Debating Ethereum’s Big Decision | Roundup

Transcript

we've been really in ethereum land myopically focused on the hardware requirements for the validators and so we just keep unbundling things that validators have historically done and saying hey we can have our cake and E of two we're still decentralized look at how many validators we have look at how low the hardware requirements are but then we just keep giving more and more things to relays and Builders hey yeah this network is super decentralized we've got hundreds of thousands of validators but we've got three builders that build all the blocks right like at some point that has to be a factor this episode is brought to you by say say's V2 upgrade introduces the first high performance parallelized evm already live on public devet M net comes later in Q2 you can follow along with the say Journey on X say Network say is spelled

s eii go follow say onx say Network hey everyone Santi and I have been talking about salana a lot recently and we're excited to have a salana sponsor of Empire marinade marinade is a staking protocol on salana and the only Stak pool that delivers Auto rebalancing me rewards and automatic downside protection with their new protected staking rewards optimize your sole stake with marinade by hitting the link in the show notes big thanks to marinade we'll talk more about them later in the show hey everyone the polygon Community grants program was launched with 1 billion tokens All For polygon Builders really excited to share that on today's episode of Empire season 1 of the

polygon Community grants program is now live it features 35 million in mtic to support the next generation of polygon projects join the aggregated future today by applying at polygon.com and governed by mantle mantle reakes 100,000 me to generate massive I layer points every day basically your chance at being part of the igen that will be given out to me holders on mantel L2 you can check it out me that's

m.m manle doxyz campaigns that's a mouthful we'll put a link in the show notes for you to check out and learn more big thanks to mant all right what's up everyone we are back with the Roundup we got a whole Squad today uh the Youtube comments clearly are not enjoying STI and me so we brought on Mark new research analyst at blockworks research came over from coin shares and then um founder number two my lesser half Mr michaelo yeah I'm actually Jason and I actually played a game of ping pong for the rights to founder number one and uh your boy's founder number one so very the only I didn't know the only sport

Mike is good at is happens to be pingpong guy was JV his senior year yeah well none of you guys are good at weightlifting unlike me but yeah sure San has the lifting been [ __ ] cranking great more creatine less lifting but yeah I just came back from a 5 hour bike ride and I'm absolutely cooked so I'll let you guys talk while I uh figure Mark like I thought we were talking about some intellectual conversation no we never do we never do by the way I mean none of this is legal or intellectual discussion as people already know so if you're listening then you probably are gonna be dumbed down in this conversation yeah so we got to start with the YouTube comments zero zerox Alex said uh Yano looks like he's about to launch a vampire attack on

Santi so that was not super kind I don't know if they're commenting on my I don't even know what that actually means I don't even want to explore it or entertain it but please elaborate sir Santi gonna blow a disc in his back trying to show his show his dog when he should have Jason match his runtime oh yeah no I'm not going to do that yeah these are we got some kind comments we got some oh I guess you you got to get a better mic Santi yeah that's it is this is this better testing that's better go the mic all right Mark how you I think they were I think they were calling you pale y know I think that's the yeah yeah lowy I didn't want to say that but yeah that's

what I was thinking not from not from how it looks from the comment Mark I'm glad you already feel comfortable enough at block works I'm glad that you're hope glad you're enjoying it Mar Marcus this is your first and last appearance at Empire you will lose all access to email upon recording Mark's like got kicked off of slack that's weird my slack just got shut down oh with it uh Santi I saw you just uh invested in mega eth mega eth uh just had their announced their fundraise it seems like eth but fast chain eth uh what what is tell us about why Mega e is like so

freaking hyped in the last couple of months uh look I was talking to teams that are very opinionated in the first like five minutes of a conversation with these guys they were like we want to push the limits we're going to run a centralized sequencer and run it hard so we can get the most performance out of the evm I'm like great and so you either like that or you don't but the fact that they're very opinionated about that I like um and it's something that I've been thinking about like also had a conversation with like Logan and shout out to the frictionless guys he's he's obviously very bullish on salana like next gen High through but chains and he's like we were talking about like if you were to re architect or do something with the evm like how would you do it

and he was describing this I'm like you're basically describing Mega eth and he's like oh interesting and so then he went out and talked to them and um so that's how I see it um and it's a great team they're cooking hard I went out to Berlin to meet their batch of like first uh um set of first cohort of projects that are building on top of Mega um I would invest in like I think there were eight teams I would invest in like seven out of the eight like yeah super impressive so um yeah quite excited Mike we're gonna have we're gonna have him on the Pod so uh people can learn more about it in the next

couple weeks yeah Mike what do you think of the Mega eth um I like Mega eth because it just makes a lot of sense to me from like the trade-off that ethereum made is we're going to have a you know pretty slow relatively non-performing uh main chain uh but we're going to push a bunch of people up to rollups and I think that ethereum Canon should um basically push the limits up there right like that's the whole point of of rollups so yeah I really like it's it's sort of a I think it the other reason I kind of like it is it it's accelerating to the end game of where rollups are going like rollups are competing on cost and Speed and Performance and all the stuff that Mega eth is leaning into super hard so it's kind of like remember how retail

brokerages were you know it used to cost you know $50 to make a trade and then everyone kind of just slowly undercut each other by a couple bucks until Robin Hood just said zero fees screw it everyone trades for free it feels like that's what Mega eth has kind of done and they're just skipping to the inevitable conclusion of how rollups are gonna design themselves so I don't know the team personally but I like it from a strategy standpoint yeah feels like that's a good lead in actually for this first conference so I wanted to talk about a few things um one is salana blinks two is um like there's actually a lot of movement on ETFs this week There's Salon ETFs and eth ETFs but actually this first place to start and the reason I want to bring Mark and Mike on the show is um around what Mike was

saying about like the endgame of rollups and like it feels like the kind of conversation around eth is changing and there are these decisions that eth made that are different than the core decisions that salana made like it does feel like the eth camp might be re-evaluating that and there was actually a Charlie noise tweet that I'm going to use to kind of kick off this conversation so just to read this uh so Charlie is one of the founders of Paradigm um he said B he said here's what I basically think we should do uh one make L1 make the L1 more hospitable for apps two Max da or I can break this down Max EB to drop validator count tons raise the gas limit substantially three cut block time so that's under make L1 more hospitable for apps number two Max da so breakdown of this is fix the blob

pricing and gossiping scale the blobs perer Das ASAP and three is stabilize me um and the second tweet onto this was actually maybe the more important one which he said this means recognizing that solo staking is not sustainable timing games aren't a big or urgent problem the dominant form of me is lvr which is sublinear in Block time so cutting block times will actually make the situation better and deprioritizing other stuff so the reason this is such an interesting tweet from Charlie is what he's talking about are a lot of the he's saying eth should go in the direction of I think that that some of the decisions that someone like a salana maybe has made or some of the other uh I think Logan from that Santi called out from friction was call the high

throughput chains have made these decisions so Mike let me tee you up for this conversation you've been pretty active in the blockworks research subscriber chat like why is this so why is this such an interesting tweet from Charlie here um yeah I can I can I guess get go at a high level and then Mark or Sante would love to get maybe a more in the weed take from either of you guys but I think the zooming out there are the scaling uh problem in blockchains there's only really two big uh Frameworks for how to approach that which is to layer it and say okay we're going to keep the computers and the bandwidth requirements on like e main chain static and we're going to move a bunch of the computation up to another

layer or you just the boxes bigger on your main chain and like those are the two different routes that ethereum and salana have gone and so there are frankly challenges with both of those um with both of those approaches the ethereum approach to salana has always been well when are you g to stop making the boxes bigger how big is too big at one point are you participa or preventing people from participating in consensus Etc and that's the I think pretty valid knock on salana but I think there's been um this you can have your cake and eat it too approach in ethereum which is not actually accurate and a huge part of that has been the PBS design philosophy and the PBS design philosophy basically

says Hey in consensus we're going to recognize that there's a lot of work that goes into consensus and it's okay to have specialized parties uh participate so historically the proposer would do everything and we've been just unbundling the roles that the proposer does and we've been giving them to builders now the challenge as eth's road map has gotten more complex and as we're trying to to uh actually ask the L1 to do more again which is the pre-com part of the story is that the Builder centralization part of the story is becoming more and more of a problem and there is a trade-off there and so I I think maybe where this is coming to AE I don't want to speak too much from Paradigm or or Charlie standpoint here is that we're saying hey there's

