Can Solana Move Past SBF? | Anatoly Yakovenko, Ben Sparango

Transcript

um I think it's a pretty kind of dumb unfair argument to just say that Solana is not decentralized I think you're not really like looking under the hood and understanding like that the cost of the hardware is the cheapest possible cost that you can have to achieve what we're doing you may not like want a global price synchronized price discovery engine like that maybe not something that you care about that's great go use ethereum like you can get settlement guarantees there but a lot of people want that and that's actually very important for finance like you look at the the traditional trade Fire stack all of the money is not made in settlement it's made in execution

all right everyone welcome back to another episode of Empire we got Santi co-hosting with me and then we are uh very lucky to be joined by Ben sparango uh head of BD at Solana as well as Anatoly back for a second time Anatolia was on the show last year um and uh yeah Anna totally Ben welcome to Empire I guess thank you thanks for having us yeah of course um all right guys I think uh there's obviously a lot that we need to talk about here and that we want to talk about I think the most pressing thing and the best place to start here would obviously be talking about FTX and SPF um you guys uh had like an intertwined relationship that I would love to just figure out like what it was almost and I think the best place to kick this off would be Anatolia uh if

you can you just kind of share with the listeners like what was your relationship with Sam and maybe starting with like how did it start who introduced you like what was how did this whole how did Solana get so intertwined with FTX yeah so Labs was founded in like 2018 at the start of that bear Market basically right as the you know the everything was burning in crypto and crypto was dying we raised a bit of a seed round of certain labs in our seat deck literally said blockchain at NASDAQ speed I thought the most important thing that blockchains do is the they synchronize like prices around the world in a substitution persistent way and that was like what we built for

we had like uh Dax as our stress test uh and like our kind of like number one thing that we really wanted to see on the network and we wanted to build a central limit order book that was really like the thesis that like that's the most efficient way to do price Discovery and we're going to build a blockchain that does that really really well so when I got connected to Sam in like 2020 I think it was either through I believe it was mostly through Kyle but there's also a couple other investors like Edith young and Chris mccand that were like also connected to Sam and I think all of us wanted to get us in the same room and I pitched him this idea of like you know you look at Solana and like how it's

designed imagine we optimized this thing to its natural conclusion we'll have information propagating through this network as fast as the speed of light through fiber so like news for the event happens in Singapore that that like those bits have to get to Bloomberg terminal in New York they have to go speed electric fiber right at that same time State transition propagates through Solana speed of light through fiber by the time the trader sees that news flash the price on the CME or NASDAQ is the same as the price in a market running on Solana so we're as good at Price Discovery as the fastest exchanges and that was like kind of the the pitch and the selling point and this was at the time on uniswaps just

started to like early show early signs of product Market fit and it's like early first day at D5 summer basically and Sam was like okay I want to do something in defy and I don't want to like build a sidechain with with like our own stupid decks running on it I wanted to be like more real and he saw that we had technology that enabled them to do that and we have this demo called Break you smash your keyboard and every transaction you can go play it right now um every transaction sends off and it gets confirmed and it lights up green it's a very like visceral experience you could I suggest people try it and like you actually see that this is like a web 2 experience you don't you even forget

that you're using like a crypto thing it's like not even it was really kind of shocking to people that could work so we gave him this demo we saw like within a few hours they were spamming the network and then like the next day it was like okay we're gonna go build serum and to have eight engineers at the time total at FTX they put four of them in serum so it was like a pretty big commitment from their side and at that time like 2020 FTX was like up and coming exchange it was I think maybe just barely cracked the top ten and people knew Sam from like his like stuff on Twitter and within four weeks they went from nothing and at that time Solana

literally had nothing we had barely an explorer that kind of sort of works no wallet it was a command line wallet right and like trust wallet was the only other thing there's no dap wallet so they built the wallet they built a bunch of introspection tools they built serum all the uis for it got you know market makers and everyone else involved and launched it and like that was a pretty big lift and I was probably naive but like at least I convinced myself that like you know they're building this technology because they want to disrupt themselves and they see that D5 will eventually take over and like eventually Serum is going to be what FTX runs on like that was at least like this what I

thought was actually going to happen um and like our relationship between like us and Sam was like you know if we have product ideas that we could synchronize on I could reach him right like he'd be one of the people that I talked to I talked to a bunch of people but he would be one of the first people I talked to like Hey we're you know we want to build a phone or do this other thing can you guys like Port your application to it or like give us an API for like a Fiat ramp or whatever it wasn't that was basically like this kind of that I felt like I could depend on them to build stuff that we couldn't because they had an exchange that had like Fiat ramps and all this other stuff that was very essentialized

and could really let us like get to Market with like cool products much much faster yeah uh where did you meet him did you guys do drinks you got you do like a dinner and it was a zoom call that was Cove days yeah I was it was a bunch of phone calls like uh I didn't meet him until I think a year later at Bitcoin Miami I remember interviewing him in like May of 2021 and my thought was I remember halfway through the interview two hour interview halfway through it he's like oh by the way yeah I'm in I mean I think he's in Hong Kong at the time or something like that he's like yeah it's 3 A.M my time I was like oh my God like you stayed like I should be the one staying up till 3am to interview you

like not the other I was I was really blown away and like I think I maybe like along with a lot of other people probably got played I'm curious what was your interaction when when you met him like were you did you think like wow Giga brain like genius entrepreneur here were you more skeptical like I'm just curious he fed his Persona well like I thought he kind of had this like character of I'm an MIT Giga brain and like he dressed like people he's just like I think yeah uh dressed like it right like basically just fit that persona um and like I think given that his success in like both Alameda and the exchange you kind of just felt like maybe it's true right

like maybe he's that smart and like I don't know study Physics at MIT that that seems pretty impressive the the there's this sort of idea that was servicing on around certain circles that you know Alameda or FTX was sort of a it became like they were doing some pretty harmful stuff in terms of like listing perps early on and you know Alameda investing in some projects and then FTX providing extra liquidity like these were things that you know at the time like around the Bitcoin conference it it was already surfacing um perhaps this like conflict of interest I'm curious like if there was a

time that you felt that their contribution to the Solana ecosystem was actually subtractive where it became negative and they weren't really as a positive force as they seemed to make it yeah there's like a there was a long period where there was a lot of engineering output out of them like both on serum and supporting like projects that were launching and like figuring out like all the apis and like getting Armani and like Armani was like a you know a gift to the whole Solana ecosystem just him him working on an anchor and stuff like that um and like I think at some point it

flipped to where FTX was growing really rapidly and they were working on their brand and expansion and all these other things and that the engineering effort like went somewhere else like and that's that was like one change in terms of like the FTV tokens like we had a very different point of view on that like I always felt that like you gotta like force price Discovery as early as possible because that's when you build your community the people that join or the hardcore people in that tumultuous time where price Discovery occurs and they're you gotta give them

like a a chunk right you gotta be open with them and that was something that I think they just didn't do um with like all the coins that they launched but those were like I think very Sam driven projects there was just a lot of other [ __ ] happening that wasn't Sam related like all of the D5 projects that launched in the defy hackathon I think I don't even think like mango like was anti-taking alameda's money like they were like there was already like a faction of like D5 builders on Solana that are like we like Solana and like we heard of it because of Sam but we don't want to do but we don't want like to deal with them so that was already kind of happening

yes Santi just to to elaborate a little bit more I think which there wasn't a point where it would there wasn't a point where it was like apparent to us where you know it flipped negative their impact um over time I think our relationship just kind of dwindled honestly right around Bitcoin Miami was when like it's like we stopped like uh talking to them as much or them having as much engineering output as as Anatoly had mentioned and then you know like six months later we find out that FTX Ventures is investing in direct competitors to Solana in Aptos and in mistin and so like very rapidly they switched to like bigger and better things and doing more things and you know that you know we were just focused

on the ecosystem and the projects that we were building internally yeah um I'm curious there's this idea that I was hearing perhaps over the last year which is what would have been of Solana without Sam without FTX without Alameda what would you like obviously it's impossible in a parallel universe but I guess what I'm trying to get at is how influential was he in Ben from your perspective on the BD side of things you talk to corporations SPF was the The Golden Boy on you know on on TV and kind of the face of crypto anatolium just kind of curious um how you would how would you

