Solana's Metaplex Sparks Heated Protocol Funding Debate | Roundup

Transcript

[Music] this episode is brought to you by velora velora is a self-custody mobile first wallet and the easiest way to send swap collect and purchase digital Goods on the cello blockchain download the app and start exploring today at valoraapp.com forward slash Empire come back to Empire uh Jason's out in his honeymoon shout out Jason wherever you are hope you're having a good time Garrett uh The Man Behind the Scenes who does everything and makes all this happen is here with us Garrett welcome to show you you've been on it uh you are usually in the background critiquing uh our terrible takes and whatnot making sure we don't see dumb stuff in the Pod but uh it's great to have you welcome

welcome back yeah it's great to be on I think I was on probably about six eight months ago so I've been on here twice but yeah always behind the scenes I don't have to edit much so you guys are super smart but it's fun to be part of it it's fun to be back on that's awesome well there's a lot to talk about I feel like uh there's a number of developments uh why don't we just get straight into it um should we first talk about Nvidia and the fact that it just uh had one of the biggest candles uh in what I've seen is like it added what the entire market cap of Eve uh after reported earnings yesterday it was up like 26 percent which is wild so walk us through that yeah ABS absolutely nuts I mean I'm not gonna lie I'm not somebody that follows

this extremely closely but like you said Nvidia is up over 200 billion after last night's earnings when they beat it the big thing in the video is just there's been this huge trend of AI right now and they produce gpus and you talk about the last like more than a decade it's been you have oil and now data is a new oil and gpus are what enable that new compute economy and that's why Nvidia um some people was in a meeting this morning with our analysts and a lot of people think it's over hyped um maybe in the short term but I'm I'm pretty bullish from this whole AI sector and it you know and it's it's interesting because you see this with AI um and you and I think some people are like okay this isn't the Zeitgeist it's becoming a bubble um and comparing it to something like

autonomous trucks where you had these companies like too simple and Nikola the nickel is the one with the fake truck demo uh that came out um and Embark and these are done through specs and you had 3D printing I remember when I was in college um 3D printing was huge and everybody was like I'm gonna put my money into 3D printing stocks and at the time honestly that was like outlet for crypto that people didn't know about crypto and it it kind of disappeared and it's now though and coming back up in dental offices and like making teeth and then I think 90 I heard 90 of hearing aids now use 3D printing so um it's pretty cool I'm curious your thoughts and like I know you're mostly a crypto investor but are you not investing in AI I actually added Nvidia like three weeks ago to my portfolio

after I I saw uh two weeks ago after I was uh Stan druckenmiller was on the stone conference and he uh he was uh got a great interview and he mentioned a video you know and I when whenever Stan Doug Miller talks I listen and um I I have been adding my exposure in the public markets and deploying a very unique strategy uh to capture yield um doing some instruments not direct investing but like more derivatives and type of instruments were like I get paid a coupon and I can I have the option um to buy it at a 30 like you know a strike set 20 30 40 on the downside and so if the stock ever goes down below that I I settle it after a year like

different majorities and so my view on the market generally is I feel like a lot of it is um there's more downside here than upside uh every sort of I've been the last two three weeks I've been spending just really listening to traditional capital allocators from Bridgewater to Stan grunken Miller and a bunch of other folks feels to me like that like the consensus that I'm hearing from them is you're not getting paid enough to be long in the market right now I mean we talk about like we're in a bear Market but look assets rallied considerably since the beginning of the year like crypto's up what eighty percent uh the Market's up 40 some names are are much higher um what is interesting though is like a lot of the rallying traditional markets is encompassed and and concentrated in very

few names especially in Tech like like you know Google Amazon uh Facebook um Apple stuff like Nvidia um and so I think I just uh I I want to be long market like long term like five ten years but I feel like there's there's more downside uh right now particularly like you know just time and time again I mean I feel like people are really uh set to I feel like most people are said to be disappointed when you think like oh the fed's kind of like no longer gonna hike but inflation continues to be sticky and like we keep moving the gold but it's like no this is the last like and this is the last like and so I think like across the board I feel like um

particularly in the US I think things are pretty expensive and so I I want to capture yield and so a lot of these instruments pay a nice coupon of like 10 15 20 even like I did one with none of this financial advice but like coinbase which I don't think it's probably interested in the market like most people don't understand it and so I feel like I always over the years have asked people do you think that coinbase over like underperforms or like outperforms something like Bitcoin because it could be a really Capital efficient strategy to be long crypto um so anyways long story short I have been spending more time in the public markets um and I'm not of the mind that like I don't want to be long right now but I do

want to capture yield and there are ways to do that um and this instrument that I'm referencing is a reverse Auto call convertible no it's like a long way of saying like yeah but anyways uh yeah I I pay attention more yeah yeah that's interesting and I like the fact that oh you were talking about coinbase right there um I I do think I mean again not Financial advice I don't know but it is curious like how that would perform in the upside and really coming into this weekend like this call I was just thinking about the markets and um honestly like even though there are movements and if you're deep in the attack there's constantly new Innovations it does just feel like I was like Santi how do you how do you manage during this time because it reminds me of 2018-19 um that like there's not a lot of price

action everything every time the market goes up by 10 it seems to come back down um there's a lot of like L ones and different tokens that are now not not hitting like their lows but you know I don't know it seems like a little bit of lost momentum um and AI has more or less consumed a lot of people's attention and you know I even this is seen yeah yeah I think this is the best time to look bear markets or or crabby markets or whatever you want to call them are quieter and allow you to really like just think about the assets that you want to own and one exercise that I've been doing recently is I look back on it the things that I would have at the at sort of the

and during the bull market there were a couple assets I wish I would have bought more of that uh and those are the things that I just go back and one revisit what I want to own them today and that exercise ultimately you know you look at the fundamentals and you could argue one of the fundamentals in crypto but I think then someone asked me that and I told them that I'd talk about it during this podcast and I think the fundamentals for me crypto like you know a lot of it a lot of crypto doesn't have product Market fit I get it but I think the fundamentals that I look at are Developer activity um I think that is is like perhaps the most important thing in an open source context where you want to look at where developers are gravitating to and building

um and so yeah I just have a list of things that I I go back and say these are the assets I was really excited about that I wish I'd own more in the bull market I want to look back and say would I want to own them today and if so then it's a great kind of like starting point of of looking at and and like kind of calling the shopping list um but yeah you know I I think uh you know people are chasing certain narratives I don't have a particular opinion on on AI I play Chad DBT on The Daily I think it's quite useful um you can make certain bets on it and you know this week alone I was Pitch three kind of crypto plus AI startups

some one of which is particularly interesting I'll probably end up investing in others which are like not so much but um yeah yeah Yeah the more the and the more important thing that I want to talk about and I it's sort of this idea that I don't know I think we'll look back and it's always I always come back as like in five ten years it's sort of like you know cryptos roughly a trillion dollar after class with some inflation baked in but nonetheless like one trillion that's like absolutely nothing in the grand scheme of things yeah but it it survived for 10 years plus uh it's it's an interesting asset class and so you've got to remember like most

allocators haven't even touched this after class um and a lot of things are really kind of lining up I think uh the regulatory activity happening in different jurisdictions with the Europe Middle East like places like Dubai it's encouraging even in the US as well you have like you know in you have elections coming up next year right and and crypto is is a important topic and I think in the context of innovation and and where the US wants to be on a geopolitical level and so ultimately I think um you know anyone that is listening today and has lost conviction in this space and has been around for like five six seven years like it's kind of important