actually some issues with the eth uh scaling road map today there are some real technical problems like interop but also we're centralizing Builders uh to a real extent and maybe if we want to solve the interop challenge we can actually make some improvements to eth main chain and make some pragmatic changes instead of like pre-ms which are extremely complicated um have a lot of negative externalities and are going to take a long time to implement so you know paradigm's been super deep in like ethereum infra builds for a long time and they're kind of invalidating a lot of the Sacred cows or like speaking against some of the Sacred cows I think that the ethereum communities had so it's just interesting to hear them come out and comment like that but yeah Mark

what do you think about Paradigm talking about some of these sacred sacred cows that Mike mentioned yes so I mean I I don't know if it's more like let's move more towards High through pit and abandon the existing road map I think it's more like let's prior like shift our priorities because I mean right now a lot of the people you know I don't like having to use ethereum at 2 amm just to get the lowest transactions if I want to do something right that's that's not fun and I think it's it's really about like reprioritizing the ux just like kind of borrowing from Solana so I think like Solana's actually been really good as for competition for eth like it's the first real alt L1 that I I wouldn't even call it an ALT L1 anymore and I think a lot of the people in the

community are are kind of getting fed up of these deep research long-term goals that are deemed as very high and sacred and need to come first before everything above ux so I kind of agree with um with most of uh of that tweet um but there there are some aspects of it I have mixed feelings or might not agree with at all um but then I still do agree with ethereum's you know how how you broke down the two scaling paths I still do agree with ethereum's vision because I mean the only kind of analogous example I have is the current Internet and that is not all on one layer and that is not you know fully synchronous and doesn't

work like that and yet it's one of the if not the best thing that we've created and and nobody's nobody's having an issue with you know like 200 millisecond response times when you buy something on Amazon so I I I I think it's I think if you're really bullish on crypto um in general you can't imagine that one chain can handle it all Santi agreed or disagree I don't like making analogies to the internet because if you're going to do it then just just stick to the internet you know um uh so like I I appreciate analogies are really good to like I

don't know get people to understand things but we're building something fundamentally different and so I don't know I I still agree in a multi-chain world uh but um yeah that's just the caveat um I don't I don't have a particular opinion on on it's interesting to see Paradigm like tweet about this obviously they've been more ethereum focused and Centric um but let me ask you a question Mike or Mark even if you were to like Implement a lot of these changes uh on the margin like how competitive do you think it is to something that is just built from scratch because like a lot of the discussions that we've had here in the pot is like integrated versus modular that's like one set of debates and the

other one is if italic were to re like build ethereum today from scratch he would do a lot of decision that you you can't do like these are like marginal improvements but there are more fundamental like paration that like you're just not going to get so I'm curious like even if you were to implement the the things that you agree with here the most one what are the things that have the most amount of impact and two what does it actually mean for the end user because that's I think the most important thing or or the developer that is like deciding whether to build on ethereum or just uh go somewhere else um yeah it's a really good it's a really good question I think there are I think one of the challenges about this debate is that there are multiple debates and issues that are getting

conflated in into one here um and I think to maybe a respond to actually something that Mark said and and to respond to you also Santi is I think there has recently been sort of a change in the zeist of what people want to talk about in crypto um and I think people are frustrated with solutions that feel kind of rubbe Goldberg or very complicated or have very long timelines um when there are simpler solutions that are available like what do users really want at the end of the day they want transactions that are fast and cheap and there's been an enormous amount of effort um to maintain the decentralization properties of ethereum

while delivering that to users that is the rollup scaling road map um but yeah I think I'm just on record saying this but like I'm kind of a hater of pre-ms for this reason because I don't think to your point Santi like I don't think users care about that I don't think users I don't think users are like begging for L1 proposer pre-ms this feels like a top- down push from ethereum right and there's just there are easier like way less complicated Solutions like this isn't going to be a challenge on salana because the block time is somewhat shorter like you could sidestep this entire infra debate just by having shorter block times and slightly higher requirements for bandwidth and hardware for proposers

which ethereum should probably do you know this has been like sacent right like I know you want to jump in here but like this this coming from someone that was more ethereum aligned a big part of my journey of really appreciating salana was actually a conversation I had with Logan again Logan keeps coming up from friction list um it's like the people in ethereum historically like oh Sal has higher higher Hardware requirements and that's an issue for decentralization and at the end of the day it's very philosophical because no one like in ethereum like if you look at concentration like no one's really running Raspberry Pi in like their kitchens you know and like the reality is um the idea of higher Hardware requirements used to be an

issue that I had in my mind and then I looked closer and it's like people should go listen to the Pod that we have with Anatolia the second one like after the year in after FTX collapse and it's like when you actually look at the p&l of blockchains like it's like you either believe you're going to make a lot of money by running a validator and like you front the capex and you believe that this is where a lot of fees are going to come through or you don't and if you don't that's a more fundamental problem but I actually think that like Hardware the higher Hardware requirements are not it's sort of like ebod to salana and I don't see it as an issue the end of the day people are going to front those higher Hardware requirements because they can make a lot

of money with fees and that's the just the state of things if you believe that users and activities can to happen in that blockchain then you don't have a problem like the same with the Bitcoin miners that are willing front huge millions of dollars in Asic chips like it's just the reality of things H say I'm going to agree with you there because even on that same point one of one of Charlie's comments was talking about um raising Max EB the effective balance um you know it has some other benefits but one thing I think we're going to see out of that is you know the validate account drop drastically which is the point but you know there's like something like 10,000 full nodes on ethereum whereas there's a million validators so we're kind of at like 100 to one and I think if if we if it drops

down closer to like 10,000 validators and then we see salana has what a couple of thousand validators running already I think the difference between the two doesn't start to look as drastic and then you start to question how much is Hardware really a a factor in that in that decentralization game yeah I I think there's probably like here's the thing about this design philosophy of PBS that I actually agree with is is there's going to be like if you look at the the transaction supply chain either of ethereum or salana it's really complicated and it's only going to get more complicated so I agree with this high level I agree with this high level idea of specialization of Labor

and trying to be strategic about which actors are doing which things but I just I think that we've gone too far in PBS and my perspective or diagnosis and anyone listening can feel free to push back is that we been really in ethereum land myopically focused on the hardware requirements for the validators and so we just keep unbundling things that validators have historically done and saying hey we can have our cake and eat a two we're still decentralized look at how many validators we have look at how low the hardware requirements are but then we just keep giving more and more things to relays and Builders and so at some point it's not really it's only if you're going to talk about one network being more decentralized than the other

you have to do it holistically you can't only you know cherry pick one metric because it just doesn't really make that much sense from my perspective to say hey yeah this network is super decentralized we've got hundreds of thousands of validators but we've got three builders that build all the blocks right like at some point that has to be a factor can you explain for folks who maybe don't listen to bell curve every week and they're stuck listening to Santi Amron on Empire can you explain maybe this PBS design philosophy and specifically you know you you and I have talked about like it being compared to maybe taxi medallions in a sense um can you maybe get into this a little bit or the proposers I guess you could say are compared to the uh medallions in

taxis so um if you run a validating node in ethereum you get to participate in consensus so you put up a certain amount of collateral you put up 32 eth in collateral and then you invest like some minimal amount of ongoing energy costs and then you also invest your time right so you're like but then what you what you're are allowed to do is participate in consensus and your reward for doing that is you get some amount of issuance but you also get um you can build blocks and people in ethereum land figured out first and a long time ago that you can actually depending on how you order those transactions within blocks you can actually make uh like some money or quite a bit of money if you're really

smart and that actually the building those blocks and trying to optimize profitability on those blocks is actually something well suited for very it's a very sophisticated that's suited for like hedge funds um specifically or people who are very you know crypto Capital markets Savvy and so that along with in the beginning of there used to be these things called priority gas auctions which was Searchers kind of bidding against each other to front run and they created all this gas was this was kind of like a an early version of this this idea of saying hey there are going to be a bunch of blocks that are built in this offchain auction which is me boost which was created by flash Bots at the time um and then that's going to be uh transmitted to proposers who

