➡ The Economic Ninja interviewed Ron Kai, the head of Reactive Networks, about their project. They discussed how the project is transitioning from centralized to decentralized, and its future plans. Reactive Networks aims to improve blockchain technology by allowing smart contracts to respond to events, not just states. This could prevent issues like flash crashes in the crypto market. The project also has a unique tokenomics system where tokens used for computational power are burned, potentially leading to a decrease in token supply over time.
➡ The project discussed in the text is a new blockchain technology that started as a centralized system but plans to become more decentralized over time. It uses smart contracts that can react to events, a feature that is unique in the blockchain world. The project initially needed to be centralized to quickly implement updates and changes, but it is now moving towards decentralization by bringing in institutions as validators. The ultimate goal is to become fully decentralized and work with other decentralized projects, like the Ethereum Foundation, to spread their technology.
➡ The team behind a project decided to return investment money and build their project independently, despite the challenges. They launched without venture capitalists (VCs) and managed their token supply carefully, even allowing old token holders to swap for new ones. They are focused on community and aim to provide a solution that enables smart contracts to respond to on-chain events organically. They are also planning to expand their ecosystem and increase usage, which will in turn increase the burning rate of their tokens.

Go. Hey, everybody. Economic ninja here. I hope you’re doing well. If you recognize a gentleman behind next to me, you already know what we’re about to talk about. This is Ron Kai, the head of Reactive Networks. You guys know that this is a project I’ve invested in. I want to go over some basics, both of us, to give you some ideas of what’s going on with the project, how it’s going from centralized to decentralized, and explain that process, which is really exciting because it’s a new project and a lot of technicals about the roadmap and what’s coming in quarter one and quarter two of 2026.

Rong Kai, thank you so much for joining me. Thank you for having me. Thank you so much. Yeah. Well, where do we want to start? Do you want to start with just the basics of what problem you are solving? I want to say in the Ethereum ecosystem, but it’s now moving past that, definitely. Yeah. So I think for the benefits of anyone who might not have even heard about us, I’ll start kind of from the beginning and why this is important, why Reactive Network, what we’re doing is actually crucial to the ecosystem. So in the early days, let’s go all the way back and of course I’ll try to make this quick for everyone.

But from Bitcoin, when Bitcoin first came up, it was a response to the financial crisis in 2008. So in 2009 when it came out, it was envisioned as a payment system. You give me Bitcoin, I give someone Bitcoin, and there’s no intermediaries in between like banks or visas or mastercards, just paying each other. But because of that, the infrastructure of blockchain back then was designed around that. And then subsequently when Ethereum came on board, and from Ethereum, everyone else came on board, they slept accordingly on top of it. And we asked Vitalik, I think some of you might have seen it on our channel in Singapore just last month actually on why is it that there are certain functions that seems to be missing when you try to code on blockchain? Essentially he said that back then it was too complicated to resolve natively at protocol level.

And he said that why don’t they leave it to the next higher player who’s building on top of them to solve it? And so they keep blockchain in the status that it is today. And what’s the status? Status is that if you put code on blockchain, which is basically smart contracts, you keep hearing that term, smart contracts, essentially they are codes written on blockchain. And those codes, they respond to states that kind of like, what’s going on? Not saying what’s going on, but it’s like, what’s your state right now? Are you a solid or liquid or gas? That.

That’s the state. Right? So what’s your state in blockchain? Essentially, the basic idea of it basically means that how much assets do you have in your wallet? That’s it. That’s all they respond to. But they do not respond to events. So if you spend some asset in your wallet somewhere and you spent it 10 minutes ago, the smart contract, which is the code, the code cannot see that. So that’s. At Quirk, you seem to be like, hey, on the Internet you can do that, but you cannot do it on blockchain. Can I throw out one quick explanation for the audience? Smart contracts have one function.

