Latest / CRYPTO 101 / Ep. 706 Revolutionizing Ethereum: The Future of Gas Fees with ETHGas

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Ep. 706 Revolutionizing Ethereum: The Future of Gas Fees with ETHGas · CRYPTO 101

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[SPEAKER_01]: Welcome to the Crypto101 podcast, presented by Gemini.
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[SPEAKER_01]: Your bridge to the future of money.
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[SPEAKER_01]: Alright everyone, welcome back to the Crypto 101 podcast.
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[SPEAKER_01]: Hope everyone's having a good day.
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[SPEAKER_01]: Hope you're all having a good week or a month.
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[SPEAKER_01]: No, even if you're listening to Nane here at a future point in time, and this is one of those past episodes we're like, man.
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[SPEAKER_01]: I just needed to listen to this because today we're going to be talking all about a theory and gas fees and how the ecosystem has changed and scaled over the years.
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[SPEAKER_01]: So we wanted to bring in Kevin Lepseau.
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[SPEAKER_01]: He's the founder of ETH gas, Kevin, welcome and it's good to have you.
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[SPEAKER_00]: Thanks for having me Brendan really, really excited to go through this up and following you guys for a while.
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[SPEAKER_00]: So it's an honor to be here.
0:53
[SPEAKER_01]: it the honor as are as my friend it's it's so awesome because when you look at the Ethereum landscape it has changed vastly over the years and I think everyone sees that if you've been in the Ethereum for any amount of time it has changed so
1:10
[SPEAKER_01]: Well, wildly, from cycle to cycle year to year, and the rate at which things are moving feels like it continues to accelerate.
1:18
[SPEAKER_01]: Now, prices are always going to be volatile at the time of recording this.
1:22
[SPEAKER_01]: We know that, right?
1:23
[SPEAKER_01]: We've seen a lot of volatility in price actions, lots of ups and downs, and a little bit of negative price action, but the fundamentals continue to move on words and really to the upside.
1:34
[SPEAKER_01]: I would say for the better.
1:36
[SPEAKER_01]: You know, one of the big things that we want to talk about here today is just everything that has happened to Ethereum and what you all have been working on at ETH gas.
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[SPEAKER_01]: And I think it's the perfect time to do it because there was some big headlines that came out in regards to ETH and its skill ability and what's happening.
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[SPEAKER_01]: And I think the average person has questions about Ethereum saying, hey, you know, is this really scalable?
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[SPEAKER_01]: Can it ever get to the point that it's fully scalable?
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[SPEAKER_01]: Where it's affordable and efficient for people and companies and, you know, the general population to use.
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[SPEAKER_01]: And you've kind of worked towards a solution to that as we could, you know, kind of dive into in today's episode.
2:15
[SPEAKER_01]: But before we do that, I mean, let's just start from the very beginning.
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[SPEAKER_01]: You spent about two decades across all of finance and technology, and it led you to this point where you're like, you know what, I want to push towards crypto.
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[SPEAKER_01]: I want to focus on crypto and more specifically, I want to focus on Ethereum.
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[SPEAKER_01]: What kind of led you to that?
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[SPEAKER_00]: Wow.
2:38
[SPEAKER_00]: Yeah.
2:38
[SPEAKER_00]: Well, I started in TradFi.
2:42
[SPEAKER_00]: So my first 12 years were in TradFi.
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[SPEAKER_00]: I started as a a Valtrader FX option trader or interest rates credit correlation.
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[SPEAKER_00]: I got really, really deep into
2:53
[SPEAKER_00]: The, the, the, the, the, the trad-fi scene and, you know, there's a lot of people who trade, but the area that we were in, were in the credit markets and the mortgage markets.
3:03
[SPEAKER_00]: And of course, in 08, we had Lehman and the and the credit crisis.
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[SPEAKER_00]: And so it was during that time when I realized that credit really drives the world in many ways that people don't understand like, for the most part, many of us follow like the stock market, we see, you know, stocks or the indexes going up
3:23
[SPEAKER_00]: But, you know, like our money goes towards our mortgage, it goes towards like these like long-term payments that we need to make.
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[SPEAKER_00]: And so, having seen kind of the the underbelly of that in a weight and kind of the reconstruction, I was like,
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[SPEAKER_00]: mind blowing because i i didn't understand but i was like this is messed up because fundamentally between someone that would lend money to a bank and someone that would borrow there's about 12 13 intermediaries in between and they're all making money on everyone and so you know that brings us to maybe 20
3:56
[SPEAKER_00]: 11, 2012 when I left finance, but that was around that time.
4:00
[SPEAKER_00]: I started mining Bitcoin with a buddy and, you know, it was like, there's like silk road.
4:05
[SPEAKER_00]: It was just funny stuff kind of going on and just tinkering around at the time.
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[SPEAKER_00]: But then, you know, there's this idea like, well, what could Bitcoin become?
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[SPEAKER_00]: And, you know, a bit of skepticism on my side, but just kind of tinkering in the space, low and behold, Ethereum comes along.
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[SPEAKER_00]: And here in Hong Kong, there's a lot of these like,
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[SPEAKER_00]: OG crypto players so in the scene here a lot of the exchanges started in the region here as well and the talent was coming through here talking about this new chain called ethereum and I was like whoa that that's a little different than you then bitcoin you can actually do all these things and so fast forward at the time obviously was an idea it was like if this takes off it really will work
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[SPEAKER_00]: I realized like, hey, we have those rails in place now for a financial system.
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[SPEAKER_00]: Like, it's not just the technology, we're starting to build the fundamentals of a financial system and it was just the right time.
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[SPEAKER_00]: You know, I had done a decade in Tradfie at like the heart of the financial markets.
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[SPEAKER_00]: I had built an enterprise tech company and I was like, let's jump into the space.
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[SPEAKER_00]: So that's kind of how I got into it.
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[SPEAKER_00]: Yeah, and I guess I'll chat a bit of eth gas specifically, maybe, or what do you think?
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[SPEAKER_01]: Yeah, I mean, I guess before we even get in the eth gas, like, let's let's set the stage here because before you've got in the eth gas, like, how did your background in financial engineering and market design and all of that shaped the way that you look at something like block block space, for example, because most users still kind of think of it as just gas fees, right?
