The Evolution of Blockchain Infrastructure: Insights from Bison Trails Co-Founder

In a recent episode of Validated, host Austin sat down with Aaron Henshaw, co-founder and former CTO of Bison Trails, to discuss the evolution of blockchain infrastructure. As a pioneering figure in the space, Henshaw provides valuable insights into the challenges and opportunities facing blockchain infrastructure providers, the impact of institutional adoption, and the future of decentralized networks.

The Genesis of Bison Trails

Bison Trails, founded by Aaron Henshaw and Joe Lallouz, emerged as a response to the growing need for professional-grade blockchain infrastructure. The journey began with a deep dive into the fundamentals of blockchain technology, starting with proof-of-work mining.

"The first thing we did was we actually built a proof of work mine out in the Pacific Northwest," Henshaw recalls. This hands-on experience provided valuable insights into the physical and engineering challenges of running blockchain infrastructure.

As the crypto landscape evolved, Henshaw and his team recognized the potential of proof-of-stake networks. Despite initial skepticism from many in the industry, they saw an opportunity to build a platform that could support multiple proof-of-stake protocols.

The Multi-Chain Vision

One of the key differentiators for Bison Trails was its focus on supporting multiple blockchain protocols. While many early infrastructure providers specialized in single ecosystems, Bison Trails took a broader approach.

Henshaw explains, "For whatever reason, the way that we approached it was like, let's just try them all." This strategy allowed Bison Trails to build a platform that could scale across various networks, providing a more comprehensive solution for customers.

The multi-chain approach presented its own set of challenges. Each blockchain has unique requirements and nuances, making it difficult to create a truly generic platform. Henshaw notes, "To actually do it becomes incredibly challenging, even though at the core, like it is fairly true that they are consistent."

The Role of Institutional Investors

The demand for professional-grade blockchain infrastructure was largely driven by institutional investors entering the space. Henshaw reflects on the impact of these early customers:

"Without those customers in the early days, like I don't know who our customers would have been, frankly." The need for secure, reliable infrastructure that met fiduciary responsibilities accelerated the professionalization of the industry.

This institutional demand led to rapid advancements in areas such as non-custodial solutions, slashing protection, and insurance options. As Henshaw puts it, "It actually helped, right? Make the whole industry safer through that demand."

The Exchange Infrastructure Challenge

While Bison Trails focused on validation and node infrastructure, centralized exchanges faced their own unique set of challenges. Henshaw provides insight into the engineering demands behind crypto exchanges:

"Crypto trading is a wild thing. And like, you can have like 10 or 50 X bumps in volume and like requests per second, in like an hour. And how do you build systems that are tolerant to that?"

This unpredictable nature of crypto trading volumes presented a significant engineering challenge for exchanges. Over time, these platforms have become more resilient, but the need for scalable, cost-effective infrastructure remains a constant concern.

The Shift to Read Infrastructure

As the blockchain ecosystem has matured, there has been a notable shift in demand from validation infrastructure to read infrastructure. Henshaw attributes this change to the growing number of developers entering the space:

"The simple answer is just developers continue to show up. And there's no slowing down. Like, it's incredible. Like the stuff that's going on in all of these ecosystems."

This surge in development activity has led to increased demand for RPC nodes, indexers, and other data layers that allow developers to build applications on top of blockchain networks. While validation infrastructure remains crucial, the growth in read infrastructure demand has outpaced it significantly.

The Challenge of Proprietary APIs

As infrastructure providers seek to differentiate themselves, many have introduced proprietary APIs and specialized tools. While these can offer benefits in terms of performance and ease of use, they also present potential lock-in risks for developers.

Henshaw advises developers to carefully consider these trade-offs: "You have to know the risks going in and you have to like understand if something happens, what would you do?"

He suggests that open standards, such as those used by The Graph, could provide a solution that balances performance with flexibility. However, he acknowledges that proprietary solutions may still be necessary for certain use cases, such as specialized accounting APIs for crypto transactions.

