December 9, 2022

Episode 125: Jaydeep Korde, CEO & Co-Founder Of Launchnodes

Jaydeep Korde is co-founder and the CEO of Launchnodes. He is an experienced product person and tech entrepreneur whose work has ranged from building an early cloud computing start-up and selling it to a UK PLC, through to being a Strategic Advisor to global corporations on how to improve the way they make software and use technology. Jaydeep is a cryptocurrency investor and builder and has, over the past 7 years, extensively used microservice architectures using cloud-native development patterns to orchestrate building useful tools that work at scale and hyperscale. Jaydeep is a graduate of Edinburgh University.

Julian: Hey everyone. Thank you so much for joining the Behind Company Lines podcast. Today we have Jaydeep Korde, ceo, co-founder of Launchnodes, a company that focuses on investment grade Ethereum staking. Jaydeep, thank you so much for being on the show. I'm really excited to chat with you, get kinda your expertise and your knowledge within the crypto space, but also as a founder and dive into your background.

Yeah. Yeah, of course. Before we get into all the stuff about Launchnodes and what you're building now what were you doing?  

Jaydeep: I was consulting actually. Yeah, I was was consulting, I was helping banks and corporations try to use the cloud and build out services using microservices and a bunch of development patterns that are cloud native. That's not too jargony, but yeah, I was consulting.  

Julian: Yeah. Amazing. What is it like in, in terms of the consulting experience and how is it similar to, you know, being and founding a company and kind of selling a product is, are there a lot of crossover similar?  

Jaydeep: No, I think it's, I think it's the opposite. I think that in a consulting context, you are perpetually trying to frame your advice and make yourself sound wise and sensible. Whereas within the context of a product, you are trying to be compelling and wildly passionate about trying to get value to your client and trying to understand that.

So I think you. You shared a load of these trappings of reasonableness and sentiment and you know, and you're like, I've gotta get this done and I've gotta find out, you know, what does my customer care about and how do I get the value that, that, that becomes your sort of obsession and rezo detra.

Whereas I think within the consulting context, you sort of know. Is your client really gonna buy it? You know, how far can you push? What can you get done here? And you work within those parameters. Whereas, you know, selling product it's pretty scary, right? You pour out, you set up your cups and your stool, you pour out your lemonade and does anyone buy your juice?

Right? And obviously people start spitting it out and throwing the cup in your face. It's a bit of a disappointing experience.  

Julian: yeah, no, it, it def there's definitely a lot of you know, rejection and just circumstances and feedback that you have to take in and, you know, not to internalize so much.

So where it, it depletes kinda your motivation, but helps you reframe either your product or your message. It's a tough found experience. Is there anything, I guess advice wise to early founder? That you maybe have now extracted from going through that evolution of, okay. Feedback I'm receiving isn't necessarily the most positive, but there are bits of.

And then you've evolved to create the product that you have today. Just curious if you had any, you know, advice for early founders.  

Jaydeep: I think generically you are right. You have to be resilient. I think that one of the practical ways in which you can be resilient. Is to really care about the product you want to get to your client.

Just as when, when a player steps up to take a free kick in a soccer match or football match, as we call it, they visualize the ball going in. I think you have to visualize the customer getting the value with a big smile, you know? Yum. Isn't this tasty? Isn't this wonderful? My, my life is better from having this product.

And I think in that visualization, you can look at critical feedback and go, you know, needed more chocolate, needed more sugar, whatever it is, rather than feeling Right. That there's some sort of personal front that you've been rejected. I think that,  

Julian: yeah. Yeah. I like the bit about ingredients, kind of adding it, it's like perfecting a recipe in a lot of what, so just back backtracking here, you're, you know, consultant you're talking to a bunch of companies and then you have this idea to create Launchnodes.

What was the catalyst, or what was the inspiration to not only dive into, you know, crypto and the crypto space as well? Had you been working with it or was it something that you particularly found interesting and, you know, saw market need out there? What was the whole process in getting into Launchnodes and building a company?