basically just get to sign off on the highest amount that that they're going to get paid and so that was the beginning of this kind of like me boost was kind of an unofficial like nonspec version of proposer Builder separation where initially you had one entity which is the validator and they built the entire block themselves and then you had two entities because this one entity has the right to propose a block they have a block Monopoly they have the right to propose that block to ethereum but then you actually have this other entity which is building the Block in a profitable way which is the Builder and so that's like the design that's the design philosophy here and and recently what's been happening in ethereum is

like well actually what if we want to give more rights and flexibility and create more financial like Financial this this very valuable contract right that proposers have so what if I want to be able to sell the right to propose in the future right or and and that's basically what what pre-confirmation are so you're actually adding financialization to this this like contract right um and and at the same time you're unbundling a lot of the responsibilities of participating in consensus so if you push that all the way over to the Limit what proposers really have is this really valuable right which is granted them by the protocol call which is to have a monopoly on building a block at at some

given point and then they farm that out they Outsource the actual building of the block to um like to the uh to the builders so I think what this kind of looks like is something really similar to what The Medallion service in NYC taxis look like which is if you're a medallion like if you drive a cab in New York you have to put up a bunch of money you pay for this thing called The Medallion and that gives you the right to drive around and pick people up and make money and in ethereum it looks pretty similar what you really have as a proposer is this protocol enforced right to make a block and then you have to put up collateral to effectively purchase that right and then you farm it out to someone else that actually does the work

for you um but the but that's the challenge as we financialized as we increasingly financialized that right and try to Grant more ability to the people that have the Monopoly um but they can actually perform that work themselves you're just giving all the execution around that stuff to builders and that's what's causing this whole big issue and problem um but that's like my take on and so I think proposer Builder separation is right we just need to have a more nuanced thought about like what the division of labor should be should it be 1% of work is the proposer and 99% are Builders or should we move it back a little bit I think yeah and I think tying that to the thing you said before that question you you would argue that look we're all super focused on

validators right right now and how many validators do you have and how big are the validators but nobody in ethereum land is talking about the maybe Builder centralization that's happened as well they are behind close for sure yeah like people are maybe not that no one's talking about it but people should be more focused on it and talking about it what do you guys think Mark and and Santi the so this is coming to salana as well like if you listen to Zano and and Lucas from goo they're also looking at it and being like we also are heading towards proposer Builder separation so do you think this is an eth thing we've been we're knocking eth quite a bit here but this is also going to come to salana at some point as well what do you guys think about that yeah it's kind of

fitting from this um Talk from research today we're all building the same thing and there's always a there's a box in the middle that does all of the work I'm I'm of the philosophy that it's okay to have some centralization in terms of like the execution and the specialization of certain tasks once the verification of it is decentralized like once the the the verification of it is decentralized once there's an alternative fall back option and once there's like no censorship resistance I don't I don't see why there's an issue I mean PBS has been running ex externally out of protocol for the past few years now and you know it users it's more or less the same thing the only issue there is like me with um

with amm and front running but apart from that I I I don't I don't really see an issue with it um I I don't know if you have any thoughts anti nope no I would agree with that also there's one um one there there's a difference as well I I feel like the uh the eth research Community is taking a lot of knocks for being like why are you focusing on this stuff I think a lot of the stuff that they're actually explicitly focused on in the road map is the right stuff to be focused on but there is a there's almost like an outof band Channel as well which is like especially around these pre-ms these are like privately funded infrastructure companies and people are kind of cheering them on and moving them towards this solution and we haven't

talked about some of the negative ramifications of something like I think that's what happened by the way I have no idea but I think the reason Paradigm is uh being more vocal about this stuff is because there are huge there are really negative drawbacks to pre-confirmation um you just you are further incentivizing uh inte like vertical integration between and Builders you're creating multi-block me which just makes censorship and me extraction much worse um and so I think I think honestly I think the Paradigm guys are kind of being like hey this you know private Market infra stuff that you know some people are pushing forward here is going to create way more negative externalities than benefits

that we're than we're going to see in ethereum R like also I think people are just fed like pre-ms who who uh someone was on a podcast talking about pre-com is talking about it taking two or three years like we just don't and and if someone's saying it's going to take two or three years that means three or four like when you compare that to what's happening in some other ecosystems where it feels like things are shipping on a quarterly basis I think people are just fed up with the long shipping times honestly but I mean the thing is we have pre-s now like all centralized sequences and all theups do pre-s now and I think you know everybody everybody's talking about decentralizing the sequences so then we're going to get this new decentralized Marketplace of sequences that you know will be the big block in

the middle it will actually allow um allow rollups to say okay look at us we don't have a centralized sequence anymore and it could possibly allow for them to capture some of the M that's happening in their own systems that right now is probably Happening by people who are placing their um like RPC nodes closer to the centralized sequencers but I think I think the thing is if if we're going to have decentralized sequencers in a shared Marketplace already and it seems like that's inevitable why not give them the role of pre-con to do in the meantime because I think that what ethereum is doing with with PBS with reaking with precom it's it's letting the free markets decide what is the best outcome

for this trial and error accelerationism and then when whatever we Converge on as the best outcome ethereum is just going to enshrine it and like okay this is the best solution we'll do this but I think the problem is that they're just taking long to do that well listen uh Mike I think you bring something really important um it is difficult to like from especially where I sit I'm not as technical but like things take a long time to build so like to be critical of like certain things at the ethereum foundation or like the ethereum there's multiple people researchers right it's it's hard right because sometimes like you have to do the difficult stuff that is not immediately going to impact users to then you know in two three years time have a really meaningful impact like

e559 right it took forever but ultimately like you know hey you know I think it was a really good thing salana is gonna at some point have to implement that so um it is kind of like I appreciate it's really frustrating but I think it's just important to like take a longer term view but like on the I want to play a game okay like U because this this relates by the way for for Mega right these narratives are really interesting right like we we talk about like decentralizing the sequencer is something that is constantly talked about let me ask you a question okay if you're an LT user what's the most important thing like for blockchains if you're going to use a blockchain what's the one or two most important things transaction settles quickly and your

transaction goes yeah transaction goes through something actually happens Mark you said it is is the I don't know Mike if you want to take a guess I mean I think you want strong settlement insurances you want to make sure your [ __ ] isn't going to get censored and then you want it to be as fast and cheap as possible are those the yeah yeah I think you all said a combination it is validity and like verifiability of the execution MH like you can you know it's settled but also you can verify it right you can contest it right so when it comes to l2s the most important thing is fraud proofs like that's one thing if you're going to use an L2 it is fraud proofs if it doesn't have fraud proof run away like and so like the question becomes like why is

decentralizing the sequencer such a hot topic because for me it doesn't it can impact liveness and censorship but it doesn't compromise verifiability like you can have your money stuck in the L2 but like at the end of the day you can take it back if you have fraud proof like you can prove hey this is malicious like and you can bring it back to L one it might take time and there might be an issue right you might get liquidated or whatever but you're not g you're not GNA get rugged and so I think like for me it's like yeah you decentralize in sequencer I get it uh it's sort of more of a hand maybe thing and the reason I bring this up is because I think it just tells you the big disconnect between what the market and Market participants think is important and what is actually

important for blockchains it's a it's a big gap like Mike you probably know this better than anyone like it's just like why are we talking about decentralizing the sequencer build goddamn broad proofs like you know I mean like there's one thing that is super important and there's another that is not important at all like at all also there's a multi and the contracts are upgradeable you know like right so yeah I don't know I don't know if you guys want toine in any of that but it's just for me it's just like I appreciate that some things like need to take years and I'm willing to be patient but I'm not willing to be patient when you don't have [ __ ] fraud proofs like

why did you raise $50 million dollar and don't have fraud proofs I'm sorry ridiculous Mark what what were you gonna say I think I mean for yeah I I I get the whole thing I think people I think we're in this new trend of shipping things before they're built but just because we have to otherwise where will the users be um and then when you ask what's important for users I agree like you know validation and verification but I I'm thinking of as like that's like second T of users I'm thinking like first te of users like people who don't who don't worry about their Amazon purchases don't think about all of that backend stuff they just want they want cheap and fast transactions and I think that's why we have centralized sequences

right now because we had to skip a couple of steps to give you know a certain type of users and I think possibly the most important if you want Mass adoption the users who are not supposed to be caring about the backend stuff we we want to give them that kind of um that same web too like ux right sorry to hit you with the internet analogy again and then I would you agree this would mega super opinion I'm like they're going to run a centralized sequencer and that's okay but and so now I think I think there's a third type who is more like an investor user and and this is where I think like decentralizing the sequencer is nice is because you can like for instance arbitrum can sell its sequencing rights to this shared Marketplace and now they can give that MV back to token holders

