ETH's Shapella Upgrade: Bull vs Bear | Roundup

Transcript

[Music] this episode is brought to you by velora velora is a self-custody mobile first wallet and the easiest way to send swap collect and purchase digital Goods on the cello blockchain download the app and start exploring today at valoraapp.com forward slash Empire we have uh Santiago the skier back with us uh Santi is debating whether or not to be a professional investor a professional podcaster or of recent a professional skier so uh sounds good to have you back with us well it's like what they say right if you're a triathlete you're never good at any of the three disciplines you're just kind of meh in all three so I am having an identity crisis I know I'm not a good

skier I know I'm a terrible investor and as far as podcasting goes well it really does hang in the balance and it will depend on the YouTube comments so uh folks please guide me in the right direction and uh I'll make a life choice have you uh Santi do you want do you watch the office oh I love the office the office and I started watching Modern Family which is also much like the office so anyways yeah I love the audience yeah modern family's good so I'm watching uh so I'm watching the office actually for the first time because basically half of the things that Mike says are are references from the office and I'm on season nine which I think is the last season and uh and Andy so they basically just released the but like the trailer for for the office show and all the people in the office

are watching it and Andy is reading the YouTube comments and he's like you know there's one commenter who's like and you're bad at playing the banjo and I'm like oh my God that's saunting me we get like 200 nice comments on YouTube and then yeah we're like oh who is this guy yeah yeah there was one four four seven saying that we don't know what we're talking about uh all the people that keep us grounded and honest about this there are a few that have hit home and as they say you know if it really hits home then you gotta work on it and um someone I think in the very early days of Empire think God this guy really Rambles and I think it was a terror episode actually it's like it's not that you just said don't talk a lot I was like well I don't know

if this is a Terra lunatic or I'm wrong and I do think that I ramble still but I I made a point not to ramble as much so anyways thank you I remember this I remember that yeah I called you on a Sunday I gotta do some housekeeping exactly exactly so you know it's real I'd be lying if I said I didn't do the same with you at some point so yeah yeah um all right we gotta do some housekeeping one is uh a big shout out to just everyone who listens we had a record quarter in q1 for listens and for downloads uh record March as well just biggest month ever for Empire so big shout out to everyone who listens uh we have decided to move the show to uh Tuesdays instead of

Mondays so the guest episodes are going to come out on Tuesdays now instead of Mondays small switch but if you noticed um the last two episodes guest episodes with Kane and with Rob lushner both came out on Tuesday we're going to keep that moving forward we found that folks like that more uh other updates is we have some new permissionless speakers permissionless uh keeps prices go up every two weeks get your permissionless ticket if you haven't already um I feel like I'm forgetting some stuff but I think I think that's good for this week so it's nft NYC it's booming in New York it's 80 and sunny this week I'm uh this horroring says I'm the it's the worst sleep I've gotten in like six months apparently so well that is because of the crisis uh and the

fighting around ethereum unlocking but tell me more about nft NYC I heard you post that it was booming and I was like and you said what bear Market and my question to you was well I've been spooming you know is it really a bear Market have we ever have we really been at a bear Market in the nft land so um yeah tell us more about how that went yeah I I I think it's booming in the sense that so yeah I went to a bunch of good events went to an arboretum event last night um went to there's like an Andreessen Horowitz hosted a good event uh collab currency did a good event um we did something with uh open scene Doodles on Tuesday night um okay who's like attending this conference you

say it's like a lot of artists a lot of nft like are you seeing the board games so that's the interesting thing is like no honestly no nft talk and and like I'm I got to approach I gotta I'm a little biased because I'm probably I'm not that deep in the like nft crowd but I would say there's no nft talk there is I mean there's there's like no nfts on the walls I haven't seen one nft in all of nft NYC there's no nfts on the walls um haven't seen one person wearing a board ape sweatshirt or a hoodie um oh wow honestly it's just a lot to talk about like l2s Mev scaling what's going on with salon and Cosmos

can they compete with e people are talking about is it a chatter around other use cases of nfts or is it just um surely yeah actually there is yeah I had some really interesting conversations with folks yesterday about um uh like some big fashion houses uh met some folks from I think they're probably the biggest fashion house in the world um they're really really excited about nfts and like digital fashion they kind of painted this picture of a world where um you know every website where you'll go to everything from like Nike to Gucci to Louis and you'll go on the website and there'll be a digital section um and had like a really interesting

