Do We Really Need Layer 3s? | Roundup

Transcript

the Twitter posting of either there's two types of Twitter posters today meme coins are going to revolutionize Society meme coins are you know the the new culture coin and they're the new they represent the new community in a digital first world and they're trying to basically play up what these mem coins are then there's the other side mem coins are the stupidest thing we're wasting brain power and energy and they're neither they're just something that people are trading and like stop [ __ ] pontificating on what these things are I'm sick of all these meme coin hot takes 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 devet is live and public testet comes out soon so make sure you join the monad community today at discord.gg monad m o n a dmad all right everyone what's going on

we got two uh tired souls coming in s what's happening man not much man just uh another day a lot to talk about a lot lot of big day today right uh the Wormhole air drop Wormhole air drop so I honestly have not not looked I'm kind of I'm kind of over these aird drops I'm a little uh M uh shout out to M he had a great tweet about he's like yeah being a maxi doesn't pay because I never bridged from ethereum to salana never used the bridge because I've always been salonin na it so I didn't get the air drop I'm like that checks out checks out Che out yeah so it's trading at a little 14 I feel like everyone everything's trading

in this Range 14 billion doll uh 14 billion slid a little bit since it launched um it launched at what one and a half it's down to 140 or no 130 it launched at went up to 150 slid to 140 total fully diluted valuations at4 billion a little bit it was trading in what is it AO secondary market like 20 17 it was between 17 and 20 so these things are fairly accurate um actually have become fairly accurate um which is pretty pretty good indicator actually so Athena also launched a an airdrop um yes they they launched their token this week

and it's trading at a $2 billion valuation what do what what do you think is the logic and the decision I think fly dud is much higher than that it'll be 12 no two billion is it okay on coin Geo it is uh hold on right oh no I'm looking I think maybe hallucinating I think I'm looking at the stable coin uh yeah yeah yeah I'm looking at the 16 billion FTV oh yes bananas it's bananas so it's higher than Wormhole that's wild yeah people are you people are chasing that yield uh we could unpack all that but listen folks uh just a word of advice here the when you see these

things just pay attention to fully diluted pay attention to unlock schedules there's good websites out there that will tell you when investors are unlocking you never want to you know just for a second there think about the relative value of something that is 17 billion don't get me wrong like you know things can go to much higher and irrational but you know I'm an early stage investor and I look at that and I'm I'm always cautious yeah I much rather let these next couple like whenever there's air drops I um I let kind of the market kind of like work its way through it for a couple weeks as people claim sell there's a lot of chaos

going on with the market makers so I for me I'd rather just kind of be on the sidelines yeah I mean you compare something like Athena 16 billion Wormhole 14 billion then you compare that to something like arbitrum right which is 14 half tra higher than arbitrum higher than Unis swap higher than a higher than MJ yeah so we got we got that we jumped we jumped right in you got the Hat on today is that uh freezing my room are we are with hat for a reason or I love you know I love hats someone out there needs to get me this goddamn pink

hat anome if you listen to this I know you have a guy send me that guy because I want it uh I just want it so this is the closest thing I'm like so I'm so over the I okay so I know wait a minute what what I'm so over the the Twitter the Twitter posting of either there's two types of Twitter posters today meme coins are going to revolutionize Society meme coins are you know the the new culture coin and they're the new they represent the new community in a digital first world and they're trying to basically play up what these meme coins are then there's the other side mem

coins are the stupidest thing we're wasting brain power and energy and they're neither they're just something that people are trading and like stop [ __ ] pontificating on what these things are I'm sick of all these meme coin hot takes um just the people TR yeah I've taken a more simplistic approach to not just meme coins but just stuff in general um ultimately marketer markets are the Arbiter of truth no one really cares what you think the market just rules and so people are finding look it's pretty interesting I shared this with you before the Pod uh binance has done more volume I think it was yesterday binance has done more volume

on whiff than on bitcoin no I'm not making any conclusions it's just an interesting data point uh coinbase I believe when it listed Bon it had multiple days where it just broke all kinds of records and you know I I'm a very Les Fair markets person you know I think people if people are against mcoins oftentimes like you get into these discussions right people like oh I I hate crypto or I Hate meme coins I'm like do you also hate Las Vegas do you also hate Sports spining uh

entertainment and they're like no no that's totally different I'm like is it and so that's always my line of defense uh historically I've tried to rationalize a lot of things and I just like to just flip it to something that is very closely related to what they're attacking because often times people just attack stuff that really contradicts uh another thing that they like and so that's where you corner them and you're like all right explain your flawed logic so I've done that and just saves a lot of time and energy yeah there's this interesting chart I saw Luke Martin post on Twitter which is and then I'm gonna I'm gonna allocate zero more time to this podcast to uh to these to these meme coins but there's this interesting point um that Luke Martin posted about state lotteries which is uh

lottery ticket sales are at a record high so if you look at if someone's listening the podcast not watching on YouTube uh this chart is up and to the right up only it just passed a hundred billion in state lottery tickets in 2023 uh you compare that to 2010 we were around it looks like we're around like 55 55 billion now it looks like we're about what is this chart 10 105 billion so that's you know we've doubled state lottery tickets and this is just I mean you see it on the subway I was on the New York subway today and there there's just advertisements everywhere to go buy lottery tickets uh yeah like lottery tickets like probabilistically the odds of you winning them are extremely low casinos too the house always has a

marginal Edge so if you continue to play in an infinite sequence you will lose all of your money oh you haven't been in a craft with me I I got the edge I got the edge the craft table you bet on red just just drop it no that's roulette that's roulette roulette yeah listen um this this how tells you how much I spend in a casino I I I live in a casino 24/7 365 five um I don't need to go to Vegas but the will the thing I'll say about meme coins that in this discussion I think it's a healthy discussion to have uh amongst uh just the community um uh and it also tells you a lot about the type of person right but one thing

