From Poker to Protocols
In 2014 Bryan Pellegrino was one of the world’s best poker players, winning more money than ever—and having the most boring year of his life. The change felt sudden. After tens of thousands of hours of grinding online, and a big finish at the 2012 World Series of Poker, only fools or those new to the game would now play him online. What had once been his life’s great pursuit, working to outwit and outplay other poker stars, was reduced to a chore.
Pellegrino had begun playing online poker at 15, well below legal gambling age, using an account his dad set up for him. Over a dozen years, poker helped Pellegrino travel the world for tournaments and for fun. He accumulated more than $500,000 in World Series of Poker purses alone. He spent 10 hours a day, for years, clicking through a half-dozen hands at a time. He’d won a fortune in return.
It felt incredible, he says, to be so good at something so hard. But poker had become a cul-de-sac. He knew, after he’d played this hand, there was going to be another, and another. There was no bigger point, no end goal. “I was just trying to be the best,” he says now. “Once I got there, I realized, hey—there’s no leverage. There’s no anything. I hadn’t realized until then, you need to focus on the utility payoff of what you’re doing.” So he closed his laptop and went looking for a payoff he could measure in more than money.
“I was just trying to be the best. Once I got there, I realized, hey—there’s no leverage. There’s no anything. You need to focus on the utility payoff of what you’re doing.”BRyan pellegrino
Today Pellegrino is the co-founder and CEO of LayerZero Labs, a company that set out to solve one of the most fundamental, yet most difficult problems in the world of blockchains and cryptocurrencies. Pellegrino and his LayerZero co-founders Ryan Zarick and Caleb Banister—best friends since they worked together in computer network research labs at the University of New Hampshire—built a protocol that enables blockchains to communicate with each other frictionlessly, so people and programs can move assets or information across chains cheaply, swiftly and securely. They’ve named their new venture LayerZero because it offers a foundation with which any application on any blockchain (layer 1 or layer 2) can integrate. The ability for users to send information between blockchains is central to the promise of Web3, which some think will be the future of the internet. In this vision, the internet is organized on decentralized global ledgers called blockchains, allowing people to connect without central servers to store permanent digital records.
The problem Pellegrino, Zarick and Banister are solving with LayerZero is that, today, moving data between two chains is expensive, tedious and insecure. Blockchains have been in operation since the late 2000s, each uniquely coded to excel at a different task. But no single blockchain has emerged as the standard. Even as the larger chains such as Bitcoin, Ethereum and Solana grow, dozens of others keep popping up. For data to move between blockchains today, a message has to wind through a blockchain bridge, a series of centralized servers. Navigating a bridge can require clicking dozens of times through multiple programs for anywhere from 10 minutes to an hour. And it requires that a user have a coin or token on the destination blockchain to pay for the transaction fee, called gas, which can add up quickly. Another issue LayerZero is solving for is security. Pellegrino found the state of bridge security technology “horrifying” when he looked into it in 2020. To move, for example, $1,000 worth of cryptocurrency from blockchain A to blockchain B, a person has to send a message from A through a middle chain, which validates the transaction, and then that middle chain tells B that A has moved the funds. But those middle chains make enticing targets for hackers to attack. Cryptocurrency hacks cost more than $14 billion in 2021. The weakness of existing bridge solutions make the entire crypto ecosystem vulnerable, and could hobble its wider adoption.
Pellegrino, Zarick and Banister began writing the code in early 2021 that would become LayerZero. Not a bridge, but rather a new kind of messaging layer, they believed the tool they were working to create would make all of Web3—apps, money, security, games—better. For average users, their protocol would run as seamlessly in the background as standardized tracks beneath a railcar. Pellegrino had finally found something with meaning, with a global payoff, in his words, a “Holy Grail” problem to solve. It was something worth his time in a way poker could never be.