conversation with them and uh you know when you basically hit the website like let's this is the world that they Envision is you go to the you go to the Nike website and there's a digital section or there's kind of two two two versions of this one is you go to the Nike website there's no digital section all you have is like the normal Nike store you buy your Jordan you log in with your metamask um or you know with your crypto wallet uh you buy your Jordans and then when you check out Nike actually just airdrops you a digital pair of those Jordans so that's like and then you can take those Jordans and wear them in whatever like you know game that's built on uh that's built on crypto rails you can take them into the game so that's like version one version two that

they're excited about is you actually people end up spending more money on their digital self than they do their physical self and that's the world I think a lot of them are betting on is that um you know if you probably talk to you or you you know probably I'm in this bucket too like I'm I'm probably not someone who's gonna spend more on my digital self than my actually honestly I maybe maybe I'm wrong I mean um yeah but anyways but like they're they're betting on a world where you yeah you go to Louie's website and there's like or Gucci's website and you've got your like normal Gucci store and then you click the digital section and there's like just digital Goods that you can purchase so yeah I mean this was my thesis early on like I fundamentally think that like when when I was a

paraphy we obviously were big in D fight but then my definition of D5 is like you're transferring value and an nft is a transfer of value and so I sort of bucket that I mean of course you could talk about non-art use cases for nfts insurance contracts real estate um you know property like being tokenized and represented as an nft um but I think that's like real world lasted all that stuff like but just that use case that you just described I think will be probably the biggest that in the next like two years that is probably the use case that is the killer use case for nfts you already and and I haven't seen when you talk about throughout this bear market we've seen like um Tiffany rollout for you know a

special kind of Edition for punks you you've seen other like Adidas collaborate with g money which is like you know prominent nft figure um there's there's a number of like we had of course that episode with Camila um and one of her co-workers or colleagues talk about how brands are thinking about nfts and the question that we asked them was hey is all this like implosion of you know FTX and Terra and Regulatory stuff really holding these Brands back and and I think what I heard was no not really I mean they've been on this journey for a long time I think marketers really realize the bullish case for nfts is people are spending more time online and they want to when you think about you open your wardrobe you see a lot of

stuff you open your digital wardrobe there's not much there and the reason there's not much there is because you couldn't have digital property and just to kind of close this all right the loop out is this has been my Approach I spent the last week uh with uh there's a few execs in the beverage industry especially from Coke I said guys envisioned this world and he was he actually ran marketing for all of coke for a number of years and I and I pitched them on nfts he's already retired and I said do you not see this world and then I kind of explained flow QR code I'm in a stadium you give me a particular image of coke and of the World Cup or a particular event and then you know everything about the consumer

and of course it's just like whoa he's like well what about privacy and I said yeah that's I think the elephant in the room privacy yeah yeah but I I think it's going to come much faster than most people appreciate like there's I'm waiting for that huge marketing convention when all these people all of a sudden say oh wow like Nike's doing interview Adidas you're at a huge disadvantage all of a sudden and then it just yeah yeah all right exactly I mean the two I would say the two things that people are talking about with nfts are this week or it's at least the folks I've been meeting which is probably You Know sample size very small sample size is um much less jpeg conversation and much more

um digital fashion and then like loyalty programs I would say um those are the two like basically just the ability to have a loyalty program that not just like kind of tracks you around like what your activity is but actually your financial activity now for the first time so that's a yeah I think that's what people are excited about so I mean people aren't talking about jpegs because you know the price of Doodles is like 2.7 each right now um like they're just not ripping so that's the other thing that you mentioned just now which I think is so true um when we think about the use we're going to talk about eth obviously this has been kind of when you think about there's not been a lot of news um recently but eth is kind of part of the

center and um I think fundamentally uh when you think about nfts most of them are denominated in each terms and it's interesting from a psychological perspective from a consumer standpoint it's very different to tell someone hey spend a thousand two you know one ethon or 0.25 e found something versus you know oh just drop you know 200 bucks 300 bucks it's like when you think in eth terms it's not ads is not as like it's easier to win the argument right when you think about like oh buy this nft that's going to give you access to a game that's going to launch in two years for that same price of that mint you could go out and buy a PlayStation 4.