characterize that statement I mean the tech is awesome and what I think stands on its own we're still not at a place where all the competitors combined generate as many transactions per day a salon like it's been two and a half years so I think we could have gotten there um but I don't know like it's really hard to predict right like really in those early days it felt really sincere and like I don't know if I was naive but I thought [ __ ] like this idea of like decentralized Finance could actually happen with FTX and he's so forward thinking that he's disrupting himself and that felt like just such awesome alignment but yeah but it's hard to hard

to know what would have happened um without I think we would have like made it long term would it have happened as rapidly as it did I don't know because serum became that immediate source of liquidity like right as the bull market was hitting and it was kind of perfect timing whereas you know we were struggling to find builders in those early days like when I joined the team in summer of of 2020 uh it was just serum and orca those were that was it in terms of ecosystem projects and then once we had you know the notoriety from Sam and from serum that kind of like broke down the dam a little bit for other people to be like yeah maybe I'll explore the development environment here I'll put Peyton and hackathon and then you know we kind of snowballed all of that into like a living breathing

ecosystem do you think that given everything that's going on in Sam's rapid fall you stand on your own ground you know you look at TBL solano's down now to number 10 you know apps like Phantom optimism Avalanche have higher TBL arguably t-ville is not the right metric what I'm trying to say is that there was a time where Solana you know was much higher up and and people look at TBL they will always look at TBL but I think it's it's one of those at the heart of the question is how where are you guys now in terms of the viability of defying Solana I think a lot of Builders are now asking the question what's going to happen in the Solana

you know is this a chain that I should build on should I go elsewhere optos you name it the next chain before I address the the immediate question I just want to make aware that like the salon ecosystem has a lot of Sub sub sectors that we refer to them as defy nfts games uh payments Dows all of which are are thriving in their own right defy has been the most hit hard just because General macro environment anti-crypto and then the additional punch in the face of FTX and Alameda blowing up most recently so D5 is in a tough spot right now but the the thing that is most important that I see is

like the resolve of the builders in the defy ecosystem if we were worried about the device system disappearing we would be seeing a mass access of these Builders and that's just frankly what we're not doing uh the the the first thing that I did after FDX came down was touch base with a lot of the D5 teams and say how much exposure do you guys have you know what what if if you had exposure what do you guys need to plug the whole who can I help introduce you to trying to make sure that everybody's okay and frankly we've seen like an incredible result from all the people that are building in D5 so I'm not worried about D5 long term ultimately there are headwinds right now that are that are pampering liquidity but over time that will be ameliorated and I'm

sure the defy ecosystem will do things and iterate to bring more liquidity more users more use cases because ultimately the reason why a lot of these people came to solanos because Solana offers something that these other blockchains don't and it's different infrastructure that can support better trading Financial products than some of these other blockchains and I think that that still stands regardless of what happened then your um you're a multi-coin from what 2019 through like near the end of 2020 and then and then joined Solana it's just um did it feel like this match made in heaven when like when when when FTX connected with and like Sam connected with like Anatolia into the Solana team and you're like oh my God like this is the future of this this is how we're going to build the future of France

right like we are we've got like all right we've got the tech team and we've got to go to market folks like this is how we're gonna do it yeah so uh a little little backstory I actually ended up leaving multi-coin like right as Sam and Solana started talking like I wasn't really even a part of those conversations and I had three offers at the time two of them were from Solana and one from live peer and I actually went to live peer for about a month and a half and this was when the whole Genesis of serum and everything was happening and Solana was getting like pretty exciting from that respect um and I was at live peer because frankly I was worried about flipping the bird to the ethereum ecosystem and all the friends that I had made at the time

because up until then nobody had been able to compete with ethereum and it wasn't clear that anyone was going to be able to compete so during that month and a half that I was at live beer things with Sam and serum really started to pick up and luckily for me Raj was in my DMs like every single day telling me that if I was still interested in coming over there that I could that I could join the team um so I actually wasn't a part of a lot of that but like as I was reviewing it from the outside it was very apparent that like there was some sort of of Special Sauce here that like really was enticing me and given that my main focus when I was on the investment team at multi-coin was in D5 it seemed perfectly suited for me to go and kind of like

exacerbate that effort so that's why I ended up joining uh in the fall um Anatolia do you think that you guys suffered in the obviously like I have a feeling your answer would be the thing things are gonna be fine we've got a bunch of Builders but like in in the short term maybe could you say that you guys suffered because of Reliance on FTX and and I guess the reason I asked that is you said FTX had eight Engineers they put half their engineering team building on Solana I'm like thinking about this from the founder perspective of block works like if we like outsourced our sales function for example to someone else and then like three years later they they pulled it away and they've started focusing on something else that wasn't block works like ah [ __ ] like we got a race to figure out how to build

that competency internally do you do you have a feeling of that right now um we had built a competency already nationally as we saw like Sam kind of shift his Focus away from building D5 products to like you know going to DC or whatever or like you know working on the FTX brand so that was like a shift that where we were just not involved in that because like it wasn't like anything we could help with or like related to to defy at all um so we we figured out how to do all these things on our own like I think he was pretty important for the first hackathon and then like maybe as a somewhat like

as a lure for the second one the defy hackathon but after that all the hackathons were on our on our own all the hacker houses around our um the conferences we did ourselves like we kind of figured out how to Market and like go to market I think pretty quickly yeah that's funny I remember being at um what year was this September oh yeah no no this was the last this is wow this is last year November 2021 in Lisbon at the first salon at breakpoint uh you're I'm assuming you're at the multi-coin event that night yeah um yeah there's the multi-coin event now remember there's all these like I mean I met all the salon Founders they're like these 22 year old kids that dropped out of school and I was like what's the hardest thing about building on Solana

they're like well so they're like Solana is going to be the number one L1 if and only if Solana can maintain the net if Solana can build things and like people can aggregate or like build around Solana and it's and and they get off their Reliance of FTX so it's interesting even these young 22 year olds who had never built companies that like they were seeing it back then which is really interesting yeah that Band-Aid got ripped off really quickly it did it did which maybe it leads me to my next question when did you first start to see when did you first start to be like like not not obviously didn't know the extent of things but like did was there any point in time when you're like oh man like his texts are feeling really manic or like oh man he's like blowing

off calls they're like there's something here or no I was I was just really not paying that much attention I would say like really focused on like the next fire that we have like I don't know if you're you're exactly realizing every text message from Sam yeah unless it's a fire it doesn't get to your like level of attention right yeah so yeah that it's really hard to tell man like I don't know Ben did you have any sense that things were funky over there not really I mean like after the beginning of the bull market it like totally mentioned it really just like our relationship with them started to dwindle the people that we were interfacing with the most were

like ecosystem level Builders who may have been a part of FTX talking about like Armani who like helped build anchor and is now work working on backpack um and people like that so it wasn't a lot of interfacing with like the higher level FTX people like Sam or or some of the others um so like to be totally honest like we were all completely blindsided by the way that it all went down and like I mean that's very self-evident by like Solana labs and Foundation employees who had assets on FTX and like you know company assets that were on FTX and that kind of stuff so um I mean there was really there was really no signal and if there was you know we were totally blind to it yeah and totally what was the first like holy [ __ ] moment when you realized that

things were maybe not going out like they were they were supposed to be going like I remember sitting I remember exactly where I was when there was the tweet that binance was acquiring FTX like what was that moment for you what was that first moment yeah this was um the the leak I think of the assets I'm quite dust was it going to us was like pretty eye-opening it was like [ __ ] is this like how I but I thought it was contained to Alameda like is Alameda gonna blow up like was my thought like when I saw the leak of all the assets because it seemed like they're that I don't know how real that was and then this was I think the last day of breakpoint we just had this amazing conference they were like I

don't know everything was packed there were 1600 doves at The Hacker House the 3600 total attendees yeah it was twice as almost twice as big as the last one in this in this bear market right like we had we doubled the attendees in the in the conference and like I was like kind of paying attention to but not really because I was you know we were really focused on what we're doing and then in the flight back I was like [ __ ] it's like it's first two weeks like uh offered to buy ftt at 22. that's weird wait Finance is now buying FTX that's really weird yeah but that was a really yeah

