Today I’m speaking with Ahmet Ozcan, Co-founder and CEO at Semiotic Labs, one of the six Core Dev teams currently working on The Graph. In addition to their work as a Core Dev, the team behind Semiotic Labs recently launched Odos, an automated market maker path-finding algorithm that enables retail and institutional traders working in crypto to optimize order routing.
During our discussion, Ahmet explains, in simple terms, what Odos is and how it works, along with providing some incredible insight into what Semiotics is working on at The Graph, and why he left an impressive career at IBM to pursue entrepreneurship and Web3. and his exciting long-term vision for The Graph.
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Ahmet Ozcan (00:00:20):
But I think the listeners should think about how Graph protocol is designed. Basically, it’s a very flexible, very interesting protocol that will allow people to build new type of applications. And that’s why I like this Google analogy, that there will be applications built on Graph in the future that we don’t even envision today.
Welcome to the GRTiQ Podcast. Today I’m speaking with Ahmet Ozcan, co-founder and CEO at Semiotic Labs, one of the six core dev teams currently working on The Graph. In addition to their work as a core dev, the team behind Semiotic Labs recently launched Odos, an automated market maker pathfinding algorithm that enables retail and institutional traders working in crypto to optimize order routing.
During our discussion, Ahmet explains in simple terms what Odos is and how it works. Along with providing some incredible insight into what Semiotic is working on at The Graph, why he left an impressive career at IBM to pursue entrepreneurship in web3 and his exciting long-term vision for The Graph. I started the discussion with Ahmet by talking about his background growing up in Turkey and moving to the U.S., and how he got started at IBM.
Ahmet Ozcan (00:02:07):
Sure. I think I have a rather unusual background compared to your previous podcast guests. So I studied physics in undergrad and did a PhD physics following that. And after that I joined IBM, IBM Microelectronics and worked as an engineer for six years to develop CMOS technology. So that was a great experience to work in a very large team and delivered products under strict deadlines and constraints. It was amazing in the sense that you always had two years to deliver very stringent requirements and we never knew if it’s going to work. So it was always mission impossible, but thanks to this great team, we always innovated and solved problems and made it work.
So that was a great experience for a while, but after six years I got tired of doing the same thing. Then I transferred into IBM Research and did a little bit of career change. I went into AI because AI was really becoming important and deep learning was taking off. So I moved to California to Almaden Research Center and started managing a team of AI experts who are developing new algorithms and trying to solve the big problems in AI. So that was a great fun time where I delved into even neuroscience a little bit, cognitive psychology, AI, computer science.
After doing that again for five, six years, I decided to leave IBM and pursue what I want to do on my own. And that’s when Semiotic was formed in 2020.
Well, Ahmet, you might be the first guest that’s got a PhD in physics that I’ve had the opportunity to speak with. I’m curious, and I ask this to a lot of guests when they have diverse backgrounds, if any of that learning in physics, the way it works and some of the studies and expertise you developed there, helps you in understanding crypto or blockchain and web3?
Ahmet Ozcan (00:04:02):
Never thought of that, but I think all these unique experiences and the education I received certainly influences how I look at things. But I’d like to understand things and go deep. Perhaps that’s one thing I can take away. For example, all these cryptocurrencies and the mechanisms underneath, that’s super interesting for me to really understand and go deep into the mechanisms.
So, Ahmet, you grew up in Turkey. What was the experience for you growing up in Turkey and then as you mentioned, moving to the United States?
Ahmet Ozcan (00:04:37):
Yeah, I guess I grew up in Istanbul, so my experience was very similar to anyone who grew up in a very large city in that respect. But in terms of education and competitiveness, it was a very competitive experience. I’m comparing to my children right now. For example, for even high school, there’s a national exam. If you want to go to the top schools, you have to study and really get top scores to go to the best schools. And after that, there’s a national exam for college applications. So you really need to know what you want to do on the last year of your high school. You can’t just choose anything and figure out later. You have to be prepared and take this exam and do well. You have one shot. Typically, if you don’t succeed, you don’t get a second chance easily.
And after that of course, everybody’s trying to go to U.S. to do a graduate school, get a scholarship. So I think my early life was constantly studying for these exams, always trying to be the best. Competing, competing, competing. So I think that made me very competitive and always looking for challenges. So that’s I think my experience, adult experience. But right after college I moved to U.S. So most of my, I think, experience past more than 25 years has been in the U.S. in the East Coast and in California.
So that’s a lot of time. But I wonder if you have a sense of how web3 and crypto might impact a country like Turkey? Do you have a sense for what the people there think about it and their interest level in it?
Ahmet Ozcan (00:06:09):
Yeah, I was there actually just last week, I was on vacation. I was amazed to see all the crypto ads, first of all. So it’s everywhere, starting at the airport, on the bus stations. I think Turkish people love crypto. There’s a huge community. And I think in the short term, DeFi could have a significant impact because of the financial independence, censorship resistance, and especially a hedge against inflation. The official inflation numbers in Turkey are like 70%, more than 70% right now. It’s crazy. So people really look at crypto as their savior and they want to I think, take charge of their own financing and banking, especially the younger people.
