Jito: Airdropping the Solana Wealth Effect | Lucas Bruder

Transcript

I'm extremely confident that every steak pool on salana is going to use it in some form or another the jeta salana client was built a lot of steak pools and stakers and valers are running that I think Stak Net's going to be another one of those things that like every single steak pool on salana is going to use staket what's up everyone welcome back to another episode of zerx research if you're listening to this podcast there's a good chance that like Dan and I you believe the future of Finance is on the blockchain and we're excited that London is becoming a global hub for blockchain in ation and institutional adoption of digital assets that's why we're pumped to host the 2024 digital asset Summit in London this March don't miss your chance to get ahead of the curve later in this episode we'll tell you how you can save

20% off on your ticket all right everyone welcome back to another episode of zerx research we are joined today by Lucas Brer the co-founder and CEO of jeto labs Lucas thanks for joining us man and big congrats on the token launch obviously it's a huge milestone for not only you and your team but also the broader Salon Community it feels like morale is probably at all-time highs right now and one of the one of the cool takeaways I actually had from this was Brian the uh CE COO of Goo Labs had an awesome thread that that highlighted the level of coordination that really went on between your team and other development teams within the salonic ecosystem there was decentralized exchanges even centralized exchanges lending markets wallet providers pretty much everybody in the ecosystem had to

be on point and be ready for this can you just talk a little bit about what that organization what like how that was all orchestrated and really the effort required to make this thing happen flawlessly as it did yeah for sure thanks for having me on first off super excited to be back here yeah it's just like really cool to see the like the community and ecosystem rally around this I think there's a lot of reach out and um coordination that goes into these launches and so you have like Phantom doing the the goto airdrop notification and soul flare as well and the banner on Jupiter and there's a lot of other people that were involved so apologies forgetting any names here but yeah it's just cool to see people are dming you and asking how to help and I think for

the first time in a while it feels like the salana ecosystem is like really shining right now and that was like one of the goals of doing this entire thing the way that it went down and so it's just it just blew like all of our expectations and like the attention on salana is like super high right now so it's just really exciting to be building on salana right now yeah I can only imagine how big of a weight off your shoulders that was I'm sure got to catch up on sleep over the weekend hopefully but I have seen a lot of takes on Twitter saying oh like projects that are doing points programs need to take into account the Cy activity post jeto air drop and more heavily weight on activity that was done before do you have any thoughts on that

yeah I think it's in any ecosystem especially one that are that have a lot of pre-t token protocols I think there's all always going to be like mercenary capital and civil where these people are just in it for the air drop and they will spin up like tens to hundreds of wallets and you see it a lot more on the l1s and some of the newer l2s where people are running these like massive Farms that are just uh generating like fake activity that definitely like somewhat the case during like before the goto airdrop but if you look at the stats now from margin fi Zeta drift there's like record signup numbers coming in I think a lot of it is

actually like new users in there there's definitely a lot of bots that are coming in and detecting that activity is extremely hard I think it's definitely gotten worse so I think that the game is definitely change for those protocols so I think they need to think very hard about the activity they uh rewarding trying not to uh leak too many uh too much of the air drop and the governance power to like civil actors and yeah like to Char's Point like try to focus on just keep continuing to build a good product and ignore all the noise that these like these people are bringing yeah I think that makes a ton of sense and I mean in a time when

there's been all this infighting as well it's glad to hear and see that the there was a little bit of a different change of pace over in this ecosystem and I I definitely agree with your point like though there's there's full scale legitimate cyal Farms these days and that's just a crazy thing you have to deal with now imagine being on one of these L2 teams like seriously have millions of transactions a day that are from these Cy Farms that's like got to be a really hard thing to deal with but on the other side especially on the L2 side not to go off on a tangent here but a lot of that activity is like proving that your Tech does what you want your Tech to be able to do so it's I don't know in some ways it's like they're still providing value yeah no for sure

you can it's the people that are good at it are really good and it's hard to detect that activity and I think there's I don't know if there's any right way to do the airdrop everyone has their own opinion I think no matter what no matter what way you do it some people will be very excited some will be angry and that's just like the way that that it goes but I think that it's definitely going to accelerate and teams definitely need to think about that a lot and potentially you can feel free to ask us for help and ask others for help and yeah I think there's a it's the games definitely change yeah to double down on anything in life there will always be people that'll be mad at you but we got a good question list lined up for you

today really centered around meev the jto salon client and kind of how those two intertwine jeto soul of course and then a couple like broader salonic questions but maybe we can kick things off on more of the me side huge uptick activity recently on Solana how have you seen the me landscape kind of shift or or change or develop and mature over time and just like these last few months with the the new wave of activity yeah so there's definitely a lot of there's a lot more volume I think a few days ago salana what it was it did it do 70% of ethereum volume or something yeah if you look at like the the volume charts over the past few months I think salana was doing like um in the range of like 20 to 50 million of

