Latest / The Paul Barron Crypto Show / Ethereum Upgrade Roadmap🚀Justin Drake INTERVIEW

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Ethereum Upgrade Roadmap🚀Justin Drake INTERVIEW · The Paul Barron Crypto Show

• 0:05
  Speaker 1: My name is Paul Barren. Welcome back into tech Path.
• 0:07
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• 0:32
  Speaker 1: All right, let's get into it today. We've got Justin
• 0:33
  Speaker 1: Drake who is a lead researcher over with Ethereum and
• 0:38
  Speaker 1: we wanted to dive in. So Justin, welcome, Welcome into
• 0:40
  Speaker 1: the show.
• 0:41
  Speaker 2: How are you.
• 0:42
  Speaker 3: I'm doing great? Thanks for having me.
• 0:44
  Speaker 1: Yeah, So Justin, let's go into a little bit of
• 0:46
  Speaker 1: the detail. First of all, I want to learn a
• 0:48
  Speaker 1: little bit about beamchain and really kind of give our
• 0:52
  Speaker 1: viewers and listeners a little bit more of a framework
• 0:55
  Speaker 1: of what you're up to give us a one on one.
• 1:00
  Speaker 3: Sure. So first of all, the beamchain is a proposal
• 1:03
  Speaker 3: from me, and basically it's trying to ask the question,
• 1:07
  Speaker 3: how can ifyum be most secure and most robust for
• 1:11
  Speaker 3: the decades and centuries to come. Basically, how can ethereum
• 1:15
  Speaker 3: sustainably secure tens of trillions of dollars maybe hundreds of
• 1:19
  Speaker 3: trillions of dollars in the future. You can think of
• 1:22
  Speaker 3: it as being a compilation, an amalgation of all of
• 1:27
  Speaker 3: the latest and greatest research ideas that make a film
• 1:31
  Speaker 3: L one the most secure blockchain in the world.
• 1:36
  Speaker 1: Well, I think the key here with eth when many
• 1:39
  Speaker 1: people look at this obviously understanding the power of the
• 1:43
  Speaker 1: L one itself, but also just the flexibility of what
• 1:47
  Speaker 1: the L two architecture has been able to bring to
• 1:49
  Speaker 1: the chain itself. When you look at the execution layer
• 1:52
  Speaker 1: and the data layer. I was looking at one of
• 1:53
  Speaker 1: your scopes here you've got this on the application facing
• 1:57
  Speaker 1: side and then obviously the consensus layer on Bacon chain
• 2:00
  Speaker 1: back in give me a little bit of any updates
• 2:03
  Speaker 1: on this, anything that you can share with us of
• 2:05
  Speaker 1: where you are.
• 2:08
  Speaker 3: Sure. So the L one is made out of three
• 2:11
  Speaker 3: separate layers. There's the consensus layer that we call the CL.
• 2:15
  Speaker 3: There's the data layer where rolled up publish their data
• 2:19
  Speaker 3: in so called blobs. That's the d L, and then
• 2:22
  Speaker 3: there's the execution layer, the e L, where the EVM resides.
• 2:29
  Speaker 3: And what's the beam chain is all about. Is this
• 2:33
  Speaker 3: first layer, the consensus layer. And as you said, the
• 2:36
  Speaker 3: consensus layer doesn't have to be super expressive because all
• 2:40
  Speaker 3: of the expressivity and creativity can happen at the data
• 2:43
  Speaker 3: and execution layers. So actually this is one of the
• 2:48
  Speaker 3: reasons why we can change the consensus layer so dramatically.
• 2:51
  Speaker 3: It is because no application is consuming it, so there
• 2:54
  Speaker 3: is no requirement to be forward compatible. Now, in contrast
• 3:00
  Speaker 3: to the consensus layer beamchain project being a long term
• 3:05
  Speaker 3: project that will take several years, we are going to
• 3:08
  Speaker 3: see incremental improvements in the months to come for the
• 3:11
  Speaker 3: data and execution layer. So just one example and the
• 3:15
  Speaker 3: next hart fork, which would happened in Q one of
• 3:17
  Speaker 3: next year, we're going to have a two x increase
• 3:22
  Speaker 3: in the number of blocks, so we're going to go
• 3:24
  Speaker 3: from a target of three blobs per block to six
• 3:26
  Speaker 3: blobs per block. And it looks like the community has
• 3:29
  Speaker 3: also reached consensus on increasing the gas limits. So right
• 3:32
  Speaker 3: now we have a thirty million gas limit per per block,
• 3:37
  Speaker 3: and that is set to rise to at least thirty
• 3:40
  Speaker 3: six million, so that would be at least a twenty
• 3:42
  Speaker 3: percent bump, okay, but I'm hopeful that this will grow
• 3:46
  Speaker 3: even further in the months to come.
• 3:48
  Speaker 1: What has been the feedback in from the dev community?
• 3:52
  Speaker 1: Has it been embracing this idea? Is what has kind
• 3:55
  Speaker 1: of been your understanding of where the devs are going
• 3:58
  Speaker 1: with this?
• 4:01
  Speaker 3: Yeah, So I've put a lot of effort to try
• 4:03
  Speaker 3: and build the existing devs and the researchers on the
• 4:07
  Speaker 3: idea of the beam chain, and the response after my
• 4:12
  Speaker 3: talk has been overwhelmingly positive from new devs. So I've
• 4:16
  Speaker 3: had one hundred individual people reach out, and we have
• 4:19
  Speaker 3: eight new teams that want to build a beam client.
