Why Solana Could Flip Ethereum | Roundup

Transcript

someone asked me like why don't I hold much Bitcoin is because what do you need to believe for Bitcoin to grow 10x in value basically establish the same market cap as gold and gold took hundreds of years to aify as a store of value a social consensus I don't necessarily believe that like in order for Bitcoin to do a 10x think about the amount what that like what do you need to believe for that to happen all right everyone so on Empire you obviously know that we talk a lot about the institutions coming into crypto and that is why we are super excited to share that we are hosted the digital asset Summit we posted this since 2019 it's coming up in London March 18th to 20th don't miss your chance to get ahead of the curve you can get 20% off with code Empire 20 we'll see you in London this

episode is brought to you by the chronicle protocol a cost efficient transparent and decentralized Oracle Chronicle has developed a Next Generation Oracle primitive called scribe which reduces Oracle gas fees on l1s and l2s by over 60% you'll hear more about chronic later in the show this episode is brought to you by North stake the secure and compliant staking platform for institutional investors North Stakes e staking service lets institutions earn staking rewards while maintaining maximum flexibility on all of their Capital you can learn more about North stak's institutional staking Services by clicking the link in the show notes or that QR code that is on your screen right now if you're on

YouTube now let's get into the show I use Cloud for Discovery though SoundCloud is just fire I love these tracks with like an hour an hour 30 mashups or just like Ultra sets I'm gonna uh this is gonna be super cringe I know we already hit record but I'll just say it anyways you're normally the cringe person and you're I read the YouTube comments I know I'm cringe I've accepted it for you and and I also have you by the way have you also seen that I have more followers now no way what you you buy you buy some Bots again I'm poor and second no no I've been tweeting a lot about salana

stuff which actually do want to go deep I've been going very deep look but yes I think I've gained a lot of followers let's uh so we so salana rap just salana rap Spotify rap just came out oh my God and uh we had a bunch of people who had who had Empires their top top pod so appreciate all you guys if um if anyone comes to permissionless or D and Empire was a top your top 1% listener we'll give you some free merch and folks for context I haven't even gotten any merch like I'm an investor in blockworks and I've been sitting in this goddamn chair for since I here so this is uh blockworks does not have much merch not because we're like you know

says the guy that has like blockworks dude I made this and paid for this with my own money this hat I bought with my own money not the company card because we were we bootstrap for the first 5 and a half years we were so cheap that we didn't even get t-shirts with the blockworks logo printed on it for five years into the company I respect that you know I'm very I'm very bearish like you could have shorted every single crypto company that was a premier sponsor in consensus um and they would have gone a zero like it would have been a great trade like companies should just not spend in merch like it's just no yeah another pull pull up your Spotify wrapped let's see what you got okay well I want to see the podcast section which I haven't been able to find this is how

technologically incompetent I am I guess definitely going to be the worst round up we record all year but that's okay maybe not man I don't think people want to R riff a lot about crypto but there's other things interesting in life that are not crypto like my life is very much crypto but I listen to a lot of Jay-Z this year interesting Jay-Z was was number four I got Diplo Morgan Wallen heartless great song I'm a country guy man you know I had like T oh yeah big time Big Time I love country like I love E I love EDM like traditional house music aichi of the world um and I also love uh to straight up country well Zack Bryan oh oh yeah my

top pods ien I listen to I I went back to invest like the best after not listening to invest like the best for a couple years Founders pod oh man my my stuff is so basic I'm I got some tast Rift got some T Swift I like twift all right I can't sh actually mine are too mine are too basic well like it's like nfds man you know what makes it I hate when people are very opinionated with your you know when someone ask a question it's like what do you like it's like oh you like you like house okay so what do you like house and you just know the guy on the other end is gonna totally bash you and say that you're a basic [ __ ] because you listen to a vich and I'm sorry I just like to listen to whatever music makes feel on

my top five which I know I'll get a lot of [ __ ] you no but I respect in the hours of if I need to crank I'm drinking an espresso at 8 pm I'm putting on my big headphones and I'm listening to a a Testo set from like 10 p.m. till 1:00 am and just cranking out some work you know how I survived uh defi summer where I was not sleeping just yield farming oh just listening to house music oh yeah with these same headphones this mashup like aich Ultra remix the last one he did 10 times in a day like 2015 yeah like I know the you could tell me what's what's minute four of this an hour 30 I have that brother minute 26 Usher comes on

I'm like that's great and I and you know the best part now is Spotify has his DJ function which I'm not like 100% sold on honestly sometimes I'm like really mad at this I I don't like it that much no like what no no really bad selection but every once in a while the shuffle works every so often and that song that you haven't listen stand up out of your chair there's that song that always comes back and it happens like once a week right we might be like in a wrong in a long uh run or a long cycle or like driving or on a plane you're going through this and I'm in this phase now where I'm stuck I don't have good music

and I'm dreading it because I'm hopping in a 24-hour flight dude you got to get you got to get in this telegram chat crypto EDM jams Tommy Tom yeah Tom shauny and I think Ben spango from yeah yeah love those two one of my favorite people in space By the way for different reasons um Tommy started this group in like 20177 or 2018 I'm part of the group now oh yeah listen I went I went on Tommy's podcast twice or three times and every time he had mentioned this group and would never add me until the third I publicly called him out on it and he added me that was the only reason why he's very selective he's added people and then he's but he's he's C at 200 the

