Metamask is becoming a Bank? - Joseph Lubin. Ep628

Transcript

Welcome to epicenter the show which talks about the technologies projects and [music] people driving decentralization and the blockchain revolution. I'm ants and today I'm speaking with Joe Luben who is the co-founder of Ethereum and CEO of consensus. >> There's been a tremendous surge in our ecosystem [music] and uh a lot more respect for permissionless innovation. Banks are panicking. organizations uh related to banks are are trying to figure out what a world [music] looks like uh where you can essentially have a fullervice bank owned by you in your pocket on your phone.

>> If I were a bank, I would adopt blockchain just for efficiency gains, right? So any bank [music] would and should. So what we're going to be doing is uh furthering decentralization, decentralized proving, decentralized sequencing, and figuring out where ways to to share some value creation, some of the revenue with token holders. And I think we can build a token economy or sub economy with a lot of linear networks uh that are independent, quasi independent or or closely related to one another that are collaborating with one another that are sharing infrastructure.

That's the the vision currently uh for Lineia. >> Hey Joe, thank you so much for coming back on again. >> Dr. Erns, thank you for having me. Um one of my favorite podcasts and you are my my favorite um podcast interviewer. Um you're >> Yeah, you're making me blush. >> You are the best. >> Cool. Maybe um let let's start with kind of some um birds eye questions.

>> So if you I mean you've been in crypto an extraordinarily long time. Um web 3 values have shifted right kind of you came into web 3 after the 2008 financial crisis. I I remember you telling me how you drove across across Argentina um to see whether you could buy up land in anticipation of kind of this >> Peru and Ecuador, but yes. >> Oh, sorry. Uh kind of in anticip anticipation of kind of this imminent collapse of uh the global financial system.

>> Yep. >> And now all the banks are onchain, right? So kind of web 3 was supposed to be this ownership revolution and um kind of what we're getting to some extent is this backend upgrade for Wall Street and I mean kind of like I can see it from this p from this from the perspective of the legacy players right kind of if I were a bank I would adopt blockchain just for efficiency gains right so any bank would and should >> this episode is brought to you by Nosis building the open internet one block at a time nosis was founded in 2015 and it's grown from one of Ethereum's earliest projects into a powerful ecosystem for open userowned finance.

Nosis is also the team behind products that had become core to my business and that of so many others like Safe and Cow Swap. At the center is Nosis Chain. It's a low fee layer 1 with zero downtime in 7 years and secured by over 300,000 validators. It's the foundation for real world financial applications like Nosis Pay and Circles. All this is governed by Nosis DAO, a communityrun organization where anyone with a GNO token can vote on updates, fund new projects, and even run a validator from home. So, if you're building in web 3 or you're just curious about what financial freedom can look like, start exploring at Nosis.io.

The deeper question that kind of plagues me is are we at risk of losing the paradigm shift um kind of that was meant to be inherent to kind of web 3 if the user experience rails and distribution end up owned by the same old incumbents. >> Yeah. I I think if uh if there's any risk and there's a huge amount of risk in the world right now um it's the risk of the paradigm shift accelerating. I started in um the blockchain space when it was called Bitcoin uh in early 2011 and it was crypto uh anarchctic uh it was a bunch of people who uh were technologists and they drew in people

who were very paranoid and very protective of their own assets and I think uh that ethos has significantly prevailed uh in the Bitcoin space. Um uh there were other projects you know starting in 2011 2012 etc. colored coins Astercoin Counterparty, um a whole lot of them. Um uh next was an interesting one, uh that essentially added functions to the protocol, uh rather than uh pursuing Vitalik's idea, which was to add a uh computationally complete uh computer to every node, uh of a of a decentralized network. Um and uh and so that was all about builders um recognizing that this

profound invention of Satoshi uh decentralized trust uh was something that should be everywhere uh and used in as many cases as possible, not just in the the narrow use case of money or store of value, some some aspects of money. Uh and so there were certainly a bunch of crypto anarchist types early in the Ethereum ecosystem. Uh but I think a lot of the the early builders were really pragmatic. Uh and many of us felt that um this is great. We can uh transform uh the world to greater and greater call it progressive decentralization um permissionlessly. Nobody can stop us.

