The Endgame Landscape of L1 Blockchains w/ Alejo Pinto (Pontem Network)

Transcript

[Music] hello and welcome back to the strange waterer podcast thank you for joining us for another conversation today's guest is allejo Pinto Chief growth officer of pontum network pontum is an Aptos based Studio who works in close partnership with the Aptos Foundation to onboard users makers of products such as liquid swap pontum wallet and lumio L2 aljo and pontum have developed a deep understanding of

aptose during this conversation we spend a good amount of time understanding pontum and the Aptos ecosystem but then we shift into some of the largest questions in crypto questions like what will the L1 landscape look like in the blockchain endgame or which of today's players are at the center of crypto or my the big one what is the role of Bitcoin one more thing before we begin please do not take Financial advice from this or any podcast ethereum will change the world one day but you can easily lose all of your money between now and then all right let's bring out

aljo aljo welcome to the strange water podcast thank you for having me of course so I'm super excited to um talk about all the crazy things going on in pontum and in Aptos and in the the move world but um before we get there I am a huge believer that the most important part of every conversation are the people in it so with that as an opener can you tell us a little bit about yourself how you found crypto and then maybe how you found yourself into this like kind of weird Niche ecosystem in an already weird Niche ecosystem yeah definitely so I got into crypto more than 10 years ago uh entered Bitcoin around 2014 uh I brought it to my uh professor and he essentially looked at it and said

the technology is uh you know relatively simple but the fact that uh it works is really interesting it's uh mostly Game Theory uh like the the hardware and the technology itself is not as complex so uh yeah luckily he told me to watch it closely you know set up recurring B since then and um you know around 2016 it it really picked my interest when you know started taking over my portfolio and then the ethos around uh decentralized money uh satoshi's Vision I think almost became like a religion for me just kind of following in his footsteps steps and building out these uh trustless Financial systems where anybody in the world can just connect

and you know not have to worry about uh even state level actors coming in and uh you know meddling with with their money or um you know their ability to transact with each other which I believe is a fundamental Freedom uh that we should all have so uh yeah from there um you know I I I was relatively conservative in my career I entered IBM um went into IBM blockchain um for about uh 2 to 3 years then uh transition into crypto uh working um at the time meta was working on the Libra DM project um it's a was a huge distribution channel so um yeah that that became interesting enough for

us to uh want to pursue um you know we were raise funds we initially the vision was to make a decentralized version of DM DM was going to be a permission Network so we wanted to enable the same technology on a uh decentralized system so anybody could Connect into it and then if they wanted to apply to be allowed into the DM system so um Aptos and sui around the same time started forming they raised around $400 million each so uh we started building uh applications on top of apos in partnership with them uh and so far we built out the top amm and the top wallet there um and now this next product that we're building essentially goes back to the original vision of enabling this technology to be more broadly used so

what we want to do is essentially enable anybody to build with move applications but also expanding beyond that so of VM applications and if there's enough demand web assembly so that we start to bring uh virtual machine and language um diversity and agnosticism to ethereum so the goal is to create a credibly neutral layer so that anybody can deploy with any language that they want uh and still make use of the best features of ethereum which in my opinion are the decentralization um and security that it brings yeah awesome and I think we'll obviously be unpacking a lot of uh what you're talking about and specifically like what Facebook was doing with DM how that you know created the move movement and then like what's been built on top

of it since but while we're still in this kind of background section I would love to hear um any insights or Reflections that you have coming from something like IBM or or any of these very not web3 native companies that uh were developing teams to look into it can you just like share kind of like what's the vibe like like do you feel like companies like IBM you know at the time and maybe today were they understanding something cool was here and really accepting the vision were they chasing after just some narrative and trying to hire some like Young Guns who would only take their job if it said blockchain like how do you understand holistically what it means when a big company is looking into blockchain yeah it's a really good question in essence

so there's two components I think one is General hype that you know this new technology can bring I think we saw similar uh with AI um and then two is the application of it to uh real use cases solving real problems so um specifically for blockchain this was like um around 2017 2018 when uh you know we had the Ico Mania coming out of ethereum enabling all this so there's definitely um you know General market like a general Market positive sentiment towards this technology um I think where specifically for for blockchain there needs to be like some separation where uh more conservative companies need to

be I guess careful in how they go to market is around the topic of cryptocurrency so uh specifically Bitcoin and eth even at that time and like up until recently Bitcoin you know was kind of solidified as a commodity and then ethereum you know as we know even now apparently like uh ethereum Foundation is being investigated or uh essentially I would imagine to try to dig into whether there is security or not but um fundamentally there's just uh regulatory unclarity which for a a public company is a huge risk uh especially for their stock price so to that extent uh you know separating out kind of like the red tape and the vision

from uh you know the the bureaucracy that under goes on one of these large companies for getting projects through so uh this is where IBM I think found a niche in building out permission blockchain use cases so uh the way that a lot of the enter large Enterprises work is you have uh certain Innovation teams and those Innovation teams have budgets and then you know at large companies if you don't spend your budget that year you know you don't get the same amount the next year um so I would say arguably most most large companies went through some form of proof concept or MVP to test out blockchain as they would with AI or any other emerging technology iot Etc um and IBM was at the

