On Thursday, December 10 a podcast with Alexander Filatov and Mitja Goroshevsky, co-founders of TON Labs, was published on the bitcoin.com. They talked about their experience in the blockchain industry and the role of TON Labs in the development of the crypto developer community. In this article, we share the transcription of this recording with you.
The 26-minute podcast is available for streaming on 4 platforms: the website itself, Spotify, iTunes and Stitcher. The interview was conducted by Dustin Plantholt, CEO and founder of Life’s Touch Media, as well as an author and entrepreneur who also has many other talents.
Dustin: Alexander and Mitja, welcome to the Bitcoin.com Podcast.
Alexander: Dustin, thank you for having us on the show.
Mitja: Dustin, thanks, it’s pleasure.
D.: Alexander, so tell us – who is this company TON Labs?
A: Well, TON Labs was created with the mission to drive adoption of what we call decentralized or distributed backend technologies. Blockchain is a part of that, but we look at it bigger. So that’s essentially the mission of the company. I can talk about it in more detail.
D.: Yeah, if you could! Can you dig it on a bit more?
A.: Sure. The story goes back 3 years ago when Telegram team was developing what used to be called ‘Telegram Open Network blockchain project’, later they named it the Open Network. As we all know the story, they essentially lost to the regulator Securities and Exchange Commission. I personally think it’s unfortunate but it’s a whole different story. So TON Labs was created in parallel to that as a totally independent company which has nothing to do with Telegram except for technical collaboration. It is very simple – we all know that blockchain has a couple of adoption issues and they are related to performance. We call it through-put scalability latency, resulting in UI/UX issues on many applications: no access to the user base, lack of developer tools, etc. TON Labs was created to write what we call TON Operating System which, if you think about blockchain, just as a decentralized micro processor. So TON OS would be on top of that, essentially catering to the developers and users and bringing for users a level of UI/UX which is seen as comparable or even superior to the current centralized systems. It has a backend which brings the benefit of the blockchain into the picture. And secondarily to enterprises and developers who got used to high standards like with AWS or a whole bunch of Feather tools. So the idea is to bring the comprehensive operating system to make it easy to develop and use blockchain. So that’s the mission of the company and that’s how it was created. When Telegram lost to SEC, since we were a company that was a technical partner of Telegram – we did debugging of the network, wrote second implementation of the note, we know how to use documentation, we centrally in the position to launch this blockchain in the decentralized manner together with the other validators. But that’s a story we’ll talk about later.
D.: That’s fascinating. So, Mitja, what’s it been like for you to be in a business with other co-founders? How did you decide who has which responsibility?
M.: That was clear from the very beginning who’s doing what. I came from a technical background, my mission was to kind of make a technical vision for this project and to lead the technical part. Other guys did what they do best. So that was no problem from the beginning, everything was clear.
D.: Now let’s talk about goal setting. From a technical side, what sort of goals do you set and how do you hold your partners accountable for those goals?
M.: Well, in the beginning we laid out a technical road map and we said what we wanted to do on top of Telegram. Of course, we didn’t think then that we would turn into core developers of the network and the protocol, because we thought that’s what Telegram would be doing. Nevertheless, we had to do the second implementation of the protocol, of the note, and that was important for the network’s security, we believed. Then our main focus was to build on top of that tools like compilers, developer tools to allow mass adoption for developers and to make it really easy to use these tools on top of this massive network. And that’s what we did. But then you know what happened – the SEC, and we turned out to be the first supporter of the core protocol development of the network, so we had to go and use our extensive knowledge of the protocol to kind of pick it up and develop from there.
A.: Just to partially contribute to answering your question: we don’t need motivation. You know, the four co-founders of TON Labs are working 24/7 with some breaks for sleep because we think we’re in a big mission here, and the mission is very simple. We think that for the first time in history of decentralized technologies, the technology is good enough to compete with centralized systems. And bringing again the benefits of the blockchain: we think it’s fascinating. And the way we see it, you know, it’s not to compete with the other blockchain protocols, the mission here is to step-change penetration of decentralized technologies and adoption of them. And you know, it is significant percentage of market share from folks like, we all know the names of the big IT-corporations which are dominating the world and sometimes slightly abusing personal data or monetizing it. We believe in the world where users would decide how their data is being used.
D.: But how do you navigate through a world where there’s a lot of regulation that is here, that is coming, that is being created every day. How do you navigate through all that? The question will be to you as well, Mitja.
A.: It’s very simple. First of all, Free TON is the first blockchain to be launched in a decentralized manner. There were 17 initial validators upon launch, we now have 160 and by mid-December we’ll have over 400 validators, making it, as we believe, the most decentralized proof-of-state network. And it’s truly independent validators, there are no exchanges behind, nothing like that. The second point is we did not do any ICO or any token sale. You know, the tokens were issued and then locked in 3 givers for validators, for developers and for partners who would contribute to the use cases and adoption of the ecosystem. There is no legal entity, there is nothing. It’s a community-driven project, it belongs to the community. TON Labs as a core developer took 5% of network tokens upon launch just like, I believe, Satoshi did. That’s good inspiration for us. Otherwise, there is no jurisdictional Free TON now. Obviously, if you go into things like fintech, there are gateways between crypto and fiat, that’s where the regulation comes in. But that’s not what Free TON or TON Labs are about. We’re about the core protocol which belongs to nobody. There is no jurisdictional legal entity here.