or what is it PlayStation 5. and but most people don't think like the psychology around that is interesting and so it further reinforces kind of the use case of you holding eth using eth you're going way back in the day in like 2017 the arguments around the velocity like and like the velocity like what is it MV equals PQ kind of like how we think about like the sustainability of token prices and you know velocity was a huge component around that underlying that is is there any reason for people once they earn something to hold on to it and eth I think just you know I understand Bitcoin brought for all the crowd that's listening right now Bitcoin has ripped what 100 now since the bottom ethereum

has lagged it's up like 65 70 a lot of it is macro inflation related and I believe um but long term if you kind of like zoom out and say what really drives you value I think is utility not scarcity and I think that will probably be the biggest thing that some people may have gotten wrong in investing in this asset class where you're so focused on on scarcity because that's a meme that's what we think about when we think about gold and value and some Collectibles and whatnot but by and large that's like a small subset of the world's I think economy most of the value in the stock market or companies are just providing credible value and yeah I see that happening more

in ethereum probabilistically than any other kind of layer one if you will as a settlement layer yeah so let's talk let's talk about each let's talk about um by the way MV equals PQ haven't heard that was that a was that a bernitski 2017 uh valuation reference right there him and Chris peffer uh from xkkr guys no John John John yeah yeah I remember that that like big old PDF uh I remember when I was working at the uh the The Venture firm I was like look guys crypto is a real thing there's this guy and he wrote a PDF about this and it's the institutional investors take on crypto assets didn't help very much I thought it helped a lot uh at least I

could tell you that was most people have read that in Wall Street and the Bitcoin white paper yeah that's true all right let's talk about uh let's talk about chappella huh let's do it do you want to walk us through it yeah um let's just start by saying Kamikaze I'm sorry if you're listening to this uh it seems that you are not not right about this one my friend but better luck next time so the uh and the tldr here is that um yeah so chappella is um uh just kind of collectively mashed together two words Shanghai and capella upgrades uh basically what it does it is it enables unstaking for the first time since eth staking was introduced in December of 2020 uh so if you remember the uh ethereum merge uh from a little bit ago

transitioned the network from proof of work to proof of stake and that happened about six months ago in September 2020 but for the last six months users still weren't able to unstake their eth um the uh validators had been able to to do things but there was really no mechanism by which uh previously staked eth could be withdrawn so this Chappelle upgrade uh was what it did is it like officially transitioned us to proof of stake and it enabled this kind of end-to-end unstaking flow um and so like yesterday what happened is um or no I think a month ago we we completed the girly public testnet upgrade and this was kind of like the

last month like the final trial before enabling unstaking on mainnet and the big fud and the reason I was giving Kamikaze some there is because the um the like the bear case on eth was that there was going to be this huge unstaking event and it was going to be a big liquidity event and a large portion of people were going to we're going to unstake their eth and um and those people you know have been like this happened just just to put numbers on this there's like roughly 50 model each is state right and so you know that translated into if he has a market cap to 40 billion right now that was what 30 billion 35 36 billion that was potentially up for you know had to be

absorbed in the market somehow yep yeah so I mean assuming assuming everyone withdrew super quickly which was not gonna be like the case right but anyways yeah well there's a staking queue and we can talk about that and yeah um I'm giving Comic-Con some but like we should actually honestly see how this week and probably a little bit early into next week plays out I wouldn't be yeah I don't wanna dance on any Graves yet because they're there's still a little time because there's this staking queue but like I think uh yeah big summary is like massive success um I remember in 2017 people were talking about how proof of stake was coming maybe that year or maybe in 2018 obviously it took a little longer than expected but uh yeah just huge I mean proof of stake is finally complete on

ethereum massive congrats to everyone who worked on this um if you remember the merge I mean I mean I remember sitting on Twitter being like is this gonna work like is this technically going to go through and I think it's a huge Testament to everyone who works on ethereum that I don't know this kind of just felt like a nothing Burger event like it felt it felt like I don't know I wasn't really like sitting on Twitter waiting for it to happen not many like threaders posting about it like kind of it felt like a small news event even though it's so big and I think that's a big Testament to uh the trust that we all have in the ethereum developer Community um and then on the on the asset side like yeah it turned out to be a big this you know whole eth chappella dumb Fudd

