Deep Dive: L1 Governance Today | Cooper Kunz, Jim Parillo, and Myles O’Neil

Transcript

the more controversial or the more important an upgrade is to a network you're going to see potentially more extra steps let's say more ways to verify that you are qualified to have opinions on economics or technical details or long-term token distributions um the idea that you know every token holder is equally capable of making those decisions I think that we're going to quickly move out of that kind of era of of governance hey everyone quick shout out to today's sponsor namada nada is currently entering phase three of their mainnet rollout so make sure you check it out by following the link in today's show notes we'll talk more about NADA later today but for now let's get started hey everyone quick disclaimer before we get into today's episode

nothing said on bell curve is a recommendation to buy or sell Securities or tokens this podcast is for informational purposes only and the views expressed by anyone on the show are solely our opinions not Financial advice our guest and I may hold positions in the companies funds or projects discussed all right everyone welcome back to another episode of bell curve um you got a round table here today so joined by my occasional co-host miles uh Jim pillo and Cooper cuns guys welcome to the show thanks for having me thanks for us F guest special guest yeah we're not sure if we're gonna get too much air time today little baby pill I'm gonna try my best to keep quiet

other than when I'm supposed to be speaking um and so I'll be on mute for quite a bit of like when I'm not talking but this is uh baby Perillo I don't know if I'm allowed to like say his name uh I don't know where the sunglasses are my wife asked me to put sunglasses on them but I don't know where they are so you're just gonna see half his face uh and we'll find out how many people actually watch the video versus like listen on Spotify or on Apple like we'll see who's watching it and who's not actually watching the podcast so interesting but thanks for having me we'll see what we can do to bring him in as a recurring guest here but um guys this is this is going to be a fun one we're going to be talking about governance here uh specifically L1

governance um and see how far we can go down this route so the Genesis for this episode and sort of the jumping off point that I want to uh turn it over to all of you is you know we've been following simd 228 over in Salona land relatively closely and there's been a lot of really good analysis um on the particular the merits of the particular proposal um I would encourage you guys to head over to light speed or ZX research where there have been a couple of very in-depth episodes breaking down uh the pros and the cons this ultimately ended up not passing um last night at least said that we're recording this on Friday morning uh the 14th um but the the other interesting component of the other interesting angle uh miles you and I were talking is that

um this was a very this almost looked like a cosmos style uh governance vote where actually validator governance um was a huge feature right so you know if you've ever kind of followed along in the cosmos ecosystem around some of these more contentious uh voting sides of things that's what this looked like a little bit um and so it just interesting I hadn't really realized that there was this like stake weighted validator governance in salana um I think some other people were a little bit surprised about that as well um and there's a question of whether or not that's good or bad what are the pros and cons of that specific approach but I think it brings up an interesting topic of how does governance around l1's work in general uh I think this has been a relatively opaque process in the P

relatively opaque um you know part of the crypto world so maybe we can look at some of the different governance models around Bitcoin ethereum salana Celestia by way of example here and then we can kind of maybe build our way up the stack and end uh discussing sort of the the modern state of dows but yeah whoever is um maybe miles I can turn it over first and we can talk a little bit about the you know yeah absolutely um so i' would say like I'm working on Delta Network and I'm thinking a lot about this stuff right now will be a layer one um and the more you know we kind of dig in just more I appreciate how hard L1 governance is uh there really is no like Silver Bullet that is the answer we've all been looking for every sort of approach has a

lot of tradeoffs um and in general the sort of approaches that we've seen is on one end of the spectrum you have more or less um not formalized but sort of Shadow governance led by the foundations um and the development companies uh so you know this is where like sui is this is where salana was before they introduced validator voting um and then you've got uh going kind of across the Spectrum validator voting um so any validator this is what we see in salana right now um and then on the other end of the spectrum you've got validator and token holder voting so this is what we see in Cosmos where validators vote but token holders can override that vote so

you have basically you know as a default you defer to your validator but if you feel strongly about a proposal you can go ahead and vote yourself um and yeah I think there's also a way to look at this between the types of decisions that need to be made in L1 governance um which are very different right protocol upgrades I think fall between two there's kind of two flavors of it there's like really big structural changes like the merge right um then you have parameter changes and I think you know that is typically focused on the economics so that's more like this latest Salon proposal and then you've got um some projects that decide

to also have the treasury uh governed by token holders and by validators and so it's more just you know uh pure like spending decisions um and all of these you know they don't need to you don't need to pick one governance type that covers all of these sort of decisions um we haven't seen any of these projects like Jim we were just talking about this where maybe you should have a different sort of decision- making Pro decision- making processes for the different categories of decisions right like maybe the folks that um vote on protocol changes should be different than the

people that are voting on um treasury spend maybe treasury spend should just not involve any token holder voting maybe that should just be the foundation right um and yeah then I think the voice of the token holder should come through on maybe some of the economic side so yeah I'll I'll uh I'll pause there I know you guys have some thoughts um but those are that that's the kind of the landscape of I guess decisions that need to be made and the different sort of decisionmaking structures that at least we see right now in the space I I guess just to add a little bit to that I guess you know governance has always sort of existed right probably I'm not a proof of work like expert and I haven't

studied the history of proof work right but essentially miners had to like like there's like at some point the upgrade happens when enough miners switch over right and if not then there's like sort of like there's two block there's two chains for a little while and there's a fork that exists and and ultimately like as more and more miners adopt the new parameters or the new you know the upgrade like all of a sudden like that becomes like the canonical chain right so like governance and like whether it's validators or miners like have generally been in charge I think like historically of like when upgrades occur when there's changes to to the to the blockchain um proof of

stake gave token holders more than just the tokens that they could buy it gave them a stake in like the network in a way in which like for some chains they decided to give that stake actually like meaningful governance power um and I think Cosmos was one of those that like kind of went really went you full on board with like you know token holders have a right to vote on everything from economics to finances to to upgrades and I think the one thing like as we were looking I mean we spent a lot of time in Cosmos I spent a lot of time in Cosmos I think Mike you spent a lot of time in Cosmos like miles you spent a ton of time in Cosmos right like I would say I much as well and like like literally did brain damage I think

to me myself uh in doing it at times but you're in the forums you're talking to like Rand individuals that have loud mouths and you're not even sure if they have a stake in the you don't even know if they have tokens right they might just be causing trouble right like causing a causing a causing drama for no other reason other than like they don't have anything better to do with their lives um and it became very contentious and like to the point where I was like you know I think personally when it comes to these things particularly like in Cosmos but with there is going to be like voting in general is what we noticed was two things right um the first was like when there were parameter changes it had to do with like inflation when it had to do with like operators

like what operators like how they make money um they generally were in favor of increasing inflation and they were generally not in favor of lowering inflation and that's because it hits their bottom line right token holders on the other hand very well may be in favor of this because they like like I think celesa is a good example where people are like hey the inflation rate is way too high um we're paying way too much for security we think it should be lower um at this point in time and you know now you have like this you know like I would argue that most token holders small token holders are apathetic there's a lot of governance votes that go through on Cosmos and so you just get tired and you're like I can't freaking pay