• 4:22
  Speaker 3: So one of the things that if I comprizes itself
• 4:24
  Speaker 3: with is client diversity. We have six existing consensus layer
• 4:30
  Speaker 3: teams and there's potentially eight new ones that are coming
• 4:34
  Speaker 3: forward to build a beam client. So overwhelmingly positive. Having
• 4:40
  Speaker 3: said that, I do want to highlight that there were
• 4:42
  Speaker 3: some mixed reactions on Twitter. People on Twitter were a
• 4:47
  Speaker 3: little upset by the fact that the timelines were so
• 4:50
  Speaker 3: long that we were planning so far ahead when there
• 4:52
  Speaker 3: were battles in the shorter term to fight as well.
• 4:56
  Speaker 1: Yeah, I'm looking here at the straw Man timeline right now.
• 4:59
  Speaker 1: You've got this, well, yeah, it is going out to
• 5:01
  Speaker 1: twenty thirty. Is there any potential of where any of
• 5:04
  Speaker 1: these phases could move forward? I mean, building is in
• 5:07
  Speaker 1: twenty twenty six, testing phases out in twenty seven through nine.
• 5:12
  Speaker 1: What's the potential there of possibly seeing that earlier?
• 5:17
  Speaker 3: Right? So, one of the things that I want to
• 5:18
  Speaker 3: highlight is that this is about setting long term foundations.
• 5:23
  Speaker 3: So one example would be post quantum security. We don't
• 5:26
  Speaker 3: need post quantum security next year or the year after that.
• 5:29
  Speaker 3: It's something that we need to work towards, but it's
• 5:32
  Speaker 3: not something that we need to necessarily rush. And all
• 5:36
  Speaker 3: of the short term performance upgrades that we need to
• 5:39
  Speaker 3: remain competitive in the short term, those are coming in
• 5:43
  Speaker 3: the form of the increase in blobs, but also the
• 5:45
  Speaker 3: increase of gas limit and as well all sorts of
• 5:48
  Speaker 3: innovations that are happening in DL twos. So one massive
• 5:51
  Speaker 3: innovation is this notion of pre confirmations. A pre confirmation
• 5:55
  Speaker 3: is a way for a user to know how that
• 5:57
  Speaker 3: transaction will execute before the block is built, and what
• 6:01
  Speaker 3: that means is that they don't have to wait the
• 6:03
  Speaker 3: force flood duration. So on Arbitrend, for example, they have
• 6:06
  Speaker 3: two hundred and fifteen millisecond pre confirmations. And what I
• 6:10
  Speaker 3: expect what happen is that the latency will go down
• 6:13
  Speaker 3: to zero, meaning that it will be a single pin
• 6:16
  Speaker 3: time from the perspective of the user, and there will
• 6:20
  Speaker 3: be no overhead above and beyond that, we're also seeing
• 6:24
  Speaker 3: a dramatic increase in throughput from the olt who's in
• 6:28
  Speaker 3: our combined So if you go to roll up dot WTF,
• 6:31
  Speaker 3: you have this website that shows you how the whole
• 6:34
  Speaker 3: space of L two's is scaling dramatically. So I wouldn't
• 6:40
  Speaker 3: be too upset about the fact that all of the
• 6:43
  Speaker 3: security improvements take years, because ultimately what developers and users
• 6:48
  Speaker 3: care about in the very short term are performance improvements
• 6:51
  Speaker 3: that will be coming in the short term as well.
• 6:53
  Speaker 1: Yeah, and I think I think where some of that
• 6:56
  Speaker 1: maybe pushed back from the community is coming because they
• 6:59
  Speaker 1: feel that they're are you know, some other chains out
• 7:02
  Speaker 1: there that have been able to kind of scale a
• 7:04
  Speaker 1: little bit differently. If you look at just Solana versus Ethereum,
• 7:08
  Speaker 1: this is one example, you know, could Solana scale faster
• 7:11
  Speaker 1: in the same timeline, So one of the factors with that,
• 7:14
  Speaker 1: along with others. You know, there's many other chains that
• 7:16
  Speaker 1: could possibly even go in there. Obviously, we saw some
• 7:19
  Speaker 1: massive improvements here recently, even within Polka Dot. So when
• 7:25
  Speaker 1: you look at that and you kind of frame that
• 7:27
  Speaker 1: around the rest of the environment of blockchain right now,
• 7:30
  Speaker 1: do you not feel like this is something that is
• 7:33
  Speaker 1: more urgent to try to squeeze that timeline down and
• 7:36
  Speaker 1: still allow for the scalability to advance a little bit sooner.
• 7:44
  Speaker 3: I mean, Solana is interesting in the sense that they've
• 7:47
  Speaker 3: been around for five years and they haven't increased that
• 7:50
  Speaker 3: gas limit even a single time since then. Yes, they
• 7:53
  Speaker 3: have a forty eight million computer unit limit. They're looking
• 7:57
  Speaker 3: to increase it, but they're looking to increase it by
• 7:59
  Speaker 3: four percent in the in the next fork. So Solana
• 8:04
  Speaker 3: has this this design architecture where they're trying to stuff
• 8:08
  Speaker 3: all of the transactions in a single server, and what
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  Speaker 3: that creates is a massive bottleneck because you can't just
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  Speaker 3: put all of the transactional flow of the intentive value
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  Speaker 3: on one single server. So instead, the better way, the
• 8:21
  Speaker 3: more sustainable way of scaling, is what's called horizontal scaling,
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  Speaker 3: where you have multiple servers, if you will, that are
• 8:29
  Speaker 3: churning through transactions in parallel. And this is exactly what
• 8:32
  Speaker 3: we're seeing with the L twos. Each L two you
• 8:35
  Speaker 3: can think of as being a parallel shard. And you're
• 8:39
  Speaker 3: right that there's other ecosystems like Polka Dot that have
• 8:42
  Speaker 3: these these these shards running in parallel, and that is
• 8:45
  Speaker 3: the ultimately the most sustainable way of scaling. Now, one
• 8:49
  Speaker 3: of the things that I do want to highlight is
• 8:51
  Speaker 3: that there's two types of sharding or horizontal scaling. There's
• 8:56
  Speaker 3: synchronous and asynchronous, and that has to do with the
• 9:01
  Speaker 3: amount of composibility that you get between the shots. If
• 9:04
  Speaker 3: therem today has this weaker asynchronous mode of composibility, and
• 9:09
  Speaker 3: the reason is that each L two has a separate sequencer.
