Epicenter Hosts – Is the Ethereum Roadmap the Right Path for Eth Holders? #454

Transcript

welcome to episode of the show which talks about the technologies projects and people driving decentralization and the blockchain revolution i'm brian crane and i'm here with maher roy and federica ernst so before we get started we'd like to tell you about our sponsor for this week so this is stake wallet state wallet is your new favorite multi-chain mobile wallet that puts the power of web 3 at your fingertips in just three tabs you can stake and manage your assets in over 22 built-in protocols including all the major evm chains l2s and non-evm chains like cosmos salon and near and more stake wallet abstracts away all the complexity while being fully

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out and with that let's go to our host discussion right i think it's the first time we've been doing that for a while we were just going through some you know potential topics before and ended up getting kind of bogged down into an extended discussion about ethereum and scaling and then we were like let's just get started and we'll figure it out sort of as we go but maybe before that how are you both doing i'm doing well i just got back from from paris and uh ecc is always such a wonderful event um so yeah i feel very energized what was there what was the highlight of

the conference for you somehow somehow at ecc i ended up missing all talks so i literally went to like three talks my own and two others um and i still talked with people 24 7. um it's a very much felt like being at a conference and ecc kind of manages to keep that community feel while also having everyone at hand so yeah no it's uh it's nice it kind of feels like ethereum a couple of years ago so hi everyone maybe so i'm i haven't been hosting episodes epicenter episodes for a while

it's mostly because of some health issues i had but i'm i'm doing quite well right now yeah getting back into into the crypto scene these days one of the one of the questions i am grappling with is the intriguing question of whether the ethereum roadmap makes sense for the ether holder like me so i i've been like this long time ether holders i don't know seven or eight years it's this position that i never sell except to build the one company the the company brian and iran called chorus and the the question these days i'm

grappling with is does the ethereum roadmaps make sense narrowly for the ether holder not the ethereum ecosystem but the ether holder yeah you had that you had a twitter thread recently that got some got some attention what was the what was the kind of the gist of the argument of your uh twitter thread yeah i mean i i'm kind of like realizing that the twitter set got very popular but maybe i should have approached it differently i should have written it differently um so maybe i can tell you the gist of my argument right and for a moment like for a moment like let's think not of

crypto but of i don't know the traditional corporate world right so so imagine like amazon right so imagine amazon in 2005. it's been 10 years in the book business selling books online massive success and then it realizes that in building the book business it has ended up building data centers and other startups also need data centers and so it decides to build another business which is aws right okay it's going to rent out some of this computational

resources it has to other startups so that they can build their other products what does amazon do when it makes such a decision well it structures aws as a subsidiary and the parent amazon continues selling books and buildings building its logistics chain right the parent amazon doesn't say i will stop selling books and i will only now be building data centers it says okay i'll do both of them and the way we will structure ourselves is the aws work will be as a subsidiary and the parent thing will continue as the parent so that's that's one way corporate transitions play out another way corporate transitions play out you can take the example of

elon musk where he's building these tesla cars and he realizes oh in a world with lots of tesla cars people are going to want solar panels on their houses to charge tesla cars and be emissions free and so on this inside there he realizes that people that he's selling tesla cars to will want solar panels so they end up starting solar city ultimately integrating solar city but to build solar city elon musk never says i will stop building electric cars so that i can build solar panels so now when you come to ethereum the interesting so what's happening in the ethereum space

in ethereum something i think that something weird is happening in this roadmap actually so historically the way i have kind of viewed ethereum is ethereum is a place where you know people can come and write their smart contracts deploy them and like they can get customers and that's the major thing that ethereum has succeeded in over the last eight years and actually ethereum has enormous traction like no matter by what metric you um you read it is usually like 10 times ahead of any nearest competitor you can think of in whatever metric you can think of and now and historically historically ethereum's roadmap has been

that people love hosting their smart contracts on our network and we are going to create more capacity for them through our through the sharding road map where the more capacity will also be run in infrastructure which is controlled by the ether token holders that's been the traditional starting roadmap now now ethereum is shifting has shifted to a very different vision um and that vision is that ethereum this this main chain is going to transition to being a chain that specializes in settlement and data availability and maybe we can define those terms later on

in this in in our chat and the job of actually hosting smart contracts and running them and providing huge throughput to these smart contracts will fall on networks that ethereum calls l2s and these networks are by by and large run by other people's coins so you have a network like stockwear that has its own coin like arbitrarium it has its own coin etc and so ethereum is like saying that okay we will specialize in the role of settlement and data availability and leave the job of hosting smart

contract dapps to these other coins and so in a way you can read ethereum's roadmap as in hosting smart contracts like just like amazon realized it needed data centers ethereum realized it needs a settlement layer but ethereum's decision is that it is stop it is it it is it is going to stop investing in bringing more capacity online for the smart contracts that do run on ethereum and it is rather going to specialize only in the business of data available data availability and settlement and it's going to leave the business it has