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[SPEAKER_00]: for sure.
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[SPEAKER_00]: So there's a couple of parts to this.
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[SPEAKER_00]: One is that, like, there's a lot of people in this space think about the technology and they don't necessarily think about what are the economic rationale, like what drives people to act in the way they do at kind of the micro economic scale and kind of at the macro side of things.
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[SPEAKER_00]: And so, you know, on the micro
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[SPEAKER_00]: Yes, we're paying gas and gas fees kind of go up and down.
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[SPEAKER_00]: Why do they go up and down, right?
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[SPEAKER_00]: Like, why does MEV exist?
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[SPEAKER_00]: Like, what is it?
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[SPEAKER_00]: And like, can I really feel it or can I not?
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[SPEAKER_00]: And so there's that part of it and then there's the the macro part of it, which is well,
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[SPEAKER_00]: You know, block space is the single most valuable instrument in crypto, like without block space ethereum is worth zero, all the assets on ethereum were zero and so ethereum's block space is worth more than the network itself and yet.
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[SPEAKER_00]: in the real world we have commodity markets, you know, we trade, you know, energy, precious metals, base metals, pork bellies and everything, right?
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[SPEAKER_00]: But, you know, in the real world, we have these markets because they provide transparency.
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[SPEAKER_00]: They help people within that ecosystem managed risk.
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[SPEAKER_00]: They help to eliminate cartels.
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[SPEAKER_00]: And that's exactly what we have in crypto, because Ethereum is run by and every blockchain.
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[SPEAKER_00]: is to a large extent run by cartels.
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[SPEAKER_00]: You have a very small number of people that take advantage of everyone else and they're able to kind of move these markets around.
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[SPEAKER_00]: And so on the macro side of things, I felt that we need a block space market to provide this transparency in,
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[SPEAKER_00]: encrypto on ethereum.
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[SPEAKER_00]: And when we do that, that'll just unlock all these other things, which we can get into.
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[SPEAKER_00]: So that's it.
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[SPEAKER_00]: So there's, there's a triad file element.
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[SPEAKER_00]: It helps you kind of think big, think of like, why is the world the way it is?
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[SPEAKER_00]: And then there's a tech part, which is like, you know, just tinkering around like fundamentally like, how does this component work, how does this person talk to its other person, how do blocks get built?
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[SPEAKER_00]: And why do gas prices go up and down?
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[SPEAKER_00]: So putting the two together, it's a, it's a fun mix, but it's, uh,
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[SPEAKER_00]: It's not like a left and right side of the brain, but it's just, you know, two different parts of the background.
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[SPEAKER_01]: Yeah, well, that's kind of where ETH gas comes in, right?
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[SPEAKER_01]: You start working with your stuff.
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[SPEAKER_01]: I mean, yeah, let's just dive into that.
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[SPEAKER_01]: I mean, tell us about ETH gas and what you've been working on over there.
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[SPEAKER_00]: Yeah.
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[SPEAKER_00]: So as I was alluded to earlier, it was like, let's create this market to just trade block space.
8:28
[SPEAKER_00]: And so, you know, every 12 seconds, a new block is created.
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[SPEAKER_00]: And these blocks are just created on the fly every 12 seconds.
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[SPEAKER_00]: And yet, you know, what happens if, like, we wanted to create like a futures market around it.
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[SPEAKER_00]: So it's like, hey, Brandon, like, you're a
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[SPEAKER_00]: I, Kevin, I have someone who actually wants to buy or block a head of time.
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[SPEAKER_00]: And they'll pay you a premium.
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[SPEAKER_00]: Maybe a block is traditionally worth a hundred bucks.
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[SPEAKER_00]: But someone on this side says, hey, I'll, it brand and I'll pay you like 105.
9:02
[SPEAKER_00]: So you're like, sure, I'm getting paid 5% more than I typically do, like why not, right?
9:09
[SPEAKER_00]: And so that's basically what we created is that ability for validators to sell their block space in advance for someone to buy it and now that person can trade it just like a commodity.
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[SPEAKER_00]: You can trade block space back and forth.
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[SPEAKER_00]: It is the physical pipeline so you could actually control what trades go through in that specific block.
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[SPEAKER_00]: You could, I mean, you could censor everyone else if you want.
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[SPEAKER_00]: That doesn't change anything.
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[SPEAKER_00]: People can already do that.
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[SPEAKER_00]: But it just provides a new kind of arena where it's like, I can buy a barrel of gas.
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[SPEAKER_00]: I can buy a barrel of ethereum's gas.
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[SPEAKER_00]: And so when you do that, it really unlocks these other things.
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[SPEAKER_00]: And one of the other things that came up was we, once you have access to a block, we realize that instead of waiting for 12 seconds to build that block, what if we just built it every like 50 or 100 milliseconds?
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[SPEAKER_00]: And what if we took a block, broke it into hundreds of pieces?
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[SPEAKER_00]: and that kind of creates like a real time ethereum experience.
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[SPEAKER_00]: And so I happy to dive into that a little bit more, but that's ethgast at a high level, trade blockspace and do cool stuff with it.
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[SPEAKER_01]: there's two things I want to talk about there you know the first one is that you mentioned people can essentially like buy a barrel of of eat gas right yeah or buy a barrel of gas but there's Ethereum gas here let's yeah not literal um that would be wild although with tokenization you know who knows oh but
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[SPEAKER_01]: No, when it comes to buying that, let's dive into how that works because Ethereum fees over the years have been all over the place.
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[SPEAKER_01]: They're cheap.
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[SPEAKER_01]: You go look at 2021, 2022, absurdly expensive to the point of where I would say the average retail trader really couldn't or want it, want to do it the year, because they've got so expensive.
11:01
[SPEAKER_01]: And then you go back to the current day, and it's gotten fairly cheap again, and especially with different El, you know, well, I was not going to say different old ones.
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[SPEAKER_01]: You know, different old ones are cheaper, but especially with the addition of a lot of L2s, Ethereum gas fees can be all over the place.
