IOTA Foundation launches Shimmer Network for DeFi and NFTs

0:01I'm Ashen Addison from BlockWaist Capital for Investment Pitch Media and today on the Crypto Coin Show we have Dominik Schiener, co-founder and chairman of the IOTA Foundation. Dominik, welcome to the show and thank you for taking the time. Hey Ashen, thanks a lot for the invite. You're very welcome. Uh a lot is going on with your team working on IOTA. I'm excited to dive

0:23into a little bit on the protocol and some of the recent updates that your team is working on. For those who aren't familiar with the intricacies of IOTA and the IOTA Foundation, I would love to start by just getting a high level on sort of the initiatives that your team has built up so far and then we'll dive into the latest details. Yeah, yeah, of course. So, I I I would

0:42personally classify IOTA as one of the OG projects, right? We've been around since 2015 and we launched a project back in 2015 with the with the focus on two um uh like areas, right? First of all, we wanted to prove real-world adoption of blockchain by working with big industry players, uh governments, and so on to really show how crypto um can be applied in supply

1:08chain, in mobility, and so on. And the the second thesis that we had with IOTA was that we actually built a better ledger architecture, right? With the Tangle, which would no longer be based on the blockchain, but would actually be based on a DAG ledger. Mhm. And over the years, obviously, we we built up our team, uh which is hosted at the IOTA Foundation, which is a non-profit

1:32foundation in Germany. And we had certain iterations and evolutions of the projects. And I would say over the last 2 years we had a stronger focus really on making uh like extending our ledger with an execution layer, so that you could actually execute smart contracts and so you could actually have tokenization on IOTA. And that's exactly what we just

1:54recently launched with the Shimmer network. So, I'm very excited to speak about that. Very exciting. And yeah, when I I do also classify as a IOTA as an OG project and I thought they were super differentiated in the space by this this DAG technology. Um and I'm curious if, you know, as the last, 6 7 years as you guys have been growing, um has that technology proven to be, you

2:22know, a a differentiating competitive advantage or something that's better or just different than the regular blockchain consensus that some of these major chains have? Yeah, it's a very good question and honestly, like if you if you pioneer a new piece of technology, right? And we can absolutely say that IOTA was the pioneer of DAG uh ledgers, you get a lot

2:41of hate for it and you get a lot of criticism, right? And I think some of the criticism that IOTA has received over over the years was very valid, right? And we have really worked diligently to address that. Um over the last 2 years, our core focus has been on removing some of those bad parts of the protocol and introducing exciting new ones like tokenization and

3:02smart contracts to really make sure that you leverage the DAG to the fullest. And I would say that we've received a lot of validation from the market by having some of our competitors also launch with DAG ledgers like Aptos, Sui, which which was recently launched, right? Avalanche also based on the DAG. Um so, I think I think the market is is definitely realizing the potential and

3:26we we really want to be one of the leaders, obviously, making sure the DAG um our clear differentiator to blockchain technologies and offer faster validation, faster transaction finality times, and much cheaper transactions. Mhm. Yeah, I love cheap transactions. Um and fast as well and I feel like there's that's still an ongoing issue with some of the major chains. Um so,

3:51it's great to see that some of these other blockchains has sort of took inspiration from IOTA and and utilize that technology. So, that's definitely a a validation. Now, I saw in the recent news that that your team's working on some new layer one networks that are even more innovative. I'd love to hear about those updates on and what your team has built there.

4:15Yeah. Yeah, you you know one of the the the premises of DeFi is break things fast, right? But if you think about a layer one blockchain where you're probably going to host thousands of different applications, you need to take a very different approach. Cuz if you break it and there's a double spend or people lose their money, it's one of the ultimate sins that you can

4:36commit as a team. And so, as a layer one protocol, we want to take a very safe and secure approach to validate every protocol upgrade that we have. And that's exactly why we actually launched the Shimmer network because in our release cycle of new protocol features, we need to have a dedicated network where we can first introduce these exciting new features to test and

5:00validate them in the network so that later on they can actually be upgraded to IOTA. And that is the Shimmer network. So, you can think about it in a similar relationship to Polkadot and Kusama. Um but obviously Shimmer is its own layer one network. It has its own token, Shimmer token. It was fully distributed to the community so it has a fair token

5:21distribution. And right now the network is focused on validating the Stardust upgrade. And so, Stardust includes tokenization so anybody can create their own tokens and NFTs that are secured natively on the protocol. And it basically extends the the DAG ledger with an execution layer so you can have smart contracts, EVM compatible smart contracts, which