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  Speaker 3: And now the vision that I'm trying to advocate for
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  Speaker 3: is that the L twos starts sharing the sequencer so
• 9:21
  Speaker 3: that they can unlock this greater form of composibility called
• 9:24
  Speaker 3: synchronous composibility.
• 9:26
  Speaker 1: Yeah, and I think you look at dot obviously with
• 9:29
  Speaker 1: what they've been trying to do, sharting was one of
• 9:31
  Speaker 1: the things that they did not necessarily like. And then
• 9:33
  Speaker 1: you look at even Avalanche to a certain extent, you know,
• 9:37
  Speaker 1: what they've been able to do with their you know,
• 9:39
  Speaker 1: layer ones or their l ones subnets. This is intriguing
• 9:44
  Speaker 1: to me because we're continuing to watch the evolution of
• 9:46
  Speaker 1: where a lot of these blockchains in terms of strategy,
• 9:49
  Speaker 1: have been able to go forward. So I think it's
• 9:52
  Speaker 1: interesting with what you're doing, and if you look at
• 9:55
  Speaker 1: some of the things that people are complaining about, one
• 9:58
  Speaker 1: of the big ones is cost, okay, and that is
• 10:01
  Speaker 1: a factor I think in anytime you're building. Here's a
• 10:04
  Speaker 1: good example, this is Universal Page. They were leaving Base.
• 10:07
  Speaker 1: There were some reasons for this if you look down
• 10:09
  Speaker 1: in the article, and why they were kind of dealing
• 10:12
  Speaker 1: with this was because Base was doing a competitive smart wallet,
• 10:16
  Speaker 1: so that was kind of a little bit of conflict
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  Speaker 1: of and interest there, you know, within the Base ecosystem.
• 10:21
  Speaker 1: But I could see this being kind of a scenario
• 10:25
  Speaker 1: where some of these big chains are putting a lot
• 10:27
  Speaker 1: of pressure, you know, from a competitive standpoint of either
• 10:30
  Speaker 1: competing products, competing solutions, partnerships, et cetera. That could all
• 10:35
  Speaker 1: flow into that and really get us back into the
• 10:37
  Speaker 1: case of you know, being somewhat centralized here. So how
• 10:41
  Speaker 1: expensive is it going to be to launch on an
• 10:45
  Speaker 1: L one in the future and like just a regular business.
• 10:50
  Speaker 3: Right, So, as you said, there are costs to launching
• 10:53
  Speaker 3: on these L twos, like you are inheriting the security assumptions,
• 10:59
  Speaker 3: you're in inheriting the governance, you're inheriting potentially you know,
• 11:03
  Speaker 3: conflicts of interest, and really the best way to launch
• 11:06
  Speaker 3: is on L one directly, but then you have other costs,
• 11:09
  Speaker 3: which are transaction fee costs. Now it turns out that
• 11:12
  Speaker 3: there is a way to get the best of both worlds,
• 11:14
  Speaker 3: which is to launch as an app chain on top
• 11:17
  Speaker 3: of the L one. So you're launching as an L
• 11:20
  Speaker 3: two or roll up yourself so you make use of
• 11:24
  Speaker 3: the gas vo optimizations, but you're not building on top
• 11:28
  Speaker 3: of another L two. You are your own L two,
• 11:31
  Speaker 3: so you don't inherit all of the branding and tokenomics
• 11:34
  Speaker 3: of another project. Now, the problem with the app chain
• 11:37
  Speaker 3: thesis is that you are a silo right now if
• 11:40
  Speaker 3: you have your own individual sequencer, and so what you'd
• 11:44
  Speaker 3: want to do is launch as a based app chain,
• 11:47
  Speaker 3: for example, where you're sharing the sequencer with the L
• 11:50
  Speaker 3: one and with other based l twos so that you
• 11:53
  Speaker 3: still have the composability of FM L one.
• 11:58
  Speaker 1: So that's an interesting concept of going that direction, especially
• 12:01
  Speaker 1: when you look at just the amount of company projects, companies,
• 12:06
  Speaker 1: businesses that are going to be migrating to blockchain in
• 12:09
  Speaker 1: the future. We're starting to see a lot of Web
• 12:11
  Speaker 1: two conversion now for use case, and it's happening more
• 12:15
  Speaker 1: and more, whether it's retail, you know what we're seeing
• 12:18
  Speaker 1: in gaming obviously, I think loyalty is going to be
• 12:21
  Speaker 1: a big factor for a lot of business to start
• 12:23
  Speaker 1: to go onto the blockchain. With this, you've got L
• 12:25
  Speaker 1: two somewhat being fragmented here. Why would a developer not
• 12:30
  Speaker 1: just go ahead and select a polka dot or an
• 12:33
  Speaker 1: avalanche where you know, it's a completely different scenario there
• 12:37
  Speaker 1: versus what you're proposing, right.
