Polygon and Immutable zkEVM Partnership with Sandeep Nailwal & Robbie Ferguson

Welcome to Bankless, where we explore the frontier of internet money and internet finance. This is how to get started, how to get better, and how to front run the opportunity. This is David Hoffman doing an extra show this week without my AI co-host RSA. But regardless, we are here to help you become more bankless and also perhaps more gamer. Because that is the subject of today's episode. There's an exciting new announcement out of two of the biggest powerhouses as it relates to crypto gaming and crypto gaming chains. This is a partnership between Immutable and Polygon, two massive chains who are coming together to align themselves rather than be competitive. And as it relates to this partnership, I don't know who is really left building out the world of Web3 gaming. These are the two biggest Web3 gaming pioneers, and now they are joining forces. And so you're going to get all of these details here in this episode. In this episode, we are talking to Robbie Ferguson, who is the co-founder of Immutable, and Sandeep, who is the co-founder of Polygon, talking all about how these two brands, these two chains, are melding their technology and melding their effort to become the same vertical, the same stack. So I'll drop the punchline here. Using Polygon's ZK EVM, Immutable is building their own ZK EVM using Polygon technology. And so we're having this combined BD force to push Web3 gaming onto the Immutable ZK EVM. So that is the announcement. You'll hear all about the nuances and the details and the second order effects and the topology of these networks, because of course the layer three conversation is related here. And all of these details are coming in this interview with Robbie Ferguson and Sandeep. Quick disclaimers here both Ryan and I are investors in Immutable. Ryan is an advisor to Polygon. I am not. So those are disclaimers there. And let's go ahead and get right into the interview. Bakeless Nation, welcome to this special show. We're covering some pretty cool announcements out of both Immutable and Polygon. So we're gonna talk about exactly what is going on in this neck of the woods. And with me I've got Sandeep, the co founder of Polygon, who we've had on the show before. Sandeep, welcome back.

Thank you, sir. Thanks for having me.

And also we got Robbie, the co-founder of Immutable, who we've also had on before. Robbie, welcome back.

Great to be back, David.

So I got this email from you guys saying that you guys have this special announcement about a collaboration between Immutable and Polygon. And my first reaction was like, well, I thought they were competitors. So who wants to walk us through what this actual announcement is and how this turned from competition to collaboration? Robbie, can I throw this to you first?

Sure. So maybe some context, which is you know, we've been building for a very long time now in the blockchain and specifically on Ethereum. We started in 2017 building the first decentralized game on the blockchain, and it was an absolute nightmare. And we realized we had to start working pretty aggressively to make this easy for developers to build on,

but also to have this scalable for billions of users one day.

At first, we looked at solutions like plasma. We looked at solutions like state channels. Neither of these really worked. Some of these teams rolled into some of the scaling solutions available now. We looked at sidechains and we were never really happy with the security trade-offs that they had.

And then we saw ZK rollups. And for us, this is really the end game. And we've been on an app specific ZK rollup up until now, which basically means we have only been able to have very limited logic, no smart contract compatibility.

And for us, this partnership is the end game, which is we get to build on essentially what we think is probably the best ZK tech in market right now, the ZK VM powered by Polygon. But we also go to market force that is really going to be a very considerable sort of

Mechanism, how can we actually take all of Ethereum gaming mainstream? I think there's been a lot of infighting between competition and not a lot of focusing on who the true competition is, which is ultimately the hundreds of billions of dollars spent by players on in game items they don't own.

So I think this will be one of the biggest partnerships in the space to date. We're extremely excited to be working with the Polygon team and Sunday. But Sunday, feel free to add any colour on this.

Yeah, I mean for me, like I've been a big fan of Immutable for, you know, since their early days, right? Like, you know, I mean, they have been true pioneers of ZK Tech.

You know, like they took this plunge on building this ZK and taking the hard route. I remember speaking to James and Robbie both, trying to convince them

to, you know, come to the you know, Polygon or Matic chain, Matic Network that time, and they were very clear that, you know, they want a like a full blown layer two and everything. You know, in my mind, they are one of the biggest Ethereum maxis, you know, out there. Like they are like so all in on Ethereum.

And you know, when we kind of started approaching our mainnet on ZK,

it automatically made a lot of sense for me to reach out to IMX because in gaming, like IMX and Polygon are kind of like the biggest of the names, right? Like, you know, by far and orders of magnitude bigger than anybody else in the third place, right? So

basically, I thought that, you know, let me take this shot and you know speak with them also, like, you know, what where they are up to.

And obviously, they are, as Robbie was saying, that they are currently on an app specific rollup where there are only a few functions they can support. Whereas on ZK EVM, it's like full blown EVM programmability available to them.

And you know, we speak to the games. We have a lot of games which have some part of them built on Polygon, some part built on IMX, and then things like that. And we've always heard very positive reviews about them, about their relentlessness to provide the best developer experience and all that.

So for us, it made like total sense.

And you know, I'm really glad that you know I reached out to them instead of not thinking because you know that's where our Web3 ethos come in, right? So I thought that you know what is compet like as Robbie was saying, there is no competition here. Like we are all in this small bowl, which is Web3, and the world is like a big ocean, right? So I just reached out to them and then uh you know this uh and here we are today.

And uh, you know, probably arguably the largest, you know, kind of inter or intra Web3 partnership, you know, which is going to happen, and hopefully we are able to do some good work for the

You know, game developers who want to come into Web3 and build nice games for Web3 build gamers.