volume a few months ago now it's doing like hundreds of millions to like a billion dollars so with that there's a lot more arbitrages it's the Fe On The Fe is on saler so below that basically like any trade is there's a high likelihood that any trade will result in some type of Arbitrage available so you're seeing a lot of that you're definitely seeing a lot of a lot of volume generated by that there's definitely a lot of blocks that are getting filled up pretty fast here and some room for approvement on fees I think probably dive into that a little bit later but yeah there's and then we seeing the block engine and like the jeta salon of valer client is seeing a

lot more me going through it in the past uh few days so there's a lot of like all hands on deck making sure it's reliable able to handle the load and giving a good service to the Traders and Searchers that are using it I think also one more thing to mention is that we're seeing a lot more Market maker interest on some of the order books on salana whether it's like Orca or Phoenix so you're seeing some people that are that were previously out of the game for a bit that are coming back in and then we're also seeing some newer participants that are coming in and starting to provide liquidity on like Phoenix and stuff like that they're asking like how do these bundles work

how do we trade fast how's this network work like the first things that you do when you start to dive into me like if you're diving into an me on ethereum you have to understand like the builders and the reers and the timing and all this stuff and there's a lot more question a lot more of those questions coming in from like professional organizations so I think that's super cool to see as well that might be a good segue actually to understanding a little bit more about how the block engine actually creates the opportunity to capture me can you walk us through what that architecture looks like yeah for sure yeah basically the block engine in the relayer it creates this rolling men poool that's super shortlived so right now it's

basically like a 200 millisecond rolling men pool and seers are able to subscribe to these opportunities the basically the transactions coming in and they essentially transactions go to the relayer and then they get forwarded to the block engine and the Searchers are receiving the stream of transactions they are simulating them and doing their complex Arbitrage and liquidation whatever logic they're doing to basically figure out like where's the me like how can I Arbitrage this all that stuff and then they will send a bundle or a bunch of bundles over a connection all those get aggregated into the block engine and there I guess there's there's multiple block engines around the world

so there's a lot of communication between all these things but it goes in it goes into this proprietary simulation engine that we built from the ground up and basically that will it runs a periodic auction so every 200 milliseconds it will basically spit out a list of the most profitable bundles to send to validators and then the engine forward it at a high level it's like pretty similar to the way that me on ethereum works for those that are listening I guess there's a few differences one is that Salon is very fast and it's a 400 millisecond slot times every leader has multiple of four leader slots back to back it's really

difficult because you'll be in Germany Frankfurt one second for 1.6 seconds then you'll be in Tokyo for 1.6 seconds and then you'll be in New York for 1.6 seconds and it's just bouncing around the globe so coordinating not only is like trading on that hard and you have to have if you're like a Trader and you really want to do well you have to have like servers all over the globe but also coordinating that on the Block engine's pretty hard compared to etherum it's 12 second or 13 second block times you can send a packet around the world like a bunch I don't I don't know how many times a lot of times before it's an issue I think another thing that's interesting too is that there's like this big censorship issue problem on

ethereum that is getting talked about a lot recently with ofac and just how you have a few builders that are building the entire blocks on ethereum that doesn't really exist on salana jto can't censor transactions if the relayer is if the valider is running these reers and then another thing is that jeta is building the we call a block engine but it's actually just sending bundles to the validator not actually building the entire block just pieces of it so I think that's another like pretty key difference between ethereum and salana me where some of the issues that are present over there aren't necessarily an issue on salana yeah the block time is super super interesting I think it was Tim

from a16z who put out a paper basically declaring that uh the me opportunity is like equates some somewhere around like the square root of block time suggesting that faster block times reduce the amount of Arbitrage me that can really exist and so because salana has such last block times J's client is creating a med poool on top of a continuous uh transaction stream what are the trade-offs there and is it like fair to say that this is like slowing down some of these transactions by about 200 milliseconds yeah I think it is the case right now I think that's completely tunable I think that we want to I think there there's a large potential for the effects of me

especially on these high frequency like or high through put low agency chains to really geographically centralize a network I think you see that now in like Frankford and Amsterdam and especially in Tokyo because there's a lot of sexes in Tokyo a lot of the traders that are a lot of the traders that we're talking to are setting up in Tokyo because that's where a lot of the servers are so I think that one of the goals of doing this is to try to prevent the geographic centralization another point is it just like something that has to be done to optimize the system and I don't think that 200 200 milliseconds is it's a tunable number so you know the new simulator it's looking very promising