kind of got churning flight I'm still like can't like uh really put the two things together like the fact that we had like all this amazing growth and all these awesome Builders and like showed up at the conference and like The Vibes were just really great um and like the shitstorm that followed or like just seem like two different worlds yeah just hard to Grapple with everything honestly it's just nuts that this all went down so um I want to move this conversation towards talking about Solana now and and the future is there anything else that you think is important in terms of just relationship with Sam relationship with FTX anything that any points that you guys have seen laid out that you're like that's

blatantly wrong uh so I mean there's been a lot of I've been dealing with like the dependencies of like the Fallout of FTX for the last two and a half weeks and like one of the things that happened shortly thereafter that I wanted to clarify was a lot of APAC exchanges were disabling usdc usdt rails on Solana but keeping them open for other uh chains and as we've gotten into conversations with them to try and get them re-enabled uh that we've realized that a lot of people have this misconception that Sam is to Solana as CZ is to binance chain and like has control over some large set of the validators and can affect changes or

like mint or burn usdc or usdt so uh I just wanted to like State for the record that Solana is a permissionless blockchain myself Anatoly Sam nobody has ultimate control over anything that says on the blockchain and the validators have ultimate control over that in a decentralized fashion um and Sam is also you know like not any part owner of Solano Labs or like anything like that and that Solana the blockchain was accepted in 2018 before Sam had even started doesn't I mean one of the things that I saw people concerned about was that Sam Sam or FTX or Alameda I think it was

Alameda is probably the right entity to use here owns roughly 10 percent I saw 13 I saw seven percent roughly 10 of the of the soul in circulation I think that's true and I think that's probably still the case honestly so I'm curious just to get your take on that Anatolia um so in terms of what in particular um because like the the the data is public on the on the fact sheet that the foundation had posted and you can also like query the blockchain and see the the stake accounts that have been tagged to Alameda so if that is that is a fact but what in particular would um um that has no impact on security in the network like there's no way even a follow me to controlled 100 of the stake they could not convince Circle that you spent your

uscc without your signature right you actually your self-custody in circles node are independent of the Quorum that controls they can censor transactions but they cannot modify the state in such a way to spend your dollars So at the end of the day that that part is kind of Irrelevant for the security of the chain it has impacted liveness if they did a shitty job staking and then like those nodes were down they would have temporary impact on liveness but that's about it at what what number would be concerning if it was like Alameda owned 25 that'd be concerning or they owned I do understand I mean it's concerning that like

this partner that we thought was gonna like have the shoulder down building stuff on Solana had like that was the reason why the like those deals were made in the early days we were like you guys got to remember Salon in 2020 was a very much I remember I remember yeah we were very much an underdog like everything was hard and this was like a relationship that was cemented with like with that deal and like they were they had their shoulder down for a while and now there's a whole bunch of tokens that are basically sitting around in bankruptcy court who knows what the hell is going to happen there yeah like that partner is no longer there that part sucks but the ecosystem's grown to the point where

I think um as you saw with like the open book for a serum uh all the code that's they built was open source so kudos to them for doing that and like once you have products that are really good that are open source people will like reroute and fix and like move [ __ ] around around like your failures like very very quickly so that part I think is at least uh like working and working well let's uh imagine a scenario where you know we're not necessarily in a bear Market maybe FTX continues to operate as they were and they don't get this liquidity Crunch and everything gets exposed they had multiple investments in

competing blockchains as you said Ben right um was it optos and a few others I think they're basically touching everything so one it sounds to me like I mean it they're very uh mercenary like a lot of other folks but they were just there to you know they built some infra to then take advantage of um you know the opportunity and then pocket as much Capital as possible they're probably going to do that with other chains too right now what I want to get to the heart of is was there anything in particular you know that you guys would say hey we had a more intimate relationship with Sam versus like Aptos for instance and maybe

these things take time but you know I'm just I'm just trying to get to a better understanding of Sam could have probably in FTX Alameda would have done this with other chains and they were probably setting it up to do it that way is that true or would you say that they were morally focused on like building infrastructure in Solana and then supporting it to then launch a bunch of tokens and probably it's hard it's hard to speculate on what they would have done with the other chains um I think the reason why things transpired as they did with the salon ecosystem is because both FTX and Solana were in similar States when the Anatoly and Sam got acquainted like Sam was

building a small crypto exchange that was basically a nobody at the time and Solana was this nobody uh competing L1 and they found some product Market fit in central limit order book decks and like the relationship kind of blossomed from there um so uh it's hard hard to speculate on how that would have transpired with the other the other chains that they invested in foreign how much are the protocols or like the the defy apps built on top of Solana hurt by this like a lot of them maybe if they're uh like a trading platform like they probably got liquidity from from Alameda like how how much are they obviously Jupiter had their biggest volume day after the FTX collapsed yeah it's not

that's not to gloss over like that thing things are definitely like downtrodden right now and that's not to gloss over that but um uh yeah the day when everything was happening some of the the D5 applications did some of their best numbers ever um so infrastructurally they're all fine um as I mentioned previously I touched base with a lot of them um there were only about three to four that were materially impacted by FTX like almost like whole treasuries stuck on FDX and to those they've been properly connected with uh VCS and other funding mechanisms to make sure that they continue uh building or like acquisition opportunities but outside of that uh luckily like a lot of them were like not as gathed as they could have

been which is very fortunate Ben I know you've been putting out fires and you created this kind of repository website where to address and be very transparent with as things kind of evolved and escalated fairly quickly on the BD side of things um what are you hearing from you know companies or projects developers what are their main concerns how how worried are they about this stuff um and and what would you say to them yeah so from what I've heard a lot of the ones that we're building prior to all of this are pretty much continuing to build there are some that need extra

attention when you are talking to them just because like a lot of them aren't on crypto Twitter they like get their news from the headlines and they see these headlines that are skewed in like sensationalist ways that like they don't understand so they see this headline and they're like well this thing said you know Salon is dead and you know you gotta explain why Solana is not dead um so from from from that perspective it's a lot of just like one-on-one conversations with people who just need answers to questions and that's kind of why the foundation put together that fact sheet to like post on the website so we don't have to have a lot of these one-on-one conversations and you can get the information there um concisely but it's a lot of just like you know getting the truth out there frankly the truth is like this these

events of the last two or three weeks have sucked but this is not going to kill Solana and Solana is much stronger than all this hmm the NFC folks like kind of didn't skip a beat for the most part like the next day there was some launch that hit record which to me was like really like it seems like they're in a different world which is really encouraging because uh it means that crypto like in general has like legs that are outside of like the crypto Twitter and like in like financial side of like that that cycle that there's like real product Market fit for other use cases so and I think we're very blessed to have a very strong

nft community that is just really like kind of like not you know they're paying attention to this obviously you've seen the news but are not uh like psychologically impacted and like oh [ __ ] everything's gonna go to zero and like I'm done with nfts on Solana that they they actually care about the product more than these new stories that was a good overview of like the FTX uh Sam stuff I want to I mean just like State I wanna get like a State of the State of the ecosystem basically from you Anatolian and Ben as well just for Solana like when I look at D5 llama obviously Santi mentioned this TBL bad way to track this stuff but like that's the metric I'm looking at and I see eth down 25 percent polygon down 20 and Avalanche down 40 so

like some some big numbers these things are down a lot Salon is down 71 right and is now the the 10th biggest ecosystem um I just love to get a state of the ecosystem from you Anatolia yeah a lot of you know like I I don't know if FTX had as big of it had would have had as big of an impact if the mango hack didn't happen like right before it was like a kind of two bad news really close hand in hand like I think really were really bad for Solana D5 um but like the folks that are building are still there and like they're launching new products so I think mango is going to launch before in like first week of December and they're a really strong teams so you know serum got

forked almost immediately because there was uh this belief uh that there's a risk to the upgrade Authority um for the for the serum program people weren't sure if the hacker or was moving money out of FTX had access to those skis So within 24 hours like there are enough external developers to really get serum up and running that that was like I think kind of like I was like holding my breath like [ __ ] everything is falling apart but when I saw that like recover that there were open source staffs that just knew what to do and found their own market makers like people you never heard of like these are like small time hobbyist market makers that were just like sure I will go and