um you know we're antifragile. The US government even can try to kill us uh for for years in a row and uh and ultimately we would just get stronger uh from those attacks uh though move a little more slowly. Um and um so it was all about um building enough um functionality usability scalability etc. so that we could just uh change everything ourselves um if we needed to. Um and then maybe the older generations, the older cohorts would die off and the younger people would be crypto token native etc. Um but uh we we really did uh many of us really did feel uh that uh

uh unless the whole world on boards to progressive decentralization um the paradigm shift will will not be nearly as effective. Uh and so early on um Consensus and uh a bunch of organizations in our ecosystem uh did uh enterprise blockchain to formed the uh enterprise Ethereum alliance and um the uh the technology was used um for consortium chains and things like that. And uh um a bunch of years ago we declared that uh that enterprise Ethereum is dead. Um but long live enterprise Ethereum uh because uh the

layer 2 rollup m uh rollup uh road map um was invented and has grown uh remarkably successful in my opinion. Uh and so you know is uh is a whole bunch of banks and their customers um worse than some of the exploitative things that we've seen going on in the memecoin space. Um I I would argue the ICO space was remarkably uh period era was remarkably successful but uh a lot of shenanigans in that era as well. Um and so I I really do look forward to onboarding u major financial institutions,

major enterprises around the world and uh um with things like prediction markets which you know a little bit about and uh and other things going mainstream. I think uh I think uh Tradfi is onboarding itself to DeFi. Um it'll soon all be called finance and uh and it's going to be running on our rails. >> Yeah, I I I think that's that's innovatively happening. But if you look at the promise of web 3 and kind of if you if you look back over the last 15 years um and you would have to point at kind of um a tangible metric that's gotten better for real life people because kind

of their banks now use blockchain in the background. What would you say that is? Because kind of to me the the value proposition was um to a large extent um that these um intermediaries are no longer necessary and kind of they they are no longer in a position where they can very effectively extract from their users. Right. >> Yeah. So the intermediaries essentially are disintermediated and turned into protocols or their functionality is replaced uh by protocols and uh so I think we've always been about uh uh growing agency uh personal political social uh economic uh

agency uh for people and for communities. Uh companies are kind of communities too. So they should have agency. Um and um and if you look at what's been going on uh since uh the end of the Biden auto pen Gendler administration, whatever that was, um uh there's been a tremendous surge in our ecosystem. Um and uh a lot more respect for permissionless innovation. Um the uh stable coin genius act um um lit a fire under our ecosystem. Um stable coins uh growing and proliferating um are a total

gamecher uh for banking. Um banks are panicking. um organizations uh related to banks are are trying to figure out what a world looks like uh where um you can essentially have a full service bank um owned by you in your pocket on your phone. Um uh Nosis is doing that. Uh MetaMask is doing that. Um and uh how do regional banks uh survive and thrive in that sort of context? uh um how does Swift uh for instance provide uh services uh to um 11,500 financial institutions um using enhanced

technology uh and so um we're talking to lots of banks and uh we're working with Swift and uh and there are some really good answers to that. Um, so it is not the case that you're going to need to be custodying the assets of your uh of your customers in order to provide services to them um and and make a living. If you're a financial institution, other financial institutions uh could potentially um achieve charters and we're going to need some government cooperation on this uh around being uh data custodians, identity reputation custodians, attestation custodians. Um uh a project

uh portfolio company called Spruce ID um is working doing some great work on this stuff. Uh and so um it's going to take time uh for the general population uh to get more comfortable with DeFi. Um so DeFi is probably one of the first killer ops of uh of the world ledger. Um as Ethereum has uh has sort of rearticulated um as Vitalix re articulated Ethereum um pulling it back a little bit temporarily from calling it the world computer. Uh, Vitalik has also articulated that he believes that uh that lowrisk DeFi is now something that uh that could be

considered um by even naive people uh because the uh the financial system, the global economy um is in danger right now. We're at the end of a super cycle. Um, and there is great risk in holding um, nation state currencies in certain bank accounts. And the risk might be more severe in terms of financial repression where where inflation just erodess uh the purchasing power of the savings of people and companies and uh and so uh holding your own assets under your own control uh in your own personal bank and and exposing them uh to yield and investment opportunities in an