Along the way, they caught the attention of others in the space. Sequoia Capital partner Shaun Maguire, who earned a physics PhD from CalTech, and had been tracking blockchain technology’s progression since the late ’90s, was following them. And after a notable tweet from Pellegrino in October of 2021, he and Sequoia partner Michelle Bailhe prompted the firm in 2022 to co-lead a $135 million Series A+ fundraising round. “LayerZero’s technology is the glue of crypto,” Maguire says. “It is the thing that stitches the rest of crypto together. The collective value is much, much greater than the sum of its parts. Bryan wants all of crypto to win, wants to make every pocket of crypto more valuable.”
Danbury, New Hampshire, had fewer than 1,000 residents when Pellegrino was born, and to him, it felt like a significant portion were his cousins, aunts, uncles, and grandparents. By age 4, he’d already sized up his hometown, says his mother, Audrey, and declared that one day he wanted to live in a place where people were more different from one another. By age 6, he was such an evident math prodigy that his parents bought him a guitar, thinking that if he was going to be an outlier, he’d at least have music to share with others. Their worry was misplaced. Pellegrino was also unusually empathetic. Audrey recalls a youth soccer game when a larger kid crashed into Pellegrino hard enough to send him sprawling. “Don’t worry,” she told her son, “The bigger they are, the harder they fall.” He stopped playing to correct her, saying, “Mom, that is not nice.”
Pellegrino’s dad, Steven, was a UPS driver who got up early and came home late, so Friday and Saturday nights at the Pellegrinos’ were special, and all about games. The four siblings, Deanna, Manie, Bryan and Angela, bonded over long hours playing Risk, Monopoly, Stratego and bid whist. Pellegrino was a game savant, always willing to play, and winning almost all the time, at almost all costs, even if he had to stay up all night to do it. His family didn’t know it then, but these ordinary game nights would come to shape Pellegrino’s life and livelihood.
In high school he was a good kid—he took after his parents, abstaining from smoking or drinking—though he was not above reproach. When he was 15, Pellegrino spent a week at Georgetown University as part of the Presidential Classroom program, wherein bright high schoolers toured the nation’s capital and met political leaders. The idea was to inspire kids to go into public service. Instead, Pellegrino got into poker. A fellow participant invited him to play and Pellegrino bought in with $20 his mom had given him as spending money. His childhood obsession with games honed his sense of risk and strategy, which paid off almost immediately. Before the night was over, he’d turned $20 into $60, which he spent on a Georgetown sweatshirt that he’s pretty sure he still has. When he got home, he handed his dad another $50 to get his first online account started.
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Throughout high school, Pellegrino ran track, wrestled—and played online poker. Senior year, he barely studied and still graduated third in his class. He chose the University of New Hampshire out of frugality as much as anything. But the decision worked out. It was through working at a networking lab that he got close to Zarick and Banister, who would become his lifelong friends and LayerZero co-founders. And the college broadened his horizons. When he was 19, he applied to a study abroad trip to Budapest, Hungary, at the insistence of his brother-in-law, who had done the same trip years before and loved it. Pellegrino submitted his application at the deadline, got accepted, and truly left home for the first time. “I cried like a baby when I dropped him off,” Audrey says. “He cried like a baby. We never thought that he would never return home.”
During his first week in Budapest, Pellegrino lived in a hostel with fellow students while they were expected to find their own apartments for the semester. Pellegrino was in an elevator one day when the doors opened for Melanie, a French architecture student. She saw him and thought, “Oh, no. This is trouble,” she remembers with a laugh. With a mini French-to-English dictionary in her pocket, Melanie got into a cab with Pellegrino, and they spent the day together. “Our first conversation, she had to look up every word, one at a time, with this little book,” Pellegrino remembers. “I don’t know what it was, but it was definitely there for sure.” Melanie asked him to split an apartment with her, strictly as roommates. That arrangement, she says, lasted about a week. They were married two years later.