or rebate gas or but or whatever their implementation of it is but the point is they can use it to benefit the token holders or the users but they're tapping into new financial resources that wouldn't be possible with a centralized sequ I've got a question for you guys uh related here but something that's sort of interesting is that okay the ethereum l2s they've been most of them have been the big ones like Optimus and Mar have been live for a number of years there's a bunch of experimentation on distribution like what blast did and on the actual architecture which is what Mega eth is doing Bitcoin l2s are just getting started they're in the very early days there are no clear winners yet I would be curious what lessons have you guys learned from how eth l2s

have played out then how would you advise Bitcoin L2 teams both a to get the best outcome for like what is just the best outcome for what Bitcoin l2s could look like but then also how would you advise teams like what mistakes would you tell them to avoid I just have one point here I think it's not a very not not not the best take but you know e Bitcoin l2s are calling themselves l2s now without truly being l2s they're still trusting a multisig at the end of the day but ethereum l2s aren't true l2s either none of them are like stage twos so I think one thing from a marketing side lean on that lean like we're going to build this

and ship it probably before it's finalized I'm sorry if that's a really bad take but it seems like that's how you're going to get the most competition and accelerate the movement further and actually get what might be the best L2 for Bitcoin this episode is is brought to you by SE se's belief about the world I think is a good one they believe that the evm is here to stay agree with that they believe that the evm is going to look kind of like what JavaScript ended up looking like in the web 2 world agree with that they also believe that the evm and its current iteration lacks a lot of the performance and scalability that developers need so what SE has done with their V2 upgrade is they just introduced the first high performance parallelized

evm into the market today they've got lightning fast block times and finality of just 390 milliseconds what this does is it unlocks an entirely new design space with 100x the throughput of even some of the fastest evm l2s on the market today sav2 is now live on public devet with main net scheduled for Q2 you can stay up to date with say on X at say Network SEI Network big thanks to say hey everyone Santi and I have been talking about salana a lot recently and we're excited to you have a salana sponsor of Empire marinade is a staking protocol in salana I remember when they launched I think it was back at a salana hackathon and they were funded with this

80k grant it's super cool to see how far they've come they're the only steak pool today that delivers autore rebalancing me rewards and automatic downside protection with their new protected staking rewards you can stake natively or liquid steak with marinade and get the same high performance delegation strategy that thousands are using already to stake your soul to over a 100 of the best Salon of validators marinade has been live for over 2 years and they have audits completed by four of the top security firms in crypto the delegation strategy is a first of its kind so if you're staking your salana if you want to start staking your salana if you want to get some yield from your soul start staking today with marinade go hit the link in the show notes big thanks to

marinade for everything that they've done in salana staking land go check them out go stake your salana with marinade today this episode is brought to you by polygon polygon Labs is developing the next generation of open-source zero knowledge Tech to aggregate crypto liquidity and user bases empowering developers to grow in a unified web of interoperable chains with the agir that was a big mouthful so I'm going to tell you what it means in my in my words there's all these things popping up l2s and l3s and it's chaos right if you are building something you no longer have to worry about bootstrapping liquidity you can basically just build in the a layer to tap into the liquidity of the a layer and the users of the a layer you get the

users you get the liquidity it's the agay it's hot it's by polygon Labs they've got the polygon Community grants program it was launched with 1 billion tokens Just For polygon Builders season 1 it's live right now it features 35 million in madic to support the next generation of polygon Builders join the aggregated future today by applying at polygon.net / grants that's polygon technology grants if you talk to anyone let them know blockwork sent you this episode is brought to you by mantle mantle staked ether which is me serves as the value accumulating receipt token of mantle LSP the base yield is currently 3.2% but there's also more on

top of that mantle restes 100,000 me to generate igen layer points every single day mantle is now the third largest address getting igen layer points a big part of the igen that's going to be distributed is actually going to be given out to me e holders on mantle L2 including all the daps and there's daily screenshots Bridge the me to an L2 that's bridge. mantle. XYZ you can enjoy being a part of the uh hopefully igen that will be given out to me holders so big thanks to mantel for letting Empire listeners know about this really exciting thanks again mantel wait so Mark you're saying the recommendation is just look at what all the eth guys did without fraud like they basically just launched like side chain

secured by multisig not technically an L2 but they were actually able to get market share so like they got market share even though they're just this little side chain secured by m you're saying go do that is or you're saying learn the lesson and don't do that I'm saying that's saying it's not it's not a good take but if you want to get the like if you want to get the users we do that and or you can wait until everything's fully shipped and you can be the 20th L2 like Tao has everything running and no users it's I mean I'll take the opposite of that because the I think people are you hear this in pitches right I've been pitched 10 Bitcoin altitudes and they're like yeah we're going to do basic basically that

it's like the ethereum road map people don't care about fraud proofs and don't care about I'm like I get it deons are going to chase yield but you fundamentally don't understand your customer most Bitcoin holders probably will be a bit more different than your ethereum Deen I think um Santi what about blockfi though just out of curiosity because well true yeah I mean like this is the Paradox of the Bitcoin maximalist brain yeah which unfortunately what you're what Mike is saying is they were very critical of like bridging over using wbtc or you know but but then they ended up putting

their money in uh block F and uh you know the rest is history so you're right I mean I think it's um it's a really important point I I think on the margin it's sort of a psychological subtle thing where you're like people are in always in crypto the double standard right you're critical of stuff that happens on chain but like you're using centralized exchanges you kind of have to in many ways I think the infrastructure and security offchain has like improved vastly like um but it was like sort of I think a different era I wouldn't point the blocki as a thing to suggest that like people are not going to care about what they're doing on chain is what I'm

trying to say I think it look the most important thing is being very the thing that I tell all teams is just be very transparent in where you are in your road map like if and and people should go listen to Arch Arc Arch so I invested in them and when they're going through it I'm like let's just accept the fact that like when you're interacting in an L2 there is some security trade-off there is some tradeoff just period don't like if you're a team just don't say there aren't because you're going to be chewed like blast learned this a hard way when they launched and then they retracted they're like look they they they you know that the fact risk-free nothing is risk- free in crypto period full stop

nothing is risk free ever and it and so I think like the more you are transparent if it's a multi multisig then just say it's a multisig and we're working on fraud proofs and I think users I think appreciate that um and you know if you have issues as a user go to L2 beat uh but yeah the recommendation is ideally in a perfect world I you know get fraud proofs when you launch and I think you play the long game uh you want to build the best reputation and I think it's one of those things that it's really hard if you have an incident or you have an issue uh you know you you want to be known as the most

kind of technically competent secure L2 uh there's a reason why arbitrum is number one arbitrum used to say we inherit the full security and decentralization of ethereum on their homepage and do they say is that still on their homepage it I think I think it was last month when I checked I did I did a whole Bitcoin L2 piece and so I was looking at the marketing of these different l2s I mean I'm not I'm not fting them for it by the way right and and I think they're a great team and they're honest actors and all of that but I'm just I mean there's a I I'm I think there's a through line to what both of you guys are saying which I'm I'm on San's team in terms of you should just always be as transparent it's really obvious when

teams aren't transparent and then they have to double down and they're aggressive Founders and nobody likes that um but there probably is some I think there's an element of Truth marked what you were saying as well that yeah if you you get you get be honest about it but just get what the market wants out there as quick as possible because there are these big Network effects and I'd be curious s your perspective as an investor here like you look at something like arbitr or optimism and then you look at the investment opportunity behind one of these new l2s maybe a mega eth and what I see as the competitive advantage that arbitrum has is Network effects they've got liquidity isn't really a problem you know people talk about liquidity fragmentation all the time on l2s it's liquid enough on

arbitrum that's basically it's more liquid than many most l1s so they've got this network effect they've got uh apps they've got a bunch of eth they've got deep liquidity all that stuff but then you look at something like Mega eth they' probably got better Tech they've got incentives and they'll have a lower valuation so how do you as an investor look at like new L2 like Mega eth versus like market leader like arbitrum yeah I mean I for me I think it's worth it's a way to express like these for me it's worth in backing teams that are willing to experiment at the l2s like l2s are here to stay so you I think arbitrum is not going to go the