D.: Was that agreed upon beginning, Mitja? Did you guys all come together to make a decision that there would be no ICO token launch?
M.: It was kind of obvious, very obvious. We didn’t even speak about that. When we launched, the rules were quite clear for us. We wanted to launch a decentralized network, it was a pity what happened with that SEC story. The software was available, the software was free, the licensing was free – we needed to launch it. It cannot be that a regulator just prohibits to use a software, you cannot do these things, it doesn’t work. And we just proved it doesn’t.
D.: So tell us more about the token.
A.: We look at the token differently versus with the other networks. For us token is a way to reward for free, it will never be sold by the network. I mean, never say never, but certainly, the initial members will never vote for any token sale. It’s a way to drive adoption, to reward developers who develop infrastructure and use cases, to reward independent validators, to reward community builders around the world and for partners. 85% of tokens will be used for partnerships and there are 22 partnerships already. The idea is to create real use cases, because I think that’s what has been lacking in the blockchain space, that people would come from the centralized world and enjoy the benefits of the blockchain. So tokens would be used in exchange for those use cases / user base. And then it’s like a snowball – the more use cases there are, the more users there are, the bigger partners come. So our mission is to build essentially 1 billion people ecosystem.
D.: That’s a pretty large goal!
A.: It’s not gonna be 1 year or 2 years, it’s gonna take a while but we’re not in the rush.
D.: I love goals! Now Mitja, talk about goal setting, what sort of goals do you have?
M.: Well, I look at that as a core developer, and for me it’s important to drive technology further. We are, I think, one of the most advanced blockchains in terms of technology right now. We’re the only multithread blockchain in the world, so it’s really one of the most advanced architectures out there. It has a tremendous potential in terms of through-put and latency and other stuff. It’s a great smart contract platform, but there’s a lot of things we want to do with that – to bring it to the level when a developer uses it as an AWS, for example. And right now we’re no near that in the blockchain space. But in order to get the adoption of the real audience of developers which will bring the audience of people, we need to bring the experience of both the developers and the people to the level that they expect right now from the technology stack. We’re not there and I think that’s the goal.
D.: So how do you then build a community in the crypto space, Alexander? Everybody’s fighting typically for the same people. How do you build your community?
A.: It’s a great question. There are a few things that the community is doing right now. It’s not only me and Mitja and it’s not TON Labs. The role of TON Labs, I would say, is now very small. It, obviously, is still contributing to the core, but in terms of community building it’s now very small and diminishing. We have about 20 vibrant communities in places like South Korea, Mexico, Brasil, France, recently India and China are picking up. There are a few things. First of all, the most important thing is that people see on a daily basis that the claims about decentralization and community-driven project are not statements, they are facts, because people see a whole bunch of contests being released. We recently brough (by ‘we’ I always mean community, by the way) the subgovernance phenomena. Subovernances unite people all around the world on a certain subject or geography. We have 2 geographical pilots in South Korea and Mexico where they are driving adoption and local community. And we also have 9 functional subgovernances on stuff like DeFi, DevOps, DevEx etc. We now, for example, have Free TON Academy Subgovernance to drive education on blockchain. So when people see everyday that this is not just claims, that this is truly decentralized community building, you don’t need to do marketing or PR, it’s organic growth. A friend brings a friend, and they bring a friend… This Mexican Subgovernance came out of nowhere. There was one Mexican guy, and now we have 200 people, a subgovernance, jury, contests, publications and everything.
D.: It must be fun to see everything from your side.
A.: It’s like Wikipedia 2.0, we’re learning from it and hope to bring even more decentralized governance.
D.: That’s fascinating. And Mitja, from your aspect on the development side, has tackling issues been a challenge or has the things been relatively easy to figure out?
M.: Easy? We’re not sleeping for 6 months, it’s not been easy *laughs*. It’s a huge challenge on every front, and not only on the core development but, of course, on helping community, supporting community, and supporting this governance system itself. This governance is happening on-chain. I don’t think it’s ever been done before in this format, because you always have a foundation in the middle which takes a lot of this governance stuff. A lot of decisions are made by a foundation, and we don’t have any of that. We had to create the tools on the fly – smart contracting tools to build and support all these governance decisions on the blockchain. It’s a lot of work and discussions about how to design these things better, how to protect the network from abuses, how do we select the judges, how to keep them honest, how to keep them active, how to vote for specific subjects without people complaining, if they complain – how this feedback loop works. It’s a lot of questions and a lot of challenges.
