Crypto's Role in the Emerging Cybernetic Economy | Konstantin Lomashuk

Transcript

if you are an Empire listener hopefully you've played around on chain and if you have done that you know that transferring assets across different chains is a pain to put it nicely that is why we are incredibly excited to have the Wormhole Foundation as a partner of the Empire podcast stewards of the Wormhole protocol supporting over 30 different blockchains and six different run times stay tuned later in the show we have a cool thing that you can claim which is a wormhole nft just for Empire listener this episode is brought to you by moned which has not only the highest performance evm L1 architecture ever built but also the wildest and craziest community in crypto mad's internal devnet is live and public testet comes out soon so make sure you join the monad

community today at discord. gg/ manad m o n a d monad this episode is brought to you by shardo an evm based smart contract platform with State sharding and auto scaling shardi is designed to achieve horizontal scaling to ensure sustainably low transaction fees for you the end user you'll learn more about shardi and autoscaling later in the show this episode is brought to you by Supra an oracle provider across more than 50 different blockchains if you are building anything in crypto you likely need verifiable Randomness and you need oracles well for Empire listeners Supra is now offering a limited deal it is 12

months of supra free for any Empire listener you can go to Supra . that's s.com blockworks limited time only go check it out thanks Supra for sponsoring Empire welcome everyone uh very excited uh for this podcast um we have Constantine who I'll let him give his background which is incredibly impressive not only one of the founders of Lio but he has been as I think of people that really understand crypto like this term crypto native he is someone that is really deep close to the metal as a builder but is also a extraordinary investor he's been early

on so many Trends and so it's a great pleasure to have him on I think at a moment where there's just so much going on in crypto where're coming out of what seems to be a a sted bull market there's been incredible success in kind of the staking market now there's raking so that is something that we love to cover here um and I had the privilege of knowing Constantine uh because he was really kicking my ass when I was running validators at P2P you know I always thought that they were the smartest guys in the room they really understood networks extremely well and proof of that was really they just got like they they were one of the winners I think of game of stakes Cosmos like incentivized testnet and they and so when um you know he was building Lio for me it was a

no-brainer as people that would really understand how to build um and set up ethereum for this transition approv mistake and so Constantine welcome to the show really excited to have you on and U make it a lively discussion hey Santiago know so what why don't we why don't we start with uh yeah we just you know generally we try to skip intros because they're just kind of you know people can go look you up but give us um a quick summary of your journey in crypto and you know kind of where you are now yeah I will try to be short you know like in general I join crypto in 2014 you know like I first time heard about Bitcoin in 2011 but I when I heard

about that because my friend or you know like he said let's buy some like video cards you know like gpus you know like can start start mining you know like I said him you know like that I don't want to do it why because it is a p scheme you know like that's how I feel about the blockchain I didn't get anything you know like I tried to read white paper but I didn't understand the benefits you know like and then in 2014 you know like when I had more time I had already a business you know like that worked pretty well I started you know like uh and back then you know like I want to move in another country you know like because I was born in Russia and russan economy you know like the trend was

going down always you know like and for me you know like I understand that uh I want to work in a space that is not connected with any country you know like and doesn't have a country risk and blockchain was a place that I choose you know like and with my friend deup you know like I started to I mean I started like to make research in uh blockchain you know like and so I joined cyber fund and uh as a result you know like of our research in 2014 we did a report about blockchain assets it was one of the first report about new asset class where we took Aller like space so we take all their data from coin market cap you know

like all their projects that had public valuation with valuation with more than $100,000 if only was 100 of them and analyze them you know like and what we found out that it was some other projects like Bitcoin first of all it was a lot of Bitcoin Forks you know like but it was also some applications that were built on top of the blockchains it was some new blockchains with a new consensus algorithm you know like how I mean uh it achiev security for example it was some first proof of stake experiments and in general we decided you know like first of all we had a tesis that this Market because of some open source nature open markets and so on you know like that it will grow

faster than anything else you know like and I started to dedicate fulltime you know like to it as a cyber fun founder and in 2016 201 17 I run a fund it did more than 7,000 percentage but we closed it and in 20 because and give all the money to our like investors piece and in 2018 you know like I also closed cyber fund you know like uh and we distributed you know like all because we invested in ethereum Ico you know like we invested in Cosmos we invested in definity in PKA do in all the early stage projects so we generated some profit for us and distributed between Founders in 2019 I started in 2018 I started like pp. p.org

is a company and why because I mean because I really I I already got some like amount of like uh money to retire you know like but uh for me you know like I wanted to first of all keep this Market de centralized and and resistance that's why I started P2P because somebody need to run validators you know like somebody need to run this notes and I understood that ethereum will go into proof of stake and in general proof of stake will be big and understand blockchains better to keep them decentralized and sensorship resistant I started P top.org as a solo founder and in 202 basil joined with a team you know like in general we did later spinoff and

uh contributed to Lial you know like and that is now pretty successful back then we also I confounded Neil Foundation that is now working on DK Charing and on scaling of ethereum and uh um yeah and so like uh in the same time days and nights I continue to invest my Capital so I invested in salana back then we invested in Celestia La Ledger C stage we also invested in aular and in hundred of other projects and you know like now where where I am now you know like so I I relaunched cyber fund uh in general cyber fund is fully it's first of all Investment Company it doesn't have any

external Capital you know like only are uh you know like it's so we don't have any external Capital so I allocated my uh like equities that I have for example P top.org it is some uh Li tokens it is some uh like it's NE Equity you know like and other equities in it I'm not going to have dividends from it but in general it's a mission driving organization that going to reinvest Capital you know like to to achieve it Mission and the mission that we uh agreed together is to accelerate the economy uh because we believe in acceleration and we believe that it is a

new economy coming we call it cybernetic economy and um and in general we want to accelerate with cybernetic economy but during acceleration we understand that it is a lot of risk and our goal is to accelerate economy in healthy way and for example you know like a just want to give you a short example here what we did in 2014 we did a we wrote a first reporting and we call it CTIC economy report so this idea is from the beginning you know like and when we wrote this report we said the blockchain is only part of this economy new economy I mean we look on blockchains like artificial uh intelligence networks you know like we