ecosystem that has been growing exponentially. um for the last 10 or 15 years maybe a good idea compared to uh being exposed financially to a global economy that is uh is careening towards a brick wall uh in the form of the end of a super cycle. So I'm I'm very optimistic that we're going to move into the next super cycle um that will be heavily supercharged by AI and we'll be operating on decentralized rails. But uh um there's a there are ways to to bring um the legacy infrastructure along for the ride. A lot of the stables that we see today in web 3 are just rappers for

legacy currencies, right? So kind of USDC and USDT are backed and supposedly supposedly probably backed um one to one by US dollars in some sort of uh escrow custodian account. So kind of like if um if if the if if the US dollar kind of cr towards towards the edge, what does that mean for um a defa landscape that is very heavily built on these uh these transpositions? >> Yeah, if it cares towards the left edge, it it could be concerning. Um so I I think of uh um backed stable coins uh to be a tremendous validation of our technology also an existential threat

potentially uh to our technology as you've suggested. Um I think of it of it as a transitionary step. Um uh I would love to see I would love to have seen die continue on its pure path. Um, liquidity I is a very cool protocol that uh makes use of decentralized economic bandwidth um basically in the form of uh of ether or other decentralized instruments um serving as as collateral uh so that you can um it's a complicated ecosystem but you can basically lend yourself um some stable coin against your own collateral. uh and uh that's an

incredibly important construct, but we need Ether um to go through the roof in price. We need Bitcoin to go through the roof in price in order to be able to mint enough stable coins uh based on that mechanism. In the meantime, there's a really interesting uh political uh economic transformations underway where um China, some other countries are are going to have to pull back on lending money to the United States. Um Japan's um raising rates and is probably going to pull back a bunch of its money and and throw the world into a a much less uh carry trade uh driven world. That

should be very interesting. Um and Scott Bessant um Treasury Secretary um has um crafted a strategy where the US can um borrow money from many organizations around the world uh that are effectively involved in uh in doing genius compliant stable coins and uh and they're either putting dollars in the in the bank or or holding US treasuries in custody. One backing stable coins one for one and I think the United States government is going to be uh very aggressive about that strategy. Um Scott Beston indicated it he thought uh probably hit 3 trillion in stables. And

so that is a transitionary um political economic uh phenomenon or moment uh that embraces our technology drives our technology forward drives the price of Ether uh and Bitcoin higher much higher hopefully um enabling um we don't need a full replacement of uh of backed stable coins in our ecosystem. we just need to bootstrap uh properly decentralized stable coins in our ecosystem. um a really nice side effect uh for people around the world in countries that are say more problematic uh than Germany or or the United States um is that uh uh if you have a despot um

who is financially exploiting the population uh via monetary mechanisms or getting into deep debt and financially repressing the population uh printing much too much money um it's great to have either tokens like Ether or Bitcoin coin or stable coins um that are tracking the US dollar or other denominations um to put your money in. Um in some cases you need to hide your money uh from p family members that that might take it from you. In other cases you just need to protect yourself from the governments. Um and if governments uh lose their ability uh to financially exploit their populations um we could see some positive political

ramifications. Um I know I'm saying this at a moment uh of extreme chaos um in the world. We are at the end of the an 80s something year uh super cycle. Um and a lot of stuff is breaking and kind of has to break. Uh that's what happens at the end of super cycles so that uh uh the new system of the next super cycle uh can establish itself. So what do what do you recommend for the ecosystem to kind of build um in anticipation of this collapse because kind of like currently we're kind of transposing a lot of the old mechanisms on chain and they will just collapse with the old mechanisms right so what what do you what do you

think is the infrastructure and the projects we need to kind of see us through this >> so I I think keeping a bunch of the old mechanisms as healthy as possible um to facilitate as smooth a transition for humans as possible is a good thing. Um like smashing into a brick wall uh would be bad. Um and doing that sort of thing might make it easier for uh nefarious actors uh who have guns and things uh to take control of a very uh uh of a very broken situation. And so I I think we need to remain as functional as possible uh while organizations like ours um continue to build infrastructure

scalability applications um that uh that can enable people to to transition to um the next economy. Uh and so what are we building? We're building wallets that that people uh fully own and control. Uh we're building decentralized finance uh so that uh uh people can participate in in funding the development of the next um economy um and uh and can earn yield uh as uh the next economy accelerates because uh money in the next economy even though it it's nearly free to print magic internet money um it's uh you know