The Rise of Decentralized Infrastructure

The conversation also touched on the potential of decentralized infrastructure networks. While some criticize these approaches for potential latency issues, Henshaw sees promise in certain areas:

"I do think it's pretty exciting to have decentralized RPC networks decentralized full modes, right? There's a lot of trustlessness that comes from having all these different providers, like you're not relying on one thing, there's a lot more nodes, it strengthens the networks."

He points to projects like Pocket Network as examples of decentralized RPC providers that are showing promise, particularly in regions where centralized providers may have higher latencies.

The Cloud Provider Challenge

As major cloud providers like Google and Amazon enter the blockchain infrastructure space, traditional infrastructure companies face new challenges. Henshaw acknowledges the difficulty in competing with these giants on commodity services like RPC nodes:

"I don't know how exactly you're supposed to compete with them, because they have their costs. And unless they pass on their pricing to you at cost, which they're not going to, they can basically always beat you on price."

However, he sees opportunities for specialized companies to move up the stack, focusing on areas like smart contract development platforms, testing suites, and notification systems.

The Future of Blockchain Infrastructure

Looking ahead, Henshaw anticipates continued evolution in the blockchain infrastructure space. He sees potential in zero-knowledge proofs for both scalability and privacy, although he notes that much of this technology is still in its early stages.

On the topic of decentralization, Henshaw takes a pragmatic view: "Decentralization is a spectrum and I'm generally of the belief that you don't have to be at 100% decentralization today that could take 50 years. And as long as we're incrementing in the correct direction, these ebbs and flows will happen."

He emphasizes the importance of avoiding single points of failure, such as relying entirely on one cloud provider or region, while acknowledging that some level of centralization may be inevitable in the pursuit of efficiency and scalability.

The Personal Journey

As the conversation concludes, Henshaw reflects on his personal journey in the blockchain space. Having recently stepped down from his position at Coinbase Cloud, he's taking time to focus on family and recharge:

"What I'm trying to do is like spend time with my family. That's like my main goal. So I have a five month old daughter and have a three year old son and I have a wonderful wife and like with startups, when you're doing it, like you are not the best functioning member of your household."

However, Henshaw's passion for blockchain technology remains strong. He continues to stay informed about developments in the space, particularly in areas like interoperability, and hints at the possibility of future ventures with his co-founder Joe Lallouz.

Conclusion

The conversation with Aaron Henshaw provides a comprehensive look at the evolution of blockchain infrastructure, from the early days of proof-of-work mining to the current landscape of multi-chain platforms and emerging decentralized solutions. As the industry continues to mature, the insights shared by pioneers like Henshaw will be invaluable in navigating the challenges and opportunities that lie ahead.

The future of blockchain infrastructure is likely to be shaped by a complex interplay of factors, including technological advancements, regulatory considerations, and market demands. While centralized cloud providers may dominate certain aspects of the infrastructure landscape, there remains ample opportunity for innovation and specialization in higher-level services and decentralized solutions.

As developers, investors, and enterprises continue to build on blockchain technology, the importance of robust, scalable, and secure infrastructure cannot be overstated. The lessons learned from early pioneers like Bison Trails will undoubtedly inform the next generation of blockchain infrastructure providers, helping to create a more resilient and accessible ecosystem for all.

Facts + Figures

• Bison Trails was founded by Aaron Henshaw and Joe Lallouz, starting with a proof-of-work mine in the Pacific Northwest
• The company shifted focus to proof-of-stake networks, recognizing their potential early on
• Bison Trails aimed to support multiple blockchain protocols, differentiating itself from single-ecosystem providers
• The company was acquired by Coinbase in early 2021, becoming Coinbase Cloud
• Institutional investors and funds were key early customers for Bison Trails, driving demand for professional-grade infrastructure
• Crypto trading volumes can experience 10-50x spikes in volume and requests per second within an hour
• The demand for read infrastructure has outpaced validation infrastructure due to increasing developer activity
• Major cloud providers like Google and Amazon are entering the blockchain infrastructure space
• Decentralized infrastructure providers like Pocket Network are showing promise, particularly in regions with higher latencies for centralized services
• Zero-knowledge proofs are seen as a promising technology for both scalability and privacy in blockchain networks
• Aaron Henshaw recently stepped down from his position as head of engineering at Coinbase Cloud

Questions Answered

What is blockchain infrastructure?

