What the Permissionless conference said about web3, scaling and the Merge

Transcript

what's up friends welcome to web3 academy a place for entrepreneurs creators and marketers to explore and learn how to use web 3 to transform business models and create thriving communities enjoy this next episode gm friends welcome back to another episode of the web 3 academy podcast kyle read head here coming at you live from mexico city i've made my way uh out of permission this conference which was in west palm and now in mexico city for the next month and i'm excited to share this episode with you where i'm going to talk about the five key takeaways um from the permissionless con conference you know the smartest people in web 3 were all there and we got to learn from a bunch of them throughout the week and and i need to relay that

information uh back to all of you um so i'm excited for this one there's a lot of really cool stuff that happened over the week um and i'm just i'm excited to share it with you um i know not everyone gets to go to these conferences it was my first crypto conference um and what a blast uh it was it was actually uh an amazing experience and i'm excited to go to my next one and i hope um that you guys after you hear what i have to say uh may want to go as well because honestly it was um it was pretty incredible even though prices are down and things looked uh you know a little bit um scary here in the markets um wow what a burst of energy this gave um so this article that i'm going to read from

is called what are the smartest people in web 3 saying which is sort of a tldr or a summary of the permissionless conference by the way before i get into it um this podcast is growing really fast and it's pretty amazing to see but we need you guys to help us grow this and the way that you do that is by subscribing whether this is on youtube or spotify or apple podcast whatever you listen to subscribe and please like and share do whatever you can i think you can do like leave reviews and stuff on spotify um and on apple podcasts please give us a five star rating uh these are the ways that it puts us to the top of the you know algorithms and allows us to grow even further um so i appreciate all of you for listening uh thus far and um and

if you could please subscribe and share it would it would mean the world to me okay guys let's get started here so the brightest minds of krypton web 3 came together last week in beautiful west palm beach florida there was about ten thousand or more people a hundred plus speakers and three full days of panels keynotes and presentations at the permissionless conference put on by blockworks and bankless well done guys it was pretty awesome so below i'm going to share the top five key takeaways that you need to know from the conference but first let's just talk a little bit about the crypto community if you have yet to go to a crypto conference as i said in the beginning i highly recommend you do the diversity of people that attended this conference was literally incredible it ranged from

founders and developers of all of the top blockchains and decentralized applications in addition to uh founders and developers from you know big tech like robin hood and visa and google um and it also went to the young artists and creators that are innovating in the nft space to you know even the older trade fi trad fi investors in vcs and literally everyone in between you can see that web3 and crypto is really touching so many different areas um so many different industries that it just brings in this huge variety of of people and it was really really cool because it was just so diverse old young different colors different races from different countries with different interests um it

was pretty incredible to see and the one thing that everyone had in common though was just a pure excitement for how web3 and crypto are going to change the world for the better you know the energy was so high that you could never guess that the industry is currently down what 60 plus percent or so from all-time highs right i've always been super bullish on crypto web 3 we talk about it in every episode jay and i are always talking bullish things but after this conference i'm even more bullish on the people of crypto and web 3. so i highly recommend right now that you go find the next crypto conference that's near you uh and you go you will not regret it i think there's consensus coming up in austin texas in june um there's ecc in paris in i think it's july

um there's devcon going on in colombia and i think it's october and there's tons of other ones as well but go because this community is is vibrant and they're live and it brings a lot of energy it's really really cool and so the top five takeaways from the permission list conference are the following one web3 is creating something bigger and more important than i think most of us realize two i think we're in a bear market and that's honestly a good thing three building blockchains that scale is the number one focus and requirement of this industry number four the competition for web3 wallet market share and innovation is heating up fast there was a ton of announcements at permissionless from big

time companies and i will share that with you in this episode and five probably the biggest announcement over the weekend or sorry of the week was the ethereum merge from proof of work to proof of stake is happening and it's happening in august and it is a really really big deal so i'll dive deeper into each of those you know takeaways below uh in a second but first a few more key takeaways that didn't quite make it into the top five um one ust in the terra eco ecosystem was seen by many of the panelists as reckless in a ticking time bomb so many of them uh had some very um strong opinions on this and i guess many of them had been saying it as well um dokwan and the crew at tara were kind of

