DAPPCON 2025: Fireside Chat - Vitalik Buterin, Martin Koppelmann, Joe Lubin, Robin Hanson

Transcript

be on the sides. You guys are in the middle. Um, yes. All right. Yeah. Hey everyone. Cool. Let's directly jump into the discussion discussion. So, um, one of the first uh, well, the first EPCON was in uh, 2018. So, well, it's been a few years, seven years. And back then we already had a similar um panel and we were asking the question okay what who was on the panel?

Uh the two of you and I'm not sure who the who the not Robin some unnamed person I I need to look it up who who the first person was but but yeah so we were already asking back then the question what would um success uh would look like and also what could go wrong. So kind of what are uh yeah what what are the um potential um positive outcomes and also how how would they be measured? Um and maybe that's that's yeah my first question into the round is um if all the things we are well trying to build go right what would what measurement or what societal KPI would uh would would change

um and in what way and then of course we can connect it to has that already happened um and uh yeah uh so maybe yeah directly starting with that one with Joe. Sure. Um so uh metrics uh that would um indicate that we've succeeded um would be um um applications being used um lots of applications um being used by consumers and businesses. Um truly decentralized applications. uh we've got uh a giant internet and a giant web 2 out there. Uh

a lot of web 2 is pretty exploitative. Uh and so um uh Ethereum is now scalable horizontally and vertically. Uh it's quite usable. It's going to get very usable with AI in the interfaces. Uh it's affordable. Um and in most of the world it's now legal to um to use tokens to issue tokens um to participate in DeFi and that it's going to get increasingly legal. Uh it's going to get um legal to build applications and not worried that some regulator is going to come after you. Uh and so I I think the broadband moment is here and we're going to be able to move uh web 2

applications. um to their replacements on web 3 and it's going to be more um economically uh and politically empowering uh for people um because uh builders are going to be able to build of by and for the community rather than in an adversarial and exploitative relationship with the consumer. So giant population moves from web two to web three. M so so I I hear kind of of course adoption the second thing but but I think we do agree that adoption or that that's not the only thing we care about we want to and then then the second part was you say the relationships are are less exploitive

can we try to boil that down or or just measure that in some form right I mean I think like the one um sort of meta metric that I would use to like critique metrics is basically if what we as Ethereum had done is basically sold the rights to the Ethereum name to Sam Alman for $999 and then the project just shut down then uh like by that standard would Ethereum be extremely successful today right and you know obviously if you defined could have been right exactly we almost won yeah you know if you define the metric too naively then yeah you know there would have been totally lots and lots of lots of Ethereum users and you know we'd be talking about like Ethereum for

militaries or like whatever it is the AI people talk about, right? And uh obviously of course uh you know that says like we do have like specific outcomes in mind. Um and so I mean I'll I'll propose one um let's take averaging over um like r like all of the different pairs of countries. Um, how long would it take for the uh just either any person or potentially we could even say like a politically disfavored person uh to send a transaction from one country to another country. What delays do they

incur? What percent of that transaction do they lose? like basically measure uh to what extent we've uh reduced uh global um the inequities of global finance and uh I mean you know arguably yeah you could even say there have been some successes at least if you take a sort of I mean like post hawk or go proper hawk bias and you look at like hey look at what PayPal fees were like in 2013 and like look at what both crypto and non-crypto is like now uh but and then you know I could do a similar across other categories of application.

So I don't think that would cover everything but that's like Mhm. Let me give you three metrics. The internal one is uh investment relative to customer revenue. For a long time we've had a lot more investment than customer revenue. That has to change to become a stable industry. So we hope to see customer revenue go way up to match investment. Uh second is prices. One of the things you might hope is you're going to reduce the prices as you just said on some key services people have in the world and we will see the effect of crypto as this was the era that made the transition between high prices and low prices for some key financial services in the world. But the third metric I would most hope on is there's some new things that we're going to generate new

products new features new things you can do that didn't exist before crypto and people look back and say that was the era where they started to make things. Crypto is really inventive and innovative compared to many other industries. And that's my biggest hope for crypto is that we will invent stuff that lasts. And this will be the era people remember of invention. We've invented lots of stuff. But um do you feel like um the roughly 10 years of uh of the speculative phase in our ecosystem um were necessary and reasonable. uh and uh we're now, you know, uh all those things that I mentioned, we're approaching our broadband moment where

we can have people build things that are actually useful. Um that will garner revenues. Um we'll still have a lot of investment and a lot of speculation, but uh I I think we needed uh all of that crazy investment and speculation in order to build layers and layers of enabling infrastructure. It's hard to move a society uh from top down command and control to to bottom up decentralized trust. I remember I think 10 years ago in Hong Kong I took Vitalic to task and I said look you guys are doing way too much tools and platforms.