But however, I’m more excited about the longer term impact of web3 for a country like Turkey because I think the tokenization of assets, even real estate or other financial assets is really critical to capitalize this shadow economy. In developing countries like Turkey, there’s a huge shadow economy. It’s not all illegal, let’s call it extra legal activities. Sometimes immigrants move to big cities like Istanbul, they just go in a land, they build a house, they don’t have the deed. They are very entrepreneurial. They start businesses making money, contribute to the economy, but they are in the shadow. They don’t have the capital, they can’t get a loan because they don’t have a deed. So this is very, I think similar in countries like Turkey. Recently reading a book called The Mystery of Capital; I really recommend it to everyone.
So I imagine that with web3, tokenization of assets can really help to bring all this capital, all these people who are maybe struggling, into the financial system. But it’s going to be the DeFi, not the traditional finance. And there is I think, a huge opportunity for the governments, the governments of Turkey for example, embrace that, and bring that extra legal economy into the legal system. And have the blockchain as, for example, the ledger of all these, the real estate example I gave you, but all the other assets, the tokenization and the payment methods that people can use.
So I’m really excited about that long-term aspect. I think in the short term, people are just trying to make money. Most of the younger people in Turkey, that’s how they look at crypto. But they are becoming crypto native throughout this experience, so that’s the beauty of it. And in the longer term, hopefully we can move into this new type of digital economy built on web3, and that can have a tremendous impact.
A theme that’s come up on the podcast multiple times, and you just reminded me once again of it, is that certain regions of the world, a place like Turkey for example, where inflation is astronomical, it’s hard for people in the United States to even understand or comprehend that. But those regions really understand the use case far better than people in the United States because maybe it’s not as relevant for people here in the United States. Do you agree? I mean, as you’ve traveled the world with your background in Turkey, do you think the U.S. is maybe not fully comprehending the impact of this industry because we take so much for granted here?
Ahmet Ozcan (00:09:29):
Yeah, absolutely. I mean, think about the payment methods. It’s relatively easy here to open a bank account for an average citizen. And you can use many methods like Venmo, PayPal, whatever you have, with your cell phone, send payments. It’s easy for an average U.S. person. But when you go to these other countries, people can’t open bank accounts, they don’t have bank accounts, for example. It’s very difficult for them to send money even to their friends, let alone overseas.
So I think you’re absolutely right. Crypto is really essential and it’s a lifesaver for people in the developing world. And in U.S., people are just very comfortable. They don’t understand why would I need this type of payment or currency? They just don’t get it. They think that digital banking is already here. What is the point of crypto, right? And you can see it in even Economist and all the mainstream media. This is the typical look at crypto.
Ahmet, I also want to ask you about this idea of tokenization. It’s come up a couple of times on the podcast, but I’ve never asked a follow-up on it. And of course, anybody that’s on Twitter or reads the news understands that there is this ideology that at some point the world will be tokenized. All these different things will be tokenized. For listeners that don’t quite comprehend what that means, I mean they understand GRT, they understand utility token. But when you talk about tokenizing real estate, when you talk about tokenizing other things, what does that really mean?
Ahmet Ozcan (00:10:56):
Well, I think there’s fungible and non-fungible tokenization, right? And if we just think about fungible type, you can even think about stocks. The stock, it represents the shares of the company and imagine now tokenization of the stocks. But rather than only a group of people in U.S. who can invest in these stocks, people globally can invest in these tokens, which represents stocks. So you can tokenize anything.
And in the future, I think everything will be tokenized. Even products will be tokenized and financial assets or real assets will be tokenized. They will be basically represented digitally by either unique non-fungible tokens or fungible depending on the application. And that will give people a way to have ownership, sometimes partial ownership. For example, if you want to invest in real estate in California, the average price of house is like two and a half million. If you’re not a millionaire, good luck investing in real estate. And there are of course derivatives and other financial products, but that’s not like investing in a house. Imagine the house is represented by a token and you can own a fraction of that. Maybe you can afford $10,000, but you can still collect some percentage of the rental income from that house.
So I think I look at tokenization as a new way of representation of assets. And on a common shared ledger where everyone can access, it’s permissionless and it will be inclusive I think, for the whole world.
So Ahmet, I want to go back a little bit to your time at IBM. And IBM is a huge multinational company, been around for a long time and there’s a lot of stories and mythology if you will, built around the IBM brand. What was the experience like for you working at an institution like this? And maybe some of the things that you learned that a lot of listeners will never have the opportunity to experience for themselves?
Ahmet Ozcan (00:12:53):
Yeah, you’re right, IBM is a huge brand. It’s hard to describe. Usually if you ask an average IBMer, “What does IBM do?” people will pause for a second because it’s so big and there are so many business units. When I was doing Microelectronics, I would say, “Well, we make server chips.” Well, they don’t anymore. So they divested that business. So they always follow high profit margin businesses. But nevertheless, it’s very, I think IBM is a great institution with great values. And it’s a great, I think education. It was a great education for me to be at that company and see how a large organization creates a culture and how it does business and the organizational aspect has been very, I think, interesting for me.
Other than that, I think every business unit in IBM would be very different. IBM Research especially, where I came from, is a unique place where you have a few thousand top-talent researchers, the best in their field. And it’s super fun to work in an environment like that. It’s like a playground and you have access to all these different talents. You have quite a bit of freedom to pursue what you want to do and publish your research and present your research in academic conferences. So it was probably a very unique experience and only a certain percentage of IBMers maybe enjoy that sort of freedom and fun.