not having any of it and they were very confident and very loud um but there was a lot of people that were questioning this and they've seen this happen many times in algorithmic stable coins um and actually one of the big takeaways uh because this was talked about on almost every single panelist is that the name algorithmic stablecoin has been changed and the industry wants to go with under collateralized stablecoin um but also the future um their future in this industry is really uncertain but under collateralized stablecoin is what this is yes it's an algorithm that's trying to make it stay its peg um but ultimately it's just under collateralized it doesn't have enough to to collateralize it like maker dow and die and all the other ones do so um that's the new name um

next up music nfts are legit get ready for another disruption of the music industry there's a few talks on this a lot of people talking about it and uh music entities are blowing up right now and i there's just no way that these aren't the way that this industry goes um we will work to get someone on the podcast to discuss that digital identity and social media on the blockchain are going to reshape how we use the internet super bullish on lens protocol and disco.xyz they were two of them were uh really a big deal at the conference i'm actually wearing you can see my hat right now it's a lens protocol hat um and they both are coming on the podcast very very soon so we are gonna dive into sort of the blockchain version of social

media at first i didn't really understand why this was needed after learning what lens protocol is doing this is going to be a game changer so i'm super excited disco.xyz is kind of changing the game on digital identity decentralized digital identity and it's it's an eye opener when you hear what they talk about so we will have them both on the podcast soon web3 is tokenizing culture so this isn't highly understood yet there are some people that do talk about this but it really is a whole new dynamic and we will explore this further on web through academy so you can understand what that means by tokenizing culture but you think of culture things could be like fans of music fans of sports um and really so many other things art et cetera

and we've never had a way to like create value around that other than art obviously you could sell um but but what i mean is like the community and the fan base of it all and tokens allow us to do that and so it's it's a really exciting um kind of new paradigm that's coming uh and finally crypto conferences are amazing but gosh are they ever exhausting think of it it's nine hours a day of panels a happy hour afterwards and then networking events in the evening three days straight i literally wrote this article with one eye closed uh it's it's way more exhausting i thought and maybe i'm just getting older uh i don't know um but also shout out to the events they were pretty awesome um boys club threw the first one uh it was kind of a private um

event or party whatever you want to call it but uh really fun really cool uh bangles and optimism had one the second night uh the third night i did not go because i was just exhausted okay so let's dive into the details of these five key takeaways from the conference so the first one web3 is creating something bigger and more important than most of us realize so in the first panel of the conference titled why are we here uh mariano conte who's a head of smart contracts at maker and i think has been involved in ethereum for a long time he's from argentina and he set the stage really early on by saying everyone in the usa is worried about eight percent inflation however in my country we would be celebrating the streets like we just won the world cup if we had eight percent

inflation and mariana was referring to argentina's 50 plus inflation rate and you know this is true of a growing number of countries all over the world right our monetary system is broken and it's impacting billions of people today in terms of inflation and financial exclusion right many of us don't really realize that especially you know um especially those in the west that that don't have this problem it's not really a thing that we think of a lot but this is huge for literally millions and billions of people um so there's just there's a lot going on here and um and web3 just solves a lot of things so one thing i want people to understand

this is really what i took away from this why are we here um presentation was web3 is not about the potential money we can all make right or these flashy and cool new you know high profile monkey nfts like this is where all the talk is all the headlines and stuff are and all the hype and fomo et cetera but it's not about that web3 is about the opportunity it's about opportunity and systemic change right web3 is about creating a level playing field for every person in the world it's about providing sound money to those whose money is being inflated away by their government saving lives for people literally it's about providing permissionless banking services to everyone in the world regardless of what country they live in there are billions of people who don't even have access to bank accounts

a bank account it's like one of the most basic things you get when you live in the western world um even as a kid right and there are billions of people who can't even get that they can't store their money somewhere it's insane and it's unfortunate but it's also about putting the power into the hands of the average person so that collectively we decide how the internet can best support us rather than a few big companies and this is going to be a big game changer as things move forward in the space if you lived in a developed country in the west then a lot of what web3 solves are things that honestly probably don't impact you significantly every single day um yet in developing countries outside the west these are problems that citizens have been dealing with for many many years and it's hard to truly grasp