the really good ones um are valuable are scarce and uh and they uh earn pretty good yield if you're trying to acquire them, borrow them for for different things. Um so our ecosystem is likely to see um pretty good yields uh compared to um the legacy economy. Uh we'll see how that goes, but uh looks like we're going to move into uh another accelerated uh money printing phase. um and um building things that enable people to express themselves better. Uh prediction markets uh are a great one uh that we've talked

about for many years that uh enable the world um of people who think they know the truth about different issues to incentivize the people who actually know the truth uh to share the truth. Um sort of like a a consulting fee. I think that's going to be u great. Uh, I think we're going to have a lot of revol revelations uh over the next uh few years about all the um the shenanigans and and just utter rot um that sits at the at the core of uh of our political cultures. Um so looking forward to that.

Um and I think it's going to be about empowerment to to do things. I think uh uh the social media social networking uh industrial complex um is unbelievably toxic. Um and you know it's uh it drives polarization. Uh, I think if you look at uh uh the people in small town Germany and small town America, they're probably isolated from a bunch of the madness that uh that we think is the state of the world if we're paying attention to to Twitter uh and certain elements of uh of uh mainstream or social media. Um I actually think that uh a lot of the uh

the polarization and the narrative around um collapse of uh of the system of the world. I think a lot of that is a manufactured narrative. Yes, there are big changes going on. Um but uh but I think uh um I think there are owners of all the uh all the different industrial complexes whether it's uh social media or educational or scientific publishing or pharma or food or military. Um and so uh we do live in a a manufactured reality. Um and the opportunity is for um reality to become a little more decentralized if we uh uh if we start building applications on decentralized

rails like blockchains. If we start building applications on decentralized networks of decentralized social graphs where our decentralized identities are wired together uh via attestations and reputation systems and and when they're platforms uh where we can add content to our social graphs uh tokenize our social graphs earn money can add functionality to our social graphs. we can the owner of a social graph can earn tokens potentially uh the owner can share those tokens with people contributing value u to the social graph and uh um so it shouldn't be the uh the big corporate

owners and uh um making use of of AI to exploit us uh who are who are making money uh from user generated content it should be the people who are uh in control of all that and and benefiting from that and uh uh we need a lot of infrastructure building in order to make that happen. But uh as soon as they're good platforms and people can start making a living um and feeling like they're not being manipulated and and driven a bit crazy um from plugging into social networks, uh I think they'll probably be a flipping of uh of how people engage in in social networking going forward. So I look forward to the

the big social network companies uh shrinking quite dramatically. >> That sounds like a wonderful vision for the future. And it sounds a lot like kind of like this ownership narrative, right? Kind of like this. It's it's a platform. It belongs to no one. Thus it's thus it belongs to everyone narrative, right? Um where there's not one central counterparty or one bottleneck that kind of sits in a position where kind of they can >> you need blockchain characteristics. So, you need guaranteed execution, permissionless innovation, censorship resistance. Uh, so um and and we need scalability. We've gotten to the point where we're we're really close to having good scalability. I I yeah I want to talk about scalability in just a bit but maybe kind of like if if you look at

applications we see so far mostly we see um yield applications where somehow web two yield or web two financial stack yield is redistributed to kind of web 3 protocols right so kind of the the the yield on stables comes from the fact that kind of they are they they buy T bills and kind of then rather than um kind of eating this up themselves, they kind of somehow redistribute it to to uh to the DeFi users or the low-risk DeFi users. Where do you see the where do you see the applications um that actually give back ownership to users of their data, their identity, their audience,

their content? Because I I I I mean I I I know all the experiments, but none of them have really caught on, right? >> It is transitional. were in a transitional phase. Um when cars were invented, uh uh there were laws where people had to walk in front of the cars like they walked in front of horses and and carriages and uh um uh that's because the roads maybe couldn't handle fast cars uh moving down them. Uh when TV was invented, uh nobody knew what to do with it. Uh so people stood up with their scripts and they they read radio plays in front of the cameras. Do you think we'll get there?