Jaydeep: So I trace it back to an article by Vinay Gupta about programmable blockchains. And at the time I was building scale and hyperscale platforms to different clients and working with engineering teams to build those out. And, you know, deep into the weeds. And in that paper, he kind of blew my mind through the context of talking about a shared data.

And what if we have one shared database and that now gets lost in the pointy graphs and prices going up and down. But for me, blockchain, I don't like that word really. I understand why it's used, but it takes you away from what it is and why it's important and what it is and why it's important is it's a shared database and in the value of there being a shared database, we all have access.

Applications that then run on that shared database and for that shared database to be safe and secure and have good data and work a currency emerges that rewards all the people that are doing the work to keep that database safe, secure, open and updated with information. And so that, for me was a really seminal moment.

And from then I think I just having worked in the old world for so long and seen what that meant, right? That we were perpetually building logic outs, you know, up from databases to then talk to each other, to then go and talk to other databases and then build. Yeah. If you're no longer building up, you're just in the data.

Efficiency in that really struck me as just a very practical change to what the day to day work I saw around me, so your question was when that was the moment I think from a setting up the company perspective I, you know, it's not an understatement to say I, I love my co-founders and we've been friends for 20 years.

And so, and we worked together. They actually bought my business from me. Whatever, 17 years ago. So choosing to work with people that you really like and and care about also helps, I think. And the softer words about that, you know, care about love they're really important because I think that in the startup scenario, there are lots of, Emotional highs and lows, and yeah, being able to be generous in every kind of facet of that word, time, energy, emotion, you know, thoughtfulness is really important.

And it's easy if you really like the people you were with.  

Julian: Yeah. Yeah.  

Jaydeep: That's advice that that's, you know, I was fortunate to find myself in that situation, but  

Julian: yeah. You know, a lot of founders talk about seeking the right team and right mentors or right network and it's something that's been discussed time and time again because without that, it's difficult to go through the challenges or even just the kind of see the full perspective of what you're building and your customer's user experience.

There's so many different facets to why it's important to have the right people around you who support ideas versus, you know, who are maybe competitive or combat. Around ideas. It's kind of, you know, you're kind of 1, 1, 1 body, one mind in a lot of ways as you're, you know, focusing on the company and not each other's kind of growth.

And it's kind of a, it's a, I think it is how a lot of companies are successful in, in, at the end of the day. Describe the process of staking for those who don't know or unfamiliar within, you know, crypto and the blockchain space. Describe the process of staking and how launch, Launchnodes essentially enables the ability to stake and invest.

Jaydeep: Ethereum for sure. So blockchain, and I've already said I dislike that word. But let's go with it. . Others like it a lot.  

Julian: What's another word? What's another word? .  

Jaydeep: Shared database. I dunno why. Right. Shared database. Shared, yeah. Okay. For there to be blockchains, there have to be nodes. There has to be nodes.

If a blockchain doesn't have nodes then it can't be healthy. And the reason that's the case is that for a blockchain to work. , the shared data to be updated and in sync and with good value. You know, good data not bad data. Someone needs to be updating it and the work of updating everyone's copy of the database in a proof of state blockchain is done by these nodes, and these nodes are awarded for doing the work of updating everyone's copy of the database, keeping the network secure, and validating good transactions.

And our hypothesis in staking is that for Ethereum to be truly decentralized, I can't give you the outcome of the node and trust me, right? That FTX model for us never worked. You have to own the node, right? Julian has to own the. And be bare to the network and take on some aspects of the ownership and managing your keys and not losing them and stuff, and passwords and monic phrases.

But the node ownership we can make easy for you, Gillian, right? You don't need to be you know, super technical. And even if you are super technical, then what we've done by making it kind of Lego bricks, the staking architecture, rather than saying, oh, give me your money and we'll give you a note, and you get 14%, 8%, 6%.

