Inside Sei's Supercharged EVM Strategy | Jayendra Jog

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Empire we are joined by uh Jay co-founder of uh say Labs Jay welcome to show man yeah longtime listener thanks for having me on man long time listener first time uh caller love it uh good to have you here we have spoken a lot in um uh kind of just like private one-off conversations about like your thoughts on the industry and I'm always I always leave those conversations um questioning more things than I did going in so I wanted to have you on the podcast to talk about some of those things but before we do uh we are recording this on May 13th uh Robin Hood has shut down the buy button for GameStop GameStop has been halted like seven or eight or nine times already uh it's up I think 100% Today you spent some time at Robin Hood um before say and I just I don't know I

just love to get your take on this whole Robin Hood situation what do you think of it yeah I mean so for context um today roaring kitties uh roaring Kitty roaring kitties yeah yeah one of those yeah so there's this guy named Keith Gil who is like one of the initial people who like helped get the entire game soft get started uh he just had like a deep fundamental belief in game stop as a stock back when I think it was trading like $5 per share back in like 2019 or 2020 and he just kind of held on to it and like um he wrode through it and uh basically what kickstarted a lot of activity today I think is because uh Keith Gil he like tweeted for the first time in like uh two years uh three years something like that um and that just

made people go absolutely crazy so right now there's a massive pump happening uh for GameStop the actual stock and whenever you start seeing something like a meme stop that starts to do well um it results in short squeezes as well um because there's people that are like sophisticated investors that are like oh this stock is overvalued um and they're like betting against the stock and when the stock starts going up in value a lot there's this concept of a short squeeze where these people that are holding short positions they need to basically buy back the stock to close off their position once they're on enough of a loss so when they buy back the stock that lead to increase sell pressure or increase bu pressure um which just results in the stock doing even better so it's it's absolutely crazy um and it's just really I think exciting to see

uh to see all this playing out um I used to work back at Robin Hood and when this happened as an Insider like from an engineering standpoint was just a total mess because whenever something like this happens it's just like super chaotic internally because there's always like new production issues that come up um but if someone just watching I think it's uh it's really magical to see like normal people winning and like these institutions that are starting to take losses yeah I I don't know who's out here shorting GameStop right I'm like there's million other stocks you can short like here shorting this stock that can be moved like this so you were a software engineer Robin Hood through I think end of 20121 if I remember that correctly so you saw of the some of the craziness play out like what happens behind the scenes on a day like

this yeah behind the scenes at Robin Hood from like the engineering side there's like a bunch of production outages that used to happen um it's interesting because Robin Hood previously um used to be architected with like initially it was a monolithic system where there was like like just one primary server that was like one primary service that was handling all the traffic um and then from there it became more of a microservice architecture where there were a bunch of different components they all needed to interact with each other um and this transition to being more of a microservice architecture it actually resulted in a ton of issues um and that's why like whenever uh we ended up having any period of like a spike in activity there just be a ton of like just engineering issues and um incidents that would happen which I think it's

actually an interesting comparison to like monolithic versus um modular CH which you can probably talk about in a bit but yeah from engineering side it's just a complete mess um and then from I think more of the actual business side it's really exciting because days like this is when you end up having the most number of new users that are creating accounts the most amount of activity that's happening as well so days like this are kind of just uh I think some of the Days end up defining the company's Direction so I'm I'm sure vad beu and the rest of the team are just super happy with the activity happening right now yeah yeah especially week or two after they uh of clap back at the SEC so anyways let's get into SE man so uh say sits at this like interesting intersection um of this kind of like L1

L2 debate I would say of the infrastructure debate so I remember when you came into the block work's office it must have been like fall of 203 and you were kind of saying like um there's like full monolithic over here there's full modular over here and like actually say kind of sits in in the middle a little bit um I'd love to get your I know that was several months ago and I'd love to get your just updated view of like where there's like monolithic versus modular L1 versus L2 like evm versus non evm like there's all these like different debates that are happening where does say fit into this whole conversation of course yeah so maybe just going over sale briefly for listeners that don't really know much about us um say is the fastest FL one right now uh sav1 went

live in August of 2023 so however many wants that is like nine months now um since it went live um and it's just been the fastest chain in terms of finality out there um the biggest point of feedback that we've gotten from developers though uh in the past nine months is that if you have a chain without the evm being supported it's exceptionally difficult to get developers to build on it um and that was the inspiration for sav2 which is the first paralyzed evm um and in terms of kind of why we decided to build this like just from these conversations we've had with developers there's like one core idea uh one core point of conviction we've developed which is that the evm is here to stay um because every single Crypt native