won so enormously in to other coins and the thing i'm trying to think of is like is that a smart decision is it a smart decision to sort of abandon the winning horse that you have and bet on this sort of new business line which is kind of kind of like an r d business line entirely to the detriment of your main business line all together and so you know like this is this is the the crux of my inner doubts about the ether roadmap for the ether holder yeah i i guess one of the one of the

core questions knows around this is if you have these l2s and if these l2s then get a lot of adoption and get a lot of traction you know to what extent does this sort of drive value for ethereum and i think it's definitely unclear right i think for sure you're right that there's no evidence that that happens and of course the incentives are not aligned right because to the extent that there is like value to be captured you know all of these l2s they will want their token to uh to kind of capture that value and i

think right now of course you have a big incentive to be kind of ethereum aligned and to be you know connected to ethereum and kind of work with these ethereum apps but over time that might become less relevant can we talk about how the l1s and l2 so the ethereum and the l2s work together so busy i mean the l2s currently need um ethereum as a layer for fall proofs right i mean basically i think i think a lot of the of the so-called l2s have done really good marketing and that basically we all know them as l2s and as far as i know the only l2 that actually currently has

five proofs is arbitram right so that's currently technically the only l2 the or the other ones are side chains right uh like you know using like the correct terminology i guess the less aspirational terminology so basically your point um would kind of reframe basically what would actually argue that most of the value that they accrue they accrue as side chains anyways they don't actually need the file proofs right is that correct mayor so there are like arguments at like different different like scales but my biggest question my

my central question would be ethereum could have could play this whole game the same layered architecture very differently how well ethereum could say that okay we are succeeding enormously at hosting dapps uniswop is a major blockbuster running on our chain we need a data availability and settlement layer we don't have one we need that we need it to scale ethereum could could have said this let's let's build our own data availability and settlement layer we will we will basically uh create a fork of the ether token so

uh we'll call it by some other name and this other coin uh 20 of the supply can go to some set of developers that will build a settlement and data availability layer for us and then the main ether chain would continue rolling along building extra capacity and use that settlement layer to actually function as a roll-up and scale and deliver more capacity to a winning dap like unisport it could have done that it could have done the opposite way around which is the current ethereum chain it becomes the settlement chain but then a fork of the ether token itself becomes a roller player that continues hosting

unisop and delivering it capacity that could have been possible or there was also an alternative to to say that actually maybe maybe they don't want this brand confusion of two two tokens i i bet to you it is possible to create two chains powered by the same ether token one focal one focusing on settlement and data availability and the other on delivering high throughput to a winning application like uniswap so these are all parts of the branch like of the tree of choices that are available in front of the ethereum community and my central question is not about whether l2s are good or not but why are

these other branches not being chosen and rather the main ether coin is abandoning this successful business in pursuit of an experimental business like data availability right so that's the central question right now now because it is making this odd choice to abandon the this winning horse this amazing business that it has today in pursuit of this experimental business and i find that is a baffling and frankly even stupid choice to append in that business i am forced in a position where i have to critique this l1 and l2 system

i don't naturally want to critique l2s i think this is the cool architecture but because the ether token is making this choice to pursue this experimental line and abandon the successful line i am forced to critique the experimental line so now we can go into like critique understanding this experimental product line and actually maybe even critiquing it a little later in the show yeah i mean one one thing so i've also been kind of like thinking a bit about it i'm not as as knowledgeable as others about l2s but you know and then i want to give credit here to irvine who's uh you know our human team lead at at

course one and we've had like a whole bunch of discussions there about l2s and i feel like i'm more and more coming around to uh his argument which is basically and this is also one of the things that stood out to me when we did the eye return podcast sort of like in retrospective right because you have this sequencer and you know right now the sequence is run by you know one party uh and i think everyone recognizes that this may be like maybe they can't steal your money but one uh you have a kind of a risk that they may have downtime but i think more important is the risk around

regulation around censorship around okay now someone can subpoena them shut down a chain you know like so it says obviously it doesn't work to have one party that runs uh an l2 i mean maybe it works in some in the case it's like an application specific l2 and and the gaming l2 or something right but i think for a generalized smart contract scaling solution you know you have to kind of decentralize and then how do you decentralize right then it becomes something where you have to to decentralize the sequencing and now you have to have these different sequencers you have to worry about

who is a sequencer at what time you have to worry about malicious sequencer you have to have some sort of sybil mechanism and a lot of that stuff is exactly the thing that like an l1 solves right through staking and uh through those things and then of course the the dy the x choice was very interesting in that context as well right where they're basically okay there are being an ethereum l2 on starkware and they were basically they basically moved to building their own cosmos chain and it was exactly around that that point of decentralization right that they felt that

