

Illia Polosukhin (00:16:22):

So for me, natural state is optimization, is always trying to either do more with same energy or do same with less energy. And Bitcoin is do same with more energy, the more successful you are. And so that always led me to this mental block. And so when I learned about proof of steak, which was a bit earlier and like, "Oh yeah, that actually makes sense." And so when we started diving in, we really went in to study all the style that's going on, like Ethereum and Bitcoin, obviously. We're not even close even back then to be able to... This is May, 2018-

Illia Polosukhin (00:17:02):

... able to... This was like May 2018 to be able to power something that has micro transactions, like sending dollar to people. And they're really hard to use. If you're trying to actually install Bitcoin wallet, it's still pretty hard. And back then, Ethereum also was super complicated.

Daniel Scrivner (00:17:20):

Much worse than today.

Illia Polosukhin (00:17:21):

Well, yeah, I mean, it improved a lot to be clear. So we then looked at a lot of other blockchains and both the ones that were launching or the ones that were in development. And we did not find anything that actually like truly addressed this set of requirements that we had. Right? Which is like something that's simple to use, simple to develop, as a developer. Something that actually scales. If you have actual million users on it, will we be paying like insane amounts of money? And it's actually secure. I'll go make it secure.

Illia Polosukhin (00:17:55):

And our background, both me and Alex have been in the competitive programming, which is train your brain to always think in the worst case scenario. It is literally you're writing some program that will be tested on the worst case scenarios. And so, just looking through a lot of the designs back then, none of them were actually withstanding that judgment. And so, we actually have done a YouTube series around that, where we interviewed the protocols of founders and lead engineers of the protocols and asking them all those questions that we had, which been a pretty interesting for like a small audience of technical people who really want to know how all this stuff works. And so that's really kind of where we were. We were like, hey, there's nothing that actually satisfies our requirements.

Illia Polosukhin (00:18:43):

Nothing that designed for scale. There's a bunch of stuff that says we're going to run more stuff on one machine. So most of the protocols right now that actually scaling solutions, they are just saying like, "Hey, we're going to be more efficient than one computer." And the computer may be bigger, but that's not really, again, coming from Google, my co-founders from Single Store, which is a sharder database company. We're like, well, the only way to scale to billions of users is sharding. You cannot build big computers. Well, fast enough, at least. And so this is where we end up. We're like, hey, let's build a sharded blockchain that is actually developer friendly, that is designed for normal people. So we hide all the private keys, all the hashes, et cetera, from the user. We give developers way to build in JavaScript and Rust and all of those kind of normal program languages.

Illia Polosukhin (00:19:37):

And we did design it with our rigor of we're going to break it. And if we break it, we need to fix it and we're going to do it, which took us a little bit of time to figure out how to stop breaking our own ideas. That's really how we started. That was August 2018 when we kind of kicked off. We right away brought a bunch of our like ex Google, ex Facebook, ex Single Store people on the team to really start pushing this forward. And so, yeah, been almost four years now in the journey.

Daniel Scrivner (00:20:05):

That's a fascinating story. And I want to go back at the end and talk about building amidst volatility and building in down markets in crypto. And obviously in 2018, you've had a little bit of that.

Illia Polosukhin (00:20:17):

We've had lots of experiences of that.

Daniel Scrivner (00:20:18):

So we'll come back to that at the end, but there's a bunch of interesting threads I want to try to pull off on what you just said. And one of them is when you talk about that, obviously with technology, the natural path is optimization. It just makes sense. When you talk about hiding all the complexity and also allowing people to basically build in whatever native programming language that they know or that they want to work in. That just makes sense. And yet it seems very different than other protocols. A lot of crypto seems almost a little tribal in terms of it's this way, and it can only work this way. Where do you think that comes from and why aren't other projects being as intellectually, I don't know, honest, or is it just that it's much harder and you guys have just chosen the harder path. How do you think about that?

Illia Polosukhin (00:20:59):

I mean, it's combination. I think it is harder to some extent to do a lot of this stuff. Like our account model is too designed for user experience. You need to actually make a more complex system underneath, and then hide it in such a way that people actually can understand it. Making sure that languages work is actually super hard. For example, for Ethereum, there wasn't options. There was actually nothing worked back then. And so, they invent the DVM. The thing to understand is also you're under constant pressure to actually launch. And so you don't always make good decisions because like you need to execute faster, and then changing later is super complicated.

Illia Polosukhin (00:21:46):

And then a lot of people just replicated DVM. And so in our case, we also did that, but we did that as just a smart contract. That's something that's completely outside of the core protocol. So it actually runs and actually showcases how easy it is to develop on here because you can take something else, some other blockchain and just run it as a smart contract. Part of it is also, I think people view some of the use cases, but also decisions on what blockchain is for differently. Like in our case, we came from like, hey, we want to build end user like actual applications. which are able to use by... So somebody did build in a community, a crowdsourcing application called Near Crowd, which has like 2,000, 3,000 daily active users, which are not technical.