But I’m still speaking very highly of IBM, all the people at IBM. Usually people make the company and you can ask any IBMer, we always say that the people are great at IBM because of the culture that the company sets and how they hire people.
A lot of the technology companies in the United States are relatively new when you compare them to IBM. I mean, IBM’s got to be one of the first movers in the technology age, so to speak. When you think about an institution like IBM that’s been around for a while, how do you think they adopt or adapt to web3 crypto environment? I mean, can they do it? Are they preparing for it? What’s your sense for that?
Ahmet Ozcan (00:15:09):
Yeah, so companies like IBM, they are usually late to new disruptive technologies. If you think about the mobile business or the cloud, IBM was always late and trying to catch up fast, but they have the resources to catch up fast. So, IBM went into blockchain quite early on and has done great work really, some of the early smart contract work. But in the end I think they missed the whole point of decentralization. It was all about private blockchains for IBM. And then it wasn’t clear that what is the advantage compared to a database? And people were saying that, “Hey, it’s just a glorified database. What is unique about blockchain?” Because it wasn’t a public decentralized blockchain.
So I’m hoping that they will understand, but I think it boils down to regulations and compliance. A company like IBM has to be super compliant. And since web3 and crypto by definition involves tokens and assets like financial assets, regulations have to be there so that IBM can get into it without being incompliant. So I think that is the bottom line. But I believe that IBM will catch up in a few years, we’ll see. Just like Google started to talk about web3, and IBM will, I think will start talking about web3 very soon. And yeah, I’m looking forward to that point actually.
Ahmet, what’s your opinion on this question of the next generation of talent? So I hear you talk about your time at IBM and as you said, there was a lot of high-performing, highly intelligent people on some of these teams. I know that a few of those really high-quality people left and founded Semiotics. So do you believe based on your observations, that the next gen of talent, people that are building for the future are actually leaving legacy web2 positions to build in web3?
Ahmet Ozcan (00:17:04):
I think so. There are many reasons for that, but in the past couple of years I’ve seen a huge turnaround, people leaving these traditional companies. IBM is maybe a very old one already, not very popular among the young people. People are even leaving Nvidia, Google, Facebook, et cetera to join web3 companies. So I think for talent, especially at these large institutions like IBM, is looking for the next thing. They don’t want to miss the next generation of internet.
And I hear that a lot. Everyone is curious. You were at Graph Day too, right? I met so many people who just came to learn more about web3. They had no connection to Graph, they just wanted to be there, absorb whatever they can. And they were coming from different companies in the Bay Area. I was really surprised to see even how they became aware of it and how they took time from work to get there and hear what’s going on in web3.
During your time at IBM, you mentioned you moved into artificial intelligence and machine learning. And for listeners that don’t know, Semiotic Labs has a real focus on machine learning, artificial intelligence. And there’s been a prior podcast with one of the co-founders there, Sam Green, so people might be familiar with that episode. How would you explain your personal interest in AI? You mentioned when you moved into it at IBM, it was something that drew your attention, drew on your passion. Why?
Ahmet Ozcan (00:18:32):
I think my interest was driven by my desire to understand the human brain and intelligence. And it’s like what Feynman said, Richard Feynman the great physicist, “What I can cannot create, I cannot understand.” So I was really surprised that we know so little about the human brain and what human intelligence is. I thought that AI will give me a chance to understand that by trying to build something that mimics the human intelligence. So that was my motivation. I heard that from other AI researchers at Google and Facebook too. So I was really surprised that I’m not the only one, but people are really trying to understand what intelligence is and understand how the human brain works. And that’s still my passion to this day.
So what do you make of some of these pop culture, conspiracy type theories related to artificial intelligence, right? So it doesn’t take people very long if they’re Googling online or if they’re listening to various podcasts to hear that there’s a dark shadow of AI, that robots will take over the world, that a machine learning will take over your job. I mean, all of these different conspiracies. Do you have any concerns about that?
Ahmet Ozcan (00:21:20):
Well, I think I have, I’m more concerned about the slow pace of AI technology. The current technologies are basically like any other software technology that improves productivity. And so of course some jobs disappear or shrink, but new type of jobs and businesses emerge. So currently this is the state of AI. For example, data labeling services like deep learning works with data, labeled data. There are companies now and thousands of people labeling data for training machine learning models. So I think some jobs disappear. New jobs appear.
Recently, we’ve seen more generative AI applications such as product design, AI systems designing or generating interesting designs. It doesn’t mean that the designers will lose their jobs. They will start working with AI systems to be more effective, to be more creative. So I think it’s going to improve creativity. It’s already impacting science. All the physicists that I’m in touch with, they are now using machine learning rather than the heuristic models. So AI is making a huge impact in natural sciences to actually solve problems.
But in terms of the old hype and intelligence, like super intelligence, I’m still skeptical. We are not there yet, because if you think about the current deep learning based systems, they are just programs that need an input to generate an output, right? Unlike the human brain, which our neurons are constantly firing, it’s not waiting for an input. There’s always activity in the brain. And actually the sensory input just modulates that activity. It’s very different than the AI systems which just need an input and they produce an output. And also the current systems, they don’t have memory systems. Humans have very extensive memory systems, long-term memory, short-term memory, et cetera. That’s really important to form world models and have episodic memory to remember what we have learned. So we’re not there yet.
