Chris Feng, the Co-founder of Chainbase, an omnichain data network provider, says that the value of on-chain data is largely untapped. He estimates that the number of developers exploiting on-chain data is lesser than the number of developers working at major internet companies.
Chainbase provides a data interoperability layer for blockchains. It is positioned in the market as an ‘infrastructure provider’. Interoperability and fragmentation are the hottest topics in blockchain right now. Does Chainbase have a solution for these issues?
In an insightful conversation with The Coin Republic’s Editor-in-Chief, Varuni Trivedi, Feng highlighted the need for chain abstraction. The former consultant discussed the nuances of data decentralization and explained why AI-crypto integration will be normal in the future.
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Chain Abstraction is Vital for Exploiting On-chain Data
The blockchain industry is plagued with fragmentation and a lack of interoperability. Numerous leaders and founders have emphasized that these are among the biggest barriers to mass adoption and innovation. Chris Feng is one of those voices.
“The blockchain world has created many silos, too many chains and data islands, fragmented information and complex cross-chain operations hinder the ability to fully realize the value of interconnected information. Therefore, Chain Abstraction is a vital topic,” Feng noted.
Chain abstraction means achieving a high level of interoperability between blockchains. Wallets and decentralized applications (dApps) will work seamlessly (or become accessible) across chains if chain abstraction is achieved. The objective is to make the user’s interaction with the blockchain less daunting. A friendly UX will lead to an increase in adoption.
As per official documentation, Chainbase is focused on enhancing data interoperability. Data interoperability is a fundamental concept that applies to all blockchains. It is the facility that allows different blockchains to receive and transfer data without special arrangements.
“We need to lower the barrier for extracting value from on-chain data. And we also need to bring more diverse data to the chain to create new possibilities.”
Theia: a Crypto World Model
On August 15th, 2024, Chainbase launched its ‘milestone’ project, Theia. Theia is an AI-powered ‘Crypto World Model’ that interprets on-chain data. The model’s chatbot answers questions about on-chain data. Theia is fed data from Coinmarketcap (whitepapers, official blog posts, and news articles) of the top 2000 projects by market capitalization and credible research reports on these projects.
World Models are alternatives to Large Language Models (LLMs). Feng pointed out that LLMs are useful for human-like interaction but fall short against mathematical questions and transaction queries. This is where World Models shine. World Models are designed to capture knowledge from a world or an environment to simulate that environment.
“…world models aim to simulate and understand the external world to perform tasks and make decisions in complex settings,” Feng explained. He added that while world models will act like the user’s digital twin, LLMs are limited to being assistants.
“The key here is to simulate the environment before executing the task. So in a specialized field like crypto, where there is a wealth of domain-specific knowledge not commonly found in social media and where data is not just plain text or images, LLMs can be significantly hindered. LLMs are often limited to task planning without the capability to extend further or make close loop decisions.”
Theia is a one-of-a-kind dedicated blockchain Chatbot. It gathers data on transactions, smart contracts, and NFTs, among other on-chain data assets. Theia is equipped with multiple data analysis tools to help identify patterns. The AI model records and learns from user queries and user feedback.
The official full name of the first version is Theia-Llama-3.1-8B; as per Chainbase, Theia-Llama-3.1-8B is fine-tuned from the base model Llama-3.1-8B-Instruct. It was open-sourced on October 11th and developed especially for the crypto sector.
Notably, Theia-Llama-3.1-8B outperformed leading LLMs such as ChatGPT-4o, Claude-3-Sonet, Gemini-1.5-Pro, and Llama-3.1-8B-Instruct, against Chainbase’s benchmark for Crypto AI models.
Are LLMs Overrated?
LLMs have been among the most lucrative applications of AI in the past three years. OpenAI’s ChatGPT, Gemini, Llama, and other models have dominated discussions and even the news from the AI beat. Major flaws in these models have been spotted. Chris explains where these models fall short and how World Models are different.
