Compiled & edited by TechFlow
Moderator: DeFi Dave, Head of North America at @redactedcartel
Guest: Rushi Manche, Co-founder of Movement Labs
Podcast source: Flywheel DeFi
The Power of Movement w/ Rushi - Flywheel #111
Air Date: July 4, 2024
Summary of key points
This podcast features Rushi Macnhe, co-founder of Movement, and host Defi Dave engages in an in-depth conversation with Rushi, focusing on the power of Movement and its unique advantages in the crypto space.
Rushi shared his career journey from a programming beginner to becoming an expert in the Move language. Rushi emphasized the importance of security in DeFi and the need for high-throughput virtual machines, and detailed how his project Movement promotes the popularization and application of blockchain technology through innovative incentive mechanisms and security measures.
This article will summarize the main content of this conversation, covering the background of Rushi, the discovery process of the Move language, the security advantages of the Move language, the future development direction of the Movement project (including the wealth code), and criticisms of the current status of fundraising & airdrops and possible optimization directions.
Introduction and Background
Dave introduced the content of this issue at the beginning, saying that this issue will delve into the various applications of Movement and how its unique Move language may subvert the Internet economy. Dave was very impressed with Rushi, especially Rushi's metaphor of upgrading car parts to explain the improvement of Movement VM to the language.
Rushi pointed out that although the current adoption rate in the market is only 5%, Movement has unique advantages. Not only is Movement compatible with existing technologies, but it was also developed by Facebook, aiming to make crypto technology accepted and used by more ordinary users.
Rushi stressed that security and low fees are key factors in attracting users. Their technology not only provides speed, but also ensures security, allowing users to conduct transactions on the chain without worrying about being hacked.
Rushi’s background and the process of discovering Move
Rushi started programming at the age of 14 and initially worked at health insurance giant UnitedHealth Group, responsible for cloud infrastructure migration. He began his career in the field of distributed systems and databases, and later came into contact with cryptocurrency during college. He mentioned that four years ago he was attracted by the concept of Cosmos and began to learn Rust and Solidity, which laid the foundation for his entry into the encryption field.
When talking about how he discovered the Move language, Rushi explained that he learned during college that Facebook was developing its own blockchain, which sparked his interest. He began to delve into the Move language and eventually decided to start his career in this field.
Rushi also mentioned that July is a big month for Movement, as they will launch the first high-throughput Ethereum Rollup testnet and have a host of exciting applications coming online, including a fully on-chain sports prediction market and some excellent DeFi applications.
Differences between Aptos Move and Sui Move
Rushi mentioned that he first learned about Facebook's development of a new blockchain project through an article in the New York Times. This news excited him because at that time Cosmos had only 5 users and Ethereum had only a few hundred users, while Facebook's user base was in the billions, which brought huge potential for the mass adoption of crypto technology. He began to study the Move language in depth and acquired knowledge from the Move Book.
The host, Defi Dave, added that when Facebook released this project in 2019, it was during the downturn in the crypto market, but this move was a huge validation for the crypto space. Although Facebook's project ultimately failed due to regulatory reasons, the impact of this project is still far-reaching.
Rushi further explained the difference between Aptos and Sui. Although both projects originated from Facebook's blockchain project, they differ in their technical implementation and goals.
Rushi emphasized that the emergence of the Move language is to introduce a new virtual machine (VM) on a brand new consensus mechanism, rather than simply improving the existing EVM (Ethereum Virtual Machine).
Rushi also shared his experience of choosing between Avalanche and Cosmos. In the end, he and his team chose Avalanche as their early backer and started their entrepreneurial journey during college. Rushi mentioned that when they were at Vanderbilt University, they persisted in developing their project despite limited resources.
Move's security focus and EVM issues
Rushi mentioned that he and his team started their Move project in November 2022, when they were working with Avalanche to introduce the Move language to Avalanche's consensus mechanism. Their goal is to bring the Move language to EVM because they believe that EVM has many problems in its design, especially in terms of scalability and security.