What we've said is, yeah, look, This is what staking is in all. Its, you know, component parts. Use us to build your staking architecture, choosing the particular Lego bricks that are important to you, be that get node, be that beacon node, be that validator note. And on top of that, you know, we've focused on the idea of public cloud and aws, but we also enable clients to stake on their own tin or choose a geography for whatever reason might be important to And so you. Our goal is to make as many people independent and what's what The Ethereum Foundation class is solo stakers as possible. So, so our clients are solo stakers, whereas the idea that you have, you know, some staking providers, and I'm not saying it's wrong, but. You know, they have rolling digits of millions of dollars and number of nodes on their website indicating how much you should trust them.

Is not a model we buy into. And I don't think that there's, you know, I think Ethereum is an important network. Like the Internet's an important network. I think it's going to change everything. And I'm not as multi chain as other people are who are, you know, wise and I respect their opinions, but I don't intuit that that multi chain world as much as I do an Ethereum world with layer twos and an ecosystem that, that sits around that.

And part of that yeah is my consulting background, like the quality of software that goes into building a good chain. It's hard work. It's really hard work. Yeah. It's not about getting a PR team and getting a listing on an exchange and then flogging your Coin. It's about really hard work and really deep, thoughtful considerations that Ethereum have done and have got a big advantage on.

Yeah. Yeah. So I, I don't know if that took for a long time  

Julian: if I've asked. No, you definitely answered the question and. Speaking of hard work and quality of software, describe the significance, at least to you and to Launchnodes for the movement from to proof of stake in Ethereum 2.0. How is that significant to you and your business, and what do you, what, how does that excite you as this technology continues to evolve and improve?

Jaydeep: So, those nodes that now do the work that, you know, large computing large compute power used to do, has obviously made a big environmental difference in terms of the energy that now is required to secure the network, which is great. . The second bit is that it democratizes participation in securing the network, right?

Ag a you and certainly my view when I realized that what proof of stake was, you know, Julian, if we are both bakers and you've got a baking friend in France and I've got someone in Kenya or. We can pull together some capital, run a node, earn a return from that node and put that to whatever we want to do.

And I think that you know, blockchain came about. Satoshi's paper came out of the banking crisis and the Eurozone crisis. It's something that, you know, those of us who saw and were interested in it, the idea that you know, Italian businesses, you bank their whole lives with local banks and suddenly woke up the next morning and their deposits had gone because yeah, the bank had renamed itself, you know, was shocking and here was an obvious solution.

So you could have pools of capital come together on shared principles and values. Interest rate in perpetuity that didn't require a banking risk model. You don't have to make loans from your deposits to make an interest rate. You have to do the new work of updating everyone's copy of the database, running this node, putting some capital on it, 32 E and away you go and you earn an interest rate.

And as the network there is Ethereum and blurring, you know, terminology here, network and data. Because that network and database grows in its utility in the same way the internet did. The value gets shared out to these nodes that are distributing. And I think that, you know, people talk about blockchain infrastructure and throw nodes into that bucket.

Nodes are not, blockchain infrastructure nodes are special, and we want as many people as possible to have note themselves.  

Julian: Yeah. Describe this. I was reviewing and getting to understand the product a little bit more. And one, one. There was one circumstance that was super fascinating to me is, you know, describe this idea that if someone stakes their e they can potentially lose it by not acting in the best interests of their network.

What are ways people can act in, or become a bad actor or act in ways that are not incentivized to support the network? And have you seen them kind of, with any of the partners that are a node kind of in set up as a node through your system?  

Jaydeep: Yeah, so I think overall Ethereum slashing events, and again, this is one of the great things, right?

You sort, it's a totally transparent network and we can see from Genesis what's happened, been very small, right? Yeah, really small. They have, there hasn't been many slashing events. Yeah. And. Know, what you can essentially get slashed for is if you with one pair of keys, try and run two notes. Right. That's the main easy mistake to make as it were.