Feng highlights two big challenges that LLMs face. First is the lack of high-quality datasets (on-chain data). “There are a lot of projects in the on-chain data space, very few systematically produce high quality datasets fit for model training. Most remain at the RPC [Remote Procedure Call] and raw data level or are focused solely on indexing or contracts. The quality of the model heavily depends on good data.”
Chainbase Labs has extracted high-quality on-chain data (in Petabytes) to train AI models per Feng. They recently contributed some of that data to Google’s BigQuerry to ‘benefit the larger developer community’.
The second challenge is using different models to meet the native needs of the crypto space. As mentioned before, LLMs fall short when solving mathematical problems and transaction queries.
Apple Insider reported that a recent study by Apple’s AI scientists demonstrated that popular LLMs (the latest iterations of Google’s Gemini, Meta’s Llama, and ChatGPT, among others) lacked reasoning ability.
In the study, the models were instructed to solve 8th-grade Math questions. Since there was the possibility that the same questions were used for training these models, the questions were altered to varying degrees.
The alterations included adding, removing clauses, or changing numerical values. The scientists found that the models’ performance varied greatly upon making the slightest alterations in the questions.
“We found no evidence of formal reasoning in language models,” the study concluded.
Chainbase aims to make accessing on-chain data simple, easy, and ‘intelligent’. The Theia Chatbot allows you to ask questions about on-chain data in everyday English. Once you connect your wallet to Theia’s chatbot (called TheiaChat Alpha), you can access it.
Chris feels that, in the future, it will be difficult to classify projects as AI-based or crypto-based due to advanced integration. He added that AI will facilitate natural language interaction, while crypto will facilitate incentivization and value distribution.
The Data Decentralization Contradiction
The need for data decentralization – a distributed and shared manner of storing and transferring data has been strongly felt. However, decentralizing data infrastructure isn’t a simple process.
Chainbase adopted a centralized approach to product development to guarantee performance and security. This is contradictory to the value proposition of blockchain – decentralization.
Handling and processing of on-chain data is crucial. “Without proper management and architecture, on-chain data cannot be effectively utilized in real-world application, creating a contradiction,” Feng explained. He added that public blockchains are developed primarily by centralized teams.
“We have seen significant benefits from this approach. It has allowed us to achieve rapid iteration, 24*7 developer support, and no down-time despite handling over 500 Billion data calls.”
This year, with their contribution to Google BigQuerry and the launch of Theia, Chainbase kicked off its journey to decentralize.
Nevertheless, centralized teams cannot be relied upon for 100% of native crypto needs, Feng notes. Substantial data assets can be built by establishing standards and protocols. “This approach ensures that both quality and quantity are managed.”
Given that users are the data generators, decentralization is naturally called for. Therefore, a ‘community-driven network is essential,’ Chris emphasized.
Milestones, Soulbound Token (SBT), and Upcoming Updates
Chainbase bagged $15 Million in a Series A funding round in June to develop Theia and expand its community. Multiple web3 and web2 Venture capital firms participated in the funding round. Feng noted that presently, 26,000 developers across 8000 projects are associated with Chainbase. He added that the company has a runway of around 48 months, thanks to the Series A funding.
Launched 2 months ago, Chainbase’s onboarding campaign has attracted over 30 Million wallets. Over 1 Million of those wallets have interacted with the testnet.
‘Over 1 Million hold SBT, which would be the criteria for potential airdrop in the future’, Feng noted. According to the Chainbase official team, SBT is a non-transferrable token serving as proof of membership in the Chainbase network’s founding team.
54,321 SBTs were offered to the community, and all the NFTs were minted within 48 hours, as per Chainbase. Presently, TheiaChat is being used by over 300,000 daily active users.
This week, Chainbase will kick off its global ambassador program, a global talent scouting initiative. Feng said the program would cover Europe, India, and Japan, among other regions.
Official links:
Chainbase official: https://chainbase.com