was just a big nothing burger and um it turns out that now that staking Works people actually want to probably stake more eat it doesn't mean that they want to sell all their their lock sticky so I don't know just a huge tenant I would call this a big 10 out of 10 success for ethereum uh definitely de-risk from a technical standpoint Point number one um it really closes the loop on on you know transition to purpose take when you can easily uh stake and withdraw so that's Point number one point number two I think the biggest uh the biggest validator in the queue right now is Kraken people should remember that Kraken has to do this for regulatory reasons they I believe they settled with the SEC recently around their staking

program it may be related to this I'm I believe can correct me here but I I sort of think that that's the case um and and so as it turns out not everyone it's a very small percentage of validators that are actually in the queue to withdraw Kraken being the biggest one it's like five six percent I believe the latest dashboard I saw um and you're absolutely right I mean I think there was a huge uh people should remember uh way back the discounted uh distaked derivatives had relative to the underlying Eve and this was a big part of the kind of the duration mismatch right the liquidity discounts you know as you think about um you know you have to lock up your eth

and it was very uncertain when this particular upgrade would happen and so naturally the state these derivatives would have you know some sort of discount right because you're locking it up and now it's sort of uh I think the the you could re in one scenario which I think is a like more likely one uh one is that you're going to see a higher percentage of beef being staked and so I think it will be interesting to observe that number combined with what the staking reward rate is um to become quite interesting you know I remember back in the day um when people think about how new institutions have started to come into the asset class this was like

before the whole kind of bear Market started I started to notice a very meaningful shift in players coming into space saying I don't even there were caused I wouldn't even talk about Bitcoin it was just like tell me about ethereum these are these are Tech focused firms a lot of hedge funds like the Tigers of the world Sovereign wealth funds saying it's interesting like tell me more about is we believe in this kind of being or the internet the staking rate is super interesting and they were spending a lot of time around the usability of eth as an aspect they could be basically kind of like paying these dividends right and like it's a it's an asset that you can compound right you're staking rewards and do some interesting stuff with your staking rewards and so yeah I think the

biggest things that I'm looking at is of course as you said over the next couple weeks how do the withdrawal queue kind of um you know happened like how does that evolve um and are people restaking um the shift from centralized staking players to perhaps decentralized uh options like Lido and rocketpool and some of the other players um and and what that does to the staking um rate uh the the yield right and so I think those are the kind of things that I'm looking at but nonetheless I mean huge success from a technical standpoint um and and we'll see what uh I guess now the question is what are people going to Flat next on ethereum because you know it's coming so we'll see

um agree with all of that I think one small correction is that I don't think Kraken is actually the biggest um each deposit or anything I think it's actually Celsius I know I think it's actually Celsius by the way okay there's the I think I think the 0x Triple E I'm looking at the wallets right now uh just in the queue and there's this one 0x Triple E I'm pretty sure that's a Celsius address yeah maybe yeah I was looking at that when I you know went to sleep and then I woke up and it may have been updated but Kraken was in the queue and it's for 400 million but yeah yeah I mean here's the here's the other side of what we're saying is um the uh the [Music] price not dumping the price was never

going to dump right immediately after Shanghai um they're the 1.1 million rewards unlock over like five or six days I think it is and then the withdrawal queue and the withdrawal queue is pretty limited right now so I think people before dancing in celebration I think it's uh you know we should probably give it a couple days but yeah I mean if we've got to the like the end of the weekend and there's no dump and I think it's a pretty successful nothing Burger event yeah yeah it's always again it's it's sort of a a interesting point because you always wonder like is your thesis right when you're investing your thesis right but then is your timing right or what do you know

that the the market doesn't know and so I it's like the it's fairly interesting I I never try to do anything around these events candidly because it's kind of really really hard to understand Maybe maybe all this kind of you know moves already priced in yeah well I think I think a lot of people in crypto who were like early in crypto got used to news like this actually not being priced in but the more that crypto develops the more that news like this is priced in and I think we're seeing that this news was probably priced in and uh also maybe my left bell curve take would just be that um yeah like when in doubt go to the left bell curve and uh left side of the bell curve and like the left bell curve take

here was that if anyone is taking eth you probably really like eth and uh you're probably like a big eth head and like you're not gonna sell why would you sell your eth right now so yeah yeah and one thing to yeah another kpi and we'll probably should link to a few nice dashboards we've been looking at but um you know on the unstaking component um you know it's sort of like it's a skimming process so it's not it's sort of determined by the ethereum network um so they're not all immediately available because you could make the argument if you're a big etholder there are perhaps some strategies here that you're gonna just stake your ease your your you're going to hold on to the underlying but you're going to be