that's something you can get down to 100 milliseconds or maybe even 50 milliseconds in the future it's all tunable also yeah rev validator can run their own relayer and choose the settings that they want I think another cool thing about salana is that um the uh there's a lot of people in salana that are like oh tvl is a meme I think we all realize that like tvl is a meme I think toally tweeted the other day like you only want capital on chain that's actually being used a lot of the capital in these order books is just sitting idle and like never gets used and I think that the because a compute and resources are so cheap on salana and you can do a lot more so I think like

something like a phoenix or like a like any order book on salana or even like Orca and radium think they are just going to expose less me to users which I think is a good thing like ultimately you want me to be reduced at the application there as much as possible yeah I think that's definitely true okay yeah that makes sense I appreciate that extra color but you can't talk about uh validator clients without talking about fire dancer I feel like that's one of the most hype developments for salana in 2024 and 2025 so how does the release of fire dancer impact the goo client yeah I think it's TBD on when it comes out I think it's probably people are running something called Franken

dancer on testnet right now so Franken dancer for those that don't know it's basically a combination of fire dancer and the salon allows valid air client and it's essentially the fire dancer networking stack so the fire dancer quick and I'm actually not sure how far up the networking stack it goes but I know it's for sure quick is running and then it basically like plugs into the the current Salon Labs validator client for receiving transactions and processing them so that's live on testnet I think fired aners probably maybe a year is out from testnet or main net I think that we're certainly keeping like pretty close eyes on the

development of fire dancer I think once there's some type of like transaction execution and like when you when we start to see like consensus and stuff like that go in that's when it makes sense to start looking at it I think FR answer would definitely be easier to work on and modify and it'll definitely be easier to plug in like J's specific code into fire dancer just because of the way it's built there's multiple processes and things like that running and it's really easy to to modify fire dancer compared to the salon Labs outou a client so I think it will definitely be a thing it's just a matter of when is it ready and yeah I think for me it'll I think fire dancer will be like the

highest performance open- Source software that's ever been built and I think that there's going to be a lot of people referencing that that are in the crypto industry and working on l1's and l2s and a lot of people that aren't I think it's that's super super cool to see that happening on salana I think it will it it will have some impact on me I think TBD on what that looks like but everyone's obviously very excited about fire dancer yeah that's a really cool fact that you just mentioned like having the most high performant tech that's ever built open source be in crypto is a really massive step forward for industry I think I feel like that just brings in a lot more developer Talent a lot more Tech junkies people that are just like

think things are cool like then it's oh wow look what this industry is doing but yeah and does that do you think that makes a difference if you are you have a development background and and so does many people on your team so I'm curious like when you try to like take yourself away from crypto and pretend like you've never found it before why would a developer come to the salana ecosystem versus something more like any of the other broad ecosystems right Cosmos ethereum the l2s any of those yeah I think salana tends to attract really like Engineers that really want to dive into hard problems and work on really cool Tech that I think some of the other ecosystems don't have and that's why I got into salana originally

I was like oh this just makes sense why don't we just use everything every like compute resource like RAM and caches and all the clock Cycles as efficiently as possible I think you don't really have that on some of the like other networks you know I don't think there's definitely a lot of people that I get excited about working on ethereum like the L1 but I think it it doesn't really have that the capability to nerd snipe people on like high performance engineering problems unless you are like into me yeah that that's really cool perspect nerd typing is probably one of crypto's best use cases so love to see that all right zerox research listeners we're calling on you to join us for the premier institutional crypto conference

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the description and using promo code 0x20 to save 20% on your tickets see you in London the land of tasty pastries and be sure to hit up Dan and I for a beer pivoting a bit to jto Soul the LST growth has been up and to the right phenomenal growth even post air drop still seeing a lot of that growth hang on and one of the interesting things is a lot of that growth seems to actually have come from the deprecation of Lido steak Soul it seems like that was the Clear Choice of where those users were going was jeto so I want to get your take on how that growth has been but also there still seems so much untapped potential with only about 5% of the unlocked staked soul is use is uh like liquid stake and using these LST

providers what is goto's plan to really attract those assets into the liquid staking side of things yeah so I think to your first point yeah the growth of jet Soul has seen a lot of success from Li of shutting down I think it's a bummer that they did that but I think in retrospect will probably be a poor decision it makes sense they're a clear market leader on ethereum and I think if you spread your if you spread your company or your your team and your resources available too thin then you can end up slipping and losing lead on uh Market that you're clearly winning on I think we've seen that when some protocols go across chain and stuff like that where they start to get a little comfortable or split on their time and attention but