• 12:41
  Speaker 3: So, one of the unique value propositions of the theorem
• 12:44
  Speaker 3: is number one, security, shared security, very very large amounts
• 12:48
  Speaker 3: of becoming security. We have roughly one hundred and thirty
• 12:51
  Speaker 3: billion dollars of economic security. Just as a point of comparison,
• 12:54
  Speaker 3: this is more than ten times bitcoins, so we have
• 12:59
  Speaker 3: extremely high rated security and we're basically selling this idea
• 13:03
  Speaker 3: that you can build money legos that are going to
• 13:05
  Speaker 3: last for decades and centuries. And then the second big
• 13:08
  Speaker 3: selling point is network effects around value that is on Etheroreum.
• 13:14
  Speaker 3: And right now there's about seven hundred billion dollars of
• 13:18
  Speaker 3: value that is being secured by Ethereum. And right now
• 13:22
  Speaker 3: you are right that we are seeing a fragmentation of
• 13:24
  Speaker 3: liquidity and network effects because of each L two being
• 13:27
  Speaker 3: its own silo. This can be fixed again with the
• 13:31
  Speaker 3: real time proving and the shared sequencing. The first one
• 13:35
  Speaker 3: is a pure technical problem. I think we're going to
• 13:37
  Speaker 3: have that solved by the end of next year. The
• 13:40
  Speaker 3: other one is an incentives and coordination problem, and I
• 13:43
  Speaker 3: think we are going to see individual clusters of L
• 13:47
  Speaker 3: two's first experiment with shared sequencing and then eventually have
• 13:51
  Speaker 3: the Theoreum wide chat sequencer.
• 13:53
  Speaker 1: All right, So okay, I get it, and I feel like,
• 13:57
  Speaker 1: you know, from a standpoint of infrastructure, with what we're
• 14:00
  Speaker 1: building with right now now, a lot of people you know,
• 14:02
  Speaker 1: maybe watching this right now. I want you guys to
• 14:04
  Speaker 1: think about this from a standpoint because we don't want
• 14:07
  Speaker 1: to get two technical of when really the Internet was
• 14:10
  Speaker 1: being built. If you look at it, that's exactly the
• 14:12
  Speaker 1: phase in which early blockchains are today, and that is
• 14:16
  Speaker 1: building the next Internet. So a lot of this next
• 14:18
  Speaker 1: technology is being modeled around how do.
• 14:21
  Speaker 2: You escale it? The best way to scale it?
• 14:23
  Speaker 1: You know, these kind of proposals are the ones that
• 14:25
  Speaker 1: are coming up. So I like the fact that that's
• 14:28
  Speaker 1: going now. One thing it does bring in all of
• 14:30
  Speaker 1: this is kind of a new function around staking, which
• 14:34
  Speaker 1: is very important because this is a strategy within blockchain.
• 14:37
  Speaker 1: You look at the changes of staking going down from
• 14:40
  Speaker 1: what used to be thirty two eighth now down to one.
• 14:44
  Speaker 1: I mean, if you really I mean if eth's value
• 14:47
  Speaker 1: is going to continue accelerate. I mean, now, let's say
• 14:49
  Speaker 1: EATH goes to ten thousand and the value of the
• 14:51
  Speaker 1: network continues to climb. A one ETH is still ten
• 14:55
  Speaker 1: thousand dollars to get one staked. So do you think
• 14:59
  Speaker 1: that has any you know, deterrence for people to possibly
• 15:04
  Speaker 1: get involved a little bit more.
• 15:07
  Speaker 2: So?
• 15:07
  Speaker 3: One of the really exciting research ideas that we have
• 15:10
  Speaker 3: recently is called rainbow staking, where there's actually different stakers
• 15:15
  Speaker 3: with different responsibilities. So you could imagine one type of staker,
• 15:20
  Speaker 3: which is an inclusionless staker, where they basically force include
• 15:25
  Speaker 3: transactions on etherorem if there were any censorship, And for
• 15:29
  Speaker 3: that we can have extremely low amounts of deposits to
• 15:33
  Speaker 3: become such a staker, such as zero point one or
• 15:35
  Speaker 3: even less. On the other hand, there's this notion of
• 15:42
  Speaker 3: staking to produce finality, and for that, what we need
• 15:45
  Speaker 3: to do is aggregate tens of thousands, potentially more of
• 15:50
  Speaker 3: signatures one signature per staker within a very small amount
• 15:54
  Speaker 3: of time within one slot, which is just a few seconds.
• 15:57
  Speaker 3: And here there's just some hard engineering and physic or constraints,
• 16:01
  Speaker 3: so we can't have too many consensus poscipants within any
• 16:04
  Speaker 3: any given slot, which is in contrast to the inclusion
• 16:09
  Speaker 3: list where you just need one person to be active
• 16:11
  Speaker 3: per slot.
• 16:12
  Speaker 1: Right right, Okay, So what about liquid staking? Is there
• 16:15
  Speaker 1: is then a threat to staking in general on something
• 16:19
  Speaker 1: like ethereum right now? I mean, you look at Defai Lama.
• 16:23
  Speaker 1: Here's a lighter right there. There's a good example. The
• 16:26
  Speaker 1: growth of just what we've seen within steak death over
• 16:30
  Speaker 1: time has continuing to climb. Do you feel like liquid
• 16:33
  Speaker 1: staking could be an immediate threat to ethereum.