attention to this like the validator is voting on my behalf and like you know I I got I got better things to do than think about like you know a 100 proposals a year um I may not even be informed on all of them so but but I think like my my General's take here is that like if felt like it feels like to me that we're at a point where there are some things that validators should vote on and there are some things that they should they should kind of keep off limits as far as like voting with their stake if they hold tokens themselves they should vote with those tokens right and if they but if they have a stake of other people's tokens maybe they should just maybe like and I think figment has done this I know for a fact like they're

kind of like I think there's some regulatory things that they're concerned with but like I also know that they're like yo some of these are just like not things we think we should be voting on and we're going to abstain from voting um and those things are typically like inflation things like finance things like should we spend on this like what should we use with the community pool for like this this is the token holders who should be voting on this like this is the future of like how this network is going to operate financially and like token holders should have a say in this and like we should kind of keep our opinions to ourselves to the extent that like we're not voting with our own tokens now if it comes to an upgrade right like I am not technical to the point where I can like look at an

upgrade and go yeah this is like this is the be's knes or like hey there's a bunch of problems in here my hope is that the validators are running this this client right like on testnet they have sense of whether it works or not and that they're like they're the technical experts and the domain experts here to actually make that decision and so they should vote on those right like if it's an upgrade validators you guys should vote right if it's like a financial like or like like economic like adjustment to like how tokenomics is going to work on the network this is for l1s of course um like operators like stay out of it essentially is like my my take it's like it's not your it's not yes running the network but like you don't get to I don't get to decide how much figment Capital pays me um and like

most employees don't get a chance to like tell you like hey this is how much I want to make and like and if if not like they can say like or I quit and fine like you can leave the network right but like you don't get a chance to go like this is what I want to pay myself and I vote for a raise like that's just not how the real world works and I don't think it should work here for l1s either I think you're getting to from my perspective one of the interesting reasons that man have prompted the salana ecosystem to put this vote at the Forefront on both social media and other things because at the end of the day this is a relatively controversial proposal uh and upgrade that's being voted on potentially by the beneficiaries of the proposal or the

people that are uh stent to lose from The Proposal itself and so I think that you know Mike was talking about how he didn't know that salana had this kind of like public token based voting in this capacity at least um I've never seen it as publicly advertised on Twitter and social media and I don't think that that's a coin incidence by virtue of what they were voting on um I think that at the end of the day a lot of the spectrum of voting is somewhat of a civil problem right like at the end of the day you're trying to have people who care provably about your community um make decisions with respect to the future of what this project is doing and like a naive civil resistance mechanism is like this person has a token they probably care about the future of this

thing if they vote badly or we upgrade something badly like those token are going to go down in value right and so if you look at the Spectrum of token based voter uh token based voting to validator voting I jokingly and my friend lass at Aztec calls uh validator voting just token voting with extra steps uh because at the end of the day you just have to take tokens put them in a smart contract and actually run a Docker container on some infrastructure that you're maintaining and all of a sudden you're like the separate thing that has apparently more vested interest in the outcome of the network and therefore you should probably have a stronger opinion about what those upgrades and what those changes are going to be because they'll impact you because you've done these extra steps uh you vested more into this network and to

what it's doing um so I think that that's like a a general Trend that we're seeing is um in like I I think you articulated this well is that like the more controversial or the more important an upgrade is to a network you're going to see potentially more uh extra steps let's say more ways to verify that you are qualified to have opinions on economics or technical details or long-term token distributions um the idea that you know every token holder is equally capable of making those decisions I think that we're going to quickly move out of that kind of era of of governance this episode is brought to you by namada namada is the shielded asset Hub rewarding you for protecting

the multi-chain shield your data across any asset and any chain and get shielding rewards for helping strengthen data protection for everyone to learn more follow the link in the desp description below today's episode is brought to you by Ledger the global leader in digital asset security celebrating 10 years of innovation Ledger is trusted by 7 million users secures 20% of the world's digital assets and Remains the most secure Hardware wallet for your crypto and logins follow the link in this episode's show notes to grab your Ledger today so let's start to slot this into some different models for governance RIT large here um and I think that you know I think a lot of governance has been centered around this idea of like decentralized decision- making in crypto

decentralized governance I I would really encourage people I don't know if anyone on this call has a very clear crisp definition of what that really means um but I would be I'd be very curious what people really mean by that statement in in my opinion governance should be suited towards how can we make the best decisions for this organization what is a system that we can use to come to the best decisions for what this organization is trying to do um and I would give you like this is where I kind of hate when Reason by example here but I want to slot l1s into like two different forms of governance that exist which is like corporate governance in the United States versus the government and how the government is set up in the United States um one of the commonalities here is that there's no

such thing as direct democracy right like no one there's no there's not onetoone voting uh as a US citizen you can vote for your representative uh same thing um like you as a Tesla shareholder get a voice but that doesn't mean that it's like onetoone voting on even major things like for the most part like usually someone else is voting on your behalf it's representative in that sense um however the job of government and the job of corporations are different the scale of what they're trying to do is different and so in the government in the US you have like different sets of stakeholders in checks and balances right you have an executive judicial legislative branch which slows things down which is actually in most cases not all a value prop um and so I think it makes sense maybe now to look at who are

the stakeholders within l1s and this is actually it differs a little bit based on the L1 where it is in its maturity um but you know in Bitcoin you had like the three sets of stakeholders here are the core devs the node operators and the miners all right like that's the really the you could also say I think it's uncomfortable to say this a little bit but like exchanges increasingly exchanges and I think they they probably have some sort of Voice or influence right you saw this actually that they directly had this during the um uh Bitcoin block size Wars back in the day um ethereum looks a little bit different from that there's the ethereum Foundation uh there are the core devs and then you kind of have the client teams are very big in terms of governance there but there's no like Labs entity right um and then in Salon

land it looks a little bit different you've got uh salana Labs you've also got Anza which is a spin-off of labs you probably increasingly are going to have fire dancer um goo but like some of the core infrastructure folks I get the sense like kind of have a seat at the governance table um also in proof of stake systems you're absolutely right like the token holders themselves or aggregate holders of those tokens have a voice in governance more um and Celestia to be honest not 100% it's a much smaller protocol today um but I would be curious like what do you guys think um what do you guys think the stakeholders are like the important stakeholders are that matter maybe we can zoom in here a little bit on the role of the foundation especially in the early stages of

developing a protocol like I just want to add one more thing to which is like something I like learned which was that salana Foundation suggests and like promotes like applications to run their own validator as well I just want to point that out because like it might might be a valuable like piece of the puzzle um as we as we talk about this yeah miles you want to Riff on that a little bit because that yeah I find that very interesting as well yeah definitely definitely um I think I think that's right Le at least they like um I don't know the landscape of stakeholders is correct I think another like you just talked about corporate governance and and you know the actual US Government I think it's also interesting to look at some of the biggest open- source