the significance of it until you've been directly impacted by at a level like argentina and turkey and russia and zimbabwe and the list goes on and on and on and on right there are a lot of problems in our world and web3 seems to be the one piece of technology that has a chance to solve many of them so it is extremely extremely exciting um but i just hope that people realize what we're really trying to accomplish here it is not these exclusive you know communities with board apes and blah blah blah blah blah who cares right it's cool and it's fine and it gets headlines and it makes some people happy and that's great what we're really trying to do here is make the world a better place and people need to understand that okay number two we're in a bear market and

honestly it's a good thing so i was surprised to hear so many people just casually and confidently say that we're in a bear market it was like there was no question to some of these people um it was just sort of the theme from my perspective it's still undecided uh but from the panelists and the speakers it seemed like it was pretty clear and you know nearly every speaker at the conference has invested and built through at least one long drawn out multi-year bear market and some of the ogs have gone through two or three and you know when they talked about those past experiences or asked about them you could kind of see the pain you know of the past in their eyes now they were no doubt tough times for this industry but at the same time everyone seemed to be very optimistic

about this bear market in the future of web 3. the common phrases were you know bear markets are healthy uh the industry needed this now is the time where the best new technologies are made right moments like this are when the tide goes out and you can see who's swimming with no shorts on right terra is exactly it you know a lot of people in the space knew that once prices go down if we have these problems they're not collateralized enough they're not going to be able to keep that peg right it was all on this sort of like um fomo and this need to bring new users in and new capital in and once that capital and those users go away their project doesn't work right and we've seen this time and time again and this is what happens in bear markets is the water leaves the tide

goes out and those that are standing there with no shorts on you know they get caught um so these type of moments uh it's when we get rid of a lot of the leverage it's when we get rid of a lot of the scammers and the short-sighted builders just looking to capitalize on you know a new trend so it can be good and at the same time you know it's also a time where builders can focus on building right rather than the daily headlines and this insane price volatility you know bear markets at the time where the industry simply gets done and that's my favorite time just ask the web to your academy team the impact digital marketing team my two companies um get done is one of our five ethos of our two companies

uh and that's my favorite thing to do is just i'm a doer and i just like to get done and you know unicorn applications like uniswap and you know axe infinity and openc they were all built in the last bear market right and ethereum the number one smart contract platform enabling basically all the development activity in web3 was built in the bear market before that so good things come during these times right um and hey we need a lot more built to support this ecosystem so uh this is a good thing now there was a lot of mixed opinions on if we will have a long drawn-out multi-year bear market like the previous ones um but it seemed as though most were leaning on the side of a shorter rather than longer bear market

now the one common theme that um was that this time around everyone is extremely well-funded right so much money poured into space in the last two years especially last year there was like 34 billion in vc investment um and so teams are well off right teams are still hiring um they're still building they still have tons of money in their treasury whereas last bear market team's treasury's plummeted because it was all through icos so all of their um all of their treasuries were in their token or in ethereum which went down like 90 right so they were running out of money they were laying off staff um and so this is good right the industry is maturing it seems and

um we are set for a a stronger bear market because we have the capital um and we have the means now um so it's going to be interesting to see how this one plays out um i think there are some of the ogs are still scarred from previous uh bear markets so they um they might think things will be worse than they actually will be um i just kind of think you know with the amount of users that we have um we actually have real world utility now like people can actually use a lot of this stuff um there are new things launching all the time even though it's a bear market um we've got the funding um i just i don't see this one lasting you know two three years like like previous ones but ultimately the bear market

length likely depends more on the macro environment more than anything though there were definitely many hints and whispers that the ethereum merge may be the one catalyst we need to care uh we need to carry us out of the bear market um so the question is can the ethereum devs put this industry on their back and take us to the promised land we're gonna talk more about this in takeaway number five so let's go to number three before we get there building blockchains that scale is the number one focus and question and probably requirement in need of this industry so the spiciest panel of the entire conference was titled the scalability wars which was awesome it was a panel with the founders from layer

one protocols like polygon avalanche and near and then the layer two protocols optimism and arbitrary and the discussion was around what's the best way to scale blockchains to billions of users right and the discussion turned uh into a pretty heated debate now it was civil so i wouldn't like it wasn't bad they were all great about it everyone was laughing it was really good um but it was a debate between really the l1 and the l2s and you know the crowd was cheering they were laughing everyone was completely engaged for the entire conversation it was really really cool dynamic but the big takeaway from it um is that building scalable blockchains that