engineer right now essentially all of them are using the evbm uh there's some people that are building on Solana's runtime sea level um but outside of that there's very close to no one that's building on move CMM uh fvm or any of these other alt VMS and at the end of the day the evm is not just a Tex stack um it's honestly much more than that uh it's an ecosystem it could even be compared to a religion in a way uh but fundamentally it's extremely difficult to get people to leave the evm and start building on some kind of new execution environment um so rather than trying to build an UVM and like trying to get adoption over there which I think is extremely difficult like the only way you can do that is by pulling in we have two developers and then have them uh

grow at a faster rate than they would by building with the evm um it's much more effective to support the evm and improve whatever shortcomings that currently are with the evm and the biggest limitation of the E virtual machine right now is is a lack of throughput so throughput you can think of it is the number of transactions that are being processed um at any given for any given unit of time uh people typically talk about it in transactions per second I think now there's like a growing uh push to start thinking of it in terms of like gas per second um I I personally don't actually think that'll start getting that much adoption but we'll see um but if you think in terms of transactions per second um aeml one and any essentially any chain that's using ethereum data availability right now it's like any

ethereum rollup as well um they're not able to get more than around 50 transactions per second and this ends up leading to an extremely restricted design space for developers um because if you can only build with uh 50 transactions per second um then you have to make a bunch of kind of shortcuts you have to make a bunch of design tradeoffs that result in you being able to build something um even if that's not being built in the best way possible um one example here would be automated market makers which don't exist in traditional Finance um but they do exist on chain because they fit uh the limitations of what the eeral machine has to offer um and that's why we decided to start working on building the first paralyzed evm um because paralyzation is one of the mechanisms that allows you to get

greater throughput um and we can touch on that in a bit as well but when you do end up having paralyzation uh you're able to increase the design space for developers that are now able to build entirely new types of applications um so we anticipate to get roughly 100x Improvement in throughput on what the evm currently offers um that's why I think the EV uh c2's ebm has been particularly interesting for devs um in terms of where we stand on this entire landscape uh say is an integrated chin in the sense that it combines execution settlement and data availability all into one uh one chain and the reason that we chose to make this uh make this design choice is because with sa2 the

biggest thing that we care about is performance and Integrated Systems have by defition the best performance um if you have let's say three separate components to the stack um all these components need to interact with each other and that adds communication complexity so if you were essentially to take some kind of modular system combine all the parts uh you will end up having better performance that's exactly what an integrated chain is and in terms of how this industry is going to play out um the sense that I have is that there's two ways to scale the EVN the first is through this high performance route which sav2 is going down uh the second way is through a modular approach where you encourage experimentation and give people dedicated block space I think there's a ton of use cases in which

performance doesn't matter but having dedicated block space or being able to control your infrastructure does matter for teams um from a cynical standpoint I think a lot of teams are going to be enthusiastic about that because they want to launch a token and having their own infrastructure lets them do that um but even from like a more product focused standpoint I think it does end up being better because you can have your own dedicated block space you can control me you can control the user experience there doesn't end up being State contention um so I do think that allows you to have um like there's a very clear reason why people would want to build Mo modular change as well let's walk through um there's actually this David Phelps tweet said chain I dislike blast chain I think is underrated radic chain I like ethereum Salon Bitcoin

chain I love arweave chain I feel most myself in Cosmos chain I dream of building on monad say bear chain and chain I still need to try please God no more um so I actually want to maybe compare say to a couple of these and the first one being monad so when I think the industry thinks of the two like best parallelized evm chains that are being built right now it's monad and SE I would assume that's what people think how are you guys different than monad yeah I mean kly I think the way so first of all I think their team is in a fantastic job um I think especially in community building that's probably one of the like I I think that a lot of teams in crypto

um they focus on building good Tech I think there's very few that are able to build exceptional communities so I think that's one of the things that they've done a really good job at um in terms of how I anticipate that Dynamic to play out like we are still extremely early and there's plenty of examples of um Dynamics like arbitrum optimism or like AP TOs and sweet and I think this is going to end up being one of those um one of those situations as well where there's essentially two Market leaders and both of these are going to keep innovating drawing in good teams and being able to get activity to happen um on chain um in terms of the differences it's difficult for me to speak about the technical differences because there really isn't that much that is publicly available um like I I've read through

their dogs a lot of the stuff around like how their databased optimizations work are still pretty opaque to me so I can't really speak much about that um in terms of the user experience it should be the same uh because both of them will be supporting a backwards compatible evbm so developers will be able to take stuff that exists on ethereum L1 and then deploy it to say deploy it to monad and just have it work um so I I think probably the bigger difference is going to be just around the philosophies that the teams have um in our case we're very much a Silicon Valley team like me and my co-founder we both grew up in the Bay Area and the Silicon value mindset is definitely one of Chip fast and then iterate um because that's really the only way that you can grow a startup