Forefront of helping enable a lot of these um the approach that they took was um essentially with the Linux I believe it was Linux Foundation uh set up hyper hyperledger uh hyperledger is a open source framework for essentially enabling permission blockchains uh the main difference between a permission blockchain and a permissionless blockchain is that um there's permissions into who can use the network and who can you know access certain features um there's no coin uh you know there's no uh game theory that uh like through economics secure the validity of the past and what gets built into the future so uh I mean it ends up being

like a essentially a replicated database which uh still has you know better guarantees than a database because you don't have have one database database administrator that can go in and change the record somewhat arbitrarily so there's still there's still benefits um and you know even even today I believe uh JP Morgan and and some others are are using this technology for wholesale for wholesale banking settlement um uh at IBM for example they use it uh with Walmart to do supply chain tracking with uh hosts of Distributors and suppliers so uh yeah I mean there's a lot of benefits that came out and that were able to separate you know turn this hype into actual use cases where again it it

they tended to separate themselves and maybe at a detriment now into you know looking at it hindsight is this this opportunity that existed for cryptocurrency um even at the time they were still working uh to provide Hardware so servers for cold storage for centralized exchanges um that's still I believe um you know relatively um you know within their blockchain division I still like a relatively uh established part of the business so um you know they definitely did dabble in some of this um I don't know if you remember but they also were working on something with Stellar uh to do a payments platform that was going to be competitive with with ripple um but yeah I mean in essence I think just uh it's very hard for a large

Enterprise like that and then we even saw the push back when you know simply like just putting Bitcoin in your spreadsheet had for like Tesla and some of these other companies so um I think that stigma is going away and and um you know over time I think uh companies will start adopting this technology more and more uh gladfully now today we have companies like coinbase for example that are using Bas and usdc natively uh so that we can enable you know the use of the actual technology and and move away from centralized systems where um you know things can go wrong so a good example for this is for example uh GameStop and uh you know the meme coin sorry not mem coins m meme stocks that

were trading where uh because of discrepancies and you know how many assets or how much was outstanding Robin Hood had to Hal trading essentially like in hindsight if you know everything was going on on a blockchain there's no need to Halt trading because you know exactly how much everyone has at any one point in time um but yeah I mean I think in general a lot of these uh companies are starting to come around and adopt not just blockchain but crypto in general and you know hopefully that Trend continues into the future but yeah there's definitely a lot of red tape that goes around implementing these and um you know hopefully that changes so you know I I we'll put the like kind of more the things are around coinbase and

usdc and like put that off to the side for a second but just looking back at the um IBM it sounds like the story there was that in this moment where we were like developing all these Technologies what IBM was doing was like sitting there next to the public industry and figuring out like okay what here is interesting what here can we build into products like whether or not it touches the public blockchain like we're building technology and like we'll build businesses around that and I I want to put that in contrast to what happened at Facebook with DM right where and I I won't tell too much of the story I want to leave this to you but the the contrast that I see is that while IBM and I don't want to pick on IBM While most companies were looking at

blockchain and thinking like what can we take here what Facebook was saying is like that's an interesting thing what can we add into here and you know they were doing it for very selfish very centralized reasons but um you know the way things worked out with the move VM and then Aptos andu and like where we are today it just it strikes me that like IBM has ended up with these private uh products that are being used by like Walmart and JP Morgan today but we can't touch them whereas Facebook's efforts like kind of they're not using it at all they sold it or they got rid of it and now it's uh it's something that we all benefit from so with that as as like the blanket over this can you kind of fles put the the meat on the bones of that

story and tell us like what is the story of Libra and Facebook and like how did that begin the move uh movement yeah definitely so I mean I was not at at Facebook so I can just kind of tell from an outsider perspective looking in um and just just quick point of clarification um I'm not sure if JP Morgan is a a client of IBM but the Walmart one is definitely public but but uh yeah so again separating the technology the blockchain technology from the use case which is cryptocurrency is where Facebook and then later meta got into issues with regul Regulators um so for reference optos originally started as a fork of DM so DM is a general purpose blockchain uh it

uses a lot of components that were already existing for example uh the consensus is hot stuff which was used by Cosmos uh so the researchers at Facebook they like to work on open source open source Frameworks uh you know this is like at large companies like this is like a common occurrence that you know these research teams will be put onto building out open source Frameworks um but Libra uh which later evolved into DM was just that an open source project which the company saw that they could monetize in some way um but the focus was on the stable coin the and it was it was apply named the same as the blockchain which like a little bit confusing the Libra currency or the DM currency and initially it was going to

be the the blockchain the Libra blockchain was going to be fully permissionless so anybody could join the validator set um and this was you know very honestly very admirable for uh Mark to go in this direction initially you know like say okay we want to build the next ethereum the next you know Bitcoin and uh do in a way that's more so to the ethos of the technology which is to be fully decentralized and not wholly controlled by you know a small set of parties or you know consorti parties so you know definitely uh kudos to them um as I don't think they asked any permission they just started doing it and that's when they started running

into these regulatory issues and again I wasn't I wasn't at Facebook so I can't speak for them um you know maybe we can bring in some of some of the folks from opos and sui um but yeah from from my understanding uh the risk is more so around the stable coin or the the currency so the structure and the first implementation and again I I could be wrong but as I remember reading the white paper essentially a basket of currencies globally so not just us dollar so it wasn't just going to be usdc you know which is just one to one with with the US dollar but there's going to be a basket of currencies that would include the Euro and a long tail of foreign foreign assets so uh and keep in mind the way that these stable coins