Illia Polosukhin (00:22:35):

They are not engineers. They're not blockchain specialists. They're literally people from factories and people who work at service industry in Philippines. And it's very broad non-technical or some kids like under short team. And there's somebody's grandma was using it as well. And that's just not usually the kind of mental model that a lot of folks are designing for. And we were kind of designing for that. And so a lot of it is just like people think, oh, smart code developers should be this elite limited thing. So we will design a new programming language, for example, for them specifically. It's fine if there's only like 500 of them needed. They can learn the program language, which again, we don't agree.

Illia Polosukhin (00:23:23):

We see this really as this explosion of experimentation on top because everybody can combine with everything. And so we want everyone to be able to do this. We want every single developer to be able to write smart code. Maybe they will not. Maybe they will reuse existing code, but then they need to be able to read the existing code. And this goes into, well, we want actually people to be able to read the code because that's what the whole reliance on that is. And so, yeah, how do we make it more available is like a very different decision making than some of the other protocols.

Daniel Scrivner (00:23:55):

Yeah. Yeah. Sounds, yeah, deeply rooted in I think your guys' values, which is very cool. And it seems like you hit on it at the end there talking about what you're really going for is this Cambrian explosion, which of course. That totally makes sense. You're building an ecosystem. You're building a new reality that people can enter and they can build on. And so lowering the bar as much as possible, so anyone can do it just makes a ton of sense.

Daniel Scrivner (00:24:19):

I'd love to talk now about some of the goals you guys had with Near and those three ones, at least that at a very high level I find really appealing is focusing on being climate neutral, high speed, and a low transaction fee layer, one blockchain, and we've hinted on some of those. And so I'd love to talk about those each and maybe where we could start is piggybacking off sharding because you guys have a really unique approach to sharding that obviously allows very high throughput. Maybe get a little bit technical into what's different about the way you guys approach sharding and talk about why you did that and what that unlocks, what that creates for Near.

Illia Polosukhin (00:24:59):

For sure. Yeah. So there is a bunch of folks and still are, who understand that you cannot build a bigger machine to process all the transactions in the world. And so the way to solve that is to run more stuff in parallel. And so there's kind of a spectrum from something like Cosmos where you say, well, you can run your chain and I can run our chain and build completely independent and run stuff in parallel. And we're good. And we just have hundreds of such chains and that's how we scale. And then we have bridges and stuff. And we've seen some of this interesting stuff happening this week or last week about how that interacts, but that's one model.

Illia Polosukhin (00:25:42):

Then there's a model which I will call roll ups. There's a little bit like differences, how this works, but it's this idea of, hey, we have kind of a common security model. So we all align on the security here, which might have helped with some of the situation that happened last week, but each application, or maybe set of applications have their own zone, app chain, roll up, power chain, call it C chain, whatever you want. There's so many names. Somebody on Twitter actually asked to like, "Hey guys, can you unify this?"

Daniel Scrivner (00:26:17):

The short answer is no.

Illia Polosukhin (00:26:19):

And so the idea there is kind of on one side, like hey, we scale, but we can have a common security. So we are able to communicate between these things. And so how common security implemented is very different for different of this roll ups versus power chains. But the user experience is the same is that you need to think as a user, where the hell are your funds? Where is the app? Are they on the same things on different things?

Illia Polosukhin (00:26:47):

Can you move them? How long does it take? Are you going this way or is this like through the security level? Or like directly, because there's some like other application to move it directly. Like there's so much complexity that users need to think about. And at least you don't need to think about security, which you don't need in Cosmos but it's still a lot of complexity on the user. And right now we see that right with like, there's arbitrary, there's optimism. There's like multiple EVM chains in [inaudible 00:27:13] system. And you need to like look up which application... Like which one is where, like oh, is my wallet configured to the right thing, like switched and move, bridge, et cetera. And so sharding kind of as a... I mean, all of this is sharding to be clear, but general sharding concepts from Web2 is just you shard underneath the user, right?

Illia Polosukhin (00:27:35):

You don't expose user to the way you model your database. And so, that's where we've been aiming for. This is to be clear where Eth originally was planning to go. They have abandoned that path. And at the same time, there you have multiple ways to implement this, but at least the way we have... We actually implemented multiple ways. And so this is the way that actually works from a user perspective, from a developer perspective, it's one chain. You don't need to think about sharding. You don't need to think about like how things are happening under the hood. You have blocks produced. You interact with smart contract. You have wallet. You have one account. It's invisible for you. What underneath happens is that we actually shard the blocks. So we don't have multiple blockchains running parallel. We actually shard blocks.

Illia Polosukhin (00:28:26):

And so because of this, we can actually change number of shards dynamically. So this is actually like in our roadmap, probably toward end of this year, beginning of next year is right now, you need a governance to change number of shards, but changes dynamically are based on the demand. Like if there is some more demand, we can actually move some contracts and accounts to different shards and that allows them to have more capacity to process.

Daniel Scrivner (00:28:53):

Seems very elegant.

Illia Polosukhin (00:28:57):

Very complicated to implement.

Daniel Scrivner (00:28:58):

Yeah. Everything elegant is very complicated.