as an l2 uh they just can't get the same level of decentralization right so they chose to you know build their own l1 and i think that's seems very sensible to me seems like a very coherent argument and i haven't so far i think heard a strong argument against it and then i guess the other thing uh the other point irvin also made or the other point around that is that okay so the l to the ethereum uh you know you have this exit mechanism uh and so you have some guarantees but the guarantees only extend so far as to

the assets that are like moved over from there so now you start having i don't know interoperability or like you you start having things that are natively deployed on the l2 right because you don't want to deploy it natively on ethereum because it's going to be too expensive right and then the kind of ethereum doesn't really provide you security for that right because you can't exit that to ethereum so i think all of those like i do i do think the argument that like okay any l2 that like succeeds ends up becoming kind of like an l1 one because of decentralization and two because of economic incentives as well i i think it's very convincing

and then i guess if data ends up happening then you really just have ethereum with a bunch of side chains with bridges to ethereum and yeah maybe ethereum provides some other services to those side chains like the settlement and data availability and like i i don't understand those things enough and i don't have an enough of an opinion whether you know this is a really valuable service or not so i think one of the one of the weird things i feel is that the the the reason that l2s will have a tendency to become independent l ones is that it isn't clear what ethereum gives

to some categories of l2s not all l2 some categories of l2 so okay maybe we can take an example so one of the most popular um you know upcoming l2s is this star queries chain right this is the one that dydx wanted to be on and then they moved away to cosmos so when you think of like this l2 today it's it's very clear what ethereum provides this l2 right so today it's it's abundantly clear that the main main thing like the l2 gets from ethereum is uh a whole community of developers that would want to build stuff on their

budding chain okay so imagine today ethereum is at 150 billion market gap and then starkware their token debuts in december of this year at a billion dollar market cap small the small coin needs the community it makes sense now what does the small coin get on a security level right uh because ethereum is trying to sell security and settlement to this small coin now when you look at the architecture of starkware it's it's a stunning project like it it is like this is like the sci-fi future realized um

why is this the sci-fi future realized this is like the first chain or not the first change actually like the second chain the first being mina but this is the second chain that act that actually balances the that strikes a very interesting power balance between professional validators on one side and normal day-to-day users on the other side now what is this professional balance so when you think of like ethereum in solana right what like many people like oh solana is not decent life solana is not decentralized and ethereum is decent why do people say that there is truth behind it actually so in ethereum uh in the ethereum proof

of stake you can run a validator for ethereum proof of stake in your own home you can run a node for ethereum proof of stake in your own home which means if you are extremely motivated you can verify all of the accounting of ethereum starting from the genesis block on your computer without needing some fancy servers in a data center solana is not like that so in solana it's a bunch of professional validators that run the chain and chorus my firm is like one of them and the chain is so massive that you can't run you can't run a full node for that chain at your home you can't verify its accounting sitting at home

whereas in ethereum you can and so there's these two families of architectures one which goes for scale and it abandons home users being able to validate the chain and then there's the ethereum which says lower transactions per second but home users can validate the chain and so two different universes right and like that's often the decentralization debate happening in our ecosystem now something like stark chain comes along stark where chain comes now it's mind blowing because what stark wear chain can do is it can be a solana i mean it's it's it's it's designed

this year to be 500 transactions per second which is by the way exactly the amount of load solana handles today so stocks the stock where chain can do like 500 transactions a second but what this stock where chain can do is it can compress all of the history of its chain into a set of small proofs and you can verify these proofs in any small computer on your home in your mobile and by reading these proofs you can be sure that the accounting in that main stock where chain processing 500 transactions a second is correct so this this kind of chain strikes a power balance between home users and

professional validators the professional validators can use their fancy data centers to crank out the transactions per second on the chain but the home users are not left behind on this journey like in solana they can actually run their full nodes and be sure that the accounting is correct that's the value prop of a stock chain the stock chain has a second value prop which is when you have two stark chains a and b that says starkware and mina if there's a bridge between those two chains that bridge is ultra secure meaning that chain a and chain b are bridging to each other if chain a gets hacked completely by the validated set running

chain a chain b is completely protected from that hack it will never process any odd transaction even if the chain on the other side is hacked this is such an ultra secure bridge and there is no custodial set of signers so this is like the starkware magic now this now the thing is like okay now today is like ethereum 150 billion stock where 1 billion starkware is an l2 okay it goes to all of these conferences it gets a community make sure marriage made in heaven today but imagine imagine now uniswop moves to stockwear or the big dapps moved to stockwear in like five years

stark weighs a i don't know 50 billion 100 billion dollar chain which has more d5 than ethereum because well ethereum doesn't want to be an execution layer so people naturally have moved to starkware and then what is starkware doing starkware is sending these proofs to ethereum and then ethereum is verifying their proofs and saying oh the accounting or stockwear is correct but then starkville has an army of 10 000 nodes running in people's homes also saying that the accounting is correct well my question is what does ethereum provide starkwear what is the value prop ethereum is providing if it is not providing a community of developers in the future because it's no longer an execution layer