Blockchain infrastructure refers to the combination of hardware and software components that facilitate the operation of blockchain networks. This includes validators, nodes, RPC endpoints, indexers, and other systems that enable the creation, validation, and querying of blockchain data. Infrastructure providers like Bison Trails offer professional-grade solutions to support the growing demands of blockchain networks and the applications built on top of them.

How did Bison Trails differentiate itself in the blockchain infrastructure space?

Bison Trails differentiated itself by focusing on supporting multiple blockchain protocols from the outset. While many early infrastructure providers specialized in single ecosystems, Bison Trails took a broader approach, aiming to build a platform that could scale across various networks. This multi-chain strategy allowed them to offer a more comprehensive solution for customers, particularly institutional investors who were interested in participating in multiple blockchain ecosystems.

What challenges do blockchain infrastructure providers face when supporting multiple protocols?

Supporting multiple blockchain protocols presents significant challenges due to the unique requirements and nuances of each network. While there are commonalities in terms of basic compute, storage, and networking needs, each blockchain may have specific configuration requirements, performance characteristics, or operational constraints. Infrastructure providers must build robust systems that can adapt to these differences while maintaining high levels of reliability and performance across all supported networks.

How has the demand for blockchain infrastructure evolved over time?

The demand for blockchain infrastructure has shifted significantly over time. Initially, there was a focus on validation infrastructure for proof-of-work and then proof-of-stake networks. However, as the ecosystem has matured and more developers have entered the space, there has been a substantial increase in demand for read infrastructure. This includes RPC nodes, indexers, and other data layers that allow developers to build applications on top of blockchain networks. The growth in read infrastructure demand has outpaced that of validation infrastructure.

What impact did institutional investors have on the development of blockchain infrastructure?

Institutional investors played a crucial role in driving the professionalization of blockchain infrastructure. As fiduciaries managing other people's money, these investors required secure, reliable, and compliant solutions for participating in blockchain networks. This demand led to rapid advancements in areas such as non-custodial staking, slashing protection, and insurance options. The involvement of institutional investors helped raise the overall standards of the industry and accelerate the development of enterprise-grade infrastructure solutions.

How are major cloud providers impacting the blockchain infrastructure landscape?

Major cloud providers like Google, Amazon, and Microsoft are increasingly entering the blockchain infrastructure space. This presents challenges for specialized infrastructure companies, as cloud providers can often offer lower prices for commodity services like RPC nodes due to their existing infrastructure and economies of scale. However, there are still opportunities for specialized providers to differentiate themselves by focusing on higher-level services, such as smart contract development platforms, testing suites, and specialized APIs tailored to blockchain-specific use cases.

What is the potential of decentralized infrastructure networks?

Decentralized infrastructure networks, such as Pocket Network for RPC provision, show promise in addressing some of the limitations of centralized infrastructure. These networks can offer increased trustlessness, improved geographic distribution, and potentially lower latencies in certain regions. While they may face challenges in terms of performance and ease of use compared to centralized solutions, decentralized infrastructure aligns well with the ethos of blockchain technology and may play an increasingly important role in the ecosystem as the technology matures.

How does Aaron Henshaw view the future of blockchain infrastructure?

Aaron Henshaw sees the future of blockchain infrastructure as an evolving landscape with ongoing improvements in scalability, privacy, and interoperability. He emphasizes the importance of incremental progress towards decentralization while acknowledging that full decentralization may take decades to achieve. Henshaw anticipates continued innovation in areas like zero-knowledge proofs and layer-2 scaling solutions. He also expects a balance between centralized and decentralized infrastructure solutions, with specialized providers focusing on higher-level services to complement the commodity offerings of major cloud providers.