whole time if he adds someone he has to chop someone so interesting that's my good my source of Music um dude we uh another Big W for the Empire pod this week we so we so Das has these uh these promo codes like Empire 20 and stuff when we did a black rock one Empire was fifth of all the blockworks pods we're now second so we've uh We've leapt to number two I I'm hoping we're still not happy by the way I I only take one number one we're not happy but give it couple people need to use the code Empire 20 for D and uh yeah we we'll leave to number one I'm confident we need to give Mike and Mark yuso like a glimmer of hope you know that they can beat us and then and then we'll we'll we'll Skyrocket yeah we'll make him feel like

it's a competition but it's really not exactly so you just got off this uh Twitter spaces so so Empire just did our first ever live stream that was fun um I tuned in to the end of it uh I was on Am track so I couldn't couldn't actually partake but uh it was with with Nick from Celestia with the CTO of Aptos um every yeah with move movement Labs rushi yeah uh from movement lab no really really great disc look I think the most important discussion that is happening in crypto right now perhaps the most relevant is this idea of modular versus monolithic and I think it's we're going to look back on this moment of infrastructure development in crypto and say this was

probably very comparable to what happened after theom crash and the software as a service movement this un like technological phases go through this bundling and unbundling and there's a lot of creativity expression that happens in this unbundling phase and then and then you have a rebundling um which is something that I asked towards the end and that was interesting to get their perspective but yeah basically you're I mean we don't have to go into the full details here people should go listen to a lot of this great podcast just well can you kind of can you kind of summarize it what were you guys talking about any any takeway make you think differently in any way well so for context Aptos is this kind of nextg

layer one that a lot of the work that had been done in Facebook Libra they took it they're using this move programming language parallel execution there's a like basically like higher performance layer one and the way I think of it and I'm an investor in abos full disclosure is move as a programming language is like um is really Superior in the sense that I focus on is it's just more secure like you would avoid every re-entrancy attack and defi because with move and that's huge right because we keep like kyber swap just happened and it was like a incred incredible how sophisticated these attackers are uh finding these bugs and solidity is not the perfect

language I don't think it will be the deao language and the standard much farther down the line it just has a benefit of network effects or whatever but that's interesting so we had him talking about look it's obviously like a integrated blockchain it has some modular pieces to it which I didn't fully appreciate so he was on um so and and then we had rousi on um basically rushi for movement Labs what they're doing is they're taking say that you're an app in you're a you devel you have a D5 protocol in aptose which still obviously is relatively new and you you wanna you know you don't have as many users of

liquidity so what does movement do movement says hey if you're a protocol that is already deployed and has a move like on Aptos then you can use our VM to then connect to ethereum which is pretty cool right because ultimately you want to tap into the liquidity you want to tap into those users um and so it allows for that which is pretty cool um and there's a whole you know and and the compo why Celestia is relevant in all of that is because obviously when you're launching this kind of L2 Celestia allows you to in this modular framework allows you to Outsource um data availability and consensus which dat the way I think

of it is blockchain running blockchains is very expensive or has three major cost components one is Hardware requirements which you know salon for instance is higher like running a salana node is cost 3,000 bucks of Hardware give or take um like a Alienware like a very sophisticated computer with some TP whatever Salon like ethereum no like it's 200 bucks like a Raspberry Pi or whatever whatever so it's Hardware bandwidth because obviously you're you're piping through a bunch of data right in every block so that requires like fiber optic connectivity and that has a cost right it's price per you know um unit of data that gets transacted

right when you pay for your internet and then the third component of all that is storage costs like at some point you're gonna these the state and synchronizing the state in these blockchains as they grow and propagate right and these you know it's ever expanding right and so scalability is always at the heart of that and what Celestia's come in and done it says hey we're going to specialize in data availability and consensus and what data availability they just pioneered this thing called Data availability sampling which scale sublinearly so basically like instead of every node having to basically to reach consensus and settle you need to make sure that all the transactions in a block um are correct and you don't have

a double spin right you don't have even in a parallel execution environment you don't have transactions that may be conflicting right because you may have a same type of smart contract calling one thing and a double spend thing but then you have a higher fee and the transaction that has a higher fee priority like gets prioritized and gets included in the block um in a parallel execution environment and so um selest different context um like the data sampling is instead of every node to reach consensus you got to make sure well that the data in the block is actually correct it's ordered correctly and doesn't have these double spend things right um they allow you to instead of having every node having to inspect and

look at all of the data in the block you're just sampling a small amount and probabilistically say no the data in that block is correct we can reach consensus in a much coste effective Manner and that's pretty huge right because in ethereum even in l2s like if you don't have this data availability sampling it's pretty expensive like you can think of it like it's you know if you increase the block size well there's more data in the block um and so it it becomes one of these like pretty big unlocks in my mind yeah um for context I was talking to a team that I'm an investor in they're going to launch their own L2 and you

know we have hundreds now maybe thousands of l2s there's stop in in sign in sight and and the cost ultimately if you're not using Celestia you have to pay for that you have to pay for like that those data costs that you need to send back to the L1 eth L1 like the for every you know batching of transactions that happens you ultimately need to settle it and send it to the eth L1 that has a cost which is pretty high so for instance I asked Nick from Celestia who's a COO said like what's the C what does that translate into cost savings if you're a team that wants to

launch your own L2 like you're a gaming project you want to launch your own L2 and he didn't have like a finance or he said they were going to publish this data but for context I this project that I was talking to said it would have cost us like a 100,000 bucks to do it ourselves by us having to do data availability and you know in housee if we Outsource it to Celestia it's a th000 bucks so you go from 100,000 to a th that's huge like that's multiple two orders of magnitude right cost improvements so anyways the tldr of all this is very interesting discussion why because movement I think will be very interesting to see which type of Aptos

projects or or new projects that are building on Aptos because candidly move is a better programming language I'm sorry I'm not a developer I have no business in commenting but I care about the hacks that are happening in Defi and so if you tell me that a programming language is formally verified and would prevent every single most of re-entrancy attacks I'm like yes on board because no I had I was telling you about nine months ago I had dinner with the founder of one of the biggest custodians in the space and he came from web too as well and he um he's like look I think it's General consensus that move is the best programming language it's just it just doesn't have the kind of narrative among crypto natives right now right and I think that's movement becomes so important yeah because how you build