yeah I think a lot of the a lot of the capital coming in has also been like traditional stakers as well and some institutions that are finally starting to see the light of liquid staking I think really it's comes down to how do we get more people in I think it comes down to communicating the like the Safety and Security of the protocols making sure that communicating the Audits and things like that I think also explaining some of the benefits as well you're spreading your stake across a wider network of validators so it's making the network a little healthier and also if you're only sticking to one valid a that valid a has downtime then you're going to take a yield hit where

if you're spreading it across a the the yield hit might not be as severe I think some of the other stuff like this is a little more like Hands-On but I think starting to dive into some of the taxes and things like that and understand what do these institutions actually care about and why aren't they doing it now obviously not Financial legal investment advice at all but there's some people will believe that basically swapping to from like soul to a liquid stake soul is not a text event others people other people think thinks it is you can work with these institutions are starting to work with accountants and lawyers and things like that to understand that a little better and we've seen some like good success

there with people warming up to that idea also there's at least on salana there's some potential tax advantages with the staking rewards as well where if you're staking normally and you're receiving staking rewards then some depends on your accountant and your lawyer and all that stuff but some people view the staking rewards coming in as income and on salana I think on on salana the the Jos all the lsts they are they're reward bearing basically you when you deposit jetto soul that jetto Soul represents the soul that you put into the stake Pool Plus any accured rewards and from staking and me so like right now I think the price of Judo soul is like around 1.07 soul that will

continue to go up as like the as it accru staking yield from the network and it's potentially way more tax efficient than just normal staking so yeah I think those are a few of the things that I think make sense to focus on yeah that makes a lot of sense and maybe this question is a little premature but I feel like I got to ask it since we brought up Lio but do you have any thoughts on self-limiting from the perspective of an LST provider I think it's like too early to have that conversation I think that I think that Stak will actually help a lot here and I think we're going to probably dive into staket in a bit but I think when you decentralize the stake pool into staket I think it

changes the risk model from a self-limiting standpoint just because it's this open source algorithm and people can influence the way that it delegates and whatnot stake net is definitely something I want to dive into but right before we do that I want to tie the validator client back to the LST so all of jeto soul validators that they delegate to for the the user deposits run the jeto client but anybody else can also opt into running the client as well is that correct yes okay and in that case then how what's the plan to because at the end of the day I feel like most at least onchain users more of the dgen personality like their mindset is like

maximize yield and if you can stake to a validator because I guess is also a difference between delegated proof of stake versus something like ethereum where as a user I can just delegate my soul to an existing validator so like obviously you get the liquidity and some of the tax benefits that you mentioned but is there any way in your mind that you can off also offer a higher yield than if you were to delegate yourself yeah it's definitely something we're thinking about there's a few ideas I don't want to dive into them yet I think it's too early but there's a few things that are being being worked on to fix that because yeah I think that's another thing it's like Risk verse reward how do you make their reward higher and I think there's some Stak

pools that are using the governance tokens as another incentive mechanism that can certainly work I think it's not forever and it's uh pretty those emissions can be pretty high and I think there's several other ways to do something similar without kind of having massive inflation so I think should expect to see more of that from us but also some of the other like community members pretty soon fantastic yeah we'll definitely be on the lookout for that but I think that's probably a good point to talk a bit set the scene for the staket conversation so I guess is yeah it's most helpful to probably start with what's the current architecture of Salon LST providers today um I guess maybe walk us through what it looks like when

a user deposits Soul into jeto like where does that Soul actually flow through into the Stak pool and then ultimately to the validator and maybe if there's any like I know I know there's an admin control wallet over the stake pool so describe how that plays a role as well yeah so yeah a lot of the Stak pools on salana they use a program called the SPL Stak pool SPL is a salana program Library there's a lot of reference implementations of like common programs that people use on chains that this that are in the salana program Library one of them is a stake pool um so what happens is when you're user you can deposit into the Stak pool and it will basically give you a receipt token

or like a liquid staking token and this token represents the soul that you put in initially plus any acred staking rewards from consensus on the network and then also me as well if the the Stak pool is staking to any me validator clients and after you deposit your soul you get back the the liquid staking uh token the protocol will then basically figure out which validator to move that salana that was put into the protocol onto a validator in their valid a set valid a set's dynamic every Stak pool has a differ size valid a set you can add and remove validators to the validat set and

yeah basically there's some process that happens where the you figure out which valid area you want to put the stake on and then that happens and then it starts uring the yield and so right now in salana the salana program Library Stak pool there's two there's two authorities associated with that one is the manager the manager is the one that can set the fees they can change manager they can change the wallet that the fees are going to it's like a super user they can't steal any of the funds though no there's no permissions on the stake pool where you can actually like steal funds and yeah like for jeto the manager The Authority is currently Realms Dow which