that I will say in this discussion around airdrops and projects trading at fully deluded mem coins are kind of more simplistic versions of like you know projects I'm not saying that they have a road map they have utility no it just memes right but you don't have this like very low extremely low float High fdv Dynamic which has historically been quite hurtful or not hurtful but it's just um it's just it's just a thing right can you I hear a lot of people say that can you for people who maybe don't know that can you explain why that's hard not not all meme cins are created equal for the most part you look at like whiff you look at some other meme coins the entire supply has been distributed it's trading

constantly the inverse though what's the uh it's a commonly used phrase all right the market cap is this or but the you know the fdv is this that's a harmful Dynamic that has played out why is that harmful or problematic I'll take I I'll retract the harmful part because again it's difficult but markets are Market yeah exactly the the tricky part is when you a project take atha because we're talking about it or Wormhole they have a billion tokens totally like total tokens is going to be a billion they don't issue that all at once most projects don't do that they have't why because they have an emission

schedule they have certain tokenomics that you know like Bitcoin you're emitting these tokens based on whatever liquidity mining incentives certain other metrics right token is the the way you acquire customers the way you attract attention you do that over time right for Athena it's you you want to incentivize people to deposit and earn a yield the way they're capturing that yield in part is by these rewards that are emitted in the native token right and so they they're not going to issue that all at once so you have this Dynamic right where the project might be at best air drops like 5% initially maybe 10% maybe

20% but it's a as a percentage of the total total total token Supply it's quite low and so when you think about price Discovery it's going to take a lot of time for the market to really come to terms and usually for instance arbitrum arbitrum just had their first big unlock for investors last month so there was some selling it was trading at two dipped all the way to a$1 64 it's trading a145 ahead of that you saw some activity and even even with the price decline um you know there's a lot of noise there because the markets have been choppy whatever but on a market cap basis circulating market cap arbitrum actually even with a price decline uh it's actually trading at all-time high

market cap wise because there's just more tokens out in circulation general rule thumb more tokens in circulation Better Price Discovery low tokens low small percent of tokens in circulation um tricky price Discovery for the most part unless of course you can point to AO if there's a healthy secondary market like second lane or some of these Brokers right that they're facilitating transactions then you may have um a better approximation of how these things are trading but it it's um It's Tricky um I think like I'd much rather prefer uh you know seeing a project where you have uh much more percentage

of the total token Supply out in the wild trading hands actively or you just have a better sense of the true true value of that uh market cap of that project right yeah I agree with that um so yeah so we we had three we had three topics on the on the dock for today there's these like l2s L l3s then there's meme like just meme coin stuff that we just talked about and then there's air drops and I think if you try to basically the through line of all of these things is you're it's a fight for attention there's just a violent fight for attention right now if you're a builder and the like what what are airdrops if you if

you look at like where what aird drops are on your uh like as a line item basically on your p&l it's a marketing expense Mar marke expense if you look at me stock based compensation that to employees it's a way to get it's it's a marketing it's a marketing expense and a way to get uh or whatever you want to call it but it's a way to get attention meme coins what are they if you're a project uh like I saw DG's launching an L3 or something or another like I think actually you're going to see or um I think you could could say backpack um in Mad Lads like they launched as not mcoin but an nft nft uh and then and then they started building things on top of it

it's just a way to get attention l3s and l2s like why does a I actually want to have this bigger conversation about l3s and l2s but like at this point a lot of the technology is commoditized um why does someone choose to build on blast vers Bas versus binance smart chain versus arbitrum versus salana all the texts going to get Comm monetized it's user acquisition it's user acquisition intention and that's the game that everyone's fighting right now so maybe we can talk about um you want talk about l3s you sent me this message this week and you said um I don't have much of an opinion on l3s other than they are just not good so maybe I'd ask you to uh that's a

obviously a pithy telegram message but um i' I'd love for you to just like hear your take on l3s folks if you're going to DM Yano just remember he works for a media company and he's going to always uh W you didn't say you didn't say off the Record you didn't say off the Record actually me let me te let me I'll tea up the conversation on l3s actually first maybe which is that so uh there's a so the so there's the L1 which is ethereum obviously then all these l2s launch optimism arbitrum starkware things like that there was a post in September of 2022 by vitalic he said what kind of layer 3es make sense and I think this kind of woke a lot of people up to this idea that hey look eventually

there's going to be l3s and then maybe l4s and there's actually this um maybe I'll pull up this this diagram from this piece here let's see if I can um so for anyone who's watching on YouTube can see this so you've got the L1 right you've got ethereum right here then you've got Stark net then the L3 might be Stark X which is rollup or Stark a the idium app specific Stark net Stark net a different one privacy Stark net and then then you've got the l4s right so if you read this post back from the end of 2022 that that vitalic made he said the conclusion here is that kind of l3s are good for three things L2 is for scaling L3 is for customized functionability uh uh excuse me uh functionality for

example privacy right that's one thing L2 is for general purpose scaling L3 is for customized scaling and then the third bucket was L2 is for trustless scaling like rollups L3 is for weekly trusted uh scaling validium and now a year and a half later and you're starting to finally see these l3s come to the market right folks are building l3s I think D gen launched an L3 which originally started a mcoin launched an L3 on base um you're seeing arbitrum stylists you're seeing optimism you're seeing people build these l3s um I'd be curious to get your take on like yeah just what what you think of these l3s in general again I don't I'm not sophisticated on this topic I haven't

followed it other than it just gives me uh a mental uh I'm I'm s it's one of those topics that I have like tabs open that I want to I don't want to dive into because it's just I'm not very incentivized it just like it feels painful um I'm I'll PL it over to you because I think you may have a more formed opinion here like for instance our term style is why what you're saying and correct me if I'm wrong here is you know if people want to use generalized arbitrum Tech and layer on a a layer on something uh more specific as vitalic is saying you like why can't you do that as a L2 the same with the Bas is