to like look back and say would you have thought that crypto had been so important election or so far in the public context and seeing like a lot of these Brands build and it's particularly in the nft space like I just think that sometimes we forget about these things well I mean you could sort of have to pinch yourself and look back and say yeah I think we made a lot of progress and price is one thing and unfortunately it's kind of the the thing that we most latch on to to understand if we made progress or not but I don't think it's it's useful in many ways I I and if you're going to look at Price all day you're going to miss uh and you're gonna spend too much time thinking about price and not not enough time looking at what's happening under

the hood and of course we like to do it here right we talk about interesting developments and so anyways this is a good time for me to shut up and move on no no it's really good I I think one thing that I'll probably describe wrong but we just had Don Wilson on 1000x which is a podcast that actually drops on the Empire feed every other week and he talks about how with Bitcoin um is a negative convexity asset to him I think this is one of the harder assets to trade and that's because as the price goes up as an investor looking at Bitcoin there's actually more likely that it gets adopted wider throughout the world in the community and used as a store value but as price goes down it actually like spirals downward right because Bitcoin more or less right now is not necessarily a technology or

something you build things on top of it's a sort of value though looking at other use cases where when you think about things in defy um that's not necessarily true right to me the price is less directly connected to what's being built because you just have all these different projects being built on top and I'll I'll talk about it later but it's just like curve is doing a lot of fascinating things with I'm having like safety and liquidations and their new lending protocol and they have a new curve stable coin um there's a lot of Innovations and I think the last thing I'll add to this like little AI bit before we go on because we are not an AI podcast but I do think it'll be part of the future is that uh I actually think it's amazingly bullish for crypto so I think in like one way

um when you think about audits like that's a huge problem right now in crypto I think that AI will come into this and can make it a lot safer now you can also have uh you'd have ai Bots that come in and try to exploit protocols but I think more or less it's going to be extremely positive and it's going to enable smaller teams to have that like built-in security and I think on top of that it's going to allow like for the proliferation of new projects because kind of like with Facebook you think about how you have content coming out through users like me and you but you also have like the Wall Street Journal posting on Facebook um and with AI it's just the proliferation it almost makes the marginal cost of creating content free but also when you think of content like

really that can just be code right at the end of the day that's what it is so I think if anything we'll see more things pop up in crypto and you know getting ready for a new podcast called Lightspeed and one of the the projects that I'm following are writers is uh Ben Thompson with strategory and he talks about um a lot and how Airbnb for the first time commoditized trust uh and by what he means with that is like when you were traveling before Airbnb was along uh you look for the hotel that had the biggest brand because no matter how expensive it was or how sanitary I said sanitary how like um less local it feel felt or um it didn't matter how great the hotel was but you chose it because you trusted it and you couldn't really trust staying at someone's home for the first time Airbnb

made that different where you could go and sit at people's homes um and that was through the photos and the ranking systems by making it digitized um and because of that they basically disrupt the hotel chain I think the same thing could be happening with um crypto in that like right now we have trust in Banks and certain Neo Banks and financial protocols but for the first time with crypto we're trying to disintermediate that trust and hopefully AI can mean more of that uh my my thesis for for AI and crypto at that intersection is very simple which is it's probably the only way to prove Humanity yeah and and second to train data I think the overtime on blockchains are data rich and so when you think about

you know training a model with pristine data that is immutable recorded on a public blockchain accessible to everyone that's quite useful to train these models over time and so you know I think uh those two things uh make me interested in AI in the context of crypto but you know we should be highly skeptical of people that are you know gonna try to hike both crypto and Ai and so yeah anyways you said it best we're not a VI podcast yes right I was kind of came to talk about AI all the time agreed well maybe uh let's move on to another topic that I think was honestly it's not really all

over Twitter but I do follow a lot of the people in the Solana community and it's something that came up and I think it connects with the broader theme of just how do you fund the development of public goods so I'm gonna give a super quick high level overview um I'll probably mess up the technicalities but this is kind of what's going on so metaplex uh is a salon and protocol that allows for the creation minting of non well nfts non-fungible nfts um it allows for auctions the visualizing of nfts in a standard way across wallets and applications um and last time I heard over 99 of Solana nfts use metaplex for that so they have really dominated the nft sector um they came out with an announcement this week so right now it's not a it's a protocol but it's not like a frozen

protocol and then it's not immutable at the moment so uh what metaplex really does is metadata that's attached to these nfts as well so that's something that you want to freeze because you don't want to have one centralized more or less company they do have a token and are decentralizing but in charge of that um and this last update will introduce immutability or a way to get there um to the Token metadata um to ensure that these key characteristics are preserved but also introduce a network fee around like different changes and minting and swaps and different interactions that happen with these nfts so this kind of caused an outrage from a few people other people understood but it was like I think the idea was metaplex raised 46 million back in 2022 and this is actually after metaplex spun

out of I think of Solana Labs so it started in Solana Labs it's funded out and then it raised 46 million dollars which I think is like the the third biggest BC raise in the salon ecosystem like just from an individual project and I think people thought in general this was going to be a public good and you saw that with all these the 99 of Salon nfts adopting this standard um but the issue is now that they're adding fees on top of this um people are like okay we're gonna have to Fork this but you can't do that because metaplex has an open they have a license where it says it's open source but you can actually Fork it similar to like unit swap V3 you know um yeah exactly like their code um and now like you have this program or this uh the standard that's been

developed and adopted now it's it's used by all these nfts it's adopted by the exchanges and also wallets um and now you have this tax more or less that people are saying that they put on top now the metaplex team would come out and say like look this isn't free to build it's actually a lot of work to build and maintain this code we need to have a way to have a business model um others are coming out and saying this seems to be more of a way that somebody in web 2 might actually monetize this where you build the standard I know Facebook's on this with some programming languages and then you offer the services and products around that because you're kind of more or less best centered to do that um and one of the big problems for this is like on ethereum you have the erc20

standard and the 721 I mean that's built into the protocol it goes to the AIP process um Solana doesn't have these these standards yet um so today the program is just set by metaplex and that's what's become the standard so um I'm curious Santi one I don't know if you have any thoughts on this particular issue I will say that metaplex actually tweeted earlier today um that they're going to have they are making a slight update based on community feedback which is they're gonna have no fees on like update verify freeze and thaw and that does matter because people are saying if you actually get charge fees on all these updates well some Salon nfts which are programmable they might even update um say twice a day based on day or night or they could multiple times if it belongs to a game um yeah so something I'm just curious

what you view of this but more or less like really just the the funding of protocol development and public goods and how you see that shaping out in crypto yeah I don't know I mean like I wonder it's hard like once you like launched this like how to put it back in the bag in some capacity like you know if you're the Solana team you kind of hatch this product project like you know come up with standard for nfts and you know you have to think like how do you subsidize this because if this is gonna if this is gonna hinder like NFP development in Solana then that like degrades the

interest in the broader Solana ecosystem of onboarding users and it's a very difficult decision to go through this but at the same time you want to you know public goods need to be funded in some capacity or I guess it's just a quasi-public code you're adding the taxation layer on top of it and so it's really challenging uh you know in some ways uh I think it's very difficult because you look at what ha what is in ethereum and you don't have this problem and I think that really becomes even more adds another layer of difficulty when you're trying to tell projects and users that they're going to be at or something that they're usually not used being taxed on

in other in other ecosystems like ethereum and so this is why I think it becomes an even greater problem right of competition and really low barriers to Andrew right if you're a new nft project like this actually changes the landscape of it and I want to you know I think it's important and it makes it incredibly difficult so I don't have a good answer to all this other than I did hear the pitch for metaplex when they were raising I wasn't terribly impressed to be honest I think they raised too much money and I don't think it was my I wasn't particularly impressed by the team um so that's just my two cents and you know people are going to look at this and say being critical of Solana you're gonna