maintain the ethos of crypto meaning permissionless trustless censorship resistant decentralized it's not easy and it's never been done before right so this is where most researchers and developers in the space are spending their time it's all it's also the most important piece for the industry to figure out in order for the future we all want to actually play out right if we end up building scalable blockchains that don't follow the ethos then we just rebuilt what we already have in web 2. it's just a glorified database and there's no point we might as well stop and i'll go home go back to you know giving everything we own to facebook and google if we we need to build these blockchains in a way where it's immutable and permissionless

and trustless okay and it can't be censored and it can't be shut down without that this whole industry is useless okay so for most people they don't get that and you need to understand that because without that this industry makes no sense and it goes nowhere okay so at the current moment we have scalable blockchains right solana polygon avalanche et cetera and then we have blockchains which focus on the permissionless trustless and censorship resistant components like ethereum and bitcoin what we don't have is both we don't have something that is scalable and follows all those ethos but we don't have that yet okay and that's because the technology is not really possible to do that all in one

okay maybe you need a bunch of blockchains maybe there's something else but there's a trilemma here you can't have fast cheap and decentralized it's not possible okay so here's the two sides of the story on how researchers and developers are exploring the solution to this problem i'm gonna just break it down super super quick so one is a multi-layer one blockchain future with varying degrees of security and a variety of different scaling techniques meaning there's just going to be a ton of different things people can just build wherever and um and you choose if you want it to be on a scalable one or a more decentralized one kind of pick and choose and just be a ton of different options okay the other uh option here is one sort of maximally secure and decentralized

settlement blockchain at the foundation okay so it's like uber secure it's maximally um decentralized and with that you have hundreds or thousands of fast and cheap scalable layer two blockchains cryptographically connecting or plugging into this chain to use it for security and settling their transactions so these layer twos don't need to worry about building in this the security aspect because the layer one this like super maximally secure one does it for them okay and they just rely on that security and they can focus on scale and um and cheapness okay so in case you're wondering who won the debate well the layer twos dominated the

conversation and it seems the crowd took their side as well there's a lot of claps a lot of cheering um for the things that laertes were saying at one point it was hilarious ben who is the um i don't know if he's the founder but one of the head people at optimism which is a layer two on ethereum he looked at the guy who's sitting beside him at near and just said you know if you guys just decided to forget about security focus on the execution layer and just roll up your entire blockchain onto ethereum all of your problems would be solved and the crowd just started dying laughing and the guy from near didn't really know what to say uh but uh it was pretty funny um it kind of felt that the alt layer ones were like the little brother that were just trying to fit in so it

was like the layer twos would speak and they would make a lot of sense and it was like wow this is so smart this makes sense it's all done cryptographically and blah blah blah you can scale like crazy um and keep the ethos and then it was like the all layer ones like they make good sense and and you know um they have some points some really good points it just it felt like they were just really trying to fit in and like hope that people would understand their point so um it was pretty clear to me anyway that the solution to scalable permissionless and censorship resistant blockchains is the ethereum roadmap um and that's consisting of maximum maximally scalable layered two blockchains plugging in to a maximally decentralized base layer now this

doesn't mean that ethereum is the only one that will do this there's you know other technologies that are trying to do similar road maps right with layer twos and things um so it's not that ethereum is the one and only okay it's just that they seem to have the best road map and best research and technology right now it doesn't mean that others can't do the same okay so it's not an eth maxi thing when people say that this is the right way and that layer twos of the future it's just according to the research in blockchain which is this has been researched for many many years it is the best solution so just deal with that that's just what it is um the debates and stuff is just a little bit crazy and again it doesn't mean that there will

only be ethereum with layer twos like it might be a combination there will probably be multi multiple layer ones that do their thing like polygon and avalanche and solana whatever um and then there will be this and they'll kind of co-exist and we'll see what happens um so anyway not only is the the road map that we talked about of the layer one layer two's um you know significantly more decentralized uh but it also signifi it's also significantly more scalable and by orders of magnitude um it actually kind of flips that trilemma that i talked about of um of blockchains on its head and and allows you to scale way way way farther beyond um what even things like salon and that are doing um as the technology improves so the other