projects out there like Linux kubernetes um you know even like Mozilla and things like that they are for the most part either centrally like have a benevolent dictator or they have a couple committees right like the equivalent of validators for them is mainly like the big cloud Platforms in through which people actually use these these Services right and then you have apps on top and I think the difference with blockchains where things get really complicated it's like those are not they're not monetizing these open source projects right versus the governors of the token actually do want to make money um from the other underlying open source software essentially and I think the problem is yeah it's very very hard to

like properly have all of these stakeholders represented in the decision-making process especially the demand side of apps um and I think that yeah there's you could see a world where um you somehow allow apps to have like some sort of um maybe there's like a committee of apps right um that that are elected among like amongst each other and they have some sort of you know formalized voice in governance I think the more complicated you make it sometimes it just opens up yourself to even more attack vectors like we've seen when you give apps a lot of like governance in say like l2s they tend to just pay themselves incentives um so that's not

great either um but yeah I think for us in at Delta um I'm really excited about the idea of applications running their own validators and it's very very different um I guess the the system itself is very different than something like salana um and it might be a lot more lightweight but that might actually be the right answer right is how do you actually get that representation without making this like an overly complex system is just having apps run validators right and it's just I think pretty expensive but the salana foundation and other foundations can subsidize that with you know their treasury basically from a from a staking standpoint so that they have a an actual you know vote um yeah that might be

actually I I love that idea from toly and that's something that I think is going to be you know very very important for for Delta but I think it's kind of it's kind of challenging because a lot of app developers they just they just don't care they don't want to run a bunch of like devops right um they just want to build a great app well I think that that was one of the original kind of value propositions of blockchains right is that you get guaranteed immutable places to deploy code that has forever backwards compatibility right like the credible neutrality of these systems is inherent in the design and that means that like application developers are deploying things with the expectation that governance is never going to rug them essentially um and if that happens like that's going to be

really really controversial I think actually starting to see teases of this at the EF with eof in the ethereum object format where it actually does potentially break people's implementations or their smart contracts in some you know kind of unforeseen ways um and I think that that's going to be like a pretty controversial thing in the ethereum road map but um on the note of Foundations I think that you know the stakeholder roles have been interesting really historically because um you've seen teams use the foundation Labs kind of Dow Spit with respect to governance um as a form of like kind of legal guidance right like you want to have a sufficient decentralized ecosystem to the point that like there is no key single stakeholder that's responsible

for this network and you want to distribute that to like a minimal set of parties and like the minimal set of parties in a lot of cases is like the labs the foundation entity and a token holder based Dow um and so I think that we see a lot of this like the architecture of who's a state stolder in these networks uh is actually kind of an artifact of the lack of regulatory Clarity that we've seen in the industry rather than thinking from first principles like what is the right model to actually govern these networks um and I think that that's actually been like a large large disservice to uh the industry the people that are you know holding or interested in these tokens and assets and also the people running and building these networks uh you're in

this weird situation where like a lot of the labs teams actually don't want to go talk to the foundation or don't want to to the Dow because they're supposed to have this kind of like arms dist relationship between them and it makes it really really difficult for them to do their jobs effectively um when I was uh at hadera I used to work at hyera hashgraph which is kind of an Enterprise Focus layer one and one of the unique things about hadera is that the only people who can run validators are institutions who are on the hyera governing Council who technically co-own or operate the LLC which is a us-based entity and so they have this really weird vertical integration between validators operators customers and owners in a way that they actually are like the only people who can change or

Steward this network are the people that we want and it's actually a really really interesting model uh that they started doing in 2018 uh and we saw that be copied with like Libra in 2019 as this you know a follow-on announcement and I think that actually um kind of like that you know the time for Libra is now I think a lot of people are talking about this now but like I hope that we're moving out of this world where you have to have these multiple different entities uh when you actually can think from first principles what is the ideal governance of the thing that we're building and um long long way to say that like I don't think any of the current setups or stakeholder models are actually from first principles and like really thoughtfully designed I think that they're kind of

just like this hodg podge of what the lawyers told them to do and like what tools were available at the time and like what sounds good to the market and all these other things um and I hope that we see this kind of like return to First principles in a meaningful way yeah I couldn't agree more I mean Mike you said this for the very beginning of the Pod like what are we trying to do here we're just trying to make the best decisions for these organizations and if you maybe were in a a world now where you're not afraid of getting a Wells notice um and so you can actually come up with a system that is thinking about what is the you know maximizing the long-term potential of of the network um and the question is at what or like in what circumstances is

the right like is the right decision a decentralized process is that I think I think at this point salana might be so big that this sort of like Foundation devco Leed Shadow governance um you know they felt like this is actually you know it's becoming a problem we have too many diverse opinions here and let's say that they push something where it turns out they you know they were in the minority and it would have been voted down if there was a vote people will get more and more pissed off basically and they'll start to leave the network and so I think the strategy here is all is less so regulatory for salana potentially maybe it is maybe it's not um but more so like okay fine let's have

a vote we can't AR you can't argue with a vote like it's just objective right and whether or not the right people were voting that's a different conversation but I think that maybe that was that's the idea is when you to a certain size you know um you just want to make things a little bit less controversial and by doing so you might actually you know end up with more government noise um as we're seeing now so it's funny who's celebrating this versus you know folks that might be in Cosmos are like welcome to hell like you're now you have governance um so you know I think uh I tweeted totally as like welcome to the cosmo salana um welcome to Thunderdome maybe welcome to the

Thunder well there's a few things to that right like you mentioned the shadow governance and like look when you're subsidizing and your the foundation is giving out tokens and staking like interestingly enough and like to get you active on the network like interestingly enough you can pick up the phone and you go hey I need you to vote and I need you to vote Yes I we would love it if you would consider voting for X right and as you get bigger as you get more decentralized as you reduce those subsidies uh people start to not like remember like hey remember who got you here kid it's like that's not I'm here I'm I'm here now and like you're not subsidizing me you're not paying me to be part of the network I'm I'm an active

member and I have my own opinions right I'm like I'm out of the nest right and so like that's like part of the pain and the the process of of doing this um it's going to be it's going to be messy um the the the other thing I was going to say is that like you know I think as you get bigger these decisions and and let's say like I mean salana has had a tremendous like blowup like like a grow grow up glow up uh this cycle right like everything has been like kind of more like like you know ethereum's on like the let's think about this like let's like let's Ponder and pontificate and like eventually we'll make a change and the road map is five years long and that's when you'll see real change and then you have Shana that's like let's go

fast let's try things let's break things and if it breaks we'll just fix it right and I think maybe what you're seeing is that like as this network gets more and more valuable as it looks less and less like a beta Network um like there's going to be people who are making substantial amounts of money by running infrastructure or what have you and they're going to say like hey I know that everything has always been let's move fast you know and like let's fix things in prod like let's fix the plane in let's build the plane in midair but maybe it's a maybe we're starting to get to a point of maturation where like actually there needs to be more debate there needs to be a slight like there's have to be years out but like maybe maybe some people didn't feel like they had time or that it had been rushed in