understand that it will be a lot of other piece of technology stack that bring bring to us more more efficient and more healthy for Humanity economy and blockchain is just a foundational erer and during from 2014 to 2023 we did a lot of work in ethereum by Investing For example we invested in ethereum ACO then we participated and contributed to Lia to keep it decentralized and sens resistant and we contribute a lot to make it healthy for Humanity in in general we want to do the same in other in the blockchain space by investing our capital and also like in other areas for example in AI robotics

maybe iot and other part of future cybernetic economy awesome um constant I think the there's a lot of areas I want to get your take on the first is staking right because you guys have you guys have a really unique background as investors you are early backers of ethereum Cosmos polka dot salana Celestia anoma igen lay right all the these great things you're also Builders right P2P Li out nil so you have a really interesting view on the on the space um the the first place maybe we can talk about is staking so Lio has um done phenomenally well I'd say I think the current market share is somewhere around 35 to 40% um and I

think a lot of people in the industry kind of freak out a little bit about that about that market share right but if you actually I saw one of your tweets about look if you extend this timeline out long enough a lot of the maybe Lio isn't the one to worry about it's actually coinbase or one of the one of the centralized exchanges as all of their eth becomes right stake eth that market share could eventually cross 50% so maybe uh just give us your kind of overview of like how you're looking at the staking market today and then like tie tie in together this um this idea about market share yeah thank you for the question in general it's uh as I understand as I remember L the market share is about 32 % not 35 you know 322 but the question

is you know like uh first of all as I told you in when I uh start to work on pp. you know like my you know like why I started this company was fully private you know like because I really believe that somebody need to run the validation notes you know like and in general it's really hard you know like you should have a a pretty lot of expertise to run and safe you know like to not get slashing you know and I also like understood that it will be a lot of how to say large companies especially when ETF will come and so on uh and it will be a lot of acquisition of staking companies it will be a lot of uh uh I mean or Stakes that will run by

large institutional companies and if for example one day we will come where it will be all run by States it will be like a bad story for blockchains and the price and also like their blockchains value will go into zero why because I mean this networks sto to be sensor resistant they can reward State and so on and it's just database it's not a blockchain anymore and that's why I start to run pp. validation knows to first of all understand that blockchains better and second you know like to keep them decentralize and sensorship res system and U uh after when we like work on Cosmos and PKA dot you know like and it was the next phase for the for the

company and also for the market ethereum taking launch of course we follow it from day one we really understood that first of all I mean we had a lot of competitors in validation markets but all these competitors are our friends you know like in general we have friend with corus it was at ceros guys that were later acquired by jum it was some other players like staking facilities steak fish many other like figman block Diamond you know like in general we compete with each other for market share but you know like we in the same time we were friends and my our initial idea we came to these guys and said guys let's like I mean what are your strategy on ethereum I and all of them like okay 50%

of them didn't want to even to join validation note in ethereum why because they didn't know how to attract stake in ethereum you know like and it's good when your has how to say like a lot of solar stakers and they are really important you know like it's it's really great when you have like thousand of different uh validators in the in the market but in reality you know like I mean it's also important that it should be like professional players who really understand how to run network to make it stable you know like and if for example I knew everyone and like 50 or 60% didn't want to launch in ethereum is bad

for ethereum why because I mean it will be like 10 professional validators five life five big exchanges and some tale of solo stakers and network will be really centralized why because first of all for coinbase back then for binance it was really easy to sell staking to their clients you know like why because they already have it they have a Communication channel the acquisition price is cheap the LTV of this users is high and they can can't even like give it for free why because I mean you will have a good retention to The Exchange and so all the incentives was around centralization and when we when when we come to this validators we say let's

launch ligher together you know like in general and uh this was initial idea you know like we even have this chat still now but by some reason you know like nobody want to like build together you know like and that's why uh you know like with start to work on it like personally you know like and then uh engage them in a later stage you know like and but the main objective and the it's written in a mission of lier why lier will launch is to keep ethereum de centralized and sensorship resistance and what we are what we are also see that liquid staking will be successful and it will be a big adoption the same

you can look on usdt and usdc Market but the issue with usdc and usdt Market that the most secure solution is you know like a custodial solution why because you can't program I I mean you can build a synthetic stable coin but if you want to build stable coin baked by real dollars with low risk it's look like you know like it's maybe even more safe what usdt and usdc build you know like because smart contract risk is high but when you build you know like liquid staking it can be I mean why liquid staking is ever because you can show all the how to say like all what blockchain can do you can really build programmable

smart contracts that operate all this like I mean all this protocol and I think liquid taking is really one of the great examples of technology regulation where you regulate rules it's a great example of the Dows it's great examples what blockchain give you like transparency open participation and uh what uh lier did is you know like to build this MVP or product that first of all try to get share of the market you know like and also like try to fight with exchanges you know like and uh build more decentralized uh solution where it will be not only binance and like cracking back then and also like

coinbase that could have like 60% of staking but ler tried to give her the same simp solution you know like but in more secure way do is the endgame for ethereum to have do you think 100% of eth will eventually be staked this is a really like difficult question you know like and in general I really agree with some like researchers around MV I don't think that one I first of all I don't believe that 100% is will be stake and we can also look on other networks that are for example in Cosmo Network you have 20% APR and about 60% of is or Cosmo atoms are St you know like so it's not 80 or 90 and uh still

all the exchanges trade atom and I don't think that it is a uh a competition and uh the question is uh how much should be stake it's a good question you know like that's why in a uh when you design your protocol you can have a Target like uh infl emission you know like so for example you Target the staking R of 60% or 50% or how ethereum Foundation set about 25% you know like and for me you know like I really disagree not of course I I have a conflict of interest you know like but in case of P2P because I'm also like one of the validators and their revenue depends from you know like

uh emission of ethereum to you know like if you run ethereum noes for example of course of course I mean in case of as a lighter contribut I also can have issues here but my position is but I'm also like yeah hold a lot of e and for me you know like I think the biggest value of ethereum is decentralization and biggest differentiation I mean decentralization contribute to security you know like and that's why everybody want to build and that's on ethereum that's why the cheapest liquidity in ethereum and if you will harm you know like like uh decentralization by trying to like uh Target the low taking ratio for example

ethereum Foundation proposed I mean it's not they propos to to make mvi in general they don't say that they target some type of percentage you know like some of they say that some of them said that it is a little bit different other economy but in general you know like they want to Target uh more that 30 million is should be sted you know like I think it's not a good uh solution why first of all because coinbase on their custody has 17 million of e you know like and eventually coinbase is a corporation and I really love coinbase you know like I'm not hater of coinbase I think they build a great company I mean in general Brian Aron is a great