point to make out here this is the last one is that um the underlying bridges that connect the ethereum l1 and all the l2s they are all built using cryptography okay meaning they are permissionless and trustless and decentralized blah blah blah blah okay and that removes the risk and the centralization factors that occur in the multi-chain bridges okay when you're trying to connect something like solana to avalanche for example um it's different languages it's a completely different machine that you're working with so you can't cryptographically connect them at least not right now the technology doesn't exist and some say it probably is not ever going to exist and so what they have to do is use either some sort of

centralized entity like i mean right now we all use things like coinbase and binance to go from chain of chain um but even all of the bridges of these multi-chain of these other chains there's a lot of centralization factors um that we have to rely on to make that happen and so a lot of them do get exploited and maybe technology will will fix that and we will figure out how to i'm always optimistic on technology so i'm sure we will but right now we just don't have that that ability now one final thing is that for most people none of this really matters as regardless of which side works best there will be another layer built over top of this and so users won't really have any idea what's under the hood and what chain

they're using and what bridges they're using it'll all just happen like um on its own and it'll happen like through the apps that we use so like the bridges will just work and you won't know what chain you're using specifically unless you're a builder obviously then you will know okay so that said if you're wondering where to build in this space right now the answer seems to be pretty clear that it's ethereum layer twos it's not on ethereum okay it's on the layer twos of ethereum optimism arbitrary immutable x etcetera there's 20 25 of them at least by now um but this right now is the best real estate for block space in the industry currently okay okay so number four the competition for web 3 wallet market share and innovation is heating up fast so at the permissions

conference there were a number of big announcements um and most of them were around wallets so robin hood uh was there and their founder actually um did a presentation uh and he announced that they are launching a non-custodial web 3 wallet by the end of the year making it a seamless onboarding for the 2022 22.5 million robin hood users uh directly into web3 um so that's going to be huge uh and really cool robin hood is basically disrupting their own business which are the kind of things you love to see this is what apple did right they did the same thing with um when they had the um

ipod they disrupted the ipod with the iphone right uh and with itunes so by basically creating an app so that the ipod was no longer needed and you could just download the app onto a phone um so robin hood is kind of doing the same thing where they're disrupting the custodial service that we you know many people use to invest by making a non-custodial wallet so really cool ledger which is the um the top company for building um cold wallets uh they announced that they are launching a chrome browser extension for their wallet called ledger connect uh so metamask you better watch out because right now most people use metamask the chrome extension and plug it in to the ledger um uh cold wallet well now it looks like

you're not even gonna need the metamask component um and so we'll see how that goes coinbase announced they have launched a new type of wallet called mpc multi-party compute um and basically it's like a hybrid between custodial and non-custodial wallet essentially it's it's non-custodial um enough that you own your keys and coinbase couldn't shut you down um and you can interact with you know web3 and decentralized applications however through some form of cryptography and i won't get into the details because i don't really know them um there is a way in which coinbase can help recover your seed phrase in case you lose it so basically it's like you get half of the seed phrase and coinbase gets half of it um but they get it in

this like encrypted way so they don't actually know anything um and so if you lose your wall or your your seed phrase you can reach out to coinbase support and they can help you recover it which is huge because the amount of new people that come into the space have no idea what they're doing they get a coin based wallet or metamask wallet and they lose their seed phrase and they contact metamask in coinbase and go hey i can't find my phrase can you please send me it and they're like we can't do that it doesn't exist and so this sort of is like a hybrid model which will be really cool i think to help onboard um and improve adoption and ux and that for for new users so that's really cool um overall the web3 wallets are the most important tool in web3 right they are the new front

page of the internet or will be um and we'll become everyone's sort of personal dashboard we will communicate with other people through there it's where we you know have our account settings and our in our profile it's where we interact with other applications it will be the front the front page of the internet and new users creating web3 wallets is by far the most important metric in this space right now okay as that is what unlocks the entire ecosystem once you have a web through wallet you are now in and it is seamless for you to do anything okay and that's what's really cool about the space is the network effects in web 3 are incredible because if someone creates a wallet for let's say a web 3 game right well now they have a seamless and immediate access into a bank account and they can

use d5 right or into nfts and community stuff into art right or uniswap so they can trade and swap and every other component of web3 so it's like once they get that wallet they're in the ecosystem and that's what matters okay so it's cool because if you think about it all of these sort of sub categories of web 3 are all sort of working together to onboard new users into the space okay and so like a win for web3 gaming is a win for d5 which is a win for nfts um and you know the wallet is the key component to it all so you know we need better ux we need better features we need better safety we need all these things but the good news is it's all coming and it looks like the