it's especially in Silicon Valley I think that is the resounding ethos um ship fast collect user feedback and it it and that's exactly the approach that has been taken from the very get-go would say um and I think that approach does lead to you being able to launch faster and then be able to get uh more activity and kind of more adoption happening in a shorter window how do you uh how would you stack say up against some of the l2s like um let's put arbitr and optimism in this bucket yeah I mean say it's just going to have better performance like I I think that the modular approach ends up being good for certain things um I think like the op for example is a really good way for teams to start building their own dedicated chins um but at the end of the day the biggest thing you care about

is performance um and you want to have a 100x better throughput because you want to not really fit into the kind of limitations the evm currently has to offer um it's a no-brainer to build on something that is higher performance and that's what I think is the industry matur like um definitely by the end of 2025 probably by the end of this year as well um paralyzation is going to start becoming kind of a default uh there's no reason that you wouldn't want a high performance chain if you are able to get it and that's why I think that essentially every single evm implementation that is not paralyzed right now they will start moving in that direction if it fits the data availability and bandwidth constraints um that the architecture is going to be supporting so by default every L1 I think will start supporting uh

paralyzation and I think if you're not using ethereum for data availability then you'll start moving towards paralyzation as well H what do you think about this idea that maybe the counterargument to that if I was that arbitrum or optimism or something like that You' say that um like in in I'm going to venture outside of my full understanding here but like in parallelism and there was this tweet thread uh by the uh I think I think her name is Rachel she's Tech lead at uh I think at arbitrum she said in parallelism uh 10x the cores only cut some costs when workloads are parallel but this in reality in crypto this rarely happens right like daps aren't parallel everyone wants to Mint at the same time like claim air drops Etc uh and that web 3 like crypto apps are not

like web 2 apps right and that's why historically there's been like minimal opportunities for parallelism um among like eth's historical transactions I'd be curious like I'd be curious how how you think about that counterargument yeah so I mean I think that's just predicated off an incorrect assumption um there's been analysis that have been published by Ren from Electric Capital Paradigm as well only around 20% of transactions historically for THL one um have touched the same state So 20% of transactions might be touching the same state everything else can be paralyzed so I I think in practice it actually is just by default very paralyzable um and you are able to get pretty significant performance gains from that um if you add on other things such as making

database optimizations um you're able to get even better performance so I do think there's actually pretty substantial amounts of performance gains uh that you can get uh last one here save or Solana how do you think about those yeah so it's interesting because one mental model that people have brought up about dv2 is kind of like Solana except having um the evm as a first class Citizen and I think that ends up kind of being the biggest differentiator over here Solana is Catered for a different type of audience than save2 is um in sa 2's case we are building for the evm developer in Tana's case they're building for I mean honestly it ends up being a web two developer that then needs to start building um on any chain that has an lbm so I actually don't even think of saying

salana as being competitive I think they're just catered For totally different types of um Developers let's say you're sitting down with a really good founder and uh he or she is saying look Jam thinking about building on build I'm building a Dap I'm building some sort of defi app or something uh I'm building a DEX let's say I'm down to say versus salana how do I make that decision yeah I mean I think a lot of it depends on um the I guess their belief in the evm like most evm developers like most crypto native developers right now they are very reluctant to move off the evm and it only ends up being for very strategic reasons they would move off um

but by default they would choose to build on an ecosystem that supports the evm um instead of going to an entirely new execution environment and I mean the fundamental reason for that I think it ends up being like multifaceted uh one part of it is purely technical um from a technical standpoint if you're already familiar with the quirks at the evm um it's much easier for you to write safe code uh if you go to a new execution environment you write some smart contract over there and then you make even a small bug in that that can like result in your entire project getting grained um and it ends up being just kind of an existential risk in a way um beyond that there's this entire like ethereum alignment side of things where fundamentally people kind of think of the uh evm um in a way as a religion and

it's really difficult to convert someone and have them uh move off and I I think we've actually kind of seen something playing out something similar play out with JavaScript as well back in the day uh like 1990s was when JavaScript came out there were initially a lot of different contenders um none of them were really able to win and the JavaScript just started getting more and more mind share more and more tooling and developer audience built up around it um and it's been really I mean at this point it's been impossible to get people to move um we assembly came out as well back I think in like 2017 or something and even that wasn't really able to get people to move off so I don't think it's like better Tech that's going to make people move off the evm um it's going to have to be something