are structured and even us usdc usdt is that it's not just cash you don't just have cash sitting in the bank it's only a small percentage of cash let's say like uh 20% cash and the other 80% are are uh uh treasury bonds or uh assets that are crewing yield and this is how they make money um so uh 80% of the of the you know stable coin or currency is not actually cash so uh you know this works in principle with something like the US dollar which is very liquid and we can trust that the US government is not going to default on their bonds um however as you look to adopt a longer till these assets um there is a a risk

so these bonds not being repaid there is a huge uh currency exchange risk there's a huge liquidity risk um and even on the US dollar right like I don't know what would like imagine if uh so hypothetically speaking imagine if everybody turned in their dollars into the stable coin or usdc or whatever we all digitize our and then there was a bank run we all wanted our cash immediately they only have 20% of it liquid the other 80% is in bonds uh that might cause a crash in the bond market for example as people look to trade their bonds for cash um so yeah I mean uh you know The Regulators that be globally you know saw this as a huge risk the Facebook or meta has three billion people uh it's a huge

distribution Channel imagine a large portion of that money flowing into this product this which is essentially a complex Financial product or derivative where uh if there was some form of of liquidity crunch or bankr run um it could potentially cause you know repercussions across global economy so uh you know as a as a regulator I mean I mean I'm putting myself in the shoes of regulator this is pretty scary right because like now we're having to trust the you know one of these tech companies who essentially now uh you know have a dependency on for our own economy so yeah I mean I think generally the the vision makes sense I think maybe if it was like a smaller company it could have

like started out smaller and then maybe grown into something but given that it was like one of the biggest companies uh in the world um it did it did stand like a huge um you know centralization risk and Financial Risk for for global economy so um the I think the technology is fine again like you know permiss blockchains and everything Regulators are not getting up in arms around that it was more so the application of it towards a currency um so in the process of them having it be approved uh Libra turned into DM DM was a permission blockchain Pro product so no longer was it going to be um a permissionless set of validators there was going to be a permission set

of validators so only trusted parties could you know hold the database um and then I believe they were only going to do US dollars as a stable coin so similar to um you know usdc or tether so they def they roll back the Ambitions um and then you know for whatever reason again I'm not I'm not sure I wasn't there um you know that that wasn't able to get through either um and then they sold the technology off um and then given that it was open source Aptos and sui were able to continue building on top of it and I mean those were the core teams that were building it internally you know at meta and uh I believe Sue is like the version two essentially of what DM was going to

evolve into and then Aptos was a clean Fork of the existing you know the existing repo that existed um but yeah they they ripped out all the you know permission components so there was like a root account that could still control funds um which control have permissions over so all that stuff was ripped out and just launch uh general purpose blockchain that was super high performance very low cost and was uh competitive with uh salana for example so that at the time that's kind of like the competition and um I mean these folks are uh Professionals in maintaining architecture that can sustain billions of people and you know there's not that many people in the world that can do that there's people at Facebook Google Alibaba Etc that can do that um and yeah

I mean I think they're well qualified to maintain a you know Global state for a giant database and you know so far has had less downtime than so so uh definitely competitive and you know we'll see it continue to evolve as as it's you know brought into market so cool thank you for like walking us through the history and and from from at least the way you described it it sounds like what happened here was like we had an meta had an idea and they wanted to achieve that idea and so they built a technology to like get there and then as they were you know getting permission to make this idea reality from regul they were told like hey this idea just

not going to fly we're not okay with it and So Meta had this situation where they're like this isn't allowed to happen but we have all this technology and like we're going to walk away we hope you know we'll sell some of it we hope the open source movement continues to run with it and U you know here we are years later and like that kind of worked and so I guess my question for you is like the story of why this didn't work for meta totally makes sense from a regulatory standpoint but what I'm still like a little uh what what hasn't been filled in for me is like what did meta create that was worth uh saving like that technology that they created to to make DM which like was a Flatout no by Uncle Sam like why is that

something that's so compelling that uhu and Aptos can build multi-billion dollar chains on it and on top of that we can look at this technology as like something important for the future of like ethereum and for cryptocurrency and not just another allel one yeah so it's important to differentiate the the Libra cryptocurrency or stable coin from the base blockchain technology I think what Regulators had issues with was the stable coin because this is connecting to the real Financial system so you're essentially depositing US dollars or euros into bank accounts and then creating these digital derivatives of them digitizing in essence um and again it's not Ono one with cash so there's

and you know the Redemption process can can still lag cuz you still need like literally you know to redeem a dollar for you know this digital Dollar in some bank or some form in some Vault um so that's where Regulators had issues the technology itself is fine um and what really is being built is iterative improvements over what's existing so the team at Facebook or meta looked at what was available they looked at ethereum they looked at salana and they said okay how do we build the next version of this that's going to be able to withstand uh billions of users which you know by the way I don't think any blockchain today can withstand billions of users but uh it's essentially looking at what's existing and then you know iteratively improving on it so uh for