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[SPEAKER_01]: Does this mean that people can buy
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[SPEAKER_01]: it when it's cheap and then use it when it's more expensive, like walk us through that process.
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[SPEAKER_00]: So not just yet.
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[SPEAKER_00]: So there's actually two parts of gas.
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[SPEAKER_00]: One is the base fee, which kind of goes up and down, and two is the right to land trades in the block.
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[SPEAKER_00]: a little bit abstract, but we're starting with the latter, which is the right to control the block and dictate which transactions go through it.
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[SPEAKER_00]: Soon, however, we will have the ability to, basically, by tokenized Ethereum gas.
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[SPEAKER_00]: So I could buy a million units of gas now, and just like a perp, I could roll it almost from block to block.
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[SPEAKER_00]: And that's to what you're
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[SPEAKER_00]: on a daily basis or whatever I need X amount of gas, I just want to buy it and so when I know I need to use it, I've pre-bought this stuff at a cheap level and maybe now it's expensive, how do I kind of spend it and so that's possible but there's some complexities around that so we're tackling the first part which is the ability to land trades in a specific block and then
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[SPEAKER_00]: I can just buy one million gas, 10 million gas, and use it when gas prices are high, or sell it when it's high, but when it's low, that type of thing.
12:43
[SPEAKER_00]: Funding rates, however, will be very interesting, though, simply because the base fee is so volatile that you will see funding rates into the hundreds of percent on a regular basis.
12:55
[SPEAKER_01]: Yeah, I mean, for all of the regions out there, like that's the thing that you need to take home.
13:00
[SPEAKER_01]: You know, one of those NFT traders, meme coin traders, maybe you're just a very frequent trader or a whale.
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[SPEAKER_01]: I mean, I think that that's going to be something to watch out for because it has.
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[SPEAKER_01]: I mean, as we just said, it's been all over the place in recent years.
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[SPEAKER_01]: And although it looks like Ethereum is scaling pretty.
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[SPEAKER_01]: You know, efficiently and effectively at this point, you just never know when activities going to surge and gas fees are going to go up and it would be a really cool feature.
13:27
[SPEAKER_01]: And I know like a lot of people would love to be able to execute on that.
13:32
[SPEAKER_01]: You know, just kind of like you always make sure, well, I can't say everyone.
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[SPEAKER_01]: But a lot of time you make sure like, okay, hey, my phone's charged.
13:38
[SPEAKER_01]: Okay, I make sure my car has gas in it.
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[SPEAKER_01]: It's always good to be prepared.
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[SPEAKER_01]: Oh, there's a big, I live in the south.
13:45
[SPEAKER_01]: Oh, there's a big hurricane coming.
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[SPEAKER_01]: Maybe I have like a little generator, maybe I get some extra food in water.
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[SPEAKER_01]: Like it's always good to kind of be prepared.
13:53
[SPEAKER_01]: And I think it makes sense for your finances as well, especially if you are active or if you hold a significant amount of assets in the Ethereum ecosystem, why not have
14:06
[SPEAKER_01]: I know a little bit of extra gas stored up.
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[SPEAKER_01]: And so it kind of just makes sense, right?
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[SPEAKER_01]: Because we use it in all these different other aspects of our life, we're able to be prepared everywhere else.
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[SPEAKER_01]: You know, we should be able to be prepared here as well.
14:18
[SPEAKER_00]: Absolutely.
14:18
[SPEAKER_00]: So, yeah, maybe a rephrasing what I was saying earlier, the first thing we'll be working with wallets on is like, you know, many wallets have like a slow, medium-fast, in terms of like landing trades on chain and there's like a different FES associated with it.
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[SPEAKER_00]: They'll be having a fourth option called like instant.
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[SPEAKER_00]: And so like that's the real-timeness, right?
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[SPEAKER_00]: So that's the first step.
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[SPEAKER_00]: Once we have the instant button or the button, basically, the next thing is like a gas tank.
14:48
[SPEAKER_00]: And this is exactly what you're saying, where, hey, I just want to buy and store some gas and it's there for what I need it.
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[SPEAKER_00]: And so at that point, the full stack is like available to the end users.
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[SPEAKER_00]: There's this behind the scenes really fast, really easy user experience, and there's the, I don't need to think about gas prices anymore.
15:08
[SPEAKER_00]: this week, or this month, and there we go.
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[SPEAKER_01]: So when you say instant, like, how instant are we talking?
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[SPEAKER_01]: Are we talking, you blink in the transactions, done kind of thing?
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[SPEAKER_01]: Like, how does it compare to maybe doing a track-fi transaction?
15:23
[SPEAKER_01]: Because that's always, I feel like the benchmark that people use is they're like, oh, what can it be as fast as like the traditional financial routes?
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[SPEAKER_01]: How does it compare, um,
15:31
[SPEAKER_00]: Not yet, but so in November last year, we were able to make Ethereum about eight times faster than Salana.
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[SPEAKER_00]: Salana is about, I think each block is 400 milliseconds, but on Ethereum, we made it about 50 milliseconds.
15:48
[SPEAKER_00]: So that's pretty good as a first shot.
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[SPEAKER_00]: So 50 milliseconds, it's basically the time that you would like,
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[SPEAKER_00]: press a button or click a button and then you kind of unclick.
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[SPEAKER_00]: So that would feel relatively instant from a human perspective.
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[SPEAKER_00]: It's not real time from a computer perspective.
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[SPEAKER_00]: It's not as fast as the NASDAQ or CME.
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[SPEAKER_00]: But I'd say for me a human interaction standpoint, that's effectively real time.
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[SPEAKER_01]: Yeah, I would agree.
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[SPEAKER_01]: I mean, when I go to the grocery store any store, and they're like, okay, we'll put in your card or tap your card sometimes I'm sitting there for five to 10 seconds waiting for it the process and this and that.
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[SPEAKER_01]: So long as it's relatively competitive to that experience, I think it makes sense.
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[SPEAKER_01]: You know, it's not gonna be something that takes 30 seconds.
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[SPEAKER_01]: It's not gonna be something that takes a minute.
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[SPEAKER_00]: I think the fact that it's, you know, one second, I would say it's analogous to, it would be faster than your Web2 checkout.