Illia Polosukhin (00:29:01):

Yeah. But it allows, yeah, to have like a very kind of straightforward model for the user. And so the example of this being when we actually changed... So we launched with one shard because... Well, it didn't need more than one shard when you launch. And so we actually re-sharded to four shards through governance in November last year, and there's zero change to the user developer, right? Like literally you did not even notice something happened. It's still running. And the thing is we kind of even don't need to show it in tooling. If you want to see the shards, you actually need to hit with like RAR or PC calls to get block information. Like on explorers, on wallets, etcetera, you don't see the shards at all because it doesn't matter. And the layout will change, which shard are you on will change, all of this will change, but none of it actually matters. So that's kind of how we've structured this and it is a very elegant design, which took us sadly a year to come to.

Illia Polosukhin (00:29:57):

We have the old papers we've published, which have three different designs before we got to this. But yeah, it allowed us to kind of already deliver this like capacity and also continue to expand as usage grows. But also through that journey, we figured out how to have a very fast consensus, which is able to finalize blocks and actually finalize BFT finality in two seconds, with one second blocks by really pipelining all of the communication and really speeding up what Tendermint and Cosmos is doing. And Polkadot, Tendermint and Ghost, they all somewhat in the same space of BFT fanatic consensuses, and they all have this kind of extra reliance on communication and [inaudible 00:30:46] the Near consensus actually is doing everything by [inaudible 00:30:49], meaning the communication is always happening forward. And so by the time you produce next block, you already know that you finalized the last block because you receive those approvals when everything works correctly. And so, that allows to kind of really fast track this.

Daniel Scrivner (00:31:03):

Yeah, that sounds so cool. Hopefully, that was not too technical. I know anytime we talk about sharding it strikes as somewhat technical. I want to talk about one thing before we kind of move on to some of those other points. You mentioned there about governance, and maybe this is a good time to talk about why governance is important. And obviously I'll try to give a little bit of a preamble and please feel free to add to that, or edit that. But you guys are a decentralized project and we'll talk at the end about starting off how all projects generally start off centralized. At some point in time, they decide to become decentralized. That often comes with obviously members of your community being able to vote on governance issues. Talk about like why the sharding was up for a vote and why it's important to allow your community to vote on things like that.

Daniel Scrivner (00:31:52):

And I know at some point you're going to move it sounds like to this dynamic, but I think it's an... Just because you brought it up and it's kind of interesting there. I think it'd be great to touch on it because for people who have voted on a governance issue before, which I think is a very, very, very small subset of people, you kind of get it, but there's a lot of people that I think hear governance and they don't really know what that means. So can you just talk a little bit about that?

Illia Polosukhin (00:32:12):

For sure. Yeah. So actually I'll tell a story of our launch instead. So our launch was actually uniquely done where the network was brought up and given to validators and then all the tokens were distributed and they were delegated, but they were not transferable. So nobody could transfer tokens. It was pretty much just like a kind of origin set, validators run it around the world. And what needed to happen is validators and their delegates throughs the validators needed to vote to unlock the transfers.

Illia Polosukhin (00:32:51):

And this kind of was designed for two reasons. One is it was really to prove that the network runs on one side. And the second one is to show that validators and the community and token holders are able to make decisions. They're able to self organize, make decisions. If our team chills out or whatever, like at that point was one team, this thing can continue running, right? The validators know how to communicate this, all the channels, all the staff is configured. And to be clear, there was a huge setup to get there. There was a lot of stake wars, which was done to organize all that. And so they voted and there was a lot of back and forth. There's some tooling that wasn't ready. Some people were like, "Hey, we don't want to launch yet because it's not ready yet for the specific things."

Illia Polosukhin (00:33:39):

And some people are, "No, we want to launch because we want this token to be live and we want it to be actually exchangeable." And so, there was a little bit of a drama at that point. I mean, for a brief second, that happened, but that was the process, which allowed people to express their opinion, communicate... Some validators, for example, voted and then their token-

Illia Polosukhin (00:34:02):

Some validators, for example, voted and then their token holders would delegate to them, did not agree with their decision, and so they've expressed that and they forced them to switch their decision. In a way it was an experiment, in a way we needed to do that to launch the network. So you experiment is broad. But that's that just showcases kind of both the power that the community is able to make decisions on the protocol. It's not a single team, even if there's a team that's building the code, there's community that is able to make decisions, is able to enact them, and it is able to like in a way potentially fork-off this team and actually choose a different team or do something different.

Illia Polosukhin (00:34:46):

That's, again, important because you don't want to rely on a single party, even if this party is me, to make decisions because there's all kinds of things from being not available to do these decisions, to for some reason becoming malicious. And so it's important to have this power, and we kind of see that in the ecosystem, it's getting stronger and stronger through actually decentralization itself. And so what we have done since launch is we decentralized our team. A lot of kind of what people were there before the launch actually left, and now we don't have that company anymore, so we're kind of finalizing that process.