telling the rewards so um because I think depending on your jurisdiction but my understanding is there's a recent change in the IRS ruling around staking rewards and how those are going to be treated upon a tax perspective so if you like you could Envision a scenario where you know if you're a big institution or whale or even normal retail you're staking you're not selling your eth but you are being you need to cover a tax liability at some point on the rewards themselves right and so that may you know over time have some selling pressure on the reward itself right some people might want to do Arbitrage strategies where they're

hedging ease and just capturing the reward and you know this is no kind of dissimilar between the gbtc kind of ARB trade right and so I'm sure there's a whole bunch of strategies that have come around a whole other set of derivative products around staking rewards that are going to probably crop up the first one being stake teeth is just the first vanilla one but there's so many others that I think over the next couple years will will develop yeah by the way on the tax side of things I'm pretty sure the way it works is that um the asset in like the value the the asset price going up is taxes capital gains and then the income that gets spit off from from staking is taxes is taxes income I think that's yeah yeah income I believe there's we were actually a big

part of this was something that we spent so much time oh back in 2018 and then that team ended up going out that the lawyer that I was working with Evan ended up going to coin buy some trails and coinbase uh but the that was a formation of the proof of stake Alliance and we hired this great Professor from I think UVA that was a tax Authority I mean added to like really just kind of craft some tax um policy around it but I think there's been still not very clear I don't know but anyways yeah yeah um all right looking at looking ahead so um so Chappelle is live on the network withdrawals are being processed uh next next major feature I think is

eip4844 right as part of the uh Duncan Network upgrade which is hopefully a 2023 thing and what this does is uh it increases the scalability of Roll-Ups on ethereum so excited excited for that to come out too yeah yeah definitely yeah um anything else if they're in front that we should be covering um no I don't think so yeah we'll keep everyone posted and hey so we have a subscribe yeah uh we'll link to there's a there's a I think the best dashboard there's this metrica dashboard we'll

Link in the show notes velora is the ultimate wallet for exploring the cello ecosystem easily manage over 50 crypto assets and over 30 different dapps for swapping sending and managing your assets all from your mobile phone the world is mobile first and velora believes that crypto should be too their global app is localized in over 13 different languages and over 100 countries giving crypto explorers like you a simple and accessible way to send payments purchase digital goods and access a suite of decentralized financial services you can access over 30 different dapps all from your mobile phone one of those daps is Halo fi more than 15 000 people are using Halo 5

right now to save millions in crypto through custom saving challenges go to Halo 5 you can earn badges Min nfts and maximize your savings with Halo 5 super cool to check it out download the app and start exploring at velor app.com forward slash Empire that's velora b-a-l-o-r-a app app velorapp.com forward slash Empire I think we have the multi-coin episode coming out on on Tuesday with Kyle and Tushar so this was the first time that they spoke publicly about just like FTX blowing up Solana getting hammered uh you know their their fund uh got got crushed pretty hard I know you were one of the First Investors in the multi-coin

I don't know fund one or fund two back in 2018 or 2019. I know you've known those guys for a long time uh they're Troopers they're smart good contrarian investors uh any any takeaways from that podcast yeah you know I'll tell just a story of my relationship with multi-coin you know I reached out to Kyle when I started reading his his blog posts um you know at the time I didn't agree with everything uh and then I I met his partner Tushar and look for me I was investing even at the time heavily into space And so there's no real reason for me to kind of um invest with a manager unless I believe in my thesis for these guys was these guys are probably going to capture

something that I don't right and as an investor you don't want to miss major major Trends and lo and behold you know I think they they were very right on Solana um and for and it took a while for that thesis to play out You could argue that you know as much as there's been huge price fluctuations in all of crypto and they're fun you know is is down perhaps for some LPS but they're they're that's what I liked about them and you look I think there's always like this thing that I've wondered not just multi-coin specifically we touched on this in the episodes people talk about being a constrained investor and I think two charts said it very well which is

