Part 1 of 3: Interview with Quanta founder Quoc Le
Quanta founder Quoc Le is building the world’s best sub-second order book and cross-chain infrastructure for decentralized exchanges (DEXs). Jesse Ratner of The Blockchain Agency recently spoke with Quoc about Quanta and the market for powerful exchanges built on fast, public blockchains.
Jesse: Why did you create Quanta?
Quoc: I’ve been an engineer for 20 years and later as a product manager. For big companies, medium companies. I’ve worked for IBM, for PayPal, for eBay. And I worked at stock analytic platform Investors Business Daily.
Like a lot of other people, I got interested in blockchain first thru trading Bitcoin and was quickly fascinated. But, I thought, isn’t it ironic we’re all trading cryptocurrency on a centralized exchange?
In early 2017, there were a lot of new exchanges. Many of them, however, had trouble. We saw a lot of hacks happening, big hacks, $500-million hacks (read Quoc featured in Investing.com). The core issue is centralized exchanges will never be as secure as a decentralized exchange. And we just live with this fact, this technological hurdle…until someone solves it.
Jesse: As 2017 progressed, and some decentralized exchanges got traction, did the market shift at all?
Quoc: It did. Toward the middle and end of the year, we saw Bancor. We saw Kyber raise tremendous amounts of money. But I think they didn’t completely solve decentralized exchanges. They did shift assumptions. So instead of solving for the core challenges of speed and scalability, they solve for liquidity by introducing an investor pool. But that band-aids the speed problem. Both Bancor and Kyber solve DEX in a similar way, which is they don’t really solve the speed problem or the cross-chain problem.
Jesse: Liquidity is the goal. Greater transaction speeds and more cross-chain interoperability enables liquidity. How does Quanta do it?
Quoc: Liquidity and interoperability play a big role in increasing liquidity. As a business model, Ethereum-only exchanges are niche compared to larger exchanges. Our “A-ha” moment was realizing we needed to build our DEX infrastructure from the bottom up. I can give you a very specific example. At PayPal, we built a system that directly integrates with payment processors like STAR, so we’d pay less in fees to, say, Visa and transfer the benefit to the customer. That’s the real advantage of building infrastructure. You reduce costs. You increase efficiency. You have flexibility. But it’s not easy. That’s why not a lot of people are doing it.
Jesse: In the blockchain space, the focus is often on the various aspects of blockchain, smart contracts, consensus mechanisms, token economics. But there’s a larger ecosystem, the full stack of tech that you need to build an exchange. You’re not just building the Ethereum layer. It’s all the other layers. That’s important because we often focus on the innovative elements. But there’s everything else that makes it work that folks have been already using and maybe have solved for. Did that factor into Quanta’s plan?
Quoc: The ecosystem does get lost. Our approach is to create the foundation that enables other people to extend this technology. So you can have people building wallet apps, people building additional exchanges, people localizing that exchange to their regulatory and language requirements.
Jesse: Tailored exchange execution.
Quoc: Yeah, tailored to the specific demands of your idea, of your industry, of your jurisdictions. So you can access liquidity on a fast, public blockchain and hold custody of your tokens.
Jesse: How does that work if you were to sketch it out?
Quoc: So imagine: You get a Quanta public and private key. And let’s say you’re an engineer: Quanta gives you a command line, and you could immediately from your computer without logging in, registering, doing anything. From just using your private key, you can directly access the public blockchain and be able to trade with any other coin, Bitcoin, Ethereum, et cetera.
Jesse: Wait, we could do that right now with Quanta?
Quoc: You will.
Jesse: So you’re creating a developer environment to access any pool of liquidity and trade any token across any chain.
Quoc: Yeah, without giving out your private information. You just use your private key.