some way and maybe more time for something this important should have been taken and and more conversation should have happened you know than than did I I'm not privy to those conversations so I don't know maybe there was a ton of conversations but something about it seemed rushed to someone for several people um because he didn't vote Yes on it NADA is the shielded asset Hub rewarding you to protect the multi-chain built to give you full control over sharing your personal information NADA brings data protection to existing assets applications and networks NADA ends the era of transparency by default enabling shielded transfers and shielded cross-chain actions to protect your data even when interacting with transparent chains namata also introduces a novel shielding rewards system by holding your assets in the shielded set you help

strengthen nada's data protection guarantees and collect n rewards in return to learn more about namada follow the link in the description below Ledger is the global leader in digital asset security trusted by 7 million users and securing 20% of the world's digital Assets in recent years Ledger has built a comprehensive ecosystem of products and services making digital ownership more secure and accessible for everyone Ledger's newest devices Ledger stacks and Ledger Flex introduced the world's first secure touchscreens making it easier and safer to manage your assets alongside Ledger stacks and Ledger Flex they have also launched The Ledger security key app offering a safer alternative to traditional password management follow the link in today's show notes to get started with Ledger

today one one actually interesting data point here by the way uh this is put together by the uh the latest blockworks research data uh chat here syo delic but this is a this is actually a chart of the who voted yes or no based on whether or not they're supported by the uh Salanda Foundation delegation program so you saw slightly more no votes on the sfdp validators which is interesting um especially if you think the salana foundation supported this uh the connection there being that uh they're probably smaller validators in general and the the economics by the way are challenging here of the the the number one cost for a salon of validator is votes so you have to vote on every block um and so uh there's you need a certain

amount of stake before you can even break even or become profitable so that's why the salana foundation subsidizes some of the smaller dubs until they can so I take back that first point that first point is sort of irrelevant here right but but still but in theory right in theory it's a vector right like over time um and so I think actually you know it it I want to Cooper get to your point because you me to really I love that point about just Dows in general and I would almost like to end there because I really think this is a moment in time everyone should be questioning sacred cows and being very honest with ourselves about what worked what hasn't worked over the course of the last 10 years and what might have changed what rules on the ground might have changed um so that we might not

need some of the structures that we thought we needed in the past but I I do think that some of this actually um you know Bears mentioning here that maybe the the point of when you're trying to decide the optimal governance structure I think you have to keep in mind what is the end state of what I'm trying to build here right and I think for for something like Bitcoin the fact that the governance is so aifi at this point that it almost can't do anything is actually quite good product governance Fit For What it's trying to be which is this store value app chain for money you you don't you don't need a whole like the the hurdle rate should be extremely high um when it comes to making changes there so governance is working quite well for some of these other l1s like ethereum or

salana they might need to deal with more complexity uh because they have an economy that's building on top of them and the tech changes extremely frequently so you might need a slightly different governance structure right and then you can actually look at something like I think a lot of the old like 2017 2018 ideas are going to get retried you could look at something like hidea hash graph be like hey maybe we actually want basically a PO away vertically integrated system here um this is going to be a more us-based operating system kind of private database uh thing right and maybe that's going to work for some people it really just depends on what is your ultimate end State and why do you think people are going to hold these l1s right like that would never work for Bitcoin where you're trying to be a

global non-sovereign you know store value digital gold um but you'll probably actually see different buckets of l1s become different things in the end state right that would be my that' be my guess I I actually totally agree with that and I think that ethereum and like the ethereum foundation is like a good example of this right like the EF had a pretty clear road map maybe two years ago that they wanted to aify after that and like oif has always been like the end game for ethereum and they want to get to a state where uh they're no longer needing to push through major changes like the merge or like implementing like veral or Bas or like you know adding ZK to the beam chain um you know I think that

uh ethereum as like you know the value proposition of like this is the world computer you can deploy programs to it that'll never be rugged you have guaranteed censorship resistance and mutability I actually think that their governance was actually really well aligned with the products that they've historically tried to build I think now in the rollup Centric road map and kind of like a lot of these I would say like tangential product directions whether you're talking about based rollups pre-confirmation native rollups and all these other things are actually kind of a departure from that original oif based vision of ethereum in a way um and so I think that the current EF structure with like two directors and you have etherealized now as like a us-based

entity um really is not you know to me and I've said this publicly on Twitter is not inspiring a huge amount of confidence and it's a departure from that oifc Vision that I really liked before you know I think if you asked me two years ago what are the odds that ethereum deploys a breaking change that bricks some people's smart contract I would say absolutely not if you ask me now what are the odds that they eventually deploy change that breaks people smart contracts I'd be like uh I don't know maybe they would do that eventually like people are strongly advocating for eof and all these other things um and I actually think that that's one of the biggest problems uh potentially with the theum right now is the lack of like I would say governance to you know product fit that you're talking about Mike is that like it's

just unclear uh one what the road map is it's unclear if the governance is set up to help achieve that road map in the right way and it's even unclear if that's the right road map for who they're building for um and I think that you can look at other ecosystems um that potentially have much better governance product fit I think the thing that is in like kind of you know flagging some alarms in all of our heads now and why we're talking about this on a podcast is because the salana move to token based voting or validator based voting is somewhat of a departure from what people have historically liked about salana right they enjoyed the benevolent dictatorship of uh know the core contributors the teams that we've talked about previously and so this is actually

kind of um a departure in a lot of ways from what I would say was the governance to you know product fit that salonus historically had and I think it's a little bit unclear about how this plays out medium to long term um yeah wait can Sor before you jump in there can I just read this tweet I thought this was super interesting from mert um so this was I think yesterday TBH even if this passes this is where they're just needed 0.1% more um to achieve the outcome of not passing but TB even if this passes and I'd encourage everyone to vote Yes I'd still consider it a failure either way the fact that this was this contentious shows that there's either great information asymmetry or greatly differing incentives the former is fixable the latter is serious again

disorganization does not equal decentralization now I think that uh you know part of part of the you know you as someone asked before like maybe this felt a little bit rushed and I think one of the things that salana has rested its Laurels on um you know deservedly so I think in many instances is like we it's more of the move fast and break things culture of Silicon Valley right like and there's been a lot of poking at ethereum again I think some pretty welld deserved that you know there's not a winning culture anymore we don't want to ship stuff and we're moving too slow Etc and part of that might be a cultural thing but part of it might just be a maturity thing as well um and so now the question I think that there probably part of the reason that this vote tried to move so

quickly is one salana is not used to having multiple different uh you know the the the amount of eyeballs and attention and money on it and it's not used to having this many stakeholders and so now there's probably a little bit of a hey this is what we're used to in terms of being able to push these things through but also we want to prove that we still have this culture and what they found um was that actually when you introduce more sets of stakeholders here maybe this is inevitable maybe this is actually isn't a cultural thing maybe more of this was just a stage and maturity thing than we all thought or gave it credit for right and so the the question at least that I ask myself is like this is the you know this is the cosmos got the end game exactly right