Illia Polosukhin (00:35:29):

So we originally spun out Foundation, which is kind of really responsible for education, for funding in the ecosystem for the decentralization regulatory work. We have Human Guild, which responsible for gaming, and they really focused on kind of human part of the ecosystem. They have a really, really good community there. We have Proximity that's focused on DeFi. We have OWC, which is an accelerator, which also kind of originally started, but spun out. And then we have near China and [inaudible 00:36:00] the eco fund. We have near Ukraine, which now in Portugal, a regional hub. And we have more and more of the kind of regional hubs, like in Kenya, in Balkans starting as well.

Illia Polosukhin (00:36:12):

And so really becoming have strong teams present everywhere in the world, have very different opinions, have very different stakeholders themself as well, and bringing this ideas right to the community, bringing them to kind of decision making is important because at the end, we are not trying to have this monotonic culture. It's all about having everyone represented. Having in all those places, actual getting people there access and control over the data assets and governance. And so to do that, you need this kind of really rich and active community and actually work on this.

Illia Polosukhin (00:36:51):

And so kind of part of it is, I call it osmosis where parts of the things are just spun out and kind of growing on their own, and so that's been doing. And so kind of the left out of the team have also spun out into Pagoda, which is a Web3 startup platform, really focused on building all the tooling for Web3 startups. And so now, the original core team doesn't even exist kind of in the shape and form like it started because everybody's kind of in different places in the ecosystem.

Daniel Scrivner (00:37:21):

Yeah. You covered a ton of ground there. I love the story you shared around literally having decentralization and governance show up from day one when you launched the project, because it's very cool. And it's a way I think from the very literally, the first day that the protocol is going live of saying, "No, we deeply care about decentralization. We're going to start off actually with this kind of new, novel approach, but we're doing it because we really believe in decentralization."

Daniel Scrivner (00:37:47):

And you hinted at it at the end, and I'd love to explore a little bit more in detail of, for people that aren't familiar, every project starts out centralized. And what we mean by that is it's traditionally, like yourself and your co-founder and the initial team, it's literally people just deciding to work on something together. And so they're self-organized. They basically form a small team. They obviously have a company. They might raise funding out of that company. But then there's a really interesting moment. Typically, it's around when the main net goes live or the protocol actually launches, where then basically the protocol is owned by a foundation and the model changes from centralized control to very broad decentralization.

Daniel Scrivner (00:38:27):

You hinted at it there. I would love to talk about from your perspective, how has your role changed when NEAR was centralized versus decentralized, and then paint a picture for people. You talked about a lot of specific entities there, but just really broadly, what are you pushing down to these hubs, and talk about that hub approach because I think it's very unique.

Illia Polosukhin (00:38:48):

Yeah. I think my kind of my role, I would say, went from I obviously was kind of helping to architect the protocol, and then was helping to kind of set up foundation, and a lot of like fundraising legal structure there, and then kind of organizing this community for launch. But over time, yeah, my role started to transition more into how to help projects succeed on NEAR. So working more with projects, working more with newcomers who want to build something. And so part of, kind of this more global idea of Web3 has this very complex mind chart of how I think Web3 should develop with, I don't know, a hundred boxes. And so each box is a component of Web3 it's everything from identity, to conflict resolution, to reputation, to decentralized storage, et cetera. So blockchain is one component there.

Illia Polosukhin (00:39:49):

And so really kind of in trying to work with teams to fill out this whole map. And there's dependencies. There's kind of interconnections, how they worked with each other, et cetera. And so in a way it's like advising, but it's also like being there for kind of product, connecting them with other pieces of ecosystem sometimes, kind of helping incubate it, et cetera. And at the same time, helping find leaders in different regions.

Illia Polosukhin (00:40:13):

So I do believe kind of cryptos especially needed in developing markets. I'm from Ukraine. Right now, Ukraine is crypto pretty much, runs on crypto, but also Latin, Southeast Asia, all of those places. And so kind of the idea is to really find kind of strong leaders, people who are really excited and then empower them. So it's not that hubs report to foundation. They're not. They're actually independent companies which are working for their own incentives, but they have kind of percentage of their profits are repurposed for the ecosystem development, for community and marketing and all this stuff. And so this is designed to have this independent hubs around the world, which are kind of self-interested in success of this whole ecosystem while still contributing to kind of this lifting the whole ecosystem as well.

Illia Polosukhin (00:41:14):

And so that allows to really both have local presence, very strong local presence as people doing everything from funds, like allocating funds to projects in the ecosystem. They're doing kind of their own product development. They're working with governments. They're working with regulators as well in those regions. And they also become in a way part of the governance, like this whole community governance, because they actually, they must opt in that region. So everybody comes to them to learn more about what's going on.

Illia Polosukhin (00:41:45):

And so in a way, this kind of as you have validators who are people who are more technical who are running this, you have these regional hubs who are more kind of tapped in into the ecosystem part. And so they become kind of the other. And in general, when I think of governance, there's a lot of different stakeholders in the ecosystem. And so they all get represented differently, but as an individual, you probably are parts and kind of hear parts there. And so you want to have some kind of exposure as you delegate your vote or even information you consume, you have this different connections.