>> Um, yeah, of course. I think we'll get there. >> Maybe I'm maybe I'm just impatient. So, I mean, this patience has never been my prime virtue. >> Most people don't see uh the world in terms of flows. Um, uh, if you look at crypto Twitter, everybody's looking at a slice of time uh, and whether their tokens are up today or down today. Um, and and either the sky is falling or or everything is great. Uh and so if you start paying attention to the flows and and we've made unbelievable progress uh since 2009 or or 2014 uh for Ethereum, a civilization um has now um effectively started

embracing in earnest uh decentralized protocols. Um so we're seeing it at consensus because we're talking to um governments and and big companies especially in the financial industry um and they are all asking um for help in understanding this stuff or in building on this stuff. >> Maybe let's talk about consensus for a bit. So kind of consensus is um an unusual company to say the least, right? So if if if you were starting if you were to start consensus again today with kind of everything you've learned over the past decade more than a decade um would you replicate kind of this hubb

and spoke structure um that you pioneered back then? >> I spent a year uh roughly on the Ethereum project uh helping with a whole lot of people to to stand up the Ethereum project, the Ethereum Foundation etc. Um, and I think it's important to note that uh as we did um we did talk to some VCs back then um and we we did make the explicit decision not to take VC money directly. VCs for free invest in the token launch but uh um we felt like we um had to be uh a very different kind of project, a different kind of organization. It had to be uh as

decentralized as we could make it um and progressively decentralize it. And uh the token sale had to be uh open, free, and fair. Um and uh we did a lot of the legal work to make sure that uh that we wouldn't get into trouble in the United States uh if we allowed uh Americans to to participate. and uh got a a piece of paper um from a law firm that uh that gave us confidence that we could go ahead and do that. Um and that has stood up um despite uh attempts to to tear it down. Um and uh and we didn't hire um in the sense that we didn't uh um put up um

job wrecks, job descriptions and things like that. um basically anybody who wanted to self- select um to become part of the Ethereum project uh they were virtually instantly on the Ethereum project and uh um and so it was a a band of pirates band of characters um sometimes there were issues um interpersonal issues but uh I don't think that uh Ethereum would have been seen to be uh open permissionless um and something that moves towards civilization scale technology. Um if we were a company uh like a traditional

company to start um and so uh a year into it um I wanted to do something um essentially based in the United States because uh Ethereum people were afraid of the United States back then. Uh but I was a little less afraid. Um and uh and uh it was uh it was about continuing the vision and the mission of the Ethereum project and uh we knew that we couldn't design um an ecosystem whether from the Ethereum foundation or from consensus.

We couldn't design the decentralized protocol world top down. Uh we had to just do a ton of experimenting. So uh it was uh it was pretty decentralized and people made fun of it uh because uh we we're trying to figure out how to govern ourselves and uh and what to build with the the technology. You know we tried to build an accounting system. We tried to build a DAP store uh and we realized hey we have no developer tools um we have no ecosystem really um and so why don't we uh build a little infrastructure uh to enable us to interact with this raw technology so MetaMask emerged from that

and uh Infura emerged from that and uh Truffle uh emerged because Tim Coulter was trying to build a DAP store and uh and just the scripts that he built uh in order to to build an application ended up evolving into um a pretty useful developer tool that was used by many for many years. Uh so um Consensus uh uh has been different organizations um over the years. Um so there's a an initial mothership company called Consensus Mash and it went through a bunch of pretty powerful or radical uh evolutions in in its nature. it uh paid a lot of attention to enterprise Ethereum for a

while. um some projects uh spun out uh because of the the COVID challenges of consensus mesh to form consensus software and uh and it's been uh very tight integrated software product company uh extremely different from the uh the organic blob uh that consensus mesh um was and and had to be because uh early on mesh was all about fostering adoption um educating talking to anybody who who would listen to us. Um, and incubating a huge number of projects, many of which, uh, including Nosis, um, spun out of consensus. Um, uh, some with great success, uh, some with not so

great success. Uh, but, uh, uh, we did, uh, we did seed a lot of activity, uh, in the, uh, Athereum ecosystem and, uh, and so we have a lot of friends out there in the extended consensus network. I I think it's um completely uncontentious that so much value has come out of consensus over the years for Ethereum. And I I think you're 100% spot on that Ethereum needed a business um to kind of to kind of drive adoption. If you look at the individual parts that kind of make up consensus and I think I I I kind of maybe I look at this because

