Introduction
Virtual Labs is a cryptography company with the firm belief that user experience is the single
largest issue holding back web3 adoption. The Virtual team identifies these problems to
specifically include latency, gas, and wallet frictions.
Virtual's solution is Virtual Rollups, the first deployable omnichain rollups with sub-millisecond
finality. DApps built on Virtual Rollups accomplish web2-style UX through:
● Zero latency
● ZeroGas
● Zero wallet clicks
● Full chain abstraction
This feature set is not entirely new as other blockchains have approximated seamless user
experiences before. The innovation of Virtual Rollup is specifically what all other previously
solutions have lacked: trustlessness.
Virtual Rollup achieves N of N Byzantine Fault-Tolerance through zero knowledge state
channels. ZK state channels are similar to the Lightning Network's state channel. With both,
they key advantage is self-verification.
With Virtual Rollups, the user is the node, sequencer, and validator of their own transactions. If a
user sends a token, makes a bet, or trades an asset, all parties within the ZK state channel sign
every message, ensuring full self-custody and the verification of their capital themselves.
Virtual Rollup's premier DApp is VDEX. VDEX is the first omnichain perpDEX with no slippage
and sustainable Bitcoin yield. Virtual Rollup DApps inherits all of the features of the underlying
tech, meaning VDEX is the first truly self-custodial and self-verified perpetual exchange.
Background
Virtual Labs was founded by José Betancourt in his dorm at Yale University. The original idea
was a protocol for self-verified data called Ontropy. Ontropy was a self-verified oracle that would
enable users themselves to verify price data for trading and randomness for gaming. Ontropy
was accepted into Binance Labs' Season 5 Incubator in October of 2022.
On April 20th, 2023 Virtual Labs closed its pre-seed round and pivoted to the idea of self-verified
transactions, utilizing the existing architecture of the self-verified data protocol. Nine months
later, Virtual Rollup V1 (henceforth VR1.0) was created and brought into the world with an initial
cohort of a dozen gaming projects.
VR1.0 worked perfectly in theory, eliminating latency, gas fees, and wallet frictions and allowing
the user to forget the game was decentralized. Demand for seamless UX was also proven, with
over 25 orders for VR1.0. However, the vast majority of these orders could not be completed
because integrating DApps to work with VR1.0 essentially required recoding the applications
from the ground up.
Armed with this feedback, the Virtual team created VR1.1 which can support orderbook
transactions as opposed to game moves, and VR1.2, which offers full chain abstraction. These
updates did not make Virtual Rollup universally scalable for all blockchain transactions, but
enabled support for all perpetual exchanges due to the lack of technical variety between
orderbook designs.
To demonstrate VR1.2, Virtual Labs built VDEX. VDEX will be the first perpDEX with no
slippage, full-self-custody, and will even be able to accept volatile assets as collateral, such as
Bitcoin and Ethereum.
Virtual Labs now employs 17 engineers and business developers across 6 countries.
Vision
The Virtual Vision is to live in a Web3 World. A world of self-custody, self-verification, and
self-control. A vision of ZeroGas, zero latency, and zero friction. An onchain internet where
users do not need to remember to buy a new gas token, realize that they have bridged funds, or
even know what chain they are on. They are not on Arbitrum or Solana, they are just onchain,
as if they were online.
The decision to move onchain will not be driven by fanaticism, to fervently favor one ecosystem
because of community, culture, or cult-mentality. No, companies and users alike will choose
Web3 over Web2 because of the security and protection it offers.
The future is onchain, but blockchain will win when people do not even know that they are
interacting with blockchains. This is the very reason why Virtual Labs is named as it
is—blockchain infrastructure should be virtually indistinguishable from web2 servers—the
experience should be simple and virtual, as if the complexity was never there at all. There are
no users in Web3 with poor UX, there will be no users in Web2 when Web3 has good UX.
DApps, not tokens, and users, not airdrop hunters, represent adoption. The day the parents and
grandparents of America and Africa alike use decentralized applications is the day this industry
achieves mass adoption.