CEO you know like in general they build a great business and they're really positive for crypto you know but uh they are corporations that are work in some legal space you know like and there it's bring a risk to ethereum network and also as a corporation they have a shareholders and they need to maximize The Profit as an agent you know like in the network you know and they eventually we'll try to stake all this 17 million e you know like maybe they will have even more uh and for them I mean the price to run staking is the cheapest one why because you can like uh uh you can earn more you know on a scale with if you

will stay all the 17 million you know like you can spend lower infrastructure compare with other for example professional validators one because you can run a lot of validators on one note you know like and you can optimize your cost and also your R&D you know like is cheaper for you you can make it more secure and it's what I try to say that even with mvi they can still try to get big they will get bigger share you know like of the market and they will eventually try to take all the ease and if they will for example if you will Target 30 million and 70 million will be sted by coinbase one day and also like with ETFs because you know like ETFs are are going to the market

and I I think one day it will be St ETFs I mean why not and a lot of them are holding assets on coinbase you know like that means that I mean this kind even amount of e on coinbase can grow you know like and this is a risk you know like if you will make a staking ratio low you know like that it maybe first of all coinbase will have an issue why because they have a conflict inside of their company you know like how to run how to from one side they need to make more money you know like from other side if they will stake more than 50% they will harm the network and destroy the value of ethereum you know like and I think if you don't get this mass in your resarch you know like and you don't

understand what can happen and this is a pretty big and important you know like step for E for all ethereum Community to you know like uh uh to decide what should be emission of ethereum and what taking rure should be you know like we need yeah and this mistake can be so huge that will harm decentralization and that's why first of all from cyber fund we don't we are going we announc it a grand program you know like of 50,000 $500,000 to to researchers who want to make a external research not an ethereum Foundation but external research I have a potentially really uh dumb question that I'm still going to ask anyways which is um if the uh if the amount of

eth that's staked ends up actually getting to be this huge number that we're talking about it being the um there's two things that are going to happen the yield is going to come down tremendously I would say um so curious if if that's right or not and then the second thing is um as institu you mentioned like you know the eth ETFs like eventually one day they'll be like probably staking inside of an eth ETF the take rate right now on something like Lio is 10 I think it's 10% but as institutions come into the market they're not going to be comfortable with that right they're if it was trafi they would say all right you're 10% uh you you you know go to another Staker all right you you make me a competitive offer here you make me a

competitive offer here and that's going to basically Drive fees that's fee compression right so both of those things are kind of like have negative will have a negative impact on Li's business I would think which is that right yield comes down and fee compression happens I'm curious how you think about that like as it relates to Li's long-term business model um I think you know like in case of light any taking provider you know like what I'm really care is about like decentralization you know like and the question is uh how it should be can be achieved you know like and there I think that decentralized setups they have higher price you know like why because I mean uh you for example if you run as I

told you by one entity you know like it will be much cheaper and uh um you know like in case of um and that's why I think that I mean first of all when you speak about ETFs and centralized Solutions you know like you should understand that they not only care about their uh return they also like reward they also care about um like Risk you know like and if and the risk is also high for example risk of counterparty risk of custody risk of some other like piece of infrastructure and I think that the uh wider vision and the mission is first of all to make the most secure

solution and if it will be the most secure and detalization is part of that you know like the more decentralized it is then lower the risk then it's can be like I mean in a pretty good position you know like and I don't think that it will be an issue but the question is so uh and I I don't know maybe you read the last blog post of uh Mike nether you know like V ton you know like where they discuss you know like L on Treasury Market you know like bond market and they discuss LST lrts you know like etherum taking it's like a I mean a question is uh you have different you know like return and rewards but um you have a different

risk too for for example alertes with RIS taking don't just get rewards you know like they go got a really different risk you know like the same is with ETFs and so on you know like you have a lot of different parameters and rewards only part of them you need to clear on risk you know like reward ratio may we can move into reaking const I'd be curious to get your take on just the um I think I saw one of your tweets you said reaking represents reaking represents a significant Innovation we'll need more time to fully grasp grasp both its potential but also the risks in the future I'd be curious to get your your take on I guess both of those things the potential of reaking and and the

risks yeah first of all I should disclosure that saber Fant is a c investor of f you know like and I think that three Ram did a a great job you know like to introducing this new primitive of freaking and um I mean I see a lot of potential of it you know and in the same time uh I mean it is a risk you know uh I would look on it like an insurance you know like for example because people are for now you know like it's a lot of adopters of raking but for now raking is not even activated what we have is I that get a lot of assets that eventually Farm you know like or do some point or get some points you know like

uh but one uh but in April or like in next quarter yes it will be GA introduced you know like that will be a first example of staking you know like and also you should look that on some other markets you know we also I think PP participated in development of neutron you know like R taking is already works for example Cosmos Hub you know like activated Neutron and neutron doesn't have a like valid dator set you know like in general it's run by Cosmos validator set and in general all the security is already uh you know like uh provided by Cosmos Hub and nron is running a virtual machine or Cosmos Hub