I'm not like I just wasn't impressed by metaplex uh and so I hope that they resolve this for because I want to see you know I think the NFP ecosystem of Salon has been flourishing in many ways right um yeah what was that huge uh project that launched like couple like one month ago was it uh odd Solana yeah on Solana oh oh you're talking about mad Labs probably yeah yeah exactly right I mean huge impressive right so I want to see more of that and I hope that this doesn't uh get in the way of the momentum that you're seeing the swan ankles yeah I don't think people can say you're a bearish uh Solana because I think we actually had an episode two weeks ago that I think the title was

like Sati now bullish on Solana or something like that I mean over the years of like I'm talking about like I've been on the podcast super siled and like and then time come again we've had Anatolian Ben um you know here I've been on many podcasts with Anatoli I I really respect how they build out in the open and they take criticism in a very constructive way and you know made modifications to their feed system and a bunch of other things and so yeah I think this is I I don't have any issues I think they're gonna figure this out in some way shape or form um yeah the nice thing about crypto is when you have these type of things people are always constantly looking for stuff that is trying to be too greedy or just not working correctly so

you know of course you have to respect certain license and whatnot but uh yeah that's not to say you can't build another standard 100 yeah I feel the same way I I don't really have like any strong feelings on this either way I was curious to me like and this is happening all throughout crypto or did but like when you have a 46 million dollar uh PC raise there's nothing bad about that but it does does make you wonder like if you ever VC like you want to get it 10 times return on that money so like the ecosystem obviously wasn't like hey I wonder how they're gonna make this at the time like I bet that happened I don't actually know the date but like during the bull market when and everything is moving so fast and one of the cool things about salon and a lot of

these other ecosystems is they do move so fast and that's one of their core advantages but you can see an issue in like scenarios like this where that can actually be a bad thing and that lends to like ethereum's credibility as it moves so slow um in some ways like maybe l2s do fragment liquidity in the fragment users Etc but I do think it's pretty cool in that you can it allows ethereum to still innovate um in a very quick way without having to do that the protocol level and with that you're not going to have issues with this and I'm curious if Kevin owaki if I'm saying his name right he started uh yeah from Bitcoin get up yeah get coin have you seen uh his proposal he made it's called eip6969 classic I'm not that one I I haven't seen I saw some posts about it just because yeah

meaning it but what is it about it's always fun how they come up with uh names and terminology and crypto but so he wants to basically find a way to fund protocol development um continuously and so it's eip6969 looking to implement contract secured Revenue um on ethereum l2s and all that really means is developers get Revenue when people use their contracts this isn't like the first times it's come around I think that you're just been trying to implement this um panto which is uh I believe that's a cosmic yeah it's like the question like uh Milestone driven funding like you've seen biotech and has been proposed with some sort of smart contract mechanism the issue is always the Oracle and agreeing on but I guess in this case it's tied to like usage of the smart

contract but anyways yeah a gas used okay yeah which is yeah it's not a yeah it's pretty interesting I guess what the one thing I do like about it is like okay don't do this with L1 which I think at some point people try to to do he's like let's just try this on individual l2s and at that point it's like whether this is a good idea or a bad one it's like go ahead go experiment and you can actually do that now that they're adult too so I think that that's kind of cool um yeah but yeah there's just been a lot recently with like and we won't get into this this week I don't think but talking about tokenomics and um sharing revenues with token holders and like the the money that the revenue that does go to the protocol like that should that be used by

um by vote to be used to say make Acquisitions or BD deals or should some of that be like automatically placed into a fund that's used to fund development going forward um there's so many questions there and obviously I think I think it's just almost impossible to make these decisions with a completely uh decentralized protocol it's extremely hard um so I am curious to be like okay I gotta say like uh it's it's you're now watching this Redemption Arc by a lot of VCS like I saw Vito from Electric tweet like oh wow like uh like uh you know the tokenomics of curve are really really great and like I was part of that I helped design that back in the day and know that number one and then when it launched like the token dumped so much and people were looking at the emission schedule and all the stuff and

they're like this is a terribly designed project like God like it was the thing about tokenomics is it's really difficult to kind of construct them you have turned lights I guess precedent in case studies you can look at but you know you can overly engineer stuff at the end of the day like I've said this time and time again like no amount of financial engineering and tokenomics is going to solve for a crappy product curve is a killer product like it really begins and ends there yeah your margin of error and leeway as it relates to constructing tokenomics is marginal when you don't have a good product like Kirk just has a phenomenal project a product which is started with

like for like swaps of stable coins and then you extend that to other type of tokens and it's just one of them like backbones of defy and and it was really the first example or one of the first examples of why D5 is more powerful and efficient than C5 for all the critics out there like Sam spfs of the world that we're saying oh you know nothing really works indeed by it's really inhibition building you know everything is much more efficient in a C5 and you know like order book models and all this crap I'm like okay trade stable coins and coinbase and then tell me how that's better your slippage versus versus curb and that and so that was like really powerful and I think

you know I I and this is an area I do spend a lot of time on like trying to design tokenomics especially like you know our airdrops good customer acquisition uh strategies are they going to be really expensive over time um uh and so but I think the there might be more you know this might come in handy over time and so my my best my best recommendation to a team would be allow yourself the flexibility to like adjust certain things of the token omics over time you know a project like Uma for instance used I think their token allocation to the community and whatnot it's it is Matters by the down a very strategic way they'll do like

campaigns and you know try to test stop and see what works and what doesn't work and you know retaining a lot of flexibility which is difficult because they'll say wait a minute the community is going to like look at what happened to arbitrub you know it's like people now because like taking certain decisions and they weren't you know and it created some sort of controversy and so you know anyways uh it's it's difficult uh but I think the most important thing is I think you want to bake in as much flexibility that you can over time on the token Amex because you kind of don't really know your user today and you don't really know how the Project's gonna look in five years time I mean one year time let alone five years right so it's so early that fixing tokenomics like in stone and codifying

them I know it's been a standard might be controversial but I always say you know if you can allow yourself and give yourself some buffer to then use those tokens in a more strategic way for a customer requisition for m a activity for whatever then do it right for funding right so yeah yeah I'm sure you look at token distribution at times when you have new projects like what percentage of tokens are going to the team to investors to community et cetera and that more or less is kind of a fix at least in the beginning but I'm curious if you see an amazing product something like curve yet you don't hate maybe you strongly disagree with the tokenomic that we're set at the beginning of the project would that dissuade you from investing and just because I you know we're still so early