And I’m actually surprised that since I started working on AI, it’s been like seven years, the progress has been slow. I was more optimistic. Now I’m seeing that, okay, there’s a lot of improvement in conversational AI, image recognition, all these individual tasks. But there is no fundamental breakthrough in terms of intelligence discovering something new. And I’m still seeing similar proposals from the established figures about adding memory to AI or modular systems. So I think people can relax and maybe start thinking about how AI can improve their lives and the current technologies. And it’s going to be at least five to 10 years, I think we see another big breakthrough.
This is a terribly unfair question, and there’s books on this, there’s podcasts on this. So I don’t expect you to solve it in just 20-second answer, but my question is highly theoretical. Do you envision a future where AI is capable of what we understand about human consciousness? I mean, is that a future that you even think is possible given what you understand about this technology?
Ahmet Ozcan (00:24:36):
Yeah, I think it will be possible. I see consciousness as an emergent phenomena. I think it will just emerge. There is a consciousness in even human brain is not well understood to neural correlates. There are theories about it, but no one really has a good theory, but it’s an emergent phenomena. So I think once we have these modular systems, as I described to you, that are maybe not just waiting for an input but always active and they’re modular, they have memory systems, some type of consciousness may emerge from that system. And maybe it’s just about being aware of itself. There are many descriptions of consciousness, but that will be very interesting to see.
Well, I appreciate you taking a stab at that. And again, I understand that that’s a really difficult question.
The question I think I was most excited to ask you about as I researched you and looked into some of your background, is this passion you have or interest you have in entrepreneurship. You seem like the type of guy, I’ve met you personally, so I can speak to your character and intellect. Super smart guy, you were at IBM, you were doing important things there. And yet within you this interest to be an entrepreneur. To leave what might be the safety and the lack of risk, I guess, working at a large institution and performing well, to going out on your own. So what drew you to being an entrepreneur and what drives that passion?
Ahmet Ozcan (00:26:07):
I think many things, but the most important thing is to make an impact. And when you’re in a very large company, you have to be either a hundred percent aligned with that company’s mission and values and where they want to go. Otherwise, you have very little chance of influencing that. So at some point after 14 years maybe, I decided to leave and really pursue my own dreams, my own direction, and have an impact, a positive impact, leave a mark behind me. And this is probably the main reason.
And of course, being in Silicon Valley surrounded by many startups and entrepreneurs around me that really triggered. If I wasn’t probably in California here meeting all these interesting people, it would’ve taken a little bit longer, but the time was right. And in terms of risk-taking, I think there are certain periods in people’s life, either right after college or even without finishing college or after a certain amount of time when you have a family and you reach a certain point where you can take risk again. So for me it was a little bit delayed. I’m again, not a typical very young entrepreneur. But on the other hand, I think the maturity and the experience is very important, especially if you’re a CEO of a company and managing people. So I think that’s a big plus to have that experience.
When I get the opportunity to talk to entrepreneurs like yourself on the podcast, I always like to ask them one or two lessons they’ve learned about entrepreneurship in the form of advice for listeners. The more episodes I release, the more this podcast starts to sound a little bit like an entrepreneur podcast, a bunch of people starting off in web3. And I’m just curious, for listeners that are seeking advice from fellow entrepreneurs, somebody that’s out there doing it, are there one or two lessons you’ve learned that you could share about what it takes to be successful as an entrepreneur?
Ahmet Ozcan (00:28:04):
Yeah, a couple of lessons. One is staying flexible. I know persistence is important. So people believe in certain idea and they want to commercialize that and make it work. But you need to stay flexible and always listen to the customer and look at the market and solve problems that matter. So that was really a key lesson for me, and that’s why our company pivoted multiple times until we found I think, our core mission.
The other thing is always get out of your comfort zone. Do something new. Of course, drawing from your experience is important, but I always found that when we moved into new areas, it triggers maybe some type of creativity.
So let’s talk a little bit about Semiotic. As I referenced earlier, I interviewed Sam Green, a partner of yours. And so for listeners that have already listened to that podcast, we’re not going to go back through and retell the Semiotic origin story. But for the sake of listeners joining us today, I wonder if you wouldn’t mind just giving an overview of some of the things that Semiotic is working on at The Graph as a core dev?
Ahmet Ozcan (00:29:11):
Yeah, sure. So in the past year, I think we can summarize what Semiotic is doing as intelligent automation to reduce the friction in The Graph protocol and basically applying different type of AI and optimization technologies.
So one of the things that Semiotic is working on is query price prediction and dynamically adjusting prices. Indexers today need to basically price their queries individually by looking at the shape of the queries. And that’s very difficult for a human being to do when you have billions of queries in the network and all kinds of different queries are coming. So Semiotic Labs have been working on and recently delivered actually a solution that can predict the price of a query and also dynamically adjust the price of a query depending on the market conditions to keep Indexers competitive in the market. So automating query pricing is going to be very useful for Indexers and also to increase the efficiency of the whole economic system.