• 16:38
  Speaker 3: So liquid staking is definitely not an immediate threat, but
• 16:41
  Speaker 3: it could be a long term threat. And let me
• 16:43
  Speaker 3: try and explain why. The reason is that the way
• 16:45
  Speaker 3: that the incentives are currently designed is for any rational
• 16:50
  Speaker 3: IF holder to eventually become an EF staker, and the
• 16:53
  Speaker 3: reason is that there will always be a positive yield
• 16:56
  Speaker 3: of about two percent to become a staker. And what
• 17:00
  Speaker 3: we should expect therefore is maybe the unit of account
• 17:04
  Speaker 3: on the firm to change from raw EF to something
• 17:08
  Speaker 3: like an STEF a lido EF. And by changing this
• 17:12
  Speaker 3: unit of account, we potentially jeopardize the moneyiness the monetary
• 17:16
  Speaker 3: premium of FID asset. And the reason is that we
• 17:19
  Speaker 3: go from a pristine collateral to something that has a
• 17:23
  Speaker 3: new brand, a new security assumption, governance risk, small contract risk.
• 17:28
  Speaker 3: And so one of the big research directions right now
• 17:31
  Speaker 3: is can we change the issuance curve to make sure
• 17:34
  Speaker 3: that there will be less than half of all EF staked.
• 17:39
  Speaker 3: And if we have less than all IF staked, it
• 17:41
  Speaker 3: means that at least half of it is raw and pristine,
• 17:45
  Speaker 3: and that is probably sufficient to keep the monetary premium of.
• 17:48
  Speaker 1: IF So okay, So you mentioned that you feel like
• 17:52
  Speaker 1: any you know, reasonable ethholder would be a staker in
• 17:55
  Speaker 1: the future. You're talking about still long term effect on
• 17:59
  Speaker 1: you know, what liquid states would do to eth in general.
• 18:02
  Speaker 1: If you flip over and take a look at what
• 18:04
  Speaker 1: Cardano has been able to do, this is direct access
• 18:08
  Speaker 1: native staking is going to be available.
• 18:10
  Speaker 2: Do you think that.
• 18:11
  Speaker 1: That in itself is and plus when you look at it,
• 18:14
  Speaker 1: there's no lock in. That's the other factor that I
• 18:16
  Speaker 1: think plays into this. Do you think that would be
• 18:18
  Speaker 1: something that Ethereum eventually would be able to do?
• 18:22
  Speaker 2: No lock in?
• 18:23
  Speaker 1: Obviously direct access to staking versus going through all the
• 18:26
  Speaker 1: hoops to go out and stake your eth.
• 18:30
  Speaker 2: Right.
• 18:30
  Speaker 3: So there's staking and there's there's staking. So on e Firum,
• 18:34
  Speaker 3: we've taken the hard path where we have slashable economic security.
• 18:39
  Speaker 3: What that means is that if there is a finality fault,
• 18:43
  Speaker 3: meaning there's two inconsistent checkpoints that get finalized, we have
• 18:47
  Speaker 3: this guarantee that at least one third of all if
• 18:50
  Speaker 3: steaked is going to get slashed. And so there's like
• 18:53
  Speaker 3: an actual dollar amount on attacking ethereum, and that dollar
• 18:57
  Speaker 3: amount is on the order of forty big dollars now
• 19:01
  Speaker 3: on a chain like Cardano, where they don't have slashing,
• 19:04
  Speaker 3: there is no such dollar amount. So in theory, an
• 19:07
  Speaker 3: attacker can go attack Cardano and get out scot free
• 19:11
  Speaker 3: without any penalty. And the problem is that if you're
• 19:14
  Speaker 3: securing tens of trillions or hundreds or trillions of dollars
• 19:17
  Speaker 3: on your chain, there is going to be a reward
• 19:20
  Speaker 3: for making the attack, And so we want to make
• 19:22
  Speaker 3: sure that at any given point in time the penalty
• 19:25
  Speaker 3: of doing the reward is much much greater than after
• 19:28
  Speaker 3: doing the attack is much much greater than the reward,
• 19:31
  Speaker 3: and unfortunately on Cardano, that's maybe not the case I see.
• 19:34
  Speaker 1: Okay, all right, well that would make a good argument. Okay,
• 19:37
  Speaker 1: so let's look at toconomics for a second. You look
• 19:40
  Speaker 1: at since the merge, we've been eat supply declining there
• 19:43
  Speaker 1: in terms of inflationary scenarios. But here recent obviously we've
• 19:47
  Speaker 1: seen from right there around April this year we've started
• 19:51
  Speaker 1: to see this increase. What is the potential right now
• 19:54
  Speaker 1: in terms of toconomics and also just I think in
• 19:58
  Speaker 1: general how people look at eth as an you know,
• 20:04
  Speaker 1: an asset that is quite a bit different than any
• 20:06
  Speaker 1: other asset out there on the market, specially if you
• 20:08
  Speaker 1: look at bigcoin. Is there a potential here for changing
• 20:12
  Speaker 1: up the tokenomics?
• 20:15
  Speaker 3: So I'd say the tokenomics today are already pretty good.
• 20:18
  Speaker 3: If you click on the little BTC button on that
• 20:22
  Speaker 3: website and so you see a bitcoin has inflated about
• 20:25
  Speaker 3: sixty billion dollars in the last two years, whereas there's
• 20:29
  Speaker 3: been virtually no issuance for e FI the asset. Now
• 20:36
  Speaker 3: there is room for improvement. What we have today is
• 20:39
  Speaker 3: not perfect. One possible improvement is, as I mentioned, to
• 20:43
  Speaker 3: try and change the issuance curved to limit the amount
• 20:46
  Speaker 3: of eve steake, and in doing so of will dramatically
• 20:49
  Speaker 3: reduce the amount of issuance, maybe by a factor of ten.