Moderator Defi Dave mentioned that while EVM is very mainstream in the crypto space, it is not designed for large-scale users. Rushi further explained that EVM was originally designed as a temporary solution and was not designed with large-scale usage scenarios in mind. In contrast, the Move language and other Rust-based virtual machines (such as SVM) are designed for high throughput.
Rushi stressed that one of the main advantages of the Move language is its security. Unlike EVM, Move performs formal verification before executing smart contracts to ensure the security of the code. This means that if a developer introduces an error in the code, Move will detect and prevent its execution before the code is deployed. Rushi likens Move to a firewall that can detect and prevent potential security vulnerabilities before the code is executed.
Defi Dave added that while the EVM has become more secure over the past few years, it still has many vulnerabilities that could be exploited by increasingly sophisticated hackers. He noted that Sui Move is more focused on high throughput, while Aptos Move is more focused on security.
Rushi responded that although EVM is constantly improving, its design flaws make it difficult to completely avoid security issues. He mentioned that 92% of EVM protocols, including some mainstream DeFi protocols, are at risk of being hacked.
Rushi explained that the Move languages of Aptos and Sui are actually completely different languages, which leads to confusion and division among developers when choosing. Aptos is closer to the Move language in the Facebook DM project, while Sui has been iterating on this for six months and is more similar to Solana's semantics and consensus mechanism. Therefore, Aptos Move is more secure, while Sui Move has higher speed and compilation efficiency.
Movement as an L2 solution for Ethereum
Rushi introduced their project Movement, the first Ethereum second-layer solution based on the Move language. They chose Ethereum's second layer instead of an independent first-layer blockchain because Ethereum, as a stable and liquid asset, is better able to attract liquidity providers (LPs). Rushi emphasized that using Ethereum as the underlying asset allows users to enjoy the advantages of the Move language without leaving the Ethereum ecosystem.
Rushi explained how they implemented support for Aptos Move and Sui Move. They built an RPC translation mechanism to compile Sui Move and Aptos Move to the same bytecode to achieve compatibility. In addition, they also developed an EVM interpreter called Fractal that allows developers to deploy EVM smart contracts on Movement.
Moderator Defi Dave mentioned that Ethereum’s network effects as a store of value and widely used asset are very strong. Rushi agreed, adding that Ethereum is not only highly programmable but also very secure, which makes it ideal for building second-layer solutions.
Go-to-market plans and building the Movement ecosystem
Moderator Defi Dave mentioned the possibility of using TON as a second layer solution (L2) for Ethereum.
Rushi explained two possible directions: one is to deploy TON VM on Ethereum, which can take advantage of Ethereum's liquidity but provide a poor programming experience; the other is to deploy EVM on TON, which can retain TON's features but provide a better programming experience.
Rushi stressed that one of the main selling points of Movement is its security. He pointed out that in the current crypto environment, it is difficult for developers to quickly deploy applications because the security issues of EVM smart contracts require expensive audits. Movement hopes to provide a safe environment where developers can quickly deploy applications without worrying about being hacked.
Rushi also mentioned that Movement hopes to become the best platform for user experience, providing high throughput and security, enabling developers to quickly build applications from 0 to 1. In addition, Movement also supports EVM compatibility, which means that existing EVM applications can be easily migrated to the Movement platform.
The host Defi Dave mentioned that they have launched an incentive testnet, which has attracted many excellent application developers.
Rushi introduced the operating mechanism of the incentivized testnet in detail: developers can deploy their applications on the testnet and get incentives through the testnet. This method can not only attract more developers, but also help them find and fix potential problems.
Applications on Movement (with wealth codes)
Rushi highlighted two main selling points of Movement: security and user experience. He pointed out that the current production speed in the crypto space is very slow because developers need to spend a lot of money on security audits. Movement hopes to provide a safe environment where developers can quickly deploy applications without worrying about being hacked. In addition, Movement also provides high throughput and good user experience, allowing developers to quickly build applications from 0 to 1.
Rushi introduced the operating mechanism of the incentivized testnet in detail: developers can deploy their applications on the testnet and get incentives through the testnet. This method can not only attract more developers, but also help them find and fix potential problems.