it's not providing security because like security comes from their amazing mathematics and the fact that this 10 000 full nodes running in the while so when you see this relationship you realize that in this l1 and l2 relationship the l1 is not providing something of major value which means like that the this l2 can really be thought of as an independent chain as a side chain and like that's i think airman's argument like that these things are actually like sovereign and so the ethereum vision is actually like the cosmos vision of horizontal scaling

by lots of different tokens now i think this argument doesn't work so well for arbitrary optimism i think that's but it works very well for any zk roll up so start chain the book bars and these loop rings of the world this argument will work very well there so um i mean these are these um atoos are currently positioning themselves as ethereum l2s do you think this is just in interim um strategic positioning so they can benefit from the developer community

around ethereum yes yes i i think i think like that is that is that is like i mean there are many things humans do without thinking through the the mechanics of why they are doing it but like their actions are optimal um but i think this is really what's happening so i think when ethereum goes to the world and broadcasts we are doing 50 transactions a second and we are not going to grow this capacity instead we are going to grow into a data availability direction people realize that oh all of these successful projects on

ethereum they are going to have to migrate somewhere and the main thing that any budding chain needs in the ecosystem is developers to come and build on the chain there are so many ghost chains in the world and so if you if you're faced with this problem what would you do naturally you would go and you would become an l2 the perfect place where you can see this is in a in a dark horse project against in again in the zk world which is called book bar uqb a r when you go to uk bar you realize that okay they are positioned as an ethereum

l2 when you start reading their blogs you're like their roadmap is like oh in the future we are going to be an l1 but it's optimal to position yourself as an ethereum l2 today because that's how the developer flow is right people that are unable to scan their thing on ethereum need a house like you can be you can be that house and you can find a community of developers i think this is the odd thing about about the i feel like this is the odd thing about the ethereum roadmap honestly and i i find myself sometimes like with the exception of airwing i find myself also like a lone voice this kind of thinking breaks down for a

game theory l2 the game theory l2s actually need ethereum even when they are big i mean if they're massively successful they won't need ethereum but if they are you know like going to be two percent the market cap of ethereum i think i think they better stick around with with ethereum so but i mean but like i don't know look at polygon or as an example they do they need ethereum i mean that is a game theoretical too in essence

so today polygon is like a side chain i i think like i mean i'm not very up to date on polygon which by by the way is like major project out of india major respect to you guys like i grew up in india i know how hard it is to build a crypto thing there but so as far as my understanding goes it's a side chain today with with an ambition to be an l2 and actively working on a technology to be to be an l2 fritorica would know more and i actually i want to hear friedrich because like she probably has a different very different view on all of this i i agree i agree with um a lot of what you're saying um so

i feel like um back in the day when uh basically sharding and um and proof of stake was merged together as the next um upgrade to the ethereum um roadmap or the ethereum project and this has changed over the years right so basically in the in the last two years or year and a half or so it's because it's become apparent that basically um we we won't have smart contract charts for quite a while and the the shards have kind of been reduced to a data availability layer that

i also have forms with so basically just become a data availability layer i think this is not ambitious enough and also not not the best value for money for ethereum investors um i i'm 100 with you on that um the the so basically my my question is um this has never i mean maybe in on ether research and so on but out in the open it's never really been discussed should we kind of um should we kind of leave

the smart contract charting for now and kind of just go to data availability it kind of it was just it was like sneakily changed the road maps without really communicating about it so there wasn't really an open discussion in the ethereum community because by the by the time that most people understood that smart charts were no longer um in the immediate roadmap every basically other specs had been written and basically there was an understanding that basically would be data availability only and so on um do you think this was a failing on behalf of the ethereum research community how do you see that

so actually i don't know because for me my subjective experience is i was in crypto crypto crypto sharding sharding sharding shouting shouting i'm hit by cancer i'm out of the game for 15 months i returned and now it's like ethereum's a data the ecm specializing in data availability right so it's it strikes me like that like it's like that thing it's probably it's like normal ethereum communities like frog in slowly boiling water i am the person who's like sitting in hospital comes out and like put deep into the water oh you're a data availability your future is a data availability change the coin you're holding is for a data

availability play no longer a smart contract hosting play so i feel the jerk immediately right so i don't know how how this happened and and to be honest i am actually like an outsider too much of the much of the discussion in the in the in in in the in the ethereum research community and at some level i'm also like i've never contributed there why should they listen to me also i can i can also understand that but if i had to guess if i had to guess what ethereum's roadmap should be one way to maybe look at it is to think