The other big area we’re working on is related to cryptography, and this is the zk-SNARKs. I think Sam Green, your previous podcast went deeper into the zk-SNARKs, so I’m not going to go deep into explaining that. But recently on Graph Day there was a major announcement, basically Edge & Node and Semiotic Labs, the cryptographers in these teams, they developed a new type of SNARK that is a lot more efficient than existing solutions.
SNARKs is very important for two main applications in The Graph. One is micropayments. There are millions of micropayments that need to happen because every query is priced individually. So doing this on-chain is prohibitively expensive. So this is a scaling problem. But if you are handling this off-chain, then you need to worry about verifiability and what if there’s a dispute, how to resolve that? So SNARKs bring a mathematically, basically guaranteed that the computation is verifiable. And the existing technologies, SNARK technologies were not sufficient in terms of the performance requirements.
So the team came up with a novel method that reduces the size of the proofs, more than 10,000. So we are talking about kilobytes of proofs for millions of transactions. And also they reduced the time for the verifier, therefore making SNARK, the cost of SNARKs really love to apply in this micropayment context. And the next challenge that we are working on is verifiable queries. Verifiable queries is really important. How do you know when an Indexer provide you with an answer that is the accurate answer? So again, using SNARKs, we can verify that. And the challenges are a little bit similar to the micropayments, but again, there are different sorts of challenges and existing solutions again, did not satisfy the needs. So the team as again came up with a solution with a new SNARKs called Shellproofs for verifiable queries.
So this is going to have a huge impact, especially when Ethereum 2.0 happens and EIP Four Fours hopefully happen. EIP Four Fours basically is a new proposal to get rid of the requirement to keep an archive note beyond one year. So when that happens, still there is a need to fill the gap. If you have a query that is older than one year, I think Graph will be the de facto solution for that, thanks to the verifiable queries that we will introduce. So I think the Shellproof SNARKs that the team developed is going to have a huge impact for the whole Ethereum community to fill the gap of EIP Four Fours. So that’s really I’m excited about.
Moving forward, in terms of the AI part of the team, we are shifting our focus on crypto economic simulations. That’s a really important area, as you know, protocols are constantly making changes to the mechanisms to improve things. But usually, you find out after you make the change and sometimes things don’t work out well you envisioned. So simulations can help with that and we can simulate these mechanism designs in advance using very accurate crypto economic models of the whole protocol. And this is something that Semiotic Labs is driving, basically capturing the essence of The Graph protocol, the smart contracts and all the details in great fidelity. And then using multi-agent simulations, especially reinforcement learning to understand the impact of new changes and testing out different kind of scenarios.
So hopefully within next year this work will be completed. And this Graph simulator will be an extremely valuable tool for the whole protocol to testings and to simulate new ideas, and before proposing changes to the problem.
Well, as I’ve mentioned before on the podcast, the contributions of Semiotic Labs are incredible, and that was an impressive overview there. I appreciate Ahmet, that you would provide that.
You mentioned Shellproofs, that was an announcement on Graph Day from Zach Burns, another core dev contributor over at Edge & Node. And there’s a lot of buzz about that particular announcement. I’d also like to get your opinion just on some of the other news and announcements from Graph Day. I mean obviously, Shellproof, you just discussed there, that’s a big one. Anything else catch your attention?
Ahmet Ozcan (00:34:51):
Yeah, it was, I think a day full of announcements, big announcements. And one of them is the move to layer-2. I think this L2 migration is a big one. It’s going to reduce the cost by orders of magnitude for especially Indexers. So that’s a big change for me.
And the other one is the announcement of sunsetting, the hosted service. We’ve been waiting for this day as you know, we are a decentralized protocol. So the hosted service will finally sunset. In Q1 2023. So that’s a big news because that’s going to drive a lot of activity and revenue for the decentralized service, decentralized network. So that’s huge. And coupled with that, layer-2 migration, I think Graph protocol is moving in the right direction and very fast.
I’m really looking forward to next year when there are not only hundreds of indexes, but thousands of Indexers and tens of thousands of subgraphs and a very active query market. So that all the things that we’ve been working on and all the other core devs are working on, will be applied, such as the query pricing for example. So I’m really looking forward to these big changes that are coming in the next six months.
Well those were impressive announcements and I share the same optimism and excitement as you do. Another big announcement that came out of Graph Day of course was one of the core dev teams Edge & Node announced a new web3 browser called Geo. And this is kind of becoming commonplace in the sense that core devs, while they’re making contributions to The Graph, are also running some of their own projects.
One of the things that the team at Semiotic recently launched is a new product called Odos, that’s O-D-O-S. I was wondering if we could spend a minute here and just talk a little bit about that? Again, this wasn’t announced at Graph Day, but it was something that Semiotic Labs has launched and announced on its own. What is Odos? And I’m curious where this name came from?
Ahmet Ozcan (00:36:52):
Yeah, let’s start with the name. So, Odos is a Greek word for route or way, because Odos is a smart order routing solution for decentralized exchanges. So it’s a DEX aggregator currently. So it came up because at the core, Semiotic Labs is an optimization company and smart order routing, when you have hundreds of DEXes, hundreds of assets, is a very difficult problem. Because all these automated market makers make the liquidity very fragmented. So if you want to swap one token with another, there’s a danger of running into slippage because liquidity, especially for tokens that don’t have enough liquidity, that’s a big problem. So, Odos is solving that problem by splitting and routing your order and sometimes using intermediary tokens to give you the best rate, so saving you money. It also introduced a new feature of swapping multiple tokens into one, in one shot, in one atomic transaction.