so it is already like some examples that in production in general angular is not activated yet and uh I'm looking on it that in reaking first of all you get rewards but you also get a lot of I mean you should have have a risk because nobody ready to pay for you for your for example I don't know billions of T without slashing why because I mean it's not they will not pay you a lot why because in general it means that you don't have any risk and uh uh for me you know like like an insurance Market you know like I think that it's really question how to price this risk you know like why because and we always see what's happening in Insurance especially

new markets you know like people are underestimate the risk because it's not clear way how to measure it and but the risk are happening usually you know like and I think that I are doing a lot to launch in the right way you know like to try to mitigate all the risk and try to I mean do a lot of research in it and launch by stages uh but still you know like we will see some you know like I think yeah some like risk that will be still happened you know like in some networks for example it can be some type of flashing it can be some type of new attacks you know like that we

underestimate you know like and so on so for me you know like rest taking is uh first of all you know like you can look on the market you know and when you look on the market I mean people already St St this in some way first of all they use St te in a landing and we also can say say that this is time some type of utility you know like where people get some you know assets under under some type of the risk for example you can look on Leverage taking what leverage taking is when you deposit Stak is for example on hour you land some is stake it again and do it again and again and you grow your like uh staking rewards you know like for example from 3% to 15 and I mean in general what you what what

it is it's some type of you know like raking why because you get the risk you know like of slashing but not slashing but liquidation if the price of St is to is Will going down you will be liquidated in know way but in the same time you get rewards so you got this Arbitrage of a landing price and staking you know and uh I think this is already example that a lot of people are using stake te in this way where they are already do leverage taking you know like and it will be a lot of other examples of uh how people will reuse St assets for example in protocols like aair is building and I think it will be a lot of

new AES that will how to say will accept different type of assets some of them will accept Bitcoins some of them will accept usdt maybe some of them some other and finally you know like we will have a large hype you know like so a lot of assets will come to this Market but and also it will give generate a lot of tokens that maybe will later lose a price so I mean it will be really very speculative Market it will have a lot of risk but and eventually you know like it's short term you know like so middle term I think that I mean we will be not so hyped around that why because the fees that will be generated will be not

so high I mean if you look on all the networks you know like even Salan is not producing lot of fees and long term RIS taking will generate fees you know like it will be some use cases that will be really profitable you know like that will really generate I think a lot of fees and uh yeah this is my vision on reaking nice what do you think the ethereum foundation got right over the last couple years Constantine what do they get wrong I think you know like ethereum Foundation is improved a lot you know like in case of delivery you know I mean and part of that it was a competition from other protocols you know like that

and also uh part of that was a strategy where it was funding of initial like uh client teams and um in general I mean a lot of clients te they were underfunded you know like I mean they I remember how I met uh one of the team you know like and they told when when I think light the D a pretty big Grant about $10 million you know like to protocol Guild and we met the team and they said us thank you for the grand that was given in uh 2021 in the beginning of 2021 and it was 50k Grand you know like and they said oh

if you didn't give us this 50k Grand together with three another team this will like we will we will not here you know like and what I try to say that first of all now the teams are more funded they are executing much better and uh I mean it's continuous development you know like I mean it's a lot of discussion a lot of good researchers new faces like Mike Neer and uh so on you know like and I think that uh first of all 1559 change ethereum a lot you know like it will build a narrative that is not played yet you know like I think this bu run you know like 1559 will maybe help

ethereum to flip Bitcoin even you know like I really like a big believer uh in such type of economy and uh also like that I mean all the road map were designed around data availability it's also right choose and the rollups so I see that ethereum Foundation you know like uh improve proven a lot I still still think that decision is uh maybe like centralized you know like around I mean it is of course I mean maybe it's the most decentralized now that we have but it's still not clear for example with all this mvi you know like it was I mean discussed a lot internally you know

like then it was proposed and how it will go how the decision will will go I think that NBI is the most controversial proposal that ethereum have for the long time and it will be a good uh check of decentralization and decision making you know like how it will go why because I mean it is a lot of opinions and there I mean in all all core deps you know like a lot of people has different opinions and it's really important for ethereum important decision and and I think that such type of controversial proposals will make ethereum even more strong you know like why because immunity start to be activated and

I and I think that decentralization and ethereum social layer with immunity is one of the it's two biggest you know like think around ethereum you know like it's make it I mean impr profitable impossible to compete you know like and this is ome hey everyone wanted to give a big shout out to today's sponsor Wormhole Foundation stewards of the Wormhole protocol if you are like Santi and I and you play around on chain you know how bad the the cross chain experience is today well Wormhole has set out to solve that powering cross chain transfers for over 200 different multi-chain teams including some of the best like Unis Swap and circle so what does that mean

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uh transition approve of stake and also what do you think ethereum hasn't gotten right and perhaps what are the reasons why ethereum may not live up to the potential that you're talking about in a scenario it flips Bitcoin and perhaps another ecosystem whether it be salana suis these nextg blockchains really um surpass ethereum so let's start with what do you think are the things ethereum has gotten right what are the things in ethereum hasn't gone right and in what scenarios does ethereum lose its Competitive Edge that it has today yeah my opinion you know like ethereum did uh you know like so it's

really difficult question you know I mean to for me um when you look back uh I I think the right direction was to uh choose uh I mean this roll up uh strategy you know like from one side of course I mean each roll up can compet with ethereum you know like because they can run on that availability you know like and eventually be on one of alium from other side you know like uh ethereum is like still de I mean it's decentralized and it's look like a root chain you know like and it's really

secure and uh the liquidity is the cheapest one there I think that I mean for me you know like it was different positioning and different Vision you know like ethereum had one Vision you know like that it should uh so not scale you know like for example like salana and salana has like another Vision that they want to scale L1 you know like and make a lot of comp possibility around that you know like and I think that there well I mean so like uh ethereum for me you know like I think that ethereum is doing everything

right and I of course we can we we can uh uh say I mean it was a long transformation to proof of stake it was like some uh uh really like uh not some years that they couldn't execute you know like and deliver you know like like new upgrades you know like and it was like some type of Crisis you know like but uh when you it's really I mean uh easy to look outside of their you know like development but when you look on other companies when you look on other blockchains you know like I mean you can have like ideal track but it's