we had an amazing we had a major like world computer roadmap where the idea was okay every decentralized application would run on ethereum and we were building towards that vision and it proved hard it it proved hard to build and it was also the case that a lot of other architectures emerged and it's kind of become clear that for many many things people will prefer the other architecture so the world computer vision doesn't make sense so we want to scale down our vision to something smaller that is also very strong right in some way and

is this process of scaling down that has happened and we have scaled it down right now at least for the next two years to be data availability j i think there is this danger hiding in scaling it down this way i i think if scaling down has to happen and i think it has to happen then paradoxically the good scaling down is to rather say that ethereum will hold the biggest decks in the crypto ecosystem this would be my this would be my proposal that ethereum make sure that uni swap becomes the biggest continues to be

the biggest decks of the crypto ecosystem and maybe i can kind of explain some of some of my thinking here right by the way this thinking is not related to what i've said earlier you can believe in one while not believing in the other so so one of the very one of the one of the curiosities that strikes me every time i so you know like as a validator i am active in so many different ecosystems cosmos solana avalanche near i even look at silica and tezos also some i follow tezos and i follow ethereum one of the very curious

things about all of these ecosystems is the dex is the center of the smart contract map in every ecosystem so what do i mean when i say that you can actually see this in action very clearly in in cosmos where in cosmos what happens is every dap gets its own chain and then when dabs want to interact with each other they send cross chain packets to each other these are called ivc packets and basically you can inspect all of these ibc packets and you can know um what dap is being called the most frequently by other dapps

and you can build graphs based on such data and some of these graphs are available in cosmos blockchain explorers when you go and see those graphs you realize what is at the center what dapp is being called most actively by users and other applications it's the dex osmosis and it's like 10 times bigger than the second performance dab okay that's cosmos now when you go to ethereum you're like you in ethereum this kind of data isn't available easily so you can go to actually the data about what that produces the most fees well actually in ethereum it's uni swap unicef v3

uh and it's it's probably five or six times bigger than the next thing which is by the way curve and if you think of like what is the first non-dex smart contract it's probably going to be 10 times smaller than unisoc this pattern repeats in solana again where radium is the biggest and radium and serum they have two different decks architectures so one is a club and the other is this traditional uni-swap-like thing they are the biggest and then the next thing is actually smaller same pattern repeats in even silica it repeats in avalanche trader joe's is the biggest so you always realize though the decks is like always the damn center

and then and then i was like i started to think okay the dex is the center in crypto and then i had the realization oh the decks and oh i realize the exchange is always the center in a financial city so i mean when you think of like new york or frankfurt or london or mumbai you're like these are the financial centers of the world what is common to all of them they have the winning exchange the new york stock exchange nasdaq new york frankfurt london will have the ftse like you know london stock exchange new york will have the lal street so you realize actually like okay whenever you look at like a financial center city the exchange is still there prominent

and the major thing taps need often is a great decks so if you're building for example yearn uh you're going to have portfolios and you want to change portfolios from one to another you're going to need a dex if you're building maker your cdp users are going are using your cdp's to get leverage on a dex if you are building an oracle you need a dex because that's where price discovery happens every particular dap you can imagine you have building an nft where you are like you need a dex to trade your nft so every dap you build you realize it needs index is the center and so actually i feel the optimal way to scale down the

ethereum vision is to rather say we should we already have the winning decks of the crypto ecosystem that's uniswap let's understand its value and in the future let's just like make sure unisop wins and that's it and if you do that every chain of the world is going to connect to you as a side chain they are going to send tokens to you to trade at your winning decks and you will be the center of the world that's my hypothesis i mean uh just maybe i want to very briefly respond on that unisport point i mean i don't think the

ethereum is like well positioned to do that and then i actually do i am personally pretty sold on sort of like the i don't know osmosis idea that like having the entire chain that's like optimized around the decks it's going to be able to like outperform what you can do running a dex on top of a smart contract chain but then when i sort of talk about like i don't know a very different way of looking at ethereum and and that's like looking at bitcoin right so if you look at bitcoin right today is still the biggest market cap uh by far and if you look at bitcoin you can ask

like what are some of the things that are like not great about bitcoin or some of the things that you know some of the limitations and flaws of bitcoin i mean i think we can go through them right so one is like energy it has this high energy footprint right this bothers a lot of people you know it's environmental concern justified or not but uh you know has a very large energy footprint it pays a lot for securing the blockchain all right so it has a that's basically money flowing out of people earning bitcoin there's no smart contract right there's no good bridges to other chains right so you want to move bitcoin over you have all these

kind of trusted bridges um the game theoretic properties of proof of work are not that great right so if you think of like the amount of money it would take you to like attack becomes consensus relative to their value you know it's not that high and if somebody did that bought a lot of mining power attacks it you can't the network can't like destroy people's mining hardware right so uh from a game theoretic perspective proof of work is like so-so and getting worse right as the block rewards are going down the finality is only like probabilistic uh the blocks are pretty