and if that product works I guess the question is can you just almost count on the team the community to then update and change those economics yeah I believe that I think you can change it example that is being part of the Wi-Fi uh proposal to Mint what was it 7000 or another you know uh another big chunk of Wi-Fi to the new team my mind yeah and so I think that's a good example right um ultimately uh this space is very early and and um so yeah I think the focus should really be on building a great project a product even if I didn't have a token for such a long time many products shouldn't have a token early on

um and yeah and and you know just focus on building a good project because once you launch a token it's it's essential it's important in some capacity right from a competitive standpoint I think unit swap is kind of like boxed in and had to launch one um but it adds a layer of Destruction to the team so most Founders and founding teams end up really focused on that on the token and and the price can be demoralizing and add the layer of complexity that is it's sort of you know difficult for for most teams to be remain focused while they have a token so yeah yeah and I mean in 2017-18

when I was like first starting to get into crypto it's probably 2017. I was just reading probably spent like 500 underneath I remember like the big thing at the time was like one how is it gonna scale because l2's one of the thing but it's also there was like an unlimited Supply beef like there was no means to ever reduce the supply but I just think the fact that even like East tokenomics are more or less you know slowly but do change over time and I don't know if Mev burn will become a thing or not I think if that can happen it's just kind of silly to think that some of these protocols that also find product Market fit like well don't have the potential to change if the community decides because we'll talk about here in a second you know more or less at the end

of the day everything is social consensus and if Community behind it believes that something is better for the protocol in the long term I think they'll probably do it yeah you can to kind of wrap this up you can find product Market fit with terrible token economics yeah you know what I mean because if you have great product if you have a great product Market fit you could probably change your tokenomics yeah 100 okay big fan of that there's actually a big discussion going on and uh you know block producer scene which we have over here um if you don't follow check them out I'll put a link show notes um but it's talking about trigonomics as well we'll save this for another time but they're talking about what is money and if if like curve for example you have their tokens that are incentivizing

liquidity and you have this whole bribe system built on top through convex Etc that starts to look like money like in a way but like our you know this is the whole our tokens equities is it a claim to the cash flow energy um or is it something else and something new and I think that's something that's evolving and there's no real answer and I also don't like when people are like is it money is it not like let's just admit that there's a range of outcomes here and there's something like the US dollar which is probably like the most money-ness if that's probably even a word but then you have Apple stock and if like they made an acquisition they can use their Apple stock they'll pay in cash and they'll pay in stock they can also borrow against their shares so in a

way that's has a foreign money Apple stock is very valuable currency yeah and so is Nvidia stock yeah yeah I agree 100 ballora is the ultimate wallet for exploring the cello ecosystem easily manage over 50 crypto assets and over 30 different dapps for swapping sending and managing your assets all from your mobile phone the world is mobile first and valora believes that crypto should be too their global app is localized in over 13 different languages in over 100 countries giving crypto explorers like you a simple and accessible way to send payments purchase digital goods and access a suite of decentralized

financial services if you want to see real world use cases for crypto ballora's in-app daps page is the easiest way to access a growing list of the latest refi and defy applications on the seller blockchain download the app and start exploring today at valoraft.com forward slash Empire that's velora v-a-l-o-r-a app app velorapp.com Empire let's go on to the next topic which relatively related it's italics new paper called don't overload consensus um there's a lot going on here I think it's inspired a bit by so steak teeth is obviously becoming more important important especially with the last uh Chappelle upgrade and now uh lst's uh

liquid's taking tokens used to be lsds but uh we had to change that um are becoming more and more important to the ecosystem especially like lst5 which is involving instead of like putting ease and borrowing its eth why not put an LST which is steak teeth behind there because you can actually be earning yield uh as your collateral is locked up and part of that is eigenlayer and it's taking ways how can we basically utilize eat to a greater extent so like in the validators that are scaring their youth on ethyl one then use that same to basically restate and secure another project or another layer Etc and that's kind of catching a lot of steam and it's not it doesn't sound all that different honestly from like Cosmos or the atom pop shared security but it is is probably more flexible um and metallic more more or less writes

in here about a situation that you could have these L1 East takers who are also say securing an L2 with that same e some hack occurs on that L2 and does that actually give economic incentives to the L1 to then roll back the chain because you could say you have like an arbitrome let's just say it absolutely it's huge and the majority of transactions happen there if you did have a big hack like the Dow hack um could have come to a point where you're going to have the validators on L2 which are also the L1 say hey we need to Fork this and roll the chain back and he's saying we ought to be careful and I've I've seen like a quote or two um which is like the social consensus is the ultimate layer of consensus uh one more which you know is a little bit more

dark Financial Innovation will not be hindered by social pressure which honestly in crypto that's probably pretty true it's like you have steak derivative of hot and stake derivative so I'm just curious what do you think about this situation in this article I would encourage people to go back to that eigenlayer podcast that we had um we had a BD all throughout that podcast I just message Jason it was like this sounds like hypothecating security and I don't think I'm not my brain's not my small terrain is not prepared to think about all the risks and increased surface area that that creates and I I do worry about that

something you can't do it none of us can I think we're all in trouble no I mean I love Financial Innovation uh as someone who spends a lot of time in defy but I am reminded of the global financial crisis and sometimes when you're not pricing risk correctly it becomes a problem and I think there's a lot of issues I think the more important one and you just mentioned which is the validator set and the incentives of different validators and if it's highly concentrated I I do worry I don't think it's just like Cosmos actually I think Cosmos is a shared security model but I think architecturally uh people can correct me here but it's quite different than what

the value proposition of eigenlayer uh which is like yeah I think there's a important Nuance I don't know how to crystallize it just yet but I I just think it's it's different and riskier doing it in the ethereum ecosystem the way out how eigenlayer is doing it then versus what you're having Cosmos that's my hypothesis people can tell me if I'm wrong or not and I would encourage this is probably something that we can have a more um deeper discussion with people that are Smarter on this topic uh maybe bring up people in the cosmos ecosystem and also eigen layer and some other folks to talk about this but I do worry succinctly

re-hypothecating stuff can work but security is not something that I want to mess around with because if you lose security you lose everything and I want to be cautious of how we do that and I would almost kind of shut it down for the sake of I don't want [ __ ] to blow up yeah it's just just like guys let's say I get another Pockets you know except the life sequencer let's focus on other things but this is something that like yeah you push it too far and you know you know that like [ __ ] around and find out yeah this is not one of those I don't wanna this is one of those yeah you don't want to get there yeah I think it's super

interesting and honestly like you said we just need to have another podcast on this and we can explore it like more more in full Jerome from eigenlayer um he tweeted out in response to that article and like yeah he gave he gave three points he said hey don't build complex Financial Primitives on restaking they can spiral out and um yeah I don't know how you're gonna stop anyone at permissionless system from doing that and like it uh it doesn't exactly sound that realistic at all I did I do want to add just to get like maybe a concept for people are thinking like what's another way this could happen and it totally put in a comment he's like what about a protocol that provides e-filidators to censor a specific kind of transaction like an L2 fraud proof so as you know optimistic and validity uh Roll-Ups they have ways

that you can prove it to the L1 and one of those is fraud proofs for optimistic Roll-Ups in this type of situation you could also you'd actually have the validators sensor that L2 prop group because it's not in their economic incentive so yeah yeah I might have to watch the big shorts Santi it's like maybe people need to read The Big Short not that that's going to happen because of eigen later but honestly it's a it's a great book and it might give you some insight on like what can't happen in these scenarios the more the both exciting and really challenging thing about crypto is that if there is an incentive people are going to build it people get out and people in your and you're going to attract people and so we can pontificate here all day long about how bad it is and vitality can have an