Network affects an interest in a chain well I think this is a a very interesting hybrid solution that allows you to leverage all the benefits of move as a programming language and all the liquidity user mind share that exist in ethereum so towards end I asked him do you think we're going to see a rebundling like it's sort of like a vampire Ty on ethereum right where like you make it easy to deploy move um on a v like a move based like program on a VM and so you all of a sudden like tap into all the you know e and so is that a vampire attack like like how do you see this I don't think it's a I actually would be curious to get your opinion on on this whole discussion of

modular versus monolithic integrated some people call it I can I mean I can share I uh I had this call I'll tie this story together with your question so I had a call with a guy who built big events and media business and uh big in in actually the 80s in the in the in the around the internet and um this was in the 80s even pre- Netscape pre- browsers going mainstream in the early to mid 90s this was in the 80s and he I was explaining to him like this big debate that's happening in crypto which we're talking about right now monolithic vers modular and he goes oh my God that's what you're talking about is protocol layering vers integrated designs and I was like okay what do you mean he goes in the early internet there was this

huge conversation big debate was regarding the design of network protocols and infrastructure and the internet today is as obviously is a is a modular approach and if you haven't seen have you ever seen the The OSI model open systems interconnection model this just sort of like history of computing and look look at this this guy um I'm gonna I'm sure a million people already know this but I'm gonna reveal my ignorance and and share this with you I I hadn't heard of this before so this is what we do at Empire by the way we reveal our ignorance it's a good way exactly so what you're looking at this is the internet right here so the internet as we know it is broken into various networking functions and distinct layers so you've got physical layer data link layer networking layer

transport layer so for those who aren't actually watching I can kind of look at explain this there's seven layers of the OSI model at the bottom is uh is the the bits layer it'sit it's bits it's it's the physical layer it's fiber it's wireless it's hubs it's the physical structure moving up one one layer is the data link layer which is you move from bits to frames um and this is like ethernet you know switch Bridge things like that then you get into packets right this is the networking layer uh IP icmp IPC igmp this is like path determination and IP like logical addressing then you go up another layer to uh segments right this is the transport layer this is like end to end

connections and reliability TCP UDP then you go to the fifth layer the session layer this is this is when you get into what we would think of in crypto like the data availability layer basically this is the first uh the this is the first like data layer which is the like in host communication layer apis sockets wind sock uh like that be like a layer zero or like a IBC yeah that that's that's my understanding of it uh then you go up another layer then the the top three layers are basically data data layers so session then presentation presentation is like how do you represent the data uh it's like it's the syntax layer right SSL IMAP MPEG if

you've ever seen like a JPEG file like JP like that's the presentation layer yeah exactly this is this is nfts baby uh and then then the the top layer is the application layer this is the the network process to application right this is the end user layer and this is protocols like http uh SSH DNS uh FTP IRC like these are this is the application layer the the most famous ones obviously HTP so I don't know I this is news to me that this thing exists and I thought it was a really helpful framework to understand how the internet works today today basically each layer is responsible for specific tasks which allows for easier management updating troubleshooting all

these kind of things but as this guy was explaining to me there were all these like very intense arguments back in the 80s in favor of more monolithic designs where these functions would be more tightly integrated and proponents of that argument argued that these are his words not mine it would lead to more efficient and easier to implement uh systems at the cost of flexibility and scalability and man like here we are 40 years later and we're having the exact same conversations about protocols so I just I just love that framework loved hearing from this guy well it it's fascinating one I unfortunately or fortunately wasn't around back then um but I've try to go back and understand how the internet happened that is actually the title of one of my favorite

books is how the internet happened um and it's just a amazing kind of um you know archaeology of of exactly what you're describing is how these movements came about and these discussions that were happening then that are so relevant and applicable to crypto um and so definitely like I think um where for instance during Devcon before covid in Osaka the huge thing when l2s were being discussed very heavily was you're going to break composability you would hear this idea breaking composability and I went to one of the uh what I think

is one of the smartest devs he's super critical like calls out [ __ ] I love him and I said well is it like correct to think about composability a binary thing of breaking it like either you have it or you don't or should we be more thinking about is it a spectrum of the latency that you might have between these um chains that okay it's not Atomic like but can you introduce some sort of latency at least today before the infrastructure catches up like IBC and stuff where like where you accept some sort of spectrum and I said I got to think the internet went through this where there's different standards there's all this communication

issues and I said my appreciation is that the internet kind of went through these growing pains and ultimately they really solve that connectivity and the ordering like all these different things right um and he was like yeah I think he he was like basically um you know agreed on that premise yeah so maybe we should just have like a you know 80s system engineer I mean I'll bring we we should bring this go back to this uh thing that struck me here I'll pull this back up is we talk about it in in crypto we talk about it is basically two ends of the spectrum there's modular versus monolithic and what this guy said is he's like well what are the hybrid Solutions um and and he's like the