example Aptos and and sui which are derivatives of DM uh are competitive with salana in terms of throughput TPS in terms of um latency so how you know how much time between each block they're each around 200 00 milliseconds uh throughput I think optos is Benchmark around 30,000 uh in stress testing I think you know between two and 5,000 or 10,000 TPS can be achieved in production um so they're they're just building kind of like what's top of the line and being competitive with what's existing and I think the you know the top of the line at the time and and even today is salana so they're just building iterative improvements over salana um you know I mean the

architecture is definitely very different um for example um on the virtual we can go into the virtual machine component where again uh you know kind of like a lot of the hype comes for for optos and sui with the move virtual machine so uh as I mentioned most of most of what was built into optos and sui was somewhat already existing or research had already been done around it um but one of the novel things that came out of it was the move virtual machine the move virtual machine is designed at the rust uh rust has inherent properties like it's static type it's built for um lowlevel it's a lowle language that's built for um main like Hardware so it's like very

performant and safe um it's used a lot in like Mission critical uh infrastructure and this is important because a blockchain financial applications need to be performant they also need to be safe um and it it bored a lot uh from Russ so again maybe looking at what existing out there Solana VM uses rust again uh more performance safer uh static type language not you don't have this um you know you don't have uh dynamic dynamic type and in essence building on top of it itative improvements so uh one thing that sucks about Russ is that's very difficult to to work with it's not

intuitive um or expressive for developers so when you're building business logic um so so if you're if you're familiar with JavaScript or typescript languages uh it's very intuitive or expressive as you're building out you can even as like a non you know non-engineer you can look at the code and generally understand what's happening um whereas with rust uh salana developers described as as chewing glass or you know just being very difficult to work with so uh move essentially based off rust build Frameworks for uh blockchain applications so you can very easily um move assets without them being uh deleted or copied for example um you create like standard libraries which you

can pull from um to again uh you know do standard sets of things that you would expect to do with blockchains or or smart contracts so it made the barrier to entry or the the adoption uh you know a lot a lot better than it is for just Salon of VM or rust rust proper bailing applic smart contracts with rust so and I mean solidity is well known for this solidity is also very intuitive and expressive and you know the business logic can be like is easily understood by people so Sam Black Shear who you know worked on on this project there um you he's like literally a a computer linguist you know like a phc and computer languages and yeah I mean I would imagine um and I think he said

this in in in conversations is you know looked at what was out there kind of took you know the best of everything and then some built something that was purpose-built for blockchain so um in essence uh you know what they're doing and this is how technology also evolves it's just iterative improvements over what's existing so if salana is top of the line how do you build iterative improvements to improve salana so um you know the mo virtual machine is one component whereas the salana VM you know it's very hard to work with but it's still using rust um move also uses what is called optimistic concurrency so concurrency is what enables this paralyzed transaction execution which is also like a very hypee thing that people are including into um the evm even nowadays uh where

salana uses pessimistic concurrency so with pessimistic concurrency you have to know which uh parts of memory you're going to Target and then you lock those up whereas with optimistic concurrency you don't have to pre-lock those memories uh you know the memory that you're going to access so this gives performance improvements like you know uh and again this is like relatively iterative iterative improvements over what's existing that overall make a better use experience another one is a fee market for a memory pool um Solana you know In This Moment over the last few weeks has had issues with duplicate transactions um you know there's no standard way to do memory pools I believe all the uh endpoints where

people submit to have to manage transactions and and you know in some format um whereas Aptos uh I'm not sure about sui I believe they do too uh have a a fee market for memory pool and this is like a standard way that you know ethereum also works Works where um essentially there's a memory pool and you say you know I'm willing to pay this much for my transaction to be included and then the validators just kind of sort by price and say you know I'm going to include the ones that are paying me the most first um and this helps to set almost like a orderly line of things that are going to get included into the blockchain and you can just pay more if you want your thing to be included fast faster um you know this is like a small um architectural design that is now

coming back and making salana you know very difficult to use and they're having to um you know find ways to fix this so again I think it's competitive and they're they're making iterative improvements over what's existing and you know they're just you know some of the world's best professionals that are able to uh build infrastructure that billions of people are able to use at the same time so yeah I mean in essence I think what what's made them successful is is that you know they're making improvements over what's you know top of the line and and you know continuing to develop and and research upgrade you know that technology so that it continues to be um the best that it can be so let me just summarize what you said and tell me if I'm wrong but um it

sounds like from your perspective that the top-of-the-line blockchain is salana which I very much disagree with but I'll take your uh what you say and it it sounds like what what you're saying that um Aptos and sweet but really like anything that comes from the like lineage of DM is essentially like we are taking all of the cool things that salana did in order to increase performance and keeping that but we're adding in a lot more layers that just improve developer and user experience so that like you get all the performance of salana but with like a lot easier time like developing and maintaining code does that sound right uh to a certain

extent so it's not like they you know they use a salon code or um you know they force Sal in any way uh a lot of you know technically there's a lot of differences so the consensus mechanism again it's very different but what I would say is just at any point in time there's like the latest advancements in research right and then the people that are applying that research to build you know these theoretical things onto like real world applications will take you know what is furthest along or what is you know hypothesized to be the best and Facebook just does that you know the people engineers at Facebook do that really well they they're able to uh analyze all the research and then apply it into a product so that they can build you know what's what is the best