competition to innovate is really really starting to heat up i would bet over the next year we start to see many of the big tech companies launching new and innovative wallets you know just think about what happens in to the space when meta launches a non-custodial wallet and it just is created right inside of instagram or facebook it will literally be mind-blowing and it's happening they're already building i think it's called the nova wallet or something so you know but facebook's not going to launch a kind of low tiered wallet um just to get it out there they're going to build something that revolutionizes the space i'm sure of it um and so and they're not the only ones doing this you know every team one of the things we learned is that every team uh in tech is building or has a crypto and web3

team that is looking to either plug into web3 or start building things in web3 so that's huge okay number five the final one uh the ethereum merge from proof of work to proof of stake is happening in august 2022 and it's a really big deal so the last two panels on the last day of permission list were titled the verge of the merge and the institutional bull case for eth and holy if you were in these you got bullish both of these were during the breakout session so what happens on on the last two days um you have kind of main stage the full um just just main stage presentations on the first day then

every morning you have main stage presentations and then you break it out and you go um there's a stage for institutions there's a stage for like metaverse type stuff and there's a stage for the future of finance with the three breakdowns and so they're sort of smaller rooms right and um you know both of these were in those breakout sessions in the smaller conference rooms and that was a big mistake because it should have been on the main stage because these rooms were packed everybody was showing up like i'm talking all the seats were full in the lanes like to get to the seats people were sitting on the floor sitting in front of the stage standing all the way back the doors were open out to the hallways that people like were standing on chairs overlooking people and you know everyone crowded in because

they want to hear what justin drake who's the researcher at ethereum foundation and the others who are part of of the research group and are building in a part of the testing of the merge et cetera want to hear what they had to say about the highly anticipated and long-awaited ethereum merge and so good news he announced uh that it looks like the merge will finally happen in august 2022. now of course you know it's not exact they didn't give an exact date it's not that easy right bugs can happen and delays can occur so it's not 100 we've learned that of course um but he and the rest of the dev team feel confident in their progress and said it's highly likely that the merge will happen in august so at this point dev say that merge tests are going seamlessly so they've been doing shadow

forks which is kind of just like um doing a you know what you call it um but a test of it and it looks like they basically have no issues every time they do it right now they've got it so where there's basically zero bugs and so next step is they will begin merging the test nets over um which starts june 8th and so they will merge the first test night on june 8th and then that takes about two to three weeks to kind of finalize it all and test everything get it over and then they do the next one and there's three test nets in total okay and so basically it was like two to three weeks after june 8th two to three weeks after whatever the end of june so on and so forth which leaves some point in august is when they will be ready so long as

there's no issues in all those um then they're ready to do the main net and the main net is the live ethereum blockchain currently that we use today which is settling trillions of dollars per year and this is why it's taken so long and they're so careful is because if they this up there is a lot the industry would basically be screwed right like it's trillions of dollars okay we saw the effects of you know ability uh what was it maybe 20 30 billion dollar uh company in terra or protocol and tara kind of going to nothing and that's big uh if ethereum went to nothing well that would be crazy so why is this such a big deal so merging the security system of a live

blockchain and that's settling trillions of dollars per year from you know proof of work to prove the sake is probably the biggest technological feat in crypto's history outside of maybe the birth of bitcoin okay it is a really really big deal it's never been done before um they've been working on it for years okay um the complaints about crypto and nfts and web through using too much energy um and you know being bad for the environment all that which is kind of a load of crap but either way most people who don't really get this stuff well it's about to be silenced right because now where most of the activity of the space is which is on ethereum it's now basically a 99.9 reduction in like uh in energy costs um so that's huge um but

what i think is probably the bigger um component to this that most people are not understanding um which i think the institutional people are starting to understand uh and some of those in the space start to understand is that eth the asset so there's a theory on the blockchain and then ether the asset which is what we all buy and use we'll eat the asset will become the first deflationary asset in crypto so you have the meme of bitcoin which is sound money because there's only 21 million ethereum never had that and that was one of the faults that people took on ethereum is that um we don't know what the limit of eth the token is right i think it sits somewhere around like 120 million or something right now and we have inflation right we got to pay for