all the good and the bad right like is there just like this inevitable gravitational pull towards every lesson that we learned in Cosmos and and at this point is Cosmos just the Cassandra of of crypto because you know Cassandra being you know the profit in Troy who warned everyone and her curse was that she was always right no one would believe her it's like I can't tell you how many I can't tell you how many podcasts we done on bell curve about this stuff years in advance that just know it you know and all of this stuff is coming to pass it's very interesting right guys like Zaki on Twitter saying anat like careful what you wish for and he's like nah nope this is good and it's just very funny to me that all of this stuff has been pioneered in Cosmos and we're determined to run it all back I'm

unclear that the results will be very different apart from Cosmos who's now like hey guys all right we got skip in charge we're going to like actually listen to them and we're going to kind of get on the same page here and gonna do something um and yeah I think I've never I've worked on a lot of proposals I've never worked on one that somebody didn't say felt rushed like no we were talking about this [ __ ] for months um and we were you know debating in the forums and then like yeah I got on Twitter like as it gets closer to the vote and then people find out about it and get all up at Arms that they weren't paying attention right like that's why it's really hard when you like actually formalize these things and codify them and like it's it's all out in the open

and there's a there's a there's a you know a process here um that people can engage with but they feel like you know it's never going to be perfect right um and so yeah I do Wonder um it sounds like they're going to keep going the you know Cosmos Direction they're going for the next one they're going to have you know actual stakers be able to override the votes of their um validators and yeah we'll see how it plays out for him but it's kind of amusing uh from watching from the sidelines and and and like maybe I mean and so there's probably some very large I I mean the question would be right like I mean I think Sal salana has some very large holders or token holders right like I assume if those token

holders or VC funds or whomever are delegating to a validator they made their opinion pretty well known um I'm sure those validators depending on the size of the delegators like looked at that and said they're either like those validators are either losing customer today right or uh they're spinning up a wh listed validator like so that they can vote how they want to and make sure that their vote is like heard or they voted yes already right and like this is like again the problem with Cosmos right and like you're gonna tell the validators again to like hey pay attention and so what winds up happening is like voter apathy like if we're g to just keep pushing this through until like it gets voted yes then what the hell are we even

doing here like we may as well just like just do the benevolent dictator thing and just do it because like if it's going to be like this was the wrong answer um you know like we don't get to do the presidential election over again I'm sure many people last week given the prices were based on the timeline a lot of people were wishing they could have voted differently last week right so I think like um you know like I don't know I I think it's like if that's what you want to do and if that's the if that's not if that's where you are and that's like this is a pretty sounds like a pretty big change right and like maybe you're not there yet like maybe you need to start with some smaller governance proposals that like don't change things as much for the

people that have a self-interest in like making sure things stay exactly the same and like and shame Shing people online is like it's a strategy I don't know if it's a winning one I don't know if like you win favor by like going hey like I went through the list and like here's the [ __ ] here's the 14 like [ __ ] that like didn't vote for this like go UND delegate from them like I don't think that like I mean I mean it could change their vote most people are going to tell you to go f off and to like you know like dig your I'm gonna deal my dig my heels in even deep even deeper like there'll be like so there's something fundamentally and systematically wrong with this approach like we did vote on

this right and like I did vote no and now you're like shaming me and coming after me because like I voted no um it's not like a great welcome to Cosmos like this is Cosmos like right like this is not a great feeling and um the more you're talking about things like this like the more it's a distraction from like the ultimate like approach that we were talking about from the very beginning which was like we just want the network to be better um and that goes for like all of these networks it's just the problem is like people have different opinions on like what better is yeah I also think one thing that's interesting is that at the end of the day this is like a non forceable vote in a lot of ways like if the validators all change their client like the network is

going to change right and I think that that's like something that ethereum is at least honest about is like we could do token voting here but at the end of the day that's just social signal and what matters is people running code on machines that are securing the network and then we also socially agree that that is the network right and so I think that there's going to be something interesting here is like if salana you know decides that this is the right direction or uh maybe they talk to Barry and you know they realize that you know the cosmos uh dead end is going to go full circle for them as well uh it'll be interesting to see if they commit to this as a governance model or if they kind of pivot and ultimately opt out because at the end of the day I don't

believe and I I'm willing to be totally wrong here I don't believe that these are enforceable votes I don't think that they actually immediately change things on chain and I do believe that there's like Downstream social implications where like you can easily see a future where the vote passes by by token holders but the actual people running the code because it's hard to run Salon validators are like we're not going to run this code right and so uh I think that you know in the context of governance and especially with layer one governance at the end of the day it comes down to social consensus on what do the people that are running the code and what do enough of the ecosystem participants that Mike was talking about earlier actually believe is the canonical Network um and so I think that l1s have very interesting governance

properties compared to like let's say smart contract protocols or things that actually can have uh votes change the logic of what they're doing directly um so it kind of gives them like a weird like Escape pch in a way where they could you know circumvent their own governance processes or their Community can circumvent their own governance processes and I think that um I think that's one thing that I and many other people appreciate about the ethereum foundation and E governance is they're at least very honest about that right um so I yeah I think that that's something I admire Traders AI enthusiasts and deons listen up the game is changing and desk is leading the charge to celebrate their launch desk is running a trading campaign with three major highlights 38%

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notes to try Moro today I think that um you know in the same way that I think part of this depends there's probably going to be many different types of flavors of this uh play out um and I think it will depend on where like frankly like Bitcoin and maybe to a slightly lesser extent ethereum are slightly special here um in the sense that they were just born at a very different time in crypto's development and you know you don't see any modern you know L1 adopt that type of governance structure today and even even with the fullness of time I'm not sure if they would uh again I really come back to what is the vision of what you're trying to build here and trying to reverse engineer and work backwards from that I think a really interesting question Cooper is this idea of acific

in general and complete uh backwards compatibility and you know I it's it's a tough question because on the one hand I completely understand that right and I think this is the the US what they do very well is a governance you know uh you in terms of how the governance actually works sometimes is you're not going to get rugged right so like getting something passed through Congress or better yet enshrined in the Constitution right there are even levels to how difficult something is to unrug um you can BAS basically you know you can take that to the bank right and you know from a business planning standpoint that you're not going to get rugged over a certain period of time or something like that right which is actually kind of one of the problems by the way with all these executive orders getting pasted they're very easy to undo um you

know as opposed to moving things through Congress but uh and that and that's not the case in other countries like uh you know China or countries in the Middle East where you can kind of turn on a dime on the other hand you do need to like things do change right and at the end the day these aren't really government governments these are Tech platforms um and there is an argument to be made that if you can't adjust to the times somewhat right for really important things and maybe there should be a higher hurdle rate and threshold to adopting these things then you you do end up you do risk getting left behind right like that's the and so the challenge is like how do we you know as these l1s get larger and more you know hopefully you have a more diverse set of

stakeholders um you know how do you what is the hurdle rate for what different type of um upgrade I guess and and the problem is like that answer the answer to that question around like oifc versus you know improving the tech like ask the apps right they will have the correct answer because it's either I no don't change anything I know it's not as good as it could be but like don't change anything we have a lot of money held in these smart contracts and it' be a huge pain in the ass or it' be yeah our business is losing because this Tech platform is so shitty but we love you know the basically the culture of ethereum we don't want to leave please you know upgrade the L1 and it yeah it it is hard because there is no like