In Budapest, Pellegrino earned enough money playing online poker to justify dropping out of school. He gave himself six months to make it as a pro or resume computer science studies. When Pellegrino told his family he wasn’t going back to school, his mother remembers telling him that she’d support him no matter what, so long as he kept his nose clean, paid his taxes, and stayed safe. “He could do anything he wanted,” Audrey says. “If he goes busto—that’s his word—he knows he can come home. There’s always home. He has a very tight-knit family.”
From this moment, until 2011, when America outlawed playing online poker for money, Pellegrino played poker 70 hours a week, most of the time at a computer. He was obsessed with the game, optimizing his performance and learning to make decisions about risk and reward in .3 seconds, over and over and over. He and Melanie traveled the world, hitting 80 countries, often while lugging a full-size computer tower across borders. Melanie remembers customs agents stopping them at airports, insisting that the computer proved Pellegrino must be traveling for work. But he explained he was a dedicated online poker player—and that’s just for fun, right?
The Pellegrinos were living in Austin, Texas at the time. Because online poker is where players could make the most money and have the most frequent opportunities to play, Pellegrino was ostensibly out of work. He agreed to join the fantasy sports betting site BuzzDraft and had become CEO by the time the company was acquired by another fantasy sports betting company shortly thereafter. Then, he went to Las Vegas to play in the World Series of Poker in 2012, where he finished second in one of the events.
By 2013, Pellegrino had some money in the bank and was curious about the Bitcoin buzz between his brother and his brother-in-law. Cryptocurrency caught Pellegrino’s attention for a number of reasons, one of which was that it was a new kind of way to place a bet. He understood the cryptography and distributed systems that undergirded the blockchain, and he felt like he was good at crunching the odds of a payoff. And like poker, some cryptocurrencies paid out, and some went bust. The three men bought computers to mine Bitcoin, but then the cryptocurrency’s value plummeted in 2014. Its exchange collapsed, a Bitcoin Foundation board member was arrested for money laundering, and hackers repeatedly stole hundreds of millions of dollars. It had been a bad bet at the time. Pellegrino, now living in Canada, where online poker was legal, went back to playing. This is when he found himself listless, absent challenging competition, when he should have been having the year of his life professionally. “The game had changed,” Pellegrino remembers. Unlike so many other pros, he wasn’t driven by the money. He wanted a competitive challenge. And one with a meaningful payoff.
For about three months circa 2015, Pellegrino actually contemplated retirement. He and Melanie took their infant son around the world to look for their ideal home, hitting 12 countries in 12 months. He was restless but not anxious. Then one day, as he watched YouTube, the algorithm served up a video of a DeepMind artificial intelligence called Agent57 playing Atari. Agent57 had, in fact, “learned” to play all 57 Atari games starting from zero, just pixels on the screen. As the AI failed and failed, it learned, and quickly taught itself to surpass any human. “This was one of the first steps toward artificial general intelligence, something that could take information with no context and learn to be incredible at it,” Pellegrino says. “That was super exciting. That got me thinking about reinforcement learning generally—machine learning, AI. Just excited about the field.” Pellegrino, awed, thought back on how the fantasy sports players he’d seen at BuzzDraft racked up millions in wins without the aid of machine learning. “I said, ‘That’s crazy. There has to be a better way.’ So I looked at all the sports and said, ‘OK, I hate baseball, but it has the best data set. Let’s go with that.’”
“I looked at all the sports and said, ‘OK, I hate baseball, but it has the best data set. Let’s go with that.'”BRYAN PELLEGRINO
After their year of travel, the Pellegrinos settled back in Vancouver—it had a school the family loved—and Pellegrino found himself drawn to work on the baseball-AI idea. It was another puzzle to solve, a game to design. Pellegrino hypothesized that he could build an AI to crunch the data points to predict a pitcher’s pitch-by-pitch performance against a batter. It had been years since he’d routinely written code, but one thing led to another and, as can happen to a guy like Pellegrino, he wound up creating a machine learning tool he sold to several Major League Baseball clubs in early 2016. He still relishes the day when the phone rang and on the other end, ready to talk business, was Billy Beane, the Oakland A’s executive immortalized in “Moneyball” for his dedication to statistical analysis. Pellegrino had addressed a big problem for a few pro sports teams. But he wanted to work at something, and be the best at something, that would matter more.
