By the late 2010s, very few individuals could claim to have had a bigger impact on the field of information theory than David Tse. His proportional-fair scheduling algorithm had laid the foundation for all wireless cellular communications. He was a tenured Full Professor at Stanford. And in 2017, he received the Claude E. Shannon Award for his research and contributions in telecommunications (the equivalent of the Turing Award for the industry).
Yet, he also knew that he was due for a career change. Each paper published only brought incremental change, and none of the problems in the field felt big and exciting to solve. Where should he next focus his efforts? As luck would have it, in 2018, one of his colleagues sent him a PDF of a whitepaper titled ‘Bitcoin: A Peer-to-Peer Electronic Cash System.’ Now this, this was interesting. This was worth changing direction for…
David Tse was born in Hong Kong to two middle class parents in 1966. His father was an engineer and his mother was an accountant. While he would ultimately follow in the footsteps of his father, initially, David wanted to be a scientist. “There was a TV series called Cosmos that aired when I was a kid. And, wow, I remember how amazing it was to discover that you could have a career as a scientist. That was my first dream job.”
David’s parents were not quite as thrilled about this early career choice as he was. “One thing you should know about people from Hong Kong in that era is that they’re extremely practical,” he tells me. “At that time, my parents were focused on surviving, not encouraging me to pursue my dream of being an astrophysicist. My dad told me to forget it, and so I became an engineer.”
While it wasn’t his first career choice, it was certainly one in which he was well prepared to succeed. By all accounts, David was an extremely gifted child, especially within the STEM disciplines. When I ask him about his strengths as a student, he gets pensive, slowly responding, “I love math. Math is kind of my true love. I could apply it to many different subjects. I could do stuff with it that other people could not.”
After excelling through middle and high school in Hong Kong, he’d fly himself halfway across the world to attend the University of Waterloo, Canada’s preeminent institution for engineering-focused studies (also the alma mater of Ethereum’s Vitalik Buterin). At Waterloo, David discovered a tribe of like-minded classmates that stoked his passions for both engineering and mathematics. He fondly remembers how he and his college friends would spend their weekends, “Like most college students, we’d go out drinking on the weekends. But instead of going out to party, we’d get drunk and then go to a classroom to do math problems.”
David thrived in Waterloo’s environment. Encouraged by his new friends, he picked up competitive math tests where he was able to further flex his academic talents. The pinnacle of this new pursuit was the annual William Lowell Putnam Mathematical Competition. A tournament familiar to anyone who has spent time in the domain of elite mathematics.
Open to any current undergraduate student in North America, the Putnam exam is infamous for its extreme challenge. The median score for the test is a 0 out of 120 possible points. There is no half credit given for partial answers (although this standard would be loosened in later years). The harsh scoring system presents an opportunity for David to explain why he loved the test so much, “You either get the problem right or wrong. There is no partial credit. That’s the real world.” His excitement is visible as he continues explaining the test to me. After describing the scoring system, he shares with great pride that the highest score he ever achieved was a 62/120. This was on his 1988 attempt after taking it four years in a row. The score put him in the top 100 out of all students who took the test that year. “That’s one highlight of my life,” he states fondly.
Watching David reminisce on his time at Waterloo and his Putnam achievement makes it clear how deeply his passion for math runs. He is not just highly proficient, but has a real appreciation for the discipline, a love for the beauty of the craft. I ask him to elaborate on why he feels such a strong affinity for math. Thinking back to his comments on the Putnam test scoring, I suggest that perhaps he may appreciate the rigidity of mathematics in contrast with the creativity of the arts. He makes an important distinction.
“I have to push back on the word ‘rigid.’ Math and engineering necessitate precise thinking. There’s only one correct answer. You have to be precise in your outcome. There’s no ambiguity there. But there is a lot of creativity in how you model a program or arrive at the answer to a mathematical equation. There are multiple ways to get to the same answer. Creativity comes in many forms, but in the sciences, there is the element of precision.”
It seems to be the objectivity in outcome that appeals to David. He agrees. “Only in math and engineering, when you get the correct answer, you know it’s correct. There is no doubt about it, there is no dispute. That feeling is hard to get elsewhere.”