internet became a hybrid solution right it was very modular at the beginning this kind of these seven layers one out but then it became this hybrid system so if you think about like uh tcpip for example that's an integrated protocol Suite these Protocols are part of this like layered architecture which is actually more modular in design but the entire stack isn't modular right or like uh CDN right content delivery networks are this like hybrid model where uh you've got kind of decentralized distribution which is a modular trait it that's combined with centralized control and optimization which is this kind of like monolithic trait so and it it it it he he said one other one oh sdn software defined networking I don't

honestly understand what that means but he can come on and explain it to us so there's there's a bunch of these um examples it doesn't have to be modular it doesn't have to be monolithic it can be I don't think it's either or candidly like Avery from uh the CTO of Aptos did said something in this live stream that I want to dig deeper on which is optos you can think of it as a um monolithic integrated I think integrated becomes a better word because I'll tell you why he said you can think of it as optos as a like ethereum like monolith like Solana monolithic but he said there are things in our stack that make it modular including da and so I think there's when he said that I and I bring it back to what you

just said which is um I think integrated and I've heard other people Advocate we probably should be using the word integrated yeah because within that integrate it's really how you package it up where at different points um the integration may be and I may be saying something that is incredibly dumb but I'll say it anyways I think when the integration becomes very tight you in many ways become indistinguishable from something that is what is modular be be can become indistinguishable for something that is monolithic if the integration isn't incredibly tight or very close to the

point where it doesn't matter that's a thought that I had it might be the dumbest [ __ ] that I say in the Pod and I may look at at that but I'll say it again you understand what I'm saying when you look at something that is modular like a Rubik's cube right you're using ethereum for settlement and execution you're using Celestia for da and consensus and you're using whatever up top you know VM you could use like whatever like you know movement um svm like Eclipse um in a whole combination so you have these permutations in the Rubik's Cube I think the state of which the modular movement is today is the Rubik's Cube is very

rough it hasn't like it's just coming to being you just put it it has no greasing of the bearings and so it's like things are breaking you don't have good ux um these things are not like very well integrated yet so you need a systems integrator to come and build the connectivity layer between and make that movement more tightly packaged and I think a lot of the Innovation as I think about where I want to spend my time to learn Lookout and invest in teams is who is going to make this like I believe in modularity who's going to make the modular blockchains more tightly

integrated because I think that's an a of opportunity does that make sense it makes sense I mean you could potentially argue that someone like something like a monad so did you see say say Network did you see what say say had a big announcement today um we can look at it if you didn't see it but someone something like SE or like maned are kind of sitting in between are more like these Hybrid models sure yeah and maybe it's again I'm saying this through analogies because that's how I my my left curve lizard brain non-technical under tries to understand things through analogies but it may actually incorrect when you just say look Celestia integrates exceptionally well like with a move based VM and then like

that integration just works really well maybe the challenge is just on the ux that is very poor and crude at the moment but but I think uh look some like the I got to think and I that the connectivity between chains is not perfect today you you have layer zero you have chain link you have like messaging between chains but I would posit that that will become more important and an area of innovation um in perhaps the same way that the internet had to go through um like the to make as close to as we know composability in a monolithic context in

a modular like in a multi-chain world and you're connecting stuff like and the way things interact and work in concert I think probably will become ex like much much more fluid and better over time a theory again I may be wrong I need to do way more work but maybe this is a good transition into like my updated views on salana and ethereum and um because I've had a lot of I've spent a lot of time listening to other podcasts I spent a lot of time also talking to builders and other investors of how they think about obviously a lot of allocators are now thinking about the relative ratio

between eth and soul and maybe eth soul and uh NextGen l1s so I think uh this whole modular and monolithic debate is also sparking some pretty interesting discussion around what is the road map of ethereum vitalic had a good post this week what is the end state for l2s why would you build on Solana versus ethereum versus Aptos like what really is the mo here and like I don't I don't want to fod or um I think a lot of these it's a

multi-chain world different use cases are just going to require different type of I think execution like environment but God I I think that um I think a lot of people are I think there's a huge Awakening happening and and it is everything on a relative basis if 90% of your Investments happened 90 Plus in ethereum I think the biggest shift that you're going to see is it's probably not going to be 90 going forward yeah not for new funds emerging managers and certainly not for more established funds yeah I mean the hot the hottest deals right now are in salana and six months no eight

deals in the last two three weeks committed and funded none of them are on one of them is on no maybe one is on a theory I guess like if you count would you count something like movement being on that that's that's why I was like yeah so wa so the rest of so the other six or seven are in Solo or in just other ecosystems let me look predominantly predominantly swana where do you track your Investments do you have a spreadsheet I have an Excel sheet open what on can I how do you I've actually found this quite tough like

where do you do you just have a spreadsheet and you you you like what what are the columns like what are the what are you looking at on this spreadsheet well um I look at so company name committed and allocated because sometimes I commit an amount and I don't get the full allocation I want to understand when that happens what is it Equity valuation what is the token fully diluted Network value sometimes there's I don't like sometimes companies don't ever think about FTB they're like we're never going to launch a token so often times it's blank other other times I make an assumption of two to one Ratio or one to