If one set of instructions. If an event happens, then this will happen inside that contract. And I’ll give you an example. If a loan payment is made, then it will be recorded. If a loan is paid off now, the debt is gone. Right? One function when reactive can sit on top of it and actually function in a way where events can alter. Like what we just saw this last Friday when a lot of liquidations happened at the loan level of cryptocurrency. Am I correct to say that Reactive’s product could actually cause it to where? Hey, if Bitcoin and the crypto markets are selling off at a specific rapid pace, then do not have a margin call.

Does that make sense? A lot of projects that completely got wiped out because of a flash crash. Precisely. In fact, there’s a project right now, React Defi. They started building using us and, and the first product is a stop loss. The second product is actually this. They’re building it right now, which is to basically prevent this margin calls, as things move along, you. You just give it a safety margin of yourself. Okay, if this thing happens, what am I supposed to do? Sometimes you prefer to sell off rather than suffer that, that huge margin call. And, and you just go along as the market goes along.

And if the market’s drop, who’s building that, did you say? Right now it’s a separate team who’s building on us. They call React Defi. So it’s kind of react, but without the T and defi. And it’s one of the teams that they came quite early on us and they won a past hackathon with us and they started building. We gave them some grunt to actually get it built, and it goes on and on. They had quite a good roadmap as well. But I found that that’s actually a really good example to explain to retail, like exactly how you use use React smart contracts.

So I think going back to what I was talking about as well, like, since smart contracts cannot do that, most people on Web3 right now, if you’re trying to interact with Web3, you’ll be like, oh, but those businesses are decentralized trading, et cetera. They still have this function, right, where they kind of try to move according to what’s happening on Web3, but they do it by pulling the data off chain, having a Web2 code, understanding it, and they have to sort it out, and there’s five or six different tech architecture talking to each other, and then they come back on chain, try to do it again.

And that’s where we spotted that gap. I hear that a lot. Can you talk about time or latency involved with that process? How long does that take for that data to be pulled off chain, figured out and brought back up? So it depends on how fast they want it to be and what sort of functions they wanted to do. So if you’re a bot and you want to front run some training, that process is probably the fastest. You can do it in milliseconds, with certain something like losses. Of course, especially when you’re dealing with web3, sometimes you want to even look at the mempool.

Mempool is actually what we call a list of transactions that are just waiting to be confirmed. So you look at that, it’s already there, and you’re assuming they will happen. So you want to front run them and you insert yourself before that thing happens so that you will sell earlier than that. And that is you have to do it by pulling it off, reading the mempool and then sorting it out, and then very quickly come back in. And that process makes more sense if you’re trying to do it offchain and then on chain. Again, what we’re trying to do is the vast majority of the business use cases where organically you can do everything on chain.

And again, that whole process takes place by the next block, and the next block is determined by how fast the blockchain themselves are. Now, what’s interesting, and I want to explain this part to people that don’t understand, because a lot of tokenomics is very important for any project. And one of the aspects, the tokenomics of React is that when companies decide to start using this product, because like you said in A a great example that would shave milliseconds off, but it could also shave a lot more time off in other use cases. So if a company or a blockchain product wanted to use reactive, it’s set up in a way that when they use that on top of their own smart contracts, the fees that are generated or needed in react tokens, they’re burnt forever, correct? Yes.

So the tokenomics, what we’re doing is really interesting. I think you basically jump straight into the burning mechanism, and that’s one of the key features. So what happens is that at each block, when there’s a new block, we are structured very similarly to Ethereum. Each block produce, the validators, produce new tokens to kind of be the reward for actually providing the energy, understanding, providing computing power to make the whole chain happen. At the same time, those smart contracts who are consuming this computational car power, they need to pay our tokens for the services. Those payments will be burned 100% and effectively it becomes a struggle between the block generating the new tokens and the usage, burning tokens.

And of course, with higher usage, because the generation is always the same with higher usage, eventually we’ll come to a stage where they are near zero or even more, depending on how much the entire network is using. And the beauty of it is because we are connected to so many different blockchains, and the smart contracts, depending on the use cases and what they are trying to absorb, it doesn’t mean that we need 10,000 people to use us. It could be the same number of smart contracts. But because we have more events, as the entire blockchain, the economy and ecosystem sort of grows, the more of these smart contracts will fire off because they need to respond to certain events based on their own coding.