And David, I might just add one thing on, which is

I think we actually launched it on Banklist, which is our cross-sroll-up liquidity infrastructure. Because ultimately, what Immutable wants to do is create a one-stop shop for gamers so that they can build with APIs if they want to, stripe like ridiculously easy, or they can build with custom smart contracts. Our viewers, this will probably be the sort of 5% of advanced long tail devs building infrastructure for everyone else to use.

But the second most important thing is that even with DK EVM, even with five, 10,000 TPS, which we're hitting sort of the upper limits.

Fortnite alone will take up all of that on a single rollup.

Mm hmm.

And if we have hundreds of different, say, ZK EVMs,

then what we're doing is we're fracturing liquidity across hundreds of different rollups. And so

really, I think that the second part of this is we get to bring a lot of that value to Polygon's ecosystem. We can have hundreds of ZKs, which can be specified for a game or for financial infrastructure or for running housing in the future. But you can but buy assets with any currency from any wallet.

On any individual rollup, completely atomically and with zero loss of security. And this is kind of our cross-rollup, cross marketplace liquidity infrastructure, which is really at the heart of what we're trying to build out, because I think that's probably the least paid attention to layer of the stack today.

So, guys, as a moderator, I really appreciated all the context and all the backstory here, but I think we've accidentally kind of buried the actual real announcement. Robbie, you kind of said it and stuck it in there, but I wanted to like kind of zoom out and just drop the punchline. What is happening? Whoa, what's the announcement? Robbie, what's going on here?

So we are expanding from our current rollup on Starkex to be building across Polygon's version of ZK EVM

using this technology to create the immutable ZK EVM. This will be available as a standalone.

Dimmutable ZK EVM. Brand new spiffy ZK EVM chain. Correct. And so, in addition to uh beyond the app specific chain that you guys have been talking about, there is a new chain which is Polygon's technology operated by Immutable. Okay, we're calling this the Immutable ZKEVM. This new chain that we're talking about. I just really wanted to drive that point home.

Precisely, maybe we should put this chunk first. And in addition, we're going to be able to offer hundreds of custom ZK EVMs to, say, an Activision Blizzard or Ubisoft or a major enterprise company who might want to have their own version of this roll-up. And our goal is we'll be able to unify all of this liquidity with our infrastructure, have them build on incredibly easy to build APIs, and we're bringing this ease of use to polygons in Ethereum's ecosystem and continue to run all of our services to make sort of games incredibly successful, everything from economics assistance, tokenomics, passport, which is self-custodial email onboarding for end users. We'll also be joining forces with a lot of the go-to-market arm. So working on helping to onboard more games onto Ethereum and really take, I think, like honestly, this is for us the end game. I think people have been iterating scaling solutions and iterating approaches to what will be the final tech architecture that goes mainstream. This is it. This is CKEVM. You have full custom smart contract compatibility, you have full scalability, and we have now user onboarding technology, which can take a user playing a game and they can earn assets.

And they can sign up for a self-custodial Ethereum wallet without ever even knowing what an NFT or a blockchain is. And that's really what I think is needed to take this to the next billion users.

Yep. Beautiful. And if I remember correctly, Robbie, the way that immutable interface with Starkware, your previous and still the legacy change your product.

Continue to run.

Right. Absolutely. And it was like immutable licensing Starkware technology. Is that how we should think about this with Polygon, the Polygon ZK EVM? Or like how does this relationship work out?

No. So let me take that. So

Sure.

this is basically so Polygon's technology is fully open source, right? So there's no licensing agreement. Instead, like when immutable base chain, right? So immutable chain, this immutable ZKEBM, when it decentralizes, it will have Matic staking on it. And that's the only, you know, kind of the token economics model for Polygon, where the staking, you know, Polygon wants to be, or Polygon validators want to be.

the infrastructure engine which provides cap infrastructure to run these chains and they get the gas fees in return. And we are guessing that with the way mutable today is like 150

Tier 1 AA AAA games,

you know, we expect like hundreds of millions or you know, in fact billions of transactions during a year.

And all that gas fees will go to the Matic validators. So that has been like, you know, that's the main thing. That's the main end game for us. Yeah.

Fun fact, we had 20 billion API requests last quarter. So we are processing insane scale.

Sure. Okay. Well, Robbie, that begs the question. If this is a MADIC chain, what does the IMX token fold into in this new world?

Yeah. So if you go to immutable.com slash IMX-token right now, you will see four boxes. And for us, the really exciting thing is because this is now a smart contract compatible chain rather than just an app specific roll-up.

We can basically add on a whole ton of utility that was previously impossible for us to add.

So Matic will be the core staking token, but the gas token, which is effectively used to sequence and priorize transactions on immutable ZK EVM,

will be IMX. So for us, that's extremely exciting. You know, that's effectively like taking the utility of a Solana or some chunk of utility of an Ethereum or an Apdose and adding that on to the existing utility of IMX. Each month we then have two more sort of forms of utility we'll be announcing. I can't share more details on those right now, but we will be sharing those very soon.

Okay, so the idea is that Matic is the staking token. It operates the validators, it receives the gas fees of the network. The gas fees are paid in IMX. Is that correct?

Correct.

Okay.

Absolutely. And it's like, you know, David, for me, like not only for IMX, like the general idea that is emerging is that, you know, for the, you know, like middleware platform like IMX or App Layer platform, it's like basically asking what is the utility of let's say Uniswap token, right? So Uniswap is on the app layer. You know, IMX utility is much, much bigger. They are a middleware, they are plugged into various hundreds of games. Plus, now they have the gas fees also in their token.

And all that. So this is basically, if you see on a higher level the idea of like you know where Polygon is evolving into is that Polygon, you know, simply only wants to play on the infrastructure layer, right? Which where you stake Matic, you provide the security to run the network, right? But on top of that, on the app layer,