naive you know sort of like civil mechanism where you can filter through the voices at like the app level right um it could be anybody and the only answer I've seen that's like pretty decent is having them run a validator um and yeah I think hopefully we can see more of that but the moment miles I I agree with you but I also think you need you need a diver there's no like one set of stakeholder that always has the right answer like apps might have you know like you might end up asking apps and they're kind of okay with their own little fium right on ethereum right where they might actually not be thinking about what's best for the network they might be thinking about what's best for their applications and their own scaling uh you know or company building objectives here right like it

there is there's there is alignment between the demand side in apps and the network but they're not onetoone the exact same thing right like there are plenty of examples where those incentives actually diverge so I think I think that's one important set of voices in stakeholders to incorporate but I don't think you can always just ask them and they'll give you 100% the right answer in the long term right even like I mean there sort of was a governance proposal recently on ethereum right it was like the gas limit increase uh and like I mean if we just go back a year it was like it took a year for the gas limit to increase and like we had the EF saying no no no no no we can't do it we had like nether mind saying no no no no no we can't do it I

think it was NE mind and then we had like uh or maybe it was one of the other client uh teams and then we had like everyone else saying like no like you why haven't we been thinking about this like why haven't we been prioritizing this this seems like an easy win um so like who the heck is thinking about this like are the validators supposed to think about this is the foundation supposed to think about this like is it the apps are supposed to think about this like is it Max Resnik that is supposed to be thinking about this right like who the heck is supposed to like I don't I'm thankful he was thinking about it but I don't think he's the guy who was like should be like in charge of thinking about it um and he wasn't in charge of thinking about it he just kind

of like picked up the torch amongst like a bunch of like in the a bunch of anons and so like it was just sort of like then and then like I reached out to a few a few validators I was like hey what do you think about this and they were like well you know we're kind of like talking to like the the client teams and they think that they need more time to like test it and it turns out it was a big nothing burger and like it just worked like did we not just like try it on testnet and like see how it went and then like do it I don't know like like the process even there is broken right like there's and we don't have to like we don't have to dunk on the EF any more than we already do so like um it's just like it

yeah there's just like these these processes and like they're not even even that that process is like even if that even if the tech was codified or aifi right like can we increase the gas rate limit right can I mean I assume we can still do stuff like that if like the tech is better and the infrastructure is better um or maybe we can't I don't I don't know it it seems like there's just whose responsibility is it to do what and like who is supposed to be kind of the champion of certain things and like are there people who are champions that you should listen to because they have the technical expertise they've done their homework and they said this is the best and this is why this is the best like maybe it's better if like that proposal didn't come from multicoin maybe

multicoin is the right team to have that proposal come out right like no no shade either way like does it have more credibility that it comes from a venture fund or does it have less credibility when it comes from a venture fund does it have more credibility when it comes from a researcher does it have less credibility when it comes from a researcher like does it have more credibility when it comes from Anatoli and and Mer or ballic right and or Justin right like I mean I think there's like limit like there's kind of like there is a hierarchy and there are people who are going to listen to you about certain things and not listen to you about other things and like make sure that like the messenger is the person who's going to if this is something that like people think is like

very important to do I think the messenger does matter and like you have to kind of have that person really pushing hard for this thing or else like it falls short um because it's not the person who people want to hear from so well ju I agree with that in practice that's the case but I wonder if like here there's a question that I would pose to you guys at some point should it it has kind of surprised me actually that governments and black rock Etc have accepted Bitcoin here without full maybe they do really have a good understanding of how the governance model of Bitcoin works but you know there's kind of this there's a lot of like very magical thinking office cout like I hear a lot of people like

the math people like to talk about the math of Bitcoin and the code it's like no it's not it's they could change it any time right like if if you mustered enough people there's no math and code here like there's cryptography yeah but you know is like really obfuscatory like pretty dishonest uh speak in my opinion I think I think that's been like passed out as like Rel the Bitcoin religion um and I can't tell if some of the newer adopters like the Larry f of the world and his team at Black Rock have like really dug into what's underlying that 21 million uh Bitcoin promise I'm sure someone probably has but I'm I'm surprised that people haven't insisted on like here's how the governance process works here's who the like the US government right like no one's like hey it's all social consensus it's like

who's proposing is it Donald Trump or Biden like depending on who it comes from I'm no there's like it people can make right bills right and then it depends on the process and who it goes to and who's accountable for making the decision like right now it matters a great deal if it comes from tar or if it comes from Anatoli but it should matter less over time who the proposal is coming from as opposed to who is ultimately making the decision and that should kind of be written down and understood right this like rough social consensus I get at this point in time has made sense but I want to keep bringing it back like what is the the ultimate end state for these things and if you want this to be like a non-sovereign store of value or Bond like thing I'm just surprised

people haven't insisted on like writing this down and being like who is actually accountable for what um because like the rough it it just surprised me the institutional acceptance actually of like rough social consensus and none of this stuff being understood or maybe they are understanding it and dilc in it and I'm just not a part of it but that that would be like what do you guys think of that idea of I'm actually uh starting to write my first salana Improvement proposal in the background here I'm going to call it theine Max Resnik strategy uh we're just gonna delegate everything to Max and let him decide what happens um please vote Yes when it comes out I I appreciate that um on the subject of like Bitcoin governance I'm sure that they have a sufficient level of understanding on

what it takes to push changes to bitcoin core to actually get distributed out to enough people and I'm sure that they have a rough idea of longest chain based consensus um otherwise I think it's going to be like you know really hard probably for them to get such significant exposure and like I'm sure that that was part of like ETF diligence and all these other things um so I think that ultimately Bitcoin actually probably has one of the simplest governance structures um I think that the yeah someone should formally articulate it in a con concise in like canonical way I totally agree with that that would be very helpful and I think that um one thing that the industry is largely missing out on is like I think

Laura Shin's probably one of the closest to this is like historians who are you know kind of articulating and you know trying to catalog these pitfalls as we go like where is the canonical source of Truth for all of this Cosmo ification that we keep talking about like we all know that it's there but like how how do we point to it um is like a very interesting question I I I can't imagine a world uh where the 21 million Bitcoin changes and I do believe that you know we'll just get Bitcoin classic or Bitcoin Larry think version of it or something like that in the event that they really want to change something you have to like talk to the like the one historian that I know on ethereum is like that I like to talks with is James preswitch like the man knows like where

all the skeletons are be are are hidden right and like he'll tell you about the you know there's like there were supposed to be three protocols for ethereum right and like essentially now there's only one and like uh there supposed to be a messaging platform there supposed to be a few other things I forget what the other one was but like storage there's supposed to be storage messaging and then like the L1 and like that was going to be like the whole the whole kit and Kaboodle and then like ultimately like couldn't build the other two so like I think like talking to James is always like a pleasure because he'll just give me this information about things that are just like oh in 2017 like we were doing this this and this and in 2016 we were doing this and it's just this like you know but those