David graduated from Waterloo in 1989 and headed straight to MIT to pursue a PhD focused on telecommunications. His research explored how to architect the infrastructure needed for cellular communications, a field just beginning to explode with the early adoption of cell phones. After earning his PhD in ‘94, David spent one year in industry working with Bell Labs to implement his research, but he couldn’t help but head back to academia shortly. His next position would take him to the University of California Berkeley. “The freedom to pursue any problem that I was interested in, as opposed to the problem that my boss told me to do, was pretty appealing.”
Upon his arrival at UC Berkeley in 1995, David continued to explore and innovate within the world of wireless communications. His seminal work in the field came from adapting decades-old research in information theory to the new field of wireless communication. To understand his work, a brief history lesson is needed.
Claude E. Shannon is widely regarded as the father of modern telecommunications. A contemporary to Alan Turing, Shannon formulated the field of information theory in 1948 with his landmark paper “A Mathematical Theory of Communication.” Way ahead of its time, David explains that this work largely sat idle until hardware advancements in the early 2000s allowed for Shannon’s ideas to be applied to the new world of wireless communications.
“[Shannon’s theory] had remained a mathematical idea until wireless came along. My contribution to this field was to take this theory and build on it. I converted it into algorithms that people could use to implement in cell phone systems.”
The algorithm David references is called the “Proportional-Fair Scheduling Algorithm” and it facilitates every message your cell phone sends today. David’s revolutionary algorithm allowed for a monumental leap in wireless bandwidth, paving the way for high speed communications over 3G, 4G, and now 5G. Importantly, this algorithm was created at a time when the present reality of cell phone usage was unfathomable. Back then, cell phones were only used by a fraction of the population for the occasional voice call, not the nonstop nexus of instant messaging, streaming, and gaming we have today. So, how was David able to see this future?
“We really had no clue!” he tells me when asked about what he thought the bandwidth would be used for. “I remember going around the room with other researchers and we were all guessing what people might do with this. Are they going to use it to watch TV? No, it seems not, the cell phone screen is so small. We had no clue until seven years later when the iPhone showed up. That was the moment.”
The introduction of the first iPhone at MacWorld in 2007 ushered in a new era of wireless communication. The iPhone finally provided a platform for new applications to take advantage of the bandwidth David’s algorithm created. The landscape had fundamentally changed, and David’s algorithm was there to facilitate this newly hyperconnected world.
David’s work on the Proportional-Fair algorithm and his subsequent contributions to the field were formally recognized in 2017 when he received the Claude E. Shannon Award, a prize given to recognize an individual’s contributions to the field of information theory. Two years later he’d win the Richard Hamming Medal in 2019 for his continued work on wireless data transmission. In a fitting tribute to his predecessor, David closed his acceptance speech by saying, “After 80 years, the vision is fully realized. Shannon set a tradition of research from first principles. It’s now left to the next generation to uphold that tradition.”
By this point, David was ready for a new challenge. Having consistently innovated to push his industry forward, he felt that information theory had become somewhat stale. “When you know too much about the field, nothing seems new to you anymore. I had been thinking about the same problems for a decade and there was no longer a freshness to the challenges I was solving.”
In 2018, David was a tenured professor at Stanford and he was looking for different areas on which to focus his studies outside of information theory. He was part of a small group of professors who would share academic papers with each other and discuss interesting new breakthroughs in science. One of the members shared the Bitcoin whitepaper with David and the rest of the group. “It blew my mind right away,” David reflects when talking about his first read of the whitepaper. “It was only nine pages, but it was such an astounding system.” This simple, elegant document reminded him of another foundational paper he was quite familiar with.
“I saw a very strong commonality between Shannon’s 1948 information theory paper and the Bitcoin whitepaper. Both papers, if not solved, outlined all of the important issues within their field in one document. The Bitcoin paper had in it proof of work, consensus mechanisms, scalability, and more. All of the defining problems that researchers would spend the next 10 years working on, those were there already.”
The decentralized blockchain protocol outlined in the Bitcoin paper also provided some elegant parallels to David’s work in information theory. “At the core of both fields is communication,” David explains. “Different nodes need to communicate. In my previous field, we allowed people to communicate all over the world, but we needed to trust some centralized authority. With blockchain, we still want to communicate but now we also want to minimize trust. It was more of a continuation of my previous work than a hard change.”