using the op stack as an L2 why do you need to like what's the rational for an L3 or is like it's sort of unclear to me here here's my thesis on what's Happening is everyone's basically saying I want the security from ethereum so I'm going to use the L1 for security I'm going to use the L2 for scalability and then I'm going to use the L3 for control and I think that that's kind of the narrative and that's what's playing out if you talk to some some folks who are doing this I think really what's what you're going to see is uh you're going to see a lot of experimentation at the L3 level uh or L3 layer and then you're going to see a lot of like again I really think this L2 Tech will ultimately be commoditized I don't know if arbitrum winning or optimism's

winning or polygon's winning or scroll like it's all GNA be commoditized in my mind and the only two reasons that like someone will pick something is the brand and the user acquisition that comes from from building on it so maybe blast is for more D yeah go ahead blast is an L2 uh Bas as we think of it today is described as an L2 you can Bridge directly from an L1 to Bas maybe that's like the simple definition of an L2 bridging from an L1 to an L2 so Bas is but Bas is uh a fork or using the op stack optimism is also an L2 base optimism there's some deal there

where optimism believe like uh granted a lot of the tokens to coinbase who then decided in their RFP assessing which L2 Tech to use whether arbitrum or optimism stack they decided to use optimism and there's it was heavily incentivized it's my understanding they're an L2 though Bas is an L2 uh could Bas be like in that decision tree of coinbase thinking that they're going to build something in ethereum say that there's the next coinbase another exchange they want to go through the same decision-making process as coinbase did are they going to build an L2 or an L3 like why would

you build an L3 where you can build an L2 using the stack of arbitr or optimism like that's where I'm like why you stacking and have more dependencies in an L2 where you can just have the direct line of into an L1 it just seems like there's going to be more friction introduced if you have to make unless again this is where I'm dumb on this and I'm not familiar if you can hop directly from an L1 to an L3 okay maybe but it just feels unnecessary yeah you got two two two dumb L3 guys here so we're um we're let's ptif let's pontificate for a second just knowing that neither of us are de deep in this right now I think the word the the key word here is

bridge I think when I think about like an L here's the V if I'm an L2 here's my vision I'm trying to get as many folks to uh basically to to basically build these l3s on top of me and I think the an L3 in a sense is like it is cheaper than running cheaper and maybe more secure than running all of these Bridges right so it's maybe better to then deploy like the L2 essentially just becomes a bridge like an L I think the L2 in this sense like let's use arbitrum let's use actual things let's say there's ethereum for security then all these l3s want to then all these like apps all these applications want to get

built and then if you believe in the app chain the you say okay well then all these apps are going to build their own chains yeah man but like I get it but like if you're like steep in for instance or a game Fork the Opie stack and build your L2 heck why even stop there build your own L1 that's G to happen too so it just feels like if you go back to the when ethereum got started there was The ethereum Killers the incentive for Developers to build their own chain was Superior to build on ethereum because they can launch their own L1 they can have more autonomy and they could capture way more

value look at all the professor coins Thunder chain and Avalanche and like the incentive for a developer was very strong to build an L1 if we believe that to be true even in today's environment why again the question is and I'm not sophisticated I'm just posing the question why would a project that is worth their salt that has a good prod project product that has that is capturing attention why would they build an L3 why not build an L2 directly it seems like an L3 just introducing more lockin dependency to one particular L2 when the current state of L2 to l2s and l2s to l1s is very fragmented we're not there yet we're bridging easily is becoming it's become

a challenge the cost point of an L3 I think is is a mute one because you can use modularity again to to use Celestia or like so so like it's not I don't buy this argument that an L3 is cheaper I also don't buy the argument that an L3 like why would you lock yourself into a particular ecosystem like optimism or arbitrum okay maybe you believe that Bridges across l2s is going to be great uh it just this is goes back to the heart of you want to ask me why I've lost conviction lost interest in ethereum even though mind you I've invested in a lot of l2s because I want I have a very strong incentive for ethereum scal to run out of work I just

don't think it's as elegant from a what matters most here is from a user's perspective I don't think it's as elegant as clean as uh integrated chain like Solana or Aptos or some of the other ones just not maybe on the other part of my brain says you're being too critical over time the tech will be commoditized in abstracted away where it's just going to be very easy to work your way around these chains so this argument doesn't kind of really matter if the tech is really good you can hop around and someone's going to figure that out for you but we're in a state where we have to think about this so I'll go back to

my main question that I hope someone can answer out there if you're a listener please jump in into the discussion if you're a really good Builder a project an application why would you build your L3 and be sub and have to me sounds like more dependencies and lock in whereas you can build your own L2 like base did using the op stch or heck even build your own l l here's the thesis which is that if you go Fork the op stack you're then trying to create your own ecosystem of liquidity over here but if you just go build on arbitrum or you go build on top of optim let's say become an L3 on top of optimism you now have like interconnectedness of liquidity with everything else on optimism but if you