slow the throughput is too low you know and still bitcoin is pretty uh you know fantastic right has a lot of usage extremely valuable but if you look at ethereum you know proof of stake ethereum well the energy footprint that's that's gone right that's going to be very small the cost for securing the chain again is going to be pretty small smart contracts obviously you have smart contracts maybe they're not that scalable not that throughput limited but you have smart contracts right bridges well you have lots of great bridges right like and you can you can build great bridges uh game theoretically proof of stake is

going to be uh you know it's very strong right i think um i i don't doubt that ethereum's design is is good in that sense finality is going to be better right block times are faster throughput you know not amazing but but better than bitcoin right so actually on all of those dimensions in a way ethereum has like some significant advantages over bitcoin and now there has maybe some disadvantages too right you could maybe say it's less decentralized uh i think that's probably true and and i think maybe another disadvantage is you know it's more risky right more

experimental tech choices and then of course the messaging and the brand is also confusing right because the messaging and brand is like kind of like oh well computer but now data availability charting like this is i think confusing for a lot of people but just if you look at like these fundamental properties in a way i think ethereum has and you know the distribution is very wide over here lots of people have ethereum exchange integration liquidity is great you know like a lot of things are there so i think if you just look at it in terms of if you want uh you know decentralized store value that can really function as this like

foundational financial asset in you know like a crypto economy i think ethereum looks like really good and if you if you sort of look at it in terms of you know the size of that opportunity i think that's pretty large uh so i think that that feels like you know another way of looking at the theorem of course that position has also been articulated before uh i think this is ultrasound money eve and i think the bankless guys spent a lot of time kind of uh articulating some of these points but it's of course not it's not the sort

of main ethereum message right and it's not the thing that but yeah i i mean i think that's that's another way of looking at it and i think if you sort of look at it in that contrast looks it looks pretty good and then the upgrade looks pretty good too right now the proof of stake upgrade so i agree in in in many ways i i actually think ethereum with like validation at home the ability to run full nodes at home it's going to be more decentralized than bitcoin someday in the future those numbers will be so and yeah i mean if if the future of

ethereum is to is to be in this digital gold market um store of value coin i think i think it has it has a very competitive position and maybe it should pursue that pursue that market um and it should and it yeah it may be flipping bitcoin on on that market too all that can happen and if that happens it doesn't matter that it that is data availability roadmap isn't isn't so good it it's it's really immaterial right it can it can actually play around with any r d market and abandon its main thing it doesn't matter because it's going to win at digital gold i think that's a fair way of looking at ethereum

and out here i don't have a rational i don't like this part for ethereum and it's it's not a rational argument i have it's like an irrational argument i have i think becoming digital gold is how grandpa chains go to die yeah the next awesome the next ossified chain yeah it's like it's like bitcoin you know it's like started out like okay like a financial system for the world unbanked the whatever bank the unbanked whatever and progressively it became older and older and older it became a grandpa and it became digital gold and it's not dead yet but i think bitcoin will be below

the top top 10 in coin market cap by the end of this decade yeah maybe the world needs digital gold and maybe maybe it's not true maybe it's this is the actually the largest market but i suspect i suspect this is just a way to politely age and die in the crypto world but who knows it's irrational it's like it's very hard to have a rational discussion about this because because there are no numbers out here right yeah um maybe this is this is the bright future maybe this is how i need to look at ethereum to be happy about its roadmap

can i can i ask you something um so i mean all of the layer two fake competitors future competitors to ethiopia that we just talked about do you think part of the problem is that um they are all somewhat more closely um organized like a company because ethereum basically ethereum it's very decentralized right so basically that it doesn't really have one strong driving force behind it and i mean basically sure there's the ethereum foundation but that's nowhere near as powerful with respect um to the chains compared to

say the solanas and avalanches of the world do you think this is part of the problem that not enough of the brain time spent on ethereum is spent on furthering the ethereum proper roadmap i i hold ether i follow but i'm not i'm not i'm not like an insider i'm not a deep deep insider right like so from my perspective actually from my perspective ethereum has enormous like from my perspective when you think of like leadership right like leadership and road map i think ethereum is

quite centralized ethereum is as centralized as solana and i think it's a great thing for both ethereum and solana because when you look at ethereum when you look at vitalik he will give four presentations in a year like roadmap presentations and i'll be on twitter and like the entire ethereum community is going to like follow that roadmap yes there are multiple clients yes there are many development teams but ultimately the entire vision of the chain is is very much centralized and that's a good thing and solana when i see solana i see exactly the same thing it's like it's it's anatoly's vision

anatoly is just like vitalik that's hounding validators to make regular upgrades to their nodes [Laughter] [Music] i mean in terms of in terms of vision both of them do set the set division so i don't think like ethereum lacks a vision setting force and i also and i actually also believe all these crypto networks need one or two great leaders that will set the vision for it because without vision communities end up in like debates and squabbles i've seen that end in the cosmos hub also so yeah i actually don't i actually don't tend to see ethereum as very