And that itself already means that the rate of our burning is going to grow with the state of the entire ecosystem worldwide. Gotcha. You see, and the reason why I jumped to these questions, because me as an investor, it’s important for me to understand these things. The tokenomics and where you started touching in validators and nodes. I want to segue into that, if that’s okay, because this is a very new project, as it was transformed from an older project and with a whole new vision for the project. I want to explain, if you could explain how this starts as centralized, a centralized project, and why it has to be centralized in the beginning, as it’s new, and how it evolves in your roadmap for evolution of becoming more decentralized.

And I want to just hit a point you, you said, you know, your desire is to be on many chains, right? Being used everywhere, but also really striking a node with our cord. Sorry for the pun or play on words with the Ethereum Foundation. And one of their desires is to work with other decentralized projects. So you have that roadmap and can you explain that, how it starts where you are now and where you want to be in, let’s say, the next six months to a year? Definitely. So I think when we launched in March this year, I think we’re making it very clear to everyone as well.

Right at the beginning the validators will be controlled by us. So right now actually it’s been for the past about six to seven months or so. We need it to be a bit more centralized because we need to push out very fast, hard forks, repairs, things going off. This is completely new. We are the first in the world where we’re doing reactive smart contracts. I was talking about smart contracts not being able to see events. We created a layer that can see events and you just write the code on us. Which are smart contracts, they become reactive smart contracts because they can see the events and they can react to it.

And that technology is very new and we promise everyone is that we will go towards decentralization. And the next phase of decentralization is coming. Right now we are talking to institutions who run validators and run it as a business and we are onboarding them as validators to our network. What essentially means that we will be decentralized to a certain extent, what we consider semi decentralized because it’s not fully decentralized like Ethereum. In fact, we will be considered similar to some of the blockchains that’s already out there, like Binance Chain. They have a number of validators, but they don’t have say 10,000.

Their numbers are mostly institutions because the cost of coming in is pretty high. And all of them agree to validate this. And if one of them actually goes down, of course they suffer a penalty. And the whole idea is that with institution coming in to anchor the network, we can go on to the next phase. And I foresee it to be probably about six months or so with all of this validators coming in. We guarantee a form of arrangements with them and after that we want to go down towards fully decentralized with everyone else coming in.

And why are we doing it is because I think we have a very clear vision in terms of our technology. We build it as a decentralized data execution layer connecting all the different blockchains rather than building it as say a layer one. Because we recognize the fact that the most utility we bring is actually to everyone, not just we create our own circle of space where it’s oh, reactive smart contracts. This is great technology, but if you’re not bringing it to everyone, there’s a lot of misconceptions, potential for them. And what we want to do therefore is to get into decentralization and with that work with Ethereum foundation, sort of to push out.

That’s actually our long term goal, push it out. Some of our technology as a Ethereum improvement protocol, for example, and reaching out to really kind of a standard for all the layer ones and the layer twos. I love that. So to everyone listening when he’s mentioned, the reason why you got to stay centralized in the beginning is because of updates, hard forks and things like that. People don’t understand, they want true decentralization, but they don’t understand that. And I’ll give you an example of one that you need to have a certain level of control in the beginning when you’re building a network.

Because when you need to make a hard fork or a change to the code and you don’t know who your validators are, if they don’t all agree, you can’t make that needed change. And I just saw an update that needed to go through with a very decentralized project. But it was a currency, it wasn’t a solution to a smart contract like this company reactive. They were afraid and it took almost a month to find all of the nodes running to be able to agree and have the consensus it needed to be able to make that change.

So a company that’s trying to build an actual product that will bring in revenue and the revenue is the actual value of the token going up. I hope people understand that that’s why he’s explaining it the way he is. And then eventually it becomes, as the project is complete and running, it becomes more decentralized so that groups like Ethereum, the foundation and all others will want to use it. Is that a good explanation? Ron? Definitely is. And I think the the magic of it is that as we look at web3 moving closer and closer to to institution adoptions, we’ve been hearing all of these news.