Illia Polosukhin (00:42:22):

Now, yeah, my role is really about kind of advising projects, finding partnerships, as well as finding really amazing people around the world to kind of start on those hubs and projects.

Daniel Scrivner (00:42:33):

Yeah. So in some ways you're just like any other contributor to the near ecosystem, but you're also connective tissue between different projects, different people, different regions around the world. And I'm guessing people working on complementary stuff where, where they should obviously be working together and collaborating.

Illia Polosukhin (00:42:51):

Yeah. Pretty much connecting people. That's half of my Telegram, is just connecting somebody to somebody and then trying to figure out how to escape that group.

Daniel Scrivner (00:42:58):

Yeah. God only knows what your Telegram looks like. It's probably mildly overwhelming, to say the least.

Illia Polosukhin (00:43:03):

I have hit the maximum groups in Telegram.

Daniel Scrivner (00:43:06):

Wow. I didn't even know that was a thing. So.

Illia Polosukhin (00:43:08):

Yeah, it is a thing. There's 5,000 groups, and then at that point Telegram [inaudible 00:43:13] the groups because it overfills, I think, so.

Daniel Scrivner (00:43:17):

Well, I'd love to go and talk about that mind map you have of Web3, because even just in some of the things you threw out there, like conflict resolution, super interesting. I haven't heard anyone talk about that as a specific problem to be solved in Web3. But it obviously makes sense, because what are you doing? I think it seems like your mind map probably answers the question. In Web3, if we're decentralized, we face different challenges. We face different problems. So what are those different problems? And then how do we want to bucket those and think about solving them? Can you spend a little bit more time walking us through some of the things in that mind map? And I think specifically what I'd be curious about is if you could just pull out some of the things that probably are non-obvious, like conflict resolution again is an example I find really interesting. I'm sure there's others there. What's on your mind map that people probably aren't thinking about?

Illia Polosukhin (00:44:05):

So I'll just kind of explain. The top of it was if we want to build kind of decentralized versions of many of the applications people use right now, kind of day to day, and this is social, this is things like food delivery, this is things like Uber, this is things like GitHub, et cetera, what do we need to do? If you think of something like Uber or food delivery, it's actually kind of common piece that underneath, and they call it gig protocol. It's really matching somebody who wants to do some service and somebody who needs a service. And so what gig protocol is actually underneath is a reputation. And when something goes wrong, like somebody did not, you did not bring food, or you did bring food, but then somebody said you did not, is conflict resolution, which then requires identity, some form of identity. And obviously we don't want kind of privacy leaking identity. We want how do we privacy first identity? What does that look like? So we need zero knowledge proving, proxy encryption, and all this. Then you're getting into more technical components.

Illia Polosukhin (00:45:12):

And so, similarly, if we have social, the main component of social is social graph. There's something that should belong to the person. And it's actually a very complex problem because you will not be putting your full social graph on a blockchain. It doesn't matter how scalable blockchain is. It's still not scalable enough. I mean like it's just like security parameters-wise.

Illia Polosukhin (00:45:32):

But there's other ways to do that. And so how do you do that? How do you do reputation? Reputation is probably, and especially for me, it became actually more relevant in March because we started running this humanitarian fund for Ukraine, and we actually were working with a lot of volunteers, over 5,000 volunteers on Unchain Fund worked with, and some of them stole stuff. We knew some we'll lose some percentage of money, but we did KYC, we did kind of pinpointing them, location, proof location. We did kind of background check via the government database, we did it. And we did if somebody knew in already existing network, so a kind of a relationship network. And so all that obviously was very centralized, very privacy, invasive, very not Web3, but it was needed to be done.

Illia Polosukhin (00:46:27):

And so as we think about it, how do we actually build this, but in a way that truly decentralized and actually privacy preserving?

Daniel Scrivner (00:46:36):

Yeah, it's fascinating. I want to go back and talk about one other of the kind of core components of what you're building at NEAR that I think is really interesting, and it's the goal of being sustainable. You can talk about that as climate neutral. There's a bunch different ways to frame that up. But I think even just going back to your comment around proof of work, obviously from your perspective, you're always trying to be optimizing. So sure, that's naturally going to be a goal because the goal is to use as little power as you can. The goal is to try to build something that's sustainable, where you're getting more out for the same or less power in, as you described it. Talk a little bit more about how you've approached that problem and how you think about sustainability or climate neutrality when it comes to blockchain, because I think you have an interesting mental model there.

Illia Polosukhin (00:47:16):

Yeah. So in general, this is kind of in the same vein of this huge mental map, is we need all those things to be sustainable period, because we have one planet. Yeah, Elon Musk is working on getting us to the next one, but probably we still-

Daniel Scrivner (00:47:32):

Earth is better.

Illia Polosukhin (00:47:33):

Yeah. Well, we don't want to fuck up this one.