decentralized when it comes to vision at some level i just feel like i want to reach vitalik some way it's like i want to i want to write something that like metallic reads and like it it's like he even reconsiders the ethereum road there for like 15 minutes i mean like that would be probably like the greatest thing i can do in in this short life i have so i'm like no no it's ethereum has exactly the right structure there should be like vision there there should be leadership ethereum may not look like a corporate but it has everything in the right place i just think it's like making this i don't know some kind of like structural

error error here is that very controversial do you think you think differently that like ethereum is way more decentralized when it comes to vision and solana is not no i i think the vision part is not so much the problem it's more the the size of the r d department with respect to um the economic force of the chain i feel like currently the r d arm of ethereum is small compared with um uh yeah i mean like yeah maybe maybe one way to state your objection would like what you're saying is it's not an

objection what you're saying is in tesla when when tesla stock goes up 10x elon musk makes like 50 billion dollars but out here like ether token even if it goes to ten thousand dollars the ethereum researchers well they got that grant of ethereum tokens maybe eight years ago maybe vitalik got his grant of tokens eight years ago it's not going to make a difference to to their stash so maybe maybe like that's kind of that kind of incentivization of ethereum r and d from the ether token holders maybe that is the thing that's actually broken i don't i don't think that i i think i

would i would object to that so basically i think over the last couple of years um my experience is that money is an extremely bad motivator so i mean obviously once you have like enough money obviously like more money is nice but it's not something that really makes people work harder or that makes most people work harder i think harder whatever it's kind of it's more the sense of being valued in the community and basically con basically being seen and uh yeah i and maybe we don't as maybe as as an ecosystem we don't place enough

value on researchers we maybe we don't i don't know what do you think i mean i i think this is in general like a challenge in like how do you how do you get like a large group of people to work on you know on this kind of common goal without having a framework of you know a like an enterprise and the kind of traditional corporate structure or even a foundation or something right and and i think that's really that's just very hard to to scale i don't think anybody has figured that out i don't think any crypto project has

really figured out okay how can we now have you know a hundred companies or or how can we have you know a thousand people like all you know driving this chain forward and working on this i mean it kind of ha i mean they can be part of this ecosystem they can be kind of like a line in division do things about it but when it comes to the actual core technical development i think all of them there's like small teams when you have okay some like cosmos is actually pretty decentralized uh in that there's a lot of companies doing core development

but i mean i guess like ethereum uh although maybe ethereum is probably even more decentralized i think but then it comes with a big cost right it comes with a big coordination cost and it slows things down in some way and then i i think that's just a very important problem that is crucial to figure out right and i think ideally then you'd have that some percentage of you know the inflation goes towards you know co-development and you know then if the market cap goes up the budget increases and it accelerates progress more gets invested and now ethereum of course doesn't have

that kind of treasury mechanism but but i think even chains that have some kind of treasury mechanisms i think the the mechanisms to deploy that effectively to monitor that have accountability i think this doesn't really work well anywhere right now now of course i think it's an exp experiment worth doing i i mean i think if let's say if i was to start a blockchain definitely i think i would be like there should be an on-chain treasury some kind of governance you know deploying funds to like drive the ecosystem forward uh now with him doesn't have that uh probably he's never gonna have that

and uh i think that's also a disadvantage uh but but i also think it's it's you know it's an unsolved problem that other chains aren't necessarily doing uh i mean they're doing it but they're not doing it particularly well so so conclusion we need uh mayhem to have uh like a quarter of an hour time with bitter lick no no no no maybe maybe maybe maybe i'm wrong and but yeah like it's it's really interesting how these different ecosystems are pursuing the scaling vision right like it's solana cosmos ethereum avalanche and

actually which which one's going to be the best vision i think like that's like one of the most interesting questions of our of these years yeah i mean so basically when you say the vision um you mean vision and the execution right because they kind of uh they're like one pack right so i'll give you an example it's like when you see solana so the interesting thing about solana is that first of all solana accepts that people won't be running full nodes to solana on their homes right now when you accept that trade-off um when you look at like solana's

technical roadmap you're like actually without making major changes to any of the engines any of the code bases they have like this network today actually processes 500 transactions a second a genuine user transactions not like votes or anything like that genuine user transactions this network on their core technology can go from 500 to 50 000 to 100 000 and in fact like way three years ago when i met anatoly he was like we'll do a million their sacrifice is

no nodes at home so solana is kind of like this network where division is set and it's like it's like about execute execution like there are like i don't think there are like major pivots that are that are needed or coming to coming to solana so i think like that's that's how i understand the solana vision it's like it's like the path to a million tps is like just so set at write the in this so much in the early dna that it's like just about like executing that path ethereum is different ethereums like actually we don't know and ethereum is like