support this like fork and like get it up and running that really like kind of made me like calm down and feel like okay there's there's people that are doing stuff we're we're not even involved I wouldn't even know how to like get that to work because I'm not a marketer like it just felt like uh that there's actual like people that care and like can get [ __ ] done um that's the most important thing I think like at the end of the day like you need to launch products those products have to be good and like if their products were they're measured by tvl right you still have to launch awesome products in the traffic tvl I think that cycle is going to continue and gonna keep happening on Solana I'm not as much worried about like raw

dollar numbers of tvl as I am about like percentage of soul in D5 um and that's been definitely down because of both the mango hack and the FTX thing and I would like to see that recover and like start seeing products that are attracting like you know new new capital and like in new ways yeah it reminds me of what you said about those market makers there's this crisp or nisky tweet about Solana from a week or two ago he's like this big threat is good Thread about Solana we can link in the show notes but he said my is like the fourth one now he's like my view the Solana ecosystem emerges from this just as ethereum merged I'm just reading this now emerge from 2018 2019 purged of opportunists with a hardened Focus tightly bonded

community and Unstoppable commitment to the cause more anti-fragile than when it entered the bear just like pretty yeah he's awesome man Chris is like yeah what's what's I mean what's going on like why I feel like Chris is I mean Chris is one of my favorite like thinkers and people in the space like why is he taking such an optimistic bent on Solana here like are you guys in conversations with him what's going on there um there was a lot of like surprisingly during this fall like a lot of folks put dot Ethan their name that were just dming me with support it was really like uplifting to see I think um I think at the end of the day what we're

building this idea of like you know globally synchronized like you know information system for finance it it is fits with a decentralization ethos we're not trying to replace ethereum we're not trying to build a product that is like Thief killer right like it has its own place and its own Niche and I think a lot of people appreciate that and that was really like surprising and awesome yeah to to just like elaborate on that I think that's something that we were blind to before all of this was how our perceived involvement with FTX was preventing people from getting into the ecosystem and now that it's very public that they've been removed from the

ecosystem it's kind of de-risked it for a lot of people and people actually see a lot of value here and they think it's more of an even playing field so that's why we've been able to like open up to more of these people who you would never think would be a Solana ecosystem participant and are suddenly super interested in what's being built here in the long-term value hmm I think um Ben you and I have talked about this but Anatolia I think in one episode as well but do you think that Solana has been unfairly criticized time and time again um as being you know maybe it's because of your success maybe it's now with FTX giving you know more reasons to to people that have hated on you guys for a while um

how is that experience you know because I think from my vantage point you guys have taken a beating and constantly take a beating from a very vocal minority in crypto and just in certain circles where I think it's you know how much do you pay attention to that have you like you know is that like just you just to protect it accepted the fact that it's gonna always live there and you just build on a ship and not listening it as like a challenge I'm gonna convert Evan Vanessa to Via salon and Maxi but then that's way cool um I think uh I honestly like think that a lot of the fun and like not the fud but like a lot of the criticism coming from like intelligent folks in the eve

Community is very much fair and I try to address it and like um in some ways like our engineering roadmap has like changed because of like what's happening in ethereum so that's been like a very natural awesome part of like open source development just being in the open and like showing your cards having people [ __ ] on your design and then like finding the kernel of truth right in in that criticism like okay you're right about this and we can fix that like I think that's a very awesome process that accelerates the entire space um these are this is like people arguing on the internet about tech man like people were arguing about Linux file systems in the 90s like what what file system you picked in your kernel config was like a

a religious battle on the Forum yeah so I couldn't take it like that I I think look to address the question directly to say it's been like psychologically easy to take this much criticism consistently for the last two and a half years has been tough um especially when your ecosystem facing like working with teams because these also affect the participants in your ecosystem so when there's bad news in the news they're getting messages from their investors like what the hell's going on with Solana why are you still building there and they're coming to us for answers and so making sure that like you know you're like I I constantly refer to myself as a glorified customer support agent like I'm constantly answering these questions for people and

like giving them the reassurance that they need that like you know they're not they're not on something that's like broken and like these are misconceptions and here's the right information um but I think it's I think it's like to Tully's Point like people arguing about like Linux kernel setups on forums I think there's a component of this that makes it increasingly hard is because crypto is so Twitter based and it being so Twitter based means that like misconceptions fake news and like virality plays a lot into like getting your information out there so if you're not good at consistently combating that news from like you know a non-twitter account that can just make some [ __ ] up and then like suddenly that's the prevailing thought about like how Solana is

um it's it's pretty exhausting to like constantly have to like fight that battle but I think that like ultimately you don't make improvements on like world changing Tech like we think we're going to build like a global State machine that's going to scale to billions of users you don't make that kind of Step function Improvement without some trial and error and some punches in the face so I think we're we're all collectively here to take those just out here chewing glass fellas um what what do you guys uh what do you guys think are some of the fair criticism like I think Santiago's right you guys do get do take a lot of heat what what do you think uh are some of the fair criticisms um and then what are some of the things like guys you you clearly just don't understand how some of this stuff is

built like yes there was an outage but like that'll get figured out like what and then maybe there's some other things that you're like ah [ __ ] that is a big problem that is we really do have to figure that out yeah um the the way our like fee mechanism worked prior to the outages was criticized fairly and was wrong and it took like a a real like okay I saw a fail live to start really thinking about and how to fix it and that was like I think a very fair criticism that a lot of folks early on layered layered on Solana and um it took like a life failure for for us to figure out why it actually failed and if we didn't fail it we we wouldn't have

come up with like a thing an innovation like I think localized fee markets are a really cool and very different from how Salon how ethereum Works in terms of like their fee mechanism and mumbles and I think what we build is even better but it took it took some failures to get here um I think the like what influenced me was actually like one of the podcasts that I did with Doc grad on security um in that discussion like he made a very strong point on how minimizing the the security assumptions is really important for the network to to get away from like majority like having a having Reliance on an anonymous majority um and like that's this is where like

Diet clients and that design came from where we want to provide the same like you know minority if a small minority in the network is honest then you at least get a signal that the majority is corrupt and you can you know stop accepting the chain and then go through social consensus and yada yada like stuff like this I think is like very much awesome like it's just the best of Open Source development I don't know if you ever worked at like a big company like I spent a decade at Qualcomm there was none of this like collaboration with competitors like you weren't writing code in the open you couldn't like you know you have to ask your boss can we use this open source Library this is like the most amazing engineering environment I think anyone could have is like working in crypto right now because

not only is all your work you're doing open source but you can literally like talk to your competitors and like if they should on you with like a kernel of truth you're like holy [ __ ] you're right let me go fix that and then we'll use the research that you've done to like fix fix these problems and improve my what I'm working on I think that part has been awesome um I think it's a pretty kind of dumb unfair argument to just say that Solana is not decentralized I think you're not really like looking under the hood and understanding like that the cost of the hardware is the cheapest possible cost that you can have to achieve what we're doing you may not like once uh a global price synchronized price discovery

engine like that maybe not something that you care about that's great go use ethereum like you can get settlement guarantees there but a lot of people want that and that's actually very important for finance like you look at the the traditional trade five stack all of the money is not made in settlement it's made on execution if you swapped out the settlement house with a ethereum all that money is still going to be made by all these centralized entities that do the same [ __ ] that Robin Hood pulled on unlike the gme stock would like Citadel like all of that was still happen and you need an open decentralized like execution engine you need like truly open price Discovery where like any

hobbyist can plug in you know a hunk of organized in and get in the same Level Playing Field as jump that needs to exist for for you to actually disrupt that yeah so a lot of people that get that get what we're doing and like get the ethos and understand that that's very much decentralized and very much like an important thing to achieve yeah one of the big criticisms of Solana this year I feel like was less of the decentralization but sometimes more about the the outages my my understanding of the outages was everyone was basically wanting to hit the same state flooding in Spain yeah this was a very much a fair criticism and like we had to like I think get punched in the face to see how it was broken so you guys came up with a good