opinion on it and he has carries a lot of weight but at the end of the day you know things are going to be built then you know I don't think this this post will stop eigenlayer uh I can layer from from building the question is does it get enough traction and so yeah welcome to the world of permissionless Innovation yeah no well well said Santi um should we talk about the wider stop I think uh I I actually was on and spent a lot of time I was off for the last week and I I did cut it short because I was I was like all right I think I need to listen into what the wire team they hosted a public Twitter space to talk about their social recovery upgrade and they did a from braid upgrade

um and and so I'll just kind of hash the the big level high level stuff so Ledger is uh Hardware like a HSN like a hardware stream like they have this device probably one of them if not the most widely used like Hardware wallet in the space it probably has over six million wallets or Hardware wallets that they've sold over time um and and they launched the recent firm grade upgrade for their latest kind of devices called the was it the lighter Nano X picks up but not not the NOS which is a earlier model but the Nano X the newer ones that they were shipping out people noticed it that had a new

firmware and then they kind of said oh yeah we're gonna announce it and then they kind of that pour some 10 ounce all this really is is they say listen a lot of people struggle with they lose their keys they don't they've asked us they claim that a lot of users have asked them to kind of build a solution to recover their keys in case they lose them right you usually have them jotted down a piece of paper or whatever and then we you know some people lose it and you know anyways so they said how do we onboard more people and so they launched this social recovery thing which apparently basically cuts the seed phrase in three sends you keep one and then it sends one to them and then or they're using like some like custodians where they're securely they're encrypting

part of the key and then sending it out to someone and then ever and that's of course but so many people in the community say wait wait a minute the whole point of a hardware wallet is that it the key is never exposed it never leaves the device it gets generated and that it never leave and now you're telling us you can do it for a great upgrade and this can happen like wait a minute that just completely changes the game right and so yeah it was it was pretty controversial I think it was one of the worst PR stunt that I've seen in a while yeah French like I guess and so I was in the call and the Twitter space and I said guys like can you just walk us through like at what point what at what point in time did you allow for this for

a storm rate upgrade firmware upgrade to kind of allow for you guys or whatever or someone especially to expose the keys right and so um I want to say shame on us because we should have paid more close attention to this and asked these questions way before because apparently and my intuition was when I asked him this question that this was possible way before right and so it was right and so they claimed like yeah we we're you're always trusting Ledger the company not to deploy uh some sort of firm firmware upgrade that allows for this but it is hypothetically possible Right a rogue

you know they could just do this right they could be and so um of course like there's Basin practical so you're trusting them but you're and so their their device is closed Source it's not open source and so yeah because they have these ndas with the people that are designing these chips so you're trusting them there's no back door and whatever so uh yeah it was it was a pretty interesting it it is an interesting discussion in the community Nick what do you do do you want this recovery system you have to do kyc if you lose your keys you have to go through kyc and then if so you can reconstruct the key uh then the CEO admitted that of course

the question is well hypothetically if someone like an AI agent like pretends to be new paltos kyc start your keys and then just steal your funds or you know like a state agent close the library and says yeah I want to access like Garrett's Keys like right right about now and that's it right and so and it was all these kind of attack factors so yeah the consider he's like yeah this is a problem so anyways there is some insurance in this solution it's like covered up covers up to like 50k which is tells you like what this like why like who this product is for um so yeah it was uh a bit of a ramble there but I think it's uh uh you know it's always I think it it's interesting

could then think about how do you secure your crypto is it good for the for some subset of users probably right sophisticated ones that have maybe less than 50k or just get comfortable with all this stuff but um yeah I don't know if you have a reaction to all of it yeah I think that was a great summary and yeah it is definitely superheated the last two weeks I think what gets me is that I don't think people that are gonna have one like probably that less than 50 000 Mark so let's just say anywhere from zero to ten thousand maybe on average um user and also someone that's going to want to split and Shard their key and have someone else with social recovery is going to be using a ledger or uses a

ledger today like I just more or less think that person is going to be like on coinbase or some other service so like they're going after a user that I don't even think it might be like one percent of Their audience and that's the main thing that I don't get I mean the pr was a failure I think they're going after the wrong customer like come out with a new product but honestly I don't know any friends that aren't really into crypto that want to store their own private keys and not have it they don't want it to be touched by anyone they're the ones they're the ones that want to get a ledger the people that are like I need help with my C trays like I understand that like I feel that way a lot but those people don't they don't want a legend like they'll use coinbase

they'll use coinbase while they'll do 2fa or they'll do something like I have origin on my phone which is social recovery I mean you don't want to put a ton of money there but it's just like I don't know I think they're building for an invisible customer that like maybe we'll be a thing but not I wouldn't have launched on this device and I know you have to like I think accept the update uh for this to go live but I know you said also like there is like an attack Vector that already exists in there and I saw haseeb talk about which honestly is above my head but he went into like there has to be some way to update the device in the sense that when you add new blockchains or like ethereum used to have one type of signature you have to

update it but it's just the communication yeah I think it was a big wake-up call to everyone in the community that's why shame on us because if the firmware upgrade they're able to do that right to support new blockchains and and you know there's like they need to do a security patch like ultimately you're trusting them to do the correct and secure firmware upgrade and so I think uh a lot of folks that I follow that are experts in security said you kind of like what's the option never do the firmware upgrade but you also you know but at the same time like there will be over time some upgrades that are pretty critical that

I think the The Proposal that a lot of people are seeing is just come up with two different Hardware wallets one which has a social recovery thing you're buying it maybe you buy it a cost and then you you have to pay a subscription fee for this recovery feature and then another one that is just you can do these upgrades but you're just like you're not ever like you know it's not possible and as again you have to trust their guarantees that you will never be you know in a position to to expose the king shark like to you know be part of the social recovery thing but again I think everyone is now has woking up or is waking up this idea that at the end of the day you are trusting a company to not do an upgrade that allows your key to leave the device in some way

um yeah and you're at that point like what do you what do you do if you really want to be that safe like you can write it down on a piece of paper or remember it in your head right like not using it yeah you can generate like I guess a a you know wallet uh offline yeah yeah but uh but again for Bitcoin more straightforward but if you want to interact on a chain and do some stuff on chains right first like a smart one like uh for smart change it is difficult yeah so I'm gonna invest from one key which is he mentioned was both you shout out to them and like you know I'm not endorsing any project I do I use a number of wallets but you know at the end of the day like the name and security is a horcrux model use

different Hardware wallets you know separate your funds um assume that any one of those can at some point be compromised and you'll be okay you lose some funds but not all of them and I think that's generally the way you think about risk shout out by the way um Sam Zell one of the legendary not the most legendary real estate investor out there passed away uh um a few days ago and I was listening to a few of his podcasts uh one in capital allocators and uh I read also uh his book and re-read his book and you know the best investors always tell you risk you never do anything that can kill you because you can't even be lucky if

you're dead and at the end of the day I think this is how you think think about Security in the same way that think about risk generally speaking which is as you're investing your capital and securing your Capital especially in this world of crypto which can be your own custodian you know you you just use multiple Solutions like never have one Harbor wallet use a no sense8 like you know where you have three or five or two of three no keys different keys that are signing a transaction you know and you can use all three different Hardware four different Hardware or grid plus you know uh one key uh Ledger and a trezor with a 25 words not 24 because there's a known vulnerability so you know like yeah at the end of the day like