direction that Mega is and for me I I want to see ethereum be great again in the sense of like yeah I I'm going to back Mega because it's just a different type of design choice and I want to see that play out I think it's worth for the ecosystem to like experiment across multiple parameters so for me yeah the valuation is lower but more fundamentally like the different kind of use cases it might be you know I think Mega will end itself for different types of apps that perhaps may not be well suited in arbitrum I've always been in the mind that it's going to be a world of multi-chain um and that includes like different l2s um so

that's how I think of it um you know if it's a really good team that is willing to experiment on something that a particular L2 is not going to then why not right you could argue that blast in the same way like blast was just native yield and it was built by a team that understood because they built blur the opportunity cost of capital or you can s it and so it's just different things right and so um you know uh I've just sort of accepted the fact that it's going to be we're going to have hundreds of l2s uh perhaps the the thing that uh we don't have to talk about it here but you remember like in Devcon like it was composability is was a thing that like when when there was Zero l2s it was like oh composability is going to break

what's going to happen like this is going to be really bad and then and then I spoke with like a systems engineer who was like really old and like I guess senior and he'd been around like the 80s of the internet I'm like and I asked him the question like hey I don't have that perspective but like someone like you like didn't the internet go through this kind of problem as as well like where you know not composability but in the sense of like just stitching together just different standards or whatever he's like absolutely like he's like I'm not worried about composability I think this will we fixed it's just a matter of like you know composability is not a kind of like I think it's a spectrum so anyways like what I'm trying to say is um I think we should probably be more

focused on Mark to something you said which is always bringing it back to the user so if there's going to be hundreds of l2s well how do we make it a very seamless experience someone like Kyle out there saying like hey when you look at the wallet like the user is definitely going to notice that like his money is in like different like if you have usdc on 10 different l2s how can we make it so that liquidity moves seamlessly across these l2s and whether that's Bridges or something else right layer zero or chain whatever but I think that's where that's where I think we should focus more resources and attention and and and into like accepting the fact that we're going to have multiple l2s each with their own thriving ecosystems

and liquidity and how can we make it super easy for the user to either abstract that away or to make it seamless to hop around and you know you know so I would like to see more of that um I think we're under indexing in terms of attention and resources on there yeah let me ask you guys a question that I think the answer is I would assume you all think no but I'm curious if anyone thinks yes so we're talking about ethereum like you know maybe moving towards this like decreasing block time for faster confirmation and increasing the bandwidth to pipe through more transactions and things like that do you think that apps will come back to building on the eth L1 or has that ship sailed I think it's sailed personally

what do you guys think yeah I agree I don't I don't see that unless some drastic changes okay I I do too but I didn't know if anyone would take the other side of that it's the cost thing okay here's a uh maybe to get back to the big coin so here here's here would be a really interesting challenge for like if I was in if I was in charge of a Bitcoin L2 I'd be thinking about this what is interop going to look like in between Bitcoin l2s and here's the challenge is that we as users are all like hey if Bitcoin or ethereum or any of these chains are going to scale you need l2s that are not like probably synchronously composable but they're composable like there's good interoperability between

them but if I was the C o of a leading L2 I also know the network effects that you get and actually if I'm the biggest one what's my incentive to be interoperable with smaller l2s because then I'm literally just churning users right so well this is a very great question when you put it in context into where blast is trying to do right and for people that are may not be as familiar like obviously they announced the airdrop claim when you went out and claimed the airdrop like they they announced like they're they're basically trying to vertically integrate and just build a super chain build the wallet build and just own that customer

through and through so I think these wars with l2s um yeah I don't think there's any incentive to perhaps if you're a builder of an L2 to have interop you may want a vampire attack another L2 but there's but it's just it's one directional it's it's like once you're in my L2 like you're sticking around here and I'm make everything possible to have you stick stay around and I think that's clearly what blast is doing I mean and I think others will follow suit as well yeah if you're a smaller L2 you just have to hope that you can and you realize there's no path forward to becoming one of the major players you just have to hope that other people join this this composable network whatever form that may be and hopefully that

aggregate of l2s grows larger than some of the majors um but then that also gets into this thing like even with the shared sequencing and like you know polygons aray these extension stuff like they're not I think a lot of people think they're like L2 exclusive like L1 chains can join a shared sequencer Network and then then I start to like Wonder is there even like any advantage of being a rollup in terms of composability there so I don't know it's messy and I think I think the incentives are in play for like L the major l2s on bitcoin or ethereum to like maintain their siloed Network effects yeah as we round out I want to maybe ask you guys a question like um it

has felt that the interest in Bitcoin l2s and nfts like ordinals is like faded recently uh did we get far to ahead in the narrative um or what are you guys seeing there and are you equally as excited as you were three months ago oh man I think this is this is such a good question Santi all right so I guess it depends on that blockfi question that we were talking about and how much are people going to want to use their Bitcoin to do other things on chain like what are the cultural like how

culturally do people think differently about eth versus Bitcoin and I could see it really going either way I I've waffled on this a lot and part of me is like you know the culture there is you put your Bitcoin in your cold storage you're buried with your Ledger and that's a good life you know that's the attitude of the bitcoiners and then there's also but also a part of being like red meat and animal organs and [ __ ] red red meat talk a economics Jesus moving down to Miami and uh and then there's and then there's another part of me which is like you know it's Bitcoin is over a trillion dollars of wealth that's a huge step up from ethereum which is 300 billion that's a huge step off of salana which is 80 billion and

there's nothing to do like you can't do anything this is part of the the challenge that eth suffers is the fragmentation of I could go to this L2 or that L2 or I could stay on you know I could get a loan through maker or a or I could buy an nft or me like there's so many things to do with your eth that actually fragments it I kind of think I actually heard one of the uh the Bitcoin L2 guys give me this phrase a virgin ground like there's just nothing to do with your Bitcoin and even a smaller percentage of people with fewer things to do it could hit so I I have I don't really have a ton of conviction on ordinals but I would I wouldn't be surprised if this was just the beginning I I think it could get Mike what's your

take on bitcoin reaking after talking to uh you had the episode with David on velur David from Babylon for those aren AR familiar yeah um I think it's going to come down to how functional a platform built on bitcoin versus something like eth can be like isn't karak trying to do this as well yeah karak is really leaning into multi-asset um and that's a whole other dimension to this like I I'm not really sure if the like the way liquid staking for instance has played out is that it's very ecosystem specific and there has Lio initially tried to expand onto polka dot and salana and it just didn't work um maybe there's like an alignment issue

there staking operators are really close to like the metal of the protocol but it's kind of been very ecosystem specific it could be different in reaking um but reaking is also really close to the metal of the protocol so it wouldn't surprise me if the same Dynamic played out that there was like the eth reaking the Bitcoin reaking the salon reaking so I just I'm not sure uh about that Dynamic but then also you know you can't smart there's no smart contract functionality on bitcoin you know they use this script which is pretty non- performant and my sense from the babyon guys is that they've been really clever in terms of how to build that mechanism but I just don't know I I to be honest I'm kind of waiting to see it

in production um and try to get a sense of the demand I I don't have a lot of conviction around it yet yeah what do you guys think I get that people want to do more with their Bitcoin like you know we're seeing tvl on some of these other like Bitcoin l2s um rise up activity kind of rising up kind of fading but then just because it's that bit coin a mentality how many how many people are going to want to put their Bitcoin at stake risk their precious Bitcoin to secure some other chain I find that one a little bit harder to believe but you know okay so this was my that's what I was thinking too Mark but never underestimate a crypto person's desire to get an extra three to five percent like I I have this

with eth I'm like why are you like in the early days of staking like why are you risking all of your eth on these random websites just to get an extra three and a half% cuz you're shooting for a 10x plus that's the counter argument of that and it's a insurance policy if you're thinking about Bitcoin right now I think no no but because I've talked to a lot of funds I'm like yo I'm not gonna stake for another extra some people don't even like valid you know what I mean like they're not they're not even doing it because I'm like you know what I don't care about that extra eight% uh again people don't understand compounding um or being inflated out they're like this is I think a 10x Plus or it's going to be a zero and that's how I've sized it and how I think of it