security at something like four percent it is right now and so that continues to inflate the supply of ethan so people don't like that um so we added eip1559 which burns eth which has allowed us to basically stay um balanced uh in depending on how much activity is going on um but with the merge your the inflation rate goes from something like four percent to like point i think it's point four percent so it's it's very minimal because proof of stake takes a lot less uh cost to to secure the network um and so at point four percent with eip one five five nine burning eth we become deflationary and so over time

we have less and less eth on the market and that is huge so ethereum becomes the first also becomes the first ever profitable blockchain in the space meaning the revenue it's taking in from fees and or if you want to go another level just the revenue in terms of buybacks or burning whatever you want to call this um is higher or will be higher than the amount that uh ethereum or eth is inflating um and so it's the first kind of sustainable tokenomic model in crypto and that is going to be huge so i'm not going to get into any more details on that i'll do a quick tldr but uh if you want to learn more about the

tokenomics and the impacts that the merge will have on eth go to bankless and um i have them linked in in the article here so you can find that um there but if not go to bank list and look up five reasons the merge is bullish and then on youtube you can go to bank list and um i believe it's called um something to do with putting the entire fund in eath or something like that but he brings in a an investor they bring in an investor who talks about the tokenomic structure and how it changes and um it's uh it's in mind blowing it's really cool the tldr is this here's basically what's happening after the merge okay after the merge the supply and demand of eth will change significantly so the

supply of eth drops drastically i just explained that through the inflation rate okay and the burning but the demand will increase drastically also okay and the reason demand will increase um is because right now when you stake on ethereum which is how you secure the network you're earning about four percent to five percent once we switch and turn off proof of work that apy that interest to stake is gonna go up to about 12 so now you can invest in the one of the least riskiest assets in crypto and you can stake it which essentially is no risk um to stake because

um the only risk is the same risk you would take if you were just holding eth because it's all staked through cryptographic measures assuming you stake the proper way um and um and so because it's 12 that is a big number and a big number that a lot of people are going to want right money always follows where it's treated best and anytime there's api like that money flows okay and what happens though with the staking numbers of ethereum is the more people who stake that number goes down so we won't remain at 12 of course we don't want that that's a lot but what happens is as more people start to come in then that 12 goes lower and lower and lower

okay and so the estimations the researchers think somewhere around like four to six percent is where it will sort of balance out but in order to get there that means people need to buy a lot of eath and start staking it okay so there's a lot of buy pressure on uh the the asset once the merge happens and it'll probably happen leading up to it i don't know who knows but here's the other thing is everyone says well we'll just it's buy the buy the rumor sell the news kind of thing right so like once the merge happens everyone will just sell and whatever so it's just a bunch of hype but here's what people miss because of the way that the merge is set up they wanted to get this done as soon as possible the developers have not built in the ability to unstake

and that won't come until six months after the merge and so what this means is that everybody who's already staked which is something like 11 or 12 million each which is insane okay it's like 12 or 15 or something of the entire east supply so all of them plus as i just mentioned once this goes up to 12 so many people are going to come in and stake none of them can sell none of them can unstake plus all of the rewards that they are getting this 12 to 5 or whatever we're at none of that can be sold or unstaked and so not only do we have a supply that is going significantly down demand going significantly up nobody can sell and no one can sell for

six months after the merge there's nothing that's there's this has never happened before in any industry ever and so the people that actually get this are like whoa the supply and demand here is just out of this world okay and the way that tokens work in crypto is it's all about supply and demand and one of the there's a lot of research and ways that prove this again that video that i talked about you should watch because he talks a lot about this um all assets work this way right it's all about spider-man but ultimately this creates the greatest supply shot this industry will ever see and honestly maybe even any industry um so the term that they've used here is it has been dubbed the triple halving okay

so this refers to the four you're having of the inflation rate of bitcoin right the last three bull runs have all kicked off due to the supply shock of bitcoin during these havings so bitcoin's inflation rate splits every four years from let's say four percent of two two to one one to you know half and so on and every time that happens a few months later because of the supply shock um because there's less bitcoin the miners can't mine as much bitcoin because of that supply shock um the the prices start to go up and bitcoin sort of drags the industry up with it and we take that next leg up what's happening with ethereum is in one day ethereum will undergo the equivalent of three halvings all at once