So, Odos is the first product of Semiotic Labs. We are quite excited about that. And I think in terms of the relation to Graph, let me tell you a little bit about that. One of the new features that we will release is a transaction history feature. If you use any other DEX aggregator, you will find that typically users come, connect their wallets and after they do a transaction, they leave. There’s no account, there’s no portfolio. We will introduce a transaction history feature where people will be able to track their historical transactions when they connect their wallets, it’s all permissionless, et cetera. But this is going to be enabled by a subgraph because Graph is the most efficient way to achieve that, providing historical transaction data very easily thanks to The Graph.
So again, it’s great that yeah, some of these core developers like Semiotic, Edge & Node, are now not only working for the core Graph technology, but we are also using The Graph protocol for our own products, because we are intimately familiar with The Graph and we know what it can do for us.
So I want to break down Odos a little bit and some of my listeners are not participating in Defi, and maybe they don’t fully understand it. But as I understand it, Odos is a solution for users who want to sell a token that they own. But because of some of the things you said there about the fragmentation of all these decentralized exchanges, the way to do that so that you don’t lose value in the process is difficult. So Odos comes along and what? It automates it or it creates the most efficient path to ensure that there isn’t a loss of value when you try to swap one token for another? So again, correct me where I’m wrong, I’m just trying to break this down for listeners that aren’t familiar with some of these things.
Ahmet Ozcan (00:39:44):
Maybe we can make an analogy. Imagine you land in a foreign country, you want to exchange your dollars for yen and there are multiple exchange offices and they have slightly different rates. So we are in a similar situation. But with the decentralized exchanges, you want to swap your token, let’s say, USDC with GRT, where do you get the best rate? So, Odos finds the optimal route to go through many different DEXes. So it can split your order and it can even go through other intermediary assets before giving you GRTs.
So that is a difficult optimization problem because it’s basically a shortest path problem. You’re going through many different assets and splitting in arbitrary fashion into different DEXes. And trying to do that in real time is really challenging. So we developed our own proprietary algorithm to do that very efficiently, under a second, and provide the optimal route for your order.
That’s a very helpful analogy. And I want to encourage listeners that want to see this in action, you can go to Odos.xyz, so that’s O-D-O-S dot xyz. And you can actually see a conceptual representation of this order route plan. It’s incredible stuff and I’m super excited for the team at Semiotic Labs and Odos to see what this can do. What does it say about The Graph that a team like Semiotic launching products goes back and uses The Graph, in this case a subgraph for their product? I mean, what does that say about I guess the utility and the necessity of The Graph in a DeFi web3 environment?
Ahmet Ozcan (00:41:23):
Well, it says a lot because we know that Graph is the essential query layer of web3. So that is a given. So when you’re looking for a solution in terms of especially historical data, getting data easily, accessible for your apps, Graph is the solution. So when you have an application of a product, for us, it didn’t take long to figure this out. But it’s really important that I think people working in that community, in Graph, using your own product, right? It’s like eat your own dog food kind of saying, it applies here too.
So it’s really important that being users of The Graph, and we are also running an Indexer that gives us a very direct experience of what works well, what needs to be improved. And you can see that probably with other core developers as well. We are intimately familiar with the product. We know the shortcomings. We are improving things every day. But we know the strengths, so we can tell this story to other people who want to use Graph very easily.
So Ahmet, as someone who’s in the belly of web2, being in Silicon Valley, I’m curious, when you’re out and about, when you’re talking to colleagues back at IBM or networking events, how do you position web2 in contrast to web3? Because like I said, you’re right there at the heart of web2. How do you separate these two and explain the differences?
Ahmet Ozcan (00:43:30):
Yeah, I think I always start with the decentralization. web3 is the decentralized internet and the key difference is this rich incentive design space based on tokenomics. In contrast to the dominant business model of monetizing user data, which incentivizes user retention at any cost. So I always go to that and the incentives. So everything is orchestrated by tokenomics in web3. That doesn’t exist in web2. I think that was the missing part and that always resulted in the wrong incentives. And we know where it’s leading to with all the social media companies, the misinformation and how these companies are exploiting user data without any regard to privacy, et cetera.
So I usually talk about web3 to other colleagues and people in Silicon Valley, I think in these terms. Decentralization is essential and what it means to have basically a new type of incentive design based on tokenomics.
So let’s go another step then. You’ve explained this to a friend or a colleague. You’ve said, “Hey, this is how web3 is different. This is why I’m out exploring it and building in it.” Then you get to this point where you have to explain Semiotic Labs going to work as a core dev on The Graph. How do you explain what The Graph is, then?
Ahmet Ozcan (00:44:57):
I still use the Google of blockchains analogy. I know it’s imperfect, but it works really well. And for people who are more familiar with web3, I talk about the query layer of web3 of course. But I think that there is something true about the Google of blockchain’s analogy. We know that everything is not exactly one-to-one, indexing data, making it easily available to applications is of course the core business in each case. But I’m imagining The Graph becoming much more than queries in the future, just like Google. Google is much more than just a search today. Google expanded into a huge business. They have thousands of AI researchers, they have many different products. Maybe they all started in a way that is still related to the data on internet and the search, but they become much more than that.