this is uh this is this tells you how early we are I was about to say the same thing I was like everything you're saying is so true like God damn it like anyone that is listening to this and doesn't think that we're early and two that crypto was easy like folks sorry to cut it but it's not we're early and it's difficult and this is why we get and this is the asymmetry you hope like Nevada's great tweet which is if you are if you're in this space and you don't think that you're going to be immensely compensated for being a beta tester for all this stuff and you're willing to ride it out and see kind of the local top and bottom then go say something else yeah not all here obviously like single like I'm not an

odd like intimating like we're only here for like 100x and like that's it but but there's a lot of risk and and you gotta believe in the technology and the impact that it can have and you know ultimately there's really smart people here and that's to me why I I'm excited the minute that I don't feel intellectually stimulated by the space and I'll go do something else I feel the same way I mean it's like it's like working for a seed stage or a series company in a way and that like you don't go there for the salary that you're getting paid like you're going there because you believe you believe in the space you like and a big part of that is like as an investor you know this like um crypto does have some product Market fit in certain areas but like you're

investing you're investing in you're investing in the team at the get-go and there are so many smart people in this space I I'm just I tweeted this uh two days ago and because I'm tired of like all these stupid people mostly from BC that are pontificating like crypto has no product marketing I'm like listen guys like stop right because it is how in my my two years okay how is this any different if you don't like nfts or mean coins or D or Finance D5 because you call because you think that the artist sucks or that D5 doesn't work or it's too complicated or whatever how is that any different from all when you look at e-commerce for instance

especially the early days people are like I hate some of the crappy products that are sold on Amazon or online right does that make Amazon PayPal stripe bad companies without product Market pit because maybe you don't like anything that's sold there absolutely not right they've created the ability to buy anywhere anytime all the time right and so crypto in a similar way has now opened that same possibility to everyone right because you're sort of transcending a lot of friction point that the internet had which is it never allow you to move money the same way that you process information and so now and you're extending that consumer preference which is now you know you have created digital

property and you've allowed creators that really appreciate especially an nft round to to sell their art and prove the scarcity of that to the End customer and so ultimately if you don't find anything you like today I guarantee it was gonna be something you like in 5 10 years like Amazon store with books there's people that don't like books but at some point they have now bought something from Amazon because they're killarious company in the world right by you know headcount whatever and so you know what I'm trying to say is I think we do have product Market fit very much so and and you're seeing it with a number of different Realms and verticals right and and you're going to continue to see that with gaming and all this stuff and even though it's inefficient even more

right it's think about that right it's like if you there's a great post we're gonna talk about Fred Wilson later on I I don't know if it was Sam or someone else that says if people are willing to go through like hoops and barbed wire to enter this space because they want to buy an NFP like how is that like you know and and Chris Dixon from a16t talks about you know the the hobbyists and pay attention to hobbyists because those are the guys that are early or the and and the hobbyists like are tinkering with technology and it's never easy but but they're so passionate about and obsessed with it and that's you see a lot of hobbies we're all hobbyists and crypto right now

and and that I think is a Hallmark of strong product Market fit and and so ultimately I'll go one-on-one anyone who wants to Kentucky doesn't have a product Market fit because they are totally off base you know totally opposite yeah and those people tinkering or voting with their time right like they're it's because they truly believe in something and they're the ones pushing stuff forward I I couldn't agree more it does remind me a little bit of I mean I know everyone does this uh comparison it's a little cliche but like the early the Early internet like computers all of that like the first computers were the size of a room right and they're actually like in the internet and it costs like they're so incredibly expensive yeah and like the point that people made the internet

for was like arpana and then also past then um in the like World Wide Web was just to get information and collaboration between like academics and like the government right like that's how they saw what the use case was and it wasn't until you had things like the worldwide web and the browser like that was a huge moment right in the GUI on the computer you just saw all these things and then eventually you had broadband and it's like all these little things that enabled like something so much bigger and part of that's also mobile and I I'm I'm slowly getting mobile filled like I'm not there yet but on like how important mobile could be to crypto um and that yeah and like Solana is going down that route to some extent that like I think everyone knew this except me but I saw stat yesterday and I

was like I think it's uh when you're looking at Gaming revenue there's like 50 billion a year on like devices computers etc um 100 billion a year on your phone mobile mobile games yeah it's like twice a big I had no idea so yeah I think that's a huge moment for crypto I mean it just it just makes it right I mean if you have something on the go and is you're carrying with you you do so much more right um but you know this the other thing like time to come again resistor conference here and uh people talk about like speculation and this is something that like comes up over and over it's like oh especially with mean coins now just oh you know it's all speculation it's just the casino and look there's a whole industry like Las Vegas

that is built on in Macau that is built on gambling now I don't have an opinion on that I just again it's consumer preference like there is a subset of people like to do this like why not allow them to do that in a more transparent context and this is the thing like I don't have an opinion on anything other than I believe that if something can operate in a transparent system it will inherently be better than a a closed Black Box system like full stop so no matter what you do no matter what not to say that it's this this transparent system is going to be perfect there are trade-offs to privacy and a number of things but you always invariably I will always choose a

transparent system whether it's financialization of X Y or Z or interacting in an open transparent system will be more efficient will ultimately benefit the consumer way more way more than a closed system and so you're already seeing that and across number of things right and people will benefit the ultimately the people that benefit the most are creators if you're an nft artist or a developer that is willing to extract more value for their contribution relative to a handful of investors that had privileged access to certain deal flow and have capitalized on the huge rise of tech and software as a service and and you know you know

social media like all these huge companies have only benefited a subset of people and and now you know you're building in the open and it and it and it freaks and scares a lot of people I get it yeah I get it like I get it like no surprise but uh yeah it's really exciting to see in real time couldn't agree more and it's great because it also comes at a really interesting time a few political chips and uh this idea that you know people can now work from home and move freely and now Capital moves really too and startups can work remotely and it's it's I think uh an incredible transformation

and crypto is really at the center of empowering so much and so but that's never to say it's perfect it will never be perfect so we should always be skeptical but the more the more you try this stock I think the more excited you get about how crypto fits in a so many different huge slow transformational trends that have been happening over the last 20 years and and are going to continue to reshape this world a very meaningful way yeah you know we started with this podcast talking about Nvidia going up by 200 billion which is like roughly the size of ethereum but I think like one of the things that also shows like the power of the community and like what's actually building there regardless what the price is it's just how much crypto and ethereum is mentioned in everyday life through politics like when you

think about like um even Biden coming out like latest speech you see it everywhere and it's just like something that's uh the more you talk about it the more important it is you talked about like like tax loopholes and I was like wait a minute everyone's first of all no one has got games this here second of all I'd love to know what I'd love to know what those are because everything happens on chain so yeah good luck trying to like invade taxes into space you know I can't ignore it though I think that's the point like they just they can't ignore it and there's enough out there um that it's popping up everywhere regardless of what the price is so I think this goes nicely just um into Fred Wilson's new article um yeah freedom to innovate and um Santi do you wanna do