David dove into the field headfirst, soon aligning on a fundamental research problem that would ultimately serve as the catalyst for founding Babylon. Starting from first principles, David explains, “At the core of blockchain is a problem of consensus. Consensus is about getting distributed agents to collaborate and come to an understanding of the world. For example, in a payments system, the common understanding is written to a ledger. I found that fascinating, but also saw that there were many different consensus systems in blockchain. Bitcoin is one, then Ethereum, Avalanche, Solana, and so on. Each of these consensus systems have their own security. Bitcoin is probably the most secure. Ethereum is also very secure. But others may not be so secure. So I started thinking, ‘Hey, since we have so many blockchains, can we somehow allow them to work together to create an even more secure system than each of the individual ones?’”
With this fundamental problem identified, David’s knowledge of and respect for the scientific research that came before provided inspiration for what he would create with Babylon.
John Von Neumann’s 1952 paper “Probabilistic Logics and the Synthesis of Reliable Organisms from Unreliable Components” explores how seemingly disparate, chaotic systems can function in predictable and stable ways.
Von Neumann uses the human brain as an example. The brain is made up of billions of neurons which fire unreliably. They send signals through the brain at random times, creating a lot of noise. However, the brain is still able to function reliably through a self-stabilizing system wherein specific pools of neurons may stabilize others. With this work, Von Neumann showed how seemingly chaotic systems can find stability, and David found a model that he could apply to blockchain.
“What I was trying to do with Babylon was solve this same problem for blockchain. There are so many unreliable blockchains, how can I have them work together to form a more reliable system?”
From this simple idea, the entire Babylon project took shape. For David, the logical choice to serve as the backbone for a more secure system was Bitcoin. “It’s the most reliable blockchain,” he states. The system he’d create with Babylon demonstrates the same elegance of Von Neumann and Shannon’s preceding works.
Like any breakthrough technology, Babylon appears simple yet is extremely powerful. The protocol allows Bitcoin holders to stake their BTC to increase the security of PoS chains while earning yield. This mechanism solves the ‘unreliable organism’ problem in the world of blockchain. Newer PoS chains are less reliable than battle-tested, highly secured chains like Bitcoin or Ethereum. BTC staking thus allows newer chains to inherit the security of Bitcoin, the world’s most reliable digital asset, in order to operate in a more secure and stable manner.
David and his team went to great lengths to ensure that their staking and slashing processes would be both trustless and secure. After all, the crux of his transition from information theory into blockchain was to build trust-minimized communication systems. To this end, Babylon uses advanced cryptography to convert slashable PoS attacks into spendable BTC UTXOs that can be burned. This allows holders to stake their BTC and provide security for PoS chains just by locking their BTC using native timelocks.
The incentives for Bitcoin holders to participate in the network are just as compelling as the security benefit provided to PoS chains. To date, earning yield on Bitcoin has typically required bridging to Ethereum and supplying wrapped BTC as liquidity. This indirect approach brings technical compromises. Babylon provides an innovative solution for earning yield on Bitcoin without detours through Ethereum. By enabling BTC staking directly, users can earn yield on their Bitcoin while retaining sole custody of their native bitcoin. This combination of non-custodial security and direct yield unlocks powerful new utility for Bitcoin.
Since unveiling the vision for Babylon in a 2022 litepaper, David and his team at Babylon have gone from one success to another. After a smaller seed round last year that Symbolic was proud to join, Babylon then closed an $18m Series A round with participation from top investors in the industry. They’ve also started integrating with the Polygon and Cosmos ecosystems, and have many partnerships in their pipeline yet to be revealed.
“I’ve always been interested in taking research ideas and making sure they have an impact on systems that people actually use,” David responds when asked about the decision to move out of academia to launch Babylon. “If research ideas stay in academic papers, only 10 people in the world will read the paper. I feel the need to take research ideas and convert them into systems that will benefit the world.”