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[SPEAKER_00]: You know, like once you have entered your credit card deal that details in, and you're like, pay, there's often like, even the time to load the page takes a while, right?
16:50
[SPEAKER_00]: But here you're not, you're loading, exactly.
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[SPEAKER_00]: You're not loading an entire page.
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[SPEAKER_00]: It's just like this small little like, you have to, you know, this little component.
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[SPEAKER_00]: So, faster than Web2, faster than Web2,
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[SPEAKER_00]: Yeah, so we push the prototype to mainnet in November, so it's like, hey, this works.
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[SPEAKER_00]: Now we're at the point of integrating this end to end with everyone.
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[SPEAKER_00]: And so in November we had the validators on board.
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[SPEAKER_00]: And these are guys like blockdaming, figment, coin-based, like those types of guys.
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[SPEAKER_00]: They're not necessarily on board with us, but those types of players.
17:36
[SPEAKER_00]: you'll have some information very soon.
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[SPEAKER_00]: Maybe this week or next.
17:39
[SPEAKER_00]: So yeah, it's basically coming online very soon, it'll be kind of end to end to where the end user can do this.
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[SPEAKER_00]: However, it will not be on 100% of all of Ethereum's blocks.
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[SPEAKER_00]: Ethereum's validators are beautifully diverse, but the,
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[SPEAKER_00]: the beast of it or whatever is that, they're so diverse, we can't get them all on board at the same time.
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[SPEAKER_00]: So we're fortunate, we have about 5% of Ethereum flowing through us right now, but we know about 40% they're in our immediate network, their mix of our investors and friends, so it's easy for us to scale this quickly.
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[SPEAKER_00]: And so not every block is going to have that instant functionality, but it's reasonable for us to scale it pretty quickly,
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[SPEAKER_00]: Q3, Q4, we'll see where we are towards the end of this year, but I think a meaningful chunk of ethereum will be real time, so if every block or every third block, whatever, like, that'll feel awesome.
18:41
[SPEAKER_01]: Well, I want to talk about what that means, like what enabling that kind of instant process does in the standard that it sets.
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[SPEAKER_01]: But before we do that, yeah, I guess two followups.
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[SPEAKER_01]: Number one, how much more does it cost to do this instant measure?
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[SPEAKER_01]: You talked earlier about how there's kind of three gas feet here, you can put it to the back, the middle, the front, and then now there's the instant option.
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[SPEAKER_01]: So number one, how much more does this cost to kind of use the instant future?
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[SPEAKER_01]: And then number two,
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[SPEAKER_01]: Who is the target market here for what you all are building and designing at ETH gas?
19:16
[SPEAKER_01]: Is it retails or institutionals at everyone?
19:19
[SPEAKER_01]: If you could walk us through both of those.
19:21
[SPEAKER_00]: For sure.
19:21
[SPEAKER_00]: So how much more this is this depends?
19:26
[SPEAKER_00]: So it could cost less than it is right now, because
19:36
[SPEAKER_00]: Yeah, I guess that's a, maybe I won't go down to go down that path.
19:39
[SPEAKER_00]: So yeah, it could cost potentially less because there's a lot of like MEV trading and searchers and snipers who typically would drive up the prices of lock space, making it more difficult.
19:52
[SPEAKER_00]: So they would kind of disappear in this equation and making it more fair for everyone.
19:57
[SPEAKER_00]: So there's a world where it would be less.
19:59
[SPEAKER_00]: However,
20:00
[SPEAKER_00]: It will be more, and I don't know exactly how much more.
20:04
[SPEAKER_00]: So in 2026, we have kind of two hyper-scaling aspects coming into effect for Ethereum.
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[SPEAKER_00]: So one is the amount of block space that we have per block.
20:14
[SPEAKER_00]: It will increase from, in 2025, we had about 30 million gas per block.
20:20
[SPEAKER_00]: And this year, we're looking to get to 200 or 300.
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[SPEAKER_00]: So that broadly just means we can get 10 times that the amount of trades through within a single block, hopefully in 2026.
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[SPEAKER_00]: Now, if we can get 10 times the amount of trades through, gas prices will absolutely drop.
20:34
[SPEAKER_00]: But on our side, if we're now saying Ethereum is real time, then people are really going to want the real time experience, right?
20:40
[SPEAKER_00]: So all of a sudden, you have 10 times more capacity, but you have like a hundred times better usefulness.
20:45
[SPEAKER_00]: So, you know, how is that going to kind of offset each other?
20:47
[SPEAKER_00]: Either way, it's a good thing, right?
20:49
[SPEAKER_00]: To have both of these scaling at the same time.
20:52
[SPEAKER_00]: So, I don't know where it's going to go, but are they going to change materially from where we are now?
20:58
[SPEAKER_00]: I don't think so.
20:59
[SPEAKER_00]: So that'll be my first question in terms of where a gas cost is going to go.
21:03
[SPEAKER_01]: That makes sense, that makes total sense.
21:05
[SPEAKER_01]: And when it comes to target market here, who is the target market?
21:11
[SPEAKER_00]: So our target market is literally every single user on Ethereum.
21:14
[SPEAKER_00]: So there is, like, Brendan, like, you, just kind of like transferring to someone or like on Uniswap or Avir, whatever it might be.
21:24
[SPEAKER_00]: If you need that instant experience, I want it available for you.
21:27
[SPEAKER_00]: And all your listeners are everyone watching this to just make it faster and simpler.
21:31
[SPEAKER_00]: So that's one part of it.
21:33
[SPEAKER_00]: the other part is, well, who else benefits?
21:37
[SPEAKER_00]: And you have guys like Uniswap, for example, right, where currently, you know, people who are LPs at Uniswap, they just kind of passively earn fees on trades, but, you know, traders can only trade once in that 12 block period.
21:52
[SPEAKER_00]: But if traders can now trade three times or five times within a 12 second period, these LPs are going to make two to three
22:02
[SPEAKER_00]: Right?
22:02
[SPEAKER_00]: So all of a sudden, you this swap is going to make $23 billion more a year and like, where is that going to go?