one then number of tokens purchase price for the tokens um realized gain unrealized gain so then of course money money over money and then DPI um DPI obviously just tracks what's been realized M includes unrealized then I have a couple three other columns that are like and I was just updating this today I spent like an hour a day or like no multiple hours a week just updating this stuff um just now no no no no updating it like there's like one which is a bare case valuation base case valuation bull case valuation and then I track like you know

um funded closing you know sector I I sort of a taxonomy of like I want to bucket these L1 l2s gaming infra def5 nfts y yada y there's certain type of like nomenclature that I use just understand like where I'm allocating I'm over allocating under allocating and those are primarily I probably should add a few other columns like ecosystem right like as we were just talking about I would say the most interesting one which I've added actually today and it could ties back to a discussion that you and I were having around positioning the portfolio is I think even if you're not a professional money manager no matter what you it is incredibly important to

have a fan of returns and assign some sort of probabilities right what is the best case for an L2 what is the bare case what's a bull case what's the base and then it's not to say that that's going to be set in stone I think it's just a reminder of when you underwrite and make the investment if I'm make an investment in L2 well what's going to factor into your Calculus well I'm gonna look at where other l2s right the best L2 today arbitrum from a fully diluted Network value and yes full disclosure I'm an investor folks is trading out eight billion or so then you have optimism at seven then you have starkware private rounds or secondary markets a lot of

these L2 that haven't been launched they're trading in the two to three billion dollar four billion dollar range the CK sinks of the worlds the starkes scroll um then you have blast right and so um I'm going through that exercise now because you can get carried away very quickly if you don't set discipline and standard all right everyone so we talk a lot about the institutions coming into crypto on Empire Santi and I are both headed out to London March 18th to 20th for blockworks his 8th ever digital asset Summit Das this is an Institutional buttoned up conference that we've hosted since 2019 I like to

joke that it is probably the last remaining kind of suit and tie event in crypto people are still wearing suit and tie it's pretty funny you'll actually hear from a lot of the largest institutions in the world coming from Standard Charter FIS JP Morgan framework folks coming out winter mute vanc Goldman Sachs there are a couple big themes of this conference one Bitcoin catalysts the having and the spot ETF two A View From the buy side three rw's tokenization and stablecoins four Global regulatory Frameworks five institutional infrastructure including Banking and payments and six the macro case for crypto if you have anything to do with the institutional side of crypto you have to be there Santi and I got you

back we hooked you up with a 20% off code it is Empire 20 there is a little competition running internally a blockworks to see who can drive the most number of tickets so help Santi and I out register with our code and you get 20% off that is Empire 20 this episode is brought to you by the chronicle protocol a cost-efficient transparent and decentralized Oracle that gives protocols verifiable onchain data for the frequent listeners of Empire you know that we talk a lot about maker Dow well Chronicle protocol is a novel Oracle solution that has exclusively secured over 10 billion in assets for maker and its ecos System since 2017 and for the first time ever chronicle's Oracle services are now publicly

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Chronicle at Chronicle labs. big thanks to Chron for sponsoring Empire today's episode is brought to you by North stake the secure and compliant staking platform for institutional investors North stake is purpose built for institutions that want to enable the ability to move in and out of Stak e seamlessly while controlling all aspects of their fund management North Stakes tokenized eth staking service offers institutions easy low-risk crypto yield opportunities complies with both AML and Ma regulations making it possible for institutions to tap into to ethereum's growth and earn staking rewards even through these pretty turbulent regulatory times in crypto if you are an Institutional Investor seeking compliant crypto exposure and yield North stake

streamlines that all for you to get started head over to North stake. DK tokenized hyphen e hyphen staking I know you're probably not going to go to that long URL so just click the link in the description of the episode that'll take you right to nor Stak site or if you're on YouTube scan the QR code on your screen right now now let's get back to the episode when I first invested in something like ethereum like you come from a mindset of saying like did I ever imagine that that was going to be a 200 or 300 billion dollar Network in what are we like year eight of development that's so [ __ ] lutely not like no a lot of people you'll hear a

lot of ogs say yeah of course so obvious I'm like dude I remember the early meetups and I don't like just look at yourself in a straight face because you're not doing at the end of the day the only person you're fooling is yourself because it's okay to update your model like if you're seeing all these traction and for instance if all of a sudden we start seeing way more funding into salana well Sal's gonna flip ethereum there's a version of this next cycle where salana flips ethereum and I think it's a greater than 25% probability sorry you think it's a 25% probability that probability that salana flips ethereum like I don't want to say this cycle but there is a version of this

world where salana flips ethereum and that doesn't necessarily mean that ethereum shrinks in size I think that salana just uniquely enables different use cases that introduces way more usage utility therefore value and there there is a version where salana and ethereum are trading at the exact same fdv and there's a version where salana trades at a higher FTV is it more okay if that were to happen is it more about what salana got right or what ethereum got wrong e um what sonana got right because it's a very interesting question

someone asked me like why don't I hold much Bitcoin is because what do you need to believe for Bitcoin to grow 10x in value basically establish the same market cap as gold and gold took hundreds of years to aify as a store of value a social consensus I don't necessarily believe that like in order for Bitcoin to do a 10x think about the amount what that like what do you need to believe for that to happen sovereigns buy it yeah a lot of allocators buy it it it's it's certainly possible how many Michael Sailors do you think are out there in the world today and are going to be out there in the next 5 years look I'm always Amazed by how like quickly technology especially in an open source context especially how