With the launch of Babylon, David is certainly ensuring that his research will have global benefit. We’re thrilled to be part of his journey to make the chaos of web3 a little more reliable. ✦
By the late 2010s, very few individuals could claim to have had a bigger impact on the field of information theory than David Tse. His proportional-fair scheduling algorithm had laid the foundation for all wireless cellular communications. He was a tenured Full Professor at Stanford. And in 2017, he received the Claude E. Shannon Award for his research and contributions in telecommunications (the equivalent of the Turing Award for the industry).
Yet, he also knew that he was due for a career change. Each paper published only brought incremental change, and none of the problems in the field felt big and exciting to solve. Where should he next focus his efforts? As luck would have it, in 2018, one of his colleagues sent him a PDF of a whitepaper titled ‘Bitcoin: A Peer-to-Peer Electronic Cash System.’ Now this, this was interesting. This was worth changing direction for…
David Tse was born in Hong Kong to two middle class parents in 1966. His father was an engineer and his mother was an accountant. While he would ultimately follow in the footsteps of his father, initially, David wanted to be a scientist. “There was a TV series called Cosmos that aired when I was a kid. And, wow, I remember how amazing it was to discover that you could have a career as a scientist. That was my first dream job.”
David’s parents were not quite as thrilled about this early career choice as he was. “One thing you should know about people from Hong Kong in that era is that they’re extremely practical,” he tells me. “At that time, my parents were focused on surviving, not encouraging me to pursue my dream of being an astrophysicist. My dad told me to forget it, and so I became an engineer.”
While it wasn’t his first career choice, it was certainly one in which he was well prepared to succeed. By all accounts, David was an extremely gifted child, especially within the STEM disciplines. When I ask him about his strengths as a student, he gets pensive, slowly responding, “I love math. Math is kind of my true love. I could apply it to many different subjects. I could do stuff with it that other people could not.”
After excelling through middle and high school in Hong Kong, he’d fly himself halfway across the world to attend the University of Waterloo, Canada’s preeminent institution for engineering-focused studies (also the alma mater of Ethereum’s Vitalik Buterin). At Waterloo, David discovered a tribe of like-minded classmates that stoked his passions for both engineering and mathematics. He fondly remembers how he and his college friends would spend their weekends, “Like most college students, we’d go out drinking on the weekends. But instead of going out to party, we’d get drunk and then go to a classroom to do math problems.”
David thrived in Waterloo’s environment. Encouraged by his new friends, he picked up competitive math tests where he was able to further flex his academic talents. The pinnacle of this new pursuit was the annual William Lowell Putnam Mathematical Competition. A tournament familiar to anyone who has spent time in the domain of elite mathematics.
Open to any current undergraduate student in North America, the Putnam exam is infamous for its extreme challenge. The median score for the test is a 0 out of 120 possible points. There is no half credit given for partial answers (although this standard would be loosened in later years). The harsh scoring system presents an opportunity for David to explain why he loved the test so much, “You either get the problem right or wrong. There is no partial credit. That’s the real world.” His excitement is visible as he continues explaining the test to me. After describing the scoring system, he shares with great pride that the highest score he ever achieved was a 62/120. This was on his 1988 attempt after taking it four years in a row. The score put him in the top 100 out of all students who took the test that year. “That’s one highlight of my life,” he states fondly.
Watching David reminisce on his time at Waterloo and his Putnam achievement makes it clear how deeply his passion for math runs. He is not just highly proficient, but has a real appreciation for the discipline, a love for the beauty of the craft. I ask him to elaborate on why he feels such a strong affinity for math. Thinking back to his comments on the Putnam test scoring, I suggest that perhaps he may appreciate the rigidity of mathematics in contrast with the creativity of the arts. He makes an important distinction.
“I have to push back on the word ‘rigid.’ Math and engineering necessitate precise thinking. There’s only one correct answer. You have to be precise in your outcome. There’s no ambiguity there. But there is a lot of creativity in how you model a program or arrive at the answer to a mathematical equation. There are multiple ways to get to the same answer. Creativity comes in many forms, but in the sciences, there is the element of precision.”
It seems to be the objectivity in outcome that appeals to David. He agrees. “Only in math and engineering, when you get the correct answer, you know it’s correct. There is no doubt about it, there is no dispute. That feeling is hard to get elsewhere.”