impossible you still need to build this muscle you know like muscle of research muscle of development muscle of something like some other parts you know like and uh I think in ethereum it was now built you know like now ethereum has really one of the strongest research you know like and one of the strongest Community it's really ethereum really has teams who execute well and uh um so for me you know like I think that I mean the current road map you know like uh the last one was published by Mike you know like is the right one but what I would focus more is and will try to deliver faster is I was focus on uh like

uh main clients of ethereum it's rollups I mean maybe it is some applications and so on and try to like priorize the features for for them you know like I mean because sometimes or I mean it's more about theoretic you Improvement you know like for example and there's a lot of different Logic for example why do we need 32 e stake not 1,000 and so on so we need to do this research better we need to have more external research for example this on an example of mvi now like so ethereum Foundation of course did a lot of great work here but it I mean I don't think that they go deeper

in validators economy that they calculated how what will be the validator set in current state rer and uh in general it would be great if it would fund more external teams you know like who will do research and maybe have different opinions around that because this is a pretty I mean important you know like Improvement also I mean now ethereum foundation in next hard Fork will deliver uh triggerable withdrawals I think it will make all this liquid Stak inrease taking much more uh better you know like why because the protocols could uh mitigate a lot of risk if validators for example will don't want

to unstake and their protocols can be more permissionless and that is a pretty significant Improvement and uh yeah so I think that Prez of the features you know like I should go from Main uh ethereum users for example if unisab is burning like 20% of the gas I mean it should have more voice you know like in eum development if roll s you know like uh the future I mean it means that these rollups can have you know like influence on ethereum road map but I think that we eventually com in in this you know like our um to the state where you know like

ethereum Foundation listen more you know like the key players on the market mhm Maybe as a segue to that as a key player I think Lio being and I know you don't speak on behalf of Lio but you know someone that's involved in the ecosystem how has it gotten better or worse trying to engage with the ethereum foundation core developers to you know make some proposals I I think you know like I mean it's pretty open the question is that you need to really like uh be proactive you know like and um I mean for example

it's more about res like resources of each team for example is it a roll up or is it like ledge Dow you know like and the question is I mean if you are proactive if you did a good research if you're going to all cor deaths I mean you can you have voice I mean you in general I mean you will be hurt you know like and also I mean it can be implemented so I think that it's a lot improved you know like I mean The Ether like development is the most open development as I know for example you know like I mean it has a systematic gos it's improved a lot you know like and uh everybody and I mean I think like everyone every like party who really

contribute a lot to ethereum can participate and this is really important I want to double click on taking I know you're early investor and I layer how credible or real do you think are the criticisms of you know we constantly hear rehypothecation of security this being a potentially existential threat to ethereum if something were to go down I also think of when people were really focused on Lio and you know if something were to go wrong with Lio you know there's a big stake there smart cont cack bug or whatnot but maybe help us bring more Nuance to that discussion

because I don't I don't think it's like I haven't heard like a very comprehensive discussion Ian layer team put out a great set of like frequently asked questions last month and I think that was a good document but I'd love if you could share your perspective as how you think of these risks um and what would be the potential kind of biggest vectors here yeah yeah I think you know like first of all I mean uh I really believe in the market power you know like and I think that I mean Market can solve a lot of issues you know like and uh the protocol design uh of course we can and also like Ang is

doing a lot of uh like spending a lot of time to research and also like understand how to launch this or you know like liquid it's taking in a safe mode you know like really more careful to not get any risk I think it's even like sometimes bad why because it's better when you know like uh the risk will happen on small scale then it will have if you will eventually will build everything without slashing without any risk you know like in general you will generate a lot of tokens make a lot of adoptions and then risk will happen you know like so for me I think it's even like maybe like it should be even like more open and uh permissionless you know like where anyone can participate but uh

for me you know like again I think first of all uh look on Landing markets for example it is a lot of Assets in landing markets and it's a lot of stake ethereum it's a lot of other um more assets and it was a lot of uh examples even like um like how maker oracles works and so on and in defi I don't I don't think that I mean it's really like large uh in current state you know like that in next couple years it is a large risk for ethereum why because uh I mean uh because like if it will be like even

like 30% is unstake by some really like large like uh slashing you know like on angular I don't think that it's in any any way harm ethereum Network you know like it will work as it should what really I worry more is manipulating of ethereum State you know like by staking for example if somebody will try to manipulate it in a bad way you know like for example bribe you know like validators you know like they will try to do something wrong um this worry me much more also like uh I think that it can be a lot of risk for the capital you know like if all I mean that this AVS

can bring but I don't think that it is a large risk for ethereum itself why because you know like I mean first of all not all ISS will be staked in rest staking I mean first of all it will not generate so much Feats you know like I think the second is uh if it will be some uh you know like splashing you know like it is some way first of all how to make it more like secure for ethereum uh lay one you know like for example you can slash lerts or like you can do some other type of slashing and uh I really like think that for now we are in a like hyp of staking you know like where it's

a lot of like we really like think have a lot of how to say uh estimation you know like we really believe that it will be a lot of rewards but I don't think that I think that it's too much um like hype and really like I mean the reality will be a little bit different you know like I mean that we don't get so much rewards and and general reaking will be just another market like staking or like for example like Landing you know like and so on and I mean will eventually need be proved by Fe that all this application will you know like uh

um will get rate and also for me it's a question in a lot of examples of reaking why do you need restating and you not launching own token for example it was today discussion of vitalic you know like in a Twitter and I think that I I agree with s you know like that for a lot of use cases you don't for some like use cases you really raking will work really well but for a lot of them you know like I mean own toking is also work well you know like and uh pretty secure especially it's if if if it created on ethereum layer one you know like and if you slash not ethereum but you slash

like polygon talking for example what is the difference if you don't try to manipulate the proposers or like validators yeah not to make this a poll segment on rest staking but would you agree on I layer in of itself like uh staking doesn't rehy introduce more leverage to the system the perhaps the biggest risk is on the reaking where there may be less competent operators that may promise higher yield and if there is a bog if there is a hack if there's an issue in some of these