I feel sometimes we're kind of like in in a similar albeit much smaller boat. Um so kind of um would do you think some of the projects would have been better off kind of on their own rather than as part of this um um of this often unwieldy mothership structure. The social contract uh back then was that you could spin out um you know it it had to make sense and um and uh it had to be pretty broad agreement but a lot of projects uh got financial and other support to spin out of consensus and I think we we spun out over 40 projects that uh that were

incubated inside of consensus and and invested in in many others that weren't incubated um inside of consensus uh projects like MetaMask um spent a lot of time figuring out not just what their business model should be, but if they should have a business model. Um so there was uh there was a lot of interest early on in just uh setting up a foundation and treating MetaMask as a public good. Um and don't worry about making turning it into a for-profit endeavor. Um and uh the reason that uh so MetaMask had pretty good distribution um starting in uh 20 late 2021 uh as DeFi 1.0 you know, happened and then the

the NFT phenomenon happened and uh and the only reason MetaMask um ended up being in a position to make money was because uh we absorbed uh a team called Air Swap. Um and they were they were the people that that built uh uh the infrastructure that enabled us to charge for swapping and and have added uh a lot of features uh since then. Um so would MetaMask have been better maybe the world would have been better off uh if MetaMask uh uh remained a public good infrastructure um and maybe it's moving in that direction already actually um because uh we're trying to progressively decentralize a bunch of uh the elements

of consensus. Um um I think you um uh were better off spinning out uh because uh >> I Yeah, 100%. Yeah, >> back then um I I thought that you all could become a hub in the same way that uh consensus uh was a sort of hub and spoke like model and you've done an amazing job of that building a bunch of uh integrated um very valuable components and um so already massively successful and I think uh your future is going to be um very very bright um as uh as we all move into of the mainstream.

Um so I we go through a lot of examples but uh um I I think you know roughly uh we made pretty good decisions along the way. >> Yeah. So I mean we we were the first spin out I think. Um and um >> many too. >> Yeah. And uh yeah and um uh yeah no regrets. So I think it worked out well for us and you guys. So it's uh yeah um so the the two big pillars inside consensus right now linear and metam mask right I mean so there there are still big pillars that are less less visible like infura for instance um and and uh diligence and so on um but but talk me through linear and meta mask

first. So kind of how do you see them fit together reinforce each other or kind of do do you do you see them as somewhat orthogonal? >> MetaMask um as I already articulated um we're seeing as uh your cell phone uh personal wallet in your pocket or or on your laptop and and we think that uh uh MetaMask can become a a full service bank. We think uh it can start speaking ISO2022 like other banks and uh become uh infrastructure not just for people and communities and companies. I think some of it could become decentralized and become uh sort of back-end infrastructure uh as well. Um, Lineia uh

is a technology. Um, it is a leading ZK EVM technology. Um, we're hoping to see it uh natively enshrined um in the Ethereum protocol at some point in the not too distant future. And uh with the the pace of innovation of real time ZK proving uh things are looking like uh Ethereum is going to get remarkably scalable. So >> it's going well and we're hoping Line is a big part of that. the scaling issue. So kind of Ethereum has kind of in the past couple of years kind of had this paradigm around L2 scaling, right? But now kind of it looks like L1 scaling may actually come much faster than we had

>> um we had originally anticipated with realtime proofing. And it it it looks like possibly the the true bottleneck is is networking which would be wonderful. Um h how how do you see that and how do you see see that in context of the L2 landscape? How do you foresee the the future evolving here? >> So we'll have to get back to uh to that initial thread but uh let me run with this one. I think scaling has all been enabled uh by the rollup ccentric roadmap. um we were trying to scale uh Ethereum in different ways, plasma sharding, um etc. uh and we simply didn't have the technology to get that

done um in the pure layer 1 context. And so um the roll-up road map gave a lot of really smart people and entrepreneurs uh permission and incentives uh to take approaches whether they're optimistic approaches or or zero knowledge approaches. uh to building out scalability. Ethereum layer 1 seated its pricing power uh for a while um and made explicit uh choices in in the protocol to enable rollups to establish themselves and flourish and really build out the technology. Um uh back when we uh so we have a protocols group uh that uh produces an execution client called

Basu and Teu consensus client and we've been building clients for a long time as have you uh for the Ethereum protocol. Um and we've always had an R&D group in our protocols group. Um and the R&D group was doing a bunch of work uh six or so years ago, maybe longer. Um in zero knowledge proof technology. Um a a couple three years into that um uh it started to become clear that hey uh we think we could build a rollup uh because the technology is moving much faster than we thought it would. Uh and so that's been accelerating exponentially since then. Uh we built