22:08
[SPEAKER_00]: Right?
22:09
[SPEAKER_00]: Like, you have like, then making this money, it can get paid to, you know, to access that revenue, they might pay it to the validators.
22:16
[SPEAKER_00]: So the validators of ethereum benefit.
22:19
[SPEAKER_00]: Yeah, this, this really touches every single user in ethereum.
22:23
[SPEAKER_00]: So target market, people on ethereum.
22:27
[SPEAKER_01]: I think that's the way that everyone hopes that Ethereum would go, right?
22:30
[SPEAKER_01]: You kind of join in and you're saying, you know, that is the perfect world is that we get to a place where anyone and everyone can do this.
22:37
[SPEAKER_01]: Sometimes we bring guests on and they have these really awesome ideas and they're really cool and innovative and
22:44
[SPEAKER_01]: then they're targeted more towards the institutional side.
22:48
[SPEAKER_01]: We have people who reach out and say, hey, is there any way for the average Joe, like me or you, to get in on this?
22:55
[SPEAKER_01]: And then sometimes the answer is no, sometimes the answer is maybe at a later date, sometimes the answer is, well, if you're an accredited investor, but I think for anyone to have the ability to kind of flip this on, is useful.
23:07
[SPEAKER_01]: because I think before the institutional and maybe I'm a little bit wrong in this now that I think about it, but I would say before the institutional side comes in, it usually needs retail people there first, right?
23:20
[SPEAKER_01]: There needs to be the demand before the supply is actually built.
23:24
[SPEAKER_01]: Um, otherwise, you know, why would they kind of take the risk?
23:27
[SPEAKER_01]: And so I think it makes sense, you know, saying, hey, if you want to use this, you can, if you don't, if you're an institution, if you're small, big, large, you know, if you're a minnow or a whale, you know, come in and have the ability to try this and check this out because you know as you know, there's going to be someone in a unique situation where they're going to say, oh my gosh, I'm in a rush or oh my goodness, I need this done right now.
23:47
[SPEAKER_01]: There's going to be people who care more about time than price.
23:50
[SPEAKER_01]: There's going to be the vice versa.
23:52
[SPEAKER_01]: And so I think letting people have the option to do this is so important because again, going back to just like real world examples, that's the way the real world works, right?
24:02
[SPEAKER_01]: It's competitive.
24:03
[SPEAKER_01]: There's options and people get to do this.
24:05
[SPEAKER_01]: And if people want to have the option, you're saying, hey, here it is available for you.
24:10
[SPEAKER_01]: Go ahead and kind of do it yourself.
24:12
[SPEAKER_00]: absolutely so there's you know like how often do we need a real time experience you know not all the time right now of course the the trading firms they would very much prefer a real time experience so they will make a veil of this a lot more often but the the driver one of the main drivers behind this is
24:29
[SPEAKER_00]: is the goal is the desire to eliminate like MEV and like predatory players, right?
24:35
[SPEAKER_00]: Because currently, as I was mentioning earlier, within the 12 second block, everybody puts their trades ahead and then there are these auctions where it's like, hey, I'm going to front run the user, is you're going to front run those users and let's compete to see who can front run and extract the most value from the everyday people trying to land trades.
24:53
[SPEAKER_00]: And so by sequencing trades, sequencing the block in real time,
24:57
[SPEAKER_00]: That disappears for the most part, you know, like 93, 95% of this predatory behavior just disappears and it goes back to the everyday person.
25:05
[SPEAKER_00]: So that's, that's one of the, I wouldn't even call unintended side effects, but that's one of the great side effects of this.
25:13
[SPEAKER_00]: But yeah, coming back to your point in the reality how often do we need something real time?
25:17
[SPEAKER_00]: Not all the time, but when when when when when when when we do want it, we we can have it.
25:23
[SPEAKER_01]: 100% and immediately my brain goes towards, you know, I was just in the Uber the other day and there's like options where you can like, hey, you can expedite your Uber or lift you pay a little bit of an extra fee.
25:34
[SPEAKER_01]: Same thing with like door dash or food delivery.
25:37
[SPEAKER_01]: You can do an expedited fee and get it to you faster.
25:40
[SPEAKER_01]: I was just getting a suit and they said, oh, hey, we got to tailor some things and this and that.
25:44
[SPEAKER_01]: It'll be ready in two weeks.
25:45
[SPEAKER_01]: You know, what if I'm someone who's like, oh, no, I need it.
25:48
[SPEAKER_00]: Go to a letter.
25:49
[SPEAKER_01]: You didn't do a couple of days.
25:50
[SPEAKER_01]: They said, oh, well, we could do a rush, you know, a rush fee and this and that.
25:54
[SPEAKER_01]: And it's, it's so true that it's like, you know, are you always going to need that?
25:59
[SPEAKER_01]: No, but when you do, you do and to have the option there, just makes sense because we already see it in so many of our other different aspects of life.
26:10
[SPEAKER_00]: Yeah, I'll just say you have that certainty as well.
26:13
[SPEAKER_00]: So it's like, it's going to happen.
26:15
[SPEAKER_00]: Whereas sometimes you say like, I'm going to put like, you know, low gas fee and, you know, it doesn't go through in that block.
26:21
[SPEAKER_00]: And then when is it going to go through in the next block?
26:23
[SPEAKER_00]: Like, you just, you just don't want to sit there with the loading.
26:27
[SPEAKER_00]: Like, you just want things to happen sometimes, right?
26:29
[SPEAKER_00]: So frankly, if it's like 10 cents extra, 20, you're just like, okay fine, or, you know, like, door dash, you know, food delivery, or maybe the delivery driver's going to stop somewhere else first and drop something else off and like, I just want it now, like, I'm hungry, hangry, whatever it is.
26:44
[SPEAKER_00]: Yeah.
26:45
[SPEAKER_01]: 100 percent, 100 percent.
26:47
[SPEAKER_01]: So, you know, we're seeing a lot done on the L2 side, and we've seen that built out.
26:54
[SPEAKER_01]: Where do you kind of factor this in in like the role of L2s?