possible thing that can be done at that period in time um so yeah I mean it's not like they use you know a lot of components from salana but they learned a lot you know about high performance High throughput uh low latency uh you know cheap transactions and applied it to um you know at the time it was work it was at DM or or you know meta or Facebook um and now that same technology is not being taken into Market um kind of curious curious to hear your thoughts though on what you think is kind of like you know the the top of the line today um and you know what what metrics you're measuring by yeah I mean so look I I think that the point of our industry is we're trying to create a single shared Computing space one right and like I I

don't believe in alt l1s I I think that salana is essentially like putting lipstick on AWS and calling it decentralized when essentially you're just paying like ridiculous fees to like run in just like someone's playground and so like for me literally the only thing that matters with blockchain is like one like we can talk about like this whole like settlement versus execution blah blah blah like that aside like the only thing that matters is like how credibly neutral is your space and like I don't believe that this is going to work where we're creating multiply different credibly neutral spaces and so like on starters like I understand the

point of crypto to be like like ethereum not like ethereum it's our job to make ethereum better like our job is not to go say like that that's like saying like oh like in regards to pollution like this Earth is bad we're going to go create a new one it's like no this is the one we have we need to make it as awesome as possible so that's like my base case and then if you're asking like what's the most interesting what's the Top ofth Line performance right now I'd probably have to say starkware um I probably like would gesture at polygon although like there's some interesting stuff going on with ZK evm but I think that if you're not talking about uh like building on top of ethereum and like leveraging the

trustless that comes out of ethereum then like you're not even in the same category and you that you might have the the fastest like it's like is hyperledger the same thing as ethereum it's not or is the same thing as crypto it's not and and in that same vein I don't think that Salon is the same thing as crypto yeah I mean I I generally agree with you um you know I'm very conservative coming from you know maybe even more so I would argue Bitcoin is even more decentralized and more resilient than ethereum I just think that Bitcoin is like Bitcoin was the promise it was like oh we can have this decentralized space let's build computation on it and then we got into these like stupid Wars about digital gold and whatever and so like we had to start over in order to get like this

shared expressive space but like if I could go back in time and I was in charge like Bitcoin would have turned into turn complete and that would have been the one shared space instead like it just became political and it's now about gold like I don't even understand this gold thing yeah and and I'm happy to go down the rabbit hole of Bitcoin but uh take a look at what the bit VM uh so bid VM is enabling fraud proofs on bitcoin without changing Bitcoin so after the top rof uh Improvement uh and I haven't done like as as much deep Research into it but it seems possible to do fraud proofs so then you can run executions off chain similar to l2s on ethereum without having to change Bitcoin L1 um at all and I mean the reason why Bitcoin

culture is so conservative is because um to your point it's it's like a a power struggle so like if even if you're able to let's say and going back to the the block increase Wars um you know change the the block space from one megab to 2 megabytes like the number is arbitrary it doesn't really matter Satoshi picked 21 million arbitrarily as well um it's more so about who controls it right and the idea that someone or some entity or some some you know force of power can change the code is very dangerous right for the all the reasons we outlined about decentralization so it's better to just stay still do nothing if it works it works you know any changes might might even uh introduce like vulnerabilities

sort of but but that's assuming you've already built the perfect thing right like here's a vulnerability for Bitcoin climate activists like if we don't change that at some point like someone is just going to create a problem out of that right and and we can come up with like okay that that will create clean energy and this but the point is is that like stability and not changing is a choice and like I think that's ultimately why I don't believe in Bitcoin like I really don't I think that they they took satoshi's vision and and then instead of progressing it they like kind of stopped well I mean that's I think that's the point that nobody it's so decentralized that nobody can change it and if it works if it works today it should work in perpetuity um on the you

know on the topic of climate change I think Bitcoin will push us to build a Dyson Sphere so there's no reason that Bitcoin miners need to be on Earth you could just go put up satellites and mine you know M the sun um and then you know we'll evolve as a species overall um but I mean so on this you know it's kind of it's kind of funny because the same analogy you're making about salana apto sui is kind of like you know you could go back in time and say you know falic was doing this like why is he trying to build a new thing separate from Bitcoin well because he tried to move Bitcoin first and Bitcoin wouldn't move with him right right I mean he he tried to implement smart contracts you know something akin to like color coins um but anyways I mean my my point being is

you know at at any point in time there's like conservatism and you know like in Innovation or you know kind of like you know being moving towards you know newness versus just staying put um and that that constantly evolves right so now now at this point in time ethereum is like more conservative whereas these other ones are more you know kind of like more Innovative I I don't I don't know about that but look my point is is that I don't think salana is interesting I do think that eclipse is interesting which is how do we take the technology of salana and create it as an L2 on ethereum and so like I believe that all like I love having this conversation about Aptos and about all of the alt

ecosystems because I do believe that technology benefits from like all of the like you know technology is one of those places where 1 plus 1 equals three but to answer your original question of like why don't I think that salana is like the the topof the top in terms of like what uh the top of innovation in terms of blockchain right now now it's like no I just I just don't yeah I mean and I what you're what you're saying is definitely you know align with kind of like my own my own values around decentralization the true test of decentralization is whether uh the founder or the foundation can die so like Bitcoin has proven out that it's decentralized you know Satoshi is no