resters in that Loop of Leverage that may be the biggest risk in this kind of like defi summer craziness yields people are chasing the highest yield opportunities without appreciating the risk would you the risk may be more contained because it may not be as centralized right like perhaps there would be more distributed stake among these resters but I don't know if you would agree with that and if so if you've thought of like mechanisms that can mitigate the containment or the the contagion effects of you know an event like that yeah I mean first of all you know

like I mean if it will be like bators you know like that will flash some amount of Fe you know like will like I mean in vit in any way uh Tel one you know like will I don't think that L1 will have any issues here but of course people can lose money but this is a new in general you know like this what should happened you know like if it is a risk it means that some risk should happen you know like if it is rewards the question you can get rewards I mean for what you paying if it's zero risk you know and uh that is I think the biggest question in my opinion here that eventually we will start with zero risk

you know like because it I will try to mitigate it you know like or H in some way and with high rewards you know like because it will be a lot of protocols that will just generate tokens you know like there not a lot of value but with high with I mean but with high price because of their Market hype you know like and there later you know like the market start to be more like equal you know like where it is a risk you know like and it is a t you know like and um and maybe even like we will underestimate the risk one day you know like and then the risk will happen you know like and then we will find the equilibrium but what we need we need to understand how to priz this risk and

without that experience without the launch of these protocols you know like we will don't know you know like I mean we are don't know what and also like I think it's a good comparison with insurance company you know like why because first of all I mean it is a policy you know like that defined what is the risk you know Like You cover by this TL second it is a capital and the third one you know like it's slashing that should happen you know like or if it's zero slashing maybe then the price should be low and it will not generate so much fees you know like and that is what we need to like really like uh find by the market and now Market don't know

how to estimate it how much to pay you know like what is a slashing risk and is it a a risk for people who deposit you know like is there yes of course I mean it is a risk and but I mean it's like in defy you know like if you will if you ever like deposited in a farm you know like during the five summer you also got the risk of uh uh you know like smart contracts but for example some smart contracts was autonomous for example like syn they use synthetics smart contracts where the risk was low and that's why a lot of capital use it you know like but what they did they just premine tokens and then we all see that I mean this mechanic doesn't work you know like and the market stopped to do

it in this way and the same will happen to rest staking you know like it will be a lot of tokens that will be generated and maybe even it will be safe all like with some risk and uh then you know like the market and the protocols will stop cre if it is no risk you know like they will stop to to pay so much const I'd love to maybe switch gears a little bit and get your take on so the F the first time I ever heard you on a podcast was actually a was actually the bank list podcast was with Santi and it was a salana podcast um and I think it was Q4 2021 I'd love to get your general take on I mean you're about as big of an I think ethb as one can get with what

you've founded but also what you've invested in I'd love to get your take on things like salana Celestia some of these other ecosystems that are starting to get some steam yeah Festival you know like I think that in general I'm really I'm working in 2014 you know from 2014 in Krypto you know like and days and nights you know like almost without weekends and vacations you know and I really love it you know like I I really love people are who is working the space I really love Builders you know like and there I really I'm I mean I love ethereum you know like why because they built really like this social consensus this legitimacy you know like decentralization and so on but from

other side we have other ecosystems that did a lot of Innovations too you know like for example Cosmos relaunched or launch raking already you know like in some way H it is also like salana that is like building like a different Vision you know like and I what I think is are important that all these people are pushing our Market in just forward you know they accelerating for example salana by competition accelerated ethereum development you know and this is a super great you know like and for me you know well I am really like Pro acceleration I I really think that we one day we'll have more fair economy you

know like economy run by data uh by that will based on blockchain you know like an open data with all this Ai and ml stuff you know like we can be more efficient you know like and more equal you know like now people live in the best their time you know like they have more food they're more healthy you know like it's of course worse but it's I mean not so many like it was before and uh I think that um I mean like it's one of the best time for Humanity and it will be only better and that's why I Am pro acceleration and I think that when you invest you know like in Cosmos and you invested in Celestia you invested in

salana you are helping to test the hypothesis you know like you are and all like the ideas to really like build a better like piece of technology that will help to build you this decentralized no like not only decentralized but more uh this digital world you know like this superc computer one day and uh I I I think that the market is huge and uh uh it will be a lot of players you know like I think that ethereum is clear winner from last blue run you know like but it's really hard to compete with ethereum and Celestia you know like salana Cosmos and others did a pretty great job you know

like by building another Vision you know like we don't know which vision is right you know like we can only bet by buying these tokens and selling these tokens you know like and but you know like or choose you know like on which side you are you know like by uh investing in it you know like and uh contributing to this protocols and for me you know like I don't think that I changed my mind from 2021 you know like I'm still on the same page you know like I really love ethereum you know like and but at the same time I'm happy with building like toly you know like I'm happy that he didn't stop after all this stuff that happened you know like I I I it was a really hard for him you know like I'm

sure it's but he really like uh keep building you know like days and nights and really love it you know like why because generally finally uh what we want to build is cens resistant like machine you know like for all humanity and doesn't matter who will win if we will keep it decentralized and sensorship resistant for me if it will be even win another system that I didn't invest I didn't know them and but they will deliver this values I will be already winner you know like and that is the like my like Vision con i' be um I'm going to Zoom way out from some of the the niche topics that we're or the topics that we're talking about here and I I'd love to I read this cybernetic

post that you posted uh or the Cyber economy eight years ago you I found it on your blog actually and it was talking about kind of capitalism there's like two systems socialism and capitalism and now there's this kind of new system cyber economy a I'd love to hear that how that thesis has developed and if you still believe that because that was what was eight years ago 2016 right so I'd love to hear how that thesis is developed I i' also be curious how this thesis came out of your like um just your time in Russia and like how your views on crypto has been influenced by just like I don't know your childhood in Russia yeah you know like uh thank you for a great question uh I think that we