solution it's uh the stake weighted uh quality of service I think is the solution here it's like three components so like we're quick too we when we built this thing we thought totally you want to just overview quickly yeah yeah when we built Solana like blockchain and NASDAQ speed I thought most of the transactions are going to be like serum and we were right about that literally 80 of the throughput was handling like Market maker orders and they're very small transactions they take their short amount of compute and touch a very small amount of space and the way that our fee mechanism works is we charged by signature because the signature verification part was the most expensive part of the whole thing

but as the as developers started asking for more features and wanted to compose [ __ ] across lending protocols and all these other things you started getting very complex transactions that were very expensive and on top of that when you started seeing like things like an nft meant even though those transactions were very uh still very simple very small you had like we literally saw 100 gigabit worth of traffic hit a single block producer that were all nft mint transactions touching the same mint account uh bitfinex called it a DDOS when they published oh we had like a DDOS attack that was 100 gigabit we were like no this is just this is just like people

that want an nft we we didn't realize that people I mean like people were laying out that criticism correctly and I was I think I don't know I I thought that one we could process that much data that quickly and two that um there was enough redundancy between leaders that at least some of the transactions would get through and it wouldn't be as bad as it was and the other the other mechanism was start kick in um so that that was totally wrong so we have to throw that design out of the water and like figure out what is actually happening in the network and how can we solve it and like we didn't want to solve it in the same way that ethereum does because there's a very clear bug in how men pulls work when you

have an nft mint and liquidation and an Oracle update at the same time and there's congestion everyone doesn't know what the price is to get into the block but everyone is desperate to get into that block no matter the cost because if you miss that Oracle update then your chain link your Fox if you miss the liquidation you missed that huge opportunity so everyone prices at the maximum bidding against all these other com like all these other use cases and this is why you have like literally four thousand dollar fees on ethereum even though the number of transactions today right now on ethereum is exactly the same as a year ago the the fees the fees are much much lower now because you don't have that like hot spot contention

this this is like a classic database problem and the only way to solve it is isolation and you can do Cosmo style you separate everything into different apps and they're totally isolated from each other or you do like transaction isolation which is you know old school database stuff you make sure that transactions have touched the same that touch different parts of the state can be processed in parallel effectively with their own congestion control that's very localized to those and unless we saw how we failed I don't think we would have come to that design and then we just wouldn't even have like you know like we couldn't I don't think even get like serum to work if we just launched with a normal mempool so that

was learning and like I think important learning for us to have the this was like these 100 gigabit floods of data is what caused the congestion and then ultimately costs the outages when that much data hit like a programming error where you weren't like freeing memory fast enough in some queue and you just literally saw like Ram run out on these systems like within seconds yeah like a system that was running fine all of a sudden it's trying to drop 100 gigabits worth of duplicate messages and it wasn't dropping fast enough and like data was getting stale and Sub-Q and that queue would blow up to like you know 200 gigs worth of memory and that thing would crash and when you have a

third of the network experience that you get a Byzantine fault right because more than a third fail then you gotta take some intervention um those bugs got fixed and then the solution just like actually finally rolled out there's no more UDP the way that it works is that we can isolate each of these states as separate uh think of them as separate mempool separate fee markets so when you look at a whole pile of transactions and you're packing blocks you pick all the ones from the the hottest most important ones in parallel at the same time so one way to think about is you're running a bunch of different auctions and then you pick the top 10 auctions that are the the highest grossing ones and you only fit

those into the block oh that's interesting so now you've basically added this like prioritization fee so before like spam was really the only way to compete and yeah and now you have a prioritization fee and this comes down to I think fundamentally what these networks I just want to make sure I understand that and until is that that's what you guys mean by the local fee Market the local fee Market is basically allowing users to have their transaction included over others by adding the prioritization fee and that's right and and there's no Global fee system so it's like different pieces of State we'll have separate fee markets so like if you're doing an nft mint but somebody else over here is doing a defy thing if the D5 thing is not hotly contested state they're going

to have base level fee but the nft mint is going to happen you'll be able to compete it's just it's a new way to it's a new way to compete for transaction inclusion so we literally we got a demonstration that is working during the FDX [ __ ] show there was a huge volume spikes in you saw that like it wasn't perfect you saw confirmation times increase for like transfers or Solana pings but they were still Landing despite all of these Bots and liquidation Bots slamming the network and trying to trying to spam and like take 100 of the block um so like that thing that looks at a whole pile of transactions that are coming in it's trying to identify okay I can only take you know let's say the first 500

that are doing this like liquidation I can pack those in into the block and then I have to go find something that isn't a liquidation for that particular market and that search takes time and if it's if it can search fast enough and drop those irrelevant transactions fast enough it can then pack in maybe an nft Mint or a transfer right or like a Solana ping message and I think right like you're breaking Nano's brain over there no no actually no I actually really get a net no that I I didn't get it until just now that's uh I read like quick there's like quick qos and the local fee market so I was like all right those three things together I didn't get how these three things come together until just now so that that like process of like

searching for the top grossing things for different state right that has to happen alongside when you're the block producer when you're receiving data or you're when you're a random validator that's receiving data and then forwarding it you have to run that same process because you don't want to allow an attacker that's just like paying one lamp Port over everyone else to just Spam and fill up all the cues preventing the Searcher from finding the other opportunities so that that's it's like a knapsack problem it's MP complete but it that doesn't mean anything it means that it's just like a pain in the ass so optimized at the risk of uh sounding well is quic do you guys pronounce that quick is that quick yeah quick at the at the risk of sounding really really

foolish here and making uh kind of embarrassing myself can I try to explain those three things to you guys and see if in in layman's terms so okay so there's local I guess the starting with quick quick basically like in a nutshell just gives validators more control over the traffic overwhelming validators is that right yes and then so they can cap the amount of traffic they get to like one gigabit instead of like okay I'm gonna process stuff as fast as they can get which at 100 gigabit on some of these boxes the stake weighted qos makes it so that validators can basically just forward transactions to the leader based on stake stake weight

is that right it means that like uh if you're unstaked or you have like a very small amount of stake or even a very large amount of steak you can't flood the leader and deny everyone else if I have half of a percent of a stake the 99.5 can't flood me out so the leaders getting expand with with stuff like other validators can afford transaction right okay this guarantees that everyone has like some stake weighted amount of voice it's not a prioritization scheme but it prevents people from flooding the leader with like overwhelming amount of data from a single source and then the local fee markets are what we just talked about which that allows the user to have their transaction included over

others by adding that prioritization fee right now the only way to do it is with is the only way to compete is really with Spam this is the part okay yeah and you need these other two components because if you only just had like fee prioritization then I will just like flood the thing that's prioritizing fees and push everyone out so the only thing that that Searcher has access to are my transactions right so you need to like start shaping traffic and limiting the amount of spam that anyone can send to where it's more beneficial for them to increase the fee than to send to messages got it Santi do you want to pull me out of the the weeds of this at all or uh I we have to see like asphalt like

I didn't know I didn't know it yeah that's a I now realize what just happened which is you guys kind of fell on your face a couple of times and you figured out a technical solution here well or at least you have a thesis of that this will work so we knew pretty quickly what we needed to fix uh it's just release shipping later one code [ __ ] sucks man it just takes a very long time to battle test to get go through audits like and like get this stuff out so the 1.9 release was like the one that was really brittle and you saw in April like just congestion was constantly happening and also the [ __ ] and as soon as we ship 1.10 like even though we had like a an outage later that was just a random

stupid non-determinism in the runtime like performance and congestion was just like improved by you know dramatically yeah two seconds like everything was much much better and the latest release is even better I've I've one other question sorry Santi um I'm curious just said Anatoly or or Ben uh to get your guys to take some just monolithic blockchains like I'm just curious how is your guys's mind like at the the last several months we've seen all l2s have a ton of success right like arbitrims have a lot of success uh optimism had a lot of success the uh what's going on in the ZK space is super super interesting um I'm just curious how is your guys's mindset changed on like Roll-Ups either optimistic or ZK and as well as maybe