Fork I think so right what is the distinction between the interconnectedness horizontally versus vertically I I I really being vertical versus not horizontally like I mean if you for like let's say you Fork let's say you build on the what what's op's thing o op super chain or whatever it's called like and you go build your own L2 you now are not I'm again I really don't know um but I think you're not connected to like the you're kind of fragmenting the liquidity there whereas if you build an L3 on top of optimism maybe it's that you get the you get interconnectedness with everyone building on optimis I'm out of my depths here's a here's a here's a here's cynical take on this is that um l3s are

only exist because l2s don't know what their business model is and l2s need basically L l3s are a marketing thing created by the l2s because they didn't have a good business model and they needed more value acral to the L2 and so if you look at like why l3s maybe exist maybe it's a marketing thing that the l2s have kind of pushed on to crypto Twitter and and the industry to drive more value landing on the L2 instead of on the on on the L1 and that is a really App instead of the L2 like if you're what you're saying is

like if you're a good app mind you in Bas there's a lot of apps arbitrum def ecosystems and all of them uh is like a per protocol going to build their own L3 I just like I don't see it what is the impact okay let's say all these l3s I can't wait for just us to get shredded on Twitter and YouTube from this conversation but I'd love to be shredded because yeah I'm just why I'm only POS I'm only posing questions yeah yeah let me um again I'm just going to try to play the cynical person here if all let's say fast forward let's say all these l3s actually take off more and more of and more and more of the fees on ethereum wait I'm trying to think this

out ethereum is gonna start earning less and less and less fees and if it's earning less and less and less fees and the fees are kind of like land I'm gonna making up this word like landing on the L2 instead of Landing back at the L1 perhaps the value of eth drops and then it kind of It kind of creates this really negative feedback loop where like maybe people start to get spooked the validators no longer willing to hold eth and they're no longer willing to secure the network and you lose this idea of like oh maybe the ethereum security is not the end all be all so I think while these l3s are maybe a good idea for the l2s in the short run uh long long term it uh I think it's easy to be cynical on it I think it's an excellent point at

what point I think that time and time again we hear this like users in liquidity is where is on ethereum evm I get it today is true you're not building for state of the world today you're building for state of the future if you're a really good product which we haven't really seen you're going to attract a lot of users in liquidity directly to your app you control that you control that user why not go build your own L1 we're like talking about like micro usage right now the grand scheme of things the only reason we're all here is because we believe that this actually becomes like a in incredible extension of the internet we haven't really seen that yet but somehow we're like caught

into these debates of scalability and saying that ethereum is like the winner or like the the dominant change certainly it's starting to be like contested very easily in terms of usage in terms of fees salana for instance has had uh multiple days now where the fees there um has been higher than ethereum so your question is a really good one which is where does if if an L3 and L4 and L5 and L27 whatever uh at what point does if the value capture sits on the L2 or higher up the stack uh at what point does it is it just economically and more importantly like the security starts to kind of fall

apart and you'd rather build your own L1 because you become like the value is air so you just you just drop into an L1 right um my my simple thesis for something like is that like and M credit to M because he actually was the first one to come up with this he said like the scalability trilemma which we've always go back to it says you know security decentralization what is it security decentralization and um skillability I believe one of those things I think it's those three um and you can like you know do some tradeoffs around the Continuum but it's like I simplistically today the way I think about it is the most secure

chain would be the one that has the most killer products because that attracts that creates more fees assuming that the fee captures worked out not every chain is figured out by the way no chain is perfect in terms of Fe markets they're all kind of trying to like optimize it ethereum has done it with the FP 15559 which I think is really novel I think Sal will have to do that it's figuring that out other chains will probably have to do that as well but like if you it's not a bad problem to have like if you have a lot of demand and usage then that creates a robust fee market right that creates more security because the validators are you incentivize validators naturally to come to your chain earn fees and then that that but it starts begins and ends with you have to have killer applications you

have to have performance and that means user experience today is far superior in Salona I think base is not bad like these l2s are not bad I don't want to come across as negatively critical of of of to but I just think that the integrated design today is more elegant and more clean for the user they supposed to having to bridge across Cosmos has this problem too not just ethereum um and so uh I just think I think users naturally always gravitate to where the easiest they don't have to think about this stuff right maybe in six you know six months or a year like this connectivity across L2 is L3 is L27 like is like totally

abstracted away it's super clean then that I will I'll revisit my thesis but in let me ask you a question would you agree or disagree that it's just a cleaner experience in Solana you don't like you don't have to think about bridging across base and arbitrum and I I think so I think so right now but like uh salana is one cycle behind eth and ultimately there's going to have to be salana l2s like if you talk to a lot of the if you you don't think so we had this discussion in London I think uh the drip uh was it vu or whatever viu yeah viu and the tensor like I think there's been discussion around it I tweeted about it I think that thread has really good

healthy debate so we should link l I didn't see that right yeah yeah I tweeted about it right after D um I don't think it solves ultimately much maybe for drip but I I came away after reading all the comments Austin princess commented in there I thought that was one of the best responses there so if we can pull it up or just link to it but I agree with his take which is they're not solving the current issue and bottleneck constraints at salana has right now when I say bottleneck sort of like the the fees um um so anyways um the value a tar multicom guys like again come out and I actually do

agree with their take and they've been saying it for years you value an L1 based on the Meb capture um me capture in Sol is going to continue to be actually more and more interesting and robust you're already seeing that witho uh in in ethereum um uh where's the MB going to be captured like sequencers centralized sequencers actually capturing a lot um so yeah I think the you value an L1 based on the based on all the M capture I think that's trying to uh I disagree with that I think that's trying to put some like um trafi framework basically

of like valuation on top of an L1 like how do eth eth or Soul or whatever like they're they're valued the same way that you value like grain or gold or oil they're just commod they're just Commodities like soul is just a commodity so any any like eth is at least in my mind it's just a commodity so any like if you look at how people you know people don't talk about um you know soybeans or whatever like they're not or or oil they're not like oh look at the p&l of oil today they're like oh there's a supply shock happening to oil today OPEC cut this thing or there's a some something

happened like oil markets forance there is Nuance where the valy capture happens EMP like like expiration has been really challenged most like a lot of people go bankrupt there you have to be really right but like the refinery process the refinement of crude into like higher like you know that's where most of the value is captured so you think holistically of the oil markets not just oil itself is what I'm saying like the whole ecosystem like the whole energy like oil and gas industry and think about like where's value being created like where's the highest margin stuff anyways it's it's like a loose analogy I don't want to go into it um but yeah uh yeah I don't know I I'll just go back to I would love to better