have this idea in like 2014 2015 but what I try to say always that uh I mean people now say a lot that AI or like chbt or llm they hallucinate a lot what I can say what I want to say that you know like people are glucina even more you know like so uh I mean back then you know like in 2014 2015 we didn't know or we couldn't imagine you know like how this ecosystem will evolve you know like and we were just Believers you know like who really try to imagine you know like how the smart contracts ethereum network will evolve what will be the future and our like concept of

cybernetic economy in general that will find equilibrium between capitalism and so socialism you know like where in general it will find this equilibrium why because you'll have more data you know like why because we will have more efficient economy and what we need first of all we need more public layer and at the same time we need like Ai and other like things that will help us to generate objective you know like information and I think that uh I mean we had this vision and we had a lot of hallucination back then and now you know like I mean we are with all this launch you know like with all this uh um I mean with all development of AI with all the

development in blockchains I really see that this future is coming you know like I mean we're really closer to it and I will happy to relaunch sber fund with the same vision you know like that we need to achieve it in general really believe that capital and Technology will come together you know like on blockchain you know like and there it and Singularity will come maybe one day we will don't have money you know like and what we can do we can just build it you know like we can just accelerate it we can help and make it more healthy for Humanity and that's what we are doing I just thought e was money so in a world where there's no money then what do we have no I'm kidding yeah yeah you know like I mean

it's funny because I mean we don't know uh but the question we need to achieve it you know like we need to achieve another level of society and the question is how and I think that capitalis work really well but can be it more efficient yes of course and we are building these Technologies you know and maybe like one day with Singularity will don't need to work anymore or like I mean the society will change a lot and there um and I think that it's great I mean first of all it's inevitable you know like so we can't change it even if I will do nothing will retire it will happen but what we can do we can just bet and like try to make this world better you know like for example but not by by not investing in States but by by

investing in ethereum you know like and and also like try to make happen it faster and that's what we are doing yeah I want to ask you two questions the first one what has surprised you the most in in your crypto Journey yeah what surprised me most good question I mean it was so many surprises first of all I mean one of the surprises is uh uh because in 2014 I had zero experience in development you know like of it products you know like that it's first of all so hard to build this new

lirer and uh build adoption around it you know like for example ethereum proof of stake took six years you know like when I are like listen now like these guys who are building AI you know like and they say oh AI will be in three years or some type of AI I really understand that they underestimate a lot of complexity you know like and I mean it will take much much much much more time you know like and I think this was a big surprise you know like how much how much time it can take um yeah so another surpris is you know like I can't even I I I don't have an answer here you know like I mean it's in general you know like every day I'm like

or I'm reading a lot of Twitter like and as all everyone you know like maybe now people are reading more for forecaster but you know like uh but and in general I really like enjoying my time in crypto you know like and I'm enjoying how the Cryptor is evolving you know of course we are focused more on infrastru struction so we focused on 1% of you know like project and Cryptor but people who are working in it you know like they really ome and I mean I really love it and yeah and uh what is maybe you can answer here what what surprised you more you know like can you tell

us um I think there's not a dat that goes by that I don't like appreciate but I'm in constant awe of the how crypto is fitting in the kind of the jigaw puzzle of how the world is shaping up both in good and bad ways like crypto I think comes at a the right time unfortunately the world has become more centralized has become more polarized there's more distrust of Institutions and that has always been like I think immediately what you are drawn to when you discover something

like Bitcoin but then you layer on top like Ai and I just think that crypto the more I think of it the more I'm surprised of how intergr crypto is to solving some of the biggest challenges that we are facing but also the biggest opportunity of unlocking like a step function Improvement in how we coordinate the fabric of society it's really tough when you look at people and they ask you why crypto and you say well because I I think it's the most social impactful socioeconomic transformation of our of our time and they're like seriously like isn't that a

casino isn't like is why wouldn't you say something like biotech why wouldn't you say something like AI and I'm like certainly those two areas like have a ton of importance why because they're closer to the real human experience unfortunately crypto struggles because it's a bit further removed it's it's on the back end right and it is difficult no one kind of says like it's difficult to like tangibly see crypto as something that really transforms the fabric of society whereas if you see a vaccine it's like it's a vaccine but I think crypto will power all of that it will improve coordination by

orders of magnitude therefore money moves faster ideas get discovered faster and get funded faster and that has a downstream effect in biotech in Ai and I think bringing it all together the thing that surprised me the most is that I didn't fully appreciate the big picture and I've said it recently and I'll say it again here is I think I'm earlier to crypto today than what I was in 2012 mhm because now I have a better and deeper appreciation and understanding of how tangibly transformative this can be and I'm a bit scared that it is happening all in real

time and I just thought that it would take much longer and it probably will but it's just [ __ ] crazy like it it is a priv to be here and to to be a part of it and like be living and breathing it and you know that kind of Gets You Through the bare Market can It Gets You Through the the moments where it's it's difficult too right to build in the open and to be in crypto sometimes but it's incredibly rewarding too yeah I mean that's definitely amazing you know like and there are really like it's I also love to invest Capital you know like not only build because you also can help so ome people you know like to build their ideas you

know like for example we just founded ter metalex you know like in they're building this cybernetic organizations cyborgs and uh I really understand that I mean it's impossible to change uh I mean like the world you know like without because I mean legal is so old you know like and I mean it's really like adopt Innovation not so fast from one side we are lucky that say not so fast from other side you know like it bring a lot of uh issues and also I really when I built my project like when I build like this new products you know like I really get so how so much new experience you know

like and I really understand that for web to Developers for people who are outside of krypter to build a dow to build the decentralized autonomous organization is almost impossible why because you need to learn uh the basic stuff you know like and it take years it's you need to make a lot of mistakes you need to really do a lot and if you'll try to how to say to build a I mean like some basic stuff like as infrastructure as a framework you know like for example this new organizations that really like designed like DS in the right way that are really work with legal Frameworks you know like that don't generate a lot of risk for