Lineia. Um Lineia has been accelerating exponentially. Um Lineia today is uh Wednesday, December 3rd uh 2025, otherwise known um as Fusaka day. Um and traditionally Lineia has been out of sync uh with the with the hard forks. Uh and but Lineia's been improving its process all along. Um and over the last few months we've uh implemented four or five different hard forks. Um and for the first time uh we're actually launching Fusaka uh for Lineia on the same day as uh as the rest of the world

which is a a really remarkable feat in my opinion. And so we're seeing uh Justin Drake demonstrated that uh that two GPUs are able to real time prove uh um some blocks. I'm not sure which blocks uh they they were proving. And so we're getting to the point and this is something that we anticipated in our R&D group years ago uh that not only is ZK going to be the direction of travel for layer 2s um but ZK is going to be used horizontally uh in messaging um and ZK is is going to make its way uh into the core protocol and if consensus wanted to be a core protocol company um then we would have to be expert uh with with ZK

and so uh it's all working out in that direction it looks like and uh uh I think we're going to uh see a very fast uh very performative uh layer 1 for Ethereum um that has very useful things for layer 2s to do and it's all saturated by super fast CK realtime probing uh accelerated by hardware at some point soon um I think uh uh layer twos layer threes layer fours and higher are going to have uh real utility. Uh they're going to represent uh uh gaming domains or topical domains or regional domains. Um it's possible that the the

country of France may may not want to share a layer two uh with the country of the United States because it would want to divide some have some political divisions for for its uh provinces and uh um and United States might have political divisions and Switzerland isn't going to want to have uh a bunch of data leaked outside of its uh national layer 2 borders. Um so there there a lot of good reasons uh um for the rollup ccentric roadmap architecture to be uh incredibly useful and valuable um for the next economy in the next uh geopolitical map

>> the anti-etwork states >> exactly love it. >> Um >> so do you want me to go back to talking about what linear is? I I sort of described uh meta. Yes. Yeah. You you go go back to Lineia. I think that's a good idea. >> Yeah. Um so Lineia is a technology. Um Lineia is a network Lineia mainet. Um and uh we're putting lots of effort into that. We've tokenized, we've decentralized it into a Lineia consortium. Uh we've got uh stewards um from across the ecosystem. Uh we're adding one steward uh that we're about to announce in a in a few days. So don't

want to frontr run that and these stewards are very aligned uh with the health of the Ethereum ecosystem and obviously the the Lineia ecosystem as well. Um we have a giant uh ecosystem development fund in the form of the the linear tokens and the Lineia consortium and technology is available uh for others to build on. Um so um Swift um consensus is building on the linear technology for Swift. Um we're uh working out our privacy technology um and we think we're going to be able to do something u pretty profound uh between MetaMask and Lineia connecting to one another um via ZK maybe not

best-in-class but uh one of the best-in-class uh privacy solutions. Um so we think that uh Lineia itself uh has a business model. It is credibly neutral. Um permissionless innovation uh we don't control it but we're leaning heavily into into making it successful. Um so between um Infura which is decentralizing itself into Den decentralized infrastructure network um so ser protocols enabling um the range of MetaMask to to grow uh as fast as the ecosystem grows as fast as protocols can onboard themselves to decentralized infrastructure network. uh Infur is helping Den out uh quite significantly

and Den is uh uh is run design founded by uh EG Galano who uh was a founder of Infura. Um and so uh between those different elements uh what we're looking to do is what traditional companies have done um verticalize uh and so how do we verticalize in a way that is different and much better for everybody? um than the way the the web two walled garden company is verticalized. Uh we we do it while maintaining as much credible neutrality at each layer as we can. Uh so so there are things that we can do um that unlock synergies between MetaMask

uh and Lineia and some will be forthcoming. Uh don't want to frontr run those things but you know things like uh our new rewards platform uh makes use of both. Um and there'll be more on that front. Um but uh we have to figure out how to maintain the balance between uh some useful verticalization to make uh products better for people and companies. Um and making sure there's credible neutrality uh so that uh nobody feels like they can be deplatformed by us uh and everybody feels like uh uh there's a long tale of innovation where they can um build in the metamass context build in the linear context build in the DIN context and uh and just