app chains too compared to the monolithic blockchain thesis so like I am this like kind of really focused on this idea of having a Global Information sink that this could be the place where State transitions move at the speed of light through fiber that it has to be a layer one there's no way to like split that up until Layer Two there's no way to like if you if this thing needs to exist and serves a world like some creates value for the world the way that we're implementing it I think is the is the only way to do it like you need a a single layer that's bft that's globally synchronized without sharding or any subcommittees now that's on top of this thing you could have like

a like a single sequencer Layer Two which does derivatives and gives you that like high frequency trading sub 1 millisecond like confirmation time for that tiny Market but I think having that thing synchronized with the Solana every 100 milliseconds is a really compelling product like you keep that's better than what centralized exchanges offer so there is like I think reason for you to have smaller marketplaces that are much much faster that synchronize on top of this like single giant State machine um the technologies that are people developing for layer twos all would work on Solana they would totally work fine they would even work better because you

get to synchronize your state much much faster right like I think all that stuff is awesome um there's a couple teams that are thinking about it in those terms like actually like okay building a hft derivatives thing that's running on top of Solana and like it has very high frequency Oracle updates and all it needs is a stable coin right like that's bridged into it and that's all it does those kinds of products I think make a ton of sense it would be super easy to build yeah is there anything that you guys learned from these l2s and from these Roll-Ups though like like when I Salon was kind of the first like optimized eth like prior to Roll-Ups Solana was the optimized eth um like what's the new Solana look like

what's the new and I mean we just went over a bunch of that stuff but like when you think about the next couple of years like what's the new Solana look like all right maybe better put like are there new learnings or things that you want to put in place like the move programming language or or yeah or anything like that yeah there's a bunch of stuff like I think what I've borrowed like what I see that's interesting that's happening in the industry is like clients are these providing users with minority honest minority assumptions I think that's really important so because I don't think any network is going to have eight billion nodes wait I don't I don't get that can you can so like ethereum's not gonna it's ethereum has like about 7 000 full nodes you know that's the security the network Bitcoins

at about 12 000 Solana is about three thousand we're not going to see a world with eight billion fullness oh yeah I say right so how does a user know that the net network is in line to them is the only way to do that is you either run a full node or you have full guarantees or you do a like client protocol like you sample the network and you get assumptions that if let's say five percent of the network is honest at least five percent then I'm not screwed but there's no way that the network is described so these are the honest minority assumptions I think those are really really important for a mature layer one with a decent number of nodes like Solana to scale to a very large

number of users because you still want to provide those users very high guarantees because once you have them I think the chance of the majority going rogue to become virtually zero like because you can't pull off an attack because of these protocols no one's even going to try and I think that that's a really important thing to have uh eventually um so that's very much like after I had that like debate with donkrat and like I his point like made a lot of sense to me I started thinking about this how we did how how can we implement this in Solana and like there's a design out and I'm hoping somebody picks it up and builds it out over the next year so that that's like one thing I think the

from move like this was actually also like I think a move itself as a programming language I think is a pretty good Innovation and it's um really interesting that Berkeley packet filter which is Solana's by code based on that was one of the first proof carrying codes the Linux kernel guys actually added a type system to BPF called BPF type format BTF uh recently and it does a lot of the things that the move verifier does so it does checking of the types and making sure when you like join programs if they're joined correctly or or the verifier fails this is something that I want to add or like to the runtime so that we can have

move compile to Solana by code format that has native move verification and like interfaces with rust and rust itself now has those verify that that level of like provability between two rust programs do you know if you call like instead of trying to compose these compose these complicated cross program and vocations like if you have a program in Solana you know what a CPI is you have to like basically build a transaction between one program to another you just you can now just call a function like you do a library as a programmer and that will make like the developer experience like I think a thousand times easier so stuff like this I think I see in the industry that I want Solana to adopt and that's like one of the challenges that I've posted on

Twitter like hey look this these are the things that we need to build uh amongst a bunch of like performance optimizations along this thread maybe just wrap it up is you've seen now I guess at the time you were building Solana I think you had a pretty fresh take on it versus like copycats of ethereum but nonetheless a lot of it was centered around how can we make something better functional now you've seen other chains launch what have you learned from the new designs if anything um and what um anything that you've implemented into the the road map and kind of the technical aspects of the chain thank you um so I think no one else is like really

building for this like one single giant Quorum so a lot of the networking consensus stuff we're I think still like the innovator there that's been kind of like sad no one wants to like go tell us how to how to build a better version of that because that would have been actually like I think awesome like a lot of our work that we do is in that deep networking code and it's like if then if Solana had 100 notes I don't even think we would have had any like congestion problems because it's just much easier to set up firewalls and like deal with these like floods of traffic when you're dealing with like a hundred reliable operators um that you can like go call them up and tell okay guys this is like this seems like a bug in our code but this is like

how you set up these firewalls to deal with this like traffic just once you get to like a few thousand it's intractable right like there's no there's no way to coordinate anything like that so that part I think has been like sad but like on the security side ethereum folks are awesome and like have been like super super forward thinking and I think move I think is a very forward-thinking bike uh that has a lot of awesome things for us that we can learn on um ZK ZK and like later twos have not been like on my mind as much because they're still performance wise they're just still not quite there yet it still takes way too

too much time to prove a complex thing like something like serum like dydx is a pretty good example um the prover times for just trades were taking like two to two hours around for like uh 10 000 trades and this is excluding this is excluding like the actual orders right we're not even talking about proving the orders landed unchanged this is post-matching you match just the trades and then you prove those out um it's just not yet like it's not ready for prime time yeah but it's just it could be ready for certain for certain use cases but when that when those 10 000 trades take like

you know that would take like four slots which is like I don't know 1.6 seconds to verify in Solana like you're it's just the why would you wait two hours versus like having you know spend 1.6 seconds and do directly on chain yeah the we talked about on the prior episode with Nick Carter um this is something that I think about a lot it says the security um sustainability of a chain certainly Bitcoin puts into question block rewards versus fees fees are very low block courts are high but they're dwindling um how do you think about the economic sustainability of Solana you know you have massive transaction volume uh below fees um and so

how do you maybe for like a Layman person first start with how do you create a viable economic model uh for security currently is it subsidizing them long term there's about like over a third or like let's say 12 1200 other the out of the 3 000 machines are our machines that are our PC boxes they're serving some business that's running on chain that has a demand for state that doesn't care about the block rewards at all they don't care about the fees that the network collects they actually what they care about is the data that's uh represents ownership of jpegs

that's being propagated through this network jpegs or like maybe price feeds or whatever but that that 1200 boxes is bigger than most other layer ones and they have no dependencies on the tokenomics of the network and they provide the same amount of security because all you need is one of those machines to to be the honest node that says hey look the majority did something faulted and here's the proof of that illegal State transition right like that's all you need like is really just any one of those so I think security wise what's really really important for layer one is that it's permissionless that anyone can join and observe all the state and observe all

the state Transitions and that it has product Market fit that people actually have a need to join and preferably that need is actually external to the tokenomics that they're running a business they're doing stuff in the real world that depends on the state and to them the infra costs are you know negligible and virtually nothing um I think that would definitely cover and pay for security on the network right like I think to me that that's like a very simple and viable way um I think in terms of like how networks accrue value that's a very interesting question and I've kind of like in my

early podcast we didn't even call it MAV at the time I was just thinking like this is blockchain and SX speed and it's running a bunch of exchanges that a validated as a block producer is optimizing order flow there's value to that so there's value to to the network just from that um but I think it's more nuanced than that I think functionally how the networks need to work is when I increase my fee I need to that fee increase in my transaction has to guarantee reliability like if I bump my fee instead of sending two messages or like 10 or spamming the network if all I need to do is just increase my the price that I'm willing to pay by the smallest amount that I

have a guarantee that I arrive first if the technology can deliver that then the network can start accruing math reward and that that's basically I think the really hard Challenge and that took I think some learning this is not something that I connected I think until like maybe the last six months hey Ben I want to throw it to you for a second um obviously this stuff isn't zero-sum but let's say let's say the only two other chains in the world were the only two other ecosystems were Cosmos ecosystem and the Avalanche ecosystem who do you consider to be more of a um like a threat to stealing market share from Solana who's that who's a closer

competitor or a competitor you worry about more maybe I don't know if I would consider them threats I I mean I constantly talk about this all the time and it's in my Twitter bio that like I I love playing positive some games and we are definitely still in the phase of positive sum in crypto there's a lot like right now we're just like this Collective hive mind that is taking different shots at scaling blockchains and applications of blockchains and I think that all collectively we're all moving in the same direction and we're feeding off of each other like Solana wouldn't be here without ethereum and you know the the evm chains wouldn't be here without ethereum and like Cosmos like kind of pioneered this app Gene thesis which is giving light to like other designs so

um I I don't think of them as competitors at least right now maybe at some point in the future it becomes zero-sum before the time being I I really think that we're all collectively like feeding off of each other and it's a it's a positive sum environment can I push back actually for a second uh yeah or well okay so that wasn't that was a play nice answer um but but I know what you're saying with like we're we're still so early these ecosystems it's zero sum I I it's not Zero Sum it's positive like I see what you're saying I think there's a clear zero-sum game though when it comes to uh amazing entrepreneurs building on in your ecosystem like stani choosing to build Ave in eth instead of I mean