completely uh different to force that transition how does that like religious aspect around a a technology around an ecosystem Drive how you think about building community so zooming out like i' would love to just hear like you're you mentioned monad has like good Community like I'd love to just hear like how you as a founder of one of these protocols think about just like the importance of community how how you build community like how important is a narrative like yeah just take me behind the scenes here that's an interesting question so I I fundamentally think that with any open source project Tech is never the differentiator because anyone can just take your source code and like copy it I think maybe Mon's not the best example

there because it's close Source but I think for every single major project that you see right now like ethereum salana you can go and take ethereum and Fork it but you're never going to have the same type of outcome as ethereum does just because there's all of the Mind share that's already around the initial project um so I do think the the stickiness for projects ends up being around the users um that are there the liquidity but even liquidity can move pretty quickly so it just ends up being around the belief that folks have in that ecosystem um so that's kind of what I think about for um like what makes people choose one ecosystem it ends up being like the Mind share the belief that people have um and the excitement that they have around one particular um ecosystem and I think that you don't

really see this until after the project goes live um I think that historically there's been a lot of projects where there's a huge amount of excitement before the launch happens because there's a lot of people that are excited for perhaps an airdrop or it just ends up being very hyped up um I would say that Community is really only there probably six months after the launch happens um and that's one thing that salana has done exceptionally well like salana has a genuine Community a lot of the more recent launches that have happened for perhaps l2s that are maybe not as like in the Limelight anymore um they end up having a ton of excitement before the launch and then after the launch people have gotten their air drop and then they move on to whatever the next met is so I I do think think it's

something that you really need to be focused on after the launch happens because before the launch it's really just um one way to think about is it's often times just your Farmers what's the strategy to building a like how do you build your community how do you what like what do you talk about internally at your Tuesday 2 pm meeting when you're like all right what's our what's our community strategy here like how do you do it so I I mean I personally am just much more focused on the tech there's folks from sa Foundation that think about a lot of these questions um but I I think the way that things have played out in st's case I can just kind of go over that um it ended up being I think multip multip kind of approach so the first thing is there needs to be a

very clear narrative around what you're building um with sab2 the first paraly evbm I think there was that narrative around exactly what the product is and I think a lot of projects honestly they struggle with even having that Clarity around like what that ecosystem is going to be uh building and like having like values that for example in the case of say it's around fast iteration being able to move quickly um and collecting user feedback as quickly as we can um from that I think what we observed was that there were a lot of people that got really excited about stages completely organically um you could see this on the timeline back in like December for example where there were several people like I think um like anom Saka like a lot of uh people that were just really

excited about the ecosystem uh and then this led to more and more people coming on getting excited about the project overall um and then once there's uh once there's interest from normal people that's when it becomes much more strategic for like developers and other folks to come on and it becomes just like virtuous Loop where you have normal people that come on this leads to more people that are building which then leads to more normal people to come on so um I think in say's case that's how that was able to click and I actually do think say is probably one of like the top 10 communities in crypto right now um and especially after the V2 launch I think that could become even more um it could grow even faster once there's like just new and new types of evbm applications that are deploying

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doxyz I would really recommend going through the whole onboarding flow just to see what the future of crypto can feel like and what it probably will look like in the future go on board nn. Kinto doxyz let me know what you think and if you want to chat with their founder rone happy to make the intro hey everyone Jason here I know you've been hearing a lot about the intersection of crypto and Ai and that's why I'm really excited to share our newest partner and sponsored Empire scale a high performance modular blockchain that's revolutionizing gaming and AI with zero fees and instant finality scales unique architecture allows for massive scalability and has already saved users over 6 billion in gas fees the five main

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Network that's at scale Network big thanks again to scale for sponsoring Empire maybe uh similarly like how how do you think about building a developer ecosystem I've we you know just on some of the calls that we've had like it does feel like you think about building the developer ecosystem a little more like building a like how a SAS company almost thinks about building a developer ecosystem but I don't I don't know if you would categorize it like that yeah so I if you kind of take a step back into think about like what a blockchain is a blockchain is a piece of technology that you then have two types of people that are using uh one of these people is developers that are building projects on it and then another group is users that are like the end people actually using it um as someone Building