longer around Bitcoin is running smoothly um you know one could argue and I don't you know I don't think this is the case but one could argue if italic were to die or you know the ethereum foundation were to be shut down maybe Bitcoin sorry maybe ethereum development would halt or you know ethereum would stop working um I think one could definitely you again I I'm saying it's probably unlikely I think it would continue because it's reached it's reached the uh you know escape velocity it's reached escape velocity maybe at the very onset you know if if consensus or the ethereum foundation or vitalic died you know like six months into the project then ethereum would be done um Sim like similarly here I don't think the argument stands for if salana Foundation or opos Foundation or whoever

went bankrupt or died that like these projects would continue so you know it's it's something like I guess what I would what I would say and maybe like you know I'm not I'm not trying to change your mind but just kind of like a framework to think about it is decentralization as a spectrum and conservatism you know is also a spectrum at any point in time that's going to keep evolving um you know I I personally don't think that proof of stake is completely uh you know proven you know we just transitioned to it on the largest Network on ethereum and they boo with proof of work right like if if he was so uh you know so bullish on proof of stake why don't he bootstrap with it because he we all know that there's you know a ATT Vector to proof of stake like if your thing is not

worth anything if you don't have a monetary premium as to the the asset that is securing your network then your network is not secure at all so like uh you know I think ethereum is getting a monetary premium you know it's starting to be deflationary with usage um you know people are holding as a store of value but um yeah like you know Phantom right like Lisk all these are are now becoming l2s because you know their coins aren't you know worth much to secure whatever's on top um and then even the question would come like what happens if one of these stable coins or you know one of these net one of these coins that is on ethereum becomes more valuable than eth itself like is ethereum now able to secure something

that you know has something else that is worth more than what it's securing um if it's oneir theoretically it couldn't because you you know you just um you know use oneir to Halt or I guess I just don't ever see a world where there's more stable coins than there is ethereum like how would that even happen um yeah I mean that's I'm saying that's a cap that's like a limit because of that you can't let's say ethereum let's say ethereum is worth 200 let's say ethereum what is it worth now 200 billion let's say you want to put a trillion dollars of real world assets on ethereum like how are you going to secure a trillion dollars with 200 billion well I guess my thought would be like if you want to put a trillion dollars onto ethereum then almost by definition ethereum is going

to be worth more than $200 billion at that point I know yeah but this is I mean this is all theoretical I guess is what I'm saying whereas like uh the security of Bitcoin is literally physics it's uh you know electricity that's expended it's uh A6 or machines that need to be built um whereas and you know this has been you know debited at homm kind of like the nothing at stake attack where again if your if your coin is not worth anything and there's no Collective belief that your thing is worth something then you know the the network security essentially goes to zero so um you know I'm I'm still a Believer on a theory and obviously we're building on it I just think it's healthy healthy to have the skepticism so that we don't just you know create a bubble that um

doesn't allow us to see potential attack vectors no no I yeah and I do think that that like is the ultimate value of diversity in this world that seems to have a lot of opinion about diversity like the the reason it's valuable is because like all of us have our biases and blind spots and like you bring people with different backgrounds together like you get a more holistic understanding of what's going on so man totally hear you on that and just to bring the conversation back home um so you do keep talking about how like building on um that you guys are building on ethereum and so maybe like to to bring us back on track can you talk to us about the relationship between um I guess like the move VM or optos or like how how should we understand that building with these

projects is also building with ethereum yeah so you can take several components of what's already been built and settle onto ethereum so post data to ethereum so that you can essentially use eth native liquidity um you know the easiest way to do this is uh you know similar to Eclipse so what we're doing right now is as a first version is just take the virtual machine component and make that compatible um with ethereum settlement so you can do the same uh fraud proving um that you know optimism or or arbitrum is doing uh you could do ZK validity proofs um and essentially do these offchain computations with a separate virtual machine doesn't have to be the

evm um these programs can run you know paralyzed transaction executions you can have you know more performant execution that then uh eventually settles onto ethereum so uh yeah I mean there there's value in bringing this technology that was developed for alternative blockchains and then making it compatible with etherium uh the execution layer or you know the virtual machine component is one one good example of this go along those along those routes um you know apto sui or Solana for that you know if we if we look at okay if we look at the current the current state of l2s the sequencer component is one that's socially acceptable to be centralized like most of these are are are single sequencers

you know they're they're in road map you know to become decentralized sequencers yeah but that probably won't happen uh I mean I hope I hope it does I actually don't care I think that that's not important for ethereum like I think the whole reason that you're settling on ethereum is so that it doesn't really matter how decentralized your sequencers are because you can always interact with it on mainnet uh yeah but I mean you you run into a whole host of issues like what if the uh you know sequencer is compromised then then you know it's like a a race to get out you know and that's going to cause a huge huge backlog you have liveness issu yeah no the hope would be that the code is written so that even if the sequencers compromised they can't actually mess with like your

assets yeah yeah that you know you can still Force redraw your transaction yes but that that's not like a seamless process you know so if you know if a single validator is compromise or uh you know goes down then you know you you will still have a host of issues so yes you're assets will probably still be safe you'll be able to access them eventually but um there's still a host whole host of issues that come from having you know being just a central point of failure is something you probably you know just don't want to have in general um but I I mean yeah to C to certain extent yes um and again we should be we should be trying to push the boundaries and what's possible so you know AR arguably you know what's better than a centralized sequencer and