David graduated from Waterloo in 1989 and headed straight to MIT to pursue a PhD focused on telecommunications. His research explored how to architect the infrastructure needed for cellular communications, a field just beginning to explode with the early adoption of cell phones. After earning his PhD in ‘94, David spent one year in industry working with Bell Labs to implement his research, but he couldn’t help but head back to academia shortly. His next position would take him to the University of California Berkeley. “The freedom to pursue any problem that I was interested in, as opposed to the problem that my boss told me to do, was pretty appealing.”
Upon his arrival at UC Berkeley in 1995, David continued to explore and innovate within the world of wireless communications. His seminal work in the field came from adapting decades-old research in information theory to the new field of wireless communication. To understand his work, a brief history lesson is needed.
Claude E. Shannon is widely regarded as the father of modern telecommunications. A contemporary to Alan Turing, Shannon formulated the field of information theory in 1948 with his landmark paper “A Mathematical Theory of Communication.” Way ahead of its time, David explains that this work largely sat idle until hardware advancements in the early 2000s allowed for Shannon’s ideas to be applied to the new world of wireless communications.
“[Shannon’s theory] had remained a mathematical idea until wireless came along. My contribution to this field was to take this theory and build on it. I converted it into algorithms that people could use to implement in cell phone systems.”
The algorithm David references is called the “Proportional-Fair Scheduling Algorithm” and it facilitates every message your cell phone sends today. David’s revolutionary algorithm allowed for a monumental leap in wireless bandwidth, paving the way for high speed communications over 3G, 4G, and now 5G. Importantly, this algorithm was created at a time when the present reality of cell phone usage was unfathomable. Back then, cell phones were only used by a fraction of the population for the occasional voice call, not the nonstop nexus of instant messaging, streaming, and gaming we have today. So, how was David able to see this future?
“We really had no clue!” he tells me when asked about what he thought the bandwidth would be used for. “I remember going around the room with other researchers and we were all guessing what people might do with this. Are they going to use it to watch TV? No, it seems not, the cell phone screen is so small. We had no clue until seven years later when the iPhone showed up. That was the moment.”
The introduction of the first iPhone at MacWorld in 2007 ushered in a new era of wireless communication. The iPhone finally provided a platform for new applications to take advantage of the bandwidth David’s algorithm created. The landscape had fundamentally changed, and David’s algorithm was there to facilitate this newly hyperconnected world.
David’s work on the Proportional-Fair algorithm and his subsequent contributions to the field were formally recognized in 2017 when he received the Claude E. Shannon Award, a prize given to recognize an individual’s contributions to the field of information theory. Two years later he’d win the Richard Hamming Medal in 2019 for his continued work on wireless data transmission. In a fitting tribute to his predecessor, David closed his acceptance speech by saying, “After 80 years, the vision is fully realized. Shannon set a tradition of research from first principles. It’s now left to the next generation to uphold that tradition.”
By this point, David was ready for a new challenge. Having consistently innovated to push his industry forward, he felt that information theory had become somewhat stale. “When you know too much about the field, nothing seems new to you anymore. I had been thinking about the same problems for a decade and there was no longer a freshness to the challenges I was solving.”
In 2018, David was a tenured professor at Stanford and he was looking for different areas on which to focus his studies outside of information theory. He was part of a small group of professors who would share academic papers with each other and discuss interesting new breakthroughs in science. One of the members shared the Bitcoin whitepaper with David and the rest of the group. “It blew my mind right away,” David reflects when talking about his first read of the whitepaper. “It was only nine pages, but it was such an astounding system.” This simple, elegant document reminded him of another foundational paper he was quite familiar with.
“I saw a very strong commonality between Shannon’s 1948 information theory paper and the Bitcoin whitepaper. Both papers, if not solved, outlined all of the important issues within their field in one document. The Bitcoin paper had in it proof of work, consensus mechanisms, scalability, and more. All of the defining problems that researchers would spend the next 10 years working on, those were there already.”
The decentralized blockchain protocol outlined in the Bitcoin paper also provided some elegant parallels to David’s work in information theory. “At the core of both fields is communication,” David explains. “Different nodes need to communicate. In my previous field, we allowed people to communicate all over the world, but we needed to trust some centralized authority. With blockchain, we still want to communicate but now we also want to minimize trust. It was more of a continuation of my previous work than a hard change.”