you need to like have end customer app, you know, revenue. And he, of course, the whole field ignored that. And it spends all this time on platforms and tools. And I sure hope you're right that we needed to do that. And we finally done enough and we're finally going to like use it all. But I'm worried a bit because this habit of tools and platforms is pretty strong. So, somebody needs to get in the habit of end customer revenue or Yeah, the whole field didn't ignore that or or maybe they did if you don't consider Binance um to be part of our our industry. So, so there are lots there were lots of people that that went straight to product and revenue. Um, and if that was all that we did, then we wouldn't have a chance of of decentralizing the world.

Right? I mean, the finance bro take on this is that that was a consequence of, you know, the zero interest rate policy era, right? footage is that you know when uh basically investments were encouraged to do something that looks on the surface like caring about the long term but actually that's very hard in practice and so they cared about proxies which were basically impressing the next fool who also thinks they care about the long term and uh you know now we're in a very different environment so you know this is one of the hypotheses that I see people uh talking about which might uh like force more near-term focus on its Mhm.

I I I think the discussion is related to um yeah to to to some question. We we were jokingly discussing at some point whether Ethereum is more like a tech startup or more like a yeah religion or ideology. Um so it it it seems that um yeah that that kind of the to some extent economic rules are different in crypto. I I I guess um of course there's Bitcoin as the So I'm an economist, economics professor, and our standard textbooks make these nice distinctions.

Well, there's for-profit firms and then there's nonprofit charities or clubs. And crypto just doesn't fit those categories very well, which is striking. There was this remarkable synergy of capitalism, greed, idealism, and aspirations that has made this work. And if we can finally make it pay off, it'll be a triumph of that sort of thing in the future, I guess. But it it throws out the usual categories. People often don't think you can combine greedy, even rapacious capitalism with idealism and producing grand new things that achieve community ideals and not necessarily personal ideals, but yeah. So if if Ethereum was a tech startup, it would

have failed. Um if you know we talked to VCs early on and and we decided to go in a more decentralized direction. Uh Ethereum was um a vision and valuesdriven project. Uh and um because of its crazy um halfhazard uh self- selected nature uh where anybody could select to be in the community and every everybody could select to uh to be an early contributor on the project. uh uh it was complicated but uh it it set a certain kind of ethos. Uh and so I would call uh Ethereum a new kind of thing. I would call it a a tech ecosystem startup. Uh and ecosystems have their

own culture and you know religions are everywhere and so it's absolutely a religion as well as uh a new kind of thing. I mean keep going. Okay. Okay. So, yeah. No, no, no, no. So, um what what certainly allowed that whatever it is, it it allowed uh permissionless innovation. Um and we saw that uh with all the layer 2s and kind of lots of um yeah well again platform building uh um and and and tooling um being built and in a way I think that was a positive

um but I would say um and and I think it it seems to be happening more and more that that there is um yeah there there is this innovation and then there's innovation around those and so on but uh the question is will it will it will it uh wait I think it's not a secret but that there is a question of of fragmentation and will there be or are there forces that that bring things uh together again and um yeah and of course is is is there risk what what's the risk of uh yeah failing against ecosystems that are more coordinated I guess it's a real risk. Yeah, the ris

the risk exists. Um I think uh this is uh definitely one of those situations where I think uh part of it just is that uh you know we have to invent the solution as we go. Um and uh because you know Ethereum is a a very unique type of uh structure and ecosystem and a very unique mix of uh like goals and uh incentives that are aligned in some cases and not aligned in some cases. Um I think uh I mean in terms of like we can you know like list uh like strategies for trying to solve things like I mean if even uh if we define the problem as being like standardization

but that's only you know one of the ways of thinking about it like basically yeah the way that I usually enumerate the strategies are basically you know like one is uh of course you know virtue signaling which is basically you know you have a culture where like going along with some either standards or principles is valorized. Um and this is uh something that like gives you better standing in a community. Um and like I think every community everywhere relies on a non-zero extent of that but it's also very possible to overindex on it.