is like the Dow platform on salana so token holders can vote to change fees and whatnot on there the other authority is it's called the Staker and so the Staker basically they have the ability to take that stake in the last example that we were talking about they can take the stake they can deploy it to one or every validator they split it up and move the stake around they can pull stake off validator that are getting removed from the set wait two days and then put on a different validator so just you can think of them just like allocating resources allocating all the soul in the Stak pool like the resource across all these different validators okay perfect and so in that

context then you I know you guys have been uh allowed about this on your breakpoint presentation but that's not true defi right there is this centralized actor that must uh perform certain roles in order to make this all work so talk a bit about St and how it actually unlocks that by removing the central Factor here yeah so I guess yeah I didn't dive into the Staker that much but I guess like the tldr is that the Staker it's typically like a hot wallet on an AWS or gcp server people are running data collection and storing it into a some database and running some algorithms to figure out like this validator maybe they did a commission rug maybe they they switch data centers and the new data Center's performing poorly or what ever it is it just runs

and we'll Dake stuff and move it around and yeah I think that we can I think that we can do like way better than that I think it's if you want to see liquid staking succeed and get to 10 or 20% I think if we were at like if Jos Soul or any other liquid staking token was at like high single digits or like low double digits percent of the network and people found out that there was a central server doing it I think people would be a little freaked out so it's s the result of thinking ahead of this and hey there's a way better way to do this it's going to be super hard but I think we can figure it out and basically staket is it's a way to decentralize the operation of the stake pool to a network

of Keepers and essentially what it results in is like an Ultra decentralized Liquid staking protocol that in theory should like never be able to get stopped so it's Unis swap or a lot of the protocol on salana like dex's where it's just gone there forever and you can't really pause it or anything yeah steak nuts a result of that and yeah super excited to get that out pretty soon I think I'm extremely confident that every steak pool on salana is going to use it in some form or another and so I think it's cool to the jeta salon client was built a lot of steak pools and stakers and valers are running that I think steak Net's going to be another one of those things that

like every single steak pool on salana is going to use steak net so as a data junkie here one of the really cool things I think you guys are doing with this is the storing all of the Val validator performance history onchain in the validator history program yeah and can you just talk a bit about what the data side of this looks like today using just a normal stake pool versus how that changes and actually bringing some of that data on chain with staket yeah yeah when you're offchain you can do um there's a ton of stuff you can do but basically you're running some while Loop where it's just I'm going to sleep for an hour and then I'm going to pull a bunch of stats what are the voting credits on this valid or what's the apy or what's the commission what's

their IP address where are they located in the world like whatever inputs you have to your staking algorithm get run on this server and then you're putting into a database some some of the the staking pools some of that data is open source some of it's not stakenet basically the plan is to use salana as the database for lot of this data a lot of this stuff available on chain it's just like a snapshot at a point in time so oh I want to what's the validator commission it's I can look at this and this is a current commission but there's no like history of that on chain I think the history component is very important to this essentially the way that it works in the current form is every validator when there's a new validator

detected there will be an account created for it this account creation permissionless and basically it will create an E I think it's what is it it's a few hundred Epoch I think it's three-ish years of data two or three years of data that we can store on chain and so you create this account it has a circular buffer in it so you're just going around the circle as time goes on and you can look backwards to a shears and it stores like the most important fields for determining the how about ear performing so it has historical commission has the commission it has has the voting credits which is like one of the main influences into the

apy of the validator I think there's an open resarch an open research question that we'd love contributors to help contribute to is if you have the IP address of every validator how do you figure out its location in the very high accuracy way because some of the IP location databases are like out ofd so you can you can potentially figure out the location of validators and then yeah like all this lives on chain there's multiple years of it so when you're actually running the stake pool delegation in in this other program you can be like oh has this validator increased commission p uh let's say 50% in the last two years if so they are like blacklisted from the Stak pool for two years and yeah there's like a ton of

crazy stuff that you can do with this so I think pretty excited yeah this is really damn cool honestly because you said one thing that really got my interest going there which was using salana as the database and that actually does feel like something that's only possible on salana today uh if you look at the ethereum community they have the exact opposite thing going on where you're pushing computation offchain with things like uni swap X now they're discussing pushing events further offchain um because they have a real cost it's about five to 10% of a the average transaction cost for UNIS swap trade for example is actually made up of just telling the user what happened and so they're now trying to push further things offchain whereas if you look at the Sal ecosystem they're like you know

what let's use the whole let's use the chain as a database I guess my question is who pays for that and are are there like because there has to be real cost to posting all this data I would imagine so what does that look like yeah it's not too bad I think every validator every validator counts like a few bucks you just allocate that once transactions are so cheap I don't know that the numbers off the top of my head I think the most important thing is just the most expensive thing is like allocating the account ahead of time when a validator pops up yeah so that makes sense so I guess from a high level to me it sounds like you use the validator history program to have this database of validator performance and then the steward program