Technology the group that you have the most control over is the developers that are building on top and the developers are then what lead to more of these like end users that are actually coming on um so fundamentally you are a SAS company in a way if you you have that mental model where you're building infrastructure and then there's going to be developers that are uh the customers then buildt on top of you so you ideally want to be uh optimizing to improve the developer experience as much as you can and I think there's like some things that you like from a developer standpoint fundamentally they really just want to build an ecosystem where they can win um part of this just ends up being like users and liquidity which is why building on ethereum L1 or salana like uh that ends up being a very good

choice for a lot of developers because that's where they have the highest odds of success and in like in a where there's already the most momentum in that ecosystem um but then there's a lot of other things that you can control uh that makes it better for a developer to build in your ecosystem uh so from like one aspect of developer experience would be like optimistic cism uh versus having uh developers need to Define their dependencies um the way that several chains like for example saana have calization be supported is developers need to Define all the state that every single one of their transactions is touching um and this adds more complexity to the developer experience um optimistic pration which is would say uses uh in that case all you need to do is just write the smart contract you

don't need to think about prism at all and then the chain is just able to handle parallelism under the hood so with these differences in the developer uh kind of the developer experience it does become a much easier process to get developers to come on and start building so I think that uh you do want to make it as simple as possible for developers to build and then in the future I think you start seeing these developer ecosystems start kind of spinning up to a large extent organically like once there's some really good developers to come on this encourages they kind of become magnets for new developers to come on and if there's like clear signs that an ecosystem has momentum that results in it just being like positive EV for a lot of developers to come on and uh start experimenting there yeah yeah it's interesting one thing youve

started to notice is like some of these consumer apps actually boost a chain more than like anything else the chain can do like I don't U like fantasy with blast or I think Bas really took off from I mean forecaster but even before that friend Tech um pumped out fun is having a big impact on salana like how how crucial is that one app to the success of an of a of a chain I think it is the single most important thing that matters for the long-term success of a chain if you don't have any color applications your ecosystem will fizzle out probably after the first year or two after the launch um I think there's a lot of projects that have come out recently where the EOS kind of fizzled

out like week two like after the air drop happened after the initial hype was gone these ecosystems have fizzled out in a lot of their cases I don't think they're really ever going to recover um I think if you're able to get at least like even just one killer application built on some kind of infrastructure um that infrastructure is going to be like staying around for some time and if there's a history of like killer applications coming and launching on it on some specific chain I think that chain is probably going to be one of like the top five or seven uh just infrastructure projects out there and that's one thing that I think salana has done exceptionally well like there's always just different types of killer applications that are launching that are leading to a ton of excitement and a ton of effectivity and most chains are not

able to build anything like that which is why most chains have not had the level of success that fana has had how do you get that how do you get that developer like how do you yeah how do you I mean I guess how much of your day has spent thinking about how do I find that one founder who's it's it's your job almost becomes like Venture where it's like you can take a hundred bets on people but like one one compan is going to return your fund like for you like if you go get 100 Founders to build on sale like one person is going to return the fund essentially exactly so um from the technology standpoint it's kind of like a SAS company from more of the commercial standpoint ends up being more like a VC firm as you mentioned um that's what a lot of folks

at T Foundation spent their entire day thinking about and it exactly is as you said a VC firm you want to find like 100 potentially great Founders um and I I think you kind of have to there there like two playbooks like one Playbook is where you just try to find every single founder out there in the world even if they're bad you just try to support them and then maybe they'll work out um another approach is where you basically just filter out and only get the people that you think could be phenomenal Founders so if they're like a b bti or CER founder you don't really even support them um and then from there you just help these like ater Founders um in whatever way you can and then some of them might end up being successful um based off it seems like the approach

where you just focus on the top tier Founders um and really support them is is the one that will be more effective and it does end up being like a VC firm where you want to find a good number of top tier Founders support them in any way that you can and then afterwards a small number of them might end up building killer applications and if they do well that's what leads to the outside returns outside returns for ecosystem yeah do you have a sense of what that could be for SE like do you think it'll be a consumer app will it be some like massive Decks that does something new like what what's it going to look like yeah in general I think that consumer applications in web 3 are similar I mean applications that lead to activity in uh web 3 will be similar to

those in web 2 uh things that lead to activity will be consumer applications almost by default because these are applications that people can come and use for where it's worth I also count a DEX as like a consumer facing application um and if you look at the kinds of things to take off in web 2 uh one way of explaining it is that they end up all being tied to some cardinal sin uh if you look at like Robin for example it's tied to Greed where people go and trade on it look at tnder it's like tied to lust or something um so I think a lot of these applications they have a really acute feeling that they make you feel and I think it'll probably end up being similar um in crypto as well so the way that I see things playing out is initially it'll probably

be tied like uh across like essentially every ecosystem what it seemed to be working so far as things tied to um uh speculation and that ends up being the spark that leads to a lot of other types of applications that come on and start building in that ecosystem as well so I anticipate most ecosystems that take off will be following some kind of um activity like that m yeah that's interesting is there anyone if you could have like I don't know do you guys think you have this yet or are you still kind of trying to find that founder uh I think that right now for sav2 um it's still pretty early overall yeah there are a ton of like really talented Founders that are building in the ecosystem but it's really difficult to say if anyone is logic killer app