connected the world is it is just mind-blowing and fascinating how Nvidia went from nothing and we're all tracking it in crypto to a trillion plus company that happened in very like the amount of value that gets created is basically in the how quickly that can happen gets compressed I think in this state of the world not just in crypto so it can happen but I need to believe like that those set of assumptions I think are I describe lower probability it is far easier for me to believe that salana reaches the same market cap of ethereum without believing all the other stuff that I just talked about like the crypto aggregate market cap doesn't need to be 10 trillion plus for Salon of flip ethereum I

think I could argue that it could stay it doesn't have to grow much because there's two things that may happen one that I'm arguing here one a rotation away from from ethereum into something like Solana in that scenario yes I think there is some value when you think about the collective value of ethereum if you include other l2s then maybe some of that value does get sucked away and goes to a salana it is possible my operating assumption is not necessarily that one it certainly has some probability but it's low I think well I don't wouldn't think that's low I think there's a higher probability where

more money that is coming into the space and investing on a relative basis the split between how historically it's been allocated to the ethereum ecosystem will go down relative to how it goes to and be all is allocated to salana and and some other ecosystems but especially in this debate around salana I think that share will grow considerably so if you're a venture fund you just raised blockchain capital of the world as an example not them they you just raised a $100 million fund fund two fund one 90 plus percent of that went into e ethereum right maybe 80 if you held some Bitcoin or

whatever but you're trying to outperform eth but you're still investing in the eth ecosystem fund too $100 million fund going and you just raised it or raising it I would say maybe that ratio now goes 40% salana whereas before it was less than five maybe zero actually zero for many funds like a lot of funds have zero exposure or have had zero investment dollars go into salana that number is going to grow by an order of magnitude let me ask you this how okay if that's your thesis how much exposure

do you put on how do you play how do you play that trade basically do you by salana or I mean we've been you know just on telegram talking about salana nfts depends on what type of investor you are you specifically me well yeah like are you are like are you markets yeah I'm certainly I've entertained the idea of selling all my eth and buying Soul I've entertained all of your I've entertained I will say someone called me last night and also brought that up I've entertained it yeah and I was listening to this I've been just man listening to everything that Anatolia said in the public record and tracking his progress and I think I had a big Insight this week

um historically I placed a lot I had a tweet about this historically I placed a lot of focus on the higher Hardware requirements of salana but I think it comes from a point where if you truly believe that we are solving problems that need to be solved and people therefore are willing to pay for it then Hardware becomes IR relevant and these like to this point around the cost of running a blockchain hardware biggest criticism for salana it's an order of magnitude higher than ethereum meaning what does that actually you know it just becomes more expensive to run a full

node um and so there's only it discriminates certain people where ethereum anyone can run a node with a light C you know with a Raspberry Pi it's 200 bucks versus 3,000 my real question is I don't think that's a big enough of a concern because if you have a very clear focus on the type of problem that you're addressing with a blockchain people are going to be willing to pay for that because they make up way more and the problem if you're solving a real problem there's a ton of margin and what does that mean for salana you hear Anatoli talk time and time again he was developing some algorithms anytime he had Al an edge or found some Alpha he will receive the data ever so slightly

slower in financial markets there's this latency of data uh there's a great movie about people getting closer and closer to the stock market to be closer right that's bandwidth that's other component of cost here and they would get closer because if you receive information before someone else that's me like you can do me in salana they are very focused on solving that which is for me I see a team that is very focused in product Market fit in a very unique problem that they're trying to solve and that's why I think you've seen a lot of def5 Founders excitement from people that in Trad fight coming into Sal and saying yeah when you have a globally synchronized State machine where information is

propagated with no like no one has an unfair advantage that is incredibly valuable to the point where yeah you're going to pay the hardware right you're going to pay the storage and you're going to pay the bandwidth because there is so much more value in getting to that state right where financial markets don't and that's that was like in ethereum and others not just a criticism on ethereum as an industry we've been oh we can do like we can we can do trustless trust like these networks are fascinating it's smart contracts and even Bitcoin like the idea of having all these Works to reach consensus without trusting anyone mindblowing I study Game Theory to me

it's a new chapter of Game Theory incredibly exciting and novel and like holy [ __ ] moment right but the approach has always been let's decentralize it's just but what does that [ __ ] mean like like what does it actually mean like what product and okay defi is great but when there's latency or there's really like you can't build a centralized order book model in ethereum you can in salana you can do micro payments in salana I'm not saying that every single application lends itself to salana which is also the other point I think they've been very POS opinionated on the type of things that are going to work in salana and that's okay it it's not going to capture at all but

I don't think it's a winner you know one chain to rule them all World anyways does that make sense it does it does what CH what got you to change your mind about I heard anat say the same thing three times in three different podcasts over three years and I was like okay yeah that's a Clear Vision and then of course oh we can unpack this a lot I was just having a great fascinating discussion with um Logan from frictionless Capital yeah yeah yeah yeah great guy like we should probably have him on he is probably one of the guys that because I I funny enough think that investors the best investors in crypto articulate the technology and the value proposition better than Founders most