as a contrain investor being a contrain for the sake of being a contrarian makes absolutely no sense because you make no money generally speaking usually unless you're right of course but you need to be a contrarian and also just fundamentally think what am I seeing what do I know that other people don't it's sort of the Peel Field the Peter Thiel construct which is what am I what what is non-consensus today which makes you a contrarian but then you will be consensus over some period of time and I say some period of time because that really also matters a lot in this space particularly in this space because you're structured as a hedge fund and your LPS might not be as patient right at the end of the day a fun has some sort of life cycle right and if you could be right about a thesis in 200

years when no one cares you can be dead bites right so as Mark you know as he said you know was it Keens that said uh you know you could you could stay the market could stay irrational more than you could stay solvent or something like this so nonetheless uh no I think it's a great episode look those guys have like it's not easy to be a fund manager especially in crypto with all the volatility and you could deliver great returns and then you know it's um it's it's a challenging environment I mean you have to it's not we other have we had the other episode which was talking about uh you know setting up a font it makes really compared to setting up a hedge fund and Adventure Fund in

crypto like there's just so many other hoops and service providers and things that you need to be focused on so yeah look I mean I sympathize with the guys to some extent you know they they've gotten a lot of criticism over the years you know obviously they're not afraid to be outspoken but I will say you know when you talk to a lot of other portfolio companies they will say they're perhaps one of the most helpful investors that we have on our cap table so um I still remember the last thing I'll say that I still remember one thing that really stuck with me that Kyle said uh in a prior Empire episode was he said when we make an investment one of the criterias that we ask ourselves is if this guy calls me on a holiday vacation or Friday night or set

over the weekend am I gonna pause everything and kind of work um with them and so yeah it was I think it's it speaks to kind of their and my own philosophy and so yeah anyways uh I thought it was a good episode um there's other we there's an interesting discussion around um kind of their thesis I asked them hey what are the kind of major use cases that you envisioned going forward because we are in this state where people are kind of questioning the use cases of crypto and he brought up obviously Ai and crypto and uh you know of course A lot of people are going to read into that and say oh you know here we go you know but I think he he goes through kind of three

use cases around kind of the combination of the two that that makes candidly some sense um and I think it's probably worth digging in deeper into future episodes uh so yeah that's kind of my long take I don't know what you you think yeah did did uh no I I liked it I'm uh I mean we asked him some tough questions on FTX uh we did I don't think they realized that the big chunk of the first part was gonna be folks uh so much on that but uh no that was a good episode it's got me thinking about l2s I mean like they're um I mean they're like really I think I think it was too sharp who said any L2 with its own token and uh decentralized governance will eventually vote to

become an L1 because token holders are greedy and the market shows that l1s get a significant valuation premium uh also that you know l2s are not viable businesses uh I think it's just like you know like in a world where l2s are really hot right now like everyone's talking about um arbitrum optimism you know all these kind of ZK Roll-Ups and stuff like that like it's just nice to I disagree with Tushar here but it's good to hear the other point of view yeah dude I mean I've had really interesting intellectual discussions with these guys I remember pitching them on D5 and similar they reached out you know early on and they they had it just to believe that it was like in a crew much value or you know default was a

thing but how you invest in it was kind of we kind of discreet on that um one of the things that they said about l2s which I think is an interesting kind of thing discussion to further have maybe we can invite Stephen from arbitrum and opencis and just them as well and others is this idea that an L2 eventually bumps into the same issues of an L1 from an architectural standpoint that you know particularly around the sequencer and the kind of the leadership kind of round-robin methodology right which is your essentially uh that was their argument and which leads us yeah which leads him to say Solana is just a fundamentally better architecture

more scalable and you kind of it's just a you know it from first principles like you could see it Solana really kind of scaling versus l2's eventually reach this this bottleneck yeah that is no different than what you're seeing in L1 context not so that was their take I don't necessarily agree with that but you were saying uh I actually do agree with it in a sense but here's the here's the my like bear here's my um here here's what I think people are missing with l2s is that just decentralizing the sequencer is a freaking like it's so much harder than everyone realizes and like I mean let's take it back to the chappella conversation you remember these conversations in 2016 and 2017 where

like proof of stake was coming next year and lo and behold proof of State came but it took four or five years uh longer than people realized and I think that will be the L2 version of that is that decentralizing the sequencer doesn't take one year that's like a I don't know we got to have the like Astra or the espresso people on but like that's a four or five year thing I think I think it's a really hard thing to do that um so that's and and I think but I think the and the thing that could push people to decentralize the sequencer faster and really prioritize it is not efficiency of the network it's not any actually product related thing it's probably regulation we'll we'll force people to decentralize the sequencer faster than they they realize they need to