until after that app is launched and then you see activity typ to that on Main net yeah all you mentioned savy a few times Give me the give me the overview give me the primer I've been hearing about it in the few times so yeah do you actually just want to share uh your screen I think there's a slide that could yeah make this is it this one all right yes so sav2 is the first paraly evm um this slide kind of shows the differences between what sav1 had um and what sa2 will have so there's I would say three primary differences um the first one is Sav will support the evm uh the sense of being an interoperable evm which means that the evm is able to interact with

the CM WM side uh and vice versa so essentially this means that everything that is there on say right now all the nfts all the tokens that are there um all the uh smart contracts as well um you can interact with them via metamask so say it's like essentially one of the first chances offering there's offering something like this um the second thing that's there is optimistic paraliz so I was going over this before but it essentially allows you to just take something from etherum L1 deploy it to sav2 and it just works uh it's able to paralyze transactions under the hood but from a developer standpoint you do not need to do anything and that's one of the really nice things about um the evm being a first class citizen in say

you're able to abstract away a lot of this um whereas if you look at other chains for example if uh you're supporting the evm as a smart contract in another ecosystem for example Neon salana does this um you still have to fit the limitations and the requirements of what salana needs so you still need to for example Define all the dependencies that each transactions going to be touching in the case of Theon which adds in a ton more developer complexity um so that's one part of it um the other thing that we're doing is we're adding in sdb so one of the biggest issues that come up when you increase throughput um is that it leads to State load so state is essentially um it's all the data that needs to persist for a chain to be able to process new

transactions and to be able to generate the state route so this is data that is stored on each full node and this essentially ends up being I mean mental model could be two things uh the first thing is account balances so like you have 10 say I have 20 say that would be one example um and then it also ends up being smart contract data so like this Unis swap pool has this much has this many uh I guess these are these are the tokens that are being creaded there these are the balances for each of those tokens um so it's data that needs to persist for these transactions um to actually be processed so when you have more transactions per second you end up generating more State and then you need to account for how to actually handle that State uh so we created sdb to help

there um and it just helps massively reduce the amount of data that is being stored on each node and it also helps improve the states in times to be able to start running a new Full lo give me the impact for like a user like if I'm trading on Unis swap or I'm tra like what what is the what is the impact on a for a user here yeah so there's two things um the first is that gas fees are cheaper uh if you remember like a couple of months ago um dl1 had like gay that was like was like over 100 G per unit of gas so it just becomes completely inaccessible for a normal person to be able to using uh to be able to use an ecosystem where the gas fees are so high um so cheaper gas fees for the normal person I anticipated in St

case it end up being somewhere in the range of around 1 cent per transaction I think if you go too many orders of magnitudes below 1 cent uh it encourages spam and it really just results in more B add activity happening um like normal users if transactions are around like a cent or something then normal users that are manually submitting transactions they will be able to do that it's they're not priced out of it but if you become too cheap then it actually just results in a lot of spam and uh network degradation like you would see with potentially other chains like Swan um so that that's one part of it the second part is there will be a bigger design space for developers and when developers have a bigger design space there'll be more types of applications they can build um so that'll result in just more

stuff that users can use on chain as well when is main that uh the classic question so what's been publicly it's been publicly announced so far is that um say it's code complete uh so right now there's just going to be smaller Buck fixes that are going in and there should be a governance proposal uh to upgrade to sav2 coming in the near future uh maybe we can get away from sav2 and into some of those like opinions that I mentioned at the beginning of the podcast so one of the things that you've mentioned to me is uh de like this idea around like pushing extreme decentralization is actually bad um maybe yeah let me leave it at that why don't you expand on that

and we can uh take that conversation any way that you want to go yeah so I think that there's this overarching idea that I I think everyone agrees that decentralization is good decentralization is one of the core tenants of crypto so decentralization is important um I think that there's a lot of projects where they just blindly associate decentralization with having as many validators as humanly possible and having like let's say 10 million validators is viewed as having like I mean that that's more decentralized that's better than having like a smaller number of validators but if you think about this like a validator when you have 10 million validators in in a network each validator is re-executing

the same sets of transactions so it ends up being a lot of redundant work for people to be able to verify the state of the blockchain and the way that a validator works is people will only run a validator um either if it's strategic for them to do so so maybe they're centralized exchange uh in that case they'll be incentivized to run a validator just for strategic reasons um but typically people will only run a validator if whatever the um income they get from like any uh like processing transactions any tips that they're getting um staking rewards that income ends up being greater than the expenses that is needed to run that that is needed to run that value right so um this expenses is composed of multiple things um it's composed of both like the

