"This Boom Feels Organic; Traffic's Not Coming Out of The Blue Like With ICOs in 2017:" Infura's EG Galano

In this week’s episode I speak with E.G. Galano, cofounder of Infura, an infrastructure provider for Ethereum and other blockchains. Many Ethereum applications depend on Infura to run their nodes, and it became apparent why that’s problematic recently, when the service provider was having trouble connecting to the Ethereum blockchain, causing much of DeFi to break down.

Critics often point to the reliance on Infura to say that Ethereum is centralized. E.G. argues why that’s not the case, as they run only a small fraction of all of Ethereum’s nodes. The same might not be true though for applications built on Ethereum, which might be overly reliant on the infrastructure provider.

E.G. talks about the importance for companies and individuals to run their own nodes and says it’s relatively easy to do. While this may seem a bit arcane, being able to do so, even if you don’t, is a fundamental piece of building an actually independent and decentralized financial system.

E.G. dives into the recent outage; he goes into what went wrong and what Infrua is doing to make sure it doesn’t happen again. He also talks about DeFi from the backstage perspective of an infrastructure provider, and what he says might get you feeling even more bullish on this space.

🎙Listen to the interview in this week’s podcast episode here:

You’re a free signup, which means you get only part of the transcript below. Subscribe to never miss out on any content ($100/yr, $10/mo) by clicking on the button below. Click here to pay with DAI (100/yr).

Subscribe now

🙌 Together with Zerion, a simple interface to access and use decentralized finance, and1inch.exchange v2, which aims to provide the best rates by discovering the most efficient swapping routes across all leading DEXes.

EG Galano: My name is Eg Galano, I'm one of the cofounders of Infura. I'm currently the head of engineering. My background is in distributed systems, systems engineering, scalable backend type of infrastructure.

Before getting into blockchain and Ethereum, I was at several startups here in California, one of them was doing video games streaming, not like Twitch but more platform streaming. It was a company called Gaikai, that's now a part of the PlayStation game streaming service.

After that, I was at a couple of other startups doing hotel backend software, but always on the side of the infrastructure behind it: how to keep these systems up and running, how to make sure that we're minimizing impact to users during updates and downtimes, and things like that. It was at that last company that I met one of my cofounders who, just as a water cooler topic, asked something that was like, how would you verify a piece of data that somebody gave you if you didn't actually trust this person? I joked around with him and said, are you interviewing somewhere? Is this like an interview question you want me to answer for you? He’s like, no, no, it's something that's really interesting going on in the Bitcoin space right now.

“How would you verify a piece of data that somebody gave you if you didn't actually trust this person?”

I was aware of Bitcoin, I was following up but not heavily involved. He was the one that convinced me that I should be paying more attention to the space. I was getting a little bit bored at my current role, and I wanted to be closer to the R&D side of the industry, and it really seemed like a lot of people were fascinated and interested in the technology behind Bitcoin and what was starting to be called blockchain. I wanted to be a part of that and figure out what it could be used for.

He was already acquainted with Joe Lubin, one of the cofounders of Ethereum, and he introduced me to Joe over a call. It was very informal. At the end of the call, Joe was saying like, do you want to join us, work at ConsenSys and find a product or project that you're interested in working on? Shortly after joining ConsenSys, I met a couple of other people who were equally interested in infrastructure and what infrastructure for blockchain could mean, and we started working on Infura almost immediately as initially an internal project for ConsenSys teams and then opening it up as a full-blown public offering.

Camila Russo: Can you describe more about what forming a team for a blockchain infrastructure actually means? What infrastructure is needed for blockchain technology?

Offloading the Node Burden

EG: The analogy I will use for people is to say, back in the day when you're using Kazaa and LimeWire, and these other peer-to-peer sharing networks and systems, and if you wanted access to this information, you had to run the software, you had to run a BitTorrent client to be able to connect to the BitTorrent network. It's exactly the same thing. If you want to participate in whether it's Bitcoin or Ethereum, you have to be connected to this network, because it's inherently different from what we traditionally see as the web. It's a decentralized network. It's a peer-to-peer network, and everybody has to run the software to be able to use the technology.

When I first joined ConsenSys, and I was looking around at all of the cool things people were building, the common thread and theme was that these were really smart people engaged with all of the possibilities of what they were building.

But the connection to the network that they had to manage was kind of an afterthought, or sometimes an annoyance of, we're really interested in building and solving this problem with the smart contract layer, we're not interested as much as having to maintain this node. Because for you to be able to participate in the network, you have to run this node software that's always up to date. It's what keeps the database underneath it in sync and aware of what's going on in the network. Because if that starts lagging behind, you can't transact on the network, you're basically dealing with stale data.

CR: The main piece of infrastructure that you saw missing was this ability for people to be able to rely on someone running the node without them having to go through that hassle of doing it themselves?