And but you know, you can go offline and you can you know, miss SAT stations and yeah, there's an opportunity cost you didn't earn when you could have done, because one of the demands of these nodes is that they're always available when the network. Julian, your node's up, you get to update everyone's copy of the database.

You've gotta be there, ready, gotta be running the right software and promised to update everyone's copy with good database, with good data. And for that you get rewarded. And so, you know, you can be down and you're not gonna get slashed. You'll miss the opportunity to earn, but you won't get slashed. And now as the network is upgraded, actually, if you do try and, you know, run a node with two keys and there are other scenarios, but that's the.

You know, two nodes with the same pair of keys then your slashing event will be quite significant. Cause there are a lot of tools and ways that you can avoid doing that in an automatic fashion. So, yeah,  

Julian: yeah.  

Jaydeep: The other way is if you lose your keys, if you lose your monic phrase, right? If you lose your EM phrase, feel loud, then you're in a bit of a pickle.

Julian: Yeah. Yeah. Describe the between a. Yeah. Describe the difference between a beacon node and a validator node.  

Jaydeep: The beacon node connects to the beacon chain and doesn't have any money on it, essentially. And does the work of orchestrating you know, Ethereum pauses, as it were.

The validator node is what has your money on it, and that validator node connects to a beacon node, and so it's a validator node that collects the earning. Of your node doing its work and that balance is accruing and when the network upgrades the Shanghai upgrade, you'll be able to take off your returns and your principle, I think.

And what we are seeing right now with customers is that in terms of the inclusion fee, now that all those proof of work, minor returns are coming onto the proof of state network you've also got, you know, returns going into a meta mask wallet associated with your node, right?

Yeah. And if you are running MEV on top of that, which is the minor extracted value, minimal extracted value, maximum extracted value, I forget exactly the what the m they've changed over the over the month. That me is a boost on top of your earnings, the base earnings for running of validator.

And they go into your wallet and they're. For you to spend straight away. But that is but your earnings in the main scale are from your validator node, which has 32 Ethereum on it. And that's what ends your return. Yeah. Yeah. You know, beacon. The beacon. Sorry. And just to add to that, the beacon node is something you need.

If you want to examine the blockchain. So there are these things called RPC nodes. And if you want to examine, and again, natively own that data and examine that data rather than trusting APIs or third party. But if you want that data, you wanna know what it is. Yeah. And you wanna make decisions on the back of that, often financial ones.

Then the beacon node you know, allows you to do that running with. Conjunction with the death node now,  

Julian: I'm so interested in, in, in Launchnodes and how it's been able to, you know, kind of create this very accessible process to, to, you know, build nodes within, you know, an individual rather than having some large organization kind of control a large portion of it.

Jaydeep: Tell us a little bit about the traction. How many. Users are on your platform, you know, building nodes. What is, what are the exciting growth numbers that you've seen so far? What are the objections for the.  

Yeah, so we you know, one of the criticisms I think that we would end up having to take as a business is that we've not made it, we've not diluted the problem of 32 Ethereum costing $50,000 or $32,000, whatever.

It's right. That's not a small amount of money. And so actually what we've seen is predominantly large holders of each and businesses who are working in this space as our customers. Rather than it being a retail thing. And again, because we enable our clients to be solo stakers and we don't have those rolling digits of millions of dollars and numbers of nodes, it's our clients doing the staking.

We are providing them tools. So we don't really talk about you know, the millions of dollars and the numbers of nodes and that sort of stuff cuz it's our clients who are doing that.  

Julian: Yeah. What are some of the biggest challenges?  

Jaydeep: What we see, but what we see in terms of growth, what we see, what in terms of what we see from a growth perspective.

I think we see technologies like distributed, validated technology and networks like Ssv and OAL being really important. We see institutional money coming in to want to stake and I think. As it stops being, you know, evangelists like myself talking about it after six and eight months post merged, there's just data.