Rushi mentioned some of the key applications that will be released on Movement:
Meridian: This is a lending market similar to Aave, focusing on the staking and re-staking capabilities of the Move language. They are also developing a decentralized exchange (DEX) and stablecoin.
Echelon: This is a lending market that aims to provide users with a safe lending experience. Users can deploy Ethereum assets on Echelon and earn returns without having to worry about being hacked.
Bracket: This is a fully on-chain prediction market focused on the sports ecosystem. Users can make predictions for sports events on Bracket and use leverage. This feature makes the prediction market more liquid and attractive. A key feature of the Bracket application is that users can create their own brackets, such as the future March Madness (American college basketball tournament), and put them fully on-chain, which increases transparency.
Partnerships and consumer applications on Move
Rushi said that the Bracket team built its own oracle, but also supports other oracles. Their oracle is completely open source and randomized, which makes the system more transparent and reliable.
Rushi emphasized that Movement’s high-throughput virtual machine and excellent user experience enable it to support many unique applications. For example, users can use Ethereum assets for betting on Movement and enjoy better user experience and security.
Rushi mentioned that many teams want to launch their own chains (app chains) because this can increase their valuation. Movement provides a stack that allows teams to customize their rollups to achieve high throughput block space.
Rushi used a metaphor to explain the bottleneck problem of the current Ethereum Virtual Machine (EVM). He said that the current EVM is like a luxury car with an old engine. Movement is focused on improving this "engine" and providing a more efficient virtual machine.
Rushi mentioned that they work with multiple teams to provide customized chains. For example, they work with a Bitcoin L2 team to solve transaction congestion. There is also a team called Link that is developing a chain with 300 mini-games.
Rushi mentioned an app called Henry, which is a consumer cashback app similar to Honey. Henry has attracted many consumer teams through a customized chain and has partnered with several large retailers. For example, when users buy shoes on the Crocs website, they can earn Henry points, which can be used for future airdrops.
Rushi finally mentioned an exciting project: Up Network. They are about to launch a mobile device called Movement Phone, a mobile-first Android device that will be launched in the next few weeks.
Product differentiation in a saturated market
The host Defi Dave mentioned that he mentioned a recent interview with Jay, in which Jay discussed how to promote the development of the Internet economy. Dave recalled the previous discussion of whether institutional investors would enter the market, and believed that instead of waiting for institutional investment, it is better to focus on the existing Internet economy.
Dave believes that Move VM is a perfect tool to improve the internet economy with various applications. He mentioned some applications, such as Honey, and believes that these applications, once they are online and gain real users, will help attract more people to the cryptocurrency field.
Rushi added that Move VM can also be used with friends, similar to a social trading platform. He further explained the concept, giving the example of the possibility of trading on platforms such as Telegram, which would allow users to trade directly on existing communication platforms without having to download new applications.
Rushi believes that while there are many fast chains on the market, most may not ultimately succeed. Solana is one of the few fast chains still running. He emphasized that the difference in user experience is the key, and many new blockchain projects failed to significantly improve the user experience and therefore failed to attract widespread attention.
Create new products and user experiences
Rushi mentioned that their team is focused on aligning with Ethereum and considers Move VM to be their core technology. Although the market acceptance is not high at present, they believe in the potential of this technology.
Rushi stressed that their goal is not only to attract existing cryptocurrency users, but also ordinary users who are skeptical of technology, such as his mother and uncle. They focus on security and low fees, which is also the advantage of Move VM. Although security is not as attractive as privacy, it is crucial for users, especially when funds are involved.
Dave mentioned that there are many new blockchain projects and L2 (second layer solutions) in the market, but there is a lack of obvious product differentiation between them. This makes it difficult for users to distinguish the pros and cons of different projects. Rushi agreed with this view, believing that the current market sentiment is not good, and many projects are simply raising a lot of funds but fail to really motivate the community, which leads to negative market sentiment.