• 20:53
  Speaker 3: And then there's a second improvement that we're looking at,
• 20:55
  Speaker 3: which is called MeV burn, which is this idea that
• 21:00
  Speaker 3: all of the fees that come from MeTV, instead of
• 21:03
  Speaker 3: going to the stakers to the validators, would go to
• 21:06
  Speaker 3: e F holders, to e FA the assets, and the
• 21:08
  Speaker 3: same way that the congestion fees go to e FA
• 21:11
  Speaker 3: the asset.
• 21:11
  Speaker 1: Yeah, well that would change things quite a bit. And
• 21:14
  Speaker 1: I think you know, from a sense of investment, especially
• 21:17
  Speaker 1: when people are kind of comparing the two, and many
• 21:20
  Speaker 1: people look at it as the chain that is truly
• 21:24
  Speaker 1: maybe the next Internet, especially when you look at the
• 21:27
  Speaker 1: potential for the.
• 21:28
  Speaker 2: Commerce side of it. So I would agree with you there.
• 21:31
  Speaker 1: I want to get into a couple other questions, which
• 21:33
  Speaker 1: chain currently, in your opinion, has the best issuance to
• 21:37
  Speaker 1: look to.
• 21:40
  Speaker 3: So Bitcoin has an excellent issuance, narrative and meme around it. Unfortunately,
• 21:47
  Speaker 3: the issuance of bitcoin is not long term sustainable. As
• 21:50
  Speaker 3: soon as the issuance grows too small, the security of
• 21:53
  Speaker 3: the chain is jeopardized, and that jeopardizes the whole project,
• 21:56
  Speaker 3: including the token. So I'm long term barrier on Bitcoin
• 22:01
  Speaker 3: over a time span of a decade or two decades.
• 22:05
  Speaker 3: What you want is minimum viable issuance. You want the
• 22:09
  Speaker 3: smallest amount of issuance possible that still secures the chain.
• 22:14
  Speaker 3: And I believe that if you target, for example, half
• 22:19
  Speaker 3: of all Eve steaked, you're in a position where you
• 22:22
  Speaker 3: have a tremendous amount of ecoming security half of the
• 22:25
  Speaker 3: market cap of Eve. And at the same time, because
• 22:28
  Speaker 3: you have this competitive dynamic where the different stakers are
• 22:32
  Speaker 3: competing with each other to lower the issuance, you actually
• 22:35
  Speaker 3: end up with very very small issuance, maybe on the
• 22:38
  Speaker 3: order of a few tens of basis points. And if
• 22:40
  Speaker 3: we get to that point, the income for Ethereum from
• 22:44
  Speaker 3: the burn in the form of congestion fees or MeTV
• 22:47
  Speaker 3: will be dramatically larger than the issuance. And what will
• 22:51
  Speaker 3: happen there is that the supply would keep on decreasing
• 22:55
  Speaker 3: sustainably until it reaches some sort of equilibrium. And if
• 22:58
  Speaker 3: I were to make a guess that it, Librium would
• 23:00
  Speaker 3: be well under one hundred million eve.
• 23:03
  Speaker 1: All right, so let's let's flip over to memes for
• 23:05
  Speaker 1: a second. You look at the success of meme coins
• 23:08
  Speaker 1: within the Solana ecosystem, I would have to say that
• 23:12
  Speaker 1: memes are where and what have probably kept Solana very
• 23:16
  Speaker 1: relevant through this cycle and probably has attracted a lot
• 23:21
  Speaker 1: of depths just for the purpose that memes exist within
• 23:24
  Speaker 1: that ecosystem. Do you feel like you're underestimating the power
• 23:29
  Speaker 1: of memes, you know, within these blockchains, especially when you
• 23:33
  Speaker 1: look at ethereum, Well, I think.
• 23:37
  Speaker 3: There is a lot of power to just pure speculation,
• 23:40
  Speaker 3: and this is something that we have seen in Ethereum.
• 23:42
  Speaker 3: We've seen the ICO wave, We've seen the NFT wave,
• 23:45
  Speaker 3: We've seen the DeFi farming wave, and I think this
• 23:49
  Speaker 3: is just a realcarnation in a different form of this.
• 23:53
  Speaker 3: This this gambling, and you're right, there are definitely advantages
• 23:56
  Speaker 3: because it brings attention, it brings depths, but it's also
• 24:00
  Speaker 3: a two edged sword in the sense that you know,
• 24:02
  Speaker 3: easy come, easygo type of activity. And so what I'm
• 24:06
  Speaker 3: hoping the affirm community can do is move towards a
• 24:10
  Speaker 3: more sustainable direction where the innovation is real innovation, it's
• 24:14
  Speaker 3: sticky innovation because it provides real utility for the world.
• 24:18
  Speaker 3: And one metric I guess is stable coins. If you
• 24:21
  Speaker 3: look at Tevor, the stable coin, there's about seventy billion
• 24:27
  Speaker 3: dollars of it on Ethereum. There's less than a billion
• 24:31
  Speaker 3: dollars of it on Solana, So there's close to one
• 24:33
  Speaker 3: hundred x delta between the two, and I think this
• 24:37
  Speaker 3: is a reflection of the true utility that is provided
• 24:40
  Speaker 3: to the world.