now the question is we're making generalizations right I don't think we fundamentally it's hard to build for the current set of users because I think that one changes over time drastically as you on board Millions which I think will happen at some point if that doesn't happen then none of this matters we're going to fail as an industry so I kind of go back to something that like to's been kind of really pushing for it's like more value should occur with the app layer and if we're not s if that doesn't hold true in the next 5 10 years crypto is going to be very much on the fringes amen because one I don't think bitcoin's like a digital gold I'm sorry guys I'm gonna say it it's a social construct I get it but not enough it's

it it's nowhere gold took centuries to oif a store value and I think Bitcoin continues to be a risk asset that's just how I think of it uh I get all the properties and economics I don't think the normal user is buying Bitcoin necessarily for that reason so I kind of think uh I can't think of any industry where like where you have the possibility to make to bring on more Capital efficiency and that hasn't been C tapped on like that hasn't been like uh optimized right which is what you're saying Mike which is there's just uh this Bitcoin is Bitcoin dominance is like 50% of the entire crypto market cap that's just like a sleeping

dragon is it gonna be 100% of it no the same with it it's not for ethereum orc salana there's always a subset of users that are just going to be like very pure but for the most part I think people are going to want to you know given the choice uh to make it you know Capital wants to go in places where it could be more productive fundamentally I'm trying to think of the counter argument of that it's like maybe gold but even gold like with ETF and some other things like it's been like hyp there's been on the margin like uh it's been made more productive I guess this is this is this is literally the you know you hear gold bugs talk like bemoan the fact that more institutional investors don't own gold that's part of the argument that

eventually everyone's gonna have to buy gold the reason people don't do it is because they can't model the cash flow that that's like the go rather bu real a reate or whatever you know what I mean like yeah I I I don't um I think the other can of worms is like well for Bitcoin I think you want l2s and ordinals to work because of just fees the minute you have more fees I think one you Val like miners already appreciate how lucrative that can be and if you don't have fees then I really question the security budget for Bitcoin long term and I think at some point that comes and bites you in the ass and it's not in 40 years I'm sorry guys it's like you discount it back and at some point

that an asset like eth an asset like salana becomes far more interesting because it has it's productive it has cash flow attached to it so I've got a question for you guys or maybe a statement that I would love to get you guys perspective on you know how everyone loves to say now that all these different designs of bit uh blockchains are converging so okay Bitcoin looks a lot more ethereum like now it's gonna have rollups to kind of a like a slow non-performing base chain some other execution environment that inherits some of the properties of the base chain and then proofs are going to get posted and that's when the base chains going to be and that's what Bitcoin looks like that's what ethereum looks like Celestia even salana and in some sense you can if they get something

like PBS you kind of see everyone moving in like roughly the same direction uh although I do think salana and ethereum are meaningfully Divergent from one another but then I do think that once we all accept okay these things are all going to look really similar there are some important design decisions that are going to be really hard to um the devil's in the details on some of these small design decisions like the the fact that you can't do much on the Bitcoin main chain just from like doesn't have Smart Contracting is like really difficult um and my understanding is that Celestia doesn't have that either but they are uh their uh language um is just much more accessible for like ZK

stuff um whereas on bitcoin everyone's trying to Jimmy everything in and it's just going to make shipping way more difficult um block times like salana block times versus ethereum block times feel really significant because you don't have to do anything like based pre-confirmation you can just start if if Salon rollups or thing you can just go boop boop um and it's you know it's gonna be 400 milliseconds so no one cares um the honestly even chains like Avalanche which g a lot of [ __ ] they built for interop from day one Cosmos built from interop from day one Celestia's got an interop plan from day one I get why etherum is trying to do the Bas pre-com thing it needs to be state sponsored because there's no incentive and so I sort of feel like we're gonna we started everyone like

went off into these directions then we're all going to come back but then we're going to realize that the decisions that each chain made like the devil's in the details and it actually is g to matter a lot do you guys agree with that and if so what do you think the most important like changes are between them I I do agree with that and I think the final goal goal of all of them is or destination is really going to be path dependent like what did you start off prioritizing first is going to really shape the outcome of your end um out end goal and which and I think that's I mean obviously that's why salana is so so popular they they optimize for the execution and for the ux I mean even

even the small things like the team bringing out that phone which was a success by lock or even this blinks um application that's coming out like all of that shows you where their their head is at and how they think about bringing on to mass adoption versus how ethereum thinks with deep research and censorship resistance and yeah so I think it's it's really a path dependent and and if one thing I I can see is that cosmos's path wasn't wasn't probably wasn't the best one well let me ask you a question um well first of all I would agree a lot with what you said about salana just it's just very refreshing it's the integrated experience the user really appreciates it this blinkx thing is huge

like most teams talk about tapping into ethereum for liquidity and that's where the users are I think it's like thinking in very small scale I think s says I'm gonna go where the action and the users are in the internet like across the internet not in web in blockchains and I think it's super interesting most teams try to build distribution salana just was like n I'm just gonna try to embed and make it super easy uh Hayden had an interesting tweet like that unof tried to do this and like it didn't come kind of work we could try to like have theories as to why but um the question is so like if you're an L2 you're incredibly successful and we've asked Stephen this

question and he had an answer but like a what a what do you think we're going to have an L2 that is very successful and then branches off away from ethereum I get like the L1 the security properties and like you don't want to recreate that but like imagine a world where like you have millions of users in an L2 you can argue maybe that's possible but just imagine that wave a w like [ __ ] you have an L2 that is incredibly successful wouldn't they be hyper incentivized to just like be like ethereum let's uh we're just gonna go like the monad route or the appt I think I think we'll see that s and then like because if you're an L2 you're like I'm thinking of blast here guys if blast is in I'm like and you've already seen mon

and Aptos and Avalanche and be like in 5 years time Mike to your point you're going to probably have a really really good understanding what's like the kind of the best execution environment and then at that point you're like yeah I'm just going to Fork that boom [ __ ] ethereum okay so I think the answer is yes Santi and to answer Mike's question and your question at once I think all of these things are building towards one and then like Mike said it's going to you're going to kind of converge and then diverge and then converge and diverge and that'll be like over over the years we'll see that maybe telegram because I from my understanding like we haven't talked about telegram that's kind of the elephant in the room like we're all salivating about their distribution but it's really hard to build the tech is kind of [ __ ] I think

here here's the difference I don't I don't think it has to do with what Mike Mike I I I agree with you in one sense like the block times and all that kind of stuff we're going to wake up and realize that these little details did matter I think it comes down to the culture actually like man no no no not the cult soft thing no no no no Santi as as someone in the no no let me just push back on you the culture of you can have three identical companies building three identical things what Jason wants to say is as a Founder no no no okay STI Santi we talked to someone we talked to someone uh uh deep we uh I guess I shouldn't blow it who it was but we we talked to someone and after we stopped recording he said I'm thinking about changing

chains and we said why and he said look all the tech is commoditized at this point yeah you've got these little differences this person ZK this person's got bigger blocks smaller blocks whatever but the culture of this chain that he wants to move to is has a bigger focus on consumers and he said it's the culture of the founders and the people who work at the labs and the foundation he said all all the tech is all the same at this point and I genuinely believe that and like if you talk I don't think the tech is all the same is what I'm trying to say I think the tech will be very much the same it will be yes it will be uh can culture of I'm not saying the culture of the community I could give a [ __ ] about that I'm not saying the

community I'm saying the culture no I know that but I'm saying the but that stems from the culture of the of honestly the founders and the early team I no I agree yeah here's here's what I'll get I'll I'll I'll give ethereum the problem that ethereum has is it's far too decentralized at like the shipping level there are when we're talking about ethereum versus it's very difficult to compare because people should just appreciate like Solana right now like it's a salana foundation salana team like it's it's just one organization yeah there's a lot of teams like blink actually wasn't built by the foundation it was built by uh what's it's dialect dialectic um and and like the ZK stuff was built by like helius and jeto and a

bunch of teams so like there are like different Dev shops out there that are like which is actually pretty impressive but it's nowhere near like theorems kind of like this huge organization that it's so hard to coordinate and actually one of the things that I'm think is going to be interesting is once you have fired danc like sana's GNA kind of move more in that direction right you have two clients like you have to now just kind of just becomes harder and so like I sympathize with the the it's like actually really hard versus like top down directive like if you're any other chain is like very much top down and that makes it far easier to like make changes you know okay I I agree with that Santi here here's another thing as well that I