5:43obviously means we will finally have DeFi and GameFi and and the exciting new dApps and launch on top of Shimmer first and then later on on top of IOTA. Mhm, that's very exciting and to be able to grow in the defi space I think is obviously important for for IOTA to sort of fit into that ecosystem and especially have the compatibility to the current defi ecosystem

6:07so that you can help grow with the network effect and the necessity for for launching you know a network like Shimmer to ensure faster growth for the protocol um gets me thinking more about you know how is the growth going with you know decentralized applications on on IOTA and you know I I sometimes look into new projects launching and it's not often that I hear about

6:35projects that are launching on IOTA and I'm curious into that growth. Yeah, it's been non-existent because IOTA never had smart contracts so we we had a very different focus until 2020 where we really work with big companies primarily so it was like so like enterprise adoption not really community adoption but with the rise of defi and NFTs we sort of also sort of had the

6:58this introspective right realizing that instead of focusing on working with industry partners ourselves we should rather empower the ecosystem to build on top of our technology right so that's why we had this two-year process to to upgrade our ledger so that the community could actually build. So I would actually say that our ecosystem is only launching now with Shimmer.

7:20And so at the moment there's around 70 dabs already that are signed up so you can go to shimmer.network/ecosystem to see them and obviously it's going to be focused primarily on defi decentralized exchanges lending platforms there's also going to be stable coins and that's basically how the network is going to bootstrap and then afterwards all of those dabs will also come to the

7:43IOTA network. So, I'm very confident that once we launched the Shimmer EVM, you're going to hear a lot more about applications building on top of us. Definitely very exciting. And with the launch of those dApps, how easy, you know, obviously working with enterprises before and then switching to sort of a dApp ecosystem where people are developing on the

8:09network, building out the infrastructure and like the ease of use for developers to come build on IOTA rather than the other blockchain ecosystems, how are you approaching, you know, making it an easy development environment for people to want to build on IOTA? Yeah, absolutely. I think I think there's three core components, right? First of all, it's about tooling.

8:31And we will be able to leverage the Ethereum ecosystem with all the existing tooling that they've built over the last few years, which is really important. We also are increasing our own developer experience efforts, but so we have a bigger team that is really giving direct support. So, so I would say that we definitely have a a great set of tooling and and

8:51libraries and also documentation. The second very important pillar is the direct support that we give. So, we have a program that is called touchpoint. And there, our team of I think close to six people at this point is really focused on basically being a router for our for our dApps in our ecosystem, connecting them with investors, with audit companies, and with other dApps in

9:15our ecosystem so that they can actually start getting support to be successful with application. And the third pillar of this is funding. So, we have a grant program where we're giving out grants for open source applications. We're also working on some interesting ideas to have a liquidity and incentive program, right? For liquidity come over to come over to our ecosystem.

9:37Mhm. So, I would say we we provide a whole range of support for for applications building on top of Shimmer. I would say the main reason why many of applica- of the applications from other ecosystems are excited about Shimmer is because it's a new layer one network, right? It has a new token. Um at the low valuation, so it means that they can get in early. And there's some exciting

9:57opportunities for them to realize to be the first dapp launching on top of Shimmer. Well, very exciting. And with that and sort of test network, but with Shimmer, does it have all of the same underlying fundamentals as IOTA with with the DAG technology? Um or or how does it differentiate? Yeah, absolutely. So, you can think about us taking the DAG ledger,

10:24um adding tokenization to it so that anybody can actually mint tokens natively onto the protocol. Right now, with IOTA, we only have the IOTA token in the protocol. Now, with Shimmer, there's going to be thousands of different native assets. Um in addition to that, we also have more so some more custom functionality, so you can actually sort of program logic onto the layer

10:47one, onto the network. And then in addition to that, we extended the DAG, which is execution layer. So, then you can really have um smart contract chains launching on top of the layer two. So, I would say we take all the good things of IOTA, and we really add new utility functions Mhm. um to it so that people can build applications and and obviously launch

11:08new tokens. Very exciting. And as you continue to grow the the DeFi ecosystem, um and you mentioned about, you know, EVM compatibility. I feel like that's important uh for people to be able to move their assets from these other chains without having to go through some centralized function. Um does that How How does that work where uh say you had some DeFi assets on

11:32Ethereum and you wanted to move them into DFI on on Iota. Do you have to bridge it over or it it there's a Ethereum version of it or how does that compatibility work? Yeah, yeah, absolutely. The the very exciting part is because we have an EVM compatible chain on top of it. It's very easy for applications to bridge over right the same smart contract called is

11:56also very easy for assets to bridge over because we have 20 tokens or the NFT standard and we have a bridging partner which is multi-chain. Mhm. So you will be able to easily bridge your tokens from Ethereum, from Phantom, from Avalanche and so on to to to Shimmer. And then in the Shimmer network you can oversee make full use of it within our ecosystem.