actual cost of running that machine like the electricity cost the hardware cost um but it's also the opportunity cost of whoever that person is like their time to be able to run this so when you end up having a large validator set that results in a lot of expenses for the network which makes that Network long-term less sustainable to be able to maintain and I think implicitly every single project that has launched in the past couple of years has understood this like if you look at every single infrastructure project they do one of two things right now they either have a validator set that is less than 200 or they're a centralized sequencer rollup which is essentially a validator set of one um and when you have this you end up having like this is all happening implicitly I don't think people are

really explicitly realizing this yet um but you end up having just much like there ends up being two benefits like one is just around performance when you have a larger validator smaller validator set size you can have higher Hardware requirements which results in you be a being able to process more transactions per second um and the second thing is that the network is just much more sustainable when you don't need to have like 10 million validators um whose costs are being offset by the network so the direction that I see the industry moving in in the longer term is one where you end up having smaller value set sizes um I don't think that this single single sequencer roll up meta is going to continue for uh too much longer like maybe in the medium term it will continue in like the next

year or two but I do think uh sequencer sets will start decentralizing in the future um but then longer term I don't think they're going to be that big because you could have life clients that are consuming zero knowledge proofs so there will be ways to verify the state of the blockchain without needing to have like super large validator set sizes H what's the what's what's the right balance though because you could I mean you could argue that yeah like no valid or one validator is is is right because it's the most efficient way for the system to be run um but there you know there is a reason why like you have thousands of validators is because the more validator like you you know less less efficient system yes but you know more decentralized system which maybe makes it more um you know intolerable

whatever I think the industry will start moving towards a direction that is considered the acceptable amount can't give you an exact number like 20 is the golden standard 21 is like good 19 is bad um but I do think the industry overall is moving to a range somewhere in like this 40 to 100 validator range which is where it's decentralized enough it's like sufficiently decentralized where like it spread out across enough countries it's spread out across enough um independent entities where no one can really even if a small number of them clude uh you can't really have any significant impacts on the network um but I do think once you start becoming too large it just becomes um really really bad for the reasons that I was mentioning before so I think the industry overall will just move in

whatever the best direction is I don't think it's going to be one when you have one that leads to a lot of liveness issues that leads to regulatory issues as well but once you have something that's like in this few dozen kind of ring I think we're going to start seeing more and more people viewing that as being acceptable huh what happens to ethereum in this world I think ethereum is going to be just fine um I do think that in ethereum's case like whenever you have harder or higher lower Hardware requirements it becomes much harder to process more transactions so they will need to move in this direction of D starting in this rollup Centric road map um but I also don't think that any other change will really start going down that same route and if you look at any layer one in the past two years like say apsu

whatever else you can think of no one's really going down this route of having like thousands and thousands of validators just because it is extremely inefficient so I don't think we'll start seeing uh I would say that nearly all new layer ones um will start be start having much smaller validator set sizes compared to ethereum and I think every Layer Two in the near term will be launching with a central centralized sequencer and then in the next year or two they'll move to a decentralized sequencer set of probably in the range of like 50 to 100 nodes what standard do you think we should hold different l1s that are launching and different l2s that are launching too in terms of decentralizing their sequencer because that what you just said is what a lot of folks have been saying but now they've been saying it for a few years and it

yeah happening but it's happening slower than they originally said so what what standard do you think user should hold the the L2 to yeah I mean because l2s benefit from uh I guess using da settlement from the Bas layer uh the argument could be made from a technical standpoint that there could be uh they could be held to a different type of standard than layer once SW but I do think in the long term everyone will converge to the same standards that probably will be in that range that I described before of like 40 to 100 independent notes that are there for either sequencing or validating transactions yeah that's interesting what about um there's one other thing

that uh we've talked about in terms of like value in shipping product versus value in being a research culture would love to hear how you think about this dichotomy yeah so Silicon Valley is very much or say is very much a Silicon Valley team um where we have the mindset of being able to ship as quickly as possible um being able to collect as much user feedback as you can and then uh kind of directing the product based off that user feedback um I think that's the only way that you can really build something that people actually use um if you have too much of a research culture I think there's like a spectrum and if you're too far on the research side of the spectrum you're just never going to ship anything that's why I mean a lot of

PCS that you talk to they end up being less enthused about a professor founder like someone that's uh like an academic um because if there's too much of a culture of research that's ingrained in an organization um it often prevents people from being able to move quickly and being able to ship things I think there are some very well-known examples counter examples of that where people like Shon for example I think they have been able to move very quickly um but in general I think if a culture is too academic or too research oriented um it's just much harder for it to move as quickly and to actually solve user problems so I think if you if you're going to be on one side it's much better to be on the side where you're like actually doing things versus just thinking about things if I had to play Devil's Advocate