understand and hopefully someone can jump in here and and just make the case of the the need for an L3 in the context of Base use the op stack built their own L2 and can someone also just tell me why base at some point won't even launch their own L1 yeah we have I want to get um Steven from arbitrum take on this they have U arbitrum I think it's stylus I think I think and the reason I want to pick on him is I think they have the most the mo uh the most Capital deployed on arbitrum right now I'm pretty sure in the most number of uh apps that have built on

arbitrum I'm pretty sure about that um in terms of like all the folks who have their like kind of La go launching L3 platforms um so let me so maybe we can do like Stephen and someone else as well hey everyone wanted to give a big shout out to today's sponsor Wormhole Foundation stewards of the the Wormhole protocol if you are like Santi and I and you play around on chain you know how bad 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 for you the Empire listener this opens up a huge number of multi-chain use

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thank you Wormhole Foundation is dropping exclusive nfts that's right we got some exclusive nfts for Empire listeners hit the link in the description to claim your unique Wormhole nft today this episode is brought to you by monad mad's thesis is simple the evm is here to stay similar to JavaScript and web 2 but unfortunately today's evm rels the high performance and the scalability that developers need to make certain applications possible monad addresses these concerns in these bottlenecks while preserving seamless evm composability for application developers there's a seamless transition to monad as the ethereum RPC API allows for really easy portability and for

developers monad can support 10,000 real transactions per second with their unique parallel execution environment and of course there's full compatibility with evm bye mad's internal devet is live public test net comes out soon you can join mad's journey in two ways one go follow them they're on Twitter monad m o n a dxyz and also join the monad Discord it's discord.gg monad big thanks to monad for sponsoring Empire the the the last thing I'd say on this topic is like I noticed that uh there was this there's a lot of hate around blast there's the the munchables hack and I think 6 or 63 million hack

and people were like do you let the hack happen or do you roll back the chain and then people were commenting saying look if blast rolls back the chain you'll see how centralized it really is so they can't do that and I would just remind people the difference between blast and Bas and binance smart chain is Slim to nothing uh it is it is brand it is brand and uh you don't have to take my it's not my take for that I think that Folks at L2 beat do a really good job of that there's um for again for anyone watching on YouTube you can you can see it right here but like you look at base they so L2 beat has these different stages um and then different risks right so this is base they've got three out of five

are red two out of five are green same with blast stage zero items missing for stage one they've got three X's proof system still under development no user withdrawals can be censored by The permissioned Operators no or yes upgrades executed by actors etc etc yes so exact same thing these there's there's no difference between these two so um yeah I just I would just remind o op as well um so as actually l2b lays it out the only folks who have moved into stage one uh it's arbitrum dydx and ZK Sync here so everyone else biggest distinction there are FR

proofs yeah anyways I I think um yeah I look uh at some point uh you know Blast has been anat had a good tweet this this week about um you know the the criticisms of salana being higher Hardware requirements more centralized and the fact that they've always been very exposit about that and upfront whereas his criticism was exactly this a theory and sort of they haven't been upfront about this about the l2s and how you know they don't have fraud proofs if an L2 doesn't have a fraud proof it is you're at risk you're

beholden to them they have fraud proofs but they have a centralized sequencer the sequencer is is is largely Irrelevant for security just more value capture to a particular party it's a centralized But ultimately you can always revert back to the L1 you don't risk that you don't have a fraud proof you yeah it's no different than multisig in terms of the actual impact implication for the user and look at I get it blast is in development they're moving at pretty fast pace um and yeah in the road map you have to build frog PRS optimism has been around for what the longest where are the Frog GRS I I will

I will constantly like I you know I won't get tired of saying it I someone said that like they they built it they they've been like in development or some early form I'm like it's been a couple years I know it's difficult but it's been a couple years like like yeah it's concerning right yeah I mean not to just throw shade on one particular it's just as a matter of principle like just fraud proofs are essential otherwise it's multisig like if you're up front about being multi and at least like it's better to be very up front I'm let me ask you a question if you were to survey all the users that have deployed into optimism would you would you think that they like if you ask them about prop

Roots do you think that they would understand that do you think they'd understand that it's the implication dude I don't I don't think they care I don't what but if you compare the percentage you ask the same question like what percentage of people that are deploying in a blast would appreciate that it's a multi probably higher yeah yeah look there's a lot of C in the launch they rephrase it they came out of it look it's not perfect but you want to see that and was I'm not like just defending my my bags you talked about how blast is being like uh you know blasted uh and put on like the you know pitch works and whatever but like you know it's they've been upfront about the fact that it's a

multi whereas like I get it at some point at some point if they're if they if if Blast has a chance to be successful fraud proofs are essential essential yeah greed I mean look there's it's it's what I'm I we're we're agreeing right I'm just like the decentralization narrative that most you know most of the l2s promote is I mean it's a at this point in time it's not true right A lot of them are just highly centralized and you know some of the biggest ones haven't implemented fraud proofs and yeah yeah we're agree and look I don't want to be cynical I'm just being um I'm just laying out I understand that there's development to work fra to defend them they I think

they did Implement fraud proofs on testet recently I believe so yes that's correct that's what I I verified this so I've been told this by multiple people especially at D so maybe speaking out of turn now but I just generally think that I appreciate these things are hard to build they take time um and I know there's a team there's teams that are devot to figuring this stuff out I don't want to imply that there's not it's just but the reality is just let's just call it Spade to Spade that's my that's the point that I'm making that people have a way to focus too much on criticising other

projects whether it's mem coins whether it's an e killer whether it's whatever like Focus as a matter of principle Focus Less on criticizing others and just internalize do introspection and figure out what you need to work on yourself that applies to l2s and everything else in life like you know like just don't throw stones if you have sinned like that story whatever the Bible I'm not religious at all but you know you I mean like yeah let's pivot we need let's for sure echo. XYZ KOB K's project yeah um you guys had a nice little thing what what's your what's your uh company project what are we calling it uh bid