will look at that that performance history and say okay based on these criteria set by some parameters maybe controlled by either the team or governance of a certain protocol this is how we're going to delegate our stake across the current validator set is that an accurate summary of kind of what stake net is yeah for sure yeah I think there's the I think the the steward will be pretty specific to jto Stak pool at first and I guess a lot of this depends on if governance wants to adopt this or not I think TBD on that but I think like past V1 I think it's like other Stak pools want to use this and they all have their own C customized logic and so I think V2 and would love to see these

other Stak pools contribute to this and other people in the ecosystem basically like how do we make this a platform that's less specific to goto and more broad for any Stak pool I think there's a lot of cool stuff you can do like for instance right now jeto only Stakes to Jet valers running the jeto salon client but what if you only what if you want I only want 10 per Max 10% of steak in the steak pool to be in any country at a given point in time like how do you build that or there's some of these some Stak pools have these concepts of like gauges where you can valid can buy the token to receive more stake or if you're a Staker you can do this directed staking thing where you are saying Hey I want the stake to go to the specific

validator like how do you actually build that into the stake pool and staket I think there's there's a ton of room to customize this and it's almost it's like conditional staking in some sense where you can just have these conditions that kind of change the way that staking works and I think it's a super powerful platform I think we'll see I think there's a good chance we see other Stak pools on other chains start to adopt something like this yeah conditional staking Lucas we call those intense to 10 know I'm kidding but the one thing I actually don't get yet is Keepers who are they and what's the role that they really play in this yeah the keepers basically they're helping to operate the two

programs so the main one that's running on mainnet right now is of valer History program there's a few instructions that they run and it's on this like periodic basis or when they see updates happen but essentially what they're doing is there's They're copying I was talking earlier about this moment in time thing where you can view this the validator performance at a moment in time but you and you can view that on chain actually so the vote accounts and like the vote state of a valider is stored on chain so one of the instructions that they're doing is essentially just copying that vote account into the valider history his account so they're just running like a bunch of like copies so like you like

parse it and copy it over another thing is that it's there is some of the data isn't available on chain and there's some stuff in Gossip that is gossiped out between all the nodes on the salana network so there's basically they'll gossip out the version of software that they're running or like their IP address which is used to you can use to find the location or they'll gossip out votes and there's a bunch of other stuff that they're sending between each other on this giant mesh network but none of it is landing on chain and so some of the keepers are actually uploading that data onchain as well and because it's offchain it's like an oracle Network in some sense except for the fact that with an Oracle and price you need a lot of

people contributing to this because you don't really you want to average it out and whatnot where a lot of this gossip data it's actually sign all the gossip data signed by the validator that produced it so you can actually upload this on chain there's a buil-in signature verification function on chain so you can upload this gossip data you can signature verify it and you can basically assert that the validator releases this data at the specific point in time so in that sense you don't really need it's like kind of an oracle network but you don't really need like multiple people uploading different data because you're actually checking the signatures on all of it so yeah it's like a a deep dive into what the keepers

are doing there there's some Keepers on Steward as well that are running the scoring and all that as well that's super interesting I'm definitely excited to see staket go live that's like something very differentiated about what you guys are doing here versus ethereum so congrats on that but I do want to shift the conversation a little bit to salana and some more thematic questions because there's been a lot of talk around Sal's fee mechanism so today you have the the base fee that's fixed and then you have the variable priority fee whereby like half of it is burned do you like this model or do you think it could be improved upon yeah it can definitely be improved upon I think it's not the the priority portions of the priority fee being

burned is not really like incentive compatible like incentivizes these offchain deals or like the goo the jeto auction runs a like different process for tips that 100% of it goes to validators if I'm a validator do I want to do I want to take a priority fee that pays like one soul and only get half of it or do I want to go through a different system could be open source or could be a handshake deal or it's like hey just pay me one soulle on the side and I'll prioritize your packet differently so yeah I think that needs to be fixed I think it's like a pretty easy fix to be honest I don't see that being like super complex I think the harder thing to fix which is all doable is the base fees and just like the

making sure that the network is charging the right amount for Compu units and like the resources that are being used in a transaction yeah so you just mentioned something really interesting which is like the idea of outof network payments and I was curious if you could actually use the Geo client for this because I could in my head what if I sent a bundle with only one transaction is that even possible and if so then can I just send a bundle of one transaction let's say I was willing to pay like one soul in a priority fee then I could just pay 0.51 and the validator gets more so they're happy because half the soul half the priority fee is burned and I'm happy because I just saved like 49% so is that

