“When building mechanisms that decide high-stakes outcomes, it’s very important for those mechanisms to be credibly neutral” - Vitalik Buterin
Gelato’s goal is to become Web3’s automation protocol, a key infrastructure piece used by developers on any blockchain to automate the execution of transactions within and across them.
Today we are already seeing the huge variety of use cases that developers can build on top of Gelato, ranging from simple automated salary payments to very complex automated liquidity management strategies on Uniswap v3. Check out the current leaderboard to get a sense of all the amazing features developers are building using Gelato today.
The beauty of Gelato is that it supports any automation use case while being neutral around which transactions should be executed and in what sequence (FIFO). No one should be able to control what developers will use Gelato for and all projects should get an equal treatment for the jobs that they want automated.
Why credible neutrality is important
Credible neutrality is a key characteristic that makes decentralized protocols like Ethereum as successful as they are. For example, large companies such as Coinbase are adopting Ethereum because it is credibly neutral and simply focuses on providing users with a decentralized smart contract platform that is open to everyone and has no special interests that might favour some projects over others.
On the other hand, Coinbase has not adopted blockchains such as Binance Smart Chain, as it originated from one of Coinbase’s primary competitors, meaning if they would support the growth of BSC, Coinbase would indirectly support the growth of Binance. The same phenomenon holds true for any applications we build on top of Gelato ourselves.
Let’s take G-UNI, which is an automated liquidity management system on top of Uniswap v3, with currently over $500M in TVL, as an example to illustrate how building our own use cases might make Gelato seem less neutral. G-UNI has grown so big that it has become a completely separate project within Gelato with a small dedicated team working on it full time.
Now, G-UNI is not the only automated liquidity management system on Ethereum, there are other protocols tackling similar problems. For these projects, using a network like Gelato would be perfect because they could simply define all their strategies in immutable smart contracts and have Gelato execute these strategies trustlessly on their behalf.
However, to this date, none of these G-UNI competitors have adopted Gelato as their automation infrastructure, probably because they feel similar to how Coinbase feels about adopting BSC.
To gain wide adoption as a decentralised infrastructure protocol, it is imperative to remain neutral and be able to “convince a large and diverse group of people that the mechanism at least makes that basic effort to be fair“ (Vitalik Buterin).
For Gelato to retain its credible neutrality, we will have to make sure that not only the rules of the network enforce that jobs created by developers are treated equally, but also that projects who are in need of automation feel that they are building on top of a credibly neutral network whose core developers won’t just build their own product that might receive special privileges by Gelato at some point in the future.
Steps to ensure the long term neutrality of Gelato:
Gelato’s core development team will focus its efforts exclusively on the underlying network itself, rather than individual applications built on top. As a first step to accomplish this, we will soon make a proposal that G-UNI should be spun out of Gelato into its own separate project with its own community while undergoing a rebrand which will manifest its separation from Gelato from a communications perspective.
The time for the core Gelato development team to build specific use cases ourselves on top of the network should come to an end.
A couple of months ago, most of the transactions on the Gelato Network came from applications that were built in house, for example Limit Orders, G-UNI and liquidation protections. However, since the launch of Gelato Ops and the Multichain Relay API, which enable any developer themselves to easily let Gelato execute their transactions in real time or recurringly in the future, hundreds of development teams have started using Gelato for a variety of use cases. Our own applications now make up less than 5% of the total transactions executed on Gelato.
Moreover, with the recent rise of G-UNI adoption, many users got confused and even Bankless falsely reported that we “pivoted” into a liquidity management system. To retain our clear narrative of being an infrastructure project, we need to focus our messages to be only about the network itself and not specific projects we built in-house.
The bootstrapping phase of Gelato is over. We are now entering the growth phase, fueled by organic growth from external web3 development teams.
Looking into the future
Spinning out the successful use cases that we built on top of Gelato into their own separate teams and communities will result in a stronger, more neutral core for Gelato. We have a lot of plans for 2022 including further decentralization of the network, enabling developers to schedule cross-chain automated transactions and enabling the usage of off-chain data with crypto economic guarantees to trigger executions.
I think we are now entering a critical stage in the development and growth of Gelato and doubling down on our neutrality and long term vision of becoming the decentralized automation infrastrastructure for Web3 is an important step to ensure the network’s upcoming growth is based on the strong foundation of the right values.
Stay tuned for an upcoming announcement about the practical logistics of how we will facilitate making Gelato more neutral by spinning out G-UNI.