yeah on those two points one we talked about base to some extent and I think they were interested in that as much as they are not very particularly bullish on l2s pretty much everyone we've talked to at this point is of the mind that bass which is coinbase L2 project is very bullish for the space for an onboarding perspective so that was Point number one point number two is I asked him about a fairly controversial take that he's had which is and this is Kyle he tweeted something which is he doesn't care as much he doesn't prioritize security as much as other things right now and I asked him down and said well because obviously I I fundamentally

believe that security is the most important thing otherwise there is no reason why you should be in this space we can't get security right then none of this matters the immutability properties uh you know the censorship kind of resistance properties like I feel like security is is the most important thing focusing on security to your point around why it takes so long to ship infrastructure in crypto is getting security right is a very hard thing and not compromising on security which by the way security means a lot of things to different people but when I think about security is do you have the properties of like immutability of you know that the networks you know fundamentally secure you can look at the

Nakamoto consensus you could look at the validator set like this idea of like can the network be attacked why because when you have value on chain you want to make sure it's secure and when you try to do transfers when you're interacting these protocols that they're secure um it's a lot of things right but fundamentally I I think Bitcoin is when we think about the pecking order like Bitcoins are most secure because the most Lindy effect it's been around for a while and then ethereum second or not and then everything else kind of is still in progress right uh we talked about reorgs which you could argue that there's a process and it's like sometimes reorgs are blown out of proportion but I I fundamentally this is just my personal opinion when I see that

it gives me pause to interact in a network that consistently has reords not just Solano you have polygon you have others that have this issue um it's slowed up it like it's a massive restart to the network and it could cause wreak really a lot of habits across them do you find some other kind of places and so theorem just doesn't have that ethereum used to have that back in the day uh people forget um so all I'm trying to say for this take is look I think that it's going to be pretty interesting because if you look over the last 10 years people can say look well ethereum also had this problem right of reorgs and it took so long to ship but I think the benefit that ethereum had was there was not really much competition

around at that time at that time and it really kind of solidified the Mind share with the uh being kind of the primary funding mechanism with icos and then people just sort of stuck building on ethereum For Better or For Worse now of course you have all these competing kind of l1s and you're wondering like over too short and kind of said well over a 5-10 year Horizon you know people are going to talk about Solana and some of these other networks and like you know Bitcoin has a head start on ethereum and it was like a seven year Head Start that that Gap over time is negligible it doesn't really matter right but I I I I think it's it's subtle but I think ethereum continues to be the

dominant mind chair it has continuously kind of shipped um and I believe that perhaps some people are really stuck on this idea that it has been a slow organization it has been slow to upgrade the road map has been super delayed at times but I've I think that this particular upgrade is a new era in the ethereum development cycle where you're going to see faster Cycles more precise and just give greater confidence of as an investor as a user as a developer you really pay attention to which is the execution risk the the kind of the the infrastructure risk that a network has and I I you know of course people may read into this and say I'm you know I'm

biased right I I most you know of my projects that I'm an investor on are based on ethereum and I think that needs to be the case like developers just have greater certainty right uh that's not to say that solano's dead but still you know I think that from an infrastructure standpoint do you agree with partially that you know there's still so many things that need to be figured out on the scalability front and the attention will be on l2s and the sequencer I think that's going to be a major Trend as we think about narratives in this space I think that will be really front and center because it ties into so many things as you said uh from a technical standpoint from a scalability standpoint and fundamentally also from a regulatory standpoint so that's I think probably something that um over the next six 12 months is going

to be kind of a greater kind of focus point in the industry yeah I agree I agree I'm I'm much more bullish on Solana than you are um but we I like I'm I'm I really like Solana I think that I think this new Narrative of like things that are only possible on Solana like I'm excited by that I think that Solana has this huge advantage of being able to see all the mistakes that ethereum made and like get ahead of those mistakes which I mean I've seen for Block works as someone who's like a little later into the media game seeing the mistakes that a lot of early crypto media players made like I've seen how valuable that can be um for a competitor and so um I don't know I I I like just a lot more than you do

um but I I want to be I want to be open here I I like Solana for that reason as you said because they're not afraid to try a new stock to me one of the things that I always point to to folks is look at the Solana phone fundamentally that kind of thinking I played with it oh did you well maybe in the next episode is there anything to do right now is it or is this like a first version of the smartphone that had flow internet and no app store or like the App Store was like very limited uh another I mean there's a it's basically a Samsung Galaxy with a Dap store complete with a zero feed App