you want to do this or do you want me to go for it oh go for it you do way better summary than I do sir no well I'm making this one short I think I ramble people um but Fred Wilson came out with an article I think it was I think it was yesterday um and I I just took out a little bit but it kind of starts off and it says back in 2014 uh USB so Fred Wilson is I think he was one of the founders at USV which is Union Square Ventures I'm one of the top BC funds it says go subpoenaed by the New York State Department of the financial services over uh their web 3 investing activities and now he's fast forwarding today he said I was reminded of that moment yesterday when a quarterly call with our limited partners we were asked if the

regulatory pressure in web 3 in the US would result in us cutting back our web through investing uh to which he responded when they want to shut it down I said double down he said the most powerful technology send waves of fear through the establishment and you see the fear in their eyes and invest in the cause of that fear I'm not like trying to be cultish because as I was saying that I felt like a cool leader but honestly it's super powerful and I think it's amazing that Fred Wilson's been extremely respected in the space in BC for a long time not way outside of crypto and he he was he got into crypto whatever it was probably early but I've heard him a lot in 2017. yeah I mean exactly one of the First Investors in Columbia I think you returned the fundament some on just the coin business

yeah pretty good place to start and you can obviously just see the conviction so anyways I thought that was exciting and I'm seeing it pass around crypto right now or crypto Twitter look up I get I get pinged a lot by people or on regulation um and I'll make two observations one I think you're seeing um a bifurcation and a camp that is taking advantage of opportunity to attract Capital formation and bright uh individuals and teams and you're seeing that in Europe we make uh you're seeing in the UK you're seeing some Caribbean islands seeing it in Dubai Hong Kong uh not so much in the US by particular agencies particular agencies and I will say the second which leads me to my second observation which is we should not think about the U.S and cluster it

and make generalizations because it is a very divided opinion on what one or a few agencies have portrayed the salsa class in this industry versus General sentiment out there and the third I guess I cheat but the third observation is we should not lose faith in the court system because that is the backbone of a democracy of a of a developed country I think which is what is most interesting and important at this point in time is the interpretation the courts will have on the opinion of agencies particularly the SEC on this industry and there's the Ripple case there is the the grayscale ETF case right grayscale assuming the

SEC um and then there's also perhaps more importantly the coinbase case and so I think all of those three in the early indications as I interpreted as not a warrior but for that I will save it for the interpretation in our regulatory podcast with Rebecca and Jake but I have faith in the court system in interpreting the law correctly and the oversight and the regulation the policy that needs to be shaped in this industry but at the same time in a measured way that is pro-innovation and I think that marries really nicely with a political landscape going into the election next year in the U.S and so if you don't have faith in the court system then good luck I mean you have bigger problems with your hands like crypto is just one but it will you know as soon as

you lose the courts then I think a democracy fails uh because you're not going to respect the law then you go elsewhere right and that just becomes Anarchy and so ultimately that degrades a democracy but I think I still have faith that I think the the court system the U.S is perhaps the best or second best right perhaps up the court legal system the UK's prime or International over trade but in the US I think it's it's it's it's very solid and strong and I have faith in that so uh yeah I think ultimately I'm I'm encouraged and I we've been talking about regulation for a long time um and you know I think these three cases are going to really shape the the way that we finally can construct

some some policy that is helpful and it might just come down to where Europe leads the way and then the U.S copies and this has happened before time yeah like the UK really shaped uh Financial policy in a very meaningful way over the last like Century or so like they they were refers to adopt and create a framework for uh gold ETFs and then the US kind of followed suit after they had like banned and really been in opposition to this so I think we'll probably see a similar um similar path here yeah I agree well better put than I can do it this is so left curve but I think a big part of politics hopefully going forward is you have um what I'd say is a younger generation whether it's Millennials gen Z et cetera

that are coming into that you know being a larger and larger percentage of that voting class and obviously brought up in the digital economy and probably more favorable something like crypto and open to those things I think that'll be a pretty big shift just over time yeah it's literally like the age Gap it's kind of it's kind of surreal they're most of the country it's like uh shifting it's obviously the boater Vape the voter base is Young right and sub 50 40 but most of the countries run by people that are in their 80s it's over 70s and 80s no not 90. yeah yeah it's difficult but hey look I mean Shadow like uh one of our First Investors in pair phones like Henry gravis like the guys was old doesn't use a smartphone but he understands asset classes like you know not all people that are 80 and

90 like are against technology and Innovation so you know I think uh this is why it's important to step back and understand like this is something that is being used it's something that the younger generation certainly like likes and excuse because they don't have any summons so what a bank is and they just like spending time in the digital world and this technology you know acutely enables a possibility to do stuff and extend the range of possibility in digital context so that's it like it's really that like that's not overthink it guys like this is great like nice rules and boundaries but it makes it a safe environment for most and if you don't do that and you don't come up with guidance there's going to be in fairness activity because people always profit on on ambiguity and lack of clarity

which is difficult and and I think hopefully that's really the resounding message which is come out with some guidance and clear framework because you know that's what is allowing and that's the vector that allows for you know unfortunately scammed and all this stuff right I mean it's not going to stop all them all together you always see scams like there's always a subset of games they want to do like scan you stop you're going to catch them faster in a transparent system I'll tell you that definitely agree so Santi anything else you want to talk about you think about to wrap it up well I don't think so I mean I think we've covered it a lot um maybe things that we're looking forward to just uh I know we're probably entering like a slower part of the psych like of the year I guess summer tends to

be you know a period where it's a bit quiet but uh things that you're looking forward to I mean I'm paying a lot of attention on account abstraction and some of the developments there and I think it fits nicely with kind of how people think about like securing their assets and interacting on chain and whatnot but I'm curious if you are following certain things that uh you're launching your own podcast of course or you launch your own podcast it's amazing to see yeah yeah I won't chill yet I won't chill yet I'm gonna give like what I'm watching not necessarily like things that I'm like bullish on but things that I'm interested in so like we just had a season on uh belker about Med and I think we could have probably done like 10 more episodes I think that space is just so interesting I mean I remember

two years ago and I'm sure some people say this now like in media is going to be the death of crypto um in some ways and and now people are more or less like embracing it but they're just trying to find a way to stop almost a centralization and like the verticalization of that supply chain because there's so there's so many incentives to do that but anyway I think it's wildly exciting and hatsu talks about it here and and it's kind of gotten me on this this way of wanting to study more about Meb I think the other thing that's going to be like a narrative that gets passed around it probably is already started is like soft versus hard for analogy and by that I'm talking about like an L2 versus an L1 so like on an L2 you can get like a soft

confirmation immediately from the sequencer saying that like yes you've made this trade but it's not truly like and that could be called softenality it's not truly like hard finale or firm finale you'd be all different names for it until it hits the L1 and that's you're already seeing this trend we had an episode recently with shared sequencers um and we know how difficult that could be and I think there's going to be a big push for the soft finality and what do you need for that to count like will users care most probably not um but will developers and will like the the owners of these or the Builders of these ecosystems and I think part of it too and this is me being a little less crypto than I should be probably but a lot of this people think we can control with economic weight so if you have

shared sequencers they can stake and if they do something wrong you can slash them and I think that's true but I also know there's gonna be a scalable model which is just reputations like you're going to have a shared sequencer group on certain l2s and this is a cool thing with l2s you get to pick where you want to play it right like um but you could have a semi-centralized decentralized group of sequencers or these people that have to put up some form of ID and eventually maybe that could be decentralized ID but I just think reputation is like such a scalable model and you can have that backed up as slashing but today that's all we really talk about is like economic weight and slashing in these sequencers and like soft finality but I think reputation will become a bigger bigger thing and that's something like I'm going to be

looking into yeah it fits nicely with the overall construct here which is the you have many flavors of choice l1's l2s and ultimately you know I guess it is fair to say that to your point many end users will not appreciate security don't today uh Prime examples that like a lot of people into Finance smart chain uh when it launched and went to Pancake swap at some point had more users and trades so I'm not like you know I I'm mindful of that but at the same time I think when you think about how the space from time you mentioned Ben from strategory he has a aggregation Theory which I think is going to play out in crypto as well which is your financial institution like JP