Club I'm also an echo all right are they are they similar different so all right so all right so they're different so bid Club okay so um I'll I'll do your shill for you which is um there's something on Twitter today it said uh announcing bid club's founding members bid Club is a membership based investment idea sharing platform for longer form Theses around publicly listed cryptocurrencies now in close beta looking for our next cohort of members bid club's founding members uh Arthur from Defiance Jason choy Alie Felman James uh uh and Vincent from modular cap great guys Jason Cam Andrew Kang uh Kyle Sani Santi Daryl U zerox swaran and uh the last guy who I don't

know tanai tanai um so those are so that's so that's bid Club then Kobe also announced something uh fairly recently which is echo. XYZ I think the best way to describe it is Maybe like uh crypto a crypto only like Angel investment platform or maybe like a crypto crypto only angel list maybe is the right way to describe it but what are what are your thought I a I'd love to hear the thesis for bid Club um and then B I'd love to hear like just your thoughts on on uh on Echo yeah so I'm involved in both both disclosure uh I think both serve a clear purpose and they're quite different you your framework is I think correct uh

eeko is uh early stage like an angel list investing startups there are clubs or I guess groups uh certain personalities and have a group I sort of missed de line because I was too kind of lazy or tied up to connect my Twitter account and all this stuff but anyways uh there's some good syndicates that you can apply to and join Larry um from the blog you have anom um you have Casey you have multiple people uh will price just a bunch of people that I guess are known are good have a good reputation being early stage investors that have had these groups and syndicates so I think of it as Angel list uh bid Club is uh differentiates in two two forms one

it's more of a a a discussion debate platform like idea sharing not so much like actionable like it's not like you're going to send money and fund directly on the platform it's just meant to be like a place where you can curate and discussion and um there's analogies to these is like public markets right like I forget the platform Jason knows it's like stock tweets or whatever like there there's platforms where people share uh even conferences where people go to and there's like catch fund managers that talk about like pitch public ideas and then they that it's a healthy debate so I think about like big Club as a a uh more of a debate club and skewing exclusively to liquid like projects that have launched so a lot of

what you'll see there now is you know there's a there's a post about the thesis for wh you know uh there's a thesis for salana there's a thesis for uh you name it but it's only liquid tokens so they're quite different in that sense so on Ekko do you like you can follow different what what's the problem that Ekko is trying to solve it's that a lot of the Angel deals right now are very private and yeah it's trying to democratize access to early stage investing funny in a way icos they really were the fairest option here kind of yeah yeah like iOS with a certain modifications I think would be

the purest expression of um just opening up aess I think you have you know tweaks and saying like in terms of just um standardizing disclosures and you know but yeah I I don't disagree with that at all actually Kane and other people have been kind vocal about like revisiting the idea of an Ico yeah what's your vision for bid club like how involved are you sorry just one one point which ties into the discussion we're talking about like fully uded versus circulating like icos had more of the tokens circulating out of the gate Better Price discover yeah so anyways um yeah you hear these criticisms time and time again like uh

you know retail quote unquote not institution investors can't invest in in these projects because they have maybe not fall under the accreditation or even if they're not in the accreditation they're not like invited to invest in these rounds and so yeah I think Kobe's sort of taken that stance and wants to take a crack at it which is um yeah why I'm excited about you know exploring that the thesis for bit uh big club I'm excited because I've for a while now have found public markets more intellectually engaging and fun than early stage even though I still do a lot of early stage I've most of now I'm thinking about my like public opportunities like liquid

tokens and I just think that it's uh it's I never thought I'd be like a quote unquote HED fund guy my background my training has been in Venture crypto's both obviously but uh I think a lot of opportunities are in the in the public markets uh like liquid token I think it's an area that on a relative basis is probably underlooked by institutions you know there's some guys like the Modio guys reflexive um multi coins does some of the like some funds like have the a liquid strategy attached to them but I think in the grand scheme of things there's way too much emphasis uh from from investors institutional investors in the space in early stage opportunities not so much in public markets and I think there's incredible

amount of opportunities there um that you know retail has access to so yeah you know the nice thing there's like that joke right that the VC lives the best life he gets to invest and wait 10 years to be proven correct or Not In traditional Venture crypto is earlier right because you might have invested in Wormhole or Athena six months ago now you have a token so the market you know then and there you you know I guess it's it's it's much faster but um you know I think public markets are really cool and more intellectually stimulating at least for me because you know it's a bit more daunting I guess you invest in something it goes down like 60% 70% overnight like when I first

invested in whiff I think like it went down like 60% like woke up and I was like okay yeah this is definitely a volatile thing um I was on this podcast being you know when it first hit a dollar when it first hit two right I was you could see me worked up like what should I do right it's already up a lot like how should I manage that and instead of running away from that historically I had run away from that because I now pay more attention to that and I think it's like even this experiment with trading mem coins I funded like some random wallets like just as experiments they're no longer small experiments but that process I think has allowed me to like just develop another muscle as an investor

that I I it's it's less developed in Venture and I quite like that I've really enjoyed that experience um and I think it will help serve me well even for early stage investing but also just to apply it like I have now a more growing desire to spend more and more time in liquids because I'm now just really really convinced it's very overlooked that's where I want to spend most of my like said differently if I would start a fund today like raise money I would spend more than 50% of my time on liquid but how much because it's way it's way more scalable strategy like you could raise a billion dollars today and deploying liquid paradigm's now trying to raise 850 how much of that's going to go into privates