So I believe that The Graph in the future will be going in very different directions. The query will be always there in the core, the core business, indexing the data. But I think the listeners should think about how Graph protocol is designed. The concept of subgraphs, for example. Subgraphs are very general purpose programs. You can write anything in a subgraph. It doesn’t have to be just a database. It could be analytics, it could be an AI subgraph. Subgraphs are too incomplete. And who is indexing the subgraphs or running the subgraphs? Indexers.
Indexers, we have hundreds of Indexers today. In the future there will be thousands. Now imagine you have thousands of these decentralized compute resources that can work asynchronously. So unlike miners doing all the same thing, these Indexers can run different subgraphs, they can do different type of computations asynchronously. And basically it’s a very flexible, very interesting protocol that will allow people to build new type of applications. And that’s why I like this Google analogy that there will be applications built on Graph in the future that we don’t even envision today. But thanks to the founding team who designed everything very flexible and open-ended, this is going to be possible.
So I think that’s why I always go beyond the query layer because some people say that, “Okay, well the blockchains are all public. I can access data.” I know it’s difficult, but there is much more than just making data easily accessible. I think there will be amazing new applications coming out of this protocol.
Well, I haven’t explicitly made this point on the podcast before, but I’m going to, now that you’ve reintroduced it. And it is this idea that to your point, The Graph is much more than indexing and querying for web3, it’s a platform upon which people will build in web3. And it’s come up multiple times and anybody that wants to go find those Easter eggs, if you will, in prior episodes, start with the Brandon Ramirez episode where on a couple of occasions I can recall him stating this very clearly that The Graph becomes a platform. Given that incredible perspective, how important do you see The Graph for web3? I mean, can web3 exist? Can it fully evolve in the world without The Graph?
Ahmet Ozcan (00:48:25):
Well, I’m probably biased and I will say no, right? It’s essentially in my mind because I don’t know any other better solution today. And also, the commitment of decentralization is key. There might be a centralized alternative tomorrow that can provide data. We know there are so many centralized points in web3, but I think in the end the decentralization will win. And everything we are doing today working on to enable that decentralization will make a huge difference couple years from now.
This is even like the verifiability, the mathematical proofs, the SNARK part is, for example, essential for decentralization. So there are many things that are in the works today that will make decentralization possible. And at that point, once we have a high performance decentralized network, it will be unstoppable. And at that point I think there won’t be any other viable alternative because of all the traction and the network effects that this protocol will see.
I want to ask you just a couple final questions. The first one being about your experience as a core dev within The Graph community. Do you mind just sharing with listeners what that experience has been like for you? I mean, you’ve worked at a large institution like IBM, you mentioned culture and working and organizing the activities of people all across the world. What’s it been like for you to work within The Graph community and alongside the other core devs?
Ahmet Ozcan (00:49:57):
It’s been great, honestly. It’s like Oceans 11. We have I think six core developers right now. Each core developer team comes with really unique skills and very complimentary skills, and there is a great deal of respect between these core developers. We’ve been now gathering at different R&D events, all of these teams together. There is a lot of respect and this translates into really a nice working environment. So we are all different companies and as we discussed, some of these core developers have their own products. But in the end, we are all united for the same mission, making Graph protocols successful. And all our values are aligned in terms of the ethos of web3 to decentralization.
So it’s really interesting to see. I think this will be even studied in business schools as a case study, that rather than hiring a bunch of developers growing one single entity, just pulling together different teams, different companies for one single mission. So this is very similar to actually my experience more than a decade ago at this IBM Semiconductor Alliance where we worked with 10 different companies during that time. IBM wasn’t the only one developing, but it was the core team. We had Samsung, Sony, many others, like Asian companies. In the end, thanks to this diversity and different talents coming from different teams, we were always delivering, solving problems. And I see the same thing here with these different developers coming all around the world, different companies, people bring unique skillset, unique experiences.
I think since the last retreat, it’s becoming clear that people start to work as a single team. So that was really interesting and important for me to see that people are not pulling in different directions, but they are really working together and understand that everybody depends on each other. So it’s been a great experience. And we are just starting, we had a new core dev team joined recently, GraphOps. I’m really excited about them joining as well.
So yeah, it’s all positive. And listeners might be thinking about right now the macroeconomic situation. But they need to understand that the core developers are working every day. We are on target. We are delivering every day and meeting our milestones and everybody is super motivated. So that’s another thing, the personal motivation and people’s interest in making this work is amazing.
Well, when people ask me about why I’m so excited about The Graph, I have a list of course, and one of them is the talent at these core dev teams, people like you and the Semiotic Labs team alongside all the others. It’s just incredible. And it makes me super excited about the future knowing that some of the most capable, talented people I’ve met in the space are all working and contributing as core dev teams to The Graph. I wonder if you could just share your thoughts on the announcements from Graph Day about Messari joining as a core subgraph developer. I mean, I imagine when you heard that news, your eyebrows probably went up a little?