26:58
[SPEAKER_01]: You know, why is it important that Ethereum's executionally or reach this kind of standard as opposed to just saying, ah, you know, the L2s can handle this and they can handle the scalability features.
27:11
[SPEAKER_00]: Yeah, so
27:12
[SPEAKER_00]: There's a, there's a, there's a, there's a couple parts of this.
27:14
[SPEAKER_00]: So I think of ethereum is kind of like downtown and L2 is as, you know, like, you know, uptown or like a suburb and of course, you know, going back to as you're saying a few years ago in like NFT era, for example, like gas fees were crazy, but you know, without people trading.
27:34
[SPEAKER_00]: JPEGs, and which are largely worthless now, but without trading JPEGs, we wouldn't have brought on hundreds of millions of people into crypto, that was the thing.
27:45
[SPEAKER_00]: That brought so many people on board.
27:47
[SPEAKER_00]: And so those people who spent gas, which, you know, thank you, which kind of made Ethereum and the L2s what it is, right?
27:54
[SPEAKER_00]: It spawned kind of like that L2 roadmap where we desperately need scaling today, what do we do?
27:59
[SPEAKER_00]: And poof, there's that L2 roadmap.
28:03
[SPEAKER_00]: With roadmap, we've shifted some of the demand and some of the pressure over to the L2s.
28:08
[SPEAKER_00]: Meanwhile, we were able to scale the L1.
28:11
[SPEAKER_00]: And so now, the L1 is able to scale to 10 times, or 10, 20 times the number of trades.
28:18
[SPEAKER_00]: L1 is now as fast if not faster than many of the L2s.
28:22
[SPEAKER_00]: Now all of a sudden, this downtown core, which got congested, has fast-forwarded into a, I don't know, I need to find like a Westworld,
28:31
[SPEAKER_00]: third year, third episode, whatever, third season.
28:34
[SPEAKER_00]: When it was really futuristic or like a 5G era type of thing, you know, like we're on the cusp of that era in downtown.
28:41
[SPEAKER_00]: So all of a sudden downtown is going to look like super hot, futuristic, uh, cyphroponk, you know, there we go, right?
28:47
[SPEAKER_00]: Yeah.
28:49
[SPEAKER_00]: And when that, when that L1 is that much faster and that much better, the entire ecosystem benefits.
28:54
[SPEAKER_00]: You have a lot more trade between the L1 and the L2s, a lot more faster,
29:01
[SPEAKER_00]: and we'll see where it goes from there.
29:03
[SPEAKER_00]: So yeah, some of the liquidity might shift back to L1 just because downtown's cool, you have all the nightclubs or whatever, like things are happening, but both sides get stronger, the whole ecosystem benefits.
29:15
[SPEAKER_01]: Yeah, they do, and we've talked to both,
29:19
[SPEAKER_01]: Oh, actually, well, I would say most of the major L2s at this point and we've talked to their teams when we talked to some of the youth main net devs, and I think that they would both agree with that statement, because again, Ethereum is the main chain.
29:32
[SPEAKER_01]: It is the base layer.
29:33
[SPEAKER_01]: You improve that.
29:34
[SPEAKER_01]: I think everything else from there all on everything that's built on top of it, everything improves.
29:40
[SPEAKER_01]: And the whole ecosystem.
29:41
[SPEAKER_01]: And also, everyone benefits.
29:43
[SPEAKER_01]: It almost creates a win-win scenario.
29:44
[SPEAKER_01]: The more we build the south.
29:46
[SPEAKER_01]: Absolutely.
29:47
[SPEAKER_01]: And it, it's so easy.
29:49
[SPEAKER_01]: Just how new this stuff is in the bigger picture, in the grand scheme of things, when you look at Ethereum and most of the blockchain stuff that has happened, most of it's been in the last decade or so.
30:03
[SPEAKER_01]: And
30:04
[SPEAKER_01]: When you look at every other form of like major technology or financial technology and stuff, it's had a lot longer to build all of like, of everything that's in existence than just that.
30:17
[SPEAKER_01]: And so I think Ethereum and all of crypto, it's doing it fast, but people are,
30:24
[SPEAKER_01]: impatient, and sometimes people are fickle, and it's easy to judge it and say, why are we not already at the endgame?
30:32
[SPEAKER_01]: It's been 10 years, and then they look at everything that the TradFi industry has been building over the last, you know, century, and
30:40
[SPEAKER_01]: the hardest part is getting started, right?
30:43
[SPEAKER_01]: The hardest part is getting started and then I think you see an accelerated curve from there.
30:47
[SPEAKER_01]: So that is just something I would tell people say like, hey, you know, we're getting there.
30:51
[SPEAKER_01]: And now there's the conversation, you know, they're starting to be conversations about gasless transactions.
30:57
[SPEAKER_01]: And now gasless transactions are starting to get mentioned a lot more in crypto.
31:00
[SPEAKER_01]: You know, is there any validity to that?
31:03
[SPEAKER_01]: You know, is there a world where you could see
31:08
[SPEAKER_00]: Yeah, absolutely.
31:09
[SPEAKER_00]: So gasless in the purest sense, no, but will people need to think and care about gas?
31:17
[SPEAKER_00]: Like we can get rid of that part.
31:19
[SPEAKER_00]: And so one of the things we're working on is we have this open gas initiative, we call it.
31:25
[SPEAKER_00]: And basically it's working with protocols to shift
31:28
[SPEAKER_00]: the responsibility of gas fees to the protocol and away from the user.
31:32
[SPEAKER_00]: So guys like Pendle, Etherfai, Igunlay, or a couple others.
31:36
[SPEAKER_00]: Basically, if you're like staking, trading, interacting with these protocols, you might pay 25 cents a dollar, whatever the gas amount is.
31:45
[SPEAKER_00]: Like you're still gonna have to pay it.
31:47
[SPEAKER_00]: But at the end of the month you're going to get rebated that amount of gas back to you and what that does is it makes you realize like oh I don't need to think about where the gas prices are when I'm going to transact I just I just kind of hit the button right and so that's analogous to like
32:02
[SPEAKER_00]: currently, like if you pay for it, if you buy a coffee, imagine it's like $5.10 today, $5.13 the next day, $5.6, right?