Solana didn't exist back then but like instead of on Solana is bad for Solana it is good for eth like that like uniswap existing in eth instead of on Solana is good for eth and and I think the zero-sum game that like you need to win as as an L1 is getting the world-class entrepreneurs to build on your on your L1 and I think that's where I'd push back um that that feels like if I'm building an L1 that's the game I have to win Cosmos I would say if yeah if uh yeah I like I think Cosmos is like I think um like very robust tools for spinning up your own private Network and there's a lot of things you can do yeah with your own private Network like your own validator set the tender the tender

infrastructure I mean I've just been a fan of since I was at my multi-point days I mean uh like I think that they've done a fantastic job over there I honestly I think like IBC has has not taken off in the way that they thought it was going to but like regardless of that they have still been able to stimulate a lot of development on tendermen and like assuming that you know you figure out that that connective tissue at some point that works for everybody then you know it's going to be a massively large ecosystem that can all feed off of you and like um one of the reasons why I think like is really really important to layer one is to have its own unique runtime because like the runtime is your interface to developers this is the sticky thing like developers will pick programming

languages virtual machines operating systems for very peculiar unique reasons and when they do aggregate around a certain thing that's your community and like I think running evm uh is not going to give you that people that are deploying an evm that are not on ethereum are ethereum developers that just happen to be like not in another neighborhood or something they're like eat dogs you're not like building your own like group of weirdos that are super into your particular programming language and how you design and like pick trade-offs so I think this is the the strength of Cosmos is it gives people that like opportunity as an

engineer to go deep into like the SDK and figure out what's the best way for me to like structure my code and like optimize it and that is a very satisfying like thing to do as an engineer it's like my relationship with like my Linux box right is this is like very important to me as a as an engineer this is why I started building a Linux you love Linux control right yeah you always talk about Linux to be fair though like uh so we had the cosmos guys on and I asked them the same question it's like they just don't have the BD muscle um they don't they don't have a Benz for anger and they don't and IBC took a lot like two years lately I'm late

well that well I guess you have we have your BD guy here so we're getting we're getting pretty meta maybe maybe why would I ever hire a BD person but you you have I think that's successful I mean look at polygon polygon has what I think a fan data have fantastic hire for the guy from YouTube and they've been crushing the video game you guys have to some extent also across the video game until recently but Ben you know why don't you I think I think I think the BD in crypto is a lot like decentralization when people talk about decentralization they talk about stake decentralization and no decentralization

and yeah like all of the decentralization of data centers or wherever you're running your nodes and like there's so many different Composites of decentralization same goes for BD like BD could include uh brand marketing BB could include talking to ecosystem projects BDK could include getting new developers into the ecosystem BD could include web 2 companies or Fortune 500 companies which has been closely associated with like what polygon has been doing with a lot of these these larger company things so inherently what we've taken from like a BD perspective is like Grassroots developers getting new developers in the door net new people into crypto building specifically on the Solana blockchain for the the use cases that Solana was

built for so building unique applications not copy paste ethereum protocols onto Solana because that's not inherently interesting and then we give the ecosystem projects and the people building on Solana the tools to be like their own BB team and go out and Advocate on their behalf so like for example you bring magic Eden into the ecosystem and suddenly magic Eden's BB team is going out and bringing Brands and other people to launch nft projects on Solana rather than the foundation going directly to these these companies and saying hey launch this nft thing on our chain we'll give you 10 million dollars and then you know we make uh we make a big splash about it now that has its own merits like there is there is eventually like enough headlines where

people see that and they're like oh all these other people are launching on this chain maybe we should do that too and it kind of like skips the it skips the diligence Point um no no I'm saying I'm saying I'm saying theoretically theoretically a lot of the a lot of people have mandates for like web 3 applications like whether it's a Fortune 500 company or a web 2 company and like rather than doing the work themselves they just look at the headlines like they're like any other humans and they try and like skip over a lot of the like leg work they're not going to like focus on like which which one of these chains is like the right scaling solution a lot of these people just have a mandate and they need to launch something so they go with what you know sounds control F 15 key 15 uh

words in the in the q1 OR 10k of blockchain you know and right pick one so they're so they're so they're just just to put a point on it there's like Merit to both and that's why we're doing like a lot of different things so we're doing a little bit of the first like for example like during break point we launched with Asics uh the shoe company Asics did a Solana pay integration where they sold 3000 units of these Solana shoes made 600k in Revenue with zero credit card fees all in usdc and then had an nft associated with it that did a thousand soul in secondary volume afterwards yeah yeah so so we're trying things on both sides of the fence and seeing which

ones work out but ultimately what we're doing from like a BD perspective is we want to drive more usage to the Solana blockchain we want like people to use this because it's valuable to them like people use the internet because it gave them new use cases to like connect with people socially or do e-commerce we want them to get we want to give them new use cases we don't want them to launch an nft project just because like they have a mandate to launch an nft project and then you know nobody talks about it five years from now yeah I do want to touch on related to the thread you announced a partnership with Google on breakpoint um and this is a good transition I think into talking about the Solana phone um hugely relevant now of course there's apple and it's Monopoly on the App Store

and and maybe touch on to close out the BD discussion what you're doing with Google what that means and then segwaying a Segway into thank you for showing it the the Solana phone um the Google thing is like a very infra uh oriented project it's very much fits within their expertise of like Google Cloud um Salon has a lot of data like it generates a big pile of data querying it is a huge pain in the ass and bigquery is like one of the best products for creating data sets so them supporting a very liable data source that's very queryable through Google is awesome I think that'll like unblock a bunch of

developers people can then plug in and build products on top of it I think this is something that I think if blockchains succeed you will have these big AWS Google Cloud etc etc will give you access to that data it's permissions data right they're going to have it so that that I think is like where it makes sense for Google to compete in the ecosystem um like so I'm pretty excited about that part because I think that's uh like having robust View and like fast and like low latency like way to visualize that information query it I think is like one of the blockers for building Rich applications as the data sets get gets bigger as like the composition

between nfts get more intricate and like all the stuff we just need these tools to exist um the phone itself is not a partnership with Google it is running Android all right can we see it can you can you show it up to the screen yeah nice yeah he's got one that's I haven't I haven't I haven't opened mine yet I was gonna say can you text or call Ben right now or something oh that's clean see yeah it's got like a little s this is the the fingerprint scanner you tap this is this like is this a white how'd you do is this a white label like yeah this company awesome privacy that's osom yeah osom it's built by Jason Keats he

was a iPad architect iPad Pro Architects he was like one of the first employees at essential and started this phone company to go build like a privacy phone and we got connected like again like through an investor but we just kind of hit it off and we want to build a web 3 integration there that guarantees user security of their seed phrase and allows like developers to one give them access to adapt store that doesn't have these insane fees and like free access to web3 Features right like you can do token gated features you can actually buy and sell tokens directly without having to pay like an app store fee I think that

part is very simple to understand I think the part that's I think very subtle is that by moving the seed phrase into the the secure Enclave developers enough to worry about security like there's no way they can steal your seat Freights there's no way they can like take your money and run and that's very important when you're building Next Generation rich media applications with nfts with games that are very complicated that so it takes a lot of iteration and a lot of work to ship those and you have to do that plus keep this part of code secure never leak your seed phrase it's a very it just really slows down the development process by just really removing that obligation from the