again we can debate it but a decentralized sequencer we're arguably better than a centralized sequencer a central point of failure um a decentralized sequencer you know could be like an alternative L1 right like if you already if you already trust that a more centralized component of the tech stack uh you know is acceptable and Solana aptoi are more centralized so like why not use them as a decentralized sequencer for example um you know they already have billions quote unquote billions securing through proof of stake they're they're decentralized you know Network so yeah I mean I think there's creative ways here where we can still use data availability is another example so you know there's uh you know the the settlement uh the guarantees on data

availability are not as important on settlement right because you know you still want access to your eth um but yeah the I guess what I'm saying is there's value in in still advancing these and what we're both saying is there value still advancing these alternative Technologies um so that at the end of the day we can settle on eth but the main reason you want to settle on eth is because eth is valuable right like you want to be able to access eth as a native asset and you could really only do that on on ethereum um yeah I mean and and and I would imagine similarly you know as we as we start to put real world assets on chain this stuff is now Mission critical infrastructure like Financial Mission critical infrastructure um so like if a

state level actor can take down Solana can take down those then that's a you know that's a matter of National Security that we're not putting ETFs on chain uh whereas it would be a lot harder for state level actor to take down Bitcoin right like how many times has China tried to ban Bitcoin so you could argue that it's state level actor censorship resistant um and that makes it safe for the US government for example to put a Bitcoin ETF or even like an S&P 500 ETF on bitcoin um and you know hopefully also on ethereum but um you know if I was like a national security I might not advise it to put on these alternative l1s cuz all you need is like oneir of the servers which are hosted on public clouds to go down and

then you you lose liveness so um yeah I mean that's that's definitely the most important thing I think the censorship resistance decentralization but even to your argument around um uh the centralized sequencer so if a state level actor can take down a centralized sequencer then that you know it might you you might still have access to your funds but it would definitely cause chaos enough chaos for it to be uh you know like impactful so um yeah I think just like building decentralized resilient architecture is like why we're here and you know at the L1 is definitely the most important but we should also try to you know push the boundaries on the l2s and the l3s ETC so that it it continues to be more and more resilient as the l1s that they're built on top of yeah for sure and I think like

my ethos just comes for so I'm a eth Staker right and that means I run a computer with a constant internet connection and like have panic attacks every time I miss an attestation and like I I'll just be frank with you like 4% or whatever is just not worth the amount of like time I spend thinking about it right and so what I get nervous about in terms of decentralizing the entire stack is at a certain point we're going to run out of like people like you and me that are so passionate about this we're willing to go through that and so for me the name of the game is like figuring out what is the most important like what is sacred for decentralization and then figuring out how to make that more and more decentralized as opposed to like looking at the vertical stack and

figuring out how to inject decentralization at every component but I think that you and I are skating towards the end like the same end State goal which is like I don't care if you're the richest person on the planet I don't care if you're the scariest government on the planet I don't care if the US North Korea whatever like you have to play by the same rules as everyone else you know our but okay but arguably ethereum didn't really uh you know abide by that during the D the Dow hack right they roll back the blockchain um so I mean I don't know uh just invite you to look a little bit more closely at at Bitcoin because the fact that nobody you know the fact that it's so stale that nobody can control it or or make upgrades I think is what makes it

decentralized and you know if it works today if if China can ban it and you know you can do all this you know turn complete uh you know computations offchain and then fraud proof them or validity proof them then I I I say like why not okay yeah I mean that's a huge if though and if that is true then I'm like I'm honestly with you a lot more than I am today but the way that I look at it is is like really like Bitcoin is like a horse and buggy like someone figured out transportation and that's awesome and then when we got to like hey there's actually internal combustion engine like we should build the next vehicle like we should do vehicles with this Bitcoin was like no we're like it's sacred to do horse and buggy and like I I feel like ethereum is like okay let

let's get us to this point where we have like general purpose capabilities and then we like settle into like what our purpose and what our goal is um I think maybe maybe like a rock or gold is a better analogy where like someone discovered gold um and then ethereum maybe it's like someone discovered how to do like Computing and then if you could you know put a computer on top of gold then like why wouldn't you I well let me put it this way why would you put a computer on top of gold so you can make programmable gold so you can like so uh there's a trillion dollars in Bitcoin right now that's sitting idy like it's not being used that's a

trillion dollars that could be used to create stable coins to create uh you know defi uh so I mean it's just idle idle Capital um whereas like you know maybe ethereum with eth discovered silver and silver well I I don't think it's silver I think eth discovered oil yeah yeah that's a good analogy yeah oil yeah that's a good analogy gas for running uh yeah com like a combustion engine yeah yeah that's a good analogy but hey don't you need gold to make chips and to make you know computers I mean we're just getting too up here yeah I mean yeah now you're like tricking me on physics like the the money part of gold has nothing to do with the chemical structure of it yeah yeah anyway with our last few

minutes here let's uh let's take us back home and like let's look to the Future so like especially in regards to the the types of stuff that pontum is building but really just in general with like the future of decentralized computing and of like crypto what like maybe in the next cycle right so next one to two years and then in the next 10 years like what are the things that you are most excited about and that you like are most like confident that the world is going to change because of this technology yeah the first step is bringing the virtual machine diversity to ethereum so ethereum is an infinite G we're planting the seeds for uh alternative EMS to just work um our approach is to make them