David dove into the field headfirst, soon aligning on a fundamental research problem that would ultimately serve as the catalyst for founding Babylon. Starting from first principles, David explains, “At the core of blockchain is a problem of consensus. Consensus is about getting distributed agents to collaborate and come to an understanding of the world. For example, in a payments system, the common understanding is written to a ledger. I found that fascinating, but also saw that there were many different consensus systems in blockchain. Bitcoin is one, then Ethereum, Avalanche, Solana, and so on. Each of these consensus systems have their own security. Bitcoin is probably the most secure. Ethereum is also very secure. But others may not be so secure. So I started thinking, ‘Hey, since we have so many blockchains, can we somehow allow them to work together to create an even more secure system than each of the individual ones?’”
With this fundamental problem identified, David’s knowledge of and respect for the scientific research that came before provided inspiration for what he would create with Babylon.
John Von Neumann’s 1952 paper “Probabilistic Logics and the Synthesis of Reliable Organisms from Unreliable Components” explores how seemingly disparate, chaotic systems can function in predictable and stable ways.
Von Neumann uses the human brain as an example. The brain is made up of billions of neurons which fire unreliably. They send signals through the brain at random times, creating a lot of noise. However, the brain is still able to function reliably through a self-stabilizing system wherein specific pools of neurons may stabilize others. With this work, Von Neumann showed how seemingly chaotic systems can find stability, and David found a model that he could apply to blockchain.
“What I was trying to do with Babylon was solve this same problem for blockchain. There are so many unreliable blockchains, how can I have them work together to form a more reliable system?”
From this simple idea, the entire Babylon project took shape. For David, the logical choice to serve as the backbone for a more secure system was Bitcoin. “It’s the most reliable blockchain,” he states. The system he’d create with Babylon demonstrates the same elegance of Von Neumann and Shannon’s preceding works.
Like any breakthrough technology, Babylon appears simple yet is extremely powerful. The protocol allows Bitcoin holders to stake their BTC to increase the security of PoS chains while earning yield. This mechanism solves the ‘unreliable organism’ problem in the world of blockchain. Newer PoS chains are less reliable than battle-tested, highly secured chains like Bitcoin or Ethereum. BTC staking thus allows newer chains to inherit the security of Bitcoin, the world’s most reliable digital asset, in order to operate in a more secure and stable manner.
David and his team went to great lengths to ensure that their staking and slashing processes would be both trustless and secure. After all, the crux of his transition from information theory into blockchain was to build trust-minimized communication systems. To this end, Babylon uses advanced cryptography to convert slashable PoS attacks into spendable BTC UTXOs that can be burned. This allows holders to stake their BTC and provide security for PoS chains just by locking their BTC using native timelocks.
The incentives for Bitcoin holders to participate in the network are just as compelling as the security benefit provided to PoS chains. To date, earning yield on Bitcoin has typically required bridging to Ethereum and supplying wrapped BTC as liquidity. This indirect approach brings technical compromises. Babylon provides an innovative solution for earning yield on Bitcoin without detours through Ethereum. By enabling BTC staking directly, users can earn yield on their Bitcoin while retaining sole custody of their native bitcoin. This combination of non-custodial security and direct yield unlocks powerful new utility for Bitcoin.
Since unveiling the vision for Babylon in a 2022 litepaper, David and his team at Babylon have gone from one success to another. After a smaller seed round last year that Symbolic was proud to join, Babylon then closed an $18m Series A round with participation from top investors in the industry. They’ve also started integrating with the Polygon and Cosmos ecosystems, and have many partnerships in their pipeline yet to be revealed.
“I’ve always been interested in taking research ideas and making sure they have an impact on systems that people actually use,” David responds when asked about the decision to move out of academia to launch Babylon. “If research ideas stay in academic papers, only 10 people in the world will read the paper. I feel the need to take research ideas and convert them into systems that will benefit the world.”
With the launch of Babylon, David is certainly ensuring that his research will have global benefit. We’re thrilled to be part of his journey to make the chaos of web3 a little more reliable. ✦