• 24:42
  Speaker 1: All right, Well, I think the you know, the scenario
• 24:44
  Speaker 1: that plays around that still to me is drawing in
• 24:47
  Speaker 1: the developers. ETH has had a very large lead for
• 24:50
  Speaker 1: a long time. Let's just say it. You know, they're
• 24:53
  Speaker 1: the granddaddy. When you think about where devs are coming from,
• 24:58
  Speaker 1: the key here is are you winning the new devs
• 25:01
  Speaker 1: because the emerging devs who are building on you know,
• 25:05
  Speaker 1: you look at what Avalanche is doing with Retro nine thousand,
• 25:08
  Speaker 1: You look at Polka Dot of course, trying to accelerate
• 25:10
  Speaker 1: on transactions. You look at Solana of course, with you know,
• 25:14
  Speaker 1: kind of the meme ecosystem, but also some very interesting
• 25:17
  Speaker 1: deep in projects that's very attractive to developers. And at
• 25:21
  Speaker 1: some point you're going to have to continue to build
• 25:25
  Speaker 1: in the infrastructure for Ethereum just because of the behemoth
• 25:29
  Speaker 1: that it is. You're going to need to feed in
• 25:31
  Speaker 1: a lot more new devs. What do you feel like
• 25:34
  Speaker 1: your potential is there to continue to attract devs in
• 25:37
  Speaker 1: the future.
• 25:40
  Speaker 3: Yeah, that's a great question. And I have had feedback
• 25:42
  Speaker 3: from you know, some vcs telling me that they get
• 25:46
  Speaker 3: a lot of pictures from very smart people who are
• 25:49
  Speaker 3: young and thirsty, and you know, sometimes they choose the fair,
• 25:52
  Speaker 3: but also sometimes they choose Solana. Now, one of the
• 25:56
  Speaker 3: things that I want to highlight is that all of
• 25:58
  Speaker 3: the awkwardness and challenge is that if film has had
• 26:02
  Speaker 3: is because we are the most mature. You know, the
• 26:05
  Speaker 3: scalability issues that we have is because you know, we
• 26:09
  Speaker 3: are the first one to encounter them. What I expect
• 26:14
  Speaker 3: will happen is that Solana is going to encounter similar issues.
• 26:18
  Speaker 3: We're already seeing the fees on Solana. You know, Spike,
• 26:24
  Speaker 3: and you know they you know, they have a modest
• 26:26
  Speaker 3: four percent increase in the computer unit. You know, that
• 26:29
  Speaker 3: might provide some amount of relief, but ultimately they are
• 26:32
  Speaker 3: limited to this design where they put everything in one box.
• 26:37
  Speaker 3: And if you have a ten gigabitt inter connection and
• 26:39
  Speaker 3: each each transaction consumes a certain number of bytes, well
• 26:42
  Speaker 3: that puts a hard cap on the number of transactions
• 26:45
  Speaker 3: that can be processed through Solana. What I'm hoping we
• 26:48
  Speaker 3: can see on Etheroreum is this horizontal scalability that will
• 26:51
  Speaker 3: ultimately bring us to ten million transactions per second. And
• 26:56
  Speaker 3: this is something that could never happen on Solana with
• 26:58
  Speaker 3: the current design.
• 27:00
  Speaker 2: Yeah, okay, well it's working out.
• 27:01
  Speaker 1: Because I want to go back to the statement you
• 27:03
  Speaker 1: made about tether and the potential here for it, because
• 27:07
  Speaker 1: if you look at what's happening within the stable coin
• 27:10
  Speaker 1: market in general, U S d C the fees in
• 27:12
  Speaker 1: which Solana and Solana is very very present within a
• 27:17
  Speaker 1: U S d C ecosystem. You look at r L
• 27:20
  Speaker 1: us D getting ready to launch, why not go ahead?
• 27:22
  Speaker 1: You're shaking your head, no, so let me hear that.
• 27:25
  Speaker 3: I mean U S d C is very very little
• 27:28
  Speaker 3: on Solana. It's ten times less than ifere and you
• 27:31
  Speaker 3: have individually chains but very cheap potentially, but you know,
• 27:38
  Speaker 3: getting getting more expensive. I guess it's the point because
• 27:40
  Speaker 3: they're starting to hit a head the scalability bottomnecks that
• 27:43
  Speaker 3: are going to be much much harder to overcome. You
• 27:46
  Speaker 3: take an individual L two like Base, they have more
• 27:50
  Speaker 3: USDC than all of Sona not combined. Sure, and Base
• 27:53
  Speaker 3: is a one year old project. Sonana is a five
• 27:55
  Speaker 3: year old project, so it's it's.
• 27:58
  Speaker 1: Very you have to align that though when USDC it
• 28:03
  Speaker 1: was really not much of a stable coin when Solana
• 28:06
  Speaker 1: got launched, Base launched at the heat in the height
• 28:10
  Speaker 1: of USDC being becoming a global stable coin.
• 28:14
  Speaker 2: So I think that that was a narrative that worked well.
• 28:17
  Speaker 1: With Base because it was the obvious choice. So I
• 28:21
  Speaker 1: don't know that that would be a direct comparison because
• 28:23
  Speaker 1: Solana didn't have that they had to utilize tether in
• 28:26
  Speaker 1: the early stages of their development.
• 28:27
  Speaker 2: So wouldn't you agree or no?
• 28:31
  Speaker 3: I mean Sonana is two years ago absolutely terribly with tever.