Daniel Scrivner (00:47:35):


Illia Polosukhin (00:47:35):

For sure. And so how do we get there? Obviously optimization is part of it, but also ability to understand where things going, where are the waste? Where are the kind of emissions, et cetera. So for us, what NEAR can be is this platform that allows everyone to build sustainable applications. Not just applications that are self-sustainable, but also applications that help other industries to be sustainable.

Illia Polosukhin (00:48:08):

But the first step is always, before trying to fix somebody else's problem, make sure you are actually not part of the problem. And so this is why NEAR is carbon neutral, it's certified, it's working with South Pole to kind of offset all the emissions. And actually the funny part is because through a stake, the emissions of the validators are I think only percentage of the total emissions that kind of foundation is calculating, a lot more is coming from travel because airplanes are actually a bigger issue.

Illia Polosukhin (00:48:47):

And this goes into, well, how do we help, for example, airplanes to be sustainable? What is this like? Well, obviously we're not working on what are synthetic fuels, but we can actually track usage of synthetic fuels. There can be [inaudible 00:49:00] systems to do that that can be, for example, if you're using there's projects which use now crypto for booking tickets, maybe there's some offset automatic in that embedded, and stuff like this. You can start building more and more tooling and concepts, making it easier for people to be sustainable and operate in a sustainable way without needing to kind of go out of their way, while actually committing to [inaudible 00:49:25] calls.

Daniel Scrivner (00:49:26):

That's so cool. And so it sounds like, yeah, you're just thinking, again, it seems like another example where you're truly thinking about it multi-dimensionally, and you're working on kind of sustainability at all levels, or at least the technology and the infrastructure and the value of trying to make sure that you're being sustainable at all of those levels, which is a really-

Illia Polosukhin (00:49:45):

Exactly, yeah.

Daniel Scrivner (00:49:46):

Yeah. I'd love to kind of do a little bit of a retrospective and talk about the lessons you've learned building NEAR. You gave an example earlier on of having three different designs of sharding before landing on the fourth design that you're actually moving forward with. And clearly, I don't know, just to focus on that for a second, at any company, so much of innovation and invention is just iteration, and so there's always that. But I'd be curious just from your perspective, you've now been working on this since 2018, as you look back, what are some of the biggest lessons that you've learned that might be applicable to others building in crypto? And it may be people building in the near ecosystem. It may be people building in other ecosystems. What have you learned that you think is worth passing on?

Illia Polosukhin (00:50:31):

Well, I think there are two interesting pieces. One is build upgradability right away. So it's interesting because the blockchain is usually, people have this meme of immutability and it's like you launch an application and it's forever, and it's not true because nothing is staying there forever. We need things to evolve. And even Bitcoin for whatever, slow speed it evolving, it actually does, adding...

Illia Polosukhin (00:51:03):

For whatever, slow speed is evolving, it actually does, they're adding new features, they're doing stuff. And so doing an explicit way to do upgradability, some ways that allows people to do this. And with the community consent, with understanding how this works with whatever mechanics you want and need, it's really important because otherwise you will need to add it later and it'll suck. And so within that, then just launch faster. So if you have upgradability, that means you can upgrade. If you can, we call it sandboxing, we're actually trying to build some tooling for that, so you can launch a smart contract. But actually sandboxed, it only can process some amount of money per day. So if nothing else, you can just ensure sandbox. If the contract gets completely broken, you just ensure sandbox for that and then it locks automatically if something's wrong outside of the norm.

Illia Polosukhin (00:51:58):

And so you can make it easier to launch. And so for us specifically, what we should have done is somewhere in April '19, we actually had an implementation with Tendermint. We had our smart contracts running on Tendermint without sharding. And I also speak right in the moment where we realized our sharding we did implement was too complex, it was not something that made sense. And so we should have just gathered that to launch. That was not sharding, we did not deliver on the promise of sharding, but it was a working blockchain that could have gotten us people to start building applications. And instead we launched in October 2020, so over a year and a half later.

Illia Polosukhin (00:52:45):

And obviously a lot of stuff that to launch we needed to do, we just did it a bunch later, which we could have started doing in parallel while still figuring out sharding, which we did and then implemented it and then started figuring out how to launch only in the beginning of 2020. So generally yeah, if we're talking about city blockchains, there's so much things to go into launch that are nontechnical, that try to make minimal things technical, secured obviously, but then launch it. Because then you can actually paralyze your technical process of continuously improving it while already being in market with already being users. And in web 2.0, it's a normal thing that everybody says, but in web 3.0, it feels like it's complete waterfall right away paper that defines everything from day one, and then we go and build it forever and then we launch it and it's beautiful. And it's like, "Well, no."

Daniel Scrivner (00:53:42):

The rules of building stuff haven't changed. That still is a very difficult approach.

Illia Polosukhin (00:53:45):

Yeah. The rules haven't changed, exactly. Yeah.

Daniel Scrivner (00:53:47):

Yeah, that's fascinating. I want to ask two closing questions. This has been a fascinating overview of what you're building at NEAR, and the stories you've shared have been amazing. The first question that I wanted to ask was going back to something you mentioned earlier in the show, in 2018, you decide to found NEAR you're in the middle of a crypto bear market. There's an enormous amount of volatility. And the reason I want to talk about this is not that sometimes in markets things go down, that should be just an accepted universal maxim, everyone understands that things are going to ebb and flow.