think um this is and I again I don't want to knock ethereum to BU here but I the reason I never like the ultrasound money meme was because it just Bitcoin had already won that brand like think about it from actually less of like a I agree with you by the way you know I think the culture stuff is important but also there's a branding element that I think people don't appreciate as much in crypto Bitcoin is a really easy to understand quick brand and Brands only really get like one word right you can't if you have to use a sentence to describe your brand you've already lost and so Bitcoin has like you know safe secure immutable like it has those words like money um and salana if you look at the recent marketing things they've done payments blinks they're like fast fast

cheap consumer and that's that's just really easy to understand and it's a huge category um and I think that's the challenge for all like I think if you're an L1 you need to have a good understanding of like what is your word and what is your culture um and I don't know the part of like ethereum's decision to focus on money and the ultrasound money I didn't like that because I thought they had a really great brand it was like technology platform Tech platform Optimist but now it's gotten dragged are they money or are they Tech is it about credible neutral it's like there are all these words it's very fragmented um and this is cosmos's challenge too like this is literally what took down Cosmos is that they don't have a common shelling point

you actually have a lot of successful Cosmos chains Celestia is a cosmos chain chain dydx but everyone's like the cosmos is dead because there's not this common shelling Point brand umbrella thing which has been really critical um and I think that goes Santi to your because I actually have also thought for a while like why wouldn't arbitrum just launch its own L1 for as long as an L1 is able to create this huge crosscurrent that apps can draft underneath then there's not much reason to like why would you leave the district bution you know the light is shining on you but as soon as that gets fragmented then there's no longer that incentive to stay I think I I I think it's one of those things where

it's inevitably going to happen at some point by one chain one L2 and then it's going to really incentivize others but that may take uh that that's dependent on on usage I think when you actually hit the limitations right because right now no one's hitting we talk about TPS and all that yes that's that's not the main critical issue right now the issue is like customer acquisition building useful apps that people want to use we're not hitting the TPS is irrelevant we're not hitting these like limitations it's more of the user experience and then think I think it might apps I think a major L1 might happen might major L2 might leave but I think it might disincentivize because it might be great you might get that L1 premium in terms of your market value

but your costs to run the chain are going to go up substantially and then you I mean the whole point is that isn't that the same argument with Hardware that we just had incentivizing the validators yeah so now you have to do do that think about that for a second yeah why was salana salana was Chicken and the Egg everyone has this problem too but the L2 right now is punting this decision because there's no reason to do it now you have hundreds of millions of users or 100 million users base us loyalty doesn't land with the L L1 it stays with the L2 why wouldn't they just kind of detract they will it's it may not happen now it's not going to

there's no incentive but like convincing validators to like to join look at dydx they were successful you know I'd argue not but I mean they were successful in convincing validators yeah yeah you can't I think that's anyway but I I more see it as like as as as these chains are going to be backend stuff like there it's it's really about which of the web two or web 3 developers are going to put link this protocol on the back end of their web two looking app I mean and I think that's like when stripe did their demo they live demo they chose Solano because they just thought that would be that was most likely to go

through would be quick and fast and make for a nice demo and it worked to their credit and so I think I think when we when we think Mass adoption I don't think it's going to be as like dedicated to one chain or the other I think it's going to be which which major app um decides to integrate this protocol into their back end and and then I and then I for that I don't really see any point of you leaving uh some an L1 like ethereum for all the liquidity and potential to get to get to that point can I make an observation about the apps that have been successful so far most apps that have been successful so far solve a problem that an L1 creates so like what I mean by that is

what are the big apps on on ethereum Lio maker a Unis swap right it's uh for people that wanted leverage on their eth for people that wanted a way to hold wealth in a stable way on chain uh Unis swap basically exists to because of uh like Mev and Arbitrage right it's not because people want to trade against some you know smart contract counterparty it's sex Dex Arbitrage is why volume flows through that and so I actually like I used I am in this phase of going through thinking of apps and like the L1 commodity money thing platform as being really separate but I actually think they might be more intertwined than you than you'd think um

and maybe this all changes when we get some mini clip Style game but I think they're pretty related actually what do you think Santi does that uh it's a good observation for ethereum this is why like the whole igen thing like was a saving narrative for ethereum this cycle I just question like how much are we going to push this financialization narrative for ethereum it's like okay take your e restake it 100 times and then and then what there's only a subset of users that like at some point are like hey maybe I should just go and try the salon of stuff because you have deep in you have ai you have it's not to say that it can't work in ethereum this is why it's important to experiment different l2s that might create an Salon type environment like uh just like when I say

that a far superior user experience in the L one um no now the question is like yeah like you could look at arbitrum arbitrum was a pretty good experience too so like I'm just gonna like I have these conflicting views in my brain because I invest I do too I don't know what the ansers I think we're not supposed to know the answers to any of this by the way because it's so goddamn early that we're not I think we'll look back and be like what the hell were we thinking okay like to be fair salana who was it mer had a good tweet about like what's salana anything have gone right right and it was I think it was something to the effect of like Solana has been very good with deep in has been very good with perhaps AI uh certainly

memes um and ethereum is farther ahead on social that's like a missing Gap with salana maybe that's the culture thing Jana that you're trying to get out but like you like got uh fantasy uh pumped out Fawn forecaster like they're all on ethereum so maybe that's the culture thing you're trying to get at someone uh I was did an episode with uh Lucas from jto like a year and a half ago and he said like the irony of so liquid staking adoption on ethereum and salana are like inverse of one another salana has a super high stake rate and really low penetration of liquid staking

it's like three or 5% and on ethereum it's got a much lower stake rate I don't know what it is around 30% something like that but a much larger percentage of liquid stake and it's because Mo there a bunch of reasons but it was because the there was the merge in the beginning and there was such a large ux challenge that Lio came in and solved and so salana built a lot of infrastructure into the actual chain like you can natively delegate in salana which you can't do in eth and as a result you have a smaller infrastructure company but does that mean it's better for users you I I don't know how to answer that question but it was Lucas who made the observation that like ironic the really poor staking experience in ethereum is what gave birth to the rise

of this massive company in the form of Lio um so it's kind of what you're saying so I I don't really know which one is better or worse um but it's interesting do you guys want to talk about blinks for a couple seconds because blinks I I do think are super yeah yeah yeah you know what do you think about them I be curious your take um so I guess just to te up the conversation for anyone who missed blinks basically what uh I didn't even know it was not salana who launched this it sounds like it's dialectic who launched this um blinks allow you to plug to do to run a blockchain transaction on any like web 2 front end basically so imagine you're on uh I think the examples I saw on Twitter were

like you're scrolling your Twitter feed and like you can uh let's say stake directly through helias or you can um uh what was another example you could like make a swap directly on Jupiter directly in your Twitter feed so it's an extension of what we saw on foraster if people were paying attention to foraster frames um it's basically what it looks like they're trying to do is bring like kind of these farcaster frames to uh to the whole web like you can do it on Twitter and you like even things like LinkedIn and stuff like that I think people are building for um but like I like blockworks could use this like blockworks could if we wanted to run a transaction on our on our website like instead of uh it it basically allows you to run a

salon and transaction on on any site is my is my understanding I saw the a couple examples from like helius and Jupiter um uh I think it's cool I think it's like I I do remember like San was saying so Hayden tweeted this out like look we we tried this in 2019 it didn't really take off I think um the counter to that is just like there was no one here in 2019 like that was like the Pico depths of the bear like that wasn't just the bear like that was the that was the dark time of the bear um I don't know yeah yeah 2019 sucked um I don't know what do I someone should created an app like where were you in the darkest times where were you exactly where were you in March 2020 and yeah

yeah yeah exactly [ __ ] I think they're cool I I'm I'm like less thinking about blinks as a product and more just like as someone who likes marketing a lot just like I I feel like we've been too like [ __ ] on Ethan liking salana here but like it is just a phenomenal like salana has just done such a good job of like everyone's we're talking about this infrastructure fatigue they've just gone like they've just hit the consumer stuff at the exact right time and they're just like everything they do is just like speed speed speed consumer consumer consumer apps apps apps right now and um like if you're a chain like the number one thing you need right now is Founders coming in building on you and like salana is a pretty enticing place for people so I