• 28:35
  Speaker 3: It has less than a billion dollars of tever it
• 28:36
  Speaker 3: has eight hundred and sixty two million. I checked this morning, okay,
• 28:41
  Speaker 3: and what we're seeing is individual chains have way more
• 28:44
  Speaker 3: stable coins. So individual l twos have way more stable coins,
• 28:48
  Speaker 3: and the entirety of Sonana. So let's take Arbitram, they
• 28:51
  Speaker 3: have three and a half times more tever than again,
• 28:54
  Speaker 3: the entirety of Sonanta.
• 28:56
  Speaker 2: Interesting.
• 28:57
  Speaker 1: I like to hear these things because these are the
• 28:59
  Speaker 1: kind of Detai hills that you know, we don't want
• 29:01
  Speaker 1: to get a chance to see very often unless you're
• 29:03
  Speaker 1: diving into individually within some of these development projects out there.
• 29:07
  Speaker 1: One last point I wanted to make here or ask you,
• 29:10
  Speaker 1: when you look at micro strategy and what Michael Saylor
• 29:13
  Speaker 1: has been doing bitcoin, he has been almost in a position,
• 29:17
  Speaker 1: let me kind of zoom in on this tweet right here,
• 29:19
  Speaker 1: he's joining the Nasdaq one hundred now, So is it
• 29:22
  Speaker 1: a possibility all this is based on, you know, bitcoin
• 29:25
  Speaker 1: as a strategic reserve. With your statement of that your
• 29:29
  Speaker 1: bearish on bitcoin long term? Do you feel like in
• 29:32
  Speaker 1: the short term that someone like a micro Strategy who
• 29:35
  Speaker 1: continues to just buy up bitcoin could eventually possibly be
• 29:39
  Speaker 1: a top five, maybe even surpass Microsoft in terms of marketcap.
• 29:44
  Speaker 1: What's your thought on, you know, kind of how that
• 29:46
  Speaker 1: might transcend over the next few years.
• 29:51
  Speaker 3: Sure, so let's do a little bit of math. So
• 29:53
  Speaker 3: micro Strategy is about one hundred billion dollars. I believe
• 29:57
  Speaker 3: Microsoft is something like four trillion dollars. There's a forty
• 30:00
  Speaker 3: x melter. Now what I could see happening potentially is
• 30:04
  Speaker 3: bitcoin ten xing and becoming the size of gold. Now
• 30:10
  Speaker 3: you'd need a kind of an international four x on
• 30:12
  Speaker 3: top of that. In micro Strategy increasing its BTC holdings.
• 30:17
  Speaker 3: I believe they have something like two percent or close
• 30:21
  Speaker 3: to two percent of all the bitcoin circulations, so they
• 30:23
  Speaker 3: would need to bump that up to eight percent, more
• 30:25
  Speaker 3: than all of the bitcoin that even Satoshi has. I'm
• 30:29
  Speaker 3: going to say that this is extremely difficult to do,
• 30:33
  Speaker 3: especially that in the meantime, what will happen is that
• 30:36
  Speaker 3: more likely than not, the total market cap of Microsoft
• 30:40
  Speaker 3: is going to take an increase, and then to add
• 30:43
  Speaker 3: to all of this. You know, as the years go
• 30:46
  Speaker 3: by and every single happening happens, I think the community
• 30:49
  Speaker 3: will realize more and more that the bitcoin security is unsustainable.
• 30:54
  Speaker 3: And actually I publicly challenged Michael to a debate on
• 30:59
  Speaker 3: the sustain ability of bitcoin security, and so far he
• 31:02
  Speaker 3: has not responded.
• 31:04
  Speaker 1: Well, listen, we would be happy to host that, so, Sailor,
• 31:07
  Speaker 1: I know you're watching our show right now there it
• 31:09
  Speaker 1: is just willing to do it.
• 31:11
  Speaker 2: So and I think these are the.
• 31:12
  Speaker 1: Kind of questions that everybody's asking right now because we
• 31:15
  Speaker 1: really are talking about the future of finance, the future
• 31:18
  Speaker 1: of technology in terms of commerce, and really kind of
• 31:21
  Speaker 1: digital ID.
• 31:22
  Speaker 2: All of that is. We're really at the gates.
• 31:26
  Speaker 1: Of a new technology forefront. So it's definitely going to
• 31:28
  Speaker 1: be one interesting to watch. Hey, Justin, it's been great
• 31:31
  Speaker 1: having you on. Thank you so much for coming in today.
• 31:34
  Speaker 1: I love diving in on some of this. I know
• 31:36
  Speaker 1: some of you guys are probably saying this is way
• 31:37
  Speaker 1: too nerdy for us, Paul, but we like to get
• 31:40
  Speaker 1: these kind of details because this is an important side
• 31:44
  Speaker 1: of where many of these chains are developing. And if
• 31:46
  Speaker 1: you're investing in anything that's even the ethereum based whether
• 31:49
  Speaker 1: it's l ethereum itself or L two or really what
• 31:52
  Speaker 1: could be happening within this ecosystem. You need to pay
• 31:55
  Speaker 1: attention to the technology itself. So justin thanks again for
• 31:58
  Speaker 1: coming in today.
• 31:59
  Speaker 3: We appreciate it absolutely, thank you.
• 32:02
  Speaker 1: You bet all right, you guys, if you're not in
• 32:04
  Speaker 1: the Diamond Circle mixture and get in there right now.
• 32:06
  Speaker 1: It's a great place to get additional content from us.
• 32:08
  Speaker 1: We do additional podcast more research over there, and of
• 32:11
  Speaker 1: course you can follow me out there on x at
• 32:13
  Speaker 1: Paul Baron. We'll catch you next time right here on
• 32:15
  Speaker 1: tech Path than