Morgan will decide to interact on chain at some point because it will streamline their back office compliance it will make and this is an area that they want to cut because it's bloated they want to find ways to streamline and increase margin and this is a very good way to do that by using blockchains and so if you believe that to be true especially with regulation and Clarity coming then they're going to interact on chain right and smart contracts Atomic executions of mortgages or whatever like and and so ultimately they will be sophisticated enough to appreciate security and a lot of these things and the user is going to trust them there's always trust yep full stop you're always going to trust someone

um and and delegate that trust to your financial institution your aggregator and I think that's why it's important to understand this because I think that would really shape the next iteration of how protocol development and things that really get attraction and get hardened over time true windy and you know if you have JB Morgan using ethereum or a particular L2 you know that increases liquidity and liquidity begets more liquidity and then it becomes more efficient think about curve and why curve became so important because they got liquidity as soon as you hit a certain threshold it's very it's very circuitous and so it's very reinforcing and that is really the boat here um and so it's really nice we have all these different kind of possibilities

which is nice in our open source content you have really low barriers to entry people can come and go be used a lot of these chains and we're all experimenting in some way shape or form um and so I'm constantly reminded of that and this is why I kind of take this approach of like try different things um and experiment because I think that's the phase that we are on as an industry right now over the next five years I think we'll continue on this trajectory of trying different things trying to decentralize sequencers trying to launch meet your hypothecate security and see if it works or blows [ __ ] up um and then ultimately when you see kind of the the neck real wave and onboarding out beats aggregator that are going to open up and miss the space to so many other users

and I think a large part of that will be games um yeah and then and then D5 but but certainly games then I think it gets really interesting then I think you really can never understand okay they're going to use ethereum or they're going to use Solana or they're going to use something else and maybe we haven't seen before maybe it's coinbase based right uh I think going to space probably yeah it's the one that I'm prob stating that it's going to attract the first 100 million 100 million users yep so yeah I think uh I'm really excited I'm you know just be patient yeah if you listen to this podcast you're out of the game I've been listening to it now for two years so uh Santi had me listen to it before I joined I probably said this on the

podcast but it was Santi that read um the producer position that got me on this so oh a lot to you sonny not hey well you're great man so uh I I every episode we've come out with I've been doing more and more reading and podcasts so I'll do shout out to one book that I'm reading we just it's so like the title is so like cheesy I guess in cliche but it's called how to invest okay I don't know how to be a billionaire yeah how to get rich and lose weight [Laughter] no it doesn't promise the formula but it's just um it's by David rubin's fine the co-founder of Carlisle which I think is a legend and uh he has a he interviews some of the most successful

investors across a number of different asset classes distressed that private Equity hedge funds um endowments and how to invest is just a collection of interviews with from people like Sandra Camellia which you've talked about this episode to John Paulson to you know the Soros fun uh the Soros kind of family office uh Chief investment officer just a bunch of people right and it's every chapter is fairly short but different perspective on uh Jim Simmons from like uh what's this one uh Renaissance um uh Seth clarman uh like just light engineering investors really nice book so it's how to invest matters on the crap really nice um I I've been enjoying it I haven't finished it but I've taken really good Snippets

um and then uh obviously the go and listen to Sam dork Miller uh interview uh it's on YouTube um the film conference there's two maybe listen to both the one from last year and this year and uh the snippet from that is like it's like this is the hardest time to invest from someone who's been doing it in a successful fashion that we're lost like 60 years or so and maybe 11 40 years 50. like when you listen to someone like that say that and it's like okay gotta listen that's uh yeah so anyways uh I've been really enjoying those two I don't know if you uh maybe a movie or a book that you really enjoyed recently yeah I'm gonna have to

check those out uh for me I'm reading one that sounds like classic crypto Finance person about how the internet how the Internet Was Made I I read it once how did the internet happen that's right you know better than me because I've gifted that books right again book that I've recommended it the most people that want to learn about crypto that's how the internet happened that book really yeah it's it's honestly so good I I'm probably like one third of the way through but it it to me it's just like especially someone that works in crypto there's just so many similarities uh between the two and I think like going back and learning those that part of history and eating crypto two years ago can help you so much and like shape how things have been set today so I do that I gotta give one

that's like the opposite this is very like crap bro-ish um if you've seen Workaholics or ever heard about back in the day um they have a podcast called um this is important and it's the five main characters who just actually happen to be best friends and they record now 10 years later every Tuesday and that is just gonna be uh pretty hilarious one so uh I watched air I'll add air I watched air the other day and that was a cool show bear Nike it's like Nike's new film oh wow it's out that's awesome yeah yeah you can stream it on Amazon I think it was in theaters and then it'll go live like on other places I think in a few months I thought you're gonna say succession but no hey I'll check that out check it out okay before we log off I gotta finally do my Shillings

because he does some something yeah I have to cut it all out most of the time um okay so believe it or not I am starting a podcast called light speed with someone named murt who Mur is uh started Helios which is like the main leading API and RPC provider in the Solana ecosystem uh we've been talking about this podcast for months I had no idea that I was going to be the one to co-host it but I I honestly like couldn't be more psyched um and like at the end of the day we we really need real product solving real problems we've been talking about that in this podcast and things that are like uniquely enabled by crypto and that's more or less what this podcast is going to focus on um I love like the Steve Jobs quote where it's like start with the user

experience and work back to the technology not the other way around and I think and sometimes in crypto you know we might start with like the philosophy and not with like the tech part or the user um and that's something we want to highlight ecosystems and people and projects that are doing that um super excited he knows a ton about the Solana ecosystem so we're definitely going to cover cover projects there but like we're going to cover many many ecosystems projects founder um I say we wanted to be the selling point Group business Innovative Innovative community so I'm going to rug pull Empire there stop never doing the show notes they're amazing yeah and by you know we talked about trajectory and big Ben Thompson

like my inspiration for this and we'll see how I do is to take strategory meets my first million pod which is more or less about like business and coming up with new ideas but it's like super entertaining uh in making that light speed so I'm super pumped about it we just did our announcement today and the first episode's gonna go live in June so um I'll put a link to the show notes for the Twitter um you're not gonna be able to listen to anything because they're not there yet but yeah we're super excited that's awesome well I'm really excited for you guys I think you're gonna crush it out uh and it's a great Duo so best of luck to you sir sweet Santi well hey thanks for having me on this is great yeah Jason if you don't go back for me honeymoon which is possible scenario

with all Garrett your permanence uh you're always welcome back so anyways uh thanks everyone for listening hope you have a great weekend uh wherever you're listening from and we'll see you here next week foreign [Music]