historians like that's like where's that written down nowhere like you have to go into Reddit you have to like read these like these articles there's this guy named um I think Ari who like like just rage rage quit the EF at some point and like he deleted all his Reddit posts and so you can't even go back all the way because like those aren't even available it's just like it's it's wild to piece together and um more people should probably read the cryptops as just to get a sense of what what it was like back then that's the best we have right now yeah I agree Mike I'm curious your take do you think that this notion of like social consensus longest chain based uh you know the Bitcoin model um is is like one I I'm curious do you think it's working for them um and then

two I'm curious do you think that they have governance to product Market fit as as you articulated the bit Bitcoin yeah specifically in bitcoin's context I do um I think the one thing that will be really interesting um over the course of the next uh decade or two is how governments end up adopting or not adopting crypto in general like I think that people have always thought of you know people love to say that blockchains coordinate people um but probably you know you've been thinking of people as the individual unit of who you're coordinating govern blockchain probably the end game is to coordinate governments like governments aren't going away um and they're going to use these things and it's unclear to me how

like there's a really great quote Austin Campbell you know who's a professor and he's doing his own stable coin thing at the moment uh you know he made this comment about the Strategic Bitcoin reserve and his thought was careful if you tell the government it's strategic they're going to start thinking about it in a strategic way um including moving mining operations in the US you know if there's a big mining operation in the Middle East maybe they don't like that maybe there's a drone strike you know like these are the things that governments will actually do um um and so yeah I'm actually just thinking about what I said before it's probably a little bit naive I'm sure that there is a deep understanding of how the governance process actually works here I would guess that there's a a pretty deep understanding when it comes to something

like a global money or something like that um and I think that for each of these l1s the reason I keep coming back to like what is the North Star here for each of these things um I do think you need some hurdle rate to adopt and change the tech if your if your vision of your L1 is it's a utility layer if like the value comes from utility it's a it's technology at the end of the day I think you need to be able to update it in some way there should be a hurdle rate for major adoptions um but I think you know it's kind of an interesting question at this moment in time to ask why are people going to hold any l1s like you know look at the eth BTC chart since it's it's not looking eth and eth BTC are both brutal looking charts at

the moment and uh I'm not picking on eth alone salana looks like it's about to run back the soul soul BTC is looking like it's going to you know um if BTC just front R so BTC and so I think you need to really ask yourself like why is anyone going to hold one of these L1 tokens um in this new world right uh and I also I you know I often hear people especially in ethereum say that ethereum the network can be successful without e the token going up and I I don't believe that um I don't think there's any there's no empirical evidence of a network working without its token going up uh to me those are those aren't the same thing and I think there's this story that we've told ourselves around moneyness um of an asset and maybe you

don't need fees for this asset maybe you can just like the tvl matters and it's a uses collateral you lock it up in a smart contract like I think if if I could ask everyone in crypto to question one sacred cow it would be that um I think that the only reason that anyone's going to hold l1's outside of uh Bitcoin is fees like yield on these things and so that's why I think the you know for me I'm looking at these l1s as uh there's probably three buckets here there's Bitcoin which is its own special snowflake that I don't think anyone's ever going to replicate there's a larger bucket of l1s like ethereum and salana which strive to be Global ethereum Salon Celestia they strive to be Global right they're not doled in any one they're non

Sovereign which is an important component right like No One Sovereign fully owns them um they should be deep in liquid and they should generate a strong yield they I I kind of think these are commodity like treasury things right they have the same relatively similar profile at maturity of a treasury which is why you might want to hold them and then eventually you might have more like countrys specific vertically integrated you know hidea hash crafts with the I think that's a really interesting model right but it's a different thing right that looks to me more just like a business right that just I don't think this looks like a new super new thing um and so I think you have to when you're thinking about what is my end State why are people going to hold my token what is the value proposition I think it uh for these

things that want to be non- Sovereign you do need some amount of decentralization you have to be geographically dispersed um you can't rug your users too often but you need a way to upgrade for major Tech uh things and then you need a way like the reason I think ethereum is waking up is because they're realizing I'm not going to generate any yield for my token and my l2s are actually adopting usdc faster than eth right so I need to make a change here right like I think this actually based in Native rollup stuff is quite healthy um it's like all right I I got to do something here people got to hold the eth token uh so I think that's anyway that's like the that's where I start from is what do I think it's going towards at the end State what's the value proposition of the token and the

ecosystem and then how should governance be designed for that it's like the way that I think about it yeah I think it's it's really interesting and I think if you historically think through why did we believe like you know in 2018 why did we fund a bunch of altel ones at really high valuations you know and I think that this has been a historical Trend and I think that like the implication has historically been that uh your network is predicated on some amount of Economic Security relative to the use cases that you want to attract right and so if you want to have an L1 that's issuing rwas you have to have a fully diluted market cap above a billion dollars or something arbitrary otherwise you're subject to like potential economic attacks that could actually like take over your network change your

state and basically modify the code and be like oh that those are my rwas now um I don't think that that is true in practice and I think that we're realizing that increasingly that Economic Security of most infrastructure uh is kind of a meme we have not seen any successful economic coordination attacks we haven't even seen any protocols actually get acquired or purchased right like in theory that is something that if your network was underpriced relative to the economic security of the values or like the products it's offering someone would have came in and bought your network and then took the value out of it and I think that this is actually directly related to like the the low float High fdv meta and you you had to buy L1 assets or or these assets because they

had to be sufficiently high enough in value to attract the use cases that they were trying to sell like no one wants to issue 10 billions of dollars on stable coins on a network that's secured by 100 million dollars in economic uh security and so I do think that that's like why a lot of people would hold L1 assets is because they believed this economic alignment argument and I I think that we're moving out of that in a lot of ways yeah and that's so unhealthy too because you have to you know basically launch with a with a really high valuation to uh as maybe like table Stakes to attract uh apps especially like high value apps as you said right but now you have a high valuation that you need you know token holders want justification for right so now you have

pressure to monetize just at the stage where you should just be optimizing for growth right and like we're seeing this you know in Celestia right now they're like yeah if we um you know we could 100x the uh the fees right now and guess what we'd make like we'd made 30 million bucks last year if we did that and it's like well no you wouldn't have because the reason there was that much you know usage is because you are optimizing for growth right now and that is the right thing to do and yet you know this is going to come up again and again um if you launch out a valuation of 15 billion and then blockworks research guys can put out charts and be like yeah they made 70 bucks yesterday and um you know that's bad look now everybody's like ah

yeah okay I say so what is the line of sight to justifying this valuation you have to provide it you have to provide it like and that's the um the you know just Cooper that that because I agree with you like there there were a lot of arguments again back in Cosmos in the day of like how are we going to secure you know all of these apps if like the value of the but the but the logic there is is to me to my mind it's backwards it's like there are all these apps that we want and therefore the base layer Security app needs to be here right like new investors aren't going to think like that they're not going to be like oh yeah I want to do all this stuff but like this needs to be here so I'm going to like no that no one the the