He was becoming increasingly curious about cryptocurrency as a place to do that work. In late 2016, Pellegrino bought into Bitcoin with “a renewed conviction.” What started as an investment turned into Pellegrino building on the Ethereum blockchain, reading white papers and connecting with the community. He immediately saw how hard it was for people to start new cryptocurrencies. “It was a miserable process,” he says, one inaccessible for anyone without coding sophistication. At this time, a friend introduced him to Daniel Chen, then an engineer at Andreessen Horowitz. In 2017, the two friends decided to pursue something big—writing code that could democratize cryptocurrency launches. They launched OpenToken in 2018 as a platform that offered regular people the chance to launch their own cryptocurrencies. But both Pellegrino and Chen moved on to other projects as the work they did with OpenToken led to product pivots and an acquisition. Pellegrino turned back to experimenting with AI and gaming.
In the summer of 2020, he had a breakthrough, further solidifying his credibility as a master of games and machine learning. Pellegrino, his longtime best friends and co-founders Zarick and Banister, along with Facebook AI’s Noam Brown, published a research paper that described their poker-playing AI, named Supremus. The AI clobbered the world’s previous best poker AI, and some of the world’s top pros. A key insight: players do not always optimize their odds, but are likely to play in such a way that gives them the fewest regrets about the outcome. Their paper has since been cited in game theory research published by DeepMind, the Alphabet AI lab. “All my life, I’ve just liked to work on hard problems,” Pellegrino says. “More than anything else, that’s what attracts me.”
In the fall of 2020, the Binance Smart Chain launched. As a rare non-Bitcoin, non-Ethereum blockchain product, it fascinated Pellegrino. The cryptocurrency exchange built a new blockchain designed to make it relatively easy, cheap, and fast for users to conduct transactions among more than 300 cryptocurrency tokens. Pellegrino decided he wanted to test this new tool. He lassoed Zarick and Banister and began, as so many technologists have over the years, by trying to create a game. The goal was to leverage the quick throughput and cheap transaction cost of Binance Smart Chain to play this game they’d invented—generating a bunch of gladiators to fight to the death—and in so doing create an NFT of the winning gladiator. The NFT would be stored on the Ethereum chain, a popular chain for NFTs but relatively inefficient and expensive for the work of gameplay. They soon realized that they had to move the NFT more or less manually, using a bridge they built themselves. The other bridges they could’ve used were too susceptible to hacking. They’d hit upon an aha moment: If existing bridges were a liability for moving an NFT, the risk in moving actual money was enormous.
They realized they needed more than a bridge. They needed a foundational code layer the bridge could be built upon to make it secure. But, more than a decade into the blockchain revolution, such a thing didn’t exist. And other multi-chain bridges were only moving “wrapped” cryptocurrencies, not NFTs or other kinds of data. Pellegrino says the most fundamental need was to get a generic message—the simplest, barest information packets—to operate across blockchains. What solution could facilitate that kind of interoperability among every sort of chain moving any kind of data? Pellegrino had found his big project, a challenge that could pay off in a way that no poker hand ever could.
The LayerZero team spent months hardening their messaging protocol, and in late May 2021 released a white paper, “LayerZero: Trustless Omnichain Interoperability Protocol.” The paper laid out how their free, open-source protocol would be the first to enable direct transactions across all blockchains while remaining decentralized, transparent and permanent. They never shopped their project as a company; Pellegrino smiles when he says LayerZero never created a sales deck. But stealthily, Pellegrino, Zarick and Banister were leveling up. When the renowned co-founder of SushiSwap, who goes by 0xMaki, left that decentralized exchange, he could’ve taken a job anywhere, Pellegrino says. But Pellegrino dropped him a Twitter DM and soon coaxed him aboard to integrate new clients and find new business for LayerZero.