compatible with existing l2s it's uh really hard to bootstrap so if l2s or cities is an analogy it's very hard to bootstrap you know uh the next big city uh whereas it makes more sense to build you know in New York City or San Francisco where already the brightest mines the best people there's already Network effects of you know markets and and an economy that's there so our goal in the next few years in the next 2 3 years is to enable uh virtual machine diversity in the l2s where people already are and people want to be so that's optimism arbitrum potentially polygon ZK zinc a lot of these you know ZK ones that are upcoming um and then I would say in the next 5 to 10 years I think is pushing the

performance limit so a lot of what we learned of you know about opos sui uh you know along alongside our conversation how do we apply that so that technology can also be applied and and eventually settle onto ethereum to get the security and and eth Native assets that exist there um from you know my own ethos and I think this is important because it's what you're building into the technology is you want it to be as decentralized incredibly neutral as possible um you know like one one very pressing one that's ongoing right now it's like there was a $60 million hack on blast and you know they're talking about rolling back the transaction for a $60 million hack and I think um yeah I mean they definitely have the ability and if they don't then maybe the US government will come after

them for you know because obviously North Korea you know and obviously nobody wants to be funding you know the the North Korea nuclear program but um you know in in essence and again ethereum had the same issue uh at during you know doing the Dow hack where they rolled back transactions or they rolled back the state uh because there was a social consensus layer to do it um but even at ethereum it was only like 3% of the eth that voted like it was a very small amount of eth that actually voted um but we we have to ask ourselves right like if if there can be human intervention to roll back the chain like is it truly decentralized right like what happens if you know someone puts a gun to bic's head and says okay roll back the chain like are we going to do

it well today it doesn't happen it just doesn't like there's too many people that need to be involved that just don't give a about vitalic uh right but maybe maybe we have right but I don't know wouldn't we all want to say vitalic like wouldn't we like social I I think a more interesting question so I'll put the Dow hack aside because uh it's it's more what's so perfect about this blast one is like it's cartoonish like how perfect this moral quandry is so let me set it up to you and um I let me preface this by saying I don't have a right answer I could argue all day on both sides but given the situation with blast where there is a $60 million hack and you know without a shadow of a doubt

that it is a North Korean hacker attempting to bring money in to increase the nuclear program and increase suffering on people what and and we're we're not even talking about ethereum L1 we're talking about a L2 right so you have the ability to roll it back what do you think the right thing to do is yeah I mean it's a really hard question I would say if if there is like some human if there's like some human component that can roll it back then those humans need to come to a social consensus but my argument would also be you should try to build the humans out of the social comp out of the out of the consensus so I think that's where you know I think doing a Bitcoin roll back would be almost impossible and to your point earlier I think doing an

ethereum roll back today it would be almost impossible um but yeah I mean if it's if it's up to a small number of humans and uh then I think they should probably you know not fund the nuclear the North Korea nuclear program but we should also build uh infrastructure that is not dependent for a small number of humans because it is I mean it is a slippery slope you know like today is North Korea very you know black and white but what if it's you know the Canadian truckers or you know the Republican party or whoever whoever some doesn't like or whichever side you want to stand on in the Israel war yeah exactly exactly so um yeah I mean I think it's just a slippery slope where the more that we remove humans the more credibly neutral the technology is and

you know given that there is humans there today then you know obviously the humans have to come to consensus um but for this stuff to be resilient you have to remove humans as much much as possible yeah I hear you man and I like it is so tempting to say like just like roll it back and like just don't fund like the evil people who literally stole it but at a certain point you have to ask yourself like okay like where's the line you know and like there's going to be someone who sees you as just as evil and there's going to be see some like it just gets so messy the second you're making judgment calls and like it's so important to to remember the reason we're supposed to care about this is

like to get judgment calls out of here in the first place yeah exactly and I think that's why Bitcoin I think again is like a a northst star that we should aim for in terms of nobody being able to change anything yeah no fair enough and I will uh leave leave you with that uh note going out so aljo thank you so much for the time I know this was uh probably like a little more confrontational than you expected but I really appreciate you uh just like sitting through and like talking through your beliefs and like helping me understand um like one just like the space more holistically but two just to like have uh some reminder of like what core principles in this space are so uh first and foremost just thank you thank you for your time and for your

grace and for uh your contribution definitely yeah I appreciate appreciate you having me here and uh would love to do this again of course so before I let you go can you just share with the audience um where they can find you where they can find pontum network and if they're interested in learning more about like how what it means to build and move and how that changes like what they're capable of uh what's the best way to get started uh yeah definitely go on X pontum Network um you can find what we're building on lumo doio or pm. network um feel free to reach out uh overx DMS um and yeah happy happy to chat on all that and and check out what we're building online awesome man well again thank you and um again it's just

not that often in this space that like the people you talk to think the exact same way and it's like moments like like this uh conversation where it really reminds me that like there's different ways to see like the same thing and both like be like full all in like with your lives and with your career on the same space and see it differently so Alo thank you and uh have a good rest of your day thank you you too bye n