D.: You said you haven’t slept in 6 months, so we’re talking about a big commitment. You’re on and you never get to turn it off.
M.: Yeah, right. But it’s fascinating to see, as you said. It’s incredible to see how it suddenly goes from zero, from a very depressed situation where this whole project was about to be killed by a regulator and the court decision which, I think about that as if Satoshi would go and ask SEC to launch bitcoin and then SEC said no. Can you imagine that? So we wanted to prove it cannot happen and, you know, it’s just fascinating.
A.: One remark: I personally think that it’s important to not be in Robyn Hood style. The way we’ve done it it’s full decentralization, ultimate commitment to community ownership of the blockchain – no ICO, no token sale. That is a sign of respect to the regulators – you know, we’re learning our lessons, we’re doing our homework and we’re doing it as clean as possible.
D.: I imagine that in many ways it allows you to do the things you’re focused on without all the distractions. I mean, those things can be major distractions.
M.: For me it wasn’t at all a respect for regulators, for me it was just the right way to do things. You know, personally I didn’t think about how the SEC would think about this or that, I really don’t care. But I just think that this way to do things is cleaner, better, more decentralized. It’s a way to get it back to Satoshi’s principles. He didn’t sell any coins and I think this is the right way although you have this proof-of-stake problem because you need a steak to be a security guarantee for the network. Everyone assumes that you need to sell it because if you don’t sell, it’s how you create a value and someone would be afraid of losing it. This was probably the biggest challenge: how do we solve that without selling tokens yet creating a network by the principles of Satoshi. Then we came to the fact that meritocratic token distribution is a great idea. So you exchange tokens not for money, but for merits. We tried to build the whole governance around this idea.
D.: Now walk through the meritocratia. Does it mean performance-based?
M.: No, it’s all run by contests which are community-run. So the community decides. They want to build, for example, a DeFi set of smart contracts and they say: ‘Let’s issue a contest. Vote for this contest and say that winners of this contest get this amount of tokens’. Then the community also select the jury who would vote on who is the winner based on the merit of this submission. And then some community members write this contracts and jury votes for them. The winner gets the tokens based on their merit, on their ability to write the contracts on the Free TON network.
D.: Interesting. That’a a great model. Alexander, did you model any other projects out there or not?
A.: Yeah, it was kind of obvious as well. If you want to do true decentralization and have a community-owned and -built project, then grants are not consistent. The minute somebody makes decisions on the grants – I give it to Dustin and I don’t give it to Mitja – that’s centralized management. We just couldn’t afford that. Se we only have 2 models: contests on things where it’s important to bring creativity, on everything. Everything started from funny things like animated stickers and all the way to bridges with Polkadot. There are contests for everything. If you go to our forum, you’ll be amazed. I don’t think the world has ever seen such an amount of global creativity being unleashed through the contests. And the second model is partnerships – we actually call them collaboration proposals now – where a partner comes and says ‘you know, my platform is doing this and here’s the use case that I could bring to Free TON, I have so many users’. So it gets on the forum, community criticizes, partner makes amends based on the critique and then they eventually get some tokens for the integration as well as KPI tokens.
D.: That’s great. Now Mitja, talk to developers out there, somebody has a crazy idea, some big goals, big expectations. What should a developer look for right now? How do they get going, how do they begin? Talk to them.
M.: Sure. First of all, it’s one of the most capable platforms out there, it’s one of the most interesting platforms as well: synchronous, multithreaded. It’s a really incredible design by Dr. Nikolai Durov and we’re just taking it further and creating tools on top of that which you can take and write contracts. Since it’s a very interesting and different processor, you obviously have to take some learning curve. But it’s not that hard for a good developer to do and we have a great community to help, a lot of documentation and a lot of tools to do that. I’m not saying it’s very-very easy currently, but it’s not that complicated. You can do that in a pretty short period of time and, again, there’s a great community support. You can come and realize your ideas. By the way, you can just go and participate in contests and also, if you’d like to see something we didn’t do, you can create contests of your own. That’s a way to propose something that you think would be great to build. If community says: ‘wow, this is really great to build’, then you can participate in the contest and win or not.
D.: And Alexander, how do we learn more about TON?
A.: There is a lot of information available. We have, for example, one of the subgovernances which is called the Wiki Knowledge Base. There is a lot of information: technical, use cases, information on the ecosystem etc. It’s in 17 languages right now. If you go there, you’ll see a lot of information. In our community, we have a whole bunch of channels, of different social networks, we have films being shot, we have weekly news. As I mentioned, the latest thing we’re doing is the Free TON Academy. We also have a partnership with Africa Blockchain Institute because they need the information which the developed countries are full of. We take education seriously and pay a lot of attention to this.
D.: Alexander and Mitja, thank you so much for sharing your story on the Bitcoin.com Podcast.
A.: Thank you, Dustin. It was a pleasure.
M.: Thank you, Dustin.