In October 2021, feeling exuberant at the 0xMaki hire, Pellegrino tweeted: “We’re legitimately assembling the greatest team in crypto and nobody even knows about it yet.” Sequoia partner Michelle Bailhe saw it and sent a DM. “I didn’t know him,” Bailhe says, “but his contributions to crypto Twitter were optimistic and interesting. When Shaun and I met him, Bryan’s intellectual horsepower and clarity of thought on one of the hardest problems in crypto was compelling.” As it happened, Maguire had been an angel investor in OpenToken, and Chen, Pellegrino’s former co-founder at OpenToken, would soon become a visiting fellow at Sequoia.
Bailhe and Maguire recognized that LayerZero was, in one sense, tackling a massive, future-internet-shaping problem. It was, in another sense, inventing plumbing. The internet today is built on similarly boring breakthroughs. Before the creation of Transmission Control Protocol/Internet Protocol (known as TCP/IP), the varied intranets that linked universities and government offices in different countries had no way to transmit data to each other. Further back, people standardized electrical currents, fire hoses and hydrants and myriad other things in which interchangeability determines the usefulness of two things together. They saw that Pellegrino wanted to build this kind of basic infrastructure, something worth his time and expertise because it had such a huge potential payoff for so many. And when he came to Sequoia to negotiate the terms of business, Maguire says Pellegrino showed that same spirit of wanting everyone to come out ahead.
“Heads-up poker is basically the same skill as negotiating,” Maguire says. “It’s reading people, knowing when they’re bluffing, all that. So despite the fact that Bryan has that skill, when he negotiated with us, he didn’t play poker, which was very interesting. He was just 100 percent upfront and direct. He said all of his constraints and basically implied, ‘Look, if I wanted to go negotiate and be a jerk and all that, I could do it. But I want to build a partnership with you guys.’”
In March of this year, Pellegrino, Zarick and Banister launched their own proof-of-concept in Stargate, an application built on LayerZero that helps to move funds between blockchains smoothly. In its first 10 days, people moved more than $250 million worth of crypto assets using Stargate, which helped to get other applications to adopt LayerZero. Pellegrino and others in the crypto community saw it as an unmitigated success. His inbox is full, he says, of potential partners. But outreaches aren’t the same as customers or collaborators.
What lies ahead is anyone’s guess. Hundreds of developers are now working on applications that incorporate the free, open-source code of LayerZero, promising to flatten the silos that individual blockchains have built. Take a platform like OpenSea, the largest marketplace for NFTs. It had built three parallel versions of itself, effectively, one each for users of Ether, Solana, or Polygon. But none of the versions could transfer cryptocurrencies, information or digital art between them easily or affordably because they were all on different blockchains. By adopting LayerZero, OpenSea could allow a user holding any of those coins to spend freely on anything on the platform.
Pellegrino’s time these days is spent on business development, strategy and honing the product. And he now has three kids ranging in age from 8 years to 11 months, so he also spends time getting them up for breakfast, fed and out the door, playing little word games along the way. “In those short moments with my kids… when we’re in the car, we’re not just sitting, we’re doing something. (My oldest) loves this game where we throw out a letter, and on the entire commute, we’ll just throw words back and forth on that letter.” Of course, Pellegrino has also been playing cards with his oldest son since the boy was four. He says he’s a family man like his dad, working to spark in his kids the same excitement for games that his dad instilled in him. “I try to celebrate even a small moment,” he says of the car rides. “Then I go off and I do my thing.”
At work, he has no direct reports and no limit to the number of ways his platform could plug into the next version of the internet. “We’ve built something awesome,” he says. “But there’s a lot of awesome technologies out there that don’t get used. For us now, it’s purely expansion and adoption. It’s getting all of the largest projects in the world to build on top of us. To get every developer who’s thinking cross-chain, to think of us.
“The prior stage was launch, which was great. But as soon as you launch? People forget about the past. And now you’re in a totally new game.”