Uh then two um is uh some organizations which could be the Ethereum Foundation or potentially it could be other groups like you could even have uh like two sectors like basically doing this against each other. like what the tech world calls commoditized a compliment. Basically like something like the Ethereum Foundation could write the software that makes uh you know the right way of doing things like closer to zero cost because the software already exists. Um then uh a third option is uh just transparency right so to the extent that uh you know people agree yeah at least abstractly that uh something is uh

the right goal uh then like make it more more transparent I mean like what strategies and uh like what projects are actually yeah doing what things toward that and I mean right now the Ethereum ecosystem has uh used some mix of all three I mean I I like I actually think that the the second strategy that I mentioned is probably one of the more undervalued ones and so like within the foundation we've been uh like exploring the idea of uh of doing more in that regard um like actually yeah building more um software software packages that uh could be like built like that that actually touch things at the user or

like somewhat closer to the user layer that uh reduce the uh the development effort of uh like following some standards uh potentially like following along with some like shared security goals or other or other kinds of goals but I don't think it has a single solution. So every time I buy a new toothbrush it has a different charging charging mechanism. So I uh yeah I mean I made a point of EU trying to solve that but yeah yeah that one is interesting because I I did make a point of like finding the few toothbrushes that charge with USBC and uh it uh it definitely is tricky. Um, I

mean it's uh well the thing that probably made it uh more easier recently is uh I mean actually uh I mean AI has made it easier because it's like basically like as a more powerful search engine, right? And I could say like tell me the USBC compatible versions of a thing and like you could do this before with search but uh the AI based tools make it one step easier. So arguably you could say that this is a for a form of transparency. Yeah. So uh I think there is a a chance that Ethereum is replaced as the world computer the the decentralized

infrastructure uh on which nation states and major corporations and um other sube ecosystems are built. Uh, but I think the chances of anything displacing Ethereum at this point are minuscule. Um, there's nothing out there that that could replace Ethereum. Everything out there other than Bitcoin and Ethereum. Um, uh, looks kind of like a company. Um, Bitcoin and Ethereum are the only two uh, credibly neutral and and decentralized platforms out there. Uh so I I would argue that uh uh rollup centric roadmap uh makes a ton of sense.

We've been in this divergent phase. We're now in a convergent phase where where we are going to figure out how to make uh everything uh synchronously composable or near synchronously composable. Uh and anyway people are going to be building applications with SDKs and and wallets and with AI agents speaking to different blockchains. And so um people are just going to be using applications and some of the backends will be on different networks. Uh so um I would argue that a year from now it's going to be very clear. Um so so many institutions are coming to us uh and wanting to to build on Ethereum to build on layer 2s or build on on layer 1. A lot of that's about stable coins and

real world assets but uh the applications are going to be coming. So, a year from now, I think it's going to be very clear that uh while there are going to be some um some cool layer ones um and uh some cool layer twos and some layer 3es um but really Ethereum is going to be the major decentralized protocol substrate. Um it's going to be um uh ether is going to be seen as a trust commodity. Um and it from that it'll get its monetary premium.

M so one way to frame the question is what's the consumer demand for the credibbe neutral decentralized part of these products because other people can offer similar products that lack those features and plausibly they can they're more nimble they can more organize marketing campaigns maybe they have cheaper technology you know there's the fear that they could displace because most customers don't actually care that much about the decentralized credibly neutral part until there's a big crisis perhaps which would then make the big lesson for everyone. So then three different scenarios. One is no big crisis and then people just drift to the other thing and they lose the key thing you treasure.

Another scenario is there's a crisis of some sort whereby everybody sees the virtue of decentralized credibly neutral because of the terrible disaster that happens with the alternative. And a related crisis would be a crash, a market crash because we've had many of those over the last century where tech rose and inspired a lot of high prices and then a crash. And then in a crash, some of these for-profit competitors might be swept away, but the community-based ideological group might persist longer and stronger because they have other reasons to go forward. Yeah. Yeah. So I I would argue based on um who we talk to in the traditional economy uh that high-valued assets and highvalued applications and protocols are are going

to be attracted to a network like Ethereum layer 1 um because it hasn't gone down in about a decade and um it's pretty clear that uh the best and the brightest uh uh are continuing to build it. uh we struggle with each other all the time uh fighting things out to to build know the next evolution of the protocol. Um but uh um in terms of uh guarantees like credible neutrality um and that it's going to be working every day for the next 10 years. Um uh those are tough to beat if you're a financial institution at least. I guess uptime is a metric. Yeah. So, Robin, I I mean, I

know we're here because we all really appreciate you as an Ethereum co-founder, but I want to like ask about a totally different a totally different judge topic, which is prediction markets. Uh, so I mean this has been, you know, a big a big part of Ethereum war um basically since the beginning, right? And uh you know there was Augur at the beginning and then uh even outside of Ethereum you know Truthcoin and uh Paul Stoz's work and then since then uh Poly Market and like wait there was another project what was it called?