This is what these notes earned. I think you are gonna see a drift of institutional capital come in that, that are close to the space. And then I think there are lots and lots of what we see is different businesses building different propositions on staking. Right. Because once you own the nodes, then you can then go and offer client services.

Of that high interest rate account high interest rate savings accounts loans, et cetera. And I think that market is emerging and growing and will look to support businesses that wanna play in that space.  

Julian: Yeah. It's exciting to see the evolution and the accessibility of this different asset class and being able to, you know, even take loans off of you know, the material that you hold in this space.

What are some of the biggest challenges that Launchnodes faces?

Jaydeep: I think that Ethereum and Bitcoin and the whatever class as credible cryptocurrencies in Bitcoin and in Ethereum as a shared database and as a network. Have been tarnished massively in this FTX scandal. And I think rightly so, I don't think, you know, our community is exclusively full of good actors who like the hard work of building and making stuff that's useful.

I think. I think there's been an enormous amount of fraud and I think that we're suffering that the idea that. You dress up a hedge fund and give it crypto instead of treasuries and credit default swaps. And apparently that's crypto business. That's what we wanted in the crypto community is ridiculous.

So I think yeah, I think that it what we would like is new entities and new funds and new organizational structures that allow people to put their capital in, earn interest, you know, an interest rate. And I think that the FTX model was very much old world and I don't think we can avoid going through it.

But you know, because actually, you know, I was around in 2001 and you know, when people were telling me that, oh yeah, the internet, you know, dot com nonsense businesses don't have a business model. You know what, I'm gonna buy books online. Yes. So what? Yeah, I'm not gonna buy train tickets online.

I'm not gonna buy plane. I'm not gonna sell my house online. You know, so I. I think that the scale of change, change that network like Ethereum's going to bring and Bitcoin, I think have not gone away. I just think that they're getting any battering right now. And the other bit is why would they not be getting a battering when real people are having real problems in real life?

If crypto thinks that it's world can sit in an ivory tower with you know, rocket ships and to the moon prices, And not engage with the real world. Well then I think it's going, it's gonna be a huge disappointment to all of us. Yeah.  

Julian: Yeah. What is something that as a founder, you're better at now, that you weren't necessarily the best at when you first started?

You know, launching those, you.

Jaydeep: Realizing how valuable it is when I'm wrong

and I'm a terrible listener, but I've got a little bit better.  

Julian: Yeah. . Well, is there anything is there any story in particular, any anecdote that was, that particularly sticks out to you  

Jaydeep: every day, Julian? Every day. I'm wrong, and I'm grateful for it. Every day I'm a terrible listen.

Julian: I love that. I love the honesty. I guess, long term wise, what's the long term vision? If everything goes well, what's the long term vision for Launchnodes?  

Jaydeep: I don't know. I think we are having lots and lots of fun building great product and getting into the hands of customers that love it.

I think we've got really smart and supportive investors who who are helping us grow the business, I feel and giving us kind of global exposure that's really important. And I don't know. Yeah, I think if I I'm sure you've had other co-founders on you and CEOs who are much more eloquent and convincing about describing the plan.

But I think if I tried to describe the plan, it would be very obvious I was lying or didn't have one. So I'm going with honesty. Yeah. We love, I love it. We love what we're doing. We love the idea of more people learning notes, and we're just passionate about doing that.  

Julian: Yeah. Yeah. Is, you know, I guess. What are some of, I, I think this is an obvious question, but from just wanting to hear it from you, what are some of the benefits of creating diversity and accessibility to not only institutions and companies owning nodes, but also that trickling down to individuals who, you know, have the ability to purchase nodes and run them.

What are the benefits of that diversity that you see,  

Jaydeep: I, I'm not sure I understand the question. Julian, do you mean in terms of the diversity of ownership and people owning nodes and what it's gonna mean is That's correct. Yeah. Yeah. So I think that what I would really hope is that within, as part of the ecosystem platforms emerge, and we are looking to build in this space actually in a kind.