Rushi further explained that their goal is to launch projects with fundamentally new products and user experiences. They have already built a large community in Africa and Southeast Asia, and plan to stimulate user interest through innovative DeFi experiences and new mechanisms.
Dave also mentioned a project called "Fair Share", which he believes has some unique innovations in consensus mechanisms, such as liquidity proof. They successfully activated the testnet through NFT and attracted early users, similar to early believers in religious beliefs.
Challenges and opportunities of fundraising and airdrops
Rushi mentioned that many projects promote community development by incentivizing early developers and users, but sometimes set too high expectations. For example, some projects attracted a lot of liquidity in airdrops, but the final returns were not ideal, leading to user dissatisfaction. He believes that the key is not to set too high expectations and effectively distribute rewards through a tiered system.
Rushi said that they plan to distribute a certain percentage of rewards to applications instead of being distributed directly by the foundation. This approach will allow applications to better identify and reward their active users, because applications know their users' behavior and contributions better than the foundation.
Rushi also mentioned that a key success factor for airdrops is the element of “surprise.” For example, Uniswap’s airdrop was very successful because users did not expect to receive airdrops when using the application, and this unexpected reward strengthened user loyalty and engagement.
They also discussed the pros and cons of a “points” system. While a points system can provide a transparent reward mechanism, it can also lead to users engaging in excessive behavior in order to accumulate points, ultimately expecting large returns. If market conditions are poor, such expectations can lead to user disappointment.
Rushi mentioned that both the traditional point system and on-chain KPI (key performance indicators) have their own advantages and disadvantages. The point system is simple and direct, but it can easily lead to users having too high expectations and a "sense of entitlement". On-chain KPIs, on the other hand, focus more on unexpected rewards and reduce this sense of entitlement by allowing contributors and applications to allocate rewards themselves. For example, developers can get rewards by building applications on the chain instead of getting small amounts of funding through a complicated application process.
Rushi stressed that the key to airdrops is to avoid setting too high expectations. Many projects have attracted a lot of liquidity in airdrops, but the final returns are not ideal, leading to user dissatisfaction. Rushi suggested that by allowing applications to distribute rewards themselves, they can better identify and reward their active users, thereby improving overall fairness and transparency.
Rushi is critical of fundraising, believing that the traditional fundraising process is cumbersome and of limited effectiveness. Many projects spend a lot of time and energy on fundraising, but only end up with small amounts of funds that cannot sustain the development of the project. He suggests that more attention should be paid to helping teams connect with investors and the market, helping them raise funds and build sustainable business models, rather than relying solely on fundraising.
Rushi believes that successful projects in the future need to innovate in reward mechanisms, such as delegating distribution rights to applications, allowing communities and users to participate together, thereby improving overall fairness and transparency. He also mentioned that future blockchain projects need to provide unique user experiences and fundamental new products to attract and retain users.
Creating Wealth in Cryptocurrency: Effective Incentives
Rushi talked about different grant strategies adopted by different ecosystems, such as Optimism's long-term funding and Arbitrum DAO's discretionary grants. He believes that the traditional grant process is cumbersome and inefficient, usually taking months and multiple interviews, and may only get a small amount of funds in the end, which is not very helpful for truly promoting project development.
Rushi advocates working directly with teams one-on-one to provide market connections and fundraising support rather than simple cash grants. He believes that this can more effectively help teams build sustainable businesses rather than relying on short-term funding support. He also mentioned that many ecosystems have attracted some "grant farmers" through direct cash grants, who deploy the same applications on multiple chains but do not really build an ecosystem.
Rushi emphasized that the community should lead the allocation of incentive mechanisms, rather than the foundation deciding which projects are valuable. The market and users should verify the value of the product, not the foundation. He believes that grants should be used more for public products rather than business models.
When talking about future development, Rushi said that he hopes to build a secure Ethereum ecosystem so that people can trust blockchain as much as they trust AWS and websites. He also mentioned that the focus in the future should be on improving user experience and enhancing system security.
Ultimately, Rushi said he hopes to see more social and consumer applications developed on blockchain, rather than just infrastructure improvements.