Do you remember what was it called again? Right. Omen. Yeah. Um indeed. Um Omen is great. Um so I I guess I'm I'm curious compared to your um expectations of this uh space back then like how do you feel about the impact that uh prediction markets have uh made since uh I guess you know the idea and our attempts to make it happen have started. So the audience might not know that there was a burst of interest in prediction markets in the as many companies explored and tried and many firms were pursuing it and then that interest faded and there was a long a

period of disinterest and low activity and then crypto because of the CFTC or the faded because of just lack of business interest that is I mean there were some things CFTC messed with but basically most executives are shy about implementing prediction markets so they hadn't been implemented well enough not enough marketing whatever but like product failed temporarily and then crypto people started seeing as the sort of thing about users not using our technology right no it's the issue right yes exactly can you make something users want yes uh but then crypto people saw this as a one of the key applications that they could ma imagine selling uh through a decentralized neutral platform and so

that was part of the initial appeal for many early crypto projects uh and platforms and then they took a long time to actually get much user revenue traction but that's okay for crypto apparently it's a it's all right to have a long lead in but then in the last few years we've got this burst with poly market and that's great to see and that will certainly lower costs because the more you know you pay for an infrastructure the more you can make lower cost other things and so I'm of course most excited that these lowering costs will allow us to expand into other markets that is, you know, we've had betting markets for a long time at a modest cost and lowering the cost of betting markets does increase the demand for them, but the elasticity of demand

isn't that high. There's a limited demand, I think, for just speculators betting on things. Uh there's, you know, lower price will increase it, but I'm envious for or eager for this vastly larger market out there that eventually we could tap of people who need to make decisions, who want advice, and there's huge value there, but that's harder to tap. That's what people were trying to tap in the odds and that's that's a harder nut. So to what extent would you say poly market is on the level of being entertainment or already being used to how how yeah how close is it to being used? For many technologies you can sell them to different customers for different purpose even the technology isn't different. So betting markets is basically the same as insurance.

Insurance is one market. Then there are just speculative entertainment. People just want to bet for fun and get the action. That's another market. But there's this third market of people who want to know things and that's in principle a huge market and I hopefully crypto can help us penetrate that but it'll require more than just lowering the cost on say poly market like tech it requires a lot of business in innovation that is you have to try it out in businesses figure out different ways to do it different ways to pitch it collect track records and then finally get success and that's what I'm hoping for but we're definitely not there yet yeah so prediction markets need users liquidity um lots of different propositions for for different prediction markets. You've been doing some work on um on enabling

prediction markets to be stood up and monitored by AI. You want to talk about that a little? Yeah, I mean it yeah we do we we well we we're always interested in this information um well using uh prediction markets to make decisions and and for that it is important that those who pay for this information that a reasonable cost and it seems like AI could be u um a participant who or AI agent could be a participant that can deliver information at reasonable cost and the prediction market can be a good mechanism to aggregate all the information that all

the different AI systems um uh can produce. Yeah. Right. That's focused on the supply. I would say the limiting factor is more in the demand side. You have to convince the customers a form of the product that they can find acceptable because the usual default forms look unless a bunch of agents uh um if you can get the agents to buy. Sure. Exactly. they they might be demanding it as well. Yeah, they're not well funded. The one one larger uh other topic complex last topic complex is um money and um future of of of of money. So obviously kind of well again Bitcoin um maybe raised that question and I think

we are uh seeing now um yeah big institutions at least having that form of discussion. So uh yeah I guess my question is how will will money look different in the next um 10 uh 10 to 20 years and what's your I' I'd say that um crypto has had this sort of fluctuating attitude toward government and regulation. Initially the pitch was we can ignore government cuz we're on the chain and they can't stop us. And then we transitioned to most firms saying, "Oh, we're following all the rules. We're completely compliant.

Don't worry about us." But you know, the energy of making new money is somewhat of a governmentdefying energy. people are somewhat like the governments have run in money for a long time, right? They've controlled money and their national prestige is tied around their money and so to have a non-government money is somewhat of a threat to government prestige but that energizes a lot of Christian people feel. Yeah, let's take them down like you know revolution but then people shy from the revolution when it comes to actually so Ethereum was they go from the revolution to the revolving door. Yeah, true. So, Ethereum um may have had a few crypto anarchists um in its midst, but it was much less crypto anarchists than than Bitcoin um because it was people

trying to build a a platform for more crypto anarchist bitco um now we are. Okay. So, that that is interesting. And so to I have two answers to your question. one is a near-term answer um which is relevant to what you just said and then one is a a much different longer term answer. The near-term answer is that um the world is cracking up. We're at the end of a a debt and generational super cycle stress and how super cycle um uh we are smashing up against the wall. There's too much debt in the system. Uh it is clear to the world uh that the United States is going to reformat trade relationships,

military relationships. Um the US is paying 25% of its budget uh uh in interest um more than its military budget. Um and the US wants to maintain primacy in the world politically. Um want to maintain the US dollar uh as um the main reserve currency. Uh and the way it seems to want to do that is um because uh American politicians have have made it clear that austerity is unamerican.