32:13
[SPEAKER_00]: If it was just $5.10 every single day, it would be so much easier.
32:17
[SPEAKER_00]: So that's basically what happens here.
32:19
[SPEAKER_00]: The protocols will pay for gas on behalf of the end users, and they'll just bake it into their transaction fees.
32:26
[SPEAKER_00]: So if you normally pay whatever, like a 10-based
32:32
[SPEAKER_00]: But at least there's no gas, you get all those payments back.
32:36
[SPEAKER_01]: Yeah, and yeah, I think that's just the way that it would work, right?
32:40
[SPEAKER_01]: Is that it gets to be at a point where it's so small that it's like, all right, I don't care, I don't notice it.
32:47
[SPEAKER_01]: And that is the technical, you know, it's never going to be in the absolute most, you know, specific definition of free, not necessarily, but when something's so cheap that you don't have to think about it, I think that's what most people would care about, you know, where maybe a dollar or a
33:05
[SPEAKER_01]: forever, right?
33:06
[SPEAKER_01]: We'll go, you know, imagine if a couple of cents would last you the whole year.
33:08
[SPEAKER_01]: You're not going to think about it.
33:10
[SPEAKER_01]: Half the time, it stores here.
33:13
[SPEAKER_01]: You know, I'm in Florida, you know, there is, oh, you're going to have to pay a little bit more if you don't pay in cash, right?
33:20
[SPEAKER_01]: And that time, it's like a notable, a noticeable difference.
33:23
[SPEAKER_01]: Sometimes it's, you know,
33:25
[SPEAKER_01]: I don't know what, sometimes it's a matter of sense, sometimes it's a matter of like, oh, your meal is going to be an extra dollar, dollar and a half, two bucks.
33:31
[SPEAKER_01]: And so I think so long as it's like that much where you're like, oh, a dollar could cover my entire year of fees or something less than that.
33:37
[SPEAKER_01]: I don't think anyone's ever going to bat an eye or complain or worry about it.
33:43
[SPEAKER_01]: But one of the interesting things, oh yeah, go ahead.
33:45
[SPEAKER_00]: It's sort of, it's sort of cut you off there.
33:47
[SPEAKER_00]: You know, from every day person's standpoint, you would think that's the case.
33:51
[SPEAKER_00]: And I agree with you as it relates to like every day people, but the folks that have the hardest time trying to understand this is tradify.
33:59
[SPEAKER_00]: So I spoke to you with a number of banks and the thing that they can't deal with is like, well, why do gas prices go up and down?
34:08
[SPEAKER_00]: And from my perspective, it's like, come on, you're a bank, you're used to paying like $50 to settle a transaction, or like $100 in those conversations.
34:16
[SPEAKER_00]: It's like, well, it might be 50 cents or 75, or like a dollar 20, and it's like, they can't fathom a variable transaction fee.
34:24
[SPEAKER_00]: And so I don't know if that's like an education thing, or it's something they actually need to hedge, but it's surprising how,
34:32
[SPEAKER_00]: Again, they're used to paying 50 bucks to settle these things, and they're uncertain if it's like 50 cents for a dollar dollar or 50, like they struggle with that.
34:41
[SPEAKER_00]: So something we just work on, you know, together and as a community, but we'll figure it out.
34:48
[SPEAKER_01]: Well, I think you're right.
34:49
[SPEAKER_01]: I think it's an education peep thing, because people are used to wire transfers and all these other different things.
34:54
[SPEAKER_01]: And it's like, oh, you're going to be paying much more and it's going to take longer.
34:58
[SPEAKER_01]: And now it's like, hey, you have this option where you can pay less and have it faster.
35:04
[SPEAKER_01]: And they're like, oh, well, but there's a variable feature to it.
35:07
[SPEAKER_01]: And we can't do that.
35:09
[SPEAKER_01]: You know, God forbid it goes from, you're going to pay a couple cents to a couple bucks and it's going to be near instant.
35:15
[SPEAKER_01]: And then they kind of scoff at that.
35:17
[SPEAKER_01]: I think just going to need to be an education thing, and I think as...
35:22
[SPEAKER_01]: Time goes on, people are going to be more open to it.
35:26
[SPEAKER_01]: And the same way that in the early days, I'm fairly young myself, so I can only speak to this so much.
35:31
[SPEAKER_01]: But in the early days, people are hesitant to do websites.
35:35
[SPEAKER_01]: People are hesitant against the internet.
35:37
[SPEAKER_01]: People are hesitant against smartphones.
35:39
[SPEAKER_01]: When you're saying, oh, I'm going to put my credit card information online or on my phone and pay for things that way.
35:44
[SPEAKER_01]: Is that even safe?
35:46
[SPEAKER_01]: What about all these different?
35:48
[SPEAKER_01]: moving parts.
35:49
[SPEAKER_01]: And I think people are just going to warm up to that idea as blockchain becomes so integrated that it's borderline seamless.
35:56
[SPEAKER_01]: And I think the end goal, at least in my opinion, is for us to get to a point where you don't even have to necessarily know or care that you're using blockchain technology and have it just working the background and making all of the infrastructure and your overall life and experience better.
36:13
[SPEAKER_01]: And again, I think we get there.
36:15
[SPEAKER_01]: I really do.
36:18
[SPEAKER_01]: So let's talk about Ethereum just like the state of Ethereum.
36:21
[SPEAKER_01]: You know, some of the transactions we mentioned this earlier, just recently here, you know, in 2026, Ethereum transactions hitting all time highs here fairly recently.
36:31
[SPEAKER_01]: And at the same time, gas fees were going down to, well, I think it was multi-year lows.
36:36
[SPEAKER_01]: Gas fees were under one cent at the same time that Ethereum's transaction count was at all time highs, which is fascinating.
36:45
[SPEAKER_01]: Because again, a couple of years ago,
36:48
[SPEAKER_01]: And that would have broken a lot of people's brains.
36:52
[SPEAKER_01]: They're going to say, what do you mean?
36:53
[SPEAKER_01]: We're able to do more than Deep by Summer and the NFT boom and the meme coin surge.
36:58
[SPEAKER_01]: And we're able to do more than all of that.