Daniel Scrivner (00:54:19):

But I think the reason it's interesting to talk about is we're all human. And at the end of the day, if you're building something and you feel like there's this existential threat, the market's going down or there's this price volatility, or people are leaving or there's uncertainty, that obviously can factor into your psychology and how you're feeling about what you're building. And so the question I want to ask just really simply at a high level is, how do you personally handle fear and anxiety when you're building in crypto? And then a second is just advice to yourself and other developers or builders listening about what to do now, because we're, again, in another moment in time in crypto where there's extreme volatility, and it feels like an existential threat at least to some people in some parts of the ecosystem.

Illia Polosukhin (00:55:01):

Yeah. So we started thinking about blockchain in May and then we started in August and we've fund raised in, I think September something, and October, and we closed our fundraise and market went up a little bit. It's pretty much every time we fundraise, one way or another there's some market going down, and probably somebody needs to start trading on that. And then obviously actually we were doing another fundraising beginning of 2020 when March 12th happened.

Daniel Scrivner (00:55:38):

Another terrible time.

Illia Polosukhin (00:55:39):

Yeah. And so generally, at this point it's been so many times already that it's like, "Okay, fine." I think the interesting thing that changed, in '18, so I talked with my ex colleagues at that point at Google and when I said, "Well, we're doing blockchain now," they're like, "What are you guys scamming now, people?" That was the thing. But then the same people are now invested in this, they are interested, they've suggested ideas and projects for sustainability as well, for example, or for using this with AI. And so the reality is the shift has happened. The mentality is already there. So yeah, there's market volatility and there will be market volatility. The equity market is volatile as well, that doesn't mean people stopped using Google or Facebook or those companies stopped pretty much making billions of dollars. And we see by all metrics, usage is there, people are there, more and more really good web 2.0 people are coming as well, they are interested and they see the space as actually the next wave. And so yeah, I think keep calm and build on.

Daniel Scrivner (00:57:02):

Keep calm and build on.

Illia Polosukhin (00:57:03):


Daniel Scrivner (00:57:03):

Like it, I haven't heard that exact phrasing.

Illia Polosukhin (00:57:07):

Yeah. I posted that too. We have this chat, there's a lot of NEAR ecosystem founders. This is what I posted to them.

Daniel Scrivner (00:57:15):

Well, and I like your story because I think it touches on another aspect of what I felt, which is just, there are no words that are going to comfort you, and part of it is just living through it. And continuing to build, and hopefully over time you get, maybe desensitized is not the most positive word or is not the right word, but it feels accurate. It's just over time you stop caring about it less.

Illia Polosukhin (00:57:36):

Yeah. I think like it's the same as if you're a VC, this may sound bad, but as a VC, you cannot attach to any single company. You cannot be like, "Hey, how's this company?" You try to help them, you try to sell them. But if some of them go to business, that's normal, that's part of your strategy, portfolio strategy. Similarly, here in crypto, if you're in crypto and you're web 3.0 and you believe in this ideals and vision, the short term price fluctuations, however they are, they're not affecting you because you're looking for long term, that's your strategy.

Illia Polosukhin (00:58:13):

And so who they do affect is people who came on to make short money for a period of time. And in this sense, this is why in 2018 and beginning of '19 it was actually pretty good because the market was actually pretty empty. There were only a few teams building. And so from this perspective, yeah, right now, we welcome by the way, every founder who wants to build right now something, and we have funding to help them, we have eco funds, we have partnerships with VCs as well. Because all those VCs do have billions of dollars of raised funds to actually deploy capital into seed rounds and [inaudible 00:58:50], so build on.

Daniel Scrivner (00:58:52):

And I love too as well too, because both from venture capitalist perspective, who always talk about, you want to do the countercyclical thing, and investing, you always want to go against the grain. Same thing with building. But it's so much harder to do than to say or to think. And so it's always, when is the best time to build and when is the best time to invest, it's always in moments like this, where there's a massive amount of uncertainty and there's people leaving. I want to talk about your humanitarian aid project for a couple of reasons. Obviously, number one, you're Ukrainian by background, there's a terrible war going on in Ukraine. You decide to start this humanitarian effort. Talk about, I think just your perspective as a Ukrainian, why this was important and what you're trying to do with the foundation and how people can get involved.

Illia Polosukhin (00:59:36):

Yeah. So it's called Unchain fund, Unchain fund. And so when the war just started, first reaction, obviously call everyone, make sure they're safe, try to figure out how to get them out. Second reaction is like, "Well, how can I help?" I was in New York, I'm not going to go fight with a rifle, there's better ways I can contribute. So first direction was sending some money. And so it's war, it's happening right now, it is unclear if Kyiv was pretty much under attack, so you don't know actually if the banking system will work because it may actually be bombarded out. And so crypto makes total sense as a way to send donations and help people. And so the first thing I did was just sending whatever, how many Bitcoins I have to this comeback life fund, which is an existing NGO that's be helping people for a long time. And then you're like, "Okay, what else can I do?" And to be clear, there was only one who had Bitcoin address at all, none of the other things had it.