So they're they're not going to to be able to pull back on spending. Uh so um Scott Bessant, uh Treasury Secretary has pivoted and said, uh okay, we're going to grow our way out of this mess. um and legislators are making rules, stable coin rules, market structure rules, um to enable the US to start using our rails and and so um over the next 10 years uh there's going to be a race to keep the US dollar strong uh via stable coins. So our ecosystem is going to be lending money to the US. Um and what seems to be going on is projects like Michael Sailor Strategy and Canard

Fitzgerald and Tether are doing this 21 project. Uh our company is doing a project called uh ESBET um or um Sharlink Gaming. Uh where we're they're accumulating Bitcoin, we're accumulating Ether. uh and I think what money looks like in the next 10 years or longer uh is uh some sort of thing that looks like a US dollar uh is digitized is sitting on high-powered money like ether and bitcoin uh and probably gold if you're holding the metal and silver if you're holding the metal it can be tokenized and so I think there's a race right now uh to build giant pools of high-powered money um in the more distant

decentralized future. I think the nature of money um qualitatively changes where um it's going to look more like barter. Uh when we tokenize all the things you can you can just trade tokens back and forth. If uh if I want to uh buy something from Martin, uh I will uh have a list of tokens I want to get rid of. he'll have a list of tokens he wants to accept and uh and the machines will will do the uh the foreign exchange calculations. So I think money kind of goes away and the machines take care of it. One one uh brief question I wanted to ask. So with ESB you sometimes uh recently get compared to wanting to be the Michael Sailor of Ethereum. Now,

Michael Sailor has stated this opinion that he believes that uh self-custody is something that they should not be striving for and self and people shouldn't generally hold their money in their bitcoins in banks and self custody is for criminals. And so, Mr. Sailor of ETH, what is your opinion on self self-custody? Well, well, we we publish a wallet called MetaMask. Um, so I obviously I'm a decentralization maximalist. Um, and I think it's embarrassing uh that uh I I have a lot of respect for Michael Sailor. I think he's doing some uh impressive things. Uh, but I think it's super toxic uh to suggest that uh uh

that Bitcoin should be custodied. Um I think people are believing that uh including people uh in the upper echelons of governments are believing that Bitcoin should mostly be sitting in centralized custodians and that way it'll be able to participate in in some uh bastardized form of DeFi. Um and so I am worried uh that there will be a barbell emerging uh where we've got uh Bitcoin on the one hand and maybe nation states get behind something centralized like Salana on the other hand and uh and then we've got uh uh a continued war of decentralization versus centralization

on our hands. Cool. I see the time is over. Do we have time for a couple of questions? First of all, let's thank Ben. [Applause] We unfortunately just have time for one short question. We have quite a bit over time. So questions, questions, one question there. All right. Thank you so much. Uh based on the last topic that you guys talked about about the money topic, what do you guys think about universal basic income as an idea? What are your thoughts about

circles that Martin is building? Uh so I I I didn't Yeah, I didn't plan. So So I think the circle system is an incredibly cool project. Um and I think it is an interesting potential future uh of money. Um I also I like the idea of universal basic opportunity uh where uh you're not giving everybody a bunch of capital to spend but you're giving everybody opportunity. I think AI is going to make that much easier to implement. Uh and so uh everybody should be able to uh put some effort in uh get supported in putting that effort in and

and create something that they care about. I'd say it's an example of crypto being very innovative and creative. Like it's a fountain of these interesting ideas that people I like to see experiments with. I'm not so sold on that experiment, but I don't need to be sold on each experiment to want them to be tried. I want it to be tried. Yeah. I mean I'm also excited about circles for a non-m money related reason which is that I think uh like some kind of online um identity is uh going to become a very important thing to have and uh we have plenty of projects uh doing rappers of like passports and government ID and we have worldcoin and uh like those two are

both becoming quite successful. world coin is over 10 million users. But you know there are definitely elements of centralization in at least the consequences of I think designs that have like singular um identities and I'm in to me circles can be a powerful way of just encourage like experimenting with and even using the money aspect to help battle test a form of identity where the issuance mechanism is more decentralized and more uh like social graph driven and and I think this is like a third corner of the identity triangle that really deserves to be properly explored on.

Cool. Thank you.