The Devil's Advocate is that there's this kind of like uh group of maybe 20 to 50 like crypto they kind of think fluenc or crowd where a lot of ideas actually come from like I'd probably put like I don't know hu and John charb and like that that kind of crew um and a lot of like basically what they when they kind of GRA grasp on to these ideas which often times come from research then things like ideas kind of permeate from them I would say and people start grasping on these and that's kind of what ends up be becoming some of these big narratives I would say yeah I I 100% agree that you need to have a certain amount of like any project that does well there needs to be Innovation behind that project you

can't just like copy ethereum uh vanilla and then have it be something that like people get excited about but I think there is a direction in which you can go too far where you spend several years just doing research there's a ton of ideas you have for like Innovation that you can go down but you can't you just decide that like oh we have to keep doing more we have to keep chasing this idea of this perceived sense of perfection and then a year from now you might have solved the problems you were thinking of before but now there's like 10 new problems that are like the industry meta standards that you need to be solving so I think it is definitely you need you definitely need Innovation um but I think you can go too far and I think a lot of crypto projects in

general they don't really think about user problems and they don't really think about like they just don't have the Silicon value mindset and that just results in them either uh not shipping at all or shipping something that people don't really care about so if you if you're going to be too far on one side I think you will be better served as a Founder to be just focused more on implementation and execution versus just like thinking about uh abstract research problems let me ask you maybe more a question that I find interesting but maybe listeners might find more boring but I'll ask it anyways because this is this is my pod um what about manage how what is your management philosophy like how do you that's a fluffy that's a fluffy word uh to make that a more tangible question

like how do you think about hiring um and specifically like at a at a protocol there's one way that you might think about hiring which is like extremely crypto native um because you just need that and like Bottoms Up create the narrative everyone needs to be super Crypton native then the other side of this is like there's all these super Crypton native protocols like let me try to you mentioned like web 2 moving fast Silicon Valley a lot like how do you think about hiring yeah so I can touch on the engineering side uh that's what we're focus on from tabs and I would say first of all in terms of like overarching philosophies moving fast is like probably the biggest philosophy we have internally being able to move quickly I think is what differentiates successful projects versus not successful ones um

and with that being said um for hiring Engineers I actually think it's better to hire for aptitude versus hiring for the skill set that they already have and probably generalization of that would be it's better to hire people that are like good web 2 Engineers versus hiring mid web 3 engineers and it's really difficult to hire web 3 Engineers that are like really really talented um because a lot of them end up just becoming Founders anyway uh so there's a very small number of like web three uh really talented web 3 Engineers that you can actually hire so because of that it's much more effective to hire web2 engineers and then to train them on how crypto Works um because they end up just becoming much more impactful like six

months after they join than someone who's not very good but maybe more Crypt native um interestingly one of the things that we found to be really effective for us is hiring people part-time initially um when you hire someone part-time as an engineer they could still be working at their uh really prestigious job that they're kind of hesitant to quit um and then they can get a sense for the culture that you have uh you can obviously kind of get a sense for what their work style is as well so it ends up being a really I would say efficient way to um understand whether both sides would mesh well together um and in general I think like interviews are not that effective this ends up being a much better way to uh gauge if someone will be a good fit so you'll bring someone on for six months

as a contractor first or full-time typically like typically like one month or something I think that gives more than enough signal to see if someone would be a good fit on the team and the the six-month comment was more if you hire someone from let's say data breaks to one uh they might not be Crypton native but 6 months in they will be Crypton native and they will also be really talented Engineers to you end up getting the best of both world if you're able to make uh a few month commitment or Investments to help onboard people yeah that's interesting um if SE is like extremely successful and executes 100% of what you want to do in the next like 18 to 24 months what does that world look like I think say will become one of the chains where it'll first so in

general I think crypto is and uh blockchains in general um are win or take most types of ecosystems because people tend to congregate around places where there's already the most activity user liquidity um I think if Z2 is able to do a good job here Z will be one of the top projects out there where there's the most amount of effectivity happening and I think what makes Say in any kind of paralized evm in particular more Poise to get there is because it's much easier to start growing that initial ecosystem because you can have many more Developers that are seamlessly able to start building um and then you're also able to have uh like the process of just getting killer apps um started in that ecosystem ends up being much faster as well Jamon anything else we missed that

you want to cover no I think this is a fantastic conversation it's always fun to talk about stuff like uh decentralization and how the ecosystem might be focusing on the wrong things right now yeah cool man excited for you thanks for the time and uh rooting for you n [Music]