like that's just not going to bode well for all but how much of that is a a f a factor of where we're at in the cycle right like the Venture deals have gotten now pretty ridiculous like true true true like they they will certainly be able to deploy at 50 maybe across two cycles like multicoin today just announc like invested over $200 million in Wormhole yeah you do four those deals you wouldn't right from a concentration standpoint but you're right that you're starting to see now more more the 200 the five we're going to see a billion dollar raise right so I just think that historically a lot of that Capital has flown into privates that have a long duration they carry a lot of risks whether you want to think about them or not whereas public I think is way more

scalable and more actionable like you can deploy over multiple billions of dollars into something like saana on a risk- adjusted basis is it going to outperform most stuff probably none of this financial just like as an example pathetical uh or some of the large like the top 50 tokens by market cop like they're over a billion dollars right you can buy 5% of that token Supply fairly easily and and you know run a fairly concentrated book and all liquid you know you don't have Redemption necessarily risk or as much you can be more tactical yeah maybe no one will give me money because they're like no most of

your successful has been an early stage which is prly true but yeah know I I really I really think it's an area that is overlooked so when I met the modular guys when I met Jason how involved I am in big club I'm a Jason came to me I think it was the first for second person he came to and then we selected some of the other members in there uh but we were very thoughtful around the people that are in there are typically guys that you know are have their own are fund managers and they they are vocal and invest in liquid stuff that was like right here there was a lot of other people that could have fit that bill but they were just not active in the public markets and so liquid markets I'd say and so they were just they're just not

uh meant for the platform so what we envision doing this is like token 2049 in Dubai is a little too close but like some sometime like it maybe permissionless or maybe some of these conferences where you have a Sone type Sone conference is really cool like you have some of the best investors like stand or Giller go and they pitch their ideas there's private dinners that hedphone managers do and like they kind of they they have to come with an idea and they can be picked apart right so that's I like de I like that type of debate um and so I envisioned bit Club taking that type of form like online platform for very high caliber discussion on ideas more curated more sophisticated than crypto Twitter um and and then an component of

iners which you guys are experts on we've talked about this right you know layering it as a side event in some of your conferences um would be pretty cool have you know local clubs where people can go to and learn about this stuff and you know debate and a big part of this and where I've spent a lot of time with Jason is the disclosure component like I'm always very uneasy I think we don't get as many views as some other podcast in crypto because we're not here telling you we're not talking about prices as much we've been spending 30 minutes on l3s I mean people are already snoozing at that point right they want an they want I need to buy am I going to buy Wormhole yes or no am I going to buy you know uh Athena yes or no I want people

want to be spoon fit I don't like to do that you don't like to do that for obvious reasons but I think there is a there's a time and a place for that and I'm hopeful that big Club is that nice and I'm looking forward to it because I hope that I I have like I hope that I can do that in a way that um you know I'm probably still going to be cautious but I hope that I can do do that and it encourages me to be structured and standardized like if you're going to pitch an idea it has to follow a certain format if you're ever selling if you're ever doing stuff like and so I it's just nice to have that type of template right because it's written I think these things ideas should be

structured as memos the same way that you would do it at a fund well documented people can read about it and comment and see all the disclaimers and disclosures whereas in a podcast you just you're not you're going to miss some of that right and it's better to be in written form cool I like it let's do it at permissionless I think it's a good idea I think so yeah yeah yeah like the same way that we did that meet up but like maybe just a meet up for bit club members that have been active in the platform and well I'm actually we're doing um zerox day so like permission list is three days but there's day Zero which is zerox day it's basically uh for for blockworks research subscribers we're going to bring a lot

of the big allocators in the industry and may maybe we can combine forces in that way but that's cool yeah yeah um that's cool investing is a social support yeah and even more so in crypto so all right there's one last piece of news actually non crypto that I thought was cool this week which was um so there's a the biggest prediction Market company I think out there is not poly Market it's actually this thing called Ki um like outside of outside of like U the kind of offshore Costa Rica ones but there's one called Ki and um they've tried to do everything like like right in the regulated way they've raised some Venture money they've like waited to get the regulations and actually they had a la they raced from a z I think I think

so I think so they had a really cool announcement today which is that um or so the problem with prediction markets is that there's no liquidity like there's no real players there's no liquidity and like they're just these like tiny tiny tiny markets um and liquidity begets liquidity but same on the other side right so when you don't have liquidity it gets tough so terrible yeah yeah so today actually they announced that sasana became the SAS Goan is one of the biggest market makers in the world SAS Goan became the First Institutional Market maker to commit to actually making Mark markets on Ki and uh there's this post from the founder Tac which is look s Sig SAS Guana uh I think probably CS Investment Group has two trades two

trillion in yearly volume one of the largest market makers in the world world uh first time in history that a big institutional Wall Street Market making firm is now committing to make markets on a prediction Market platform um and actually the impact on this is on Calia you used to only be able to trade a thousand shares at a time you can now trade 100,000 shares at a time um and actually in s SAS guana's announcement they said yeah we're gonna be making markets for everything from monetary policy swings to Taylor Swift's album performance so right absolutely I just I I think it's great I think it's really really cool and I think what's happening is they realize the demand that's going to be there for the presidential election absolutely absolutely yeah uh I

have two thoughts on this one I was having a I was sking with a group of older folks allamerican last week and like allamerican like they're like oh they're all American I it they're all American of course we politics always comes up with the table here we go I said like 20 minutes in was like savoring the comment I'm like guys I just sent them the link I like check out check this out I sent him Link at Poly Market the the politics page and then they were like incred they were like fascinated by it they couldn't stop talking about the rest of the week they're like oh my God they like and I'm like it adds just a lot of really good signal and just data right it's like aund million Doll Market like stop