Oh for example, Swift has been building on Linear together with changelink for a while now. I think it shows a really clear sign institutions will not come in unless one thing they have control and they have control. And when they trust that it’s either open source or decentralized interchangeably in terms of solutions, if they have to rely on one single party. So even if it’s a white label solution, they usually do not like it. They have to choose between the two. Of course, less of two evils at the end of the day. That’s the kind of positioning that we actually identify right at the beginning.

The very reason why we built this as a decentralized solution is because we spotted this gap. Everyone else was content to make this part centralized, but if there are so many parts of building on web3 that are centralized, then why even build on web3? So we asked ourselves this philosophical question. We went deep into it and we said, okay, we’re going to build this in a decentralized manner. Our architecture is decentralized. It’s a blockchain, of course, validated site right now is still controlled by us. And eventually we will decentralize to everyone else coming in at that stage, even actually in phase two, you can consider already we are a decentralized solution, fully decentralized, because there will be other external partners who’s coming in to validate our network.

That’s correct. And they have a lot riding on it too, because as they devote time and energy to code along with your code, they’ve got a vested interest to make sure that this is a success. Now let’s move on because I, I really wanted to explain that to people why, why it has to be centralized in the beginning and its process of moving out. I want to throw a shout out to NYC’s crowd on X because that group of crazy degens, and I mean that in a good way, they did a lot of research on this project and I too like finding gems.

But the reason why I bring this next question up is because it’s important for people to understand the difference between a total crap coin project and identifying the next thing. And that’s what I want to do. And you need help honestly getting the word out of your project because are there any VC capitalist funds or anything like that that invest in your project? No, not at all. So that was something that people on a committee, they already know. So a while ago, like two years ago, we were talking to VCs and so on. In fact, actually we raised $1.5 million.

And then subsequently we are like, look, it doesn’t make sense. It not just takes too long, but the wind was shifting against VCs and we could see that VCs, so many projects invested by VCs, the VCs dumped them. Sort of like using retail as, as basically Exit liquidity. There are good VCs of course, but sometimes you have to balance, right? You have to see which are the good vcs, which are the bad vcs. And it’s very hard to spot right at the beginning. And I think that from there we decided to make a very strategic decision.

We actually return the money and we say that okay, no, we’re going to build this ourselves. It’s going to be a lot more painful, we’re going to have a lot less resources, but we’re going to make it happen. And when we launched, I think it really validated our strategic decision. Back then we launched no VCs in our cap table. Everything’s organic. We had an old token and everything was shifted over. There were delistings. But after that the bridge was kept, was basically ended I think in about three months ago. So right now there’s basically nothing, no one holding large amount of the old tokens or new tokens.

Anyone who actually with the new old tokens they can still get to us. And I think that’s something that we wanted to let people know. Like that’s the stage that we are in right now. And I want to throw this out too to dispel any rumors. The circulating supply is cranked up a little bit. I don’t know, an additional 10 or 12%. Is that because of the token migration? Even though it had a hard stop, you were letting some people in. Can you explain that? Because I think it’s nice that you did it. But is there a stopping point to that? Yeah, so that’s something that we’ve always been a very community focused project.

Like we, if you’re a holder of our token, you’re part of our family and we’ll definitely like work closely in your favor. What happened for those old token holders? We had a hard cut off like and we announced it a long time ago, said that after this date if you acquire new of our tokens, we will not honor it because we have already cut it off, the bridge is taken down. But then you continue to acquire the old tokens, it means that hey, are you trying to fud the new tokens or trying to actually buy low and sell high? But if you hold it before the date, which is 31st of July, yes, we will honor and some of them actually reach out to us and then we have a swap.

And that’s something that we do on the back end. And so you do see there is an increase in supply as well because those are still continuing to come in. But at the Same time, let’s not forget that the validator is, every month is generating a fixed amount of tokens. It’s not too much, but I think forms a good baseline. And then there’s the old tokens transferring over. Actually, they have been transferring over since March, because when we launched the O tokens, most of them actually came over. So it was already considered in the overall circulating supply, even back then.