at a time where they can't sell and at a time where adoption of krypton web 3 on ethereum is going exponential i mean instagram just launched nfts that are on ethereum right so you have user adoption anyway this is a very big deal and from discussions that perm permission lists it may be the one thing that can pull us out of a bear market even if the macro environment doesn't you know play nice so i think we have exciting times ahead and look it's not about the money here i mean obviously that's great and everyone's gonna love that and it really helps the industry if eat goes up you know everyone now has more money to um to invest in you know building and hiring and all these things like look we don't talk

prices much but ultimately this stuff matters right it does help it also helps bring in new users which is what everything everyone needs so like yes i'm bullish on eth for price whatever but it's because what this does to the industry when this happens the other thing that people don't understand i think is that the price also matters for security if the market cap of ethereum of the token is like 30 million 30 billion dollars i mean it's not it's like 250 or 250 million right now but the lower is the easier it is for nation states or you know bad actors to attack the network the more expensive it is the higher in price it is the the more um uh the stronger it is from attack

because it takes a lot more money to attack and this is the reason why ethereum developers have been building all the things in this way because they want to make it so the tokenomics of eth are better than any other asset because they need slash want slash require eth to go up again not to get rich but to secure the network okay and this is one of the things that most of these ones don't have figured out in their roadmap is they have these highly inflating tokens that so they have lower um market caps and thus less security okay so again this is just about sustainability of the space and so east

going to the moon is actually a really good thing i mean obviously it's a good thing because who doesn't want that to happen but anyway hopefully you understand what i'm trying to get at okay some final thoughts as i wrap up here if the bulk of your crypto web through consumption and learnings comes from twitter podcasts in youtube i mean hopefully you're you're doing that with us and that's great at web3 academy we're happy to to give you information and share but if that's it then you need to attend a conference okay it hits different to meet people and learn from people in the flesh the discussions are more real it brings everyone back to the basics to the fundamentals it gets rid of the hype that you see on twitter and on youtube and all the flashiness and it's like real you know face to face shaking hands

and like telling it how it is right it allows you to one see who are the people on the other side of these crazy twitter accounts that are yelling by the dip and huddle and you know we're all gonna make it whatever you get to see and it's funny because a lot of them are like you know 40 50 year old dudes or 40 50 year old chicks and it's just like what like you're the one with that weird nft picture and you're the one that's like you know yelling all this stuff it's hilarious to meet these people in real life um it allows you to see who these people are that are building the protocols and apps that we use and learn about every single day you know which is amazing because it's like are these just some crazy degens that are building this

stuff or are these like legit founders um and when you meet them you shake their hand and you talk to them it's like wow these people are crazy crazy smart um it allows you to see and understand that what we're building web 3 is truly revolutionary and you know you're not the only one who's excited and bullish and and you know obsessed with this industry there are literally tens of thousands of others and so i finished this one off with what a time uh to be alive and actually i went to quote that because i thought it was drake who started that line uh i'm from toronto or near toronto and so obviously i like drake um but i saw it was from the simpsons um which i have no idea of but i think that's pretty funny uh so that's my fun

fact for the day um but that's the top five key takeaways from the permission this conference thank you everyone uh for listening this podcast um i hope to see many of you at next conferences because i definitely will be going to more um if you want to chat about this you want to learn more you have any questions about anything i talked about please join our discord just go to the link below in the show notes and you will see there's a link all you gotta do is fill out an application to join our community we'll give you an nft and it's free and you'll use that to verify and get access into our discord channel where we have hundreds of people um shooting the every day about web3 asking questions helping each other learn staying on the forefront of of web3 innovation but i'd love to hear from you

i'd love to meet you um so get up in that discord let's go all right let's chat okay guys thank you so much and i hope you all have a wonderful week thank you for listening to web3 academy we hope this helps you along your web3 journey if it does please share this episode and subscribe so you don't miss the next one by the way if you have yet to join the discord community you are missing out this is where all the magic happens this is where we learn where we ask questions where we network uh you want to be in there the link to join is in the description below and finally a quick disclaimer nothing in this podcast was financial advice crypto and web 3 can be risky you can literally lose it all in fact if you invest on account of what we

say you probably will lose it all so don't do that in all honesty the point of this podcast is to remove the noise of markets and price and focus on utility implementation anyway so you should not take any of this as financial advice thank you friends and see you in the next one