pivot after pivot after pivot is needed to actually scale transaction the transaction capacity but on the other hand um so i mean when there are a couple of chain holds on solana recently and i mean we've never had that on ethereum right right we have had a few chain hordes in ethereum on solana and every time there's a chain halt i i it's a big shock for me because like okay because actually like we are running one of the big validators there it's like sometimes number two by stake or number three wasted or something like that and so now we have to play a major role in starting this chain up so i so these episodes they are not like

media events for me they're like you know six hours of my life burned through each of these episodes so i think with solana the the thing is that at least like when they published the root cause analysis of these three down times that happened in april may and june and from the root cause analysis and the and the patches that they have these these look like they are you know like fixable errors errors that are fixed designs that are fixed uh there's a transaction fee market coming to solana

in the next release and i think anatoly already announced the upgrade so i think like these will go away but yeah sometimes like deep down i do wonder whether like some core design decision especially in the consensus algorithm is like is all of it solid right like so so even i like i have some some measure of doubt about the about like the core consensus algorithm but like these three down times that happened this year they appear to be like programming errors or economic logic errors that will be fixed as per the

root cause analysis so i think for solana like the best slope is you know like that's actually true and this network will have a measure of stability in the future but in solana the thing i would say to solana is i think in solana nobody's kind of actually proved that that consensus algorithm is highly sound this is different to tendermint where tendermint is like a 20 year old studied algorithm solana is a little different i mean i would hope that in the future i see i want to see like a proof that solana's consensus algorithm is like it's like you know battle like he's like he's like

sound under like the academic sense i think like this is what i feel is kind of missing from solana for me and whenever salah goes down this is what i would have worry oh did the consensus algorithm break or is it like some coding error and this year the things were like coding errors and like those are like less dangerous and i think those will be fixed so that's that's where that's where i find myself to be so where where does that leave us if you look at the ethereum roadmap what part do you think should be accelerated actually i don't know i so

actually like if if the roadmap is the data availability um the data availability direction then i think actually ethereum is kind of like doing well maybe maybe the one thing like the one thing in the data availability direction i do feel genuinely curious about is whether the avalanche consensus algorithm is just so much better because if like ethereum has to be like this settlement layer then you want stuff to settle quickly so you want finality quickly now finality in the current ethereum system is like 10 minutes whereas like finality in avalanche average in avalanche is like 500

milliseconds right so 1000 x faster so when that consensus algorithm kind of exists and you want to be a settlement layer where speed matters a lot maybe i think like that's worth evaluating but even if cdm doesn't do that even if it's like okay data availability is the future then i think actually like the roadmap is pretty good i think like the engineering roadmap i have i have nothing to nothing to say about it is the premise that is a data ability and settlement chain that i feel quite uncomfortable about so yeah what do you think friedrichs i've spoken a lot today what do you think

i'm super happy that you've spoken a lot and uh yeah i'm glad you're back i i see your points i i think you you make very good points yeah i need to think about it more before i reply i think brian what do you think i think i i some i i somewhat agree um but i think even if even if ethereum has a more limited role it could still play uh it could still play an important role in this sort of um you know decentralized financial world of the future

and ether could play an important role and uh it could be a sort of like hub like thing uh even if it doesn't secure those l2s but let's see cool so i think we'll have to do an update episode on this in like uh you know 12 to 18 months and see how it played out mayor what do you think the right time time frame is so i mean like if you wanted to convert this into a financial bet i think i think it's actually pretty easy so my financial bet would be uh you know like these spread trades that you have which is long l2 short l1 so long polygon short

long um chain long noses chain short teeth long um long whatever star coin will be there long stock coin short eat um if you if you have a basket of these we can define this that like they will outperform because i actually believe that the value will migrate up like so ethereum base layer stack settlement then the execution stack then smart contracts then users the value will migrate from the from the settlement stack to the execution stack so when you have like

this long polygon short each trade that is what you are betting on and maybe we can actually convert this into a basket and we can like monitor it over five years so um so i think like the relevant time scale is like five years and am actually even fine to even convert it into a financial bet and and and monitor it and being that like friedrich is on the other side gnosis prediction markets we can if we can prediction market if i it i'm i'm fine to do that too as a as a governance feature of some kind let's do it cool well i think we can uh settle the the

mechanics can be settled afterwards but uh thanks so much it was a it was a pleasure to uh speak with you both and uh it was especially nice to have my hair on again and to hear about his faults and ethereum which i think are definitely interesting and pop working and i guess we saw already uh some nice discussion that intro and suit on twitter recently so hopefully this episode will you know trigger some more discussion and who knows maybe vitalik will listen to it and uh and and have a have have have a green tea with red wine and ponder the future so all right with that thanks so much and thanks much for listening for tuning

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