Impact context whereby you, me, 40 other people, we are all world of Warcraft players or whatever our interest is, fans of friends, you know, whatever. And I'm, hopefully we, there's a positive construct in terms of our coming together. The idea that we could have an interest and we would want to fund that interest in perpetuity through staking returns, I think.

Is really powerful. And I think that for me, that was that, that I intuited that as being an exciting opportunity when I first heard about Ethereum and proof of stake. And I think also that the technology in the networks evolving, right? So what Ethereum is right now in terms of 32 Ethereum in terms of the unfortunately high costs of running full nodes.

It's only gonna come down. Right? And we want to be there to support that in every which way we possibly can. Because I think that whilst we've been talking about the money, the stake returned no equals, equals data and money, right? Yeah. That's what you get. And so if you are interested in the data and you want to monetize it and build and have business opportunities on top of that, the node is the gateway to do that.

If you want the stake. To build financial propositions on top of that. Again, the node is your gateway and what I feel that is so important about the node and the way it does this work that allows you to earn money. Right. I always feel that's really important when you talk about staking is why are you getting free money every month?

Like you're getting that money because you are doing the work of securing the network, updating the everyone's copy of the database and for that new type of work you get paid, right. That it's automated and. As a fixed pool of capital to it is just process details. But you are doing your type of work to get that money.

It's not magic money. Right? Yeah. And I feel that awareness and understanding growing that is gonna be, is gonna be really hugely beneficial to so many different courses. And I think what we've also done, and we've also seen that or felt that this fixed pool of capital from a node is connected to it earning.

Interest in perpetuity. Yeah. From securing the network. Well, that would be a great way to fund charitable causes and, but never, you know, social impact. Right. And so I think that we've done work as the implementation partner with the Ethereum Foundation and UNICEF to run a node and use those returns to pay for internet connectivity schools.

And it's a pilot project and we are learning as much as you know, and we're doing overly ring the bell and it's all done. And, you know, this is now. The way in which school internet connectivity is gonna be financed, but it's certainly an interesting experiment that we want to continue to build into.

And why not, why just schools internet connectivity? Why not be a support for vulnerable groups or fighting climate change? Right. Reforestation, if you've got money coming out perpetually couldn't that pay to rewild and reforest parts of the amison and I think the. Killer in that model is after two to three years, you as your donor, you get your money back.

Julian: Yeah. Yeah.  

Jaydeep: So I think there's a huge, there's a huge compelling body of work that needs to be done in this space. And, you know, we feel very lucky and privileged to be involved in that.  

Julian: Yeah. I love that. And I know we're coming to close to the episode and we can go, I think, through so many different topics and so many different ways that, that the technology can be, you know, used to really kind of create perpetual benefits.

But I'll take a step back and I'll ask a question that I selfishly love to ask for my own research, but also for my audience. Whether it was early in your career or now currently driving you what books or people have influenced you?

Jaydeep: Interesting. People I probably, you know, it'd be inaccurate to say it wasn't my parents books. Neil Stevenson Springs to mind. Tom Robbins, trying to say, I'm trying to throw in an English author more recently, Nick. Actually science fiction author. Yeah, I think they're the standout.

Julian: Yeah. I love that. Well, Jaydeep, thank you so much for being on the show. I hope you enjoyed yourself. I'm really excited to share this with my audience. But last little bit is I'd love to give my guests a chance to give us your plugs. What's your website? What's your LinkedIn, what's your Twitters? Where can we be a part of Launchnodes and get involved in support and maybe even set up our own note as.

Jaydeep: Yeah, absolutely. Launchnodes.com. Find me on LinkedIn. I think I'm pretty easy. Jaydeep Korde Launchnodes and Twitter is at Launchnodes  

Julian: incredible. Well, again, I hope you enjoyed yourself and thank you again, Jaydeep, for being honest.  

Jaydeep: No, I did. I think it's really great. Thank you. I'm a big big fan of this Of this podcast.

So it was it's great to be on it. Thank you for having amazing.

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