Enhancing the efficacy of enterprise rollups
with blockchain technology
The concept of blockchain has been around since the early 1990s, but gained significant traction in 2009, when bitcoin went live. The technology, originally created to launch a decentralized, peer-to-peer electronic cash system without a central authority, has since evolved for uses beyond cryptocurrency.
In its essence, blockchain records transactions across multiple computers. It is a chain consisting of individual data storage units (“blocks”). Each of these blocks contains data, a hash, as well as the previous block's hash. The data can range from transactions to contracts, or even images. The hash of a block is its unique fingerprint, and the previous block’s hash is what links the individual blocks together. Blockchain can be used for various purposes and in different fields: In finance, cryptocurrencies and smart contracts are particularly important. Years ago, NTFs disrupted the arts through digital ownership of images or music. In supply chain management, blockchain can be used for tracking, and in governments, the technology can provide tamper-proof voting systems.
The graduates of our Executive Master in Digital Innovation and Entrepreneurial Leadership (EMDIEL), Luis Schliesske and Hilmar Orth, are making use of blockchain technology for enterprise rollups with their company Gelato.
ESCP: Luis and Hilmar, before we get into the details, could you please explain what enterprise rollups are?
Luis & Hilmar: Rollups are a new form of blockchains that are built in a more modular way than previous generations of blockchains such as Bitcoin or Ethereum. Specifically, they allow companies to launch their own rollups without needing to bootstrap a decentralized set of validators that are needed to secure the network. This makes it way more efficient and easy to launch a new blockchain on platforms such as Gelatos's Web Cloud Platform.
Enterprises are a prime customer of Gelato and the rollups we are hosting, because they enable companies to access digital assets exceeding hundreds of billions of US dollars, such as stabelcoins, tokenized treasury bills or crypto assets such as BTC and ETH, while enabling them to implement compliance rules and retain control over their products. As an example, if enterprises do not have their own blockchain, they are not able to prevent transactions on the blockchain they are operating on that violate OFAC sanction lists. If they have their own enterprise rollup, they have the power to implement their own policies of which transactions to accept and which to reject.
ESCP: How does blockchain support these enterprise rollups?
Luis & Hilmar: Rollups are blockchains in itself. Our thesis is that instead of companies all building on a single blockchain, which used to be the status quo until recently, every company will have their own blockchain.
Gelato is built to provide the required platform to realize exactly that. In just a single click anyone can deploy their own enterprise-grade rollup to build any type of web3 application that can interact with any digital asset available on any chain.
ESCP: Which concrete areas can rollups help companies with?
Luis & Hilmar: Rollups are excellent for compliant financial use cases such as lending, borrowing, trading, liquidations, settlement and the issuance of digital assets.
ESCP: How did you first get the idea to launch a blockchain-based company that supports the deployment and scaling of enterprise-grade roll-ups?
Luis & Hilmar: We were building financial applications on top of existing blockchains ourselves until we realized that the infrastructure was too immature, lacked scalability and customizability in order to onboard existing companies to integrate web3 applications into their day to day offerings. After seeing companies such as Coinbase and Binance go the route of launching their own chains, which they had more control over, it became apparent to us that every company will eventually need their own blockchain, and that there is a huge market opportunity for a platform that provisions them effectively and reliably.
ESCP: How easy or difficult was it for you to get funding for this idea?
Luis & Hilmar: We raised a total of USD 23 million for Gelato. Many crypto-native VCs saw the need for such a platform, especially once the market provided sufficient evidence by having over 100 rollup chains already live today.
ESCP: How long has your company been around and how has it evolved since the very beginning?
Luis & Hilmar: We founded Gelato in 2019 and raised our first round in 2020. We started out by focusing on automation of existing blockchain applications before going deeper into hosting blockchain infrastructure ourselves. The industry has evolved massively since we started on all levels of the blockchain stacks. We realized that if you do not reinvent yourself every 12 months, then you are just slowly dying in crypto. Constant research, product development and innovation is required to keep up with the immense pace of the industry.
ESCP: What role did the Executive Master in Digital Innovation and Entrepreneurial Leadership play in the decision to launch this venture?
Luis & Hilmar: We got inspired to enter the blockchain industry thanks to an EMDIEL course that focused on emerging technologies. This was in 2016, a time where crypto was still very new and the industry extremely small. We immediately got fascinated by the potential of this new technology, especially since one of our fellow students worked at Mastercard at that time and actually led a blockchain project that gave us unique insights into how larger financial institutions thought about potential future applications. Without the EMDIEL, we might have entered a very different career path and industry.
ESCP: Which learnings from the programme have helped you take your business to where it is today?
Luis & Hilmar: Don't settle for where you currently are or the product you have just built. Always question how you can improve the status quo. Build speedboats, try things out and fail often and quickly. Analyze your available means and see how they can provide a competitive advantage for you. Tell a story and get people excited.
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