LayerOneX tackles blockchain interoperability with XTalk technology

0:02I'm Ashton Addison from the Cryptocoin Show and today on Blockchain Interviews, we have Kevin Coutino, founder of Layer 1X here to talk about blockchain interoperability, security, AI, and more. Kevin, thank you so much for taking the time and welcome to the show. Yeah, thanks for having me. I've been looking forward to this one. Likewise. I'm always interested in learning more

0:25about how to communicate blockchains together better, safer, and explore new ecosystems. You know, I don't want to be stuck on Ethereum uh when there's all these new nent blockchains that we can connect to. I'd love to hear more about what you and your team are building at layer 1x first, then we can dive into all those topics. Yeah, for sure. First of all, good

0:49morning, good afternoon, good evening to whoever is going to watch this. So, layer 1x is a next generation decentralized blockchain that empowers crosschain interoperability but at the same time we are here to eliminate the bridges as well. The L1X is being built into two different phases. So first phase was we built the L1X core and the XTO technology. So the L1X core has its

1:14own virtual machine which is also EVM compatible but XTO that is where the crosschain recipe lies and that is the bridgeless infrastructure. In the stage two, we are actually focusing on quantum resistant innovation to provide quantum safe crosschain message and storage feature that can be leveraged by taps building on multiple chains without actually having to integrate quantum

1:41resistancy directly into the other networks. Wow. I would love to touch on that later. I've been curious about what happens when quantum comes in and how do we protect against it and use it for the benefit of blockchain. Uh I would love to know more about how you got into this. Obviously there are a lot of issues in blockchain communication and bridges, hacks, things like that. So how

2:06did you stumble upon building a solution to solve all of this? Yeah. Um I started you know with computers when I was 8 years old. um you know and since then I've always been interested in you know building something with computers um that could help you know further uh build softwares or even everyday people and you know one of my um company that I founded before

2:31this was Australia's first blockchain based rewards platform that got listed on the Australian securities exchange and while building the reward system I you know used um EOS back then it was probably one of the best blockchains that you could use and the customers that we had which were the retailers had a lot of problem bringing their data onto the chain um you know

2:57and also issues about not you know broadcasting their customers information to everyone out there and that's where where I started thinking about you know an interoperability protocol itself but while I was doing this I started to do my PhD um you know in blockchain interoperability and quantum computing at the University of Western Australia and that's where I found that this

3:20requires a holistic approach because you can't be something and then transform into someone in web 3 because there are so many moving parts to this. Um so that's where you know we u spend me and the researchers spend more than 8 months drafting a holistic 210 page white paper. Um you know reading that white paper it's like a nap waiting to happen. But um you know if you definitely want

3:45to learn about interoperability and you know the stages of them what current situations are being faced the white paper is a definite read. Wow that's uh that's in-depth for over 200 pages. I'd love to take a look at it. Um, do you think from a high level you could talk about without layer 1x, where is the blockchain industry at with cross-chain communication, transacting uh different

4:12DAPs across different blockchains and transferring tokens across different blockchains. Yeah, I have a term for this. I like to use the word brick without layer warnings, which is, you know, the first one. Yeah, the first one is B, right? Bridges are broken and bridges are you know a great piece of technology five years ago because as you see you know the evolving nature of the

4:38requirement for multi-chain which could mean you know your tokens going from one chain to the other has now gone into logic which actually regulates your token flowing from one network to the other. That's where bridges um are not efficient enough to handle that and we've already seen with the hacks that happen. The other ones are you know uh the relayers and the oracles introduce

5:01centralization risks. What I mean by that is if the decision making of moving from one network to the other in terms of message passing is on a third party um you know uh centralized relayer that's using a different tech stack that's using a completely different micro validation approach that is where um you know these kind of technologies get centralized of course then the most

5:27important one where you know there are so many incompatible blockchains out there you know that make true multi multi-chain execution impossible but at the same time I think uh you know this is unavoidable in a multi-chain world but with the current technologies this is there is still a problem moving between different you know uh VMs like if you go you know even to XLR today you

5:49go to squid router today you still see that you can't swap between Solana and the Ethereum network um of course then you know the big boy which is the cost and complexity because you know at what stage in the project life cycle are you choosing to go multi-chain right if you are too early you know it's too complex for you if you are too u you know too

6:09advanced in your life cycle of your project it's too risky for you so there is this you know um there is this um confused um you know bandwagon of decision making that current tech is actually uh you know providing and of course you know uh the quantum threat which will break you know cryptography and I'll get a little bit more into it I love quantum but I'll get into it later

6:32on where no one is even talking about quantum based interoperability where we know that layer 1's actually being quantum resistant is a long way home but how do we get started with it I think you know the brick model kind of encapsulates the current situation and the problems we are facing yeah it's really fascinating and with somebody who has ether for example and