feel like we're being too overly hypy on salana and antie this podcast here but like I think blinks is a very cool product at the with the only reason of like the the Bas layer reason of just like someone needed to try this will it work will it not work I don't know but like someone had to go try this we talking about far cast or uh you know you guys did a big push and trying to see if it worked or not is this uh just better like C how would you compare cast to blinks I mean it kind of reminds me of like so I don't know I haven't even used blinks to be honest I haven't tried the product or anything like that but you guys you remember when Clubhouse was booming during uh I ran I ran a I think it was like a 24-hour hackathon did you

influenc her with st no with Stan we ran this [ __ ] room I actually remember that I do I do remember it was like wild s fell asleep I think he was snoring I'm like son and he was like yeah you remember Clubhouse and Clubhouse was booming they raised like A4 billion doll valuation and Twitter and then Twitter launched spaces spaces yeah and then clubhous died overnight and I'm not saying that's actually going to happen to farcaster because I think farcaster and Dan are like too damn good to let that happen to them but seeing this I was like this is the same product just like they're allowing you to do things in the feed basically um so I think it's cool I I remember when Clubhouse came out and I

didn't have an iPhone so I wasn't too upset when um when when Twitter just cloned them and I was like yeah now I have a chance to be cool but yeah I think um I the I I thought the same thing when I saw like the little one minute video for blinks um I thought it was like an interface agnostic version of frames and I haven't used it I've just seen like little examples online but I'm hoping it's I'm hoping it doesn't push Solana too much or at least you can change that out and I hope that you can pay for it using regular Fiat because I think those are the kind of things I want to I want this to abstract ract away all the complexity of like a blockchain in the back end for like

regular users I want it to be on a LinkedIn scroll feed and you can buy tickets for permission L using one of those links what's LinkedIn oh my God wait I actually have a funny story about LinkedIn so we talked about yo and I actually did play like three years ago for a pingpong game for the title of founder number one and founder number two and this was at an offsite and I had a couple drinky poos and after one I changed my title on LinkedIn yeah Chang it on I was like founder number one like commander-in-chief or something ridiculous couple of drinks Mike's like nine beers in how many drinks you have two more like seven and then and then Yano you

like a couple months ago you were like dude is this actually your LinkedIn and it had been there for like three years commander and chief at block workor I was like dude I think you got to change sales like hey uh someone pointed this out I think not a all a your sales conversion ratio goes up like by by a couple percentage points because people take it seriously because you're like yeah God that was um can't can't remember last time I checked LinkedIn no no me uh so here's the I think that to answer your original question there asan is I think that foraster the advantage that farcaster has is if farcaster had real adoption it's mobile right it's like mobile first which is the big thing and this is

desktop which most people don't use Twitter on desktop anymore um and I I guess like one thing I was so I think it's a hugely positive thing and I think it's very cool but then I was really thinking I was like do I want to do these actions on Twitter like what am I used to doing on Twitter I'm I'm mostly just used to reading and posting and writing and I was like maybe I could I could learn to do these other things but it's kind of a new learned activity um but imagine Mike let me push back I think think imagine it wasn't just Financial tracks imagine it wasn't just Financial tractions like imagine we had a link to permission list and it was like buy a ticket and it was just directly in the feed yeah and that was the original idea of why we were leaning into forecaster

the problem was no we didn't have any users on foraster so what blinkx allows you to do is these actions in app like mint mint a tweet or mint a mint an nft or buy a ticket to an event doesn't or or make a swap or do some Financial traction but you're meeting the users where they are and that's the the intent is yeah like I looked at the um I was looking at are blanks intents Santi did I just say that oh my no man like list salana had twoyear twoyear high in Daily transactions like the day they rolled out blinks like I think this is gonna be explosive like I think most people are underestimating this thing people Soul rallied 8% because of the ETF I'm like again I'm more way way more excited about blinks and what that does for

conversion and people don't appreciate this but like like cart abandonment is a multi-billion dollar like like Market um forget about stripe like just these are the things that like people because they don't have a good appreciation for these things like I've invested in a company that like try to fix card abandonment try to do faster checkout you don't have that problem with stable coins now put that exact like most people now shop through like Instagram they see a thing they have to like open a browser and that it's like still three steps like my Hallmark for investing is like anytime you remove friction from a flow it creates nonlinear

results that's blinks in my mind and it's meaning it you're not like it it's not push or pull it's like it's like Oh Come to crypto and create a wallet and do all this crap like no you want to buy a ticket of permission list click this thing done like it's just better than a web to it's better than putting your credit card info that's it like you know what I mean like s with Apple pay whatever like it just um for people that are still critical that like the web the the flow of web 3 is like inferior to web two I think they're in for a bit of a surprise when they go and try blinks you know what um humble opinion I agree with that Santi you know what

people the well I guess if I were in charge of the blinks product you should dog food some use cases here like go instead of this is actually something that I see in crypto a lot because there's so much infrastructure they're like hey we're a permissionless Marketplace anyone can do anything here's this menu of stuff for to do and people just come and they're like I don't know what to do with this and the Paradox of choice the Paradox of choice exactly so oh really okay put on the whole list but I it would be you know Salon I don't know if they could just go to a couple influencers and be like hey we'll like work with you like what are your you know what's your little influencer business like we'll help create some custom things for you or go to block works and be like hey we want to um so

help us guys but yeah set something up customer cool for permissionless tickets that you couldn't do otherwise like I don't know like dog food it a little bit well salana summer just kicked off in Lisbon so instead of having hack hacker houses maybe you should have these hacker elite units Navy Seals drop into companies and be like all right give us if I if I were them I'd be like I'd go to these companies give us three weeks to prove how we can meaningfully sandbox it meaningfully improve be more productive in your sales organization we'll work for free if you like it boom great yeah actually I I know we're I know we're uh almost close to time here but we haven't actually talked about the

biggest news of the week which is that bell curve guys are forming a pickle ball team and we're gonna smoke the Empire pickle ball teckle ball let's fighting words oh okay I like that Santi asked that I feel much better about our chances fighting for Santi we got to start practicing my man have you not played pick ball Santi never have I play Real Sports guys I appreciate pickle ball is the fastest growing sport in the world but I mean s you're a runner that's not a real sport okay well not a real not a real athlete H my frustrated dream is to like be a professional athlete never going to

happen listen um we're going to can we address the biggest eleph in the room here is are we going to have a a like wait room booth in permissionless I'm happy to sponsor part of it I'm happy techno Jam or whatever like my pitch to you is we have a sponsorship sales team you should buy your own booth you should literally buy a booth and call it and just literally put your face all over the booth and put the only thing in the booth there's no like you know selling things there's no merch it's just a squat rack or honestly I'll I'm going to do that I I someone like weights would have a squat rack a treadmill and like a pelaton or

whatever yeah I got I don't know how much you squat STI I I was actually yeah know I'm proud of you for making that 800 Club I was going to tell you I because my back's been all messed up and I got finally got back over like 200 and I was going to brag that brag to you about that then you were like oh Mr 800 Club over here so I don't know you're these days it's all elaborate to get to buy a [ __ ] booth at permission L it's all a big sales [ __ ] tell me we're in a bare Market what the [ __ ] have all these funds bu a booth come on the lengths I'm going to to sell sponsorship Bo very pretty creative part of the reason why invested in this um but anyways if you're a f I'm

actually shout out if you're a listener you want to sponsor Booth with me honestly if you're going to sponsor a crappy booth give stickers or are you going to have a booth with like the weight racks and guess where people going to show up you know the pelaton the weight rack in the in the in the tread Mar I regret joining this [Laughter] episode how long we this for y how long are we be doing Empire for I don't know I know I think three years and Mark is the first one to flex on Empire I was

say we have we have never flexed in this three and a half years we might have to change that yeah gota wear a different shirt for that but anyways yeah okay all right good good up I just got embarrassed by Mark can you DM me your yeah Mark tell me your tell me your training program man yeah s some soul all right yeah post post your soul address I blink blink blink tip blink yeah yeah yeah good pod yeah thanks for coming on Mike and Mark pleasure you guys are welcome back anytime all right you heard about say a couple times just want to give them one last shout out big thanks to se for sponsoring this episode of

Empire there are a ton of reasons to build on say if you want to get in touch with them you can reach out to me I'll put you in touch directly with the team you can also get in touch with them on Twitter at say Network you can follow the journey at say Network they are currently live they've got SA to on public devet today main net goes live later in Q2 really excited to have SE sponsoring and partnering with us on this episode of Empire [Music]