EG: The thing was, people were spending more time than they expected maintaining this node, and it was getting to the point where they didn't want to put as much time and energy into it as they were having to. Because as people coming from a web development background with traditional systems, maybe you were building something integrated with SMS and you were using tools like Twilio, and other types of API's that are available to web developers, you don't have to run that infrastructure. There are ways that you can offload that burden from your development team so that your team can focus on solving the problems that are core to your product. That was the model that we have seen work well for the traditional web space and we felt like there was an opportunity to have a similar product for the blockchain space that also solved developer problems.

“There are ways that you can offload that burden from your development team so that your team can focus on solving the problems that are core to your product.”

CR: So this was 2016 when Infura was founded. Right now, almost five years later, how much of the Ethereum infrastructure is Infura running? As a percentage, how many of Ethereum nodes are under Infura’s control?

EG: We run dozens of nodes. That number fluctuates day to day, based on how many we need to run based on traffic. But the thing is, there's the site ethernodes.org that tracks on a given day how many nodes are currently running on the network. I think Etherscan also has a chart on this. I'm going to pull it up really quick because I haven't checked recently. I'm curious what the number is today. Last time I checked, it was something around maybe 7,000 or so. But it looks like currently on the network ethernodes.org, they're just under 10,000 nodes running for the Ethereum mainnet. We run dozens of those.

That's where that's one of the pieces of information that comes across and it's something that it's hard for us to disprove. People think, oh, Infura runs more than half the network. That's not true. It's not cost-effective for us to do so and it's also not necessary. What we see ourselves as more as a cloud-optimized Ethereum node. We don't just run Ethereum nodes on the backend, and it's like one node conserve 100 users or something. We use these nodes to pull data and push data from the peer-to-peer network, but we've built customized systems that we use to help scale access to this information so that maybe a single node can handle something like 10,000 requests per second for what's the latest block information.

“People think, oh, Infura runs more than half the network. That's not true. It's not cost-effective for us to do so and it's also not necessary.”

Now, we build systems kind of around that, that can cache and more efficiently serve that data so that we can serve at 100,000 requests per second. That started out as a cost optimization for us, but it turned into the evolution of how we viewed our infrastructure. Everybody should run their own node. But that doesn't necessarily mean everybody should run their own node on their own laptop.

What we saw is that more and more people will want to have control over this infrastructure and we're trying to create tooling to help them do that. But the cloud as a tool isn't going to go away even as decentralized protocols are adopted. The better option and opportunity is to allow people to run pieces of the Infura infrastructure with more direct control over it. We see ourselves as a cloud-optimized Ethereum more so than a collection of nodes.

“What we saw is that more and more people will want to have control over this infrastructure and we're trying to create tooling to help them do that.”

CR: I'm not sure I understand that what it means to be a cloud-optimized Ethereum node. Is it that you're providing direct access to each individual node? What exactly makes it different?

[ … ]

Paid subscribers have access to the full transcript, including sections on:

• Cloud-optimized Ethereum“Our goal was not to make it so that people didn't run nodes. Our goal was to make it easier for people to quickly get started exploring Ethereum.”
• Centralized service in a decentralized world“It made me feel pretty uncomfortable with the amount of reliance that people have on us. It's something that, that we're sometimes concerned about, we don't want to be a point of failure in the network.”“But imagine if it really was 100% market share that we had, and we were the only way that somebody can interact with Ethereum, then the vision of Ethereum really has failed at that point (…) We've believed that as the ecosystem grows, as the customer base grows, there's enough room in here for alternatives to Infura.”
• Infura outage “We are going to make sure that we have more testing in place to quickly vet new versions and have the ability to quickly roll them out within our infrastructure so that we're always prepared and ready to roll them out if and when we need to.”
• Proof-of-Stake impact on decentralization “For me, being able to remove proof-of-work and move to proof-of stake-systems and allow more people to participate in that with this upcoming ETH phase 2.0 launch is a great step forward in terms of really tackling decentralization as ideology, I think goes much further than optimizations and allowing more people to run nodes.”
• Organic boom“The attitude is not I'm building this quickly because it seems like there's an opportunity here. It’s, I noticed that there was this problem that needed to be solved.”
• Adoption“I don't think that we've done a great job attracting users in the first couple of years, or the first year and a half of Enzyme. I think a lot of that has been down to the UX and UI problems, and I think that, hopefully, we have got that into a much, much better place for V2.”
• Not Ethereum-only “We are starting to branch off from just this Ethereum 1 service. There's an opportunity for us to maybe get involved in other parts of infrastructure that are interesting, maybe something in Layer 2.”

Subscribe now so you don’t miss any of The Defiant content. Subscribers reading this post: Head to posts marked with the little lock to see the full content.

The Defiant is a daily newsletter focusing on decentralized finance, a new financial system that’s being built on top of open blockchains. The space is evolving at breakneck speed and revolutionizing tech and money. Sign up to learn more and keep up on the latest, most interesting developments. Subscribers get full access at $10/month or $100/year, while free signups get only part of the content.

Subscribe now

About the founder and editor: Camila Russo is the author of The Infinite Machine, the first book on the history of Ethereum, and was previously a Bloomberg News markets reporter based in New York, Madrid and Buenos Aires. She has extensively covered crypto and finance, and now is diving into DeFi, the intersection of the two.