6:59they want to communicate into another blockchain, but they understand, okay, bridges are broken. There's also risks there. Is there a way that you can explain how layer 1x solves this problem without explaining all of quantum physics um in and how it's safer and more secure? Yeah, I think you know um I I like to use this analogy of the workout u you

7:25know machine, right? So let's take that analogy over here. while you use a bridge right you think about there are four components to it if you remember this you know as a viewer it's okay if you don't that's fine as well so there are there is the relayer contract there is the adapter contract there is a logic contract and there is a token whenever you send a message from one chain to the

7:46other the relayer picks it up gives it to the adapter to make sure that you know if you're sending it to the logic contract it's compatible and then the token is minted what it means is if you go to the gym and based on how much If you work out on that workout machine, you get certain points which you can redeem for cash. This is the scenario. Now, what happens over here is there are

8:09certain hacks that have happened where the relayer has been bypassed and the adapter has been spoofed in a way that it allows you to go and mint tokens. In the in the in the workout example, it would mean you could perform exercises fewer than actually what you're getting paid for and trick the machine that you are actually doing more than you work out. Right? With XTOK, with L1X, we

8:32don't use any of these contracts. Now, as an example, there is the XTO module that listens to events coming in from any of the compatible chains we are on. We are on 35 plus chains that is natively integrated into the infrastructure. We listen to that information and then then that information is passed on to L1X contract where it verifies whether the

8:55information actually coming through is valid or not. It creates the payload and then passes on to the contract that you want to call straight away. So if you want to go and send money from one network to the other or exchange value from one network to the other, you don't have to go through these redundant contracts that you would go through on the bridge. You talk straight away to

9:18the other chain. M so that's what the X talk uh technology inside of layer 1X is the communication immediately into the other chain that and and to that point you know because the whole you know blockchain works on how many computation or calculations you do if you don't have these many contracts that means you don't have to process that many transaction actually bringing your

9:45crosschain transaction fee u you know 80% % down and at least twice as fast. Mhm. And how does the security compare to bridging and and traditional communication for for DAPs on on the layer one security side? Yeah, I think you know the first one is that you know the bridges are the weakest link right more than 60% of the hacked value come from bridges. So we

10:11know that you know bridges are weak. Now when you try to compare it with them firstly you have you know the native trustless crosschain execution where you are relying on primary set of decentralized validators from a layer 1 protocol to validate the message for you which is not a client or which is not a light chain validating this specific message. It's giving it the credibility

10:37it deserves. Number one, right? Number two, you have a multi-chain smart contract. What I mean by that is we believe that the assets should never leave that specific chain. So if you have an asset on Ethereum, it should stay there. If you have Bitcoin on BTC network, it should stay there, right? With the logic as to if I receive $100 into this account, then automatically go

11:03and provide an NFT to this user. This specific logic is executed on L1X where we have contract standards specifically for cross-chain interoperability. So we don't have to choose a new programming language to install security until and unless you're moving a country on the blockchain. Mhm. So for a majority of the requirements, these standards you know borrow from

11:30certain standards that are already secure uh which does the job and of course in terms of bridges having multiple different u connection points. So let's say you're trying to go from one network to the other it takes you 3 to four minutes on the bridge. The longer you are in that pipeline the higher is your risk. Mhm. So are we here because even the time taken is less the

11:55risk is also lower from the time perspective. Mhm. And does this work specifically well with any parts of web 3 for example with DeFi there's often liquidity pools and you're tra trading coins back and forth but you also mentioned NFTTS there and there's hundreds of other use case industries for web 3. Did you build this for any specific things like DeFi or

12:21does it just work the same and well with everything? Um, it it works with any any any category or any industry where you want to move value from one network to the other. Number one. Number two, you want to decide how to move that value. Number three, you don't want to take that value and fragment it on one specific chain. if you want to recognize that value on

12:49the other chain. So if these three things are your requirements, this specific technology is well suited for it. Mhm. And in terms of decentralized application uh communication between chains, do DAPs actually have to develop their app onto the layer 1x blockchain um or can they use the protocol through other chains? How exactly does that work?