Ahmet Ozcan (00:53:09):
Yeah, that was surprising and a pleasant surprise because Messari is a market leader in terms of data and market intelligence for crypto. So, for them to join The Graph communities and endorsement, and what they will bring is this high-quality standards for subgraphs. So we are talking about hundreds of new subgraphs, very important for Defi applications. And they will bring basically a new level of professionalism and raise the bar for subgraphs and increase the quality overall in the network.
So I think overall, The Graph Foundation and the core, they have spent a lot of time in the internal mechanics of The Graph, the core mission, but the subgraphs are essential. Without subgraphs there’s no value, and often we forget about that. So I’m really happy that now we have a very experienced large partner who is going to take on that challenge and show us what high-quality subgraph looks like. And also, as consumers of this data subgraphs, it will be very interesting to see what is the most important type of analytics that the applications are going to use? So I’m really excited.
Ahmet, the final question I want to ask you then is about your vision for The Graph. You’ve touched on it a little bit here, but really want to give you the opportunity to tell me what is your long-term vision for The Graph? Or what excites you about the future of The Graph?
Ahmet Ozcan (00:54:43):
Well, first of all, I think the amount of blockchain data currently, or even non-blockchain like IPFS is so little. People forget that we are at the early stages of this new decentralized internet. So web3 will be huge. So when Jannis, the CEO of Edge & Node speaks like indexing the world’s public data, he has this, I think, grand vision that there will be a lot of data. Just like, imagine the early days of the internet, maybe indexing the web wasn’t a very difficult task in these early days, but then it became really an insurmountable task.
So we’re going to see that exponential growth in terms of the data, maybe number of blockchains, or the type of data that will be on the blockchain. And at that point, I think the value of The Graph will be crystal clear to everybody. That’s for just the query and indexing web3. And beyond that, as I mentioned, Graph as a platform will grow beyond its core mission, this query layer. And there will be new types of applications on The Graph, new types of businesses, new ideas, building on The Graph. So I’m really excited about that grand vision as well.
And I think just like as I gave you an example, the Google has a huge AI team, they acquired companies like DeepMind. They have thousands of AI researchers because AI is infused in all of Google’s products. So I envision that Semiotic Labs will one day will grow to hundreds of AI researchers, even maybe thousands, and infuse AI everywhere in web3, through Graph. Because web3, if you think about it, is all about machine-to-machine interactions and executions. So that is really ripe for automation and especially AI applications to enable very efficient execution and transactions on web3. So I’m really excited about that future.
It’s hard to see it because we are at such early stages. People have I think, difficulty to understand the scale of things where we will end up. But you can always look at web2 and the evolution of web2, and I think come to the same conclusion.
Ahmet, as you know, I recently added a new segment to the podcast. It’s called the GRTiQ 10. This is where I ask each guest of the podcast 10 questions that I hope help listeners learn something new, try something different, or achieve more in their own lives. And so I now want to ask you the GRTiQ 10. Are you ready?
Ahmet Ozcan (00:57:24):
What book or article has had the most impact on your life?
Ahmet Ozcan (00:57:39):
The Symbolic Species by Terrence Deacon.
Is there a movie or a TV show that you think everybody should be required to watch?
Ahmet Ozcan (00:57:47):
I’m going to say director, it’s Akira, Crossover. I think everybody should watch his films.
What about music? If you could only listen to one music album for the rest of your life, which one would you choose?
Ahmet Ozcan (00:57:59):
I will pick Kind of Blue by Miles Davis. And can I bring a vinyl version of that? Okay.
What’s the best advice anyone’s ever given to you?
Ahmet Ozcan (00:58:10):
If you want to achieve great things, get out of your comfort zone.
And Ahmet, what’s one thing you’ve learned in your life that you don’t think most other people have learned yet?
Ahmet Ozcan (00:58:18):
People are the same regardless of where they come from.
How about life hacks? Is there a life hack you’ve discovered for yourself?
Ahmet Ozcan (00:58:26):
Yes. The ability to switch context, context really fast.
Based on your own experiences in life and observations, what’s the one habit or characteristic that you think best explains people finding success in life?
Ahmet Ozcan (00:58:42):
And then the final three questions are complete, the sentence type. So here’s the first one. Ahmet, the thing that most excites me about web3 is?
Ahmet Ozcan (00:58:52):
And how about this? If you’re on Twitter, you should be following?
Ahmet Ozcan (00:58:57):
And lastly, I’m happiest when?
Ahmet Ozcan (00:59:02):
I’m learning new stuff.
Ahmet Ozcan, I really appreciate your time. You’ve been so generous and provided some incredible clarity on some important topics. And so I really appreciate your time. If people want to learn more about you, more about your work at Semiotic Labs or Odos, what’s the best way to do it?
Ahmet Ozcan (00:59:28):
I would say our websites, semiotic.ai or Odos.xyz. And you can also follow our Twitter, Semiotic Labs or Odos protocol. But the website will be a great place to start.
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DISCLOSURE: GRTIQ is not affiliated, associated, authorized, endorsed by, or in any other way connected with The Graph, or any of its subsidiaries or affiliates. This material has been prepared for information purposes only, and it is not intended to provide, and should not be relied upon for, tax, legal, financial, or investment advice. The content for this material is developed from sources believed to be providing accurate information. The Graph token holders should do their own research regarding individual Indexers and the risks, including objectives, charges, and expenses, associated with the purchase of GRT or the delegation of GRT.