37:00
[SPEAKER_01]: I think it was almost double that.
37:01
[SPEAKER_01]: I could be wrong.
37:03
[SPEAKER_01]: And then the fees are still under a cent.
37:07
[SPEAKER_01]: Like, where is all of this coming from?
37:09
[SPEAKER_01]: Have you been able to look into that at all?
37:12
[SPEAKER_01]: Because yeah, go ahead, good.
37:14
[SPEAKER_00]: Yeah, I guess a little bit.
37:16
[SPEAKER_00]: So I saw something earlier.
37:18
[SPEAKER_00]: I don't know if it was today or yesterday, where it was cheaper to do either a swap or a transfer on Ethereum versus base.
37:25
[SPEAKER_00]: And that's interesting, right?
37:26
[SPEAKER_00]: And I think what happens is that on base, you have so many transactions, but they're much smaller, right?
37:33
[SPEAKER_00]: It's like $100, $200 or whatever it might be.
37:36
[SPEAKER_00]: But again, on Ethereum, those small relatively micro-transactions, they don't exist as much on Ethereum.
37:44
[SPEAKER_00]: And they probably should, because you get less slippage with, like, uniswap than on base.
37:49
[SPEAKER_00]: I don't know.
37:50
[SPEAKER_00]: You know, you know, swap still has, sorry, L1 still has like the vast large pools of liquidity.
37:55
[SPEAKER_00]: So we'll see where that goes, right?
37:58
[SPEAKER_00]: As I said, the L1 itself is going to have 10 times the block space.
38:01
[SPEAKER_00]: So if that goes from a cent to a tenth of a cent, you'll see a lot of activity shift back to the L1.
38:08
[SPEAKER_00]: So we're in a great situation here for ethereum.
38:13
[SPEAKER_00]: as the broader ecosystem, but we'll see what happens.
38:17
[SPEAKER_00]: Maybe people are happily stuck, not trading downtown, but in the suburb, I'm happy where I am, out in the pasture or wherever they are.
38:29
[SPEAKER_01]: Yeah, spot on man's spot on.
38:31
[SPEAKER_01]: So if people want to get involved here, and they want to utilize some of the features that we have talked about today, like how do they do that?
38:38
[SPEAKER_01]: Can they just,
38:40
[SPEAKER_01]: Do they need to go to a website?
38:41
[SPEAKER_01]: Do they need to sign up?
38:42
[SPEAKER_01]: Can they do it from a metamask wall at like walk us through that?
38:46
[SPEAKER_00]: sure.
38:46
[SPEAKER_00]: So there's two parts to this.
38:49
[SPEAKER_00]: The first part is the real-time trading part.
38:53
[SPEAKER_00]: So we are speaking with about a dozen wallets at different stages of integrating the real-time capability into the wallet.
39:00
[SPEAKER_00]: And so I'd say, by, you know, summertime, you know, we'll have some of the major wallets integrated on on that front.
39:08
[SPEAKER_00]: There's a, I mean, there's a wallet.
39:13
[SPEAKER_00]: Yeah, I'd say give us a, give us about a month from now and about a hundred million people will have access to this.
39:20
[SPEAKER_00]: Assuming the numbers at the wallets have our, our true.
39:23
[SPEAKER_00]: So yeah, well, about a hundred million people will have access within about a month.
39:27
[SPEAKER_00]: And then for kind of the gasless experience, we've onboarded a handful of protocols into this in our, in our open gas initiative.
39:36
[SPEAKER_00]: And in that case,
39:38
[SPEAKER_00]: on our website we have a list of our partner protocols for that.
39:41
[SPEAKER_00]: And so if you are, again, trading, swapping, interacting with those protocols, then at the end of the month, you can come to our website and just hit claim and get that gas back.
39:52
[SPEAKER_00]: And so we'll be kicking that off likely starting in a week for end of this month.
39:58
[SPEAKER_00]: So like March 1st or March 3rd, you'll be able to start claiming back your gas fees spent with our partner protocols in February.
40:05
[SPEAKER_01]: Wow, I can't believe what a February already I know I was doing a I was doing a call just yesterday And I kicked it off and I said welcome back.
40:15
[SPEAKER_01]: It's January.
40:16
[SPEAKER_01]: Oh wait.
40:17
[SPEAKER_01]: No.
40:17
[SPEAKER_01]: It's actually February now already It's just yeah times times blind by my friend For sure another thing you know it's so people want to get involved.
40:28
[SPEAKER_01]: Where can they follow you on both your website and your socials Where should people search for yet?
40:35
[SPEAKER_00]: Yeah, so on my X, I'm just Lepso at LEPSOE.
40:40
[SPEAKER_00]: Our team account is ETH gas official.
40:44
[SPEAKER_00]: Hit us up there.
40:44
[SPEAKER_00]: Say hi.
40:46
[SPEAKER_01]: awesome.
40:46
[SPEAKER_01]: Well, that's going to go ahead and wrap us up every one.
40:50
[SPEAKER_01]: Kevin, once again, thank you so much.
40:52
[SPEAKER_01]: It's been super insightful getting here about what you're building and just how you guys are moving this side of the industry forward.
41:00
[SPEAKER_01]: I mean, it truly is fascinating to anyone who's using Ethereum on a somewhat regular basis.
41:06
[SPEAKER_01]: And if you are, definitely go check them out, guys.
41:09
[SPEAKER_01]: They're doing a lot of cool stuff, obviously so many different awesome topics that we got to talk about today.
41:15
[SPEAKER_01]: But the big takeaway for me here is that looking at what this enables for the future of crypto, what if we are able to get near instant transactions?
41:24
[SPEAKER_01]: What if we are able to make gas fees go down so much that you don't have to think about?
41:27
[SPEAKER_01]: And what if we are able to enable so many different forms of innovation that weren't previously possible,
41:33
[SPEAKER_01]: Because of some of these issues, and so Kevin and his old team over there are working hard on this.
41:38
[SPEAKER_01]: So Kevin once again Thank you so much for watching.
41:41
[SPEAKER_01]: Thank you for having me.
41:42
[SPEAKER_01]: Thank you