13:16Yeah. So, you know, our our goal is to unite all blockchains and we want to be the Google of Web 3. And what I mean by that is let's say you are an existing project or a new project. You want to build on a one specific chain or you want to go onto multiple specific chains. You've got a decision metric that you need to fill. Regardless, you can use the XTO

13:45technology where it is integrated with L1X, but it is not required for you to do it. So, as an example, if you want to move message from one chain to the other, you don't have to deploy anything on L1X. Number two, that is also where we are focused upon. We believe that interoperability is still at its infancy. And Mhm. to prove that less than 1% of the projects have their coins

14:14on multiple network. Mhm. There is a big difference in you having your coin on multiple network and you being multi-chain. And the difference is we are trying to solve the problem of you going on multiple networks first before you decide what you want to take along on these multiple different chains. So there is that cycle that a person or a project has to follow which is being

14:40skipped when you look at certain protocols that provide crosschain interoperability as of today. Mhm. M that's good to know and I want to touch on that quantum topic that you mentioned if you could explain quantum resistancy but first I want to ask sort of a high level that question that people that don't know a lot about quantum they don't even know a lot about uh crypto

15:01and interoperability they often ask is is quantum computing a risk or a threat to to Bitcoin and to blockchains um yep okay let me start with this Right. Um the NSA has given a notice to be ready for quantum before 2030. Right. That's not even whole 5 years

15:31now. Mhm. Second, second of all to understand whether this is a risk for us or not. The ability to crack RSA, ECC, which is the uh the cryptography that is used today to generate you know public uh private key pairs or to you know sign your uh transaction. You might require for example let's just do a comparison. You

15:59might require 10,000 cubits to achieve that for example. Today's cubits are at around a,000. Of course, it's you know with IBM it's more but let me put it this way more than achieving the ability of what a quantum computer can do. The the question also over here is how fast a quantum computer can solve its problem of understanding what to do next.

16:27Because in quantum computing you have two things a cubit and error correction. What what I mean by that is how fast is your quantum computer versus how much errors does your quantum computer make. Research including Google and IBM are focusing on reducing the error. What actually means is I would need less of my computation power to break today's cryptography. Regardless what AI has

16:55done to uh you know u today's today's world quantum is taking out a hammer straight at the door. It's not killing you slowly. So for something like that to be quantum ready and to be quantum resistant, I think it's it's it's a paramount step that we need to take in web 3 um today. Mhm. And how do you prepare to be quantum resistant now sort

17:24of projecting what's happening or what's going to happen 5 years from now. So um the current solutions in the quantum world you know if you look at web 3 today um are divided into three different categories. So the first one is the protocols are trying to upgrade themselves. So Ethereum has this thing called a splurge you know where they are trying to look at quantum based

17:49cryptography. Um the second one is there are quantum based chains itself coming up you know that claim to be quantum resistant. And the third one is you know um an off-chain onchain solution that can be used by multiple different uh you know networks. So these are the three categories. And just to clarify just by introducing quantum cryptography resistant techniques or solutions in

18:16your protocol that does not make you quantum proof right there is a huge difference in there. Um, now what layer 1X is trying to focus on is a solution that can be used, let me put it simply, as a plug and play model for DAPs protocols to be quantum resistant um, you know, without changing their core infrastructure. Mhm. Now before I you

18:46know before I finish on this topic um if you look at you know if if there are major upgrades happening for example right let's say I'll get into the L1X solution later but if you say major upgrades happening then the interoperability protocols that rely on signatures on multiple different networks will also have to upgrade. Now if there is an inconsistent

19:08uh you know discrete upgrades where they are following their own norms to upgrade their own protocols and features it's going to be a nightmare to coordinate all this into an interoperability protocol which is not ready for that yet. Yeah that's a great point. Um what would happen in a scenario if one of the major chains like Ethereum or Salana, you

19:34know, was became broken by quantum and then there was this interoperability where you know that could affect all the other chains if they're all communicating efficiently and and through blockchain interoperability. Yeah, I think uh you know uh first of all like if you look at Bitcoin, Bitcoin works on you know hashing algorithm where Grover's algorithm um you know

19:58will reduce the size of computation required by half but it's still achievable to break that cryptography tomorrow if you know Ethereum which uses the ECDSA and RSA based signature schemes breaks that means all the other protocols using the same cryptography is going to break. And when that happens, the asset will be worthless. Mhm. I mean, you know, it's it's it's like the

20:26bank opening its doors and saying, "Go for it." Mhm. Yeah. Yeah. And I'm I'm curious if AI fits into this as well because obviously quantum computing is coming. Uh but the growth in AI over the last couple of years has been more than exponential and I I feel like that's going to play a role in it sort of ties into all of this. So is there a specific

20:51role for AI in in interoperability and and quantum resistance? Yeah, I think uh you know uh there are three different angles to this. One is you know Microsoft coming up with their whole different architecture on how to achieve quantum uh supremacy. The other one is you know let's go and increase the number of computation power not focus too much on the errors and the

21:16third one is let's just focus on errors and make high quality processing. Now in the second and the third one when AI fits into the quantum computation side itself where you know how does logical cubits move to physical cubits meaning how do we make sure that we can achieve quality processing with an AI model there IBM and Google are already onto it

21:40like psycho has already been designed to work with AI based you know algorithms to improvise it on the other hand from the application and the and the and the protocol perspective when these kind of things happen the post you know uh attack uh or pre-attack sorry um logic that you need to um execute probably that is where AI could fit in where you

22:07know if there are if you have a public key on the internet that is that is that is available and if there is a quantum threat your assets would be you know compromised but if you don't have a public key available on the internet you know your assets could not be compromised. Now that being said AI could fit in beautifully over here uh you know where if there is such an

22:28attack happening at certain place because you don't even have to break cryptography. You could you could brute force a a certain network um you know um taking on the staking capabilities and try to you know malfunction it. But if that happens, then automatically moving the assets to a certain place or triggering certain smart contracts, this is where AI could definitely help.