Store completely built in so there's like oh yeah I mean imagine a Samsung Galaxy with a bunch of crypto native apps completely built in with um like really easy to use thing things like marinade and orca and Phantom and things on on Solana okay it's pretty smooth yeah look I'm not I'm not like I'm I'm not a maxi I'm just stating facts here in terms of my application historically has been heavily skewed towards theorem based projects um but I've invested in other things like you know that I've been public about near Solana um and and solana-based projects and you know I think uh I'm not of the mind that everyone's

blocking Solana and billing elsewhere um and and this will be a true test of the resiliency of the Solana community and network I think um you know I I I find we've had Anatolian a number of times and Ben as well the least BD and so you know I I it's very difficult to be in their position because I think they get disproportionate amount of in the industry right kind of like coinbase but um we need these kind of folks to like really push different kind of Solutions right because if you I believe that we're so early from a infrastructure phase still this asset class that you need to try a lot of other

you know design choices for the space unfortunately you can't really what I will disagree with Kyle is you can't move fast and break things because moving fast and breaking things in crypto is not the same as moving fast and breaking things in web 2 land like it's it's the pain is much like the damage can is much you know more real I guess when people lose their funds or protocol gets hacked and whatnot so that's the only thing that uh I'm I'm cautious around let's talk about um I just want to get your um your uh your thoughts on bitcoin so bitcoin's over 30k and eth is over uh over 2K Bitcoins up nine percent in the last week eth is up

eight percent um yeah Bulls are back on Parade um curious how you're thinking about this as this uh are we coming out are we on on the other side of the bear here do we are we gonna go touch those are we is Bitcoin gonna hit 20K again are we going to see eth down in the like one 1K range again like where are we how are you feeling about prices right now well as you know I mean prices are there's a lot of noise in prices in the short term um I would argue that we probably bottom here uh and we've bought them for a while now um you know I I I I I have noticed that you know I sort of get really excited about Bitcoin um you know last month

um and and yeah like a yeah probabilistically I probably think we see so go to my head are we gonna see what are we going to see first the 40K Bitcoin or 20K Bitcoin I think we see 40K are we going to see 3K East or 1K East I think we see three KES but like probabilistically there's higher odds of seeing that there's obviously a number of things that could derail at right and scenarios macro is still important I think but you know there's some inflation data that came out yesterday that's not as you know not as bad um I don't know I'm just kind of speculating here uh for for about entertainment purposes I guess but look

I feel very the thing that the thing that gives me really conviction is so many other stuff that we talked about nfts being a huge kind of like entry point for people this upgrade for ethereum is critical the development that's happening in the Bitcoin Camp around like exploring with you know an L2 kind of scenario there was um what is it David Marcus ex-facebook Libra guy just announced kind of his project right around supporting kind of lightning and payment transfers and that those are the things that get me really fired up about you know where we're going you know we have another kind of energy crisis or macro blow up or another bank run

sure that's going to impact this asset class for sure um one of the things that I I would want to talk about another episode is who is the marginal who's the incremental value right who's coming in like how much of that is just internal rotation where is this new kind of pockets of liquidity coming from um right and so yeah anyways uh the market the general Market's also up a lot so you know you're still kind of correlated to that right um so anyone's best guess really what do you think look inflation's cooling pretty tough for the bed fed to raise rates much higher stocks are up central banks just came out I was reading some Reuters things central banks are buying more

gold than they've ever bought at all-time high bitcoin's above 30k eth is above 2K nft NYC right now is bullish eat Tokyo coming up ECC coming up in July eth withdrawals were successful feels pretty tough to be bearish I mean long term for sure yeah you know this is Legal Financial advice but look let's just for once enjoy the weekend it's been a huge milestone for ethereum um no no well what I'm saying is like you know it's been a great week for crypto I think and so let's uh let's take it all in uh for sure uh from a long-term perspective I think this should be one

of the key Milestones so anyways great episode uh not a lot of news but an important Milestone nonetheless and we'll be here next week right sir see you guys Tuesday for uh multicone app foreign [Music]