logic has to be what is the why are people going to hold my token and people get really uncomfortable with that if you ask people that they like kind of go wave their hand and say a bunch of stuff but it really I think for l1s it has to be yield it has to be yield or a return that you're getting on that asset um it's it's been yield and it's been like I think like for so the ethereum is money debate which like I think I presented something once right remember and I was like yeah like Ethan needs to go after money and like you we can talk about it and like and we can debate it and like maybe it's not the right approach But ultimately it's a medium of exchange and like in the early days like stable coins weren't as prominent as

they are right now right and so kind of to go back to like the ethereum can wi can can can exist and eth can go down like sure maybe for l2s because like they're focusing more on stable coin pairs than they are eth pairs but all of the assets that are and and so what are we doing like in centralized exchanges we trust and the value of like these tokens that are like paired with eth are are like the true price is like always going to be on a centralized exchange um because as far as I as I understand for most like OG tokens I assume if I looked at like a and I looked at maker and I looked at um uni token that like one of the biggest pairs if not the biggest

pair for these assets on chain is eth right like I assume and so like it was money back then maybe it's not money anymore but you know like I think if l2s start to go hey we want Stables we want Stables we want Stables we don't care about eth e eth is more of a collateral asset than it is a Bas pair okay maybe there's like an argument to be made that like ethereum can work like like people I guess will run a validator and like there might be Revenue that goes and is distributed to like the eth validators um and don't need eth the asset in order to like have functioning economies but we're moving towards like you know centralized stable coins um as like the base pair of everything um and like and

we're also kind of seeing that in salana right now right like when you look at the three largest meme coins and probably and I think also the fourth one assuming that Kanye does the Yeezy token does launch um which hope please on they're there like the pools are there there's just like 60 of them or something like that um so good luck guys figure out which one it is but like you know whether it's whether it's like Melania whether it's Trump whether it was Libra there's single-sided LP liquidity and like the base pair was usdc like these guys didn't want to mess around with soul well isn't that the demand that's the revealed preference right there was Revenue like there was

Revenue being generated right for the salana for the salana like validators and acers because like you had to pay and it was like the volume was I think like in the billions of dollars for like 24 hours but like but like the soul token like does it have to exist does like the ethere eth token have to exist in a world war stable coins are the base pair like uh yeah I thought it was I thought it was interesting this is like related uh I saw that the superch chain deactivated the feature to have custom gas tokens or like to have usdc yeah um and I do wonder what that if that was something that was um required in order for like interop to work for the super

chain like something purely technical or if that was like kind of some sort of social signaling here um you like we're not like those other rollups where the uh were the ones that are on your same team as ethereum um and yeah I just I wonder if that's actually a winning strategy if 99% of developers and users just want to pay for things in usdc or us any sort of USD I don't think that that was a technical constraint I think that the their team is so good if they wanted to build fee abstraction for multi-chain inter route they probably could figure it out okay um it's interesting because you know I I feel like I'm in this this category where like I totally agree with Mike's point

that you want to hold assets and you want to be part of an ecosystem that's going up there's no historical examples of networks that tokens have gone down only or continuously down only that have been successful like no one wants that but at the end of the day I hold eth and I like would consider myself like eth aligned in a lot of ways because I want to use the world computer right like at the end of the day I want to have access to the world computer and be able to use it and that is what eth is to me at least and then if there's a world where like let's say something else becomes the world computer uh whether that's like Delta or you know something else um I want to hold that asset right and I think that in order for the for that to

network to be like the canonical World computer to Mike's Point its token probably has to go up at least at some point it has to have viable economic activity and I think Jim articulated well that eth being down the cycle has been very detrimental to the broader eth economy both applications built on top of eth and also the rollups that are built on top of ethereum um they're directly correlated and so like if you want your network you want your world computer to be successful that means you want the application to be successful on top of you uh that means that you probably need an asset that is going to appreciate in value in some capacity or at least like have you know uh enough fluctuations and value that there's upside for people to participate in um yeah yeah I you know what I think um the

space just like everything else has been very influenced by Bitcoin and some of the early philosophical thought and so you know if I asked you guys like what makes a good what makes a good money you'd repeat probably some like Austrian Economist right like visibility storability fund right like all of this stuff that we've probably listened to on podcast in the early days of but the way that there is a lot of um you know very sophisticated and modern thought that goes into money and just like anything else when you dig into it right the the US has a difficult time even tracking what is money right like there's like m0o M1 M2 um no one really like the the range of different monetary assets has changed quite a bit right like if uh you know you have it used to be very pretty

simple it's just like uh uh you know Bank Reserves and uh you know local or domestic Bank deposits but now you got a bunch of stuff overseas you know you've got you got all of these different things and so uh you know there was a really influential interview that I listened to a couple of years ago with an ex- Central Banker um and if you listen to people who have worked at central banks or work at central banks they don't make a huge distinction in between like bonds like Sovereign bonds and money like Sovereign bonds equals money for in Big institutions right like no governments or central banks are like holding paper money right like they're holding Stak money they're holding they're holding Stak dollars or staked R&B or Stak Euros which is the bond

right and so I you know I I don't know there's a people really debate store value medium of exchange whatever whatever right like there there are lots of different types of monetary like assets that have a monetary quality to them um I would encourage everyone not to try to map one to one like is an L1 this or is it this like I just think you need a simple reason to own it to make the token price go up and like the the easy one that I think a lot of people will get to and what what excited people about the world computer vision in the first plac is you know Cooper to your point it's like all right I have direct access to this thing the other thing is it's just an index bet on whatever is getting built on this right like to me

as like a Glo it's like a investor it's like okay a lot of cool [ __ ] is being built on this layer oh and there's a token that kind of represents the whole thing and I get some sort of slice of the entire economy like give me that one right like that and and I think we've lost that vision and um and I also think that over time you know history is long right like if you read history books like they'll have like one sentence to describe a decade right I would guess that this period of time especially for ethereum is just like yep so this was the vision we're building towards it was the right Vision um you know but but there was a little bit of a struggle in the beginning when l2s first got created about what the the revenue split was right like that you

could sum the entire you could some like a Whole Decade long or five year long period up with that one sentence and I think it would be accurate and I I think that starting to return to that um I think we're starting to return to that basically current moment so yeah I I you know I'd be really excited about a world where ethereum uh is willing to acknowledge that there should be an enrin value capture mechanism between the LT and whether that looks like native rollups whether it looks like execution chards uh I think that the sooner they're willing to acknowledge that the better um absolutely all right fellas this has been a this has been a really good one we maybe you know maybe we could even do a part two on uh I wanted to talk to you guys about Dallas but we gotta we got to

wind down here but maybe we can do a part two just on uh you know the the uh dismantling of uh Dow governance here as a as a podcast but like we uh we we did a good one here on I focused on the L1 which is I think great next time next time we need a punching bag when there's not much news going on we'll we'll we'll do that episode all right cool um guys this was really fun uh Cooper thanks for coming on Miles gim uh appreciate you all and uh yeah we'll have to do it again sometime soon cheers guys thanks for having us see you guys see you guys