Founders and so on this infrastructure that we are building can really like long term you know like bring a lot of new Founders and really change our landscape a lot you know like and that's why for me I really like try to find this groundbreaking things you know like like for example Metal X that is a big building like from one side a legal firm you know like from other side you know like technology to really launch a new type of organization and make it more simple and eventually it will come to like as you said you know like to new economy and crypto is like one one of the foundation of it you know like and

when you come to AI now you know it's also interesting why because when you speak with investors who invested in AI usually they are not so Technologic heavy and you know like a lot of infrastructure in AI cryptography and so on they really have a lot of intersection with Cryptor and it's really interesting how you know investors from Cryptor can be really like good investors in Ai and also like teach people Founders from AI how they can use blockchain also like I mean blockchain can use AI in some way you know like for example we can have a second opinion from assistant on da proposals we can have a lot of other things from ai ai can have a lot of

things from there like blockchains build some incentives on tops have like accounts for AI agents you know like on top and build economy open economy on it and also like uh yeah so I mean all of this will merge you know like and I I think that we are really like I mean in the best place ever you know like for Humanity you know like and we have this really chance where technology is so fast that it's impossible to I mean uh I think that for people for Humanity is really possible to run so fast and one day it will evolve you know like in Singularity and uh we will I hope that this all will creat a better and more

fair place for more people on the planet especially you ask me about you know like my Russian experience here so I mean I was born in Russia and uh yeah uh and for me you know like I mean all this economy and like corrup coruption a lot of other things really like uh push me away you know like so I moved from Russia like more than five years ago and uh um I mean all what's happening you know like I mean in general from one side it was a lot of it companies that were were grow you know because nobody touched them you know like in Russia and

it was a lot of clever people and it is a lot of clever people there from other side you know like all this uh um all this bureaucracy all and I mean like all these politics guys you know like they the trend was going down always you know like I mean they uh it was there and it's really bring me to where I want to build business outside of Russia why because you know like I really understand that it's impossible and also like outside of any country so Global just open a computer and work you know like in a global space and I think that crypto make it happen you know like because I am a guy from

kingr a small City that between Lithuania and Poland you know like invested in ethereum I saw you know like and like many other projects by Bitcoins you know like and that was it is ome you know like it's create it's destroyed like Silicon Valley you know like funds that you know like only has this opportunity to invest and give it to everyone and I think that maybe like new Ico platform is not so bad idea you know like because we really need to find a way how to find F new talents and give opportunity to everyone and there I mean now like it is a war in Russia that started by Russia and it's really like I mean the worst time you know like and I

I I I don't have any like words you know like I and I don't know will I ever back to this country you know like why because it's not clear how I mean the trend can be changed you know like I mean it's it's not clear how uh I mean it's a lot of propaganda people are listening it you know like they had hard opinion and it's I don't see any good way uh tell you about uh how in the 15th century uh sarus Russia and the roots of Ukraine I'm kidding you know H the inter with Putin started with Carson Tucker

but um now it's really I mean I think you're it's very exciting and refreshing to hear your takes as a both a builder and an investor and I think more and more people are realizing how crypto can improve coordination and really facilitate when you're exchanging value people start caring more otherwise they don't care they have a attention span and you know they lose interest but crypto that's why speculation is so important and you're transacting value so with Dows with everything there there's skin in the game so the hope is that you know ideas get discovered faster Founders from every background

Place get funded um and that's really exciting right someone like you you know or or how many projects have you back that you do care you don't even look at a resume you don't care if they've have a four your education it's like show me your GitHub repo show me what you built and it is a very competitive market it's open source and the beauty of that is that you know projects like Lio or others can really go on this escape velocity because money's moving at the speed of light from every corner of this world and people are constantly looking at it yes it's adversarial there's exploits will be exploited but over time there's Lindy built in there's

resiliency and that creates I think the backbone and infrastructure for kind of the value layer of the internet and I don't know what that's going to look like like no one could predict that Uber would come out of smartphones but like it's so hard to predict how technology is going to impact and the kind of applications but I feel like more and more like you have this like fundamental belief and conviction that there's probably no better way to transact in a digital manner than through open decentralized distributed blockchains and it's going to fit into so many of the things that we're seeing

now and that unlocks not only a lot of efficiencies in the current systems but so many applications that we haven't even begun to imagine we can't even imagine surmise today maybe you can I can't but you're just going to be here and hopefully you're going to catch the big ones right so I've said it and just to round it out but I've said it time and time again I felt that the best investors in crypto are founders or are very close are like are building are actively participating in these networks and I think you're just the Hallmark of what that means because you're doing both and you know I don't think there's luck that you've

been able to find and back at the earliest of stages some of the leading projects time and time again over over the many years you've been in the space so big congrats to you um any parting thoughts I think this has been a great discussion a lot of things we've covered but I don't know if there's anything else you want to touch on before we leave yeah I mean uh I think that I want just to tell you like to tell everyone you know like who listens this podcast you know like that they should keep building you know like every day and I think it's the biggest opportunity in their life you know like I mean we also continue building let's build together

you know like we also like actively investing you know like in all this intersection blockchain other markets you know like and we really happy to support Founders you know like who are really doesn't matter where they are you know like uh the important is that they want to build open S you know like healthy for Humanity Technologies you know like and that run by open market you know and um yeah so really excited you know like what's happening I think that we are like in the new like uh in a really good place you know like to drop your like uh un like if you student drop University you

know like if you are like a employee you know like you you can drop your like work and start building you know like new ideas that will help us to build this cybernetic economy together guys great place to end Constantine appreciate your time man congrats congrats on everything and excited to see what you do yeah thank you very much thank you always a pleasure talking to you Constantine hey everyone Jason here thank you so much for watching today's episode wanted to take a quick second to thank today's title sponsor arbitrum we know you are tired of onchain experiences that have unaffordable fees and frustrating transaction speeds and that's why we partnered with arbitrum you can

experience frictionless trades lightning speed and LaGree transactions all for pennies per transaction explore arbitrum expanding ecosystem at portal. arbitrum doio that's portal. arbitrum doio see you for the next [Music] episode [Music]