Founders um and he's probably one of them like he's he's very deep and he understands these things very well Mt on light speed shout out also very good he's the rare people that like have that uh skill um but also the other thing that changes I I heard an aolia it was a podcast that I was on with him it might have been here or I got invited to bank list with uh vasile from Lio to talk about because they were like getting criticisms of like they're just e Centric I was like all right let's have a salonic discussion we didn't have the team but we had vasile from Lio and there was just a couple of things that uh were interesting like for

instance Dynamic fee markets are probably the most important and will be the most important thing to scale these blockchains like you can talk about parallel execu ution interesting for sure and you could talk about the different ways that you can do it like deterministically or optimistically I have a very specific view that the I don't I'm getting a bit technical but I don't understand why you would use optimistically optimistic parallel execution I just think deterministic while it places more burden on the engineer specify very clearly what the smart contract or what app that they're doing at the Smart contract layer what it can do whereas optimistic the engineer doesn't have to do that but with um

deterministic like you do so it's a bit of an overhead from an engineer perspective but like then that solves a lot of issues because if all of a sudden you know that there's a smart contract for instance with payments when you're sending usdc it's super simple like it's not like this crazy abstract like smart contract it's like very simple sending so if an engineer explicitly says my contract's only made for payments or it's the venmo onchain well that's just very spec explicit it's a very like dumb smart contract it's so that's a deterministic parallel Computing environment that salana in sui has you have optimistic which modad app do say some of the ethereum maybe can do this

with access list but I'm like well okay like the issue with that is when you're trying to do the ordering of transactions and making sure that there's no like conflicting right it becomes incredibly hard to like parse through conflicting transactions it just becomes easier in a deterministic environment because you know when you're sending money boom easy like you can the finality for that and the and again the finality is faster but more importantly you can do more Dynamic and better price discrimination on fees because then all of a sudden you're like you can set what I'm trying to say is maybe it's is to Nuance but like I'm of the opinion that any infrastructure debate perhaps the most important thing

now is understanding how these different three cost components of blockchains are going to look over time because scalability is a very like TPS all this stuff is it's like tvl right but I think if we really dissect it's like all right what is your Hardware cost requirements going to look at when you have millions of applications and millions of users certainly TPS like is not a standard it's not standardized yet every project claims that they have the highest DPS so for me that's just like it's a [ __ ] metric until we have some reasonable standard but it's really I think it's broadband and low credit shout out to L like Broadband probably become one of the most important and highest cost of blockchains not Hardware um and of

course the most important thing is like how many people are actually running full nodes not light noes full nodes because then you can look at the Nakamoto consensus and say okay well there's 20 different full nodes in salano versus maybe two in ethereum so while realistically you it's much cheaper from Hardware perspective to run a node in ethereum no one's doing it practically no one's running a [ __ ] node in their kitchen like no one but if you have sophisticated players that are like jumps of the world say wow like a an environment where data syns in real time and you can build all these different incredible applications like a centralized order book model and a per on chain there's huge fees that can be extracted from that yeah I'm going to Pony up the hardware cost and and yeah I

can probably stomach the bandwidth cost um so I'm I'm I'm like deep on this I'm like of course like not articulating this in in the best manner but um I think over time people will have this Awakening I think we you know and and and I'm not a maximalist I don't want to F ethereum I think there are merits by the way I was with you until the very I think the there are three or four thousand full nodes on on ether maybe even more than 3 3,500 full notes on eth there but I was with you until the end there there was like 3,000 or so also folks it is 11: p.m. where Santi is and has not eaten food all day so we

like we like 11m fasting Santi here having an apple all day but spicy you know I mean like yeah yeah yeah it's it's I'm going through this process I I'm not look I am participated in the early rounds of Sala I did it a Pary I wanted to have exposure that did I appreciate all this that I'm saying now absolutely not for me it was a of the team back then um I've been I've been a judge in many hackathons credit the ban for inviting me I've been a breakpoint speaker I've been going to breakpoint I didn't go this year because um I I couldn't go I was running the marathon um but it's important to pay attention to this stuff

and I also think a lot of this infrastructure debate and scalability debate should be taken with a a bit of a perspective as you said on how the internet actually happened like you can't really I'm not a builder I'm not technical but I love love history and I just constantly remind myself that technology moves really fast the best thing that you can do because I'm not going to predict it I'm not going to predict the future just understand the present exceptionally well better than others and I don't think a lot of fund managers really understand this Nuance I think they're opinionated I think maybe it's just by some sort of selection that they've seen more deal flow in ethereum but I think that's going to rapidly change in fact I know it because I've talked to most FS out there in the

last like month and they're all asking the same goddamn question how much e should I have relative to Soul 10 to one 5 to one 1 to one zero to one it's all the same they're all asking themselves the exact same question and it's not just salana it's other um l1s and if anything if anything like I still believe that there's a place for you know ethereum and the VM and l2s I mean I certainly made investments in a lot of this stuff um it just depends on the use case and a lot of these use cases we haven't even started to see we can't even imagine them like who imagined Uber would have been a thing smartphone no one so

anyways let me um let's close with this because some folks were tweeting at us about salana nfts and they wanted they wanted your take on this so I actually do want to I'm gonna I'm G to go you were you were trying to write Bell cver I'm going to bring back to the left side here if you look at madlads they are they were sitting at 40 45 to 50 soul back in when is this two weeks ago that do not looking at video I'm just gonna say Yano is doing technical analysis on nfts on tensor man I love I'm just looking the price I don't know how to I don't know how to use tensor this is the only way I do I click the version

bands in Fibonacci yeah we we we hit the 61 Fibonacci number wait is Matt Labs hitting resistance definitely is no we're hting resistance baby yeah exactly no lot of support on this one look at those Ballinger bands no all I'm saying is if you think if you think that soul is gonna rip the and you wanna I you like your derivatives right um you know I'm out here just going long coinbase and you're doing like triple quadruple whatever backward per lower risk on the strategy um why not just buy what is it qux or whatever or qu an H quack quack quacks yeah mad Lads or torans like why not like that's