Illia Polosukhin (01:00:45):

And so one of our actually folks from ecosystem was building advantage world, he reached out saying, "Hey, we're thinking to do a crypto fund that just collect funds and then distributes them to other NGOs. Just be this place where people can send funds too and then we just convert them into NGOs." And so that's how it started, I joined and we started collecting funds. And then we evaluated the NGOs and realized that those NGOs are very inefficient, they're not able to really get on the ground. They have no reporting, their reporting is once a year. And so you need to wait for a year to get reports from them. And so we're like, "Hey, we collected this money, we're responsible for them. We cannot give it to this fund, which potentially will waste 50% and then the report will be in 2023." And we have no idea how fast they'll be able to deploy capital. And so instead, we started working directly with volunteers because there's a whole network of crypto NGS and crypto founders.

Illia Polosukhin (01:01:44):

And they started referring people, and then we created a process around that and build CRM system with all the stuff that you usually do. And so generally, on one side, obviously, it's good to be helpful and be able to help. Also a lot of people then were reaching out to me saying like, "Hey, how can we help?" And I'm like, "Well, here's actually a list of things you can donate to for example. Also, here's the things we need to buy." There was all kinds of equipment, all kinds of generators and stuff like this, which became hard to get, so if you can find places to buy it. We actually got a bunch of equipment to Mykolaiv, which was surrounded, we got a bunch of medicine to a place that was completely overtaken. And so that was important work to be done, but at the same time, crypto was fundamental because we can actually move really quickly.

Illia Polosukhin (01:02:46):

It was done, 20 minutes we had a way to start collecting funds. First day, we already had a million, it's over 10 million at this point. And so yeah, I think this is the future of NGOs in general. And specifically disaster relief, I think disaster relief is especially like, "Hey, deploy a short lived team plus lots of software to orchestrate this. Volunteers on the ground, funding collected and distributed." And then I think the next stage here is really turning... There's some interesting stuff there, which is a UBI program right now with children under six, there's 10,000 women right now who are getting 25 Euros per week. But then going beyond this is actually starting to build for profit projects to rebuild. So actually create investment dollars that are able to rebuild buildings, rebuild infrastructure, with expected returns to really align incentives and fund and get money into the ecosystem of Ukraine. And in turn actually make Ukraine probably the capital of crypto as well, because it's already been spurring there.

Daniel Scrivner (01:03:58):

I think that would be an incredible outcome. So thank you for doing that. And as you mentioned, anyone who wants to donate or wants to learn more, you can go to unchain.fund. Thank you for doing that. I think it's a really cool, and it's a really important project. And yes, to your point, I think especially for moments like this, it's about speed, it's about actually getting it to where it counts. So the traditional model, I think in a lot of ways, it goes to the things we've been talking about around what's the cons of a centralized model.

Daniel Scrivner (01:04:23):

And again, an example of what you can do by just taking that and almost deconstructing it and building it back up in a decentralized way. There are so many more questions I could ask you, Illia, but I want to be respectful of your time. So thank you so much for taking the time to talk, it's been so much fun to be able to go through all this. Everyone listening and watching can learn more about NEAR at near.org or by following NEAR protocol on Twitter. And if you're a developer listening, you can jump in and learn more in NEAR's developer docs at docs.near.org. Is there anything else you would call people's attention to or any other ways you would direct people to go if they want to get involved in the ecosystem?

Illia Polosukhin (01:05:01):

Yeah, I think near.chat for our discord and near.org/grants if you need funding to build something in your ecosystem.

Daniel Scrivner (01:05:09):

Near.chat is awesome. I didn't even know that existed. Thank you so much, Illia.

Illia Polosukhin (01:05:15):

Thank you.

Daniel Scrivner (01:05:17):

We hope you enjoyed this episode. Thank you so much for listening. You can find the show notes and transcript for this episode at outlieracademy.com/108, that's 108. At outlieracademy. com, you can find all of our other founder interviews, profiling incredible companies like Eight Sleep, Common Stock, Varda Space Industries, Superhuman, Primal Kitchen, 1-800-GOT-JUNK, and so many more. In every interview, we deconstruct the ideas, frameworks, and strategies they use to build these incredible companies. You can also find videos of all our interviews on YouTube at youtube.com/outlieracademy. On our channel, you'll find all of our full length interviews as well as our favorite short clips from every episode, including this one. So make sure to subscribe, we post new videos every single week. And if you haven't already, follow us on Twitter and LinkedIn under the handle outlieracademy. Thank you so much again for listening, we'll see you right here next week with a brand new episode next Wednesday.

On Outlier Academy, Daniel Scrivner explores the tactics, routines, and habits of world-class performers working at the edge—in business, investing, entertainment, and more. In each episode, he decodes what they've mastered and what they've learned along the way. Start learning from the world’s best today. 

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