uh add value to the ecosystem and and nothing we can do to stop that and lots we can do to foster that. I think this is something that um the ecosystem often doesn't give you enough credit for and you probably get a PR briefing document before every interview you do that says don't don't compare yourselves to competitors because I know this is what what I get but um maybe I can do this so kind of on on linear you can deploy your own rollup without permission from you guys where whereas kind of like if you look at the other major stacks it's actually very much not permissionless you actually need sign off from uh optimism to kind of to launch an op stack uh roll up and I think most people

aren't actually aware of this and it's crazy right kind of like this shouldn't be yeah this is this >> it's a business model um and if it works for them it's fine and not crazy um so what we're going to be doing is uh furthering decentralization decentralized proving decentralized sequencing etc uh figuring out where ways to to share some value creation, some of the revenue generation um with uh with token holders, linear token holders and and maybe it's just through burning more linear tokens and um and I think we can build a token economy uh or sube economy um uh with a lot of linear networks uh that are

independent, quasiindependent or or closely related to one another that are collaborating with one another that are sharing infrastructure. Um and uh I I think that's that's how the the next uh geopolitical landscape gets built out uh somewhat bottom up. Um with a lot of uh a lot of projects showing up and and finding synergies and colllocating on different networks and lot lots of those projects will be on multiple networks and will be citizens of many different network states. the the vision currently uh for Lineia.

>> Yeah, I mean permission is innovation and uh true composibility. I think that that'll be um a huge unlock. Um >> we kind of >> one last thing we would like our relationship to Lineia uh to be very similar as our relationship to Ethereum. Um uh that Lineia should be as Ethereum aligned as possible, 100% uh Ethereum compatible. Um and maybe there's a time when uh uh when the architectures can evolve so that uh maybe overflow activity at layer 1 gets handled by different layer 2 networks. Um so I I think uh uh we'll see we'll see quite a bit of architectural evolution over the

next decade or two. >> Absolutely. Um so we probably have time for one more question and I want to make it a good one. So if if you kind of I mean you are a um remarkable optimist and a pessimist at the same time. So maybe maybe do do the doom thing. So kind of what what what do what keeps you up at night about the ecosystem? So kind of what what do you think um is the one thing kind of we need to get right in the next one or two years? So kind of are you worried about validator centralization or custodians or L2 interop? What are you worried about? Um, I'm not worried about anything uh specifically related to the evolution of

our ecosystem. Um, because um the ecosystem is so big and anti-fragile and self- sustaining. Um, we've um gotten over a lot of very difficult humps and uh um it's hard building civilizational infrastructure uh in the middle of a civilization that doesn't care or wants to kill you. Um uh but we've made remarkable progress um there are so many technical issues um in our ecosystem, the Ethereum ecosystem. Um but we're aware of most of it or all of it. Uh and there are so many parallel efforts uh to to solve all these different issues um

whether it's throughput or latency or composability. I mean, these are just obvious things that uh that really just require engineering solutions. There's nothing um existentially difficult about these things. We just have to keep working on them. Um and we're we've got the wind at our backs now. Um US government wind at our backs. The much of the globe is uh following the US in terms of uh getting more comfortable legally uh with the technology and uh and the mainstream. So we don't have any users yet. We don't have any applications yet. Um and uh and that's I think largely because of scalability and usability issues and uh and because it

was effectively illegal to do things in our ecosystem in the United States, illegal for companies to hold tokens or issue tokens, illegal for builders to uh to build something innovative. um because the SEC would uh would slap a lawsuit on you if you if you started to to look successful. Um but now it's legal um and everybody's all the organizations are trying to figure out how to rush in and the builders are coming. Um so we're going to see so much innovation in in terms of uh uh building novel things um largely in DeFi uh hopefully in social and gaming and other things in our ecosystem. So hopefully uh

the uh global economy um will hold itself together in 2026. Uh if it does, it'll be an epic year uh for the Ethereum ecosystem. >> Cool. Joe, thank you so much for coming on. Where do we send people to find out more about you or Consensus, MetaMask, Lineia, all the wonderful things you're doing? >> Um, Ethereum Joseph on Twitter. Uh, consensus.io on the interweb. >> Perfect. Thank you so much. >> Thanks, Frederick.