possible in the goto client and if so are people do you know if that's happening today it's yeah that's definitely uh true I think I don't think it's gotten to the point where like people are like negotiating with validators on hey we're going to send it this way versus this way and we all make more I think it's just like the Jos salon and a block engine just offers like a better service for the network and for Traders where you basically if your transaction lands on chain you're not paying for failed fees and it anything that fails it'll just roll back the state on so you're not actually like loading these blocks up with failed transactions and wasting compute yeah know I think that makes a lot of sense and I tweeted out a chart we'll put the link in the show notes but it was of

salana priority fees and the growth is it's awesome to see it's purely up and to the right proving that people are like willing to pay more for transaction inclusion and so I do feel like this is a really important thing to get right but at the end of the day I I feel like priority fees need to be fixed when base fees get the same upgrade as well is that something that you feel yeah I think there's a few things that are going on right now to improve it one is there's a new there's a new transaction scheduler that's coming out in v118 it seems to be pretty promising I think that will probably be on testnet like January written by one of the engineers Andrew at Salon Labs it seems to be very promising I think it's a much much better approach than the current

one and basically the benefit there is that the transactions will actually be there's basically a better ordering mechanism for priority fees in the scheduler so it's actually trying to respect the priority fee when choosing the transaction to execute and then there's a lot of research on base fees as well one of the benefits of jto system is that it gives Traders this it gives them a strong like carrot like a strong incentive to use it to where they get deterministic ordering on the transaction execution the problem is that it's still super cheap to spam the network so you're still seeing people use jeto and then send trades as well and so I think that figuring out how to charge people more for more frequent

accesses to State I think is uh pretty important I think Eugene at Umbra is starting to write more about this and bringing in some other research Searchers and then there's been this huge discussion on the PW fees I don't know I say p PR or however you want to say it but there's been some discussion on that and then yeah I think that's like a massive design space I think super excited to see what people come out with on that I think that will make the amount of the amount that you're charge will be way closer to the amount of fees sorry the amount that you're charge will be way closer to the compute and like resources that you used on Network so I think that's like where the

stick comes in and it's like hey there's one thing I've been thinking about somewhat tangental about what is the Arbitrage I don't know if there's a terminology for this but what's like the Arbitrage like amplification Factor on salana where if an Arbitrage shows up like how many succeed on that and then how many fail and basically like how do you the more failures that you get in a closer period of time you probably want to charge more for um just because it's like using more resources yeah I think it's a it's a very large design space and I think one of the cooler research problems on salana right now that is pretty interesting I'm I'm not sure if you saw Lex node on Twitter put out a thread like ethereum versus salana like a week ago or so and I

thought it was interesting but there was something in there I didn't personally understand he talked about how State rent is essentially charged to DAP teams and and developers are you familiar with what he's talking about and if so can you explain it to me I don't remember the specifics of the Tweet but I think one thing calling out is that Salon us to have this concept of rent and you could be you can either pay rent or you can be rent exempt and rent exempt is basically you have to transfer Soul a minimum balance of Soul based on the size of the account to the account and kind of hold it in there and if you transfer less than that minimum about balance then you are paying rent and eventually you're paying rent and then

eventually that account gets cleaned up and disappears that concept doesn't exist on Salon anymore so everything has to be rent exempt they just say that like a few months ago I think it was pretty complicated and it's complicated code to manage and then no one was really using it it's just weird that accounts were just like randomly disappearing but like I said one thing another thing is that it really depends on the way that you write the program if daps are paying for it or users I would say most users are paying the rent themselves so when you create like the $2 I was talking about earlier to when you open a validat or history account whoever opens that account it can be the valid area themselves or like

anyone else they are the ones that are putting that money up if you open it account on like margin fi drift Solin like any of these other salana based projects the users paying the rent exempt amount I guess I'll double down on the idea of vote fees because that is a bit of an interesting concept so maybe if you can describe I guess his point was if you're a larger validator since it's stake weighted you're going to propose more blocks and you get the vote fees from those blocks and the idea is that a smaller validator is still voting on every block because that's part of consensus but it's only winning it's winning a smaller percentage of blocks so like the net is over time smaller validators are paying large larger validators in vote

fees so I guess why on Solana does there need to be vote fees yeah Dan you put that one a lot more eloquently than yeah I know like from an implementation level that votes are um they're just normal transactions and they take up the same number of resources actually most of the transactions on salana right now are votes I think people try to be like aha we got you these are all votes it's know everyone knows this like it's fine just they're just votes but yeah they're taking up the same resources and um I guess yeah like it's probably there's probably some form of anti-le in there where you can't just