basically a lever bed on Soul or or maybe you are as well it's really a question about what I'm not actually asking about I'm asking about how do you think about buying nfts look this goes back to the value Cru um do you buy as a as a fund manager whatever you want to outperform The Benchmark if you're not outperforming ethereum or Bitcoin or salana well folks return capital and whatever especially now that the ETF is coming so I I I I think certainly now as well as a I still do as consider myself a professional man manager even though it's just my Capital like I want to have the same discipline and structure

so it's hard to outperform it has been hard to perform over a decent period of time the underlying Bitcoin ethereum like most funds actually don't the same way that most hedge funds haven't outperform the S&P and NASDAQ so think I think it's it's it's hard a timing to to like do these lever bets on these ecosystems I I I've expressed certain views right for instance betting Define ethereum well that was a Pary was a lever bet on ethereum now that at some point is also very pated view on tii now you could say okay well if salana really picks up in a version where Solana 10x from

here flip e or just is it parody right goes back to 200 or what whatever right it grows in in value Network value what needs to happen for that right and so if you invert and you say okay what needs to happen for soul to do X or Y I think you could reasonably say that a whole host of applications are going to be built some of which a lot of it was what has been built in ethereum has been successful what can be ported over to salana the more perhaps interesting discussion because a lot of that has already happened is um you know which applications are getting traction but also which applications that didn't work in ethereum can work in a better in a in a more higher performant however you want to Define that execution consensus

environment whatever and I think that is the the more interesting question now is is it going to be gaming is it going to be you know social is it going to be so when I look back conely in the seven deals that I've made those seven deals are early stage bets on parts of salana like like salana V you know the eclipse for instance um um that was one bet so that's a salana evm like the svm right um like margin fi for instance well that's like a you know money market of sorts in in in Sal so I think that I would I think of it as I always want to hold the underlying the

base because I think value does acre this is like you know fat protocol thesis kind of thing um because I'm making two different bets one that Solana is underappreciated and the whole Venture community and funding community and like doesn't have enough while it hasn't had incredible performance Year date 6X or whatever um it's still on a relative basis like quite small so but I do think that um I wouldn't touch nfts for that not because I don't think you can actually outperform I think there's a version where you you're you're you buying nfts on salana vastly outperforms my private investments in some of these applications that may take four years into making and might not even make it

so but that's that's collecting man I don't I don't collect to sell that's just my philosophy I don't think I've ever sold an nft maybe one actually where I was gifted an nft and then someone wanted to buy it from me and the team that that gift it to me I'm like this is weird uh no I also don't think I've ever sold an nft though to be fair I also really sold crypto when I should have sold crypto and should have sold some of those I I I it's hard because I mean I think there's many oneon-one rules of investing don't lose money which is kind of like okay duh but the more important one is just don't fall in love with anything yeah so always have a price Target in

mind which Tommy's point in that in that group chat which was you you and Ryan were telling him to get a punk and he's like look I don't want to get married to anything that's that's the problem with nfds like like just become attached to these things anyways I don't know how you think about it to but look I suffice to say that I'm making some meaning pretty meaningful changes in my portfolio be because I've gone back to kind of first principle thinking and just going a bit deeper on the tech yeah cool that feels like a good place to rap is it I have a hard stop in few minutes yeah well listen you're like I'm also like I don't know I'm ready to go for an hour can I can I what do want talk about

we got Lio is Lio a systematic the thing we talk we didn't talk about Lido we didn't talk about metallic post we didn't talk about about Wormhole when did this when did this Wormhole fundraise actually happen this feels like a raise that happened no idea this feels negotiated yeah there's so much I mean look folks we're heading into the holidays I'm gonna be doing a bunch of traveling but I'm fired up uh there's a lot to talk about we don't got we don't got holidays yet we got three weeks till the holiday we got four weeks till the holidays don't don't try to get off this easy you know it's like is is it that speaking we have to roundout it with Spotify of course which is two things one I want folks to drop their year in review and hopefully we see Empire only if Empire was on there for

sure no no no I want to see what people listen to and if we're last fine like I want to actually pay attention to that but also as we think about the holidays look man there's people that put up their Christmas tree and whatever holiday attire like a month ago and Mariah carry what's that song yeah we all ha itrm look you might laugh at her man the amount of royalties that she makes on that we're doing the wrong man we should EDM track and claim royalties on that on chain of course e car is All I Want For Christmas all I want for Christmas is you made

Carrie $60 million between 94 and 2016 so that doesn't take into account the last seven years um God damn God I hate the song I love that I love it we need a better jingle for Empire is what we need so we can yeah can someone we need a jingle here and like we need a someone drum up a better jingle for Empire we're still using this thing we I can't even get Block works and Empire merch folks like we are still very much in we're sluming it baby we're sluming it anyways thanks everyone for listening it's been a treat Gio for the record let it be known that is shutting me down it's 105 it's almost 11: pm here I got a flight to catch that is GNA severely jet

lag me but I still want to go and he's dropping me so let let it be known that that is happening peace folks hey everyone thank you so much for watching today's episode really hope you enjoyed it we wanted to take a second to just remind you about our upcoming digital assets Summit in London March 18th to 20th Santi and I got your back seats are limited and we hooked you up with a 20% off discount code it is Empire 20 if you heard it earlier in the podcast there's a little competition running at blockworks to see who can drive the most number of tickets so when you register for the digital asset Summit make sure you use our code Empire 20 see you in [Music] London