And then, if you don’t mind me saying, though, you still have a hard cap, though, of 500 million, correct? Yes. So. So the 500 million will only grow by the amount that the validator is. Is generating. Like an annual basis is an amount that to me is basically, that’s the hard cap. The circulating supply at the beginning is 310 million. Because there were 310 million of the old tokens. We already accounted for that. And of course, with treasury and some of it going to the liquidity providers and the market makers and so on. So you will see a small growth.

In fact, some of you might have noticed there’s quite a big growth in the past two months. And that’s because our trade volumes has gone up quite a lot. And as our trade volumes go up, the market makers constantly ask us for new supplies. They’re like, I’m running out of supply, I need more. And when we give it to them, you will see that circulating supply goes up. I see that and I’m glad you explained it that way, because I talked about a project called Epic Chain a while back and we want to talk about bad VCs, just to let everyone know they were listed on Coinbase and they did something really dirty to the point where Coinbase called them out on it too.

They said they were doing a token migration event and they only gave, I think, 24 or 72 hours. And they didn’t do a really good job of letting everyone know. And then they shut the entire thing down and they delisted off of Coinbase, only to upload and go, hey, we got a new project, we’re backed by all these companies. It was a dirty process. So I just wanted everyone to understand how that worked here. A very fair process. Ron, Kai, to wrap this up, because I want to do more of these because. And everyone, I don’t get paid for any of this stuff.

Just, you know, I invest and I want to see my investments grow by getting the word out. So I want to do more of these interviews with the team. Is there anything you’d like to share of what’s coming up or what you think is something that the public just doesn’t understand about this project because it’s so new. Yeah, technically there’s two questions, so I’ll try to be very quick to wrap this up. I think what do I want people to sort of know about us is that we are the first solution that actually enables smart contract to see and respond to events like on chain, completely organic.

And this means a lot, not just to actually people building on Web3, but to institutions because when they come in and they look at a solution, they’re not going to like, oh, in order for me to build this, I need to buy this solution from you, buy that solution from them, have my own team build the next one and there’s five or six things talking to each other. What we are coming forward is that while there are certain things you might still need to buy from a lot of these solution providers or build it yourselves, those things that you want to build on blockchain, like a solution end to end, you can now use us and then it.

It’s completely organic on chain and it’s open source and it’s decentralized that that is like a real trigger for them. They love it to. So to me I think this is, this is a great opportunity for people looking to us. And as for what we are really going for, I think I mentioned earlier about eips, but what exactly does it mean going forward? Say in the next six months we’re going to look at of course further decentralization. We already talk about that. We’re going to do more things with Ethereum foundation because it’s not just about business model but we fundamentally believe in decentralization.

That’s why we built this in a decentralized architecture. But we are also looking at potentially non EVMs. Again my CTO is very careful to say that we don’t promise any timelines, but it’s coming pretty soon and it’s coming soon in a way that the first step to it and the second step are likely going to come and more. And we should have some good announcements to make very, very, very soon about that. Like non EVM’s, it’s not just non EVMs but non blockchain based data even coming into our ecosystem. And that’s something that we ourselves are very excited.

We’ll share more about it very, very soon. And what all of this means is that as the ecosystem grow bigger and bigger, you can think back into the tokenomics. I was saying that as usage goes up, the burning rate goes up and we’ve already by design. We built in a way that the usage can goes up regardless of the actual humans using behind it. Because this whole thing are machine run now. Everything is smart contracts, use case based. And as there’s more of those ecosystems that we connect to, the more of those usage goes up. Awesome.

Thank you so much for jumping in and doing this interview. I really appreciate it. Thank you so much for having me as well. Awesome. All right, well everyone, you guys know my stance. I invested in this, this project. I like it, I like where it’s going. But we need to share the info. So do me a favor, share this. Whatever platform you’re on, if you own react, tag, react. And let’s get this project moving. Thanks again. And the economic ninja is out.
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