spin up you can't just like slam a bunch of votes and earn money on it like you gotta um you have to pay for it a little bit but I don't it's not really something I thought about before like why do they need fees probably something that after the podcast is over I'll be like oh this is a good point yeah I'm sure we can scroll through the salana research telegram chat and there's six six answers to why you need them in there but I guess it's a closing question here I want to get your Takeaway on the developer experience on salana because one thing ethereum has done super well is there's great developer tooling and it's it it was just that's a lot of a first mover Advantage so what does what's like a huge pain point in salana that just has

to get cleaned up before you'd be comfortable going to a web two developer and be like oh yeah come on over build on salana it's actually so easy yeah I think anchor has gotten way better than when we started even like mid 2021 like there wasn't an anchor pie now there's like python JavaScript typescript there might even be like go in other languages for Anor so I think Anor has made the experience way better also Anor has just gotten way better as like a framework to use and so yeah I think Anchor's gotten better there's I think once you if you want to get started you have to look at some open source code bases to understand how people structure their programs and like best practices I think

that's getting better with open source code and yeah for a while for instance for a while we were using typescript and typescript to write our anchor test we all hate typescript so much and oh there's this thing called salana program test that you can use where it's like easy to like warp time and like overwrite accounts and test different scenarios it's oh why weren't we using this at the beginning so now it's starting like starting to figure out like oh there's these things that exist that maybe you don't know about that are like deep in the cracks that you need to discover I think there's uh see I think the experience is way better Anchor is amazing there's definitely like some weird things that when you hit are hard to work around that require some

creativity so I guess for instance like there's a inside the virtual machine on salana there's like limited stack space there's limited Heap size and you have to figure out oh I'm doing this in really dumb or inefficient way like I need to I need to figure out like how do I load this account more efficiently or modify this thing more efficiently or how do I avoid like blowing up my stack and then another thing is just like the number of accounts that you pass in is limited so figuring out like how to it's just a different way of thinking about it compared to ethereum so yeah you have to figure out like how do I like structure all these accounts and permissions and everything up front that requires a little more creativity but I think once you like write a program or

to you get the gist of it love to hear that it's definitely on the up and UPS though because ultimately that matters a ton yeah no I've been talking to been talking to George just a little bit like hey when are you gonna make a Foundry for salana come on come on over here there you go that's what we need so yeah I think something like that would be amazing because I know that everyone Raves about that on ethereum and I think having tools like that on Salo would be super helpful I got one last question for you Lucas what like dap SL teams are you pretty hyped about that are building on Sal right now that's for my own personal curiosity I'm like trying to try everything out get myself familiar with the ecosystem what should I be using that's a good question I think there's a

lot of like super solid teams I think one that I'm pretty excited about that's seen pretty good growth recently is Cino it's like actively manage vaults and starting to get into borrow and lend and stuff like that and they have these things called K tokens which is essentially like your LP tokens so you can start to do some it's if you like it's like the liquid staking version of providing liquidity somewhat so I think and it's yeah it's basically actively managed Vault so I think the stuff they're doing is pretty cool a lot of the newer teams that are popping up are like really good I think Phoenix is pretty cool if you just go to phoenix.

trade and you just watch the order book like all of that's happening on salana in real time it's just it's just cool to see that is like updating that frequently and there's like the spreads are like pretty tight on there there's actually a lot of volume on there and like really good Capital efficiency two great suggestions honestly love to hear that yeah there's For Better or For Worse incentive dexes play a role in ethereum Defi and so it'll be really interesting to see if the direction The Kino team goes with their token I have no idea what they're trying to do but definitely something interesting is especially for like LSD if you look at Lido's involvement with curve that was huge that's there's still billions of dollars of stake de liquidity within curve so it's interesting to think about yeah there's some there's some cool real

quick there's some I don't want to leak too much of their alphabet there's some new cool strategies that are coming out that are looking pretty promising oh that's super cool that's super cool I'll let them take the rest maybe we'll have to get the Camino team on here to chat with us about it but Lucas man congrats on all the success that you and jeto have been having I know this was a huge time in huge uh process in the making you guys put a ton of hard work in this and I think before the podcast you said it's a weight off your shoulders but it's really just the beginnings we'll be on we'll be on the lookout for the the next developments and yeah super excited personally for the launch is taking at man cool yeah thanks for having me is always great to come on here awesome

cheers take it easy Lucas thanks everyone hey everyone thanks so much for tuning in today's episode we hope you really enjoyed it wanted to take one more moment to remind you guys about our upcoming 2024 digital asset Summit in London this March seats are limited so be sure to hit the link in the description and use promo code 0x20 to save 20% off on your ticket we'll see you in London be sure to hit us up if you plan on [Music] attending