22:52Mhm. That's great. Uh I appreciate that that insight. And there there's so many things to think about as we get closer to the AI singularity and and quantum computing and how blockchain is going to fit in this and become quantum resistant and AI resistant. Um what are some of the plans for you and your team growing layer 1x over 2025 in how you're continuing to develop protocol and move

23:20towards these milestones. Yeah. So you know right now we have successfully built structure and exto infrastructure where we've got you know more than 25 plus projects building on it. We've got something called as l1xapp.com which has more than 110,000 users actually performing swaps. We have processed millions of crosschain

23:49transactions already um in terms of the messages being passed from one chain to the other. Now that being said, there are two things that we are actually working on right now. Number one is we are launching a multi-et network asset issuance standard where you don't have to go in and change the behavior of you know you your your uh contracts on multiple chains if you want to go

24:15multi-chain an ERC20 contract that is pretty standard which you use that will come built in with crosschain capabilities number one and number two what we are focusing on is a quantum resistant paradigm where we are actually building four four to five different paradigms which are cross-chain message passing with quantum resistancy where you can store

24:40information in L1X or you can just pass the message also u there the next paradigm is about storing that specific information on L1X even if you are built on any other chain the fourth one is about rollup where we believe that rollup should be um you eligible for multiple different types of networks, not just one network being rolled into because you're you're trying to put all

25:07your eggs in one basket. And the fifth one is we are building an easy to use SDK where developers can come in um and deploy quantum resistant applications on any of the chain they wanted, right? not only on L1X and use u you know the crosschain features which we have and that is going to complement the already existing SDK which we have that allows you to build multi-chain application in

25:32less than 60 minutes. Wow, very exciting Kevin. I'm I'm looking forward to to seeing that play out and just make it easier to make blockchain apps and and have them on different blockchains. And for those people who aren't developers, maybe they're in DeFi or they do a little bit of trading, is there a way that they can interact with with the protocol and and

25:53test it out and learn more about it? Absolutely. And you know, uh, they can go to l1xapp.com and I can assure anyone watching this that it would be the most beautiful web3 UI and user experience that you will ever see. It is it is taking the concept of an operating system and putting it on the web. So l1xapp.com which will allow you to swap coins and we have introduced a new

26:20technology in there where you can swap bridgeless bridgelessly in a decentralized manner without even connecting your wallet. So if you have a cold wallet and you want to perform a swap um you don't need to connect your wallet. We don't recommend people connecting wallets to L1X app or anywhere else. Um it is a security issue you know uh so if you have a cold wallet

26:44you just want to perform a swap you can swap without connecting your wallet and we have introduced a model where in the coming week it's going out to the people where swaps are essentially going to be free of cost for you which will include free gas fees for your life. Wow, that's very cool. Um, I feel like there's going to be a time in the near future where the connect wallet button

27:12uh will disappear and we we won't need to go through those processes. It will be different. So, I'm I'm going to check that out for sure. Um, is there a way that people can learn more about this on the on the website as well or on the socials or where's the best place to follow along with these updates? Yeah, I think first if you just follow us on Twitter, we are very active on

27:36Twitter. We update the road map. We update any feature going out. You know, Twitter is the first place where it goes to. Then of course the discord and if you just bookmark the swap page on l1xapp.com, if you just go in there, it has a widget section where all the new updates are, you know, published on a 24-hour basis. So each and everything is in there. It's housing 110,000 users and

28:02that is also going to be transformed into a web3 store for the 25 plus projects that are building with us because building is one thing getting users is another and we want to help these projects on the journey of cross-pollination of users across these uh platforms. Definitely. Well, I appreciate your insights into blockchain operability, making the crypto transfers

28:26safer, more decentralized, quantum resistance, uh how AI fits in there. Uh and it's it's all going so fast it's hard to keep up. And it sounds like you're really staying on top of it, especially in the quantum realm, which is a whole another world when when blockchain gets there. So, I'm looking forward to seeing how you and your team develop that quantum resistance and

28:47everything else on on layer 1x. And I'll leave a link in the show notes to the platform, the socials, uh the 200page white paper, which I I'm sure people could if they want to know more, there's definitely information in there. Uh thank you so much for your insights, Kevin. All the best with everything moving forward with Layer 1X and would love to have you back on in the near

29:08future. Thanks for having me.