developers I think the kind of stuff that wallets do can just iterate and get much faster and better and like the stuff that people want to do with nfts and these like Rich metaverse experience can actually happen here so that that's like I think a subtle long-term thing new new user behavior is the most exciting thing about all of this I mean it's the same as when the internet went mobile we went from desktop internet to mobile internet and it gave rise to new user behavior and then thus new product that happened after that so this is just the graduation away from desktop crypto to holding securely crypto on your phone which gives rise to like new use cases so the one that I've been talking about the most and that I'm most excited for that kind of like intertwines with FiFi

is payment like the cold start for crypto payments everyone knows that stable coins are like one of the killer use cases that exist for crypto right now it's basically free rails on Solana to transfer money around and but the problem is Merchants don't accept crypto payments because none of the consumers have crypto on their phones or an easy way to pay with crypto so suddenly you have a a saga phone where I'm I feel comfortable holding two three four thousand dollars on this phone and I show up to a a merchant and suddenly the merchants realize that all of their consumers have crypto on their phone so it makes sense for them to integrate an iPad with Solana pay point of sale service on there where they can get zero fee payments and then suddenly you have

the consumers and the merchants all holding crypto and then they want access to other things obviously some of them are going to offer it and like convert back into Fiat for dollar denominator costs but at the same time you give them access to applications like buying an nft or doing some other sort of web 3 enabled application natively pretty seamlessly like just signing transactions with your thumbprint dumb question what happens if you lose your phone yeah you do but like for normal this goes back to the heart of the problem right that you have today most wallets yeah which is people are not equipped to manage their seed phrase V2 you can do like an identity service that's got uh that can talk to the trust Zone certificate that's inside the enclave

and then do recovery through like an NPC that's not gonna be too like social recovery some sort of RG type of flow okay do you guys think that the driver of this phone is um people who love people who love crypto and they want to like use a more crypto native phone or is it something like goes kind of wrong in society it's like the bellage you take like Balaji is like really long on a crypto phone actually again like the best advertisement ever for a crypto phone but his reason is because one day like apple will do you know now they search your phone for like images of child pornography next day they search it for like images of like swear words the next day they search it for like anything related to crypto and you're not allowed to own crypto in the

US like and then that's the thesis for the phone like what are they there's there's two there's two things right now I think it's primarily like left curve early adopters who are crypto native that want this crypto phone to try it out and we're gonna get new user input from that long term I'm I'm a big subscriber to biology and the network State and like self-sovereign identity because over time as our lives get more and more digital it just inherently you lose more privacy so we need to generate product that will preserve that privacy and preserve the autonomy of the individual long term I do agree that eventually you move towards a 1984 uh society and you need to make sure that you have opt-out tools speaking of kind

of adoption how many users have put in an order for the phone what do these users look like so we have like 6 000 pre-orders okay like a thousand them just occurred like over a thousand of which occurred over a breakpoint so our Target is like somewhere between 25 to 50K units next year um okay so this time next year we'll have kind of 50 100 000 salonophones in circulation on the Wild and and it's also it's also important to note that that would be [ __ ] awesome if we had a hundred thousand I mean like I'd be jumping off this on this chair dude like but I remember I mean these things happen faster than you Anatolia I

listened to our podcast from a year ago when you came on with with Mike and me and you're like if we had there's some really low number of phantom downloads you're like if Phantom was downloaded like I think it was like 100 I'm making up numbers here 100 000 times and really it's been downloaded like 500 000 but you the number you said was like Phil got down a little 100 000 times my year is a huge success so we usually do undershoot these things what's the price point oh this this guy thousand bucks a thousand bucks so you know a little bit cheaper than um than an iPhone certainly and the reason to buy it now is it's a crypto native experience is that right yeah people that are pre-ordering it are like the the early super early adopters right like you have to you have to pre-order with

usdc too so you need to be like crypto native in some capacity to get the early early on phone um but the the point I wanted to make really quickly before we move on is the uh uh the the interesting component that comes with The Saga phone is like the Solana mobile stack or SMS even if even if like we fail at the phone here and the phone doesn't get a lot of pickup you have the Solana mobile stack that can be integrated into Android phones that obviously you don't have the secure Enclave in the phone but you have a more intuitive user experience that makes mobile crypto a lot easier which will also like give rise to like these new user behaviors and more stuff that you can input into like new product design could someone in ethereum do this and if

so like why haven't they done this they can like literally send us a pull request to add evm ethereum support I think neon is working on it potentially and we will figure out how to audit and get it in there yeah like it's like if people want to add ethereum support or Bitcoin support like just send us pull requests yeah cool I think uh to give you guys credit you know I think appreciate we've been kind of bombarding you with tough questions in this episode but I've always thought that this is the kind of thinking that is kind of far out there that I don't see in other teams um you know and I think it's a big gamble it's a big bet but somehow like it's now become much much more important uh if everyone's following Twitter and

mosque you know and and the whole situation with the App Store is very frustrating I invest in a lot of games I see the frustration from the team side and I can appreciate how some teams might want to actually just move over to Solana because it's like hey here's where we have the users and it's you know we don't have the gatekeeper which is Apple which is just it's really tough um so that that was the opportunity what drove this like I I looked at the numbers of like magician and openc users it's not that many people it's like 25 to 50 000 people that are actually doing anything with nfts globally if we have this device penetrated to like the most web3 like early adopters that's a

better distribution channel for devs than the big app stores yeah because those are like that's your target audience anyways right like those are the people you want to reach I was in New York and I saw the salon a store in in Hudson yards do you plan on uh doing more of these experiential stores uh across the world do you have others I know you have hacker houses actually so Solana spaces there's a lot of stores I forgot what the title of the entity is anyway but uh they actually announced that it's separate entity uh Under the Umbrella of labs I believe but it's they're launching like basically like Solana stores Dao where you can basically like apply for like grant funding to like kind of kick start your store so it's kind of like a decentralized movement for people to

spin up their license at the brand yeah true model yeah yeah we're just we're just we're just gonna be another Chick-fil-A that's not bad actually it's harder to get a Chick-fil-A franchise and get into Harvard so yeah he's like I could go spend a thousand bucks at this Salon store but I'm going to the Harry Potter star I thought you could say Chick-fil-A but yeah if you spend a thousand bucks a Chick-fil-A my friend we have a lot more issues to talk about hey well it's not all for me but gentle this has been a good discussion and um really exciting the phone um maybe we'll have to have you guys uh this time next year or before that to just track the progress what is the I mean parting thoughts and then also where is like the best um way for anyone that wants to learn

about Solana who's the best point of contact and what is the best kind of opportunities to get involved maybe with your team with other projects sectors just open-ended question for you guys uh so we are imminently we do one of these like quarterly but we're imminently launching a virtual Solana hackathon um there will be a fresh set of new prizes and new objectives to tackle so if anyone from a developer focused side wants to participate uh keep a lookout on the Main Salon of Twitter for announcements around that I'm gonna interrupt you but can you tell us the number of hackathon entrance participants over the last like 12 months because I think that's a pretty impressive stat when I saw it uh it's it's north of about 20 to 25

000 uh total participants and then so is it like the last year or over the last over the last year we ran one quarterly uh the last one had like 15 000 registrations and uh over a thousand or 700 teams or a thousand teams I forget it was somewhere in the ballpark of 700 to a thousand submitted projects been like a bunch of them got funding like this is kind of like if you're an entrepreneur that's thinking like I'm gonna this is gonna be like my web 3 idea that gets funding this is a really really easy way for you to get in front of like all the top PCS and like like get your products you know to the to the MVP stage

also if you go to solana.com events uh you'll see the full schedule for the in-person hacker houses throughout the year for the upcoming year those are great places globally around the world to come meet other people from the salon ecosystem investors Solana team members if you want to interface with them but otherwise other than that uh the best place to like get information about Solana is the Solana main Twitter account Solana podcast follow Anatoly and get some some Big Brand networking news um yeah there you go well thanks guys appreciate the time and I'm totally appreciate it it's great to have you back and Ben uh yeah great time [Music]