pontificated no one cares what you think John or Joe the plumber look at the prediction Market who's going to be the Nom like they were talking about like who's going to be the nominee for Trump I'm like go look at the prediction Market it's not going to be Nate silver and it's not going to be CNN and all political pundits that have gotten it wrong time and time again the last couple elections it's been harder because it's apathy the market the you know the country's more like polarized now right people are like afraid to tell you they're Trump voter they're secretly Trump voters whatever so anyways prediction markets I think are are probably going to be one of those things that are like I just find it fascinating and they're going to they probably going to be the top three consumer app like crypto uh so it's it's really cool to

see the the other point I wanted to make around this was yeah this this this is just the page that I just sent people and it's like it's a huge hook there's hundred million hundred million dollar on this on polym Market yeah yeah yeah that's the main Market yeah it's I think it's the largest yeah so it's not small yeah like who are you gonna trust CNN poers or or the prediction Market that has 100 million behind it you know what I mean yeah um I think that there's like an interesting there's an interesting Flavor now just of course we got to finish the podcast where we ended it with meme coins uh like Bowden and Trump I think they're and F just I invested in a project just recently that

it's going to launch that it takes a combination of what you're seeing with these meme coins that are representing outcomes in a way signaling interest right the there's a there's a trump meme coin there's a Bowden mem coin that has wild swings when they come out right there's debates or whatever um combine the two imagine uh so the challengeing PO market and just prediction markets is you need a lot of liquidity as you said but if you combine like the the mem coin aspect of it like what you're seeing with Trump and Bodin into a prediction Market anyone can create it anyone can launch a meme Cod Source but like you attach more of the outcome component to it I think you're GNA the the goal is to have not just one $100 million market like why

not create attach onto memes have been incredibly good to scale and attract a lot of liquidity combine that in a in a more prediction Market type of platform so that was my idea that I had I'm kind of incubating this thing but not so like not not I I was involved in the kind of the the idea generation of some elements of it they came to me and I said that's that's amazing super impressive and then we kind of like worked it through so I'm I'm hopeful it will work because I just want to see more more larger markets yeah I mean the counters that the only thing people like betting markets and prediction markets people talk about them I I I would love for a prediction Market to take off the counters that every four years people talk about prediction markets election years and

then they and then it goes away well yeah but like people were also want to maybe do you there's other stuff right yeah I mean the sport Taylor swi tickets sell for more than $110,000 uh yeah yeah yeah yeah discret things um uh I mean that's option markets in a way right yeah and derivatives the notional value that is like ERS of magnitude more yeah so yeah we'll see it's interesting though like uh the soice to say I I ended the discussion with these folks I'm like listen guys I probably will be uh you look at Trump two things like who's going to win the election I was like oh

well probably look at the Trump meme coin performance as a good indicator and interest but also like Trump had recently launched his spe right I was like look at Option volume uh expiring November December and January because if there's a huge Spike someone knows something and Trump's gonna win right the huge donor or whatever like bill amman's on the back and buying like all the all the way out of the money call options and the Trump's back like if there's a huge Spike I'm like yeah I think Trump's going to win or whatever um anyways under of this polit political legal religious uh or any Financial advice for that matter you shouldn't listen to this you should post answers to the 3 discussion which is more relevant to any of this um did you see that did you see the

thing about Amazon um so so Amazon I don't have a cont I don't have a content of the week this week but um my story of the week is so there's this Amazon launched these stores like I don't know five or six or seven years ago and I remember going to one of the first ones in New York let's call it in 2016 or 2017 and basically there're these uh employee list stores where it was full self checkout store it was crazy put you get a basket and you'd put in your tomato sauce and your you know your pasta and your oranges and your bananas your milk and you just walk out of the store and it would automatically charge it would automatically charge your um your like Amazon account I think it was and you had to have the Amazon account uh app on your phone I was like wow this

is the future it just did you use your your palm or were you using it wasn't your pal you'd your you'd have your phone in your pocket oh you checking it open the gate and you walk in and it would like scan your phone in your pocket kind of like walking through a Subway Turn Style and I was like man this is the future of shopping this is crazy it was like so efficient it turns out there's a story that came out this week the the way they were doing this is they had thousands of employees in India and they had video cameras like hundreds of video cameras in each store that were just these tiny little video cameras and so they were the people in India you know I'd take a tomato sauce off the shelf and put it in my grocery cart and

the person in India was just being like uh tomato sauce adding it to my cart in in Amazon basically and then and then charging and then charging Bas on that so it was just completely manual work and uh I I think they're shutting these stores down and yeah but state state St state of the AI Market fake it till you make it I guess fake it till you make it yeah you think crypto's bad yeah cool well last thing content of the week well two things two things I did finish reading the Chris Dixon read WR own really good that will become a staple of the book that I share with someone was asking me here I'm get this week and someone was saying um I'm reallying crypto what should I do and historically I've given them the Bitcoin

standard which I think is like a very good book as an introduction by Safi C last name yeah yeah apologies and and now Chris is um book it it's uh it's very good very articulate so those two I think will become my staple um nice nice that's great I forgot to plug Empire newsletter launched this week shout out to the blockworks news team um it really good yeah shout out David and Casey and Katherine and mcweeny and everyone who worked on that so if you're not subbed go sub Joseph let's put a link the top of the description last time you put it

all the way at the bottom let's put it at the top but yeah thanks for listening folks hope you guys are enjoying the newsletter Santi enjoy the slopes thank you sir thanks everyone for tuning in uh looking forward to reading the comments in this one in particular get shredded shouldn't have even hit record on this all right see you next week hey everyone Thanks for tuning in to today's episode don't forget to claim your free Wormhole nft exclusive to Empire listeners hit the link in the description of today's episode and fill out the form to claim your unique Wormhole nft [Music] today