12:24Very cool. And moving into 2023, it is the plan to focus more of the you know the team's power on just growing out Shimmer and and growing out that DApp ecosystem or will there also be updates to sort of the Iota protocol itself? Yeah, at the moment the focus is very clearly on Shimmer because Shimmer is the next version of the of the protocol

12:52that will come on Iota and we need to make sure that the ecosystem grows and that we validate the protocol. Mhm. But I think by by the middle of next year we will then also be in a position to upgrade Iota right? So so then both networks will coexist and sort of also leverage each other and and help each other out. But ultimately we we work on both projects and I think Shimmer has a

13:15more Degen focus whereby Iota is more established and more of a reputable brand working with governments right? We we have very big projects in Europe. And also some projects in in Asia in the US. So so the brands will always have a different focus and a different user group. Very cool. And on the NFT side, I'm curious if IOTA's going to be looking at building out, you know, a

13:42differentiating NFT ecosystem or NFT minting processes and and how what it would look like to have NFTs on IOTA compared to some of these other uh like Solana NFTs or something like that. Right. Yeah, yeah, NFTs is definitely core to our strategy and and there's there's multiple different layers that we can look at. First of all, minting NFTs on IOTA is basically free for token

14:05holders, right? So if you hold IOTA tokens, you can mint NFTs for free. And the only thing you have to pay for is basically a storage deposit where you're paying the network to store your NFT on the on the ledger, right? But this storage deposit can be taken back if you don't need the NFT anymore, for example. That's quite a key innovation to enable anybody to mint

14:27NFTs in a much more scalable way. And in addition to that, we are actually coupling NFTs with on-chain data. So you don't need to store the NFT metadata on IPFS anymore, but you can really store it on the asset itself, which actually makes it much easier to also trace the origin of the asset and do this whole chain of custody. And the third layer that we that we

14:50actually exploring right now is what we would call NFT wallets. So one NFT can actually own multiple other NFTs, right? So you can think about a game character that now owns the armor or the sword. And all of that is part of one package, right? So you can actually create some new unique NFT collections out of that and and sell them. So I would definitely

15:11say that NFTs is one of the main areas where we want to innovate in. Very cool. Looking forward to to seeing that grow out. And are you, you know, looking for applica- uh develop- more developers uh in general or like the current applications and dApps that are on other ecosystems to move into IOTA um or sort of how else can people help grow Shimmer network and

15:36IOTA? Yeah, we absolutely excited to onboard all all builders, right? So, right now we have an EVM chain, so everybody that knows Solidity can uh build on top of um Shimmer. We also have support for WebAssembly. So, if you're Rust developer or Go developer, you can also actually deploy smart contracts in those languages on Shimmer. But, we are sort of agnostic to which

15:58smart contract language you want to use. Um but yeah, like we we want to onboard new builders, new teams. We want to sort support them on this journey to be successful uh entrepreneurs and successful DeFi builders. But, we also we also want to onboard obviously established dApps into our ecosystem. And next year, we'll have much stronger focus on doing events, uh hackathons,

16:21and and giving really key uh core support to to our community. Amazing. Love those hackathons. And what is the best way for for all these different groups to sort of learn more about the ecosystem and and to get started? Yeah, I would say the best uh place is probably our website. So, shimmer.network, s h i m m e r. Um on that website, you will find all

16:44the documentation. And I would really recommend everybody to go on our Discord. So, we have one of the biggest uh crypto communities, right? And they're a lot of fun, and they really also just want to see builders and new people join the ecosystem. So, uh join our Discord, and we will we will build it together. All right, I'll leave those links in the

17:05description box below as well. Uh thank you so much, Dominik, for your insights into this and to hear a little bit more about Shimmer. It's exciting to be you know, at the incubation stage and just ready to explode in in in D5 NFTs. So, I'm excited for your team to continue to grow this initiative and I'm looking forward to seeing it in the near future. So, let's

17:29definitely follow up soon. Yeah, no, let's do that. Thanks a lot, Ashton. Let's do that. Bye-bye.